Document:

KMI Exhibit 10.12 Resignation and Non-Compete Agreement

Exhibit 10.12

RESIGNATION AND NON-COMPETE AGREEMENT

     This Agreement ("Agreement") is entered
into this 21st day of July, 2004 between KMGP Services, Inc. (on behalf of itself and the
other persons and entities included in the definition of KM (as defined below), and Michael
C. Morgan ("Employee").

     WHEREAS, Employee is currently employed as an
at-will employee of KM;

     WHEREAS, Employee has decided to resign from his
position as President of Kinder Morgan, Inc. ("KMI"), Kinder Morgan G.P., Inc.,
Kinder Morgan Management, LLC and as an officer and director of their respective
affiliates in order to pursue other opportunities, including as a principal of Portcullis
Partners, L.P., while remaining an unpaid employee and retaining his membership on KMI's
Board of Directors (the "Board");

     WHEREAS, the parties wish to provide for certain
terms and conditions associated with this resignation;

     WHEREAS, the parties negotiated certain terms to
extend past employment, including, without limitation, terms relating non-competition and
confidentiality;

     WHEREAS, Employee agrees that ample consideration
was provided to ensure enforcement of such provisions;

     NOW THEREFORE, in consideration of the foregoing
premises and the following promises, the parties agree as follows:

          1.    Intent of the Parties. It is the
intent of the parties that all rights under any previous agreement(s) or understandings
concerning Employee's employment by KM shall be waived and forfeited upon execution of
this Agreement, except as described on Schedule 1 attached hereto.

          2.    Definitions.

               (a)   KM. "KM" as used in this Agreement
shall mean and include Kinder Morgan Energy Partners, L.P., Kinder Morgan, Inc., Kinder
Morgan Management, LLC and their respective divisions, subsidiaries, parents and/or
affiliates, successors or assigns, and, for purposes of this Agreement, the term
"affiliates" shall have the same definition as the term "affiliated
group" in Section 1504(a) of the Internal Revenue Code of 1986, as amended from time
to time.

               (b)   Confidential Information. "Confidential
Information" shall

include all information comprising, concerning or relating to (i) KM's Customers (as
defined below), providers, suppliers, and other business affiliates; (ii) KM's policies,
practices, operating information, pricing, profits, margins, costs, expenses, return
expectations, financial information, business plans, economic models and market
approaches; and (iii) other information, techniques or approaches used by KM and not
generally known or applied in KM's industry. KM believes that some or all of this
information constitutes trade secrets; however, the Confidential Information covered in
this Agreement need not satisfy the legal definition or requirements of a "trade
secret" to be protected from disclosure hereunder. Confidential Information shall not

 

include any information that is generally known in KM's industry and information
already known to any future employer of Employee through no fault of Employee, and any
information disclosed by KM in public filings including without limitation SEC or FERC
filings.

               (e)   Customer. "Customer" shall include
any person or entity to whom at any time during the Employment Period (as defined below)
services are being sold by KM, and any person or entity with which, at any time during the
Employment Period, KM has established a strategic marketing alliance.

               (f)   Effective Date. This Agreement shall be
effective upon execution hereof by both parties.

          3.    Resignation. Employee hereby
resigns his position as an officer and director of each entity included in KM, other than
his position as a director of KMI.

          4.    KM's Promises. In consideration
of Employee's performance hereunder:

               (a)   Bonus. Employee will be eligible for a 2004
annual incentive bonus under the terms of the KM bonus program. All Bonus Payments shall
be subject to applicable required withholdings. Employee shall not be eligible for an
annual incentive bonus for any periods flowing calendar year 2004.

               (b)   Medical Benefits. KM agrees to provide best
efforts to allow Employee to participate, at Employee's cost, in those health benefit
plans that active employees are eligible to participate in to the extent permissible by
applicable law and subject to the terms and conditions of the applicable plan(s).

               (c)   Restricted Stock. In consideration for
Employee's promises set forth in Section 5 below (but not in consideration for Employee's
service as a director of KMI) and subject to Section 6 below, Employee shall continue to
hold 23,333 shares of restricted stock of KMI (as described on Schedule 1 attached hereto)
on the same terms and conditions as are set forth in that certain Restricted Stock
Agreement (the "July 16, 2003 Grant"), dated July 16, 2003, between Employee and
KMI; provided that (i) 8,333 shares shall vest and cease to be subject to forfeiture
restrictions on July 16, 2006 and 15,000 shares shall vest on July 16, 2008; (ii) 76,667
shares subject to the July 16, 2003 Grant shall be forfeited; and (iii) to the extent the
approval of the shareholders of KMI is not necessary for Employee to continue to hold such
23,333 shares or to cancel the July 16, 2003 Grant and issue Employee a new grant of
23,333 shares of restricted stock of KMI, KM may substitute cash payments in lieu of the
value of the restricted stock and the dividends paid thereon. Such payments shall be made
(x) on July 16, 2006 and July 16, 2008 in the case of the value of the shares of
restricted stock and (y) on the date(s) KMI pays dividends to its shareholders in the case
of dividends.

          5.    Employee's Promises. Employee
acknowledges and agrees that; 1) KM and its affiliates are engaged in, among other things,
owning and/or operating integrated natural gas assets, products, chemicals and bulk
terminals, refined products, natural gas, natural gas liquids and carbon dioxide
pipelines, electricity generating assets, crude oil production assets and other midstream
energy assets; (the "Business"); 2) the Business is conducted throughout the

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United States; 3) his work for KM gave and will continue (during the Employment Period)
to give him access to Confidential Information, proprietary information and trade secrets
of and concerning KM, KM's actual and potential Customers, providers, suppliers, and other
business affiliates; 4) his work for KM gave and will continue (during the Employment
Period) to give him access to KM's actual and potential Customers, providers, suppliers,
and other business affiliates with whom KM has expended substantial efforts to
successfully establish goodwill; and 4) the agreements and covenants contained in this
Paragraph 4 are essential to protect the Business and the trade secrets, Confidential
Information, proprietary information, goodwill and other legitimate interests of KM.
Accordingly, Employee agrees and covenants as follows:

               (a)   Confidential Information. Employee agrees and
covenants that he shall not at any time, directly or indirectly, (i) use or apply any
Confidential Information for any purpose not expressly authorized by an officer of KM,
alone or with any other person or entity; or (ii) disclose or provide any Confidential
Information to any person or entity not expressly authorized by an officer of KM to
receive such Confidential Information provided, however, that Employee shall not be held
in breach of this provision should Employee be required to testify pursuant to subpoena
under oath or as otherwise required by law, provided additionally that Employee testifies
truthfully and that, prior to providing such testimony, Employee notifies KM within 48
hours that his testimony is being sought so as to permit KM to seek to prevent or limit
such testimony or otherwise seek to obtain a protective order.

