Exhibit 10(a)64
THE SOUTHERN COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
As Amended and Restated
Effective April 1, 1995
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
(a) "Required Aggregation Group" ... 2
(b) "Permissive Aggregation Group"............................... 2
2.4 Aggregation Group................................................ 3
2.5 Annual Addition.................................................. 3
2.6 Beneficiary...................................................... 4
2.7 Board of Directors............................................... 4
2.8 Break-in-Service Date............................................ 4
2.9 Code............................................................. 4
2.10 Committee........................................................ 4
2.11 Common Stock..................................................... 4
2.12 Company.......................................................... 4
2.13 Compensation..................................................... 5
2.14 Defined Benefit Plan Fraction.................................... 5
2.15 Defined Contribution Plan Fraction............................... 6
2.16 Determination Date............................................... 6
2.17 Determination Year............................................... 6
2.18 Distributee ..................................................... 6
2.19 Direct Rollover ................................................. 6
2.20 Eligible Employee................................................ 6
2.21 Eligible Retirement Plan ........................................ 7
2.22 Eligible Rollover Distribution................................... 7
2.23 Employee......................................................... 7
2.24 Employing Company................................................ 7
2.25 Enrollment Date.................................................. 7
2.26 ERISA............................................................ 8
2.27 Family Member.................................................... 8
2.28 Highly Compensated Employee...................................... 8
2.29 Hour of Service.................................................. 9
2.30 Key Employee..................................................... 9
2.31 Limitation Year.................................................. 9
2.32 Look-Back Year................................................... 9
2.33 Market Value..................................................... 9
2.34 Non-Highly Compensated Employee.................................. 9
2.35 Normal Retirement Date........................................... 9
2.36 One-Year Break in Service........................................ 9
2.37 Participant...................................................... 9
2.38 Plan............................................................. 10
2.39 Plan Year........................................................ 10
2.40 Present Value of Accrued Retirement Income....................... 10
2.41 Qualified Election Period........................................ 10
i
2.42 Qualified Participant............................................ 10
2.43 SEPCO............................................................ 10
2.44 SEPCO ESOP....................................................... 10
2.45 Super-Top-Heavy Group............................................ 10
2.46 Surviving Spouse ................................................ 10
2.47 Top-Heavy Group.................................................. 10
2.48 Trust or Trust Fund.............................................. 11
2.49 Trust Agreement.................................................. 11
2.50 Trustee.......................................................... 11
2.51 Valuation Date................................................... 11
2.52 Year of Service.................................................. 11
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................ 13
3.5 Special Rule for Scott Paper Company Energy
Complex Employees................................................ 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............................................. 21
6.9 Correction of Prior Incorrect Allocations and
Distributions.................................................... 21
ii
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 ADMINISTRATION................................................. 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.................................... 31
9.7 Employment of Agents............................................. 31
9.8 Co-Fiduciaries................................................... 31
9.9 General Records.................................................. 31
9.10 Liability of the Committee....................................... 32
9.11 Reimbursement of Expenses and Compensation of
Committee........................................................ 32
9.12 Expenses of Plan and Trust Fund.................................. 32
9.13 Responsibility for Funding Policy................................ 33
9.14 Code Section 411(d)(6) Protected Benefits........................ 33
9.15 Management of Assets............................................. 33
9.16 Notice and Claims Procedure...................................... 33
9.17 Bonding.......................................................... 33
9.18 Multiple Fiduciary Capacities.................................... 33
iii
ARTICLE X THE TRUST FUND AND TRUSTEE...................................... 35
10.1 Trustee.......................................................... 35
10.2 Duties of the Trustee............................................ 35
10.3 Diversion........................................................ 35
ARTICLE XI AMENDMENT AND TERMINATION...................................... 36
11.1 Amendment of the Plan............................................ 36
11.2 Termination of the Plan.......................................... 36
11.3 Merger or Consolidation of the Plan.............................. 37
ARTICLE XII TOP-HEAVY PROVISIONS.......................................... 38
12.1 Top-Heavy Plan Requirements......................................38
12.2 Determination of Top-Heavy Status................................38
12.3 Minimum Allocation for Top-Heavy Plan Years......................39
12.4 Adjustments to Maximum Benefit Limits for Top-
Heavy Plans......................................................40
ARTICLE XIII GENERAL PROVISIONS.......................................... 41
13.1 Plan Not an Employment Contract................................. 41
13.2 Non-Alienation or Assignment.................................... 41
13.3 Payments to Minors and Others................................... 42
13.4 Source of Benefits.............................................. 42
13.5 Unclaimed Benefits.............................................. 42
13.6 Governing Law................................................... 42
iv
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 April 1, 1995 for the purpose of making certain clarifying
changes to ensure that the Plan document reflects the actual operation of the
Plan and to make such other changes as deemed appropriate by the Committee. It
is intended that this Plan, as amended and restated effective as of April 1,
1995, 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. This amendment and restatement shall not be applicable to former
Participants or Beneficiaries of former Participants whose employment with the
Employing Companies terminated prior to April 1, 1995.
