Exhibit 10(f)15
EMPLOYEES' RETIREMENT PLAN
OF
SAVANNAH ELECTRIC AND POWER COMPANY
As Amended and Restated Effective January 1, 1989
EMPLOYEES' RETIREMENT PLAN
OF
SAVANNAH ELECTRIC AND POWER COMPANY
As Amended To and Including
TABLE OF CONTENTS
Page No.
ARTICLE 1 - DEFINITIONS . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 - RETIREMENT ANNUITIES PURCHASED UNDER
GROUP ANNUITY CONTRACT AND CHANGE OF FUNDING . . . 9
ARTICLE 3 - MEMBERSHIP . . . . . . . . . . . . . . . . . . . 10
ARTICLE 4 - SERVICE . . . . . . . . . . . . . . . . . . . . . 12
4.01 Continuous Service . . . . . . . . . . . . . . 12
4.02 Credited Service . . . . . . . . . . . . . . . 12
4.03 Breaks in Service . . . . . . . . . . . . . . 14
4.04 Disabled Members . . . . . . . . . . . . . . . 15
4.05 Service with Certain Other Employers . . . . . 15
ARTICLE 5 - BENEFITS . . . . . . . . . . . . . . . . . . . . 17
5.01 Normal and Late Retirement . . . . . . . . . . 17
5.02 Early Retirement . . . . . . . . . . . . . . . 19
5.03 Termination of Employment . . . . . . . . . . 20
5.04 Adjustment of Retirement Allowance for Social
Security Benefits . . . . . . . . . . . . . . 21
5.05 Restoration of Retired Member or Former
Member to Service . . . . . . . . . . . . . . 21
5.06 Additional Monthly Benefit . . . . . . . . . . 24
5.07 Written Application . . . . . . . . . . . . . 25
ARTICLE 6 - LIMITATIONS ON BENEFITS . . . . . . . . . . . . . 26
6.01 Maximum Benefits . . . . . . . . . . . . . . . 26
ARTICLE 7 - DISTRIBUTION OF BENEFITS . . . . . . . . . . . . 32
7.01 Surviving Spouse Benefit . . . . . . . . . . . 32
7.02 Qualified Joint and Survivor Annuity . . . . . 32
7.03 Qualified Preretirement Survivor Annuity . . . 32
7.04 Definitions . . . . . . . . . . . . . . . . . 36
7.05 Notice Requirements . . . . . . . . . . . . . 37
i
7.06 Transitional Rules . . . . . . . . . . . . . . 38
7.07 Alternative Forms of Distribution . . . . . . 38
7.08 Cash-Out of Annuity Benefits . . . . . . . . . 39
7.09 Commencement of Benefits . . . . . . . . . . . 40
7.10 TEFRA 242(b)(2) Transitional Rules . . . . . . 42
7.11 Requirement for Direct Rollovers . . . . . . . 42
ARTICLE 8 - CONTRIBUTIONS . . . . . . . . . . . . . . . . . . 44
ARTICLE 9 - ADMINISTRATION OF THE PLAN . . . . . . . . . . . 45
ARTICLE 10 - MANAGEMENT OF FUNDS . . . . . . . . . . . . . . 48
ARTICLE 11 - CERTAIN RIGHTS AND LIMITATIONS . . . . . . . . . 49
ARTICLE 12 - NON-ALIENATION OF BENEFITS . . . . . . . . . . . 52
ARTICLE 13 - AMENDMENTS . . . . . . . . . . . . . . . . . . . 53
ARTICLE 14 - CONSTRUCTION . . . . . . . . . . . . . . . . . . 54
ARTICLE 15 - TOP-HEAVY PROVISIONS . . . . . . . . . . . . . . 55
15.01 Top-Heavy Plan Requirements . . . . . . . . . 55
15.02 Determination of Top-Heavy Status . . . . . . 55
15.03 Minimum Retirement Income for Top-Heavy Plan
Years . . . . . . . . . . . . . . . . . . . . 60
15.04 Vesting Requirements for Top-Heavy Plan
Years . . . . . . . . . . . . . . . . . . . . 61
15.05 Adjustments to Maximum Benefits for Top-Heavy
Plans . . . . . . . . . . . . . . . . . . . . 62
ARTICLE 16 - EARLY RETIREMENT INCENTIVE PROGRAM . . . . . . . 64
16.01 Eligibility . . . . . . . . . . . . . . . . . 64
16.02 Benefits . . . . . . . . . . . . . . . . . . . 64
16.03 Restoration to Service . . . . . . . . . . . . 65
ARTICLE 17 - RETIREE MEDICAL BENEFITS . . . . . . . . . . . . 66
17.01 Provision of Medical Benefits . . . . . . . . 66
17.02 Eligibility for Medical Benefits . . . . . . . 66
17.03 Contributions to the Medical Benefits
Account . . . . . . . . . . . . . . . . . . . 67
17.04 Medical Benefits Covered by the System . . . . 68
17.05 Amendment and Termination of Medical
Benefits . . . . . . . . . . . . . . . . . . . 69
17.06 Definitions . . . . . . . . . . . . . . . . . 69
ii
The Employees' Retirement Plan of Savannah Electric and
Power Company, as amended and restated effective January 1, 1989,
(the "Plan") is a continuation and modification of the Retirement
Annuity Plan for Employees of Savannah Electric and Power Company
effective as of April 1, 1947, which was last amended and
restated effective January 1, 1986. The Plan, except as
specifically provided herein and hereinafter set forth, is
designed to provide a retirement Allowance to eligible employees
and their Spouses following the termination of their employment
with Savannah Electric and Power Company (the "Company"). It is
intended that the Plan and the Employees' Retirement Plan of
Savannah Electric and Power Company Trust (the "Trust"), meet all
the requirements of the Internal Revenue Code of 1986 (the
"Code"), and that the Plan and Trust shall be interpreted,
wherever possible, to comply with the terms of the Code and the
Employee Retirement Income Security Act of 1974 ("ERISA"), and
all formal regulations and rulings issued under the Code and
ERISA.
ARTICLE 1 - DEFINITIONS
i
1.01 "Accrued Benefit" shall mean the amount of retirement
Allowance computed at a specific date, in accordance
with Article 5, based on Compensation and Credited
Service to such date.
1.02 "Affiliated Company" shall mean any company not
participating in the Plan which is a Member of a
controlled group of corporations (determined under Code
Section 1563(a) without regard to Sections 1563(a)(4)
and (e)(3)(C)) which also includes as a member the
Company, except that with respect to Section 6.01 "more
than 50 percent" shall be substituted for "at least 80
percent" where it appears in Code Section 1563(a)(1).
The term "Affiliated Company" shall also include any
trade or business under common control (as defined in
Code Section 414(c)) with the Company, or a Member of
an affiliated service group (as defined in Code
Section 414(m)) which includes the Company or any other
entity required to be aggregated with the Company
pursuant to regulations under Code Section 414(o).
1.03 "Allowance" shall mean payments under the Plan payable
as provided in Article 5 or Article 7.
1.04 "Annuity Starting Date" shall mean the first day of the
first period for which an amount is paid as an annuity
or in any other form.
1.05 "Board of Directors" shall mean the Board of Directors
of Savannah Electric and Power Company or the board of
directors of any successor.
1
1.06 "Break in Service" shall mean a period which
constitutes a break in an Employee's Continuous
Service, as provided in Section 4.03.
1.07 "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
1.08 "Company" shall mean Savannah Electric and Power
Company or any successor by merger, purchase or
otherwise, with respect to its employees; or any other
company participating in the Plan as provided in
Section 4.05, with respect to its employees.
1.09 "Compensation" shall mean the actual remuneration paid
to an employee for services rendered to the Company,
determined prior to any pre-tax contributions under a
"qualified cash or deferred arrangement" (as defined
under Code Section 401(k) and its applicable
regulations) or under a "cafeteria plan" (as defined
under Code Section 125 and its applicable regulations),
including payments made under any short term disability
plan maintained by the Company which shall equal the
rate of Compensation of the Member at the time of
disability, but excluding any bonuses, pay for
overtime, compensation deferred under any deferred
compensation plan or arrangement, separation pay,
imputed income and relocation pay, and excluding the
Company's cost for any public or private employee
benefit plan, including this Plan, under rules
uniformly applicable to all employees similarly
situated, provided further, effective as of January
1, 1989, any workers' compensation received by an
employee shall be excluded from "compensation" for
purposes of determining his benefit under the Plan.
For purposes of this Section 1.09, actual remuneration
means regular straight time pay, straight time
differential pay, substitution straight time pay,
substitution flat rate pay, earned vacation pay and the
difference between military pay and regular straight
time pay a Member would have been paid if such Member
had been working for the Company.
Notwithstanding the foregoing, effective as of January
1, 1989, compensation taken into account for any
purpose under the Plan shall not exceed $200,000 per
year, provided that the imposition of the limit on
compensation shall not reduce a Member's Accrued
Benefit below the amount of Accrued Benefit determined
as of December 31, 1988. As of January 1 of each
calendar year on and after January 1, 1990, the
applicable limitation as determined by the Commissioner
2
of the Internal Revenue Service for that calendar year
shall become effective as the maximum compensation to
be taken into account for Plan purposes for that
calendar year in lieu of the $200,000 limitation set
forth in the preceding sentence.
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 the Omnibus Budget Reconciliation Act of
1993 ("OBRA `93") annual compensation limit. The OBRA
`93 annual compensation limit is $150,000, as adjusted
by the Commissioner for increases in the cost of living
in accordance with Code Section 401(a)(17)(B). The
cost of living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over
which compensation is determined (determination period)
beginning in such calendar year. If a determination
period consists of fewer than 12 months, the OBRA `93
annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of
months in the determination period, and the denominator
of which is 12.
For Plan Years beginning on or after January 1, 1994,
any reference in this Plan to the limitation under Code
Section 401(a)(17) shall mean the OBRA `93 annual
compensation limit set forth in this provision.
If compensation for any prior determination period is
taken into account in determining an Employee's
benefits accruing in the current Plan Year, the
compensation for that prior determination period is
subject to the OBRA `93 annual compensation limit in
effect for that prior determination period. For this
purpose, for determination periods beginning on or
after January 1, 1994, the OBRA `93 annual compensation
limit is $150,000.
For purposes of this Section 1.09, the rules of Code
Section 414(q) shall apply in determining the adjusted
$150,000 limitation above, 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 $150,000
limitation is exceeded, then the limitation shall be
prorated among the affected individuals in proportion
to each individual's compensation determined under this
3
Section 1.09 prior to the application of this
limitation.
1.10 Effective January 1, 1989, "Computation Year" means the
calendar year. Prior to January 1, 1989, "Computation
Year" meant the 12-month period from April 1 to March
31.
1.11 "Continuous Service" shall mean service recognized for
purposes of determining eligibility for membership in
the Plan and eligibility for certain benefits under the
Plan, determined as provided in Section 4.01.
1.12 "Credited Service" shall mean service recognized for
purposes of computing the amount of any benefit under
the Plan, determined as provided in Section 4.02.
1.13 "Effective Date of the Plan" as amended, shall mean
April 1, 1959. The "Amendment and Restatement
Effective Date" shall mean January 1, 1989.
1.14 "Employee" shall mean any person regularly employed by
the Company who receives regular stated salary, or
wages paid directly by the Company as (a) a regular
full-time employee, (b) a regular part-time employee,
(c) a cooperative education employee or (d) a temporary
employee paid directly or indirectly by the Company.
For purposes of this Section 1.14, temporary employee
means a full-time or part-time employee who provides
services to the Company for a stated period of time
after which period such employee will be terminated
from employment. The term Employee shall also include
Leased Employees within the meaning of Code
Section 414(n)(2). Notwithstanding the foregoing, if
such Leased Employees constitute less than twenty
percent (20%) of the Employer's non-highly compensated
workforce within the meaning of Code
Section 414(n)(5)(C)(ii), the term Employee shall not
include those Leased Employees covered by a plan
described in Code Section 414(n)(5).
1.15 "Equivalent Actuarial Value" shall mean equivalent
value when computed at 6 per centum per annum on the
basis of the 1971 Group Annuity Mortality Table (Male)
for Members, and 1971 Group Annuity Mortality Table
(Female) for contingent annuitants under optional forms
of Allowances.
