Document:

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                                                                    EXHIBIT 10.8

                                     FORM OF
                          REGISTRATION RIGHTS AGREEMENT

         This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is made and
entered into as of [________ __, 2000], between The Southern Company, a Delaware
corporation ("Southern"), and Southern Energy, Inc., a Delaware corporation and
a wholly owned subsidiary of Southern (the "Company").

         WHEREAS, Southern and the Company have entered into a Master Separation
and Distribution Agreement and certain ancillary agreements, each effective
on [________ __ 2000], pursuant to which Southern and Southern Energy have
agreed to take certain actions to separate the Southern Energy Group from the
Southern Group (each as defined in the Master Separation and Distribution
Agreement), and, in connection with such separation, for Southern Energy to
acquire certain assets from Southern, and for Southern to acquire certain
entities currently associated with the Southern Energy Business from Southern
Energy;

         WHEREAS, Southern currently owns all of the issued and outstanding
shares of the Company's common stock (the "Common Stock");

         WHEREAS, the Company intends to offer and sell to the public (the
"IPO") by means of a Registration Statement (File No. __________) initially
filed with the Securities and Exchange Commission (the "SEC") on Form S-1 on
April [__], 2000 (the "Registration Statement") shares of its Common Stock;

         WHEREAS, immediately following the consummation of the IPO, Southern is
expected to own in excess of 80% of the outstanding shares of Common Stock;

         WHEREAS, Southern currently contemplates that, several months following
the IPO, Southern will distribute to the holders of its common stock, by means
of a pro rata distribution, all of the shares of Southern Energy common stock
then owned by Southern (the "Distribution"); and

         WHEREAS, Southern and the Company intend that the Distribution will be
tax-free to Southern and its stockholders under Section 355 of the Code; and

         WHEREAS, if Southern determines not to complete the Distribution, or
the Distribution is abandoned without Southern divesting itself of 100% of the
Common Stock it owns, Southern and the Company desire to make certain
arrangements to provide Southern with registration rights with respect to shares
of Common Stock it then holds;

         NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for other good and valuable consideration, the receipt and
sufficiency

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of which is hereby acknowledged and intending to be legally bound hereby, the
parties hereby agree as follows:

         Section 1. Effectiveness of Agreement; Term.

         1.1 Effective Date. This Agreement shall become effective upon the date
that Southern provides to the Company written notice (the "Abandonment Notice")
that it no longer intends to proceed with or complete the Distribution (the
"Effective Date").

         1.2 Shares Covered. This Agreement covers those shares of Common Stock
that are held by Southern immediately following the IPO and continue to be held
by Southern as of the date of the Abandonment Notice (subject to the provisions
of Section 7, the "Shares"). The "Shares" shall include any securities issued or
issuable with respect to the Shares by way of a stock dividend or a stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. Except as set forth in the immediately
preceding sentence, the "Shares" shall not include any shares of Common Stock
acquired by Southern after the completion of the IPO.

         Southern and any Permitted Transferees (as defined in Section 2.5) are
each referred to herein as a "Holder" and collectively as the "Holders" and the
Holders of Shares proposed to be included in any registration under this
Agreement are each referred to herein as a "Selling Holder" and collectively as
the "Selling Holders."

         Section 2. Demand Registration.

         2.1 Notice. Upon the terms and subject to the conditions set forth
herein, upon written notice of any Holder requesting that the Company effect the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of any or all of the Shares held by it, which notice shall specify the
intended method or methods of disposition of such Shares (which methods may
include, without limitation, a Shelf Registration, a Convertible Registration or
an Exchange Registration (as such terms are defined in Section 2.6)), the
Company will promptly give written notice of the proposed registration to all
other Holders and will use its best efforts to effect (at the earliest
reasonable date) the registration under the Securities Act of such Shares (and
the Shares of any other Holders joining in such request as are specified in a
written notice received by the Company within 20 days after receipt of the
Company's written notice of the proposed registration) for disposition in
accordance with the intended method or methods of disposition stated in such
request (each registration request pursuant to this Section 2.1 is sometimes
referred to herein as a "Demand Registration"); provided, however, that:

         (a) the Company shall not be obligated to effect registration with
respect to Shares pursuant to this Section 2 within 90 days after the effective
date of a previous registration, other than a Shelf Registration, effected with
respect to Shares pursuant to this Section 2;

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         (b) if, while a registration request is pending pursuant to this
Section 2, the Company determines in the good faith judgment of the general
counsel of the Company that such registration (i) would reasonably be expected
to have a material adverse effect on any existing proposal or plans by the
Company or any of its subsidiaries to engage in any material acquisition,
merger, consolidation, tender offer, other business combination, reorganization,
securities offering or other material transaction or, (ii) would require
disclosure of material information, the disclosure of which would have a
material adverse effect on the Company, the Company may postpone for up to 90
days the filing or effectiveness of such registration; provided, however, that
the Company may delay a Demand Registration hereunder only two times in any 12
month period, reduced by the number of times during such 12 month period that
notice of a Sales Blackout Period (as herein defined) has been given.

         (c) except in the case of a Convertible Registration or an Exchange
Registration, any Demand Registration requested hereunder shall request the
registration of Shares representing at least __% of the then-outstanding shares
of Common Stock, based on the number of such shares outstanding as reported by
the Company in its most recent annual or quarterly report filed with the SEC
under the Securities Exchange Act of 1934, as amended; and

         (d) if a Demand Registration is an underwritten offering and the
managing underwriters advise the Company in writing that in their opinion the
number of Shares requested to be included in such offering exceeds the number of
Shares which can be sold in an orderly manner in such offering within a price
range acceptable to the Holders of a majority of the Shares initially requesting
such registration or without materially adversely affecting the market for the
Common Stock, the Company shall include in such registration the number of
Shares requested to be included therein which in the opinion of such
underwriters can be sold in an orderly manner within the price range of such
offering and without materially adversely affecting the market for the Common
Stock, pro rata among the respective Holders thereof on the basis of the amount
of Shares owned by each Holder requesting inclusion of Shares in such
registration.

         2.2 Registration Expenses. The Company shall pay 20% of all
Registration Expenses (as defined in Section 8) for any registration requested
pursuant to this Section 2 (including any registration that is delayed or
withdrawn), and the balance of such Registration Expenses shall be paid by the
Holders requesting such registration, pro rata on the basis of the amount of
Shares owned by each Holder and requested to be included in such registration.

         2.3 Selection of Professionals. The Holders of a majority of the Shares
included in any Demand Registration shall have the right to select the
investment banker(s) and manager(s) to administer the offering; provided,
however, that if such Holders select an investment banker or manager that was
not one of the lead managers of the IPO, such investment banker or manager shall
not administer such offering if the Company reasonably objects thereto. The
Holders of a majority of the Shares included in any Demand Registration shall
have the right to select the financial printer, the solicitation and/or exchange
agent (if any) and one counsel for the Selling Holders. The Company shall select
its own outside counsel and independent auditors. The Company also shall be
entitled to designate any broker or other agent through whom the Holders shall
sell into the public market any Shares pursuant to a Shelf Registration that is
not an underwritten offering.

         2.4 Third Person Shares. The Company shall have the right to cause the
registration of securities for sale for the account of any Person (including the
Company) other than the Selling Holders (the "Third Person Shares") in any
registration of the

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Shares requested pursuant to this Section 2 so long as the Third Person Shares
are disposed of in accordance with the intended method or methods of disposition
requested pursuant to this Section 2; provided, however, that the Company shall
not have the right to cause the registration of such securities of such other
Persons if the registration requested pursuant to this Section 2 is a
Convertible Registration or an Exchange Registration.

