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Does anyone know the withholding and reporting requirements for SARs exercised by a former employee? The rules are pretty clear for nonqualified deferred compensation paid to former employees, but the SARs at issue are designed to avoid 409A, so they don't fall under those rules.

Should this be reported on a W-2, even though the employee is no longer with the company? Does withholding apply (and, if so, at what rate)?

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