MIRANT CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1. PURPOSE AND EFFECTIVE DATE.............................................................................1
ARTICLE 2. DEFINITIONS............................................................................................1
ARTICLE 3. ADMINISTRATION.........................................................................................3
ARTICLE 4. NUMBER OF SHARES.......................................................................................4
ARTICLE 5. ELIGIBILITY REQUIREMENTS...............................................................................5
ARTICLE 6. ENROLLMENT.............................................................................................5
ARTICLE 7. GRANT OF OPTIONS ON ENROLLMENT.........................................................................5
ARTICLE 8. PAYMENT................................................................................................6
ARTICLE 9. PURCHASE OF SHARES.....................................................................................6
ARTICLE 10. WITHDRAWAL FROM THE PLAN,
TERMINATION OF EMPLOYMENT, AND LEAVE OF ABSENCE.......................................................7
ARTICLE 11. DESIGNATION OF BENEFICIARY............................................................................8
ARTICLE 12. MISCELLANEOUS.........................................................................................9
</TABLE>
i
<PAGE>
MIRANT CORPORATION EMPLOYEE STOCK PURCHASE PLAN
ARTICLE 1. PURPOSE AND EFFECTIVE DATE
1.1 This Plan was originally adopted on ________, 2000 by the Board of
Directors of the Mirant Corporation (the "Company"), formerly know as Southern
Energy, Inc. The Plan is hereby amended and restated to change the name of the
Plan to the Mirant Corporation Employee Stock Purchase Plan (the "Plan"). The
purpose of the Plan is to provide an opportunity for employees of the Company to
purchase shares of common stock of the Company in a way which is both convenient
and on a basis more favorable than would otherwise be available. The Company
believes that employee participation in ownership of the Company on this basis
will be to the mutual benefit of both the employee and the Company. It is the
intent of the Company to have the Plan qualify as an "employee stock purchase
plan" under Section 423 of the Internal Revenue Code. The provisions of the Plan
shall be construed to extend and limit participation in a manner consistent with
the requirements of Section 423 of the Internal Revenue Code.
1.2 It is intended that an initial Offering Period and Purchase Period
will begin on the IPO Date and exist for such period as designated by the
Committee prior to the IPO Date. Thereafter, it is intended that any future
Offering Periods and Purchase Periods will commence, if at all, at such times
designated by the Committee.
1.3 The Plan shall be effective on the IPO Date (the "Effective Date").
The Plan shall remain in effect in accordance with Section 12.7 of the Plan.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings
set forth below, and when the meaning is intended, the initial letter of the
word shall be capitalized:
2.1 "Account" means a recordkeeping account maintained for a
Participant to which Participant contributions and payroll
deductions, if applicable, shall be credited.
2.2 "Board" means the Board of Directors of the Company.
2.3 "Code" means the Internal Revenue Code of 1986, as amended.
2.4 "Company" means Mirant Corporation, a Delaware corporation.
2.5 "Cut-off Date" means the date established by the Committee
from time to time by which enrollment forms must be received
prior to an Enrollment Date.
<PAGE>
2.6 "Effective Date" shall have the meaning ascribed to it in
Section 1.3 hereof.
2.7 "Eligible Employee" means an Employee eligible to participate
in the Plan in accordance with Section 5.
2.8 "Employee" means any active employee of the Company or any
active employee of any company in the Participating Company
Group.
2.9 "Enrollment Date" means the first Trading Day of an Offering
Period.
2.10 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2.11 "Fair Market Value" means, as of any applicable date, the
opening sale price on the principal securities exchange on
which the Shares are traded or, if there is no such sale on
the relevant date, then on the last previous day on which a
sale was reported.
2.12 "Grant Date" means a date on which an Eligible Employee is
granted an option under the Plan pursuant to Section 7.
2.13 "Grant Price" means the Fair Market Value of a Share on the
Grant Date for such option.
2.14 "IPO Date" shall mean the first day on which Shares are
publicly traded on the New York Stock Exchange.
2.15 "Offering Period" means the period beginning on the IPO Date
and ending on the date designated by the Committee and each
period, if any, thereafter designated by the Committee;
provided, that each period shall, in no event end later than:
(i) five (5) years from the date the option is exercised if
the Purchase Price is to be not less than eighty-five percent
(85%) of the Fair Market Value of the Shares on the Purchase
Date; or (ii) otherwise, twenty-seven (27) months from the
Grant Date. The Offering Period may but need not be the same
as the Purchase Period, as determined by the Committee.
2.16 "Participant" means an Eligible Employee who has enrolled in
the Plan pursuant to Section 6.
2.17 "Participating Company Group" means a Subsidiary which has
been designated by the Committee in accordance with Section
3.2 of the Plan as covered by the Plan.
2.18 "Purchase Date" with respect to a Purchase Period means the
last Trading Day in such Purchase Period.
2
<PAGE>
2.19 "Purchase Date Price" means the Fair Market Value of a Share
on the applicable Purchase Date.
2.20 "Purchase Period" means the period beginning on the IPO Date
and ending on the date designated by the Committee and each
period, if any, thereafter designated by the Committee;
provided, that each period shall, in no event end later than:
(i) five (5) years from the date the option is exercised if
the Purchase Price is to be not less than eighty-five percent
(85%) of the Fair Market Value of the Shares on the Purchase
Date; or (ii) otherwise, twenty-seven (27) months from the
Grant Date.
2.21 "Purchase Price" means the price designated by the Committee,
at which each Share may be purchased under any option, but in
no event less than eighty-five percent (85%) of the lesser of:
(a) The Grant Price, as defined in Section 2.13;
and
(b) The Purchase Date Price, as defined in
Section 2.19.
2.22 "Retirement" or "Retire" means a termination of (or to
terminate) employment with the Company and its subsidiaries
after qualifying for retirement under any applicable
retirement plan of the Company or any company in the
Participating Company Group, as determined by the Committee.
2.23 "Rule 16b-3" means Rule 16b-3 under the Exchange Act.
2.24 "Shares" means shares of the Company's common stock.
2.25 "Subsidiary" means any corporation in an unbroken chain of
corporations beginning with the Company if, as of the
applicable Enrollment Date, each of the corporations other
than the last corporation in the chain owns stock possessing
fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in
the chain.
2.26 "Trading Day" means any day the New York Stock Exchange is
open for trading.
ARTICLE 3. ADMINISTRATION
3.1 The Plan shall be administered by a Committee appointed by the
Board (the "Committee"). The members of the Committee shall be appointed from
time to time by, and shall serve at the discretion of the Board. The Committee
shall have the authority to delegate administrative duties to officers,
directors or employees of the Company.
3.2 The Committee shall have the power, subject to and within the
limits of the express provisions of the Plan, to construe and interpret the Plan
and options granted under it; to
3
<PAGE>
establish, amend, and revoke rules and regulations for administration of the
Plan (including, without limitation, the determination and change of Offering
Periods, Purchase Periods and payment procedures and the establishment of the
exchange ratio applicable to amounts withheld in a currency other than U.S.
dollars); to determine all questions of policy and expediency that may arise in
the administration of the Plan to make any changes to the Plan or its operations
to reduce or eliminate any unfavorable accounting consequences to the extent
deemed appropriate by the Committee; and, generally, to exercise such powers and
perform such acts as the Committee deems necessary or expedient to promote the
best interests of the Company, including, but not limited to, designating from
time to time which Subsidiaries of the Company shall be part of the
Participating Company Group. The Committee's determinations as to the
interpretation and operation of this Plan shall be final and conclusive.
In exercising the powers described in the foregoing paragraph, the
Committee may adopt special or different rules for the operation of the Plan
including, but not limited to, rules which allow employees of any foreign
Subsidiary to participate in, and enjoy the tax benefits offered by, the Plan;
provided that such rules shall not result in any grantees of options having
different rights and/or privileges under the Plan in violation of Section 423 of
the Code nor otherwise cause the Plan to fail to satisfy the requirements of
Section 423 of the Code and the regulations thereunder.
3.3 The Plan provisions relating to the administration of the Plan may
be amended by the Committee from time to time as may be desirable to satisfy any
requirements of or under the federal securities and/or other applicable laws of
the United States, to obtain any exemption under such laws, or to reduce or
eliminate any unfavorable accounting consequences.
ARTICLE 4. NUMBER OF SHARES
4.1 4,000,000 Shares are reserved for sale and authorized for
issuance pursuant to the Plan. If any option granted under the Plan shall for
any reason terminate without having been exercised, the Shares not purchased
under such option shall again become available for the Plan.
4.2 In the event of any change in corporate capitalization such as a
stock split, or a corporate transaction such as any merger, consolidation,
separation, including a spin-off, or other distribution of stock or property of
the Company, any reorganization (whether or not such reorganization comes within
the definition of such term in Code Section 368) or any partial or complete
liquidation of the Company, the Committee may make such adjustment it deems
appropriate to prevent dilution or enlargement of rights in the number and class
of Shares which may be delivered under Section 4.1, in the number, class of
and/or price of Shares available for purchase under the Plan and in the number
of Shares which an Employee is entitled to purchase and any other adjustments it
deems appropriate. Without limiting the Committee's authority under this Plan,
in the event of any transaction, the Committee may elect to have the options
hereunder assumed or such options substituted by a successor entity, to
terminate all outstanding options either prior to their expiration or upon
completion of the purchase of Shares on the next Purchase Date, to establish an
early Purchase Date for an existing Offering Period, or to take such other
action deemed appropriate by the Committee.
4
<PAGE>
ARTICLE 5. ELIGIBILITY REQUIREMENTS
5.1 Except as provided in Section 5.2, each Employee shall become
eligible to participate in the Plan in accordance with Section 6 on the first
Enrollment Date on or following the later of (a) the date such individual
becomes an Employee; or (b) the Effective Date. Participation in the Plan is
entirely voluntary.
5.2 The following Employees are not eligible to participate in the
Plan:
(a) Employees who, immediately upon purchasing Shares
under the Plan, would own directly or indirectly, or
hold options or rights to acquire, an aggregate of
five percent (5%) or more of the total combined
voting power or value of all outstanding shares of
all classes of stock of the Company or any Subsidiary
(and for purposes of this paragraph, the rules of
Section 424(d) of the Code shall apply, and stock
which the Employee may purchase under outstanding
options shall be treated as stock owned by the
Employee);
(b) Employees whose customary employment is for not more
than five (5) months in any calendar year; and
(c) Employees whose customary employment is twenty (20)
hours or less per week.
ARTICLE 6. ENROLLMENT
All Eligible Employees as of the Effective Date shall be deemed
enrolled in the Plan with respect to the Offering Period beginning on the IPO
Date. Thereafter, any Eligible Employee may enroll in the Plan for any future
Offering Period by completing and signing an enrollment election form or by such
other means as the Committee shall prescribe and submitting such enrollment
election to the Company or a member of the Participating Company Group in
accordance with procedures established by the Committee on or before the Cut-Off
Date with respect to such Offering Period.
ARTICLE 7. GRANT OF OPTIONS ON ENROLLMENT
7.1 Enrollment by an Eligible Employee in the Plan as of an Enrollment
Date will constitute the grant by the Company to such Participant of an option
on such Enrollment Date to purchase Shares from the Company pursuant to the
Plan.
7.2 An option granted to a Participant pursuant to this Plan shall
expire, if not terminated for any reason first, on the earliest to occur of (a)
the end of the Offering Period in which such option was granted; (b) the
completion of the purchase of Shares under the option
5
<PAGE>
under Section 9; or (c) the date on which participation of such Participant in
the Plan terminates for any reason.
7.3 An option granted to a Participant under the Plan shall give the
Participant a right to purchase on a Purchase Date the largest number of whole
or fractional Shares, as designated by the Committee, which the funds
accumulated in the Participant's Account as of such Purchase Date will purchase
at the applicable Purchase Price; provided, however, that the Committee may, in
its discretion, limit the number of Shares purchased by each Participant in any
Purchase Period.
Notwithstanding anything to the contrary herein, no Employee shall be
granted an option under the Plan (or any other plan of the Company or a
Subsidiary intended to qualify under Section 423 of the Code) which would permit
the Employee to purchase Shares under the Plan (and such other plan) in any
calendar year with a Fair Market Value (determined at the time such option is
granted) in excess of $25,000.
ARTICLE 8. PAYMENT
The Committee may designate the time and manner for payment of Shares
to be purchased during the Purchase Period, including, but not limited to,
payment by each Participant in cash or by certified check on a date designated
by the Committee prior to the Purchase Date, or through payroll deductions, the
terms and conditions of which are designated by the Committee. Payment amounts
shall be credited to a Participant's Account under this Plan. All payment
amounts may be used by the Company for any purpose and the Company shall have no
obligation to segregate such funds. No interest accrues on payments by
Participants.
ARTICLE 9. PURCHASE OF SHARES
9.1 Any option held by the Participant which was granted under this
Plan and which remains outstanding as of a Purchase Date shall be deemed to have
been exercised on such Purchase Date for the number of whole or fractional
Shares, as designated by the Committee, that the funds accumulated in the
Participant's Account as of the Purchase Date will purchase at the applicable
Purchase Price (but not in excess of the number of Shares for which options have
been granted to the Participant pursuant to Section 7.3). Options for other
Shares for which options have been granted which are not purchased on the last
Purchase Date during the Offering Period shall terminate.
9.2 If, after a Participant's exercise of an option under Section 9.1,
an amount remains credited to the Participant's Account as of a Purchase Date,
then (a) if no further Purchase Periods are scheduled in the same Offering
Period, such remaining amount shall be distributed to the Participant as soon as
administratively feasible, or (b) if another Purchase Period is scheduled in the
same Offering Period, such amount shall be carried forward in the Account for
application to the purchase of Shares on the next following Purchase Date.
Notwithstanding the foregoing, if such remaining amount relates solely to the
exercise price for a fractional Share, such remaining
6
<PAGE>
amount may be carried forward to the Employee's Account for the next Offering
Period in which the Employee is enrolled or shall, at the discretion of the
Committee or the request of the Employee, be distributed to the Participant as
soon as administratively feasible.
9.3 If Shares are purchased by a Participant pursuant to Section 9.1,
then, within a reasonable time after the Purchase Date, the Company shall
deliver or cause to be delivered to the Participant a certificate or
certificates for the whole number of Shares purchased by the Participant unless
the Company has made arrangements to have the Shares held at a bank or other
appropriate institution in noncertificated form. If any law or applicable
regulation of the Securities and Exchange Commission or other body having
jurisdiction shall require that the Company or the Participant take any action
in connection with the Shares being purchased under the option, delivery of the
certificate or certificates for such Shares shall be postponed until the
necessary action shall have been completed, which action shall be taken by the
Company at its own expense, without unreasonable delay. Certificates delivered
pursuant to this Section 9.3 shall be registered in the name of the Participant
or, if the Participant so elects, in the names of the Participant and his or her
spouse, as joint tenants with rights of survivorship, or as spousal community
property, or in certain forms of trust approved by the Committee, to the extent
permitted by law.
9.4 In the case of Participants employed by a member of the
Participating Company Group, the Committee may provide for Shares to be sold
through the Subsidiary to such Participants, to the extent consistent with
Section 423 of the Code.
9.5 If the total number of Shares for which options are or could be
exercised on any Purchase Date in accordance with this Section 9, when
aggregated with all Shares for which options have been previously exercised
under this Plan, exceeds the maximum number of Shares reserved in Section 4.1,
the Company shall allocate the Shares available for delivery and distribution in
the ratio that the balance in each Participant's Account bears to the aggregate
balances of all Participants' Accounts, and the remaining balance of the amount
credited to the Account of each Participant under the Plan shall be returned to
him or her as promptly as possible.
9.6 If a Participant or former Participant sells, transfers, or
otherwise makes a disposition of Shares purchased pursuant to an option granted
under the Plan within the longer of (i) two (2) years after the date such option
is granted, or (ii) one (1) year after the date such Shares were transferred to
the Participant, and if such Participant or former Participant is subject to
United States federal income tax, then such Participant or former Participant
shall notify the Company or a member of the Participating Company Group in
writing of such sale, transfer or other disposition within ten (10) days of the
consummation of such sale, transfer, or other disposition.
ARTICLE 10. WITHDRAWAL FROM THE PLAN, TERMINATION OF EMPLOYMENT, AND LEAVE OF
ABSENCE
7
<PAGE>
10.1 WITHDRAWAL FROM THE PLAN. A Participant may withdraw from the Plan
in full (but not in part) during any Purchase Period by delivering a notice of
withdrawal to the Company or a member of the Participating Company Group (in a
manner prescribed by the Committee) at any time up to but not including the
fifteen (15) days prior to the Purchase Date next following the date such notice
of withdrawal is delivered, or at such shorter time in advance of such Purchase
Date as the Committee may permit. If notice of withdrawal is timely received,
all funds then accumulated in the Participant's Account shall not be used to
purchase Shares, but shall instead be distributed to the Participant as soon as
administratively feasible. An Employee who has withdrawn during a Purchase
Period may not return funds to the Company or a member of the Participating
Company Group during the same Purchase Period and require the Company or member
of the Participating Company Group to apply those funds to the purchase of
Shares. Any Eligible Employee who has withdrawn from the Plan may, however,
re-enroll in the Plan on the next subsequent Enrollment Date, if any.
10.2 TERMINATION OF EMPLOYMENT. Participation in the Plan terminates
immediately when a Participant ceases to be employed by the Company or a member
of the Participating Company Group for any reason whatsoever or otherwise ceases
to be an Eligible Employee, and such terminated Participant's outstanding
options shall thereupon terminate. As soon as administratively feasible after
termination of participation, the Company or a member of the Participating
Company Group shall pay to the Participant or his or her beneficiary or legal
representative any amounts accumulated in the Participant's Account at the time
of termination of participation. Notwithstanding anything to the contrary
herein, if a Participant ceases to be an Eligible Employee by reason of
Retirement, death, or any other reason contemplated in Section 5.2 hereof and
the Purchase Date is within three (3) months of the date the Participant ceases
to be an Eligible Employee, the Participant (or his or her designated
beneficiary, as applicable) shall have the right, upon ceasing to be an Eligible
Employee and in accordance with procedures prescribed by the Committee, to elect
to continue to participate in the Plan in accordance with Section 10.1 through
the end of the Purchase Period.
10.3 LEAVE OF ABSENCE. If a Participant takes a leave of absence
without terminating employment, such Participant shall have the right, at the
commencement of the leave of absence and in accordance with procedures
prescribed by the Committee, to elect to withdraw from the Plan in accordance
with Section 10.1. To the extent determined by the Committee or required by
Section 423 of the Code, certain leaves of absence may be treated as cessations
of employment for purposes of the Plan.
ARTICLE 11. DESIGNATION OF BENEFICIARY
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom the amount in his or her Account is to be paid in case of his or her death
before he or she receives any or all of such benefit. Each such designation
shall revoke all prior designations by the same Participant, shall be in a form
prescribed by the Committee, and will be effective only when filed by the
Participant in writing with the Committee during the Participant's lifetime. In
the absence of any such designation, any Account balance remaining unpaid at the
Participant's death shall be paid to the Participant's estate.
8
<PAGE>
ARTICLE 12. MISCELLANEOUS
12.1 RESTRICTIONS ON TRANSFER. Options granted under the Plan to a
Participant may not be exercised during the Participant's lifetime other than by
the Participant. Neither amounts credited to a Participant's Account nor any
rights with respect to the exercise of an option or to receive stock under the
Plan may be assigned, transferred, pledged, or otherwise disposed of in any way
by the Participant other than by will or the laws of descent and distribution.
Any such attempted assignment, transfer, pledge, or other disposition shall be
without effect, except that the Company may treat such act as an election to
withdraw from the Plan in accordance with Section 10.1.
12.2 ADMINISTRATIVE ASSISTANCE. If the Committee in its discretion so
elects, it may retain a brokerage firm, bank, or other financial institution to
assist in the purchase of Shares, delivery of reports, or other administrative
aspects of the Plan. If the Committee so elects, each Participant shall (unless
prohibited by applicable law) be deemed upon enrollment in the Plan to have
authorized the establishment of an account on his or her behalf at such
institution. Shares purchased by a Participant under the Plan shall be held in
the Account in the Participant's name, or if the Participant so indicates in the
enrollment form, in the Participant's name together with the name of his or her
spouse in joint tenancy with right of survivorship or spousal community
property, or in certain forms of trust approved by the Committee.
12.3 COSTS. All costs and expenses incurred in administering the Plan
shall be paid by the Company, except that any stamp duties, transfer taxes, and
any brokerage fees applicable to participation in the Plan may be charged to the
Account of such Participant by the Company.
12.4 WITHHOLDING. The Company or any member of the Participating
Company Group shall have the power and the right to deduct or withhold, or
require a Participant to remit to the Company or any member of the Participating
Company Group, an amount sufficient to satisfy Federal, state and local taxes,
domestic or foreign, required by law or regulation to be withheld with respect
to any taxable event arising as a result of this Plan.
12.5 EQUAL RIGHTS AND PRIVILEGES. All Eligible Employees shall have
equal rights and privileges with respect to the Plan so that the Plan qualifies
as an "employee stock purchase plan" within the meaning of Section 423 or any
successor provision of the Code and the related regulations. Notwithstanding the
express terms of the Plan, any provision of the Plan which is inconsistent with
Section 423 or any successor provision of the Code shall without further act or
amendment by the Company or the Board be reformed to comply with the
requirements of Section 423 of the Code. This Section 12.5 shall take precedence
over all other provisions in the Plan.
12.6 APPLICABLE LAW. The Plan shall be governed by the substantive
laws (excluding the conflict of laws rules) of the State of Delaware.
12.7 AMENDMENT AND TERMINATION. The Board may amend, alter, or
terminate the Plan at any time; provided, however, that (1) the Plan may not be
amended in a
9
<PAGE>
way which will cause rights issued under the Plan to fail to meet the
requirements of Section 423 of the Code; and (2) no amendment which would amend
or modify the Plan in a manner requiring stockholder approval under Section 423
of the Code or the requirements of any securities exchange on which the Shares
are traded shall be effective unless such stockholder approval is obtained. In
addition, the Committee may amend the Plan as provided in Section 3.3, subject
to the conditions set forth therein and in this Section 12.7.
If the Plan is terminated, the Board or Committee may elect to
terminate all outstanding options either prior to their expiration or upon
completion of the purchase of Shares on the next Purchase Date or an earlier
Purchase Date as may be specified by the Committee, or may elect to permit
options to expire in accordance with their terms (and participation to continue
through such expiration dates). If the options are terminated prior to
expiration, all funds accumulated in Participants' Accounts as of the date the
options are terminated shall be returned to the Participants as soon as
administratively feasible.
12.8 NO RIGHT OF EMPLOYMENT. Neither the grant nor the exercise of any
rights to purchase Shares under this Plan nor anything in this Plan shall impose
upon the Company or a member of the Participating Company Group any obligation
to employ or continue to employ any Employee. The right of the Company or a
member of the Participating Company Group to terminate any Employee shall not be
diminished or affected because any rights to purchase Shares have been granted
to such Employee.
12.9 RIGHTS AS SHAREHOLDER. No Participant shall have any rights as
shareholder unless and until Shares have been issued to him or her.
12.10 GOVERNMENTAL REGULATION. The Company's obligation to sell and
deliver Shares under this Plan is subject to the approval of any governmental
authority required in connection with the authorization, issuance, or sale of
such Shares.
12.11 GENDER. When used herein, masculine terms shall be deemed to
include the feminine, except when the context indicates to the contrary.
12.12 CONDITION FOR PARTICIPATION. As a condition to participation in
the Plan, Eligible Employees agree to be bound by the terms of the Plan
(including, without limitation, the notification requirements of Section 9.6)
and the determinations of the Committee.
Executed this 2nd day of April, 2001.
