Document:

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                                                                    Exhibit 4.10

        THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A PUBLIC UTILITY
          THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS

  __________________________________________________________________________

                      OLD DOMINION ELECTRIC COOPERATIVE,
                                    GRANTOR
                                      TO
                                 CRESTAR BANK,
                                    TRUSTEE

                           ________________________

                         NINTH SUPPLEMENTAL INDENTURE
                         Dated as of November 1, 1999

                            ______________________

          Supplemental to the Indenture of Mortgage and Deed of Trust
                            dated as of May 1, 1992

    ______________________________________________________________________

                 A Mortgage of Both Real and Personal Property

          THIS INSTRUMENT IS EXEMPT FROM RECORDATION TAX PURSUANT TO
       VIRGINIA CODE SECTION 58.1-803.D. RECORDATION TAX HAS BEEN PAID
         IN THE OFFICE OF THE CLERK OF THE CIRCUIT COURT FOR HALIFAX
             COUNTY, VIRGINIA ON A SECOND SUPPLEMENTAL INDENTURE
                      RECORDED IN DEED BOOK ___, PAGE ___
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                         NINTH SUPPLEMENTAL INDENTURE

                           _________________________

     THIS NINTH SUPPLEMENTAL INDENTURE, dated as of November 1, 1999 (the "Ninth
Supplemental Indenture"), between Old Dominion Electric Cooperative, a Virginia
power supply cooperative (the "Company"), whose mailing address and address of
its chief executive office is Innsbrook Corporate Center, 4201 Dominion
Boulevard, Glen Allen, Virginia 23060, and Crestar Bank, a Virginia banking
corporation, as trustee (the "Trustee"), having its principal corporate trust
office at 919 East Main Street, Corporate Trust Department, Richmond, Virginia
23219.

     WHEREAS, the Company has heretofore executed and delivered an Indenture of
Mortgage and Deed of Trust, dated as of May 1, 1992 (herein sometimes called the
"Original Indenture"), to secure, as provided therein, its bonds (in the
Original Indenture and herein called the "Bonds"), to be designated generally as
its "First Mortgage Bonds", and to be issued in one or more series as provided
in the Original Indenture; and

     WHEREAS, the Original Indenture was recorded among the land records in the
counties of Halifax, Louisa, Spotsylvania and Orange, Virginia, and a UCC Form 1
concerning the Original Indenture was recorded among the financing statement
records at the Virginia State Corporation Commission and the Counties of
Henrico, Halifax, Louisa, Spotsylvania and Orange; and

     WHEREAS, the Company has heretofore executed and delivered a First
Supplemental Indenture, dated as of August 1, 1992 (hereinafter the "First
Supplemental Indenture"), its Second Supplemental Indenture dated as of December
1, 1992 (hereinafter called the "Second Supplemental Indenture"), its Third
Supplemental Indenture, dated as of May 1, 1993 (hereinafter called the "Third
Supplemental Indenture"), its Fourth Supplemental Indenture, dated as of
December 15, 1994 (hereinafter called the "Fourth Supplemental Indenture"), its
Fifth Supplemental Indenture, dated as of February 29, 1996 (hereinafter called
the "Fifth Supplemental Indenture"), its Sixth Supplemental Indenture, dated as
of November 28, 1997, (hereinafter called the "Sixth Supplemental Indenture"),
its Seventh Supplemental Indenture, dated as of November 1, 1998 (hereinafter
called the "Seventh Supplemental Indenture") and its Eighth Supplemental
Indenture, dated as of November 30, 1998 (hereinafter called the "Eighth
Supplemental Indenture") supplementing the Original Indenture, each of which,
with the exception of the Fourth Supplemental Indenture, provided for the
creation of a new series of Bonds which subjected, or intended to subject, to
the lien of the Original Indenture certain property described therein and was
recorded among the land records for the counties of Halifax, Louisa,
Spotsylvania and Orange, Virginia and among the financing statement records at
the Virginia State Corporation Commission and the Counties of Henrico, Halifax,
Louisa,

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Spotsylvania and Orange, Virginia, which recording offices will include the
recording offices in which this Ninth Supplemental Indenture will be recorded;
and

        WHEREAS, pursuant to the Original Indenture, the First Supplemental
Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture,
the Fifth Supplemental Indenture, the Sixth Supplemental Indenture, the Seventh
Supplemental Indenture and the Eighth Supplemental Indenture there have been
executed, authenticated, delivered and issued and there are now outstanding
First Mortgage Bonds of the series and in the principal amount as follows:

                           Principal    Principal
                            Amount       Amount
       Series               Issued     Outstanding
-----------------------  ------------  ------------

7.27% First Mortgage     $ 50,000,000  $          0
Bonds, 1992 Series A,
Due December 1, 1997

7.97% First Mortgage      l50,000,000   113,600,000
Bonds, 1992 Series A,
Due December 1, 2002

8.76% First Mortgage      350,000,000   271,200,000
Bonds, 1992 Series A,
Due December 1, 2022

First Mortgage Bonds,       1,203,638             0
1992 Series B, Due
September 15, 1992

First Mortgage Bonds,       1,203,637             0
1992 Series B, Due
December 15, 1992

First Mortgage Bonds,       1,203,637             0
1992 Series B, Due
March 15, 1993

First Mortgage Bonds,       1,203,638             0
1992 Series B, Due
June 15, 1993

First Mortgage Bonds,       l,203,638             0

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1992 Series B, Due
September 15, 1993

First Mortgage Bonds,       1,203,637             0
1992 Series B, Due
December 15, 1993

First Mortgage Bonds,         392,375             0
1992 Series B, Due
March 15, 1994

First Mortgage Bonds          392,376             0
1992 Series B, Due
June 15, 1994

First Mortgage Bonds          392,376             0
1992 Series B, Due
September 15, 1994

First Mortgage Bonds,         392,376             0
1992 Series B, Due
December 15, 1994

First Mortgage Bonds          392,375             0
1992 Series B, Due
March 15, 1995

First Mortgage Bonds,         392,376             0
1992 Series B, Due
June 15, 1995

First Mortgage Bonds          392,376             0
1992 Series B, Due
September 15, 1995

First Mortgage Bonds,         392,376             0
1992 Series B, Due
December 15, 1995

First Mortgage Bonds,         392,375             0
1992 Series B, Due
March 15, 1996

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First Mortgage Bonds,      392,376          0
1992 Series B, Due
June 15, 1996

First Mortgage Bonds,      392,376          0
1992 Series B, Due
September 15, 1996

4.90% First Mortgage     1,025,000          0
Bonds, 1992 Series C,
Due December 1, 1997

First Mortgage Bonds,      392,376          0
1992 Series B, Due
December 15,1996

5.20% First Mortgage     1,075,000          0
Bonds, 1992 Series C,
Due December 1, 1998

5.40% First Mortgage     1,130,000  1,130,000
Bonds, 1992 Series C,
Due December 1, 1999

5.50% First Mortgage     1,190,000  1,190,000
Bonds, 1992 Series C,
Due December 1, 2000

5.70% First Mortgage     1,255,000  1,255,000
Bonds, 1992 Series C,
Due December 1, 2001

5.90% First Mortgage     1,330,000  1,330,000
Bonds, 1992 Series C,
Due December 1, 2002

6.00% First Mortgage     1,405,000  1,405,000
Bonds, 1992 Series C,
Due December 1, 2003

6.10% First Mortgage     1,495,000  1,495,000
Bonds, 1992 Series C,
Due December 1, 2004

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6.35% First Mortgage       5,060,000    5,060,000
Bonds, 1992 Series C,
Due December 1, 2007

6.50% First Mortgage      10,845,000   10,845,000
Bonds, 1992 Series C,
Due December 1, 2012

6.00% First Mortgage      34,400,000    34,400,00
Bonds, 1992 Series C,
Due December 1, 2022

7.48% First Mortgage     130,000,000  129,000,000
Bonds, 1993 Series A,
Due December 1, 2013

7.78% First Mortgage     120,000,000  120,000,000
Bonds, 1993 Series A,
Due December 1, 2023

First Mortgage Bonds      25,565,962            0
1996 Series A, Due
February 28, 1997

First Mortgage Bonds         581,032            0
1996 Series B, Due
January 5, 1998

First Mortgage Bonds      10,649,541   10,649,541
1996 Series B, Due
April 15, 2018

First Mortgage Bonds      32,650,788   32,650,788
1996 Series B, Due
June 15, 2018

First Mortgage Bonds      32,650,788   32,650,788
1996 Series B, Due
September 15, 2018

First Mortgage Bonds      32,650,788   32,650,788
1996 Series B, Due
December 15, 2018

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4.90% First Mortgage          1,025,000  1,025,000
Bonds, 1997 Series A,
Due December 1, 2001

4.25% First Mortgage Bonds    1,075,000  1,075,000
1998 Series A, Due
December 1, 2002

4.25%First Mortgage Bonds     5,000,000  5,000,000
1998 Series B, Due
December 1, 2002

  WHEREAS, in connection with the construction of a two-unit, coal-fired
electric generating facility (the "Project") in Halifax County, Virginia (in
which the Company has an undivided 50% interest), the Company installed certain
solid waste disposal and sewerage facilities (the "Facilities").  Pursuant to a
loan agreement dated as of December 1, 1992 (the "Loan Agreement"), between the
Company and the Industrial Development Authority of Halifax County, Virginia
(the "Authority"), the Authority assisted the Company with the financing of the
Facilities by issuing its Exempt Facility Revenue Bonds (Old Dominion Electric
Cooperative Project), Series 1992, in an aggregate principal amount of
$60,210,000.00 (the "Series 1992 Tax-Exempt Bonds").  The Company's obligation
to repay the loan from the Authority is evidenced by a new series of Bonds
designated First Mortgage Bonds, 1992 Series C (the "1992 Series C Bonds"); and

  WHEREAS, pursuant to a Third Supplemental Loan Agreement dated as of November
17, 1999 (the "Third Supplemental Loan Agreement"), between the Authority and
the Company, the Authority has agreed to issue a new series of refunding revenue
bonds in an aggregate principal amount of $1,130,000 (the "Series 1999 Tax-
Exempt Bonds") to refund the December 1, 1999, maturity of the Series 1992 Tax-
Exempt Bonds.  The Company's obligation to repay the loan from the Authority in
connection with the Series 1999 Tax-Exempt Bonds shall be evidenced by a new
series of Bonds to be designated First Mortgage Bonds, 1999 Series A (the "1999
Series A Bonds"), which will replace and refund the December 1, 1999, maturity
of the 1992 Series C Bonds.

