Document:

<PAGE>

                                                                     EXHIBIT 4.4
                                                                     -----------

                   PECO ENERGY COMPANY EMPLOYEE SAVINGS PLAN
                   -----------------------------------------

                 (Amended and Restated Effective July 1, 1999)
                 ---------------------------------------------
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                               TABLE OF CONTENTS
                               -----------------
<TABLE>
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                                                                            Page
                                                                            ----

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SECTION 1.  DEFINITIONS....................................................   1

    (a)     "Accrued Benefit"..............................................   1
    (b)     "Administrator" or "Plan Administrator"........................   1
    (c)     "Annual Additions".............................................   1
    (d)     "Board of Directors"...........................................   2
    (e)     "Code".........................................................   2
    (f)     "Company"......................................................   2
    (g)     "Compensation".................................................   2
    (h)     "Disability"...................................................   3
    (i)     "Eligible Employee"............................................   3
    (j)     "Employee".....................................................   3
    (k)     "ERISA"........................................................   3
    (l)     "Fund".........................................................   3
    (m)     "Hour of Service"..............................................   3
    (n)     "Investment Category"..........................................   5
    (o)     "Limitation Year"..............................................   5
    (p)     "Member".......................................................   5
    (q)     "Normal Retirement Date".......................................   5
    (r)     "Participating Company"........................................   5
    (s)     "Party in Interest"............................................   5
    (t)     "PECO Stock"...................................................   7
    (u)     "Plan".........................................................   7
    (v)     "Plan Year"....................................................   7
    (w)     "Qualified Military Service"...................................   7
    (x)     "Related Entity"...............................................   7
    (y)     "TRASOP".......................................................   8
    (z)     "Trustee"......................................................   8
    (aa)    "Valuation Date"...............................................   8

SECTION 2.  ADMINISTRATION OF THE PLAN.....................................   9

    (a)     ERISA Reporting and Disclosure.................................   9
    (b)     ERISA Named Fiduciary..........................................   9
    (c)     Administrative Powers..........................................   9
    (d)     Administrative Services and Expenses...........................  10
    (e)     Exculpation....................................................  10
    (f)     Claims.........................................................  10
    (g)     Indemnification................................................  11
</TABLE>
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<TABLE>
<S>                                                                          <C>
SECTION 3. PARTICIPATION IN THE PLAN.......................................  12

   (a)     Initial Eligibility.............................................  12
   (b)     Termination and Requalification.................................  12

SECTION 4. ELIGIBLE EMPLOYEE AND PARTICIPATING COMPANY
           CONTRIBUTIONS...................................................  14

   (a)     Salary Reduction Contributions..................................  14
   (b)     Participating Company Matching Contributions....................  15
   (c)     Limitations.....................................................  15
   (d)     Compliance with Nondiscrimination Tests.........................  17
   (e)     Payroll Taxes...................................................  25
   (f)     Rollovers.......................................................  25
   (g)     Vesting.........................................................  25
   (h)     Timing of Contributions.........................................  25
   (i)     Contingent Nature of Contributions..............................  26
   (j)     Contributions With Respect to Military Service..................  26

SECTION 5. MAXIMUM CONTRIBUTIONS AND BENEFITS..............................  28

   (a)     Defined Contribution Limitation.................................  28
   (b)     Definition of "Compensation" for Code Limitations...............  29

SECTION 6. INVESTMENTS.....................................................  30

   (a)     Member Elections................................................  30
   (b)     Rules Applicable to Investment Elections........................  30
   (c)     Special Rules Applicable to PECO Stock..........................  31
   (d)     Facilitation....................................................  32
   (e)     Valuations......................................................  32
   (f)     Bookkeeping.....................................................  32

SECTION 7. BENEFICIARIES AND DEATH BENEFITS................................  33

   (a)     Primary Beneficiary.............................................  33
   (b)     Designation of Alternate Beneficiary............................  33
   (c)     General Rules...................................................  34

SECTION 8. BENEFITS FOR MEMBERS............................................  35

   (a)     Retirement Benefit..............................................  35
   (b)     Death Benefit...................................................  35
   (c)     Disability Benefit..............................................  35
   (d)     Termination of Employment Benefit...............................  35
</TABLE>

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<TABLE>
<S>                                                                            <C>
SECTION 9.  DISTRIBUTION OF BENEFITS..........................................  36

                                                                                36
   (a)      Commencement......................................................  38
   (b)      Benefit Form......................................................  38
   (c)      Withholding.......................................................  38
   (d)      Minimum Distribution Requirements.................................  38
   (e)      Direct Rollover...................................................
                                                                                39
SECTION 10. IN-SERVICE DISTRIBUTIONS..........................................

   (a)      Age 59-1/2........................................................  39
   (b)      Hardship Distributions............................................  39
   (c)      Need..............................................................  39
   (d)      Satisfaction of Need..............................................  40
   (e)      Limitation........................................................  41
   (f)      General Rules.....................................................  41
   (g)      Pledged Amounts...................................................  41

SECTION 11. LOANS.............................................................  42

   (a)      Permissibility....................................................  42
   (b)      Application.......................................................  42
   (c)      Limitation on Amount..............................................  42
   (d)      Equality of Borrowing Opportunity.................................  42
   (e)      Loan Statement....................................................  43
   (f)      Restriction on Loans..............................................  43
   (g)      Loans as Fund Investments.........................................  43

SECTION 12. AMENDMENT AND TERMINATION.........................................  48

   (a)      Amendment.........................................................  48
   (b)      Termination.......................................................  49
   (c)      Conduct on Termination............................................  49

SECTION 13. LIMITATION OF RIGHTS..............................................  51

   (a)      Alienation........................................................  51
   (b)      Qualified Domestic Relations Order or Federal Tax Levy Exception..  51
   (c)      Employment........................................................  51

SECTION 14. MERGERS, CONSOLIDATIONS OR TRANSFERS OF PLAN ASSETS...............  53

SECTION 15. PARTICIPATION BY SUBSIDIARIES.....................................  54

   (a)      Commencement......................................................  54
   (b)      Termination.......................................................  54
</TABLE>

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<S>                                                                         <C>
   (c)      Single Plan.....................................................  54
   (d)      Delegation of Authority.........................................  54

SECTION 16. MISCELLANEOUS...................................................  55

   (a)      Incapacity......................................................  55
   (b)      Reversions......................................................  55
   (c)      Effective Date..................................................  56
   (d)      Pronouns........................................................  56
   (e)      Interpretation..................................................  56

SECTION 17. TOP-HEAVY REQUIREMENTS..........................................  57

   (a)      General Rule....................................................  57
   (b)      Definitions.....................................................  57
   (c)      Vesting.........................................................  60
   (d)      Minimum Contribution............................................  60
</TABLE>

                                      iv
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              PHILADELPHIA ELECTRIC COMPANY EMPLOYEE SAVINGS PLAN
              ---------------------------------------------------
                 (Amended and Restated Effective July 1, 1999)
                 ---------------------------------------------

           SECTION 1.   DEFINITIONS{TC}
           ----------   ---------------

               (a)  "Accrued Benefit"{TC} shall mean on any date of
                     ---------------
determination the sum of:

                    (i)    the Member's contributions to the Fund, including,
without limitation, his contributions made pursuant to subsections 4(a) and
4(f);

                    (ii)   Participating Company matching contributions made on
the Member's behalf pursuant to subsection 4(b); and

                    (iii)  his TRASOP account transferred to the Fund, all as
adjusted under subsection 6(f) and reduced for amounts distributed to the
Member.

               (b)  "Administrator" or "Plan Administrator" shall mean the
                     -------------      ------------------
Company.
               (c)  "Annual Additions" shall mean the sum for any Limitation
                     ----------------
Year of (i) employer contributions, (ii) employee contributions, (iii)
forfeitures and (iv) amounts described in sections 415(l)(1) and 419A(d)(2) of
the Code, which are allocated to the account of an Eligible Employee under the
terms of a plan subject to section 415 of the Code. "Annual Additions" shall
include excess contributions as defined in section 401(k)(8)(B) of the Code,
excess aggregate contributions as defined in section 401(m)(6)(B) of the Code
and excess deferrals as described in section 402(g) of the Code, regardless of
whether such amounts are distributed or forfeited; provided, however, that
"Annual Additions" shall not include excess deferrals as described in section
402(g) of the Code that are distributed in accordance with

                                       1
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subsection 4(c)(i). "Annual Additions" shall not include contributions made
under subsection 4(f).

               (d)  "Board of Directors"{TC} shall mean the Board of Directors
                     ------------------
of the Company.

               (e)  "Code"{TC} shall mean the Internal Revenue Code of 1986, as
                     ----
amended, and the same as may be further amended from time to time.

               (f)  "Company"{TC} shall mean PECO Energy Company, a
                     -------
Pennsylvania corporation (known prior to January 1, 1994 as the 'Philadelphia
Electric Company').

               (g)  "Compensation"{TC} shall mean the base salary or wages
                     ------------
computed on the basis of an Employee's regular work schedule, not to exceed 40
hours, payable in cash to an Employee by a Participating Company before
reduction for the Employee's before-tax contributions to this Plan in accordance
with an election under subsection 4(a) or to any section 125 plan maintained by
a Participating Company; provided, however, that "Compensation" for any week in
which an Employee who is classified by the Company as a "36/44 hour employee" is
scheduled to work fewer than 40 hours shall mean such "36/44 hour employee's"
base salary or wages for 40 hours, before reduction for the "36/44 hour
employee's" before-tax contributions to this Plan in accordance with an election
under subsection 4(a) or to any section 125 plan maintained by a Participating
Company. "Compensation" with respect to any Employee for any Plan Year,
including any bonus taken into account for purposes of subsection 4(a)(ii),
shall be limited to $150,000 or such other amount as may be applicable under
section 401(a)(17) of the Code. For purposes of subsection 4(j), "Compensation"
shall mean the base salary or wages the Member would have received during a

                                       2
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period of Qualified Military Service, computed on the basis of the Member's
regular work schedule as of the beginning of the period of Qualified Military
Service (or, if the amount of such Compensation is not reasonably certain, the
Member's average Compensation for the twelve-month period immediately preceding
the Member's period of Qualified Military Service); provided, however, that the
Member returns to work within the period during which his right to reemployment
is protected by law.

               (h)  "Disability"{TC} shall mean a medically determinable
                     ----------
physical or mental impairment of a permanent nature which prevents an Eligible
Employee from performing his customary employment duties without endangering his
health.

               (i)  "Eligible Employee"{TC} shall mean each Employee of a
                     -----------------
Participating Company other than an Employee classified by the Administrator as
"co-op," "temporary," "temporary-vacation," "vacation" or "intermittent" in
accordance with personnel policies uniformly applied.

               (j)  "Employee"{TC} shall mean each and every employee of a
                     --------
Participating Company or a Related Entity. The term "Employee" shall also
include a person who is a "leased employee" (within the meaning of section
414(n)(2) of the Code) with respect to a Participating Company or a Related
Entity except that no person who is a "leased employee" shall be eligible to
participate in this Plan or be deemed an "Employee" for purposes of eligibility
to participate hereunder. Notwithstanding the foregoing, the term "Employee"
shall not include independent contractors or any other persons who are not
treated by the Participating Company as employees for purposes of withholding
federal employment taxes, regardless of any contrary governmental or judicial
determination relating to such employment status or tax withholding.

                                       3
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               (k)  "ERISA"{TC} shall mean the Employee Retirement Income
                     -----
Security Act of 1974, as amended, and the same as may be amended from time to
time.

               (l)  "Fund"{TC} shall mean the assets of the Plan.
                     ----

               (m)  "Hour of Service"{TC}
                     ---------------

                    (i)  General Rule. "Hour of Service" shall mean each hour
                         ------------
(A) for which an Employee is directly or indirectly paid, or entitled to
payment, by a Participating Company or a Related Entity for the performance of
duties or (B) for which back pay, irrespective of mitigation of damages, has
been either awarded or agreed to by a Participating Company or a Related Entity.
These hours shall be credited to the Employee for the period or periods in which
the duties were performed or to which the award or agreement pertains
irrespective of when payment is made. The same hours shall not be credited under
both (A) and (B) above.

                    (ii) Paid Absences. An Employee shall also be credited with
                         -------------
one Hour of Service for each hour for which the Employee is directly or
indirectly paid, or entitled to payment, by a Participating Company or a Related
Entity for reasons other than the performance of duties such as paid absence due
to vacation, holiday, illness, incapacity, disability, layoff, jury duty,
funeral leave or authorized leave of absence for a period not exceeding one year
for any reason in accordance with a uniform policy established by the
Administrator; provided, however, not more than 501 Hours of Service shall be
credited to an Employee under this sentence on account of any single, continuous
period during which the Employee performs no duties and provided, further, that
no credit shall be given if payment (A) is made or due under a plan maintained
solely for the purpose of complying with applicable workmen's compensation,
unemployment compensation or disability insurance laws or (B)

                                       4
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is made solely to reimburse an Employee for medical or medically related
expenses incurred by the Employee.

          (iii)     Military. An Employee shall also be credited with one Hour
                    --------
of Service for each hour during which the Employee is absent during a period of
Qualified Military Service, provided he returns to employment with a
Participating Company or a Related Entity within the period during which his
right to reemployment is protected by law.

          (iv)      Miscellaneous.  For purposes of this subsection 1(n), the
                    -------------
regulations issued by the Secretary of Labor at 29 CFR (S)2530.200b - 2(b) and
(c) are incorporated by reference. Nothing herein shall be construed as denying
an Employee credit for an Hour of Service if credit is required by separate
federal law.

   (n)    "Investment Category"{TC} shall mean a separate investment fund or
           -------------------
medium which the Administrator directs the Trustee to make available under the
terms of the Plan.  Each Investment Category shall be a part of the Fund.

   (o)    "Limitation Year"{TC} shall mean the consecutive twelve-month period
           ---------------
commencing January 1st and ending December 31st.

   (p)    "Member"{TC} shall mean each and every Eligible Employee who
           ------
satisfies the requirements for participation under Section 3 hereof and any
person who has an Accrued Benefit held under the Plan.

   (q)    "Normal Retirement Date"{TC} shall mean the date on which a Member
           ----------------------
attains age 65.

   (r)    "Participating Company"{TC} shall mean each subsidiary of the
           ---------------------
Company, provided that each such subsidiary adopts this Plan pursuant to Section
15. The term shall also include the Company, unless the context otherwise
requires.

                                       5
<PAGE>

               (s)  "Party in Interest"{TC} shall mean:
                     -----------------

                    (i)    any fiduciary (including, but not limited to, the
Administrator and the Trustee), counsel or employee of the Plan;

                    (ii)   a person providing services to the Plan;

                    (iii)  a Participating Company;

                    (iv)   an employee organization any of whose members are
covered by the Plan;

                    (v)    an owner, direct or indirect, of 50% or more of:

                           (A) the combined voting power of all classes of stock
entitled to vote or the total value of shares of all classes of stock of a
corporation,
                           (B) the capital interest or the profits interest of a
partnership, or

                           (C) the beneficial interest of a trust or
unincorporated enterprise,

which is a Participating Company or an employee organization described in
paragraph (iv);

                    (vi) a spouse, ancestor, lineal descendant, or spouse of a
lineal descendant of any individual described in paragraph (i), (ii), (iii), or
(v);
                    (vii)  a corporation, partnership, or trust or estate of
which (or in which) 50% or more of:

                           (A) the combined voting power of all classes of stock
entitled to vote or the total value of shares of all classes of stock of such
corporation,

                           (B) the capital interest or profits interest of such
partnership, or

                                       6
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                           (C) the beneficial interest of such trust or estate,
is owned directly or indirectly, or held by persons described in paragraph (i),
(ii), (iii), (iv) or (v);

                    (viii) an employee, officer, director (or an individual
having powers and responsibilities similar to those of officers or directors),
or a 10% or more shareholder directly or indirectly, of a person described in
paragraph (ii), (iii), (iv), (v) or (vii), or of the Plan; or

                    (ix)   a 10% or more (directly or indirectly in capital or
profits) partner or joint venturer of a person described in paragraph (ii),
(iii), (iv), (v) or (vii).

               (t)  "PECO Stock"{TC} shall mean the Company's common stock.
                     ----------

               (u)  "Plan"{TC} shall mean the PECO Energy Company Employee
                     ----
Savings Plan, a profit sharing plan, as amended and restated as set forth herein
effective July 1, 1999 and the same as may be amended from time to time. The
Plan is a continuation of the Philadelphia Electric Company Employee Savings
Plan as initially effective January 1, 1984.

               (v)  "Plan Year"{TC} shall mean the consecutive twelve-month
                     ---------
period commencing January 1st and ending December 31st.

               (w)  "Qualified Military Service"{TC} shall mean any service in
                     --------------------------
the uniformed services (as defined in chapter 43 of title 38, United States
Code) where the Member's right to reemployment is protected by law.

               (x)  "Related Entity"{TC} shall mean (i) all corporations which
                     --------------
are members with a Participating Company in a controlled group of corporations
within the meaning of section 1563(a) of the Code, determined without regard to
sections 1563(a)(4) and (e)(3)(C) of the Code, (ii) all trades or businesses
(whether or not incorporated) which are under common control with a
Participating Company as determined by regulations promulgated under section

                                       7
<PAGE>

414(c) of the Code, (iii) all trades or businesses which are members of an
affiliated service group with a Participating Company within the meaning of
section 414(m) of the Code and (iv) any entity required to be aggregated with a
Participating Company under regulations prescribed under section 414(o) of the
Code (to the extent provided in such regulations); provided, however, for
purposes of Section 5, the definition shall be modified to substitute the phrase
"more than 50%" for the phrase "at least 80%" each place it appears in section
1563(a)(1) of the Code. Furthermore, for purposes of crediting Hours of Service
for eligibility to participate, service performed as a leased employee (within
the meaning of section 414(n) of the Code) of a Participating Company or a
Related Entity shall be treated as service performed for a Participating Company
or a Related Entity. An entity is a Related Entity only during those periods in
which it is included in a category described in this subsection.

               (y)  "TRASOP"{TC} shall mean the Philadelphia Electric Company
                     ------
Tax Reduction Act Stock Ownership Plan.

               (z)  "Trustee"{TC} shall mean such person, persons or corporate
                     -------
fiduciary designated pursuant to subsection 2(b) to hold legal title to the
Fund.

               (aa) "Valuation Date"{TC} shall mean each business day of the
Plan Year, or such other less frequent dates determined by the Administrator to
accommodate the nature, management and administration of specified Investment
Categories.

                                       8
<PAGE>

       SECTION 2.  ADMINISTRATION OF THE PLAN{TC}
       ---------   -------------------------------

               (a) ERISA Reporting and Disclosure{TC}. The Administrator shall
                   ------------------------------
file all reports and distribute to Members and beneficiaries reports and other
information required under ERISA.