10
<PAGE>
EXHIBIT 10.23
MIRANT SERVICES
EMPLOYEE SAVINGS PLAN
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I - PURPOSE...............................................................................................1
ARTICLE II - DEFINITIONS..........................................................................................1
2.1 "Account" .................................................................................................1
2.2 "Actual Contribution Percentage Test" .....................................................................1
2.3 "Actual Deferral Percentage" ..............................................................................2
2.4 "Actual Deferral Percentage Test" .........................................................................2
2.5 "Affiliated Employer" .....................................................................................2
2.6 "Aggregate Account" .......................................................................................2
2.7 "Aggregation Group" .......................................................................................2
2.8 "Annual Addition" .........................................................................................3
2.9 "Average Actual Deferral Percentage" ......................................................................3
2.10 "Average Contribution Percentage" ........................................................................3
2.11 "Beneficiary" ............................................................................................3
2.12 "Board of Managers" ......................................................................................3
2.13 "Break-in-Service Date" ..................................................................................3
2.14 "Code" ...................................................................................................3
2.15 "Committee" ..............................................................................................4
2.16 "Common Stock" ...........................................................................................4
2.17 "Company" ................................................................................................4
2.18 "Compensation" ...........................................................................................4
2.19 "Contribution Percentage" ................................................................................4
2.20 "Determination Date" .....................................................................................4
2.21 "Determination Year" .....................................................................................5
2.22 "Direct Rollover" ........................................................................................5
2.23 "Discretionary Profit Sharing Contribution" ..............................................................5
2.24 "Distributee" ............................................................................................5
2.25 "Early Retirement Date" ..................................................................................5
2.26 "Elective Employer Contribution" .........................................................................5
2.27 "Eligible Employee" ......................................................................................5
2.28 "Eligible Participant" ...................................................................................6
2.29 "Eligible Retirement Plan" ...............................................................................6
2.30 "Eligible Rollover Distribution" .........................................................................7
2.31 "Employee" ...............................................................................................7
2.32 "Employer Matching Contribution" .........................................................................7
2.33 "Employing Company" ......................................................................................7
2.34 "Enrollment Date" ........................................................................................7
2.35 "ERISA" ..................................................................................................7
2.36 "Excess Aggregate Contributions" .........................................................................7
2.37 "Excess Deferral Amount" .................................................................................8
2.38 "Excess Deferral Contributions" ..........................................................................8
2.39 "Fixed Profit Sharing Contribution" ......................................................................8
2.40 "Forfeiture" .............................................................................................8
2.41 "Highly Compensated Employee" ............................................................................8
2.42 "Hour of Service" ........................................................................................9
2.43 "Investment Fund" ........................................................................................9
2.44 "Key Employee" ...........................................................................................9
2.45 "Limitation Year" ........................................................................................9
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
2.46 "Look-Back Year" .........................................................................................9
2.47 "Non-Highly Compensated Employee" ........................................................................9
2.48 "Normal Retirement Date" .................................................................................9
2.49 "One-Year Break in Service" ..............................................................................9
2.50 "Participant" ............................................................................................9
2.51 "Permissive Aggregation Group" ...........................................................................9
2.52 "Plan" ...................................................................................................9
2.53 "Plan Year" .............................................................................................10
2.54 "Present Value of Accrued Retirement Income" ............................................................10
2.55 "Required Aggregation Group" ............................................................................10
2.56 "Rollover Contribution" .................................................................................10
2.57 "SCEM" ..................................................................................................10
2.58 "SCEM Plan" .............................................................................................10
2.59 "Southern" ..............................................................................................10
2.60 "Southern Affiliate" ....................................................................................10
2.61 "Southern PCP" ..........................................................................................10
2.62 "Southern ESOP" .........................................................................................10
2.63 "Southern ESP" ..........................................................................................10
2.64 "Southern Plans" ........................................................................................11
2.65 "Southern Stock" ........................................................................................11
2.66 "Southern Stock Fund" ...................................................................................11
2.67 "Super-Top-Heavy Group" .................................................................................11
2.68 "Surviving Spouse" ......................................................................................11
2.69 "Suspense Account" ......................................................................................11
2.70 "Top-Heavy Group" .......................................................................................11
2.71 "Trust" or "Trust Fund" .................................................................................11
2.72 "Trust Agreement" .......................................................................................11
2.73 "Trustee" ...............................................................................................12
2.74 "Valuation Date" ........................................................................................12
2.75 "Voluntary Participant Contribution" ....................................................................12
2.76 "Year of Service" .......................................................................................12
ARTICLE III - PARTICIPATION......................................................................................13
3.1 Eligibility Requirements..................................................................................13
3.2 Participation upon Reemployment...........................................................................13
3.3 Change in Eligibility.....................................................................................13
3.4 Loss of Eligible Employee Status..........................................................................13
3.5 Rollovers from Other Plans................................................................................13
3.6 Military Leave............................................................................................14
3.7 Former Commonwealth Edison of Indiana Employees...........................................................14
3.8 Former Commonwealth Energy System Employees...............................................................14
3.9 Former Orange and Rockland Utilities, Inc. Employees......................................................15
3.10 Former Pacific Gas & Electric Employees..................................................................15
ARTICLE IV - ELECTIVE EMPLOYER CONTRIBUTIONS AND VOLUNTARY PARTICIPANT CONTRIBUTIONS.............................16
4.1 Elective Employer Contributions...........................................................................16
4.2 Maximum Amount of Elective Employer Contributions.........................................................16
4.3 Distribution of Excess Deferral Amounts...................................................................16
4.4 Additional Rules Regarding Elective Employer Contributions................................................17
4.5 Section 401(k) Nondiscrimination Tests....................................................................18
4.6 Voluntary Participant Contributions.......................................................................19
4.7 Manner and Time of Payment of Elective Employer Contributions and Voluntary Participant
Contributions.............................................................................................21
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
4.8 Change in Contribution Rate...............................................................................21
4.9 Change in Contribution Amount.............................................................................21
ARTICLE V - EMPLOYER CONTRIBUTIONS...............................................................................22
5.1 Amount of Employer Matching Contributions.................................................................22
5.2 Payment of Employer Matching Contributions................................................................22
5.3 Limitations on Employer Matching Contributions and Voluntary Participant Contributions....................22
5.4 Multiple Use Limitation...................................................................................25
5.5 Fixed Profit Sharing Contribution.........................................................................25
5.6 Discretionary Profit Sharing Contribution.................................................................25
5.7 Reversion of Employing Company Contributions..............................................................26
5.8 Correction of Prior Incorrect Allocations and Distributions...............................................26
ARTICLE VI - LIMITATIONS ON CONTRIBUTIONS........................................................................28
6.1 Section 415 Limitations...................................................................................28
6.2 Correction of Contributions in Excess of Section 415 Limits...............................................28
ARTICLE VII - SUSPENSION OF CONTRIBUTIONS........................................................................30
7.1 Suspension of Contributions...............................................................................30
7.2 Resumption of Contributions...............................................................................30
ARTICLE VIII - INVESTMENT OF CONTRIBUTIONS.......................................................................31
8.1 Investment Funds..........................................................................................31
8.2 Investment of Participant and Profit Sharing Contributions................................................31
8.3 Investment of Employer Matching Contributions.............................................................31
8.4 Investment of Earnings....................................................................................31
8.5 Transfer of Assets between Funds..........................................................................31
8.6 Change in Investment Direction............................................................................32
8.7 Section 404(c) Plan.......................................................................................32
8.8 Other Stock Investment Funds..............................................................................32
8.9 Southern Stock Fund.......................................................................................32
ARTICLE IX - MAINTENANCE AND VALUATION OF PARTICIPANTS' ACCOUNTS.................................................33
9.1 Establishment of Accounts.................................................................................33
9.2 Valuation of Investment Funds.............................................................................33
9.3 Rights in Investment Funds................................................................................33
ARTICLE X - VESTING..............................................................................................34
10.1 Full Vesting.............................................................................................34
10.2 Employer Matching Contributions and Profit Sharing Contributions.........................................34
10.3 Forfeitures..............................................................................................34
10.4 Buy-Back Procedures......................................................................................34
10.5 Deemed Cash-out and Deemed Buy-back......................................................................35
10.6 Vesting after One-Year Break in Service..................................................................35
10.7 Vesting at Normal Retirement Date........................................................................36
10.8 Vesting Upon Death.......................................................................................36
ARTICLE XI - WITHDRAWALS AND LOANS...............................................................................37
11.1 Withdrawals by Participants..............................................................................37
11.2 Notice of Withdrawal.....................................................................................38
11.3 Form of Withdrawal.......................................................................................38
11.4 Minimum Withdrawal.......................................................................................38
11.5 Source of Withdrawal.....................................................................................38
11.6 Requirement of Hardship..................................................................................38
11.7 Loans to Participants....................................................................................40
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
ARTICLE XII - DISTRIBUTION TO PARTICIPANTS.......................................................................43
12.1 Distribution upon Retirement.............................................................................43
12.2 Distribution upon Disability.............................................................................43
12.3 Distribution upon Death..................................................................................44
12.4 Designation of Beneficiary...............................................................................44
12.5 Distribution upon Termination of Employment..............................................................45
12.6 Commencement of Benefits.................................................................................45
12.7 Transfer between Employing Companies.....................................................................45
12.8 Distributions to Alternate Payees........................................................................46
12.9 Requirement for Direct Rollovers.........................................................................46
12.10 Consent and Notice Requirements.........................................................................47
12.11 Form of Payment.........................................................................................47
12.12 Partial Distribution upon Termination of Employment.....................................................47
ARTICLE XIII - ADMINISTRATION OF THE PLAN........................................................................48
13.1 Membership of Committee..................................................................................48
13.2 Acceptance and Resignation...............................................................................48
13.3 Transaction of Business..................................................................................48
13.4 Responsibilities in General..............................................................................48
13.5 Committee as Name Fiduciary..............................................................................48
13.6 Rules for Plan Administration............................................................................48
13.7 Employment of Agents.....................................................................................49
13.8 Co-Fiduciaries...........................................................................................49
13.9 General Records..........................................................................................49
13.10 Liability of the Committee..............................................................................49
13.11 Reimbursement of Expenses and Compensation of Committee.................................................50
13.12 Expenses of Plan and Trust Fund.........................................................................50
13.13 Responsibility for Funding Policy.......................................................................50
13.14 Management of Assets....................................................................................50
13.15 Notice and Claims Procedures............................................................................50
13.16 Bonding.................................................................................................51
13.17 Multiple Fiduciary Capacities...........................................................................51
13.18 Change in Administrative Procedures.....................................................................51
ARTICLE XIV - TRUSTEE OF THE PLAN................................................................................52
14.1 Trustee..................................................................................................52
14.2 Purchase of Common Stock.................................................................................52
14.3 Voting of Common Stock...................................................................................52
14.4 Voting of Other Investment Fund Shares...................................................................53
14.5 Uninvested Amounts.......................................................................................53
14.6 Independent Accounting...................................................................................53
ARTICLE XV - AMENDMENT AND TERMINATION OF THE PLAN...............................................................54
15.1 Amendment of the Plan....................................................................................54
15.2 Termination of the Plan..................................................................................54
15.3 Merger or Consolidation of the Plan......................................................................54
ARTICLE XVI - TOP-HEAVY REQUIREMENTS.............................................................................55
16.1 Top-Heavy Plan Requirements..............................................................................55
16.2 Determination of Top-Heavy Status........................................................................55
16.3 Minimum Allocation for Top-Heavy Plan Years..............................................................56
</TABLE>
iv
<PAGE>
<TABLE>
<S> <C>
ARTICLE XVII - GENERAL PROVISIONS................................................................................57
17.1 Plan Not an Employment Contract..........................................................................57
17.2 No Right of Assignment or Alienation.....................................................................57
17.3 Payment to Minors and Others.............................................................................57
17.4 Source of Benefits.......................................................................................58
17.5 Unclaimed Benefits.......................................................................................58
17.6 Governing Law............................................................................................58
ARTICLE XVIII - SPECIAL RULES FOR PARTICIPANTS FORMERLY EMPLOYED BY
POTOMAC ELECTRIC POWER COMPANY...................................................................59
18.1 Application..............................................................................................59
18.2 Hours of Service.........................................................................................59
18.3 Years of Service.........................................................................................59
18.4 Rate of Employer Matching Contributions..................................................................59
18.5 Acceptance of Trust-to-Trust Transfer....................................................................59
18.6 In-Service Withdrawals...................................................................................60
18.7 Sunset of Transferred Pepco Stock........................................................................60
18.8 Loans from Pepco Transferred Accounts....................................................................60
ARTICLE XIX - SPECIAL RULES FOR PARTICIPANTS FORMERLY EMPLOYED BY THE
SOUTHERN COMPANY...................................................................................61
19.1 Application..............................................................................................61
19.2 Hours of Service.........................................................................................61
19.3 Years of Service.........................................................................................61
19.4 Acceptance of Trust-to-Trust Transfer....................................................................61
19.5 In-Service Withdrawals...................................................................................62
19.6 Loans from Southern Transferred Accounts.................................................................62
ARTICLE XX - SPECIAL RULES FOR PARTICIPANTS FORMERLY EMPLOYED BY
SOUTHERN COMPANY ENERGY MARKETING, L.P..............................................................63
20.1 Application..............................................................................................63
20.2 Definitions..............................................................................................63
20.3 Hours of Service.........................................................................................63
20.4 Years of Service.........................................................................................63
20.5 Acceptance of Trust-to-Trust Transfer....................................................................63
20.6 In-Service Withdrawals...................................................................................64
20.7 Loans from SCEM Transferred Accounts.....................................................................66
20.8 Vastar Transferred Accounts..............................................................................66
20.9 In-Service Withdrawals from Vastar Savings and Capital Accumulation Transferred Accounts.................66
APPENDIX A - ELIGIBLE EMPLOYEES..................................................................................68
APPENDIX B - EMPLOYING COMPANIES.................................................................................69
</TABLE>
v
<PAGE>
MIRANT SERVICES
EMPLOYEE SAVINGS PLAN
Effective April 2, 2001
ARTICLE I
PURPOSE
The purpose of the Plan is to encourage employee thrift, to create
added employee interest in the affairs of Mirant Corporation, to provide a means
for becoming a shareholder in Mirant Corporation, 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. This Plan is an amendment and restatement of the Southern Energy
Resources Employee Savings Plan, originally effective December 19, 2000. This
amended and restated Plan incorporates the provisions of the Southern Company
Energy Marketing Employee Savings Plan (plan number 001), originally effective
January 1, 1998 and subsequently amended, which plan is hereby merged into this
Plan as of April 2, 2001. The SCEM Plan shall cease to be a separate plan
effective April 2, 2001.
ARTICLE II
DEFINITIONS
All references to articles, sections, subsections, and paragraphs shall
be to articles, sections, subsections, and paragraphs of this Plan unless
another reference is expressly set forth in this Plan. Any words used in the
masculine shall be read and be construed in the feminine where they would so
apply. Words in the singular shall be read and construed in the plural, and all
words in the plural shall be read and construed in the singular in all cases
where they would so apply.
For purposes of this Plan, unless otherwise required by the context,
the following terms shall have the meanings set forth opposite such terms:
2.1 "Account" shall mean the total amount credited to the account
of a Participant, as described in Section 9.1.
2.2 "Actual Contribution Percentage Test" shall mean the test
described in Section 5.3(a).
2.3 "Actual Deferral Percentage" shall mean the ratio (expressed
as a percentage) of Elective Employer Contributions on
<PAGE>
behalf of an Eligible Participant for the Plan Year to the Eligible
Participant's compensation for the Plan Year. For the purpose of determining an
Eligible Participant's Actual Deferral Percentage for a Plan Year, the Committee
may elect to consider an Eligible Participant's compensation for (a) the entire
Plan Year or (b) that portion of the Plan Year in which the Eligible Participant
was eligible to have Elective Employer Contributions made on his behalf,
provided that such election is applied uniformly to all Eligible Participants
for the Plan Year. The Actual Deferral Percentage of an Eligible Participant who
does not have Elective Employer Contributions made on his behalf shall be zero.
2.4 "Actual Deferral Percentage Test" shall mean the test
described in Section 4.5(a).
2.5 "Affiliated Employer" shall mean an Employing Company and (a) any
corporation which is a member of a controlled group of corporations (as defined
in Section 414(b) of the Code) which includes such Employing Company, (b) any
trade or business (whether or not incorporated) which is under common control
(as defined in Section 414(c) of the Code) with such Employing Company, (c) any
organization (whether or not incorporated) which is a member of an affiliated
service group (as defined in Section 414(m) of the Code) which includes such
Employing Company, and (d) any other entity required to be aggregated with such
Employing Company pursuant to regulations under Section 414(o) of the Code.
Notwithstanding the foregoing, for purposes of applying the limitations of
Article VI, the term Affiliated Employer shall be adjusted as required by Code
Section 415(h).
2.6 "Aggregate Account" shall mean with respect to a Participant
as of the Determination Date, the sum of the following:
(a) the Account balance of such Participant as of the
most recent valuation occurring within a twelve-month period ending on
the Determination Date;
(b) an adjustment for any contributions due as of the
Determination Date;
(c) any Plan distributions, including unrelated rollovers and
plan-to-plan transfers (ones which are both initiated by the Employee
and made from a plan maintained by one employer to a plan maintained by
another employer), but not related rollovers or plan-to-plan transfers
(ones either not initiated by the Employee or made to a plan maintained
by the same employer), made within the Plan Year that includes the
Determination Date or within the four preceding Plan Years, and
distributions made under a terminated plan which if it had not been
terminated would have been required to be included in an Aggregation
Group;
(d) any Employee contributions, whether voluntary or
mandatory; and
(e) related rollovers and plan-to-plan transfers to this
Plan.
2.7 "Aggregation Group" shall mean either a Required Aggregation
Group or a Permissive Aggregation Group.
2
<PAGE>
2.8 "Annual Addition" shall mean the amount allocated to a
Participant's Account and accounts under all defined contribution plans
maintained by the Affiliated Employers during a Limitation Year that constitutes
(a) Affiliated Employer contributions,
(b) Voluntary Participant Contributions,
(c) forfeitures, if any, allocated to a Participant's
Account or accounts under all defined contribution plans maintained by
the Affiliated Employers, and
(d) amounts described in Sections 415(l)(1) and
419A(d)(2) of the Code.
2.9 "Average Actual Deferral Percentage" shall mean the average
(expressed as a percentage) of the Actual Deferral Percentages of the Eligible
Participants in a group.
2.10 "Average Contribution Percentage" shall mean the average
(expressed as a percentage) of the Contribution Percentages of the Eligible
Participants in a group.
2.11 "Beneficiary" shall mean any person(s) who, or estate(s),
trust(s), or organization(s) which, in accordance with the provisions of Section
12.4, become entitled to receive benefits upon the death of a Participant.
2.12 "Board of Managers" shall mean the Board of Managers of the
Company.
2.13 "Break-in-Service Date" means the earlier of:
(a) the date on which an Employee terminates employment,
is discharged, retires, or dies; or
(b) the last day of an approved leave of absence
including any extension.
In the case of an individual who is absent from work for maternity or
paternity reasons, such individual shall not incur a Break-in-Service Date
earlier than the expiration of the second anniversary of the first date of such
absence; provided, however, that the twelve-consecutive-month period beginning
on the first anniversary of the first date of such absence shall not constitute
a Year of Service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (a) by reason of the pregnancy
of the Employee, (b) by reason of a birth of a child of the Employee, (c) by
reason of the placement of a child with the Employee in connection with the
adoption of such child by such Employee, or (d) for purposes of caring for such
child for a period beginning immediately following such birth or placement.
3
<PAGE>
2.14 "Code" shall mean the Internal Revenue Code of 1986, as amended,
or any successor statute, and the rulings and regulations promulgated
thereunder. In the event an amendment to the Code renumbers a section of the
Code referred to in this Plan, any such reference automatically shall become a
reference to such section as renumbered.
2.15 "Committee" shall mean the committee appointed pursuant to
Section 13.1 to serve as plan administrator.
2.16 "Common Stock" shall mean the common stock of Mirant
Corporation.
2.17 "Company" shall mean Mirant Services, LLC, and its successors.
2.18 "Compensation" shall mean the base salary or wages paid to a
Participant by an Affiliated Employer for the Plan Year during which he is
eligible to participate, including all amounts contributed by an Affiliated
Employer to a Code Section 125 cafeteria plan sponsored by an Affiliated
Employer, on behalf of a Participant pursuant to a salary reduction arrangement
under such plan, plus monthly shift and monthly seven-day schedule differentials
and before deduction of taxes, social security, etc. Compensation shall exclude
all awards under any incentive pay plans sponsored by an Affiliated Employer
includible as gross income, bonuses, regular overtime pay, any hourly shift
differentials, substitution pay, such amounts which are reimbursements to a
Participant paid by any Affiliated Employer including, but not limited to,
reimbursement for such items as moving expenses and travel and entertainment
expenses, and imputed income for automobile expenses, tax preparation expenses
and health and life insurance premiums paid by an Affiliated Employer.
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).
2.19 "Contribution Percentage" shall mean the ratio (expressed as a
percentage), of the sum of the Voluntary Participant Contributions and Employer
Matching Contributions under the Plan on behalf of the Eligible Participant for
the Plan Year to the Eligible Participant's compensation for the Plan Year. For
the purpose of determining an Eligible Participant's Contribution Percentage for
a Plan Year, the Committee may elect to consider an Eligible Participant's
compensation for (a) the entire Plan Year or (b) that portion of the Plan Year
in which the individual is an Eligible Participant, provided that such election
is applied uniformly to all Eligible Participants for the Plan Year. The
Contribution Percentage of an Eligible Participant who does not make Voluntary
Participant Contributions or have Employer Matching Contributions made on his
behalf shall be zero.
2.20 "Determination Date" shall mean with respect to a Plan Year, the
last day of the preceding Plan Year.
4
<PAGE>
2.21 "Determination Year" shall mean the Plan Year being tested.
2.22 "Direct Rollover" shall mean a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
2.23 "Discretionary Profit Sharing Contribution" shall mean the
Employing Company contribution made to the Accounts of Eligible Participants
under Section 5.6.
2.24 "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.
2.25 "Early Retirement Date" shall mean the first day of any month
following the later of a Participant's fiftieth (50th) birthday or completion of
ten (10) Years of Service.
2.26 "Elective Employer Contribution" shall mean contributions made
pursuant to Section 4.1 during the Plan Year by an Employing Company, at the
election of a Participant, in lieu of cash compensation and shall include
contributions made pursuant to a salary reduction agreement.
2.27 "Eligible Employee" shall mean an Employee who is employed by an
Employing Company as a regular full-time or regular part-time employee and who
is designated as eligible on an Appendix A attached hereto, other than:
(a) An Employee who is treated as such solely by reason of the
"leased employee" rules of Code Section 414(n) such that, pursuant to
an agreement between an Employing Company and any other person, such
individual has performed services for the Employing Company (or the
Employing Company and related persons as described in Code Section
414(n)(6)) on a substantially full-time basis for a period of at least
one year and such services were performed under the primary direction
or control of the Employing Company;
(b) An Employee who is represented by a collective bargaining
agent unless the representatives of his bargaining unit and the
Employing Company mutually agree to participation in the Plan subject
to its terms by members of his bargaining unit;
(c) An individual who is classified by the Employing
Company as a temporary employee or an independent contractor,
regardless of whether such classification is in error. Any individual
classified by the Employing Company as a temporary employee shall
5
<PAGE>
be excluded from the Plan, regardless of any prior inclusion in the
Plan and regardless of whether the "temporary employee" classification
is determined to be in error; or
(d) An individual or Employee who has voluntarily waived
participation in the Plan for any reason, including any individual or
Employee who has waived benefits upon employment by the Employing
Company.
2.28 "Eligible Participant" shall mean:
(a) In the context of Elective Employer Contributions,
Voluntary Participant Contributions or Employer Matching Contributions,
an Eligible Employee who is authorized to have Elective Employer
Contributions, Voluntary Participant Contributions or Employer Matching
Contributions allocated to his Account for the Plan Year.
(b) In the context of Fixed Profit Sharing Contributions or
Discretionary Profit Sharing Contributions an Eligible Employee who is
authorized to have Fixed Profit Sharing Contributions or Discretionary
Profit Sharing Contributions allocated to his Account for the Plan
Year, however, in such context, the term "Eligible Employee" shall
exclude:
(1) an Employee who was actively employed by an
Employing Company or a Southern Affiliate on December 31, 1996
who will have attained his fortieth (40th) birthday on or
before January 1, 2002; and
(2) an Employee who is described in Section 3.9,
3.10 or Article XVIII of the Plan.
(c) Notwithstanding subsections 2.28(b)(1) and (2), if an
Employee who is described in Section 2.28(b)(1) or Section 3.10:
(1) terminates employment with either an "employing
company," as that term is defined in the Mirant Services
Pension Plan, or Mirant Mid-Atlantic Services, LLC; or
(2) transfers to employment with an Affiliated
Employer who is not an "employing company," as that term is
defined in the Mirant Services Pension Plan, or Mirant
Mid-Atlantic Services, LLC,
and is subsequently rehired by either an "employing company," as that
term is defined in the Mirant Services Pension Plan, or Mirant
Mid-Atlantic Services, LLC, such Employee shall be an "Eligible
Employee" for purposes of Section 2.28(b).
2.29 "Eligible Retirement Plan" shall mean an individual retirement
account described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in Section 401(a) of
the Code that accepts the
6
<PAGE>
Distributee's Eligible Rollover Distribution. However, in the case of an
Eligible Rollover Distribution to a surviving spouse, an Eligible Retirement
Plan is an individual retirement account or individual retirement annuity.
2.30 "Eligible Rollover Distribution" shall mean any distribution of
all or any portion of the balance to the credit of the Distributee, except that
an Eligible Rollover Distribution does not include: (a) any distribution that is
one of a series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the Distributee, the
joint lives (or joint life expectancies) of the Distributee and the
Distributee's Beneficiary, or for a specified period of 10 years or more; (b)
any distribution to the extent such distribution is required under Section
401(a)(9) of the Code; (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.
2.31 "Employee" shall mean each individual who is employed by an
Affiliated Employer under common law and each individual who is required to be
treated as an employee pursuant to the "leased employee" rules of Code Section
414(n) other than a leased employee described in Code Section 414(n)(5).
2.32 "Employer Matching Contribution" shall mean a contribution made by
an Employing Company pursuant to Section 5.1.
2.33 "Employing Company" shall mean the Company and any affiliate or
subsidiary of the Company or Mirant Corporation which the Board of Managers may
from time to time determine to bring under the Plan and which adopt the Plan,
and any successor of them. The Employing Companies are set forth on Appendix B
to the Plan as updated from time to time. No such entity shall be treated as an
Employing Company prior to the date it adopts the Plan.
2.34 "Enrollment Date" shall mean the first day of each payroll
period.
2.35 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, or any successor statute, and the rulings and regulations
promulgated thereunder. In the event an amendment to ERISA renumbers a section
of ERISA referred to in this Plan, any such reference automatically shall become
a reference to such section as renumbered.
2.36 "Excess Aggregate Contributions" shall mean the amount referred to
in Code Section 401(m)(6)(B) with respect to a Participant. In no event may the
Excess Aggregate Contributions for any Highly Compensated Employee exceed the
amount of the Employer Matching Contributions or Voluntary Participant
Contributions made on behalf of the Highly Compensated Employee for the Plan
Year.
7
<PAGE>
2.37 "Excess Deferral Amount" shall mean the amount of Elective
Employer Contributions for the calendar year that exceed the Code Section 402(g)
limits as allocated to this Plan pursuant to Section 4.3(b).
2.38 "Excess Deferral Contributions" shall mean the amount of Elective
Employer Contributions on behalf of a Highly Compensated Employee referred to in
Code Section 401(k)(8)(B).
2.39 "Fixed Profit Sharing Contribution" shall mean the Employing
Company contribution made to the Accounts of Eligible Participants under Section
5.5.
2.40 "Forfeiture" shall mean that portion of a Participant's Account
which is forfeitable as determined under the vesting schedule set forth in
Article X hereof. 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.
2.41 "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 Mirant Corporation 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 $85,000 in the
preceding Plan Year. The $85,000 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 $85,000 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.
8
<PAGE>
2.42 "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.
2.43 "Investment Fund" shall mean any one of the funds described in
Article VIII which constitutes part of the Trust Fund.
2.44 "Key Employee" shall mean any Employee or former Employee (and his
Beneficiary) who is a key employee within the meaning of Code Section 416(i)(1).
2.45 "Limitation Year" shall mean the Plan Year.
2.46 "Look-Back Year" shall mean the Plan Year preceding the
Determination Year.
2.47 "Non-Highly Compensated Employee" shall mean an Employee who
is not a Highly Compensated Employee.
2.48 "Normal Retirement Date" shall mean the first day of the month
following a Participant's sixty-fifth (65th) birthday.
2.49 "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.
2.50 "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, (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, and (d) an Employee or
former Employee for whom a Southern Stock Fund is maintained under the Plan.
2.51 "Permissive Aggregation Group" shall mean a group of plans
consisting of the Required Aggregation Group and, at the election of the
Affiliated Employers, such other plan or plans not required to be included in
the Required Aggregation Group, provided the resulting group, taken as a whole,
would continue to satisfy the provisions of Code Section 401(a)(4) or 410.
2.52 "Plan" shall mean the Mirant Services Employee Savings Plan, as
described herein or as from time to time amended.
9
<PAGE>
2.53 "Plan Year" shall mean the twelve-month period commencing January
1st and ending on the December 31st next following.
2.54 "Present Value of Accrued Retirement Income" shall mean an amount
determined solely for the purpose of determining if the Plan, or any other plan
included in a Required Aggregation Group of which the Plan is a part, is top
heavy in accordance with Code Section 416.
