EXHIBIT 10(a)62
THE SOUTHERN COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
As Amended and Restated
Effective January 1, 1997
TABLE OF CONTENTS
PAGE
ARTICLE I - PURPOSE OF THE PLAN..................................1
ARTICLE II - DEFINITIONS.........................................2
2.1 "Account"...............................................2
2.2 "Affiliated Employer"...................................2
2.3 "Aggregate Account".....................................2
2.4 "Aggregation Group".....................................3
2.5 "Annual Addition".......................................3
2.6 "Beneficiary"...........................................3
2.7 "Board of Directors"....................................3
2.8 "Break-in-Service Date".................................3
2.9 "Code"..................................................3
2.10 "Committee".............................................4
2.11 "Common Stock"..........................................4
2.12 "Company"...............................................4
2.13 "Compensation"..........................................4
2.14 "Defined Benefit Plan Fraction".........................4
2.15 "Defined Contribution Plan Fraction"....................4
2.16 "Determination Date"....................................5
2.17 "Determination Year"....................................5
2.18 "Distributee"...........................................5
2.19 "Direct Rollover".......................................5
2.20 "Eligible Employee".....................................5
2.21 "Eligible Retirement Plan"..............................6
2.22 "Eligible Rollover Distribution"........................6
2.23 "Employee"..............................................6
2.24 "Employing Company".....................................7
2.25 "Enrollment Date".......................................7
2.26 "ERISA".................................................7
2.27 "Highly Compensated Employee"...........................7
2.28 "Hour of Service".......................................7
2.29 "Key Employee"..........................................7
2.30 "Limitation Year".......................................7
2.31 "Look-Back Year"........................................7
2.32 "Non-Highly Compensated Employee".......................7
2.33 "Normal Retirement Date"................................7
2.34 "One-Year Break in Service".............................8
2.35 "Participant"...........................................8
2.36 "Permissive Aggregation Group"..........................8
2.37 "Plan"..................................................8
2.38 "Plan Year".............................................8
2.39 "Present Value of Accrued Retirement Income"............8
2.40 "Qualified Election Period".............................8
2.41 "Qualified Participant..................................8
2.42 "Required Aggregation Group"............................8
2.43 "SEPCO".................................................8
2.44 "SEPCO ESOP"............................................8
2.45 "Super-Top-Heavy Group".................................9
2.46 "Surviving Spouse"......................................9
2.47 "Top-Heavy Group".......................................9
2.48 "Trust or Trust Fund"...................................9
2.49 "Trust Agreement".......................................9
2.50 "Trustee"...............................................9
2.51 "Valuation Date"........................................9
2.52 "Year of Service".......................................9
ARTICLE III - PARTICIPATION.....................................12
3.1 Eligibility Requirements...............................12
3.2 Duration of Participation..............................12
3.3 Participation upon Reemployment........................12
3.4 No Restoration of Previously Distributed Benefits......12
3.5 Special Rule for Scott Paper Company Energy Complex
Employees..............................................12
3.6 Former Commonwealth Edison of Indiana Employees........13
3.7 Military Leave.........................................13
ARTICLE IV - EMPLOYING COMPANY CONTRIBUTION.....................14
4.1 Amount of Contribution.................................14
4.2 Time of Payment........................................14
4.3 Purchases of Common Stock..............................14
4.4 Restrictions on Common Stock...........................14
4.5 Exclusive Benefit of Employees.........................14
ARTICLE V - PARTICIPANT CONTRIBUTION............................16
5.1 Participant Contributions Not Allowed..................16
ARTICLE VI - ACCOUNTS OF PARTICIPANTS...........................17
6.1 Separate Accounts......................................17
6.2 Allocation of Common Stock.............................17
6.3 Section 415 Limitations................................17
6.4 Correction of Contributions in Excess of Section
415 Limits.............................................18
6.5 Combination of Plans...................................19
6.6 Allocation of Dividends and other Distributions........19
6.7 Valuations.............................................20
6.8 Voting Company Stock...................................20
6.9 Correction of Prior Incorrect Allocations and
Distributions..........................................20
ARTICLE VII - AUTHORIZED WITHDRAWALS............................22
7.1 In General.............................................22
7.2 Distributions in Lieu of Diversification of
Investments Pursuant to Code Section 401(a)(28)(B).....22
7.3 In-Service Withdrawals.................................22
ARTICLE VIII - DISTRIBUTIONS TO PARTICIPANTS....................24
8.1 Vesting................................................24
8.2 Distribution upon Retirement...........................24
8.3 Distribution upon Death................................24
8.4 Designation of Beneficiary in the Event of Death.......24
8.5 Distribution upon Disability...........................25
8.6 Distribution upon Termination of Employment............25
8.7 Property Distributed/Method of Payment.................26
8.8 Commencement of Benefits...............................27
8.9 Distribution upon Death................................27
8.10 Adjustments for Deferred Accounts or Installment
Payments...............................................28
8.11 Transfers between Employing Companies..................28
8.12 Distribution to Alternate Payees.......................28
8.13 Requirement for Direct Rollovers.......................28
8.14 Consent and Notice Requirements........................28
ARTICLE IX - ADMINSTRATION......................................30
9.1 Membership of Committee................................30
9.2 Acceptance and Resignation.............................30