               (b) ERISA Named Fiduciary{TC}. The Administrator shall be the
                   ---------------------
named fiduciary responsible for administration of the Plan. The Administrator,
by resolution of the Board of Directors, shall designate a Trustee and enter
into a written agreement under which such Trustee shall hold, manage and control
the Fund in accordance with the terms and subject to the limitations contained
herein. If the Trustee so designated is unable to serve for any reason, the
Company's President shall designate a successor to serve pending action by the
Board of Directors. The proper officers of the Company may assign any of the
Company's duties or responsibilities as Administrator to specific persons or
entities. Any such assignment to an officer of the Company or an Employee shall
not constitute a delegation of the Administrator's responsibility but rather
shall be treated as the manner in which the Administrator has determined
internally to discharge such responsibility.

               (c) Administrative Powers{TC}. The Administrator shall adopt
                   ---------------------
such rules for administration of the Plan as it considers desirable, provided
they do not conflict with the Plan, and may construe the Plan, correct defects,
make factual determinations, supply omissions and reconcile inconsistencies to
the extent necessary to effectuate the Plan and such action shall be conclusive.
All rules, decisions and designations by the Administrator under the Plan shall
be made in a non-discriminatory manner, and persons similarly situated shall be
treated alike. The Administrator shall keep records of the administration of the
Plan. Employees and their beneficiaries may examine Plan records pertaining
directly to themselves.

                                       9
<PAGE>

               (d)  Administrative Services and Expenses{TC}. The
                    ------------------------------------
Administrator may arrange for legal, investment advisory, medical, accounting,
clerical and other services necessary or desirable to carry out the Plan. The
costs of such services, the Trustee's fee and other administrative expenses
shall be paid from the Fund unless paid by the Company.

               (e)  Exculpation.{TC} Neither any Participating Company nor any
v                   -----------
director, officer or employee of any of them shall be liable for any loss due to
its or his error or omission in administration of the Plan unless the loss is
due to the gross negligence or willful misconduct of the party to be charged or
is due to the failure of the party to be charged to exercise a fiduciary
responsibility with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims.

               (f)  Claims{TC}. If, pursuant to the rules, regulations or other
                    ------
interpretations of the Plan, the Administrator denies the claim of a Member or
beneficiary for benefits under the Plan, the Administrator shall provide written
notice, within 90 days after receipt of the claim, setting forth in a manner
calculated to be understood by the claimant:

                    (i)    the specific reasons for such denial;

                    (ii)   the specific reference to the Plan provisions on
which the denial is based;

                    (iii)  a description of any additional material or
information necessary to perfect the claim and an explanation of why such
material or information is needed; and

                    (iv)   an explanation of the Plan's claim review procedure
and the time limitations of this subsection applicable thereto.

                                       10
<PAGE>

A Member or beneficiary whose claim for benefits has been denied may request
review by the Administrator of the denied claim by notifying the Administrator
in writing within 60 days after receipt of the notification of claim denial. As
part of said review procedures the claimant or his authorized representative may
review pertinent documents and submit issues and comments to the Administrator
in writing. The Administrator shall render its decision to the claimant in
writing in a manner calculated to be understood by the claimant not later than
60 days after receipt of the request for review, unless special circumstances
require an extension of time, in which case decision shall be rendered as soon
after the sixty-day period as possible, but not later than 120 days after
receipt of the request for review. The decision on review shall state the
specific reasons therefor and the specific Plan references on which it is based.

               (g)  Indemnification.{TC} The Company shall indemnify and hold
                    ---------------
harmless to the maximum extent permitted by its by-laws each employee, officer
and director of the Company and of each Participating Company from any claim,
damage, loss or expense, including litigation expenses and attorneys' fees,
resulting from such person's service in connection with the Plan provided the
claim, damage, loss or expense does not result from the person's gross
negligence or intentional misconduct.

                                       11
<PAGE>

              SECTION 3.  PARTICIPATION IN THE PLAN{TC}
              ---------   ------------------------------

                  (a)     Initial Eligibility{TC}. Each and every Eligible
                          -------------------
Employee shall qualify for participation immediately upon the date that is six
months after the date on which he first is credited with an Hour of Service as
an Employee, if he is then an Eligible Employee.

                  (b)     Termination and Requalification{TC}. An Eligible
                          -------------------------------
Employee who has satisfied the service requirements of subsection 3(a) and who
subsequently becomes ineligible for any reason, or who for any reason is not an
Eligible Employee at the time he satisfies such service requirements, shall
qualify initially or requalify for participation immediately upon becoming an
Eligible Employee. For purposes of satisfying such service requirements, an
Employee shall be credited with all employment with a Participating Company or
Related Entity (together with (A) any period following termination of such
employment, provided that the Employee is again credited with an Hour of Service
before the earlier of (i) the first anniversary of such termination of
employment or (ii) the first anniversary of the beginning of the Employee's
absence from active employment for any other reason, or (B) any period of
Qualified Military Service, provided the Employee returns to work with a
Participating Company or Related Entity within the period during which his right
to reemployment is protected by law) other than:

                              (A) employment following the first anniversary of
the beginning of the Employee's absence from active employment (without
termination of employment), or

                              (B) employment for a period of less than six
months preceding a period of at least one year following the earlier of (i)
termination of the Employee's employment with all Participating Companies and
Related Entities, provided that the employee

                                       12
<PAGE>

is not credited with an Hour of Service during such one-year period, or (ii)
except in the case of an Employee described in (iii), the beginning of the
Employee's absence from active employment other than for termination of such
employment, or (iii) the first anniversary of the Employee's absence from active
employment, without termination of employment, by reason of (1) the Employee's
pregnancy, (2) by reason of birth of the Employee's child,- -(3) by reason of
placement of a child with the Employee in connection with-adoption of the child
by the Employee, or (4) for purposes of caring for a child-immediately after
birth or placement.

                                       13
<PAGE>

              SECTION 4. ELIGIBLE EMPLOYEE AND PARTICIPATING COMPANY
              ---------  -------------------------------------------

CONTRIBUTIONS{TC}
------------------

                   (a)   Salary Reduction Contributions{TC}
                         ------------------------------

                         (i)  Regular Salary Reduction. Each Eligible Employee
                              ------------------------
who has satisfied the requirements for participation may contribute an even
multiple of 0.1% of his Compensation which is not less than 1% and not more than
the maximum percentage, as determined by the Administrator, of his Compensation
as he shall elect in the manner and pursuant to the procedures prescribed by the
Administrator or its delegate. Contributions under this Section 4(a)(i) shall be
accomplished through direct reduction of Compensation in each payroll period
that the election is in effect. An Eligible Employee may change his contribution
rate at any time in the manner and pursuant to the procedures prescribed by the
Administrator or its delegate.

                         (ii) Bonus Programs. The Participating Companies from
                              --------------
time to time sponsor bonus programs under which cash payments are made to
Eligible Employees. The Administrator may designate that all or a portion of the
payment under any such program may be contributed to this Plan. In such case,
each Eligible Employee who has satisfied the requirements for participation in
this Plan prior to the payment date for such designated bonus program may
contribute to this Plan such portion of his payment as he shall elect in the
manner and pursuant to the procedures prescribed by the Administrator or its
delegate. The contribution shall be made by direct reduction of the payment the
Eligible Employee would otherwise receive under the designated bonus program.

                                       14
<PAGE>

          (iii)    Characterization. All contributions under this subsection
                   ----------------
4(a) shall be deemed to be employer contributions made on behalf of Eligible
Employees to a qualified cash or deferred arrangement (within the meaning of
section 401(k)(2) of the Code).

   (b)    Participating Company Matching Contributions{TC}. Each Participating
          --------------------------------------------
Company shall contribute to the Plan, on behalf of each Eligible Employee who is
employed by the Participating Company at any time during a payroll period, an
amount equal to 50% of the contributions made pursuant to subsection 4(a)(i) by
the Eligible Employee for that payroll period (and while the Eligible Employee
is employed by the Participating Company) which are not in excess of 5% of the
Eligible Employee's Compensation paid by the Participating Company for such
payroll period.

   (c)    Limitations{TC}. The Administrator shall limit contributions under
subsection 4(a) and/or 4(b) as provided below.

          (i)      Exclusion Limit.  The maximum amount of contribution which
                   ---------------
any Eligible Employee may make in any calendar year under subsection 4(a) is
$9,500 (or such increased annual amount resulting from a cost of living
adjustment pursuant to sections 402(g)(5) and 415(d)(1) of the Code) reduced by
the amount of elective deferrals by such Eligible Employee under all other
plans, contracts or arrangements of any Participating Company or Related Entity.
If the contribution under subsection 4(a) for an Eligible Employee for any
calendar year exceeds $9,500 (or such increased annual amount resulting from a
cost of living adjustment to the Code limitation on the exclusion of elective
deferrals from gross income) reduced by the amount of elective deferrals by such
Eligible Employee under all other plans, contracts or arrangements of any
Participating Company or Related Entity, the Administrator shall direct the
Trustee to distribute the excess amount (plus any income and

                                       15
<PAGE>

minus any loss as described below) to the Eligible Employee not later than April
15th following the close of such calendar year. If (A) an Eligible Employee
participates in another plan which includes a qualified cash or deferred
arrangement that is not sponsored by a Participating Company or Related Entity,
(B) such Eligible Employee contributes in the aggregate under subsection 4(a) of
this Plan and the corresponding provisions of the other plan more than the
exclusion limit, and (C) the Eligible Employee notifies the Administrator not
later than March 1st following the close of such calendar year of the portion of
the excess the Eligible Employee has allocated to this Plan, then the
Administrator shall direct the Trustee to distribute to the Eligible Employee
not later than April 15th following the close of such calendar year the excess
amount (and any income and minus any loss as described below) which the Eligible
Employee allocated to this Plan. Any distribution of excess amounts under this
subsection 4(c)(i) shall be adjusted by the income or loss allocable to such
excess amounts. Such income or loss shall be equal to the sum of the allocable
gain or loss for the calendar year, and the period between the end of the
calendar year and the date of distribution, and shall be determined by the
Administrator in a manner uniformly applicable to all Eligible Employees and
consistent with regulations issued by the Secretary of the Treasury.
Notwithstanding anything in the Plan to the contrary:

                         (1) For purposes of determining any excess amount, (I)
                         ---
the Eligible Employee's contributions under subsection 4(a) which have
previously been distributed pursuant to subsection 4(d)(ii) or returned to the
Eligible Employee pursuant to Section 5 shall be treated as distributed under
this subsection 4(c)(i) and (II) contributions under subsection 4(a) not taken
into account in determining matching contributions under subsection 4(b) shall
be reduced first.

                                       16
<PAGE>

                              (2) In the event an Eligible Employee receives a
                              ---
distribution of excess amounts pursuant to this subsection 4(c)(i), the Eligible
Employee shall forfeit any Participating Company matching contributions
(adjusted for income or loss as described above) allocated to the Eligible
Employee by reason of the amounts distributed, if such matching contributions
are not otherwise returned to the Eligible Employee pursuant to subsection
4(d)(ii). Amounts forfeited shall be used to reduce future Participating Company
matching contributions made pursuant to subsection 4(b).

                    (ii) Nondiscrimination Test Limits. The Administrator may
                         -----------------------------
limit the maximum amount of contribution under subsection 4(a) or 4(b) for all
or any class of Eligible Employees to the extent it determines that such
limitation is necessary to keep the Plan in compliance with section 401(a)(4) or
section 401(k) or 401(m) of the Code. Any limitation shall be effective for all
payroll periods following the announcement of the limitation.

               (d)  Compliance with Nondiscrimination Tests{TC}
                    ---------------------------------------

                    (i)  Rules.
                         -----

                         (A)  Deferral Percentage Test. In no event shall the
                              -------------------------
"average actual deferral percentage" (as defined below) for any Plan Year for
Eligible Employees who are "highly compensated employees" (as defined in
paragraph (vi), below, of this subsection 4(d)) for such Plan Year bear a
relationship to the "average actual deferral percentage" for the preceding Plan
Year for Eligible Employees who are not "highly compensated employees" for such
preceding Plan Year which does not satisfy either subsection 4(d)(i)(A)(1) or
                                                                        -
(2) below.
 -

                              (1)  The requirement shall be satisfied for a Plan
                              ---
Year if the "average actual deferral percentage" for the Plan Year for the group
of Eligible

                                       17
<PAGE>

Employees who are "highly compensated employees" for such Plan Year is not more
than the "average actual deferral percentage" for the preceding Plan Year of all
other Eligible Employees for such preceding Plan Year multiplied by 1.25.

                         (2)  The requirement shall be satisfied for a Plan Year
                         ---
if (I) the excess of the "average actual deferral percentage" for the Plan Year
for the Eligible Employees who are "highly compensated employees" for such Plan
Year over the "average actual deferral percentage" for the preceding Plan Year
of all other Eligible Employees for such preceding Plan Year is not more than
two percentage points and (II) the "average actual deferral percentage" for the
Plan Year for Eligible Employees who are "highly compensated employees" for such
Plan Year is not more than the "average actual deferral percentage" for the
preceding Plan Year of all other Eligible Employees for such preceding Plan Year
multiplied by two.

                    (B)  Contribution Percentage Test. In no event shall the
                         ----------------------------
"average contribution percentage" (as defined below) for any Plan Year for
Eligible Employees who are "highly compensated employees" (as defined in
paragraph (vi), below, of this subsection 4(d)) for such Plan Year bear a
relationship to the "average contribution percentage" for the preceding Plan
Year for Eligible Employees who are not "highly compensated employees" for such
preceding Plan Year which does not satisfy either subsection 4(d)(i)(B)(1) or
                                                                        -
(2) below.
 -

                         (1)  The requirement shall be satisfied for a Plan Year
                         ---
if the "average contribution percentage" for the Plan Year for the group of
Eligible Employees who are "highly compensated employees" for such Plan Year is
not more than the "average contribution percentage" for the preceding Plan Year
of all other Eligible Employees for such preceding Plan Year multiplied by 1.25.

                                       18
<PAGE>

                         (2)  The requirement shall be satisfied for a Plan Year
                         ---
if (I) the excess of the "average contribution percentage" for the Plan Year for
the Eligible Employees who are "highly compensated employees" for such Plan Year
over the "average contribution percentage" for the preceding Plan Year of all
other Eligible Employees for such preceding Plan Year is not more than two
percentage points and (II) the "average contribution percentage" for the Plan
Year for Eligible Employees who are "highly compensated employees" for such Plan
Year is not more than the "average contribution percentage" for the preceding
Plan Year of all other Eligible Employees for such preceding Plan Year
multiplied by two.

                    (C)  Aggregate Limitation. With respect to any Plan Year in
                         --------------------
which both the limitations in subsections 4(d)(i)(A)(1) and 4(d)(i)(B)(1) are
                                                     -                 -
exceeded, subject to subsection 4(d)(vii), the sum of the "average actual
deferral percentage" and the "average contribution percentage" for the Plan Year
for the group of Eligible Employees who are "highly compensated employees" for
such Plan Year (determined after adjustments are made under subsections
4(d)(ii)(A) and (B) for purposes of satisfying the limitations described in
subsections 4(d)(i)(A) and (B)) shall not exceed the greater of:

                         (1)  the sum of (I) the greater of the "average actual
                         ---
deferral percentage" or the "average contribution percentage" for the preceding
Plan Year for all other Eligible Employees for such preceding Plan Year
multiplied by 1.25, plus (II) the lesser of (a) two multiplied by the lesser of
                                             -
the "average actual deferral percentage" or the "average contribution
percentage" for the preceding Plan Year for all other Eligible Employees for
such preceding Plan Year, or (b) 2% plus the lesser of the "average actual
                              -
deferral percentage" or the "average contribution percentage" for the preceding
Plan Year for all other Eligible Employees for such preceding Plan Year; or

                                       19
<PAGE>

                              (2)  the sum of (I) the lesser of the "average
                              ---
actual deferral percentage" or the "average contribution percentage" for the
preceding Plan Year for all other Eligible Employees for such preceding Plan
Year multiplied by 1.25, plus (II) the lesser of (a) two multiplied by the
                                                  -
greater of the "average actual deferral percentage" or the "average contribution
percentage" for the preceding Plan Year for all other Eligible Employees for
such preceding Plan Year, or (b) 2% plus the greater of the "average actual
                              -
deferral percentage" or the "average contribution percentage" for the preceding
Plan Year for all other Eligible Employees for such preceding Plan Year.

                    (ii) Correction.
                         ----------

                         (A)  If the relationship of the "average actual
deferral percentages" does not satisfy subsection 4(d)(i)(A) for any Plan Year,
then the Administrator shall direct the Trustee to distribute the "excess
contribution" (as defined below) for such Plan Year (plus any income and minus
any loss as described below) within twelve months of the close of the Plan Year
to the "highly compensated employees" on the basis of the respective portions of
the "excess contribution" attributable to each, as determined under this
subsection. The "excess contribution" for any Plan Year is the excess of the
aggregate amount of contributions paid over to the Fund pursuant to subsection
4(a) on behalf of "highly compensated employees" for such Plan Year over the
maximum amount of such contributions permitted for "highly compensated
employees" under subsection 4(d)(i)(A). The portion of the "excess contribution"
attributable to a "highly compensated employee" is determined by reducing
contributions made under subsection 4(a) on behalf of "highly compensated
employees" (reducing non-matched contributions first) in order of the dollar
amounts of such contributions for each such employee, beginning with the highest
of such dollar amounts, until the "excess contribution" is eliminated.

                                       20
<PAGE>

For purposes of determining the amount of the necessary reduction, contributions
previously distributed under subsection 4(c)(i) shall be treated as distributed
under this subsection 4(d)(ii)(A). Any distribution of excess contributions
under this subsection 4(d)(ii)(A) shall be adjusted by the income or loss
allocable to such excess contributions. Such income or loss shall be equal to
the sum of the allocable gain or loss for the Plan Year, and the period between
the end of the Plan Year and the date of distribution, and shall be determined
by the Administrator in a manner uniformly applicable to all Eligible Employees
and consistent with regulations issued by the Secretary of the Treasury.
Notwithstanding anything in the Plan to the contrary, an Eligible Employee who
receives a distribution under this subsection 4(d)(ii)(A) shall forfeit any
Participating Company matching contributions (adjusted for income or loss as
described above) allocated to the Eligible Employee by reason of any "excess
contribution" distributed under this subsection, if such matching contributions
are not otherwise returned to the Eligible Employee pursuant to subsection
4(d)(ii)(B).

