Exhibit 10(a)70
PENSION PLAN
FOR EMPLOYEES OF
GEORGIA POWER COMPANY
AS AMENDED AND RESTATED
EFFECTIVE AS OF JANUARY 1, 1989
TABLE OF CONTENTS
Page
ARTICLE I
Definitions . . . . . . . . . . . 2
ARTICLE II
Eligibility . . . . . . . . . . . 14
2.1 Employees . . . . . . . . . . . . . . . . . . . . . 14
2.2 Employees represented by a collective bargaining
agent . . . . . . . . . . . . . . . . . . . . . . . 14
2.3 Persons in military service and Employees on
authorized leave of absence . . . . . . . . . . . . 14
2.4 Employees reemployed . . . . . . . . . . . . . . . 15
2.5 Participation upon return to eligible class . . . . 15
2.6 Exclusion of certain categories of employees . . . 15
2.7 Waiver of participation . . . . . . . . . . . . . . 16
ARTICLE III
Retirement . . . . . . . . . . . 17
3.1 Retirement at Normal Retirement Date . . . . . . . 17
3.2 Retirement at Early Retirement Date . . . . . . . . 17
3.3 Retirement at Deferred Retirement Date . . . . . . 17
ARTICLE IV
Determination of Accredited Service . . . . . 18
4.1 Accredited Service pursuant to Prior Plan . . . . . 18
4.2 Accredited Service . . . . . . . . . . . . . . . . 18
4.3 Accredited Service and Years of Service in respect
of service of certain Employees previously
employed by the Employer or by Affiliated
Employers . . . . . . . . . . . . . . . . . . . . . 20
4.4 Accrual of Retirement Income during period of
total disability . . . . . . . . . . . . . . . . . 21
4.5 Employees leaving Employer's service . . . . . . . 22
4.6 Transfers to or from Affiliated Employers . . . . . 23
4.7 Transfers from Savannah Electric and Power
Company . . . . . . . . . . . . . . . . . . . . . . 24
4.8 Retirement income for certain former employees of
Southern Electric Generating Company . . . . . . . 25
ARTICLE V
Retirement Income . . . . . . . . . . 26
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5.1 Normal Retirement Income . . . . . . . . . . . . . 26
5.2 Minimum Retirement Income payable upon retirement
at Normal Retirement Date or Deferred Retirement
Date . . . . . . . . . . . . . . . . . . . . . . . 26
5.3 Minimum Retirement Income upon retirement at Early
Retirement Date or upon termination of service by
reason of death or otherwise prior to retirement . 27
5.4 Calculation of Social Security Offset . . . . . . . 28
5.5 Early Retirement Income . . . . . . . . . . . . . . 29
5.6 Deferred Retirement Income . . . . . . . . . . . . 29
5.7 Payment of Retirement Income . . . . . . . . . . . 30
5.8 Termination of Retirement Income . . . . . . . . . 31
5.9 Required distributions . . . . . . . . . . . . . . 31
5.10 Suspension of Retirement Income for
reemployment . . . . . . . . . . . . . . . . . . . 33
5.11 Increase in Retirement Income of retired
Employees for service prior to January 1, 1991 . . 33
5.12 Special provisions relating to the treatment of
absence of an Employee from the service of the
Employer to serve in the Armed Forces of the
United States . . . . . . . . . . . . . . . . . . . 34
ARTICLE VI
Limitations on Benefits . . . . . . . . 38
6.1 Maximum Retirement Income . . . . . . . . . . . . . 38
6.2 Adjustment to Defined Benefit Dollar Limitation
for Early or Deferred Retirement . . . . . . . . . 39
6.3 Adjustment of limitation for Years of Service or
participation . . . . . . . . . . . . . . . . . . . 40
6.4 Preservation of Accrued Retirement Income . . . . . 40
6.5 Limitation on benefits from multiple plans . . . . 41
6.6 Special rules for plans subject to overall
limitations under Code Section 415(e) . . . . . . . 42
6.7 Combination of Plans . . . . . . . . . . . . . . . 43
6.8 Incorporation of Code Section 415 . . . . . . . . . 43
ARTICLE VII
Provisional Payee . . . . . . . . . . 44
7.1 Adjustment of Retirement Income to provide for
payment to Provisional Payee . . . . . . . . . . . 44
7.2 Form and time of election and notice requirements . 44
7.3 Circumstances in which election and designation
are inoperative . . . . . . . . . . . . . . . . . . 45
7.4 Pre-retirement death benefit . . . . . . . . . . . 46
7.5 Post-retirement death benefit - qualified joint
and survivor annuity . . . . . . . . . . . . . . . 48
7.6 Election and designation by former Employee
entitled to Retirement Income in accordance with
Article VIII . . . . . . . . . . . . . . . . . . . 48
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7.7 Death benefit for Provisional Payee of former
Employee . . . . . . . . . . . . . . . . . . . . . 50
7.8 Limitations on Employee's and Provisional Payee's
benefits . . . . . . . . . . . . . . . . . . . . . 50
7.9 Effect of election under Article VII . . . . . . . 51
ARTICLE VIII
Termination of Service . . . . . . . . 52
8.1 Vested interest . . . . . . . . . . . . . . . . . . 52
8.2 Early distribution of vested benefit . . . . . . . 52
8.3 Years of Service of reemployed Employees . . . . . 53
8.4 Cash-out and buy-back . . . . . . . . . . . . . . . 54
8.5 Calculation of present value for cash-out of
benefits and for determining amount of benefits . . 55
8.6 Retirement Income under Prior Plan . . . . . . . . 57
8.7 Requirement for Direct Rollovers . . . . . . . . . 57
ARTICLE IX
Contributions . . . . . . . . . . . 59
9.1 Contributions generally . . . . . . . . . . . . . . 59
9.2 Return of Employer contributions . . . . . . . . . 59
9.3 Expenses . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE X
Administration of Plan . . . . . . . . 61
10.1 Retirement Board . . . . . . . . . . . . . . . . . 61
10.2 Organization and transaction of business of
Retirement Board . . . . . . . . . . . . . . . . . 61
10.3 Administrative responsibilities of Retirement
Board . . . . . . . . . . . . . . . . . . . . . . . 61
10.4 Retirement Board, the "Administrator" . . . . . . . 62
10.5 Fiduciary responsibilities . . . . . . . . . . . . 63
10.6 Employment of actuaries and others . . . . . . . . 63
10.7 Accounts and tables . . . . . . . . . . . . . . . . 63
10.8 Indemnity of members of Retirement Board . . . . . 64
10.9 Areas in which the Retirement Board does not have
responsibility . . . . . . . . . . . . . . . . . . 64
10.10 Claims Procedures . . . . . . . . . . . . . . . . 65
ARTICLE XI
Management of Trust . . . . . . . . . 66
11.1 Trust . . . . . . . . . . . . . . . . . . . . . . . 66
11.2 Disbursement of the Trust Fund . . . . . . . . . . 66
11.3 Rights in the Trust . . . . . . . . . . . . . . . . 66
11.4 Merger of the Plan . . . . . . . . . . . . . . . . 67
ARTICLE XII
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Termination of the Plan . . . . . . . . 68
12.1 Termination of the Plan . . . . . . . . . . . . . . 68
12.2 Limitation on benefits for certain highly paid
employees . . . . . . . . . . . . . . . . . . . . . 68
12.3 Allocation of Trust upon termination . . . . . . . 69
ARTICLE XIII
Amendment of the Plan . . . . . . . . . 71
13.1 Amendment of the Plan . . . . . . . . . . . . . . . 71
ARTICLE XIV
Special Provisions . . . . . . . . . 73
14.1 Adoption of Plan by other corporations . . . . . . 73
14.2 Exclusive benefit . . . . . . . . . . . . . . . . . 74
14.3 Assignment or alienation . . . . . . . . . . . . . 74
14.4 Voluntary undertaking . . . . . . . . . . . . . . . 75
14.5 Top-Heavy Plan requirements . . . . . . . . . . . . 75
14.6 Determination of Top-Heavy status . . . . . . 75
14.7 Minimum Retirement Income for Top-Heavy Plan
Years . . . . . . . . . . . . . . . . . . . . . . . 79
14.8 Vesting requirements for Top-Heavy Plan Years . . . 80
14.9 Adjustments to maximum benefits for Top-Heavy
Plans . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE XV
Post-retirement Medical Benefits . . . . . . 82
15.1 Definitions . . . . . . . . . . . . . . . . . . . . 82
15.2 Eligibility of Pensioned Employees and their
Dependents . . . . . . . . . . . . . . . . . . . . 83
15.3 Medical benefits . . . . . . . . . . . . . . . . . 83
15.4 Termination of coverage . . . . . . . . . . . . . . 84
15.5 Continuation of coverage to certain individuals . . 84
15.6 Contributions to fund medical benefits . . . . . . 85
15.7 Pensioned Employee contributions . . . . . . . . . 87
15.8 Amendment of Article XV . . . . . . . . . . . . . . 87
15.9 Termination of Article XV . . . . . . . . . . . . . 87
15.10 Reversion of assets upon termination . . . . . . . 88
ARTICLE XVI
Early Retirement Incentive Program . . . . . 89
16.1 Eligibility . . . . . . . . . . . . . . . . . . . . 89
16.2 Retirement Dates of Eligible Employees . . . . . . 89
16.3 Early retirement incentive program benefits . . . . 90
16.4 Restoration to service . . . . . . . . . . . . . . 90
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Introductory Statement
The Pension Plan for Employees of Georgia Power Company, as
amended and restated effective as of January 1, 1989 and
hereinafter set forth (the "Plan"), is a modification and
continuation of the Pension Plan for Employees of Georgia Power
Company which originally became effective July 1, 1944, and has
been amended from time to time.
Since the enactment of the Employee Retirement Income
Security Act of 1974 ("ERISA"), the Plan has been amended
numerous times to comply with changes in the law and to achieve
other administrative goals. Initially, the Plan was amended and
restated in 1976 to comply with ERISA. Thereafter, the Plan was
again amended and restated in 1986 to comply with the Tax Equity
and Fiscal Responsibility Act of 1982, the Retirement Equity Act
of 1984, and the Deficit Reduction Act of 1984. In more recent
years, the Plan has been amended and restated three times to
comply with the Tax Reform Act of 1986 -- first in 1989, second
in 1991 and again as amended and restated herein. The amendment
and restatement set forth herein consolidates those amendments
made in 1989 and 1991 and provides for such other appropriate
changes as are required by the law. Accordingly, this amendment
and restatement is effective as of January 1, 1989. Where
appropriate, amendments to the Plan which have a different
effective date are noted.
Retirement Income of former Employees (or Provisional Payees
of former Employees) who retired in accordance with the
provisions of the Prior Plan, as defined herein, is payable in
accordance with the provisions of the Prior Plan.
All contributions made by the Employer to this Plan are
expressly conditioned upon the continued qualification of the
Plan under Section 401(a) of the Code, including any amendments
to the Plan, and upon the deductibility of such contributions by
the Employer pursuant to Section 404 of the Code.
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ARTICLE I
Definitions
The following words and phraseology as used herein have the
following meanings unless a different meaning is plainly required
by the context:
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1.1 "Accrued Retirement Income" means with respect to any
Employee at any particular date, the Retirement Income,
determined pursuant to Section 5.1, commencing on his Normal
Retirement Date which would be payable to such Employee in the
form of a single life annuity on the basis of his Accredited
Service to the date as of which the computation of Retirement
Income is made.
1.2 "Accredited Service" means with respect to any Employee
included in the Plan, the period of service as provided in
Article IV. For purposes of calculating Accredited Service in
Article IV such Service shall include, in the case of a former
employee of the former Georgia Power and Light Company ("Power
and Light Company") who became an Employee of the Employer
effective upon acquisition of the assets and properties of Power
and Light Company, the number of years of his Creditable Service,
if any, accrued to July 1, 1957 to which he may be entitled under
the Power and Light Plan, but not to exceed the number of years
of Accredited Service to which he would have been entitled up to
July 1, 1957 determined in accordance with the provisions of the
Prior Plan had his service with Power and Light Company prior to
July 1, 1957 been service with the Employer.
1.3 "Actuarial Equivalent" means a benefit of equivalent
value when computed on the basis of five percent (5%) interest
per annum, compounded annually and the 1951 Group Annuity
Mortality Table for males. The ages for all Employees under the
above table shall be set back six (6) years and the ages for such
Employees' spouses shall be set back one year. All actuarial
adjustments and actuarial determinations required and made under
the terms of the Plan shall be calculated in accordance with such
assumptions.
1.4 "Affiliated Employer" means any corporation which is a
member of a controlled group of corporations (as defined in
Section 414(b) of the Code) which includes the Employer; any
trade or business (whether or not incorporated) which is under
common control (as defined in Section 414(c) of the Code) with
the Employer; any organization (whether or not incorporated)
which is a member of an affiliated service group (as defined in
Section 414(m) of the Code) which includes the Employer; and any
other entity required to be aggregated with the Employer pursuant
to regulations under Section 414(o) of the Code.
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1.5 "Average Monthly Earnings" means the greater of:
(a) an Employee's Monthly Earnings averaged over the three (3)
highest Plan Years of participation which shall produce the
highest monthly average within the last ten (10) Plan Years; or
(b) an Employee's Monthly Earnings averaged over the three (3)
highest Plan Years of participation which shall produce the
highest monthly average within the last ten (10) Plan Years
during which the Employee actively performed services for the
Employer. If an Employee has completed less than three (3) Plan
Years of participation upon his termination of employment, his
Average Monthly Earnings will be based on his Earnings during his
participation to his date of termination.
1.6 "Board of Directors" means the Board of Directors of
Georgia Power Company.
1.7 "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
1.8 "Current Accrued Retirement Income" means an Employee's
Accrued Retirement Income under the Plan, determined as if the
Employee had separated from service as of the close of the last
Limitation Year beginning before January 1, 1987, when expressed
as an annual benefit within the meaning of Section 415(b)(2) of
the Code. In determining the amount of an Employee's Current
Accrued Retirement Income, the following shall be disregarded:
(a) any change in the terms and conditions of the Plan
after May 5, 1986; and
(b) any cost of living adjustment occurring after May 5,
1986.
1.9 "Deferred Retirement Date" means the first day of the
month after a retirement subsequent to the Normal Retirement
Date.
Employment subsequent to Normal Retirement Date shall be
deemed to be a retirement if an Employee has less than forty (40)
Hours of Service during a calendar month.
1.10 "Defined Benefit Dollar Limitation" means the
limitation set forth in Section 415(b)(1)(A) or (d) of the Code.
1.11 "Defined Contribution Dollar Limitation" means the
limitation set forth in Section 415(c)(1)(A) of the Code.
1.12 "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
1.13 "Early Retirement Date" means the first day of the
month following the retirement of an Employee on or after his
3
fifty-fifth (55th) birthday and before his sixty-fifth (65th)
birthday.
1.14 (a) "Earnings" with respect to any Employee including
any Employee whose service is terminated by reason of disability
(as defined in Section 4.4) means (1) the highest annual rate of
salary or wages of an Employee of the Employer or employee of any
Affiliated Employer within any Plan Year before deductions for
taxes, Social Security, etc., (2) all amounts contributed by the
Employer or any Affiliated Employer to The Southern Company
Employee Savings Plan as Elective Employer Contributions, as said
term is described under Section 4.1 of such plan, pursuant to the
Employee's exercise of his deferral option made thereunder in
accordance with the requirements of Section 401(k) of the Code,
and (3) all amounts contributed by the Employer or any Affiliated
Employer to The Southern Electric System Flexible Benefits Plan
or The Southern Company Flexible Benefits Plan on behalf of an
Employee pursuant to his salary reduction election, and applied
to provide one or more of the optional benefits available under
such plan, but (4) shall exclude all amounts deferred under any
non-qualified deferred compensation plan maintained by the
Employer or any Affiliated Employer.
(b) Notwithstanding the above, "Earnings" with respect to
any commissioned salesperson means the salary or wages of an
Employee of the Employer or employee of any Affiliated Employer
within any Plan Year, without including overtime, and before
deductions for taxes, Social Security, etc. but applying those
adjustments identified in paragraphs (a)(2), (3) and (4) above.
(c) With respect to an Employee whose service terminates
because of a disability under Section 4.4, Earnings shall be
deemed to continue in effect throughout the period of the
Employee's Disability Leave, as also defined in Section 4.4.
(d) Notwithstanding the above, "Earnings" with respect to
an Employee who is a member of Local Union 84 of I.B.E.W., who is
eligible to be included in the Plan, and who is granted a leave
of absence by the Employer to carry on union business, shall be
determined pursuant to Section 4.2 of the Plan.
(e) With respect to calculating the Prior Plan Retirement
Income of an Employee who is a "participant in the Plan" as
provided in Section 5.12, Earnings shall be determined for the
recognized period of his absence to serve in the Armed Forces of
the United States at the rate which is paid to him on the day he
returns to the service of the Employer as provided in
paragraph (a) of Section 5.12 or at the rate which was payable to
him at the time he left the employment of the Employer to enter
the Armed Forces of the United States, if such amount was
greater.
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(f) For Plan Years beginning after December 31, 1988 and
prior to January 1, 1994, the annual compensation of each
Employee taken into account for purposes of this Plan shall not
exceed $200,000 (as adjusted by the Secretary of Treasury). The
imposition of this limitation shall not reduce an Employee's
Retirement Income below the amount as determined on December 31,
1988. In addition to other applicable limitations set forth in
the Plan, and notwithstanding any other provision of the Plan to
the contrary, for Plan Years beginning on or after January 1,
1994, the annual compensation of each Employee taken into account
under the Plan shall not exceed $150,000, as adjusted for
increases in the cost of living in accordance with Code
Section 401(a)(17). The cost of living adjustment in effect for
a calendar year applies to any period, not exceeding twelve (12)
months, over which compensation is determined (the "determination
period") beginning in such calendar year. If the determination
period is less than twelve (12) months, the limit shall be
prorated.
If compensation for any prior determination period is taken
into account in determining an Employee's benefits accruing in
the current Plan Year beginning on or after January 1, 1989 or
January 1, 1994, as applicable, the compensation for that prior
determination period is subject to the $200,000 or the $150,000
compensation limit in effect for that prior determination period.
Notwithstanding any other provision in the Plan, each
Employee's Accrued Retirement Income under this Plan will be the
greater of:
(a) the Employee's Accrued Retirement Income as of the last
day of the last Plan Year beginning before January 1,
1994, frozen in accordance with Treasury Regulation
Section 1.401(a)(4)-13, or
(b) the Employee's Accrued Retirement Income determined
with respect to the benefit formula applicable for the
Plan Year beginning on or after January 1, 1994, as
applied to the employee's total Years of Service taken
into account under the Plan for purposes of benefit
accruals.
For purposes of this Section 1.14, the rules of Section
414(q)(6) of the Code shall apply in determining the adjusted
$200,000 or $150,000 limitation, as applicable, except in
applying such rules, the term "family" shall include only the
spouse of the Employee and any lineal descendants of the Employee
who have not attained age nineteen (19) before the close of the
Plan Year. If, as a result of the application of such rules, the
adjusted $200,000 or $150,000 limitation is exceeded, then the
limitation shall be prorated among the affected individuals in
5
proportion to each individual's Earnings determined under this
Section 1.14 prior to the application of this limitation.
1.15 "Effective Date" means the original effective date of
the Plan, July 1, 1944. The effective date of this amendment and
restatement means January 1, 1989.
1.16 "Eligibility Year of Service" is a Year of Service
commencing on the Employee's date of employment or reemployment
or anniversary date thereof.
1.17 "Employee" means any person who is currently employed
by the Employer as (a) a regular full-time employee, (b) a
regular part-time employee, (c) a cooperative education employee,
or (d) a Temporary Full-Time or Temporary Part-Time employee, as
such terms are defined in the Corporate Guidelines of the
Employer. The term also includes "leased employees" within the
meaning of Section 414(n)(2) of the Code, unless the total number
of leased employees constitutes less than twenty percent (20%) of
the Employer's non-highly compensated workforce within the
meaning of Section 414(n)(5)(C)(ii) and such leased employees are
covered by a plan described in Section 414(n)(5)(B) of the Code.
1.18 "Employer" means Georgia Power Company, any successor
or successors thereof and any wholly owned subsidiary thereof
which the Board of Directors may from time to time, and upon such
terms and conditions as may be fixed by the Board of Directors,
determine to bring under the Plan, and any other corporation
which shall adopt this Plan and Trust Agreement pursuant to
Section 14.1 by appropriate resolution authorized by the board of
directors of said adopting corporation.
1.19 "Full Current Costs" means the normal cost, as defined
in Treasury Regulation Section 1.404(a)-6, for all years since
the Effective Date of the Plan, plus interest on any unfunded
liability during such period.
1.20 "Hour of Service" means an Employee shall be credited
with one Hour of Service for each hour for which (a) he is paid,
or entitled to payment, for the performance of duties for the
Employer or an Affiliated Employer, and such hours shall be
credited to the Employee for the computation period or periods in
which the duties are performed; (b) he is paid, or entitled to
payment, by the Employer or an Affiliated Employer on account of
a period of time during which no duties are performed
(irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty, or
leave of absence in which case the Employee shall be credited
with Hours of Service for the computation period or periods in
which the period during which no duties were performed occurs;
(c) back pay, irrespective of mitigation of damages, has been
6
either awarded or agreed to by the Employer or an Affiliated
Employer, in which case the Employee shall be credited with Hours
of Service for the computation period or periods to which the
award or agreement pertains, rather than the computation period
in which the award, agreement, or payment is made; and (d) solely
for the purpose of calculating Vesting Years of Service, he was
on any form of authorized leave of absence. The same Hours of
Service shall not be credited under clauses (a), (b), (c), and
(d).
An Employee who is entitled to be credited with Hours of
Service in accordance with clause (b) or (d) of this Section
shall be credited with such number of Hours of Service for the
period of time during which no duties were performed as though he
were in the active employment of the Employer during such period
of time. However, an Employee shall not be credited with Hours
of Service in accordance with clause (b) of this Section for
unused vacation for which payment is received at termination of
employment, or if the payment which is made to him or to which he
is entitled in accordance with clause (b) is made or due under a
plan maintained solely for the purpose of complying with
applicable Worker's Compensation, or unemployment compensation or
disability insurance laws, or if such payment is one which solely
reimburses an Employee for medical or medically related expenses
incurred by the Employee.
