Document:

Exhibit 10(a)87

                         DEFERRED COMPENSATION AGREEMENT

         THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") made and entered
into by and between The Southern Company ("Southern"), Southern Energy
Resources, Inc. (the "Company") and Gale E. Klappa ("Mr. Klappa").

                              W I T N E S S E T H:

         WHEREAS, Mr. Klappa is an Officer of the Company;

         WHEREAS, the Company and Southern wish to encourage Mr. Klappa to
increase the profitability of the Company and to provide Mr. Klappa an interest
in the Company's overall profitability, and to provide Mr. Klappa with
additional deferred compensation for service he has or will provide the Company;

         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. Retention Bonus.

                  a. General Nature of Award. Subject to the terms and
         conditions of this Agreement, the Company shall establish and maintain
         on behalf of Mr. Klappa an account on the Company's books and records
         (the "Account") which, if Mr. Klappa continues to be an employee of the
         Company, or any affiliate or subsidiary of Southern (as set forth in
         Paragraph 5 hereof), shall entitle Mr. Klappa to receive on July 1,
         2003 (the period from the effective date of the Agreement through July
         1, 2003 to be referred to as the "Performance Period") an amount equal
         to the then Market Value (as defined below) of the equivalent of Two
         Hundred Sixty Thousand Dollars ($260,000.00) of Market Value of
         Southern's common stock deemed to have been purchased as of the
         effective date of this Agreement, including reinvested dividends
         thereon, increased, if certain profitability goals are met, by
         estimated income tax expenses.

                  b. Investment.

                           (1) As of the date hereof, the Company shall credit
                  to Mr. Klappa's Account that number of deemed shares
                  (including fractional shares) of Southern's common stock
                  ("Common Stock") as shall equal $260,000.00 in Market Value
                  (as defined herein) determined as of the effective date of
                  this Agreement (such hypothetical shares to be referred to
                  herein as the "Phantom Stock"). For purposes of this
                  Agreement, "Market Value" shall mean the average closing price
                  of the Common Stock as reported by the New York Stock Exchange
                  for the ten trading days immediately preceding the respective
                  valuation date.

                           (2) As of the day of each calendar quarter in which
                  occurs the payment of dividends on Common Stock, there shall
                  be credited to Mr. Klappa's Account such additional shares of
                  Phantom Stock (including fractional shares) as could have been
                  purchased at the Market Value on such day as follows:

                                    (a) In the case of cash dividends, such
                           additional shares of Phantom Stock as could have been
                           purchased with the dividends payable on the number of
                           shares of Phantom Stock credited to the Account
                           immediately prior to the dividend;

                                    (b) In the case of dividends payable in
                           property other than cash or Common Stock, such
                           additional shares of Phantom Stock as could have been
                           purchased with the fair market value of the property
                           which would have been payable as dividends on the
                           number of shares of Phantom Stock credited to the
                           Account immediately prior to the dividend; or

                                    (c) In the case of dividends payable in
                           Common Stock, such additional shares of Phantom Stock
                           as would have been payable on the number of shares of
                           Phantom Stock credited to the Account immediately
                           prior to the dividend.

                           (3) In the event that the number of outstanding
                  shares of Common Stock is changed through merger,
                  consolidation, reorganization, recapitalization,
                  reincorporation, stock split, stock dividend (in excess of 2%)
                  or other change in the capital structure of Southern without
                  consideration, or upon the occurrence of any other
                  extraordinary corporate event involving the Common Stock
                  causing a reduction in the value of the Common Stock, such as
                  a corporate spin off or split up, the number of shares of
                  Phantom Stock credited to the Account shall be proportionately
                  adjusted by the Company so as to preserve the value of the
                  Account immediately prior to such event.

                  c. Vesting of Account. The Market Value of Mr. Klappa's
         Account shall vest on July 1, 2003 (the "Vesting Date"), provided Mr.
         Klappa is then an employee of the Company, Southern, or an affiliate or
         subsidiary of Southern.

                  d. Valuation of Account. The value of Mr. Klappa's Account on
         any date shall be based on the Market Value on such date multiplied by
         the number of shares of Phantom Stock then credited to the Account,
         provided, however, that if the profitability goals established for the
         Company and for Mr. Klappa by the Chief Executive Officers of Southern
         and the Company have been equaled or exceeded during the Performance
         Period as set forth on Exhibit A, and as annually documented on Exhibit
         B of this Agreement (the "Profitability Goals"), the value of the
         Account shall be increased upon payout to cover Mr. Klappa's federal
         and state income tax expense as reasonably estimated by the Company for
         the year of payout (the "Tax Gross-up"). Failure to meet the
         Profitability Goals for the Performance Period shall result in the
         forfeiture of the Tax Gross-up, provided, however, that the Chief
         Executive Officers of Southern and the Company may, in their sole
         discretion, determine after the close of the Performance Period, that
         as a result of overall Company profitability and individual performance
         during the entire Performance Period, all or a portion of the value of
         the Tax Gross-up shall nevertheless be paid.

                  e. Payment of Account Balance. Provided that Mr. Klappa is
         then an employee of the Company, Southern, or an affiliate or
         subsidiary of Southern, and, with respect to the Tax Gross-up amount,
         has also achieved the Profitability Goals, the Company shall pay to Mr.
         Klappa the value of his Account, and, if applicable, the Tax Gross-up
         amount, in cash within ten (10) days of the Vesting Date.

