SOUTHERN ENERGY RESOURCES
BARGAINING UNIT EMPLOYEE SAVINGS PLAN
TABLE OF CONTENTS
ARTICLE I - PURPOSE..........................................................1
ARTICLE II - DEFINITIONS.....................................................1
2.1 "Account"..................................................1
2.2 "Actual Deferral Percentage"...............................1
2.3 "Actual Deferral Percentage Test"..........................1
2.4 "Affiliated Employer"......................................1
2.5 "Annual Addition"..........................................1
2.6 "Average Actual Deferral Percentage".......................2
2.7 "Beneficiary"..............................................2
2.8 "Board of Directors".......................................2
2.9 "Break-in-Service Date"....................................2
2.10 "Code".....................................................2
2.11 "Committee"................................................2
2.12 "Common Stock".............................................2
2.13 "Company"..................................................2
2.14 "Compensation".............................................3
2.15 "Direct Rollover"..........................................3
2.16 "Distributee"..............................................3
2.17 "Elective Employer Contribution"...........................3
2.18 "Eligible Employee"........................................3
2.19 "Eligible Participant".....................................3
2.20 "Eligible Retirement Plan".................................4
2.21 "Eligible Rollover Distribution"...........................4
2.22 "Employee".................................................4
2.23 "Employer Matching Contribution"...........................4
2.24 "Employing Company"........................................4
2.25 "Enrollment Date"..........................................4
2.26 "ERISA"....................................................4
2.27 "Excess Deferral Amount"...................................4
2.28 "Excess Deferral Contributions"............................5
2.29 "Forfeiture"...............................................5
2.30 "Highly Compensated Employee"..............................5
2.31 "Hour of Service"..........................................5
2.32 "Investment Fund"..........................................5
2.33 "Limitation Year"..........................................5
2.34 "Non-Highly Compensated Employee"..........................6
2.35 "Normal Retirement Date"...................................6
2.36 "One-Year Break in Service"................................6
2.37 "Participant"..............................................6
2.38 "Plan".....................................................6
2.39 "Plan Year"................................................6
2.40 "Rollover Contribution"....................................6
2.41 "Surviving Spouse".........................................6
2.42 "Suspense Account".........................................6
2.43 "Trust" or "Trust Fund"....................................6
2.44 "Trust Agreement"..........................................7
2.45 "Trustee"..................................................7
2.46 "Valuation Date"...........................................7
2.47 "Voluntary Participant Contribution".......................7
2.48 "Year of Service"..........................................7
ARTICLE III - PARTICIPATION..................................................8
3.1 Eligibility Requirements...................................8
3.2 Participation upon Reemployment............................8
3.3 Change in Eligibility......................................8
3.4 Loss of Eligible Employee Status...........................8
3.5 Rollovers from Other Plans.................................8
3.6 Military Leave.............................................9
ARTICLE IV - ELECTIVE EMPLOYER CONTRIBUTIONS AND VOLUNTARY
PARTICIPANT CONTRIBUTIONS................................10
4.1 Elective Employer Contributions...........................10
4.2 Maximum Amount of Elective Employer Contributions.........10
4.3 Distribution of Excess Deferral Amounts...................10
4.4 Additional Rules Regarding Elective Employer
Contributions.............................................11
4.5 Section 401(k) Nondiscrimination Tests....................12
4.6 Voluntary Participant Contributions.......................15
4.7 Manner and Time of Payment of Elective Employer
Contributions and Voluntary Participant Contributions.....15
4.8 Change in Contribution Rate...............................15
4.9 Change in Contribution Amount.............................15
ARTICLE V - EMPLOYER CONTRIBUTIONS..........................................16
5.1 Amount of Employer Matching Contributions.................16
5.2 Payment of Employer Matching Contributions................16
5.3 Reversion of Employing Company Contributions..............16
5.4 Correction of Prior Incorrect Allocations and
Distributions.............................................17
ARTICLE VI - LIMITATIONS ON CONTRIBUTIONS...................................18
6.1 Section 415 Limitations...................................18
6.2 Correction of Contributions in Excess of Section 415
Limits....................................................18
ARTICLE VII - SUSPENSION OF CONTRIBUTIONS...................................20
7.1 Suspension of Contributions...............................20
7.2 Resumption of Contributions...............................20
ARTICLE VIII - INVESTMENT OF CONTRIBUTIONS..................................21
8.1 Investment Funds..........................................21
8.2 Investment of Participant Contributions...................21
8.3 Investment of Employer Matching Contributions.............21
8.4 Investment of Earnings....................................21
8.5 Transfer of Assets between Funds..........................21
8.6 Change in Investment Direction............................22
8.7 Section 404(c) Plan.......................................22
8.8 Common Stock Investment Funds.............................22
ARTICLE IX - MAINTENANCE AND VALUATION OF PARTICIPANTS'
ACCOUNTS..................................................23
9.1 Establishment of Accounts.................................23
9.2 Valuation of Investment Funds.............................23
9.3 Rights in Investment Funds................................23
ARTICLE X - VESTING.........................................................24
10.1 Full Vesting..............................................24
10.2 Employer Matching Contributions...........................24
10.3 Forfeitures...............................................24
10.4 Buy-Back Procedure........................................24
10.5 Deemed Cash-out and Deemed Buy-back.......................25
10.6 Vesting after One-Year Break in Service...................25
10.7 Vesting at Normal Retirement Age..........................25
10.8 Vesting Upon Death........................................26
ARTICLE XI - WITHDRAWALS AND LOANS..........................................26
11.1 Withdrawals by Participants...............................26
11.2 Notice of Withdrawal......................................27
11.3 Form of Withdrawal........................................27
11.4 Minimum Withdrawal........................................27
11.5 Source of Withdrawal......................................27
11.6 Requirement of Hardship...................................27
11.7 Loans to Participants.....................................29
ARTICLE XII - DISTRIBUTION TO PARTICIPANTS..................................31
12.1 Distribution upon Retirement..............................31
12.2 Distribution upon Disability..............................32
12.3 Distribution upon Death...................................32
12.4 Designation of Beneficiary in the Event of Death..........32
12.5 Distribution upon Termination of Employment...............33
12.6 Commencement of Benefits..................................33
12.7 Transfer between Employing Companies......................34
12.8 Distributions to Alternate Payees.........................34
12.9 Requirement for Direct Rollovers..........................35
12.10 Consent and Notice Requirements...........................35
12.11 Form of Payment...........................................35
12.12 Partial Distribution upon Termination of Employment.......35
ARTICLE XIII - ADMINISTRATION OF THE PLAN...................................36
13.1 Membership of Committee...................................36
13.2 Acceptance and Resignation................................36
13.3 Transaction of Business...................................36
13.4 Responsibilities in General...............................36
13.5 Committee as Named Fiduciary..............................36
13.6 Rules for Plan Administration.............................36
13.7 Employment of Agents......................................37
13.8 Co-Fiduciaries............................................37
13.9 General Records...........................................37
13.10 Liability of the Committee................................37
13.11 Reimbursement of Expenses and Compensation of Committee...37
13.12 Expenses of Plan and Trust Fund...........................38
13.13 Responsibility for Funding Policy.........................38
13.14 Management of Assets......................................38
13.15 Notice and Claims Procedures..............................38
13.16 Bonding...................................................39
13.17 Multiple Fiduciary Capacities.............................39
13.18 Change in Administrative Procedures.......................39
ARTICLE XIV - TRUSTEE OF THE PLAN...........................................40
14.1 Trustee...................................................40
14.2 Purchase of Common Stock..................................40
14.3 Voting of Common Stock....................................40
14.3 Voting of Common Stock....................................41
14.5 Uninvested Amounts........................................41
14.6 Independent Accounting....................................41
ARTICLE XV - AMENDMENT AND TERMINATION OF THE PLAN..........................42
15.1 Amendment of the Plan.....................................42
15.2 Termination of the Plan...................................42
15.3 Merger or Consolidation of the Plan.......................43
ARTICLE XVI - GENERAL PROVISIONS............................................44
16.1 Plan Not an Employment Contract...........................44
16.2 No Right of Assignment or Alienation......................44
16.3 Payment to Minors and Others..............................44
16.4 Source of Benefits........................................45
16.5 Unclaimed Benefits........................................45
16.6 Governing Law.............................................45
APPENDIX A - EMPLOYING COMPANIES...........................................47
APPENDIX B - ELIGIBLE EMPLOYEES............................................48
SOUTHERN ENERGY RESOURCES
BARGAINING UNIT EMPLOYEE SAVINGS PLAN
Effective December 19, 2000
ARTICLE I
PURPOSE
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The purpose of the Plan is to encourage employee thrift, to create
added employee interest in the affairs of Southern Energy, Inc., to provide a
means for becoming a shareholder in Southern Energy, Inc., to supplement
retirement and death benefits, and to create a competitive compensation program
for employees through the establishment of a formal plan under which
contributions by and on behalf of Participants are supplemented by contributions
of Employing Companies. The Company is the plan sponsor of the Plan. This Plan
is intended to be a stock bonus plan, and all contributions made by an Employing
Company to this Plan are expressly conditioned upon the deductibility of such
contributions under Code Section 404. To the extent that different terms and
conditions are necessary to reflect the benefits to be provided to each Eligible
Employee, such terms and conditions shall be set forth in one or more schedules
attached hereto and incorporated into the Plan and shall supersede any
inconsistent provisions otherwise set forth herein. Any such schedule shall
reflect the collective bargaining unit to which it applies, the effective date
and the Plan Section or Sections to which it applies. Any amendment to such
schedule shall be considered an amendment to the Plan and shall be subject to
Section 15.1 hereof.
ARTICLE II
DEFINITIONS
-----------
All references to articles, sections, subsections, and paragraphs shall
be to articles, sections, subsections, and paragraphs of this Plan unless
another reference is expressly set forth in this Plan. Any words used in the
masculine shall be read and be construed in the feminine where they would so
apply. Words in the singular shall be read and construed in the plural, and all
words in the plural shall be read and construed in the singular in all cases
where they would so apply.
For purposes of this Plan, unless otherwise required by the context,
the following terms shall have the meanings set forth opposite such terms:
2.1 "Account" shall mean the total amount credited to the account
of a Participant, as described in Section 9.1.
2.2 "Actual Deferral Percentage" shall mean the ratio (expressed as a
percentage) of Elective Employer Contributions on behalf of an Eligible
Participant for the Plan Year to the Eligible Participant's compensation for the
Plan Year. For the purpose of determining an Eligible Participant's Actual
Deferral Percentage for a Plan Year, the Committee may elect to consider an
Eligible Participant's compensation for (a) the entire Plan Year or (b) that
portion of the Plan Year in which the Eligible Participant was eligible to have
Elective Employer Contributions made on his behalf, provided that such election
is applied uniformly to all Eligible Participants for the Plan Year. The Actual
Deferral Percentage of an Eligible Participant who does not have Elective
Employer Contributions made on his behalf shall be zero.
2.3 "Actual Deferral Percentage Test" shall mean the test
described in Section 4.5(a).
2.4 "Affiliated Employer" shall mean an Employing Company and (a) any
corporation which is a member of a controlled group of corporations (as defined
in Section 414(b) of the Code) which includes such Employing Company, (b) any
trade or business (whether or not incorporated) which is under common control
(as defined in Section 414(c) of the Code) with such Employing Company, (c) any
organization (whether or not incorporated) which is a member of an affiliated
service group (as defined in Section 414(m) of the Code) which includes such
Employing Company, and (d) any other entity required to be aggregated with such
Employing Company pursuant to regulations under Section 414(o) of the Code.
Notwithstanding the foregoing, for purposes of applying the limitations of
Article VI, the term Affiliated Employer shall be adjusted as required by Code
Section 415(h).
2.5 "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 or accounts under all defined contribution plans maintained
by the Affiliated Employers, and
(d) amounts described in Sections 415(l)(1) and 419A(d)
(2) of the Code.
2.6 "Average Actual Deferral Percentage" shall mean the average
(expressed as a percentage) of the Actual Deferral Percentages of the Eligible
Participants in a group.
2.7 "Beneficiary" shall mean any person(s) who, or estate(s), trust(s),
or organization(s) which, in accordance with the provisions of Section 12.4,
become entitled to receive benefits upon the death of a Participant.
2.8 "Board of Directors" shall mean the Board of Directors of the
Company.
2.9 "Break-in-Service Date" means the earlier of:
(a) the date on which an Employee terminates employment,
is discharged, retires, or dies; or
(b) the last day of an approved leave of absence
including any extension.