  WHEREAS, the Board of Directors of the Company has established the 1999
Series A Bonds and the Board of Directors of the Company has authorized an issue
of One Million One Hundred Thirty Thousand and no/100 Dollars ($1,130,000)
principal amount thereof, and the Company has complied or will comply with all
provisions required to issue Additional Bonds provided for in the Original
Indenture; and

  WHEREAS, the Company desires to execute and deliver this Ninth Supplemental
Indenture, in accordance with the provisions of the Original Indenture, for the
purposes, among others, of (i) providing for the creation of a new series of
Bonds, designating the series to be created and specifying the form and
provisions of the Bonds of such series (the

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Original Indenture, as heretofore and hereby supplemented and modified, being
herein sometimes called the "Indenture"), and (ii) modifying the terms,
provisions, restrictions or conditions of the Original Indenture; and

     WHEREAS, Section 13.01 of the Original Indenture provides that, without the
consent of the Holders of any of the Bonds at the time Outstanding, the Company,
when authorized by a Board Resolution and the Trustee, may enter into
supplemental indentures for the purposes and subject to the conditions set forth
in said Section 13.01; and

     WHEREAS, the Company proposes to modify the Original Indenture as provided
in Section 13.01; and

     WHEREAS, all acts and proceedings required by law and by the Articles of
Incorporation and Bylaws of the Company necessary to secure the payment of the
principal of (and premium, if any) and interest on the 1999 Series A Bonds, to
make the 1999 Series A Bonds to be issued hereunder, when executed by the
Company, authenticated and delivered by the Trustee and duly issued, the valid,
binding and legal obligations of the Company, and to constitute the Indenture a
valid and binding mortgage for the security of all of the Bonds, in accordance
with its and their terms, have been done and taken; and the execution and
delivery of this Ninth Supplemental Indenture has been in all respects duly
authorized;

     NOW, THEREFORE, THIS NINTH SUPPLEMENTAL INDENTURE WITNESSETH, that, to
secure the payment of the principal of (and premium, if any) and interest on the
Outstanding Secured Bonds, to confirm the lien of the Original Indenture upon
the Trust Estate mentioned therein including all property purchased, constructed
or otherwise acquired by the Company since the date of execution of the Original
Indenture, to secure performance of the covenants therein and herein contained,
to declare the terms and conditions on which the Outstanding Secured Bonds are
secured, and in consideration of the premises thereof and hereof and to modify
the Original Indenture, the Company by these presents does grant, bargain, sell,
alienate, remiss, release, convey, assign, transfer, mortgage, hypothecate,
pledge, set over and confirm to the Trustee, in trust, all property, rights,
privileges and franchises (other than Excepted Property) of the Company of the
character described in the Granting Clauses of the Original Indenture, including
all such property, rights, privileges and franchises acquired since the date of
execution of the Original Indenture, including, without limitation, all of those
fee and leasehold interests in real property, if any, which may hereafter be
constructed or acquired by it, but subject to all exceptions, reservations and
matters of the character therein referred to, and expressly excepting and
excluding from the lien and operation of the Indenture all properties of the
character specifically excepted by Subdivisions A through K of "Excepted
Property" in the Original Indenture to the extent contemplated thereby, and all
property heretofore released or otherwise disposed of pursuant to the provisions
of the Original Indenture.

     PROVIDED, HOWEVER, that (i) if, upon the occurrence of an Event of Default,
the Trustee, or any separate trustee or co-trustee appointed under Section 10.14
of the

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Original Indenture or any receiver appointed pursuant to statutory provision or
order of court, shall have entered into possession of all or substantially all
of the Trust Estate, all the Excepted Property described or referred to in
Subdivisions A through G, inclusive, of "Excepted Property" in the Original
Indenture then owned or thereafter acquired by the Company shall immediately,
and, in the case of any Excepted Property described or referred to in
Subdivisions H through J inclusive, of "Excepted Property" in the Original
Indenture, upon demand of the Trustee or such other trustee or receiver, become
subject to the lien of the Original Indenture to the extent permitted by law,
and the Trustee or such other trustee or receiver may, to the extent permitted
by law, at the same time likewise take possession thereof, and (ii) whenever all
Events of Default shall have been cured and the possession of all or
substantially all of the Trust Estate shall have been restored to the Company,
such Excepted Property shall again be excepted and excluded from the lien of the
Original Indenture to the extent and otherwise as hereinabove set forth and as
set forth in the Original Indenture.

     The Company may, however, pursuant to Granting Clause Third of the Original
Indenture, subject any Excepted Property to the lien of the Original Indenture,
whereupon the same shall cease to be Excepted Property.

     TO HAVE AND TO HOLD all said property, rights, privileges and franchises of
every kind and description, real, personal or mixed, hereby and hereafter (by
Supplemental Indenture or otherwise) granted, bargained, sold, alienated,
remised, released, conveyed, assigned, transferred, mortgaged, hypothecated,
pledged, set over or confirmed as aforesaid, or intended, agreed or covenanted
so to be, together with all the appurtenances thereto appertaining unto the
Trustee and its successors and assigns forever.

     SUBJECT, HOWEVER, to (i) Permitted Encumbrances (as defined in Section
1.01 of the Original Indenture), (ii) to the extent permitted by Section 14.06
of the Original Indenture, as to property acquired since the date of execution
of the Original Indenture, (a) any duly recorded or perfected prior mortgage or
other lien that may exist thereon at the date of the acquisition thereof by the
Company, and (b) purchase money mortgages created by the Company at the time of
acquisition thereof, and (iii) defects of title to and encumbrances on property
described in Article IV of the First Supplemental Indenture.

     BUT IN TRUST, NEVERTHELESS, with power of sale, for the equal and
proportionate benefit and security of the Holders from time to time of all the
Outstanding Secured Bonds without any priority of any such Bond over any other
such Bond and for the enforcement of the payment of such Bonds in accordance
with their terms.

     UPON CONDITION that, until the happening of an Event of Default (as defined
in Section 1.01 of the Original Indenture) and subject to the provisions of
Article Six of the Original Indenture, the Company shall be permitted to possess
and use the Trust Estate, except cash, securities and other personal property
deposited, or required to be deposited, with the Trustee and to explore for,
mine, extract and dispose of coal, ore, gas, oil and

                                       9
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other minerals, to harvest standing timber and to receive and use the rents,
issues, profits, revenues and other income, products and proceeds of the Trust
Estate.

     AND IT IS HEREBY COVENANTED AND DECLARED that all the Bonds are to be
authenticated and delivered and the Trust Estate is to be held and applied by
the Trustee, subject to the further covenants, conditions and trusts set forth
in the Original Indenture, and the Company does hereby covenant and agree to and
with the Trustee, for the equal and proportionate benefit of all Holders of the
Bonds as follows:

                                   ARTICLE 1

      BONDS OF THE 1998 SERIES A AND CERTAIN PROVISIONS RELATING THERETO

     Section 1.01

     (A) Terms of the 1999 Series A Bonds.  There be hereby established a series
of Bonds, known as and entitled "First Mortgage Bonds, 1999 Series A"
(hereinafter referred to as the "1999 Series A Bonds") and the form thereof
shall be substantially as set forth in Section 1.01 (D).  The aggregate
principal amount of 1999 Series A Bonds which may be authenticated and delivered
and outstanding at any one time is limited to One Million One Hundred Thirty
Thousand and no/100 Dollars ($1,130,000).  The Trustee is hereby appointed as
Authenticating Agent for the 1999 Series A Bonds.

     The 1999 Series A Bonds shall be issuable in fully registered form without
coupons and in denominations of $5,000 and integral multiples thereof.  Each
1999 Series A Bond shall be dated the date of its issuance and delivery.  The
1999 Series A Bonds shall bear interest from their date payable on June 1, 2000,
and on each of June 1 and December 1 of each year thereafter at the rate of
5.25% per annum and shall mature, subject to prior redemption, on December 1,
2002.

     The 1999 Series A Bonds shall be issued to and registered in the name of
the Authority and subsequently will be assigned by the Authority to the Bank of
New York, as trustee (the "Tax-Exempt Bond Trustee") pursuant to that certain
Indenture of Trust, dated as of December 1, 1992, between the Authority and the
Tax-Exempt Bond Trustee (as supplemental and amended by that certain Third
Supplemental Tax-Exempt Indenture of Trust, dated as of November 17, 1999, the
"Tax-Exempt Indenture") and will secure the obligations of the Company under the
Loan Agreement, as supplemented and amended by the Third Supplemental Loan
Agreement").

     The 1999 Series A Bonds shall be lettered "A".  The principal and interest
on the 1999 Series A Bonds shall be payable in lawful money of the United States
of America to the registered owner of the 1999 Series A Bonds or its assignee in
accordance with the

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provisions of the Third Supplemental Loan Agreement by wire transfer or other
method acceptable to such registered owner or its assignee in funds which will
be immediately available on the applicable principal and/or Interest Payment
Date or Redemption Date. Interest on the 1999 Series A Bonds shall be payable
without presentation of the 1999 Series A Bonds for payment. Payment of the
principal or Redemption Price of any 1999 Series A Bond shall be made by the
Company to the Tax-Exempt Bond Trustee upon presentation and surrender of such
Bond to the Trustee.

     The Regular Record Date referred to in Section 3.09 of the Original
Indenture for the payment of interest on the 1999 Series A Bonds shall be the
fifteenth day (whether or not a business day) of the calendar month next
preceding such Interest Payment Date.

    (B) Extraordinary Optional Redemption of 1999 Series A Bonds.

        (i)  The 1999 Series A Bonds are subject to extraordinary optional
redemption by the Company in whole at any time at a Redemption Price equal to
100% of the principal amount of such 1999 Series A Bonds, together with accrued
interest to the Redemption Date, upon the happening of any of the following
events:

             (a) Damage or destruction of the Facilities by fire or other
casualty to such extent that, or loss of title to or use of substantially all of
the Facilities as a result of the exercise of the power of eminent domain or
failure of title which, in the opinion of both the Company (expressed in a
certificate of an Officer of the Company) and an Engineer, both filed with the
Trustee and the Tax-Exempt Bond Trustee and, that (1) the Facilities cannot be
reasonably repaired, rebuilt or restored within a period of 12 months to their
condition immediately preceding such damage or destruction, or (2) the Company
is prevented from carrying on its normal operations at the Facilities for a
period of 12 months; or

             (b) A change in the Constitution of Virginia or of the United
States of America or a legislative or administrative action (whether local,
state or Federal) or a final decree, judgment or order of any court or
administrative body (whether local, state or Federal) contested by the Company
in good faith which causes (1) the Second Supplemental Loan Agreement or the
1999 Series A Bonds to become void or unenforceable or their performance in
accordance with the intent and purpose of the parties as expressed therein to be
impossible or (2) unreasonable burdens or excessive liabilities to be imposed on
the Authority or the Company.

       (ii)  The 1999 Series A Bonds are subject to extraordinary optional
redemption by the Company in part on any Interest Payment Date at a Redemption
Price equal to 100% of the principal amount of the 1999 Series A Bonds to be
redeemed, together with accrued interest to the Redemption Date in the event of
(i) damage or destruction to any part of the Facilities by fire or other
casualty or (ii) loss of title to any part of the Facilities as a result of the
exercise of eminent domain or failure of title, but only upon receipt by the
Trustee and the Tax-Exempt Bond Trustee of the following:

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                 (a)  A certificate of an Officer of the Company stating that
there has been either (x) damage or destruction of the Facilities by fire or
other casualty or (y) loss of title to any part of the Facilities as a result of
the exercise of eminent domain or failure of title and that it is not in the
best interest of the Company to rebuild such portion of the Facilities; and

                 (b)  An Opinion of Counsel stating that the use of the
condemnation award or insurance proceeds resulting from such casualty or loss of
title, for purposes other than (x) rebuilding, restoring or repairing the
Facilities, or (y) redeeming the Series 1999 Tax-Exempt Bonds would cause the
interest paid or payable on the Series 1999 Tax-Exempt Bonds (other than
interest paid to any "substantial user" of the Facilities or "related person" as
those terms are defined in Section 147(a) of the Internal Revenue Code of 1986,
as amended (the "Code")) to be includable in the gross income of a holder of
Series 1999 Tax-Exempt Bonds for Federal income tax purposes under the Code (or
for Virginia state income tax purposes).

