<PAGE>
 
                                                                 Exhibit 10(n)-1

                                     PP&L, INC.

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


                               Amended and Restated
                            Effective as of January 1, 1998
<PAGE>
 
                                   PP&L, INC.

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                 AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1998

                               TABLE OF CONTENTS
                               -----------------
<TABLE>
<CAPTION>
 
ARTICLE                                                         PAGE
---------                                                       ----
<S>        <C>                                                  <C>
 
  1.       Purpose.............................................   
                                                               
  2.       Definitions.........................................   
                                                               
  3.       Entitlement to Benefits.............................   
 
  4.       Amount of Supplemental Executive Retirement Benefit.   
                                                              
  5.       Time of Payment.....................................   
                                                               
  6.       Method of Payment...................................   
 
  7.       Death Benefit.......................................   
                                                              
  8.       Administration......................................   
 
  9.       Miscellaneous ......................................   
 
  10.      Termination or Amendment............................   
 
  11.      Effective Date......................................   
 
           Appendix A..........................................   
</TABLE>
<PAGE>
 
                                   PP&L, INC.
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
                     --------------------------------------
                                        
    WHEREAS, PP&L, Inc. ("PP&L") adopted the PP&L, Inc. Supplemental Executive
Retirement Plan (the "Plan"), effective July 1, 1985, as amended and restated
from time to time, for certain of its employees; and

    WHEREAS, PP&L desires at this time to amend and restate the Plan;

    NOW, THEREFORE, effective as of January 1, 1998, the Plan is continued,
amended and restated as hereinafter set forth:

1 . Purpose. The purpose of this Supplemental Executive Retirement Plan is to
    provide certain executive officers of PP&L additional retirement income so
    that total retirement income for key officers is competitive with other
    employers and in order to facilitate early retirement from key positions
    carrying the most important responsibilities.
<PAGE>
 
2.   Definitions.

     (a)  "ACTUARIAL EQUIVALENT" means having or that which has equal actuarial
          value to the Supplemental Executive Retirement Benefit based on the

          (1)  For purposes of the annuity forms of benefit described in Article
               6, a Participant's SERB as calculated under Article 4 shall be
               converted to an optional annuity form of benefit by using the
               assumptions and factors described in Schedule A of the Retirement
               Plan.

          (2)  For purposes of the single sum form of benefit described in
               Article 6, the Participant's SERB as calculated under Article 4,
               shall be converted to a single sum by using the following
               factors:

               (A)  An interest rate equal to the immediate annuity rate that
                    would be used by the Pension Benefit Guaranty Corporation
                    for purposes of determining a lump sum distribution upon
                    plan termination, as in effect for the month in which the
                    Participant's benefit commencement date occurs.

               (B)  A mortality rate based on the 1983 GAM Unisex Table.

     (b)  "Affiliated Company" or "Affiliated Companies" shall mean any parent
          or subsidiaries of PP&L (or companies under common control with PP&L)
          which are members of the same controlled group of corporations (within
          the meaning of section 1563(a) of the Code) as PP&L.

     (c) "Board" means the Board of Directors of PP&L, Inc.

     (d) "Cause" for Participant's Termination of Employment by PP&L means:

          (1) and continued failure by Participant to substantially perform
              Participant's duties with PP&L or an Affiliated Company (other
              than any such failure resulting from Participant's incapacity due
              to physical or mental illness or, if applicable, any such actual
              or anticipated failure after the issuance of any "Notice of
              Termination for Good Reason" by the Participant pursuant to any
              severance agreement between Participant and PP&L or an Affiliated
              Company) after a written demand for substantial performance is
              delivered to Participant by the Board, which demand specifically
              identifies the manner in which the Board believes that Participant
              has not substantially performed Participant's duties, or

          (2) the willful engaging by Participant in conduct which is
              demonstrably and materially injurious to PP&L or an Affiliated
              Company, monetarily or otherwise.

          (3) For purposes of Subsections (1) and (2) of this definition, (A) no
              act, or failure to act, on Participant's part shall be deemed
              "willful" unless done, or omitted to be done, by Participant not
              in good faith and without reasonable belief that Participant's
              act, or failure to act, was in the best interest of PP&L or the
              Affiliated Company, and (B) in the event of a dispute concerning
              the application of this provision, no claim by PP&L or an
              Affiliated Company that Cause exists shall be given effect unless
              PP&L or the 
<PAGE>
 
              Affiliated Company establishes to the Board by clear and
              convincing evidence that Cause exists.

     (e) "CHANGE IN CONTROL" means the occurrence of any one of the following
events:

          (1) any change in the control of Resources of a nature that would be
              required to be reported in response to Item 1(a) of Form 8-K under
              the Exchange Act;

          (2) during any period of not more than two consecutive years,
              individuals who at the beginning of such period constitute the
              Board of Directors of Resources and any new director (other than a
              director designated by a Person who has entered into an agreement
              with Resources to effect a transaction described in Paragraph (1),
              (3) or (4) of this definition) whose election by the Board of
              Directors of Resources or nomination for election by the
              shareowners of Resources was approved or recommended by a vote of
              at least two-thirds (2/3) of the directors then still in office
              who either were directors at the beginning of the period or whose
              election or nomination for election was previously so approved or
              recommended, cease for any reason to constitute at least a
              majority thereof;

