<PAGE>

                                                                   Exhibit 10-J

                        DELMARVA POWER & LIGHT COMPANY

                          DEFERRED COMPENSATION PLAN

                         (Effective January 1, 1996)


<PAGE>


                        DELMARVA POWER & LIGHT COMPANY 
                          DEFERRED COMPENSATION PLAN

                              TABLE OF CONTENTS

<TABLE>
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<S>                                                                  <C>

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

     1.1.  Name . . . . . . . . . . . . . . . . . . . . . . . . .       1
     1.2.  Effective Date . . . . . . . . . . . . . . . . . . . .       1
     1.3.  Employers. . . . . . . . . . . . . . . . . . . . . . .       1
     1.4.  Purpose. . . . . . . . . . . . . . . . . . . . . . . .       1

ARTICLE II - DEFINITIONS. . . . . . . . . . . . . . . . . . . . .       2

ARTICLE III - PARTICIPATION BY ELIGIBLE EMPLOYEES . . . . . . . .       8

     3.1.  Participation. . . . . . . . . . . . . . . . . . . . .       8
     3.2.  Failure to Designate . . . . . . . . . . . . . . . . .       9
     3.3.  Continuity of Participation. . . . . . . . . . . . . .       9
     3.4.  Immediate Cash-Out of Ineligible Employee. . . . . . .       9

ARTICLE IV - COMPENSATION DEFERRAL. . . . . . . . . . . . . . . .      10

     4.1.  Salary, Bonus, and/or Dividend Deferral
            Election. . . . . . . . . . . . . . . . . . . . . . .      10
     4.2.  Deferral of LTIP Shares. . . . . . . . . . . . . . . .      11
     4.3.  Period for Which Deferral Election is
            Effective . . . . . . . . . . . . . . . . . . . . . .      11

ARTICLE V - EMPLOYER MATCHING CREDIT. . . . . . . . . . . . . . .      12

     5.1.  Employer Matching Credit . . . . . . . . . . . . . . .      12
     5.2.  Employer Matching Credit for Limited
            Participant . . . . . . . . . . . . . . . . . . . . .      13

ARTICLE VI - DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . .      13

     6.1.  Election of Distribution Date. . . . . . . . . . . . .      13
     6.2.  Election of Method of Payment. . . . . . . . . . . . .      14
     6.3.  Unforeseeable Emergency. . . . . . . . . . . . . . . .      15
     6.4.  Special Election for Early Distribution. . . . . . . .      16
     6.5.  Distributions on Death . . . . . . . . . . . . . . . .      17
     6.6.  Acceleration of Payments . . . . . . . . . . . . . . .      18
     6.7.  Valuation of Distributions . . . . . . . . . . . . . .      18

ARTICLE VII - FORFEITURE FOR CAUSE. . . . . . . . . . . . . . . .      19

     7.1.  Forfeiture for Cause . . . . . . . . . . . . . . . . .      19

</TABLE>


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<TABLE>
<CAPTION>

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ARTICLE VIII - ACCOUNTS . . . . . . . . . . . . . . . . . . . . .      20

     8.1.  Deferred Compensation Account. . . . . . . . . . . . .      20
     8.2.  Deferred Stock Account . . . . . . . . . . . . . . . .      20
     8.3.  Employer Matching Account. . . . . . . . . . . . . . .      21
     8.4.  Crediting of Earnings and Losses, and
            Statement of Account. . . . . . . . . . . . . . . . .      22
     8.5.  Investment to Facilitate Payment of
            Benefits. . . . . . . . . . . . . . . . . . . . . . .      23

ARTICLE IX - FUNDING. . . . . . . . . . . . . . . . . . . . . . .      24

     9.1.  Deferred Compensation Plan Unfunded. . . . . . . . . .      24

ARTICLE X - ADMINISTRATION AND INTERPRETATION . . . . . . . . . .      25

     10.1. Administration . . . . . . . . . . . . . . . . . . . .      25
     10.2. Interpretation . . . . . . . . . . . . . . . . . . . .      25
     10.3. Records and Reports. . . . . . . . . . . . . . . . . .      26
     10.4. Payment of Expenses. . . . . . . . . . . . . . . . . .      27
     10.5. Indemnification for Liability. . . . . . . . . . . . .      28
     10.6. Claims Procedure . . . . . . . . . . . . . . . . . . .      28
     10.7. Review Procedure . . . . . . . . . . . . . . . . . . .      29

ARTICLE XI - AMENDMENT AND TERMINATION. . . . . . . . . . . . . .      29

     11.1. Amendment and Termination. . . . . . . . . . . . . . .      29
     11.2. Deemed Amendment to Matching Formula . . . . . . . . .      31

ARTICLE XII - MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . .      31

     12.1. Right of Employers to Take Employment
            Actions . . . . . . . . . . . . . . . . . . . . . . .      31
     12.2. Alienation or Assignment of Benefits . . . . . . . . .      32
     12.3. Right to Withhold. . . . . . . . . . . . . . . . . . .      32
     12.4. Construction . . . . . . . . . . . . . . . . . . . . .      32
     12.5. Headings . . . . . . . . . . . . . . . . . . . . . . .      33
     12.6. Number and Gender. . . . . . . . . . . . . . . . . . .      33
     12.7. Change in Control. . . . . . . . . . . . . . . . . . .      33

</TABLE>


                                     -ii-


<PAGE>

                        DELMARVA POWER & LIGHT COMPANY
                          DEFERRED COMPENSATION PLAN

                          (Effective January 1, 1996)


                                   ARTICLE I
                                    PURPOSE

          1.1.  NAME.  The name of this plan is the Delmarva Power & Light 
Company Deferred Compensation Plan (hereinafter referred to as the "Deferred 
Compensation Plan.")

          1.2.  EFFECTIVE DATE.  The effective date of this Deferred 
Compensation Plan is January 1, 1996.

          1.3.  EMPLOYERS.  Delmarva Power & Light Company ("Delmarva") and 
each subsidiary or affiliate of Delmarva that employs one or more Eligible 
Employees who have become Participants in accordance with Article III, shall 
each be an "Employer" under this Deferred Compensation Plan.      

