Exhibit 10(a)79

                               FIRST AMENDMENT TO
                              THE SOUTHERN COMPANY
                                  PENSION PLAN

         WHEREAS, the Board of Directors of Southern Company Services, Inc. (the
"Company") heretofore adopted The Southern Company Pension Plan, as amended and
restated (the "Plan"), effective January 1, 1997; and

         WHEREAS, the Company wishes to amend the Plan to merge the Employees'
Retirement Plan of Savannah Electric and Power Company as amended and restated
effective January 1, 1997 and to make other miscellaneous and technical changes;
and

         WHEREAS, the Company is authorized pursuant to Section 13.1 of the Plan
to amend the Plan at any time.

         NOW, THEREFORE, effective January 1, 1998, the Company hereby amends
the Plan as follows:

                                       1.

         Section 1.1 is amended by deleting it in its entirety and replacing it
with the following:

                  "Accrued Retirement Income" means with respect to any Employee
                  at any particular date, the Retirement Income, determined
                  pursuant to Section 5.1 as may be modified by Article XV or
                  XVII, commencing on his Normal Retirement Date which would be
                  payable to such Employee in the form of a single life annuity
                  on the basis of his Accredited Service to the date as of which
                  the computation of Retirement Income is made.

                                       2.

         Section 1.16 is amended by adding to the end thereof the following:

                  Notwithstanding the preceding, "Employee" shall not mean any
                  person who is classified by an Employing Company as an
                  independent contractor or a temporary employee (unless such
                  temporary employee is grandfathered pursuant to Section 2.6 of
                  the Plan and 3.07 of the SEPCO Plan) regardless of whether
                  such classification is in error.

                                       3.

         Section 4.2(e) is amended by deleting it in its entirety and replacing
it with the following:

                  Notwithstanding the above, the maximum number of years of
                  Accredited Service with respect to any Employee participating
                  in the Plan shall not exceed forty-three (43), except with
                  respect to Employees eligible under Section 15.1 whose
                  Accredited Service shall not be limited to any maximum number
                  where their benefit is calculated under Section 15.2.

                                       4.

         Section 4.4 shall be amended by adding the following new paragraph to
the end thereof:

                           (f) Notwithstanding any other provisions of this
                  Section 4.4, any Employee who (1) has an initial date of
                  disability on or after January 1, 1998, and (2) is not covered
                  by the terms of a collective bargaining agreement or (3) is
                  covered by the terms of a collective bargaining agreement but
                  where the bargaining unit representative and an Employing
                  Company have mutually agreed to this provision, shall be
                  ineligible for a Disability Leave under this Section 4.4 or
                  such Employee's Disability Leave shall terminate if the
                  Employee has already become eligible if such Employee accepts
                  a benefit under an Employing Company's "career transition
                  plan" or such other severance plan or agreement where such
                  other plan or agreement stipulates that the Employee is
                  ineligible or ceases to be on Disability Leave under this
                  Plan.

                                       5.

         The second paragraph of Section 5.2 is amended by deleting it in its
entirety and replacing it with the following:

                           Any provisions of this Article V to the contrary
                  notwithstanding, Retirement Income determined in accordance
                  with this Article V with respect to an Employee who retires on
                  his Normal Retirement Date or Deferred Retirement Date shall
                  not be less than the Retirement Income which would have been
                  payable with respect to such Employee commencing on an earlier
                  Retirement Date which would have resulted in the greatest
                  Retirement Income if such Retirement Income had been payable
                  in the same form as his Retirement Income commencing on his
                  Normal Retirement Date or Deferred Retirement Date.

                                       6.

         Section 6.1(c)(1) is amended by deleting it in its entirety and
replacing it with the following:

                           (1) Affiliated Employer contributions under Code
                  Section 402(g)(3) and any amount contributed by an Employing
                  Company on behalf of an Employer under any Code Section 125
                  and 457 arrangement prior to January 1, 1998 which are not
                  included in the Employee's gross income for the taxable year
                  in which contributed or Affiliated Employer contributions
                  under a simplified employee pension plan to the extent such
                  contributions are deductible by the Employee, or any
                  distributions from a plan of deferred compensation;

                                       7.

         The first sentence of Section 8.4(a) is deleted in its entirety and
replaced with the following:

                           (a) Notwithstanding any other provision of this Plan,
                  if the present value of Accrued Retirement Income of an
                  Employee whose service terminates for any reason other than
                  transfer to an Affiliated Employer or retirement under Article
                  III is not more than $3,500 for distributions prior to January
                  1, 1998 or is not more than $5,000 for distributions on or
                  after January 1, 1998 (or such greater amount as permitted by
                  the regulations prescribed by the Secretary of the Treasury),
                  the present value of the Employee's Accrued Retirement Income
                  shall be paid in a lump sum, in cash, to such terminated
                  Employee.

                                       8.

         Section 14.2 shall be amended to add to the end of the third paragraph
thereof the following:

                  In addition, the Retirement Board and Trustee shall permit
                  alienation, assignment or other attachment where otherwise
                  permitted under Code Section 401(a)(13).

                                       9.

         Section 15.2(d) shall be deleted in its entirety and replaced with the
following:

                           (a) Notwithstanding paragraphs (a) and (b) above,
                  Retirement Income determined with respect to an Employee who
                  retires on his Normal Retirement Date or Deferred Retirement
                  Date shall not be less than the Retirement Income which would
                  have been payable with respect to such Employee commencing on
                  his earlier Retirement Date had (1) the Employee retired on
                  his earlier Retirement Date which would have resulted in the
                  greatest Retirement Income and (2) such Retirement Income
                  commencing on such earlier Retirement Date been payable in the
                  same form as his Retirement Income commencing on his Normal
                  Retirement Date or Deferred Retirement Date.

                                       10.

         Section 16.1 shall be deleted in its entirety and replaced with the
following:

                                   Article XVI

                 Special Provisions Concerning Certain Employees
                            of Southern Energy, Inc.

                           16.1 Eligibility and Recognition of Service for
                  Former Employees.

                           (a) Former Scott Paper Company Employees. Effective
                  January 1, 1995, notwithstanding any other provision of the
                  Plan to the contrary, with respect to a former, non-collective
                  bargaining unit employee of Scott Paper Company who was
                  employed by Southern Electric International, Inc. as of
                  December 17, 1994 as set forth on Schedule 2.1 of the Employee
                  Transition Agreement entered into by and among Mobile Energy
                  Services Company, Inc., Southern Electric International, Inc.
                  and Scott Paper Company (hereinafter referred to in this
                  Section 16.1(a) as the "Scott Scheduled Employee"),

                                    (1) Such Scott Scheduled Employee shall be
                           eligible to participate in the Plan effective January
                           1, 1995.

                                    (2) Such Scott Scheduled Employee, if and
                           when he attains his Early Retirement Date, Normal
                           Retirement Date, or Deferred Retirement Date, or
                           terminates service for any other reason subject to
                           the requirements of Section 8.1 or 8.2, shall be
                           entitled to receive Retirement Income based on both
                           his Accredited Service with an Employing Company and
                           the service accrued under the Scott Paper Company
                           Pension Plan for Salaried Employees (the "Scott
                           Salaried Plan") which shall be treated as if
                           Accredited Service under this Plan. To calculate such
                           Scott Scheduled Employee's Retirement Income, the
                           Scott Scheduled Employee's Accrued Retirement Income,
                           as determined in accordance with Section 5.1, shall
                           first be reduced by the Employee's accrued benefit in
                           the Scott Salaried Plan, determined as if he retired
                           from Scott Paper Company at his normal retirement
                           age, as that term is defined in the Scott Salaried
                           Plan on December 17, 1994. Thereafter, such
                           Employee's Retirement Income shall be subject to
                           applicable reductions, if any, in accordance with
                           Article V, Section 8.1 and Section 8.2, as
                           appropriate.

                                    (3) For purposes of calculating such Scott
                           Scheduled Employee's Social Security Offset under
                           Section 5.4, the Social Security Offset shall be
                           determined by using the actual salary history of the
                           Scott Scheduled Employee during his employment with
                           any Affiliated Employer, and Scott Paper Company. If
                           the actual salary history is not available from Scott
                           Paper Company, such history shall be estimated in
                           accordance with Section 5.4.

                                    (4) For vesting purposes, such Scott
                           Scheduled Employee shall be entitled to receive
                           Vesting Years of Service as provided in Section 1.41
                           and, in addition, shall be entitled to vesting
                           service equal to the sum of the years of vesting
                           service accrued under each defined benefit pension
                           plan maintained by Scott Paper Company in which such
                           Scott Scheduled Employee participated.

                           (b) Former Commonwealth Edison of Indiana Employees.
                  Effective January 1, 1998, notwithstanding any other provision
                  of the Plan to the contrary, with respect to a former employee
                  of Commonwealth Edison of Indiana ("ComEd") who was employed
                  by Southern Energy, Inc. as set forth on a schedule of
                  employees acknowledged by the Retirement Board (hereinafter
                  referred to in this Section 16.1(b) as "ComEd Scheduled
                  Employee"),

                                    (1) Such ComEd Scheduled Employee shall be
                           eligible to participate in the Plan effective January
                           1, 1998.

                                    (2) Such ComEd Scheduled Employee, if and
                           when he attains his Early Retirement Date, Normal
                           Retirement Date, or Deferred Retirement Date, or
                           terminates service for any other reason subject to
                           the requirements of Section 8.1 or 8.2, shall be
                           entitled to receive Retirement Income based on both
                           his Accredited Service with an Employing Company and
                           the service accrued under the Commonwealth Edison
                           Company of Indiana Service Annuity System Plan (the
                           "ComEd Plan") which shall be treated as if Accredited
                           Service under this Plan. To calculate such ComEd
                           Scheduled Employee's Retirement Income, the ComEd
                           Scheduled Employee's Accrued Retirement Income, as
                           determined in accordance with Section 5.1, shall
                           first be reduced by the Employee's accrued benefit in
                           the ComEd Plan, determined as if he retired from
                           ComEd at his normal retirement age, as that term is
                           defined in the ComEd Plan on December 31, 1997.
                           Thereafter, such Employee's Retirement Income shall
                           be subject to applicable reductions, if any, in
                           accordance with Article V, Section 8.1 and Section
                           8.2, as appropriate.

                                    (3) For purposes of calculating such ComEd
                           Scheduled Employee's Social Security Offset under
                           Section 5.4, the Social Security Offset shall be
                           determined by using the actual salary history of the
                           ComEd Scheduled Employee during his employment with
                           any Affiliated Employer, and ComEd. If the actual
                           salary history is not available from ComEd, such
                           history shall be estimated in accordance with Section
                           5.4.

                                    (4) For vesting purposes, such ComEd
                           Scheduled Employee shall be entitled to receive
                           Vesting Years of Service as provided in Section 1.41
                           and, in addition, shall be entitled to vesting
                           service equal to the sum of the years of vesting
                           service accrued under the ComEd Plan.

                                                        11.

         The Plan shall be amended to add Article XVII as set forth below:

                                  Article XVII

                           17.1 Definition of Terms Used in this Article XVII
                  and the SEPCO Schedule.

                           (a) "SEPCO" shall mean Savannah Electric and Power
                  Company.

                           (b) "SEPCO Plan" shall mean the Employees' Retirement
                  Plan of Savannah Electric and Power Company, as amended and
                  restated January 1, 1997.

                           (c) "SEPCO Schedule" shall mean the Schedule attached
                  to the Plan and made apart thereof containing the provisions
                  of the SEPCO Plan as merged into the Plan effective January 1,
                  1998 which shall apply to SEPCO Employees and Covered SEPCO
                  Employees.

                           (d) "SEPCO Employee" shall mean an Employee as
                  defined in the SEPCO Plan having an Hour of Service under the
                  SEPCO Plan on or after January 1, 1997. This shall include
                  persons represented by a collective bargaining agent where
                  such agent and SEPCO have mutually agreed to participate in
                  the Plan. This shall not include employees who are hired or
                  rehired at SEPCO after December 31, 1997, rescind a waiver of
                  participation under Section 3.8 of the SEPCO Plan or SEPCO
                  Schedule on or after January 1, 1998 that was in effect on
                  December 31, 1997, or are Covered SEPCO Employees.

                           (e) "Covered SEPCO Employee" shall mean an Employee
                  as defined in the SEPCO Plan having an Hour of Service under
                  the Plan on or after January 1, 1998 who is represented by a
                  collective bargaining agent where such agent and SEPCO have
                  not mutually agreed to participate in the Plan but have agreed
                  to participate in the SEPCO Schedule.

                           17.2 Covered SEPCO Employees. On and after January 1,
                  1998, Covered SEPCO Employees shall be subject to and receive
                  an Allowance in accordance with the provisions set forth in
                  the SEPCO Schedule.

                           17.3 SEPCO Employees Eligibility in the New Pension
                  Program

                           (a) The following SEPCO Employees shall be subject to
                  this Section 17.3 of the Plan:

                                    (1) SEPCO Employees who are actively
                           employed by SEPCO on January 1, 1997 but who will not
                           attain their fortieth (40th) birthday on or before
                           January 1, 2002, or

                                    (2) SEPCO Employees who are not members of
                           an eligible class of SEPCO Employees on or after
                           January 1, 1997 and have not previously participated
                           in the SEPCO Plan.

                           (b) The monthly Retirement Income payable as a single
                  life annuity to a SEPCO Employee (or his Provisional Payee)
                  who retires from the service of SEPCO or another Employing
                  Company at his Normal Retirement Date or Deferred Retirement
                  Date (before adjustment for a Provisional Payee designation,
                  if any) after January 1, 1997, subject to the limitations in
                  Article VI, shall be the greater of (1) and (2) below:

                                    (1) 1.0% of his Average Monthly Earnings
                           multiplied by his years (and fraction of a year) of
                           Accredited Service, without application of the
                           limitation described in Section 4.2(e), to his Normal
                           Retirement Date or Deferred Retirement Date; or

                                    (2) $25 multiplied by his years (and
                           fraction of a year) of Accredited Service, without
                           application of the limitation described in Section
                           4.2(e), to his Normal Retirement Date or Deferred
                           Retirement Date.

                           (c) Notwithstanding paragraph (b) above, if the
                  Allowance of a SEPCO Employee determined under the SEPCO
                  Schedule as of the earlier of his retirement or termination of
                  employment with SEPCO or December 31, 2001 would be greater,
                  such SEPCO Employee shall be entitled when eligible to receive
                  payments such greater Allowance upon his retirement or
                  termination of employment with SEPCO or another Employing
                  Company.