          (iii)  To exercise its option to redeem the 1999 Series A Bonds, in
whole under subsection (B)(i), above, or in part under subsection (B)(ii),
above, the Company shall comply with the provisions of Article Seven of the
Original Indenture, if applicable, and shall within 120 days after the event
permitting its exercise, file the required documentation with the Trustee and
the Tax-Exempt Bond Trustee and specify a date not more than 60 days thereafter
for making such payments.

     (C)  Mandatory Redemption of the 1999 Series A Bonds.  The 1999
Series A Bonds are subject to mandatory redemption in whole as promptly as
possible, but no later than 180 days after the occurrence of any Determination
of Taxability, at a Redemption Price equal to 100% of the principal amount of
the 1999 Series A Bonds to be redeemed plus interest accrued to the Redemption
Date.  For purposes of this paragraph, "Determination of Taxability" shall mean
(i) any enactment or amendment of any applicable statute or regulation, or (ii)
a final decree or judgment of any federal court, a final determination by the
United States Internal Revenue Service or a final judgment or determination by
any court or agency of the Commonwealth of Virginia, with the effect that
interest paid or payable on the Series 1999 Tax-Exempt Bonds (other than
interest paid to any "substantial user" of the Facilities or "related person" as
those terms are defined in Section 147(a) of the Code) is or was includable in
the gross income of a Series 1998 Tax-Exempt Bondholder for Federal income tax
purposes under the Code (or for Virginia state income tax purposes).  A
Determination of Taxability does not include any tax upon interest payable on
exempt facility bonds under Section 142 of the Code and other statutes and
regulations in effect on the date of issuance of the Series 1999 Tax-Exempt
Bonds and does not include any change in tax rates.  A Determination of
Taxability will be deemed to have occurred on the date on which the Tax-Exempt
Bond Trustee is first notified in writing of any such enactment, amendment,
judgment, decree or determination.

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     (D) Form of 1999 Series A Bonds.  The 1999 Series A Bonds and the Trustee's
authentication certificate to be executed on the Bonds of said series shall be
substantially in the following form, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
the Original Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the Officers executing such Bonds, as
evidenced by their execution of such Bonds:

                          FORM OF 1999 SERIES A BONDS

          THIS FIRST MORTGAGE BOND, 1999 SERIES A, HAS NOT BEEN AND
         WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
         AMENDED, AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE
        TRANSFERRED WITHOUT REGISTRATION UNDER SUCH ACT OR IN RELIANCE
        UPON AN APPLICABLE EXEMPTION FROM REGISTRATION UNDER SUCH ACT.

                       Old Dominion Electric Cooperative
                      First Mortgage Bond 1999 Series A,
                             Due December 1, 2002

      No.                                                     $
                                                               _________________

       Old Dominion Electric Cooperative, a Virginia power supply cooperative
(herein called the "Company", which term includes any successor corporation
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to _____________, or registered assigns, the principal sum of
______________ Dollars on December 1, 2002, and to pay interest (computed on the
basis of a 360-day year of twelve 30-day months) thereon from the date of this
Bond or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually on June 1 and December 1 in each year,
commencing June 1, 2000, at the rate of  _______% per annum, until the principal
hereof is paid or made available for payment.  The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture (as defined herein), be paid to the Person in whose
name this Bond is registered on the date of business on the Regular Record Date
for such interest, which shall be the fifteenth day (whether or not a business
day), of the calendar month next proceeding such Interest Payment Date.  Any
such interest not so punctually paid or duly provided for will forthwith cease
to be payable to the Holder on such Regular Record Date and may either be paid
to the Person in whose name this Bond is registered at the close of business on
a Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Bonds of this series
not less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the provisions of the
Indenture and acceptable to the Holder hereof.

                                       13
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     If any principal of or premium, if any, or interest on this Bond is not
paid when due (whether at maturity, upon acceleration or call for redemption or
otherwise), then the overdue installments of principal and, to the extent
permitted by law, interest shall bear interest until paid at the interest rate
borne by this Bond.

     The principal of and premium, if any, and interest on this Bond shall be
payable in lawful money of the United States of America to the registered owner
hereof in accordance with the provisions of the Loan Agreement (as defined
herein) by wire transfer or other method acceptable to such registered owner in
funds which will be immediately available on the applicable principal and/or
interest payment date or redemption date.  Interest on this Bond shall be
payable without presentation hereof.  Payment of the principal and premium, if
any, on this Bond shall be made by the Company to the holder hereof upon
presentation and surrender of such Bond to Crestar Bank, Richmond, Virginia, as
trustee ("Trustee") under the Indenture.

     This Bond is one of a duly authorized issue of Bonds of the Company
designated as its "First Mortgage Bonds" (herein called the "Bonds") issued and
to be issued in one or more series (which may have varying terms) under, and all
equally and ratably secured by, an Indenture of Mortgage and Deed of Trust,
dated as of May 1, 1992 (herein called the "Indenture"), between the Company and
the Trustee to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the description of the properties thereby
mortgaged, pledged and assigned, the nature and extent of the security and the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Bonds and of the terms upon
which the Bonds are, and are to be, authenticated and delivered.  This Bond is
issued pursuant to the Ninth Supplemental Indenture, dated as of November 1,
1999 ("Ninth Supplemental Indenture"), between the Company and the Trustee.  The
Bonds are being issued to refund the December 1, 1999, maturity of the Company's
First Mortgage Bonds, 1992 Series C ("1992 Series C Bonds).  The 1992 Series C
Bonds were issued by the Company to repay a loan from the Industrial Development
Authority of Halifax County, Virginia ("Authority") made to the Company from the
proceeds of the Authority's $60,210,000 Exempt Facility Revenue Bonds (Old
Dominion Electric Cooperative Project) Series 1992 ("1992 Tax-Exempt Bonds") for
the purpose of acquiring, constructing and equipping certain solid waste and
sewage disposal facilities ("Facilities") for the Company pursuant to the Loan
Agreement, dated as of December 1, 1992 ("Loan Agreement"), between the Company
and the Authority.  The 1992 Tax-Exempt Bonds were issued pursuant to an
Indenture of Trust, dated as of December 1, 1992 (as amended and supplemented
"Tax-Exempt Indenture"), between the Authority and the Bank of New York, as
trustee ("Tax-Exempt Bond Trustee").  Pursuant to a Third Supplemental Loan
Agreement, dated as of November 17, 1999 ("Third Supplemental Loan Agreement"),
between the Authority and the Company and the Tax-Exempt Indenture, the
Authority has issued its Exempt Facility Refunding Revenue Bonds (Old Dominion
Electric Cooperative Project), Series 1999 ("1999 Tax-Exempt Bonds") in the
aggregate principal amount of $1,130,000, under that certain Third Supplemental
Tax-Exempt Indenture, dated as of November 17, 1999

                                       14
<PAGE>

("Third Supplemental Tax-Exempt Indenture"), between the Authority and the Tax-
Exempt Trustee.

     If at any time the amount held by the Tax-Exempt Bond Trustee in the Bond
Fund, as defined in the Tax-Exempt Indenture, should be sufficient to pay at the
times required the principal of, and premium, if any, and interest on the 1999
Tax-Exempt Bonds then remaining unpaid and to pay all fees and expenses of the
Tax-Exempt Bond Trustee accrued and to accrue through final payment of the 1999
Tax-Exempt Bonds, the Company shall not be obligated to make any further
payments hereunder, except to the extent losses may be incurred in connection
with investment of moneys in the Bond Fund.

     The Authority, by the execution of the Third Supplemental Tax-Exempt
Indenture and the assignment form at the foot of this Bond ("Assignment"), is
assigning this Bond and the payments thereon to the Tax-Exempt Trustee, acting
pursuant to the Third Supplemental Tax-Exempt Indenture, as security for the
1999 Tax-Exempt Bonds.  Payments of principal of, and premium, if any, and
interest on this Bond shall be made directly to the Tax-Exempt Bond Trustee for
the account of the Authority pursuant to such assignment and applied only to the
principal of, and premium, if any, and interest on the 1999 Tax-Exempt Bonds.
All obligations of the Company hereunder shall terminate when all sums due and
to become due pursuant to the Third Supplemental Tax-Exempt Indenture, this
Bond, the Third Supplemental Loan Agreement and the 1999 Tax-Exempt Bonds have
been paid or provided for in full.

     The Bond is subject to extraordinary optional redemption by the Company
in whole at any time at a Redemption Price equal to 100% of the principal amount
of such Bonds, together with accrued interest to the Redemption Date, upon the
happening of any of the following events:

          (a)  Damage or destruction of the Facilities by fire or other
casualty to such extent that, or loss of title to or use of substantially all of
the Facilities as a result of the exercise of the power of eminent domain or
failure of title which, in the opinion of both the Company (expressed in a
certificate of an Officer of the Company) and an Engineer, both filed with the
Trustee and the Tax-Exempt Bond Trustee, (1) the Facilities cannot be reasonably
repaired, rebuilt or restored within a period of 12 months to their condition
immediately preceding such damage or destruction, or (2) the Company is
prevented from carrying on its normal operations at the Facilities for a period
of 12 months; or

          (b)  A change in the Constitution of Virginia or of the United States
of America or a legislative or administrative action (whether local, state or
Federal) or a final decree, judgment or order of any court or administrative
body (whether local, state or Federal) contested by the Company in good faith
which causes (1) the Second Supplemental Loan Agreement or the 1999 Tax-Exempt
Bonds to become void or unenforceable or their performance in accordance with
the intent and purpose of the parties

                                       15
<PAGE>

as expressed therein to be impossible or (2) unreasonable burdens or excessive
liabilities to be imposed on the Authority or the Company.

     The Bond is subject to extraordinary optional redemption by the Company
in part on any Interest Payment Date at a Redemption Price equal to 100% of the
principal amount of the Bonds to be redeemed, together with accrued interest to
the Redemption Date in the event of (i) damage or destruction to any part of the
Facilities by fire or other casualty or (ii) loss of title to any part of the
Facilities as a result of the exercise of eminent domain or failure of title,
but only upon receipt by the Trustee and the Tax-Exempt Bond Trustee of the
following:

     (A) A certificate of an Officer of the Company stating that there has
been either (x) damage or destruction of the Facilities by fire or other
casualty or (y) loss of title to any part of the Facilities as a result of the
exercise of eminent domain or failure of title and that it is not in the best
interests of the Company to rebuild such portion of the Facilities; and

     (B) An opinion of counsel stating that the use of the condemnation award
or insurance proceeds resulting from such casualty or loss of title, for
purposes other than (x) rebuilding, restoring or repairing the Facilities, or
(y) redeeming the 1999 Tax-Exempt Bonds would cause the interest paid or payable
on the 1999 Tax-Exempt Bonds (other than interest paid to any "substantial user"
of the Facilities or "related person" as those terms are defined in Section
147(a) of the Internal Revenue Code of 1986, as amended, (the "Code")) to be
includable in the gross income of a holder of the 1999 Tax-Exempt Bonds for
federal income tax purposes under the Code (or for Virginia state income tax
purposes).

