Exhibit 10.26
                              AMENDED AND RESTATED
                           CHANGE IN CONTROL AGREEMENT

         THIS AMENDED AND  RESTATED  CHANGE IN CONTROL  AGREEMENT  ("Agreement")
made and entered into by and between The Southern Company ("Southern"), Southern
Energy,  Inc. ("SEI"),  Southern Energy Resources,  Inc. (the "Company") and Mr.
Raymond Dunlap Hill ("Mr. Hill")  (hereinafter  collectively  referred to as the
"Parties")  is effective as of the date of  execution of this  Agreement  unless
otherwise provided herein.

                                W I T N E S S E T H:

         WHEREAS,  Mr. Hill is the Executive Vice President and Chief  Financial
Officer of the Company  which serves as the employer with respect to assets held
by SEI;

         WHEREAS,  the  Parties  entered  into a  Change  in  Control  Agreement
effective  December 10, 1998 (the  "Original  Agreement") to provide to Mr. Hill
certain  severance  benefits under certain  circumstances  following a change in
control (as defined herein) of Southern or the Company;

         WHEREAS, the parties  subsequently  entered into a Change in Control
Agreement,  effective December 10, 1998 and executed June 17, 1999, which
superseded the Original  Agreement (the "Second  Agreement") to clarify
benefits under this Agreement  related to the Southern Energy Resources, Inc.
Deferred Incentive Compensation Plan;

         WHEREAS,  pursuant to Section 6(d) of the Second Agreement, the Parties
may amend the Second  Agreement  by  written  agreement;

         WHEREAS,  the Parties wish to enter into this Amended and Restated
Change in Control Agreement pursuant to the provisions of such Section 6(d),
to (i) change certain references from normal market bonus to target  bonus,
(ii)  incorporate  by  reference  the  definition  of "change in control"  as
provided  under the Change in Control  Benefit  Plan  Determination Policy
adopted by the board of directors of SEI,  (iii) reflect SEI's  guarantee of
benefits   under  the  Agreement,   (iv)  reference  an  Omnibus   Incentive
Compensation  Plan which may be adopted by SEI in the  future,  and (v)
certain other technical and miscellaneous modifications;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the  parties  set  forth  in  this  Agreement,   and  other  good  and  valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

     1. Definitions. For purposes of this Agreement, the following terms
     shall have the following meanings:

           (a) "Annual  Compensation"  shall mean Mr.  Hill's  highest  annual
        base  salary rate for the twelve (12) month
        period immediately preceding the date of the Change in Control plus
        target bonus.

           (b) "Board" shall mean the board of directors of the Company.

           (c) "Change in Control" shall have the meaning of such term as
        set forth in the Change in Control Benefit Plan  Determination  Policy,
        as  approved  by the board of  directors  of SEI, as such Policy may be
        amended from time to time in accordance  with the  provisions  therein.
        However,  any  amendment to the Policy which causes the  definition  of
        "Change in  Control" to be more  restrictive  than such  definition  in
        effect on the  Effective  Date  shall  not be taken  into  account  for
        purposes of this  Agreement,  unless approved by the board of directors
        of SEI or a compensation  committee thereof and agreed to in writing by
        Mr. Hill.

          (d) "COBRA  Coverage" shall mean any  continuation  coverage to which
        Mr. Hill or his dependents may be entitled pursuant to Code Section
        4980B.

          (e) "Code" shall mean the Internal Revenue Code of 1986, as amended.

          (f) "Company" shall mean Southern Energy Resources, Inc., its
        successors and assigns.

          (g) "DIC  Plan"  shall  mean the  Southern  Energy  Resources,
        Inc.  Deferred  Incentive  Compensation  Plan or replacement thereto,
        as such plans may be amended from time to time.

          (h) "Effective Date" shall mean the date of execution of this
        Agreement, unless otherwise provided herein.

          (i) "Employee  Outplacement Program" shall mean the program
        established by the Company from time to time for the
        purpose  of  assisting  participants  covered  by the  plan in  finding
        employment  outside of the Company  which  provides  for the  following
        services:
             (i)  self-assessment,   career   decision  and  goal
          setting;

            (ii)  job market  research  and job sources;

           (iii)  networking  and  interviewing   skills;
            (iv)  planning  and  implementation  strategy;
             (v)  resume writing, job hunting methods and salary negotiation;
                  and
            (vi) office support and job search resources.

          (j) "Exchange Act" shall mean the Securities Exchange Act of 1934,
        as amended.

