MID-CAREER HIRE SUPPLEMENTAL RETIREMENT INCOME PLAN

                            FOR SELECTED EMPLOYEES OF

                  PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

                               AND ITS AFFILIATES






                                                       Effective January 1, 1996
                                                      As Amended January 1, 2000


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                                TABLE OF CONTENTS

Section 1.  Definitions...................................................2

Section 2.  Eligibility...................................................5

Section 3.  Supplemental Retirement Benefit...............................5

Section 4.  Supplemental Surviving Spouse Benefit.........................9

Section 5.  Administration of the Plan...................................10

Section 6.  Claims Procedure and Status Determination....................12

Section 7.  Amendment or Termination.....................................13

Section 8.  General Provisions...........................................13

Section 9.  Miscellaneous................................................16

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               MID-CAREER HIRE SUPPLEMENTAL RETIREMENT INCOME PLAN
                            FOR SELECTED EMPLOYEES OF
         PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED AND ITS AFFILIATES

     Public Service Electric and Gas Company previously established effective as
of January 1, 1997, and currently maintains, the Mid-Career Hire Supplemental
Retirement Income Plan for Selected Employees of Public Service Electric and Gas
Company and its Affiliates. Effective December 13, 1999, Public Service Electric
and Gas Company transferred sponsorship of the plan to Public Service Enterprise
Group Incorporated (the "Company") and the plan was renamed the "Mid-Career Hire
Supplemental Retirement Income Plan for Selected Employees of Public Service
Enterprise Group Incorporated and its Affiliates" (the "Plan"). Furthermore,
effective as of January 1, 2000, the Plan is hereby amended as set forth in this
document. This Plan was established for the purpose of assisting in attracting
and retaining a stable pool of key managerial and professional talent and
long-term key employee commitment by providing certain supplemental retirement
benefits based upon additional service credit for a selected number of key
employees who participate in the Pension Plan of Public Service Enterprise Group
Incorporated. This Plan is intended to constitute an unfunded plan of deferred
compensation for a select group of management or highly compensated employees
for purposes of Title 1 of ERISA.

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Section 1.  Definitions

     When used herein, the words and phrases hereinafter defined shall have the
following meanings unless a different meaning is clearly required by the context
of the Plan:

     1.1 "AFFILIATE" shall mean any organization which is a member of a
controlled group of corporations (as defined in Code Section 414(b), as modified
by Code Section 415(h)) which includes the Company; or any trades or businesses
(whether or not incorporated) which are under common control (as defined in Code
Section 414(c), as modified by Code Section 415(h)) with the Company; or a
member of an affiliated service group (as defined in Code Section 414(m)) which
includes the Company or any other entity required to be aggregated with the
Company as required by regulations promulgated pursuant to Code Section 414(o).

     1.2 "BENEFICIARY" shall mean any person or persons selected by a
Participant on a form provided by the Company who may become eligible to receive
the benefits provided under this Plan in the event of such Participant's death.

     1.3 "BOARD OF DIRECTORS" or "BOARD" shall mean the Board of Directors of
the Company.

     1.4 "CODE" shall mean the Internal Revenue Code of 1986, as amended, and as
same may be amended from time to time.

     1.5 "COMPANY" shall mean Public Service Enterprise Group Incorporated.

     1.6 "COMPENSATION" shall mean compensation as defined in the Reinstatement
Plan.

     1.7 "CREDITED SERVICE" shall mean the aggregate of all periods of
employment with the Company or an Affiliate or former Affiliate and all periods
of additional service credit granted by the Company for which a Participant will
be given credit in computing his Supplemental Retirement Benefit.

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     1.8 "EMPLOYEE BENEFITS COMMITTEE" or "COMMITTEE" shall mean the Employee
Benefits Committee of the Company.

     1.9 "EMPLOYEE BENEFITS POLICY COMMITTEE" or "POLICY COMMITTEE" shall mean
the Employee Benefits Policy Committee of the Company.

     1.10 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and as the same may be amended from time to time.

     1.11 "NORMAL RETIREMENT DATE" shall mean the first day of the month
coinciding with or next following a Participant's attainment of age 65.