In the case of an individual who is absent from work for maternity or
paternity reasons, such individual shall not incur a Break-in-Service Date
earlier than the expiration of the second anniversary of the first date of such
absence; provided, however, that the twelve-consecutive-month period beginning
on the first anniversary of the first date of such absence shall not constitute
a Year of Service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (a) by reason of the pregnancy
of the Employee, (b) by reason of a birth of a child of the Employee, (c) by
reason of the placement of a child with the Employee in connection with the
adoption of such child by such Employee, or (d) for purposes of caring for such
child for a period beginning immediately following such birth or placement.
2.10 "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.
2.11 "Committee" shall mean the committee appointed pursuant
to Section 13.1 to serve as plan administrator.
2.12 "Common Stock" shall mean the common stock of Southern Energy,
Inc.
2.13 "Company" shall mean Southern Energy Resources, Inc., and its
successors.
2.14 "Compensation" shall mean the base salary or wages of a
Participant, including all amounts contributed by an Employing Company to a Code
Section 125 cafeteria plan sponsored by an Employing Company, on behalf of a
Participant pursuant to a salary reduction arrangement under such plan, plus
monthly shift and monthly seven-day schedule differentials, geographic premiums,
monthly customer service premiums, and monthly nuclear plant premiums and before
deduction of taxes, social security, etc., but excluding all awards under any
incentive pay plans sponsored by the Employing Company includible as gross
income, overtime pay, any hourly shift differentials, substitution pay, such
amounts which are reimbursements to a Participant paid by any Employing Company,
including but not limited to, reimbursement for such items as moving expenses
and travel and entertainment expenses, and imputed income for automobile
expenses, tax preparation expenses and health and life insurance premiums paid
by the Employing Company. Notwithstanding the foregoing, "Compensation" for a
group of Eligible Employees may be modified as provided on the Appendix to this
Plan which is applicable to such Eligible Employees.
The Compensation of each Participant taken into account for purposes of
this Plan shall not exceed $170,000 (as adjusted pursuant to Code Section
401(a)(17)). If a determination period consists of fewer than twelve (12)
months, the annual Compensation limit under Code Section 401(a)(17) shall be
multiplied by a fraction, the numerator of which is the number of months in the
determination period and the denominator of which is twelve (12).
2.15 "Direct Rollover" shall mean a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
2.16 "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.
2.17 "Elective Employer Contribution" shall mean contributions made
pursuant to Section 4.1 during the Plan Year by an Employing Company, at the
election of the Participant, in lieu of cash compensation and shall include
contributions made pursuant to a salary reduction agreement.
2.18 "Eligible Employee" shall mean an Employee who is employed by an
Employing Company and who is represented by one of the collective bargaining
units set forth on an Appendix to this Plan, as updated from time to time.
Notwithstanding the foregoing, no Employee shall be entitled to participate in
this Plan if such Employee is eligible to participate in a plan of an Affiliated
Employer which is intended to be a cash or deferred arrangement under Code
Section 401(k).
2.19 "Eligible Participant" shall mean an Eligible Employee who is
authorized to have Elective Employer Contributions or Voluntary Participant
Contributions allocated to his Account for the Plan Year.
2.20 "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.
2.21 "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; (c) the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion from net
unrealized appreciation with respect to employer securities); and (d) any
hardship distribution described in Section 401(k)(2)(B)(i)(IV) of the Code.
2.22 "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).
2.23 "Employer Matching Contribution" shall mean a contribution made by
an Employing Company pursuant to Section 5.1.
2.24 "Employing Company" shall mean the Company and any affiliate or
subsidiary of the Company or Southern Energy, Inc. 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 payroll
period.
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 "Excess Deferral Amount" shall mean the amount of Elective
Employer Contributions for a calendar year that exceed the Code Section 402(g)
limits as allocated to this Plan pursuant to Section 4.3(b).
2.28 "Excess Deferral Contributions" shall mean the amount of Elective
Employer Contributions on behalf of a Highly Compensated Employee referred to in
Code Section 401(k)(8)(B).
2.29 "Forfeiture" shall mean that portion of a Participant's Account
which is forfeitable as determined under the vesting schedule applicable to such
Participant, if any. Forfeitures shall be applied against and proportionately
reduce future Employing Company contributions; provided, however, that any such
Forfeitures shall not be so applied until the first administratively practicable
Valuation Date after which occurs the earlier of the following events:
(a) the termination of employment of the Participant with
zero percent (0%) vesting;
(b) the distribution of the entire vested portion of the
Participant's Account; or
(c) the date on which the Participant incurs five (5)
consecutive One-Year Breaks in Service.
Therefore, a Forfeiture will only occur in the event of an occurrence
described in the preceding sentence, and only then shall the nonvested portion
of a Participant's Account be used to offset future Employing Company
contributions. Such offset shall take place as of the first administratively
practicable Valuation Date after the Forfeiture occurs.
2.30 "Highly Compensated Employee" shall mean (in accordance with and
subject to Code Section 414(q) and any regulations, rulings, notices or
procedures thereunder), with respect to any Plan Year: (1) any Employee who was
a five percent (5%) owner of Southern Energy, Inc. or an Affiliated Employer (as
determined pursuant to Code Section 416) during the Plan Year or the immediately
preceding Plan Year, or (2) any Employee who earned more than $80,000 in the
preceding Plan Year. The $80,000 amount shall be adjusted for inflation and for
short Plan Years, pursuant to Code Section 414(q). The Employer may, at its
election, limit Employees earning more than $80,000 to only those Employees who
fall within the "top-paid group," as defined in Code Section 414(q) excluding
those employees described in Code Section 414(q)(8) for such purpose. In
determining whether an Employee is a Highly Compensated Employee, the Committee
may make any elections authorized under applicable regulations, rulings,
notices, or revenue procedures.
2.31 "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.
2.32 "Investment Fund" shall mean any one of the funds described in
Article VIII which constitutes part of the Trust Fund.
2.33 "Limitation Year" shall mean the Plan Year.
2.34 "Non-Highly Compensated Employee" shall mean an Employee
who is not 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 has
satisfied the requirements to participate in the Plan as provided in Article III
and whose participation in the Plan at the time of reference has not been
terminated as provided in the Plan, (b) an Employee or former Employee who has
ceased to be a Participant under (a) above, but for whom an Account is
maintained under the Plan, and, (c) an Eligible Employee who has made a Rollover
Contribution to this Plan to the extent that the provisions of the Plan apply to
such Rollover Contribution of the Eligible Employee.
2.38 "Plan" shall mean the Southern Energy Resources Bargaining Unit
Employee Savings Plan, as described herein or as from time to time amended.
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 "Rollover Contribution" shall mean that portion of an eligible
rollover distribution (as defined in Code Section 402(c)(4)) that an Eligible
Employee elects to contribute to this Plan in accordance with the requirements
of Section 3.5.
2.41 "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.
2.42 "Suspense Account" shall mean the total forfeitable portion of all
terminated or former Participants' Accounts which have not yet become available
to offset future Employing Company contributions. The Suspense Account shall be
maintained as a single account under the Plan or shall represent the total of
separate bookkeeping accounts established in the name of each terminated or
former Participant to represent his forfeitable percentage. (This account shall
be separate from the Code Section 415 suspense account referenced in Section 6.2
hereof.) The Suspense Account shall always share in earnings or losses of the
Trust Fund and at the appropriate time shall be used to offset future Employing
Company contributions. Forfeitures shall only remain in the Suspense Account
until such time as they become available to reduce future Employing Company
contributions in accordance with Section 10.3 hereof.
2.43 "Trust" or "Trust Fund" shall mean the trust established
pursuant to the Trust Agreement.
2.44 "Trust Agreement" shall mean the trust agreement between the
Company and the Trustee, as described in Article XIV.
2.45 "Trustee" shall mean the person or corporation designated as
trustee under the Trust Agreement, including any successor or successors.
2.46 "Valuation Date" shall mean each business day of the New York
Stock Exchange.
2.47 "Voluntary Participant Contribution" shall mean a contribution
made pursuant to Section 4.6 during the Plan Year.
2.48 "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.
In addition, an Eligible Employee's Years of Service shall include
service with a prior employer to the extent provided on the Appendix to the Plan
applicable to such Eligible Employee.
Notwithstanding anything in this Section 2.48 to the contrary, an
Employee shall not receive credit for more than one Year of Service with respect
to any twelve-consecutive-month period.
ARTICLE III
PARTICIPATION
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3.1 Eligibility Requirements. Each individual who is an Eligible
Employee on December 19, 2000 shall become an active Participant on December 19,
2000. Each other Eligible Employee shall become an active Participant as of the
first Enrollment Date coincident with or first following the date he becomes an
Eligible Employee. An Eligible Employee shall make an election to participate by
authorizing deductions from or reduction of his Compensation as contributions to
the Plan in accordance with Article IV, and directing the investment of such
contributions in accordance with Article VIII. Such Compensation deduction
and/or reduction authorization and investment direction shall be made in
accordance with the procedures established from time to time by the Committee.
3.2 Participation upon Reemployment. If an Eligible Employee terminates
his employment with an Affiliated Employer and is subsequently reemployed as an
Eligible Employee, whether before or after he incurs a One-Year Break in
Service, he shall be eligible to become an active Participant in the Plan as of
the date of his reemployment.
3.3 Change in Eligibility. In the event that an Employee's status
changes such that he is no longer eligible to participate under the Southern
Energy Resources, Inc. Bargaining Unit Savings Plan, the Southern Energy
Resources Employee Savings Plan or the Southern Energy Resources, Inc. Savings
Plan for Covered Employees, but instead becomes an Eligible Employee under this
Plan, his pre-tax, after-tax, matching and/or rollover contribution accounts
under such plan shall be transferred to his corresponding Elective Employer
Contribution, Voluntary Participant Contribution, Employer Matching Contribution
and/or Rollover Contribution subaccounts in his Account under this Plan. All
amounts transferred to this Plan in accordance with this Section 3.3, including
the outstanding balance of any loans, shall be subject to all of the other
provisions of this Plan. Any outstanding loan transferred with such accounts
shall be considered a loan from this Plan pursuant to Section 11.7 hereof.
Finally, no such transfer shall eliminate an optional form of benefit in
violation of Code Section 411(d)(6).
3.4 Loss of Eligible Employee Status. If a Participant loses his status
as an Eligible Employee, but remains an Employee, such Participant shall be
ineligible to participate and shall be deemed to have elected to suspend making
Voluntary Participant Contributions or to have Elective Employer Contributions
made on his behalf.
3.5 Rollovers from Other Plans. An Eligible Employee who has received a
distribution of his interest in a tax qualified retirement plan of a former
employer under circumstances meeting the requirements of Section 402(c)(4) of
the Code relating to eligible rollover distributions from qualified retirement
plans may elect to deposit all or any portion (as designated by such Eligible
Employee) of the amount of such distribution as a Rollover Contribution to this
Plan. A Rollover Contribution may be made only within 60 days following the date
the Eligible Employee receives the distribution from the plan of his former
employer (or within such additional period as may be provided under Section 408
of the Code if the Eligible Employee shall have made a timely deposit of the
distribution in an individual retirement account).
The Committee shall establish rules and procedures to implement this
Section 3.5, including without limitation, such procedures as may be appropriate
to permit the Committee to verify the tax qualified status of the plan of the
former employer and compliance with any applicable provisions of the Code
relating to such contributions. The amount contributed to the Trustee pursuant
to this Section 3.5 shall be placed in the Eligible Employee's Rollover
Contribution subaccount for the benefit of the Eligible Employee pursuant to
Section 9.1. The Eligible Employee shall have a fully vested interest in the
balance of his Rollover Contribution subaccount at all times and such Rollover
Contribution subaccount shall share in the earnings, gains, and losses of the
Trust Fund as set forth in Article IX of the Plan. An Employee shall be entitled
to a distribution of his Rollover Contribution subaccount pursuant to the
applicable provisions of Articles XI and XII hereof.
3.6 Military Leave. Notwithstanding any provision of the Plan to the
contrary, contributions, benefits, and service credit with respect to qualified
military service will be provided in accordance with Section 414(u) of the Code.
Loan repayments will be suspended under the Plan as permitted under Section
414(u)(4) of the Code.
ARTICLE IV
ELECTIVE EMPLOYER CONTRIBUTIONS AND
VOLUNTARY PARTICIPANT CONTRIBUTIONS
-----------------------------------
4.1 Elective Employer Contributions. An Eligible Employee who meets the
participation requirements of Article III may elect in accordance with the
procedures established by the Committee to have his Compensation reduced as
provided in the schedule attached hereto for his collective bargaining unit,
such Elective Employer Contribution to be contributed to his Account under the
Plan.