     To exercise such right of extraordinary redemption in whole or in part,
the Company shall comply with the provisions of Article Seven of the Indenture,
if applicable, and shall within 120 days after the event permitting its
exercise, file the required documentation with the Trustee and the Tax-Exempt
Bond Trustee and specify a date not more than 60 days thereafter for making such
payments.

     The Bonds are subject to mandatory redemption in whole as promptly as
possible, but not later than 180 days after the occurrence of any Determination
of Taxability (as defined in the Tax-Exempt Indenture) at a Redemption Price
equal to 100% of the principal amount of the Bonds to be redeemed plus interest
accrued to the Redemption Date.

     If the Bond is called for redemption, the Company has covenanted to cause
notice of the call for redemption to be given to each Holder of the Bond to be
redeemed at such Holder's address as the same shall last appear upon the Bond
Register, by first class mail at least 35 and no more than 60 days prior to the
Redemption Date.

                                       16
<PAGE>

     If an Event of Default with respect to the Bond shall occur and be
continuing, the principal of the Bond may be declared due and payable in the
manner and with the effect provided in the Indenture.

     The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of Bonds under the Indenture at any time
by the Company with the consent of the Holders of a majority in aggregate
principal amount of Bonds of all series at the time outstanding affected by such
modification.  The Indenture also contains provisions permitting the Holders of
a majority in principal amount of Bonds at the time outstanding, on behalf of
the Holders of all Bonds to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences.  Any such consent or waiver by the Holder of this Bond shall
be conclusive and binding upon such Holder and upon all future Holders of this
Bond and of any Bond issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Bond.

     No reference herein to the Indenture and no provision of this Bond or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, and premium, if any, and
interest on this Bond at the times, places and rates, and in the coin or
currency herein prescribed.

     As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Bond is registrable in the Bond Register, upon
surrender of this Bond for registration of transfer at the office or agency
maintained by the Bond Registrar in Richmond, Virginia, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Bond Registrar duly executed by the holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Bonds of this
series or authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.

     The Bonds of this series are issuable only in registered form without
coupons in denominations of $5,000 and any integral multiple thereof.  As
provided in the Indenture and subject to certain limitations therein set forth,
Bonds of this series are exchangeable for a like aggregate principal amount of
Bonds of this series of a different authorized denomination, but of the same
maturity, as requested by the Holder surrendering the same.

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

     Prior to due presentment of this Bond for registration of transfer and
subject to the Assignment, the Company, the Trustee and any agent of the Company
or the Trustee may treat the person in whose name this Bond is registered as the
owner hereof for all purposes,

                                       17
<PAGE>

whether or not this Bond be overdue, and neither the Company, the Trustee nor
any such agent shall be affected by notice to the contrary.

       Unless the context suggest otherwise, all capitalized terms used herein
and not otherwise defined shall have the same meaning assigned to them in the
Indenture.

                                       18
<PAGE>

       IN WITNESS THEREOF, the Company has caused this Bond to be duly executed.

       Dated:   ______________________

                                              OLD DOMINION ELECTRIC
                                                COOPERATIVE

                                              By: SPECIMAN
                                                  --------
                                                  Authorized Officer

                                       19
<PAGE>

                         CERTIFICATE OF AUTHENTICATION

       This is one of the Bonds of the series designated therein referred to in
the within-mentioned Indenture.

                                    CRESTAR BANK, a Virginia
                                      corporation, as Trustee

                              By:   SPECIMAN
                                    --------
                                    Authorized Signatory

                                       20
<PAGE>

                                  ASSIGNMENT

       The Industrial Development Authority of Halifax County, Virginia (the
"Authority"), hereby irrevocably assigns without recourse the foregoing Bond to
the Bank of New York, New York, New York (the "Tax-Exempt Bond Trustee"), as
trustee, acting pursuant to a Third Supplemental Indenture of Trust dated as of
November 17, 1999 (the "Third Supplemental Tax-Exempt Indenture"), between the
Authority and the Tax-Exempt Bond Trustee and hereby directs the Company, as the
issuer of this Bond, to make all payments of principal of, premium and interest
thereon directly to the Tax-Exempt Bond Trustee at its principal office in New
York, New York, or at such other place as the Tax-Exempt Bond Trustee may direct
in writing.  Such assignment is made as security for the payment of the
Authority's $1,130,000 Exempt Facility Refunding Revenue Bonds (Old Dominion
Electric Cooperative Project), Series 1999, issued pursuant to the Tax-Exempt
Indenture.

                          INDUSTRIAL DEVELOPMENT AUTHORITY OF
                          HALIFAX COUNTY, VIRGINIA

                          By:   SPECIMAN
                                --------
                                Chairman

                                       21
<PAGE>

                                  ARTICLE II

           PRINCIPAL AMOUNT PRESENTLY OUTSTANDING TO BE OUTSTANDING

     Section 2.01  Principal Amount Presently To Be Outstanding.  The total
aggregate principal amount of Bonds of the Company issued and outstanding and
presently to be issued and outstanding under the provisions of and secured by
the Indenture will be Eight Hundred Eight Million, Seven Hundred Forty-One
Thousand, Nine Hundred-Five Dollars ($808,741,905), namely Three Hundred Eighty-
Four Million, Eight Hundred Thousand Dollars ($384,800,000) principal amount of
First Mortgage Bonds, 1992 Series A, Fifty-eight Million, One Hundred Ten
Thousand Dollars ($58,110,000) principal amount of First Mortgage Bonds, 1992
Series C, Two Hundred Forty-Nine Million Dollars ($249,000,000) principal amount
of First Mortgage Bonds, 1993 Series A, One Hundred Nine Million, One Hundred
Eighty-Two Thousand, Nine Hundred Thirty-Seven Dollars ($108,601,905) principal
amount of First Mortgage Bonds, 1996 Series B, One Million Twenty-Five Thousand
Dollars ($1,025,000) principal amount of 1997 Series A Bonds, One Million
Seventy-Five Thousand Dollars ($1,075,000) principal amount of 1998 Series A
Bonds, Five Million Dollars ($5,000,000) principal amount of 1998 Series B Bonds
and now issued, outstanding and One Million One Hundred Thirty Thousand Dollars
($1,130,000) principal amount of 1999 Series A Bonds to be issued pursuant to
this Seventh Supplemental Indenture upon compliance by the Company with the
provisions of Section 5.01 and 5.02 and/or 5.03 and/or 5.04 of the Original
Indenture.

                                  ARTICLE III

                                 MISCELLANEOUS

     Section 3.01. This Ninth Supplemental Indenture is executed and shall be
construed as an indenture supplemental to the Original Indenture, and shall form
a part thereof, and the Original Indenture, as heretofore supplemented and as
hereby supplemented and modified, is hereby confirmed.  Except to the extent
inconsistent with the express terms hereof, all of the provisions, terms,
covenants and conditions of the Original Indenture shall be applicable to the
1999 Series A Bonds to the same extent as if specifically set forth herein.  All
capitalized terms used in this Ninth Supplemental Indenture shall be taken to
have the same meanings as in the Original Indenture, except in cases where the
context clearly indicates otherwise.

     Section 3.02. All recitals in this Ninth Supplemental Indenture are made by
the Company only and not by the Trustee; and all of the provisions contained in
the Original Indenture, in respect of the rights, privileges, immunities, powers
and duties of the Trustee shall be applicable in respect hereof as fully and
with like effect as if set forth herein in full.

     Section 3.03. Whenever in this Ninth Supplemental Indenture any of the
parties hereto is named or referred to, this shall, subject to the provisions of
Articles Ten and

                                       22
<PAGE>

Twelve of the Original Indenture, be deemed to include the successors and
assigns of such party, and all the covenants and agreements in this Ninth
Supplemental Indenture contained by or an behalf of the Company, or by or on
behalf of the Trustee shall, subject as aforesaid, bind and inure to the
respective benefits of the respective successors and assigns of such parties,
whether so expressed or not.

     Section 3.04. Nothing in this Ninth Supplemental Indenture, expressed or
implied, is intended, or shall be construed, to confer upon, or to give to, any
person, firm or corporation, other than the parties hereto and the Holders of
the Outstanding Bonds, any right, remedy or claim under or by reason of this
Ninth Supplemental Indenture or any covenant, condition, stipulation, promise or
agreement hereof, and all the covenants, conditions, stipulations, promises and
agreements in this Seventh Supplemental Indenture contained by or on behalf of
the Company shall be for the sole and exclusive benefit of the parties hereto,
and of the Holders of Outstanding Bonds.

     Section 3.05. This Ninth Supplemental Indenture may be executed in several
counterparts, each of such counterparts shall for all purposes be deemed to be
an original, and all such counterparts, or as many of them as the Company and
the Trustee shall preserve undestroyed, shall together constitute but one and
the same instrument.

     Section 3.06. Although this Ninth Supplemental Indenture is dated for
convenience and for the purpose of reference as of November 1, 1999, the actual
date or dates of execution by the Company and by the Trustee are as indicated by
their respective acknowledgments hereto annexed.

     Section 3.07. To the extent permitted by applicable law, this Ninth
Supplemental Indenture shall be deemed to be a Security Agreement and Financing
Statement whereby the Company grants to the Trustee a security interest in all
of the Trust Estate that is personal property or fixtures under the Uniform
Commercial Code, as adopted or hereafter adopted in one or more of the states in
which any part of the properties of the Company are situated.  The mailing
address of the Company, as debtor, is Innsbrook Corporate Center, 4201 Dominion
Boulevard, Glen Allen, Virginia 23060, and the mailing address of the Trustee,
as secured party, is Crestar Bank, Attention:  Corporate Trust Administration,
919 East Main Street, Richmond, Virginia 23219.

                   [SIGNATURES APPEAR ON THE FOLLOWING PAGE]

                                       23
<PAGE>

       IN WITNESS WHEREOF, the parties hereto have caused this Ninth
Supplemental Indenture to be duly executed as of the day and year first above
written.

Company:                           OLD DOMINION ELECTRIC COOPERATIVE
Innsbrook Corporate Center
4201 Dominion Boulevard
Glen Allen, Virginia 23060
                                   By:    ______________________________
                                          Name:   Daniel M. Walker
                                          Title:  Vice President of
                                                  Accounting and Finance

Trustee:                           CRESTAR BANK
919 East Main Street
Corporate Trust Department
Richmond, Virginia 23219
                                   By:   ____________________________
                                         Name:   J. Lee Judy
                                         Title:  Senior Vice President

                                       24
<PAGE>

                                ACKNOWLEDGMENT

COMMONWEALTH OF VIRGINIA          )
                                  )
CITY/COUNTY OF__________________  )

  The foregoing instrument was acknowledged before me this _____ day of
November, 1999, by Daniel M. Walker, the Vice President of Old Dominion Electric
Cooperative, a Virginia power supply cooperative.