                         (B)  If the relationship of the "average contribution
percentage" does not satisfy subsection 4(d)(i)(B) for any Plan Year, then the
Administrator shall direct the Trustee to distribute the "excess aggregate
contribution" (as defined below) for such Plan Year (plus any income and minus
any loss as described below) within twelve months of the close of the Plan Year
to the "highly compensated employees" on the basis of the respective portions of
the "excess aggregate contribution" attributable to each, as determined under
this subsection.  The "excess aggregate contribution" for any Plan Year is the
excess of the aggregate amount of contributions paid over to the Fund pursuant
to subsection 4(b) on behalf of "highly compensated employees" for such Plan
Year over the maximum amount of such contributions permitted for "highly
compensated employees" under subsection 4(d)(i)(B).  The portion of the

                                       21
<PAGE>

"excess aggregate contribution" attributable to a "highly compensated employee"
is determined by reducing contributions made under subsection 4(b) on behalf of
"highly compensated employees" in order of the dollar amounts of such
contributions for each such employee, beginning with the highest of such dollar
amounts, until the "excess aggregate contribution" is eliminated. Any
distribution of excess aggregate contributions under this subsection 4(d)(ii)(B)
shall be adjusted by the income or loss allocable to such excess aggregate
contributions. Such income or loss shall be equal to the sum of the allocable
gain or loss for the Plan Year, and the period between the end of the Plan Year
and the date of distribution, and shall be determined by the Administrator in a
manner uniformly applicable to all Eligible Employees and consistent with
regulations issued by the Secretary of the Treasury.

                         (C)  For purposes of satisfying the test described in
subsection 4(d)(i)(C), contributions made on behalf of "highly compensated
employees" pursuant to subsection 4(b) shall be reduced as described in
subsection 4(d)(ii)(B).

                  (iii)  Additional Definitions. For purposes of this
                         ----------------------
subsection 4(d):

                         (A)  The term "Eligible Employee" shall mean each
Employee eligible to make contributions under subsection 4(a) at any time during
the Plan Year.

                         (B)  The "average actual deferral percentage" for a
specific group of Eligible Employees for a Plan Year shall be the average of the
"actual deferral percentage" for each Eligible Employee in the group for such
Plan Year.

                         (C)  The "average contribution percentage" for a
specific group of Eligible Employees for a Plan Year shall be the average of the
"contribution percentage" for each Eligible Employee in the group for such Plan
Year.

                                       22
<PAGE>

                         (D)  The "actual deferral percentage" for a particular
Eligible Employee for a Plan Year shall be the ratio of the amount of
contributions paid over to the Fund pursuant to subsection 4(a) for such
Eligible Employee for such Plan Year (excluding any such contributions that are
(1) taken into account in determining the Eligible Employee's "contribution
 -
percentage" with respect to the Plan Year, (2) distributed to an Eligible
                                            -
Employee who is not a "highly compensated employee" pursuant to the second
sentence of subsection 4(c)(i), or (3) returned to the Eligible Employee
                                    -
pursuant to Section 5) plus, in the case of any Eligible Employee who is a
"highly compensated employee" and who is simultaneously eligible to participate
in more than one cash or deferred arrangement maintained by a Participating
Company or a Related Entity, elective deferrals made on his behalf under all
such arrangements (excluding those that are not permitted to be aggregated under
Treas. Reg. (S)1.401(k)-1(b)(3)(ii)(B)) for the Plan Year, to the Eligible
Employee's "compensation" for such Plan Year.

                         (E)  The "contribution percentage" for a particular
Eligible Employee for a Plan Year shall be the ratio of the amount of
Participating Company matching contributions paid over to the Fund pursuant to
subsection 4(b) for such Eligible Employee for such Plan Year plus, in the case
of any Eligible Employee who is a "highly compensated employee" and who is
simultaneously eligible to participate in more than one plan maintained by a
Participating Company or a Related Entity to which employee or matching
contributions are made, after-tax employee contributions and employer matching
contributions made on his behalf under all such plans (excluding those that are
not permitted to be aggregated under Treas. Reg. (S)1.401(m)-1(b)(3)(ii)) for
the Plan Year, to the Eligible Employee's "compensation" for such Plan Year. For
purposes of determining contribution percentages, the Administrator may take
contributions made pursuant to subsection 4(a) into account, in

                                       23
<PAGE>

accordance with Treasury regulations, so long as the requirements of subsection
4(d)(i)(A) are met both when such contributions used in determining
"contribution percentages" are and are not included in determining "actual
deferral percentages."

                         (F)  Except as otherwise provided in subsection
4(d)(v), "compensation" means compensation as defined in section 414(s) of the
Code as determined by the Administrator on a uniform and consistent basis for
all Eligible Employees, including, for Plan Years included in a Period of
Qualified Military Service, Compensation as defined in Section 1(g) for purposes
of Qualified Military Service; provided, however, that, in the sole discretion
of the Administrator, "compensation" may (1) include amounts excluded from gross
                                          -
income under section 125, 402(e)(3), 402(h) or 403(b) of the Code and/or (2)
                                                                          -
exclude compensation for any period during which an Employee is not an Eligible
Employee. "Compensation" with respect to any Employee for any Plan Year shall be
limited to $150,000 or such other amount as may be applicable under section
401(a)(17) of the Code.

                    (iv) Aggregation of Plans. In the event that this Plan
                         --------------------
satisfies the requirements of section 410(b) of the Code for any Participating
Company only if aggregated with one or more other plans with respect to such
Participating Company or a Related Entity, or if one or more other plans
satisfies the requirements of section 410(b) of the Code only if aggregated with
this Plan, then subsection 4(d)(i) shall be applied by determining the "actual
deferral percentages" of Eligible Employees as if all such plans were a single
plan.

                    (v)  Definition of Highly Compensated Employee. For purposes
                         -----------------------------------------
of this subsection 4(d), the term "highly compensated employee" shall mean any
Employee who performed services for a Participating Company or Related Entity
during the Plan Year for which a determination is being made (the "determination
year") and who:

                                       24
<PAGE>

                         (A)  was at any time during the determination year or
the immediately preceding determination year a five-percent owner, as defined in
section 416(i) of the Code; or

                         (B)  for the immediately preceding determination year,
received more than $80,000 (as indexed) in compensation (as defined and set
forth in subsection 5(b) below).

               (e)  Payroll Taxes{TC}. The Participating Companies shall
                    -------------
withhold from the Compensation of contributing Eligible Employees and remit to
the appropriate government agencies such payroll taxes and income tax
withholding as the Participating Company determines is or may be necessary with
respect to contributions made under subsection 4(a) under applicable statutes or
ordinances and the regulations and rulings thereunder.

               (f)  Rollovers{TC}.  Subject to applicable provisions of the
                    ---------
Code, an Eligible Employee, regardless of whether such Eligible Employee has
satisfied the requirements of subsection 3(a) for participation, may contribute
either (A) an "eligible rollover distribution" from a "qualified trust" (within
the meaning of section 402 of the Code) or (B) any portion of an individual
retirement account consisting solely of a distribution described in (A) and
earnings thereon.

               (g)  Vesting{TC}.  A Member shall at all times have a 100%
                    -------
nonforfeitable interest in his Accrued Benefit.

               (h)  Timing of Contributions{TC}.  Participating Company matching
                    -----------------------
contributions made for any Plan Year pursuant to subsection 4(b) shall be made
not later than the last date on which amounts so paid may be deducted for
federal income tax purposes for the taxable year of the Participating Company in
which the Plan Year ends.  Except to the extent

                                       25
<PAGE>

otherwise permitted by applicable law or governmental regulations or ruling,
amounts contributed pursuant to subsections 4(a) or 4(f) will be remitted to the
Trustee as soon as practicable, but no later than the 15th business day of the
month following the month that contains the date on which such contributions
were received or withheld from the Member's Compensation.

               (i)  Contingent Nature of Contributions{TC}. All contributions
                    ----------------------------------
made pursuant to subsection 4(a), 4(b) or 4(j) are made expressly contingent on
the deductibility thereof for federal income tax purposes for the fiscal year
with respect to which such contributions are made, and no such contribution
shall be made for any year to the extent it would exceed the deductible limit
for such year as set forth in section 404 of the Code.

               (j)  Contributions With Respect to Military Service{TC}.
                    ----------------------------------------------

                    (i)  Salary Reduction Contributions. A Member who returns to
                         ------------------------------
employment with a Participating Company or Related Entity following a period of
Qualified Military Service shall be permitted to make additional contributions
under subsection 4(a), within the limits described in Section 4, up to an amount
equal to such contributions that the Member would have been permitted to make to
the Plan if he had continued to be employed and received Compensation during the
period of Qualified Military Service. Contributions under this subsection
4(j)(i) may be made during the period which begins on the date such Member
returns to employment and which has the same length as the lesser of (a) 3
multiplied by the period of Qualified Military Service and (b) 5 years.

                    (ii) Matching Contributions. The Participating Company shall
                         ----------------------
contribute to the Plan, on behalf of each Member who has made contributions
under subsection (i) above, an amount equal to the contribution that would have
been required under subsection

                                       26
<PAGE>

4(b) had such contributions under subsection (i), above, been made during the
period of Qualified Military Service.

                    (iii) Limitations on Contributions.  The contributions made
                          ----------------------------
under this subsection 4(j) shall be subject to the limitations described in
Sections 4 and 5 for the Plan Year to which such contributions relate.

                                       27
<PAGE>

               SECTION 5. MAXIMUM CONTRIBUTIONS AND BENEFITS{TC}
               ---------- --------------------------------------

                    (a)  Defined Contribution Limitation{TC}. In the event that
                         -------------------------------
the amount allocable to an Eligible Employee from amounts contributed by a
Participating Company to the Fund with respect to any Plan Year would cause the
Annual Additions allocated to any Eligible Employee under this Plan plus the
amount allocated to such Eligible Employee under any other defined contribution
plan maintained by a Participating Company or a Related Entity to exceed for any
Limitation Year the lesser of (i) $30,000 or (ii) 25% of such Eligible
Employee's compensation (as defined in subsection 5(b)) for such Limitation
Year, as a result of a reasonable error in estimating the Eligible Employee's
compensation, or a reasonable error in determining the amount of elective
deferrals that may be made under the limitations of section 415 of the Code, or
such other circumstances as may be permitted by law, then such amount allocated
to such Eligible Employee shall be reduced by the amount of such excess to
determine the actual amount of the Participating Company's contribution
allocable to such Eligible Employee with respect to such Plan Year. Any excess
amount allocable to the portion of an Eligible Employee's Accrued Benefit
attributable to contributions made pursuant to subsection 4(a) shall be returned
to the Eligible Employee, with income thereon, as soon as administratively
practicable; and any excess amount allocable to the portion of an Eligible
Employee's Accrued Benefit attributable to matching contributions made pursuant
to subsection 4(b) shall be held in a suspense account and shall be used to
reduce such contributions allocable to him for the next Limitation Year (and
succeeding Limitation Years as necessary) provided he is covered by the Plan as
of the end of the Limitation Year. However, if the Eligible Employee is not
covered by the Plan as of the end of the Limitation Year, then the excess amount
shall be held unallocated in a suspense account and shall be allocated, after
adjustment for investment gains or losses, among

                                       28
<PAGE>

all Eligible Employees eligible to share in the allocation of contributions made
for such Limitation Year by the Participating Company by which the Eligible
Employee was last employed as an equal percentage of their Compensation for such
Limitation Year.

                    (b)  Definition of "Compensation" for Code Limitations{TC}.
                         -------------------------------------------------
For purposes of the limitations on the allocation of Annual Additions to an
Eligible Employee and maximum benefits under a defined benefit plan as provided
for in this Section 5, "compensation" for a Limitation Year shall mean wages
required to be reported on IRS Form W-2, paid to the Eligible Employee by a
Participating Company or a Related Entity during the Limitation Year, as defined
in Treas. Reg. (S)1.415-2(d)(11)(i), plus (i) for Limitation Years included in a
period of Qualified Military Service, Compensation as defined in Section 1(g)
for purposes of Qualified Military Service, and (ii) amounts that are excluded
from gross income under sections 125, 402(e)(3), 402(h), 403(b) or 457 of the
Code.

                                       29
<PAGE>

               SECTION 6. INVESTMENTS{TC}
               ---------- ---------------

                    (a)  Member Elections{TC}. The Administrator shall instruct
                         ----------------
the Trustee to establish specific Investment Categories for Members to select
among investment alternatives reflecting varying degrees of risk of loss and
possibility of gain. One Investment Category shall be limited to PECO Stock (and
cash or cash equivalents pending reinvestment in PECO Stock). If an Investment
Category consists of more than one security or contract, the Trustee shall
select the specific investments to be included which conform to the criteria and
objectives of the Investment Category, unless the Administrator directs the
Trustee with respect to specific investments. The Administrator at any time may
add to or delete from the Investment Categories. Under rules established by the
Administrator, each Member shall be required to designate in the manner and
pursuant to the procedures prescribed by the Administrator or its delegate, the
Investment Category or Categories in which the Trustee is to invest the
contributions made with respect to such Member. A Member may at any time change
such designation with respect to new contributions or amounts previously
invested through an election in the manner and pursuant to the procedures
prescribed by the Administrator or its delegate. If the Administrator eliminates
an Investment Category and a Member does not select a new Investment Category
for his contributions held in the eliminated Investment Category, the
Administrator, in its sole discretion, shall direct the Trustee with respect to
investment of the Member's amounts so held. Each Member shall be solely
responsible for his election of Investment Categories from time to time.

                    (b)  Rules Applicable to Investment Elections{TC}. The
                         ----------------------------------------
Administrator may limit the right of a Member (i) to increase or decrease his
contributions or to direct loan repayments to a particular Investment Category,
(ii) to transfer amounts to or from a

                                       30
<PAGE>

particular Investment Category or (iii) to transfer amounts between particular
Investment Categories, if such limitation is required under the terms upon which
the Investment Category is established. Further, in accordance with subsection
2(c), the Administrator may promulgate separate accounting and administrative
rules to facilitate the establishment or maintenance of an Investment Category.

                    (c)  Special Rules Applicable to PECO Stock{TC}.
                         --------------------------------------

                         (i)    Dividends. The Trustees shall invest all
                                ---------
dividends or other distributions on shares of PECO Stock held in additional
shares of PECO Stock. The Trustee, in its discretion, may acquire such
additional shares of PECO Stock by participation in the Company's dividend
reinvestment plan as in effect from time to time or by market purchases over
such period of time as the Trustee determines is prudent.

                         (ii)   Benefit Distributions. A Member's interest in
                                ---------------------
the PECO Stock Investment Category shall be distributed in cash or in kind, as
elected by the Member, in accordance with Sections 8 and 9. The value of any
fractional share shall be distributed in cash.

                         (iii)  Voting and Tender Offers.
                                ------------------------

                                (A)     Each Member shall have the right to
direct the Trustee with respect to voting or response to a tender offer for PECO
Stock allocated to him by delivering timely written directions in accordance
with rules established by the Administrator. If a Member does not give timely
directions, the Trustee shall not vote or tender the shares of PECO Stock
allocated to such Member.

                                (B)     The Trustee is hereby designated as the
fiduciary responsible for ensuring that (1) procedures are maintained by the
Plan to safeguard the confidentiality of information relating to the purchase,
holding, and sale of PECO Stock and the

                                       31
<PAGE>

exercise of voting, tender and similar rights with respect to PECO Stock by
Members, (2) the procedures described in (1) are sufficient to maintain
confidentiality, except to the extent necessary to comply with federal law or
state laws not preempted by the Employee Retirement Security Act of 1974, as
amended, and (3) an independent fiduciary is appointed to carry out activities
relating to any situations involving a potential for undue Company influence
upon Members with regard to the direct or indirect exercise of shareholder
rights.

                    (d)  Facilitation{TC}.  Notwithstanding any instruction from
                         ------------
any Member for investment of funds in an Investment Category as provided for
herein, the Trustee shall have the right to hold uninvested or invested pending
reinvestment any amounts intended for investment or reinvestment until such time
as investment may be made in accordance with subsection 6(a).

                    (e)  Valuations{TC}.  As of each Valuation Date, the Trustee
                         ----------
(or the Trustee's designee) shall adjust the net credit balance of each Member's
Accrued Benefit, in the respective Investment Categories of the Fund, upward or
downward, pro rata, so that the aggregate of such unit credit balances for all
Members' Accounts invested in each such Investment Category will equal the net
worth of such Investment Category of the Fund as of that Valuation Date, using
fair market values as determined by the Trustee.

                    (f)  Bookkeeping{TC}.  The Administrator shall maintain
                         -----------
separate bookkeeping accounts to reflect each Member's contributions under
subsections 4(a) and 4(f), the amount of each Member's after-tax contributions
to the TRASOP transferred to this Plan and Participating Company matching
contributions allocated to each Member under subsection 4(b).

                                       32
<PAGE>

     SECTION 7.  BENEFICIARIES AND DEATH BENEFITS{TC}
     ------------------------------------------------

          (a)  Primary Beneficiary{TC}.  A married Member's beneficiary for any
               -------------------
death benefit payable hereunder shall be the Member's spouse unless such spouse
consents in writing witnessed by a notary public or representative of the Plan
in a manner prescribed by the Administrator to the Member's designation of a
different beneficiary. Any such waiver shall apply only to the beneficiary or
contingent beneficiary named by the Member coincident to the spouse's waiver and
shall be irrevocable with respect to such designation. An unmarried Member's
beneficiary hereunder shall be the beneficiary the Member designated under the
Participating Company's basic group life insurance plan covering the Member.
Notwithstanding the foregoing, a married Member may designate a beneficiary
other than the Member's spouse under the following circumstances:

               (i)    the Member establishes to the satisfaction of the
Administrator that his spouse cannot be located; or

               (ii)   furnishes a court order to the Administrator establishing
that the Member is legally separated or has been abandoned (within the meaning
of local law), unless a qualified domestic relations order pertaining to such
Member provides that the spouse's consent must be obtained; or

               (iii)  the spouse has previously given consent in accordance with
this subsection and consented to the Member's right to choose any optional mode
and to designate any beneficiary without further consent by the spouse.

          (b)  Designation of Alternate Beneficiary{TC}.  Notwithstanding
               ------------------------------------
subsection 7(a), each unmarried Member and a married Member whose spouse grants
a waiver shall have the right to designate one or more beneficiaries and
contingent beneficiaries to receive

                                       33
<PAGE>

any benefit to which such Member may be entitled hereunder in the event of the
death of the Member prior to the distribution of such benefit by filing a
written designation with the Administrator on the form prescribed by the
Administrator.

          (c)  General Rules{TC}.  The consent of a beneficiary other than a
               -------------
spouse is not required for any revocation or change of election of beneficiary.
Any written designation shall become effective only upon its receipt by the
Administrator. If (i) the Member's beneficiary is not governed by subsection
7(a), (ii) the Member has not designated a beneficiary under the basic group
life insurance plan or this Plan, or (iii) the Member's beneficiary and all
designated contingent beneficiaries die before the distribution of benefits,
then the Member's beneficiary shall be the Member's estate.