          1.4.  PURPOSE.  This Deferred Compensation Plan is established 
effective January 1, 1996 by Delmarva for the purposes of providing 
supplemental retirement and deferred compensation benefits for a select group 
of management and/or highly compensated employees of the Employer. 

          This Deferred Compensation Plan (i) provides a means whereby 
Participants may defer a portion or all of their compensation in the form of 
salary and/or bonus they would otherwise receive for services performed for 
the Employer, (ii) provides participants in the Delmarva Power & Light 
Company Long-Term Incentive Plan (the "LTIP") with the ability to defer 
receipt of a portion or all of the performance-based restricted


<PAGE>


shares of Delmarva's common stock awarded under the LTIP, (iii) provides 
participants in the Delmarva Power & Light Company Savings and Thrift Plan 
(the "Savings Plan") with the ability to defer compensation that would be 
deferred and eligible for matching contributions under the Savings Plan but 
for the applications of Sections 401(a)(17), 401(m), 402(g) and/or 415 of the 
Internal Revenue Code of 1986, as amended (the "Code"), and provides such 
Savings Plan participants with a matching contribution similar to that which 
would be made under the Savings Plan but for the application of certain 
restrictions contained in the Code.


                                  ARTICLE II
                                 DEFINITIONS

          Whenever the following initially capitalized words and phrases are 
used in this Deferred Compensation Plan, they shall have the meanings 
specified below unless the context clearly indicates to the contrary:

          2.1.  "ADMINISTRATOR" shall mean the Vice President of 
Administration of Delmarva (or any successor to such position), or his 
delegate.

          2.2.  "APPLICATION FOR PARTICIPATION" shall mean a document (or 
documents) as made available from time to time by the Administrator, whereby 
an Eligible Employee enrolls as a


                                      -2-


<PAGE>


Participant and elects to defer Compensation pursuant to Article IV of this 
Deferred Compensation Plan.

          2.3.  "BENEFICIARY" shall mean such person or legal entity as may 
be designated by a Participant under Section 6.5 to receive benefits 
hereunder after such Participant's death.

          2.4.  "BOARD" shall mean the Board of Directors of Delmarva, as 
constituted from time to time.

          2.5.  "CHANGE IN CONTROL" shall be deemed to have occurred upon the 
earliest to occur of the following: 

               (a)  any Person is or becomes the beneficial owner, directly 
or indirectly, of securities of an Employer (not including in the securities 
beneficially owned by such Person any securities acquired directly from the 
Employer or its subsidiaries) representing 25% or more of either the 
then-outstanding shares of common stock of the Employer or the combined 
voting power of the Employer's then-outstanding securities; or

               (b)  the following individuals cease for any reason to 
constitute a majority of the number of directors then serving:  individuals 
who, on the effective date of this Plan, constitute the Board 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 Employer) whose appointment or election by the Board or


                                      -3-


<PAGE>


nomination for election by the Employer's stockholders was approved by a vote 
of at least two-thirds (2/3) of the directors then still in office who either 
were directors on the effective date of this Plan or whose appointment, 
election or nomination for election was previously so approved; or

               (c)  there is consummated a merger or consolidation of the 
Employer with any other corporation other than (i) a merger or consolidation 
which would result in the voting securities of the Employer 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) at least 75% of the combined 
voting power of the voting securities of the Employer or such surviving 
entity or any parent thereof outstanding immediately after such merger or 
consolidation, or (ii) a merger or consolidation effected to implement a 
recapitalization of the Employer (or similar transaction) in which no Person 
is or becomes the beneficial owner, directly or indirectly, of securities of 
the Employer (not including in the securities beneficially owned by such 
Person any securities acquired directly from the Employer or its 
subsidiaries) representing 25% or more of either the then-outstanding shares 
of common stock of the Employer or the combined voting power of the 
Employer's then-outstanding securities; or


                                     -4-


<PAGE>


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

               (e)  For purposes of this Section, the term "beneficial owner" 
or "beneficial ownership" shall have the same meaning as under Rule 13d-3 
under the Exchange Act, and the term "Person" shall have the meaning given in 
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) 
and 14(d) thereof, except that such term shall not include (i) Delmarva or 
any of its subsidiaries, (ii) a trustee or other fiduciary holding securities 
under an employee benefit plan of Delmarva or any of its subsidiaries, (iii) 
an underwriter temporarily holding securities pursuant to an offering of such 
securities, or (iv) a corporation owned directly or indirectly by the 
stockholders of the Employer in substantially the same proportions as their 
ownership of stock of the Employer.

          2.6.  "COMMITTEE" shall mean the Compensation Committee of the 
Board.

          2.7.  "COMPENSATION" shall mean the base salary of a Participant 
for a Plan Year (before any reduction to such salary


                                     -5-


<PAGE>


is effected in accordance with the Application for Participation, or in 
accordance with any salary reduction agreement effected under the terms of 
Sections 125 or 401(k) of the Code); plus the amount of bonus, if any, earned 
by a Participant during the Plan Year under the Delmarva Power & Light 
Company Management Incentive Compensation Plan (the "MICP").  To the extent a 
Participant elects to defer cash awarded to him on account of dividends paid 
on restricted shares of common stock held under the LTIP for contingent grant 
to the Participant or on shares of common stock deferred under the 
Participant's Deferred Stock Account, such cash dividend equivalents also 
shall be considered Compensation subject to deferral under this Plan.

          2.8.  "DEFERRED COMPENSATION" shall mean that portion of the 
Participant's Compensation which the Participant elects to defer pursuant to 
Section 4.1 of this Deferred Compensation Plan in accordance with an 
Application for Participation.