          (3) any Person becomes the beneficial owner (within the meaning of
              Rule 13d-3 under the Exchange Act), directly or indirectly, of
              securities of Resources representing 20% or more of the combined
              voting power of Resources' then outstanding securities entitled to
              vote generally in the election of directors;

          (4) the approval by the shareowners of Resources of any merger or
              consolidation of Resources with any other corporation or a plan of
              complete liquidation of Resources or the sale or other disposition
              of all or substantially all of the assets of Resources to any
              other person or persons unless, after giving effect thereto, (A)
              holders of Resources' then outstanding securities entitled to vote
              generally in the election of directors will own a majority of the
              outstanding stock entitled to vote generally in the election of
              directors of the continuing, surviving or transferee corporation
              or any parent (within the meaning of Rule 12b-2 under the Exchange
              Act) thereof, and (B) the incumbent members of the Board of
              Directors of Resources as constituted immediately prior thereto
              shall constitute at least a majority of the directors of the
              continuing, surviving or transferee corporation and any parent
              thereof; or

          (5) the Board of Directors of Resources adopts a resolution to the
              effect that a "Change in Control" has occurred or is anticipated
              to occur.

(f)  "CHANGE IN CONTROL PARTICIPANT" means the following:

          (1) a Participant whose Termination of Employment occurs after a
              Change in Control and within 36 months after the month in which
              the Change in Control occurs, unless such Termination of
              Employment is (A) by PP&L or an Affiliated Company for Cause, (B)
              by reason of the Participant's death, Disability or Retirement, or
              (C) by the Participant without Good Reason, or

          (2) a Participant whose Termination of Employment occurs prior to a
              Change in Control (whether or not a Change in Control ever occurs)
              (A) at the request or direction of a 
<PAGE>
 
              Person who has entered into an agreement with Resources the
              consummation of which would constitute a Change in Control, or (B)
              at the Participant's initiative for Good Reason if the
              circumstance or event which constitutes Good Reason occurs at the
              direction of such Person or (C) the Participant's Termination of
              Employment is by PP&L or an Affiliated Company without Cause or is
              by the Participant for Good Reason, and such Termination of
              Employment or the circumstance or event which constitutes Good
              Reason is otherwise in connection with or in anticipation of a
              Change in Control (whether or not a Change in Control occurs). For
              purposes of any determination regarding the applicability of the
              immediately preceding sentence, any position taken by the
              Participant shall be presumed to be correct unless PP&L
              establishes to the Board by clear and convincing evidence that
              such position is not correct.

     (g)  "DISABILITY" shall be deemed the reason for a Participant's
          Termination of Employment by PP&L or an Affiliated Company, if, (1) as
          a result of the Participant's incapacity due to physical or mental
          illness, the Participant shall have been absent from the full-time
          performance of the Participant's duties with PP&L and all Affiliated
          Companies for a period of six consecutive months, and (2), if
          applicable, PP&L shall have given the Participant any "Notice of
          Termination for Disability" required by any severance agreement
          between the Participant and PP&L or an Affiliated Company, and, within
          thirty days after such "Notice of Termination," if any, is given, the
          Participant shall not have returned to the full-time performance of
          the Participant's duties.

     (h)  "DISPLACED PARTICIPANT" means a Participant who has a Termination of
          Employment after completing one or more Years of Vesting Service, and
          who qualifies for benefits pursuant to PP&L's Displaced Managers
          Policy (SPM 606).

     (i)  "EARLY RETIREMENT REDUCTION FACTOR" means the percentage that appears
          adjacent to the Participant's age below determined under the
          appropriate column.

          (1) Column (1) shall apply to any Retiree.

          (2) Column (2) shall apply to any Terminated Vested Participant.

          (3) Column (3) shall apply to any Change in Control Participant.
              Notwithstanding anything in this Section to the contrary, a
              Participant who meets the definition of a Retiree, a Terminated
              Vested Participant and/or a Displaced Participant, who also meets
              the definition of a Change in Control Participant, shall be
              treated as a Change in Control Participant for purposes of this
              Section.

          (4) Column (4) shall apply to any Displaced Participant.
              Notwithstanding Subsection (1) or (2), a Participant who meets the
              definition of a Retiree or a Terminated Vested Participant, but
              not the definition of a Change in Control Participant, who also
              meets   the definition of a Displaced Participant, shall be
              treated as a Displaced Participant for purposes of this Section.
<PAGE>
 
                 Percentage of Benefit Received
                 ------------------------------
<TABLE>
<CAPTION>
 
<S>                     <C>       <C>          <C>           <C>
                          (1)        (2)           (3)           (4)
       Age When                                  Change in
       Benefits                   Terminated       Control   Displaced
        Start           Retiree     Vested     Participant   Participant
----------------------  -------   ----------           ---   -----------
 
          60                100          100           100           100
          59                 95           90            95           100
          58                 90           80            90           100
          57                 85           70            85           100
          56                 80           60            80           100
          55                 75           50            75           100
          54                 70          N/A            70           100
          53                 65          N/A            65           100
          52                 60          N/A            60           100
          51                 55          N/A            55           100
          50                 50          N/A            50           100
          49 or younger N/A              N/A           N/A           N/A
</TABLE>
     (j)  "EBPB" means the Employee Benefit Plan Board, the members of which are
          appointed by the Board.

     (k)  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
          from time to time.