          (k) "Good  Reason"  shall  mean,  without Mr.  Hill's  express
        written consent,  after written notice to the Board, and after a thirty
        (30) day opportunity  for the Board to cure, the continuing  occurrence
        of any of the following events:

             (i) Inconsistent  Duties.  A meaningful  and  detrimental
          alteration in Mr. Hill's  position or in the nature or status of
          his responsibilities from those in effect immediately prior to the
          Change in Control;

            (ii) Reduced Salary. A reduction of five percent (5%)
          or more by the  Company  in either of the  following:  (i) Mr.
          Hill's annual base salary rate as in effect  immediately prior
          to the Change in Control  (except  for a less than ten percent
          (10%),  across-the-board  annual base  salary  rate  reduction
          similarly  affecting at least ninety-five percent (95%) of the
          Executive  Employees of the  Company);  or (ii) the sum of Mr.
          Hill's  annual base  salary  rate plus target  bonus under the
          Company's  Short Term Plan (except for a less than ten percent
          (10%),  across-the-board  reduction of annual base salary rate
          plus  target  bonus  under  the  Short  Term  Plan   similarly
          affecting at least ninety-five  percent (95%) of the Executive
          Employees of the Company);

             (iii) Pension and Compensation  Plans. The failure by
          the Company to continue in effect any pension or  compensation
          plan or agreement in which Mr. Hill participates or is a party
          as of the date of the Change in Control or the  elimination of
          Mr. Hill's participation therein, (except for across-the-board
          plan  changes or  terminations  similarly  affecting  at least
          ninety-five  percent (95%) of the  Executive  Employees of the
          Company);  For purposes of this  Paragraph  1.(k),  a "pension
          plan or agreement" shall mean any written arrangement executed
          by an  authorized  officer of the Company  which  provides for
          payments  upon  retirement;   and  a  "compensation   plan  or
          arrangement" shall mean any written arrangement executed by an
          authorized officer of the Company which provides for periodic,
          non-discretionary  compensatory  payments  in  the  nature  of
          bonuses.

            (iv) Relocation. A change in Mr. Hill's work location
          to a location more than fifty (50) miles from the office where
          Mr.  Hill is  located  at the time of the  Change in  Control,
          unless such new work  location is within fifty (50) miles from
          Mr.  Hill's  principal  place of  residence at the time of the
          Change in  Control.  The  acceptance,  if any,  by Mr. Hill of
          employment by the Company at a work location  which is outside
          the fifty mile  radius set forth in this  Paragraph  1.(k)(iv)
          shall not be a waiver of Mr. Hill's right to refuse subsequent
          transfer by the Company to a location which is more than fifty
          (50) miles from Mr. Hill's principal place of residence at the
          time of the Change in Control, and such subsequent unconsented
          transfer shall be "Good Reason" under this Agreement; or

              (v) Benefits  and  Perquisites.  The  taking  of any
          action by the  Company  which  would  directly  or  indirectly
          materially  reduce the benefits  enjoyed by Mr. Hill under the
          Company's  retirement,  life  insurance,  medical,  health and
          accident,  disability,  deferred compensation or savings plans
          in which Mr. Hill was  participating  immediately prior to the
          Change in  Control;  or the  failure by the Company to provide
          Mr.  Hill with the number of paid  vacation  days to which Mr.
          Hill is  entitled  on the basis of years of  service  with the
          Company  in  accordance  with the  Company's  normal  vacation
          policy in effect  immediately  prior to the  Change in Control
          (except for  across-the-board  plan or vacation policy changes
          or plan terminations  similarly affecting at least ninety-five
          percent (95%) of the Executive Employees of the Company).
           (vi) For purposes of this Paragraph  1.(k),  the term  "Executive
          Employee" shall mean employees of the Company whose annual base
          salary is $130,000 or more.

         (l) "Group  Health  Plan" shall mean the group health plan
       covering Mr. Hill,  as such plan may be amended from time to time.

         (m)  "Group  Life  Insurance  Plan"  shall mean the group life
       insurance  program  covering Mr. Hill, as such plan may be amended from
       time to time.

         (n) "Month of Service"  shall mean any  calendar  month during
       which Mr.  Hill has  worked  at least  one (1) hour or was on  approved
       leave of absence while in the employ of the Company or any affiliate or
       subsidiary of Southern.

         (o) "Pension Plan" shall mean The Southern Company Pension Plan, as
       such plan may be amended from time to time.

         (p) "Performance  Dividend Plan" shall mean the Southern  Company
       Performance  Dividend Plan or any replacement thereto, as such plans may
       be amended from time to time.

         (q) "Performance  Stock Plan" shall mean the Southern Company
       Performance Stock Plan or any replacement thereto, as such plans may be
       amended from time to time.

         (r) "Southern" shall mean The Southern Company, its successors and
       assigns.

         (s) "Southern Board" shall mean the board of directors of Southern.

         (t) "SEI" shall mean Southern Energy, Inc., its successors and
       assigns.

        (u) "Southern Subsidiary" shall mean any corporation or other entity
       Controlled by Southern.

         (v) "Termination  for Cause" or "Cause" shall mean the termination of
       Mr. Hill's  employment by the Company upon the occurrence of any of the
       following:

             (i) The  willful  and  continued  failure by Mr. Hill
          substantially  to perform his duties  with the Company  (other
          than  any  such  failure   resulting  from  Mr.  Hill's  Total
          Disability or from Mr. Hill's retirement or any such actual or
          anticipated failure resulting from termination by Mr. Hill for
          Good   Reason)   after  a  written   demand  for   substantial
          performance is delivered to him by the Southern  Board,  which
          demand  specifically   identifies  the  manner  in  which  the
          Southern  Board   believes  that  he  has  not   substantially
          performed his duties; or

            (ii) The willful engaging by Mr. Hill in conduct that
          is demonstrably  and  materially  injurious  to the  Company,
          monetarily or otherwise,  including, but not limited to any of
          the following:

               (A) any willful act involving  fraud or  dishonesty  in the
            course of Mr. Hill's  employment by the Company;

               (B) the willful carrying out of any activity
            or the making of any statement which would materially
            prejudice or impair the good name and standing of the
            Company,  SEI, Southern or any Southern Subsidiary or
            would bring the Company,  SEI,  Southern or any other
            Southern Subsidiary into contempt,  ridicule or would
            reasonably shock or offend any community in which the
            Company, SEI, Southern or such Southern Subsidiary is
            located;

               (C) attendance  at  work  in  a  state  of
            intoxication  or otherwise  being found in possession
            at his workplace of any prohibited drug or substance,
            possession  of  which  would  amount  to  a  criminal
            offense;

               (D) violation of the  Company's  policies on
            drug and alcohol usage, fitness for duty requirements
            or similar policies as may exist from time to time as
            adopted by the Company's safety officer;

               (E) assault or other act of violence against
            any person during the course of  employment; or

               (F)  indictment  of  any  felony  or any misdemeanor
            involving moral turpitude.

           No act or failure to act by Mr. Hill shall be deemed "willful"
  unless done,  or omitted to be done,  by Mr. Hill not in good faith and
  without  reasonable  belief that his action or omission was in the best
  interest of the Company.

           Notwithstanding the foregoing, Mr. Hill shall not be deemed to
  have been  terminated  for Cause unless and until there shall have been
  delivered to him a copy of a resolution duly adopted by the affirmative
  vote of not less than three  quarters of the entire  membership  of the
  Southern  Board at a meeting of the Southern  Board called and held for
  such purpose  (after  reasonable  notice to Mr. Hill and an opportunity
  for him, together with counsel, to be heard before the Southern Board),
  finding that, in the good faith opinion of the Southern Board, Mr. Hill
  was  guilty of  conduct  set forth  above in clause (i) or (ii) of this
  Paragraph 1.(v) and specifying the particulars thereof in detail.

         (w) "Termination Date" shall mean the date on which Mr. Hill's
       employment  with the Company is  terminated;  provided,  however,  that
       solely for purposes of Paragraph  2.(c) hereof,  the  Termination  Date
       shall be the effective date of his retirement  pursuant to the terms of
       the Pension Plan.

         (x) "Total Disability" shall mean Mr. Hill's total disability
     within the meaning of the Pension Plan.

         (y) "Value  Creation  Plan"  shall  mean the  Southern
     Energy  Resources,  Inc.  Value  Creation  Plan,  or any replacement
     thereto, as such plans may be amended from time to time.

         (z) "Waiver and Release" shall mean the Waiver and Release
     attached hereto as Exhibit A.

         (aa) "Year of Service"  shall mean Mr.  Hill's  Months
     of Service  divided by twelve (12)  rounded to the nearest
     whole year,  rounding up if the remaining  number of months is seven (7)
     or greater and rounding down if the remaining  number of months is less
     than seven (7). If Mr. Hill has a break in his service with the Company,
     he will receive  credit under this Agreement for service prior to the
     break in service only if the break in service is less than five years.

  2. Severance Benefits.
       (a)  Eligibility.   Except  as  otherwise   provided  in  this
     Paragraph 2.(a), if Mr. Hill's  employment is involuntarily  terminated
     by the  Company at any time  during  the two year  period  following  a
     Change  in  Control  for  reasons  other  than  Cause,  or if Mr.  Hill
     voluntarily  terminates his employment with the Company for Good Reason
     at any time during the two year  period  following a Change in Control,
     Mr. Hill shall be entitled to receive the  benefits  described  in this
     Agreement  upon  the  Company's  receipt  of an  effective  Waiver  and
     Release.  Notwithstanding  anything to the  contrary  herein,  Mr. Hill
     shall not be eligible to receive  benefits  under this Agreement if Mr.
     Hill:
               (i)  voluntarily  terminates his employment  with the
            Company  for  other  than Good  Reason;

              (ii)  has his employment terminated by the Company for Cause;

             (iii)  accepts the transfer of his  employment  to Southern,
            any Southern Subsidiary or any employer that
            succeeds to all or substantially all of the assets of SEI,
            Southern or any Southern Subsidiary;

              (iv)  refuses an offer of continued  employment  with
            the Company,  any Southern  Subsidiary,  or any employer  that
            succeeds  to all or  substantially  all of the  assets of SEI,
            Southern, or any Southern Subsidiary under circumstances where
            such  refusal  would not amount to Good  Reason for  voluntary
            termination of employment; or

               (v)  elects  to  receive  the  benefits  of any other
            voluntary or involuntary severance or separation program, plan
            or  agreement  maintained  by the  Company in lieu of benefits
            under this Agreement;  provided  however,  that the receipt of
            benefits  under the terms of any  retention  plan or agreement
            shall  not  be  deemed  to be  the  receipt  of  severance  or
            separation benefits for purposes of this Agreement.