Provided there is no duplication of Hours of Service
credited in accordance with the foregoing provisions, if an
Employee is "a participant in the Plan" within the meaning of
that term as defined in paragraph (a) of Section 5.12, he shall
be credited with such number of Hours of Service with respect to
all or such portion of the period of his absence to serve in the
Armed Forces of the United States as may be recognized under
paragraph (b) of Section 5.12 as though he were in the active
employment of the Employer during the recognized period of his
absence to serve in the Armed Forces.
Provided there is no duplication of Hours of Service
credited in accordance with the foregoing provisions, an Employee
shall be credited with Hours of Service as though he were in the
active employment of the Employer during an authorized leave of
absence to carry on union business as provided in Section 4.2, if
such Employee elects to receive credit for Accredited Service in
accordance with Section 4.2.
The rules set forth in paragraphs (b) and (c) of Department
of Labor Regulations 2530.200b-2 are incorporated in the Plan by
this reference and made a part hereof.
1.21 "Limitation Year" means the Plan Year.
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1.22 "Monthly Earnings" means one-twelfth (1/12) of the
Earnings of an Employee of the Employer during a Plan Year.
1.23 "Normal Retirement Date" means the first day of the
month following an Employee's sixty-fifth (65th) birthday, except
that the Normal Retirement Date of any Employee hired on or after
his sixtieth (60th) birthday shall be the fifth (5th) anniversary
of his initial participation in the Plan.
1.24 "One-Year Break in Service" means a twelve (12)
consecutive month period commencing on or after January 1, 1976
which would constitute a Year of Service but for the fact that
the Employee has not completed more than 500 Hours of Service
during such period.
Solely for the purpose of determining whether a One-Year
Break in Service has occurred for eligibility or vesting
purposes, an Employee who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of Service
which would otherwise have been credited to such Employee but for
such absence, or in any case in which such hours cannot be
determined, eight (8) Hours of Service per day of such absence.
In no event shall Hours of Service credited under this paragraph
be in excess of the amount necessary to prevent a One-Year Break
in Service from occurring. For purposes of this paragraph, an
absence from work for maternity or paternity reasons means an
absence (a) by reason of the pregnancy of the Employee, (b) by
reason of a birth of a child of the Employee, (c) by reason of
the placement of a child with the Employee in connection with the
adoption of such child by such Employee, or (d) for purposes of
caring for such child for a period beginning immediately
following such birth or placement. The Hours of Service shall be
credited under this paragraph: (a) in the vesting or eligibility
period in which the absence begins if the Hours of Service
credited are necessary to prevent a One-Year Break in Service in
such period, and (b) in all other cases, in the vesting or
eligibility period following the period in which the absence
begins.
1.25 "Past Service" means with respect to any Employee
included in the Plan, the period of his Accredited Service prior
to January 1, 1989 as determined under the Prior Plan.
1.26 "Plan" means the Pension Plan for Employees of Georgia
Power Company, as set forth herein and as hereinafter amended,
effective January 1, 1989.
1.27 "Plan Year" means the twelve (12) month period
commencing on the first day of January and ending on the last day
of December next following.
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1.28 "Plan Year of Service" is a Year of Service determined
as if the date of employment or reemployment is the first day of
the Plan Year.
1.29 "Prior Plan" means the Plan in effect prior to January
1, 1989.
1.30 "Provisional Payee" means a spouse designated or
deemed to have been designated by an Employee or former Employee
pursuant to Article VII to receive Retirement Income on the death
of the Employee or former Employee.
1.31 "Qualified Election" means an election by an Employee
or former Employee that concerns the form of distribution of
Retirement Income that must be in writing and must be consented
to by the Employee's Spouse. The Spouse's consent to such an
election must acknowledge the effect of such election, must be in
writing, and must be witnessed by a notary public.
Notwithstanding this consent requirement, if the Employee
establishes to the satisfaction of the Retirement Board that such
written consent may not be obtained because the Spouse cannot be
located or because of such other circumstances as the Secretary
of the Treasury may by regulations prescribe, an election by the
Employee will be deemed a Qualified Election. Any consent
necessary under this provision shall be valid and effective only
with respect to the Spouse who signs the consent, or in the event
of a deemed Qualified Election, with respect to such Spouse.
A revocation of a prior Qualified Election to waive the
payment of Retirement Income to the Employee's Spouse may be made
by the Employee without consent at any time commencing within 90
days before such Employee's 55th birthday but not later than
before the commencement of Retirement Income. A Qualified
Election or the revocation of a Qualified Election shall be on a
form furnished by the Retirement Board and filed within the time
prescribed for making such election.
1.32 "Retirement Board" means the managing board of the
Plan provided for in Article X.
1.33 "Retirement Date" means the Employee's Normal, Early,
or Deferred Retirement Date, whichever is applicable to him.
1.34 "Retirement Income" means the monthly Retirement Income
provided for by the Plan.
1.35 "Social Security Offset" shall mean an amount equal to
one-half (1/2) of the amount, if any, of the Federal primary
Social Security benefit (primary old age insurance benefit) to
which it is estimated that an Employee will become entitled in
accordance with the Social Security Act in force as provided in
subparagraphs (a) through (e) below which shall exceed $168 per
9
month on and after January 1, 1989, and $250 per month, on and
after January 1, 1991, multiplied by a fraction not greater than
one, the numerator of which shall be the Employee's total
Accredited Service, and the denominator of which shall be the
aggregate Accredited Service the Employee could have accumulated
if he had continued his employment until his Normal Retirement
Date. For purposes of determining the estimated Federal primary
Social Security benefit used in the Social Security Offset, an
Employee shall be deemed to be entitled to receive Federal
primary Social Security benefits after retirement or death, if
earlier, regardless of the fact that he may have disqualified
himself to receive payment thereof. In addition to the
foregoing, the calculation of the Social Security benefit shall
be based on the salary history of the Employee as provided in
Section 5.4(b) and shall be determined pursuant to the following,
as applicable:
(a) With regard to an Employee described in Section 5.2,
the Social Security benefit shall be computed at retirement. In
estimating the amount of the Federal primary Social Security
benefit to which the Employee would be entitled, it shall be
assumed that he will receive no wages for Social Security
purposes after his retirement on his Normal Retirement Date or
Deferred Retirement Date, and it will be further assumed in
calculating his estimated Federal primary Social Security benefit
that the amount thereof will be the amount determined under the
recomputation provision, if applicable, of the Social Security
Act in effect at the time of his retirement.
(b) With regard to an Employee described in Section 5.3(a),
the Social Security benefit to which it is estimated that he will
be entitled at sixty-five (65), shall be computed at the time of
his retirement. In estimating the amount of the Federal primary
Social Security benefit to which the Employee would be entitled
at age sixty-five (65), it shall be assumed that he will receive
no wages for Social Security purposes after his Early Retirement
Date, and it will be further assumed in calculating his estimated
Federal primary Social Security benefit that the amount thereof
will be the amount determined under the recomputation provision,
if applicable, of the Social Security Act in effect at his Early
Retirement Date.
(c) With regard to an Employee described in Section 5.3(b),
the Social Security benefit to which it is estimated that he
would have been entitled to receive at age sixty-five (65) or his
date of death, if later, had he not died, shall be computed at
the time of his death. In estimating the amount of Federal
primary Social Security benefit to which the Employee would have
been entitled at age sixty-five (65) or his date of death, if
later, it shall be assumed that he would not have received any
wages for Social Security purposes after the date of his death,
and it will be further assumed in calculating his Federal primary
10
Social Security benefit that the amount thereof will be the
amount determined under the recomputation provision, if
applicable, of the Social Security Act in effect at the time of
his death.
(d) With regard to an Employee described in Section 5.3(c),
the Social Security benefit to which it is estimated that he will
become entitled at age sixty-five (65) or his date of
termination, if later, shall be computed at the date of
termination. In estimating the amount of the Federal primary
Social Security benefit to which the Employee would be entitled
at age sixty-five (65) or his date of termination, if later, it
shall be assumed that he will receive no wages for Social
Security purposes after his date of termination, and it will be
further assumed in calculating his estimated Federal primary
Social Security benefit that the amount thereof will be the
amount determined under the recomputation provision, if
applicable, of the Social Security Act in effect at his date of
termination.
(e) With regard to an Employee described in Section 5.3(d),
the Social Security benefit to which it is estimated that he
would have been entitled to receive at age sixty-five (65) or his
initial date of disability, if later, had he not become disabled,
shall be computed at the time of his retirement. In estimating
the amount of Federal primary Social Security benefit to which
the Employee would have been entitled at age sixty-five (65) or
his date of disability, if later, it shall be assumed that he
would have received wages for Social Security purposes as
specified in Section 5.4, and it will be further assumed in
calculating his estimated Federal primary Social Security benefit
that the amount thereof will be the amount determined under the
recomputation provision, if applicable, of the Social Security
Act in effect at the time of his retirement.
1.36 "Social Security Retirement Age" means age sixty-five
(65) if the Employee attains age sixty-two (62) before January 1,
2000 (i.e., born before January 1, 1938), age sixty-six (66) if
the Employee attains age sixty-two (62) after December 31, 1999,
but before January 1, 2017 (i.e., born after December 31, 1937,
but before January 1, 1955), and age sixty-seven (67) if the
Employee attains age sixty-two (62) after December 31, 2016
(i.e., born after December 31, 1954).
1.37 "Trust" or "Trust Fund" means all such money or other
property which shall be held by the Trustee pursuant to the terms
of the Trust Agreement or pursuant to contracts with life
insurance companies.
1.38 "Trust Agreement" means the trust agreement or
agreements between the Employer and the Trustee established for
the purpose of funding the Retirement Income to be paid.
11
1.39 "Trustee" means the trustee or trustees acting as such
under the Trust Agreement, including any successor or successors.
1.40 "Vesting Year of Service" means an Employee's Years of
Service including: (a) Years of Service with an Affiliated
Employer and Years of Service with companies or properties
heretofore affiliated or associated with the Employer prior to
the date of severance of such affiliation or association and
service with Georgia Power and Light Company; (b) subject to the
eligibility requirements of Section 2.3, active service with the
Armed Forces of the United States if the Employee entered or
enters active service or training in such Armed Forces directly
from the employ of the Employer and after discharge or release
therefrom returns within ninety (90) days to the employ of the
Employer or is deemed to return under Section 2.3 because of the
death of such Employee while in active service with such Armed
Forces; and (c) any period during which the Employee was on any
other form of authorized leave of absence. For purposes of this
Section 1.40 in determining Vesting Years of Service with respect
to a period of absence referred to in clause (b) or (c) of this
Section 1.40, an Employee shall be credited with Hours of Service
as though the period of absence were a period of active
employment with the Employer.
1.41 "Year of Service" means with respect to an Employee in
the service of the Employer on or after January 1, 1976:
(a) if the Employee was hired prior to January 1, 1976,
each twelve (12) consecutive month period, computed from the
Employee's most recent date of hire by the Employer, during his
last period of continuous service as a full-time regular Employee
(except that service prior to July 1, 1944 need not have been
continuous) with the Employer immediately prior to January 1,
1976 (including service with Commonwealth and predecessor
companies and service with Affiliated Employers and service with
companies or properties heretofore affiliated or associated prior
to the date of severance of such affiliation or association) and
any subsequent twelve (12) consecutive month period commencing on
an anniversary date of such date of hire (or date of reemployment
as provided in Section 2.4), provided that in each such twelve
(12) consecutive month period commencing on or after January 1,
1975 he has completed at least 1000 Hours of Service; or
(b) if the Employee is hired on or after January 1, 1976, a
twelve (12) consecutive month period after December 31, 1975,
commencing on the Employee's most recent date of hire by the
Employer (or date of reemployment as provided in Section 2.4),
and any subsequent twelve (12) consecutive month period
commencing on an anniversary date of such date of hire, provided
he has completed at least 1000 Hours of Service during each such
twelve (12) consecutive month period; and
12
(c) to the extent not resulting in duplication, each Year
of Service restored to the Employee upon reemployment as provided
in Section 8.3.
An Employee's vested interest in his Accrued Retirement
Income shall be based on his Vesting Years of Service and an
Employee's eligibility to participate in the Plan pursuant to
Article II shall be based on his Eligibility Year of Service.
Breaks in service will be measured on the same computation period
as the Year of Service. Effective on and after January 1, 1995,
an Employee's accrual of Retirement Income shall be based solely
on an Employee's Plan Year of Service, without regard to an
Employee's completion of a Vesting Year of Service ending within
such Plan Year.
In the Plan and Trust Agreement, where the context requires,
words in the masculine gender include the feminine and neuter
genders and words in the singular include the plural and words in
the plural include the singular.
13
ARTICLE II
Eligibility
2
2.1 Employees. Each Employee participating in the Plan as
of January 1, 1989 shall continue to be included in the Plan.
Each other Employee, except as provided in this Article, shall be
included in the Plan on the first day of the month next following
the date on which he first completes an Eligibility Year of
Service.
2.2 Employees represented by a collective bargaining agent.
The Employer recognizes Local 84, I.B.E.W., as the exclusive
representative of all employees covered by the Memorandum of
Agreement between Local Union No. 84 of the International
Brotherhood of Electrical Workers and the Employer, and it is
further agreed that these employees are eligible to participate
in accordance with the provisions of the Plan. Any other
Employee who is represented by a collective bargaining agent may
participate in the Plan, subject to its terms, if the
representative(s) of his bargaining unit and the Employer
mutually agree to participation in the Plan by the members of his
bargaining unit.
2.3 Persons in military service and Employees on authorized
leave of absence. Any person not already included in the Plan
who leaves or has left the employ of the Employer to enter the
Armed Forces of the United States or is on authorized leave of
absence without regular pay and who returns to the employ of the
Employer within ninety (90) days after discharge from such
military service or on or before termination of his leave of
absence, shall, upon such return, be included in the Plan
effective as of the first day of the month next following the
date on which he first met or meets the eligibility requirement
of Section 2.1. In determining whether an Employee entering the
service of the Employer has completed an Eligibility Year of
Service, his Hours of Service prior to such authorized leave of
absence without regular pay or entry into the Armed Forces shall
be taken into account, and for purposes of Section 2.4, he shall
be deemed not to have incurred a One-Year Break in Service by
reason of such absence.
If an Employee dies while in active service with the Armed
Forces of the United States, such Employee shall be deemed to
have returned to the employ of the Employer on his date of death.
An Employee not already included in the Plan who is on
authorized leave of absence and receiving his regular pay shall
be considered credited with Hours of Service as though the period
of absence was a period of active employment with the Employer,
and he shall be included in the Plan if and when he meets the
14
requirements of this Article II regardless of whether he is, on
the date of such inclusion, on such leave of absence.
2.4 Employees reemployed. An Employee whose service
terminates at any time and who is reemployed as an Employee,
unless excluded under Section 2.6, will be included in the Plan
as provided in Section 2.1 unless:
(a) prior to termination of his service he had completed at
least one Year of Service; and
(b) upon his reemployment, to the extent provided in
Section 8.3 without regard to Section 8.4, he is entitled to
restoration of his Years of Service, in which case he will be
included in the Plan as of the date of his reemployment.
For purposes of determining Years of Service of an Employee
who is reemployed by the Employer subsequent to a One-Year Break
in Service, a Year of Service subsequent to his reemployment
shall be computed on the basis of the twelve (12) consecutive
month period commencing on his date of reemployment or an
anniversary thereof.
2.5 Participation upon return to eligible class. If an
Employee is a participant in the Plan before July 1, 1991, the
exclusion from participation provided in Section 2.6, as it
regards temporary employees, shall not apply with respect to such
Employee, and such Employee shall be eligible to participate in
the Plan after July 1, 1991 whether or not he is classified as a
temporary employee.
If an Employee first becomes a participant on or after July
1, 1991, in the event such Employee ceases to be a member of an
eligible class of Employees and becomes ineligible to
participate, but has not incurred a One-Year Break in Service,
such Employee will participate immediately upon returning to an
eligible class of Employees. If such Employee incurred a One-
Year Break in Service, eligibility will be determined under
Section 2.4 of the Plan.
In all other instances, if an Employee is not a member of an
eligible class of Employees but then becomes a member of an
eligible class, such Employee will commence participation in the
Plan as of the first day of the month next following the later of
(a) the date such Employee completes an Eligibility Year of
Service or (b) the date he becomes a member of an eligible class
of Employees.
2.6 Exclusion of certain categories of employees.
Notwithstanding any other provision of this Article II, leased
employees shall not be eligible to participate in the Plan. In
addition, a Temporary Full-Time or Temporary Part-Time employee,
15
as such terms are defined in the Corporate Guidelines of the
Employer, who was not participating in the Plan as an Employee
prior to July 1, 1990, shall not be considered to be an Employee
for purposes of this Plan and shall not be entitled to any
benefits hereunder. Lastly, any person who is employed by
Electric City Merchandise Company, Inc. on or after May 1, 1988,
or who is employed by Savannah Electric and Power Company on or
after March 3, 1988, shall not be entitled to accrue Retirement
Income under the Plan while employed at such companies.
2.7 Waiver of participation. Effective January 1, 1991,
notwithstanding the above, an Employee may, subject to the
approval of the Employer, elect voluntarily not to participate in
the Plan. The election not to participate must be communicated
in writing to the Retirement Board effective on an Employee's
date of hire or an anniversary thereof. Effective January 1,
1995, the election not to participate must be communicated in
writing to and acknowledged by the Retirement Board and shall be
effective as of the date set forth in such written waiver.
16
ARTICLE III
Retirement
3
3.1 Retirement at Normal Retirement Date. Each Employee
eligible to participate in the Plan shall have a nonforfeitable
right to his Accrued Retirement Income by no later than his
sixty-fifth (65th) birthday, or in the case of any Employee hired
on or after his sixtieth (60th) birthday, the fifth (5th)
anniversary of his initial participation in the Plan.
Notwithstanding the above, an Employee's Normal Retirement Date
shall be as provided in Section 1.23.
3.2 Retirement at Early Retirement Date. An Employee
having at least ten (10) Years of Accredited Service (including
any Accredited Service to which he is entitled under the pension
plan of any Affiliated Employer from which such Employee was
transferred pursuant to Section 4.6 or 4.7, or which was credited
to him in accordance with Section 4.3) may elect to retire on an
Early Retirement Date on or after his fifty-fifth (55th) birthday
and before his sixty-fifth (65th) birthday and to have his
Retirement Income commence on that date, or effective January 1,
1995, the first day of any month up to and including the
Employee's Normal Retirement Date. For the purposes of this
Section 3.2, Accredited Service shall include Creditable Service
under the Employees' Retirement Plan of Georgia Power and Light
Company [Georgia Power Company, as successor] ("Power and Light
Plan") not to exceed a period equal to the Accredited Service to
which the Employee would have been entitled up to July 1, 1957
had his service with Georgia Power and Light Company prior to
July 1, 1957 been service with the Employer.
3.3 Retirement at Deferred Retirement Date. An Employee
included in the Plan may remain in active service after his
Normal Retirement Date. The involuntary retirement of an
Employee on or after his Normal Retirement Date shall not be
permitted solely on the basis of the Employee's age, except in
accordance with the provisions of the Age Discrimination in
Employment Act, as amended from time to time. Termination of
service of such an Employee for any reason after Normal
Retirement Date shall be deemed retirement as provided in the
Plan.
17
ARTICLE IV
Determination of Accredited Service
4
4.1 Accredited Service pursuant to Prior Plan. Each
Employee who participated in the Prior Plan shall be credited
with such Accredited Service, if any, earned under such Prior
Plan as of December 31, 1988.
4.2 Accredited Service.
(a) Each Employee meeting the requirements of Article II
shall, in addition to any Accredited Service to which he may be
entitled in accordance with Section 4.1, be credited with
Accredited Service as set forth in (b) below. Any such Employee
who is on authorized leave of absence with regular pay shall be
credited with Accredited Service during the period of such
absence. Any such Employee who is a "participant in the Plan"
within the meaning of that term as defined in paragraph (a) of
Section 5.12 shall be credited with Accredited Service during all
or such portion of the period of his absence to serve in the
Armed Forces of the United States as may be recognized under
paragraph (b) of Section 5.12. Employees on authorized leave of
absence without regular pay, other than Employees deemed to
accrue Hours of Service under Section 4.4, and persons in the
Armed Forces who are not "participants in the Plan" within the
meaning of that term as defined in paragraph (a) of Section 5.12
shall not be credited with Accredited Service for the period of
such absence.
An Employee who is a member of Local Union 84 of I.B.E.W.
who is eligible to be included in the Plan will be credited with
Accredited Service for the period (or portion of the period)
after January 1, 1984, of a leave of absence granted by the
Employer to permit him to carry on union business at the
international office of I.B.E.W., but only if such Employee
elects in writing on or before the beginning of a Plan Year to
receive such credit for Accredited Service for such Plan Year.
For the purposes of determining the Earnings of such Employee
during the period (or portion of the period) after January 1,
1978 of such leave of absence, he shall be deemed to have
received Earnings at the rate of Earnings being paid to him at
the time of his leave of absence for union business commenced,
adjusted from time to time during the period of such leave of
absence for any general wage increase or decrease during such
period applicable to Employees in the category of employment in
which the Employee was employed at the time his leave of absence
commenced.
(b) For each Plan Year commencing after December 31, 1988,
an Employee included in the Plan who is credited with a Vesting
Year of Service for the twelve (12) consecutive month period
18
ending on the anniversary date of his hire which occurs during
such Plan Year shall be credited with Accredited Service as
follows:
(1) if an Employee completes at least 1,680 Hours of
Service in a Plan Year, he shall be credited with one year
of Accredited Service;
(2) if an Employee completes less than 1,680 Hours of
Service in a Plan Year, but not less than 1,000 Hours of
Service, he shall be credited with one-twelfth (1/12) of a
year of Accredited Service for each 140 Hours of Service; or
(3) if an Employee's initial eligibility in the Plan
shall occur after the beginning of the Plan Year, and the
Employee shall therefore have completed less than 1,000
Hours of Service in such Plan Year, he shall be credited
with one-twelfth (1/12) of a year of Accredited Service for
each 140 Hours of Service during such Plan Year after his
inclusion in the Plan.
Notwithstanding the above, effective January 1, 1995, an
Employee's Accredited Service shall be calculated based on an
Employee's accrual of a Plan Year of Service only and without
regard to the requirement of a Vesting Year of Service.
(c) If an Employee (1) who has previously satisfied the
eligibility requirements under Article II shall again be included
in the Plan at such time which is after the beginning of the Plan
Year, or (2) shall terminate his employment for any reason before
the close of such Plan Year and shall therefore have completed
less than 1,000 Hours of Service in such Plan Year, he shall be
credited with one-twelfth (1/12) of a year of Accredited Service
for each 140 Hours of Service during such Plan Year after his
inclusion in the Plan or before his termination of employment in
such Plan Year, as the case may be.