          2.9.  "DEFERRED COMPENSATION ACCOUNT" shall mean the bookkeeping 
account established by the Administrator for each Participant to which the 
Participant's base salary and MCIP bonus deferred pursuant to Section 4.1 
(and income thereon) is credited and from which distributions to the 
Participant or to his or her Beneficiary are debited.  A Participant shall at 
all times be fully vested in the balance of his Deferred Compensation Account.

          2.10.  "DEFERRED STOCK" shall mean shares of stock conditionally 
granted to a Participant under LTIP, which shares


                                     -6-


<PAGE>


may vest no earlier than the last day of the calendar year after a Plan Year 
in which the Participant elects to defer receipt of such shares pursuant to 
Section 4.2, plus cash dividend equivalents described in Section 2.8 and 
credited to a Participant's Deferred Stock Account pursuant to Section 8.2.

          2.11.  "DEFERRED STOCK ACCOUNT" shall mean the bookkeeping account 
established by the Administrator for each Participant to which the 
Participant's Deferred Stock is credited and from which distributions of 
Deferred Stock to the Participant or to his or her Beneficiary are debited.  
A Participant shall at all times be fully vested in the balance of his 
Deferred Stock Account, except to the extent LTIP shares have not yet vested 
under the terms of LTIP.

          2.12.  "ELIGIBLE EMPLOYEE" shall mean an individual employed by the 
Employer who is a member of a select group of management and/or highly 
compensated employees, and as determined by the Committee to be eligible to 
participate hereunder pursuant to Article III.

          2.13.  "EMPLOYER MATCHING ACCOUNT" shall mean the bookkeeping 
account established by the Administrator for a Participant to which the 
Participant's Employer Matching Credit (and income thereon) is credited and 
from which distributions to the Participant or his or her Beneficiary are 
debited.  A Participant shall be fully vested in the balance of his Employer 
Matching Account, except as provided in Section 7.1.


                                     -7-


<PAGE>


          2.14.  "EMPLOYER MATCHING CREDIT" shall mean an amount credited (if 
any) to the Participant's Employer Matching Account pursuant to Section 5.1 
of this Deferred Compensation Plan.

          2.15.  "INVESTMENT ALTERNATIVES" shall mean the investment options 
made available to employees under the Savings Plan, which shall be used as 
measuring standards for credits to a Participant's Deferred Compensation 
Account.  In the case of the Participant's Employer Matching Account and 
Deferred Stock Account, the only Investment Alternative shall be Delmarva 
common stock as traded on the open market.

          2.16.  "PARTICIPANT" shall mean an Eligible Employee designated as 
a Participant by the Committee and who has amounts standing to his credit 
under a Deferred Compensation Account, a Deferred Stock Account, or a 
Employer Matching Account.  The Committee may designate an Eligible Employee 
as a Participant for purposes of part, but not all, of the Deferred 
Compensation Plan.

          2.17.  "PLAN YEAR" shall mean the calendar year.


                                ARTICLE III
                      PARTICIPATION BY ELIGIBLE EMPLOYEES

          3.1.  PARTICIPATION.  Participation in this Deferred Compensation 
Plan is limited to Eligible Employees.  An Eligible Employee shall 
participate in the Deferred Compensation Plan as determined by the Committee 
in its sole discretion; provided,


                                     -8-


<PAGE>


however, that for purposes of employees who first become Eligible Employees 
during a Plan Year, such Eligible Employees shall participate in the Plan as 
determined by the Administrator in his sole discretion. 

          3.2.  FAILURE TO DESIGNATE.  In the event that the Committee fails 
to designate the group of Eligible Employees who shall be eligible to 
participate for any year, each Eligible Employee who was designated in the 
prior year shall be deemed to have been designated for the next succeeding 
Plan Year, provided that any such employee shall participate for purposes of 
the next succeeding Plan Year only if he or she is actively employed by an 
Employer on the first day of such succeeding Plan Year and provided he or she 
is an Eligible Employee for such year; and provided further that such 
participation shall be limited, if at all, as set forth in Section 2.12.

          3.3.  CONTINUITY OF PARTICIPATION.  A Participant who separates 
from service with all of the Employers will cease active participation 
hereunder.  However, the separation from service of an Eligible Employee with 
one Employer will not interrupt the continuity of his or her active 
participation if, concurrently with or immediately after such separation, he 
or she is employed by one or more of the other Employers. 

          3.4.  IMMEDIATE CASH-OUT OF INELIGIBLE EMPLOYEE.  This Deferred 
Compensation Plan is intended to be an unfunded "top-hat" plan, maintained 
primarily for the purpose of providing


                                     -9-


<PAGE>


deferred compensation for a select group of management or highly compensated 
employees.  Accordingly, if the Committee determines that any Participant 
does not qualify as a member of the select group, one hundred percent (100%) 
of such Participant's Deferred Compensation Account and/or Employer Matching 
Account shall be paid to the Participant immediately, the vested portion of 
such Participant's Deferred Stock Account shall be paid to the Participant 
immediately, and the unvested portion shall be returned to the LTIP. 


                                  ARTICLE IV
                             COMPENSATION DEFERRAL

          4.1.  SALARY, BONUS, AND/OR DIVIDEND DEFERRAL ELECTION. No later 
than the "Deferral Deadline" as shown in Table 4.1, each Eligible Employee 
designated as eligible to participate for purposes of this Article IV may 
irrevocably elect, by completing and executing an Application for 
Participation and filing it with the Administrator, to defer any portion of 
his base salary to be paid in the future, MICP bonus to be paid in the 
future, or cash awarded to him on account of dividends that may subsequently 
be paid on restricted shares of common stock held under the LTIP for 
contingent grant to the Participant or on shares of common stock deferred 
under the Participant's Deferred Stock Account.  