2.55 "Required Aggregation Group" shall mean those plans that are
required to be aggregated as determined under this Section 2.55. In determining
a Required Aggregation Group hereunder, each plan of the Affiliated Employers in
which a Key Employee is a participant and each other plan of the Affiliated
Employers which enables any plan in which a Key Employee participates to meet
the requirements of Code Section 410 or 401(a)(4) will be required to be
aggregated.
2.56 "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.
2.57 "SCEM" shall mean Southern Company Energy Marketing, L.P.
2.58 "SCEM Plan" shall mean the Southern Company Energy Marketing
Employee Savings Plan.
2.59 "Southern" shall mean the Southern Company or any successor
thereto.
2.60 "Southern Affiliate" shall mean Southern 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 Southern, (b) any trade or business (whether
or not incorporated) which is under common control (as defined in Section 414(c)
of the Code) with Southern, (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 Southern, and (d) any other entity required to be
aggregated with Southern pursuant to regulations under Section 414(o) of the
Code.
2.61 "Southern PSP" shall mean the Southern Company Performance
Sharing Plan.
2.62 "Southern ESOP" shall mean the Southern Company Employee Stock
Ownership Plan.
2.63 "Southern ESP" shall mean the Southern Company Employee
Savings Plan.
10
<PAGE>
2.64 "Southern Plans" shall mean the Southern ESOP, the Southern
ESP and the Southern PSP, collectively.
2.65 "Southern Stock" shall mean the common stock of Southern.
2.66 "Southern Stock Fund" shall mean the fund established to hold
Southern Stock as described in Section 8.9.
2.67 "Super-Top-Heavy Group" shall mean an Aggregation Group that would
be a Top-Heavy Group if 90% were substituted for 60% in Section 2.70.
2.68 "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.
2.69 "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.
2.70 "Top-Heavy Group" shall mean an Aggregation Group in which, as
of the Determination Date, the sum of:
(a) the Present Value of Accrued Retirement Income of Key
Employees under all defined benefit plans included in that group, and
(b) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group,
exceeds 60% of a similar sum determined for all employees.
2.71 "Trust" or "Trust Fund" shall mean the trust established
pursuant to the Trust Agreement.
2.72 "Trust Agreement" shall mean the trust agreement between the
Company and the Trustee, as described in Article XIV.
11
<PAGE>
2.73 "Trustee" shall mean the person or corporation designated as
trustee under the Trust Agreement, including any successor or successors.
2.74 "Valuation Date" shall mean each business day of the New York
Stock Exchange.
2.75 "Voluntary Participant Contribution" shall mean a contribution
made pursuant to Section 4.6 during the Plan Year.
2.76 "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 herein as applicable to
such Eligible Employee.
Notwithstanding anything in this Section 2.76 to the contrary, an
Employee shall not receive credit for more than one Year of Service with respect
to any twelve-consecutive-month period.
12
<PAGE>
ARTICLE III
PARTICIPATION
3.1 Eligibility Requirements. Each individual who was a Participant on
April 2, 2001 will continue to participate in the Plan. Each individual who is
or becomes an Eligible Employee on April 2, 2001 shall become a Participant on
April 2, 2001. Each other Eligible Employee shall become a 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 Mirant
Services Bargaining Unit Employee Savings Plan, 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
13
<PAGE>
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.
3.7 Former Commonwealth Edison of Indiana Employees. Notwithstanding
any other provision of the Plan to the contrary, any former employee of
Commonwealth Edison of Indiana who was employed by an Employing Company or
Southern Affiliate prior to April 1, 1998 and is set forth on an approved
schedule of employees, shall be entitled for vesting purposes hereunder to years
of vesting service accrued under the Commonwealth Edison Company of Indiana
Service Annuity System Plan on or after January 1, 1997, in addition to any
Years of Service accrued under this Plan. Notwithstanding Section 2.28(b), such
former employees of Commonwealth Edison of Indiana shall not be considered
Eligible Participants for allocation of Fixed Profit Sharing Contributions under
Section 5.5. Notwithstanding the foregoing, if a former employee of Commonwealth
Edison of Indiana (1) terminates employment with either an "employing company,"
as that term is defined in the Mirant Services Pension Plan, or Mirant
Mid-Atlantic Services, LLC, or transfers to employment with an Affiliated
Employer who is not an "employing company," as that term is defined in the
Mirant Services Pension Plan, or Mirant Mid-Atlantic Services, LLC, and is
subsequently rehired by either an "employing company," as that term is defined
in the Mirant Services Pension Plan, or Mirant Mid-Atlantic Services, LLC, such
former employee of Commonwealth Edison of Indiana shall be considered an
Eligible Participant for allocation of Fixed Profit Sharing Contributions under
Section 5.5.
3.8 Former Commonwealth Energy System Employees. Notwithstanding any
other provision of the Plan to the contrary, with respect to a former employee
of the Commonwealth Energy System who is employed by an Employing Company and is
set forth on an approved schedule of employees, such employee shall be entitled,
for vesting purposes hereunder, to years of vesting service accrued under the
Pension Plan for Employees of Commonwealth Energy System and Subsidiary
Companies on or after January 1, 1997, in addition to any Years of Service
accrued under this Plan.
14
<PAGE>
3.9 Former Orange and Rockland Utilities, Inc. Employees.
Notwithstanding any other provision of the Plan to the contrary, former
employees of Orange and Rockland Utilities, Inc. who are employed by an
Employing Company and who are set forth on a schedule of employees acknowledged
by the Committee, shall not be considered Eligible Participants for allocation
of Fixed Profit Sharing Contributions and Discretionary Profit Sharing
Contributions. Such employees shall be entitled, for vesting purposes hereunder,
to years of vesting service accrued under the Employees' Retirement Plan of
Orange and Rockland Utilities, Inc. on or after January 1, 1997, in addition to
any Years of Service accrued under this Plan.
3.10 Former Pacific Gas & Electric Employees. Notwithstanding any other
provision of the Plan to the contrary, with respect to a former employee of
Pacific Gas & Electric who is employed by an Employing Company and is set forth
on an approved schedule of employees, such employee shall be entitled, for
vesting purposes hereunder, to years of vesting service accrued under the
Pacific Gas and Electric Company Retirement Plan on or after January 1, 1997, in
addition to any Years of Service accrued under this Plan.
15
<PAGE>
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 by a
whole percentage of his Compensation, which percentage shall not be less than
one percent (1%) nor more than nineteen percent (19%) of his Compensation, such
Elective Employer Contribution to be contributed to his Account under the Plan.
4.2 Maximum Amount of Elective Employer Contributions. The maximum
amount of Elective Employer Contributions that may be made on behalf of a
Participant during any Plan Year to this Plan or any other qualified plan
maintained by an Employing Company shall not exceed the dollar limitation set
forth in Section 402(g) of the Code in effect at the beginning of such Plan
Year.
4.3 Distribution of Excess Deferral Amounts.
(a) In General. Notwithstanding any other provision of the
Plan, Excess Deferral Amounts and income allocable thereto shall be
distributed (and any corresponding Employer Matching Contributions
shall be forfeited) no later than April 15th of each Plan Year, 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 1st;
shall specify the Participant's Excess Deferral Amount for the
preceding Plan 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.
16
<PAGE>
(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.
(d) 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.
17
<PAGE>
(c) Except as required under 4.4(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 1/2 by the
Participant;
(3) the termination of the Plan without
establishment of a successor plan;
(4) a financial hardship of the Participant
pursuant to Section 11.6 of the Plan;
(5) the date of a sale by an Employing Company to an
entity that is not an Affiliated Employer of substantially all
of the assets (within the meaning of Code Section 409(d)(2))
with respect to a Participant who continues employment with
the corporation acquiring such assets; or
(6) the date of the sale by an Employing Company or
an Affiliated Employer of its interest in a subsidiary (within
the meaning of Code Section 409(d)(3)) to an entity which is
not an Affiliated Employer with respect to the Participant who
continues employment with such subsidiary.
4.5 Section 401(k) Nondiscrimination Tests.
(a) Actual Deferral Percentage Test. The Plan shall satisfy
the nondiscrimination test of Section 401(k)(3) of the Code, under
which no Elective Employer Contributions shall be made that would cause
the Actual Deferral Percentage for Eligible Participants who are Highly
Compensated Employees to exceed either subsection 4.5(a)(1) or (2) as
follows:
(1) 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 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.
18
<PAGE>
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 Contribution relate) or distributed, as
directed by the Committee, to the extent permitted by
applicable law.
19
<PAGE>
(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).
20
<PAGE>
(2) In the event that this Plan satisfies the
requirements of Code Section 401(k), Code Section 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), Code Section 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 consisting of any whole percentage of his Compensation,
which percentage is not less than one percent (1%) nor more than nineteen
percent (19%) of his Compensation. The maximum Voluntary Participant
Contribution shall be reduced by the percent, if any, which is contributed as an
Elective Employer Contribution on behalf of such Participant under Section 4.1.
4.7 Manner and Time of Payment of Elective Employer Contributions and
Voluntary Participant Contributions. Contributions made in accordance with
Sections 4.1 and 4.6 will be rounded to the next higher multiple of one dollar
on a monthly basis. They will be made only through payroll deductions and will
be effective as of the payroll period commencing as soon as practicable after
the date on which the Participant elects to commence participation in the Plan.
Contributions shall be remitted to the Trustee as of the earliest date on which
such contributions can reasonably be segregated from each Employing Company's
general assets, but in any event 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.
21
<PAGE>
ARTICLE V
EMPLOYER CONTRIBUTIONS
5.1 Amount of Employer Matching Contributions. Subject to the
provisions of Section 6.1 and 6.2, each Employing Company shall contribute an
Employer Matching Contribution on behalf of each Participant in its employ who
meets the eligibility requirements of Section 3.1. The amount of the Employer
Matching Contribution shall be equal to seventy-five percent (75%) of a
Participant's Elective Employer Contributions and Voluntary Participant
Contributions during each payroll period, however, for purposes of such Employer
Matching Contributions, the total of Elective Employer Contributions and
Voluntary Participant Contributions in excess of six percent (6%) of the
Participant's Compensation for such payroll period shall not be considered. If,
as determined as of the end of a Plan Year, a Participant received Employer
Matching Contributions on a total of Elective Employer Contributions and
Voluntary Participant Contributions which is 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 Participant. However, such additional Employer
Matching Contribution will not be based on a total of Elective Employer
Contributions and Voluntary Participant Contributions in excess of six percent
(6%) of his Compensation for the Plan Year.
5.2 Payment of Employer Matching Contributions. Except as provided
herein, Employer Matching Contributions shall be remitted to the Trustee as soon
as practicable after the payroll period to which they relate.
5.3 Limitations on Employer Matching Contributions and Voluntary
Participant Contributions.
(a) Actual Contribution Percentage Test. The Plan shall
satisfy the nondiscrimination test of Section 401(m) of the Code, under
which the Average Contribution Percentage for Eligible Participants
shall not exceed either subsection 5.3(a)(1) or (2) as follows:
(1) The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees in the
current Plan Year shall not exceed the Average Contribution
Percentage for the prior Plan Year for Eligible Participants
who were Non-Highly Compensated Employees in the prior Plan
Year multiplied by 1.25; or
(2) The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees in the
current Plan Year shall not exceed the Average Contribution
Percentage for Eligible Participants who were Non-Highly
Compensated Employees in the prior Plan Year multiplied by two
(2), provided that the Average Contribution Percentage for
Eligible Participants who are Highly Compensated Employees is
in the current Plan Year does not exceed the Average
Contribution Percentage for the prior Plan Year for Eligible
Participants who were
22
<PAGE>
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 Contribution Percentage for current year Non-Highly
Compensated Employees may be substituted for the prior year
Average Contribution Percentage. However, once an election is
made to utilize such current year Average Contribution
Percentage in determining the Actual Contribution Percentage,
the Committee may not revoke such election without the
approval of the Internal Revenue Service, to the extent
required under Code Section 401(m)(2)(A). Notwithstanding the
foregoing, for the 2000 Plan Year the Average Contribution
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(m)(3), the actual Average
Contribution Percentage of Non-Highly Compensated Employees
for the 2000 Plan Year.
(b) Distribution of Excess Aggregate Contributions.
(1) In General. The Excess Aggregate Contributions
for Highly Compensated Employees for a Plan Year which are to
be distributed shall be distributed such that the Highly
Compensated Employee with the highest amount of Employer
Matching Contributions and Voluntary Participant Contributions
shall be reduced to the extent required to:
(A) distribute the total amount of
Excess Aggregate Contributions, or
(B) cause the amount of such Highly
Compensated Employee's Employer Matching
Contributions and Voluntary Participant Contributions
to equal the amount of Employer Matching
Contributions and Voluntary Participant Contributions
of the Highly Compensated Employee with the next
highest amount of the Employer Matching Contributions
and Voluntary Participant Contributions for the Plan
Year.
This process must be repeated until all Excess
Aggregate Contributions are distributed.
Excess Aggregate Contributions, plus any income and
minus any loss allocable thereto, shall be distributed (or, if
forfeitable, forfeited) within 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 following Plan Year, to Participants to whose Accounts
such Excess Aggregate Contributions were allocated for the
Plan Year. Excess Aggregate Contributions shall be treated as
Annual Additions.
23
<PAGE>
(2) Determination of Income or Loss. Excess Aggregate
Contributions to be distributed shall be adjusted for any
income or loss through the last day of the Plan Year or the
date of distribution, as determined by the Committee. The
income or loss allocable to such Excess Aggregate
Contributions is the sum of:
(A) income or loss allocated to the
Participant's Account attributable to Voluntary
Participant Contributions and Employer Matching
Contributions to be distributed for the Plan Year
multiplied by a fraction, the numerator of which is
the Participant's Excess Aggregate Contributions for
the year and the denominator of which is the
Participant's Account balance attributable to
Voluntary Participant Contributions and Employer
Matching Contributions, minus any income or plus any
loss occurring during the Plan Year; and
(B) if the Committee shall determine in its
sole discretion, ten percent (10%) of the amount
determined under (1) above multiplied by the number
of whole calendar months between the end of the Plan
Year and the date of the distribution, counting the
month of distribution if distribution occurs after
the 15th of the month.
Notwithstanding the above, the Committee may
designate any reasonable method for computing the income or
loss allocable to Excess Aggregate Contributions, provided
that the method does not violate Section 401(a)(4) of the
Code, is used consistently for all Participants and for all
corrective distributions under the Plan for the Plan Year, and
is used by the Plan for allocating income or loss to
Participants' Accounts.
(3) Accounting for Excess Aggregate Contributions.
Excess Aggregate Contributions shall be distributed first from
Voluntary Participant Contributions allocated to the
Participant's Account and any corresponding Employer Matching
Contributions shall also be forfeited and then, if necessary,
distributed from the remaining Employer Matching Contributions
allocated to the Participant's Account.
(c) Special Rules.
(1) The Contribution Percentage for any Eligible
Participant who is a Highly Compensated Employee for the Plan
Year and who is eligible to make voluntary participant
contributions, to receive employer matching contributions, or
to make deferral contributions under two or more plans
described in Section 401(a) of the Code or arrangements
described in Section 401(k) of the Code that are maintained by
an Affiliated Employer shall be determined as if all such
contributions were made under a single plan.
(2) In the event that this Plan satisfies the
requirements of Code Section 401(m), 401(a)(4), or 410(b) only
if aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of Code Section
24
<PAGE>
401(m), 401(a)(4), or 410(b) only if aggregated with this
Plan, then the contribution percentages shall be determined as
if all such plans were a single plan.
(3) The determination and treatment of the
Contribution Percentage of any Eligible Participant shall
satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
5.4 Multiple Use Limitation. If both the Average Actual Deferral
Percentage and the Average Contribution Percentage of the Highly Compensated
Employees exceed 1.25 of the Average Actual Deferral Percentage and the Average
Contribution Percentage of the Non-Highly Compensated Employees and if one or
more Highly Compensated Employees makes Elective Employer Contributions and
receives Employer Matching Contributions, and the sum of the Actual Deferral
Percentage and Actual Contribution Percentage of those Highly Compensated
Employees subject to either or both test exceed the aggregate limit as defined
in Treasury Regulation Section 1.401(m)-2, then the Employer Matching
Contribution of those Highly Compensated Employees who participate in the cash
or deferred arrangement will be reduced (beginning with such Highly Compensated
Employees whose Employer Matching Contribution is the highest) so that the
aggregate limit is not exceeded. For purposes of determining if the aggregate
limit has been exceeded, the Actual Deferral Percentage and the Contribution
Percentage of the Highly Compensated Employees shall be determined after any
corrections required to meet the Actual Deferral Percentage Test and the Actual
Contribution Percentage Test.
5.5 Fixed Profit Sharing Contribution. Each Employing Company shall
make a Fixed Profit Sharing Contribution to the Accounts of Eligible
Participants for each payroll period equal to three percent (3%) of such
Eligible Participants' Compensation during such payroll period. The Fixed Profit
Sharing Contribution shall be made without regard to the current or accumulated
net profits of the Employing Company. Compensation for purposes of this Section
5.5 shall mean a Participant's Compensation hereunder plus any short-term
incentive pay awarded under the Mirant Corporation Omnibus Incentive
Compensation Plan. The Fixed Profit Sharing Contribution shall be allocated
among the Accounts of Eligible Participants in proportion to the ratio that the
Compensation of an Eligible Participant during the payroll period for which such
Fixed Profit Sharing Contribution relates to the Compensation of all Eligible
Participants during such payroll period. Fixed Profit Sharing Contributions
shall be paid to the Trustee as soon as practicable after the expiration of each
calendar quarter for which such Fixed Profit Sharing Contribution relates, but
in any event not later than the time prescribed by law for filing the federal
income tax return of the Employing Company, including extensions, for the
taxable year of the payroll period in question.
5.6 Discretionary Profit Sharing Contribution. In addition to the Fixed
Profit Sharing Contribution, each Employing Company may, in its sole and
absolute discretion, make an annual Discretionary Profit Sharing Contribution to
the Accounts of Eligible Participants who are Eligible Employees as of the last
day of the Plan Year for which such Discretionary Profit Sharing Contribution
relates. The Discretionary Profit Sharing Contribution may be made in a whole
dollar amount or as a percentage of the Compensation of each Eligible
Participant eligible to receive an allocation of such Discretionary Profit
Sharing Contribution under this Section 5.6, and may be made without
25
<PAGE>
regard to the current or accumulated net profits of the Employer. Compensation
for purposes of this Section 5.6 shall mean a Participant's Compensation
hereunder plus any short-term incentive pay awarded under the Mirant Corporation
Omnibus Incentive Compensation Plan. The Discretionary Profit Sharing
Contribution shall be allocated among the Accounts of Eligible Participants who
are Eligible Employees during the Plan Year for which such Discretionary Profit
Sharing Contribution relates in proportion to the ratio that the Compensation of
an Eligible Participant during the Plan Year bears to the Compensation of all
such Eligible Participants during the Plan Year. Discretionary Profit Sharing
Contributions shall be paid to the Trustee no later than the time prescribed by
law for filing the federal income tax return of the Employing Company, including
extensions, for the taxable year ending within the Plan Year for the
Discretionary Profit Sharing Contribution in question.
5.7 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, upon written direction of the
Employing Company, such contribution 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, upon written direction of
the Employing Company, such Employing Company contribution, to the
extent that it is determined to be nondeductible, 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
contribution 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 5.7(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 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.
5.8 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
26
<PAGE>
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.
27
<PAGE>
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 a 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) $35,000 (as such amount may be adjusted from
time to time pursuant to Code Section 415(d)).
(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;
(c) forfeiture of that portion, or all, of the Employer
Matching Contributions (as adjusted for income and loss) as is
necessary to ensure compliance with Section 6.1; and
(d) forfeiture of that portion, or all, of the Fixed Profit
Sharing Contributions and Discretionary Profit Sharing 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.
28
<PAGE>
Any amounts distributed or returned to the Participant under (a) or (b)
above shall be disregarded for purposes of the Actual Deferral Percentage Test
and for purposes of the Actual Contribution Percentage Test.
Any amounts forfeited under this Section 6.2 shall be held in a
suspense account (separate from the Suspense Account established under Section
10.3) and shall be applied, subject to Section 6.1, to reduce the next ensuing
Employing Company contribution. Such application shall be made prior to any
Employing Company contributions that would constitute Annual Additions. No
income or investment gains and losses shall be allocated to the suspense account
provided for under this Section 6.2. 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.
29
<PAGE>
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 suspension under Section 7.1 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.
30
<PAGE>
ARTICLE VIII
INVESTMENT OF CONTRIBUTIONS
8.1 Investment Funds. The Investment Funds shall be selected from time
to time by the Mirant Services Investment Review Committee (the "Investment
Review Committee"). In addition to such other Investment Funds selected by the
Investment Review Committee, the Investment Funds shall include the "Company
Stock Fund." The Company Stock Fund shall be invested and reinvested in Common
Stock, provided that funds applicable to the purchase of Common Stock pending
investment of such funds may be temporarily invested in short-term United States
Government obligations, other obligations guaranteed by the United States
Government, commercial paper, or certificates of deposit, and, if the Trustee so
determines, may be transferred to money market funds utilized by the Trustee for
qualified employee benefit trusts.
8.2 Investment of Participant and Profit Sharing 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 Investment Review Committee or
pursuant to Section 8.6, that his Elective Employer Contributions, Voluntary
Participant Contribution, Fixed Profit Sharing Contributions and Discretionary
Profit Sharing 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 employer
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 Investment Review Committee.
8.4 Investment of Earnings. Subject to Section 8.8, interest,
dividends, if any, and other distributions received by the Trustee with respect
to an Investment Fund shall be reinvested 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.
31
<PAGE>
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 of 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 Investment Review 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 Investment Review Committee shall take such actions as
it deems necessary or appropriate in its discretion to (a) 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) appoint an independent fiduciary to carry out
such actions as the Investment Review 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 Other 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. Any interest, dividends, if any, and
other distributions received with respect to an Investment Fund established
pursuant to this Section 8.8 shall be invested pursuant to the Participant's
direction under Section 8.2 hereof.
8.9 Southern Stock Fund. All Southern Stock received by the Plan
pursuant to Section 9.1(b) shall be held in a Participant's Southern Stock Fund.
Participants may direct investments out of the Southern Stock Fund and into the
other Investment Funds in accordance with the procedures of this Article VIII.
However, Participants may not direct investments into the Southern Stock Fund
and, should a Participant elect to direct investments out of the Southern Stock
Fund, he may not again direct any amount attributable to such investments back
into the Southern Stock Fund. In no event shall the Southern Stock Fund remain
as an Investment Fund under the Plan later than the end of the calendar quarter
which includes the five-year anniversary of the date Southern Stock is first
held in the Southern Stock Fund. Any Southern Stock which remains in a
Participant's Investment Fund on such date shall be reinvested as determined by
the Investment Review Committee.
32
<PAGE>
ARTICLE IX
MAINTENANCE AND VALUATION OF PARTICIPANTS' ACCOUNTS
9.1 Establishment of Accounts.
(a) An Account shall be established for each Participant. In
addition, subaccounts shall be established for each Participant to
reflect all Elective Employer Contributions, Voluntary Participant
Contributions, Employer Matching Contributions, Fixed Profit Sharing
Contributions, Discretionary Profit Sharing 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.
(b) Upon the transfer to the Plan of Southern Stock from the
Southern Plans or the SCEM Plan, a "Southern Stock Account" subaccount
shall be established to reflect a Participant's interest in the Plan
attributable to the Southern Stock so transferred. In addition,
subaccounts to the Southern Stock Account shall be established to
reflect the character of the Southern Stock Account as Elective
Employer Contributions, Voluntary Participant Contributions, Employer
Matching Contributions, Transferred ESOP Accounts, and Rollover
Contributions.
(c) Upon the transfer to the Plan of Common Stock from the
Southern Plans or the SCEM Plan, a "Transferred Common Stock Account"
subaccount shall be established to reflect a Participant's interest in
the Plan attributable to the Common Stock so transferred.
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 proportion and by such method or formula as shall
be deemed by the Committee to be necessary or appropriate to account for each
Participant's proportionate beneficial interest in the Trust Fund in respect of
his interest in each Investment Fund. Investments of each Investment Fund shall
be valued at their fair market values as of each Valuation Date as determined by
the Trustee, and such valuation shall conclusively establish such value.
9.3 Rights in Investment Funds. Nothing contained in this Article IX
shall be deemed to give any Participant any interest in any specific property in
any Investment Fund or any interest, other than the right to receive payments or
distributions in accordance with the Plan or the right to instruct the Trustee
how to vote Common Stock as provided in Section 14.3.
33
<PAGE>
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 and Profit Sharing Contributions.
A Participant's nonforfeitable percentages of Employer Matching Contributions,
Fixed Profit Sharing Contributions and Discretionary Profit Sharing
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 following schedules:
Employer Matching Contributions and Fixed Profit Sharing Contributions
<TABLE>
<CAPTION>
Completed Nonforfeitable Forfeitable
Years of Service Percentage Percentage
---------------- -------------- -----------
<S> <C> <C>
Less than 1 0% 100%
1 but less than 2 33.3% 66.6%
2 but less than 3 66.6% 33.3%
3 or more 100% 0%
</TABLE>
Notwithstanding the foregoing, each Participant who is an Eligible
Employee on April 2, 2001 shall at all times be one-hundred percent (100%)
vested in all Employer Matching Contributions.
Discretionary Profit Sharing Contributions
<TABLE>
<CAPTION>
Completed Nonforfeitable Forfeitable
Years of Service Percentage Percentage
---------------- -------------- -----------
<S> <C> <C>
Less than 3 0% 100%
3 or more 100% 0%
</TABLE>
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 and 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 Procedures. 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
34
<PAGE>
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 any 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) 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.
10.5 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
an 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 the terminated Participant 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 the terminated Participant 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.
35
<PAGE>
(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 Date. Notwithstanding Section 10.2, a
Participant shall become one hundred percent (100%) vested in his Account
balance upon his Normal Retirement Date 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.
36
<PAGE>
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 such Voluntary Participant
Contributions;
(3) All amounts described above, plus 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 the value of
his Transferred ESOP Account as described in Section 19.4(f);
provided, however, that the amount in his Transferred ESOP
Account attributable to funds which had been held in the
Southern ESOP for less than two years may not be distributed
until the first day of the month following the two-year
anniversary of the date such funds were contributed to the
Southern ESOP;
(5) All amounts described above, plus the value of
his Transferred Common Stock Account as described in Section
19.4(g); provided, however, that the amount in his Transferred
Common Stock Account attributable to Common Stock that was
distributed on Southern Stock which had been held in the
Southern ESOP for less than two years may not be distributed
until the first day of the month following the two-year
anniversary of the date such Southern Stock was contributed to
the Southern ESOP;
(6) 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
withdrawal;
(7)(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
37
<PAGE>
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) For purposes of this Section 11.1, any individual who
becomes a Participant solely because a Southern Stock Fund is
established on behalf of such individual shall be treated as
participating in the Plan as of the date such Southern Stock Fund is
established.
