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                                                                  Exhibit 10a(3)

                       LIMITED SUPPLEMENTAL BENEFITS PLAN

                            FOR CERTAIN EMPLOYEES OF

                  PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

                              AND ITS SUBSIDIARIES

                                              Amended Effective February 1, 2006




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                       LIMITED SUPPLEMENTAL BENEFITS PLAN
                            FOR CERTAIN EMPLOYEES OF
                  PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
                              AND ITS SUBSIDIARIES

                                TABLE OF CONTENTS

                                                                            Page

1.    PURPOSE ...........................................................      1

2.    DEFINITIONS OF TERMS USED IN THE PLAN .............................      1

3.    DEATH BENEFIT .....................................................      5

4.    RETIREMENT BENEFIT ................................................      5

5.    ADMINISTRATION OF ACCOUNTS ........................................      8

6.    DESIGNATION OF BENEFICIARIES ......................................      9

7.    LIMITATION OF BENEFITS ............................................     10

8.    PLAN DOES NOT CONSTITUTE AN EMPLOYMENT AGREEMENT ..................     10

9.    AMENDMENT OR TERMINATION OF THE PLAN ..............................     10

10.   WHAT CONSTITUTES NOTICE ...........................................     11

11.   ADVANCE DISCLAIMER OF WAIVER ......................................     11

12.   EFFECT OF INVALIDITY OF ANY PART OF THE PLAN ......................     11

13.   PLAN BINDING ON ANY SUCCESSOR .....................................     11

14.   FUNCTION OF THE COMMITTEE .........................................     11

15.   LAW GOVERNING THE PLAN ............................................     11

16.   MISCELLANEOUS .....................................................     11

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                       LIMITED SUPPLEMENTAL BENEFITS PLAN
                            FOR CERTAIN EMPLOYEES OF
                  PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
                              AND ITS SUBSIDIARIES

      PURPOSE. The purpose of this Plan is to assist the Company in attracting
      and retaining a stable pool of key managerial talent and to encourage
      long-term key employee commitment to the Company by providing selected
      employees of the Company with certain limited supplemental death and
      retirement benefits as defined herein. The Plan is intended to provide
      such benefits to a select group of management or highly compensated
      employees within the meaning of ERISA who terminate employment with the
      Company and its ERISA Affiliates after becoming eligible for immediately
      payable periodic benefits under the Pension Plan or for early or normal
      retirement benefits under the Cash Balance Plan.

      The Plan was last amended, effective as of December 31, 2005, to conform
      the Plan to the requirements of the American Jobs Creation Act of 2004 and
      the terms contained herein shall supersede all prior iterations of the
      Plan.

2.    DEFINITIONS OF TERMS USED IN THE PLAN. As used in the Plan, the following
      words and phrases shall have the meanings indicated:

      (a)   "Account" -- Any account established pursuant to Paragraph 3(b) or
            4(f) of the Plan.

      (b)   "Assets" -- All amounts that have been credited to an Employee's
            Account in accordance with Paragraph 3(b), 4(f), or 5(b) of the
            Plan.

      (c)   "Beneficiary" -- The individual(s) and/or entity(ies) designated in
            writing by a Participant in the form attached to the Plan as
            Schedule A.

      (d)   "Cash Balance Plan" -- The Cash Balance Pension Plan of Public
            Service Enterprise Group Incorporated.

      (e)   "Change in Control" -- For the purposes of the Plan, a Change in
            Control of the Company 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 the Company's securities of (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

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                  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
                  of the Company ("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 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 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.

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                  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.

      (f)   "Code" -- The Internal Revenue Code of 1986, as amended.

      (g)   "Committee" -- The Employee Benefits Committee of the Company as
            selected by its Board of Directors.

      (h)   "Company" -- Public Service Enterprise Group Incorporated.