               (b)   Non-Disparagement Agreement. Employee agrees
and covenants that he will not in any way knowingly disparage KM, its officers, directors,
employees, consultants, agents, or business performance, methods, practices, operations,
decisions or plans; provided, however, that Employee shall not be held in breach of this
provision should Employee be required to testify pursuant to subpoena under oath or as
otherwise required by law, provided additionally that Employee testifies truthfully and
that, prior to providing such testimony, Employee notifies KM within 48 hours that his
testimony is being sought so as to permit KM to seek to prevent or limit such testimony or
otherwise seek to obtain a protective order. KM likewise agrees not to disparage Employee,
in the same manner and subject to the same limitations set forth in this Section 5(b).

               (c)   Non-Solicitation of KM Employees. Employee
agrees and covenants that prior to the earlier of (i) July 21, 2008 or (ii) for one (1)
years following the date of termination of Employee's membership on the Board for any
reason whatsoever, he will not hire, encourage, entice, or otherwise solicit any employee
of KM, or aid any third party to hire, encourage, entice or solicit any employee of KM, to
leave employment with KM in order to accept employment elsewhere. For purposes of this
paragraph, "employment elsewhere" shall include any relationship of
employer/employee, any relationship of principal/independent contractor and any
relationship of client/consultant.

               (d)   Non-Competition. Employee agrees and covenants
that prior to the earlier of (i) July 21, 2008 or (ii) one (1) years following the date of
termination of Employee's membership on the Board for any reason whatsoever, Employee will
not, directly or indirectly, engage or become interested, as employee, owner, consultant,
advisor, officer, director or partner, or through stock ownership, investment of capital,
lending of money or property, or rendering of services or otherwise, either alone or in
association with others, in any type of business or enterprise which is in competition
with or which is directly or indirectly 

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detrimental to KM's Business, provided, however, that the record or beneficial
ownership by Employee of one percent (1%) or less of the outstanding publicly traded
capital stock of any such business or enterprise shall not be deemed to be in violation of
this Paragraph 5(d), provided further that Employee is not an employee, consultant,
advisor, officer, director or partner of such business or enterprise.

               (e)   Confidentiality of this Agreement. KM and
Employee agree not to divulge, disclose or publicize in any manner to any third party,
including but not limited to current or former employees of KM, the existence or terms and
conditions of this Agreement, except, with respect to disclosure by Employee: (1) insofar
as is necessary to enforce the Agreement, comply with this Agreement, applicable laws or
regulations, or to respond to an order of a court or administrative agency for disclosure,
(2) to Employee's legal counsel, spouse, or tax or financial advisors, on condition that
any such person to whom the terms or conditions of this Agreement are disclosed shall be
instructed not to disclose the terms or conditions to anyone else; and with respect to
disclosure by KM: (1) insofar as is necessary to enforce the Agreement, comply with this
Agreement, applicable laws or regulations, or to respond to an order of a court or
administrative agency for disclosure, (2) to KM's legal counsel, KM's directors and
officers, and KM's internal human resources and accounting personnel and auditors (only to
the extent necessary for reporting purposes), on condition that any such person to whom
the terms or conditions of this Agreement are disclosed shall be instructed not to
disclose the terms or conditions to anyone else.

               (f)   Employee acknowledges and agrees that any
breach by him of the covenants, commitments and agreements in Paragraph 5 of this
Agreement shall constitute a material breach of this Agreement and is likely to result in
irreparable injury to KM that could not be compensated by money damages alone. Employee
therefore agrees that, notwithstanding any other provision of this Agreement, in addition
to any other remedies KM may have at law and/or equity, in the event that KM determines
that Employee has breached any of said provisions of this Agreement, KM shall be entitled,
at its election, to immediately stop making any payments hereunder and/or to terminate the
vesting of, or otherwise cancel or terminate, the unvested portion of the restricted stock
referenced in Section 4(c) hereof and/or to enforce the specific performance of this
Agreement by Employee and/or to seek to enjoin Employee from activities in breach of said
provisions of this Agreement without having to show that there are no other adequate
remedies available, whether such breach of said provisions occurs during the Employment
Period or thereafter. KM acknowledges and agrees that, without limiting the remedies set
forth above, its sole remedy with respect to monetary damages shall be forfeiture of
unvested restricted stock described in Section 4(c) hereof.

               (g)   The parties stipulate and agree that the
terms, covenants, commitments and agreements contained in this Paragraph 5 are fair and
reasonable in all respects, and that these restrictions are necessary for the reasonable
protection of the legitimate business interests of KM. If, at the time of enforcement of
any of these provisions, a court holds that the restrictions stated herein are
unreasonable under the circumstances then existing, the parties hereto agree that the
maximum period, scope or geographical area reasonable under such circumstances will be
substituted for the stated period, scope or area. In such event, but only in such event,
the parties hereto hereby specifically request a trial court or other tribunal presented
with this Agreement for enforcement to reform it as to time, geographic area or scope of 

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activities prohibited to the fullest extent allowed by law and to enforce this
Agreement as so reformed.

               (h)   Employee shall have the right to request in a
special exception to Section 5 of this Agreement. Such request shall be in writing,
directed to KM's General Counsel, and shall clearly and specifically identify the
exemption sought and the bases therefore. KM shall have thirty (30) business days to
respond to such written request for a special exception. If, after a timely review, KMI
determines in its sole discretion that no significant issues exist regarding the
protection of its trade secrets, proprietary information and/or Confidential Information,
the preservation of its goodwill, or a conflict of interest, KMI shall not withhold the
granting in writing of said special exception. In the event that KM does not respond to a
request for a special exception with the thirty day period described above, KM shall be
deemed to have granted the request for special exception. KMI's decision to grant a
special exception (or failure to respond to a response therefore) shall not be considered
to be a waiver of the provisions of Section 5 except as to the specific activities on
behalf of the specific entity for which Employee sought such waiver.

          6.    Payment Conditions. In the event
that KM determines that Employee has breached any of the provisions of Paragraph 5 of this
Agreement, KM shall be entitled to immediately stop making any payments of any type under
Paragraph 4(c) of this Agreement and/or to terminate the vesting or exercisability of
23,333 shares of restricted stock reference in Section 5 hereof (to the extent vesting has
not occurred at the time of breach), or to require that Employee's stock option grant of
October 9, 1999 shall expire on the thirtieth day after KM provides Employee notice of
such breach.

