Bargaining Unit Employee Savings Plan - Southern Energy Resources


                            SOUTHERN ENERGY RESOURCES
                      BARGAINING UNIT EMPLOYEE SAVINGS PLAN






                                      
                                TABLE OF CONTENTS




ARTICLE I - PURPOSE..........................................................1


ARTICLE II - DEFINITIONS.....................................................1
         2.1      "Account"..................................................1
         2.2      "Actual Deferral Percentage"...............................1
         2.3      "Actual Deferral Percentage Test"..........................1
         2.4      "Affiliated Employer"......................................1
         2.5      "Annual Addition"..........................................1
         2.6      "Average Actual Deferral Percentage".......................2
         2.7      "Beneficiary"..............................................2
         2.8      "Board of Directors".......................................2
         2.9      "Break-in-Service Date"....................................2
         2.10     "Code".....................................................2
         2.11     "Committee"................................................2
         2.12     "Common Stock".............................................2
         2.13     "Company"..................................................2
         2.14     "Compensation".............................................3
         2.15     "Direct Rollover"..........................................3
         2.16     "Distributee"..............................................3
         2.17     "Elective Employer Contribution"...........................3
         2.18     "Eligible Employee"........................................3
         2.19     "Eligible Participant".....................................3
         2.20     "Eligible Retirement Plan".................................4
         2.21     "Eligible Rollover Distribution"...........................4
         2.22     "Employee".................................................4
         2.23     "Employer Matching Contribution"...........................4
         2.24     "Employing Company"........................................4
         2.25     "Enrollment Date"..........................................4
         2.26     "ERISA"....................................................4
         2.27     "Excess Deferral Amount"...................................4
         2.28     "Excess Deferral Contributions"............................5
         2.29     "Forfeiture"...............................................5
         2.30     "Highly Compensated Employee"..............................5
         2.31     "Hour of Service"..........................................5
         2.32     "Investment Fund"..........................................5
         2.33     "Limitation Year"..........................................5
         2.34     "Non-Highly Compensated Employee"..........................6
         2.35     "Normal Retirement Date"...................................6
         2.36     "One-Year Break in Service"................................6
         2.37     "Participant"..............................................6
         2.38     "Plan".....................................................6
         2.39     "Plan Year"................................................6
         2.40     "Rollover Contribution"....................................6
         2.41     "Surviving Spouse".........................................6
         2.42     "Suspense Account".........................................6
         2.43     "Trust" or "Trust Fund"....................................6
         2.44     "Trust Agreement"..........................................7
         2.45     "Trustee"..................................................7
         2.46     "Valuation Date"...........................................7
         2.47     "Voluntary Participant Contribution".......................7
         2.48     "Year of Service"..........................................7


ARTICLE III - PARTICIPATION..................................................8
         3.1      Eligibility Requirements...................................8
         3.2      Participation upon Reemployment............................8
         3.3      Change in Eligibility......................................8
         3.4      Loss of Eligible Employee Status...........................8
         3.5      Rollovers from Other Plans.................................8
         3.6      Military Leave.............................................9


ARTICLE IV - ELECTIVE EMPLOYER CONTRIBUTIONS AND VOLUNTARY
                   PARTICIPANT CONTRIBUTIONS................................10
         4.1      Elective Employer Contributions...........................10
         4.2      Maximum Amount of Elective Employer Contributions.........10
         4.3      Distribution of Excess Deferral Amounts...................10
         4.4      Additional Rules Regarding Elective Employer
                  Contributions.............................................11
         4.5      Section 401(k) Nondiscrimination Tests....................12
         4.6      Voluntary Participant Contributions.......................15
         4.7      Manner and Time of Payment of Elective Employer
                  Contributions and Voluntary Participant Contributions.....15
         4.8      Change in Contribution Rate...............................15
         4.9      Change in Contribution Amount.............................15



ARTICLE V - EMPLOYER CONTRIBUTIONS..........................................16
         5.1      Amount of Employer Matching Contributions.................16
         5.2      Payment of Employer Matching Contributions................16
         5.3      Reversion of Employing Company Contributions..............16
         5.4      Correction of Prior Incorrect Allocations and
                  Distributions.............................................17


ARTICLE VI - LIMITATIONS ON CONTRIBUTIONS...................................18
         6.1      Section 415 Limitations...................................18
         6.2      Correction of Contributions in Excess of Section 415
                  Limits....................................................18


ARTICLE VII - SUSPENSION OF CONTRIBUTIONS...................................20
         7.1      Suspension of Contributions...............................20
         7.2      Resumption of Contributions...............................20


ARTICLE VIII - INVESTMENT OF CONTRIBUTIONS..................................21
         8.1      Investment Funds..........................................21
         8.2      Investment of Participant Contributions...................21
         8.3      Investment of Employer Matching Contributions.............21
         8.4      Investment of Earnings....................................21
         8.5      Transfer of Assets between Funds..........................21
         8.6      Change in Investment Direction............................22
         8.7      Section 404(c) Plan.......................................22
         8.8      Common Stock Investment Funds.............................22


ARTICLE IX - MAINTENANCE AND VALUATION OF PARTICIPANTS'
                  ACCOUNTS..................................................23
         9.1      Establishment of Accounts.................................23
         9.2      Valuation of Investment Funds.............................23
         9.3      Rights in Investment Funds................................23


ARTICLE X - VESTING.........................................................24
         10.1     Full Vesting..............................................24
         10.2     Employer Matching Contributions...........................24
         10.3     Forfeitures...............................................24
         10.4     Buy-Back Procedure........................................24
         10.5     Deemed Cash-out and Deemed Buy-back.......................25
         10.6     Vesting after One-Year Break in Service...................25
         10.7     Vesting at Normal Retirement Age..........................25
         10.8     Vesting Upon Death........................................26


ARTICLE XI - WITHDRAWALS AND LOANS..........................................26
         11.1     Withdrawals by Participants...............................26
         11.2     Notice of Withdrawal......................................27
         11.3     Form of Withdrawal........................................27
         11.4     Minimum Withdrawal........................................27
         11.5     Source of Withdrawal......................................27
         11.6     Requirement of Hardship...................................27
         11.7     Loans to Participants.....................................29


ARTICLE XII - DISTRIBUTION TO PARTICIPANTS..................................31
         12.1     Distribution upon Retirement..............................31
         12.2     Distribution upon Disability..............................32
         12.3     Distribution upon Death...................................32
         12.4     Designation of Beneficiary in the Event of Death..........32
         12.5     Distribution upon Termination of Employment...............33
         12.6     Commencement of Benefits..................................33
         12.7     Transfer between Employing Companies......................34
         12.8     Distributions to Alternate Payees.........................34
         12.9     Requirement for Direct Rollovers..........................35
         12.10    Consent and Notice Requirements...........................35
         12.11    Form of Payment...........................................35
         12.12    Partial Distribution upon Termination of Employment.......35


ARTICLE XIII - ADMINISTRATION OF THE PLAN...................................36
         13.1     Membership of Committee...................................36
         13.2     Acceptance and Resignation................................36
         13.3     Transaction of Business...................................36
         13.4     Responsibilities in General...............................36
         13.5     Committee as Named Fiduciary..............................36
         13.6     Rules for Plan Administration.............................36
         13.7     Employment of Agents......................................37
         13.8     Co-Fiduciaries............................................37
         13.9     General Records...........................................37
         13.10    Liability of the Committee................................37
         13.11    Reimbursement of Expenses and Compensation of Committee...37
         13.12    Expenses of Plan and Trust Fund...........................38
         13.13    Responsibility for Funding Policy.........................38
         13.14    Management of Assets......................................38
         13.15    Notice and Claims Procedures..............................38
         13.16    Bonding...................................................39
         13.17    Multiple Fiduciary Capacities.............................39
         13.18    Change in Administrative Procedures.......................39


ARTICLE XIV - TRUSTEE OF THE PLAN...........................................40
         14.1     Trustee...................................................40
         14.2     Purchase of Common Stock..................................40
         14.3     Voting of Common Stock....................................40
         14.3     Voting of Common Stock....................................41
         14.5     Uninvested Amounts........................................41
         14.6     Independent Accounting....................................41


ARTICLE XV - AMENDMENT AND TERMINATION OF THE PLAN..........................42
         15.1     Amendment of the Plan.....................................42
         15.2     Termination of the Plan...................................42
         15.3     Merger or Consolidation of the Plan.......................43


ARTICLE XVI - GENERAL PROVISIONS............................................44
         16.1     Plan Not an Employment Contract...........................44
         16.2     No Right of Assignment or Alienation......................44
         16.3     Payment to Minors and Others..............................44
         16.4     Source of Benefits........................................45
         16.5     Unclaimed Benefits........................................45
         16.6     Governing Law.............................................45


APPENDIX A  - EMPLOYING COMPANIES...........................................47


APPENDIX B  - ELIGIBLE EMPLOYEES............................................48



                                     

                            SOUTHERN ENERGY RESOURCES
                      BARGAINING UNIT EMPLOYEE SAVINGS PLAN

                           Effective December 19, 2000



                                    ARTICLE I
                                     PURPOSE
                                     -------

         The  purpose of the Plan is to  encourage  employee  thrift,  to create
added employee  interest in the affairs of Southern  Energy,  Inc., to provide a
means for  becoming a  shareholder  in  Southern  Energy,  Inc.,  to  supplement
retirement and death benefits, and to create a competitive  compensation program
for  employees   through  the   establishment  of  a  formal  plan  under  which
contributions by and on behalf of Participants are supplemented by contributions
of Employing  Companies.  The Company is the plan sponsor of the Plan. This Plan
is intended to be a stock bonus plan, and all contributions made by an Employing
Company to this Plan are expressly  conditioned  upon the  deductibility of such
contributions  under Code  Section 404. To the extent that  different  terms and
conditions are necessary to reflect the benefits to be provided to each Eligible
Employee,  such terms and conditions shall be set forth in one or more schedules
attached  hereto  and  incorporated  into  the  Plan  and  shall  supersede  any
inconsistent  provisions  otherwise  set forth herein.  Any such schedule  shall
reflect the collective  bargaining unit to which it applies,  the effective date
and the Plan  Section or  Sections to which it applies.  Any  amendment  to such
schedule  shall be  considered  an amendment to the Plan and shall be subject to
Section 15.1 hereof.





                                   ARTICLE II
                                   DEFINITIONS
                                   -----------

         All references to articles, sections, subsections, and paragraphs shall
be to  articles,  sections,  subsections,  and  paragraphs  of this Plan  unless
another  reference  is expressly  set forth in this Plan.  Any words used in the
masculine  shall be read and be construed  in the  feminine  where they would so
apply.  Words in the singular shall be read and construed in the plural, and all
words in the plural  shall be read and  construed  in the  singular in all cases
where they would so apply.

         For purposes of this Plan,  unless  otherwise  required by the context,
the following terms shall have the meanings set forth opposite such terms:

         2.1      "Account" shall mean the total amount credited to the account
of a Participant, as described in Section 9.1.

         2.2 "Actual Deferral  Percentage"  shall mean the ratio (expressed as a
percentage)  of  Elective  Employer  Contributions  on  behalf  of  an  Eligible
Participant for the Plan Year to the Eligible Participant's compensation for the
Plan Year.  For the  purpose of  determining  an Eligible  Participant's  Actual
Deferral  Percentage  for a Plan Year,  the  Committee  may elect to consider an
Eligible  Participant's  compensation  for (a) the entire  Plan Year or (b) that
portion of the Plan Year in which the Eligible  Participant was eligible to have
Elective Employer Contributions made on his behalf,  provided that such election
is applied uniformly to all Eligible  Participants for the Plan Year. The Actual
Deferral  Percentage  of an  Eligible  Participant  who does  not have  Elective
Employer Contributions made on his behalf shall be zero.

         2.3      "Actual Deferral Percentage Test" shall mean the test
described in Section 4.5(a).

         2.4 "Affiliated  Employer" shall mean an Employing  Company and (a) 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,  (b) 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,  (c) 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 (d) any other entity required to be aggregated with such
Employing  Company  pursuant to  regulations  under Section  414(o) of the Code.
Notwithstanding  the  foregoing,  for  purposes of applying the  limitations  of
Article VI, the term  Affiliated  Employer shall be adjusted as required by Code
Section 415(h).

         2.5  "Annual   Addition"   shall  mean  the  amount   allocated   to  a
Participant's   Account  and  accounts  under  all  defined  contribution  plans
maintained by the Affiliated Employers during a Limitation Year that constitutes

                  (a)      Affiliated Employer contributions,

                  (b)      Voluntary Participant Contributions,

                  (c)      forfeitures,  if any,  allocated  to a  Participant's
         Account  or  accounts  under  all defined contribution plans maintained
         by the Affiliated Employers, and

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

         2.6  "Average  Actual  Deferral  Percentage"  shall  mean  the  average
(expressed as a percentage) of the Actual  Deferral  Percentages of the Eligible
Participants in a group.

         2.7 "Beneficiary" shall mean any person(s) who, or estate(s), trust(s),
or  organization(s)  which,  in accordance  with the provisions of Section 12.4,
become entitled to receive benefits upon the death of a Participant.

         2.8      "Board of Directors" shall mean the Board of Directors of the
Company.

         2.9      "Break-in-Service Date" means the earlier of:

                  (a)      the date on which an Employee terminates  employment,
         is discharged,  retires, or dies; or

                  (b)      the last day of an approved leave of absence
         including any extension.

         In the case of an  individual  who is absent from work for maternity or
paternity  reasons,  such  individual  shall not incur a  Break-in-Service  Date
earlier than the expiration of the second  anniversary of the first date of such
absence; provided, however, that the  twelve-consecutive-month  period beginning
on the first  anniversary of the first date of such absence shall not constitute
a Year of Service.  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.

         2.10 "Code" shall mean the Internal  Revenue Code of 1986,  as amended,
or  any  successor  statute,   and  the  rulings  and  regulations   promulgated
thereunder.  In the event an  amendment  to the Code  renumbers a section of the
Code referred to in this Plan, any such reference  automatically  shall become a
reference to such section as renumbered.

         2.11     "Committee"  shall  mean  the  committee  appointed  pursuant
to  Section  13.1 to serve as plan administrator.

         2.12     "Common Stock" shall mean the common stock of Southern Energy,
Inc.

         2.13     "Company" shall mean Southern Energy Resources, Inc., and its
successors.

