Exhibit 10(f)16
EMPLOYEES' RETIREMENT PLAN
OF
SAVANNAH ELECTRIC AND POWER COMPANY
As Amended and Restated Effective January 1, 1997
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..........7
ARTICLE 3 MEMBERSHIP......................................8
ARTICLE 4 SERVICE........................................10
4.01 Continuous Service.............................10
4.02 Credited Service...............................10
4.03 Breaks in Service..............................11
4.04 Disabled Members...............................11
4.05 Service with Certain Other Employers...........12
ARTICLE 5 BENEFITS.......................................13
5.01 Normal and Late Retirement.....................13
5.02 Early Retirement...............................14
5.03 Termination of Employment......................15
5.04 Adjustment of Retirement Allowance for Social
Security Benefits..............................15
5.05 Restoration of Retired Member or Former Member
to Service.....................................16
5.06 Additional Monthly Benefit.....................18
5.07 Written Application............................19
ARTICLE 6 LIMITATIONS ON BENEFITS........................20
6.01 Maximum Benefits...............................20
ARTICLE 7 DISTRIBUTION OF BENEFITS.......................24
7.01 Surviving Spouse Benefit.......................24
7.02 Qualified Joint and Survivor Annuity...........24
7.03 Qualified Preretirement Survivor Annuity.......24
7.04 Definitions....................................27
7.05 Notice Requirements............................27
7.06 Transitional Rules.............................28
7.07 Alternative Forms of Distribution..............28
7.08 Cash-Out of Annuity Benefits...................29
7.09 Commencement of Benefits.......................30
7.10 TEFRA 242(b)(2) Transitional Rules.............31
7.11 Requirement for Direct Rollovers...............32
ARTICLE 8 CONTRIBUTIONS..................................34
ARTICLE 9 ADMINISTRATION OF THE PLAN.....................35
ARTICLE 10 MANAGEMENT OF FUNDS............................37
ARTICLE 11 CERTAIN RIGHTS AND LIMITATIONS.................38
ARTICLE 12 NON-ALIENATION OF BENEFITS.....................40
ARTICLE 13 AMENDMENTS.....................................41
ARTICLE 14 CONSTRUCTION...................................42
ARTICLE 15 TOP-HEAVY PROVISIONS...........................43
15.01 Top-Heavy Plan Requirements....................43
15.02 Determination of Top-Heavy Status..............43
15.03 Minimum Retirement Income for Top-Heavy Plan
Years..........................................46
15.04 Vesting Requirements for Top-Heavy Plan Years..47
15.05 Adjustments to Maximum Benefits for Top-Heavy
Plans..........................................48
ARTICLE 16 RETIREE MEDICAL BENEFITS.......................49
16.01 Definitions....................................49
16.02 Medical benefits...............................52
16.03 Termination of coverage........................52
16.04 Contributions or Qualified Transfers to fund
medical benefits...............................52
16.05 Pensioned Employee Contributions...............53
16.06 Amendment of Article 16........................54
16.07 Termination of Article 16......................54
16.08 Reversion of Assets upon Termination...........54
The Employees' Retirement Plan of Savannah Electric and Power Company,
as amended and restated effective January 1, 1997, (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, 1989. 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
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 ss. 1563(a) without regard to ss.ss. 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 ss.
1563(a)(1). The term "Affiliated Company" shall also include any trade
or business under common control (as defined in Code ss. 414(c)) with
the Company, or a Member of an affiliated service group (as defined in
Code ss. 414(m)) which includes the Company or any other entity
required to be aggregated with the Company pursuant to regulations
under Code ss. 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.
1.06 "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 ss. 401(k) and its applicable
regulations) or under a "cafeteria plan" (as defined under Code
ss. 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 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 ss.
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 ss. 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, for Plan Years beginning before
January 1, 1997, the rules of Code ss. 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 Section 1.09
prior to the application of this limitation.
1.10 "Computation Year" shall mean the calendar year.
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, 1997.
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 ss.
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 ss. 414(n)(5)(C)(ii), the term Employee shall not include
those Leased Employees covered by a plan described in Code ss.
414(n)(5). The term Employee for participation purposes shall not
include any individual who is classified by the Company as an
independent contractor regardless of whether such classification
is in error.
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.
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.
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, ss.ss. 2530.200b-2(b) and (c).
1.19 "Leased Employee" means any person as so defined in Code ss.
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 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, the
spouse to whom he was married at his Annuity Starting Date.