4.2 Maximum Amount of Elective Employer Contributions. The maximum
amount of Elective Employer Contributions that may be made on behalf of a
Participant during any Plan Year to this Plan or any other qualified plan
maintained by an Employing Company shall not exceed the dollar limitation set
forth in Section 402(g) of the Code in effect at the beginning of such Plan
Year.
4.3 Distribution of Excess Deferral Amounts.
(a) In General. Notwithstanding any other provision of the
Plan, Excess Deferral Amounts and income allocable thereto shall be
distributed (and any corresponding Employer Matching Contributions
shall be forfeited) no later than April 15, 2001, and each April 15
thereafter, to Participants who allocate (or are deemed to allocate)
such amounts to this Plan pursuant to (b) below for the preceding
calendar year. Excess Deferral Amounts that are distributed shall not
be treated as an Annual Addition. Any Employer Matching Contributions
forfeited pursuant to this subsection (a) shall be applied, subject to
Section 6.1, toward funding Employing Company contributions (for the
Plan Year immediately following the Plan Year to which such forfeited
Employer Matching Contributions relate) or distributed, as directed by
the Committee, to the extent permitted by applicable law.
(b) Assignment. The Participant's allocation of amounts in
excess of the Code Section 402(g) limits to this Plan shall be in
writing; shall be submitted to the Committee no later than March 1;
shall specify the Participant's Excess Deferral Amount for the
preceding calendar year; and shall be accompanied by the Participant's
written statement that if such amounts are not distributed, such Excess
Deferral Amount, when added to amounts deferred under other plans or
arrangements described in Section 401(k), 408(k), 408(p), 402(h)(1)(B),
457, 501(c)(18), or 403(b) of the Code, exceeds the limit imposed on
the Participant by Section 402(g) of the Code for the year in which the
deferral occurred. A Participant is deemed to notify the Committee of
any Excess Deferral Amounts that arise by taking into account only
those deferrals under this Plan and any other plans of an Affiliated
Employer.
(c) Determination of Income or Loss. The Excess Deferral
Amount distributed to a Participant with respect to a calendar year
shall be adjusted for income or loss through the last day of the Plan
Year or the date of distribution, as determined by the Committee. The
income or loss allocable to Excess Deferral Amounts is the sum of:
(1) income or loss allocated to the Participant's
Account for the taxable year multiplied by a fraction, the
numerator of which is such Participant's Excess Deferral
Amount for the year and the denominator of which is the
Participant's Account balance attributable to Elective
Employer Contributions, minus any income or plus any loss
occurring during the Plan Year; and
(2) if the Committee shall determine in its sole
discretion, ten percent (10%) of the amount determined under
(1) above multiplied by the number of whole calendar months
between the end of the Plan Year and the date of the
distribution, counting the month of distribution if
distribution occurs after the 15th of the month.
Notwithstanding the above, the Committee may
designate any reasonable method for computing the income or
loss allocable to Excess Deferral Amounts, provided that the
method does not violate Section 401(a)(4) of the Code, is used
consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year, and is used by
the Plan for allocating income or loss to Participants'
Accounts.
(3) Maximum Distribution Amount. The Excess Deferral
Amount, which would otherwise be distributed to the
Participant, shall, if there is a loss allocable to such
Excess Deferral Amount, in no event be less than the lesser of
the Participant's Account under the Plan attributable to
Elective Employer Contributions or the Participant's Elective
Employer Contributions for the Plan Year.
4.4 Additional Rules Regarding Elective Employer Contributions.
Salary reduction agreements shall be governed by the following:
(a) A salary reduction agreement shall apply to payroll
periods during which such salary reduction agreement is in effect. The
Committee, in its discretion, may establish administrative procedures
whereby the actual reduction in Compensation may be made to coincide
with each payroll period of the Employing Company, or at such other
times as the Committee may determine.
(b) The Committee may amend or revoke its salary reduction
agreement with any Participant at any time, if the Committee determines
that such revocation or amendment is necessary to ensure that a
Participant's additions for any Plan Year will not exceed the
limitations of Sections 4.2 and 6.1 of the Plan or to ensure that the
Actual Deferral Percentage Test is satisfied.
(c) Except as required under (b) above, and under Section
4.5(c) below, no amounts attributable to Elective Employer
Contributions may be distributed to a Participant or his Beneficiary
from his Account prior to the earlier of:
(1) the separation from service, death or
disability of the Participant;
(2) the attainment of age 59 1/2by the
Participant;
(3) the termination of the Plan without
establishment of a successor plan;
(4) a financial hardship of the Participant
pursuant to Section 11.6 of the Plan;
(5) the date of a sale by an Employing Company to an
entity that is not an Affiliated Employer of substantially all
of the assets (within the meaning of Code Section 409(d)(2))
with respect to a Participant who continues employment with
the corporation acquiring such assets; or
(6) the date of the sale by an Employing Company or
an Affiliated Employer of its interest in a subsidiary (within
the meaning of Code Section 409(d)(3)) to an entity which is
not an Affiliated Employer with respect to the Participant who
continues employment with such subsidiary.
4.5 Section 401(k) Nondiscrimination Tests.
(a) Actual Deferral Percentage Test. The Plan shall satisfy
the nondiscrimination test of Section 401(k)(3) of the Code, under
which no Elective Employer Contributions shall be made that would cause
the Actual Deferral Percentage for Eligible Participants who are Highly
Compensated Employees to exceed (1) or (2) as follows:
(1) The Average Actual Deferral Percentage for the
Eligible Participants who are Highly Compensated Employees in
the current Plan Year shall not exceed the Average Actual
Deferral Percentage for the prior Plan Year for Eligible
Participants who were Non-Highly Compensated Employees for the
prior Plan Year multiplied by 1.25; or
(2) The Average Actual Deferral Percentage for
Eligible Participants who are Highly Compensated Employees in
the current Plan Year shall not exceed the Average Actual
Deferral Percentage for Eligible Participants who were
Non-Highly Compensated Employees in the prior Plan Year
multiplied by two (2), provided that the Average Actual
Deferral Percentage for Eligible Participants who are Highly
Compensated Employees in the current Plan Year does not exceed
the Average Actual Deferral Percentage for the prior Plan Year
for Eligible Participants who were Non-Highly Compensated
Employees in the prior Plan Year by more than two (2)
percentage points.
At the election of the Committee, the current year
Average Actual Deferral Percentage for current year Non-Highly
Compensated Employees may be substituted for the prior year
Average Actual Deferral Percentage. However, once an election
is made to utilize such current year Average Actual Deferral
Percentage in determining the Actual Deferral Percentage, the
Committee may not revoke such election without the approval of
the Internal Revenue Service, to the extent required under
Code Section 401(k)(3)(A). Notwithstanding the foregoing, for
the 2000 Plan Year the Average Actual Deferral Percentage of
Non-Highly Compensated Employees shall be deemed to be three
percent (3%) or, if the Committee elects in accordance with
Code Section 401(k)(3)(E), the actual Average Actual Deferral
Percentage of Non-Highly Compensated Employees for the 2000
Plan Year.
(b) Distribution of Excess Deferral Contributions.
(1) In General. The Excess Deferral Contributions for
a Highly Compensated Employee for a Plan Year which are to be
distributed shall be distributed such that the Highly
Compensated Employee with the highest amount of Elective
Employer Contributions for the Plan Year shall be reduced to
the extent required to:
(A) distribute the total amount of
Excess Deferral Contributions,
or
(B) cause the amount of such Highly
Compensated Employee's Elective Employer
Contributions to equal the amount of Elective
Employer Contributions of the Highly Compensated
Employee with the next highest amount of Elective
Employer Contributions for the Plan Year.
This process must be repeated until all Excess Deferral
Contributions are distributed.
Excess Deferral Contributions plus any income and
minus any loss allocable thereto shall be distributed (and any
corresponding Employer Matching Contribution shall be
forfeited) to Participants on whose behalf such Excess
Deferral Contributions were made within two and one-half (2
1/2) months after the last day of the Plan Year in which such
excess amounts arose, and in any event not later than the last
day of the Plan Year following the close of the Plan Year for
which such contributions were made. Distribution of Excess
Deferral Contributions shall be made to Highly Compensated
Employees in accordance with this Section 4.5(b). Any Employer
Matching Contributions forfeited pursuant to this Subsection
(b)(1) shall be applied, subject to Section 6.1, toward
funding Employing Company contributions (for the Plan Year
immediately following the Plan Year to which such forfeited
Employer Matching Contributions relate) or distributed, as
directed by the Committee, to the extent permitted by
applicable law.
(2) Determination of Income or Loss. Excess Deferral
Contributions to be distributed shall be adjusted for any
income or loss through the last day of the Plan Year or the
date of distribution, as determined by the Committee. The
income or loss allocable to such Excess Deferral Contributions
is the sum of:
(A) income or loss allocated to the
Participant's Account for the taxable year multiplied
by a fraction, the numerator of which is the
Participant's Excess Deferral Contributions to be
distributed for the year and the denominator is the
Participant's Account balance attributable to
Elective Employer Contributions, minus any income or
plus any loss occurring during the Plan Year; and
(B) if the Committee shall determine in its
sole discretion, ten percent (10%) of the amount
determined under (A) above multiplied by the number
of whole calendar months between the end of the Plan
Year and the date of the distribution, counting the
month of distribution if distribution occurs after
the 15th of the month.
Notwithstanding the above, the Committee may
designate any reasonable method for computing the income or
loss allocable to Excess Deferral Contributions, provided that
the method does not violate Section 401(a)(4) of the Code, is
used consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year, and is used by
the Plan for allocating income or loss to Participants'
Accounts.
(3) Maximum Distribution Amount. The Excess Deferral
Contributions which would otherwise be distributed to the
Participant shall be adjusted for income; shall be reduced, in
accordance with regulations, by the Excess Deferral Amount
distributed to the Participant; and shall, if there is a loss
allocable to the Excess Deferral Contributions, in no event be
less than the lesser of the Participant's Account under the
Plan attributable to Elective Employer Contributions or the
Participant's Elective Employer Contributions for the Plan
Year.
(c) Special Rules.
(1) For purposes of this Section 4.5, the Actual
Deferral Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is
eligible to have deferral contributions allocated to his
account under two (2) or more plans or arrangements described
in Section 401(k) of the Code that are maintained by an
Affiliated Employer shall be determined as if all such
deferral contributions were made under a single arrangement.
If a Highly Compensated Employee participates in two (2) or
more cash or deferred arrangements that have different plan
years, all cash or deferred arrangements ending with or within
the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans
shall be treated as separate if mandatorily disaggregated
under Code Section 401(k).
(2) In the event that this Plan satisfies the
requirements of Code Section 401(k), 401(a)(4), or 410(b) only
if aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of Code Section 401(k),
401(a)(4), or 410(b) only if aggregated with this Plan, then
the actual deferral percentages shall be determined as if all
such plans were a single plan.
(3) The determination and treatment of the Elective
Employer Contributions and Actual Deferral Percentage of any
Eligible Participant shall satisfy such other requirements
as may be prescribed by the Secretary of the Treasury.
4.6 Voluntary Participant Contributions. An Eligible Employee who meets
the participation requirements of Article III may elect in accordance with the
procedures established by the Committee to contribute to his Account a Voluntary
Participant Contribution as provided in the schedule attached hereto for his
collective bargaining unit. The maximum Voluntary Participant Contribution shall
be reduced by the percent, if any, which is contributed as an Elective Employer
Contribution on behalf of such Participant under Section 4.1.
4.7 Manner and Time of Payment of Elective Employer Contributions and
Voluntary Participant Contributions. Contributions made in accordance with
Sections 4.1 and 4.6 will be rounded to the next higher multiple of one dollar
on a monthly basis. They will be made only through payroll deductions and will
be effective as of the payroll period commencing as soon as practicable after
the date on which the Participant elects to commence participation in the Plan.
Contributions shall be remitted to the Trustee as of the earliest date on which
such contributions can reasonably be segregated from each Employing Company's
general assets, but in any event within the time period prescribed by applicable
law.
4.8 Change in Contribution Rate. A Participant may prospectively change
the percentage of his Compensation that he has authorized as the Elective
Employer Contribution to be made on his behalf or his Voluntary Participant
Contribution to another permissible percentage in accordance with the procedures
established by the Committee. Such election shall be effective as soon as
practicable after it is made.