(c) 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, Southern Stock, Pepco common stock or BP
Amoco Stock, the Participant shall have the right to demand that such portion of
the distribution be made in the form of Common Stock, Southern Stock, Pepco
common stock or BP Amoco Stock, as applicable, to the extent of the whole number
of shares of Common Stock, Southern Stock, Pepco common stock or BP Amoco Stock,
as applicable, 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 pro rata by order
of Investment Fund. 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)(7)(A), in addition to the other
requirements of Article XI, shall be permitted only
38
<PAGE>
if the Committee determines that the withdrawal is to be made on
account of an immediate and heavy financial need of the Participant,
the amount of the withdrawal does not exceed such financial need, and
the amount of the withdrawal is not reasonably available from other
resources of the Participant.
(b) For purposes of this Section 11.6, the following
shall be deemed to be immediate and heavy financial needs:
(1) Medical expenses described in Section 213(d)
of the Code, including but not limited to, expenses for:
(i) The diagnosis, cure, mitigation,
treatment, or prevention of disease, or for the
purpose of affecting any structure or function of the
body;
(ii) transportation primarily for and
essential to such expenses referred to in (i) above;
or
(iii) insurance (including amounts paid as
premiums under part B of Title XVIII of the Social
Security Act) relating to medical expenses referred
to in (i) or (ii) above, provided such expenses are
incurred by the Participant, the Participant's spouse
or any person whom the Participant may properly claim
as a dependent on his federal income tax return or
are necessary for such persons to obtain the medical
care described above; or
(2) Purchase (excluding mortgage payments) of a
principal residence for the Participant; or
(3) Payment of tuition, related education fees, and
room and board expenses, for the next twelve (12) months of
post-secondary education for the Participant, the
Participant's spouse, 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
39
<PAGE>
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 Participants' 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)(7)(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.
40
<PAGE>
(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 order of priority of Investment Fund(s) from which the
principal amount of the loan shall be obtained shall be pro rata.
(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, 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
17.2, if a Participant defaults on a loan under the Plan or if the
Participant's employment terminates prior to full repayment thereof, in
addition to any other remedy provided in the loan instruments or by
law, the Committee may direct the Trustee to charge against that
portion of the Participant's Account which secures the loan the amount
required to fully repay the loan. Under no circumstances, however,
shall any unpaid loan be charged against a Participant's Account until
permitted by applicable law. This Section authorizes only the making of
bona fide loans and not distributions, and before resort is made
against a Participant's Account for his failure to repay any loan, such
other reasonable efforts to collect the same shall be made by the
Committee as it deems reasonable and practical under the circumstances.
(f) No distribution shall be made to any Participant unless
and until all unpaid loans to such Participant have either been paid in
full or deducted from the Participant's Account.
41
<PAGE>
(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.
42
<PAGE>
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 on or after his
Early Retirement Date or his Normal Retirement Date, 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 and/or Southern 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
43
<PAGE>
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
vested 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. 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 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. Notwithstanding
the foregoing, if a divorced Participant wishes to retain his former spouse as
his designated Beneficiary, such Participant must re-designate the former spouse
as designated Beneficiary subsequent to the date of the applicable divorce
decree.
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,
44
<PAGE>
(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 estate.
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 reaches age sixty-five (65),
(2) the Participant's tenth (10th) anniversary
of participation under the Plan, or
45
<PAGE>
(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 1st 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 Mirant Corporation
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 1st, 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 employment, 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
46
<PAGE>
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 Code Section 417(a)(3); 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 the portion of any distribution which is
attributable to Common Stock, Southern Stock, Pepco common stock or BP Amoco
Stock be distributed in the form of such Common Stock, Southern Stock, Pepco
common stock or BP Amoco Stock, respectively, 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 as 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.
47
<PAGE>
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 Managers 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
48
<PAGE>
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 to
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.
49
<PAGE>
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 Managers 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 Investment Review
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 Investment Review Committee shall 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 Investment Review Committee shall
have responsibility for the management of the assets of the Plan, or some part
thereof (including power 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:
50
<PAGE>
(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 Managers 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.
51
<PAGE>
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 Managers 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 an Investment Manager or
Investment Managers (as that term is defined in ERISA) who may be appointed by
the Committee. The Board of Managers 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 Managers 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 Mirant Corporation); 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; and (b) if such private purchase shall be a purchase of
Common Stock directly from Mirant Corporation, no commission shall be paid with
respect thereto unless such commission satisfies the requirements of Prohibited
Transaction Class Exemption 75-1. 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 Mirant Corporation, 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. Procedures similar to those described above shall also
apply to voting the Southern Stock credited to each Participant's Account.
52
<PAGE>
14.4 Voting of Other Investment Fund Shares. The voting of the shares
in any Investment Fund other than as specified in Section 14.3 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 Managers 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.
53
<PAGE>
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 Managers 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 Section 401(a) and 501(a) of the
Code and the applicable provisions of ERISA, as provided in regulations
prescribed by the Secretary of Treasury.
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 Managers
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
Managers, 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 as 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).
54
<PAGE>
ARTICLE XVI
TOP-HEAVY REQUIREMENTS
16.1 Top-Heavy Plan Requirements. For any Plan Year the Plan shall be
determined to be a top-heavy plan, the Plan shall provide the minimum allocation
requirement of Section 16.3.
16.2 Determination of Top-Heavy Status.
(a) The Plan shall be determined to be a top-heavy plan, if,
as of the Determination Date, the sum of the Aggregate Accounts of Key
Employees under this Plan exceeds 60% of the Aggregate Accounts of all
Employees entitled to participate in this Plan.
(b) The Plan shall be determined to be a super-top-heavy plan,
if, as of the Determination Date, the sum of the Aggregate Accounts of
Key Employees under this Plan exceeds 90% of the Aggregate Accounts of
all Employees entitled to participate in this Plan.
(c) In the case of a Required Aggregation Group, each plan in
the group will be considered a top-heavy plan if the Required
Aggregation Group is a Top-Heavy Group. No plan in the Required
Aggregation Group will be considered a top-heavy plan if the
Aggregation Group is not a Top-Heavy Group.
In the case of a Permissive Aggregation Group, only a plan
that is part of the Required Aggregation Group will be considered a
top-heavy plan if the Permissive Aggregation Group is a Top-Heavy
Group. A plan that is not part of the Required Aggregation Group but
that has nonetheless been aggregated as part of the Permissive
Aggregation Group will not be considered a top-heavy plan even if the
Permissive Aggregation Group is a Top-Heavy Group.
(d) For purposes of this Article XVI, if any Employee is a
non-Key Employee for any Plan Year, but such Employee was a Key
Employee for any prior Plan Year, such Employee's Present Value of
Accrued Retirement Income and/or Aggregate Account balance shall not be
taken into account for purposes of determining whether this Plan is a
top-heavy or super-top-heavy plan (or whether any Aggregation Group
which includes this Plan is a Top-Heavy Group). In addition, if an
Employee or former Employee has not performed any services for any
Employing Company maintaining the Plan at any time during the five-year
period ending on the Determination Date, the Aggregate Account and/or
Present Value of Accrued Retirement Income shall be excluded in
determining whether this Plan is a top-heavy or super-top-heavy plan.
(e) Only those plans of the Affiliated Employers in which the
Determination Dates fall within the same calendar year shall be
aggregated in order to determine whether such plans are top-heavy
plans.
55
<PAGE>
16.3 Minimum Allocation for Top-Heavy Plan Years.
(a) Notwithstanding anything herein to the contrary for any
top-heavy Plan Year, the Employing Company contribution allocated to
the Account of each non-Key Employee shall be an amount not less than
the lesser of: (1) 3% of such Participant's compensation for that Plan
Year, or (2) a percentage of that Participant's compensation not to
exceed the percentage at which contributions are made under the Plan
for the Key Employee for whom such percentage is highest for that Plan
Year.
(b) For purposes of the minimum allocation of Section 16.3(a),
the percentage allocated to the Account of any Key Employee shall be
equal to the ratio of the Employing Company contributions allocated on
behalf of such Key Employee divided by the compensation of such Key
Employee for that Plan Year.
(c) For any top-heavy Plan Year, the minimum allocations of
Section 16.3(a) shall be allocated to the Accounts of all non-Key
Employees who are Participants and who are employed by the Affiliated
Employers on the last day of the Plan Year.
(d) Notwithstanding the foregoing, in any Plan Year in which a
non-Key Employee is a Participant in both this Plan and a defined
benefit plan, and both such plans are top-heavy plans, the Affiliated
Employers shall not be required to provide a non-Key Employee with both
the full separate minimum defined benefit and the full separate defined
contribution plan allocations. Therefore, if a non-Key Employee is
participating in a defined benefit plan maintained by the Affiliated
Employers and the minimum benefit under Code Section 416(c)(1) is
provided the non-Key Employee under such defined benefit plan, the
minimum allocation provided for above shall not be applicable, and no
minimum allocation shall be made on behalf of the non-Key Employee.
Alternatively, the Employing Company may satisfy the minimum allocation
requirement of Code Section 416(c)(2) for the non-Key Employee by
providing any combination of benefits and/or contributions that satisfy
the safe harbor rules of Treasury Regulation Section 1.416-1(M-12).
56
<PAGE>
ARTICLE XVII
GENERAL PROVISIONS
17.1 Plan Not an Employment Contract. The Plan shall not be deemed to
constitute a contract between an Affiliated Employer and any Employee, nor shall
anything herein contained be deemed to give any Employee any right to be
retained in the employ of an Employing Company or to interfere with the right of
an Employing Company to discharge any Employee at any time and to treat him
without regard to the effect which such treatment might have upon him as a
Participant.
17.2 No Right of Assignment or Alienation. Except as may be otherwise
permitted or required by law, no right or interest in the Plan of any
Participant or Beneficiary and no distribution or payment under the Plan to any
Participant or Beneficiary shall be subject in any manner to anticipation,
alienation, sale, transfer (except by death), assignment (either at law or in
equity), pledge, encumbrance, charge, attachment, garnishment, levy, execution,
or other legal or equitable process, whether voluntary or involuntary, and any
attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber,
charge, attach, garnish, levy, or execute or enforce any other legal or
equitable process against the same shall be void, nor shall any such right,
interest, distribution, or payment be in any way liable for or subject to the
debts, contracts, liabilities, engagements, or torts of any person entitled to
such right, interest, distribution, or payment. If any Participant or
Beneficiary is adjudicated bankrupt or purports to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge any such right, interest,
distribution, or payment, voluntarily or involuntarily, or if any action shall
be taken which is in violation of the provisions of the immediately preceding
sentence, the Committee may hold or apply or cause to be held or applied such
right, interest, distribution, or payment or any part thereof to or for the
benefit of such Participant or Beneficiary in such manner as is in accordance
with applicable law. In addition, a Participant's benefits may be offset
pursuant to a judgment, order, or decree issued (or settlement agreement entered
into) if and to the extent that such offset is permissible or required under
Code Section 401(a)(13).
Notwithstanding the above, the Committee and the Trustee shall comply
with any domestic relations order (as defined in Section 414(p)(1)(B) of the
Code) which is a qualified domestic relations order satisfying the requirements
of Section 414(p) of the Code. The Committee shall establish procedures for (a)
notifying Participants and alternate payees who have or may have an interest in
benefits which are the subject of domestic relations orders, (b) determining
whether such domestic relations orders are qualified domestic relations orders
under Section 414(p) of the Code, and (c) distributing benefits which are
subject to qualified domestic relations orders.
17.3 Payment to Minors and Others. If the Committee determines that any
person entitled to a distribution or payment from the Trust Fund is an infant or
incompetent or is unable to care for his affairs by reason of physical or mental
disability, it may cause all distributions or payments thereafter becoming due
to such person to be made to any other person for his benefit, without
responsibility to follow the application of payments so made. Payments made
pursuant to this provision shall completely discharge the Company, the Trustee,
and the Committee with respect to the amounts so paid. No person shall have any
rights under the Plan with respect to the Trust Fund, or against the Trustee or
any Employing Company, except as specifically provided herein.
57
<PAGE>
17.4 Source of Benefits. The Trust Fund established under the Plan
shall be the sole source of the payments or distributions to be made in
accordance with the Plan. No person shall have any rights under the Plan with
respect to the Trust Fund, or against the Trustee or any Employing Company,
except as specifically provided herein.
17.5 Unclaimed Benefits. If the Committee is unable, within five (5)
years after any distribution becomes payable to a Participant or Beneficiary, to
make or direct payment to the person entitled thereto because the identity or
whereabouts of such person cannot be ascertained, notwithstanding the mailing of
due notice to such person at his last known address as indicated by the records
of either the Committee or his Employing Company, then such benefit or
distribution will be disposed of as follows:
(a) If the whereabouts of the Participant is unknown to the
Committee, distribution will be made to the Participant's Beneficiary
or Beneficiaries. Payment to such one or more persons shall completely
discharge the Company, the Trustee, and the Committee with respect to
the amounts so paid.
(b) If none of the persons described in (a) above, can be
located, then the benefit payable under the Plan shall be forfeited and
shall be applied to reduce future Employing Company contributions.
Notwithstanding the foregoing sentence, such benefit shall be
reinstated if a claim is made by the Participant or Beneficiary for the
forfeited benefit.
17.6 Governing Law. The provisions of the Plan and the Trust shall be
construed, administered, and enforced in accordance with the laws of the State
of Georgia, except to the extent such laws are preempted by the laws of the
United States.
58
<PAGE>
ARTICLE XVIII
SPECIAL RULES FOR PARTICIPANTS
FORMERLY EMPLOYED BY POTOMAC ELECTRIC POWER COMPANY
18.1 Application. Notwithstanding any provisions of this Plan to the
contrary, the provisions of this Article XVIII apply to Eligible Employees who
were employed by Potomac Electric Power Company ("Pepco") immediately preceding,
and hired by an Affiliated Employer or Southern Affiliate immediately following,
the acquisition of all or substantially all the assets of certain power
generating facilities owned by Pepco (the "Facilities") and is set forth on an
approved schedule of employees (the "Pepco Employees").
18.2 Hours of Service. For all purposes under the Plan, for Pepco
Employees only, Hours of Service shall include all hours of service credited
under the PEPCO Retirement Savings Plan for Exempt Employees and the Pepco
Non-Bargaining, Non-Exempt Retirement Savings Plan (collectively, the "Pepco
Plans") to any Pepco Employee as of the date of the acquisition of the
Facilities (the "Pepco Effective Date").
18.3 Years of Service. For all purposes under the Plan, for Pepco
Employees only, Years of Service shall include all years of service credited
under the Pepco Plans to any Pepco Employee as of the Pepco Effective Date.
18.4 Rate of Employer Matching Contributions. In addition to the amount
of Employer Matching Contributions provided under Section 5.1 hereof, and for
the 2001 Plan Year only, each Pepco Employee shall receive an amount of Employer
Matching Contribution equal to twenty-five percent (25%) of such Pepco
Employee's Elective Employer Contributions, up to a maximum of two hundred and
fifty dollars ($250.00) for such Plan Year.
18.5 Acceptance of Trust-to-Trust Transfer. The Plan may accept a
trust-to-trust transfer of an account from the Pepco Plans 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 Article
XVIII.
(a) The portion of the Pepco Transferred Account attributable
to the "pre-tax contribution account," as that term is defined in the
Pepco Plans, shall be treated as Elective Employer Contributions under
this Plan.
(b) The portion of the Pepco Transferred Account attributable
to the "after-tax contribution account," as that term is defined in the
Pepco Plans, shall be treated as Voluntary Participant Contributions
under this Plan.
(c) The portion of the Pepco Transferred Account which is
attributable to the "matching contribution account," as that term is
defined in the Pepco Plans, shall be treated as Employer Matching
Contributions under this Plan, except the Participant may
59
<PAGE>
direct the investment of such amounts in accordance with the second
paragraph of Section 8.3 and such matching contribution account shall
be one-hundred percent (100%) vested.
(d) The portion of the Pepco Transferred Account which is
attributable to the "rollover contribution account," as that term is
defined in the Pepco Plans, shall be treated as Rollover Contributions
under this Plan.
18.6 In-Service Withdrawals. In determining the ability of a
Participant who is a Pepco Employee to withdraw amounts under Section 11.1(a)(6)
of the Plan, a Participant shall be given credit for any participation in the
Pepco Plans.
18.7 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 Investment Review Committee.
18.8 Loans from Pepco Transferred Accounts. Any loans which were made
to Pepco Employees pursuant to the terms of the Pepco Plans 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 four (4). The transfer of such loans, and the terms
and conditions thereof, shall be made in accordance with the procedures
established by the Committee.
60
<PAGE>
ARTICLE XIX
SPECIAL RULES FOR PARTICIPANTS
FORMERLY EMPLOYED BY THE SOUTHERN COMPANY
19.1 Application. Notwithstanding any provisions of this Plan to the
contrary, the provisions of this Article XIX apply to Eligible Employees who
were hired by an Affiliated Employer and who are former participants in a
Southern Plan whose accounts in the Southern Plan were transferred to this Plan
between May 1, 2001 and July 2, 2001 (the "Southern Employees").
19.2 Hours of Service. For all purposes under the Plan, for Southern
Employees only, Hours of Service shall include all hours of service credited
under the Southern Plans to any Southern Employee as of the effective date of
the Plan.
19.3 Years of Service. For all purposes under the Plan, for Southern
Employees only, Years of Service shall include all years of service credited
under the Southern Plans to any Southern Employee as of the effective date of
the Plan.
19.4 Acceptance of Trust-to-Trust Transfer. The Plan may accept a
trust-to-trust transfer of an account from the Southern Plans for each
Participant who is a Southern Employee. Such account shall be known as the
Participant's "Southern Transferred Account" and shall be subject to the
requirements of this Article XIX.
(a) The portion of the Southern Transferred Account
attributable to "elective employer contributions," as that term is
defined in the Southern ESP, shall be treated as Elective Employer
Contributions under this Plan.
(b) The portion of the Southern Transferred Account
attributable to "voluntary participant contributions," as that term is
defined in the Southern ESP, shall be treated as Voluntary Participant
Contributions under this Plan.
(c) The portion of the Southern Transferred Account which is
attributable to "employer matching contributions," as that term is
defined in the Southern ESP, shall be treated as Employer Matching
Contributions under this Plan, except the Participant may direct the
investment of such amounts in accordance with the second paragraph of
Section 8.3 and such matching contribution account shall be 100%
vested.
(d) The portion of the Southern Transferred Account which is
attributable to "rollover contributions," as that term is defined in
the Southern ESP, shall be treated as Rollover Contributions under this
Plan.
(e) The portion of the Southern Transferred Account which is
attributable to "employer contributions," as that term is defined in
the Southern PSP, shall be treated as Discretionary Profit Sharing
Contributions under this Plan, except that such amounts shall
61
<PAGE>
not be vested until the Participant completes five (5) Years of
Service, at which time such amounts shall be 100% vested.
(f) The portion of the Southern Transferred Account which is
attributable to contributions to the Southern ESOP shall be segregated
into a separate bookkeeping subaccount (the "Transferred ESOP
Account"). All funds in the Transferred ESOP Account shall be 100%
vested. Within the Transferred ESOP Account, separate bookkeeping
accounts shall be established for amounts attributable to funds which
had been held in the Southern ESOP for more than two years at the date
of transfer, funds which had been held in the Southern ESOP for more
than one year but less than two years at the date of transfer, and
funds which had been held in the Southern ESOP for less than one year
at the date of transfer, respectively.
(g) The portion of the Southern Transferred Account which is
attributable to a Southern Employee's "transferred ESOP account," as
that term is defined in the Southern ESP shall be segregated into a
separate bookkeeping subaccount (the "Transferred Common Stock
Account"). All funds in the Transferred Common Stock Account shall be
100% vested. Within the Transferred Common Stock Account, separate
bookkeeping accounts shall be established for amounts attributable to
the Common Stock that was distributed on Southern Stock which had been
held in the Southern ESOP for more than two years at the date of
transfer, amounts attributable to Common Stock that was distributed on
Southern Stock which had been held in the Southern ESOP for more than
one year but less than two years at the date of transfer, and amounts
attributable to Common Stock that was distributed on Southern Stock
which had been held in the Southern ESOP for less than one year at the
date of transfer, respectively.
19.5 In-Service Withdrawals. In determining the ability of a
Participant who is a Southern Employee to withdraw amounts under Section
11.1(a)(6) of the Plan, a Participant shall be given credit for any
participation in the Southern Plans.
19.6 Loans from Southern Transferred Accounts. Any loans which were
made to Southern Employees pursuant to the terms of a Southern Plan from funds
under a Southern 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 three (3). The transfer of such loans,
and the terms and conditions thereof, shall be made in accordance with the
procedures established by the Committee.
62
<PAGE>
ARTICLE XX
SPECIAL RULES FOR PARTICIPANTS
FORMERLY EMPLOYED BY SOUTHERN COMPANY ENERGY MARKETING, L.P.
20.1 Application. Notwithstanding any provisions of this Plan to the
contrary, the provisions of this Article XX apply to Eligible Employees who were
participants in the SCEM Plan on April 1, 2001 (the "SCEM Employees").
20.2 Definitions. For purposes of this Article XX, unless otherwise
required by the context, the following terms shall have the meanings set forth
opposite such terms:
(a) "BP Amoco Stock" shall mean the common stock of B.P.
Amoco, p.l.c.
(b) "Vastar" shall mean Vastar Resources, Inc. and each
affiliate of Vastar Resources, Inc.
(c) "Vastar Capital Accumulation Plan" shall mean the
Vastar Resources, Inc. Capital Accumulation Plan II.
(d) "Vastar Savings Plan" shall mean the Vastar
Resources, Inc. Savings Plan II.
20.3 Hours of Service. For all purposes under the Plan, for SCEM
Employees only, Hours of Service shall include all hours of service credited
under the SCEM Plan to any SCEM Employee as of the effective date of the Plan.
20.4 Years of Service. For all purposes under the Plan, for SCEM
Employees only, Years of Service shall include all years of service credited
under the SCEM Plan to any SCEM Employee as of the effective date of the Plan.
20.5 Acceptance of Trust-to-Trust Transfer. The Plan may accept a
trust-to-trust transfer of an account from the SCEM Plan for each Participant
who is a SCEM Employee. Such account shall be known as the Participant's "SCEM
Transferred Account" and shall be subject to the requirements of this Article
XX.
(a) The portion of the SCEM Transferred Account attributable
to the "elective employer contributions subaccount," as that term is
defined in the SCEM Plan, shall be treated as Elective Employer
Contributions under the Plan.
(b) The portion of the SCEM Transferred Account attributable
to the "voluntary participant contributions subaccount," as that term
is defined in the SCEM Plan, shall be treated as Voluntary Participant
Contributions under this Plan.
63
<PAGE>
(c) The portion of the SCEM Transferred Account which is
attributable to "employer matching contributions subaccount," as that
term is defined in the SCEM Plan, shall be treated as Employer Matching
Contributions under this Plan, except the Participant may direct the
investment of such amounts in accordance with the second paragraph of
Section 8.3 and such matching contribution account shall be 100%
vested.
(d) The portion of the SCEM Transferred Account which is
attributable to the "fixed profit sharing contributions subaccount," as
that term is defined in the SCEM Plan, shall be treated as Fixed Profit
Sharing Contributions under this Plan.
(e) The portion of the SCEM Transferred Account which is
attributable to the "discretionary profit sharing contributions
subaccount," as that term is defined in the SCEM Plan, shall be treated
as Discretionary Profit Sharing Contributions under this Plan.
(f) The portion of the SCEM Transferred Account which is
attributable to the "rollover contributions subaccount," as that term
is defined in the SCEM Plan, shall be treated as Rollover Contributions
under this Plan.
(g) The portion of the SCEM Transferred Account which is
attributable to the "Southern transferred account," as that term is
defined in the SCEM Plan shall be segregated into a separate
bookkeeping account (the "SCEM Southern Transferred Account").
(h) The Common Stock Investment Funds established pursuant to
Section 8.8 shall include that portion of the SCEM Transferred Account
which is attributable to the "BP Amoco Stock fund," as such term is
defined in the SCEM Plan. Any Investment Fund containing common stock
of BP Amoco, which is transferred to this Plan pursuant to the
provisions of Section 8.8, will be eliminated by the Investment Review
Committee as of the date which is five (5) years following such
transfer. Any BP Amoco common stock which remains in a SCEM Employee's
Investment Fund on such date shall be reinvested as determined by the
Investment Review Committee.
20.6 In-Service Withdrawals.
(a) In determining the ability of a Participant who is a SCEM
Employee to withdraw amounts under Section 11.1(a)(6) of the Plan, a
Participant shall be given credit for any participation in the SCEM
Plan. The withdrawal options under Article XI shall also be available
to a Participant with respect to amounts attributable to his SCEM
Southern Transferred Account (a) provided that such Participant shall
have been a participant in the Southern Plan, the SCEM Plan and/or this
Plan for at least 60 months or (b) to the extent that such amounts have
been credited to the SCEM Plan and/or this Plan for at least 24 months,
provided that no earnings attributable to such amounts after the date
such amounts are transferred to this Plan shall be eligible for a
withdrawal under this Section 20.6(a).
(b) Notwithstanding the provisions of Section 11.1 to the
contrary, subject to the provisions of Article XII, this Section 20.6,
and Sections 11.2 through 11.6, a Participant may make withdrawals from
his SCEM Transferred Account effective as of any Valuation Date in the
order of priority listed below:
64
<PAGE>
(1) All amounts described above, plus all or a
portion of the value of his Account attributable to Rollover
Contributions (including earnings and appreciation thereon);
(2) 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;
(3) 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 such Voluntary Participant
Contributions;
(4) All amounts described above, plus the value of
his Transferred ESOP Account as described in Section 19.4(f);
provided, however, that the amount in his Transferred ESOP
Account attributable to funds which had been held in the
Southern ESOP for less than two years may not be distributed
until the first day of the month following the two-year
anniversary of the date such funds were contributed to the
Southern ESOP;
(5) All amounts described above, plus the value of
his Transferred Common Stock Account as described in Section
19.4(g); provided, however, that the amount in his Transferred
Common Stock Account attributable to Common Stock that was
distributed on Southern Stock which had been held in the
Southern ESOP for less than two years may not be distributed
until the first day of the month following the two-year
anniversary of the date such Southern Stock was contributed to
the Southern ESOP;
(6) 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
withdrawal;
(7)(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.
65
<PAGE>
(c) For all purposes of this Plan, a reference herein to
Section 11.1(a)(6) shall be read to include a reference to Section
20.6(b)(6), and a reference herein to Section 11.1(a)(7) shall be read
to include a reference to Section 20.6(b)(7).