          7.    Adequacy of Consideration. By
executing this Agreement, KM and Employee acknowledges the receipt and sufficiency of the
consideration provided by the other in conjunction with executing this Agreement and the
Further Release. Each acknowledges and confirms to the other that the consideration
provided by the other is good and valuable consideration legally supportive of each
party's respective rights, duties and obligations hereunder and under the Further Release.
By executing this Agreement, KM and Employee shall be estopped from raising and hereby
expressly waive any defense regarding the receipt and/or legal sufficiency of the
consideration provided by one to the other with respect to this Agreement and the Further
Release.

          8.    Assignability. This Agreement
shall inure to the benefit of, and be binding upon, Employee and Employee's personal or
legal representatives, employees, administrators, successors, heirs, distributees,
devisees and legatees, and KM, its successors and assignees, provided, however, that
neither KM nor Employee may assign any of Employee's or its obligations, rights or
benefits hereunder without the prior written consent of the other.

          9.    Headings. The headings of
sections and paragraphs herein are included solely for convenience of reference and shall
not control the meaning or interpretation of any of the provisions of this Agreement.

          10.   Controlling Law. This Agreement shall
be governed and construed in accordance with the laws of Texas. The parties agree that any
legal action regarding this Agreement must be filed in the state of Texas.

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          11.   Entire Agreement. This document
constitutes the entire agreement of the parties on the subject matters addressed herein
and may not be expanded or except by express written agreement executed by both.

          12.   Counterparts. This Agreement may be
executed in as many counterparts as may be deemed necessary and convenient, and by the
different parties on separate counterparts, each of which shall be deemed an original but
all of which shall constitute one and the same instrument.

[Remainder of page intentionally left blank - signature page to follow]

 

 

6

 

	  	KMGP SERVICES, INC.

    KINDER MORGAN ENERGY PARTNERS, L.P.

    KINDER MORGAN, INC.

    KINDER MORGAN MANAGEMENT, LLC

    (each on its own behalf and on behalf

    of the other persons or entities included

    within the definition of KM)  
		  

      

	By:	  
	Title:	  

		  

      		
	  	EMPLOYEE	  	
		  		
		  		
		  		  
		Michael C. Morgan		Date

 

 

7

Exhibit A

FURTHER RELEASE

     For good and valuable consideration set forth in
Paragraph 3 of the Retention and Non-Competition Agreement of which this Exhibit is a part
(the "Agreement"), the receipt and sufficiency of which is hereby acknowledged,
Michael C. Morgan ("Morgan") and KM (as defined in the Agreement) hereby agree
as follows:

1.    General
Release. Morgan, for himself and his representatives, heirs, and assigns, hereby
releases and forever discharges KM, and any present or former parent, sister, affiliate or
subsidiary company, partnership, limited partnership or entity, and each of its and their
shareholders, unit holders, partners, general partners, limited partners, officers,
directors, employees, agents, representatives, legal representatives, accountants,
successors, predecessors, and assigns (the "KM Releasees"), from all claims,
demands, and actions of any nature, known or unknown, which Morgan may have against the KM
Releasees as of the Effective Date of this Further Release, and specifically, but not
limited to, any and all claims, known or unknown, in any manner arising out of or
involving any aspect of his employment with any of the KM Releasees, and including, but
not limited to, any rights or claims under the Texas Anti-Discrimination Act, the Age
Discrimination in Employment Act ("ADEA"); Title VII of the Civil Rights Act of
1964; the Vocational Rehabilitation Act; the Americans with Disabilities Act; Executive
Order 11246; the Civil Rights Act of 1871; the National Labor Relations Act; the Worker
Adjustment and Retraining Notification Act; the Employee Retirement Income Security Act of
1974; the Equal Pay Act (all as may have been or may be amended from time to time); and
any and all other municipal, state, and/or federal statutory, executive order, or
constitutional provisions pertaining to employment, an employment relationship, sexual
harassment and/or employee benefits; provided, however, that this release and waiver shall
not apply to any rights which, by law, may not be waived, or any rights expressly set
forth in the Agreement. This release and waiver also specifically includes, but is not
limited to, any known or unknown claims in the nature of tort, statutory law, common law
or contract claims, including specifically but not limited to any claim of wrongful
refusal to hire, wrongful discharge, retaliatory discharge, unpaid wages, unpaid vacation,
unpaid bonuses, unvested stock or stock options, unpaid benefits, intentional or negligent
infliction of emotional distress, defamation, or other such claims in any manner arising
out of or involving any aspect of Morgan's employment, the terms and conditions of such
employment, or termination of employment with KM. This release also includes, without
limitation, any and all known or unknown claims concerning attorney fees, costs, and any
and all other expenses related to the claims released herein.

2.     ADEA
Release. By executing this Further Release, Morgan knowingly and voluntarily waives
any and all claims under the Age Discrimination in Employment Act ("ADEA"), and
further agrees with respect to the ADEA that:

	     (a)  
	This waiver is part of an Agreement that
    is written in a manner that he understands.

	  
	
	     (b)  
	This waiver specifically refers to rights
    and claims arising under the ADEA.

 

	  	
	     (c)  
	Morgan does not waive any claims under the
    ADEA that may arise after the date that he executes this Further Release.

	  
	
	     (d)  
	Morgan waives ADEA rights or claims.

	  
	
	     (e)  
	Morgan has had an opportunity to consult
    with an attorney before executing this Further Release insofar as it relates to waiver of
    claims under the ADEA and has been urged to do so.

	  
	
	     (f)  
	Morgan has been afforded a minimum of 21
    days from the date he received the Further Release within which to consider this Further
    Release insofar as it relates to claims under the ADEA.

	  	
	     (g)  
	Morgan shall have 7 days from the date he accepts and signs
    this Further Release within which to revoke his acceptance of this Further Release. To be
    effective, such revocation must be made in writing and delivered to the Executive Vice
    President Human Resources and Administration, Kinder Morgan, One Allen Center, 500 Dallas
    Suite 1000, Houston TX 77002, on or before the seventh (7th) day after Morgan
    signs it. If Morgan revokes this Further Release it shall not be effective or enforceable
    and he shall not receive the additional consideration set forth in Paragraph 4 of the
    Retention and Non-Compete Agreement that has not yet been paid to Morgan.
	  
	
	     (h)  
	This Further Release shall become effective immediately upon
    the eighth (8th) day after Morgan signs this Further Release, assuming such
    Further Release is not revoked as provided in Paragraph 2(g) above.
	  	  

      

	Date:	  	  	  
				Michael C. Morgan

 

 

2

SCHEDULE 1

	Restricted stock granted on January 17, 2000 and January 16, 2001 shall
    not be affected in any way by this agreement.Stock Option Agreements, dated April 20,
    2000, and October 9, 1999, shall not be affected in any way by this agreement.