         If a Demand Registration in which the Company proposes to include Third
Person Shares is an underwritten offering and the managing underwriters advise
the Company in writing that in their opinion the number of Shares and Third
Person Shares requested to be included in such offering exceeds the number of
Shares and Third Person Shares which can be sold in an orderly manner in such
offering within a price range acceptable to the Holders of a majority of the
Shares initially requesting such registration or without materially adversely
affecting the market for the Common Stock, the Company shall not include in such
registration any Third Person Shares unless all of the Shares initially
requested to be included therein are so included.

         2.5 Permitted Transferees. As used in this Agreement, "Permitted
Transferees" shall mean any transferee, whether direct or indirect, of Shares so
designated by Southern (or a subsequent holder) in a written notice to the
Company as provided for in Section 9.7, provided that such transferee is, at the
time of such transfer, an affiliate of the transferor within the meaning of Rule
501 under the Securities Act or any successor provision. Any Permitted
Transferees of the Shares shall be subject to and bound by all of the terms and
conditions herein applicable to Holders. The notice required by this Section 2.5
shall be signed by both the transferring Holder and the Permitted Transferees so
designated and shall include an undertaking by the Permitted Transferees to
comply with the terms and conditions of this Agreement applicable to Holders. In
the event of a transfer of any of the Shares to a transferee that is not a
Permitted Transferee, the Shares so transferred shall no longer be subject to
this Agreement.

         2.6 Shelf Registration; Convertible Registration; Exchange
Registration. With respect to any Demand Registration, the requesting Holders
may request the Company to effect a registration of the Shares (a) under a
registration statement pursuant to Rule 415 under the Securities Act (or any
successor rule) (a "Shelf Registration"); (b) in connection with such Holders'
registration under the Securities Act of securities (the "Convertible
Securities") convertible into, exercisable for or otherwise related to the
Shares (a "Convertible Registration"); or (c) in connection with such Holders'
offer to exchange the Shares for any debt or equity securities of such Holders,
a subsidiary or affiliate thereof or any other Person (an "Exchange
Registration").

         2.7 SEC Form. The Company shall use its best efforts to cause Demand
Registrations to be registered on Form S-3 (or any successor form), and if the
Company is not then eligible under the Securities Act to use Form S-3, Demand
Registrations shall be registered on Form S-1 (or any successor form). If a
Demand Registration is a Convertible Registration or an Exchange Registration,
the Company shall effect such registration on the appropriate Form under the
Securities Act for such registrations. The

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Company shall use its best efforts to become eligible to use Form S-3 and, after
becoming eligible to use Form S-3, shall use its best efforts to remain so
eligible.

         2.8 Other Registration Rights. The Company shall not grant to any
Persons the right to request the Company to register any equity securities of
the Company, or any securities convertible or exchangeable into or exercisable
for such securities unless such rights are consistent with the rights granted
under this Agreement.

         Section 3. Piggyback Registrations.

         3.1 Notice and Registration. If the Company proposes to register any of
its securities for public sale under the Securities Act (whether proposed to be
offered for sale by the Company or any other Person), on a form and in a manner
which would permit registration of the Shares for sale to the public under the
Securities Act (a "Piggyback Registration"), it will give prompt written notice
to the Holders of its intention to do so, and upon the written request of any or
all of the Holders delivered to the Company within 20 days after the giving of
any such notice (which request shall specify the Shares intended to be disposed
of by such Holders), the Company will use its best efforts to effect, in
connection with the registration of such other securities, the registration
under the Securities Act of all of the Shares which the Company has been so
requested to register by such Holders (which shall then become Selling Holders),
to the extent required to permit the disposition (in accordance with the same
method of disposition as the Company proposes to use to dispose of the other
securities) of the Shares to be so registered; provided, however, that:

         (a) if, at any time after giving such written notice of its intention
to register any of its other securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register such other securities, the
Company may, at its election, give written notice of such determination to the
Selling Holders (or, if prior to delivery of the Holders' written request
described above in this Section 3.1, the Holders) and thereupon the Company
shall be relieved of its obligation to register such Shares in connection with
the registration of such other securities (but not from its obligation to pay
Registration Expenses to the extent incurred in connection therewith as provided
in Section 3.3), without prejudice, however, to the rights (if any) of any
Selling Holders immediately to request (subject to the terms and conditions of
Section 2) that such registration be effected as a registration under Section 2;

         (b) the Company shall not be required to effect any registration of the
Shares under this Section 3 incidental to the registration of any of its
securities in connection with mergers, acquisitions, exchange offers,
subscription offers, dividend reinvestment plans or stock option or other
employee benefit plans of the Company;

         (c) if a Piggyback Registration is an underwritten primary registration
on behalf of the Company and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration

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exceeds the number which can be sold in such offering without materially
adversely affecting the marketability of the offering or the market for the
Common Stock, the Company shall include in such registration (i) first, the
securities the Company proposes to sell, (ii) second, the Shares requested to be
included in such registration, pro rata among the Holders of such Shares on the
basis of the number of Shares owned by each such Holder, and (iii) third, any
other securities requested to be included in such registration; and

         (d) if a Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Company's securities entitled to demand
registration thereof and the managing underwriters advise the Company in writing
that in their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering without
materially adversely affecting the marketability of the offering or the market
for the Common Stock, the Company shall include in such registration (i) first,
the securities requested to be included therein by the holders requesting such
registration and the Shares requested to be included in such registration, pro
rata among the holders of such securities on the basis of the number of
securities owned by each such holder, and (ii) second, any other securities
requested to be included in such registration. No registration of the Shares
effected under this Section 3 shall relieve the Company of its obligation to
effect a registration of Shares pursuant to Section 2.

         3.2 Selection of Professionals. If any Piggyback Registration is an
underwritten offering and any of the investment banker(s) or manager(s) selected
to administer the offering was not one of the managers of the IPO, such
investment banker or manager shall not administer such offering if the Holders
of a majority of the Shares included in such Piggyback Registration reasonably
object thereto. The Holders of a majority of the Shares included in any
Piggyback Registration shall have the right to select one counsel for the
Selling Holders. The Company shall select its own outside counsel and
independent auditors.

         3.3 Registration Expenses. The Company will pay all of the Registration
Expenses in connection with any registration pursuant to this Section 3 except
that the Holders of any Shares included in any such registration shall pay the
registration fee for such Shares.

         Section 4. Registration Procedures.