20.7 Loans from SCEM Transferred Accounts. Any loans which were made to
SCEM Employees pursuant to the terms of the SCEM Plan from funds under a SCEM
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 three (3). The transfer of such loans, and the
terms and conditions thereof, shall be made in accordance with the procedures
established by the Committee.
20.8 Vastar Transferred Accounts. Notwithstanding any other provisions
of this Plan to the contrary, a separate bookkeeping account shall be
established and maintained for each SCEM Employee who was a participant in the
Vastar Plan immediately prior to the Effective Date, and whose account under the
Vastar Savings Plan transferred to this Plan pursuant to a trust-to-trust
transfer. Such account shall be known as the SCEM Employees' "Vastar Savings
Transferred Account." In addition, a separate bookkeeping account shall be
established and maintained for each SCEM Employee who was a participant in the
Vastar Capital Accumulation Plan immediately prior to the Effective Date, and
whose account under the Vastar Capital Accumulation Plan transferred to this
Plan pursuant to a trust-to-trust transfer. Such account shall be known as the
SCEM Employee's "Vastar Capital Accumulation Transferred Account." A SCEM
Employee's Vastar Savings Transferred Account and Vastar Capital Accumulation
Transferred Account shall be subject to the requirements of this Article XX.
20.9 In-Service Withdrawals from Vastar Savings and Capital
Accumulation Transferred Accounts. In addition to the withdrawal options under
Article XI, a SCEM Employee may while an Eligible Employee elect to receive an
in-service withdrawal of the portion of his Vastar Savings Transferred Account
attributable to company contributions made on behalf of such SCEM Employee under
the Vastar Savings Plan (including amounts transferred to the Vastar Savings
Plan from a prior plan), and any earnings and appreciation thereon prior to the
transfer, provided that if a SCEM Employee receives an in-service withdrawal of
an amount which has not been credited to the Vastar Savings Plan and/or this
Plan for at least 24 months. For all purposes of this Plan, rollover
contributions to the Vastar Capital Accumulation Plan shall be treated as
Elective Employer Contributions.
66
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Mirant Services
Employee Savings Plan effective as April 2, 2001, to be executed this 30th day
of March, 2001.
67
<PAGE>
APPENDIX A - ELIGIBLE EMPLOYEES
Subject to the additional requirements of Section 2.26 of the Plan,
eligible employees are employees of the following:
Mirant Mid-Atlantic Services, LLC
Mirant Services, LLC
68
<PAGE>
APPENDIX B - EMPLOYING COMPANIES
The Employing Companies as of April 2, 2001 are:
Mirant Mid-Atlantic Services, LLC
Mirant Services, LLC
69
<PAGE>
Exhibit 10.24
MIRANT SERVICES
BARGAINING UNIT EMPLOYEE SAVINGS PLAN
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I - PURPOSE...........................................................................1
ARTICLE II - DEFINITIONS......................................................................2
2.1 "Account"........................................................................2
2.2 "Actual Deferral Percentage".....................................................2
2.3 "Actual Deferral Percentage Test"................................................2
2.4 "Affiliated Employer"............................................................2
2.5 "Annual Addition"................................................................2
2.6 "Average Actual Deferral Percentage".............................................3
2.7 "Beneficiary"....................................................................3
2.8 "Board of Managers"..............................................................3
2.9 "Break-in-Service Date"..........................................................3
2.10 "Code"..........................................................................3
2.11 "Committee".....................................................................3
2.12 "Common Stock"..................................................................4
2.13 "Company".......................................................................4
2.14 "Compensation"..................................................................4
2.15 "Direct Rollover"...............................................................4
2.16 "Discretionary Profit Sharing Contribution".....................................4
2.17 "Distributee"...................................................................4
2.18 "Elective Employer Contribution"................................................4
2.19 "Eligible Employee".............................................................5
2.20 "Eligible Participant"..........................................................5
2.21 "Eligible Retirement Plan"......................................................5
2.22 "Eligible Rollover Distribution"................................................5
2.23 "Employee"......................................................................5
2.24 "Employer Matching Contribution"................................................5
2.25 "Employing Company".............................................................5
2.26 "Enrollment Date"...............................................................6
2.27 "ERISA".........................................................................6
2.28 "Excess Deferral Amount"........................................................6
2.29 "Excess Deferral Contributions".................................................6
2.30 "Forfeiture"....................................................................6
2.31 "Highly Compensated Employee"...................................................6
2.32 "Hour of Service"...............................................................7
2.33 "Investment Fund"...............................................................7
2.34 "Limitation Year"...............................................................7
2.35 "Non-Highly Compensated Employee"...............................................7
2.36 "Normal Retirement Date"........................................................7
2.37 "One-Year Break in Service".....................................................7
2.38 "Participant"...................................................................7
2.39 "Plan"..........................................................................7
2.40 "Plan Year".....................................................................7
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
2.41 "Rollover Contribution".........................................................8
2.42 "SERI BU Savings Plan"..........................................................8
2.43 "SERI Covered Employees' Plan"..................................................8
2.44 "Southern"......................................................................8
2.45 "Southern Stock"................................................................8
2.46 "Surviving Spouse"..............................................................8
2.47 "Suspense Account"..............................................................8
2.48 "Trust" or "Trust Fund".........................................................8
2.49 "Trust Agreement"...............................................................8
2.50 "Trustee".......................................................................8
2.51 "Valuation Date"................................................................8
2.52 "Voluntary Participant Contribution"............................................9
2.53 "Year of Service"...............................................................9
ARTICLE III - PARTICIPATION...................................................................10
3.1 Eligibility Requirements.........................................................10
3.2 Participation upon Reemployment..................................................10
3.3 Change in Eligibility............................................................10
3.4 Loss of Eligible Employee Status.................................................10
3.5 Rollovers from Other Plans.......................................................10
3.6 Military Leave...................................................................11
ARTICLE IV - ELECTIVE EMPLOYER CONTRIBUTIONS AND VOLUNTARY
PARTICIPANT CONTRIBUTIONS...................................................12
4.1 Elective Employer Contributions..................................................12
4.2 Maximum Amount of Elective Employer Contributions................................12
4.3 Distribution of Excess Deferral Amounts..........................................12
4.4 Additional Rules Regarding Elective Employer Contributions.......................13
4.5 Section 401(k) Nondiscrimination Tests...........................................14
4.6 Voluntary Participant Contributions..............................................17
4.7 Manner and Time of Payment of Elective Employer Contributions and
Voluntary Participant Contributions.............................................17
4.8 Change in Contribution Rate......................................................17
4.9 Change in Contribution Amount....................................................17
ARTICLE V - EMPLOYER CONTRIBUTIONS............................................................19
5.1 Amount of Employer Matching Contributions........................................19
5.2 Payment of Employer Matching Contributions.......................................19
5.3 Discretionary Profit Sharing Contribution........................................19
5.4 Reversion of Employing Company Contributions.....................................20
5.5 Correction of Prior Incorrect Allocations and Distributions......................20
ARTICLE VI - LIMITATIONS ON CONTRIBUTIONS.....................................................21
6.1 Section 415 Limitations..........................................................21
6.2 Correction of Contributions in Excess of Section 415 Limits......................21
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE VII - SUSPENSION OF CONTRIBUTIONS.....................................................23
7.1 Suspension of Contributions......................................................23
7.2 Resumption of Contributions......................................................23
ARTICLE VIII - INVESTMENT OF CONTRIBUTIONS....................................................24
8.1 Investment Funds.................................................................24
8.2 Investment of Participant Contributions..........................................24
8.3 Investment of Employer Matching Contributions....................................24
8.4 Investment of Earnings...........................................................24
8.5 Transfer of Assets between Funds.................................................24
8.6 Change in Investment Direction...................................................25
8.7 Section 404(c) Plan..............................................................25
8.8 Other Stock Investment Funds.....................................................25
8.9 Southern Stock Fund..............................................................25
ARTICLE IX - MAINTENANCE AND VALUATION OF PARTICIPANTS'
ACCOUNTS....................................................................27
9.1 Establishment of Accounts........................................................27
9.2 Valuation of Investment Funds....................................................27
9.3 Rights in Investment Funds.......................................................27
ARTICLE X - VESTING...........................................................................28
10.1 Full Vesting....................................................................28
10.2 Discretionary Profit Sharing Contributions......................................28
10.3 Forfeitures.....................................................................28
10.4 Buy-Back Procedure..............................................................28
10.5 Deemed Cash-out and Deemed Buy-back.............................................28
10.6 Vesting after One-Year Break in Service.........................................29
10.7 Vesting at Normal Retirement Age................................................29
10.8 Vesting Upon Death..............................................................29
ARTICLE XI - WITHDRAWALS AND LOANS............................................................30
11.1 Withdrawals by Participants.....................................................30
11.2 Notice of Withdrawal............................................................31
11.3 Form of Withdrawal..............................................................31
11.4 Minimum Withdrawal..............................................................31
11.5 Source of Withdrawal............................................................31
11.6 Requirement of Hardship.........................................................31
11.7 Loans to Participants...........................................................33
ARTICLE XII - DISTRIBUTION TO PARTICIPANTS....................................................35
12.1 Distribution upon Retirement....................................................35
12.2 Distribution upon Disability....................................................36
12.3 Distribution upon Death.........................................................36
12.4 Designation of Beneficiary......................................................36
12.5 Distribution upon Termination of Employment.....................................37
12.6 Commencement of Benefits........................................................37
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C> <C>
12.7 Transfer between Employing Companies............................................38
12.8 Distributions to Alternate Payees...............................................38
12.9 Requirement for Direct Rollovers................................................39
12.10 Consent and Notice Requirements................................................39
12.11 Form of Payment................................................................39
12.12 Partial Distribution upon Termination of Employment............................39
ARTICLE XIII - ADMINISTRATION OF THE PLAN.....................................................41
13.1 Membership of Committee.........................................................41
13.2 Acceptance and Resignation......................................................41
13.3 Transaction of Business.........................................................41
13.4 Responsibilities in General.....................................................41
13.5 Committee as Named Fiduciary....................................................41
13.6 Rules for Plan Administration...................................................42
13.7 Employment of Agents............................................................42
13.8 Co-Fiduciaries..................................................................42
13.9 General Records.................................................................42
13.10 Liability of the Committee.....................................................42
13.11 Reimbursement of Expenses and Compensation of Committee........................43
13.12 Expenses of Plan and Trust Fund................................................43
13.13 Responsibility for Funding Policy..............................................43
13.14 Management of Assets...........................................................43
13.15 Notice and Claims Procedures...................................................44
13.16 Bonding........................................................................44
13.17 Multiple Fiduciary Capacities..................................................44
13.18 Change in Administrative Procedures............................................44
ARTICLE XIV - TRUSTEE OF THE PLAN.............................................................45
14.1 Trustee.........................................................................45
14.2 Purchase of Common Stock........................................................45
14.3 Voting of Common Stock..........................................................45
14.4 Voting of Other Investment Fund Shares..........................................46
14.5 Uninvested Amounts..............................................................46
14.6 Independent Accounting..........................................................46
ARTICLE XV - AMENDMENT AND TERMINATION OF THE PLAN............................................47
15.1 Amendment of the Plan...........................................................47
15.2 Termination of the Plan.........................................................47
15.3 Merger or Consolidation of the Plan.............................................48
ARTICLE XVI - GENERAL PROVISIONS..............................................................49
16.1 Plan Not an Employment Contract.................................................49
16.2 No Right of Assignment or Alienation............................................49
16.3 Payment to Minors and Others....................................................49
16.4 Source of Benefits..............................................................50
16.5 Unclaimed Benefits..............................................................50
16.6 Governing Law...................................................................50
</TABLE>
iv
<PAGE>
<TABLE>
<S> <C> <C>
16.7 Construction....................................................................50
ARTICLE XVII - SPECIAL RULES FOR PARTICULAR BARGAINING UNITS..................................51
17.1 United Steelworkers of America Local #12502 (Com Ed)............................51
17.2 Utility Workers' Union of America Local #392 and #480 (New England).............51
17.3 International Brotherhood of Electrical Workers Local #2129 (Mobile)............52
17.4 United Paper Workers International Union Local #423 and 1421 (Mobile)...........52
17.5 International Brotherhood of Electrical Workers Local #1900 (Mid-Atlantic)......52
17.6 International Brotherhood of Electrical Workers Local #503 (New York)...........53
17.7 International Brotherhood of Electrical Workers Local #1245 (PG&E)..............54
ARTICLE XVIII - SPECIAL RULES FOR FORMER PARTICIPANTS IN THE
SERI BU SAVINGS PLAN....................................................57
18.1 Application.....................................................................57
18.2 Hours of Service................................................................57
18.3 Years of Service................................................................57
18.4 Merger of Accounts..............................................................57
18.5 In-Service Withdrawals..........................................................57
18.6 Loans from SERI BU Savings Plan Transferred Accounts............................58
ARTICLE XIX - SPECIAL RULES FOR FORMER PARTICIPANTS IN THE
SERI COVERED EMPLOYEES PLAN..............................................60
19.1 Application.....................................................................60
19.2 Hours of Service................................................................60
19.3 Years of Service................................................................60
19.4 Merger of Accounts..............................................................60
19.5 In-Service Withdrawals..........................................................61
19.6 Loans from SERI Covered Employees' Plan Transferred Accounts....................61
APPENDIX A - EMPLOYING COMPANIES.............................................................63
</TABLE>
v
<PAGE>
MIRANT SERVICES
BARGAINING UNIT EMPLOYEE SAVINGS PLAN
Amended and Restated Effective April 2, 2001
ARTICLE I
PURPOSE
1
The purpose of the Plan is to encourage employee thrift, to create
added employee interest in the affairs of Mirant Corporation, to provide a means
for becoming a shareholder in Mirant Corporation, 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.
This Plan is an amendment and restatement of the Southern Energy
Resources Bargaining Unit Employee Savings Plan, originally effective December
19, 2000 and subsequently amended and restated effective April 2, 2001. The
initial amended and restated Plan incorporated the provisions of the Southern
Energy Resources, Inc. Bargaining Unit Savings Plan (plan number 052),
originally effective January 1, 1998 and subsequently amended, which plan was
merged into this Plan as of April 2, 2001. The Southern Energy, Inc. Bargaining
Unit Savings Plan ceased to be a separate plan effective April 2, 2001. The
initial amended and restated Plan also incorporated the provisions of the
Southern Energy Resources, Inc. Savings Plan for Covered Employees (plan number
051), originally effective April 1, 1995 and subsequently amended, which plan
was merged into this Plan as of April 2, 2001. The Southern Energy Resources,
Inc. Savings Plan for Covered Employees ceased to be a separate plan effective
April 2, 2001.
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 Article XVII, XVIII, XIX or a schedule 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.
<PAGE>
ARTICLE II
DEFINITIONS
2
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
2
<PAGE>
(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 Managers" shall mean the Board of Managers 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.
3
<PAGE>
2.12 "Common Stock" shall mean the common stock of Mirant
Corporation.
2.13 "Company" shall mean Mirant Services, LLC, and its successors.
2.14 "Compensation" shall mean the base salary or wages paid to a
Participant by an Affiliated Employer for the Plan Year during which he is
eligible to participate, including all amounts contributed by an Affiliated
Employer to a Code Section 125 cafeteria plan sponsored by an Affiliated
Employer, on behalf of a Participant pursuant to a salary reduction arrangement
under such plan, plus monthly shift and monthly seven-day schedule differentials
and before deduction of taxes, social security, etc. Compensation shall exclude
all awards under any incentive pay plans sponsored by an Affiliated Employer
includible as gross income, bonuses, regular overtime pay, any hourly shift
differentials, substitution pay, such amounts which are reimbursements to a
Participant paid by any Affiliated Employer including, but not limited to,
reimbursement for such items as moving expenses and travel and entertainment
expenses, and imputed income for automobile expenses, tax preparation expenses
and health and life insurance premiums paid by an Affiliated Employer.
Notwithstanding the foregoing, "Compensation" for a group of Eligible Employees
may be modified as provided in Article XVII or 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 "Discretionary Profit Sharing Contribution" shall mean the
Employing Company contribution made to the Accounts of Eligible Participants
under Section 5.3.
2.17 "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.
2.18 "Elective Employer Contribution" shall mean contributions made
pursuant to Section 4.1 during the Plan Year by an Employing Company, at the
election of a Participant, in lieu of cash compensation and shall include
contributions made pursuant to a salary reduction agreement.
4
<PAGE>
2.19 "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 in Article XVII or a schedule attached hereto, 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).
2.20 "Eligible Participant" shall mean an Eligible Employee who is
authorized to have Elective Employer Contributions or Voluntary Participant
Contributions or Discretionary Profit Sharing Contributions allocated to his
Account for the Plan Year.
2.21 "Eligible Retirement Plan" shall mean an individual retirement
account described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in Section 401(a) of
the Code that accepts the Distributee's Eligible Rollover Distribution. However,
in the case of an Eligible Rollover Distribution to a surviving spouse, an
Eligible Retirement Plan is an individual retirement account or individual
retirement annuity.
2.22 "Eligible Rollover Distribution" shall mean any distribution of
all or any portion of the balance to the credit of the Distributee, except that
an Eligible Rollover Distribution does not include: (a) any distribution that is
one of a series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the Distributee, the
joint lives (or joint life expectancies) of the Distributee and the
Distributee's Beneficiary, or for a specified period of 10 years or more; (b)
any distribution to the extent such distribution is required under Section
401(a)(9) of the Code; (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.
2.23 "Employee" shall mean each individual who is employed by an
Affiliated Employer under common law and each individual who is required to be
treated as an employee pursuant to the "leased employee" rules of Code Section
414(n) other than a leased employee described in Code Section 414(n)(5).
2.24 "Employer Matching Contribution" shall mean a contribution made by
an Employing Company pursuant to Section 5.1.
2.25 "Employing Company" shall mean the Company and any affiliate or
subsidiary of the Company or Mirant Corporation which the Board of Managers 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
5
<PAGE>
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.
2.26 "Enrollment Date" shall mean the first day of each payroll
period.
2.27 "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.
2.28 "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).
2.29 "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).
2.30 "Forfeiture" shall mean that portion of a Participant's Account
which is forfeitable as determined under the vesting schedule applicable to such
Participant. 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.
2.31 "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 Mirant Corporation or an Affiliated Employer (as
determined pursuant to Code Section 416) during the Plan Year or the immediately
preceding
6
<PAGE>
Plan Year, or (2) any Employee who earned more than $85,000 in the preceding
Plan Year. The $85,000 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 $85,000 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.
2.32 "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.
2.33 "Investment Fund" shall mean any one of the funds described in
Article VIII which constitutes part of the Trust Fund.
2.34 "Limitation Year" shall mean the Plan Year.
2.35 "Non-Highly Compensated Employee" shall mean an Employee who
is not a Highly Compensated Employee.
2.36 "Normal Retirement Date" shall mean the first day of the month
following a Participant's sixty-fifth (65th) birthday.
2.37 "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.
2.38 "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.
2.39 "Plan" shall mean the Mirant Services Bargaining Unit Employee
Savings Plan, as described herein or as from time to time amended.
2.40 "Plan Year" shall mean the twelve-month period commencing January
1st and ending on the December 31st next following.
7
<PAGE>
2.41 "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.
2.42 "SERI BU Savings Plan" shall mean the Southern Energy
Resources, Inc. Bargaining Unit Savings Plan.
2.43 "SERI Covered Employees' Plan" shall mean the Southern Energy
Resources, Inc. Savings Plan for Covered Employees.
2.44 "Southern" shall mean the Southern Company or any successor
thereto.
2.45 "Southern Stock" shall mean the common stock of Southern.
2.46 "Surviving Spouse" shall mean the person to whom the Participant
is married on the date of his death, if such spouse is then living, provided
that the Participant and such spouse shall have been married throughout the one
(1) year period ending on the date of the Participant's death.
2.47 "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.
2.48 "Trust" or "Trust Fund" shall mean the trust established
pursuant to the Trust Agreement.
2.49 "Trust Agreement" shall mean the trust agreement between the
Company and the Trustee, as described in Article XIV.
2.50 "Trustee" shall mean the person or corporation designated as
trustee under the Trust Agreement, including any successor or successors.
2.51 "Valuation Date" shall mean each business day of the New York
Stock Exchange.
8
<PAGE>
2.52 "Voluntary Participant Contribution" shall mean a contribution
made pursuant to Section 4.6 during the Plan Year.
2.53 "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 herein as applicable to
such Eligible Employee.
Notwithstanding anything in this Section 2.53 to the contrary, an
Employee shall not receive credit for more than one Year of Service with respect
to any twelve-consecutive-month period.
9
<PAGE>
ARTICLE III
PARTICIPATION
3
3.1 Eligibility Requirements. Each individual who was a Participant on
April 2, 2001 will continue to participate in the Plan. Each other Eligible
Employee may elect to participate in the Plan as of any Enrollment Date after he
has completed a Year of Service, or such earlier time if so provided in Article
XVII or a schedule attached hereto for his collective bargaining unit. 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 Mirant
Services Employee Savings Plan, 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
10
<PAGE>
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.
11
<PAGE>
ARTICLE IV
ELECTIVE EMPLOYER CONTRIBUTIONS AND
VOLUNTARY PARTICIPANT CONTRIBUTIONS
4
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 Article XVII or a 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 15th of each Plan Year, 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 1st;
shall specify the Participant's Excess Deferral Amount for the
preceding Plan 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.
12
<PAGE>
(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.
(d) 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.
13
<PAGE>
(c) Except as required under Section 4.4(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 1/2 by the
Participant;
(3) the termination of the Plan without
establishment of a successor plan;
(4) a financial hardship of the Participant
pursuant to Section 11.6 of the Plan;
(5) the date of a sale by an Employing Company to an
entity that is not an Affiliated Employer of substantially all
of the assets (within the meaning of Code Section 409(d)(2))
with respect to a Participant who continues employment with
the corporation acquiring such assets; or
(6) the date of the sale by an Employing Company or
an Affiliated Employer of its interest in a subsidiary (within
the meaning of Code Section 409(d)(3)) to an entity which is
not an Affiliated Employer with respect to the Participant who
continues employment with such subsidiary.
4.5 Section 401(k) Nondiscrimination Tests.
(a) Actual Deferral Percentage Test. The Plan shall satisfy
the nondiscrimination test of Section 401(k)(3) of the Code, under
which no Elective Employer Contributions shall be made that would cause
the Actual Deferral Percentage for Eligible Participants who are Highly
Compensated Employees to exceed either subsection 4.5(a)(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
14
<PAGE>
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
15
<PAGE>
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
16
<PAGE>
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 Article XVII or a 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
based on a procedure adopted by the Committee. 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
17
<PAGE>
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.
18
<PAGE>
ARTICLE V
EMPLOYER CONTRIBUTIONS
5
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 Article XVII or a 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.
Notwithstanding the foregoing, in the event a Participant is eligible to elect
to have Elective Employer Contributions and Voluntary Participant Contributions
allocated to his Account prior to his eligibility for allocation of Employer
Matching Contributions, only such Elective Employer Contributions and Voluntary
Participant Contributions as are allocated to the Participant's Account after
his eligibility for Employer Matching Contributions shall be taken into account
in determining the amount of Employer Matching Contributions to be allocated to
the Participant's Account for a Plan Year. If, as determined as of the end of a
Plan Year, a Participant received Employer Matching Contributions of less than
the maximum percentage of his Compensation allowable (as specified in Article
XVII or a schedule attached hereto) 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 Participant, not to exceed the
maximum percentage of his Compensation allowable (as specified in Article XVII
or a schedule attached hereto) for the Plan Year.
5.2 Payment of Employer Matching Contributions. Except as provided
herein, Employer Matching Contributions shall be remitted to the Trustee as soon
as practicable after the payroll period to which they relate.
5.3 Discretionary Profit Sharing Contribution. Each Employing Company
may, in its sole and absolute discretion, make an annual Discretionary Profit
Sharing Contribution to the Accounts of Participants in its employ as provided
in Article XVII or a schedule attached hereto for a Participant's collective
bargaining unit, provided such Participants are Eligible Employees as of the
last day of the Plan Year for which such Discretionary Profit Sharing
Contribution relates. Discretionary Profit Sharing Contributions may be made in
a whole dollar amount or as a percentage of the Compensation of each Participant
eligible to receive an allocation of such Discretionary Profit Sharing
Contribution under this Section 5.3, and may be made without regard to the
current or accumulated net profits of the Employing Company. Compensation for
purposes of this Section 5.3 shall mean a Participant's Compensation hereunder
plus short-term incentive bonus payments. Discretionary Profit Sharing
Contributions shall be allocated among the Accounts of Participants eligible for
such allocation who are Eligible Employees during the Plan Year for which such
Discretionary Profit Sharing Contribution relates in proportion to the ratio
that the Compensation of such Participant during the Plan Year bears to the
Compensation during such Plan Year of all such Participants in the applicable
collective bargaining unit eligible for such allocation. Discretionary Profit
Sharing Contributions shall be paid to the Trustee no later than the time
prescribed by law for filing the
19
<PAGE>
federal income tax return of the Employing Company, including extensions, for
the taxable year ending within the Plan Year for the Discretionary Profit
Sharing Contribution in question.
5.4 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, upon written direction of the
Employing Company, such contribution 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, upon written direction of
the Employing Company, such Employing Company contribution, to the
extent that it is determined to be nondeductible, 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.
5.5 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.
20
<PAGE>
ARTICLE VI
LIMITATIONS ON CONTRIBUTIONS
6
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) $35,000 (as such amount may be adjusted from
time to time pursuant to Code Section 415(d)).
(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.
21
<PAGE>
(d) forfeiture of that portion, or all, of the Discretionary
Profit Sharing 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 (separate from the Suspense Account established under Section
10.3) and shall be applied, subject to Section 6.1, to reduce the next ensuing
Employing Company contribution. Such application shall be made prior to any
Employing Company contributions that would constitute Annual Additions. No
income or investment gains and losses shall be allocated to the suspense account
provided for under this Section 6.2. 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.
22
<PAGE>
ARTICLE VII
SUSPENSION OF CONTRIBUTIONS
7
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 suspension under Section 7.1 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.
23
<PAGE>
ARTICLE VIII
INVESTMENT OF CONTRIBUTIONS
8
8.1 Investment Funds. The Investment Funds shall be selected from time
to time by the Mirant Services Investment Review Committee (the "Investment
Review Committee"). In addition to such other Investment Funds selected by the
Investment Review Committee, the Investment Funds shall include the "Company
Stock Fund." The Company Stock Fund shall be invested and reinvested in Common
Stock, provided that funds applicable to the purchase of Common Stock pending
investment of such funds may be temporarily invested in short-term United States
Government obligations, other obligations guaranteed by the United States
Government, commercial paper, or certificates of deposit, and, if the Trustee so
determines, may be transferred to money market funds utilized by the Trustee for
qualified employee benefit trusts.
