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City of Orono <br />Flexible Compensation Plan <br />(Effective January 1,1991) <br />(Amended and Restated Effective January 1,1999) <br />Article I. The Plan <br />Section 1.1 Establishment. City of Orono (hereinafter the “Employer ”), hereby <br />amends and restates, effective January 1, 1999, the City of Orono Flexible <br />Compensation Plan (the "Plan”), which is a plan of flexible compensation for the <br />exclusive benefit of Eligible Employees of the Employer. <br />Section 1.2 Purpose. The purpose of the Plan is to increase the social <br />insurance protection of Eligible Employees by making available to those employees <br />different combinations of health care benefits, dental care benefits, health care <br />reimbursement benefits, dependent day care benefits, life insurance benefits and direct <br />compensation. The Plan is intended to comply with the provisions of Sections 79, 105, <br />125, and 129 of the Internal Revenue Code of 1986, as amended. <br />Article II. Definitions <br />Section 2.1 Definitions. Whenever used in the Plan, the following words and <br />phrases shall have the meanings set forth below unless the context plainly requires a <br />different meaning, and when the defined meaning is intended, the term is capitalized: <br />(a) "Code” means the Internal Revenue Code of 1986, as <br />amended, and any successor tax code. References to a Code section <br />shaii be to that section as it now exists and to any successor provision. <br />(b) "Compensation" of a Participant means the total base salary <br />or wages paid to an employee including vacation pay, sick pay, and <br />holiday pay (without regard to any salary reduction under this Plan (or an <br />Employer-sponsored Section 403(b) Plan). <br />1