4.9 Change in Contribution Amount. In the event of a change in the
Compensation of a Participant, the percentage of the Elective Employer
Contribution made on his behalf or his Voluntary Participant Contribution
currently in effect shall be applied as soon as practicable with respect to such
changed Compensation without action by the Participant.
ARTICLE V
EMPLOYER CONTRIBUTIONS
----------------------
5.1 Amount of Employer Matching Contributions. Subject to the
provisions of Sections 6.1 and 6.2, each Employing Company shall contribute an
Employer Matching Contribution on behalf of each Participant in its employ as
provided in the schedule attached hereto for his collective bargaining unit. The
Employer Matching Contribution shall be allocated first to the Elective Employer
Contributions made on a Participant's behalf.
5.2 Payment of Employer Matching Contributions. Except as
provided herein, Employer Matching Contributions shall be remitted to the
Trustee as soon as practicable after the payroll period to which they
relate.
5.3 Reversion of Employing Company Contributions. Employing
Company contributions computed in accordance with the provisions of this
Plan shall revert to the Employing Company under the following
circumstances:
(a) In the case of an Employing Company contribution which is
made by reason of a mistake of fact, such contribution upon written
direction of the Employing Company shall be returned to the Employing
Company within one year after the payment of the contribution.
(b) If any Employing Company contribution is determined to be
nondeductible under Section 404 of the Code, then such Employing
Company contribution, to the extent that it is determined to be
nondeductible, upon written direction of the Employing Company shall be
returned to the Employing Company within one year after the
disallowance of the deduction.
(c) If the Plan receives an adverse determination with respect
to its initial qualification under the Code, the Employing Company
contributions shall be returned to the Employing Company within one
year of the date of such disqualification.
The amount which may be returned to the Employing Company under this
Section 5.3(a) and (b) is the excess of (1) the amount contributed over (2) the
amount that would have been contributed had there not occurred a mistake of fact
or disallowance of the deduction. Earnings attributable to the excess
contribution shall not be returned to the Employing Company, but losses
attributable thereto shall reduce the amount to be so returned. If the
withdrawal of the amount attributable to the mistaken contribution would cause
the balance of the Account of any Participant to be reduced to less than the
balance which would have been in the Account had the mistaken amount not been
contributed, then the amount to be returned to the Employing Company shall be
limited so as to avoid such reduction.
5.4 Correction of Prior Incorrect Allocations and Distributions.
Notwithstanding any provisions contained herein to the contrary, in the event
that, as of any Valuation Date, adjustments are required in any Participants'
Accounts to correct any incorrect allocation of contributions or investment
earnings or losses, or such other discrepancies in Account balances that may
have occurred previously, the Employing Companies may make additional
contributions to the Plan to be applied to correct such incorrect allocations or
discrepancies. The additional contributions shall be allocated by the Committee
to adjust such Participants' Accounts to the value which would have existed on
said Valuation Date had there been no prior incorrect allocation or
discrepancies. The Committee shall also be authorized to take such other actions
as it deems necessary to correct prior incorrect allocations or discrepancies in
the Accounts of Participants under the Plan.
ARTICLE VI
LIMITATIONS ON CONTRIBUTIONS
----------------------------
6.1 Section 415 Limitations.
(a) Notwithstanding any provision of the Plan to the contrary,
the total Annual Additions allocated to the Account (and the accounts
under all defined contribution plans maintained by an Affiliated
Employer) of any Participant for any Limitation Year in accordance with
Code Section 415 and the regulations thereunder, which are incorporated
herein by this reference, shall not exceed the lesser of the following
amounts:
(1) twenty-five percent (25%) of the
Participant's compensation in the Limitation Year; or
(2) $30,000.
(b) For purposes of this Section 6.1, wherever the term
"compensation" is used, such term shall mean compensation as defined in
Code Section 415(c)(3) and any rulings and regulations thereunder.
6.2 Correction of Contributions in Excess of Section 415 Limits. If the
Annual Additions for a Participant exceed the limits of Section 6.1 as a result
of the allocation of forfeitures, if any, a reasonable error in estimating a
Participant's annual compensation for purposes of the Plan, a reasonable error
in determining the amount of elective deferrals (within the meaning of Section
402(g)(3) of the Code) that may be made with respect to any individual, or under
other limited facts and circumstances that the Commissioner of the Treasury
finds justify the availability of the rules set forth in this Section 6.2, the
excess amounts shall not be deemed Annual Additions if they are treated in
accordance with any one or more or any combination of the following:
(a) distribute to the Participant that portion, or all, of his
Elective Employer Contributions (as adjusted for income and loss) as is
necessary to ensure compliance with Section 6.1;
(b) return to the Participant that portion, or all, of his
Voluntary Participant Contributions (as adjusted for income and loss)
as is necessary to ensure compliance with Section 6.1; and
(c) forfeiture of that portion, or all, of the Employer
Matching Contributions (as adjusted for income and loss) and any
forfeitures of Employer contributions that were allocated to the
Participant's Account (as adjusted for income and loss), as is
necessary to ensure compliance with Section 6.1.
Any amounts distributed or returned to the Participant under (a) or (b)
above shall be disregarded for purposes of the Actual Deferral Percentage Test.
Any amounts forfeited under this Section 6.2 shall be held in a
suspense account and shall be applied, subject to Section 6.1, toward funding
the Employer Matching Contributions for the next succeeding Plan Year. Such
application shall be made prior to any Employing Company contributions and prior
to any Employer Matching Contributions that would constitute Annual Additions.
No income or investment gains and losses shall be allocated to the suspense
account provided for under this Section 6.2. If any amount remains in a suspense
account provided for under this Section 6.2 upon termination of this Plan, such
amount will revert to the Employing Companies notwithstanding any other
provision of this Plan.
ARTICLE VII
SUSPENSION OF CONTRIBUTIONS
---------------------------
7.1 Suspension of Contributions. A Participant may (on a prospective
basis) voluntarily suspend the Elective Employer Contributions made on his
behalf and his Voluntary Participant Contributions in accordance with the
procedures established by the Committee. Such suspension shall be effective as
soon as practicable after it is made. Whenever Elective Employer Contributions
made on a Participant's behalf and Voluntary Participant Contributions are
suspended, Employer Matching Contributions shall also be suspended.
7.2 Resumption of Contributions. A Participant may terminate
prospectively any such suspension in accordance with the procedures established
by the Committee. Such resumption of contributions shall be effective
prospectively as soon as practicable after it is elected. There shall be no make
up of any contributions by a Participant or by an Employing Company with respect
to a period of suspension.
ARTICLE VIII
INVESTMENT OF CONTRIBUTIONS
---------------------------
8.1 Investment Funds. The Investment Funds shall be selected from time
to time by the Committee. In addition to such other Investment Funds selected by
the Committee, the Investment Funds shall include the "Company Stock Fund". The
Company Stock Fund shall be invested and reinvested in Common Stock, provided
that funds applicable to the purchase of Common Stock pending investment of such
funds may be temporarily invested in short-term United States Government
obligations, other obligations guaranteed by the United States Government,
commercial paper, or certificates of deposit, and, if the Trustee so determines,
may be transferred to money market funds utilized by the Trustee for qualified
employee benefit trusts.
8.2 Investment of Participant Contributions. Each Participant shall
direct, at the time he elects to participate in the Plan and at such other times
as may be directed by the Committee or pursuant to Section 8.6, that his
Elective Employer Contributions and Voluntary Participant Contributions be
invested in one or more of the Investment Funds, provided such investments are
made in one-percent (1%) increments.
8.3 Investment of Employer Matching Contributions. Employer Matching
Contributions shall be invested entirely in the Company Stock Fund and shall
remain invested in the Company Stock Fund until such time that the Participant
elects to invest all or a portion of the amount credited to his Employer
Matching Contribution subaccount in any of the Investment Funds under this Plan
as provided in Section 8.5.
Notwithstanding the foregoing, any amounts attributable to company
matching contributions, which are transferred to this Plan pursuant to a
trust-to-trust transfer, shall not be invested in the Company Stock Fund but
shall instead be invested at the Participant's direction. If no such direction
is provided, such transferred amount shall be invested in accordance with
procedures established by the Committee.
8.4 Investment of Earnings. Interest, dividends, if any, and other
distributions received by the Trustee with respect to an Investment Fund shall
be invested in such Investment Fund.
8.5 Transfer of Assets between Funds. A Participant may direct in
accordance with the provisions of this Section 8.5 and such procedures
established by the Committee that all of his interest in an Investment Fund or
Funds attributable to amounts in his Account or any portion of such amount
(expressed in number of shares, whole dollar amounts, or one-percent (1%)
increments) to the credit of his Account be transferred and invested by the
Trustee as of such date in any other Investment Fund as designated by the
Participant. Such direction shall be effective as soon as practicable after it
is made.
8.6 Change in Investment Direction. Any investment direction given by a
Participant shall continue in effect until changed by the Participant. A
Participant may change his investment direction as to the future contributions
and allocations to his Account in accordance with the procedures established by
the Committee, and such direction shall be effective as soon as practicable
after it is made.
8.7 Section 404(c) Plan. This Plan is intended to be a plan described
in ERISA Section 404(c) and shall be interpreted in accordance with Department
of Labor Regulations Section 1.404c-1, which is incorporated herein by this
reference. The Committee shall take such actions as it deems necessary or
appropriate in its discretion to cause the Plan to comply with such
requirements, including, but not limited to, providing Participants with the
right to request and receive written confirmation of their investment
instructions. Further, the Committee shall take such actions as it deems
necessary or appropriate in its discretion (a) to ensure that confidentiality
procedures with respect to a Participant's ownership of Common Stock and the
exercise of ownership rights with respect to such Common Stock are adequate and
utilized, and (b) to appoint an independent fiduciary to carry out such actions
as the Committee determines involve the potential for undue influence on
Participants with regard to the direct or indirect exercise of shareholder
rights with respect to Common Stock.
8.8 Common Stock Investment Funds. In the event that the Committee in
its discretion allows a trust-to-trust transfer from the fund of a plan which is
primarily invested in the common stock of the employer maintaining the plan into
this Plan, the Trustee shall establish and maintain a separate Investment Fund
for such common stock on behalf of those Participants invested in common stock
prior to the transfer. These Participants may direct investments out of such
Investment Fund and into the other Investment Funds in accordance with the
procedures of this Article VIII. However, no future investments may be made in
such Investment Fund and, should a Participant elect to reduce the portion of
his Account which is invested in such Investment Fund, he may not again reinvest
additional assets in such Investment Fund.
ARTICLE IX
MAINTENANCE AND VALUATION OF PARTICIPANTS' ACCOUNTS
---------------------------------------------------
9.1 Establishment of Accounts. An Account shall be established for each
Participant. In addition, subaccounts shall be established for each Participant
to reflect all Elective Employer Contributions, Voluntary Participant
Contributions, Employer Matching Contributions and any Rollover Contributions
(and the earnings and/or losses on each subaccount). Each Participant will be
furnished a statement of his Account at least annually and upon any
distribution.
9.2 Valuation of Investment Funds. A Participant's Account in respect
of his interest in each Investment Fund shall be credited or charged, as the
case may be, as of each Valuation Date with the dividends, income, gains,
appreciation, losses, depreciation, forfeitures, expenses, and other
transactions with respect to such Investment Fund for the Valuation Date as of
which such credit or charge accrued. Such credits or charges to a Participant's
Account shall be made in such proportions and by such method or formula as shall
be deemed by the Committee to be necessary or appropriate to account for each
Participant's proportionate beneficial interest in the Trust Fund in respect of
his interest in each Investment Fund. Investments of each Investment Fund shall
be valued at their fair market values as of each Valuation Date as determined by
the Trustee, and such valuation shall conclusively establish such value.
9.3 Rights in Investment Funds. Nothing contained in this Article IX
shall be deemed to give any Participant any interest in any specific property in
any Investment Fund or any interest, other than the right to receive payments or
distributions in accordance with the Plan.
ARTICLE X
VESTING
-------
10.1 Full Vesting. Participants shall at all times be
one-hundred percent (100%) vested in all Elective Employer Contributions,
Voluntary Participant Contributions and Rollover Contributions made to their
Accounts.
10.2 Employer Matching Contributions Contributions. A Participant's
nonforfeitable percentages of Employer Matching Contributions (and any earnings
or losses thereon) shall be based on the Participant's total number of Years of
Service, computed without regard to any Years of Service completed after the
fifth (5th) consecutive One-Year Break in Service. Such percentages shall be
determined from the schedule attached hereto for his collective bargaining unit.