    Restricted Stock Agreement, dated July 16, 2003, shall be amended to provide that 8,333
    shares shall vest on July 16, 2006 and 15,000 shares shall vest on July 16, 2008. All
    other shares subject to that agreement shall be forfeited. The remaining terms and
    conditions of the Restricted Stock Agreement shall apply with respect to the 23,333 shares
    that are not forfeited in connection with this Agreement.

 

3Exhibit 10(a)1

                                SOUTHERN COMPANY
                           DEFERRED COMPENSATION PLAN

                   Amended and Restated as of January 1, 2004

<PAGE>

                                SOUTHERN COMPANY
                           DEFERRED COMPENSATION PLAN

                                TABLE OF CONTENTS

ARTICLE I             Purpose and Adoption of Plan                       1

ARTICLE II            Definitions                                        1

ARTICLE III           Administration of Plan                             6

ARTICLE IV            Eligibility                                        9

ARTICLE V             Deferral Election                                 11

ARTICLE VI            Participants' Accounts                            13

ARTICLE VII           Account Distribution                              17

ARTICLE VIII          Miscellaneous Provisions                          20

<PAGE>

                                SOUTHERN COMPANY
                           DEFERRED COMPENSATION PLAN

                                   ARTICLE I
                          Purpose and Adoption of Plan

1.1 Adoption: Southern Company Services, Inc. and the other Employing Companies
established the Deferred Compensation Plan for The Southern Electric System
effective October 1, 1988. The Plan has been amended from time to time including
this amendment and restatement effective January 1, 2004. Except as otherwise
provided herein, the terms of the Plan as in effect prior to the effective date
of this Plan shall continue to be applicable to deferrals made pursuant to the
Plan prior to January 1, 2004.

1.2 Purpose: This Southern Company Deferred Compensation Plan is designed to
permit a select group of management or highly compensated employees to elect to
defer a portion of their regular compensation during each payroll period and to
defer all or a portion of certain short-term and long-term incentive payments
until their death, disability, retirement, or other termination of employment
with an Employing Company. The Plan shall be an unfunded deferred compensation
arrangement whose benefits shall be paid solely from the general assets of the
Employing Companies.

                                   ARTICLE II
                                   Definitions

         For purposes of the Plan, the following terms shall have the following
meanings unless a different meaning is plainly required by the context:

2.1 "Account" shall mean the account or accounts established and maintained by
an Employing Company to reflect the interest of a Participant in the Plan
resulting from a Participant's deferral of Compensation and/or Incentive Pay, or
transfer of Transferred Amounts, and adjustments thereto to reflect income,
gains, losses, and other credits or charges. Charges to Participant's Accounts
for distributions shall be posted as of the date the Account is valued for
distribution.

2.2 "Board of Directors" shall mean the Board of Directors of the Company.

2.3 "Change in Control Benefit Plan Determination Policy" shall mean the Change
in Control Benefit Plan Determination Policy, as approved by the Southern Board,
as it may be amended from time to time in accordance with the provisions
therein.

2.4 "Closing Price" shall mean the closing price on any trading day of a share
of the Common Stock and/or Mirant Share based on consolidated trading as defined
by the Consolidated Tape Association and reported as part of the consolidated
trading prices of New York Stock Exchange listed securities.

2.5 "Committee" shall mean the committee referred to in Section 3.1 hereof.

2.6 "Common Stock" shall mean the common stock of Southern.

2.7 "Company" shall mean Southern Company Services, Inc.

2.8 "Compensation" shall mean the rate of an Employee's base wages or salary
paid by any Employing Company to an Employee, including amounts contributed by
an Employing Company to the Employee Savings Plan as Elective Employer
Contributions, as said term is defined in the Employee Savings Plan, pursuant to
the Employee's exercise of his or her deferral option made in accordance with
Section 401(k) of the Internal Revenue Code, amounts contributed by an Employing
Company to the Employee Savings Plan as catch-up contributions pursuant to the
Employee's exercise of his deferral option made thereunder in accordance with
the requirements of Section 414(v) of the Internal Revenue Code, and amounts
contributed by an Employing Company to The Southern Company Flexible Benefits
Plan on behalf of the Employee pursuant to his or her salary reduction election
under such plan; but disregarding overtime and any reimbursements to an Employee
paid by any Employing Company including, but not limited to, reimbursements for
such items as moving expenses, automobile expenses, tax preparation expenses,
travel and entertainment expenses, and health and life insurance premiums.

2.9 "Deferral Election" shall mean the Participant's election to defer a portion
of his or her Compensation and/or Incentive Pay pursuant to Article V hereof.

2.10 "Distribution Election" shall mean the election under Article VII hereof,
pursuant to which a Participant elects the distribution of the balance of his or
her Account to be made in either a lump-sum or in up to ten (10) annual
installments following the Participant's death, disability, retirement, or other
termination of Employment with an Employing Company.

2.11 "Effective Date" of this amendment and restatement shall mean January 1,
2004.

2.12 "Employee" shall mean any person who is currently employed by an Employing
Company.

2.13 "Employee Savings Plan" shall mean The Southern Company Employee Savings
Plan, as amended from time to time.

2.14 "Employee Stock Ownership Plan" shall mean The Southern Company Employee
Stock Ownership Plan, as amended from time to time.

2.15 "Employing Company" shall mean the Company, or any affiliate or subsidiary
(direct or indirect) of The Southern Company, which the Board of Directors may
from time to time determine to bring under the Plan and which shall adopt the
Plan, and any successor of any of them. The Employing Companies are set forth in
Appendix A of the Plan, as may be amended from time to time.

2.16 "Enrollment Date" shall mean January 1 of each Plan Year, and such other
dates as may be determined from time to time by the Committee.

2.17 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

2.18 "Incentive Pay" shall mean such long-term or short-term incentive pay as
the Committee shall permit to be deferred under this Plan for any Plan Year.

2.19 "Investment Election" shall mean the Participant's election to have his or
her deferred Compensation or Incentive Pay invested pursuant to Section 6.3,
Section 6.4, or Section 6.5 hereof.

2.20 "Mirant Plan" shall mean the Mirant Corporation Deferred Compensation Plan
for Directors and Select Employees.

2.21 "Mirant Shares" shall mean the deemed investment in Mirant common stock
described in Section 6.4(d).

2.22 "Mirant Stock Option" shall mean the deemed Mirant common stock investment
option described in Section 6.4(d).

2.23 "Non-adopting Company" shall mean any subsidiary or affiliate of Southern
which is not an Employing Company.

2.24 "Participant" shall mean an Employee or former employee of an Employing
Company who is eligible to and defers Compensation and/or Incentive Pay under
the Plan or who was so eligible and had an unpaid Account balance upon his or
her death, disability, retirement, or other termination of employment with an
Employing Company.

