Company: CXAI
Filing Date: 2025-04-07
Form Type: PRE 14A
Source: 0001829126-25-002441
Chunk: 57

Company: CXApp Inc.
Filing Date: 2025-04-07
Form: PRE 14A
Chunk 57
---
 of the Code provides certain requirements for non-qualified deferred compensation arrangements with respect to an individual’s
deferral and distribution elections and permissible distribution events. Awards granted under the Incentive Plan with a deferral feature
will be subject to the requirements of Section 409A of the Code. If an award is subject to and fails to satisfy the requirements
of Section 409A of the Code, the recipient of that award may recognize ordinary income on the amounts deferred under the award, to
the extent vested, which may be prior to when the compensation is actually or constructively received. Also, if an award that is subject
to Section 409A fails to comply with Section 409A’s provisions, Section 409A imposes an additional 20% federal income
tax on compensation recognized as ordinary income, as well as interest on such deferred compensation. Certain states have enacted laws
similar to Section 409A which impose additional taxes, interest and penalties on non-qualified deferred compensation arrangements.
The Company will also have withholding and reporting requirements with respect to such amounts.

Medicare Surtax.
A participant’s annual “net investment income” as defined in Section 1411 of the Code may be subject to a 3.8%
federal surtax (generally referred to as the “Medicare Surtax”). Net investment income may include capital gain and/or loss
arising from the disposition of shares subject to a participant’s awards under the Incentive Plan. Whether a participant’s
net investment income will be subject to the Medicare Surtax will depend on the participant’s level of annual income and other factors.

Tax Effect for the Company.
The Company will generally be entitled to a tax deduction in connection with an award under the Incentive Plan in an amount equal to the
ordinary income realized by a participant and at the time the participant recognizes such income (for example, the exercise of a nonstatutory
stock option). Special rules limit the deductibility of compensation paid to our chief executive officer and other “covered employees”
as determined under Section 162(m) and applicable guidance. Under Section 162(m), the annual compensation paid to any of these
specified executives will be deductible only to the extent that it does not exceed $1,000,000.

Vote Required

Approval of the
Incentive Plan requires the affirmative vote of a majority of the shares of our common stock present at the Annual Meeting
(including virtually or by proxy) and entitled to vote. Abstentions will count