     1.12 "PARTICIPANT" shall mean each employee or former employee of the
Company or a Participating Affiliate who is selected by the Chief Executive
Officer of the Company to participate in the Plan. The Chief Executive Officer
of the Company shall select such key employees of the Company and Participating
Affiliates upon such terms as he shall deem appropriate due to the employee's
responsibilities and opportunity to contribute to the financial and operating
objectives of the Company or Participating Affiliate.

     1.13 "PARTICIPATING AFFILIATE" shall mean any Affiliate of the Company
which (a) is the sponsor or a Participating Affiliate of the Reinstatement Plan;
(b) adopts this Plan with the approval of the Board of Directors; (c) authorizes
the Board of Directors and the Employee Benefits Committee to act for it in all
matters arising under or with respect to this Plan; and (d) complies with such
other terms and conditions relating to this Plan as may be imposed by the Board
of Directors.

     1.14 "PENSION PLAN" shall mean the Pension Plan of Public Service
Enterprise Group Incorporated (formerly known as the "Pension Plan of Public
Service Electric and Gas Company"), and each successor or replacement plan.

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     1.15 "PLAN" shall mean this Mid-Career Hire Supplemental Retirement Income
Plan for Selected Employees of Public Service Enterprise Group Incorporated and
its Affiliates (formerly known as the "Mid-Career Hire Supplemental Retirement
Income Plan for Selected Employees of Public Service Electric and Gas Company
and its Affiliates").

     1.16 "PLAN YEAR" shall mean the calendar year.

     1.17 "REINSTATEMENT PLAN" shall mean the Retirement Income Reinstatement
Plan for Non-Represented Employees of Public Service Enterprise Group
Incorporated and its Affiliates (formerly known as the "Retirement Income
Reinstatement Plan for Non-Represented Employees of Public Service Electric and
Gas Company and its Affiliates").

     1.18 "REINSTATEMENT PLAN RETIREMENT BENEFIT" shall mean the aggregate
annual benefit payable to a Participant pursuant to the Reinstatement Plan by
reason of his termination of employment with the Company and all Affiliates for
any reason other than death.

     1.19 "REINSTATEMENT PLAN SURVIVING SPOUSE BENEFIT" shall mean the aggregate
annual benefit payable to the Surviving Spouse of a Participant pursuant to the
Reinstatement Plan in the event of the death of the Participant at any time
prior to commencement of payment of his Reinstatement Plan Retirement Benefit.

     1.20 "SUPPLEMENTAL RETIREMENT BENEFIT" shall mean the benefit payable to a
Participant pursuant to this Plan by reason of his termination of employment
with the Company and all Affiliates for any reason other than death.

     1.21 "SURVIVING SPOUSE" shall mean a person who is married to a Participant
at the date of his death.

     1.22 "YEAR OF SERVICE" shall mean Year of Service as defined in the Pension
Plan.

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     1.23 "SUPPLEMENTAL SURVIVING SPOUSE BENEFIT" shall mean the benefit payable
to a Surviving Spouse pursuant to this Plan.

Section 2.  Eligibility

     2.1 A Participant who is selected by the Chief Executive Officer of the
Company to participate in this Plan shall be eligible to receive a Supplemental
Retirement Benefit. The Surviving Spouse of a Participant described in the
preceding sentence who dies prior to commencement of payment of his
Reinstatement Plan Retirement Benefit shall be eligible to receive a
Supplemental Surviving Spouse Benefit.

     2.2 Upon selection for participation in the Plan, the Chief Executive
Officer shall designate the number of years of additional Credited Service to
which such Participant shall be entitled to be credited in calculating his
Supplemental Retirement Benefit under this Plan. The Chief Executive Officer
shall notify the Vice President - Human Resources in writing of such selection
and designation.