1.26 "Qualified Preretirement Survivor Annuity" shall mean 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 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
Codess.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.
ARTICLE 2 - RETIREMENT ANNUITIES PURCHASED UNDER
GROUP ANNUITY CONTRACT AND CHANGE OF FUNDING
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.
ARTICLE 3 - MEMBERSHIP
3.01 Every Employee in Company service on January 1, 1997, who was a Member
on December 31, 1996, shall continue to be a Member of the Plan on and
after January 1, 1997, provided he remains eligible under the terms of
the Plan.
3.02 Every other Employee on January 1, 1997, 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, 1997, 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 to 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 Company 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.
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.
ARTICLE 4 - SERVICE
4.01 Continuous Service
(a) Effective January 1, 1997, 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 person employed by the Company on December 31, 1996
shall receive Continuous Service for service performed
before that date equal to the Credited Service recognized
through December 31, 1996 under the Plan as in effect on
that date.
4.02 Credited Service
(a) 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 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. ss. 2530.200b-3(e)(l)(i) to
any fractional part of a year credited to the Employee under this
Section as of the date of the transfer.
4.03 Breaks in Service
(a) 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) 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) Notwithstanding any provision of the Plan to the contrary,
contributions, benefits and service credit with respect to
qualified military service will be provided in accordance
with Code ss. 414(u).
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
corporation 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 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.
ARTICLE 5 - BENEFITS
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
(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.
(iii) Effective January 1, 1994 for purposes of determining
a Member's average annual Compensation under this
paragraph (d), the determination of the 36 highest
consecutive months within the 120 months preceding
retirement shall only include those months in which
the Member receives Compensation.
(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 Qualified Joint and Survivor Annuity.
(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 thereof or
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.
(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.
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, except with respect to
temporary employees:
(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 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, ss. 2530.203-3 in a consistent and
nondiscriminatory manner
(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:
(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
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 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 Codess. 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 a 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 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 the
Company.
5.06 Additional Monthly Benefit
(a) 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) or (c)
below, as applicable.
The "additional monthly amount" is calculated as (i) a
percentage of the Member's first $300 of monthly
Allowance set forth below, multiplied by (ii) the
number of years the Member was retired (A) prior to
January 1, 1990, and (B) prior to January 1, 1995 but
after January 1, 1990, as applicable in any event, for
both the additional monthly amount effective June 1,
1991 and June 1, 1996, the minimum additional monthly
amount to be added to a Member's Allowance shall equal
$25.00 per month.
Effective June 1, 1991, the percentage increases and
the years of retirement for which they are applicable
are as follows:
Years of Retirement Percentage Increase
as of 1/1/90 for All Prior Years
Less than 5 3.75%
5 to 10 4.0%
10 to 15 4.5%
15 or more 5.0%
Effective June 1, 1996, the percentage increases and
the years of retirement for which they are applicable
are as follows:
Percentage Increase
Years of Retirement for Each Year of
as of 1/1/95 Retirement Since 1/1/90
Less than 5 3.5%
5 to 9 4.0%
10 to 14 4.5%
15 or more 5.0%
(b) Members eligible for the additional monthly amount
made effective as of June 1, 1991 are those retired
Members who retired directly from active status on or
before June 1, 1991.
(c) Members eligible for the additional monthly amount
made effective June 1, 1996 are those Members who
retired directly from active status before January 1,
1994.
(d) If an adjustment of retirement Allowance for Social
Security benefits option was elected pursuant to
Section 5.04, the additional monthly benefit shall be
calculated on the Allowance before such adjustment.
(e) Upon the death of a Member eligible for an additional
monthly amount, such amount shall be paid to the
Member's Spouse regardless of the method of
distribution elected by a Member. With regard to the
additional monthly amount made effective June 1,
1996, it shall be determined (i) based on the
Allowance being paid as of June 1, 1996, or (ii) if
no allowance is being paid but the Member's Spouse is
receiving an additional monthly amount in accordance
with the preceding sentence, based on the amount such
Spouse is receiving as of June 1, 1996.
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.
ARTICLE 6 - LIMITATIONS ON BENEFITS
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. 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) For limitation years beginning before January 1, 2000, 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.
(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
(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 remaining portion of the benefits
under the plan.
(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, and shall include, but not by way of
limitation, bonuses, overtime payments, commissions
and, for limitation years beginning on and after
January 1, 1998, any elective deferrals as defined in
Code Section 402(g)(3) and any amount contributed by
an Employer on behalf of the Employee under any Code
Section 125 or 457 arrangement, and shall exclude
other 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.