                           (d) Notwithstanding paragraphs (b) and (c) above,
                  Retirement Income or Allowance, as the case may be, determined
                  with respect to a SEPCO Employee under this Article XVII who
                  retires on his Normal Retirement Date or Deferred Retirement
                  Date shall not be less than the Retirement Income or Allowance
                  which would have been payable with respect to such SEPCO
                  Employee commencing on his earlier Retirement Date had (1) the
                  SEPCO Employee retired on his earlier Retirement Date which
                  would have resulted in the greatest Retirement Income and (2)
                  such Retirement Income or Allowance commencing on such earlier
                  Retirement Date been payable in the same form as his
                  Retirement Income or Allowance commencing on his Normal
                  Retirement Date or Deferred Retirement Date.

                           (e) With respect to SEPCO Employees described in this
                  Section 17.1 who retire before their Normal Retirement Date,
                  the monthly amount of Retirement Income provided in paragraph
                  (b) above shall be reduced in accordance with Section 5.5.

                           17.4 SEPCO Employees Not Described in 17.2 or 17.3.
                  SEPCO Employees not described in Section 17.2 or 17.3 above
                  shall be eligible for a benefit under the Plan as described in
                  this Section 17.4 notwithstanding any other provision of the
                  Plan or SEPCO Schedule to the contrary.

                           (a) A SEPCO Employee shall be eligible to participate
                  in the Plan and receive Retirement Income thereunder as
                  determined under the Plan's terms and this Article XVII.
                  Notwithstanding the preceding sentence, if such SEPCO
                  Employee's Allowance determined as of the earlier of his
                  retirement or termination of employment with SEPCO or December
                  31, 2001 would be greater, such SEPCO Employee shall be
                  entitled when eligible to commence payments such greater
                  Allowance upon his retirement or termination of employment
                  with SEPCO or another Employing Company.

                           (b) Notwithstanding paragraph (a) above, only with
                  respect to SEPCO Employees who have attained age fifty (50)
                  and have ten (10) Years of Credited Service or who have
                  attained age 55 on or before January 1, 1997, such SEPCO
                  Employees shall be entitled to receive the greater of their
                  Allowance or Retirement Income upon retirement.

                           17.5 Special Transition Rules. Notwithstanding any
                  other provisions in the Plan to the contrary, SEPCO Employees
                  who participate in the Plan shall be subject to the following
                  transition rules.

                           (a) In determining the greater benefit as required
                  under Sections 17.3 and 17.4, the form of payment and any
                  early retirement reductions with respect to the payment of
                  Retirement Income as set forth in Articles V and VII of the
                  Plan and of an Allowance as set forth in Articles 5 and 7 of
                  the SEPCO Schedule shall be considered. For purposes of making
                  the preceding determination, (1) the applicable Allowance
                  shall first be converted to a monthly payment, and (2) the
                  Retirement Annuities described in Article 2 of the SEPCO
                  Schedule shall be taken into account consistent with Section
                  5.01 of the SEPCO Schedule.

                           (b) With respect to eligibility to participate in the
                  Plan, all SEPCO Employees employed by SEPCO on December 31,
                  1997 who are not already eligible to participate in the Plan
                  shall be immediately eligible to participate in the Plan.

                           (c) SEPCO Employees eligible to participate in the
                  SEPCO Plan on December 31, 1997 shall have their Vesting Year
                  of Service determined as if their anniversary date of hire is
                  January 1. All SEPCO Employees who participate in the Plan
                  shall be credited with Vesting Years of Service based upon the
                  terms of the Plan for periods of service on and after January
                  1, 1998, and based upon the Continuous Service such SEPCO
                  Employees accrued under the SEPCO Plan prior to January 1,
                  1998.

                           (d) (1) For periods of service on and after January
                           1, 1998, Accredited Service for SEPCO Employees shall
                           be determined in accordance with the Plan.

                                    (2) For periods of service on and after
                           January 1, 1998, with respect to any Allowance a
                           SEPCO Employee may be entitled to under the SEPCO
                           Schedule, such Allowance shall be determined using
                           Accredited Service in place of Credited Service.

                                    (3) For periods of service prior to January
                           1, 1998, the Credited Service of a SEPCO Employee
                           shall be used to determine such SEPCO Employee's
                           Allowance and Retirement Income accrued prior to
                           January 1, 1998.

                                    (4) When calculating a SEPCO Employee's
                           Retirement Income, the maximum amount of Accredited
                           Service and Credited Service that will be considered
                           is forty-three (43).

                           (e) For purposes of calculating Retirement Income for
                  a SEPCO Employee, Compensation determined under the SEPCO Plan
                  excluding unused accrued vacation shall be used in place of
                  Earnings for periods of service prior to January 1, 1998.

                           (f) The Normal Retirement Date of a SEPCO Employee
                  shall always be determined in accordance with the SEPCO Plan
                  prior to January 1, 1998 and the SEPCO Schedule on and after
                  January 1, 1998.

                           (g) (1) A SEPCO Employee may retire if he has either
                           attained age fifty-five (55) or attained age fifty
                           (50) and has at least ten (10) Years of Accredited
                           Service as determined under this Article XVII. A
                           SEPCO Employee who retires because he has attained
                           age fifty (50) and has ten (10) Years of Accredited
                           Service may not commence receipt of his Retirement
                           Income or Allowance until on or after January 1,
                           1998.

                                    (2) A SEPCO Employee that retires under
                           paragraph (1) above having at least ten (10) Years of
                           Accredited Service shall be entitled to the greater
                           of his (A) Retirement Income determined under Section
                           5.5 (excluding the third paragraph thereof) and this
                           Article XVII or (B) Allowance determined under this
                           Article XVII and in addition applying a reduction of
                           one-third of one percent ([GRAPHIC OMITTED]%) for
                           each calendar month by which the commencement date
                           precedes the first day of the month following any
                           such Employee's attainment of his fifty-fifth (55th)
                           birthday.

                                    (3) A SEPCO Employee that retires or
                           terminates under paragraph (1) above having less than
                           ten (10) Years of Accredited Service shall be
                           entitled to the greater of his (A) Retirement Income
                           determined under Section 8.2 (without regard to the
                           ten (10) Years of Accredited Service requirement) and
                           this Article XVII or (B) Allowance determined under
                           this Article XVII.

                           (h) On and after January 1, 1998, the Provisional
                  Payees of SEPCO Employees shall only be entitled to benefits
                  as provided in Article VII of the Plan.

                           (i) With respect to the accrual of Retirement Income
                  or an Allowance during a period of total disability, SEPCO
                  Employees incurring a disability on and after January 1, 1998
                  shall only be subject to the provisions of Section 4.4 of the
                  Plan.

                           (j) (1) The options for payment described in Sections
                  7.1(c) and (d) and Sections 7.6(c) and (d) may be elected by
                  SEPCO Employees who retire or terminate on or after January 1,
                  1998.

                                    (2) Notwithstanding Section 17.3, SEPCO
                           Employees who terminate or retire in 1997 and
                           commence receipt of an Allowance shall not be
                           eligible to change the form of benefit elected under
                           the SEPCO Plan even if such SEPCO Employees are
                           entitled to receive Retirement Income under this
                           Article XVII.

                                    (3) Notwithstanding Section 7.07(a)(Option
                           ii) of the SEPCO Schedule, SEPCO Employees shall not
                           be eligible to elect a 75% joint and survivor
                           annuity.

                           (k) SEPCO Employees may elect in accordance with the
                  SEPCO Schedule to have their benefit, whether paid as
                  Retirement Income or an Allowance, adjusted to take into
                  account their old-age insurance benefit under Title II of the
                  Social Security Act. In the event that a SEPCO Employee's
                  Retirement Income is greater than his Allowance under Section
                  17.3 or 17.4, the old age insurance benefit used to compute
                  such Retirement Income shall be used to determine the amount
                  payable under Section 5.04 of the SEPCO Schedule.

                           (l) Notwithstanding anything in this Article XVII to
                  the contrary, the Accrued Benefit of any SEPCO Employee shall
                  not be less than the Accrued Benefit such SEPCO Employee
                  derived under the SEPCO Plan as of the earlier of retirement,
                  termination or December 31, 1997.

                           17.6     Transfers of SEPCO Employees.

                           (a) With respect to a transfer of employment from an
                  Employing Company other than SEPCO to SEPCO, (1) occurring
                  prior to January 1, 1998, the person will be treated as a
                  SEPCO Employee under this Article XVII or (2) occurring on or
                  after January 1, 1998, the person will be treated as an
                  Employee under the terms of the Plan.

                           (b) With respect to a transfer of employment from
                  SEPCO to an Employing Company, (1) occurring prior to January
                  1, 1997, the person will be treated like an Employee under
                  Sections 4.6(a), (c) and (d) of the Plan provided that any
                  Retirement Income or Allowance payable to the Employee shall
                  be determined in accordance with Section 17.5(a), (g), (j) and
                  (k) or (2) occurring on or after January 1, 1997, the person
                  will be treated as a SEPCO Employee under this Article XVII.

                           17.7 Application of Plan to SEPCO Employees. To the
                  extent not inconsistent with the provisions of this Article
                  XVII, all the provisions of the Plan are applicable to SEPCO
                  Employees and Covered SEPCO Employees.

                                                        12.

         The Plan shall be amended to add the SEPCO Schedule as set forth below:

                                 SEPCO SCHEDULE
                            Effective January 1, 1998

                                TABLE OF CONTENTS


                                                                 Page No.

ARTICLE 1        DEFINITIONS..............................13

ARTICLE 2        RETIREMENT ANNUITIES PURCHASED
                 UNDER GROUP ANNUITY CONTRACT AND CHANGE
                 OF FUNDING...............................19

ARTICLE 3        MEMBERSHIP...............................19


<PAGE>



ARTICLE 4        SERVICE..................................21
         4.01    Continuous Service.......................21
         4.02    Credited Service.........................21
         4.03    Breaks in Service........................22
         4.04    Disabled Members.........................23
         4.05    Service with Certain Other
                 Employers................................24

ARTICLE 5        BENEFITS.................................24
         5.01    Normal and Late Retirement...............25
         5.02    Early Retirement.........................27
         5.03    Termination of Employment................27
         5.04    Adjustment of Retirement Allowance
                 for Social Security
                 Benefits.................................28
         5.05    Restoration of Retired Member or
                 Former Member to Service.................28
         5.06    Additional Monthly Benefit...............31
         5.07    Written Application......................33

ARTICLE 6        LIMITATIONS ON BENEFITS..................33
         6.01    Maximum Benefits.........................33

ARTICLE 7        DISTRIBUTION OF BENEFITS.................37
         7.01    Surviving Spouse Benefit.................37
         7.02    Qualified Joint and Survivor
                 Annuity..................................38
         7.03    Qualified Preretirement Survivor
                 Annuity..................................38
         7.04    Definitions..............................41
         7.05    Notice Requirements......................42
         7.06    Transitional Rules.......................43
         7.07    Alternative Forms of Distribution........43
         7.08    Cash-Out of Annuity Benefits.............45
         7.09    Commencement of Benefits.................46
         7.10    Requirement for Direct Rollovers.........46

ARTICLE 8        RETIREE MEDICAL BENEFITS.................46
         8.01    Definitions..............................46
         8.02    Medical benefits.........................50
         8.03    Termination of coverage..................50
         8.04    Contributions or Qualified
                 Transfers to fund medical benefits.......51
         8.05    Pensioned Employee Contributions.........52
         8.06    Amendment of Article 8...................52
         8.07    Termination of Article 8.................53
         8.08    Reversion of Assets upon
                 Termination..............................53

                           Effective January 1, 1998, the Employees' Retirement
                  Plan of Savannah Electric and Power Company, as amended and
                  restated effective January 1, 1997, (the "SEPCO Plan") is
                  merged into The Southern Company Pension Plan. The SEPCO Plan
                  as merged is now set forth as the "SEPCO Schedule" and
                  incorporated into The Southern Company Pension Plan. This
                  SEPCO Schedule must be read in conjunction with and is limited
                  by Article XVII of the Plan.

                                                  ARTICLE 1 - DEFINITIONS

                           The foregoing definitions will be applicable to the
                  provisions of this SEPCO Schedule only, unless otherwise
                  expressly indicated. Defined terms in this Schedule shall also
                  be set forth in Articles I and XVII of the Plan.

                  1.01     "Accrued Benefit" shall mean the amount of retirement
                           Allowance computed at a specific date, in accordance
                           with Article 5 of the SEPCO Schedule, based on
                           Compensation and Credited Service to such date.

                  1.02     "Affiliated Company" shall mean Affiliated Employer
                           as defined in the Plan.

                  1.03     "Allowance" shall mean payments made in accordance
                           with Article 5 and Article 7 of the SEPCO Schedule.

                  1.04     "Annuity Starting Date" shall mean the first day of
                           the first period for which an amount is paid as an
                           annuity or in any other form.

                  1.05     "Board of Directors" shall mean the Board of
                           Directors of Southern Company Services, Inc..

                  1.06     "Break in Service" shall mean a period which
                           constitutes a break in an Employee's Continuous
                           Service, as provided in Section 4.03 of the SEPCO
                           Schedule.

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

                  1.08     "Company" shall mean for purposes of this SEPCO
                           Schedule only Savannah Electric and Power Company or
                           any successor by merger, purchase or otherwise.

                  1.09     "Compensation" shall mean the actual remuneration
                           paid to an employee for services rendered to the
                           Company, determined prior to any pre-tax
                           contributions under a "qualified cash or deferred
                           arrangement" (as defined under Code ss. 401(k) and
                           its applicable regulations) or under a "cafeteria
                           plan" (as defined under Code ss. 125 and its
                           applicable regulations), including payments made
                           under any short term disability plan maintained by
                           the Company which shall equal the rate of
                           Compensation of the Member at the time of disability,
                           but excluding any bonuses, pay for overtime,
                           compensation deferred under any deferred compensation
                           plan or arrangement, separation pay, imputed income
                           and relocation pay, and excluding the Company's cost
                           for any public or private employee benefit plan,
                           including this Plan and SEPCO Schedule, under rules
                           uniformly applicable to all employees similarly
                           situated, provided further, effective as of January
                           1, 1989, any workers' compensation received by an
                           employee shall be excluded from "compensation" for
                           purposes of determining his benefit under the SEPCO
                           Schedule.

                           For purposes of this Section 1.09, actual
                           remuneration means regular straight time pay,
                           straight time differential pay, substitution straight
                           time pay, substitution flat rate pay, earned vacation
                           pay and the difference between military pay and
                           regular straight time pay a Member would have been
                           paid if such Member had been working for the Company.

