Edgar Filing: SOUTHERN CO

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT of 1934
(AMENDMENT NO. )

Filed by the Registrant [x]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[X] Preliminary Proxy Statement [ ]Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e) (2))

[ ] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Materials Pursuant to Rule 14a-11(c) or Rule 14a-12

THE SOUTHERN COMPANY
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(Name of Registrant as Specified In Its Charter)

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[X] No fee required.

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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

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[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange
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fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

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(4) Date Filed:

(SOUTHERN COMPANY LOGO)

NOTICE OF
ANNUAL MEETING
2001
& PROXY STATEMENT

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PROXY STATEMENT
CONTENTS
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General Information 1
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Corporate Governance 3
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Nominees for Election as Directors 5
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Proposal to Approve the Company's Omnibus Incentive
Compensation Plan 6
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Stockholder Proposal on Renewable Energy Sources 10
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Audit Committee Report 12
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Compensation & Management Succession Committee Report 13
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Executive Compensation Information 16
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Stock Ownership Table 17
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Summary Compensation Table 19
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Stock Options 20
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Option Exercises 21
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Long-Term Incentive Awards Table 22
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Pension Plan Table 23
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Five-Year Performance Graph 24
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Appendix A - Audit Committee Charter A1

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LETTER TO STOCKHOLDERS
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ALLEN FRANKLIN
Chairman, President and
Chief Executive Officer

(SOUTHERN COMPANY LOGO)

Dear Fellow Stockholder:
You are invited to attend the 2001 Annual Meeting of
Stockholders at 10:00 a.m. EDT on Wednesday, May 23, 2001 at
the Savannah International Trade & Convention Center in
Savannah, Georgia.
At the meeting, I will report on our business and our plans
for the future. Also, we will elect our Board of Directors
and vote on the other matters set forth in the accompanying
Notice.
Your vote is important. Please review the proxy material and
return your proxy form as soon as possible.
We look forward to seeing you on May 23.
Sincerely,
/s/ Allen Franklin
Allen Franklin (PHOTO)

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS - MAY 23, 2001
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TIME
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10:00 a.m. EDT, on Wednesday, May 23, 2001

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PLACE
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Savannah International Trade & Convention Center
One International Drive
Savannah, Georgia

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BUSINESS
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(1) Elect 10 members of the Board of Directors
(2) Approve the Omnibus Incentive Compensation Plan;
(3) Consider and vote upon stockholder proposal, if presented at the meeting, as
described in Item 3 of the proxy statement; and
(4) Transact other business properly coming before the meeting or any
adjournments thereof.

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RECORD DATE
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Stockholders owning Company shares at the close of business on March 26, 2001,
are entitled to attend and vote at the meeting.

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DOCUMENTS
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The Proxy Statement, proxy form, and Southern Company Annual Report are included
in this mailing.

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VOTING
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Even if you plan to attend the meeting in Savannah, please provide your voting
instructions in one of the following ways as soon as possible:

(1) Internet -- use the Internet address on the proxy form
(2) Telephone -- use the toll-free number on the proxy form
(3) Mail -- mark, sign, and date the proxy form and return in the enclosed
postage-paid envelope
By Order of the Board of Directors, Tommy Chisholm, Secretary, April 13, 2001

PROXY STATEMENT

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GENERAL INFORMATION
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Q: WHY AM I RECEIVING THIS PROXY STATEMENT?

A:The board of directors of Southern Company is soliciting your proxy for the
2001 Annual Meeting of Stockholders and any adjournments thereof. The meeting
will be held at 10:00 a.m., EDT, on Wednesday, May 23, 2001, at the Savannah
International Trade & Convention Center, One International Drive, Savannah,
Georgia. This Proxy Statement and proxy form are initially being provided to
stockholders on or about April 13, 2001.

Q: WHAT'S BEING VOTED UPON AT THE MEETING?

A:The election of 10 directors, the approval of the Company's Omnibus Incentive
Compensation Plan, and the consideration of a stockholder proposal if
presented at the meeting. We are not aware of any other matters to be
presented to the meeting; however, the holders of the proxies will vote in
their discretion on any other matters properly presented.

Q: HOW DO I GIVE VOTING INSTRUCTIONS?

A:You may attend the meeting and give instructions in person or by the Internet,
by telephone, or by mail. Instructions are on the proxy form. The proxy
committee, named on the enclosed proxy form, will vote all properly executed
proxies that are delivered pursuant to this solicitation and not subsequently
revoked in accordance with the instructions given by you.

Q: CAN I CHANGE MY VOTE?

A:Yes, you may revoke your proxy by submitting a subsequent proxy or by written
request received by the Company's secretary before the meeting.

Q: WHO CAN VOTE?

A:All stockholders of record on the record date of March 26, 2001. On that date,
there were 684,081,584 Southern Company common shares outstanding and entitled
to vote.

Q: HOW MUCH DOES EACH SHARE COUNT?

A:Each share counts as one vote, except votes for directors may be cumulative.
For directors, you may multiply the number of shares you own by the number of
directors to be elected and then cast the resulting number among the nominees
as you wish. For the purpose of determining a quorum, abstentions are counted,
but shares held by a broker that the broker fails to vote are not. Neither are
counted for or against the matters being considered.

Q: WHAT DOES IT MEAN IF I GET MORE THAN ONE PROXY FORM?

A:You will receive a proxy form for each account that you have. Please vote
proxies for all accounts to ensure that all your shares are voted. If you wish
to consolidate multiple accounts, please contact Stockholder Services at (800)
554-7626.

Q: WHEN ARE STOCKHOLDER PROPOSALS DUE FOR THE 2002 ANNUAL MEETING OF
STOCKHOLDERS?

A:The deadline for the receipt of stockholder proposals to be considered for
inclusion in the Company's proxy materials is December 14, 2001. They must be
submitted in writing to Tommy Chisholm, Corporate Secretary, Bin 912, Southern
Company, 270 Peachtree Street NW, Atlanta, Georgia 30303. Additionally, the
proxy solicited by the Board of Directors for next year's meeting will confer
discretionary authority to vote on any stockholder proposal presented at that
meeting that is not included in the Company's proxy materials unless the
Company is provided written notice of such proposal no later than February 27,
2002.

Q: WHO PAYS THE EXPENSE OF SOLICITING PROXIES?

A:The Company pays the cost of soliciting proxies. The officers or other
employees of the Company or its subsidiaries may solicit proxies to have a
larger representation at the meeting.

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CORPORATE GOVERNANCE
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HOW IS THE COMPANY ORGANIZED?

Southern Company is a holding company managed by a core group of officers and
governed by a Board of Directors that has been set at 10 members. The nominees
for election as directors consist of eight non-employees and two executive
officers of the Company.

WHAT ARE DIRECTORS PAID FOR THEIR SERVICES?

Only non-employee directors are compensated for Board service. The pay
components are:

ANNUAL RETAINERS:
- $40,000 if first elected as a director before 1997, of which $10,000 is
deferred in shares of Company common stock until Board membership ends

- $49,000 if first elected as a director in 1997 or later, of which $19,000 is
deferred in shares of Company common stock until Board membership ends

- $5,000 if serving as chairman of a Board committee

EQUITY GRANTS:
- 400 additional shares of Company common stock in quarterly grants of 100
shares deferred until board membership ends

MEETING FEES:
- $1,250 for each Board meeting attended

- $1,000 for each committee meeting attended

Directors may elect to defer up to 100 percent of their compensation until
membership on the Board ends.

There is no pension plan for non-employee directors.

COMMITTEES OF THE BOARD

AUDIT COMMITTEE:

- Members are Mr. Hardman, Chairman, Ms. Bern, Mr. Gordon, Dr. Pate and Mr. St.
Pe

- Met seven times in 2000

- Oversees the Company's auditing, accounting, financial reporting, legal
compliance, and internal control functions

- Reviews independent public accountant's reports on the Company's financial
statements, significant changes in accounting principles and practices,
significant proposed adjustments, and any unresolved disagreements with
management concerning accounting or disclosure matters

- Recommends independent public accountants and reviews their services, fees,
and the scope and timing of audits

The five members of the Audit Committee are independent as defined by rules of
the New York Stock Exchange. The Board of Directors has adopted an Audit
Committee Charter (see Appendix A).

Upon recommendation of the Audit Committee, the Board of Directors has selected
Arthur Andersen LLP as independent public accountants for 2001. Representatives
of Arthur Andersen LLP are expected to be present at the meeting and will have
an opportunity to make a statement if they desire and to respond to appropriate
questions from stockholders.

COMPENSATION & MANAGEMENT SUCCESSION COMMITTEE:

- Members are Mr. St. Pe, Chairman, and Mr. Hardman

- Met five times in 2000

- Evaluates performance of executive officers and recommends their compensation

- Administers executive compensation plans

- Reviews management succession plans

GOVERNANCE COMMITTEE:

- Members are Mr. Gordon, Chairman, Ms. Bern, Mr. Chapman and Mr. James

- Met three times in 2000

- Reviews corporate governance issues

- Considers and recommends nominees for election as directors

- Considers and recommends membership of committees of the board

- Reviews and recommends director compensation

The Governance Committee expects to identify from its own resources qualified
nominees but will accept from stockholders recommendations of individuals to be
considered as nominees. Stockholder recommendations, together with a description
of the proposed nominee's qualifications, relevant biographical information, and
signed consent to serve, should be submitted in writing to the Company's
secretary and received by that office by December 14, 2001. Stockholder
recommendations will be considered by the Governance Committee in determining
nominees to recommend to the Board. The final selection of the Board's nominees
is within the sole discretion of the Board of Directors.

FINANCE COMMITTEE:

- Members are Mr. Chapman, Chairman, Mr. Amos and Mr. James

- Met seven times in 2000

- Reviews Southern's financial matters, recommends actions to the board, and
approves certain capital expenditures

NUCLEAR OVERSIGHT COMMITTEE:

Membership consists of Dr. Pate, Chairman

- Reviews nuclear operations activities
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The Board of Directors met seven times in 2000. The average attendance for
directors at all board and committee meetings was 93 percent. No nominee
attended less than 75 percent of applicable meetings.

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NOMINEES FOR ELECTION AS DIRECTORS
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ITEM NO. 1 -- ELECTION OF DIRECTORS

The persons named on the enclosed proxy form will vote, unless otherwise
instructed, each properly executed form of proxy for the election of the
following nominees as directors. If any named nominee becomes unavailable for
election, the board may substitute another nominee. In that event, the proxy
would be voted for the substitute nominee unless instructed otherwise on the
proxy form.

DANIEL P. AMOS -- Director since 2000
Mr. Amos, 49, is president, and chief executive officer of AFLAC Incorporated,
insurance. He is a director of AFLAC Incorporated, CIT Group and Georgia Power
Company.

DORRIT J. BERN -- Director since 1999
Ms. Bern, 50, is chairman of the board, president, and chief executive officer
of Charming Shoppes, Inc., retail apparel stores. She served as group vice
president of Sears, Roebuck and Co. from 1993 to August 1995, and as vice
chairman of the board, president, and chief executive officer of Charming
Shoppes from August 1995 until January 1997, when she was appointed to her
current position.

THOMAS F. CHAPMAN -- Director since 1999
Mr. Chapman, 57, is chairman of the board and chief executive officer of
Equifax, Inc., information services and transaction processing. He served as
executive vice president and group executive from 1993 to August 1997, president
from August 1997 to June 1999, and chief operating officer of Equifax from
August 1997 to January 1998. He was appointed chief executive officer in January
1998 and chairman of the board of Equifax in May 1999. He is a director of
Equifax, Inc.

H. ALLEN FRANKLIN -- Director since 1988
Mr. Franklin, 56, is chairman, president and chief executive officer of the
Company. He served as president and chief executive officer of Georgia Power
Company and executive vice president of the Company from 1994 until June 1999.
He served as president and chief operating officer of the Company from June 1999
to March 2001 and president and chief executive officer from March 1 to April 1
when he assumed his current position. He is a director of SouthTrust Corporation
and Southern system companies -- Alabama Power Company, Georgia Power Company,
and Gulf Power Company.

BRUCE S. GORDON -- Director since 1994
Mr. Gordon, 54, is group president of retail services of Verizon,
telecommunications. He served as group president -- consumer and small business
of Verizon from 1993 to August 1997, and as group president retail services of
Verizon from August 1997 until December 1998, when he was appointed to his
current position. He is a director of Barfield Companies.

L. G. HARDMAN III -- Director since 1986
Mr. Hardman, 61, is chairman of the board and chief executive officer of
nBank.Corp., chairman of the board of The First National Bank of Commerce,
Georgia; and chairman of the board, president, and treasurer of Harmony Grove
Mills, Inc. He is a director of Georgia Power Company.

ELMER B. HARRIS -- Director since 1989
Mr. Harris, 61, is president and chief executive officer of Alabama Power
Company and executive vice president of the Company. He is a director of AmSouth
Bancorporation, Mercedes-Benz U.S. International, Inc. and Alabama Power
Company.

DONALD M. JAMES -- Director since 1999
Mr. James, 52, chairman and chief executive officer of Vulcan Materials Company,
construction materials and industrial chemicals. He served as president of the
Southern Division of Vulcan Materials Company from 1994 to 1996; senior vice
president from 1995 to 1996; president and chief operating officer from February
1996 until February 1997; and president and chief executive officer of Vulcan
Materials Company from February 1997 until May 1997, when he was appointed to
his current position. He is a director of Protective Life Corporation and
SouthTrust Corporation.

ZACK T. PATE -- Director since 1998
Dr. Pate, 64, is chairman of the World Association of Nuclear Operators and
chairman emeritus of the Institute of Nuclear Power Operations (INPO), an
independent, nonprofit organization promoting safety, reliability, and
excellence in the operation of nuclear electric generating plants. Prior to
1998, he was president and chief executive officer of INPO.

GERALD J. ST. PE -- Director since 1995
Mr. St. Pe, 61, is executive vice president of Litton Industries, Inc. and chief
operating officer of Litton Ship Systems. He served as president of Ingalls
Shipbuilding, Inc., a division of Litton Industries, Inc., from 1987, and senior
vice president of Litton Industries, Inc. from 1986 until June 1999, when he was
appointed to his current positions.

Each nominee has served in his or her present position for at least the past
five years, unless otherwise noted.

The affirmative vote of a plurality of shares present and entitled to vote is
required for the election of directors.

The Board of Directors recommends a vote "For" the nominees listed in Item No.
1.

