Retirement Security Program (246K)
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THE PROGRESSIVE RETIREMENT SECURITY PROGRAM
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(1999 Amendment and Restatement)
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TABLE OF CONTENTS
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ARTICLE 1
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INTRODUCTION
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1.1 NAME OF PLAN 1
1.2 EFFECTIVE DATE 1
1.3 TYPE AND PURPOSE OF PLAN 1
ARTICLE 2
DEFINITIONS
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2.1 ACCOUNT 1
2.2 ACTIVE LTSP PARTICIPANT 1
2.3 ACTIVE SDRP PARTICIPANT 1
2.4 ADMINISTRATOR 1
2.5 AFFILIATED COMPANY 1
2.6 ANNIVERSARY SHARES 1
2.7 ARTICLE 1
2.8 BENEFICIARY 1
2.9 BOARD 2
2.9A BROKERAGE ACCOUNT 2
2.10 CODE OR IRC 2
2.11 COMPANY 2
2.12 COMPANY STOCK FUND 2
2.13 COMPENSATION 2
2.14 COMPENSATION DEFERRAL AGREEMENT 2
2.15 CONTRIBUTIONS 2
2.16 COVERED EMPLOYEE 2
2.17 COVERED EMPLOYMENT 2
2.18 DISABILITY OR DISABLED 2
2.19 EFFECTIVE DATE 2
2.20 ELIGIBLE COMPENSATION 3
2.21 EMPLOYEE 3
2.22 EMPLOYER 3
2.23 EMPLOYER FORFEITURE ACCOUNT 3
2.24 EMPLOYER MATCHED CONTRIBUTIONS 3
2.25 EMPLOYER SDRP CONTRIBUTIONS 3
2.26 EMPLOYMENT 3
2.27 ENTRY DATE 3
2.28 ERISA 3
2.29 EXCESS ADP CONTRIBUTIONS 3
2.30 EXCESS AGGREGATE CONTRIBUTIONS 3
2.31 EXCESS DEFERRAL 3
2.32 FORMER EMPLOYER SUPPLEMENTAL CONTRIBUTION ACCOUNT 3
2.33 FORMER PARTICIPANT 3
2.34 FORMER PAYSOP ACCOUNT 3
2.35 FUND 3
2.36 HARDSHIP 3
2.37 HIGHLY COMPENSATED EMPLOYEE 4
2.38 INACTIVE LTSP PARTICIPANT 4
2.39 INACTIVE SDRP PARTICIPANT 4
2.40 INVESTMENT FUNDS 4
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2.41 MATERNITY OR PATERNITY ABSENCE 5
2.42 MERGER 5
2.43 NON-HIGHLY COMPENSATED EMPLOYEE 5
2.44 NORMAL RETIREMENT AGE 5
2.45 NORMAL RETIREMENT DATE 5
2.46 PARTICIPANT 5
2.47 PARTNERSHIP SHARE 5
2.48 PAYROLL DEDUCTION AGREEMENT 5
2.49 PLAN 5
2.50 PLAN YEAR 5
2.51 POST-TAX CONTRIBUTIONS 5
2.52 PRE-TAX CONTRIBUTIONS 5
2.53 QUALIFIED DOMESTIC RELATIONS ORDER (QDRO) 5
2.54 RETIREMENT 5
2.55 SECTION 5
2.56 SERVICE, HOUR OF SERVICE and YEAR OF SERVICE 5
2.57 SPOUSE 5
2.58 STOCK 5
2.59 TERMINATION OF EMPLOYMENT 5
2.60 TRUST 5
2.61 TRUST AGREEMENT 6
2.62 TRUSTEE 6
2.63 VALUATION DATE 6
ARTICLE 3
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PARTICIPATION
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3.1 ELIGIBILITY FOR PARTICIPATION 6
3.2 COMMENCEMENT OF PARTICIPATION 6
3.3 TRANSFERS OF EMPLOYMENT 6
3.4 SUSPENSION OF CONTRIBUTIONS 7
3.5 FORMER PARTICIPANTS AND RE-PARTICIPATION 7
ARTICLE 4
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DEPOSITS AND CONTRIBUTIONS
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4.1 PRE-TAX CONTRIBUTIONS 7
4.2 POST-TAX CONTRIBUTIONS 7
4.3 EMPLOYER MATCHED CONTRIBUTIONS 7
4.3A SDRP CONTRIBUTIONS 8
4.4 CHANGE IN AMOUNT OF CONTRIBUTIONS 8
4.5 SUSPENSION OF CONTRIBUTIONS 8
4.6 REMITTANCE OF CONTRIBUTIONS 9
4.7 RETURN OF CONTRIBUTIONS 9
ARTICLE 5
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MAXIMUM CONTRIBUTIONS
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5.1 LIMITATIONS ON PRE-TAX CONTRIBUTIONS 9
5.2 LIMITATIONS ON POST-TAX CONTRIBUTIONS AND EMPLOYER MATCHED CONTRIBUTIONS 12
5.3 PROCEDURE IF MULTIPLE USE LIMITATION IS EXCEEDED 15