(f) Notwithstanding any provisions contained herein to the
contrary, in the event that, for limitation years beginning
before January 1, 2000, 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 ss. 415 and the
regulations thereunder, the terms of which are specifically
incorporated herein by reference.
ARTICLE 7 - DISTRIBUTION OF BENEFITS
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.
(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 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 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 Paragraph (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.
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 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.
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.
(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 due
date 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, 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
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 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
(a) 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
or equal to $3,500 (and if the present value of such Member's
Allowance never exceeded $3,500) for distributions before
January 1, 1998, or if the present value of a Member's
Allowance upon termination of employment is less than or equal
to $5,000 (and if the present value of such Member's Allowance
never exceeded $5,000) for distributions on or after January
1, 1998. 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.
(b) This Section 7.08(b) shall apply to all distributions from the
Plan and from annuity contracts purchased to provide benefits
other than distributions described in Section 1.417-1T(e)(3)
of the income tax regulations issued under the Retirement
Equity Act of 1984. For purposes of determining whether the
present value of (A) a Member's vested accrued benefit; (B) a
qualified joint and survivor annuity, within the meaning of
Section 417(b) of the Code; or (C) a qualified preretirement
survivor annuity within the meaning of Section 417(c)(1) of
the Code exceeds $3,500 for distributions before January 1,
1998, or $5,000 for distributions on or after January 1, 1998,
the present value of such benefits or annuities shall be
calculated by using an interest rate no greater than the
Applicable Interest Rate and in no event shall the present
value of any such benefit or annuity determined under this
Section 7.08(b) be less than the present value of such
benefits or annuities determined using the Applicable Interest
Rate. "Applicable Interest Rate" for this purpose shall be
calculated by using the annual rate of interest on 30-year
Treasury securities for the month of November in the Plan Year
which precedes the Plan Year in which such present value is
determined and by using the prevailing commissioners' standard
table used to determine reserves for group annuity contracts
as in effect on the date as of which the present value is
being determined. In no event shall the amount of any benefit
or annuity determined under this Section 7.08(b) exceed the
maximum benefit permitted under Section 415 of the Code.
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
(i) 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
or if later, the calendar year in which the Member
retires.
(ii) Notwithstanding paragraph (i) above, with respect to
any member who is a five-percent owner as defined in
Section 15.02(g)(iii) with regard to the Plan Year
ending in which the member attains age 701/2or any
member who commenced receipt of his benefits in
accordance with the Required Minimum Distributions
provisions as they existed prior to January 1, 1997,
the payment of his benefits shall commence no later
than April 1 of the Plan Year following the Plan Year
in which the Member attains age 701/2. With respect
to a Member who commences receipt of his allowance
while in active 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 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. 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.
(iii) With respect to a Member who retires after attaining
age 70-1/2 and who has not previously commenced
receipt of his Allowance while on active service, he
shall receive his Allowance based on his actual
retirement date, but which his Allowance shall not be
less than the Equivalent Actuarial Value of his
Allowance as of the first of the month following
attainment of age 70-1/2.
(c) Distribution Upon Death of Member
(i) Death After Commencement of Benefits
If the Member dies before his entire non-forfeitable
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 distribution 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 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 ss.
401(a)(9) as in effect on December 31, 1983, and shall also
satisfy Code ss.ss. 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 ss.
401(a)(9); and
(C) the portion of any distribution that is not
includible in gross income (determined
without regard to the exclusion for net
unrealized appreciation with respect to
employer securities).
(ii) Eligible Retirement Plan
An Eligible Retirement Plan is an individual
retirement account described in ss. Code 408(a), an
individual retirement annuity described in Code ss.
408(b), an annuity plan described in Code ss. 403(a),
or a qualified trust described in Code ss. 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 ss. 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.
ARTICLE 8 - CONTRIBUTIONS
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.
ARTICLE 9 - ADMINISTRATION OF THE PLAN
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 connection with any
questions of fact which may arise regarding the operation of
the Plan;
(g) Making such rules and regulations with reference to the
operation of the Plan as it may deem necessary or advisable,
provided that such rules and regulations shall not be
inconsistent with the express terms of the Plan or ERISA;
(h) Prescribing such procedures and adopting such forms as it
determines necessary under the terms of the Plan;
(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 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 as to any disputed question shall be conclusive.
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.
ARTICLE 10 - MANAGEMENT OF FUNDS
All the funds of the Plan except those held by an insurance
company shall be held by 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 ss. 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).