        (b)  Severance  Benefits.  If Mr.  Hill meets the  eligibility
     requirements of Paragraph 2.(a) hereof,  he shall be entitled to a cash
     severance  benefit  in an  amount  equal  to  three  times  his  Annual
     Compensation (the "Severance Amount").  If any portion of the Severance
     Amount  constitutes  an  "excess  parachute  payment"  (as such term is
     defined  under Code Section 280G  ("Excess  Parachute  Payment")),  the
     Company  shall  pay to Mr.  Hill an  additional  amount  calculated  by
     determining the amount of tax under Code Section 4999 that he otherwise
     would have paid on any Excess  Parachute  Payment  with  respect to the
     Change in Control and dividing  such amount by a decimal  determined by
     adding  the tax rate  under  Code  Section  4999  ("Excise  Tax"),  the
     hospital  insurance  tax under  Code  Section  3101(b)  ("HI  Tax") and
     federal and state  income tax  measured at the highest  marginal  rates
     ("Income Tax") and subtracting such result from the number one (1) (the
     "280G  Gross-up");  provided,  however,  that no 280G Gross-up shall be
     paid unless the Severance Amount plus all other "parachute payments" to
     Mr. Hill under Code  Section 280G  exceeds  three (3) times Mr.  Hill's
     "base  amount" (as such term is defined  under Code Section 280G ("Base
     Amount")) by ten percent (10%) or more;  provided  further,  that if no
     280G Gross-up is paid,  the  Severance  Amount shall be capped at three
     (3) times Mr. Hill's Base Amount,  less all other "parachute  payments"
     (as such term is defined under Code Section 280G) received by Mr. Hill,
     less one dollar (the "Capped Amount"), if the Capped Amount, reduced by
     I Tax and  Income  Tax,  exceeds  what  otherwise  would have been the
     severance Amount, reduced by HI Tax, Income Tax and Excise Tax.

     For purposes of this Paragraph 2.(b), whether any amount would
     constitute an Excess  Parachute  Payment and any other  calculations of
     tax,  e.g.,  Excise Tax, HI Tax,  Income Tax,  etc., or other  amounts,
     e.g., Base Amount,  Capped Amount, etc., shall be determined by the tax
     department of the independent  public  accounting firm then responsible
     for preparing  Southern's  consolidated  federal income tax return, and
     such calculations or  determinations  shall be binding upon the parties
     thereto.

      (c) Welfare  Benefits.  If Mr. Hill meets the  eligibility  requirements
     of Paragraph 2.(a) hereof and is no otherwise eligible to receive retiree
     medical and life insurance benefits provided to certain retirees pursuant
     to the terms of the Pension Plan, the Group Health Plan and the Group Life
     Insurance  Plan, he shall be entitled to the benefits set forth in this
     Paragraph 2.(c).

            (i) Mr. Hill shall be eligible to  participate  for a
          period  not to exceed  five (5) years in the  Company's  Group
          Health  Plan,  upon  payment  of both  the  Company's  and his
          monthly  premium  under  such  plan,  for a period  of six (6)
          months for each of Mr.  Hill's  Years of Service.  If Mr. Hill
          elects to receive this  extended  medical  coverage,  he shall
          also be entitled to elect coverage under the Group Health Plan
          for his dependents who were  participating in the Group Health
          Plan on Mr.  Hill's  Termination  Date  (and  for  such  other
          dependents as may be entitled to coverage under the provisions
          of the Health Insurance  Portability and Accountability Act of
          1996) for the duration of Mr. Hill's extended medical coverage
          under this  Paragraph  2.(c)(i) to the extent such  dependents
          remain eligible for dependent  coverage under the terms of the
          Group Health Plan.
                  (A) The extended medical  coverage  afforded
               to Mr. Hill pursuant to Paragraph  2.(c)(i),  as well
               as the premiums to be paid by Mr. Hill in  connection
               with such coverage  shall be determined in accordance
               with the terms of the Group  Health Plan and shall be
               subject to any changes in the terms and conditions of
               the Group Health Plan as well as any future increases
               in premiums under the Group Health Plan. The premiums
               to be  paid  by Mr.  Hill  in  connection  with  this
               extended  coverage  shall be due on the  first day of
               each month;  provided,  however,  that if he fails to
               pay his  premium  within  thirty (30) days of its due
               date, such extended coverage shall be terminated.

                  (B) Any Group Health Plan coverage  provided
               under  Paragraph  2.(c)(i) shall be a part of and not
               in addition to any COBRA  Coverage  which Mr. Hill or
               his dependent  may elect.  In the event that Mr. Hill
               or his dependent  becomes eligible to be covered,  by
               virtue  of   re-employment   or  otherwise,   by  any
               employer-sponsored  group  health plan or is eligible
               for coverage  under any  government-sponsored  health
               plan  during  the above  period,  coverage  under the
               Company's  Group Health Plan available to Mr. Hill or
               his   dependent  by  virtue  of  the   provisions  of
               Paragraph  2.(c)(i)  shall  terminate,  except as may
               otherwise  be  required  by  law,  and  shall  not be
               renewed.

           (ii) Mr. Hill shall be entitled to receive cash in an
         amount equal to the  Company's and Mr. Hill's cost of premiums
         for three (3) years of  coverage  under the Group  Health Plan
         and Group Life Insurance Plan in accordance  with the terms of
         such plans as of the date of the Change in Control.