                                  ____________________________________
                                  Notary Public

My Commission expires:  _____________________

                                ACKNOWLEDGMENT

COMMONWEALTH OF VIRGINIA          )
                                  )
CITY/COUNTY OF__________________  )

  The foregoing instrument was acknowledged before me this _____ day of
November, 1999, by J. Lee Judy, the Vice President of Crestar Bank, a Virginia
banking corporation, on behalf of the Bank.

                                  ____________________________________
                                  Notary Public

My Commission expires:  _____________________

                                       25EMPLOYMENT AGREEMENT

                  THIS AGREEMENT (the "Agreement") made effective as of the 30th
day of June, 1999 (the "Effective Date") by and between ERIE INDEMNITY  COMPANY,
a  Pennsylvania  corporation  with  its  principal  place of  business  at Erie,
Pennsylvania (the "Company"), and JEFFREY A. LUDROF (the "Executive");

                                   WITNESSETH:

                  WHEREAS,  the  Company has  determined  that it is in the best
interests of the Company and its shareholders to secure the continued employment
of the  Executive on the terms and subject to the  conditions  set forth in this
Agreement; and

                  WHEREAS,  the  Executive  desires  and is  willing  to  accept
employment with the Company on the terms and subject to the conditions set forth
herein;

                  NOW  THEREFORE,  in  consideration  of the premises and mutual
covenants  contained  herein,  and  intending to be legally  bound  hereby,  the
parties hereto agree as follows:

                  1. Term.  The Company hereby agrees to continue the employment
of the  Executive  and the  Executive  hereby  agrees to  continue  to serve the
Company pursuant to the terms and conditions of this Agreement as Executive Vice
President of the Company, or in such other position with the Company of at least
commensurate  responsibility and authority in all material respects,  for a term
commencing  on the  Effective  Date hereof and  expiring on December  15,  2000,
unless  earlier  terminated  pursuant to Section 5 hereof.  Notwithstanding  the
foregoing,  the Executive  shall serve in said  office(s) at the pleasure of the
Company's Board of Directors (the "Board of Directors") and the Executive may be
removed from said  office(s) at any time with or without  Cause,  as hereinafter
defined,  pursuant  to  Sections  5(b) or 5(d)  hereof;  provided  that any such
removal shall be without prejudice to any contract rights the Executive may have
hereunder.  Subject to Section  8(a)(6) and Section 8(b) hereof,  this Agreement
shall expire by its terms on December 15, 2000.

                  2.  Duties  and   Responsibilities.   The  Executive's  duties
hereunder shall be those which shall be prescribed by the Company's  Bylaws,  as
amended  from  time to time,  and by the  Board of  Directors  or any  committee
thereof from time to time and shall include such  executive  authority,  duties,
powers and  responsibilities  as customarily attend the office as Executive Vice
President of a company comparable to the Company.  The Executive shall discharge
such duties consistent with sound business  practices and in accordance with law
and the Company's general employment  policies,  in each case, as in effect from
time to time, in all material  respects and the Executive shall use best efforts
to promote the best interests of the Company. During the term of this Agreement,
the  Executive's  position  (including  the  Executive's  status  and  reporting
requirements), authority, duties, powers and responsibilities shall at all times
be at least  commensurate in all material  respects with the most significant of
those held, exercised or assigned to the Executive as of the Effective Date. The
Executive  shall  devote  the  Executive's  knowledge,  skill  and  all  of  the

                                       38
<PAGE>

Executive's  professional time,  attention and energies (reasonable absences for
vacations  and  illness  excepted),  to the  business of the Company in order to
perform such assigned  duties  faithfully,  competently  and  diligently.  It is
understood  and agreed  between the parties that the Executive may (i) engage in
charitable and community activities, including serving on boards of directors or
trustees of and holding other leadership  positions in non-profit  organizations
unless the objectives and  requirements  of such positions are determined by the
Board of Directors to be  inconsistent  with the  performance of the Executive's
duties  hereunder,  and,  (ii)  manage  personal  investments,  so  long as such
activities  do not  interfere or conflict with the  Executive's  performance  of
responsibilities and obligations hereunder. It is expressly agreed that any such
activities  engaged  in by the  Executive  as of the  Effective  Date  shall not
thereafter  be  deemed  to  interfere  with  the  Executive's   obligations  and
responsibilities  hereunder. The Executive agrees that the approval of the Board
of Directors or a committee thereof shall be required before the Executive first
accepts a position  as  director of any  for-profit  corporation  after the date
hereof.

                  3.       Compensation.  During the term of this Agreement, the
Executive shall receive, for all services  rendered  to  the Company  hereunder,
the  following   (hereinafter   referred  to  collectively  as "Compensation"):

                           (a)  Salary.  The  Executive  shall be paid an annual
                  base  salary at an annual  rate at least  equal to the  annual
                  rate being paid or payable to the  Executive by the Company in
                  the  month in which  the  Effective  Date  occurs,  with  such
                  increases  thereafter as shall be determined from time to time
                  to be fair and  reasonable by the Board of Directors or by the
                  Executive  Compensation  Committee  of the Board of  Directors
                  (the "Committee") in its discretion after taking into account,
                  among  other  things,  the  authority,   duties,   powers  and
                  responsibilities of the Executive's position,  the Executive's
                  performance,  the Company's  performance,  the compensation of
                  persons in  comparable  positions  at the Company and at other
                  comparable  companies,   and  the  effect  of  inflation.  The
                  Executive's  annual base salary shall not be reduced after any
                  such  increase.  The  Executive's  annual base salary shall be
                  payable in equal installments in accordance with the Company's
                  general salary payment  policies,  but no less frequently than
                  bi-weekly.

                           (b) Incentive  Compensation.  The Executive  shall be
                  eligible for awards under the Company's incentive compensation
                  plans, if any,  applicable to senior executive officers of the
                  Company   or  to  key   employees   of  the   Company  or  its
                  subsidiaries,   including,  but  not  limited  to,  management
                  incentive plans and stock option plans, in accordance with and
                  subject  to  the  terms  thereof   (including  any  provisions
                  providing  for  changes  in the  level  of or  termination  of
                  benefits  thereunder),   on  a  basis  commensurate  with  the
                  Executive's  position  and  authorities,  duties,  powers  and
                  responsibilities.

                           (c) Employee  Benefit  Plans.  The  Executive and the
                  Executive's  "dependents,"  as that term may be defined  under
                  the applicable employee benefit plan(s) of the Company,  shall
                  be included,  to the extent eligible thereunder and subject to
                  the terms of the plans  (including any provisions for changing
                  the level of or  termination of benefits  thereunder),  in all

                                       39
<PAGE>

                  plans,  programs  and  policies  which  provide  benefits  for
                  Company employees and their dependents on a basis commensurate
                  with the Executive's position and authorities,  duties, powers
                  and  responsibilities  including,  without limitation,  health
                  care  insurance,   health  and  welfare  plans,   pension  and
                  retirement  plans,  group life insurance  plans,  split dollar
                  life insurance plans,  short and long-term  disability  plans,
                  survivors' benefits, executive supplemental benefits, holidays
                  and other similar or comparable benefits made available to the
                  Company's    employees   and   senior    executive    officers
                  (hereinafter,  such  plans,  programs  and  policies  shall be
                  collectively  referred to as the "Erie Benefit  Plans").  Such
                  plans,  programs  and  policies  shall  include,  but  are not
                  limited  to,  the Erie  Insurance  Group  Retirement  Plan for
                  Employees, the Erie Insurance Group Employee Savings Plan, the
                  Erie  Insurance  Group  Deferred  Compensation  Plan, the Erie
                  Insurance  Group Split Dollar Life  Insurance  Plan,  the Erie
                  Insurance Group  Supplemental  Executive  Retirement Plan, and
                  the Erie Insurance Group Health Protection, Prescription Drug,
                  Dental Assistance and Vision Care Plans.

                           (d)  Perquisites.  The Executive shall be entitled to
                  all  perquisites  which the  Company  from time to time  makes
                  available to senior  executive  officers of the Company.  Such
                  perquisites  shall include,  but are not limited to,  parking,
                  club dues, tax preparation assistance,  and an annual physical
                  examination.

                           (e) Expenses and Working Facilities. The Executive is
                  hereby  authorized  to incur,  and shall be  reimbursed by the
                  Company for, any and all  reasonable  and  necessary  business
                  related expenses,  including, but not limited to, expenses for
                  business  travel,  entertainment,  gifts and similar  matters,
                  which  expenses are incurred by the Executive on behalf of the
                  Company  or any  of its  subsidiaries,  upon  presentation  of
                  itemized  accounts of such expenses in accordance with Company
                  policies.  The Executive shall be furnished during the term of
                  this  Agreement  with offices and other working  facilities in
                  the Company's  principal  executive  offices  located in Erie,
                  Pennsylvania  (or other  location of the  principal  executive
                  offices within the Erie metropolitan area) and secretarial and
                  other  assistance  suitable to the  Executive's  position  and
                  adequate for the performance of duties hereunder.

                           (f)      Performance  Appraisal.  The  Executive's
                  performance  may be evaluated by the Board of Directors or the
                  Committee  from time to time.  The Executive shall be entitled
                  to such additional  remuneration, including but not limited to
                  annual bonuses based on performance, as the Board of Directors
                  or the Committee may, in its discretion, determine from time
                  to time.

                  4.       Absences.  The  Executive  shall  be  entitled  to
vacations  in  accordance  with  the Company's vacation policy in effect from
time to time (but in no event shall the Executive be entitled to fewer  vacation
days than under the Company's  vacation policy as in effect on the Effective
Date) and to absences because of illness or other incapacity, and shall also be
entitled to such other absences, whether for holiday, personal time,
conventions,  or  for  any  other  purpose,  as  are  granted  to

                                      40
<PAGE>

the Company's other senior executive officers or as are approved by the Board of
Directors or the Committee, which approval shall not be unreasonably withheld.

                  5.       Termination.  The Executive's employment hereunder
may be terminated only as follows:

                           (a) Expiration of Term of Office. Upon the expiration
                  of the term of the  office(s) to which the  Executive has been
                  elected or  appointed  as set forth in  Section 1 hereof,  the
                  Board of Directors may (i) determine that the Executive should
                  not  continue  in such  office(s)  or (ii) that the  Executive
                  should not be elected or  appointed  to an office with duties,
                  authorities,  powers  and  responsibilities  that are at least
                  commensurate with those of said office(s), in either case, for
                  reasons  other  than  for  Cause  (if  the  reasons  for  such
                  noncontinuance,  nonreelection or nonreappointment  constitute
                  Cause, then Section 5(d) hereof will apply).