1.16 "Fund" shall mean the trust fund established under the
trust agreement with the Trustee from which the amounts
of retirement Allowances are to be paid.
4
1.17 "Group Annuity Contract" shall mean Group Annuity
Contract No. AC 766 issued by The Equitable Life
Assurance Society of the United States to Savannah
Electric and Power Company.
1.18 "Hour of Service" means, with respect to any applicable
computation period:
(a) each hour for which the Employee is paid or
entitled to payment for the performance of duties
for the Company or an Affiliated Company;
(b) each hour for which an Employee is paid or
entitled to payment by the Company or an
Affiliated Company on account of a period during
which no duties are performed, whether or not the
employment relationship has terminated, due to
vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or
leave of absence, but not more than 501 hours for
any single continuous period;
(c) each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed
to by the Company or an Affiliated Company,
excluding any hour credited under (a) or (b),
which shall be credited to the computation period
or periods to which the award, agreement or
payment pertains, rather than to the computation
period in which the award, agreement or payment is
made; and
(d) solely for purposes of determining whether an
Employee has incurred a Break in Service under the
Plan, each hour for which an Employee would
normally be credited under Paragraphs (a) or (b)
above during a period of Parental Leave but not
more than 501 hours for any single continuous
period. However, the number of hours credited to
an Employee under this Paragraph (d) during the
computation period in which the Parental Leave
began, when added to the hours credited to an
Employee under Paragraphs (a) through (c) above
during that computation period, shall not exceed
501. If the number of hours credited under this
Paragraph (d) for the computation period in which
the Parental Leave began is zero, the provisions
of this Paragraph (d) shall apply as though the
Parental Leave began in the immediately following
computation period.
5
No hours shall be credited on account of any period
during which the Employee performs no duties and
receives payment solely for the purpose of complying
with unemployment compensation, workers' compensation
or disability insurance laws. The Hours of Service
credited shall be determined as required by Title 29 of
the Code of Federal Regulations, Sections 2530.200b-
2(b) and (c).
1.19 "Leased Employee" means any person as so defined in
Code Section 414(n). In the case of a person who is a
Leased Employee immediately before or after a period of
service as an Employee, the entire period during which
he has performed services for the Company as a Leased
Employee shall be counted as Continuous Service for
purposes of determining eligibility for participation
and vesting, to the extent such service would be
recognized with respect to other employees under the
Plan; however, he shall not, by reason of that status,
be eligible to become a Member of the Plan.
1.20 "Member" shall mean any person included in the
membership of the Plan as provided in Article 3.
1.21 "Normal Retirement Date" shall mean the first day of
the calendar month next following the 65th anniversary
of an Employee's birth.
1.22 "Parental Leave" means a period commencing on or after
January 1, 1985, in which the Employee is absent from
work because of the pregnancy of the Employee, the
birth of a child of the Employee or the placement of a
child with the Employee in connection with adoption
proceedings, or for purposes of caring for that child
for a period beginning immediately following such birth
or placement.
1.23 "Plan" shall mean Employees' Retirement Plan of
Savannah Electric and Power Company as previously
described in the Group Annuity Contract and as
described and amended herein or as hereafter amended.
1.24 "Plan Year" shall mean the 12-month period from January
1 to December 31.
1.25 "Qualified Joint and Survivor Annuity" shall mean an
annuity of Equivalent Actuarial Value to the Allowance
otherwise payable, providing for a reduced Allowance
payable to the Member during his life, and after his
death providing that one-half of that reduced Allowance
will continue to be paid during the life of, and to,
6
the spouse to whom he was married at his Annuity
Starting Date.
1.26 "Qualified Preretirement Survivor Annuity" shall mean
an annuity for the life of a Surviving Spouse
calculated in accordance with Section 7.03.
1.27 "Retirement Annuity" shall mean the amount of the
annuity purchased under the Group Annuity Contract as
provided by that Contract at actual retirement date, at
or after the attainment of age 65, prior to any
conversion to a contingent annuity.
1.28 "Retirement Committee" shall mean the administrator of
the Plan as provided in Article 9. The Administrative
Benefits Committee of the Company shall comprise the
Retirement Committee for purposes of administration of
the Plan.
1.29 "Social Security Benefit" shall mean the annual primary
old-age insurance benefit which the Member is entitled
to receive under Title II of the Social Security Act as
in effect on the date he retires or otherwise
terminates employment, or would be entitled to receive
if he did not disqualify himself by receiving the same
by entering into covered employment or otherwise. In
the case of early retirement, the Social Security
Benefit shall be computed on the assumption that he
will receive no income after early retirement and
before age 65 which would be treated as wages for
purposes of the Social Security Act. In the case of
vested retirement, the Social Security Benefit shall be
computed on the assumption that he will continue to
receive compensation until age 65 which would be
treated as wages for purposes of the Social Security
Act at the same rate as in effect on his termination of
service.
In computing any Social Security Benefit, no wage index
adjustment or cost-of-living adjustment shall be
assumed with respect to any period after the end of the
calendar year before the year in which the Member
retires or terminates service. The Member's Social
Security Benefit shall be determined on the basis of
the Employee's actual earnings, where available from
Company records, in conjunction with a salary increase
assumption based on the actual yearly change in
national average wages as determined by the Social
Security Administration for all other years prior to
retirement or other termination of employment with the
Company where actual earnings are not so available.
If, within three months after the later of the date of
retirement or other termination of employment or the
date on which a Member is notified of the Allowance to
which he is entitled, the Member provides documentation
7
as to his actual earnings history with respect to those
prior years, his Allowance shall be redetermined using
the actual earnings history, if the recalculation would
result in an increased benefit. Any adjustment to
Allowance payments shall be made retroactively.
1.30 The term "Spouse or Surviving Spouse" shall mean the
spouse or surviving spouse of a Member, provided that a
former Spouse will be treated as the spouse or
surviving spouse and a current spouse will not be
treated as the spouse or surviving spouse to the extent
provided under a qualified domestic relations order as
described in Code Section 414(p).
1.31 "Suspendible Month" means a month in which the Member
completes at least 40 hours of service with the
Company.
1.32 "Trustee" shall mean the trustee or trustees by whom
the funds of the Plan are held as provided in Article
10.
8
ARTICLE 2 - RETIREMENT ANNUITIES PURCHASED UNDER
GROUP ANNUITY CONTRACT AND CHANGE OF FUNDING
ii
All Retirement Annuities payable under the Plan as in
effect prior to April 1, 1959 with respect to service thereunder
prior to such date, have been purchased from The Equitable Life
Assurance Society of the United States pursuant to the terms of
Group Annuity Contract No. AC 766.
Effective as of April 1, 1959, the purchase of
Retirement Annuities under the Group Annuity Contract was
discontinued in accordance with the terms and provisions of such
Contract. Subject to the provisions of the Plan, with respect to
service under the Plan from and after April 1, 1959, and as a
supplement to the Retirement Annuities purchased under the Group
Annuity Contract for service prior to April 1, 1959, retirement
Allowances will be provided by means of contributions to the Fund
by the Company. Such retirement Allowances will be in addition
to Retirement Annuities purchased as described in the preceding
paragraph with respect to services prior to April 1, 1959.
The rights of Members of the Retirement Annuities
purchased for them under the Group Annuity Contract with respect
to service prior to April 1, 1959 will not be adversely affected
by the discontinuance of such purchases and such Retirement
Annuities will be payable by The Equitable Life Assurance Society
of the United States in accordance with the terms, conditions and
provisions of the Group Annuity Contract.
9
ARTICLE 3 - MEMBERSHIP
iii
3.01 Every Employee in Company service on January 1, 1985,
who was a Member on December 31, 1984, shall continue
to be a Member of the Plan on and after January 1,
1985, provided he remains eligible under the terms of
the Plan.
3.02 Every other Employee on January 1, 1985, and every
person becoming an Employee after that date shall
become a Member on the first day of the calendar month,
beginning with January 1, 1985, coincident with or next
following (i) the date he completes one year of
Continuous Service or (ii) the 21st anniversary of his
birth, whichever is later. For this purpose, a year of
Continuous Service shall be a 12-month period during
which an Employee completes at least 1,000 hours
commencing with the date of employment, or if in such
period he has not completed at least 1,000 hours,
commencing with the first day of the Computation Year
after the date of his employment. If an Employee has
incurred a one-year Break in Service prior to becoming
eligible for membership, any Continuous Service prior
the break shall be disregarded in determining
eligibility for membership unless he shall complete at
least one year of Continuous Service following the
Break in Service; provided that an Employee's
Continuous Service prior to the break shall not be
recognized for purposes of determining his eligibility
for membership if his consecutive number of one-year
Breaks in Service equal or exceed the greater of
(i) five or (ii) his aggregate years of Continuous
Service prior to the Break in Service.
3.03 An Employee who is represented by a collective
bargaining agent may participate in the Plan if the
representative(s) of his bargaining unit and the Compa-
ny mutually agree to participation in the Plan by the
members of his bargaining unit.
3.04 An Employee's membership in the Plan shall terminate
only if he dies or his employment with the Company
terminates other than by reason of retirement or
termination with vested benefits under the Plan.
Membership shall be continued during a period while on
leave of absence from service without pay approved by
the Company, but no benefit credit shall be allowed
with respect to such period unless credit is allowed
for service in the Armed Forces of the United States as
provided in Section 4.03(c). Membership shall be
continued during a period of disability for which
Continuous Service is granted as provided in Section
4.04.
10
3.05 In the event a Member ceases to participate because he
enters an ineligible class under Article III and
becomes ineligible to participate, but has not incurred
a break in service under Section 4.03(a), such Employee
will participate as of the first day of the month
coinciding with or next following his return to an
eligible class of Employees. If such Employee incurs a
break in service under Section 4.03(a), eligibility
will be determined under Section 3.02. In the event an
Employee who is not in an eligible class to participate
enters an eligible class, such Employee will
participate as of the first day of the month coinciding
with or next following his employment if he has
satisfied Section 3.02 and would have otherwise
previously been eligible to participate in the Plan.
3.06 Subject to Section 3.05, if an Employee's membership in
the Plan terminates and he again becomes an Employee,
he shall be considered a new Employee for all purposes
of the Plan, except as provided in Section 5.05.
3.07 Notwithstanding any other provision of this Article 3,
Leased Employees shall not be eligible to participate.
In addition, temporary employees as defined in Section
1.14 of the Plan who were not participating in the Plan
as temporary employees prior to October 13, 1994, shall
not be eligible to participate in the Plan.
3.08 An Employee may, subject to the approval of the
Retirement Committee, elect voluntarily not to
participate in the Plan. The election not to
participate must be communicated in writing to the
Retirement Committee effective on an Employee's date of
hire or anniversary thereof.
11
ARTICLE 4 - SERVICE
iv
4.01 Continuous Service
(a) Effective January 1, 1988, except as hereinafter
provided, all service performed as an Employee of
the Company or an Affiliated Company shall be
Continuous Service for Plan purposes. If an
Employee completes at least 1,000 Hours of Service
in any Computation Year, he shall receive credit
for a full year of Continuous Service. If an
Employee completes fewer than 1,000 Hours of
Service in any Computation Year, no Continuous
Service shall be recognized for such Computation
Year.
(b) Any Employee employed by the Company on or after
January 1, 1989 shall, due to the change in the
definition of Computation Year, receive two years
of Continuous Service for vesting purposes for the
Computation Years (1) beginning April 1, 1988 and
ending on March 31, 1989; and (2) beginning
January 1, 1989 and ending on December 31, 1989,
provided that the Employee completes 1,000 Hours
of Service in each of those two Computation Years.
(c) Any person employed by the Company on March 31,
1976 shall receive Continuous Service for service
performed before that date equal to the Credited
Service recognized through March 31, 1976 under
the Plan as in effect on that date. However, if
such a person became a Member after April 1, 1959,
Continuous Service shall also include his service
after April 1, 1959, and before his date of
membership.
4.02 Credited Service
(a) Effective January 1, 1989, Credited Service shall
be calculated based on Periods of Service.
A "Period of Service" shall mean twelve (12) month
periods of employment as a Member, or fractions
thereof, running from the date that a Member
commences participation in the Plan and terminates
on his first severance from service date. A
severance from service shall occur as of the
earlier of the date a Member quits, retires, is
discharged or dies, or the first anniversary of
absence for any other reason. Thereafter, subject
to 4.03(b), if a Member becomes reemployed, his
Period of Service for each subsequent period shall
12
commence with the reemployment commencement date,
which is the first date following a one year
period of severance on which a Member performs an
Hour of Service and shall terminate on his next
severance from service.