                           Notwithstanding the foregoing, effective as of
                           January 1, 1989, compensation taken into account for
                           any purpose under the SEPCO Schedule shall not exceed
                           $200,000 per year, provided that the imposition of
                           the limit on compensation shall not reduce a Member's
                           Accrued Benefit below the amount of Accrued Benefit
                           determined as of December 31, 1988. As of January 1
                           of each calendar year on and after January 1, 1990,
                           the applicable limitation as determined by the
                           Commissioner of the Internal Revenue Service for that
                           calendar year shall become effective as the maximum
                           compensation to be taken into account for SEPCO
                           Schedule purposes for that calendar year in lieu of
                           the $200,000 limitation set forth in the preceding
                           sentence.

                           In addition to other applicable limitations set forth
                           in the SEPCO Schedule, and notwithstanding any other
                           provision of the SEPCO Schedule to the contrary, for
                           Plan Years beginning on or after January 1, 1994, the
                           annual compensation of each Employee taken into
                           account under the SEPCO Schedule shall not exceed the
                           Omnibus Budget Reconciliation Act of 1993 ("OBRA
                           '93") annual compensation limit. The OBRA '93 annual
                           compensation limit is $150,000, as adjusted by the
                           Commissioner for increases in the cost of living in
                           accordance with Code ss. 401(a) (17) (B). The cost of
                           living adjustment in effect for a calendar year
                           applies to any period, not exceeding 12 months, over
                           which compensation is determined (determination
                           period) beginning in such calendar year. If a
                           determination period consists of fewer than 12
                           months, the OBRA '93 annual compensation limit will
                           be multiplied by a fraction, the numerator of which
                           is the number of months in the determination period,
                           and the denominator of which is 12.

                           For Plan Years beginning on or after January 1, 1994,
                           any reference in this SEPCO Schedule to the
                           limitation under Code ss. 401(a) (17) shall mean the
                           OBRA '93 annual compensation limit set forth in this
                           provision.

                           If compensation for any prior determination period is
                           taken into account in determining an Employee's
                           benefits accruing in the current Plan Year, the
                           compensation for that prior determination period is
                           subject to the OBRA '93 annual compensation limit in
                           effect for that prior determination period. For this
                           purpose, for determination periods beginning on or
                           after January 1, 1994, the OBRA '93 annual
                           compensation limit is $150,000.

                  1.10     "Computation Year" shall mean the calendar year.

                  1.11     "Continuous Service" shall mean service recognized
                           for purposes of determining eligibility for
                           membership in the Plan and SEPCO Schedule and
                           eligibility for certain benefits under the SEPCO
                           Schedule, determined as provided in Section 4.01 of
                           the SEPCO Schedule.

                  1.12     "Credited Service" shall mean service recognized for
                           purposes of computing the amount of any benefit under
                           the SEPCO Schedule, determined as provided in Section
                           4.02 of the SEPCO Schedule.

                  1.13     "Effective Date of the SEPCO Plan" as amended, shall
                           mean April 1, 1959. The "Amendment and Restatement
                           Effective Date" shall mean January 1, 1997.

                  1.14     "Employee" shall mean any person regularly employed
                           by the Company who receives regular stated salary, or
                           wages paid directly by the Company as (a) a regular
                           full-time employee, (b) a regular part-time employee,
                           (c) a cooperative education employee or (d) a
                           temporary employee paid directly or indirectly by the
                           Company. Notwithstanding the preceding sentence, on
                           and after January 1, 1998, "Employee" shall be
                           limited to Covered SEPCO Employees as defined in
                           Article XVII of the Plan. For purposes of this
                           Section 1.14, temporary employee means a full-time or
                           part-time employee who provides services to the
                           Company for a stated period of time after which
                           period such employee will be terminated from
                           employment. The term Employee shall also include
                           Leased Employees within the meaning of Code ss.
                           414(n) (2). Notwithstanding the foregoing, if such
                           Leased Employees constitute less than twenty percent
                           (20%) of the Employer's non-highly compensated
                           workforce within the meaning of Code ss.
                           414(n)(5)(C)(ii), the term Employee shall not include
                           those Leased Employees covered under the SEPCO
                           Schedule described in Code ss. 414(n)(5). The term
                           Employee for participation purposes shall not include
                           any individual who is classified by the Company as an
                           independent contractor or temporary employee (unless
                           with respect to a temporary employee who is
                           grandfathered under this SEPCO Schedule) regardless
                           of whether such classification is in error.

                  1.15     "Equivalent Actuarial Value" shall mean equivalent
                           value when computed at 6 per centum per annum on the
                           basis of the 1971 Group Annuity Mortality Table
                           (Male) for Members, and 1971 Group Annuity Mortality
                           Table (Female) for contingent annuitants under
                           optional forms of Allowances.

                  1.16     "Fund" shall mean the "Trust" as defined in the Plan.

                  1.17     "Group Annuity Contract" shall mean Group Annuity
                           Contract No. AC 766 issued by The Equitable Life
                           Assurance Society of the United States to Savannah
                           Electric and Power Company.

                  1.18     "Hour of Service" means, with respect to any
                           applicable computation period:

                           (a)      each hour for which the Employee is paid or
                                    entitled to payment for the performance of
                                    duties for the Company or an Affiliated
                                    Company;

                           (b)      each hour for which an Employee is paid or
                                    entitled to payment by the Company or an
                                    Affiliated Company on account of a period
                                    during which no duties are performed,
                                    whether or not the employment relationship
                                    has terminated, due to vacation, holiday,
                                    illness, incapacity (including disability),
                                    layoff, jury duty, military duty or leave of
                                    absence, but not more than 501 hours for any
                                    single continuous period;

                           (c)      each hour for which back pay, irrespective
                                    of mitigation of damages, is either awarded
                                    or agreed to by the Company or an Affiliated
                                    Company, excluding any hour credited under
                                    (a) or (b), which shall be credited to the
                                    computation period or periods to which the
                                    award, agreement or payment pertains, rather
                                    than to the computation period in which the
                                    award, agreement or payment is made; and

                           (d)      solely for purposes of determining whether
                                    an Employee has incurred a Break in Service
                                    under the SEPCO Schedule, each hour for
                                    which an Employee would normally be credited
                                    under Paragraphs (a) or (b) above during a
                                    period of Parental Leave but not more than
                                    501 hours for any single continuous period.
                                    However, the number of hours credited to an
                                    Employee under this Paragraph (d) during the
                                    computation period in which the Parental
                                    Leave began, when added to the hours
                                    credited to an Employee under Paragraphs (a)
                                    through (c) above during that computation
                                    period, shall not exceed 501. If the number
                                    of hours credited under this Paragraph (d)
                                    for the computation period in which the
                                    Parental Leave began is zero, the provisions
                                    of this Paragraph (d) shall apply as though
                                    the Parental Leave began in the immediately
                                    following computation period.

                           No hours shall be credited on account of any period
                           during which the Employee performs no duties and
                           receives payment solely for the purpose of complying
                           with unemployment compensation, workers' compensation
                           or disability insurance laws. The Hours of Service
                           credited shall be determined as required by Title 29
                           of the Code of Federal Regulations, ss.ss.
                           2530.200b-2(b) and (c).

                  1.19     "Leased Employee" means any person as so defined in
                           Code ss. 414(n). In the case of a person who is a
                           Leased Employee immediately before or after a period
                           of service as an Employee, the entire period during
                           which he has performed services for the Company as a
                           Leased Employee shall be counted as Continuous
                           Service for purposes of determining eligibility for
                           participation and vesting, to the extent such service
                           would be recognized with respect to other employees
                           under the SEPCO Schedule; however, he shall not, by
                           reason of that status, be eligible to become a Member
                           of the Plan.

                  1.20     "Member" shall mean any person included in the
                           membership of the Plan pursuant to the SEPCO Schedule
                           as provided in Article 3 of the SEPCO Schedule.

                  1.21     "Normal Retirement Date" shall mean the first day of
                           the calendar month next following the 65th
                           anniversary of an Employee's birth.

                  1.22     "Parental Leave" means a period in which the Employee
                           is absent from work because of the pregnancy of the
                           Employee, the birth of a child of the Employee or the
                           placement of a child with the Employee in connection
                           with adoption proceedings, or for purposes of caring
                           for that child for a period beginning immediately
                           following such birth or placement.

                  1.23     "Plan" shall mean The Southern Company Pension Plan
                           as amended and restated January 1, 1997.

                  1.24     "Plan Year" shall mean the 12-month period from
                           January 1 to December 31.

                  1.25     "Qualified Joint and Survivor Annuity" shall mean an
                           annuity of Equivalent Actuarial Value to the
                           Allowance otherwise payable, providing for a reduced
                           Allowance payable to the Member during his life, and
                           after his death providing that one-half of that
                           reduced Allowance will continue to be paid during the
                           life of, and to, the spouse to whom he was married at
                           his Annuity Starting Date.

                  1.26     "Qualified Preretirement Survivor Annuity" shall mean
                           annuity for the life of a Surviving Spouse calculated
                           in accordance with Section 7.03 of the SEPCO
                           Schedule.

                  1.27     "Retirement Annuity" shall mean the amount of the
                           annuity purchased under the Group Annuity Contract as
                           provided by that Contract at actual retirement date,
                           at or after the attainment of age 65, prior to any
                           conversion to a contingent annuity.

                  1.28     "Retirement Committee" shall mean the Retirement
                           Board as defined in the Plan.

                  1.29     "Social Security Benefit" shall mean the annual
                           primary old-age insurance benefit which the Member is
                           entitled to receive under Title II of the Social
                           Security Act as in effect on the date he retires or
                           otherwise terminates employment, or would be entitled
                           to receive if he did not disqualify himself by
                           receiving the same by entering into covered
                           employment or otherwise. In the case of early
                           retirement, the Social Security Benefit shall be
                           computed on the assumption that he will receive no
                           income after early retirement and before age 65 which
                           would be treated as wages for purposes of the Social
                           Security Act. In the case of vested retirement, the
                           Social Security Benefit shall be computed on the
                           assumption that he will continue to receive
                           compensation until age 65 which would be treated as
                           wages for purposes of the Social Security Act at the
                           same rate as in effect on his termination of service.

                           In computing any Social Security Benefit, no wage
                           index adjustment or cost-of-living adjustment shall
                           be assumed with respect to any period after the end
                           of the calendar year before the year in which the
                           Member retires or terminates service. The Member's
                           Social Security Benefit shall be determined on the
                           basis of the Employee's actual earnings, where
                           available from Company records, in conjunction with a
                           salary increase assumption based on the actual yearly
                           change in national average wages as determined by the
                           Social Security Administration for all other years
                           prior to retirement or other termination of
                           employment with the Company where actual earnings are
                           not so available. If, within three months after the
                           later of the date of retirement or other termination
                           of employment or the date on which a Member is
                           notified of the Allowance to which he is entitled,
                           the Member provides documentation as to his actual
                           earnings history with respect to those prior years,
                           his Allowance shall be redetermined using the actual
                           earnings history, if the recalculation would result
                           in an increased benefit. Any adjustment to Allowance
                           payments shall be made retroactively.

                  1.30     The term "Spouse or Surviving Spouse" shall mean the
                           spouse or surviving spouse of a Member, provided that
                           a former Spouse will be treated as the spouse or
                           surviving spouse and a current spouse will not be
                           treated as the spouse or surviving spouse to the
                           extent provided under a qualified domestic relations
                           order as described in Code ss. 414(p).

                  1.31     "Suspendible Month" means a month in which the Member
                           completes at least 40 hours of service with the
                           Company.

                  1.32     "Trustee" shall mean the Trustee as defined in the
                           Plan.

                ARTICLE 2 - RETIREMENT ANNUITIES PURCHASED UNDER
                  GROUP ANNUITY CONTRACT AND CHANGE OF FUNDING

                           All Retirement Annuities payable under the SEPCO Plan
                  as in effect prior to April 1, 1959 with respect to service
                  thereunder prior to such date, have been purchased from The
                  Equitable Life Assurance Society of the United States pursuant
                  to the terms of Group Annuity Contract No. AC 766.

                           Effective as of April 1, 1959, the purchase of
                  Retirement Annuities under the Group Annuity Contract was
                  discontinued in accordance with the terms and provisions of
                  such Contract. Subject to the provisions of the SEPCO
                  Schedule, with respect to service under the SEPCO Plan from
                  and after April 1, 1959, and as a supplement to the Retirement
                  Annuities purchased under the Group Annuity Contract for
                  service prior to April 1, 1959, retirement Allowances will be
                  provided as described in the SEPCO Plan, this SEPCO Schedule
                  or the Plan, as the case may be. Such retirement Allowances or
                  Retirement Income will be in addition to Retirement Annuities
                  purchased as described in the preceding paragraph with respect
                  to services prior to April 1, 1959.

                           The rights of Members of the Retirement Annuities
                  purchased for them under the Group Annuity Contract with
                  respect to service prior to April 1, 1959 will not be
                  adversely affected by the discontinuance of such purchases and
                  such Retirement Annuities will be payable by The Equitable
                  Life Assurance Society of the United States in accordance with
                  the terms, conditions and provisions of the Group Annuity
                  Contract.

                                                   ARTICLE 3 - MEMBERSHIP

                  3.01     Every Employee in Company service on January 1, 1997,
                           who was a Member on December 31, 1996, shall continue
                           to be a Member of the SEPCO Plan or Plan, as the case
                           may be, on and after January 1, 1997, provided he
                           remains eligible under the terms of the SEPCO Plan or
                           SEPCO Schedule, as the case may be.

                  3.02     Subject to Article XVII of the Plan, every other
                           Employee on January 1, 1997, and every person
                           becoming an Employee after that date shall become a
                           Member of the SEPCO Plan or Plan, as the case may be,
                           on the first day of the calendar month, beginning
                           with January 1, 1997, coincident with or next
                           following (i) the date he completes one year of
                           Continuous Service or (ii) the 21st anniversary of
                           his birth, whichever is later. For this purpose, a
                           year of Continuous Service shall be a 12-month period
                           during which an Employee completes at least 1,000
                           hours commencing with the date of employment, or if
                           in such period he has not completed at least 1,000
                           hours, commencing with the first day of the
                           Computation Year after the date of his employment. If
                           an Employee has incurred a one-year Break in Service
                           prior to becoming eligible for membership, any
                           Continuous Service prior to the break shall be
                           disregarded in determining eligibility for membership
                           unless he shall complete at least one year of
                           Continuous Service following the Break in Service;
                           provided that an Employee's Continuous Service prior
                           to the break shall not be recognized for purposes of
                           determining his eligibility for membership if his
                           consecutive number of one-year Breaks in Service
                           equal or exceed the greater of (i) five or (ii) his
                           aggregate years of Continuous Service prior to the
                           Break in Service.