                                       34
<PAGE>

     SECTION 8.  BENEFITS FOR MEMBERS{TC}
     ------------------------------------

               The following are the only post-employment benefits provided by
the Plan:

               (a)  Retirement Benefit{TC}
                    ------------------

                    (i)  Each Member shall be entitled to a retirement benefit
equal to his Accrued Benefit as of the distribution date prescribed by
subsection 9(a)(i) following his retirement on or after his Normal Retirement
Date.

                    (ii) An Eligible Employee who continues employment beyond
his Normal Retirement Date shall continue to be eligible to participate in the
Plan.

               (b)  Death Benefit{TC}.  In the event of the death of a Member
                    -------------
before distribution of his Accrued Benefit, the Member's Accrued Benefit as of
the distribution date prescribed by subsection 9(a)(ii) shall constitute his
death benefit and shall be distributed pursuant to Sections 7 and 9 (i) to his
designated beneficiary or (ii) if no designation of beneficiary is then in
effect, to the beneficiary determined pursuant to subsection 7(c).

               (c)  Disability Benefit{TC}.  In the event a Member terminates
                    ------------------
employment with all Participating Companies and Related Entities due to
Disability, the Member's Accrued Benefit as of the distribution date prescribed
by subsection 9(a)(iii) for his termination of employment due to Disability
shall constitute his Disability benefit.

               (d)  Termination of Employment Benefit{TC}.  In the event a
                    ---------------------------------
Member terminates employment with all Participating Companies and Related
Entities other than by reason of retirement on or after his Normal Retirement
Date, Disability or death, the Member's Accrued Benefit as of the date
prescribed for distribution in accordance with subsection 9(a)(iii) shall
constitute his benefit.

                                       35
<PAGE>

     SECTION 9.  DISTRIBUTION OF BENEFITS{TC}
     ----------------------------------------

               (a)  Commencement{TC}
                    ------------

                    (i)  Normal or Late Retirement.  Benefits payable under
                         -------------------------
subsection 8(a) due to retirement shall be distributed as soon after the
Member's termination of employment as is administratively feasible. In no event
shall the payment of benefits commence later than the sixtieth day after the
close of the Plan Year in which the latest of the following occurs:

                         (A) The Member's Normal Retirement Date;

                         (B) The Member's termination of employment; or

                         (C) The tenth anniversary of the year in which the

Member commenced participation in the Plan.

Notwithstanding any provision of the Plan to the contrary, in the case of a
Member who is a 5% owner (as defined in section 416 of the Code) with respect to
the calendar year in which the Member attains age 70-1/2, distribution of
benefits shall commence not later than April 1 of the calendar year following
the calendar year in which the Member attains age 70-1/2. Distributions required
under this subsection prior to a Member's termination of employment shall be
made in periodic payments. The first payment shall be made on or before April 1
following the close of the calendar year in which the Member attained age 70-
1/2. Subsequent payments shall be made in each December. The amount of each
payment shall be the minimum amount required to be distributed under section
401(a)(9) of the Code under the assumptions that the Member has no designated
beneficiary or spousal beneficiary and the Member's life expectancy is
redetermined annually in accordance with applicable regulations under the Code.

                                       36
<PAGE>

                    (ii)   Death.  Benefits payable under subsection 8(b) due
                           -----
to death shall be distributed as soon after the Member's death as is
administratively feasible. Distribution of death benefits must be completed
within five years of the Member's date of death.

                    (iii)  Termination of Employment.  Benefits payable under
                           -------------------------
subsection 8(c) due to Disability or 8(d) due to termination of employment shall
be distributed as soon after the Member's termination of employment as is
administratively feasible. However, if the Member's Accrued Benefit exceeds
$5,000, and he has not yet reached his Normal Retirement Date, distribution of
benefits shall not commence unless the Member consents to such distribution in
writing. If the Member initially does not consent to the distribution, his
Accrued Benefit shall be retained in the Fund until the Member requests a
distribution. A Member's election to commence payment prior to his Normal
Retirement Date must be made within the 90-day period ending on the distribution
date elected by the Member and in no event earlier than the date the
Administrator provides the Member with written information relating to his right
to defer payment until his Normal Retirement Date and his right to make a direct
rollover as set forth in Section 9(e). Such information must be supplied not
less than 30 days nor more than 90 days prior to the distribution date.
Notwithstanding the preceding sentence, a Member's distribution date may occur
less than 30 days after such information has been supplied to the Member
provided that, after the Member has received such information and has been
advised of his right to a 30-day period to make a decision regarding the
distribution, the Member affirmatively elects a distribution. If the Member does
not request distribution, the Administrator shall distribute the Member's
Accrued Benefit as of the first to occur of the Member's Normal Retirement Date
or death (provided the Administrator receives notice of the Member's death).

                                       37
<PAGE>

          (b)  Benefit Form{TC}.  All benefits payable to terminated Members
               ------------
under Section 8 shall be distributed in one lump sum. Minimum required
distributions to an Eligible Employee pursuant to subsection 401(a)(9) of the
Code shall be made in a series of periodic distributions in an amount determined
under subsection 9(a)(i).

          (c)  Withholding{TC}.  All distributions under the Plan are subject to
               -----------
federal, state and local tax withholding as required by applicable law as in
effect from time to time.

          (d)  Minimum Distribution Requirements{TC}.  The provisions of this
               ---------------------------------
Section 9 shall be construed in accordance with section 401(a)(9) of the Code
and regulations thereunder, including the incidental death benefit requirements
of section 401(a)(9)(G) of the Code as set forth in proposed Treas. Reg.
(S)1.401(a)(9)-2.

          (e) Direct Rollover{TC}.  In the event any payment or payments
              ---------------
(excluding any amount not includible in gross income) to be made to a person
pursuant to this Section 9 or Section 10 would constitute an "eligible rollover
distribution" within the meaning of section 401(a)(31)(C) of the Code and
regulations thereunder, such person may request that, in lieu of payment to the
person, all or part of such payment or payments be rolled over directly from the
Trustee to the trustee of an "eligible retirement plan" within the meaning of
section 401(a)(31)(D) of the Code and regulations thereunder. Any such request
shall be made at the time and in the manner prescribed by the Administrator or
its delegate, subject to such requirements and restrictions as may be prescribed
by applicable Treasury regulations. For purposes of this subsection, a "person"
shall include an Employee or former Employee or his surviving spouse or his
spouse or former spouse who is an alternate payee under a qualified domestic
relations order with the meaning of section 414(p) of the Code.

                                       38
<PAGE>

     SECTION 10.   IN-SERVICE DISTRIBUTIONS{TC}
     ------------------------------------------

          (a)  Age 59-1/2{TC}.  An Eligible Employee who has attained age 59-1/2
               ----------
shall have the right to withdraw all or a portion of his Accrued Benefit in cash
at any time in the manner and pursuant to the procedures prescribed by the
Administrator or its delegate. The withdrawal shall be charged proportionately
to the Investment Categories in which the Eligible Employee has an account. All
withdrawals shall be made in a single sum distribution.

          (b)  Hardship Distributions{TC}.  The Administrator shall permit an
               ----------------------
in-service distribution to an Eligible Employee from contributions made to the
Plan on his behalf on account of financial hardship, subject to the limitations
of this subsection and subsection 10(e). A distribution is on account of
hardship only if the distribution both (i) is made on account of an immediate
and heavy financial need of the Eligible Employee as determined under subsection
10(c) and (ii) is necessary to satisfy such financial need as determined under
subsection 10(d).

          (c)  Need{TC}.  A distribution shall be deemed to be made on account
               ----
of an immediate and heavy financial need of the Eligible Employee if the
distribution is on account of (i) medical expenses described in section 213(d)
of the Code incurred by the Eligible Employee, the Eligible Employee's spouse or
any dependent of the Eligible Employee (as defined in section 152 of the Code);
(ii) purchase (excluding mortgage payments) of a principal residence for the
Eligible Employee; (iii) payment of tuition and related educational fees for the
next twelve months of post-secondary education for the Eligible Employee, the
Eligible Employee's spouse, child or any dependent of the Eligible Employee (as
defined in section 152 of the Code); (iv) the need to prevent the eviction of
the Eligible Employee from his principal residence or foreclosure on the
mortgage of the Eligible Employee's principal residence; or (v)

                                       39
<PAGE>

such other reason as the Commissioner of Internal Revenue specifies as a deemed
immediate and heavy financial need through the publication of regulations,
revenue rulings, notices or other documents of general applicability.

          (d)  Satisfaction of Need{TC}.  A distribution shall be deemed to be
               --------------------
necessary to satisfy an immediate and heavy financial need of an Eligible
Employee only if all of the requirements or conditions set forth below are
satisfied or agreed to by the Eligible Employee, as appropriate.

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

               (ii)   The Eligible Employee has obtained all distributions,
other than hardship distributions, and all non-taxable loans currently available
under all plans subject to section 415 of the Code maintained by a Participating
Company or any Related Entity.

               (iii)  The Eligible Employee's elective contributions under this
Plan and each other plan subject to section 415 of the Code maintained by a
Participating Company or a Related Entity in which the Eligible Employee
participates are suspended for twelve full calendar months after receipt of the
distribution.

               (iv)   The Eligible Employee does not make elective contributions
under this Plan or any other plan maintained by a Participating Company or a
Related Entity for the year immediately following the taxable year of the
hardship distribution in excess of the applicable limit under section 402(g) of
the Code for such next taxable year

                                       40
<PAGE>

reduced by the amount of the Eligible Employee's elective contributions for the
taxable year of the hardship distribution.

          (e)  Limitation{TC}.  Distributions on account of hardship shall be
               ----------
in cash and shall be limited to the lesser of (i) 75% of the Eligible Employee's
Accrued Benefit reduced by the principal amount of any loan from the Fund to the
Eligible Employee which is outstanding immediately prior to the hardship
distribution or (ii) 100% of the sum of the Eligible Employee's contributions
under subsections 4(a) and 4(f) and Participating Company matching contributions
made on the Eligible Employee's behalf under subsection 4(b) not previously
withdrawn, both determined as of the date of the Eligible Employee's
distribution request.

          (f)  General Rules{TC}.  Distributions on account of hardship shall
               -------------
be made as soon after the Eligible Employee's request as is administratively
feasible, in accordance with procedures prescribed by the Administrator or its
delegate. Such distributions shall be charged proportionately to the Investment
Categories in which the Eligible Employee has an account.

          (g)  Pledged Amounts{TC}.  Notwithstanding anything in this Section
               ---------------
10 to the contrary, no Member shall be permitted to withdraw any portion of his
Accrued Benefit that has been pledged as security for a loan and allocated to
his Loan Fund under Section 11.

                                       41
<PAGE>

     SECTION 11.  LOANS{TC}
     ----------------------

          (a)  Permissibility{TC}.  Each Member who is an Employee of a
               --------------
Participating Company and any other Member who is a Party in Interest may apply
for a loan from the Plan in the manner and pursuant to the procedures prescribed
by the Administrator or its delegate. The proceeds of any loan shall be
disbursed to the Member in cash.

          (b)  Application{TC}.  Subject to such uniform and nondiscriminatory
               -----------
rules as may from time to time be adopted by the Administrator, the Trustee,
upon application by such Member, in the manner and pursuant to the procedures
prescribed by the Administrator or its delegate, may make a loan or loans to
such applicant. No loan shall be granted if there is already a loan outstanding,
or if proceeds of a prior loan were issued to the Member at any time during the
Plan Year in which the application is made.

          (c)  Limitation on Amount{TC}.  Loans shall be at least $500 in
               --------------------
amount, and in no event shall total loans exceed the lesser of (i) 50% of the
Member's Accrued Benefit as of the date on which the loan is made, or (ii)
$50,000, reduced by the excess, if any, of (A) the highest outstanding balance
of all loans during the 12 months prior to the time the new loan is to be made
over (B) the outstanding balance of loans made to the Member on the date such
new loan is made. Loans under any other qualified plan sponsored by the
Participating Companies and all Related Entities shall be aggregated with loans
under the Plan in determining whether or not the limitation stated herein has
been exceeded.

          (d)  Equality of Borrowing Opportunity{TC}.  Loans shall be
               ---------------------------------
available to all Members who are Parties in Interest on a reasonably equivalent
basis. Loans shall not be made available to Members who are or were highly
compensated employees (within

                                       42
<PAGE>

the meaning of section 414(q) of the Code) in an amount greater than the amount
available to other Members.

          (e) Loan Statement{TC}.  Every Member receiving a loan hereunder will
              --------------
receive a statement from the Administrator clearly reflecting the charges
involved in each transaction, including the dollar amount and annual interest
rate of the finance charges.  The statement will provide all information
required to meet applicable "truth-in-lending" laws.

          (f)  Restriction on Loans{TC}.  The Administrator will not approve
               --------------------
any loan if it is the belief of the Administrator that such loan, if made, would
constitute a prohibited transaction (within the meaning of section 406 of ERISA
or section 4975(c) of the Code), would constitute a distribution taxable for
federal income tax purposes, or would imperil the status of the Plan or any part
thereof under section 401(k) of the Code.

          (g)  Loans as Fund Investments{TC}.  All loans shall be considered
               -------------------------
as fixed income investments of a segregated account of the Fund (the "Loan
Fund") directed by the borrower. Accordingly, the following conditions shall
prevail with respect to each such loan:

               (i)  Security.  All loans shall be secured by the portion of the
                    --------
Member's Accrued Benefit allocated to the Loan Fund pursuant to subsection
11(g)(vii), which shall not exceed 50% of the Member's Accrued Benefit as of the
date on which the loan is made, and by the pledge of such further collateral as
the Administrator, in its discretion, deems necessary to assure repayment of the
borrowed amount and all interest to be accrued thereon in accordance with the
terms of the loan.

               (ii) Interest Rate.  Interest shall be charged at a rate to be
                    -------------
fixed by the Administrator and, in determining the interest rate, the
Administrator shall take into consideration interest rates currently being
charged on similar commercial loans by persons in the business of lending money.

                                       43
<PAGE>

               (iii)  Loan Term.  Loans shall be for terms of up to 48
                      ---------
consecutive calendar months. However, if the loan will be used to acquire the
Member's principal residence, the term of the loan may be for a maximum term not
greater than the lesser of (A) the time until the Member attains his Normal
Retirement Date or (B) thirty years. Loans shall be non-renewable and non-
extendable.

               (iv)   Promissory Note. Any loan made to a Member under this
                      ---------------
Section 11 shall be evidenced by a promissory note executed by the Member. Such
promissory note shall contain the irrevocable consent of the Member to the
payroll withholding described in subsection 11(g)(v), if applicable. The
Administrator shall have the right to require the Member to execute a revised
promissory note if the Administrator determines it is necessary to comply with
ERISA or the Code. In the event the Member does not execute such revised
promissory note by the date prescribed by the Administrator, the loan shall
become due and payable as of such date.

               (v)    Repayment.  Loans shall be repaid in level installments
                      ---------
in each payroll period through payroll withholding; provided, however, that:

                      (A)     a Member who is not an Employee of a Participating
Company but who (1) is a Party in Interest or (2) continues scheduled payments
                 -                             -
subject to the rules described in subsection (g)(viii)(A)(2); or
                                                          -

                      (B)     a Member who is an Employee of a Participating
Company but for whom the Administrator has determined that payroll withholding
is not practicable,

                                       44
<PAGE>

shall repay by personal check or in such other manner directed by the
Administrator.  Loans may be prepaid in full, without penalty, on any
installment payment date which occurs at least one year after the loan is made.
Partial prepayment is not permitted.

          If a Member who is repaying a loan through payroll withholding is
granted a leave of absence by a Participating Company that is for a period of
not more than one year and during which the Member's compensation is
insufficient to pay the required loan installment, payment of the loan will be
waived during the leave of absence.  If the Member returns to active employment
after an absence of no more than four weeks, amounts which would have been
withheld during the leave of absence for purposes of repaying the loan shall be
withheld from the Member's first pay after the absence.  If the Member returns
to active employment after an absence of more than four weeks, at the option of
the Trustee, either (I) unpaid interest accrued on the loan shall be withheld
from the Member's first pay after the absence and the unpaid balance of the loan
shall be reamortized over the remaining term of the loan or (II) the period of
repayment shall be extended for the period necessary to permit repayment, but
not in excess of 12 months.
          (vi) Loan Fees.  Fees properly chargeable in connection with a loan
               ---------
may be charged, in accordance with a uniform and nondiscriminatory policy
established by the Administrator, against the Accrued Benefit of the Member to
whom the loan is granted.

                    (vii)  Loan Fund.
                           ---------

                           (A)  A portion of the Member's Accrued Benefit that
is equal to the initial principal amount of any loan made pursuant to this
Section 11 shall be transferred, upon the approval of the loan application and
disbursement of the initial principal amount to the Member, to a Loan Fund
established for the Member. If a Member's Accrued

                                       45
<PAGE>

Benefit is invested in more than one Investment Category, the transfer shall be
made pro-rata from the Investment Categories in which the Member's Accrued
Benefit is invested.

                           (B)  In the event that any outstanding loan made to a
Member is in default as described in subsection 11(g)(viii) or is subject to a
grace period as described in subsection 11(g)(viii)(A), the amount allocated to
a Member's Loan Fund shall be increased periodically, at such intervals as shall
be specified by the Administrator, by an amount equal to the unpaid interest
accrued on such loan since the last such increase, if any, pursuant to this
subsection 11(g)(viii)(B).

                           (C)  Loan payments to the Plan by the Member shall be
invested in the Investment Categories on the basis of the Member's current
investment election for future contributions under Section 6. At the same time,
the portion of the Member's Accrued Benefit allocated to the Loan Fund shall be
reduced by the portion of each loan payment attributable to principal and, in
the event that the Member's Loan Fund has been increased by unpaid interest
pursuant to subsection 11(g)(vii)(B), by the portion of the loan payment that is
attributable to such interest.