(d) In addition to any Accredited Service credited under
Section 4.1, an Employee shall be entitled to Accredited Service
determined under the Prior Plan, without regard to the age
requirement for eligibility to participate in the Prior Plan, in
excess of the Accredited Service determined under the Prior Plan
(including the age requirement for eligibility to participate in
the Prior Plan). Such Accredited Service shall be considered
Accredited Service after December 31, 1985 for purposes of
calculating an Employee's Retirement Income under Article V.
(e) In addition to the foregoing, Accredited Service may
include Accredited Service accrued subsequent to a One-year Break
in Service including such Accredited Service which may be
restored in accordance with the provisions of Section 8.3.
19
(f) Notwithstanding the above, the maximum number of years
of Accredited Service with respect to any Employee participating
in the Plan shall not exceed forty (40). Effective January 1,
1991, the maximum number of years of Accredited Service is
increased to forty-three (43).
4.3 Accredited Service and Years of Service in respect of
service of certain Employees previously employed by the Employer
or by Affiliated Employers. An Employee in the service of the
Employer on January 1, 1976 or employed by it thereafter who
meets the requirements of paragraph (a) of this Section 4.3, in
addition to any other Years of Service or Accredited Service to
which he may be entitled under the Plan, upon completion of an
Eligibility Year of Service where required under Section 8.3(c)
(which shall also be considered to be Accredited Service) shall
be credited with such number of Years of Service (and fractions
thereof to the nearest whole month for service prior to January
1, 1976) and such Accredited Service and Retirement Income as
shall be determined in accordance with the provisions of
paragraphs (b) and (c) of this Section 4.3.
(a) (1) Such Employee shall have been employed prior to
January 1, 1976 by the Employer or by one or more Affiliated
Employers; (2) he shall have terminated his service with Employer
or such Affiliated Employer other than by retirement and he shall
not be entitled to receive at any time any retirement income
under the pension plan of any such prior employer in respect of
any period of time for which he shall receive credit for Years of
Service or Accredited Service under this Section 4.3; and (3) for
Employees reemployed on or after January 1, 1985, the number of
consecutive One-Year Breaks in Service incurred by the Employee
prior to the date of his employment by the Employer does not
equal or exceed the greater of (A) five (5), or (B) the aggregate
number of his Years of Service (and fractions thereof to the
nearest whole month for service prior to January 1, 1976) with
the Employer and such Affiliated Employer. The years of
Accredited Service credited to an Employee reemployed prior to
January 1, 1985, with regard to years of Accredited Service
immediately prior to the termination of his service, shall be
determined under the terms of the Plan in effect prior to January
1, 1985.
(b) The number of Years of Service (and fractions thereof
to the nearest whole month for service prior to January 1, 1976)
and the Accredited Service, respectively, which shall be credited
to such Employee shall be equal to the respective number of his
Years of Service (and fractions thereof to the nearest whole
month for service prior to January 1, 1976) and Accredited
Service which were forfeited by the Employee and not restored
under the pension plans of the Employer or an Affiliated
Employer.
20
(c) There shall be credited to the Employee Retirement
Income equal to retirement income which was accrued by him under
the pension plan of the Employer or an Affiliated Employer during
the period of his Accredited Service which was forfeited and
which is credited under the Plan in accordance with Section 4.3.
The amount of Retirement Income credited in accordance with this
paragraph (c) shall be treated as Prior Plan Retirement Income
for purposes of determining the amount of Retirement Income to
which the Employee is entitled, and shall be determined in
accordance with the provisions of the pension plan of the
Affiliated Employer in effect at the time the Employee's service
with such Affiliated Employer terminated without regard to any
minimum provisions of such pension plan; for this purpose and if
relevant in respect of the Employee it shall be assumed that the
pension plan of the Affiliated Employer in effect at the time the
Employee's service with such Affiliated Employer terminated
contained the provisions of Section 5.12 of the Plan and related
amendments concerning absence from the service of the Employer to
serve in the Armed Forces of the United States which became
effective November 1, 1977. For Plan Years beginning after
December 31, 1987, an Employee who meets the requirements of
paragraph (a) of this Section 4.3 shall be deemed to have
transferred to or from an Affiliated Employer for purposes of the
transfer of assets or liabilities to or from the Plan in
accordance with Section 4.6.
4.4 Accrual of Retirement Income during period of total
disability.
(a) If an Employee included in the Plan shall become
totally disabled, as determined by the Retirement Board on the
basis of medical evidence, after he has completed at least five
(5) Vesting Years of Service and, by reason of such disability,
he shall apply for and be granted either Social Security
disability benefits or long-term disability benefits under a
long-term disability benefit plan of the Employer, he shall be
considered to be on a leave of absence, herein referred to as a
"Disability Leave." An Employee's Disability Leave shall be
deemed to begin on the initial date of the disability, as
determined by the Retirement Board, and shall continue until the
earlier of: (1) the end of the month in which he shall cease to
be entitled to receive Social Security Disability benefits and
long-term disability benefits under a long-term disability
benefit plan of the Employer; (2) his death; and (3) his
Retirement Date if he elects to have his Retirement Income
commence on such date. During the period of the Employee's
Disability Leave, he shall, for purposes of the Plan, be deemed
to have received Earnings at the regular rate in effect for him.
21
(b) A disabled Employee who applies for and would be
granted long-term disability benefits under a long-term
disability benefit plan of the Employer, if it were not for the
fact that the deductions therefrom attributable to other
disability benefits equal or exceed the amount of his unreduced
benefit under a long-term disability benefit plan of the
Employer, will be considered as being currently granted benefits
under such long-term disability benefit plan.
(c) An Employee's Disability Leave shall be deemed to be a
period for which Hours of Service shall be credited to the
Employee as though the period of his Disability Leave were a
period of active employment.
(d) If an Employee's Disability Leave shall terminate prior
to his Normal Retirement Date and he shall fail to return to the
employment of the Employer within sixty (60) days after the
termination of such leave, his service shall be deemed to have
terminated upon the termination of his Disability Leave and his
rights shall be determined in accordance with Article VIII,
unless at such time he shall be entitled to retire on an Early
Retirement Date, in which event his termination of service shall
be deemed to constitute his retirement under Section 3.2.
(e) Notwithstanding the above, the years of Accredited
Service for any Employee whose initial date of disability
occurred under the Prior Plan shall be determined under the terms
of the Prior Plan.
4.5 Employees leaving Employer's service. If the service
of an Employee is terminated prior to retirement as provided by
Article III, such Employee will forfeit any Vesting Years of
Service and Accredited Service which he may have been subject to
possible restoration of some or all of his Vesting Years of
Service and Accredited Service in accordance with Article VIII.
The provisions of this Section 4.5 shall not affect the rights,
if any, of an Employee under Article VIII nor shall the rights of
an Employee be affected during or by reason of a layoff, due to
lack of work, which continues for a period of one year or less,
except that such period of layoff shall not be deemed to be
service with the Employer. If the service of an Employee is
terminated, or if he is not reemployed before the expiration of
one year after being laid off for lack of work, and he is
subsequently reemployed, he will be treated as provided in
Section 2.4.
Forfeitures arising by reason of an Employee's termination
of service for any reason shall not be applied to increase the
benefits any Employee would otherwise receive under the Plan but
shall be used to reduce contributions of the Employer to the
Plan.
22
4.6 Transfers to or from Affiliated Employers. This
Section 4.6 shall not apply to the transfer by an Employee to the
Employer from Savannah Electric and Power Company on or after
March 3, 1988. In the case of the transfer of an Employee
(including an Employee included in the Prior Plan who was
transferred in accordance with the Prior Plan) to an Affiliated
Employer which has at the time of transfer a pension plan with
substantially the same terms as this Plan, such Employee, if and
when he commences to receive on or after his Normal Retirement
Date retirement income under such pension plan of the Affiliated
Employer to which transferred, shall receive retirement income
under such pension plan attributable to years of Accredited
Service with the Employer prior to the time of his transfer. If
and when such an Employee commences to receive on an Early
Retirement Date retirement income under such pension plan of the
Affiliated Employer to which transferred, the amount of any
retirement income payable under such pension plan and
attributable to Accredited Service with the Employer prior to
such transfer shall be reduced in accordance with the provisions
of the pension plan relating to retirement income payable at
Early Retirement Date, or if such retirement income shall be
payable in a manner similar to the provisions of Section 8.2 or
Section 8.6, reduced in accordance with the applicable provision.
In the case of the transfer to this Employer (not including
transfers by reason of the split-up as of November 1, 1949) of an
Employee of any Affiliated Employer which has at the time of
transfer a pension plan with substantially the same terms as this
Plan, the Employer will, subject to the provisions of Article IX,
make periodic contributions into this Plan to the extent
necessary to provide the portion of the Retirement Income not
provided for him in the pension plan of the company from which he
was transferred.
Upon the transfer of an Employee to or from the Employer,
the Plan and Trust shall be authorized to receive or transfer the
greater of (a) the actuarial equivalent of the Employee's Accrued
Retirement Income or (b) such assets as may be required to fund
the projected Retirement Income of the Employee at his retirement
date attributable to the Plan or the pension plan maintained by
the Affiliated Employer from which the Employee transfers,
determined as of the last day of the Plan Year in which the
transfer occurs using the current funding assumptions for the
Plan Year in which the transfer occurs. The Retirement Board of
the Employer shall be authorized to coordinate the transfer of
assets and liabilities attributable to the benefits of active
Employees, terminated vested Employees, retired Employees, and
Provisional Payees with any Affiliated Employer which has at such
time a pension plan with substantially the same terms as this
Plan.
23
Notwithstanding the above, the transferred Employee shall be
entitled to receive a benefit immediately following the transfer
of assets or liabilities to or from the Plan and Trust which is
equal to or greater than the benefit he would have been entitled
to receive immediately before the transfer if the Plan or the
pension plan maintained by the Affiliated Employer from which the
Employee transfers had been terminated. In no event shall assets
be transferred to or from the Plan and Trust without the
concurrent transfer of liabilities attributable to such assets.
In no case, however, shall any such Employee, who retires
pursuant to Section 3.1, 3.2, or 3.3 or the Provisional Payee of
a deceased Employee entitled to payment in accordance with
Article VII, receive Retirement Income attributable to Accredited
Service from both companies aggregating less than the Minimum
Retirement Income specified in Article V (after giving effect to
adjustments, if any, for Provisional Payee designation or deemed
designation), as shall be applicable in his circumstances.
4.7 Transfers from Savannah Electric and Power Company. In
the case of the transfer to the Employer of an employee of
Savannah Electric and Power Company ("SEPCO"), such Employee, if
and when he attains his Normal Retirement Date or Deferred
Retirement Date, shall be entitled to receive Retirement Income
calculated pursuant to Section 5.1 or 5.2, as appropriate, based
upon his Accredited Service with the Employer and Accredited
Service attributable to actual service during his employment with
SEPCO. Such amount calculated in accordance with the preceding
sentence shall be reduced by the amount of retirement income
calculated under the defined benefit pension plan of SEPCO
attributable to Accredited Service during his actual service
during his employment with SEPCO. Any Retirement Income based
upon an Employee's Accredited Service with the Employer and
Accredited Service attributable to actual service during his
employment with SEPCO shall be subject to the provisions of the
Plan relating to Retirement Income payable at an Early Retirement
Date, or if such Retirement Income shall be payable in accordance
with the provisions of Section 8.2 or 8.6, subject to the
provisions of such Section.
This Section 4.7 shall also apply in calculating the
Retirement Income payable under this Plan to a former employee of
SEPCO who is hired by the Employer and is entitled to credit for
years of Accredited Service under the Plan attributable to his
actual service with SEPCO.
24
4.8 Retirement income for certain former employees of
Southern Electric Generating Company. This Section 4.8 shall
apply to those former employees of Southern Electric Generating
Company ("SEGCO") who either (a) retired from SEGCO on their
Early, Normal or Deferred Retirement Date under the Pension Plan
for Employees of Southern Electric Generating Company (the "SEGCO
Plan"), or (b) transferred from SEGCO to Alabama By-Products
Corporation ("ABC") in connection with the acquisition by ABC of
SEGCO's Mine No. 1 operation on or about August 1, 1974, and for
whom this Plan has assumed the liability for the payment of their
retirement income following the transfer of assets and
liabilities from the SEGCO Plan to this Plan. Each such employee
shall be entitled to receive Retirement Income under the Plan
attributable to years of Accredited Service with SEGCO prior to
the time of his retirement or transfer, as appropriate,
calculated and payable in accordance with the terms and
provisions of the SEGCO Plan in effect on the date of such
retirement or transfer, subject to any adjustments provided under
Section 8.6 of this Plan and any increases in Retirement Income
for retired employees under Section 5.11 of this Plan.
Notwithstanding the above, each employee to whom this
Section 4.8 shall apply shall be entitled to receive a benefit
immediately following the transfer of assets or liabilities from
the SEGCO Plan and Trust which is equal to or greater than the
benefit he would have been entitled to receive immediately before
the transfer of assets or liabilities if the SEGCO Plan had been
terminated.
25
ARTICLE V
Retirement Income
5
5.1 Normal Retirement Income. The monthly Retirement
Income payable as a single life annuity to an Employee included
in the Plan who retires from the service of the Employer at his
Normal Retirement Date after January 1, 1989, subject to the
limitations of Article VI, shall be the greater of (a) and (b):
(a) the amount determined under (1) or (2) below, whichever
is greater:
(1) the Accrued Retirement Income determined in
accordance with Section 5.1 of the Prior Plan without
regard to the Minimum Retirement Income requirement,
plus the designated fixed dollar amount times the
Employee's years of Accredited Service earned after
December 31, 1988. For the period on and after January
1, 1989 but ending December 31, 1990, the fixed dollar
amount equals $20.00. For the period on and after
January 1, 1991, the fixed dollar amount equals $25.00;
and
(2) $25.00 times an Employee's years of
Accredited Service; and
(b) the Minimum Retirement Income as determined in
accordance with Section 5.2.
5.2 Minimum Retirement Income payable upon retirement at
Normal Retirement Date or Deferred Retirement Date. The monthly
Minimum Retirement Income payable to an Employee who retires from
the service of the Employer after January 1, 1989 at his Normal
Retirement Date or Deferred Retirement Date (before adjustment
for Provisional Payee designation, if any) shall be an amount
equal to 1.70% of his Average Monthly Earnings multiplied by his
years (and fraction of a year) of Accredited Service to his
Normal Retirement Date or Deferred Retirement Date including a
Social Security Offset.
Any provisions of this Article V to the contrary
notwithstanding, Retirement Income determined in accordance with
this Article V with respect to an Employee who retires on his
Normal Retirement Date or Deferred Retirement Date shall not be
less than the Retirement Income which would have been payable
with respect to such Employee commencing on an Early Retirement
Date had (a) the Employee retired on the Early Retirement Date
which would have resulted in the greatest Retirement Income,
(b) his Retirement Income commencing on such Early Retirement
Date been computed by utilizing the estimated Federal primary
Social Security benefit to which the Employee shall be entitled
26
determined in accordance with the Social Security Act in effect
at his retirement, giving effect to the recomputation provision
of such Social Security Act, if applicable, and (c) such
Retirement Income commencing on such Early Retirement Date been
payable in the same form as his Retirement Income commencing on
his Normal Retirement Date or Deferred Retirement Date.
5.3 Minimum Retirement Income upon retirement at Early
Retirement Date or upon termination of service by reason of death
or otherwise prior to retirement. The monthly Minimum Retirement
Income payable to an Employee (or his Provisional Payee), if he
shall retire on his Early Retirement Date, or if his service
shall terminate by reason of death or otherwise prior to
retirement, shall be determined in accordance with the following
provisions:
(a) Upon retirement at Early Retirement Date his Minimum
Retirement Income (before adjustment for Provisional Payee
designation, if any) shall be an amount equal to 1.70% of his
Average Monthly Earnings multiplied by his years (and fraction of
a year) of Accredited Service to his Early Retirement Date
including a Social Security Offset.
(b) Upon termination of service by reason of the death of
the Employee prior to retirement and after the effective date of
his Provisional Payee designation or deemed designation, the
Minimum Retirement Income for the purpose of determining the
Employee's Accrued Retirement Income upon which payment to his
Provisional Payee in accordance with Section 7.4 shall be based
shall be an amount equal to 1.70% of the Employee's Average
Monthly Earnings multiplied by his years (and fraction of a year)
of Accredited Service to the date of his death including a Social
Security Offset.
(c) For an Employee who terminates his service with the
Employer with entitlement to receive Retirement Income in
accordance with Section 8.1, upon retirement at Early Retirement
Date or Normal Retirement Date his Minimum Retirement Income
(before adjustment for Provisional Payee designation, if any)
shall be an amount equal to 1.70% of his Average Monthly Earnings
multiplied by his years (and fraction of a year) of Accredited
Service to his date of termination including a Social Security
Offset.
(d) Upon termination of service by reason of disability (as
defined in Section 4.4) of the Employee prior to retirement,
provided such Employee does not return to the service of the
Employer prior to his Retirement Date, the Minimum Retirement
Income shall be an amount equal to 1.70% of the Employee's
Average Monthly Earnings multiplied by his years (and fraction of
a year) of Accredited Service to his Retirement Date including a
Social Security Offset.
27
5.4 Calculation of Social Security Offset.
(a) Notwithstanding the Social Security Offset as
calculated in Sections 5.2 and 5.3, in no event shall such Social
Security Offset exceed the limits set forth in Section 401(l) of
the Code and the regulations applicable thereunder which are
incorporated by reference herein.
(b) For purposes of determining the Social Security Offset
in calculating an Employee's Retirement Income under the Plan,
the Social Security Offset shall be determined by using the
actual salary history of the Employee during his employment with
the Employer or any Affiliated Employer, provided that in the
event that the Retirement Board is unable to secure such actual
salary history within 180 days (or such longer period as may be
prescribed by the Retirement Board) following the later of the
date of the Employee's separation from service (by retirement or
otherwise) and the time when the Employee is notified of the
Retirement Income to which he is entitled, the salary history
shall be determined in the following manner:
(1) The salary history shall be estimated by applying
a salary scale, projected backwards, to the Employee's
compensation from the Employer for W-2 purposes for the
first Plan Year following the most recent Plan Year for
which the salary history is estimated. The salary scale
shall be a level percentage per year equal to six percent
(6%) per annum.
(2) The Plan shall give clear written notice to each
Employee of the Employee's right to supply the actual salary
history and of the financial consequences of failing to
supply such history. Such notice shall state that the
actual salary history is available from the Social Security
Administration.
For purposes of determining the Social Security Offset in
calculating the Retirement Income of an Employee entitled to
receive a public pension based on his employment with a Federal,
state, or local government agency, no reduction in such
Employee's Social Security benefit resulting from the receipt of
a public pension shall be recognized.
(c) If the distribution of an Employee's Accrued Retirement
Income begins before the Employee's attainment of the Social
Security Retirement Age (including a benefit commencing at Normal
Retirement Date), the projected Employer derived primary
insurance amount attributable to service by the Employee for the
Employer will be reduced by one-fifteenth (1/15) for each of the
first five (5) years and one-thirtieth (1/30) for each of the
next five (5) years by which the starting date of such benefit
28
precedes the Social Security Retirement Age of the Employee, and
reduced actuarially for each additional year thereafter.
5.5 Early Retirement Income. The monthly amount of
Retirement Income payable to an Employee who retires from the
service of the Employer at his Early Retirement Date subject to
the limitations of Section 6.2, will be equal to his Retirement
Income determined in accordance with Sections 5.1 and 5.3 based
on his Accredited Service to his Early Retirement Date, reduced
by three-tenths of one percent (0.3%) for each calendar month by
which the commencement date of his Retirement Income precedes his
Normal Retirement Date.
At the option of the Employee exercised at or prior to
commencement of his Retirement Income on or after his Early
Retirement Date (provided he shall not have in effect at such
Early Retirement Date a Provisional Payee designation pursuant to
Article VII) he may have his Retirement Income adjusted upwards
in an amount which will make his Retirement Income payable up to
age sixty-five (65) equal, as nearly as may be, to the amount of
his Federal primary Social Security benefit (primary old age
insurance benefit) estimated to become payable after age
sixty-five (65), as computed at the time of his retirement in
accordance with Section 5.3(a), plus a reduced amount, if any, of
Retirement Income actually determined to be payable after age
sixty-five (65). The Federal primary Social Security benefit
used in calculating an Employee's Retirement Income payable under
the Plan shall be determined by using the salary history of the
Employee during his employment with the Employer or any
Affiliated Employer, as calculated in accordance with Section
5.4(b).
5.6 Deferred Retirement Income. The monthly amount of
Retirement Income payable to an Employee who completes at least
one Hour of Service after December 31, 1987 and who retires from
the service of the Employer at his Deferred Retirement Date,
subject to the limitations of Section 6.2, will be equal to his
Retirement Income determined in accordance with Sections 5.1 and
5.2 based on his Accredited Service to his Deferred Retirement
Date. For Employees whose Normal Retirement Date would have
occurred on or before January 1, 1986, but whose Deferred
Retirement Date occurs after January 1, 1988 and on or before
July 1, 1991, the monthly amount of Retirement Income payable to
an Employee who completes at least one Hour of Service after
December 31, 1987, subject to the limitations of Section 6.2,
will be equal to the greater of (a) his Retirement Income
calculated on his Deferred Retirement Date, or (b) his Retirement
Income calculated as of his Normal Retirement Date applying the
applicable percentage increase in his Retirement Income pursuant
to the terms of Section 5.13 of the Prior Plan.
29
5.7 Payment of Retirement Income. The first payment of an
Employee's Retirement Income will be made on his Early Retirement
Date, Normal Retirement Date, Deferred Retirement Date, or date
of commencement of payment of Retirement Income in accordance
with Section 8.2 or 8.6, as the case may be; provided that
commencement of the distribution of an Employee's Retirement
Income shall not be made prior to his Normal Retirement Date
without the consent of such Employee, except as provided in
Section 8.4 of the Plan.
Notwithstanding anything to the contrary above, if in
accordance with this Section 5.7, an Employee is entitled to
receive Retirement Income commencing at his Early Retirement
Date, he may, in lieu of commencing payment of his Retirement
Income upon his Early Retirement Date, elect to receive such
Retirement Income commencing as of the first day of any month
after his Early Retirement Date and preceding his Normal
Retirement Date in an amount equal to his Accrued Retirement
Income determined as of the commencement of his Retirement Income
on or after his Early Retirement Date determined in accordance
with Section 5.5. An election pursuant to this Section 5.7 to
have Retirement Income commence prior to Normal Retirement Date
shall be made on a form prescribed by the Retirement Board and
shall be filed with the Retirement Board at least thirty (30)
days before Retirement Income is to commence.