     (I)  "Good Reason" for Termination of Employment by a Participant means the
          occurrence (without the Participant's express written consent) after a
          Change in Control, or prior to a Change in Control under the
          circumstances described in paragraphs (B) and (C) of Section (2) of
          the definition of "Change in Control Participant" (treating all
          references in paragraphs (1) through (7) below to a "Change in
          Control" as references to a "Potential Change in Control"), of any one
          of the following acts by PP&L or an Affiliated Company, or failures by
          PP&L or an Affiliated Company to act:

          (1) the assignment to the Participant of any duties inconsistent with
              the Participant's status as an executive officer or key employee
              of PP&L or a substantial adverse alteration in the nature or
              status of the Participant's responsibilities from those in effect
              immediately prior to a Change in Control;

          (2) a reduction by PP&L or an Affiliated Company of the Participant's
              annual base salary as in effect on the effective date of this
              amended and restated Plan, or as the same may be increased from
              time to time, except for across-the-board decreases uniformly
              affecting management, key employees and salaried employees of PP&L
              or the Affiliated Company, or the business unit in which
              Participant is then employed,

          (3) the relocation of the Participant's principal work location to a
              location more than 30 miles from the vicinity of such work
              location immediately prior to a Change in Control or PP&L's or an
              Affiliated Company's requiring the Participant to be based
              anywhere other than such principal place of employment (or
              permitted relocation thereof) except 
<PAGE>
 
              for required travel on PP&L's or an Affiliated Company's business
              to an extent substantially consistent with the Participant's
              present business travel obligations;

          (4) the failure by PP&L or an Affiliated Company to pay to the
              Participant any portion of the Participant's current compensation
              or to pay to the Participant any portion of an installment of
              deferred compensation under any deferred compensation program of
              PP&L or an Affiliated Company, within seven days of the date such
              compensation is due, except for across-the-board compensation
              deferrals uniformly affecting management, key employees and
              salaried employees of PP&L or the Affiliated Company, or the
              business unit in which Participant is then employed;

          (5) the failure by PP&L or an Affiliated Company to continue in effect
              any compensation or benefit plan in which the Participant
              participates immediately prior to a Change in Control which is
              material to the Participant's total compensation, or any
              substitute plans adopted prior to a Change in Control, unless an
              equitable arrangement (embodied in an ongoing substitute or
              alternative plan) has been made with respect to such plan, or the
              failure by PP&L or an Affiliated Company to continue the
              Participant's participation therein (or in such substitute or
              alternative plan) on a basis not materially less favorable, both
              in terms of the amount or timing of payment of benefits provided
              and the level of the Participant's participation relative to other
              participants, as existed immediately prior to the Change in
              Control, or

          (6) the failure by PP&L or an Affiliated Company to continue to
              provide the Participant with benefits substantially similar to
              those enjoyed by the Participant under any of PP&L's pension,
              savings, life insurance, medical, health and accident, or
              disability plans in which the Participant was participating
              immediately prior to a Change in Control, except for across-the-
              board changes to any such plans uniformly affecting all
              participants in such plans, the taking of any other action by PP&L
              or an Affiliated Company which would directly or indirectly
              materially reduce any of such benefits or deprive the Participant
              of any material fringe benefit enjoyed by the Participant at the
              time of the Change in Control, or the failure by PP&L or an
              Affiliated Company to provide the Participant with the number of
              paid vacation days to which the Participant is entitled on the
              basis of years of service with PP&L or an Affiliated Company in
              accordance with PP&L's normal vacation policy at the time of the
              Change in Control; or

          (7) any purported termination of the Participant's employment which is
              not effected pursuant to any "Notice of Termination" required by
              any severance agreement between the Participant and PP&L or an
              Affiliated Company.

              The Participant's right to terminate his or her employment with
              PP&L for Good Reason shall not be affected by the Participant's
              incapacity due to physical or mental illness. The Participant's
              continued employment shall not constitute consent to, or a waiver
              of rights with respect to, any act or failure to act constituting
              Good Reason hereunder.

              For purposes of any determination regarding the existence of Good
              Reason, any claim by the Participant that Good Reason exists shall
              be presumed correct unless 
<PAGE>
 
              PP&L establishes to the Board by clear and convincing evidence
              that Good Reason does exist.

     (m)  "OFFICERS DEFERRED COMPENSATION PLAN" means the PP&L Officers Deferred
          Compensation Plan, as amended from time to time.

     (n)  "PARTICIPANT" means an eligible officer or former officer of PP&L
          entitled to receive benefits under Article 3 of this Plan.

     (o)  "PERSON" shall have the meaning given in section 3(a)(9) of the
          Exchange Act, as modified and used in sections 13(d) and 14(d)
          thereof, however, a Person shall not include (1) Resources or any of
          its subsidiaries, (2) a trustee or other fiduciary holding securities
          under an employee benefit plan of Resources or any of its
          subsidiaries, (3) an underwriter temporarily holding securities
          pursuant to an offering of such securities, or (4) a corporation
          owned, directly or indirectly, by the shareowners of Resources in
          substantially the same proportions as their ownership of stock of
          Resources.

     (p)  "PLAN" means this Supplemental Executive Retirement Plan, as amended
          from time to time.

