Symantec 2008 Annual Report Download - page 43

Amendment and Termination of the New ESPP
Our Board may at any time amend or terminate the New ESPP without the approval of the stockholders or
employees, except that a termination generally cannot adversely affect options then outstanding (although the New
ESPP provides for certain exceptions to this rule). We will seek stockholder approval of any plan amendment where
stockholder approval is required under applicable law, including if we seek to increase the number of shares of
common stock reserved for issuance under, or expand the class of employees eligible to participate in, the New
ESPP.
The New ESPP expires ten years from the date the stockholders approve it, unless sooner terminated by the
Board or unless we obtain stockholder approval of an amendment that extends the plan’s term.
New Plan Benefits
Because benefits under the New ESPP will depend on the fair market value of our common stock at various
future dates, it is not possible to determine the benefits that will be received by employees if the New ESPP is
approved by our stockholders. During fiscal year 2008, three Named Executive Officers participated in the Old
ESPP.
U.S. Federal Income Tax Consequences
The following is a brief summary of the general U.S. federal income tax consequences to U.S. taxpayers and
Symantec of shares purchased under the Statutory Plan, which is a sub-plan of the New ESPP. This summary is not
complete and does not discuss the tax consequences of a participant’s death or the income tax laws of any state or
foreign country in which the participant may reside. Tax consequences for any particular individual may be
different.
The Statutory Plan and the options granted under the Statutory Plan are intended to qualify for favorable
federal income tax treatment associated with rights granted under an “employee stock purchase plan” that qualifies
under provisions of Section 423 of the Code.
Amounts of a participant’s compensation withheld for the purchase of shares of our common stock under the
Statutory Plan will be subject to regular income and employment tax withholding as if such amounts were actually
received by the employee. Other than this, no income will be taxable to a participant until sale or other disposition of
the acquired shares. Under current law, no other withholding obligation applies to the events under the Statutory
Plan.
Tax treatment upon transfer of the purchased shares depends on how long the participant holds the shares from the
Purchase Date to the transfer date. If the stock is disposed of more than two years after the Offering Date, and more than
one year after the Purchase Date for the stock being transferred, then the lesser of (i) the excess of the fair market value of
the stock at the time of such disposition over the purchase price or (ii) the excess of the fair market value of the stock as of
the Offering Date over the purchase price (determined as of the Offering Date) will be treated as ordinary income. Any
further gain will be taxed as a long-term capital gain. Under current law, long-term capital gains are generally subject to
lower tax rates than ordinary income. If the fair market value of the stock on the date of the disposition is less than the
purchase price paid for the shares, there will be no ordinary income, and any loss recognized will be a capital loss.
If the stock is sold or disposed of before the expiration of either of the holding periods described above, then the
excess of the fair market value of the stock on the Purchase Date for the shares over the purchase price will be treated
as ordinary income at the time of the sale or disposition. The balance of any gain will be treated as capital gain. Even
if the stock is disposed of for less than its Purchase Date fair market value, the same amount of ordinary income is
attributed to the participant, and a capital loss is recognized equal to the difference between the sales price and the
fair market value of the stock on such Purchase Date. Any capital gain or loss will be short-term or long-term,
depending on how long the stock has been held.
There are no U.S. federal income tax consequences to Symantec by reason of the grant or exercise of options
under the New ESPP. Symantec is entitled to a deduction to the extent amounts are taxed as ordinary income to a
participant.
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