EXHIBIT 10(a)61
THE SOUTHERN COMPANY
EMPLOYEE SAVINGS PLAN
As Amended and Restated
Effective January 1, 1997
TABLE OF CONTENTS
ARTICLE I - PURPOSE.................................................1
ARTICLE II - DEFINITIONS............................................2
2.1 "Account"..................................................2
2.2 "Actual Contribution Percentage Test"......................2
2.3 "Actual Deferral Percentage"...............................2
2.4 "Actual Deferral Percentage Test"..........................2
2.5 "Affiliated Employer"......................................2
2.6 "Aggregate Account"........................................2
2.7 "Aggregation Group"........................................3
2.8 "Annual Addition"..........................................3
2.9 "Average Actual Deferral Percentage".......................3
2.10 "Average Contribution Percentage"..........................4
2.11 "Beneficiary"..............................................4
2.12 "Board of Directors".......................................4
2.13 "Break-in-Service Date"....................................4
2.14 "Code".....................................................4
2.15 "Committee"................................................4
2.16 "Common Stock".............................................4
2.17 "Company"..................................................4
2.18 "Compensation".............................................4
2.19 "Contribution Percentage"..................................5
2.20 "Defined Benefit Plan Fraction"............................5
2.21 "Defined Contribution Plan Fraction".......................5
2.22 "Determination Date".......................................6
2.23 "Determination Year".......................................6
2.24 "Direct Rollover"..........................................6
2.25 "Distributee"..............................................6
2.26 "Elective Employer Contribution"...........................6
2.27 "Eligible Employee"........................................6
2.28 "Eligible Participant".....................................7
2.29 "Eligible Retirement Plan".................................7
2.30 "Eligible Rollover Distribution"...........................7
2.31 "Employee".................................................7
2.32 "Employer Matching Contribution"...........................7
2.33 "Employing Company"........................................7
2.34 "Enrollment Date"..........................................7
2.35 "ERISA"....................................................7
2.36 "Excess Aggregate Contributions"...........................7
2.37 "Excess Deferral Amount"...................................8
2.38 "Excess Deferral Contributions"............................8
2.39 "Highly Compensated Employee"..............................8
2.40 "Hour of Service"..........................................8
2.41 "Investment Fund"..........................................8
2.42 "Key Employee".............................................8
2.43 "Limitation Year"..........................................8
2.44 "Look-Back Year"...........................................8
2.45 "Non-Highly Compensated Employee"..........................8
2.46 "Normal Retirement Date"...................................8
2.47 "One-Year Break in Service"................................9
2.48 "Participant"..............................................9
2.49 "Permissive Aggregation Group".............................9
2.50 "Plan".....................................................9
2.51 "Plan Year"................................................9
2.52 "Present Value of Accrued Retirement Income"...............9
2.53 "Required Aggregation Group"...............................9
2.54 "Rollover Contribution"....................................9
2.55 "SEPCO"....................................................9
2.56 "SEPCO Plan"...............................................9
2.57 "SEPCO Transferred Account"...............................10
2.58 "Super-Top-Heavy Group"...................................10
2.59 "Surviving Spouse"........................................10
2.60 "Top-Heavy Group".........................................10
2.61 "Trust"or "Trust Fund"....................................10
2.62 "Trust Agreement".........................................10
2.63 "Trustee".................................................10
2.64 "Valuation Date"..........................................10
2.65 "Voluntary Participant Contribution"......................10
2.66 "Year of Service".........................................10
ARTICLE III - PARTICIPATION........................................12
3.1 Eligibility Requirements..................................12
3.2 Participation upon Reemployment...........................12
3.3 No Restoration of Previously Distributed Benefits.........12
3.4 Loss of Eligible Employee Status..........................12
3.5 Special Rule for Scott Paper Company Energy Complex
Employees.................................................13
3.6 Former Commonwealth Edison of Indiana Employees...........13
3.7 Military Leave............................................13
ARTICLE IV - ELECTIVE EMPLOYER CONTRIBUTIONS AND VOLUNTARY
PARTICIPANT CONTRIBUTIONS..........................................14
4.1 Elective Employer Contributions...........................14
4.2 Maximum Amount of Elective Employer Contributions.........14
4.3 Distribution of Excess Deferral Amounts...................14
4.4 Additional Rules Regarding Elective Employer Contributions15
4.5 Section 401(k) Nondiscrimination Tests....................16
4.6 Voluntary Participant Contributions.......................19
4.7 Manner and Time of Payment of Elective Employer
Contributions and Voluntary Participant Contributions.....19
4.8 Change in Contribution Rate...............................19
4.9 Change in Contribution Amount.............................20
4.10 Rollover Contributions and Direct Transfers from
the SEPCO and ECMC Plans..................................20
4.11 Rollovers from Other Plans................................20
ARTICLE V - EMPLOYER MATCHING CONTRIBUTIONS........................22
5.1 Amount of Employer Matching Contributions.................22
5.2 Payment of Employer Matching Contributions................22
5.3 Limitations on Employer Matching Contributions and
Voluntary Participant Contributions.......................22
5.4 Multiple Use Limitation...................................25
5.5 Reversion of Employing Company Contributions..............25
5.6 Correction of Prior Incorrect Allocations and
Distributions.............................................26
ARTICLE VI - LIMITATIONS ON CONTRIBUTIONS..........................27
6.1 Section 415 Limitations...................................27
6.2 Correction of Contributions in Excess of Section
415 Limits................................................28
6.3 Combination of Plans......................................28
ARTICLE VII - SUSPENSION OF CONTRIBUTIONS..........................30
7.1 Suspension of Contributions...............................30
7.2 Resumption of Contributions...............................30
ARTICLE VIII - INVESTMENT OF CONTRIBUTIONS.........................31
8.1 Investment Funds..........................................31
8.2 Investment of Participant Contributions...................31
8.3 Investment of Employer Matching Contributions.............31
8.4 Investment of Earnings....................................31
8.5 Transfer of Assets between Funds..........................31
8.6 Change in Investment Direction............................32
8.7 Section 404(c) Plan.......................................32
ARTICLE IX - MAINTENANCE AND VALUATION OF PARTICIPANTS'ACCOUNTS....33
9.1 Establishment of Accounts.................................33
9.2 Valuation of Investment Funds.............................33
9.3 Rights in Investment Funds................................33
ARTICLE X - VESTING................................................34
10.1 Vesting...................................................34
ARTICLE XI - WITHDRAWALS AND LOANS.................................35
11.1 Withdrawals by Participants...............................35
11.2 Notice of Withdrawal......................................36
11.3 Form of Withdrawal........................................36
11.4 Minimum Withdrawal........................................36
11.5 Source of Withdrawal......................................36
11.6 Requirement of Hardship...................................36
11.7 Loans to Participants.....................................38
11.8 Special Waiver for Participants Employed in the
United Kingdom............................................39
ARTICLE XII - DISTRIBUTION TO PARTICIPANTS.........................41
12.1 Distribution upon Retirement..............................41
12.2 Distribution upon Disability..............................42
12.3 Distribution upon Death...................................42
12.4 Designation of Beneficiary in the Event of Death..........42
12.5 Distribution upon Termination of Employment...............43
12.6 Commencement of Benefits..................................43
12.7 Transfer between Employing Companies......................44
12.8 Distributions to Alternate Payees.........................44
12.9 Requirement for Direct Rollovers..........................45
12.10 Consent and Notice Requirements...........................45
12.11 Form of Payment...........................................45
12.12 Partial Distribution upon Termination of Employment.......45
ARTICLE XIII - ADMINISTRATION OF THE PLAN..........................47
13.1 Membership of Committee...................................47
13.2 Acceptance and Resignation................................47
13.3 Transaction of Business...................................47
13.4 Responsibilities in General...............................47
13.5 Committee as Named Fiduciary..............................47
13.6 Rules for Plan Administration.............................48
13.7 Employment of Agents......................................48
13.8 Co-Fiduciaries............................................48
13.9 General Records...........................................48
13.10 Liability of the Committee................................48
13.11 Reimbursement of Expenses and Compensation of Committee...49
13.12 Expenses of Plan and Trust Fund...........................49
13.13 Responsibility for Funding Policy.........................49
13.14 Management of Assets......................................49
13.15 Notice and Claims Procedures..............................50
13.16 Bonding...................................................50
13.17 Multiple Fiduciary Capacities.............................50
13.18 Change in Administrative Procedures.......................50
ARTICLE XIV - TRUSTEE OF THE PLAN..................................51
14.1 Trustee...................................................51
14.2 Purchase of Common Stock..................................51
14.3 Voting of Common Stock....................................51
14.4 Voting of Other Investment Fund Shares....................52
14.5 Uninvested Amounts........................................52
14.6 Independent Accounting....................................52
ARTICLE XV - AMENDMENT AND TERMINATION OF THE PLAN.................53
15.1 Amendment of the Plan.....................................53
15.2 Termination of the Plan...................................53
15.3 Merger or Consolidation of the Plan.......................53
ARTICLE XVI - TOP-HEAVY REQUIREMENTS...............................55
16.1 Top-Heavy Plan Requirements...............................55
16.2 Determination of Top-Heavy Status.........................55
16.3 Minimum Allocation for Top-Heavy Plan Years...............56
16.4 Adjustments to Maximum Benefit Limits for Top-Heavy Plans.56
ARTICLE XVII - GENERAL PROVISIONS..................................58
17.1 Plan Not an Employment Contract...........................58
17.2 No Right of Assignment or Alienation......................58
17.3 Payment to Minors and Others..............................58
17.4 Source of Benefits........................................59
17.5 Unclaimed Benefits........................................59
17.6 Governing Law.............................................59
ARTICLE XVIII - SPECIAL REQUIREMENTS FOR ACCOUNT BALANCES
ATTRIBUTABLE TO ACCRUED BENEFITS TRANSFERRED FROM THE SEPCO PLAN...60
18.1 SEPCO Transferred Accounts................................60
18.2 In-Service Withdrawals from SEPCO Transferred Accounts....60
18.3 Loans from SEPCO Transferred Accounts.....................60
18.4 Distribution of SEPCO Transferred Accounts................60
18.5 Code Section 411(d)(6) Protected Benefits.................62
THE SOUTHERN COMPANY
EMPLOYEE SAVINGS PLAN
As Amended and Restated
Effective January 1, 1997
ARTICLE I
PURPOSE
The purpose of the Plan is to encourage employee thrift, to create
added employee interest in the affairs of The Southern Company, to provide a
means for becoming a shareholder in The Southern Company, to supplement
retirement and death benefits, and to create a competitive compensation program
for employees through the establishment of a formal plan under which
contributions by and on behalf of Participants are supplemented by contributions
of Employing Companies. This Plan is intended to be a stock bonus plan, and all
contributions made by an Employing Company to this Plan are expressly
conditioned upon the deductibility of such contributions under Code Section 404.
The Plan was originally effective March 1, 1976 and is being amended and
restated effective as of January 1, 1997, in order to incorporate a variety of
plan design and other changes.
ARTICLE II
DEFINITIONS
All references to articles, sections, subsections, and paragraphs shall
be to articles, sections, subsections, and paragraphs of this Plan unless
another reference is expressly set forth in this Plan. Any words used in the
masculine shall be read and be construed in the feminine where they would so
apply. Words in the singular shall be read and construed in the plural, and all
words in the plural shall be read and construed in the singular in all cases
where they would so apply.
For purposes of this Plan, unless otherwise required by the context,
the following terms shall have the meanings set forth opposite such terms:
2.1 "Account" shall mean the total amount credited to the account of a
Participant, as described in Section 9.1.
2.2 "Actual Contribution Percentage Test" shall mean the test described
in Section 5.3(a).
2.3 "Actual Deferral Percentage" shall mean the ratio (expressed as a
percentage) of Elective Employer Contributions on behalf of an Eligible
Participant for the Plan Year to the Eligible Participant's compensation for the
Plan Year. For the purpose of determining an Eligible Participant's Actual
Deferral Percentage for a Plan Year, the Committee may elect to consider an
Eligible Participant's compensation for (a) the entire Plan Year or (b) that
portion of the Plan Year in which the Eligible Participant was eligible to have
Elective Employer Contributions made on his behalf, provided that such election
is applied uniformly to all Eligible Participants for the Plan Year. The Actual
Deferral Percentage of an Eligible Participant who does not have Elective
Employer Contributions made on his behalf shall be zero.
2.4 "Actual Deferral Percentage Test" shall mean the test described in
Section 4.5(a).
2.5 "Affiliated Employer" shall mean an Employing Company and (a) any
corporation which is a member of a controlled group of corporations (as defined
in Section 414(b) of the Code) which includes such Employing Company, (b) any
trade or business (whether or not incorporated) which is under common control
(as defined in Section 414(c) of the Code) with such Employing Company, (c) any
organization (whether or not incorporated) which is a member of an affiliated
service group (as defined in Section 414(m) of the Code) which includes such
Employing Company, and (d) any other entity required to be aggregated with such
Employing Company pursuant to regulations under Section 414(o) of the Code.
Notwithstanding the foregoing, for purposes of applying the limitations of
Article VI, the term Affiliated Employer shall be adjusted as required by Code
Section 415(h).
2.6 "Aggregate Account" shall mean with respect to a Participant as of
the Determination Date, the sum of the following:
(a) the Account balance of such Participant as of the
most recent valuation occurring within a twelve-month period
ending on the Determination Date;
(b) an adjustment for any contributions due as of the
Determination Date;
(c) any Plan distributions, including unrelated
rollovers and plan-to-plan transfers (ones which are both
initiated by the Employee and made from a plan maintained by
one employer to a plan maintained by another employer), but
not related rollovers or plan-to-plan transfers (ones either
not initiated by the Employee or made to a plan maintained by
the same employer), made within the Plan Year that includes
the Determination Date or within the four preceding Plan
Years, including distributions made prior to January 1, 1984,
and distributions made under a terminated plan which if it had
not been terminated would have been required to be included in
an Aggregation Group;
(d) any Employee contributions, whether voluntary or
mandatory;
(e) unrelated rollovers and plan-to-plan transfers to
this Plan accepted prior to January 1, 1984; and
(f) related rollovers and plan-to-plan transfers to
this Plan.
2.7 "Aggregation Group" shall mean either a Required Aggregation Group
or a Permissive Aggregation Group.
2.8 "Annual Addition" shall mean the amount allocated to a
Participant's Account and accounts under all defined contribution plans
maintained by the Affiliated Employers during a Limitation Year that constitutes
(a) Affiliated Employer contributions,
(b) Voluntary Participant Contributions,
(c) forfeitures, if any, allocated to a Participant's
Account or accounts under all defined contribution plans
maintained by the Affiliated Employers, and
(d) amounts described in Sections 415(l)(1) and
419A(d)(2) of the Code.
2.9 "Average Actual Deferral Percentage" shall mean the average
(expressed as a percentage) of the Actual Deferral Percentages of the Eligible
Participants in a group.
2.10 "Average Contribution Percentage" shall mean the average
(expressed as a percentage) of the Contribution Percentages of the Eligible
Participants in a group.
2.11 "Beneficiary" shall mean any person(s) who, or estate(s),
trust(s), or organization(s) which, in accordance with the provisions of Section
12.4, become entitled to receive benefits upon the death of a Participant.
2.12 "Board of Directors" shall mean the Board of Directors of Southern
Company Services, Inc.
2.13 "Break-in-Service Date" means the earlier of:
(a) the date on which an Employee terminates employment, is discharged,
retires, or dies; or
(b) the last day of an approved leave of absence including any
extension.
In the case of an individual who is absent from work for maternity or
paternity reasons, such individual shall not incur a Break-in-Service Date
earlier than the expiration of the second anniversary of the first date of such
absence; provided, however, that the twelve-consecutive-month period beginning
on the first anniversary of the first date of such absence shall not constitute
a Year of Service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (a) by reason of the pregnancy
of the Employee, (b) by reason of a birth of a child of the Employee, (c) by
reason of the placement of a child with the Employee in connection with the
adoption of such child by such Employee, or (d) for purposes of caring for such
child for a period beginning immediately following such birth or placement.
2.14 "Code" shall mean the Internal Revenue Code of 1986, as amended,
or any successor statute, and the rulings and regulations promulgated
thereunder. In the event an amendment to the Code renumbers a section of the
Code referred to in this Plan, any such reference automatically shall become a
reference to such section as renumbered.
2.15 "Committee" shall mean the committee appointed pursuant to Section
13.1 to serve as plan administrator.
2.16 "Common Stock" shall mean the common stock of The Southern
Company.
2.17 "Company" shall mean Southern Company Services, Inc., and its
successors.
2.18 "Compensation" shall mean the base salary or wages of a
Participant, including all amounts contributed by an Employing Company to The
Southern Company Flexible Benefits Plan on behalf of a Participant pursuant to a
salary reduction arrangement under such plan, plus monthly shift and monthly
seven-day schedule differentials, geographic premiums, monthly customer service
premiums, monthly nuclear plant premiums, and, effective July 1, 1998, sales
commissions paid under a sales commission payment program sponsored by an
Employing Company for sales commissioned based employees, and before deduction
of taxes, social security, etc., but excluding all awards under any incentive
pay plans sponsored by the Employing Company, including but not limited to, The
Southern Company Performance Pay Plan, The Southern Company Productivity
Improvement Plan, and The Southern Company Executive Productivity Improvement
Plan, overtime pay, any hourly shift differentials, substitution pay, such
amounts which are reimbursements to a Participant paid by any Employing Company,
including but not limited to, reimbursement for such items as moving expenses
and travel and entertainment expenses, and imputed income for automobile
expenses, tax preparation expenses and health and life insurance premiums paid
by the Employing Company.