     (q)  "POTENTIAL CHANGE IN CONTROL" shall be deemed to have occurred if the
          conditions set forth in any one of the following paragraphs shall have
          been satisfied:

          (1) Resources enters into an agreement, the consummation of which
              would result in the occurrence of a Change in Control;

          (2) any Person publicly announces an intention to take or to consider
              taking actions which if consummated would constitute a Change in
              Control;

          (3) any Person is or becomes the beneficial owner (within the meaning
              of Rule 13d-3 under the Exchange Act), directly or indirectly, of
              securities of Resources representing 5% or more of the combined
              voting power of Resources' then outstanding securities entitled to
              vote generally in the election of directors; or

          (4) the Board of Resources adopts a resolution to the effect that, for
              purposes of this Plan, a Potential Change in Control has occurred.

     (r)  "PP&L" means PP&L, Inc.

     (s)  "Prior Plan" means any defined benefit plan, as defined in section
          3(35) of the Employee Retirement Income Security Act of 1974, as
          amended, which at any time satisfies the applicable requirements of
          section 401 (a) of the Internal Revenue Code of 1986, as amended,
          provided that (1) such plan has a sponsor other than PP&L, and (2)
          Participant was a participant in such plan prior to employment with
          PP&L.

     (t)  "Projected Years of Service" means the number of full or partial
          twelve-month periods beginning on the date on which Participant
          attains the age of 30 and ending on the date Participant ceases to be
          employed by PP&L.

     (u)  "Resources" shall mean PP&L Resources, Inc.
<PAGE>
 
     (v)  "Retiree" means a Participant who has a Termination of Employment
          after:

          (1) attaining age 55 and completing at least 10 Years of Service, or

          (2) attaining age 60, or

          (3) attaining age 50, completing at least 10 Years of Service, and
              whom the Compensation and Corporate Governance Committee of the
              Board, in its sole discretion, determines is entitled to an
              immediately payable SERB.

     (w)  "Retirement" shall be deemed the reason for a Participant's
          Termination of Employment if such employment is terminated in
          accordance with PP&L's retirement policy, including early retirement,
          generally appliG6619 to its salaried employees.

     (x)  "Retirement Plan" means the PP&L Retirement Plan, as amended from time
          to time.

     (y)  "SERB" means the Supplemental Executive Retirement Benefit payable
          under this Plan calculated under Article 4.

     (z)  "Supplemental Final Average Earnings" means the following:

          (1) Supplemental Final Average Earnings means twelve times the average
              of a Participant's "compensation" as defined in Paragraphs (A)
              through (C) below, from PP&L and/or an Affiliated Company, for the
              60 full consecutive months in the final 120 (or fewer) full
              consecutive months during which he is employed by PP&L and/or an
              Affiliated Company. For this purpose, non-consecutive months
              interrupted by periods in which the Participant receives no
              "compensation" shall be treated as consecutive. For purposes of
              this Section, "compensation" shall include the following:

              (A) the Participant's base salary from PP&L and/or any Affiliated
                  Company prior to any deferrals to the Officers Deferred
                  Compensation Plan or any other nonqualified deferred
                  compensation plan of an Affiliated Company or any Internal
                  Revenue Code section 401(k) plan by which Participant is
                  covered, plus

              (B) the value of any cash grants attributable to any month used in
                  the average, awarded to Participant pursuant to the executive
                  incentive awards program initially approved by the Board on
                  October 25, 1989 or any similar program maintained by an
                  Affiliated Company, plus

              (C) with respect only to Participants who were officers in
                  positions in PP&L Salary Groups I through IV on December 31,
                  1997, the value of any Restricted Stock (including any
                  dividends distributed on Restricted Stock during the
                  Restriction Period) granted to Participant under the Incentive
                  Compensation Plan attributable to any month prior to the dates
                  set forth in (1) and (11) below.

                  (I)  For purposes of the benefit formula in Subsection
                       4(b)(1), each month prior to January 1, 1998.
<PAGE>
 
                  (II) For purposes of the benefit formula in Subsection
                       4(b)(2), each month prior to January 1, 2002.

          (2) For the purposes of determining the Participant's "compensation"
              under Subsection (1) of this definition, the EBP13 will determine:

              (A) the value of any Restricted Stock under the Incentive
                  Compensation Plan as of the Restricted Stock's Date of Grant
                  (as defined by the Incentive Compensation Plan) and prorate
                  such value over the year for which the Restricted Stock was
                  granted;

              (B) the amount of any dividends distributed on Restricted Stock
                  during the Restriction Period and prorate such amount over the
                  period for which such dividends are paid; and

              (C) the amount of any cash grant awarded under the Participant
                  incentive awards program and prorate such amount over the year
                  for which the award was granted.

          (3) The Supplemental Final Average Earnings of a Displaced Participant
              who has less than 60 full consecutive months of employment shall
              be a reduced amount, equal to the difference of (A) minus (B),
              below.

              (A) (I) His total earnings as determined under Subsection (1) of
                      this definition for his entire period of employment with
                      PP&L and Affiliated Companies, divided by

                 (II) the number of years the Participant was employed by PP&L
                      and Affiliated Companies, including any fraction of a full
                      year thereof, calculated by dividing the total number of
                      full consecutive months of employment by 12.

              (B) (I) The amount determined in Paragraph (3)(A) immediately
                      above, multiplied by

                 (II) the Reduction Factor in Appendix A which corresponds with
                      the Participant's total number of full consecutive months
                      of employment with PP&L and Affiliated Companies.

     (aa) "Terminated Vested Participant" means a Participant:

          (1) who has a Termination of Employment after attaining age 50 but not
              age 55, and completing at least 10 Years of Service, and

          (2) whom the Board, in its sole discretion, does not determine is
              entitled to an immediately payable SERB.