9.3 Transaction of Business................................30
9.4 Responsibilities in General............................30
9.5 Committee as Named Fiduciary...........................30
9.6 Rules for Plan Administration..........................30
9.7 Employment of Agents...................................31
9.8 Co-Fiduciaries.........................................31
9.9 General Records........................................31
9.10 Liability of the Committee.............................31
9.11 Reimbursement of Expenses and Compensation of Committee31
9.12 Expenses of Plan and Trust Fund........................31
9.13 Responsibility for Funding Policy......................32
9.14 Code Section 411(d)(6) Protected Benefits..............32
9.15 Management of Assets...................................32
9.16 Notice and Claims Procedure............................32
9.17 Bonding................................................32
9.18 Multiple Fiduciary Capacities..........................33
ARTICLE X - THE TRUST FUND AND TRUSTEE..........................34
10.1 Trustee................................................34
10.2 Duties of the Trustee..................................34
10.3 Diversion..............................................34
ARTICLE XI - AMENDMENT AND TERMINATION..........................35
11.1 Amendment of the Plan..................................35
11.2 Termination of the Plan................................35
11.3 Merger or Consolidation of the Plan....................36
ARTICLE XII - TOP-HEAVY PROVISIONS..............................37
12.1 Top-Heavy Plan Requirements............................37
12.2 Determination of Top-Heavy Status......................37
12.3 Minimum Allocation for Top-Heavy Plan Years............38
12.4 Adjustments to Maximum Benefit Limits for Top-Heavy
Plans..................................................38
ARTICLE XIII - GENERAL PROVISIONS...............................40
13.1 Plan Not an Employment Contract........................40
13.2 Non-Alienation or Assignment...........................40
13.3 Payments to Minors and Others..........................40
13.4 Source of Benefits.....................................40
13.5 Unclaimed Benefits.....................................41
13.6 Governing Law..........................................41
ARTICLE I
PURPOSE OF THE PLAN
The purpose of this Plan is to enable Participants to share in the
future of The Southern Company, to provide Participants with an opportunity to
accumulate capital for their future economic security, and to enable
Participants to acquire stock ownership interests in The Southern Company.
Consequently, Employing Company contributions to the Plan will be invested
primarily in Common Stock of The Southern Company.
The Plan is also designed to provide Participants with beneficial
ownership of Common Stock of The Southern Company substantially in proportion to
their relative Compensation without requiring any cash outlay, any reduction in
pay or other benefits, or the surrender of any other rights on the part of
Participants.
The Plan was originally effective January 1, 1976, and was last amended
and restated effective as of April 1, 1995. The Plan is hereby amended and
restated effective January 1, 1997 in order to incorporate a variety of plan
design and other changes. It is intended that this Plan, as amended and restated
effective as of January 1, 1997, shall constitute an employee stock ownership
plan under Section 4975(e)(7) of the Internal Revenue Code of 1986, as amended
("Code") and Section 407(d)(6) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"). The Plan is a stock bonus plan intended to be
qualified under Section 401(a) of the Code.
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 separate account maintained for each
Participant in accordance with Section 6.1.
2.2......"Affiliated Employer" shall mean each 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 any 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 any 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 any Employing Company; and (d) any other entity required to be
aggregated with an Employing Company pursuant to regulations under Section
414(o) of the Code. Notwithstanding the foregoing, for purposes of applying the
limitations of Section 6.3, the term Affiliated Employer shall be adjusted as
required by Code Section 415(h).
2.3......"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.
2.4......"Aggregation Group" shall mean either a Required Aggregation
Group or a Permissive Aggregation Group.
2.5......"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
and 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.
2.6......"Beneficiary" shall mean any person(s) who, or estate(s),
trust(s), or organization(s) which, in accordance with the provisions of Section
8.4, become entitled to receive benefits upon the death of a Participant.
2.7......"Board of Directors" shall mean the Board of Directors of
Southern Company Services, Inc.
2.8......"Break-in-Service Date" means the earlier of the following
dates:
(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.
2.9......"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.
2.10....."Committee" shall mean the Committee appointed pursuant to
Section 9.1 to serve as plan administrator.
2.11....."Common Stock" shall mean the common stock of The Southern
Company, which stock is a qualifying employer security within the meaning of
Code Section 409(l)(1) and which stock is a registration-type class of
securities as defined in Code Section 409(e)(4).
2.12....."Company" shall mean Southern Company Services, Inc., and its
successors.
2.13....."Compensation" shall mean the total amount of a Participant's
salary or wages, amounts received as sick pay and for leaves of absence with
pay, overtime pay, any shift, nuclear, or other pay differentials, substitution
pay, and other amounts received for personal services actually rendered, amounts
paid by any Employing Company to The Southern Company Employee Savings Plan as
Elective Employer Contributions (as defined therein) pursuant to the
Participant's exercise of his deferral option made in accordance with Section
401(k) of the Code, 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, includable as
gross income, and amounts contributed by an Employing Company to the Southern
Electric System Flexible Benefits Plan or The Southern Company Flexible Benefits
Plan on behalf of the Participant pursuant to his salary reduction election
under either such plan, and before deduction of taxes, social security, etc. The
term "Compensation" shall not include amounts which are reimbursement 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 an 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)).