10.3 Forfeitures. That portion of the Account to which the Participant
is not entitled shall be credited to the Suspense Account (which will always
share in earnings or losses of the Trust) and at such time as the amount becomes
available as a Forfeiture shall be applied to reduce the next ensuing Employing
Company contribution.
10.4 Buy-Back Procedure. A terminated Participant who has voluntarily
elected to receive a distribution of the vested portion of his Account pursuant
to Section 12.5(a)(2) (or who receives a mandatory lump sum distribution
pursuant to Section 12.5(a)(1)) and who returns to the employ of an Employing
Company before incurring five (5) consecutive One-Year Breaks in Service shall
be permitted to repay the distributed amount to the Trust Fund and thereby be
entitled to a restoration of his entire Account under the Plan in an amount not
less than that amount determined as of the Valuation Date used to determine the
actual payment of the distribution, unadjusted by an subsequent gains or losses.
The Participant must repay the full amount distributed to him before the earlier
of (a) five (5) years from the first date on which the Participant is
subsequently reemployed by the Employer or (b) the close of a period of five (5)
consecutive One-Year Breaks in Service commencing after the withdrawal. The
permissible sources for restoration of accrued benefits are subsequent (a)
income or gain to the Plan; (b) Forfeitures; or (c) Employer contributions.
Restoration of accrued benefits to which an Employee is entitled under this
Section shall be made, as deemed necessary and proper by the Committee, from one
or more of the permissible sources named above prior to the normal allocation of
such funds under this Plan.
10.5 Deemed Cash-out and Deemed Buy-back. Any Participant who
terminates employment for any reason at a time when he is zero percent (0%)
vested in his Account shall be deemed cashed out of the Plan as of the last day
of the month immediately following the month in which occurs his termination of
employment. If the terminated Participant returns to the employ of an Employing
Company before incurring five (5) consecutive One-Year Breaks in Service, he
shall be entitled to a restoration of his benefits under the Plan in an amount
not less than that amount determined as of the last day of the month immediately
following the month in which occurs his termination of employment, unadjusted by
any subsequent gains or losses. The permissible sources for restoration of
accrued benefits are subsequent (a) income or gain to the Plan; (b) Forfeitures;
or (c) Employing Company contributions. Restoration of accrued benefits to which
an Employee is entitled under this Section shall be made, as deemed necessary
and proper by the Committee, from one or more of the permissible sources named
above prior to the normal allocation of such funds under this Plan.
10.6 Vesting after One-Year Break in Service.
(a) A terminated Participant who is reemployed after incurring a
One-Year Break in Service shall be entitled to receive credit for vesting
purposes for Years of Service earned prior to the One-Year Break in Service
subject to the following rules:
(1) If he had a vested right to all or a portion of his
Account balance derived from Employing Company contributions at the
time of his termination of employment, he shall receive credit for
Years of Service earned prior to his One-Year Break in Service upon his
date of reemployment.
(2) If he did not have a vested right to all or any portion of
his Account balance derived from Employing Company
contributions at the time of his termination of employment, he shall
receive credit for Years of Service earned prior to his One-Year Break
in Service provided his number of consecutive One-Year Breaks in Service
is less than the greater of five (5) or his aggregate Years of Service
earned before his One-Year Break in Service.
(b) No Years of Service earned after five (5) consecutive One-Year
Breaks in Service shall be taken into account in determining a Participant's
nonforfeitable percentage in his Account balance attributable to Employing
Company contributions that were made prior to such five-year period.
10.7 Vesting at Normal Retirement Age. Notwithstanding Section 10.2, a
Participant shall become one hundred percent (100%) vested in his accrued
Account balance upon his attainment of Normal Retirement Age provided that he
has not separated from service with the Employing Company prior to such date.
10.8 Vesting Upon Death. Notwithstanding Section 10.2, a
Participant's Account shall become one hundred percent (100%) vested upon his
death if his death occurs while he is an Employee.
ARTICLE XI
WITHDRAWALS AND LOANS
---------------------
11.1 Withdrawals by Participants.
(a) Subject to the provisions of Article XII, this Section
11.1, and Sections 11.2 through 11.6, a Participant may make
withdrawals from his vested Account effective as of any Valuation Date
in the order of priority listed below:
(1) All or a portion of the value of his Account
attributable to Voluntary Participant Contributions (not
including any earnings or appreciation thereon) made prior
to January 1, 1987;
(2) All amounts described above, plus all or a
portion of the value of his Account attributable to
Voluntary Participant Contributions, plus a ratable portion
of the earnings and/or appreciation on Voluntary Participant
Contributions;
(3) All amounts described above, all or a
portion of the value of his Account attributable to
Rollover Contributions (including earnings and appreciation
thereon);
(4) All amounts described above, plus up to fifty
percent (50%) of the value of his Account attributable
to Employer Matching Contributions (including earnings
and appreciation thereon) allocated to his Account;
provided, however, that said Participant shall have
participated in the Plan for not less than sixty (60) months
at the time of the withdrawal;
(5) (A) For Participants who have not attained age 59
1/2 or separated from service with the Affiliated Employers
(within the meaning of Code Section 401(k)(2)(B)(i)(I)), all
amounts described above, plus all or a portion of the value
of his Account attributable to Elective Employer
Contributions(not including any earnings or appreciation
thereon); and
(B) For Participants who have attained age 59
1/2 or separated from service with the Affiliated Employers
(within the meaning of Code Section 401(k)(2)(B)(i)(I)), all
amounts described above, plus all or a portion of the value
of his Account attributable to Elective Employer
Contributions and any earnings or appreciation thereon.
(b) There shall be no limit on the number of
withdrawals which may be made during a Plan Year.
11.2 Notice of Withdrawal. Notice of withdrawal must be given by
a Participant in accordance with the procedures established by the
Committee, and if such withdrawal would constitute an eligible rollover
distribution (within the meaning of Code Section 402(c)(4)), the consent and
notice requirements of Section 12.10 must be satisfied. Payment of a withdrawal
shall be made as soon as practicable and in accordance with Section 12.10, if
applicable.
11.3 Form of Withdrawal. All distributions under this Article XI shall
be made in the form of cash, provided that with respect to any distribution
which is attributable to Common Stock, the Participant shall have the right to
demand that such portion of the distribution be made in the form of Common Stock
to the extent of the whole number of shares of Common Stock in his Account. Such
demand must be made in accordance with the procedures established by the
Committee.
11.4 Minimum Withdrawal. No distribution under this Article XI shall be
permitted in an amount which has a value of less than $300, unless the value of
the amount available under the selected option is less than $300, in which case
such available amount will be distributed.
11.5 Source of Withdrawal. Withdrawals shall be made in accordance with
the instructions of the Participant from each of the Investment Funds in which
the amount to be distributed is invested. The value of the amount to be
distributed under any option listed in Section 11.1 shall be determined as soon
as practicable in accordance with the procedures established by the Committee.
11.6 Requirement of Hardship.
(a) Except as provided in (e) below, a withdrawal pursuant to
Section 11.1(a)(5)(A), in addition to the other requirements of Article
XI, shall be permitted only if the Committee determines that the
withdrawal is to be made on account of an immediate and heavy financial
need of the Participant, the amount of the withdrawal does not exceed
such financial need, and the amount of the withdrawal is not reasonably
available from other resources of the Participant.
(b) For purposes of this Section 11.6, the following
shall be deemed to be immediate and heavy financial needs:
(1) Medical expenses described in Section213(d)
of the Code, including but not limited to, expenses for:
(i) The diagnosis, cure, mitigation,
treatment, or prevention of disease, or for the
purpose of affecting any structure or function of the
body;
(ii) transportation primarily for and
essential to such expenses referred to in (i) above;
or
(iii) insurance (including amounts paid as
premiums under part B of Title XVIII of the Social
Security Act) relating to medical expenses referred
to in (i) or (ii) above, provided such expenses are
incurred by the Participant, the Participant's spouse
or any person whom the Participant may properly claim
as a dependent on his federal income tax return or
are necessary for such persons to obtain the medical
care described above; or
(2) Purchase (excluding mortgage payments)
of a principal residence for the Participant; or
(3) Payment of tuition, related educational fees, and
room and board expenses, for the next twelve (12) months of
post-secondary education for the Participant, the
Participant's spouse or child or children, or any person the
Participant may properly claim as a dependent on his federal
income tax return; or
(4) The need to prevent eviction of the
Participant from his principal residence or foreclosure on the
mortgage of the Participant's principal residence; or
(5) Any other need which the Commissioner of the
Internal Revenue Service, through the publication of revenue
rulings, notices, or other documents of general applicability,
deems to be immediate and heavy.
(c) For purposes of this Section 11.6, a withdrawal shall be
deemed necessary to satisfy an immediate and heavy financial need if:
(1) The distribution is not in excess of the amount
of the immediate and heavy financial need of the
Participant, including any amounts necessary to pay any
federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution;
(2) The Participant has obtained all
distributions and all nontaxable loans currently available
to him under all plans maintained by an Affiliated Employer;
(3) The Participant agrees to suspend all elective
employer contributions and voluntary participant
contributions to all plans of an Affiliated Employer for at
least twelve (12) months after receipt of the distribution
under this Section 11.6; and
(4) The Participant agrees not to make elective
contributions to this Plan or any other qualified or
non-qualified deferred compensation plan sponsored by an
Affiliated Employer (including stock purchase, stock option
or similar plans) during the Participant's taxable year
immediately following the taxable year of the hardship
distribution in excess of the Participant's applicable
elective deferral limits under Section 402(g) of the Code
for such taxable year less the amount of the hardship
distribution for the taxable year.
(d) When all suspensions pursuant to this Section 11.6 are
ended, Elective Employer Contributions and/or Voluntary Participant
Contributions may be resumed by the Participant (if the Participant is
then eligible and elects to resume such contributions) beginning with
the Participant's first payroll period commencing after all suspensions
are ended, and Employer Matching Contributions by his Employing Company
also shall be resumed. There shall be no make up of any contributions
by a Participant or by an Employing Company with respect to a period of
suspension.
(e) Notwithstanding (a) above, if a Participant has attained
age 59 1/2 or separated from service with the Affiliated Employers
(within the meaning of Code Section 401(k)(2)(B)(i)(I)), he shall be
permitted to make a withdrawal pursuant to Section 11.1(a)(5)(A), even
if such withdrawal is not on account of hardship.
11.7 Loans to Participants.
(a) The Committee may, in its sole discretion, direct the
Trustee to make a loan or loans from the Trust Fund to any Participant
(other than a Participant with an existing Plan loan in arrears) (1)
who is an Employee on the active payroll of an Employing Company, (2)
who is receiving long-term disability payments under a plan maintained
by his Employing Company, (3) who is on a leave of absence authorized
by his Employing Company, or (4) who is a party in interest as defined
in Section 3(14) of ERISA. All loan applications shall be made in
accordance with the procedures established by the Committee, which
shall form a part of this Plan. Such procedures shall establish the
terms and conditions of loans under the Plan, including the events
constituting default, and shall be consistent with the provisions of
this Section 11.7.
(b) The total amount of all loans outstanding to any one
Participant under all qualified plans maintained by an Affiliated
Employer shall not exceed the lesser of (1) $50,000, reduced by the
excess of the highest outstanding balance of loans from all qualified
plans maintained by an Affiliated Employer during the twelve-month
period ending on the day before a loan is made, over the outstanding
balance of any loans to the Participant from all qualified plans
maintained by an Affiliated Employer on the date the loan is made, or
(2) fifty percent (50%) of such Participant's Account as of the
Valuation Date coinciding with or next following the date the loan
application is made. The minimum amount of any loan shall not equal
less than $1,000.
(c) The Participant requesting a loan pursuant to this Section
11.7 shall designate the order of priority of Investment Fund(s) from
which the principal amount of the loan shall be obtained.
(d) The Committee shall adopt and follow uniform and
nondiscriminatory procedures in making loans under this Plan to make
certain that such loans (1) are available to all Participants on a
reasonably equivalent basis, (2) are not made available to Highly
Compensated Employees, officers, or shareholders in an amount greater
than the amount made available to other Participants, (3) bear a
reasonable rate of interest, and (4) are adequately secured. The
repayment of such loans by any Participant who is an Employee on the
active payroll of an Employing Company shall be made through payroll
deduction. Any loan repayment shall extend for a period certain, not to
exceed five (5) years, expressed in any number of whole months
(including the month the loan is made). The term of any loan may be for
a period certain of more than five (5) years, but not to exceed fifteen
(15) years, only if the proceeds of such loan are used to acquire any
dwelling used or, within a reasonable period of time, to be used as the
principal residence of the Participant.