                  f. Election to Defer. By written election filed with
         Southern's Vice President, Human Resources no less than thirteen (13)
         months prior to the Vesting Date, Mr. Klappa may defer all or a portion
         of the amount to be received under this Agreement by having such amount
         contributed on his account to The Southern Company Deferred
         Compensation Plan, in accordance with the terms and conditions of such
         Plan.

                  g. Death, Permanent Disability, Termination Without Cause,
         Termination for Good Reason, or Continued Employment Following a Change
         in Control. In the event of Mr. Klappa's termination of employment with
         the Company prior to the payout of the value of the Account for reasons
         of death, permanent disability, termination by the Company without
         Cause, or termination of employment by Mr. Klappa for Good Reason
         following a Change in Control, or, if prior to the payout of the value
         of the Account Mr. Klappa continues employment with the Company, any
         Southern Subsidiary, or any employer that succeeds to all or
         substantially all of the assets of the Company, Southern, or any
         Southern Subsidiary following a Change in Control, the Company shall
         pay to Mr. Klappa, or his estate in the event of death, the value of
         the Account determined as of the date of such termination or Change in
         Control, plus, if the Profitability Goals have been met as of such
         date, the Tax Gross-up amount. For purposes of this Paragraph 1.g., the
         terms Cause, Change in Control, Good Reason, and Southern Subsidiary
         shall have the meaning set forth in that certain Change in Control
         Agreement, dated June 17, 1999, as amended from time to time, between
         Southern, the Company and Mr. Klappa (the "Change in Control
         Agreement"), the defined terms of which are incorporated in this
         Paragraph 1.g. by reference thereto.

                  h. Assignability. Neither Mr. Klappa, his estate, his
         beneficiaries, nor his legal representative shall have any rights to
         commute, sell, assign, transfer or otherwise convey the right to
         receive the payment under this Paragraph 1, which payment and the
         rights thereto are expressly declared to be nonassignable and
         nontransferable. Any attempt to assign or transfer the right to such
         payment shall be void and have no effect.

         2. Value Creation Plan. In the event Mr. Klappa transfers his
employment to an affiliate of Southern, and pursuant to the Southern Energy
Resources, Inc. Value Creation Plan (the "Plan") he has Indexed Rights that have
not vested at the time of such transfer, and the Administrative Committee for
the Plan fails to take action to provide Mr. Klappa relief from Section 4.5 of
the Plan to the extent it provides for forfeiture of unvested Indexed Rights
upon termination from the Company for reasons other than Cause and provide that
any of Mr. Klappa's unvested Indexed Rights shall continue to vest as long as
Mr. Klappa remains employed by an affiliate of Southern, then the Company shall
pay Mr. Klappa an amount equal to what he would have received had such Indexed
Rights continued to vest following his transfer to an affiliate of Southern,
become vested and been exercised by Mr. Klappa within the time period that would
have existed under the Plan for such exercise. In determining such amount, the
method that would have applied under the Plan shall be used.

         3. Publicity; No Disparaging Statement. Except as otherwise provided in
Paragraph 6 hereof, Mr. Klappa, Southern and the Company covenant and agree that
they shall not engage in any communications which shall disparage one another or
interfere with their existing or prospective business relationships.

         4. Non-Disclosure.

                  a. Definitions. For purposes of this Paragraph 4, the
         following terms shall have the following meanings:

                           (1) "Entity" shall mean any business, individual,
                  partnership, joint venture, agency, governmental subdivision,
                  association, firm, corporation or other entity.

                           (2) "Affiliate" shall mean the following Entities:
                  (a) any Entity which owns an Interest (as defined below) in
                  the Company either directly or indirectly through any other
                  Entity, (b) any Entity an Interest in which is owned directly
                  or indirectly by any Entity which owns directly or indirectly
                  an Interest in the Company or (c) any Entity in which the
                  Company owns an Interest either directly or indirectly through
                  any other Entity. For purposes of this Agreement, the term
                  "Interest" shall include any equity interest in an Entity in
                  an amount equal to or greater than 30% of the Entity's total
                  outstanding equity interests.

                           (3) "Confidential Information" shall mean proprietary
                  and confidential data or information other than Trade Secrets
                  (as defined below), which is valuable to, and related to the
                  business of, the Company, its Affiliates or non-affiliated
                  Entities with whom the Company or its Affiliates has or have
                  business relationships (collectively, "Third Parties"), and
                  the details of which are generally unknown to the public or to
                  the Company's competitors, including, without limitation,
                  information regarding the Company's employees, business
                  strategies, models and systems, customers, suppliers, partners
                  and affiliates, gained by Mr. Klappa as a result of his
                  affiliation with the Company or its Affiliates, and other
                  items that the Company or its Affiliates may from time to time
                  mark or otherwise identify as confidential.