                           (b) By the Company Without Cause.  The Company may at
                  any  time  terminate  the  Executive's   employment  hereunder
                  without  Cause only by the  affirmative  vote of a majority of
                  the entire  Board of  Directors,  and upon no less than thirty
                  (30) days' prior written notice to the Executive.

                           (c)  By  the  Executive  Without  Good  Reason.   The
                  Executive may at any time terminate  employment  hereunder for
                  any reason upon no less than thirty (30) days' written  notice
                  to the Company. Section 5(e) shall apply to any termination of
                  employment by the Executive for Good Reason.

                           (d)  By  the  Company  For  Cause.  The  Company  may
                  terminate the Executive's  employment  hereunder for Cause. In
                  such event,  the Company  shall give to the  Executive  prompt
                  written  notice  (in  addition  to  any  notice  which  may be
                  required by Section 5(d)(1)  hereof)  specifying in reasonable
                  detail the basis for such  termination.  For  purposes of this
                  Agreement,  "Cause" shall mean any of the following conduct by
                  the Executive:

                                    (1)     The   deliberate   and   intentional
                                            breach of any material  provision of
                                            this    Agreement,    which   breach
                                            Executive  shall have failed to cure
                                            within   thirty   (30)  days   after
                                            Executive's   receipt   of   written
                                            notice from the  Company  specifying
                                            the    specific    nature   of   the
                                            Executive's breach;

                                    (2)     The   deliberate   and   intentional
                                            engaging  by   Executive   in  gross
                                            misconduct  that is  materially  and
                                            demonstrably  inimical  to the  best
                                            interests, monetary or otherwise, of
                                            the Company; or

                                       41
<PAGE>

                                    (3)     Conviction of a felony or conviction
                                            of any crime  involving  moral
                                            turpitude, fraud or deceit.

For purposes of this  definition,  no act, or failure to act, on the Executive's
part shall be considered "deliberate and intentional" unless done, or omitted to
be done, by the Executive not in good faith and without  reasonable  belief that
such action or omission was in the best interest of the Company.

                           (e) By the Executive  for Good Reason.  The Executive
                  may  terminate  employment  hereunder  for  Good  Reason  upon
                  providing thirty (30) days written notice to the Company after
                  the Executive  reasonably  becomes aware of the  circumstances
                  giving  rise  to  such  Good  Reason.  For  purposes  of  this
                  Agreement,  "Good Reason"  means the following  conduct of the
                  Company,  unless the Executive shall have consented thereto in
                  writing:

                                    (1)     Material   breach  of  any  material
                                            provision  of this  Agreement by the
                                            Company, which breach shall not have
                                            been  cured  by the  Company  within
                                            thirty  (30)  days  after  Company's
                                            receipt  from the  Executive  or the
                                            Executive's  agent of written notice
                                            specifying in reasonable  detail the
                                            nature of the Company's breach;

                                    (2)     The  assignment  to the Executive of
                                            any  duties   inconsistent   in  any
                                            material     respect     with    the
                                            Executive's  position (including any
                                            reduction of the Executive's  status
                                            and     reporting     requirements),
                                            authority,    duties,    powers   or
                                            responsibilities with the Company as
                                            contemplated  by  Section  2 of this
                                            Agreement,  or any  other  action by
                                            the Company,  including  the removal
                                            of the Executive from or any failure
                                            to   reelect   or   reappoint    the
                                            Executive to the office(s) specified
                                            in  Section  2  or  a   commensurate
                                            office(s)  (other  than for  Cause),
                                            which results in a diminution of the
                                            Executive's    authority,    duties,
                                            position,     responsibilities    or
                                            status,  excluding  for this purpose
                                            any  isolated,   insubstantial   and
                                            inadvertent  action  respecting  the
                                            Executive not taken in bad faith and
                                            which  is  remedied  by the  Company
                                            within   thirty   (30)  days   after
                                            receipt of written  notice  from the
                                            Executive to the Company;

                                    (3)     The  Company's   relocation  of  the
                                            Executive   out  of  the   Company's
                                            principal  executive  offices or the
                                            relocation    of    the    Company's
                                            principal  executive  offices  to  a
                                            location     outside    the    Erie,
                                            Pennsylvania    metropolitan   area,
                                            except   for   required   short-term
                                            travel  on the  Company's  behalf to
                                            the   extent   necessary   for   the
                                            Executive  to carry  out his  normal
                                            duties  in the  ordinary  course  of
                                            business;

                                       42
<PAGE>

                                    (4)     The failure of the Company to obtain
                                            the  assumption  in  writing  of its
                                            obligations    to    perform    this
                                            Agreement   by  any   successor   as
                                            provided  in  Section  14 hereof not
                                            less  than  five  days  prior  to  a
                                            merger,  consolidation  or  sale  as
                                            contemplated in Section 14; or

                                    (5)     A reduction in the overall  level of
                                            compensation  of the Executive.  For
                                            purposes of this  subsection  5, the
                                            following  shall  not  constitute  a
                                            reduction  in the  overall  level of
                                            compensation  of the Executive:  (i)
                                            changes  in  the  cash/stock  mix of
                                            compensation    payable    to    the
                                            Executive;  (ii) a reduction  in the
                                            overall level of compensation of the
                                            Executive resulting from the failure
                                            to achieve corporate,  business unit
                                            and/or individual  performance goals
                                            established    for    purposes    of
                                            incentive  compensation for any year
                                            or other  period;  provided that the
                                            aggregate    short-term    incentive
                                            opportunity,  when combined with the
                                            Executive's  base salary,  provides,
                                            in the aggregate, an opportunity for
                                            the  Executive  to  realize at least
                                            the    same    overall    level   of
                                            compensation  as  was  paid  in  the
                                            immediately  prior year or period at
                                            target   performance   levels;   and
                                            provided,  further, that such target
                                            performance levels are reasonable at
                                            all  times  during  the  measurement
                                            period, taking into account the fact
                                            that  one of the  purposes  of  such
                                            compensation   is  to   incent   the
                                            Executive;   (iii)   reductions   in
                                            compensation  resulting from changes
                                            to any Erie Benefit  Plan  (provided
                                            that  such  changes  are   generally
                                            applicable  to all  participants  in
                                            such Erie  Benefit  Plan);  and (iv)
                                            any combination of the foregoing.

                           (f) Disability. In the event that the Executive shall
                  be unable to perform the  Executive's  duties  hereunder  on a
                  full  time  basis  for a period  of one  hundred-eighty  (180)
                  consecutive  calendar  days by  reason  of  incapacity  due to
                  illness, accident or other physical or mental disability, then
                  the Company may, at its discretion,  terminate the Executive's
                  employment  hereunder if the  Executive,  within ten (10) days
                  after receipt of written notice of  termination  (which notice
                  may be given  before  or after the end of the  entire  180 day
                  period),  shall not have returned to the performance of all of
                  his duties hereunder on a full-time basis.

                           (g)      Death.  The  Executive's  employment  under
                  this Agreement shall terminate upon the Executive's death.

                           (h)      Mutual  Written  Agreement.  This  Agreement
                  and  the  Executive's  employment hereunder may be  terminated
                  at any time by the mutual  written  agreement of the Executive
                  and the Company.

                                       43
<PAGE>

         6.  Compensation  in the Event of  Termination.  In the event  that the
Executive's  employment  hereunder  terminates  prior to the  expiration of this
Agreement for any reason provided in Section 5 hereof, the Company shall pay the
Executive,  compensation and provide the Executive and the Executive's  eligible
dependents with benefits as follows:

                           (a) Executive's Nonreelection to Office;  Termination
                  By Company  Without  Cause;  Termination By Executive for Good
                  Reason. In the event that the Executive's employment hereunder
                  is terminated:  (i) because the Executive does not continue in
                  office pursuant to Section 5(a) hereof; or (ii) by the Company
                  without Cause pursuant to Section 5(b) hereof; or (iii) by the
                  Executive  for Good Reason  pursuant to Section  5(e)  hereof,
                  then in any such event the Company  shall pay or  provide,  as
                  applicable,  the  following  compensation  and benefits to the
                  Executive:

                                    (1)     Three (3) times the  following:  (A)
                                            the highest  annual base salary paid
                                            or payable to the  Executive  in the
                                            then  current year or any one (1) of
                                            the   three   (3)   calendar   years
                                            preceding Executive's termination of
                                            employment  hereunder;  plus  (B) an
                                            amount  equal  to  the  sum  of  the
                                            Executive's  highest  award(s) under
                                            the Company's Annual Incentive Plans
                                            for  any one  (1) of the  three  (3)
                                            calendar years preceding the date of
                                            the   termination   of   Executive's
                                            employment  hereunder (such total is
                                            referred   to  herein  as   "Covered
                                            Compensation").  Such payment to the
                                            Executive  by the  Company  shall be
                                            paid  in  a  lump  sum   unless  the
                                            Executive  elects,  and so  notifies
                                            the Company in writing  prior to the
                                            termination   of   the   Executive's
                                            employment  hereunder,   to  receive
                                            such  payment  in  three  (3)  equal
                                            annual installments. The lump sum or
                                            first  payment,  as the case may be,
                                            shall be paid within sixty (60) days
                                            after the date of the termination of
                                            the      Executive's      employment
                                            hereunder;

                                    (2)     Any awards or other  compensation to
                                            which  the   Executive  is  entitled
                                            under    any   of   the    Company's
                                            compensation  plans or Erie  Benefit
                                            Plans to the extent  not  covered in
                                            subsection (1) hereof;

                                    (3)     Any  award  to which  the  Executive
                                            would   be   entitled    under   the
                                            Company's  Long-Term  Incentive Plan
                                            as in effect on December  16,  1997,
                                            calculated  under the  provision  of
                                            that Plan as if the Executive ceases
                                            to be an  Employee of the Company by
                                            reason  of  death,   disability   or
                                            normal retirement;

                                       44
<PAGE>

                                    (4)     Continuing coverage for all purposes
                                            (including  eligibility,   coverage,
                                            vesting  and  benefit  accruals,  as
                                            applicable),  for a period  of three
                                            (3)  years  after  the  date  of the
                                            termination      of      Executive's
                                            employment hereunder,  to the extent
                                            not   prohibited  by  law,  for  the
                                            Executive   and   the    Executive's
                                            eligible dependents under all of the
                                            Erie  Benefit  Plans in  effect  and
                                            applicable   to  Executive  and  the
                                            Executive's  eligible  dependents as
                                            of the date of  termination.  In the
                                            event that the Executive  and/or the
                                            Executive's   eligible   dependents,
                                            because    of    the     Executive's
                                            terminated status, cannot be covered
                                            or fully covered under any or all of
                                            the Erie Benefit Plans,  the Company
                                            shall   continue   to  provide   the
                                            Executive   and/or  the  Executive's
                                            eligible  dependents  with  the same
                                            level  of such  coverage  in  effect
                                            prior to  termination,  payable from
                                            the general assets of the Company if
                                            necessary.    Notwithstanding    the
                                            foregoing,  the  Executive may elect
                                            (by  giving  written  notice  to the
                                            Company prior to the  termination of
                                            employment hereunder),  on a benefit
                                            by benefit basis, to receive in lieu
                                            of continuing  coverage,  cash in an
                                            amount  equal to the  present  value
                                            (using  a 6.5%  discount  rate  over
                                            three years) of the  projected  cost
                                            to the  Company  of  providing  such
                                            benefit for such three year  period.
                                            The  aggregate  amount  of  cash  to
                                            which  the   Executive  is  entitled
                                            pursuant to the  preceding  sentence
                                            shall be payable  by the  Company to
                                            the Executive within sixty (60) days
                                            after the date of the termination of
                                            Executive's   employment  hereunder;
                                            and

                                    (5)     For a  period  of  three  (3)  years
                                            after the date of the termination of
                                            Executive's   employment  hereunder,
                                            such   perquisites   as   are   made
                                            available to the Executive as of the
                                            date   of   the    termination    of
                                            Executive's employment hereunder.

