Symantec 2010 Annual Report Download - page 43

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 ESPP. Symantec is entitled to a deduction to the extent amounts are taxed as ordinary income to a
participant.
Symantec may also grant options under Non-Statutory Plans to employees of our designated subsidiaries and
affiliates that do not participate in the Statutory Plan. The specific terms of such Non-Statutory Plans are not yet
known; accordingly, it is not possible to discuss with certainty the relevant tax consequences of these Non-Statutory
Plans. The Non-Statutory Plans will be sub-plans of the ESPP that are generally not intended to qualify under the
provisions of Sections 421 and 423 of the Code. Therefore, it is likely that at the time of the exercise of an option
under a Non-Statutory Plan, an employee subject to tax under the Internal Revenue Code would recognize ordinary
income equal to the excess of the fair market value of the stock on the date of exercise and the purchase price,
Symantec would be able to claim a tax deduction equal to this difference, and Symantec would be required to
withhold employment taxes and income tax at the time of the purchase.
Accounting Treatment
Symantec recognizes compensation expense in connection with options outstanding under the ESPP in
accordance with authoritative guidance on stock compensation. So long as Symantec continues issuing shares under
the ESPP with a purchase price at a discount to the fair market value of its stock, Symantec will recognize
compensation expense which will be determined by the level of participation in the ESPP.
New Plan Benefits
Because benefits under the ESPP 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 they participate in the ESPP. During
fiscal year 2010, three Named Executive Officers participated in the ESPP.
As of July 2, 2010, since the inception of the ESPP, the aggregate number of shares issued to each named
executive officer and the various indicated groups under the ESPP are:
Name
Number of Shares
Issued Under ESPP
Named Executive Officers:
Enrique Salem .................................................. 1,691
James A. Beer................................................... —
Gregory W. Hughes............................................... —
William T. Robbins ............................................... 1,590
J. David Thompson ............................................... 1,232
All current executive officers as a group (8 persons) .................... 8,675
All current non-employee directors as a group (9 persons)................ —
All employees, excluding current executive officers ..................... 4,355,261
THE BOARD RECOMMENDS A VOTE “FOR” APPROVAL OF PROPOSAL NO. 4
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