                  3.03     An Employee who is represented by a collective
                           bargaining agent may participate in the Plan and
                           SEPCO Schedule if the representative(s) of his
                           bargaining unit and the Company mutually agree to
                           participation in the Plan and SEPCO Schedule provided
                           such participation is consistent with such agreement.

                  3.04     An Employee's membership in the Plan shall terminate
                           only if he dies or his employment with the Company
                           terminates other than by reason of retirement or
                           termination with vested benefits. Membership shall be
                           continued during a period while on leave of absence
                           from service without pay approved by the Company, but
                           no benefit credit shall be allowed with respect to
                           such period unless credit is allowed for service in
                           the Armed Forces of the United States as provided in
                           Section 4.03(c) of the SEPCO Schedule. Membership
                           shall be continued during a period of disability for
                           which Continuous Service is granted as provided in
                           Section 4.04 of the SEPCO Schedule.

                  3.05     In the event a Member ceases to participate because
                           he enters an ineligible class under Article III and
                           becomes ineligible to participate, but has not
                           incurred a break in service under Section 4.03(a) of
                           the SEPCO Schedule, such Employee will participate as
                           of the first day of the month coinciding with or next
                           following his return to an eligible class of
                           Employees. If such Employee incurs a break in service
                           under Section 4.03(a) of the SEPCO Schedule,
                           eligibility will be determined under Section 3.02 of
                           the SEPCO Schedule. In the event an Employee who is
                           not in an eligible class to participate enters an
                           eligible class, such Employee will participate as of
                           the first day of the month coinciding with or next
                           following his employment if he has satisfied Section
                           3.02 of the SEPCO Schedule and would have otherwise
                           previously been eligible to participate in the Plan
                           pursuant to the SEPCO Schedule.

                  3.06     Subject to Section 3.05 of the SEPCO Schedule, if an
                           Employee's membership in the Plan terminates and he
                           again becomes an Employee, he shall be considered a
                           new Employee for all purposes of the Plan, except as
                           provided in Section 5.05 of the SEPCO Schedule.

                  3.07     Notwithstanding any other provision of this Article
                           3, Leased Employees shall not be eligible to
                           participate. In addition, temporary employees as
                           defined in Section 1.14 of the SEPCO Schedule who
                           were not participating in the SEPCO Plan as temporary
                           employees prior to October 13, 1994, shall not be
                           eligible to participate in the Plan.

                  3.08     An Employee may, subject to the approval of the
                           Retirement Committee, elect voluntarily not to
                           participate in the Plan. The election not to
                           participate must be communicated in writing and
                           acknowledged by the Retirement Committee (or its
                           delegee) and shall be effective on the date set forth
                           in such written waiver.

                                                    ARTICLE 4 - SERVICE

                  4.01     Continuous Service

                           (a)      Effective January 1, 1997, except as
                                    hereinafter provided, all service performed
                                    as an Employee of the Company or an
                                    Affiliated Company shall be Continuous
                                    Service for SEPCO Plan and SEPCO Schedule
                                    purposes. If an Employee completes at least
                                    1,000 Hours of Service in any Computation
                                    Year, he shall receive credit for a full
                                    year of Continuous Service. If an Employee
                                    completes fewer than 1,000 Hours of Service
                                    in any Computation Year, no Continuous
                                    Service shall be recognized for such
                                    Computation Year.

                           (b)      Any person employed by the Company on
                                    December 31, 1996 shall receive Continuous
                                    Service for service performed before that
                                    date equal to the Credited Service
                                    recognized through December 31, 1996 under
                                    the SEPCO Plan.

                  4.02     Credited Service

                           (a)      Credited Service shall be calculated based
                                    on Periods of Service.

                                    A "Period of Service" shall mean twelve (12)
                                    month periods of employment as a Member, or
                                    fractions thereof, running from the date
                                    that a Member commences participation under
                                    the SEPCO Plan or SEPCO Schedule, as the
                                    case may be, and terminates on his first
                                    severance from service date. A severance
                                    from service shall occur as of the earlier
                                    of the date a Member quits, retires, is
                                    discharged or dies, or the first anniversary
                                    of absence for any other reason. Thereafter,
                                    subject to 4.03(b), if a Member becomes
                                    reemployed, his Period of Service for each
                                    subsequent period shall commence with the
                                    reemployment commencement date, which is the
                                    first date following a one year period of
                                    severance on which a Member performs an Hour
                                    of Service and shall terminate on his next
                                    severance from service.

                                    In the case of an Employee who transfers
                                    from a class of employees whose service is
                                    determined on the basis of Hours of Service
                                    to a class of employees whose service is
                                    determined under this Paragraph (a), such
                                    Employee shall receive credit for a Period
                                    of Service consisting of (i) a number of
                                    years equal to the number of years of
                                    service credited to the Employee before the
                                    computation period during which the transfer
                                    occurs and (ii) the greater of (1) the
                                    Period of Service that would be credited to
                                    the Employee under this Paragraph (a) during
                                    the entire computation period in which the
                                    transfer occurs or (2) the service taken
                                    into account under the Hours of Service
                                    method as of the date of the transfer.

                                    In addition, the Employee shall receive
                                    credit for Periods of Service subsequent to
                                    the transfer commencing on the day after the
                                    last day of the computation period in which
                                    the transfer occurs.

                                    In the case of an Employee who transfers
                                    from a class of employees whose service is
                                    determined pursuant to this Paragraph (a) to
                                    a class of employees whose service is
                                    determined on the basis of Hours of Service
                                    (i) the Employee shall receive credit, as of
                                    the date of transfer, for the numbers of
                                    Years of Service equal to the number of one
                                    year Periods of Service credited to the
                                    Employee as of the date of the transfer and
                                    (ii) the Employee shall receive credit in
                                    the computation period which includes the
                                    date of the transfer, for a number of Hours
                                    of Service determined by applying the
                                    equivalency set forth in 29 C.F.R. ss.
                                    2530.200b-3(e)(l)(i) to any fractional part
                                    of a year credited to the Employee under
                                    this Section as of the date of the transfer.

                  4.03     Breaks in Service

                           (a)      There shall be a Break in Service of one
                                    year for any Computation Year after the year
                                    in which a person first becomes employed
                                    during which he does not complete more than
                                    500 Hours of Service. If an Employee
                                    terminates his service with the Company and
                                    is reemployed after incurring a Break in
                                    Service, his service before the Break in
                                    Service shall be excluded from his
                                    Continuous Service, except as provided in
                                    Section 5.05 of the SEPCO Schedule.

                           (b)      For purposes of calculating Credited Service
                                    only, there shall be a one year Period of
                                    Severance if during the 12 consecutive month
                                    period after a severance from service date,
                                    as defined in Section 4.02(a) of the SEPCO
                                    Schedule the Employee fails to perform an
                                    Hour of Service. If an Employee terminates
                                    his service with the Company and is
                                    reemployed after incurring a one year Period
                                    of Severance, his service before the Period
                                    of Severance shall be excluded unless he
                                    thereafter completes a one year Period of
                                    Service. In the case of a non-vested member,
                                    the Period of Service accrued prior to a one
                                    year Period of Severance shall not be taken
                                    into account if at such time the consecutive
                                    Period of Severance equals or exceeds the
                                    greater of 5 or the number of one year
                                    Periods of Service, whether or not
                                    consecutive.

                           (c)      Notwithstanding any provision of the SEPCO
                                    Schedule to the contrary, contributions,
                                    benefits and service credit with respect to
                                    qualified military service will be provided
                                    in accordance with Code ss. 414(u).

                  4.04     Disabled Members

                           If a Member is eligible for and continuously
                  receiving disability benefits under the long-term disability
                  plan provided by the Company, he shall continue to be a Member
                  and shall continue to accrue service until he retires in the
                  same amount and manner as though he had continued in the
                  active employment of the Company and he shall be deemed to
                  receive Compensation during such period based upon his rate of
                  Compensation at the time of disability. In the event that a
                  Member no longer qualifies for benefits under the long-term
                  disability plan before his Normal Retirement Date and he does
                  not resume active employment with the Company, he shall be
                  eligible to receive a vested retirement Allowance as provided
                  in Section 5.03 of the SEPCO Schedule or to retire on an early
                  retirement Allowance as provided in Section 5.02 of the SEPCO
                  Schedule, if otherwise eligible for such Allowance as of the
                  date of such disqualification. In either case, the Allowance
                  shall be computed on the basis of his Compensation and
                  Credited Service at the date of such disqualification. In the
                  event that a Member does not qualify for disability benefits
                  under the Social Security Act, the Allowance accrued under
                  Section 5.01(c)(i)(A) of the SEPCO Schedule for purposes of
                  this Section 4.04 for Credited Service during such period of
                  nonqualification shall be increased by 5/6 per centum of the
                  part of each year's Compensation which is not in excess of
                  $3,600 per annum.

                  4.05     Service with Certain Other Employers

                           (a)      An Employee hired prior to November 9, 1989,
                                    who becomes a Member and continues as a
                                    Member without a break in membership, shall
                                    receive Continuous Service and Credited
                                    Service for all service not otherwise
                                    recognized, in the employ of another
                                    electric utility company or a company or
                                    corporation furnishing advisory or
                                    consulting service to the Company, provided
                                    that such service would be recognized if it
                                    had been rendered to the Company and
                                    provided that any benefit payable under the
                                    Plan on account of such service, so
                                    recognized, shall be reduced by the amount
                                    of benefit provided under the pension or
                                    retirement plan of such other company with
                                    respect to the same period. The Retirement
                                    Committee shall calculate such service based
                                    on actual employment records where
                                    available, but if such records are not
                                    available, the Retirement Committee shall
                                    request that the Employee obtain information
                                    from the Social Security Administration
                                    which documents the Employee's Social
                                    Security eligible compensation or from such
                                    other entity as the Retirement Committee
                                    deems appropriate. Based on such documents,
                                    the Retirement Committee shall calculate the
                                    Employee's service and Compensation for
                                    purposes of this Section 4.05. In the event
                                    no such documentation can be obtained, the
                                    Retirement Committee shall make its best
                                    effort to estimate such service and
                                    Compensation.

                           (b)      An Employee hired on or after November 9,
                                    1989, who becomes a Member and continues as
                                    a Member without a break in membership,
                                    shall receive Continuous Service and
                                    Credited Service for all service not
                                    otherwise recognized, in the employ of an
                                    Affiliated Company, provided that such
                                    service would be recognized if it had been
                                    rendered to the Company and provided that
                                    any benefit payable under the Plan on
                                    account of such service, so recognized shall
                                    be reduced by the amount of benefit provided
                                    under the pension or retirement plan of such
                                    other Affiliated Company with respect to the
                                    same period.

                              ARTICLE 5 - BENEFITS

                  5.01     Normal and Late Retirement

                           (a)      The right of a Member to his normal
                                    retirement Allowance shall be
                                    non-forfeitable upon attaining age 65. A
                                    Member may retire from service on a normal
                                    retirement Allowance upon reaching his
                                    Normal Retirement Date or he may postpone
                                    his retirement and remain in service after
                                    his Normal Retirement Date. During any such
                                    deferment the Member shall be retired from
                                    service on a normal retirement Allowance on
                                    the first day of the calendar month next
                                    following receipt by the Retirement
                                    Committee of written application therefor
                                    made by the Member.

                           (b)      Subject to the provisions of Section 5.01(e)
                                    below, the annual normal retirement
                                    Allowance payable upon retirement on the
                                    Normal Retirement Date shall be computed
                                    pursuant to Paragraphs (c) and (d) below.
                                    The annual retirement Allowance payable upon
                                    retirement after a Member's Normal
                                    Retirement Date shall be equal to (i) the
                                    amount determined in accordance with
                                    Paragraphs (c) and (d) below, based on the
                                    Member's Credited Service and average annual
                                    Compensation as of his late retirement date
                                    or, if greater, (ii) the amount of Allowance
                                    to which the Member would have been entitled
                                    under Paragraphs (c) and (d) below as of his
                                    Normal Retirement Date increased by an
                                    amount of Equivalent Actuarial Value to the
                                    monthly payments which would have been
                                    payable with respect to each month during
                                    the postponement period which is not a
                                    Suspendible Month, with any such monthly
                                    payment amount determined as if the Member
                                    had retired as of the first day of the Plan
                                    Year during which payment would have been
                                    made or, if later, his Normal Retirement
                                    Date.

                           (c)      The normal retirement Allowance shall be
                                    computed as an annuity payable for the life
                                    of the Member and shall consist of:

                                    (i)     For service credited while a Member
                                            on or after April 1, 1969, an
                                            Allowance equal to 1-1/6 per centum
                                            of the part of each year's
                                            Compensation which is not in excess
                                            of $3,600 per annum plus 2 per
                                            centum of the part of such
                                            Compensation in excess of $3,600 per
                                            annum; and

                                    (ii)    For service credited between the
                                            effective date of the SEPCO Plan and
                                            March 31, 1969, an Allowance equal
                                            to 1 per centum of the part of each
                                            year's Compensation which is not in
                                            excess of $3,000 per annum plus 2
                                            per centum of the part of such
                                            Compensation in excess of $3,000 per
                                            annum; and

                                    (iii)    For service credited prior to the
                                             Effective Date of the SEPCO Plan,
                                             an Allowance which, when added to
                                             his Retirement Annuity, shall be
                                             equal to 1 per centum of the part
                                             of the Member's average annual
                                             Compensation for the three calendar
                                             years (1956, 1957 and 1958) which
                                             is not in excess of $3,000 plus 1
                                             1/2per centum of the part of such
                                             Compensation in excess of $3,000,
                                             multiplied by the number of years
                                             of his Credited Service to the
                                             Effective Date of the SEPCO Plan.

                           (d)      The benefit determined in Paragraph (c)
                                    above, when added to a Member's Retirement
                                    Annuity, if any, shall not be less than:

                                    (i)      1-2/3 per centum of his average
                                             annual Compensation, multiplied by
                                             his years of Credited Service not
                                             in excess of 36 years, reduced by

                                    (ii)     1 1/2 per centum of his primary
                                             Social Security Benefit multiplied
                                             by his years of Credited Service,
                                             the product not to exceed 50 per
                                             centum of his primary Social
                                             Security Benefit, where average
                                             annual Compensation is calculated
                                             during the 36 highest consecutive
                                             months within the 120 months
                                             preceding retirement.

                                    (iii)    Effective January 1, 1994 for
                                             purposes of determining a Member's
                                             average annual Compensation under
                                             this paragraph (d), the
                                             determination of the 36 highest
                                             consecutive months within the 120
                                             months preceding retirement shall
                                             only include those months in which
                                             the Member receives Compensation.