                    (viii) Default and Remedies.
                           --------------------

                           (A)  Instances of Default.  In the event that:
                                --------------------

                                (1)  a Member terminates employment with all
                                ---
Participating Companies and Related Entities, elects not to continue scheduled
payments pursuant to a procedure approved by the Administrator and fails (or, in
the case of a deceased Member, the beneficiary fails) to repay the full unpaid
balance of the loan plus applicable interest by the close of the grace period;

                                       46
<PAGE>

                                (2)  a Member terminates employment with all
                                ---
Participating Companies and Related Entities, elects to continue scheduled
payments pursuant to a procedure approved by the Administrator and fails to make
two consecutive scheduled payments;

                                (3)  the loan is not repaid by the time the
                                ---
promissory note matures;

                                (4)  a Member revokes or attempts to revoke any
                                ---
payroll withholding authorization for repayment of the loan without the consent
of the Administrator;

                                (5)  a Member (other than a Member on a leave of
                                ---
absence described in the second paragraph of subsection 11(g)(v) or a Member who
has terminated employment and continues scheduled payments subject to the rules
described in subsection (g)(viii)(A)(2)) fails to pay any installment when due;
                                     -

                                (6)  a Member fails to execute a revised
                                ---
promissory note pursuant to subsection 11(g)(iv)); or

                                (7)  distributions under subsection 9(a) to a
Member who has reached age 70-1/2 would require distribution of amounts
allocated to the Member's Loan Fund, before a loan is repaid in full, the unpaid
balance of the loan, with interest due thereon, shall become immediately due and
payable. The phrase "close of the grace period" shall mean the date that is
sixty (60) days after the last day of the calendar month in which the Member's

                                       47
<PAGE>

termination of employment occurs. Notwithstanding anything in this subsection
11(g)(viii) to the contrary, a Member's loan shall become due and payable
immediately upon the Member's termination of employment without regard to the
grace period (I) if the term of the loan would otherwise expire prior to the end
of the otherwise applicable grace period or (II) if permitting amounts due to
remain unpaid to the end of the otherwise applicable grace period would, if the
Member failed to make payment during that period, cause the amount due under the
loan (principal and interest) to exceed the maximum loan amount described in the
first sentence of subsection 11(c).

                           (B)  Remedies. In the event that a loan becomes
                                --------
immediately due and payable (in "default") pursuant to subsection
11(g)(viii)(A), the Member (or his beneficiary in the event of his death) may
satisfy the loan by paying the outstanding balance in full. Otherwise, the
Member's Accrued Benefit shall be reduced by the amount allocated to his Loan
Fund before any benefit which is or becomes payable to the Member or his
beneficiary is distributed. In the case of a benefit which becomes payable to
the Member or his beneficiary pursuant to the Member's death, termination of
employment or attainment of age 59-1/2, the reduction described in the preceding
sentence shall occur on the earliest date following such default on which the
Member or beneficiary could receive payment of such benefit, had the proper
application been filed or election been made, regardless of whether or not
payment is actually made to the Member or beneficiary on such date. In the case
of a benefit which becomes payable under any other Plan provision, the reduction
shall occur on the date such benefit is paid to the Member.

          SECTION 12.  AMENDMENT AND TERMINATION{TC}
          --------------------------------------

               (a)  Amendment{TC}.  The provisions of this Plan may be amended
                    ---------
by the Company from time to time and at any time in whole or in part, provided
that no amendment shall be effective unless the Plan as so amended shall be for
the exclusive benefit of

                                       48
<PAGE>

the Members and their beneficiaries, and that no amendment shall operate to
deprive any Member of any rights or benefits accrued to him under the Plan prior
to such amendment. Each amendment to the Plan shall be adopted by the Board of
Directors through resolutions; provided, however, that the Senior Vice
President-Business Services Group of the Company, or such other appropriate
officer of the Company as shall be identified in a written delegation of
amendment authority made by the Board of Directors or the Senior Vice President-
Business Services Group of the Company, may make, in writing, all technical,
administrative, regulatory and compliance amendments to the Plan, and any other
amendment that will not significantly increase the cost of the Plan to the
Participating Companies, as such officer shall deem necessary or appropriate
without the approval of the Board of Directors.

               (b)  Termination{TC}. While it is the Company's intention to
                    -----------
continue the Plan in operation indefinitely, the Company, nevertheless,
expressly reserves the right, through resolutions adopted by the Board of
Directors, to terminate the Plan in whole or in part or discontinue
contributions in the event of unforeseen conditions. Any such termination,
partial termination or discontinuance of contributions shall be effected only
upon condition that such action is taken as shall render it impossible for any
part of the Fund to be used for, or diverted to, purposes other than the
exclusive benefit of the Members and their beneficiaries.

               (c)  Conduct on Termination{TC}. If the Plan is to be terminated
                    ----------------------
at any time, the Company shall give written notice to the Trustee. The Trustee
shall thereupon revalue the assets of the Fund and the accounts of the Members
as of the date of termination, partial termination or discontinuance of
contributions and, after discharging and satisfying any obligations of the Plan,
shall allocate all unallocated assets to the Accrued Benefits of the Members at
the date of termination, partial termination or discontinuance of contributions
as

                                       49
<PAGE>

provided for in subsection 6(f). Upon termination, partial termination or
discontinuance of contributions the Accrued Benefits of Members affected thereby
shall remain fully vested. The Administrator, in its sole discretion, shall
instruct the Trustee either (i) to pay over to each affected Member his Accrued
Benefit or (ii) to continue to control and manage the Fund for the benefit of
the Members to whom distributions will be made in later periods at the time
provided in Sections 8 and 10 and in the manner provided in Section 9.

                                       50
<PAGE>

          SECTION 13. LIMITATION OF RIGHTS{TC}
          ------------------------------------

               (a)  Alienation{TC}.  None of the payments, benefits or rights of
                    ----------
any Member shall be subject to any claim of any creditor of such Member and, in
particular, to the fullest extent permitted by law, shall be free from
attachment, garnishment, trustee's process, or any other legal or equitable
process available to any creditor of such Member. No person or entity shall have
any legal or equitable right to any portion of the Fund except as expressly
provided in the Plan. No Member shall have the right to alienate, anticipate,
commute, pledge, encumber or assign any of the benefits or payments which he may
expect to receive, contingently or otherwise, under this Plan, except the right
to designate a beneficiary or beneficiaries in accordance with the Plan. For
purposes of this subsection, neither a loan made to an Eligible Employee nor the
pledging of the Eligible Employee's Accrued Benefit as security therefor, both
pursuant to Section 11, shall be treated as an assignment or alienation.

               (b)  Qualified Domestic Relations Order or Federal Tax Levy
                    ------------------------------------------------------
Exception{TC}. Subsection 13(a) shall not apply to the creation, assignment or
---------
recognition of a right to any benefit payable with respect to a Member under a
qualified domestic relations order within the meaning of section 414(p) of the
Code or under a federal tax levy made pursuant to section 6331 of the Code.

               (c)  Employment{TC}. Neither the establishment of the Plan, nor
                    ----------
any modification thereof, nor the creation of any fund, trust or account, nor
the payment of any benefit shall be construed as giving any Member or Employee,
or any person whomsoever, any legal or equitable right against any Participating
Company, the Trustee, or the Administrator, unless such right shall be
specifically provided for in the Plan or conferred by affirmative action of the
Administrator or the Company in accordance with the terms and provisions of the
Plan or

                                       51
<PAGE>

as giving any person the right to be retained in the employ of any Participating
Company. All Eligible Employees and other Employees shall remain subject to
discharge to the same extent as if the Plan had never been adopted.

                                       52
<PAGE>

          SECTION 14. MERGERS, CONSOLIDATIONS OR TRANSFERS OF PLAN ASSETS{TC}
          -------------------------------------------------------------------

          Pursuant to action by the Board of Directors or its authorized
delegate, the Plan may be merged or consolidated with, or a portion of its
assets and liabilities may be transferred to, another qualified plan.  In the
case of any merger or consolidation of the Plan with, or transfer of assets or
liabilities of the Plan to, any other plan, each Member in the Plan must be
entitled to receive a benefit immediately after the merger, consolidation, or
transfer calculated as if the Plan were then to terminate which is equal to or
greater than the benefit he would have been entitled to receive immediately
before the merger, consolidation, or transfer if the Plan had been terminated.

                                       53
<PAGE>

          SECTION 15. PARTICIPATION BY SUBSIDIARIES{TC}
          ---------------------------------------------

               (a)  Commencement{TC}. Any subsidiary of the Company may, with
                    ------------
the permission of the Board of Directors, elect to adopt this Plan.

               (b)  Termination{TC}. The Company may, by action of the Board of
                    -----------
Directors, determine at any time that any such Participating Company shall
withdraw and establish a separate plan and fund.  The withdrawal shall be
effected by a duly executed instrument delivered to the Trustee instructing the
Trustee to segregate the portion of the Fund allocable to the Employees of such
Participating Company and pay such amount over to the separate fund.

               (c)  Single Plan{TC}. The Plan shall at all times be administered
                    -----------
and interpreted as a single plan for the benefit of the Employees of all
Participating Companies.

               (d)  Delegation of Authority{TC}. Any Participating Company which
                    -----------------------
adopts the Plan thereby acknowledges that the Company has all the rights and
duties thereof under the Plan.

                                       54
<PAGE>

               SECTION 16. MISCELLANEOUS{TC}
               -------------------------

                    (a)  Incapacity{TC}. If the Administrator determines that a
                         ----------
person entitled to receive any benefit payment is under a legal disability or is
incapacitated in any way so as to be unable to manage his financial affairs, the
Administrator may direct the Trustee to make payments to such person for his
benefit, or apply the payments for the benefit of such person in such manner as
the Administrator considers advisable. Any payment of a benefit in accordance
with the provisions of this subsection shall be a complete discharge of any
liability to make such payment.

                    (b)  Reversions{TC}. In no event, except as hereafter
                         ----------
provided, shall the Trustee return to any Participating Company any amount
contributed to the Plan.

                         (i)   Mistake of Fact.  In the case of a contribution
                               ---------------
made by a good faith mistake of fact, the Trustee shall return the erroneous
portion of the contribution, without increase for investment earnings, but with
decrease for investment losses, if any, within one year after payment of the
contribution to the Fund.

                         (ii)  Deductibility. To the extent deduction of any
                               -------------
contribution determined by the Participating Company in good faith to be
deductible is disallowed, or such contribution is otherwise nondeductible and
recovery thereof is permitted, the Trustee shall return that portion of the
contribution, without increase for investment earnings but with decrease for
investment losses, if any, for which deduction has been disallowed or recovery
is otherwise permitted within one year after the disallowance of the deduction
or as otherwise permitted by applicable administrative rules.

                         (iii) Deferral Tests. This subsection shall not
                               --------------
preclude refunds made in accordance with subsections 4(c)(i) and 4(d)(ii).

                                       55
<PAGE>

                         (iv)  Limitation. No return of contributions shall be
                               ----------
made under this subsection which adversely affects the Plan's qualified status
under regulations, rulings or other published positions of the Internal Revenue
Service.

                    (c)  Effective Date{TC}. The Plan is effective July 1, 1999,
                         --------------
except as otherwise set forth herein. Prior to July 1, 1999, the rights and
entitlements of any person shall be determined under the PECO Energy Company
Employee Savings Plan as effective on the date the right or entitlement is
claimed to exist.

                    (d)  Pronouns{TC}. The use of the masculine pronoun shall be
                         --------
extended to include the feminine gender wherever appropriate.

                    (e)  Interpretation{TC}. The Plan is a profit sharing plan
                         --------------
including a qualified, tax exempt trust under sections 401(a) and 501(a) of the
Code and a qualified cash or deferred arrangement under section 401(k)(2) of the
Code. The Plan shall be interpreted in a manner consistent with its satisfaction
of all requirements of the Code applicable to such a plan.

                                       56
<PAGE>

     SECTION 17.  TOP-HEAVY REQUIREMENTS{TC}
     ---------------------------------------

          (a)  General Rule{TC}.  For any Plan Year in which the Plan is a top-
               ------------
heavy plan or included in a top-heavy group as determined under this Section,
the special requirements of this Section shall apply. The Plan shall be a top-
heavy plan (if it is not included in an "aggregation group") or a plan included
in a top-heavy group (if it is included in an "aggregation group") with respect
to any Plan Year if the sum as of the "determination date" of the "cumulative
accounts" of "key employees" for the Plan Year exceeds 60% of a similar sum
determined for all "employees", excluding "employees" who were "key employees"
in prior Plan Years only.

          (b)  Definitions{TC}.  For purposes of this Section, the following
               -----------
definitions shall apply to be interpreted in accordance with the provisions of
section 416 of the Code and the regulations thereunder.

               (i)  "Aggregation Group" shall mean the plans of each
                     -----------------
Participating Company or a Related Entity included below:

                    (A)  each such plan in which a "key employee" is a
participant including a terminated plan in which a "key employee" was a
participant within the five years ending on the "determination date";

                    (B)  each other such plan which enables any plan in
subsection (A) above to meet the requirements of section 401(a)(4) or 410 of the
Code; and

                    (C)  each other plan not required to be included in the
"aggregation group" which the Company elects to include in the "aggregation
group" in accordance with the "permissive aggregation group" rules of the Code
if such group would

                                       57
<PAGE>

continue to meet the requirements of sections 401(a)(4) and 410 of the Code with
such plan being taken into account.

               (ii) "Cumulative Account" for any "employee" shall mean the sum
                     ------------------
of the amount of his accounts under this Plan plus all defined contribution
plans included in the "aggregation group" (if any) as of the most recent
valuation date for each such plan within a twelve-month period ending on the
"determination date," increased by any contributions due after such valuation
date and before the "determination date" plus the present value of his accrued
benefit under all defined benefit pension plans included in the "aggregation
group" (if any) as of the "determination date." For a defined benefit plan, the
present value of the accrued benefit as of any particular "determination date"
shall be the amount determined under (A) the method, if any, that uniformly
applies for accrual purposes under all plans maintained by the Participating
Companies and all Related Entities, or (B) if there is no such method, as if
such benefit accrued not more rapidly than under the slowest accrual rate
permitted under the fractional accrual rule of section 411(b)(1)(C) of the Code,
as of the most recent valuation date for the defined benefit plan, under
actuarial equivalent factors specified therein, which is within a twelve-month
period ending on the "determination date." For this purpose, the valuation date
shall be the date for computing plan costs for purposes of determining the
minimum funding requirement under section 412 of the Code. "Cumulative accounts"
of "employees" who have not performed services for any Participating Company or
Related Entity for the five-year period ending on the "determination date" shall
be disregarded. An "employee's" "cumulative account" shall be increased by the
aggregate distributions during the five-year period ending on the "determination
date" made with respect to him under any plan in the "aggregation group."
Rollovers and direct plan-to-plan transfers to this Plan or to a plan in the
"aggregation group"

                                       58
<PAGE>

shall be included in the "cumulative account" unless the transfer is initiated
by the "employee" and made from a plan maintained by an employer which is not a
Participating Company or Related Entity.

               (iii)  "Determination Date" shall mean with respect to any Plan
                       ------------------
Year the last day of the preceding Plan Year.

               (iv)   "Employee" shall mean any person (including a beneficiary
                       --------
thereof) who has or had an accrued benefit held under this Plan or a plan in the
"aggregation group" including this Plan at any time during the current or four
preceding Plan Years. Any "employee" other than a "key employee" described in
subsection 17(b)(v) shall be considered a "non-key employee" for purposes of
this Section 17.

               (v)    "Key Employee" shall mean any "employee" or former
                       ------------
"employee" (including a beneficiary thereof) who is, at any time during the Plan
Year, or was, during any one of the four preceding Plan Years any one or more of
the following:

                      (A)  an officer of a Participating Company or a Related
Entity whose compensation (as defined in subsection 5(b)) exceeds 50% of the
dollar limitation in effect under section 415(b)(1)(A) of the Code, unless 50
other such officers (or, if lesser, a number of such officers equal to the
greater of three or 10% of the "employees") have higher annual compensation;

                      (B)  one of the ten persons employed by a Participating
Company or Related Entity having annual compensation (as defined in subsection
5(b)) greater than the limitation in effect under section 415(c)(1)(A) of the
Code, and owning (or considered as owning within the meaning of section 318 of
the Code) the largest interests (at least 1/2%) in all Participating Companies
or Related Entities. For purposes of this subsection (B), if two

                                       59
<PAGE>

"employees" have the same interest, the one with the greater compensation shall
be treated as owning the larger interest;

                      (C)  any person owning (or considered as owning within the
meaning of section 318 of the Code) more than 5% of the outstanding stock of a
Participating Company or a Related Entity or stock possessing more than 5% of
the total combined voting power of such stock;

                      (D)  a person who would be described in subsection (C)
above if 1% were substituted for 5% each place the same appears in subsection
(C) above, and who has annual compensation (as defined in subsection 5(b)) of
more than $150,000. For purposes of determining ownership under this subsection,
section 318(a)(2)(C) of the Code shall be applied by substituting 5% for 50%.

               (c)  Vesting{TC}.  The Accrued Benefit of each Member shall
                    -------
remain 100% nonforfeitable.

               (d)  Minimum Contribution{TC}.  Except as provided below, minimum
                    --------------------
Participating Company contributions for a Member who is not a "key employee"
shall be required in an amount equal to the lesser of 3% of compensation (as
defined in subsection 5(b) but limited to $150,000 or such other amount as may
apply under section 401(a)(17) of the Code) or the highest percentage of such
compensation contributed for any "key employee" under Section 4 (including
contributions made pursuant to subsections 4(a) and (b)). For purposes of
determining whether or not the minimum contribution described in this subsection
has been made, (i) employer social security contributions shall be disregarded,
(ii) employer matching contributions and elective deferrals shall be
disregarded, and (iii) all defined contribution plans in the "aggregation group"
shall be treated as a single plan. Each "non-key employee" of a

                                       60
<PAGE>

Participating Company who has not separated from service at the end of the Plan
Year and who has satisfied the eligibility requirements of subsection 3(a) shall
receive any minimum contribution provided under this Section 17 without regard
to (i) whether he is credited with 1,000 Hours of Service in the Plan Year or
(ii) earnings level for the Plan Year. If an "employee" participates in both
this Plan and a defined benefit plan sponsored by a Participating Company or a
Related Entity, the minimum benefit shall be provided under the defined benefit
plan.

          IN WITNESS WHEREOF, and as evidence of the adoption of this Plan by
the Company, it has caused the same to be signed by its officers thereunto duly
authorized, and its corporate seal to be affixed hereto, this 10th day of
February, 2000.

Attest:                                 PECO ENERGY COMPANY

/s/  Todd D. Cutler                     By /s/  William H. Smith, III
-------------------                       ---------------------------------
Assist. Secretary

[Corporate Seal]

                                       61
<PAGE>

                   PECO ENERGY COMPANY EMPLOYEE SAVINGS PLAN
                   -----------------------------------------
                 (Amended and Restated Effective July 1, 1999)
                 ---------------------------------------------

                                AMENDMENT NO. 1
                                ---------------

     PECO ENERGY COMPANY, a Pennsylvania corporation (the "Company"),
established the Philadelphia Electric Company Employee Savings Plan effective
January 1, 1984, which Plan was amended from time to time and was last amended
and completely restated effective July 1, 1999. Pursuant to the authority in
Section 12(a) of the Plan, the Senior Vice President-Business Services Group of
the Company hereby amends the Plan, effective May 1, 2000, as hereinafter set
forth:

     Section 3 is deleted in its entirety and the following substituted
therefor:

          SECTION 3.  PARTICIPATION IN THE PLAN
          ----------  -------------------------

               (a) Eligibility on or after May 1, 2000.  Effective on or after
                   -----------------------------------
     May 1, 2000, each and every Eligible Employee shall qualify for
     participation immediately upon the date on which he first is credited with
     an Hour of Service as an Employee.  An Eligible Employee who subsequently
     becomes ineligible for any reason, or who for any reason is not an Eligible
     Employee at the time he first is credited with an Hour of Service as an
     Employee, shall qualify initially or requalify for participation
     immediately upon becoming an Eligible Employee.