(e) The Committee shall direct the Trustee to obtain from the
Participant such note and adequate security as it may require. All
loans made pursuant to this Section 11.7 shall be secured by the
Participant's Account, and no other types of collateral may be used to
secure a loan from the Plan. Notwithstanding the provisions of Section
16.2, if a Participant defaults on a loan under the Plan or if the
Participant's employment terminates prior to full repayment thereof, in
addition to any other remedy provided in the loan instruments or by
law, the Committee may direct the Trustee to charge against that
portion of the Participant's Account which secures the loan the amount
required to fully repay the loan. Under no circumstances, however,
shall any unpaid loan be charged against a Participant's Account until
permitted by applicable law. This Section authorizes only the making of
bona fide loans and not distributions, and before resort is made
against a Participant's Account for his failure to repay any loan, such
other reasonable efforts to collect the same shall be made by the
Committee as it deems reasonable and practical under the circumstances.
(f) No distribution shall be made to any Participant unless
and until all unpaid loans to such Participant have either been paid in
full or deducted from the Participant's Account.
(g) All loans made under this Section 11.7 shall be considered
earmarked investments of the Participant's Account, and any repayment
of principal and interest shall be reinvested in accordance with the
Participant's investment direction in effect on the date of such
repayment pursuant to Article VIII of the Plan.
ARTICLE XII
DISTRIBUTION TO PARTICIPANTS
----------------------------
12.1 Distribution upon Retirement.
(a) If a Participant's employment with the Affiliated
Employers is terminated as a result of his retirement pursuant to the
defined benefit pension plan of an Affiliated Employer, in addition to
the withdrawal options under Section 11.1, the entire balance credited
to his Account shall be payable to him in the manner set forth in this
Section 12.1 at such time requested by the Participant pursuant to
Section 12.6 and in accordance with the procedures established by the
Committee. The distribution shall commence as soon as practicable after
the Valuation Date selected by the Participant in one of the following
ways:
(1) In a single lump sum distribution; or
(2) In annual installments not to exceed twenty (20),
as selected by the Participant, or the Participant's life
expectancy. The amount of cash and/or the number of shares
of Common Stock in each installment shall be equal to the
proportionate value as of each Valuation Date immediately
preceding payment of the balance then to the credit of the
Participant in his Account determined by dividing the amount
credited to his Account as of such Valuation Date by the
number of payments remaining to be made.
If a Participant who is receiving installment
payments shall establish to the satisfaction of the Committee,
in accordance with principles and procedures established by
the Committee which are applicable to all persons similarly
situated, that a financial emergency exists in his affairs,
such as illness or accident to the Participant or a member of
his immediate family or other similar contingency, the
Committee may, for the purpose of alleviating such emergency,
accelerate the time of payment of some or all of the remaining
installments. If a Participant dies before receiving all of
the amount to the credit of his Account in accordance with
this paragraph (2), the amount remaining to the credit of his
Account at his death shall be distributed to his Beneficiary
as soon as practicable in accordance with Section 12.4.
(b) Notwithstanding a Participant's election to defer the
receipt of the benefits under (a) above, the Committee shall direct
payment in a single lump sum to such Participant if the balance of his
Account does not exceed $5,000 in accordance with the requirements of
Code Section 411(a)(11). The Committee shall not cash-out any
Participant whose Account balance exceeds $5,000 without the written
consent of the Participant.
12.2 Distribution upon Disability. If a Participant's employment with
the Affiliated Employers is terminated prior to his Normal Retirement Date by
reason of his total and permanent disability, as determined by the Social
Security Administration and evidenced in a writing provided to the Committee,
such disabled Participant, in addition to the withdrawal options under Section
11.1, shall be entitled to receive the entire value credited to his Account at
such time as requested by the Participant or such legal representative pursuant
to Section 12.6 and in accordance with the procedures established by the
Committee. Any distribution pursuant to this Section 12.2 shall be made in a
single lump sum as soon as practicable after the selected Valuation Date.
Notwithstanding the foregoing, the Committee shall direct payment in a
single lump sum to such Participant or his legal representative if the balance
of such Participant's Account does not exceed $5,000 in accordance with the
requirements of Code Section 411(a)(11).
12.3 Distribution upon Death. If a Participant's employment with the
Affiliated Employers is terminated by reason of death, the entire balance
credited to the Participant's Account shall be distributed as soon as
practicable to the Participant's surviving Beneficiary or Beneficiaries in a
lump sum.
12.4 Designation of Beneficiary in the Event of Death. A Participant
may designate a Beneficiary or Beneficiaries (who may be designated
contingently) to receive all or part of the amount credited to his Account in
case of his death before his receipt of all of his benefits under the Plan,
provided that the Beneficiary of a married Participant shall be the
Participant's Surviving Spouse, unless such Surviving Spouse shall consent in a
writing witnessed by a notary public, which writing acknowledges the effect of
the Participant's designation of a Beneficiary other than such Surviving Spouse.
However, if such Participant establishes to the satisfaction of the Committee
that such written consent may not be obtained because the Surviving Spouse
cannot be located or because of such other circumstances as the Secretary of the
Treasury may by regulations prescribe, a designation by such Participant without
the consent of the Surviving Spouse shall be valid.
Any consent necessary under this Section 12.4 shall be valid and
effective only with respect to the Surviving Spouse who signs the consent or, in
the event of a deemed consent, only with respect to a designated Surviving
Spouse.
A designation of Beneficiary may be revoked by the Participant without
the consent of any Beneficiary (or the Participant's Surviving Spouse) at any
time before the commencement of the distribution of benefits. A Beneficiary
designation or change or revocation of a Beneficiary designation shall be made
in accordance with the procedures established by the Committee.
If no designated Beneficiary shall be living at the death of the
Participant and/or such Participant's Beneficiary designation is not valid and
enforceable under applicable law or the procedures of the Committee, such
Participant's Beneficiary or Beneficiaries shall be the person or persons in the
first of the following classes of successive preference, if then living:
(a) the Participant's spouse on the date of his death,
(b) the Participant's children, equally,
(c) the Participant's parents, equally,
(d) the Participant's brothers and sisters, equally, or
(e) the Participant's executors or administrators.
Payment to such one or more persons shall completely discharge the Plan and the
Trustee with respect to the amount so paid.
12.5 Distribution upon Termination of Employment.
(a) If a Participant's employment with the Affiliated
Employers is terminated for any reason other than in accordance with
Sections 12.1, 12.2, and 12.3, the vested balance to the credit of the
Participant's Account shall be payable in a single lump sum. Such lump
sum distribution shall be made as soon as practicable after the
Participant's termination of employment, provided that one of the
following conditions is met:
(1) the Participant's vested Account balance
does not exceed $5,000 in accordance with Code Section 411(a)
(11), or
(2) in accordance with Section 12.10, the
Participant elects to receive a distribution of his vested
Account balance.
(b) A Participant who does not receive a distribution under
Section 12.5(a)(1) may elect to defer the commencement of the
distribution of his Account following the termination of his employment
until a later Valuation Date, provided that such distribution shall
commence not later than the date required under Section 12.6 of the
Plan. In addition to the withdrawal options under Section 11.1, any
deferred distribution shall commence as soon as practicable after the
Valuation Date selected by the Participant.
12.6 Commencement of Benefits.
(a) Notwithstanding any other provision of the Plan, and
except as further provided in Section 12.6(b) below, if the Participant
does not elect to defer commencement of his benefit payments, the
payment of his benefits shall begin at the Participant's election no
later than the sixtieth (60th) day after the close of the Plan Year in
which the latest of the following events occurs:
(1) the Participant attains the earlier of age
sixty-five (65) or his Normal Retirement Date,
(2) the Participant's tenth (10th) anniversary
of participation under the Plan, or
(3) the Participant's separation from service
with the Affiliated Employers.
(b) In no event shall the distribution of amounts in a
Participant's Account commence later than the April 1 of the calendar
year following the later of the calendar year in which the Participant
attains age 70 1/2 or terminates employment with the Affiliated
Employers, in accordance with regulations prescribed by the Secretary
of the Treasury. Notwithstanding the foregoing, the payment of benefits
to a Participant who is a five percent (5%) owner of Southern Energy,
Inc. or an Affiliated Employer (as determined pursuant to Code Section
416) with respect to the Plan Year ending in the calendar year in which
the Participant attains age 70 1/2 shall begin not later than April 1,
of the calendar year following the calendar year in which the
Participant attains age 70 1/2 regardless of the Participant's
termination from employment.
Any distribution made under this Plan shall be made in
accordance with the minimum distribution requirements of Code Section
401(a)(9), including the incidental death benefits requirements under
Code Section 401(a)(9)(G) and the Treasury Regulations thereunder.
12.7 Transfer between Employing Companies. A transfer by a Participant
from one Employing Company to another Employing Company shall not affect his
participation in the Plan. A transfer by a Participant from an Employing Company
to an Affiliated Employer that is not an Employing Company shall not be deemed
to be a termination of employment with an Employing Company.
12.8 Distributions to Alternate Payees. If the Participant's Account
under the Plan shall become subject to any domestic relations order which (a) is
a qualified domestic relations order satisfying the requirements of Section
414(p) of the Code and (b) requires the immediate distribution in a single lump
sum of the entire portion of the Participant's Account required to be segregated
for the benefit of an alternate payee, then the entire interest of such
alternate payee shall be distributed in a single lump sum within ninety (90)
days following the Employing Company's notification to the Participant and the
alternate payee that the domestic relations order is qualified under Section
414(p) of the Code, or as soon as practicable thereafter. Such distribution to
an alternate payee shall be made even if the Participant has not separated from
the service of the Affiliated Employers. Any other distribution pursuant to a
qualified domestic relations order shall not be made earlier than the
Participant's termination of service, or his attainment of age fifty (50), if
earlier, and shall not commence later than the date the Participant's (or his
Beneficiary's) benefit payments otherwise commence. Such distribution to an
alternate payee shall be made only in a manner permitted under Articles XI or
XII of the Plan and only to the extent the Participant would be eligible for
such distribution option.
12.9 Requirement for Direct Rollovers. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit a Distributee's election
under this Article XII, a Distributee may elect, at the time and in the manner
prescribed by the Committee, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified by the
Distributee in a Direct Rollover.
12.10 Consent and Notice Requirements. If the value of the vested
portion of a Participant's Account derived from Employing Company and Employee
contributions exceeds $5,000 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 in writing within the ninety-day period ending
on the first day of the first period for which an amount is payable under this
Plan.
The Committee or its delegate 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
optional 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 distribution date.
Distributions may commence less than 30 days after the notice required
under Section 1.411(a)-11(c) of the Treasury Regulations is given, provided
that:
(a) the Committee informs the Participant that the Participant
has a right to a period of at least 30 days after receiving the notice
to consider the decision of whether or not to elect a distribution and
a particular distribution option, and
(b) the Participant, after receiving the notice,
affirmatively elects a distribution.
12.11 Form of Payment. All distributions under this Article XII shall
be made in the form of cash, provided that the person entitled to such
distribution may demand that all or a portion of any distribution which is
attributable to Common Stock be distributed in the form of Common Stock to the
extent of the whole number of shares in the Participant's Account, with a cash
adjustment for any fractional shares.
12.12 Partial Distribution upon Termination of Employment. If a
Participant's employment with the Affiliated Employers is terminated and such
Participant is deemed not to have separated from service within the meaning of
Code Section 401(k)(2)(B)(i)(I), such Participant, in addition to the withdrawal
options available under Article XI, shall be entitled to elect a lump sum
distribution of the entire balance to the credit of his Account less the amount
credited to his Elective Employer Contribution subaccount. The amounts credited
to his Elective Employer Contribution subaccount may be distributed in a lump
sum distribution at such time permitted pursuant to Code Section 401(k)(2)(B)(i)
and Section 4.4(c) hereof. Such lump sum distributions shall otherwise be
subject to this Article XII.
ARTICLE XIII
ADMINISTRATION OF THE PLAN
--------------------------
13.1 Membership of Committee. The Plan shall be administered by the
Committee, which shall consist of such individuals as may be appointed from time
to time by the Board of Directors or its delegate. The Committee may select a
Secretary (who may, but need not, be a member of the Committee) to keep its
records or to assist it in the discharge of its duties.
13.2 Acceptance and Resignation. Any person appointed to be a member of
the Committee shall signify his acceptance in writing to the Chairman of the
Committee. Any member of the Committee may resign by delivering his written
resignation to the Committee and such resignation shall become effective upon
delivery or upon any later date specified therein.