Section 3. Supplemental Retirement Benefit

     3.1 The Supplemental Retirement Benefit payable to an eligible Participant
shall be equal to the excess of (a) over (b) where:

          (a) is the sum of the amount of Pension Plan Retirement Benefit and
     Reinstatement Plan Retirement Benefit to which the Participant would have
     been entitled under the Pension Plan and the Reinstatement Plan if such
     benefits were computed with the additional years of Credited Service
     provided for in this Plan; and

          (b) is the sum of the Pension Plan Retirement Benefit and
     Reinstatement Plan Retirement Benefit actually payable to the Participant
     or payable to a third party on the Participant's behalf.

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     The amounts described in (a) and (b) shall be computed as of the date of
termination of employment of the Participant with the Company and all Affiliates
in the form of a single life annuity payable over the lifetime of the
Participant only commencing on his Normal Retirement Date.

     3.2. The Supplemental Retirement Benefit payable to a Participant shall be
paid in the same form under which the Pension Plan Retirement Benefit or
Reinstatement Plan Retirement Benefit, as applicable, is payable to the
Participant (including the election to receive a lump sum distribution of the
present value of any benefit). The Participant's election under the Pension Plan
of any optional form of payment of his Pension Plan Retirement Benefit (with the
valid consent of his spouse where required under the Pension Plan) shall also be
applicable to the payment of his Supplemental Retirement Benefit hereunder.

     3.3 Payment hereunder of the Supplemental Retirement Benefit to a
Participant shall commence on the same date as payment of the Pension Plan
Retirement Benefit or Reinstatement Plan Retirement Benefit, as applicable, to
the Participant commences.

     3.4 (a) Notwithstanding the provisions of Sections 3.2 and 3.3 above, an
election made by the Participant with respect to the form of payment of his
retirement benefits under the Pension Plan and Reinstatement Plan, or the date
for commencement of payment thereof, shall not be effective with respect to the
form of payment or date for commencement of payment of his Supplemental
Retirement Benefit hereunder unless such election is expressly approved by the
Committee with respect to his Supplemental Retirement Benefit; provided,
however, that notwithstanding any other provision of this Plan, no such approval
shall be required from and after the occurrence of a Change in Control (as
defined below). If the Committee shall not approve such election, then the form
of payment or date for commencement of payment of the

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Participant's Supplemental Retirement Benefit shall be selected by the Committee
in its sole discretion.

          (b) For the purposes hereof, a "Change in Control" shall mean the
     occurrence of any of the following events:

               (i) any "person" (within the meaning of Section 13(d) of the
          Securities Exchange Act of 1934, as amended from time to time (the
          "Act")) is or becomes the beneficial owner within the meaning of Rule
          13d-3 under the Act (a "Beneficial Owner"), directly or indirectly, of
          securities of the Company (not including in the securities
          beneficially owned by such person any securities acquired directly
          from the Company or its affiliates) representing 25% or more of the
          combined voting power of the Company's then outstanding securities,
          excluding any person who becomes such a Beneficial Owner in connection
          with a transaction described in clause (A) of paragraph (iii) below;
          or

               (ii) the following individuals cease for any reason to constitute
          a majority of the number of directors then serving: individuals who,
          on December 15, 1998, constitute the Board of Directors and any new
          director (other than a director whose initial assumption of office is
          in connection with an actual or threatened election contest, including
          but not limited to a consent solicitation, relating to the election of
          directors of the Company) whose appointment or election by the Board
          or nomination for election by the Company's stockholders was approved
          or recommended by a vote of at least two-thirds (2/3) of the directors
          then still in office who either were directors on December 15, 1998 or
          whose appointment, election or nomination for election was previously
          so approved or recommended; or

               (iii) there is consummated a merger or consolidation of the
          Company or any direct or indirect wholly owned subsidiary of the
          Company with any other corporation, other than (A) a merger or
          consolidation which would result in the voting securities of the
          Company outstanding immediately prior to such merger or consolidation
          continuing to represent (either by remaining outstanding or by being
          converted into voting securities of the surviving entity or any parent
          thereof), in combination with the

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          ownership of any trustee or other fiduciary holding securities under
          an employee benefit plan of the Company or any subsidiary of the
          Company, at least 75% of the combined voting power of the securities
          of the Company or such surviving entity or any parent thereof
          outstanding immediately after such merger or consolidation, or (B) a
          merger or consolidation effected to implement a recapitalization of
          the Company (or similar transaction) in which no person is or becomes
          the Beneficial Owner, directly or indirectly, of securities of the
          Company representing 25% or more of the combined voting power of the
          Company's then outstanding securities; or