1
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
2
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 as hereinafter determined.
(a) Required Aggregation Group: 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. Such group shall be known as a Required
Aggregation Group.
(b) Permissive Aggregation Group: The Affiliated Employers may
also include any other plan not required to be included in the Required
Aggregation Group, provided the resulting group, taken as a whole,
would continue to satisfy the provisions of Code Section 401(a)(4) or
410. Such group shall be known as 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.
3
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.
4
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 The Southern Company Performance Pay Plan,
The Southern Company Productivity Improvement Plan, The Southern Company
Executive Productivity Improvement Plan, and the Incentive Compensation Plan for
Southern Electric International, Inc. 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.
For Plan Years beginning on and after January 1, 1994, the Compensation
of each Participant taken into account for purposes of this Plan shall not
exceed $150,000 (as adjusted pursuant to Code Section 401(a)(17)). In
determining the Compensation of a Participant for purposes of this limitation,
the rules of Section 414(q)(6) of the Code shall apply, except in applying such
rules, the term "family" shall include only the spouse of the Participant and
any lineal descendants of the Participant who have not attained age 19 before
the close of the Plan Year. If, as a result of the application of the rules of
Code Section 414(q)(6), the adjusted dollar limitation is exceeded, then the
limitation shall be prorated among the affected individuals in proportion to
each such individual's Compensation, as determined under this Section 2.13 prior
to the application of this limitation.
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
5
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:
(a) an Employee who is treated as such solely by reason
of the "leased employee" rules of Code Section 414(n);
(b) any Employee who is represented by a collective
bargaining agent unless the representatives of his bargaining
6
unit and the Employing Company mutually agree to participation
in the Plan subject to its terms by members of his bargaining
unit; and
(c) an individual who is a cooperative education employee and
who first performs an Hour of Service on or after January 1, 1995.
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 first day of each
calendar month.
7
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 "Family Member" shall mean the spouse, lineal ascendants and
descendants of an Employee or former Employee and the spouse of such ascendants
and descendants of an Employee or former Employee as described in Section
414(q)(6)(B) of the Code.
2.28 "Highly Compensated Employee" shall mean any Employee or former
Employee (excluding any Employees who may be excluded pursuant to Code Section
414(q)(8)) who during the Determination Year or the Look-Back Year:
(a) was at any time a five-percent (5%) owner (as
defined in Code Section 416(i)(1)(B)(i));
(b) received compensation (within the meaning of Code Section
414(q)(7)) from an Affiliated Employer in excess of $75,000 (or such
amount as may be adjusted by the Secretary of the Treasury);
(c) received compensation (within the meaning of Code Section
414(q)(7)) from an Affiliated Employer in excess of $50,000 (or such
amount as may be adjusted by the Secretary of the Treasury) and was in
the top-paid group (as defined in Code Section 414(q)(4)) of Employees
for such year; or
(d) was at any time an officer and received compensation
(within the meaning of Code Section 414(q)(7)) greater than fifty
percent (50%) of the amount in effect under Code Section 415(b)(1)(A)
for such year.
Notwithstanding the foregoing, the determination of which Employees are
Highly Compensated Employees shall at all times be subject to the rules of Code
Section 414(q); the maximum number of officers taken into account under (d)
above shall not exceed fifty (50); and Employees who were not described in (b),
(c) or (d) above during the Look-Back Year shall not be considered as described
in such subsections for the Determination Year unless such Employees are members
of the group consisting of the one hundred (100) Employees paid the greatest
compensation (within the meaning of Code Section 414(q)(7)) for the
Determination Year.