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PROPOSAL TO APPROVE THE OMNIBUS INCENTIVE COMPENSATION PLAN
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ITEM NO. 2 -- PROPOSAL TO APPROVE THE OMNIBUS INCENTIVE COMPENSATION PLAN

Upon recommendation of the Compensation & Management Succession Committee (the
"Committee"), the Board of Directors approved the Southern Company Omnibus
Incentive Compensation Plan (the "Plan"), subject to stockholder approval. The
Plan provides for awards of Nonqualified Stock Options, Incentive Stock Options,
Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units,
Performance Units, Performance Shares, and Cash-Based Awards. If the Plan is
approved by the stockholders, the Company's Performance Stock Plan, Performance
Pay Plan, Performance Pay Plan-Shareholder Approved, and Performance Dividend
Plan will be terminated and any outstanding awards thereunder will be
transferred to the Plan. With the exception of the Performance Pay Plan, these
plans have been approved by the Company's stockholders.

The purposes of the Plan are to optimize the profitability and growth of the
Company through annual and long-term incentives that are consistent with the
Company's goals and to provide the potential for levels of compensation that
will enhance the Company's ability to attract, retain, and motivate employees.
All employees will be eligible to participate in the Plan. In the initial Plan
year, approximately 24,000 employees will participate in the Plan.

PLAN ADMINISTRATION

The Plan will be administered by the Committee. The Committee consists of two
directors of the Company who are not employees of the Company or its
subsidiaries. The Committee has broad authority to administer and interpret the
Plan, including authority to make awards, determine the size and terms
applicable to awards, establish performance goals, determine and certify the
degree of goal achievement, and amend the terms of awards consistent with Plan
terms.

The Board of Directors may terminate or amend the Plan at any time; provided,
however, without stockholder approval, the Board may not increase the total
number of shares of the Company's common stock ("Common Stock") available for
grants under the Plan. The Plan will terminate May 23, 2011, unless terminated
sooner by the Board of Directors.

TYPES OF AWARDS

Stock Options: entitle the participant to purchase up to the number of shares
of Common Stock specified in the grant at a specified price (the "Option
Price"). The Committee may grant Incentive Stock Options or Nonqualified Stock
Options (collectively, "Stock Options"). Incentive Stock Options are intended to
comply with Section 422 of the Internal Revenue Code (the "Code"). The Committee
will establish the terms of Stock Options including the Option Price, vesting,
duration, transferability, and exercise procedures. Incentive Stock Options may
not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution.
Further, all Incentive Stock Options granted to a participant under the Plan
shall be exercisable during his or her lifetime only by such participant.

Stock Options must be paid in full when exercised either (i) in cash, (ii) by
foregoing compensation that the Committee agrees otherwise would be owed, or
(iii) by tendering previously acquired shares of Common Stock that have been
held by the participant for at least six months, or by any combination thereof.

Stock Appreciation Rights: are rights that, when exercised, entitle the
participant to the appreciation in value of the number of shares of Common Stock
specified in the grant, from the date granted to the date exercised. The
exercised Stock Appreciation Right may be paid in cash or Common Stock, as
determined by the Committee. Stock Appreciation Rights may be granted in the
sole discretion of the Committee in conjunction with Stock Options.

Restricted Stock Awards: are grants of shares of Common Stock, full rights to
which are conditioned upon continued employment or the achievement of
performance goals. The Committee will establish a "Restriction Period" for each
Restricted Stock Award made. The Committee also can impose other restrictions or
conditions on the Restricted Stock Awards such as payment of a stipulated
purchase price. The participant may be entitled to dividends paid on the
Restricted Stock and may have the right to vote such shares.

A total of 30 million shares of Common Stock is available for grants under the
Plan in addition to the shares that have not yet been granted under the
Performance Stock Plan that was approved by the stockholders in 1997. Under the
Plan, the maximum number of shares of Common Stock that may be the subject of
any award to a participant during any calendar year is 5,000,000 shares of
Common Stock for Stock Options and Stock Appreciation Rights and 1,000,000
shares of Common Stock for Restricted Stock Awards. On March 26, 2001, the
closing price per share of Common Stock reported on the New York Stock Exchange
Composite Tape was $33.24. If there are any changes in corporate capitalization,
such as a stock split, stock dividend or reclassification, or a corporate
transaction such as a merger, consolidation, separation, including a spin-off,
or other distribution of stock or property of the Company, or any reorganization
or any partial or complete liquidation of the Company, adjustments will be made
in the number and class of shares of Common Stock which may be delivered under
the Plan, in the number and class of and/or price of shares of Common Stock
subject to outstanding awards under the Plan, and in the maximum number of
shares of Common Stock that may be granted to any individual during any calendar
year, as may be determined to be appropriate and equitable by the Committee, to
prevent dilution or enlargement of rights.

Restricted Stock Units: are awards that entitle the participant to the value of
shares of Common Stock at the end of a designated restriction period. Except for
voting rights, they may have all of the characteristics of Restricted Stock
Awards, as described above. Restricted Stock Units may be paid out in cash or
shares. The maximum amount payable to any participant for Restricted Stock Units
granted in any one year is the higher of $10,000,000 or 1,000,000 shares of
Common Stock

Performance Units, Performance Stock Awards, and Cash-Based Awards (collectively
"Performance Awards"): are awards that entitle the participant to a level of
compensation based on the achievement of pre-established performance goals over
a designated performance period. Performance Units shall have an initial value
determined by the Committee. The value of a Performance Share will be the fair
market value of Common Stock on the grant date. A Cash-Based Award will have the
value determined by the Committee. At the beginning of the performance period
the

Committee will determine the number of Performance Units or Performance Shares
awarded or the target value of Cash-Based Awards, the performance period, and
the performance goals. At the end of the performance period the Committee will
determine the degree of achievement of the performance goals which will
determine the level of payout. The Committee may set performance goals using any
combination of the following criteria:

- Earnings per share;

- Net income or net operating income (before or after taxes and before or after
extraordinary items);

- Return measures (including, but not limited to, return on assets, equity, or
sales);

- Cash flow return on investments which equals net cash flows divided by owners'
equity;

- Earnings before or after taxes;

- Gross revenues;

- Gross margins;

- Share price (including, but not limited to, growth measures and total
shareholder return);

- Economic Value Added, which equals net income or net operating income minus a
charge for use of capital;

- Operating margins;

- Market share;

- Revenue growth;

- Capacity utilization;

- Increase in customer base;

- Environmental health and safety;

- Diversity; and

- Quality.

Performance Awards may be paid in cash or shares of Common Stock or a
combination thereof in the Committee's discretion. The maximum amount payable to
any participant for Performance Shares awarded in any one year is the higher of
$10,000,000 or 1,000,000 shares of Common Stock per award type. The maximum
amount payable to any participant for Cash-Based Awards or Performance Units
awarded in any one year is $10,000,000.

CHANGE IN CONTROL PROVISIONS

If a change in control occurs, all Stock Options, Stock Appreciation Rights,
Restricted Stock Awards, and Restricted Stock Units will vest immediately and if
the Plan is not continued or replaced with a comparable plan, pro-rata payments
of all Performance Awards at not less than target-level performance will be
paid. (See page for a description of individual change in control agreements.)

FEDERAL INCOME TAX CONSEQUENCES OF STOCK OPTIONS GRANTED UNDER THE PLAN

The following is a summary of some of the more significant Federal income tax
consequences under present law of the granting and exercise of Stock Options
under the Plan.

No taxable income is realized by a participant upon the grant of a Stock Option,
and no deduction is then available to the Company.

Upon exercise of a Nonqualified Stock Option, the excess of the fair market
value of the shares of Common Stock on the date of exercise over the Option
Price will be taxable to the participant as ordinary income and, subject to any
limitation imposed by Section 162(m) of the Code, deductible by the Company. If
a participant disposes of any shares of Common Stock received upon the exercise
of any Nonqualified Stock Option granted under the Plan, such participant will
realize a capital gain or loss equal to the difference between the amount
realized on disposition and the
8

value of such shares at the time it was exercised. The gain or loss will be
either long-term or short-term, depending on the holding period measured from
the date of exercise. The Company will not be entitled to any further deduction
at that time.

A participant will not recognize income (except for purposes of the alternative
minimum tax) upon exercise of an Incentive Stock Option. If the shares acquired
by exercise of an Incentive Stock Option are held for the longer of two years
from the date the option was granted or one year from the date it was exercised,
any gain or loss resulting from a subsequent disposition of such shares will be
taxed as long-term capital gain or loss, and the Company will not be entitled to
any deduction. If, however, such shares are disposed of within the
above-described period, then in the year of such disposition the participant
will recognize taxable income equal to the excess of the lesser of (i) the
amount realized upon such disposition and (ii) the fair market value of such
shares on the date of exercise over the Option Price, and the Company will be
entitled to a corresponding deduction.

The Company is required to withhold and remit to the Internal Revenue Service
income taxes on all compensation which is taxable as ordinary income. Upon
exercise of Nonqualified Stock Options, as a condition of such exercise, a
participant must pay or arrange for payment to the Company of cash representing
the appropriate withholding taxes generated by the exercise.

COMPLIANCE WITH SECTION 162(M) OF THE CODE

The Board is seeking stockholder approval of the Plan partly in order to qualify
all compensation to be paid under the Plan for the maximum income tax
deductibility under Section 162(m) of the Code. Section 162(m) of the Code
generally limits tax deductibility of certain compensation paid to each of the
Company's five most highly compensated executive officers to $1,000,000 per
officer, unless the compensation is paid under a performance plan, meeting
certain criteria under the Code, that has been approved by its stockholders.

VOTE NEEDED FOR PASSAGE OF PROPOSAL

The vote needed to approve the Plan is a majority of the shares of the Company's
stock represented at the meeting and entitled to vote.

The Board of Directors recommends a vote "For" Item No. 2.

ESTIMATED AWARDS UNDER THE PLAN

The following table sets forth the estimated amounts of Cash-Based Awards
(Annual Long-Term Incentives) at target-level performance to be paid under the
Plan at target-level performance for the year ending December 31, 2001.

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ANNUAL LONG-TERM STOCK
NAME AND POSITION INCENTIVE($) INCENTIVE($) OPTIONS(#)
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A. W. Dahlberg, Retired Chairman & CEO, Southern Company 245,925 2,973,382 1,451,770
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H. A. Franklin, Chairman, President & CEO, Southern Company 900,000 623,744 495,997
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S. M. Fuller, President, Mirant Corporation 0 0 0
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E. B. Harris, President, Alabama Power Company 432,900 399,030 255,491
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D. M. Ratcliffe, President, Georgia Power Company 339,424 237,812 154,863
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W. L. Westbrook, Retired Financial VP, CFO & Treasurer,
Southern Company 52,621 87,779 0
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Executive officers as a group 3,465,183 4,898,396 2,712,359
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Non-executive directors or nominees as a group 0 0 0
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Non-executive officer employees 194,180,363 16,859,520 12,135,611
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STOCKHOLDER PROPOSAL ON RENEWABLE ENERGY SOURCES
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ITEM NO. 3 -- STOCKHOLDER PROPOSAL ON RENEWABLE ENERGY SOURCES

The Company has been advised that Mr. Robert B. Mills, 1233 12th Street, NW,
Washington, DC 20005, holder of 90 shares of common stock, proposes to submit
the following resolution at the 2001 Annual Meeting of Stockholders:

INVEST IN CLEAN ENERGY (ICE) PROPOSAL

"Be it resolved: that the shareholders recommend that Southern Company should
invest sufficient resources to build new electrical generation from solar and
wind power sources to replace approximately one percent (1%) of system capacity
yearly for the next twenty years with the goal of having the company producing
twenty percent (20%) of generation capacity from clean renewable sources in 20
years."

STATEMENT OF SECURITY HOLDER

"Utility deregulation demands the company present a good public image, and the
public is demanding progress towards clean energy.

"Efforts must be made to slow down changes in global climate so that we can
continue to survive on planet earth.

"The proposal allows flexibility in schedule for the Board of Directors to
implement this proposal. The 20% figure is just a reasonable and conservative
goal to aim for.

"A one percent yearly addition to generation capacity allows for small pilot
plants to be built and tried as the program advances.

"Although initial building costs might be larger, solar and wind power sources
do not require the purchase of fuel, which can make these additions to
generation capacity very attractive economically over the long term, especially
if the cost of fossil fuels rises. The company should look to building
facilities that are made to last a long time.

"A one percent annual building program of solar and wind power generation
facilities would translate to annual additions in the 100 to 200 megawatt range.
Solar power towers, wind farms, solar photovoltaic arrays and parabolic solar
troughs already exist in other places in this range of power production, proving
that Southern could realistically build such facilities in Georgia and
elsewhere."

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL NO. 3 FOR THE
FOLLOWING REASONS:

The Company has long recognized that renewable energy resources such as solar,
wind, biomass, and hydroelectricity could potentially play a role in increasing
the diversity of our fuel mix and in meeting our environmental goals. In recent
years renewable energy sources have received particular attention due to their
low net emissions of greenhouse gases to the atmosphere. Renewables would
therefore contribute less to any potential global warming concerns.

Renewable energy and advanced fossil technologies are among an assortment of
generation options that continue to be considered by the Company. Having a
diversity of generation options is important in ensuring the continuation of
reliable, economic, and environmentally friendly electric energy. Although
renewable energy sources offer environmental advantages, they unfortunately have
drawbacks as well. Renewable options currently tend to be more expensive than
traditional energy sources. In addition, because wind and solar only produce
usable energy when wind or sunshine are available, these technologies require
large energy storage systems or backup generation to maintain sufficient
capacity to meet customer demand.

The Company has been seeking ways to incorporate renewable generation into the
Southern electric system without adversely affecting cost and reliability. The
Company has put significant effort into research and demonstration

programs to advance and find applications for these technologies. We believe
that the proper approach to adding sustainable, new renewable resources to our
generating mix is through partnerships with our customers. The Company,
therefore, is in the process of developing EarthCents(TM) "green power" programs
to allow customers to purchase green energy. Through these green power programs,
customers can choose to pay the additional generating costs for supplying some
of their electricity from renewable sources without affecting the costs of other
customers. In Florida and Alabama, the program allows customers to invest
monthly toward the construction of up to 1000 kilowatts of solar electric
systems. Georgia Power Company, working with the local environmental community,
is determining accreditation criteria for Georgia in preparation for being able
to develop and file a green pricing program that allows customers to purchase
power generated from a mix of renewable sources. All of these green power
programs will be structured to ensure that customers not choosing to participate
will not bear any of the additional costs or risks that result from establishing
and operating these renewable projects.