2.25 "Pension Plan" shall mean The Southern Company Pension Plan, as amended
from time to time.

2.26 "Plan" shall mean the Southern Company Deferred Compensation Plan, amended
and restated as of January 1, 2004, as further amended from time to time.

2.27 "Plan Year" shall mean the calendar year.

2.28 "Retirement Income" shall have the same meaning as set forth in the Pension
Plan.

2.29 "Southern" shall mean Southern Company, its successors and assigns.

2.30 "Southern Board" shall mean the board of directors of Southern.

2.31 "Transferred Amount" shall mean an amount equal to the value of a
Participant's accounts under the Mirant Plan which has been transferred to and
credited under the Plan pursuant to Section 6.2 herein in connection with the
Participant's transfer of employment from Mirant Corporation or any of its
subsidiaries to an Employing Company, excluding Mirant Corporation and its
subsidiaries.

2.32 "Trust" shall mean the Southern Company Deferred Compensation Trust.

2.33 "Trustee" shall mean the entity designated as such in the Trust.

2.34 "Valuation Date" shall mean each trading day of the New York Stock
Exchange, or any successor national exchange on which the Common Stock and/or
Mirant Shares are traded and with respect to which a Closing Price may be
determined.

         Where the context requires, the definitions of all terms set forth in
the Pension Plan, the Employee Savings Plan, and the Employee Stock Ownership
Plan shall apply with equal force and effect for purposes of interpretation and
administration of the Plan, unless said terms are otherwise specifically defined
in the Plan. Words in the masculine gender shall include the feminine and neuter
genders, words in the singular shall include the plural, and words in the plural
shall include the singular.

                                  ARTICLE III

                             Administration of Plan

3.1 The general administration of the Plan shall be placed in the Committee. The
Committee shall consist of the Vice President, Human Resources of Southern, the
Vice President, System Compensation and Benefits of Southern Company Services,
Inc., and the Comptroller of Southern. Any member may resign or may be removed
by the Board of Directors and new members may be appointed by the Board of
Directors at such time or times as the Board of Directors in its discretion
shall determine. The Committee shall be chaired by the Vice President, Human
Resources of Southern and may select a Secretary (who may, but need not, be a
member of the Committee) to keep its records or to assist it in the discharge of
its duties. A majority of the members of the Committee shall constitute a quorum
for the transaction of business at any meeting. Any determination or action of
the Committee may be made or taken by a majority of the members present at any
meeting thereof, or without a meeting by resolution or written memorandum
concurred in by a majority of the members.

3.2 No member of the Committee shall receive any compensation from the Plan for
his or her service.

3.3 (a) The Committee shall administer the Plan in accordance with its terms and
shall have all powers necessary to carry out the provisions of the Plan as may
be more particularly set forth herein. The Committee shall interpret the Plan
and shall determine all questions arising in the administration, interpretation,
and application of the Plan. Any such determination by the Committee shall be
conclusive and binding on all persons. The Committee shall be the Plan's agent
for service of process.

(b) If a claim for benefits under the Plan is denied, in whole or in part, the
Committee will provide a written notice of the denial within a reasonable period
of time, but not later than 90 days after the claim is received. If special
circumstances require more time to process the claim, the Committee will issue a
written explanation of the special circumstances prior to the end of the 90 day
period and a decision will be made as soon as possible, but not later than 180
days after the claim is received.

     The written notice of claim denial will include:

     o    Specific reasons why the claim was denied;

     o    Specific references to applicable provisions of the Plan document or
          other relevant records or papers on which the denial is based, and
          information about where a Participant or his or her beneficiary may
          see them;

     o    A description of any additional material or information needed to
          process the claim, and an explanation of why such material or
          information is necessary;

     o    An explanation of the claims review procedure, including the time
          limits applicable to such procedure, as well as a statement notifying
          the Participant or his or her beneficiary of their right to file suit
          if the claim for benefits is denied, in whole or in part, on review.

         Upon request, a Participant or his or her beneficiary will be provided
without charge, reasonable access to, and copies of, all non-confidential
documents that are relevant to any denial of benefits. A claimant has 60 days
from the day he or she receives the original denial to request a review. Such
request must be made in writing and sent to the Committee. The request should
state the reasons why the claim should be reviewed and may also include evidence
or documentation to support the claimant's position.

         The Committee will reconsider the claimant's claim, taking into account
all evidence, documentation, and other information related to the claim and
submitted on the claimant's behalf, regardless of whether such information was
submitted or considered in the initial denial of the claim. The Committee will
make a decision within 60 days. If special circumstances require more time for
this process, the claimant will receive written explanation of the special
circumstances prior to the end of the initial 60 day period and a decision will
be sent as soon as possible, but not later than 120 days after the Committee
receives the request.

         No legal action to recover benefits or enforce or clarify rights under
a Plan can be commenced until the Participant or his or her beneficiary has
first exhausted the claims and review procedures provided under the Plan.

3.4 The Committee may adopt such regulations as it deems desirable for the
conduct of its affairs and may appoint such accountants, counsel, actuaries,
specialists, and other persons as it deems necessary or desirable in connection
with the administration of this Plan.

3.5 The Committee shall be reimbursed by the Employing Companies for all
reasonable expenses incurred by it in the fulfillment of its duties, including,
but not limited to, fees of accountants, counsel, actuaries, and other
specialists, and other costs of administering the Plan.

3.6 (a) The Committee is responsible for the daily administration of the Plan
and may appoint other persons or entities to perform any of its fiduciary
functions. The Committee and any such appointee may employ advisors and other
persons necessary or convenient to help the Committee carry out its duties,
including its fiduciary duties. The Committee shall review the work and
performance of each such appointee, and shall have the right to remove any such
appointee from his or her position. Any person, group of persons, or entity may
serve in more than one fiduciary capacity.

         (b) The Committee shall maintain accurate and detailed records and
accounts of Participants and of their rights under the Plan and of all receipts,
disbursements, transfers, and other transactions concerning the Plan. Such
accounts, books, and records relating thereto shall be open at all reasonable
times to inspection and audit by the Board of Directors and by any persons
designated thereby.

         (c) The Committee shall take all steps necessary to ensure that the
Plan complies with the law at all times. These steps shall include such items as
the preparation and filing of all documents and forms required by any
governmental agency; maintaining of adequate Participants' records; recording
and transmission of all notices required to be given to Participants and their
beneficiaries; the receipt and dissemination, if required, of all reports and
information received from an Employing Company; securing of such fidelity bonds
as may be required by law; and doing such other acts necessary for the proper
administration of the Plan. The Committee shall keep a record of all of its
proceedings and acts, and shall keep all such books of account, records, and
other data as may be necessary for proper administration of the Plan. The
Committee shall notify the Employing Companies upon their request of any action
taken by the Committee, and when required, shall notify any other interested
person or persons.