     (bb) "Termination of Employment" means the Participant's termination of
          employment with PP&L and all Affiliated Companies.
<PAGE>
 
     (cc) "Years of Service" means the number of full and partial years used to
          calculate Participant's accrued benefit under the Retirement Plan, but
          (1) excluding years prior to Participant's attainment of age 30, and
          (2) including service with any Affiliated Company prior to the
          Participant's becoming an officer of PP&L, provided such service would
          otherwise be counted under the Retirement Plan, but excluding any such
          service with an Affiliated Company performed before the Affiliated
          Company became an Affiliated Company.

     (dd) "Year(s) of Vesting Service" means the number of full years used to
          calculate Participant's vested interest in his accrued benefit under
          the Retirement Plan, but excluding any such service with an Affiliated
          Company performed before the Affiliated Company became an Affiliated
          Company.
<PAGE>
 
3.   ENTITLEMENT TO BENEFITS.

     (a)  Any officer of PP&L who is in a position in PP&L Salary Group I
          through IV immediately prior to his Termination of Employment or the
          date of his transfer to an Affiliated Company shall be entitled to a
          SERB benefit if and only if he is either:

          (1) a Retiree,

          (2) a Terminated Vested Participant,

          (3) a Change in Control Participant, or

          (4) a Displaced Participant.

     (b)  Notwithstanding Section 3(a), any officer of PP&L who is in a position
          in PP&L Salary Group I through IV immediately prior to his Termination
          of Employment or the date of his transfer to an Affiliated Company and
          who terminates employment with PP&L on account of his death shall be
          entitled to the death benefit in Article 7 in lieu of any other
          benefit under the Plan.

     (c)  Notwithstanding Section 3(a) or (b), any Participant otherwise
          eligible for benefits shall forfeit any and all benefits under the
          Plan if such Participant's Termination of Employment is by PP&L or an
          Affiliated Company for Cause.

     (d)  All officers who are eligible for benefits under Section 3(a) and who
          are entitled to annual benefits of at least $44,000 in the aggregate
          from all PP&L and Affiliated Company-sponsored pension, profit-
          sharing, savings or deferred compensation plans, shall terminate their
          employment with PP&L and all Affiliated Companies no later than the
          first day of the month following attainment of age 65, unless PP&L or
          Affiliated Company requests that employment be extended for up to one
          year. In such event, Participant must retire at the end of the
          extension, unless PP&L or Affiliated Company requests additional
          extensions, at the end of which Participant must retire. Any
          Participant requested to serve beyond the mandatory retirement date
          may decline to do so without affecting his benefit status under this
          Plan or any other PP&L or Affiliated Company benefit program. Failure
          to accept benefits provided for in this Plan shall not affect the
          requirements of this paragraph.
<PAGE>
 
4.   AMOUNT OF SUPPLEMENTAL EXECUTIVE RETIREMENT BENEFIT.

     (a)  A Participant entitled to benefits under Article 3 will be paid a SERB
          equal to an annual amount payable for the life of Participant
          calculated pursuant to Sections (b) through (f) below:

     (b) The amount calculated under Subsection (1) and/or (2), as appropriate:

          (1)  The sum of (A) plus (B)-.

               (A)  2.0% of Participant's Supplemental Final Average Earnings
                    times his Years of Service up to 20, plus

               (B)  1.5% of Participant's Supplemental Final Average Earnings
                    times his Years of Service in excess of 20 but not in excess
                    of 30.

          (2)  With respect only to Participants who were officers in positions
               in PP&L Salary Groups I through IV on December 31, 1997:

               (A)  the benefit determined under Subsection (4)(b)(1) shall (1)
                    be calculated using Projected Years of Service instead of
                    Years of Service, and (11) be reduced by the annual amount
                    payable to Participant from a Prior Plan;

               (B)  such Participant's SERB shall not be less than the greater
                    of (1) or (11) below:

                    (I)  (i) 2.7% of Participant's Supplemental Final Average
                         Earnings calculated as of the earlier of December 31,
                         2001 or the date Participant terminates employment
                         times his Years of Service up to 20, plus (ii) 1.0% of
                         Participant's Supplemental Final Average Earnings
                         calculated as of the earlier of December 31, 2001 or
                         the date Participant terminates employment, times his
                         Years of Service in excess of 20 but not more than 30
                         less (iii) the annual amount payable as the maximum
                         primary Social Security benefit payable to an
                         individual aged 65 in the year of Participant's
                         retirement whether or not received by Participant.

                    (II) (i) 2.7% of Participant's Supplemental Final Average
                         Earnings calculated as of the earlier of December 31,
                         2001 or the date Participant terminates employment,
                         times his Projected Years of Service up to 20, plus
                         (ii) 1.0% of Participant's Supplemental Final Average
                         Earnings calculated as of the earlier of December 31,
                         2001 or the date Participant terminates employment,
                         times his Projected Years of Service in excess of 20
                         but not more than 30, less (iii) the annual amount
                         payable to Participant from a Prior Plan, less (iv) the
                         annual amount payable as the maximum primary Social
                         Security benefit payable to an individual aged 65 in
                         the year of Participant's retirement whether or not
                         received by Participant
<PAGE>
 
     (c)  The amount calculated under Section (b) shall be multiplied by the
          applicable Early Retirement Reduction Factor,

