Edgar Filing: RYERSON TULL INC /DE/ - Form DEF 14A
director who was not a director at the beginning of the 24-month period was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period.
The Plan is administered by the Committee. Under the terms of the Plan no member of the Committee is eligible to receive an award while serving on such Committee (and no member would receive an award in any event because awards are limited to employees and no Committee member is or has been an employee of the Company or any of its subsidiaries). The Committee has authority to interpret the Plan, to establish, amend and rescind rules and regulations for the administration of the Plan, and to delegate to one or more senior executive officers of the Company the right to administer the Plan as it pertains to employees who are not officers of the Company or any other Corporate Unit. Except with respect to Plan provisions respecting a Change of Control of the Company, the Board of Directors of the Company may amend, suspend or terminate the Plan at any time.
Federal Tax Issues And Other Information
An award constitutes ordinary income taxable to a participant in the year in which the award is paid. Subject to the provisions of Section 162(m) of the Code and regulations promulgated thereunder (collectively, the Code ), the Company or appropriate Corporate Unit generally will be entitled to a corresponding deduction for the year to which awards under the Plan are paid (or, to the extent deferred, for the year in which paid) with the possible exception of payments made upon a change of control. In August 1993, the Omnibus Budget Reconciliation Act of 1993, among other things, amended Section 162(m) of the Code to limit the allowable deduction for compensation paid or accrued with respect to the chief executive officer and the four most highly compensated officers of a publicly held corporation at the end of each fiscal year (commencing for fiscal years beginning on or after January 1, 1996). Pursuant to Internal Revenue Service regulations, certain types of compensation are excluded from this deduction limit, including payments subject to the attainment of objective performance goals and satisfaction of a disinterested director requirement and of a stockholder approval requirement.
Awards under the Plan meet the performance-based compensation requirement of the Code because the awards are paid upon meeting the minimum financial performance standards established by the Committee for each award period. The Plan s administration by the Committee, as limited by Plan provisions governing the Committee s discretion in making awards to the chief executive officer and participants for purposes of Section 162(m) of the Code, meets the second requirement. The submission of the Plan to stockholders for approval and the establishment of Plan provisions (i) limiting maximum awards, (ii) authorizing the Committee to condition awards in order to preserve the Company s tax deductions under Section 162(m), and (iii) precluding the Committee from exercising its discretion to increase awards to executives subject to Section 162(m) of the Code, are intended to qualify awards made for 2003 and thereafter so as to preserve the Company s federal tax deduction, if and when awards are paid under the Plan.