2.14....."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.
2.15 "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.
2.16 "Determination Date" shall mean with respect to a Plan Year, the
last day of the preceding Plan Year.
2.17 "Determination Year" shall mean the Plan Year being tested.
2.18 "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.
2.19 "Direct Rollover" shall mean a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
2.20 "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.
2.21 "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.
2.22 "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).
2.23 "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).
2.24 "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.
2.25 "Enrollment Date" shall mean the day on which the Eligible
Employee meets the requirements for participation in this Plan under Article
III.
2.26 "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.
2.27 "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.
2.28 "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.
2.29 "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).
2.30 "Limitation Year" shall mean the Plan Year.
2.31 "Look-Back Year" shall mean the Plan Year preceding the
Determination Year.
2.32 "Non-Highly Compensated Employee" shall mean an Employee who is
not a Highly Compensated Employee.
2.33 "Normal Retirement Date" shall mean the first day of the month
following a Participant's sixty-fifth (65th) birthday.
2.34 "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.
2.35 "Participant" shall mean (a) an Eligible Employee who satisfied
the eligibility requirements set forth in Section 3.1 of the Plan and whose
participation in the Plan at the time of reference has not been terminated as
provided in the Plan and (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.
2.36 "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.
2.37 "Plan" shall mean The Southern Company Employee Stock Ownership
Plan, as described herein and as it may be amended from time to time. Prior to
January 1, 1991, the Plan was named The Employee Stock Ownership Plan of The
Southern Company System.
2.38 "Plan Year" shall mean the twelve-month period commencing January
1st and ending on the last day of December next following.
2.39 "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.
2.40 "Qualified Election Period" shall mean the six-Plan-Year period
beginning with the Plan Year in which the Participant first becomes a Qualified
Participant.
2.41 "Qualified Participant" shall mean a Participant who has attained
age 55 and who has completed at least 10 years of participation in the Plan,
whether or not he remains an Employee.
2.42 "Required Aggregation Group" shall mean those plans that are
required to be aggregated as determined under this Section 2.42. 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
requirements of Code Section 401(a)(4) or 410 will be required to be aggregated.
2.43 "SEPCO" shall mean Savannah Electric and Power Company.
2.44 "SEPCO ESOP" shall mean the Employee Stock Ownership Plan of
Savannah Electric and Power Company.
2.45 "Super-Top-Heavy Group" shall mean an Aggregation Group that would
be a Top-Heavy Group if 90% were substituted for 60% in Section 2.47.
2.46 "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.
2.47 "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.
2.48 "Trust or Trust Fund" shall mean the trust established pursuant to
the Trust Agreement.
2.49 "Trust Agreement" shall mean the trust agreement between the
Company and the Trustee, as described in Article X.
2.50 "Trustee" shall mean the person or corporation designated as
trustee under the Trust Agreement, including any successor or successors.
2.51 "Valuation Date" shall mean each business day of the New York
Stock Exchange.
2.52 "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 defined contribution plan under Section
401(a) 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 ESOP for actual
service while employed at SEPCO as of his date of transfer.
Notwithstanding anything in this Section 2.52 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 shall become a
Participant on the later of January 1, 1997 or the Enrollment Date next
following the date on which the Eligible Employee completes a Year of Service.
3.2 Duration of Participation. Once an Eligible Employee becomes a
Participant in the Plan, he shall remain an active Participant during each Plan
Year in which he is an Eligible Employee as of the last day of such Plan Year;
provided, however, that an Eligible Employee whose employment terminates during
a Plan Year by reason of death, retirement pursuant to his Affiliated Employer's
pension plan, or total and permanent disability, as determined by the Social
Security Administration, shall not cease to be an active Participant until the
first day of the Plan Year next following the date such termination of
employment occurs. In addition, a Participant in the Plan shall remain an active
Participant during periods of authorized leaves of absence granted by an
Employing Company under rules uniformly applicable to all persons similarly
situated, during periods of sickness, disability leave, jury or military duty,
or vacation or holiday leave. If the Employee does not return to work within the
period of his authorized leave of absence (not including sickness or disability
leave) or within the period provided by law in respect of absence for military
duty, he shall cease to be an active Participant in the Plan as of the first day
next following the date his authorized leave of absence or military duty is
terminated.
3.3 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
2.52.
(b) If the reemployed Eligible Employee had 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 shall again become a
Participant in the Plan as of the date of his reemployment.
3.4 No Restoration of Previously Distributed Benefits. A Participant
who had terminated his employment with the Affiliated Employers and who has
received a distribution of the amount credited to his Account pursuant to
Section 8.6 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.