8.2 Investment of Participant Contributions. Each Participant shall
direct, at the time he elects to participate in the Plan and at such other times
as may be directed by the Investment Review 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 employer
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 Investment Review Committee.
8.4 Investment of Earnings. Subject to Section 8.8, interest,
dividends, if any, and other distributions received by the Trustee with respect
to an Investment Fund shall be reinvested 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
24
<PAGE>
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 Investment Review 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 Investment Review Committee shall take such actions
as it deems necessary or appropriate in its discretion to (a) 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) appoint an independent fiduciary to carry out
such actions as the Investment Review 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 Other 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. Any interest, dividends, if any, and
other distributions received with respect to an Investment Fund established
pursuant to this Section 8.8 shall be invested pursuant to the Participant's
direction under Section 8.2 hereof.
8.9 Southern Stock Fund. All Southern Stock received by the Plan
pursuant to Section 9.1(b) shall be held in a segregated fund (the "Southern
Stock Fund"). Participants may direct investments out of the Southern Stock Fund
and into the other Investment Funds in accordance with the procedures of this
Article VIII. However, Participants may not direct investments into the Southern
Stock Fund and, should a Participant elect to direct investments out of the
Southern Stock Fund, he may not again direct any amount attributable to such
investments back into the Southern Stock Fund. In no event shall the Southern
Stock Fund remain as an Investment Fund under the Plan later than the end of the
calendar quarter which includes the five-year anniversary of the date Southern
Stock is first held in
25
<PAGE>
the Southern Stock Fund. Any Southern Stock which remains in a Participant's
Investment Fund on such date shall be reinvested as determined by the Investment
Review Committee.
26
<PAGE>
ARTICLE IX
MAINTENANCE AND VALUATION OF PARTICIPANTS' ACCOUNTS
9
9.1 Establishment of Accounts.
(a) An Account shall be established for each Participant. In
addition, subaccounts shall be established for each Participant to
reflect all Elective Employer Contributions, Voluntary Participant
Contributions, Employer Matching Contributions, Discretionary Profit
Sharing 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.
(b) Upon the transfer to the Plan of Southern Stock from the
SERI BU Savings Plan or the SERI Covered Employee Plan, a "Southern
Stock Account" subaccount shall be established to reflect a
Participant's interest in the Plan attributable to the Southern Stock
so transferred. In addition, subaccounts to the Southern Stock Account
shall be established to reflect the character of the Southern Stock
Account as Elective Employer Contributions, Voluntary Participant
Contributions, Employer Matching Contributions, and Rollover
Contributions.
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 proportion 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.
27
<PAGE>
ARTICLE X
VESTING
10
10.1 Full Vesting. Participants shall at all times be one-hundred
percent (100%) vested in all Elective Employer Contributions, Voluntary
Participant Contributions, Employer Matching Contributions and Rollover
Contributions credited to their Account.
10.2 Discretionary Profit Sharing Contributions. A Participant's
nonforfeitable percentages of Discretionary Profit Sharing 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 Article XVII or a 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
28
<PAGE>
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.
29
<PAGE>
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);
(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 such Voluntary Participant
Contributions;
(3) All amounts described above, plus 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.
30
<PAGE>
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, Southern Stock or Pepco common stock, the
Participant shall have the right to demand that such portion of the distribution
be made in the form of Common Stock, Southern Stock or Pepco common stock, as
applicable, to the extent of the whole number of shares of Common Stock,
Southern Stock or Pepco common stock, as applicable, 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 pro rata by order
of Investment Fund. The value of the amount to be distributed under any option
listed in Section 11.1 shall be determined as soon as practicable in accordance
with the procedures established by the Committee.
11.6 Requirement of Hardship.
(a) Except as provided in (e) below, a withdrawal pursuant to
Section 11.1(a)(5)(A), in addition to the other requirements of Article
XI, shall be permitted only if the Committee determines that the
withdrawal is to be made on account of an immediate and heavy financial
need of the Participant, the amount of the withdrawal does not exceed
such financial need, and the amount of the withdrawal is not reasonably
available from other resources of the Participant.
(b) For purposes of this Section 11.6, the following
shall be deemed to be immediate and heavy financial needs:
(1) Medical expenses described in Section 213(d)
of the Code, including but not limited to, expenses for:
(i) The diagnosis, cure, mitigation,
treatment, or prevention of disease, or for the
purpose of affecting any structure or function of the
body;
31
<PAGE>
(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 education fees, and
room and board expenses, for the next twelve (12) months of
post-secondary education for the Participant, the
Participant's spouse, 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)
32
<PAGE>
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 order of priority of Investment Fund(s) from which the
principal amount of the loan shall be obtained shall be pro rata.
33
<PAGE>
(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, 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.
34
<PAGE>
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 on or after his
Normal Retirement Date, 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.
35
<PAGE>
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 vested 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. 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. Notwithstanding
the foregoing, if a divorced Participant wishes to retain his former spouse as
his designated Beneficiary, such Participant must re-designate the former spouse
as designated Beneficiary subsequent to the date of the applicable divorce
decree.
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
36
<PAGE>
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 estate.
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:
37
<PAGE>
(1) the Participant reaches age sixty-five (65),
(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 1st 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 Mirant Corporation
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 1st, 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
38
<PAGE>
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 Code Section 417(a)(3); 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 the portion of any distribution which is
attributable to Common Stock, Southern Stock or Pepco common stock be
distributed in the form of such Common Stock, Southern Stock or Pepco common
stock, as applicable, 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
39
<PAGE>
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.
40
<PAGE>
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 Managers 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.
41
<PAGE>
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 to
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
42
<PAGE>
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 Investment Review
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 Investment Review 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 Investment Review Committee
shall have responsibility for the management of the assets of the Plan, or some
part thereof (including power to acquire and dispose of the assets of the Plan,
or some part thereof).
43
<PAGE>
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 Managers 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.
44
<PAGE>
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 an Investment
Manager or Investment Managers (as that term is defined in ERISA) who may be
appointed by the Committee. The Board of Managers 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 Managers 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 Mirant Corporation); 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; and (b) if such private purchase shall be a purchase of
Common Stock directly from Mirant Corporation, no commission shall be paid with
respect thereto unless such commission satisfies the requirements of Prohibited
Transaction Class Exemption 75-1. 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 Mirant Corporation, 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
45
<PAGE>
Trustee with respect to voting unallocated shares of Common Stock, if any.
Procedures similar to those described above shall also apply to voting the
Southern Stock credited to each Participant's Account.
14.4 Voting of Other Investment Fund Shares. The voting of the shares
in any Investment Fund other than as specified in Section 14.3 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 Managers 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.
46
<PAGE>
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 Managers 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, as provided in regulations
prescribed by the Secretary of Treasury.
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 Managers
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
Managers, 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 as set forth in Code Section
401(k).
47
<PAGE>
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).
48
<PAGE>
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
49
<PAGE>
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.
16.7 Construction. It is the intention of the Company that the
provisions of the Plan and the Trust be construed, administered, and enforced in
accordance with the Company's interpretation of any bargaining agreements
applicable to the collective bargaining units set forth in Article XVII or a
schedule attached hereto.
50
<PAGE>
ARTICLE XVII
SPECIAL RULES FOR PARTICULAR BARGAINING UNITS
17.1 United Steelworkers of America Local #12502 (Com Ed). In
accordance with Article XVIII and notwithstanding any other provisions of this
Plan to the contrary, the provisions of this Section 17.1 apply to Eligible
Employees who are members of the United Steelworkers of America Local #12502.
(a) For all purposes under the Plan, Hours of Service (Section
2.32) and Years of Service (Section 2.53), shall include for Eligible
Employees who were Employees on January 1, 1998, any hours of service
and years of service, respectively, credited under the Commonwealth
Edison Employee Savings and Investment Plan.
(b) The rate of Elective Employer Contributions (Section 4.1)
and Voluntary Participant Contributions (Section 4.6) shall be 1% to
16% of Compensation.
(c) The rate of Employer Matching Contributions (Section 5.1)
shall be 75% of the Participant's Elective Employer Contributions and
Voluntary Participant Contributions during each payroll period, but
such Employer Matching Contributions shall not exceed six percent (6%)
of the Participant's Compensation for such payroll period.
17.2 Utility Workers' Union of America Local #392 and #480 (New
England). In accordance with Article XVIII and notwithstanding any other
provisions of this Plan to the contrary, the provisions of this Section 17.2
apply to Eligible Employees who are members of the Utility Workers' Union of
America Local #392 and #480.
(a) For all purposes under the Plan, Hours of Service (Section
2.32) and Years of Service (Section 2.53), shall include any hours of
service and years of service, respectively, credited under the Employee
Savings Plan of Commonwealth Energy System and Subsidiary Companies.
(b) Eligibility to participate in the Plan shall be as soon as
administratively feasible following the date one Hour of Service is
completed; provided, however, that any individual subject to this
Section 17.2 who is classified as a "temporary employee" in the sole
discretion of the Company, pursuant to its normal practices, shall
remain subject to the provisions of Section 3.1 without modification.
(c) The rate of Elective Employer Contributions (Section 4.1)
and Voluntary Participant Contributions (Section 4.6) shall be 1% to
16% of Compensation.
51
<PAGE>
(d) Eligibility to receive an Employer Matching Contribution
shall be as soon as administratively feasible following the date one
Year of Service is completed.
(e) The rate of Employer Matching Contributions (Section 5.1)
shall be 100% of the Participant's Elective Employer Contributions and
Voluntary Participant Contributions during each payroll period, but
such Employer Matching Contributions shall not exceed four percent (4%)
of the Participant's Compensation for such payroll period.
17.3 International Brotherhood of Electrical Workers Local #2129
(Mobile). In accordance with Article XIX and notwithstanding any other
provisions of this Plan to the contrary, the provisions of this Section 17.3
apply to Eligible Employees who are members of the International Brotherhood of
Electrical Workers Local #2129.
(a) The rate of Elective Employer Contributions (Section 4.1)
and Voluntary Participant Contributions (Section 4.6) shall be one
percent (1%) to eighteen percent (18%) of Compensation.
(b) The rate of Employer Matching Contributions (Section 5.1)
shall be 60% of the Participant's Elective Employer Contributions and
Voluntary Participant Contributions during each payroll period, but
such Employer Matching Contributions shall not exceed six percent (6%)
of the Participant's Compensation for such payroll period.
17.4 United Paper Workers International Union Local #423 and #1421
(Mobile). In accordance with Article XIX and notwithstanding any other
provisions of this Plan to the contrary, the provisions of this Section 17.4
apply to Eligible Employees who are members of the United Paper Workers
International Union Local #423 and #1421.
(a) The rate of Elective Employer Contributions (Section 4.1)
and Voluntary Participant Contributions (Section 4.6) shall be one
percent (1%) to sixteen percent (16%) of Compensation.
(b) The rate of Employer Matching Contributions (Section 5.1)
shall be 60% of the Participant's Elective Employer Contributions and
Voluntary Participant Contributions during each payroll period, but
such Employer Matching Contributions shall not exceed six percent (6%)
of the Participant's Compensation for such payroll period.
17.5 International Brotherhood of Electrical Workers Local #1900
(Mid-Atlantic). In accordance with the prior Schedule A to this Plan and
notwithstanding any provisions of this Plan to the contrary, the provisions of
this Section 17.5 shall apply to Eligible Employees who are members of the
International Brotherhood of Electrical Workers Local #1900.
52
<PAGE>
(a) For all purposes under the Plan, Hours of Service (Section
2.32) and Years of Service (Section 2.53), shall include any hours of
service and years of service, respectively, credited under the PEPCO
Retirement Savings Plan for Bargaining Unit Employees (the "Pepco
Plan").
(b) Eligibility to participate in the Plan shall be as soon as
administratively feasible following the date one Hour of Service is
completed; provided, however, that any individual subject to this
Section 17.5 who is classified as a "temporary employee" in the sole
discretion of the Company, pursuant to its normal practices, shall
remain subject to the provisions of Section 3.1 without modification.
(c) The rate of Elective Employer Contributions (Section 4.1)
and Voluntary Participant Contributions (Section 4.6) shall be 1% to
19% of Compensation.
(d) The rate of Employer Matching Contributions (Section 5.1)
shall be 40% of the Participant's Elective Employer Contributions and
Voluntary Participant Contributions during each payroll period, but
such Employer Matching Contributions shall not exceed six percent (6%)
of the Participant's Compensation for such payroll period.
(e) In determining the ability of a Participant 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.
(f) Any Investment Fund containing common stock of Potomac
Electric Power Company ("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
effective date of the acquisition of the facilities formerly owned by
Pepco. Any Pepco common stock which remains in Participant's Investment
Fund on such date shall be reinvested as determined by the Investment
Review Committee.
(g) Any loans which were made to a Participant pursuant to the
terms of the Pepco Plan from funds under that plan 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 four (4). The transfer of such loans, and the terms and
conditions thereof, shall be made in accordance with the procedures
established by the Committee.
17.6 International Brotherhood of Electrical Workers Local #503 (New
York). In accordance with Article XVIII and notwithstanding any other provisions
of this Plan to the contrary, the provisions of this Section 17.6 shall apply to
Eligible Employees who are members of the International Brotherhood of
Electrical Workers Local #503.
(a) For all purposes under the Plan, Hours of Service (Section
2.32) and Years of Service (Section 2.53), shall include any hours of
service and years of service,
53
<PAGE>
respectively, credited under the Orange and Rockland Utilities, Inc.
Hourly Group Savings Plan (the "O&R Plan").
(b) The rate of Elective Employer Contributions (Section 4.1)
and Voluntary Participant Contributions (Section 4.6) shall be 1% to
20% of Compensation.
(c) The rate of Employer Matching Contributions (Section 5.1)
shall be 75% of the Participant's Elective Employer Contributions and
Voluntary Participant Contributions during each payroll period, but
such Employer Matching Contributions shall not exceed six percent (6%)
of the Participant's Compensation for such payroll period.
(d) In determining the ability of a Participant 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 O&R
Plan.
(e) A Discretionary Profit Sharing Contribution (Section 5.3)
may be contributed, at the discretion of the Employing Company, for
Participants who were initially hired by an Employing Company on or
after June 1, 2000 and who are Eligible Employees on the last day of a
Plan Year. A Participant's nonforfeitable percentage of Discretionary
Profit Sharing Contribution (and earnings and losses thereon) (Section
10.2) shall be determined in accordance with the following schedule:
<TABLE>
<CAPTION>
Completed Years Nonforfeitable Forfeitable
of Service Percentage Percentage
--------------- -------------- -----------
<S> <C> <C>
Less than 5 0% 100%
5 or more 100% 0%
</TABLE>
17.7 International Brotherhood of Electrical Workers Local #1245
(PG&E). Notwithstanding any provisions of this Plan to the contrary, the
provisions of this Section 17.7 shall apply to Eligible Employees who are
members of the International Brotherhood of Electrical Workers Local #1245.
(a) For all purposes under the Plan, for Employees who were
Eligible Employees prior to April 17, 2001 only, Hours of Service
(Section 2.32) and Years of Service (Section 2.53), shall include any
hours of service and years of service, respectively, credited under the
Pacific Gas and Electric Company Savings Fund Plan for Union
Represented Employees (the "PG&E Plan").
(b) Eligibility to participate in the Plan shall be as soon as
administratively feasible following the date one Hour of Service is
completed; provided, however, that any individual subject to this
Section 17.7 who is classified as a "temporary employee" in the sole
discretion of the Company, pursuant to its normal practices, shall
remain subject to the provisions of Section 3.1 without modification.
54
<PAGE>
(c) The rate of Elective Employer Contributions (Section 4.1)
and Voluntary Participant Contributions (Section 4.6) shall be 1% to
15% of Compensation.
(d) The rate of Employer Matching Contributions (Section 5.1)
shall be 50% of the Participant's Elective Employer Contributions and
Voluntary Participant Contributions during each payroll period, but
such Employer Matching Contributions shall not exceed the following
percentages of the Participant's Compensation (as applicable to the
Participant's completed Years of Service) for such payroll period.
(1) zero percent (0%) with than three (3) Years
of Service;
(2) up to three percent (3%) with at least three
(3) but less than five (5) Years of Service;
(3) up to four percent (4%) with at least five
(5) but less than ten (10) Years of Service;
(4) up to five percent (5%) with at least ten
(10) but less than fifteen (15) Years of Service;
(5) up to six percent (6%) with fifteen (15) or
more Years of Service.
(6) for a Participant who is determined to be
disabled under Section 12.2, the larger of:
(A) the maximum percentage calculated
under Section 17.7(d)(1), (2), (3) (4) or (5),
whichever is applicable; or
(B) the dollar amount which was eligible for
Employer Matching Contributions immediately prior to
the Participant's disability.
(e) For Employees who were Eligible Employees prior to April
17, 2001 only, in determining the ability of a Participant 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 PG&E
Plan.
(f) A Discretionary Profit Sharing Contribution (Section 5.3)
may be contributed, at the discretion of the Employing Company, for
Participants who were initially hired by an Employing Company on or
after April 17, 2001 and who are Eligible Employees on the last day of
a Plan Year. A Participant's nonforfeitable percentage of Discretionary
Profit Sharing Contribution (and earnings and losses thereon) (Section
10.2) shall be determined in accordance with the following schedule:
55
<PAGE>
<TABLE>
<CAPTION>
Completed Years Nonforfeitable Forfeitable
of Service Percentage Percentage
--------------- -------------- -----------
<S> <C> <C>
Less than 5 0% 100%
5 or more 100% 0%
</TABLE>
56
<PAGE>
ARTICLE XVIII
SPECIAL RULES FOR FORMER PARTICIPANTS IN THE SERI BU SAVINGS PLAN
18.1 Application. Notwithstanding any provisions of this Plan to the
contrary, the provisions of this Article XVII apply to Eligible Employees who
were hired by an Affiliated Employer and who are former participants in the SERI
BU Savings Plan.
18.2 Hours of Service. For all purposes under the Plan, Hours of
Service shall include all hours of service credited under the SERI BU Savings
Plan.
18.3 Years of Service. For all purposes under the Plan, Years of
Service shall include all years of service credited under the SERI BU Savings
Plan.
18.4 Merger of Accounts. As of the effective date of the merger of the
SERI BU Savings Plan into this Plan, each participant's account in the SERI BU
Savings Plan shall be transferred to this Plan. Such account shall be known as
the Participant's "SERI BU Savings Plan Transferred Account" and shall be
subject to the requirements of this Article XVIII.
(a) The portion of the SERI BU Savings Plan Transferred
Account attributable to "elective employer contributions," as that term
is defined in the SERI BU Savings Plan, shall be treated as Elective
Employer Contributions under this Plan.
(b) The portion of the SERI BU Savings Plan Transferred
Account attributable to "voluntary participant contributions," as that
term is defined in the SERI BU Savings Plan, shall be treated as
Voluntary Participant Contributions under this Plan.
(c) The portion of the SERI BU Savings Plan Transferred
Account which is attributable to "employer matching contributions," as
that term is defined in the SERI BU Savings Plan, shall be treated as
Employer Matching Contributions under this Plan, except the Participant
may direct the investment of such amounts in accordance with the second
paragraph of Section 8.3.
(d) The portion of the SERI BU Savings Plan Transferred
Account which is attributable to "rollover contributions," as that term
is defined in the SERI BU Savings Plan, shall be treated as Rollover
Contributions under this Plan.
18.5 In-Service Withdrawals.
57
<PAGE>
(a) In determining the ability of a Participant to withdraw
amounts under Section 11.1(a)(4) of the Plan, a Participant shall be
given credit for any participation in the SERI BU Savings Plan.
(b) Notwithstanding the provisions of Section 11.1 to the
contrary, subject to the provisions of Article XII, this Section 18.5,
and Sections 11.2 through 11.6, a Participant may make withdrawals from
his SERI BU Savings Plan Transferred 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 Rollover Contributions (including earnings and
appreciation thereon);
(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 such Voluntary Participant
Contributions;
(3) 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;
(4) (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.
(c) For all purposes of this Plan, a reference herein to
Section 11.1(a)(4) shall be read to include a reference to Section
18.5(b)(3), and a reference herein to Section 11.1(a)(5) shall be read
to include a reference to Section 18.5(b)(4).
18.6 Loans from SERI BU Savings Plan Transferred Accounts. Any loans
which were made to a Participant pursuant to the terms of the SERI BU Savings
Plan from funds under a SERI BU Savings Plan 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
58
<PAGE>
exceed three (3). The transfer of such loans, and the terms and conditions
thereof, shall be made in accordance with the procedures established by the
Committee.
59
<PAGE>
ARTICLE XIX
SPECIAL RULES FOR FORMER PARTICIPANTS IN THE SERI COVERED EMPLOYEES' PLAN
19.1 Application. Notwithstanding any provisions of this Plan to the
contrary, the provisions of this Article XVII apply to Eligible Employees who
were hired by an Affiliated Employer and who are former participants in the SERI
Covered Employees' Plan.
19.2 Hours of Service. For all purposes under the Plan, Hours of
Service shall include all hours of service credited under the SERI Covered
Employees' Plan.
19.3 Years of Service. For all purposes under the Plan, Years of
Service shall include all years of service credited under the SERI Covered
Employees' Plan.
19.4 Merger of Accounts. As of the effective date of the merger of the
SERI Covered Employees' Plan into this Plan, each participant's account in the
SERI Covered Employees' Plan shall be transferred to this Plan. Such account
shall be known as the Participant's "SERI Covered Employees' Plan Transferred
Account" and shall be subject to the requirements of this Article XIX.
(a) The portion of the SERI Covered Employees' Plan
Transferred Account attributable to "elective employer contributions,"
as that term is defined in the SERI Covered Employees' Plan, shall be
treated as Elective Employer Contributions under this Plan.
(b) The portion of the SERI Covered Employees' Plan
Transferred Account attributable to "voluntary participant
contributions," as that term is defined in the SERI Covered Employees'
Plan, shall be treated as Voluntary Participant Contributions under
this Plan.
(c) The portion of the SERI Covered Employees' Plan
Transferred Account which is attributable to "employer matching
contributions," as that term is defined in the SERI Covered Employees'
Plan, shall be treated as Employer Matching Contributions under this
Plan, except the Participant may direct the investment of such amounts
in accordance with the second paragraph of Section 8.3.
(d) The portion of the SERI Covered Employees' Plan
Transferred Account which is attributable to "rollover contributions,"
as that term is defined in the SERI Covered Employees' Plan, shall be
treated as Rollover Contributions under this Plan.
60
<PAGE>
19.5 In-Service Withdrawals. In determining the ability of a
Participant to withdraw amounts under Section 11.1(a)(4) of the Plan, a
Participant shall be given credit for any participation in the SERI Covered
Employees' Plan.
19.6 Loans from SERI Covered Employees' Plan Transferred Accounts. Any
loans which were made to a Participant pursuant to the terms of the SERI Covered
Employees' Plan from funds under a SERI Covered Employees' Plan 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 three (3). The transfer of such loans, and the terms and conditions
thereof, shall be made in accordance with the procedures established by the
Committee.
61
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Mirant Services
Bargaining Unit Employee Savings Plan effective as of April 2, 2001, to be
executed this 13th day of April, 2001.
62
<PAGE>
APPENDIX A - EMPLOYING COMPANIES
The Employing Companies as of April 2, 2001 are:
Mirant Services, LLC
Mirant Mid-Atlantic Services, LLC
63
<PAGE>
EXHIBIT 10.29
AMENDED AND RESTATED
MIRANT CORPORATION
OMNIBUS INCENTIVE COMPENSATION PLAN
<PAGE>
\
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1. ESTABLISHMENT, OBJECTIVES, AND DURATION................................................................1
ARTICLE 2. DEFINITIONS............................................................................................1
ARTICLE 3. ADMINISTRATION.........................................................................................4
ARTICLE 4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS..........................................................5
ARTICLE 5. ELIGIBILITY AND PARTICIPATION..........................................................................6
ARTICLE 6. SHARES OF COMMON STOCK.................................................................................6
ARTICLE 7. STOCK OPTIONS..........................................................................................7
ARTICLE 8. STOCK APPRECIATION RIGHTS..............................................................................8
ARTICLE 9. RESTRICTED STOCK......................................................................................10
ARTICLE 10 PERFORMANCE UNITS, PERFORMANCE SHARES, AND
CASH-BASED AWARDS................................................................................................11
ARTICLE 11. PERFORMANCE MEASURES.................................................................................12
ARTICLE 12. BENEFICIARY DESIGNATION..............................................................................13
ARTICLE 13. DEFERRALS............................................................................................14
ARTICLE 14. RIGHTS OF EMPLOYEES/DIRECTORS........................................................................14
ARTICLE 15. CHANGE IN CONTROL....................................................................................14
ARTICLE 16. AMENDMENT, MODIFICATION, AND TERMINATION.............................................................15
ARTICLE 17. WITHHOLDING..........................................................................................16
ARTICLE 18. INDEMNIFICATION......................................................................................16
ARTICLE 19. SUCCESSORS...........................................................................................17
ARTICLE 20. GENERAL PROVISIONS...................................................................................17
</TABLE>
i
<PAGE>
AMENDED AND RESTATED
MIRANT CORPORATION
OMNIBUS INCENTIVE COMPENSATION PLAN
ARTICLE 1. ESTABLISHMENT, OBJECTIVES, AND DURATION
1.1. ESTABLISHMENT OF THE PLAN. Mirant Corporation, a Delaware
corporation (formerly known as Southern Energy, Inc. and hereinafter referred to
as the "Company"), established this incentive compensation plan, formerly known
as the "Southern Energy, Inc. Omnibus Incentive Compensation Plan" (hereinafter
referred to as the "Plan"), effective April 17, 2000, subject to approval by the
Company's stockholders. The Company amended and restated this Plan, effective
April 17, 2000 (the "Effective Date"), to add the grant of Shares of Common
Stock to the awards available under the Plan. The Plan also permits the grant of
Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock, Performance Shares, Performance Units, and Cash-Based Awards.
The Company further amended and restated the Plan as of April 2, 2001 to change
the name to the "Amended and Restated Mirant Corporation Omnibus Incentive
Compensation Plan," to add provisions for the treatment of awards in the event
of certain corporate transactions, and to make certain other amendments to
reflect the completion of the spinoff as of April 2, 2001 of the Company from
Southern Company. This amended and restated Plan is subject to approval by the
Company's stockholders, and shall remain in effect as provided in Section 1.3
hereof.
1.2. OBJECTIVES OF THE PLAN. The objectives of the Plan are to optimize
the profitability and growth of the Company through annual and long-term
incentives which are consistent with the Company's goals and which link the
personal interests of Participants to those of the Company's stockholders; to
provide Participants with an incentive for excellence in individual performance;
and to promote teamwork among Participants.