The Company's objective is to utilize the market and our customers' needs to
propel the growth of renewable energy technologies through a voluntary green
power program. The Company believes that this approach of encouraging and
facilitating the introduction of renewable energy is preferable to establishing
arbitrary capacity goals.

The vote needed to pass the proposed stockholder resolution is a majority of the
shares represented at the meeting and entitled to vote.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL NO. 3.

--------------------------------------------------------------------------------
AUDIT COMMITTEE REPORT
--------------------------------------------------------------------------------

WHAT IS THE AUDIT COMMITTEE'S PHILOSOPHY?

The Audit Committee (the "Committee") oversees the Company's financial reporting
process on behalf of the Board of Directors. Management has the primary
responsibility for the financial statements and the reporting process including
the systems of internal controls. In fulfilling its oversight responsibilities,
the Committee reviewed the audited consolidated financial statements of the
Company and its subsidiaries in the Annual Report with management. The
Committee's review process included discussions of the quality, not just the
acceptability, of the accounting principles, the reasonableness of significant
judgments, and the clarity of disclosures in the financial statements.

The independent public accountants are responsible for expressing an opinion on
the conformity of those audited financial statements with accounting principles
generally accepted in the United States. The Committee reviewed with the
independent public accountants their judgments as to the quality, not just the
acceptability, of the Company's accounting principles and such other matters as
are required to be discussed with the Committee under generally accepted
auditing standards. In addition, the Committee has discussed with the
independent public accountants their independence from management and the
Company including the matters in the written disclosures required by the
Independence Standards Board. The Committee has also considered whether the
independent public accountants' provision of non-audit services to the Company
is compatible with maintaining their independence.

The Committee discussed the overall scopes and plans with the Company's internal
and independent public accountants for their respective audits. The Committee
meets with the internal auditors and the independent public accountants, with
and without management present, to discuss the results of their audits, their
evaluations of the Company's internal controls and the overall quality of the
Company's financial reporting. The Committee held seven meetings during 2000.

In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors (and the Board approved) that the audited
consolidated financial statements be included in the Company's Annual Report for
the year ended December 31, 2000 and filed with the Securities and Exchange
Commission. The Committee also recommended to the Board of Directors (and the
Board approved) the selection of the Company's independent public accountants.

Members of the Committee:

L. G. Hardman III, Chair
Dorrit J. Bern
Bruce S. Gordon
Zack T. Pate
Gerald J. St. Pe

PRINCIPAL PUBLIC ACCOUNTING FIRM FEES

The following represents the fees billed to the Company for the last fiscal year
by Arthur Andersen LLP - the Company's principal public accountant:

Audit Fees.................................................. $ 4,600,000
Financial Information Systems Design and Implementation
Fees...................................................... 1,200,000
All Other Fees.............................................. 15,100,000(a)
Total............................................. $ 20,900,000

(a) This included $3,300,000 for services provided by Andersen Consulting (now
known as Accenture) prior to its August 7, 2000 separation as an affiliate
of Arthur Andersen LLP.

--------------------------------------------------------------------------------
COMPENSATION & MANAGEMENT SUCCESSION COMMITTEE REPORT
--------------------------------------------------------------------------------

WHAT IS THE EXECUTIVE COMPENSATION PHILOSOPHY?

Our intent is to provide a competitive compensation program that is linked
directly to the Company's strategic business objectives and its short- and
long-term operating performance. With the objective of maximizing stockholder
value over time, this policy serves to align the interests of executives and
stockholders.

WHAT COMPRISES TOTAL EXECUTIVE COMPENSATION?

- Base pay,

- Short-term incentives (annual performance bonuses), and

- Long-term incentives.

TOTAL EXECUTIVE COMPENSATION

Total executive compensation targets are set at the size-adjusted median of the
marketplace. With the exception of Mr. Dahlberg and Ms. Fuller, the marketplace
is defined as a group of large companies in the electric and gas utility
industries. Twenty of these companies are included in the 26 companies that
comprise the Standard & Poor's Electric Utility Index - the peer group used in
the five-year performance graph.

The marketplace for Mr. Dahlberg's total compensation is determined by using a
weighting of:

- Seventy percent by comparison to the mentioned electric and gas utility
companies, and

- Thirty percent by comparison to a group of heavy industrial and durable goods
manufacturing companies within a comparable size range.

The marketplace comparison for Ms. Fuller was a similar group of heavy
industrial and durable goods manufacturing companies.

BASE PAY

A range for base pay is determined for each executive by comparing the base pay
at the appropriate peer group of companies described previously. Base pay is set
at a level that is at or below the size-adjusted median paid at those companies
because of our emphasis on incentive compensation in our executive compensation
program.

ANNUAL PERFORMANCE BONUSES

Annual bonuses are paid through the Performance Pay Plan. All named executives
participated in this Plan in 2000.

PERFORMANCE GOALS

The annual performance bonuses are based on the attainment of corporate goals
that we set at the beginning of the year.

We believe that accomplishing the corporate goals is essential for the Company's
continued success and sustained financial performance. For 2000, the corporate
performance goals included specific targets for:

- Company earnings -- earnings per share from operations ("EPS"), and

- Subsidiary companies' net income and return on equity ("ROE")

A target performance level is set for each goal. Performance above or below the
targets results in proportionately higher or lower bonus payments. A target
percentage of base pay is established for each executive officer based on
position

level for target-level performance. Bonuses may range from 50 percent of the
target to 250 percent based on the degree of achievement of goals. No bonuses
are paid if performance is below a threshold level or if a minimum earnings
level is not reached. Also, no bonuses are paid if the Company's current
earnings are not sufficient to fund the common stock dividend at the same level
as the prior year.

ANNUAL BONUS PAYMENTS

Performance met or exceeded the target levels in all areas in 2000, resulting in
bonuses that exceeded the target levels.

Mr. Dahlberg's annual performance bonus under the Performance Pay Plan for
target-level performance was 100 percent of his base pay. His bonus paid for
2000 performance was based entirely on the degree of achievement of the
Company's EPS goal and resulted in a payment that exceeded the target.

LONG-TERM INCENTIVES

We based a significant portion of our total compensation program on long-term
incentive compensation. Mr. Dahlberg's long-term compensation represented nearly
50 percent of his total compensation for 2000.

Long-term incentive vehicles are:

- Productivity Improvement Plan (Messrs. Dahlberg and Franklin, only),

- Company stock options and performance dividend equivalents, and

- Mirant Corporation equity based compensation (Ms. Fuller, only).

PRODUCTIVITY IMPROVEMENT PLAN

This Plan compensates executives based on comparison of the Company's
performance over a four-year period with other electric utility companies. The
basis used to measure Company performance was total shareholder return ("TSR").
The bonuses paid under the Plan were for the four-year performance period of
January 1, 1997 through December 31, 2000.

Targets under the Plan range from 50 to 65 percent of base pay at the beginning
of the performance period. Mr. Dahlberg's target was 65 percent. The actual
bonus paid was based on the Company's performance compared to other utility
companies and could range from 50 percent of the target level to 200 percent.
TSR must be at the 30th percentile for any bonus to be paid. If it reaches the
90th percentile, the maximum bonus is paid.

For the period that ended on December 31, 2000, the TSR (for 1997 through 2000)
was at the 58(th) percentile, resulting in achievement of 120 percent of the
target level. However, because the bonus opportunity increased under the
Performance Pay Plan, we reduced the payout under the Plan substantially in
order to keep total compensation at the desired competitive levels.

COMPANY STOCK OPTIONS AND PERFORMANCE DIVIDENDS

Executives are granted options with ten-year terms to purchase the Company's
common stock at the market price on the date of the grant. The estimated
annualized value represented 45 percent of Mr. Dahlberg's total compensation and
20-30 percent for the other executives. The size of prior grants and the number
of options outstanding were not considered in determining the size of the grants
made in 2000. These options vest over a three-year period.

Executives also are paid performance-based dividend equivalents on stock options
granted after 1996 and held at the end of the year. Dividend equivalents can
range from 25 percent of the common stock dividend rate if TSR, compared to a
group of other utility companies, is at the 30th percentile to 100 percent of
the dividend rate if it reaches the 90th percentile. Mr. Dahlberg receives twice
the amount per share paid to the other executives.

For stock options held on December 31, 2000, Mr. Dahlberg received $1.80 per
share and the other executives received $.90 per share.

MIRANT CORPORATION EQUITY BASED COMPENSATION

STOCK OPTIONS

Ms. Fuller was granted Mirant Corporation stock options. (Mirant Corporation,
formerly Southern Energy, Inc., is a former subsidiary of the Company that was
spun off to the Company's stockholders on April 2, 2001.)

The stock options were granted at the fair market value of Mirant's common stock
on the grant date and vest over a three year period. They represent a
significant portion of her total compensation.

PERFORMANCE RESTRICTED STOCK UNITS

Performance restricted stock units were awarded to Ms. Fuller in 2000. These
units vest in 20 percent increments based on attainment of predetermined levels
of stock price appreciation over the market price of Mirant common stock on the
grant date. Vested units are payable in cash or may be deferred until
termination of employment at the election of the recipient.

VALUE CREATION PLAN

Prior to Mirant being publicly traded, the Company initiated a long-term
incentive plan, the Value Creation Plan, which granted stock appreciation rights
to eligible Mirant employees. Ms. Fuller was granted two types of rights:
standard appreciation rights and indexed appreciation rights. The standard
appreciation rights pay a recipient for appreciation over a fixed base value.
The indexed appreciation rights pay for appreciation over a base value that
increases each year by a predetermined interest rate. When Mirant became
publicly traded, Ms. Fuller's standard rights were converted into Mirant stock
options and the indexed rights were converted into Mirant stock appreciation
rights. The Value Creation Plan was terminated in 2000 following the conversion
of the Value Creation Plan rights into options and appreciation rights.

POLICY ON INCOME TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION

Section 162(m) of the Internal Revenue Code limits the deductibility of certain
executive's compensation that exceeds $1 million per year unless the
compensation is paid under a performance-based plan as defined in the Code and
that has been approved by stockholders. The Company has obtained stockholder
approval of the Performance Stock Plan, Performance Pay Plan -- Shareholder
Approved -- , and Performance Dividend Plan, and Value Creation Plan and is
seeking stockholder approval of the Omnibus Incentive Compensation Plan (see
Item No. 2 on page 6). However, our policy is to maximize long-term stockholder
value, and tax deductibility is only one factor considered in setting
compensation.

SUMMARY

We believe that the policies and programs described in this report link pay and
performance and serve the best interest of stockholders. We frequently review
the various pay plans and policies and modify them as we deem necessary to
continue to attract, retain, and motivate talented executives.

Members of the Committee:

G. J. St. Pe, Chairman
L. G. Hardman III

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation & Management Succession Committee is made up of non-employee
directors who have never served as executive officers of the Company. During
2000, none of the Company's executive officers served on the board of directors
of any entities whose directors or officers serve on the Company's Compensation
and Management Succession Committee.

--------------------------------------------------------------------------------
EXECUTIVE COMPENSATION
--------------------------------------------------------------------------------

EMPLOYMENT, CHANGE IN CONTROL, AND SEPARATION AGREEMENTS

The Company has Change in Control Agreements with each of its executive
officers, including those shown on the Summary Compensation Table on page . If
an executive is involuntarily terminated, other than for cause, within two years
following a change in control of the Company, the Agreements provide for:

- lump sum payment of three times annual compensation,

- up to five years' coverage under group health and life insurance plans,

- immediate vesting of all stock options and stock appreciation rights
previously granted,

- payment of any accrued long-term and short-term bonuses and dividend
equivalents, and

- payment of any excise tax liability incurred as a result of payments made
under the Agreements.

A change in control of the Company is defined under the Agreements as:

- acquisition of at least 20 percent of the Company's stock,

- a change in the majority of the members of the Company's board of directors,

- a merger or other business combination that results in the Company's
stockholders immediately before the merger owning less than 65 percent of the
voting power after the merger, or

- a sale of substantially all the assets of the Company.

If a change in control affects only a subsidiary of the Company, these payments
would only be made to executives of the affected subsidiary who are
involuntarily terminated as a result of that change in control.

A change in control of a subsidiary of the Company is defined as:

- acquisition of at least 50 percent of the subsidiary stock,

- a merger or other business combination unless the Company controls the
surviving entity, or

- a sale of substantially all of the assets of the subsidiary.

The Company also has amended its short- and long-term incentive plans to provide
for pro-rata payments at not less than target-level performance if a change in
control occurs and the plans are not continued or replaced with comparable
plans.

On February 28, 1998, the Company and Georgia Power Company entered into a
Deferred Compensation Agreement with Mr. Franklin which provided that on the
fifth anniversary of the Agreement, if still employed by the Company or one of
its subsidiaries, Mr. Franklin would receive the cash value of the number of
shares of common stock that could have been purchased for $500,000 on February
28, 1998, and on which dividends were reinvested throughout the five-year
period. If certain performance goals were met, Mr. Franklin also would receive
the estimated income tax expense on the compensation. Georgia Power assigned
this agreement to Southern Company Services effective July 8, 1999. On April 1,
2001, the Agreement was cancelled and the phantom stock units deferred under the
terms of the Company's deferred compensation plan until termination of
employment.

On October 5, 1999, the Company and Southern Energy Resources (now, Mirant
Services, LLC.) entered into a Deferred Compensation Agreement with Ms. Fuller.
On July 1, 2003, if still employed by Mirant, Ms. Fuller will receive the cash
value of the number of shares of Company common stock that could have been
purchased for $400,000 on October 5, 1999, and on which dividends were
reinvested throughout the period. If certain performance goals are met, Ms.
Fuller also will receive the estimated income tax expense on the compensation.
Ms. Fuller may elect to defer receipt of the award until termination of
employment.

Mr. Dahlberg retired from the Company on April 1, 2001. In connection with his
retirement, the Company entered into an agreement with him. This agreement
provides for a severance payment of $200,000 supplemental pension payments, and
supplemental incentive awards. Mr. Dahlberg's pension payment will be calculated
as if he has an additional 13 months of accredited service, there is no early
retirement reduction, and he receives regular base salary increases and
incentive awards of at least 150% of the target established by the Compensation
and Management Succession Committee, for the additional 13 months. The
supplemental pension payment attributable to this agreement is approximately
$360,000 per year. Mr. Dahlberg's supplemental incentive award will equal the
difference between the award he is entitled to receive under the Performance Pay
Plan, or similar plan, (a prorated award based on retirement date) and the award
he would be entitled to if he remained employed with the Company through
December 31, 2001. He also will receive one additional payment of performance
dividend awards based on actual performance under the Performance Dividend Plan,
or similar plan, under the terms of the Plan in effect on his retirement date.
He will receive the difference, if any, between the awards he actually receives
under the Performance Dividend Plan as a retired Plan participant (three annual
awards) and the awards he would have received under the Plan based on the Plan
terms in effect on his retirement date and the size of his awards as approved by
the Compensation and Management Committee in 2001 (payout percentage increased
by a factor of two). The Agreement also contains customary releases by the
Company and Mr. Dahlberg and an agreement by Mr. Dahlberg to not engage in
specified competitive activities for two years.

