Performance Awards. In the case of a Performance Award, the deferral election must be received by the Company no later than six (6) months before the end of the applicable Performance Period, provided that # the Participant was employed continuously from the later of the first day of the Performance Period or the date on which the Performance Measure was established through the date of election, # the election to defer is made before such compensation has become readily ascertainable (i.e., substantially certain to be paid), and # the Performance Period is at least twelve (12) months in length and the Performance Measure was established within ninety (90) days after commencement of the Performance Period.

With respect to bonuses that are performance-based compensation, and based upon a performance period of at least twelve months, the initial deferral election may be made as late as six months before the end of the performance period, provided that the Participant performed services continuously from the date upon which the performance criteria are established through the date upon which the Participant makes the initial deferral election. In no event may an election to defer performance-based compensation be made after such compensation has become both substantially certain to be paid and readily ascertainable. The term performance-based compensation means compensation where the amount of, or entitlement to, the compensation is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least twelve consecutive months in which the Eligible Employee performs services.

An election to defer must be made in a manner satisfactory to the Retirement Committee and must be received by the Retirement Committee on or before the last business day of the year preceding the year for which performance is measured to determine the granting of an incentive compensation award. Notwithstanding the foregoing, in the case of any incentive compensation award that qualifies as being “performance-based compensation” within the meaning of [Section 409A] and that is attributable to a performance period that is at least 12 months in duration and is based on performance criteria established no later than the date 90 days after the commencement of the performance period (a “Performance Award”), the Retirement Committee may permit an election with regard to a Performance Award to be received by the Retirement Committee no later than 6 months prior to the expiration of such performance period (e.g., no later than June 30th for a performance period ending December 31), provided that the employee was employed by Commerce continuously from the date the performance criteria was established through the date of the election and that the payment of the Performance Award is not substantially certain or readily ascertainable at the time the election is received by the Retirement Committee. An election to defer any incentive compensation awards (including any Performance Award) shall become irrevocable as of the deadline for making such election.