               (b) Initial Eligibility before May 1, 2000.  Effective before May
                   --------------------------------------
     1, 2000, each and every Eligible Employee shall qualify for participation
     immediately upon the date that is six months after the date on which he
     first is credited with an Hour of Service as an Employee, if he is then an
     Eligible Employee.

               (c) Termination and Requalification before May 1, 2000.  This
                   --------------------------------------------------
     subsection 3(c) shall be effective before May 1, 2000.  An Eligible
     Employee who has satisfied the service requirements of subsection 3(b) and
     who subsequently becomes ineligible for any reason, or who for any reason
     is not an Eligible Employee at the time he satisfies such service
     requirements, shall qualify initially or requalify for participation
     immediately upon becoming an Eligible Employee.  For purposes of satisfying
     such service requirements, an Employee shall be credited with all
     employment with a Participating Company or Related Entity (together with
     (A) any period following termination of such employment, provided that the
     Employee is again credited with an Hour of Service before

                                       62
<PAGE>

     the earlier of (i) the first anniversary of such termination of employment
     or (ii) the first anniversary of the beginning of the Employee's absence
     from active employment for any other reason, or (B) any period of Qualified
     Military Service, provided the Employee returns to work with a
     Participating Company or Related Entity within the period during which his
     right to reemployment is protected by law) other than:

               (A) employment following the first anniversary of the beginning
     of the Employee's absence from active employment (without termination of
     employment), or

               (B) employment for a period of less than six months preceding a
     period of at least one year following the earlier of (i) termination of the
     Employee's employment with all Participating Companies and Related
     Entities, provided that the employee is not credited with an Hour of
     Service during such one-year period, or (ii) except in the case of an
     Employee described in (iii), the beginning of the Employee's absence from
     active employment other than for termination of such employment, or (iii)
     the first anniversary of the Employee's absence from active employment,
     without termination of employment, by reason of (1) the Employee's
                                                      -
     pregnancy, (2) by reason of birth of the Employee's child, (3) by reason of
                 -                                               -
     placement of a child with the Employee in connection with adoption of the
     child by the Employee, or (4) for purposes of caring for a child
                                -
     immediately after birth or placement.

     EXECUTED this 28th day of March, 2000.

Attest:                          PECO ENERGY COMPANY

/s/ Assistant Secretary          /s/ William H. Smith, III
-----------------------          --------------------------
Assist. Secretary                William H. Smith, III
                                 Senior Vice President
                                 Business Services Group

                                       63
<PAGE>

                   PECO ENERGY COMPANY EMPLOYEE SAVINGS PLAN
                   -----------------------------------------
                 (Amended and Restated Effective July 1, 1999
                 --------------------------------------------

                                AMENDMENT NO. 2
                                ---------------

     PECO ENERGY COMPANY, a Pennsylvania corporation (the "Company"), has
established the PECO Energy Company Employee Savings Plan (the "Plan") which has
been amended from time to time and was last amended and completely restated
effective July 1, 1999.  Pursuant to Section 12(a) of the Plan and pursuant to a
resolution of the Company's Board of Directors dated July 25, 2000, the Company
hereby amends the Plan, effective as of September 1, 2000, by deleting Section
4(b) in its entirety and substituting the following provision therefor:

          (b) Participating Company Matching Contributions.  Each Participating
              --------------------------------------------
     Company shall contribute to the Plan, on behalf of each Eligible Employee
     who is employed by the Participating Company at any time during a payroll
     period, an amount equal to 100% of the contributions made pursuant to
     subsection 4(a)(i) by the Eligible Employee for that payroll period (and
     while the Eligible Employee is employed by the Participating Company) which
     are not in excess of 5% of the Eligible Employee's Compensation paid by the
     Participating Company for such payroll period."

     EXECUTED this 14th day of August, 2000.

Attest:                                       PECO ENERGY COMPANY

/s/ Todd D. Cutler                            /s/ William H. Smith, III
------------------                            -------------------------
Assist. Secretary                             William H. Smith, III
                                              Senior Vice President
                                              Business Services Group

                                       64
<PAGE>

                   PECO ENERGY COMPANY EMPLOYEE SAVINGS PLAN
                   -----------------------------------------
                 (Amended and Restated Effective July 1, 1999)
                 -------------------------------------------

                                AMENDMENT NO. 3
                                ---------------

     PECO ENERGY COMPANY, a Pennsylvania corporation (the "Company"), has
established the PECO Energy Company Employee Savings Plan (the "Plan") which has
been amended from time to time and was last amended and completely restated
effective July 1, 1999. Pursuant to the authority in Section 12(a) of the Plan,
the Senior Vice President-Business Services Group of the Company hereby amends
the Plan, effective as of September 1, 2000, by deleting Section 4(f) in its
entirety and substituting the following provision therefor:

               "(f)  Rollovers.  Subject to applicable provisions of the Code,
                     ---------
     an Eligible Employee, regardless of whether such Eligible Employee has
     satisfied the requirements of subsection 3(a) for participation, may
     contribute either (A) an "eligible rollover distribution" from a "qualified
     trust" (within the meaning of section 402 of the Code) or (B) any portion
     of an individual retirement account consisting solely of a distribution
     described in (A) and earnings thereon.  Subject to applicable provisions of
     the Code, a Member who is eligible for the Merger Separation Program
     described in Article IVE of the Service Annuity Plan of PECO Energy Company
     and who has elected to receive a single sum distribution pursuant to
     Section 4E.6(c) of such plan may contribute all or a portion of such single
     sum distribution, in 10% increments."

     EXECUTED this 5th day of September, 2000.

Attest:                                PECO ENERGY COMPANY

/s/ Todd D. Cutler                     /s/ William H. Smith, III
------------------                     --------------------------
Secretary                              William H. Smith, III
                                       Senior Vice President
                                       Business Services Group

                                       65<PAGE>

                                                                    EXHIBIT 4(i)

                                                                        Rev.9/00

     UNLESS THIS SENIOR NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE BANK OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SENIOR NOTE
ISSUED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR, OR IN LIEU OF, THIS
SENIOR NOTE IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     IF THIS SENIOR NOTE IS ISSUED WITH "ORIGINAL ISSUE DISCOUNT" FOR PURPOSES
OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE FOLLOWING
SHALL BE COMPLETED: THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR PURPOSES OF
APPLYING SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE
OF 1986, AS AMENDED, TO THIS SENIOR NOTE.  THE ISSUE DATE OF THIS SENIOR NOTE IS
_____________.  THE ISSUE PRICE OF THIS SENIOR NOTE IS _____% OF ITS PRINCIPAL
AMOUNT.  THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS SENIOR NOTE IS $_________
PER $1,000 OF THE INITIAL PRINCIPAL AMOUNT, THE YIELD TO MATURITY IS ____%, AND
THE AMOUNT OF THE ORIGINAL ISSUE DISCOUNT ALLOCABLE TO THE INITIAL SHORT ACCRUAL
PERIOD, IF ANY, IS $_____ PER $1,000 OF THE INITIAL PRINCIPAL AMOUNT, DETERMINED
ON THE BASIS OF THE EXACT METHOD.

No. SEN FLR-______________                                            REGISTERED
CUSIP NO.: _______________

                          THE NORTHERN TRUST COMPANY

                            GLOBAL SENIOR BANK NOTE
                                (Floating Rate)

ORIGINAL ISSUE DATE:                             PRINCIPAL AMOUNT:

INITIAL BASE RATE:  ______%                      MATURITY DATE:

INTEREST RATE BASIS:                             INDEX MATURITY:
<PAGE>

SPREAD AND/OR SPREAD MULTIPLIER:                 REGULAR RECORD DATES (If other
                                                 than the 15th day prior to each
                                                 Interest Payment Date):

MAXIMUM INTEREST RATE:                           MINIMUM INTEREST RATE:

INTEREST PAYMENT DATES:                          INTEREST PAYMENT PERIOD:

INTEREST RESET DATES:                            INTEREST RESET PERIOD:

INITIAL REDEMPTION DATE:                         ANNUAL REDEMPTION PERCENTAGE
                                                 REDUCTION:

INITIAL REDEMPTION PERCENTAGE:                   HOLDER'S OPTIONAL REPAYMENT
                                                 DATE:

ORIGINAL ISSUE DISCOUNT NOTE:                    OID AMOUNT:

Yes:  ______   No: _____

OTHER PROVISIONS:                                CALCULATION AGENT:

                                                 DEFAULT RATE:  ____ %

                                                 ALTERNATE RATE EVENT SPREAD:

     The Northern Trust Company, an Illinois banking corporation (the "Bank"),
for value received, hereby promises to pay to Cede & Co., or registered assigns,
the principal amount specified on the face hereof in United States Dollars on
the Maturity Date specified above and to pay interest thereon from the Original
Issue Date specified above or from the most recent interest payment date (or, if
the Interest Reset Period specified above is daily or weekly, from, and
including, the day following the most recent Regular Record Date) to which
interest on this Senior Note (or any predecessor Senior Note) has been paid or
made available for payment (each, an "Interest Payment Date"), on the Interest
Payment Dates specified above and at maturity or upon earlier redemption or
repayment, if applicable, commencing on the first Interest Payment Date next
succeeding the Original Issue Date (or, if the Original Issue Date is between a
Regular Record Date and the Interest Payment Date immediately following such
Regular Record Date, on the second Interest Payment Date following the Original
Issue Date), at a rate per annum equal to the Initial Base Rate specified above,
as adjusted by the addition or subtraction of the Spread, if any, specified
above and/or by the
<PAGE>

multiplication by the Spread Multiplier, if any specified above, until the first
Interest Reset Date following the Original Issue Date and, on and after such
Interest Reset Date, at the rate determined in accordance with the provisions
set forth herein, until the principal hereof is paid or made available for
payment, and (to the extent that the payment of such interest shall be legally
enforceable) at the last rate in effect prior to any payment default (or the
Default Rate per annum specified above, if such Default Rate is specified above)
on any overdue principal and premium, if any, and on any overdue installment of
interest. The interest so payable, and punctually paid or made available for
payment, on any Interest Payment Date will be paid to the person in whose name
this Senior Note (or any predecessor Senior Note) is registered at the close of
business on the Regular Record Date for such interest, which shall be the 15th
calendar day (whether or not a Business Day (as defined below)) before such
Interest Payment Date (unless otherwise specified on the face hereof); provided,
however, that interest payable at maturity or upon earlier redemption or
repayment, if applicable, will be payable to the person to whom principal shall
be payable.

     Payment of principal of, and premium, if any, and interest on, this Senior
Note will be made in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
The Bank will at all times appoint and maintain a paying agent (the "Paying
Agent") authorized by the Bank to pay the principal of, and premium, if any, and
interest on, this Senior Note on behalf of the Bank and having an office or
agency (the "Paying Agent Office") in The City of New York or the City of
Chicago, Illinois (the "Place of Payment"), where this Senior Note may be
presented or surrendered for payment and where notices, designations or requests
in respect of payments with respect to this Senior Note may be served.  The Bank
has initially appointed itself as such Paying Agent, with the Paying Agent
Office currently located at 50 South LaSalle Street (Level BB-A), Chicago,
Illinois 60675, Attention: Securities Services.

     THIS SENIOR NOTE IS A DIRECT, UNCONDITIONAL, UNSECURED AND UNSUBORDINATED
GENERAL OBLIGATION OF THE BANK AND DOES NOT EVIDENCE A DEPOSIT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.  THIS
SENIOR NOTE RANKS PARI PASSU WITH ALL OTHER UNSECURED AND UNSUBORDINATED

                                      -3-
<PAGE>

OBLIGATIONS OF THE BANK, EXCEPT DEPOSITS AND OTHER OBLIGATIONS THAT ARE SUBJECT
TO A PRIORITY OR PREFERENCE.  UNDER APPLICABLE LAW, CLAIMS OF CERTAIN CREDITORS,
INCLUDING HOLDERS OF DEPOSITS IN THE BANK, WOULD BE ENTITLED TO PRIORITY OVER
CLAIMS OF UNSECURED GENERAL CREDITORS OF THE BANK, INCLUDING THE HOLDER OF THIS
SENIOR NOTE, IN THE EVENT OF A LIQUIDATION OR OTHER RESOLUTION OF THE BANK.

     Payment of the principal of, and premium, if any, and interest on, this
Senior Note due at maturity or upon earlier redemption or repayment, if
applicable, will be made in immediately available funds upon presentation and
surrender of this Senior Note to the Paying Agent at the Paying Agent Office in
the Place of Payment; provided that this Senior Note is presented to the Paying
Agent in time for the Paying Agent to make such payment in accordance with its
normal procedures.  Payments of interest on this Senior Note (other than at
maturity or upon earlier redemption or repayment) will be made by wire transfer
to such account as has been appropriately designated to the Paying Agent by the
person entitled to such payments.

     This Senior Note is one of a duly authorized issue of Senior Bank Notes due
from 30 days to fifteen years from date of issue of the Bank (herein called the
"Senior Notes").

     Unless otherwise indicated on the face hereof, if the rate of interest on
this Senior Note resets daily, weekly or monthly the Interest Payment Date for
this Senior Note will be the third Wednesday of each month or the third
Wednesday of March, June, September and December of each year; if the rate of
interest on this Senior Note resets quarterly, the Interest Payment Date for
this Senior Note will be the third Wednesday of March, June, September and
December of each year; if the rate of interest on this Senior Note resets semi-
annually, the Interest Payment Date for this Senior Note will be the third
Wednesday of each of two months of each year specified on the face hereof that
are six months apart; and if the rate of interest on this Senior Note resets
annually, the Interest Payment Date for this Senior Note will be the third
Wednesday of the month specified on the face hereof.  If any Interest Payment
Date (unless it is also the Maturity Date) for this Senior Note falls on a day
that is not a Business Day, such Interest Payment Date will be postponed to the
next succeeding Business Day; provided, however, that if the

                                      -4-
<PAGE>

Interest Rate Basis specified on the face hereof is LIBOR and such next
succeeding Business Day is in the next succeeding calendar month, such Interest
Payment Date (unless it is also the Maturity Date) will be the immediately
preceding Business Day. If any Maturity Date or date of earlier redemption or
repayment of this Senior Note falls on a day that is not a Business Day, the
related payment of interest shall be made on the next succeeding Business Day
with the same force and effect as if made on the date such payment were due, and
no interest shall accrue on the amount so payable for the period from and after
such Maturity Date or date of earlier redemption or repayment. "Business Day"
means any day other than a Saturday, Sunday or a day on which banking
institutions in The City of New York or the City of Chicago, Illinois generally
are authorized or obligated by law or executive order to close, and with respect
to Senior Notes with respect to which the Interest Rate Basis specified on the
face hereof is LIBOR, any day on which dealings in U.S. dollars are transacted
in the London interbank market (a "London Business Day").

     This Senior Note will not be subject to any sinking fund.  If so provided
on the face of this Senior Note, this Senior Note may be redeemed by the Bank on
and after the Initial Redemption Date, if any, specified on the face hereof.  If
no Initial Redemption Date is specified on the face hereof, this Senior Note may
not be redeemed prior to the Maturity Date.  On and after the Initial Redemption
Date, if any, this Senior Note may be redeemed at any time either in whole or in
part from time to time in increments of $1,000 (provided that any remaining
principal amount hereof shall be at least $250,000) at the option of the Bank at
the applicable Redemption Price (as defined below), together with accrued and
unpaid interest hereon at the applicable rate borne by this Senior Note to the
date of redemption (each such date, a "Redemption Date"), on written notice
given not more than 60 nor less than 30 calendar days prior to the Redemption
Date by the Bank to the registered holder hereof.  Whenever less than all the
Senior Notes at any time outstanding are to be redeemed, the terms of the Senior
Notes to be so redeemed shall be selected by the Bank.  If less than all the
Senior Notes with identical terms at any time outstanding are to be redeemed,
the Senior Notes to be so redeemed shall be selected by the Paying Agent by lot
or in any usual manner approved by it.  In the event of redemption of this
Senior Note

                                      -5-
<PAGE>

in part only, a new Senior Note for the unredeemed portion hereof shall be
issued in the name of the holder hereof upon the surrender hereof.

     The "Redemption Price" shall initially be the Initial Redemption Percentage
specified on the face hereof of the principal amount of this Senior Note to be
redeemed and shall decline at each anniversary of the Initial Redemption Date
specified on the face hereof by the Annual Redemption Percentage Reduction, if
any, specified on the face hereof, of the principal amount to be redeemed until
the Redemption Price is 100% of such principal amount.

     This Senior Note may be subject to repayment at the option of the holder
hereof in accordance with the terms hereof on the Holder's Optional Repayment
Date(s), if any, specified on the face hereof.  If no Holder's Optional
Repayment Date is specified on the face hereof, this Senior Note will not be so
repayable at the option of the holder hereof prior to maturity.  On any Holder's
Optional Repayment Date, this Senior Note will be repayable in whole or in part
in increments of $1,000 (provided that any remaining principal amount hereof
will be at least $250,000) at the option of the holder hereof at a repayment
price equal to 100% of the principal amount to be repaid, together with accrued
and unpaid interest hereon payable to the date of repayment.  For this Senior
Note to be repaid in whole or in part at the option of the holder hereof on a
Holder's Optional Repayment Date, this Senior Note must be given, with the form
entitled "Option to Elect Repayment" below duly completed, to the Paying Agent
at its offices located at 50 South LaSalle Street (Level BB-A), Chicago,
Illinois  60675,  Attention:  Securities Services, or at such address which the
Bank shall from time to time notify the holders of the Senior Notes, not more
than 60 nor less than 30 days prior to such Holder's Optional Repayment Date.
Exercise of such repayment option by the holder hereof shall be irrevocable.