    (d) Incentive  Plans.
 If Mr. Hill meets the  eligibility  requirements  of  Paragraph  2.(a) hereof
 he shall be entitled to the following benefits under the Company's incentive
 plans:
           (i) Stock Option Plan.
              (A)  Any of Mr.  Hill's  Options  and  Stock
           Appreciation  Rights under the Performance Stock Plan
           (the defined terms of which are  incorporated in this
           Paragraph    2.(d)(i)   by   reference)   which   are
           outstanding as of the Termination  Date and which are
           not then  exercisable and vested,  shall become fully
           exercisable  and  vested  to the full  extent  of the
           original grant; provided, that in the case of a Stock
           Appreciation Right, if Mr. Hill is subject to Section
           16(b) of the Exchange  Act,  such Stock  Appreciation
           Right shall not become fully  vested and  exercisable
           at such time if such action would result in liability
           to Mr. Hill under  Section 16(b) of the Exchange Act,
           provided further,  that any such actions not taken as
           a  result  of  the  rules  of  Section  16(b)  of the
           Exchange  Act shall be effective as of the first date
           that  such   activity   would  no  longer  result  in
           liability under Section 16(b) of the Exchange Act.

              (B) The    restrictions    and    deferral
           limitations   applicable   to  any   of  Mr.   Hill's
           Restricted  Stock as of the  Termination  Date  shall
           lapse, and such Restricted Stock shall become free of
           all  restrictions  and  limitations  and become fully
           vested  and  transferable  to the full  extent of the
           original grant.

              (C)  The    restrictions    and    deferral
           limitations  and other  conditions  applicable to any
           other  Awards held by Mr. Hill under the  Performance
           Stock Plan as of the  Termination  Date shall  lapse,
           and  such  other  Awards  shall  become  free  of all
           restrictions,  limitations  or conditions  and become
           fully vested and  transferable  to the full extent of
           the original grant.

         (ii) Performance  Dividend Plan. Provided Mr. Hill is
      not entitled to benefits under the  Performance  Dividend Plan
      (the defined terms of which are incorporated in this Paragraph
      2.(d)(ii) by reference),  if the Performance  Dividend Plan is
      in place through Mr. Hill's Termination Date and to the extent
      Mr. Hill is entitled to participate therein, Mr. Hill shall be
      entitled  to receive  cash for each Award held by Mr.  Hill on
      his  Termination  Date,  based  on  actual  performance  under
      Section 4.1 of the Performance  Dividend Plan determined as of
      the  most   recently   completed   calendar   quarter  of  the
      Performance  Period in which the  Termination  Date shall have
      occurred,  and  the  Annual  Dividend  declared  prior  to the
      Termination Date.

         (iii)  Value   Creation   Plan.  Any  of  Mr.  Hill's
      Appreciation Rights or Indexed Rights under the Value Creation
      Plan  (the  defined  terms of which are  incorporated  in this
      Paragraph 2.(d)(iii) by reference) which are outstanding as of
      the  Termination  Date and which are not then  exercisable and
      vested, shall become fully exercisable and fully vested to the
      full extent of the original grant. Notwithstanding anything in
      the Value  Creation  Plan to the  contrary,  Share  Value with
      respect to any  Appreciation  Rights or Indexed Rights held by
      Mr. Hill following his Termination  Date shall be no less than
      the Share  Value as of the date of the  Change in  Control  of
      Southern   or  SEI,   as  the  case  may  be.   In   addition,
      notwithstanding   any  provision  in  this  Agreement  to  the
      contrary,  Mr. Hill's  rights and benefits  under the terms of
      the Value Creation Plan will not be prejudiced by execution of
      this Agreement.

         (iv) Other Short Term Incentive Plans. The provisions
      of this Paragraph  2.(d)(iv)  shall apply if and to the extent
      that  Mr.  Hill is a  participant  in any  other  "short  term
      compensation  plan" not  otherwise  previously  referred to in
      this  Paragraph  2.(d).  Provided  Mr.  Hill is not  otherwise
      entitled  to  a  plan  payout  under  any  change  of  control
      provisions  of such  plans,  if the "short  term  compensation
      plan" is in place as of the Termination Date and to the extent
      Mr. Hill is entitled to  participate  therein,  Mr. Hill shall
      receive  cash  in an  amount  equal  to his  award  under  the
      Company's   "short  term   incentive   plan"  for  the  annual
      performance  period in which the  Termination  Date shall have
      occurred,  at Mr. Hill's target performance level and prorated
      by the number of months which have passed since the  beginning
      of the annual  performance  period until his Termination Date.
      For purposes of this Paragraph  2.(d)(iv) the term "short term
      incentive   compensation   plan"  shall  mean  any   incentive
      compensation  plan or  arrangement  adopted  in writing by the
      Company  which  provides  for annual,  recurring  compensatory
      bonuses based upon articulated performance criteria.