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ARTICLE 6
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ACCOUNTS
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6.1 ACCOUNTS 15
6.2 ACCOUNTS REPRESENT UNDIVIDED INTERESTS 16
6.3 ACCOUNT VALUES 16
6.4 VALUATION OF INVESTMENT FUNDS 16
6.5 ALLOCATION OF NET GAIN OR LOSS OF INVESTMENT FUNDS TO ACCOUNTS 16
6.6 BASIS OF VALUATION 16
6.7 ADMINISTRATION OF PRE-TAX CONTRIBUTION ACCOUNT 17
6.8 ADMINISTRATION OF POST-TAX CONTRIBUTION ACCOUNT 17
6.9 ADMINISTRATION OF EMPLOYER MATCHED CONTRIBUTION ACCOUNT 17
6.9A ADMINISTRATION OF EMPLOYER SDRP CONTRIBUTION ACCOUNT 17
6.10 ADMINISTRATION OF FORMER PAYSOP ACCOUNT 17
6.11 ADMINISTRATION OF THE FORMER EMPLOYER SUPPLEMENTAL CONTRIBUTION ACCOUNT 17
6.12 ADMINISTRATION OF THE SUSPENSE ACCOUNT 17
6.13 ADMINISTRATION OF THE EMPLOYER FORFEITURE ACCOUNT 18
6.14 CREDITING OF CONTRIBUTIONS 18
6.15 EMPLOYEE CONTRIBUTION RECORDS 18
6.16 UNIT ACCOUNTING 18
ARTICLE 7
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RETIREMENT, DISABILITY OR DEATH
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7.1 BENEFIT AT RETIREMENT 18
7.2 DISABILITY BENEFIT 19
7.3 DEATH BENEFIT 19
ARTICLE 8
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VESTING AND TERMINATIONS
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8.1 VESTING 19
8.2 TERMINATION OF EMPLOYMENT 20
8.3 FORFEITURES 20
8.4 REEMPLOYMENT 20
ARTICLE 9
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PAYMENT OF BENEFITS
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9.1 APPLICATION FOR PAYMENT 21
9.2 TIME OF PAYMENT 21
9.3 FORM OF PAYMENT 22
9.4 DETERMINATION OF VALUE OF PAYMENT 22
9.5 CLAIMS PROCEDURE 22
9.6 FACILITY OF PAYMENT 23
ARTICLE 10
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WITHDRAWALS AND LOANS DURING EMPLOYMENT
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10.1 IN-SERVICE WITHDRAWALS FROM PRE-TAX CONTRIBUTION ACCOUNT 23
10.2 IN-SERVICE WITHDRAWALS FROM POST-TAX CONTRIBUTION ACCOUNT 24
10.3 IN-SERVICE WITHDRAWALS FROM EMPLOYER MATCHED CONTRIBUTION ACCOUNT 24
10.4 NO WITHDRAWALS AVAILABLE FROM OTHER ACCOUNTS 24
10.5 PAYMENT OF WITHDRAWALS 25
10.6 LOANS TO PARTICIPANTS 25
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ARTICLE 11
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SERVICE
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11.1 SERVICE 27
11.2 PRIOR SERVICE REINSTATED 28
11.3 YEAR OF SERVICE 28
ARTICLE 12
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PLAN OPERATION AND ADMINISTRATION
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12.1 POWERS OF ADMINISTRATOR 29
12.2 NONDISCRIMINATORY EXERCISE OF AUTHORITY 29
12.3 RELIANCE ON TABLES, ETC. 29
12.4 NAMED FIDUCIARY 29
12.5 INDEMNIFICATION 29
12.6 NOTICES TO ADMINISTRATOR 30
ARTICLE 13
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AMENDMENT AND TERMINATION OF THE PLAN
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13.1 AMENDMENT 30
13.2 TERMINATION 31
13.3 LIQUIDATION OF THE FUND 31
ARTICLE 14
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ADOPTION OF THE PLAN BY OTHER EMPLOYERS
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14.1 ADOPTION WITH APPROVAL 31
14.2 PROCEDURE FOR ADOPTION 31
14.3 EFFECT OF ADOPTION 31
14.4 TERMINATION OF ADOPTION 32