In the case of an Employee who transfers from a
class of employees whose service is determined on
the basis of Hours of Service to a class of
employees whose service is determined under this
Paragraph (a), such Employee shall receive credit
for a Period of Service consisting of (i) a number
of years equal to the number of years of service
credited to the Employee before the computation
period during which the transfer occurs and
(ii) the greater of (1) the Period of Service that
would be credited to the Employee under this
Paragraph (a) during the entire computation period
in which the transfer occurs or (2) the service
taken into account under the Hours of Service
method as of the date of the transfer.
In addition, the Employee shall receive credit for
Periods of Service subsequent to the transfer
commencing on the day after the last day of the
computation period in which the transfer occurs.
In the case of an Employee who transfers from a
class of employees whose service is determined
pursuant to this Paragraph (a) to a class of
employees whose service is determined on the basis
of Hours of Service (i) the Employee shall receive
credit, as of the date of transfer, for the
numbers of Years of Service equal to the number of
one year Periods of Service credited to the
Employee as of the date of the transfer and
(ii) the Employee shall receive credit in the
computation period which includes the date of the
transfer, for a number of Hours of Service
determined by applying the equivalency set forth
in 29 C.F.R. Section 2530.200b-3(e)(1)(i) to any
fractional part of a year credited to the Employee
under this Section as of the date of the transfer.
13
4.03 Breaks in Service
(a) Effective for any Computation Year beginning on or
after April 1, 1976, there shall be a Break in
Service of one year for any Computation Year after
the year in which a person first becomes employed
during which he does not complete more than 500
Hours of Service. If an Employee terminates his
service with the Company and is reemployed after
incurring a Break in Service, his service before
the Break in Service shall be excluded from his
Continuous Service, except as provided in Section
5.05.
(b) Effective for any Computation Year beginning on or
after January 1, 1989, for purposes of calculating
Credited Service only, there shall be a one year
Period of Severance if during the 12 consecutive
month period after a severance from service date,
as defined in Section 4.02(a) the Employee fails
to perform an Hour of Service. If an Employee
terminates his service with the Company and is
reemployed after incurring a one year Period of
Severance, his service before the Period of
Severance shall be excluded unless he thereafter
completes a one year Period of Service. In the
case of a non-vested member, the Period of Service
accrued prior to a one year Period of Severance
shall not be taken into account if at such time
the consecutive Period of Severance equals or
exceeds the greater of 5 or of prior Periods of
Service, whether or not consecutive.
(c) If an Employee shall have been absent from the
service of the Company because of service in the
Armed Forces of the United States and if he shall
have returned to the service of the Company within
90 days either (i) after having become entitled to
release from active duty in the Armed Forces or
(ii) after hospitalization continuing after
discharge for a period of not more than one year,
such absence shall not count as a Break in
Service, but instead shall be considered as
Continuous Service.
14
4.04 Disabled Members
If a Member is eligible for and continuously receiving
disability benefits under the long-term disability plan
provided by the Company, he shall continue to be a
Member of the Plan and shall continue to accrue service
until he retires in the same amount and manner as
though he had continued in the active employment of the
Company and he shall be deemed to receive Compensation
during such period based upon his rate of Compensation
at the time of disability. In the event that a Member
no longer qualifies for benefits under the long-term
disability plan before his Normal Retirement Date and
he does not resume active employment with the Company,
he shall be eligible to receive a vested retirement
Allowance as provided in Section 5.03 or to retire on
an early retirement Allowance as provided in Section
5.02, if otherwise eligible for such Allowance as of
the date of such disqualification. In either case, the
Allowance shall be computed on the basis of his
Compensation and Credited Service at the date of such
disqualification. In the event that a Member does not
qualify for disability benefits under the Social
Security Act, the Allowance accrued under Section
5.01(c)(i)(A) for purposes of this Section 4.04 for
Credited Service during such period of nonqualification
shall be increased by 5/6 per centum of the part of
each year's Compensation which is not in excess of
$3,600 per annum.
4.05 Service with Certain Other Employers
(a) An Employee hired prior to November 9, 1989, who
becomes a Member and continues as a Member without
a break in membership, shall receive Continuous
Service and Credited Service for all service not
otherwise recognized, in the employ of another
electric utility company or a company or corpora-
tion furnishing advisory or consulting service to
the Company, provided that such service would be
recognized if it had been rendered to the Company
and provided that any benefit payable under this
Plan on account of such service, so recognized,
shall be reduced by the amount of benefit provided
under the pension or retirement plan of such other
company with respect to the same period. The
Company shall calculate such service based on
actual employment records where available, but if
such records are not available, the Company shall
request that the Employee obtain information from
the Social Security Administration which documents
the Employee's Social Security eligible
15
compensation or from such other entity as the
Company deems appropriate. Based on such
documents, the Company shall calculate the
Employee's service and Compensation for purposes
of this Section 4.05. In the event no such
documentation can be obtained, the Company shall
make its best effort to estimate such service and
Compensation.
(b) An Employee hired on or after November 9, 1989,
who becomes a Member and continues as a Member
without a break in membership, shall receive
Continuous Service and Credited Service for all
service not otherwise recognized, in the employ of
an Affiliated Company, provided that such service
would be recognized if it had been rendered to the
Company and provided that any benefit payable
under this Plan on account of such service, so
recognized shall be reduced by the amount of
benefit provided under the pension or retirement
plan of such other company with respect to the
same period.
16
ARTICLE 5 - BENEFITS
v
5.01 Normal and Late Retirement
(a) The right of a Member to his normal retirement
Allowance shall be non-forfeitable upon attaining
age 65. A Member may retire from service on a
normal retirement Allowance upon reaching his
Normal Retirement Date or he may postpone his
retirement and remain in service after his Normal
Retirement Date. During any such deferment the
Member shall be retired from service on a normal
retirement Allowance on the first day of the
calendar month next following receipt by the
Retirement Committee of written application
therefor made by the Member.
(b) Subject to the provisions of Section 5.01(e), the
annual normal retirement Allowance payable upon
retirement on the Normal Retirement Date shall be
computed pursuant to Paragraphs (c) and (d) below.
The annual retirement Allowance payable upon
retirement after a Member's Normal Retirement Date
shall be equal to (i) the amount determined in
accordance with Paragraphs (c) and (d) below,
based on the Member's Credited Service and average
annual Compensation as of his late retirement date
or, if greater, (ii) the amount of Allowance to
which the Member would have been entitled under
Paragraphs (c) and (d) below as of his Normal
Retirement Date increased by an amount of
Equivalent Actuarial Value to the monthly payments
which would have been payable with respect to each
month during the postponement period which is not
a Suspendible Month, with any such monthly payment
amount determined as if the Member had retired as
of the first day of the Plan Year during which
payment would have been made or, if later, his
Normal Retirement Date.
(c) The normal retirement Allowance shall be computed
as an annuity payable for the life of the Member
and shall consist of:
(i) For service credited while a Member on
or after April 1, 1969, an Allowance
equal to 1-1/6 per centum of the part of
each year's Compensation which is not in
excess of $3,600 per annum plus 2 per
centum of the part of such Compensation
in excess of $3,600 per annum; and
17
(ii) For service credited between the
effective date of the Plan and March 31,
1969, an Allowance equal to 1 per centum
of the part of each year's Compensation
which is not in excess of $3,000 per
annum plus 2 per centum of the part of
such Compensation in excess of $3,000
per annum; and
(iii) For service credited prior to the
effective date of the Plan, an Allowance
which, when added to his Retirement
Annuity, shall be equal to 1 per centum
of the part of the Member's average
annual Compensation for the three
calendar years (1956, 1957 and 1958)
which is not in excess of $3,000 plus 1-
1/2 per centum of the part of such
Compensation in excess of $3,000,
multiplied by the number of years of his
Credited Service to the effective date
of the Plan.
(d) The benefit determined in Paragraph (c) above,
when added to a Member's Retirement Annuity, if
any, shall not be less than:
(i) 1-2/3 per centum of his average annual
Compensation, multiplied by his years of
Credited Service not in excess of 36
years, reduced by
(ii) 1-1/2 per centum of his primary Social
Security Benefit multiplied by his years
of Credited Service, the product not to
exceed 50 per centum of his primary
Social Security Benefit,
where average annual Compensation is calculated
during the 36 highest consecutive months within
the 120 months preceding retirement.
(e) If the Member is married on his Annuity Starting
Date and if he has not elected an optional form of
benefit as provided in Section 7.07, the
retirement Allowance shall be payable in the form
of a 50% Qualified Joint and Survivor Annuity.
18
(f) Notwithstanding any other provision of the Plan,
each Member;s normal retirement allowance is the
greater of
(i) the sum of:
(A) the normal retirement allowance
determined under this Section 5.01 as of
December 31, 1993, plus
(B) the normal retirement allowance
determined under this Section 5.01 based
on Credited Service and Compensation
after December 31, 1993 (with Credited
Service used in this paragraph (f)(i)(B)
being added to the Credited Service used
in paragraph (f)(i)(A) for purposes of
determining whether paragraph (d)(i)
36-year limit and (d)(ii) 50 per centum
offset limit have been exceeded); or
(ii) the normal retirement allowance determined
under this Section 5.01 as applied to all
Credited Service and Compensation.
5.02 Early Retirement
(a) A Member who has not reached his Normal Retirement
Date but who has reached the 55th anniversary of
his birth shall be retired from service on an
early retirement Allowance on the first day of the
calendar month next following receipt by the
Retirement Committee of written application
therefor made by the Member.
(b) At the time of retirement the Member may elect to
receive either (i) a deferred early retirement
Allowance commencing on the Member's Normal
Retirement Date which shall be computed as a
normal retirement Allowance, in accordance with
Section 5.01(b), on the basis of his Compensation
and Credited Service at the time of early
retirement or (ii) an immediate early retirement
Allowance beginning on the first day of any month
before his Normal Retirement Date which shall be
computed in accordance with Sections 5.01(c) and
(d) and shall be reduced by 1/12 of 5% for each
month by which the date the Member's early
retirement Allowance begins precedes age 62.
19
(c) If the Member is married on the date his
retirement Allowance commences, the early
retirement Allowance shall be computed on the same
basis as in Paragraph (b) above, in accordance
with Section 5.01(e).
5.03 Termination of Employment
(a) A Member shall be 100% vested in, and have a non-
forfeitable right to, his Accrued Benefit upon
completion of five years of Continuous Service
since the first day of the Computation Period in
which the 18th anniversary of his birth occurs.
If the Member's employment with the Company is
subsequently terminated for reasons other than
retirement or death, he shall be eligible for a
vested Allowance upon application therefor. If a
Member's employment with the Company terminates
before completion of five (5) years of Continuous
Service or before becoming eligible for an early
retirement or normal retirement Allowance, such
Member's Accrued Benefit shall be forfeited upon
termination of employment subject to restoration
under Section 5.05.
(b) The vested Allowance shall be a deferred Allowance
commencing on the former Member's Normal
Retirement Date and shall be determined by
computing a normal retirement Allowance, in
accordance with Section 5.01, on the basis of his
Compensation and Credited Service at his date of
termination and the benefit formula in effect on
that date.
(c) Instead of deferring his Allowance to his Normal
Retirement Date, the Member can elect to receive a
reduced Allowance commencing on the first day of
any month next following his attainment of age 55
but prior to his Normal Retirement Date. The
reduction shall be 1/12 of 5% for each month by
which his Annuity Starting Date precedes his
Normal Retirement Date, provided that such
reduction shall be made prior to the application
of the maximum limitation provided under Article 6
and such reduced Allowance shall be subject to
such limitation.
20
5.04 Adjustment of Retirement Allowance for Social Security
Benefits
When an Allowance commences prior to the attainment of
age 65, the Member may elect to convert the Allowance
otherwise payable to him into an Allowance of
Equivalent Actuarial Value of such amount that, with
his Retirement Annuity, if any, and his old-age
insurance benefit under Title II of the Social Security
Act, he will receive, so far as possible, the same
amount each year before and after such benefit
commences.