      (i)   "Compensation" --

            (i)   For the purposes of calculating the Death Benefit pursuant to
                  Paragraph 3 of the Plan, as to any Participant, Compensation
                  shall be equal to the annual rate of salary of the Participant
                  in effect at the date of death; and

            (ii)  For the purposes of calculating the Retirement Benefit
                  pursuant to Paragraph 4 of the Plan, as to any Participant,
                  Compensation shall be equal to the average of the total
                  remuneration paid to such Participant for services rendered to
                  the Company, excluding i) the Company's cost for any public or
                  private employee benefit plan but including all elective
                  contributions that are made by the Company on behalf of a
                  Participant which are not includable in income under Code
                  Sections 125 or 401(k) and ii) all awards to the Participant
                  under the Company's Long-Term Incentive Compensation Plan, for
                  the five years ending at the earlier of such Participant's
                  date of Retirement or attainment of normal retirement age
                  under the Pension Plan; provided, however, that for the
                  purposes of Paragraph 4 of the Plan, Compensation with respect
                  to any Participant shall not exceed the amount which is 150%
                  of the average annual base salary of the Participant for the
                  applicable five-year period.

      (j)   "ERISA" -- The Employee Retirement Income Security Act of 1974, as
            amended.

      (k)   "ERISA Affiliate" -- any organization which is a member of a
            controlled group of corporations (as defined in Code Section 414(b))
            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

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            to be aggregated with the Company as required by regulations
            promulgated pursuant to Code Section 414(o).

      (l)   "Participant" -- Each employee of the Company or an ERISA Affiliate
            nominated by the Chief Executive Officer of the Company and
            designated by the Company's Employee Benefits Policy Committee. The
            Chief Executive Officer of the Company shall nominate such select
            and key employees of the Company and its ERISA Affiliates upon such
            terms as he shall deem appropriate due to the employee's
            responsibilities and opportunity to contribute substantially to the
            financial and operating objectives of the Company.

      (m)   "Pension Plan" -- The Pension Plan of Public Service Enterprise
            Group Incorporated.

      (n)   "Plan" -- The Limited Supplemental Benefits Plan for Certain
            Employees of Public Service Enterprise Group Incorporated and its
            Subsidiaries, the terms of which are contained herein

      (o)   "Retirement" -- For the purposes of the Plan, Retirement shall mean
            either (i) or (ii), as the case may be:

            (i)   in the case of a Participant who participates in the Pension
            Plan, the Participant shall incur a Retirement for purposes of the
            Plan if he or she incurs a termination of service with the Company
            and its ERISA Affiliates after having attained the right to receive
            an immediately payable periodic benefit under the Pension Plan or
            when the sum of Participant's age and service are equal to or exceed
            80. In determining whether the Participant has attained the right to
            an immediately payable periodic benefit under the Pension Plan, he
            or she shall receive additional years of age and service in
            accordance with any employment, change in control, or similar
            arrangement applicable to the Participant, provided the Participant
            incurs a termination of service from the Company and its ERISA
            Affiliates during the two-year period commencing upon the date of a
            Change in Control.

            (ii)  in the case of a Participant who participates in the Cash
            Balance Plan, the Participant shall incur a Retirement for purposes
            of the Plan if he or she incurs a termination of service with the
            Company and its ERISA Affiliates after his or her Early Retirement
            Date or Normal Retirement Date (as those terms are defined in the
            Cash Balance Plan). In determining whether the Participant has
            attained his or her Early Retirement Date or Normal Retirement Date,
            he or she shall receive additional years of age and service in
            accordance with any employment, change in control, or similar
            arrangement applicable to the Participant, provided the Participant
            incurs a termination of service from the Company and its ERISA
            Affiliates during the two-year period commencing upon the date of a
            Change in Control.

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            Retirement shall not include termination of service with the right
            to a deferred pension under the Pension Plan or a deferred
            retirement benefit or early commencement of payment of a
            participant's Cash Balance Account under the Cash Balance Plan.

      (p)   "Retirement Plan" -- Any pension plan within the meaning of ERISA,
            excluding (i) the Pension Plan, the Cash Balance Plan and all
            defined contribution plans maintained by the Company or an ERISA
            Affiliate, except insofar as any such defined contribution plan may
            provide supplementary benefits to the Pension Plan or the Cash
            Balance Plan, (ii) this Plan and (iii) all deferred compensation
            plans, tax credit employee stock ownership plans and thrift plans,
            and all other profit-sharing plans which are not the principal
            retirement benefit of a plan sponsor, maintained by sponsors other
            than the Company.

      (q)   "Voting Stock" -- Outstanding stock of a corporation entitled to
            vote in the election of the directors of that corporation.