The Compensation of each Participant taken into account for purposes of
this Plan shall not exceed $160,000 (as adjusted pursuant to Code Section
401(a)(17)).
2.19 "Contribution Percentage" shall mean the ratio (expressed as a
percentage), of the sum of the Voluntary Participant Contributions and Employer
Matching Contributions under the Plan on behalf of the Eligible Participant for
the Plan Year to the Eligible Participant's compensation for the Plan Year. For
the purpose of determining an Eligible Participant's Contribution Percentage for
a Plan Year, the Committee may elect to consider an Eligible Participant's
compensation for (a) the entire Plan Year or (b) that portion of the Plan Year
in which the individual is an Eligible Participant, provided that such election
is applied uniformly to all Eligible Participants for the Plan Year. The
Contribution Percentage of an Eligible Participant who does not make Voluntary
Participant Contributions or have Employer Matching Contributions made on his
behalf shall be zero.
2.20 "Defined Benefit Plan Fraction" shall mean the following fraction:
(numerator) Sum of the projected annual benefits of the Participant
under all Affiliated Employer defined benefit plans (whether or not
terminated) determined as of the close of the Plan Year.
(denominator) The lesser of (a) the product of 1.25 multiplied by the
dollar limitation in effect for the Plan Year under Code Sections
415(b)(1)(A) or 415(d), or (b) 1.4 multiplied by 100% of the
Participant's average compensation for his highest three (3)
consecutive Plan Years of participation as adjusted under Treasury
Regulation Section 1.415-5.
2.21 "Defined Contribution Plan Fraction" shall mean the following
fraction:
(numerator) The sum of all Annual Additions to the account of the
Participant as of the close of the Plan Year under all defined
contribution plans maintained by the Affiliated Employers for the
current and prior Limitation Years (whether or not terminated),
including this Plan.
(denominator) The sum of the lesser of the following amounts determined
for such Plan Year and for each prior Plan Year in which the
Participant has a Year of Service: (a) 1.25 multiplied by the dollar
limitation in effect under Code Section 415(c)(1)(A) for the Plan Year
(determined without regard to Code Section 415(c)(6)), or (b) 1.4
multiplied by the amount that may be taken into account under Code
Section 415(c)(1)(B) with respect to a Participant for the Plan Year.
2.22 "Determination Date" shall mean with respect to a Plan Year, the
last day of the preceding Plan Year.
2.23 "Determination Year" shall mean the Plan Year being tested.
2.24 "Direct Rollover" shall mean a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
2.25 "Distributee" shall include an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is an alternate
payee under a qualified domestic relations order, as defined in Section 414(p)
of the Code, are Distributees with regard to the interest of the spouse or
former spouse.
2.26 "Elective Employer Contribution" shall mean contributions made
pursuant to Section 4.1 during the Plan Year by an Employing Company, at the
election of the Participant, in lieu of cash compensation and shall include
contributions made pursuant to a salary reduction agreement.
2.27 "Eligible Employee" shall mean an Employee who is employed by an
Employing Company and (a) who was eligible to be included in the Plan on January
1, 1991, or (b) who is a regular full-time, regular part-time, or cooperative
education employee other than:
(1) an Employee who is treated as such solely by reason of the
"leased employee" rules of Code Section 414(n);
(2) any Employee who is represented by a collective bargaining
agent unless the representatives of his bargaining unit and
the Employing Company mutually agree to participation in the
Plan subject to its terms by members of his bargaining unit;
(3) an individual who is a cooperative education employee and who
first performs an Hour of Service on or after January 1, 1995;
and
(4) an individual who is classified by the Employing Company as a
temporary employee (who was not eligible to be included in the
Plan on January 1, 1991) or an independent contractor,
regardless of whether such classification is in error.
Effective September 1, 1998, any individual classified by the
Employing Company as a temporary employee shall be excluded
from the Plan, regardless of any prior inclusion in the Plan
and regardless of whether the "temporary employee"
classification is determined to be in error.
2.28 "Eligible Participant" shall mean an Eligible Employee who is
authorized to have Elective Employer Contributions or Voluntary Participant
Contributions allocated to his Account for the Plan Year.
2.29 "Eligible Retirement Plan" shall mean an individual retirement
account described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in Section 401(a) of
the Code 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.
2.30 "Eligible Rollover Distribution" shall mean 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, the
joint lives (or joint life expectancies) of the Distributee and the
Distributee's Beneficiary, or for a specified period of 10 years or more; (b)
any distribution to the extent such distribution is required under Section
401(a)(9) of the Code; and (c) the portion of any distribution that is not
includable in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
2.31 "Employee" shall mean each individual who is employed by an
Affiliated Employer under common law and each individual who is required to be
treated as an employee pursuant to the "leased employee" rules of Code Section
414(n) other than a leased employee described in Code Section 414(n)(5).
2.32 "Employer Matching Contribution" shall mean a contribution made by
an Employing Company pursuant to Section 5.1 with respect to Elective Employer
Contributions and Voluntary Participant Contributions made on behalf of each
Participant each payroll period.
2.33 "Employing Company" shall mean the Company and any affiliate or
subsidiary of The Southern Company which the Board of Directors may from time to
time determine to bring under the Plan and which shall adopt the Plan, and any
successor of them. The Employing Companies are set forth on Appendix A to the
Plan as updated from time to time. No such entity shall be treated as an
Employing Company prior to the date it adopts the Plan.
2.34 "Enrollment Date" shall mean the first day of each payroll period.
2.35 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, or any successor statute, and the rulings and regulations
promulgated thereunder. In the event an amendment to ERISA renumbers a section
of ERISA referred to in this Plan, any such reference automatically shall become
a reference to such section as renumbered.
2.36 "Excess Aggregate Contributions" shall mean the amount referred to
in Code Section 401(m)(6)(B) with respect to a Participant. In no event may the
Excess Aggregate Contributions for any Highly Compensated Employee exceed the
amount of the Employer Matching Contributions or Voluntary Participant
Contributions made on behalf of the Highly Compensated Employee for the Plan
Year.
2.37 "Excess Deferral Amount" shall mean the amount of Elective
Employer Contributions for a calendar year that exceed the Code Section 402(g)
limits as allocated to this Plan pursuant to Section 4.3(b).
2.38 "Excess Deferral Contributions" shall mean the amount of Elective
Employer Contributions on behalf of a Highly Compensated Employee referred to in
Code Section 401(k)(8)(B).
2.39 "Highly Compensated Employee" shall mean (in accordance with and
subject to Code Section 414(q) and any regulations, rulings, notices or
procedures thereunder), with respect to any Plan Year: (1) any Employee who was
a five percent (5%) owner of The Southern Company or an Affiliated Employer (as
determined pursuant to Code Section 416) during the Plan Year or the immediately
preceding Plan Year, or (2) any Employee who earned more than $80,000 in the
preceding Plan Year. The $80,000 amount shall be adjusted for inflation and for
short Plan Years, pursuant to Code Section 414(q). The Employer may, at its
election, limit Employees earning more than $80,000 to only those Employees who
fall within the "top-paid group," as defined in Code Section 414(q) excluding
those employees described in Code Section 414(q)(8) for such purpose. In
determining whether an Employee is a Highly Compensated Employee, the Committee
may make any elections authorized under applicable regulations, rulings,
notices, or revenue procedures.
2.40 "Hour of Service" shall mean each hour for which an Employee is
paid, or entitled to payment, for the performance of duties for an Affiliated
Employer.
2.41 "Investment Fund" shall mean any one of the funds described in
Article VIII which constitutes part of the Trust Fund.
2.42 "Key Employee" shall mean any Employee or former Employee (and his
Beneficiary) who is a key employee within the meaning of Code Section 416(i)(1).
2.43 "Limitation Year" shall mean the Plan Year.
2.44 "Look-Back Year" shall mean the Plan Year preceding the
Determination Year.
2.45 "Non-Highly Compensated Employee" shall mean an Employee who is
not a Highly Compensated Employee.
2.46 "Normal Retirement Date" shall mean the first day of the month
following a Participant's sixty-fifth (65th) birthday.
2.47 "One-Year Break in Service" shall mean each
twelve-consecutive-month period within the period commencing with an Employee's
Break-in-Service Date and ending on the date the Employee is again credited with
an Hour of Service.
2.48 "Participant" shall mean (a) an Eligible Employee who has elected
to participate in the Plan as provided in Article III and whose participation in
the Plan at the time of reference has not been terminated as provided in the
Plan, (b) an Employee or former Employee who has ceased to be a Participant
under (a) above, but for whom an Account is maintained under the Plan, and,
effective April 1, 1997, (c) an Eligible Employee who has made a Rollover
Contribution to this Plan to the extent that the Provisions of the Plan apply to
such Rollover Contribution of the Eligible Employee.
2.49 "Permissive Aggregation Group" shall mean a group of plans
consisting of the Required Aggregation Group and, at the election of the
Affiliated Employers, such other plan or plans 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 Section 401(a)(4) or 410.
2.50 "Plan" shall mean The Southern Company Employee Savings Plan
(known as the Employee Savings Plan for The Southern Company System prior to
January 1, 1991), as described herein or as from time to time amended.
2.51 "Plan Year" shall mean the twelve-month period commencing January
1st and ending on the last day of December next following.
2.52 "Present Value of Accrued Retirement Income" shall mean an amount
determined solely for the purpose of determining if the Plan, or any other plan
included in a Required Aggregation Group of which the Plan is a part, is top
heavy in accordance with Code Section 416.
2.53 "Required Aggregation Group" shall mean those plans that are
required to be aggregated as determined under this Section 2.53. In determining
a Required Aggregation Group hereunder, each plan of the Affiliated Employers in
which a Key Employee is a participant and each other plan of the Affiliated
Employers which enables any plan in which a Key Employee participates to meet
the requirements of Code Section 410 or 401(a)(4) will be required to be
aggregated.
2.54 "Rollover Contribution" shall mean that portion of an eligible
rollover distribution (as defined in Code Section 402(c)(4)) that an Eligible
Employee elects to contribute to this Plan in accordance with the requirements
of Section 4.11.
2.55 "SEPCO" shall mean Savannah Electric and Power Company.
2.56 "SEPCO Plan" shall mean the Employee Savings Plan of Savannah
Electric and Power Company as in effect December 31, 1992.
2.57 "SEPCO Transferred Account" shall mean the total amount credited
to the account of a Participant as described in Section 9.1(b).
2.58 "Super-Top-Heavy Group" shall mean an Aggregation Group that would
be a Top-Heavy Group if 90% were substituted for 60% in Section 2.60.
2.59 "Surviving Spouse" shall mean the person to whom the Participant
is married on the date of his death, if such spouse is then living, provided
that the Participant and such spouse shall have been married throughout the one
(1) year period ending on the date of the Participant's death.
2.60 "Top-Heavy Group" shall mean an Aggregation Group in which, as of
the Determination Date, the sum of:
(a) the Present Value of Accrued Retirement Income of Key
Employees under all defined benefit plans included in that group, and
(b) the Aggregate Accounts of Key Employees under all defined
contribution plans included in the group,
exceeds 60% of a similar sum determined for all employees.
2.61 "Trust" or "Trust Fund" shall mean the trust established pursuant
to the Trust Agreement.
2.62 "Trust Agreement" shall mean the trust agreement between the
Company and the Trustee, as described in Article XIV.
2.63 "Trustee" shall mean the person or corporation designated as
trustee under the Trust Agreement, including any successor or successors.
2.64 "Valuation Date" shall mean each business day of the New York
Stock Exchange.
2.65 "Voluntary Participant Contribution" shall mean a contribution
made pursuant to Section 4.6 during the Plan Year.
2.66 "Year of Service" shall mean a twelve-month period of employment
as an Employee, including any fractions thereof. Calculation of the twelve-month
periods shall commence with the Employee's first day of employment, which is the
date on which an Employee first performs an Hour of Service, and shall terminate
on his Break-in-Service Date. Thereafter, if he has more than one period of
employment as an Employee, his Years of Service for any subsequent period shall
commence with the Employee's reemployment date, which is the first date
following a Break-in-Service Date on which the Employee performs an Hour of
Service, and shall terminate on his next Break-in-Service Date. An Employee who
has a Break-in-Service Date and resumes employment with the Affiliated Employers
within twelve months of his Break-in-Service Date shall receive a fractional
Year of Service for the period of such cessation of employment.
For purposes of determining an Employee's eligibility to participate,
the following years of service shall also be treated as Years of Service:
(a) In respect of an Employee of an Employing Company who
transfers to an Employing Company from Southern Energy Resources, Inc.
following its adoption of a plan containing a cash or deferred
arrangement under Section 401(k) of the Code, his credited years of
service under such plan as of his date of transfer.
(b) In respect of an Employee of an Employing Company who
transfers to an Employing Company from SEPCO on or before December 31,
1992, his credited years of service under the SEPCO Plan for actual
service while employed at SEPCO as of the date of his transfer.
Notwithstanding anything in this Section 2.66 to the contrary, an
Employee shall not receive credit for more than one Year of Service with respect
to any twelve-consecutive-month period.
ARTICLE III
PARTICIPATION
3.1 Eligibility Requirements. Each Eligible Employee who was an active
Participant on December 31, 1996 shall continue to be an active Participant in
this Plan on January 1, 1997, provided he remains an Eligible Employee. Each
other Eligible Employee may elect to participate in the Plan as of any
Enrollment Date after he has completed a Year of Service. An Eligible Employee
shall make an election to participate by authorizing deductions from or
reduction of his Compensation as contributions to the Plan in accordance with
Article IV, and directing the investment of such contributions in accordance
with Article VIII. Such Compensation deduction and/or reduction authorization
and investment direction shall be made in accordance with the procedures
established by the Committee.
3.2 Participation upon Reemployment. If an Employee terminates his
employment with an Affiliated Employer and is subsequently reemployed as an
Eligible Employee, the following rules shall apply in determining his
eligibility to participate:
(a) If the reemployed Eligible Employee had not completed
the Year of Service requirement of Section 3.1 prior to his termination
of employment and is reemployed following a One-Year Break in Service,
he shall not receive credit for fractional periods of service completed
prior to the One-Year Break in Service until he has completed a Year of
Service after his return. A reemployed Employee who had not completed
the Year of Service requirement and who is reemployed within 12 months
of his Break-in-Service Date shall receive service credit for the
period in which he performed no services in accordance with Section
2.66.
(b) If the reemployed Eligible Employee fulfilled the
eligibility requirements of Section 3.1 prior to his termination of
employment and is reemployed as an Eligible Employee, whether before or
after he incurs a One-Year Break in Service, he may elect to become a
Participant in the Plan as of the date of his reemployment.
3.3 No Restoration of Previously Distributed Benefits. A Participant
who has terminated his employment with the Affiliated Employers and who has
received a distribution of the amount credited to his Account pursuant to
Section 12.5 shall not be entitled to restore the amount of such distribution to
his Account if he is reemployed and again becomes a Participant in the Plan.
3.4 Loss of Eligible Employee Status. If a Participant loses his status
as an Eligible Employee, but remains an Employee, such Participant shall be
ineligible to participate and shall be deemed to have elected to suspend making
Voluntary Participant Contributions or to have Elective Employer Contributions
made on his behalf.
3.5 Special Rule for Scott Paper Company Energy Complex Employees. An
Eligible Employee who was an employee of Scott Paper Company Energy Complex on
December 16, 1994, and who became an Employee of an Employing Company effective
December 17, 1994, shall be credited with a Year of Service as of December 31,
1994, and may elect to become a Participant as of any Enrollment Date commencing
on or after January 1, 1995.
3.6 Former Commonwealth Edison of Indiana Employees. Effective January
1, 1998, notwithstanding any other provision of the Plan to the contrary, with
respect to a former employee of Commonwealth Edison of Indiana ("ComEd") who was
employed by Southern Energy Resources, Inc. on or before December 31, 1997 and
is set forth on a schedule of employees acknowledged by the Committee shall be
credited with a Year of Service as of December 31, 1997, and may elect to become
a Participant as of any Enrollment Date commencing on or after January 1, 1998.
In addition, any former employee of ComEd who becomes employed by Southern
Energy Resources, Inc. on or after January 1, 1998 but prior to April 1, 1998
(hereafter "Date of Employment") and is set forth on the schedule of employees
acknowledged by the Committee shall be credited with a Year of Service as of the
day immediately preceding such employee's Date of Employment and may elect to
become a Participant as of any Enrollment Date commencing on or after such
employee's Date of Employment.
3.7 Military Leave. 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 Section 414(u) of the Code.
ARTICLE IV
ELECTIVE EMPLOYER CONTRIBUTIONS AND
VOLUNTARY PARTICIPANT CONTRIBUTIONS
4.1 Elective Employer Contributions. An Eligible Employee who meets the
participation requirements of Article III may elect on a form provided by the
Employing Company to have his Compensation reduced by a whole percentage of his
Compensation, which percentage shall not be less than one percent (1%) nor more
than sixteen percent (16%) of his Compensation, such Elective Employer
Contribution to be contributed to his Account under the Plan.
