Common use of Elective Deferrals Clause in Contracts

Elective Deferrals. Annual Limitation The maximum amount that you may defer to this SEP for any calendar year is limited to the lesser of fifteen percent of compensation (determined without including the SEP-XXX contribution) or a dollar limit under section 402(g) of the Internal Revenue Code that originally was $7,000 (and is now subject to cost-of-living increases). The fifteen percent limit may be reduced if your employer also maintains a SEP to which nonelective contributions are made for a plan year, or any qualified plan to which contributions are made for such plan year. In that case, total contributions on your behalf to all such SEPs and qualified plans may not exceed the lesser of $22,500 or fifteen percent of your compensation. If these limits are exceeded, the amount you may elect to contribute to this SEP for the year will be correspondingly reduced. The dollar limit under section 402(g) of the Code is an overall limit on the maximum amount that you may defer in each calendar year to all elective SEPs and cash or deferred arrangements under section 401(k) of the Code, regardless of how many employers you may have worked for during the year. The section 402(g) limit is indexed according to the cost of living. In addition, the section 402(g) limit may be increased to $9,500 if you make salary reduction contributions under a section 403(b) tax-sheltered annuity arrangement. If you are a highly compensated employee, there may be a further limit on the amount that you may contribute to a SEP-XXX for a particular year. This limit is calculated by your employer and is known as the "deferral percentage limitation." This deferral percentage limitation is based on a mathematical formula that limits the percentage of pay that highly compensated employees may elect to defer to a SEP-XXX. As discussed below, your employer will notify each highly compensated employee who has exceeded the deferral percentage limitation.

Elective Deferrals. Annual Limitation The maximum amount that you may defer to under this SEP SIMPLE Plan for any calendar year is limited to the lesser of fifteen percent the percentage of your compensation (determined without including indicated in the SEP-XXX contribution) Deferral Form or a “the applicable annual dollar limit under section 402(g) of the Internal Revenue Code that originally was limitation” described below: Applicable Annual Dollar Limitations Tax Year Contribution Limit 2009 $7,000 (and is now subject to 11,500 2008 $10,500 2007 $10,500 The maximum amount will be adjusted for cost-of-living increases)increases in multiples of $500. If you attain age 50 or over by the end of a calendar year, you can elect to have your compensation reduced by an additional “catch-up” amount listed below. The fifteen percent limit may maximum additional age 50 catch-up amount will be reduced if your employer also maintains a SEP to which nonelective contributions are made adjusted for a plan year, or any qualified plan to which contributions are made for such plan year. In that case, total contributions on your behalf to all such SEPs and qualified plans may not exceed the lesser cost-of-living increases in multiples of $22,500 or fifteen percent of your compensation500. Tax Year Catch-Up Limit 2009 $2,500 2008 $2,500 2007 $2,500 If these limits are exceeded, the amount you may elect to contribute work for other employers (unrelated to this SEP for the year will be correspondingly reduced. The dollar limit under section 402(gEmployer) of the Code who also maintain a salary deferral plan, there is an overall limit on the maximum amount that you may defer in each calendar year to all elective SEPs and SEPs, cash or deferred arrangements under section 401(k) of the Code, other SIMPLE plans and 403(b) plans regardless of how many employers you may have worked for during the year. This limitation is referred to as the section 402(g) limit. The section 402(g) limit on elective deferrals is listed below and is indexed according to the cost of living. In addition, the section Tax Year Section 402(g) limit may be increased to Limit 2009 $9,500 if you make salary reduction contributions under a section 403(b) tax-sheltered annuity arrangement16,500 2008 $15,500 2007 $15,500 IV. If you are a highly compensated employee, there may be a further limit on the Elective Deferrals — Tax Treatment The amount that you may elect to contribute to a SEP-XXX for a particular year. This limit your SIMPLE IRA is calculated by your employer excludible from gross income, subject to the limitations discussed above, and is known not includible as the "deferral percentage limitationtaxable wages on Form W-2. However, these amounts are subject to FICA taxes." This deferral percentage limitation is based on a mathematical formula that limits the percentage of pay that highly compensated employees may elect to defer to a SEP-XXX. As discussed below, your employer will notify each highly compensated employee who has exceeded the deferral percentage limitation.

Elective Deferrals. Annual Limitation The maximum amount that you may defer to this SEP for any calendar year is limited to the lesser of fifteen percent of compensation (determined without including the SEP-XXX IRA contribution) or a dollar limit under section 402(g) of the Internal Revenue Code that originally was $7,000 (and is now subject to cost-of-living increases). The fifteen percent limit may be reduced if your employer also maintains a SEP to which nonelective contributions are made for a plan year, or any qualified plan to which contributions are made for such plan year. In that case, total contributions on your behalf to all such SEPs and qualified plans may not exceed the lesser of $22,500 or fifteen percent of your compensation. If these limits are exceeded, the amount you may elect to contribute to this SEP for the year will be correspondingly reduced. The dollar limit under section 402(g) of the Code is an overall limit on the maximum amount that you may defer in each calendar year to all elective SEPs and cash or deferred arrangements under section 401(k) of the Code, regardless of how many employers you may have worked for during the year. The section 402(g) limit is indexed according to the cost of living. In addition, the section 402(g) limit may be increased to $9,500 if you make salary reduction contributions under a section 403(b) tax-sheltered annuity arrangement. If you are a highly compensated employee, there may be a further limit on the amount that you may contribute to a SEP-XXX IRA for a particular yearyeax. This limit is calculated by your employer and is known as the "deferral percentage limitation." This deferral percentage limitation is based on a mathematical formula that limits the percentage of pay that highly compensated employees may elect to defer to a SEP-XXXIRA. As discussed below, your employer emxxxyer will notify each highly compensated employee who has exceeded the deferral percentage limitation.