3.    DEATH BENEFIT.

      (a)   Amount of Benefit -- If a Participant dies while in the active
            employment of the Company or an ERISA Affiliate, the Company shall
            provide a death benefit to such Participant's Beneficiary in an
            amount equal to 150% of the Participant's Compensation, adjusted to
            the nearest $1,000, or to the next highest $1,000 if such
            Compensation is a multiple of $500 but not of $1,000.

      (b)   Establishment of Account -- Upon the death of a Participant during
            employment with the Company or an ERISA Affiliate, the Company shall
            establish an Account for the benefit of such Participant's
            Beneficiary. Such Account shall initially be credited with an amount
            equal to the benefit provided under Paragraph 3(a) and shall be held
            and administered as provided in Paragraph 5 of the Plan.

4.    RETIREMENT BENEFIT.

      (a)   General -- At Retirement, the Company shall provide each Participant
            with a retirement benefit calculated as provided in this Paragraph
            4.

      (b)   Determination of Benefit --

            (i)   Pension Plan Participants:

            (A)   The Participant's Compensation shall be multiplied by an
                  amount equal to one one-hundredth of the sum of (x) the number
                  of the Participant's years of credited service under the
                  Pension Plan at Retirement (including any additional years of
                  age and service provided to the Participant in accordance with
                  any employment, change in control, or similar arrangement
                  applicable to the Participant so long as the Participant
                  incurs

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                  a termination of service from the Company and its ERISA
                  Affiliates during the two-year period commencing upon the date
                  of a Change in Control), (y) the number of any additional
                  years of service credit to which the Participant may be
                  entitled from the Company under the Mid-Career Supplemental
                  Retirement Income Plan of Public Service Enterprise Group
                  Incorporated and its Affiliates or any written arrangement
                  with the Company or an ERISA Affiliate Company (excluding any
                  written arrangement between the Company or ERISA Affiliate and
                  the Participant relating to a Change in Control), and (z) 30;
                  but, in no event, shall the multiple be greater than 0.75.

            (B)   The amount determined under subparagraph (A) of this Paragraph
                  4(b)(i) shall be reduced by the sum of (x) the amount the
                  Participant would be entitled to at Retirement as an annual
                  pension benefit under the Pension Plan and any supplemental
                  retirement plan (other than this Plan) maintained by the
                  Company or an ERISA Affiliate calculated as a single life
                  annuity without reduction for any pre-retirement survivor's
                  option coverage or any reduction for early retirement, (y)
                  100% of the amount of the unreduced annual Social Security
                  benefit to which the Participant would be entitled at age 65
                  (or such other age which may be established by the Social
                  Security Administration from time to time as the earliest age
                  at which a Participant may receive an unreduced benefit
                  thereunder), assuming that the Participant has no earnings
                  from the date of Retirement to age 65 (or such other
                  applicable age), or, if greater, any disability benefit under
                  Social Security to which the Participant may be entitled, and
                  (z) the aggregate of the annual benefits to which the
                  Participant is entitled under all Retirement Plans as of the
                  date the Participant is employed by the Company or an ERISA
                  Affiliate, the such Social Security Benefits and benefits
                  under all Retirement Plans to be calculated as single life
                  annuities without any reductions, under rules, procedures and
                  equivalents determined by the Committee. To determine the
                  amounts referred to under (y) and (z) above, the Participant
                  shall file a declaration of all such amounts with the
                  Performance and Rewards Department of the Company's
                  subsidiary, PSEG Services Corporation, in such form as the
                  Committee may require from time to time. No benefit shall be
                  paid under the Plan until such a declaration, in satisfactory
                  form, shall be filed with the Performance and Rewards
                  Department. If a Participant is granted a disability Social
                  Security benefit, he shall notify the Performance and Rewards
                  Department thereof within 30 days thereof, and the
                  Participant's retirement benefit under this Plan shall be
                  adjusted accordingly. The Company shall be entitled to rely on
                  such statements in making payment, and if any such statement
                  is incorrect or is not furnished, the Company shall be
                  entitled to reimbursement from the Participant, the
                  Beneficiary or their legal representatives for any overpayment
                  and may reduce or suspend future payments to recover any such
                  overpayment. In the event it is established to the
                  satisfaction of the Committee, in its sole discretion, that

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                  any such statement was intentionally false or omitted, the
                  Participant or Beneficiary shall be entitled to no further
                  payments under the Plan, and the Company shall be entitled to
                  recover any payments made hereunder.