A Highly Compensated Employee shall include any Employee who separated
from service (or was deemed to have separated) prior to the Plan Year, performs
no service for an Affiliated Employer during the Plan Year, and was a Highly
Compensated Employee for
8
either the separation year or any Determination Year ending on or after the
Employee's fifty-fifth (55th) birthday.
If an Employee is, during a Determination Year or a Look-Back Year, a
Family Member of either (x) a five-percent (5%) owner who is an Employee or (y)
a former Employee or a Highly Compensated Employee who is one of the top-ten
most Highly Compensated Employees ranked on the basis of compensation paid by an
Affiliated Employer during such year, then the Family Member and the five-
percent (5%) owner or top-ten Highly Compensated Employee shall be treated as a
single employee receiving compensation and Plan contributions equal to the sum
of the compensation and contributions for such individuals.
2.29 "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.
2.30 "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).
2.31 "Limitation Year" shall mean the Plan Year.
2.32 "Look-Back Year" shall mean the Plan Year preceding the
Determination Year.
2.33 "Market Value" prior to September 1, 1995 shall mean the closing
price of a share of the Common Stock based on consolidated trading as defined by
the Consolidated Tape Association and reported as part of the consolidated
trading prices of New York Stock Exchange listed securities for the 20
consecutive trading days immediately preceding the date on which the Common
Stock is contributed to the Plan or purchased from The Southern Company, and on
and after September 1, 1995 shall mean the average purchase price of a share of
the Common Stock under The Southern Company Employee Savings Plan as of the
applicable Valuation Date.
2.34 "Non-Highly Compensated Employee" shall mean an Employee who is
neither a Highly Compensated Employee nor the Family Member of a Highly
Compensated Employee.
2.35 "Normal Retirement Date" shall mean the first day of the month
following a Participant's sixty-fifth (65th) birthday.
2.36 "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.
2.37 "Participant" shall mean (a) an Eligible Employee who
satisfied the eligibility requirements set forth in Section 3.1 of
9
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.
2.38 "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.
2.39 "Plan Year" shall mean the twelve-month period commencing January
1st and ending on the last day of December next following.
2.40 "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.
2.41 "Qualified Election Period" shall mean the six-Plan-Year period
beginning with the Plan Year in which the Participant first becomes a Qualified
Participant.
2.42 "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.
2.43 "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,
10
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 Electric International,
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.
11
ARTICLE III
PARTICIPATION
3.1 Eligibility Requirements. Each Eligible Employee shall become a
Participant on the later of April 1, 1995 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
12
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.
13
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.
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,
14
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.
15
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.
16
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
17
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 all amounts paid or made
available to an Employee which are treated as compensation from an
Affiliated Employer under Treasury Regulation Section 1.415-2(d)(2) and
which are not excluded from compensation under Treasury Regulation
Section 1.415- 2(d)(3).
(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
18
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 shall not be
made under this Plan until the corrective adjustments have been made under such
other defined benefit plan and defined contribution plan unless distribution of
benefit payments to the affected Participant has commenced under such defined
benefit plan. In such event, the corrective adjustment shall first be made under
this Plan, if possible. 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 such other defined contribution plan 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.
19
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.
20
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 at the end of the month immediately
preceding 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.
21
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. If the
Participant does not consent to a distribution with a present value in
excess of $3,500 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
22
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.
23
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 in accordance with the requirements of Code Section
411(a)(11). The Committee shall not cash-out any Participant whose
benefits exceed $3,500 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.
24
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 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
25
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 in accordance with Code Section 411(a)(11). The Committee shall
not cash-out any Participant whose benefits exceed $3,500 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.
26
(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) Notwithstanding anything in the Plan to the contrary, the
payment of benefits to a Participant 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 actual
retirement.
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.
27
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.
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 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
28
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.
29
ARTICLE IX
ADMINISTRATION
9.1 Membership of Committee. The Plan shall be administered by the
Committee, which shall consist of the representative of The Southern Company and
the representative of each Employing Company on The Southern Company Human
Resources Committee, except Southern Electric International, Inc. The Committee
shall be chaired by the representative 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
30
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
31
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, certain administrative expenses may be
paid from the Trust Fund unless otherwise paid by the Company or the Employing
Companies to the extent provided in the Trust Agreement. 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 in an
amount equal to their proportionate shares of such expenses as determined by the
Committee.