Mr. Westbrook retired from the Company on April 1, 2001. In connection with his
retirement, the Company entered into an agreement with Mr. Westbrook. This
agreement provides for a severance payment of $774,000 and supplemental pension
payments of $9,927 per month. The Agreement also contains customary releases by
the Company and Mr. Westbrook and an agreement by Mr. Westbrook to not engage in
specified competitive activities for two years.

--------------------------------------------------------------------------------
STOCK OWNERSHIP TABLE
--------------------------------------------------------------------------------

Section 16(a) Beneficial Ownership Reporting Compliance: Messrs. Amos, Franklin,
Hairston, Klappa, and Ratcliffe filed amended reports with the Securities and
Exchange Commission for transactions in Southern Company common stock:
Amos -- one report for the Company's payment of his director's stock retainer
for December 2000; Franklin -- one report for the grant by the Company of
restricted stock units under a deferred compensation agreement (see page
for a description of the agreement) and three reports for the
reinvestment of dividends on that grant; Hairston -- one report for the grant by
the Company of restricted stock units under a deferred compensation agreement
and three reports for the reinvestment of dividends on that grant; Klappa -- one
report for the grant by the Company of restricted stock units under a deferred
compensation agreement and one report for the reinvestment of dividends on that
grant; and Ratcliffe -- one report for the acquisition of phantom stock units
under the Company's deferred compensation plan for employees.

This table shows the number of shares of the Company's common stock and Mirant
Corporation common stock owned by directors, nominees, and executive officers as
of December 31, 2000. The shares owned by all directors, nominees, and executive
officers as a group constitute less than one percent of the total number of
shares of the respective classes.

Shares Beneficially Owned Include:
----------------------------------
Shares
Individuals
SHARES Have Rights to
BENEfiCIALLY Acquire within Shares Held by
TITLE OF SECURITY OWNED(1) 60 DAYS(2) FAMILY MEMBERS(3)
-------------------------------------------------------------------------------------------------------------

DANIEL P. AMOS Southern Common Stock 10,625
-------------------------------------------------------------------------------------------------------------
DORRIT J. BERN Southern Common Stock 6,189
-------------------------------------------------------------------------------------------------------------
THOMAS F. CHAPMAN Southern Common Stock 1,614
-------------------------------------------------------------------------------------------------------------
A. W. DAHLBERG Southern Common Stock 799,933 718,113
Mirant Common Stock 6,000
-------------------------------------------------------------------------------------------------------------

H. ALLEN FRANKLIN Southern Common Stock 298,828 262,874
Mirant Common Stock 10,000
-------------------------------------------------------------------------------------------------------------
S. MARCE FULLER Southern Common Stock 56,117 51,401
Mirant Common Stock 140,797 135,697
-------------------------------------------------------------------------------------------------------------
BRUCE S. GORDON Southern Common Stock 7,717
-------------------------------------------------------------------------------------------------------------
L. G. HARDMAN III Southern Common Stock 19,161 100
-------------------------------------------------------------------------------------------------------------
ELMER B. HARRIS Southern Common Stock 316,408 266,053 310
Mirant Common Stock 10,000
-------------------------------------------------------------------------------------------------------------
DONALD M. JAMES Southern Common Stock 4,900
-------------------------------------------------------------------------------------------------------------
ZACK T. PATE Southern Common Stock 22,495
Mirant Common Stock 2,000
-------------------------------------------------------------------------------------------------------------
D. M. RATCLIFFE Southern Common Stock 132,683 121,589
-------------------------------------------------------------------------------------------------------------
GERALD J. ST. PE Southern Common Stock 40,399 1,750
-------------------------------------------------------------------------------------------------------------
WILLIAM L. WESTBROOK Southern Common Stock 146,129 74,919 80
Mirant Common Stock 2,500
-------------------------------------------------------------------------------------------------------------
DIRECTORS, NOMINEES, AND Southern Common Stock 2,113,070 1,697,308 2,278
EXECUTIVE OFFICERS AS A Mirant Common Stock 171,297 188,346
GROUP (18 PEOPLE)
-------------------------------------------------------------------------------------------------------------

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

(1) "Beneficial ownership" means the sole or shared power to vote, or to direct
the voting of, a security, or investment power with respect to a security,
or any combination thereof.
(2) Indicates shares of the Company's common stock that certain executive
officers have the right to acquire within 60 days. Shares indicated are
included in the Shares Beneficially Owned column.
(3) Each director disclaims any interest in shares held by family members.
Shares indicated are included in the Shares Beneficially Owned column.

--------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
--------------------------------------------------------------------------------

This table shows information concerning the Company's chairman and each of the
other five most highly compensated executive officers of the Company serving
during 2000.

LONG-TERM COMPENSATION
-----------------------------------------
NUMBER OF LONG-
ANNUAL COMPENSATION SECURITIES TERM
------------------- RESTRICTED UNDERLYING INCENTIVE
OTHER ANNUAL STOCK STOCK PLAN ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARDS($) OPTIONS PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($)(1) (2) (#)(3) ($)(4) ($)(5)
-----------------------------------------------------------------------------------------------------------------------------------

A. W. DAHLBERG(6) 2000 939,287 2,318,377 272,551 -- 215,616 302,612 52,267
Chairman 1999 903,426 181,896 23,755 -- 201,196 579,392 49,283
Southern Company 1998 897,820 218,625 11,067 -- 161,757 438,061 50,135
-----------------------------------------------------------------------------------------------------------------------------------
H. A. FRANKLIN 2000 655,806 1,014,696 8,305 -- 85,354 201,760 34,902
Chairman, President & CEO 1999 603,658 126,000 31,023 -- 71,153 375,137 32,654
Southern Company 1998 564,329 237,502 7,078 500,000 30,521 283,629 31,590
-----------------------------------------------------------------------------------------------------------------------------------
S. M. FULLER (7) 2000 416,385 630,000 3,000 1,666,676(MIR) 45,161 -- 21,762
President & CEO 256,634(MIR)
Mirant Corporation 1999 341,462 465,231 1,146 400,000 17,988 -- 17,274
66,881(MIR)
-----------------------------------------------------------------------------------------------------------------------------------
E. B. HARRIS 2000 573,187 643,046 129,834 167,476 62,064 -- 27,858
President & CEO 1999 550,674 97,125 15,301 -- 31,341 330,618 29,800
Alabama Power Company 1998 545,102 192,751 19,060 -- 29,411 249,971 30,180
-----------------------------------------------------------------------------------------------------------------------------------
D. M. RATCLIFFE (8) 2000 447,934 626,654 14,320 -- 48,662 -- 25,675
President & CEO 1999 388,819 85,389 16,051 -- 24,110 321,983 20,885
Georgia Power Company
-----------------------------------------------------------------------------------------------------------------------------------
W. L. WESTBROOK (9) 2000 330,208 455,552 13,611 -- 28,603 -- 17,322
Financial VP, CFO & Treasurer
Southern Company

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

(1) For Mr. Harris only, this includes the incremental cost of perquisites and
personal benefits including $38,100 for tax and financial planning services
and $25,280 for spousal travel expenses.
(2) Mr. Harris received 6,942 shares of restricted stock on July 17, 2000.
Shares vest on July 17, 2001 with dividends being reinvested. The value on
December 31, 2000 was $230,822. The amounts for Mr. Franklin and Ms. Fuller
reflect grants of Company restricted stock units made in 1998 and 1999,
respectively. These units vest based on their continued employment with
dividends reinvested in additional units. On December 31, 2000, the
following number and value of Company restricted stock units were held by:
Franklin (20,120.72 units, $669,014) and Fuller (15,570.31 units, $517,713).
The amount shown for Ms. Fuller in 2000 reflects the value of Mirant
Corporation restricted stock units. The Mirant units vest 20% each time
Mirant's stock price increases 20% over the price on the day of the grant
and are payable in cash at vesting. During 2000, 20% of Ms. Fuller's grant
vested. As of December 31, 2000, the number and value of Mirant restricted
stock units held by Ms. Fuller were 60,606 units valued at $1,715,756.
(3) With the exception of Ms. Fuller, all stock options are Company stock
options. In 2000, Ms. Fuller also received Mirant Corporation stock options
and in 1999 she received units granted under the Mirant Value Creation Plan
that were converted to Mirant stock options at the time of Mirant's initial
public offering..
(4) Payouts made in 1999, 2000, and 2001 for the four-year performance periods
ending December 31, 1998, 1999, and 2000, respectively.

(5) Company contributions in 2000 to the Employee Savings Plan and Employee
Stock Ownership Plan, non-pension related accruals under the Supplemental
Benefit Plan, and tax sharing benefits paid to participants who elected
receipt of dividends on Company common stock held in the Employee Saving
Plan are provided in the following table:

ESP TAX
SHARING
BENEFIT ESP ($) ESOP ($) SBP ($)
---------------------------------------------------------------------------

A. W. Dahlberg -- 7,650 810 43,807
---------------------------------------------------------------------------
H. A. Franklin -- 6,853 810 27,239
---------------------------------------------------------------------------
S. M. Fuller -- 6,853 810 14,099
---------------------------------------------------------------------------
E. B. Harris -- 5,958 810 21,090
---------------------------------------------------------------------------
D. M. Ratcliffe 1,993 6,853 810 16,019
---------------------------------------------------------------------------
W. L. Westbrook -- 6,853 810 9,659
---------------------------------------------------------------------------

(6) Mr. Dahlberg retired as Chairman on April 1, 2001.
(7) Ms. Fuller did not serve as an executive officer prior to 1999.
(8) Mr. Ratcliffe did not serve as an executive officer prior to 1999.
(9) Mr. Westbrook first became a named executive officer on December 31, 2000
and retired on April 1, 2000.

--------------------------------------------------------------------------------
STOCK OPTIONS
--------------------------------------------------------------------------------

OPTION GRANTS IN 2000

NUMBER OF
SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE OR GRANT DATE
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED (1) FISCAL YEAR (2) ($/SH)(1) DATE (1) VALUE ($)(3)
--------------------------------------------------------------------------------------------------------------

A. W. DAHLBERG 215,616 3 23.25 4/1/2006 1,983,667
--------------------------------------------------------------------------------------------------------------
H. A. FRANKLIN 85,354 1 23.25 2/18/2010 491,639
--------------------------------------------------------------------------------------------------------------
S. M. FULLER 45,161 1 23.25 2/18/2010 260,127
--------------------------------------------------------------------------------------------------------------
E. B. HARRIS 62,064 1 23.25 5/1/2009 357,489
--------------------------------------------------------------------------------------------------------------
D. M. RATCLIFFE 48,662 1 23.25 2/18/2010 280,293
--------------------------------------------------------------------------------------------------------------
W. L. WESTBROOK 28,603 1 23.25 4/1/2006 164,753
--------------------------------------------------------------------------------------------------------------

(1) Performance Stock Plan grants were made on February 18, 2000, and vest
annually at a rate of one-third on the anniversary date of the grant. Grants
fully vest upon termination as a result of death, total disability, or
retirement and expire five years after retirement, three years after death
or total disability, or their normal expiration date if earlier. Exercise
price is the average of the high and low fair market value of the Company's
common stock on the date granted. Options may be transferred to certain
family members, family trusts, and family limited partnerships.
(2) A total of 6,977,038 stock options were granted in 2000.

(3) Value was calculated using the Black-Scholes option valuation model. The
actual value, if any, ultimately realized depends on the market value of the
Company's common stock at a future date. Significant assumptions are shown
below:

--------------------------------------------------------------------------------------------------
DISCOUNT FOR FORFEITURE RISK:
RISK-FREE RATE DIVIDEND BEFORE BEFORE
VOLATILITY OF RETURN OPPORTUNITY TERM VESTING EXPIRATION
---------------------------------------------------------------------------------------------------------------------------------

CHAIRMAN 22.14% 6.52% 100% 10 7.79% 16.89%
---------------------------------------------------------------------------------------------------------------------------------
OTHERS 22.14% 6.52% 50% 10 7.79% 12.40%
---------------------------------------------------------------------------------------------------------------------------------

These assumptions reflect the effects of cash dividend equivalents paid to
participants under the Performance Dividend Plan assuming targets are met.

MIRANT CORPORATION OPTION GRANTS IN 2000

NUMBER OF
SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE OR
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (1) FISCAL YEAR (2) ($/SH)(1) DATE (1)
----------------------------------------------------------------------------------

S. M. FULLER 170,455(3) 3.7 22.00 9/27/2010
86,179(4) 1.7 18.59 6/30/2010
----------------------------------------------------------------------------------

POTENTIAL REALIZED VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE APPRECIATION
FOR OPTION TERM ($)
------------------------------------------------
NAME 0% 5% 10%
--------------------- ------------------------------------------------

S. M. FULLER 0 2,358,361 5,976,550
0 1,034,178 2,636,572
---------------------

(1) These grants vest annually at a rate of one-third on the anniversary date of
the grant. Grants continue to vest normally upon termination as a result of
death, total disability, or retirement and expire five years after
retirement, three years after death or total disability, or their normal
expiration date if earlier.
(2) A total of 4,993,995 Mirant stock options were granted in 2000.
(3) Initial equity grants made on September 27, 2000.
(4) Grants converted from Value Creation Plan were initially made on March 15,
2000.