     The rate of interest on this Senior Note will be reset daily, weekly,
monthly, quarterly, semi-annually or annually (each such period, an "Interest
Reset Period" for this Senior Note, and the first calendar day of an Interest
Reset Period, an "Interest Reset Date"), as specified on the face hereof.
Unless otherwise indicated on the face hereof, if this Senior Note

                                      -6-
<PAGE>

resets daily, the Interest Reset Date will be each Business Day; if this Senior
Note resets weekly and the Interest Rate Basis is not the Treasury Rate, the
Interest Reset Date will be the Wednesday of each week; if this Senior Note
resets weekly and the Interest Rate Basis is the Treasury Rate, the Interest
Reset Date will be the Tuesday of each week (except as provided below); if this
Senior Note resets monthly, the Interest Reset Date will be the third Wednesday
of each month; if this Senior Note resets quarterly, the Interest Reset Date
will be the third Wednesday of March, June, September and December; if this
Senior Note resets semi-annually, the Interest Reset Date will be the third
Wednesday of each of two months of each year that are six months apart, as
specified on the face hereof; and if this Senior Note resets annually, the
Interest Reset Date will be the third Wednesday of one month of each year, as
specified on the face hereof; provided, however, that the base rate in effect
from the Original Issue Date to the first Interest Reset Date will be the
Initial Base Rate specified on the face hereof. If any Interest Reset Date with
respect to this Senior Note would otherwise be a day that is not a Business Day,
such Interest Reset Date will be the next succeeding Business Day, except that
in the case that the Interest Rate Basis specified on the face hereof is LIBOR,
if such Business Day is in the next succeeding calendar month, such Interest
Reset Date will be the immediately preceding Business Day.

     All calculations relating to this Senior Note will be made by the
"Calculation Agent."  The Bank will serve as Calculation Agent for this Senior
Note as of its Original Issue Date, unless otherwise specified on the face
hereof.  The Bank may appoint a different institution to serve as Calculation
Agent from time to time after the Original Issue Date of this Senior Note
without the consent of the holder and without notice.

     The Calculation Agent will determine the interest rate that takes effect on
an Interest Reset Date by reference to the Interest Determination Date.  Unless
otherwise specified on the face hereof, (i) if the Interest Rate Basis is not
LIBOR or the Treasury Rate, the Interest Determination Date will be the second
Business Day before the Interest Reset Date; (ii) if the Interest Rate Basis is
LIBOR, the Interest Determination Date will be the second London Business Day
(as defined below) preceding the Interest Reset Date; and (iii) if the Interest
Rate Basis is the

                                      -7-
<PAGE>

Treasury Rate, the Interest Determination Date will be the day of the week in
which the Interest Reset Date falls on which treasury bills -- i.e., direct
obligations of the U.S. government -- would normally be auctioned. Treasury
bills are usually sold at auction on the Monday of each week, unless that day is
a legal holiday, in which case the auction is usually held on the following
Tuesday but may be held on the preceding Friday. If as the result of a legal
holiday an auction is held on the preceding Friday, that Friday will be the
Treasury Interest Determination Date relating to the Interest Reset Date
occurring in the next succeeding week. If the auction is held on a day that
would otherwise be an Interest Reset Date, then the Interest Reset Date will
instead be the first Business Day following the auction date.

     Unless the Interest Rate is LIBOR, the Calculation Agent will calculate the
interest rate that takes effect on a particular Interest Reset Date no later
than the corresponding Interest Calculation Date.  The Interest Calculation Date
will be the earlier of (i) the tenth calendar day after the Interest
Determination Date or, if that tenth calendar day is not a Business Day, the
next succeeding Business Day, and (ii) the Business Day immediately preceding
the Interest Payment Date or the Maturity Date on which the next payment of
interest will be due.  The Calculation Agent need not wait until the relevant
Interest Calculation Date to determine the interest rate if the rate information
it needs to make the determination is available from the relevant sources
sooner.

     For each Interest Reset Period, the Calculation Agent will calculate the
amount of accrued interest by multiplying the face amount of this Senior Note by
an accrued interest factor for the Interest Reset Period.  This factor will
equal the sum of the interest factors calculated for each day during the
Interest Reset Period.  The interest factor for each day will be expressed as a
decimal and will be calculated by dividing the interest rate (also expressed as
a decimal) applicable to that day (i) by 360, if the Interest Rate Basis is the
Commercial Paper Rate, the Prime Rate, LIBOR, the CD Rate or the Federal Funds
Rate, or (ii) by the actual number of days in the year, if the Interest Rate
Basis is the Treasury Rate or the CMT Rate.

                                      -8-
<PAGE>

     Upon the request of the holder of this Senior Note, the Calculation Agent
will provide such holder with the interest rate then in effect for this Senior
Note and, if determined, the interest rate that will become effective on the
next Interest Reset Date.  The Calculation Agent's determination of any interest
rate, and its calculation of the amount of interest for any Interest Reset
Period, will be final and binding in the absence of manifest error.

     All percentages resulting from any calculation relating to this Senior Note
will be rounded upward or downward, as appropriate, to the next higher or lower
one hundred-thousandth of a percentage point.  For example, 9.876541% (or
 .09876541) would be rounded down to 9.87654% (or .0987654) and 9.876545% (or
 .09876545) would be rounded up to 9.87655% (or .0987655).  All amounts used in
or resulting from any calculation relating to this Senior Note will be rounded
upward or downward, as appropriate, to the nearest cent, with one-half cent or
more being rounded upward.

     In determining the Base Rate that applies this Senior Note during a
particular Interest Reset Period, the Calculation Agent may obtain rate quotes
from various banks or dealers active in the relevant market, as described in the
following subsections.  Those reference banks and dealers may include the
Calculation Agent itself, including the Bank, and its affiliates.

     Except as otherwise provided herein, the rate of interest on this Senior
Note for each Interest Reset Date will be the rate determined in accordance with
the provisions set forth under the applicable heading below corresponding to the
Interest Rate Basis specified on the face hereof.  Notwithstanding the
foregoing, the interest rate hereon shall not be greater than the Maximum
Interest Rate, if any, specified on the face hereof and shall not be lower than
the Minimum Interest Rate, if any, specified on the face hereof.  In addition,
the interest rate hereon will in no event be greater than the maximum rate
permitted by Illinois law, as the same may be modified by United States law of
general application.

     Commercial Paper Rate.  If the Interest Rate Basis of this Senior Note is
     ---------------------
the Commercial Paper Rate, this Senior Note will bear interest at a Base Rate
equal to the Commercial Paper Rate,

                                      -9-
<PAGE>

as adjusted by the Spread or Spread Multiplier, if any, specified on the face
hereof.

     The Commercial Paper Rate will be the Money Market Yield (as defined below)
of the rate, for the relevant Interest Determination Date, for commercial paper
having the Index Maturity (as defined below) specified on the face of this
Senior Note, as published in H.15(519) (as defined below) under the heading
"Commercial Paper -- Nonfinancial."  If the Commercial Paper Rate cannot be
determined as described above, the following procedures will apply:

          (i)   If the rate described above does not appear in H.15(519) at 3:00
     P.M., New York City time, on the relevant Interest Calculation Date (unless
     the calculation is made earlier and the rate is available from that source
     at that time), then the Commercial Paper Rate will be the rate, for the
     relevant Interest Determination Date, for commercial paper having the Index
     Maturity specified on the face of this Senior Note, as published in H.15
     Daily Update (as defined below) or another recognized electronic source
     used for displaying that rate, under the heading "Commercial Paper --
     Nonfinancial."

          (ii)  If the rate described above does not appear in H.15(519), H.15
     Daily Update or another recognized electronic source at 3:00 P.M., New York
     City time, on the relevant Interest Calculation Date (unless the
     calculation is made earlier and the rate is available from one of those
     sources at that time), the Commercial Paper Rate will be the Money Market
     Yield of the arithmetic mean of the offered rates, as of 11:00 A.M., New
     York City time, on the relevant Interest Determination Date, by three
     leading U.S. dollar commercial paper dealers in New York City selected by
     the Calculation Agent for U.S. dollar commercial paper that has the
     relevant Index Maturity and is placed for an industrial issuer whose bond
     rating is "AA", or the equivalent, from a nationally recognized rating
     agency.

          (iii) If fewer than three dealers selected by the Calculation Agent
     are quoting as described above, the Commercial Paper Rate for the new
     Interest Reset Period will be the rate in effect for the prior Interest
     Reset Period.

                                     -10-
<PAGE>

     LIBOR.  If the Interest Rate Basis of this Senior Note is LIBOR, this
     -----
Senior Note will bear interest at a Base Rate equal to LIBOR, as adjusted by the
Spread or Spread Multiplier, if any, specified on the face hereof.  LIBOR will
be the London interbank offered rate for deposits of U.S. dollars.  LIBOR will
be either (a) the offered rate appearing on the Telerate LIBOR Page (as defined
below) or (b) the arithmetic mean of the offered rates appearing on the Reuters
screen LIBOR Page (as defined below), unless that page by its terms cites only
one rate, in which case that rate; in either case, as of 11:00 A.M., London
time, on the relevant LIBOR Interest Determination Date, for deposits of U.S.
dollars having the relevant Index Maturity beginning on the relevant Interest
Reset Date.  If no reference page is specified on the face of this Senior Note,
the Telerate LIBOR Page will apply.  If LIBOR cannot be determined in this
manner, the following procedures will apply:

          (i)    If the Telerate LIBOR Page applies and the rate described above
     does not appear on that page, or if the Reuters Screen LIBOR Page applies
     and fewer than two of the rates described above appear on that page or no
     rate appears on any page on which only one rate normally appears, then
     LIBOR will be determined on the basis of the rates, at approximately 11:00
     A.M., London time, on the relevant LIBOR Interest Determination Date, at
     which deposits of U.S. dollars having the relevant Index Maturity,
     beginning on the relevant Interest Reset Date and in a Representative
     Amount (as defined below) are offered to prime banks in the London
     interbank market by four major banks in that market selected by the
     Calculation Agent.  The Calculation Agent will request the principal London
     office of each of these banks to provide a quotation of its rate.  If at
     least two quotations are provided, LIBOR for the relevant LIBOR Interest
     Determination Date will be the arithmetic mean of the quotations.

          (ii)   If fewer than two quotations are provided as described above,
     LIBOR for the relevant LIBOR Interest Determination Date will be the
     arithmetic mean of the rates for loans of U.S. dollars having the relevant
     Index Maturity, beginning on the relevant Interest Reset Date and in a
     Representative Amount to leading European banks quoted,

                                      -11-
<PAGE>

     at approximately 11:00 A.M., New York City time, on that LIBOR Interest
     Determination Date, by three major banks in New York City selected by the
     Calculation Agent.

          (iii)  If fewer than three banks selected by the Calculation Agent are
     quoting as described above, LIBOR for the new Interest Reset Period will be
     the rate in effect for the prior Interest Reset Period.

     Treasury Rate.  If the Interest Rate Basis of this Senior Note is the
     -------------
Treasury Rate, this Senior Note will bear interest at a Base Rate equal to the
Treasury Rate, as adjusted by the Spread or Spread Multiplier, if any, specified
on the face hereof.

     The Treasury Rate will be the rate for the auction, on the relevant
Treasury Interest Determination Date, of treasury bills having the Index
Maturity specified in the on the face of this Senior Note, as that rate appears
on Telerate Page (as defined below) 56 or 57 under the heading "Investment
Rate."  If the Treasury Rate cannot be determined in this manner, the following
procedures will apply:

          (i)    If the rate described above does not appear on either page at
     3:00 P.M., New York City time, on the relevant Interest Calculation Date
     (unless the calculation is made earlier and the rate is available from that
     source at that time), the Treasury Rate will be the Bond Equivalent Yield
     (as defined below) of the rate, for the relevant Interest Determination
     Date, for the type of treasury bill described above, as published in H.15
     Daily Update or another recognized electronic source used for displaying
     that rate, under the heading "U.S. Government Securities/Treasury
     Bills/Auction High."

          (ii)   If the rate described in the prior paragraph does not appear in
     H.15 Daily Update or another recognized electronic source at 3:00 P.M., New
     York City time, on the relevant Interest Calculation Date (unless the
     calculation is made earlier and the rate is available from one of those
     sources at that time), the Treasury Rate will be the Bond Equivalent Yield
     of the auction rate, for the relevant Treasury Interest Determination Date
     and for treasury bills

                                      -12-
<PAGE>

     of the kind described above, as announced by the U.S. Department of the
     Treasury.

          (iii)  If the auction rate described in the prior paragraph is not so
     announced by 3:00 P.M., New York City time, on the relevant Interest
     Calculation Date, or if no such auction is held for the relevant week, then
     the Treasury Rate will be the Bond Equivalent Yield of the rate, for the
     relevant Treasury Interest Determination Date and for treasury bills having
     a remaining maturity closest to the specified Index Maturity, as published
     in H.15(519) under the heading "U.S. Government Securities/Treasury
     Bills/Secondary Market."

          (iv)   If the rate described in the prior paragraph does not appear in
     H.15(519) at 3:00 P.M., New York City time, on the relevant Interest
     Calculation Date (unless the calculation is made earlier and the rate is
     available from one of those sources at that time), then the Treasury Rate
     will be the rate, for the relevant Treasury Interest Determination Date and
     for treasury bills having a remaining maturity closest to the specified
     Index Maturity, as published in H.15 Daily Update or another recognized
     electronic source used for displaying that rate, under the heading "U.S.
     Government Securities/Treasury Bills/Secondary Market."

          (v)    If the rate described in the prior paragraph does not appear in
     H.15 Daily Update or another recognized electronic source at 3:00 P.M., New
     York City time, on the relevant Interest Calculation Date (unless the
     calculation is made earlier and the rate is available from one of those
     sources at that time), the Treasury Rate will be the Bond Equivalent Yield
     of the arithmetic mean of the secondary market bid rates as of
     approximately 3:30 P.M., New York City time, on the relevant Treasury
     Interest Determination Date, of three primary U.S. government securities
     dealers in New York City selected by the Calculation Agent for the issue of
     treasury bills with a remaining maturity closest to the specified Index
     Maturity.

          (vi)   If fewer than three dealers selected by the Calculation Agent
     are quoting as described in the prior

                                      -13-
<PAGE>

     paragraph, the Treasury Rate in effect for the new Interest Reset Period
     will be the rate in effect for the prior Interest Reset Period.

     CMT Rate.  If the Interest Rate Basis of this Senior Note is the CMT Rate,
     --------
this Senior Note will bear interest at a Base Rate equal to the CMT Rate, as
adjusted by the Spread or Spread Multiplier, if any, specified on the face
hereof.

     The CMT Rate will be the rate displayed on the Designated CMT Telerate Page
(as defined below) under the heading ". . . Treasury Constant Maturities . . .
Federal Reserve Board Release H.15 . . . Mondays Approximately 3:45 P.M.," under
the column for the Designated CMT Index Maturity (as defined below), as follows:
(a) if the Designated CMT Telerate Page is Telerate Page 7051, the rate for the
relevant Interest Determination Date, or (b) if the Designated CMT Telerate Page
is Telerate Page 7052, the weekly or monthly average, as specified on the face
of this Senior Note, for the week that ends immediately before the week in which
the relevant Interest Determination Date falls, or for the month that ends
immediately before the month in which the relevant Interest Determination Date
falls, as applicable.  If the CMT Rate cannot be determined in this manner, the
following procedures will apply:

          (i)    If the applicable rate described above is not displayed on the
     relevant Designated CMT Telerate Page at 3:00 P.M., New York City time, on
     the relevant Interest Calculation Date (unless the calculation is made
     earlier and the rate is available from that source at that time), then the
     CMT Rate will be the applicable treasury constant maturity rate described
     above--that is, for the Designated CMT Index Maturity and for either the
     relevant Interest Determination Date or the weekly or monthly average, as
     applicable--as published in H.15(519).

          (ii)   If the applicable rate described above does not appear in
     H.15(519) at 3:00 P.M., New York City time, on the relevant Interest
     Calculation Date (unless the calculation is made earlier and the rate is
     available from one of those sources at that time), then the CMT Rate will
     be the treasury constant maturity rate, or other U.S. treasury rate, for
     the Designated CMT Index Maturity and with reference to the relevant
     Interest Determination Date, that

                                      -14-
<PAGE>

     (a) is published by the Board of Governors of the Federal Reserve System,
     or the U.S. Department of the Treasury, and (b) is determined by the
     Calculation Agent to be comparable to the applicable rate formerly
     displayed on the Designated CMT Telerate Page and published in H.15(519).

          (iii)    If the rate described in the prior paragraph does not appear
     at 3:00 P.M., New York City time, on the relevant Interest Calculation Date
     (unless the calculation is made earlier and the rate is available from one
     of those sources at that time), then the CMT Rate will be the yield to
     maturity of the arithmetic mean of the offered rates, as of approximately
     3:30 P.M., New York City time, on the relevant Interest Determination Date,
     of three primary U.S. government securities dealers in New York City
     selected by the Calculation Agent for the most recently issued treasury
     notes having an original maturity of approximately the Designated CMT Index
     Maturity and a remaining term to maturity of not less than the Designated
     CMT Index Maturity minus one year, and in a Representative Amount. In
     selecting these offered rates, the Calculation Agent will request
     quotations from five of these primary dealers and will disregard the
     highest quotation--or, if there is equality, one of the highest--and the
     lowest quotation--or, if there is equality, one of the lowest. Treasury
     notes are direct, non-callable, fixed rate obligations of the U.S.
     government.

          (iv)    If the Calculation Agent is unable to obtain three quotations
     of the kind described in the prior paragraph, the CMT rate will be the
     yield to maturity of the arithmetic mean of the offered rates, as of
     approximately 3:30 P.M., New York City time, on the relevant Interest
     Determination Date, of three primary U.S. government securities dealers in
     New York City selected by the Calculation Agent for treasury notes with an
     original maturity longer than the Designated CMT Index Maturity, with a
     remaining term to maturity closest to the Designated CMT Index Maturity and
     in a Representative Amount. In selecting these offered rates, the
     Calculation Agent will request quotations from five of these primary
     dealers and will disregard the highest quotation--or, if there is equality,
     one of the highest--and the lowest quotation--or, if there is equality, one
     of

                                      -15-
<PAGE>

     the lowest. If two treasury notes with an original maturity longer than the
     Designated CMT Index Maturity have remaining terms to maturity that are
     equally close to the Designated CMT Index Maturity, the Calculation Agent
     will obtain quotations for the treasury note with the shorter remaining
     term to maturity.

          (v)    If fewer than five but more than two of these primary dealers
     are quoting as described in the prior paragraph, then the CMT Rate for the
     relevant Interest Determination Date will be based on the arithmetic mean
     of the offered rates so obtained, and neither the highest nor the lowest of
     those quotations will be disregarded.

          (vi)   If two or fewer primary dealers selected by the Calculation
     Agent are quoting as described above, the CMT Rate in effect for the new
     Interest Reset Period will be the rate in effect for the prior Interest
     Reset Period.

     CD Rate.  If the Interest Rate Basis of this Senior Note is the CD Rate,
     -------
this Senior Note will bear interest at a Base Rate equal to the CD Rate, as
adjusted by the Spread or Spread Multiplier, if any, specified on the face
hereof.