The Plan is further intended to provide flexibility to the Company in
its ability to motivate, attract, and retain the services of Participants who
make significant contributions to the Company's success and to allow
Participants to share in the success of the Company.
1.3. DURATION OF THE PLAN. The Plan shall commence on the Effective
Date, as described in Section 1.1 hereof, and shall remain in effect, subject to
the right of the Board of Directors to amend or terminate the Plan pursuant to
Article 16 hereof, until all Shares subject to it shall have been purchased or
acquired according to the Plan's provisions. However, in no event may an Award
be granted under the Plan on or after April 17, 2010.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings
set forth below, and when the meaning is intended, the initial letter of the
word shall be capitalized:
<PAGE>
2.1. "AFFILIATE" shall mean any Person affiliated with the Company
as determined by the Committee.
2.2. "AWARD" means, individually or collectively, a grant under the
Plan of Shares of Common Stock, Nonqualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights, Restricted
Stock, Performance Shares, Performance Units, or Cash-Based
Awards.
2.3. "AWARD AGREEMENT" means an agreement entered into by the
Company and each Participant setting forth the terms and
provisions applicable to Awards granted under this Plan.
2.4. "BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall have the
meaning ascribed to such term in Rule 13d-3 of the General
Rules and Regulations under the Exchange Act.
2.5. "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors
of the Company.
2.6. "CASH-BASED AWARD" means an Award granted to a Participant, as
described in Article 10 herein.
2.7. "CHANGE IN CONTROL BENEFIT PLAN DETERMINATION POLICY" shall
mean the Mirant Corporation Change in Control Benefit Plan
Determination Policy, as approved by the Board of Directors,
as it may be amended from time to time in accordance with the
provisions therein.
2.8. "CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
2.9. "COMMITTEE" means the Board or any committee or committees
appointed by the Board to administer Awards to Employees, as
specified in Article 3 herein. To the extent deemed
appropriate by the Board, any such committee may be comprised
of Directors who constitute "outside directors" under Code
Section 162(m) and "Non-Employee Directors" under Rule 16b-3
of the Exchange Act.
2.10. "COMMON STOCK" shall mean the common stock of the Company.
2.11. "COMPANY" means Mirant Corporation, a Delaware corporation,
including any and all Subsidiaries and Affiliates, and any
successor thereto as provided in Article 19 herein.
2.12. "COVERED EMPLOYEE" means a Participant who, as of the date of
vesting and/or payout of an Award, as applicable, is one of
the group of "covered employees," as defined in the
regulations promulgated under Code Section 162(m), or any
successor statute.
2
<PAGE>
2.13. "DIRECTOR" means any individual who is a member of the Board
of Directors of the Company or any Subsidiary or Affiliate;
provided, however, that any Director who is employed by the
Company or any Subsidiary or Affiliate shall be considered an
Employee under the Plan.
2.14. "DISABILITY" shall have the meaning ascribed to such term in
the Participant's governing long-term disability plan, or if
no such plan exists, at the discretion of the Committee.
2.15. EFFECTIVE DATE" shall have the meaning ascribed to such term
in Section 1.1 hereof.
2.16. "EMPLOYEE" means any employee of the Company or its
Subsidiaries or Affiliates. Directors who are employed by the
Company shall be considered Employees under this Plan.
2.17. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.
2.18. "EXERCISE PRICE" means the price at which a Share may be
purchased by a Participant pursuant to an Option.
2.19. "FAIR MARKET VALUE" shall be determined on the basis of the
closing sale price on the day prior to the applicable date, as
reported in the Wall Street Journal on the applicable date,
or, if there is no such sale, then on the last previous day on
which a sale was reported; if the Shares are not listed for
trading on a national securities exchange, the fair market
value of the Shares shall be determined by the Committee in
good faith.
2.20. "FREESTANDING SAR" means an SAR that is granted independently
of any Options, as described in Article 8 herein.
2.21. "INCENTIVE STOCK OPTION" or "ISO" means an option to purchase
Shares granted under Article 7 herein and which is designated
as an Incentive Stock Option and which is intended to meet the
requirements of Code Section 422.
2.22. "INSIDER" shall mean an individual who is, on the relevant
date, an officer, director or ten percent (10%) Beneficial
Owner of any class of the Company's equity securities that is
registered pursuant to Section 12 of the Exchange Act, all as
defined under Section 16 of the Exchange Act.
2.23. "NONQUALIFIED STOCK OPTION" or "NQSO" means an option to
purchase Shares granted under Article 7 herein and which is
not intended to meet the requirements of Code Section 422.
3
<PAGE>
2.24. "OPTION" means an Incentive Stock Option or a Nonqualified
Stock Option, as described in Article 7 herein.
2.25. "PARTICIPANT" means an Employee or Director who has been
selected to receive an Award or who has outstanding an Award
granted under the Plan.
2.26. "PERFORMANCE-BASED EXCEPTION" means the performance-based
exception from the tax deductibility limitations of Code
Section 162(m).
2.27. "PERFORMANCE SHARE" means an Award granted to a Participant,
as described in Article 10 herein.
2.28. "PERFORMANCE UNIT" means an Award granted to a Participant, as
described in Article 10 herein.
2.29. "PERIOD OF RESTRICTION" means the period during which the
transfer of Shares of Restricted Stock is limited in some way
(based on the passage of time, the achievement of performance
goals, or upon the occurrence of other events as determined by
the Committee, at its discretion), and the Shares are subject
to a substantial risk of forfeiture, as provided in Article 9
herein.
2.30. "PERSON" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d)
and 14(d) thereof, including a "group" within the meaning of
Section 13(d)(3) or 14(d)(2) thereof.
2.31. "RESTRICTED STOCK" means an Award granted to a Participant
pursuant to Article 9 herein.
2.32. "RETIREMENT" means termination of employment on or after age
65, or such other age as the Committee shall determine, for
reasons other than cause, as determined by the Committee.
2.33. "SHARES" means the shares of common stock of the Company.
2.34. "STOCK APPRECIATION RIGHT" or "SAR" means an Award, granted
alone or in connection with a related Option, designated as an
SAR, pursuant to the terms of Article 8 herein.
2.35. "SUBSIDIARY" means any corporation, partnership, joint
venture, or other entity in which the Company has a voting
interest.
2.36. "TANDEM SAR" means an SAR that is granted in connection with a
related Option pursuant to Article 8 herein, the exercise of
which shall require forfeiture of the right to purchase a
Share under the related Option (and when a Share is purchased
under the Option, the Tandem SAR shall similarly be canceled).
4
<PAGE>
ARTICLE 3. ADMINISTRATION
3.1. GENERAL. The Plan shall be administered by the Board or the
committee appointed by the Board to administer the Plan. The members of the
Committee shall be appointed from time to time by, and shall serve at the
discretion of, the Board of Directors. The Board may delegate to the Committee
any or all of the administration of the Plan; provided, however, that the
administration of the Plan with respect to Awards granted to Directors may not
be so delegated. To the extent that the Board has delegated to the Committee any
authority and responsibility under the Plan, all applicable references to the
Board in the Plan shall be to the Committee. The Committee shall have the
authority to delegate administrative duties to officers, Directors, or Employees
of the Company.
3.2. AUTHORITY OF THE COMMITTEE. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select Employees and
Directors who shall participate in the Plan; determine the sizes and types of
Awards; determine the terms and conditions of Awards in a manner consistent with
the Plan; certify satisfaction of performance goals for purposes of satisfying
the requirements of Code Section 162(m); construe and interpret the Plan and any
agreement or instrument entered into under the Plan; establish, amend, or waive
rules and regulations for the Plan's administration; to authorize conversion or
substitution under the Plan of any or all outstanding Option or other Awards
held by service providers of an entity acquired by the Company on terms
determined by the Committee (without regard to limitations set forth in Section
7.3 and 8.6); and (subject to the provisions of Articles 15 and 16 herein) amend
the terms and conditions of any outstanding Award as provided in the Plan.
Further, the Committee shall make all other determinations which may be
necessary or advisable for the administration of the Plan. To the extent
permitted by law and applicable rules of a stock exchange, the Committee may
allocate all or any portion of its responsibilities and powers to any one or
more of its members and may delegate all or any part of its responsibilities and
powers to any person or persons selected by it.
3.3. DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Committee shall be final, conclusive and binding on all
persons, including the Company, its stockholders, Directors, Employees,
Participants, and their estates and beneficiaries.
ARTICLE 4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1. NUMBER OF SHARES AVAILABLE FOR GRANTS. Subject to adjustment as
provided in Section 4.2 herein, the number of Shares hereby reserved for
issuance to Participants under the Plan shall be 32,000,000, no more than
32,000,000 of which may be granted in the form of Restricted Shares and no more
than 32,000,000 of which may be granted in the form of Incentive Stock Options.
The Committee shall determine the appropriate methodology for calculating the
number of shares issued pursuant to the Plan. Unless and until the Committee
determines that an Award to a Covered Employee shall not be designed to comply
with the Performance-Based Exception, the following rules shall apply to grants
of such Awards under the Plan:
5
<PAGE>
(a) COMMON STOCK: The maximum aggregate number of Shares that may
be granted in the form of Shares of Common Stock, pursuant to
any Award granted in any one fiscal year to any one single
Participant shall be 3,200,000.
(b) STOCK OPTIONS: The maximum aggregate number of Shares that may
be granted in the form of Stock Options, pursuant to any Award
granted in any one fiscal year to any one single Participant
shall be 3,200,000.
(c) SARS: The maximum aggregate number of Shares that may be
granted in the form of Stock Appreciation Rights, pursuant to
any Award granted in any one fiscal year to any one single
Participant shall be 3,200,000.
(d) RESTRICTED STOCK: The maximum aggregate grant with respect to
Awards of Restricted Stock granted in any one fiscal year to
any one Participant shall be 3,200,000.
(e) PERFORMANCE SHARES/PERFORMANCE UNITS AND CASH-BASED AWARDS:
The maximum aggregate payout (determined as of the end of the
applicable performance period) with respect to Cash-Based
Awards or Awards of Performance Shares or Performance Units
granted in any one fiscal year to any one Participant shall be
equal to the value of 3,200,000 Shares.
4.2. ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether or
not such reorganization comes within the definition of such term in Code Section
368) or any partial or complete liquidation of the Company, such adjustment may
be made in the number and class of Shares which may be delivered under Section
4.1, in the number and class of and/or price of Shares subject to outstanding
Awards granted under the Plan, and in the Award limits set forth in subsections
4.1, as may be determined to be appropriate by the Committee, in its sole
discretion; provided, however, that the number of Shares subject to any Award
shall always be a whole number, except as otherwise determined by the Committee.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1. ELIGIBILITY. Persons eligible to participate in this Plan include
all Employees and Directors.
5.2. ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees and
Directors, those to whom Awards shall be granted and shall determine the nature
and amount of each Award.
6
<PAGE>
ARTICLE 6. SHARES OF COMMON STOCK
6.1. GRANT OF SHARES OF COMMON STOCK. Subject to the terms and
provisions of the Plan, Shares of Common Stock may be granted to Participants in
such number, and upon such terms, and at any time and from time to time as shall
be determined by the Committee.
6.2. AWARD AGREEMENT. Each grant of Shares shall be evidenced by an
Award Agreement that shall specify the number of Shares to which the grant
pertains, the Fair Market Value of the Shares on the date of grant, and such
other provisions as the Committee shall determine.
6.3. RESTRICTIONS ON GRANTS OF SHARES. Grants of Shares of Common Stock
shall not be subject to a substantial risk of forfeiture based upon continued
employment with the Company at the time of the Award. However, the Shares shall
be subject to the general requirements applicable to Shares under this Plan,
unless provided otherwise in the Award Agreement, and may be subject to other
restrictions as the Committee shall determine.
ARTICLE 7. STOCK OPTIONS
7.1. GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
Options may be granted to Participants in such number, and upon such terms, and
at any time and from time to time as shall be determined by the Committee.
7.2. AWARD AGREEMENT. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Exercise Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Award Agreement also shall specify whether the
Option is intended to be an ISO within the meaning of Code Section 422, or an
NQSO whose grant is intended not to fall under the provisions of Code Section
422.
7.3. EXERCISE PRICE. The Exercise Price for each grant of an Option
under this Plan shall be at least equal to one hundred percent (100%) of the
Fair Market Value of a Share on the date the Option is granted.
7.4. DURATION OF OPTIONS. Each Option granted to a Participant shall
expire at such time as the Board shall determine at the time of grant; provided,
however, that no Option shall be exercisable later than the tenth (10th)
anniversary date of its grant.
7.5. EXERCISE OF OPTIONS. Options granted under this Article 7 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant.
7.6. PAYMENT. Options granted under this Article 7 shall be exercised
by the delivery of a written notice of exercise to the Company, setting forth
the number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.
The Exercise Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent, or (b) by tendering
previously acquired Shares having an
7
<PAGE>
aggregate Fair Market Value at the time of exercise equal to the total Exercise
Price (provided that the Shares which are tendered must have been held by the
Participant for at least six (6) months prior to their tender to satisfy the
Exercise Price), or (c) by a combination of (a) and (b).
The Board also may allow cashless exercise as permitted under Federal
Reserve Committee's Regulation T, subject to applicable securities law
restrictions, or by any other means which the Committee determines to be
consistent with the Plan's purpose and applicable law.
Subject to any governing rules or regulations, as soon as practicable
after receipt of a written notification of exercise and full payment, the
Company shall deliver to the Participant, in the Participant's name, Share
certificates in an appropriate amount based upon the number of Shares purchased
under the Option(s) or make arrangements to have the Shares held at a bank or
other appropriate institution in noncertificated form.
Unless otherwise determined by the Committee, all payments under all of
the methods indicated above shall be paid in United States dollars.
7.7. RESTRICTIONS ON SHARE TRANSFERABILITY. The Board may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 7 as it may deem advisable, including, without
limitation, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.
7.8. TERMINATION OF EMPLOYMENT/DIRECTORSHIP. Each Participant's Option
Award Agreement shall set forth the extent to which the Participant shall have
the right to exercise the Option following termination of the Participant's
employment or directorship with the Company. Such provisions shall be determined
in the sole discretion of the Committee, shall be included in the Award
Agreement entered into with each Participant, need not be uniform among all
Options issued pursuant to this Article 7, and may reflect distinctions based on
the reasons for termination.
7.9. NONTRANSFERABILITY OF OPTIONS.
(a) INCENTIVE STOCK OPTIONS. No ISO granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated, other than by will or by the laws of descent
and distribution. Further, all ISOs granted to a Participant
under the Plan shall be exercisable during his or her lifetime
only by such Participant.
(b) NONQUALIFIED STOCK OPTIONS. Except as otherwise provided in a
Participant's Award Agreement, no NQSO granted under this
Article 7 may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by
the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, all
NQSOs granted to a Participant under this Article 7 shall be
exercisable during his or her lifetime only by such
Participant.
8
<PAGE>
ARTICLE 8. STOCK APPRECIATION RIGHTS
8.1. GRANT OF SARS. Subject to the terms and conditions of the Plan,
SARs may be granted to Participants at any time and from time to time as shall
be determined by the Committee. The Committee may grant Freestanding SARs,
Tandem SARs, or any combination of these forms of SAR.
The Committee shall have complete discretion in determining the number
of SARs granted to each Participant (subject to Article 4 herein) and,
consistent with the provisions of the Plan, in determining the terms and
conditions pertaining to such SARs.
The Exercise Price of a Freestanding SAR shall equal the Fair Market
Value of a Share on the date of grant of the SAR. The Exercise Price of Tandem
SARs shall equal the Exercise Price of the related Option.
8.2. EXERCISE OF TANDEM SARS. Tandem SARs may be exercised for all or
part of the Shares subject to the related Option upon the surrender of the right
to exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.
Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR
will expire no later than the expiration of the underlying ISO; (ii) the value
of the payout with respect to the Tandem SAR may be for no more than one hundred
percent (100%) of the difference between the Exercise Price of the underlying
ISO and the Fair Market Value of the Shares subject to the underlying ISO at the
time the Tandem SAR is exercised; and (iii) the Tandem SAR may be exercised only
when the Fair Market Value of the Shares subject to the ISO exceeds the Exercise
Price of the ISO.
8.3. EXERCISE OF FREESTANDING SARS. Freestanding SARs may be exercised
upon whatever terms and conditions the Committee, in its sole discretion,
imposes upon them.
8.4. SAR AGREEMENT. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the Exercise Price, the term of the SAR, and such
other provisions as the committee shall determine.
8.5. TERM OF SARS. The term of an SAR granted under the Plan shall be
determined by the Board, in its sole discretion; provided, however, that such
term shall not exceed ten (10) years.
8.6. PAYMENT OF SAR AMOUNT. Upon exercise of an SAR, a Participant
shall be entitled to receive payment from the Company in an amount determined by
multiplying:
(a) The difference between the Fair Market Value of a Share on the
date of exercise over the Exercise Price; by
(b) The number of Shares with respect to which the SAR is
exercised.
9
<PAGE>
At the discretion of the Committee, the payment upon SAR exercise may
be in cash, in Shares of equivalent value, or in some combination thereof. The
Committee's determination regarding the form of SAR payout shall be set forth in
the Award Agreement pertaining to the grant of the SAR.
8.7. TERMINATION OF EMPLOYMENT/DIRECTORSHIP. Each SAR Award Agreement
shall set forth the extent to which the Participant shall have the right to
exercise the SAR following termination of the Participant's employment or
directorship with the Company. Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the Award Agreement entered
into with Participants, need not be uniform among all SARs issued pursuant to
the Plan, and may reflect distinctions based on the reasons for termination.
8.8. NONTRANSFERABILITY OF SARS. Except as otherwise provided in a
Participant's Award Agreement, no SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, all SARs granted to a
Participant under the Plan shall be exercisable during his or her lifetime only
by such Participant.
ARTICLE 9. RESTRICTED STOCK
9.1. GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of
the Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Participants in such amounts as the Board shall determine.
9.2. RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Award Agreement that shall specify the Period(s)
of Restriction, the number of Shares of Restricted Stock granted, and such other
provisions as the Committee shall determine.
9.3. TRANSFERABILITY. Except as provided in this Article 9, the Shares
of Restricted Stock granted herein may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated until the end of the applicable
Period of Restriction established by the Committee and specified in the
Restricted Stock Award Agreement, or upon earlier satisfaction of any other
conditions, as specified by the Committee in its sole discretion and set forth
in the Restricted Stock Award Agreement. All rights with respect to the
Restricted Stock granted to a Participant under the Plan shall be available
during his or her lifetime only to such Participant.
9.4. OTHER RESTRICTIONS. The Committee shall impose such other
conditions and/or restrictions on any Shares of Restricted Stock granted
pursuant to the Plan as it may deem advisable including, without limitation, a
requirement that Participants pay a stipulated purchase price for each Share of
Restricted Stock, restrictions based upon the achievement of specific
performance goals (Company-wide, divisional, and/or individual), time-based
restrictions on vesting following the attainment of the performance goals,
and/or restrictions under applicable federal or state securities laws.
10
<PAGE>
To the extent deemed appropriate by the Committee, the Company may
retain the certificates representing Shares of Restricted Stock in the Company's
possession until such time as all conditions and/or restrictions applicable to
such Shares have been satisfied.
Except as otherwise provided in this Article 9, Shares of Restricted
Stock covered by each Restricted Stock grant made under the Plan shall become
freely transferable by the Participant after the last day of the applicable
Period of Restriction.
9.5. VOTING RIGHTS. If the Committee so determines, Participants
holding Shares of Restricted Stock granted hereunder may be granted the right to
exercise full voting rights with respect to those Shares during the Period of
Restriction.
9.6. DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of
Restriction, Participants holding Shares of Restricted Stock granted hereunder
may, if the Committee so determines, be credited with regular cash dividends
paid with respect to the underlying Shares while they are so held. The Committee
may apply any restrictions to the dividends that the Committee deems
appropriate. Without limiting the generality of the preceding sentence, if the
grant or vesting of Restricted Shares granted to a Covered Employee is designed
to comply with the requirements of the Performance-Based Exception, the Board
may apply any restrictions it deems appropriate to the payment of dividends
declared with respect to such Restricted Shares, such that the dividends and/or
the Restricted Shares maintain eligibility for the Performance-Based Exception.
9.7. TERMINATION OF EMPLOYMENT/DIRECTORSHIP. Each Restricted Stock
Award Agreement shall set forth the extent to which the Participant shall have
the right to receive unvested Restricted Shares following termination of the
Participant's employment or directorship with the Company. Such provisions shall
be determined in the sole discretion of the Committee, shall be included in the
Award Agreement entered into with each Participant, need not be uniform among
all Shares of Restricted Stock issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination; provided, however that,
except in the cases connected with terminations by reason of death or
Disability, the vesting of Shares of Restricted Stock which qualify for the
Performance-Based Exception and which are held by Covered Employees shall not be
accelerated unless the Committee determines otherwise.
ARTICLE 10 PERFORMANCE UNITS, PERFORMANCE SHARES, AND CASH-BASED AWARDS
10.1. GRANT OF PERFORMANCE UNITS/SHARES AND CASH-BASED AWARDS. Subject
to the terms of the Plan, Performance Units, Performance Shares, and/or
Cash-Based Awards may be granted to Participants in such amounts and upon such
terms, and at any time and from time to time, as shall be determined by the
Committee.
10.2. VALUE OF PERFORMANCE UNITS/SHARES AND CASH-BASED AWARDS. Each
Performance Unit shall have an initial value that is established by the
Committee at the time of grant. Each Performance Share shall have an initial
value equal to the Fair Market Value of a Share on the date of grant. Each
Cash-Based Award shall have a value as may be determined by
11
<PAGE>
the Committee. The Board shall set performance goals in its discretion which,
depending on the extent to which they are met, will determine the number and/or
value of Performance Units/Shares and Cash-Based Awards that will be paid out to
the Participant. For purposes of this Article 10, the time period during which
the performance goals must be met shall be called a "Performance Period."
10.3. EARNING OF PERFORMANCE UNITS/SHARES AND CASH-BASED AWARDS.
Subject to the terms of this Plan, after the applicable Performance Period has
ended, the holder of Performance Units/Shares and Cash-Based Awards shall be
entitled to receive payout on the number and value of Performance Units/Shares
and Cash-Based Awards earned by the Participant over the Performance Period, to
be determined as a function of the extent to which the corresponding performance
goals have been achieved.
10.4. FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/SHARES AND
CASH-BASED AWARDS. Payment of earned Performance Units/Shares and Cash-Based
Awards shall be made in a single lump sum or such other form designated by the
Committee following the close of the applicable Performance Period. Subject to
the terms of this Plan, the Committee, in its sole discretion, may pay earned
Performance Units/Shares and Cash-Based Awards in the form of cash or in Shares
(or in a combination thereof) which have an aggregate Fair Market Value equal to
the value of the earned Performance Units/Shares and Cash-Based Awards at the
close of the applicable Performance Period. Such Shares may be granted subject
to any restrictions deemed appropriate by the Board. The determination of the
Committee with respect to the form of payout of such Awards shall be set forth
in the Award Agreement pertaining to the grant of the Award.
At the discretion of the Board, Participants may be entitled to receive
any dividends declared with respect to Shares which have been earned in
connection with grants of Performance Units and/or Performance Shares which have
been earned, but not yet distributed to Participants (such dividends may be
subject to the same accrual, forfeiture, and payout restrictions as apply to
dividends earned with respect to Shares of Restricted Stock, as set forth in
Section 9.6 herein as determined by the Committee). In addition, Participants
may, at the discretion of the Committee, be entitled to exercise voting rights
with respect to such Shares.
10.5. TERMINATION OF EMPLOYMENT/DIRECTORSHIP. In the event that a
Participant's employment or directorship terminates for any reason, including by
reason of death, Disability or Retirement, all Performance Units/Shares and
Cash-Based Awards shall be forfeited by the Participant to the Company unless
determined otherwise by the Committee, as set forth in the Participant's Award
Agreement.
10.6. NONTRANSFERABILITY. Except as otherwise provided in a
Participant's Award Agreement, Performance Units/Shares and Cash-Based Awards
may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution.
Further, except as otherwise provided in a Participant's Award Agreement, a
Participant's rights under the Plan shall be exercisable during the
Participant's lifetime only by the Participant or the Participant's legal
representative.
12
<PAGE>
ARTICLE 11. PERFORMANCE MEASURES
Unless and until the Committee proposes for shareholder vote and
shareholders approve a change in the general performance measures set forth in
this Article 11, the attainment of which may determine the degree of payout
and/or vesting with respect to Awards to Covered Employees which are designed to
qualify for the Performance-Based Exception, the performance measure(s) to be
used for purposes of such grants shall be chosen from among:
(a) Earnings per share;
(b) Net income (before or after taxes);
(c) Return measures (including, but not limited to, return on
assets, equity, or sales);
(d) Cash flow return on investments which equals net cash flows
divided by owners equity;
(e) Earnings before or after taxes;
(f) Gross revenues;
(g) Gross margins; and
(h) Share price (including, but no limited to, growth measures and
total shareholder return).
The Committee in its sole discretion shall have the ability to set such
performance measures at the corporate level or the subsidiary/business unit
level or set such other performance measures as it deems appropriate with
respect to individuals who are not reasonably likely to be Covered Employees at
the time of payment and/or vesting.
The Committee shall have the discretion to adjust the determinations of
the degree of attainment of the preestablished performance goals; provided,
however, that Awards which are designed to qualify for the Performance-Based
Exception, and which are held by Covered Employee, may not be adjusted upward
(the Committee shall retain the discretion to adjust such Awards downward).
In the event that applicable tax and/or securities laws change to
permit Committee discretion to alter the governing performance measures without
obtaining shareholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining shareholder approval. In
addition, in the event that the Committee determines that it is advisable to
grant Awards which shall not qualify for the Performance-Based Exception, the
Committee may make such grants without satisfying the requirements of Code
Section 162(m).
13
<PAGE>
ARTICLE 12. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death before
he or she receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Participant, shall be in a form
prescribed by the Company, and will be effective only when filed by the
Participant in writing with the Company during the Participant's lifetime. In
the absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.
ARTICLE 13. DEFERRALS
The Committee may permit or require a Participant to defer such
Participant's receipt of the payment of cash or the delivery of Shares that
would otherwise be due to such Participant by virtue of the exercise of an
Option or SAR, the lapse or waiver of restrictions with respect to Restricted
Stock, or the satisfaction of any requirements or goals with respect to
Performance Units/Shares. If any such deferral election is required or
permitted, the Committee shall, in its sole discretion, establish rules and
procedures for such payment deferrals.