     (d)  With respect to all Participants, the amount calculated under Sections
          (b) and (c) shall be reduced by the following amounts, to the extent
          such amounts are accrued during periods for which the Participant is
          credited with Years of Service or Projected Years of Service under
          this Plan:

          (1)  The Participant's vested accrued benefit under the Retirement
               Plan (but not including any temporary supplemental amounts
               payable under Section 5.3(b) of the Retirement Plan), (A)
               expressed as a single life annuity, and (B) expressed as a
               benefit payable at the same time as Participant's SERB, except
               that in the event Participant commences benefits under this Plan
               prior to commencing benefits under the Retirement Plan, the
               reduction will be made as if Participant had commenced benefits
               under the Retirement Plan at the later of age 55 or commencement
               of benefits under this Plan, based on the ea0y retirement
               factors, and interest and mortality assumptions used in the
               Retirement Plan. The amount of the reduction will not thereafter
               be changed upon Participant's actual commencement of benefits
               under the Retirement Plan.

               For purposes of this Subsection (d)(1), the term "Retirement
               Plan" shall include any successor plan.

          (2)  Supplemental payments to Participant under section 7(a) of the
               Officers Deferred Compensation Plan as if Participant had chosen
               a single life annuity under such Plan payable at the same time as
               Participant's SERB.

          (3)  The Participant's vested accrued benefit under any other
               nonqualified defined benefit plan maintained by PP&L, expressed
               as a single life annuity payable at the same time as
               Participant's SERB, based on the early retirement factors and
               interest and mortality rates used in such plan.

     (e)  With respect to those Participants who have service with an Affiliated
          Company,

          (1)  The amount calculated under Sections (b), (c) and (d) shall be
               reduced by the following:

               (A)  The participant's vested accrued benefit under the Pension
                    Plan for Employees of Penn Fuel Gas, Inc. and North Penn Gas
                    Company, and/or the Pennsylvania Mines Corporation
                    Retirement Plan, determined as follows:

                    (I)  to the extent accrued during periods for which the
                         Participant is credited with Years of Service or
                         Projected Years of Service under this Plan, and

                    (II) expressed as a single life annuity, and

                   (III) expressed as a benefit payable at the same time as
                         Participant's SERB, except that in the event
                         Participant commences benefits under 
<PAGE>
 
                         this Plan prior to commencing benefits under such other
                         plan, the reduction will be made as if Participant had
                         commenced benefits under such other plan at the later
                         of such plan's earliest retirement age or commencement
                         of benefits under this Plan. The amount of the
                         reduction will not thereafter be changed upon
                         Participant's actual commencement of benefits under
                         such plan, and

                    (IV) based on the early retirement factors and interest and
                         mortality rates used in such other plan.

          (B)  The Participant's vested account under the PP&L Resources
               Subsidiary Savings Plan and the H.T. Lyons, Inc. 401(k) Plan, and
               their successors, determined as follows:

                    (I)  based on contributions other than the Participant's own
                         elective deferrals or employee contributions and
                         earnings thereon.

                    (II) to the extent attributable to contributions made during
                         periods for which these Participant is credited with
                         Years of Service or Projected Years of Service under
                         this Plan,

                   (III) such account valued as of the date Participant's SERB
                         benefit commences to be paid, but including any amounts
                         distributed to or on behalf of Participant,

                    (IV) such account converted to a benefit expressed as a
                         single life annuity for Participant's lifetime,
                         commencing at the same time as Participant's SERB,
                         based on the 30-year U.S. Treasury bond rate as of the
                         month preceding the month SERB payments commence, and
                         the 1983 Group Annuity Mortality Table (unisex):

          (C)  The Participant's employer-derived benefit under any taxqualified
               plan not listed in Paragraph (A) or (B) of this Subsection
               5(e)(1) of an Affiliated Company who becomes an Affiliated
               Company after the effective date of this amended and restated
               Plan, to the extent that such plan is the primary tax-qualified
               retirement plan of such Affiliated Company, and such benefit is
               based on service counted under this Plan. If such plan is a
               defined benefit plan, the offset shall be calculated in a manner
               similar to that described in Paragraph (A) of this Subsection
               5(e)(1). If such plan is a defined contribution plan, the offset
               shall be calculated in a manner similar to that described in
               Paragraph (B) of this Subsection 5(e)(1).

          (D)  The Participant's vested accrued benefit under any nonqualified
               defined benefit plan maintained by an Affiliated Company that was
               accrued prior to becoming an employee of PP&L, expressed as a
               single life annuity payable at the same time as Participant's
               SERB.

          (2)  The best data available will be used to determine the amounts to
               be offset under this Section (e). The EBPB has the absolute,
               discretionary power to make reasonable approximations and
               estimates to determine the value and amount of such offset
<PAGE>
 
               amounts, applied uniformly to all similarly situated
               Participants.. If reasonable approximations and estimates of such
               amounts are necessary, the EBPB will so inform the Participant. A
               Participant may elect to have his SERB calculated without regard
               to the offsets described in this Section (e) with respect to
               contributions made to such plans and/or benefits accrued under
               such plans prior to the date the Participant first becomes
               employed by PP&L, in which case his Years of Service and
               Projected Years of Service shall not include service before the
               date the Participant W becomes employed by PP&L.

          (3)  The amount calculated under Section (b) of this Article with
               respect to a Participant who has ceased to be an officer of PP&L
               by reason of a transfer to an Affiliated Company shall be
               calculated on the basis of his Years of Service and/or Projected
               Years of Service as of the date of his transfer, and on the basis
               of his Supplemental Final Average Earnings and his Years of
               Vesting Service as of the date of his Termination of Employment.