         4.1 Registration and Qualification. If and whenever the Company is
required to use its best efforts to effect the registration of any of the Shares
under the Securities Act as provided in Sections 2 and 3, including an
underwritten offering pursuant to a Shelf Registration, the Company will as
promptly as is practicable:

         (a) prepare and file with the SEC a registration statement with respect
to such Shares and use its best efforts to cause such registration statement to
become effective (provided that before filing a registration statement or
prospectus or any amendments or supplement thereto, the Company shall furnish to
the counsel selected by the Holders of a majority of the Shares covered by such
registration statement copies of

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all such documents proposed to be filed (which documents shall be subject to the
review and comment of such counsel);

         (b) except in the case of a Shelf Registration, Convertible
Registration or Exchange Registration, prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act with
respect to the disposition of all of the Shares until the earlier of (i) such
time as all of such Shares have been disposed of in accordance with the intended
methods of disposition set forth in such registration statement or (ii) the
expiration of nine months after such registration statement becomes effective;

         (c) in the case of a Shelf Registration (but not including any
Convertible Registration), prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all Shares subject thereto for a period ending on the earlier of
(i) 18 months after the effective date of such registration statement and (ii)
the date on which all the Shares subject thereto have been sold pursuant to such
registration statement (the "Shelf Effective Period");

         (d) in the case of a Convertible Registration or an Exchange
Registration, prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective and to comply
with the provisions of the Securities Act with respect to the disposition of all
of the Shares subject thereto until such time as the rules, regulations and
requirements of the Securities Act and the terms of the Convertible Securities
no longer require such Shares to be registered under the Securities Act (the
"Convertible Effective Period");

         (e) furnish to the Selling Holders and to any underwriter of such
Shares such number of conformed copies of such registration statement and of
each such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus included in such registration
statement (including each preliminary prospectus and any summary prospectus), in
conformity with the requirements of the Securities Act, such documents
incorporated by reference in such registration statement or prospectus, and such
other documents as the Selling Holders or such underwriter may reasonably
request;

         (f) use its best efforts to register or qualify all of the Shares
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as the Selling Holders or any underwriter of such
Shares shall reasonably request, and do any and all other acts and things which
may be necessary or advisable to enable the Selling Holders or any underwriter
to consummate the disposition in such jurisdictions of the Shares covered by
such registration statement, except that the Company shall not for any such
purpose be required to qualify generally to do business as a foreign corporation

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in any jurisdiction where it is not so qualified, or to subject itself to
taxation in any such jurisdiction, or to consent to general service of process
in any such jurisdiction;

         (g) (i) furnish to the Selling Holders, addressed to them, an opinion
of counsel for the Company and (ii) use its best efforts to furnish to the
Selling Holders, addressed to them, a "cold comfort" letter signed by the
independent public accountants who have certified the Company's financial
statements included in such registration statement, covering substantially the
same matters with respect to such registration statement (and the prospectus
included therein) and, in the case of such accountants' letter, with respect to
events subsequent to the date of such financial statements, as are customarily
covered in opinions of issuer's counsel and in accountants' letters delivered to
underwriters in underwritten public offerings of securities and such other
matters as the Selling Holders may reasonably request, in each case, in form and
substance and as of the dates reasonably satisfactory to the Selling Holders;

         (h) immediately notify the Selling Holders, at any time when a
prospectus relating to a registration pursuant to Section 2 or 3 is required to
be delivered under the Securities Act, of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and at the request of the Selling Holders prepare and furnish to the
Selling Holders a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Shares, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading.

         (i) permit any Selling Holder which Selling Holder, in its sole and
exclusive judgment, might be deemed to be an underwriter or a controlling person
of the Company, to participate in the preparation of such registration or
comparable statement and to require the insertion therein of material, furnished
to the Company in writing, which in the reasonable judgment of such Holder and
its counsel should be included;

         (j) to make available members of management of the Company, as selected
by the Holders of a majority of the Shares included in such registration, for
assistance in the selling effort relating to the Shares covered by such
registration, including, but not limited to, the participation of such members
of the Company's management in road show presentations.

         (k) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any securities included in such registration statement for sale in any
jurisdiction, the Company shall use it best efforts promptly to obtain the
withdrawal of such order; and

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         (l) use its best efforts to cause Shares covered by such registration
statement to be registered with or approved by such other government agencies or
authorities as may be necessary to enable the sellers thereof to consummate the
disposition of such Shares.

         The Company may require the Selling Holders to furnish the Company with
such information regarding the Selling Holders and the distribution of such
Shares as the Company may from time to time reasonably request in writing and as
shall be required by law, the SEC or any securities exchange on which any shares
of Common Stock are then listed for trading in connection with any registration.

         4.2 Underwriting. If requested by the underwriters for any underwritten
offering in connection with a registration requested hereunder (including any
registration under Section 3 which involves, in whole or in part, an
underwritten offering), the Company will enter into an underwriting agreement
with such underwriters for such offering, such agreement to contain such
representations and warranties by the Company and such other terms and
provisions as are customarily contained in underwriting agreements with respect
to secondary distributions, including, without limitation, indemnities to the
effect and to the extent provided in Section 6 and the provision of opinions of
counsel and accountants' letters to the effect and to the extent provided in
Section 4.1(g). The Company may require that the Shares requested to be
registered pursuant to Section 3 be included in such underwriting on the same
terms and conditions as shall be applicable to the Other Securities being sold
through underwriters under such registration; provided , however, that no
Selling Holder shall be required to make any representations or warranties to
the Company or the underwriters (other than representations and warranties
regarding such Holder and such Holder's intended method of distribution) or to
undertake any indemnification obligations to the Company or the underwriters
with respect thereto, except as otherwise provided in Section 6 hereof. The
Selling Holders shall be parties to any such underwriting agreement, and the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such Selling Holders.

         4.3 Blackout Periods for Shelf Registrations.

         (a) At any time when a Shelf Registration effected pursuant to Section
2 relating to the Shares is effective, upon written notice from the Company to
the Selling Holders that the Company determines in the good faith judgment of
the general counsel of the Company that the Selling Holders' sale of the Shares
pursuant to the Shelf Registration (i) would reasonably be expected to have a
material adverse effect on any existing proposal or plans by the Company or any
of its subsidiaries to engage in any material acquisition, merger,
consolidation, tender offer, other business combination, reorganization,
securities offering or other material transaction, or (ii) would require
disclosure of material information, the disclosure of which would have a
material adverse effect on the Company (an "Information Blackout"), the Selling
Holders shall suspend sales of the Shares pursuant to such Shelf Registration
until the earlier of (i) the date upon which such material information is
disclosed to the public or ceases to be material, (ii) 90 days after the general
counsel of the Company makes such good faith determination or (iii) such time as
the Company notifies the Selling Holders

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that sales pursuant to such Shelf Registration may be resumed (the number of
days from such suspension of sales of the Selling Holders until the day when
such sales may be resumed hereunder is hereinafter called a "Sales Blackout
Period"); provided that the Company shall not be permitted to impose a Sales
Blackout Period for more than two times in any 12 month period, reduced by the
number of times during such 12 month period that the filing or effectiveness of
a registration has been postponed pursuant to Section 2.1(b) hereof.

         (b) If there is an Information Blackout and the Selling Holders do not
notify the Company in writing of their desire to cancel such Shelf Registration,
the period set forth in Section 4.1(c)(i) shall be extended for a number of days
equal to the number of days in the Sales Blackout Period.

         4.4 Listing. In connection with the registration of any offering of the
Shares pursuant to this Agreement, the Company agrees to use its best efforts to
effect the listing of such Shares on any securities exchange on which any shares
of the Common Stock are then listed or otherwise facilitate the public trading
of such Shares.

         4.5 Holdback Agreements.

         (a) The Company shall not effect any public sale or distribution of its
equity securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven days prior to and during the
90-day period beginning on the effective date of any registration statement in
connection with a Demand Registration (other than a Shelf Registration) or a
Piggyback Registration, except pursuant to registrations on Form S-8 or any
successor form or unless the underwriters managing any such public offering
otherwise agree.