                                     -10-


<PAGE>


                                   TABLE 4.1

<TABLE>
<CAPTION>

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  TYPE OF DEFERRAL                 DEFERRAL DEADLINE
---------------------------------------------------------------------
<S>                     <C>

     Base Salary        Last day before the pay period for which
                        the deferral is to be effective. 
---------------------------------------------------------------------
  MICP Bonus Award      September 30 of the performance year for 
                        which the award is earned.
---------------------------------------------------------------------
     Dividends          Last day before the dividend declaration
                        date for dividends as to which the deferral
                        is to be effective.
---------------------------------------------------------------------

</TABLE>

In the case of deferral of base salary, a Participant may not defer base 
salary in excess of 10% of base pay reduced by the limit in effect under Code 
Section 402(g) for the Plan Year.

          4.2.  DEFERRAL OF LTIP SHARES.  At any time prior to the last year 
of the performance cycle by which performance under LTIP is measured, a 
Participant can elect to defer the receipt of shares which otherwise would be 
delivered to the Participant after such last year, based upon performance 
during the performance cycle applicable to such shares. 

          4.3.  PERIOD FOR WHICH DEFERRAL ELECTION IS EFFECTIVE. 

<TABLE>
<CAPTION>

---------------------------------------------------------------------
TYPE OF DEFERRAL             APPLICABLE PERIOD AND CONDITIONS
---------------------------------------------------------------------
<S>                     <C>

Base Salary             Continues until amended or terminated
---------------------------------------------------------------------
MICP Bonus Award        New election required for each Plan Year.
---------------------------------------------------------------------
Dividend Deferral       Continues until amended or terminated.
                        Limited to one election per 12-month period
---------------------------------------------------------------------
LTIP Shares             New election required for each performance
                        cycle
---------------------------------------------------------------------

</TABLE>


                                     -11-


<PAGE>


                                   ARTICLE V
                           EMPLOYER MATCHING CREDITS

          5.1.  EMPLOYER MATCHING CREDIT.  The amount of the Employer 
Matching Credit credited to the Employer Matching Account of each Eligible 
Employee designated as eligible to participate in this Section 5.1 shall be 
equal to the "Company-Matching Contributions" which would have been made to 
the Participant's "Thrift Fund Account" under the Savings Plan but for 
certain statutory limitations.  Generally, the Employer Matching Credit shall 
be equal to the "matching percentage" (50%, as of the effective date of this 
Plan) set forth in the Savings Plan, multiplied by the first 5% of the 
Participant's base salary in excess of the Code Section 401(a)(17) limit that 
is deferred under Section 4.1.  In the event the dollar amount of the 
"Company-Matching Contributions" under the Savings Plan for the Plan Year was 
limited due to the application of the provisions of Section 401(m) of the 
Code, or the percentage of the Participant's base salary that could be 
deferred under the Savings Plan was limited to an amount less than 5% because 
of other Code limitations, an additional Employer Matching Credit shall be 
contributed under this Plan equal to the amount of "Company-Matching 
Contributions" that would have been made to the Savings Plan but for such 
limitations, but only if and to the extent the Participant has deferred 
additional amounts of base salary to this Plan at least equal to the amount 
that would have been required to have been 


                                     -12-


<PAGE>


deferred under the Savings Plan in order to support such additional 
"Company-Matching Contributions" in the absence of such limitations.

          5.2.  EMPLOYER MATCHING CREDIT FOR LIMITED PARTICIPANT. For any 
Participant whose right to receive "Company-Matching Contributions" under the 
Savings Plan is limited by a  specific Savings Plan provision to $10 or less 
(without regard to the amount of salary deferrals elected by such 
Participant), the Employer Matching Credit shall be equal to the matching 
percentage described in Section 5.1, multiplied by the first 5% of the 
Participant's base salary that is deferred under Section 4.1.


                                  ARTICLE VI
                                DISTRIBUTIONS

          6.1.  ELECTION OF DISTRIBUTION DATE.  At the time a Participant 
makes an election to defer Compensation under Article IV, such Participant 
shall also specify in writing on the Application for Participation the date 
on which payment of the Deferred Compensation Account, the Deferred Stock 
Account, and the Employer Matching Account attributable to that Application 
for Participation shall be made or commence.  Such date shall be any of the 
following:

               (a)  a specified date not less than two years from the end of 
the Plan Year of the deferral; or


                                     -13-


<PAGE>


               (b)  a date occurring within a specific number of calendar 
days (not less than 15) after a specified event occurs (which event is not 
reasonably expected to occur within the two years following the Plan Year of 
the deferral); such as, the date the Participant terminates employment with 
the Employer, or the date Delmarva's common stock price reaches a specified 
level (which must be at least 10% above the stock price as of the date of 
deferral).

          Except as set forth hereinafter, the above distribution date, once 
elected by the Participant, shall be irrevocable.  

          6.2.  ELECTION OF METHOD OF PAYMENT.  At the time a Participant 
makes an election to defer Compensation under Section 4.1, such Participant 
may also specify in writing on the Application for Participation the method 
by which payment of the Deferred Compensation Account and the Employer 
Matching Account attributable to that Application for Participation shall be 
made. Such election must specify a payment method if the distribution date is 
determined by an event as described in Section 6.1(b). If a payment method is 
not specified in the election, or if a payment method is specified but a 
Participant wishes to change the payment method, a change of election or new 
election may be effective only if submitted to the Administrator no later 
than the last day of the calendar year that ends at least one year before the 
distribution date, and subject to approval by the Committee.


                                     -14-


<PAGE>


          A payment method shall be in the form of a lump sum payment, in 
annual installments, or in any other method approved by the Committee.  In 
the absence of a valid election, distribution of accounts shall be in the 
form of annual installments over a 10-year period.  Except as set forth 
herein, the form of payment, once elected by the Participant, shall be 
irrevocable.

          Distribution of a Participant's Company Matching Account shall be 
paid in cash, notwithstanding the fact that such accounts are denominated in 
the form of shares of Delmarva stock. Distribution of a Participant's 
Deferred Stock Account shall be in the form of Delmarva shares, which may be 
purchased by Delmarva or transferred from any grantor trust or other treasury 
stock account maintained by Delmarva, except to the extent such shares must 
be converted to cash to satisfy applicable withholding requirements.