     (f)  In the event that a Participant's benefits under any plan to which
          Section (d) or (e) of this Article refers or under a Prior Plan are
          subject in whole or in part to a domestic relations order, SERB
          payments shall be calculated and paid without regard to such order.
<PAGE>
 
5.   TIME OF PAYMENT.

     A Participant who is eligible for benefits under Article 3 shall start
     receiving SERB payments on the date set forth below.

     (a)  A Retiree shall receive benefits as soon as administratively
          practicable following his Termination of Employment.

     (b)  A Terminated Vested Participant shall receive benefits as follows:

          (1)  If he has elected a single sum form of benefit under Article 6,
               such single sum shall be paid as soon as administratively
               practicable following his Termination of Employment.

          (2)  If he has elected an annuity form of benefit under Article 6,
               such annuity form shall start to be paid as soon as
               administratively practicable following his attainment of age 55;
               provided that if he also meets the definition of a Change in
               Control Participant or a Displaced Participant, such annuity form
               shall start to be paid as soon as administratively practicable
               following the later of age 50 or his Termination of Employment.

     (c)  A Change in Control Participant or a Displaced Participant shall
     receive benefits as follows:

          (1)  If he has elected a single sum form of benefit under Article 6,
               such single sum shall be paid as soon as administratively
               practicable following his Termination of Employment

          (2)  If he has elected an annuity form of benefit under Article 6,
               such annuity form shall start to be paid as soon as
               adminisbvffive4y practicable following the later of his
               attainment of age 50 or his Termination of Employment.

     (d)  In the event that Resources disputes to its shareowners as a dividend
          a sufficient number of shares of PP&L or an Affiliated Company, on a
          pro rata basis, in accordance with their Resources equity ownership,
          or in the event of the sale of up to 25% of the securities of PP&L or
          an Affiliated Company in an initial public offering of securities
          registered under the Securities Act of 1933, such distribution or sale
          of shares resulting in a Spin-Off Company (the "Spun-Off Company"),
          with the effect that the Spun-Off Company no longer meets the
          definition of PP&L or an Affiliated Company, and in connection with
          such distribution or sale, a Participant becomes an employee of the
          Spun-Off Company, the payment of any SERB to which Participant (or his
          beneficiary) is entitled under the Plan shall be made or shall
          commence to be made no earlier than at such time as the Participant
          (or his beneficiary) is eligible to commence to receive to a
          distribution (either immediate or deferred) under the Retirement Plan
          or any successor plan.
<PAGE>
 
6.  METHOD OF PAYMENT.

     (a)  A Participant who is eligible to receive benefits under the Retirement
          Plan and who elects to receive such benefits at the time SERB payments
          begin may elect to have his SERB paid in one of the following forms of
          benefit, each of which shall be the Actuarial Equivalent of his SERB
          benefit:

          (1)  the form of annuity payment in which his Retirement Plan benefits
               are to be paid, (provided, however, if any monthly payment would
               be 100 dollars or less, the EBPB, in its discretion, may elect to
               make such payments in such installments as the EBPB may determine
               or in a single sum payment), or

          (2)  a single sum

     (b)  A Participant who is not eligible to receive benefits under the
          Retirement Plan or who has elected not to receive such benefits under
          the Retirement Plan at the time SERB payments begin, may elect one of
          the following forms of benefit, which shall be the Actuarial
          Equivalent of his SERB benefit, provided, however, that if he elects
          an annuity form under Paragraph (1), (2) or (3) below, and if any
          monthly payment would be 100 dollars or less, the EBPB, in its
          discretion, may elect to make such payments in such installments as
          the EBPB may determine, or in a single sum payment:

          (1)  a single life annuity with equal monthly installments payable to
               the Participant for his lifetime; or

          (2)  a joint and survivor annuity with the Participant's designated
               beneficiary, payable in monthly installments to the Participant
               for his lifetime and with a specified percentage of the amount of
               such monthly installment payable after the death of the
               Participant to the designated beneficiary of such Participant, if
               then living, for the life of such designated beneficiary; or

          (3)  a single life annuity payable in equal monthly installments to
               the Participant for his lifetime, with 60, 120 or 180 monthly
               payments guaranteed, or

          (4)  a single sum.

     (c)  A Participant may elect a form of benefit hereunder by filing written
          notice with the EBPB at anytime at least 12 months prior to the first
          day of the calendar month for which a SERB is first payable to
          Participant. If a Participant described in Section (a) of this Article
          fails to elect a form of benefit within the prescribed time period,
          the benefit shall be paid in the form in which such Participant's
          Retirement Plan benefits are paid. If a Participant described in
          Section (b) of this Article fails to elect a form of benefit within
          this time period, the benefit shall be paid in the form of a single-
          life annuity if the Participant does not have a spouse on the date of
          benefit commencement and in the form of a 50% joint and survivor
          annuity with Participant's spouse as the beneficiary if the
          Participant has a spouse on the date of benefit commencement.
<PAGE>
 
7.   Death Benefit. If a pre-retirement spouse's annuity is payable under the
     Retirement Plan on account of Participant's death, the Participant's
     surviving spouse will be paid a supplemental spouse's annuity based on the
     SERB and made in accordance with all the terms and conditions applicable to
     such preretirement spouse's annuities under the Retirement Plan.
<PAGE>
 
8.   ADMINISTRATION. The EBPB shall have the discretionary authority and final
     right to interpret, construe and make benefit determinations (including
     eligibility and amount) under the Plan. The decisions of the EBPB are final
     and conclusive for all purposes. If one or more members of the EBPB are
     disqualified by personal interest from taking part in a particular
     decision, the remaining member or members of the EBPB (although less than a
     quorum) shall have full authority to act on the matter.
<PAGE>
 
9.  MISCELLANEOUS.

     (a)  If any person to receive payment is a minor, or is deemed by the EBPB
          or is adjudged to be legally incompetent, the payments shall be made
          to the duly appointed guardian or committee of such minor or
          incompetent, or they may be made to such person or persons who the
          EBPB believes are caring for or supporting such minor or incompetent.