         (b) If the Holders of Shares notify the Company in writing that they
intend to effect an underwritten sale of Shares registered pursuant to a Shelf
Registration pursuant to Section 2 hereof, the Company shall not effect any
public sale or distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for its equity securities,
during the seven days prior to and during the 90-day period beginning on the
date such notice is received, except pursuant to registrations on Form S-8 or
any successor form or unless the underwriters managing any such public offering
otherwise agree.

         (c) If the Company completes an underwritten registration with respect
to any of its securities (whether offered for sale by the Company or any other
Person) on a form and in a manner that would have permitted registration of the
Shares and no Holder requested the inclusion of any Shares in such registration,
the Holders shall not effect any public sales or distributions of equity
securities of the Company, or any securities convertible into or exchangeable or
exercisable for such securities, until the termination of the holdback period
required from the Company by any underwriters in connection with such previous
registration, but in no event more than 90 days from the effective date of such
registration.

         Section 5. Preparation; Reasonable Investigation. In connection with
the preparation and filing of each registration statement registering the Shares
under the Securities Act and each sale of the Shares thereunder, the Company
will give the Selling

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Holders and the underwriters, if any, and their respective counsel and
accountants, access to its financial and other records, pertinent corporate
documents and properties of the Company and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements as shall be necessary, in the
opinion of the Selling Holders and such underwriters or their respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act.

         Section 6. Indemnification.

         (a) In the event of any registration of any of the Shares hereunder,
the Company will enter into customary indemnification arrangements to indemnify
and hold harmless each of the Selling Holders, each of their respective
directors and officers, each Person (as defined in (e) below) who participates
as an underwriter in the offering or sale of such securities, each officer and
director of each underwriter, and each Person, if any, who controls each such
Selling Holder or any such underwriter within the meaning of the Securities Act
(collectively, the "Covered Persons") against any losses, claims, damages,
liabilities and expenses, joint or several, to which such Person may be subject
under the Securities Act or otherwise insofar as such losses, claims, damages,
liabilities or expenses (or actions or proceedings in respect thereof) arise out
of are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in any related registration statement filed under the
Securities Act, any preliminary prospectus or final prospectus included therein,
or any amendment or supplement thereto, or any document incorporated by
reference therein, or (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Company will reimburse each such Covered Person,
as incurred, for any legal or any other expenses reasonably incurred by such
Covered Person in connection with investigating or defending any such loss,
claim, liability, action or proceeding; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, any such
preliminary prospectus or final prospectus, amendment or supplement in reliance
upon and in conformity with written information furnished to the Company by such
Selling Holder or such underwriter specifically for use in the preparation
thereof. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any such Covered Person and shall survive
the transfer of such securities by the Selling Holders.

         (b) Each of the Selling Holders, by virtue of exercising its respective
registration rights hereunder, agree and undertake to enter into customary
indemnification arrangements to indemnify and hold harmless (in the same manner
and to the same extent as set forth in clause (a) of this Section 6) the
Company, its directors and officers, each Person who participates as an
underwriter in the offering or sale of such securities, each

                                       11
<PAGE>   12

officer and director of each underwriter, and each Person, if any, who controls
the Company or any such underwriter within the meaning of the Securities Act,
with respect to any statement in or omission from such registration statement,
any preliminary prospectus or final prospectus included therein, or any
amendment or supplement thereto, if such statement or omission is contained in
written information furnished by such Selling Holder to the Company specifically
for inclusion in such registration statement or prospectus; provided, however,
that the obligation to indemnify shall be individual, not joint and several, for
each Selling Holder and shall be limited to the net amount of proceeds received
by such Selling Holder from the sale of Shares pursuant to such registration
statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Company or any such director,
officer or Person and shall survive the transfer of the registered securities by
the Selling Holders.

         (c) Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided, however, that the failure to give
prompt notice shall not impair any Person's rights to indemnification hereunder
to the extent such failure has not prejudiced the indemnifying party) and (ii)
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist with respect to such
claim, permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party. If such defense is
assumed, the indemnifying party shall not be subject to any liability for any
settlement made by the indemnified party without its consent (but such consent
shall not be unreasonably withheld). An indemnifying party who is not entitled
to, or elects not to, assume the defense of a claim shall not be obligated to
pay the fees and expenses of more than one counsel for all parties indemnified
by such indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.

         (d) Indemnification similar to that specified in the preceding
subdivisions of this Section 6 (with appropriate modifications) shall be given
by the Company and the Selling Holders with respect to any required registration
or other qualification of such Shares under any federal or state law or
regulation of governmental authority other than the Securities Act.

         (e) "Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity, or any
department, agency or political subdivision thereof.

         Section 7. Benefits and Termination of Registration Rights. The Holders
may exercise the registration rights granted hereunder in such manner and
proportions as they shall agree among themselves. The registration rights
hereunder shall cease to apply to any particular Shares and such securities
shall cease to be Shares when: (a) a registration statement with respect to the
sale of such Shares shall have become effective under the

                                       12
<PAGE>   13

Securities Act and such Shares shall have been disposed of in accordance with
such registration statement; (b) such Shares shall have been sold to the public
pursuant to Rule 144 under the Securities Act (or any successor provision); (c)
such Shares shall have been otherwise transferred, new certificates for them not
bearing a legend restricting further transfer shall have been delivered by the
Company and subsequent public distribution of them shall not require
registration or qualification of them under the Securities Act or any similar
state law then in force; (d) such Shares shall have ceased to be outstanding and
(e) in the case of Shares held by a Permitted Transferee, when such Shares
become eligible for sale pursuant to Rule 144(k) under the Securities Act (or
any successor provision).

         Section 8. Registration Expenses. As used in this Agreement, the term
"Registration Expenses" means all expenses incident to the Company's performance
of or compliance with the registration requirements set forth in this Agreement
including, without limitation, the following: (a) all registration and filing
fees; (b) the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Shares to be disposed of
under the Securities Act; (c) all expenses in connection with the preparation,
printing and filing of the registration statement, any preliminary prospectus or
final prospectus, any other offering document and amendments and supplements
thereto and the mailing and delivering of copies thereof to the underwriters and
dealers and directly to securityholders in the case of an Exchange Registration;
(d) the cost of printing and producing any agreements among underwriters,
underwriting agreements, and blue sky or legal investment memoranda, any selling
agreements and any amendments thereto or other documents in connection with the
offering, sale or delivery of the Shares to be disposed of; (e) all expenses in
connection with the qualification of the Shares to be disposed of for offering
and sale under state securities laws, including the fees and disbursements of
counsel for the underwriters in connection with such qualification and in
connection with any blue sky and legal investment surveys; (f) the filing fees
incident to securing any required review by the New York Stock Exchange and any
other securities exchange on which the Common Stock is then traded or listed of
the terms of the sale of the Shares to be disposed of and the trading or listing
of all such Shares on each such exchange; (g) the costs of preparing stock
certificates; (h) the costs and charges of the Company's transfer agent and
registrar; and (i) the fees and disbursements of any custodians, solicitation
agents, information agents and/or exchange agents. Registration Expenses shall
not include underwriting discounts and underwriters' commissions attributable to
the Shares being registered for sale on behalf of the Selling Holders, which
shall be paid by the Selling Holders.

         Section 9. Miscellaneous.

         9.1 No Inconsistent Agreements. The Company shall not on or after the
date of this Agreement enter into any agreement with respect to its securities
that violates or subordinates the rights expressly granted to the Holders in
this Agreement. The Company shall not take any action, or permit any change to
occur, with respect to its securities

                                       13
<PAGE>   14

which would adversely affect the ability of the Holders of Shares to include
such Shares in a registration undertaken pursuant to this Agreement.