         2.14  "Compensation"   shall  mean  the  base  salary  or  wages  of  a
Participant, including all amounts contributed by an Employing Company to a Code
Section 125 cafeteria  plan  sponsored by an Employing  Company,  on behalf of a
Participant  pursuant to a salary  reduction  arrangement  under such plan, plus
monthly shift and monthly seven-day schedule differentials, geographic premiums,
monthly customer service premiums, and monthly nuclear plant premiums and before
deduction of taxes,  social  security,  etc., but excluding all awards under any
incentive  pay plans  sponsored by the  Employing  Company  includible  as gross
income,  overtime pay, any hourly shift  differentials,  substitution  pay, such
amounts which are reimbursements to a Participant paid by any Employing Company,
including but not limited to,  reimbursement  for such items as moving  expenses
and  travel and  entertainment  expenses,  and  imputed  income  for  automobile
expenses,  tax preparation  expenses and health and life insurance premiums paid
by the Employing Company.  Notwithstanding  the foregoing,  "Compensation" for a
group of Eligible  Employees may be modified as provided on the Appendix to this
Plan which is applicable to such Eligible Employees.

         The Compensation of each Participant taken into account for purposes of
this Plan  shall not exceed  $170,000  (as  adjusted  pursuant  to Code  Section
401(a)(17)).  If a  determination  period  consists  of fewer than  twelve  (12)
months,  the annual  Compensation  limit under Code Section  401(a)(17) shall be
multiplied by a fraction,  the numerator of which is the number of months in the
determination period and the denominator of which is twelve (12).

         2.15     "Direct  Rollover" shall mean a payment by the Plan to the
Eligible  Retirement Plan specified by the Distributee.

         2.16  "Distributee"  shall include an Employee or former  Employee.  In
addition,   the  Employee's  or  former  Employee's  surviving  spouse  and  the
Employee's  or former  Employee's  spouse or former  spouse who is an  alternate
payee under a qualified  domestic  relations order, as defined in Section 414(p)
of the Code,  are  Distributees  with  regard to the  interest  of the spouse or
former spouse.

         2.17 "Elective  Employer  Contribution"  shall mean  contributions made
pursuant to Section  4.1 during the Plan Year by an  Employing  Company,  at the
election of the  Participant,  in lieu of cash  compensation  and shall  include
contributions made pursuant to a salary reduction agreement.

         2.18 "Eligible  Employee"  shall mean an Employee who is employed by an
Employing  Company and who is represented  by one of the  collective  bargaining
units set forth on an  Appendix  to this  Plan,  as  updated  from time to time.
Notwithstanding  the foregoing,  no Employee shall be entitled to participate in
this Plan if such Employee is eligible to participate in a plan of an Affiliated
Employer  which is  intended  to be a cash or  deferred  arrangement  under Code
Section 401(k).

         2.19  "Eligible  Participant"  shall mean an Eligible  Employee  who is
authorized  to have Elective  Employer  Contributions  or Voluntary  Participant
Contributions allocated to his Account for the Plan Year.

         2.20  "Eligible  Retirement  Plan" shall mean an individual  retirement
account  described  in  Section  408(a) of the Code,  an  individual  retirement
annuity  described in Section  408(b) of the Code, an annuity plan  described in
Section 403(a) of the Code, or a qualified  trust described in Section 401(a) of
the Code that accepts the Distributee's Eligible Rollover Distribution. However,
in the case of an  Eligible  Rollover  Distribution  to a surviving  spouse,  an
Eligible  Retirement  Plan is an  individual  retirement  account or  individual
retirement annuity.

         2.21 "Eligible  Rollover  Distribution"  shall mean 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,  the
joint  lives  (or  joint  life   expectancies)   of  the   Distributee  and  the
Distributee's  Beneficiary,  or for a specified  period of 10 years or more; (b)
any  distribution  to the extent such  distribution  is required  under  Section
401(a)(9)  of the  Code;  (c)  the  portion  of  any  distribution  that  is not
includible in gross income (determined  without regard to the exclusion from net
unrealized  appreciation  with  respect  to  employer  securities);  and (d) any
hardship distribution described in Section 401(k)(2)(B)(i)(IV) of the Code.

         2.22  "Employee"  shall  mean each  individual  who is  employed  by an
Affiliated  Employer under common law and each  individual who is required to be
treated as an employee  pursuant to the "leased  employee" rules of Code Section
414(n) other than a leased employee described in Code Section 414(n)(5).

         2.23 "Employer Matching Contribution" shall mean a contribution made by
an Employing Company pursuant to Section 5.1.

         2.24  "Employing  Company"  shall mean the Company and any affiliate or
subsidiary of the Company or Southern Energy,  Inc. which the Board of Directors
may from time to time  determine  to bring  under the Plan and which shall adopt
the Plan,  and any successor of them.  The Employing  Companies are set forth on
Appendix A to the Plan as updated  from time to time.  No such  entity  shall be
treated as an Employing Company prior to the date it adopts the Plan.

         2.25     "Enrollment Date" shall mean the first day of each payroll
period.

         2.26 "ERISA" shall mean the Employee  Retirement Income Security Act of
1974, as amended,  or any  successor  statute,  and the rulings and  regulations
promulgated  thereunder.  In the event an amendment to ERISA renumbers a section
of ERISA referred to in this Plan, any such reference automatically shall become
a reference to such section as renumbered.

         2.27  "Excess  Deferral  Amount"  shall  mean the  amount  of  Elective
Employer  Contributions  for a calendar year that exceed the Code Section 402(g)
limits as allocated to this Plan pursuant to Section 4.3(b).

         2.28 "Excess Deferral  Contributions" shall mean the amount of Elective
Employer Contributions on behalf of a Highly Compensated Employee referred to in
Code Section 401(k)(8)(B).

         2.29  "Forfeiture"  shall mean that portion of a Participant's  Account
which is forfeitable as determined under the vesting schedule applicable to such
Participant,  if any.  Forfeitures shall be applied against and  proportionately
reduce future Employing Company contributions;  provided, however, that any such
Forfeitures shall not be so applied until the first administratively practicable
Valuation Date after which occurs the earlier of the following events:

                  (a)      the termination of employment of the Participant with
         zero percent (0%) vesting;

                  (b)      the distribution of the entire vested portion of the
         Participant's Account; or

                  (c)      the date on which  the  Participant  incurs  five (5)
         consecutive  One-Year  Breaks  in Service.

         Therefore,  a Forfeiture  will only occur in the event of an occurrence
described in the preceding  sentence,  and only then shall the nonvested portion
of  a  Participant's   Account  be  used  to  offset  future  Employing  Company
contributions.  Such  offset  shall take place as of the first  administratively
practicable Valuation Date after the Forfeiture occurs.

         2.30 "Highly  Compensated  Employee" shall mean (in accordance with and
subject  to  Code  Section  414(q)  and any  regulations,  rulings,  notices  or
procedures thereunder),  with respect to any Plan Year: (1) any Employee who was
a five percent (5%) owner of Southern Energy, Inc. or an Affiliated Employer (as
determined pursuant to Code Section 416) during the Plan Year or the immediately
preceding  Plan Year,  or (2) any  Employee  who earned more than $80,000 in the
preceding  Plan Year. The $80,000 amount shall be adjusted for inflation and for
short Plan Years,  pursuant to Code Section  414(q).  The  Employer  may, at its
election,  limit Employees earning more than $80,000 to only those Employees who
fall within the "top-paid  group," as defined in Code Section  414(q)  excluding
those  employees  described  in Code  Section  414(q)(8)  for such  purpose.  In
determining whether an Employee is a Highly Compensated Employee,  the Committee
may  make  any  elections  authorized  under  applicable  regulations,  rulings,
notices, or revenue procedures.

         2.31 "Hour of  Service"  shall mean each hour for which an  Employee is
paid, or entitled to payment,  for the  performance  of duties for an Affiliated
Employer.

         2.32  "Investment  Fund" shall mean any one of the funds  described  in
Article VIII which constitutes part of the Trust Fund.

         2.33     "Limitation Year" shall mean the Plan Year.

         2.34     "Non-Highly  Compensated  Employee"  shall  mean  an  Employee
who is not a  Highly  Compensated Employee.

         2.35  "Normal  Retirement  Date"  shall mean the first day of the month
following a Participant's sixty-fifth (65th) birthday.

         2.36     "One-Year     Break    in    Service"    shall    mean    each
twelve-consecutive-month  period within the period commencing with an Employee's
Break-in-Service Date and ending on the date the Employee is again credited with
an Hour of Service.

         2.37  "Participant"  shall  mean  (a)  an  Eligible  Employee  who  has
satisfied the requirements to participate in the Plan as provided in Article III
and  whose  participation  in the  Plan at the  time of  reference  has not been
terminated as provided in the Plan,  (b) an Employee or former  Employee who has
ceased  to be a  Participant  under  (a)  above,  but  for  whom an  Account  is
maintained under the Plan, and, (c) an Eligible Employee who has made a Rollover
Contribution to this Plan to the extent that the provisions of the Plan apply to
such Rollover Contribution of the Eligible Employee.

         2.38 "Plan" shall mean the Southern  Energy  Resources  Bargaining Unit
Employee Savings Plan, as described herein or as from time to time amended.

         2.39 "Plan Year" shall mean the twelve-month  period commencing January
1st and ending on the last day of December next following.

         2.40  "Rollover  Contribution"  shall mean that  portion of an eligible
rollover  distribution  (as defined in Code Section  402(c)(4)) that an Eligible
Employee elects to contribute to this Plan in accordance  with the  requirements
of Section 3.5.

         2.41  "Surviving  Spouse" shall mean the person to whom the Participant
is married on the date of his death,  if such  spouse is then  living,  provided
that the Participant and such spouse shall have been married  throughout the one
(1) year period ending on the date of the Participant's death.

         2.42 "Suspense Account" shall mean the total forfeitable portion of all
terminated or former Participants'  Accounts which have not yet become available
to offset future Employing Company contributions.  The Suspense Account shall be
maintained as a single  account  under the Plan or shall  represent the total of
separate  bookkeeping  accounts  established  in the name of each  terminated or
former Participant to represent his forfeitable percentage.  (This account shall
be separate from the Code Section 415 suspense account referenced in Section 6.2
hereof.)  The Suspense  Account  shall always share in earnings or losses of the
Trust Fund and at the appropriate  time shall be used to offset future Employing
Company  contributions.  Forfeitures  shall only remain in the Suspense  Account
until such time as they become  available  to reduce  future  Employing  Company
contributions in accordance with Section 10.3 hereof.

         2.43     "Trust" or "Trust Fund" shall mean the trust established
pursuant to the Trust Agreement.

         2.44  "Trust  Agreement"  shall mean the trust  agreement  between  the
Company and the Trustee, as described in Article XIV.

         2.45  "Trustee"  shall mean the  person or  corporation  designated  as
trustee under the Trust Agreement, including any successor or successors.

         2.46     "Valuation Date" shall mean each business day of the New York
Stock Exchange.

         2.47  "Voluntary  Participant  Contribution"  shall mean a contribution
made pursuant to Section 4.6 during the Plan Year.

         2.48 "Year of Service" shall mean a  twelve-month  period of employment
as an Employee, including any fractions thereof. Calculation of the twelve-month
periods shall commence with the Employee's first day of employment, which is the
date on which an Employee first performs an Hour of Service, and shall terminate
on his  Break-in-Service  Date.  Thereafter,  if he has more than one  period of
employment as an Employee,  his Years of Service for any subsequent period shall
commence  with  the  Employee's  reemployment  date,  which  is the  first  date
following  a  Break-in-Service  Date on which the  Employee  performs an Hour of
Service, and shall terminate on his next Break-in-Service  Date. An Employee who
has a Break-in-Service Date and resumes employment with the Affiliated Employers
within  twelve  months of his  Break-in-Service  Date shall receive a fractional
Year of Service for the period of such cessation of employment.

         In addition,  an Eligible  Employee's  Years of Service  shall  include
service with a prior employer to the extent provided on the Appendix to the Plan
applicable to such Eligible Employee.

         Notwithstanding  anything  in this  Section  2.48 to the  contrary,  an
Employee shall not receive credit for more than one Year of Service with respect
to any twelve-consecutive-month period.





                                   ARTICLE III
                                  PARTICIPATION
                                  -------------

         3.1  Eligibility  Requirements. Each  individual  who  is an  Eligible
Employee on December 19, 2000 shall become an active Participant on December 19,
2000. Each other Eligible Employee shall become an active  Participant as of the
first  Enrollment Date coincident with or first following the date he becomes an
Eligible Employee. An Eligible Employee shall make an election to participate by
authorizing deductions from or reduction of his Compensation as contributions to
the Plan in accordance  with Article IV, and  directing  the  investment of such
contributions  in accordance  with Article  VIII.  Such  Compensation  deduction
and/or  reduction  authorization  and  investment  direction  shall  be  made in
accordance with the procedures established from time to time by the Committee.

         3.2 Participation upon Reemployment. If an Eligible Employee terminates
his employment with an Affiliated Employer and is subsequently  reemployed as an
Eligible  Employee,  whether  before  or after he  incurs  a  One-Year  Break in
Service,  he shall be eligible to become an active Participant in the Plan as of
the date of his reemployment.

         3.3  Change in  Eligibility.  In the event  that an  Employee's  status
changes  such that he is no longer  eligible to  participate  under the Southern
Energy  Resources,  Inc.  Bargaining  Unit Savings  Plan,  the  Southern  Energy
Resources  Employee Savings Plan or the Southern Energy Resources,  Inc. Savings
Plan for Covered Employees,  but instead becomes an Eligible Employee under this
Plan, his pre-tax,  after-tax,  matching and/or rollover  contribution  accounts
under such plan shall be  transferred  to his  corresponding  Elective  Employer
Contribution, Voluntary Participant Contribution, Employer Matching Contribution
and/or  Rollover  Contribution  subaccounts  in his Account under this Plan. All
amounts  transferred to this Plan in accordance with this Section 3.3, including
the  outstanding  balance  of any  loans,  shall be  subject to all of the other
provisions of this Plan. Any  outstanding  loan  transferred  with such accounts
shall be  considered  a loan from this Plan  pursuant  to Section  11.7  hereof.
Finally,  no such  transfer  shall  eliminate  an  optional  form of  benefit in
violation of Code Section 411(d)(6).

         3.4 Loss of Eligible Employee Status. If a Participant loses his status
as an Eligible  Employee,  but remains an Employee,  such  Participant  shall be
ineligible to participate  and shall be deemed to have elected to suspend making
Voluntary Participant  Contributions or to have Elective Employer  Contributions
made on his behalf.

         3.5 Rollovers from Other Plans. An Eligible Employee who has received a
distribution  of his  interest in a tax  qualified  retirement  plan of a former
employer under  circumstances  meeting the requirements of Section  402(c)(4) of
the Code relating to eligible rollover  distributions from qualified  retirement
plans may elect to deposit all or any portion (as  designated  by such  Eligible
Employee) of the amount of such distribution as a Rollover  Contribution to this
Plan. A Rollover Contribution may be made only within 60 days following the date
the  Eligible  Employee  receives the  distribution  from the plan of his former
employer (or within such additional  period as may be provided under Section 408
of the Code if the  Eligible  Employee  shall have made a timely  deposit of the
distribution in an individual retirement account).

