eTrade 2008 Annual Report Download - page 175

Compensation means, except for purposes of the CONTRIBUTION LIMITATION SECTION of Article III and Article XI, the
total earnings, except as modified in this definition, paid or made available to an Employee by the Employer during any
specified period.
“Earnings” in this definition means wages, salaries, and fees for professional services and other amounts received (without
regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the
Employer maintaining the plan to the extent that the amounts are includible in gross income (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits, and reimbursements or other expense allowances under a nonaccountable plan (as
described in section 1.62-2(c) of the regulations)), and excluding the following:
For any Self-employed Individual, Compensation means Earned Income.
Compensation shall include any elective deferral (as defined in Code Section 402(g)(3)), and any amount which is contributed
or deferred by the Employer at the election of the Employee and which is not includible in the gross income of the Employee by
reason of Code Section 125, 132(f)(4), or 457. Compensation shall also include employee contributions “picked up” by a
governmental entity and, pursuant to Code Section 414(h)(2), treated as Employer contributions.
For Plan Years beginning on and after January 1, 2005, payments made within 2 1/2 months after Severance from Employment
will be Compensation if they are payments that, absent a Severance from Employment, would have been paid to the Employee
while the Employee continued in employment with the Employer and are regular compensation for services during the
Employee’s regular working hours, compensation for services outside the Employee’s regular working hours (such as overtime
or shift differential), commissions, bonuses, or other similar compensation, and payments for accrued bona fide sick, vacation,
or other leave, but only if the Employee would have been able to use the leave if employment had continued. Any payments not
described above are not considered compensation if paid after Severance from Employment, even if they are paid within 2 1/2
months following Severance from Employment, except for payments to an individual who does not currently perform services
for the Employer by reason of qualified military service (within the meaning of Code Section 414(u)(1)) to the
(a) employer contributions to a plan of deferred compensation which are not included in the Employee’s gross income for the
taxable year in which contributed, or employer contributions under a simplified employee pension plan, or any
distributions from a plan of deferred compensation;
(b) amounts realized from the exercise of a nonqualified stock option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture;
(c) amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option; and
(d) other amounts which receive special tax benefits, or contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract described in Code Section 403(b) (whether or not the
contributions are actually excludible from the gross income of the Employee).
RESTATEMENT DECEMBER 15, 2006
8 ARTICLE I (5-19047)