          6.3.  UNFORESEEABLE EMERGENCY.  The Committee shall have the 
authority to determine, in its sole discretion, that payments should be made 
in any manner the Committee deems appropriate, in whole or in part, on any 
other date or dates in order to alleviate a financial hardship of a 
Participant or a Beneficiary.  "Financial hardship" shall mean a severe 
financial hardship resulting from a sudden and unexpected illness or  
accident of the Participant or Beneficiary, or of a dependent (as defined in 
Section 152(a) of the Code) of the Participant or


                                     -15-


<PAGE>


Beneficiary, loss of the Participant's or Beneficiary's property due to 
casualty, or other similar extraordinary and unforeseeable circumstances 
arising as a result of events beyond the control of the Participant or 
Beneficiary.  The circumstances that will constitute an unforeseeable 
emergency will depend on the facts of each case, but, in any case, payment 
may not be made to the extent that such hardship is or may be relieved (i) 
through reimbursement or compensation by insurance or otherwise, (ii) by 
liquidation of the Participant's or Beneficiary's assets, to the extent such 
liquidation would not itself cause severe financial hardship, and (iii) by 
cessation of deferrals under the Deferred Compensation Plan.  Any financial 
hardship distribution approved by the Committee shall be limited to the 
amount necessary to meet the emergency (including taxes that are expected to 
be imposed on the distribution), and shall be made solely from the Deferred 
Compensation Account and/or the vested portion of the Deferred Stock Account.

          6.4.  SPECIAL ELECTION FOR EARLY DISTRIBUTION.  A Participant may 
apply to the Administrator for early distribution of all or any part of his 
Deferred Compensation Account and/or the vested portion of his Deferred Stock 
Account.  Such early distribution shall be made in a single lump sum and (for 
the Deferred Stock Account) in shares of Delmarva stock, provided that 10% of 
the amount withdrawn in such early distribution shall be forfeited prior to 
payment of the remainder to the


                                     -16-


<PAGE>


Participant.  A Participant may not elect an early distribution hereunder if 
he has received an early distribution or hardship distribution within the 
previous twelve months.  In the event a Participant's early distribution 
election is submitted within 60 days after a Change in Control or an 
elimination of Investment Alternatives that the Committee determines is a 
substantial detriment to Participants, the early distribution election may 
include amounts credited to the Employer Matching Account, and the forfeiture 
penalty shall be reduced to 5%.

          6.5.  DISTRIBUTIONS ON DEATH.  In the event of a Participant's 
death before his or her Deferred Compensation Account, Deferred Stock 
Account, and/or Employer Matching Account has been fully distributed, 
distribution(s) shall be made to the Beneficiary selected by the Participant, 
in a single lump sum and (for the Deferred Stock Account) in shares of 
Delmarva stock, within 60 days after the Administrator receives notice of the 
date of death (or, if later, after the proper Beneficiary has been 
identified).  A Participant may from time to time change his or her 
designated Beneficiary without the consent of such Beneficiary by filing a 
new designation in writing with the Administrator.  If no Beneficiary 
designation is in effect at the time of the Participant's death, or if the 
designated Beneficiary is missing or has predeceased the Participant, payment 
shall be made to the Participant's surviving spouse, or if none, to his 
surviving children per stirpes, or, if none, to his estate.


                                     -17-


<PAGE>


          6.6.  ACCELERATION OF PAYMENTS.  Notwithstanding any other 
provision of this Deferred Compensation Plan to the contrary, the Committee, 
in its sole discretion, is empowered to accelerate the payment of a 
Participant's Deferred Compensation Account, Deferred Stock Account, and/or 
Employer Matching Account, before or after any termination of employment, 
including conversion to a smaller number of installment payments or to a 
single lump sum payment, for any reason the Committee may determine to be 
appropriate without premium or penalty.  None of the Employers, the Committee 
nor the Board shall have any obligation to make any such acceleration for any 
reason whatsoever.

          6.7.  VALUATION OF DISTRIBUTIONS.  All account distributions under 
this Deferred Compensation Plan shall be (a) based upon the value of the 
Participant's Deferred Compensation Account as of the Investment Alternative 
valuation date immediately preceding the date of the distribution; or (b) 
paid in the form of Delmarva stock or, where otherwise permitted under the 
Plan, such stock may be converted to cash at the fair market price of such 
stock as of the immediately preceding trading day. It is understood that 
administrative requirements may lead to a delay between such valuation date 
or trading day and the date of distribution, not to exceed five business days.


                                     -18-


<PAGE>


                                  ARTICLE VII
                             FORFEITURE FOR CAUSE

          7.1.  FORFEITURE FOR CAUSE.  If any Participant entitled to a 
Employer Matching Credit under this Deferred Compensation Plan is discharged 
for cause, or enters into competition with an Employer, or interferes with 
the relations between an Employer and any customer, or engages in any 
activity that would result in material damage to an Employer as determined in 
the sole discretion of the Committee, the rights of such Participant to a 
Employer Matching Credit under this Deferred Compensation Plan, including the 
rights of a Beneficiary to such benefits, will be forfeited, unless the 
Committee determines that such activity is not detrimental to the best 
interests of the Employer.  However, if the individual ceases such activity 
and notifies the Committee of this cessation, then the Participant's right to 
receive such benefits, and any right of a Beneficiary to such benefits, may 
be restored if the Committee in its sole discretion determines that the prior 
activity has not caused serious injury to the Employer and that the 
restoration of the benefits would be in the best interest of the Employer.  
All determinations by the Committee with respect to forfeiture or restoration 
of such benefits shall be final and conclusive.