         The Committee  shall  establish  rules and procedures to implement this
Section 3.5, including without limitation, such procedures as may be appropriate
to permit the  Committee to verify the tax  qualified  status of the plan of the
former  employer  and  compliance  with any  applicable  provisions  of the Code
relating to such  contributions.  The amount contributed to the Trustee pursuant
to this  Section  3.5  shall  be  placed  in the  Eligible  Employee's  Rollover
Contribution  subaccount  for the benefit of the Eligible  Employee  pursuant to
Section  9.1. The Eligible  Employee  shall have a fully vested  interest in the
balance of his Rollover  Contribution  subaccount at all times and such Rollover
Contribution  subaccount  shall share in the earnings,  gains, and losses of the
Trust Fund as set forth in Article IX of the Plan. An Employee shall be entitled
to a  distribution  of his  Rollover  Contribution  subaccount  pursuant  to the
applicable provisions of Articles XI and XII hereof.

         3.6 Military  Leave.  Notwithstanding  any provision 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.
Loan  repayments  will be suspended  under the Plan as permitted  under  Section
414(u)(4) of the Code.






                                   ARTICLE IV
                       ELECTIVE EMPLOYER CONTRIBUTIONS AND
                       VOLUNTARY PARTICIPANT CONTRIBUTIONS
                       -----------------------------------


         4.1 Elective Employer Contributions. An Eligible Employee who meets the
participation  requirements  of  Article  III may elect in  accordance  with the
procedures  established  by the  Committee to have his  Compensation  reduced as
provided in the schedule  attached  hereto for his collective  bargaining  unit,
such Elective  Employer  Contribution to be contributed to his Account under the
Plan.

         4.2 Maximum  Amount of  Elective  Employer  Contributions.  The maximum
amount  of  Elective  Employer  Contributions  that may be made on  behalf  of a
Participant  during  any Plan  Year to this  Plan or any  other  qualified  plan
maintained by an Employing  Company shall not exceed the dollar  limitation  set
forth in  Section  402(g) of the Code in effect  at the  beginning  of such Plan
Year.

         4.3      Distribution of Excess Deferral Amounts.
                  
                  (a) In General.  Notwithstanding  any other  provision  of the
         Plan,  Excess Deferral  Amounts and income  allocable  thereto shall be
         distributed  (and any  corresponding  Employer  Matching  Contributions
         shall be  forfeited)  no later than April 15,  2001,  and each April 15
         thereafter,  to  Participants  who allocate (or are deemed to allocate)
         such  amounts  to this Plan  pursuant  to (b)  below for the  preceding
         calendar year.  Excess Deferral Amounts that are distributed  shall not
         be treated as an Annual Addition.  Any Employer Matching  Contributions
         forfeited pursuant to this subsection (a) shall be applied,  subject to
         Section 6.1, toward funding  Employing Company  contributions  (for the
         Plan Year  immediately  following the Plan Year to which such forfeited
         Employer Matching Contributions relate) or distributed,  as directed by
         the Committee, to the extent permitted by applicable law.

                  (b)  Assignment.  The  Participant's  allocation of amounts in
         excess of the Code  Section  402(g)  limits  to this  Plan  shall be in
         writing;  shall be  submitted  to the  Committee no later than March 1;
         shall  specify  the  Participant's   Excess  Deferral  Amount  for  the
         preceding  calendar year; and shall be accompanied by the Participant's
         written statement that if such amounts are not distributed, such Excess
         Deferral  Amount,  when added to amounts  deferred under other plans or
         arrangements described in Section 401(k), 408(k), 408(p), 402(h)(1)(B),
         457,  501(c)(18),  or 403(b) of the Code,  exceeds the limit imposed on
         the Participant by Section 402(g) of the Code for the year in which the
         deferral  occurred.  A Participant is deemed to notify the Committee of
         any Excess  Deferral  Amounts  that arise by taking into  account  only
         those  deferrals  under this Plan and any other plans of an  Affiliated
         Employer.

                  (c)  Determination  of Income  or Loss.  The  Excess  Deferral
         Amount  distributed  to a  Participant  with respect to a calendar year
         shall be adjusted  for income or loss  through the last day of the Plan
         Year or the date of distribution,  as determined by the Committee.  The
         income or loss allocable to Excess Deferral Amounts is the sum of:

                           (1)  income or loss  allocated  to the  Participant's
                  Account for the taxable  year  multiplied  by a fraction,  the
                  numerator  of  which  is such  Participant's  Excess  Deferral
                  Amount  for the  year  and the  denominator  of  which  is the
                  Participant's   Account   balance   attributable  to  Elective
                  Employer  Contributions,  minus  any  income  or plus any loss
                  occurring during the Plan Year; and

                           (2) if the  Committee  shall  determine  in its  sole
                  discretion,  ten percent (10%) of the amount  determined under
                  (1) above  multiplied by the number of whole  calendar  months
                  between  the  end  of  the  Plan  Year  and  the  date  of the
                  distribution,   counting   the   month  of   distribution   if
                  distribution occurs after the 15th of the month.

                           Notwithstanding   the  above,   the   Committee   may
                  designate  any  reasonable  method for computing the income or
                  loss allocable to Excess Deferral  Amounts,  provided that the
                  method does not violate Section 401(a)(4) of the Code, is used
                  consistently  for all  Participants  and  for  all  corrective
                  distributions under the Plan for the Plan Year, and is used by
                  the  Plan  for  allocating  income  or loss  to  Participants'
                  Accounts.

                           (3) Maximum  Distribution Amount. The Excess Deferral
                  Amount,   which  would   otherwise  be   distributed   to  the
                  Participant,  shall,  if  there  is a loss  allocable  to such
                  Excess Deferral Amount, in no event be less than the lesser of
                  the  Participant's  Account  under  the Plan  attributable  to
                  Elective Employer  Contributions or the Participant's Elective
                  Employer Contributions for the Plan Year.

         4.4      Additional Rules Regarding Elective Employer Contributions.
                  
         Salary reduction agreements shall be governed by the following:

                  (a) A  salary  reduction  agreement  shall  apply  to  payroll
         periods during which such salary reduction  agreement is in effect. The
         Committee, in its discretion,  may establish administrative  procedures
         whereby the actual  reduction in  Compensation  may be made to coincide
         with each payroll  period of the  Employing  Company,  or at such other
         times as the Committee may determine.

                  (b) The  Committee  may amend or revoke its  salary  reduction
         agreement with any Participant at any time, if the Committee determines
         that such  revocation  or  amendment  is  necessary  to  ensure  that a
         Participant's   additions  for  any  Plan  Year  will  not  exceed  the
         limitations  of Sections  4.2 and 6.1 of the Plan or to ensure that the
         Actual Deferral Percentage Test is satisfied.

                  (c)  Except as  required  under (b) above,  and under  Section
         4.5(c)   below,   no  amounts   attributable   to   Elective   Employer
         Contributions  may be distributed  to a Participant or his  Beneficiary
         from his Account prior to the earlier of:

                           (1)      the separation from service, death or
                  disability of the Participant;

                           (2)      the attainment of age 59 1/2by the
                  Participant;

                           (3)      the termination of the Plan without
                  establishment of a successor plan;

                           (4)      a financial hardship of the Participant
                  pursuant to Section 11.6 of the Plan;

                           (5) the date of a sale by an Employing  Company to an
                  entity that is not an Affiliated Employer of substantially all
                  of the assets  (within the meaning of Code Section  409(d)(2))
                  with respect to a Participant  who continues  employment  with
                  the corporation acquiring such assets; or

                           (6) the date of the sale by an  Employing  Company or
                  an Affiliated Employer of its interest in a subsidiary (within
                  the meaning of Code Section  409(d)(3))  to an entity which is
                  not an Affiliated Employer with respect to the Participant who
                  continues employment with such subsidiary.

         4.5      Section 401(k) Nondiscrimination Tests.
                  
                  (a) Actual  Deferral  Percentage  Test. The Plan shall satisfy
         the  nondiscrimination  test of Section  401(k)(3)  of the Code,  under
         which no Elective Employer Contributions shall be made that would cause
         the Actual Deferral Percentage for Eligible Participants who are Highly
         Compensated Employees to exceed (1) or (2) as follows:

                           (1) The Average  Actual  Deferral  Percentage for the
                  Eligible  Participants who are Highly Compensated Employees in
                  the  current  Plan Year shall not exceed  the  Average  Actual
                  Deferral  Percentage  for the  prior  Plan  Year for  Eligible
                  Participants who were Non-Highly Compensated Employees for the
                  prior Plan Year multiplied by 1.25; or

                           (2)  The  Average  Actual  Deferral   Percentage  for
                  Eligible  Participants who are Highly Compensated Employees in
                  the  current  Plan Year shall not exceed  the  Average  Actual
                  Deferral   Percentage  for  Eligible   Participants  who  were
                  Non-Highly  Compensated  Employees  in  the  prior  Plan  Year
                  multiplied  by two  (2),  provided  that  the  Average  Actual
                  Deferral  Percentage for Eligible  Participants who are Highly
                  Compensated Employees in the current Plan Year does not exceed
                  the Average Actual Deferral Percentage for the prior Plan Year
                  for  Eligible  Participants  who were  Non-Highly  Compensated
                  Employees  in the  prior  Plan  Year  by  more  than  two  (2)
                  percentage points.

                           At the  election of the  Committee,  the current year
                  Average Actual Deferral Percentage for current year Non-Highly
                  Compensated  Employees may be  substituted  for the prior year
                  Average Actual Deferral Percentage.  However, once an election
                  is made to utilize such current year Average  Actual  Deferral
                  Percentage in determining the Actual Deferral Percentage,  the
                  Committee may not revoke such election without the approval of
                  the Internal  Revenue  Service,  to the extent  required under
                  Code Section 401(k)(3)(A).  Notwithstanding the foregoing, for
                  the 2000 Plan Year the Average Actual  Deferral  Percentage of
                  Non-Highly  Compensated  Employees shall be deemed to be three
                  percent (3%) or, if the Committee  elects in  accordance  with
                  Code Section 401(k)(3)(E),  the actual Average Actual Deferral
                  Percentage  of Non-Highly  Compensated  Employees for the 2000
                  Plan Year.

                  (b)      Distribution of Excess Deferral Contributions.
                           
                           (1) In General. The Excess Deferral Contributions for
                  a Highly Compensated  Employee for a Plan Year which are to be
                  distributed   shall  be  distributed   such  that  the  Highly
                  Compensated  Employee  with the  highest  amount  of  Elective
                  Employer  Contributions  for the Plan Year shall be reduced to
                  the extent required to:

                                    (A)     distribute the total amount of
                           Excess Deferral Contributions, 

                           or

                                    (B)   cause  the   amount  of  such   Highly
                           Compensated      Employee's     Elective     Employer
                           Contributions   to  equal  the  amount  of   Elective
                           Employer  Contributions  of  the  Highly  Compensated
                           Employee  with the next  highest  amount of  Elective
                           Employer Contributions for the Plan Year.

                  This  process  must be  repeated  until  all  Excess  Deferral
                  Contributions are distributed.

                           Excess  Deferral  Contributions  plus any  income and
                  minus any loss allocable thereto shall be distributed (and any
                  corresponding   Employer   Matching   Contribution   shall  be
                  forfeited)  to   Participants  on  whose  behalf  such  Excess
                  Deferral  Contributions  were made within two and  one-half (2
                  1/2) months  after the last day of the Plan Year in which such
                  excess amounts arose, and in any event not later than the last
                  day of the Plan Year  following the close of the Plan Year for
                  which such  contributions  were made.  Distribution  of Excess
                  Deferral  Contributions  shall be made to  Highly  Compensated
                  Employees in accordance with this Section 4.5(b). Any Employer
                  Matching  Contributions  forfeited pursuant to this Subsection
                  (b)(1)  shall be  applied,  subject  to  Section  6.1,  toward
                  funding  Employing  Company  contributions  (for the Plan Year
                  immediately  following  the Plan Year to which such  forfeited
                  Employer  Matching  Contributions  relate) or distributed,  as
                  directed  by  the  Committee,   to  the  extent  permitted  by
                  applicable law.

                           (2)  Determination of Income or Loss. Excess Deferral
                  Contributions  to be  distributed  shall be  adjusted  for any
                  income  or loss  through  the last day of the Plan Year or the
                  date of  distribution,  as  determined by the  Committee.  The
                  income or loss allocable to such Excess Deferral Contributions
                  is the sum of:

                                    (A)   income  or  loss   allocated   to  the
                           Participant's Account for the taxable year multiplied
                           by  a  fraction,   the  numerator  of  which  is  the
                           Participant's  Excess  Deferral  Contributions  to be
                           distributed  for the year and the  denominator is the
                           Participant's   Account   balance   attributable   to
                           Elective Employer Contributions,  minus any income or
                           plus any loss occurring during the Plan Year; and

                                    (B) if the Committee  shall determine in its
                           sole  discretion,  ten  percent  (10%) of the  amount
                           determined  under (A) above  multiplied by the number
                           of whole calendar  months between the end of the Plan
                           Year and the date of the  distribution,  counting the
                           month of distribution  if  distribution  occurs after
                           the 15th of the month.

                           Notwithstanding   the  above,   the   Committee   may
                  designate  any  reasonable  method for computing the income or
                  loss allocable to Excess Deferral Contributions, provided that
                  the method does not violate Section  401(a)(4) of the Code, is
                  used  consistently for all Participants and for all corrective
                  distributions under the Plan for the Plan Year, and is used by
                  the  Plan  for  allocating  income  or loss  to  Participants'
                  Accounts.

                           (3) Maximum  Distribution Amount. The Excess Deferral
                  Contributions  which would  otherwise  be  distributed  to the
                  Participant shall be adjusted for income; shall be reduced, in
                  accordance  with  regulations,  by the Excess  Deferral Amount
                  distributed to the Participant;  and shall, if there is a loss
                  allocable to the Excess Deferral Contributions, in no event be
                  less than the lesser of the  Participant's  Account  under the
                  Plan  attributable to Elective  Employer  Contributions or the
                  Participant's  Elective  Employer  Contributions  for the Plan
                  Year.

                  (c)      Special Rules.
                           
                          (1) For  purposes  of this  Section  4.5,  the Actual
                  Deferral  Percentage  for any  Eligible  Participant  who is a
                  Highly  Compensated  Employee  for the  Plan  Year  and who is
                  eligible  to  have  deferral  contributions  allocated  to his
                  account under two (2) or more plans or arrangements  described
                  in  Section  401(k)  of the  Code  that are  maintained  by an
                  Affiliated  Employer  shall  be  determined  as  if  all  such
                  deferral  contributions were made under a single  arrangement.
                  If a Highly  Compensated  Employee  participates in two (2) or
                  more cash or deferred  arrangements  that have  different plan
                  years, all cash or deferred arrangements ending with or within
                  the  same   calendar   year  shall  be  treated  as  a  single
                  arrangement.  Notwithstanding  the  foregoing,  certain  plans
                  shall be  treated as  separate  if  mandatorily  disaggregated
                  under Code Section 401(k).