               (iv) the stockholders of the Company approve a plan of complete
          liquidation or dissolution of the Company or there is consummated an
          agreement for the sale or disposition by the Company of all or
          substantially all of the Company's assets, other than a sale or
          disposition by the Company of all or substantially all of the
          Company's assets to an entity, at least 75% of the combined voting
          power of the voting securities of which are owned by stockholders of
          the Company in substantially the same proportions as their ownership
          of the Company immediately prior to such sale.

     Notwithstanding the foregoing subparagraphs (i), (ii), (iii) and (iv), a
"Change in Control" shall not be deemed to have occurred by virtue of the
consummation of any transaction or series of integrated transactions immediately
following which the record holders of the common stock of the Company
immediately prior to such transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity which owns all or
substantially all of the assets of the Company immediately following such
transaction or series of transactions.

     3.5 A Supplemental Retirement Benefit which is payable in any form other
than a single life annuity over the lifetime of the Participant, or which
commences at any time prior to the Participant's Normal Retirement Date, shall
be the actuarial equivalent of the Supplemental Retirement Benefit set forth in
Subsection 3.1 above as determined by the same actuarial

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adjustments as those specified in the Pension Plan with respect to determination
of the amount of retirement benefits payable pursuant to the Pension Plan on the
date for commencement of payment hereunder. Section 4. Supplemental Surviving
Spouse Benefit

     4.1 If a Participant dies prior to commencement of payment of his Pension
Plan Retirement Benefit or Reinstatement Plan Retirement Benefit under
circumstances in which a Pension Plan Surviving Spouse Benefit or Reinstatement
Plan Surviving Spouse Benefit is payable to his Surviving Spouse, then a
Supplemental Surviving Spouse Benefit shall be payable to his Surviving Spouse
as hereinafter provided. The Supplemental Surviving Spouse Benefit payable to a
Surviving Spouse shall be equal to the excess of (a) over (b) where:

          (a) is the sum of the amount of the Pension Plan Surviving Spouse
     Benefit or Reinstatement Plan Surviving Spouse Benefit to which the
     Surviving Spouse would have been entitled under the Pension Plan and
     Reinstatement Plan, as applicable, if such benefits were computed with the
     additional years of Credited Service provided for in this Plan; and

          (b) is the sum of the Pension Plan Surviving Spouse Benefit and
     Reinstatement Plan Surviving Spouse Benefit actually payable to the
     Surviving Spouse.

     4.2 A Supplemental Surviving Spouse Benefit shall be payable over the
lifetime of the Surviving Spouse only in monthly installments commencing on the
date for commencement of payment of the Pension Plan Surviving Spouse Benefit or
Reinstatement Plan Surviving Spouse Benefit, as applicable, (or if both are
payable, the earlier to commence) to the Surviving Spouse and terminating on the
date of the last payment of the Pension Plan Surviving Spouse Benefit or
Reinstatement Plan Surviving Spouse Benefit, as applicable, made before the
Surviving Spouse's death.

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Section 5. Administration of the Plan

     5.1 The Committee shall be the named fiduciary of this Plan responsible for
the general operation and administration of this Plan and for carrying out the
provisions thereof. The Committee shall have discretionary authority to construe
the terms of this Plan.

     5.2 The Committee shall adopt such rules and procedures as it deems
necessary and advisable to administer this Plan and to transact its business.
Subject to the other requirements of this Section 5, the Committee may--

          (a) employ agents to carry out non-fiduciary responsibilities;

          (b) employ agents to carry out fiduciary responsibilities (other than
     trustee responsibilities as defined in Section 405(c)(3) of ERISA);

          (c) consult with counsel, who may be counsel to the Company or an
     Affiliate; and

          (d) provide for the allocation of fiduciary responsibilities (other
     than trustee responsibilities as defined in Section 405(c)(3) of ERISA)
     among its members.