                           (4) "Trade Secrets" shall mean information of or
                  related to the Company, its Affiliates or Third Parties which
                  (a) derives economic value, actual or potential, from not
                  being generally known to, and not being readily ascertainable
                  by proper means by, other persons who can obtain economic
                  value from its disclosure or use; and (b) is the subject of
                  efforts that are reasonable under the circumstances to
                  maintain its secrecy; it being agreed that such information
                  includes, without limitation, technical and non-technical
                  data, a formula, a pattern, a compilation, a program, a
                  device, a method, a technique, a drawing, a process, financial
                  data, financial plans, product plans or a list of actual or
                  potential customers or suppliers.

                           (5) "Intellectual Property" shall mean all work
                  product, property, data, documentation, "know-how", concepts
                  or plans, inventions, discovery, compositions, innovations,
                  computer programs, improvements, techniques, processes,
                  designs, article of manufacture or information of any kind, or
                  any new or useful improvements of any of the foregoing and any
                  Trade Secrets, patents, copyrights, Confidential Information,
                  mask work, trademark or service mark, relating in any way to
                  the Company or its Affiliates and its or their business
                  prepared, conceived, revised, discovered, developed, or
                  created by Mr. Klappa for the Company or its Affiliates or by
                  using the Company's or its Affiliates' time, personnel,
                  facilities, equipment, knowledge, information, resources, or
                  material.

                  b. Nondisclosure; Ownership of Proprietary Property.

                           (1) Nondisclosure. In recognition of the Company's
                  need to protect its legitimate business interests, Mr. Klappa
                  hereby acknowledges that he has been given access to valuable
                  Trade Secrets and Confidential Information; and he hereby
                  covenants and agrees that he will use the Trade Secrets and
                  Confidential Information for the Company's business purposes
                  only, and that he will not for any reason, in any fashion,
                  form or manner, other than as instructed by a duly authorized
                  representative of the Company, copy, disclose, disseminate,
                  communicate, transfer or otherwise convey to any Entity any
                  item: (a) which is a Trade Secret, for so long as such item
                  remains a trade secret under applicable law; or (b) which is
                  Confidential Information, other than Trade Secrets, for a
                  period of three (3) years from his termination.

                           (2) Notification of Unauthorized Disclosure. Mr.
                  Klappa shall exercise his best efforts to ensure the continued
                  confidentiality of all Trade Secrets and Confidential
                  Information known by, disclosed or made available to him. He
                  shall immediately notify the Company of any unauthorized
                  disclosure or use of any Trade Secrets or Confidential
                  Information of which he becomes aware. Mr. Klappa shall assist
                  the Company, to the extent necessary, in the procurement or
                  protection of the Company's or its Affiliates' rights to or in
                  any Intellectual Property, Trade Secrets or Confidential
                  Information and, upon the Company's request, shall assist, to
                  the extent necessary, in the procurement or protection of any
                  Third Party's rights to or in any Intellectual Property, Trade
                  Secrets or Confidential Information.

                           (3) Ownership. To the greatest extent possible, any
                  and all Intellectual Property shall be deemed to be "work made
                  for hire" (as defined in the Copyright Act, 17 U.S.C.A. ss.ss.
                  101 et seq.), and Mr. Klappa hereby unconditionally and
                  irrevocably transfers and assigns to the Company or its
                  Affiliates all rights, title and interest he currently has or
                  in the future may have by operation of law or otherwise in or
                  to any Intellectual Property, including, without limitation,
                  all patents, copyrights, trademarks, service marks and other
                  Intellectual Property rights and agrees that the Company or
                  its Affiliates shall have the exclusive world-wide ownership
                  of such Intellectual Property, and that no Intellectual
                  Property shall be treated as or deemed to be a "joint work"
                  (as defined by the Copyright Act) of Mr. Klappa and the
                  Company, its Affiliates or otherwise. Mr. Klappa agrees to
                  execute and deliver to the Company or its Affiliates any
                  transfers, assignments, documents or other instruments which
                  the Company or its Affiliates may deem necessary or
                  appropriate to vest complete title and ownership of any
                  Intellectual Property, and all rights therein, exclusively in
                  the Company or its Affiliates, as the case may be.

                           (4) Return of Materials. Upon Mr. Klappa's
                  termination, or at any point after that time upon the specific
                  request of the Company, he shall return to the Company all
                  written or descriptive materials of any kind belonging or
                  relating to the Company or its Affiliates, including, without
                  limitation, any Intellectual Property, Confidential
                  Information and Trade Secrets, in his possession.

         5. Transfer of Employment to Southern or a Southern Subsidiary or
Affiliate. In the event that Mr. Klappa's employment by the Company is
terminated and he shall become immediately re-employed by Southern or a
subsidiary or an affiliate of Southern, the Company shall assign this Agreement
to Southern or such subsidiary or affiliate, Southern shall accept such
assignment or cause such affiliate or subsidiary to accept such assignment, such
assignee shall become the "Company" for all purposes hereunder, and the
profitability goals set forth on Exhibit A hereof shall be amended to
appropriately reflect the performance of such assignee. In the event of such
assignment, the expense of this Paragraph 1 of this Agreement shall be shared
pro rata by the Company and any such assignee based upon the number of months
after the effective date of this Agreement that Mr. Klappa is employed by the
Company, and/or Southern and/or such affiliate or subsidiary of Southern, as the
case may be, but the expense of Paragraph 2 shall be the sole responsibility of
the Company.