                           (e)      If the Member is married on his Annuity
                                    Starting Date and if he has not elected an
                                    optional form of benefit as provided in
                                    Section 7.07 of the SEPCO Schedule, the
                                    retirement Allowance shall be payable in the
                                    form of a Qualified Joint and Survivor
                                    Annuity.

                           (f)      Notwithstanding any other provision of the
                                    SEPCO Schedule, each Member's normal
                                    retirement Allowance is the greater of

                                    (i)      the sum of:

                                    (A)      the normal retirement Allowance
                                             determined under this Section 5.01
                                             as of December 31, 1993, plus

                                    (B)      the normal retirement Allowance
                                             determined under this Section 5.01
                                             based on Credited Service and
                                             Compensation after December 31,
                                             1993 (with Credited Service used in
                                             this paragraph (f) (i) (B) being
                                             added to the Credited Service used
                                             in paragraph (f) (i) (A) for
                                             purposes of determining whether
                                             paragraph (d) (i) 36-year limit and
                                             (d) (ii) 50 per centum offset limit
                                             have been exceeded); or

                                    (ii)    the normal retirement Allowance
                                            determined under this Section 5.01
                                            as applied to all Credited Service
                                            and Compensation.

                  5.02     Early Retirement

                           (a)      A Member who has not reached his Normal
                                    Retirement Date but who has reached the 55th
                                    anniversary of his birth shall be retired
                                    from service on an early retirement
                                    Allowance on the first day of the calendar
                                    month next following receipt by the
                                    Retirement Committee of written application
                                    thereof or made by the Member.

                           (b)      At the time of retirement the Member may
                                    elect to receive either (i) a deferred early
                                    retirement Allowance commencing on the
                                    Member's Normal Retirement Date which shall
                                    be computed as a normal retirement
                                    Allowance, in accordance with Section
                                    5.01(b) of the SEPCO Schedule, on the basis
                                    of his Compensation and Credited Service at
                                    the time of early retirement or (ii) an
                                    immediate early retirement Allowance
                                    beginning on the first day of any month
                                    before his Normal Retirement Date which
                                    shall be computed in accordance with
                                    Sections 5.01(c) and (d) of the SEPCO
                                    Schedule and shall be reduced by 1/12 of 5%
                                    for each month by which the date the
                                    Member's early retirement Allowance begins
                                    precedes age 62.

                           (c)      If the Member is married on the date his
                                    retirement Allowance commences, the early
                                    retirement Allowance shall be computed on
                                    the same basis as in Paragraph (b) above, in
                                    accordance with Section 5.01(e) of the SEPCO
                                    Schedule.

                  5.03     Termination of Employment

                           (a)      A Member shall be 100% vested in, and have a
                                    non-forfeitable right to, his Accrued
                                    Benefit upon completion of five years of
                                    Continuous Service since the first day of
                                    the Computation Period in which the 18th
                                    anniversary of his birth occurs. If the
                                    Member's employment with the Company is
                                    subsequently terminated for reasons other
                                    than retirement or death, he shall be
                                    eligible for a vested Allowance upon
                                    application therefor. If a Member's
                                    employment with the Company terminates
                                    before completion of five (5) years of
                                    Continuous Service or before becoming
                                    eligible for an early retirement or normal
                                    retirement Allowance, such Member's Accrued
                                    Benefit shall be forfeited upon termination
                                    of employment subject to restoration under
                                    Section 5.05 of the SEPCO Schedule.

                           (b)      The vested Allowance shall be a deferred
                                    Allowance commencing on the former Member's
                                    Normal Retirement Date and shall be
                                    determined by computing a normal retirement
                                    Allowance, in accordance with Section 5.01
                                    of the SEPCO Schedule, on the basis of his
                                    Compensation and Credited Service at his
                                    date of termination and the benefit formula
                                    in effect on that date.

                           (c)      Instead of deferring his Allowance to his
                                    Normal Retirement Date, the Member can elect
                                    to receive a reduced Allowance commencing on
                                    the first day of any month next following
                                    his attainment of age 55 but prior to his
                                    Normal Retirement Date. The reduction shall
                                    be 1/12 of 5% for each month by which his
                                    Annuity Starting Date precedes his Normal
                                    Retirement Date, provided that such
                                    reduction shall be made prior to the
                                    application of the maximum limitation
                                    provided under Article 6 of the SEPCO
                                    Schedule and such reduced Allowance shall be
                                    subject to such limitation.

                  5.04     Adjustment of Retirement Allowance for Social
                           Security Benefits

                           When an Allowance commences prior to the attainment
                  of age 65, the Member may elect to convert the Allowance
                  otherwise payable to him into an Allowance of Equivalent
                  Actuarial Value of such amount that, with his Retirement
                  Annuity, if any, and his old-age insurance benefit under Title
                  II of the Social Security Act, he will receive, so far as
                  possible, the same amount each year before and after such
                  benefit commences.

                  5.05     Restoration of Retired Member or Former Member to
                           Service

                           (a)      If a Member in receipt of an Allowance is
                                    restored to service as an Employee on or
                                    after his Normal Retirement Date, the
                                    following shall apply, except with respect
                                    to temporary employees:

                                    (i)      His Allowance shall be suspended
                                             for each month during the period of
                                             restoration which is a Suspendible
                                             Month.

                                    (ii)    Upon the death of the Member during
                                            the period of restoration, any
                                            Allowance that would have been
                                            payable to his surviving Spouse had
                                            he not been restored to service
                                            shall be payable or, alternatively,
                                            any payments under optional benefit,
                                            if one has been elected and becomes
                                            effective, shall begin.

                                    (iii)   Upon later retirement, payment of
                                            the Member's Allowance shall resume
                                            no later than, the third month after
                                            the latest Suspendible Month during
                                            the period of restoration, and shall
                                            be adjusted, if necessary, in
                                            compliance with Title 29 of the Code
                                            of Federal Regulations, ss.
                                            2530.203-3 in a consistent and
                                            nondiscriminatory manner.

                           (b)      If a Member in receipt of an Allowance is
                                    restored to service as an Employee before
                                    his Normal Retirement Date, the following
                                    shall apply, except with respect to
                                    temporary employees:

                                    (i)      His Allowance shall cease and any
                                             election of an optional benefit in
                                             effect shall be void.

                                    (ii)    Any Continuous and credited Service
                                            to which he was entitled when he
                                            retired or terminated service shall
                                            be restored to him.

                                    (iii)   Upon later retirement or
                                            termination, his Allowance shall be
                                            based on the benefit formula then in
                                            effect and his Compensation and
                                            Credited Service before and after
                                            the period when he was not in the
                                            service of the Company, reduced by
                                            an amount of Equivalent Actuarial
                                            Value to the benefits, if any, he
                                            received before the date of his
                                            restoration to service.

                                    (iv)    The part of the Member's Allowance
                                            upon later retirement payable with
                                            respect to Credited Service rendered
                                            before his previous retirement or
                                            termination of service shall never
                                            be less than the amount of his
                                            previous Allowance modified to
                                            reflect any option in effect on his
                                            later retirement.

                           (c)      If a Member not in receipt of an Allowance
                                    or a former Member is restored to service
                                    without having had a Break in Service, his
                                    Continuous Service shall be determined as
                                    provided in Section 4.01 of the SEPCO
                                    Schedule, and, if applicable, he shall again
                                    become a Member as of his date of
                                    restoration to service.

                           (d)      If a vested Member not in receipt of an
                                    Allowance or a former Member who received a
                                    lump sum settlement in lieu of his Allowance
                                    is restored to service with the Company
                                    after having had a Break in Service, the
                                    following shall apply:

                                    (i)     Upon completion of one year of
                                            Continuous Service following the
                                            Break in Service, the Continuous
                                            Service to which he was previously
                                            entitled shall be restored to him,
                                            and, if applicable, he shall again
                                            become a Member as of his date of
                                            restoration to service.

                                    (ii)     If a Member has received a
                                             distribution of his Allowance and
                                             the Member is restored to service
                                             with the Company, the Member shall
                                             have the right to restore his or
                                             her Accrued Benefit to the extent
                                             forfeited upon the repayment to the
                                             Plan of the full amount of the
                                             distribution plus interest,
                                             compounded annually from the date
                                             of distribution at the rate
                                             determined for purposes of Codess.
                                             411(c)(2)(C). Such repayment must
                                             be made before the earlier of five
                                             (5) years after the first date on
                                             which the Member is subsequently
                                             reemployed by the Company, or the
                                             date the Member incurs five (5)
                                             consecutive one year Breaks in
                                             Service following the date of
                                             distribution.

                                            If a Member has been deemed to
                                            receive a distribution under the
                                            Plan, and the Member is restored to
                                            service with the Company, upon the
                                            reemployment of such Member, the
                                            Accrued Benefit will be restored to
                                            the amount of such Accrued Benefit
                                            on the date of deemed distribution.

                                    (iii)   Upon later termination or retirement
                                            of a Member whose previous Credited
                                            Service has been restored under this
                                            Paragraph (d), his Allowance shall
                                            be based on the benefit formula then
                                            in effect and his Compensation and
                                            Credited Service before and after
                                            the period when he was not in the
                                            service of the Company.

                           (e)      If any other former Member is restored to
                                    service with the Company after having had a
                                    Break in Service, the following shall apply:

                                    (i)     Upon completion of one year of
                                            Continuous Service following the
                                            Break in Service, he shall again
                                            become a Member as of his date of
                                            restoration to service.

                                    (ii)     Upon becoming a Member in
                                             accordance with (i) above, the
                                             Continuous Service to which he was
                                             previously entitled shall be
                                             restored to him, if the total
                                             number of consecutive one-year
                                             Breaks in Service does not equal or
                                             exceed the greater of (a) five, or
                                             (b) the total number of years of
                                             his Continuous Service before the
                                             Break in Service, determined at the
                                             time of the Break in Service,
                                             excluding any Continuous Service
                                             disregarded under this Paragraph
                                             (e) by reason of any earlier Break
                                             in Service.

                                    (iii)   Any Credited Service to which the
                                            Member was entitled at the time of
                                            his termination of service which is
                                            included in the Continuous Service
                                            so restored shall be restored to
                                            him.

                                    (iv)    Upon later termination or retirement
                                            of a Member whose previous Credited
                                            Service has been restored under this
                                            Paragraph (e), his Allowance, if
                                            any, shall be based on the benefit
                                            formula then in effect and his
                                            Compensation and Credited Service
                                            before and after the period when he
                                            was not in the service the Company.

                  5.06     Additional Monthly Benefit

                           (a)      In addition to other benefits provided in
                                    this Article 5, the following monthly
                                    benefits are payable as a life annuity to
                                    eligible Members as defined in Paragraph (b)
                                    or (c) below, as applicable.

                                    The "additional monthly amount" is
                                    calculated as (i) a percentage of the
                                    Member's first $300 of monthly Allowance set
                                    forth below, multiplied by (ii) the number
                                    of years the Member was retired (A) prior to
                                    January 1, 1990, and (B) prior to January 1,
                                    1995 but after January 1, 1990, as
                                    applicable in any event, for both the
                                    additional monthly amount effective June 1,
                                    1991 and June 1, 1996, the minimum
                                    additional monthly amount to be added to a
                                    Member's Allowance shall equal $25.00 per
                                    month.

                                    Effective June 1, 1991, the percentage
                                    increases and the years of retirement for
                                    which they are applicable are as follows:

                                                             Percentage
                  Years of                                  Increase for
                 Retirement                                all Prior Years
 as of 1/1/90
                Less than 5                                     3.75%
                  5 to 10                                       4.0%
                  10 to 15                                      4.5%
                 15 or more                                     5.0%

   Effective June 1, 1996, the percentage
   increases and the years of retirement for
   which they are applicable are as follows:

                                                             Percentage
                                                            Increase for
                  Years of                                  Each Year of
                 Retirement                                  Retirement
                as of 1/1/95                                Since 1/1/90
                Less than 5                                     3.5%
                   5 to 9                                       4.0%
                  10 to 14                                      4.5%
                 15 or more                                     5.0%

                           (b)      Members eligible for the additional monthly
                                    amount made effective as of June 1, 1991 are
                                    those retired Members who retired directly
                                    from active status on or before June 1,
                                    1991.

                           (c)      Members eligible for the additional monthly
                                    amount made effective June 1, 1996 are those
                                    Members who retired directly from active
                                    status before January 1, 1994.

                           (d)      If an adjustment of retirement Allowance for
                                    Social Security benefits option was elected
                                    pursuant to Section 5.04 of the SEPCO
                                    Schedule, the additional monthly benefit
                                    shall be calculated on the Allowance before
                                    such adjustment.

                           (e)      Upon the death of a Member eligible for an
                                    additional monthly amount, such amount shall
                                    be paid to the Member's Spouse regardless of
                                    the method of distribution elected by a
                                    Member. With regard to the additional
                                    monthly amount made effective June 1, 1996,
                                    it shall be determined (i) based on the
                                    Allowance being paid as of June 1, 1996, or
                                    (ii) if no allowance is being paid but the
                                    Member's Spouse is receiving an additional
                                    monthly amount in accordance with the
                                    preceding sentence, based on the amount such
                                    Spouse is receiving as of June 1, 1996.

                  5.07     Written Application

                           Each Member, before any benefit shall be payable to
                  him or his account under the Plan, shall file with the
                  Retirement Committee such information as it shall require to
                  establish his rights and benefits.

                       ARTICLE 6 - LIMITATIONS ON BENEFITS

                  6.01     Maximum Benefits

                           (a)      The maximum annual retirement Allowance
                                    payable to a Member under the SEPCO
                                    Schedule, when added to any retirement
                                    Allowance attributable to contributions of
                                    the Company or an Affiliated Company
                                    provided to the Member under any other
                                    qualified defined benefit plan, shall be
                                    equal to the lesser of (1) $90,000, as
                                    adjusted under Code Section 415(d), or (2)
                                    the Member's average annual remuneration
                                    during the three consecutive calendar years
                                    in his Credited Service as a Member
                                    affording the highest such average, or
                                    during all of the years in his Credited
                                    Service as a Member, if less than three
                                    years, subject to the following adjustments:

                                    (i)      If the Member has not been a Member
                                             under the SEPCO Plan and SEPCO
                                             Schedule for at least 10 years, the
                                             maximum annual retirement Allowance
                                             in clause (1) above shall be
                                             multiplied by the ratio which the
                                             number of years of his membership
                                             in the Plan bears to 10. This
                                             adjustment shall be applied
                                             separately to the amount of the
                                             Member's retirement Allowance
                                             resulting from each change in the
                                             benefit structure of the Plan, with
                                             the number of the years of
                                             membership in the Plan being
                                             measured from the effective date of
                                             each such change.