         9.2 Complete Agreement. Except as otherwise set forth in this
Agreement, this Agreement shall constitute the entire agreement between the
parties hereto with respect to the subject matter hereof and shall supersede all
prior agreements and understandings, whether written or oral, between the
parties with respect to such subject matter.

         9.3 Authority. Each of the parties hereto represents to the other that
(i) it has the corporate power and authority to execute, deliver and perform
this Agreement, (ii) the execution, delivery and performance of this Agreement
by it has been duly authorized by all necessary corporate action, (iii) it has
duly and validly executed and delivered this Agreement, and (iv) this Agreement
is a legal, valid and binding obligation, enforceable against it in accordance
with its terms subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
general equity principles.

         9.4 Assignment. This Agreement shall be binding on and inure to the
benefit of and be enforceable by the parties hereto and with respect to the
Company, its respective successors and assigns, and any Permitted Transferees.

         9.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia (other than the laws regarding
conflicts of laws) as to all matters of validity, construction, effect,
performance and remedies, executed in and to be performed in that State.

         9.6 Severability. In the event that any part of this Agreement is
declared by a court or other judicial or administrative body to be null, void or
unenforceable, said provision shall survive to the extent it is not so declared,
and all of the other provisions of this Agreement shall remain in full force and
effect.

         9.7 Notices. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given: (i) on the date of service if served personally on the party to whom
notice is to be given; (ii) on the day of transmission if sent via facsimile
transmission to the facsimile number given below, and telephonic confirmation of
receipt is obtained promptly after completion of transmission; (iii) on the day
after delivery to Federal Express or similar overnight courier or the Express
Mail service maintained by the United States Postal Service; or (iv) on the
fifth day after mailing, if mailed to the party to whom notice is to be given,
by first class mail, registered or certified, postage prepaid and properly
addressed, to the party as follows:

                                       14
<PAGE>   15

         If to Southern:

         with a copy to:

         If to any other Holder, the address indicated for such Holder in the
Company's stock transfer records

         with a copy, so long as Southern owns any Shares, to:

         If to the Company:

         Any party may change its address for the purpose of this Section 9.7 by
giving the other party written notice of its new address in the manner set forth
above.

         9.8 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

         9.9 Remedies. Each of Southern and the Company shall be entitled to
enforce its rights under this Agreement specifically, to recover damages and
costs (including reasonable attorneys' fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. Each of Southern and the Company acknowledges and agrees that under
certain circumstances the breach by Southern or any of its affiliates or the
Company or any of its affiliates of a term or provision of this Agreement will
materially and irreparably harm the other party, that money damages will
accordingly not be an adequate remedy for such breach and that the
non-defaulting party, in its sole discretion and in addition to its rights under
this Agreement and any other remedies it may have at law or in equity, may apply
to any court of law or equity of

                                       15
<PAGE>   16

competent jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or prevent any
breach of the provisions of this Agreement.

         9.10 Waivers. The observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) by the party entitled to enforce such term, but such waiver shall
be effective only if it is in writing signed by the Company and the Holders of a
majority of the Shares. Unless otherwise expressly provided in this Agreement,
no delay or omission on the part of any party in exercising any right or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any right or privilege under this Agreement
operate as a waiver of any other right or privilege under this Agreement nor
shall any single or partial exercise of any right or privilege preclude any
other or further exercise thereof or the exercise of any other right or
privilege under this Agreement. No failure by either party to take any action or
assert any right or privilege hereunder shall be deemed to be a waiver of such
right or privilege in the event of the continuation or repetition of the
circumstances giving rise to such right unless expressly waived in writing by
the party against whom the existence of such waiver is asserted.

         9.11 Amendment and Modification. This Agreement may not be amended or
modified in any respect except by a written agreement signed by the Company and
the Holders of a majority of the Shares.

         9.12 Section and Paragraph Headings. The section and paragraph headings
in this Agreement are for reference purposes only, are not part of the agreement
of the parties hereto, and shall not affect the meaning or interpretation of
this Agreement. All references to days or months shall be deemed references to
calendar days or months. Unless the context otherwise requires, any reference to
a "Section" shall be deemed to refer to a section of this Agreement. The words
"hereof," "herein" and "hereunder" and words of similar import referring to this
Agreement refer to this Agreement as a whole and not to any particular provision
of this Agreement. Whenever the words "include," "includes" or "including" are
used in this Agreement, unless otherwise specifically provided, they shall be
deemed to be followed by the words "without limitation." This Agreement shall be
construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing the document to be drafted.

         9.13 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may be
executed by facsimile signature.

                                      * * *

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date and year first written above.

                                       16
<PAGE>   17

                              THE SOUTHERN COMPANY

                              By:
                                 ---------------------------------------
                              Name:
                              Title:

                              SOUTHERN ENERGY, INC.

                              By:
                                 ---------------------------------------
                              Name:
                              Title:

                                       17<PAGE>   1
                                                                    EXHIBIT 10.9

                                    FORM OF
                              SOUTHERN ENERGY, INC.

                          EMPLOYEE STOCK PURCHASE PLAN

<PAGE>   2

CONTENTS

<TABLE>
-------------------------------------------------------------------------------
<S>                                                                           <C>
Article 1. Purpose and Effective Date                                         1

Article 2. Definitions                                                        1

Article 3. Administration                                                     3

Article 4. Number of Shares                                                   4

Article 5. Eligibility Requirements                                           4

Article 6. Enrollment                                                         5

Article 7. Grant of Options on Enrollment                                     5

Article 8. Payment                                                            5

Article 9. Purchase of Shares                                                 6

Article 10. Withdrawal from the Plan, Termination of Employment,
and Leave of Absence                                                          7

Article 11. Designation of Beneficiary                                        8

Article 12. Miscellaneous                                                     8
</TABLE>

<PAGE>   3

SOUTHERN ENERGY, INC. EMPLOYEE STOCK PURCHASE PLAN

ARTICLE 1. PURPOSE AND EFFECTIVE DATE

         1.1      The purpose of the Southern Energy, Inc. Employee Stock
Purchase Plan (the "Plan") is to provide an opportunity for employees of
Southern Energy, Inc. (the "Company") to purchase shares of common stock of the
Company in a way which is both convenient and on a basis more favorable than
would otherwise be available. The Company believes that employee participation
in ownership of the Company on this basis will be to the mutual benefit of both
the employee and the Company. It is the intent of the Company to have the Plan
qualify as an "employee stock purchase plan" under Section 423 of the Internal
Revenue Code. The provisions of the Plan shall be construed to extend and limit
participation in a manner consistent with the requirements of Section 423 of the
Internal Revenue Code.

         1.2      It is intended that an initial Offering Period and Purchase
Period will begin on the IPO Date and exist for such period as designated by the
Committee prior to the IPO Date. Thereafter, it is intended that any future
Offering Periods and Purchase Periods will commence, if at all, at such times
designated by the Committee.

         1.3      The Plan shall be effective on the IPO Date (the "Effective
Date"). The Plan shall remain in effect in accordance with Section 12.7 of the
Plan.

ARTICLE 2. DEFINITIONS

         Whenever used in the Plan, the following terms shall have the meanings
set forth below, and when the meaning is intended, the initial letter of the
word shall be capitalized:

         2.1      "ACCOUNT" means a recordkeeping account maintained for a
                  Participant to which Participant contributions and payroll
                  deductions, if applicable, shall be credited.