ARTICLE 11 - CERTAIN RIGHTS AND LIMITATIONS
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 S 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 subparagraph (b)
of all benefits pay; 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
(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-excludable 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 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 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.
ARTICLE 12 - NON-ALIENATION OF BENEFITS
Except as required or permitted by Code ss. 401(a)(13) or by any
other 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 ss. 414(p).
ARTICLE 13 - AMENDMENTS
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 ss. 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.
ARTICLE 14 - CONSTRUCTION
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.
ARTICLE 15 - TOP-HEAVY PROVISIONS
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.
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 55 401(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.
(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 ss.ss. 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 Codess.
415(b) (1)(A) for any such Plan Year. For purposes of
this Section 15.02(g) (i), only those employers which
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 as defined in Codess.
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 Codess. 125, Codess. 402(a)(8), Codess. 402(h),
or Codess. 403(b).
(ii) one of the ten (10) Members (A) having annual
compensation from the Company greater than the
limitation in effect under Code ss.ss. 415(c)(1)(A)
and (B) owning (or considered as owning within the
meaning of Code ss. 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 ss.
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 ss.ss. 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 Codess.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 Company. In
determining percentage ownership hereunder, employers
that would otherwise be aggregated under Codess.ss.
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 Codess.ss. 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 for 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 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 per (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
ss. 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 ss.
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 ss. 1.416-l(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%
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 non-forfeitable 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
unchanged, provided that in Section 15.03 above, "three
percent (3%)" shall be substituted for "two percent (2%)"
and "twenty percent (20%)" shall increased by one (1)
percentage point (but not 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.
ARTICLE 16 - RETIREE MEDICAL BENEFITS
16.01 Definitions. The following words and phraseology as used herein shall
have the following meanings unless a different meaning is plainly
required by the context:
(a) "Pensioned Employee" means 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 Section 15.02(g)
on the date of his retirement shall not be eligible to receive
any benefits under this Article 16.
(b) "Dependents" means 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.
(c) "Qualified Transfer" means a transfer of Excess Pension Assets
of the Plan to a Health Benefits Account after December 31,
1990, but before December 31, 2000, which satisfies the
requirements set forth in paragraphs (1) through (6) below.
(1) No more than 1 transfer per Plan Year may be treated as a
Qualified Transfer.
(2) The amount of Excess Pension Assets which may be
transferred in a Qualified Transfer shall not exceed a reasonable
estimate of the amount the Company will pay (directly or through
reimbursement) out of the Health Benefits Accounts for Qualified
Current Retiree Health Liabilities during the Plan Year of the
transfer.
(3) (A) Any assets transferred to a Health Benefits Account in
a Qualified Transfer (and any income allocated thereto) shall only be
used to pay Qualified Current Retiree Health Liabilities (whether
directly or through reimbursement).
(B) Any assets transferred to a Health Benefits
Account in a Qualified Transfer (and any income allocable
thereto) which are not used as provided in Section
16.01(c)(3)(A) above shall be transferred from the Health
Benefits Account back to the Plan.
(C) For purposes of this Section 16.01(c)(3), any
amount transferred from a Health Benefits Account shall be
treated as paid first out of the assets and income described
in Section 16.01(c)(3)(A) above.
(4) The Accrued Retirement Income of any Pensioned Employee or
Dependent under the Plan shall become nonforfeitable in the same manner
which would be required if the Plan had terminated immediately before
the Qualified Transfer (or in the case of a Pensioned Employee who
terminated service during the 1 year period ending on the date of the
Qualified Transfer, immediately before such termination).
(5) Effective for Qualified Transfers occurring on or before
December 8, 1994, the Applicable Company Cost for each Plan Year during
the Cost Maintenance Period shall not be less than the higher of the
Applicable Company Cost for each of the two Plan Years immediately
preceding the Plan Year of the Qualified Transfer. Effective for
Qualified Transfers occurring after December 8, 1994, the medical
benefits plan set forth in Exhibit A shall provide that the Applicable
Health Benefits provided by the Company during each Plan Year during
the Benefit Maintenance Period shall be substantially the same as the
Applicable Health Benefits provided by the Company during the Plan Year
immediately preceding the Plan Year of the Qualified Transfer.
Notwithstanding any other provision to the contrary in this Section
16.01(c)(5), the Company may elect at any time during the Plan Year to
have this Section 16.01(c)(5) applied separately with respect to
Pensioned Employees eligible for benefits under Title XVIII of the
Social Security Act and with respect to Pensioned Employees which are
not so eligible.