3.5 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 shall become a Participant on 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 shall become a
Participant on 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 shall become a Participant on the Enrollment Date coincident with
or next following 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
EMPLOYING COMPANY CONTRIBUTION
4.1 Amount of Contribution. An Employing Company may contribute to the
Plan, in respect of each Plan Year, cash or Common Stock in an amount (or under
such formula) as the Company, in its sole and absolute discretion, shall
determine. If Common Stock is contributed to the Plan, the number of shares
contributed shall be determined by the market value of such Common Stock, as
determined by the Company.
4.2 Time of Payment. The Employing Company shall transfer the amount of
cash or Common Stock described in Section 4.1 to the Plan on any date or dates
consistent with the law, which the Employing Company may select, provided that
the contributions for a Plan Year shall be transferred not later than the time
(including extensions) for filing the consolidated federal income tax return for
such Plan Year.
4.3 Purchases of Common Stock. If a contribution to the Plan under
Section 4.1 is made in cash, the Trustee shall use such contribution to purchase
Common Stock; provided, however, that the Plan may retain a cash reserve in an
amount which does not exceed the value of fractional shares and declared cash
dividends allocable to those Participants entitled to receive an immediate
distribution of their Accounts at the time of the contribution of the cash. If
Common Stock is purchased from The Southern Company, the price paid therefor by
the Trustee shall be the market value of such Common Stock, as determined by the
Company.
4.4 Restrictions on Common Stock. No Common Stock held by the Plan may
be used to satisfy a loan made to the Plan, nor may any Common Stock held by the
Plan be used as collateral for a loan made to the Plan.
4.5 Exclusive Benefit of Employees. All contributions made pursuant to
the Plan shall be held by the Trustee in accordance with the terms of the Trust
Agreement for the exclusive benefit of those Employees, including former
Employees, who are Participants under the Plan, and their Beneficiaries, and
shall be applied to provide benefits under the Plan and to pay expenses of
administration of the Plan and the Trust, to the extent that such expenses are
not otherwise paid. At no time prior to the satisfaction of all liabilities with
respect to such Employees and their Beneficiaries shall any part of the Trust
Fund be used for, or diverted to, purposes other than for the exclusive benefit
of such Employees and their Beneficiaries. However, notwithstanding the
provisions of this Section 4.5:
(a) If any contribution under the Plan is conditioned on
initial qualification of the Plan under Section 401(a) of the Code and
if the Plan does not so qualify, the Trustee shall, upon written
request of the Employing Company, return to the Employing Company the
amount of such contribution (increased by earnings attributable thereto
and reduced by losses attributable thereto) within one calendar year
after the date that qualification of the Plan is denied; provided that
the application for the determination is made by the time prescribed by
law for filing the Employing Company's return for the taxable year in
which the Plan is adopted or such later date as the Secretary of the
Treasury may prescribe.
(b) If a contribution is conditioned upon the deductibility of
the contribution under Section 404 of the Code, then to the extent the
deduction is disallowed the Trustee shall, upon written request of the
Employing Company, return the contribution (to the extent disallowed)
to the Employing Company within one year after the date the deduction
is disallowed.
(c) If a contribution or any portion thereof is made by the
Employing Company by a mistake of fact, the Trustee shall, upon written
request of the Employing Company, return the contribution or such
portion to the Employing Company within one year after the date of
payment to the Trustee.
The amount which may be returned to the Employing Company under this
Section 4.5, is the excess of (a) the amount contributed over (b) the amount
that would have been contributed had there not occurred a mistake of fact or
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.
ARTICLE V
PARTICIPANT CONTRIBUTION
5.1 Participant Contributions Not Allowed. Participant contributions
are neither required nor permitted under the Plan. Notwithstanding the
foregoing, to the extent that Participant contributions were permitted under the
terms of the Plan in effect prior to January 1, 1983, such contributions and/or
pledges of contributions attributable to Plan Years beginning before January 1,
1983, may be made in accordance with the applicable provisions of the terms of
the Plan as in effect prior to January 1, 1983.
ARTICLE VI
ACCOUNTS OF PARTICIPANTS
6.1 Separate Accounts. The Committee shall establish and maintain a
separate Account for each Participant, with separate subaccounts as the
Committee shall direct in its sole discretion. The subaccounts maintained in
accordance with this Section 6.1 shall be for bookkeeping purposes only.
Subaccounts, to the extent they were created under the Plan prior to January 1,
1983, shall be maintained, if necessary.
The Committee shall also establish separate subaccounts for each
Participant, as the Committee shall direct, as is necessary to reflect a
Participant's interest in the Plan resulting from the transfer of his accounts
from the SEPCO ESOP due to the merger of such plan into this Plan effective as
of January 1, 1993. Any such subaccounts so established shall be subject to the
terms and conditions of this Plan.
6.2 Allocation of Common Stock. All shares of Common Stock contributed
or purchased with cash contributions for such Plan Year and all fractional
rights to such shares shall be allocated as of the close of such Plan Year by
the Committee to the Account of each Participant who was a Participant or deemed
to be a Participant pursuant to Section 3.2 on the last day of such Plan Year.
Such allocation shall be made in accordance with the ratio to which each
eligible Participant's Compensation for such Plan Year bears to the total
Compensation of all Participants eligible to share in the contribution for such
Plan Year.