         2.2      "BOARD" means the Board of Directors of the Company.

         2.3      "CODE" means the Internal Revenue Code of 1986, as amended.

         2.4      "COMPANY" means Southern Energy, Inc., a Delaware corporation.

         2.5      "CUT-OFF DATE" means the date established by the Committee
                  from time to time by which enrollment forms must be received
                  prior to an Enrollment Date.

         2.6      "EFFECTIVE DATE" shall have the meaning ascribed to it in
                  Section 1.3 hereof.

         2.7      "ELIGIBLE EMPLOYEE" means an Employee eligible to participate
                  in the Plan in accordance with Section 5.

                                       1
<PAGE>   4

         2.8      "EMPLOYEE" means any active employee of the Company or any
                  active employee of any company in the Participating Company
                  Group.

         2.9      "ENROLLMENT DATE" means the first Trading Day of an Offering
                  Period.

         2.10     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
                  amended.

         2.11     "FAIR MARKET VALUE" means, as of any applicable date, the
                  opening sale price on the principal securities exchange on
                  which the Shares are traded or, if there is no such sale on
                  the relevant date, then on the last previous day on which a
                  sale was reported.

         2.12     "GRANT DATE" means a date on which an Eligible Employee is
                  granted an option under the Plan pursuant to Section 7.

         2.13     "GRANT PRICE" means the Fair Market Value of a Share on the
                  Grant Date for such option.

         2.14     "IPO DATE" shall mean the first day on which Shares are
                  publicly traded on the New York Stock Exchange.

         2.15     "OFFERING PERIOD" means the period beginning on the IPO Date
                  and ending on the date designated by the Committee and each
                  period, if any, thereafter designated by the Committee;
                  provided, that each period shall, in no event end later than:
                  (i) five (5) years from the date the option is exercised if
                  the Purchase Price is to be not less than eighty-five percent
                  (85%) of the Fair Market Value of the Shares on the Purchase
                  Date; or (ii) otherwise, twenty-seven (27) months from the
                  Grant Date. The Offering Period may but need not be the same
                  as the Purchase Period, as determined by the Committee.

         2.16     "PARTICIPANT" means an Eligible Employee who has enrolled in
                  the Plan pursuant to Section 6.

         2.17     "PARTICIPATING COMPANY GROUP" means a Subsidiary which has
                  been designated by the Committee in accordance with Section
                  3.2 of the Plan as covered by the Plan.

         2.18     "PURCHASE DATE" with respect to a Purchase Period means the
                  last Trading Day in such Purchase Period.

         2.19     "PURCHASE DATE PRICE" means the Fair Market Value of a Share
                  on the applicable Purchase Date.

         2.20     "PURCHASE PERIOD" means the period beginning on the IPO Date
                  and ending on the date designated by the Committee and each
                  period, if any, thereafter designated by the Committee;
                  provided, that each period shall, in no event end later than:
                  (i) five (5) years from the date the option is exercised if
                  the Purchase Price is to be not less than eighty-five percent
                  (85%) of the Fair Market Value of the Shares on the Purchase
                  Date; or (ii) otherwise, twenty-seven (27) months from the
                  Grant Date.

                                       2
<PAGE>   5

         2.21     "PURCHASE PRICE" means the price designated by the Committee,
                  at which each Share may be purchased under any option, but in
                  no event less than eighty-five percent (85%) of the lesser of:

                  (a)      The Grant Price, as defined in Section 2.13; and

                  (b)      The Purchase Date Price, as defined in Section 2.19.

         2.22     "RETIREMENT" or "RETIRE" means a termination of (or to
                  terminate) employment with the Company and its subsidiaries
                  after qualifying for retirement under any applicable
                  retirement plan of the Company or any company in the
                  Participating Company Group, as determined by the Committee.

         2.23     "RULE 16B-3" means Rule 16b-3 under the Exchange Act.

         2.24     "SHARES" means shares of the Company's common stock.

         2.25     "SUBSIDIARY" means any corporation in an unbroken chain of
                  corporations beginning with the Company if, as of the
                  applicable Enrollment Date, each of the corporations other
                  than the last corporation in the chain owns stock possessing
                  fifty percent (50%) or more of the total combined voting power
                  of all classes of stock in one of the other corporations in
                  the chain.

         2.26     "TRADING DAY" means any day the New York Stock Exchange is
                  open for trading.

ARTICLE 3. ADMINISTRATION

         3.1      The Plan shall be administered by a Committee appointed by the
Board (the "Committee"). The members of the Committee shall be appointed from
time to time by, and shall serve at the discretion of the Board. The Committee
shall have the authority to delegate administrative duties to officers,
directors or employees of the Company.

         3.2      The Committee shall have the power, subject to and within the
limits of the express provisions of the Plan, to construe and interpret the Plan
and options granted under it; to establish, amend, and revoke rules and
regulations for administration of the Plan (including, without limitation, the
determination and change of Offering Periods, Purchase Periods and payment
procedures and the establishment of the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars); to determine all questions of
policy and expediency that may arise in the administration of the Plan to make
any changes to the Plan or its operations to reduce or eliminate any unfavorable
accounting consequences to the extent deemed appropriate by the Committee; and,
generally, to exercise such powers and perform such acts as the Committee deems
necessary or expedient to promote the best interests of the Company, including,
but not limited to, designating from time to time which Subsidiaries of the
Company shall be part of the Participating Company Group. The Committee's
determinations as to the interpretation and operation of this Plan shall be
final and conclusive.

                                       3
<PAGE>   6

         In exercising the powers described in the foregoing paragraph, the
Committee may adopt special or different rules for the operation of the Plan
including, but not limited to, rules which allow employees of any foreign
Subsidiary to participate in, and enjoy the tax benefits offered by, the Plan;
provided that such rules shall not result in any grantees of options having
different rights and/or privileges under the Plan in violation of Section 423 of
the Code nor otherwise cause the Plan to fail to satisfy the requirements of
Section 423 of the Code and the regulations thereunder.

         3.3      The Plan provisions relating to the administration of the Plan
may be amended by the Committee from time to time as may be desirable to satisfy
any requirements of or under the federal securities and/or other applicable laws
of the United States, to obtain any exemption under such laws, or to reduce or
eliminate any unfavorable accounting consequences.

ARTICLE 4. NUMBER OF SHARES

         4.1      _________ Shares are reserved for sale and authorized for
issuance pursuant to the Plan. If any option granted under the Plan shall for
any reason terminate without having been exercised, the Shares not purchased
under such option shall again become available for the Plan.

         4.2      ADJUSTMENTS. In the event of any change in corporate
capitalization such as a stock split, or a corporate transaction such as any
merger, consolidation, separation, including a spin-off, or other distribution
of stock or property of the Company, any reorganization (whether or not such
reorganization comes within the definition of such term in Code Section 368) or
any partial or complete liquidation of the Company, the Committee may make such
adjustment it deems appropriate to prevent dilution or enlargement of rights in
the number and class of Shares which may be delivered under Section 4.1, in the
number, class of and/or price of Shares available for purchase under the Plan
and in the number of Shares which an Employee is entitled to purchase and any
other adjustments it deems appropriate. Without limiting the Committee's
authority under this Plan, in the event of any transaction, the Committee may
elect to have the options hereunder assumed or such options substituted by a
successor entity, to terminate all outstanding options either prior to their
expiration or upon completion of the purchase of Shares on the next Purchase
Date, or to take such other action deemed appropriate by the Committee.