In the event of the death of an Employee who has designated
a Provisional Payee or is deemed to have done so in accordance
with Article VII, if the designation has become effective, the
first payment to be made to the Provisional Payee pursuant to
Article VII shall be made to the Provisional Payee on the first
day of the month after the later of (a) the Employee's death and
(b) the date on which the Employee would have attained his fifty-
fifth (55th) birthday if he had survived to such date, if the
Provisional Payee shall then be alive and proof of the Employee's
death satisfactory to the Retirement Board shall have been
received by it. Subsequent payments will be made monthly
thereafter until the death of such Provisional Payee.
In any event, payment of Retirement Income to the Employee
shall begin not later than the sixtieth (60th) day after the
later of the close of the Plan Year in which falls (a) the
Employee's Normal Retirement Date or (b) the date the Employee
terminates his service with the Employer or any Affiliated
Employer. Notwithstanding the provisions of the Plan for the
monthly payment of Retirement Income, such income may be adjusted
and payable annually in arrears if the amount of the Retirement
Income is less than $10.00 per month.
30
5.8 Termination of Retirement Income. The monthly payment
of Retirement Income will cease with the last payment preceding
the retired Employee's death; subject, however, to the
continuation of payments to a surviving Provisional Payee, if one
has been designated or deemed to have been designated, which
likewise will cease with the last payment preceding the death of
the Provisional Payee. There shall be no benefits payable under
the Plan on behalf of any Employee whose death occurs prior to
his retirement, except as otherwise provided in Article VII with
respect to a Provisional Payee of an Employee. Following the
death of an Employee and of his Provisional Payee, if any, no
further payments will be made under the Plan on account of such
Employee or to his estate.
5.9 Required distributions.
(a) Once a written claim for benefits is filed with the
Retirement Board and unless the Employee elects to have payment
begin at a later date, payment of benefits to the Employee shall
begin not later than sixty (60) days after the last day of the
Plan Year in which the latest of the following events occurs:
(1) the Employee's Normal Retirement Date;
(2) the tenth (10th) anniversary of the date the
Employee commenced participation in the Plan; or
(3) the Employee's separation from service from the
Employer or any Affiliated Employer.
(b) Required minimum distributions on and after January 1,
1989
(1) Subject to the transitional rules described in
Paragraph (c) below, effective for calendar years beginning
after December 31, 1988, the payment of Retirement Income to
any Employee shall begin no later than April 1 of the
calendar year following the calendar year in which the
Employee attains age 70-1/2, without regard to the actual
date of separation from service. The amount of his
Retirement Income shall be recomputed as of such April 1 and
as of the close of each Plan Year after his Retirement
Income commences and preceding his actual retirement date as
if each such date were the Employee's Deferred Retirement
Date. Any additional Retirement Income he accrues at the
close of any such Plan Year shall be offset (but not below
zero) by the value of the benefit payments received in such
Plan Year.
(2) The receipt by an Employee of any payments or
distributions as a result of his attaining age 70-1/2 prior
to his actual retirement or death shall in no way affect the
31
entitlement of an otherwise eligible Employee to additional
accrued benefits.
(c) Age 70-1/2 transitional rule
Any Employee who is not a five-percent owner and who has
attained age 70-1/2 by January 1, 1988, may defer the
commencement of benefit payments under paragraph (b) above until
he actually separates from service with the Employer. This
transitional rule shall only apply if the Employee is not a five-
percent owner at any time during the Plan Year ending with or
within the calendar year in which such owner attains age 66-1/2
and in any subsequent Plan Year.
(d) Distribution upon death of Employee
(1) Death after commencement of benefits
If the Employee dies before his entire nonforfeitable
interest has been distributed to him, the remaining portion
of such interest shall be distributed at least as rapidly as
under the method of distribution selected by the Employee as
of the date of his death.
(2) Death prior to commencement of benefits
If the Employee dies before the distribution of his
nonforfeitable interest has begun, the entire interest shall
be distributed monthly to his Provisional Payee, if any,
over such Provisional Payee's remaining lifetime.
(e) Determining required minimum distributions
Notwithstanding anything in this Plan to the contrary, all
distributions, including the minimum amounts which must be
distributed each calendar year, under this Plan shall be made in
accordance with Code Section 401(a)(9) and the regulations
thereunder.
(f) Minimum distribution transitional rules
Any distribution made pursuant to Section 242(b)(2) of the
Tax Equity and Fiscal Responsibility Act of 1982 shall meet the
requirements of Code Section 401(a)(9) as in effect on December
31, 1983, and shall also satisfy Code Sections 401(a)(11) and
417.
32
5.10 Suspension of Retirement Income for reemployment.
(a) If a former Employee who is receiving Retirement Income
shall be reemployed by the Employer or any Affiliated Employer as
an Employee and shall not elect to waive his right to participate
under the Plan or the pension plan of the Affiliated Employer,
whichever applies, his Retirement Income shall cease during each
calendar month after his reemployment in which he completes forty
(40) or more Hours of Service. The Retirement Income payable
upon his subsequent retirement shall be reduced by the Actuarial
Equivalent of any Retirement Income he received prior to his
reemployment.
(b) No payment shall be withheld by the Plan pursuant to
this Section 5.10 unless the Plan notifies the Employee by
personal delivery or first class mail during the first calendar
month in which the Plan withholds payments that his Retirement
Income is suspended.
(c) If the payment of Retirement Income has been suspended,
payments shall resume no later than the first day of the third
calendar month after the calendar month in which the Employee
ceases to be employed in ERISA Section 203(a)(3)(B) service. The
initial payment upon resumption shall include the payment
scheduled to occur in the calendar month when payments resume and
any amounts withheld during the period between the cessation of
ERISA Section 203(a)(3)(B) service and the resumption of
payments.
5.11 Increase in Retirement Income of retired Employees for
service prior to January 1, 1991. Retirement Income payable on
and after January 1, 1991 to an Employee (or to the Provisional
Payee of an Employee) who retired at an Early Retirement Date or
at his Normal Retirement Date on or before January 1, 1991
pursuant to the Plan as in effect prior to January 1, 1991, will
be recalculated to increase the amount thereof by an amount
ranging from a minimum of two percent (2%) to a maximum of forty
percent (40%) in accordance with the following schedule:
Year in which Percentage
retirement occurred increase
1990 2%
1989 4%
1988 6%
1987 8%
1976 - 1986 10%
1971 - 1975 20%
1966 - 1970 30%
1965 and prior years 40%
33
A similar adjustment, based on the date of the commencement
of Retirement Income payments to the Employee's Provisional
Payee, rather than the Employee's Retirement Date, will be made
in respect of Retirement Income which is payable on or after
January 1, 1991 where a Provisional Payee election was in effect,
or was deemed to be in effect, when an Employee died while in
service prior to January 1, 1991 and prior to his retirement.
A similar adjustment will be made in respect of Retirement
Income which is payable on or after January 1, 1991 for an
Employee (or the Provisional Payee of an Employee) entitled to
Retirement Income for which payments have commenced on or before
January 1, 1991 in accordance with Article VIII of the Prior
Plan, except for Employees whose Retirement Income has been
cashed-out pursuant to Section 8.4 of this Plan or Section 8.5 of
the Prior Plan.
For purposes of determining the applicable percentage
increase under this Section 5.11, the year of retirement includes
retirement where the last day of employment was December 31 of
such year. An Employee whose Deferred Retirement Date is on or
before January 1, 1988 and who did not retire at his Normal
Retirement Date shall be deemed to have retired at his Normal
Retirement Date for purposes of determining the increase in his
Retirement Income payable at his Deferred Retirement Date.
This Section 5.11 shall not apply with respect to an
Employee who has not retired, but for whom the distribution of
Retirement Income has commenced pursuant to Section 5.9 of the
Plan.
5.12 Special provisions relating to the treatment of
absence of an Employee from the service of the Employer to serve
in the Armed Forces of the United States.
(a) Effective as of November 1, 1977, any provisions of the
Plan to the contrary notwithstanding, the provisions of this
Section 5.12 shall be applicable to determine the period of
absence from the service of the Employer to serve in the Armed
Forces of the United States of a "participant in the Plan" (as
such term is defined in this paragraph (a)):
The term "participant in the Plan" means a person who on or
after November 1, 1977 is either: (1) an Employee who is then or
thereafter in the service of the Employer (including an Employee
on authorized leave of absence), (2) a retired Employee who is
receiving Retirement Income, (3) a deceased Employee who received
Retirement Income under this Plan or the Prior Plan at any time
after its Effective Date, (4) a deceased former Employee who
prior to the time of his death was receiving Retirement Income in
accordance with this Plan or the Prior Plan, (5) a former
Employee whose service terminated prior to January 1, 1976 and
34
who is receiving Retirement Income in accordance with the Prior
Plan, (6) a former Employee whose service terminated prior to
November 1, 1977 and who will be entitled to receive Retirement
Income commencing after that date in accordance with this Plan or
the Prior Plan, or (7) a former Employee who was transferred from
the Employer pursuant to Section 4.6 or pursuant to the Prior
Plan and who will be entitled to receive in accordance with
either, Retirement Income commencing after November 1, 1977.
The Employee or former Employee or retired Employee referred
to in this paragraph (a) is one who: (1) left the employment of
the Employer or of Georgia Power and Light Company to enter the
Armed Forces of the United States (including reserve components
thereof, the Public Health Service, and the National Guard) for
the purposes and under circumstances which are specified in the
reemployment provisions of the Military Selective Service Act and
in any amendments or supplements thereto hereinafter in this
Section 5.12 referred to as the "Selective Service Act," (2) made
application for reemployment by the Employer or by Georgia Power
and Light Company within such time after discharge or release
from such service in the Armed Forces of the United States as is
specified in the reemployment provisions of the Selective Service
Act as is applicable in his circumstances and was reemployed by
the Employer or by Georgia Power and Light Company thereafter
became an Employee of the Employer on March 1, 1957, (3) served a
period of active duty in the Armed Forces of the United States
which did not exceed the maximum period of such active duty
specified in the reemployment provisions of the Selective Service
Act as is applicable in his circumstances, and (4) performed such
service in the Armed Forces after May 1, 1940.
(b) For the purposes of the Plan, the period of absence of
a participant in the Plan to serve in the Armed Forces of the
United States shall be the period determined by the Retirement
Board.
(c) In accordance with the provisions of the Plan as
amended effective as of November 1, 1977 by the addition of this
Section 5.12 and the concurrent amendments associated therewith,
there shall be recalculated effective as of November 1, 1977 the
Retirement Income (1) of each participant in the Plan or that of
his Provisional Payee, if any, who is then receiving Retirement
Income; and (2) of each deceased participant in the Plan and his
deceased Provisional Payee, if any, who received payment of
Retirement Income, who is not then receiving Retirement Income.
(1) If in accordance with such recalculation, a larger
amount of Retirement Income would have been payable to a
participant in the Plan who is currently receiving payment
of Retirement Income and/or to his Provisional Payee, if
any, than was paid to them respectively prior to November 1,
1977, payment in a single sum of the excess of the
35
recalculated amount over the amounts which were paid prior
to November 1, 1977 with interest thereon as hereinafter
provided, shall be made as soon as practicable after
November 1, 1977 and, commencing as soon as practicable
after November 1, 1977, the Retirement Income payable to
participants in the Plan and/or to their Provisional Payees,
if any, who are currently receiving Retirement Income shall
be increased to an amount which is equal to the larger
recalculated amount to which they shall be entitled in
respect of payments to be made on or after November 1, 1977.
(2) If in accordance with the recalculation a larger
amount of Retirement Income would have been payable to the
date of death prior to November 1, 1977 of a deceased
retired Employee or his Provisional Payee than was paid
prior to his death, payment in a single sum of the excess of
the recalculated amount over the amount which was paid prior
to the date of death, with interest thereon as hereinafter
provided, shall be made to his estate as soon as practicable
after November 1, 1977.
(3) For the purposes of the recalculation to be made
in accordance with this paragraph (c), if a participant in
the Plan left the employment of an Affiliated Employer to
enter the Armed Forces of the United States and was not
reemployed by such Affiliated Employer upon his discharge or
release from service in the Armed Forces but he entered the
employment of the Employer, without intermediate employment,
and within the time prescribed in paragraph (a) of this
Section 5.12, and his period of absence in the Armed Forces
of the United States, as determined by the Retirement Board,
is not taken into account under the pension plan of the
Affiliated Employer whose service he left to enter the Armed
Forces or under Section 4.3, it shall be treated under the
Plan and the Prior Plan as if such period of absence had
been a period of absence from the Employer.
(d) Retirement Income of participants in the Plan who are
not referred to in subparagraphs (1) or (2) of paragraph (c) and
who are not on November 1, 1977 receiving Retirement Income shall
be determined in accordance with the provisions of the Plan as
amended by the addition of this Section 5.12 and the concurrent
amendments associated therewith.
(e) Interest to be paid on any single sum payment to be
made in accordance with subparagraphs (1) or (2) of paragraph (c)
of this Section 5.12 shall be computed at the annual rate of five
percent (5%).
(f) Payment to be made to any payee in accordance with this
Section 5.12 may be conditioned by the Retirement Board upon its
receipt of (1) such information pertaining to absence of an
36
Employee or former Employee to serve in the Armed Forces of the
United States as it may request and (2) such form of receipt and
release as it may determine to be appropriate in the
circumstances.
37
ARTICLE VI
Limitations on Benefits
6
6.1 Maximum Retirement Income. Notwithstanding any other
provision of the Plan, the amount of Retirement Income shall be
subject to the provisions of Article VI.
(a) The maximum annual amount of Retirement Income payable
with respect to an Employee in the form of a straight life
annuity without any ancillary benefits after any adjustment for a
Provisional Payee designation shall be the lesser of the dollar
limitation determined under Code Section 415(b)(1)(A) as adjusted
under Code Section 415(d), or Code Section 415(b)(1)(B) as
adjusted under Treasury Regulation Section 1.415-5, subject to
the following provisions of Article VI. With respect to any
former Employee who has Accrued Retirement Income under the Plan
or his Provisional Payee, the maximum annual amount shall also be
subject to the adjustment under Code Section 415(d).
(b) For purposes of Section 6.1, the term "average
compensation for his high three (3) years" shall mean the period
of consecutive calendar years (not more than three) during which
the Employee was both an active participant in the Plan and had
the greatest aggregate compensation from the Employer or, if he
is also entitled to receive a pension from a defined benefit plan
of an Affiliated Employer or if assets and liabilities
attributable to the pension of the Employee from a defined
benefit plan of an Affiliated Employer have been transferred to
this Plan, the greatest aggregate compensation from the Employer
and the Affiliated Employer during such high three (3) years.
The limitation described in Section 6.1(a) shall also apply in
the case of the payment of an Employee's Retirement Income with a
Provisional Payee designation.
(c) For purposes of Article VI, the term "compensation"
means an Employee's earned income, wages, salaries, and fees for
professional services, and other amounts received for personal
services actually rendered in the course of employment with the
Employer maintaining the Plan (including, but not limited to,
commissions paid salesmen, compensation for services on the basis
of a percentage of profits, commissions on insurance premiums,
tips and bonuses), and excluding the following:
(1) Employer contributions to a plan of deferred
compensation which are not included in the Employee's gross
income for the taxable year in which contributed or Employer
contributions under a simplified employee pension plan to
the extent such contributions are deductible by the
Employee, or any distributions from a plan of deferred
compensation;
38
(2) Amounts realized from the exercise of a
nonqualified stock option, or when restricted stock (or
property) held by the Employee either becomes freely
transferable or is no longer subject to a substantial risk
of forfeiture;
(3) Amounts realized from the sale, exchange, or other
disposition of stock acquired under a qualified stock
option; and
(4) Other amounts which received special tax benefits,
or contributions made by the Employer (whether or not under
a salary reduction agreement) towards the purchase of an
annuity described in Section 403(b) of the Code (whether or
not the amounts are actually excludable from the gross
income of the Employee).
Compensation for any Limitation Year is the compensation actually
paid or includible in gross income during such year.
(d) The foregoing limitations regarding the maximum
Retirement Income shall not apply with respect to an Employee if
the Retirement Income payable under the Plan and under any other
defined benefit plans of the Employer or any Affiliated Employer
does not exceed $10,000 for the calendar year or for any prior
calendar year, and the Employer and any Affiliated Employer has
not at any time maintained a defined contribution plan in which
the Employee has participated. The terms "defined benefit plan"
and "defined contribution plan" shall have the meanings set forth
in Section 415(k) of the Code.
6.2 Adjustment to Defined Benefit Dollar Limitation for
Early or Deferred Retirement.
(a) If the retirement benefit of an Employee commences
before the Employee's Social Security Retirement Age, the Defined
Benefit Dollar Limitation shall be reduced in accordance with
Code Section 415(b)(2)(C) as prescribed by the Secretary of the
Treasury. The reduction shall be made in such manner as the
Secretary of the Treasury may prescribe which is consistent with
the reduction for old-age insurance benefits commencing before
the Social Security Retirement Age under the Social Security Act.
(b) If the retirement benefit of an Employee commences
after the Employee's Social Security Retirement Age, the Defined
Benefit Dollar Limitation shall be adjusted in accordance with
Code Section 415(b)(2)(D) as prescribed by the Secretary of the
Treasury, based on the lesser of the interest rate assumption
under the Plan or on an assumption of five percent (5%) per year.
39
6.3 Adjustment of limitation for Years of Service or
participation.
(a) If an Employee has completed less than ten (10) years
of participation, the Employee's accrued benefit shall not exceed
the Defined Benefit Dollar Limitation as adjusted by multiplying
such amount by a fraction, the numerator of which is the
Employee's number of years (or part thereof) of participation in
the Plan, and the denominator of which is ten (10).
(b) If an Employee has completed less than ten (10) Years
of Service with the Employer and any Affiliated Employer, the
limitations described in Sections 415(b)(1)(B), 415(b)(4), and
415(e) of the Code shall be adjusted by multiplying such amounts
by a fraction, the numerator of which is the Employee's number of
years of service (or part thereof), and the denominator of which
is ten (10).
(c) In no event shall Sections 6.3(a) and (b) reduce the
limitations provided under Sections 415(b)(1), 415(b)(4), and
415(e) of the Code to an amount less than one-tenth (1/10) of the
applicable limitation (as determined without regard to this
Section 6.3).
(d) This Section 6.3 shall be applied separately with
respect to each change in the benefit structure of the Plan,
except as is or may be limited by Revenue Procedure 92-42.
6.4 Preservation of Accrued Retirement Income.
(a) Retirement Income payable to an Employee or former
Employee who was an active participant in the Plan before
October 3, 1973 will not be deemed to exceed the amount of
maximum Retirement Income limitations imposed by the provisions
of this Article VI if:
(1) The annual amount of Retirement Income payable to
such Employee on retirement does not exceed 100% of his
annual rate of compensation on the earlier of (A) October 2,
1973, or (B) the date on which he separated from the service
of the Employer;
(2) Such annual Retirement Income is not greater than
the annual amount of Retirement Income which would have been
payable to such Employee on retirement if (A) all terms and
conditions of the Plan in existence on his retirement date
had remained in existence until his retirement and (B) his
compensation taken into account for any period after
October 2, 1973 had not exceeded his annual rate of
compensation on October 2, 1973; and
40
(3) In the case of an Employee whose service with the
Employer terminated prior to October 2, 1973, such annual
Retirement Income is no greater than his vested Accrued
Retirement Income as of the date of such termination of
service.
(b) In the case of an Employee who is a participant in the
Plan prior to January 1, 1983, if the Section 415 requirements
have been met for all Plan Years prior to 1983, then the Defined
Benefit Dollar Limitation described in Section 1.10 applicable to
the payment of such Employee's Retirement Income shall be equal
to his Accrued Retirement Income as of December 31, 1982, (when
expressed as an annual benefit within the meaning of Section
415(b)(2) of the Code, as in effect prior to the Tax Equity and
Fiscal Responsibility Act of 1982), if his Accrued Retirement
Income exceeds such Defined Benefit Dollar Limitation.
(c) This Section 6.4(c) shall apply to defined benefit
plans that were in existence on May 6, 1986, and that met the
applicable requirements of Section 415 of the Code as in effect
for all Limitation Years. If the Current Accrued Retirement
Income of an Employee as of the first day of the Limitation Year
beginning on or after January 1, 1987, exceeds the benefit
limitations under Section 415(b) of the Code (as modified by
Sections 6.2 and 6.3 of the Plan), then, for purposes of Code
Section 415(b) and (e), the Defined Benefit Dollar Limitation
with respect to such Employee shall be equal to such Current
Accrued Retirement Income.
6.5 Limitation on benefits from multiple plans.
(a) In the case of an Employee who is also a participant in
any other defined benefit plan of the Employer or any Affiliated
Employer or in any defined contribution plan of the Employer or
any Affiliated Employer, the Retirement Income provided by the
Plan shall be limited to the extent necessary to prevent the sum
of Fractions A and B below, computed as of the end of the Plan
Year, from exceeding 1.0.
Fraction A
(numerator) Projected annual benefit of the Employee
under the Plan and any other defined benefit plan of
the Employer or any Affiliated Employer (determined as
of the close of the Plan Year).
(denominator) The lesser of (1) the product of 1.25
multiplied by the Defined Benefit Dollar Limitation (or
such higher accrued benefit as of December 31, 1982),
or (2) 1.4 multiplied by the amount determined under
Code Section 415(b)(1)(B) as adjusted under Treasury
Regulation Section 1.415-5.
41
Fraction B
(numerator) The sum of all Annual Additions to the
account of the Employee under any defined contribution
plan of the Employer or any Affiliated Employer as of
the close of the Plan Year.
(denominator) The sum of the lesser of the following
amounts, determined for such Plan Year and for each
prior Plan Year in which the Employee has a Year of
Service, (1) 1.25 multiplied by the Defined
Contribution Dollar Limitation determined under Code
Section 415(c)(1)(A), or (2) 1.4 multiplied by
twenty-five percent (25%) of the Employee's
compensation for the year.
6.6 Special rules for plans subject to overall limitations
under Code Section 415(e).
(a) For purposes of computing the defined contribution plan
fraction of Section 415(e)(1) of the Code, "Annual Addition"
shall mean the amount allocated to an Employee's account during
the Limitation Year as a result of:
(1) employer contributions,
(2) employee contributions,
(3) forfeitures, and
(4) amounts described in Sections 415(1)(1) and
419(A)(d)(2) of the Code.