ARTICLE 14. RIGHTS OF EMPLOYEES/DIRECTORS
14.1. EMPLOYMENT. Nothing in the Plan shall interfere with or limit in
any way the right of the Company to terminate any Participant's employment at
any time, nor confer upon any Participant any right to continue in the employ of
the Company.
14.2. PARTICIPATION. No Employee or Director shall have the right to be
selected to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.
14.3 RIGHTS AS A STOCKHOLDER. A Participant shall have none of the
rights of a shareholder with respect to shares of Common Stock covered by any
Award until the Participant becomes the record holder of such shares.
ARTICLE 15. CHANGE IN CONTROL
15.1. CHANGE IN CONTROL. The provisions of the Change in Control
Benefit Plan Determination Policy are incorporated herein by reference to
determine the occurrence of a change in control of the Company, and the benefits
to be provided hereunder in the event of such a change in control. Any
modifications to the Change in Control Benefit Plan Determination Policy are
likewise incorporated herein.
15.2. TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE-IN-CONTROL
PROVISIONS. Notwithstanding any other provision of this Plan (but subject to the
limitations of Section 16.3 hereof) or any Award Agreement provision, the
provisions of this Article 15 may not be terminated, amended, or modified on or
after the date of a "Change in Control" (as defined in the Change in Control
Benefit Plan Determination Policy) to affect adversely any Award theretofore
granted under the Plan without the prior written consent of the Participant with
respect to
14
<PAGE>
said Participant's outstanding Awards; provided, however, the Board may
terminate, amend, or modify this Article 15 at any time and from time to time
prior to the date of a "Change in Control."
ARTICLE 16. AMENDMENT, MODIFICATION, AND TERMINATION
16.1. AMENDMENT, MODIFICATION, AND TERMINATION. Subject to the terms of
the Plan, including without limitation Section 15.2, the Board may at any time
and from time to time, alter, amend, suspend or terminate the Plan in whole or
in part.
16.2. ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4.2 hereof) effecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate;
provided that, unless the Committee determines otherwise at the time such
adjustment is considered, no such adjustment shall be authorized to the extent
that such authority would be inconsistent with the Plan's meeting the
requirements of Section 162(m) of the Code, as from time to time amended.
Without limiting the foregoing, the Committee shall have the right to
temporarily suspend the right to exercise any Award to facilitate a transaction,
to provide for the continuation of all or a portion of Awards and to make such
adjustments by such means as determined by the Committee in its discretion,
including, without limitation, for example, (a) cancellation of all or a portion
of any Award for a cash payment, (b) conversion of all or a portion of Shares
subject to an Award into other property or securities, (c) removal of any or all
restrictions and conditions on Award or (d) giving written notice to any
Participant that his or her Award will become immediately exercisable,
notwithstanding any waiting period otherwise prescribed and that the Award will
be cancelled if not exercised within a specified period of days after such
notice. Without limiting the foregoing, in the event of (i) a sale of
substantially all of the stock or assets of the Company; (ii) a merger,
consolidation, statutory share exchange or similar transaction in which the
Company is not the surviving entity; or (iii) a reverse merger in which the
Company is the surviving entity but the shares of the Common Stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash or otherwise, then to
the extent permitted by applicable law: any Awards that are outstanding as of
the consummation of such transaction shall be assumed by the surviving or
purchasing entity or its affiliate (the "Surviving Company") or converted into
or replaced by comparable awards in the Surviving Company, in a manner that
preserves the value of the Award as in effect immediately prior to the
consummation of such transaction, and no assumed, converted or replacement award
shall be subject to any terms which are less favorable than those which existed
with respect to the original Award immediately prior to such assumption,
conversion or replacement. Notwithstanding the foregoing, in the event the
Surviving Company does not assume such Awards or substitute similar Awards for
those outstanding under the Plan, then, with respect to Awards held by persons
then performing services as an Employee or Director, the vesting of such Awards
shall be accelerated in full, the holders of such Awards shall be given
reasonable opportunity to exercise such Awards prior to the consummation of such
transaction, and such Awards shall be terminated if not exercised prior to the
consummation of such transaction.
15
<PAGE>
16.3. AWARDS PREVIOUSLY GRANTED. Subject to Article 15, no termination,
amendment, or modification of the Plan shall adversely affect in any material
way any Award previously granted under the Plan, without the written consent of
the Participant holding such Award.
16.4. COMPLIANCE WITH CODE SECTION 162(m). At all times when Code
Section 162(m) is applicable, all Awards granted under this Plan to Employees
who are or could reasonably become Covered Employees as determined by the
Committee shall comply with the requirements of Code Section 162(m); provided,
however, that in the event the Committee determines that such compliance is not
desired with respect to any Award or Awards available for grant under the Plan,
then compliance with Code Section 162(m) will not be required. In addition, in
the event that changes are made to Code Section 162(m) to permit greater
flexibility with respect to any Award or Awards available under the Plan, the
Board may, subject to this Article 16, make any adjustments it deems
appropriate.
ARTICLE 17. WITHHOLDING
17.1. TAX WITHHOLDING. The Company shall have the power and the right
to deduct or withhold, or require a Participant to remit to the Company, an
amount sufficient to satisfy Federal, state, and local taxes, domestic or
foreign, required by law or regulation to be withheld with respect to any
taxable event arising as a result of this Plan.
17.2. SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock,
or upon any other taxable event arising as a result of Awards granted hereunder,
Participants may elect, subject to the approval of the Committee, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold
Shares having a Fair Market Value on the date the tax is to be determined equal
to the minimum statutory total tax which could be imposed on the transaction.
All such elections shall be irrevocable, made in writing, signed by the
Participant, and shall be subject to any restrictions or limitations that the
Board, in its sole discretion, deems appropriate.
ARTICLE 18. INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of
the Board, shall be indemnified and held harmless by the Company against and
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, action, suit, or proceeding to which he or she may be a party or in which
he or she may be involved by reason of any action taken or failure to act under
the Plan and against and from any and all amounts paid by him or her in
settlement thereof, with the Company's approval, or paid by him or her in
satisfaction of any judgment in any such action, suit, or proceeding against him
or her, provided he or she shall give the Company an opportunity, at its own
expense, to handle and defend the same before he or she undertakes to handle and
defend it on his or her own behalf. The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Company's Certificate of Incorporation or Bylaws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.
16
<PAGE>
ARTICLE 19. SUCCESSORS
All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
ARTICLE 20. GENERAL PROVISIONS
20.1. GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
20.2. SEVERABILITY. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
20.3. REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
20.4. DELIVER OF TITLE. The Company shall have no obligation to issue
or deliver evidence of title for shares of Shares under the Plan prior to:
(a) Obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and
(b) Completion of any registration or other qualification of the Shares
under any applicable national or foreign law or ruling of any
governmental body that the Company determines to be necessary or
advisable.
20.5. SECURITIES LAW COMPLIANCE. With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the 1934 Act unless determined otherwise by the
Committee. To the extent any provision of the Plan or action by the Committee
fails to so comply, it shall be deemed null and void, to the extent permitted by
law and deemed advisable by the Board.
20.6. NO ADDITIONAL RIGHTS. Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any Participant's
employment at any time, or confer upon any Participant any right to continue in
the employ of the Company.
17
<PAGE>
No employee shall have the right to be selected to receive an Award
under this Plan or having been so selected, to be selected to receive a future
Award.
Neither the Award nor any benefits arising under this Plan shall
constitute part of a Participant's employment contract with the Company or any
Affiliate, and accordingly, this Plan and the benefits hereunder may be
terminated at any time in the sole and exclusive discretion of the Committee
without giving rise to liability on the part of the Company or any Affiliate for
severance payments.
20.7. EMPLOYEES BASED OUTSIDE OF THE UNITED STATES. Notwithstanding any
provision of the Plan to the contrary, in order to comply with provisions of
laws in other countries in which the Company, its Affiliates, and its
Subsidiaries operate or have Employees, the Board or the Committee, in their
sole discretion, shall have the power and authority to:
(a) Determine which Employees employed outside the United States are
eligible to participate in the Plan;
(b) Modify the terms and conditions of any Award granted to Employees
who are employed outside the United States; and
(c) Establish subplans, modified exercise procedures, and other terms
and procedures to the extent such actions may be necessary or
advisable. Any subplans and modifications to Plan terms and
procedures established under this Section 20.7 by the Board or the
Committee shall be attached to this Plan document as Appendices.
20.8. GOVERNING LAW. To the extent not preempted by federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with and
governed by the substantive laws (excluding the conflict of laws rules) of the
state of Delaware.
IN WITNESS WHEREOF, this Mirant Corporation Omnibus Incentive
Compensation Plan has been executed by duly authorized officers of Mirant
Corporation and pursuant to resolutions of Mirant Corporation's Board of
Directors this 2nd day of April, 2001.
18
<PAGE>
EXHIBIT 10.31
AMENDED AND RESTATED
MIRANT SERVICES
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
<PAGE>
AMENDED AND RESTATED
MIRANT SERVICES
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I - PURPOSE AND ADOPTION OF PLAN
1.1 Adoption. Mirant Services, LLC (f/k/a Southern Energy Resources,
L.L.C.) hereby amends and restates the Mirant Services Supplemental Executive
Retirement Plan, effective as of the "Group Status Change Date" as defined in
the Employee Matters Agreement between Mirant Corporation (f/k/a Southern
Energy, Inc.) and the Southern Company. The Plan was originally adopted
effective June 25, 1998. The Plan shall be an unfunded deferred compensation
arrangement whose benefits shall be paid solely from the general assets of the
Employing Companies.
1.2 Purpose. The Plan is designed to provide deferred compensation
benefits primarily for a select group of management or highly compensated
employees which are not otherwise payable under the Mirant Services Pension Plan
as a result of the exclusion of incentive pay from certain definitions of
earnings set forth under such plan.
ARTICLE II - DEFINITIONS
2.1 "Accrued SERP Benefit" shall mean the actuarially determined
present value of a Participant's monthly SERP Benefit determined as of the
Participant's retirement date under the Pension Plan or, if later, the
Resolution Date, or, in the case of Plan termination, the date of such Plan
termination.
2.2 "Administrative Committee" shall mean the committee appointed by
the Board of Managers under Section 3.1 hereof to administer the Plan.
2.3 "Affiliated Employer" shall mean any corporation, other than the
Company, which is a member of the controlled group of corporations of which
Mirant Corporation is the common parent corporation, which the Board of Managers
may from time to time determine to identify under the Plan.
2.4 "Affiliated Employer Incentive Pay" shall mean such incentive pay
paid to a Participant by an Affiliated Employer which the Administrative
Committee shall from time to time identify as incentive pay under the Plan,
<PAGE>
including, but not limited to any incentive pay paid under the Mirant
Corporation Omnibus Incentive Compensation Plan, as such plan may be amended
from time to time.
2.5 "Base Pay Percentage" shall mean the percentage of a Participant's
base pay for purposes of Section 5.1(b)(2) hereof, as established by the Board
of Managers upon the recommendation of the Administrative Committee for each
Plan Year prior to the beginning of such Plan Year. In the event that the Board
of Managers does not consider the Base Pay Percentage for any particular Plan
Year, the Base Pay Percentage for such Plan Year shall be deemed to be the Base
Pay Percentage in effect for the immediately preceding Plan Year. The initial
Base Pay Percentage for the Company's Chief Executive Officer shall be ten
percent (10%) and for all other Participants shall be fifteen percent (15%).
2.6 "Beneficiary" shall mean any person, estate, trust or organization
entitled to receive any payment under the Plan upon the death of a Participant.
2.7 "Board of Managers"shall mean the Board of Managers of the Company.
2.8 "Change in Control Benefit Plan Determination Policy" shall mean
the change in control benefit plan determination policy, as approved by the
Board of Managers, as it may be amended from time to time in accordance with the
provisions therein.
2.9 "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
2.7 "Company" shall mean Mirant Services, LLC, its successors and
assigns.
2.8 "Effective Date" of this amended and restated Plan shall mean the
"Group Status Change Date" as defined in the Employee Matters Agreement between
Mirant Corporation (f/k/a Southern Energy, Inc.) and the Southern Company. The
Plan was originally effective June 25, 1998.
2.9 "Employee" shall mean any person who is an employee of an Employing
Company, excluding any person represented by a collective bargaining agent.
2.10 "Employing Company" shall mean the Company and any United States
subsidiary or affiliate of Mirant Corporation, and any other subsidiary of
Mirant Corporation, which the Board may from time to time determine to bring
under the Plan and which shall adopt the Plan, and any successor of any of them.
2.11 "Excess Benefit" shall mean the pension benefit, if any, that is
payable to a participant under the Mirant Services Supplemental Benefit Plan, as
amended from time to time.
<PAGE>
2.12 "Incentive Pay" shall mean those short-term incentive awards, if
any, earned by an Employee under the terms of the Omnibus Plan, and such other
incentive awards as may be approved from time to time by the Board of Managers;
provided, however, any payment received by the Employee under the Mirant
Services Supplemental Compensation Plan shall be specifically excluded.
2.13 "Omnibus Plan" shall mean the Mirant Corporation Omnibus Incentive
Compensation Plan, as amended from time to time.
2.14 "Participant" shall mean an Employee or former Employee who is
eligible to participate in the Plan pursuant to Section 4.1 hereof.
2.15 "Pension Plan" shall mean the Mirant Services Pension Plan, as
amended from time to time.
2.16 "Plan" shall mean the Mirant Services Supplemental Executive
Retirement Plan, as amended from time to time.
2.17 "Plan Year" shall mean the calendar year.
2.18 "Resolution Date" shall mean the first date on which all of the
amount deferred with respect to a Participant under this Plan is reasonably
ascertainable within the meaning of Treasury Regulation 31.3121(v)(2).
2.19 "SERP Benefit" shall mean the supplemental pension benefit
described in Section 5.1 hereof.
2.20 "Trust" shall mean the Mirant Corporation Deferred Compensation
Trust.
Where the context requires, the definitions of all terms set forth in
the Pension Plan shall apply with equal force and effect for purposes of
interpretation and administration of the Plan, unless said terms are otherwise
specifically defined in the Plan. The masculine pronoun shall be construed to
include the feminine pronoun and the singular shall include the plural, where
the context so requires.
ARTICLE III - ADMINISTRATION OF PLAN
3.1 Administrative Committee. The general administrative functions of
the Plan shall be managed by the Administrative Committee appointed by the Board
of Managers. The initial members of the Administrative Committee shall be the
members of the Company's Americas Benefits Committee. Administrative Committee
members shall serve at the pleasure of the Board of Managers and may be removed
and appointed as the Board of Managers in its sole discretion shall determine.
<PAGE>
3.2 Powers. The Administrative Committee shall administer the Plan in
accordance with its terms and shall have all powers necessary to carry out the
provisions of the Plan more particularly set forth herein. The Administrative
Committee shall have the discretionary authority to interpret the Plan and shall
determine all questions arising in the administration, interpretation and
application of the Plan. Any such determination by it shall be conclusive and
binding on all persons. It may adopt such regulations as it deems desirable for
the conduct of its affairs. It may appoint such accountants, counsel, actuaries,
specialists and other persons as it deems necessary or desirable in connection
with the administration of this Plan, and shall be the agent for the service of
process.
3.3 Duties of the Administrative Committee.
(a) The Administrative Committee is responsible for the daily
administration of the Plan. It may appoint other persons or entities to perform
any of its fiduciary functions. The Administrative Committee and any such
appointee may employ advisors and other persons necessary or convenient to help
it carry out its duties, including its fiduciary duties. The Administrative
Committee shall have the right to remove any such appointee from his position.
Any person, group of persons or entity may serve in more than one fiduciary
capacity.
(b) The Administrative Committee shall maintain accurate and
detailed records and accounts of Participants and of their rights under the Plan
and of all receipts, disbursements, transfers and other transactions concerning
the Plan. Such accounts, books and records relating thereto shall be open at all
reasonable times to inspection and audit by persons designated by the
Administrative Committee.
(c) The Administrative Committee shall take all steps necessary to
ensure that the Plan complies with the law at all times. These steps shall
include such items as the preparation and filing of all documents and forms
required by any governmental agency; maintaining adequate Participants' records;
recording and transmission of all notices required to be given to Participants
and their Beneficiaries; securing of such fidelity bonds as may be required by
law; and doing such other acts necessary for the proper administration of the
Plan. The Administrative Committee shall keep a record of all of its proceedings
and acts, and shall keep all such books of account, records and other data as
may be necessary for proper administration of the Plan.
3.4 Indemnification. The Employing Company shall indemnify the
Administrative Committee against any and all claims, losses, damages, expenses
and liability arising from an action or failure to act, except when the same is
finally judicially determined to be the result of gross negligence or willful
misconduct. The Employing Company may purchase at its own expense sufficient
liability insurance for the Administrative Committee to cover any and all
claims, losses, damages and expenses arising from any action or failure to act
in connection with the execution of the duties of the Administrative Committee.
No member of the Administrative Committee shall receive any compensation from
the Plan for his or her service as such.
<PAGE>
ARTICLE IV - ELIGIBILITY
4.1 Determination of Participation. The Administrative Committee in its
sole and absolute discretion shall determine those Employees who shall be
eligible to participate in the Plan. Upon being named as a Participant, such
Participant shall be deemed to have assented to the Plan and to any amendments
hereafter adopted. The Administrative Committee shall be authorized to rescind
the eligibility of any Participant if necessary to ensure that the Plan is
maintained primarily for the purpose of providing deferred compensation to a
select group of management or highly compensated employees within the meaning of
the Employee Retirement Income Security Act of 1974, as amended.
4.2 Eligibility for Benefits. Any Participant whose benefits under the
Pension Plan are limited by the exclusion of all or a portion of Incentive Pay
or Affiliated Employer Incentive Pay from the definition of Earnings thereunder
(or his spouse, as the case may be) shall be eligible to receive benefits under
the Plan provided such Participant (a) is participating in the Plan (or is
deemed to have participated in the Plan, as determined by the Administrative
Committee in its sole discretion) at the time of termination of employment with
his Employing Company while retirement eligible, (b) participated in the Plan
within ten (10) years of termination of employment with an Affiliated Employer
while retirement eligible under the Pension Plan, (c) dies while in active
service with an Employing Company or (d) dies while in active service with an
Affiliated Employer within ten (10) years of transfer of employment from an
Employing Company to such Affiliated Employer, provided in the case of death
such Employee's spouse is eligible to receive a survivor benefit under Article
VII of the Pension Plan.
ARTICLE V - BENEFITS
5.1 SERP Benefit.
(a) Subject to the terms of the Pension Plan, a
Participant shall be entitled to a monthly SERP Benefit equal to:
(1) 1.70% (1.0% if the Participant is subject to
Sections 5.1 and 5.2 of the Pension Plan) of the Participant's
Average Monthly Earnings multiplied by his years (and fraction
of a year) of Accredited Service to his Retirement Date, death
or other termination of service, including a Social Security
Offset, as adjusted, if necessary, under the terms of the
Pension Plan for commencement prior to the Participant's
Normal Retirement Date; less
(2) such Participant's Retirement Income that is
payable under the Pension Plan; less
(3) such Participant's Excess Benefit; less
<PAGE>
(4) the actuarial equivalent of any payments received
by a Participant under Section 4.1(a) of the Mirant Services
Supplemental Compensation Plan, which shall be determined
using the actuarial assumptions in Section 1.17 of such plan;
less
(5) the pension benefit, if any, that is payable to a
Participant under any other group and/or individual
supplemental benefit plan of the Company or an Affiliated
Employer; less
(6) the amount determined under Section 5.4 hereof.
(b) For purposes of Section 5.1(a)(1), the Participant's
Average Monthly Earnings shall be calculated based on the Participant's Earnings
that are considered under the Pension Plan in calculating his Retirement Income,
but without regard to the limitation of Section 401(a)(17) of the Code, and
including the following additional amounts:
(1) any portion of such Participant's base pay that
he may have elected to defer under the Mirant Corporation
Deferred Compensation Plan for Directors and Select Employees
but excluding any Incentive Pay he deferred under such plan;
and
(2) any Incentive Pay or Affiliated Employer
Incentive Pay that was earned as of the applicable Plan Year
in excess of the Participant's Base Pay Percentage for such
Plan Year.
In addition, to determine the Plan Years which produce the
highest monthly average to calculate Average Monthly Earnings under the Plan, a
Participant's Earnings shall include those additional amounts provided for in
this Section 5.1(b).
(c) For purposes of Section 5.1(a)(1), the Participant's years
of Accredited Service shall include any deemed Accredited Service provided under
the terms of any agreement concerning supplemental pension payments between the
Participant and an Employing Company or any Affiliated Employer.
(d) To the extent that a Participant's Retirement Income under
the Pension Plan is recalculated as a result of an amendment to the Pension Plan
in order to increase the amount of his Retirement Income, the Participant's SERP
Benefit shall also be recalculated in order to properly reflect such increase in
determining payments of the Participant's SERP Benefit made on or after the
effective date of such increase.
5.2 Distribution of Benefits. The SERP Benefit, as determined in
accordance with Section 5.1 hereof, shall be payable in monthly increments on
the first day of the month concurrently with the Participant's Retirement Income
under the Pension Plan. The form in which the SERP Benefit is paid shall be the
<PAGE>
same as elected by the Participant under the Pension Plan. The Beneficiary of a
Participant's SERP Benefit shall be the same as the Provisional Payee, if any,
of the Participant's Retirement Income under the Pension Plan.
5.3 FICA. If all or a portion of the Participant's Accrued SERP Benefit
has not yet been "taken into account" for employment tax purposes within the
meaning of Treasury Regulation 31.3121(v)(2), the Participant's initial monthly
SERP Benefit or, if such "taking into account" occurs thereafter, his first
monthly SERP Benefit following the Resolution Date, shall be increased by the
amount necessary to pay the tax due under the Federal Insurance Contributions
Act with respect to the amount of the Participant's Accrued SERP Benefit then
required to be "taken into account" ("FICA Tax"), if any, increased by the
amount necessary to pay the Participant's federal and state income tax (at a
combined estimated rate of forty-five percent (45%)) upon such FICA Tax and upon
such increase.
5.4 FICA Adjustment. In the event of a one-time increase in a
Participant's SERP Benefit under Section 5.3 hereof, the Employing Company shall
thereafter reduce the Participant's Accrued SERP Benefit by the aggregate
amounts, if any, paid under Section 5.3 hereof, and calculate, based upon such
reduced Accrued SERP Benefit, the difference between the Participant's monthly
SERP Benefit prior to such reduction and the SERP Benefit the Participant would
have received based upon the reduced Accrued SERP Benefit determined on an
actuarially equivalent basis in accordance with the terms of the Pension Plan,
taking into account the form of benefit elected by the Participant under the
Pension Plan.
5.5 Funding of Benefits. Except as expressly limited under the terms of
the Trust, the Employing Companies shall not reserve or otherwise set aside
funds for the payment of their obligations under the Plan. In any event, such
obligations shall be paid or deemed to be paid solely from the general assets of
the Employing Companies. Participants shall only have the status of a general,
unsecured creditor of the Employing Companies. When a Participant becomes
entitled to payment of a SERP Benefit, the Employing Company may, in its sole
discretion elect to purchase an annuity from a reputable third party annuity
provider to secure payment of all or any portion of the Participant's SERP
Benefit, pursuant to a uniform annuitization program adopted by the
Administrative Committee.
5.6 Withholding. There shall be deducted from the payment of any SERP
Benefit due under the Plan the amount of any tax required by any governmental
authority to be withheld and paid over by the Employing Company to such
governmental authority for the account of the Participant or Beneficiary
entitled to such payment.
5.7 Recourse Against Deferred Compensation Trust. In the event a
Participant disputes the calculation of his SERP Benefit, the Participant has
recourse against his Employing Company, Mirant Corporation, the Plan, and the
Trust for payment of benefits to the extent the Trust so provides.
<PAGE>
5.8 Change in Control. The provisions of the Change in Control Benefit
Plan Determination Policy are incorporated herein by reference to determine the
occurrence of a change in control or preliminary change in control of Mirant
Corporation, the benefits to be provided hereunder and the funding of the Trust
in the event of such a change in control. Any modifications to the Change in
Control Benefit Plan Determination Policy are likewise incorporated herein.
5.9 Mirant Corporation Guarantee. If the Company fails or refuses to
make payments under the Plan, Participants may have the right to obtain payment
by Mirant Corporation pursuant to the terms of the "Guarantee Agreement
Concerning Southern Energy Resources, Inc. Compensation and Benefit
Arrangements" entered into by the Company and Mirant Corporation. A
Participant's right to payment is not increased as a result of this Mirant
Corporation Guarantee. Participants have the same right to payment from Mirant
Corporation as they have from the Company. Any demand to enforce this Mirant
Corporation Guarantee should be made in writing and should reasonably and
briefly specify the manner and the amount the Company has failed to pay. Such
writing given by personal delivery or mail shall be effective upon actual
receipt. Any writing given by telegram or telecopier shall be effective upon
actual receipt if received during Mirant Corporation's normal business hours, or
at the beginning of the next business day after receipt, if not received during
Mirant Corporation's normal business hours. All arrivals by telegram or
telecopier shall be confirmed promptly after transmission in writing by
certified mail or personal delivery.
ARTICLE VI - MISCELLANEOUS
6.1 Assignment. Neither the Participant, his Beneficiary nor his legal
representative shall have any rights to sell, assign, transfer or otherwise
convey the right to receive the payment of any SERP Benefit due hereunder, which
payment and the right thereto are expressly declared to be nonassignable and
nontransferable. Any attempt to assign or transfer the right to any payment
under the Plan shall be null and void and of no effect.
6.2 Amendment and Termination. Except for the provisions of Section 5.9
hereof, which may not be amended following a "Change in Control" (as defined in
the Change in Control Benefit Plan Determination Policy), the Plan may be
amended or terminated at any time by the Board of Managers, provided that no
amendment or termination shall cause a forfeiture or reduction in any Accrued
SERP Benefits as of the date of such amendment or termination.
6.3 No Guarantee of Employment. Participation hereunder shall not be
construed as creating any contract of employment between an Employing Company
and a Participant, nor shall it limit the right of the Employing Companies to
suspend, terminate, alter or modify, whether or not for cause, the employment
relationship between the Employing Company and a Participant.
<PAGE>
6.4 Construction. This Plan shall be construed in accordance with and
governed by the laws of the State of Georgia, excluding any law which would
require the use of the laws of any other State, and to the extent such laws are
not otherwise superseded by the laws of the United States.
<PAGE>
EXHIBIT 10.32
MIRANT CORPORATION
CHANGE IN CONTROL
BENEFIT PLAN DETERMINATION POLICY
<PAGE>
MIRANT CORPORATION
CHANGE IN CONTROL
BENEFIT PLAN DETERMINATION POLICY
ARTICLE I - PURPOSE AND ADOPTION OF POLICY
1.1 Adoption of Policy. Mirant Corporation hereby