Exhibit 10(e)21
                             FIRST AMENDMENT TO THE
                                  PENSION PLAN
                                FOR EMPLOYEES OF
                            MISSISSIPPI POWER COMPANY

         WHEREAS, the Board of Directors of Mississippi Power Company (the
"Company") heretofore adopted the amendment and restatement of the Pension Plan
for Employees of Mississippi Power Company (the "Plan") effective January 1,
1989 in order to comply with the Internal Revenue Code of 1986, as amended, (the
"Code") and to make other technical and clarifying changes; and

         WHEREAS, the Company wishes to amend the Plan to comply with certain
additional requirements imposed by the Internal Revenue Service and to make
certain other technical and miscellaneous corrections; 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, 1989, unless otherwise indicated,
the Company hereby amends the Plan as follows:

                                       I.

         Section 1.14(b) should be deleted in its entirety and replaced by the
following:

                           (b) Notwithstanding the above, "Earnings" with
                  respect to any commissioned salesperson means the salary or
                  wages of an Employee of the Employer or employee of any
                  Affiliated Employer within any Plan Year, without including
                  overtime, and before deductions for taxes, Social Security,
                  etc. but applying those adjustments identified in paragraphs
                  (a)(2), (3) and (4) above. In addition, "Earnings" for any
                  Employee who is a regular part-time employee means with regard
                  to paragraph (a)(1) above the highest annual rate of salary or
                  wages based on a forty (40) hour work week.

                                       II.

         Section 1.35 should be amended by deleting the first paragraph in its
entirety and replacing it with the following:

                  1.35 "Social Security Offset" shall mean an amount equal to
                  one-half (1/2) of the amount, if any, of the Federal primary
                  Social Security benefit (primary old age insurance benefit) to
                  which it is estimated that an Employee will become entitled in
                  accordance with the Social Security Act in force as provided
                  in subparagraphs (a) through (e) below which shall exceed $168
                  per month on and after January 1, 1989, and $250 per month, on
                  and after January 1, 1991, multiplied by a fraction not
                  greater than one, the numerator of which shall be the
                  Employee's total Accredited Service, and the denominator of
                  which shall be such total Accredited Service plus the
                  Accredited Service the Employee could have accumulated if he
                  had continued his employment from the date he terminates
                  service with his Employer or any Affiliated Employer until his
                  Normal Retirement Date. For purposes of determining the
                  estimated Federal primary Social Security benefit used in the
                  Social Security Offset, an Employee shall be deemed to be
                  entitled to receive Federal primary Social Security benefits
                  after retirement or death, if earlier, regardless of the fact
                  that he may have disqualified himself to receive payment
                  thereof. In addition to the foregoing, the calculation of the
                  Social Security benefit shall be based on the salary history
                  of the Employee as provided in Section 5.4(b) and shall be
                  determined pursuant to the following, as applicable:

                                      III.

         Section 2.6 should be deleted in its entirety and replaced by the
following:

                  2.6 Exclusion of certain categories of employees.
                  Notwithstanding any other provision of this Article II, leased
                  employees shall not be eligible to participate in the Plan. In
                  addition temporary employees, except Employees as defined in
                  Section 1.17 participating in the Plan prior to July 1, 1991,
                  shall not be eligible to participate in the Plan. Any person
                  who is employed by Electric City Merchandise Company, Inc. on
                  or after May 1, 1988, or who is employed by Savannah Electric
                  and Power Company on or after March 3, 1988, shall not be
                  entitled to accrue Retirement Income under the Plan while
                  employed at such companies.

                                       IV.

         Effective September 1, 1996, Section 5.4(a) should be deleted in its
entirety.

                                       V.

         Effective September 1, 1996, Section 5.4(b) should be deleted in its
entirety and a new Section 5.4 should be inserted as follows:

                  5.4 Calculation of Social Security Offset. For purposes of
                  determining the Social Security Offset in calculating an
                  Employee's Retirement Income under the Plan, the Social
                  Security Offset shall be determined by using the actual salary
                  history of the Employee during his employment with the
                  Employer or any Affiliated Employer, provided that in the
                  event that the Retirement Board is unable to secure such
                  actual salary history within 90 days (or such longer period as
                  may be prescribed by the Retirement Board) following the later
                  of the date of the Employee's separation from service (by
                  retirement or otherwise) and the time when the Employee is
                  notified of the Retirement Income to which he is entitled, the
                  salary history shall be determined in the following manner:

                                    (1) The salary history shall be estimated by
                           applying a salary scale, projected backwards, to the
                           Employee's compensation from the Employer for W-2
                           purposes for the first Plan Year following the most
                           recent Plan Year for which the salary history is
                           estimated. The salary scale shall be a level
                           percentage per year equal to six percent (6%) per
                           annum.

                                    (2) The Plan shall give clear written notice
                           to each Employee of the Employee's right to supply
                           the actual salary history and of the financial
                           consequences of failing to supply such history. Such
                           notice shall state that the actual salary history is
                           available from the Social Security Administration.

                           For purposes of determining the Social Security
                  Offset in calculating the Retirement Income of an Employee
                  entitled to receive a public pension based on his employment
                  with a Federal, state, or local government agency, no
                  reduction in such Employee's Social Security benefit resulting
                  from the receipt of a public pension shall be recognized.

                                       VI.

         Effective September 1, 1996, Section 5.4(c) should be deleted in its
entirety.

                                      VII.

         Section 5.9(a) should be deleted in its entirety and replaced by the
following:

                  5.9      Required distributions.

                           (a) Once a written claim for benefits is filed with
                  the Retirement Board, payment of benefits to the Employee
                  shall begin not later than sixty (60) days after the last day
                  of the Plan Year in which the latest of the following events
                  occurs:

                         (1) the Employee's Normal Retirement Date;

                         (2)  the  tenth  (10th)  anniversary  of the  date  the
                    Employee commenced participation in the Plan; or

                         (3) the  Employee's  separation  from  service from the
                    Employer or any Affiliated Employer.

                                      VIII.

         Section 5.9(d) should be deleted in its entirety and replaced by the
following:

                  (d)      Distribution upon death of Employee

                           (1) Death after commencement of benefits

                           If the Employee dies before his entire nonforfeitable
                  interest has been distributed to him, the remaining portion of
                  such interest shall be distributed at least as rapidly as
                  under the method of distribution selected by the Employee as
                  set forth in the provisions of Article VII.

                           (2) Death prior to commencement of benefits

                           If the Employee dies before the distribution of his
                  nonforfeitable interest has begun, the entire interest,
                  subject to the provisions of Article VII, shall be distributed
                  monthly to his Provisional Payee, if any, over such
                  Provisional Payee's remaining lifetime.

                                       IX.

         Effective January 1, 1996, Section 10.7 should be deleted in its
entirety and replaced by the following:

                  10.7 Accounts and tables. The Retirement Board shall maintain
                  accounts showing the fiscal transactions of the Plan, and
                  shall keep in convenient form such data as may be necessary
                  for actuarial valuations with respect to the operation and
                  administration of the Plan. The Retirement Board shall
                  annually report to the Board of Directors and provide a
                  reasonable summary of the financial condition of the Trust and
                  the operation of the Plan for the past year, and any further
                  information which the Board of Directors may require.

                           The Retirement Board may, with the advice of an
                  enrolled actuary, adopt from time to time mortality and other
                  tables as it may deem necessary or appropriate for use in
                  calculating benefits under the Plan.

                                       X.

         Section 10.9 should be deleted in its entirety and replaced by the
following:

                  10.9 Areas in which the Retirement Board does not have
                  responsibility. The Retirement Board shall not have
                  responsibility which respect to control or management of the
                  assets of the Plan. The Trustee or an insurance company, if
                  funds of the Plan shall be held by an insurance company, shall
                  have the sole responsibility for the administration of the
                  assets of the Plan as provided in the Trust Agreement or
                  contract with an insurance company, except to the extent that
                  an "Investment Manager," as that term is defined in ERISA,
                  appointed by the Board of Directors shall have responsibility
                  for the management of the assets of the Plan, or some part
                  thereof, including the power to acquire and dispose of the
                  assets of the Plan, or some part thereof.

                           The responsibility for providing a procedure for
                  establishing and carrying out a funding policy and method for
                  the Plan consistent with the objectives of the Plan and the
                  requirements of Title I of ERISA shall be that of the Board of
                  Directors or such committee, whether or not comprised of
                  members of the Board of Directors, as the Board of Directors
                  may from time to time designate and shall not be the
                  responsibility of the Retirement Board.

                           Effective July 28, 1993, the Pension Fund Investment
                  Review Committee of The Southern Company System shall
                  recommend for approval by the Board of Directors of Southern
                  Company Services, Inc. any Investment Manager that shall have
                  responsibility with respect to management of any Plan assets.
                  In addition, the Pension Fund Investment Review Committee
                  shall assume all responsibility for providing a procedure for
                  establishing and carrying out a funding policy and method for
                  the Plan consistent with the objectives of the Plan and the
                  requirements of Title I of ERISA.

                                       XI.

         Article XV should be deleted in its entirety and replaced by the
following:

                                   ARTICLE XV

                        Post-retirement Medical Benefits

                  15.1 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 a former Employee of the
         Employer who is eligible to receive Retirement Income after his
         retirement at his Early, Normal, or Deferred Retirement Date, as
         applicable, pursuant to the terms of the Plan, but shall not include
         any former Employee who terminated his service with the Employer prior
         to his Early, Normal, or Deferred Retirement Date and who is entitled
         to Retirement Income under the Plan. A "Pensioned Employee" shall not
         include a Key Employee, as defined in Section 14.6(g), or effective
         January 1, 1991, any Pensioned Employee of an employer that has adopted
         the Plan pursuant to Section 14.1 hereof but does not provide medical
         benefits to its Pensioned Employees.

                  (b) "Dependents" means the Pensioned Employee's spouse who is
         not legally separated from the Pensioned Employee and the Pensioned
         Employee's unmarried children (both natural and legally adopted) within
         the prescribed age limit set forth below. The term "children" includes
         stepchildren and foster children who reside with the Pensioned Employee
         in a regular parent-child relationship and are dependent upon the
         Pensioned Employee for principal support and maintenance. The term
         Dependent shall not include any person who is covered, or eligible for
         coverage, under the Plan as a Pensioned Employee or who is entitled to
         any benefits under any provisions of this Plan because of having been
         covered as a Pensioned Employee.