--------------------------------------------------------------------------------
OPTION EXERCISES
--------------------------------------------------------------------------------

AGGREGATED OPTION EXERCISES IN 2000 AND YEAR-END OPTION VALUES

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
NUMBER OF VALUE OPTIONS AT YEAR-END (#) YEAR-END ($)(2)
SHARES ACQUIRED REALIZED --------------------------- ---------------------------
NAME ON EXERCISE (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------------------------------------------------------------------------------------------------------------------

A. W. DAHLBERG 10,718 122,253 646,241 403,665 6,849,657 3,388,463
-------------------------------------------------------------------------------------------------------------------
H. A. FRANKLIN 10,728 125,721 234,422 142,963 2,755,413 1,234,031
-------------------------------------------------------------------------------------------------------------------
S. M. FULLER Not exercised 0 36,347 61,124 342,860 556,501
-------------------------------------------------------------------------------------------------------------------
E. B. HARRIS Not exercised 0 245,365 92,762 3,082,250 821,337
-------------------------------------------------------------------------------------------------------------------
D. M. RATCLIFFE 1,998 24,351 105,368 69,415 1,270,125 623,212
-------------------------------------------------------------------------------------------------------------------
W. L. WESTBROOK Not exercised 0 65,384 41,731 711,525 371,995
-------------------------------------------------------------------------------------------------------------------

(1) The "Value Realized" is ordinary income, before taxes, and represents the
amount equal to the excess of the fair market value of the shares at the
time of exercise above the exercise price.
(2) These columns represent the excess of the fair market value of the Company's
common stock of $33.25 per share, as of December 31, 2000, above the
exercise price of the options. The amounts under the Exercisable column
report the "value" of options that are vested and therefore could be
exercised. The Unexercisable column reports the "value" of options that are
not vested and therefore could not be exercised as of December 31, 2000.

AGGREGATED MIRANT OPTION EXERCISES IN 2000 AND YEAR-END OPTION/SAR VALUES

S. M. FULLER 0 0 68,587 683,311 1,004,008 7,219,135
-------------------------------------------------------------------------------------------------------------------

(1) The "Value Realized" is ordinary income, before taxes, and represents the
amount equal to the excess of the fair market value of the shares or rights
at the time of exercise above the exercise price.
(2) These columns represent the excess of the fair market value of the Company's
common stock of $28.31 per share, as of December 31, 2000, above the
exercise price of the options. The amounts under the Exercisable column
report the "value" of options that are vested and therefore could be
exercised. The Unexercisable column reports the "value" of options that are
not vested and therefore could not be exercised as of December 31, 2000.

--------------------------------------------------------------------------------
LONG-TERM INCENTIVE AWARDS TABLE
--------------------------------------------------------------------------------

This table shows long-term incentive plan awards made for the performance period
January 1, 2000, through December 31, 2003.

PRODUCTIVITY IMPROVEMENT PLAN

ESTIMATED FUTURE PAYOUTS UNDER
PERFORMANCE OR NON-STOCK PRICE BASED PLANS
OTHER PERIOD UNTIL ------------------------------
NUMBER OF MATURATION OR THRESHOLD TARGET MAXIMUM
NAME UNITS (1) PAYOUT (1) ($)(2) ($)(2) ($)(2)
----------------------------------------------------------------------------------------------------------

A. W. DAHLBERG 6,366 4 years 3,183 6,366 12,732
----------------------------------------------------------------------------------------------------------
H. A. FRANKLIN 4,244 4 years 2,122 4,244 8,488
----------------------------------------------------------------------------------------------------------

(1) Each unit is equal to the value of one share of Company common stock. Under
the Company's Executive Productivity Improvement Plan, the number of units
granted to Messrs. Dahlberg and Franklin had a value based on the fair
market value of Common Stock at the beginning of the performance period of
$150,000 and $100,000, respectively. No awards are paid unless the
participant remains employed by the Company through the end of the
performance period.
(2) The threshold, target, and maximum number of units payable under the plan at
the end of the performance period is 50%, 100%, and 200%, respectively, and
can vary based on the Company's total shareholder return relative to a
selected group of electric utilities. If certain minimum performance
relative to the selected group is not achieved, there will be no payout; nor
is there a payout if the current earnings of the Company are not sufficient
to fund the dividend at the rate paid in the last calendar year. The plan
provides that in the discretion of the Compensation & Management Succession
Committee, extraordinary income may be excluded for purposes of calculating
the amount available for the payment of awards. All awards are payable in
cash at the end of the performance period.

--------------------------------------------------------------------------------
PENSION PLAN TABLE
--------------------------------------------------------------------------------

YEARS OF ACCREDITED SERVICE
-------------------------------------------------------------------------------------------------------------
COMPENSATION 15 20 25 30 35 40 45
-------------------------------------------------------------------------------------------------------------

$ 100,000 $ 25,500 $ 34,000 $ 42,500 $ 51,000 $ 59,500 $ 68,000 $ 76,500
-------------------------------------------------------------------------------------------------------------
300,000 76,500 102,000 127,500 153,000 178,500 204,000 229,500
-------------------------------------------------------------------------------------------------------------
500,000 127,500 170,000 212,500 255,000 297,000 340,000 382,000
-------------------------------------------------------------------------------------------------------------
700,000 178,500 238,000 297,500 357,000 416,500 476,000 535,500
-------------------------------------------------------------------------------------------------------------
900,000 229,500 306,000 382,500 459,000 535,500 612,000 688,500
-------------------------------------------------------------------------------------------------------------
1,100,000 280,500 374,000 467,500 561,000 654,500 748,000 841,500
-------------------------------------------------------------------------------------------------------------
1,300,000 331,500 442,000 552,500 663,000 773,500 884,000 994,500
-------------------------------------------------------------------------------------------------------------
1,500,000 382,500 510,000 637,500 765,000 892,500 1,020,000 1,147,500
-------------------------------------------------------------------------------------------------------------
1,700,000 433,500 578,000 722,500 867,000 1,011,500 1,156,000 1,300,500
-------------------------------------------------------------------------------------------------------------
1,800,000 459,000 612,000 765,000 918,000 1,071,000 1,224,000 1,377,000
-------------------------------------------------------------------------------------------------------------
2,000,000 510,000 680,000 850,000 1,020,000 1,190,000 1,360,000 1,530,000
-------------------------------------------------------------------------------------------------------------
2,200,000 561,000 748,000 935,000 1,122,000 1,309,000 1,496,000 1,683,000
-------------------------------------------------------------------------------------------------------------
2,500,000 637,500 850,000 1,062,500 1,275,000 1,487,500 1,700,000 1,912,500
-------------------------------------------------------------------------------------------------------------

This table shows the estimated annual pension benefits payable at normal
retirement age under Southern's qualified Pension Plan, as well as non-qualified
supplemental benefits, based on the stated compensation and years of service
with Southern's subsidiaries. Compensation for pension purposes is limited to
the average of the highest three of the final 10 years' compensation. For
Messrs. Dahlberg, Franklin, Harris, Ratcliffe, and Westbrook, compensation is
base salary plus the excess of annual and long-term incentive compensation over
15 percent of base salary. For Ms. Fuller, it is base salary plus the excess of
short-term incentive compensation over 10 percent of base salary. (These
compensation components are reported under columns titled "Salary", "Bonus", and
"Long-Term Incentive Plan Payouts" in the Summary Compensation Table on page
).

As of December 31, 2000, the applicable compensation levels and accredited
service for determination of pension benefits would have been:

ACCREDITED
COMPENSATION SERVICE
------------------------------------------------

A. W. Dahlberg $2,103,140 39
------------------------------------------------
H. A. Franklin 1,216,400 29
------------------------------------------------
S. M. Fuller 771,116 15
------------------------------------------------
E. B. Harris 1,006,892 41
------------------------------------------------
D. M. Ratcliffe 780,996 28
------------------------------------------------
W. L. Westbrook 539,152 35
------------------------------------------------

The amounts shown in the table were calculated according to the final average
pay formula and are based on a single life annuity without reduction for joint
and survivor annuities or computation of Social Security offset that would apply
in most cases. (See page for a description of additional supplemental
pension payable to Messrs. Dahlberg and Westbrook under agreements with the
Company.)

--------------------------------------------------------------------------------
FIVE-YEAR PERFORMANCE GRAPH
--------------------------------------------------------------------------------

This performance graph compares the cumulative total shareholder return on the
Company's common stock with the Standard & Poor's Electric Utility Index and the
Standard & Poor's 500 Index for the past five years. The graph assumes that $100
was invested on December 31, 1995 in the Company's common stock and each of the
above indices, and that all dividends are reinvested. The shareholder return
shown below for the five-year historical period may not be indicative of future
performance.

S & P ELECTIRIC UTILITY
SOUTHERN COMPANY INDEX S & P 500 INDEX
---------------- ----------------------- ---------------

1995 $ 100 $ 100 $ 100
1996 97 100 123
1997 118 126 164
1998 139 146 211
1999 118 117 255
2000 176 180 232

APPENDIX A

SOUTHERN COMPANY
AUDIT COMMITTEE CHARTER

This Charter identifies the composition, purpose, authority, meeting
requirements and responsibilities of the Southern Company Audit Committee (the
"Committee") as approved by the Southern Company Board of Directors.

Composition of the Audit Committee

The Audit Committee will be comprised of at least three independent directors,
each of whom will have a basic understanding of financial statements and at
least one of whom will have prior accounting and related financial management
expertise. Such requirements, for independence and financial literacy, are
interpreted by the Board of Directors in its best business judgement in
accordance with the rules of the Securities Exchange Commission (SEC) and the
New York Stock Exchange.

Purpose of the Audit Committee

The purpose of the Audit Committee is to provide, on behalf of the Southern
Company Board of Directors, oversight of:

- The Southern Company's accounting and financial reporting practices and
policies and internal audit activities and procedures, including the
assessment of the adequacy of internal accounting, compliance and controls
systems.

- The Southern Company's financial statements and the independent audit thereof,
including quarterly and annual reporting. This includes financial information
for all Southern Company first-tier, consolidated subsidiaries.

- The independent public accountants, including their selection or nomination
for Board of Directors, their performance evaluation and, where appropriate,
their replacement.

- The independence of the external public accountants through evaluation and
discussion of their annual written "Statement as to Independence" and
consideration of non-audit services provided.

AUTHORITY OF THE AUDIT COMMITTEE

The Committee reports to the Board of Directors and has unrestricted access and
authorization to obtain assistance from Southern Company personnel to accomplish
its purpose. In addition, the Committee has the discretion to initiate and
supervise investigations within the scope of its duties, as it may deem
appropriate and to employ whatever additional advisors and consultants it deems
necessary for the fulfillment of its duties.

Meeting Requirements

The Audit Committee shall meet a minimum of four times each year, or more often
if warranted, to receive reports from and discuss the quarterly and annual
financial statements, including disclosures and other related information. The
Audit Committee shall meet separately, at least annually, with the Director of
Internal Auditing, the Compliance Officer, and the external auditor to discuss
matters that the Audit Committee or any of these persons believe should be
discussed privately. Meetings of the Audit Committee may utilize conference
call, Internet or other similar electronic communication technology.

Responsibilities of the Audit Committee

1. Financial Reporting and Accounting Practices

The oversight responsibility of the Audit Committee in the area of
financial reporting and accounting practices is to provide reasonable
assurances that financial disclosures made by management accurately portray
the financial condition, results of operations, cash flows, plans and
long-term commitments of the Company on a consolidated basis, as well as on
a separate company basis for each first-tier, consolidated subsidiary that
has publicly traded securities. To accomplish this, the Committee will:

- Provide oversight of the external audit coverage, including:

Annual nomination or selection of independent public accountants.

Evaluation of the independent public accountants' performance.

Evaluation of policies covering when or whether to engage the independent
public accountants to provide non-audit services.

Review of the independent public accountants' quarterly and annual work
plans, results of the audit engagements and proposed and actual fees for
services rendered. This includes audit and non-audit work plans and fees.

Coordination with the Internal Auditing and Accounting functions.

Assessment of the external auditors' annual "Statement as to
Independence."

- Review and discuss the quarterly and annual consolidated earnings
announcements with management.

- Review and discuss with management and the independent public accountants
the quarterly and annual financial statements and recommend them for
filing with the SEC. The financial statements include the Southern
Company consolidated financial statements as well as the separate
financial statements for all first-tier, consolidated subsidiaries with
publicly traded securities. The review and discussion includes:

Significant accounting policies and policy decisions.

Significant judgments and estimates made by management.

Significant reporting or operational issues identified during the
reporting period, including how they were resolved.

Issues on which management sought second accounting opinions.

Adjustments to the financial statements proposed by the external auditors.

Significant regulatory changes and accounting and reporting developments
proposed by Financial Accounting Standards Board, SEC or other regulatory
agency.

- Review the letters of management representation given to the independent
public accountants in connection with the audits of the annual financial
statements.

2. Internal Control

The responsibility of the Audit Committee in the area of internal control
in addition to the actions described in section (1) is to:

- Provide oversight of the internal audit functions by:

Reviewing audit plans, budgets and staffing levels.

Reviewing audit results.

Reviewing management's appointment, appraisal of, and/or removal of the
Company's Director of Internal Auditing. At least every two years,
regardless of the performance of the incumbent, the President and Chief
Executive Officer will review with the Committee the merits of reassigning
the Director of Auditing.

- Assess the extent to which the planned audit scopes of the internal
auditors and the independent public accountants can be relied on to
detect fraud or weaknesses in internal controls.

- Assess management's response to any reported weaknesses or compliance
deficiencies.

- Provide oversight of the Company's Compliance and Ethics Programs by:

Reviewing the plans and activities of the Company's Corporate Compliance
Officer.

Reviewing results of auditing or other monitoring programs designed to
prevent or detect violations of laws or regulations.

Reviewing corporate policies relating to compliance with laws and
regulations, ethics, conflict of interest and the investigation of
misconduct or fraud.

Reviewing significant cases of employee conflict of interest, unethical or
illegal conduct.

- Review the quality assurance practices of the internal auditing function
and the independent public accountants.

- Review and discuss significant risks facing the Company and the steps
taken to monitor and minimize such risks.

- Review different aspects of the Company's business on a planned basis to
ensure a general understanding of the significant operations and
functional areas and to assess the impact of these operations and
functional areas on the internal control environment.

3. Other

- Report Committee activities and findings to the Board of Directors on a
regular basis.

- Report Committee activities in the Company's annual proxy statement to
shareholders.

- Review this charter at least annually and recommend appropriate changes.

(SOUTHERN COMPANY LOGO)

Recycle Logo

APPENDIX B

ADMISSION TICKET [GRAPHIC OMITTED]
(Not Transferable)

2001 ANNUAL MEETING OF STOCKHOLDERS
10 a.m. (EDT), May 23, 2001

Savannah International Trade & Convention Center
One International Drive
Savannah, Georgia 31402
888/644-6822 912/447-4000

Please present this admission ticket in order to gain admittance to the meeting.
This ticket admits only the stockholder listed on the reverse side and is not
transferable.

