Symantec 2010 Annual Report Download - page 38

income is reduced in the year of sale by the excess of the fair market value of the ISO Shares at exercise over the
amount paid for the ISO Shares.
Nonstatutory Stock Options An optionee will not recognize any taxable income at the time a NSO is granted.
However, upon exercise of a NSO, the optionee must include in income as compensation an amount equal to the
difference between the fair market value of the shares on the date of exercise and the optionee’s exercise price. The
included amount must be treated as ordinary income by the optionee and will be subject to income tax withholding
by Symantec if the optionee is an employee. Upon resale of the shares by the optionee, any subsequent appreciation
or depreciation in the value of the shares will be treated as long-term or short-term capital gain or loss depending
upon the amount of time the NSO shares were held by the optionee.
Restricted Stock Units. In general, no taxable income is realized upon the grant of a RSU award. The
participant will generally include in ordinary income, which will be subject to income tax withholding by Symantec
if the participant is an employee, the fair market value of the shares of stock that are delivered to the participant upon
settlement, which generally occurs at the time the RSUs vest. The 2004 Plan allows Symantec to withhold shares
from the RSU award to satisfy the participant’s withholding tax obligation, with Symantec retiring those shares and
being required to tender cash from its general funds to the applicable tax authorities in an amount equal to the value
of the shares withheld.
Restricted Stock. A participant receiving restricted shares for services recognizes taxable income when the
shares become vested. Upon vesting, the participant will include in ordinary income an amount, which will be
subject to income tax withholding by Symantec if the participant is an employee, equal to the difference between the
fair market value of the shares at the time they become substantially vested and any amount paid for the shares.
Upon resale of the shares by the participant, subsequent appreciation or depreciation in the value of the shares is
treated as long-term or short-term capital gain or loss depending on the amount of time the shares were held by the
participant.
Stock Appreciation Rights. A grant of a SAR has no federal income tax consequences at the time of grant.
Upon the exercise of SARs, the value of the shares or other consideration received is generally taxable to the
recipient as ordinary income, which will be subject to income tax withholding by Symantec if the recipient is an
employee.
Tax Treatment of Symantec
Subject to any withholding requirement, the standard of reasonableness, and (if applicable) Section 162(m) of
the Code, Symantec generally will be entitled to a deduction to the extent any participant recognizes ordinary
income from an award granted under the 2004 Plan.
ERISA Information
The 2004 Plan is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974,
as amended.
Accounting Treatment
Symantec will recognize compensation expense in connection with awards granted under the 2004 Plan as
required under applicable accounting standards. Symantec currently recognizes compensation expense associated
with equity awards over an award’s requisite service period and establishes fair value of equity awards in
accordance with applicable accounting standards.
New Plan Benefits
Except as described in “— Summary of our 2004 Equity Incentive Plan — Non-Employee Director Equity
Awards” above, future awards to directors, executive officers, employees and other eligible participants under the
2004 Plan are discretionary and cannot be determined at this time. Further, since the number of shares subject to the
RSUs to be granted to non-employee directors under the 2004 Plan depends on the fair market value of our common
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