6.3 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 6.3, wherever the term
"compensation" is used, such term shall mean compensation as defined in
Code Section 414(c)(3) and any rulings or regulations thereunder.
(d) The Annual Addition for any Plan Year beginning before
January 1, 1987 shall not be recomputed to treat all employee
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 6.3) 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.
6.4 Correction of Contributions in Excess of Section 415 Limits. If the
Annual Additions for a Participant exceed the limits of Section 6.3 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 6.4, the
excess amounts shall not be deemed Annual Additions if they are corrected by
forfeiture of that portion, or all, of the Employing Company contributions that
were allocated to the Participant's Account, as is necessary to ensure
compliance with Section 6.3.
Any amounts forfeited under this Section 6.4 shall be held in a
suspense account and shall be applied, subject to Section 6.3, toward funding
the Employing Company contributions for the next succeeding Plan Year. Such
application shall be made prior to any Employing Company 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 6.4.
If any amount remains in a suspense account provided for under this Section 6.4
upon termination of this Plan, such amount will revert to the Employing
Companies notwithstanding any other provision of this Plan.
6.5 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 6.3(b), corrective adjustments (a) for an
Employee shall not be made under this Plan until the corrective adjustments have
been made under such other defined benefit plan and defined contribution plan
but (b) for a Participant whose distribution of benefit payments has commenced
under such defined benefit plan, shall be made under this Plan 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 The Southern Company Employee Savings Plan
("ESP"). 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 6.3(a), corrective adjustments shall first be made under
the ESP and then, to the extent necessary, under the PSP and then, to the extent
necessary, under this Plan.
6.6 Allocation of Dividends and other Distributions.
(a) Any dividends or other distributions of cash on the Common
Stock shall be allocated to a Participant's Account on the basis of
Account balances. The amount of any cash dividends on Common Stock so
allocated may be retained in the Participants' Accounts or paid to such
Participants pursuant to (b) below. Any cash dividends retained in the
Accounts of Participants and any other distributions of cash on the
Common Stock so allocated shall be reinvested by the Trustee in Common
Stock which shall be credited to each such Participant's Account. In
reinvesting such dividends or other distributions of cash on the Common
Stock, the Trustee may purchase Common Stock under The Southern
Company's Dividend Reinvestment and Stock Purchase Plan, from The
Southern Company, or on the open market.
If a dividend or other distribution on the Common Stock
allocated to a Participant's Account is of additional shares of Common
Stock, the Trustee shall credit such shares to the Participant's
Account. If a dividend or other distribution on the Common Stock
allocated to a Participant's Account is of property other than cash or
additional shares of Common Stock, the Trustee shall sell such property
for an amount not less than its fair market value as determined by the
Trustee and reinvest the proceeds of such sale in shares of Common
Stock pursuant to this Section 6.6. All allocations under this
subsection shall be made on the basis of the subaccounts created in
accordance with Section 6.1.
(b) Any cash dividends received by the Trustee on Common Stock
allocated to the Accounts of Participants (or Beneficiaries) may be
retained in the Participants' Accounts as provided in (a) above or may
be paid to such Participants at the sole discretion of the Committee;
provided that any current payment in cash must be made within two years
of the date such dividends are received by the Trustee, or, if the
Employing Company desires a tax deduction for the amount of such
dividends pursuant to Code Section 404(k), such cash dividends shall be
distributed in cash not later than 90 days after the close of the Plan
Year in which such dividends were paid.
(c) Notwithstanding (b) above, if during any Plan Year the
Committee shall determine not to pay cash dividends received by the
Trustee on Common Stock allocated to Accounts of Participants to such
Participants, a Participant may elect to have such cash dividends (or
other distributions) paid to him currently by the Trustee. Such an
election shall be made in such time and manner as may be prescribed by
the Committee and shall be effective only with respect to dividends
which are payable by The Southern Company to the Trustee in the Plan
Years which begin after the Plan Year in which the election is made. An
election shall remain in full force until revoked by a Participant. Any
revocation shall be made in accordance with procedures established by
the Committee and shall become effective only with respect to dividends
payable by The Southern Company to the Trustee in Plan Years which
begin after the Plan Year in which the revocation is made.
6.7 Valuations. Each Participant shall be furnished a statement of his
Account no less frequently than annually and upon any distribution, which
statement shall reflect the balances of the subaccounts referred to in Section
6.1. Each Participant's Account shall be adjusted as of each Valuation Date to
reflect any increase or decrease in the number of shares of Common Stock
credited to his Account and to reflect the effect of income collected, realized
and unrealized gains and losses, and expenses attributable thereto.
6.8 Voting Company 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. Fractional shares shall be combined and voted by the Trustee to the
extent possible to reflect the instructions of Participants credited with such
shares. 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 may direct the Trustee how to
vote such Participant's shares. If the Pension Fund Investment Review Committee
of The Southern Company System 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 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 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.
6.9 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 under the Plan or
discrepancies in the Accounts of the Participants.
