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Stock Purchase Plan
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Glossary
After-tax Paycheck Deductions
Deductions taken from your pay after Social Security (FICA and Medicare) and federal unemployment insurance (FUTA) taxes and other applicable federal, state and local taxes are withheld.
Annual Enrollment
The period of time each year designated by the Company when you may generally enroll in plans and make changes to your benefit elections, if allowed by the plan.
Average Market Price
The average market price is the fair market value (that is, the average of the high and low prices) of the stock on the New York Stock Exchange composite tape on that particular day.
Before-tax (pre-tax)
Contributions taken from your paycheck generally before Social Security (FICA and Medicare) and federal unemployment insurance (FUTA) taxes and other applicable federal, state, local and other income taxes are withheld.
For certain plans, such as the Marsh & McLennan Companies 401(k) Savings & Investment Plan, MMA 401(k) Savings & Investment Plan and the Supplemental Savings & Investment Plan, contributions are taken from your paycheck after Social Security and federal unemployment insurance taxes are withheld but before federal, and, if applicable, state or local income taxes are withheld.
Dividends
A payment by a company out of earnings, to the company's shareholders.
Eligible Base Pay
For Marsh & McLennan Companies employees (other than MMA):
Eligible base pay rate is your base pay rate excluding overtime, bonuses, commissions or other extra compensation.
For MMA employees:
Eligible base pay rate is your base pay rate or your regular draw against commissions (if you do not receive an annual base salary) excluding overtime, bonuses, commissions, and other extra compensation.
Eligible Pay for Contributions
Eligible pay is your annual base pay but does not include pay that is:
- bonus
- commission
- incentive pay
- long term disability pay
- overtime
- other forms of additional compensation.
Form W-9
W-9 Form (Request for the taxpayer identification number (TIN) and certification) is the standard form published by the IRS (Internal Revenue Service), used by payers to request TIN information.
Form W-8BEN
W-8BEN (certificate of foreign status) is the standard form published by the IRS (Internal Revenue Service) used by payers to request information regarding U.S. non-citizen status.
Gain
The excess of sales price over purchase price.
Regular Draw
Regular draw means a draw against commissions not subject to retroactive deduction.
Internal Revenue Code Limit
- Under current IRC rules, you may buy up to $25,000 worth of whole shares during a plan year, based on the undiscounted fair market value of the shares at the start of the plan year
- Shares of Company common stock are purchased at the end of each calendar quarter; while there is no separate per-quarter limit, there is a plan year limit on the number of shares that can be purchased.
- If you reach the maximum number of shares, the balance you accumulated (contributions and interest accrued) that exceeded the amount actually needed to purchase shares at the end of that quarter will be refunded to you in the next available pay cycle.
- If you have purchased the maximum number of shares before the last quarter of the plan year, you may not contribute in any remaining periods.
Suppose the undiscounted share price in effect at the start of the 2011–2012 plan year is $25. Because of the IRS rule, the maximum number of full shares that you could buy for the plan year is 1,000 ($25,000 ÷ $25 = 1,000).
How the IRC limit applies to you
Suppose the undiscounted share price in effect at the start of the 2011–2012 plan year is $25. Because of the IRS rule, the maximum number of whole shares that you could buy for the plan year is 1,000 ($25,000 ÷ $25 = 1,000). Let's assume that you purchase 400 shares after the first calendar quarter. This leaves you with 600 shares to purchase in subsequent calendar quarters. At the end of the second calendar quarter, you purchase 375 shares. This leaves you with 225 shares to purchase in subsequent calendar quarters. At the end of the third calendar quarter, you purchase 225 shares and have reached the maximum share limit, as illustrated below:
* Assumes maximum share limit for the plan year is 1,000 shares.
As shown in the table, you would reach the maximum share limit of 1,000 during the third calendar quarter. Your balance would purchase the remaining 225 shares using the discounted purchase price as of June 30. Any remaining cash balance contributed during the quarter would be refunded in your July 15 paycheck. You would not contribute in the fourth quarterly purchase period because you have already reached the maximum share limit for the plan year. Provided you remain eligible, your contributions would resume at the start of the next plan year, beginning in October.
Long-Term Capital Gain
The profit from the sale of a capital asset, like a share of stock, if held for a period of more than one year. The holding period begins on the day after you buy an asset and ends on the day you sell it.
Long Term Disability
A medical condition that lasts for an extended period of time, usually more than six months, and makes you unable to perform your job.
Loss
The deficit of sales price over purchase price.
Short Term Disability
A medical condition that lasts for a period of time, usually less than six months, and makes you unable to perform your job.
Vesting Service
Vesting service generally includes the years of service based on your regular or temporary employment with the Company. Vesting service may also include:
- service with non-participating companies in the Company's control group (e.g., a foreign subsidiary)
- credit for service if you were initially hired by Marsh & McLennan Companies or MMA as a leased employee and you subsequently become a regular or temporary employee
- credit for pre-acquisition service for certain purposes under the Plan, as determined by the Company acting through its representative for employees of acquired businesses.
Vesting service is used to determine when you are eligible for the Plan.