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CMA » Topics » SECTION 8 SECTION 409A OF THE CODE

These excerpts taken from the CMA 10-K filed Feb 24, 2009.

SECTION 8
SECTION 409A OF THE CODE

 

It is the intention of the Corporation that no Award shall be “deferred compensation” subject to Section 409A of the Code, unless and to the extent that the Committee specifically determines otherwise, and the Plan and the terms and conditions of all Awards shall be interpreted accordingly.  If the Committee determines

 

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that an Award is subject to Section 409A of the Code, then the Award shall be paid or settled only upon the Award Recipient’s death, Disability, or Separation from Service, or upon a Change of Control, or upon such date(s) or pursuant to a schedule designated by the Committee, as specified in the applicable Award Agreement, subject to the following provisions:

 

1.                                       Delay for Specified Employees.  Notwithstanding any provision of this Plan or the terms of an Award Agreement to the contrary, an Award that is granted to a Specified Employee and that is to be paid or settled upon such Specified Employee’s Separation from Service shall not be paid or settled prior to the earlier of (i) the first day of the seventh (7th) month following the date of such Specified Employee’s Separation from Service or (ii) the Specified Employee’s death.

 

2.                                       Distribution in the Event of Income Inclusion Under Code Section 409A.  If an Award fails to meet the requirements of Section 409A of the Code, the Award Recipient may receive payment in connection with the Award before the Award would otherwise be paid, provided, however, that the amount paid to the Award Recipient shall not exceed the lesser of: (i) the amount payable under such Award, or (ii) the amount to be reported pursuant to Section 409A of the Code on the applicable Form W-2 (or Form 1099) as taxable income to the Award Recipient.

 

3.                                       Distribution Necessary to Satisfy Applicable Tax Withholding.  If the Corporation is required to withhold amounts to pay the Award Recipient’s portion of the Federal Insurance Contributions Act (FICA) tax imposed under Code Sections 3101, 3121(a) or 3121(v)(2) with respect to an amount that is or will be paid to the Award Recipient under the Award before the amount otherwise would be paid, the Committee may withhold an amount equal to the lesser of: (i) the amount payable under such Award, or (ii) the aggregate of the FICA taxes imposed and the income tax withholding related to such amount.

 

4.                                       Delay in Payments Subject to Code Section 162(m).  In the event the Corporation reasonably anticipates that the payment of benefits under an Award would result in the loss of the Corporation’s Federal income tax deduction with respect to such payment due to the application of Code Section 162(m), the Committee may delay the payment of all such benefits under the Award until (i) the first taxable year in which the Corporation reasonably anticipates, or should reasonably anticipate, that if the payment were made during such year, the deduction of such payment would not be barred by application of Code Section 162(m) or (ii) during the period beginning with the date of the Award Recipient’s Separation from Service (or, for Specified Employees, the date which is six (6) months after the date of the Award Recipient’s Separation from Service) and ending on the later of (A) the last day of the taxable year of the Corporation which includes such date or (B) the 15th day of the third month following the date of the Award Recipient’s Separation from Service (or, for Specified Employees,

 

17


 

SECTION 8

SECTION 409A OF THE CODE



 



It is the intention of the
Corporation that no Award shall be “deferred compensation” subject to Section 409A
of the Code, unless and to the extent that the Committee specifically
determines otherwise, and the Plan and the terms and conditions of all Awards
shall be interpreted accordingly.  If the
Committee determines



 



16















 



that an Award is subject to Section 409A
of the Code, then the Award shall be paid or settled only upon the Award
Recipient’s death, Disability, or Separation from Service, or upon a Change of
Control, or upon such date(s) or pursuant to a schedule designated by the
Committee, as specified in the applicable Award Agreement, subject to the
following provisions:



 



1.                                       Delay for
Specified Employees.  Notwithstanding
any provision of this Plan or the terms of an Award Agreement to the contrary,
an Award that is granted to a Specified Employee and that is to be paid or
settled upon such Specified Employee’s Separation from Service shall not be
paid or settled prior to the earlier of (i) the first day of the seventh
(7th) month following the date of such Specified Employee’s Separation from
Service or (ii) the Specified Employee’s death.



 



2.                                       Distribution in the Event of Income
Inclusion Under Code Section 409A.  If an Award fails to
meet the requirements of Section 409A of the Code, the Award Recipient may
receive payment in connection with the Award before the Award would otherwise
be paid, provided, however, that the amount paid to the Award Recipient shall
not exceed the lesser of: (i) the amount payable under such Award, or (ii) the
amount to be reported pursuant to Section 409A of the Code on the
applicable Form W-2 (or Form 1099) as taxable income to the Award
Recipient.



 



3.                                       Distribution
Necessary to Satisfy Applicable Tax Withholding.  If the Corporation is required to withhold
amounts to pay the Award Recipient’s portion of the Federal Insurance
Contributions Act (FICA) tax imposed under Code Sections 3101, 3121(a) or
3121(v)(2) with respect to an amount that is or will be paid to the Award
Recipient under the Award before the amount otherwise would be paid, the
Committee may withhold an amount equal to the lesser of: (i) the amount
payable under such Award, or (ii) the aggregate of the FICA taxes imposed
and the income tax withholding related to such amount.



 



4.                                       Delay in
Payments Subject to Code Section 162(m).  In the event the Corporation reasonably
anticipates that the payment of benefits under an Award would result in the
loss of the Corporation’s Federal income tax deduction with respect to such
payment due to the application of Code Section 162(m), the Committee may
delay the payment of all such benefits under the Award until (i) the first
taxable year in which the Corporation reasonably anticipates, or should reasonably
anticipate, that if the payment were made during such year, the deduction of
such payment would not be barred by application of Code Section 162(m) or
(ii) during the period beginning with the date of the Award Recipient’s
Separation from Service (or, for Specified Employees, the date which is six (6) months
after the date of the Award Recipient’s Separation from Service) and ending on
the later of (A) the last day of the taxable year of the Corporation which
includes such date or (B) the 15th day of the third month following the
date of the Award Recipient’s Separation from Service (or, for Specified
Employees,



 



17















 



EXCERPTS ON THIS PAGE:

10-K (2 sections)
Feb 24, 2009

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