Directions to Convention Center: From I-16, take Exit 166
(Charleston/Hardeeville Exit) and proceed over the Talmadge Bridge. Stay in
right lane and follow signs to Hutchinson Island. At base of bridge, turn right
onto Hutchinson Island. Follow signs to Trade & Convention Center.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

The Annual Meeting of Stockholders of The Southern Company will be held on
Wednesday, May 23, 2001, at 10:00 a.m. (EDT), at the Savannah International
Trade & Convention Center, Savannah, Georgia. Stockholders owning shares at the
close of business on March 26, 2001, are entitled to attend and vote at the
meeting. Stockholders will act on the election of ten members of the board of
directors, vote on the Omnibus Incentive Compensation Plan, and transact such
other business as may properly come before the meeting.

- - - - - - - - - - - - Detach and Mail Bottom Portion - - - - - - - - - - - -

[GRAPHIC OMITTED]

FORM OF PROXY AND FORM OF PROXY
TRUSTEE VOTING AND
INSTRUCTION FORM TRUSTEE VOTING
INSTRUCTION FORM

PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS AND
TRUSTEE VOTING INSTRUCTION FORM

The undersigned hereby appoints H. A. Franklin, G. E. Klappa, T. Chisholm, or
any of them, proxies with full power of substitution in each, to vote all shares
the undersigned is entitled to vote at the Annual Meeting of Stockholders of THE
SOUTHERN COMPANY, to be held at the Savannah International Trade & Convention
Center, Savannah, Georgia, on May 23, 2001, at 10:00 a.m. (EDT), and any
adjournments thereof, on all matters legally coming before the meeting,
including, without limitation, the proposals listed on the reverse side of this
form.

This form also provides voting instructions for shares held by the Trustees of
the Employee Savings Plan and Employee Stock Ownership Plan and directs such
Trustees to vote as indicated on all matters legally coming before the meeting,
including, without limitation, the proposals listed on the reverse side of this
form.

This Form of Proxy/Voting Instruction Form ("VIF") is solicited jointly by the
Board of Directors of the Southern Company and the Trustees of the Employee
Savings Plan and Employee Stock Ownership Plan pursuant to a separate Notice of
Annual Meeting and Proxy Statement. If not provided electronically, this form
should be marked, signed, and dated and mailed in the enclosed envelope in time
to reach the Company's proxy tabulator at 51 Mercedes Way, Edgewood, NY 11717 by
9:00 a.m. on Wednesday, May 23, 2001 for common shares to be voted and 5:00 p.m.
on Tuesday, May 22, 2001 for the Trustees to vote the Plan shares. The proxy
tabulator will report separately to the Proxy Committee and to the Trustees as
to proxies received and voting instructions provided, respectively.

THIS FORM OF PROXY/ VOTING INSTRUCTION FORM WILL BE VOTED AS SPECIFIED
BY THE UNDERSIGNED. IF NO CHOICE IS INDICATED, THE SHARES WILL BE
VOTED AS THE BOARD OF DIRECTORS RECOMMENDS.

Continued on reverse side.

[GRAPHIC OMITTED] THREE WAYS TO PROVIDE INSTRUCTIONS!

Providing instructions by Internet or
PROXY SERVICES telephone is convenient and saves money.
P. O. BOX 9112 If you wish, you may still provide
FARMINGDALE, NY 11735 instructions by mail.

INTERNET - www.proxyvote.com Use the
Internet to transmit your voting
instructions. Have your Form of Proxy in
hand when you access the web site. You will
be prompted to enter your 12-digit Control
Number which is located below to obtain your
records and create an electronic voting
instruction form.

TELEPHONE - 1-800-690-6903 Use any
touch-tone telephone to transmit your voting
instructions. Have your Form of Proxy in
hand when you call. You will be prompted to
enter your 12-digit Control Number which is
located below and then follow the simple
instructions the Vote Voice provides you.

MAIL:

Mark, sign, and date your Form of Proxy and
return it in the postage-paid envelope we've
provided or return to Southern Company, C/O
ADP, 51 Mercedes Way, Edgewood, NY 11717.

If you provided instructions by Internet or
phone, please do not mail this form.

THANK YOU

NOTE: The last instruction
received, either paper or
electronic, will be the last
tabulated.

CONTROL NUMBER
For telephone/Internet

TO VOTE, MARK BLOCKS BELOW IN KEEP THIS PORTION
BLUE OR BLACK INK AS FOLLOWS: FOR YOUR RECORDS
-------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY

THIS FORM OF PROXY/VOTING INSTRUCTION FORM IS VALID ONLY WHEN SIGNED AND DATED

THE SOUTHERN COMPANY

1. ELECTION OF DIRECTORS: For Withhold For All To withhold authority to vote, mark
(01) D. P. Amos (02) D. J. Bern (03) T. F. Chapman All All Except "For All Except" and write nominee's
(04) H. A. Franklin (05) B. S. Gordon (06) L. G. Hardman III ( ) ( ) ( ) number on the line below.
(07) E. B. Harris (08) D. M. James (09) Z. T. Pate _______________________
(10) G. J. St. Pe

Vote on Items

For Against Abstain
2. APPROVE OMNIBUS INCENTIVE COMPENSATION PLAN ( ) ( ) ( )

3. STOCKHOLDER PROPOSAL ON RENEWABLE ENERGY SOURCES ( ) ( ) ( )

UNLESS OTHERWISE SPECIFIED ABOVE, YOUR SHARES WILL BE VOTED "FOR" ITEMS 1 AND 2
AND "AGAINST" ITEM 3.

Mark here if you plan to attend the Annual Meeting. ( )

I (we) Consent to suspending future mailings of
the Annual Report and Proxy Statement on this
account. ( )
I (we)receive other copies at the same household
or will access the documents electronically

Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

APPENDEX C

SOUTHERN COMPANY

OMNIBUS INCENTIVE COMPENSATION PLAN

Effective May 23, 2001

Contents

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

Article 1. Establishment, Objectives, and
Duration..................................1

Article 2. Definitions...............................1

Article 3. Administration............................5

Article 4. Shares Subject to the Plan and
Maximum Awards............................5

Article 5. Eligibility and Participation.............6

Article 6. Stock Options.............................7

Article 7. Stock Appreciation Rights.................8

Article 8. Restricted Stock and Restricted
Stock Units..............................10

Article 9. Performance Units, Performance
Shares, and Cash-Based Awards............11

Article 10. Performance Measures.....................13

Article 11. Beneficiary Designation..................14

Article 12. Deferrals................................15

Article 13. Rights of Employees/Directors............15

Article 14. Amendment, Modification, and
Termination..............................15

Article 15. Withholding..............................16

Article 16. Indemnification..........................16

Article 17. Successors...............................17

Article 18. General Provisions.......................17

Southern Company

Omnibus Incentive Compensation Plan

Article 1 Establishment, Objectives, and Duration

1.1 Establishment of the Plan. The Southern Company (hereinafter
referred to as the "Company"), hereby establishes an incentive compensation plan
to be known as the "Southern Company Omnibus Incentive Compensation Plan"
(hereinafter referred to as the "Plan"), as set forth in this document. The Plan
permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance
Shares, Performance Units, and Cash-Based Awards.

Subject to approval by the Company's stockholders, the Plan shall
become effective as of May 23, 2001 (the "Effective Date") and shall remain in
effect as provided in Section 1.3 hereof.

1.2......Objectives of the Plan. The objectives of the Plan are to
optimize the profitability and growth of the Company through annual and
long-term incentives that are consistent with the Company's goals and that link
the personal interests of Participants to those of the Company's stockholders;
to provide Participants with an incentive for excellence in individual
performance; and to promote teamwork among Participants.

The Plan is further intended to provide flexibility to the Company in
its ability to motivate, attract, and retain the services of Employees and
Directors who make significant contributions to the Company's success and to
allow those individuals to share in the success of the Company.

1.3......Duration of the Plan. The Plan shall commence on the Effective
Date, as described in Section 1.1 hereof, and shall remain in effect, subject to
the right of the Board of Directors to amend or terminate the Plan at any time
pursuant to Article 14 hereof, until all Shares subject to it shall have been
purchased or acquired according to the Plan's provisions. However, in no event
may an Award be granted under the Plan on or after the tenth anniversary of the
Effective Date.

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. "Affiliate" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations of the
Exchange Act.

2.2. "Award" means, individually or collectively, a grant under
this Plan of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units, Performance Shares, Performance Units,
or Cash-Based Awards.

2.3. "Award Agreement" means an agreement entered into by the
Company and each Participant setting forth the terms and
provisions applicable to Awards granted under this Plan.

2.4 "Base Value" shall mean the Fair Market Value of a Stock
Appreciation Right on the date of its grant.

2.5. "Beneficial Owner" or "Beneficial Ownership" shall have the
meaning ascribed to such term in Rule 13d-3 of the General
Rules and Regulations of the Exchange Act.

2.6. "Board" or "Board of Directors" means the Board of Directors
of the Company.

2.7. "Cash-Based Award" means an Award granted to a Participant, as
described in Article 9 herein.

2.8. "Change in Control Benefit Plan Determination Policy" shall
mean the change in control benefit plan determination policy,
as approved by the Board of Directors of Southern Company
Services, Inc., as it may be amended from time to time in
accordance with the provisions therein.

2.9. "Code" means the Internal Revenue Code of 1986, as amended
from time to time.

2.10. "Committee" means any committee appointed by the Board to
administer Awards to Employees, as specified in Article 3
herein. The Committee shall at all times maintain compliance
with Code Section 162(m), or any successor statute thereto, as
to the composition of the Committee.

2.11. "Common Stock" shall mean the common stock of the Company.

2.12. "Company" means The Southern Company, a Delaware corporation,
and any successor thereto as provided in Article 17 herein.

2.13. "Consummation" shall mean the completion of the final act
necessary to complete a transaction as a matter of law,
including, but not limited to, any required approvals by the
corporation's shareholders and board of directors, the
transfer of legal and beneficial title to securities or assets
and the final approval of the transaction by any applicable
domestic or foreign governments or agencies.

2.15. "Covered Employee" means a Participant who, as of the date of
vesting and/or payout of an Award, as applicable, is one of
the group of "covered employees," as defined in the
regulations promulgated under Code Section 162(m), or any
successor statute.

2.16. "Director" means any individual who is a member of the Board
of Directors of the Company or any Subsidiary; provided,
however, that any Director who is employed by the Company or
any Subsidiary shall be considered an Employee under the Plan.

2.17. "Disability" shall have the meaning ascribed to such term in
the Participant's governing long-term disability plan, or if
no such plan exists, at the discretion of the Committee.

2.18. "Effective Date" shall have the meaning ascribed to such term
in Section 1.1 hereof.

2.19. "Employee" means any employee of the Company or its
Subsidiaries. Directors who are employed by the Company or its
Subsidiaries shall be considered Employees under this Plan.

2.20. "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.

2.21. "Fair Market Value" shall mean the average of the high and low
prices at which a share of Common Stock shall have been traded
on the respective measurement date, such as the date of grant
or the exercise of an Award, or on the next preceding trading
day if such date was not a trading date, as reported by 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. If the Shares
are not listed for trading on a national securities exchange,
the fair market value of the Shares shall be determined by the
Committee in good faith. In no event shall the Fair Market
Value equal less than the par value of the Common Stock.

2.22. "Freestanding SAR" means an SAR that is granted independently
of any Options, as described in Article 7 herein.

2.23. "Incentive Stock Option" or "ISO" means an option to purchase
Shares granted under Article 6 herein and which is designated
as an Incentive Stock Option and which is intended to meet the
requirements of Code Section 422.

2.24. "Insider" shall mean an individual who is, on the relevant
date, an officer, director or ten percent (10%) beneficial
owner of any class of the Company's equity securities that is
registered pursuant to Section 12 of the Exchange Act, all as
defined under Section 16 of the Exchange Act.

2.25. "Nonqualified Stock Option" or "NQSO" means an option to
purchase Shares granted under Article 6 herein and which is
not intended to meet the requirements of Code Section 422.

2.26. "Option" means an Incentive Stock Option or a Nonqualified
Stock Option, as described in Article 6 herein.

2.27. "Option Price" means the price at which a Share may be
purchased by a Participant pursuant to an Option.

2.28. "Participant" means an Employee or Director who has been
selected to receive an Award or, with respect to whom, an
Award is outstanding under the Plan.

2.29. "Performance-Based Exception" means the performance-based
exception from the tax deductibility limitations of Code
Section 162(m).

2.30. "Performance Share" means an Award granted to a Participant,
as described in Article 9 herein.

2.31. "Performance Unit" means an Award granted to a Participant, as
described in Article 9 herein.

2.32. "Period of Restriction" means the period during which the
transfer of Shares of Restricted Stock is limited in some way
(based on the passage of time, the achievement of performance
goals, or upon the occurrence of other events as determined by
the Committee, at its discretion), and the Shares are subject
to a substantial risk of forfeiture, as provided in Article 8
herein.

2.33. "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d)
and 14(d) thereof, including a "group" as defined in Section
13(d) thereof.

2.34. "Restricted Stock" means an Award granted to a Participant, as
described in Article 8 herein.

2.35 "Restricted Stock Unit" means an Award granted to a
Participant, as described in Article 8 herein.

2.36. "Retirement" shall have the meaning ascribed to such term in
The Southern Company Pension Plan.

2.37. "Shares" means the shares of Common Stock.

2.38. "Stock Appreciation Right" or "SAR" means an Award, granted
alone or in connection with a related Option, designated as an
SAR, pursuant to the terms of Article 7 herein.

2.39. "Subsidiary" means any corporation, partnership, joint
venture, or other entity in which the Company has a majority
voting interest.

2.40. "Tandem SAR" means an SAR that is granted in connection with a
related Option pursuant to Article 7 herein, the exercise of
which shall require forfeiture of the right to purchase a
Share under the related Option (and when a Share is purchased
under the Option, the Tandem SAR shall similarly be canceled).

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

2.42. "Trustee" shall mean the trustee of the Trust.

2.43. "Voting Securities" shall mean the outstanding voting
securities of a corporation entitling the holder thereof to
vote generally in the election of such corporation's
directors.

Article 3.........Administration

3.1......General. The Plan shall be administered by a Committee. The
members of the Committee shall be appointed from time to time by, and shall
serve at the discretion of, the Board of Directors. The Committee shall be
responsible for administration of the Plan; provided, however, that the
determination of the number of Awards to be granted to Directors shall remain
vested in the Board of Directors. The Committee shall have the authority to
delegate administrative duties to (i) officers, Employees or Directors of the
Company or Subsidiaries, or (ii) other Persons or organizations.