         6. Confidentiality and Legal Process. Mr. Klappa represents and agrees
that he will keep the terms, amount and fact of this Agreement confidential and
that he will not hereafter disclose any information concerning this Agreement to
any one other than his personal agents, including, but not limited to, any past,
present, or prospective employee or applicant for employment with Company.
Notwithstanding the foregoing, nothing in this Agreement is intended to prohibit
Mr. Klappa from performing any duty or obligation that shall arise as a matter
of law. Specifically, Mr. Klappa shall continue to be under a duty to truthfully
respond to matter of law. Specifically, Mr. Klappa shall continue to be under a
duty to truthfully respond to any legal and valid subpoena or other legal
process. This Agreement is not intended in any way to proscribe Mr. Klappa's
right and ability to provide information to any federal, state or local
government in the lawful exercise of such governments' governmental functions.

         7. Successors And Assigns; Applicable Law. Except as otherwise provided
in Paragraph 1.h., this Agreement shall be binding upon and inure to the benefit
of Mr. Klappa and his heirs, administrators, representatives, executors,
successors and assigns, and shall be binding upon and inure to the benefit of
Southern, the Company and their officers, directors, employees, agents,
shareholders, parent corporation and affiliates, and their respective
predecessors, successors, assigns, heirs, executors and administrators and each
of them, and to their heirs, administrators, representatives, executors,
successors and assigns. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Georgia, United States of America
(without giving effect to principles of conflicts of laws).

         8. Complete Agreement. This Agreement shall constitute the full and
complete Agreement between the parties concerning its subject matter and fully
supersedes any and all other prior Agreements or understandings between the
parties concerning the subject matter hereof. This Agreement shall not be
modified or amended except by a written instrument signed by both Mr. Klappa and
an authorized representative of Southern and the Company.

         9. Severability. The unenforceability or invalidity of any particular
provision of this Agreement shall not affect its other provisions, and to the
extent necessary to give such other provisions effect, they shall be deemed
severable.

         10. Waiver Of Breach; Specific Performance. The waiver of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any other breach. Each of the parties to this Agreement will be entitled to
enforce its or his rights under this Agreement, specifically, to recover damages
by reason of any breach of any provision of this Agreement and to exercise all
other rights existing in its or his favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its or his sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance or injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.

         11. Unsecured General Creditor. The Company shall neither reserve nor
specifically set aside funds for the payment of its obligations under this
Agreement, and such obligations shall be paid solely from the general assets of
the Company. Notwithstanding that Mr. Klappa may be entitled to receive the
value of his benefit under the terms and conditions of this Agreement, the
assets from which such amount may be paid shall at all times be subject to the
claims of the Company's creditors.

         12. No Effect On Other Arrangements. It is expressly understood and
agreed that the payments made in accordance with this Agreement are in addition
to any other benefits or compensation to which Mr. Klappa may be entitled or for
which he may be eligible, whether funded or unfunded, by reason of his
employment with the Company.

         13. Tax Withholding. There shall be deducted from each payment 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. Klappa.

         14. Compensation. Any compensation contributed on behalf of Mr. Klappa
under this Agreement shall not be considered "compensation," as the term is
defined in The Southern Company Employee Savings Plan, The Southern Company
Employee Stock Ownership Plan, The Southern Company Performance Sharing Plan or
The Southern Company Pension Plan. Payments under this Agreement shall not be
considered wages, salaries or compensation under any other employee benefit
plan.

         15. No Guarantee of Employment. No provision of this Agreement shall be
construed to affect in any manner the existing rights of the Company to suspend,
terminate, alter, modify, whether or not for cause, the employment relationship
of Mr. Klappa and the Company.

         IN WITNESS WHEREOF, this Agreement has been executed by the parties
first listed above, effective this ____ day of ___________, 1999.

                                      THE SOUTHERN COMPANY

                             By:      ______________________________

                                      SOUTHERN ENERGY RESOURCES, INC.

                             By:

                                       Mr. Klappa

                                       ------------------------------

<PAGE>

                                    Exhibit A
                         Deferred Compensation Agreement
                         Schedule of Profitability Goals
                             For Performance Period

         The Southern Company shall earn its Earnings Per Share Goal for each of
the calendar years in the Performance Period.

         Achievement of the goals shall be assessed annually by the Chief
Executive Officers of Southern and the Company and documented in Exhibit B of
this Agreement.

<PAGE>

                                    Exhibit B
                         Deferred Compensation Agreement
                   Annual Documentation of Profitability Goals
                             For Performance Period
<PAGE>
                      FIRST AMENDMENT TO AND ASSIGNMENT OF
                         DEFERRED COMPENSATION AGREEMENT

         THIS FIRST AMENDMENT TO AND ASSIGMENT OF DEFERRED COMPENSATION
AGREEMENT ("Amendment") made and entered into by and between The Southern
Company ("Southern"), Southern Energy Resources, Inc. (the "Company"), Southern
Company Services, Inc. ("SCS") and Gale F. Klappa ("Mr. Klappa"), effective as
of the 6th day of October, 1999.