ARTICLE VII
AUTHORIZED WITHDRAWALS
7.1 In General. Except as provided in this Article VII, shares of
Common Stock allocated to the Account of a Participant may be distributed to him
only in the event he ceases to be an Employee, whether by reason of retirement,
total and permanent disability, as determined by the Social Security
Administration, death, or other termination of employment. Distributions upon
termination of employment for any of the above reasons, shall be made in
accordance with Article VIII.
7.2 Distributions in Lieu of Diversification of Investments Pursuant to
Code Section 401(a)(28)(B).
(a) Each Qualified Participant shall be permitted to elect
within 90 days after the last day of each Plan Year during the
Participant's Qualified Election Period to receive a cash distribution
from the Plan not to exceed 25% of the value of the Participant's
Account balance attributable to Common Stock which was acquired by the
Plan after December 31, 1986. Within 90 days after the close of the
last Plan Year in the Participant's Qualified Election Period, a
Qualified Participant may elect to receive a cash distribution from the
Plan not to exceed 50% of the value of such Account balance.
(b) The Participant's election shall be made in accordance
with the procedures established by the Committee and shall be effective
no later than 180 days after the close of the Plan Year to which the
election applies. The Plan shall distribute (notwithstanding Section
409(d) of the Code) the portion of the Participant's Account that is
covered by the election within 90 days after the last day of the period
during which the election can be made. This Section 7.2 shall apply
notwithstanding any other provision of the Plan other than such
provisions as may require the consent of the Participant to a
distribution with a present value in excess of $3,500 ($5,000 effective
January 1, 1998). If the Participant does not consent to a distribution
with a present value in excess of $3,500 ($5,000 effective January 1,
1998) under this Section 7.2, such amount shall be retained in the Plan
and the Plan shall be deemed to have satisfied the diversification
requirements of Section 401(a)(28)(B) of the Code.
7.3 In-Service Withdrawals. Subject to the requirements of Section
8.14, a Participant who is employed by an Affiliated Employer may at any time
elect to have distributed to him the cash value of a specific number of whole
shares of Common Stock, provided such Common Stock shall have been credited to
the Participant's Account for a period of at least 84 months. Such shares of
Common Stock shall be distributed not prior to the first day of the 85th month
following the
month in which any full shares of Common Stock shall have been credited to his
Account. The election shall be made in accordance with the procedures
established by the Committee.
Any such withdrawal shall be subject to the following requirements:
(a) a withdrawal must be for a specific number of whole shares
or the value of a specific number of whole shares of Common Stock;
(b) the specific number of shares requested must equal at
least the lesser of 20 shares or the total number of whole shares
available for withdrawal from the Participant's Account; and
(c) a withdrawal shall be made in the form of cash, provided
that with respect to any distribution which is attributable to full
shares of Common Stock, the Participant shall have the right to demand
that such portion of the distribution be made in the form of Common
Stock.
ARTICLE VIII
DISTRIBUTIONS TO PARTICIPANTS
8.1 Vesting. All amounts credited to the Account of a Participant under
the Plan shall at all times be fully vested and nonforfeitable.
8.2 Distribution upon Retirement.
(a) If a Participant retires pursuant to his Affiliated
Employer's pension plan, the entire balance credited to his Account
shall be payable to him in the manner and time for commencement of
benefits requested by the Participant pursuant to Sections 8.7 and 8.8.
(b) Notwithstanding a Participant's election to defer receipt
of benefits under (a) above, the Committee shall direct payment in a
lump sum to such Participant if the balance of his Account
(attributable to Employing Company and Employee contributions) 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 benefits exceed $3,500 ($5,000 effective
January 1, 1998) without the written consent of the Participant.
8.3 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 Beneficiary or Beneficiaries in a lump sum
pursuant to Section 8.9(b).
8.4 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 8.4 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 of 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.
8.5 Distribution upon Disability. If a Participant's employment with
the Affiliated Employers is terminated by reason of his total and permanent
disability, as determined by the Social Security Administration, such disabled
Participant shall be entitled to receive the full value of his Account
immediately following the date the Social Security Administration determines the
Participant is totally and permanently disabled, in a single lump sum payment.
The Participant or his legal representative shall request the time for
commencement of benefits pursuant to Section 8.8. Notwithstanding the foregoing,
effective July 1, 1995, the Committee shall direct payment in a single lump sum
to such Participant or his legal representative if the balance of the
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).
8.6 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 8.2, 8.3, or 8.5, he shall become entitled to payment of the
full value of his Account as hereinafter provided.
(b) Upon termination of employment with the Affiliated
Employers, the Participant may request a distribution in a single lump
sum of the full value of his Account.
Alternatively, such Participant may elect to defer receipt of the full value of
his Account until a time not later than the time specified in Section
8.8 below. Any deferred distribution shall commence as soon as
practicable after the Valuation Date selected by the Participant.
(c) Notwithstanding a Participant's election to defer receipt
of benefits under (b) above, the Committee shall direct payment in a
lump sum to such Participant if the balance of his Account
(attributable to Employing Company and Employee contributions) as of
the last Valuation Date in the month in which such Participant
terminates employment with the Affiliated Employers does not exceed
$3,500 ($5,000 effective January 1, 1998) in accordance with Code
Section 411(a)(11). The Committee shall not cash-out any Participant
whose benefits exceed $3,500 ($5,000 effective January 1, 1998) without
the written consent of the Participant.