                                    (ii)    If the Member has not completed 10
                                            years of Continuous Service, the
                                            maximum annual retirement Allowance
                                            in clause (2) above shall be
                                            multiplied by the ratio which the
                                            number of years of his Continuous
                                            Service bears to 10.

                                    (iii)    If the retirement Allowance begins
                                             before the Member's social security
                                             retirement age (as defined below),
                                             but on or after his 62nd birthday,
                                             the maximum retirement Allowance in
                                             clause (1) above shall be reduced
                                             by 5/9 of 1% for each of the first
                                             36 months plus 5/12 of 1% for each
                                             additional month by which the
                                             Member is younger than the social
                                             security retirement age at the date
                                             his retirement Allowance begins. If
                                             the retirement Allowance begins
                                             before the Member's 62nd birthday,
                                             the maximum retirement Allowance in
                                             clause (1) above shall be of
                                             Equivalent Actuarial Value to the
                                             maximum benefit payable to age 62
                                             as determined in accordance with
                                             the preceding sentence.

                                    (iv)    If the retirement Allowance begins
                                            after the Member's social security
                                            retirement age (as defined below),
                                            the maximum retirement Allowance in
                                            clause (1) above shall be of
                                            Equivalent Actuarial Value, based on
                                            an interest rate of 5% per year in
                                            lieu of the interest rate otherwise
                                            used in the determination of
                                            Equivalent Actuarial Value, to that
                                            maximum benefit payable at the
                                            social security retirement age.

                                    (v)     If the Member's retirement Allowance
                                            is payable as a joint and survivor
                                            Allowance with his Spouse as the
                                            contingent annuitant, the
                                            modification of the retirement
                                            Allowance for that form of payment
                                            shall be made before the application
                                            of the maximum limitation, and, as
                                            so modified, shall be subject to the
                                            limitation.

                           (b)      As of January 1 of each calendar year on or
                                    after January 1, 1988, the dollar limitation
                                    as determined by the Commissioner of
                                    Internal Revenue for that calendar year
                                    shall become effective as the maximum
                                    permissible dollar amount of retirement
                                    Allowances payable under the Plan and SEPCO
                                    Schedule during that calendar year,
                                    including retirement Allowances payable to
                                    Members who retired prior to that calendar
                                    year, in lieu of the dollar amount in (1) of
                                    Paragraph (a) above.

                           (c)      For limitation years beginning before
                                    January 1, 2000, in the case of a Member who
                                    is also a Member of a defined contribution
                                    plan of the Company or an Affiliated
                                    Company, his maximum benefit limitation
                                    shall not exceed an adjusted limitation
                                    computed as follows:

                                    (i)      Determine the defined contribution
                                             fraction.

                                    (ii)     Subtract the result of (i) from
                                             1.0.

                                    (iii)    Multiply the dollar amount in (1)
                                             of Paragraph (a) above by 1.25.

                                    (iv)     Multiply the amount described in
                                             (2) of Paragraph (a) above by 1.4.

                                    (v)     Multiply the lesser of the result of
                                            (iii) or the result of (iv) by the
                                            result of (ii) to determine the
                                            adjusted maximum benefit limitation
                                            applicable to a Member.

                           (d)      For purposes of this Section:

                                    (i)     the defined contribution fraction
                                            for a Member who is a Member of one
                                            or more defined contribution plans
                                            of the Company or an Affiliated
                                            Company shall be a fraction the
                                            numerator of which is the sum of the
                                            following:

                                            (A)      the Company's and
                                                     Affiliated Companies'
                                                     contributions credited to
                                                     the Member's accounts under
                                                     the defined contribution
                                                     plan or plans.

                                            (B)      with respect to calendar
                                                     years beginning before
                                                     1987, the lesser of the
                                                     part of the Member's
                                                     contributions in excess of
                                                     6% of his Compensation or
                                                     one-half of his total
                                                     contributions to such plan
                                                     or plans, and with respect
                                                     to calendar years beginning
                                                     after 1986, all Member's
                                                     contributions to such plan
                                                     or plans, and

                                            (C)      any forfeitures allocated
                                                     to his accounts under such
                                                     plan or plans, but reduced
                                                     by any amount permitted by
                                                     regulations promulgated by
                                                     the Commissioner of
                                                     Internal Revenue; and the
                                                     denominator of which is the
                                                     lesser of the following
                                                     amounts determined for each
                                                     year of the Member's
                                                     Continuous Service.

                                            (D)      1.25   multiplied   by  the
                                                     maximum   dollar  amount
                                                     allowed by law for that
                                                     year; or

                                            (E)      1.4 multiplied by 25% of
                                                     the Member's remuneration
                                                     for that year.

                                                     At the direction of the
                                                     Retirement Committee, the
                                                     portion of the denominator
                                                     of that fraction with
                                                     respect to calendar years
                                                     before 1983 shall be
                                                     computed as the denominator
                                                     for 1982, as determined
                                                     under the law as then in
                                                     effect, multiplied by a
                                                     fraction of the numerator
                                                     of which is the lesser of:

                                            (F)      $51,875, or

                                            (G)      1.4  multiplied  by 25% of
                                                     the Member's  remuneration
                                                     for  1981;  and  the
                                                     denominator  of  which  is
                                                     the
                                   lesser of:

                                            (H)      $41,500, or

                                            (I)      25% of the Member's
                                                     remuneration for 1981;

                                    (ii)    a defined contribution plan means a
                                            pension plan which provides for an
                                            individual account for each Member
                                            and for benefits based solely upon
                                            the amount contributed to the
                                            Member's account, and any income,
                                            expenses, gains and losses, and any
                                            forfeitures of accounts of other
                                            Members which may be allocated to
                                            that Member's accounts, subject to
                                            (iii) below; and

                                    (iii)    a defined benefit plan means any
                                             pension plan which is not a defined
                                             contribution plan; however, in the
                                             case of a defined benefit which is
                                             based partly on the balance of the
                                             separate account of a Member, that
                                             plan shall be treated as a defined
                                             contribution plan to the extent
                                             benefits are based on the separate
                                             account of a Member and as a
                                             defined benefit plan with respect
                                             to remaining portion of the
                                             benefits under the plan.

                                    (iv)     the term "remuneration" with
                                             respect to any Member shall mean
                                             the wages, salaries and other
                                             amounts paid in respect of such
                                             Member by the Company or an
                                             Affiliated Company for personal
                                             services actually rendered, and
                                             shall include, but not by way of
                                             limitation, bonuses, overtime
                                             payments, commissions and, for
                                             limitation years beginning on and
                                             after January 1, 1998, any elective
                                             deferrals as defined in Code
                                             Section 402(g)(3) and any amount
                                             contributed by an Employer on
                                             behalf of the Employee under any
                                             Code Section 125 or 457
                                             arrangement, and shall exclude
                                             other deferred compensation, stock
                                             options and other distributions
                                             which receive special tax benefits
                                             under the Code; and

                                    (v)     the term "social security retirement
                                            age" shall mean age 65 with respect
                                            to a Member who was born before
                                            January 1, 1938; age 66 with respect
                                            to a Member who was born after
                                            December 1, 1937 and before December
                                            1, 1955; and age 67 with respect to
                                            a Member who was born after December
                                            31, 1954.

                           (e)      Notwithstanding the preceding paragraphs of
                                    this Section, a Member's annual retirement
                                    Allowance payable under this SEPCO Schedule,
                                    prior to any reduction required by operation
                                    of Paragraph (c) above, shall in no event be
                                    less than:

                                    (i)     the benefit that the Member had
                                            accrued under the SEPCO Plan as of
                                            the end of the Plan Year beginning
                                            in 1982, with no changes in the
                                            terms and conditions of the SEPCO
                                            Plan on or after July 1, 1982 taken
                                            into account in determining that
                                            benefit, or

                                    (ii)    the benefit that the Member had
                                            accrued under the SEPCO Plan as of
                                            the end of the Plan Year beginning
                                            in 1986, with no changes in the
                                            terms and conditions of the SEPCO
                                            Plan on or after May 5, 1986 taken
                                            into account in determining that
                                            benefit.

                           (f)      Notwithstanding any provisions contained
                                    herein to the contrary, in the event that,
                                    for limitation years beginning before
                                    January 1, 2000, a Member participates in a
                                    defined contribution plan or defined benefit
                                    plan required to be aggregated with this
                                    Plan under Code Section 415(g) and the
                                    combined benefits with respect to a Member
                                    exceed the limitations contained in Code
                                    Section 415(e), corrective adjustments shall
                                    be as provided under Article VI of the Plan.

                           (g)      Notwithstanding anything contained in this
                                    Article of the SEPCO Schedule to the
                                    contrary, the limitations, adjustments and
                                    other requirements prescribed in this
                                    Article shall at all times comply with the
                                    provisions of Code ss. 415 and the
                                    regulations thereunder, the terms of which
                                    are specifically incorporated herein by
                                    reference.

                      ARTICLE 7 - DISTRIBUTION OF BENEFITS

                  7.01     Surviving Spouse Benefit

                           On and after August 23, 1984, if a married Member:

                           (a)      dies in active service prior to his Annuity
                                    Starting Date after having met the
                                    requirements for an Allowance, or

                           (b)      dies after retiring on any Allowance or
                                    after terminating service on or after August
                                    23, 1984, with entitlement to a vested
                                    Allowance, but in either case before his
                                    Annuity Starting Date, or

                           (c)      dies after he is credited with at least one
                                    Hour of Service with the Company on or after
                                    August 23, 1984 but prior to his Annuity
                                    Starting Date, there shall be payable to his
                                    Surviving Spouse a Qualified Preretirement
                                    Survivor Annuity as provided in Section 7.03
                                    below.

                  7.02     Qualified Joint and Survivor Annuity

                           Provided an optional form of benefit as set forth in
                  Section 7.07 below is not elected pursuant to a Qualified
                  Election within the 90-day period ending on the Annuity
                  Starting Date, a married Member's Accrued Benefit will be paid
                  in the form of a Qualified Joint and Survivor Annuity and an
                  unmarried Member's Accrued Benefit will be paid in the form of
                  an annuity for his lifetime.

                  7.03     Qualified Preretirement Survivor Annuity

                           (a)      Provided that a Member and his or her Spouse
                                    have been married throughout the one-year
                                    period ending on his or her date of death
                                    and provided an optional form of benefit as
                                    set forth in Section 7.07 below has not been
                                    elected by a Member eligible to waive the
                                    Qualified Preretirement Survivor Annuity
                                    within the Election Period pursuant to a
                                    Qualified Election, if a Participant dies
                                    before the Annuity Starting Date, the
                                    Member's Accrued Benefit shall be payable as
                                    an annuity for the life of the Surviving
                                    Spouse in accordance with this Section 7.03.

                           (b)      The Qualified Preretirement Survivor Annuity
                                    shall commence on what would have been the
                                    Member's Normal Retirement Date or, on the
                                    first day of the month following the death
                                    of the Member, if later, and shall cease
                                    with the last monthly payment prior to the
                                    death of the Spouse. However:

                                    (i)     if the Member dies in active service
                                            after having met the requirements
                                            for early retirement, after having
                                            completed twenty years of service,
                                            or after retiring early but before
                                            payments commence, the Spouse may
                                            elect to begin receiving payments as
                                            of the first day of the month
                                            following the Member's date of
                                            death; and

                                    (ii)    in the case of the death of any
                                            other Member, the Spouse may elect
                                            to begin receiving payments as of
                                            the first day of any month following
                                            what would have been the Member's
                                            Earliest Retirement Age which is his
                                            55th birthday.

                           (c)      Before reduction in accordance with
                                    Paragraph (d) below, the Qualified
                                    Preretirement Survivor Annuity shall be
                                    equal to:

                                    (i)      in the case of a Member who dies
                                             while in active service after
                                             having met the requirements for
                                             early retirement, after having
                                             completed twenty years of service,
                                             or after retiring early but before
                                             payments commence, the following
                                             per centum of a normal retirement
                                             Allowance computed as provided in
                                             Section 5.01(c) and 5.01(d) of the
                                             SEPCO Schedule on the basis of the
                                             deceased Member's Compensation and
                                             Credited Service prior to his
                                             death, provided that if the Spouse
                                             was born more than 60 months after
                                             the deceased Member, the Qualified
                                             Preretirement Survivor Annuity so
                                             determined shall be reduced by 1/6
                                             of 1% for each month in excess of
                                             60 by which her date of birth
                                             followed the deceased Member's date
                                             of birth.

               Age Member
           Would Have Been
           At Commencement                     Per Centum

                40 to 45                            40%
                    46                              41%
                    47                              42%
                    48                              43%
                    49                              44%
                    50                              45%
                    51                              46%
                    52                              47%
                    53                              48%
                    54                              49%
                55 or over                          50%

                                    (ii)    in the case of any other Member, 50%
                                            of the amount of vested Allowance to
                                            which the Member would have been
                                            entitled at his Normal Retirement
                                            Date, reduced as follows:

                                    -        reduction for a 50% joint and
                                             survivor annuity option (based on
                                             the Member's age and his Spouse's
                                             age had the Member survived to the
                                             date benefits commence), and

                                    -        reduction to reflect early
                                             commencement, if applicable, of
                                             payments in accordance with Section
                                             5.03(c) of the SEPCO Schedule.

                                    (iii)    If within the 90 day period prior
                                             to his Annuity Starting Date a
                                             Member has elected Option (ii)
                                             under Section 7.07 below naming his
                                             spouse as contingent annuitant, the
                                             amount payable to his spouse under
                                             this Section 7.03 as a Qualified
                                             Preretirement Survivor Annuity
                                             shall be the amount that would have
                                             been payable to his spouse under
                                             Option (ii) if such amount is
                                             greater than the amount of the
                                             Qualified Preretirement Survivor
                                             Annuity otherwise payable under
                                             subparagraphs (c)(i) or (c)(ii)
                                             above, as applicable.

                           (d)      The Allowance subsequently payable to a
                                    Member whose Spouse would have been entitled
                                    to a Qualified Preretirement Survivor
                                    Annuity under this Section 7.03 had the
                                    Member's death occurred, or the Qualified
                                    Preretirement Survivor Annuity payable to
                                    his Spouse after his death, whichever is
                                    applicable, shall be reduced by the
                                    applicable percentage shown in the following
                                    table for the period, or periods, that the
                                    provisions of this Section 7.03 are in
                                    effect with respect to the Member. No such
                                    reduction shall be made with respect to:

                                    (i)      coverage during active employment,
                                             or

                                    (ii)     any period before the commencement
                                             of the election period specified in
                                             Paragraph (e) below.