                              W I T N E S S E T H:

         WHEREAS, the parties entered into that certain Deferred Compensation
Agreement (the "Agreement") effective October 5, 1999;

         WHEREAS, the employment of Mr. Klappa has been transferred to SCS;

         WHEREAS, the parties wish to amend and assign the Agreement in
connection with such transfer of employment;

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

                  1. Pursuant to Section 5 of the Agreement, the Company assigns
         the Agreement to SCS and SCS shall be the Company for all purposes
         thereunder. Notwithstanding the foregoing, as provided in Sections 2
         and 5 of the Agreement with respect to the Value Creation Plan,
         Southern Energy Resources, Inc. shall retain the expense related to
         Section 2.

                  2. Pursuant to Section 5 of the Agreement, Exhibit A is
         amended to provide that achievement of the profitability goal shall be
         documented by the Chairman of The Southern Company.

         IN WITNESS WHEREOF, this First Amendment to and Assignment of Deferred
Compensation Agreement has been executed by the parties, this ___ day of
_____________, 2000.

                                             THE SOUTHERN COMPANY

                                    By:      ______________________________

                                             SOUTHERN COMPANY SERVICES, INC.

                                    By:

                                             SOUTHERN ENERGY RESOURCES, INC.

                                    By:      ______________________________

                                             MR. KLAPPA

                                             ------------------------------
                                                   Gale F. Klappa

                                    Exhibit A
                         Deferred Compensation Agreement
                         Schedule of Profitability Goals
                             For Performance Period

         The Southern Company shall earn its Earnings Per Share Goal for each of
the calendar years in the Performance Period. Achievement of the goal shall be
assessed annually by the Chairman of The Southern Company and documented in
Exhibit B.

                                    Exhibit B
                         Deferred Compensation Agreement
                   Annual Documentation of Profitability Goals
                             For Performance PeriodExhibit 10(a)88

                         DEFERRED COMPENSATION AGREEMENT

         THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") made and entered
into by and between The Southern Company ("Southern"), Southern Energy
Resources, Inc. (the "Company") and S. Marce Fuller ("Ms. Fuller").

                              W I T N E S S E T H:

         WHEREAS, Ms. Fuller is an Officer of the Company;

         WHEREAS, the Company and Southern wish to encourage Ms. Fuller to
increase the profitability of the Company and to provide Ms. Fuller an interest
in the Company's overall profitability, and to provide Ms. Fuller with
additional deferred compensation for service she has or will provide the
Company;

         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. Retention Bonus.

                  a. General Nature of Award. Subject to the terms and
         conditions of this Agreement, the Company shall establish and maintain
         on behalf of Ms. Fuller an account on the Company's books and records
         (the "Account") which, if Ms. Fuller continues to be an employee of the
         Company, or any affiliate or subsidiary of Southern (as set forth in
         Paragraph 4 hereof), shall entitle Ms. Fuller to receive on July 1,
         2003 (the period from the effective date of the Agreement through July
         1, 2003 to be referred to as the "Performance Period") an amount equal
         to the then Market Value (as defined below) of the equivalent of Four
         Hundred Thousand Dollars ($400,000.00) of Market Value of Southern's
         common stock deemed to have been purchased as of the effective date of
         this Agreement, including reinvested dividends thereon, increased, if
         certain profitability goals are met, by estimated income tax expenses.

                  b. Investment.

                           (1) As of the date hereof, the Company shall credit
                  to Ms. Fuller's Account that number of deemed shares
                  (including fractional shares) of Southern's common stock
                  ("Common Stock") as shall equal $400,000.00 in Market Value
                  (as defined herein) determined as of the effective date of
                  this Agreement (such hypothetical shares to be referred to
                  herein as the "Phantom Stock"). For purposes of this
                  Agreement, "Market Value" shall mean the average closing price
                  of the Common Stock as reported by the New York Stock Exchange
                  for the ten trading days immediately preceding the respective
                  valuation date.

                           (2) As of the day of each calendar quarter in which
                  occurs the payment of dividends on Common Stock, there shall
                  be credited to Ms. Fuller's Account such additional shares of
                  Phantom Stock (including fractional shares) as could have been
                  purchased at the Market Value on such day as follows:

                                    (a) In the case of cash dividends, such
                           additional shares of Phantom Stock as could have been
                           purchased with the dividends payable on the number of
                           shares of Phantom Stock credited to the Account
                           immediately prior to the dividend;

                                    (b) In the case of dividends payable in
                           property other than cash or Common Stock, such
                           additional shares of Phantom Stock as could have been
                           purchased with the fair market value of the property
                           which would have been payable as dividends on the
                           number of shares of Phantom Stock credited to the
                           Account immediately prior to the dividend; or

                                    (c) In the case of dividends payable in
                           Common Stock, such additional shares of Phantom Stock
                           as would have been payable on the number of shares of
                           Phantom Stock credited to the Account immediately
                           prior to the dividend.

