Exhibit 10.1
THE SOUTHERN COMPANY
SUPPLEMENTAL BENEFIT PLAN
Troutman Sanders LLP
600 Peachtree Street, N.E.
Suite 5200 Bank of America Plaza
Atlanta, Georgia 30308-2216
(404) 885-3000
Amended and Restated Effective as of January 1, 2005
THE SOUTHERN COMPANY
SUPPLEMENTAL BENEFIT PLAN
Page
ARTICLE I - PURPOSE AND ADOPTION OF PLAN.......................................1
1.1 Adoption.....................................................1
1.2 Purpose......................................................2
ARTICLE II - DEFINITIONS.......................................................2
2.1 Account......................................................2
2.2 Administrative Committee.....................................2
2.3 Beneficiary..................................................4
2.4 Board of Directors...........................................2
2.5 Change in Control Benefit Plan Determination Policy..........2
2.6 Code.........................................................3
2.7 Common Stock.................................................3
2.8 Company......................................................3
2.9 Deferred Compensation Plan...................................3
2.10 Effective Date...............................................3
2.11 Employee.....................................................4
2.12 Employing Company............................................4
2.13 ESOP.........................................................4
2.14 Non-Pension Benefit..........................................4
2.15 Participant..................................................4
2.16 Pension Benefit..............................................4
2.17 Pension Plan.................................................4
2.18 Phantom Common Stock.........................................4
2.19 Plan.........................................................4
2.20 Plan Year....................................................4
2.21 Purchase Price...............................................4
2.22 Sales Price..................................................5
2.23 Savings Plan.................................................5
2.24 Southern Board...............................................5
2.25 Southern Company.............................................5
2.26 Trust........................................................5
2.27 Valuation Date...............................................5
ARTICLE III - ADMINISTRATION OF PLAN...........................................6
3.1 Administrator................................................6
3.2 Powers.......................................................6
3.3 Duties of the Administrative Committee.......................7
3.4 Indemnification..............................................8
ARTICLE IV - ELIGIBILITY.......................................................8
4.1 Eligibility Requirements.....................................8
4.2 Determination of Eligibility.................................8
4.3 Eligibility of Employees of Savannah Electric and
Power Company................................................9
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ARTICLE V - BENEFITS...........................................................9
5.1 Pension Benefit..............................................9
5.2 Non-Pension Benefit.........................................16
5.3 Distribution of Benefits....................................17
5.4 Allocation of Pension Benefit Liability.....................18
5.5 Funding of Benefits.........................................18
5.6 Withholding.................................................19
5.7 Recourse Against Deferred Compensation Trust................19
5.8 Change in Control...........................................19
ARTICLE VI - MISCELLANEOUS....................................................19
6.1 Assignment..................................................19
6.2 Amendment and Termination...................................19
6.3 No Guarantee of Employment..................................19
6.4 Construction................................................20
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THE SOUTHERN COMPANY
SUPPLEMENTAL BENEFIT PLAN
ARTICLE I - PURPOSE AND ADOPTION OF PLAN
1.1 Adoption: The Southern Company Supplemental Benefit Plan, effective as
of January 1, 2005 and hereinafter set forth (the "Plan"), is a modification and
continuation of the Supplemental Benefit Plan for Southern Company Services,
Inc. which originally became effective January 1, 1983, and was last amended and
restated effective May 1, 2000. This amendment and restatement is intended to
bring the Plan into good faith compliance with Code Section 409A. The Plan
should be construed to satisfy this intent.
Effective January 1, 1998, the following other plans were merged into the
Plan:
o Supplemental Benefit Plan for Alabama Power Company
o Supplemental Benefit Plan for Georgia Power Company
o Supplemental Benefit Plan for Gulf Power Company
o Supplemental Benefit Plan for Mississippi Power Company
o Supplemental Benefit Plan for Southern Company Services, Inc. and
Southern Electric International, Inc., as adopted by Southern
Communications Services, Inc.
o Supplemental Benefit Plan for Southern Company Services, Inc. and
Southern Electric International, Inc., as adopted by Southern
Development and Investment Group, Inc.
o Supplemental Benefit Plan for Southern Nuclear Operating Company, Inc.
Employees participating in the merged plans and employed by an Employing
Company on January 1, 1998 became immediately covered under the Plan; provided,
however, that the terms of the prior plans govern an Employee's circumstances
with regard to actions taken or occurring before January 1, 1998.
The Plan shall be an unfunded deferred compensation arrangement as
contemplated by the Employee Retirement Income Security Act, as amended, under
which benefits shall be paid solely from the general assets of the Employing
Companies. At a time and in a manner determined by the Administrative Committee,
Participants shall make timely elections to conform to the Plan's terms
effective on and after January 1, 2005. Such elections are intended to meet the
transition requirements of Section 409A of the Code and Internal Revenue Service
Note 2005-1.
1.2 Purpose: The Plan is designed to provide certain retirement and other
deferred compensation benefits primarily for a select group of management or
highly compensated employees which are not otherwise payable or cannot otherwise
be provided by the Employing Companies (1) under The Southern Company Pension
Plan, The Southern Company Employee Savings Plan ("ESP"), and The Southern
Company Employee Stock Ownership Plan (until its merger into the Savings Plan
effective December 20, 2006), as a result of the limitations set forth under
Sections 401(a)(17), 401(k), 401(m), 402(g), or 415 of the Internal Revenue Code
of 1986, as amended from time to time; and (2) to compensate for lost benefits
resulting from participation in The Southern Company Deferred Compensation Plan,
as amended from time to time.
1.3 Schedule of Provisions for Pre-2005 Non-Pension Benefits: Attached to
this Plan is a Schedule that sets forth the operative provisions of the Plan
applicable to "grandfathered" Non-Pension Benefits which are treated by the
Employing Companies as not subject to Section 409A of the Code. The Account
balance (plus earnings thereon) of the grandfathered Non-Pension Benefits shall
only be subject to the provisions set forth in the Schedule. In accordance with
transition rules under Section 409A of the Code, Internal Revenue Service Notice
2005-1, or any other applicable guidance from the Department of Treasury, these
provisions are only intended to preserve the rights and features of the
"grandfathered" Non-Pension Benefits and are, therefore, not intended to
"materially modify" any aspect of such rights and features. Provisions of the
Schedule should be so construed whenever necessary or appropriate. Provisions in
the Schedule shall only be amended in accordance with the Schedule's terms.
1.4 409A Transition Elections: At a time and in a manner determined by the
Administrative Committee, Participants shall make timely elections to conform to
the Plan's terms effective on and after January 1, 2005. Such elections are
intended to meet the transition requirements of Section 409A of the Code and
Internal Revenue Service Notice 2005-1.
ARTICLE II - DEFINITIONS
2.1 "Account" shall mean the total amount credited to the account of a
Participant to reflect the interest of a Participant in the Plan resulting from
a Participant's Non-Pension Benefit calculated in accordance with Section 5.4.
2.2 "Actuarial Basis" shall mean an actuarial adjustment to Pension
Benefits that must be made as required by Code Section 409A when there is a
change made by a Participant to a previously elected or deemed-elected form of
payment paid over a lifetime. Reasonable actuarial assumptions to make such
adjustment shall be established in writing from time to time by the
Administrative Committee.
2.3 "Administrative Committee" shall mean the committee referred to in
Section 3.1 hereof.
2.4 "Board of Directors" shall mean the Board of Directors of the Company.
2.5 "Change in Control Benefits Protection Plan" shall mean the Change in
Control Benefits Protection Plan, as approved by the Southern Board, as it may
be amended from time to time in accordance with the provisions therein.
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2.6 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
2.7 "Common Stock" shall mean common stock of Southern Company.
2.8 "Company" shall mean Southern Company Services, Inc.
2.9 "Deferred Compensation Plan" shall mean The Southern Company Deferred
Compensation Plan, as amended from time to time.