ARTICLE 5. ELIGIBILITY REQUIREMENTS

         5.1      Except as provided in Section 5.2, each Employee shall become
eligible to participate in the Plan in accordance with Section 6 on the first
Enrollment Date on or following the later of (a) the date such individual
becomes an Employee; or (b) the Effective Date. Participation in the Plan is
entirely voluntary.

        5.2       The following Employees are not eligible to participate in the
Plan:

                  (a)      Employees who, immediately upon purchasing Shares
                           under the Plan, would own directly or indirectly, or
                           hold options or rights to acquire, an aggregate of
                           five percent (5%) or more of the total combined
                           voting power or value of all outstanding shares of
                           all classes of stock of the Company or any Subsidiary
                           (and for purposes of this paragraph, the rules of
                           Section 424(d) of the Code shall apply,

                                       4
<PAGE>   7

                           and stock which the Employee may purchase under
                           outstanding options shall be treated as stock owned
                           by the Employee);

                  (b)      Employees whose customary employment is for not more
                           than five (5) months in any calendar year; and

                  (c)      Employees whose customary employment is twenty (20)
                           hours or less per week.

ARTICLE 6. ENROLLMENT

         All Eligible Employees as of the Effective Date shall be deemed
enrolled in the Plan with respect to the Offering Period beginning on the IPO
Date. Thereafter, any Eligible Employee may enroll in the Plan for any future
Offering Period by completing and signing an enrollment election form or by such
other means as the Committee shall prescribe and submitting such enrollment
election to the Company or a member of the Participating Company Group in
accordance with procedures established by the Committee on or before the Cut-Off
Date with respect to such Offering Period.

ARTICLE 7. GRANT OF OPTIONS ON ENROLLMENT

         7.1      Enrollment by an Eligible Employee in the Plan as of an
Enrollment Date will constitute the grant by the Company to such Participant of
an option on such Enrollment Date to purchase Shares from the Company pursuant
to the Plan.

         7.2      An option granted to a Participant pursuant to this Plan shall
expire, if not terminated for any reason first, on the earliest to occur of (a)
the end of the Offering Period in which such option was granted; (b) the
completion of the purchase of Shares under the option under Section 9; or (c)
the date on which participation of such Participant in the Plan terminates for
any reason.

         7.3      An option granted to a Participant under the Plan shall give
the Participant a right to purchase on a Purchase Date the largest number of
whole or fractional Shares, as designated by the Committee, which the funds
accumulated in the Participant's Account as of such Purchase Date will purchase
at the applicable Purchase Price; provided, however, that the Committee may, in
its discretion, limit the number of Shares purchased by each Participant in any
Purchase Period.

         Notwithstanding anything to the contrary herein, no Employee shall be
granted an option under the Plan (or any other plan of the Company or a
Subsidiary intended to qualify under Section 423 of the Code) which would permit
the Employee to purchase Shares under the Plan (and such other plan) in any
calendar year with a Fair Market Value (determined at the time such option is
granted) in excess of $25,000.

ARTICLE 8. PAYMENT

         The Committee may designate the time and manner for payment of Shares
to be purchased during the Purchase Period, including, but not limited to,
payment by each Participant in cash or by certified check on a date designated
by the Committee prior to the Purchase Date, or through payroll deductions, the
terms and conditions of which are designated by the Committee. Payment amounts

                                       5
<PAGE>   8

shall be credited to a Participant's Account under this Plan. All payment
amounts may be used by the Company for any purpose and the Company shall have no
obligation to segregate such funds. No interest accrues on payments by
Participants.

ARTICLE 9. PURCHASE OF SHARES

         9.1      Any option held by the Participant which was granted under
this Plan and which remains outstanding as of a Purchase Date shall be deemed to
have been exercised on such Purchase Date for the number of whole or fractional
Shares, as designated by the Committee, which the funds accumulated in the
Participant's Account as of the Purchase Date will purchase at the applicable
Purchase Price (but not in excess of the number of Shares for which options have
been granted to the Participant pursuant to Section 7.3). Options for other
Shares for which options have been granted which are not purchased on the last
Purchase Date during the Offering Period shall terminate.

         9.2      If, after a Participant's exercise of an option under Section
9.1, an amount remains credited to the Participant's Account as of a Purchase
Date, then the remaining amount shall be (a) if no further Purchase Periods are
immediately contemplated by the Committee, distributed to the Participant as
soon as administratively feasible, or (b) if another Purchase Period is
contemplated by the Committee, carried forward in the Account for application to
the purchase of Shares on the next following Purchase Date. 9.3 If Shares are
purchased by a Participant pursuant to Section 9.1, then, within a reasonable
time after the Purchase Date, the Company shall deliver or cause to be delivered
to the Participant a certificate or certificates for the whole number of Shares
purchased by the Participant unless the Company has made arrangements to have
the Shares held at a bank or other appropriate institution in noncertificated
form. If any law or applicable regulation of the Securities and Exchange
Commission or other body having jurisdiction shall require that the Company or
the Participant take any action in connection with the Shares being purchased
under the option, delivery of the certificate or certificates for such Shares
shall be postponed until the necessary action shall have been completed, which
action shall be taken by the Company at its own expense, without unreasonable
delay. Certificates delivered pursuant to this Section 9.3 shall be registered
in the name of the Participant or, if the Participant so elects, in the names of
the Participant and his or her spouse, as joint tenants with rights of
survivorship, or as spousal community property, or in certain forms of trust
approved by the Committee, to the extent permitted by law.

         9.4      In the case of Participants employed by a member of the
Participating Company Group, the Committee may provide for Shares to be sold
through the Subsidiary to such Participants, to the extent consistent with
Section 423 of the Code.

         9.5      If the total number of Shares for which options are or could
be exercised on any Purchase Date in accordance with this Section 9, when
aggregated with all Shares for which options have been previously exercised
under this Plan, exceeds the maximum number of Shares reserved in Section 4.1,
the Company shall allocate the Shares available for delivery and distribution in
the ratio that the balance in each Participant's Account bears to the aggregate
balances of all Participants' Accounts, and the remaining balance of the amount
credited to the Account of each Participant under the Plan shall be returned to
him or her as promptly as possible.

                                       6
<PAGE>   9

         9.6      If a Participant or former Participant sells, transfers, or
otherwise makes a disposition of Shares purchased pursuant to an option granted
under the Plan within two (2) years after the date such option is granted or
within one (1) year after the date such Shares were transferred to the
Participant, and if such Participant or former Participant is subject to United
States federal income tax, then such Participant or former Participant shall
notify the Company or a member of the Participating Company Group in writing of
such sale, transfer or other disposition within ten (10) days of the
consummation of such sale, transfer, or other disposition.

ARTICLE 10. WITHDRAWAL FROM THE PLAN, TERMINATION OF EMPLOYMENT, AND LEAVE OF
ABSENCE

         10.1     WITHDRAWAL FROM THE PLAN. A Participant may withdraw from the
Plan in full (but not in part) during any Purchase Period by delivering a notice
of withdrawal to the Company or a member of the Participating Company Group (in
a manner prescribed by the Committee) at any time up to but not including the
fifteen (15) days prior to the Purchase Date next following the date such notice
of withdrawal is delivered, or at such shorter time in advance of such Purchase
Date as the Committee may permit. If notice of withdrawal is timely received,
all funds then accumulated in the Participant's Account shall not be used to
purchase Shares, but shall instead be distributed to the Participant as soon as
administratively feasible. An Employee who has withdrawn during a Purchase
Period may not return funds to the Company or a member of the Participating
Company Group during the same Purchase Period and require the Company or member
of the Participating Company Group to apply those funds to the purchase of
Shares. Any Eligible Employee who has withdrawn from the Plan may, however,
re-enroll in the Plan on the next subsequent Enrollment Date, if any.