(b) The Annual Addition for any Limitation Year beginning
before January 1, 1987 shall not be recomputed to treat all
Employee contributions as an Annual Addition.
(c) If the sum of Fractions A and B exceeds 1.0 as of
December 31, 1982, the numerator of Fraction B shall be reduced
by an amount which does not exceed the numerator, so that the sum
of Fraction A and Fraction B does not exceed 1.0.
(d) If the Plan satisfied the applicable requirements of
Section 415 of the Code as in effect for all Limitation Years
beginning before January 1, 1987, an amount shall be subtracted
from the numerator of the defined contribution plan fraction (not
exceeding such numerator) as prescribed by the Secretary of the
Treasury so that the sum of the defined benefit plan fraction and
defined contribution plan fraction computed under Section
415(e)(1) of the Code (as revised by this Article VI) does not
exceed 1.0 for such Limitation Year.
42
(e) The defined contribution plans and the other defined
benefit plans of the Employer and Affiliated Employers include,
respectively, (1) The Southern Company Employee Savings Plan, The
Southern Company Employee Stock Ownership Plan, and any other
defined contribution plan (as defined in Section 415(k) of the
Code) and (2) any other qualified pension plan in which the
Employee participates in accruing benefits maintained by the
Employer or any Affiliated Employer.
6.7 Combination of Plans. Notwithstanding any provisions
contained herein to the contrary, in the event that an Employee
participates in a defined contribution plan or defined benefit
plan required to be aggregated with this Plan under Code Section
415(g) and the combined benefits with respect to an Employee
exceed the limitations contained in Code Section 415(e),
corrective adjustments shall first be made under this Plan.
However, if an Employee's Retirement Income under this Plan has
already commenced, corrections shall first be made under The
Southern Company Employee Stock Ownership Plan, if possible, and
if not possible, then correction shall be made to the Employee's
Accrued Retirement Income under this Plan.
6.8 Incorporation of Code Section 415. Notwithstanding
anything contained in this Article to the contrary, the
limitations, adjustments and other requirements prescribed in
this Article shall at all times comply with the provisions of
Code Section 415 and the regulations thereunder, the terms of
which are specifically incorporated herein by reference.
43
ARTICLE VII
Provisional Payee
7
7.1 Adjustment of Retirement Income to provide for payment
to Provisional Payee. An Employee who desires to have his
Accrued Retirement Income adjusted in accordance with the
provisions of this Article VII to provide a reduced amount of
Retirement Income payable to him for his lifetime commencing on
his Early Retirement Date, his Normal Retirement Date, or his
Deferred Retirement Date, as the case may be, may elect, in
accordance with the provisions of this Article VII, at his
option, either:
(a) that an amount of Retirement Income be payable to him
for his lifetime which is equal to eighty percent (80%) of the
Retirement Income which would otherwise be payable to him, but
for such election (taking into account any reduction required in
accordance with Sections 7.3 and 7.4(a)), with the provision that
the same amount will be continued after his death to his
Provisional Payee until the death of such Provisional Payee, or
(b) that an amount of Retirement Income be payable to him
for his lifetime which is equal to ninety percent (90%) of the
Retirement Income which would otherwise be payable to him, but
for such election (taking into account any reduction required in
accordance with Sections 7.3 and 7.4(a)), with the provision that
one-half (1/2) of the amount payable to the Employee will be
continued after his death to his Provisional Payee until the
death of such Provisional Payee.
7.2 Form and time of election and notice requirements.
(a) An election of payment and designation of a Provisional
Payee in accordance with Section 7.1 shall be made in writing at
the same time on a form prescribed by the Retirement Board and
delivered to it. The election and designation shall specify its
effective date which shall not be sooner than the date received
by the Retirement Board or the Employee's fifty-fifth (55th)
birthday, whichever is later, nor later than the date of
commencement of payments in accordance with this Article VII.
(b) An election of payment to be made in accordance with
paragraph (a) or paragraph (b) of Section 7.1 may be changed from
paragraph (a) to paragraph (b) or vice versa by an Employee,
provided the written election of the change specifies an
effective date which shall not be sooner than the date received
by the Retirement Board or the Employee's fifty-fifth (55th)
birthday, whichever is later, nor later than the date of
commencement of payments in accordance with this Article VII. To
the extent that the new method of payment shall afford the
44
Employee changed protection in the event of his death after the
effective date of the new election and prior to retirement, his
Accrued Retirement Income shall be adjusted pursuant to Section
7.4(a) to reflect such changed protection.
(c) With respect to Sections 7.5 and 7.6, within the period
not less than 30 days and not more than 90 days prior to the
commencement of benefits, the Employee shall be furnished, by
mail or personal delivery, a written explanation of: (1) the
terms and conditions of the reduced Retirement Income payable as
provided in paragraph (b) of Section 7.1; (2) the Employee's
right to make, and the effect of, an election to waive the
payment of reduced Retirement Income pursuant to a Provisional
Payee designation; (3) the rights of the Employee's Provisional
Payee; and (4) the right to make, and the effect of, a revocation
of a previous election to waive the payment of reduced Retirement
Income pursuant to a Provisional Payee designation.
Within thirty (30) days following an Employee's written
request received by the Retirement Board during the election
period, but within sixty (60) days from the date the Employee is
furnished all of the information prescribed in the immediately
preceding sentence, the Employee shall be furnished an additional
written explanation, in terms of dollar amounts, of the financial
effect of an election by him not to receive such reduced
Retirement Income. If an Employee makes such request, the
election period herein prescribed shall end not earlier than
sixty (60) calendar days following the day of the mailing or
personal delivery of the additional explanation to the Employee.
Except that if an election made as provided in Section 7.5 or 7.6
is revoked, another election under that Section may be made
during the specified election period.
7.3 Circumstances in which election and designation are
inoperative. An election and designation made pursuant to this
Article shall be inoperative and the regular provisions of the
Plan shall again become applicable as if a Provisional Payee had
not been designated if, prior to the commencement of any payment
in accordance with this Article VII: (a) an Employee's
Provisional Payee shall die, (b) the Employee and the Provisional
Payee shall be divorced under a final decree of divorce, or
(c) the Retirement Board shall have received the written
Qualified Election of the Employee to rescind his election of
payment and designation of a Provisional Payee. If such a
Qualified Election to rescind is made by the Employee, his
Accrued Retirement Income shall be reduced to reflect the
protection afforded the Employee by any Provisional Payee
designation during the period from its effective date to the date
of the Retirement Board's receipt of the Employee's Qualified
Election to rescind if the option as to payments of reduced
Retirement Income was in accordance with either Section 7.1(a),
7.6(a), or 7.6(b). If an Employee remarries subsequent to the
45
death or divorce of his Provisional Payee and prior to the
commencement of payments in accordance with this Article VII, and
if such Employee is married prior to the time of the commencement
of payments, then he shall be entitled to designate a new
Provisional Payee in the manner set forth in Section 7.2.
7.4 Pre-retirement death benefit. If prior to his Normal
Retirement Date (or his Deferred Retirement Date, if applicable),
an Employee shall die while in the service of the Employer and is
survived by his spouse to whom he shall be married at the time of
his death, there shall be payable to his surviving spouse (whom
he shall be deemed to have designated as his Provisional Payee)
Retirement Income determined in accordance with paragraph (a) or
paragraph (c) of this Section 7.4, as applicable. Such
Retirement Income shall commence on the first day of the month
following the death of the Employee or the first day of the month
following the date on which he would have attained his
fifty-fifth (55th) birthday if he were still alive, whichever is
later, and shall cease with the last payment preceding the death
of his Provisional Payee.
(a) The amount of Retirement Income payable to the
Provisional Payee of a deceased Employee who prior to his death
had attained his fifty-fifth (55th) birthday shall be equal to
the amount payable to the Provisional Payee as calculated in
Section 7.1(b) determined on the basis of his Accredited Service
to the date of his death, or if the Employee shall have attained
his fifty-fifth (55th) birthday and so elected prior to his
death, such Retirement Income shall be equal to the amount set
forth in Section 7.1(a) determined on the basis of his Accredited
Service to the date of his death reduced as provided in the next
sentence. If such election shall be made by the Employee, the
Retirement Income which shall be payable to the Employee if he
lives to his Early Retirement Date or the first day of the month
following his attainment of age sixty-five (65), if later, shall
be reduced by three-fourths of one percent (0.75%) for each year
(prorated for a fraction of a year from the first day of the
month following the effective date of the election) which has
elapsed from the effective date of his election to the earlier of
(1) the commencement of Retirement Income on or after his Early
Retirement Date or the first day of the month following his
attainment of age sixty-five (65), if later, or (2) the
revocation of such election. If he shall die before the
commencement of Retirement Income on or after his Early
Retirement Date or the first day of the month following his
attainment of age sixty-five (65), if later, his Accrued
Retirement Income to the date of his death shall be reduced by
three-quarters of one percent (0.75%) for each year (prorated for
a fraction of a year from the first day of the month following
the effective date of the election) between the effective date of
his election and the first day of the month following his
attainment of age sixty-five (65). No reduction in the
46
Employee's Retirement Income shall be made for the period during
which the election is in effect after the first day of the month
following his attainment of age sixty-five (65).
(b) Retirement Income shall not be payable under paragraph
(a) of this Section 7.4 to the Provisional Payee of a deceased
Employee if at the time of his death there was in effect a
Qualified Election made after August 22, 1984 under this
paragraph (b) that no Retirement Income shall be paid to his
Provisional Payee in the event of his death while in the service
of the Employer (or while in the service of an Affiliated
Employer to which his employment had been transferred in
accordance with Section 4.6) as provided in paragraph (a),
provided the Employee had received at least 180 days prior to his
fifty-fifth (55th) birthday a written explanation of: (1) the
terms and conditions of the Retirement Income payable to his
Provisional Payee as provided in paragraph (a); (2) the
Employee's right to make, and the effect of, an election to waive
the payment of Retirement Income to his Provisional Payee;
(3) the rights of the Employee's Provisional Payee; and (4) the
right to make, and the effect of, a revocation of a previous
election to waive the payment of Retirement Income to the
Employee's Provisional Payee.
A revocation of a prior Qualified Election to waive the
payment of Retirement Income to the Employee's Provisional Payee
may be made by the Employee without the consent of the Employee's
Provisional Payee at any time before the commencement of
benefits. An election under this paragraph (b) may be made and
such election may be revoked by an Employee during the period
commencing ninety (90) days prior to the Employee's fifty-fifth
(55th) birthday and ending on the date of the Employee's death.
(c) The amount of such Retirement Income payable to the
Provisional Payee of a deceased Employee who prior to his death,
had completed at least five (5) Vesting Years of Service and had
not attained his fifty-fifth (55th) birthday shall be equal to
one-half of the reduced amount, as actuarially adjusted to
provide for the payment of such Retirement Income beginning at
the date on which such deceased Employee would have attained his
fifty-fifth (55th) birthday and to provide for the determination
of such Retirement Income on a joint and fifty percent (50%)
survivor basis of the Employee's Accrued Retirement Income,
determined on the basis of his Accredited Service to the date of
his death.
This Section 7.4(c) shall also apply to adjust the future
payment of Retirement Income after December 31, 1990 to a
Provisional Payee with respect to an Employee who died (while in
the service of the Employer prior to his fifty-fifth (55th)
birthday after completing the requisite number of Years of
Service) in order to have a nonforfeitable right to Retirement
47
Income under the Plan as in effect on the Employee's date of
death, provided Retirement Income is payable to such Provisional
Payee on or after January 1, 1991. The adjustment under this
Section 7.4(c) shall be determined by adjusting the Retirement
Income that had commenced to the Provisional Payee on or before
January 1, 1986, and then adding the applicable percentage
increase under Section 5.13 of the Prior Plan.
For an Employee, on or after January 1, 1991, who dies while
in the service of the Employer prior to his fifty-fifth (55th)
birthday after completing five (5) Vesting Years of Service, the
amount of such Retirement Income payable to the Provisional Payee
shall be calculated as provided in Section 7.1(b) determined on
the basis of his Accredited Service to the date of his death.
The payment of such Retirement Income to the Provisional Payee
shall begin on the first day of the month following the date on
which such deceased Employee would have attained his fifty-fifth
(55th) birthday.
7.5 Post-retirement death benefit - qualified joint and
survivor annuity. If at his Early Retirement Date, Normal
Retirement Date, or Deferred Retirement Date, as the case may be,
an Employee is married and he has not: (a) designated a
Provisional Payee in accordance with Section 7.1 in respect of
payments to be made commencing on his Early, Normal, or Deferred
Retirement Date or (b) made a Qualified Election that payment be
made to him in the mode of a single life annuity, he shall
nevertheless be deemed to have made an effective designation of a
Provisional Payee under this Section 7.5 and to have specified
the payment of a benefit as provided in Section 7.1(b).
7.6 Election and designation by former Employee entitled to
Retirement Income in accordance with Article VIII. If an
Employee is entitled to receive in accordance with Section 8.1
Retirement Income commencing at Normal Retirement Date, or sooner
in accordance with Section 8.2, he may, on or after his
fifty-fifth (55th) birthday, designate his spouse as his
Provisional Payee and elect to have his Accrued Retirement Income
at the date of termination of his service actuarially adjusted to
provide, at his option, in the event of the commencement of
payment prior to his Normal Retirement Date either:
(a) a reduced amount payable to him for his lifetime with
the provision that such reduced amount will be continued after
his death to his spouse as Provisional Payee until the death of
such Provisional Payee; or
(b) a reduced amount (greater than the amount in (a) above)
payable to him for his lifetime with the provision that one-half
(1/2) of such reduced amount will be continued after his death to
his spouse as Provisional Payee until the death of such
Provisional Payee.
48
The Employee's election and designation of his Provisional
Payee made in accordance with this Section 7.6 shall be in
writing on a form prescribed by the Retirement Board and
delivered to it and shall become effective not sooner than the
date received by the Retirement Board or the Employee's
fifty-fifth (55th) birthday, whichever is later, nor later than
the date of commencement of payment in accordance with this
Section 7.6.
If the Employee dies prior to his Normal Retirement Date but
after the effective date of his Provisional Payee designation,
there will be payable to his Provisional Payee for life
commencing on the first day of the calendar month after the
Employee's death Retirement Income in a reduced amount in
accordance with the Employee's election of payments to be made to
his Provisional Payee after the death of the Employee under
paragraph (a) or (b), as the case may be, of this Section 7.6.
However, if prior to the Employee's death, the Retirement Board
has not received such election, payment of a reduced amount of
Retirement Income will be made in accordance with paragraph (b)
of this Section 7.6 to his surviving spouse to whom he is married
at the time of his death, unless (1) at the time of his death
there is in effect a Qualified Election by the Employee that
reduced Retirement Income shall not be paid to his surviving
spouse in accordance with this Section 7.6 should he die between
his fifty-fifth (55th) birthday and his Normal Retirement Date
without having elected that payment be made to a Provisional
Payee and (2) at least 180 days prior to his fifty-fifth (55th)
birthday a written explanation is provided to the Employee of:
(A) the terms and conditions of the Retirement Income payable to
his Provisional Payee as provided in this Section 7.6; (B) the
Employee's right to make, and the effect of, an election to waive
the payment of Retirement Income to his Provisional Payee;
(C) the rights of an Employee's spouse; and (D) the right to
make, and the effect of, a revocation of a previous election to
waive the payment of Retirement Income to his Provisional Payee.
If the Employee is entitled to receive payment of Retirement
Income in accordance with Section 8.2 after his fifty-fifth
(55th) birthday and prior to his Normal Retirement Date and
elects to do so, a reduced amount of Retirement Income determined
in accordance with this Section 7.6 based upon his Accrued
Retirement Income at the date of termination of his service
(actuarially reduced in accordance with Section 8.2) will be
payable to him commencing on the date on which payments commence
prior to Normal Retirement Date in accordance with Section 8.2
with payments in the same or reduced amount to be continued to
his Provisional Payee for life after the Employee's death in
accordance with his election under paragraph (a) or (b), as the
case may be, of this Section 7.6. However, if the Employee is
married and he has not designated a Provisional Payee in respect
of payments to commence to him prior to his Normal Retirement
49
Date or elected that payment be made to him in the mode of a
single life annuity pursuant to a Qualified Election, he shall be
deemed to have designated a Provisional Payee pursuant to this
Section 7.6 and thereby specified that a reduced Retirement
Income shall be paid to him during his lifetime as provided in
paragraph (b) of this Section 7.6 and continued after his death
to his Provisional Payee as provided in paragraph (b) of this
Section 7.6.
If the Employee is alive on his Normal Retirement Date and
is married and payment of Retirement Income has not sooner
commenced, the provisions of Section 7.5 shall be applicable to
the payment of his Retirement Income, unless he shall elect at
his Normal Retirement Date to receive payment of his Retirement
Income pursuant to Section 7.1(a) or 7.1(b). However, if an
election and designation in accordance with this Section 7.6 was
in effect prior to his Normal Retirement Date, the Employee's
Accrued Retirement Income at his Normal Retirement Date shall be
actuarially adjusted for the period the election and designation
was in effect.
7.7 Death benefit for Provisional Payee of former Employee.
If an Employee, whose service with the Employer terminates on or
after January 1, 1989, shall die after such termination of
employment, and prior to his death (a) shall have not attained
his fifty-fifth (55th) birthday, (b) shall have completed at
least five (5) Vesting Years of Service, and (c) shall be
survived by his spouse to whom he shall be married at his death,
then there shall be payable to his surviving spouse (whom he
shall be deemed to have designated as his Provisional Payee)
Retirement Income determined in accordance with this Section 7.7.
Such Retirement Income shall be equal to one-half of the reduced
amount, as actuarially adjusted to provide for the payment of
such Retirement Income beginning at the date on which such
deceased Employee would have attained his fifty-fifth (55th)
birthday and to provide for the determination of such Retirement
Income on a joint and fifty percent (50%) survivor basis of the
Employee's Accrued Retirement Income, determined on the basis of
his Accredited Service to the date of his death. Such Retirement
Income shall commence on the first day of the month following the
date on which the former Employee would have attained his
fifty-fifth (55th) birthday if he were still alive, and shall
cease with the last payment preceding the death of his
Provisional Payee.
7.8 Limitations on Employee's and Provisional Payee's
benefits.
(a) With respect to an Employee who does not elect a single
life annuity, the limitation on benefits imposed under Article VI
shall be applied as if such Employee had elected a benefit in the
form of a single life annuity.
50
(b) With respect to a Provisional Payee, the limitations on
benefits imposed under Article VI shall be applied consistent
with paragraph (a) above prorated to provide a limitation equal
to or one-half of the Employee's limitation as appropriate in
accordance with annuity form of benefit elected by the Employee.
7.9 Effect of election under Article VII. An election of
payment or a deemed election of payment in accordance with this
Article VII shall be in lieu of any other form or method of
payment of Retirement Income.
51
ARTICLE VIII
Termination of Service
8
8.1 Vested interest. If an Employee included in the Plan
terminates for any reason other than death or transfer to an
Affiliated Employer as provided by Section 4.6 or retirement as
provided by Article III, and if such Employee has had at least
five (5) Vesting Years of Service with the Employer, whether or
not Accredited Service, he will be entitled to receive,
commencing at Normal Retirement Date (except as provided in
Section 8.2 and subject to the provisions of Section 7.6)
Retirement Income equal to his Accrued Retirement Income at the
date of the termination of such service, provided that he makes
application to the Employer for the payment of such Retirement
Income. If proper application for payment of Retirement Income
shall not be received by the Employer by the April 1 of the
calendar year following the calendar year in which the Employee
attains age 70 1/2 and the whereabouts of the Employee cannot be
determined by the Employer, Retirement Income shall be paid to
the Employee's Provisional Payee, if any, and if surviving and
the whereabouts known to the Employer, or applied in such other
manner as the Retirement Board shall deem appropriate. The
payment of Retirement Income pursuant to this provision shall
completely discharge all liability of the Retirement Board, the
Employer, and the Trustee or other payor to the extent of the
payments so made. If such Employee terminates with less than
five (5) Vesting Years of Service with the Employer, he shall
immediately forfeit any Accrued Retirement Income under the Plan
based upon his service prior to such termination.
8.2 Early distribution of vested benefit. If an Employee
terminates from service before his fifty-fifth (55th) birthday
and is entitled to receive in accordance with Section 8.1
Retirement Income commencing at his Normal Retirement Date and at
the time his service terminated he had at least ten (10) Years of
Accredited Service, he may, in lieu of receiving payment of such
Retirement Income commencing at Normal Retirement Date, elect to
receive such Retirement Income commencing as of the first day of
any month within the ten-year period preceding his Normal
Retirement Date in an amount equal to his Accrued Retirement
Income at the date of termination of his service actuarially
reduced in accordance with reasonable actuarial assumptions
adopted by the Retirement Board. An election pursuant to this
Section 8.2 to have Retirement Income commence prior to Normal
Retirement Date shall be made on a form prescribed by the
Retirement Board and shall be filed with the Retirement Board at
least thirty (30) days before Retirement Income is to commence.
52
8.3 Years of Service of reemployed Employees. If an
Employee whose service terminates is again employed by the
Employer as an Employee or he is employed (other than by reason
of transfer in accordance with Section 4.6) by an Affiliated
Employer which has at the time of his employment by such company
a pension plan with substantially the same terms as this Plan,
his Years of Service with the Employer and his Accredited Service
immediately prior to the termination of his service shall be
treated as provided in this Section 8.3, subject to the
provisions of Section 8.4. For this purpose the terms "again
employed" and "reemployment" shall include employment with an
Affiliated Employer.
(a) If at the time of his reemployment he has not incurred
a One-Year Break in Service, his Years of Service with the
Employer and his Accredited Service will be restored whether or
not he is entitled to receive Retirement Income in accordance
with Section 8.1.
(b) If at the time of termination of his service he is
entitled to receive Retirement Income in accordance with the
provisions of Section 8.1, upon his reemployment his Years of
Service with the Employer immediately prior to the termination of
his service shall be restored whether or not he has incurred a
One-Year Break in Service.
(c) If at the time of reemployment on or after January 1,
1985, he is not entitled to receive Retirement Income in
accordance with Section 8.1 and he (1) has incurred less than
five (5) consecutive One-Year Breaks in Service or (2) has
incurred five (5) or more consecutive One-Year Breaks in Service,
but his Years of Service prior to such One-Year Breaks in Service
exceeded the consecutive One-Year Breaks in Service, then upon
the completion of one Eligibility Year of Service following his
reemployment, provided that if his reemployment date is on or
after January 1, 1995, no such Eligibility Year of Service shall
be required, his Years of Service with the Employer and his
Accredited Service prior to the first One-Year Break in Service
shall be restored, disregarding any Years of Service with the
Employer which are not required to be taken into account by
reason of any previous One-Year Breaks in Service. The Years of
Service and years of Accredited Service credited to an Employee
reemployed prior to January 1, 1985, with regard to his Years of
Service with the Employer and years of Accredited Service
immediately prior to the termination of his service shall be
determined under the terms of the Plan in effect prior to January
1, 1985.