4.2 Maximum Amount of Elective Employer Contributions. The maximum
amount of Elective Employer Contributions that may be made on behalf of a
Participant during any Plan Year to this Plan or any other qualified plan
maintained by an Employing Company shall not exceed the dollar limitation set
forth in Section 402(g) of the Code in effect at the beginning of such Plan
Year.
4.3 Distribution of Excess Deferral Amounts.
(a) In General. Notwithstanding any other provision of the
Plan, Excess Deferral Amounts and income allocable thereto shall be
distributed (and any corresponding Employer Matching Contributions
shall be forfeited) no later than April 15, 1997, and each April 15
thereafter, to Participants who allocate (or are deemed to allocate)
such amounts to this Plan pursuant to (b) below for the preceding
calendar year. Excess Deferral Amounts that are distributed shall not
be treated as an Annual Addition. Any Employer Matching Contributions
forfeited pursuant to this subsection (a) shall be applied, subject to
Section 6.1, toward funding Employing Company contributions (for the
Plan Year immediately following the Plan Year to which such forfeited
Employer Matching Contributions relate) or distributed, as directed by
the Committee, to the extent permitted by applicable law.
(b) Assignment. The Participant's allocation of amounts in
excess of the Code Section 402(g) limits to this Plan shall be in
writing; shall be submitted to the Committee no later than March 1;
shall specify the Participant's Excess Deferral Amount for the
preceding calendar year; and shall be accompanied by the Participant's
written statement that if such amounts are not distributed, such Excess
Deferral Amount, when added to amounts deferred under other plans or
arrangements described in Section 401(k), 408(k), 408(p), 402(h)(1)(B),
457, 501(c)(18), or 403(b) of the Code, exceeds the limit imposed on
the Participant by Section 402(g) of the Code for the year in which the
deferral occurred. A Participant is deemed to notify the Committee of
any Excess Deferral Amounts that arise by taking into account only
those deferrals under this Plan and any other plans of an Affiliated
Employer.
(c) Determination of Income or Loss. The Excess Deferral
Amount distributed to a Participant with respect to a calendar year
shall be adjusted for income or loss through the last day of the Plan
Year or the date of distribution, as determined by the Committee. The
income or loss allocable to Excess Deferral Amounts is the sum of:
(1) income or loss allocated to the Participant's
Account for the taxable year multiplied by a fraction, the
numerator of which is such Participant's Excess Deferral
Amount for the year and the denominator is the Participant's
Account balance attributable to Elective Employer
Contributions, minus any income or plus any loss occurring
during the Plan Year; and
(2) if the Committee shall determine in its sole
discretion, ten percent (10%) of the amount determined under
(1) above multiplied by the number of whole calendar months
between the end of the Plan Year and the date of the
distribution, counting the month of distribution if
distribution occurs after the 15th of the month.
Notwithstanding the above, the Committee may designate any
reasonable method for computing the income or loss allocable to Excess
Deferral Amounts, provided that the method does not violate Section
401(a)(4) of the Code, is used consistently for all Participants and
for all corrective distributions under the Plan for the Plan Year, and
is used by the Plan for allocating income or loss to Participants'
Accounts.
(3) Maximum Distribution Amount. The Excess
Deferral Amount, which would otherwise be distributed to the
Participant, shall, if there is a loss allocable to such
Excess Deferral Amount, in no event be less than the lesser
of the Participant's Account under the Plan attributable to
Elective Employer Contributions or the Participant's
Elective Employer Contributions for the Plan Year.
4.4 Additional Rules Regarding Elective Employer Contributions.
Salary reduction agreements shall be governed by the following:
(a) A salary reduction agreement shall apply to payroll
periods during which such salary reduction agreement is in effect. The
Committee, in its discretion, may establish administrative procedures
whereby the actual reduction in Compensation may be made to coincide
with each payroll period of the Employing Company, or at such other
times as the Committee may determine.
(b) The Employing Company may amend or revoke its salary
reduction agreement with any Participant at any time, if the Employing
Company determines that such revocation or amendment is necessary to
ensure that a Participant's additions for any Plan Year will not exceed
the limitations of Sections 4.2 and 6.1 of the Plan or to ensure that
the Actual Deferral Percentage Test is satisfied.
(c) Except as required under (b) above, and under Section
4.5(d) below, no amounts attributable to Elective Employer
Contributions may be distributed to a Participant or his Beneficiary
from his Account prior to the earlier of:
(1) the separation from service, death or
disability of the Participant;
(2) the attainment of age 59 1/2 by the
Participant;
(3) the termination of the Plan without
establishment of a successor plan;
(4) a financial hardship of the Participant
pursuant to Section 11.6 of the Plan;
(5) the date of a sale by an Employing Company
to an entity that is not an Affiliated
Employer of substantially all of the assets
(within the meaning of Code Section
409(d)(2)) with respect to a Participant who
continues employment with the corporation
acquiring such assets; or
(6) the date of the sale by an Employing Company
or an Affiliated Employer of its interest in
a subsidiary (within the meaning of Code
Section 409(d)(3)) to an entity which is not
an Affiliated Employer with respect to the
Participant who continues employment with
such subsidiary.
4.5 Section 401(k) Nondiscrimination Tests.
(a) Actual Deferral Percentage Test. The Plan shall satisfy
the nondiscrimination test of Section 401(k)(3) of the Code, under
which no Elective Employer Contributions shall be made that would cause
the Actual Deferral Percentage for Eligible Participants who are Highly
Compensated Employees to exceed (1) or (2) as follows:
(1) For Plan Years commencing prior to January 1,
1998:
(A) The Average Actual Deferral Percentage
for the Eligible Participants who are Highly Compensated
Employees in the current Plan Year shall not exceed the
Average Actual Deferral Percentage for Eligible Participants
who are Non-Highly Compensated Employees for the current Plan
Year multiplied by 1.25; or
(B) The Average Actual Deferral Percentage
for Eligible Participants who are Highly Compensated Employees
in the current Plan Year shall not exceed the Average Actual
Deferral Percentage for Eligible Participants who are
Non-Highly Compensated Employees in the current Plan Year
multiplied by two (2), provided that the Average Actual
Deferral Percentage for Eligible Participants who are Highly
Compensated Employees in the current Plan Year does not exceed
the Average Actual Deferral Percentage for Eligible
Participants who are Non-Highly Compensated Employees in the
current Plan Year by more than two (2) percentage points.
(2) For Plan Years commencing on and after January 1,
1998:
(A) The Average Actual Deferral Percentage
for the Eligible Participants who are Highly Compensated
Employees in the current Plan Year shall not exceed the
Average Actual Deferral Percentage for the prior Plan Year for
Eligible Participants who were Non-Highly Compensated
Employees for the prior Plan Year multiplied by 1.25; or
(B) The Average Actual Deferral Percentage
for Eligible Participants who are Highly Compensated Employees
in the current Plan Year shall not exceed the Average Actual
Deferral Percentage for Eligible Participants who were
Non-Highly Compensated Employees in the prior Plan Year
multiplied by two (2), provided that the Average Actual
Deferral Percentage for Eligible Participants who are Highly
Compensated Employees in the current Plan Year does not exceed
the Average Actual Deferral Percentage for the prior Plan Year
for Eligible Participants who were Non-Highly Compensated
Employees in the prior Plan Year by more than two (2)
percentage points.
(b) Distribution of Excess Deferral Contributions.
(1) In General. The Excess Deferral Contributions for
a Highly Compensated Employee for a Plan Year which are to be
distributed shall be distributed such that the Highly
Compensated Employee with the highest amount of Elective
Employer Contributions for the Plan Year shall be reduced to
the extent required to:
(A) distribute the total amount of Excess
Deferral Contributions, or
(B) cause the amount of such Highly
Compensated Employee's Elective Employer
Contributions to equal the amount of Elective
Employer Contributions of the Highly Compensated
Employee with the next highest amount of Elective
Employer Contributions for the Plan Year.
This process must be repeated until all Excess Deferral
Contributions are distributed.
Excess Deferral Contributions plus any income and
minus any loss allocable thereto shall be distributed (and any
corresponding Employer Matching Contribution shall be
forfeited) to Participants on whose behalf such Excess
Deferral Contributions were made within two and one-half
(2-1/2) months after the last day of the Plan Year in which
such excess amounts arose, and in any event not later than the
last day of the Plan Year following the close of the Plan Year
for which such contributions were made. Distribution of Excess
Deferral Contributions shall be made to Highly Compensated
Employees in accordance with this Section 4.5(b). Any Employer
Matching Contributions forfeited pursuant to this Subsection
(b)(1) shall be applied, subject to Section 6.1, toward
funding Employing Company contributions (for the Plan Year
immediately following the Plan Year to which such forfeited
Employer Matching Contributions relate) or distributed, as
directed by the Committee, to the extent permitted by
applicable law.
(2) Determination of Income or Loss. Excess Deferral
Contributions to be distributed shall be adjusted for any
income or loss through the last day of the Plan Year or the
date of distribution, as determined by the Committee. The
income or loss allocable to such Excess Deferral Contributions
is the sum of:
(A) income or loss allocated to the
Participant's Account for the taxable year multiplied
by a fraction, the numerator of which is the
Participant's Excess Deferral Contributions to be
distributed for the year and the denominator is the
Participant's Account balance attributable to
Elective Employer Contributions, minus any income or
plus any loss occurring during the Plan Year; and
(B) if the Committee shall determine in its
sole discretion, ten percent (10%) of the amount
determined under (A) above multiplied by the number
of whole calendar months between the end of the Plan
Year and the date of the distribution, counting the
month of distribution if distribution occurs after
the 15th of the month.
Notwithstanding the above, the Committee may
designate any reasonable method for computing the income or
loss allocable to Excess Deferral Contributions, provided that
the method does not violate Section 401(a)(4) of the Code, is
used consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year, and is used by
the Plan for allocating income or loss to Participants'
Accounts.
(3) Maximum Distribution Amount. The Excess Deferral
Contributions which would otherwise be distributed to the
Participant shall be adjusted for income; shall be reduced, in
accordance with regulations, by the Excess Deferral Amount
distributed to the Participant; and shall, if there is a loss
allocable to the Excess Deferral Contributions, in no event be
less than the lesser of the Participant's Account under the
Plan attributable to Elective Employer Contributions or the
Participant's Elective Employer Contributions for the Plan
Year.
(c) Special Rules.
(1) For purposes of this Section 4.5, the Actual
Deferral Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is
eligible to have deferral contributions allocated to his
account under two (2) or more plans or arrangements described
in Section 401(k) of the Code that are maintained by an
Affiliated Employer shall be determined as if all such
deferral contributions were made under a single arrangement.
If a Highly Compensated Employee participates in two (2) or
more cash or deferred arrangements that have different plan
years, all cash or deferred arrangements ending with or within
the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans
shall be treated as separate if mandatorily disaggregated
under Code Section 401(k).
(2) In the event that this Plan satisfies the
requirements of Code Section 401(k), 401(a)(4), or 410(b) only
if aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of Code Section 401(k),
401(a)(4), or 410(b) only if aggregated with this Plan, then
the actual deferral percentages shall be determined as if all
such plans were a single plan.
4.6 Voluntary Participant Contributions. An Eligible Employee who meets
the participation requirements of Article III may elect in accordance with the
procedures established by the Committee to contribute to his Account a Voluntary
Participant Contribution consisting of any whole percentage of his Compensation,
which percentage is not less than one percent (1%) nor more than sixteen percent
(16%) of his Compensation. The maximum Voluntary Participant Contribution shall
be reduced by the percent, if any, which is contributed as an Elective Employer
Contribution on behalf of such Participant under Section 4.1.
4.7 Manner and Time of Payment of Elective Employer Contributions and
Voluntary Participant Contributions. Contributions made in accordance with
Sections 4.1 and 4.6 will be rounded to the next higher multiple of one dollar
on a monthly basis. They will be made only through payroll deductions and will
be effective as of the payroll period commencing as soon as practicable after
the date on which the Participant elects to commence participation in the Plan.
Contributions shall be remitted to the Trustee as of the earliest date on which
such contributions can reasonably be segregated from each Employing Company's
general assets, but in any event not later than the fifteenth (15th) business
day of the month following the month during which such amounts would otherwise
have been payable to the Participant in cash or such earlier time as may be
prescribed by applicable law.
4.8 Change in Contribution Rate. A Participant may prospectively change
the percentage of his Compensation that he has authorized as the Elective
Employer Contribution to be made on his behalf or his Voluntary Participant
Contribution to another permissible percentage in accordance with the procedures
established by the Committee. Such election shall be effective as soon as
practicable after it is made.
4.9 Change in Contribution Amount. In the event of a change in the
Compensation of a Participant, the percentage of the Elective Employer
Contribution made on his behalf or his Voluntary Participant Contribution
currently in effect shall be applied as soon as practicable with respect to such
changed Compensation without action by the Participant.
4.10 Rollover Contributions and Direct Transfers from the SEPCO and
ECMC Plans.
(a) Effective December 1, 1991, a Participant shall be
entitled to transfer (or cause to be transferred directly from the
trustee) to the Trust to be held as part of his Account all or a
portion of the fair market value of the cash or other property a
Participant receives in the distribution of his accrued benefits under
the Profit Sharing Plan for Electric City Merchandise Company, Inc.
("ECMC Plan"), reduced by any voluntary participant contributions under
such plan. Such rollover contribution may only be made within sixty
(60) days following the date the Participant receives the distribution
(or within such additional period as may be provided under Section 408
of the Code if the Participant shall have made a timely deposit of the
distribution in an individual retirement account). No such rollover
contribution or trustee to Trustee transfer shall be made by a
Participant (or on his behalf) if not otherwise permissible under the
Code or if such rollover contribution or transfer would subject this
Plan to the requirements of Section 401(a)(11)(A) of the Code.
Notwithstanding the foregoing, the Trustee is specifically
authorized to accept any rollover accounts under the terms of the SEPCO
Plan as are necessary to reflect a Participant's interest in the Plan
resulting from the merger of the SEPCO Plan into this Plan effective as
of January 1, 1993. Any such rollover account shall be held as part of
the Participant's Account and shall be subject to the requirements of
Article XVIII.
(b) Any amounts so transferred to the Trust shall be
entitled to share in earnings or losses of the Trust in the same manner
as other Employing Company contributions to the Trust.
(c) The portion of a Participant's Account attributable to
any rollover contribution or trustee to Trustee transfer shall be
distributed with the balance of the Participant's Account pursuant to
Article XII of the Plan.
4.11 Rollovers from Other Plans. An Eligible Employee who is hired or
rehired on or after April 1, 1997 and has received a distribution of his
interest in a retirement plan of a former employer under circumstances meeting
the requirements of Section 402(c)(4) of the Code relating to eligible rollover
distributions from qualified trusts may elect to deposit all or any portion (as
designated by such Employee) of the amount of such distribution as a Rollover
Contribution to this Plan. A Rollover Contribution may be made only within 60
days following the date the Employee receives the distribution from the plan of
his former employer (or within such additional period as may be provided under
Section 408 of the Code if the Eligible Employee shall have made a timely
deposit of the distribution in an individual retirement account) and within 12
months of the date of his employment or reemployment with an Employing Company.
In addition to the foregoing, an Eligible Employee described in Section 3.5 may
elect to make a Rollover Contribution to this Plan without regard to his date of
employment, provided that such Rollover Contribution is deposited with this Plan
within the period beginning April 1, 1997 and ending June 30, 1997 and which
otherwise satisfies the requirements of this Section 4.11.
The Committee shall establish rules and procedures to implement this
Section 4.11, including without limitation, such procedures as may be
appropriate to permit the Committee to verify the tax qualified status of the
plan of the former employer and compliance with any applicable provisions of the
Code relating to such contributions. The amount contributed to the Trustee
pursuant to this Section 4.11 shall be placed in the Eligible Employee's
Rollover Contribution subaccount for the benefit of the Eligible Employee
pursuant to Section 9.1. The Eligible Employee shall have a fully vested
interest in the balance of his Rollover Contribution subaccount at all times and
such Rollover Contribution subaccount shall share in the earnings, gains, and
losses of the Trust Fund as set forth in Article IX of the Plan. An Employee
shall be entitled to a distribution of his Rollover Contribution subaccount
pursuant to the applicable provisions of Articles XI and XII hereof.
ARTICLE V
EMPLOYER MATCHING CONTRIBUTIONS
5.1 Amount of Employer Matching Contributions. The Board of Directors,
in its sole and absolute discretion, shall determine the amount of Employer
Matching Contributions that shall be made by each Employing Company on behalf of
each Participant in its employ. The amount of Employer Matching Contributions
shall be fixed by resolutions of the Board of Directors and communicated to each
Employing Company prior to the first day of each Plan Year.
5.2 Payment of Employer Matching Contributions. Except as provided
herein, Employer Matching Contributions shall be remitted to the Trustee as soon
as practicable after the payroll period to which they relate.
5.3 Limitations on Employer Matching Contributions and Voluntary
Participant Contributions.