                                     -19-


<PAGE>


                                 ARTICLE VIII
                                   ACCOUNTS

          8.1.  DEFERRED COMPENSATION ACCOUNT.  The Administrator shall 
establish and maintain, or cause to be established and maintained, a separate 
Deferred Compensation Account for each Participant hereunder who executes an 
election pursuant to Section 4.1.  Each such Participant's Compensation 
deferred pursuant to an Application for Participation under Section 4.1 shall 
be separately accounted for and credited, for bookkeeping purposes only, to 
his or her Deferred Compensation Account.  A Participant's Deferred 
Compensation Account shall be solely for the purposes of measuring certain 
amounts to be paid under the Deferred Compensation Plan, and Delmarva shall 
not be required to fund or secure the Account in any way, Delmarva's 
obligation to Participants hereunder being purely contractual.

          8.2.  DEFERRED STOCK ACCOUNT.  The Administrator shall establish 
and maintain, or cause to be established and maintained, a separate Deferred 
Stock Account for each Participant hereunder who executes an election 
pursuant to Section 4.2 or who elects to defer dividend equivalents under 
Section 4.1.  Each such Participant's LTIP shares deferred pursuant to an 
Application for Participation under Section 4.2 shall be separately accounted 
for and credited, for bookkeeping purposes only, to his or her Deferred Stock 
Account.  A Participant's Deferred Stock Account shall be solely for the


                                     -20-


<PAGE>


purposes of measuring certain amounts to be paid under the Deferred 
Compensation Plan, and Delmarva shall not be required to fund or secure the 
Account in any way, Delmarva's obligation to Participants hereunder being 
purely contractual.  The Deferred Stock Account shall be credited with shares 
conditionally granted to the Participant at the beginning of each LTIP cycle 
(or as of the effective date of the election under Section 4.2, if later), to 
the extent receipt of such shares has been deferred pursuant to an election 
under Section 4.2.  At the conclusion of the LTIP cycle, the Deferred Stock 
Account related to such cycle shall be increased by any additional deferred 
shares credited to the Participant under LTIP as a result of performance 
above LTIP goals, or decreased by any deferred shares forfeited by the 
Participant under LTIP as a result of performance below LTIP goals.  The 
Deferred Stock Account shall also be credited with the number of shares of 
stock that could be purchased, as of the dividend payment date, by the amount 
of any dividend equivalents deferred pursuant to Section 4.1.  

          8.3.  EMPLOYER MATCHING ACCOUNT.  The Administrator shall establish 
and maintain, or cause to be established and maintained, a separate Employer 
Matching Account for each Participant hereunder.  Each such Participant's 
Employer Matching Credit earned pursuant to an Application for Participation 
shall be separately accounted for and credited, for bookkeeping purposes 
only, to his or her Employer Matching Account.  A


                                     -21-


<PAGE>


Participant's Employer Matching Account shall be solely for the purposes of 
measuring certain amounts to be paid under the Deferred Compensation Plan, 
and Delmarva shall not be required to fund or secure the Account in any way, 
Delmarva's obligation to Participants hereunder being purely contractual.

          8.4.  CREDITING OF EARNINGS AND LOSSES, AND STATEMENT OF ACCOUNT.  
At such times, with such frequency, and in such percentages as the 
Administrator shall determine, each Participant may elect the Investment 
Alternatives in which his Deferred Compensation Account may be deemed 
invested (subject to the approval of the Committee).  The Participant's 
Employer Matching Account and Deferred Stock Account shall be deemed invested 
solely in Delmarva common stock, shall be denominated in numbers of shares, 
and shall be valued at any time as the shares of stock credited to such 
Account multiplied by the then-current market value of Delmarva common stock. 
Amounts credited to the Deferred Compensation Account will be increased by 
earnings (or decreased by losses) equal to the earnings or losses that would 
be realized by such Account if it had been invested in the Investment 
Alternatives specified by the Participant.  As soon as practicable after the 
end of each Plan Year (and at such additional times as the Administrator may 
determine), the Administrator shall furnish each Participant with a statement 
of the balance credited to the Participant's Deferred Compensation


                                     -22-


<PAGE>


Account, Deferred Stock Account, and/or Employer Matching Account, as the 
case may be.

          8.5.  INVESTMENT TO FACILITATE PAYMENT OF BENEFITS. Although the 
Employers are not obligated to invest in any specific asset or fund, or 
purchase any insurance contract in order to provide the means for the payment 
of any liabilities under this Deferred Compensation Plan, an Employer may 
elect to do so.  In the event an Employer elects to invest in any specific 
asset or fund, the Committee may, but is not required to, honor the 
investment request of the Participant described in Section 8.4, with respect 
to any investment to facilitate payment.

          In the event an Employer elects to purchase an insurance contract 
or contracts on the life of a Participant as a means for the payment of any 
liabilities under this Deferred Compensation Plan, the Participant shall 
cooperate in the securing of such insurance contract or contracts by 
furnishing all information and taking all actions as the Employer and the 
insurance carrier may require, including without limitation providing the 
results and reports of previous Employer and insurance carrier physical 
examinations and taking such additional physical examinations as may be 
requested.  The Employer shall be the sole owner of any such insurance 
contract or contracts or fund or asset, with all incidents of ownership 
therein, including without limitation the right to cash and loan values, 


                                     -23-


<PAGE>


dividends, death benefits and the right to terminate any such contract or 
contracts or to dispose of any such fund or asset.  

          The Participant shall have no interest whatsoever in any contract 
or contracts or fund or asset and shall exercise none of the incidents of 
ownership thereof.


                                   ARTICLE IX
                                     FUNDING

          9.1.  DEFERRED COMPENSATION PLAN UNFUNDED.  This Deferred 
Compensation Plan shall be unfunded and no trust shall be created by the 
Deferred Compensation Plan.  The crediting to each Participant's Deferred 
Compensation Account, Deferred Stock Account, and/or Employer Matching 
Account, as the case may be, shall be made through bookkeeping entries.  No 
actual funds shall be set aside; provided, however, that nothing herein shall 
prevent the Employers from establishing one or more grantor trusts from which 
benefits due under this Deferred Compensation Plan may be paid in certain 
instances.  All distributions shall be paid by the Employer from its general 
assets and a Participant (or his or her Beneficiary) shall have the rights of 
a general, unsecured creditor against the Employer for any distributions due 
hereunder.  The Deferred Compensation Plan constitutes a mere promise by the 
Employer to make benefit payments in the future.