                  Children shall be considered to be within the prescribed age
         limit if they are less than nineteen (19) years of age. Unmarried
         children age nineteen (19) but less than age twenty-five (25) continue
         to be within the prescribed age limit if they are (1) dependent upon
         the Pensioned Employee for their support and maintenance, or (2)
         qualify as a dependent on the Pensioned Employee's tax return.
         Effective March 1, 1993, unmarried children age nineteen (19) but less
         than age twenty-five (25) continue to be within the prescribed age
         limit only if they are (1) dependent upon the Pensioned Employee for
         support and maintenance, and (2) regularly attending school on a
         full-time basis. For purposes of this Article XV, an unmarried child
         shall be considered to be regularly attending school on a full-time
         basis if such child is enrolled in and regularly attending a secondary
         school or an accredited vocational school, College or University (as
         defined in Exhibit A) and meets the minimum requirements of such
         school, College or University to maintain full-time status. This shall
         also include an unmarried child who is enrolled as a part-time student
         at one of the above institutions while such individual is taking a
         course load that is equivalent to the minimum course load required for
         full-time student status at such institution.

                  If both a husband and his wife are covered under this Plan as
         Pensioned Employees of the Employer, either, but not both, may elect to
         cover their eligible children as Dependents.

                  Any person covered or eligible for coverage under Article XV
         as a Pensioned Employee, or under any group medical plan maintained by
         the Employer as an Employee, shall not be considered as a Dependent.

                  (c) "Covered Individual" means a Pensioned Employee or
         Dependent of a Pensioned Employee who is eligible to receive medical
         benefits under Article XV.

                  (d) "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) (A) Except as provided in Section 15.1(d)(1)(B)
                  below, no more than 1 transfer per Plan Year may be treated as
                  a Qualified Transfer.

                                    (B) Subject to the provisions of Sections
                           15.1(d)(3), (4) and (5) below, a transfer shall be
                           treated as a Qualified Transfer if such transfer

                                            (i) is made after the close of the
                                    Plan Year preceding the Employer's first
                                    Plan Year beginning after December 31, 1990,
                                    and before the earlier of (I) the due date
                                    (including extensions) for the filing of the
                                    Employer's corporate tax return for such
                                    preceding Plan Year, or (II) the date such
                                    return is filed, and

                                            (ii) does not exceed the
                                    expenditures of the Employer for Qualified
                                    Current Retiree Health Liabilities for such
                                    preceding Plan Year.

                                            (iii) The reduction described in the
                                    second paragraph of Section 15.1(d)(6)(G)
                                    shall not apply to a transfer described in
                                    Section 15.1(d)(1)(A) above.

                           (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 Employer 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 15.1(d)(3)(A) above shall be
                           transferred from the Health Benefits Account back to
                           the Plan.

                                    (C) For purposes of this Section 15.1(d)(3),
                           any amount transferred from a Health Benefits Account
                           shall be treated as paid first out of the assets and
                           income described in Section 15.1(d)(3)(A) above.

                           (4) (A) The Accrued Retirement Income of any
                  Pensioned Employee or Dependent under the Plan 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).

                                    (B) In the case of a Qualified Transfer
                           described in Section 15.1(d)(1)(B), the requirements
                           of this Section 15.1(d)(4) are met with respect to
                           any Pensioned Employee who terminated service during
                           the Plan Year to which such Qualified Transfer
                           relates by recomputing such Pensioned Employee's
                           benefits as if Section 15.1(d)(4)(A) above had
                           applied immediately before such termination.

                           (5) Effective for Qualified Transfers occurring on or
                  before December 8, 1994, the Applicable Employer Cost for each
                  Plan Year during the Cost Maintenance Period shall not be less
                  than the higher of the Applicable Employer 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 Employer during each Plan Year
                  during the Benefit Maintenance Period shall be substantially
                  the same as the Applicable Health Benefits provided by the
                  Employer during the Plan Year immediately preceding the Plan
                  Year of the Qualified Transfer. Notwithstanding any other
                  provision to the contrary in this Section 15.1(d)(5), the
                  Employer may elect at any time during the Plan Year to have
                  this Section 15.1(d)(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 15.1(d), the
                  following words and phraseology shall have the following
                  meanings unless a different meaning is plainly required by the
                  context:

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

                                            (i) the Qualified Current Retiree
                                    Health Liabilities of the Employer for such
                                    Plan Year determined (I) without regard to
                                    any reduction under Section 15.1(d)(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 15.1(d)(6)(D) shall
                           be applied by taking into account the highest
                           Applicable Employer Cost required to be provided
                           under Section 15.1(d)(6)(A) 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 Employer for payment of Applicable
                           Health Benefits provided during the Plan Year
                           assuming such Applicable Health Benefits were
                           provided directly by the Employer and the Employer
                           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. The portion of any reserves
                           remaining as of the close of December 31, 1990 shall
                           be allocated on a pro rata basis to 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
                           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.

                  15.2  Eligibility of Pensioned Employees and their Dependents.

                  (a) A person who is a Pensioned Employee on January 1, 1989
         shall be eligible for coverage as a Pensioned Employee on January 1,
         1989, provided he was covered as an Employee under a group medical plan
         maintained by the Employer immediately prior to the time he became a
         Pensioned Employee.

                  (b) An Employee who becomes a Pensioned Employee on or after
         January 1, 1989 shall be eligible for coverage on the date he becomes a
         Pensioned Employee, provided he was covered as an Employee under a
         group medical plan maintained by the Employer immediately prior to the
         time he became a Pensioned Employee.

                  (c) A Dependent of a Pensioned Employee shall be eligible for
         coverage under this Plan on the later of (1) the date the Pensioned
         Employee becomes eligible for coverage hereunder and (2) the date such
         person becomes a Dependent, and (3) the date of payment by the
         Pensioned Employee of any required contributions with respect to a
         Dependent.

                  15.3 Medical benefits. The medical benefits provided under
         this Article XV by the Employer and each adopting Employer are set
         forth in the copy of each such Employer's medical benefits plan which
         is attached hereto as Exhibit A and specifically incorporated herein by
         reference in its entirety, as may be amended from time to time. Such
         medical benefits shall be subject without limitation to all
         deductibles, maximums, exclusions, coordination with Medicare and other
         medical plans, and procedures for submitting claims and initiating
         legal proceedings provided therein.

                  15.4     Termination of coverage.

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

                         (1)  when  Article  XV  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  Article  XV  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.

                  15.5     Continuation of coverage to certain individuals.

                  (a) Anything in Article XV to the contrary notwithstanding, a
         Pensioned Employee, Dependent spouse, or Dependent child shall be
         entitled to elect continued medical coverage as provided under the
         terms of Article XV upon the occurrence of a Qualifying Event, provided
         such Pensioned Employee, Dependent spouse, or Dependent child was
         entitled to benefits under Article XV on the day prior to the
         Qualifying Event.

                           (1) "Qualifying Event" means with respect to any
                  Pensioned Employee, Dependent spouse, or Dependent child, as
                  appropriate, (A) the death of the Pensioned Employee, (B) the
                  divorce or legal separation of the Pensioned Employee from the
                  Dependent spouse, (C) a Dependent child ceasing to be a
                  Dependent as defined under the requirements of Article XV, or
                  (D) a proceeding in a case under Title 11, United States Code,
                  with respect to the Employer.

                  (b) The Pensioned Employee or Dependent electing continued
         coverage under this Section 15.5 shall be required to pay such monthly
         contributions as determined by the Employer to be equal to a reasonable
         estimate of 102% of the cost of providing coverage for such period for
         similarly situated beneficiaries which (1) is determined on an
         actuarial basis and (2) takes into account such factors as the
         Secretary of the Treasury may prescribe.

                  (c) The continuation coverage elected by a Pensioned Employee,
         Dependent spouse, or Dependent child shall begin on the date of the
         Qualifying Event and end not earlier than the first to occur of the
         following:

                         (1) The third anniversary of the Qualifying Event;

                         (2) The termination of Article XV of the Plan;

                         (3) The failure of the Pensioned  Employee or Dependent
                    to pay any required contribution when due;

                           (4) The date on which the Pensioned Employee or
                  Dependent first becomes, after the date of his election, (A) a
                  covered employee under any other group health plan which does
                  not contain any exclusion or limitation with respect to any
                  preexisting condition of such individual, or (B) entitled to
                  benefits under Title XVIII of the Social Security Act; or

                           (5) The date the Dependent spouse becomes covered
                  under another group health plan which does not contain any
                  exclusion or limitation with respect to any preexisting
                  condition of such Dependent spouse.

                  (d) Any election to continue coverage under this Section 15.5
         shall be made during the election period (1) beginning not later than
         the termination date of coverage by reason of the Qualifying Event and
         (2) ending sixty (60) days following the later of the date described in
         (1) above or the date any Pensioned Employee, Dependent spouse, or
         Dependent child receives notice of a Qualifying Event from the
         Employer.

                  (e) The Employer shall provide each Pensioned Employee and
         Dependent spouse, if any, written notice of the rights provided in this
         Section 15.5. The Pensioned Employee or Dependent spouse is required to
         notify the Employer within thirty (30) days of any Qualifying Event
         described in Section 15.5(a)(1)(B) or (C), and the Employer shall
         provide the Dependent spouse or Dependent child written notice of the
         rights provided in this Section 15.5 within fourteen (14) days
         thereafter. Notice to the Dependent spouse shall be deemed notice to
         each Dependent child residing with such spouse at the time such
         notification is made.

                  15.6 Contributions or Qualified Transfers to fund medical 
benefits.

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

                  The amount of contributions to be made by or on behalf of the
         Employer 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 Article XV, the funding medium, and any other
         applicable considerations. However, the Employer is under no obligation
         to make any contributions under Article XV after Article XV is
         terminated, except to fund claims for medical expenses incurred prior
         to the date of termination.