(a) Actual Contribution Percentage Test. The Plan shall
satisfy the nondiscrimination test of Section 401(m) of the Code, under
which the Average Contribution Percentage for Eligible Participants
shall not exceed (1) or (2) as follows:
(1) For Plan Years commencing prior to January 1,
1998:
(A) The Average Contribution Percentage for
Eligible Participants who are Highly Compensated Employees in
the current Plan Year shall not exceed the Average
Contribution Percentage for Eligible Participants who are
Non-Highly Compensated Employees in the current Plan Year
multiplied by 1.25; or
(B) The Average Contribution Percentage for
Eligible Participants who are Highly Compensated Employees in
the current Plan Year shall not exceed the Average
Contribution Percentage for Eligible Participants who are
Non-Highly Compensated Employees in the current Plan Year
multiplied by two (2), provided that the Average Contribution
Percentage for Eligible Participants who are Highly
Compensated Employees in the current Plan Year does not exceed
the Average Contribution Percentage for Eligible Participants
who are Non-Highly Compensated Employees in the current Plan
Year by more than two (2) percentage points.
(2) For Plan Years commencing on and after January 1,
1998:
(A) The Average Contribution Percentage for
Eligible Participants who are Highly Compensated
Employees in the current Plan Year shall not exceed
the Average Contribution Percentage for the prior
Plan Year for Eligible Participants who were
Non-Highly Compensated Employees in the prior Plan
Year multiplied by 1.25; or
(B) The Average Contribution Percentage for
Eligible Participants who are Highly Compensated
Employees in the current Plan Year shall not exceed
the Average Contribution Percentage for Eligible
Participants who were Non-Highly Compensated
Employees in the prior Plan Year multiplied by two
(2), provided that the Average Contribution
Percentage for Eligible Participants who are Highly
Compensated Employees in the current Plan Year does
not exceed the Average Contribution Percentage for
the prior Plan Year for Eligible Participants who
were Non-Highly Compensated Employees in the prior
Plan Year by more than two (2) percentage points.
(b) Distribution of Excess Aggregate Contributions.
(1) In General. The Excess Aggregate Contributions
for a Highly Compensated Employee for a Plan Year which are to
be distributed shall be distributed such that the Highly
Compensated Employee with the highest amount of Matching
Employer Contributions and Voluntary Participant Contributions
shall be reduced to the extent required to:
(A) distribute the total amount of Excess
Aggregate Contributions, or
(B) cause the amount of such Highly
Compensated Employee's Employer Matching
Contributions and Voluntary Participant Contributions
to equal the amount of Employer Matching
Contributions and Voluntary Participant Contributions
of the Highly Compensated Employee with the next
highest amount of Employer Matching Contributions and
Voluntary Participant Contributions for the Plan
Year.
This process must be repeated until all Excess
Aggregate Contributions are distributed.
Excess Aggregate Contributions, plus any income and
minus any loss allocable thereto, shall be distributed (or, if
forfeitable, forfeited) within 2-1/2 months after the last day
of the Plan Year in which such excess amounts arose, and in
any event not later than the last day of the following Plan
Year, to Participants to whose Accounts such Excess Aggregate
Contributions were allocated for the Plan Year. Excess
Aggregate Contributions shall be treated as Annual Additions.
(2) Determination of Income or Loss. Excess Aggregate
Contributions to be distributed shall be adjusted for any
income or loss through the last day of the Plan Year or the
date of distribution, as determined by the Committee. The
income or loss allocable to such Excess Aggregate
Contributions is the sum of:
(A) income or loss allocated to the
Participant's Account attributable to Voluntary
Participant Contributions and Employer Matching
Contributions to be distributed for the Plan Year
multiplied by a fraction, the numerator of which is
the Participant's Excess Aggregate Contributions for
the year and the denominator is the Participant's
Account balance attributable to Voluntary Participant
Contributions and Employer Matching Contributions,
minus any income or plus any loss occurring during
the Plan Year; and
(B) if the Committee shall determine in its
sole discretion, ten percent (10%) of the amount
determined under (1) above multiplied by the number
of whole calendar months between the end of the Plan
Year and the date of the distribution, counting the
month of distribution if distribution occurs after
the 15th of the month.
Notwithstanding the above, the Committee may
designate any reasonable method for computing the income or
loss allocable to Excess Aggregate Contributions, provided
that the method does not violate Section 401(a)(4) of the
Code, is used consistently for all Participants and for all
corrective distributions under the Plan for the Plan Year, and
is used by the Plan for allocating income or loss to
Participants' Accounts.
(3) Accounting for Excess Aggregate Contributions.
Excess Aggregate Contributions shall be distributed first from
Voluntary Participant Contributions allocated to the
Participant's Account and any corresponding Employer Matching
Contribution shall also be forfeited and then, if necessary,
distributed from the remaining Employer Matching Contribution
allocated to the Participant's Account.
(c) Special Rules.
(1) The Contribution Percentage for any Eligible
Participant who is a Highly Compensated Employee for the Plan
Year and who is eligible to make voluntary participant
contributions, to receive employer matching contributions, or
to make deferral contributions under two or more plans
described in Section 401(a) of the Code or arrangements
described in Section 401(k) of the Code that are maintained by
an Affiliated Employer shall be determined as if all such
contributions were made under a single plan.
(2) In the event that this Plan satisfies the
requirements of Code Section 401(m), 401(a)(4), or 410(b) only
if aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of Code Section 401(m),
401(a)(4), or 410(b) only if aggregated with this Plan, then
the contribution percentages shall be determined as if all
such plans were a single plan.
(3) The determination and treatment of the
Contribution Percentage of any Eligible Participant shall
satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
5.4 Multiple Use Limitation. If both the Average Actual Deferral
Percentage and the Average Contribution Percentage of the Highly Compensated
Employees exceed 1.25 of the Average Actual Deferral Percentage and the Average
Contribution Percentage of the Non-Highly Compensated Employees and if one or
more Highly Compensated Employees makes Elective Employer Contributions and
receives Employer Matching Contributions, and the sum of the Actual Deferral
Percentage and Actual Contribution Percentage of those Highly Compensated
Employees subject to either or both tests exceed the aggregate limit as defined
in Treasury Regulation Section 1.401(m)-2, then the Employer Matching
Contribution of those Highly Compensated Employees who participate in the cash
or deferred arrangement will be reduced (beginning with such Highly Compensated
Employee whose Employer Matching Contribution is the highest) so that the
aggregate limit is not exceeded. For purposes of determining if the aggregate
limit has been exceeded, the Actual Deferral Percentage and the Contribution
Percentage of the Highly Compensated Employees shall be determined after any
corrections required to meet the Actual Deferral Percentage Test and the Actual
Contribution Percentage Test.
5.5 Reversion of Employing Company Contributions. Employing Company
contributions computed in accordance with the provisions of this Plan shall
revert to the Employing Company under the following circumstances:
(a) In the case of an Employing Company contribution which is
made by reason of a mistake of fact, such contribution upon written
direction of the Employing Company shall be returned to the Employing
Company within one year after the payment of the contribution.
(b) If any Employing Company contribution is determined to be
nondeductible under Section 404 of the Code, then such Employing
Company contribution, to the extent that it is determined to be
nondeductible, upon written direction of the Employing Company shall be
returned to the Employing Company within one year after the
disallowance of the deduction.
The amount which may be returned to the Employing Company under this
Section 5.7 is the excess of (1) the amount contributed over (2) the amount that
would have been contributed had there not occurred a mistake of fact or
disallowance of the deduction. Earnings attributable to the excess contribution
shall not be returned to the Employing Company, but losses attributable thereto
shall reduce the amount to be so returned. If the withdrawal of the amount
attributable to the mistaken contribution would cause the balance of the Account
of any Participant to be reduced to less than the balance which would have been
in the Account had the mistaken amount not been contributed, then the amount to
be returned to the Employing Company shall be limited so as to avoid such
reduction.
5.6 Correction of Prior Incorrect Allocations and Distributions.
Notwithstanding any provisions contained herein to the contrary, in the event
that, as of any Valuation Date, adjustments are required in any Participants'
Accounts to correct any incorrect allocation of contributions or investment
earnings or losses, or such other discrepancies in Account balances that may
have occurred previously, the Employing Companies may make additional
contributions to the Plan to be applied to correct such incorrect allocations or
discrepancies. The additional contributions shall be allocated by the Committee
to adjust such Participants' Accounts to the value which would have existed on
said Valuation Date had there been no prior incorrect allocation or
discrepancies. The Committee shall also be authorized to take such other actions
as it deems necessary to correct prior incorrect allocations or discrepancies in
the Accounts of Participants under the Plan.
ARTICLE VI
LIMITATIONS ON CONTRIBUTIONS
6.1 Section 415 Limitations.
(a) Notwithstanding any provision of the Plan to the
contrary, the total Annual Additions allocated to the Account (and the
accounts under all defined contribution plans maintained by an
Affiliated Employer) of any Participant for any Limitation Year in
accordance with Code Section 415 and the regulations thereunder, which
are incorporated herein by this reference, shall not exceed the lesser
of the following amounts:
(1) twenty-five percent (25%) of the
Participant's compensation in the Limitation
Year; or
(2) $30,000 (as adjusted pursuant to Code
Section 415(d)(1)(C)).
(b) If a Participant is also a participant in any Affiliated
Employer's defined benefit plan, then in addition to the limitations in
(a) above, the sum of the Defined Benefit Plan Fraction and Defined
Contribution Plan Fraction shall not exceed 1.0 for any Limitation
Year.
(c) For purposes of this Section 6.1, wherever the term
"compensation" is used, such term shall mean compensation as defined in
Code Section 415(c)(3) and any rulings and regulations thereunder.
(d) The Annual Addition for any Plan Year beginning before
January 1, 1987 shall not be recomputed to treat all Voluntary
Participant Contributions as an Annual Addition.
(e) If the Plan satisfied the applicable requirements of
Section 415 of the Code as in effect for all Plan Years beginning
before January 1, 1987, an amount shall be subtracted from the
numerator of the Defined Contribution Plan Fraction (not exceeding the
numerator), as prescribed by the Secretary of the Treasury, so that the
sum of the Defined Benefit Plan Fraction and the Defined Contribution
Plan Fraction computed under Section 415(e)(1) of the Code (as revised
by this Section 6.1) does not exceed 1.0 for the Plan Year. In
addition, the Defined Contribution Plan Fraction for a Participant may
be determined by taking into account the special transition rule of
Code Section 415(e)(6).
(f) If the Participant was a participant in one or more
defined benefit plans maintained by the Affiliated Employers which were
in existence on July 1, 1982, the denominator of the Defined Benefit
Plan Fraction shall not be less than 1.25% of the sum of the annual
benefits under such plans which the Participant had accrued as of the
later of September 30, 1983 or the end of the last Limitation Year
beginning before January 1, 1983. The preceding sentence applies only
if the defined benefit plans individually, and in the aggregate satisfy
the requirements of Code Section 415 as in effect at the end of the
1982 Limitation Year.
6.2 Correction of Contributions in Excess of Section 415 Limits. If the
Annual Additions for a Participant exceed the limits of Section 6.1 as
a result of the allocation of forfeitures, if any, a reasonable error
in estimating a Participant's annual compensation for purposes of the
Plan, a reasonable error in determining the amount of elective
deferrals (within the meaning of Section 402(g)(3) of the Code) that
may be made with respect to any individual, or under other limited
facts and circumstances that the Commissioner of the Treasury finds
justify the availability of the rules set forth in this Section 6.2,
the excess amounts shall not be deemed Annual Additions if they are
treated in accordance with any one or more or any combination of the
following:
(a) distribute to the Participant that portion, or all,
of his Elective Employer Contributions (as adjusted
for income and loss) as is necessary to ensure
compliance with Section 6.1;
(b) return to the Participant that portion, or all, of
his Voluntary Participant Contributions (as
adjusted for income and loss) as is necessary to
ensure compliance with Section 6.1; and
(c) forfeiture of that portion, or all, of the Employer
Matching Contributions (as adjusted for income and
loss) and any forfeitures of Employer contributions
that were allocated to the Participant's Account
(as adjusted for income and loss), as is necessary
to ensure compliance with Section 6.1.
Any amounts distributed or returned to the Participant under (a) or (b)
above shall be disregarded for purposes of the Actual Deferral Percentage Test
and for purposes of the Actual Contribution Percentage Test.
Any amounts forfeited under this Section 6.2 shall be held in a
suspense account and shall be applied, subject to Section 6.1, toward funding
the Employer Matching Contributions for the next succeeding Plan Year. Such
application shall be made prior to any Employing Company contributions and prior
to any Employer Matching Contributions that would constitute Annual Additions.
No income or investment gains and losses shall be allocated to the suspense
account provided for under this Section 6.2. If any amount remains in a suspense
account provided for under this Section 6.2 upon termination of this Plan, such
amount will revert to the Employing Companies notwithstanding any other
provision of this Plan.
6.3 Combination of Plans. Notwithstanding any provisions contained
herein to the contrary, in the event that a Participant participates in a
defined contribution plan or defined benefit plan required to be aggregated with
this Plan under Code Section 415(g) and the sum of the Defined Contribution Plan
Fraction and Defined Benefit Plan Fraction with respect to a Participant exceeds
the limitations contained in Section 6.1(b), corrective adjustments (a) for an
Employee shall not be made under this Plan until made under such other defined
benefit plan but (b) for a Participant whose distribution of benefit payments
has commenced under such defined benefit plan, shall be made under The Southern
Company Employee Stock Ownership Plan ("ESOP") and then, to the extent
necessary, under The Southern Company Performance Sharing Plan ("PSP") and then,
to the extent necessary, under such other defined benefit plan and then, to the
extent necessary, under this Plan. If an Employee participates in more than one
defined contribution plan maintained by an Affiliated Employer and his Annual
Additions exceed the limitations of Section 6.1(a), corrective adjustments shall
be made first under this Plan and then, to the extent necessary, under the PSP
and then, to the extent necessary, under the ESOP.
ARTICLE VII
SUSPENSION OF CONTRIBUTIONS
7.1 Suspension of Contributions. A Participant may (on a prospective
basis) voluntarily suspend the Elective Employer Contributions made on his
behalf and his Voluntary Participant Contributions in accordance with the
procedures established by the Committee. Such suspension shall be effective as
soon as practicable after it is made. Whenever Elective Employer Contributions
made on a Participant's behalf and Voluntary Participant Contributions are
suspended, Employer Matching Contributions shall also be suspended.
7.2 Resumption of Contributions. A Participant may terminate
prospectively any such suspension in accordance with the procedures established
by the Committee. Such resumption of contributions shall be effective as soon as
practicable after the election to terminate prospectively the suspension is
made. There shall be no make up of any contributions by a Participant or by an
Employing Company with respect to a period of suspension.
ARTICLE VIII
INVESTMENT OF CONTRIBUTIONS
8.1 Investment Funds. The Investment Funds shall be selected from time
to time by the Pension Fund Investment Review Committee of the Southern Company
System. In addition to such other Investment Funds selected by the Pension Fund
Investment Review Committee, the Investment Funds shall include the "Company
Stock Fund". The Company Stock Fund shall be invested and reinvested in Common
Stock, provided that funds applicable to the purchase of Common Stock pending
investment of such funds may be temporarily invested in short-term United States
Government obligations, other obligations guaranteed by the United States
Government, commercial paper, or certificates of deposit, and, if the Trustee so
determines, may be transferred to money market funds utilized by the Trustee for
qualified employee benefit trusts.
8.2 Investment of Participant Contributions. Each Participant shall
direct, at the time he elects to participate in the Plan and at such other times
as may be directed by the Committee or pursuant to Section 8.6, that his
Elective Employer Contributions and Voluntary Participant Contributions be
invested in one or more of the Investment Funds, provided such investments are
made in one-percent (1%) increments.
8.3 Investment of Employer Matching Contributions. Employer Matching
Contributions shall be invested entirely in the Company Stock Fund and shall
remain invested in the Company Stock Fund except as follows:
(a) Any Participant whose employment with the
Affiliated Employers is terminated as a result of his
retirement pursuant to the defined benefit pension plan of an
Affiliated Employer may elect to invest the amount credited to
his Employer Matching Contribution subaccount in any of the
Investment Funds under this Plan as provided in Section 8.5;
and
(b) Any Participant may elect at any time on or after
the fifth anniversary of the Enrollment Date on which he first
became a Participant in this Plan to invest a portion of the
amount credited to his Employer Matching Contribution
subaccount in any of the Investment Funds under this Plan as
provided in Section 8.5, except that the amount subject to
such election may not exceed fifty percent (50%) of the amount
of Common Stock credited to his Employer Matching Contribution
subaccount at the time the election is made.
8.4 Investment of Earnings. Interest, dividends, if any, and other
distributions received by the Trustee with respect to an Investment Fund shall
be invested in such Investment Fund.
8.5 Transfer of Assets between Funds. A Participant may direct in
accordance with the provisions of this Section 8.5 and such procedures
established by the Committee that all of his interest in an Investment Fund or
Funds attributable to amounts in his Account (including Employer Matching
Contributions other than those required to be invested in the Company Stock Fund
pursuant to Section 8.3) or any portion of such amount (expressed in number of
shares, whole dollar amounts, or one-percent (1%) increments) to the credit of
his Account be transferred and invested by the Trustee as of such date in any
other Investment Fund as designated by the Participant. Such direction shall be
effective as soon as practicable after it is made.