         10.2     TERMINATION OF EMPLOYMENT. Participation in the Plan
terminates immediately when a Participant ceases to be employed by the Company
or a member of the Participating Company Group for any reason whatsoever or
otherwise ceases to be an Eligible Employee, and such terminated Participant's
outstanding options shall thereupon terminate. As soon as administratively
feasible after termination of participation, the Company or a member of the
Participating Company Group shall pay to the Participant or his or her
beneficiary or legal representative any amounts accumulated in the Participant's
Account at the time of termination of participation. Notwithstanding anything to
the contrary herein, if a Participant ceases to be an Eligible Employee by
reason of Retirement, death, or any other reason contemplated in Section 5.2
hereof and the Purchase Date is within three (3) months of the date the
Participant ceases to be an Eligible Employee, the Participant (or his or her
designated beneficiary, as applicable) shall have the right, upon ceasing to be
an Eligible Employee and in accordance with procedures prescribed by the
Committee, to elect to continue to participate in the Plan in accordance with
Section 10.1 through the end of the Purchase Period.

         10.3     LEAVE OF ABSENCE. If a Participant takes a leave of absence
without terminating employment, such Participant shall have the right, at the
commencement of the leave of absence and in accordance with procedures
prescribed by the Committee, to elect to withdraw from the Plan in accordance
with Section 10.1. To the extent determined by the Committee or required by
Section 423 of the Code, certain leaves of absence may be treated as cessations
of employment for purposes of the Plan.

                                       7
<PAGE>   10

ARTICLE 11. DESIGNATION OF BENEFICIARY

        Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom the amount in his or her Account is to be paid in case of his or her death
before he or she receives any or all of such benefit. Each such designation
shall revoke all prior designations by the same Participant, shall be in a form
prescribed by the Committee, and will be effective only when filed by the
Participant in writing with the Committee during the Participant's lifetime. In
the absence of any such designation, any Account balance remaining unpaid at the
Participant's death shall be paid to the Participant's estate.

ARTICLE 12. MISCELLANEOUS

         12.1     RESTRICTIONS ON TRANSFER. Options granted under the Plan to a
Participant may not be exercised during the Participant's lifetime other than by
the Participant. Neither amounts credited to a Participant's Account nor any
rights with respect to the exercise of an option or to receive stock under the
Plan may be assigned, transferred, pledged, or otherwise disposed of in any way
by the Participant other than by will or the laws of descent and distribution.
Any such attempted assignment, transfer, pledge, or other disposition shall be
without effect, except that the Company may treat such act as an election to
withdraw from the Plan in accordance with Section 10.1.

         12.2     ADMINISTRATIVE ASSISTANCE. If the Committee in its discretion
so elects, it may retain a brokerage firm, bank, or other financial institution
to assist in the purchase of Shares, delivery of reports, or other
administrative aspects of the Plan. If the Committee so elects, each Participant
shall (unless prohibited by applicable law) be deemed upon enrollment in the
Plan to have authorized the establishment of an account on his or her behalf at
such institution. Shares purchased by a Participant under the Plan shall be held
in the Account in the Participant's name, or if the Participant so indicates in
the enrollment form, in the Participant's name together with the name of his or
her spouse in joint tenancy with right of survivorship or spousal community
property, or in certain forms of trust approved by the Committee.

         12.3     COSTS. All costs and expenses incurred in administering the
Plan shall be paid by the Company, except that any stamp duties, transfer taxes,
and any brokerage fees applicable to participation in the Plan may be charged to
the Account of such Participant by the Company.

         12.4     WITHHOLDING. The Company or any member of the Participating
Company Group shall have the power and the right to deduct or withhold, or
require a Participant to remit to the Company or any member of the Participating
Company Group, an amount sufficient to satisfy Federal, state and local taxes,
domestic or foreign, required by law or regulation to be withheld with respect
to any taxable event arising as a result of this Plan.

         12.5     EQUAL RIGHTS AND PRIVILEGES. All Eligible Employees shall have
equal rights and privileges with respect to the Plan so that the Plan qualifies
as an "employee stock purchase plan" within the meaning of Section 423 or any
successor provision of the Code and the related regulations. Notwithstanding the
express terms of the Plan, any provision of the Plan which is inconsistent with
Section 423 or any successor provision of the Code shall without further act or
amendment by the Company or the Board be reformed to comply with the
requirements of Section 423 of the Code. This Section 12.5 shall take precedence
over all other provisions in the Plan.

                                       8
<PAGE>   11

         12.6     APPLICABLE LAW. The Plan shall be governed by the substantive
laws (excluding the conflict of laws rules) of the State of Delaware.

         12.7     AMENDMENT AND TERMINATION. The Board may amend, alter, or
terminate the Plan at any time; provided, however, that (1) the Plan may not be
amended in a way which will cause rights issued under the Plan to fail to meet
the requirements of Section 423 of the Code; and (2) no amendment which would
amend or modify the Plan in a manner requiring stockholder approval under
Section 423 of the Code or the requirements of any securities exchange on which
the Shares are traded shall be effective unless such stockholder approval is
obtained. In addition, the Committee may amend the Plan as provided in Section
3.3, subject to the conditions set forth therein and in this Section 12.7.

         If the Plan is terminated, the Board or Committee may elect to
terminate all outstanding options either prior to their expiration or upon
completion of the purchase of Shares on the next Purchase Date, or may elect to
permit options to expire in accordance with their terms (and participation to
continue through such expiration dates). If the options are terminated prior to
expiration, all funds accumulated in Participants' Accounts as of the date the
options are terminated shall be returned to the Participants as soon as
administratively feasible.

         12.8     NO RIGHT OF EMPLOYMENT. Neither the grant nor the exercise of
any rights to purchase Shares under this Plan nor anything in this Plan shall
impose upon the Company or a member of the Participating Company Group any
obligation to employ or continue to employ any Employee. The right of the
Company or a member of the Participating Company Group to terminate any Employee
shall not be diminished or affected because any rights to purchase Shares have
been granted to such Employee.

         12.9     RIGHTS AS SHAREHOLDER. No Participant shall have any rights as
shareholder unless and until Shares of Common Stock have been issued to him or
her.

         12.10    GOVERNMENTAL REGULATION. The Company's obligation to sell and
deliver Shares of the Company's common stock under this Plan is subject to the
approval of any governmental authority required in connection with the
authorization, issuance, or sale of such Shares.

         12.11    GENDER. When used herein, masculine terms shall be deemed to
include the feminine, except when the context indicates to the contrary.

         12.12    CONDITION FOR PARTICIPATION. As a condition to participation
in the Plan, Eligible Employees agree to be bound by the terms of the Plan
(including, without limitation, the notification requirements of Section 9.6)
and the determinations of the Committee.

                                       9
<PAGE>   12

        Executed this __________ day of _____________, 2000.

        SOUTHERN ENERGY, INC.

        By:
            -------------------------

        Title:
               ----------------------

                                       10

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