     The CD Rate will be the rate, on the relevant Interest Determination Date,
for negotiable U.S. dollar certificates of deposit having the Index Maturity
specified on the face of this Senior Note, as published in H.15(519) under the
heading "CDs (Secondary Market)."  If the CD Rate cannot be determined in this
manner, the following procedures will apply:

          (i)    If the rate described above does not appear in H.15(519) at
     3:00 P.M., New York City time, on the relevant Interest Calculation Date
     (unless the calculation is made earlier and the rate is available from that
     source at that time), then the CD Rate will be the rate, for the relevant
     Interest Determination Date, described above as published in H.15 Daily
     Update or another recognized electronic source used for displaying that
     rate, under the heading "CDs (Secondary Market)."

          (ii)   If the rate described above does not appear in H.15(519), H.15
     Daily Update or another recognized

                                      -16-
<PAGE>

     electronic source at 3:00 P.M., New York City time, on the relevant
     Interest Calculation Date (unless the calculation is made earlier and the
     rate is available from one of those sources at that time), the CD Rate will
     be the arithmetic mean of the rates offered as of 10:00 A.M., New York City
     time, on the relevant Interest Determination Date, by three leading nonbank
     dealers in negotiable U.S. dollar certificates of deposit in New York City,
     as selected by the Calculation Agent for negotiable U.S. dollar
     certificates of deposit of major U.S. money center banks with a remaining
     maturity closest to the specified Index Maturity, and in a Representative
     Amount.

          (iii)  If fewer than three dealers selected by the Calculation Agent
     are quoting as described above, the CD Rate in effect for the new Interest
     Reset Period will be the rate in effect for the prior Interest Reset
     Period.

     Federal Funds Rate.  If the Interest Rate Basis of this Senior Note is the
     ------------------
Federal Funds Rate, this Senior Note will bear interest at a Base Rate equal to
the Federal Funds Rate, as adjusted by the Spread or Spread Multiplier, if any,
specified on the face hereof.

     The Federal Funds Rate will be the rate for U.S. dollar federal funds on
the relevant Interest Determination Date, as published in H.15(519) under the
heading "Federal Funds (Effective)," as that rate is displayed on Telerate Page
120.  If the Federal Funds Rate cannot be determined in this manner, the
following procedures will apply:

          (i)    If the rate described above is not displayed on Telerate Page
     120 at 3:00 P.M., New York City time, on the relevant Interest Calculation
     Date (unless the calculation is made earlier and the rate is available from
     that source at that time), then the Federal Funds Rate, for the relevant
     Interest Determination Date, will be the rate described above as published
     in H.15 Daily Update or another recognized electronic source used for
     displaying that rate, under the heading "Federal Funds (Effective)."

          (ii)   If the rate described above is not displayed on Telerate Page
     120 and does not appear in H.15 Daily Update

                                      -17-
<PAGE>

     or another recognized electronic source at 3:00 P.M., New York City time,
     on the relevant Interest Calculation Date (unless the calculation is made
     earlier and the rate is available from one of those sources at that time),
     the Federal Funds Rate will be the arithmetic mean of the rates for the
     last transaction in overnight, U.S. dollar federal funds arranged, before
     9:00 A.M., New York City time, on the relevant Interest Determination Date,
     by three leading brokers of U.S. dollar federal funds transactions in New
     York City selected by the Calculation Agent.

          (iii)  If fewer than three brokers selected by the Calculation Agent
     are quoting as described above, the Federal Funds Rate in effect for the
     new Interest Reset Period will be the rate in effect for the prior Interest
     Reset Period.

     Prime Rate.  If the Interest Rate Basis of this Senior Note is the Prime
     ----------
Rate, this Senior Note will bear interest at a Base Rate equal to the Prime
Rate, as adjusted by the Spread or Spread Multiplier, if any, specified on the
face hereof.

     The Prime Rate will be the rate, for the relevant Interest Determination
Date, published in H.15(519) under the heading "Bank Prime Loan."  If the Prime
Rate cannot be determined as described above, the following procedures will
apply.

          (i)    If the rate described above does not appear in H.15(519) at
     3:00 P.M., New York City time, on the relevant Interest Calculation Date
     (unless the calculation is made earlier and the rate is available from that
     source at that time), then the Prime Rate will be the rate, for the
     relevant Interest Determination Date, as published in H.15 Daily Update or
     another recognized electronic source used for the purpose of displaying
     that rate, under the heading "Bank Prime Loan."

          (ii)   If the rate described above does not appear in H.15(519), H.15
     Daily Update
     or another recognized electronic source at 3:00 P.M., New York City time,
     on the relevant Interest Calculation Date (unless the calculation is made
     earlier and the rate is available from one of those sources at that time),
     then the Prime Rate will be the

                                      -18-
<PAGE>

     arithmetic mean of the rates of interest publicly announced by each bank
     appearing on the Reuters Screen US PRIME 1 Page (as defined below) as that
     bank's prime rate or base lending rate, as of 11:00 A.M., New York City
     time, on the relevant Interest Determination Date.

          (iii)  If fewer than four of these rates appear on the Reuters Screen
     US PRIME 1 Page, the Prime Rate will be the arithmetic mean of the prime
     rates or base lending rates, as of the close of business on the relevant
     Interest Determination Date, of three major banks in New York City selected
     by the Calculation Agent.  For this purpose, the Calculation Agent will use
     rates quoted on the basis of the actual number of days in the year divided
     by a 360-day year.

          (iv)   If fewer than three banks selected by the Calculation Agent are
     quoting as described above, the Prime Rate for the new Interest Reset
     Period will be the rate in effect for the prior Interest Reset Period.

     Definitions of Terms Used in Interest Rate Bases.  The terms listed below
     ------------------------------------------------
are defined as follows:

     "Bond Equivalent Yield" means a yield expressed as a percentage and
calculated in accordance with the following formula:
               D x N       x 100
          ---------------
           360 - (D x M)

where (i) "D" means the annual rate for treasury bills quoted on a bank discount
basis and expressed as a decimal, (ii) "N" means the number of days in the year,
365 or 366, as the case may be, and (iii) "M" means the actual number of days in
the applicable Interest Reset Period.

     "Business Day" means, for purposes of calculating interest on this Senior
Note, a day that is a Monday, Tuesday, Wednesday, Thursday or Friday that is not
a day on which banking institutions in New York City generally are authorized or
obligated by law, regulation or executive order to close and, if the Interest
Rate Basis specified on the face hereof is LIBOR, is also a London Business Day.

                                      -19-
<PAGE>

     "Designated CMT Index Maturity" means the Index Maturity for a Note having
as its Interest Rate Basis the CMT Rate and will be the original period to
maturity of a U.S. treasury security--either 1, 2, 3, 5, 7, 10, 20 or 30
years--specified in the applicable pricing supplement. If no such original
maturity period is so specified, the Designated CMT Index Maturity will be 2
years.

     "Designated CMT Telerate Page" means the Telerate Page specified on the
face of this Senior Note (if the Interest Rate Basis is the CMT Rate) that
displays treasury constant maturities as reported in H.15(519).  If no Telerate
Page is so specified, then the applicable page will be Telerate Page 7052.  If
Telerate Page 7052 applies but this Senior Note does not specify whether the
weekly or monthly average applies, the weekly average will apply.

     "H.15(519)" means the weekly statistical release entitled "Statistical
Release H.15 (519)," or any successor publication, published by the Board of
Governors of the Federal Reserve System.

     "H.15 Daily Update" means the daily update of H.15(519) available through
the world wide web site of the Board of Governors of the Federal Reserve System,
at http://www.bog.frb.fed.us/releases/h15/update or any successor site or
publication.

     "Index Maturity" means the period to maturity of the instrument or
obligation on which the interest rate formula is based, as specified on the face
of this Senior Note.

     "London Business Day" means any day on which dealings in U.S. dollars are
transacted in the London interbank market.

     "Money Market Yield" means a yield expressed as a percentage and calculated
in accordance with the following formula:

              D x 360     x 100
          ---------------
           360 - (D x M)

where (a) "D" means the annual rate for commercial paper quoted on a bank
discount basis and expressed as a decimal, and (b) "M"

                                      -20-
<PAGE>

means the actual number of days in the relevant Interest Reset Period.

     "Representative Amount" means an amount that, in the Calculation Agent's
judgment, is representative of a single transaction in the relevant market at
the relevant time.

     "Reuters Screen LIBOR Page" means the display on the Reuters Monitor Money
Rates Service, or any successor service, on the page designated as "LIBO" or any
replacement page or pages on which London interbank rates of major banks for
U.S. dollars are displayed.

     "Reuters Screen US PRIME 1 Page" means the display on the "US PRIME 1" page
on the Reuters Monitor Money Rates Service, or any successor service, or any
replacement page or pages on that service, for the purpose of displaying prime
rates or base lending rates of major U.S. banks.

     "Telerate LIBOR Page" means Telerate Page 3750 or any replacement page or
pages on which London interbank rates of major banks for U.S. dollars are
displayed.

     "Telerate Page" means the display on Bridge Telerate, Inc., or any
successor service, on the page or pages specified in a Senior Note, or any
replacement page or pages on that service.

     References to particular headings on pages designated by the following
terms include any successor or replacement heading or headings as determined by
the Calculation Agent: CMT Telerate Page, H.15(519), H.15 Daily Update, Reuters
Screen LIBOR Page, Reuters Screen US PRIME 1 Page, Telerate LIBOR Page or
Telerate Page.

     If this Senior Note is an Original Issue Discount Note and if an Event of
Default with respect to the Senior Notes shall have occurred and be continuing,
the Default Amount (as defined hereafter) of this Senior Note may be declared
due and payable in the manner and with the effect provided herein.  The "Default
Amount" shall be equal to the adjusted issue price as of the first day of the
accrual period as determined under Treasury Regulation Section 1.1275-1(b) (or
successor regulation) under the United States Internal Revenue Code of 1986, as
amended, in

                                      -21-
<PAGE>

which the date of acceleration occurs increased by the daily portion of the
original issue discount for each day in such accrual period ending on the date
of acceleration, as determined under Treasury Regulation Section 1.1275-1(b) (or
successor regulation) under the United States Internal Revenue Code of 1986, as
amended. Upon payment of (i) the amount of principal or premium, if any, so
declared due and payable and (ii) interest on any overdue principal and overdue
interest or premium, if any (in each case to the extent that the payment of such
interest shall be legally enforceable), all of the Bank's obligations in respect
of the payment of the principal of, and interest or premium, if any, on, this
Senior Note shall terminate.

     In case any Senior Note shall at any time become mutilated, destroyed, lost
or stolen and such Senior Note or evidence satisfactory to the Bank of the loss,
theft or destruction thereof (together with indemnity satisfactory to the Bank
and such other documents or proof as may be required in the premises) shall be
delivered to the Bank, a new Senior Note of like tenor will be issued by the
Bank in exchange for the Senior Note so mutilated, or in lieu of the Senior Note
so destroyed or lost or stolen.  All expenses and reasonable charges associated
with procuring the indemnity referred to above and with the preparation,
authentication and delivery of a new Senior Note shall be borne by the holder of
the Senior Note so mutilated, destroyed, lost or stolen.  If any Senior Note
which has matured or is about to mature shall become mutilated, destroyed, lost
or stolen, the Bank may, instead of issuing a substitute Senior Note, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated Senior Note) upon compliance by the holder thereof with the
provisions of this paragraph.

     No recourse shall be had for the payment of the principal of, premium, if
any, or interest on, this Senior Note, for any claim based hereon, or otherwise
in respect hereof, against any shareholder, employee, officer or director, as
such, past, present or future, of the Bank or of any successor corporation,
either directly or through the Bank or any successor corporation, whether by
virtue of any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the

                                      -22-
<PAGE>

consideration for the issue hereof, expressly waived and released.

     The occurrence of any of the following events shall constitute an "Event of
Default" with respect to this Senior Note: (i) default in the payment of any
interest with respect to this Senior Note when due, which continues for 30 days;
(ii) default in the payment of any principal of, or premium, if any, on, this
Senior Note when due; (iii) the entry by a court having jurisdiction in the
premises of (a) a decree or order for relief in respect of the Bank in an
involuntary case or proceeding under any applicable United States federal or
state bankruptcy, insolvency, reorganization or other similar law or (b) a
decree or order appointing a conservator, receiver, liquidator, assignee,
trustee, sequestrator or any other similar official of the Bank, or of
substantially all of the property of the Bank, or ordering the winding up or
liquidation of the affairs of the Bank, and the continuance of any such decree
or order for relief or any such other decree or order unstayed and in effect for
a period of 60 consecutive days; or (iv) the commencement by the Bank of a
voluntary case or proceeding under any applicable United States federal or state
bankruptcy, insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated as bankrupt or insolvent, or the consent by the
Bank to the entry of a decree or order for relief in an involuntary case or
proceeding under any applicable United States federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding, or the filing by the Bank of a
petition or answer or consent seeking reorganization or relief under any
applicable United States federal or state law, or the consent by the Bank to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Bank or of substantially all of the property of the Bank, or the
making by the Bank of an assignment for the benefit of creditors, or the taking
of corporate action by the Bank in furtherance of any such action.  If an Event
of Default shall occur and be continuing, the holder of this Senior Note may
declare the principal amount of, and accrued interest and premium, if any, on,
this Senior Note due and payable immediately by written notice to the Bank.
Upon such declaration and notice, such principal amount, accrued interest and
premium, if any,

                                      -23-
<PAGE>

shall become due and payable seven calendar days after such notice. Any Event of
Default with respect to this Senior Note may be waived by the holder hereof.

     No provision of this Senior Note shall alter or impair the obligation of
the Bank, which is absolute and unconditional, to pay the principal, and
premium, if any, and interest on, this Senior Note in U.S. dollars at the times,
places and rate herein prescribed.

     The Bank shall cause to be kept at the corporate trust office of the Senior
Note Registrar designated below a register (the register maintained in such
corporate trust office or any other office or agency of the Bank in the Place of
Payment herein referred to as the "Senior Note Register") in which, subject to
such reasonable regulations as it may prescribe, the Bank shall provide for the
registration of the Senior Notes and of transfers of the Senior Notes.  The Bank
is hereby initially appointed "Senior Note Registrar" for the purposes of
registering the Senior Notes and transfers of the Senior Notes as herein
provided.

     The transfer of this Senior Note is registrable in the Senior Note
Register, upon surrender of this Senior Note for registration of transfer at the
office or agency of the Bank in the Place of Payment, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Bank
and the Paying Agent duly executed by, the holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Senior Notes of like tenor,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.  Notwithstanding the
foregoing, the Bank shall not be required to register the transfer of any Senior
Note that has been called for redemption during a period beginning at the
opening of business fifteen calendar days before the date of mailing of a notice
of such redemption and ending at the close of business on the date of such
mailing.

     No service charge shall be made for any such registration of transfer or
exchange, but the Bank may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.

                                      -24-
<PAGE>

     The Senior Notes are issuable only in registered form without coupons in
minimum denominations of $250,000 and any integral multiple of $1,000 in excess
thereof.  Each owner of a beneficial interest in this Senior Note is required to
hold a beneficial interest in $250,000 principal amount or any integral multiple
of $1,000 in excess thereof of this Senior Note at all times.

     Prior to due presentment of this Senior Note for registration of transfer,
the Bank, the Paying Agent or any agent of the Bank or the Paying Agent may
treat the person in whose name this Senior Note is registered as the owner
hereof for all purposes, whether or not this Senior Note be overdue, and neither
the Bank, the Paying Agent nor any such agent shall be affected by notice to the
contrary.

     All notices to the Bank under this Senior Note shall be in writing and
addressed to the Bank at 50 South LaSalle Street, Chicago, Illinois 60675, or to
such other address of the Bank as the Bank may notify the holders of the Senior
Notes.

     This Senior Note shall be governed by, and construed in accordance with,
the laws of the State of Illinois.

     IN WITNESS WHEREOF, the Bank has caused this instrument to be duly
executed.

                                                  THE NORTHERN TRUST COMPANY

                                                  By:___________________________
                                                     Authorized Signatory

                                      -25-
<PAGE>

                                 ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of the within Senior Note, shall be construed as though they were written out in
full according to applicable laws or regulations.

          TEN COM - as tenants in common

          TEN ENT - as tenants by the entireties

          JT TEN  - as joint tenants with right of survivorship and not as
                    tenants in common

UNIF GIFT MIN ACT - ____________     Custodian     ____________
                       (Cust)                        (Minor)

                       under Uniform Gifts to Minors Act

                       _________________________________
                                    (State)

                   Additional abbreviations may also be used
                         though not in the above list.

                                      -26-
<PAGE>

                                 ASSIGNMENT

          FOR VALVE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________

PLEASE INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

                        ------------------------------
                        ------------------------------

______________________________

______________________________
(Please print or typewrite name and address,
including postal zip code, of assignee)

______________________________

the within Senior Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ___

______________________________

______________________________
to transfer said Senior Note on the books of the Bank, with full power of
substitution in the premises.

Dated:________________________

                                             ___________________________________
                                             NOTICE: The signature to this
                                             assignment must correspond with the
                                             name as written upon the face of
                                             the within Senior Note in every
                                             particular, without alteration or
                                             enlargement or any change
                                             whatsoever.

                                      -27-
<PAGE>

                           OPTION TO ELECT REPAYMENT

     The undersigned hereby irrevocably request(s) and instruct(s) the Bank to
repay this Senior Note (or portion hereof specified below) pursuant to its terms
and at a price equal to 100% of the principal amount hereof to be repaid,
together with accrued and unpaid interest hereon, payable to the date of
repayment, to the undersigned, at ______________________________________________
________________________________________________________________________________
(Please print or typewrite name and address of the undersigned)

     For this Senior Note to be repaid, the undersigned must give to the Paying
Agent at its offices located at 50 South LaSalle Street (Level BB-A), Chicago,
Illinois 60675, Attention: Securities Services, or at such other place or places
of which the Bank shall from time to time notify the holders of the Senior
Notes, not more than 60 days nor less than 30 days prior to the date of
repayment, this Senior Note with this "Option to Elect Repayment" form duly
completed.

     If less than the entire principal amount of this Senior Note is to be
repaid, specify the portion hereof (which shall be increments of $1,000) which
the holder elects to have repaid and specify the denomination or denominations
(which shall be $250,000 or an integral multiple of $1,000 in excess thereof) of
the Senior Notes to be issued to the holder for the portion of this Senior Note
not being repaid (in the absence of any such specification, one such Senior Note
will be issued for the portion not being repaid):

$_______________

Dated:__________

                                             ___________________________________
                                             NOTICE: The signature on this
                                             "Option to Elect Repayment" form
                                             must correspond with the name as
                                             written upon the face of the within
                                             Senior Note in every particular,
                                             without alteration or enlargement
                                             or any change whatsoever.

                                      -28-

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