2.10 "Designated Beneficiary" shall mean the person(s) or entity(ies)
identified by the Participant in a manner prescribed by the Administrative
Committee as eligible to receive benefits under the Plan. In the event no such
designation is made by a Participant or if such beneficiary shall not be living
or in existence at the time for commencement or continuance of payment under the
Plan following the Participant's death, payment shall be made to the person or
persons in the first of the following classes of successive preference, if then
living:
(a) the Participant's spouse on the date of his death;
(b) the Participant's legally recognized children, equally;
(c) the Participant's parents, equally;
(d) the Participant's brothers and sisters, equally; or
(e) the Participant's executors or administrators. Payment to such one or
more persons shall completely discharge the Plan with respect to the amount so
paid. 2.11 "Discount Rate" shall mean the thirty (30) year Treasury yield as
published by the Department of Treasury for purposes of compliance with Code
Section 417(e) determined for September of the calendar year prior to the
calendar year in which a Participant Separates from Service provided that the
maximum rate shall not exceed six percent (6%).
2.12 "Earnings" shall mean the total accumulated interest on a
Participant's Single-Sum Amount. Unless otherwise stated, Earnings accrue from
the date as of which a Participant's first installment is payable (ignoring for
this purpose any Key-Employee Delay) until all of the Participant's Single-Sum
Amount (and monthly interest accretion thereon) has been paid. Interest shall
compound monthly based on the rate of interest accretion for each month and the
unpaid portion of a Participant's Single-Sum Amount (including any unpaid
portion of any prior month's interest accretion). The rate of such interest
accretion for a month shall be the monthly equivalent of the per annum prime
rate of interest published in the Wall Street Journal as the base rate on the
corporate loans posted as of the last business day of each month by at least
seventy-five percent (75%) of the United States largest banks as of the last
business day of the month (or such other day of a month as the Administrative
Committee may determine).
2.13 "Effective Date" of this amendment and restatement shall mean January
1, 2005.
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2.14 "Employee" shall mean any person who is currently employed by an
Employing Company.
2.15 "Employing Company" shall mean the Company and any affiliate or
subsidiary of Southern Company which the Board of Directors may from time to
time determine to bring under the Plan and any successor to them. The Employing
Companies are set forth in Appendix A to the Plan, as amended from time to time.
2.16 "ESOP" shall mean The Southern Company Employee Stock Ownership Plan,
as amended from time to time until it merged into the Savings Plan effective
December 20, 2006.
2.17 "Expected Average Lifetime" shall mean the life expectancy of a
Participant in months using the Table of Unisex Mortality Rates promulgated by
the Internal Revenue Service for use to determine lump-sum payments from
qualified pension plans in accordance with Code Section 417(e) as of the 2007
calendar year.
2.18 "Key Employee" shall have the meaning ascribed to this term under Code
Section 409A as it applies to a Participant. The Administrative Committee shall
establish the time period required to determine key-employee status.
2.19 "Key-Employee Delay" shall mean the six (6) month delay in the
commencement of benefits applicable to Key Employees pursuant to the
requirements of Code Section 409A.
2.20 "Modification Delay" shall mean the requirements permitting a change
in time or form of payment as allowed under Section 409A(a)(4)(C) of the Code.
2.21 "Non-Pension Benefit" shall mean the benefit described in Section 5.2.
2.22 "Participant" shall mean an Employee or former Employee of an
Employing Company who is eligible and participates in the Plan pursuant to
Sections 4.1 and 4.2.
2.23 "Pension Benefit" shall mean the benefit described in Section 5.1.
2.24 "Pension Plan" shall mean The Southern Company Pension Plan, as
amended from time to time.
2.25 "Phantom Common Stock" shall mean the Common Stock in which a
Participant is deemed to invest his Non-Pension Benefit as if such Common Stock
had been purchased upon contribution to the Savings Plan and/or the ESOP, as the
case may be.
2.26 "Plan" shall mean The Southern Company Supplemental Benefit Plan, as
amended from time to time.
2.27 "Plan Year" shall mean the calendar year.
2.28 "Purchase Price" shall mean for purposes of deemed purchases of
Phantom Common Stock the following: (a) with respect to the Savings Plan, the
purchase price of a share of the Common Stock under the Savings Plan as of the
applicable Valuation Date; (b) with respect to any investment of dividends
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attributable to Phantom Common Stock in either the Savings Plan or the ESOP, the
dividend reinvestment price of a share of the Common Stock under the Savings
Plan as of the applicable Valuation Date; and (c) with respect to the ESOP, the
price at which a share of Common Stock is purchased with regard to a
contribution made for each applicable Plan Year.
2.29 "Sales Price" shall mean the closing price on any trading day of a
share of Common Stock based on consolidated trading as defined by the
Consolidated Tape Association and reported as part of the consolidated trading
prices of New York Stock Exchange listed securities.
2.30 "Savings Plan" shall mean The Southern Company Employee Savings Plan,
as amended from time to time.
2.31 "Separation from Service" as it applies to a Participant shall have
the meaning ascribed to this term under Code Section 409A.
2.32 "Single-Sum Amount" shall mean the discounted value of the Pension
Benefit based on a single life annuity form of benefit payable for an Expected
Average Lifetime calculated using the Discount Rate. This Single-Sum Amount
calculation shall be determined effective as of the first installment to be made
under Section 5.2 (ignoring for this purposes any Key-Employee Delay) taking
into account the following: (a) reductions for charges related to any Qualified
Pre-retirement Survivor Annuity form of benefit under the Pension Plan shall not
apply; and (b) the Pension Benefit and Expected Average Lifetime shall be based
on the Participant's age as of such first installment date.
2.33 "Southern Board" shall mean the board of directors of Southern
Company.
2.34 "Southern Company" shall mean Southern Company, its successors and
assigns.
2.35 "Total Disability" shall mean a total disability as determined by the
Social Security Administration and meeting the requirements of Section
409A(a)(2) of the Code.
2.36 "Trust" shall mean the Southern Company Deferred Compensation Trust.
2.37 "Valuation Date" shall mean each trading day of the New York Stock
Exchange, or any successor national exchange on which the Common Stock is traded
and with respect to which a Sales Price may be determined.
Where the context requires, the definitions of all terms set forth in the
Pension Plan, the ESOP, the Savings Plan, and the Deferred Compensation Plan
shall apply with equal force and effect for purposes of interpretation and
administration of the Plan, unless said terms are otherwise specifically defined
in the Plan. The masculine pronoun shall be construed to include the feminine
pronoun and the singular shall include the plural, where the context so
requires.
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ARTICLE III - ADMINISTRATION OF PLAN
3.1 Administrator. Effective March 1, 2006, the general administration of
the Plan shall be placed in the Administrative Committee. The Administrative
Committee shall consist of the Senior Vice President, Human Resource Services,
Southern Company Services, Inc. (which position is the successor to the Vice
President, Compensation and Benefits, Southern Company); the Chief Financial
Officer, Southern Company Services, Inc.; the Vice President, Tax, Southern
Company Services, Inc.; and the Comptroller of Southern Company; or any other
position or positions that succeed to the duties of the foregoing positions. Any
member may resign or may be removed by the Board of Directors and new members
may be appointed by the Board of Directors at such time or times as the Board of
Directors in its discretion shall determine. The Administrative Committee shall
be chaired by the Senior Vice President, Human Resource Services, Southern
Company Services, Inc. and may select a Secretary (who may, but need not, be a
member of the Administrative Committee) to keep its records or to assist it in
the discharge of its duties. A majority of the members of the Administrative
Committee shall constitute a quorum for the transaction of business at any
meeting. Any determination or action of the Administrative Committee may be made
or taken by a majority of the members present at any meeting thereof, or without
a meeting by resolution or written memorandum concurred in by a majority of the
members.
3.2 Powers.
(a) The Administrative Committee shall administer the Plan in accordance
with its terms and shall have all powers necessary to carry out the provisions
of the Plan more particularly set forth herein. It shall have the discretion to
interpret the Plan and shall determine all questions arising in the
administration, interpretation, and application of the Plan. Any such
determination by it shall be conclusive and binding on all persons. The
Administrative Committee shall be the agent for the service of process.
(b) If a claim for benefits under the Plan is denied, in whole or in part,
the Administrative Committee will provide a written notice of the denial within
a reasonable period of time, but not later than 90 days after the claim is
received. If special circumstances require more time to process the claim, the
Administrative Committee will issue a written explanation of the special
circumstances prior to the end of the 90-day period and a decision will be made
as soon as possible, but not later than 180 days after the claim is received.