ARTICLE 15
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LIMITATIONS OF ANNUAL ADDITIONS
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15.1 GENERAL LIMITATIONS 32
15.2 EXCESS AMOUNT 32
15.3 AGGREGATION OF PLANS OF THE EMPLOYER 33
15.4 DEFINITIONS 33
15.5 TOP-HEAVY PLAN REQUIREMENTS 34
ARTICLE 16
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INVESTMENT OF CONTRIBUTIONS
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16.1 INVESTMENT FUNDS 38
16.2 ADMINISTRATION OF COMPANY STOCK FUND 38
16.3 DEPOSIT OF CONTRIBUTIONS 39
16.4 INVESTMENT ELECTIONS OF PARTICIPANTS 39
16.5 ELECTION TO TRANSFER INTEREST BETWEEN INVESTMENT FUNDS 39
16.6 OTHER PROVISIONS CONCERNING INVESTMENT ELECTIONS AND TRANSFERS 39
16.7 FORMER PAYSOP ACCOUNTS 40
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ARTICLE 17
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MISCELLANEOUS PROVISIONS
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17.1 HEADINGS 40
17.2 PLAN NOT CONTRACT OF EMPLOYMENT 40
17.3 VESTED RIGHTS 40
17.4 SEVERABILITY 40
17.5 GENERAL UNDERTAKING 40
17.6 ACTION BY COMPANY 40
17.7 NO RESPONSIBILITY FOR ACTS OF AN INSURER 40
17.8 SPENDTHRIFT 40
17.9 NUMBER AND GENDER 41
17.10 GOVERNING LAW 41
17.11 MERGER, CONSOLIDATION, AND TRANSFER OF ASSETS 41
17.12 RECEIPT OF ASSETS FROM QUALIFIED PLANS 41
17.13 INTERPRETATION OF PLAN 41
17.14 SATISFACTION OF CLAIMS 42
17.15 SERVICE OF PROCESS 42
17.16 WARRANTIES 42
17.17 LEASED EMPLOYEES 42
17.18 DIRECT ROLLOVER DISTRIBUTIONS 42
17.19 PLAN ADDENDA 43
17.20 ADJUSTMENT 43
17.21 USERRA MODEL AMENDMENT 43
17.22 ELECTRONIC COMMUNICATIONS 43
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ARTICLE 1
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INTRODUCTION
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1.1 NAME OF PLAN
This Plan shall be known as The Progressive Retirement Security
Program. Prior to July 1, 1994, this Plan was known as The Progressive
Corporation Long-Term Savings Plan.
1.2 EFFECTIVE DATE
Except as otherwise expressly provided herein, this Plan, as amended
and restated, shall be effective as of April 1, 1999.
1.3 TYPE AND PURPOSE OF PLAN
Pursuant to Section 401(a)(27) of the Code, the Plan is hereby
designated as a profit-sharing plan. The primary purpose of the Plan
is to encourage Employee savings, to facilitate Employee Stock
ownership and to provide benefits upon a Participant's or Former
Participant's Retirement, death, Disability or Termination of
Employment.
ARTICLE 2
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DEFINITIONS
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The following terms, when used herein with initial capital letters, shall have
the meaning given to them in this Article 2.
2.1 ACCOUNT shall mean one of several records maintained pursuant to
Section 6 to record a Participant's, Former Participant's, or
Beneficiary's interest in the Investment Funds.
2.2 ACTIVE LTSP PARTICIPANT shall have the meaning set forth in Article 3.
2.3 ACTIVE SDRP PARTICIPANT shall have the meaning set forth in Article 3.
2.4 ADMINISTRATOR, which is the administrator for purposes of ERISA and
the plan administrator for purposes of the Code, shall mean
Progressive Casualty Insurance Company, an Ohio corporation, or its
successors.