The  Executive's  subsequent  death,  disability  or attainment of age 65 or any
other age shall in no way affect or limit the Company's  obligations  under this
Section 6(a).

                           (b)  Termination  By the  Company  for Cause.  In the
                  event  that  the  Company  shall   terminate  the  Executive's
                  employment  hereunder for Cause pursuant to Section 5(d), this
                  Agreement shall forthwith terminate and the obligations of the
                  parties hereto shall be as set forth in Section 8 hereof.

                           (c) Termination by the Executive Without Good Reason.
                  In the event that the  Executive  shall  terminate  employment
                  hereunder other than for Good Reason pursuant to Section 5(c),
                  this Agreement shall  forthwith  terminate and the obligations
                  of the  parties  hereto  shall be as set  forth in  Section  8
                  hereof.

                                       45
<PAGE>

                           (d) Disability.  In the event that the Company elects
                  to terminate the Executive's  employment hereunder pursuant to
                  Section 5(f), the Executive shall continue to receive from the
                  date of such  termination  through the expiration date of this
                  Agreement, sixty percent (60%) of the then current annual base
                  salary to which the Executive was entitled pursuant to Section
                  3(a)  hereof  immediately   preceding  such  termination,   in
                  accordance  with the  payroll  practices  of the  Company  for
                  senior executive officers,  reduced, however, by the amount of
                  any proceeds  from Social  Security and  disability  insurance
                  policies provided by and at the expense of the Company.

                           (e) Death. In the event of the death of the Executive
                  during the term of this  Agreement,  the then  current  annual
                  base salary to which the  Executive  was entitled  pursuant to
                  Section  3(a) hereof  immediately  preceding  the  Executive's
                  death shall be paid, in twelve (12) equal monthly installments
                  following  the  date  of  death,   to  the  last   beneficiary
                  designated  by the Executive  under the  Company's  group life
                  insurance  policy  maintained  by the  Company  or such  other
                  written designation  expressly provided to the Company for the
                  purposes  hereof or, failing either such  designation,  to the
                  Executive's estate.

                           (f)  Mutual  Written  Consent.  In the event that the
                  Executive  and the Company  shall  terminate  the  Executive's
                  employment by mutual written agreement,  the Company shall pay
                  such  compensation  and provide such benefits,  if any, as the
                  parties may mutually agree upon in writing.

The  Executive  shall not be  required  to  mitigate  the amount of any  payment
provided for in this Section 6 by seeking employment or otherwise, nor shall any
amounts  received from  employment  or otherwise by the Executive  offset in any
manner the obligations of the Company hereunder except as specifically  provided
in Section 6(d) hereof.

                  7. Certain Additional Payments by the Company. Notwithstanding
anything in this Agreement to the contrary,  in the event it is determined  that
any  payment  or  distribution  by the  Company  to or for  the  benefit  of the
Executive,  whether paid or payable or distributed or distributable  pursuant to
the terms of this Agreement or otherwise (a "Payment"), is subject to the excise
tax imposed by Section  4999 of the Internal  Revenue  Code of 1986,  as amended
(the "Code"), or any successor provision,  on excess parachute payments, as that
term is used  and  defined  in  Sections  4999 and  280G of the  Code,  then the
Executive  shall be  entitled  to receive  an  additional  payment (a  "Gross-Up
Payment")  in an amount equal to the then current rate of tax under said Section
4999  multiplied  by the total of the amounts so paid or payable,  including the
Gross-Up Payment, which are deemed to be a part of an excess parachute payment.

                  8.  Effect  of  Expiration  of  Agreement  or  Termination  of
Executive's  Employment.  Upon the  expiration of this Agreement by its terms or
the termination of the Executive's employment hereunder, neither the Company nor
the Executive shall have any remaining  duties or obligations  hereunder  except
that:

                                       46
<PAGE>

                           (a)      The Company shall:

                                    (1)     Pay the  Executive's  accrued salary
                                            and any other accrued benefits under
                                            Sections 3(a), (b), and (c) hereof;

                                    (2)     Reimburse the Executive for expenses
                                            already incurred in accordance with
                                            Section 3(e) hereof;

                                    (3)     Pay or  otherwise  provide  for  any
                                            benefits,  payments or  continuation
                                            or  conversion  rights in accordance
                                            with  the  provisions  of  any  Erie
                                            Benefit Plan of which the  Executive
                                            or any of the Executive's dependents
                                            is  or  was  a  participant   or  as
                                            otherwise required by law;

                                    (4)     Pay    the    Executive    and   the
                                            Executive's     beneficiaries    any
                                            compensation   and/or   provide  the
                                            Executive    or   the    Executive's
                                            eligible dependents any benefits, as
                                            the case  may be,  due  pursuant  to
                                            Section 6 or Section 7 hereof; and

                                    (5)     Unless   the   employment   of   the
                                            Executive  is   terminated   by  the
                                            Company for Cause, pay the Executive
                                            or the Executive's beneficiaries the
                                            full amount or amounts accrued under
                                            the      Supplemental      Executive
                                            Retirement  Plan of the Company (the
                                            "SERP")   as  in   effect   on   the
                                            Effective  Date (or as such benefits
                                            may  be   enhanced   by   subsequent
                                            amendments  or  supplements  to such
                                            SERP),   as   though,   solely   for
                                            purposes    of    determining    any
                                            otherwise    applicable    actuarial
                                            reduction factors,  the event of the
                                            termination      of      Executive's
                                            employment  hereunder or  expiration
                                            of this  Agreement  occurred  on the
                                            Executive's  Normal  Retirement Date
                                            as  defined  in such  SERP.  Accrued
                                            benefits  under  the  SERP  shall be
                                            fully vested and nonforfeitable upon
                                            such     termination      (including
                                            termination   on   account   of  the
                                            Executive's  death)  or  expiration.
                                            Any reductions in SERP benefits that
                                            would  otherwise  apply  pursuant to
                                            Section   10.1   of  the   Company's
                                            Retirement  Plan for  Employees  (or
                                            pursuant to any successor  provision
                                            of such plan or any successor  plan)
                                            relating  to  Section  415(b) of the
                                            Code  shall  not be  applicable  for
                                            purposes hereof. No further approval
                                            by the  Board  of  Directors  or the
                                            Committee  with  respect to payments
                                            under  the SERP in  accordance  with
                                            the  preceding  sentences  shall  be
                                            required.   Unreduced  payments  may
                                            begin  at age  55,  but in no  event
                                            would  payments  be made  under this
                                            Section 8(a)(5) before the Executive
                                            reaches  age  fifty-five  (55).  The
                                            Company   shall   purchase  for  the
                                            Executive,   naming  the   Executive
                                            and/or the Executive's  designee the

                                       47
<PAGE>

                                            owner,  a paid up  annuity,  from an
                                            insurer reasonably acceptable to the
                                            Executive but in any event having an
                                            A.M. Best rating of A+ or better (or
                                            other comparable rating),  that will
                                            pay to the Executive an amount equal
                                            to  the   benefit   to   which   the
                                            Executive    would    otherwise   be
                                            entitled  under the SERP and payable
                                            at the times such SERP benefit would
                                            be  payable in  accordance  with the
                                            provisions hereof. Upon the purchase
                                            and  delivery  to the  Executive  of
                                            such an annuity, the Executive shall
                                            release the Company from any further
                                            obligation   under  the  SERP.   The
                                            Company  further  agrees  to pay the
                                            Executive      immediately      upon
                                            termination,  a  cash  payment  (the
                                            "Tax Gross-up")  equal to the sum of
                                            the   following:   (i)   all   taxes
                                            (federal,  state, local, and payroll
                                            taxes) incurred and due and owing by
                                            the Executive, arising from the cost
                                            of  the  annuity  purchased  by  the
                                            Company to meet the  requirements of
                                            this Section  8(a)(5),  and (ii) any
                                            such  taxes  incurred  and  due  and
                                            owing  with  respect  to the  amount
                                            paid in (i).

                                    (6)     Continue to  remain  bound  by  the
                                            terms of Section 12 hereof.

                           (b) The Executive  shall remain bound by the terms of
                  Sections  9 and 13  hereof  for a period  of  thirty  six (36)
                  months  after the  expiration  of the  Agreement by its terms;
                  provided,  that the Executive  shall not be bound by the terms
                  of Section 9(b) after the  termination  of  employment  (other
                  than a termination  of the Executive by the Company for Cause)
                  if  such  termination  occurs  after  the  expiration  of this
                  Agreement by its terms.

                  9. Covenants as to  Confidential  Information  and Competitive
Conduct.  The  Executive  hereby  acknowledges  and agrees as follows:  (i) this
Section 9 is necessary for the protection of the legitimate  business  interests
of the Company, (ii) the restrictions contained in this Section 9 with regard to
geographical  scope,  length  of term and  types of  restricted  activities  are
reasonable;   (iii)  the  Executive  has  received  adequate  and  valuable  new
consideration  for  entering  into  this  Agreement,  and (iv)  the  Executive's
expertise  and  capabilities  are such that this  obligation  hereunder  and the
enforcement  hereof by  injunction or otherwise  will not  adversely  affect the
Executive's ability to earn a livelihood.

                           (a) Confidentiality of Information and Nondisclosure.
                  The  Executive  acknowledges  and agrees that the  Executive's
                  employment  by the Company  under this  Agreement  necessarily
                  involves   knowledge  of  and  access  to   confidential   and
                  proprietary  information  pertaining  to the  business  of the
                  Company  and  its  subsidiaries.  Accordingly,  the  Executive
                  agrees that at all times during the term of this Agreement and
                  at any time  thereafter,  the Executive will not,  directly or
                  indirectly,  without  the  express  written  approval  of  the
                  Company,   unless  directed  by  applicable   legal  authority

                                       48
<PAGE>

                  (including any court of competent  jurisdiction,  governmental
                  agency having  supervisory  authority over the business of the
                  Company   or  the   subsidiaries,   or  any   legislative   or
                  administrative  body  having  supervisory  authority  over the
                  business   of  the   Company  or  its   subsidiaries)   having
                  jurisdiction  over  the  Executive,  disclose  to or  use,  or
                  knowingly  permit to be so disclosed or used,  for the benefit
                  of himself, any person, corporation or other entity other than
                  the Company,  (i) any  information  concerning  any  financial
                  matters, customer relationships,  competitive status, supplier
                  matters,  internal organizational  matters,  current or future
                  plans, or other business affairs of or relating to the Company
                  or its subsidiaries, (ii) any management,  operational, trade,
                  technical   or  other   secrets   or  any  other   proprietary
                  information or other data of the Company or its  subsidiaries,
                  or (iii) any other  information  related to the Company or its
                  subsidiaries or which the Executive should reasonably  believe
                  will be damaging to the Company or its subsidiaries  which has
                  not been  published and is not generally  known outside of the
                  Company. The Executive  acknowledges that all of the foregoing
                  constitutes confidential and proprietary information, which is
                  the exclusive property of the Company.