                           (2)  In  the  event  that  this  Plan  satisfies  the
                  requirements of Code Section 401(k), 401(a)(4), or 410(b) only
                  if aggregated  with one or more other plans, or if one or more
                  other plans satisfy the  requirements  of Code Section 401(k),
                  401(a)(4),  or 410(b) only if aggregated  with this Plan, then
                  the actual deferral  percentages shall be determined as if all
                  such plans were a single plan.

                           (3) The  determination  and treatment of the Elective
                    Employer Contributions and Actual Deferral Percentage of any
                    Eligible  Participant shall satisfy such other  requirements
                    as may be prescribed by the Secretary of the Treasury.

         4.6 Voluntary Participant Contributions. An Eligible Employee who meets
the  participation  requirements of Article III may elect in accordance with the
procedures established by the Committee to contribute to his Account a Voluntary
Participant  Contribution  as provided in the schedule  attached  hereto for his
collective bargaining unit. The maximum Voluntary Participant Contribution shall
be reduced by the percent,  if any, which is contributed as an Elective Employer
Contribution on behalf of such Participant under Section 4.1.

         4.7 Manner and Time of Payment of Elective  Employer  Contributions and
Voluntary  Participant  Contributions.  Contributions  made in  accordance  with
Sections  4.1 and 4.6 will be rounded to the next higher  multiple of one dollar
on a monthly basis.  They will be made only through payroll  deductions and will
be effective as of the payroll period  commencing as soon as  practicable  after
the date on which the Participant elects to commence  participation in the Plan.
Contributions  shall be remitted to the Trustee as of the earliest date on which
such  contributions  can reasonably be segregated from each Employing  Company's
general assets, but in any event within the time period prescribed by applicable
law.

         4.8 Change in Contribution Rate. A Participant may prospectively change
the  percentage  of his  Compensation  that he has  authorized  as the  Elective
Employer  Contribution  to be made on his  behalf or his  Voluntary  Participant
Contribution to another permissible percentage in accordance with the procedures
established  by the  Committee.  Such  election  shall be  effective  as soon as
practicable after it is made.

         4.9  Change  in  Contribution  Amount.  In the event of a change in the
Compensation  of  a  Participant,   the  percentage  of  the  Elective  Employer
Contribution  made  on his  behalf  or his  Voluntary  Participant  Contribution
currently in effect shall be applied as soon as practicable with respect to such
changed Compensation without action by the Participant.





                                    ARTICLE V
                             EMPLOYER CONTRIBUTIONS
                             ----------------------
 

         5.1  Amount  of  Employer  Matching   Contributions.   Subject  to  the
provisions of Sections 6.1 and 6.2, each Employing  Company shall  contribute an
Employer  Matching  Contribution on behalf of each  Participant in its employ as
provided in the schedule attached hereto for his collective bargaining unit. The
Employer Matching Contribution shall be allocated first to the Elective Employer
Contributions made on a Participant's behalf.

         5.2      Payment  of  Employer  Matching  Contributions.  Except as
provided  herein,  Employer  Matching Contributions  shall be  remitted  to the
Trustee as soon as  practicable  after the  payroll  period to which they
relate.

         5.3      Reversion  of  Employing  Company  Contributions.  Employing
Company  contributions  computed in accordance  with  the  provisions  of  this
Plan  shall  revert  to the  Employing  Company  under  the  following
circumstances:

                  (a) In the case of an Employing Company  contribution which is
         made by reason of a mistake of fact,  such  contribution  upon  written
         direction of the  Employing  Company shall be returned to the Employing
         Company within one year after the payment of the contribution.

                  (b) If any Employing Company  contribution is determined to be
         nondeductible  under  Section  404 of the  Code,  then  such  Employing
         Company  contribution,  to  the  extent  that  it is  determined  to be
         nondeductible, upon written direction of the Employing Company shall be
         returned  to  the   Employing   Company   within  one  year  after  the
         disallowance of the deduction.

                  (c) If the Plan receives an adverse determination with respect
         to its initial  qualification  under the Code,  the  Employing  Company
         contributions  shall be returned to the  Employing  Company  within one
         year of the date of such disqualification.

         The amount which may be returned to the  Employing  Company  under this
Section 5.3(a) and (b) is the excess of (1) the amount  contributed over (2) the
amount that would have been contributed had there not occurred a mistake of fact
or  disallowance  of  the  deduction.   Earnings   attributable  to  the  excess
contribution  shall  not  be  returned  to the  Employing  Company,  but  losses
attributable  thereto  shall  reduce  the  amount  to be  so  returned.  If  the
withdrawal of the amount  attributable to the mistaken  contribution would cause
the  balance of the  Account of any  Participant  to be reduced to less than the
balance  which would have been in the Account had the  mistaken  amount not been
contributed,  then the amount to be returned to the  Employing  Company shall be
limited so as to avoid such reduction.






         5.4  Correction  of  Prior  Incorrect  Allocations  and  Distributions.
Notwithstanding  any provisions  contained herein to the contrary,  in the event
that, as of any Valuation Date,  adjustments  are required in any  Participants'
Accounts to correct any  incorrect  allocation  of  contributions  or investment
earnings or losses,  or such other  discrepancies  in Account  balances that may
have  occurred   previously,   the  Employing   Companies  may  make  additional
contributions to the Plan to be applied to correct such incorrect allocations or
discrepancies.  The additional contributions shall be allocated by the Committee
to adjust such  Participants'  Accounts to the value which would have existed on
said   Valuation  Date  had  there  been  no  prior   incorrect   allocation  or
discrepancies. The Committee shall also be authorized to take such other actions
as it deems necessary to correct prior incorrect allocations or discrepancies in
the Accounts of Participants under the Plan.





                                   ARTICLE VI
                          LIMITATIONS ON CONTRIBUTIONS
                          ----------------------------


         6.1      Section 415 Limitations.
                  
                  (a) Notwithstanding any provision of the Plan to the contrary,
         the total Annual  Additions  allocated to the Account (and the accounts
         under  all  defined  contribution  plans  maintained  by an  Affiliated
         Employer) of any Participant for any Limitation Year in accordance with
         Code Section 415 and the regulations thereunder, which are incorporated
         herein by this reference,  shall not exceed the lesser of the following
         amounts:

                           (1)      twenty-five  percent (25%) of the
                  Participant's  compensation in the Limitation Year; or

                           (2)      $30,000.

                  (b) For  purposes  of this  Section  6.1,  wherever  the  term
         "compensation" is used, such term shall mean compensation as defined in
         Code Section 415(c)(3) and any rulings and regulations thereunder.

         6.2 Correction of Contributions in Excess of Section 415 Limits. If the
Annual Additions for a Participant  exceed the limits of Section 6.1 as a result
of the  allocation of  forfeitures,  if any, a reasonable  error in estimating a
Participant's  annual  compensation for purposes of the Plan, a reasonable error
in determining the amount of elective  deferrals  (within the meaning of Section
402(g)(3) of the Code) that may be made with respect to any individual, or under
other  limited facts and  circumstances  that the  Commissioner  of the Treasury
finds justify the  availability  of the rules set forth in this Section 6.2, the
excess  amounts  shall not be deemed  Annual  Additions  if they are  treated in
accordance with any one or more or any combination of the following:

                  (a) distribute to the Participant that portion, or all, of his
         Elective Employer Contributions (as adjusted for income and loss) as is
         necessary to ensure compliance with Section 6.1;

                  (b) return to the  Participant  that  portion,  or all, of his
         Voluntary  Participant  Contributions (as adjusted for income and loss)
         as is necessary to ensure compliance with Section 6.1; and

                  (c)  forfeiture  of  that  portion,  or all,  of the  Employer
         Matching  Contributions  (as  adjusted  for  income  and  loss) and any
         forfeitures  of  Employer  contributions  that  were  allocated  to the
         Participant's  Account  (as  adjusted  for  income  and  loss),  as  is
         necessary to ensure compliance with Section 6.1.

         Any amounts distributed or returned to the Participant under (a) or (b)
above shall be disregarded for purposes of the Actual Deferral Percentage Test.

         Any  amounts  forfeited  under  this  Section  6.2  shall  be held in a
suspense  account and shall be applied,  subject to Section 6.1,  toward funding
the Employer  Matching  Contributions  for the next  succeeding  Plan Year. Such
application shall be made prior to any Employing Company contributions and prior
to any Employer Matching  Contributions  that would constitute Annual Additions.
No income or  investment  gains and losses  shall be  allocated  to the suspense
account provided for under this Section 6.2. If any amount remains in a suspense
account  provided for under this Section 6.2 upon termination of this Plan, such
amount  will  revert  to  the  Employing  Companies  notwithstanding  any  other
provision of this Plan.





                                   ARTICLE VII
                           SUSPENSION OF CONTRIBUTIONS
                           ---------------------------
 
         7.1 Suspension of  Contributions.  A Participant  may (on a prospective
basis)  voluntarily  suspend the  Elective  Employer  Contributions  made on his
behalf  and his  Voluntary  Participant  Contributions  in  accordance  with the
procedures  established by the Committee.  Such suspension shall be effective as
soon as practicable after it is made.  Whenever Elective Employer  Contributions
made on a  Participant's  behalf and  Voluntary  Participant  Contributions  are
suspended, Employer Matching Contributions shall also be suspended.

         7.2   Resumption  of   Contributions.   A  Participant   may  terminate
prospectively any such suspension in accordance with the procedures  established
by  the  Committee.   Such  resumption  of  contributions   shall  be  effective
prospectively as soon as practicable after it is elected. There shall be no make
up of any contributions by a Participant or by an Employing Company with respect
to a period of suspension.






                                  ARTICLE VIII
                           INVESTMENT OF CONTRIBUTIONS
                           --------------------------- 

         8.1 Investment  Funds. The Investment Funds shall be selected from time
to time by the Committee. In addition to such other Investment Funds selected by
the Committee,  the Investment Funds shall include the "Company Stock Fund". The
Company Stock Fund shall be invested and  reinvested  in Common Stock,  provided
that funds applicable to the purchase of Common Stock pending investment of such
funds  may be  temporarily  invested  in  short-term  United  States  Government
obligations,  other  obligations  guaranteed  by the United  States  Government,
commercial paper, or certificates of deposit, and, if the Trustee so determines,
may be  transferred  to money market funds utilized by the Trustee for qualified
employee benefit trusts.

         8.2 Investment of Participant  Contributions.  Each  Participant  shall
direct, at the time he elects to participate in the Plan and at such other times
as may be  directed  by the  Committee  or  pursuant  to Section  8.6,  that his
Elective  Employer  Contributions  and Voluntary  Participant  Contributions  be
invested in one or more of the Investment  Funds,  provided such investments are
made in one-percent (1%) increments.

         8.3 Investment of Employer  Matching  Contributions.  Employer Matching
Contributions  shall be invested  entirely  in the Company  Stock Fund and shall
remain  invested in the Company Stock Fund until such time that the  Participant
elects to  invest  all or a  portion  of the  amount  credited  to his  Employer
Matching Contribution  subaccount in any of the Investment Funds under this Plan
as provided in Section 8.5.

         Notwithstanding  the  foregoing,  any amounts  attributable  to company
matching  contributions,  which  are  transferred  to this  Plan  pursuant  to a
trust-to-trust  transfer,  shall not be invested  in the Company  Stock Fund but
shall instead be invested at the Participant's  direction.  If no such direction
is  provided,  such  transferred  amount  shall be invested in  accordance  with
procedures established by the Committee.

         8.4  Investment  of Earnings.  Interest,  dividends,  if any, and other
distributions  received by the Trustee with respect to an Investment  Fund shall
be invested in such Investment Fund.

         8.5  Transfer of Assets  between  Funds.  A  Participant  may direct in
accordance  with  the  provisions  of  this  Section  8.5  and  such  procedures
established by the Committee  that all of his interest in an Investment  Fund or
Funds  attributable  to amounts in his  Account  or any  portion of such  amount
(expressed  in number of shares,  whole  dollar  amounts,  or  one-percent  (1%)
increments)  to the credit of his  Account be  transferred  and  invested by the
Trustee  as of such  date in any  other  Investment  Fund as  designated  by the
Participant.  Such direction shall be effective as soon as practicable  after it
is made.

         8.6 Change in Investment Direction. Any investment direction given by a
Participant  shall  continue  in effect  until  changed  by the  Participant.  A
Participant may change his investment  direction as to the future  contributions
and allocations to his Account in accordance with the procedures  established by
the  Committee,  and such  direction  shall be effective as soon as  practicable
after it is made.

         8.7 Section  404(c) Plan.  This Plan is intended to be a plan described
in ERISA Section 404(c) and shall be interpreted in accordance  with  Department
of Labor  Regulations  Section  1.404c-1,  which is incorporated  herein by this
reference.  The  Committee  shall  take such  actions as it deems  necessary  or
appropriate   in  its   discretion  to  cause  the  Plan  to  comply  with  such
requirements,  including,  but not limited to, providing  Participants  with the
right  to  request  and  receive  written   confirmation  of  their   investment
instructions.  Further,  the  Committee  shall  take  such  actions  as it deems
necessary or appropriate  in its  discretion (a) to ensure that  confidentiality
procedures  with  respect to a  Participant's  ownership of Common Stock and the
exercise of ownership  rights with respect to such Common Stock are adequate and
utilized,  and (b) to appoint an independent fiduciary to carry out such actions
as the  Committee  determines  involve  the  potential  for undue  influence  on
Participants  with  regard to the direct or  indirect  exercise  of  shareholder
rights with respect to Common Stock.

         8.8 Common Stock  Investment  Funds. In the event that the Committee in
its discretion allows a trust-to-trust transfer from the fund of a plan which is
primarily invested in the common stock of the employer maintaining the plan into
this Plan, the Trustee shall  establish and maintain a separate  Investment Fund
for such common stock on behalf of those  Participants  invested in common stock
prior to the transfer.  These  Participants  may direct  investments out of such
Investment  Fund and into the  other  Investment  Funds in  accordance  with the
procedures of this Article VIII.  However,  no future investments may be made in
such Investment  Fund and,  should a Participant  elect to reduce the portion of
his Account which is invested in such Investment Fund, he may not again reinvest
additional assets in such Investment Fund.





                                   ARTICLE IX
               MAINTENANCE AND VALUATION OF PARTICIPANTS' ACCOUNTS
               ---------------------------------------------------

         9.1 Establishment of Accounts. An Account shall be established for each
Participant. In addition,  subaccounts shall be established for each Participant
to  reflect  all  Elective   Employer   Contributions,   Voluntary   Participant
Contributions,  Employer Matching  Contributions and any Rollover  Contributions
(and the earnings and/or losses on each  subaccount).  Each  Participant will be
furnished  a  statement   of  his  Account  at  least   annually  and  upon  any
distribution.