The written notice of claim denial will include:
o Specific reasons why the claim was denied;
o Specific references to applicable provisions of the Plan document or
other relevant records or papers on which the denial is based, and
information about where a Participant or his or her Designated
Beneficiary may see them;
o A description of any additional material or information needed to
process the claim and an explanation of why such material or
information is necessary;
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o An explanation of the claims review procedure, including the time
limits applicable to such procedure, as well as a statement notifying
the Participant or his or her Designated Beneficiary of their right to
file suit if the claim for benefits is denied, in whole or in part, on
review.
Upon request, a Participant or his or her Designated Beneficiary will be
provided without charge, reasonable access to, and copies of, all
non-confidential documents that are relevant to any denial of benefits. A
claimant has 60 days from the day he or she receives the original denial to
request a review. Such request must be made in writing and sent to the
Administrative Committee. The request should state the reasons why the claim
should be reviewed and may also include evidence or documentation to support the
claimant's position.
The Administrative Committee will reconsider the claimant's claim, taking
into account all evidence, documentation, and other information related to the
claim and submitted on the claimant's behalf, regardless of whether such
information was submitted or considered in the initial denial of the claim. The
Administrative Committee will make a decision within 60 days. If special
circumstances require more time for this process, the claimant will receive
written explanation of the special circumstances prior to the end of the initial
60-day period and a decision will be sent as soon as possible, but not later
than 120 days after the Administrative Committee receives the request.
No legal action to receiver benefits or enforce or clarify rights under a
Plan can be commenced until the Participant or his or her Designated Beneficiary
has first exhausted the claims and review procedures provided under the Plan.
(c) The Administrative Committee may adopt such regulations as it deems
desirable for the conduct of its affairs. It may appoint such accountants,
counsel, actuaries, specialists, and other persons as it deems necessary or
desirable in connection with the administration of this Plan.
3.3 Duties of the Administrative Committee.
(a) The Administrative Committee is responsible for the daily
administration of the Plan. It may appoint other persons or entities to perform
any of its fiduciary functions. The Administrative Committee and any such
appointee may employ advisors and other persons necessary or convenient to help
it carry out its duties, including its fiduciary duties. The Administrative
Committee shall have the right to remove any such appointee from his position.
Any person, group of persons, or entity may serve in more than one fiduciary
capacity.
(b) The Administrative Committee shall maintain accurate and detailed
records and accounts of Participants and of their rights under the Plan and of
all receipts, disbursements, transfers, and other transactions concerning the
Plan. Such accounts, books, and records relating thereto shall be open at all
reasonable times to inspection and audit by persons designated by the
Administrative Committee.
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(c) The Administrative Committee shall take all steps necessary to ensure
that the Plan complies with the law at all times. These steps shall include such
items as the preparation and filing of all documents and forms required by any
governmental agency; maintaining of adequate Participants' records; recording
and transmission of all notices required to be given to Participants and their
Designated Beneficiaries; the receipt and dissemination, if required, of all
reports and information received from an Employing Company; securing of such
fidelity bonds as may be required by law; and doing such other acts necessary
for the proper administration of the Plan. The Administrative Committee shall
keep a record of all of its proceedings and acts, and shall keep all such books
of account, records, and other data as may be necessary for proper
administration of the Plan.
3.4 Indemnification. The Employing Companies shall indemnify the
Administrative Committee against any and all claims, losses, damages, expenses,
and liability arising from an action or failure to act, except when the same is
finally judicially determined to be due to gross negligence or willful
misconduct. The Employing Companies may purchase at their own expense sufficient
liability insurance for the Administrative Committee to cover any and all
claims, losses, damages, and expenses arising from any action or failure to act
in connection with the execution of the duties as Administrative Committee. No
member of the Administrative Committee who is also an Employee of the Employing
Companies shall receive any compensation from the Plan for his services in
administering the Plan.
ARTICLE IV - ELIGIBILITY
4.1 Eligibility Requirements. Subject to Section 4.3, all Employees who are
determined eligible to participate in accordance with Section 4.2 and who meet
one or more of the following criteria shall be eligible to receive benefits
under the Plan: (a) whose benefits under the Pension Plan are limited by the
limitations set forth in Sections 401(a)(17) or 415 of the Code, (b) whose
contributions by their Employing Company to the Savings Plan are limited by the
limitations set forth in Sections 401(a)(17), 401(k), 401(m), 402(g), or 415 of
the Code, (c) whose contributions by their Employing Company to the ESOP (until
its merger into the Savings Plan effective December 20, 2006) are limited by the
limitations set forth in Sections 401(a)(17) or 415 of the Code, or (d) who make
or have made deferrals under the Deferred Compensation Plan, which deferrals
cause a benefit to be made up under Section 5.1(a) or 5.4(b) of the Plan.
4.2 Determination of Eligibility. The Administrative Committee shall
determine which Employees are eligible to participate. Upon becoming a
Participant, an Employee shall be deemed to have assented to the Plan and to any
amendments hereafter adopted. The Administrative Committee shall be authorized
to rescind the eligibility of any Participant if necessary to ensure that the
Plan is maintained primarily for the purpose of providing deferred compensation
to a select group of management or highly compensated employees under the
Employee Retirement Income Security Act of 1974, as amended. In addition, a
Participant shall not be eligible for a Pension Benefit under the Plan unless
such Participant shall be entitled to a vested benefit under the Pension Plan.
If an Employee who was employed by Mirant Corporation (f/k/a Southern Energy,
Inc.) ("Mirant") or an affiliate thereof on or after April 2, 2001 is thereafter
employed by an Employing Company, he shall be treated the same as a new hire and
none of his service with Mirant shall be considered as Accredited Service under
Section 5.1.
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4.3 Eligibility of Employees of Savannah Electric and Power Company.
(a) Employees of Savannah Electric and Power Company meeting the
requirements of Sections 4.1 and 4.2 on or after January 1, 1997 shall be
eligible to participate in the Plan provided that such employees are not
participating in the Supplemental Executive Retirement Plan of Savannah Electric
and Power Company. Such Employees' benefits shall include any accruals for the
Plan Year ending December 31, 1997 as determined in accordance with Sections 5.1
and 5.4.
(b) Notwithstanding paragraph (a) above, Employees of Savannah Electric and
Power Company who have participated in The Southern Company Deferred
Compensation Plan on and after January 1, 1996, shall be eligible to participate
in the Plan but only to the extent that the Plan compensates employees for lost
benefits resulting from participation in The Southern Company Deferred
Compensation Plan. Such Employees' benefits shall include any accruals permitted
under the preceding sentence for Plan Years ending December 31, 1996 and
December 31, 1997 determined in accordance with Sections 5.1 and 5.4.
ARTICLE V - BENEFITS
5.1 Pension Benefit.
(a) Each Participant shall be entitled to a Pension Benefit equal to that
portion of his Retirement Income under the Pension Plan which is not payable
under the Pension Plan as a result of the exclusion of compensation deferred
under the Deferred Compensation Plan and/or the limitations imposed by Sections
401(a)(17) or 415(b) of the Code.
(b) For purposes of this Section 5.1, the Pension Benefit of a Participant
shall be calculated based on the Participant's Earnings that are considered
under the Pension Plan in calculating his Retirement Income, as modified below,
without regard to the limitation of Section 401(a)(17) of the Code. For purposes
of determining the Participant's Earnings, all incentive pay earned while he is
an Employee under any annual group incentive plans, as defined in Section 5.1 of
the Pension Plan, shall be considered, provided such incentive award was earned
on or after January 1, 1994. Alternatively, if it produces greater Earnings, all
incentive pay paid or that would have been paid but for an election to defer
such incentive award under the Deferred Compensation Plan to the Participant
under any annual group incentive plans, as defined in Section 5.1 of the Pension
Plan, shall be considered, provided such incentive pay was paid or deferred on
or after January 1, 1995. However, incentive pay shall only be included in the
Participant's Earnings for purposes of calculating the Participant's Pension
Benefit using the 1.25% formula described in Section 5.1 of the Pension Plan.
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5.2 Distribution of Pension Benefits.
(a) General Rule.