2.5 AFFILIATED COMPANY shall mean any corporation, trade or business if it
and the Company are members of a controlled group of corporations, or
are under common control, or are members of an affiliated service
group, within the meaning of Code Sections 414(b), 414(c), and 414(m),
respectively; provided, however, that for purposes of Code Section
415, the definitions prescribed by Code Sections 414(b) and 414(c)
shall be modified as provided by Code Section 415(h) by substituting
"more than 50%" common control for "at least 80%" common control. This
term shall also include any entity required to be treated as an
Affiliated Company under Code Section 414(o).
2.6 ANNIVERSARY SHARES shall mean such shares of Stock, if any, as may be
awarded on or before February 28, 1992 to Employees by the Company
upon completion of five (5) year increments of Years of Service.
2.7 ARTICLE shall mean an Article of this Plan.
2.8 BENEFICIARY as to a Participant or Former Participant who is married
at the time of his death, shall mean his Spouse or such other
person(s) as he has designated with the consent of his Spouse, and, as
to a Participant or Former Participant who is not married at the time
of his death, shall be such person(s) as he has designated. A
Participant or Former Participant may change his Beneficiary
designation at any time, provided that no such change shall be
effective as to any married Participant or Former Participant who
predeceases his Spouse, unless the Spouse has consented to the change.
Each consent of a Spouse shall be irrevocable, but shall be effective
only with respect to the particular Beneficiary designation to which
it pertains. All Beneficiary designations (including changes) and
consents of a
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Spouse shall be made in writing on such forms as the Administrator
shall prescribe, and shall become effective only when received by the
Administrator; provided, however, that a Beneficiary designation
(including a change) or a consent of a Spouse received by the
Administrator after the designating Participant's death shall be
disregarded.
In the absence of a Beneficiary designation, or if the designated
Beneficiary is no longer living or in existence at the time of the
Participant's or Former Participant's death, all benefits due from the
Plan upon the Participant's or Former Participant's death shall be
paid to the Participant's or Former Participant's (i) Spouse, if the
Participant or Former Participant was married at the time of his/her
death or (ii) estate, if the Participant or Former Participant was not
married at the time of his/her death. Notwithstanding the foregoing,
consent of a Spouse shall not be required if the Participant or Former
Participant and his/her Spouse are legally separated or the Spouse
cannot be located.
2.9 BOARD shall mean the Board of Directors of the Company.
2.9A BROKERAGE ACCOUNT as to each Participant shall mean a Participant's
interest in an Investment Fund consisting of Participant-managed
brokerage accounts.
2.10 CODE OR IRC shall mean the Internal Revenue Code of 1986, as the same
may be amended from time to time.
2.11 COMPANY shall mean The Progressive Corporation or its successor(s).
2.12 COMPANY STOCK FUND shall mean an Investment Fund consisting
principally of Stock.
2.13 COMPENSATION of a Participant or Former Participant for a Plan Year
shall mean all amounts that are received by him/her during such Plan
Year from the Employer that are reported as wages on IRS Form W-2 for
such Plan Year, plus (i) the amount contributed by the Employer to the
Trustee pursuant to a Compensation Deferral Agreement reduced by
amounts required by Section 5.1(c), and (ii) amounts of pay reduced in
accordance with an arrangement established by the Employer which
qualifies under Section 125 of the Code. However, the maximum annual
dollar amount that will be recognized as Compensation is $150,000 in
all cases. Such $150,000 limit shall be automatically adjusted in
accordance with regulations under Section 401(a)(17) of the Code. If,
as a result of the application of the rules of Section 414(q)(6) of
the Code, the adjusted $150,000 limit is exceeded, then the limit
shall be prorated among the affected individuals in proportion to each
such individual's Compensation, as determined under this Section 2.13
prior to the application of the limit. In applying the rules of
Section 414(q)(6) of the Code, the term "family" shall include only
the spouse of the Participant and any lineal descendants of the
Participant who have not attained age 19 before the close of the year.
2.14 COMPENSATION DEFERRAL AGREEMENT shall mean an arrangement pursuant to
which the Employee agrees to reduce his Eligible Compensation,
pursuant to Section 4.1 hereof, and the Employer agrees to contribute
to the Plan the amount equal to the amount reduced as a Pre-Tax
Contribution. The Compensation Deferral Agreement shall also serve to
provide such other information about the Participant as the
Administrator shall require.