         9.2 Valuation of Investment  Funds. A Participant's  Account in respect
of his  interest in each  Investment  Fund shall be credited or charged,  as the
case may be,  as of each  Valuation  Date  with the  dividends,  income,  gains,
appreciation,   losses,   depreciation,   forfeitures,   expenses,   and   other
transactions  with respect to such  Investment Fund for the Valuation Date as of
which such credit or charge accrued.  Such credits or charges to a Participant's
Account shall be made in such proportions and by such method or formula as shall
be deemed by the  Committee to be necessary or  appropriate  to account for each
Participant's  proportionate beneficial interest in the Trust Fund in respect of
his interest in each Investment Fund.  Investments of each Investment Fund shall
be valued at their fair market values as of each Valuation Date as determined by
the Trustee, and such valuation shall conclusively establish such value.

         9.3 Rights in Investment  Funds.  Nothing  contained in this Article IX
shall be deemed to give any Participant any interest in any specific property in
any Investment Fund or any interest, other than the right to receive payments or
distributions in accordance with the Plan.





                                    ARTICLE X
                                     VESTING
                                     -------

         10.1     Full  Vesting.  Participants  shall at all  times be
one-hundred  percent  (100%)  vested in all Elective Employer  Contributions,
Voluntary  Participant  Contributions and Rollover  Contributions  made to their
Accounts.

         10.2 Employer  Matching  Contributions  Contributions.  A Participant's
nonforfeitable  percentages of Employer Matching Contributions (and any earnings
or losses thereon) shall be based on the Participant's  total number of Years of
Service,  computed  without regard to any Years of Service  completed  after the
fifth (5th)  consecutive  One-Year Break in Service.  Such percentages  shall be
determined from the schedule attached hereto for his collective bargaining unit.

         10.3 Forfeitures.  That portion of the Account to which the Participant
is not  entitled  shall be credited to the Suspense  Account  (which will always
share in earnings or losses of the Trust) and at such time as the amount becomes
available as a Forfeiture shall be applied to reduce the next ensuing  Employing
Company contribution.

         10.4 Buy-Back Procedure.  A terminated  Participant who has voluntarily
elected to receive a distribution of the vested portion of his Account  pursuant
to  Section  12.5(a)(2)  (or who  receives  a  mandatory  lump sum  distribution
pursuant to Section  12.5(a)(1))  and who returns to the employ of an  Employing
Company before  incurring five (5) consecutive  One-Year Breaks in Service shall
be  permitted to repay the  distributed  amount to the Trust Fund and thereby be
entitled to a restoration  of his entire Account under the Plan in an amount not
less than that amount  determined as of the Valuation Date used to determine the
actual payment of the distribution, unadjusted by an subsequent gains or losses.
The Participant must repay the full amount distributed to him before the earlier
of (a)  five  (5)  years  from  the  first  date on  which  the  Participant  is
subsequently reemployed by the Employer or (b) the close of a period of five (5)
consecutive  One-Year Breaks in Service  commencing  after the  withdrawal.  The
permissible  sources for  restoration  of accrued  benefits are  subsequent  (a)
income or gain to the Plan;  (b)  Forfeitures;  or (c)  Employer  contributions.
Restoration  of accrued  benefits to which an  Employee  is entitled  under this
Section shall be made, as deemed necessary and proper by the Committee, from one
or more of the permissible sources named above prior to the normal allocation of
such funds under this Plan.

         10.5  Deemed  Cash-out  and  Deemed   Buy-back.   Any  Participant  who
terminates  employment  for any  reason at a time when he is zero  percent  (0%)
vested in his Account  shall be deemed cashed out of the Plan as of the last day
of the month immediately  following the month in which occurs his termination of
employment.  If the terminated Participant returns to the employ of an Employing
Company before  incurring five (5) consecutive  One-Year  Breaks in Service,  he
shall be entitled to a restoration  of his benefits  under the Plan in an amount
not less than that amount determined as of the last day of the month immediately
following the month in which occurs his termination of employment, unadjusted by
any  subsequent  gains or losses.  The  permissible  sources for  restoration of
accrued benefits are subsequent (a) income or gain to the Plan; (b) Forfeitures;
or (c) Employing Company contributions. Restoration of accrued benefits to which
an Employee is entitled  under this Section shall be made,  as deemed  necessary
and proper by the Committee,  from one or more of the permissible  sources named
above prior to the normal allocation of such funds under this Plan.

         10.6     Vesting after One-Year Break in Service.
                  
         (a) A  terminated  Participant  who is  reemployed  after  incurring  a
One-Year  Break in  Service  shall be  entitled  to receive  credit for  vesting
purposes  for Years of Service  earned  prior to the  One-Year  Break in Service
subject to the following rules:

                  (1) If he had a  vested  right  to  all  or a  portion  of his
         Account balance derived from Employing  Company  contributions at the
         time of his termination of employment, he shall receive credit for
         Years of Service earned prior to his One-Year Break in Service upon his
         date of reemployment.

                  (2) If he did not have a vested right to all or any portion of
        his   Account   balance   derived   from   Employing   Company
        contributions at the time of his termination of employment, he shall
        receive  credit for Years of Service earned prior to his One-Year  Break
        in Service provided his number of consecutive One-Year Breaks in Service
        is less than the  greater of five (5) or his  aggregate Years of Service
        earned  before  his One-Year Break in Service.

         (b) No Years of  Service  earned  after five (5)  consecutive  One-Year
Breaks in Service  shall be taken into account in  determining  a  Participant's
nonforfeitable  percentage  in his Account  balance  attributable  to  Employing
Company contributions that were made prior to such five-year period.

         10.7 Vesting at Normal Retirement Age.  Notwithstanding Section 10.2, a
Participant  shall  become one  hundred  percent  (100%)  vested in his  accrued
Account  balance upon his  attainment of Normal  Retirement Age provided that he
has not separated from service with the Employing Company prior to such date.

         10.8     Vesting  Upon Death.  Notwithstanding  Section 10.2,  a
Participant's  Account  shall become one hundred percent (100%) vested upon his
death if his death occurs while he is an Employee.



                                   ARTICLE XI
                             WITHDRAWALS AND LOANS
                             ---------------------

         11.1     Withdrawals by Participants.
                  
                  (a) Subject to the  provisions  of Article  XII,  this Section
         11.1,   and  Sections  11.2  through  11.6,  a  Participant   may  make
         withdrawals from his vested Account  effective as of any Valuation Date
         in the order of priority listed below:

                           (1) All or a  portion  of the  value  of his  Account
                    attributable  to Voluntary  Participant  Contributions  (not
                    including any earnings or  appreciation  thereon) made prior
                    to January 1, 1987;

                           (2)  All  amounts  described  above,  plus  all  or a
                    portion  of  the  value  of  his  Account   attributable  to
                    Voluntary Participant Contributions,  plus a ratable portion
                    of the earnings and/or appreciation on Voluntary Participant
                    Contributions;

                           (3)      All  amounts  described  above,  all or a
                    portion  of the value of his  Account attributable to
                    Rollover Contributions (including earnings and appreciation
                    thereon);

                           (4) All  amounts  described  above,  plus up to fifty
                    percent  (50%) of the  value of his  Account  attributable
                    to Employer  Matching   Contributions   (including  earnings
                    and appreciation  thereon)  allocated  to his  Account;
                    provided, however,  that said Participant shall have
                    participated in the Plan for not less than sixty (60) months
                    at the time of the withdrawal;

                           (5) (A) For Participants who have not attained age 59
                    1/2 or separated  from service with the Affiliated Employers
                    (within the meaning of Code Section 401(k)(2)(B)(i)(I)), all
                    amounts described above, plus all or a portion of the value
                    of his Account attributable to Elective Employer 
                    Contributions(not including any earnings or appreciation
                    thereon); and

                               (B) For  Participants who have attained age 59
                    1/2 or separated from service with the Affiliated Employers
                    (within the meaning of Code Section 401(k)(2)(B)(i)(I)), all
                    amounts described above, plus all or a portion of the value
                    of his Account  attributable to Elective  Employer
                    Contributions and any earnings or appreciation thereon.

         (b)      There shall be no limit on the number of
                    withdrawals which may be made during a Plan Year.

         11.2     Notice of  Withdrawal.  Notice of withdrawal  must be given by
a Participant  in accordance  with the  procedures  established  by the
Committee,  and  if  such  withdrawal  would  constitute  an  eligible  rollover
distribution  (within the meaning of Code  Section  402(c)(4)),  the consent and
notice requirements of Section 12.10 must be satisfied.  Payment of a withdrawal
shall be made as soon as practicable  and in accordance  with Section 12.10,  if
applicable.

         11.3 Form of Withdrawal.  All distributions under this Article XI shall
be made in the form of cash,  provided  that with  respect  to any  distribution
which is attributable to Common Stock,  the Participant  shall have the right to
demand that such portion of the distribution be made in the form of Common Stock
to the extent of the whole number of shares of Common Stock in his Account. Such
demand  must  be made in  accordance  with  the  procedures  established  by the
Committee.

         11.4 Minimum Withdrawal. No distribution under this Article XI shall be
permitted in an amount which has a value of less than $300,  unless the value of
the amount  available under the selected option is less than $300, in which case
such available amount will be distributed.

         11.5 Source of Withdrawal. Withdrawals shall be made in accordance with
the  instructions of the Participant  from each of the Investment Funds in which
the  amount  to be  distributed  is  invested.  The  value of the  amount  to be
distributed  under any option listed in Section 11.1 shall be determined as soon
as practicable in accordance with the procedures established by the Committee.

         11.6     Requirement of Hardship.
                  
                  (a) Except as provided in (e) below, a withdrawal  pursuant to
         Section 11.1(a)(5)(A), in addition to the other requirements of Article
         XI,  shall  be  permitted  only if the  Committee  determines  that the
         withdrawal is to be made on account of an immediate and heavy financial
         need of the  Participant,  the amount of the withdrawal does not exceed
         such financial need, and the amount of the withdrawal is not reasonably
         available from other resources of the Participant.

                  (b)      For purposes of this Section  11.6,  the  following
         shall be deemed to be immediate and heavy financial needs:

                           (1)      Medical  expenses described in Section213(d)
                  of the Code,  including but not limited to, expenses for:

                                    (i)     The diagnosis, cure, mitigation,
                           treatment, or prevention of disease, or for the
                           purpose of affecting any structure or function of the
                           body;

                                    (ii)    transportation  primarily for and
                           essential to such expenses  referred to in (i) above;
                           or

                                    (iii) insurance  (including  amounts paid as
                           premiums  under  part B of Title  XVIII of the Social
                           Security Act) relating to medical  expenses  referred
                           to in (i) or (ii) above,  provided  such expenses are
                           incurred by the Participant, the Participant's spouse
                           or any person whom the Participant may properly claim
                           as a dependent  on his  federal  income tax return or
                           are  necessary for such persons to obtain the medical
                           care described above; or

                           (2)      Purchase  (excluding  mortgage  payments)
                  of a  principal  residence  for  the Participant; or

                           (3) Payment of tuition, related educational fees, and
                  room and board  expenses,  for the next  twelve (12) months of
                  post-secondary    education   for   the    Participant,    the
                  Participant's  spouse or child or children,  or any person the
                  Participant  may properly  claim as a dependent on his federal
                  income tax return; or

                           (4)      The need to prevent  eviction of the
                  Participant from his principal residence or foreclosure on the
                  mortgage of the Participant's principal residence; or

                           (5) Any  other  need  which the  Commissioner  of the
                  Internal Revenue  Service,  through the publication of revenue
                  rulings, notices, or other documents of general applicability,
                  deems to be immediate and heavy.

                  (c) For purposes of this Section  11.6, a withdrawal  shall be
         deemed necessary to satisfy an immediate and heavy financial need if:

                           (1) The  distribution  is not in excess of the amount
                    of  the   immediate   and  heavy   financial   need  of  the
                    Participant,  including  any  amounts  necessary  to pay any
                    federal,   state,   or  local   income  taxes  or  penalties
                    reasonably anticipated to result from the distribution;

                           (2)      The  Participant  has  obtained  all
                    distributions  and all  nontaxable loans currently available
                    to him under all plans maintained by an Affiliated Employer;

                           (3) The  Participant  agrees to suspend all  elective
                    employer    contributions    and    voluntary    participant
                    contributions to all plans of an Affiliated  Employer for at
                    least twelve (12) months after  receipt of the  distribution
                    under this Section 11.6; and

                           (4)  The  Participant  agrees  not to  make  elective
                    contributions  to  this  Plan  or  any  other  qualified  or
                    non-qualified  deferred  compensation  plan  sponsored by an
                    Affiliated Employer (including stock purchase,  stock option
                    or similar  plans)  during the  Participant's  taxable  year
                    immediately  following  the  taxable  year  of the  hardship
                    distribution  in  excess  of  the  Participant's  applicable
                    elective  deferral  limits under Section  402(g) of the Code
                    for such  taxable  year  less  the  amount  of the  hardship
                    distribution for the taxable year.

                  (d) When all  suspensions  pursuant to this  Section  11.6 are
         ended,  Elective Employer  Contributions  and/or Voluntary  Participant
         Contributions  may be resumed by the Participant (if the Participant is
         then eligible and elects to resume such  contributions)  beginning with
         the Participant's first payroll period commencing after all suspensions
         are ended, and Employer Matching Contributions by his Employing Company
         also shall be resumed.  There shall be no make up of any  contributions
         by a Participant or by an Employing Company with respect to a period of
         suspension.

                  (e)  Notwithstanding  (a) above, if a Participant has attained
         age 59 1/2 or  separated  from service  with the  Affiliated  Employers
         (within the meaning of Code  Section  401(k)(2)(B)(i)(I)),  he shall be
         permitted to make a withdrawal pursuant to Section 11.1(a)(5)(A),  even
         if such withdrawal is not on account of hardship.

         11.7     Loans to Participants.
                  
                  (a) The  Committee  may,  in its sole  discretion,  direct the
         Trustee to make a loan or loans from the Trust Fund to any  Participant
         (other than a  Participant  with an existing  Plan loan in arrears) (1)
         who is an Employee on the active payroll of an Employing  Company,  (2)
         who is receiving long-term  disability payments under a plan maintained
         by his Employing  Company,  (3) who is on a leave of absence authorized
         by his Employing Company,  or (4) who is a party in interest as defined
         in  Section  3(14) of  ERISA.  All loan  applications  shall be made in
         accordance  with the procedures  established  by the  Committee,  which
         shall form a part of this Plan.  Such  procedures  shall  establish the
         terms and  conditions  of loans  under the Plan,  including  the events
         constituting  default,  and shall be consistent  with the provisions of
         this Section 11.7.