32
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
33
officer, employee, agent, or other representative of a party in interest, as
that term is defined in ERISA.
34
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.
35
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
36
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).
37
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
38
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).
39
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.
40
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.
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.
41
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.
42
IN WITNESS WHEREOF, the Company has caused this amendment and
restatement of the Plan to be executed this _____ day of _______________, 1995
to be effective as provided herein.
SOUTHERN COMPANY SERVICES, INC.
By:
Its:
(CORPORATE SEAL)
ATTEST:
By:
Its:
43
THE SOUTHERN COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
APPENDIX A
The Employing Companies as of April 1, 1995 are:
Alabama Power Company Georgia Power Company Gulf
Power Company Mississippi Power Company Savannah
Electric and Power Company Southern Company Services,
Inc.
Southern Communications Services, Inc.,
Southern Development and Investment Group, Inc.
Southern Electric International, Inc.
Southern Nuclear Operating Company, Inc.
44
FIRST AMENDMENT TO THE SOUTHERN COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, the Board of Directors of Southern Company Services, Inc. (the
"Company") heretofore adopted the amendment and restatement of The Southern
Company Employee Stock Ownership Plan (the "Plan"), effective as of April 1,
1995; and
WHEREAS, the Board of Directors of the Company desires to amend the
Plan in order to change the composition of the membership of the Committee
appointed to serve as plan administrator; and
WHEREAS, the Board of Directors of the Company is authorized pursuant
to Section 11.1 of the Plan to amend the Plan at any time.
NOW, THEREFORE, effective as of August 1, 1995, the Board of Directors
of the Company hereby amends the Plan as follows:
I.
Amend Section 9.1 of the Plan by deleting said Section in its entirety
and substituting the following in lieu thereof:
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 any 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.
II.
Except as amended herein by this First Amendment, the Plan shall remain
in full force and effect as amended and restated by the Company prior to the
adoption of this First Amendment.
IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly
authorized officers, has adopted this First Amendment to The Southern Company
Employee Stock Ownership Plan this ________ day of _____________________, 1996.
SOUTHERN COMPANY SERVICES,
INC.
By:
Title:
(CORPORATE SEAL)
ATTEST:
By:
Title:
THE SOUTHERN COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
As Amended and Restated
Effective April 1, 1995
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
(a) "Required Aggregation Group" ... 2
(b) "Permissive Aggregation Group"............................... 2
2.4 Aggregation Group................................................ 3
2.5 Annual Addition.................................................. 3
2.6 Beneficiary...................................................... 4
2.7 Board of Directors............................................... 4
2.8 Break-in-Service Date............................................ 4
2.9 Code............................................................. 4
2.10 Committee........................................................ 4
2.11 Common Stock..................................................... 4
2.12 Company.......................................................... 4
2.13 Compensation..................................................... 5
2.14 Defined Benefit Plan Fraction.................................... 5
2.15 Defined Contribution Plan Fraction............................... 6
2.16 Determination Date............................................... 6
2.17 Determination Year............................................... 6
2.18 Distributee ..................................................... 6
2.19 Direct Rollover ................................................. 6
2.20 Eligible Employee................................................ 6
2.21 Eligible Retirement Plan ........................................ 7
2.22 Eligible Rollover Distribution................................... 7
2.23 Employee......................................................... 7
2.24 Employing Company................................................ 7
2.25 Enrollment Date.................................................. 7
2.26 ERISA............................................................ 8
2.27 Family Member.................................................... 8
2.28 Highly Compensated Employee...................................... 8
2.29 Hour of Service.................................................. 9
2.30 Key Employee..................................................... 9
2.31 Limitation Year.................................................. 9
2.32 Look-Back Year................................................... 9
2.33 Market Value..................................................... 9
2.34 Non-Highly Compensated Employee.................................. 9
2.35 Normal Retirement Date........................................... 9
2.36 One-Year Break in Service........................................ 9
2.37 Participant...................................................... 9
2.38 Plan............................................................. 10
2.39 Plan Year........................................................ 10
2.40 Present Value of Accrued Retirement Income....................... 10
2.41 Qualified Election Period........................................ 10
i
2.42 Qualified Participant............................................ 10
2.43 SEPCO............................................................ 10
2.44 SEPCO ESOP....................................................... 10
2.45 Super-Top-Heavy Group............................................ 10
