EXECUTIVE LONG-TERM INCENTIVE
                                COMPENSATION PLAN

                         Energis Resources Incorporated

                                 January 1, 1997


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                                TABLE OF CONTENTS
                                                                        Page No.
1.    Purposes....................................................       1

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

3.    Eligibility.................................................       2

4.    Administration..............................................       3

5.    Determination of Target Incentive Award.....................       3

6.    Determination of Performance Objectives.....................       3

7.    Determination of Achievement of Performance Objectives......       3

8.    Determination of Award Cycle................................       4

9.    Determination of Final Incentive Performance Awards.........       4

10.   Payment of Final Incentive Performance Awards...............       4

11.   Termination.................................................       4

12.   Assignment..................................................       5

13.   Plan Does Not Constitute an Employment Agreement............       5

14.   Amendment or Termination of the Plan by the Company.........       5

15.   What Constitutes Notice.....................................       5

16.   Advance Disclaimer of Any Waiver............................       6

17.   Effect on Invalidity of Any Part of the Plan................       6

18.   Plan Binding on Any Successor Owner.........................       6

19.   Laws Governing This Plan....................................       6

20.   Miscellaneous...............................................       6

21.   Withholding.................................................       6

22.   Effective Date..............................................       7
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                         ENERGIS RESOURCES INCORPORATED

                          EXECUTIVE LONG-TERM INCENTIVE
                                COMPENSATION PLAN

                                 January 1, 1997

1.    Purposes

            The purposes of this Plan are to foster  attainment of the long-term
financial  and  operating  objectives  of the Company by providing  incentive to
members of the senior management of the Company tied to the achievement of those
long-term objectives; to supplement the Company's salary and benefit programs so
as to provide overall compensation for such executives which is competitive with
corporations  with which the Company must compete for executive  talent;  and to
assist  the  Company  in  attracting  and  retaining  executives  who can have a
material, positive influence on its long-term financial and operating results.

2.    Definitions

            As used in this Plan, the following words and phrases shall have the
following meanings unless the context clearly requires otherwise:

            (a) "Award Cycle" - a Performance  Cycle with respect to which Final
Incentive  Performance  Awards to  Participants  in the Plan are approved by the
Committee in accordance with Section 9.

            (b)  "Base   Salary"  -  a  sum  equal  to  the  annual  rate  of  a
Participant's base compensation as of the first day of any Performance Cycle.

            (c)  "Committee"  - the  Compensation  Committee  of  the  Board  of
Directors of the Company.

            (d)   "Company" - Energis Resources  Incorporated

            (e)  "Disability" - any physical or mental condition which renders a
Participant  incapable  of  performing  further  work for the  Company  and that
results in termination of such Participant's employment.

            (f) "Distribution Date" - a date for distribution established by the
Committee pursuant to Paragraph 10(b) of this Plan.

            (g) "Final  Incentive  Performance  Award" - the amount awarded to a
Participant in accordance with Paragraph 9 of this Plan.

            (h)  "Participant" - such senior  employees of the Company as may be
designated by the Committee to participate in this Plan.
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            (i) "Performance  Cycle" - a period of three  consecutive Plan Years
as designated by the Committee.

            (j) "Plan" - this Energis Resources Incorporated Executive Long-Term
Incentive Compensation Plan.

            (k) "Plan Year" - the calendar year.

            (l) "Retirement" - termination of employment with the Company (i) at
or after the age of 62 or (ii) under circumstances  entitling the Participant to
an  immediately  payable  periodic  retirement  benefit under the Public Service
Electric and Gas Company Pension Plan or the Cash Balance Pension Plan of Public
Service Electric and Gas Company.

            (m)  "Subsidiary"  - a corporation at least 80% of the voting shares
of which are owned by this Company.

            (n)   "Target  Incentive  Award"  - the  amount  determined  under
Paragraph 5 of this Plan.

3.    Eligibility

      (a) The  Committee  may  select  such  employees  of the  Company  and its
Subsidiaries  (individually  or by position) for  participation in the Plan upon
such terms as it deems appropriate,  due to the employee's  responsibilities and
opportunity  to  contribute  substantially  to the  attainment  of the long-term
financial and operating  objectives of the Company. A determination with respect
to  participation  for any particular  Performance  Cycle shall be made no later
than  the  beginning  of the  Performance  Cycle,  except  that  designation  of
Participants with respect to the first  Performance Cycle following  adoption of
the Plan shall be made within 30 days of the  initial  adoption of this Plan and
selection  for  participation  in the Plan of new  hires or of  employees  newly
promoted  to  executive  positions  shall  be  made  within  30  days of hire or
promotion. Further, the Committee may adjust a Final Incentive Performance Award
of any  Participant  if the Committee  deems it  appropriate  to so do reflect a
change which may have occurred during a Performance Cycle in such  Participant's
position or responsibilities.

