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TVA LONG TERM  DEFERRED COMPENSATION PLAN
 Purpose:
  Eligibility:
  Procedures:
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    Participating executives enter into Deferral Agreements with TVA under
which deferred compensation credits are made to an account in the participants
name. Credits are made on an annual basis for an established period of time after which
the full amount, with interest or return as provided below, is paid to the participant.
    
    The participant must be employed in TVA at the time of the expiration of the
Deferral Agreement, or no payment under this plan will be made by TVA, and any credits
to the participants account will be extinguished. This will not apply to a separation
due to death, or under other circumstances deemed acceptable by TVA. In the event of
a participants death, his or her account balance shall be paid in a lump sum to
such person as the participant shall have designated in writing prior to his or her
death, or in the absence of any such designation, to the participants estate.
    
    Interest will be credited daily to the balance reflected in the participants
deferral account. Interest will be calculated on the same basis as interest is
calculated under the Merit Incentive Supplemental Retirement Income Plan (MISRIP). In
the alternative, a participant may choose to have their balance adjusted based on
the return on funds selected by the participant under the same conditions as are
contained in MISRIP.
    
    The entire amount credited to the participants account will be paid to the
participant in a lump sum upon the expiration of the Deferral Agreement, unless the
participant
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elects at the time the Deferral Agreement is entered into to further defer receipt
of that amount by having the balance upon expiration of the Agreement credited to
an account in his or her name in TVAs MISRIP. Credits made in that plan as a
result of such an election will be subject to all of the provisions of MISRIP, including
the payout options specified in that plan.
 Administration:
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    The Chief Officers or other officers reporting to the Board recommend executives
for participation in this plan, and also recommend the duration of the Deferral
Agreement and the amount of the yearly credit. The Board approves the participation
of individual executives as well as the amount of the credits and the duration of
the Deferral Agreement. The Chief Officers shall enter into Deferral Agreements
with participants on behalf of TVA after such approval. The Board or the Boards
designee shall have sole and exclusive responsibility for resolving any dispute
regarding this plan or a Deferral Agreement. The decisions of the Board or its designee
in all matters pertaining to the plans operation shall be final and conclusive as to
all parties.
    
    The Chief Financial Officer shall maintain an account in the name of each
participant and credit to each account interest, return, and other such amounts as may
be approved, The Chief Financial Officer shall make payments to managers
and beneficiaries pursuant to this plan.
    
    Nothing contained in this plan or any Deferral Agreement shall be
construed as conferring upon any participant the right to
continue in the employment of TVA as an executive or in any
other capacity.
    
    Nothing contained in this plan or any Deferral Agreement and no action
taken pursuant to the provisions of this plan or any Deferral
Agreement shall create or be construed to create a trust of any
kind, or a fiduciary relationship between TVA and any
participant, designated beneficiary or any other person.
    
    No transfer, assignment, pledge, seizure, or other voluntary or
involuntary alienation or encumbrance of any benefit provided
under this plan or any Deferral Agreement will be permitted or
recognized other than as specifically provided in this plan. In
the event of any such attempted alienation or encumbrance, the
Board may in its uncontrolled discretion declare the said
benefit to be temporarily or permanently forfeited by the
participant and, in lieu of paying the same to or for the
participant, may in its uncontrolled discretion pay or apply
such benefit temporarily or permanently to or for the use of any
persons who are dependents of, or are related by blood, by
marriage, or by adoption to, such participant, or the Board may in
its uncontrolled discretion cause such benefit to revert to the
general funds of TVA.
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
    
    TVA may offset amounts owed to it by participants against amounts payable to
a participant under this plan.
 Amendments:
 
    
    This plan may be amended or discontinued by the Board at any time, except that
if the Board elects to discontinue the plan, any credits already made to
participants accounts as of the date of termination will be paid to the participant at
that time, with interest as calculated under this plan.
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