<PAGE>



                Annual Reduction for Spouse's coverage
                 after Retirement or Other Termination
                              of Service
            Age                                      Reduction

         Under 35                                        0%
          35 -39                                     2/10 of 1%
          40 -49                                     3/10 of 1%
          50 -54                                     4/10 of 1%
          55 -59                                     5/10 of 1%
        60 and over                                      1%

                           (e)      The Retirement Committee shall furnish to
                                    each married Member within the one year
                                    period commencing on the date he terminates
                                    service a written explanation in
                                    non-technical language which describes (1)
                                    the terms and conditions of the Qualified
                                    Preretirement Survivor Annuity, (2) the
                                    Member's right to make, and the effect of,
                                    an election to waive the Qualified
                                    Preretirement Survivor Annuity, (3) the
                                    rights of the Member's Spouse and (4) the
                                    right to make, and the effect of, a
                                    revocation of such election.

                  7.04     Definitions

                           For purposes of this, Article 7, the following
definitions shall apply:

                           (a)      The term "Election Period" shall mean the
                                    period which begins on the first day of the
                                    Plan Year in which a Member attains age 35
                                    and ends on the date of the Member's death.
                                    If a Member separates from service prior to
                                    the first day of the Plan Year in which age
                                    35 is attained, with respect to the Accrued
                                    Benefit as of the date of separation, the
                                    Election Period shall begin on the date of
                                    separation.

                           (b)      The term "Earliest Retirement Age" shall
                                    mean the earliest date on which, under the
                                    SEPCO Schedule, the Member could elect to
                                    receive retirement benefits.

                           (c)      The term "Qualified Election" shall mean
                                    waiver of a Qualified Joint and Survivor
                                    Annuity or a Qualified Preretirement
                                    Survivor Annuity. Any waiver of a Qualified
                                    Joint and Survivor Annuity or a Qualified
                                    Preretirement Survivor Annuity shall not be
                                    effective unless: (a) the Member's Spouse
                                    consents in writing to the election; (b) the
                                    election designates a contingent annuitant,
                                    which may not be changed without spousal
                                    consent (or the Spouse expressly permits
                                    designations by the Participant without any
                                    further spousal consent); (c) the Spouse's
                                    consent acknowledges the effect of the
                                    election; and (d) the Spouse's consent is
                                    witnessed by a Plan representative
                                    designated by the Retirement Committee or
                                    notary public. Additionally, a Member's
                                    waiver of the Qualified Joint and Survivor
                                    Annuity shall not be effective unless the
                                    election designates a form of benefit
                                    payment which may not be changed without
                                    spousal consent (or the Spouse expressly
                                    permits designations by the Member without
                                    any further spousal consent). If it is
                                    established to the satisfaction of a the
                                    Retirement Committee that there is no Spouse
                                    or that the Spouse cannot be located, a
                                    waiver without spousal consent will be
                                    deemed a Qualified Election.

                                    Any consent by a Spouse obtained under this
                                    provision (or establishment that the consent
                                    of a Spouse may not be obtained) shall be
                                    effective only with respect to such Spouse.
                                    A consent that permits designations by the
                                    Member without any requirement of further
                                    consent by such Spouse must acknowledge that
                                    the Spouse has the right to limit consent to
                                    a specific Beneficiary, and a specific form
                                    of benefit where applicable, and that the
                                    Spouse voluntarily elects to relinquish both
                                    of such rights. A revocation of a prior
                                    waiver may be made by a Member without the
                                    consent of the Spouse at any time before the
                                    commencement of benefits. The number of
                                    revocations shall not be limited. No consent
                                    obtained under this provision shall be valid
                                    unless the Member has received notice as
                                    provided in Section 7.05 below.

                  7.05     Notice Requirements

                           (a)      In the case of a Qualified Joint and
                                    Survivor Annuity or a single life annuity,
                                    the Retirement Committee shall provide, no
                                    less than 30 days and no more than 90 days
                                    prior to the Annuity Starting Date, each
                                    Member with a written explanation of: (1)
                                    the terms and conditions of a Qualified
                                    Joint and Survivor Annuity or single life
                                    annuity; (2) the Member's right to make and
                                    the effect of an election to waive the
                                    Qualified Joint and Survivor Annuity or
                                    single life annuity form of benefit; (3) the
                                    rights of a Member's Spouse; and (4) the
                                    right to make, and the effect of, a
                                    revocation of a previous election to waive
                                    the Qualified Joint and Survivor Annuity or
                                    single life annuity.

                           (b)      In the case of a Qualified Preretirement
                                    Survivor Annuity, the Retirement Committee
                                    shall provide each Member within the
                                    applicable period for such Member a written
                                    explanation of the Qualified Preretirement
                                    Survivor Annuity in such terms and in such
                                    manner as would be comparable to the
                                    explanation provided for meeting the
                                    requirements of Paragraph (a) above
                                    applicable to a Qualified Joint and Survivor
                                    Annuity or a single life annuity.

                                    The applicable period for a Member is
                                    whichever of the following periods ends
                                    last: (1) the period beginning with the
                                    first day of the Plan Year in which the
                                    Member attains age 32 and ending with the
                                    close of the Plan Year preceding the Plan
                                    Year in which the Member attains age 35; (2)
                                    a reasonable period ending after the
                                    individual becomes a Member; (3) a
                                    reasonable period ending after the Member's
                                    Qualified Preretirement Survivor Annuity
                                    ceases to be fully subsidized; (4) a
                                    reasonable period ending after this Article
                                    first applies to the Member. Notwithstanding
                                    the foregoing, notice must be provided
                                    within a reasonable period ending after
                                    separation from service in the case of a
                                    Member who separates from service before
                                    attaining age 35.

                                    For purposes of applying the preceding
                                    paragraph, a reasonable period ending after
                                    the enumerated events described in (2), (3)
                                    and (4) is the end of the two-year period
                                    beginning one year prior to the date the
                                    applicable event occurs, and ending one year
                                    after that date. In the case of a Member who
                                    separates from service before the Plan Year
                                    in which age 35 is attained, notice shall be
                                    provided within the two-year period
                                    beginning one year prior to separation and
                                    ending one year after separation. If such a
                                    Member thereafter returns to employment with
                                    the employer, the applicable period for such
                                    Member shall be redetermined.

                  7.06     Transitional Rules

                           Any living Member not receiving benefits on August
                  23, 1984, who would otherwise not receive the benefits
                  prescribed by the previous Sections of this Article must be
                  given the opportunity to elect to have the prior Sections of
                  this Article apply if such Member is credited with at least
                  one Hour of Service under this SEPCO Schedule or SEPCO Plan in
                  a Plan Year beginning on or after January 1, 1976, and such
                  Member is entitled to a vested Allowance.

                  7.07     Alternative Forms of Distribution

                           (a)      Any Member may, subject to the election
                                    procedures applicable to Qualified Joint and
                                    Survivor Annuities and Qualified
                                    Preretirement Survivor Annuities, elect to
                                    convert his retirement Allowance into an
                                    optional benefit of Equivalent Actuarial
                                    Value determined as of the Annuity Starting
                                    Date, in accordance with one of the options
                                    named
                                    below:

                                    Option (i)  a  retirement  Allowance
                                                payable  for  the  Member's
                                                life, with no Allowance payable
                                                after his death; or

                                    Option (ii) a modified retirement
                                                Allowance payable during
                                                the Member's life with the
                                                provision that after his
                                                death either a 50%, 75% or
                                                a 100% joint and survivor
                                                annuity shall be paid
                                                during the life of, and to,
                                                the contingent annuitant
                                                nominated by him.

                           (b)      The election of an optional form of benefit
                                    shall become effective as follows:

                                    (i)     If the Member retired on his Normal
                                            Retirement Date, or if he retires on
                                            an early retirement Allowance or a
                                            vested retirement Allowance deferred
                                            to commence on his Normal Retirement
                                            Date, the election shall become
                                            effective on his Normal Retirement
                                            Date.

                                    (ii)    If the Member retires on an early
                                            retirement Allowance commencing
                                            prior to his Normal Retirement Date,
                                            the election shall become effective
                                            on the due date of the first monthly
                                            installment.

                                    (iii)    If the Member continues in service
                                             as an Employee after his Normal
                                             Retirement Date and the notice of
                                             his election is received by the
                                             Retirement Committee prior to his
                                             Normal Retirement Date, election
                                             shall become effective on his
                                             Normal Retirement Date, or if the
                                             notice of the election is received
                                             by the Retirement Committee after
                                             the Member's Normal Retirement
                                             Date, the election shall become
                                             effective on the date it is
                                             received by the Retirement
                                             Committee. In the event of the
                                             death of a Member in service as an
                                             Employee on or after his Normal
                                             Retirement Date and after his
                                             election has become effective,
                                             payments of the benefit under the
                                             option shall commence on the first
                                             day of the month next following the
                                             month of death if the contingent
                                             annuitant designated under the
                                             option is then living; or, upon the
                                             retirement of such a Member, the
                                             amount under the option shall be
                                             payable to the Member, but no
                                             payments shall commence or accrue
                                             to him until the date of
                                             retirement.

                  7.08     Cash-Out of Annuity Benefits

                           (a)      Although Allowances shall normally be
                                    payable in monthly installments, a lump sum
                                    payment of Equivalent Actuarial Value shall
                                    be made in lieu thereof if the present value
                                    of a Member's Allowance upon termination of
                                    employment is less than or equal to $3,500
                                    (and if the present value of such Member's
                                    Allowance never exceeded $3,500) for
                                    distributions before January 1, 1998, or if
                                    the present value of a Member's Allowance
                                    upon termination of employment is less than
                                    or equal to $5,000 (and if the present value
                                    of such Member's Allowance never exceeded
                                    $5,000) for distributions on or after
                                    January 1, 1998. The lump sum payment shall
                                    be made as soon as practicable on or after
                                    the date the Member terminates employment.
                                    Notwithstanding the foregoing, if the
                                    present value of the Member's vested
                                    Allowance is zero, the Member shall be
                                    deemed to have received a distribution of
                                    such Member's Accrued Benefit.

                           (b)      This Section 7.08(b) shall apply to all
                                    distributions from the Plan pursuant to the
                                    SEPCO Schedule and from annuity contracts
                                    purchased to provide benefits other than
                                    distributions described in Section
                                    1.417-1T(e)(3) of the income tax regulations
                                    issued under the Retirement Equity Act of
                                    1984. For purposes of determining whether
                                    the present value of (A) a Member's vested
                                    accrued benefit; (B) a qualified joint and
                                    survivor annuity, within the meaning of
                                    Section 417(b) of the Code; or (C) a
                                    qualified preretirement survivor annuity
                                    within the meaning of Section 417(c)(1) of
                                    the Code exceeds $3,500 for distributions
                                    before January 1, 1998, or $5,000 for
                                    distributions on or after January 1, 1998,
                                    the present value of such benefits or
                                    annuities shall be calculated by using an
                                    interest rate no greater than the Applicable
                                    Interest Rate and in no event shall the
                                    present value of any such benefit or annuity
                                    determined under this Section 7.08(b) be
                                    less than the present value of such benefits
                                    or annuities determined using the Applicable
                                    Interest Rate. "Applicable Interest Rate"
                                    for this purpose shall be calculated by
                                    using the annual rate of interest on 30-year
                                    Treasury securities for the month of
                                    November in the Plan Year which precedes the
                                    Plan Year in which such present value is
                                    determined and by using the prevailing
                                    commissioners' standard table used to
                                    determine reserves for group annuity
                                    contracts as in effect on the date as of
                                    which the present value is being determined.
                                    In no event shall the amount of any benefit
                                    or annuity determined under this Section
                                    7.08(b) exceed the maximum benefit permitted
                                    under Section 415 of the Code.

                  7.09     Commencement of Benefits

                           An Allowance under this SEPCO Schedule shall be paid
                  in accordance with Section 5.9 of the Plan.

                  7.10     Requirement for Direct Rollovers

                           An Allowance paid in a lump sum shall be subject to
Section 8.7 of the Plan.

                      ARTICLE 8 - RETIREE MEDICAL BENEFITS

                  8.01     Definitions.

                           The following words and phraseology as used herein
                  shall have the following meanings unless a different meaning
                  is plainly required by the context:

                           (a)      "Pensioned Employee" means effective
                                    September 15, 1993, a Member who retires and
                                    is receiving a distribution from the SEPCO
                                    Plan pursuant to Sections 5.01 and 5.02 of
                                    the SEPCO Schedule or a retired Member who
                                    is entitled to receive a distribution under
                                    the Plan pursuant to Sections 5.01 or 5.02
                                    of the SEPCO Schedule after retirement will
                                    be eligible for reimbursement or payment of
                                    covered medical expenses, as hereinafter
                                    described, provided the Member (1) was
                                    covered by the Georgia Power Company Medical
                                    Benefits Plan immediately before retirement;
                                    (2) is not eligible as a spouse or dependent
                                    or otherwise for coverage under the Georgia
                                    Power Company Medical Benefits Plan; and (3)
                                    continues to satisfy the eligibility
                                    requirements applicable to retired employees
                                    as set forth in the provisions of the
                                    Georgia Power Company Medical Benefits Plan,
                                    which is attached hereto as Exhibit A and
                                    incorporated herein by reference and may be
                                    changed in accordance with the terms of the
                                    Georgia Power Company Medical Benefits Plan.
                                    Notwithstanding the foregoing, a former
                                    employee who was a "key employee" as defined
                                    in the Plan on the date of his retirement
                                    shall not be eligible to receive any
                                    benefits under this Article 8.

                           (b)      "Dependents" means the spouses and
                                    dependents of retired Members who are
                                    eligible for reimbursement or payment of
                                    covered medical expenses pursuant to
                                    paragraph (a) and who were covered under the
                                    Georgia Power Company Medical Benefits Plan
                                    immediately prior to the Member's retirement
                                    are also eligible for reimbursement or
                                    payment of covered medical expenses to the
                                    extent, if any, provided in the Georgia
                                    Power Company Medical Benefits Plan, a copy
                                    of which is attached as Exhibit A.
                                    Notwithstanding the foregoing, a spouse or
                                    dependent who is eligible for coverage under
                                    the "active employee" portion of the Georgia
                                    Power Company Medical Benefits Plan shall
                                    not be eligible for reimbursement of medical
                                    expenses or payment of premiums hereunder.

                           (c)      "Qualified Transfer" means a transfer of
                                    Excess Pension Assets of the Plan to a
                                    Health Benefits Account after December 31,
                                    1990, but before December 31, 2000, which
                                    satisfies the requirements set forth in
                                    paragraphs (1) through (6) below.

                                    (1)      No more than 1 transfer per Plan
                                             Year may be treated as a Qualified
                                             Transfer.