Subject to the transition rules set forth in Section 5.3, effective for
Participants who have not commenced their Pension Benefit on or before March 1,
2007, the Pension Benefit, as determined in accordance with Section 5.1, shall
be converted to a Single-Sum Amount and paid in ten (10) annual installments.
The first installment shall be derived from the Single-Sum Amount plus Earnings,
if any, divided by ten (10). Subsequent annual installments shall be an amount
equal to the Participant's unpaid Single-Sum Amount plus Earnings divided by the
number of remaining annual payments.
(b) Payment of Installments after Retirement.
(1) Commencement of Installment Payments. With respect to a
Participant who retires under the terms of the Pension Plan, the first
annual installment shall be paid as of the first day of the second full
calendar month following the Participant's Separation from Service.
Notwithstanding the foregoing, if a Participant is a Key-Employee, such
Participant shall be subject to the Key-Employee Delay and the first
installment payment shall be as of the first day of the seventh full
calendar month following the Participant's Separation from Service.
(2) Subsequent Nine Installment Payments. One additional installment,
until ten (10) are paid in total, shall be paid as of each anniversary of
the date the initial payment was made. For a Participant who is a Key
Employee, the anniversary date of the initial payment will be deemed to be
the date the first payment would have been made had the Key-Employee Delay
not applied. The second through the tenth installments will be paid on the
anniversary of this deemed initial payment date.
(c) Death of Participant.
(1) Death After Retirement. If a retirement-eligible Participant dies
after Separation from Service but before receiving all ten (10)
installments, the remaining installment payments shall be paid to the
Designated Beneficiary of the Participant at the same times and in the same
amounts that the Participant would have received if the Participant had not
died. Notwithstanding the foregoing, if a retired Key Employee dies during
the Key-Employee Delay and before receiving the first installment, then the
first installment shall be paid to the Designated Beneficiary as of the
beginning of the second full calendar month following the death of the
Participant or as soon as practical thereafter.
(2) Death Before Retirement. If a Participant dies on or after March
1, 2007, while actively employed and has a vested benefit in the Pension
Plan, one-hundred percent (100%) of the Single-Sum Amount determined in
accordance with Section 5.2(a) above shall be paid to the Participant's
Provisional Payee, if any, in ten (10) annual installments. Such
installments shall be determined and payable as if the Participant survived
to his fiftieth (50th) birthday, or actual date of death if later, and
Separated from Service. If such a Provisional Payee dies simultaneously
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with or after the Participant but before receipt of all installments, the
remaining payments shall be paid to the Participant's Designated
Beneficiary.
(d) FICA Tax Adjustment. A payment in addition to the ten (10) installments
described in Section 5.2(a) shall be made from the remaining Single-Sum Amount
which payment shall be based on the following adjustments: (1) the amount
necessary to pay the tax due under the Federal Insurance Contributions Act
("FICA") with respect to the accrued Pension Benefit determined upon retirement
(or such other appropriate "resolution date" as defined under Treasury
Regulation Section 31.3121(v)(2)); and (2) the amount estimated to pay the
Federal and State income tax withholding liability due on the amount paid in
subsection (1) plus the Federal and State income tax withholding liability due
on the amount paid in this subsection (2). This adjustment shall occur as of the
first of the month following written notification of the tax owed.
(e) Participants Who Terminate with Vested Benefits.
(1) General Rule. With respect to a Participant who Separates from
Service on or after March 1. 2007, who is not eligible to retire under
Article III of the Pension Plan, but who is vested in his Retirement Income
under Section 8.1 of the Pension Plan, notwithstanding anything to the
contrary, such Participant shall receive a Pension Benefit in the form of a
single payment made as of September 1 of the calendar year following the
calendar year of termination from employment equal to (1) divided by (2)
below:
(A) The Single-Sum Amount determined as if the Participant's
first installment date was to be coincident with his Normal
Retirement Date.
(B) The sum of one (1) plus the Discount Rate raised to a power
equal to the number of years and months between the
Participant's Normal Retirement Date and the September 1 of
the calendar year following the calendar year of termination
from employment.
For the avoidance of doubt, the Discount Rate used for this calculation is to be
the Discount Rate applicable for the calendar year the Participant Separates
from Service.
(2) Death Benefits. With respect to a Participant to which this
Section 5.2(e) applies, if such a Participant dies after Separation from
Service but prior to payment in accordance with Section 5.2(e)(1) above,
the Provisional Payee, if any, shall receive the single payment provided in
Section 5.2(e)(1) above at the same time the Participant would have
received such payment if he had not died.
5.3 Code Section 409A Transition Election and Other Related Rules
Applicable to Pension Benefit.
(a) Election General Rules.
At a time and in a manner prescribed by the Administrative Committee,
Participants who are actively employed on March 1, 2007, shall be eligible to
make an election to receive Pension Benefits in the form described in Section
5.2(a) or in the form described in Section 5.3(c) below. In the event a
11
Participant designated in accordance with the preceding sentence fails to make
such election for any reason, including but not limited to death, such
Participant's Pension Benefit shall be in the form described in Section 5.2(a).
(b) Transitioning Participants Electing Installments. The following
provisions apply to Participants described in Section 5.3(a) who have elected
the form of payment described in Section 5.2(a) or are deemed to have made such
election.
(1) General Rules. The first installment payment shall commence as of
January 1, 2008 or later and shall otherwise be paid in accordance with
Section 5.2(b). If a Participant commences payment of Pension Benefits in
conjunction with his benefit under the Pension Plan prior to January 1,
2008, such Pension Benefit shall be payable for the remainder of 2007 in
monthly increments starting at the same time and payable in the same form
elected by the Participant under the Pension Plan. With respect to a
Participant subject to the preceding sentence, the Participant's Single-Sum
Amount shall be computed as of the first day of the second full calendar
month following the Participant's Separation from Service and shall be
decreased by any monthly benefits actually paid to the Participant or a
Provisional Payee and increased by Earnings. For the avoidance of doubt, a
Participant subject to this Section 5.3(b)(1) whose Pension Benefit
payments start prior to January 1, 2008, will receive his first installment
on January 1, 2008 and subsequent installments will be paid as of the next
nine anniversaries of that payment.
(2) Installment Payment Commencement for Key Employees. If a
Participant to which Section 5.3(b) applies is a Key Employee, such
Participant shall be subject to the Key-Employee Delay and the first
installment payment made in accordance with Section 5.3(b)(1) shall be as
of the first day of the seventh full calendar month following the
Participant's Separation from Service but in no event earlier than as of
January 1, 2008. If such a Key Employee retires in 2007 and commences his
Pension Benefit in conjunction with his benefit under the Pension Plan
before 2008, such Key Employee's Pension Benefit shall be paid in monthly
increments starting at the same time and payable in the same form elected
by the Participant under the Pension Plan until his first installment is
paid in accordance with the preceding sentence. Under no circumstances are
payments of Pension Benefits made in conjunction with the Pension Plan
commencing in 2007 subject to the Key-Employee Delay. For the avoidance of
doubt, a Participant subject to this Section 5.3(b)(2) whose Pension
Benefit payments start prior to 2008 shall receive his first installment as
of the later of January 1, 2008 or the first day of the seventh full
calendar month following the applicable Key-Employee Delay; subsequent
installments will be paid as of the first day of the next nine calendar
years.
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(3) Death of Participant.
(A) Death Before Retirement. The provisions of Section 5.2(c)(2)
apply to a Participant described in this Section 5.3(b) who
dies while actively employed. The Provisional Payee of such
a Participant who dies prior to December 1, 2007 and could
have commenced payments in 2007 shall receive prior to the
first installment a survivor benefit in accordance with the
form of benefit elected by the Participant or deemed elected
under the Pension Plan as applicable. Thereafter, the
Provisional Payee shall receive the installment payments the
Participant would have received under Section 5.3(b)(1).
(B) Death After Retirement. The provisions of Section 5.2(c)(1)
apply to a Participant described in this Section 5.3(b) who
is retirement eligible and dies after Separation from
Service. However, the Provisional Payee of any Participant
who commences Pension Benefits in 2007 in conjunction with
his benefit under the Pension Plan and who dies during 2007
prior to payment of his first installment shall receive
prior to such first installment a survivor benefit in
accordance with the form of benefit elected by the
Participant or deemed elected under the Pension Plan as
applicable. Thereafter, installment payments that the
Participant would have received shall be paid to the
Participant's Designated Beneficiary.