     However, any action described in sub-paragraphs (b) or (d) of this
subsection 5.2, and any modification or rescission of any such action, may be
effected by the Committee only by a resolution approved by a majority of the
Committee. The Committee shall be entitled to rely conclusively upon all tables,
valuations, certificates, opinions and reports furnished by any actuary,
accountant, controller, counsel or other person employed or engaged by the
Committee with respect to this Plan.

     5.3 The Committee shall keep written minutes of all its proceedings, which
shall be open to inspection by the Board of Directors. In the case of any
decision by the Committee with

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respect to a claim for benefits under this Plan, such Committee shall include in
its minutes a brief explanation of the grounds upon which such decision was
based.

     5.4 In performing their duties, the members of the Committee shall act
solely in the interest of the Participants in this Plan and their Beneficiaries
and

          (a) for the exclusive purpose of providing benefits to Participants
     and their Beneficiaries;

          (b) with the care, skill, prudence and diligence under the
     circumstances then prevailing that a prudent person acting in like capacity
     and familiar with such matters would use in the conduct of an enterprise of
     a like character and with like aims; and

          (c) in accordance with the documents and instruments governing this
     Plan insofar as such documents and instruments are consistent with the
     provisions of Title I of ERISA.

     5.5 In addition to any other duties the Committee may have, the Committee
shall review the performance of all persons to whom the Committee shall have
delegated or allocated fiduciary duties pursuant to the provisions of this
Section 5.

     5.6 The Company agrees to indemnify and reimburse, to the fullest extent
permitted by law, members of the Committee, directors and employees of the
Company and its Affiliates, and all such former members, directors and
employees, for any and all expenses, liabilities or losses arising out of any
act or omission relating to the rendition of services for or the management and
administration of this Plan.

     5.7 No member of the Committee nor any delegate thereof shall be personally
liable by virtue of any contract, agreement or other instrument made or executed
by him or on his behalf in such capacity.

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Section 6.  Claims Procedure and Status Determination

     6.1 Claims for benefits under this Plan and requests for a status
determination shall be filed in writing with the Company.

     6.2 In the case of a claim for benefits, written notice shall be given to
the claiming Participant or Beneficiary of the disposition of such claim,
setting forth specific reasons for any denial of such claim in whole or in part.
If a claim is denied in whole or in part, the notice shall state that such
Participant or Beneficiary may, within sixty days of the receipt of such denial,
request in writing that the decision denying the claim be reviewed by the
Committee and provide the Committee with information in support of his position
by submitting such information in writing to the Secretary of the Committee.

     6.3 The Committee shall review each claim for benefits which has been
denied in whole or in part and for which such review has been requested and
shall notify, in writing, the affected Participant or Beneficiary of its
decision and the reasons therefor.

     6.4 In the case of a request for status determination, written notice shall
be given to the requesting person within a reasonable time setting forth
specific reasons for the decision.

Section 7.  Amendment or Termination

     7.1 The Company reserves the right to amend or terminate this Plan when, in
the sole opinion of the Company, such amendment or termination is advisable. Any
such amendment or termination shall be made pursuant to a resolution of the
Board or of the Employee Benefits Policy Committee and shall be effective as
provided for in such resolution.

     7.2 No amendment or termination of this Plan shall directly or indirectly
deprive any current or former Participant, Beneficiary or Surviving Spouse of
all or any portion of any Supplemental Retirement Benefit or Supplemental
Surviving Spouse Benefit payment which has

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commenced prior to the effective date of such amendment or termination or the
right to which has accrued on such effective date.

Section 8. General Provisions

     8.1 This Plan at all times shall be entirely unfunded and no provision
shall at any time be made with respect to segregating any assets of the Company
or any Affiliate for payment of any benefits hereunder. No Participant,
Beneficiary, Surviving Spouse or any other person shall have any interest in any
particular assets of the Company or any Affiliate by reason of the right to
receive a benefit under this Plan and any such Participant, Beneficiary,
Surviving Spouse or other person shall have only the rights of a general
unsecured creditor with respect to any rights under the Plan.