        (v) DIC Plan.  Provided  Mr. Hill is not  entitled to
      benefits under Article V of the DIC Plan (the defined terms of
      which  are  incorporated   into  this  Paragraph   2(d)(v)  by
      reference),  if the DIC Plan is in place  through  Mr.  Hill's
      Termination  Date and to the extent  that Mr. Hill is entitled
      to  participate  therein,  any of Mr.  Hill's Awards as of the
      Termination  Date which are not then vested shall become fully
      vested and Mr. Hill shall be  entitled to receive  cash in the
      amount equal to Mr. Hill's Account as of his Termination Date.
      Notwithstanding  anything in the DIC Plan to the contrary, the
      investment  return on the Awards determined in accordance with
      Section  3.1 of the DIC  Plan for any Plan  Year  following  a
      Change in Control shall be no less than the investment  return
      determined in  accordance  with Section 3.1 of the DIC Plan as
      of the date of such  Change in Control  with  respect to those
      Accounts  which are  outstanding as of the date of such Change
      in Control.

        (vi) Omnibus  Incentive  Compensation  Plan. In the event of
      an initial  public  offering of SEI and the adoption of the Southern
      Energy,  Inc. Omnibus Incentive  Compensation Plan (the "Omnibus Plan"),
      Mr. Hill's right to receive  incentive  compensation  under the Omnibus
      Plan in the event of a "change in  control," as defined  therein,
      shall be governed by the terms of such Omnibus Plan and the award(s)
      granted thereunder.

      (e) Payment of Benefits.  Any amounts due under this Agreement shall be
   paid in one (1) lump sum payment as soon as administratively  practicable
   following the later of: (i) Mr. Hill's Termination Date, or (ii) upon Mr.
   Hill's tender of an effective Waiver and Release to the Company in the form
   of Exhibit A attached hereto and the expiration of any applicable
   revocation period for such waiver. In the event of a  dispute  with  respect
   to  liability  or amount of any benefit  due  hereunder,  an  effective
   Waiver  and  Release  shall be tendered  at the time of final  resolution
   of any  such  dispute  when payment is tendered by the  Company.
   Effective  May 10,  2000,  if the Company fails or refuses to make payments
   under the Agreement, Mr. Hill may have the right to obtain  payment by SEI
   pursuant  to the terms of the "Guarantee  Agreement  Concerning  Southern
   Energy Resources,  Inc. Compensation and Benefit  Arrangements" entered
   into by the Company and SEI. Mr.  Hill's right to payment is not  increased
   as a result of this SEI  Guarantee.  He has the same right to payment
   from SEI as he would have from the Company.  Any demand to enforce this SEI
   Guarantee should be made in writing and should reasonably and briefly
   specify the manner and the amount the Company  has failed to pay.  Such
   writing  given by personal  delivery or mail shall be effective upon actual
   receipt.  Any writing given by telegram or telecopier  shall be effective
   upon actual receipt if received  during  SEI's  normal  business  hours,
   or at the beginning  of the next  business  day after  receipt,  if not
   received during  SEI's  normal  business  hours.  All  arrivals  by
   telegram or telecopier shall be confirmed promptly after transmission in
   writing by certified mail or personal delivery.

      (f) Benefits in the Event of Death. In the event of Mr. Hill's
   death prior to the payment of all amounts due under this Agreement, Mr.
   Hill's  estate  shall be entitled to receive as due any amounts not yet
   paid  under  this   Agreement  upon  the  tender  by  the  executor  or
   administrator of the estate of an effective Waiver and Release.

      (g) Legal Fees. In the event of a dispute between Mr. Hill and
   the Company with regard to any amounts due  hereunder,  if any material
   issue in such  dispute is finally  resolved in Mr.  Hill's  favor,  the
   Company shall  reimburse Mr. Hill's legal fees incurred with respect to
   all issues in such  dispute in an amount not to exceed  fifty  thousand
   dollars ($50,000).

      (h) Employee  Outplacement  Services.  Mr. Hill shall be eligible to
   participate  in the Employee  Outplacement Program, which program shall not
   be less than six (6) months duration measured from Mr. Hill's Termination
   Date.

      (i) Non-qualified  Retirement and Deferred Compensation Plans.
   The Parties agree that subsequent to a Change in Control, any claims by
   Mr.  Hill  for  benefits  under  any  of  the  Company's  non-qualified
   retirement  or deferred  compensation  plans shall be resolved  through
   binding  arbitration  in accordance  with the provisions and procedures
   set  forth in  Paragraph  5 hereof  and if any  material  issue in such
   dispute is finally  resolved in Mr.  Hill's  favor,  the Company  shall
   reimburse  Mr.  Hill's  legal fees in the manner  provided in Paragraph
   2.(g) hereof.

  3. Transfer of Employment.  In the event that Mr. Hill's  employment by
the  Company is  terminated  during the two year  period  following  a Change in
Control and Mr. Hill accepts employment by Southern, a Southern  Subsidiary,  or
any employer  that  succeeds to all or  substantially  all of the assets of SEI,
Southern or any Southern Subsidiary,  the Company shall assign this Agreement to
Southern, such Southern Subsidiary, or successor employer, Southern shall accept
such  assignment  or cause such  Southern  Subsidiary  or successor  employer to
accept such  assignment,  and such  assignee  shall become the "Company" for all
purposes hereunder.

  4. No Mitigation.  If Mr. Hill is otherwise  eligible to receive
benefits under Paragraph 2 of this Agreement,  he shall have no duty or
obligation to seek other  employment  following his  Termination Date and,
except as otherwise  provided in Paragraph 2.(a)(iii)  hereof,  the amounts
due Mr.  Hill  hereunder  shall not be reduced or  suspended  if Mr.  Hill
accepts  such  subsequent employment.