8.6 Change in Investment Direction. Any investment direction given by a
Participant shall continue in effect until changed by the Participant. A
Participant may change his investment direction as to the future contributions
and allocations to his Account (other than Employer Matching Contributions) in
accordance with the procedures established by the Committee, and such direction
shall be effective as soon as practicable after it is made.
8.7 Section 404(c) Plan. This Plan is intended to be a plan described
in ERISA Section 404(c) and shall be interpreted in accordance with Department
of Labor Regulations Section 1.404c-1, which is incorporated herein by this
reference. The Committee shall take such actions as it deems necessary or
appropriate in its discretion to cause the Plan to comply with such
requirements, including, but not limited to, providing Participants with the
right to request and receive written confirmation of their investment
instructions. Further, the Committee shall take such actions as it deems
necessary or appropriate in its discretion (a) to ensure that confidentiality
procedures with respect to a Participant's ownership of Common Stock and the
exercise of ownership rights with respect to such Common Stock are adequate and
utilized, and (b) to appoint an independent fiduciary to carry out such actions
as the Committee determines involve the potential for undue influence on
Participants with regard to the direct or indirect exercise of shareholder
rights with respect to Common Stock.
ARTICLE IX
MAINTENANCE AND VALUATION OF PARTICIPANTS' ACCOUNTS
9.1 Establishment of Accounts.
(a) An Account shall be established for each Participant. In
addition, subaccounts shall be established for each Participant to
reflect all Elective Employer Contributions, Voluntary Participant
Contributions, Employer Matching Contributions, Rollover Contributions
(effective as of April 1, 1997), and rollover contributions from the
SEPCO Plan (and the earnings and/or losses on each subaccount). Each
Participant will be furnished a statement of his Account at least
annually and upon any distribution.
(b) Effective as of January 1, 1993, the Committee shall
also establish a subaccount known as a Participant's SEPCO Transferred
Account to reflect the Participant's interest in the Plan resulting
from the merger of the SEPCO Plan into this Plan effective as of
January 1, 1993. To the extent that a Participant's Salary Deferral
Account, Employer Contribution Account, and Rollover Account (as those
terms were defined under the SEPCO Plan), were transferred to this Plan
from the SEPCO Plan, such accounts shall retain their character as
participant deferral, employer, or rollover contributions,
respectively, and the Committee shall establish and maintain such
bookkeeping accounts as it deems necessary to account for such
contributions, and any subsequent earnings or losses attributable
thereto, under this Plan.
9.2 Valuation of Investment Funds. A Participant's Account in respect
of his interest in each Investment Fund shall be credited or charged, as the
case may be, as of each Valuation Date with the dividends, income, gains,
appreciation, losses, depreciation, forfeitures, expenses, and other
transactions with respect to such Investment Fund for the Valuation Date as of
which such credit or charge accrued. Such credits or charges to a Participant's
Account shall be made in such proportions and by such method or formula as shall
be deemed by the Committee to be necessary or appropriate to account for each
Participant's proportionate beneficial interest in the Trust Fund in respect of
his interest in each Investment Fund. Investments of each Investment Fund shall
be valued at their fair market values as of each Valuation Date as determined by
the Trustee, and such valuation shall conclusively establish such value.
9.3 Rights in Investment Funds. Nothing contained in this Article IX
shall be deemed to give any Participant any interest in any specific property in
any Investment Fund or any interest, other than the right to receive payments or
distributions in accordance with the Plan or the right to instruct the Trustee
how to vote Common Stock as provided in Section 14.3.
ARTICLE X
VESTING
10.1 Vesting. The amount to the credit of a Participant's Account shall
at all times be fully vested and nonforfeitable.
ARTICLE XI
WITHDRAWALS AND LOANS
11.1 Withdrawals by Participants.
(a) Subject to the provisions of Article XII, this Section
11.1, and Sections 11.2 through 11.6, a Participant may make
withdrawals from his Account effective as of any Valuation Date in the
order of priority listed below:
(1) All or a portion of the value of his Account
attributable to Voluntary Participant Contributions (not
including any earnings or appreciation thereon) made prior
to January 1, 1987;
(2) All amounts described above, plus all or a
portion of the value of his Account attributable to
Voluntary Participant Contributions, plus a ratable portion
of the earnings and/or appreciation on Voluntary Participant
Contributions;
(3) All amounts described above, plus effective
April 1, 1997, all or a portion of the value of his Account
attributable to Rollover Contributions (including earnings
and appreciation thereon);
(4) All amounts described above, plus up to fifty
percent (50%) of the value of his Account attributable to
Employer Matching Contributions (including earnings and
appreciation thereon) allocated to his Account; provided,
however, that said Participant shall have participated in
the Plan for not less than sixty (60) months at the time of
the withdrawal;
(5)(A) For Participants who have not attained age
59 1/2 or separated from service with the Affiliated
Employers (within the meaning of Code Section
401(k)(2)(B)(i)(I)), all amounts described above, plus all
or a portion of the value of his Account attributable to
Elective Employer Contributions (not including any earnings
or appreciation thereon for Plan Years beginning after
December 31, 1988); and
(B) For Participants who have attained age 59 1/2
or separated from service with the Affiliated Employers
(within the meaning of Code Section 401(k)(2)(B)(i)(I)), all
amounts described above, plus all or a portion of the value
of his Account attributable to any earnings or appreciation
on Elective Employer Contributions.
(b) Notwithstanding the foregoing, withdrawals from a
Participant's SEPCO Transferred Account shall be made in accordance
with Article XVIII.
11.2 Notice of Withdrawal. Notice of withdrawal must be given by a
Participant in accordance with the procedures established by the Committee, and
if such withdrawal would constitute an eligible rollover distribution (within
the meaning of Code Section 402(c)(4)), the consent and notice requirements of
Section 12.10 must be satisfied. Payment of a withdrawal shall be made as soon
as practicable and in accordance with Section 12.10, if applicable.
11.3 Form of Withdrawal. All distributions under this Article XI shall
be made in the form of cash, provided that with respect to any distribution
which is attributable to Common Stock the Participant shall have the right to
demand that such portion of the distribution be made in the form of Common Stock
to the extent of the whole number of shares of Common Stock in his Account.
Such demand must be made in accordance with the procedures established by the
Committee.
11.4 Minimum Withdrawal. No distribution under this Article XI shall be
permitted in an amount which has a value of less than $300, unless the value of
the amount available under the selected option is less than $300, in which case
such available amount will be distributed.
11.5 Source of Withdrawal. Withdrawals shall be made in accordance with
the instructions of the Participant from each of the Investment Funds in which
the amount to be distributed is invested. The value of the amount to be
distributed under any option listed in Section 11.1 shall be determined as soon
as practicable in accordance with the procedures established by the Committee.
11.6 Requirement of Hardship.
(a) Except as provided in (e) below, a withdrawal pursuant
to Section 11.1(a)(5)(A), in addition to the other requirements of
Article XI, shall be permitted only if the Committee determines that
the withdrawal is to be made on account of an immediate and heavy
financial need of the Participant, the amount of the withdrawal does
not exceed such financial need, and the amount of the withdrawal is not
reasonably available from other resources of the Participant.
(b) For purposes of this Section 11.6, the following shall
be deemed to be immediate and heavy financial needs:
(1) Medical expenses described in Section 213(d) of
the Code, including but not limited to, expenses for
(i) The diagnosis, cure, mitigation,
treatment, or prevention of disease, or for the
purpose of affecting any structure or function of
the body; (ii) transportation primarily for and
essential to such expenses referred to in (i)
above; or (iii) insurance (including amounts paid
as premiums under part B of Title XVIII of the
Social Security Act) relating to medical expenses
referred to in (i) or (ii) above, provided such
expenses are incurred by the Participant, the
Participant's spouse or any person whom the
Participant may properly claim as a dependent on
his federal income tax return or are necessary for
such persons to obtain the medical care described
above; or
(2) Purchase (excluding mortgage payments) of a
principal residence for the Participant; or
(3) Payment of tuition, related educational fees, and
room and board expenses, for the next twelve (12) months of
post-secondary education for the Participant, the
Participant's spouse or child or children, or any person the
Participant may properly claim as a dependent on his federal
income tax return; or
(4) The need to prevent eviction of the Participant
from his principal residence or foreclosure on the mortgage
of the Participant's principal residence; or
(5) Any other need which the Commissioner of the
Internal Revenue Service, through the publication of revenue
rulings, notices, or other documents of general
applicability, deems to be immediate and heavy.
(c) For purposes of this Section 11.6, a withdrawal shall be
deemed necessary to satisfy an immediate and heavy financial need if:
(1) The distribution is not in excess of the amount
of the immediate and heavy financial need of the
Participant, including any amounts necessary to pay any
federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution;
(2) The Participant has obtained all distributions
and all nontaxable loans currently available to him under
all plans maintained by an Affiliated Employer;
(3) The Participant agrees to suspend all elective
employer contributions and voluntary participant
contributions to all plans of an Affiliated Employer for at
least twelve (12) months after receipt of the distribution
under this Section 11.6; and
(4) The Participant agrees not to make elective
contributions to this Plan or any other qualified or
non-qualified deferred compensation plan sponsored by an
Affiliated Employer (including stock purchase, stock option
or similar plans) during the Participant's taxable year
immediately following the taxable year of the hardship
distribution in excess of the Participant's applicable
elective deferral limits under Section 402(g) of the Code
for such taxable year less the amount for the taxable year
of the hardship distribution.
(d) When all suspensions pursuant to this Section 11.6 are
ended, Elective Employer Contributions and/or Voluntary Participant
Contributions may be resumed by the Participant (if the Participant is
then eligible and elects to resume such contributions) beginning with
the Participant's first payroll period commencing after all suspensions
are ended, and Employer Matching Contributions by his Employing Company
also shall be resumed. There shall be no make up of any contributions
by a Participant or by an Employing Company with respect to a period of
suspension.
(e) Notwithstanding (a) above, if a Participant has attained
age 59 1/2 or separated from service with the Affiliated Employers
(within the meaning of Code Section 401(k)(2)(B)(i)(I)), he shall be
permitted to make a withdrawal pursuant to Section 11.1(a)(5)(A), even
if such withdrawal is not on account of hardship.
11.7 Loans to Participants.
(a) The Committee may, in its sole discretion, direct the
Trustee to make a loan or loans from the Trust Fund to any Participant
(other than a Participant with an existing Plan loan in arrears) (1)
who is an Employee on the active payroll of an Employing Company or is
a cooperative education employee, (2) who is receiving long-term
disability payments under a plan maintained by his Employing Company,
(3) who is on a leave of absence authorized by his Employing Company,
or (4) who is a party in interest as defined in Section 3(14) of ERISA.
All loan applications shall be made in accordance with the procedures
established by the Committee, which shall form a part of this Plan.
Such procedures shall establish the terms and conditions of loans under
the Plan, including the events constituting default, and shall be
consistent with the provisions of this Section 11.7.
(b) The total amount of all loans outstanding to any one
Participant under all qualified plans maintained by an Affiliated
Employer shall not exceed the lesser of (1) $50,000, reduced by the
excess of the highest outstanding balance of loans from all qualified
plans maintained by an Affiliated Employer during the twelve-month
period ending on the day before a loan is made, over the outstanding
balance of any loans to the Participant from all qualified plans
maintained by an Affiliated Employer on the date the loan is made, or
(2) fifty percent (50%) of such Participant's Account as of the
Valuation Date coinciding with or next following the date the loan
application is made. The minimum amount of any loan shall not equal
less than $1,000.
(c) The Participant requesting a loan pursuant to this
Section 11.7 shall designate the order of priority of Investment
Fund(s) from which the principal amount of the loan shall be obtained.
(d) The Committee shall adopt and follow uniform and
nondiscriminatory procedures in making loans under this Plan to make
certain that such loans (1) are available to all Participants on a
reasonably equivalent basis, (2) are not made available to Highly
Compensated Employees, officers, or shareholders in an amount greater
than the amount made available to other Participants, (3) bear a
reasonable rate of interest, and (4) are adequately secured. The
repayment of such loans by any Participant who is an Employee on the
active payroll of an Employing Company shall be made through payroll
deduction. The minimum amount of any loan repayment shall not equal
less than $20.00, and such repayment shall extend for a period certain
of at least twelve (12) months (unless repaid in full), but not to
exceed fifty-eight (58) months, expressed in any number of whole months
(including the month the loan is made). The term of any loan may be for
a period certain of more than fifty-eight (58) months, but not to
exceed fifteen (15) years, only if the proceeds of such loan are used
to acquire any dwelling used or, within a reasonable period of time, to
be used as the principal residence of the Participant.
(e) The Committee shall direct the Trustee to obtain from
the Participant such note and adequate security as it may require. All
loans made pursuant to this Section 11.7 shall be secured by the
Participant's Account, and no other types of collateral may be used to
secure a loan from the Plan. Notwithstanding the provisions of Section
17.2, if a Participant defaults on a loan under the Plan or if the
Participant's employment terminates prior to full repayment thereof, in
addition to any other remedy provided in the loan instruments or by
law, the Committee may direct the Trustee to charge against that
portion of the Participant's Account which secures the loan the amount
required to fully repay the loan. Under no circumstances, however,
shall any unpaid loan be charged against a Participant's Account until
permitted by applicable law. This Section authorizes only the making of
bona fide loans and not distributions, and before resort is made
against a Participant's Account for his failure to repay any loan, such
other reasonable efforts to collect the same shall be made by the
Committee as it deems reasonable and practical under the circumstances.
(f) No distribution shall be made to any Participant unless
and until all unpaid loans to such Participant have either been paid in
full or deducted from the Participant's Account.
(g) All loans made under this Section 11.7 shall be
considered earmarked investments of the Participant's Account, and any
repayment of principal and interest shall be reinvested in accordance
with the Participant's investment direction in effect on the date of
such repayment pursuant to Article VIII of the Plan.
11.8 Special Waiver for Participants Employed in the United Kingdom. A
Participant shall be entitled to sign a waiver of his right to make withdrawals
or loans from his Account under the provisions of this Article XI with respect
to the Elective Employer Contributions and Employer Matching Contributions
credited to his Account to the extent necessary to ensure that such
contributions are not taxable in the United Kingdom. The purpose of such waiver
is to meet the requirements of the Department of Inland Treasury of the United
Kingdom for excluding such Elective Employer and Employer Matching Contributions
from taxable income in the United Kingdom. Such waiver shall be made on a form
prescribed by the Committee from time to time in accordance with the
requirements of the Department of Inland Treasury of the United Kingdom.
ARTICLE XII
DISTRIBUTION TO PARTICIPANTS
12.1 Distribution upon Retirement.
(a) Subject to the provisions of Article XVIII, if a
Participant's employment with the Affiliated Employers is terminated as
a result of his retirement pursuant to the defined benefit pension plan
of an Affiliated Employer, in addition to the withdrawal options under
Section 11.1, the entire balance credited to his Account shall be
payable to him in the manner set forth in this Section 12.1 at such
time requested by the Participant pursuant to Section 12.6 and in
accordance with the procedures established by the Committee. The
distribution shall commence as soon as practicable after the Valuation
Date selected by the Participant in one of the following ways:
(1) In a single lump sum distribution; or
(2) In annual installments not to exceed twenty
(20), as selected by the Participant, or the Participant's
life expectancy. The amount of cash and/or the number of
shares of Common Stock in each installment shall be equal to
the proportionate value as of each Valuation Date
immediately preceding payment of the balance then to the
credit of the Participant in his Account determined by
dividing the amount credited to his Account as of such
Valuation Date by the number of payments remaining to be
made.
If a Participant who is receiving installment payments shall
establish to the satisfaction of the Committee, in accordance with
principles and procedures established by the Committee which are
applicable to all persons similarly situated, that a financial
emergency exists in his affairs, such as illness or accident to the
Participant or a member of his immediate family or other similar
contingency, the Committee may, for the purpose of alleviating such
emergency, accelerate the time of payment of some or all of the
remaining installments. If a Participant dies before receiving all of
the amount to the credit of his Account in accordance with this
paragraph (2), the amount remaining to the credit of his Account at his
death shall be distributed to his Beneficiary as soon as practicable in
accordance with Section 12.4.
(b) Notwithstanding a Participant's election to defer the
receipt of the benefits under (a) above, the Committee shall direct
payment in a single lump sum to such Participant if the balance of his
Account does not exceed $3,500 ($5,000 effective January 1, 1998) in
accordance with the requirements of Code Section 411(a)(11). The
Committee shall not cash-out any Participant whose Account balance
exceeds $3,500 ($5,000 effective January 1, 1998) without the written
consent of the Participant.
12.2 Distribution upon Disability. If a Participant's employment with
the Affiliated Employers is terminated prior to his Normal Retirement Date by
reason of his total and permanent disability, as determined by the Social
Security Administration and evidenced in a writing provided to the Committee,
such disabled Participant, in addition to the withdrawal options under Section
11.1, shall be entitled to receive the entire value credited to his Account at
such time as requested by the Participant or such legal representative pursuant
to Section 12.6 and in accordance with the procedures established by the
Committee. Any distribution pursuant to this Section 12.2 shall be made in a
single lump sum as soon as practicable after the selected Valuation Date.
Notwithstanding the foregoing, the Committee shall direct payment in a
single lump sum to such Participant or his legal representative if the balance
of such Participant's Account does not exceed $3,500 ($5,000 effective January
1, 1998) in accordance with the requirements of Code Section 411(a)(11).
