8-KMaterial Agreements

SOUTHERN CO 8-K Report, Material Agreement (Oct 23, 2006)

Filed October 23, 2006For Securities:SOSOJESOJFSOJCSOJDSOMN

Summary

This Form 8-K filing by The Southern Company (SO) and its subsidiaries details amendments to the Southern Company Deferred Compensation Plan and an adjustment to non-employee director compensation. The deferred compensation plan was amended to comply with Section 409A of the Internal Revenue Code, effective January 1, 2005. Key changes include allowing participants to elect specific distribution dates or schedules for receiving benefits prior to retirement and removing restrictions on investment election changes, which were previously limited to two annual periods. In addition to executive compensation adjustments, the filing also announces an increase in the annual retainer for non-employee directors. Effective November 1, 2006, the annual retainer will rise from $49,000 to $70,000. These changes impact the executive and directorial compensation structures within the Southern Company and its associated utility companies.

Key Highlights

  • 1Amendments to the Southern Company Deferred Compensation Plan were approved to comply with Section 409A of the Internal Revenue Code.
  • 2The deferred compensation plan amendments allow for earlier distributions based on participant elections and a fixed schedule, commencing prior to retirement.
  • 3Restrictions on participant investment election changes within the deferred compensation plan have been removed, expanding flexibility beyond two annual windows.
  • 4The annual retainer for Southern Company's non-employee directors will be increased from $49,000 to $70,000.
  • 5This compensation adjustment for non-employee directors is effective November 1, 2006.
  • 6The filing covers multiple Southern Company subsidiaries: Alabama Power Company, Georgia Power Company, Gulf Power Company, and Mississippi Power Company.

Frequently Asked Questions

The primary reason for the amendments is to ensure compliance with Section 409A of the Internal Revenue Code. Additionally, the plan was updated to provide participants with more flexibility regarding the timing and method of benefit distributions and to ease restrictions on investment election changes.

Executive officers eligible for the plan now have increased flexibility. They can elect to receive distributions on a specified date or according to a fixed schedule, potentially receiving benefits before retirement. They also benefit from more frequent opportunities to change their investment elections within the plan.

The adjustment represents an increase in the annual compensation paid to the company's non-employee directors, from $49,000 to $70,000, effective November 1, 2006. This change is intended to reflect the responsibilities and commitment expected of board members.

The amendments to the Southern Company Deferred Compensation Plan were made effective as of January 1, 2005, making them retroactive for compliance purposes. The director compensation adjustment is effective prospectively, starting November 1, 2006.