2.46 Surviving Spouse ................................................ 10
2.47 Top-Heavy Group.................................................. 10
2.48 Trust or Trust Fund.............................................. 11
2.49 Trust Agreement.................................................. 11
2.50 Trustee.......................................................... 11
2.51 Valuation Date................................................... 11
2.52 Year of Service.................................................. 11
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................ 13
3.5 Special Rule for Scott Paper Company Energy
Complex Employees................................................ 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............................................. 21
6.9 Correction of Prior Incorrect Allocations and
Distributions.................................................... 21
ii
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 ADMINISTRATION................................................. 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.................................... 31
9.7 Employment of Agents............................................. 31
9.8 Co-Fiduciaries................................................... 31
9.9 General Records.................................................. 31
9.10 Liability of the Committee....................................... 32
9.11 Reimbursement of Expenses and Compensation of
Committee........................................................ 32
9.12 Expenses of Plan and Trust Fund.................................. 32
9.13 Responsibility for Funding Policy................................ 33
9.14 Code Section 411(d)(6) Protected Benefits........................ 33
9.15 Management of Assets............................................. 33
9.16 Notice and Claims Procedure...................................... 33
9.17 Bonding.......................................................... 33
9.18 Multiple Fiduciary Capacities.................................... 33
iii
ARTICLE X THE TRUST FUND AND TRUSTEE...................................... 35
10.1 Trustee.......................................................... 35
10.2 Duties of the Trustee............................................ 35
10.3 Diversion........................................................ 35
ARTICLE XI AMENDMENT AND TERMINATION...................................... 36
11.1 Amendment of the Plan............................................ 36
11.2 Termination of the Plan.......................................... 36
11.3 Merger or Consolidation of the Plan.............................. 37
ARTICLE XII TOP-HEAVY PROVISIONS.......................................... 38
12.1 Top-Heavy Plan Requirements......................................38
12.2 Determination of Top-Heavy Status................................38
12.3 Minimum Allocation for Top-Heavy Plan Years......................39
12.4 Adjustments to Maximum Benefit Limits for Top-
Heavy Plans......................................................40
ARTICLE XIII GENERAL PROVISIONS.......................................... 41
13.1 Plan Not an Employment Contract................................. 41
13.2 Non-Alienation or Assignment.................................... 41
13.3 Payments to Minors and Others................................... 42
13.4 Source of Benefits.............................................. 42
13.5 Unclaimed Benefits.............................................. 42
13.6 Governing Law................................................... 42
iv
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 April 1, 1995 for the purpose of making certain clarifying
changes to ensure that the Plan document reflects the actual operation of the
Plan and to make such other changes as deemed appropriate by the Committee. It
is intended that this Plan, as amended and restated effective as of April 1,
1995, 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. This amendment and restatement shall not be applicable to former
Participants or Beneficiaries of former Participants whose employment with the
Employing Companies terminated prior to April 1, 1995.
1
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
2
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 as hereinafter determined.
(a) Required Aggregation Group: 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. Such group shall be known as a Required
Aggregation Group.
(b) Permissive Aggregation Group: The Affiliated Employers may
also include any other plan not required to be included in the Required
Aggregation Group, provided the resulting group, taken as a whole,
would continue to satisfy the provisions of Code Section 401(a)(4) or
410. Such group shall be known as 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.
3
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.
4
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 The Southern Company Performance Pay Plan,
The Southern Company Productivity Improvement Plan, The Southern Company
Executive Productivity Improvement Plan, and the Incentive Compensation Plan for
Southern Electric International, Inc. 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.
For Plan Years beginning on and after January 1, 1994, the Compensation
of each Participant taken into account for purposes of this Plan shall not
exceed $150,000 (as adjusted pursuant to Code Section 401(a)(17)). In
determining the Compensation of a Participant for purposes of this limitation,
the rules of Section 414(q)(6) of the Code shall apply, except in applying such
rules, the term "family" shall include only the spouse of the Participant and
any lineal descendants of the Participant who have not attained age 19 before
the close of the Plan Year. If, as a result of the application of the rules of
Code Section 414(q)(6), the adjusted dollar limitation is exceeded, then the
limitation shall be prorated among the affected individuals in proportion to
each such individual's Compensation, as determined under this Section 2.13 prior
to the application of this limitation.