                           (3) In the event that the number of outstanding
                  shares of Common Stock is changed through merger,
                  consolidation, reorganization, recapitalization,
                  reincorporation, stock split, stock dividend (in excess of 2%)
                  or other change in the capital structure of Southern without
                  consideration, or upon the occurrence of any other
                  extraordinary corporate event involving the Common Stock
                  causing a reduction in the value of the Common Stock, such as
                  a corporate spin off or split up, the number of shares of
                  Phantom Stock credited to the Account shall be proportionately
                  adjusted by the Company so as to preserve the value of the
                  Account immediately prior to such event.

                  c. Vesting of Account. The Market Value of Ms. Fuller's
         Account shall vest on July 1, 2003 (the "Vesting Date"), provided Ms.
         Fuller is then an employee of the Company, Southern, or an affiliate or
         subsidiary of Southern.

                  d. Valuation of Account. The value of Ms. Fuller's Account on
         any date shall be based on the Market Value on such date multiplied by
         the number of shares of Phantom Stock then credited to the Account,
         provided, however, that if the profitability goals established for the
         Company and for Ms. Fuller by the Chief Executive Officer of Southern
         have been equaled or exceeded during the Performance Period as set
         forth on Exhibit A, and as annually documented on Exhibit B of this
         Agreement (the "Profitability Goals"), the value of the Account shall
         be increased upon payout to cover Ms. Fuller's federal and state income
         tax expense as reasonably estimated by the Company for the year of
         payout (the "Tax Gross-up"). Failure to meet the Profitability Goals
         for the Performance Period shall result in the forfeiture of the Tax
         Gross-up, provided, however, that the Chief Executive Officer of
         Southern may, in his sole discretion, determine after the close of the
         Performance Period, that as a result of overall Company profitability
         and individual performance during the entire Performance Period, all or
         a portion of the value of the Tax Gross-up shall nevertheless be paid.

                  e. Payment of Account Balance. Provided that Ms. Fuller is
         then an employee of the Company, Southern, or an affiliate or
         subsidiary of Southern, and, with respect to the Tax Gross-up amount,
         has also achieved the Profitability Goals, the Company shall pay to Ms.
         Fuller the value of her Account, and, if applicable, the Tax Gross-up
         amount, in cash within ten (10) days of the Vesting Date.

                  f. Election to Defer. By written election filed with
         Southern's Vice President, Human Resources no less than thirteen (13)
         months prior to the Vesting Date, Ms. Fuller may defer all or a portion
         of the amount to be received under this Agreement by having such amount
         contributed on her account to The Southern Company Deferred
         Compensation Plan, in accordance with the terms and conditions of such
         Plan.

                  g. Death, Permanent Disability, Termination Without Cause,
         Termination for Good Reason, or Continued Employment Following a Change
         in Control. In the event of Ms. Fuller's termination of employment with
         the Company prior to the payout of the value of the Account for reasons
         of death, permanent disability, termination by the Company without
         Cause, or termination of employment by Ms. Fuller for Good Reason
         following a Change in Control, or, if prior to the payout of the value
         of the Account Ms. Fuller continues employment with the Company, any
         Southern Subsidiary, or any employer that succeeds to all or
         substantially all of the assets of the Company, Southern, or any
         Southern Subsidiary following a Change in Control, the Company shall
         pay to Ms. Fuller, or her estate in the event of death, the value of
         the Account determined as of the date of such termination or Change in
         Control, plus, if the Profitability Goals have been met as of such
         date, the Tax Gross-up amount. For purposes of this Paragraph 1.g., the
         terms Cause, Change in Control, Good Reason, and Southern Subsidiary
         shall have the meaning set forth in that certain Change in Control
         Agreement, dated June 17, 1999, as amended from time to time, between
         Southern, the Company and Ms. Fuller (the "Change in Control
         Agreement"), the defined terms of which are incorporated in this
         Paragraph 1.g. by reference thereto.

                  h. Assignability. Neither Ms. Fuller, her estate, her
         beneficiaries, nor her legal representative shall have any rights to
         commute, sell, assign, transfer or otherwise convey the right to
         receive the payment under this Paragraph 1, which payment and the
         rights thereto are expressly declared to be nonassignable and
         nontransferable. Any attempt to assign or transfer the right to such
         payment shall be void and have no effect.

         2. Publicity; No Disparaging Statement. Except as otherwise provided in
Paragraph 5 hereof, Ms. Fuller, Southern and the Company covenant and agree that
they shall not engage in any communications which shall disparage one another or
interfere with their existing or prospective business relationships.

         3. Non-Disclosure.

                  a. Definitions. For purposes of this Paragraph 3, the
         following terms shall have the following meanings:

                           (1) "Entity" shall mean any business, individual,
                  partnership, joint venture, agency, governmental subdivision,
                  association, firm, corporation or other entity.

                           (2) "Affiliate" shall mean the following Entities:
                  (a) any Entity which owns an Interest (as defined below) in
                  the Company either directly or indirectly through any other
                  Entity, (b) any Entity an Interest in which is owned directly
                  or indirectly by any Entity which owns directly or indirectly
                  an Interest in the Company or (c) any Entity in which the
                  Company owns an Interest either directly or indirectly through
                  any other Entity. For purposes of this Agreement, the term
                  "Interest" shall include any equity interest in an Entity in
                  an amount equal to or greater than 30% of the Entity's total
                  outstanding equity interests.