                           (b) Restrictive Covenant. During the term of, and for
                  a period of one (1) year (the "Restrictive  Period") after the
                  termination of the  Executive's  employment  hereunder for any
                  reason  (other than a termination  of the Executive  hereunder
                  pursuant to Section 5(a), 5(b) or 5(e), hereof), the Executive
                  shall not render,  directly,  or  indirectly,  services to any
                  person, firm,  corporation,  association or other entity which
                  conducts  the same or similar  business  as the Company or its
                  subsidiaries  at the date of the  Executive's  termination  of
                  employment hereunder within the states in which the Company or
                  any of its subsidiaries is then licensed and doing business at
                  the  date  of  the   Executive's   termination  of  employment
                  hereunder  without the prior  written  consent of the Board of
                  Directors,  which may be  withheld in its  discretion.  In the
                  event the Executive  violates any of the provisions  contained
                  in this Section 9(b) hereof,  the Restrictive  Period shall be
                  increased by the period of time from the  commencement  by the
                  Executive of any violation until such violation has been cured
                  to the  satisfaction  of the Company.  The  Executive  further
                  agrees that at no time during the Restrictive  Period will the
                  Executive  attempt to directly or  indirectly  solicit or hire
                  employees of Company or its subsidiaries or induce any of them
                  to terminate  their  employment with the Company or any of the
                  subsidiaries.  Notwithstanding the foregoing,  the performance
                  by  the  Executive  of  rights  and  duties  under  an  agency
                  agreement  with the Company  shall not  constitute a breach of
                  this Section 9(b).

                           (c) Company Remedies.  The Executive acknowledges and
                  agrees  that any  breach  of this  Section  9 will  result  in
                  immediate and  irreparable  harm to the Company,  and that the
                  Company  cannot be  reasonably or  adequately  compensated  by
                  damages  in an action at law.  In the event of a breach by the
                  Executive  of the  provisions  of this  Section 9, the Company
                  shall be entitled, to the extent permitted by law, immediately
                  to cease to pay or provide the  Executive  or the  Executive's

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<PAGE>

                  dependents any  compensation  or benefit being, or to be, paid
                  or provided to the Executive  pursuant to Section 3, Section 6
                  or Section 8 of this Agreement,  and also to obtain  immediate
                  injunctive  relief  restraining  the Executive from conduct in
                  breach of the  covenants  contained in this Section 9. Nothing
                  herein  shall be  construed  as  prohibiting  the Company from
                  pursuing any other  remedies  available to it for such breach,
                  including the recovery of damages from the Executive.

                  10.  Resolution  of  Differences  Over  Breaches of Agreement.
Except as otherwise provided herein, in the event of any controversy, dispute or
claim arising out of, or relating to, this Agreement,  or the breach thereof, or
arising out of any other matter relating to the Executive's  employment with the
Company,  the  parties  may seek  recourse  only for  temporary  or  preliminary
injunctive  relief to the courts having  jurisdiction  thereof and if any relief
other than injunctive relief is sought, the Company and the Executive agree that
such  underlying  controversy,  dispute or claim shall be settled by arbitration
conducted  in Erie,  Pennsylvania  in  accordance  with this  Section 10 and the
Commercial  Arbitration Rules of the American  Arbitration  Association ("AAA").
The matter shall be heard and decided,  and awards  rendered by a panel of three
(3) arbitrators (the "Arbitration  Panel").  The Company and the Executive shall
each select one arbitrator from the AAA National Panel of Commercial Arbitrators
(the  "Commercial  Panel")  and AAA  shall  select a third  arbitrator  from the
Commercial Panel. The award rendered by the Arbitration Panel shall be final and
binding  as  between   the   parties   hereto   and  their   heirs,   executors,
administrators, successors and assigns, and judgment on the award may be entered
by any court  having  jurisdiction  thereof.  Except as  provided  in Section 11
hereof,  each party shall bear sole  responsibility  for all  expenses and costs
incurred by such party in connection  with the  resolution  of any  controversy,
dispute or claim in accordance with this Section 10.

                  11.  Payment of  Executive's  Legal Fees.  If the Executive is
required  to bring any action to enforce  rights or to collect  moneys due under
this  Agreement,  the Company  shall pay to the  Executive the fees and expenses
incurred by the  Executive in bringing and pursuing such action if the Executive
is successful, in whole or in part, on the merits or otherwise (including by way
of a settlement  involving a payment of money by the Company to the  Executive),
in such action.  The Company  shall pay such fees and expenses in advance of the
final  disposition  of such  action  upon  receipt  of an  undertaking  from the
Executive  to  repay  to the  Company  such  advances  if the  Executive  is not
ultimately successful,  in whole or in part, on the merits or otherwise, in such
action.

                  12.   Severance  Pay  upon  Termination  of  Employment  after
Expiration of the Agreement. Notwithstanding the expiration of this Agreement by
its terms and  notwithstanding  the terms of any corporate severance policy then
in effect and applicable to the Executive, if the employment of the Executive is
terminated  without  Cause by the Company,  by the  Executive for Good Reason or
upon the expiration of the term of the office(s) to which the Executive has been
elected or appointed  as set forth in Section 1 hereof (for  reasons  other than
for Cause),  in any case,  within thirty-six (36) months after the expiration of
this  Agreement by its terms,  then (i) the Company  shall pay to the  Executive
severance  compensation  in an amount  equal to two (2)  times  the  Executive's

                                       50
<PAGE>

Covered Compensation as determined on the date of such termination, and (ii) the
Executive  and  the  Executive's   eligible  dependents  shall  be  entitled  to
continuing  coverage  under  the  Company's  then-existing  group  health  plans
(including  medical,  dental,  prescription drug and vision plans, if any) for a
period of two (2) years  after the date of the  termination  of the  Executive's
employment, to the extent not prohibited by law and subject to the terms of such
plans  including  provisions as to  deductibles  and  copayments  and changes in
levels of coverage  that are generally  applicable to employees.  The payment to
the  Executive  by the  Company  pursuant  to  subsection  (i) of the  preceding
sentence  shall  be paid in a lump  sum  unless  the  Executive  elects,  and so
notifies  the  Company  in  writing  prior  to the  Executive's  termination  of
employment,  to receive such payment in two (2) equal annual  installments.  The
lump sum or first payment,  as the case may be, shall be paid within thirty (30)
days after the date of termination of the Executive's employment.

                  13. Release. The Executive hereby acknowledges and agrees that
neither the Company nor any of its  representatives  or agents will be obligated
to pay any compensation or benefit which the Executive has a right to be paid or
provided to the Executive or the Executive's  dependents  pursuant to Section 6,
Section 8 or Section 12 of this Agreement, unless the Executive, if requested by
the  Company in its sole  discretion,  executes  a release in a form  reasonably
acceptable to the Company,  which  releases any and all claims the Executive has
or  may  have  against  the  Company  or  its  subsidiaries,  agents,  officers,
directors, successors or assigns.

                  14.      Waiver.  The  waiver by a party  hereto of any breach
by the other party hereto of any provision of this  Agreement  shall not operate
or be construed as a waiver of any other or subsequent breach by a party hereto.

                  15. Assignment. This Agreement shall be binding upon and inure
to the benefit of the  successors  and assigns of the  Company,  and the Company
shall be obligated to require any successor to expressly  acknowledge and assume
its  obligations  hereunder.  This Agreement  shall inure to the extent provided
hereunder  to the  benefit  of  and  be  enforceable  by  the  Executive  or the
Executive's legal representatives, executors, administrators, successors, heirs,
distributees,  devisees and legatees.  The Executive may not delegate any of the
Executive's duties, responsibilities,  obligations or positions hereunder to any
person  and any such  purported  delegation  shall  be void and of no force  and
effect.

                  16.  Notices.  Any notices  required or  permitted to be given
under this  Agreement  shall be  sufficient  if in  writing,  and if  personally
delivered or when sent by first class  certified  or  registered  mail,  postage
prepaid,  return  receipt  requested--in  the  case  of  the  Executive,  to his
residence  address as set forth below,  and in the case of the  Company,  to the
address of its principal  place of business as set forth below, to the attention
of the  Chairman of the Board,  or in case the  Executive is the Chairman of the
Board, to the Chairman of the Compensation  Committee of the Board -- or to such
other  person or at such other  address with respect to each party as such party
shall notify the other in writing.

                  17.      Construction of Agreement.

                           (a)  Governing Law. This Agreement  shall be governed
                  by  and  construed  under  the laws of  the  Commonwealth of
                  Pennsylvania.

                                       51
<PAGE>

                           (b)  Severability.  In the event that any one or more
                  of the  provisions  of  this  Agreement  shall  be  held to be
                  invalid, illegal or unenforceable,  the validity,  legality or
                  enforceability  of the remaining  provisions  shall not in any
                  way be affected or impaired thereby.

                           (c) Headings. The descriptive headings of the several
                  paragraphs of this  Agreement are inserted for  convenience of
                  reference  only  and  shall  not  constitute  a part  of  this
                  Agreement.

                  18.  Entire  Agreement.  This  Agreement  contains  the entire
agreement of the parties concerning the Executive's employment and all promises,
representations,  understandings,  arrangements  and  prior  agreements  on such
subject  are  merged  herein  and  superseded  hereby.  The  provisions  of this
Agreement may not be amended, modified, repealed, waived, extended or discharged
except by an agreement in writing  signed by the party against whom  enforcement
of any  amendment,  modification,  repeal,  waiver,  extension  or  discharge is
sought.  No person  acting other than  pursuant to a resolution  of the Board of
Directors  or the  Committee  shall have  authority  on behalf of the Company to
agree to amend, modify, repeal, waive, extend or discharge any provision of this
Agreement or anything in reference  thereto or to exercise any of the  Company's
rights to terminate or to fail to extend this Agreement.

IN WITNESS WHEREOF,  the Company has caused this Agreement to be executed by its
officers thereunto duly authorized,  and the Executive has hereunto set his hand
all as of the day and year first above written.

ATTEST:                                     ERIE INDEMNITY COMPANY

/s/ J. R. Van Gorder               By:  /s/ F. William Hirt
    J. R. Van Gorder                        F. William Hirt
     Secretary                               Chairman of the Board

WITNESS:

/s/ Deborah Miller                      /s/ Jeffrey A. Ludrof
    Deborah Miller                          Jeffrey A. Ludrof
     Executive Secretary                    170 Gateway Drive
                                            Fairview, PA   16415

                                       52

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