EIGHTH AMENDMENT TO THE
                                SOUTHERN COMPANY

                            PERFORMANCE SHARING PLAN

         WHEREAS, Southern Company Services, Inc. heretofore adopted The
Southern Company Performance Sharing Plan ("Plan"), effective as of January 1,
1997;

         WHEREAS, Southern Energy Resources, Inc. ("SERI"), an Employing Company
under the Plan, will become the employer of certain individuals currently
employed by Southern Company Energy Marketing, L.P. ("SCEM") following a
reorganization of SCEM;

         WHEREAS, the Southern Company ("Southern") anticipates that in 2001 it
will distribute pro rata to the Southern shareholders all of the stock of
Southern Energy, Inc. ("SEI") held by Southern pursuant to a tax-free spin-off
under Section 355 of the Internal Revenue Code;

         WHEREAS, in connection with such transaction, Southern and SEI have
entered into an Employee Matters Agreement ("Agreement") to allocate between
them assets, liabilities and responsibilities with respect to certain employee
compensation, benefit plans and programs, and certain employment matters;

         WHEREAS, the Performance Sharing Plan Committee ("Committee") desires
to amend the Plan to exclude the former employees of SCEM from participating in
the Plan by virtue of their employment with SERI;

         WHEREAS, the Committee desires to amend the Plan to address the
spin-off of SEI from Southern, including making such changes as are necessary
pursuant to the Agreement;

         WHEREAS, the Committee desires to amend the Plan to make certain other
technical changes and to reflect recent changes in the law; and

         WHEREAS, the Committee is authorized pursuant to Section 12.1 of the
Plan to amend the Plan at any time, provided that the amendment does not involve
a substantial increase in cost to any Employing Company or is necessary or
desirable to comply with the laws and regulations applicable to the Plan.

         NOW, THEREFORE, the Committee hereby amends the Plan as follows, to be
effective as of the dates indicated:

                                       1.

         Sections 2.13 and 2.14 of the Plan shall be eliminated in their
entirety, effective as of January 1, 2001. Each subsequent Section in Article II
shall remain as currently numbered until such time as the Plan is amended and
restated.

                                       2.

         Section 2.19 of the Plan shall be amended to read as follows, effective
as of December 22, 2000:

                  2.19 "Eligible Employee" shall mean an Employee who is
         employed by an Employing Company and who is classified by the Employing
         Company as a regular full-time, regular part-time or cooperative
         education employee who:

                  (a)      was actively employed on December 31, 1996 but who
                           will not attain his fortieth (40th) birthday on or
                           before January 1, 2002 or who was not a member of an
                           eligible class of employees under a pension plan of
                           an Employing Company on December 31, 1996 and has not
                           previously participated in any such pension plan;

                  (b)      was actively employed on December 31, 1996 and
                           properly elects to participate in this Plan pursuant
                           to the procedures established under the Plan for
                           making such election; or

                  (c)      was employed or reemployed on or after January 1,
                           1997 or who rescinded a waiver of participation in
                           The Southern Company Pension Plan pursuant to Section
                           2.7 thereof on or after January 1, 1997 that was in
                           effect on December 31, 1996.

                  "Eligible Employee" shall not include:

                  (t)      any individual, who would otherwise be eligible to
                           participate in the Plan by virtue of his employment
                           by SERI, but who (i) is an employee of SCEM on
                           December 22, 2000, (ii) was hired by SERI on or after
                           December 23, 2000, and who was a former employee of
                           SCEM, or (iii) was hired by SERI on or after December
                           23, 2000, who is employed in the Americas Group and
                           whose job function is indicated on Exhibit A attached
                           hereto;

                  (u)      an Employee who is described in Section 3.8 of the
                           Plan;

                  (v)      an Employee who has been previously employed by an
                           Employing Company, transferred to Southern Company
                           Energy Marketing, L.P., subsequently transfers back
                           to an Employing Company, and is not described in
                           paragraph (a) of Section 15.1 of The Southern Company
                           Pension Plan;

                  (w)      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;

                  (x)      any 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;

                  (y)      any individual or Employee who is classified by the
                           Employing Company as a temporary employee or as an
                           independent contractor, regardless of prior inclusion
                           under the Plan or whether such classification is
                           determined to be in error; or

                  (z)      any 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.