12.3 Distribution upon Death. If a Participant's employment with the
Affiliated Employers is terminated by reason of death, the entire balance
credited to the Participant's Account shall be distributed as soon as
practicable to the Participant's surviving Beneficiary or Beneficiaries in a
lump sum.
12.4 Designation of Beneficiary in the Event of Death. A Participant
may designate a Beneficiary or Beneficiaries (who may be designated
contingently) to receive all or part of the amount credited to his Account in
case of his death before his receipt of all of his benefits under the Plan,
provided that the Beneficiary of a married Participant shall be the
Participant's Surviving Spouse, unless such Surviving Spouse shall consent in a
writing witnessed by a notary public, which writing acknowledges the effect of
the Participant's designation of a Beneficiary other than such Surviving Spouse.
However, if such Participant establishes to the satisfaction of the Committee
that such written consent may not be obtained because the Surviving Spouse
cannot be located or because of such other circumstances as the Secretary of the
Treasury may by regulations prescribe, a designation by such Participant without
the consent of the Surviving Spouse shall be valid.
Any consent necessary under this Section 12.4 shall be valid and
effective only with respect to the Surviving Spouse who signs the consent or, in
the event of a deemed consent, only with respect to a designated Surviving
Spouse.
A designation of Beneficiary may be revoked by the Participant without
the consent of any Beneficiary (or the Participant's Surviving Spouse) at any
time before the commencement of the distribution of benefits. A Beneficiary
designation or change or revocation of a Beneficiary designation shall be made
in accordance with the procedures established by the Committee.
If no designated Beneficiary shall be living at the death of the
Participant and/or such Participant's Beneficiary designation is not valid and
enforceable under applicable law or the procedures of the Committee, such
Participant's Beneficiary or Beneficiaries shall be the person or persons in the
first of the following classes of successive preference, if then living:
(a) the Participant's spouse on the date of his death,
(b) the Participant's children, equally,
(c) the Participant's parents, equally,
(d) the Participant's brothers and sisters, equally, or
(e) the Participant's executors or administrators.
Payment to such one or more persons shall completely discharge the Plan and the
Trustee with respect to the amount so paid.
12.5 Distribution upon Termination of Employment.
(a) If a Participant's employment with the Affiliated
Employers is terminated for any reason other than in accordance with
Sections 12.1, 12.2, and 12.3, the balance to the credit of the
Participant's Account shall be payable in a single lump sum. Such lump
sum distribution shall be made as soon as practicable after the
Participant's termination of employment, provided that one of the
following conditions is met:
(1) the Participant's Account Balance does not exceed
$3,500 ($5,000 effective January 1, 1998) in accordance with
Code Section 411(a)(11), or
(2) in accordance with Section 12.10, the Participant
elects to receive a distribution of his Account.
(b) A Participant who does not receive a distribution under
Section 12.5(a)(1) may elect to defer the commencement of the
distribution of his Account following the termination of his employment
until a later Valuation Date, provided that such distribution shall
commence not later than the date required under Section 12.6 of the
Plan. In addition to the withdrawal options under Section 11.1, any
deferred distribution shall commence as soon as practicable after the
Valuation Date selected by the Participant.
12.6 Commencement of Benefits.
(a) Notwithstanding any other provision of the Plan, and
except as further provided in Section 12.6(b) below, if the Participant
does not elect to defer commencement of his benefit payments, the
payment of his benefits shall begin at the Participant's election no
later than the sixtieth (60th) day after the close of the Plan Year in
which the latest of the following events occurs:
(1) the Participant attains the earlier of age
sixty-five (65) or his Normal Retirement
Date,
(2) the Participant's tenth (10th) anniversary
of participation under the Plan, or
(3) the Participant's separation from service
with the Affiliated Employers.
(b) In no event shall the distribution of amounts in a
Participant's Account commence later than the April 1 of the calendar
year following the later of the calendar year in which the Participant
attains age 70 1/2 or terminates employment with the Affiliated
Employers, in accordance with regulations prescribed by the Secretary
of the Treasury. The foregoing requirements in this Section 12.6(b)
shall not be applied to restrict the implementation of any written
designation given to the Committee by a Participant prior to January 1,
1984, with regard to the method of distribution of his Account, if such
method was permissible under the Plan and Code prior to January 1,
1984. Notwithstanding the foregoing, the payment of benefits to a
Participant who is a five percent (5%) owner of The Southern Company or
an Affiliated Employer (as determined pursuant to Code Section 416)
with respect to the Plan Year ending in the calendar year in which the
Participant attains age 70 1/2 shall begin not later than April 1, of
the calendar year following the calendar year in which the Participant
attains age 70 1/2 regardless of the Participant's termination from
employment.
Any distribution made under this Plan shall be made in
accordance with the minimum distribution requirements of Code Section
401(a)(9), including the incidental death benefits requirements under
Code Section 401(a)(9)(G) and the Treasury Regulations thereunder.
12.7 Transfer between Employing Companies. A transfer by a Participant
from one Employing Company to another Employing Company shall not affect his
participation in the Plan. A transfer by a Participant from an Employing Company
to an Affiliated Employer that is not an Employing Company shall not be deemed
to be a termination of employment with an Employing Company.
12.8 Distributions to Alternate Payees. If the Participant's Account
under the Plan shall become subject to any domestic relations order which (a) is
a qualified domestic relations order satisfying the requirements of Section
414(p) of the Code and (b) requires the immediate distribution in a single lump
sum of the entire portion of the Participant's Account required to be segregated
for the benefit of an alternate payee, then the entire interest of such
alternate payee shall be distributed in a single lump sum within ninety (90)
days following the Employing Company's notification to the Participant and the
alternate payee that the domestic relations order is qualified under Section
414(p) of the Code, or as soon as practicable thereafter. Such distribution to
an alternate payee shall be made even if the Participant has not separated from
the service of the Affiliated Employers. Any other distribution pursuant to a
qualified domestic relations order shall not be made earlier than the
Participant's termination of service, or his attainment of age fifty (50), if
earlier, and shall not commence later than the date the Participant's (or his
Beneficiary's) benefit payments otherwise commence. Such distribution to an
alternate payee shall be made only in a manner permitted under Articles XI or
XII of the Plan and only to the extent the Participant would be eligible for
such distribution option.
12.9 Requirement for Direct Rollovers. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit a Distributee's election
under this Article XII, a Distributee may elect, at the time and in the manner
prescribed by the 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.
12.10 Consent and Notice Requirements. If the value of the vested
portion of a Participant's Account derived from Employing Company and Employee
contributions exceeds $3,500 ($5,000 effective January 1, 1998) determined in
accordance with the requirements of Code Section 411(a)(11), the Participant
must consent to any distribution of such vested account balance prior to his
Normal Retirement Date. The consent of the Participant shall be obtained within
the ninety-day period ending on the first day of the first period for which an
amount is payable as an annuity or in any other form under this Plan.
The Committee shall notify the Participant of the right to defer any
distribution until the Participant's Account balance is no longer immediately
distributable. Such notification shall include a general description of the
material features and an explanation of the relative values of the operational
forms of benefit available under the Plan in a manner that would satisfy the
notice requirements of Section 417(a)(3) of the Code; such notification shall be
provided no less than 30 days and no more than 90 days prior to the annuity
starting date.
Distributions may commence less than 30 days after the notice required
under Section 1.411(a)-11(c) of the Treasury Regulations is given, provided
that:
(a) the Committee informs the Participant that the
Participant has a right to a period of at least 30
days after receiving the notice to consider the
decision of whether or not to elect a distribution
and a particular distribution option, and
(b) the Participant, after receiving the notice,
affirmatively elects a distribution.
12.11 Form of Payment. All distributions under this Article XII shall
be made in the form of cash, provided that the person entitled to such
distribution may demand that the portion of any distribution which is
attributable to Common Stock be distributed in the form of Common Stock to the
extent of the whole number of shares in the Participant's Account, with a cash
adjustment for any fractional shares.
12.12 Partial Distribution upon Termination of Employment. If a
Participant's employment with the Affiliated Employers is terminated and such
Participant is deemed not to have separated from service within the meaning of
Code Section 401(k)(2)(B)(i)(I), such Participant, in addition to the withdrawal
options available under Article XI, shall be entitled to elect a lump sum
distribution of the entire balance to the credit of his Account less the amount
credited to his Elective Employer Contribution subaccount. The amounts credited
to his Elective Employer Contribution subaccount may be distributed in a lump
sum distribution at such time permitted pursuant to Code Section 401(k)(2)(B)(i)
and Section 4.4(c) hereof. Such lump sum distributions shall otherwise be
subject to this Article XII.
ARTICLE XIII
ADMINISTRATION OF THE PLAN
13.1 Membership of Committee. The Plan shall be administered by the
Committee, which shall consist of the individuals then serving in the positions
of Director, System Compensation and Benefits of The Southern Company;
Vice-President, Human Resources of The Southern Company; and Comptroller of The
Southern Company or any other position or positions that succeed to the duties
of the foregoing positions. The Committee shall be chaired by the
Vice-President, Human Resources of The Southern Company and may select a
Secretary (who may, but need not, be a member of the Committee) to keep its
records or to assist it in the discharge of its duties.
13.2 Acceptance and Resignation. Any person appointed to be a member of
the Committee shall signify his acceptance in writing to the Chairman of the
Committee. Any member of the Committee may resign by delivering his written
resignation to the Committee and such resignation shall become effective upon
delivery or upon any later date specified therein.
13.3 Transaction of Business. A majority of the members of the
Committee at the time in office shall constitute a quorum for the transaction of
business at any meeting. Any determination or action of the Committee may be
made or taken by a majority of the members present at any meeting thereof or
without a meeting by a resolution or written memorandum concurred in by a
majority of the members then in office.
13.4 Responsibilities in General. The Committee shall administer the
Plan and shall have the discretionary authority, power, and the duty to take all
actions and to make all decisions necessary or proper to carry out the Plan and
to control and manage the operation and administration of the Plan. The
Committee shall have the discretion to interpret the Plan, including any
ambiguities herein, and to determine the eligibility for benefits under the Plan
in its sole discretion. The determination of the Committee as to any question
involving the general administration and interpretation of the Plan shall be
final, conclusive, and binding on all persons, except as otherwise provided
herein or by law, and may be relied upon by the Company, all Employing
Companies, the Trustee, the Participants, and their Beneficiaries. Any
discretionary actions to be taken under the Plan by the Committee with respect
to Employees and Participants or with respect to benefits shall be uniform in
their nature and applicable to all persons similarly situated.
13.5 Committee as Named Fiduciary. For the purpose of compliance with
the provisions of ERISA, the Committee shall be deemed the administrator of the
Plan as the term "administrator" is defined in ERISA, and the Committee shall
be, with respect to the Plan, a named fiduciary as that term is defined in
ERISA. For the purpose of carrying out its duties, the Committee may, in its
discretion, allocate its responsibilities under the Plan among its members and
may, in its discretion, designate persons (in writing or otherwise) other than
members of the Committee to carry out such responsibilities of the Committee
under the Plan as it may see fit.
13.6 Rules for Plan Administration. The Committee may make and enforce
rules and regulations for the administration of the Plan consistent with the
provisions thereof and may prescribe the use of such forms or procedures as it
shall deem appropriate for the administration of the Plan.
13.7 Employment of Agents. The Committee may employ independent
qualified public accountants, as such term is defined in ERISA, who may be
accountants to The Southern Company and any Affiliated Employer, legal counsel
who may be counsel to The Southern Company and any Affiliated Employer, other
specialists, and other persons as the Committee deems necessary or desirable in
connection with the administration of the Plan. The Committee and any person to
whom it may delegate any duty or power in connection with the administration of
the Plan, the Company and the officers and directors thereof shall be entitled
to rely conclusively upon and shall be fully protected in any action omitted,
taken, or suffered by them in good faith in reliance upon any independent
qualified public accountant, counsel, or other specialist, or other person
selected by the Committee, or in reliance upon any tables, evaluations,
certificates, opinions, or reports which shall be furnished by any of them or by
the Trustee.
13.8 Co-Fiduciaries. It is intended that to the maximum extent
permitted by ERISA, each person who is a fiduciary (as that term is defined in
ERISA) with respect to the Plan shall be responsible for the proper exercise of
his own powers, duties, responsibilities, and obligations under the Plan and the
Trust, as shall each person designated by any fiduciary to carry out any
fiduciary responsibilities with respect to the Plan or the Trust. No fiduciary
or other person to whom fiduciary responsibilities are allocated shall be liable
for any act or omission of any other fiduciary or of any other person delegated
to carry out any fiduciary or other responsibility under the Plan or the Trust.
13.9 General Records. The Committee shall maintain or cause to be
maintained an Account (and any separate subaccount) which accurately reflects
the interest of each Participant, as provided for in Section 9.1, and shall
maintain or cause to be maintained all necessary books of account and records
with respect to the administration of the Plan. The Committee shall mail or
cause to be mailed to Participants reports to be furnished to Participants in
accordance with the Plan or as may be required by ERISA. Any notices, reports,
or statements to be given, furnished, made, or delivered to a Participant shall
be deemed duly given, furnished, made, or delivered when addressed to the
Participant and delivered to the Participant in person or mailed by ordinary
mail to his address last communicated to the Committee (or its delegate) or of
his Employing Company.
13.10 Liability of the Committee. In administering the Plan, except as
may be prohibited by ERISA, neither the Committee nor any person to whom it may
delegate any duty or power in connection with administering the Plan shall be
liable for any action or failure to act except for its or his own gross
negligence or willful misconduct; nor for the payment of any amount under the
Plan; nor for any mistake of judgment made by him or on his behalf as a member
of the Committee; nor for any action, failure to act, or loss unless resulting
from his own gross negligence or willful misconduct; nor for the neglect,
omission, or wrongdoing of any other member of the Committee. No member of the
Committee shall be personally liable under any contract, agreement, bond, or
other instrument made or executed by him or on his behalf as a member of the
Committee.
13.11 Reimbursement of Expenses and Compensation of Committee. Members
of the Committee shall be reimbursed by the Company for expenses they may
individually or collectively incur in the performance of their duties. Each
member of the Committee who is a full-time employee of the Company or of any
Employing Company shall serve without compensation for his services as such
member; each other member of the Committee shall receive such compensation, if
any, for his services as the Board of Directors may fix from time to time.
13.12 Expenses of Plan and Trust Fund. The expenses of establishment
and administration of the Plan and the Trust Fund, including all fees of the
Trustee, auditors, and counsel, shall be paid by the Company or the Employing
Companies. Notwithstanding the foregoing, to the extent provided in the Trust
Agreement, certain administrative expenses may be paid from the Trust Fund
either directly or through reimbursement of the Company or the Employing
Companies. Any expenses directly related to the investments of the Trust Fund,
such as stock transfer taxes, brokerage commissions, or other charges incurred
in the acquisition or disposition of such investments, shall be paid from the
Trust Fund (or from the particular Investment Fund to which such fees or
expenses relate) and shall be deemed to be part of the cost of such securities
or deducted in computing the proceeds therefrom, as the case may be. Investment
management fees for the Investment Funds shall be paid from the particular
Investment Fund to which they relate either directly or through reimbursement of
the Company or the Employing Companies unless the Company or the Employing
Companies do not elect to receive reimbursement for payment of such expenses.
Taxes, if any, on any assets held or income received by the Trustee and transfer
taxes on the transfer of Common Stock from the Trustee to a Participant or his
Beneficiary shall be charged appropriately against the Accounts of Participants
as the Committee shall determine. Any expenses paid by the Company pursuant to
Section 13.11 and this section shall be subject to reimbursement by other
Employing Companies of their proportionate shares of such expenses as determined
by the Committee.
13.13 Responsibility for Funding Policy. The Pension Fund Investment
Review Committee of The Southern Company System shall have responsibility for
providing a procedure for establishing and carrying out a funding policy and
method for the Plan consistent with the objectives of the Plan and the
requirements of Title I of ERISA.
13.14 Management of Assets. The Committee shall not have responsibility
with respect to the control or management of the assets of the Plan. The Trustee
shall have the sole responsibility for the administration of the assets of the
Plan as provided in the Trust Agreement, except to the extent that an investment
advisor (who qualifies as an Investment Manager as that term is defined in
ERISA) who may be appointed by the Board of Directors (upon recommendation by
the Pension Fund Investment Review Committee on and after August 5, 1993) shall
have responsibility for the management of the assets of the Plan, or some part
thereof (including the powers to acquire and dispose of the assets of the Plan,
or some part thereof).
13.15 Notice and Claims Procedures. Consistent with the requirements of
ERISA and the regulations thereunder of the Secretary of Labor from time to time
in effect, the Committee shall:
(a) provide adequate notice in writing to any Participant or
Beneficiary 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 Participant or Beneficiary, and
(b) afford a reasonable opportunity to any Participant or
Beneficiary whose claim for benefits has been denied for a full and
fair review of the decision denying the claim.
13.16 Bonding. Unless otherwise determined by the Board of Directors or
required by law, no member of the Committee shall be required to give any bond
or other security in any jurisdiction.
13.17 Multiple Fiduciary Capacities. Any person or group of persons may
serve in more than one fiduciary capacity with respect to the Plan, and any
fiduciary with respect to the Plan may serve as a fiduciary with respect to the
Plan in addition to being an officer, employee, agent, or other representative
of a party in interest, as that term is defined in ERISA.