53
(d) Years of Service and Accredited Service restored to an
Employee in accordance with this Section 8.3 shall be aggregated
with Years of Service and Accredited Service to which the
Employee may be entitled after his reemployment. If, however,
the Minimum Retirement Income so determined for the Employee upon
his subsequent retirement or termination of service shall be less
than the aggregate of: (1) his Minimum Retirement Income, if
any, determined in respect of the period ending with his prior
termination of service, and (2) his Minimum Retirement Income
determined in respect of the period after his reemployment, the
aggregate of such Minimum Retirement Incomes shall be deemed to
be his Minimum Retirement Income upon such subsequent retirement
or termination of service. In any event, his Retirement Income,
however computed, shall be reduced by the Actuarial Equivalent of
any Retirement Income he received with respect to his prior
period of employment.
(e) If a former Employee to whose credit shall be restored
years of Accredited Service in accordance with this Section 8.3
shall become entitled (or his Provisional Payee shall become
entitled) to receive retirement income under the plan of an
Affiliated Employer by which he should become employed, he shall
be deemed to have transferred to the Affiliated Employer for
purposes of Section 4.6 as of his initial date of participation
in the plan of such Affiliated Employer.
8.4 Cash-out and buy-back. (a) Notwithstanding any other
provision of this Plan, if the present value of Accrued
Retirement Income of an Employee whose service terminates for any
reason other than transfer to an Affiliated Employer under
Section 4.6, or retirement under Article III, is not more than
$3,500 (or such greater amount as permitted by the regulations
prescribed by the Secretary of the Treasury) the Employer shall
direct that such present value of the Employee's Accrued
Retirement Income be paid in a lump sum, in cash, to such
terminated Employee. The present value of the Accrued Retirement
Income shall be calculated as of the last day of the date of
distribution of the lump sum applying the Applicable Interest
Rate as defined in Section 8.5(e) in effect on the first day of
the Plan Year of distribution. For purposes of this Section 8.4,
if the present value of the Employee's vested Accrued Retirement
Income is zero, the Employee shall be deemed to have received a
distribution of such vested Retirement Income.
(b) If such terminated Employee is subsequently reemployed
and again becomes covered under this Plan, the calculation of his
Accrued Retirement Income shall be without regard to his years of
Accredited Service prior to any One-Year Breaks in Service,
unless the amount of such payment is repaid to the Trust, plus
interest at the rate determined under Section 411(c)(2)(C) of the
Code. If such amount (plus interest) is repaid, the Employee's
Retirement Income shall be calculated based on his years of
54
Accredited Service before and after any One-Year Breaks in
Service. Any repayment of a cash-out made pursuant to this
Section 8.4 shall be made before the earlier of (a) five (5)
years after the date on which the Employee is reemployed by the
Employer or an Affiliated Employer, or (b) the close of the first
period of five (5) consecutive One-Year Breaks in Service
commencing after the distribution. If an Employee has been
deemed to receive a distribution in accordance with paragraph (a)
and is then reemployed, upon such reemployment, the amount of the
deemed distribution shall be restored to the Employee.
8.5 Calculation of present value for cash-out of benefits
and for determining amount of benefits.
(a) This Section 8.5 shall apply to all distributions from
the Plan and from annuity contracts purchased to provide Accrued
Retirement Income other than distributions described in Section
1.417-1T(e)(3) of the income tax regulations issued under the
Retirement Equity Act of 1984.
(b) (1) For purposes of determining whether the present
value of (A) an Employee's vested accrued benefit; (B) a
qualified joint and survivor annuity, within the meaning of
Section 417(b) of the Code; or (C) a qualified preretirement
survivor annuity within the meaning of Section 417(c)(1) of the
Code exceeds $3,500, the present value of such benefits or
annuities shall be calculated by using an interest rate no
greater than the Applicable Interest Rate.
(2) In no event shall the present value of any such
benefit or annuity determined under this Section 8.5(b) be
less than the present value of such benefits or annuities
determined using the Applicable Interest Rate.
(c) (1) For purposes of determining the amount of an
Employee's vested Accrued Retirement Income, the interest rate
used shall not exceed:
(A) the Applicable Interest Rate if the
present value of the benefit (using such rate or
rates) is not in excess of $25,000; or
(B) 120 percent of the Applicable Interest
Rate if the present value of the benefit exceeds
$25,000 (as determined under (A)). In no event
shall the present value determined under this (B)
be less than $25,000.
55
(2) In no event shall the amount of the benefit or
annuity determined under this Section 8.5(c) be less than
the greater of:
(A) the amount of such benefit determined under
the Plan's provisions for determining the amount of
benefits other than Sections 8.5; or
(B) the amount of such benefit determined using
the Applicable Interest Rate if the value determined in
Section 8.5(c)(1) is less than $25,000 or 120 percent
of the Applicable Interest Rate if the value determined
in Section 8.5(c)(1) is not less than $25,000.
(d) In no event shall the amount of any benefit or annuity
determined under this Section 8.5 exceed the maximum benefit
permitted under Section 415 of the Code.
(e) (1) For purposes of this Section 8.5, "Applicable
Interest Rate" shall mean the interest rate or rates which would
be used as of the date distribution commences by the Pension
Benefit Guaranty Corporation for purposes of valuing lump sum
payments under the Plan if the Plan had terminated on the date
distribution commences with insufficient assets to provide
benefits guaranteed by the Pension Benefit Guaranty Corporation
on that date.
(2) Notwithstanding the foregoing, if the provisions
of the Plan other than Section 8.5(e) so provide, the
Applicable Interest Rate shall be determined as of the first
day of the Plan Year in which a distribution occurs rather
than as of the date distribution commences.
(f) (1) This Section 8.5 shall apply to distributions in
Plan Years beginning after December 31, 1984, other than
distributions under annuity contracts distributed to or owned by
an Employee prior to September 17, 1985 unless additional
contributions are made under the Plan by the Employer with
respect to such contracts.
(2) Notwithstanding the foregoing, this Section
8.5 shall not apply to any distributions in Plan Years
beginning after December 31, 1984, and before
January 1, 1987, if such distributions were made in
accordance with the requirements of the income tax
regulations issued under the Retirement Equity Act of
1984.
56
8.6 Retirement Income under Prior Plan. Any person
entitled to receive Retirement Income under Article VIII of the
Prior Plan shall only be entitled to receive Retirement Income in
accordance with the provisions of such Prior Plan in effect at
the time his service was terminated, except that any such person
whose service terminated prior to January 1, 1976:
(a) with at least twenty (20) years of Accredited Service
may elect to receive Retirement Income commencing prior to his
Normal Retirement Date in accordance with Section 8.2;
(b) who shall have returned to the employment of the
Employer, whether before or after January 1, 1976, and shall be
an Employee who is entitled to receive Retirement Income in
respect of his Accredited Service after January 1, 1976, his
years of Accredited Service under the Prior Plan with respect to
his service before January 1, 1976, shall, for the purpose of
calculating his Minimum Retirement Income, be aggregated with his
years of Accredited Service after his reemployment. His Accrued
Retirement Income to the date of termination of his service
payable in accordance with Article VIII of the Prior Plan shall
be treated as Prior Plan Retirement Income and his Years of
Service prior to the date of termination of his service shall be
restored to his credit. It shall be a condition of the treatment
provided for in this paragraph (b) that: (1) the Employee
rescind any election of payment and designation of a Provisional
Payee which he shall have made under the Prior Plan and which
shall be in effect at the time of his return to the employment of
the Employer and (2) if he is receiving Retirement Income, his
Retirement Income shall cease during his period of employment and
any Retirement Income payable upon his subsequent retirement
shall be reduced by the Actuarial Equivalent of any Retirement
Income he received prior to his reemployment.
8.7 Requirement for Direct Rollovers. This Section 8.7
applies to distributions made from the Plan on or after January
1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Distributee's election
under this Article VIII, a Distributee may elect, at the time and
in the manner prescribed by the Retirement Board, to have any
portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Distributee in a Direct
Rollover.
(a) Definitions
(1) Eligible Rollover Distribution
An Eligible Rollover Distribution is any distribution
of all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution
does not include:
57
(A) any distribution that is one of a series of
substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or
joint life expectancies) of the Distributee and the
Distributee's spouse, or for a specified period of 10
years or more;
(B) any distribution to the extent such
distribution is required under Code Section 401(a)(9);
and
(C) the portion of any distribution that is not
includible in gross income (determined without regard
to the exclusion for net unrealized appreciation with
respect to employer securities).
(2) Eligible Retirement Plan
An Eligible Retirement Plan is an individual retirement
account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an
annuity plan described in Code Section 403(a), or a
qualified trust described in Code Section 401(a) that
accepts the Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution
for a Provisional Payee, an Eligible Retirement Plan is an
individual retirement account or individual retirement
annuity.
(3) Distributee
A Distributee includes an Employee or former Employee.
In addition, a Distributee includes the Employee's or former
Employee's spouse who is an alternate payee under a
qualified domestic relations order, as defined in Code
Section 414(p).
(4) Direct Rollover
A Direct Rollover is a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
58
ARTICLE IX
Contributions
9
9.1 Contributions generally. All contributions which the
Employer deems necessary to provide the Retirement Incomes under
the Plan in excess of the fund derived from the split-up of the
Commonwealth pension plan will be made from time to time by or on
behalf of the Employer and no contributions will be required of
the Employees. All contributions shall be made to the Trustee
under the Trust Agreement provided for in Article XI, and if a
group annuity contract shall be entered into with a life
insurance company ("contract with an insurance company"),
contributions may also be made to the insurance company.
The minimum amount of contributions to be made by or on
behalf of the Employer for any Plan Year of the Plan shall be
such amount as is required to meet the minimum funding standards
of ERISA and any regulations in respect thereto. However, the
Employer is under no obligation to make any contributions under
the Plan after the Plan is terminated, whether or not Retirement
Income accrued or vested prior to the date of termination has
been fully funded. All contributions are expressly conditioned
upon the deductibility of such contributions by the Employer
pursuant to Section 404 of the Code.
9.2 Return of Employer contributions. All contributions
made pursuant to the Plan shall be held by the Trustee in
accordance with the terms of the Trust Agreement for the
exclusive benefit of those Employees who are Participants under
the Plan, including former Employees and their Beneficiaries, and
shall be applied to provide benefits under the Plan and to pay
expenses of administration of the Plan and Trust, to the extent
that such expenses are not otherwise paid. At no time prior to
the satisfaction of all liabilities with respect to such
Employees and their Beneficiaries shall any part of the Trust
Fund be used for, or diverted to, purposes other than for the
exclusive benefit of such Employees and their Beneficiaries.
However, notwithstanding the provisions of this Section 9.2:
(a) If a contribution is conditioned upon the deductibility
of the contributions under Section 404 of the Code, then, to the
extent the deduction is disallowed, the Trustee shall upon
written request of the Employer, return the contribution (to the
extent disallowed) to the Employer within one year after the date
the deduction is disallowed.
(b) If a contribution or any portion thereof is made by the
Employer by a mistake of fact, the Trustee shall, upon written
request of the Employer, return the contribution or such portion
to the Employer within one year after the date of payment to the
Trustee.
59
The amount which may be returned to the Employer under this
Section 9.2, is the excess of (a) the amount contributed over (b)
the amount that would have been contributed had there not
occurred a mistake of fact or a mistake in determining the
deduction. Earnings attributable to the excess contribution
shall not be returned to the Employer, but losses attributable
thereto shall reduce the amount to be so returned.
(c) If permitted under Federal common law, the Company may
recover any other contributions to the Plan or payments to any
other entity to the extent such contributions or payments
unjustly enrich or otherwise gratuitously benefit such entity.
9.3 Expenses. Prior to termination of the Plan, all
investment expenses (including brokerage costs, transfer taxes,
shipping expenses, and charges of correspondent banks of the
Trustee) and any taxes which may be levied against the Trust
shall be charged to the Trust. All other expenses prior to the
termination of the Plan shall be paid by the Employer or charged
to the Trust, as determined in the discretion of The Southern
Company Pension Fund Investment Review Committee. After the
termination of the Plan, all expenses shall be levied against the
Trust and shall be charged to the Trust.
60
ARTICLE X
Administration of Plan
10
10.1 Retirement Board. The general administration of the
Plan shall be placed in a Retirement Board of five (5) members
who shall be appointed from time to time by the Board of
Directors to serve at the pleasure of the Board of Directors.
10.2 Organization and transaction of business of Retirement
Board. Any person appointed a member of the Retirement Board
shall signify his acceptance by filing written acceptance with
the Board of Directors. Any member of the Retirement Board may
resign by delivering his written resignation to the Board of
Directors, and such resignation shall become effective at
delivery or at any later date specified therein.
The members of the Retirement Board shall elect a Chairman
from their number, and a Secretary who may be but need not be one
of the members of the Retirement Board, and shall designate an
actuary to act in actuarial matters relating to the Plan. They
may appoint from their number such committees with such powers as
they shall determine, may authorize one or more of their number
or any agent to make any payment in their behalf, or to execute
or deliver any instrument except that a requisition for funds
from the Trustee shall be signed by two (2) members of the
Retirement Board.
The Retirement Board shall hold meetings upon such notice,
at such place or places, and at such time or times as they may
from time to time determine.
A majority of the members of the Retirement Board at the
time in office shall constitute a quorum for the transaction of
business. All resolutions or other actions taken by the
Retirement Board at any meeting shall be by the vote of a
majority of the Retirement Board at the time in office. Any
determination or action of the Retirement Board may be made or
taken without a meeting by a resolution or written memorandum
concurred upon by a majority of the members then in office.
No member of the Retirement Board who is also an Employee of
the Employer shall receive any compensation from the Plan for his
service as such. No bond or other security need be required of
any member in any jurisdiction except as may be required by
ERISA.
10.3 Administrative responsibilities of Retirement Board.
The Retirement Board, in addition to the functions and duties
provided for elsewhere in the Plan, shall have exclusive
discretionary authority for the following:
61
(a) construing and interpreting the Plan;
(b) determining all questions affecting the eligibility of
any Employee, retired Employee, Provisional Payee, or alternate
payee;
(c) determining all questions affecting the amount of the
benefit payable hereunder;
(d) ascertaining the persons to whom benefits shall be
payable under the provisions hereof;
(e) to the extent provided in the Plan, authorizing and
directing disbursements of benefits from the Plan;
(f) making final and binding determinations in connection
with any questions of fact which may arise regarding the
operation of the Plan;
(g) making such rules and regulations with reference to the
operation of the Plan as it may deem necessary or advisable,
provided that such rules and regulations shall not be
inconsistent with the express terms of the Plan or ERISA;
(h) prescribing such procedures and adopting such forms as
it determines necessary under the terms of the Plan; and
(i) reviewing such denials of claims for benefits as may
arise.
Any decision, determination, construction, interpretation,
ascertainment, authorization, direction, rule, regulation,
prescription, or review that the Retirement Board may make or
give in carrying out its duties or functions under this Section
10.3 shall be binding and conclusive.
10.4 Retirement Board, the "Administrator". For the
purposes of compliance with the provisions of ERISA, the
Retirement Board shall be deemed the "administrator" of the Plan
as the term "administrator" is defined in ERISA, and the
Retirement Board shall be, with respect to the Plan, a "named
fiduciary" as that term is defined in ERISA. For the purpose of
carrying out its duties, the Retirement Board may, in its
discretion, allocate responsibilities under the Plan among its
members and may, in its discretion, designate in writing, as set
forth in the minutes of the Retirement Board, persons other than
members of the Retirement Board to carry out such
responsibilities of the Retirement Board under the Plan as it may
see fit.
62
10.5 Fiduciary responsibilities. It is intended, that to
the maximum extent permitted by ERISA, each person who is a
"fiduciary" with respect to the Plan as that term is defined in
ERISA shall be responsible for the proper exercise of his own
powers, duties, responsibilities, and obligations under the Plan
and the trust or other funding medium as shall each person
designated by any fiduciary to carry out any fiduciary
responsibility with respect to the Plan, the trust or other
funding medium and no fiduciary or other person to whom fiduciary
responsibilities are allocated shall be liable for any act or
omission of any other fiduciary or of any other person delegated
to carry out any fiduciary or other responsibility under the Plan
or the trust or other funding medium.
Any person or group of persons may serve in more than one
fiduciary capacity with respect to the Plan and any fiduciary
with respect to the Plan may serve as a fiduciary with respect to
the Plan in addition to being an officer, employee, agent, or
other representative of a "party in interest" as that term is
defined in ERISA.
10.6 Employment of actuaries and others. The Retirement
Board may employ such "enrolled actuaries" and independent
"qualified public accountants" as such terms are defined in
ERISA, legal counsel who may be of counsel to the Employer, other
specialists, and other persons as the Retirement Board deems
necessary or desirable in connection with the administration of
the Plan. The Retirement Board and any person to whom it may
delegate any duty or power in connection with the administration
of the Plan, the Employer, and the officers and directors thereof
shall be entitled to rely conclusively upon and shall be fully
protected in any action omitted, taken, or suffered by them in
good faith in reliance upon any enrolled actuary, independent
qualified public accountant, counsel, or other specialist or
other person selected by the Retirement Board or in reliance upon
any tables, evaluations, certificates, opinions, or reports which
shall be furnished by any of them or by the Trustee or any
insurance company. Any action so taken, omitted, or suffered in
accordance with the provisions of this Section 10.6 shall be
conclusive upon each Employee, former Employee, and Provisional
Payee covered under the Plan.
10.7 Accounts and tables. The Retirement Board shall
maintain accounts showing the fiscal transactions of the Plan,
and shall keep in convenient form such data as may be necessary
for actuarial valuations with respect to the operation and
administration of the Plan. The Retirement Board shall prepare
annually a report showing in reasonable summary the financial
condition of the Trust and giving a brief account of the
operation of the Plan for the past year, and any further
information which the Board of Directors may require. Such
63
report shall be submitted to the Board of Directors and shall be
filed in the office of the Secretary of the Retirement Board.
The Retirement Board may, with the advice of an enrolled
actuary, adopt from time to time mortality and other tables as it
may deem necessary or appropriate for use in calculating benefits
under the Plan.
10.8 Indemnity of members of Retirement Board. To the
extent not compensated for by any applicable insurance, the
Employer shall indemnify and hold harmless each member of the
Retirement Board and each Employee of the Employer designated by
the Retirement Board to carry out any fiduciary responsibility
with respect to the Plan from any and all claims, loss, damages,
expense (including counsel fees approved by the Board of
Directors) and liability (including any amount paid in settlement
with the approval of the Board of Directors) arising from any act
or omission of such member or Employee designated by the
Retirement Board in connection with the Plan or the Trust, except
where the same is determined by the Board of Directors or is
judicially determined to be due to a failure to act in good faith
or is due to the gross negligence or willful misconduct of such
member or Employee. No assets of the Plan may be used for any
such indemnification.
10.9 Areas in which the Retirement Board does not have
responsibility. The Retirement Board shall not have
responsibility with respect to control or management of the
assets of the Plan. The Trustee or an insurance company, if
funds of the Plan shall be held by an insurance company, shall
have the sole responsibility for the administration of the assets
of the Plan as provided in the Trust Agreement or contract with
an insurance company, except to the extent that an "Investment
Manager," as that term is defined in ERISA, appointed by the
Board of Directors shall have responsibility for the management
of the assets of the Plan, or some part thereof, including the
power to acquire and dispose of the assets of the Plan, or some
part thereof.
The responsibility for providing a procedure for
establishing and carrying out a funding policy and method for the
Plan consistent with the objectives of the Plan and the
requirements of Title I of ERISA shall be that of the Board of
Directors or such committee, whether or not comprised of members
of the Board of Directors, as the Board of Directors may from
time to time designate and shall not be the responsibility of the
Retirement Board.
Effective July 21, 1993, the Pension Fund Investment Review
Committee of The Southern Company System shall recommend for
approval by the Board of Directors any Investment Manager that
shall have responsibility with respect to management of any Plan
64
assets. In addition, the Pension Fund Investment Review
Committee shall assume all responsibility for providing a
procedure for establishing and carrying out a funding policy and
method for the Plan consistent with the objectives of the Plan
and the requirements of Title I of ERISA.
10.10 Claims Procedures. Consistent with the requirements
of ERISA and the regulations thereunder of the Secretary of Labor
from time to time in effect, the Retirement Board or its
delegatee shall:
(a) provide adequate notice in writing to any Employee,
former Employee, retired Employee, or Provisional Payee (each
being hereinafter in the paragraph referred to as "participant")
whose claim for benefit under the Plan has been denied, setting
forth specific reasons for such denial, written in a manner
calculated to be understood by such participant; and
(b) afford a reasonable opportunity to any participant
whose claim for benefits has been denied for a full and fair
review of the decision denying the claim.
65
ARTICLE XI
Management of Trust
11
11.1 Trust. All assets of the Plan shall be held as a
special trust for use in accordance with the Plan.
The funds of the Plan shall be held by a Trustee, or by a
successor trustee appointed from time to time by the Board of
Directors in trust or held by a life insurance company in
accordance with the provisions of a contract with such insurance
company entered into by the Trustee or the Employer. The Trust
Agreement and contract with an insurance company may from time to
time be amended in the manner therein provided.
11.2 Disbursement of the Trust Fund. Subject to the
provisions of the Trust Agreement or contract with an insurance
company the Retirement Board shall determine the manner in which
the funds of the Plan shall be disbursed pursuant to the Plan,
including the form of voucher or warrant to be used in making
disbursements and the due qualification of persons authorized to
approve and sign the same. The responsibility for the retention
and investment of funds held by the Trustee shall lie with the
Trustee and not with the Retirement Board, and the responsibility
for the retention and investment of funds held by an insurance
company shall lie with the insurance company and not with the
Retirement Board. However, if in accordance with a Trust
Agreement forming a part of the Plan (including any pooled trust
agreement in which a trust forming a part of the Plan
participates) a contract with an insurance company shall be held
by the Trustee as an investment of the trust, directions may be
given from time to time to the Trustee by such board of directors
or committee or person or persons as may be specified in the
Trust Agreement to transfer funds of the trust to the life
insurance company which issued such contract or to transfer funds
from the life insurance company to the Trustee, as the case may
be.