5.05 Restoration of Retired Member or Former Member to
Service
(a) If a Member in receipt of an Allowance is restored
to service as an Employee on or after his Normal
Retirement Date, the following shall apply:
(i) His Allowance shall be suspended for
each month during the period of
restoration which is a Suspendible
Month.
(ii) Upon the death of the Member during the
period of restoration, any Allowance
that would have been payable to his
surviving Spouse had he not been
restored to service shall be payable or,
alternatively, any payments under an
optional benefit, if one has been
elected and becomes effective, shall
begin.
(iii) Upon later retirement, payment of the
Member's Allowance shall resume no later
than the third month after the latest
Suspendible Month during the period of
restoration, and shall be adjusted, if
necessary, in compliance with Title 29
of the Code of Federal Regulations,
Section 2530.203-3 in a consistent and
nondiscriminatory manner.
(b) If a Member in receipt of an Allowance is restored
to service with the Company before his Normal
Retirement Date, the following shall apply:
(i) His Allowance shall cease and any
election of an optional benefit in
effect shall be void.
21
(ii) Any Continuous and Credited Service to
which he was entitled when he retired or
terminated service shall be restored to
him.
(iii) Upon later retirement or termination,
his Allowance shall be based on the
benefit formula then in effect and his
Compensation and Credited Service before
and after the period when he was not in
the service of the Company, reduced by
an amount of Equivalent Actuarial Value
to the benefits, if any, he received
before the date of his restoration to
service.
(iv) The part of the Member's Allowance upon
later retirement payable with respect to
Credited Service rendered before his
previous retirement or termination of
service shall never be less than the
amount of his previous Allowance
modified to reflect any option in effect
on his later retirement.
(c) If a Member not in receipt of an Allowance or a
former Member is restored to service without
having had a Break in Service, his Continuous
Service shall be determined as provided in Section
4.01, and, if applicable, he shall again become a
Member as of his date of restoration to service.
(d) If a vested Member not in receipt of an Allowance
or a former Member who received a lump sum
settlement in lieu of his Allowance is restored to
service with the Company after having had a Break
in Service, the following shall apply:
(i) Upon completion of one year of
Continuous Service following the Break
in Service, the Continuous Service to
which he was previously entitled shall
be restored to him, and, if applicable,
he shall again become a Member as of his
date of restoration to service.
(ii) If a Member has received a distribution
of his Allowance and the Member is
restored to service with the Company,
the Member shall have the right to
restore his or her Accrued Benefit to
the extent forfeited upon the repayment
22
to the Plan of the full amount of the
distribution plus interest, compounded
annually from the date of distribution
at the rate determined for purposes of
Code Section 411(c)(2)(C). Such
repayment must be made before the
earlier of five (5) years after the
first date on which the Member is
subsequently reemployed by the Company,
or the date the Member incurs five (5)
consecutive one year Breaks in Service
following the date of distribution.
If an Member has been deemed to receive
a distribution under the Plan, and the
Member is restored to service with the
Company, upon the reemployment of such
Member, the Accrued Benefit will be
restored to the amount of such Accrued
Benefit on the date of deemed
distribution.
(iii) Upon later termination or retirement of
a Member whose previous Credited Service
has been restored under this
Paragraph (d), his Allowance shall be
based on the benefit formula then in
effect and his Compensation and Credited
Service before and after the period when
he was not in the service of the
Company.
(e) If any other former Member is restored to service
with the Company after having had a Break in
Service, the following shall apply:
(i) Upon completion of one year of
Continuous Service following the Break
in Service, he shall again become a
Member as of his date of restoration to
service.
(ii) Upon becoming a Member in accordance
with (i) above, the Continuous Service
to which he was previously entitled
shall be restored to him, if the total
number of consecutive one-year Breaks in
Service does not equal or exceed the
greater of (a) five, or (b) the total
number of years of his Continuous
Service before the Break in Service,
determined at the time of the Break in
23
Service, excluding any Continuous
Service disregarded under this
Paragraph (e) by reason of any earlier
Break in Service.
(iii) Any Credited Service to which the Member
was entitled at the time of his
termination of service which is included
in the Continuous Service so restored
shall be restored to him.
(iv) Upon later termination or retirement of
a Member whose previous Credited Service
has been restored under this
Paragraph (e), his Allowance, if any,
shall be based on the benefit formula
then in effect and his Compensation and
Credited Service before and after the
period when he was not in the service of
the Company.
5.06 Additional Monthly Benefit
(a) Effective June 1, 1991, in addition to other
benefits provided in this Article 5, the following
monthly benefits are payable as a life annuity to
eligible Members as defined in Paragraph (b)
below,
The "additional monthly amount" is calculated
as (i) a percentage of the Member's first
$300 of monthly Allowance, multiplied by
(ii) the number of years the Member was
retired prior to January 1, 1990, with a
minimum of $25.00 per month. The percentage
is as follows:
Years Since
Retirement Percentage
as of 1/1/90
Less than 5 3-3/4
5 to 10 4
10 to 15 4-1/2
15 or more 5
(b) Members eligible for the additional monthly amount
are those retired Members as of June 1, 1991, who
entered retired status directly from active
status.
24
(c) If an adjustment of retirement Allowance for
Social Security benefits option was elected
pursuant to Section 5.04, the additional monthly
benefit was calculated based on the Allowance
before such adjustment.
(d) Upon the death of a Member eligible for an
additional monthly amount, such amount shall be
continued to the Member's Spouse regardless of the
method of distribution elected by a Member.
5.07 Written Application
Each Member, before any benefit shall be payable to him
or his account under the Plan, shall file with the
Retirement Committee such information as it shall
require to establish his rights and benefits under the
Plan.
25
ARTICLE 6 - LIMITATIONS ON BENEFITS
vi
6.01 Maximum Benefits
(a) The maximum annual retirement Allowance payable to
a Member under the Plan, when added to any
retirement Allowance attributable to contributions
of the Company or an Affiliated Company provided
to the Member under any other qualified defined
benefit plan, shall be equal to the lesser of
(1) $90,000, as adjusted under Code Section
415(d), or (2) the Member's average annual
remuneration during the three consecutive calendar
years in his Credited Service as a Member
affording the highest such average, or during all
of the years in his Credited Service as a Member,
if less than three years, subject to the following
adjustments:
(i) If the Member has not been a Member of
the Plan for at least 10 years, the
maximum annual retirement Allowance in
clause (1) above shall be multiplied by
the ratio which the number of years of
his membership in the Plan bears to 10.
This adjustment shall be applied
separately to the amount of the Member's
retirement Allowance resulting from each
change in the benefit structure of the
Plan, with the number of the years of
membership in the Plan being measured
from the effective date of each such
change.
(ii) If the Member has not completed 10 years
of Continuous Service, the maximum
annual retirement Allowance in clause
(2) above shall be multiplied by the
ratio which the number of years of his
Continuous Service bears to 10.
(iii) If the retirement Allowance begins
before the Member's social security
retirement age (as defined below), but
on or after his 62nd birthday, the
maximum retirement Allowance in clause
(1) above shall be reduced by 5/9 of 1%
for each of the first 36 months plus
5/12 of 1% for each additional month by
which the Member is younger than the
social security retirement age at the
date his retirement Allowance begins.
26
If the retirement Allowance begins
before the Member's 62nd birthday, the
maximum retirement Allowance in clause
(1) above shall be of Equivalent
Actuarial Value to the maximum benefit
payable to age 62 as determined in
accordance with the preceding sentence.
(iv) If the retirement Allowance begins after
the Member's social security retirement
age (as defined below), the maximum
retirement Allowance in clause (1) above
shall be of Equivalent Actuarial Value,
based on an interest rate of 5% per year
in lieu of the interest rate otherwise
used in the determination of Equivalent
Actuarial Value, to that maximum benefit
payable at the social security
retirement age.
(v) If the Member's retirement Allowance is
payable as a joint and survivor
Allowance with his Spouse as the
contingent annuitant, the modification
of the retirement Allowance for that
form of payment shall be made before the
application of the maximum limitation,
and, as so modified, shall be subject to
the limitation.
(b) As of January 1 of each calendar year on or after
January 1, 1988, the dollar limitation as
determined by the Commissioner of Internal Revenue
for that calendar year shall become effective as
the maximum permissible dollar amount of
retirement Allowances payable under the Plan
during that calendar year, including retirement
Allowances payable to Members who retired prior to
that calendar year, in lieu of the dollar amount
in (1) of Paragraph (a) above.
(c) In the case of a Member who is also a Member of a
defined contribution plan of the Company or an
Affiliated Company, his maximum benefit limitation
shall not exceed an adjusted limitation computed
as follows:
(i) Determine the defined contribution
fraction.
(ii) Subtract the result of (i) from 1.0.
27
(iii) Multiply the dollar amount in (1) of
Paragraph (a) above by 1.25.
(iv) Multiply the amount described in (2) of
Paragraph (a) above by 1.4.
(v) Multiply the lesser of the result of
(iii) or the result of (iv) by the
result of (ii) to determine the adjusted
maximum benefit limitation applicable to
a Member.
(d) For purposes of this Section:
(i) the defined contribution fraction for a
Member who is a Member of one or more
defined contribution plans of the
Company or an Affiliated Company shall
be a fraction the numerator of which is
the sum of the following:
(A) the Company's and Affiliated
Companies' contributions credited
to the Member's accounts under the
defined contribution plan or plans.
(B) with respect to calendar years
beginning before 1987, the lesser
of the part of the Member's
contributions in excess of 6% of
his Compensation or one-half of his
total contributions to such plan or
plans, and with respect to calendar
years beginning after 1986, all
Member's contributions to such plan
or plans, and
(C) any forfeitures allocated to his
accounts under such plan or plans,
but reduced by any amount permitted by
regulations promulgated by the
Commissioner of Internal Revenue; and
the denominator of which is the lesser
of the following amounts determined for
each year of the Member's Continuous
Service:
(D) 1.25 multiplied by the maximum
dollar amount allowed by law for
that year; or
28
(E) 1.4 multiplied by 25% of the
Member's remuneration for that
year.
At the direction of the Retirement
Committee, the portion of the
denominator of that fraction with
respect to calendar years before 1983
shall be computed as the denominator for
1982, as determined under the law as
then in effect, multiplied by a fraction
of the numerator of which is the lesser
of:
(F) $51,875, or
(G) 1.4 multiplied by 25% of the
Member's remuneration for 1981;
and the denominator of which is the
lesser of:
(H) $41,500, or
(I) 25% of the Member's remuneration
for 1981;
(ii) a defined contribution plan means a
pension plan which provides for an
individual account for each Member and
for benefits based solely upon the
amount contributed to the Member's
account, and any income, expenses, gains
and losses, and any forfeitures of
accounts of other Members which may be
allocated to that Member's accounts,
subject to (iii) below; and
(iii) a defined benefit plan means any pension
plan which is not a defined contribution
plan; however, in the case of a defined
benefit which is based partly on the
balance of the separate account of a
Member, that plan shall be treated as a
defined contribution plan to the extent
benefits are based on the separate
account of a Member and as a defined
benefit plan with respect to the
remaining portion of the benefits under
the plan.
29
(iv) the term "remuneration" with respect to
any Member shall mean the wages,
salaries and other amounts paid in
respect of such Member by the Company or
an Affiliated Company for personal
services actually rendered, determined
after any pre-tax contributions under
"qualified cash or deferred arrangement"
(as defined under Code Section 401(k)
and its applicable regulations) or under
a "cafeteria plan" (as defined under
Code Section 125 and its applicable
regulations), and shall include, but not
by way of limitation, bonuses, overtime
payments and commissions; and shall
exclude deferred compensation, stock
options and other distributions which
receive special tax benefits under the
Code; and
(v) the term "social security retirement
age" shall mean age 65 with respect to a
Member who was born before January 1,
1938; age 66 with respect to a Member
who was born after December 1, 1937 and
before December 1, 1955; and age 67 with
respect to a Member who was born after
December 31, 1954.
(e) Notwithstanding the preceding paragraphs of this
Section, a Member's annual retirement Allowance
payable under this Plan, prior to any reduction
required by operation of Paragraph (c) above,
shall in no event be less than:
(i) the benefit that the Member had accrued
under the Plan as of the end of the Plan
Year beginning in 1982, with no changes
in the terms and conditions of the Plan
on or after July 1, 1982 taken into
account in determining that benefit, or
(ii) the benefit that the Member had accrued
under the Plan as of the end of the Plan
Year beginning in 1986, with no changes
in the terms and conditions of the Plan
on or after May 5, 1986 taken into
account in determining that benefit.