13.18 Change in Administrative Procedures. Notwithstanding any
provision in the Plan to the contrary, the Committee shall be authorized to take
whatever actions it deems necessary or appropriate in its discretion to
implement administrative procedures, including, but not limited to, suspending
plan participation (to the extent permitted by applicable law,) and suspending
changes in investment directions and fund transfers, even though otherwise
permitted or required under the Plan.
ARTICLE XIV
TRUSTEE OF THE PLAN
14.1 Trustee. The Company has entered into a Trust Agreement with the
Trustee to hold the funds necessary to provide the benefits set forth in the
Plan. If the Board of Directors so determines, the Company may enter into a
Trust Agreement or Trust Agreements with additional trustees. Any Trust
Agreement may be amended by the Company from time to time in accordance with its
terms. Any Trust Agreement shall provide, among other things, that all funds
received by the Trustee thereunder will be held, administered, invested, and
distributed by the Trustee, and that no part of the corpus or income of the
Trust held by the Trustee shall be used for or diverted to purposes other than
for the exclusive benefit of Participants or their Beneficiaries, except as
otherwise provided in the Plan. Any Trust Agreement may also provide that the
investment and reinvestment of the Trust Fund, or any part thereof may be
carried out in accordance with directions given to the Trustee by any Investment
Manager or Investment Managers (as that term is defined in ERISA) who may be
appointed by the Board of Directors (upon recommendation by the Pension Fund
Investment Review Committee). The Board of Directors may remove any Trustee or
any successor Trustee, and any Trustee or any successor Trustee may resign. Upon
removal or resignation of a Trustee, the Board of Directors shall appoint a
successor Trustee.
14.2 Purchase of Common Stock. As soon as practicable after receipt of
funds applicable to the purchase of Common Stock, the Trustee shall purchase
Common Stock or cause Common Stock to be purchased. Such Common Stock may be
purchased on the open market or by private purchase (including private purchases
directly from The Southern Company); provided that (a) no private purchase may
be made at any price greater than the last sale price or highest current
independent bid price, whichever is higher, for Common Stock on the New York
Stock Exchange, plus an amount equal to the commission payable in a stock
exchange transaction; (b) if such private purchase shall be a purchase of Common
Stock directly from The Southern Company, no commission shall be paid with
respect thereto; and (c) the Trustee may purchase Common Stock directly from The
Southern Company under The Southern Investment Plan, as from time to time
amended, or under any other similar plan made available to holders of record of
shares of Common Stock which may be in effect from time to time, at the purchase
price provided for in such plan. The Trustee may hold in cash, and may
temporarily invest funds applicable to the purchase of Common Stock in
short-term United States obligations, other obligations guaranteed by the United
States Government, commercial paper, or certificates of deposit, and if the
Trustee so determines, may transfer such funds to money market funds utilized by
the Trustee for qualified employee benefit trusts.
14.3 Voting of Common Stock. Before each annual or special meeting of
shareholders of The Southern Company, there shall be sent to each Participant a
copy of the proxy soliciting material for the meeting, together with a form
requesting instructions to the Trustee on how to vote the shares of Common Stock
credited to such Participant's Account as of the record date of the Common
Stock. If a Participant does not provide the Trustee or its designated agent
with timely voting instructions for the Trustee, the Pension Fund Investment
Review Committee of The Southern Company System or its delegate may direct the
Trustee how to vote such Participant's shares. If the Pension Fund Investment
Review Committee of The Southern Company System or its delegate does not provide
the Trustee or its designated agent with timely voting instructions, the
Trustee, if required to do so by applicable law, may vote such Participant's
shares. The Pension Fund Investment Review Committee of The Southern Company
System or its delegate may direct the Trustee with respect to voting unallocated
shares of Common Stock, if any. If the Pension Fund Investment Review Committee
of The Southern Company System or its delegate does not provide the Trustee or
its designated agent with timely voting instructions, the Trustee, if required
to do so by applicable law, may vote such unallocated shares.
14.4 Voting of Other Investment Fund Shares. The Pension Fund
Investment Review Committee or its delegate may direct the Trustee with respect
to voting the shares in any Investment Fund other than the Company Stock Fund.
To the extent an Investment Manager has been designated with respect to an
Investment Fund, such Investment Manager (and not the Pension Fund Investment
Review Committee) shall direct the Trustee with respect to voting the shares in
such Investment Fund. If the Investment Manager does not direct the Trustee with
respect to voting such shares, the Pension Fund Investment Review Committee may
direct the Trustee with respect to voting such shares. If the Pension Fund
Investment Review Committee does not provide the Trustee or its designated agent
with timely voting instructions, the Trustee, if required to do so by applicable
law, may vote such shares.
14.5 Uninvested Amounts. The Trustee may keep uninvested an amount of
cash sufficient in its opinion to enable it to carry out the purposes of the
Plan.
14.6 Independent Accounting. The Board of Directors shall select a firm
of independent public accountants to examine and report annually on the
financial position and the results of operation of the Trust forming a part of
the Plan.
ARTICLE XV
AMENDMENT AND TERMINATION OF THE PLAN
15.1 Amendment of the Plan. The Plan may be amended or modified by the
Board of Directors pursuant to its written resolutions at any time and from time
to time; provided, however, that no such amendment or modification shall make it
possible for any part of the corpus or income of the Trust Fund to be used for
or diverted to purposes other than for the exclusive benefit of Participants or
their Beneficiaries under the Plan, including such part as is required to pay
taxes and administration expenses of the Plan. The Plan may also be amended or
modified by the Committee (a) if such amendment or modification does not involve
a substantial increase in cost to any Employing Company, or (b) as may be
necessary, proper, or desirable in order to comply with laws or regulations
enacted or promulgated by any federal or state governmental authority and to
maintain the qualification of the Plan under Sections 401(a) and 501(a) of the
Code and the applicable provisions of ERISA.
No amendment to the Plan shall have the effect of decreasing a
Participant's vested interest in his Account, determined without regard to such
amendment, as of the later of the date such amendment is adopted or the date it
becomes effective. In addition, if the vesting schedule of the Plan is amended,
any Participant who has completed at least three (3) Years of Service and whose
vested interest is at any time adversely affected by such amendment may elect to
have his vested interest determined without regard to such amendment during the
election period defined under Section 411(a)(10) of the Code. Finally, no
amendment shall eliminate an optional form of benefit in violation of Code
Section 411(d)(6).
15.2 Termination of the Plan. It is the intention of the Employing
Companies to continue the Plan indefinitely. However, the Board of Directors
pursuant to its written resolutions may at any time and for any reason suspend
or terminate the Plan or suspend or discontinue the making of contributions of
all Participants and of contributions by all Employing Companies. Any Employing
Company may, by action of its board of directors and approval of the Board of
Directors, suspend or terminate the making of contributions of Participants in
the employ of such Employing Company and of contributions by such Employing
Company.
In the event of termination of the Plan or partial termination or upon
complete discontinuance of contributions under the Plan by all Employing
Companies or by any one Employing Company, the amount to the credit of the
Account of each Participant whose Employing Company shall be affected by such
termination or discontinuance shall be determined as of the next Valuation Date
and shall be distributed to him or his Beneficiary thereafter at such time or
times and in such nondiscriminatory manner as is determined by the Committee in
compliance with the restrictions on distributions set forth in Code Section
401(k).
15.3 Merger or Consolidation of the Plan. The Plan shall not be merged
or consolidated with nor shall any assets or liabilities thereof be transferred
to any other plan unless each Participant of the Plan would (if the Plan then
terminated) receive a benefit immediately after the merger, consolidation, or
transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately prior to the merger, consolidation, or transfer
(if the Plan had then terminated).
ARTICLE XVI
TOP-HEAVY REQUIREMENTS
16.1 Top-Heavy Plan Requirements. For any Plan Year the Plan shall be
determined to be a top-heavy plan, the Plan shall provide the minimum allocation
requirement of Section 16.3.
16.2 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, the sum of the Aggregate Accounts of Key Employees
under this Plan exceeds 60% of the Aggregate Accounts of all Employees
entitled to participate in this Plan.
(b) 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, the sum of the Aggregate Accounts of Key
Employees under this Plan exceeds 90% of the Aggregate Accounts of all
Employees entitled to participate in this Plan.
(c) 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.
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 Aggregation Group is a Top-Heavy Group.
(d) For purposes of this Article XVI, if any Employee is a
non-Key Employee for any Plan Year, but such Employee was a Key
Employee for any prior Plan Year, such Employee's Present Value of
Accrued Retirement Income and/or Aggregate Account balance shall not be
taken into account for purposes of determining whether this Plan is a
top-heavy or super-top-heavy plan (or whether any Aggregation Group
which includes this Plan is a Top-Heavy Group). In addition, for Plan
Years beginning after December 31, 1984, if an Employee or former
Employee has not performed any services for any Employing Company
maintaining the Plan at any time during the five-year period ending on
the Determination Date, the Aggregate Account and/or Present Value of
Accrued Retirement Income shall be excluded in determining whether this
Plan is a top-heavy or super-top-heavy plan.
(e) Only those plans of the Affiliated Employers 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.
16.3 Minimum Allocation for Top-Heavy Plan Years.
(a) Notwithstanding anything herein to the contrary, for any
top-heavy Plan Year, the Employing Company contribution allocated to
the Account of each non-Key Employee shall be an amount not less than
the lesser of: (1) 3% of such Participant's compensation for that Plan
Year, or (2) a percentage of that Participant's compensation not to
exceed the percentage at which contributions are made under the Plan
for the Key Employee for whom such percentage is highest for that Plan
Year.
(b) For purposes of the minimum allocation of Section
16.3(a), the percentage allocated to the Account of any Key Employee
shall be equal to the ratio of the Employing Company contributions
allocated on behalf of such Key Employee divided by the compensation of
such Key Employee for that Plan Year.
(c) For any top-heavy Plan Year, the minimum allocations of
Section 16.3(a) shall be allocated to the Accounts of all non-Key
Employees who are Participants and who are employed by the Affiliated
Employers on the last day of the Plan Year.
(d) Notwithstanding the foregoing, in any Plan Year in which
a non-Key Employee is a Participant in both this Plan and a defined
benefit plan, and both such plans are top-heavy plans, the Affiliated
Employers shall not be required to provide a non-Key Employee with both
the full separate minimum defined benefit and the full separate defined
contribution plan allocations. Therefore, if a non-Key Employee is
participating in a defined benefit plan maintained by the Affiliated
Employers and the minimum benefit under Code Section 416(c)(1) is
provided the non-Key Employee under such defined benefit plan, the
minimum allocation provided for above shall not be applicable, and no
minimum allocation shall be made on behalf of the non-Key Employee.
Alternatively, the Employing Company may satisfy the minimum allocation
requirement of Code Section 416(c)(2) for the non-Key Employee by
providing any combination of benefits and/or contributions that satisfy
the safe harbor rules of Treasury Regulation Section 1.416-1(M-12).
16.4 Adjustments to Maximum Benefit Limits for Top-Heavy Plans.
(a) In the case of an Employee who is a participant in a
defined benefit plan and a defined contribution plan maintained by the
Affiliated Employers, and such plans as a group are determined to be
top heavy for any limitation year beginning after December 31, 1983,
"1.0", shall be substituted for "1.25" in each place it appears in the
denominators of the Defined Benefit Plan Fraction and Defined
Contribution Plan Fraction, unless the extra minimum benefit is
provided pursuant to Section 16.4(b) below. Super-top-heavy plans and
plans in a Super-Top-Heavy Group 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 Plan Fraction and the Defined Contribution Plan
Fraction shall remain unchanged, provided the Account of each non-Key
Employee who is a Participant receives an extra allocation (in addition
to the minimum allocation in Section 16.3(a)) equal to not less than 1%
of such non-Key Employee's compensation.
(c) For purposes of this Section 16.4, if the sum of the
Defined Benefit Plan Fraction and the Defined Contribution Plan
Fraction shall exceed 1.0 in any Plan Year for any Participant in this
Plan, the Affiliated Employers shall eliminate any amounts in excess of
the limits set forth in Section 6.1(b), pursuant to Section 6.3 of the
Plan.
ARTICLE XVII
GENERAL PROVISIONS
17.1 Plan Not an Employment Contract. The Plan shall not be deemed to
constitute a contract between an Affiliated Employer and any Employee, nor shall
anything herein contained be deemed to give any Employee any right to be
retained in the employ of an Employing Company or to interfere with the right of
an Employing Company to discharge any Employee at any time and to treat him
without regard to the effect which such treatment might have upon him as a
Participant.
17.2 No Right of Assignment or Alienation. Except as may be otherwise
permitted or required by law, no right or interest in the Plan of any
Participant or Beneficiary and no distribution or payment under the Plan to any
Participant or Beneficiary shall be subject in any manner to anticipation,
alienation, sale, transfer (except by death), assignment (either at law or in
equity), pledge, encumbrance, charge, attachment, garnishment, levy, execution,
or other legal or equitable process, whether voluntary or involuntary, and any
attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber,
charge, attach, garnish, levy, or execute or enforce any other legal or
equitable process against the same shall be void, nor shall any such right,
interest, distribution, or payment be in any way liable for or subject to the
debts, contracts, liabilities, engagements, or torts of any person entitled to
such right, interest, distribution, or payment. If any Participant or
Beneficiary is adjudicated bankrupt or purports to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge any such right, interest,
distribution, or payment, voluntarily or involuntarily, or if any action shall
be taken which is in violation of the provisions of the immediately preceding
sentence, the Committee may hold or apply or cause to be held or applied such
right, interest, distribution, or payment or any part thereof to or for the
benefit of such Participant or Beneficiary in such manner as is in accordance
with applicable law. In addition, a Participant's benefits may be offset
pursuant to a judgment, order, or decree issued (or settlement agreement entered
into) on or after August 5, 1997, if and to the extent that such offset is
permissible or required under Code Section 401(a)(13).
Notwithstanding the above, the Committee and the Trustee shall comply
with any domestic relations order (as defined in Section 414(p)(1)(B) of the
Code) which is a qualified domestic relations order satisfying the requirements
of Section 414(p) of the Code. The Committee shall establish procedures for (a)
notifying Participants and alternate payees who have or may have an interest in
benefits which are the subject of domestic relations orders, (b) determining
whether such domestic relations orders are qualified domestic relations orders
under Section 414(p) of the Code, and (c) distributing benefits which are
subject to qualified domestic relations orders.
17.3 Payment to Minors and Others. If the Committee determines that any
person entitled to a distribution or payment from the Trust Fund is an infant or
incompetent or is unable to care for his affairs by reason of physical or mental
disability, it may cause all distributions or payments thereafter becoming due
to such person to be made to any other person for his benefit, without
responsibility to follow the application of payments so made. Payments made
pursuant to this provision shall completely discharge the Company, the Trustee,
and the Committee with respect to the amounts so paid. No person shall have any
rights under the Plan with respect to the Trust Fund, or against the Trustee or
any Employing Company, except as specifically provided herein.
17.4 Source of Benefits. The Trust Fund established under the Plan
shall be the sole source of the payments or distributions to be made in
accordance with the Plan. No person shall have any rights under the Plan with
respect to the Trust Fund, or against the Trustee or any Employing Company,
except as specifically provided herein.
17.5 Unclaimed Benefits. If the Committee is unable, within five (5)
years after any distribution becomes payable to a Participant or Beneficiary, to
make or direct payment to the person entitled thereto because the identity or
whereabouts of such person cannot be ascertained, notwithstanding the mailing of
due notice to such person at his last known address as indicated by the records
of either the Committee or his Employing Company, then such benefit or
distribution will be disposed of as follows:
(a) If the whereabouts of the Participant is unknown to the
Committee, distribution will be made to the Participant's Beneficiary
or Beneficiaries.
Payment to such one or more persons shall completely
discharge the Company, the Trustee, and the Committee with respect to
the amounts so paid.
(b) If none of the persons described in (a) above, can be
located, then the benefit payable under the Plan shall be forfeited and
shall be applied to reduce future Employer Matching Contributions.
Notwithstanding the foregoing sentence, such benefit shall be
reinstated if a claim is made by the Participant or Beneficiary for the
forfeited benefit.
17.6 Governing Law. The provisions of the Plan and the Trust shall be
construed, administered, and enforced in accordance with the laws of the State
of Georgia, except to the extent such laws are preempted by the laws of the
United States.
ARTICLE XVIII
SPECIAL REQUIREMENTS FOR ACCOUNT BALANCES
ATTRIBUTABLE TO ACCRUED BENEFITS
TRANSFERRED FROM THE SEPCO PLAN
18.1 SEPCO Transferred Accounts. Notwithstanding any other provisions
of this Plan to the contrary, a Participant's SEPCO Transferred Account shall be
subject to the requirements of this Article XVIII.
18.2 In-Service Withdrawals from SEPCO Transferred Accounts. Except as
provided in this Section 18.2, a Participant shall be entitled to a distribution
of his SEPCO Transferred Account at the same time he is entitled to a
distribution of his Account under the applicable provisions of Article XII.
(a) Age 59 1/2. A Participant who has attained age 59 1/2
shall have the right to withdraw all or a portion of his SEPCO
Transferred Account in accordance with Section 11.6(e) provided that he
shall have first withdrawn all other amounts available to him in
accordance with the terms and order of priority set forth in Section
11.1.