13.3 Transaction of Business. A majority of the members of the
Committee at the time in office shall constitute a quorum for the transaction of
business at any meeting. Any determination or action of the Committee may be
made or taken by a majority of the members present at any meeting thereof or
without a meeting by a resolution or written memorandum concurred in by a
majority of the members then in office.
13.4 Responsibilities in General. The Committee shall administer the
Plan and shall have the discretionary authority, power, and the duty to take all
actions and to make all decisions necessary or proper to carry out the Plan and
to control and manage the operation and administration of the Plan. The
Committee shall have the discretion to interpret the Plan, including any
ambiguities herein, and to determine the eligibility for benefits under the Plan
in its sole discretion. The determination of the Committee as to any question
involving the general administration and interpretation of the Plan shall be
final, conclusive, and binding on all persons, except as otherwise provided
herein or by law, and may be relied upon by the Company, all Employing
Companies, the Trustee, the Participants, and their Beneficiaries. Any
discretionary actions to be taken under the Plan by the Committee with respect
to Employees and Participants or with respect to benefits shall be uniform in
their nature and applicable to all persons similarly situated.
13.5 Committee as Named Fiduciary. For the purpose of compliance with
the provisions of ERISA, the Committee shall be deemed the administrator of the
Plan as the term "administrator" is defined in ERISA, and the Committee shall
be, with respect to the Plan, a named fiduciary as that term is defined in
ERISA. For the purpose of carrying out its duties, the Committee may, in its
discretion, allocate its responsibilities under the Plan among its members and
may, in its discretion, designate persons (in writing or otherwise) other than
members of the Committee to carry out such responsibilities of the Committee
under the Plan as it may see fit.
13.6 Rules for Plan Administration. The Committee may make and enforce
rules and regulations for the administration of the Plan consistent with the
provisions thereof and may prescribe the use of such forms or procedures as it
shall deem appropriate for the administration of the Plan.
13.7 Employment of Agents. The Committee may employ independent
qualified public accountants, as such term is defined in ERISA, who may be
accountants to the Company and any Affiliated Employer, legal counsel who may be
counsel to the Company and any Affiliated Employer, other specialists, and other
persons as the Committee deems necessary or desirable in connection with the
administration of the Plan. The Committee and any person to whom it may delegate
any duty or power in connection with the administration of the Plan, the Company
and the officers and directors thereof shall be entitled to rely conclusively
upon and shall be fully protected in any action omitted, taken, or suffered by
them in good faith in reliance upon any independent qualified public accountant,
counsel, or other specialist, or other person selected by the Committee, or in
reliance upon any tables, evaluations, certificates, opinions, or reports which
shall be furnished by any of them or by the Trustee.
13.8 Co-Fiduciaries. It is intended that to the maximum extent
permitted by ERISA, each person who is a fiduciary (as that term is defined in
ERISA) with respect to the Plan shall be responsible for the proper exercise of
his own powers, duties, responsibilities, and obligations under the Plan and the
Trust, as shall each person designated by any fiduciary to carry out any
fiduciary responsibilities with respect to the Plan or the Trust. No fiduciary
or other person to whom fiduciary responsibilities are allocated shall be liable
for any act or omission of any other fiduciary or of any other person delegated
to carry out any fiduciary or other responsibility under the Plan or the Trust.
13.9 General Records. The Committee shall maintain or cause to be
maintained an Account (and any separate subaccount) which accurately reflects
the interest of each Participant, as provided for in Section 9.1, and shall
maintain or cause to be maintained all necessary books of account and records
with respect to the administration of the Plan. The Committee shall mail or
cause to be mailed to Participants reports to be furnished to Participants in
accordance with the Plan or as may be required by ERISA. Any notices, reports,
or statements to be given, furnished, made, or delivered to a Participant shall
be deemed duly given, furnished, made, or delivered when addressed to the
Participant and delivered to the Participant in person or mailed by ordinary
mail to his address last communicated to the Committee (or its delegate) or of
his Employing Company.
13.10 Liability of the Committee. In administering the Plan, except as
may be prohibited by ERISA, neither the Committee nor any person to whom it may
delegate any duty or power in connection with administering the Plan shall be
liable for any action or failure to act except for its or his own gross
negligence or willful misconduct; nor for the payment of any amount under the
Plan; nor for any mistake of judgment made by him or on his behalf as a member
of the Committee; nor for any action, failure to act, or loss unless resulting
from his own gross negligence or willful misconduct; nor for the neglect,
omission, or wrongdoing of any other member of the Committee. No member of the
Committee shall be personally liable under any contract, agreement, bond, or
other instrument made or executed by him or on his behalf as a member of the
Committee.
13.11 Reimbursement of Expenses and Compensation of Committee. Members
of the Committee shall be reimbursed by the Company for expenses they may
individually or collectively incur in the performance of their duties. Each
member of the Committee who is a full-time employee of the Company or of any
Employing Company shall serve without compensation for his services as such
member; each other member of the Committee shall receive such compensation, if
any, for his services as the Board of Directors may fix from time to time.
13.12 Expenses of Plan and Trust Fund. The expenses of establishment
and administration of the Plan and the Trust Fund, including all fees of the
Trustee, auditors, and counsel, shall be paid by the Company or the Employing
Companies. Notwithstanding the foregoing, to the extent provided in the Trust
Agreement, certain administrative expenses may be paid from the Trust Fund
either directly or through reimbursement of the Company or the Employing
Companies. Any expenses directly related to the investments of the Trust Fund,
such as stock transfer taxes, brokerage commissions, or other charges incurred
in the acquisition or disposition of such investments, shall be paid from the
Trust Fund (or from the particular Investment Fund to which such fees or
expenses relate) and shall be deemed to be part of the cost of such securities
or deducted in computing the proceeds therefrom, as the case may be. Investment
management fees for the Investment Funds shall be paid from the particular
Investment Fund to which they relate either directly or through reimbursement of
the Company or the Employing Companies unless the Company or the Employing
Companies do not elect to receive reimbursement for payment of such expenses.
Taxes, if any, on any assets held or income received by the Trustee and transfer
taxes on the transfer of Common Stock from the Trustee to a Participant or his
Beneficiary shall be charged appropriately against the Accounts of Participants
as the Committee shall determine. Any expenses paid by the Company pursuant to
Section 13.11 and this section shall be subject to reimbursement by other
Employing Companies of their proportionate shares of such expenses as determined
by the Committee.
13.13 Responsibility for Funding Policy. The Committee shall have
responsibility for providing a procedure for establishing and carrying out a
funding policy and method for the Plan consistent with the objectives of the
Plan and the requirements of Title I of ERISA.
13.14 Management of Assets. The Committee shall not have responsibility
with respect to control or management of the assets of the Plan. The Trustee
shall have the sole responsibility for the administration of the assets of the
Plan as provided in the Trust Agreement, except to the extent that an investment
advisor (who qualifies as an Investment Manager as that term is defined in
ERISA) who may be appointed by the Committee shall have responsibility for the
management of the assets of the Plan, or some part thereof (including powers to
acquire and dispose of the assets of the Plan, or some part thereof).
13.15 Notice and Claims Procedures. Consistent with the requirements
of ERISA and the regulations thereunder of the Secretary of Labor from time to
time in effect, the Committee shall:
(a) provide adequate notice in writing to any Participant or
Beneficiary whose claim for benefits under the Plan has been denied,
setting forth specific reasons for such denial, written in a manner
calculated to be understood by such Participant or Beneficiary, and
(b) afford a reasonable opportunity to any Participant or
Beneficiary whose claim for benefits has been denied for a full and
fair review of the decision denying the claim.
13.16 Bonding. Unless otherwise determined by the Board of Directors or
required by law, no member of the Committee shall be required to give any bond
or other security in any jurisdiction.
13.17 Multiple Fiduciary Capacities. Any person or group of persons may
serve in more than one fiduciary capacity with respect to the Plan, and any
fiduciary with respect to the Plan may serve as a fiduciary with respect to the
Plan in addition to being an officer, employee, agent, or other representative
of a party in interest, as that term is defined in ERISA.
13.18 Change in Administrative Procedures. Notwithstanding any
provision in the Plan to the contrary, the Committee shall be authorized to take
whatever actions it deems necessary or appropriate in its discretion to
implement administrative procedures, including, but not limited to, suspending
plan participation (to the extent permitted by applicable law,) and suspending
changes in investment directions and fund transfers, even though otherwise
permitted or required under the Plan.
ARTICLE XIV
TRUSTEE OF THE PLAN
-------------------
14.1 Trustee. The Company has entered into a Trust Agreement with the
Trustee to hold the funds necessary to provide the benefits set forth in the
Plan. If the Board of Directors so determines, the Company may enter into a
Trust Agreement or Trust Agreements with additional trustees. Any Trust
Agreement may be amended by the Company from time to time in accordance with its
terms. Any Trust Agreement shall provide, among other things, that all funds
received by the Trustee thereunder will be held, administered, invested, and
distributed by the Trustee, and that no part of the corpus or income of the
Trust held by the Trustee shall be used for or diverted to purposes other than
for the exclusive benefit of Participants or their Beneficiaries, except as
otherwise provided in the Plan. Any Trust Agreement may also provide that the
investment and reinvestment of the Trust Fund, or any part thereof may be
carried out in accordance with directions given to the Trustee by any Investment
Manager or Investment Managers (as that term is defined in ERISA) who may be
appointed by the Committee. The Board of Directors may remove any Trustee or any
successor Trustee, and any Trustee or any successor Trustee may resign. Upon
removal or resignation of a Trustee, the Board of Directors shall appoint a
successor Trustee.
14.2 Purchase of Common Stock. As soon as practicable after receipt of
funds applicable to the purchase of Common Stock, the Trustee shall purchase
Common Stock or cause Common Stock to be purchased. Such Common Stock may be
purchased on the open market or by private purchase (including private purchases
directly from Southern Energy, Inc.); provided that (a) no private purchase may
be made at any price greater than the last sale price or highest current
independent bid price, whichever is higher, for Common Stock on the New York
Stock Exchange, plus an amount equal to the commission payable in a stock
exchange transaction; (b) if such private purchase shall be a purchase of Common
Stock directly from Southern Energy, Inc., no commission shall be paid with
respect thereto unless such commission satisfies the requirements of Prohibited
Transaction Class Exemption 75-1; and (c) the Trustee may purchase Common Stock
directly from Southern Energy, Inc. under the Southern Energy Investment Plan,
as from time to time amended, or under any other similar plan made available to
holders of record of shares of Common Stock which may be in effect from time to
time, at the purchase price provided for in such plan. Pending investment of
funds in Common Stock, the Trustee may hold in cash, and may temporarily invest
such funds in short-term United States obligations, other obligations guaranteed
by the United States Government, commercial paper, or certificates of deposit,
and if the Trustee so determines, may transfer such funds to money market funds
utilized by the Trustee for qualified employee benefit trusts.
14.3 Voting of Common Stock. Before each annual or special meeting of
shareholders of Southern Energy, Inc., there shall be sent to each Participant a
copy of the proxy soliciting material for the meeting, together with a form
requesting instructions to the Trustee on how to vote the shares of Common Stock
credited to such Participant's Account as of the record date of the Common
Stock. Upon receipt of such instructions by the Trustee or its designated agent,
the Trustee shall vote such Common Stock as instructed by the Participant. If a
Participant does not provide the Trustee or its designated agent with timely
voting instructions for the Trustee, the Committee or its delegate shall direct
the Trustee how to vote such Participant's shares. The Committee or its delegate
shall also direct the Trustee with respect to voting unallocated shares of
Common Stock, if any.
14.4 Voting of Other Investment Fund Shares. The voting of the shares
in any Investment Fund other than shares of Common Stock shall be determined
pursuant to Section 5 of the Trust Agreement. In the event certain shares in any
Investment Fund are not addressed in Section 5 of the Trust Agreement, the
Committee or its delegate shall direct the Trustee how to vote such shares.
14.5 Uninvested Amounts. The Trustee may keep uninvested an
amount of cash sufficient in its opinion to enable it to carry out the purposes
of the Plan.
14.6 Independent Accounting. The Board of Directors shall select
a firm of independent public Accountants to examine and report annually on the
financial position and the results of operation of the Trust forming a part of
the Plan.