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
5
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:
(a) an Employee who is treated as such solely by reason
of the "leased employee" rules of Code Section 414(n);
(b) any Employee who is represented by a collective
bargaining agent unless the representatives of his bargaining
6
unit and the Employing Company mutually agree to participation
in the Plan subject to its terms by members of his bargaining
unit; and
(c) an individual who is a cooperative education employee and
who first performs an Hour of Service on or after January 1, 1995.
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 first day of each
calendar month.
7
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 "Family Member" shall mean the spouse, lineal ascendants and
descendants of an Employee or former Employee and the spouse of such ascendants
and descendants of an Employee or former Employee as described in Section
414(q)(6)(B) of the Code.
2.28 "Highly Compensated Employee" shall mean any Employee or former
Employee (excluding any Employees who may be excluded pursuant to Code Section
414(q)(8)) who during the Determination Year or the Look-Back Year:
(a) was at any time a five-percent (5%) owner (as
defined in Code Section 416(i)(1)(B)(i));
(b) received compensation (within the meaning of Code Section
414(q)(7)) from an Affiliated Employer in excess of $75,000 (or such
amount as may be adjusted by the Secretary of the Treasury);
(c) received compensation (within the meaning of Code Section
414(q)(7)) from an Affiliated Employer in excess of $50,000 (or such
amount as may be adjusted by the Secretary of the Treasury) and was in
the top-paid group (as defined in Code Section 414(q)(4)) of Employees
for such year; or
(d) was at any time an officer and received compensation
(within the meaning of Code Section 414(q)(7)) greater than fifty
percent (50%) of the amount in effect under Code Section 415(b)(1)(A)
for such year.
Notwithstanding the foregoing, the determination of which Employees are
Highly Compensated Employees shall at all times be subject to the rules of Code
Section 414(q); the maximum number of officers taken into account under (d)
above shall not exceed fifty (50); and Employees who were not described in (b),
(c) or (d) above during the Look-Back Year shall not be considered as described
in such subsections for the Determination Year unless such Employees are members
of the group consisting of the one hundred (100) Employees paid the greatest
compensation (within the meaning of Code Section 414(q)(7)) for the
Determination Year.
A Highly Compensated Employee shall include any Employee who separated
from service (or was deemed to have separated) prior to the Plan Year, performs
no service for an Affiliated Employer during the Plan Year, and was a Highly
Compensated Employee for
8
either the separation year or any Determination Year ending on or after the
Employee's fifty-fifth (55th) birthday.
If an Employee is, during a Determination Year or a Look-Back Year, a
Family Member of either (x) a five-percent (5%) owner who is an Employee or (y)
a former Employee or a Highly Compensated Employee who is one of the top-ten
most Highly Compensated Employees ranked on the basis of compensation paid by an
Affiliated Employer during such year, then the Family Member and the five-
percent (5%) owner or top-ten Highly Compensated Employee shall be treated as a
single employee receiving compensation and Plan contributions equal to the sum
of the compensation and contributions for such individuals.
2.29 "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.
2.30 "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).
2.31 "Limitation Year" shall mean the Plan Year.
2.32 "Look-Back Year" shall mean the Plan Year preceding the
Determination Year.
2.33 "Market Value" prior to September 1, 1995 shall mean the closing
price of a share of the Common Stock based on consolidated trading as defined by
the Consolidated Tape Association and reported as part of the consolidated
trading prices of New York Stock Exchange listed securities for the 20
consecutive trading days immediately preceding the date on which the Common
Stock is contributed to the Plan or purchased from The Southern Company, and on
and after September 1, 1995 shall mean the average purchase price of a share of
the Common Stock under The Southern Company Employee Savings Plan as of the
applicable Valuation Date.
2.34 "Non-Highly Compensated Employee" shall mean an Employee who is
neither a Highly Compensated Employee nor the Family Member of a Highly
Compensated Employee.
2.35 "Normal Retirement Date" shall mean the first day of the month
following a Participant's sixty-fifth (65th) birthday.
2.36 "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.
2.37 "Participant" shall mean (a) an Eligible Employee who
satisfied the eligibility requirements set forth in Section 3.1 of
9
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.
2.38 "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.
2.39 "Plan Year" shall mean the twelve-month period commencing January
1st and ending on the last day of December next following.
2.40 "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.
2.41 "Qualified Election Period" shall mean the six-Plan-Year period
beginning with the Plan Year in which the Participant first becomes a Qualified
Participant.
