Symantec 2016 Annual Report Download - page 39

Administration. The Compensation Committee administers the 2013 Plan (except when the Board decides to
directly administer the 2013 Plan).
Section 162(m) Considerations. Section 162(m) of the Internal Revenue Code of 1986, as amended (the
“Code”) generally disallows a federal income tax deduction to public companies for compensation paid to the
company’s chief executive officer and three other most highly compensated officers (excluding our chief finan-
cial officer) (“covered employees”) to the extent that any of them receive more than $1.0 million in compensa-
tion in any single year. However, if compensation qualifies as performance based compensation for
Section 162(m) purposes, an employer may deduct the compensation for federal income tax purposes, even if the
compensation exceeds $1.0 million in a single year. The 2013 Plan is intended to comply with the requirements
of Section 162(m) of the Code such that performance-based awards in excess of $1.0 million payable to our
covered employees may be deductible by us.
Non-Employee Director Equity Awards. Under the 2013 Plan, non-employee directors may be granted stock
options and other equity awards either on a discretionary basis or pursuant to policy adopted by the Board, except
that no non-employee director will be eligible to receive more than 2,000,000 shares in any one fiscal year. Pur-
suant to a policy adopted by the Board effective April 2, 2016, 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
$275,000, with this value prorated for new non-employee directors from the date of such director’s appointment
to the Board to the end of the fiscal year.
Corporate Transaction. In the event of a change of control of Symantec (as set forth in the 2013 Plan), the
buyer may either assume outstanding awards or substitute equivalent awards. If the buyer fails to assume or sub-
stitute awards issued under the 2013 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 2013 Plan will accelerate and vest in full. A change of control of
Symantec must also qualify as a change in control within the meaning of Section 409(A) of Code and the regu-
lations thereunder.
Amendment or Termination of 2013 Plan. The Board may at any time amend or terminate the 2013 Plan in
any respect; provided, that the Board may not, without the approval of the stockholders of Symantec, amend the
2013 Plan to increase the number of shares that may be issued under the 2013 Plan, change the designation of
employees or class of employees eligible for participation in the 2013 Plan or materially modify a provision of
the 2013 Plan if the modification requires stockholder approval under rules of the NASDAQ Stock Market.
Termination Date. The 2013 Plan will terminate on October 22, 2023 unless terminated earlier.
Summary of Federal Income Tax Consequences of Awards Granted under the 2013 Equity Incentive Plan,
as Amended
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 2013 Plan with respect to awards granted under the 2013 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 the grant of an incentive stock option
(“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 differ-
ence between the amount realized upon such disposition and the amount paid for the ISO Shares upon the
exercise of the ISO.
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