  5. Arbitration.
      (a)  Any  dispute,  controversy  or  claim  arising  out of or
  relating to the Company's  obligations to pay severance  benefits under
  this Agreement,  or the breach  thereof,  shall be settled and resolved
  solely by  arbitration in accordance  with the  Commercial  Arbitration
  Rules  of  the  American  Arbitration  Association  ("AAA")  except  as
  otherwise  provided  herein.  The  arbitration  shall  be the  sole and
  exclusive forum for resolution of any such claim for severance benefits
  and the arbitrators'  award shall be final and binding.  The provisions
  of this  Paragraph 5 are not  intended to apply to any other  disputes,
  claims  or  controversies  arising  out of or  relating  to Mr.  Hill's
  employment by the Company or the termination thereof.

     (b) Arbitration  shall be initiated by serving a written  notice of demand
  for arbitration  to Mr. Hill, in the case of the Company, or to the Southern
  Board, in the case of Mr. Hill.

     (c) The  arbitration  shall be held in Atlanta,  Georgia.  The
  arbitrators shall apply the law of the State of Georgia,  to the extent
  not preempted by federal law, excluding any law which would require the
  application of the law of another state.

     (d) The parties shall appoint  arbitrators within fifteen (15)
  business  days  following  service of the demand for  arbitration.  The
  number of arbitrators shall be three. One arbitrator shall be appointed
  by Mr. Hill, one arbitrator shall be appointed by the Company,  and the
  two arbitrators shall appoint a third. If the arbitrators  cannot agree
  on a third  arbitrator  within  thirty  (30)  business  days  after the
  service  of  demand  for  arbitration,  the third  arbitrator  shall be
  selected by the AAA.

     (e) The arbitration  filing fee shall be paid by Mr. Hill. All
  other costs of  arbitration  shall be borne equally by Mr. Hill and the
  Company, provided,  however, that the Company shall reimburse such fees
  and costs in the event any  material  issue in such  dispute is finally
  resolved  in Mr.  Hill's  favor and Mr. Hill is  reimbursed  legal fees
  under Paragraph 2.(g) hereof.

     (f) The parties  agree that they will  faithfully  observe the
  rules that govern any arbitration  between them, they will abide by and
  perform any award rendered by the arbitrators in any such  arbitration,
  including  any award of  injunctive  relief,  and a judgment of a court
  having jurisdiction may be entered upon an award.

     (g) The  parties  agree that  nothing in this  Paragraph  5 is
  intended to preclude  any court  having  jurisdiction  from issuing and
  enforcing  in any lawful  manner  such  temporary  restraining  orders,
  preliminary injunctions, and other interim measures of relief as may be
  necessary to prevent harm to a party's interests or as otherwise may be
  appropriate pending the conclusion of arbitration  proceedings pursuant
  to this Agreement regardless of whether an arbitration proceeding under
  this  Paragraph 5 has begun.  The parties  further  agree that  nothing
  herein  shall  prevent any court from  entering  and  enforcing  in any
  lawful manner such judgments for permanent  equitable  relief as may be
  necessary to prevent harm to a party's interests or as otherwise may be
  appropriate  following the issuance of arbitral awards pursuant to this
  Agreement.

  6. Miscellaneous.
     (a) Funding of Benefits.  Unless the Board,  in its discretion
  shall determine otherwise,  the benefits payable to Mr. Hill under this
  Agreement  shall not be funded in any  manner  and shall be paid by the
  Company  out of its  general  assets,  which  assets are subject to the
  claims of the Company's creditors.

     (b) Withholding.  There shall be deducted from the payment of any benefit
  due under this Agreement the amount of any tax required by any  governmental
  authority to be withheld  and paid over by the Company to such  governmental
  authority for the account of Mr. Hill.

     (c) Assignment.
  Mr. Hill shall have no rights to sell,  assign,  transfer,  encumber,  or
  otherwise  convey the right to receive the payment of any benefit due
  hereunder,  which payment and the rights thereto are expressly  declared to be
  nonassignable and nontransferable. Any attempt to do so shall be null and void
  and of no effect.

     (d) Amendment and  Termination.  The Agreement  may be amended or
  terminated  only by a writing  executed by the parties.

     (e) Construction.   This  Agreement  shall  be  construed  in
  accordance  with and  governed by the laws of the State of Georgia,  to
  the extent not preempted by federal law,  disregarding any provision of
  law which would require the application of the law of another state.

     (f) Pooling  Accounting.   Notwithstanding  anything  to  the
  contrary herein, if, but for any provision of this Agreement,  a Change
  in  Control   transaction   would  otherwise  be  accounted  for  as  a
  pooling-of-interests  under APB  No.16  ("Pooling  Accounting")  (after
  giving  effect to any and all other facts and  circumstances  affecting
  whether   such  Change  in  Control   transaction   would  use  Pooling
  Accounting,),  such  provision or  provisions of this  Agreement  which
  would  otherwise  cause  the  Change  in  Control   transaction  to  be
  ineligible for Pooling Accounting shall be void and ineffective in such
  a manner  and to the  extent  that by  eliminating  such  provision  or
  provisions of this Agreement,  Pooling Accounting would be required for
  such Change in Control transaction.