                                     -24-


<PAGE>


                                   ARTICLE X
                       ADMINISTRATION AND INTERPRETATION

          10.1.  ADMINISTRATION.  Except where certain duties are delegated 
to the Administrator, the Committee shall be in charge of the operation and 
administration of this Deferred Compensation Plan.  The Committee has, to the 
extent appropriate and in addition to the powers described elsewhere in this 
Deferred Compensation Plan, full discretionary authority to construe and 
interpret the terms and provisions of the Deferred Compensation Plan; to 
adopt, alter and repeal administrative rules, guidelines and practices 
governing the Deferred Compensation Plan; to perform all acts, including the 
delegation of its administrative responsibilities to advisors or other 
persons who may or may not be employees of the Employers; and to rely upon 
the information or opinions of legal counsel or experts selected to render 
advice with respect to the Deferred Compensation Plan, as it shall deem 
advisable, with respect to the administration of the Deferred Compensation 
Plan.

          10.2.  INTERPRETATION.  The Committee may take any action, correct 
any defect, supply any omission or reconcile any inconsistency in the 
Deferred Compensation Plan, or in any election hereunder, in the manner and 
to the extent it shall deem necessary to carry the Deferred Compensation Plan 
into effect or to carry out the Committee's purposes in adopting the Plan.  
Any decision, interpretation or other action made or taken in good


                                     -25-

<PAGE>


faith by or at the direction of the Employers, the Board, the board of 
directors of any Employer, the Committee, or the Administrator arising out of 
or in connection with the Deferred Compensation Plan, shall be within the 
absolute discretion of all and each of them, as the case may be, and shall be 
final, binding and conclusive on the Employers, and all employees, 
Participants and Beneficiaries and their respective heirs, executors, 
administrators, successors and assigns.  The Committee's determinations 
hereunder need not be uniform, and may be made selectively among Eligible 
Employees, whether or not they are similarly situated.  Any actions to be 
taken by the Committee will require the consent of a majority of the 
Committee members. If a member of the Committee is a Participant in this 
Deferred Compensation Plan, such member may not decide or determine any 
matter or question concerning his or her benefits under this Deferred 
Compensation Plan that such member would not have the right to decide or 
determine if he or she were not a member.

          10.3.  RECORDS AND REPORTS.  The Administrator shall keep a record 
of proceedings and actions and shall maintain or cause to be maintained all 
such books of account, records, and other data as shall be necessary for the 
proper administration of the Deferred Compensation Plan.  Such records shall 
contain all relevant data pertaining to individual Participants and their 
rights under the Deferred Compensation Plan.  The Administrator shall have 
the duty to carry into effect all rights or benefits


                                     -26-


<PAGE>


provided hereunder to the extent assets of the Employers are properly 
available therefor.

          10.4.  PAYMENT OF EXPENSES.  The Employers, in such proportions as 
the Committee determines, shall bear all expenses incurred by them and by the 
Committee in administering this Deferred Compensation Plan.  If a claim or 
dispute arises concerning the rights of a Participant or Beneficiary to 
amounts deferred under this Deferred Compensation Plan (including interest or 
earnings thereon), regardless of the party by whom such claim or dispute is 
initiated, the Employers shall (in such proportions as between the Employers 
as the Committee determines), and upon presentation of appropriate vouchers, 
pay all legal expenses, including reasonable attorneys' fees, court costs, 
and ordinary and necessary out-of-pocket costs of attorneys, billed to and 
payable by the Participant or by anyone claiming under or through the 
Participant (such person being hereinafter referred to as the "Participant's 
Claimant"), in connection with the bringing, prosecuting, defending, 
litigating, negotiating, or settling of such claim or dispute; provided, that:

          (a)  The Participant or the Participant's Claimant shall repay to 
the Employers any such expenses theretofore paid or advanced by the Employers 
if and to the extent that the party disputing the Participant's rights 
obtains a judgment in its favor from a court of competent jurisdiction from 
which no appeal


                                     -27-


<PAGE>


may be taken, whether because the time to do so has expired or otherwise, and 
it is determined by the court that such expenses were not incurred by the 
Participant or the Participant's Claimant while acting in good faith; 
provided further, that

          (b)  In the case of any claim or dispute initiated by a Participant 
or the Participant's Claimant, such claim shall be made, or notice of such 
dispute given, with specific reference to the provisions of this Deferred 
Compensation Plan, to the Committee within one year (two years, in the event 
of a Change in Control) after the occurrence of the event giving rise to such 
claim or dispute.

          10.5.  INDEMNIFICATION FOR LIABILITY.  The Employers shall 
indemnify the Administrator, the members of the Committee, and the employees 
of any Employer to whom the Administrator delegates duties under the Deferred 
Compensation Plan, against any and all claims, losses, damages, expenses and 
liabilities arising from their responsibilities in connection with the 
Deferred Compensation Plan, unless the same is determined to be due to gross 
negligence or willful misconduct.

          10.6.  CLAIMS PROCEDURE.  If a claim for benefits or for 
participation under this Deferred Compensation Plan is denied in whole or in 
part, an employee will receive written notification.  The notification will 
include specific reasons for the denial, specific reference to pertinent 
provisions of this Deferred Compensation Plan, a description of any additional


                                     -28-


<PAGE>


material or information necessary to process the claim and why such material 
or information is necessary, and an explanation of the claims review 
procedure.  If the Committee fails to respond within 90 days, the claim is 
treated as denied.