(c) Transitioning Participants Electing Annuity Forms. The following rules
apply to Participants described in Section 5.3(a) who have elected the annuity
form of payment set forth in subparagraph (1) below subject to the provisions of
subparagraphs (2)-(5).
(1) General Rule. At a time and in a manner determined by the
Administrative Committee during 2007, such a Participant may elect to
receive his Pension Benefit in the form of a single life annuity, 50% joint
and survivor annuity, 100% joint and survivor annuity, 50% joint and
survivor annuity with pop-up, or 100% joint and survivor annuity with
pop-up (and with respect to SEPCO Employees those other forms available
under the Pension Plan except any form coordinated with payment of Social
Security benefits). In the event that a Participant elects an annuity but
fails to designate a form, such Participant shall be deemed to have
designated a single life annuity. These annuity forms shall be as described
in the Pension Plan and if a form other than a single life annuity is
selected, the Pension Benefit payable will be adjusted as described in the
Pension Plan. Payments shall commence as of the first day of the first full
calendar month following the Participant's Separation from Service.
The Participants who have elected the form of payment described in
this Section 5.3(c) shall receive an additional payment equal to (A) and
(B) below. Subsequent payments shall be adjusted as provided in subsection
(C) below.
13
(A) The amount necessary to pay the tax due under the Federal
Insurance Contributions Act (FICA) with respect to the
accrued Pension Benefit determined in accordance with the
requirements under Treasury Regulation Section 31.3121(v)(2)
upon retirement (or such other appropriate "resolution date"
as defined under Treasury Regulation Section 31.3121(v)(2))
calculated in accordance with Section 5.1;
(B) The amount estimated to pay the Federal and State income tax
withholding liability due on the amount paid under
subsection (A) above plus the amount of Federal and State
income tax withholding liability due on the amount paid
under this subsection (B); and
(C) An adjusted monthly benefit determined in a manner and on an
actuarially equivalent basis in accordance with the
methodology and assumptions used to calculate the tax due
under subsection (A) above which takes into account the
amounts paid under subsections (A) and (B) above and the
form of benefit elected by the Participant.
(2) Form of Annuity.
(A) Pre-2008 Commencement. Notwithstanding Section 5.3(c)(1), if
a Participant to which this Section 5.3(c) applies retires
in 2007 and commences receipt of his Pension Benefit in
conjunction with his benefit under the Pension Plan before
January 1, 2008, the Participant's Pension Benefit shall be
payable only in the form elected under the Pension Plan and
shall be calculated using the same annuity form of payment
factors as provided for under the terms of the Pension Plan
as in effect during 2007.
(B) Post-2007 Commencement. Any Participant to which this
Section 5.3(c) applies who has not commenced payment of his
Pension Benefit prior to 2008 may change the form of payment
elected in Section 5.3(c)(1) to another permitted form
described in that Section at a time and in a manner
prescribed by the Administrative Committee. If the form of
payment is changed, the Pension Benefit payable pursuant to
the original election will be actuarially adjusted using the
Actuarial Basis to reflect the new form selected.
(3) Key Employee Rules. If a Participant to which this Section 5.3(c)
applies is a Key Employee and the commencement date of his Pension Benefit
is on or after January 1, 2008, such Participant will be subject to the
Key-Employee Delay and shall receive a lump-sum payment as of the first day
of the seventh full month following the Participant's Separation from
Service in an amount equal to six (6) monthly payments due to the
Participant under the Plan, plus the monthly payment then due to the
14
Participant for the seventh month. Thereafter, the appropriate monthly
benefit shall be paid to the Key Employee and his Provisional Payee, if
any. If such a Participant is a Key Employee and the commencement date of
his Pension Benefit is before January 1, 2008, the Pension Benefit shall be
paid in accordance with Section 5.3(c)(2)(A); the Key-Employee Delay will
not apply. If a Key Employee dies during the Key-Employee Delay, the
Designated Beneficiary shall receive any benefits that would have been paid
if there were no Key-Employee Delay up to the date of death as of the first
of the month following the Participant's death or as soon as practicable
thereafter. Interest shall not be added to such benefits. In addition, if
such deceased Key Employee elected a form of payment providing for payment
to continue to a Provisional Payee pursuant to Section 5.3(c)(1), subject
to Section 5.3(c)(2), those payments will begin as of the first of the
month following such Key Employee's death or as soon as practicable
thereafter.
(4) Death of Participant.
(A) Death After Retirement. If a retirement-eligible Participant
to which Section 5.3(c)(1) applies dies after Separation
from Service, such Participant's Provisional Payee, if any,
shall receive monthly payments for the remainder of the
Provisional Payee's life based on the annuity form of
payment the Participant elected or is deemed to have elected
pursuant to Section 5.3(c)(1), subject to Section 5.3(c)(2).
Such Payments will commence as of the first of the month
following such Participant's death or as soon as practicable
thereafter.
(B) Death Before Retirement. If a Participant to which Section
5.3(c) applies dies while actively employed and has a vested
benefit in the Pension Plan, then Section 5.2(c)(2) shall
apply.
(5) QPSA Charges Waived. Any benefit paid in accordance with this
Section 5.3(c) shall be calculated without regard to the charge associated
with any Qualified Pre-retirement Survivor Annuity form elected.
(d) Inactive Employee Transition Election. In the event a Participant has
Separated from Service prior to March 1, 2007, has deferred commencement until
after March 1, 2007, and is eligible to receive a benefit under the Pension Plan
on or before January 1, 2008, such Participant must make an election in
accordance with Section 5.3(a) at a time and in a manner prescribed by the
Administrative Committee and must commence payment by no later than January 1,
2008. The requirements of Section 5.3(b) or Section 5.3(c) (ignoring the fact
that the Participant previously incurred a Separation from Service) apply as the
case may be based on the Participant's ultimate election under Section 5.3(a).
If a Participant dies before making an election under this Section 5.3(a),
Pension Benefit payments shall be made consistent with Section 5.3(b)(3)(B) if
the Participant dies prior to making his election to commence his Pension
Benefit in conjunction with the commencement of his benefit under the Pension
15
Plan or shall be made consistent with Section 5.3(c)(4)(A) if made after making
his election to commence his Pension Benefit in conjunction with the
commencement of his benefit under the Pension Plan.
(e) Survivor Benefits in the case of Pre-effective Date Deaths. If a
Participant died prior to March 1, 2007 while actively employed and had a vested
benefit in the Pension Plan, the Provisional Payee, if any, shall receive the
form of benefit provided under the Pension Plan commencing at the same time the
Provisional Payee would receive a survivor benefit under the Pension Plan.
(f) Participants Who Terminate with Vested Benefits.
(1) General Rule. With respect to a Participant who Separated from
Service before March 1. 2007, who was not eligible to retire under Article
III of the Pension Plan before January 1, 2008, but who was vested in his
Retirement Income under Section 8.1 of the Pension Plan, notwithstanding
anything to the contrary, such Participant shall receive a Pension Benefit
in the form described in Section 5.2(e)(1) paid as of September 1, 2008
based on a Discount Rate determined as of September 2006.
(2) Death Benefits. With respect to a Participant to which this
Section 5.3(f) applies, if such a Participant dies prior to payment in
accordance with Section 5.3 (f)(1) above, the Provisional Payee, if any,
shall receive the single payment provided in Section 5.3(f)(1) above at the
same time the participant would have received such payment if he had not
died.
5.4 Non-Pension Benefit.
(a) A Participant shall be entitled to a Non-Pension Benefit which is
determined under this Section 5.4. An Account shall be established for the
Participant as of his initial Plan Year of participation in the Plan. Each Plan
Year, such Account shall be credited with an amount equal to the amount that his
Employing Company is prohibited from contributing (1) to the Savings Plan on
behalf of the Participant as a result of the limitations imposed by Sections
401(a)(17), 401(k), 401(m), 402(g), or 415(c) of the Code, and (2) to the ESOP
on behalf of the Participant as a result of the limitations imposed by Sections
401(a)(17) or 415(c) of the Code.
