eTrade 2008 Annual Report Download - page 210

allocable to the Participant’s Elective Deferral Contributions (and, if applicable, Qualified Nonelective Contributions or
Qualified Matching Contributions, or both) for the Plan Year in which the excess occurred multiplied by a fraction. The
numerator of the fraction is the Excess Contributions. The denominator of the fraction is the closing balance without regard
to any income or loss occurring during such Plan Year (as of the end of such Plan Year) of the Participant’s Account
resulting from Elective Deferral Contributions (and Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, if such contributions are included in the ADP Test).
For purposes of determining income or loss on Excess Contributions beginning with the 2006 Plan Year, any Excess
Contributions, in addition to any adjustment for income or loss for the Plan Year in which the excess occurred, shall be
adjusted for income or loss for the gap period between the end of such Plan Year and the date of distribution. Such income
or loss allocable to the gap period shall be equal to 10% of the income or loss allocable to the Excess Contributions for the
Plan Year multiplied by the number of complete months (counting 16 days or more as a complete month) in the gap period.
Excess Contributions allocated to a Participant shall be distributed from the Participant’s Account resulting from Elective
Deferral Contributions. If such Excess Contributions exceed the amount of Excess Contributions in the Participant’s
Account resulting from Elective Deferral Contributions, the balance shall be distributed from the Participant’s Account
resulting from Qualified Matching Contributions (if applicable) and Qualified Nonelective Contributions, respectively.
For taxable years beginning after December 31, 2005, distribution of Excess Contributions shall be made on a pro rata
basis from the Participant’s Account resulting from Pre-tax Elective Deferral Contributions and Roth Elective Deferral
Contributions in the same proportion that such Contributions were made for the applicable year.
Any Matching Contributions that were based on the Elective Deferral Contributions distributed as Excess Contributions,
plus any income and minus any loss allocable thereto, shall be forfeited whether or not such amounts are distributed as
Excess Contributions.
(d) ACP Test. As of the end of each Plan Year, the Plan must satisfy the ACP Test. The ACP Test shall be satisfied using the
prior year testing method, unless the Employer has elected to use the current year testing method.
(1) Prior Year Testing Method. The ACP for a Plan Year for Eligible Participants who are Highly Compensated
Employees for each Plan Year and the prior year’s ACP for Eligible Participants who were Nonhighly Compensated
Employees for the prior Plan Year must satisfy one of the following tests:
(i) The ACP for a Plan Year for Eligible Participants who are Highly Compensated Employees for the Plan Year
shall not exceed the prior year’s ACP for Eligible Participants who were Nonhighly Compensated Employees
for the prior Plan Year multiplied by 1.25; or
RESTATEMENT DECEMBER 15, 2006
43 ARTICLE III (5-19047)