                           (3) "Confidential Information" shall mean proprietary
                  and confidential data or information other than Trade Secrets
                  (as defined below), which is valuable to, and related to the
                  business of, the Company, its Affiliates or non-affiliated
                  Entities with whom the Company or its Affiliates has or have
                  business relationships (collectively, "Third Parties"), and
                  the details of which are generally unknown to the public or to
                  the Company's competitors, including, without limitation,
                  information regarding the Company's employees, business
                  strategies, models and systems, customers, suppliers, partners
                  and affiliates, gained by Ms. Fuller as a result of her
                  affiliation with the Company or its Affiliates, and other
                  items that the Company or its Affiliates may from time to time
                  mark or otherwise identify as confidential.

                           (4) "Trade Secrets" shall mean information of or
                  related to the Company, its Affiliates or Third Parties which
                  (a) derives economic value, actual or potential, from not
                  being generally known to, and not being readily ascertainable
                  by proper means by, other persons who can obtain economic
                  value from its disclosure or use; and (b) is the subject of
                  efforts that are reasonable under the circumstances to
                  maintain its secrecy; it being agreed that such information
                  includes, without limitation, technical and non-technical
                  data, a formula, a pattern, a compilation, a program, a
                  device, a method, a technique, a drawing, a process, financial
                  data, financial plans, product plans or a list of actual or
                  potential customers or suppliers.

                           (5) "Intellectual Property" shall mean all work
                  product, property, data, documentation, "know-how", concepts
                  or plans, inventions, discovery, compositions, innovations,
                  computer programs, improvements, techniques, processes,
                  designs, article of manufacture or information of any kind, or
                  any new or useful improvements of any of the foregoing and any
                  Trade Secrets, patents, copyrights, Confidential Information,
                  mask work, trademark or service mark, relating in any way to
                  the Company or its Affiliates and its or their business
                  prepared, conceived, revised, discovered, developed, or
                  created by Ms. Fuller for the Company or its Affiliates or by
                  using the Company's or its Affiliates' time, personnel,
                  facilities, equipment, knowledge, information, resources, or
                  material.

<PAGE>

                  b. Nondisclosure; Ownership of Proprietary Property.

                           (1) Nondisclosure. In recognition of the Company's
                  need to protect its legitimate business interests, Ms. Fuller
                  hereby acknowledges that she has been given access to valuable
                  Trade Secrets and Confidential Information; and she hereby
                  covenants and agrees that she will use the Trade Secrets and
                  Confidential Information for the Company's business purposes
                  only, and that she will not for any reason, in any fashion,
                  form or manner, other than as instructed by a duly authorized
                  representative of the Company, copy, disclose, disseminate,
                  communicate, transfer or otherwise convey to any Entity any
                  item: (a) which is a Trade Secret, for so long as such item
                  remains a trade secret under applicable law; or (b) which is
                  Confidential Information, other than Trade Secrets, for a
                  period of three (3) years from her termination.

                           (2) Notification of Unauthorized Disclosure. Ms.
                  Fuller shall exercise her best efforts to ensure the continued
                  confidentiality of all Trade Secrets and Confidential
                  Information known by, disclosed or made available to her. She
                  shall immediately notify the Company of any unauthorized
                  disclosure or use of any Trade Secrets or Confidential
                  Information of which she becomes aware. Ms. Fuller shall
                  assist the Company, to the extent necessary, in the
                  procurement or protection of the Company's or its Affiliates'
                  rights to or in any Intellectual Property, Trade Secrets or
                  Confidential Information and, upon the Company's request,
                  shall assist, to the extent necessary, in the procurement or
                  protection of any Third Party's rights to or in any
                  Intellectual Property, Trade Secrets or Confidential
                  Information.

                           (3) Ownership. To the greatest extent possible, any
                  and all Intellectual Property shall be deemed to be "work made
                  for hire" (as defined in the Copyright Act, 17 U.S.C.A. ss.ss.
                  101 et seq.), and Ms. Fuller hereby unconditionally and
                  irrevocably transfers and assigns to the Company or its
                  Affiliates all rights, title and interest she currently has or
                  in the future may have by operation of law or otherwise in or
                  to any Intellectual Property, including, without limitation,
                  all patents, copyrights, trademarks, service marks and other
                  Intellectual Property rights and agrees that the Company or
                  its Affiliates shall have the exclusive world-wide ownership
                  of such Intellectual Property, and that no Intellectual
                  Property shall be treated as or deemed to be a "joint work"
                  (as defined by the Copyright Act) of Ms. Fuller and the
                  Company, its Affiliates or otherwise. Ms. Fuller agrees to
                  execute and deliver to the Company or its Affiliates any
                  transfers, assignments, documents or other instruments which
                  the Company or its Affiliates may deem necessary or
                  appropriate to vest complete title and ownership of any
                  Intellectual Property, and all rights therein, exclusively in
                  the Company or its Affiliates, as the case may be.

                           (4) Return of Materials. Upon Ms. Fuller's
                  termination, or at any point after that time upon the specific
                  request of the Company, she shall return to the Company all
                  written or descriptive materials of any kind belonging or
                  relating to the Company or its Affiliates, including, without
                  limitation, any Intellectual Property, Confidential
                  Information and Trade Secrets, in her possession.