     (b)  All payments to persons entitled to benefits under this Plan shall be
          made to such persons and shall not be grantable, transferable or
          otherwise assignable in anticipation of payment thereof, in whole or
          in part, by the voluntary or involuntary acts of any such persons, or
          by operation of law, and shall not be liable or taken for any
          obligation of such person. PP&L will observe the terms of the Plan
          unless and until ordered to do otherwise by a state or Federal court.
          As a condition of participation, Participant agrees to hold PP&L
          harmless from any claim that arises out of PP&L's obeying any such
          order whether such order effects a judgment of such court or is issued
          to enforce a judgment or order of another court.

     (c)  Nothing in this Plan shall confer any right on any Participant to
          continue in PP&L's employ or to receive compensation, nor shall
          anything in this Plan affect in any way the right of PP&L to terminate
          any Participant's employment at any time.

     (d)  The expenses of administration hereunder shall be borne by PP&L.

     (e)  This Plan shall be construed, administered and enforced according to
          the laws of the Commonwealth of Pennsylvania.

    (f)   All payments from this Plan shall be made from the general assets of
          PP&L. This Plan shall not require PP&L to set aside, segregate,
          earmark, pay into trust or special account or otherwise restrict the
          use of its assets in the operation of the business. Participant shall
          have no greater right or status than as an unsecured creditor of PP&L
          with respect to any amounts owed to Participant hereunder.

    (g)   The masculine pronoun shall be deemed to include the feminine and the
          singular to include the plural unless a different meaning is plainly
          required by the context.
<PAGE>
 
10.  TERMINATION OR AMENDMENT. The Board may, in its sole discretion, terminate
     and amend this Plan from time to time provided, however, that the Plan may
     not be terminated or amended to the prejudice or detriment of any
     Participant during the three (3) year period immediately following a Change
     in Control (or, if later, thirty six (36) months from the consummation of
     the transaction giving rise to the Change in Control). Without limiting the
     generality of the foregoing, the proviso of the preceding sentence shall
     not, at any time or in any event, be amended or deleted. Subject to the
     foregoing, the EBPB may make such amendments to the Plan as it deems
     necessary or desirable except those amendments which substantially increase
     the cost of the Plan to PP&L or significantly alter the benefit design or
     eligibility requirements of the Plan. No termination or amendment shall
     (without Participant's consent) alter Participant's right to monthly
     payments which have commenced prior to the effective date of such
     termination or amendment. Prior to a Change in Control, the Board
     specifically reserves the right to terminate or amend this Plan to
     eliminate the right of any Participant to receive payment hereunder prior
     to the time when payments are in pay status under this Plan.
     Notwithstanding the foregoing, if PP&L is liquidated, the EBPB shall cause
     the amounts due hereunder to be paid in one or more installments or upon
     such other terms and conditions and at such other time as the EBPB
     determines to be just and equitable, but in no event later than the time
     such amounts would otherwise have been paid.
<PAGE>
 
11.  Effective Date. The original effective date of this Plan is July 1, 1985.
     The effective date of this amended and restated Plan is January 1, 1998.
        
       Executed this ____ day of July, 1998.
 
                                          PP&L, INC.
 
                                          By:
                                             -----------------------   
                                             John M. Chappelear
                                             Vice President-Investments Pensions
<PAGE>
 
<TABLE>
<CAPTION> 

                                  APPENDIX A
<S>                         <C>                          <C>                            <C>      
# of Full Consecutive                                    # of Full Consecutive
Months of Employment        Reduction Factor (%)         Months of Employment           Reduction Factor
        60                         0.0000                       36                          15.0000
        59                         0.4167                       35                          16.2500
        58                         0.8333                       34                          17.5000
        57                         1.2500                       33                          18.7500
        56                         1.6667                       32                          20.0000
        55                         2.0833                       31                          21.2500
        54                         2.5000                       30                          22.5000
        53                         2.9167                       29                          23.7500
        52                         3.3333                       28                          25.0000
        51                         3.7500                       27                          26.2500
        50                         4.1667                       26                          27.5000
        49                         4.5833                       25                          28.7500
        48                         5.0000                       24                          30.0000
        47                         5.8333                       23                          31.6667
        46                         6.6667                       22                          33.3333
        45                         7.5000                       21                          35.0000
        44                         8.3333                       20                          36.6667
        43                         9.1667                       19                          38.3333
        42                        10.0000                       18                          40.0000
        41                        10.8333                       17                          41.6667
        40                        11.6667                       16                          43.3333
        39                        12.5000                       15                          45.0000
        38                        13.3333                       14                          46.6667
        37                        14.1667                       13                          48.3333
</TABLE>