                  (b) The  total  amount  of all  loans  outstanding  to any one
         Participant  under all  qualified  plans  maintained  by an  Affiliated
         Employer  shall not exceed the  lesser of (1)  $50,000,  reduced by the
         excess of the highest  outstanding  balance of loans from all qualified
         plans  maintained by an  Affiliated  Employer  during the  twelve-month
         period  ending on the day before a loan is made,  over the  outstanding
         balance  of any  loans  to the  Participant  from all  qualified  plans
         maintained by an  Affiliated  Employer on the date the loan is made, or
         (2)  fifty  percent  (50%)  of  such  Participant's  Account  as of the
         Valuation  Date  coinciding  with or next  following  the date the loan
         application  is made.  The  minimum  amount of any loan shall not equal
         less than $1,000.

                  (c) The Participant requesting a loan pursuant to this Section
         11.7 shall  designate the order of priority of Investment  Fund(s) from
         which the principal amount of the loan shall be obtained.

                  (d)  The  Committee   shall  adopt  and  follow   uniform  and
         nondiscriminatory  procedures  in making  loans under this Plan to make
         certain  that such loans (1) are  available  to all  Participants  on a
         reasonably  equivalent  basis,  (2) are not made  available  to  Highly
         Compensated  Employees,  officers, or shareholders in an amount greater
         than  the  amount  made  available  to other  Participants,  (3) bear a
         reasonable  rate  of  interest,  and (4) are  adequately  secured.  The
         repayment  of such loans by any  Participant  who is an Employee on the
         active  payroll of an Employing  Company shall be made through  payroll
         deduction. Any loan repayment shall extend for a period certain, not to
         exceed  five  (5)  years,  expressed  in any  number  of  whole  months
         (including the month the loan is made). The term of any loan may be for
         a period certain of more than five (5) years, but not to exceed fifteen
         (15) years,  only if the  proceeds of such loan are used to acquire any
         dwelling used or, within a reasonable period of time, to be used as the
         principal residence of the Participant.

                  (e) The Committee  shall direct the Trustee to obtain from the
         Participant  such note and  adequate  security as it may  require.  All
         loans  made  pursuant  to this  Section  11.7  shall be  secured by the
         Participant's  Account, and no other types of collateral may be used to
         secure a loan from the Plan.  Notwithstanding the provisions of Section
         16.2,  if a  Participant  defaults  on a loan  under the Plan or if the
         Participant's employment terminates prior to full repayment thereof, in
         addition to any other  remedy  provided in the loan  instruments  or by
         law,  the  Committee  may direct the  Trustee  to charge  against  that
         portion of the Participant's  Account which secures the loan the amount
         required  to fully  repay the loan.  Under no  circumstances,  however,
         shall any unpaid loan be charged against a Participant's  Account until
         permitted by applicable law. This Section authorizes only the making of
         bona  fide  loans  and not  distributions,  and  before  resort is made
         against a Participant's Account for his failure to repay any loan, such
         other  reasonable  efforts  to  collect  the same  shall be made by the
         Committee as it deems reasonable and practical under the circumstances.

                  (f) No distribution  shall be made to any  Participant  unless
         and until all unpaid loans to such Participant have either been paid in
         full or deducted from the Participant's Account.

                  (g) All loans made under this Section 11.7 shall be considered
         earmarked  investments of the Participant's  Account, and any repayment
         of principal and interest  shall be  reinvested in accordance  with the
         Participant's  investment  direction  in  effect  on the  date  of such
         repayment pursuant to Article VIII of the Plan.






                                   ARTICLE XII
                          DISTRIBUTION TO PARTICIPANTS
                          ----------------------------

         12.1     Distribution upon Retirement.
            
                  (a)  If  a   Participant's   employment  with  the  Affiliated
         Employers is terminated as a result of his  retirement  pursuant to the
         defined benefit pension plan of an Affiliated Employer,  in addition to
         the withdrawal  options under Section 11.1, the entire balance credited
         to his Account  shall be payable to him in the manner set forth in this
         Section  12.1 at such time  requested  by the  Participant  pursuant to
         Section 12.6 and in accordance  with the procedures  established by the
         Committee. The distribution shall commence as soon as practicable after
         the Valuation Date selected by the  Participant in one of the following
         ways:

                           (1)      In a single lump sum distribution; or

                           (2) In annual installments not to exceed twenty (20),
                    as selected by the Participant,  or the  Participant's  life
                    expectancy.  The amount of cash  and/or the number of shares
                    of Common  Stock in each  installment  shall be equal to the
                    proportionate  value as of each Valuation  Date  immediately
                    preceding  payment of the balance  then to the credit of the
                    Participant in his Account determined by dividing the amount
                    credited  to his  Account as of such  Valuation  Date by the
                    number of payments remaining to be made.

                           If  a  Participant   who  is  receiving   installment
                  payments shall establish to the satisfaction of the Committee,
                  in accordance  with  principles and procedures  established by
                  the Committee  which are  applicable to all persons  similarly
                  situated,  that a financial  emergency  exists in his affairs,
                  such as illness or accident to the  Participant or a member of
                  his  immediate  family  or  other  similar  contingency,   the
                  Committee may, for the purpose of alleviating  such emergency,
                  accelerate the time of payment of some or all of the remaining
                  installments.  If a Participant  dies before  receiving all of
                  the amount to the credit of his  Account  in  accordance  with
                  this paragraph (2), the amount  remaining to the credit of his
                  Account at his death shall be distributed  to his  Beneficiary
                  as soon as practicable in accordance with Section 12.4.

                  (b)  Notwithstanding  a  Participant's  election  to defer the
         receipt of the benefits  under (a) above,  the  Committee  shall direct
         payment in a single lump sum to such  Participant if the balance of his
         Account does not exceed $5,000 in accordance  with the  requirements of
         Code  Section   411(a)(11).   The  Committee  shall  not  cash-out  any
         Participant  whose Account  balance  exceeds $5,000 without the written
         consent of the Participant.

         12.2 Distribution upon Disability.  If a Participant's  employment with
the Affiliated  Employers is terminated  prior to his Normal  Retirement Date by
reason  of his total and  permanent  disability,  as  determined  by the  Social
Security  Administration  and evidenced in a writing  provided to the Committee,
such disabled  Participant,  in addition to the withdrawal options under Section
11.1,  shall be entitled to receive the entire value  credited to his Account at
such time as requested by the Participant or such legal representative  pursuant
to  Section  12.6 and in  accordance  with  the  procedures  established  by the
Committee.  Any  distribution  pursuant to this  Section 12.2 shall be made in a
single lump sum as soon as practicable after the selected Valuation Date.

         Notwithstanding the foregoing,  the Committee shall direct payment in a
single lump sum to such Participant or his legal  representative  if the balance
of such  Participant's  Account does not exceed  $5,000 in  accordance  with the
requirements of Code Section 411(a)(11).

         12.3  Distribution  upon Death. If a Participant's  employment with the
Affiliated  Employers  is  terminated  by reason of death,  the  entire  balance
credited  to  the  Participant's   Account  shall  be  distributed  as  soon  as
practicable to the  Participant's  surviving  Beneficiary or  Beneficiaries in a
lump sum.

         12.4  Designation  of  Beneficiary in the Event of Death. A Participant
may  designate  a   Beneficiary   or   Beneficiaries   (who  may  be  designated
contingently)  to receive  all or part of the amount  credited to his Account in
case of his death  before  his  receipt of all of his  benefits  under the Plan,
provided  that  the   Beneficiary  of  a  married   Participant   shall  be  the
Participant's  Surviving Spouse, unless such Surviving Spouse shall consent in a
writing witnessed by a notary public,  which writing  acknowledges the effect of
the Participant's designation of a Beneficiary other than such Surviving Spouse.
However,  if such  Participant  establishes to the satisfaction of the Committee
that such  written  consent may not be obtained  because  the  Surviving  Spouse
cannot be located or because of such other circumstances as the Secretary of the
Treasury may by regulations prescribe, a designation by such Participant without
the consent of the Surviving Spouse shall be valid.

         Any  consent  necessary  under  this  Section  12.4  shall be valid and
effective only with respect to the Surviving Spouse who signs the consent or, in
the event of a deemed  consent,  only with  respect  to a  designated  Surviving
Spouse.

         A designation of Beneficiary may be revoked by the Participant  without
the consent of any Beneficiary (or the  Participant's  Surviving  Spouse) at any
time before the  commencement  of the  distribution  of benefits.  A Beneficiary
designation or change or revocation of a Beneficiary  designation  shall be made
in accordance with the procedures established by the Committee.

         If no  designated  Beneficiary  shall  be  living  at the  death of the
Participant and/or such Participant's  Beneficiary  designation is not valid and
enforceable  under  applicable  law or the  procedures  of the  Committee,  such
Participant's Beneficiary or Beneficiaries shall be the person or persons in the
first of the following classes of successive preference, if then living:

                  (a)      the Participant's spouse on the date of his death,

                  (b)      the Participant's children, equally,

                  (c)      the Participant's parents, equally,

                  (d)      the Participant's brothers and sisters, equally, or

                  (e)      the Participant's executors or administrators.

Payment to such one or more persons shall completely  discharge the Plan and the
Trustee with respect to the amount so paid.

         12.5     Distribution upon Termination of Employment.
                 
                  (a)  If  a   Participant's   employment  with  the  Affiliated
         Employers is terminated  for any reason other than in  accordance  with
         Sections 12.1,  12.2, and 12.3, the vested balance to the credit of the
         Participant's  Account shall be payable in a single lump sum. Such lump
         sum  distribution  shall  be  made as soon  as  practicable  after  the
         Participant's  termination  of  employment,  provided  that  one of the
         following conditions is met:

                           (1)      the  Participant's  vested Account balance
                  does not exceed $5,000 in accordance with Code Section 411(a)
                  (11), or

                           (2)      in  accordance  with  Section  12.10,  the
                  Participant  elects  to  receive  a distribution of his vested
                  Account balance.

                  (b) A Participant  who does not receive a  distribution  under
         Section   12.5(a)(1)  may  elect  to  defer  the  commencement  of  the
         distribution of his Account following the termination of his employment
         until a later Valuation  Date,  provided that such  distribution  shall
         commence  not later than the date  required  under  Section 12.6 of the
         Plan. In addition to the  withdrawal  options  under Section 11.1,  any
         deferred  distribution  shall commence as soon as practicable after the
         Valuation Date selected by the Participant.

         12.6     Commencement of Benefits.
                 
                  (a)  Notwithstanding  any other  provision  of the  Plan,  and
         except as further provided in Section 12.6(b) below, if the Participant
         does not  elect to defer  commencement  of his  benefit  payments,  the
         payment of his benefits  shall begin at the  Participant's  election no
         later than the sixtieth  (60th) day after the close of the Plan Year in
         which the latest of the following events occurs:

                           (1)      the  Participant attains the earlier  of age
                  sixty-five  (65) or his Normal Retirement Date,

                           (2)      the Participant's tenth (10th) anniversary
                  of participation under the Plan, or

                           (3)      the Participant's separation from service
                  with the Affiliated Employers.

                  (b)  In no  event  shall  the  distribution  of  amounts  in a
         Participant's  Account  commence later than the April 1 of the calendar
         year following the later of the calendar year in which the  Participant
         attains  age  70 1/2  or  terminates  employment  with  the  Affiliated
         Employers,  in accordance with regulations  prescribed by the Secretary
         of the Treasury. Notwithstanding the foregoing, the payment of benefits
         to a Participant  who is a five percent (5%) owner of Southern  Energy,
         Inc. or an Affiliated  Employer (as determined pursuant to Code Section
         416) with respect to the Plan Year ending in the calendar year in which
         the Participant  attains age 70 1/2 shall begin not later than April 1,
         of  the  calendar  year  following  the  calendar  year  in  which  the
         Participant   attains  age  70  1/2  regardless  of  the  Participant's
         termination from employment.

                  Any  distribution  made  under  this  Plan  shall  be  made in
         accordance with the minimum  distribution  requirements of Code Section
         401(a)(9),  including the incidental death benefits  requirements under
         Code Section 401(a)(9)(G) and the Treasury Regulations thereunder.

         12.7 Transfer between Employing Companies.  A transfer by a Participant
from one  Employing  Company to another  Employing  Company shall not affect his
participation in the Plan. A transfer by a Participant from an Employing Company
to an Affiliated  Employer that is not an Employing  Company shall not be deemed
to be a termination of employment with an Employing Company.

         12.8  Distributions to Alternate Payees.  If the Participant's  Account
under the Plan shall become subject to any domestic relations order which (a) is
a qualified  domestic  relations  order  satisfying the  requirements of Section
414(p) of the Code and (b) requires the immediate  distribution in a single lump
sum of the entire portion of the Participant's Account required to be segregated
for the  benefit  of an  alternate  payee,  then  the  entire  interest  of such
alternate  payee shall be  distributed  in a single lump sum within  ninety (90)
days following the Employing  Company's  notification to the Participant and the
alternate  payee that the domestic  relations  order is qualified  under Section
414(p) of the Code, or as soon as practicable  thereafter.  Such distribution to
an alternate  payee shall be made even if the Participant has not separated from
the service of the Affiliated  Employers.  Any other distribution  pursuant to a
qualified   domestic  relations  order  shall  not  be  made  earlier  than  the
Participant's  termination  of service,  or his attainment of age fifty (50), if
earlier,  and shall not commence later than the date the  Participant's  (or his
Beneficiary's)  benefit payments  otherwise  commence.  Such  distribution to an
alternate  payee shall be made only in a manner  permitted  under Articles XI or
XII of the Plan and only to the extent the  Participant  would be  eligible  for
such distribution option.

         12.9 Requirement for Direct Rollovers. Notwithstanding any provision of
the Plan to the contrary that would  otherwise  limit a  Distributee's  election
under this Article XII, a Distributee  may elect,  at the time and in the manner
prescribed  by the  Committee,  to have  any  portion  of an  Eligible  Rollover
Distribution  paid  directly to an Eligible  Retirement  Plan  specified  by the
Distributee in a Direct Rollover.

         12.10  Consent  and  Notice  Requirements.  If the value of the  vested
portion of a Participant's  Account derived from Employing  Company and Employee
contributions  exceeds $5,000  determined in accordance with the requirements of
Code Section  411(a)(11),  the Participant  must consent to any  distribution of
such vested account balance prior to his Normal  Retirement Date. The consent of
the Participant shall be obtained in writing within the ninety-day period ending
on the first day of the first  period for which an amount is payable  under this
Plan.

         The Committee or its delegate shall notify the Participant of the right
to defer any distribution  until the Participant's  Account balance is no longer
immediately distributable. Such notification shall include a general description
of the  material  features  and an  explanation  of the  relative  values of the
optional  forms of  benefit  available  under  the Plan in a manner  that  would
satisfy  the  notice  requirements  of  Section  417(a)(3)  of  the  Code;  such
notification  shall be  provided  no less  than 30 days and no more than 90 days
prior to the distribution date.