2.15 CONTRIBUTIONS shall mean a Participant's Pre-Tax Contributions and
Post-Tax Contributions.
2.16 COVERED EMPLOYEE shall mean an Employee of the Employer, earning
Eligible Compensation, excluding (i) any such Employee whose terms and
conditions of Employment are negotiated with the Employer by or
through a certified or recognized collective bargaining organization
unless such negotiation provides for his/her inclusion, (ii) those
Employees classified by the Employer as temporary under its personnel
policies and procedures, and (iii), effective January 1, 1999,
Employees who are not residents of the United States. Notwithstanding
the provisions of clause (ii) above, an Employee who has been
classified by the Employer as temporary under its personnel policies
and procedures and who performs at least one thousand (1,000) Hours of
Service during any twelve (12) consecutive month period beginning on
his/her date of hire (or any anniversary thereof) shall be considered
a Covered Employee effective as of the first day following such twelve
(12) consecutive month period.
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2.17 COVERED EMPLOYMENT shall mean the period or periods during which an
Employee is a Covered Employee.
2.18 DISABILITY OR DISABLED shall mean that a Participant shall be totally
disabled (as defined in the Long-Term Disability Plan coverage
provided by the Company, whether or not such Participant is eligible
for such coverage) for a period of twelve (12) consecutive calendar
months beginning on the first day of disability absence.
2.19 EFFECTIVE DATE shall mean July 1, 1994.
2.20 ELIGIBLE COMPENSATION of a Participant shall mean his base salary,
straight time hourly wages, overtime pay, vacation pay, holiday pay,
jury duty pay, taxable sick pay, military pay, funeral pay, lump sum
salary adjustments and retroactive payments of any of the foregoing
items pursuant to any back pay award (but only to the extent such
retroactive payments are actually paid in periods during which a
Compensation Deferral Agreement is in effect). However, the maximum
annual dollar amount that will be recognized as Eligible Compensation
is $150,000 per year in all cases. Such $150,000 limit shall be
automatically adjusted in accordance with regulations under Section
401(a)(17) of the Code.
2.21 EMPLOYEE shall mean any person who renders services to an Employer or
Affiliated Company as a common law employee (including any common law
employee who is employed as an officer).
2.22 EMPLOYER shall mean the Company. The term Employer shall also include
any Affiliated Company which adopts the Plan pursuant to Article 14,
but only for such period as such company continues in its adoption of
the Plan.
2.23 EMPLOYER FORFEITURE ACCOUNT shall mean the Account maintained and
administered in accordance with Section 6.13 hereof.
2.24 EMPLOYER MATCHED CONTRIBUTIONS shall mean those amounts contributed by
the Employer pursuant to Section 4.3 hereof.
2.25 EMPLOYER SDRP CONTRIBUTIONS shall mean those amounts contributed by
the Employer pursuant to Section 4.3A.
2.26 EMPLOYMENT shall mean the period or periods during which an individual
is an Employee.
2.27 ENTRY DATE shall mean the first day of the pay period coincident with
or immediately following the date on which a Participant satisfies the
requirements for participation contained in Section 3.1(b).
2.28 ERISA shall mean the Employee Retirement Income Security Act of 1974,
as the same may be amended from time to time hereafter.
2.29 EXCESS ADP CONTRIBUTIONS shall mean the amount of the Pre-Tax
Contributions of the Highly Compensated Employees for the Plan Year
above the maximum amount permitted under Section 5.1.
2.30 EXCESS AGGREGATE CONTRIBUTIONS shall mean the amount of the Post-Tax
Contributions and Employer Matching Contributions of the Highly
Compensated Employees for the Plan Year above the maximum amount of
such Post-Tax Contributions and Employer Matching Contributions
permitted under Section 5.2(d).
2.31 EXCESS DEFERRAL shall mean a Pre-Tax Contribution in excess of the
permitted maximum deferral amount set forth in Section 5.1(d), or an
amount designated as such by the Employee where the excess is
generated by aggregation of pre-tax contributions to plans other than
this Plan.
2.32 FORMER EMPLOYER SUPPLEMENTAL CONTRIBUTION ACCOUNT, as to each
Participant shall mean the Account derived from the Employer
Supplemental Contributions (within the meaning of the Plan as
previously in effect), if any, made in respect of the Participant
during periods that the Plan provided for such contributions.
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