30
(f) Notwithstanding any provisions contained herein to
the contrary, in the event that a Member
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 a Member exceed
the limitations contained in Code Section 415(e),
corrective adjustments shall first be made under
this Plan. However, if a Member's Allowance 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
Member's Accrued Benefit under this Plan.
(g) 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.
31
ARTICLE 7 - DISTRIBUTION OF BENEFITS
vii
7.01 Surviving Spouse Benefit
On and after August 23, 1984, if a married Member:
(a) dies in active service prior to his Annuity
Starting Date after having met the requirements
for an Allowance, or
(b) dies after retiring on any Allowance or after
terminating service on or after August 23, 1984,
with entitlement to a vested Allowance, but in
either case before his Annuity Starting Date, or
(c) dies after he is credited with at least one Hour
of Service with the Company on or after August 23,
1984 but prior to his Annuity Starting Date,
there shall be payable to his Surviving Spouse a
Qualified Preretirement Survivor Annuity as provided in
Section 7.03.
7.02 Qualified Joint and Survivor Annuity
Provided an optional form of benefit as set forth in
Section 7.07 is not elected pursuant to a Qualified
Election within the 90-day period ending on the Annuity
Starting Date, a married Member's Accrued Benefit will
be paid in the form of a Qualified Joint and Survivor
Annuity and an unmarried Member's Accrued Benefit will
be paid in the form of an annuity for his lifetime.
7.03 Qualified Preretirement Survivor Annuity
(a) Provided that a Member and his or her Spouse have
been married throughout the one-year period ending
on his or her date of death and provided an
optional form of benefit as set forth in Section
7.07 has not been elected by a Member eligible to
waive the Qualified Preretirement Survivor Annuity
within the Election Period pursuant to a Qualified
Election, if a Participant dies before the Annuity
Starting Date, the Member's Accrued Benefit shall
be payable as an annuity for the life of the
Surviving Spouse in accordance with this Section
7.03.
32
(b) The Qualified Preretirement Survivor Annuity shall
commence on what would have been the Member's
Normal Retirement Date or, on the first day of the
month following the death of the Member, if later,
and shall cease with the last monthly payment
prior to the death of the Spouse. However:
(i) if the Member dies in active service
after having met the requirements for
early retirement, after having completed
twenty years of service, or after
retiring early but before payments
commence, the Spouse may elect to begin
receiving payments as of the first day
of the month following the Member's date
of death; and
(ii) in the case of the death of any other
Member, the Spouse may elect to begin
receiving payments as of the first day
of any month following what would have
been the Member's Earliest Retirement
Age which is his 55th birthday.
(c) Before reduction in accordance with Paragraph (d)
below, the Qualified Preretirement Survivor
Annuity shall be equal to:
(i) in the case of a Member who dies while
in active service after having met the
requirements for early retirement, after
having completed twenty years of
service, or after retiring early but
before payments commence, the following
per centum of a normal retirement
Allowance computed as provided in
Section 5.01(c) and 5.01(d) on the basis
of the deceased Member's Compensation
and Credited Service prior to his death,
provided that if the Spouse was born
more than 60 months after the deceased
Member, the Qualified Preretirement
Survivor Annuity so determined shall be
reduced by 1/6 of 1% for each month in
33
excess of 60 by which her date of birth
followed the deceased Member's date of
birth.
Age Member
Would Have Been
At Commencement Per Centum
40 to 45 40%
46 41%
47 42%
48 43%
49 44%
50 45%
51 46%
52 47%
53 48%
54 49%
55 or over 50%
(ii) in the case of any other Member, 50% of
the amount of vested Allowance to which
the Member would have been entitled at
his Normal Retirement Date, reduced as
follows:
- reduction for a 50% joint and
survivor annuity option (based on
the Member's age and his Spouse's
age had the Member survived to the
date benefits commence), and
- reduction to reflect early
commencement, if applicable, of
payments in accordance with Section
5.03(c).
(iii) If within the 90 day period prior to his
Annuity Starting Date a Member has
elected Option (ii) under Section 7.07
naming his spouse as contingent
annuitant, the amount payable to his
spouse under this Section 7.03 as a
Qualified Preretirement Survivor Annuity
shall be the amount that would have been
payable to his spouse under Option (ii)
if such amount is greater than the
amount of the Qualified Preretirement
Survivor Annuity otherwise payable under
34
subparagraphs (c)(i) or (c)(ii) above,
as applicable.
(d) The Allowance subsequently payable to a Member
whose Spouse would have been entitled to a
Qualified Preretirement Survivor Annuity under
this Section had the Member's death occurred, or
the Qualified Preretirement Survivor Annuity
payable to his Spouse after his death, whichever
is applicable, shall be reduced by the applicable
percentage shown in the following table for the
period, or periods, that the provisions of this
Section 7.03 are in effect with respect to the
Member. No such reduction shall be made with
respect to:
(i) coverage during active employment, or
(ii) any period before the commencement of
the election period specified in Para-
graph (e) below.
Annual Reduction for Spouse's Coverage
after Retirement or Other Termination
of Service
Age Reduction
Under 35 0%
35 - 39 2/10 of 1%
40 - 49 3/10 of 1%
50 - 54 4/10 of 1%
55 - 59 5/10 of 1%
60 and over 1%
(e) The Company shall furnish to each married Member
within the one year period commencing on the date
he terminates service a written explanation in
non-technical language which describes (1) the
terms and conditions of the Qualified
Preretirement Survivor Annuity, (2) the Member's
right to make, and the effect of, an election to
waive the Qualified Preretirement Survivor
Annuity, (3) the rights of the Member's Spouse and
(4) the right to make, and the effect of, a
revocation of such election.
35
7.04 Definitions
For purposes of this Article 7, the following
definitions shall apply:
(a) The term "Election Period" shall mean the period
which begins on the first day of the Plan Year in
which a Member attains age 35 and ends on the date
of the Member's death. If a Member separates from
service prior to the first day of the Plan Year in
which age 35 is attained, with respect to the
Accrued Benefit as of the date of separation, the
Election Period shall begin on the date of
separation.
(b) The term "Earliest Retirement Age" shall mean the
earliest date on which, under the Plan, the Member
could elect to receive retirement benefits.
(c) The term "Qualified Election" shall mean waiver
of a Qualified Joint and Survivor Annuity or a
Qualified Preretirement Survivor Annuity. Any
waiver of a Qualified Joint and Survivor Annuity
or a Qualified Preretirement Survivor Annuity
shall not be effective unless: (a) the Member's
Spouse consents in writing to the election;
(b) the election designates a contingent
annuitant, which may not be changed without
spousal consent (or the Spouse expressly permits
designations by the Participant without any
further spousal consent); (c) the Spouse's consent
acknowledges the effect of the election; and (d)
the Spouse's consent is witnessed by a Plan
representative designated by the Retirement
Committee or notary public. Additionally, a
Member's waiver of the Qualified Joint and
Survivor Annuity shall not be effective unless the
election designates a form of benefit payment
which may not be changed without spousal consent
(or the Spouse expressly permits designations by
the Member without any further spousal consent).
If it is established to the satisfaction of a the
Retirement Committee that there is no Spouse or
that the Spouse cannot be located, a waiver
without spousal consent will be deemed a Qualified
Election.
Any consent by a Spouse obtained under this
provision (or establishment that the consent of a
Spouse may not be obtained) shall be effective
only with respect to such Spouse. A consent that
permits designations by the Member without any
requirement of further consent by such Spouse must
acknowledge that the Spouse has the right to limit
consent to a specific Beneficiary, and a specific
36
form of benefit where applicable, and that the
Spouse voluntarily elects to relinquish both of
such rights. A revocation of a prior waiver may
be made by a Member without the consent of the
Spouse at any time before the commencement of
benefits. The number of revocations shall not be
limited. No consent obtained under this provision
shall be valid unless the Member has received
notice as provided in Section 7.05 below.
7.05 Notice Requirements
(a) In the case of a Qualified Joint and Survivor
Annuity or a single life annuity, the Retirement
Committee shall provide, no less than 30 days and
no more than 90 days prior to the Annuity Starting
Date, each Member with a written explanation of:
(1) the terms and conditions of a Qualified Joint
and Survivor Annuity or single life annuity;
(2) the Member's right to make and the effect of
an election to waive the Qualified Joint and
Survivor Annuity or single life annuity form of
benefit; (3) the rights of a Member's Spouse; and
(4) the right to make, and the effect of, a
revocation of a previous election to waive the
qualified Joint and Survivor Annuity or single
life annuity.
(b) In the case of a Qualified Preretirement Survivor
Annuity, the Retirement Committee shall provide
each Member within the applicable period for such
Member a written explanation of the Qualified
Preretirement Survivor Annuity in such terms and
in such manner as would be comparable to the
explanation provided for meeting the requirements
of Paragraph (a) above applicable to a Qualified
Joint and Survivor Annuity or a single life
annuity.
The applicable period for a Member is whichever of
the following periods ends last: (1) the period
beginning with the first day of the Plan Year in
which the Member attains age 32 and ending with
the close of the Plan Year preceding the Plan Year
in which the Member attains age 35; (2) a
reasonable period ending after the individual
becomes a Member; (3) a reasonable period ending
after the Member's Qualified Preretirement
Survivor Annuity ceases to be fully subsidized;
(4) a reasonable period ending after this Article
first applies to the Member. Notwithstanding the
foregoing, notice must be provided within a
reasonable period ending after separation from
service in the case of a Member who separates from
service before attaining age 35.
37
For purposes of applying the preceding paragraph,
a reasonable period ending after the enumerated
events described in (2), (3) and (4) is the end of
the two-year period beginning one year prior to
the date the applicable event occurs, and ending
one year after that date. In the case of a Member
who separates from service before the Plan Year in
which age 35 is attained, notice shall be provided
within the two-year period beginning one year
prior to separation and ending one year after
separation. If such a Member thereafter returns
to employment with the employer, the applicable
period for such Member shall be redetermined.
7.06 Transitional Rules
Any living Member not receiving benefits on August 23,
1984, who would otherwise not receive the benefits
prescribed by the previous Sections of this Article
must be given the opportunity to elect to have the
prior Sections of this Article apply if such Member is
credited with at least one Hour of Service under this
Plan or a predecessor plan in a Plan Year beginning on
or after January 1, 1976, and such Member is entitled
to a vested Allowance.
7.07 Alternative Forms of Distribution
(a) Any Member may, subject to the election procedures
applicable to Qualified Joint and Survivor
Annuities and Qualified Preretirement Survivor
Annuities, elect to convert his retirement
Allowance into an optional benefit of Equivalent
Actuarial Value determined as of the Annuity
Starting Date, in accordance with one of the
options named below:
Option (i) a retirement Allowance payable for
the Member's life, with no
Allowance payable after his death;
or
Option (ii) a modified retirement Allowance
payable during the Member's life
with the provision that after his
death either a 50%, 75% or a 100%
joint and survivor annuity shall be
paid during the life of, and to,
the contingent annuitant nominated
by him.
38
(b) The election of an optional form of benefit shall
become effective as follows:
(i) If the Member retired on his Normal
Retirement Date, or if he retires on an
early retirement Allowance or a vested
retirement Allowance deferred to
commence on his Normal Retirement Date,
the election shall become effective on
his Normal Retirement Date.
(ii) If the Member retires on an early
retirement allowance commencing prior to
his Normal Retirement Date, the election
shall become effective on the date due
of the first monthly installment.
(iii) If the Member continues in service as an
Employee after his Normal Retirement
Date and the notice of his election is
received by the Retirement Committee
prior to his Normal Retirement Date, the
election shall become effective on his
Normal Retirement Date, or if the notice
of the election is received by the
Retirement Committee after the Member's
Normal Retirement Date, the election
shall become effective on the date it is
received by the Retirement Committee.
In the event of the death of a Member in
service as an Employee on or after his
Normal Retirement Date and after his
election has become effective, payments
of the benefit under the option computed
as of the time it became effective shall
commence on the first day of the month
next following the month of death if the
contingent annuitant designated under
the option is then living; or, upon the
retirement of such a Member, the amount
under the option computed as of the time
it became effective shall be payable to
the Member, but no payments shall
commence or accrue to him until the date
of retirement.