(b) For purposes of this Section 5.4, the Non-Pension Benefit of a
Participant shall be calculated based on the Participant's compensation that
would have been considered in calculating allocations to his accounts under the
Savings Plan and ESOP without regard to the limitations of Section 401(a)(17) or
Section 402(g) of the Code including any portion of his compensation he may have
elected to defer under the Deferred Compensation Plan, but with respect to only
the Savings Plan excluding incentive pay he deferred under the Deferred
Compensation Plan.
(c) The Non-Pension Benefit of the Participant shall be deemed to be
invested in Phantom Common Stock. On each such date of investment, a
Participant's Account shall be credited with the number of shares (including
fractional shares) of Phantom Common Stock which could have been purchased on
such date, based upon the Common Stock's Purchase Price. As of the date upon
which occurs the payment of dividends on the Common Stock, if any, there shall
be credited with respect to shares of Phantom Common Stock in the Participant's
Account on such date, such additional shares (including fractional shares) of
16
Phantom Common Stock as follows:
(1) In the case of cash dividends, such additional shares as could be
purchased at the Purchase Price with the dividends which would have been
payable if the credited shares had been outstanding;
(2) In the case of dividends payable in property other than cash or
Common Stock, such additional shares as could be purchased at the Purchase
Price with the fair market value of the property which would have been
payable if the credited shares had been outstanding; or
(3) In the case of dividends payable in Common Stock, such additional
shares as would have been payable on the credited shares if they had been
outstanding.
(d) As soon as practicable following the first day of his eligibility to
have benefits credited to his Account, a Participant shall designate in a form
to be prescribed by the Administrative Committee the method of payment of his
Account, which shall be the payment of a single lump sum or a series of annual
installments not to exceed twenty (20). The method of distribution initially
designated by a Participant shall not be revoked and shall govern the
distribution of a Participant's Account, except that such method of distribution
may be modified by the Participant but only if such modification meets the
requirements of a Modification Delay. Each Participant, his Designated
Beneficiary, and legal representative shall be bound as to any action taken
pursuant to the method of distribution elected by a Participant and the terms of
the Plan.
5.5 Distribution of Non-Pension Benefits.
(a) In the event a Participant elects to receive the distribution of his
Account in a lump sum, such payment shall be made as soon as reasonably
practicable after Separation from Service. The tax due under the Federal
Insurance Contributions Act under Treasury Regulation Section 31.312(v)(2) shall
be withheld from this payment. Notwithstanding the foregoing, if a Participant
is a Key Employee, such Participant shall be subject to the Key-Employee Delay
and the payment of the lump sum following Separation from Service shall be as of
the beginning of the seventh full calendar month.
(b) In the event a Participant elects to receive the distribution of his
Account in annual installments, the first payment shall be made as soon as
practicable following his Separation from Service. The first installment shall
equal the market value of any shares of Phantom Common Stock (and fractions
thereof) credited to said Participant's Account based on the Sales Price first
deducting the amount calculated as the tax due under the Federal Insurance
Contributions Act under Treasury Regulation Section 31.3121(v)(2), second
dividing the resulting number by the number of annual installment payments, and
finally summing such tax calculated and the quotient of such division. Each
subsequent annual payment shall be an amount equal to the market value of any
shares of Phantom Common Stock (and fractions thereof) credited to said
Participant's Account based on the Sales Price, divided by the number of the
remaining annual payments and shall be paid as soon as practicable following
each anniversary of the initial payment date (or what would have been the
17
initial payment date but for the Key-Employee Delay) until the balance of the
Participant's Account is paid in full. For purposes of Section 409A of the Code,
installments shall be treated as a single payment. Notwithstanding the
foregoing, if a Participant is a Key Employee, such Participant shall be subject
to the Key-Employee Delay and the first installment payment following Separation
from Service shall be as of the beginning of the seventh full calendar month.
(c) The transfer by a Participant between companies within The Southern
Company shall not be deemed to be a Separation from Service with an Employing
Company. With regard to any distribution made under this Article, the market
value of any shares of Phantom Common Stock credited to a Participant's Account
shall be based on the Sales Price. No portion of a Participant's Account shall
be distributed in Common Stock.
(d) Upon the death of a Participant or a former Participant prior to the
payment of his entire Account balance, the unpaid balance of the market value of
any shares of Phantom Common Stock (and fractions thereof) credited to said
Participant's Account based on the Sales Price shall be paid to the Designated
Beneficiary. The Designated Beneficiary selection may be changed in a manner
prescribed by the Administrative Committee by the Participant or former
Participant at any time without the consent of the prior Beneficiary.
(e) Upon the Total Disability of a Participant or former Participant prior
to the payment of his entire Account balance, the unpaid balance of the market
value of any shares of Phantom Common Stock (and fractions thereof) credited to
said Participant's Account based on the Sales Price shall be paid in accordance
with the distribution method elected by such Participant or former Participant
commencing as of such Participant's Separation from Service.
5.6 Allocation of Pension Benefit Liability. In the event that a
Participant eligible to receive a Pension Benefit has been employed at more than
one Employing Company, the Pension Benefit liability shall be apportioned so
that each such Employing Company is obligated in accordance with this Section
5.6 to cover the percentage of the total Pension Benefit as determined below.
Each Employing Company's share of the Pension Benefit liability shall be
calculated by multiplying the Pension Benefit by a fraction where the numerator
of such fraction is the base rate of pay, as defined by the Administrative
Committee, received by the Participant at the respective Employing Company on
his date of termination of employment or transfer, as applicable, multiplied by
the Accredited Service earned by the Participant at the respective Employing
Company and where the denominator of such fraction is the sum of all numerators
calculated for each respective Employing Company by which the Participant has
been employed.
5.7 Funding of Benefits. Except as expressly limited under the terms of the
Trust, neither the Company nor any Employing Company hereunder shall reserve or
otherwise set aside funds for the payment of its obligations under the Plan. In
any event, such obligations shall be paid or deemed to be paid solely from the
general assets of the Employing Companies. Participants shall only have the
status of general, unsecured creditors of the Company and their respective
Employing Companies. Notwithstanding that a Participant shall be entitled to
receive the balance of his Account under the Plan, the assets from which such
amount shall be paid shall at all times remain subject to the claims of the
creditors of the Participant's Employing Company.
18
5.8 Withholding. There shall be deducted from Plan payments and, if
necessary, from the Non-Pension Account under the Plan the amount of any tax
required by any governmental authority to be withheld and paid over by an
Employing Company to such governmental authority for the account of the
Participant or Designated Beneficiary.
5.9 Recourse Against Deferred Compensation Trust. In the event a
Participant who is employed on or after January 1, 1999 with an "Employing
Company" (as such term is defined in the Change in Control Benefits Protection
Plan) disputes the calculation of his Pension Benefit or Non-Pension Benefit, or
payment of amounts due under the terms of the Plan, the Participant has recourse
against the Company, the Employing Company by which the Participant is or was
employed, if different, the Plan, and the Trust for payment of benefits to the
extent the Trust so provides.
5.10 Change in Control. The provisions of the Change in Control Benefits
Protection Plan are incorporated herein by reference to determine the occurrence
of a change in control or preliminary change in control of Southern Company or
an Employing Company, the benefits to be provided hereunder, and the funding of
the Trust in the event of such a change in control. Any modifications to the
Change in Control Benefits Protection Plan are likewise incorporated herein.
ARTICLE VI - MISCELLANEOUS
6.1 Assignment. Neither the Participant, his Designated Beneficiary, nor
his legal representative shall have any rights to sell, assign, transfer, or
otherwise convey the right to receive the payment of any Pension Benefit or
Non-Pension Benefit due hereunder, which payment and the right thereto are
expressly declared to be nonassignable and nontransferable. Any attempt to
assign or transfer the right to payment under the Plan shall be null and void
and of no effect.
6.2 Amendment and Termination. Except for the provisions of Section 5.10
hereof, which may not be amended following a "Southern Change in Control" or
"Subsidiary Change in Control", as defined in the Change in Control Benefits
Protection Plan, the Plan may be amended or terminated at any time by the Board
of Directors, provided, however, that no amendment or termination shall cause a
forfeiture or reduction in any benefits accrued as of the date of such amendment
or termination. The Plan may also be amended by the Administrative Committee (a)
if such amendment does not involve a substantial increase in cost to any
Employing Company, or (b) as may be necessary, proper, or desirable in order to
comply with laws or regulations enacted or promulgated by any federal or state
governmental authority.