<PAGE>


           IN WITNESS WHEREOF, the parties hereto have executed this
Agreement this ____ day of __________________,______.


                                         THE SOUTHERN COMPANY

                                By:      ____________________________________


                                         SOUTHERN ENERGY RESOURCES, INC.


                                By:      ____________________________________


                                         SOUTHERN ENERGY, INC.


                                By:      ____________________________________


                                         MR. HILL


                                         -----------------------------
                                         /s/ Raymond Dunlap Hill
                                         Raymond Dunlap Hill


<PAGE>



rayhill
26


                                    Exhibit A

                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release


         The attached  Waiver and Release is to be given to Mr.  Raymond  Dunlap
Hill upon the  occurrence  of an event that triggers  eligibility  for severance
benefits under the Change in Control  Agreement,  as described in Paragraph 2(a)
of such agreement.


<PAGE>


                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release


         I, Raymond Dunlap Hill,  understand  that I am entitled to receive the
severance  benefits  described  in Section 2 of the Change in Control  Agreement
(the "Agreement") if I execute this Waiver and Release ("Waiver").  I understand
that the benefits I will receive  under the  Agreement  are in excess of those I
would have received  from The Southern  Company and Southern  Energy  Resources,
Inc. (collectively, the "Company") if I had not elected to sign this Waiver.

         I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991,  the Age  Discrimination  in  Employment  Act,  the
Rehabilitation  Act of 1973, the Energy  Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.

         In exchange for the benefits I elect to receive,  I hereby  irrevocably
waive and release all claims,  of any kind whatsoever,  whether known or unknown
in connection with any claim which I ever had, may have, or now have against The
Southern  Company,  Alabama Power  Company,  Georgia Power  Company,  Gulf Power
Company,  Mississippi  Power  Company,  Savannah  Electric  and  Power  Company,
Southern Communication Services, Inc., Southern Company Services, Inc., Southern
Energy  Resources,  Inc.,  Southern  Company Energy  Solutions,  Inc.,  Southern
Nuclear Operating Company, Inc. and other direct or indirect subsidiaries of The
Southern  Company  and their  past,  present  and  future  officers,  directors,
employees,  agents and  attorneys.  Nothing in this Waiver shall be construed to
release  claims or causes of action under the Age  Discrimination  in Employment
Act or the Energy  Reorganization  Act of 1974,  as amended,  which arise out of
events occurring after the execution date of this Waiver.

         In further  exchange for the benefits I elect to receive,  I understand
and agree that I will respect the  proprietary  and  confidential  nature of any
information  I have obtained in the course of my service with the Company or any
subsidiary or affiliate of The Southern Company. However, nothing in this Waiver
shall prohibit me from engaging in protected  activities under applicable law or
from communicating,  either voluntary or otherwise, with any governmental agency
concerning any potential violation of the law.

         In signing this Waiver, I am not releasing claims to benefits that I am
already entitled to under any workers' compensation laws or under any retirement
plan or welfare  benefit  plan  within the  meaning of the  Employee  Retirement
Income Security Act of 1974, as amended, which is sponsored by or adopted by the
Company and/or any of its direct or indirect subsidiaries; however, I understand
and  acknowledge  that  nothing  herein is intended to or shall be  construed to
require the Company to  institute or continue in effect any  particular  plan or
benefit  sponsored by the Company and the Company  hereby  reserves the right to
amend or terminate any of its benefit  programs at any time in  accordance  with
the procedures set forth in such plans.

         In signing  this  Waiver,  I realize  that I am waiving and  releasing,
among other things,  any claims to benefits under any and all bonus,  severance,
workforce reduction, early retirement,  outplacement,  or any other similar type
plan sponsored by the Company.

         I have been  encouraged  and  advised in writing  to seek  advice  from
anyone of my choosing  regarding  this Waiver,  including  my  attorney,  and my
accountant or tax advisor.  Prior to signing this Waiver,  I have been given the
opportunity and sufficient time to seek such advice,  and I fully understand the
meaning and contents of this Waiver.

         I understand  that I may take up to  twenty-one  (21)  calendar days to
consider  whether  or not I desire  to enter  this  Waiver.  I was not  coerced,
threatened  or otherwise  forced to sign this  Waiver.  I have made my choice to
sign this Waiver voluntarily and of my own free will.

         I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company.  If
I revoke  this  Waiver,  I must do so in writing  delivered  to the  Company.  I
understand  that this Waiver is not effective until the expiration of this seven
(7) calendar day  revocation  period.  I understand  that upon the expiration of
such seven (7) calendar day revocation period this entire Waiver will be binding
upon me and will be irrevocable.

         I  understand  that by signing  this Waiver I am giving up rights I may
have.

         IN WITNESS WHEREOF, the undersigned hereby executes this Waiver
this ____ day of ____________________, in the year _____.


                                                /s/ Raymond Dunlap Hill
                                                Raymond Dunlap Hill


Sworn to and subscribed to me this
____ day of ____________, _____.


Notary Public

My Commission Expires:


(Notary Seal)

         Acknowledged and Accepted by the Company, as defined in the Waiver.

By:
         -----------------------------------
Date:
         -----------------------------------