8.7 Property Distributed/Method of Payment.
(a) A Participant separating from service in accordance with
Section 8.2 shall elect the manner in which the Common Stock credited
to his Account is distributed and a time for commencement of the
distribution as provided hereinafter. The election by the Participant
shall be made in accordance with the procedures established by the
Committee. The Participant shall select one of the following
alternative forms of distribution of his Account:
(1) A lump sum distribution; or
(2) Annual installments for a period not to exceed
five years or, in the case of a Participant whose Account
exceeds $500,000, five years plus one additional year (but not
more than five additional years) for each $100,000 or fraction
thereof by which such Account exceeds $500,000. The dollar
amounts contained in this paragraph (2) shall be adjusted by
the Secretary of the Treasury pursuant to Section 409(o)(2) of
the Code.
(b) All lump sum distributions under the Plan shall be made in
cash, provided that a Participant shall have the right to request that
such distribution be made in full shares of Common Stock, except that
fractional shares shall be converted to and paid in cash, and declared
but unpaid cash dividends shall be paid in cash. If any additional
shares of Common Stock are subsequently allocated to the Participant's
Account, such shares shall be distributed to the Participant or his
Beneficiary within 60 days following the date on which such additional
allocation is made.
(c) All installment distributions under this Section 8.7 shall
be made in cash, unless the Participant shall request that such
distribution be made in full shares of Common Stock and cash for any
fractional shares and declared but unpaid cash dividends. If a
Participant elects installment payments, any additional shares of Common Stock
allocated to his Account shall be added to the undistributed balance of
such Account and be distributed thereafter in the manner the
Participant has elected.
8.8 Commencement of Benefits.
(a) Unless the Participant elects to have payment begin at a
later date, payment of benefits to the Participant shall begin at the
Participant's election, in accordance with the procedures established
by the Committee, not later than 60 days after the last day of the Plan
Year in which the latest of the following occurs:
(1) the Participant attains the earlier of age
65 or his Normal Retirement Date;
(2) the Participant's 10th anniversary of
participation under the Plan; or
(3) the Participant's separation from service.
(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 8.8(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.
8.9 Distribution upon Death.
(a) If the Participant dies before his entire nonforfeitable
interest has been distributed to him, the remaining portion of such
interest shall be distributed in a single lump sum to his Beneficiary.
(b) If the Participant dies before the distribution of his
nonforfeitable interest has begun, the entire interest shall be
distributed in a single lump sum to his Beneficiary within 60 days
following the Company's receipt of notification of the death of such
Participant.
8.10 Adjustments for Deferred Accounts or Installment Payments. If the
distribution of benefits to a Participant will either be paid in installments or
the Participant elects to postpone distribution of his benefits payable in a
lump sum, the Participant's Account shall remain in the Trust Fund and shall
continue to participate in the valuations as provided in Sections 6.6 and 6.7
until fully distributed.
8.11 Transfers 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.
8.12 Distribution 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 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 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 Section 8.7 of
the Plan and only to the extent the Participant would be eligible for such
distribution option.
8.13 Requirement for Direct Rollovers. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit a Distributee's election
under this Article VIII, a Distributee may elect, at the time and in the manner
prescribed by the 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.
8.14.....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.
ARTICLE IX
ADMINISTRATION
9.1......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.
9.2......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.
9.3......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.
9.4......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. 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, Participants, and their Beneficiaries. Any discretionary actions to be
taken under the Plan by the Committee with respect to Employees and Participants
and with respect to benefits shall be uniform in their nature and applicable to
all persons similarly situated.
9.5......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 (in writing or otherwise) persons other than
members of the Committee to carry out such responsibilities of the Committee
under the Plan as it may see fit.
9.6......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.
9.7......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.
9.8......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 responsibility 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.
9.9......General Records. The Committee shall maintain or cause to be
maintained separate Accounts (and any separate subaccounts) which accurately
reflect the interests of the Participants as provided for in Section 6.1, 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.
9.10.....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.
9.11.....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.
9.12.....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 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. 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
9.11 and this section shall be subject to reimbursement by other Employing
Companies of their proportionate shares of such expenses as determined by the
Committee.
9.13.....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.
9.14.....Code Section 411(d)(6) Protected Benefits. Notwithstanding
anything to the contrary in this Plan, any provisions added to this Plan to
effectuate the merger of the SEPCO ESOP into this Plan shall not be interpreted
so as to decrease a Participant's accrued benefit except to the extent permitted
under Section 412(c)(8) of the Code, and such provisions shall not reduce or
eliminate Code Section 411(d)(6) protected benefits determined immediately prior
to January 1, 1993. The Committee shall disregard such provision in the Plan to
the extent that application of such would fail to satisfy this paragraph. If the
Committee disregards any portion of 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 must
continue such for the affected Participants.
9.15.....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.
9.16.....Notice and Claims Procedure. 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.
9.17.....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.
