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MIRANT CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
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TABLE OF CONTENTS
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PAGE
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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
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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.
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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.
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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
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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.
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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
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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
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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
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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.
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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
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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.
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EXHIBIT 10.23
MIRANT SERVICES
EMPLOYEE SAVINGS PLAN
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TABLE OF CONTENTS
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Page
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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
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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
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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
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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
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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
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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
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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.
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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.
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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
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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
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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
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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.
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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.
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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.
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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.
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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.
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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
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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.
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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.
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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.
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(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.
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(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.
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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.
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(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).
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(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.
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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 Eligib