(6) For purposes of this Section 16.01(c), the following words
and phraseology shall have the following meanings unless a different
meaning is plainly required by the context:
(A) "Applicable Company Cost" means, with respect to
any Plan Year, the amount determined by dividing
(i) the Qualified Current Retiree Health
Liabilities of the Company for such Plan Year
determined (I) without regard to any reduction under
Section 16.01(c)(6)(G), and (II) in the case of a
Plan Year in which there was no Qualified Transfer in
the same manner as if there had been such a transfer
at the end of the Plan Year, by
(ii) the number of individuals to whom
coverage for Applicable Health Benefits was provided
during such Plan Year.
(B) "Applicable Health Benefits" means health
benefits or coverage which are provided to Pensioned Employees
who immediately before the Qualified Transfer are eligible to
receive such benefits and their Dependents.
(C) "Benefit Maintenance Period" means the period of
five (5) Plan Years beginning with the Plan Year in which the
Qualified Transfers occurs.
(D) "Cost Maintenance Period" means the period of
five (5) Plan Years beginning with the taxable year in which
the Qualified Transfer occurs. If a Plan Year is in two (2) or
more overlapping Cost Maintenance periods, this Section
16.01(c)(6)(D) shall be applied by taking into account the
highest Applicable Company Cost required to be provided under
Section 16.01(c)(6)(A) for such Plan Year.
(E) "Excess Pension Assets" means the excess, if any,
of
(i) the amount determined under Code Section
412(c)(7)(A)(ii), over
(ii) the greater of: (I) the amount
determined under Code Section 412(c)(7)(A)(i), or
(II) 125 percent of current liability (as defined in
Code Section 412(c)(7)(B)).
The determination under this paragraph shall
be made as of the most recent valuation date of the
Plan preceding the Qualified Transfer.
(F) "Health Benefits Account" means an account
established and maintained under Code Section 401(h).
(G) "Qualified Current Retiree Health Liabilities"
means, with respect to any Plan Year, the aggregate amounts,
including administrative expenses, which would have been
allowable as a deduction to the Company for payment of
Applicable Health Benefits provided during the Plan Year
assuming such Applicable Health Benefits were provided
directly by the Company and the Company used the cash receipts
and disbursements method of accounting. For purposes of the
preceding sentence, the rule of Code Section 419(c)(3)(B)
shall apply.
Effective for Qualified Transfers occurring on or
before December 8, 1994, the amount determined in the
paragraph above shall be reduced by any amount previously
contributed to a Health Benefits Account or welfare benefit
fund, as defined in Code Section 419(e)(1), to pay for the
Qualified Current Retiree Health Liabilities. Effective for
Qualified Transfers occurring after December 8, 1994, the
amount determined under the preceding paragraph shall be
reduced by the amount which bears the same ratio to such
amount as the value (as of the close of the Plan Year
preceding the year of the Qualified Transfer) of the assets in
all Health Benefits Accounts or welfare benefit funds, as
defined in Code Section 419(e)(1), set aside to pay the
Qualified Current Retiree Health Liability, bears to the
present value of the Qualified Current Retiree Health
Liabilities for all Plan Years determined without regard to
this paragraph.
16.02 Medical benefits 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 for its
payment to Pensioned Employees or their Dependents of medical expenses
in accordance with the terms and conditions of the Georgia Power
Company Medical Benefits Plan attached hereto as Exhibit A. Medical
benefits shall be provided under the Plan only to the extent there are
sufficient funds to provide such benefits. 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.
16.03 Termination of coverage.
(a) Coverage of any Pensioned Employee shall cease as follows:
(1) when Article 16 is amended, terminated, or
discontinued in accordance with its terms; or
(2) when the Pensioned Employee fails to make when due
any required contribution; or
(3) as otherwise provided in Exhibit A.
(b) Coverage of any Dependent shall cease as follows:
(1) when Article 16 is amended, terminated, or
discontinued in accordance with its terms; or
(2) when the Pensioned Employee fails to make when due
any required contribution; or
(3) as otherwise provided in Exhibit A.