                                   ARTICLE IV
                                   Eligibility

4.1 Any Employee who is determined eligible to participate in accordance with
Section 4.2 of the Plan and whose base compensation and salary grade level
equals or exceeds such minimum threshold as may be established by the Committee
from time to time may elect to participate in the Plan beginning on any
Enrollment Date by electing to have his or her Compensation and/or Incentive Pay
reduced and such amounts contributed to the Plan in accordance with Article V
hereof, and directing the investment of such contributions in accordance with
Article VI hereof. An Employee who is eligible to participate and elects to
defer Compensation and/or Incentive Pay shall be a Participant in the Plan. The
Committee shall be authorized to establish the minimum base compensation and the
salary grade level required for eligibility to participate in the Plan, to be
effective as of the first day of the next succeeding Plan Year. Notwithstanding
the foregoing, any Employee eligible to participate in any similar deferred
compensation plan maintained by an Employing Company or maintained by a
Non-adopting Company shall be ineligible to defer Compensation or Incentive Pay
under this Plan, unless the Committee in its sole discretion shall determine
otherwise.

4.2 The Committee shall determine which Employees are eligible to participate in
the Plan. Additionally, the Committee shall be authorized to modify the minimum
base compensation and the salary grade threshold described in Section 4.1 of the
Plan and to rescind the eligibility of any Participant to continue deferrals if
this is necessary or advisable to ensure that the Plan is maintained primarily
for the purpose of providing deferred compensation to a select group of
management or highly compensated employees, as such terms are defined by the
Employee Retirement Income Security Act of 1974, as amended. A Participant whose
eligibility is rescinded or who loses eligibility for any reason shall not be
eligible to defer Compensation or Incentive Pay until eligibility is restored in
accordance with the guidelines established by the Committee.

4.3 The Committee shall have the authority to permit, if it deems appropriate,
separate Deferral Elections under Article V hereof, Investment Elections under
Article VI hereof, and Distribution Elections under Article VII hereof for
Compensation and/or Incentive Pay, respectively.

4.4 Notwithstanding the foregoing provisions of this Article IV, an Employee who
has Transferred Amounts transferred to and credited under the Plan pursuant to
Section 6.2 herein shall be a Participant in the Plan. However, an Employee who
becomes a Participant under this Section 4.4 who is not determined eligible
under Section 4.2 shall be a non-active Participant and shall be ineligible to
actively defer Compensation and/or Incentive Pay under this Plan unless such
Employee is later determined to be eligible under Section 4.2 or the Committee
in its sole discretion determines otherwise. As of the Effective Date, the Plan
shall not accept new Transferred Amounts.

                                   ARTICLE V
                                Deferral Election

5.1 A Participant may elect to defer payment of a portion of his or her
Compensation otherwise payable to him by his or her Employing Company during
each payroll period of the next succeeding Plan Year by any whole percentage not
to exceed fifty percent (50%) of his or her Compensation, or such greater or
lesser amount as shall be determined by the Committee from time to time. A
Participant may also elect to defer payment of up to one hundred percent (100%),
by whole percentages, of any Incentive Pay otherwise payable to him or her by
his or her Employing Company. The Company shall have the authority to withhold
any mandatory taxes from Compensation and/or Incentive Pay at any time as
required by law.

5.2 The Deferral Election shall be made in a manner prescribed by the Committee
and shall state as follows: (a) That the Participant wishes to make an election
to defer the receipt of a portion of his or her Compensation and/or all or a
portion of his or her Incentive Pay; (b) The whole percentage of his or her
Compensation and/or Incentive Pay which the Participant elects to defer; and (c)
The Distribution Election under Article VII hereof.

5.3 The Deferral Election of a Participant shall be made by the Participant in a
manner prescribed by the Committee and delivered by the date established by the
Committee and shall be effective on the first day of the Plan Year immediately
following the date of the Deferral Election. A Deferral Election with respect to
the deferral of future Compensation and/or Incentive Pay shall be an annual
election for each Plan Year unless otherwise modified or revoked as provided in
Section 5.4. The termination of a Participant's participation in the Plan shall
not affect the Participant's Compensation or Incentive Pay previously deferred
under the Plan, which shall be invested and distributed in accordance with the
Participant's elections and the terms and conditions of the Plan. Such
terminated Participant shall become an inactive Participant with respect to
eligibility to make future deferrals under this Plan.

5.4 Notwithstanding the provisions of Section 5.3 of the Plan, the Committee, in
its sole discretion upon written application by a Participant, may authorize the
suspension of a Participant's Deferral Election in the event of an unforeseen
emergency or hardship of the Participant. A Deferral Election suspension will be
on account of hardship if it is necessary in light of immediate and heavy
financial needs of the Participant which cannot reasonably be met from the
Participant's other financial resources. For this purpose, any amounts held in
the Participant's accounts in the Employee Savings Plan and the Employee Stock
Ownership Plan shall not be deemed to be reasonably available. Any Deferral
Election suspension made as prescribed by the Committee shall become effective
as of the first payroll period beginning thirty (30) days after receipt of the
Participant's suspension application, or as soon as practicable after the
receipt of such application. Such Deferral Election suspension shall be
effective for the remainder of the Plan Year of application.

                                   ARTICLE VI
                             Participants' Accounts

6.1 Upon the Committee's receipt of a Participant's valid Deferral Election
under Article V hereof, beginning as of the Enrollment Date, the designated
portion of Compensation and/or Incentive Pay shall be credited to the
Participant's Account as of the date of each such deferral in accordance with
the provisions of this Article VI.

6.2  Subject  to  Section  4.4,  Transferred  Amounts  shall  be  credited  to a
Participant's  Account as soon as  administratively  practicable  following  the
Participant's  transfer of employment.  Any  Transferred  Amounts  credited to a
Participant's  Account which were invested at the prime  interest rate under the
Mirant Plan shall be invested  pursuant to Section 6.3 herein.  Any  Transferred
Amounts  credited  to a  Participant's  Account  which were  invested  in Mirant
Corporation  phantom stock under the Mirant Plan shall be invested in the Mirant
Stock Option  investment  pursuant to the terms of Section  6.4(d)  herein,  and
prior to the opening of the final window  period  described  in Section  6.4(d),
such  Transferred  Amounts may be  transferred  out of the Mirant  Stock  Option
investment during other window periods  established by the Committee pursuant to
Section  6.5  herein.  Upon  a  Participant's  termination  of  employment,  the
Transferred Amounts and accumulated  investment return held in the Participant's
Account  shall  be  distributed  to  the  Participant  in  accordance  with  the
Participant's Distribution Election and the provisions of Article VII.