6.3 No Guarantee of Employment. Participation hereunder shall not be
construed as creating any contract of employment between any Employing Company
and a Participant, nor shall it limit the right of an Employing Company to
suspend, terminate, alter, or modify, whether or not for cause, the employment
relationship between such Employing Company and a Participant.
6.4 For the avoidance of doubt, the provisions of the Plan effective in the
Plan's amendment and restatement dated May 1, 2000 ("2000 Plan") concerning
19
Mirant Shares were applied through the liquidation of Mirant Shares as a form of
investment in the Plan as of June 30, 2006. Although these provisions concerning
Mirant Shares are not restated in this amendment and restatement, a
Participant's rights concerning Mirant Shares are as set forth in such 2000
Plan. To this limited extent, the provisions in the 2000 Plan concerning Mirant
Shares are incorporated herein.
6.5 Construction. This Plan shall be construed in accordance with and
governed by the laws of the State of Georgia, to the extent such laws are not
otherwise superseded by the laws of the United States.
IN WITNESS WHEREOF, the amended and restated Plan has been executed by a
duly authorize officer of Southern Company Services, Inc., pursuant to
resolutions of the Board of Directors of the Company, this 30th day of March,
2007.
SOUTHERN COMPANY SERVICES, INC.
By: /s/Robert A. Bell
Its: Senior Vice President H. R. Services
Attest:
By: /s/Patricia L. Roberts
Its: Secretary
20
APPENDIX A
THE SOUTHERN COMPANY SUPPLEMENTAL BENEFIT PLAN
EMPLOYING COMPANIES AS OF JANUARY 1, 2005
Alabama Power Company
Georgia Power Company
Gulf Power Company
Mississippi Power Company
Savannah Electric and Power Company (until merged into Georgia
Power Company effective July 1, 2006)
Southern Communications Services, Inc.
Southern Company Energy Solutions, LLC
Southern Company Services, Inc.
Southern Nuclear Operating Company, Inc.
SCHEDULE OF PROVISIONS
FOR PRE-2005 NON-PENSION BENEFITS
ARTICLE I ARTICLE I - PURPOSE
1.1 Schedule of Provisions for Pre-2005 Non-Pension Benefits: This Schedule
sets forth the operative provisions of the Plan applicable to "grandfathered"
Non-Pension Benefits which are treated by the Employing Companies as not subject
to Section 409A of the Code. The Account balance (plus earnings thereon) of the
grandfathered Non-Pension Benefits shall only be subject to the provisions set
forth in this Schedule. In accordance with transition rules under Section 409A
of the Code, Internal Revenue Service Notice 2005-1, or any other applicable
guidance from the Department of Treasury, these provisions are only intended to
preserve the rights and features of the "grandfathered" Non-Pension Benefits and
are, therefore, not intended to "materially modify" any aspect of such rights
and features. Provisions of this Schedule should be so construed whenever
necessary or appropriate. Provisions in this Schedule shall only be amended in
accordance with this Schedule's terms.
ARTICLE II - DEFINITIONS
2.1 "Account" shall mean for purposes of this Schedule the amount credited
to the account of a Participant to reflect the interest of a Participant in the
Plan solely pursuant to the terms of this Schedule resulting from a
Participant's Non-Pension Benefit calculated in accordance with Section 5.2.
This Account amount is attributable to those deferrals which are not subject to
Section 409A of the Code.
2.2 "Administrative Committee" shall mean the committee referred to in
Section 3.1 of this Schedule.
2.3 "Beneficiary shall have the same meaning as set forth for "Designated
Beneficiary" in the main body of the Plan.
2.4 "Board of Directors shall mean the Board of Directors of the Company.
2.5 "Change in Control Benefits Protection Plan shall mean the Change in
Control Benefits Protection Plan, as approved by the Southern Board, as it may
be amended from time to time in accordance with the provisions therein.
2.6 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
2.7 "Common Stock shall mean common stock of Southern Company.
2.8 "Company" shall mean Southern Company Services, Inc.
2.9 "Deferred Compensation Plan" shall mean The Southern Company Deferred
Compensation Plan, as amended from time to time.
2.10 "Employee shall mean any person who is currently employed by an
Employing Company.
2.11 "Employing Company" shall mean the Company and any affiliate or
subsidiary of Southern Company which the Board of Directors may from time to
time determine to bring under the Plan and any successor to them. The Employing
Companies are set forth in Appendix A to the Plan, as amended from time to time.
2.12 "ESOP" shall mean The Southern Company Employee Stock Ownership Plan,
as amended from time to time.
2.13 "Non-Pension Benefit" shall mean the benefit described in Section 5.2
of this Schedule.
2.14 "Participant" shall mean an Employee or former Employee of an
Employing Company who is eligible and participates in the Plan pursuant to
Article IV of this Schedule.
2.15 "Pension Benefit" shall mean the benefit described in Section 5.1 of
this Schedule.
2.16 "Pension Plan" shall mean The Southern Company Pension Plan, as
amended from time to time.
2.17 "Phantom Common Stock" shall mean the Common Stock in which a
Participant is deemed to invest his Non-Pension Benefit as if such Common Stock
had been purchased upon contribution to the Savings Plan, the ESOP, and/or the
Performance Sharing Plan, as the case may be.
2.18 "Plan" shall mean The Southern Company Supplemental Benefit Plan, as
amended and restated effective January 1, 2005, which includes this Schedule, as
may be further amended from time to time.
2.19 "Performance Sharing Plan" shall mean The Southern Company Performance
Sharing Plan, as amended from time to time prior to its merger into the Savings
Plan.
2.20 "Plan Year" shall mean the calendar year.
2.21 "Purchase Price" shall mean for purposes of deemed purchases of
Phantom Common Stock the following: (a) with respect to the Savings Plan and the
Performance Sharing Plan, the purchase price of a share of the Common Stock
under the Savings Plan as of the applicable Valuation Date; (b) with respect to
2
any investment of dividends attributable to Phantom Common Stock, the dividend
reinvestment price of a share of the Common Stock under the Savings Plan as of
the applicable Valuation Date; and (c) with respect to the ESOP, the price at
which a share of Common Stock is purchased with regard to a contribution made
for each applicable Plan Year.
2.22 "Sales Price" shall mean the closing price on any trading day of a
share of Common Stock based on consolidated trading as defined by the
Consolidated Tape Association and reported as part of the consolidated trading
prices of New York Stock Exchange listed securities.
2.23 "Savings Plan" shall mean The Southern Company Employee Savings Plan,
as amended from time to time.
2.24 "Southern Board" shall mean the board of directors of Southern
Company.
2.25 "Southern Company" shall mean Southern Company, its successors and
assigns.
2.26 "Trust" shall mean the Southern Company Deferred Compensation Trust.
2.27 "Valuation Date" shall mean each trading day of the New York Stock
Exchange, or any successor national exchange on which the Common Stock is traded
and with respect to which a Sales Price may be determined.
Where the context requires, the definitions of all terms set forth in the
Pension Plan, the ESOP, the Performance Sharing Plan, the Savings Plan, and the
Deferred Compensation Plan shall apply with equal force and effect for purposes
of interpretation and administration of the Plan, unless said terms are
otherwise specifically defined in the Plan. The masculine pronoun shall be
construed to include the feminine pronoun and the singular shall include the
plural, where the context so requires.
ARTICLE III - ADMINISTRATION OF SCHEDULE
3.1 Article III of the main body of the Plan is herein incorporated into
this Schedule by reference. Any amendment to Article III of the main body of the
Plan shall operate as amendment to this Article III of the Schedule.
ARTICLE IV - ELIGIBILITY
4.1 For so long as an Employee has an Account balance governed by this
Schedule, he shall be a Participant in the Plan for purposes of this Schedule,
and such Account balance shall be maintained and administered solely in
accordance with the terms of this Schedule.
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ARTICLE V - BENEFITS
5.1 Pension Benefit.
Pension Benefits are not subject to grandfather provisions set forth in
this Schedule. Plan provisions concerning Pension Benefits are set forth in the
main body of the Plan.