         Distributions  may commence less than 30 days after the notice required
under Section  1.411(a)-11(c)  of the Treasury  Regulations  is given,  provided
that:

                  (a) the Committee informs the Participant that the Participant
         has a right to a period of at least 30 days after  receiving the notice
         to consider the decision of whether or not to elect a distribution  and
         a particular distribution option, and

                  (b)      the Participant, after receiving the notice,
         affirmatively elects a distribution.

         12.11 Form of Payment.  All distributions  under this Article XII shall
be  made in the  form  of  cash,  provided  that  the  person  entitled  to such
distribution  may  demand  that all or a portion  of any  distribution  which is
attributable  to Common Stock be  distributed in the form of Common Stock to the
extent of the whole number of shares in the Participant's  Account,  with a cash
adjustment for any fractional shares.

         12.12  Partial  Distribution  upon  Termination  of  Employment.  If  a
Participant's  employment  with the Affiliated  Employers is terminated and such
Participant  is deemed not to have  separated from service within the meaning of
Code Section 401(k)(2)(B)(i)(I), such Participant, in addition to the withdrawal
options  available  under  Article  XI,  shall be  entitled  to elect a lump sum
distribution  of the entire balance to the credit of his Account less the amount
credited to his Elective Employer Contribution subaccount.  The amounts credited
to his Elective  Employer  Contribution  subaccount may be distributed in a lump
sum distribution at such time permitted pursuant to Code Section 401(k)(2)(B)(i)
and Section  4.4(c)  hereof.  Such lump sum  distributions  shall  otherwise  be
subject to this Article XII.






                                  ARTICLE XIII
                           ADMINISTRATION OF THE PLAN
                           --------------------------

         13.1  Membership of Committee.  The Plan shall be  administered  by the
Committee, which shall consist of such individuals as may be appointed from time
to time by the Board of Directors or its  delegate.  The  Committee may select a
Secretary  (who may,  but need not,  be a member of the  Committee)  to keep its
records or to assist it in the discharge of its duties.

         13.2 Acceptance and Resignation. Any person appointed to be a member of
the  Committee  shall  signify his  acceptance in writing to the Chairman of the
Committee.  Any member of the  Committee  may resign by  delivering  his written
resignation to the Committee and such  resignation  shall become  effective upon
delivery or upon any later date specified therein.

         13.3  Transaction  of  Business.  A  majority  of  the  members  of the
Committee at the time in office shall constitute a quorum for the transaction of
business at any meeting.  Any  determination  or action of the  Committee may be
made or taken by a majority  of the members  present at any  meeting  thereof or
without a meeting  by a  resolution  or  written  memorandum  concurred  in by a
majority of the members then in office.

         13.4  Responsibilities  in General.  The Committee shall administer the
Plan and shall have the discretionary authority, power, and the duty to take all
actions and to make all decisions  necessary or proper to carry out the Plan and
to  control  and  manage  the  operation  and  administration  of the Plan.  The
Committee  shall  have the  discretion  to  interpret  the Plan,  including  any
ambiguities herein, and to determine the eligibility for benefits under the Plan
in its sole  discretion.  The  determination of the Committee as to any question
involving the general  administration  and  interpretation  of the Plan shall be
final,  conclusive,  and binding on all persons,  except as  otherwise  provided
herein  or by  law,  and  may be  relied  upon  by the  Company,  all  Employing
Companies,  the  Trustee,  the  Participants,   and  their  Beneficiaries.   Any
discretionary  actions to be taken under the Plan by the Committee  with respect
to Employees and  Participants  or with respect to benefits  shall be uniform in
their nature and applicable to all persons similarly situated.

         13.5 Committee as Named  Fiduciary.  For the purpose of compliance with
the provisions of ERISA, the Committee shall be deemed the  administrator of the
Plan as the term  "administrator"  is defined in ERISA,  and the Committee 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  Committee  may, in its
discretion,  allocate its responsibilities  under the Plan among its members and
may, in its discretion,  designate  persons (in writing or otherwise) other than
members of the  Committee to carry out such  responsibilities  of the  Committee
under the Plan as it may see fit.

         13.6 Rules for Plan Administration.  The Committee may make and enforce
rules and  regulations  for the  administration  of the Plan consistent with the
provisions  thereof and may  prescribe the use of such forms or procedures as it
shall deem appropriate for the administration of the Plan.

         13.7  Employment  of  Agents.  The  Committee  may  employ  independent
qualified  public  accountants,  as such term is  defined  in ERISA,  who may be
accountants to the Company and any Affiliated Employer, legal counsel who may be
counsel to the Company and any Affiliated Employer, other specialists, and other
persons as the Committee  deems  necessary or desirable in  connection  with the
administration of the Plan. The Committee and any person to whom it may delegate
any duty or power in connection with the administration of the Plan, the 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 independent qualified public accountant,
counsel, or other specialist,  or other person selected by the Committee,  or in
reliance upon any tables, evaluations,  certificates, opinions, or reports which
shall be furnished by any of them or by the Trustee.

         13.8  Co-Fiduciaries.  It  is  intended  that  to  the  maximum  extent
permitted by ERISA,  each person who is a fiduciary  (as that term is defined in
ERISA) with respect to the Plan shall be responsible  for the proper exercise of
his own powers, duties, responsibilities, and obligations under the Plan and the
Trust,  as shall  each  person  designated  by any  fiduciary  to carry  out any
fiduciary  responsibilities  with respect to the Plan or the Trust. 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.

         13.9  General  Records.  The  Committee  shall  maintain or cause to be
maintained an Account (and any separate  subaccount)  which accurately  reflects
the  interest of each  Participant,  as provided  for in Section  9.1, and shall
maintain or cause to be maintained  all  necessary  books of account and records
with respect to the  administration  of the Plan.  The  Committee  shall mail or
cause to be mailed to  Participants  reports to be furnished to  Participants in
accordance with the Plan or as may be required by ERISA.  Any notices,  reports,
or statements to be given, furnished,  made, or delivered to a Participant shall
be deemed duly given,  furnished,  made,  or  delivered  when  addressed  to the
Participant  and  delivered to the  Participant  in person or mailed by ordinary
mail to his address last  communicated  to the Committee (or its delegate) or of
his Employing Company.

         13.10 Liability of the Committee.  In administering the Plan, except as
may be prohibited by ERISA,  neither the Committee nor any person to whom it may
delegate any duty or power in connection  with  administering  the Plan shall be
liable  for any  action  or  failure  to act  except  for  its or his own  gross
negligence  or willful  misconduct;  nor for the payment of any amount under the
Plan;  nor for any mistake of judgment  made by him or on his behalf as a member
of the Committee;  nor for any action,  failure to act, or loss unless resulting
from his own  gross  negligence  or  willful  misconduct;  nor for the  neglect,
omission,  or wrongdoing of any other member of the Committee.  No member of the
Committee  shall be personally  liable under any contract,  agreement,  bond, or
other  instrument  made or  executed  by him or on his behalf as a member of the
Committee.

         13.11 Reimbursement of Expenses and Compensation of Committee.  Members
of the  Committee  shall be  reimbursed  by the  Company for  expenses  they may
individually  or  collectively  incur in the  performance of their duties.  Each
member of the  Committee  who is a  full-time  employee of the Company or of any
Employing  Company  shall serve  without  compensation  for his services as such
member;  each other member of the Committee shall receive such compensation,  if
any, for his services as the Board of Directors may fix from time to time.

         13.12  Expenses of Plan and Trust Fund.  The expenses of  establishment
and  administration  of the Plan and the Trust Fund,  including  all fees of the
Trustee,  auditors,  and counsel,  shall be paid by the Company or the Employing
Companies.  Notwithstanding  the foregoing,  to the extent provided in the Trust
Agreement,  certain  administrative  expenses  may be paid from the  Trust  Fund
either  directly  or  through  reimbursement  of the  Company  or the  Employing
Companies.  Any expenses  directly related to the investments of the Trust Fund,
such as stock transfer taxes, brokerage  commissions,  or other charges incurred
in the  acquisition or disposition of such  investments,  shall be paid from the
Trust  Fund (or from  the  particular  Investment  Fund to  which  such  fees or
expenses  relate) and shall be deemed to be part of the cost of such  securities
or deducted in computing the proceeds therefrom,  as the case may be. Investment
management  fees for the  Investment  Funds  shall be paid  from the  particular
Investment Fund to which they relate either directly or through reimbursement of
the  Company or the  Employing  Companies  unless the  Company or the  Employing
Companies do not elect to receive  reimbursement  for payment of such  expenses.
Taxes, if any, on any assets held or income received by the Trustee and transfer
taxes on the transfer of Common Stock from the Trustee to a  Participant  or his
Beneficiary shall be charged  appropriately against the Accounts of Participants
as the Committee shall  determine.  Any expenses paid by the Company pursuant to
Section  13.11 and this  section  shall be  subject  to  reimbursement  by other
Employing Companies of their proportionate shares of such expenses as determined
by the Committee.

         13.13  Responsibility  for Funding  Policy.  The  Committee  shall have
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.

         13.14 Management of Assets. The Committee shall not have responsibility
with  respect to control or  management  of the assets of the Plan.  The Trustee
shall have the sole  responsibility  for the administration of the assets of the
Plan as provided in the Trust Agreement, except to the extent that an investment
advisor  (who  qualifies  as an  Investment  Manager  as that term is defined in
ERISA) who may be appointed by the Committee shall have  responsibility  for the
management of the assets of the Plan, or some part thereof  (including powers to
acquire and dispose of the assets of the Plan, or some part thereof).

         13.15    Notice and Claims Procedures. Consistent with the requirements
of ERISA and the regulations thereunder of the Secretary of Labor from time to
time in effect, the Committee shall:

                  (a) provide  adequate  notice in writing to any Participant or
         Beneficiary  whose claim for  benefits  under the Plan has been denied,
         setting  forth  specific  reasons for such denial,  written in a manner
         calculated to be understood by such Participant or Beneficiary, and

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

         13.16 Bonding. Unless otherwise determined by the Board of Directors or
required by law, no member of the  Committee  shall be required to give any bond
or other security in any jurisdiction.

         13.17 Multiple Fiduciary Capacities. 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.

         13.18  Change  in  Administrative   Procedures.   Notwithstanding   any
provision in the Plan to the contrary, the Committee shall be authorized to take
whatever  actions  it  deems  necessary  or  appropriate  in its  discretion  to
implement administrative  procedures,  including, but not limited to, suspending
plan  participation  (to the extent permitted by applicable law,) and suspending
changes in  investment  directions  and fund  transfers,  even though  otherwise
permitted or required under the Plan.



                                   ARTICLE XIV
                               TRUSTEE OF THE PLAN
                               -------------------

         14.1 Trustee.  The Company has entered into a Trust  Agreement with the
Trustee to hold the funds  necessary  to provide the  benefits  set forth in the
Plan.  If the Board of  Directors  so  determines,  the Company may enter into a
Trust  Agreement  or  Trust  Agreements  with  additional  trustees.  Any  Trust
Agreement may be amended by the Company from time to time in accordance with its
terms.  Any Trust  Agreement shall provide,  among other things,  that all funds
received by the Trustee  thereunder will be held,  administered,  invested,  and
distributed  by the  Trustee,  and that no part of the  corpus  or income of the
Trust held by the Trustee  shall be used for or diverted to purposes  other than
for the exclusive  benefit of  Participants  or their  Beneficiaries,  except as
otherwise  provided in the Plan.  Any Trust  Agreement may also provide that the
investment  and  reinvestment  of the Trust  Fund,  or any part  thereof  may be
carried out in accordance with directions given to the Trustee by any Investment
Manager  or  Investment  Managers  (as that term is defined in ERISA) who may be
appointed by the Committee. The Board of Directors may remove any Trustee or any
successor  Trustee,  and any Trustee or any successor  Trustee may resign.  Upon
removal or  resignation  of a Trustee,  the Board of Directors  shall  appoint a
successor Trustee.

         14.2 Purchase of Common Stock. As soon as practicable  after receipt of
funds  applicable  to the purchase of Common Stock,  the Trustee shall  purchase
Common  Stock or cause Common  Stock to be  purchased.  Such Common Stock may be
purchased on the open market or by private purchase (including private purchases
directly from Southern Energy,  Inc.); provided that (a) no private purchase may
be made at any  price  greater  than the last  sale  price  or  highest  current
independent  bid price,  whichever  is higher,  for Common Stock on the New York
Stock  Exchange,  plus an  amount  equal to the  commission  payable  in a stock
exchange transaction; (b) if such private purchase shall be a purchase of Common
Stock  directly from  Southern  Energy,  Inc., no commission  shall be paid with
respect thereto unless such commission  satisfies the requirements of Prohibited
Transaction  Class Exemption 75-1; and (c) the Trustee may purchase Common Stock
directly from Southern Energy,  Inc. under the Southern Energy  Investment Plan,
as from time to time amended,  or under any other similar plan made available to
holders of record of shares of Common  Stock which may be in effect from time to
time, at the purchase  price  provided for in such plan.  Pending  investment of
funds in Common Stock, the Trustee may hold in cash, and may temporarily  invest
such funds in short-term United States obligations, other obligations guaranteed
by the United States  Government,  commercial paper, or certificates of deposit,
and if the Trustee so determines,  may transfer such funds to money market funds
utilized by the Trustee for qualified employee benefit trusts.

         14.3 Voting of Common Stock.  Before each annual or special  meeting of
shareholders of Southern Energy, Inc., there shall be sent to each Participant a
copy of the proxy  soliciting  material  for the meeting,  together  with a form
requesting instructions to the Trustee on how to vote the shares of Common Stock
credited  to such  Participant's  Account  as of the  record  date of the Common
Stock. Upon receipt of such instructions by the Trustee or its designated agent,
the Trustee shall vote such Common Stock as instructed by the Participant.  If a
Participant  does not provide the  Trustee or its  designated  agent with timely
voting instructions for the Trustee,  the Committee or its delegate shall direct
the Trustee how to vote such Participant's shares. The Committee or its delegate
shall also  direct the  Trustee  with  respect to voting  unallocated  shares of
Common Stock, if any.

         14.4 Voting of Other  Investment Fund Shares.  The voting of the shares
in any  Investment  Fund other than shares of Common  Stock shall be  determined
pursuant to Section 5 of the Trust Agreement. In the event certain shares in any
Investment  Fund are not  addressed  in  Section 5 of the Trust  Agreement,  the
Committee or its delegate shall direct the Trustee how to vote such shares.

         14.5     Uninvested  Amounts.  The  Trustee  may keep  uninvested  an
amount  of cash sufficient in its opinion to enable it to carry out the purposes
 of the Plan.