6.3 On the last business day of each month, the Account of each Participant
electing in a manner prescribed by the Committee to invest his or her deferred
Compensation and/or Incentive Pay for a Plan Year in accordance with this
Section 6.3 or transferring a Transferred Amount to this Plan in accordance with
Section 6.2 for investment pursuant to this Section 6.3 shall be credited by the
Employing Company with a deemed amount equal to the monthly equivalent of the
per annum prime rate of interest as published by the Wall Street Journal as the
base rate on corporate loans posted as of the last business day of each month by
at least seventy five (75%) percent of the United States' largest banks,
compounded monthly on any Account balance so invested until such balance is
fully distributed.

6.4 The designated portion of the Account of each Participant electing in a
manner prescribed by the Committee to invest his or her deferred Compensation
and/or Incentive Pay for a Plan Year in accordance with this Section 6.4 shall
be credited on the effective date of investment with the deemed number of shares
(including fractional shares) of Common Stock which could have been purchased on
such date with the dollar amount of such deferral, based upon the Common Stock's
Closing Price on the Valuation Date immediately preceding the date of
investment. As of the date on which occurs the payment of dividends on the
Common Stock, if any, there shall be credited with respect to the deemed number
of shares of Common Stock in the Participant's Account on such date such
additional deemed shares (including fractional shares) of Common Stock as
follows:

     (a) In the case of cash dividends, such additional deemed shares as could
be purchased at the Closing Price on the Valuation Date immediately preceding
the dividend payment date with the dividends which would have been payable on
the deemed number of shares previously credited to the Participant's Account;

     (b) In the case of dividends payable in property other than cash or Common
Stock, such additional deemed shares as could be purchased at the Closing Price
on the Valuation Date immediately preceding the dividend payment date with the
fair market value of the property which would have been payable on the deemed
number of shares previously credited to the Participant's Account; or

     (c) In the case of dividends payable in Common Stock, such additional
deemed shares as would have been payable on the deemed number of shares
previously credited to the Participant's Account; or

     (d) In the case of a deemed distribution of Mirant Corporation ("Mirant")
common stock as a result of a spin-off of Mirant from the Southern Company or
the transfer of Transferred Amounts which were invested in Mirant phantom stock
under the Mirant Plan pursuant to Section 6.2 herein (collectively, "Mirant
Shares"), the Mirant Shares shall be valued and invested in Mirant Shares in the
same manner as if Mirant Shares were Common Stock under this Section 6.4. This
investment under the Plan shall be the "Mirant Stock Option." As of the date on
which occurs the payment of dividends on Mirant Shares, if any, such dividends
shall also be credited on the Mirant Shares in the same manner as dividends are
credited on Common Stock. The Mirant Shares shall be retained in a Mirant Stock
Option investment for a limited period established by the Committee. The
Participant will be given the opportunity to transfer the Mirant Shares into
another investment option during a specific window period or periods for such
Mirant Shares established by the Committee pursuant to Section 6.5. Once the
period(s) described in the preceding sentence close, the Committee shall
transfer the Mirant Shares into Common Stock at a time and in a manner
designated by the Committee.

6.5 (a) The Investment Election by a Participant with respect to deferrals into
and earnings on his or her Account shall be made in a manner prescribed by the
Committee. Such Investment Elections shall be delivered in accordance with such
instructions and shall be effective on the first day of such succeeding Plan
Year. Such Investment Elections shall be irrevocable for the Plan Year in which
they apply.

     (b) The Participant may transfer in accordance with procedures prescribed
by the Committee all or a portion of his Account between investment options
during a window period which may be designated by the Committee. Any such
transfer shall constitute an Investment Election as to the amount transferred
and shall be effective immediately upon transfer. The length and timing of each
window period, the procedures for transfer and the valuation of transferred
Accounts or portions of Accounts shall be determined by the Committee.

6.6 The Committee shall issue a report at least annually to each Participant
holding an Account, setting forth at least the following: (a) with respect to
amounts invested under Section 6.3 hereof, as of the last day of the Plan Year,
the Account Balance, the dollar amount of deferrals, and earnings thereon, and
(b) with respect to amounts invested under Section 6.4 hereof, the Closing Price
of shares of Common Stock and/or Mirant Shares credited to each Participant's
Account as of the Valuation Date on or immediately preceding the last day of the
Plan Year, the total number of deemed shares of Common Stock and/or Mirant
Shares (and fractions thereof), and the total value of the Participant's deemed
investment in Common Stock and/or Mirant Shares as of such Valuation Date.

                                  ARTICLE VII
                              Account Distribution

7.1 (a) When a Participant retires or terminates his or her employment with an
Employing Company, he or she shall be entitled to receive in cash an amount
equal to the dollar amount of any deferrals, Transferred Amounts, and any
amounts in lieu of interest thereon credited to his or her Account under Section
6.3 hereof, and the dollar value of the product of the Closing Price multiplied
by the number of deemed shares of Common Stock and/or Mirant Shares (and
fractions thereof) credited to his or her Account in accordance Section 6.4
hereof, determined as of the date the Account is valued for distribution. Such
amounts shall be paid in accordance with the Participant's most recent
Distribution Election effective in accordance with Section 7.4. No portion of a
Participant's Account shall be distributed in Common Stock.

         (b) The transfer by a Participant between subsidiaries or affiliates of
Southern shall not be deemed to be a termination of employment with an Employing
Company for purposes of the Plan.

7.2 In the event that a Participant's most recent Distribution Election
effective in accordance with Section 7.4 is to receive a lump-sum distribution
of his or her Account, the dollar amount determined under Section 7.1 hereof
shall be paid to the Participant not later than sixty (60) days following the
date on which the Participant's termination of employment occurs, or as soon as
reasonably practicable thereafter.

7.3 In the event that a Participant's most recent Distribution Election
effective in accordance with Section 7.4 is to receive the distribution of his
or her Account in annual installments, the first payment shall be made not later
than sixty (60) days following the date on which the Participant's termination
of employment occurs, or as soon as reasonably practicable thereafter, and shall
be in an amount equal to the dollar balance in the Participant's Account
determined under Section 7.1 hereof, divided by the number of annual
installments elected. Subsequent annual installments shall be in an amount equal
to the dollar value of the Participant's Account determined under Section 7.1
hereof divided by the number of the remaining annual payments, and shall be paid
as soon as practicable following each anniversary of the initial payment date
until the balance of the Participant's Account is paid in full.