          10.7.  REVIEW PROCEDURE.  Within 60 days after the claim is denied 
or, if the claim is deemed denied, within 150 days after the claim is filed, 
an employee (or his duly authorized representative) may file a written 
request with the Committee for a review of his denied claim.  The employee 
may review pertinent documents that were used in processing his claim, submit 
pertinent documents, and address issues and comments in writing to the 
Committee.  The Committee will notify the employee of its final decision in 
writing.  In its response, the Committee will explain the reason for the 
decision, with specific references to pertinent Deferred Compensation Plan 
provisions on which the decision was based.  If the Committee fails to 
respond to the request for review within 60 days, the review is treated as 
denied.


                                  ARTICLE XI
                           AMENDMENT AND TERMINATION

          11.1.  AMENDMENT AND TERMINATION.  The Board shall have the right, 
at any time, to amend or terminate the Deferred Compensation Plan in whole or 
in part provided that such amendment or termination shall not adversely 
affect the right of


                                     -29-


<PAGE>


any Participant or Beneficiary to a payment under the Deferred Compensation 
Plan on the basis of Deferred Compensation allocated to the Participant's 
Deferred Compensation Account or Deferred Stock Account or on the basis of a 
Employer Matching Credit credited to the Employer Matching Account prior to 
such amendment or termination.  Delmarva reserves the right, in its sole 
discretion, to discontinue deferrals under, or completely terminate, the 
Deferred Compensation Plan at any time.  If the Deferred Compensation Plan is 
discontinued with respect to future deferrals, Participants' Deferred 
Compensation Account, Deferred Stock Account and Employer Matching Account 
balances shall be distributed on the distribution dates elected in accordance 
with Sections 6.1 and 6.2, unless the Committee designates that distributions 
shall be made on an earlier date or dates.  If the Committee designates such 
earlier date or dates, each Participant shall receive (or commence receiving) 
distribution of his entire Deferred Compensation Account, Deferred Stock 
Account  and Employer Matching Account balances on such date or dates, as 
specified by the Committee.  If the Deferred Compensation Plan is completely 
terminated, each Participant shall receive distribution of his entire 
Deferred Compensation Account, Deferred Stock Account and Employer Matching 
Account balance in one lump sum payment as of the date of the Deferred 
Compensation Plan termination designated by the Board.


                                     -30-


<PAGE>


          11.2. DEEMED AMENDMENT TO MATCHING FORMULA.  In the event the 
matching contribution formula under the Savings Plan is modified to increase 
or reduce the matching percentage or the percentage of base salary that is 
matched, the formulae in Section 5.1 and Section 5.2 shall be deemed to be 
modified to equal such matching percentage or percentage of base salary that 
is matched, unless otherwise specified in the Board vote amending the Savings 
Plan.


                                  ARTICLE XII
                           MISCELLANEOUS PROVISIONS

          12.1.  RIGHT OF EMPLOYERS TO TAKE EMPLOYMENT ACTIONS. The adoption 
and maintenance of this Deferred Compensation Plan shall not be deemed to 
constitute a contract between an Employer and any employee, or to be a 
consideration for, or an inducement or condition of, the employment of any 
person. Nothing herein contained, or any action taken hereunder, shall be 
deemed to give any employee the right to be retained in the employ of an 
Employer or to interfere with the right of an Employer to discharge any 
employee at any time or to change any employee's compensation or benefits, 
nor shall it be deemed to give to an Employer the right to require the 
employee to remain in its employ, nor shall it interfere with the employee's 
right to terminate his or her employment at any time.  Nothing in this Plan 
shall prevent an Employer from amending, modifying, or


                                     -31-


<PAGE>


terminating any other benefit plan, including the Savings Plan, the MICP or 
the LTIP.  

          12.2.  ALIENATION OR ASSIGNMENT OF BENEFITS.  A Participant's 
rights and interest under the Deferred Compensation Plan shall not be 
assigned or transferred except as otherwise provided herein, and the 
Participant's rights to benefit payments under the Deferred Compensation Plan 
shall not be subject to alienation, pledge or garnishment by or on behalf of 
creditors (including heirs, beneficiaries, or dependents) of the Participant 
or of a Beneficiary, except for a qualified domestic relations order as 
defined in Section 514(b)(7) of the Employee Retirement Income Security Act 
of 1974, as amended.

          12.3.  RIGHT TO WITHHOLD.  To the extent required by law in effect 
at the time a distribution is made from the Deferred Compensation Plan, the 
Employer or its agents shall have the right to withhold or deduct from any 
distributions or payments any taxes required to be withheld by federal, state 
or local governments.

          12.4.  CONSTRUCTION.  All legal questions pertaining to the 
Deferred Compensation Plan shall be determined in accordance with the laws of 
the State of Delaware (without regard to otherwise-applicable conflict of law 
principles), to the extent such laws are not superseded by the Employee 
Retirement Income Security Act of 1974, as amended, or any other federal law.


                                     -32-


<PAGE>


          12.5.  HEADINGS.  The headings of the Articles and Sections of this 
Deferred Compensation Plan are for reference only.  In the event of a 
conflict between a heading and the contents of an Article or Section, the 
contents of the Article or Section shall control.

          12.6.  NUMBER AND GENDER.  Whenever any words used herein are in 
the singular form, they shall be construed as though they were also used in 
the plural form in all cases where they would so apply, and references to the 
male gender shall be construed as applicable to the female gender where 
applicable, and vice versa.

          12.7.  CHANGE IN CONTROL. At the Committee's discretion, after 
consultation with all affected Participants, in the event of a Change in 
Control and a termination of employment for any reason, each affected 
Participant's Deferred Compensation Account, Deferred Stock Account, and 
Employer Matching Account shall either be distributed immediately to the 
Participant in one lump sum payment, or paid in accordance with the 
distribution options selected by the Participant, as determined by the 
Committee and made applicable to all affected Participants. In the event 
distribution continues to be deferred under the terms of the Plan, the 
affected Employer shall be required to contribute cash or equivalent assets 
to a grantor trust (maintained by an institutional trustee independent of the 
Employer) within 60 days after such Change in Control, in an amount not less 
than the 


                                     -33-


<PAGE>


then-current value of all Participant Accounts related to such Employer.














                                     -34-