11.3 Rights in the Trust. Under no circumstances shall
amounts of money or other things of value contributed by the
Employer to the Plan, or any part of the corpus or income of the
Trust held by the Trustee under the Plan, be recoverable by the
Employer from the Trustee or from any Employee, retired Employee,
or Provisional Payee, or be used for, or diverted to, purposes
other than for the exclusive benefit of the Employees, retired
Employees, and Provisional Payees covered hereunder; provided,
however, that, if after satisfaction of all liabilities of the
Trust with respect to Employees, retired Employees, and
Provisional Payees under the Plan, there is any balance
remaining, the Trustee shall return such balance to the Employer.
Notwithstanding the above, upon the approval of the Internal
Revenue Service or the enactment or promulgation of any laws or
66
regulations by any governmental authority, the Employer shall be
authorized to rededicate all or a portion of the assets allocated
to fund Retirement Income under the Plan to the separate account
to fund medical benefits under Article XV of the Plan.
11.4 Merger of the Plan. The Plan shall not be merged or
consolidated with, or any of its assets or liabilities
transferred to, any other plan, unless each Employee included in
the Plan would (if the Plan then terminated) receive a benefit
immediately after the merger, consolidation, or transfer which is
equal to or greater than the benefit he would have been entitled
to receive immediately before the merger, consolidation, or
transfer (if the Plan then terminated).
67
ARTICLE XII
Termination of the Plan
12
12.1 Termination of the Plan. The Plan may be terminated at
any time by action of the Board of Directors of the Employer in
accordance with the amendment procedures provided in Section
13.1. Upon such termination or partial termination all Accrued
Retirement Income of Employees to the date of such termination,
to the extent then funded, shall become nonforfeitable and the
assets of the Plan which have not previously been allocated to
provide Retirement Income shall then be paid out to Employees,
former Employees, and Provisional Payees in accordance with the
applicable requirements of ERISA and regulations thereunder
governing termination of "employee pension benefit plans" as
defined in ERISA. If after satisfaction of all liabilities, as
provided above, there is any balance remaining in the Trust, the
Trustee shall return such balance to the Employer.
In the first instance, subject to the foregoing
limitations, such remaining assets shall be allocated among all
persons in the following categories for whom such Retirement
Income or other benefits have not previously been provided,
namely, (a) Employees who have been retired under the Plan,
(b) Employees who at the date of termination of the Plan are
included in the Plan, (c) former Employees who at the date of the
termination of their employment were entitled to payment of
Retirement Income in accordance with Article VIII, and (d) former
Employees who have transferred to an Affiliated Employer in
accordance with Section 4.6 and are still in the employ or
receiving a retirement income from such company (including their
Provisional Payees, if any). Retirement Income already purchased
under any contract with an insurance company will be payable in
accordance with the provisions of that contract.
12.2 Limitation on benefits for certain highly paid
employees.
(a) The annual payments to an Employee described in
paragraph (b) below shall not exceed an amount equal to the
payments that would be made to or on behalf of such Employee
under a single life annuity that is the Actuarial Equivalent of
the sum of the Employee's Accrued Retirement Income and the
Employee's other benefits under this Plan (other than a Social
Security supplement) and any Social Security supplement that the
restricted Employee is entitled to receive. The restrictions in
this paragraph (a) do not apply, however, if --
(1) after payment to an Employee described in
paragraph (b) of all benefits payable to such Employee under
this Plan, the value of this Plan's assets equals or exceeds
68
110% of the value of current liabilities, as defined in Code
Section 412(c)(7), or
(2) the value of the benefits payable to such Employee
under this Plan for an Employee described in paragraph (b)
below is less than 1% of the value of current liabilities
before distribution.
(b) The Employees whose benefits are restricted on
distribution include all highly compensated employees and highly
compensated former employees (as such terms are defined in
Treasury Regulation Section 1.401(a)(4)-12); provided, however,
that Employees whose benefits are subject to restriction under
this Section 12.2 shall be limited to only those Employees who in
the current or in any previous Plan Year were one of the 25 non-
excludable Employees of the Employer with the greatest
compensation from the Employer.
12.3 Allocation of Trust upon termination. Subject to the
provisions of Section 12.2 above, if, subsequent to the effective
date of merger and consolidation of the Employees' Retirement
Plan of Georgia Power and Light Company [Georgia Power, as
successor] (hereinafter in this subsection referred to as the
"Retirement Plan") with the Plan, the Plan is terminated and the
amount of the Trust to be used and applied in accordance with the
provisions of Section 12.1 for the benefit of the persons therein
referred to shall not be equal to the sum of: (a) an amount equal
to the actuarially determined present values at the date of
termination of the Plan of the respective Retirement Incomes or
Accrued Retirement Incomes, as the case may be, of each retired
Employee, Employee, or former Employee (including their
Provisional Payees, if any) referred to in Section 12.1, plus (b)
an amount equal to the actuarially determined present values at
the date of termination of the Plan of the retirement allowance
under the Retirement Plan of each Member or retired Member
(including their Optional Payees, if any) with respect to his
service with Georgia Power and Light Company and the Company
prior to July 1, 1957, the amount of the Trust to be used and
applied for the benefit of each of such persons shall in no event
be less that (x) multiplied by (y) where (x) equals the amount
which would have been used and applied for the benefit of each
such retired Employee, Employee, or former Employee (including
their Provisional Payees, if any) and Members and retired Members
(including their Optional Payees, if any) had the Plan and the
Retirement Plan each been terminated on the day preceding the
effective date of the merger and consolidation of the Retirement
Plan and the Plan and allocation of the trust funds under the
respective Plans then been effected for the benefit of the
retired Employees, Employees, and former Employees included
therein pursuant to the provisions of Section 12.1 of the Plan
and for the benefit of Members and retired Members and their
beneficiaries pursuant to Section 11.6 of the Retirement Plan and
69
(y) equals the lesser of 100%, or a percentage determined by
dividing the dollar value as of the date of termination of the
Plan of $1 contributed to the Trust on the effective date of the
merger of the Retirement Plan and the Plan, adjusted to reflect
earnings and realized and unrealized gains and losses thereon, by
$1.
The determination of such dollar value shall be made by the
Trustee and its determination shall be conclusive.
To the extent that: (a) any retired Employee or former
Employee (including their Provisional Payees, if any) referred to
in Section 12.1 and (b) any Member or retired Member (or his
Optional Payee) of the Retirement Plan shall, subsequent to the
effective date of the merger and consolidation of the Retirement
Plan and the Plan, have received from the Trust Retirement Income
or retirement allowance, which in either case includes Accrued
Retirement Income or retirement allowance accrued to the
effective date of the merger and consolidation of the Retirement
Plan and the Plan or shall have received the return of
contributions to the Retirement Plan with interest, any amount to
be used or applied for his benefit which is determined in
accordance with this Section 12.3 shall be reduced to take
account of the amount of such payments to him.
70
ARTICLE XIII
Amendment of the Plan
13
13.1 Amendment of the Plan.
(a) The Plan may be amended or modified at any time by the
Board of Directors pursuant to its written resolutions, provided
that no amendment or modification which will substantially
increase the cost of the Plan will be made by the Board of
Directors without approval, at a meeting of the stockholders duly
called for that purpose, by the vote of a majority of the stock
present and entitled to vote at such meeting.
(b) Such amendments and modifications (without limiting the
generality of the foregoing) may, among other things, make any
changes in the Plan which may become appropriate if, for any
reason, the Employer should in the future find it necessary or
desirable not to complete payment of the past service costs of
the Plan in the manner and within the period now contemplated or
should find it necessary or desirable to reduce the amounts of
Future Service contributions to be paid by the Employer after
such amendment or modification. Such amendments and
modifications may also (without limiting the generality of the
foregoing), make any changes necessary or desirable to make the
costs of the Plan eligible for tax deductions or to make the
income of the Trust exempt from taxation or to bring the Plan
into conformity or compliance with ERISA or with governmental
regulations. Notwithstanding the foregoing, no amendment shall
be made which has the effect of decreasing the Accrued Retirement
Income of any Employee, former Employee, or Provisional Payee as
provided under the limitations of Section 411(d)(6) of the Code.
(c) Notwithstanding the foregoing, the Plan may also be
amended by the Management Council of the Company if such
amendment does not involve an increase or decrease in the cost of
the Plan to the Company in excess of a dollar amount to be
determined from time to time by the Board of Directors, is
necessary, proper or desirable in order to comply with laws or
regulations promulgated by any federal or state governmental
authority, or is necessary to maintain the qualification of the
Plan under the Code and ERISA. The Board of Directors of the
Company shall from time to time determine the dollar amount
referenced in the foregoing sentence and may from time to time by
written instruction to the Management Council limit or suspend
Management Council's authority to amend the Plan pursuant to the
foregoing sentence.
71
(d) The Plan may also be amended from time to time for any
reason by the Compensation Committee of the Board of the Company
subject to the limitations on amendments to the Plan set forth in
subsection (a) above. The Board of Directors may from time to
time by written instruction to the Compensation Committee limit
or suspend the Committee's authority to amend the Plan as
permitted by the foregoing sentence.
72
ARTICLE XIV
Special Provisions
14
14.1 Adoption of Plan by other corporations.
(a) Any corporation, whether or not related to the Employer
by function or operation and any affiliate, if such corporation
or affiliate is authorized to do so by a resolution adopted by
the Board of Directors of the Employer, may adopt this Plan as a
separate Plan for all eligible Employees or any separate,
distinct, and identifiable class or group of Employees and the
related Trust Agreement, by action of the board of directors of
such corporation or affiliate. Any such adoption shall be
evidenced by certified copies of the resolutions of the foregoing
board of directors indicating such adoption and by the execution
of the Adoption Agreement by the adopting corporation or
affiliate. Such resolution shall state and define the effective
date of the Plan for the purpose of such adopting corporation
and, for the purpose of Section 415 of the Code, the "limitation
year" as to such corporation. Notwithstanding the foregoing,
however, if the Plan as adopted by an affiliate or other
corporation under the foregoing provision shall fail to receive
the initial approval of the Internal Revenue Service as a
qualified plan, any contributions by such affiliate or other
corporation after payment of all expenses will be returned to
such adopting corporation free of any trust, and the Plan and the
Trust Agreement as to such adopting affiliate or other
corporation shall terminate.
(b) Each adopting affiliate or other corporation shall be
required to use the same Trustee as provided in this Plan.
(c) The Trustee may, but is not required to, commingle,
hold, and invest as one fund all contributions (or any portion
thereof) made by each adopting affiliate or other corporation.
(d) Any contributions made by an affiliate or other
corporation, as provided for in this Plan, shall be paid to and
held by the Trustee for the exclusive benefit of the Employees of
such an affiliate or other corporation and the beneficiaries of
such Employees, subject to all the terms and conditions of this
Plan. On the basis of information furnished by the
administrator, the Trustee shall keep separate books and records
concerning the affairs of each adopting affiliate or other
corporation hereunder.
73
14.2 Exclusive benefit. The Employer intends that the Plan
(including the Trust forming a part thereof) shall be a pension
plan of an employer for the exclusive benefit of its Employees
and their beneficiaries subject to Section 11.3, as provided for
in Section 401 of the Code, and as may be provided for in any
similar provisions of subsequent revenue laws, and that the Trust
shall qualify as an employees' trust which shall be exempt under
Section 501(a) of the Code, and any similar provisions of
subsequent revenue laws, as a trust forming part of such a plan.
14.3 Assignment or alienation. No benefit under the Plan
shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment (either at law or in equity), pledge,
encumbrance, charge, garnishment, levy, execution, or other legal
or equitable process and any attempt so to anticipate, alienate,
sell, transfer, assign, pledge, encumber, charge, garnish, levy,
execute, or enforce other legal or equitable process against the
same shall be void, nor shall any such benefit be in any manner
liable for or subject to the debts, contracts, liabilities,
engagements, or torts of the person entitled to such benefit.
If any Employee or retired Employee or any Provisional Payee
under the Plan is adjudicated bankrupt or attempts to anticipate,
alienate, sell, transfer, assign, pledge, encumber, or charge any
benefit under the Plan or if any action shall be taken which is
in violation of the provisions of the immediately preceding
paragraph, then such benefit shall cease and terminate and in
that event the Retirement Board shall hold or apply the same or
any part thereof to or for the benefit of such Employee or
retired Employee or Provisional Payee in such manner as the
Retirement Board may think proper.
Notwithstanding the above, the Retirement Board and Trustee
shall comply with any "domestic relations order" (as defined in
Section 414(p)(1)(B) of the Code) which is a "qualified domestic
relations order" satisfying the requirements of Section 414(p) of
the Code. The Retirement Board shall establish procedures for
(a) notifying Employees and alternate payees who have or may have
an interest in benefits which are the subject of domestic
relations orders, (b) determining whether such domestic relations
orders are qualified domestic relations orders under Section
414(p) of the Code, and (c) distributing benefits which are
subject to qualified domestic relations orders.
74
14.4 Voluntary undertaking. This Plan is strictly a
voluntary undertaking on the part of the Employer and shall not
be deemed to constitute a contract between the Employer or any
other company and any Employee or to be a consideration for, or
an inducement or condition of, the employment of any Employee.
Nothing contained in this Plan shall be deemed to give any
Employee the right to be retained in the service of the Employer
or to interfere with the right of the Employer to discharge or
retire any Employee at any time. Inclusion under the Plan will
not give any Employee or Provisional Payee any right or claim to
a Retirement Income except to the extent such right is
specifically fixed under the terms of the Plan and there are
funds available therefor in the hands of the Trustee or of any
insurance company which may hold funds of the Plan.
14.5 Top-Heavy Plan requirements. For any Plan Year the
Plan shall be determined to be a Top-Heavy Plan, the Plan shall
provide the following:
(a) the minimum benefit requirement of Section 14.7; and
(b) the vesting requirement of Section 14.8.
14.6 Determination of Top-Heavy status.
(a) For any Plan Year commencing after December 31, 1983,
the Plan shall be determined to be a "Top-Heavy Plan," if, as of
the Determination Date, (1) the Present Value of Accrued
Retirement Income of Key Employees or (2) the sum of the
Aggregate Accounts of Key Employees under this Plan and any plan
of an Aggregation Group, exceeds sixty percent (60%) of the
Present Value of Accrued Retirement Income or the Aggregate
Accounts of all Employees entitled to participate in this Plan
and any Plan of an Aggregation Group.
(b) For Plan Years beginning after December 31, 1986, the
Accrued Retirement Income of a Non-Key Employee shall be
determined under the accrual method under the Plan.
(c) For any Plan Year commencing after December 31, 1983,
the Plan shall be determined to be a "Super Top-Heavy Plan," if,
as of the Determination Date, (1) the Present Value of Accrued
Retirement Income of Key Employees or (2) the sum of the
Aggregate Accounts of Key Employees under this Plan and any plan
in an Aggregation Group, exceeds ninety percent (90%) of the
Present Value of Accrued Retirement Income or the Aggregate
Accounts of all Employees entitled to participate in this Plan
and any plan of an Aggregation Group.
75
For purposes of Sections 14.6(a) and 14.6(b), if any
Employee is a Non-Key Employee for any Plan Year, but such
Employee was a Key Employee for any prior Plan Year, such
Employee's Present Value of Accrued Retirement Income and/ or
Aggregate Account balance shall not be taken into account for
purposes of determining whether this Plan is a Top-Heavy or Super
Top-Heavy Plan (or whether any Aggregation Group which includes
this Plan is a Top-Heavy Group). In addition, for Plan Years
beginning after December 31, 1984, if an Employee or former
Employee has not performed any services for the Employer or any
Affiliated Employer maintaining the Plan at any time during the
five (5) year period ending on the Determination Date, the
Aggregate Account and/or Present Value of Accrued Retirement
Income for such Employee or former Employee shall not be taken
into account for purposes of determining whether this Plan is a
Top-Heavy or Super Top-Heavy Plan.
(d) An Employee's "Aggregate Account" as of the
Determination Date shall be determined under applicable
provisions of the defined contribution plan used in determining
Top-Heavy status.
(e) An "Aggregation Group" shall mean either a Required
Aggregation Group or a Permissive Aggregation Group as
hereinafter determined.
(1) Required Aggregation Group: In determining a
Required Aggregation Group hereunder, each plan of the
Employer in which a Key Employee is a participant, and each
other plan of the Employer which enables any plan in which a
Key Employee participates to meet the requirements of Code
Sections 401(a)(4) or 410, will be required to be
aggregated. Such group shall be known as a Required
Aggregation Group.
In the case of a Required Aggregation Group, each plan
in the group will be considered a Top-Heavy Plan if the
Required Aggregation Group is a Top-Heavy Group. No plan in
the Required Aggregation Group will be considered a
Top-Heavy Plan if the Aggregation Group is not a Top-Heavy
Group.
(2) Permissive Aggregation Group: The Employer may
also include any other plan not required to be included in
the Required Aggregation Group, provided the resulting
group, taken as a whole, would continue to satisfy the
provisions of Code Sections 401(a)(4) or 410. Such group
shall be known as a Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only a plan
that is part of the Required Aggregation Group will be considered
a Top-Heavy Plan if the Permissive Aggregation Group is a
76
Top-Heavy Group. A plan that is not part of the Required
Aggregation Group but that has nonetheless been aggregated as
part of the Permissive Aggregation Group will not be considered a
Top-Heavy Plan even if the Permissive Group is a Top-Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar year shall
be aggregated in order to determine whether such plans are
Top-Heavy Plans.
(f) The "Determination Date" shall mean with respect to any
Plan Year, the last day of the preceding Plan Year, or in the
case of the first Plan Year, the last day of such Plan Year.
(g) A "Key Employee" shall mean any Employee or former
Employee (and his beneficiaries) who, at any time during the Plan
Year or any of the four (4) preceding Plan Years, is:
(1) an officer of the Employer having an annual
compensation from the Employer greater than fifty percent
(50%) of the amount in effect under Code Section
415(b)(1)(A) for any such Plan Year. For purposes of this
Section 14.6(g)(1), only those employers which are
incorporated shall be considered as having officers, and no
more than fifty (50) Employees (or, if lesser, the greater
of three (3) or ten percent (10%) of the Employees) shall be
treated as officers. Annual compensation means compensation
as defined in Section 415(c)(3) of the Code, but including
amounts contributed by the Employer pursuant to a salary
reduction agreement which are excludable from the Employee's
gross income under Section 125, Section 402(a)(8), Section
402(h), or Section 403(b) of the Code.
(2) one of the ten (10) Employees (A) having annual
compensation from the Employer greater than the limitation
in effect under Code Section 415(c)(1)(A) and (B) owning (or
considered as owning within the meaning of Code Section 318)
the largest interests in the Employer. For purposes of this
Section 14.6(g)(2), if two (2) Employees have the same
interest in the Employer, the Employee having the greater
annual compensation from the Employer shall be treated as
having a larger interest.
(3) a "five-percent owner" of the Employer. The term
"five-percent owner" shall mean any person who owns (or is
considered as owning within the meaning of Code Section 318)
more than five percent (5%) of the outstanding stock of the
Employer or stock possessing more than five percent (5%) of
the total combined voting power of all stock of the
Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code
77
Sections 414(b), (c), and (m) shall be treated as separate
employers.
(4) a "one-percent owner" of the Employer having an
annual compensation from the Employer of more than $150,000.
The term "one-percent owner" shall mean any person who owns
(or is considered as owning within the meaning of Code
Section 318) more than one percent (1%) of the outstanding
stock of the Employer or stock possessing more than one
percent (1%) of the total combined voting power of all stock
of the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated
under Code Sections 414(b), (c), and (m) shall be treated as
separate employers. However, in determining whether an
individual has compensation of more than $150,000,
compensation from each employer required to be aggregated
under Code Sections 414(b), (c), and (m) shall be taken into
account.
(h) A "Non-Key Employee" shall mean any Employee who is not
a Key Employee as defined in Section 14.6(g).
(i) An Employee's "Present Value of Accrued Retirement
Income" shall mean as of the Determination Date, the sum of the
following:
(1) the Present Value of his Accrued Retirement Income
as of the most recent valuation occurring within a twelve
(12) month period ending on the Determination Date.
(2) any Plan distributions made within the Plan Year
that includes the Determination Date or within the four (4)
preceding Plan Years. However, in the case of distributions
made after the valuation date and prior to the Determination
Date, such distributions are not included as distributions
for Top-Heavy purposes to the extent that such distributions
are already included in the Employee's Present Value of
Accrued Retirement Income as of the valuation date.
Notwithstanding anything herein to the contrary, all
distributions, including distributions made prior to
January 1, 1984, and distributions under a terminated plan
which if it had not been terminated would have been required
to be included in an Aggregation Group, will be counted.
(3) any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to qualified
deductible employee contributions shall not be considered to
be a part of the Employee's Present Value of Accrued
Retirement Income.
78
(4) with respect to unrelated rollovers and
plan-to-plan transfers (ones which are both initiated by the
Employee and made from a plan maintained by one employer to
a plan maintained by another employer), if this Plan
provides for rollovers or plan-to-plan transfers, it shall
always consider such rollover or plan-to-plan transfer as a
distribution for the purposes of this Section. If this Plan
is the plan accepting such rollovers or plan-to-plan
transfers, it shall not consider such rollovers or
plan-to-plan transfers accepted after December 31, 1983 as
part of the Employee's Present Value of Accrued Retirement
Income. However, rollovers or plan-to-plan transfers
accepted prior to January 1, 1984 shall be considered as
part of the Employee's Present Value of Accrued Retirement
Income.
(5) with respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or made
to a plan maintained by the same employer), if this Plan
provides for rollovers or plan-to-plan transfers, it shall
not be counted as a distribution for purposes of this
Section. If this Plan is the plan accepting such rollover
or plan-to-plan transfer, it shall consider such rollover or
plan-to-plan transfer as part of the Employee's Present
Value of Accrued Retirement Income, irrespective of the date
on which such rollover or plan-to-plan transfer is accepted.
(j) A "Top-Heavy Group" shall mean an Aggregation Group in
which, as of the Determination Date, the sum of:
(1) the Present Value of Accrued Retirement Income of
Key Employees under all defined benefit plans included in
that group, and
(2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum determined for all
Employees.
14.7 Minimum Retirement Income for Top-Heavy Plan Years.
Notwithstanding anything herein to the contrary, for any
Top-Heavy Plan Year, the minimum Accrued Retirement Income
derived from Employer contributions for each Non-Key Employee,
including benefits accrued in years in which the Plan is not a
Top-Heavy Plan, shall equal a percentage of such Non-Key
Employee's highest average compensation not less than the lesser
of: (a) two percent (2%) multiplied by the Employee's number of
Years of Service with the Employer, or (b) twenty percent (20%).