3.2......Authority of the Committee. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select Employees and
Directors who shall participate in the Plan; determine the sizes and types of
Awards; determine the terms and conditions of Awards in a manner consistent with
the Plan; construe and interpret the Plan and any agreement or instrument
entered into under the Plan; establish, amend, or waive rules and regulations
for the Plan's administration; determine and certify whether Award requirements
have been met; and (subject to the provisions of Articles 13 and 14 herein)
amend the terms and conditions of any outstanding Award as provided in the Plan.
Further, the Committee shall make all other determinations which may be
necessary or advisable for the administration of the Plan. As permitted by law
(and subject to Section 3.1 herein), the Committee may delegate its authority as
identified herein.

3.3......Decisions Binding. All determinations and decisions made by
the Board or the Committee pursuant to the provisions of the Plan and all
related orders and resolutions of the Board or the Committee shall be final,
conclusive and binding on all persons, including the Company, its stockholders,
Directors, Employees, Participants, their estates and beneficiaries and the
Subsidiaries.

Article 4.........Shares Subject to the Plan and Maximum Awards

4.1......Number of Shares Available for Grants. Subject to adjustment
as provided in Section 4.2 herein, the number of Shares hereby reserved for
issuance to Participants under the Plan shall be 30,000,000 (thirty million).
Additionally, any Shares available for issuance under the Southern Company
Performance Stock Plan on May 23, 2001 shall be transferred to the Plan, added
to the reserved Shares and available for issuance to Participants under the
Plan. No more than 15,000,000 (fifteen million) of the Shares available for
issuance under the Plan may be granted in the form of Awards other than Stock
Options. The Committee shall determine the appropriate methodology for
calculating the number of Shares issued pursuant to the Plan. Unless and until
the Committee determines that an Award to a Covered Employee shall not be
designed to comply with the Performance-Based Exception, the following rules
shall apply to grants of such Awards under the Plan:

(a) Stock Options: The maximum aggregate number of Shares that may
be granted in the form of Stock Options, pursuant to any Award
granted in any one fiscal year to any one single Participant
shall be 5,000,000 (five million).

(b) SARs: The maximum aggregate number of Shares that may be
granted in the form of Stock Appreciation Rights, pursuant to
any Award granted in any one fiscal year to any one single
Participant shall be 5,000,000 (five million).

(c) Restricted Stock: The maximum aggregate grant with respect to
Awards of Restricted Stock granted in any one fiscal year to
any one Participant shall be 1,000,000 (one million).

(d) Restricted Stock Units: The maximum aggregate payout
(determined as of the end of the applicable restriction
period) with respect to Awards of Restricted Stock Units
granted in any one fiscal year to any one Participant shall be
the greater of $10,000,000 (ten million dollars) or 1,000,000
(one million) shares.

(e) Performance Shares. The maximum aggregate payout (determined
as of the end of the applicable performance period) with
respect to Awards of Performance Shares granted in any one
fiscal year to any one Participant shall be $10,000,000 (ten
million dollars) or 1,000,000 (one million) shares.

(f) Performance Units and Cash-Based Awards: The maximum aggregate
payout (determined as of the end of the applicable performance
period) with respect to Performance Units or Cash-Based Awards
awarded in any one fiscal year to any one Participant shall be
$10,000,000 (ten million dollars).

4.2......Adjustments in Authorized Shares. In the event of any change
in corporate capitalization, such as a stock split, stock dividend or
reclassification, 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, such adjustment shall be made in the number and
class of Shares which may be delivered under Section 4.1, in the number and
class of and/or price of Shares subject to outstanding Awards granted under the
Plan, and in the Award limits set forth in Section 4.1 as may be determined to
be appropriate and equitable by the Committee, in its sole discretion, to
prevent dilution or enlargement of rights; provided, however, that the number of
Shares subject to any Award shall always be a whole number.

Article 5.........Eligibility and Participation

5.1......Eligibility. Persons eligible to participate in this Plan
include all Employees and Directors.

5.2......Actual Participation. Subject to the provisions of the Plan,
the Committee may, from time to time, select from all eligible Employees and
Directors, those to whom Awards shall be granted and shall determine the nature
and amount of each Award.

Article 6.........Stock Options

6.1......Grant of Options. Subject to the terms and provisions of the
Plan, Options may be granted to Participants in such number, and upon such
terms, and at any time and from time to time as shall be determined by the
Committee.

6.2......Award Agreement. Each Option grant shall be evidenced by an
Award Agreement that shall specify the Option Price, the duration of the Option,
the number of Shares to which the Option pertains, and such other provisions as
the Committee shall determine. The Award Agreement also shall specify whether
the Option is intended to be an ISO within the meaning of Code Section 422, or
an NQSO whose grant is intended not to fall under the provisions of Code Section
422.

The Committee, in its sole discretion, shall have the ability to
require in the Award Agreement that the Participant must certify in a manner
acceptable to the Committee that he/she is in compliance with the terms and
conditions of the Plan and the Award Agreement. In the event that a Participant
fails to comply with the provisions of this Section 6.2 prior to, or during the
six (6) month period after any exercise, payment, or delivery pursuant to an
Option, such exercise, payment, or delivery may be rescinded by the Committee
within two (2) years thereafter. In the event of such rescission, the
Participant shall pay to the Company the amount of any gain realized or payment
received as a result of the rescinded exercise, payment, or delivery, in such
manner and or such terms and conditions as may be required, and the Company
shall be entitled to set-off against the amount of any such gain any amount owed
to the Participant by the Company.

6.3......Option Price. The Option Price for each grant of an Option
under this Plan shall be determined by the Committee.

6.4......Duration of Options. Each Option granted to a Participant
shall expire at such time as the Committee shall determine at the time of grant.

6.5......Exercise of Options. Options granted under this Article 6
shall be exercisable at such times and be subject to such restrictions and
conditions as the Committee shall in each instance approve, which need not be
the same for each grant or for each Participant.

6.6......Payment. Options granted under this Article 6 shall be
exercised by the delivery of a written notice of exercise to the Company and/or
the Committee, setting forth the number of Shares with respect to which the
Option is to be exercised, accompanied by full payment for the Shares. The
Option Price upon exercise of any Option shall be payable to the Company in full
either: (a) in cash or its equivalent, or (b) by forgoing compensation that the
Committee agrees otherwise would be owed, or (c) by tendering previously
acquired Shares having an aggregate Fair Market Value at the time of exercise
equal to the total Option Price (provided that the Shares which are tendered
must have been held by the Participant for at least six (6) months prior to
their tender to satisfy the Option Price), (d) by the attestation of Shares, or
(e) by any combination of (a), (b), (c) or (d).

The Committee also may allow cashless exercise as permitted under
Federal Reserve Board's Regulation T, subject to applicable securities law
restrictions, or by any other means which the Committee determines to be
consistent with the Plan's purpose and applicable law.

Subject to any governing rules or regulations, after receipt of a
written notification of exercise and full payment, the Company may deliver to
the Participant, in the Participant's name, Share certificates in an appropriate
amount based upon the number of Shares purchased under the Option(s).

All payments under all of the methods indicated above shall be paid in
United States dollars.

6.7......Restrictions on Share Transferability. The Committee may
impose such restrictions on any Shares acquired pursuant to the exercise of an
Option granted under this Article 6 as it may deem advisable, including, without
limitation, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.

6.8......Termination of Employment/Directorship. Each Participant's
Option Award Agreement shall set forth the extent to which the Participant shall
have the right to exercise the Option following termination of the Participant's
employment or directorship with the Company. Such provisions shall be determined
in the sole discretion of the Committee, shall be included in the Award
Agreement entered into with each Participant, need not be uniform among all
Options issued pursuant to this Article 6, and may reflect distinctions based on
the reasons for termination.

6.9......Transferability of Options.

(a) Incentive Stock Options. No ISO granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated, other than by will or by the laws of descent
and distribution. Further, all ISOs granted to a Participant
under the Plan shall be exercisable during his or her lifetime
only by such Participant.

(b) Nonqualified Stock Options. Except as otherwise provided in a
Participant's Award Agreement, no NQSO granted under this
Article 6 may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by
the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, all
NQSOs granted to a Participant under this Article 6 shall be
exercisable during his or her lifetime only by such
Participant.

Article 7.........Stock Appreciation Rights

7.1......Grant of SARs. Subject to the terms and conditions of the
Plan, SARs may be granted to Participants at any time and from time to time as
shall be determined by the Committee. The Committee may grant Freestanding SARs,
Tandem SARs, or any combination of these forms of SAR.

The Committee shall have complete discretion in determining the number
of SARs granted to each Participant (subject to Article 4 herein) and,
consistent with the provisions of the Plan, in determining the terms and
conditions pertaining to such SARs.

The grant price of a Freestanding SAR shall equal the Fair Market Value
of a Share on the date of grant of the SAR. The grant price of Tandem SARs shall
equal the Option Price of the related Option.

7.2......Exercise of Tandem SARs. Tandem SARs may be exercised for all
or part of the Shares subject to the related Option upon the surrender of the
right to exercise the equivalent portion of the related Option. A Tandem SAR may
be exercised only with respect to the Shares for which its related Option is
then exercisable.

Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR
will expire no later than the expiration of the underlying ISO; (ii) the value
of the payout with respect to the Tandem SAR may be for no more than one hundred
percent (100%) of the difference between the Option Price of the underlying ISO
and the Fair Market Value of the Shares subject to the underlying ISO at the
time the Tandem SAR is exercised; and (iii) the Tandem SAR may be exercised only
when the Fair Market Value of the Shares subject to the ISO exceeds the Option
Price of the ISO.

7.3......Exercise of Freestanding SARs. Freestanding SARs may be
exercised upon whatever terms and conditions the Committee, in its sole
discretion, imposes upon them.

7.4......SAR Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the grant price, the term of the SAR, and such
other provisions as the Committee shall determine.

7.5......Term of SARs. The term of an SAR granted under the Plan shall
be determined by the Committee, in its sole discretion; provided, however, that
such term shall not exceed ten (10) years.

7.6......Payment of SAR Amount. Upon exercise of an SAR, a Participant
shall be entitled to receive payment from the Company in an amount determined by
multiplying:

(a) The difference between the Fair Market Value of a
Share on the date of exercise over the Fair Market
Value of a Share on the date of grant; by

(b) The number of Shares with respect to which the SAR is
exercised.

At the discretion of the Committee, the payment upon SAR exercise may
be in cash, in Shares of equivalent value, or in some combination thereof. The
Committee's discretionary authority regarding the form of SAR payout shall be
set forth in the Award Agreement pertaining to the grant of the SAR.

7.7......Termination of Employment/Directorship. Each SAR Award
Agreement shall set forth the extent to which the Participant shall have the
right to exercise the SAR following termination of the Participant's employment
or directorship with the Company and/or its Subsidiaries. Such provisions shall
be determined in the sole discretion of the Committee, and need not be uniform
among all SARs issued pursuant to the Plan, and may reflect distinctions based
on the reasons for termination.

7.8......Nontransferability of SARs. Except as otherwise provided in a
Participant's Award Agreement, no SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, all SARs granted to a
Participant under the Plan shall be exercisable during his or her lifetime only
by such Participant.

Article 8.........Restricted Stock and Restricted Stock Units

8.1......Grant of Restricted Stock/Units. Subject to the terms and
provisions of the Plan, the Committee, at any time and from time to time, may
grant Shares of Restricted Stock and/or Restricted Stock Units to Participants
in such amounts as the Committee shall determine. Restricted Stock Units shall
be similar to Restricted Stock except that no shares are actually awarded to the
Participant except that the Committee may designate that a portion of the
Restricted Stock Unit be paid out in Shares.

8.2......Award Agreement. Each Restricted Stock and Restricted Stock
Unit grant shall be evidenced by an Award Agreement that shall specify the
Period(s) of Restriction, the number of Shares of Restricted Stock or Restricted
Stock Units granted, and such other provisions as the Committee shall determine.

8.3......Transferability. Except as provided in this Article 8, the
Shares of Restricted Stock granted herein may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated until the end of the applicable
Period of Restriction established by the Committee and specified in the Award
Agreement, or upon earlier satisfaction of any other conditions, as specified by
the Committee in its sole discretion and set forth in the Award Agreement. All
rights with respect to the Restricted Stock granted to a Participant under the
Plan shall be available during his or her lifetime only to such Participant.

Except as otherwise provided in the Award Agreement, Restricted Stock
Units may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution.
Further, except as otherwise provided in a Participant's Award Agreement, a
Participant's rights with respect to the Restricted Stock Units granted under
the Plan shall be available during the Participant's lifetime only to such
Participant.

8.4......Other Restrictions. Subject to Article 10 herein, the
Committee shall impose such other conditions and/or restrictions on any Shares
of Restricted Stock or Restricted Stock Units granted pursuant to the Plan as it
may deem advisable including, without limitation, a requirement that
Participants pay a stipulated purchase price for each Share of Restricted Stock
or each Restricted Stock Unit, restrictions based upon the achievement of
specific performance goals (Company-wide, divisional, and/or individual),
time-based restrictions on vesting following the attainment of the performance
goals, and/or restrictions under applicable federal or state securities laws.

The Company, directly or through its designee, may retain the
certificates representing Shares of Restricted Stock in the Company's possession
until such time as all conditions and/or restrictions applicable to such Shares
have been satisfied.

Except as otherwise provided in this Article 8, Shares of Restricted
Stock covered by each Restricted Stock grant made under the Plan shall become
freely transferable by the Participant after the last day of the applicable
Period of Restriction.

8.5......Voting Rights. Subject to the terms of the Award Agreements,
Participants holding Shares of Restricted Stock granted hereunder may be granted
the right to exercise full voting rights with respect to those Shares during the
Period of Restriction. A Participant has no voting rights with Restricted Stock
Units.

8.6......Dividends and Other Distributions. Subject to the terms of the
Award Agreements, during the Period of Restriction, Participants holding Shares
of Restricted Stock or Restricted Stock Units granted hereunder may be credited
with regular cash dividends paid with respect to the underlying Shares while
they are so held. The Committee may apply any restrictions to the dividends that
the Committee deems appropriate. Without limiting the generality of the
preceding sentence, if the grant or vesting of Restricted Shares or Restricted
Stock Units granted to a Covered Employee is designed to comply with the
requirements of the Performance-Based Exception, the Committee may apply any
restrictions it deems appropriate to the payment of dividends declared with
respect to such Restricted Shares or Restricted Stock Units, such that the
dividends and/or the Restricted Shares or Restricted Stock Units maintain
eligibility for the Performance-Based Exception.