16.04 Contributions or Qualified Transfers to fund medical benefits.
(a) Any contributions which the Company deems necessary to provide
the medical benefits under Article 16 will be made from time
to time by or on behalf of the Company, and contributions
shall be required of the Pensioned Employees to the Company's
medical benefit plan in amounts determined in the sole
discretion of the Company from time to time. All Company
contributions shall be made to the Trustee under the Trust
Agreement provided for in Article 10 and shall be allocated to
a separate account maintained solely to fund the medical
benefits provided under this Article 16. The Company shall
designate that portion of any contribution to the Plan
allocable to the funding of medical benefits under this
Article 16. In the event that a Pensioned Employee's interest
in an account, or his Dependents', maintained pursuant to this
Article 16 is forfeited prior to termination of the Plan, the
forfeited amount shall be applied as soon as possible to
reduce Company contributions made under this Article 16. In no
event at any time prior to the satisfaction of all liabilities
under this Article 16 shall any part of the corpus or income
of such separate account be used for, or diverted to, purposes
other than for the exclusive purpose of providing benefits
under this Article 16.
The amount of contributions to be made by or on behalf of the
Company for any Plan Year, if any, shall be reasonable and
ascertainable and shall be determined in accordance with any
generally accepted actuarial method which is reasonable in
view of the provisions and coverage of Article 16, the funding
medium, and any other applicable considerations. However, the
Company is under no obligation to make any contributions under
Article 16 after Article 16 is terminated, except to fund
claims for medical expenses incurred prior to the date of
termination.
The medical benefits provided under this Article 16, when
added to any life insurance protection provided under the
Plan, shall be subordinate to the retirement benefits provided
under the Plan.
Anything in this Plan to the contrary notwithstanding, the
aggregate amount of the actual contributions made pursuant to
this Article 16 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.
(b) Effective September 15, 1993, the Company shall have the
right, in its sole discretion, to make a Qualified Transfer of
all or a portion of any Excess Pension Assets contributed to
fund Retirement Income under the Plan to the Health Benefits
Accounts to fund medical benefits under this Article 16.
16.05 Pensioned Employee Contributions. It shall be the sole responsibility
of the Pensioned Employee to notify the Company promptly in writing
when a change in the amount of the Pensioned Employee's contribution is
in order because a Dependent has become ineligible for coverage under
this Article 16. No person shall become covered under this Article 16
for whom the Pensioned Employee has not made the required contribution.
Any contribution paid by a Pensioned Employee for any person after such
person shall have become ineligible for coverage under this Article 16
shall be returned upon written request but only provided such written
request by or on behalf of the Pensioned Employee is received by the
Company within ninety (90) days from the date coverage terminates with
respect to such ineligible person.
16.06 Amendment of Article 16. The Company reserves the right, through action
of its Board of Directors, to amend Article 16 (including Exhibit A)
pursuant to Article 13 or the Trust without the consent of any
Pensioned Employee, or his Dependents, provided, however, that no
amendment of this Article or the Trust shall cancel the payment or
reimbursement of expenses for claims already incurred by a Pensioned
Employee or his Dependent prior to the date of any amendment, nor shall
any such amendment increase the duties and obligations of the Trustee
except with its consent. This Article 16, as set forth in the Plan
document, is not a contract and non-contributory benefits hereunder are
provided gratuitously, without consideration from any Pensioned
Employee or his Dependents. The Company makes no promise to continue
these benefits in the future and rights to future benefits will never
vest. In particular, retirement or the fulfillment of the prerequisites
for a retirement benefit pursuant to the terms of the Plan or under the
terms of any other employee benefit plan maintained by the Company
shall not confer upon any Pensioned Employee or Dependents any right to
continued benefits under this Article 16.
16.07 Termination of Article 16. Although it is the intention of the Company
that this Article shall be continued and the contribution shall be made
regularly thereto each year, the Company, by action of its Board of
Directors pursuant to Article 13, may terminate this Article 16 or
permanently discontinue contributions at any time in its sole
discretion. This Article 16, as set forth in the Plan document, is not
a contract and non-contributory benefits hereunder are provided
gratuitously, without consideration from any Pensioned Employee or his
Dependents. The Company makes no promise to continue these benefits in
the future and rights to future benefits will never vest. In
particular, retirement or the fulfillment of the prerequisites for a
retirement benefit pursuant to the terms of the Plan or under the terms
of any other employee benefit plan maintained by the Company shall not
confer upon any Pensioned Employee or his Dependents any right to
continued benefits under this Article 16.
16.08 Reversion of Assets upon Termination. Upon the termination of this
Article 16 and the satisfaction of all liabilities under this Article
16, all remaining assets in the separate account described in this
Article 16 shall be returned to the Company.
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,
1997.
SAVANNAH ELECTRIC AND POWER COMPANY
By:
ATTEST:
By:
[CORPORATE SEAL)