7.4 The Participants' initial Distribution Elections may not be revoked and
shall govern the distribution of the Participants' Accounts. Notwithstanding the
foregoing, and except as otherwise provided herein, the Committee may, in its
sole discretion, upon application by a Participant, accept an amended
Distribution Election from a Participant provided the election is made not later
than the 366th day prior to a distribution of such Participant's Account in
accordance with the terms of the Plan; provided further, however, that any
Participant who is required to file reports pursuant to Section 16(a) of the
Securities and Exchange Act of 1934, as amended, with respect to equity
securities of Southern shall not be permitted to amend his or her Distribution
Election during any time period for which such Participant is required to file
any such reports with respect to the portion of his or her Account invested in
accordance with the provisions of Section 6.3 of the Plan, unless the Committee
in its sole discretion shall determine otherwise.

7.5 Upon the death of a Participant prior to the complete distribution of his or
her Account, the unpaid Account balance shall be paid in the sole discretion of
the Committee (a) in a lump-sum to the Participant's designated beneficiary
within sixty (60) days following the date on which the Committee is provided
evidence of the Participant's death (or as soon as reasonably practicable
thereafter) or (b) in accordance with the Distribution Election made by such
Participant. In the event a beneficiary designation is not on file or the
designated beneficiary is deceased or cannot be located, payment will be made to
the Participant's estate.

7.6 Beneficiary designations may be changed by the Participants at any time
without the consent of any prior beneficiary.

7.7 Upon the total disability of a Participant, as determined by the Social
Security Administration, prior to the complete distribution of his or her
Account, the unpaid balance of his or her Account shall be paid in the sole
discretion of the Committee (a) in a lump-sum to the Participant or his or her
legal representative within sixty (60) days following the date on which the
Committee receives notification of the determination of disability by the Social
Security Administration (or as soon as reasonable practicable thereafter) or (b)
in accordance with the Participant's Deferral Election.

7.8 Upon application made by a Participant, his or her designated beneficiary,
or an authorized legal representative, the Committee may in its sole discretion
determine to accelerate payments or, in the event of death or total disability
(as determined by Social Security Administration), may extend or otherwise make
payments in a manner different from the manner in which such payment would
otherwise be made under the Participant's Deferral Election in the absence of
such determination.

7.9 In the event a Participant who is employed on or after January 1, 1999 with
an "Employing Company" (as defined in the Change in Control Benefit Plan
Determination Policy) disputes the calculation of his Account or payment of
amounts due under the terms of this Plan, such Participant has recourse against
the Company, the Employing Company by which Participant is employed, if
different, the Plan, and the Trust for the payment of benefits to the extent the
Trust so provides.

7.10 The provisions of the Change in Control Benefit Plan Determination Policy
are incorporated herein by reference to determine the occurrence of a change in
control or preliminary change in control of Southern or an Employing Company,
the benefits to be provided hereunder, and the funding of the Trust in the event
of such a change in control. Any modifications to the Change in Control Benefit
Plan Determination Policy are likewise incorporated herein.

                                  ARTICLE VIII
                            Miscellaneous Provisions

8.1 Neither the Participant, his or her beneficiary, nor his or her legal
representative shall have any rights to commute, sell, assign, transfer, or
otherwise convey the right to receive any payments hereunder, which payments and
the rights thereto are expressly declared to be non-assignable and
nontransferable. Any attempt to assign or transfer the right to payments of this
Plan shall be void and have no effect.

8.2 Except as expressly limited under the terms of the Trust, an Employing
Company maintaining an Account for the benefit of a Participant shall neither
reserve nor specifically set aside funds for the payment of its obligations
under the Plan. In any event, such obligations shall be paid or deemed to be
paid solely from the general assets of the Employing Companies. Participants
shall only have the status of a general, unsecured creditor of the Employing
Company(ies). Notwithstanding that a Participant shall be entitled to receive
the balance of his or her Account under the Plan, the assets from which such
amount may be paid shall at all times be subject to the claims of the creditors
of the Participants' Employing Companies.

8.3 Except for the provisions of Section 7.10 hereof, which may not be amended
following a "Southern Change in Control" or "Subsidiary Change in Control" (as
defined in the Change in Control Benefit Plan Determination Policy), the Plan
may be amended, modified, or terminated by the Board of Directors in its sole
discretion at any time and from time to time; provided, however, that no such
amendment, modification, or termination shall impair any rights to any amounts
which have been earned or deferred under the Plan prior to such amendment,
modification, or termination. Payment in full in cash of the amount credited to
a Participant's Account as of the date of any amendment, modification, or
termination of the Plan shall not be deemed to be an impairment of the
Participant's rights under the Plan. The Plan may also be amended or modified by
the Committee if such amendment or modification does not involve a substantial
increase in cost to any Employing Company.

8.4 It is expressly understood and agreed that the payments made in accordance
with the Plan are in addition to any other benefits or compensation to which a
Participant may be entitled or for which he or she may be eligible, whether
funded or unfunded, by reason of his or her employment with any Employing
Company.

8.5 There shall be deducted from each payment under the Plan the amount of any
tax required by any governmental authority to be withheld and paid over by an
Employing Company to such governmental authority for the account of the person
entitled to such distribution.

8.6 Any Compensation or Incentive Pay deferred by a Participant while employed
by an Employing Company and any Transferred Amounts shall not be considered
"compensation," as the term is defined in the Employee Savings Plan, the
Employee Stock Ownership Plan, or the Pension Plan. Distributions from a
Participant's Account shall not be considered wages, salaries, or compensation
under any other employee benefit plan.

8.7 No provision of this Plan shall be construed to affect in any manner the
existing rights of an Employing Company to suspend, terminate, alter, modify,
whether or not for cause, the employment relationship of the Participant and his
or her Employing Company.

8.8 This Plan, and all rights under it, shall be governed by and construed in
accordance with the laws of the State of Georgia.

         IN WITNESS WHEREOF, the amended and restated Plan has been executed by
duly authorized officers of Southern Company Services, Inc. pursuant to
resolutions of the Committee, this 1st day of June, 2004.

                                    SOUTHERN COMPANY SERVICES, INC.

                                    By: /s/Ellen N. Lindemann

                                    Its: Senior Vice President, Human Resources

     Attest:

By:  /s/Sam H. Dabbs, Jr.

Its: Assistant Secretary

<PAGE>

                                   APPENDIX A

                              THE SOUTHERN COMPANY
                           DEFERRED COMPENSATION PLAN

                    EMPLOYING COMPANIES AS OF JANUARY 1, 2004

                              Alabama Power Company
                              Georgia Power Company
                               Gulf Power Company
                            Mississippi Power Company
                       Savannah Electric and Power Company
                     Southern Communications Services, Inc.
                     Southern Company Energy Solutions, Inc.
                         Southern Company Services, Inc.
                    Southern Nuclear Operating Company, Inc.

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