7.08 Cash-Out of Annuity Benefits
Although Allowances shall normally be payable in
monthly installments, a lump sum payment of Equivalent
Actuarial Value shall be made in lieu thereof if the
present value of a Member's Allowance upon termination
of employment is less than $3,500. The Equivalent
Actuarial Value shall be determined by using an
interest rate assumption equal to the interest rate
39
used by the Pension Benefit Guaranty Corporation for
valuing a lump sum distribution for single employer
plans that terminate on the first day of the
Computation Year in which the Annuity Starting Date
occurs. In determining the amount of a lump sum
payable prior to a Member's Normal Retirement Date,
Equivalent Actuarial Value shall be calculated as a
benefit which would otherwise have been provided
commencing at the Member's Normal Retirement Date, or,
if larger, the benefit payable at the earliest possible
commencement date, but in no event earlier than the
date as of which the lump sum is paid. The lump sum
payment shall be made as soon as practicable on or
after the date the Member terminates employment.
Notwithstanding the foregoing, if the present value of
the Member's vested Allowance is zero, the Member shall
be deemed to have received a distribution of such
Member's Accrued Benefit.
7.09 Commencement of Benefits
(a) Required Distributions
Once a written claim for benefits is filed with
the Retirement Committee and unless the Member
elects to have payment begin at a later date,
payment of benefits to the Member shall begin not
later than sixty (60) days after the last day of
the Plan Year in which the latest of the following
events occur:
(i) the Member's Normal Retirement Date;
(ii) the tenth (10th) anniversary of the date
the Employee became a Member; or
(iii) the Member's separation from service.
(b) Required Minimum Distributions On and After
January 1, 1989
(i) Subject to the transitional rules
described in Paragraph (c) below,
effective for taxable years beginning
after December 31, 1988, the payment of
benefits to any Member shall begin no
later than April 1 of the calendar year
following the calendar year in which the
Member attains age 70-1/2, without
regard to the actual date of separation
from service. The amount of his
Allowance shall be recomputed as of such
April 1 and as of the close of each Plan
Year after his Allowance commences and
preceding his actual retirement date as
40
if each such date were the Member's late
retirement date. Any additional
Allowance 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.
(ii) The receipt by a Member 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 entitlement of an otherwise
eligible Member to additional accrued
benefits.
(c) Transitional Rule
Any Member 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 Company. This transitional
rule shall only apply if the Member 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 Member
(i) Death After Commencement of Benefits
If the Member 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 Member as of the date of his death.
(ii) Death Prior to Commencement of Benefits
If the Member dies before the distribu-
tion of his nonforfeitable interest has
begun, the entire interest shall be
distributed within five years after the
death of such Member.
(e) Determining Required Minimum Distributions
Notwithstanding anything in this Plan to the
contrary, all distributions under this Plan shall
be made in accordance with Section 401(a)(9) of
the Code and the regulations thereunder and the
minimum amount which must be distributed each
41
calendar year shall be determined in accordance
with the provisions of Code Section 401(a)(9) and
applicable Treasury Regulations.
7.10 TEFRA 242(b)(2) Transitional Rules
Any distribution made pursuant to a TEFRA transitional
rule distribution election 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.
7.11 Requirement for Direct Rollovers
This Section applies to distributions made 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 7, a
Distributee may elect, at the time and in the manner
prescribed by the Retirement Committee, 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
(i) 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:
(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
designated beneficiary, 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
42
appreciation with respect to
employer securities).
(ii) Eligible Retirement Plan
An Eligible Retirement Plan is an
individual retirement account described
in Section Code 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 to a
surviving Spouse, an Eligible Retirement
Plan is an individual retirement account
or individual retirement annuity.
(iii) Distributee
A Distributee includes a Member or
former Member. In addition, the
Member's or former Member's Surviving
Spouse and the Member's or former
Member's Spouse or former Spouse who is
an alternate payee under a qualified
domestic relations order, as defined in
Code Section 414(p), are Distributees
with regard to the interest of the
Spouse or former Spouse.
(iv) Direct Rollover
A Direct Rollover is a payment by the
Plan to the Eligible Retirement Plan
specified by the Distributee.
43
ARTICLE 8 - CONTRIBUTIONS
viii
8.01 It is the intention of the Company to continue the Plan
and make such contributions to the Trustee each year in
such amounts as are necessary to maintain the Plan on a
sound actuarial basis and to meet minimum funding
standards as prescribed by any applicable law.
However, subject to the provisions of Article 9, the
Company may discontinue its contributions for any
reason at any time. Any forfeitures shall be used to
reduce the Company contributions otherwise payable, and
will not be applied to increase the benefits any Member
would otherwise receive under the Plan.
44
ARTICLE 9 - ADMINISTRATION OF THE PLAN
ix
9.01 The general administration of the Plan and the
responsibility for carrying out the provisions of the
Plan shall be placed in a Retirement Committee of not
less than three persons appointed from time to time by
the Board of Directors to serve at the pleasure of the
Board of Directors. Any Member of the Retirement
Committee may resign by delivering his written
resignation to the Board of Directors and the Secretary
of the Retirement Committee.
9.02 The Members of the Retirement Committee shall elect a
Chairman from their number and a Secretary who may be
but need not be one of the Members of the Retirement
Committee; 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 execute or deliver any instrument or make any
payment on their behalf; may retain counsel, employ
agents and provide for such clerical, accounting and
actuarial services as they may require in carrying out
the provisions of the Plan; and may allocate among
themselves or delegate to other persons all or such
portion of their duties hereunder, other than those
granted to the Trustee under the Trust instrument
adopted for use in implementing the Plan, as they, in
their sole discretion shall decide.
9.03 The Retirement Committee, in addition to the functions
and duties provided for elsewhere in the Plan, shall
have exclusive discretionary authority for the
following:
(a) Construing and interpreting the Plan;
(b) Determining all questions affecting the
eligibility of any Member, retired Member, Spouse
or beneficiary;
(c) Determining all questions affecting the amount of
the Allowance 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;
45
(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;
(i) Reviewing such denials of claims for benefits as
may arise under Section 9.04 below and making
decisions on such review. [claims procedure]
Any decision, determination, construction,
interpretation, ascertainment, authorization direction,
rule, regulation, prescription or review that the
Retirement Committee may make or give in carrying out
its duties or functions under this Section 9.03 shall
be binding and conclusive.
9.04 Consistent with the requirements of ERISA and the
regulations thereunder of the Secretary of Labor as
from time to time in effect, the Retirement Committee
shall: (a) provide adequate notice in writing to any
Member or contingent annuitant (each being hereinafter
in this paragraph referred to as "Member") whose claim
for benefits under the Plan has been denied setting
forth specific reasons for such denial, written in a
manner calculated to be understood by such Member; and
(b) afford a reasonable opportunity to any Member whose
claim for benefits has been denied for a full and fair
review of the decision denying the claim.
9.05 The Retirement Committee shall hold meetings upon such
notice, at such place or places, and at such time or
times as it may from time to time determine.
9.06 Any act which the Plan authorizes or requires the
Retirement Committee to do may be done by a majority of
its Members. The action of such majority expressed
from time to time by a vote at a meeting or in writing
without a meeting shall constitute the action of the
Retirement Committee and shall have the same effect for
all purposes as if assented to by all Members of the
Retirement Committee at the time in office.
9.07 No Member of the Retirement Committee shall receive any
Compensation for his services as such.
9.08 Subject to the limitations of the Plan, the Retirement
Committee from time to time shall establish rules for
the administration of the Plan and the transaction of
its business. The determination of the Retirement
Committee asto anydisputed question shallbe conclusive.
46
9.09 As an aid to the Retirement Committee fixing the rates
of Company contributions payable to the Plan, the
actuary designated by the Retirement Committee shall
make annual actuarial valuations and shall submit to
the Retirement Committee such amounts of contribution
as he recommends for use. The Retirement Committee
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 of
the Plan. The Retirement Committee shall submit a
report each year to the Board of Directors, giving a
brief account of the operation of the Plan during the
past year.
9.10 The Members of the Retirement Committee shall use that
degree of care, skill, prudence and diligence that a
prudent man acting in a like capacity and familiar with
such matters would use in his conduct of a similar
situation.
47
ARTICLE 10 - MANAGEMENT OF FUNDS
x
All the funds of the Plan except those held by an
insurance company shall be held by a Trustee or Trustees
appointed from time to time by the Board of Directors, in trust
under a trust instrument adopted, or as amended, by the Board of
Directors for use in providing the benefits of the Plan and
paying its expenses not paid directly by the Company; provided
that, except as otherwise herein provided, no part of the corpus
or income of the Trust shall be used for, or diverted to,
purposes other than for the exclusive benefit of Members and
contingent annuitants under the Plan, prior to the satisfaction
of all liabilities with respect to them; and provided that no
person shall have any interest in or right to any part of the
earnings of the Trust, or any rights in, or to, or under the
Trust or any part of the assets thereof, except as and to the
extent expressly provided in the Plan and in the trust
instrument, and the Company shall have no liability for the
payment of benefits under the Plan nor for the administration of
the funds paid over to the Trustee or Trustees.
The Company's contributions to the Plan are conditioned
upon their deductibility under Code Section 404. If all or part
of the Company's deductions for contributions to the Plan are
disallowed by the Internal Revenue Service, the portion of the
contributions to which that disallowance applies shall be
returned to the Company without interest, but reduced by any
investment loss attributable to those contributions. The return
shall be made within one year after the date of the disallowance
of deduction. The Company may recover without interest the
amount of its contributions to the Plan made on account of a
mistake in fact, reduced by any investment loss attributable to
those contributions, if recovery is made within one year after
the date of those contributions. Furthermore, 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(s).
48
ARTICLE 11 - CERTAIN RIGHTS AND LIMITATIONS
xi
The following provisions shall apply in all cases
whenever a Member or other person is affected thereby.
11.01 The Board of Directors may terminate the Plan for any
reason at any time. In case of complete or partial
termination of the Plan, the rights of affected Members
to the benefits accrued under the Plan to the date of
such termination, to the extent then funded, shall be
non-forfeitable. The funds of the Plan shall be used
for the exclusive benefit of Members, Spouses, former
Members, retired Members, and contingent annuitants
under the Plan as of the date of such termination
except that any residual assets which are not required
to satisfy all liabilities of the Plan for benefits
because of erroneous actuarial computation as defined
in Treasury Regulation Section 1.401-2 shall be
returned to the Company. Upon termination, the
Retirement Committee shall determine and pay benefits
to each Member, Spouse, and contingent annuitant in
accordance with the provisions of Title IV of ERISA.
11.02 The establishment of the Plan shall not be construed as
conferring any legal rights upon any Employee or other
person for a continuation of employment, nor shall it
interfere with the rights of the Company to discharge
any Employee and to treat him without regard to the
effect which such treatment might have upon him as a
Member of the Plan.
11.03
(a) The annual payments to a Member described in
subparagraph (b) below shall not exceed an amount
equal to the payments that would be made to or on
behalf of such Member under a single life annuity
that is the Actuarial Equivalent of the sum of the
Member's Accrued Benefit and the Member'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
subparagraph (a) do not apply, however, if --
(i) after payment to a Member described in
subparagraph (b) of all benefits payable
to such Member under this Plan, the
value of this Plan's assets equals or
exceeds 110% of the value of current
liabilities, as defined in Code Section
412(a)(7), or
49
(ii) the value of the benefits payable to
such Member under this Plan for a Member
described in subparagraph (b) below is
less than 1% of the value of current
liabilities before distribution.
(b) The Members 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
Members whose benefits are subject to restriction
under this Section 11.03 shall be limited to only
those Members who in the current or in any
previous Plan Year were one of the 25 non-
excludible Members of the Company with the
greatest compensation from the Company.
11.04 In the event that the Retirement Committee shall find
that a Member or other person entitled to a benefit is
unable to care for his affairs because of illness or
accident or is a minor or has died, the Retirement
Committee may direct that any benefit payment due him,
unless a claim shall have been made therefor by a duly
appointed legal representative, be paid to his Spouse,
a child, a parent or other blood relative, or to a
person with whom he resides, and any such payment so
made shall be a complete discharge of the liabilities
of the Plan therefor.
