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                                                                 EXHIBIT 4(e)(3)

                             FIRST AMENDMENT TO THE
                BOOKS-A-MILLION, INC. 401(k) PROFIT SHARING PLAN

Books-A-Million, Inc. (the "Employer") having heretofore adopted the
Books-A-Million, Inc. 401(k) Profit Sharing Plan, a prototype plan document
consisting of the Plan Agreement #001 and the Putnam Basic Plan Document #07
(the "Plan") effective as of February 1, 1996, pursuant to the power reserved to
the Employer in Section 17.1 of the Plan, hereby amends the Plan Agreement as
set forth below.

1. Page 24, Section titled "Investment Options" of the Plan Agreement is hereby
amended effective August 1, 1998 by striking said subsection in its entirety and
by substituting the following new paragraph in lieu thereof:

         INVESTMENT OPTIONS
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         The Employer hereby elects the following as the investment options
         available under the Plan:

         PUTNAM MONEY MARKET FUND             GEORGE PUTNAM FUND

         FEDERAL INCOME TRUST                 EQUITY INCOME FUND

         PUTNAM VOYAGER FUND                  CAPITAL APPRECIATION FUND

         BOOKS-A-MILLION STOCK

         The following investment option shall be the default option: Putnam
         Money Market Fund (select the default option from among the investment
         options listed above.)

2. Subsection (b) of Section 8 of the Plan Agreement is hereby amended effective
August 1, 1998 by striking said subsection in its entirety and by substituting
the following new paragraph in lieu thereof:

         (8)  Entry Dates. Each employee in an eligible class who completes the
              age and service requirements specified above will begin to
              participate in the Plan on (check one):

              [ ]  (a)  The first day of the month in which he fulfills the
                        requirements.

              [X]  (b)  The first of the following dates occurring after he
                        fulfills the requirements (check one):

                        [ ]  (i)  The first day of the month following the date
                                  he fulfills the requirements (monthly).
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                         [X]  (ii)  The first day of the first, fourth,
                                    seventh and tenth months in a Plan
                                    Year (quarterly).

                         [ ]  (iii) The first day of the first month and the
                                    seventh month in a Plan Year
                                    (semiannually).

                         [ ]  (c)   Other: _____ (May be no later than (i) the
                                    first day of the Plan Year after which he
                                    fulfills the requirements, and (ii) the
                                    date six months after the date on which he
                                    fulfills the requirements, whichever
                                    occurs first.)


In all other respects, the Plan provisions remain in full force and effect.

IN WITNESS, WHEREOF, the Employer has caused the First Amendment to the Plan to
be duly executed in its name and behalf and its corporate seal to be affixed
this _____ day of ______.

ATTEST:

Books-A-Million, Inc.                   Putnam Fiduciary Trust Company

By: /s/ SANDRA B. COCHRAN               By: /s/ Christopher Mastrianni
   ----------------------------------       ---------------------------------

Title:                                  Title: Vice President
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Date:                                   Date: 7/14/98
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