                                    (2)      The amount of Excess Pension Assets
                                             which may be transferred in a
                                             Qualified Transfer shall not exceed
                                             a reasonable estimate of the amount
                                             the Company will pay (directly or
                                             through reimbursement) out of the
                                             Health Benefits Accounts for
                                             Qualified Current Retiree Health
                                             Liabilities during the Plan Year of
                                             the transfer.

                                    (3)(A)   Any assets transferred to a
                                             Health Benefits Account in a
                                             Qualified Transfer (and any income
                                             allocated thereto) shall only be
                                             used to pay Qualified Current
                                             Retiree Health Liabilities (whether
                                             directly or through reimbursement).

                                    (B)      Any assets transferred to a Health
                                             Benefits Account in a Qualified
                                             Transfer (and any income allocable
                                             thereto) which are not used as
                                             provided in Section 8.01(c)(3)(A)
                                             above shall be transferred from the
                                             Health Benefits Account back to the
                                             Plan.

                                    (C)      For purposes of this Section
                                             8.01(c)(3), any amount transferred
                                             from a Health Benefits Account
                                             shall be treated as paid first out
                                             of the assets and income described
                                             in Section 8.01(c) (3)(A) above.

                                    (4)     The Accrued Benefit of any Pensioned
                                            Employee or Dependent under the
                                            SEPCO Schedule shall become
                                            nonforfeitable in the same manner
                                            which would be required if the Plan
                                            had terminated immediately before
                                            the Qualified Transfer (or in the
                                            case of a Pensioned Employee who
                                            terminated service during the 1 year
                                            period ending on the date of the
                                            Qualified Transfer, immediately
                                            before such termination).

                                    (5)     Effective for Qualified Transfers
                                            occurring on or before December 8,
                                            1994, the Applicable Company Cost
                                            for each Plan Year during the Cost
                                            Maintenance Period shall not be less
                                            than the higher of the Applicable
                                            Company Cost for each of the two
                                            Plan Years immediately preceding the
                                            Plan Year of the Qualified Transfer.
                                            Effective for Qualified Transfers
                                            occurring after December 8, 1994,
                                            the medical benefits plan set forth
                                            in Exhibit A shall provide that the
                                            Applicable Health Benefits provided
                                            by the Company during each Plan Year
                                            during the Benefit Maintenance
                                            Period shall be substantially the
                                            same as the Applicable Health
                                            Benefits provided by the Company
                                            during the Plan Year immediately
                                            preceding the Plan Year of the
                                            Qualified Transfer. Notwithstanding
                                            any other provision to the contrary
                                            in this Section 8.01(c)(5), the
                                            Company may elect at any time during
                                            the Plan Year to have this Section
                                            8.01(c)(5) applied separately with
                                            respect to Pensioned Employees
                                            eligible for benefits under Title
                                            XVIII of the Social Security Act and
                                            with respect to Pensioned Employees
                                            which are not so eligible.

                                    (6)     For purposes of this Section
                                            8.01(c), the following words and
                                            phraseology shall have the following
                                            meanings unless a different meaning
                                            is plainly required by the context:

                                    (A)      "Applicable Company Cost" means,
                                             with respect to any Plan Year, the
                                             amount determined by dividing

                                    (i)      the Qualified Current Retiree
                                             Health Liabilities of the Company
                                             for such Plan Year determined (I)
                                             without regard to any reduction
                                             under Section 8.01(c)(6)(G), and
                                             (II) in the case of a Plan Year in
                                             which there was no Qualified
                                             Transfer in the same manner as if
                                             there had been such a transfer at
                                             the end of the Plan Year, by

                                    (ii)     the number of individuals to whom
                                             coverage for Applicable Health
                                             Benefits was provided during such
                                             Plan Year.

                                    (B)      "Applicable Health Benefits" means
                                             health benefits or coverage which
                                             are provided to Pensioned Employees
                                             who immediately before the
                                             Qualified Transfer are eligible to
                                             receive such benefits and their
                                             Dependents.

                                    (C)      "Benefit Maintenance Period" means
                                             the period of five (5) Plan Years
                                             beginning with the Plan Year in
                                             which the Qualified Transfers
                                             occurs.

                                    (D)      "Cost Maintenance Period" means the
                                             period of five (5) Plan Years
                                             beginning with the taxable year in
                                             which the Qualified Transfer
                                             occurs. If a Plan Year is in two
                                             (2) or more overlapping Cost
                                             Maintenance periods, this Section
                                             8.01(c)(6)(D) shall be applied by
                                             taking into account the highest
                                             Applicable Company Cost required to
                                             be provided under Section
                                             8.01(c)(6)(A) above for such Plan
                                             Year.

                                    (E)      "Excess Pension Assets" means the
                                             excess, if any, of

                                    (i)      the amount determined under Code
                                             Section 412(c)(7)(A)(ii), over

                                    (ii)     the greater of: (I) the amount
                                             determined under Code Section
                                             412(c)(7)(A)(i), or (II) 125
                                             percent of current liability (as
                                             defined in Code Section
                                             412(c)(7)(B)).

                                             The determination under
                                             this paragraph shall be
                                             made as of the most recent
                                             valuation date of the Plan
                                             preceding the Qualified
                                             Transfer.

                                    (F)      "Health Benefits Account" means an
                                             account established and maintained
                                             under Code Section 401(h).

                                    (G)      "Qualified Current Retiree Health
                                             Liabilities" means, with respect to
                                             any Plan Year, the aggregate
                                             amounts, including administrative
                                             expenses, which would have been
                                             allowable as a deduction to the
                                             Company for payment of Applicable
                                             Health Benefits provided during the
                                             Plan Year assuming such Applicable
                                             Health Benefits were provided
                                             directly by the Company and the
                                             Company used the cash receipts and
                                             disbursements method of accounting.
                                             For purposes of the preceding
                                             sentence, the rule of Code Section
                                             419(c)(3)(B) shall apply.

                                             Effective for Qualified
                                             Transfers occurring on or
                                             before December 8, 1994,
                                             the amount determined in
                                             the paragraph above shall
                                             be reduced by any amount
                                             previously contributed to a
                                             Health Benefits Account or
                                             welfare benefit fund, as
                                             defined in Code Section
                                             419(e)(1), to pay for the
                                             Qualified Current Retiree
                                             Health Liabilities.
                                             Effective for Qualified
                                             Transfers occurring after
                                             December 8, 1994, the
                                             amount determined under the
                                             preceding paragraph shall
                                             be reduced by the amount
                                             which bears the same ratio
                                             to such amount as the value
                                             (as of the close of the
                                             Plan Year preceding the
                                             year of the Qualified
                                             Transfer) of the assets in
                                             all Health Benefits
                                             Accounts or welfare benefit
                                             funds, as defined in Code
                                             Section 419(e)(1), set
                                             aside to pay the Qualified
                                             Current Retiree Health
                                             Liability, bears to the
                                             present value of the
                                             Qualified Current Retiree
                                             Health Liabilities for all
                                             Plan Years determined
                                             without regard to this
                                             paragraph.

                           (d)      "Georgia Power Medical Benefits Plan" means
                                    that Plan or any successor thereto.

                  8.02     Medical Benefits

                           Medical benefits under the Plan shall be provided
                  through the Georgia Power Company Medical Benefits Plan by the
                  payment of premiums thereunder, or through reimbursement to
                  the Company for its payment to Pensioned Employees or their
                  Dependents of medical expenses in accordance with the terms
                  and conditions of the Georgia Power Company Medical Benefits
                  Plan attached hereto as Exhibit A. Medical benefits shall be
                  provided under the Plan only to the extent there are
                  sufficient funds to provide such benefits. In no event shall
                  any benefits be paid under the Plan to the extent the same
                  benefits are payable under any other plan, program or
                  arrangement of the Company. The Retirement Committee may
                  establish claims procedures and administrative rules relating
                  to the provision of medical benefits hereunder to the extent
                  that the claims procedures and administrative rules under the
                  applicable group medical plan do not apply.

                  8.03     Termination of Coverage.

                           (a)      Coverage of any Pensioned Employee shall
                                    cease as follows:

                                    (1)      when this Article 8 is amended,
                                             terminated, or discontinued in
                                             accordance with its terms; or

                                    (2)      when the Pensioned Employee fails
                                             to make when due any required
                                             contribution; or

                                    (3)     as otherwise provided in Exhibit A.

                           (b)      Coverage of any Dependent shall cease as
                                    follows:

                                    (1)      when this Article 8 is amended,
                                             terminated, or discontinued in
                                             accordance with its terms; or

                                    (2)      when the Pensioned Employee fails
                                             to make when due any required
                                             contribution; or

                                    (3)     as otherwise provided in Exhibit A.

         8.04 Contributions or Qualified Transfers to Fund Medical Benefits.

                           (a)      Any contributions which the Company deems
                                    necessary to provide the medical benefits
                                    under Article 8 will be made from time to
                                    time by or on behalf of the Company, and
                                    contributions shall be required of the
                                    Pensioned Employees to the Company's medical
                                    benefit plan in amounts determined in the
                                    sole discretion of the Company from time to
                                    time. All Company contributions shall be
                                    made to the Trustee and shall be allocated
                                    to a separate account maintained solely to
                                    fund the medical benefits provided under
                                    this Article 8. The Company shall designate
                                    that portion of any contribution to the plan
                                    allocable to the funding of medical benefits
                                    under this Article 8. In the event that a
                                    Pensioned Employee's interest in an account,
                                    or his Dependents', maintained pursuant to
                                    this Article 8 is forfeited prior to
                                    termination of the plan, the forfeited
                                    amount shall be applied as soon as possible
                                    to reduce Company contributions made under
                                    this Article 8. In no event at any time
                                    prior to the satisfaction of all liabilities
                                    under this Article 8 shall any part of the
                                    corpus or income of such separate account be
                                    used for, or diverted to, purposes other
                                    than for the exclusive purpose of providing
                                    benefits under this Article 8.

                                    The amount of contributions to be made by or
                                    on behalf of the Company for any Plan Year,
                                    if any, shall be reasonable and
                                    ascertainable and shall be determined in
                                    accordance with any generally accepted
                                    actuarial method which is reasonable in view
                                    of the provisions and coverage of this
                                    Article 8, the funding medium, and any other
                                    applicable considerations. However, the
                                    Company is under no obligation to make any
                                    contributions under this Article 8 after
                                    Article 8 is terminated, except to fund
                                    claims for medical expenses incurred prior
                                    to the date of termination.

                                    The medical benefits provided under this
                                    Article 8, when added to any life insurance
                                    protection provided under the Plan, shall be
                                    subordinate to the retirement benefits
                                    provided under the Plan.

                                    Anything in the Plan and SEPCO Schedule to
                                    the contrary notwithstanding, the aggregate
                                    amount of the actual contributions made
                                    pursuant to this Article 8 may not exceed
                                    25% of the total actual contributions to the
                                    Plan for all benefits under the Plan
                                    (exclusive of contributions that may be made
                                    to fund past service credits) on and after
                                    September 15, 1993.

                           (b)      Effective September 15, 1993, the Company
                                    shall have the right, in its sole
                                    discretion, to make a Qualified Transfer of
                                    all or a portion of any Excess Pension
                                    Assets contributed to fund Retirement Income
                                    or Allowance under the Plan to the Health
                                    Benefits Accounts to fund medical benefits
                                    under this Article 8.

                  8.05     Pensioned Employee Contributions.

                           It shall be the sole responsibility of the Pensioned
                  Employee to notify the Company promptly in writing when a
                  change in the amount of the Pensioned Employee's contribution
                  is in order because a Dependent has become ineligible for
                  coverage under this Article 8. No person shall become covered
                  under this Article 8 for whom the Pensioned Employee has not
                  made the required contribution. Any contribution paid by a
                  Pensioned Employee for any person after such person shall have
                  become ineligible for coverage under this Article 8 shall be
                  returned upon written request but only provided such written
                  request by or on behalf of the Pensioned Employee is received
                  by the Company within ninety (90) days from the date coverage
                  terminates with respect to such ineligible person.

                  8.06     Amendment of Article 8.

                           The Board of Directors reserves the right to amend
                  Article 8 (including Exhibit A) without the consent of any
                  Pensioned Employee, or his Dependents, provided, however, that
                  no amendment of this Article or the Trust shall cancel the
                  payment or reimbursement of expenses for claims already
                  incurred by a Pensioned Employee or his Dependent prior to the
                  date of any amendment, nor shall any such amendment increase
                  the duties and obligations of the Trustee except with its
                  consent. This Article 8, as set forth in the SEPCO Schedule,
                  is not a contract and non-contributory benefits hereunder are
                  provided gratuitously, without consideration from any
                  Pensioned Employee or his Dependents. The Board of Directors
                  makes no promise to continue these benefits in the future and
                  rights to future benefits will never vest. In particular,
                  retirement or the fulfillment of the prerequisites for a
                  retirement benefit pursuant to the terms of the Plan and SEPCO
                  Schedule or under the terms of any other employee benefit plan
                  maintained by the Company shall not confer upon any Pensioned
                  Employee or Dependents any right to continued benefits under
                  this Article 8.

                  8.07     Termination of Article 8.

                           Although it is the intention of the Board of
                  Directors that this Article shall be continued and the
                  contribution shall be made regularly thereto each year, the
                  Board of Directors may terminate this Article 8 or permanently
                  discontinue contributions at any time in its sole discretion.
                  This Article 8, as set forth in the SEPCO Schedule, is not a
                  contract and non-contributory benefits hereunder are provided
                  gratuitously, without consideration from any Pensioned
                  Employee or his Dependents. The Board of Directors makes no
                  promise to continue these benefits in the future and rights to
                  future benefits will never vest. In particular, retirement or
                  the fulfillment of the prerequisites for a retirement benefit
                  pursuant to the terms of the SEPCO Schedule or under the terms
                  of any other employee benefit Plan maintained by the Company
                  shall not confer upon any Pensioned Employee or his Dependents
                  any right to continued benefits under this Article 8.

                  8.08 Reversion of Assets upon Termination. Upon the
                  termination of this Article 8 and the satisfaction of all
                  liabilities under this Article 8, all remaining assets in the
                  separate account described in this Article 8 shall be returned
                  to the Company in accordance with the terms of the Fund.


         IN WITNESS WHEREOF, Southern Company Services, Inc. through its duly
authorized officer, has adopted this First Amendment to The Southern Company
Pension Plan this ____ day of _________________, 1997, to be effective as stated
herein.



                                        SOUTHERN COMPANY SERVICES, INC.


                                        By: ____________________________

                                        Title:__________________________

ATTEST:


By:  _________________

Title:________________