                                       3.

         Paragraph (t) of Section 2.19 of the Plan shall be amended to read as
follows, effective as of the Group Status Change Date as defined in the
Agreement:

         (t)      an individual who is employed by SERI;

                                       4.

         Two new definition Sections shall be added to the Plan to read as
follows, effective as of December 22, 2000:

                  2.54     "SCEM" shall mean Southern Company Energy Marketing,
                           L.P.

                  2.55     "SERI" shall mean Southern Energy Resources, Inc.





                                       5.

         A new definition Section shall be added to the Plan to read as follows,
effective as of the Group Status Change Date as defined in the Agreement:

                  2.56 "SEI" shall mean Southern Energy, Inc., any subsidiary of
         Southern Energy, Inc., or any successor thereto.

                                       6.

         Section 5.1 of the Plan shall be amended to read as follows, effective
as of January 1, 2000:

                    5.1 Section 415 Limitations. Notwithstanding any provision
         of the Plan to the contrary, the total Annual Additions allocated to
         the Account (and the accounts under all defined contribution plans
         maintained by an Affiliated Employer) of any Participant for any
         Limitation Year in accordance with Code Section 415 and the regulations
         thereunder, which are incorporated herein by this reference, shall not
         exceed the lesser of the following amounts:

                           (a) twenty-five percent (25%) of the Participant's
                  compensation (as defined in Code Section 415(c)(3) and any
                  rulings and regulations thereunder) in the Limitation Year; or

                           (b) $30,000 (as adjusted pursuant to Code Section
                  415(d)(1)(C)).

                                       7.

         Section 5.3 of the Plan shall be amended to read as follows, effective
as of January 1, 2000:

                    5.3 Combination of Plans. If an Employee participates in
         more than one defined contribution plan maintained by an Affiliated
         Employer and his Annual Additions exceed the limitations of Section
         5.1, corrective adjustments shall be made first under The Southern
         Company Employee Savings Plan and then, to the extent necessary, under
         this Plan and then, to the extent necessary, under the Southern Company
         Employee Stock Ownership Plan.

                                       8.

         The phrase ", as provided in regulations prescribed by the Secretary of
the Treasury" shall be added to the end of the last sentence in the second
paragraph of Section 12.1 of the Plan, effective as of September 5, 2000.

                                       9.

         Section 13.5 of the Plan shall be deleted in its entirety, effective as
of January 1, 2000.

                                       10.

         A new Section 15.4 shall be added to the Plan to read as follows,
effective as of the Group Status Change Date as defined in the Agreement:

                  15.4 Transfer of Plan Assets. Notwithstanding any provision of
         the Plan to the contrary, upon the distribution by the Southern Company
         to its shareholders of the SEI Stock held by the Southern Company
         pursuant to a tax-free spin-off under Code Section 355 or such similar
         transaction, the Accounts of certain active Participants who shall be
         identified in accordance with the Employee Matters Agreement entered
         into between the Southern Company and SEI ("Agreement") shall be
         transferred to a retirement plan established by SEI which is intended
         to constitute a qualified retirement plan under Code Section 401(a).
         The Committee shall determine the time of such transfers and shall
         establish such rules and procedures as its deems necessary or
         appropriate to effect the transfers, except that all actions with
         respect to the transfers shall be taken in a manner consistent with the
         Agreement.

                                       11.

         Southern Energy Resources, Inc. shall be removed as an Employing
Company in Appendix A of the Plan, effective as of the Group Status Change Date
as defined in the Agreement.

                                       12.

         Except as amended herein by this Eighth Amendment, the Plan shall
remain in full force and effect as amended and restated by the Company prior to
the adoption of this Eighth Amendment.

         IN WITNESS WHEREOF, Southern Company Services, Inc., through the duly
authorized members of the Performance Sharing Plan Committee, has adopted this
Eighth Amendment to The Southern Company Performance Sharing Plan this ____ day
of ___________________, 2000.

                              PERFORMANCE SHARING PLAN COMMITTEE: