eTrade 2008 Annual Report Download - page 207

For taxable years beginning after December 31, 2005, distribution of Excess Elective Deferrals 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.
The Excess Elective Deferrals shall be adjusted for any income or loss. The income or loss allocable to such Excess
Elective Deferrals shall be equal to the income or loss allocable to the Participant’s Elective Deferral Contributions for the
taxable year in which the excess occurred multiplied by a fraction. The numerator of the fraction is the Excess Elective
Deferrals. The denominator of the fraction is the closing balance without regard to any income or loss occurring during
such taxable year (as of the end of such taxable year) of the Participant’s Account resulting from Elective Deferral
Contributions.
For purposes of determining income or loss on Excess Elective Deferrals for taxable years beginning on or after January 1,
2006, any Excess Elective Deferrals, in addition to any adjustment for income or loss for the taxable year in which the
excess occurred, shall be adjusted for income or loss for the gap period between the end of such taxable 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 Elective Deferrals for the taxable year multiplied by the number of complete months (counting 16 days or more as a
complete month) in the gap period.
Any Matching Contributions that were based on the Elective Deferral Contributions distributed as Excess Elective
Deferrals, plus any income and minus any loss allocable thereto, shall be forfeited whether or not such amounts are
distributed as Excess Elective Deferrals.
(c) ADP Test. As of the end of each Plan Year after Excess Elective Deferrals have been determined, the Plan must satisfy the
ADP Test. The ADP 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 ADP for a Plan Year for Eligible Participants who are Highly Compensated
Employees for each Plan Year and the prior year’s ADP for Eligible Participants who were Nonhighly Compensated
Employees for the prior Plan Year must satisfy one of the following tests:
(i) The ADP for a Plan Year for Eligible Participants who are Highly Compensated Employees for the Plan Year
shall not exceed the prior year’s ADP for Eligible Participants who were Nonhighly Compensated Employees
for the prior Plan Year multiplied by 1.25; or
(ii) The ADP for a Plan Year for Eligible Participants who are Highly Compensated Employees for the Plan Year:
A. shall not exceed the prior year’s ADP for Eligible Participants who were Nonhighly Compensated
Employees for the prior Plan Year multiplied by 2, and
B. the difference between such ADPs is not more than 2.
RESTATEMENT DECEMBER 15, 2006
40 ARTICLE III (5-19047)