5.2 Non-Pension Benefit.
(a) No Non-Pension Benefits which are subject to Section 409A of the Code
shall be credited to the Account of a participant for purposes of the provisions
of this Schedule. The Non-Pension Benefit Account of the Participant governed by
this Schedule shall be deemed to be invested in Phantom Common Stock. On each
such date of investment, a Participant's Account shall be credited with the
number of shares (including fractional shares) of Phantom Common Stock which
could have been purchased on such date, based upon the Common Stock's Purchase
Price. As of the date upon which occurs the payment of dividends on the Common
Stock, there shall be credited with respect to shares of Phantom Common Stock in
the Participant's Account on such date, such additional shares (including
fractional shares) of Phantom Common Stock as follows:
(1) In the case of cash dividends, such additional shares as could be
purchased at the Purchase Price with the dividends which would have been
payable if the credited shares had been outstanding;
(2) In the case of dividends payable in property other than cash or
Common Stock, such additional shares as could be purchased at the Purchase
Price with the fair market value of the property which would have been
payable if the credited shares had been outstanding; or
(3) In the case of dividends payable in Common Stock, such additional
shares as would have been payable on the credited shares if they had been
outstanding.
(d) As soon as practicable following the first day of his eligibility to
have benefits credited to his Account, a Participant shall designate in a form
to be prescribed by the Administrative Committee the method of payment of his
Account, which shall be the payment of a single lump sum or a series of annual
installments not to exceed twenty (20). The method of distribution initially
designated by a Participant shall not be revoked and shall govern the
distribution of a Participant's Account. Notwithstanding the foregoing, in the
sole discretion of the Administrative Committee, upon application by the
Participant, the method of distribution designated by such Participant may be
modified, provided the Participant requests such modification not later than the
366th day prior to a distribution of such Participant's Account in accordance
with the terms of the Plan, provided, however, that any Participant who is
required to file reports pursuant to Section 16(a) of the Securities and
Exchange Act of 1934, as amended, with respect to equity securities of The
Southern Company shall not be permitted to amend his distribution election
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during any time period for which such Participant is required to file any such
reports with respect to his Non-Pension Benefit unless such amendment is
specifically approved by the Administrative Committee in its sole discretion.
Each Participant, his Beneficiary, and legal representative shall be bound as to
any action taken pursuant to the method of distribution elected by a Participant
and the terms of the Plan. Notwithstanding any provision of the Plan to the
contrary, if a Participant has elected to receive his Plan distribution in
annual installment payments and such Participant's Plan Account does not exceed
five thousand dollars ($5,000) (as adjusted from time to time by Treasury
regulations applicable to tax-qualified retirement plans) at the time such
benefit is valued for distribution, such payment shall be made as a single,
lump-sum payment to the Participant.
5.3 Distribution of Non-Pension Benefits.
(a) When a Participant terminates his employment with an Employing Company,
such Participant shall be entitled to receive the market value of any shares of
Phantom Common Stock (and fractions thereof) reflected in his Account in a
single, lump-sum distribution or annual installments not to exceed twenty (20).
Such distribution shall be made not later than sixty (60) days following the
date on which his termination of employment occurs, or as soon as reasonably
practicable thereafter. The transfer by a Participant between companies within
The Southern Company shall not be deemed to be a termination of employment with
an Employing Company. With regard to any distribution made under this Article of
the Schedule, the market value of any shares of Phantom Common Stock credited to
a Participant's Account shall be based on the Sales Price. No portion of a
Participant's Account shall be distributed in Common Stock.
(b) In the event a Participant elects to receive the distribution of his
Account in annual installments, the first payment shall be made not later than
sixty (60) days following the date on which his termination of employment
occurs, or as soon as reasonably practicable thereafter, subject however to the
cash-out provisions of Section 5.2(d) of this Schedule. Installments shall equal
the balance in the Participant's Account taking into account the tax due under
the Federal Insurance Contributions Act divided by the number of annual
installment payments. Each subsequent annual payment shall be an amount equal to
the balance in the Participant's Account as of the Valuation Date, divided by
the number of the remaining annual payments and shall be due on the anniversary
of the preceding payment date.
(c) Upon the death of a Participant or a former Participant prior to the
payment of the market value of any shares of Phantom Common Stock (and fractions
thereof) credited to said Participant's Account based on the Sales Price, the
unpaid balance shall be paid in the sole discretion of the Administrative
Committee (1) in a lump sum to the designated Beneficiary of a Participant or
former Participant within sixty (60) days following the date on which the
Administrative Committee is provided evidence of the Participant's death (or as
soon as reasonably practicable thereafter) or (2) in accordance with the
distribution method chosen by such Participant or former Participant. The
Beneficiary designation may be changed by the Participant or former Participant
at any time without the consent of the prior Beneficiary
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(d) Upon the total disability of a Participant or former Participant, as
determined by the Social Security Administration, prior to the payment of the
market value of any shares of Phantom Common Stock (and fractions thereof)
credited to such Participant's Account based on the Sales Price, the unpaid
balance of his Account shall be paid in the sole discretion of the
Administrative Committee (1) in a lump sum to the Participant or former
Participant, or his legal representative within sixty (60) days following the
date on which the Administrative Committee receives notification of the
determination of a disability by the Social Security Administration (or as soon
as reasonably practicable thereafter) or (2) in accordance with the distribution
method elected by such Participant or former Participant.
(e) The Administrative Committee, in its sole discretion upon application
made by the Participant, a designated Beneficiary, or their legal
representative, may determine to accelerate payments or, in the event of death
or total disability (as determined by Social Security Administration), to extend
or otherwise make payments in a manner different from the manner in which such
payment would be made under the method of distribution elected by the
Participant in the absence of such determination. Notwithstanding any provision
of the Plan to the contrary, if a Participant has elected to receive his Plan
distribution in annual installment payments and such Participant's Plan Account
does not exceed five thousand dollars ($5,000) (as adjusted from time to time by
Treasury regulations applicable to tax-qualified retirement plans) at the time
such benefit is valued for distribution, such payment shall be made as a single,
lump-sum payment to the Participant.
5.4 Recourse Against Deferred Compensation Trust. In the event a
Participant who is employed on or after January 1, 1999 with an "Employing
Company" (as such term is defined in the Change in Control Benefits Protection
Plan) disputes the calculation of his Non-Pension Benefit under this Schedule,
or payment of amounts due under the terms of the Plan, the Participant has
recourse against the Company, the Employing Company by which the Participant is
or was employed, if different, the Plan, and the Trust for payment of benefits
to the extent the Trust so provides.
5.5 Change in Control. The provisions of the Change in Control Benefits
Protection Plan are incorporated herein by reference to determine the occurrence
of a change in control or preliminary change in control of Southern Company or
an Employing Company, the benefits to be provided hereunder and the funding of
the Trust in the event of such a change in control. Any modifications to the
Change in Control Benefits Protection Plan are likewise incorporated herein.
ARTICLE VI - MISCELLANEOUS
6.1 Except for Section 6.2 of the main body of the Plan, Article VI is
hereby incorporated by reference into this Schedule. Any amendment to Article VI
of the main body of the Plan shall operate as an amendment to this Article VI of
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the Schedule except that Section 6.2 below shall set forth the sole method for
amending and/or terminating this Schedule.
6.2 This Schedule may be amended, modified, or terminated by the Board of
Directors in its sole discretion at any time and from time to time by resolution
expressly modifying this Schedule; provided, however, that (a) Section 5.5 of
this Schedule may not be amended following a "Southern Change in Control" or
"Subsidiary Change in Control" (as defined in the Change in Control Benefits
Protection Plan), (b) no such amendment, modification, or termination shall
cause a forfeiture or reduction in any benefits accrued as of the date of such
amendment, modification, or termination and/or (c) Article III and Section 6.1
of this Schedule may be amended in accordance with their terms. It is the
Company's intent that any modification to this Schedule shall not constitute nor
shall it be interpreted to be a "material modification" of any right or feature
of this Schedule as such term is defined under Section 409A of the Code,
Internal Revenue Service Notice 2005-1, or any subsequent guidance promulgated
by the Treasury Department.