of any subsidiary, division, or other major business unit of the employer are generally not eligible to participate in any such qualifying plan or arrangement, and (C) the number of employees of the employer described in subparagraph (B) for a calendar year is— (i) at least 50, and (ii) at least 10 percent of the employees of the employer (other than excludable employees), then, for purposes of this section, the employer shall be treated as a covered employer with respect to such employees (other than excluded employees) for the calendar year, and such employees (other than excluded employees) shall be treated as qualifying employees. (3) Excluded employees (A) In general The term excluded employee means an employee of the employer who is an excludable employee and who is in a class or category that the employer elects to exclude from treatment as qualifying employees. (B) Excludable employee The term excludable employee means— (i) any employee described in section 410(b)(3), (ii) any employee who has not attained the age of 18 before the first day of the calendar year, (iii) any employee who has not completed at least 3 months of service with the employer, (iv) in the case of an employer that maintains a qualifying plan or arrangement which excludes employees who have not satisfied the minimum age and service requirements for participation in the plan, any employee who has not satisfied such requirements, (v) in the case of an employer that maintains a section 403(b) annuity contract (including a custodial account or retirement income account), any employee who is permitted to be excluded from any salary reduction arrangement under the contract pursuant to section 403(b)(12), (vi) in the case of an employer that maintains an arrangement described in section 408(p), any employee who is not required to be eligible to participate in the arrangement under section 408(p)(4), and (vii) in the case of an employer that maintains a simplified employee pension described in section 408(k), any employee who is permitted to