ARTICLE XV
AMENDMENT AND TERMINATION OF THE PLAN
-------------------------------------
15.1 Amendment of the Plan. The Plan may be amended or modified by the
Board of Directors pursuant to its written resolutions at any time and from time
to time; provided, however, that no such amendment or modification shall make it
possible for any part of the corpus or income of the Trust Fund to be used for
or diverted to purposes other than for the exclusive benefit of Participants or
their Beneficiaries under the Plan, including such part as is required to pay
taxes and administration expenses of the Plan. The Plan may also be amended or
modified by the Committee (a) if such amendment or modification does not involve
a substantial increase in cost to any Employing Company, or (b) as may be
necessary, proper, or desirable in order to comply with laws or regulations
enacted or promulgated by any federal or state governmental authority and to
maintain the qualification of the Plan under Sections 401(a) and 501(a) of the
Code and the applicable provisions of ERISA.
No amendment to the Plan shall have the effect of decreasing a
Participant's vested interest in his Account, determined without regard to such
amendment, as of the later of the date such amendment is adopted or the date it
becomes effective. In addition, if the vesting schedule of the Plan is amended,
any Participant who has completed at least three (3) Years of Service and whose
vested interest is at any time adversely affected by such amendment may elect to
have his vested interest determined without regard to such amendment during the
election period defined under Section 411(a)(10) of the Code. Finally, no
amendment shall eliminate an optional form of benefit in violation of Code
Section 411(d)(6).
15.2 Termination of the Plan. It is the intention of the Employing
Companies to continue the Plan indefinitely. However, the Board of Directors
pursuant to its written resolutions may at any time and for any reason suspend
or terminate the Plan or suspend or discontinue the making of contributions of
all Participants and of contributions by all Employing Companies. Any Employing
Company may, by action of its board of directors and approval of the Board of
Directors, suspend or terminate the making of contributions of Participants in
the employ of such Employing Company and of contributions by such Employing
Company.
In the event of termination of the Plan or partial termination or upon
complete discontinuance of contributions under the Plan by all Employing
Companies or by any one Employing Company, the amount to the credit of the
Account of each Participant whose Employing Company shall be affected by such
termination or discontinuance shall be determined as of the next Valuation Date
and shall be distributed to him or his Beneficiary thereafter at such time or
times and in such nondiscriminatory manner as is determined by the Committee in
compliance with the restrictions on distributions set forth in Code Section
401(k).
15.3 Merger or Consolidation of the Plan. The Plan shall not be merged
or consolidated with nor shall any assets or liabilities thereof be transferred
to any other plan unless each Participant of the Plan would (if the Plan then
terminated) receive a benefit immediately after the merger, consolidation, or
transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately prior to the merger, consolidation, or transfer
(if the Plan had then terminated).
ARTICLE XVI
GENERAL PROVISIONS
------------------
16.1 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.
16.2 No Right of Assignment or Alienation. Except as may be otherwise
permitted or required by law, no right or interest in the Plan of any
Participant or Beneficiary and no distribution or payment under the Plan to any
Participant or Beneficiary shall be subject in any manner to anticipation,
alienation, sale, transfer (except by death), assignment (either at law or in
equity), pledge, encumbrance, charge, attachment, garnishment, levy, execution,
or other legal or equitable process, whether voluntary or involuntary, and any
attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber,
charge, attach, garnish, levy, or execute or enforce any other legal or
equitable process against the same shall be void, nor shall any such right,
interest, distribution, or payment be in any way liable for or subject to the
debts, contracts, liabilities, engagements, or torts of any person entitled to
such right, interest, distribution, or payment. If any Participant or
Beneficiary is adjudicated bankrupt or purports to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge any such right, interest,
distribution, or payment, voluntarily or involuntarily, or if any action shall
be taken which is in violation of the provisions of the immediately preceding
sentence, the Committee may hold or apply or cause to be held or applied such
right, interest, distribution, or payment or any part thereof to or for the
benefit of such Participant or Beneficiary in such manner as is in accordance
with applicable law. In addition, a Participant's benefits may be offset
pursuant to a judgment, order, or decree issued (or settlement agreement entered
into) if and to the extent that such offset is permissible or required under
Code Section 401(a)(13).
Notwithstanding the above, the Committee and the Trustee shall comply
with any domestic relations order (as defined in Section 414(p)(1)(B) of the
Code) which is a qualified domestic relations order satisfying the requirements
of Section 414(p) of the Code. The Committee shall establish procedures for (a)
notifying Participants and alternate payees who have or may have an interest in
benefits which are the subject of domestic relations orders, (b) determining
whether such domestic relations orders are qualified domestic relations orders
under Section 414(p) of the Code, and (c) distributing benefits which are
subject to qualified domestic relations orders.
16.3 Payment to Minors and Others. If the Committee determines that any
person entitled to a distribution or payment from the Trust Fund is an infant or
incompetent or is unable to care for his affairs by reason of physical or mental
disability, it may cause all distributions or payments thereafter becoming due
to such person to be made to any other person for his benefit, without
responsibility to follow the application of payments so made. Payments made
pursuant to this provision shall completely discharge the Company, the Trustee,
and the Committee with respect to the amounts so paid. No person shall have any
rights under the Plan with respect to the Trust Fund, or against the Trustee or
any Employing Company, except as specifically provided herein.
16.4 Source of Benefits. The Trust Fund established under the Plan
shall be the sole source of the payments or distributions to be made in
accordance with the Plan. No person shall have any rights under the Plan with
respect to the Trust Fund, or against the Trustee or any Employing Company,
except as specifically provided herein.
16.5 Unclaimed Benefits. If the Committee is unable, within five (5)
years after any distribution becomes payable to a Participant or Beneficiary, to
make or direct payment to the person entitled thereto because the identity or
whereabouts of such person cannot be ascertained, notwithstanding the mailing of
due notice to such person at his last known address as indicated by the records
of either the Committee or his Employing Company, then such benefit or
distribution will be disposed of as follows:
(a) If the whereabouts of the Participant is unknown to
the Committee, distribution will be made to the Participant's
Beneficiary or Beneficiaries.
Payment to such one or more persons shall completely discharge
the Company, the Trustee, and the Committee with respect to the amounts
so paid.
(b) If none of the persons described in (a) above, can be
located, then the benefit payable under the Plan shall be forfeited and
shall be applied to reduce future Employer Matching Contributions.
Notwithstanding the foregoing sentence, such benefit shall be
reinstated if a claim is made by the Participant or Beneficiary for the
forfeited benefit.
16.6 Governing Law. The provisions of the Plan and the Trust shall be
construed, administered, and enforced in accordance with the laws of the State
of Georgia, except to the extent such laws are preempted by the laws of the
United States.
IN WITNESS WHEREOF, the Company has caused this Southern Energy
Resources Bargaining Unit Employee Savings Plan effective as of December 19,
2000, to be executed this _______ day of December, 2000.
SOUTHERN ENERGY RESOURCES, INC.
By:__________________________________________
Its:_________________________________________
ATTEST:
By:__________________________________________________
Its:_________________________________________________
APPENDIX A - EMPLOYING COMPANIES
--------------------------------
The Employing Companies as of December 19, 2000 are:
Southern Energy Resources, Inc.
Southern Energy PJM Management, LLC
APPENDIX B - ELIGIBLE EMPLOYEES
-------------------------------
Subject to the additional requirements of Section 2.19 of the Plan, eligible
employees are as follows:
Employees of Southern Energy PJM Management, LLC
SCHEDULE A
PEPCO EMPLOYEES
Notwithstanding any provisions of this Plan to the contrary, the
provisions of this Schedule A shall apply to members of Local Union #1900 of the
International Brotherhood of Electrical Workers who (i) were employed by Potomac
Electric Power Company ("Pepco") immediately preceding, and hired by the Company
or an Affiliated Employer immediately following, the acquisition of all or
substantially all the assets of certain power generating facilities owned by
Pepco (the "Facilities") (the "Transferred Employees") or (ii) are hired by
Southern Energy PJM Management, LLC after the acquisition of the Facilities (the
"PJM Employees") (the Transferred Employees and the PJM Employees are
collectively referred to herein as the "Pepco Employees"). Notwithstanding the
foregoing, the term "Transferred Employees" shall not include any Employee who,
as of the date of acquisition of the Facilities (the "Pepco Effective Date"),
has given written notice to Pepco of his intent to retire from active employment
with Pepco, and who actually retires under the terms of the General Retirement
Plan for Employees of Potomac Electric Power Company on or before December 31,
2000; such Employees shall be deemed to be "PJM Employees" hereunder.
A.1 Hours of Service. For all purposes under the Plan, for Transferred
Employees only, Hours of Service shall include all hours of service credited
under the PEPCO Retirement Savings Plan for Bargaining Unit Employees (the
"Pepco Plan") to any Transferred Employee as of the Pepco Effective Date.
A.2 Years of Service. For all purposes under the Plan, for Transferred
Employees only, Years of Service shall include all years of service credited
under the Pepco Plan to any Transferred Employee as of the Pepco Effective Date.
A.3 Eligible Employees.
o Each Transferred Employee who was a participant in the
Pepco Plan on the Pepco Effective Date shall be eligible
to participate in the Plan as of the Pepco Effective Date.
o Each other Pepco Employee, except one who is classified
(in the sole discretion of the Company, pursuant to its
normal practices) as a "Temporary Employee," shall be
eligible to participate in the Plan as soon as
administratively practicable following the date he
completes his initial Hour of Service.
A.4 Rate of Elective Employer Contributions (Section 4.1).
o 1% to 19% of Compensation
A.5 Rate of Voluntary Participant Contributions (Section 4.6).
o 1% to 19% of Compensation
A.6 Rate of Employer Matching Contributions (Section 5.1).
o Pepco Employees are eligible to receive an Employer Matching Contribution
commencing upon participation. o The rate of Employer Matching Contributions for
Pepco Employees shall be equal to forty percent (40%) of Elective Employer
Contributions and Voluntary Participant Contributions during each payroll
period, but such Employer Matching Contributions shall not exceed six
percent (6%) of Compensation for such payroll period. If, as determined as of
the end of a Plan Year, a Pepco Employee received Employer Matching
Contributions of less than six percent (6%) of his Compensation for the Plan
Year because of limitations imposed on a payroll period basis, the Employing
Company may make an additional Employer Matching Contribution on behalf of
such Pepco Employee, not to exceed six percent (6%) of his Compensation for
the Plan Year.
A.7 Vesting of Employer Matching Contributions (Section 10.2). Pepco
Employees shall be one-hundred percent (100%) vested in the portion of their
Account attributable to Employer Matching Contributions.
A.8 Acceptance of Trust-to-Trust Transfer. The Plan may accept a
trust-to-trust transfer of an account from the Pepco Plan for each Participant
who is a Pepco Employee and who elects on a form acceptable to the Committee to
make such a transfer. Such account shall be known as the Participant's "Pepco
Transferred Account" and shall be subject to the requirements of this Schedule
A.
o The portion of the Transferred Account attributable to the
Pre-Tax Contribution Account, as that term is defined in
the Pepco Plan, shall be treated as Elective Employer
Contributions under this Plan.
o The portion of the Transferred Account attributable to the
After-Tax Contribution Account, as that term is defined in
the Pepco Plan, shall be treated as Voluntary Participant
Contributions under this Plan.
o The portion of the Transferred Account which is
attributable to the Matching Contribution Account, as that
term is defined in the Pepco Plan, shall be treated as
Employer Matching Contributions under this Plan, except
the Participant may direct the investment of such amounts
in accordance with Section 8.2 hereof, rather than Section
8.3 hereof and such Matching Contribution Account shall be
one-hundred percent (100%) vested.
o The portion of the Transferred Account which is
attributable to the Rollover Contribution Account, as that
term is defined in the Pepco Plan, shall be treated as
Rollover Contributions under this Plan.
A.9 In-Service Withdrawals of Employer Matching Contributions. In
determining the ability of a Participant who is a Transferred Employee to
withdraw Employer Matching Contributions under Section 11.1(a)(4) of the Plan, a
Participant shall be given credit for any participation in the Pepco Plan.
A.10 Sunset of Transferred Pepco Stock. Any Investment Fund containing
common stock of Pepco, which is transferred to this Plan pursuant to the
provisions of Section 8.8, will be eliminated by the Committee as of the date
which is five (5) years following the Pepco Effective Date. Any Pepco common
stock which remains in a Pepco Employee's Investment Fund on such date shall be
reinvested as determined by the Committee.
A.11 Loans from Pepco Transferred Accounts. Any loans which were made
to Pepco Employees pursuant to the terms of the Pepco Plan from funds under a
Transferred Account will be transferred to this Plan and will become loans under
this Plan, subject to the terms of Section 11.7. The number of loans so
transferred shall not exceed eight (8). The transfer of such loans, and the
terms and conditions thereof, shall be made in accordance with the procedures
established by the Committee.
Bargaining Unit Employee Savings Plan - Southern Energy Resources
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