      (b)  Participation in the Plan in one Plan Year or Performance Cycle shall
not guarantee  participation  in any other Plan Year or Performance  Cycle.  The
Committee   shall  have  sole  discretion  with  respect  to  the  selection  of
Participants or whether to suspend operation of the Plan for any period of time.
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4.    Administration

      (a) The Plan  shall  be  administered  by the  Committee.  Subject  to the
provisions  of the Plan,  the Committee  shall have full and final  authority to
select   Participants,   to  designate  the  Target  Incentive  Award  for  each
Participant,  to determine Performance Objectives for a Performance Cycle and to
determine  the  amount  of  all  Final  Incentive   Performance  Awards.   Also,
notwithstanding  anything contained in this Plan to the contrary,  the Committee
may adjust a  Participant's  Final  Incentive  Award  based upon any  reasonable
criteria  it may  determine.  The  Committee  shall  also  have,  subject to the
provisions  of the Plan,  full and final  authority  to interpret  the Plan,  to
establish  and revise  rules,  regulations  and guides  relating to the Plan, to
entertain  appeals of Participants or  beneficiaries  regarding  alleged adverse
determinations  under  the  Plan and to make any  other  determinations  that it
believes necessary or advisable for the administration of the Plan.

      (b) All decisions and  determinations  by the Committee shall be final and
binding upon all parties, including the Company, Participants, beneficiaries and
other employees.

5.    Determination of Target Incentive Award

      Prior to each Performance  Cycle, or in the case of the first  Performance
Cycle, within 30 days after the initial adoption of the Plan and, in the case of
new hires or newly promoted  executives  selected for  participation,  within 30
days from the date of hire or promotion,  the  Committee  shall approve a Target
Incentive Award for each Participant based upon the  Participant's  position and
potential to contribute to the attainment of the Company's  long-term  financial
and operating  objectives.  The Target  Incentive  Award shall be expressed as a
whole dollar amount equal to a percentage of the Participant's Base Salary.

6.    Determination of Performance Objectives

      (a)  Concurrent  with  the  approval  of  Target   Incentive   Awards  for
Participants,  the Committee  shall  establish  Performance  Objectives  for the
Company for the related  Performance  Cycle.  The Company's  actual  performance
during a Performance Cycle will be compared to these  Performance  Objectives in
determining  the  amount,  if  any,  of  each   Participant's   Final  Incentive
Performance Award. Performance Objectives shall be measurable criteria regarding
the Company's quality of earnings,  earnings growth, asset growth,  market share
and/or such other indicators  selected by the Committee to reflect the Company's
business plan for the related Performance Cycle.

      (b) At the time that it approves Performance  Objectives for a Performance
Cycle,  the Committee  shall assign to each a relative weight to be afforded the
accomplishment  of each such  Performance  Objective  in  calculating  the Final
Incentive Performance Award of each Participant.
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7.    Determination of Achievement of Performance Objectives

      Within 90 days of the end of each  Performance  Cycle, the Committee shall
certify  the extent to which the Company has  achieved  the several  Performance
Objectives which have been established for such Performance Cycle. Certification
shall be by  resolution  of the  Committee,  which  resolution  shall  state the
percentage  of  achievement  of  each  respective  Performance  Objective.   The
determination of such achievement shall be by reference to the Company's audited
financial statements.

8.    Determination of Award Cycle

      Not later than 120 days  after the close of each  Performance  Cycle,  the
Committee shall, in its sole discretion, determine whether any Participant shall
be granted a Final Incentive  Performance Award with respect to such Performance
Cycle. A Performance  Cycle for which the Committee has determined  that a Final
Incentive Performance Award shall be paid shall be deemed an Award Cycle.

9.    Determination of Final Incentive Performance Awards

      To determine each Participant's  Final Incentive  Performance  Awards, the
Participant's  Target  Incentive  Award  shall be  multiplied  by an  applicable
percentage based upon the Committee's certification of the Company's achievement
of its Performance Objectives for the Performance Cycle and the following chart:

================================================================================
            Weighted Average              Final Incentive Performance Award* as
             Achievement of                        a Percent of Target
         Performance Objectives                      Incentive Award
--------------------------------------------------------------------------------
                 > 150%                                    200%
                 -
--------------------------------------------------------------------------------
                   125%                                    150%
--------------------------------------------------------------------------------
                   100%                                    100%
--------------------------------------------------------------------------------
                   75%                                     50%
--------------------------------------------------------------------------------
                 < 50%                                      0%
                 -
--------------------------------------------------------------------------------

      *Awards for weighted  average  achievement  of  Performance  Objectives at
levels above 50% and below 150%, but not shown above, are to be interpolated.

