Symantec 2010 Annual Report Download - page 37

deduction limit if it otherwise meets the requirements of Section 162(m). The 2004 Plan is intended to comply with
the requirements of Section 162(m) of the Code such that performance-based awards in excess of $1 million
payable to our Chief Executive Officer and our three other most highly compensated executive officers (excluding
our Chief Financial Officer) may be deductable by us.
Non-Employee Director Equity Awards. Under the 2004 Plan, non-employee directors may be granted stock
options and other awards either on a discretionary basis or pursuant to policy adopted by the Board. Pursuant to a
policy adopted by the Board, each non-employee member of the Board receives an annual award of fully-vested
restricted stock units having a fair market value on the grant date equal to $200,000, with this value prorated for new
non-employee directors from the date of such director’s appointment to the Board to the date of the first Board
meeting in the following fiscal year.
Corporate Transaction. In the event of a change of control of Symantec (as set forth in the 2004 Plan), the
buyer may either assume outstanding awards or substitute equivalent awards. If the buyer fails to assume or
substitute awards issued under the 2004 Plan, all awards will expire upon the closing of the transaction, and the
Board will determine whether the change of control will have any additional effect, including acceleration of the
vesting of the awards. Unless otherwise determined by the Board, all unvested stock option and RSU awards made
to non-employee directors under the 2004 Plan will accelerate and vest in full.
Amendment or Termination of 2004 Plan. The Board may at any time amend or terminate the 2004 Plan in
any respect; provided, that the Board may not, without the approval of the stockholders of Symantec, amend the
2004 Plan to increase the number of shares that may be issued under the 2004 Plan, change the designation of
employees or class of employees eligible for participation in the 2004 Plan or materially modify a provision of the
2004 Plan if the modification requires stockholder approval under rules of the NASDAQ Stock Market.
Termination Date. The 2004 Plan will terminate on July 20, 2014 unless terminated earlier.
Summary of Federal Income Tax Consequences of Awards Granted under the 2004 Equity Incentive
Plan
The following is a general summary as of the date of this proxy statement of the U.S. federal income tax
consequences to Symantec and participants in the 2004 Plan with respect to awards granted under the 2004 Plan.
U.S. federal tax laws may change and U.S. federal, state and local tax consequences for any participant will depend
upon his or her individual circumstances.
Tax Treatment of the Participant
Incentive Stock Options. An optionee will recognize no income upon grant of an ISO and will incur no tax
upon exercise of an ISO unless for the year of exercise the optionee is subject to the alternative minimum tax
(“AMT”). If the optionee holds the shares purchased upon exercise of the ISO (the “ISO Shares”) for more than one
year after the date the ISO was exercised and for more than two years after the ISO’s grant date (the “required
holding period”), then the optionee generally will realize long-term capital gain or loss (rather than ordinary
income or loss) upon disposition of the ISO Shares. This gain or loss will equal the difference between the amount
realized upon such disposition and the amount paid for the ISO Shares upon the exercise of the ISO.
If the optionee disposes of ISO Shares prior to the expiration of the required holding period (a “disqualifying
disposition”), then gain realized upon such disposition, up to the difference between the option exercise price and
the fair market value of the ISO Shares on the date of exercise (or, if less, the amount realized on a sale of such ISO
Shares), will be treated as ordinary income. Any additional gain will be capital gain, and treated as long-term capital
gain or short-term capital gain depending upon the amount of time the ISO Shares were held by the optionee.
Alternative Minimum Tax The difference between the exercise price and fair market value of the ISO Shares
on the date of exercise is an adjustment to income for purposes of the AMT. Alternative minimum taxable income is
determined by adjusting regular taxable income for certain items, increasing that income by certain tax preference
items and reducing this amount by the applicable exemption amount. If a disqualifying disposition of the ISO
Shares occurs in the same calendar year as exercise of the ISO, there is no AMT adjustment with respect to those
ISO Shares. Also, upon a sale of ISO Shares that is not a disqualifying disposition, alternative minimum taxable
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