8.7......Termination of Employment/Directorship. Each Award Agreement
shall set forth the extent to which the Participant shall have the right to
receive unvested Restricted Shares or Restricted Stock Units following
termination of the Participant's employment or directorship with the Company.
Such provisions shall be determined in the sole discretion of the Committee,
shall be included in the Award Agreement entered into with each Participant,
need not be uniform among all Shares of Restricted Stock or Restricted Stock
Units granted pursuant to the Plan, and may reflect distinctions based on the
reasons for termination; provided, however that, except in the cases of
terminations connected with a "Change in Control" (as defined in the Change in
Control Benefit Plan Determination Policy) and terminations by reason of
retirement, death or Disability, the vesting of Shares of Restricted Stock or
Restricted Stock Units which qualify for the Performance-Based Exception and
which are held by Covered Employees shall not be accelerated.

Article 9.........Performance Units, Performance Shares, and Cash-Based Awards

9.1......Grant of Performance Units/Shares and Cash-Based Awards.
Subject to the terms of the Plan, Performance Units, Performance Shares, and/or
Cash-Based Awards may be granted to Participants in such amounts and upon such
terms, and at any time and from time to time, as shall be determined by the
Committee.

9.2......Value of Performance Units/Shares and Cash-Based Awards. Each
Performance Unit shall have an initial value that is established by the
Committee at the time of grant. Each Performance Share shall have an initial
value equal to the Fair Market Value of a Share on the date of grant. Each
Cash-Based Award shall have a value as may be determined by the Committee. The
Committee shall set performance or other goals, including without limitation
time-based goals, in its discretion which, depending on the extent to which they
are met, will determine the number and/or value of Performance Units/Shares and
Cash-Based Awards which will be paid out to the Participant. For purposes of
this Article 9, the time period during which the performance goals must be met
shall be called a "Performance Period."

9.3......Earning of Performance Units/Shares and Cash-Based Awards.
Subject to the terms of this Plan, after the applicable Performance Period has
ended, the holder of Performance Units/Shares and Cash-Based Awards shall be
entitled to receive payout on the number and value of Performance Units/Shares
and Cash-Based Awards earned by the Participant over the Performance Period, to
be determined as a function of the extent to which the corresponding performance
goals have been achieved.

9.4 ....Determination of Awards. The factors required to determine
Awards under the Plan shall be fixed in all events by the end of the applicable
performance period established by the Committee.

9.5......Form and Timing of Payment of Performance Units/Shares and
Cash-Based Awards. Payment of earned Performance Units/Shares and Cash-Based
Awards shall be made in such form and at such time as the Committee shall
determine at the time of the Award. Subject to the terms of this Plan, the
Committee, in its sole discretion, may pay earned Performance Units/Shares and
Cash-Based Awards in the form of cash or in Shares (or in a combination thereof)
which have an aggregate Fair Market Value equal to the value of the earned
Performance Units/Shares and Cash-Based Awards at the close of the applicable
Performance Period. Such Shares may be granted subject to any restrictions
deemed appropriate by the Committee. The discretionary authority of the
Committee with respect to the form of payout of such Awards shall be set forth
in the Award Agreement pertaining to the grant of the Award.

At the discretion of the Committee, Participants may be entitled to
receive any dividends declared with respect to Shares which have been earned in
connection with grants of Performance Units and/or Performance Shares which have
been earned, but not yet distributed to Participants (such dividends shall be
subject to the same accrual, forfeiture, and payout restrictions as apply to
dividends earned with respect to Shares of Restricted Stock, as set forth in
Section 8.6 herein). In addition, Participants may, at the discretion of the
Committee, be entitled to exercise their voting rights with respect to such
Shares.

9.6......Termination of Employment/Directorship Due to Death,
Disability, or Retirement. Unless determined otherwise by the Committee and set
forth in the Participant's Award Agreement, in the event the employment or
directorship of a Participant is terminated by reason of death, Disability, or
Retirement during a Performance Period, the Participant shall receive a payout
of the Performance Units/Shares or Cash-Based Awards which is prorated, as
specified by the Committee in its discretion.

Payment of earned Performance Units/Shares or Cash-Based Awards shall
be made at a time specified by the Committee in its sole discretion following
the Performance Period and set forth in the Participant's Award Agreement.
Notwithstanding the foregoing, with respect to Covered Employees who retire
during a Performance Period, payments shall be made at the same time as payments
are made to Participants who did not retire during the applicable Performance
Period.

9.7......Termination of Employment/Directorship for Other Reasons. In
the event that a Participant's employment or directorship terminates for any
reason other than those reasons set forth in Section 9.6 herein, all Performance
Units/Shares and Cash-Based Awards shall be forfeited by the Participant to the
Company unless determined otherwise by the Committee, as set forth in the
Participant's Award Agreement.

9.8......Nontransferability. Except as otherwise provided in a
Participant's Award Agreement, Performance Units/Shares and Cash-Based Awards
may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution.
Further, except as otherwise provided in a Participant's Award Agreement, a
Participant's rights under the Plan shall be exercisable during the
Participant's lifetime only by the Participant or the Participant's legal
representative.

Article 10........Performance Measures

Unless and until the Committee proposes for shareholder vote and
shareholders approve a change in the general performance measures set forth in
this Article 10, the attainment of which may determine the degree of payout
and/or vesting with respect to Awards to Covered Employees which are designed to
qualify for the Performance-Based Exception, the performance measure(s) to be
used for purposes of such grants shall be chosen from among:

(a) Earnings per share;

(b) Net income or net operating income (before or after taxes and
before or after extraordinary items);

(d) Cash flow return on investments which equals net cash flows
divided by owners equity;

(e) Earnings before or after taxes;

(f) Gross revenues;

(g) Gross margins;

(h) Share price (including, but not limited to, growth measures
and total shareholder return);

(i) Economic Value Added, which equals net income or net operating
income minus a charge for use of capital;

(j) Operating margins;

(k) Market share;

(l) Revenues growth;

(m) Capacity utilization;

(n) Increase in customer base;

(o) Environmental health and safety;

(p) Diversity; and

(q) Quality.

The Committee, in its sole discretion, shall have the ability to set
such performance measures at the corporate level or the subsidiary/business unit
level. If the Company's Shares are traded on an established securities market,
any Awards issued to Covered Employees are intended but not required to meet the
requirements of the Treasury Regulations under Code Section 162(m) necessary to
satisfy the Performance Based Exception.

The Committee shall have the discretion to adjust the determinations of
the degree of attainment of the preestablished performance goals; provided,
however, that Awards which are designed to qualify for the Performance-Based
Exception, and which are held by Covered Employee, may not be adjusted upward
(the Committee shall retain the discretion to adjust such Awards downward).

In the event that applicable tax and/or securities laws change to
permit Committee discretion to alter the governing performance measures without
obtaining shareholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining shareholder approval. In
addition, in the event that the Committee determines that it is advisable to
grant Awards which shall not qualify for the Performance-Based Exception, the
Committee may make such grants without satisfying the requirements of Code
Section 162(m).

No Award shall be paid unless the Committee certifies that the
requirements necessary to receive the Award have been met.

Article 11........Beneficiary Designation

Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan 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 Company or the Committee, and will be effective only when
filed by the Participant in writing with the Company or the Committee during the
Participant's lifetime. In the absence of any such designation, benefits
remaining unpaid at the Participant's death shall be paid to the Participant's
estate.

Article 12........Deferrals

The Committee may permit or require a Participant to defer such
Participant's receipt of the payment of cash or the delivery of Shares that
would otherwise be due to such Participant by virtue of the exercise of an
Option or SAR, the lapse or waiver of restrictions with respect to Restricted
Stock or Restricted Stock Units, or the satisfaction of any requirements or
goals with respect to Performance Units, Performance Shares or Cash-Based
Awards. If any such deferral election is required or permitted, the Committee
may, in its sole discretion, establish rules and procedures for such payment
deferrals.

Article 13........Rights of Employees/Directors

13.1.....Employment. Nothing in the Plan shall interfere with or limit
in any way the right of the Company to terminate any Participant's employment at
any time, nor confer upon any Participant any right to continue in the employ of
the Company.

13.2.....Participation. No Employee or Director shall have the right to
be selected to receive an Award under this Plan, or, having been so selected, to
be selected to receive a future Award.

13.3.....Rights as a Stockholder. Except as otherwise provided in an
Award Agreement, a Participant shall have none of the rights of a shareholder
with respect to shares of Common Stock covered by any Award until the
Participant becomes the record holder of such shares.

Article 14........Amendment, Modification, and Termination

14.1.....Amendment, Modification, and Termination. Subject to the terms
of the Plan, the Board may at any time and from time to time, alter, amend,
suspend or terminate the Plan in whole or in part. Notwithstanding the
foregoing, Section 18.4 of the Plan may not be amended following a "Change in
Control" or "Southern Termination" (as such terms are defined in the Change in
Control Benefit Plan Determination Policy).

14.2.....Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4.2 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan; provided that, unless the
Committee determines otherwise at the time such adjustment is considered, no
such adjustment shall be authorized to the extent that such authority would be
inconsistent with the Plan's meeting the requirements of Section 162(m) of the
Code, as from time to time amended.

14.3.....Awards Previously Granted. Notwithstanding any other provision
of the Plan to the contrary, no termination, amendment, or modification of the
Plan shall adversely affect in any material way any Award previously granted
under the Plan, without the written consent of the Participant holding such
Award, except any action needed to preserve pooling of interests accounting.

14.4.....Compliance with Code Section 162(m). At all times when Code
Section 162(m) is applicable, all Awards granted under this Plan shall comply
with the requirements of Code Section 162(m); provided, however, that in the
event the Board determines that such compliance is not desired with respect to
any Award or Awards available for grant under the Plan, and such determination
is communicated to the Committee, then compliance with Code Section 162(m) will
not be required. In addition, in the event that changes are made to Code Section
162(m) to permit greater flexibility with respect to any Award or Awards
available under the Plan, the Board or the Committee may, subject to this
Article 14, make any adjustments it deems appropriate.

Article 15........Withholding

15.1.....Tax Withholding. The Company shall have the power and the
right to deduct or withhold, or require a Participant to remit to the Company,
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.

15.2.....Share Withholding. With respect to withholding required upon
the exercise of Options or SARs, upon the lapse of restrictions on Restricted
Stock, or upon any other taxable event arising as a result of Awards granted
hereunder, Participants may elect, subject to the approval of the Committee, to
satisfy the withholding requirement, in whole or in part, by having the Company
withhold Shares having a Fair Market Value on the date the tax is to be
determined equal to the minimum statutory total tax which could be imposed on
the transaction. All such elections shall be irrevocable, made in writing,
signed by the Participant, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.

Article 16........Indemnification

Each person who is or shall have been a member of the Committee, or of
the Board, shall be indemnified and held harmless by the Company against and
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, action, suit, or proceeding to which he or she may be a party or in which
he or she may be involved by reason of any action taken or failure to act under
the Plan and against and from any and all amounts paid by him or her in
settlement thereof, with the Company's approval, or paid by him or her in
satisfaction of any judgment in any such action, suit, or proceeding against him
or her, provided he or she shall give the Company an opportunity, at its own
expense, to handle and defend the same before he or she undertakes to handle and
defend it on his or her own behalf. The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Company's Certificate of Incorporation of Bylaws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.

Article 17........Successors

All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

Article 18........General Provisions

18.1.....Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.

18.2. Severability. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included, provided
that the remaining provisions shall be construed in a manner necessary to
accomplish the intentions of the Company upon execution of the Plan.

18.3. Requirements of Law. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

18.4. Change in Control. 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 Company or a Subsidiary, the funding of the Trust and the benefits
to be provided hereunder in the event of such a change in control. Any
modifications to the Change in Control Benefit Plan Determination Policy are
likewise incorporated herein.

18.5.....Delivery of Title. The Company shall have no obligation to
issue or deliver evidence of title for Shares under the Plan prior to:

(a) Obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable; and

(b) Completion of any registration or other qualification of the
Shares under any applicable national or foreign law or ruling
of any governmental body that the Company determines to be
necessary or advisable.

18.6.....Securities Law Compliance. With respect to Insiders,
transactions under this Plan are intended to comply with all applicable
conditions or Rule 16b-3 or its successors under the 1934 Act. To the extent any
provision of the plan or action by the Board or Committee fails to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Board or Committee.

18.7.....No Additional Rights. Nothing in the Plan shall interfere with
or limit in any way the right of the Company to terminate any Participant's
employment at any time, or confer upon any Participant any right to continue in
the employ of the Company.

No Employee or Director shall have the right to be selected to receive
an Award under this Plan or having been so selected, to be selected to receive a
future Award.

Neither the Award nor any benefits arising under this Plan shall
constitute part of a Participant's employment contract with the Company or any
Affiliate, and accordingly, this Plan and the benefits hereunder may be
terminated at any time in the sole and exclusive discretion of the Committee
without giving rise to liability on the part of the Company or any Affiliate for
severance payments.

18.8.....No Effect on Other Benefits. This receipt of Awards under the
Plan shall have no effect on any benefits and obligations to which a Participant
may be entitled from the Company or any Affiliate, under another plan or
otherwise, or preclude a Participant from receiving any such benefits.

18.9.....Employees Based Outside of the United States. Notwithstanding
any provision of the Plan to the contrary, in order to comply with provisions of
laws in other countries in which the Company and its Subsidiaries operate or
have Employees, the Board or the Committee, in their sole discretion, shall have
the power and authority to:

(a) Determine which Employees employed outside the United States
are eligible to participate in the Plan;

(b) Modify the terms and conditions of any Award granted to
Employees who are employed outside the United States; and

(c) Establish subplans, modified exercise procedures, and other
terms and procedures to the extent such actions may be
necessary or advisable. Any subplans and modifications to Plan
terms and procedures established under this Section 18.9 by
the Board or the Committee shall be attached to this Plan
document as Appendices.

18.10....Shareholder Approval. Notwithstanding anything in the Plan to
the contrary, the ISO portion of this Plan shall be effective only if approved
by the shareholders of the Company (excluding a Subsidiary) within 12 months
before or after the date the Plan is adopted. If not so approved, any Options
which were designated as ISOs hereunder shall be automatically be converted to
NQSOs.

18.11....Governing Law. To the extent not preempted by federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with and
governed by the laws of the State of Delaware.

SOUTHERN COMPANY

By:_____________________________________
H. Allen Franklin
President and Chief Executive Officer

ATTEST:

By:_________________________________
Tommy Chisholm
Secretary