For purposes of the minimum benefit, an Employee's Years of
Service shall exclude (a) Plan Years in which the Plan is not a
Top-Heavy Plan, and (b) Years of Service completed prior to
79
January 1, 1984. The minimum benefit required by this Section
14.7 shall be calculated using the Employee's total compensation
and expressed in the form of a single life annuity (with no
ancillary benefits) beginning at such Employee's Normal
Retirement Date. An Employee's average compensation shall be
based on the five (5) consecutive years for which the Employee
had the highest compensation.
Notwithstanding the foregoing, in any Plan Year in which a
Non-Key Employee is an Employee in both this Plan and a defined
contribution plan, and both such plans are Top-Heavy Plans, the
Employer shall not be required to provide a Non-Key Employee with
both the full separate minimum defined benefit and the full
separate minimum defined contribution plan allocation.
Therefore, if a Non-Key Employee is participating in a defined
contribution plan maintained by the Employer and the minimum
allocation under Code Section 416(c)(2) is allocated to the
Non-Key Employee under such defined contribution plan, the
minimum Accrued Retirement Income provided for above shall not be
applicable, and no minimum benefit shall accrue on behalf of the
Non-Key Employee. Alternatively, the Employer may satisfy the
minimum benefit requirement of Code Section 416(c)(1) for the
Non-Key Employee by providing any combination of benefits and/or
contributions that satisfy the safe harbor rules of Treasury
Regulation Section 1.416-1(m-12).
14.8 Vesting requirements for Top-Heavy Plan Years.
Notwithstanding the provisions of Section 8.1, for any Top-Heavy
Plan Year, the vested portion of an Employee's Accrued Retirement
Income shall be determined on the basis of the Employee's Vesting
Years of Service according to the following schedule:
Years of Service Vested Percentage
less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
The minimum Retirement Income for any Top-Heavy Plan Year shall
not be forfeited during any period for which the payment of the
Employee's Retirement Income is required to be suspended under
Section 5.10 of the Plan.
If in any subsequent Plan Year, the Plan ceases to be a
Top-Heavy Plan, the Retirement Board may, in its sole discretion,
elect to (a) continue to apply this vesting schedule in
determining the vested percentage of an Employee's Accrued
Retirement Income or (b) revert to the vesting schedule in effect
before the Plan became a Top-Heavy Plan. Any such reversion
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shall be treated as a Plan amendment pursuant to the terms of the
Plan. No decrease in an Employee's nonforfeitable percentage may
occur in the event the Plan's status as a Top-Heavy Plan changes
for any Plan Year.
14.9 Adjustments to maximum benefits for Top-Heavy Plans.
(a) In the case of an Employee who is a participant in a
defined benefit plan and a defined contribution plan maintained
by the Employer, and such plans as a group are determined to be
Top-Heavy for any limitation year beginning after December 31,
1983, "1.0" shall be substituted for "1.25" in each place it
appears in the denominators of Fractions A and B, as set forth in
Section 6.5 of the Plan, unless the extra minimum benefit is
provided pursuant to Section 14.9(b). Super Top-Heavy Plans
shall be required at all times to substitute "1.0" for "1.25" in
the denominator of each plan fraction.
(b) If a Key Employee is a participant in both a defined
benefit plan and a defined contribution plan that are both part
of a Top-Heavy Group (but neither of such plans is a Super
Top-Heavy Plan), the defined benefit and defined contribution
fractions set forth in Section 6.5 shall remain unchanged,
provided that in Section 14.7 above, "three percent (3%)" shall
be substituted for "two percent (2%)" and "twenty percent (20%)"
shall be increased by one (1) percentage point (but not more than
ten (10) percentage points) for each Year of Service included in
the computations under Section 14.7.
(c) For purposes of this Section 14.9, if the sum of the
defined benefit plan fraction and the defined contribution
fraction shall exceed 1.0 in any Plan Year for any Employee in
this Plan, the Employer shall eliminate any amounts in excess of
the limits set forth in Section 6.5, pursuant to Section 6.7 of
the Plan.
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ARTICLE XV
Post-retirement Medical Benefits
15
15.1 Definitions. The following words and phraseology as
used herein shall have the following meanings unless a different
meaning is plainly required by the context:
(a) "Pensioned Employee" means a former Employee of the
Employer who is eligible to receive Retirement Income after his
retirement at his Early, Normal, or Deferred Retirement Date, as
applicable, pursuant to the terms of the Plan, but shall not
include any former Employee who terminated his service with the
Employer prior to his Early, Normal, or Deferred Retirement Date
and who is entitled to Retirement Income under the Plan. A
"Pensioned Employee" shall not include a Key Employee, as defined
in Section 14.6(g), or effective January 1, 1991 any Pensioned
Employee of an Employer that has adopted the Plan pursuant to
Section 14.1 hereof but does not provide medical benefits to its
Pensioned Employees.
(b) "Dependents" means the Pensioned Employee's spouse who
is not legally separated or, effective January 1, 1991, divorced
from the Pensioned Employee and the Pensioned Employee's
unmarried children (both natural and legally adopted) within the
prescribed age limit set forth below. The term "children"
includes stepchildren and foster children who reside with the
Pensioned Employee in a regular parent-child relationship and are
dependent upon the Pensioned Employee for principal support and
maintenance. The term Dependent shall not include any person who
is covered, or eligible for coverage, under the Plan as a
Pensioned Employee or who is entitled to any benefits under any
provisions of this Plan because of having been covered as a
Pensioned Employee.
Children shall be considered to be within the prescribed age
limit if they are less than nineteen (19) years of age, except
that unmarried children shall continue to be eligible until the
December 31 coinciding with or next following attainment of age
nineteen (19). Unmarried children age nineteen (19), but less
than age twenty-five (25), shall continue to be within the
prescribed age limit if they are regularly attending school on a
full-time basis. Effective January 1, 1991, for purposes of this
Article XV, an unmarried child shall be considered to be
regularly attending school on a full-time basis if such child is
enrolled in and regularly attending a secondary school or an
accredited vocational school, College or University (as defined
under Exhibit A) and meets the minimum requirements of such
school, College or University to maintain full-time status. This
shall also include an unmarried child who is enrolled as a part-
time student at one of the above institutions while such
individual is taking a course load that is equivalent to the
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minimum course load required for full-time student status at such
institution.
If both a husband and his wife are covered under this Plan
as Pensioned Employees of the Employer, either, but not both, may
elect to cover their eligible children as Dependents.
Any person covered or eligible for coverage under Article XV
as a Pensioned Employee, or under any group medical plan
maintained by the Employer as an Employee, shall not be
considered as a Dependent.
15.2 Eligibility of Pensioned Employees and their
Dependents.
(a) A person who is a Pensioned Employee on January 1, 1989
shall be eligible for coverage as a Pensioned Employee on
January 1, 1989, provided he was covered as an Employee under a
group medical plan maintained by the Employer immediately prior
to the time he became a Pensioned Employee.
(b) An Employee who becomes a Pensioned Employee on or
after January 1, 1989 shall be eligible for coverage on the date
he becomes a Pensioned Employee, provided he was covered as an
Employee under a group medical plan maintained by the Employer
immediately prior to the time he became a Pensioned Employee.
(c) Effective January 1, 1989, a Dependent of a Pensioned
Employee shall be eligible for coverage under this Plan on the
later of (1) the date the Pensioned Employee becomes eligible for
coverage hereunder and (2) the date such person becomes a
Dependent and (3) the date of the payment of any contribution
required of the Pensioned Employee with respect to the Dependent.
(d) Notwithstanding paragraph (c) above, effective January
1, 1991, a Dependent of a Pensioned Employee shall be eligible
for coverage under this Plan on the later of (1) the date the
Pensioned Employee becomes eligible for coverage hereunder and
(2) the date such person becomes a Dependent.
15.3 Medical benefits. The medical benefits provided under
this Article XV by the Employer and each adopting Employer are
set forth in the copy of each such Employer's medical benefits
plan which is attached hereto as Exhibit A and specifically
incorporated herein by reference in its entirety, as may be
amended from time to time. Such medical benefits shall be
subject without limitation to all deductibles, maximums,
exclusions, coordination with Medicare Parts A and B and other
medical plans, and procedures for submitting claims and
initiating legal proceedings provided therein.
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15.4 Termination of coverage.
(a) Coverage of any Pensioned Employee shall cease as
follows:
(1) when Article XV is amended, terminated, or
discontinued in accordance with its terms; or
(2) when the Pensioned Employee fails to make when due
any required contribution; or
(3) as otherwise provided in Exhibit A.
(b) Coverage of any Dependent shall cease as follows:
(1) when Article XV is amended, terminated, or
discontinued in accordance with its terms; or
(2) when the Pensioned Employee fails to make when due
any required contribution; or
(3) as otherwise provided in Exhibit A.
15.5 Continuation of coverage to certain individuals.
(a) Anything in Article XV to the contrary notwithstanding,
a Pensioned Employee, Dependent spouse, or Dependent child shall
be entitled to elect continued medical coverage as provided under
the terms of Article XV upon the occurrence of a Qualifying
Event, provided such Pensioned Employee, Dependent spouse, or
Dependent child was entitled to benefits under Article XV on the
day prior to the Qualifying Event.
(1) "Qualifying Event" means with respect to any
Pensioned Employee, Dependent spouse, or Dependent child, as
appropriate, (A) the death of the Pensioned Employee,
(B) the divorce or legal separation of the Pensioned
Employee from the Dependent spouse, (C) a Dependent child
ceasing to be a Dependent as defined under the requirements
of Article XV, or (D) a proceeding in a case under Title 11,
United States Code, with respect to the Employer.
(b) The Pensioned Employee or Dependent electing continued
coverage under this Section 15.5 shall be required to pay such
monthly contributions as determined by the Employer to be equal
to a reasonable estimate of 102% of the cost of providing
coverage for such period for similarly situated beneficiaries
which (1) is determined on an actuarial basis and (2) takes into
account such factors as the Secretary of the Treasury may
prescribe.
84
(c) The continuation coverage elected by a Pensioned
Employee, Dependent spouse, or Dependent child shall begin on the
date of the Qualifying Event and end not earlier than the first
to occur of the following:
(1) The third anniversary of the Qualifying Event;
(2) The termination of Article XV of the Plan;
(3) The failure of the Pensioned Employee or Dependent
to pay any required contribution when due;
(4) The date on which the Pensioned Employee or
Dependent first becomes, after the date of his election,
(A) a covered employee under any other group health plan
which does not contain any exclusion or limitation with
respect to any preexisting condition of such individual, or
(B) entitled to benefits under Title XVIII of the Social
Security Act; or
(5) The date the Dependent spouse becomes covered
under another group health plan which does not contain any
exclusion or limitation with respect to any preexisting
condition of such Dependent spouse.
(d) Any election to continue coverage under this
Section 15.5 shall be made during the election period
(1) beginning not later than the termination date of coverage by
reason of the Qualifying Event and (2) ending sixty (60) days
following the later of the date described in (1) above or the
date any Pensioned Employee, Dependent spouse, or Dependent child
receives notice of a Qualifying Event from the Employer.
(e) The Employer shall provide each Pensioned Employee and
Dependent spouse, if any, written notice of the rights provided
in this Section 15.5. The Pensioned Employee or Dependent spouse
is required to notify the Employer within thirty (30) days of any
Qualifying Event described in Section 15.5(a)(1)(B) or (C), and
the Employer shall provide the Dependent spouse or Dependent
child written notice of the rights provided in this Section 15.5
within fourteen (14) days thereafter. Notice to the Dependent
spouse shall be deemed notice to each Dependent child residing
with such spouse at the time such notification is made.
15.6 Contributions to fund medical benefits. Any
contributions which the Employer deems necessary to provide the
medical benefits under Article XV will be made from time to time
by or on behalf of the Employer, and contributions shall be
required of the Pensioned Employees to the Employer's medical
benefit plan in amounts determined in the sole discretion of the
Employer from time to time. All Employer contributions shall be
made to the Trustee under the Trust Agreement provided for in
85
Article XI and shall be allocated to a separate account
maintained solely to fund the medical benefits provided under
Article XV. The Employer shall designate that portion of any
contribution to the Plan allocable to the funding of medical
benefits under this Article XV. In no event at any time prior to
the satisfaction of all liabilities under this Article XV shall
any part of the corpus or income of such separate account be used
for, or diverted to, purposes other than for the exclusive
purpose of providing benefits under this Article XV. Effective
January 1, 1991, subject to the requirements of Code Section 420,
the Employer shall have the right, in its sole discretion, to
transfer any excess corpus or income of the Plan allocated to
fund Retirement Income to the separate account to fund medical
benefits under this Article XV.
The amount of contributions to be made by or on behalf of
the Employer for any Plan Year shall be determined in accordance
with any generally accepted actuarial method which is reasonable
in view of the provisions and coverage of Article XV, the funding
medium, and any other applicable considerations. However, the
Employer is under no obligation to make any contributions under
Article XV after Article XV is terminated, except to fund claims
for medical expenses incurred prior to the date of termination.
The medical benefits provided under this Article XV, when
added to any life insurance protection provided under the Plan,
shall be subordinate to the retirement benefits provided under
the Plan.
Subject to any transitional rule applicable to contributions
made under this Article XV prior to January 1, 1990, effective
October 3, 1989, the aggregate of costs of the medical benefits
(measured from January 1, 1987) plus the costs of any life
insurance protection shall not exceed twenty-five percent (25%)
of the sum of the aggregate of costs of retirement benefits under
the Plan (other than past service credits), the aggregate of
costs of the medical benefits and the costs of any life insurance
protection (both measured from January 1, 1987). The aggregate
of costs of retirement benefits, other than for past service
credits, and the aggregate of costs of medical benefits provided
under the Plan shall be determined using the projected unit
credit funding method and the actuarial assumptions set forth in
Exhibit B, a copy of which is attached hereto and specifically
incorporated herein by reference in its entirety, and as may be
amended from time to time by the committee responsible for
providing a procedure for establishing and carrying out a funding
policy and method for the Plan pursuant to Section 10.9 of the
Plan. Contributions allocated to any separate account
established for a Pensioned Employee from which medical benefits
will be payable solely to such Pensioned Employee or his
Dependents shall be treated as an Annual Addition as defined in
86
Section 6.6(a) to any defined contribution plan maintained by the
Employer.
15.7 Pensioned Employee contributions. It shall be the sole
responsibility of the Pensioned Employee to notify the Employer
promptly in writing when a change in the amount of the Pensioned
Employee's contribution is in order because a Dependent has
become ineligible for coverage under this Article XV. No person
shall become covered under this Article XV for whom the Pensioned
Employee has not made the required contribution. Any
contribution paid by a Pensioned Employee for any person after
such person shall have become ineligible for coverage under this
Article XV shall be returned upon written request but only
provided such written request by or on behalf of the Pensioned
Employee is received by the Employer within ninety (90) days from
the date coverage terminates with respect to such ineligible
person.
15.8 Amendment of Article XV. The Employer reserves the
right, through action of its Board of Directors, to amend Article
XV (including Exhibit A) pursuant to Section 13.1 or the Trust
without the consent of any Pensioned Employee, or his Dependents,
provided, however, that no amendment of this Article or the Trust
shall cancel the payment or reimbursement of expenses for claims
already incurred by a Pensioned Employee or his Dependent prior
to the date of any amendment, nor shall any such amendment
increase the duties and obligations of the Trustee except with
its consent. This Article XV, as set forth in the Plan document,
is not a contract and non-contributory benefits hereunder are
provided gratuitously, without consideration from any Pensioned
Employee or his Dependents. The Employer makes no promise to
continue these benefits in the future and rights to future
benefits will never vest. In particular, retirement or the
fulfillment of the prerequisites for a retirement benefit
pursuant to the terms of the Plan or under the terms of any other
employee benefit plan maintained by the Employer shall not confer
upon any Pensioned Employee or Dependents any right to continued
benefits under this Article XV.
15.9 Termination of Article XV. Although it is the
intention of the Employer that this Article shall be continued
and the contribution shall be made regularly thereto each year,
the Employer, by action of its Board of Directors pursuant to
Section 13.1, may terminate this Article XV or permanently
discontinue contributions at any time in its sole discretion.
This Article XV, as set forth in the Plan document, is not a
contract and non-contributory benefits hereunder are provided
gratuitously, without consideration from any Pensioned Employee
or his Dependents. The Employer makes no promise to continue
these benefits in the future and rights to future benefits will
never vest. In particular, retirement or the fulfillment of the
prerequisites for a retirement benefit pursuant to the terms of
87
the Plan or under the terms of any other employee benefit plan
maintained by the Employer shall not confer upon any Pensioned
Employee or his Dependents any right to continued benefits under
this Article XV. Effective January 1, 1991, in the event the
Employer or any adopting Employer shall terminate its provision
of the medical benefits described in Exhibit A to Section 15.3 of
the Plan to its Pensioned Employees, this Article XV of the Plan
shall automatically terminate with respect to the Pensioned
Employees and their Dependents of such Employer without the
requirement of any action by such Employer.
15.10 Reversion of assets upon termination. Upon the
termination of this Article XV and the satisfaction of all
liabilities under this Article XV, all remaining assets in the
separate account described in Section 15.6 shall be returned to
the Employer.
88
ARTICLE XVI
Early Retirement Incentive Program
16
16.1 Eligibility. This Article XVI is effective as of March
1, 1994. All Employees of the Employer other than Nuclear
Generation Employees, who: (a) are classified on the Employer's
payroll as actively employed on the last day preceding their
Retirement Date; (b) who have or will complete ten (10) or more
years of Accredited Service on or before December 31, 1994; and
(c) have or will attain age fifty-five (55) on or before December
31, 1994 ("Eligible Employee") shall be eligible to receive the
benefits described in Section 16.3 below if, during the period
from April 1, 1994 through 5:00 p.m. EDT on April 30, 1994, such
Employee elects to retire by filing an election form and waiver
agreement with the Retirement Board no later than 5:00 p.m. EDT
on April 30, 1994 and allows such election form and waiver
agreement to become effective. In the event an Eligible Employee
does not submit an election form and waiver agreement by 5:00
p.m. EDT on April 30, 1994 and allow such Agreement to become
effective, the Retirement Board shall interpret such failure as
an election not to receive the benefits provided under this
Article XVI.
16.2 Retirement Dates of Eligible Employees.
(a) Employees who satisfy eligibility criteria by May 31,
1994. The Early Retirement Date of an Eligible Employee who
elects to retire in accordance with the provisions of this
Article XVI and who is age fifty-five (55) or older with ten (10)
or more years of Accredited Service by May 31, 1994 shall be June
1, 1994.
(b) Employees who satisfy eligibility criteria subsequent
to May 31, 1994. The Early Retirement Date of an Eligible
Employee who elects to retire in accordance with the provisions
of this Article XVI and who attains age fifty-five (55) or older
with ten (10) or more years of Accredited Service subsequent to
May 31, 1994, but prior to December 31, 1994, shall be the first
day of the first month following the date such Eligible Employee
satisfies the age and service criteria described in this Section
16.2(b).
(c) Exception for critical projects. Notwithstanding the
foregoing, in the sole discretion of the Employer, the Early
Retirement Date of an Eligible Employee may be postponed beyond
the Eligible Employee's Early Retirement Date determined in
accordance with the provisions of paragraph (a) or (b) above,
whichever is applicable, provided, however, that no Eligible
Employee's Early Retirement Date shall be postponed beyond May
31, 1995.
89
16.3 Early retirement incentive program benefits.
(a) Early retirement replacement benefit. In addition to
any Retirement Income to which an Eligible Employee may be
entitled in accordance with the provisions of Article V of the
Plan, if an Eligible Employee retires from the service of the
Employer in accordance with the provisions of this Article XVI
prior to his Normal Retirement Date and elects to commence his
Retirement Income prior to his Normal Retirement Date pursuant to
the provisions of Section 5.7 of the Plan, the amount of
Retirement Income to be received by such Eligible Employee under
Section 5.5 shall not be reduced due to early commencement of
such Retirement Income.
(b) Social Security Bridge Benefit. An Eligible Employee
who retires in accordance with the provisions of this Article XVI
prior to the attainment of age sixty-two (62) shall be paid an
amount equal to the estimated monthly Social Security benefits
such Eligible Employee would become entitled to beginning at age
sixty-five (65) based upon the Social Security Act in effect at
the time of such Employee's retirement and such Eligible
Employee's estimated Social Security earnings while employed with
the Employer or an Affiliated Employer through his Early
Retirement Date. This "Social Security Bridge Benefit" shall be
paid monthly commencing on the Employee's Early Retirement Date
(determined in accordance with Section 16.2 above) and shall
continue to be paid on the first day of each month thereafter up
to and including the first day of the month in which such
Eligible Employee attains age sixty-two (62).
(c) Provisional Payees. The benefits described in this
Section 16.3 shall be subject to and administered in accordance
with the provisions of Article VII of the Plan; provided,
however, that in the event of the Eligible Employee's death prior
to his sixty-second (62nd) birthday, one hundred percent (100%)
of the monthly Social Security Bridge Benefit to which the
Eligible Employee is entitled shall continue to be paid to his
Provisional Payee through the first day of the month in which
such Eligible Employee would have attained age sixty-two (62) had
the Eligible Employee not died.
16.4 Restoration to service. Notwithstanding any provisions
of Section 5.10 to the contrary, in the event an Eligible
Employee who retires in accordance with the provisions of this
Article XVI subsequently returns to the service of the Employer
or any Affiliated Employer, all benefits payable to such Eligible
Employee under this Article XVI shall cease and upon such
Eligible Employee's subsequent retirement, the Eligible Employee
shall receive the Actuarial Equivalent of the greater of:
90
(a) the Retirement Income the Eligible Employee would
receive under the Plan based upon his Accredited Service and age
at the date of his subsequent retirement, reduced by the
Actuarial Equivalent of any Retirement Income, including any
amount payable under Section 16.3(b), which the Employee received
prior to his reemployment; or
(b) the Retirement Income the Eligible Employee was
actually receiving prior to his reemployment plus any amounts
payable under Section 16.3(b).
IN WITNESS WHEREOF, the Board of Directors of Georgia Power
Company through its authorized officers has adopted this
amendment and restatement of the Pension Plan for Employees of
Georgia Power Company this day of , , to
be effective January 1, 1989.
GEORGIA POWER COMPANY
By:
Its:
ATTEST:
By:
Its:
[CORPORATE SEAL]
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