(b) Hardship. A Participant who meets the requirements for
hardship set forth in Section 11.6 hereof shall be entitled to withdraw
amounts determined necessary to relieve such hardship from his SEPCO
Transferred Account, provided that he shall have first withdrawn all
other amounts available to him in accordance with the terms and order
of priority set forth in Section 11.1.
18.3 Loans from SEPCO Transferred Accounts. Subject to the provisions
of Section 11.7, a Participant may request that a loan be made to him from his
SEPCO Transferred Account, provided, however, that the Participant has first
borrowed all other amounts available to him under the terms of the Plan.
A Participant must obtain the consent of his or her spouse, if any, to
use any portion of his SEPCO Transferred Account as security for a loan. Within
the ninety-day period ending on the date on which a loan is made to a
Participant who is married, the Participant shall obtain and deliver to the
Committee the written consent of the Participant's spouse (1) to the loan, and
(2) to the reduction of the Participant's Account if the Participant's Account
is reduced because of nonpayment or other default with respect to the loan. No
further spousal consent shall be required in the event the Participant's Account
is subsequently reduced with respect to such loan, even if the Participant is
then married to a different spouse. A new spousal consent shall be required for
any subsequent loan to a Participant, if the Participant is then married.
18.4 Distribution of SEPCO Transferred Accounts. Notwithstanding any
provisions of this Plan to the contrary, a Participant with a SEPCO Transferred
Account shall be paid the vested benefits of the SEPCO Transferred Account upon
retirement, death, total and permanent disability, or termination of employment
as provided herein.
(a) All benefits from a Participant's SEPCO Transferred
Account shall be distributed in accordance with the distribution
options available under Article XII, with applicable spousal consent as
provided under the SEPCO Plan, unless a Participant elects payment of
benefits in the form of a life annuity pursuant to a written election
filed with the Committee prior to commencement of distribution of
benefits. The provisions of this Section 18.4 shall take precedence
over any conflicting provisions of the Plan and shall apply to any
Participant who has a SEPCO Transferred Account and who elects to
receive payment of his benefits from his SEPCO Transferred Account in
the form of a life annuity. A married Participant electing to receive
benefits in the form of a life annuity shall receive the value of his
benefit in the form of a qualified joint and survivor annuity, which
shall provide an annuity for the life of the Participant with a
survivor annuity for the life of the Participant's spouse which is
either 50% or 100%, as elected by the Participant, of the amount of the
annuity which is payable during the joint lives of the Participant and
the Participant's spouse, and which is the actuarial equivalent of a
single life annuity for the life of the Participant. An unmarried
Participant who elects a life annuity shall receive the value of his
benefits from his SEPCO Transferred Account in the form of an annuity
for his lifetime.
(b) If the Participant's interest is to be distributed in
other than a single sum, the amount required to be distributed for each
calendar year, beginning with distributions for the first Distribution
Calendar Year, must at least equal the quotient obtained by dividing
the Participant's Benefit by the Applicable Life Expectancy.
(c) The minimum distribution required for the Participant's
first Distribution Calendar Year must be made on or before the
Participant's Required Beginning Date. The minimum distribution for
other calendar years, including the minimum distribution for the
Distribution Calendar Year in which the Participant's Required
Beginning Date occurs, must be made on or before December 31 of that
Distribution Calendar Year.
(d) If the Participant's benefit is distributed in the form
of an annuity purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements of Section
401(a)(9) of the Code and the proposed regulations thereunder.
(e) Definitions.
(1) "Applicable Life Expectancy" means the life
expectancy calculated using the attained age of the
Participant as of the Participant's birthday in the
applicable calendar year reduced by one for each calendar
year which has elapsed since the date life expectancy was
first calculated. If life expectancy is being recalculated,
the applicable life expectancy shall be the life expectancy
as so recalculated. The applicable calendar year shall be
the first Distribution Calendar Year, and if life expectancy
is being recalculated such succeeding calendar year.
(2) "Distribution Calendar Year" means a calendar
year for which a minimum distribution is required. For
distributions beginning before the Participant's death, the
first Distribution Calendar Year is the calendar year
immediately preceding the calendar year which contains the
Participant's Required Beginning Date.
(3) "Participant's Benefit" means the account
balance as of the last valuation date in the calendar year
immediately preceding the Distribution Calendar Year
(valuation calendar year) increased by the amount of any
contributions or forfeitures allocated to the account
balance as of dates in the valuation calendar year after the
valuation date and decreased by distributions made in the
valuation calendar year after the valuation date. If any
portion of the minimum distribution for the first
Distribution Calendar Year is made in the second
Distribution Calendar Year on or before the Required
Beginning Date, the amount of the minimum distribution made
in the second Distribution Calendar Year shall be treated as
if it had been made in the immediately preceding
Distribution Calendar Year.
(4) "Required Beginning Date" means April 1st of
the calendar year following the calendar year in which the
Participant attains age 70-1/2, in accordance with
regulations prescribed by the Secretary of the Treasury.
(f) Notwithstanding anything contained herein to the
contrary, the requirements of this Section shall apply to any
distribution of a Participant's interest and will take precedence over
any inconsistent provisions of this Plan. All distributions required
under this Section shall be determined and made in accordance with the
proposed regulations under Section 401(a)(9), including the minimum
distribution incidental benefit requirement of Section 1.401(a)(9)-2 of
the proposed regulations.
18.5 Code Section 411(d)(6) Protected Benefits.
Notwithstanding any of the foregoing, the provisions of this Article XVIII to
effectuate the merger of the SEPCO Plan into this Plan shall not decrease a
Participant's accrued benefit, except to the extent permitted under Section
412(c)(8) of the Code, and shall not reduce or eliminate Code Section 411(d)(6)
protected benefits determined immediately prior to the date of such merger. The
Committee shall disregard any part of this Article XVIII or the Plan to the
extent that application of such would fail to satisfy this paragraph. If the
Committee disregards any portion of this Article XVIII or the Plan because it
would eliminate a protected benefit, the Committee shall maintain a schedule of
any such impacted early retirement option or other optional forms of benefit and
the Plan shall continue such for the affected Participants.
IN WITNESS WHEREOF, the Company has caused this amendment and
restatement of The Southern Company Employee Savings Plan effective as of
January 1, 1997, to be executed this _______ day of __________________, 1998.
SOUTHERN COMPANY SERVICES, INC.
By:
Its:
Attest:
By: _________________
Its: _________________
APPENDIX A - EMPLOYING COMPANIES
The Employing Companies as of July 1, 1998 are:
Alabama Power Company
Georgia Power Company
Gulf Power Company
Mississippi Power Company
Savannah Electric and Power Company
Southern Communications Services, Inc.
Southern Company Energy Solutions, Inc.
Southern Company Services, Inc.
Southern Energy Resources, Inc.
Southern Nuclear Operating Company, Inc.
FIRST AMENDMENT TO THE
SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
WHEREAS, the Employee Savings Plan Committee ("Committee") heretofore
adopted the amendment and restatement of The Southern Company Employee Savings
Plan ("Plan"), effective as of January 1, 1997; and
WHEREAS, the Board of Directors of Southern Company Services, Inc. has
determined that the Plan should be an employee stock ownership plan, as defined
in Section 4975(e)(7) of the Internal Revenue Code of 1986, as amended, and
Section 407(d)(6) of the Employee Retirement Income Security Act of 1974, as
amended; and
WHEREAS, the Committee desires to amend the Plan consistent with such
determination to cause the Plan to be an employee stock ownership plan and to
allow Participants to receive a distribution of dividends payable on Common
Stock under the Plan; and
WHEREAS, the Committee also desires to amend the Plan to provide for
the participation in the Plan by certain former employees of the Commonwealth
Energy System who become employed by Southern Energy Resources, Inc.; and
WHEREAS, the Committee is authorized pursuant to Section 15.1 of the
Plan to amend the Plan at any time, provided that the amendment does not involve
a substantial increase in cost to any Employing Company or is necessary or
desirable to comply with the laws and regulations applicable to the Plan.
NOW, THEREFORE, the Committee hereby amends the Plan as follows, to be
effective as provided herein: I.
Effective as of January 1, 1999, Article I shall be amended by adding
the following new sentence after the second sentence thereof:
This Plan is also intended to be an employee stock ownership plan, as
defined in Code Section 4975(e)(7) and ERISA Section 407(d)(6), and is
designed to invest primarily in qualifying employer securities, as
defined in Code Section 409(l).
II.
Effective as of the date hereof, Article III shall be amended by adding
a new Section 3.7 thereto as follows and by redesignating existing Section 3.7
as Section 3.8:
3.7 Former Commonwealth Energy System Employees.
Notwithstanding any other provision of the Plan to the contrary, with
respect to a former employee of the Commonwealth Energy System
("ComElectric") who is employed by Southern Energy Resources, Inc. and
is set forth on a schedule of employees acknowledged by the Committee,
such employee shall become a Participant as of the Enrollment Date
coincident with or next following such employee's date of employment.
III.
Effective as of January 1, 1999, Section 8.1 of the Plan shall be
amended by deleting the third sentence thereof and inserting a new sentence as
follows:
The Company Stock Fund shall be invested and, subject to Section 12.13
of the Plan, reinvested in Common Stock, provided that funds applicable
to the purchase of Common Stock pending investment of such funds may be
temporarily invested in short-term United States Government
obligations, other obligations guaranteed by the United States
Government, commercial paper, or certificates of deposit, and, if the
Trustee so determines, may be transferred to money market funds
utilized by the Trustee for qualified employee benefit trusts.
IV.
Effective as of January 1, 1999, Section 8.4 shall be amended by
deleting such Section in its entirety and substituting a new Section 8.4 as
follows:
8.4 Investment of Earnings. Except as provided in Section 12.13 of the
Plan, interest, dividends, if any, and other distributions received by
the Trustee with respect to an Investment Fund shall be invested in
such Investment Fund.
V.
Effective as of January 1, 1999, Section 9.2 shall be amended by
deleting the first sentence thereof and substituting a new sentence as follows:
Except as provided in Section 12.13 of the Plan, a Participant's
Account in respect of his interest in each Investment Fund shall be
credited or charged, as the case may be, as of each Valuation Date with
the dividends, income, gains, appreciation, losses, depreciation,
forfeitures, expenses, and other transactions with respect to such
Investment Fund for the Valuation Date as of which such credit or
charge accrued.
VI.
Effective as of January 1, 1999, Article XII shall be amended by adding
a new Section 12.13 to the end thereof as follows:
12.13 Distribution of Dividends Payable on Common Stock. Each
Participant may elect to receive a cash distribution of all or a
portion of the dividends payable on the shares of Common Stock credited
to the Participant's Account as of the record date of the Common Stock.
The Committee shall establish administrative procedures to enable
Participants to make elections under this Section 12.13. The dividends
payable on the shares of Common Stock credited to the Account of a
Participant who does not elect to receive a cash distribution shall be
invested in accordance with Section 8.4 of the Plan. Payment of cash
distributions under this Section 12.13 shall be made as soon as
administratively practicable after the payable date of the shares of
Common Stock, but in no event later than 90 days after the end of the
Plan Year which includes such payable date. A Participant's election to
receive cash distributions of dividends payable on Common Stock shall
be revoked automatically upon the Participant's death.
VII.
Effective as of January 1, 1999, Section 14.2 shall be amended by
deleting the first two sentences thereof and substituting two new sentences as
follows:
As soon as practicable after receipt of funds applicable to the
purchase of Common Stock, the Trustee shall purchase Common Stock or
cause Common Stock to be purchased. Such Common Stock may be purchased
on the open market or by private purchase (including private purchases
directly from The Southern Company); provided that (a) no private
purchase may be made at any price greater than the last sale price or
highest current independent bid price, whichever is higher, for Common
Stock on the New York Stock Exchange, plus an amount equal to the
commission payable in a stock exchange transaction; (b) if such private
purchase shall be a purchase of Common Stock directly from The Southern
Company, no commission shall be paid with respect thereto unless such
commission satisfies the requirements of Prohibited Transaction Class
Exemption 75-1; and (c) the Trustee may purchase Common Stock directly
from The Southern Company under The Southern Investment Plan, as from
time to time amended, or under any other similar plan made available to
holders of record of shares of Common Stock which may be in effect from
time to time, at the purchase price provided for in such plan.
Except as amended herein by this First Amendment, the Plan shall remain
in full force and effect as amended and restated by the Company prior to the
adoption of this First Amendment.
IN WITNESS WHEREOF, Southern Company Services, Inc., through the duly
authorized members of the Employee Savings Plan Committee, has adopted this
First Amendment to The Southern Company Employee Savings Plan this ____ day of
_________________________, 1998 to be effective as stated herein.
EMPLOYEE SAVINGS PLAN COMMITTEE:
Christopher C. Womack
Robert A. Bell
W. Dean Hudson
SECOND AMENDMENT TO THE
SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
WHEREAS, the Employee Savings Plan Committee ("Committee") heretofore
adopted the amendment and restatement of The Southern Company Employee Savings
Plan ("Plan"), effective as of January 1, 1997; and
WHEREAS, the Committee desires to amend the Plan to modify the
definition of Compensation for appliance salespersons to include certain
nonproductive pay earnings types as may be determined from time to time by the
Committee; and
WHEREAS, the Committee is authorized pursuant to Section 15.1 of the
Plan to amend the Plan at any time, provided that the amendment does not involve
a substantial increase in cost to any Employing Company or is necessary or
desirable to comply with the laws and regulations applicable to the Plan.
NOW, THEREFORE, the Committee hereby amends the Plan as follows, to be
effective as provided herein:
I.
Effective for pay periods ending on and after January 8, 1999, Section
2.18 of the Plan shall be amended by adding the following to the end of the
first paragraph thereof:
Effective for pay periods ending on and after January 8, 1999, the term
"Compensation" shall also include, for appliance salespersons, certain
nonproductive pay earnings types as determined from time to time by the
Committee and set forth on Appendix B to the Plan, which Appendix may
be updated from time to time.
II.
Except as amended herein by this Second Amendment, the Plan shall
remain in full force and effect.
IN WITNESS WHEREOF, Southern Company Services, Inc., through the duly
authorized members of the Employee Savings Plan Committee, has adopted this
Second Amendment to The Southern Company Employee Savings Plan this ____ day of
_________________________, 1999 to be effective as stated herein.
EMPLOYEE SAVINGS PLAN COMMITTEE:
Christopher C. Womack
Robert A. Bell
W. Dean Hudson
APPENDIX B
Nonproductive Pay Earnings Types
Earnings Code Earnings Description
003 Salesperson - Hourly
092 Holiday Taken
093 Meetings
095 Meetings - Safety
096 Disability 100%
100 Disability Extended Approval
106 Leave - Death
108 Occupational Injury
111 Jury Duty
112 Training
113 Safety Training
115 Vacation
116 Vacation Special Circumstances
117 Vacation FMLA Employee
118 Vacation FMLA Family Care
119 Time Off With Pay
125 Holiday Banked - Taken
127 Vacation In Lieu Of Disability
442 DISABILITY FMLA EMPLOYEE
THIRD AMENDMENT TO THE
SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN
WHEREAS, the Employee Savings Plan Committee ("Committee") heretofore
adopted the amendment and restatement of The Southern Company Employee Savings
Plan ("Plan"), effective as of January 1, 1997; and
WHEREAS, the Committee desires to amend the Plan to make certain design
changes; and
WHEREAS, the Committee is authorized pursuant to Section 15.1 of the
Plan to amend the Plan at any time, provided that the amendment does not involve
a substantial increase in cost to any Employing Company or is necessary or
desirable to comply with the laws and regulations applicable to the Plan.
NOW, THEREFORE, the Committee hereby amends the Plan as follows, to be
effective as provided herein:
I.
Effective as of January 1, 1996, Subsection (1) of Section 2.27 of the
Plan shall be amended as follows:
(1) an Employee who is treated as such solely by reason of the
"leased employee" rules of Code Section 414(n) such that, pursuant to
an agreement between an Employing Company and any other person, such
individual has performed services for the Employing Company (or the
Employing Company and related persons as described in Code Section
414(n)(6)) on a substantially full-time basis for a period of at least
one year and such services were performed under the primary direction
or control of the Employing Company;
II.
Effective as of January 1, 1999, Section 3.8 of the Plan shall be
amended by adding the following sentence to the end of such Section:
Loan repayments will be suspended under the Plan as permitted under
Section 414(u)(4) of the Code.
III.
Effective as of January 1, 1996, Section 12.6(b) shall be amended by
adding the following sentence to the end of the first paragraph in such Section:
In addition, any Participant who attains age 70 1/2 on or after January
1, 1996, but prior to January 1, 1999, may elect to have payment of his
benefits begin no later than April 1 of the calendar year following the
calendar year during which the Participant attains age 70 1/2,
regardless of the Participant's termination of employment.
IV.
Except as amended herein by this Third Amendment, the Plan shall remain
in full force and effect.
IN WITNESS WHEREOF, Southern Company Services, Inc., through the duly
authorized members of the Employee Savings Plan Committee, has adopted this
Third Amendment to The Southern Company Employee Savings Plan this ____ day of
___________________, 1999.
EMPLOYEE SAVINGS PLAN COMMITTEE:
Christopher C. Womack
Robert A. Bell
W. Dean Hudson