Summary
This 8-K filing from The Southern Company (SO) reports on significant amendments made on December 31, 2008, to its Change in Control Benefits Protection Plan and a Deferred Compensation Agreement with executive G. Edison Holland, Jr. These changes are primarily aimed at ensuring compliance with Section 409A of the Internal Revenue Code regarding non-qualified deferred compensation plans. The key impact for investors is the alteration in the payment structure for certain executive benefits following a change in control or retirement. Previously, benefits under supplemental pension plans were paid as monthly annuity payments. Under the newly adopted Amended Plan and Amended Agreement, these benefits will now be paid as a single lump-sum value distributed over 10 annual installments. This change affects how and when these executive benefits are disbursed, which could have implications for the company's cash flow and the timing of reported expenses related to these plans.
Key Highlights
- 1The Southern Company adopted an Amended Change in Control Benefits Protection Plan (Amended Plan) effective December 31, 2008.
- 2An Amended Deferred Compensation Agreement was entered into with G. Edison Holland, Jr. on December 31, 2008.
- 3Both the Amended Plan and Amended Agreement are intended to comply with Section 409A of the Internal Revenue Code.
- 4A principal amendment changes the payment method for non-qualified pension benefits upon termination after a change in control.
- 5Benefits will now be paid as a single-sum value in 10 annual installments, replacing previous monthly annuity payments.
- 6This change applies to The Southern Company Supplemental Benefit Plan and The Southern Company Supplemental Executive Retirement Plan.
- 7The Amended Agreement with G. Edison Holland, Jr. also modifies the payment terms for his non-qualified pension benefits upon retirement to a 10-year installment plan.