     8.2 Except as otherwise expressly provided herein, all terms and conditions
of the Pension Plan and the Reinstatement Plan applicable to a benefit paid to a
Participant or a Surviving Spouse Benefit under such plans shall also be
applicable to a Supplemental Retirement Benefit or a Supplemental Surviving
Spouse Benefit payable hereunder. Any benefit payable under the Pension Plan or
the Reinstatement Plan, shall be paid solely in accordance with the respective
terms and conditions of the Pension Plan and the Reinstatement Plan and nothing
in this Plan shall operate or be construed in any way to modify, amend or affect
the terms and provisions of the Pension Plan or the Reinstatement Plan.

     8.3 Nothing contained in this Plan shall constitute a guaranty by the
Company or any other entity or person that the assets of the Company or any
Affiliate will be sufficient to pay any benefit hereunder.

     8.4 No Participant or Surviving Spouse shall have any right to a benefit
under this Plan except in accordance with the terms of this Plan. Establishment
of this Plan shall not be

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construed to give any Participant the right to be retained in the service of the
Company or any Affiliate.

     8.5 No interest of any person or entity in, or right to receive a benefit
under, this Plan shall be subject in any manner to sale, transfer, assignment,
pledge, attachment, garnishment or other alienation or encumbrance of any kind;
nor any such interest or right to receive a benefit be taken, either voluntarily
or involuntarily, for the satisfaction of the debts of, or other obligations or
claims against, such person or entity, including claims for alimony, support,
separate maintenance and claims in bankruptcy proceedings.

     8.6 This Plan shall be construed and administered under the laws of the
United States and the State of New Jersey to the extent not superseded by
Federal law.

     8.7 If the present value of any Supplemental Retirement Benefit or
Supplemental Surviving Spouse benefit is less than $3,500 (or for Plan Years
beginning on or after January 1, 1998, is less than $5,000), the Company may pay
the present value of such Benefit to the Participant or Surviving Spouse in a
single lump sum in lieu of any further benefit payments hereunder.

     8.8 Actuarial assumptions to determine the present value of any benefit
hereunder shall be the same as used to determine the present value of benefits
under the Pension Plan.

     8.9 If any person entitled to a benefit payment under this Plan is deemed
by the Committee to be incapable of personally receiving and giving a valid
receipt for such payment, then, unless and until claim therefor shall have been
made by a duly appointed guardian or other legal representative of such person,
the Committee may provide for such payment or any part thereof to be made to any
other person or institution then contributing toward or providing for

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the care and maintenance of such person. Any such payment shall be a payment for
the account of such person and a complete discharge of any liability of the
Company and this Plan therefor.

     8.10 This Plan shall inure to the benefit of and be binding upon the
Company, its successors and assigns, including but not limited to any
corporation which may acquire all or substantially all of the Company's assets
and business or with or into which the Company may be consolidated or merged.

     8.11 Each Participant shall keep the Company informed of his current
address and the current address of his spouse. The Company shall not be
obligated to search for the whereabouts of any person. If the location of a
Participant is not made known to the Company within three (3) years after the
date on which payment of the Participant's Supplemental Retirement Benefit may
first be made, payment may be made as though the Participant had died at the end
of the three-year period. If, within one additional year after such three-year
period has elapsed, or, within three years after the actual death of a
Participant, the Company is unable to locate any Surviving Spouse of the
Participant, then the Company shall have no further obligation to pay any
benefit hereunder to such Participant or Surviving Spouse or any other person,
and such benefit shall be irrevocably forfeited.

     8.12 Notwithstanding any of the preceding provisions of this Plan, none of
the Company, the Committee or any individual acting as an employee or agent of
the Company or the Committee shall be liable to any Participant, former
Participant, Surviving Spouse or any other person for any claim, loss, liability
or expense incurred in connection with this Plan.

Section 9. Miscellaneous

     9.1 As used herein, words in the masculine gender shall include the
feminine and the singular shall include the plural, and vice versa, unless
otherwise required by the context. Any

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headings used herein are included for ease of reference only and are not to be
construed so as to alter the terms hereof.


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