9.18.....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.
ARTICLE X
THE TRUST FUND AND TRUSTEE
10.1.....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. The Company may remove the Trustee or appoint a successor trustee at any
time upon 60 days notice in writing to the Trustee and the Committee. 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, for a Trust Fund.
The Trust Fund shall be administered by the Trustee to receive contributions, to
hold, invest, and reinvest all property and funds of the Trust Fund, and to
distribute benefits to eligible Participants and Beneficiaries.
10.2.....Duties of the Trustee. The Trustee shall have sole
responsibility for the investment and safekeeping of the assets of the Trust
Fund and shall have no responsibility for the operation or administration of the
Plan, except as expressly provided herein.
10.3.....Diversion. At no time shall any part of the corpus or income
of the Trust Fund be used for or diverted to purposes other than for the
exclusive benefit of Participants or their Beneficiaries; provided, however,
that contributions may be returned to the Employing Company in accordance with
the provisions of Section 4.5.
ARTICLE XI
AMENDMENT AND TERMINATION
11.1.....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.
Notwithstanding the foregoing, the formula in Section 6.2 of this Plan
under which shares of Common Stock are allocated to the Accounts of Plan
Participants shall not be amended more frequently than once every six months.
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).
11.2.....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 to
the Plan by all Employing Companies. Any Employing Company may, by action of its
board of directors and approval by the Board of Directors suspend or terminate
the making of contributions to the Plan 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.
Notwithstanding the above, so long as a Participant continues to be an Employee,
no distribution may be made of shares of Common Stock which have been allocated
to the Participant's Account for a period of less than 84 months commencing
after the month in which such allocation occurred, unless such distribution is
pursuant to Section 7.2 of the Plan or on account of termination of the Plan
after December 31, 1984.
11.3.....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 XII
TOP-HEAVY PROVISIONS
12.1.....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 12.3.
12.2.....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 XII, 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.
12.3.....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 12.3(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 12.3(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).
12.4.....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 12.4(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 12.3(a)) equal to not less than 1%
of such non-Key Employee's compensation.
(c) For purposes of this Section 12.4, 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 6.3(b), pursuant to Section 6.5 of the
Plan.
ARTICLE XIII
GENERAL PROVISIONS
13.1.....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.
13.2.....Non-Alienation or Assignment. 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 of a deceased Participant 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, 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.
13.3.....Payments to Minors and Others. If the Committee determines
that any person entitled to a distribution or payment from the Trust Fund under
the Plan 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.
13.4.....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 persons 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.
13.5.....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 Employing Company contributions.
Notwithstanding the foregoing sentence, such benefit shall be
reinstated if a claim is made by the Participant or Beneficiary for the
forfeited benefit.
13.6.....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.
IN WITNESS WHEREOF, the Company has caused this amendment and
restatement of the Plan to be executed this _____ day of _______________, 1998
to be effective as provided herein.
SOUTHERN COMPANY SERVICES, INC.:
By:
-------------------------------------------------
Its:
------------------------------------------------
ATTEST:
By:
Its:
THE SOUTHERN COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
APPENDIX A
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 STOCK OWNERSHIP PLAN
WHEREAS, Southern Company Services, Inc. ("Company") heretofore adopted
The Southern Company Employee Stock Ownership Plan ("Plan"), originally
effective as of January 1, 1976 and has most recently amended and restated the
Plan effective as of January 1, 1997; and
WHEREAS, the Employee Stock Ownership Plan Committee ("Committee")
desires to amend the Plan in order to make certain design and other changes; and
WHEREAS, the Committee is authorized pursuant to Section 11.1 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 the date hereof, Article III of the Plan 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 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.
II.
Except as amended herein by this First 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 Stock Ownership Plan Committee has adopted
this First Amendment to The Southern Company Employee Stock Ownership Plan this
_____ day of ________________, 1998, to be effective as stated herein.
EMPLOYEE STOCK OWNERSHIP
PLAN COMMITTEE:
------------------------
Christopher C. Womack
------------------------
Robert A. Bell
------------------------
W. Dean Hudson
SECOND AMENDMENT TO THE
SOUTHERN COMPANY EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, Southern Company Services, Inc. ("Company") heretofore adopted
The Southern Company Employee Stock Ownership Plan ("Plan"), originally
effective as of January 1, 1976 and as most recently amended and restated the
Plan effective as of January 1, 1997; and
WHEREAS, the Employee Stock Ownership Plan Committee ("Committee")
desires to amend the Plan in order to make certain design and technical changes;
and
WHEREAS, the Committee is authorized pursuant to Section 11.1 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 2.20 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, 1997, Section 8.8(b) of the Plan shall be
amended by adding the following sentence to the end of 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.
III.
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 Stock Ownership Plan Committee has adopted
this Second Amendment to The Southern Company Employee Stock Ownership Plan this
_____ day of ________________, 1999, to be effective as stated herein.
EMPLOYEE STOCK OWNERSHIP
PLAN COMMITTEE:
-------------------------
Christopher C. Womack
-------------------------
Robert A. Bell
-------------------------
W. Dean Hudson