         14.6     Independent Accounting. The Board of  Directors  shall  select
a firm of  independent  public Accountants to examine and report annually on the
financial  position  and the results of operation of the Trust forming a part of
the Plan.





                                   ARTICLE XV
                      AMENDMENT AND TERMINATION OF THE PLAN
                      -------------------------------------

         15.1  Amendment of the Plan. The Plan may be amended or modified by the
Board of Directors pursuant to its written resolutions at any time and from time
to time; provided, however, that no such amendment or modification shall make it
possible  for any part of the  corpus or income of the Trust Fund to be used for
or diverted to purposes other than for the exclusive  benefit of Participants or
their  Beneficiaries  under the Plan,  including such part as is required to pay
taxes and  administration  expenses of the Plan. The Plan may also be amended or
modified by the Committee (a) if such amendment or modification does not involve
a  substantial  increase  in cost  to any  Employing  Company,  or (b) as may be
necessary,  proper,  or  desirable  in order to comply with laws or  regulations
enacted or  promulgated  by any federal or state  governmental  authority and to
maintain the  qualification  of the Plan under Sections 401(a) and 501(a) of the
Code and the applicable provisions of ERISA.

         No  amendment  to the  Plan  shall  have the  effect  of  decreasing  a
Participant's vested interest in his Account,  determined without regard to such
amendment,  as of the later of the date such amendment is adopted or the date it
becomes effective.  In addition, if the vesting schedule of the Plan is amended,
any  Participant who has completed at least three (3) Years of Service and whose
vested interest is at any time adversely affected by such amendment may elect to
have his vested interest  determined without regard to such amendment during the
election  period  defined under  Section  411(a)(10)  of the Code.  Finally,  no
amendment  shall  eliminate  an optional  form of benefit in  violation  of Code
Section 411(d)(6).

         15.2  Termination  of the Plan.  It is the  intention of the  Employing
Companies to continue  the Plan  indefinitely.  However,  the Board of Directors
pursuant to its written  resolutions  may at any time and for any reason suspend
or terminate the Plan or suspend or discontinue the making of  contributions  of
all Participants and of contributions by all Employing Companies.  Any Employing
Company  may, by action of its board of  directors  and approval of the Board of
Directors,  suspend or terminate the making of  contributions of Participants in
the employ of such  Employing  Company and of  contributions  by such  Employing
Company.

         In the event of termination of the Plan or partial  termination or upon
complete  discontinuance  of  contributions  under  the  Plan  by all  Employing
Companies  or by any one  Employing  Company,  the  amount to the  credit of the
Account of each  Participant  whose Employing  Company shall be affected by such
termination or discontinuance  shall be determined as of the next Valuation Date
and shall be  distributed to him or his  Beneficiary  thereafter at such time or
times and in such nondiscriminatory  manner as is determined by the Committee in
compliance  with the  restrictions  on  distributions  set forth in Code Section
401(k).

         15.3 Merger or  Consolidation of the Plan. The Plan shall not be merged
or consolidated with nor shall any assets or liabilities  thereof be transferred
to any other plan  unless each  Participant  of 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 prior to the merger, consolidation,  or transfer
(if the Plan had then terminated).






                                   ARTICLE XVI
                               GENERAL PROVISIONS
                               ------------------

         16.1 Plan Not an Employment  Contract.  The Plan shall not be deemed to
constitute a contract between an Affiliated Employer and any Employee, nor shall
anything  herein  contained  be  deemed  to give any  Employee  any  right to be
retained in the employ of an Employing Company or to interfere with the right of
an  Employing  Company to  discharge  any  Employee at any time and to treat him
without  regard to the  effect  which  such  treatment  might have upon him as a
Participant.

         16.2 No Right of Assignment or  Alienation.  Except as may be otherwise
permitted  or  required  by  law,  no  right  or  interest  in the  Plan  of any
Participant or Beneficiary  and no distribution or payment under the Plan to any
Participant  or  Beneficiary  shall be subject  in any  manner to  anticipation,
alienation,  sale,  transfer (except by death),  assignment (either at law or in
equity), pledge, encumbrance, charge, attachment,  garnishment, levy, execution,
or other legal or equitable process,  whether voluntary or involuntary,  and any
attempt to so anticipate,  alienate,  sell, transfer,  assign, pledge, encumber,
charge,  attach,  garnish,  levy,  or  execute  or  enforce  any other  legal or
equitable  process  against  the same shall be void,  nor shall any such  right,
interest,  distribution,  or  payment be in any way liable for or subject to the
debts, contracts,  liabilities,  engagements, or torts of any person entitled to
such  right,  interest,   distribution,   or  payment.  If  any  Participant  or
Beneficiary is adjudicated bankrupt or purports to anticipate,  alienate,  sell,
transfer,  assign,  pledge,  encumber,  or  charge  any  such  right,  interest,
distribution,  or payment, voluntarily or involuntarily,  or if any action shall
be taken which is in violation of the  provisions of the  immediately  preceding
sentence,  the  Committee  may hold or apply or cause to be held or applied such
right,  interest,  distribution,  or payment  or any part  thereof to or for the
benefit of such  Participant  or  Beneficiary in such manner as is in accordance
with  applicable  law.  In  addition,  a  Participant's  benefits  may be offset
pursuant to a judgment, order, or decree issued (or settlement agreement entered
into) if and to the extent that such  offset is  permissible  or required  under
Code Section 401(a)(13).

         Notwithstanding  the above,  the Committee and the 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 Committee shall establish  procedures for (a)
notifying  Participants 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.

         16.3 Payment to Minors and Others. If the Committee determines that any
person entitled to a distribution or payment from the Trust Fund is an infant or
incompetent or is unable to care for his affairs by reason of physical or mental
disability,  it may cause all distributions or payments  thereafter becoming due
to  such  person  to be made  to any  other  person  for  his  benefit,  without
responsibility  to follow the  application  of payments so made.  Payments  made
pursuant to this provision shall completely  discharge the Company, the Trustee,
and the Committee  with respect to the amounts so paid. No person shall have any
rights under the Plan with respect to the Trust Fund,  or against the Trustee or
any Employing Company, except as specifically provided herein.

         16.4  Source of  Benefits.  The Trust Fund  established  under the Plan
shall  be the  sole  source  of the  payments  or  distributions  to be  made in
accordance  with the Plan.  No person  shall have any rights under the Plan with
respect to the Trust  Fund,  or against the  Trustee or any  Employing  Company,
except as specifically provided herein.

         16.5 Unclaimed  Benefits.  If the Committee is unable,  within five (5)
years after any distribution becomes payable to a Participant or Beneficiary, to
make or direct payment to the person  entitled  thereto  because the identity or
whereabouts of such person cannot be ascertained, notwithstanding the mailing of
due notice to such person at his last known  address as indicated by the records
of  either  the  Committee  or his  Employing  Company,  then  such  benefit  or
distribution will be disposed of as follows:

                  (a)      If the  whereabouts of the  Participant is unknown to
         the Committee,  distribution  will be made to the Participant's
         Beneficiary or Beneficiaries.

                  Payment to such one or more persons shall completely discharge
         the Company, the Trustee, and the Committee with respect to the amounts
         so paid.

                  (b) If none of the  persons  described  in (a)  above,  can be
         located, then the benefit payable under the Plan shall be forfeited and
         shall be  applied to reduce  future  Employer  Matching  Contributions.
         Notwithstanding   the  foregoing   sentence,   such  benefit  shall  be
         reinstated if a claim is made by the Participant or Beneficiary for the
         forfeited benefit.

         16.6  Governing  Law. The provisions of the Plan and the Trust shall be
construed,  administered,  and enforced in accordance with the laws of the State
of  Georgia,  except to the extent  such laws are  preempted  by the laws of the
United States.






         IN WITNESS  WHEREOF,  the  Company  has  caused  this  Southern  Energy
Resources  Bargaining  Unit Employee  Savings Plan  effective as of December 19,
2000, to be executed this _______ day of December, 2000.


                                   SOUTHERN ENERGY RESOURCES, INC.

                                   By:__________________________________________

                                   Its:_________________________________________

ATTEST:

By:__________________________________________________

Its:_________________________________________________





                        APPENDIX A - EMPLOYING COMPANIES
                        --------------------------------

              The Employing Companies as of December 19, 2000 are:

                         Southern Energy Resources, Inc.
                       Southern Energy PJM Management, LLC






                         APPENDIX B - ELIGIBLE EMPLOYEES
                         -------------------------------

Subject to the  additional  requirements  of Section 2.19 of the Plan,  eligible
employees are as follows:

                Employees of Southern Energy PJM Management, LLC



                                   SCHEDULE A

                                 PEPCO EMPLOYEES

         Notwithstanding  any  provisions  of  this  Plan to the  contrary,  the
provisions of this Schedule A shall apply to members of Local Union #1900 of the
International Brotherhood of Electrical Workers who (i) were employed by Potomac
Electric Power Company ("Pepco") immediately preceding, and hired by the Company
or an Affiliated  Employer  immediately  following,  the  acquisition  of all or
substantially  all the assets of certain power  generating  facilities  owned by
Pepco (the  "Facilities")  (the  "Transferred  Employees")  or (ii) are hired by
Southern Energy PJM Management, LLC after the acquisition of the Facilities (the
"PJM  Employees")   (the  Transferred   Employees  and  the  PJM  Employees  are
collectively  referred to herein as the "Pepco Employees").  Notwithstanding the
foregoing,  the term "Transferred Employees" shall not include any Employee who,
as of the date of acquisition of the Facilities  (the "Pepco  Effective  Date"),
has given written notice to Pepco of his intent to retire from active employment
with Pepco, and who actually  retires under the terms of the General  Retirement
Plan for Employees of Potomac  Electric Power Company on or before  December 31,
2000; such Employees shall be deemed to be "PJM Employees" hereunder.

         A.1 Hours of Service.  For all purposes under the Plan, for Transferred
Employees  only,  Hours of Service shall  include all hours of service  credited
under the PEPCO  Retirement  Savings Plan for  Bargaining  Unit  Employees  (the
"Pepco Plan") to any Transferred Employee as of the Pepco Effective Date.

         A.2 Years of Service.  For all purposes under the Plan, for Transferred
Employees  only,  Years of Service shall  include all years of service  credited
under the Pepco Plan to any Transferred Employee as of the Pepco Effective Date.

         A.3      Eligible Employees.
                 
o                     Each  Transferred  Employee who was a  participant  in the
                      Pepco Plan on the Pepco  Effective  Date shall be eligible
                      to participate in the Plan as of the Pepco Effective Date.

o                     Each other Pepco  Employee,  except one who is  classified
                      (in the sole  discretion  of the Company,  pursuant to its
                      normal  practices)  as a  "Temporary  Employee,"  shall be
                      eligible   to   participate   in  the   Plan  as  soon  as
                      administratively   practicable   following   the  date  he
                      completes his initial Hour of Service.

         A.4      Rate of Elective Employer Contributions (Section 4.1).
                 
o        1% to 19% of Compensation







         A.5      Rate of Voluntary Participant Contributions (Section 4.6).
                 
o        1% to 19% of Compensation

         A.6      Rate of Employer Matching Contributions (Section 5.1).
                 
o Pepco  Employees  are  eligible to receive an Employer  Matching  Contribution
commencing upon participation. o The rate of Employer Matching Contributions for
Pepco Employees shall be equal to forty percent (40%) of Elective Employer
Contributions and Voluntary Participant Contributions during  each  payroll
period, but such Employer  Matching  Contributions  shall  not  exceed  six
percent (6%) of Compensation for such payroll period.  If, as  determined  as of
the  end of a Plan Year, a Pepco Employee received Employer Matching
Contributions of less than six  percent  (6%) of his  Compensation  for the Plan
Year because of  limitations  imposed on a payroll  period basis, the Employing
Company  may  make  an  additional Employer  Matching  Contribution on behalf of
such Pepco Employee,  not  to  exceed  six  percent (6%) of his Compensation for
the Plan Year.

         A.7 Vesting of Employer Matching  Contributions  (Section 10.2).  Pepco
Employees  shall be  one-hundred  percent  (100%) vested in the portion of their
Account attributable to Employer Matching Contributions.

         A.8  Acceptance  of  Trust-to-Trust  Transfer.  The Plan  may  accept a
trust-to-trust  transfer of an account from the Pepco Plan for each  Participant
who is a Pepco Employee and who elects on a form  acceptable to the Committee to
make such a transfer.  Such account shall be known as the  Participant's  "Pepco
Transferred  Account" and shall be subject to the  requirements of this Schedule
A.

o                     The portion of the Transferred Account attributable to the
                      Pre-Tax  Contribution  Account, as that term is defined in
                      the Pepco  Plan,  shall be  treated as  Elective  Employer
                      Contributions under this Plan.

o                     The portion of the Transferred Account attributable to the
                      After-Tax Contribution Account, as that term is defined in
                      the Pepco Plan, shall be treated as Voluntary  Participant
                      Contributions under this Plan.

o                     The   portion  of  the   Transferred   Account   which  is
                      attributable to the Matching Contribution Account, as that
                      term is  defined  in the Pepco  Plan,  shall be treated as
                      Employer  Matching  Contributions  under this Plan, except
                      the  Participant may direct the investment of such amounts
                      in accordance with Section 8.2 hereof, rather than Section
                      8.3 hereof and such Matching Contribution Account shall be
                      one-hundred percent (100%) vested.

o                     The   portion  of  the   Transferred   Account   which  is
                      attributable to the Rollover Contribution Account, as that
                      term is  defined  in the Pepco  Plan,  shall be treated as
                      Rollover Contributions under this Plan.

         A.9  In-Service  Withdrawals  of Employer  Matching  Contributions.  In
determining  the  ability of a  Participant  who is a  Transferred  Employee  to
withdraw Employer Matching Contributions under Section 11.1(a)(4) of the Plan, a
Participant shall be given credit for any participation in the Pepco Plan.

         A.10 Sunset of Transferred  Pepco Stock. Any Investment Fund containing
common  stock of  Pepco,  which is  transferred  to this  Plan  pursuant  to the
provisions  of Section 8.8,  will be  eliminated by the Committee as of the date
which is five (5) years  following the Pepco  Effective  Date.  Any Pepco common
stock which remains in a Pepco Employee's  Investment Fund on such date shall be
reinvested as determined by the Committee.

         A.11 Loans from Pepco Transferred  Accounts.  Any loans which were made
to Pepco  Employees  pursuant  to the terms of the Pepco Plan from funds under a
Transferred Account will be transferred to this Plan and will become loans under
this  Plan,  subject  to the  terms of  Section  11.7.  The  number  of loans so
transferred  shall not exceed  eight (8).  The  transfer of such loans,  and the
terms and conditions  thereof,  shall be made in accordance  with the procedures
established by the Committee.