      (ii)  Cash Balance Plan Participants:

            (A)   The Participant's Compensation shall be multiplied by an
                  amount equal to one one-hundredth of the sum of (x) the number
                  of the Participant's years of service under the Pension Plan
                  with which such Participant would have been credited at
                  Retirement had the Participant participated in the Pension
                  Plan from his/her date of hire and including any additional
                  years of age and service provided to the participant in
                  accordance with any employment, change in control, or similar
                  arrangement applicable to the Participant so long as the
                  Participant incurs a termination of service from the Company
                  and its ERISA Affiliates during the two-year period commencing
                  upon the date of a Change in Control, (y) the number of any
                  additional years of service credit to which the Participant
                  may be entitled from the Company under the Mid-Career
                  Supplemental Retirement Income Plan of Public Service
                  Enterprise Group Incorporated and its Affiliates or any
                  written arrangement with the Company or an ERISA Affiliate
                  (excluding any written arrangement between the Company or
                  ERISA Affiliate relating to a Change in Control) and (z) 30;
                  but, in no event, shall the multiple be greater than 0.75.

            (B)   The amount determined under subparagraph (A) of this Paragraph
                  4(b)(ii) shall be reduced by the sum of (x) the amount the
                  Participant would be entitled to at Retirement as an annual
                  pension benefit under the Cash Balance Plan and any
                  supplemental retirement plan (other than this Plan) maintained
                  by the Company or an ERISA Affiliate calculated as a single
                  life annuity payable at the Participant's Normal Retirement
                  Date (as defined under the Cash Balance Plan), (y) 100% of the
                  amount of the unreduced annual Social Security benefit to
                  which the Participant would be entitled at age 65 (or such
                  other age which may be established by the Social Security
                  Administration from time to time as the earliest age at which
                  a Participant may receive an unreduced benefit thereunder),
                  assuming that the Participant has no earnings from the date of
                  Retirement to age 65 (or such other applicable age), or, if
                  greater, any disability benefit under Social Security to which
                  the Participant may be entitled, and (z) the aggregate of the
                  annual benefits to which the Participant is entitled under all
                  Retirement Plans as of the date the Participant is employed by
                  the Company or an ERISA Affiliate, such Social Security
                  Benefits and benefits under all Retirement Plans to be
                  calculated as single life annuities without any reductions,
                  under rules, procedures and equivalents determined by the
                  Committee. To determine the amounts referred to under (y) and
                  (z) above, the Participant shall file a declaration of all
                  such amounts with the Performance and Rewards Department in
                  such form as

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                  the Committee may require from time to time. No benefit shall
                  be paid under the Plan until such a declaration, in
                  satisfactory form, shall be filed with the Performance and
                  Rewards Department. If a Participant is granted a disability
                  Social Security benefit, he shall notify the Performance and
                  Rewards Department thereof within 30 days thereof, and the
                  Participant's retirement benefit under this Plan shall be
                  adjusted accordingly. The Company shall be entitled to rely on
                  such statements in making payment, and if any such statement
                  is incorrect or is not furnished, the Company shall be
                  entitled to reimbursement from the Participant, the
                  Beneficiary or their legal representatives for any overpayment
                  and may reduce or suspend future payments to recover any such
                  overpayment. In the event it is established to the
                  satisfaction of the Committee, in its sole discretion, that
                  any such statement was intentionally false or omitted, the
                  Participant or Beneficiary shall be entitled to no further
                  payments under the Plan, and the Company shall be entitled to
                  recover any payments made hereunder.

      (c) Forms of Benefit -- The annual amount determined under paragraph (b)
of this Paragraph 4 shall be paid in the form of a life annuity; either a single
life annuity in monthly installments or a joint and survivor annuity in monthly
installments based upon such annual amount and calculated in accordance with the
form of benefit option selected by the Participant under the Pension Plan or the
Cash Balance Plan, as the case may be; provided, however, that if the
Participant has selected a lump-sum distribution under the Pension Plan or the
Cash Balance Plan, distribution under this Plan shall be made in the form of a
single life annuity.