================================================================================


10.   Payment of Final Incentive Performance Awards

      Payment of a Participant's Final Incentive Performance Award shall be made
within 30 days of the date that the Committee  approves the amount of such award
unless the Committee determines,  in its sole discretion,  that payment shall be
made at some other time. Payment shall be paid in cash by check.

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11.   Termination

      (a) If the  employment  of a  Participant  by the Company is terminated on
account  of  the  Participant's  death,  Disability  or  Retirement  after  such
Participant  shall have completed at least one year of a Performance  Cycle, the
Committee shall, if it determines that a Final Incentive  Performance  Award may
be earned  for any such  Performance  Cycle(s)  which  include  the Plan Year of
termination,  prorate the Final Incentive  Performance Award(s) for that part of
such Performance  Cycle(s) in which the Participant was  participating  prior to
such  termination  and the  Company  shall  pay  the  prorated  Final  Incentive
Performance Award as soon as practicable after  determination,  unless otherwise
determined by the Committee.

      (b) If the  employment of a Participant is terminated for any reason other
than death,  Disability or  Retirement,  the  Participant  shall not receive any
Final Incentive  Performance Award for that part of any uncompleted  Performance
Cycle(s) in which the Participant was participating at the time of termination.

      (c) If a Participant becomes a Participant during a Performance Cycle, any
Final  Incentive  Performance  Award to the Participant  shall be  appropriately
prorated  from  the  time  the  Participant  entered  the Plan to the end of the
Performance Cycle.

      (d) In the case of a Participant's  death,  payment of the entire value of
the  Participant's  award  under  the Plan  shall  be made to the  Participant's
Estate.  Such payment shall be made as a lump sum as soon as  practicable  after
the Participant's death.

12.   Assignment

      No  benefit  under  the  Plan  shall in any  manner  or to any  extent  be
assigned,  alienated or transferred by any Participant under the Plan or subject
to attachment, garnishment or other legal process.

13.   Plan Does Not Constitute an Employment Agreement

      This Plan shall not constitute a contract for the continued  employment of
any  Participant  by the  Company.  The Company  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 this Plan.

14.   Amendment or Termination of the Plan by the Company

      The Board of Directors of the Company may, in its sole discretion,  amend,
modify  or  terminate  this Plan at any time,  provided,  however,  that no such
amendment,  modification or termination  shall  materially  adversely affect the
right of a  Participant  in  respect  of a  previously  earned  Final  Incentive
Performance Award which has not been paid, unless such Participant or his or her
legal  representative  shall consent to such change.  If this Plan is terminated

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during  any  Performance  Cycle in which  Participants  have  been  selected  to
participate,  the Board of Directors  may authorize the Committee to prorate and
make  provision  for payment of Final  Incentive  Performance  Awards for such a
period.

15. What Constitutes Notice

      Any notice to a Participant  or legal  representative  hereunder  shall be
given either by  delivering  it, or by  depositing it in the United States mail,
postage prepaid,  addressed to such person's last-known  address.  Any notice to
the Company or the Committee  hereunder  shall be given either by delivering it,
or depositing it in the United States Mail,  postage prepaid,  to the Secretary,
Energis Resources Incorporated,  80 Park Plaza, T4B, P. O. Box 1171, Newark, New
Jersey 07101.

16.   Advance Disclaimer of Any 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.

17.   Effect on 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.

18.   Plan Binding on Any Successor Owner

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

19.   Laws Governing This Plan

      Except to the extent  federal law applies,  this Plan shall be governed by
the laws of the State of New Jersey.

20.   Miscellaneous

      The masculine pronoun shall also mean the feminine and vice versa wherever
appropriate.
<PAGE>
21.   Withholding

      The  Company  shall  have the right to deduct  from any  payment  any sums
required  to be  withheld  by  federal,  state,  or local  tax law.  There is no
obligation  hereunder that any Participant or other person be advised in advance
of the existence of the tax or the amount so required to be withheld.


22.   Effective Date

      This Plan  shall be  effective  as of  January  1, 1997  although,  at the
Committee's  discretion,  the first year of the first  Performance  Cycle may be
less than a full  calender  year and may  commence  prior to such  date,  but no
earlier than June 1, 1996.