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

                  The aggregate of costs of the medical benefits (measured from
         January 1, 1987) plus the costs of any life insurance protection shall
         not exceed twenty-five percent (25%) of the sum of the aggregate of
         costs of retirement benefits under the Plan (other than past service
         credits), the aggregate of costs of the medical benefits and the costs
         of any life insurance protection (both measured from January 1, 1987).
         The aggregate of costs of retirement benefits, other than for past
         service credits, and the aggregate of costs of medical benefits
         provided under the Plan shall be determined using the projected unit
         credit funding method and the actuarial assumptions set forth in
         Exhibit B, a copy of which is attached hereto and specifically
         incorporated herein by reference in its entirety, and as may be amended
         from time to time by the committee responsible for providing a
         procedure for establishing and carrying out a funding policy and method
         for the Plan pursuant to Section 10.9 of the Plan. Effective for
         contributions made after January 1, 1990, the limitations set forth in
         the preceding two sentences in this paragraph on amounts that may be
         contributed to fund medical benefits under this Article XV shall be
         based on contributions alone and not cost. Contributions allocated to
         any separate account established for a Pensioned Employee from which
         medical benefits will be payable solely to such Pensioned Employee or
         his Dependents shall be treated as an Annual Addition as defined in
         Section 6.6(a) to any defined contribution plan maintained by the
         Employer.

                  (b) Effective January 1, 1991, the Employer 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 under the Plan to the Health Benefits Accounts to fund medical
         benefits under this Article XV.

                  15.7 Pensioned Employee contributions. It shall be the sole
         responsibility of the Pensioned Employee to notify the Employer
         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 XV. No person shall become
         covered under this Article XV 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 XV shall be returned upon written
         request but only provided such written request by or on behalf of the
         Pensioned Employee is received by the Employer within ninety (90) days
         from the date coverage terminates with respect to such ineligible
         person.

                  15.8 Amendment of Article XV. The Employer reserves the right,
         through action of its Board of Directors, to amend Article XV
         (including Exhibit A) pursuant to Section 13.1 or the Trust 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 XV, as
         set forth in the Plan document, is not a contract and non-contributory
         benefits hereunder are provided gratuitously, without consideration
         from any Pensioned Employee or his Dependents. The Employer 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 or under the terms of any other employee benefit plan
         maintained by the Employer shall not confer upon any Pensioned Employee
         or Dependents any right to continued benefits under this Article XV.

                  15.9 Termination of Article XV. Although it is the intention
         of the Employer that this Article shall be continued and the
         contribution shall be made regularly thereto each year, the Employer,
         by action of its Board of Directors pursuant to Section 13.1, may
         terminate this Article XV or permanently discontinue contributions at
         any time in its sole discretion. This Article XV, as set forth in the
         Plan document, is not a contract and non-contributory benefits
         hereunder are provided gratuitously, without consideration from any
         Pensioned Employee or his Dependents. The Employer 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 or under the terms of any other employee benefit plan maintained
         by the Employer shall not confer upon any Pensioned Employee or his
         Dependents any right to continued benefits under this Article XV.
         Effective January 1, 1991, in the event the Employer or any adopting
         Employer shall terminate its provision of the medical benefits
         described in Exhibit A to Section 15.3 of the Plan to its Pensioned
         Employees, this Article XV of the Plan shall automatically terminate
         with respect to the Pensioned Employees and their Dependents of such
         Employer without the requirement of any action by such Employer.

                  15.10 Reversion of assets upon termination. Upon the
         termination of this Article XV and the satisfaction of all liabilities
         under this Article XV, all remaining assets in the separate account
         described in Section 15.6 shall be returned to the Employer.

         IN WITNESS WHEREOF, Mississippi Power Company through its duly
authorized officers, has adopted this First Amendment to the Pension Plan for
Employees of Mississippi Power Company this ____ day of _________________, 1996,
to be effective as stated herein.

                                            MISSISSIPPI POWER COMPANY

                                            By: _______________________________

                                            Title:_____________________________

ATTEST:

By:  _________________________

Title:________________________

(CORPORATE SEAL)

<PAGE>
                             SECOND AMENDMENT TO THE
                                  PENSION PLAN
                                FOR EMPLOYEES OF
                            MISSISSIPPI POWER COMPANY


     WHEREAS,   the  Board  of  Directors  of  Mississippi  Power  Company  (the
"Company")  heretofore adopted the amendment and restatement of the Pension Plan
for Employees of  Mississippi  Power Company (the "Plan")  effective  January 1,
1989; and

     WHEREAS,  the  Company  wishes to amend the Plan to  provide ad hoc cost of
living increases to retirees; 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, 1996, unless otherwise indicated, the
Company hereby amends the Plan as follows:

                                       I.

         Section 5.11 should be deleted in its entirety and replaced with the
following:

                  5.11     Increase in Retirement Income of retired Employees

                  (a) Retirement Income payable on and after January 1, 1991 to
         an Employee (or to the Provisional Payee of an Employee) who retired at
         his Early Retirement Date, Normal Retirement Date, or Deferred
         Retirement Date on or before January 1, 1991 pursuant to the Plan as in
         effect prior to January 1, 1991 will be recalculated to increase the
         amount thereof by an amount ranging from a minimum of two percent (2%)
         to a maximum of forty percent (40%) in accordance with the following
         schedule:

                     Year in which                             Percentage
                  retirement occurred                           increase

                         1990                                       2%
                         1989                                       4%
                         1988                                       6%
                         1987                                       8%
                       1976 - 1986                                 10%
                       1971 - 1975                                 20%
                       1966 - 1970                                 30%
                  1965 and prior years                             40%

                  A similar adjustment, based on the date of the commencement of
         Retirement Income payments to the Employee's Provisional Payee, rather
         than the Employee's Retirement Date, will be made in respect of
         Retirement Income which is payable on or after January 1, 1991 where a
         Provisional Payee election was in effect, or was deemed to be in
         effect, when an Employee died while in service prior to January 1, 1991
         and prior to his retirement.

                  A similar adjustment will be made in respect of Retirement
         Income which is payable on or after January 1, 1991 for an Employee (or
         the Provisional Payee of an Employee) entitled to Retirement Income for
         which payments have commenced on or before January 1, 1991 in
         accordance with Article VIII of the Plan or of the Prior Plan, except
         for Employees whose Retirement Income has been cashed-out pursuant to
         Section 8.4 of the Plan.

                  For purposes of determining the applicable percentage increase
         under this Section 5.11, the year of retirement includes retirement
         where the last day of employment was December 31 of such year. An
         Employee whose Deferred Retirement Date is on or before January 1, 1988
         and who did not retire at his Normal Retirement Date shall be deemed to
         have retired at his Normal Retirement Date for purposes of determining
         the increase in his Retirement Income payable at his Deferred
         Retirement Date.

                  (b) Retirement Income payable on and after January 1, 1996 to
         an Employee (or to the Provisional Payee of an Employee) who retired at
         his Early Retirement Date, Normal Retirement Date, or Deferred
         Retirement Date on or before January 1, 1996 pursuant to the Plan as in
         effect prior to January 1, 1996 will be recalculated to increase the
         amount thereof by an amount ranging from a minimum of one and one-half
         percent (1.5%) to a maximum of seven and one-half percent (7.5%) in
         accordance with the following schedule:

                              Year in which                    Percentage
                           retirement occurred                  increase

                                   1995                             1.5%
                                   1994                             3.0%
                                   1993                             4.5%
                                   1992                             6.0%
                           1991 and prior years                     7.5%

                  A similar adjustment, based on the date of the commencement of
         Retirement Income payments to the Employee's Provisional Payee, rather
         than the Employee's Retirement Date, will be made in respect of
         Retirement Income which is payable on or after January 1, 1996 where a
         Provisional Payee election was in effect, or was deemed to be in
         effect, when an Employee died while in service prior to January 1, 1996
         and prior to his retirement.

                  A similar adjustment will be made in respect of Retirement
         Income which is payable on or after January 1, 1996 for an Employee (or
         the Provisional Payee of an Employee) entitled to Retirement Income for
         which payments have commenced on or before January 1, 1996 in
         accordance with Article VIII of the Plan or of the Prior Plan, except
         for Employees whose Retirement Income has been cashed-out pursuant to
         Section 8.4 of the Plan.

                  For purposes of determining the applicable percentage increase
         under this Section 5.11, the year of retirement includes retirement
         where the last day of employment was December 31 of such year. An
         Employee whose Deferred Retirement Date is on or before January 1, 1988
         and who did not retire at his Normal Retirement Date shall be deemed to
         have retired at his Normal Retirement Date for purposes of determining
         the increase in his Retirement Income payable at his Deferred
         Retirement Date.

                  (c) This Section 5.11 shall not apply with respect to an
         Employee who has not retired, but for whom the distribution of
         Retirement Income has commenced pursuant to Section 5.9 of the Plan.

         IN WITNESS WHEREOF, Mississippi Power Company through its duly
authorized officer, has adopted this Second Amendment to the Pension Plan for
Employees of Mississippi Power Company this ____ day of _________________, 1996,
to be effective as stated herein.


                                         MISSISSIPPI POWER COMPANY

                                         By: ____________________________

                                         Title:__________________________


ATTEST:

By:  _____________________________

Title:____________________________

         [CORPORATE SEAL]

<PAGE>
                             THIRD AMENDMENT TO THE
                                  PENSION PLAN
                                FOR EMPLOYEES OF
                            MISSISSIPPI POWER COMPANY


         WHEREAS, the Board of Directors of Mississippi Power Company (the
"Company") heretofore adopted the amendment and restatement of the Pension Plan
for Employees of Mississippi Power Company (the "Plan") effective January 1,
1989; and

         WHEREAS, the Company wishes to amend the Plan to comply with certain
requirements imposed by the Retirement Protection Act of 1994, to reduce the
early retirement age from 55 to 50, to reduce the Social Security offset amount,
to provide for outsourcing of Plan administration to a third party
administrator, and to make certain other technical and miscellaneous 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, 1996, unless otherwise indicated,
the Company hereby amends the Plan as follows:

                                       I.

         Section 1.13 should be amended by adding the following paragraph to the
end of such section:

                  Effective for Employees who have an Hour of Service on or
         after January 1, 1996 and who (a) are not covered by the terms of a
         collective bargaining agreement or (b) are covered by the terms of a
         collective bargaining agreement but where the bargaining unit
         representative and the Employer have mutually agreed to participation
         in the Plan as amended, the term "fiftieth (50th)" shall replace
         "fifty-fifth (55th)" in the preceding paragraph. In addition, with
         respect to any Employee described in this paragraph who separates from
         service and elects to retire in 1996 and who has not attained his
         fifty-fifth (55th) birthday, such Employee's Early Retirement Date
         shall be January 1, 1997.

                                       II.

         Section 1.31 should be deleted in its entirety and replaced with the
following:

                  1.31 "Qualified Election" means an election by an Employee or
         former Employee on a prescribed form that concerns the form of
         distribution of Retirement Income that must be in writing and must be
         consented to by the Employee's spouse. The spouse's consent to such an
         election must acknowledge the effect of such election, must be in
         writing, and must be witnessed by a notary public. Notwithstanding this
         consent requirement, if the Employee establishes to the satisfaction of
         the Retirement Board (or its delegee) that such written consent may not
         be obtained because the spouse cannot be located or because of such
         other circumstances as the Secretary of the Treasury may by regulations
         prescribe, an election by the Employee will be deemed a Qualified
         Election. Any consent necessary under this provision shall be valid and
         effective only with respect to the spouse who signs the consent, or in
         the event of a deemed Qualified Election, with respect to such spouse.

                  A revocation of a prior Qualified Election may be made by the
         Employee without consent at any time commencing within 90 days before
         such Employee's fifty-fifth (55th) birthday but not later than before
         the commencement of Retirement Income. Effective for Employees who have
         an Hour of Service on or after January 1, 1996 and who (a) are not
         covered by the terms of a collective bargaining agreement or (b) are
         covered by the terms of a collective bargaining agreement but where the
         bargaining unit representative and the Employer have mutually agreed to
         participation in the Plan as amended, the term "fiftieth (50th)" shall
         replace "fifty-fifth (55th)" in the preceding sentence.

                                      III.

         Section 1.35 should be amended by deleting the first paragraph in its
entirety and replacing it with the following:

                  1.35 "Social Security Offset" shall mean an amount equal to
         one-half (1/2) of the amount, if any, of the Federal primary Social
         Security benefit (primary old age insurance benefit) to which it is
         estimated that an Employee will become entitled in accordance with the
         Social Security Act in force as provided in subparagraphs (a) through
         (e) below which shall exceed $168 per month on and after January 1,
         1989, $250 per month on and after January 1, 1991, and for Employees
         who (a) are not covered by the terms of a collective bargaining
         agreement or (b) are covered by the terms of a collective bargaining
         agreement but where the bargaining unit representative and the Employer
         have mutually agreed to participation in the Plan as amended, $325 per
         month on and after January 1, 1996, multiplied by a fraction not
         greater than one, the numerator of which shall be the Employee's total
         Accredited Service, and the denominator of which shall be such total
         Accredited Service plus the Accredited Service the Employee could have
         accumulated if he had continued his employment from the date he
         terminates service with his Employer or any Affiliated Employer until
         his Normal Retirement Date. For purposes of determining the estimated
         Federal primary Social Security benefit used in the Social Security
         Offset, an Employee shall be deemed to be entitled to receive Federal
         primary Social Security benefits after retirement or death, if earlier,
         regardless of the fact that he may have disqualified himself to receive
         payment thereof. In addition to the foregoing, the calculation of the
         Social Security benefit shall be based on the salary history of the
         Employee as provided in Section 5.4 and shall be determined pursuant to
         the following, as applicable:

                                       IV.

         Section 3.2 should be amended by adding the following paragraph to the
end thereof:

                  Effective for Employees who have an Hour of Service on or
         after January 1, 1996 and who (a) are not covered by the terms of a
         collective bargaining agreement or (b) are covered by the terms of a
         collective bargaining agreement but where the bargaining unit
         representative and the Employer have mutually agreed to participation
         in the Plan as amended, the term "fiftieth (50th)" shall replace
         "fifty-fifth (55th)" in the preceding paragraph. In addition, with
         respect to any Employee described in this paragraph who separates from
         service in 1996, who has not attained his fifty-fifth (55th) birthday
         and who elects to retire pursuant to uniform rules established for
         Employees retiring pursuant to this paragraph, such Employee's Early
         Retirement Date shall be January 1, 1997.

                                       V.

         Section 4.4(a) should be deleted in its entirety and replaced with the
following:

                  (a) If an Employee included in the Plan who has completed at
         least five (5) Vesting Years of Service becomes totally disabled and is
         granted either Social Security disability benefits or long-term
         disability benefits under a long-term disability benefit plan of the
         Employer, he shall be considered to be on a leave of absence, herein
         referred to as a "Disability Leave." An Employee's Disability Leave
         shall be deemed to begin on the initial date of the disability and
         shall continue until the earlier of: (1) the end of the month in which
         he shall cease to be entitled to receive Social Security Disability
         benefits and long-term disability benefits under a long-term disability
         benefit plan of the Employer; (2) his death; and (3) his Retirement
         Date if he elects to have his Retirement Income commence on such date.
         During the period of the Employee's Disability Leave, he shall, for
         purposes of the Plan, be deemed to have received Earnings at the
         regular rate in effect for him.

                                       VI.

         Section 5.3(a) should be deleted in its entirety and replaced with the
following:

                  (a) Upon retirement at Early Retirement Date, his Minimum
         Retirement Income (before adjustment for Provisional Payee designation,
         if any) shall be an amount equal to 1.70% of his Average Monthly
         Earnings multiplied by his years (and fraction of a year) of Accredited
         Service earned as of his Early Retirement Date including a Social
         Security Offset.

                                      VII.

         Section 5.4 should be amended by deleting the first paragraph in its
entirety and replacing it with the following:

                  5.4 Calculation of Social Security Offset. For purposes of
         determining the Social Security Offset in calculating an Employee's
         Retirement Income under the Plan, the Social Security Offset shall be
         determined by using the actual salary history of the Employee during
         his employment with the Employer or any Affiliated Employer, provided
         that in the event that the Retirement Board (or its delegee) is unable
         to secure such actual salary history within 180 days following the
         later of the date of the Employee's separation from service (by
         retirement or otherwise) and the time when the Employee is notified of
         the Retirement Income to which he is entitled, the salary history shall
         be determined in the following manner:

                                      VIII.

         Section 5.5 should be deleted in its entirety and replaced with the
following:

                  5.5 Early Retirement Income. The monthly amount of Retirement
         Income payable to an Employee who retires from the service of the
         Employer at his Early Retirement Date subject to the limitations of
         Section 6.2, will be equal to his Retirement Income determined in
         accordance with Sections 5.1 and 5.3 based on his Accredited Service to
         his Early Retirement Date, reduced by three-tenths of one percent
         (0.3%) for each calendar month by which the commencement date of his
         Retirement Income precedes his Normal Retirement Date but follows the
         first day of the month following his attainment of his fifty-fifth
         (55th) birthday.

                  Effective for Employees who have an Hour of Service on or
         after January 1, 1996, and who (a) are not covered by the terms of a
         collective bargaining agreement or (b) are covered by the terms of a
         collective bargaining agreement but where the bargaining unit
         representative and the Employer have mutually agreed to participation
         in the Plan as amended and (c) elect to retire in accordance with this
         Section 5.5 on or after attainment of age fifty (50) but before
         attainment of age fifty-five (55), Retirement Income shall be
         determined as in the preceding paragraph including an additional
         reduction of one-third of one percent (0.33%) 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.

                  At the option of the Employee exercised at or prior to
         commencement of his Retirement Income on or after his Early Retirement
         Date (provided he shall not have in effect at such Early Retirement
         Date a Provisional Payee designation pursuant to Article VII), he may
         have his Retirement Income adjusted upwards in an amount which will
         make his Retirement Income payable up to age sixty-five (65) equal, as
         nearly as may be, to the amount of his Federal primary Social Security
         benefit (primary old age insurance benefit) estimated to become payable
         after age sixty-five (65), as computed at the time of his retirement in
         accordance with Section 5.3(a), plus a reduced amount, if any, of
         Retirement Income actuarially determined to be payable after age
         sixty-five (65). The Federal primary Social Security benefit used in
         calculating an Employee's Retirement Income payable under the Plan
         shall be determined by using the salary history of the Employee during
         his employment with the Employer or any Affiliated Employer, as
         calculated in accordance with Section 5.4.

                                       IX.

         Section 5.7 should be deleted in its entirety and replaced with the
following:

                  5.7 Payment of Retirement Income. The first payment of an
         Employee's Retirement Income will be made on his Early Retirement Date,
         Normal Retirement Date, Deferred Retirement Date, or date of
         commencement of payment of Retirement Income in accordance with Section
         8.2 or 8.6, as the case may be; provided that commencement of the
         distribution of an Employee's Retirement Income shall not be made prior
         to his Normal Retirement Date without the consent of such Employee,
         except as provided in Section 8.4 of the Plan.

                  Notwithstanding anything to the contrary above, if in
         accordance with this Section 5.7, an Employee is entitled to receive
         Retirement Income commencing at his Early Retirement Date, he may, in
         lieu of commencing payment of his Retirement Income upon his Early
         Retirement Date, elect to receive such Retirement Income commencing as
         of the first day of any month after his Early Retirement Date and
         preceding his Normal Retirement Date in an amount equal to his Accrued
         Retirement Income determined as of the commencement of his Retirement
         Income on or after his Early Retirement Date determined in accordance
         with Section 5.5. An election pursuant to this Section 5.7 to have
         Retirement Income commence prior to Normal Retirement Date shall be
         made on a prescribed form and shall be filed with the Retirement Board
         (or its delegee) at least thirty (30) days before Retirement Income is
         to commence.

                  In the event of the death of an Employee who has designated a
         Provisional Payee or is deemed to have done so in accordance with
         Article VII, if the designation has become effective, the first payment
         to be made to the Provisional Payee pursuant to Article VII shall be
         made to the Provisional Payee on the first day of the month after the
         later of (a) the Employee's death and (b) the date on which the
         Employee would have attained his fifty-fifth (55th) birthday if he had
         survived to such date, if the Provisional Payee shall then be alive and
         proof of the Employee's death satisfactory to the Retirement Board (or
         its delegee) shall have been received by it. Subsequent payments will
         be made monthly thereafter until the death of such Provisional Payee.

                  Effective for Employees who have an Hour of Service on or
         after January 1, 1996 and who (a) are not covered by the terms of a
         collective bargaining agreement or (b) are covered by the terms of a
         collective bargaining agreement but where the bargaining unit
         representative and the Employer have mutually agreed to participation
         in the Plan as amended, the term "fiftieth (50th)" shall replace
         "fifty-fifth (55th)" in the preceding paragraph. In addition, with
         respect to any Employee described in this paragraph who dies in 1996
         while in service with the Employer and who has attained his fiftieth
         (50th) birthday but has not attained his fifty-fifth (55th) birthday at
         the time of his death, such Employee's Provisional Payee shall commence
         receipt of Retirement Income on the earlier of the first day of the
         month following the date on which the Employee would have attained his
         fifty-fifth (55th) birthday if he were still alive or on January 1,
         1997, provided the Employee's Provisional Payee is alive and proof of
         the Employee's death satisfactory to the Retirement Board (or its
         delegee) is received.

                  In any event, payment of Retirement Income, including any
         adjustments thereto caused by an amendment to the Plan providing for or
         which has the effect of providing retroactively increased Retirement
         Income, to the Employee shall begin not later than the sixtieth (60th)
         day after the later of the close of the Plan Year in which falls (a)
         the Employee's Normal Retirement Date or (b) the date the Employee
         terminates his service with the Employer or any Affiliated Employer.
         Notwithstanding the provisions of the Plan for the monthly payment of
         Retirement Income, such income may be adjusted and payable annually in
         arrears if the amount of the Retirement Income is less than $10.00 per
         month.

                                       X.

         Section 5.9(a) should be deleted in its entirety and replaced with the
following:

                  (a) Once a written claim for benefits is filed with the
         Retirement Board (or its delegee), payment of benefits to the Employee
         shall begin not later than sixty (60) days after the last day of the
         Plan Year in which the latest of the following events occurs:

                    (1) the Employee's Normal Retirement Date;

                    (2) the tenth  (10th)  anniversary  of the date the Employee
               commenced participation in the Plan; or

                    (3) the Employee's separation from service from the Employer
               or any Affiliated Employer.

                                       XI.

         Section 5.12(b) should be amended by deleting such paragraph in its
entirety and renaming paragraphs "(c)," "(d)," "(e)," and "(f)" to be "(b),"
"(c)," "(d)," and "(e)."

                                      XII.

         Section 6.1(a) should be deleted in its entirety and replaced with the
following:

                  (a) The maximum annual amount of Retirement Income payable
         with respect to an Employee in the form of a straight life annuity
         without any ancillary benefits after any adjustment for a Provisional
         Payee designation shall be the lesser of the dollar limitation
         determined under Code Section 415(b)(1)(A) as adjusted under Code
         Section 415(d), or Code Section 415(b)(1)(B) as adjusted under Treasury
         Regulation Section 1.415-5, subject to the following provisions of
         Article VI. With respect to any former Employee who has Accrued
         Retirement Income under the Plan or his Provisional Payee, the maximum
         annual amount shall also be subject to the adjustment under Code
         Section 415(d), but only those adjustments occurring before September
         1, 1996.

                                      XIII.

         Article VII should be deleted in its entirety and replaced with the
following:

                                   ARTICLE VII

                                Provisional Payee

                  7.1 Adjustment of Retirement Income to provide for payment to
         Provisional Payee. An Employee who desires to have his Accrued
         Retirement Income adjusted in accordance with the provisions of this
         Article VII to provide a reduced amount of Retirement Income payable to
         him for his lifetime commencing on his Early Retirement Date, his
         Normal Retirement Date, or his Deferred Retirement Date, as the case
         may be, may elect subject to Section 7.11, in accordance with the
         provisions of this Article VII, at his option, either:

                  (a) that an amount of Retirement Income be payable to him for
         his lifetime which is equal to eighty percent (80%) of the Retirement
         Income which would otherwise be payable to him, but for such election
         (taking into account any reduction required in accordance with Sections
         7.3 and 7.4(a)), with the provision that the same amount will be
         continued after his death to his Provisional Payee until the death of
         such Provisional Payee, or

                  (b) that an amount of Retirement Income be payable to him for
         his lifetime which is equal to ninety percent (90%) of the Retirement
         Income which would otherwise be payable to him, but for such election
         (taking into account any reduction required in accordance with Sections
         7.3 and 7.4(a)), with the provision that one-half (1/2) of the amount
         payable to the Employee will be continued after his death to his
         Provisional Payee until the death of such Provisional Payee, or

                  (c) that an amount of Retirement Income be payable to him for
         his lifetime which is equal to seventy-five percent (75%) of the
         Retirement Income which would otherwise be payable to him, but for such
         election (taking into account any reduction required in accordance with
         Sections 7.3 and 7.4(a)), with the provision that the same amount will
         be continued after his death to his Provisional Payee until the death
         of such Provisional Payee, or, if such Provisional Payee predeceases
         the Employee, the Employee's Retirement Income automatically increases
         to a monthly amount equal to the Retirement Income which would be
         payable to him had he not elected the form of benefit described in this
         Section 7.1(c) and instead had elected the single life annuity form of
         benefit, or

                  (d) that an amount of Retirement Income be payable to him for
         his lifetime which is equal to eighty-eight percent (88%) of the
         Retirement Income which would otherwise be payable to him, but for such
         election (taking into account any reduction required in accordance with
         Sections 7.3 and 7.4(a)), with the provision that one-half (1/2) of the
         amount payable to the Employee will be continued after his death to his
         Provisional Payee until the death of such Provisional Payee, or, if
         such Provisional Payee predeceases the Employee, the Employee's
         Retirement Income automatically increases to a monthly amount equal to
         the Retirement Income which would be payable to him had he not elected
         the form of benefit described in this Section 7.1(d) and instead had
         elected the single life annuity form of benefit.

                  7.2      Form and time of election and notice requirements.

                  (a) An election of payment and designation of a Provisional
         Payee in accordance with Section 7.1 shall be made in writing at the
         same time on a prescribed form delivered to the Retirement Board (or
         its delegee). Subject to Section 7.10(d), the election and designation
         shall specify its effective date which shall not be sooner than the
         date received by the Retirement Board (or its delegee) or the
         Employee's fifty-fifth (55th) birthday, whichever is later, nor later
         than the date of commencement of payments in accordance with this
         Article VII.

                  Notwithstanding the preceding paragraph, an election under
         Section 7.1(c) or (d) is subject to Section 7.11, must be in the form
         of a written Qualified Election, and shall not become effective until
         the commencement of Retirement Income payments under the Plan.

                  (b) Subject to Section 7.10(d), an election of payment to be
         made in accordance with paragraph (a), (b), (c), or (d) of Section 7.1
         may be changed by an Employee, provided the written election of the
         change specifies an effective date which shall not be sooner than the
         date received by the Retirement Board (or its delegee) or the
         Employee's fifty-fifth (55th) birthday, whichever is later, nor later
         than the date of commencement of payments in accordance with this
         Article VII. Notwithstanding the preceding sentence, an election under
         Section 7.1(c) or (d) is subject to Section 7.11, must be in the form
         of a written Qualified Election, and shall not become effective until
         the commencement of Retirement Income payments under the Plan. To the
         extent that the new method of payment shall afford the Employee changed
         protection in the event of his death after the effective date of the
         new election and prior to retirement, his Accrued Retirement Income
         shall be adjusted pursuant to Section 7.4(a) to reflect such changed
         protection.

                  (c) With respect to Sections 7.5 and 7.6, within the period
         not less than 30 days and not more than 90 days prior to the
         anticipated commencement of benefits, the Employee shall be furnished,
         by mail or personal delivery, a written explanation of: (1) the terms
         and conditions of the reduced Retirement Income payable as provided in
         paragraph (b) of Section 7.1; (2) the Employee's right to make, and the
         effect of, an election to waive the payment of reduced Retirement
         Income pursuant to a Provisional Payee designation; (3) the rights of
         the Employee's Provisional Payee; and (4) the right to make, and the
         effect of, a revocation of a previous election to waive the payment of
         reduced Retirement Income pursuant to a Provisional Payee designation.

                  Within thirty (30) days following an Employee's written
         request received by the Retirement Board (or its delegee) during the
         election period, but within sixty (60) days from the date the Employee
         is furnished all of the information prescribed in the immediately
         preceding sentence, the Employee shall be furnished an additional
         written explanation, in terms of dollar amounts, of the financial
         effect of an election by him not to receive such reduced Retirement
         Income. If an Employee makes such request, the election period herein
         prescribed shall end not earlier than sixty (60) calendar days
         following the day of the mailing or personal delivery of the additional
         explanation to the Employee. Except that if an election made as
         provided in Section 7.5 or 7.6 is revoked, another election under that
         Section may be made during the specified election period.

                  7.3 Circumstances in which election and designation are
         inoperative. An election and designation made pursuant to this Article
         shall be inoperative and the regular provisions of the Plan shall again
         become applicable as if a Provisional Payee had not been designated if,
         prior to the commencement of any payment in accordance with this
         Article VII: (a) an Employee's Provisional Payee shall die, (b) the
         Employee and the Provisional Payee shall be divorced under a final
         decree of divorce, or (c) the Retirement Board (or its delegee) shall
         have received the written Qualified Election of the Employee to rescind
         his election of payment and designation of a Provisional Payee in order
         to receive a single life annuity form of benefit. If such a Qualified
         Election to rescind is made by the Employee, his Accrued Retirement
         Income shall be reduced to reflect the protection afforded the Employee
         by any Provisional Payee designation during the period from its
         effective date to the date of the Retirement Board's (or its delegee's)
         receipt of the Employee's Qualified Election to rescind if the option
         as to payments of reduced Retirement Income was in accordance with
         either Section 7.1(a), 7.6(a), or 7.6(b). If an Employee remarries
         subsequent to the death or divorce of his Provisional Payee and prior
         to the commencement of payments in accordance with this Article VII,
         then he shall be entitled to designate a new Provisional Payee in the
         manner set forth in Section 7.2.

                  7.4 Pre-retirement death benefit. If prior to his Normal
         Retirement Date (or his Deferred Retirement Date, if applicable), an
         Employee shall die while in the service of the Employer and is survived
         by his spouse to whom he shall be married at the time of his death,
         there shall be payable to his surviving spouse (whom he shall be deemed
         to have designated as his Provisional Payee) Retirement Income
         determined in accordance with paragraph (a) or paragraph (c) of this
         Section 7.4, as applicable. Subject to Section 7.10(b), such Retirement
         Income shall commence on the first day of the month following the death
         of the Employee or the first day of the month following the date on
         which he would have attained his fifty-fifth (55th) birthday if he were
         still alive, whichever is later, and shall cease with the last payment
         preceding the death of his Provisional Payee.

                  (a) The amount of Retirement Income payable to the Provisional
         Payee of a deceased Employee who prior to his death had attained his
         fifty-fifth (55th) birthday shall be equal to the amount payable to the
         Provisional Payee as calculated in Section 7.1(b) determined on the
         basis of his Accredited Service to the date of his death, or if the
         Employee shall have attained his fifty-fifth (55th) birthday and so
         elected prior to his death, such Retirement Income shall be equal to
         the amount set forth in Section 7.1(a) determined on the basis of his
         Accredited Service to the date of his death reduced as provided in the
         next sentence. If such election shall be made by the Employee, the
         Retirement Income which shall be payable to the Employee if he lives to
         his Early Retirement Date or the first day of the month following his
         attainment of age sixty-five (65), if later, shall be reduced by
         three-fourths of one percent (0.75%) for each year (prorated for a
         fraction of a year from the first day of the month following the
         effective date of the election) which has elapsed from the effective
         date of his election to the earlier of (1) the commencement of
         Retirement Income on or after his Early Retirement Date or the first
         day of the month following his attainment of age sixty-five (65), if
         later, or (2) the revocation of such election. If he shall die before
         the commencement of Retirement Income on or after his Early Retirement
         Date or the first day of the month following his attainment of age
         sixty-five (65), if later, his Accrued Retirement Income to the date of
         his death shall be reduced by three-quarters of one percent (0.75%) for
         each year (prorated for a fraction of a year from the first day of the
         month following the effective date of the election) between the
         effective date of his election and the first day of the month following
         his attainment of age sixty-five (65). No reduction in the Employee's
         Retirement Income shall be made for the period during which the
         election is in effect after the first day of the month following his
         attainment of age sixty-five (65).

                  (b) Retirement Income shall not be payable under paragraph (a)
         of this Section 7.4 to the Provisional Payee of a deceased Employee if
         at the time of his death there was in effect a Qualified Election made
         after August 22, 1984 under this paragraph (b) that no Retirement
         Income shall be paid to his Provisional Payee in the event of his death
         while in the service of the Employer (or while in the service of an
         Affiliated Employer to which his employment had been transferred in
         accordance with Section 4.6) as provided in paragraph (a), provided the
         Employee had received at least 180 days prior to his fifty-fifth (55th)
         birthday a written explanation of: (1) the terms and conditions of the
         Retirement Income payable to his Provisional Payee as provided in
         paragraph (a); (2) the Employee's right to make, and the effect of, an
         election to waive the payment of Retirement Income to his Provisional
         Payee; (3) the rights of the Employee's Provisional Payee; and (4) the
         right to make, and the effect of, a revocation of a previous election
         to waive the payment of Retirement Income to the Employee's Provisional
         Payee.

                  A revocation of a prior Qualified Election may be made by the
         Employee without the consent of the Employee's Provisional Payee at any
         time before the commencement of benefits. An election under this
         paragraph (b) may be made and such election may be revoked by an
         Employee during the period commencing ninety (90) days prior to the
         Employee's fifty-fifth (55th) birthday and ending on the date of the
         Employee's death.

                  Notwithstanding the above provisions of this paragraph (b),
         such Employee shall not be entitled on or after September 1, 1996 to
         waive payment of Retirement Income to his Provisional Payee as provided
         in this Section 7.4. Any such election to waive payment of Retirement
         Income in effect on August 31, 1996 shall remain in effect unless
         subsequently revoked by the Employee.

                  (c) The amount of such Retirement Income payable to the
         Provisional Payee of a deceased Employee who prior to his death, had
         completed at least five (5) Vesting Years of Service and had not
         attained his fifty-fifth (55th) birthday shall be equal to one-half of
         the reduced amount, as actuarially adjusted to provide for the payment
         of such Retirement Income beginning as of the first day of the month
         following the date on which such deceased Employee would have attained
         his fifty-fifth (55th) birthday and to provide for the determination of
         such Retirement Income on a joint and fifty percent (50%) survivor
         basis of the Employee's Accrued Retirement Income, determined on the
         basis of his Accredited Service to the date of his death.

                  This Section 7.4(c) shall also apply to adjust, as provided in
         the next following paragraph, the future payment of Retirement Income
         after December 31, 1990 to a Provisional Payee with respect to an
         Employee who died (while in the service of the Employer prior to his
         fifty-fifth (55th) birthday after completing the requisite number of
         Years of Service in order to have a nonforfeitable right to Retirement
         Income under the Plan as in effect on the Employee's date of death),
         provided Retirement Income is payable to such Provisional Payee on or
         after January 1, 1991. The adjustment under this Section 7.4(c) shall
         be determined by adjusting the Retirement Income that had commenced to
         the Provisional Payee on or before January 1, 1986, and then adding the
         applicable percentage increase under Section 5.13 of the Prior Plan.

                  Subject to Section 7.10(c), for an Employee on or after
         January 1, 1991, who dies while in the service of the Employer prior to
         his fifty-fifth (55th) birthday after completing five (5) Vesting Years
         of Service, the amount of such Retirement Income payable to the
         Provisional Payee shall be calculated as provided in Section 7.1(b)
         determined on the basis of his Accredited Service to the date of his
         death. The payment of such Retirement Income to the Provisional Payee
         shall begin on the first day of the month following the date on which
         such deceased Employee would have attained his fifty-fifth (55th)
         birthday.

                  7.5 Post-retirement death benefit - qualified joint and
         survivor annuity. If at his Early Retirement Date, Normal Retirement
         Date, or Deferred Retirement Date, as the case may be, an Employee is
         married and he has not: (a) designated a Provisional Payee in
         accordance with Section 7.1 in respect of payments to be made
         commencing on his Early, Normal, or Deferred Retirement Date or (b)
         made, subject to Section 7.4(b), a Qualified Election that payment be
         made to him in the mode of a single life annuity, he shall nevertheless
         be deemed to have made an effective designation of a Provisional Payee
         under this Section 7.5 and to have specified the payment of a benefit
         as provided in Section 7.1(b).

                  7.6 Election and designation by former Employee entitled to
         Retirement Income in accordance with Article VIII. If a former Employee
         is entitled to receive in accordance with Section 8.1 Retirement Income
         commencing at Normal Retirement Date, or sooner in accordance with
         Section 8.2, he may, on or after his fifty-fifth (55th) birthday,
         designate his spouse as his Provisional Payee and elect, subject to
         Section 7.11, to have his Accrued Retirement Income at the date of
         termination of his service actuarially adjusted to provide, at his
         option, in the event of the commencement of payment prior to his Normal
         Retirement Date either:

                  (a) a reduced amount payable to him for his lifetime with the
         provision that such reduced amount will be continued after his death to
         his spouse as Provisional Payee until the death of such Provisional
         Payee; or

                  (b) a reduced amount payable to him for his lifetime with the
         provision that one-half (1/2) of such reduced amount will be continued
         after his death to his spouse as Provisional Payee until the death of
         such Provisional Payee; or

                  (c) a reduced amount payable to him for his lifetime with the
         provision that such reduced amount will be continued after his death to
         his spouse as Provisional Payee until the death of such Provisional
         Payee, or, if such Provisional Payee predeceases the former Employee,
         the former Employee's Retirement Income automatically increases to a
         monthly amount equal to the Retirement Income which would be payable to
         him had he not elected the form of benefit described in this Section
         7.6(c) and instead had elected the single life annuity form of benefit;
         or

                  (d) a reduced amount payable to him for his lifetime with the
         provision that one-half (1/2) of such reduced amount will be continued
         after his death to his spouse as Provisional Payee until the death of
         such Provisional Payee, or, if such Provisional Payee predeceases the
         former Employee, the former Employee's Retirement Income automatically
         increases to a monthly amount equal to the Retirement Income which
         would be payable to him had he not elected the form of benefit
         described in this Section 7.6(d) and instead had elected the single
         life annuity form of benefit.

                  The former Employee's election and designation of his
         Provisional Payee made in accordance with this Section 7.6 shall be in
         writing on a prescribed form delivered to the Retirement Board (or its
         delegee) and shall become effective not sooner than the date received
         or the former Employee's fifty-fifth (55th) birthday, whichever is
         later, nor later than the date of commencement of payment in accordance
         with this Section 7.6. Notwithstanding the preceding sentence, an
         election under Section 7.6(c) or (d) is subject to Section 7.11, must
         be in the form of a written Qualified Election, and shall not become
         effective until commencement of Retirement Income payments under the
         Plan.

                  If the former Employee dies prior to his Normal Retirement
         Date but after the effective date of his Provisional Payee designation,
         there will be payable to his Provisional Payee for life commencing on
         the first day of the calendar month after the former Employee's death
         Retirement Income in a reduced amount in accordance with the former
         Employee's election of payments to be made to his Provisional Payee
         after the death of the former Employee under paragraph (a), (b), (c),
         or (d), as the case may be, of this Section 7.6. Notwithstanding the
         preceding sentence, an election under Section 7.6(c) or (d) is subject
         to Section 7.11, must be in the form of a written Qualified Election,
         and shall not become effective until commencement of Retirement Income
         payments under the Plan. However, if prior to the former Employee's
         death, the Retirement Board (or its delegee) has not received such
         election, payment of a reduced amount of Retirement Income will be made
         in accordance with paragraph (b) of this Section 7.6 to his surviving
         spouse to whom he is married at the time of his death, unless (1) at
         the time of his death there is in effect a Qualified Election by the
         former Employee that reduced Retirement Income shall not be paid to his
         surviving spouse in accordance with this Section 7.6 should he die
         between his fifty-fifth (55th) birthday and his Normal Retirement Date
         without having elected that payment be made to a Provisional Payee and
         (2) at least 180 days prior to his fifty-fifth (55th) birthday a
         written explanation is provided to the former Employee of: (A) the
         terms and conditions of the Retirement Income payable to his
         Provisional Payee as provided in this Section 7.6; (B) the former
         Employee's right to make, and the effect of, an election to waive the
         payment of Retirement Income to his Provisional Payee; (C) the rights
         of a former Employee's spouse; and (D) the right to make, and the
         effect of, a revocation of a previous election to waive the payment of
         Retirement Income to his Provisional Payee.

                  If the former Employee is entitled to receive payment of
         Retirement Income in accordance with Section 8.2 after his fifty-fifth
         (55th) birthday and prior to his Normal Retirement Date and elects to
         do so, a reduced amount of Retirement Income determined in accordance
         with this Section 7.6, subject to Section 7.11, based upon his Accrued
         Retirement Income at the date of termination of his service
         (actuarially reduced in accordance with Section 8.2) will be payable to
         him commencing on the date on which payments commence prior to Normal
         Retirement Date in accordance with Section 8.2 with payments in the
         same or reduced amount to be continued to his Provisional Payee for
         life after the former Employee's death in accordance with his election
         under paragraph (a), (b), (c), or (d), as the case may be, of this
         Section 7.6. However, if the former Employee is married and he has not
         designated a Provisional Payee in respect of payments to commence to
         him prior to his Normal Retirement Date or elected that payment be made
         to him in the mode of a single life annuity pursuant to a Qualified
         Election, he shall be deemed to have designated a Provisional Payee
         pursuant to this Section 7.6 and thereby specified that a reduced
         Retirement Income shall be paid to him during his lifetime as provided
         in paragraph (b) of this Section 7.6 and continued after his death to
         his Provisional Payee as provided in paragraph (b) of this Section 7.6.

                  If the former Employee is alive on his Normal Retirement Date
         and is married and payment of Retirement Income has not sooner
         commenced, the provisions of Section 7.5 shall be applicable to the
         payment of his Retirement Income, unless he shall elect, subject to
         Section 7.11, at his Normal Retirement Date to receive payment of his
         Retirement Income pursuant to Section 7.1(a), (b), (c), or (d).
         However, if an election and designation in accordance with this Section
         7.6 was in effect prior to his Normal Retirement Date, the former
         Employee's Accrued Retirement Income at his Normal Retirement Date
         shall be actuarially adjusted for the period the election and
         designation was in effect.

                  7.7 Death benefit for Provisional Payee of former Employee. If
         an Employee, whose service with the Employer terminates on or after
         January 1, 1989, shall die after such termination of employment, and
         prior to his death (a) shall have not attained his fifty-fifth (55th)
         birthday, (b) shall have completed at least five (5) Vesting Years of
         Service, and (c) shall be survived by his spouse to whom he shall be
         married at his death, then there shall be payable to his surviving
         spouse (whom he shall be deemed to have designated as his Provisional
         Payee) Retirement Income determined in accordance with this Section
         7.7. Such Retirement Income shall be equal to one-half of the reduced
         amount, as actuarially adjusted to provide for the payment of such
         Retirement Income beginning as of the first day of the month following
         the date on which such deceased former Employee would have attained his
         fifty-fifth (55th) birthday and to provide for the determination of
         such Retirement Income on a joint and fifty percent (50%) survivor
         basis of the former Employee's Accrued Retirement Income, determined on
         the basis of his Accredited Service to the date of his death. Subject
         to Section 7.10(b), the Provisional Payee shall be eligible to commence
         receipt of such Retirement Income on the first day of the month
         following the date on which the former Employee would have attained his
         fifty-fifth (55th) birthday if he were still alive, or the first day of
         any subsequent month preceding what would have been the former
         Employee's Normal Retirement Date, and shall cease with the last
         payment preceding the death of his Provisional Payee. In any event, the
         Provisional Payee shall commence receipt of such Retirement Income no
         later than what would have been the former Employee's Normal Retirement
         Date.

                 7.8 Limitations on Employee's and Provisional Payee's benefits.

                  (a) With respect to an Employee who does not elect a single
         life annuity, the limitation on benefits imposed under Article VI shall
         be applied as if such Employee had elected a benefit in the form of a
         single life annuity.

                  (b) With respect to a Provisional Payee, the limitations on
         benefits imposed under Article VI shall be applied consistent with
         paragraph (a) above prorated to provide a limitation equal to or
         one-half of the Employee's limitation as appropriate in accordance with
         annuity form of benefit elected by the Employee.

                  7.9 Effect of election under Article VII. An election of
         payment or a deemed election of payment in accordance with this Article
         VII shall be in lieu of any other form or method of payment of
         Retirement Income.

                  7.10 Effects of change in retirement at Early Retirement Date.

                  (a) Notwithstanding any other provision of this Article VII
         with the exception of paragraphs one and two of Section 7.4(c), with
         respect to Employees who have an Hour of Service on or after January 1,
         1996 and who (1) are not covered by the terms of a collective
         bargaining agreement or (2) are covered by the terms of a collective
         bargaining agreement but where the bargaining unit representative and
         the Employer have mutually agreed to participation in the Plan as
         amended, the term "fiftieth (50th)" shall replace "fifty-fifth (55th)."

                  (b) Notwithstanding Sections 7.4 and 7.7 and subject to
         paragraph (a) above, if an Employee who has an Hour of Service on or
         after January 1, 1996 and who (1) is not covered by the terms of a
         collective bargaining agreement or (2) is covered by the terms of a
         collective bargaining agreement but where the bargaining unit
         representative and the Employer have mutually agreed to participation
         in the Plan as amended and (3) dies after attaining his fiftieth (50th)
         birthday but before attaining his fifty-fifth (55th) birthday, his
         Provisional Payee shall commence receipt of Retirement Income on or
         after January 1, 1997, provided the Employee's Provisional Payee is
         alive and proof of the Employee's death satisfactory to the Retirement
         Board (or its delegee) is received. Notwithstanding the preceding
         sentence, with respect to Section 7.7, the Provisional Payee may elect
         to defer receipt of Retirement Income to the first day of any month
         following the date the Employee would have attained his fiftieth (50th)
         birthday but not beyond what would have been such Employee's Normal
         Retirement Date.

                  (c) Subject to paragraph (a) above, the Provisional Payee of
         any Employee described in the third paragraph of Section 7.4(c) who (1)
         is not covered by the terms of a collective bargaining agreement or (2)
         is covered by the terms of a collective bargaining agreement but where
         the bargaining unit representative and the Employer have mutually
         agreed to participation in the Plan as amended shall commence receipt
         of Retirement Income upon the later of the first day of the month after
         the Employee would have attained his fiftieth (50th) birthday or
         January 1, 1997.

                  (d) For Employees who have an Hour of Service on or after
         January 1, 1996 and who (a) are not covered by the terms of a
         collective bargaining agreement or (b) are covered by the terms of a
         collective bargaining agreement but where the bargaining unit
         representative and the Employer have mutually agreed to participation
         in the Plan as amended and (c) have not attained their fifty-fifth
         (55th) birthday by December 31, 1996, notwithstanding Section 7.2, with
         respect to an election to receive a form of benefit described in
         Sections 7.1(a) and 7.6(a), such election will be effective not sooner
         than the date received by the Retirement Board (or its delegee) or
         January 1, 1997, whichever is later, nor later than the date of
         commencement of payments in accordance with this Article VII.

                  7.11 Commencement of new optional forms of payment. The
         options for payment described in Sections 7.1(c) and (d) and Sections
         7.6(c) and (d) may be elected only for payments that commence on or
         after October 1, 1996 and only for Employees who have an Hour of
         Service on or after January 1, 1996 and who (a) are not covered by the
         terms of a collective bargaining agreement or (b) are covered by the
         terms of a collective bargaining agreement but where the bargaining
         unit representative and the Employer have mutually agreed to
         participation in the Plan as amended.

                  7.12     Special form of benefit for former Employees.

                  (a) With respect to any Employee who has an Hour of Service on
         or after January 1, 1996 and who (1) is not covered by the terms of a
         collective bargaining agreement or (2) is covered by the terms of a
         collective bargaining agreement but where the bargaining unit
         representative and the Employer have mutually agreed to participation
         in the Plan as amended (3) terminates employment with the Employer in
         1996 and (4) has attained his fiftieth (50th) birthday but not his
         fifty-fifth (55th) birthday as of his termination of employment, such
         Employee shall be eligible to elect the special form of benefit
         described in the next following paragraph which election must be made
         in the form of a written Qualified Election.

                  (b) This special form of benefit shall only commence on
         January 1, 1997 and shall be comprised of two components consisting of
         a lump sum and a single life annuity as described in paragraphs (1) and
         (2) below.

                    (1)  Annuity  Component:  A  reduced  amount  of  Retirement
                         Income payable to the former  Employee for his lifetime
                         determined  as if he had  elected  to  retire as of the
                         first  of the  month  following  the date  such  former
                         Employee terminated from employment.

                    (2)  Lump Sum  Component:  A lump sum  payment  equal to the
                         difference between paragraphs (A) and (B) below:

                                    (A)     the lump sum amount which is the
                                            Actuarial Equivalent of a single
                                            life annuity payable to the former
                                            Employee determined as if the former
                                            Employee had elected such single
                                            life annuity to commence as of
                                            January 1, 1997, and

                                    (B)     the lump sum amount which is the
                                            Actuarial Equivalent of the payment
                                            described in paragraph (1) above.

                    (3)  With  respect to  paragraph  (1) above,  if the annuity
                         component  is payable to the  former  Employee  for his
                         lifetime,  he may elect to have his  Retirement  Income
                         adjusted  upwards  in an  amount  which  will  make his
                         Retirement  Income  payable up to age  sixty-five  (65)
                         equal,  as  nearly  as may  be,  to the  amount  of his
                         Federal  primary Social Security  benefit  (primary old
                         age  insurance  benefit)  estimated  to become  payable
                         after age sixty-five (65),  computed as of the first of
                         the  month  following  the  date  the  former  Employee
                         terminated  employment,  plus a reduced amount, if any,
                         of  Retirement  Income  actuarially  determined  to  be
                         payable after age sixty-five  (65). The Federal primary
                         Social Security  benefit used in calculating the former
                         Employee's  Retirement  Income  payable  under the Plan
                         shall be determined by using the salary  history of the
                         former   Employee   during  his  employment   with  the
                         Employer,  or any Affiliated Employer, as calculated in
                         accordance with Section 5.4.

                  (c) Notwithstanding paragraph (b) above, with respect to this
         form of benefit, a former Employee may elect, in lieu of receiving the
         annuity component as a single life annuity, to receive his benefit in a
         manner similar to the forms of payment described in Section 7.1(a),
         (b), (c), or (d). If one of these alternatives is elected, the annuity
         and lump sum component will be adjusted as follows:

          (1) Alternative 1

               (A)  Annuity Component:  The form of payment described in Section
                    7.1(a) but which is calculated based on eighty percent (80%)
                    of the single  life  annuity  provided in  paragraph  (b)(1)
                    above.

               (B)  Lump Sum Component: A lump sum equal to eighty percent (80%)
                    of the amount provided in paragraph (b)(2) above.

          (2) Alternative 2

               (A)  Annuity Component:  The form of payment described in Section
                    7.1(b) but which is calculated based on ninety percent (90%)
                    of the single  life  annuity  provided in  paragraph  (b)(1)
                    above.

               (B)  Lump Sum Component: A lump sum equal to ninety percent (90%)
                    of the amount provided in paragraph (b)(2) above.

          (3) Alternative 3

               (A)  Annuity Component:  The form of payment described in Section
                    7.1(c) but which is calculated based on seventy-five percent
                    (75%) of the  single  life  annuity  provided  in  paragraph
                    (b)(1) above.

               (B)  Lump Sum Component: A lump sum equal to seventy-five percent
                    (75%) of the amount provided in paragraph (b)(2) above.

          (4) Alternative 4

               (A)  Annuity Component:  The form of payment described in Section
                    7.1(d) but which is calculated based on eighty-eight percent
                    (88%) of the  single  life  annuity  provided  in  paragraph
                    (b)(1) above.

               (B)  Lump Sum Component: A lump sum equal to eighty-eight percent
                    (88%) of the amount provided in paragraph (b)(2) above.

                                      XIV.

         Section 8.2 should be deleted in its entirety and replaced with the
following:

                  8.2 Early distribution of vested benefit. If an Employee
         terminates from service before his fifty-fifth (55th) birthday and is
         entitled to receive in accordance with Section 8.1 Retirement Income
         commencing at his Normal Retirement Date and at the time his service
         terminated he had at least ten (10) Years of Accredited Service, he
         may, in lieu of receiving payment of such Retirement Income commencing
         at Normal Retirement Date, elect to receive such Retirement Income
         commencing as of the first day of any month after his fifty-fifth
         (55th) birthday but preceding his Normal Retirement Date in an amount
         equal to his Accrued Retirement Income at the date of termination of
         his service actuarially reduced in accordance with reasonable actuarial
         assumptions adopted by the Retirement Board. An election pursuant to
         this Section 8.2 to have Retirement Income commence prior to Normal
         Retirement Date shall be made on a prescribed form and shall be filed
         with the Retirement Board (or its delegee) at least thirty (30) days
         before Retirement Income is to commence.

                  Effective for Employees who have an Hour of Service on or
         after January 1, 1996 and who (a) are not covered by the terms of a
         collective bargaining agreement or (b) are covered by the terms of a
         collective bargaining agreement but where the bargaining unit
         representative and the Employer have mutually agreed to participation
         in the Plan as amended, the term "fiftieth (50th)" shall replace
         "fifty-fifth (55th)" in the preceding paragraph. If any such Employee
         commences receipt of his Retirement Income after attaining age fifty
         (50) but before attaining age fifty-five (55), the Employee's
         Retirement Income shall be determined as in the preceding paragraph
         including an additional reduction of one-third of one percent (0.33%)
         for each calendar month by which the commencement date precedes the
         first day of the month following such Employee's attainment of his
         fifty-fifth (55th) birthday.

                                       XV.

         Section 8.4 should be deleted in its entirety and replaced with the
following:

                  8.4 Cash-out and buy-back. (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 under Section 4.6, or
         retirement under Article III, is not more than $3,500 (or such greater
         amount as permitted by the regulations prescribed by the Secretary of
         the Treasury), the Employer shall direct that such present value of the
         Employee's Accrued Retirement Income be paid in a lump sum, in cash, to
         such terminated Employee. The present value of the Accrued Retirement
         Income shall be calculated as of the date of distribution of the lump
         sum applying the Applicable Interest Rate as defined in Section 8.5(e)
         in effect on the first day of the Plan Year of distribution or in
         accordance with Section 8.5(g), as applicable. For purposes of this
         Section 8.4, if the present value of the Employee's vested Accrued
         Retirement Income is zero, the Employee shall be deemed to have
         received a distribution of such vested Retirement Income.

                  (b) If such terminated Employee is subsequently reemployed and
         becomes covered under this Plan, the calculation of his Accrued
         Retirement Income shall be without regard to his years of Accredited
         Service prior to any One-Year Breaks in Service, unless the amount of
         such payment is repaid to the Trust, plus interest at the rate
         determined under Section 411(c)(2)(C) of the Code. If such amount (plus
         interest) is repaid, the Employee's Retirement Income shall be
         calculated based on his years of Accredited Service before and after
         any One-Year Breaks in Service. Any repayment of a cash-out made
         pursuant to this Section 8.4 shall be made before the earlier of (a)
         five (5) years after the date on which the Employee is reemployed by
         the Employer or an Affiliated Employer, or (b) the close of the first
         period of five (5) consecutive One-Year Breaks in Service commencing
         after the distribution. If an Employee has been deemed to receive a
         distribution in accordance with paragraph (a) and is then reemployed,
         upon such reemployment, the amount of the deemed distribution shall be
         restored to the Employee.

                  (c) Notwithstanding paragraph (b) above, effective on or after
         July 15, 1996, a terminated Employee who has been paid a lump sum of
         the present value of his Accrued Retirement Income in accordance with
         paragraph (a) above shall not be entitled to repay this amount to the
         Trust. If such terminated Employee is subsequently reemployed and
         attains his Early Retirement Date, Normal Retirement Date, or Deferred
         Retirement Date, or terminates service for any reason subject to the
         requirements of Section 8.1 or 8.2, the Employee shall receive
         Retirement Income based on all Accredited Service, including Accredited
         Service earned prior to reemployment, but reduced by the Actuarial
         Equivalent of the lump sum payment made in accordance with paragraph
         (a).

                                      XVI.

         Section 8.5 should be amended by adding the following new paragraph (g)
to the end thereof:

                  (g) Notwithstanding paragraph (c) and (e) above, effective for
         Employees who will commence receipt of their Retirement Income on or
         after October 1, 1996, the present value of such Employee's vested
         Accrued Retirement Income under Section 8.4 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 in effect on the date as of which the present value
         is being determined.

                                      XVII.

         Section 8.7 should be amended by deleting the first paragraph in its
entirety and replacing it with the following:

                  8.7 Requirement for Direct Rollovers. This Section 8.7 applies
         to distributions made from the Plan on or after January 1, 1993.
         Notwithstanding any provision of the Plan to the contrary that would
         otherwise limit a Distributee's election under this Article VIII, a
         Distributee may elect on a prescribed form to have any portion of an
         Eligible Rollover Distribution paid directly to an Eligible Retirement
         Plan specified by the Distributee in a Direct Rollover.

                                     XVIII.

         Section 10.2 should be amended by deleting the second paragraph in its
entirety and replacing it with the following:

                  The members of the Retirement Board shall elect a Chairman
         from their number, and a Secretary who may be but need not be one of
         the members of the Retirement Board, and shall designate an actuary to
         act in actuarial matters relating to the Plan. They may appoint from
         their number such committees with such powers as they shall determine,
         may authorize one or more of their number or any agent to make any
         payment in their behalf, or to execute or deliver any instrument except
         that a requisition for funds from the Trustee shall be signed by two
         (2) members of the Retirement Board unless the Retirement Board
         determines in writing to delegate such requisition authority.

                                      XIX.

         Section 10.3 should be amended by deleting the last paragraph in its
entirety and replacing it with the following:

                  Any action by the Retirement Board under this Section 10.3
         shall be binding and conclusive. To the extent that the Retirement
         Board delegates any of the foregoing duties or functions to another
         party, the Retirement Board retains the ultimate authority to act in
         accordance with this Section 10.3.

                                       XX.

         Section 15.1(a) should be deleted in its entirety and replaced with the
following:

                  (a) "Pensioned Employee" means a former Employee of the
         Employer who is eligible, or becomes eligible pursuant to Section 3.2
         as amended, to receive Retirement Income after his retirement at his
         Early, Normal, or Deferred Retirement Date, as applicable. A "Pensioned
         Employee" shall not include any former Employee who terminated his
         service with the Employer prior to his Early, Normal, or Deferred
         Retirement Date and who is entitled to Retirement Income under Section
         8.1 or 8.2 of the Plan; a Key Employee, as defined in Section 14.6(g);
         or effective January 1, 1991, any Pensioned Employee of an Employer
         that has adopted the Plan pursuant to Section 14.1 hereof but does not
         provide medical benefits to its Pensioned Employees.

                                      XXI.

         Section 15.2(b) should be deleted in its entirety and replaced with the
following:

                  (b) An Employee who becomes a Pensioned Employee on or after
         January 1, 1989 shall be eligible for coverage on the date he becomes a
         Pensioned Employee, provided he was covered, or is deemed covered as
         determined by the Retirement Board, as an Employee under a group
         medical plan maintained by the Employer immediately prior to the time
         he became a Pensioned Employee.


         IN WITNESS WHEREOF, Mississippi Power Company through its duly
authorized officer, has adopted this Third Amendment to the Pension Plan for
Employees of Mississippi Power Company this ____ day of _________________, 1996,
to be effective as stated herein.


                                       MISSISSIPPI POWER COMPANY

                                       By: _______________________________

                                       Title:_____________________________


ATTEST:


By:  ____________________________

Title:___________________________


(CORPORATE SEAL)