         4. Transfer of Employment to Southern or a Southern Subsidiary or
Affiliate. In the event that Ms. Fuller's employment by the Company is
terminated and she shall become immediately re-employed by Southern or a
subsidiary or an affiliate of Southern, the Company shall assign this Agreement
to Southern or such subsidiary or affiliate, Southern shall accept such
assignment or cause such affiliate or subsidiary to accept such assignment, such
assignee shall become the "Company" for all purposes hereunder, and the
profitability goals set forth on Exhibit A hereof shall be amended to
appropriately reflect the performance of such assignee. In the event of such
assignment, the expense of this Agreement shall be shared pro rata by the
Company and any such assignee based upon the number of months after the
effective date of this Agreement that Ms. Fuller is employed by the Company,
and/or Southern and/or such affiliate or subsidiary of Southern, as the case may
be.

         5. Confidentiality and Legal Process. Ms. Fuller represents and agrees
that she will keep the terms, amount and fact of this Agreement confidential and
that she will not hereafter disclose any information concerning this Agreement
to any one other than her personal agents, including, but not limited to, any
past, present, or prospective employee or applicant for employment with Company.
Notwithstanding the foregoing, nothing in this Agreement is intended to prohibit
Ms. Fuller from performing any duty or obligation that shall arise as a matter
of law. Specifically, Ms. Fuller shall continue to be under a duty to truthfully
respond to matter of law. Specifically, Ms. Fuller shall continue to be under a
duty to truthfully respond to any legal and valid subpoena or other legal
process. This Agreement is not intended in any way to proscribe Ms. Fuller's
right and ability to provide information to any federal, state or local
government in the lawful exercise of such governments' governmental functions.

         6. Successors And Assigns; Applicable Law. Except as otherwise provided
in Paragraph 1.h., this Agreement shall be binding upon and inure to the benefit
of Ms. Fuller and her heirs, administrators, representatives, executors,
successors and assigns, and shall be binding upon and inure to the benefit of
Southern, the Company and their officers, directors, employees, agents,
shareholders, parent corporation and affiliates, and their respective
predecessors, successors, assigns, heirs, executors and administrators and each
of them, and to their heirs, administrators, representatives, executors,
successors and assigns. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Georgia, United States of America
(without giving effect to principles of conflicts of laws).

         7. Complete Agreement. This Agreement shall constitute the full and
complete Agreement between the parties concerning its subject matter and fully
supersedes any and all other prior Agreements or understandings between the
parties concerning the subject matter hereof. This Agreement shall not be
modified or amended except by a written instrument signed by both Ms. Fuller and
an authorized representative of Southern and the Company.

         8. Severability. The unenforceability or invalidity of any particular
provision of this Agreement shall not affect its other provisions, and to the
extent necessary to give such other provisions effect, they shall be deemed
severable.

         9. Waiver Of Breach; Specific Performance. The waiver of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any other breach. Each of the parties to this Agreement will be entitled to
enforce its or her rights under this Agreement, specifically, to recover damages
by reason of any breach of any provision of this Agreement and to exercise all
other rights existing in its or her favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its or her sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance or injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.

         10. Unsecured General Creditor. The Company shall neither reserve nor
specifically set aside funds for the payment of its obligations under this
Agreement, and such obligations shall be paid solely from the general assets of
the Company. Notwithstanding that Ms. Fuller may be entitled to receive the
value of her benefit under the terms and conditions of this Agreement, the
assets from which such amount may be paid shall at all times be subject to the
claims of the Company's creditors.

         11. No Effect On Other Arrangements. It is expressly understood and
agreed that the payments made in accordance with this Agreement are in addition
to any other benefits or compensation to which Ms. Fuller may be entitled or for
which she may be eligible, whether funded or unfunded, by reason of her
employment with the Company.

         12. Tax Withholding. There shall be deducted from each payment 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 Ms. Fuller.

         13. Compensation. Any compensation contributed on behalf of Ms. Fuller
under this Agreement shall not be considered "compensation," as the term is
defined in The Southern Company Employee Savings Plan, The Southern Company
Employee Stock Ownership Plan, The Southern Company Performance Sharing Plan or
The Southern Company Pension Plan. Payments under this Agreement shall not be
considered wages, salaries or compensation under any other employee benefit
plan.

         14. No Guarantee of Employment. No provision of this Agreement shall be
construed to affect in any manner the existing rights of the Company to suspend,
terminate, alter, modify, whether or not for cause, the employment relationship
of Ms. Fuller and the Company.

         IN WITNESS WHEREOF, this Agreement has been executed by the parties
first listed above, effective this ____ day of ___________, 1999.

                                        THE SOUTHERN COMPANY

                               By:      ______________________________

                                        SOUTHERN ENERGY RESOURCES, INC.

                               By:

                                        Ms. Fuller

                                        ------------------------------

<PAGE>

                                    Exhibit A

                         Deferred Compensation Agreement

                         Schedule of Profitability Goals

                             For Performance Period

         The Company shall achieve a Corporate Performance Factor under the
Southern Energy Resources, Inc. Short Term Incentive Plan of at least 1.0 for
each of the calendar years 2000, 2001 and 2002 and an average of 1.5 for such
three-year period.

           Achievement of the goals shall be assessed annually by the Chief
Executive Officer of Southern and documented in Exhibit B of this Agreement.

<PAGE>

                                    Exhibit B

                         Deferred Compensation Agreement

                   Annual Documentation of Profitability Goals

                             For Performance Period

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