2.42 "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.
2.43 "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,
10
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 Electric International,
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.
11
ARTICLE III
PARTICIPATION
3.1 Eligibility Requirements. Each Eligible Employee shall become a
Participant on the later of April 1, 1995 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
12
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.
13
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.
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,
14
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.
15
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.
16
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
17
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 all amounts paid or made
available to an Employee which are treated as compensation from an
Affiliated Employer under Treasury Regulation Section 1.415-2(d)(2) and
which are not excluded from compensation under Treasury Regulation
Section 1.415- 2(d)(3).
(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
18
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 shall not be
made under this Plan until the corrective adjustments have been made under such
other defined benefit plan and defined contribution plan unless distribution of
benefit payments to the affected Participant has commenced under such defined
benefit plan. In such event, the corrective adjustment shall first be made under
this Plan, if possible. 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 such other defined contribution plan 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.
19
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.
20
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 at the end of the month immediately
preceding 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.
21
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. If the
Participant does not consent to a distribution with a present value in
excess of $3,500 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
22
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.
23
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 in accordance with the requirements of Code Section
411(a)(11). The Committee shall not cash-out any Participant whose
benefits exceed $3,500 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.
24
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 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
25
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 in accordance with Code Section 411(a)(11). The Committee shall
not cash-out any Participant whose benefits exceed $3,500 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.
26
(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) Notwithstanding anything in the Plan to the contrary, the
payment of benefits to a Participant 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 actual
retirement.
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.
27
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.
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 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
28
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.
29
ARTICLE IX
ADMINISTRATION
9.1 Membership of Committee. The Plan shall be administered by the
Committee, which shall consist of the representative of The Southern Company and
the representative of each Employing Company on The Southern Company Human
Resources Committee, except Southern Electric International, Inc. The Committee
shall be chaired by the representative 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
30
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
31
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, certain administrative expenses may be
paid from the Trust Fund unless otherwise paid by the Company or the Employing
Companies to the extent provided in the Trust Agreement. 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 in an
amount equal to their proportionate shares of such expenses as determined by the
Committee.
32
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
33
officer, employee, agent, or other representative of a party in interest, as
that term is defined in ERISA.
34
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.
35
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
36
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).
37
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
38
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).
39
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.
40
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.
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.
41
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.
42
IN WITNESS WHEREOF, the Company has caused this amendment and
restatement of the Plan to be executed this _____ day of _______________, 1995
to be effective as provided herein.
SOUTHERN COMPANY SERVICES, INC.
By:
Its:
(CORPORATE SEAL)
ATTEST:
By:
Its:
43
THE SOUTHERN COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
APPENDIX A
The Employing Companies as of April 1, 1995 are:
Alabama Power Company Georgia Power Company Gulf
Power Company Mississippi Power Company Savannah
Electric and Power Company Southern Company Services,
Inc.
Southern Communications Services, Inc.,
Southern Development and Investment Group, Inc.
Southern Electric International, Inc.
Southern Nuclear Operating Company, Inc.
44
FIRST AMENDMENT TO THE SOUTHERN COMPANY
EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, the Board of Directors of Southern Company Services, Inc. (the
"Company") heretofore adopted the amendment and restatement of The Southern
Company Employee Stock Ownership Plan (the "Plan"), effective as of April 1,
1995; and
WHEREAS, the Board of Directors of the Company desires to amend the
Plan in order to change the composition of the membership of the Committee
appointed to serve as plan administrator; and
WHEREAS, the Board of Directors of the Company is authorized pursuant
to Section 11.1 of the Plan to amend the Plan at any time.
NOW, THEREFORE, effective as of August 1, 1995, the Board of Directors
of the Company hereby amends the Plan as follows:
I.
Amend Section 9.1 of the Plan by deleting said Section in its entirety
and substituting the following in lieu thereof:
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 any 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.
II.
Except as amended herein by this First Amendment, the Plan shall remain
in full force and effect as amended and restated by the Company prior to the
adoption of this First Amendment.
IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly
authorized officers, has adopted this First Amendment to The Southern Company
Employee Stock Ownership Plan this ________ day of _____________________, 1996.
SOUTHERN COMPANY SERVICES,
INC.
By:
Title:
(CORPORATE SEAL)
ATTEST:
By:
Title: