Document:

Exhibit 10.31

                                SOUTHERN COMPANY

                       OMNIBUS INCENTIVE COMPENSATION PLAN

                              Amended and Restated

                             Effective May 23, 2001

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                                    Contents

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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                                Southern Company
                       Omnibus Incentive Compensation Plan

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     2.39.  "Subsidiary"  means any  corporation,  partnership,  joint  venture,
limited  liability  company,  or other entity (other than the Company)  which is
part of an unbroken chain of entities beginning with the Company if, at the time
of the granting of an Award,  each of the entities in the unbroken  chain (other
than the last entity) owns more than 50% of the total  combined  voting power in
one of the other entities in such chain.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

         4.2......Adjustments in Authorized Shares. In the event of any change
in corporate capitalization, such as a stock split, stock dividend or
reclassification, or a corporate transaction, such as any merger, consolidation,
separation, including a spin-off, or other distribution of stock or property of
the Company, any reorganization (whether or not such reorganization comes within
the definition of such term in Code Section 368) or any partial or complete
liquidation of the Company, such adjustment shall be made in the number and
class of Shares which may be delivered under Section 4.1, in the number and
class of and/or price of Shares subject to outstanding Awards granted under the
Plan, and in the Award limits set forth in Section 4.1 as may be determined to
be appropriate and equitable by the Committee, in its sole discretion, to
prevent dilution or enlargement of rights; provided, however, that the number of
Shares subject to any Award shall always be a whole number.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

         6.9......Transferability of Options.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          (a) Earnings per share;

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

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

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

          (e) Earnings before or after taxes;

          (f) Gross revenues;

          (g) Gross margins;

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

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

          (j) Operating margins;

          (k) Market share;

          (l) Revenues growth;

          (m) Capacity utilization;

          (n) Increase in customer base;

          (o) Environmental health and safety;

          (p) Diversity; and

          (q) Quality.

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

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

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

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

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

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

Article 12........Deferrals

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

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

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

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

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

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

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

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

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

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

Article 15........Withholding

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

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

Article 16........Indemnification

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

Article 17........Successors

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

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

                                     SOUTHERN COMPANY

                                      By:/s/H. Allen Franklin
                                      H. Allen Franklin
                                      Chairman of the Board, President and
                                      Chief Executive Officer

ATTEST:

By:__________________________________________________
       Patricia L. Roberts
       Assistant SecretaryExhibit 10.32

                              THE SOUTHERN COMPANY
                                  PENSION PLAN

                         EFFECTIVE AS OF JANUARY 1, 1997

<PAGE>

<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

                                                                                                               Page

Article I - Definitions

<S>                                                                                                           <C>
Article II - Eligibility

         2.1   Employees.........................................................................................15
         2.2   Employees represented by a collective
                  bargaining agent...............................................................................15
         2.3   Persons in military service and Employees
                  on authorized leave of absence.................................................................15
         2.4   Employees reemployed..............................................................................16
         2.5   Participation upon return to eligible class.......................................................16
         2.6   Exclusion of certain categories of employees......................................................17
         2.7   Waiver of participation...........................................................................17

Article III - Retirement

         3.1   Retirement at Normal Retirement Date..............................................................18
         3.2   Retirement at Early Retirement Date...............................................................18
         3.3   Retirement at Deferred Retirement Date............................................................18

Article IV - Determination of Accredited Service

         4.1   Accredited Service pursuant to Prior Plan.........................................................19
         4.2   Accredited Service................................................................................19
         4.3   Accredited Service and Years of Service
                  in respect of service of certain
                  Employees previously employed by
                  an Employing Company or by certain
                  Affiliated Employers...........................................................................20
         4.4   Accrual of Retirement Income during period
                  of total disability............................................................................21
         4.5   Employees leaving Employer's service..............................................................22
         4.6   Transfers to or from Savannah Electric
                  and Power Company..............................................................................23

Article V - Retirement Income

         5.1   Normal Retirement Income..........................................................................25
         5.2   Minimum Retirement Income payable upon
                  retirement at Normal Retirement Date
                  or Deferred Retirement Date....................................................................25
         5.3   Minimum Retirement Income upon retirement
                  at Early Retirement Date or upon
                  termination of service by reason of
                  death or otherwise prior to retirement.........................................................26
         5.4   Calculation of Social Security Offset.............................................................26
         5.5   Early Retirement Income...........................................................................27
         5.6   Deferred Retirement Income........................................................................28
         5.7   Payment of Retirement Income......................................................................28
         5.8   Termination of Retirement Income..................................................................29
         5.9   Required distributions............................................................................30
         5.10  Suspension of Retirement Income for
                  reemployment...................................................................................32
         5.11  Increase in Retirement Income of retired
                  Employees......................................................................................32
         5.12  Special provisions relating to the
                  treatment of absence of an Employee
                  from the service of an Employing
                  Company to serve in the Armed Forces
                  of the United States...........................................................................33

Article VI - Limitations on Benefits

         6.1   Maximum Retirement Income.........................................................................35
         6.2   Adjustment to Defined Benefit Dollar
                  Limitation for Early or Deferred
                  Retirement.....................................................................................36
         6.3   Adjustment of limitation for Years of
                  Service or participation.......................................................................37
         6.4   Limitation on benefits from multiple plans........................................................37
         6.5   Special rules for plans subject to overall
                  limitations under Code Section 415(e)..........................................................38
         6.6   Combination of Plans..............................................................................39
         6.7   Incorporation of Code Section 415.................................................................39

Article VII - Provisional Payee

         7.1   Adjustment of Retirement Income to provide
                  for payment to Provisional Payee...............................................................40
         7.2   Form and time of election and notice
                  requirements...................................................................................41
         7.3   Circumstances in which election and
                  designation are inoperative....................................................................42
         7.4   Pre-retirement death benefit......................................................................43
         7.5   Post-retirement death benefit - qualified
                  joint and survivor annuity.....................................................................45
         7.6   Election and designation by former
                  Employee entitled to Retirement Income
                  in accordance with Article VIII................................................................45
         7.7   Death benefit for Provisional Payee of
                  former Employee................................................................................47
         7.8   Limitations on Employee's and Provisional
                  Payee's benefits...............................................................................48
         7.9   Effect of election under Article VII..............................................................48
         7.10  Effects of change in retirement at Early
                  Retirement Date................................................................................48
         7.11  Commencement of new optional forms of
                  payment........................................................................................49
         7.12  Special form of benefit for former
                  Employees......................................................................................50

Article VIII - Termination of Service

         8.1   Vested interest...................................................................................53
         8.2   Early distribution of vested benefit..............................................................53
         8.3   Years of Service of reemployed Employees..........................................................54
         8.4   Cash-out and buy-back.............................................................................55
         8.5   Calculation of present value for cash-out
                  of benefits and for determining amount
                  of benefits....................................................................................56
         8.6   Retirement Income under Prior Plans...............................................................56
         8.7   Requirement for Direct Rollovers..................................................................57

Article IX - Contributions

         9.1   Contributions generally...........................................................................59
         9.2   Return of Employing Company contributions.........................................................59
         9.3   Expenses..........................................................................................60

Article X - Administration of Plan

         10.1  Retirement Board..................................................................................61
         10.2  Organization and transaction of business
                  of Retirement Board............................................................................61
         10.3  Administrative responsibilities of
                  Retirement Board...............................................................................62
         10.4  Retirement Board, the "Administrator".............................................................62
         10.5  Fiduciary responsibilities........................................................................63
         10.6  Employment of actuaries and others................................................................63
         10.7  Accounts and tables...............................................................................64
         10.8  Indemnity of members of Retirement Board..........................................................64
         10.9  Areas in which the Retirement Board
                  does not have responsibility...................................................................64
         10.10 Claims Procedures.................................................................................65

Article XI - Management of Trust

         11.1  Trust.............................................................................................66
         11.2  Disbursement of the Trust Fund....................................................................66
         11.3  Rights in the Trust...............................................................................66
         11.4  Merger of the Plan................................................................................67

Article XII - Termination of the Plan
         12.1  Termination of the Plan...........................................................................68
         12.2  Limitation on benefits for certain
                  highly paid employees..........................................................................68

Article XIII - Amendment of the Plan

         13.1  Amendment of the Plan.............................................................................70

Article XIV - Special Provisions

         14.1  Exclusive benefit.................................................................................71
         14.2  Assignment or alienation..........................................................................71
         14.3  Voluntary undertaking.............................................................................72
         14.4  Top-Heavy Plan requirements.......................................................................72
         14.5  Determination of Top-Heavy status.................................................................72
         14.6  Minimum Retirement Income for Top-Heavy
                  Plan Years.....................................................................................76
         14.7  Vesting requirements for Top-Heavy Plan Years.....................................................77
         14.8  Adjustments to maximum benefits for
                  Top-Heavy Plans................................................................................78

Article XV - New Pension Program

         15.1  Eligibility.......................................................................................79
         15.2  Retirement Income payable upon retirement.........................................................79
         15.3  Early Retirement Reduction........................................................................80
         15.4  Transfers from Savannah Electric and
                  Power Company..................................................................................80
         15.5  Effect on other Plan provisions...................................................................80

Article XVI - Special Provisions Concerning Certain
              of Southern Electric International, Inc.

         16.1  Eligibility and Recognition of Service for
                  Former Employees of Scott Paper Company........................................................82
</TABLE>

Appendix A

Schedules

         Alabama Power Company
         Georgia Power Company
         Gulf Power Company
         Mississippi Power Company
         Southern Company Services, Inc.
         Southern Nuclear Operating Company, Inc.

<PAGE>

                             Introductory Statement

         The Southern Company Pension Plan, effective as of January 1, 1997 and
hereinafter set forth (the "Plan"), is a modification and continuation of the
Pension Plan for Employees of Southern Company Services, Inc. which originally
became effective November 1, 1949, and which has been amended from time to time.

         Effective January 1, 1997, the following other plans are merged into
the Plan:

         o        Pension Plan for Employees of Alabama Power Company
         o        Pension Plan for Employees of Georgia Power Company
         o        Pension Plan for Employees of Gulf Power Company
         o        Pension Plan for Employees of Mississippi Power Company
         o        Pension  Plan  for  Employees  of  Southern  Company
                  Services,  Inc.,  as  adopted  by  Southern
                  Communications Services, Inc.
         o        Pension  Plan  for  Employees  of  Southern  Company
                  Services,  Inc.,  as  adopted  by  Southern
                  Development and Investment Group, Inc.
         o        Pension Plan for Employees of Southern Company  Services,
                  Inc., as adopted by Southern  Electric
                  International, Inc.
         o        Pension Plan for Employees of Southern Nuclear Operating
                  Company, Inc.

         Employees participating in the Merged Plans and employed by an
Employing Company on January 1, 1997 shall become immediately covered under the
Plan and upon the merger such Employees shall be eligible to receive a benefit
immediately after the merger which is equal to or greater than the benefit they
would have been entitled to receive immediately before the merger. In addition,
notwithstanding any provision of the Plan, the terms of the Prior Plans govern
an Employee's circumstances with regard to actions taken or occurring before
January 1, 1997.

         To the extent that different terms and conditions exist under the
Merged Plans and must be protected in the Plan in accordance with requirements
under the Code and ERISA, these differences are set forth in schedules attached
to and incorporated into the Plan and supersede any inconsistent provisions
otherwise set forth in the Plan.

         Retirement Income of former Employees (or Provisional Payees of former
Employees) who retired in accordance with the provisions of the Prior Plans is
payable in accordance with the provisions of the Prior Plans.

         All contributions made by the Employing Companies to this Plan are
expressly conditioned upon the continued qualification of the Plan under Section
401(a) of the Code, including any amendments to the Plan, and upon the
deductibility of such contributions by the Employing Companies pursuant to
Section 404 of the Code.

<PAGE>

                                    Article I

                                   Definitions

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

         1.1 "Accrued Retirement Income" means with respect to any Employee at
any particular date, the Retirement Income, determined pursuant to Section 5.1
as may be modified by Article 15, commencing on his Normal Retirement Date which
would be payable to such Employee in the form of a single life annuity on the
basis of his Accredited Service to the date as of which the computation of
Retirement Income is made.

         1.2 "Accredited Service" means with respect to any Employee included in
the Plan, the period of service as provided in Article IV.

         1.3 "Actuarial Equivalent" means a benefit of equivalent value when
computed on the basis of five percent (5%) interest per annum, compounded
annually and the 1951 Group Annuity Mortality Table for males. The ages for all
Employees under the above table shall be set back six (6) years and the ages for
such Employees' spouses shall be set back one year. All actuarial adjustments
and actuarial determinations required and made under the terms of the Plan shall
be calculated in accordance with such assumptions.

         1.4 "Affiliated Employer" means an Employing Company and any
corporation which is a member of a controlled group of corporations (as defined
in Section 414(b) of the Code) which includes such Employing Company; any trade
or business (whether or not incorporated) which is under common control (as
defined in Section 414(c) of the Code) with such Employing Company; any
organization (whether or not incorporated) which is a member of an affiliated
service group (as defined in Section 414(m) of the Code) which includes such
Employing Company; and any other entity required to be aggregated with such
Employing Company pursuant to regulations under Section 414(o) of the Code.

         1.5 "Average Monthly Earnings" means the greater of: (a) an Employee's
Monthly Earnings averaged over the three (3) highest Plan Years of participation
which shall produce the highest monthly average within the last ten (10) Plan
Years; or (b) an Employee's Monthly Earnings averaged over the three (3) highest
Plan Years of participation which shall produce the highest monthly average
within the last ten (10) Plan Years during which the Employee actively performed
services for an Employing Company. If an Employee has completed less than three
(3) Plan Years of participation upon his termination of employment, his Average
Monthly Earnings will be based on his Earnings during his participation to his
date of termination.

         1.6      "Board of Directors" means the Board of Directors of Southern
 Company Services, Inc.

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

         1.8 "Deferred Retirement Date" means the first day of the month after a
retirement subsequent to the Normal Retirement Date.

         Employment subsequent to Normal Retirement Date shall be deemed to be a
retirement if an Employee has less than forty (40) Hours of Service during a
calendar month.

         1.9      "Defined  Benefit Dollar  Limitation"  means the limitation
set forth in Section  415(b)(1)(A) or
(d) of the Code.

         1.10     "Defined  Contribution Dollar Limitation" means the
 limitation set forth in Section  415(c)(1)(A) of the Code.

         1.11     "ERISA" means the Employee Retirement Income Security Act of
 1974, as amended from time to time.

         1.12 "Early Retirement Date" means the first day of the month following
the retirement of an Employee on or after his fifty-fifth (55th) birthday and
before his sixty-fifth (65th) 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 an Employing Company have
mutually agreed to participation in the Plan, the term "fiftieth (50th)" shall
replace "fifty-fifth (55th)" in the preceding paragraph.

         1.13 (a) "Earnings" with respect to any Employee including any Employee
whose service is terminated by reason of disability (as defined in Section 4.4)
means (1) the highest annual rate of salary or wages of an Employee of any
Affiliated Employer within any Plan Year before deductions for taxes, Social
Security, etc., (2) all amounts contributed by any Affiliated Employer to The
Southern Company Employee Savings Plan as Elective Employer Contributions, as
said term is described under Section 4.1 of such plan, pursuant to the
Employee's exercise of his deferral option made thereunder in accordance with
the requirements of Section 401(k) of the Code, and (3) all amounts contributed
by any Affiliated Employer to The Southern Electric System Flexible Benefits
Plan or The Southern Company Flexible Benefits Plan on behalf of an Employee
pursuant to his salary reduction election, and applied to provide one or more of
the optional benefits available under such plan, but (4) shall exclude all
amounts deferred under any non-qualified deferred compensation plan maintained
by any Affiliated Employer.

         (b) Notwithstanding the above, "Earnings" with respect to any
commissioned salesperson means the salary or wages of an 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.

         (c) With respect to an Employee whose service terminates because of a
disability under Section 4.4, Earnings shall be deemed to continue in effect
throughout the period of the Employee's Disability Leave, as also defined in
Section 4.4.

         (d) With respect to an Employee on approved leave of absence to serve
in the Armed Forces of the United States, Earnings shall be determined for the
recognized period of his absence at the rate which is paid to him on the day he
returns to the service of an Affiliated Employer or at the rate which was
payable to him at the time he left the employment of an Employing Company to
enter the Armed Forces of the United States, if such amount was greater.

         (e) For Plan Years beginning after December 31, 1988 and prior to
January 1, 1994, the annual compensation of each Employee taken into account for
purposes of this Plan shall not exceed $200,000 (as adjusted by the Secretary of
Treasury). The imposition of this limitation shall not reduce an Employee's
Retirement Income below the amount as determined on December 31, 1988. In
addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual compensation of each Employee
taken into account under the Plan shall not exceed $150,000, as adjusted for
increases in the cost of living in accordance with Code Section 401(a)(17). The
cost of living adjustment in effect for a calendar year applies to any period,
not exceeding twelve (12) months, over which compensation is determined (the
"determination period") beginning in such calendar year. If the determination
period is less than twelve (12) months, the limit shall be prorated.

         If compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current Plan Year
beginning on or after January 1, 1989 or January 1, 1994, as applicable, the
compensation for that prior determination period is subject to the $200,000 or
the $150,000 compensation limit in effect for that prior determination period.

         Notwithstanding any other provision in the Plan, each Employee's
Accrued Retirement Income under this Plan will be the greater of:

         (a)      the Employee's Accrued Retirement Income as of the last day of
                  the last Plan Year beginning before January 1, 1994, frozen in
                  accordance with Treasury Regulation Section 1.401(a)(4)-13, or

         (b)      the Employee's Accrued Retirement Income determined with
                  respect to the benefit formula applicable for the Plan Year
                  beginning on or after January 1, 1994, as applied to the
                  employee's total Years of Service taken into account under the
                  Plan for purposes of benefit accruals.

         1.14     "Effective Date" means January 1, 1997.

         1.15 "Eligibility Year of Service" is a Year of Service commencing on
the Employee's date of employment or reemployment or anniversary date thereof.

         1.16 "Employee" means any person who is currently employed by an
Employing Company as (a) a regular full-time employee, (b) a regular part-time
employee, (c) a cooperative education employee, or (d) a temporary employee
(whether full-time or part-time) paid directly or indirectly by an Employing
Company. The term also includes "leased employees" within the meaning of Section
414(n)(2) of the Code, unless the total number of leased employees constitutes
less than twenty percent (20%) of the Employing Company's non-highly compensated
workforce within the meaning of Section 414(n)(5)(C)(ii) and such leased
employees are covered by a plan described in Section 414(n)(5)(B) of the Code.

         1.17     "Employer" means Southern Company Services, Inc., and its
 successors.

         1.18 "Employing Company" means the Employer and any affiliate or
subsidiary of The Southern Company which the Board of Directors may from time to
time, and upon such terms and conditions as may be fixed by the Board of
Directors, determine to bring under the Plan, and any successor to them. The
Employing Companies are set forth on Appendix A to the Plan as updated from time
to time. No entity shall be treated as an Employing Company prior to the date it
adopts the Plan.

         1.19 "Full Current Costs" means the normal cost, as defined in Treasury
Regulation Section 1.404(a)-6, for all years since the Effective Date of the
Plan, plus interest on any unfunded liability during such period.

         1.20 "Hour of Service" means an Employee shall be credited with one
Hour of Service for each hour for which (a) he is paid, or entitled to payment,
for the performance of duties for an Affiliated Employer, and such hours shall
be credited to the Employee for the computation period or periods in which the
duties are performed; (b) he is paid, or entitled to payment, by an Affiliated
Employer on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability), layoff, jury
duty, military duty, or leave of absence in which case the Employee shall be
credited with Hours of Service for the computation period or periods in which
the period during which no duties were performed occurs; (c) back pay,
irrespective of mitigation of damages, has been either awarded or agreed to by
an Affiliated Employer, in which case the Employee shall be credited with Hours
of Service for the computation period or periods to which the award or agreement
pertains, rather than the computation period in which the award, agreement, or
payment is made; and (d) solely for the purpose of calculating Vesting Years of
Service, he was on any form of authorized leave of absence. The same Hours of
Service shall not be credited under clauses (a), (b), (c), and (d).

         An Employee who is entitled to be credited with Hours of Service in
accordance with clause (b) or (d) of this Section 1.20 shall be credited with
such number of Hours of Service for the period of time during which no duties
were performed as though he were in the active employment of an Employing
Company during such period of time. However, an Employee shall not be credited
with Hours of Service in accordance with clause (b) of this Section 1.20 for
unused vacation for which payment is received at termination of employment, or
if the payment which is made to him or to which he is entitled in accordance
with clause (b) is made or due under a plan maintained solely for the purpose of
complying with applicable Worker's Compensation, or unemployment compensation or
disability insurance laws, or if such payment is one which solely reimburses an
Employee for medical or medically related expenses incurred by the Employee.

         Provided there is no duplication of Hours of Service credited in
accordance with the foregoing provisions, if an Employee is on an approved leave
of absence to serve in the Armed Forces of the United States, he shall be
credited with such number of Hours of Service with respect to all or such
portion of the period of his absence to serve in the Armed Forces of the United
States as may be recognized under Sections 1.41(b), 2.3, and 4.2(a).

         The rules set forth in paragraphs (b) and (c) of Department of Labor
Regulations 2530.200b-2 are incorporated in the Plan by this reference and made
a part hereof.

         1.21     "Limitation Year" means the Plan Year.

         1.22     "Merged Plans" means the following:

                  Pension Plan for Employees of Alabama Power Company;

                  Pension Plan for Employees of Georgia Power Company;

                  Pension Plan for Employees of Gulf Power Company;

                  Pension Plan for Employees of Mississippi Power Company;

                  Pension  Plan  for  Employees  of  Southern  Company
                  Services,  Inc.,  as  adopted  by  Southern
                      Communications Services, Inc.;

                  Pension  Plan  for  Employees  of  Southern  Company
                  Services,  Inc.,  as  adopted  by  Southern
                   Development and Investment Group, Inc.;

                  Pension Plan for Employees of Southern Company  Services,
                  Inc., as adopted by Southern  Electric International, Inc.;
                  and

                  Pension Plan for Employees of Southern Nuclear Operating
                  Company, Inc.

         1.23 "Monthly Earnings" means one-twelfth (1/12) of the Earnings of an
Employee of an Affiliated Employer during a Plan Year.

         1.24 "Normal Retirement Date" means the first day of the month
following an Employee's sixty-fifth (65th) birthday, except that the Normal
Retirement Date of any Employee hired on or after his sixtieth (60th) birthday
shall be the fifth (5th) anniversary of his initial participation in the Plan.

         1.25 "One-Year Break in Service" means a twelve (12) consecutive month
period commencing on or after January 1, 1976 which would constitute a Year of
Service but for the fact that the Employee has not completed more than 500 Hours
of Service during such period.

         Solely for the purpose of determining whether a One-Year Break in
Service has occurred for eligibility or vesting purposes, an Employee who is
absent from work for maternity or paternity reasons shall receive credit for the
Hours of Service which would otherwise have been credited to such Employee but
for such absence, or in any case in which such hours cannot be determined, eight
(8) Hours of Service per day of such absence. In no event shall Hours of Service
credited under this paragraph be in excess of the amount necessary to prevent a
One-Year Break in Service from occurring. For purposes of this paragraph, an
absence from work for maternity or paternity reasons means an absence (a) by
reason of the pregnancy of the Employee, (b) by reason of a birth of a child of
the Employee, (c) by reason of the placement of a child with the Employee in
connection with the adoption of such child by such Employee, or (d) for purposes
of caring for such child for a period beginning immediately following such birth
or placement. The Hours of Service shall be credited under this paragraph: (a)
in the vesting or eligibility period in which the absence begins if the Hours of
Service credited are necessary to prevent a One-Year Break in Service in such
period, and (b) in all other cases, in the vesting or eligibility period
following the period in which the absence begins.

         1.26 "Past Service" means with respect to any Employee included in the
Plan, the period of his Accredited Service prior to January 1, 1997 as
determined under the Prior Plans.

         1.27 "Plan" means The Southern Company Pension Plan, as set forth
herein and as hereinafter amended, effective January 1, 1997.

         1.28 "Plan Year" means the twelve (12) month period commencing on the
first day of January and ending on the last day of December next following.

         1.29 "Plan Year of Service" is a Year of Service determined as if the
date of employment or reemployment is the first day of the Plan Year.

         1.30 "Prior Plans" means the Pension Plan for Employees of Southern
Company Services, Inc. and the Merged Plans in effect prior to January 1, 1997.
With respect to any particular Employee, Prior Plan means the last plan
described in the preceding sentence in which the Employee participated prior to
January 1, 1997.

         1.31 "Provisional Payee" means a spouse designated or deemed to have
been designated by an Employee or former Employee pursuant to Article VII to
receive Retirement Income on the death of the Employee or former Employee.

         1.32 "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 ninety (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
an Employing Company have mutually agreed to participation in the Plan, the term
"fiftieth (50th)" shall replace "fifty-fifth (55th)" in the preceding sentence.

         1.33 "Retirement Board" means the managing board of the Plan provided
for in Article X.

         1.34 "Retirement Date" means the Employee's Normal, Early, or Deferred
Retirement Date, whichever is applicable to him.

         1.35     "Retirement Income" means the monthly Retirement Income
provided for by the Plan.

         1.36 "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 an Employing Company
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 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:

         (a) With regard to an Employee described in Section 5.2, the Social
Security benefit shall be computed at retirement. In estimating the amount of
the Federal primary Social Security benefit to which the Employee would be
entitled, it shall be assumed that he will receive no wages for Social Security
purposes after his retirement on his Normal Retirement Date or Deferred
Retirement Date, and it will be further assumed in calculating his estimated
Federal primary Social Security benefit that the amount thereof will be the
amount determined under the recomputation provision, if applicable, of the
Social Security Act in effect at the time of his retirement.

         (b) With regard to an Employee described in Section 5.3(a), the Social
Security benefit to which it is estimated that he will be entitled at sixty-five
(65), shall be computed at the time of his retirement. In estimating the amount
of the Federal primary Social Security benefit to which the Employee would be
entitled at age sixty-five (65), it shall be assumed that he will receive no
wages for Social Security purposes after his Early Retirement Date, and it will
be further assumed in calculating his estimated Federal primary Social Security
benefit that the amount thereof will be the amount determined under the
recomputation provision, if applicable, of the Social Security Act in effect at
his Early Retirement Date.

         (c) With regard to an Employee described in Section 5.3(b), the Social
Security benefit to which it is estimated that he would have been entitled to
receive at age sixty-five (65) or his date of death, if later, had he not died,
shall be computed at the time of his death. In estimating the amount of Federal
primary Social Security benefit to which the Employee would have been entitled
at age sixty-five (65) or his date of death, if later, it shall be assumed that
he would not have received any wages for Social Security purposes after the date
of his death, and it will be further assumed in calculating his Federal primary
Social Security benefit that the amount thereof will be the amount determined
under the recomputation provision, if applicable, of the Social Security Act in
effect at the time of his death.

         (d) With regard to an Employee described in Section 5.3(c), the Social
Security benefit to which it is estimated that he will become entitled at age
sixty-five (65) or his date of termination, if later, shall be computed at the
date of termination. In estimating the amount of the Federal primary Social
Security benefit to which the Employee would be entitled at age sixty-five (65)
or his date of termination, if later, it shall be assumed that he will receive
no wages for Social Security purposes after his date of termination, and it will
be further assumed in calculating his estimated Federal primary Social Security
benefit that the amount thereof will be the amount determined under the
recomputation provision, if applicable, of the Social Security Act in effect at
his date of termination.

         (e) With regard to an Employee described in Section 5.3(d), the Social
Security benefit to which it is estimated that he would have been entitled to
receive at age sixty-five (65) or his initial date of disability, if later, had
he not become disabled, shall be computed at the time of his retirement. In
estimating the amount of Federal primary Social Security benefit to which the
Employee would have been entitled at age sixty-five (65) or his date of
disability, if later, it shall be assumed that he would have received wages for
Social Security purposes as specified in Section 5.4, and it will be further
assumed in calculating his estimated Federal primary Social Security benefit
that the amount thereof will be the amount determined under the recomputation
provision, if applicable, of the Social Security Act in effect at the time of
his retirement.

         1.37 "Social Security Retirement Age" means age sixty-five (65) if the
Employee attains age sixty-two (62) before January 1, 2000 (i.e., born before
January 1, 1938), age sixty-six (66) if the Employee attains age sixty-two (62)
after December 31, 1999, but before January 1, 2017 (i.e., born after December
31, 1937, but before January 1, 1955), and age sixty-seven (67) if the Employee
attains age sixty-two (62) after December 31, 2016 (i.e., born after December
31, 1954).

         1.38 "Trust" or "Trust Fund" means all such money or other property
which shall be held by the Trustee pursuant to the terms of the Trust Agreement
or pursuant to contracts with life insurance companies.

         1.39 "Trust Agreement" means the Trust agreement or agreements between
the Employer and the Trustee established for the purpose of funding the
Retirement Income to be paid.

         1.40 "Trustee" means the trustee or trustees acting as such under the
Trust Agreement, including any successor or successors.

         1.41 "Vesting Year of Service" means an Employee's Years of Service
including: (a) Years of Service with an Affiliated Employer; (b) active service
with the Armed Forces of the United States if the Employee entered or enters
active service or training in such Armed Forces directly from the employ of an
Employing Company and after discharge or release therefrom returns within ninety
(90) days to the employ of an Affiliated Employer or is deemed to return under
Section 2.3 because of the death of such Employee while in active service with
such Armed Forces; and (c) any period during which the Employee was on any other
form of authorized leave of absence. For purposes of this Section 1.41 in
determining Vesting Years of Service with respect to a period of absence
referred to in clause (b) or (c) of this Section 1.41, an Employee shall be
credited with Hours of Service as though the period of absence were a period of
active employment with the Affiliated Employer.

         Each Employee who participated in the Prior Plans shall be credited
with such Vesting Years of Service, if any, earned under such Prior Plans as of
December 31, 1996.

         1.42 "Year of Service" means with respect to an Employee in the service
of an Affiliated Employer:

         (a) a twelve (12) consecutive month period commencing on the Employee's
most recent date of hire by the Affiliated Employer (or date of reemployment as
provided in Section 2.4) and any subsequent twelve (12) consecutive month period
commencing on an anniversary date of such date of hire, provided he has
completed at least 1000 Hours of Service during each such twelve (12)
consecutive month period; and

         (b) to the extent not resulting in duplication, each Year of Service
restored to the Employee upon reemployment as provided in Section 8.3.

         An Employee's vested interest in his Accrued Retirement Income shall be
based on his Vesting Years of Service and an Employee's eligibility to
participate in the Plan pursuant to Article II shall be based on his Eligibility
Year of Service. Breaks in service will be measured on the same computation
period as the Year of Service.

         In the Plan and Trust Agreement, where the context requires, words in
the masculine gender include the feminine and neuter genders and words in the
singular include the plural and words in the plural include the singular.

<PAGE>

                              Article IIArticle II

                                   Eligibility

         2.1 Employees2.1 Employees. Each Employee participating in the Plan as
of January 1, 1997 shall continue to be included in the Plan. With respect to
Employees participating in Merged Plans as of December 31, 1996 who are employed
by an Employing Company on January 1, 1997, such Employees will be treated as
participating in the Plan as of January 1, 1997 for purposes of the preceding
sentence. Each other Employee, except as provided in this Article II, shall be
included in the Plan on the first day of the month next following the date on
which he first completes an Eligibility Year of Service.

         2.2 Employees represented by a collective bargaining agent2.2 Employees
represented by a collective bargaining agent. An Employee who is represented by
a collective bargaining agent may participate in the Plan, subject to its terms,
if the representative(s) of his bargaining unit and an Employing Company
mutually agree to participation in the Plan by members of his bargaining unit.

         2.3 Persons in military service and Employees on authorized leave of
absence2.3 Persons in military service and Employees on authorized leave of
absence. Any person not already included in the Plan who leaves or has left the
employ of an Employing Company to enter the Armed Forces of the United States or
is on authorized leave of absence without regular pay and who returns to the
employ of an Affiliated Employer within ninety (90) days after discharge from
such military service or on or before termination of his leave of absence,
shall, upon such return, be included in the Plan effective as of the first day
of the month next following the date on which he first met or meets the
eligibility requirement of Section 2.1. In determining whether an Employee
entering the service of an Affiliated Employer has completed an Eligibility Year
of Service, his Hours of Service prior to such authorized leave of absence
without regular pay or entry into the Armed Forces shall be taken into account,
and for purposes of Section 2.4, he shall be deemed not to have incurred a
One-Year Break in Service by reason of such absence.

         If an Employee dies while in active service with the Armed Forces of
the United States, such Employee shall be deemed to have returned to the employ
of an Employing Company on his date of death.

         An Employee not already included in the Plan who is on authorized leave
of absence and receiving his regular pay shall be considered credited with Hours
of Service as though the period of absence was a period of active employment
with an Employing Company, and he shall be included in the Plan if and when he
meets the requirements of this Article II regardless of whether he is, on the
date of such inclusion, on such leave of absence.

         2.4 Employees reemployed2.4 Employees reemployed. An Employee whose
service terminates at any time and who is reemployed as an Employee, unless
excluded under Section 2.6, will be included in the Plan as provided in Section
2.1 unless:

         (a)      prior to termination of his service he had completed at least
one Year of Service; and

         (b) upon his reemployment, to the extent provided in Section 8.3
without regard to Section 8.4, he is entitled to restoration of his Years of
Service, in which case he will be included in the Plan as of the date of his
reemployment.

         For purposes of determining Years of Service of an Employee who is
reemployed by an Affiliated Employer subsequent to a One-Year Break in Service,
a Year of Service subsequent to his reemployment shall be computed on the basis
of the twelve (12) consecutive month period commencing on his date of
reemployment or an anniversary thereof.

         2.5 Participation upon return to eligible class2.5 Participation upon
return to eligible class. If an Employee is a participant in the Plan before
July 1, 1991, the exclusion from participation provided in Section 2.6, as it
regards temporary employees, shall not apply with respect to such Employee, and
such Employee shall be eligible to participate in the Plan after July 1, 1991
whether or not he is classified as a temporary employee.

         If an Employee first becomes a participant on or after July 1, 1991, in
the event such Employee ceases to be a member of an eligible class of Employees
and becomes ineligible to participate, but has not incurred a One-Year Break in
Service, such Employee will participate immediately upon returning to an
eligible class of Employees. If such Employee incurred a One-Year Break in
Service, eligibility will be determined under Section 2.4 of the Plan.

         In all other instances, if an Employee is not a member of an eligible
class of Employees but then becomes a member of an eligible class, such Employee
will commence participation in the Plan as of the first day of the month next
following the later of (a) the date such Employee completes an Eligibility Year
of Service or (b) the date he becomes a member of an eligible class of
Employees.

         2.6 Exclusion of certain categories of employees2.6 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 1.16
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.

         2.7 Waiver of participation2.7Waiver of participation. Notwithstanding
the above, an Employee may elect voluntarily not to participate in the Plan. The
election not to participate must be communicated in writing to and acknowledged
by the Retirement Board (or its delegee) and shall be effective as of the date
set forth in such written waiver.

<PAGE>

                             Article IIIArticle III

                                   Retirement

         3.1 Retirement at Normal Retirement Date3.1 Retirement at Normal
Retirement Date. Each Employee eligible to participate in the Plan shall have a
nonforfeitable right to his Accrued Retirement Income by no later than his
sixty-fifth (65th) birthday, or in the case of any Employee hired on or after
his sixtieth (60th) birthday, the fifth (5th) anniversary of his initial
participation in the Plan. Notwithstanding the above, an Employee's Normal
Retirement Date shall be as provided in Section 1.24.

         3.2 Retirement at Early Retirement Date3.2 Retirement at Early
Retirement Date. An Employee having at least ten (10) Years of Accredited
Service (including any Accredited Service to which he is entitled under the
pension plan of any Affiliated Employer from which such Employee was transferred
pursuant to Section 4.6, or which was credited to him in accordance with Section
4.3) may elect to retire on an Early Retirement Date on or after his fifty-fifth
(55th) birthday and before his sixty-fifth (65th) birthday and to have his
Retirement Income commence on the first day of any month up to and including the
Employee's Normal Retirement Date.

         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 an Employing Company have
mutually agreed to participation in the Plan, the term "fiftieth (50th)" shall
replace "fifty-fifth (55th)" in the preceding paragraph.

         3.3 Retirement at Deferred Retirement Date3.3 Retirement at Deferred
Retirement Date. An Employee included in the Plan may remain in active service
after his Normal Retirement Date. The involuntary retirement of an Employee on
or after his Normal Retirement Date shall not be permitted solely on the basis
of the Employee's age, except in accordance with the provisions of the Age
Discrimination in Employment Act, as amended from time to time. Termination of
service of such an Employee for any reason after Normal Retirement Date shall be
deemed retirement as provided in the Plan.

<PAGE>

                              Article IVArticle IV

                       Determination of Accredited Service

         4.1 Accredited Service pursuant to Prior Plan4.1 Accredited Service
pursuant to Prior Plan. Each Employee who participated in the Prior Plans shall
be credited with such Accredited Service, if any, earned under such Prior Plans
as of December 31, 1996.

         4.2  Accredited Service4.2  Accredited Service.
              ------------------     ------------------

         (a) Each Employee meeting the requirements of Article II shall, in
addition to any Accredited Service to which he may be entitled in accordance
with Section 4.1, be credited with Accredited Service as set forth in (b) below.
Any such Employee who is on authorized leave of absence with regular pay shall
be credited with Accredited Service during the period of such absence. Any such
Employee who is on an approved leave of absence to serve in the Armed Forces of
the United States shall, subject to Sections 1.41(b) and 2.3, be credited with
Accredited Service during all or such portion of the period of his absence.
Employees on authorized leave of absence without regular pay, other than
Employees deemed to accrue Hours of Service under Section 4.4 and Employees
described in the preceding sentence, shall not be credited with Accredited
Service for the period of such absence.

         (b) For each Plan Year commencing after December 31, 1996, an Employee
included in the Plan who is credited with a Plan Year of Service shall be
credited with Accredited Service as follows:

                  (1)      if an Employee  completes  at least  1,680 Hours of
 Service in a Plan Year,  he shall be credited with one year of Accredited
Service;

                  (2) if an Employee completes less than 1,680 Hours of Service
         in a Plan Year, but not less than 1,000 Hours of Service, he shall be
         credited with one-twelfth (1/12) of a year of Accredited Service for
         each 140 Hours of Service; or

                  (3) if an Employee's initial eligibility in the Plan shall
         occur after the beginning of the Plan Year, and the Employee shall
         therefore have completed less than 1,000 Hours of Service in such Plan
         Year, he shall be credited with one-twelfth (1/12) of a year of
         Accredited Service for each 140 Hours of Service during such Plan Year
         after his inclusion in the Plan.

         (c) If an Employee (1) who has previously satisfied the eligibility
requirements under Article II shall again be included in the Plan at such time
which is after the beginning of the Plan Year, or (2) shall terminate his
employment for any reason before the close of such Plan Year and shall therefore
have completed less than 1,000 Hours of Service in such Plan Year, he shall be
credited with one-twelfth (1/12) of a year of Accredited Service for each 140
Hours of Service during such Plan Year after his inclusion in the Plan or before
his termination of employment in such Plan Year, as the case may be.

         (d) In addition to the foregoing, Accredited Service may include
Accredited Service accrued subsequent to a One-year Break in Service including
such Accredited Service which may be restored in accordance with the provisions
of Section 8.3.

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

         4.3 Accredited Service and Years of Service in respect of service of
certain Employees previously employed by an Employing Company or by certain
Affiliated Employers4.3 Accredited Service and Years of Service in respect of
service of certain Employees previously employed by an Employing Company or by
certain Affiliated Employers. An Employee in the service of an Employing Company
on January 1, 1976 or employed thereafter who meets the requirements of
paragraph (a) of this Section 4.3, in addition to any other Years of Service or
Accredited Service to which he may be entitled under the Plan, upon completion
of an Eligibility Year of Service where required under Section 8.3(c) (which
shall also be considered to be Accredited Service) shall be credited with such
number of Years of Service (and fractions thereof to the nearest whole month for
service prior to January 1, 1976) and such Accredited Service and Retirement
Income as shall be determined in accordance with the provisions of paragraphs
(b) and (c) of this Section 4.3.

         (a) (1) Such Employee shall have been employed prior to January 1, 1976
by an Employing Company or by a company which at that time was an Affiliated
Employer; (2) he shall have terminated his service with such Employing Company
or such Affiliated Employer other than by retirement and he shall not be
entitled to receive at any time any retirement income under the pension plan of
any such prior employer in respect of any period of time for which he shall
receive credit for Years of Service or Accredited Service under this Section
4.3; and (3) for Employees reemployed on or after January 1, 1985, the number of
consecutive One-Year Breaks in Service incurred by the Employee prior to the
date of his employment by an Employing Company does not equal or exceed the
greater of (A) five (5), or (B) the aggregate number of his Years of Service
(and fractions thereof to the nearest whole month for service prior to January
1, 1976) with an Employing Company and such Affiliated Employer. The years of
Accredited Service credited to an Employee reemployed prior to January 1, 1985,
with regard to years of Accredited Service immediately prior to the termination
of his service, shall be determined under the terms of the Prior Plans in effect
prior to January 1, 1985.

         (b) The number of Years of Service (and fractions thereof to the
nearest whole month for service prior to January 1, 1976) and the Accredited
Service, respectively, which shall be credited to such Employee shall be equal
to the respective number of his Years of Service (and fractions thereof to the
nearest whole month for service prior to January 1, 1976) and Accredited Service
which were forfeited by the Employee and not restored under the pension plans of
an Employing Company or an Affiliated Employer described in the preceding
paragraph.

         (c) There shall be credited to the Employee Retirement Income equal to
retirement income which was accrued by him under the pension plan of an
Employing Company or an Affiliated Employer during the period of his Accredited
Service which was forfeited and which is credited under the Plan in accordance
with this Section 4.3. The amount of Retirement Income credited in accordance
with this paragraph (c) shall be treated as Prior Plans Retirement Income for
purposes of determining the amount of Retirement Income to which the Employee is
entitled, and shall be determined in accordance with the provisions of the
pension plan of the Employing Company or the Affiliated Employer in effect at
the time the Employee's service with such Employing Company or the Affiliated
Employer terminated without regard to any minimum provisions of such pension
plan; for this purpose and if relevant in respect of the Employee, it shall be
assumed that the pension plan of the Employing Company or the Affiliated
Employer in effect at the time the Employee's service with such Employing
Company or the Affiliated Employer terminated contained provisions concerning
service in the Armed Forces of the United States as provided under the terms of
the Prior Plans. For Plan Years beginning after December 31, 1987, an Employee
who meets the requirements of paragraph (a) of this Section 4.3 shall be deemed
to have transferred to or from an Affiliated Employer for the purpose of the
transfer of assets or liabilities as provided under the terms of the Prior
Plans.

      4.4      Accrual of Retirement Income during period of total disability

4.4     Accrual  of   Retirement
Income during period of total disability.

         (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 an Employing Company, 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 an Employing Company; (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.

         (b) A disabled Employee who applies for and would be granted long-term
disability benefits under a long-term disability benefit plan of an Employing
Company, if it were not for the fact that the deductions therefrom attributable
to other disability benefits equal or exceed the amount of his unreduced benefit
under such long-term disability benefit plan of the Employing Company, will be
considered as being currently granted benefits under such long-term disability
benefit plan.

         (c) An Employee's Disability Leave shall be deemed to be a period for
which Hours of Service shall be credited to the Employee as though the period of
his Disability Leave were a period of active employment.

         (d) If an Employee's Disability Leave shall terminate prior to his
Normal Retirement Date and he shall fail to return to the employment of the
Employing Company within sixty (60) days after the termination of such leave,
his service shall be deemed to have terminated upon the termination of his
Disability Leave and his rights shall be determined in accordance with Article
VIII, unless at such time he shall be entitled to retire on an Early Retirement
Date, in which event his termination of service shall be deemed to constitute
his retirement under Section 3.2.

         (e) Notwithstanding the above, the years of Accredited Service for any
Employee whose initial date of disability occurred under the Prior Plans shall
be determined under the terms of the applicable Prior Plans.

         4.5 Employees leaving Employer's service4.5 Employees leaving
Employer's service. If the service of an Employee is terminated prior to
retirement as provided by Article III, such Employee will forfeit any Vesting
Years of Service and Accredited Service which he may have subject to possible
restoration of some or all of his Vesting Years of Service and Accredited
Service in accordance with Article VIII. The provisions of this Section 4.5
shall not affect the rights, if any, of an Employee under Article VIII nor shall
the rights of an Employee be affected during or by reason of a layoff, due to
lack of work, which continues for a period of one year or less, except that such
period of layoff shall not be deemed to be service with an Employing Company. If
the service of an Employee is terminated, or if he is not reemployed before the
expiration of one year after being laid off for lack of work, and he is
subsequently reemployed, he will be treated as provided in Section 3.2.

         Forfeitures arising by reason of an Employee's termination of service
for any reason shall not be applied to increase the benefits any Employee would
otherwise receive under the Plan but shall be used to reduce contributions of
the Employing Companies to the Plan.

         4.6      Transfers to or from Savannah Electric and Power Company

4.6   Transfers  to  or from Savannah  Electric and Power Company.

         (a) In the case of the transfer to an Employing Company of an employee
of Savannah Electric and Power Company ("SEPCO"), such Employee, if and when he
attains his Normal Retirement Date or Deferred Retirement Date, shall be
entitled to receive Retirement Income calculated pursuant to Section 5.1 or 5.2,
as appropriate, based upon his Accredited Service with an Employing Company and
Accredited Service attributable to actual service during his employment with
SEPCO. Such amount calculated in accordance with the preceding sentence shall be
reduced by the amount of retirement income calculated under the defined benefit
pension plan of SEPCO attributable to Accredited Service during his actual
service during his employment with SEPCO. Any Retirement Income based upon an
Employee's Accredited Service with an Employing Company and Accredited Service
attributable to actual service during his employment with SEPCO shall be subject
to the provisions of the Plan relating to Retirement Income payable at an Early
Retirement Date, or if such Retirement Income shall be payable in accordance
with the provisions of Section 8.2 or 8.6, subject to the provisions of such
Section.

         This Section 4.6 shall also apply in calculating the Retirement Income
payable under this Plan to a former employee of SEPCO who is hired by an
Employing Company and is entitled to credit for years of Accredited Service
under the Plan attributable to his actual service with SEPCO.

         (b) Subject to paragraph (a) above, in the case of an Employee who
transfers from an Employing Company to SEPCO, such Employee shall receive the
following Accredited Service under the Plan or Credited Service under the
Employees' Retirement Plan of Savannah Electric and Power Company (the "SEPCO
Plan"), as the case may be.

                  (1) With respect to service with an Employing Company through
         the date of transfer, Accredited Service shall be determined in
         accordance with the terms of the Plan in effect for such Employee as of
         his transfer date.

                  (2) With respect to the "Computation Year," as defined in the
         SEPCO Plan, in which the Employee transfers, Credited Service under the
         SEPCO Plan shall be equal to the greater of (a) the Credited Service
         that the Employee would be credited with under the SEPCO Plan during
         the entire Computation Year in which the transfer occurs without regard
         to the transfer of employment, or (b) Accredited Service earned under
         the terms of the Plan as of the date of transfer.

                  (3) With respect to Computation Years after the year in which
         the transfer occurs, the Employee shall receive Credited Service as
         determined in accordance with the terms of the SEPCO Plan.

         (c) Subject to paragraph (a) above, in the case of an Employee who
transfers from SEPCO to an Employing Company, such Employee shall receive the
following Accredited Service under the Plan or Credited Service under the SEPCO
Plan, as the case may be.

          (1) With respect to service with SEPCO through the date of
         transfer, Credited Service shall be determined in accordance with the
         terms of the SEPCO Plan in effect for such Employee as of his transfer
         date.

          (2) With  respect  to the Plan Year in which the  Employee  transfers,
     Accredited  Service  under the Plan shall be determined on the basis of the
     equivalency set forth in 29 C.F.R. ss. 2530.200b-3(e)(1)(i).

          (3) With  respect to Plan Years  after the year in which the  transfer
     occurs, Accredited Service under the Plan shall be determined in accordance
     with the terms of the Plan.

         (d) With respect to paragraphs (b) and (c) above, in no event is an
Employee subject to this Section 4.6 entitled to more than one (1) year of
Accredited Service or Credited Service as the case may be in the year of
transfer.

<PAGE>

                               Article V

                                Retirement Income

         5.1 Normal Retirement Income5.1 Normal Retirement Income. The monthly
Retirement Income payable as a single life annuity to an Employee included in
the Plan who retires from the service of an Employing Company at his Normal
Retirement Date after January 1, 1997, subject to the limitations of Article VI,
shall be the greater of (a) and (b):

         (a)      the amount determined under (1) or (2) below, whichever is
 greater:

                           (1) the Accrued Retirement Income determined in
                  accordance with Section 5.1 of the Prior Plans without regard
                  to the Minimum Retirement Income requirement, plus $25.00
                  times the Employee's years of Accredited Service earned after
                  December 31, 1996; and

                           (2)      $25.00 times an Employee's years of
 Accredited Service; and

         (b)      the Minimum Retirement Income as determined in accordance
 with Section 5.2.

         5.2 Minimum Retirement Income payable upon retirement at Normal
Retirement Date or Deferred Retirement Date5.2 Minimum Retirement Income payable
upon retirement at Normal Retirement Date or Deferred Retirement Date. The
monthly Minimum Retirement Income payable to an Employee (or his Provisional
Payee) who retires from the service of an Employing Company at his Normal
Retirement Date or Deferred Retirement Date (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 to his Normal Retirement Date or Deferred Retirement Date including a
Social Security Offset.

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

         5.3 Minimum Retirement Income upon retirement at Early Retirement Date
or upon termination of service by reason of death or otherwise prior to
retirement5.3 Minimum Retirement Income upon retirement at Early Retirement Date
or upon termination of service by reason of death or otherwise prior to
retirement. The monthly Minimum Retirement Income payable to an Employee (or his
Provisional Payee), if he shall retire on his Early Retirement Date, or if his
service shall terminate by reason of death or otherwise prior to retirement,
shall be determined in accordance with the following provisions:

         (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.

         (b) Upon termination of service by reason of the death of the Employee
prior to retirement and after the effective date of his Provisional Payee
designation or deemed designation, the Minimum Retirement Income for the purpose
of determining the Employee's Accrued Retirement Income upon which payment to
his Provisional Payee in accordance with Section 7.4 shall be based shall be an
amount equal to 1.70% of the Employee's Average Monthly Earnings multiplied by
his years (and fraction of a year) of Accredited Service to the date of his
death including a Social Security Offset.

         (c) For an Employee who terminates his service with an Employing
Company with entitlement to receive Retirement Income in accordance with Section
8.1, upon retirement at Early Retirement Date or Normal 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 to his
date of termination including a Social Security Offset.

         (d) Upon termination of service by reason of disability (as defined in
Section 4.4) of the Employee prior to retirement, provided such Employee does
not return to the service of an Employing Company prior to his Retirement Date,
the Minimum Retirement Income shall be an amount equal to 1.70% of the
Employee's Average Monthly Earnings multiplied by his years (and fraction of a
year) of Accredited Service to his Retirement Date including a Social Security
Offset.

         5.4 Calculation of Social Security Offset5.4 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 any Affiliated Employer, provided that in the event
that the Retirement Board (or its delegee) is unable to secure such actual
salary history within one hundred eighty (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:

                  (1) The salary history shall be estimated by applying a salary
         scale, projected backwards, to the Employee's compensation for W-2
         purposes from the Affiliated Employer which last employed the Employee
         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.

         5.5 Early Retirement Income5.5 Early Retirement Income. The monthly
amount of Retirement Income payable to an Employee who retires from the service
of an Employing Company 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 an Employing Company have
mutually agreed to participation in the Plan 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 any Affiliated Employer, as
calculated in accordance with Section 5.4.

         5.6 Deferred Retirement Income5.6 Deferred Retirement Income. The
monthly amount of Retirement Income payable to an Employee who retires from the
service of the Employer at his Deferred 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 5.2 based on his Accredited Service to his
Deferred Retirement Date.

         5.7 Payment of Retirement Income5.7 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 8.1, 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 an Employing Company have
mutually agreed to participation in the Plan, the term "fiftieth (50th)" shall
replace "fifty-fifth (55th)" in the preceding paragraph.

         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 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.

         5.8 Termination of Retirement Income5.8Termination of Retirement
Income. The monthly payment of Retirement Income will cease with the last
payment preceding the retired Employee's death; subject, however, to the
continuation of payments to a surviving Provisional Payee, if one has been
designated or deemed to have been designated, which likewise will cease with the
last payment preceding the death of the Provisional Payee. There shall be no
benefits payable under the Plan on behalf of any Employee whose death occurs
prior to his retirement, except as otherwise provided in Article VII with
respect to a Provisional Payee of an Employee. Following the death of an
Employee and of his Provisional Payee, if any, no further payments will be made
under the Plan on account of such Employee or to his estate.

         5.9  Required distributions

         (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 any
 Affiliated Employer.

         (b)      Required minimum distributions

                  (1) The payment of Retirement Income to any Employee shall
         begin April 1 of the calendar year following the calendar year in which
         the Employee attains age 70-1/2 or, if later, the calendar year in
         which such Employee retires. Notwithstanding the preceding sentence,
         with respect to any Employee who is a five-percent owner as defined in
         Section 14.5(g) with regard to the Plan Year ending in which the
         Employee attains age 70-1/2 or any Employee who commenced receipt of
         his Retirement Income in accordance with the minimum distribution
         provisions of the Prior Plans before January 1, 1997, the payment of
         Retirement Income shall commence no later than April 1 of the Plan Year
         following the Plan Year in which the Employee attains age 70-1/2.

                  (2) With respect to an Employee who commences receipt of
         Retirement Income while in active service, the amount of his Retirement
         Income shall be computed as of the end of the Plan Year the Employee
         attains age 70-1/2 and shall be recomputed as of the close of each Plan
         Year thereafter and preceding his actual retirement date. Any
         additional Retirement Income he accrues at the close of any Plan Year
         pursuant to the preceding sentence shall be offset (but not below zero)
         by the value of the benefit payments received in such Plan Year. With
         respect to the Plan Year of retirement, Retirement Income calculated at
         the Employee's Deferred Retirement Date shall be offset (but not below
         zero) by the value of the benefit payments received on or after January
         1 but before his retirement date in such Plan Year. The receipt by an
         Employee of any payments or distributions as a result of his attaining
         age 70-1/2 prior to his actual retirement or death shall in no way
         affect the entitlement of an otherwise eligible Employee to additional
         accrued benefits.

                  (3) With respect to an Employee who retires after attaining
         age 70-1/2 and who has not previously commenced receipt of his
         Retirement Income pursuant to this Section 5.9(b) while an Employee of
         an Affiliated Employer, he shall receive Retirement Income based on his
         actual retirement date, but which Retirement Income shall not be less
         than the Actuarial Equivalent of his Retirement Income as of the first
         of the month following attainment of age 70-1/2.

         (c)      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.

         (d)      Determining required minimum distributions

         Notwithstanding anything in this Plan to the contrary, all
distributions, including the minimum amounts which must be distributed each
calendar year, under this Plan shall be made in accordance with Code Section
401(a)(9) and the regulations thereunder.

         (e)      Minimum distribution transitional rules

         Any distribution made pursuant to Section 242(b)(2) of the Tax Equity
and Fiscal Responsibility Act of 1982 shall meet the requirements of Code
Section 401(a)(9) as in effect on December 31, 1983, and shall also satisfy Code
Sections 401(a)(11) and 417.

         5.10  Suspension of Retirement Income for reemployment

         (a) If a former Employee who is receiving Retirement Income shall be
reemployed by any Affiliated Employer as an Employee and shall not elect to
waive his right to participate under the Plan or the pension plan of the
Affiliated Employer, whichever applies, his Retirement Income shall cease during
each calendar month after his reemployment in which he completes forty (40) or
more Hours of Service. The Retirement Income payable upon his subsequent
retirement shall be reduced by the Actuarial Equivalent of any Retirement Income
he received prior to his reemployment.

         (b) No payment shall be withheld by the Plan pursuant to this Section
5.10 unless the Plan notifies the Employee by personal delivery or first class
mail during the first calendar month in which the Plan withholds payments that
his Retirement Income is suspended.

         (c) If the payment of Retirement Income has been suspended, payments
shall resume no later than the first day of the third calendar month after the
calendar month in which the Employee ceases to be employed in ERISA Section
203(a)(3)(B) service. The initial payment upon resumption shall include the
payment scheduled to occur in the calendar month when payments resume and any
amounts withheld during the period between the cessation of ERISA Section
203(a)(3)(B) service and the resumption of payments.

         5.11  Increase in Retirement  Income of retired  Employees

         Retirement Income payable on and after January 1, 1996 to an Employee
(or to the Provisional Payee of an Employee) who retired under the Prior Plans
at his Early Retirement Date, Normal Retirement Date, or Deferred Retirement
Date on or before 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 a former Employee who is not eligible
to retire but who is vested in a benefit (or the Provisional Payee of such
former Employee) for which payments have commenced on or before January 1, 1996
in accordance with the terms of the Prior Plans, except for Employees whose
Retirement Income has been cashed-out pursuant to the terms of the Prior Plans.

         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.

         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.

         5.12 Special provisions relating to the treatment of absence of an
Employee from the service of an Employing Company to serve in the Armed Forces
of the United States5.12 Special provisions relating to the treatment of absence
of an Employee from the service of an Employing Company to serve in the Armed
Forces of the United States.

         (a) Notwithstanding any other provisions of the Plan to the contrary,
contributions, benefits, and service credit with respect to qualified military
service will be provided in accordance with Section 414(u) of the Code.

         (b) Service to be credited to any Employee in accordance with this
Section 5.12 may be conditioned by the Retirement Board upon its receipt of (1)
such information pertaining to absence of an Employee or former Employee to
serve in the Armed Forces of the United States as it may request and (2) such
form of receipt and release as it may determine to be appropriate in the
circumstances.

<PAGE>

                              Article VIArticle VI

                             Limitations on Benefits

     6.1      Maximum  Retirement Income shall be subject to the provisions of
     Article VI.

         (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.

         (b) For purposes of Section 6.1, the term "average compensation for his
high three (3) years" shall mean the period of consecutive calendar years (not
more than three) during which the Employee was both an active participant in the
Plan and had the greatest aggregate compensation from an Employing Company or,
if he is also entitled to receive a pension from a defined benefit plan of an
Affiliated Employer or if assets and liabilities attributable to the pension of
the Employee from a defined benefit plan of an Affiliated Employer have been
transferred to this Plan, the greatest aggregate compensation from the Employer
and the Affiliated Employer during such high three (3) years. The limitation
described in Section 6.1(a) shall also apply in the case of the payment of an
Employee's Retirement Income with a Provisional Payee designation.

         (c) For purposes of Article VI, the term "compensation" means an
Employee's earned income, wages, salaries, and fees for professional services,
and other amounts received for personal services actually rendered in the course
of employment with any Affiliated Employer (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips and bonuses), and
excluding the following:

                  (1) Affiliated Employer contributions to a plan of deferred
         compensation which are not included in the Employee's gross income for
         the taxable year in which contributed or Affiliated Employer
         contributions under a simplified employee pension plan to the extent
         such contributions are deductible by the Employee, or any distributions
         from a plan of deferred compensation;

                  (2) Amounts realized from the exercise of a nonqualified stock
         option, or when restricted stock (or property) held by the Employee
         either becomes freely transferable or is no longer subject to a
         substantial risk of forfeiture;

                  (3)      Amounts realized from the sale,  exchange,  or other
 disposition of stock acquired under a qualified stock option; and

                  (4) Other amounts which received special tax benefits, or
         contributions made by an Affiliated Employer (whether or not under a
         salary reduction agreement) towards the purchase of an annuity
         described in Section 403(b) of the Code (whether or not the amounts are
         actually excludable from the gross income of the Employee).

Compensation for any Limitation Year is the compensation actually paid or
includible in gross income during such year.

         (d) The foregoing limitations regarding the maximum Retirement Income
shall not apply with respect to an Employee if the Retirement Income payable
under the Plan and under any other defined benefit plans of any Affiliated
Employer does not exceed $10,000 for the calendar year or for any prior calendar
year, and any Affiliated Employer has not at any time maintained a defined
contribution plan in which the Employee has participated. The terms "defined
benefit plan" and "defined contribution plan" shall have the meanings set forth
in Section 415(k) of the Code.

         6.2      Adjustment to Defined Benefit Dollar Limitation for Early or
Deferred Retirement6.2

         (a) If the retirement benefit of an Employee commences before the
Employee's Social Security Retirement Age, the Defined Benefit Dollar Limitation
shall be reduced in accordance with Code Section 415(b)(2)(C) as prescribed by
the Secretary of the Treasury. The reduction shall be made in such manner as the
Secretary of the Treasury may prescribe which is consistent with the reduction
for old-age insurance benefits commencing before the Social Security Retirement
Age under the Social Security Act.

         (b) If the retirement benefit of an Employee commences after the
Employee's Social Security Retirement Age, the Defined Benefit Dollar Limitation
shall be adjusted in accordance with Code Section 415(b)(2)(D) as prescribed by
the Secretary of the Treasury, based on the lesser of the interest rate
assumption under the Plan or on an assumption of five percent (5%) per year.

         6.3      Adjustment of limitation for Years of Service or
participation

         (a) If an Employee has completed less than ten (10) years of
participation, the Employee's accrued benefit shall not exceed the Defined
Benefit Dollar Limitation as adjusted by multiplying such amount by a fraction,
the numerator of which is the Employee's number of years (or part thereof) of
participation in the Plan, and the denominator of which is ten (10).

         (b) If an Employee has completed less than ten (10) Years of Service
with any Affiliated Employer, the limitations described in Sections
415(b)(1)(B), 415(b)(4), and 415(e) of the Code shall be adjusted by multiplying
such amounts by a fraction, the numerator of which is the Employee's number of
years of service (or part thereof), and the denominator of which is ten (10).

         (c) In no event shall paragraphs (a) and (b) above reduce the
limitations provided under Sections 415(b)(1), 415(b)(4), and 415(e) of the Code
to an amount less than one-tenth (1/10) of the applicable limitation (as
determined without regard to this Section 6.3).

         (d) This Section 6.3 shall be applied separately with respect to each
change in the benefit structure of the Plan, except as is or may be limited by
Revenue Procedure 92-42.

         6.4      Limitation on benefits from multiple plans

         (a) In the case of an Employee who is also a participant in any other
defined benefit plan of any Affiliated Employer or in any defined contribution
plan of any Affiliated Employer, the Retirement Income provided by the Plan
shall be limited to the extent necessary to prevent the sum of Fractions A and B
below, computed as of the end of the Plan Year, from exceeding 1.0.

                                   Fraction A

                  (numerator) Projected annual benefit of the Employee under the
                  Plan and any other defined benefit plan of any Affiliated
                  Employer (determined as of the close of the Plan Year).

                  (denominator) The lesser of (1) the product of 1.25 multiplied
                  by the Defined Benefit Dollar Limitation (or such higher
                  accrued benefit as of December 31, 1982), or (2) 1.4
                  multiplied by the amount determined under Code Section
                  415(b)(1)(B) as adjusted under Treasury Regulation Section
                  1.415-5.

                                   Fraction B

                  (numerator) The sum of all Annual Additions to the account of
                  the Employee under any defined contribution plan of any
                  Affiliated Employer as of the close of the Plan Year.

                  (denominator) The sum of the lesser of the following amounts,
                  determined for such Plan Year and for each prior Plan Year in
                  which the Employee has a Year of Service, (1) 1.25 multiplied
                  by the Defined Contribution Dollar Limitation determined under
                  Code Section 415(c)(1)(A), or (2) 1.4 multiplied by
                  twenty-five percent (25%) of the Employee's compensation for
                  the year.

         6.5 Special rules for plans subject to overall limitations under Code
Section 415(e)6.5 Special rules for plans subject to overall limitations under
Code Section 415(e).

         (a) For purposes of computing the defined contribution plan fraction of
Section 415(e)(1) of the Code, "Annual Addition" shall mean the amount allocated
to an Employee's account during the Limitation Year as a result of:

                  (1)      employer contributions,

                  (2)      employee contributions,

                  (3)      forfeitures, and

                  (4)      amounts described in Sections 415(1)(1) and 419(A)
(d)(2) of the Code.

         (b) The Annual Addition for any Limitation Year beginning before
January 1, 1987 shall not be recomputed to treat all Employee contributions as
an Annual Addition.

         (c) If the sum of Fractions A and B exceeds 1.0 as of December 31,
1982, the numerator of Fraction B shall be reduced by an amount which does not
exceed the numerator, so that the sum of Fraction A and Fraction B does not
exceed 1.0.

         (d) If the Plan satisfied the applicable requirements of Section 415 of
the Code as in effect for all Limitation Years beginning before January 1, 1987,
an amount shall be subtracted from the numerator of the defined contribution
plan fraction (not exceeding such numerator) as prescribed by the Secretary of
the Treasury so that the sum of the defined benefit plan fraction and defined
contribution plan fraction computed under Section 415(e)(1) of the Code (as
revised by this Article VI) does not exceed 1.0 for such Limitation Year.

         (e) The defined contribution plans and the other defined benefit plans
of Affiliated Employers include, respectively, (1) The Southern Company Employee
Savings Plan, The Southern Company Employee Stock Ownership Plan, The Southern
Company Performance Sharing Plan, and any other defined contribution plan (as
defined in Section 415(k) of the Code) and (2) any other qualified pension plan
in which the Employee participates in accruing benefits maintained by any
Affiliated Employer.

         6.6 Combination of Plans6.6 Combination of Plans. Notwithstanding any
provisions contained herein to the contrary, in the event that an Employee
participates in a defined contribution plan or defined benefit plan required to
be aggregated with this Plan under Code Section 415(g) and the combined benefits
with respect to an Employee exceed the limitations contained in Code Section
415(e), corrective adjustments shall first be made under this Plan. However, if
an Employee's Retirement Income under this Plan has already commenced,
corrections shall first be made under The Southern Company Employee Stock
Ownership Plan, if possible; second, correction shall next be made under The
Southern Company Performance Sharing Plan, if possible; and if not possible,
then correction shall be made to the Employee's Accrued Retirement Income under
this Plan.

         6.7 Incorporation of Code Section 4156.7 Incorporation of Code Section
415. Notwithstanding anything contained in this Article to the contrary, the
limitations, adjustments and other requirements prescribed in this Article shall
at all times comply with the provisions of Code Section 415 and the regulations
thereunder, the terms of which are specifically incorporated herein by
reference.

<PAGE>

                             Article VIIArticle VII

                                Provisional Payee

         7.1 Adjustment of Retirement Income to provide for payment to
Provisional Payee7.1 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). 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) 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 thirty (30) days and not more than ninety (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 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. Notwithstanding
the preceding sentence, such written explanation may be furnished after an
Employee's Early, Normal or Deferred Retirement date, as applicable, if in the
discretion of the Retirement Board the circumstances so warrant, provided the
Employee shall have at least thirty (30) days after being furnished the written
explanation to elect payment in accordance with paragraph (a) above.

         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 inoperative7.3
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 benefit7.4 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 an Employing Company
(or while in the service of an Affiliated Employer to which his employment had
been transferred) 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 an Employing
Company (or while in the service of an Affiliated Employer to which his
employment had been transferred) as provided in paragraph (a), provided the
Employee had received at least one hundred eighty (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) Subject to Section 7.10(c), for an Employee who dies while in the
service of an Employing Company (or while in the service of an Affiliated
Employer to which his employment had been transferred) 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
annuity7.5 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 VIII7.6 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.

         A 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 one hundred
eighty (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 Employee7.7 Death
benefit for Provisional Payee of former Employee. If an Employee, whose service
with the Employing Company 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) and (c), 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 VII7.9 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 Date7.10
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 an Employing Company have mutually agreed to participation in
the Plan, 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 an Employing Company have mutually agreed to
participation in the Plan 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 except for the requirement that an
Employee have an Hour of Service on or after January 1, 1996, the Provisional
Payee of any Employee described in Section 7.4(c) or in Section 7.7 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 an Employing Company have mutually agreed to participation in
the Plan shall commence receipt of Retirement Income upon the first day of the
month after the Employee would have attained his fiftieth (50th) birthday. For
purposes of the preceding sentence only, the requirement in Section 7.7 that a
former Employee terminate service with the Employing Company on or after January
1, 1989 should be disregarded to allow the Provisional Payee of any former
Employee to be eligible to commence receipt of Retirement Income as provided in
such sentence.

         7.11 Commencement of new optional forms of payment7.11 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 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 an Employing Company have mutually agreed to participation in
the Plan.

         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 an Employing Company
have mutually agreed to participation in the Plan (3) terminates employment with
such Employing Company 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 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.

<PAGE>

                            Article VIII

                             Termination of Service

         8.1 Vested interest8.1 Vested interest. If an Employee included in the
Plan terminates for any reason other than death or retirement as provided by
Article III, and if such Employee has had at least five (5) Vesting Years of
Service with any Affiliated Employer, whether or not Accredited Service, he will
be entitled to receive, commencing at Normal Retirement Date (except as provided
in Section 8.2 and subject to the provisions of Section 7.6) Retirement Income
equal to his Accrued Retirement Income at the date of the termination of such
service, provided that he makes application to the Retirement Board (or its
delegee) for the payment of such Retirement Income. If proper application for
payment of Retirement Income shall not be received by the Retirement Board (or
its delegee) by the April 1 of the calendar year following the calendar year in
which the Employee attains age 70 1/2 and the whereabouts of the Employee cannot
be determined by the Retirement Board (or its delegee), Retirement Income shall
be paid to the Employee's Provisional Payee, if any, and if surviving and the
whereabouts known to the Retirement Board (or its delegee), or applied in such
other manner as the Retirement Board shall deem appropriate. The payment of
Retirement Income pursuant to this provision shall completely discharge all
liability of the Retirement Board (or its delegee), the Employer, and the
Trustee or other payor to the extent of the payments so made. If such Employee
terminates with less than five (5) Vesting Years of Service with any Affiliated
Employer, he shall immediately forfeit any Accrued Retirement Income under the
Plan based upon his service prior to such termination.

         8.2 Early distribution of vested benefit8.2 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 an Employing Company have
mutually agreed to participation in the Plan, 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.

         8.3 Years of Service of reemployed Employees8.3 Years of Service of
reemployed Employees. If an Employee whose service terminates is again employed
by an Affiliated Employer as an Employee, his Years of Service with any
Affiliated Employer and his Accredited Service immediately prior to the
termination of his service shall be treated as provided in this Section 8.3,
subject to the provisions of Section 8.4.

         (a) If at the time of his reemployment he has not incurred a One-Year
Break in Service, his Years of Service with an Affiliated Employer and his
Accredited Service will be restored whether or not he is entitled to receive
Retirement Income in accordance with Section 8.1.

         (b) If at the time of termination of his service he is entitled to
receive Retirement Income in accordance with the provisions of Section 8.1, upon
his reemployment his Years of Service with an Affiliated Employer immediately
prior to the termination of his service shall be restored whether or not he has
incurred a One-Year Break in Service.

         (c) If at the time of reemployment he is not entitled to receive
Retirement Income in accordance with Section 8.1 and he (1) has incurred less
than five (5) consecutive One-Year Breaks in Service or (2) has incurred five
(5) or more consecutive One-Year Breaks in Service, but his Years of Service
prior to such One-Year Breaks in Service exceeded the consecutive One-Year
Breaks in Service, then upon the completion of one Eligibility Year of Service
following his reemployment, provided that if his reemployment date is on or
after January 1, 1995, no such Eligibility Year of Service shall be required,
his Years of Service with an Affiliated Employer and his Accredited Service
prior to the first One-Year Break in Service shall be restored, disregarding any
Years of Service with an Affiliated Employer which are not required to be taken
into account by reason of any previous One-Year Breaks in Service.

         (d) Years of Service and Accredited Service restored to an Employee in
accordance with this Section 8.3 shall be aggregated with Years of Service and
Accredited Service to which the Employee may be entitled after his reemployment.
If, however, the Minimum Retirement Income so determined for the Employee upon
his subsequent retirement or termination of service shall be less than the
aggregate of: (1) his Minimum Retirement Income, if any, determined in respect
of the period ending with his prior termination of service, and (2) his Minimum
Retirement Income determined in respect of the period after his reemployment,
the aggregate of such Minimum Retirement Incomes shall be deemed to be his
Minimum Retirement Income upon such subsequent retirement or termination of
service. In any event, his Retirement Income, however computed, shall be reduced
by the Actuarial Equivalent of any Retirement Income he received with respect to
his prior period of employment.

         8.4 Cash-out and buy-back8.4 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 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 present value of the Employee's Accrued
Retirement Income shall 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(c). 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) 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).

         8.5 Calculation of present value for cash-out of benefits and for
determining amount of benefits8.5 Calculation of present value for cash-out of
benefits and for determining amount of benefits.

         (a) This Section 8.5 shall apply to all distributions from the Plan and
from annuity contracts purchased to provide Accrued Retirement Income other than
distributions described in Section 1.417-1T(e)(3) of the income tax regulations
issued under the Retirement Equity Act of 1984.

         (b) (1) For purposes of determining whether the present value of (A) an
Employee's vested accrued benefit; (B) a qualified joint and survivor annuity,
within the meaning of Section 417(b) of the Code; or (C) a qualified
preretirement survivor annuity within the meaning of Section 417(c)(1) of the
Code exceeds $3,500, the present value of such benefits or annuities shall be
calculated by using an interest rate no greater than the Applicable Interest
Rate.

                  (2) In no event shall the present value of any such benefit or
         annuity determined under this Section 8.5(b) be less than the present
         value of such benefits or annuities determined using the Applicable
         Interest Rate.

                  (3) In no event shall the amount of any benefit or annuity
         determined under this Section 8.5 exceed the maximum benefit permitted
         under Section 415 of the Code.

         (c) For purposes of this Section 8.5, "Applicable Interest Rate" 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.

         8.6 Retirement Income under Prior Plans8.6 Retirement Income under
Prior Plans. Any person entitled to receive Retirement Income as a former
Employee under the Prior Plans shall only be entitled to receive Retirement
Income in accordance with the provisions of such Prior Plan in effect at the
time his service was terminated, except that any such person whose service
terminated prior to January 1, 1976:

         (a) with at least twenty (20) years of Accredited Service may elect to
receive Retirement Income commencing prior to his Normal Retirement Date in
accordance with Section 8.2;

         (b) who shall have returned to the employment of an Employing Company,
whether before or after January 1, 1976, and shall be an Employee who is
entitled to receive Retirement Income in respect of his Accredited Service after
January 1, 1976, his years of Accredited Service under the Prior Plans with
respect to his service before January 1, 1976, shall, for the purpose of
calculating his Minimum Retirement Income, be aggregated with his years of
Accredited Service after his reemployment. His Accrued Retirement Income to the
date of termination of his service payable in accordance with the Prior Plans as
a former Employee shall be treated as Prior Plan Retirement Income and his Years
of Service prior to the date of termination of his service shall be restored to
his credit. It shall be a condition of the treatment provided for in this
paragraph (b) that: (1) the Employee rescind any election of payment and
designation of a Provisional Payee which he shall have made under the Prior Plan
and which shall be in effect at the time of his return to the employment of an
Employing Company and (2) if he is receiving Retirement Income, his Retirement
Income shall cease during his period of employment and any Retirement Income
payable upon his subsequent retirement shall be reduced by the Actuarial
Equivalent of any Retirement Income he received prior to his reemployment.

         8.7 Requirement for Direct Rollovers8.7Requirement for Direct
Rollovers. 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.

         (a)      Definitions

                  (1)      Eligible Rollover Distribution

                  An Eligible Rollover Distribution is any distribution of all
         or any portion of the balance to the credit of the Distributee, except
         that an Eligible Rollover Distribution does not include:

                           (A) any distribution that is one of a series of
                  substantially equal periodic payments (not less frequently
                  than annually) made for the life (or life expectancy) of the
                  Distributee or the joint lives (or joint life expectancies) of
                  the Distributee and the Distributee's spouse, or for a
                  specified period of 10 years or more;

                           (B)      any  distribution  to the  extent  such
                 distribution  is  required  under Code  Section 401(a)(9); and

                           (C) the portion of any distribution that is not
                  includible in gross income (determined without regard to the
                  exclusion for net unrealized appreciation with respect to
                  employer securities).

                  (2)      Eligible Retirement Plan

                  An Eligible Retirement Plan is an individual retirement
         account described in Code Section 408(a), an individual retirement
         annuity described in Code Section 408(b), an annuity plan described in
         Code Section 403(a), or a qualified trust described in Code Section
         401(a) that accepts the Distributee's Eligible Rollover Distribution.
         However, in the case of an Eligible Rollover Distribution for a
         Provisional Payee, an Eligible Retirement Plan is an individual
         retirement account or individual retirement annuity.

                  (3)      Distributee

                  A Distributee includes an Employee or former Employee. In
         addition, a Distributee includes the Employee's or former Employee's
         spouse who is an alternate payee under a qualified domestic relations
         order, as defined in Code Section 414(p).

                  (4)      Direct Rollover

                  A Direct Rollover is a payment by the Plan to the Eligible
         Retirement Plan specified by the Distributee.

<PAGE>

                              Article IXArticle IX

                                  Contributions

         9.1 Contributions generally9.1Contributions generally. All
contributions necessary to provide the Retirement Incomes under the Plan will be
made from time to time by or on behalf of the Employing Companies and no
contributions will be required of the Employees. All contributions shall be made
to the Trustee under the Trust Agreement provided for in Article XI, and if a
group annuity contract shall be entered into with a life insurance company
("contract with an insurance company"), contributions may also be made to the
insurance company.

         The minimum amount of contributions to be made by or on behalf of the
Employing Companies for any Plan Year of the Plan shall be such amount as is
required to meet the minimum funding standards of ERISA and any regulations in
respect thereto. However, the Employing Companies are under no obligation to
make any contributions under the Plan after the Plan is terminated, whether or
not Retirement Income accrued or vested prior to the date of termination has
been fully funded. All contributions are expressly conditioned upon the
deductibility of such contributions by the Employing Companies pursuant to
Section 404 of the Code.

         9.2 Return of Employing Company contributions9.2 Return of Employing
Company contributions. All contributions made pursuant to the Plan shall be held
by the Trustee in accordance with the terms of the Trust Agreement for the
exclusive benefit of those Employees who are participants under the Plan,
including former Employees and their beneficiaries, and shall be applied to
provide benefits under the Plan and to pay expenses of administration of the
Plan and Trust, to the extent that such expenses are not otherwise paid. At no
time prior to the satisfaction of all liabilities with respect to such Employees
and their beneficiaries shall any part of the Trust Fund be used for, or
diverted to, purposes other than for the exclusive benefit of such Employees and
their beneficiaries. However, notwithstanding the provisions of this Section
9.2:

         (a) If a contribution is conditioned upon the deductibility of the
contributions under Section 404 of the Code, then, to the extent the deduction
is disallowed, the Trustee shall upon written request of an Employing Company,
return the contribution (to the extent disallowed) to such Employing Company
within one year after the date the deduction is disallowed.

         (b) If a contribution or any portion thereof is made by an Employing
Company by a mistake of fact, the Trustee shall, upon written request of such
Employing Company, return the contribution or such portion to the Employing
Company within one year after the date of payment to the Trustee.

         The amount which may be returned to an Employing Company under this
Section 9.2, is the excess of (a) the amount contributed over (b) the amount
that would have been contributed had there not occurred a mistake of fact or a
mistake in determining the deduction. Earnings attributable to the excess
contribution shall not be returned to such Employing Company, but losses
attributable thereto shall reduce the amount to be so returned.

         (c) If permitted under Federal common law, the Employing Company may
recover any other contributions to the Plan or payments to any other entity to
the extent such contributions or payments unjustly enrich or otherwise
gratuitously benefit such entity.

         9.3 Expenses9.3 Expenses. Prior to termination of the Plan, all
investment expenses (including brokerage costs, transfer taxes, shipping
expenses, and charges of correspondent banks of the Trustee) and any taxes which
may be levied against the Trust shall be charged to the Trust. All other
expenses prior to the termination of the Plan shall either be paid by the
Employing Companies or charged to or reimbursed by the Trust, as determined in
the discretion of The Southern Company Pension Fund Investment Review Committee.
After the termination of the Plan, all expenses shall be levied against the
Trust and shall be charged to the Trust.

<PAGE>

                               Article X

                             Administration of Plan

          10.1 Retirement Board The general  administration of the Plan shall be
     placed in a Retirement Board of six (6) members who shall be appointed from
     time to time by the  Board of  Directors  to serve at the  pleasure  of the
     Board of Directors.

         10.2 Organization and transaction of business of Retirement Board10.2
Organization and transaction of business of Retirement Board. Any person
appointed a member of the Retirement Board shall signify his acceptance by
filing written acceptance with the Board of Directors. Any member of the
Retirement Board may resign by delivering his written resignation to the Board
of Directors, and such resignation shall become effective at delivery or at any
later date specified therein.

         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.

         The Retirement Board shall hold meetings upon such notice, at such
place or places, and at such time or times as they may from time to time
determine.

         A majority of the members of the Retirement Board at the time in office
shall constitute a quorum for the transaction of business. All resolutions or
other actions taken by the Retirement Board at any meeting shall be by the vote
of a majority of the Retirement Board at the time in office. Any determination
or action of the Retirement Board may be made or taken without a meeting by a
resolution or written memorandum concurred upon by a majority of the members
then in office.

         No member of the Retirement Board who is also an Employee of an
Employing Company shall receive any compensation from the Plan for his service
as such. No bond or other security need be required of any member in any
jurisdiction except as may be required by ERISA.

          10.3   Administrative   responsibilities   of  Retirement   Board  The
     Retirement  Board,  in addition to the  functions  and duties  provided for
     elsewhere in the

Plan, shall have exclusive discretionary authority for the following:

         (a)      construing and interpreting the Plan;

          (b)  determining  all  questions  affecting  the  eligibility  of  any
     Employee,   retired  Employee,  former  Employee,   Provisional  Payee,  or
     alternate payee;

          (c)  determining  all  questions  affecting  the amount of the benefit
     payable hereunder;

          (d)  ascertaining  the persons to whom benefits shall be payable under
     the provisions hereof;

          (e) to the extent  provided  in the Plan,  authorizing  and  directing
     disbursements of benefits from the Plan;

          (f) making final and binding  determinations  in  connection  with any
     questions of fact which may arise regarding the operation of the Plan;

         (g) making such rules and regulations with reference to the operation
of the Plan as it may deem necessary or advisable, provided that such rules and
regulations shall not be inconsistent with the express terms of the Plan or
ERISA;

          (h)  prescribing  such  procedures  and  adopting  such  forms  as  it
     determines necessary under the terms of the Plan; and

         (i)      reviewing such denials of claims for benefits as may arise.

         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.

         10.4 Retirement Board, the "Administrator"10.4 Retirement Board, the
"Administrator. For the purposes of compliance with the provisions of ERISA, the
Retirement Board shall be deemed the "administrator" of the Plan as that term is
defined in ERISA, and the Retirement Board shall be, with respect to the Plan, a
"named fiduciary" as that term is defined in ERISA. For the purpose of carrying
out its duties, the Retirement Board may, in its discretion, allocate
responsibilities under the Plan among its members and may, in its discretion,
designate in writing, as set forth in the records of the Retirement Board,
persons other than members of the Retirement Board to carry out such
responsibilities of the Retirement Board under the Plan as it may see fit.

         10.5 Fiduciary responsibilities10.5 Fiduciary responsibilities. It is
intended, that to the maximum extent permitted by ERISA, each person who is a
"fiduciary" with respect to the Plan as that term is defined in ERISA shall be
responsible for the proper exercise of his own powers, duties, responsibilities,
and obligations under the Plan and the Trust or other funding medium, as shall
each person designated by any fiduciary to carry out any fiduciary
responsibility with respect to the Plan, the Trust or other funding medium and
no fiduciary or other person to whom fiduciary responsibilities are allocated
shall be liable for any act or omission of any other fiduciary or of any other
person delegated to carry out any fiduciary or other responsibility under the
Plan or the Trust or other funding medium.

         Any person or group of persons may serve in more than one fiduciary
capacity with respect to the Plan and any fiduciary with respect to the Plan may
serve as a fiduciary with respect to the Plan in addition to being an officer,
employee, agent, or other representative of a "party in interest" as that term
is defined in ERISA.

         10.6 Employment of actuaries and others10.6 Employment of actuaries and
others. The Retirement Board may employ such "enrolled actuaries" and
independent "qualified public accountants" as such terms are defined in ERISA,
legal counsel (who may be of counsel to an Employing Company), other
specialists, and other persons as the Retirement Board deems necessary or
desirable in connection with the administration of the Plan. The Retirement
Board and any person to whom it may delegate any duty or power in connection
with the administration of the Plan, an Employing Company, and the officers and
directors thereof shall be entitled to rely conclusively upon and shall be fully
protected in any action omitted, taken, or suffered by them in good faith in
reliance upon any enrolled actuary, independent qualified public accountant,
counsel, or other specialist or other person selected by the Retirement Board or
in reliance upon any tables, evaluations, certificates, opinions, or reports
which shall be furnished by any of them or by the Trustee or any insurance
company. Any action so taken, omitted, or suffered in accordance with the
provisions of this Section 10.6 shall be conclusive upon each Employee, former
Employee, and Provisional Payee covered under the Plan.

         10.7 Accounts and tables10.7 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. In addition, the Retirement Board shall annually report to the
Compensation and Management Succession Committee of The Southern Company Board
of Directors and provide a reasonable summary about significant matters
concerning the operation of the Plan and the adoption of any amendments not
otherwise required to be recommended by such Committee in accordance with
Section 13.1.

         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.

         10.8 Indemnity of members of Retirement Board10.8 Indemnity of members
of Retirement Board. To the extent not compensated for by any applicable
insurance, the Employing Companies shall indemnify and hold harmless each member
of the Retirement Board and each Employee of the Employing Companies designated
by the Retirement Board to carry out any fiduciary responsibility with respect
to the Plan from any and all claims, loss, damages, expense (including counsel
fees approved by the Board of Directors) and liability (including any amount
paid in settlement with the approval of the Board of Directors) arising from any
act or omission of such member or Employee designated by the Retirement Board in
connection with the Plan or the Trust, except where the same is determined by
the Board of Directors or is judicially determined to be due to a failure to act
in good faith or is due to the gross negligence or willful misconduct of such
member or Employee. No assets of the Plan may be used for any such
indemnification.

         10.9 Areas in which the Retirement Board does not have
responsibility10.9 Areas in which the Retirement Board does not have
responsibility. The Retirement Board shall not have responsibility with 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 upon recommendation of the Pension Fund
Investment Review Committee of The Southern Company System 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 Pension Fund Investment Review Committee of The Southern Company System.

         10.10 Claims procedures10.10 Claims Procedures. Consistent with the
requirements of ERISA and the regulations thereunder of the Secretary of Labor
from time to time in effect, the Retirement Board (or its delegee) shall:

         (a) provide adequate notice in writing to any Employee, former
Employee, retired Employee, or Provisional Payee (each being hereinafter in the
paragraph referred to as "participant") whose claim for benefit under the Plan
has been denied, setting forth specific reasons for such denial, written in a
manner calculated to be understood by such participant; and

         (b) afford a reasonable opportunity to any participant whose claim for
benefits has been denied for a full and fair review of the decision denying the
claim.

<PAGE>

                              Article XIArticle XI

                               Management of Trust

         11.1     Trust1

 All  assets  of the Plan  shall be held as a  special  trust for use in
 accordance with the Plan.

         The funds of the Plan shall be held by a Trustee in trust or held by a
life insurance company in accordance with the provisions of a contract with such
insurance company entered into by the Trustee or the Employer. The Trust
Agreement and contract with an insurance company may from time to time be
amended in the manner therein provided.

         11.2 Disbursement of the Trust Fund11.2 Disbursement of the Trust Fund.
Subject to the provisions of the Trust Agreement or contract with an insurance
company the Retirement Board shall determine the manner in which the funds of
the Plan shall be disbursed pursuant to the Plan, including the form of voucher
or warrant to be used in making disbursements and the due qualification of
persons authorized to approve and sign the same. The responsibility for the
retention and investment of funds held by the Trustee shall lie with the Trustee
and not with the Retirement Board, and the responsibility for the retention and
investment of funds held by an insurance company shall lie with the insurance
company and not with the Retirement Board. However, if in accordance with a
Trust Agreement forming a part of the Plan (including any pooled trust agreement
in which a trust forming a part of the Plan participates) a contract with an
insurance company shall be held by the Trustee as an investment of the Trust,
directions may be given from time to time to the Trustee by the Board of
Directors or such committee, person, or persons as may be specified in the Trust
Agreement to transfer funds of the Trust to the life insurance company which
issued such contract or to transfer funds from the life insurance company to the
Trustee, as the case may be.

         11.3 Rights in the Trust11.3 Rights in the Trust. Under no
circumstances shall amounts of money or other things of value contributed by the
Employing Companies to the Plan, or any part of the corpus or income of the
Trust held by the Trustee under the Plan, be recoverable by the Employing
Companies from the Trustee or from any Employee, retired Employee, former
Employee, or Provisional Payee, or be used for, or diverted to, purposes other
than for the exclusive benefit of the Employees, retired Employees, former
Employees, and Provisional Payees covered hereunder; provided, however, that, if
after satisfaction of all liabilities of the Trust with respect to Employees,
retired Employees, former Employees, and Provisional Payees under the Plan,
there is any balance remaining, the Trustee shall return such balance to the
Employing Companies. Notwithstanding the above, upon the approval of the
Internal Revenue Service or the enactment or promulgation of any laws or
regulations by any governmental authority, the Employing Companies shall be
authorized to rededicate all or a portion of the assets allocated to fund
Retirement Income under the Plan to the separate account to fund medical
benefits under Article XV of the Plan.

         11.4 Merger of the Plan11.4 Merger of the Plan. The Plan shall not be
merged or consolidated with, or any of its assets or liabilities transferred to,
any other plan, unless each Employee included in the Plan would (if the Plan
then terminated) receive a benefit immediately after the merger, consolidation,
or transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation, or transfer
(if the Plan then terminated).

<PAGE>

                             Article XIIArticle XII

                             Termination of the Plan

         12.1 Termination of the Plan12.1 Termination of the Plan. The Plan may
be terminated at any time by action of the Board of Directors in accordance with
the amendment procedures provided in Section 13.1. Upon such termination or
partial termination all Accrued Retirement Income of Employees to the date of
such termination, to the extent then funded, shall become nonforfeitable and the
assets of the Plan which have not previously been allocated to provide
Retirement Income shall then be paid out to Employees, retired Employees, former
Employees, and Provisional Payees in accordance with the applicable requirements
of ERISA and regulations thereunder governing termination of "employee pension
benefit plans" as defined in ERISA. If after satisfaction of all liabilities, as
provided above, there is any balance remaining in the Trust, the Trustee shall
return such balance to the Employing Companies.

         To the extent permitted by law, subject to the foregoing limitations,
such remaining assets shall be allocated among all persons in the following
categories for whom such Retirement Income or other benefits have not previously
been provided, namely, (a) Employees who have been retired under the Plan, (b)
Employees who at the date of termination of the Plan are included in the Plan,
(c) former Employees who at the date of the termination of their employment were
entitled to payment of Retirement Income in accordance with Article VIII, and
(d) former Employees who have transferred to an Affiliated Employer. Retirement
Income already purchased under any contract with an insurance company will be
payable in accordance with the provisions of that contract.

         12.2 Limitation on benefits for certain highly paid employees12.2
Limitation on benefits for certain highly paid employees.

         (a) The annual payments to an Employee described in paragraph (b) below
shall not exceed an amount equal to the payments that would be made to or on
behalf of such Employee under a single life annuity that is the Actuarial
Equivalent of the sum of the Employee's Accrued Retirement Income and the
Employee's other benefits under this Plan (other than a Social Security
supplement) and any Social Security supplement that the restricted Employee is
entitled to receive. The restrictions in this paragraph (a) do not apply,
however, if:

                  (1) after payment to an Employee described in paragraph (b) of
         all benefits payable to such Employee under this Plan, the value of
         this Plan's assets equals or exceeds 110% of the value of current
         liabilities, as defined in Code Section 412(c)(7), or

                  (2) the value of the benefits payable to such Employee under
         this Plan for an Employee described in paragraph (b) below is less than
         1% of the value of current liabilities before distribution.

         (b) The Employees whose benefits are restricted on distribution include
all highly compensated employees and highly compensated former employees (as
such terms are defined in Treasury Regulation Section 1.401(a)(4)-12); provided,
however, that Employees whose benefits are subject to restriction under this
Section 12.2 shall be limited to only those Employees who in the current or in
any previous Plan Year were one of the 25 non-excludable Employees of the
Affiliated Employers with the greatest compensation from such Affiliated
Employers.

<PAGE>

                            Article XIIIArticle XIII

                              Amendment of the Plan

         13.1     Amendment of the Plan

         (a) The Plan may be amended or modified at any time by the Board of
Directors pursuant to its written resolutions to among other things (but without
limiting the scope of the Board of Directors' authority) implement collectively
bargained agreements, provide non-collectively bargained Employees those
benefits granted collectively bargained Employees or such other benefits not
granted collectively bargained Employees, change plan distribution options and
the timing of distributions, provide for administrative efficiency, make any
changes necessary or desirable to make the contributions to the Trust eligible
for tax deductions, make the income of the Trust exempt from taxation, or bring
the Plan into conformity or compliance with ERISA, the Code, or with other
governmental regulations. Notwithstanding the foregoing, amendments or
modifications which substantially increase on an on-going basis the
contributions required under Article IX for any Employing Company or which
significantly increase or decrease the future opportunity for Accrued Retirement
Income for Employees of any Employing Company will be made by the Board of
Directors, only after recommendation to and approval by the Compensation and
Management Succession Committee of The Southern Company Board of Directors.

         (b) Notwithstanding paragraph (a) above, no amendment shall be made
which has the effect of decreasing the Accrued Retirement Income of any
Employee, retired Employee, former Employee, or Provisional Payee as provided
under the limitations of Section 411(d)(6) of the Code.

<PAGE>

                             Article XIV

                               Special Provisions

         14.1 Exclusive benefit14.1 Exclusive benefit. The Employing Companies
intend that the Plan (including the Trust forming a part thereof) be a pension
plan maintained for the exclusive benefit of its Employees and their
beneficiaries subject to Section 11.3, as provided for in Section 401 of the
Code, and as may be provided for in any similar provisions of subsequent revenue
laws, and that the Trust shall qualify as an employees' trust which shall be
exempt under Section 501(a) of the Code, and any similar provisions of
subsequent revenue laws, as a trust forming part of such a plan.

         14.2 Assignment or alienation14.2 Assignment or alienation. No benefit
under the Plan shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment (either at law or in equity), pledge, encumbrance, charge,
garnishment, levy, execution, or other legal or equitable process and any
attempt so to anticipate, alienate, sell, transfer, assign, pledge, encumber,
charge, garnish, levy, execute, or enforce other legal or equitable process
against the same shall be void, nor shall any such benefit be in any manner
liable for or subject to the debts, contracts, liabilities, engagements, or
torts of the person entitled to such benefit.

         If any Employee, former Employee, or retired Employee, or any
Provisional Payee under the Plan is adjudicated bankrupt or attempts to
anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge any
benefit under the Plan or if any action shall be taken which is in violation of
the provisions of the immediately preceding paragraph, then such benefit shall
cease and terminate and in that event the Retirement Board shall hold or apply
the same or any part thereof to or for the benefit of such Employee, former
Employee, retired Employee, or Provisional Payee in such manner as the
Retirement Board may think proper.

         Notwithstanding the above, the Retirement Board and Trustee shall
comply with any "domestic relations order" (as defined in Section 414(p)(1)(B)
of the Code) which is a "qualified domestic relations order" satisfying the
requirements of Section 414(p) of the Code. The Retirement Board shall establish
procedures for (a) notifying Employees and alternate payees who have or may have
an interest in benefits which are the subject of domestic relations orders, (b)
determining whether such domestic relations orders are qualified domestic
relations orders under Section 414(p) of the Code, and (c) distributing benefits
which are subject to qualified domestic relations orders.

         14.3 Voluntary undertaking14.3 Voluntary undertaking. This Plan is
strictly a voluntary undertaking on the part of the Employing Companies and
shall not be deemed to constitute a contract between the Employing Companies or
any other company and any Employee or to be a consideration for, or an
inducement or condition of, the employment of any Employee. Nothing contained in
this Plan shall be deemed to give any Employee the right to be retained in the
service of an Employing Company or to interfere with the right of the Employing
Companies to discharge any Employee at any time. Inclusion under the Plan will
not give any Employee or Provisional Payee any right or claim to a Retirement
Income except to the extent such right is specifically fixed under the terms of
the Plan and there are funds available therefor in the hands of the Trustee or
of any insurance company which may hold funds of the Plan.

         14.4 Top-Heavy Plan requirements14.4 Top-Heavy Plan requirements. For
any Plan Year the Plan shall be determined to be a Top-Heavy Plan, the Plan
shall provide the following:

         (a)      the minimum benefit requirement of Section 14.6; and

         (b)      the vesting requirement of Section 14.7.

         14.5     Determination of Top-Heavy status

         (a) The Plan shall be determined to be a "Top-Heavy Plan," if, as of
the Determination Date, (1) the Present Value of Accrued Retirement Income of
Key Employees or (2) the sum of the Aggregate Accounts of Key Employees under
this Plan and any plan of an Aggregation Group, exceeds sixty percent (60%) of
the Present Value of Accrued Retirement Income or the Aggregate Accounts of all
Employees entitled to participate in this Plan and any Plan of an Aggregation
Group.

         (b) The Accrued Retirement Income of a Non-Key Employee shall be
determined under the accrual method under the Plan.

         (c) The Plan shall be determined to be a "Super Top-Heavy Plan," if, as
of the Determination Date, (1) the Present Value of Accrued Retirement Income of
Key Employees or (2) the sum of the Aggregate Accounts of Key Employees under
this Plan and any plan in an Aggregation Group, exceeds ninety percent (90%) of
the Present Value of Accrued Retirement Income or the Aggregate Accounts of all
Employees entitled to participate in this Plan and any plan of an Aggregation
Group.

         For purposes of Sections 14.5(a) and 14.5(b), if any Employee is a
Non-Key Employee for any Plan Year, but such Employee was a Key Employee for any
prior Plan Year, such Employee's Present Value of Accrued Retirement Income and/
or Aggregate Account balance shall not be taken into account for purposes of
determining whether this Plan is a Top-Heavy or Super Top-Heavy Plan (or whether
any Aggregation Group which includes this Plan is a Top-Heavy Group). In
addition, if an Employee or former Employee has not performed any services for
an Employing Company or any Affiliated Employer maintaining the Plan or Prior
Plans at any time during the five (5) year period ending on the Determination
Date, the Aggregate Account and/or Present Value of Accrued Retirement Income
for such Employee or former Employee shall not be taken into account for
purposes of determining whether this Plan is a Top-Heavy or Super Top-Heavy
Plan.

         (d) An Employee's "Aggregate Account" as of the Determination Date
shall be determined under applicable provisions of the defined contribution plan
used in determining Top-Heavy status.

         (e) An "Aggregation Group" shall mean either a Required Aggregation
Group or a Permissive Aggregation Group as hereinafter determined.

                  (1) Required Aggregation Group: In determining a Required
         Aggregation Group hereunder, each plan of the Affiliated Employers in
         which a Key Employee is a participant, and each other plan of the
         Affiliated Employers which enables any plan in which a Key Employee
         participates to meet the requirements of Code Sections 401(a)(4) or
         410, will be required to be aggregated. Such group shall be known as a
         Required Aggregation Group.

                  In the case of a Required Aggregation Group, each plan in the
         group will be considered a Top-Heavy Plan if the Required Aggregation
         Group is a Top-Heavy Group. No plan in the Required Aggregation Group
         will be considered a Top-Heavy Plan if the Aggregation Group is not a
         Top-Heavy Group.

                  (2) Permissive Aggregation Group: The Affiliated Employers may
         also include any other plan not required to be included in the Required
         Aggregation Group, provided the resulting group, taken as a whole,
         would continue to satisfy the provisions of Code Sections 401(a)(4) or
         410. Such group shall be known as a Permissive Aggregation Group.

         In the case of a Permissive Aggregation Group, only a plan that is part
of the Required Aggregation Group will be considered a Top-Heavy Plan if the
Permissive Aggregation Group is a Top-Heavy Group. A plan that is not part of
the Required Aggregation Group but that has nonetheless been aggregated as part
of the Permissive Aggregation Group will not be considered a Top-Heavy Plan even
if the Permissive Group is a Top-Heavy Group.

                  (3) Only those plans of the Affiliated Employers in which the
         Determination Dates fall within the same calendar year shall be
         aggregated in order to determine whether such plans are Top-Heavy
         Plans.

         (f) The "Determination Date" shall mean with respect to any Plan Year,
the last day of the preceding Plan Year, or in the case of the first Plan Year,
the last day of such Plan Year.

         (g) A "Key Employee" shall mean any Employee or former Employee (and
his beneficiaries) who, at any time during the Plan Year or any of the four (4)
preceding Plan Years, is:

                  (1) an officer of the Affiliated Employers having an annual
         compensation from the Affiliated Employers greater than fifty percent
         (50%) of the amount in effect under Code Section 415(b)(1)(A) for any
         such Plan Year. For purposes of this Section 14.5(g)(1), only those
         employers which are incorporated shall be considered as having
         officers, and no more than fifty (50) Employees (or, if lesser, the
         greater of three (3) or ten percent (10%) of the Employees) shall be
         treated as officers. Annual compensation means compensation as defined
         in Section 415(c)(3) of the Code, but including amounts contributed by
         the Affiliated Employers pursuant to a salary reduction agreement which
         are excludable from the Employee's gross income under Section 125,
         Section 402(a)(8), Section 402(h), or Section 403(b) of the Code.

                  (2) one of the ten (10) Employees (A) having annual
         compensation from the Affiliated Employers greater than the limitation
         in effect under Code Section 415(c)(1)(A) and (B) owning (or considered
         as owning within the meaning of Code Section 318) the largest interests
         in the Affiliated Employers. For purposes of this Section 14.5(g)(2),
         if two (2) Employees have the same interest in the Affiliated
         Employers, the Employee having the greater annual compensation from the
         Affiliated Employers shall be treated as having a larger interest.

                  (3) a "five-percent owner" of the Affiliated Employers. The
         term "five-percent owner" shall mean any person who owns (or is
         considered as owning within the meaning of Code Section 318) more than
         five percent (5%) of the outstanding stock of the Affiliated Employers
         or stock possessing more than five percent (5%) of the total combined
         voting power of all stock of the Affiliated Employers. In determining
         percentage ownership hereunder, employers that would otherwise be
         aggregated under Code Sections 414(b), (c), and (m) shall be treated as
         separate employers.

                  (4) a "one-percent owner" of the Affiliated Employers having
         an annual compensation from the Affiliated Employers of more than
         $150,000. The term "one-percent owner" shall mean any person who owns
         (or is considered as owning within the meaning of Code Section 318)
         more than one percent (1%) of the outstanding stock of the Affiliated
         Employers or stock possessing more than one percent (1%) of the total
         combined voting power of all stock of the Affiliated Employers. In
         determining percentage ownership hereunder, employers that would
         otherwise be aggregated under Code Sections 414(b), (c), and (m) shall
         be treated as separate employers. However, in determining whether an
         individual has compensation of more than $150,000, compensation from
         each employer required to be aggregated under Code Sections 414(b),
         (c), and (m) shall be taken into account.

          (h) A  "Non-Key  Employee"  shall mean any  Employee  who is not a Key
     Employee as defined in Section 14.5(g).

          (i) An Employee's  "Present Value of Accrued  Retirement Income" shall
     mean as of the Determination Date, the sum of the following:

                  (1) the Present Value of his Accrued Retirement Income as of
         the most recent valuation occurring within a twelve (12) month period
         ending on the Determination Date.

                  (2) any Plan distributions made within the Plan Year that
         includes the Determination Date or within the four (4) preceding Plan
         Years. However, in the case of distributions made after the valuation
         date and prior to the Determination Date, such distributions are not
         included as distributions for Top-Heavy purposes to the extent that
         such distributions are already included in the Employee's Present Value
         of Accrued Retirement Income as of the valuation date. Notwithstanding
         anything herein to the contrary, all distributions, including
         distributions made prior to January 1, 1984, and distributions under a
         terminated plan which if it had not been terminated would have been
         required to be included in an Aggregation Group, will be counted.

                  (3) any Employee contributions, whether voluntary or
         mandatory. However, amounts attributable to qualified deductible
         employee contributions shall not be considered to be a part of the
         Employee's Present Value of Accrued Retirement Income.

                  (4) with respect to unrelated rollovers and plan-to-plan
         transfers (ones which are both initiated by the Employee and made from
         a plan maintained by one employer to a plan maintained by another
         employer), if this Plan provides for rollovers or plan-to-plan
         transfers, it shall always consider such rollover or plan-to-plan
         transfer as a distribution for the purposes of this Section. If this
         Plan is the plan accepting such rollovers or plan-to-plan transfers, it
         shall not consider such rollovers or plan-to-plan transfers accepted
         after December 31, 1983 as part of the Employee's Present Value of
         Accrued Retirement Income. However, rollovers or plan-to-plan transfers
         accepted prior to January 1, 1984 shall be considered as part of the
         Employee's Present Value of Accrued Retirement Income.

                  (5) with respect to related rollovers and plan-to-plan
         transfers (ones either not initiated by the Employee or made to a plan
         maintained by the same employer), if this Plan provides for rollovers
         or plan-to-plan transfers, it shall not be counted as a distribution
         for purposes of this Section. If this Plan is the plan accepting such
         rollover or plan-to-plan transfer, it shall consider such rollover or
         plan-to-plan transfer as part of the Employee's Present Value of
         Accrued Retirement Income, irrespective of the date on which such
         rollover or plan-to-plan transfer is accepted.

          (j) A "Top-Heavy  Group" shall mean an Aggregation  Group in which, as
     of the Determination Date, the sum of:

          (1) the Present  Value of Accrued  Retirement  Income of Key Employees
     under all defined benefit plans included in that group, and

          (2)  the  Aggregate  Accounts  of  Key  Employees  under  all  defined
     contribution plans included in the group,  exceeds sixty percent (60%) of a
     similar sum determined for all Employees.

         14.6 Minimum Retirement Income for Top-Heavy Plan Years14.6 Minimum
Retirement Income for Top-Heavy Plan Years. Notwithstanding anything herein to
the contrary, for any Top-Heavy Plan Year, the minimum Accrued Retirement Income
derived from Affiliated Employer contributions for each Non-Key Employee,
including benefits accrued in years in which the Plan is not a Top-Heavy Plan,
shall equal a percentage of such Non-Key Employee's highest average compensation
not less than the lesser of: (a) two percent (2%) multiplied by the Employee's
number of Years of Service with the Affiliated Employers, or (b) twenty percent
(20%). For purposes of the minimum benefit, an Employee's Years of Service shall
exclude (a) Plan Years in which the Plan is not a Top-Heavy Plan, and (b) Years
of Service completed prior to January 1, 1984. The minimum benefit required by
this Section 14.6 shall be calculated using the Employee's total compensation
and expressed in the form of a single life annuity (with no ancillary benefits)
beginning at such Employee's Normal Retirement Date. An Employee's average
compensation shall be based on the five (5) consecutive years for which the
Employee had the highest compensation.

         Notwithstanding the foregoing, in any Plan Year in which a Non-Key
Employee is an Employee in both this Plan and a defined contribution plan, and
both such plans are Top-Heavy Plans, the Affiliated Employers shall not be
required to provide a Non-Key Employee with both the full separate minimum
defined benefit and the full separate minimum defined contribution plan
allocation. Therefore, if a Non-Key Employee is participating in a defined
contribution plan maintained by the Affiliated Employers and the minimum
allocation under Code Section 416(c)(2) is allocated to the Non-Key Employee
under such defined contribution plan, the minimum Accrued Retirement Income
provided for above shall not be applicable, and no minimum benefit shall accrue
on behalf of the Non-Key Employee. Alternatively, the Affiliated Employers may
satisfy the minimum benefit requirement of Code Section 416(c)(1) for the
Non-Key Employee by providing any combination of benefits and/or contributions
that satisfy the safe harbor rules of Treasury Regulation Section 1.416-1(m-12).

         14.7 Vesting requirements for Top-Heavy Plan Years14.7 Vesting
requirements for Top-Heavy Plan Years. Notwithstanding the provisions of Section
8.1, for any Top-Heavy Plan Year, the vested portion of an Employee's Accrued
Retirement Income shall be determined on the basis of the Employee's Vesting
Years of Service according to the following schedule:

                  Years of Service                          Vested Percentage

                      less than 2                                         0
                             2                                           20
                             3                                           40
                             4                                           60
                             5                                           80
                      6 or more                                         100

The minimum Retirement Income for any Top-Heavy Plan Year shall not be forfeited
during any period for which the payment of the Employee's Retirement Income is
required to be suspended under Section 5.10 of the Plan.

         If in any subsequent Plan Year, the Plan ceases to be a Top-Heavy Plan,
the Retirement Board may, in its sole discretion, elect to (a) continue to apply
this vesting schedule in determining the vested percentage of an Employee's
Accrued Retirement Income or (b) revert to the vesting schedule in effect before
the Plan became a Top-Heavy Plan. Any such reversion shall be treated as a Plan
amendment pursuant to the terms of the Plan. No decrease in an Employee's
nonforfeitable percentage may occur in the event the Plan's status as a
Top-Heavy Plan changes for any Plan Year.

         14.8     Adjustments to maximum benefits for Top-Heavy Plans

         (a) In the case of an Employee who is a participant in a defined
benefit plan and a defined contribution plan maintained by the Affiliated
Employers, and such plans as a group are determined to be Top-Heavy for any
limitation year beginning after December 31, 1983, "1.0" shall be substituted
for "1.25" in each place it appears in the denominators of Fractions A and B, as
set forth in Section 6.5 of the Plan, unless the extra minimum benefit is
provided pursuant to Section 14.8(b). Super Top-Heavy Plans shall be required at
all times to substitute "1.0" for "1.25" in the denominator of each plan
fraction.

         (b) If a Key Employee is a participant in both a defined benefit plan
and a defined contribution plan that are both part of a Top-Heavy Group (but
neither of such plans is a Super Top-Heavy Plan), the defined benefit and
defined contribution fractions set forth in Section 6.5 shall remain unchanged,
provided that in Section 14.6 above, "three percent (3%)" shall be substituted
for "two percent (2%)" and "twenty percent (20%)" shall be increased by one (1)
percentage point (but not more than ten (10) percentage points) for each Year of
Service included in the computations under Section 14.6.

         (c) For purposes of this Section 14.8, if the sum of the defined
benefit plan fraction and the defined contribution fraction shall exceed 1.0 in
any Plan Year for any Employee in this Plan, the Affiliated Employers shall
eliminate any amounts in excess of the limits set forth in Section 6.5, pursuant
to Section 6.7 of the Plan.

<PAGE>

                              Article XVArticle XV

                               New Pension Program

          15.1  Eligibility  The  following  Employees  shall be  subject to the
     provisions of this Article XV:

         (a) Employees who (1) are actively employed by an Employing Company on
December 31, 1996 but who will not attain their fortieth (40th) birthday on or
before January 1, 2002, or (2) are not members of an eligible class of Employees
on December 31, 1996 and have not previously participated in the Prior Plans;

         (b) Employees who are actively employed by an Employing Company on
December 31, 1996 and elect in accordance with uniform procedures established by
the Retirement Board to be subject to the provisions of this Article XV; and

         (c) Employees who (1) are employed or reemployed by an Employing
Company on or after January 1, 1997, or (2) rescind a waiver of participation
under Section 2.7 on or after January 1, 1997 that was in effect on December 31,
1996.

         (d) Notwithstanding paragraphs (a) through (c) of this Section 15.1,
Employees covered by the terms of a collective bargaining agreement shall not
participate in the provisions of Article XV unless the bargaining unit
representative and the Employing Company have mutually agreed to such
participation.

         15.2     Retirement Income payable upon retirement
                  -----------------------------------------

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

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

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

         (b) Notwithstanding paragraph (a) above, with respect to an Employee
who is actively employed on December 31, 1996, if the Retirement Income provided
under Article V as of the earlier of his retirement or termination of employment
with an Employing Company or December 31, 2001 would be greater, such Employee
shall be entitled to receive such greater Retirement Income upon his retirement
or termination of employment with an Employing Company.

         (c) For purposes of paragraph (a) above, with respect to Employees
described in Section 15.1(c) the term "Average Monthly Earnings" shall have the
same meaning, as provided in Section 1.5 except that the term "five (5) highest
Plan Years of participation" shall replace the term "three (3) highest Plan
Years of participation" wherever it appears.

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

         15.3 Early Retirement Reduction15.3 Early Retirement Reduction. With
respect to Employees described in Section 15.1(a) and (b) who retire before
their Normal Retirement Date, the monthly amount of Retirement Income provided
in Section 15.2 shall be reduced in accordance with Section 5.5. With respect to
Employees described in Section 15.1(c), the monthly amount of Retirement Income
provided in Section 15.2 shall be reduced in accordance with Section 5.5 except
that the term "five-tenths of one percent (0.5%)" shall replace the term
"three-tenths of one percent (0.3%)" where it appears in the first paragraph
thereof.

         15.4 Transfers from Savannah Electric and Power Company15.4 Transfers
from Savannah Electric and Power Company. With respect to an Employee of
Savannah Electric and Power Company ("SEPCO") who transfers to an Employing
Company in 1997 and who would otherwise be eligible to participate as provided
in Section 15.1 except for the fact that he was employed by SEPCO on December
31, 1996, the provisions of this Article XV shall apply.

         15.5 Effect on other Plan provisions15.5Effect on other Plan
provisions. To the extent not inconsistent with the provisions of this Article
XV, all provisions of the Plan are applicable to Employees described in Section
15.1.

<PAGE>

                             Article XVIArticle XVI

                 Special Provisions Concerning Certain Employees
                    of Southern Electric International, Inc.

     16.1 Eligibility and  Recognition of Service for Former  Employees of Scott
          Paper Company

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

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

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

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

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

         IN WITNESS WHEREOF, the Board of Directors of Southern Company
Services, Inc. through its authorized officer has adopted The Southern Company
Pension Plan this day of , 1996, to be effective January 1, 1997.

       SOUTHERN COMPANY SERVICES, INC.

       By:      _____________________________________________________
                 C. Alan Martin
                 Vice President

By:      _____________________________________________________
          Tommy Chisholm
          Secretary

         [CORPORATE SEAL]

<PAGE>

                                   APPENDIX A

                        THE SOUTHERN COMPANY PENSION PLAN

                    EMPLOYING COMPANIES AS OF JANUARY 1, 1997

                           Alabama Power Company;
                           Georgia Power Company;
                           Gulf Power Company;
                           Mississippi Power Company;
                           Southern Communications Services, Inc.;
                           Southern Company Services, Inc.;
                           Southern Development and Investment Group, Inc.;
                           Southern Energy, Inc.; and
                           Southern Nuclear Operating Company, Inc.

<PAGE>

Schedules

         Alabama Power Company

         Georgia Power Company

         Gulf Power Company

         Mississippi Power Company

         Southern Company Services, Inc.

         Southern Nuclear Operating Company, Inc.

<PAGE>

FIRST AMENDMENT TO
                              THE SOUTHERN COMPANY
                                  PENSION PLAN

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

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

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

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

                                                        1.

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

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

                                                        2.

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

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

                                                        3.

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

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

                                                        4.

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

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

                                                        5.

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

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

                                                        6.

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

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

                                                        7.

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

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

                                                        8.

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

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

                                                        9.

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

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

                                                        10.

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

                                   Article XVI

                 Special Provisions Concerning Certain Employees
                            of Southern Energy, Inc.

        16.1 Eligibility and Recognition of Service for Former Employees.

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

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

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

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

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

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

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

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

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

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

                                                        11.

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

                                                        Article XVII

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

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

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

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

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

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

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

               17.3 SEPCO Employees Eligibility in the New Pension Program

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                           17.6     Transfers of SEPCO Employees.
                                    ----------------------------

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

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

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

                                                        12.

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

                                                       SEPCO SCHEDULE
                                                 Effective January 1, 1998

                                                     TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                Page No.

<S>                       <C>                                                                                   <C>
ARTICLE 1                  DEFINITIONS...........................................................................12

ARTICLE 2                  RETIREMENT ANNUITIES PURCHASED UNDER
                           GROUP ANNUITY CONTRACT AND CHANGE OF
                           FUNDING...............................................................................18

ARTICLE 3                  MEMBERSHIP............................................................................18

ARTICLE 4                  SERVICE...............................................................................20
         4.01              Continuous Service....................................................................20
         4.02              Credited Service......................................................................20
         4.03              Breaks in Service.....................................................................21
         4.04              Disabled Members......................................................................22
         4.05              Service with Certain Other Employers..................................................22

ARTICLE 5                  BENEFITS..............................................................................23
         5.01              Normal and Late Retirement............................................................23
         5.02              Early Retirement......................................................................25
         5.03              Termination of Employment.............................................................26
         5.04              Adjustment of Retirement Allowance for Social Security
                                Benefits.........................................................................27
         5.05              Restoration of Retired Member or Former Member to Service.............................27
         5.06              Additional Monthly Benefit............................................................30
         5.07              Written Application...................................................................31

ARTICLE 6                  LIMITATIONS ON BENEFITS...............................................................31
         6.01              Maximum Benefits......................................................................31

ARTICLE 7                  DISTRIBUTION OF BENEFITS..............................................................36
         7.01              Surviving Spouse Benefit..............................................................36
         7.02              Qualified Joint and Survivor Annuity..................................................36
         7.03              Qualified Preretirement Survivor Annuity..............................................36
         7.04              Definitions...........................................................................39
         7.05              Notice Requirements...................................................................40
         7.06              Transitional Rules....................................................................41
         7.07              Alternative Forms of Distribution.....................................................41
         7.08              Cash-Out of Annuity Benefits..........................................................42
         7.09              Commencement of Benefits..............................................................43
         7.10              Requirement for Direct Rollovers......................................................44

ARTICLE 8                  RETIREE MEDICAL BENEFITS..............................................................44
         8.01              Definitions...........................................................................44
         8.02              Medical benefits......................................................................48
         8.03              Termination of coverage...............................................................48
         8.04              Contributions or Qualified Transfers to fund medical benefits.........................49
         8.05              Pensioned Employee Contributions......................................................50
         8.06              Amendment of Article 8................................................................50
         8.07              Termination of Article 8..............................................................50
         8.08              Reversion of Assets upon Termination..................................................51

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

                                                  ARTICLE 1 - DEFINITIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                  1.10     "Computation Year" shall mean the calendar year.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                             ARTICLE 3 - MEMBERSHIP

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

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

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

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

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

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

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

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

                               ARTICLE 4 - SERVICE

                  4.01     Continuous Service

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

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

                  4.02     Credited Service

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

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

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

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

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

                  4.03     Breaks in Service

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

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

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

                  4.04     Disabled Members

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

                  4.05     Service with Certain Other Employers

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

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

                              ARTICLE 5 - BENEFITS

                  5.01     Normal and Late Retirement

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

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

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

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

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

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

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

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

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

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

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

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

                    (i) the sum of:

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

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

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

                  5.02     Early Retirement

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

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

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

                  5.03     Termination of Employment

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

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

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

                    5.04 Adjustment of Retirement  Allowance for Social Security
               Benefits

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

                  5.05     Restoration of Retired Member or Former Member to
                  Service

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                  5.06     Additional Monthly Benefit

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

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

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

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

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

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

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

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

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

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

                  5.07     Written Application

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

                       ARTICLE 6 - LIMITATIONS ON BENEFITS

                  6.01     Maximum Benefits

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

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

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

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

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

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

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

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

               (i) Determine the defined contribution fraction.

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

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

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

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

                           (d)      For purposes of this Section:

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

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

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

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

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

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

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

               (F) $51,875, or

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

               (H) $41,500, or

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

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

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

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

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

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

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

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

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

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

                      ARTICLE 7 - DISTRIBUTION OF BENEFITS

                  7.01     Surviving Spouse Benefit

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

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

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

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

                  7.02     Qualified Joint and Survivor Annuity

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

                  7.03     Qualified Preretirement Survivor Annuity

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

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

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

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

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

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

                                   Age Member
                                 Would Have Been
                                  At Commencement      Per Centum

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

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

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

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

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

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

                         (i) coverage during active employment, or

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

<PAGE>

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

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

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

                  7.04     Definitions

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

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

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

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

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

                  7.05     Notice Requirements

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

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

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

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

                  7.06     Transitional Rules

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

                  7.07     Alternative Forms of Distribution

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

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

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

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

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

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

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

                  7.08     Cash-Out of Annuity Benefits

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

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

                  7.09     Commencement of Benefits

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

                  7.10     Requirement for Direct Rollovers

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

                      ARTICLE 8 - RETIREE MEDICAL BENEFITS

                  8.01     Definitions.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                  8.02     Medical Benefits

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

                  8.03     Termination of Coverage.

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

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

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

                    (3) as otherwise provided in Exhibit A.

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

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

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

                         (3) as otherwise provided in Exhibit A.

                         8.04  Contributions  or  Qualified  Transfers  to  Fund
                    Medical Benefits.

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

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

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

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

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

                  8.05     Pensioned Employee Contributions.

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

                  8.06     Amendment of Article 8.

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

                  8.07     Termination of Article 8.

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

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

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

                                     SOUTHERN COMPANY SERVICES, INC.

                                     By: ___________________________

                                    Title:__________________________

ATTEST:

By:  _________________________________________________________

Title:________________________________________________________

<PAGE>

                               SECOND AMENDMENT TO
                              THE SOUTHERN COMPANY
                                  PENSION PLAN

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

         WHEREAS, the Company desires to amend the Plan to clarify the grant of
prior service credit to certain employees formerly employed by Commonwealth
Edison of Indiana; and

         WHEREAS, the Company also desires to amend the Plan to discontinue
eligibility under the Plan for employees classified as temporary employees and
to cease the accrual of benefits of any temporary employees who may be
participating in the Plan effective as of August 31, 1998; and

         WHEREAS, the Company also desires to amend the Plan to reflect the
corporate name change of certain Employing Companies; and

         WHEREAS, the Company also desires to amend the Plan 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, the Company hereby amends the Plan as follows to be
effective as provided herein:

                                       1.

         Effective January 1, 1998, Section 1.16 of the Plan, as amended by the
First Amendment to the Plan, is further amended by deleting the last sentence of
such Section and substituting the following in lieu thereof:

         Notwithstanding the preceding, "Employee" shall not mean any person who
         is classified by an Employing Company as an independent contractor
         regardless of whether such classification is determined to be in error.

                                       2.

         Effective September 1, 1998, Section 2.5 of the Plan is amended by
adding the following sentence to the end of the first paragraph thereof:

         Notwithstanding the foregoing, the exclusion set forth in Section 2.6
         shall apply with respect to any temporary employee effective as of
         September 1, 1998.

                                       3.

         Effective September 1, 1998, Section 2.6 of the Plan is amended by
deleting such subsection in its entirety and substituting the following in lieu
thereof:

         2.6 Exclusion of certain categories of employees. Notwithstanding any
other provision of this Article II, leased employees and, effective September 1,
1998, any individuals classified by an Employing Company as temporary employees,
regardless of whether either such classification is determined to be in error,
shall not be eligible to participate in the Plan. Notwithstanding the preceding
sentence, temporary employees, defined as Employees in Section 1.16 and
participating in the Plan prior to July 1, 1991, are eligible to participate in
the Plan up through and including August 31, 1998.

                                       4.

         Effective January 1, 1998, Section 16.1(b) of the Plan as amended by
the First Amendment to the Plan is further amended by deleting such subsection
(b) in its entirety and substituting the following in lieu thereof:

         (b) Former Commonwealth Edison of Indiana Employees. Effective January
1, 1998, notwithstanding any other provision of the Plan to the contrary, any
former employee of Commonwealth Edison of Indiana ("ComEd") who was employed by
Southern Energy Resources, Inc. on or before December 31, 1997 and is set forth
on a schedule of employees acknowledged by the Retirement Board (hereafter
"January 1 ComEd Employees") shall be eligible to participate in the Plan
effective January 1, 1998. In addition, any former employee of ComEd who becomes
employed by Southern Energy Resources, Inc. on or after January 1, 1998 but
prior to April 1, 1998 (hereafter "Date of Employment") and is set forth on the
schedule of employees acknowledged by the Retirement Board (hereafter "Pre-April
1 ComEd Employees") shall become a Participant as of the first day of the month
coincident with or next following such employee's Date of Employment. The
following provisions of this subparagraph (b) shall also apply with respect to
all January 1 ComEd Employees and Pre-April 1 ComEd Employees (hereafter jointly
referred to as "ComEd Scheduled Employees"):

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

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

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

                                       5.

         Effective September 1, 1998, Section 17.1 (d) is amended by adding the
following sentence to the end thereof:

         Notwithstanding the preceding, in the event a SEPCO Employee is
         classified as a temporary employee and is eligible to participate in
         the Plan as such in accordance with this Article XVII, such SEPCO
         Employee shall be ineligible to participate in the Plan on and after
         September 1, 1998.

                                       6.

         Effective January 1, 1998, Section 1.14 of the SEPCO Schedule which is
incorporated in the Plan by the First Amendment thereto, is amended by deleting
the last sentence of such section and substituting the following in lieu
thereof:

         Notwithstanding the preceding, "Employee" shall not mean any person who
         is classified by the Company as an independent contractor regardless of
         whether such classification is determined to be an error.

                                       7.

         Effective September 1, 1998, Section 3.07 of the SEPCO Schedule which
is incorporated into the Plan by the First Amendment thereto, is amended by
deleting such section in its entirety and substituting the following in lieu
thereof:

               Section 3.07  Notwithstanding any other provision of this Article
          3 of the SEPCO Schedule,  Leased Employees and, effective September 1,
          1998,  any   individuals   classified  by  the  Company  as  temporary
          employees,   regardless  of  whether  either  such  classification  is
          determined to be an error, shall not be eligible to participate in the
          Plan.  Notwithstanding the preceding sentence,  temporary employees as
          defined in Section 1.14 of the SEPCO  Schedule who were  participating
          in the SEPCO Plan as  temporary  employees  prior to October 13, 1994,
          shall be  eligible  to  participate  in the  Plan up to and  including
          August 31, 1998.

                                       8.

         Effective July 1, 1998, Appendix A of the Plan is amended by deleting
such Appendix in its entirety and substituting the following in lieu thereof:

                                   APPENDIX A
                        THE SOUTHERN COMPANY PENSION PLAN
                     EMPLOYING COMPANIES AS OF JULY 1, 1998

         Alabama Power Company
         Georgia Power Company
         Gulf Power Company
         Mississippi Power Company
         Savannah Electric and Power Company
         Southern Communications Services, Inc.
         Southern Company Energy Solutions, Inc.
         Southern Company Services, Inc.
         Southern Energy Resources, Inc.
         Southern Nuclear Operating Company, Inc.

                                       9.

         Except as amended herein by this Second Amendment, the Plan shall
remain in full force and effect.

         IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly
authorized officer, has adopted this Second Amendment to The Southern Company
Pension Plan pursuant to resolutions of the Board of Directors of Southern
Company Services, Inc. this ____ day of __________, 1998, to be effective as
stated herein.

                                         SOUTHERN COMPANY SERVICES, INC.

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

                                         Title:
                                               -----------------------------
ATTEST

By:      ________________________

Its:     ________________________

<PAGE>

0361408.doc
                               THIRD AMENDMENT TO
                              THE SOUTHERN COMPANY
                                  PENSION PLAN

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

         WHEREAS, the Company desires to amend the Plan to modify the definition
of Earnings for appliance salespersons to include certain nonproductive pay
earnings types; and

         WHEREAS, the Company desires to amend the Plan to grant prior service
credit to certain employees formerly employed by Commonwealth Energy Systems
("CES") and to provide for an offset of the CES retirement benefit; and

         WHEREAS, the Company desires to amend the Plan to grandfather certain
employees of Southern Company Energy Marketing L.P. who are rehired by an
Employing Company; and

         WHEREAS, the Company desires to clarify Plan language concerning the
Retirement Board's responsibility for controlling and managing Plan assets and
to clarify the calculation of the level income form of payment with respect to
Alternate Payees; and

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

         NOW, THEREFORE, the Company hereby amends the Plan as follows to be
effective as provided herein:

                                       1.

         Effective July 1, 1998, Subsection 1.13(b) of the Plan shall be amended
by adding the following new language to the end thereof:

         Effective as of July 1, 1998, "Earnings" shall also include, for
         appliance salespersons, certain nonproductive pay earnings types as
         determined from time to time by the Board of Directors and set forth on
         Appendix B to the Plan, which Appendix may be updated from time to
         time.

                                       2.

         Effective January 1, 1998, Section 5.5 of the Plan shall be amended by
deleting the last sentence thereof and by adding the following new language:

         The Federal primary Social Security benefit used in calculating an
         Employee's Retirement Income and adjustment described in the preceding
         sentence shall be determined by using the salary history of the
         Employee during his employment with any Affiliated Employer, as
         calculated in accordance with Section 5.4. Notwithstanding the
         preceding sentence with respect to an Alternate Payee, the adjustment
         described in this paragraph shall be determined by using the Alternate
         Payee's actual Social Security salary history and estimated age 65
         Social Security benefit provided that the Alternate Payee secures this
         information for the Retirement Board.

                                       3.

         Effective January 1, 1999, Article XVI of the Plan shall be amended by
adding the following to the end thereof:

         (c)      Former Commonwealth Energy System Employees.
                  -------------------------------------------

                  (1) Effective January 1, 1999, notwithstanding any other
         provision of the Plan to the contrary, any former employees of
         Commonwealth Energy System ("CES") who were employed by Southern Energy
         Resources, Inc. and are set forth on a schedule of employees
         acknowledged by the Retirement Board (hereinafter "CES Employees")
         shall be eligible to become a Participant as of the first day of the
         month coincident with or next following the later of the CES Employee's
         employment date or the date on which he first completes an Eligibility
         Year of Service as provided in Paragraph (5) below.

                  (2) CES Employees who (A) were actively employed by CES on
         January 1, 1997 and (B) attain their fortieth (40th) birthday on or
         before January 1, 2002 shall not be subject to provisions of Article XV
         of the Plan.

                  (3) If and when a CES Employee 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, he shall be entitled to receive Retirement Income
         based on both his Accredited Service with an Employing Company and the
         Credited Service as defined under The Pension Plan for Employees of
         Commonwealth Energy System and Subsidiary Companies (the "CES Plan")
         which shall be treated as if Accredited Service under this Plan.
         However, prior to adjustment for forms of payment, a CES Employee's
         Retirement Income will be reduced by the Actuarial Equivalent as
         defined in Appendix D of the applicable amounts set forth in Appendix
         C. Thereafter, such Employee's benefit shall be subject to applicable
         reductions, if any, in accordance with Article V, Section 8.1 and
         Section 8.2, as appropriate.

                  (4) For purposes of calculating Retirement Income, such CES
         Employee's actual salary history with CES shall be included. With
         respect to determining the Social Security Offset, if the actual salary
         history is not available from CES, such history shall be estimated in
         accordance with Section 5.4.

                  (5) For vesting and participation purposes, such CES Employee
         shall be entitled to receive Vesting and Eligibility Years of Service
         as provided under the Plan and, in addition, shall be entitled to
         vesting and eligibility service equal to the sum of the Years of
         Service as defined and accrued under the CES Plan.

                  (6) Notwithstanding any provision in this Plan to the
         contrary, prior to the offset described in Paragraph 3 above, a CES
         Employee will be entitled to his Retirement Income or his Retirement
         Allowance or vested benefit determined under Appendix D as of the
         earlier of his retirement, termination of employment, or December 31,
         2001 whichever has the greater Actuarial Equivalent value as defined in
         Appendix D. Such determination will be made prior to any adjustment for
         forms of payments.

                                       4.

         Effective February 11, 1999, Section 10.9 of the Plan shall be amended
by deleting such section in its entirety and replacing it with the following:

         Section 10.9 Areas in which the Retirement Board does not have
         responsibility. The Retirement Board shall not have responsibility with
         respect to control or management of the assets of the Plan insofar as
         such control or management is assigned under the Trust Agreement to a
         Person, including but not limited to an Asset Manager, as those terms
         are defined under the Trust Agreement.

         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 Southern Company Pension Fund Investment Review
         Committee.

                                       5.

         Effective January 1, 1999, Section 15.1 of the Plan shall be amended by
adding the following new language to the end thereof:

         (e) Notwithstanding paragraph (c) of this Section 15.1, employees that
         have been previously employed by an Employing Company, transferred to
         Southern Company Energy Marketing, L.P., subsequently transfer back to
         an Employing Company, and are not described in paragraph (a) of this
         Section 15.1, shall not be subject to this Article XV but shall be
         subject to eligibility to participate in the Plan in accordance with
         the provisions of Article II.

                                       6.

         Except as amended herein by this Third Amendment, the Plan shall remain
in full force and effect.

         IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly
authorized officer, has adopted this Third Amendment to The Southern Company
Pension Plan pursuant to resolutions of the Board of Directors of Southern
Company Services, Inc. this ____ day of __________, 1999, to be effective as
stated herein.

                                            SOUTHERN COMPANY SERVICES, INC.

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

                                            Title:
                                                  --------------------------
ATTEST

By:      ________________________
Its:     ________________________

<PAGE>

                                   APPENDIX B

                        Nonproductive Pay Earnings Types

Earnings Code                        Earnings Description

003                                  Salesperson - Hourly
092                                  Holiday Taken
093                                  Meetings
095                                  Meetings - Safety
096                                  Disability 100%
100                                  Disability Extended Approval
106                                  Leave - Death
108                                  Occupational Injury
111                                  Jury Duty
112                                  Training
113                                  Safety Training
115                                  Vacation
116                                  Vacation Special Circumstances
117                                  Vacation FMLA Employee
118                                  Vacation FMLA Family Care
119                                  Time Off With Pay
125                                  Holiday Banked - Taken
127                                  Vacation In Lieu Of Disability
442                                  DISABILITY FMLA EMPLOYEE

<PAGE>

                               FOURTH AMENDMENT TO
                              THE SOUTHERN COMPANY
                                  PENSION PLAN

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

         WHEREAS, the Company desires to amend the Plan to grant prior service
credit to certain employees formerly employed by Pacific Gas and Electric
Company ("PG&E") and to provide for an offset of the PG&E retirement benefit;

         WHEREAS, the Company desires to amend the Plan to grant prior service
and benefit credit to certain employees formerly employed by Orange and Rockland
Utilities, Inc. ("O&R") and to provide for an offset of the O&R retirement
benefit;

         WHEREAS, the Company also desires to make certain clarifying changes
to the Plan; and

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

         NOW, THEREFORE, the Company hereby amends the Plan as follows to be
effective as provided herein:

                                       1.

         Effective January 1, 1997, Section 15.2(d) of the Plan shall be amended
by replacing the term "Early Retirement Date" with the term "earlier Retirement
Date" in each place where such term appears.

                                       2.

         Effective January 1, 1997, Section 15.3 of the Plan is amended by
deleting such Section in its entirety and replacing it with the following:

         15.3     Early Retirement Reduction.
                  --------------------------

                  (a) With respect to Employees described in Section 15.1(a) and
         (b) who retire before their Normal Retirement Date, the monthly amount
         of Retirement Income provided in Section 15.2 shall be reduced in
         accordance with Section 5.5. With respect to Employees described in
         Section 15.1(c), the monthly amount of Retirement Income provided in
         Section 15.2 shall be reduced in accordance with Section 5.5 except
         that the term "five-tenths of one percent (0.5%)" shall replace the
         term "three-tenths of one percent (0.3%)" where it appears in the first
         paragraph thereof.

                  (b) Notwithstanding paragraph (a) above, if a former Employee
         subject to Section 15.1(c)(1) who is eligible to receive Retirement
         Income is reemployed by an Affiliated Employer, his Retirement Income
         accrued prior to his original termination from service shall be
         determined in accordance with the terms of the Plan in effect as of
         such termination. In the event that an Employee described in the
         preceding sentence accrues additional Retirement Income in accordance
         with Section 15.2 after his reemployment, such Retirement Income shall
         be subject to Sections 15.2(c) and the second sentence of Section
         15.3(a).

                                       3.

         Effective January 1, 1995, Section 16.1(a)(3) of the Plan shall be
amended to read as follows:

         (3) With respect to determining the Social Security Offset and the
         level income option set forth in the last paragraph of Section 5.5, the
         actual salary history of the Scheduled Employee during his employment
         with any Affiliated Employer and with Scott Paper Company shall be
         utilized. If the actual salary history is not available from Scott
         Paper Company, such history shall be estimated in accordance with
         Section 5.4.

                                       4.

         Effective January 1, 1999, Section 16.1(c)(1) of the Plan shall be
amended by replacing the phrase "eligible to become a Participant" with the
phrase "included in the Plan" and Section 16.1(c)(4) shall be amended to read as
follows:

         (4) For purposes of calculating Retirement Income, such CES Employee's
         actual salary history with CES shall be included. With respect to
         determining the Social Security Offset and the level income option set
         forth in the last paragraph of Section 5.5, if the actual salary
         history is not available from CES, such history shall be estimated in
         accordance with Section 5.4.

                                       5.

         Effective April 1, 1999, Article XVI of the Plan shall be amended by
adding the following to the end thereof:

         (d)      Former Pacific Gas and Electric Company Employees.
                  -------------------------------------------------

                  (1) Effective April 1, 1999, notwithstanding any other
         provision of the Plan to the contrary, any former employees of Pacific
         Gas and Electric Company ("PG&E") who were employed by Southern Energy
         Resources, Inc. and are set forth on a schedule of employees
         acknowledged by the Retirement Board (hereinafter "PG&E Employees")
         shall be included in the Plan as of the first day of the month
         coincident with or next following the later of the PG&E Employee's
         employment date or the date on which he first completes an Eligibility
         Year of Service as provided in Paragraph (5) below.

                  (2) PG&E Employees who (A) were actively employed by PG&E on
         January 1, 1997 and (B) attain their fortieth (40th) birthday on or
         before January 1, 2002 shall not be subject to provisions of Article XV
         of the Plan.

                  (3) If and when a PG&E Employee 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, he shall be entitled to receive Retirement Income
         based on both his Accredited Service with an Employing Company and his
         service for benefit purposes as defined and accrued under the Pacific
         Gas and Electric Company Retirement Plan (the "PG&E Plan") which shall
         be treated as if Accredited Service under this Plan. To calculate such
         PG&E Employee's Retirement Income, the PG&E Employee's Accrued
         Retirement Income, as determined in accordance with Section 5.1, shall
         first be reduced by the Employee's accrued benefit in the PG&E Plan,
         determined as if he retired from PG&E on his Normal Retirement Date, as
         defined in the PG&E Plan on April 1, 1999. Thereafter, such PG&E
         Employee's Retirement Income shall be subject to applicable reductions,
         if any, in accordance with Article V, Section 8.1 and Section 8.2, as
         appropriate.

                  (4) For purposes of calculating Retirement Income, such PG&E
         Employee's actual salary history with PG&E shall be included. With
         respect to determining the Social Security Offset and the level income
         option set forth in the last paragraph of Section 5.5, if the actual
         salary history is not available from PG&E, such history shall be
         estimated in accordance with Section 5.4.

                  (5) For vesting and participation purposes, such PG&E Employee
         shall be entitled to receive Vesting and Eligibility Years of Service
         as provided under the Plan and, in addition, shall be entitled to
         vesting and eligibility service equal to such service as defined and
         accrued under the PG&E Plan.

                                       6.

         Effective July 1, 1999, Article XVI of the Plan shall be amended by
adding the following to the end thereof:

         (e)      Former Orange and Rockland Utilities, Inc. Employees.
                  ----------------------------------------------------

                  (1) Effective July 1, 1999, notwithstanding any other
         provision of the Plan to the contrary, any former employees of Orange
         and Rockland Utilities, Inc. ("O&R") who were employed by Southern
         Energy Resources, Inc. and are set forth on a schedule of employees
         acknowledged by the Retirement Board (hereinafter "O&R Employees")
         shall be included in the Plan as of the first day of the month
         coincident with or next following the later of the O&R Employee's
         employment date or the date on which he first completes an Eligibility
         Year of Service as provided in Paragraph (8) below.

                  (2) Notwithstanding anything in the Plan to the contrary, the
         monthly Retirement Income payable to an O&R Employee shall be a monthly
         Retirement Income determined as a single life annuity commencing on his
         Normal Retirement Date equal to (A) the Allowance payable to such O&R
         Employee as defined under the Employees' Retirement Plan of Orange and
         Rockland Utilities, Inc. ("O&R Plan") on June 30, 1999 ("Closing Date")
         and as accrued under the O&R Plan for periods prior to the Closing Date
         ("O&R Benefit") and (B) one-twelfth (1/12) of two percent (2%) of the
         O&R Employee's Earnings received during each year of Accredited Service
         under the Plan for periods beginning on and after the Closing Date. In
         addition, for purposes of (B) above, immediately prior to an O&R
         Employee's separation from the service of an Employing Company, such
         O&R Employee shall be credited with two additional years of Accredited
         Service, with Earnings credited during each of these two additional
         years of Accredited Service equal to his Earnings at the time he
         separates from service.

                  (3) Notwithstanding anything in the Plan to the contrary, the
         Early Retirement Date of an O&R Employee under the Plan shall be the
         first day of the month following the date such O&R Employee retires on
         or after his fifty-fifth (55th) birthday, provided such O&R Employee
         has accrued ten (10) or more years of Accredited Service. For such
         purpose, the O&R Employee's Credited Service for periods prior to April
         8, 1999, and Eligible Service for periods on and after April 8, 1999
         and prior to the Closing Date, as such service is defined and accrued
         under the O&R Plan, shall be treated as Accredited Service under this
         Plan. The amount of such O&R Employee's Retirement Income shall be
         determined in accordance with Paragraph (2) above, reduced by one-third
         of one-percent (.333%) for each complete calendar month by which the
         commencement date precedes the first day of the month following the O&R
         Employee's sixtieth (60th) birthday. The reduction in the preceding
         sentence shall be in lieu of the reduction described in Section 5.5. No
         reduction of an O&R Employee's Retirement Income shall be made,
         however, if the sum of such O&R Employee's number of years of
         Accredited Service (including his Eligible Service under the O&R Plan
         prior to the Closing Date) and his age as of his Early Retirement Date
         equals or exceeds eighty-five (85).

                  (4) In addition to the other benefits described herein, an O&R
         Employee who retires from service after his Early Retirement Date and
         whose Retirement Income commences after his sixtieth (60) birthday and
         before his sixty-second (62nd) birthday shall receive a supplemental
         payment of six hundred dollars ($600.00) for each month beginning on
         the date his Retirement Income commences. Such supplemental payments
         shall cease after payment is made for the month which includes such O&R
         Employee's sixty-second (62nd) birthday or the month during which the
         O&R Employee dies, whichever is earlier. This supplemental payment
         shall not be paid as an optional form of payment under the Plan and
         shall not be payable to any Provisional Payee. Notwithstanding the
         foregoing, in any event, the supplemental payment shall not be paid
         under this Plan to the extent that a supplemental payment is payable
         under the O&R Plan.

                  (5) The Retirement Income payable to an O&R Employee who is
         entitled to receive Retirement Income in accordance with Article VIII
         shall be determined in accordance with paragraph (2). Such O&R Employee
         may elect to receive his vested Retirement Income as of the first day
         of any month after his fifty-fifth (55th) birthday provided such O&R
         Employee has accrued ten (10) or more years of Accredited Service or as
         of his Normal Retirement Date. For such purpose, the O&R Employee's
         Credited Service for periods prior to April 8, 1999, and Eligible
         Service for periods on and after April 8, 1999 and prior to the Closing
         Date, as such service is defined and accrued under the O&R Plan, shall
         be treated as Accredited Service under this Plan. Such Retirement
         Income shall be reduced by one-half of one-percent (.5%) for each
         calendar month by which the commencement date precedes the first day of
         the month following the O&R Employee's sixty-fifth (65th) birthday. The
         reduction in the preceding sentence shall be in lieu of the reduction
         described in Section 8.2.

                  (6) For purposes of calculating the level income option set
         forth in the last paragraph of Section 5.5 , the actual pay history of
         an O&R Employee with O&R shall be utilized. If the actual pay history
         is not available from O&R, such history shall be estimated in
         accordance with Section 5.4.

                  (7) If and when an O&R Employee 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, his Retirement Income shall be offset by the
         largest O&R Benefit payable under the O&R Plan as of (A) the Closing
         Date, (B) the date such O&R Employee's benefits commence under this
         Plan or (C) any date during the period beginning on the Closing Date
         and ending on the date such O&R Employee's benefits commence under this
         Plan. Notwithstanding the preceding sentence, in the event that an O&R
         Employee is not eligible to receive an O&R Benefit prior to his
         sixty-fifth (65th) birthday, the amount of the offset shall (A) in the
         event that the O&R Employee's Retirement Income commences prior to his
         sixty-fifth (65th) birthday, be reduced when he attains his sixty-fifth
         (65th) birthday by the largest O&R Benefit payable to such O&R
         Employee, regardless of whether such O&R Benefit actually commences
         when he attains his sixty-fifth (65th) birthday, or (B) in the event
         that the O&R Employee's Retirement Income commences on or after he
         attains his sixty-fifth (65th) birthday, be reduced by the amount of
         the O&R Benefit payable to such O&R Employee at the time his Retirement
         Income commences, regardless of whether his O&R Benefit commences at
         such time. Any reduction described above shall be made after an O&R
         Employee's Retirement Income is adjusted in accordance with Article V,
         or Section 8.1 and Section 8.2, as appropriate. The offsets set forth
         in this Paragraph shall be further described in an Offset Summary
         adopted by the Retirement Board, which shall be used as a reference to
         calculate the amount of the O&R Plan offsets.

                  (8) For purposes of vesting and participation, an O&R Employee
         shall accrue service as provided under the Plan and, in addition, shall
         be entitled to service credit for these purposes equal to his Eligible
         Service as defined and accrued under the O&R Plan prior to the Closing
         Date.

                  (9) For purposes of Paragraph (2) above, Earnings shall have
         the same meaning as set forth in Section 1.13 of the Plan modified as
         follows: (A) during a Plan Year in which an O&R Employee is employed,
         Earnings shall include the rate of salary or wages actually paid to
         such O&R Employee, plus actual annual incentive payments made to the
         O&R Employee for which he is eligible; (B) for the two year period
         credited in accordance with the last sentence of Paragraph (2),
         Earnings shall have the same meaning as set forth in (A) above, except
         that it shall be based on such O&R Employee's rate of salary or wages
         in effect as of his separation from service.

                                       7.

         Effective January 1, 1997, Section 1.14(a) of the Georgia Power Company
Schedule and Section 1.13(a) of the Southern Nuclear Operating Company, Inc.
Schedule shall be amended by replacing the term "nuclear plan premium" with the
term "nuclear plant premium" in each place where such term appears.

                                       8.

         Except as amended herein by this Fourth Amendment, the Plan shall
remain in full force and effect.

         IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly
authorized officer, has adopted this Fourth Amendment to The Southern Company
Pension Plan pursuant to resolutions of the Board of Directors of Southern
Company Services, Inc. this ____ day of ___________________, 1999, to be
effective as stated herein.

                                     SOUTHERN COMPANY SERVICES, INC.

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

                                     Title:
                                           ---------------------------
ATTEST

By:      ________________________
Its:     ________________________

<PAGE>

                               FIFTH AMENDMENT TO
                              THE SOUTHERN COMPANY
                                  PENSION PLAN

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

         WHEREAS, the Company desires to amend the Plan to clarify offset
provisions applicable to the benefits provided to former Scott Paper Company
employees; and

         WHEREAS, the Company desires to amend the Plan to clarify offset
provisions applicable to the benefits provided to certain employees formerly
employed by Commonwealth Energy System; and

         WHEREAS, the Company desires to amend the Plan to clarify the benefit
and offset provisions applicable to certain employees formerly employed by
Commonwealth Edison of Indiana; and

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

         NOW, THEREFORE, the Company hereby amends the Plan as follows to be
effective as provided herein:

                                       1.

         Effective January 1, 1995, Section 16.1(a) of the Plan shall be amended
by deleting such subsection (a) in its entirety and substituting the following
in lieu thereof:

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

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

                           (2) Such Scott Scheduled Employee, if and when he
                  attains his Early Retirement Date, Normal Retirement Date, or
                  Deferred Retirement Date, or terminates service for any other
                  reason subject to the requirements of Section 8.1 or 8.2,
                  shall be entitled to receive Retirement Income based on both
                  his Accredited Service with an Employing Company and the
                  service accrued under the Scott Paper Company Pension Plan for
                  Salaried Employees (the "Scott Salaried Plan") which shall be
                  treated as if Accredited Service under this Plan. To calculate
                  such Scott Scheduled Employee's Retirement Income, the Scott
                  Scheduled Employee's Accrued Retirement Income, as determined
                  in accordance with Section 5.1, shall first be reduced by the
                  applicable reductions, if any, set forth in Article V, Section
                  8.1 and Section 8.2, as appropriate. Thereafter, such Scott
                  Salaried Employee's Accrued Retirement Income shall be reduced
                  by such Employee's accrued benefit in the Scott Salaried Plan,
                  as set forth in Schedule A attached hereto (the "Scheduled
                  Benefit"). Prior to the subtraction of the Scheduled Benefit
                  from the Scott Scheduled Employee's Accrued Retirement Income,
                  the Scheduled Benefit will be reduced to reflect the age at
                  which the Employee's Retirement Income is scheduled to
                  commence (the "Southern Commencement Date") in accordance with
                  the applicable reduction factors set forth in Schedule A.

                           (3) For purposes of calculating the Social Security
                  Offset and the level income option set forth in the last
                  paragraph of Section 5.5, the actual salary history of a Scott
                  Scheduled Employee with Scott Paper Company shall be included.
                  If the actual salary history is not available from Scott Paper
                  Company, such history shall be estimated in accordance with
                  Section 5.4.

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

                                       2.

         Effective January 1, 1998, Section 16.1(b) of the Plan, as amended by
the First Amendment and Second Amendment to the Plan, is further amended by
deleting such subsection (b) in its entirety and substituting the following in
lieu thereof:

                  (b) Former Commonwealth Edison of Indiana Employees. Effective
         January 1, 1998, notwithstanding any other provision of the Plan to the
         contrary, any former employee of Commonwealth Edison of Indiana
         ("ComEd") who was employed by Southern Energy Resources, Inc. on or
         before December 31, 1997 and is set forth on a schedule of employees
         acknowledged by the Retirement Board (hereafter "January 1 ComEd
         Employees") shall be eligible to participate in the Plan effective
         January 1, 1998. In addition, any former employee of ComEd who becomes
         employed by Southern Energy Resources, Inc. on or after January 1, 1998
         but prior to April 1, 1998 (hereafter "Date of Employment") and is set
         forth on the schedule of employees acknowledged by the Retirement Board
         (hereafter "Pre-April 1 ComEd Employees") shall become a participant as
         of the first day of the month coincident with or next following such
         employee's Date of Employment. The following provisions of this
         subparagraph (b) shall also apply with respect to all January 1 ComEd
         Employees and Pre-April 1 ComEd Employees (hereafter jointly referred
         to as "ComEd Scheduled Employees"):

                           (1) Such ComEd Scheduled Employee, if and when he
                  attains his Early Retirement Date, Normal Retirement Date, or
                  Deferred Retirement Date, or terminates service for any reason
                  subject to the requirements of Section 8.1 or 8.2, shall be
                  entitled to receive the greater of A or B below:

               (A) Retirement  Income based on both his Accredited  Service with
          an Employing  Company and the service  accrued under the  Commonwealth
          Edison  Company of Indiana  Service  Annuity  System  Plan (the "ComEd
          Plan")  which  shall be treated as if  Accredited  Service  under this
          Plan. To calculate such ComEd Scheduled  Employee's  Retirement Income
          under this  subsection  (A), the ComEd  Scheduled  Employee's  Accrued
          Retirement  Income,  as  determined  in  accordance  with Section 5.1,
          subject to the  provisions  of Article XV of the Plan,  shall first be
          reduced  by  the  Employee's   accrued  benefit  in  the  ComEd  Plan,
          determined as if he retired from ComEd at his normal  retirement  age,
          as that term is defined in the ComEd Plan on December  31, 1997 and as
          set  forth  on  Schedule  B  attached  hereto  (the  "ComEd  Reduction
          Amount").  For each full year of Accredited  Service with an Employing
          Company earned by a ComEd  Scheduled  Employee,  up to a maximum of 10
          years,  the ComEd  Reduction  Amount  shall be  reduced by 5% with the
          maximum reduction equal to 50% of the original ComEd Reduction Amount.
          Thereafter,  such  Employee's  Retirement  Income  shall be subject to
          applicable  reductions,  if any, in accordance with Article V (subject
          to the  provisions  in Article  XV),  Section 8.1 and Section  8.2, as
          appropriate.

               (B)  Retirement  Income based on his  Accredited  Service with an
          Employing Company and disregarding any service accrued under the ComEd
          Plan,  subject to applicable  reductions,  if any, in accordance  with
          Article V (subject to the  provisions in Article XV),  Section 8.1 and
          Section 8.2, as appropriate.

                           (2) For purposes of calculating the level income
                  option set forth in the last paragraph of Section 5.5, the
                  actual salary history of a ComEd Scheduled Employee with ComEd
                  shall be included. If the actual salary history is not
                  available from ComEd, such history shall be estimated in
                  accordance with Section 5.4.

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

                                                        3.

         Effective January 1, 1999, Section 16.1(c) of the Plan, as added by the
Third Amendment to the Plan and amended by the Fourth Amendment to the Plan,
shall be amended by deleting such subsection (c) in its entirety and
substituting the following in lieu thereof:

         (c)      Former Commonwealth Energy System Employees.
                  -------------------------------------------

                           (1) Effective January 1, 1999, notwithstanding any
                  other provision of the Plan to the contrary, any former
                  employees of Commonwealth Energy System ("CES") who were
                  employed by Southern Energy Resources, Inc. and are set forth
                  on Schedule C attached hereto (hereinafter "CES Employees")
                  shall be included in the Plan as of the first day of the month
                  coincident with or next following the later of the CES
                  Employee's employment date or the date on which he first
                  completes an Eligibility Year of Service as provided in
                  Paragraph (5) below.

                           (2) CES Employees who (A) were actively employed by
                  CES on January 1, 1997 and (B) attain their fortieth (40th)
                  birthday on or before January 1, 2002 shall not be subject to
                  provisions of Article XV of the Plan.

                           (3) If and when a CES Employee 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, he shall be
                  entitled to receive Retirement Income based on both his
                  Accredited Service with an Employing Company and the Credited
                  Service as defined under The Pension Plan for Employees of
                  Commonwealth Energy System and Subsidiary Companies (the "CES
                  Plan") which shall be treated as Accredited Service under this
                  Plan. However, after applicable reductions for early
                  commencement as provided in Article V, Section 8.1 and Section
                  8.2, as appropriate, but prior to adjustments for forms of
                  payment, a CES Employee's Accrued Retirement Income will be
                  reduced by the benefit attributable to Credited Service
                  accrued by a CES Employee under the CES Plan as set forth in
                  Schedule C attached hereto (the "Scheduled Benefit"). Prior to
                  the Scheduled Benefit being subtracted from a CES Employee's
                  Retirement Income, it will be reduced to reflect the age at
                  which the CES Employee's Retirement Income is scheduled to
                  commence (the "Southern Commencement Date"). Such early
                  retirement reductions shall be determined (A) for a CES
                  Employee who is at least age 55 but not yet 65 on his Southern
                  Commencement Date, by applying the factors set forth in the
                  definition of Actuarial Equivalent contained in Section 8 of
                  Schedule D attached hereto for each calendar month by which
                  the Southern Commencement Date precedes his sixty-fifth (65th)
                  birthday; and (B) for a CES Employee who is under age 55 on
                  his Southern Commencement Date, by first applying the
                  reduction factors in (A) for ages 55 to 65 and then applying
                  an additional reduction equal to one-third of one-percent
                  (.333%) for each calendar month by which the Southern
                  Commencement Date precedes his fifty-fifth (55th) birthday.
                  Notwithstanding the above, the Scheduled Benefit of CES
                  Employees who are specifically designated on Schedule C to
                  have 75 points shall not be subject to the early retirement
                  reductions described in (A) above but shall be subject to
                  those reductions described in (B) above (relating to those CES
                  Employees with a Commencement Date that precedes their
                  fifty-fifth (55th) birthday), if applicable.

                           (4) For purposes of calculating Retirement Income,
                  such CES Employee's actual salary history with CES shall be
                  included. With respect to determining the Social Security
                  Offset and the level income option set forth in the last
                  paragraph of Section 5.5, if the actual salary history is not
                  available from CES, such history shall be estimated in
                  accordance with Section 5.4.

                           (5) For vesting and participation purposes, such CES
                  Employee shall be entitled to receive Vesting and Eligibility
                  Years of Service as provided under the Plan and, in addition,
                  shall be entitled to vesting and eligibility service equal to
                  the years of service as defined and accrued under the CES
                  Plan.

                           (6) Notwithstanding any provision in this Plan to the
                  contrary, a CES Employee's Retirement Income will not be less
                  than the greater of (A) his Retirement Allowance or (B) his
                  vested benefit, as described in Schedule D attached hereto
                  which summarizes the benefit provisions provided by the CES
                  Plan on December 31, 1998, as of the earlier of his
                  retirement, termination of employment, or December 31, 2001.
                  Such determination will be made prior to any adjustment for
                  forms of payments.

                           (7)      For purposes of this 16.1(c), Earnings
                shall mean the following:

               (A) With respect to Paragraph (3) above, for periods on and after
          January 1, 1999, Earnings is defined in Paragraph 1.13 and for periods
          before  January 1, 1999,  Earnings  shall have the same meaning as the
          term  "Compensation"  as  provided  under  the  CES  Plan  during  the
          applicable period.

               (B) With respect to determining the minimum  benefit  provided in
          Paragraph  (6)  above,   Earnings  shall  have  the  same  meaning  as
          Compensation  as provided  under the CES Plan prior to January 1, 1999
          and from the period  January 1, 1999 to  December  31, 2001 shall mean
          the  authorized   basic  rate  of   compensation  at  Southern  Energy
          Resources,  Inc.  ("SERI")  as in  effect  on  January  1  each  year,
          converted to an annual  basis,  exclusive of all  compensation  in the
          form of pay for  overtime,  commissions,  bonuses  and the  like;  but
          inclusive of amounts deferred under a salary  reduction  agreement for
          that year.  Notwithstanding anything contained herein to the contrary,
          a CES Employee's  Compensation  for any Plan Year as determined  under
          the preceding  sentence shall not exceed  $150,000.00  (or such higher
          limit as  determined  by the  Secretary of the Treasury  under Section
          401(a)(17) of the Code).

         IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly
authorized officer, has adopted this Fifth Amendment to The Southern Company
Pension Plan pursuant to resolutions of the Board of Directors of Southern
Company Services, Inc. this ____ day of , 2000, to be effective as stated
herein.

                                        SOUTHERN COMPANY SERVICES, INC.

                                        By:

                                        Title:
                                              -------------------------
ATTEST

By:      ________________________

Its:     ________________________

<PAGE>

                               SIXTH AMENDMENT TO
                              THE SOUTHERN COMPANY
                                  PENSION PLAN

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

     WHEREAS, Southern  Energy,  Inc.  ("SEI"),  an Employing Company under the
Plan,  will  through a  subsidiary  become  the  employer  of  certain
individuals  currently  employed by Southern Company Energy Marketing,
L.P. ("SCEM") following a reorganization of SCEM;

         WHEREAS, The Southern Company ("Southern") anticipates that in 2001 it
will distribute pro rata to the Southern shareholders all of the stock of SEI
held by Southern pursuant to a tax-free spin-off under Section 355 of the
Internal Revenue Code;

         WHEREAS, in connection with such transaction, Southern and SEI have
entered into an Employee Matters Agreement ("Agreement") to allocate between
them assets, liabilities and responsibilities with respect to certain employee
compensation, benefit plans, and programs, and certain employment matters;

         WHEREAS, the Company desires to amend the Plan to exclude the former
SCEM employees from participation in the Plan by virtue of their employment with
SEI;

         WHEREAS, the Company desires to amend the Plan to address the spin-off
of SEI from Southern, including making such changes as are pursuant to the
Agreement;

         WHEREAS, the Company desires to amend the Plan to authorize
participation by employees represented by the International Brotherhood of
Electrical Workers Local 1208 and Office and Professional Employees
International Union Local 455, pursuant to negotiated collective bargaining
agreements;

         WHEREAS, the Company desires to amend the Plan to clarify the
Accredited Service awarded under the Prior Plans;

         WHEREAS, the Company desires to amend the Plan to make certain
technical changes and to reflect recent changes in the law; and

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

         NOW, THEREFORE, the Company hereby amends the Plan as follows,
effective as of January 1, 1997, unless indicated otherwise below:

<PAGE>

                                       1.

         The first paragraph of Section 1.36, "Social Security Offset," shall be
amended, effective January 1, 1998, to read as follows:

                  1.36 "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, 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 an Employing Company
         have mutually agreed to participation in the Plan as amended, $325 per
         month on and after January 1, 1996, and for Employees who are covered
         under a collective bargaining agreement with IBEW Local 1208, $350 per
         month on and after January 1, 1998, 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 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:

                                       2.

         Article II, "Eligibility," shall be amended by adding the following new
Section 2.8 to the end:

               2.8 Exclusion of Certain  Employees of Southern Energy Resources,
          Inc.  Notwithstanding  any other  provision  of this  Article  II, the
          following  Employees who would otherwise be eligible to participate in
          the Plan by virtue of their  employment by Southern Energy  Resources,
          Inc. ("SERI") shall not be eligible to participate in the Plan:

                    (a)   individuals   employed  by  Southern   Company  Energy
               Marketing, L.P. ("SCEM") on December 22, 2000;

                    (b) Employees  hired by SERI on or after  December 23, 2000,
               who are employed in the Americas  Group and whose job function is
               listed on Attachment A attached hereto. 3.

                    Section  2.8,  "Exclusion  of Certain  Employees of Southern
               Energy  Resources,  Inc.,"  shall be amended to read as  follows,
               effective  as of the Group  Status  Change Date as defined in the
               Agreement:

                    2.8 Exclusion of Certain Employees of Southern Energy,  Inc.
               Notwithstanding any other provision of this Article II, Employees
               who are  eligible to  participate  in the Plan by virtue of their
               employment  by  Southern  Energy,   Inc.  or  any  subsidiary  or
               affiliate  thereof  shall not be eligible to  participate  in the
               Plan.

                                       4.

         Section 4.1, "Accredited Service pursuant to Prior Plan," shall be
deleted in its entirety and replaced with the following:

4.1                   Accredited Service pursuant to Prior Plan.
                      -----------------------------------------

                    (a) Each Employee who  participated in the Prior Plans shall
               be credited with such  Accredited  Service,  if any, earned under
               such Prior Plans as of December 31, 1996.

                    (b) In addition to any  Accredited  Service  credited  under
               Section  4.1(a),  an Employee  shall be  entitled  to  Accredited
               Service  determined under the Prior Plans,  without regard to the
               age  requirement  for  eligibility  to  participate  in the Prior
               Plans, in excess of the Accredited  Service  determined under the
               Prior Plans  (including the age  requirement  for  eligibility to
               participate in the Prior Plans). Such Accredited Service shall be
               considered   Accredited  Service  after  December  31,  1985  for
               purposes of  calculating  an Employee's  Retirement  Income under
               Articles V, XV or XVII.

                                       5.

         Section 4.4, "Accrual of Retirement Income during period of total
disability," shall be amended by adding the following new subsection (e) (and
redesignating the current subsection (e) as subsection (f)):

                  (e)      (i) If an Employee's Disability Leave terminates on
                           or after his Normal Retirement Date and he fails to
                           return to the employment of an Employing Company
                           within sixty (60) days after the termination of such
                           leave, his service shall be deemed to have terminated
                           upon the termination of his Disability Leave and such
                           termination of service shall be deemed to constitute
                           his retirement under Section 3.3.

                           (ii) An Employee whose Disability Leave continues
                           beyond his Normal Retirement Date based on
                           entitlement to long-term disability benefits under a
                           long-term disability plan of an Employing Company
                           shall have payment of his Retirement Income suspended
                           pursuant to Code Section 411(a)(3)(B) until he is no
                           longer eligible under a long-term disability plan of
                           an Employing Company. Such Employee shall then
                           receive Retirement Income determined as of the date
                           such eligibility ends. However, if the Employee's
                           Disability Leave continues after the date the
                           Employee ceases to be eligible for the long-term
                           disability plan of an Employing Company based on
                           entitlement to Social Security Disability benefits,
                           his Retirement Income for the period after his Normal
                           Retirement Date shall be determined under Subsection
                           (iii).

                           (iii) An Employee whose Disability Leave continues
                           for any period after his Normal Retirement Date based
                           solely on his entitlement to Social Security
                           Disability benefits shall receive Retirement Income
                           as of his Deferred Retirement Date. However, if his
                           Deferred Retirement Date occurs in a Plan Year
                           subsequent to the Plan Year in which occurs his
                           Normal Retirement Date, his Retirement Income shall
                           not be less than his Retirement Income adjusted for
                           commencement after his Normal Retirement Date. For
                           the Plan Year following the Plan Year in which occurs
                           the Employee's Normal Retirement Date, his adjusted
                           Retirement Income shall be equal to the greater of
                           his Retirement Income determined as of such date or
                           the Actuarial Equivalent of his Retirement Income
                           computed as of his Normal Retirement Date. For the
                           next Plan Year, his adjusted Retirement Income shall
                           be equal to the greater of his Retirement Income
                           determined as of such Plan Year or the Actuarial
                           Equivalent of his adjusted Retirement Income computed
                           as of the end of the prior Plan Year. This process
                           shall be repeated each Plan Year until the
                           termination of his Disability Leave.

                                       6.

         Section 5.7, "Payment of Retirement Income," shall be amended,
effective January 1, 2000, by adding the following to the end of the second
paragraph:

         However, if an Employee fails to make an election pursuant to this
         Section 5.7 within the thirty (30) day period immediately preceding his
         Retirement Date, his Retirement Income shall be determined as of his
         Retirement Date and payment thereof shall commence as soon as
         administratively feasible following his election to retire, provided
         his election occurs not more than ninety (90) days after his Retirement
         Date. If the election is made more than ninety (90) days following an
         Employee's Retirement Date, his benefits shall commence as soon as
         administratively feasible and his Retirement Income shall be determined
         as of the first day of the month following submission of his election.

                                       7.

         Subsection (3) of Section 5.9(b), "Required minimum distributions,"
shall be deleted in its entirety and replaced with the following:

(3)               With respect to an Employee who retires after attaining age
                  70-1/2 and who has not previously commenced receipt of his
                  Retirement Income pursuant to this Section 5.9(b) while an
                  Employee of an Affiliated Employer, the amount of his
                  Retirement Income shall be computed as of the end of the Plan
                  Year the Employee attains age 70-1/2 and shall be recomputed
                  as of the close of each Plan Year thereafter and preceding his
                  Deferred Retirement Date. With respect to each Plan Year
                  following the Plan Year the Employee attains age 70-1/2, his
                  Retirement Income shall equal the greater of his Retirement
                  Income determined as of such Plan Year or the Actuarial
                  Equivalent of his Retirement Income computed as of the end of
                  the Plan Year he attains age 70-1/2. For the next Plan Year,
                  his adjusted Retirement Income shall be equal to the greater
                  of his Retirement Income determined as of such Plan Year or
                  the Actuarial Equivalent of his adjusted Retirement Income
                  computed as of the end of the prior Plan Year. This process
                  shall be repeated each Plan Year until his Deferred Retirement
                  Date.

                                                        8.

         Section 5.9(b), "Required minimum distributions," shall be amended by
adding a new subsection (4) as follows:

(4)               If a former Employee who is receiving Retirement Income shall
                  be reemployed by any Affiliated Employer as an Employee and
                  his Retirement Income is suspended in accordance with Section
                  5.10(b), the Retirement Income payable upon his subsequent
                  retirement shall be adjusted in accordance with Section
                  5.9(b)(3) if his subsequent retirement occurs after he attains
                  age 70-1/2, but shall be reduced by the Actuarial Equivalent
                  of any Retirement Income he received prior to his reemployment
                  in accordance with Section 5.10(b).

                                                        9.

         Section 5.10, "Suspension of Retirement Income for reemployment," shall
be renamed "Suspension of Retirement Income," and shall be amended to read as
follows:

                  5.10     Suspension of Retirement Income.
                           -------------------------------

                           (a) The Retirement Income of an Employee who remains
                           in active service after his Normal Retirement Date
                           shall be suspended for each calendar month after his
                           Normal Retirement Date during which he completes
                           forty (40) or more Hours of Service, pursuant to
                           ERISA Section 203(a)(3)(B) ("ERISA Section
                           203(a)(3)(B) Service").

                           (b) If a former Employee who is receiving Retirement
                           Income shall be reemployed by any Affiliated Employer
                           as an Employee and shall not elect to waive his right
                           to participate under the Plan or the pension plan of
                           the Affiliated Employer, whichever applies, his
                           Retirement Income shall be suspended for each
                           calendar month after his reemployment during which he
                           is employed in ERISA Section 203(a)(3)(B) Service.
                           The Retirement Income payable upon his subsequent
                           retirement shall be reduced by the Actuarial
                           Equivalent of any Retirement Income he received prior
                           to his reemployment.

                           (c) No payment shall be suspended by the Plan
                           pursuant to this Section 5.10 unless the Plan
                           notifies the Employee by personal delivery or first
                           class mail during the first calendar month in which
                           the Plan withholds payments that his Retirement
                           Income is suspended.

                           (d) If the payment of Retirement Income has been
                           suspended, payments shall resume no later than the
                           first day of the third calendar month after the
                           calendar month in which the Employee ceases to be
                           employed in ERISA Section 203(a)(3)(B) service. The
                           initial payment upon resumption shall include the
                           payment scheduled to occur in the calendar month when
                           payments resume and any amounts withheld during the
                           period between the cessation of ERISA Section
                           203(a)(3)(B) service and the resumption of payments.

                                                        10.

         Effective for plan years beginning on or after January 1, 2000, Section
6.4, "Limitation on benefits from multiple plans," Section 6.5, "Special rules
for plans subject to overall limitations under Code Section 415(e)," and Section
6.6, "Combination of plans," shall be deleted in their entirety and replaced
with the following (and Section 6.7 shall be renumbered as Section 6.5):

                  6.4      Limitations on benefits from multiple plans.
                           -------------------------------------------

                           (a) For purposes of the limitations described in
                           Section 6.1 of the Plan and Section 415 of the Code,
                           all defined benefit plans (whether or not terminated)
                           maintained by an Affiliated Employer shall be treated
                           as one defined benefit plan.

                           (b) Notwithstanding any provisions contained herein
                           to the contrary, in the event that an Employee
                           participates in another defined benefit plan required
                           to be aggregated with this Plan under Code Section
                           415(g) and the combined benefits with respect to an
                           Employee exceed the limitations contained in Code
                           Section 415(b), corrective adjustments shall first be
                           made under this Plan.

                                                        11.

         Subsection (c) of Section 8.5, "Calculation of present value for
cash-out of benefits and for determining amount of benefits," shall be deleted
in its entirety and replaced with the following, effective as of January 1,
2001:

                           (c) For purposes of this Section 8.5, "Applicable
                           Interest Rate" shall be calculated by using the
                           annual rate of interest on 30-year Treasury
                           securities for the month of August 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. Notwithstanding the foregoing, for the
                           Plan Year beginning January 1, 2001, the Applicable
                           Interest Rate shall be calculated using the annual
                           rate of interest on 30-year Treasury securities for
                           the month of August, or for the month of November, in
                           the Plan Year which precedes such Plan Year,
                           whichever month produces the greater amount.

                                                        12.

         Effective on and after the date this amendment is adopted, Article XVII
of the Plan shall be amended in its entirety to read as set forth below:

                                                   Article XVII

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

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

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

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

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

                           (e) "Covered SEPCO Employee" shall mean an Employee
                           or former Employee who is or was represented by the
                           International Brotherhood of Electrical Workers
                           ("IBEW") Local 1208 or the Office and Professional
                           Employees International Union ("OPEIU") Local 455,
                           who has an Hour of Service under the SEPCO Plan or
                           SEPCO Schedule on or after January 1, 1997. An
                           Employee who is represented by IBEW Local 1208 and is
                           hired or re-hired on or after January 1, 1999 or who
                           is represented by OPEIU Local 455 and is hired or
                           re-hired on or after January 1, 2000 shall not be
                           considered a Covered SEPCO Employee. Rather, such
                           Employee shall be treated only as an Employee under
                           the Plan.

                  17.2     [RESERVED]

                  17.3      SEPCO Employees Eligibility in the New Pension
                            Program

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

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

                    (2) SEPCO Employees,  including Covered SEPCO Employees, who
               are hired or re-hired by SEPCO after January 1, 1997, or

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

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

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

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

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

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

                         (e) With respect to SEPCO  Employees  described in this
                    Section 17.3 who retire before their Normal Retirement Date,
                    the  monthly  amount  of  Retirement   Income   provided  in
                    paragraph  (b) above  shall be  reduced in  accordance  with
                    Section 5.5.

                         (f) With respect to Covered SEPCO  Employees  described
                    in this  Section  17.3 (or their  Provisional  Payees),  the
                    monthly amount of Retirement  Income  provided in paragraphs
                    (b) through (e) above shall  become  payable as of the later
                    of (i) the first of the month  following  the Covered  SEPCO
                    Employee's retirement, or (ii) January 1, 1998.

                         (g) Covered  SEPCO  Employees who retired or terminated
                    employment  prior to (i)  July 1,  1999  for  Covered  SEPCO
                    Employees  represented by IBEW and (ii) February 9, 2000 for
                    Covered  SEPCO  Employees  represented  by  OPEIU,  and  who
                    commenced  payment of an Allowance  under the SEPCO Schedule
                    shall  receive  a lump sum  payment  which is the  actuarial
                    equivalent of the difference, if any, between the Retirement
                    Income payable  pursuant to paragraphs (b) through (e) above
                    and the Allowance they have previously  received  determined
                    from their date of  retirement  to the earlier of their date
                    of death or the date  payment  under this  paragraph  (g) is
                    made.  Such  lump  sum  payments  shall  be  made as soon as
                    administratively   feasible   following  adoption  of  these
                    provisions.  The monthly payments pursuant to paragraphs (b)
                    through  (e), if greater than the Covered  SEPCO  Employee's
                    Allowance, shall be made thereafter.

                         (h) The  Provisional  Payees of Covered SEPCO Employees
                    described in Section 17.3 who died prior to (i) July 1, 1999
                    for Covered  SEPCO  Employees  represented  by IBEW and (ii)
                    February 9, 2000 for Covered SEPCO Employees  represented by
                    OPEIU,  after having commenced payment of an Allowance under
                    the SEPCO Schedule, shall receive a lump sum payment that is
                    the actuarial equivalent of the difference,  if any, between
                    the  survivor  benefits  under  the  Plan  and the  survivor
                    benefits  under  the  SEPCO  Schedule  that the  Provisional
                    Payees have previously  received determined from the date of
                    the Covered  SEPCO  Employee's  death through the earlier of
                    (i) the Provisional  Payee's date of death, or (ii) the date
                    payment is made under this paragraph (h) to the  Provisional
                    Payee.  Thereafter,  monthly  payments  shall be made to the
                    Provisional Payee in accordance with Section 17.5(h) of this
                    Article XVII.

                           (i) For purposes of subsections (g) and (h) of this
                           Section 17.3, actuarial equivalent shall mean the
                           value of such lump sum payment determined as of the
                           date of distribution of the lump sum applying the
                           Applicable Interest Rate as defined in Section 8.5(c)
                           of the Plan and using the prevailing commissioners'
                           standard table used to determined reserves for group
                           annuity contracts in effect on the date as of which
                           the present value is being determined.

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

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

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

                  (c) Covered SEPCO Employees who are described in this Section
                  17.4 (or their Provisional Payees) shall receive the monthly
                  benefit described in paragraph (a) for months beginning on the
                  later of (i) the first of the month following their
                  retirement, or (ii) January 1, 1998.

                  (d) A Covered SEPCO Employee who retires or terminates
                  employment prior to (i) July 1, 1999 for Covered SEPCO
                  Employees represented by IBEW and (ii) February 9, 2000 for
                  Covered SEPCO Employees represented by OPEIU, and who
                  commences payment of an Allowance under the SEPCO Schedule
                  before such date shall receive a lump sum payment which is the
                  actuarial equivalent of the difference, if any, between the
                  benefits payable pursuant to paragraph (a) above and the
                  Allowance they have previously received determined from their
                  date of retirement to the earlier of their date of death or
                  the date a lump sum payment is made pursuant to this paragraph
                  (d). Such lump sum payments shall be made as soon as
                  administratively feasible following adoption of these
                  provisions. The monthly payments pursuant to paragraph (a)
                  shall be made thereafter.

                  (e) The Provisional Payee of a Covered SEPCO Employee
                  described in this Section 17.4 who died prior to (i) July 1,
                  1999 for Covered SEPCO Employees represented by IBEW, and (ii)
                  February 9, 2000 for Covered SEPCO Employees represented by
                  OPEIU, after having commenced payment of an Allowance under
                  the SEPCO Schedule shall receive a lump sum payment that is
                  the actuarial equivalent of the difference, if any, between
                  the survivor benefits under the Plan and the survivor benefits
                  under the SEPCO Schedule that the Provisional Payee has
                  previously received determined from the date of the Covered
                  SEPCO Employee's death through the earlier of (i) the
                  Provisional Payee's date of death, or (ii) the date payment is
                  made to the Provisional Payee under this paragraph (e).
                  Thereafter, monthly payments shall be made in accordance with
                  Section 17.5(h) of this Article XVII.

                  (f) For purposes of subsections (d) and (e) of this Section
                  17.4, actuarial equivalent shall mean the value of such lump
                  sum payment determined as of the date of distribution of the
                  lump sum applying the Applicable Interest Rate as defined in
                  Section 8.5(c) of the Plan and using the prevailing
                  commissioners' standard table used to determined reserves for
                  group annuity contracts in effect on the date as of which the
                  present value is being determined.

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

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

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

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

          (d) (1) For SEPCO Employees (other than Covered SEPCO Employees):

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

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

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

                                            (D) When calculating a SEPCO
                                            Employee's Retirement Income prior
                                            to June 1, 2000, the maximum amount
                                            of Accredited Service and Credited
                                            Service that will be considered is
                                            forty-three (43) years.

                                    (2)     For Covered SEPCO Employees:

                                            (A) For periods of service on and
                                            after January 1, 2001, Accredited
                                            Service for Covered SEPCO Employees
                                            shall be determined in accordance
                                            with the Plan.

                                            (B) For periods of service on and
                                            after January 1, 2001, with respect
                                            to any Allowance a Covered SEPCO
                                            Employee may be entitled to under
                                            the SEPCO Schedule, such Allowance
                                            shall be determined using Accredited
                                            Service in place of Credited
                                            Service.

                                            (C) For periods of service prior to
                                            January 1, 2001, the Credited
                                            Service of a Covered SEPCO Employee
                                            shall be used to determine such
                                            Covered SEPCO Employee's Allowance
                                            and Retirement Income accrued prior
                                            to January 1, 2001. Such Credited
                                            Service shall count as Accredited
                                            Service to determine eligibility for
                                            retirement at age fifty pursuant to
                                            paragraph (g) below.

                                            (D) When calculating a Covered SEPCO
                                            Employee's Retirement Income under
                                            Section 17.4 prior to June 1, 2000,
                                            the maximum amount of Accredited
                                            Service and Credited Service that
                                            will be considered is forty-three
                                            (43) years.

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

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

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

                                    (2) A SEPCO Employee who retires under
                                    paragraph (1) above having at least ten (10)
                                    years of Accredited Service shall be
                                    entitled to the greater of his (A)
                                    Retirement Income determined under Section
                                    5.5 (excluding the third paragraph thereof)
                                    and this Article XVII or (B) Allowance
                                    determined under this Article XVII and in
                                    addition applying a reduction of one-third
                                    of one percent ([OBJECT OMITTED]%) for each
                                    calendar month by which the commencement
                                    date precedes the first day of the month
                                    following any such Employee's attainment of
                                    his fifty-fifth (55th) birthday. However,
                                    effective for SEPCO Employees who retire on
                                    or after June 1, 2000, the term three-tenths
                                    of one percent (0.3%) shall replace
                                    one-third of one percent ([OBJECT OMITTED]%)
                                    in the preceding sentence.

                                    (3) A SEPCO Employee who retires or
                                    terminates under paragraph (1) above after
                                    attaining age 55 having less than ten (10)
                                    years of Accredited Service shall be
                                    entitled to the greater of his (A)
                                    Retirement Income determined under Section
                                    8.2 (without regard to the ten (10) years of
                                    Accredited Service requirement) and this
                                    Article XVII or (B) Allowance determined
                                    under this Article XVII.

                           (h) On and after January 1, 1998, the Provisional
                           Payees of SEPCO Employees who are not Covered SEPCO
                           Employees shall only be entitled to benefits as
                           provided in Article VII of the Plan. On or after
                           January 1, 1998 but on or before December 31, 2000,
                           Provisional Payees of Covered SEPCO Employees shall
                           be entitled to benefits equal to the greater of (i)
                           the benefits provided for in Article VII of the Plan,
                           or (ii) the benefits provided for in Article 7 of the
                           SEPCO Schedule. Provisional Payees of Covered SEPCO
                           Employees who retire, terminate employment or die on
                           or after January 1, 2001 shall only be entitled to
                           benefits as provided in Article VII of the Plan.

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

                                    Notwithstanding the above, a Covered SEPCO
                           Employee who incurs a disability on or after January
                           1, 1998 but on or before December 31, 2000 shall
                           accrue Retirement Income or an Allowance equal to the
                           greater of : (i) his Retirement Income determined
                           under Section 4.4 of the Plan, or (ii) his Allowance
                           determined under the SEPCO Schedule. Covered SEPCO
                           Employees who become disabled on or after January 1,
                           2001 shall only be entitled to benefits as provided
                           in Section 4.4 of the Plan.

                           (j)      (1) The options for payment described in
                                    Sections 7.1(c) and (d) and Sections 7.6(c)
                                    and (d) may be elected by SEPCO Employees
                                    who are not Covered SEPCO Employees and who
                                    retire or terminate on or after January 1,
                                    1998 and by Covered SEPCO Employees who
                                    retire or terminate on or after (i) July 1,
                                    1999 for Covered SEPCO Employees represented
                                    by IBEW, and (ii) February 9, 2000 for
                                    Covered SEPCO Employees represented by
                                    OPEIU.

                                    (2) Notwithstanding Section 17.3, SEPCO
                                    Employees who terminate or retire in 1997
                                    and Covered SEPCO Employees who terminate or
                                    retire prior to January 1, 2001 and commence
                                    receipt of an Allowance shall not be
                                    eligible to change the form of benefit
                                    elected under the SEPCO Plan even if such
                                    SEPCO Employees are entitled to receive
                                    Retirement Income under this Article XVII.

                                    (3) Notwithstanding Section 7.07(a)(Option
                                    ii) of the SEPCO Schedule, SEPCO Employees
                                    who are not Covered SEPCO Employees shall
                                    not be eligible to elect a 75% joint and
                                    survivor annuity. Covered SEPCO Employees,
                                    however, shall be allowed to elect a 75%
                                    joint and survivor annuity pursuant to
                                    Section 7.07(a)(Option ii) before January 1,
                                    2001.

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

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

         17.6     Transfers of SEPCO Employees.
                  ----------------------------

                  (a) With respect to a transfer of employment from an Employing
                  Company other than SEPCO to SEPCO, (1) occurring prior to
                  January 1, 1998, the person will be treated as a SEPCO
                  Employee under this Article XVII or (2) occurring on or after
                  January 1, 1998, the person will be treated as an Employee
                  under the terms of the Plan. Notwithstanding the foregoing, a
                  person transferring to SEPCO as a Covered SEPCO Employee on or
                  after January 1, 1998 will be treated as a SEPCO Employee.
                  Only persons transferring to SEPCO as a Covered SEPCO Employee
                  on or after January 1, 2001 will be treated as an Employee.

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

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

                                       13.

         Section 1.14 of the SEPCO Schedule, the definition of "Employee," shall
be deleted in its entirety and replaced with the following new definition:

                  1.14 "Employee" shall mean any person regularly employed by
                  the Company who receives regular stated salary, or wages paid
                  directly by the Company as (a) a regular full-time employee,
                  (b) a regular part-time employee, (c) a cooperative education
                  employee or (d) a temporary employee paid directly or
                  indirectly by the Company. Notwithstanding the preceding
                  sentence, on and after January 1, 1998 but before January 1,
                  2001, "Employee" shall be limited to Covered SEPCO Employees
                  as defined in Article XVII of the Plan. Thereafter, no person
                  employed by the Company shall be an "Employee" under this
                  SEPCO Schedule. For purposes of this Section 1.14, temporary
                  employee means a full-time or part-time employee who provides
                  services to the Company for a stated period of time after
                  which period such employee will be terminated from employment.
                  The term Employee shall also include Leased Employees within
                  the meaning of Code ss. 414(n) (2). Notwithstanding the
                  foregoing, if such Leased Employees constitute less than
                  twenty percent (20%) of the Employer's non-highly compensated
                  workforce within the meaning of Code ss. 414(n)(5)(C)(ii), the
                  term Employee shall not include those Leased Employees covered
                  under the SEPCO Schedule described in Code ss. 414(n)(5). The
                  term Employee for participation purposes shall not include any
                  individual who is classified by the Company as an independent
                  contractor or temporary employee (unless with respect to a
                  temporary employee who is grandfathered under this SEPCO
                  Schedule) regardless of whether such classification is in
                  error.

                                       14.

          Southern  Energy,  Inc.  shall be removed as an  Employing  Company in
     Appendix A of the Plan,  effective as of the "Group Status Change Date," as
     defined in the Agreement.

                                       15.

         Except as amended herein by this Sixth Amendment, the Plan shall remain
in full force and effect as amended and restated by the Company prior to the
adoption of this Sixth Amendment.

<PAGE>

         IN WITNESS WHEREOF, Southern Company Services, Inc. through its duly
authorized officer, has adopted this Sixth Amendment to The Southern Company
Pension Plan this ____ day of _________________, 2000, to be effective as stated
herein.

                             SOUTHERN COMPANY SERVICES, INC.

                             By: ______________________________

                             Title:____________________________

ATTEST:

By:  _________________________________________________________

Title:________________________________________________________

<PAGE>
                              SEVENTH AMENDMENT TO

                              THE SOUTHERN COMPANY

                                  PENSION PLAN

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

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

         WHEREAS, the Company desires to amend the Plan to enhance the benefits
of employees who are not covered by the terms of a collective bargaining
agreement and employees who are covered by the terms of a collective bargaining
agreement with OPEIU Local 455, IBEW Local 1208 or SPFPA Local 576; and

         WHEREAS, the Company desires to amend the Plan to enhance the benefits
payable to retirees.

         NOW, THEREFORE, the Company hereby amends the Plan as follows,
effective as of June 1, 2000, unless otherwise indicated below:

                                       1.

         The first paragraph of Section 1.36, "Social Security Offset," shall be
amended to read as follows:

         1.36     "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; for Employees who (i) are not
                  covered by the terms of a collective bargaining agreement or
                  (ii) are covered by the terms of a collective bargaining
                  agreement but where the bargaining unit representative and an
                  Employing Company have mutually agreed to participation in the
                  Plan as amended, $325 per month on and after January 1, 1996;
                  for Employees who are covered by the terms of a collective
                  bargaining agreement with IBEW Local 1208, $350 per month on
                  and after January 1, 1998; and for Employees who perform an
                  Hour of Service on or after May 1, 2000 and who (i) are not
                  covered by the terms of a collective bargaining agreement or
                  (ii) are covered by the terms of a collective bargaining
                  agreement with OPEIU Local 455 or SPFPA Local 576, $350 per
                  month on and after May 1, 2000, 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 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:

                                                    2.

         Section 2.4, "Employees reemployed," shall be deleted in its entirety
and replaced with the following new Section 2.4, effective as of April 2, 2001:

         2.4      Employees reemployed.
                  --------------------

                  (a) With respect to an Employee not described in subsection
                  (b), any Employee whose service terminates at any time and who
                  is reemployed as an Employee, unless excluded under Section
                  2.6, will be included in the Plan as provided in Section 2.1
                  unless:

                           (1) prior to termination of his service he had
                  completed at least one Year of Service; and

                           (2) upon his reemployment, to the extent provided in
                  Section 8.3 without regard to Section 8.4, he is entitled to
                  restoration of his Years of Service, in which case he will be
                  included in the Plan as of the date of his reemployment.

                           For purposes of determining Years of Service of an
                  Employee who is reemployed by an Affiliated Employer
                  subsequent to a One-Year Break in Service, a Year of Service
                  subsequent to his reemployment shall be computed on the basis
                  of the twelve (12) consecutive month period commencing on his
                  date of reemployment or an anniversary thereof.

                  (b) With respect to an Employee whose benefits transferred to
                  the Mirant Services Pension Plan following Mirant Services
                  (f/k/a Southern Energy Resources, Inc.) ceasing to be an
                  Affiliated Employer on April 2, 2001 and who is later
                  reemployed by an Employing Company, such Employee's Accredited
                  Service shall not be restored following his reemployment,
                  notwithstanding the provisions of Sections 8.3, 8.4 or any
                  other provision of the Plan. However, such Employee's
                  Eligibility Years of Service and Vesting Years of Service
                  shall be restored to the extent provided in Section 8.3,
                  without regard to Section 8.4 and subsection (a) above.

                                                    3.

         Subsection (e) of Section 4.2, "Accredited Service," shall be amended
by adding the following sentence to the end:

                  Notwithstanding the above, on and after May 1, 2000, for
                  Employees who perform an Hour of Service on or after May 1,
                  2000 and who (i) are not covered by the terms of a collective
                  bargaining agreement, or (ii) are covered by the terms of a
                  collective bargaining agreement with OPEIU Local 455, IBEW
                  Local 1208 or SPFPA Local 576, the above limit on years of
                  Accredited Service shall no longer apply.

                  With respect to the Employees described above, any references
                  in the Plan or any Schedule to the limitation under Section
                  4.2(e) shall be disregarded.

                                                    4.

         Section 5.2, "Minimum Retirement Income payable upon retirement at
Normal Retirement Date or Deferred Retirement Date," shall be amended by adding
two new paragraphs immediately following the first paragraph. The current second
paragraph shall become the fourth paragraph. The new paragraphs shall read as
follows:

                           The monthly Minimum Retirement Income to an Employee
                  who performs an Hour of Service on or after May 1, 2000, who
                  is not covered by the terms of a collective bargaining
                  agreement or is covered by the terms of a collective
                  bargaining agreement with OPEIU Local 455, IBEW Local 1208 or
                  SPFPA Local 576, and who retires from the service of an
                  Employing Company at his Normal Retirement Date or his
                  Deferred Retirement Date (before adjustment for Provisional
                  Payee designation, if any) shall receive the greater benefit
                  of (i) the monthly Minimum Retirement Income calculated in the
                  preceding paragraph, or (ii) monthly Minimum Retirement Income
                  in an amount equal to 1.25% of his Average Monthly Earnings
                  multiplied by his years (and fraction of a year) of Accredited
                  Service to his Normal Retirement Date or Deferred Retirement
                  Date, without a Social Security Offset.

                           For purposes of item (ii) above, Average Monthly
                  Earnings shall be calculated using the Employee's Earnings, as
                  defined in Section 1.13, increased by any cash payments made
                  during any given Plan Year from an annual group incentive
                  plan. "Annual group incentive plan" shall mean each plan
                  designated as such and approved and ratified for each Plan
                  Year by the manager of the Southern Company Compensation
                  Administration department pursuant to procedures established
                  by the Retirement Board. The Executive Productivity
                  Improvement Plan shall be considered an "annual group
                  incentive plan" only with regard to amounts earned in 1999 or
                  a prior Plan Year and/or with regard to amounts which became
                  payable in 2000 or a prior Plan Year.

                                                    5.

         Section 5.3, "Minimum Retirement Income upon retirement at Early
Retirement Date or upon termination of service by reason of death or otherwise
prior to retirement," shall be deleted in its entirety and replaced with the
following new Section 5.3:

                           5.3 Minimum Retirement Income upon retirement at
                  Early Retirement Date or upon termination of service by reason
                  of death or otherwise prior to retirement. The monthly Minimum
                  Retirement Income payable to an Employee (or his Provisional
                  Payee), if he shall retire on his Early Retirement Date, or if
                  his service shall terminate by reason of death or otherwise
                  prior to retirement, shall be determined in accordance with
                  the following provisions:

(a)                   Upon retirement at Early Retirement Date, his Minimum
                      Retirement Income (before adjustment for Provisional Payee
                      designation, if any) shall be an amount determined in the
                      manner described in Section 5.2 as of the Employee's Early
                      Retirement Date.

(b)                   Upon termination of service by reason of the death of the
                      Employee prior to retirement and after the effective date
                      of his Provisional Payee designation or deemed
                      designation, the Minimum Retirement Income for the purpose
                      of determining the Employee's Accrued Retirement Income
                      upon which payment to his Provisional Payee in accordance
                      with Section 7.4 shall be based shall be an amount
                      determined in the manner described in Section 5.2 as of
                      the date of the Employee's death.

(c)                   For an Employee who terminates his service with an
                      Employing Company with entitlement to receive Retirement
                      Income in accordance with Section 8.1, upon retirement at
                      his Early Retirement Date or Normal Retirement Date, his
                      Minimum Retirement Income (before adjustment for
                      Provisional Payee designation, if any) shall be an amount
                      determined in the manner described in Section 5.2 as of
                      the date of the Employee's termination of service.

(d)                   Upon termination of service by reason of disability (as
                      defined in Section 4.4) of the Employee prior to
                      retirement, provided such Employee does not return to the
                      service of an Employing Company prior to his Retirement
                      Date, his Minimum Retirement Income shall be an amount
                      determined in the manner described in Section 5.2 as of
                      the Employee's Retirement Date.

                                                    6.

         The second paragraph of Section 5.5, "Early Retirement Income," shall
be amended by adding the following new sentence to the end:

                  Notwithstanding the preceding sentence, Retirement Income for
                  Employees other than Employees described in Section 15.1(c)
                  who perform an Hour of Service on or after May 1, 2000 and who
                  (i) are not covered by the terms of a collective bargaining
                  agreement or (ii) are covered by the terms of a collective
                  bargaining agreement with OPEIU Local 455, IBEW Local 1208 or
                  SPFPA Local 576, the term three-tenths of one percent (0.3%)
                  shall replace the term one-third of one percent ([OBJECT
                  OMITTED]%) in the preceding sentence.

                                                    7.

         Subsection (d) of Section 5.9, "Required distributions," shall be
deleted in its entirety and replaced with the following new subsection (d),
effective as of January 1, 2001:

                  (d)      Determining required minimum distributions

                  With respect to distributions under the Plan made in calendar
                  years beginning on or after January 1, 2001, the Plan will
                  apply the minimum distribution requirements of section
                  401(a)(9) of the Internal Revenue Code in accordance with the
                  regulations under section 401(a)(9) that were proposed in
                  January 2001, notwithstanding any provision of the Plan to the
                  contrary. This amendment shall continue in effect until the
                  end of the last calendar year beginning before the effective
                  date of final regulations under section 401(a)(9) or such
                  other date specified in guidance published by the Internal
                  Revenue Service.

                                       8.

         Effective January 1, 2001, Section 5.11, "Increase in Retirement Income
of retired Employees," shall be deleted in its entirety and replaced with the
following new Section 5.11:

         5.11     Increase in Retirement Income of retired Employees

         (a)      1996 Increase.

                  (1) Retirement Income payable on and after January 1, 1996 to
                  an Employee (or to the Provisional Payee of an Employee) who
                  retired under the Prior Plans at his Early Retirement Date,
                  Normal Retirement Date, or Deferred Retirement Date on or
                  before January 1, 1996 will be adjusted 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%

                  (2) 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.

                  (3) A similar adjustment will be made in respect of Retirement
                  Income which is payable on or after January 1, 1996 for a
                  former Employee who is not eligible to retire but who is
                  vested in a benefit (or the Provisional Payee of such former
                  Employee) for which payments have commenced on or before
                  January 1, 1996 in accordance with the terms of the Prior
                  Plans, except for Employees whose Retirement Income has been
                  cashed-out pursuant to the terms of the Prior Plans.

                  (4) For purposes of determining the applicable percentage
                  increase under this Section 5.11(a), 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.

                  (5) This Section 5.11(a) 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.

         (b)      2001 Increase.

                  (1) Retirement Income payable on and after January 1, 2001 to
                  an Employee (or to the Provisional Payee of an Employee) who
                  retired under the Plan or the Prior Plans at his Early
                  Retirement Date, Normal Retirement Date, or Deferred
                  Retirement Date on or before January 1, 2001 will be adjusted
                  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:

                  Pension Benefit Commencement Dates

                                                                     Increase
                           From                Through              Percentage

                  February 1, 2000             January 1, 2001           1.5%
                  February 1, 1999             January 1, 2000           3.0%
                  February 1, 1998             January 1, 1999           4.5%
                  February 1, 1997             January 1, 1998           6.0%
                  Before February 1, 1997                                7.5%

                  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.

                  (2)      (A) The adjustment provided in Section 5.11(b)(1)
                           will be made in respect of Retirement Income which is
                           payable on or after January 1, 2001 to a Provisional
                           Payee, pursuant to Section 7.1 of the Plan, based on
                           the Employee's pension benefit commencement date
                           under the Plan or the Prior Plans.

                           (B) The adjustment provided in Section 5.11(b)(1)
                           will be made in respect of Retirement Income which is
                           payable on or after January 1, 2001 to a Provisional
                           Payee, pursuant to Section 7.4 of the Plan, due to
                           the death of an Employee while in the service of an
                           Employing Company based on the Provisional Payee's
                           pension benefit commencement date under the Plan or
                           the Prior Plans.

                  (3) A similar adjustment will be made in respect of Retirement
                  Income which is payable on or after January 1, 2001 for a
                  former Employee who is not eligible to retire but who is
                  vested in a benefit (or the Provisional Payee of such former
                  Employee) for which payments have commenced on or before
                  January 1, 2001 in accordance with the terms of the Plan or
                  Prior Plans, except for Employees whose Retirement Income has
                  been cashed-out pursuant to the terms of the Plan or Prior
                  Plans.

                  (4) Retirement Income payable to an Employee pursuant to the
                  last paragraph of Section 5.5 (i.e., the Social Security level
                  payment option) shall be adjusted for the increase provided in
                  Section 5.11(b)(1) by applying the percentage increase
                  separately to the portion of the Employee's Retirement Income
                  payable before age 65, if still being paid, and his Retirement
                  Income received or to be received after he attains age 65.

                  (5) The increased benefits provided for in Section 5.11(b)(1)
                  shall not apply to the portion of an Employee's Retirement
                  Income payable as a Social Security bridge payment to an
                  Employee who retired subject to the terms of an early
                  retirement window and who is receiving Social Security
                  "bridge" payments pursuant to such early retirement window.

                  (6) This Section 5.11(b) 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.

                  (7) The adjustment provided in Section 5.11(b)(1) will be made
                  in respect of an Allowance which is payable on or after
                  January 1, 2001 to a SEPCO Employee or a former SEPCO
                  Employee, as defined in the SEPCO Schedule to the Plan, based
                  on the Employee's pension benefit commencement date under the
                  Plan, the Prior Plans or the Employees' Retirement Plan of
                  Savannah Electric and Power Company ("SEPCO Plan"). An
                  Allowance payable to a SEPCO Employee or former SEPCO Employee
                  pursuant to Section 5.04 of the SEPCO Schedule (i.e., the
                  Social Security level payment option) shall be adjusted for
                  the increase provided in Section 5.11(b)(1) by applying the
                  percentage increase separately to the portion of the SEPCO
                  Employee's Allowance payable before age 62 or 65 (whichever is
                  applicable), if still being paid, and his allowance received
                  or to be received after he attains age 62 or 65, whichever is
                  applicable. A SEPCO Employee (or his Provisional Payee) whose
                  Allowance consists entirely of an amount payable pursuant to
                  Retirement Annuities described in Article 2 of the SEPCO
                  Schedule or SEPCO Plan, whichever is applicable, shall not
                  receive the adjustment provided in Section 5.11(b)(1). A SEPCO
                  Employee (or his Provisional Payee) whose Allowance consists
                  partially of an amount payable pursuant to Retirement
                  Annuities described in Article 2 of the SEPCO Schedule or
                  SEPCO Plan, whichever is applicable, and partially of amounts
                  accrued pursuant to Article 5 of the SEPCO Schedule or SEPCO
                  Plan, whichever is applicable, shall have his Allowance
                  adjusted in accordance with Section 5.11(b)(1) based on his
                  total Allowance under both such Articles with such adjustment
                  being paid entirely from the Trust.

                  (8) With respect to any Employee of an Employing Company who
                  is described in Article XVI of the Plan, the adjustment
                  provided in Section 5.11(b)(1) shall apply to such Employee's
                  accrued benefit determined after applying any offset provided
                  for in Article XVI (i.e., the adjustment in Section 5.11(b)(1)
                  shall apply to such Employee's net accrued benefit, not his
                  total service benefit).

                                       9.

         Subsection (c) of Section 6.1, "Maximum Retirement Income," shall be
amended by adding the following new paragraph immediately following subsection
(4):

                  For Limitation Years beginning on and after January 1, 2001,
         for purposes of applying the limitations described in Section 6.1 of
         the Plan, compensation paid or made available during such Limitation
         Years shall include elective amounts that are not includable in the
         gross income of the Employee by reason of Code Section 132(f)(4).

                                       10.

         Subsection (e) of Section 15.1, "Eligibility," shall be deleted in its
entirety, effective as of April 2, 2001.

<PAGE>

         IN WITNESS WHEREOF, Southern Company Services, Inc. through its duly
authorized officer, has adopted this Seventh Amendment to The Southern Company
Pension Plan this ____ day of _________________, 2001, to be effective as stated
herein.

                                 SOUTHERN COMPANY SERVICES, INC.

                                 By: ________________________________________

                                 Title:______________________________________

ATTEST:

By:  _________________________________________________________

Title:________________________________________________________

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