      (d) Commencement of Benefit - The benefit to be paid pursuant to this
Paragraph 4 shall commence at the same time as the Participant's benefit under
the Pension Plan or Cash Balance Plan except that for any Participant who is a
"Key Employee," as defined in the Code, commencement of his/her benefit may not
occur earlier than six months following his/her Retirement.

5.    ADMINISTRATION OF ACCOUNTS.

      (a)   General -- Accounts shall be established under the Plan only
            pursuant to Paragraph 3(b) hereof. All Accounts shall be
            administered in accordance with the provisions of this Paragraph 5.

      (b)   Interest on Assets in the Account -- The Assets credited to an
            Account shall accrue interest at a market rate of interest as may be
            determined from time to time by the Committee.

      (c)   Timing of the Distribution(s) -- A Beneficiary shall receive the
            distribution of the Account in the form of monthly distributions
            over a ten-year period commencing in the month following the month
            of the Participant's death. The amount of each installment shall be
            determined by dividing the then unpaid balance in the Account,
            including accrued and unpaid interest, by the number of installments
            remaining to be paid.

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      (d)   Request for Change in Distribution -- A Beneficiary or legal
            representative may request a change in the timing, frequency or
            amount of payments made from a Account by filing a written request
            therefor with the Committee. The Committee may, in its sole
            discretion, grant such request only if the Committee determines that
            an emergency beyond the control of the Beneficiary or legal
            representative exists and which would cause such Beneficiary or
            legal representative severe financial hardship if the payment of
            such benefits were not approved. Any such distribution for hardship
            shall be limited to the amount needed to meet such emergency. The
            Committee shall inform the Beneficiary or legal representative of
            its decision within sixty (60) days of receipt of the written
            request.

6.    DESIGNATION OF BENEFICIARIES

      (a)   General -- To designate an individual(s) and/or entity(ies) to
            receive the benefits of the Plan with respect to a Participant, such
            Participant must file a written designation in the form of Schedule
            A to the Plan with the Committee. Subject to the restrictions of
            this Paragraph 6, a Participant may change such designation by
            filing a subsequent written designation.

      (b)   Death Benefit -- By designation on Section 1 of a Schedule A filed
            with the Committee, a Participant may name an individual(s) and/or
            entity(ies) to receive a death benefit under Paragraph 3 of the Plan
            with respect to such Participant. A Participant may change such
            designation by filing a subsequent notification in the form of
            Schedule A.

      (c)   Retirement Benefits --

            (i)   Single Life Annuity. If a Participant's retirement benefit
                  under the Plan is paid as a single life annuity under
                  Paragraph 4(c)(i) of the Plan, there shall be no Beneficiary
                  with respect to such benefit and all retirement benefits shall
                  cease upon the Participant's death.

            (ii)  Joint and Survivor Annuity. If a Participant's retirement
                  benefit under Paragraph 4(c)(ii) of the Plan is paid as joint
                  and survivor annuity, the post-retirement survivorship shall
                  be paid to the Participant's spouse. If the Participant's
                  spouse predeceases the Participant within five years from the
                  date of Participant's Retirement, the Participant's retirement
                  benefit hereunder will automatically revert and return to a
                  single life annuity commencing the first day of the month
                  following the month in which the spouse died. If, however, the
                  spouse predeceases the Participant more than five years after
                  Participant's Retirement, the Participant's reduced retirement
                  benefit shall continue during his life and no survivor benefit
                  shall be paid.

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      (d)   Designation by Last Remaining Beneficiary -- After a Participant's
            death, if there is only one remaining Beneficiary with respect to a
            death benefit under Paragraph 3 of the Plan, such Beneficiary shall
            be entitled to designate in writing to the Committee an individual
            to be paid any remainder of such benefit under the Plan at such
            Beneficiary's death. If no such further designation is made, such
            remainder shall be paid to such Beneficiary's estate. In the event
            of such Beneficiary's death, and regardless of whether any such
            further designation has been made, the Committee in its sole
            discretion may require any such remainder to be paid as a lump sum.

7.    LIMITATION OF BENEFITS.

      (a)   The Plan shall be unfunded with respect to all benefits to be paid
            hereunder. In addition, the Company shall not be required to
            segregate any amounts credited to any Account, which shall be
            established merely as an accounting convenience; title to and
            beneficial ownership of any Assets credited to any Account shall at
            all times remain in the Company, and no Participant, Beneficiary or
            legal representative shall have any interest whatsoever in any
            specific assets of the Company.

      (b)   The payment of any death or survivorship benefit under this Plan
            shall be contingent upon such evidence of death as may be required
            by the Committee.

      (c)   If the Company should terminate the Plan pursuant to Paragraph 9
            hereof, the Company's obligation to pay any benefits under the Plan
            shall likewise terminate; provided, however, that, except as
            otherwise provided in said Paragraph 9, the Company may not
            terminate the Plan with respect to any Participant subsequent to
            that Participant's Retirement or death.

8.    PLAN DOES NOT CONSTITUTE AN EMPLOYMENT AGREEMENT. The Plan shall not
      constitute a contract for the continued employment of any Participant by
      the Company or any ERISA Affiliate. The Company and each ERISA Affiliate
      reserves the right to modify a Participant's Compensation at any time and
      from time to time as it considers appropriate and to terminate any
      Participant's employment for any reason at any time notwithstanding the
      Plan.

9.    AMENDMENT OR TERMINATION OF THE PLAN. The Board of Directors of the
      Company may, in its sole discretion, amend, modify or terminate the Plan
      at any time, provided, however, that no such amendment, modification or
      termination shall deprive any Participant or Beneficiary of a previously
      acquired right unless such Participant or his Beneficiary or his legal
      representative shall consent to such change. Provided, further, however,
      that after a Change in Control, this Plan may not be terminated nor the
      benefit calculation reduced with respect to any Participant in the Plan on
      the date of such Change in Control unless such Participant or his
      Beneficiary or his legal representative shall consent to such change. No
      right to a death benefit under the Plan shall accrue until a

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      Participant's death and no right to a retirement benefit shall accrue
      until a Participant's Retirement.

10.   WHAT CONSTITUTES NOTICE. Any notice to a Participant, a Beneficiary or any
      legal representative hereunder shall be given in writing, by personal
      delivery, overnight express service or by United States mail, postage
      prepaid, addressed to such person's last known address. Any notice to the
      Company or the Committee hereunder (including the filing of Schedule A)
      shall be given by delivering it in person or by overnight express service,
      or depositing it in the United States mail, postage prepaid, to the
      Secretary of the Employee Benefits Committee, Public Service Enterprise
      Group Incorporated, 80 Park Plaza, T10B, P.O. Box 1171, Newark, New
      Jersey, 07101.

11.   ADVANCE DISCLAIMER OF WAIVER. Failure by the Company or the Committee to
      insist upon strict compliance with any of the terms, covenants or
      conditions hereof shall not be deemed a waiver of any such term, covenant
      or condition, nor shall any waiver or relinquishment of any right or power
      hereunder at any one or more times be deemed a waiver or relinquishment of
      any such right or power at any other time or times.

12.   EFFECT OF INVALIDITY OF ANY PART OF THE PLAN. The invalidity or
      unenforceability of any provision hereof shall in no way affect the
      validity or enforceability of any other provision of the Plan.

13.   PLAN BINDING ON ANY SUCCESSOR. Except as otherwise provided herein, the
      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.

14.   FUNCTION OF THE COMMITTEE. The Plan shall be administered by the Committee
      and the Committee shall be the final arbiter of any question that may
      arise under the Plan.

15.   LAW GOVERNING THE PLAN. Except to the extent federal law applies, the Plan
      shall be governed by the laws of the State of New Jersey without giving
      effect to principles of conflicts of law. This Plan is specifically
      intended to comply with the provisions of the The American Jobs Creation
      Act of 2004 (the "AJCA") and Section 409A of the Code and it shall
      automatically incorporate all applicable restrictions of the AJCA, the
      Code and its related regulations, and the Company will amend the Plan to
      the extent necessary to comply with those requirements. The timing under
      which a Participant will have a right to receive any payment under this
      Plan will be deemed to be automatically modified, and a Participant's
      rights under the Plan limited to conform to any requirements under, the
      AJCA, the Code and its related regulations.

16.   MISCELLANEOUS.

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<PAGE>

      (a)   The masculine pronoun shall mean the feminine wherever appropriate.

      (b)   The headings are for convenience only. In the event of a conflict
            between the headings of a paragraph and its contents, the contents
            shall control.

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