11.05 The Retirement Committee shall, upon direction of the
Board of Directors uniformly applicable to all
Employees similarly situated, deduct from the part of
any retirement Allowance under the Plan, all or part of
any amount paid or payable to or on account of any
Member under the provisions of any present or future
law, pension or benefit scheme of any sovereign
government, or any political subdivision thereof, on
account of which contributions have been made or
premiums or taxes paid by the Company with respect
thereto; provided that benefits payable under Title II
of the Social Security Act are not to be used to reduce
the benefits otherwise provided under this Plan except
as specifically provided in Section 5.01(d)(ii).
11.06 If any company hereafter becomes a subsidiary or
Affiliated Company of the Company, the Board of
Directors may include the employees of such subsidiary
or Affiliated Company in the membership of the Plan
upon appropriate action by such company necessary to
adopt the Plan. In such event, or if any persons
become Employees of the Company as the result of merger
or consolidation or as the result of acquisition by the
Company of all or part of the assets or business of
another company, the Board of Directors shall determine
50
to what extent, if any, credit and benefits shall be
granted for previous service with such subsidiary,
affiliated or other company, but subject to the
continued qualification of the trust for the Plan as a
tax exempt trust under the Code. Any such subsidiary
or Affiliated Company may terminate its participation
in the Plan upon appropriate action by it, in which
event the funds of the Plan held on account of Members
of such company shall be determined by the Retirement
Committee on the basis of actuarial valuation, and
shall be applied as provided in Section 11.01 in the
manner there provided if the Plan should be terminated,
or shall be segregated by the Trustee as a separate
trust, pursuant to certification to the Trustee by the
Retirement Committee, continuing the Plan as a separate
Plan for the Employees of such company under which the
board of directors of such company shall succeed to all
the powers and duties of the Board of Directors
including the appointment of the Members of the
Retirement Committee.
11.07 The Plan may not be merged or consolidated with, nor
may its assets or liabilities be transferred to, any
other plan unless each Member, Spouse, former Member,
retired Member, or contingent annuitant under the Plan
would, if the resulting plan were 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 had then terminated.
51
ARTICLE 12 - NON-ALIENATION OF BENEFITS
xii
Except as required by any applicable law, no benefit
under the Plan shall in any manner be anticipated, assigned or
alienated, and any attempt to do so shall be void. However,
payment shall be made in accordance with the provisions of any
judgment, decree, or order which:
(a) creates for, or assigns to, a Spouse, former
Spouse, child or other dependent of a Member the
right to receive all or a portion of the Member's
benefits under the Plan for the purpose of
providing child support, alimony payments or
marital property rights to that Spouse, child or
dependent,
(b) is made pursuant to a State domestic relations
law,
(c) does not require the Plan to provide any type of
benefit, or any option, not otherwise provided
under the Plan, and
(d) otherwise meets the requirements of Code
Section 414(p).
52
ARTICLE 13 - AMENDMENTS
xiii
The Board of Directors reserves the right at any time
and from time to time, and retroactively if deemed necessary or
appropriate to conform with governmental regulations or other
policies, to modify or amend in whole or in part any or all of
the provisions of the Plan; provided that no such modification or
amendment shall make it possible for any part of the funds of the
Plan to be used for, or diverted to, purposes other than for the
exclusive benefit of Members or contingent annuitants under the
Plan, prior to the satisfaction of all liabilities with respect
to them; that no modification or amendment may be made in Section
11.01 without the consent of every participating Company; and
that no modification or amendment shall be made which has the
effect of decreasing the accrued benefit of any Member or of
reducing the non-forfeitable percentage of the accrued benefit of
a Member below that non-forfeitable percentage thereof computed
under the Plan as in effect on the later of the date on which the
amendment is adopted or becomes effective pursuant to Code
Section 411(d)(6). Any modification or amendment of the
provisions of the Plan shall be voted on by a quorum of the Board
of Directors necessary to transact business and such
modifications or amendments shall be set forth in resolutions
duly adopted by the Board of Directors.
53
ARTICLE 14 - CONSTRUCTION
xiv
14.01 The Plan shall be construed, regulated and administered
under the laws of the State of Georgia.
14.02 The masculine pronoun shall mean the feminine pronoun,
and feminine the masculine, wherever appropriate.
54
ARTICLE 15 - TOP-HEAVY PROVISIONS
xv
15.01 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 15.03;
and
(b) the vesting requirement of Section 15.04.
15.02 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 Members entitled to participate in
this Plan and any Plan of an Aggregation Group.
For purposes of determining whether the Plan is
top-heavy, proportional subsidies shall be ignored
while non-proportional subsidies shall be taken
into account.
(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
Members entitled to participate in this Plan and
any plan of an Aggregation Group.
55
For purposes of Sections 15.02(a) and 15.02(b), if
any Member is a Non-Key Employee for any Plan
Year, but such Member was a Key Employee for any
prior Plan Year, such Member'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 a Member or
former Member has not performed any services for
the Company or any Affiliated Company 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 Member or former Member
shall not be taken into account for purposes of
determining whether this Plan is a Top-Heavy or
Super Top-Heavy Plan.
(d) An Member'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.
(i) Required Aggregation Group: In
determining a Required Aggregation Group
hereunder, each plan of the Company in
which a Key Employee is a participant,
and each other plan of the Company 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.
56
(ii) Permissive Aggregation Group: The
Company 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
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.
(iii) 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 Member or former
Member (and his beneficiaries) who, at any time
during the Plan Year or any of the four (4)
preceding Plan Years, is:
(i) an officer of the Company having an
annual compensation from the Company
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
15.02(g)(i), only those employers which
are incorporated shall be considered as
having officers, and no more than fifty
(50) Members (or, if lesser, the greater
of three (3) or ten percent (10%) of the
Members) shall be treated as officers.
Annual compensation means compensation
57
as defined in Code Section 415(c)(3),
but including amounts contributed by the
Company pursuant to a salary reduction
agreement which are excludable from the
Member's gross income under Code
Section 125, Code Section 402(a)(8),
Code Section 402(h), or Code
Section 403(b).
(ii) one of the ten (10) Members (A) having
annual compensation from the Company
greater than the limitation in effect
under Code Sections 415(c)(1)(A) and (B)
owning (or considered as owning within
the meaning of Code Section 318) the
largest interests in the Company. For
purposes of this Section 15.06(g)(ii),
if two (2) Members have the same
interest in the Company, the Member
having the greater annual compensation
from the Company shall be treated as
having a larger interest.
(iii) a "five percent owner" of the Company.
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 Company
or stock possessing more than five
percent (5%) of the total combined
voting power of all stock of the
Company. 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.
(iv) a "one percent owner" of the Company
having an annual compensation from the
Company 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 Company
or stock possessing more than one
percent (1%) of the total combined
voting power of all stock of the
Company. In determining percentage
ownership hereunder, employers that
would otherwise be aggregated under Code
58
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 15.02(g).
(i) An Employee's "Present Value of Accrued Retirement
Income" shall mean as of the Determination Date,
the sum of the following:
(i) the Present Value of his Accrued Benefit
as of the most recent valuation
occurring within a twelve (12) month
period ending on the Determination Date.
(ii) 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 Member'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.
(iii) with respect to unrelated rollovers and
plan-to-plan transfers (ones which are
both initiated by the Member 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
59
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.
(iv) 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:
(i) the Present Value of Accrued Retirement
Income of Key Employees under all
defined benefit plans included in that
group, and
(ii) 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.
15.03 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 Company contributions for each
Non-Key Employee, including benefits accrued in years
60
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 Member's number of
Credited Service with the Company, or (b) twenty
percent (20%). For purposes of the minimum benefit, a
Member's Credited Service shall exclude (a) Plan Years
in which the Plan is not a Top-Heavy Plan, and
(b) Credited Service completed prior to January 1,
1984. The minimum benefit required by this Section
15.03 shall be calculated using the Member's total
compensation and expressed in the form of a single life
annuity (with no ancillary benefits) beginning at such
Member's Normal Retirement Date. A Member's average
compensation shall be based on the five (5) consecutive
years for which the Member had the highest
compensation.
Notwithstanding the foregoing, in any Plan Year in
which a Non-Key Employee participates in both this Plan
and a defined contribution plan, and both such plans
are Top-Heavy Plans, the Company 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 Company 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).
15.04 Vesting Requirements for Top-Heavy Plan Years
Notwithstanding any other provisions of the Plan, for
any Top-Heavy Plan Year, the vested portion of a
Member's Accrued Retirement Income shall be determined
on the basis of the Member's Continuous Service
according to the following schedule:
Years of Service Vested Percentage
less than 2 0%
2 20%
61
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 Member's Retirement Income is
required to be suspended under the Plan.
If in any subsequent Plan Year, the Plan ceases to be a
Top-Heavy Plan, the Retirement Committee 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 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.
Members with three (3) or more years of Continuous
Service may elect to remain under the above Top-Heavy
Plan vesting schedule in any year the Plan ceases to be
top heavy.
15.05 Adjustments to Maximum Benefits for Top-Heavy Plans
(a) In the case of a Member who is a participant in a
defined benefit plan and a defined contribution
plan maintained by the Company, and such plans as
a group are determined to be Top-Heavy for any
limitation year beginning after December 31,
1983,t "1.0" shall be substituted for "1.25" in
each place it appears in the denominators of
fractions, as set forth in Article 6 of the Plan,
unless the extra minimum benefit is provided
pursuant to Section 15.01(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 Article 6 shall remain
62
unchanged, provided that in Section 15.03 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 15.03.
(c) For purposes of this Section 15.05, if the sum of
the defined benefit plan fraction and the defined
contribution fraction shall exceed 1.0 in any Plan
Year for any Member in this Plan, the Company
shall eliminate any amounts in excess of the
limits set forth in Article 6, pursuant to Section
6.01(f) of the Plan.
63
ARTICLE 16 - EARLY RETIREMENT INCENTIVE PROGRAM
xvi
16.01 Eligibility
(a) Subject to the conditions described in Section
16.01(b) below, all Members of the Plan who
(i) have completed ten or more years of Continuous
Service and have attained age 55 on or prior to
December 31, 1993; (ii) are active Employees of
the Company or are disabled and currently accruing
service under Section 4.04 of the Plan on December
31, 1993; and (iii) who elect to receive the
benefits provided under this Article 16 by
executing and allowing to become effective an
Election Form and Waiver Agreement ("Eligible
Member") shall be eligible to receive the benefits
described in Section 16.02 below. Notwithstanding
the foregoing, the benefits payable under Section
16.02 shall only be payable to an Eligible Member
who elects during the period from October 1, 1993
to November 15, 1993 (the "Window Period") to
retire on or before December 31, 1993, by filing
and allowing to become effective an Election Form
and Waiver Agreement with the Retirement Committee
no later than November 15, 1993. In the event an
Eligible Member does not submit and allow to
become effective an Election Form and Waiver
Agreement by November 15, 1993, the Retirement
Committee shall interpret such failure as an
election not to receive the benefits provided
under this Article 16.
(b) The retirement date of an Eligible Member who
elects to retire during the Window Period shall be
December 31, 1993; provided, however, that in the
sole discretion of the Company, the retirement
date of certain Eligible Members may be postponed
beyond December 31, 1993, but in no event shall
any Eligible Member's retirement date be postponed
until or beyond October 1, 1994.
16.02 Benefits
(a) In addition to any Early or Normal Retirement
Allowance to which an Eligible Member may be
entitled in accordance with the provisions of
Article 5 of the Plan, if an Eligible Member
retires from the Company in accordance with the
provisions of this Article 16 prior to his Normal
Retirement Date and elects to receive an immediate
Early Retirement Allowance in accordance with
Section 5.02, the immediate Early Retirement
64
Allowance to be received by such Eligible Member
under Section 5.02(b) shall not be reduced due to
early commencement of benefits.
(b) An Eligible Member who retires in accordance with
the provisions of Article 16 prior to the
attainment of age 62 shall be paid an amount equal
to the monthly Social Security benefits such
Eligible Member would become entitled to beginning
at age 65 based upon the Social Security law in
effect on December 31, 1993 and such Eligible
Member's Social Security earnings through his
retirement date. This Social Security Bridge
Benefit shall be paid monthly commencing on the
first day of the month next following the Eligible
Member's retirement date and shall continue to be
paid on the first day of each month thereafter up
to and including the first day of the month
following the month in which such Eligible Member
attains age 62.
16.03 Restoration to Service
Notwithstanding any provisions of Section 5.05 to the
contrary, in the event an Eligible Member who retires
in accordance with the provisions of this Article 16
subsequently returns to the service of the Company, all
benefits payable to such Eligible Member under this
Article 16 shall cease and upon the Eligible Member's
subsequent retirement, the Eligible Member shall
receive the greater of:
(a) the retirement Allowance the Member would receive
under the Plan based upon his Credited Service and
age at the date of his subsequent retirement,
reduced by the Equivalent Actuarial Value of the
retirement Allowance, excluding any amount payable
under Section 16.02(b) which the Member received
prior to his restoration to service and prior to
his normal retirement date; or
(b) the retirement Allowance the Member was actually
receiving excluding any amounts payable under
Section 16.02(b) or if the retirement Allowance
had not commenced, the retirement Allowance such
Member is eligible to receive under this Article
16.
65
ARTICLE 17 - RETIREE MEDICAL BENEFITS
xvii
17.01 Provision of Medical Benefits
The provisions of this Article 17 of the Retirement
System provide for the payment of medical benefits to
eligible retired employees of the Company and to their
spouses and dependents as provided in this Article 17.
The Board of Directors makes no promise to continue
these benefits in the future and has the right to
discontinue providing such benefits at any time, as
well as the right to change any aspect of the
arrangements for their provision, including without
limitation the class of eligible retired employees and
the classes of eligible spouses and dependents of
retired former employees, the types of benefits
covered, the amounts paid for payment or reimbursement
of retired former employees, spouses and dependents for
medical services, the identity of any insurer involved,
the means by which the medical benefits are provided
and the institution of a requirement for contributions
by covered retired employees or covered spouses or
dependents of retired employees. In the event of any
such discontinuance or change, payments or
reimbursement of covered expenses incurred prior to the
effective date of the discontinuance or change would
not be adversely affected.
17.02 Eligibility for Medical Benefits
(a) Effective September 15, 1993, a member who retires
and is receiving a distribution from the Plan
pursuant to Sections 5.01 and 5.02 or a retired
member who is entitled to receive a distribution
from the Plan pursuant to Sections 5.01 or 5.02
after retirement will be eligible for
reimbursement or payment of covered medical
expenses, as hereinafter described, provided the
member (1) was covered by the Georgia Power
Company Medical Benefits Plan immediately before
retirement; (2) is not eligible as a spouse or
dependent or otherwise for coverage under the
Georgia Power Company Medical Benefits Plan; and
(3) continues to satisfy the eligibility
requirements applicable to retired employees as
set forth in the provisions of the Georgia Power
Company Medical Benefits Plan, which is attached
hereto as Exhibit A and incorporated herein by
reference and may be changed in accordance with
the terms of the Georgia Power Company Medical
Benefits Plan. Notwithstanding the foregoing, a
former employee who was a key employee pursuant to
66
Section 15.02(g) on the date of his retirement
shall not be eligible to receive any benefits
under this Article 17.
(b) The spouses and dependents of retired members who
are eligible for reimbursement or payment of
covered medical expenses pursuant to paragraph (a)
and who were covered under the Georgia Power
Company Medical Benefits Plan immediately prior to
the member's retirement are also eligible for
reimbursement or payment of covered medical
expenses to the extent, if any, provided in the
Georgia Power Company Medical Benefits Plan, a
copy of which is attached as Exhibit A.
Notwithstanding the foregoing, a spouse or
dependent who is eligible for coverage under the
"active employee" portion of the Georgia Power
Company Medical Benefits Plan shall not be
eligible for reimbursement of medical expenses or
payment of premiums hereunder.
Coverage shall terminate (1) upon termination of
the Plan or this Article 17, or (2) in accordance
with the provisions of the Georgia Power Company
Medical Benefit Plan relating to termination of
coverage, whichever is earlier.
17.03 Contributions to the Medical Benefits Account
(a) There is hereby established a separate account to
provide the medical benefits payable pursuant to
this Article 17, called the Medical Benefits
Account. All contributions and transfers to the
Medical Benefits Account shall be held in trust by
a trustee for the payment of medical benefits
hereunder. All such contributions and transfers
shall be specifically designated to provide for
the payment of medical benefits. If such
contributions or transfers are held by a trustee
or trustees holding funds for the payment of
retirement benefits under the Plan, such
contributions and transfers (although held in a
separate account as provided above) need not be
segregated or separately invested by the trustee.
A portion of the earnings on trust assets for the
payment of both retirement and medical benefits
that have been jointly invested shall be allocated
to the Medical Benefits Account in an equitable
and reasonable manner.
Prior to the satisfaction of all liabilities for
medical benefits under this Article 17 of the
Plan, no part of the corpus or income in the
Medical Benefits Account shall be used for, or
diverted to, any purpose other than the providing
67
of such benefits. Reimbursement of the Company
for payments of premiums under the Georgia Power
Company Medical Benefits Plan for the provision of
medical benefits thereunder for Eligible
Recipients and reimbursement of the Company for
direct payment or reimbursement to Eligible
Recipients of covered medical expenses is
considered a means of providing such benefits and
is specifically permitted.
In no event shall the Company contribute any
amount under this Article 17 for any retired
employee who is or was a "key employee" (as
defined in Section 15.02(g)).
(b) Eligible Recipients shall not contribute to the
Medical Benefits Account described in paragraph
(a) but may be required to contribute under the
Georgia Power Company Medical Benefits Plan
through which such coverage is provided in such
amounts as shall be determined from time to time
by the Board of Directors. The Company shall from
time to time contribute to such Medical Benefits
Account such amounts as the Retirement Committee
shall determine, but not in excess of the
actuarially determined total cost of providing the
medical benefits described in paragraph (d) below
taking into account any Member contributions and
any transfers of excess pension assets to the
Medical Benefits Account. Anything in this Plan
to the contrary notwithstanding, the aggregate
amount of the actual contributions to the Medical
Benefits Account described in paragraph (a) may
not exceed 25% of the total actual contributions
to the Plan for all benefits under the Plan
(exclusive of contributions that may be made to
fund past service credits) on and after September
15, 1993. In the event that an Eligible
Recipient's interest in the Medical Benefits
Account is forfeited prior to termination of the
Plan, an amount equal to the amount of the
forfeiture must be applied, as soon as possible,
to reduce any Company contributions to fund the
Medical Benefits Account.
17.04 Medical Benefits Covered by the System
Medical benefits under the Plan shall be provided
through the Georgia Power Company Medical Benefits Plan
by the payment of premiums thereunder or through
reimbursement to the Company of direct payment by the
Company or reimbursement by the Company to Eligible
68
Recipients of medical expenses in accordance with the
terms and conditions, and subject to the limitations,
set forth in the provisions of the Georgia Power
Company Medical Benefits Plan attached hereto as
Exhibit A and which may be changed in accordance with
the terms of the Georgia Power Company Medical Benefit
Plan. Medical benefits shall be provided under the
Plan only to the extent there are sufficient funds to
provide such benefits available in the Medical Benefits
Account described in Section 17.03(a). In no event
shall any benefits be paid under the Plan to the extent
the same benefits are payable under any other plan,
program or arrangement of the Company. The Retirement
Committee may establish claims procedures and
administrative rules relating to the provision of
medical benefits hereunder to the extent that the
claims procedures and administrative rules under the
applicable group medical plan do not apply.
17.05 Amendment and Termination of Medical Benefits
The Board of Directors may amend, suspend, terminate,
withdraw or modify this Article 17 of the Plan in whole
or in part at any time subject to the provisions of the
Georgia Power Company Medical Benefits Plan relating to
benefits following termination or conversion rights.
The Board of Directors may permanently discontinue
contributions under this Article 17 at any time in its
sole discretion. Upon the satisfaction of all Plan
liabilities for medical benefits under the Plan, all
amounts held in the Medical Benefits Account described
in Section 17.03(a) of the Plan will be returned to the
Company. In the event the Plan is terminated, the
Company's obligation to contribute to the Medical
Benefits Account after termination shall cease, except
for benefits payable hereunder with respect to medical
expenses either paid or incurred by an Eligible
Recipient prior to the date of termination. A
termination of the provisions of this Article shall not
constitute a termination or partial termination of the
Plan for purposes of Section 11.01.
17.06 Definitions
(a) "Eligible Recipient" means a retired employee, the
employee's spouse, and the employee's dependents,
all of whom are eligible for retiree medical
benefits under the provisions of Section 17.02.
69
IN WITNESS WHEREOF, the Board of Directors of Savannah
Electric and Power Company, through its authorized officers has
adopted this amendment and restatement of the Employees'
Retirement Plan of Savannah Electric and Power Company this
day of , 199__, to be effective January
1, 1989.
SAVANNAH ELECTRIC AND POWER COMPANY
By:
Arthur M. Gignilliat, Jr.
President and Chief Executive
Officer
ATTEST:
By:
Lavonne K. Calandra
Corporate Secretary
[CORPORATE SEAL]
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70
FIRST AMENDMENT TO THE EMPLOYEES' RETIREMENT
PLAN OF SAVANNAH ELECTRIC AND POWER COMPANY
(AS AMENDED AND RESTATED EFFECTIVE
JANUARY 1, 1989)
WHEREAS, the Board of Directors of Savannah Electric and Power
Company (the "Company") heretofore adopted the amendment and
restatement of the Employees' Retirement Plan of Savannah
Electric and Power Company (the "Plan"), effective January 1,
1989, in order to comply with the Internal Revenue Code of 1986,
as amended; and
WHEREAS, the Company has authorized appropriate officers to
take proper actions which accomplish its overall intent to amend
and restate the Plan; and
WHEREAS, the Company is authorized pursuant to Article XIII of
the Plan to amend the Plan from time to time.
NOW, THEREFORE, effective January 16, 1995, the Company hereby
amends the Plan as follows:
17.07
Section 5.05(a) of the Plan is amended by deleting said
Section in its entirety and substituting the following in lieu
thereof:
5.05 Restoration of Retired Member or Former Member
to Service
(a) If a Member in receipt of an Allowance is
restored to service as an Employee on or after
his Normal Retirement Date, the following shall
apply, except with respect to temporary
employees on and after January 16, 1995:
(i) His Allowance shall be suspended for
each month during the period of
restoration which is a Suspendible
Month.
(ii) Upon the death of the Member during
the period of restoration, any
Allowance that would have been
payable to his surviving Spouse had
he not been restored to service shall
be payable or, alternatively, any
payments under an optional benefit,
if one has been elected and becomes
effective, shall begin.
(iii) Upon later retirement, payment
of the Member's Allowance shall
resume no later than the third
month after the latest
Suspendible Month during the
period of restoration, and shall
be adjusted, if necessary, in
compliance with Title 29 of the
Code of Federal Regulations,
Section 2530.203-3 in a
consistent and nondiscriminatory
manner.
17.08
Section 5.05(b) of the Plan is amended by deleting said
Section in its entirety and substituting the following in lieu
thereof:
(b) If a Member in receipt of an Allowance is
restored to service as an Employee before his
Normal Retirement Date, the following shall
apply, except with respect to temporary
employees on and after January 16, 1995:
(i) His Allowance shall cease and any
election of an optional benefit in
effect shall be void.
(ii) Any Continuous and Credited Service
to which he was entitled when he
retired or terminated service shall
be restored to him.
(iii) Upon later retirement or
termination, his Allowance shall
be based on the benefit formula
then in effect and his
Compensation and Credited
Service before and after the
period when he was not in the
service of the Company, reduced
by an amount of Equivalent
Actuarial Value to the benefits,
if any, he received before the
date of his restoration to
service.
(iv) The part of the Member's Allowance
upon later retirement payable with
respect to Credited Service rendered
before his previous retirement or
2
termination of service shall never be
less than the amount of his previous
Allowance modified to reflect any
option in effect on his later
retirement.
17.09
Except as amended herein by this First Amendment, the Plan
shall remain in full force and effect as amended and restated by
the Company prior to the adoption of this First Amendment.
IN WITNESS WHEREOF, the Company, through its duly authorized
officers, adopts this First Amendment to the Plan this 16th day
of January, 1995, to be effective as stated herein.
SAVANNAH ELECTRIC AND POWER COMPANY
By:
Arthur M. Gignilliat, Jr.
President and Chief Executive
Officer
ATTEST:
By:
Lavonne K. Calandra
Corporate Secretary
[CORPORATE SEAL]
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