RETIREMENT INCOME REINSTATEMENT PLAN

                        FOR NON-REPRESENTED EMPLOYEES OF

                    PUBLIC SERVICE ELECTRIC AND GAS COMPANY

                               AND ITS AFFILIATES






















                                                     As Amended March 26, 1996


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                                TABLE OF CONTENTS





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

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

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

Section 4.  Supplemental Surviving Spouse Benefit............................ 7

Section 5.  Administration of the Plan....................................... 8

Section 6.  Claims Procedure and Status Determination....................... 10

Section 7.  Amendment or Termination........................................ 11

Section 8.  General Provisions.............................................. 11

Section 9.  Miscellaneous................................................... 14



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                      RETIREMENT INCOME REINSTATEMENT PLAN
                        FOR NON-REPRESENTED EMPLOYEES OF
                         PUBLIC SERVICE ELECTRIC AND GAS
                           COMPANY AND ITS AFFILIATES


            This  Retirement  Income   Reinstatement  Plan  for  Non-Represented
Employees  of Public  Service  Electric  and Gas Company and its  Affiliates  is
adopted  effective  January 1, 1995.  This Plan is established and maintained by
Public Service Electric and Gas Company and its Participating  Affiliates solely
for the purpose of assisting in  attracting  and  retaining a stable pool of key
managerial  and  professional  talent and long-term  key employee  commitment by
providing  certain  supplemental   retirement  benefits  for  certain  of  their
employees who participate in the Pension Plan of Public Service Electric and Gas
Company or the Cash  Balance  Pension  Plan of Public  Service  Electric and Gas
Company.  This Plan is intended to constitute an unfunded  "excess benefit plan"
as defined in Section  3(36) of the ERISA,  to the extent it  provides  benefits
that would be paid under the Pension  Plan of Public  Service  Electric  and Gas
Company or the Cash  Balance  Pension  Plan of Public  Service  Electric and Gas
Company but for the limitations of Section 415 of the Code, and an unfunded plan
of deferred  compensation for a select group of management or highly compensated
employees  for  purposes of Title 1 of ERISA,  to the extent it  provides  other
benefits.
            Accordingly,  Public  Service  Electric  and  Gas  Company  hereby
adopts this Plan pursuant to the terms and provisions set forth below:
Section 1.  Definitions
      When used herein, the words and phrases hereinafter defined shall have the
following meanings unless a different meaning is clearly required by the context
of the Plan:


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      1.1  "Affiliate"  shall  mean any  organization  which  is a  member  of a
controlled group of Companies (as defined in Code Section 414(b), as modified by
Code Section  415(h))  which  includes the Company;  or any trades or businesses
(whether or not incorporated) which are under common control (as defined in Code
Section  414(c),  as modified by Code Section  415(h))  with the  Company;  or a
member of an affiliated  service group (as defined in Code Section 414(m)) which
includes  the Company or any other  entity  required to be  aggregated  with the
Company as required by regulations promulgated pursuant to Code Section 414(o).
      1.2  "Beneficiary"  shall  mean  any  person  or  persons  selected  by  a
Participant on a form provided by the Company who may become eligible to receive
to  receive  the  benefits  provided  under  this  Plan  in the  event  of  such
Participant's death.
      1.3 "Benefit  Limitation" shall mean the maximum annual benefit payable to
a Participant under the Pension Plan or the Cash Balance Plan in accordance with
Section 415 of the Code.
      1.4 "Board of  Directors"  or "Board" shall mean the Board of Directors of
the Company.
      1.5 "Cash Balance Plan" shall mean the Cash Balance Pension Plan of Public
Service Electric and Gas Company and each successor or replacement plan.
      1.6 "Code" shall mean the Internal  Revenue Code of 1986, as amended,  and
as same may be amended from time to time.
      1.7    "Company" shall mean Public Service Electric and Gas Company.

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      1.8   "Compensation"  shall mean  compensation as defined in the Pension
Plan or the Cash  Balance  Plan,  as the case may be,  except,  for the purposes
hereof,  Compensation  shall also include amounts which have been deferred under
any Deferred  Compensation  Plan of the Company or any  Participating  Affiliate
which would  otherwise be excluded soley on account of Subsection  1.6(a) of the
Pension  Plan or, as the case may be,  Subsection  1.1(k)(1) of the Cash Balance
Plan.
      1.9  "Compensation  Limitation"  shall mean the  maximum  amount of annual
compensation under Section 401(a)(17) of the Code that may be taken into account
in any Plan Year for benefit accrual purposes under the Pension Plan or the Cash
Balance Plan.
      1.10 "Employee"  shall mean any individual in the employ of the Company or
a Participating Affiliate who is not included within a unit of employees covered
by a collective  bargaining  agreement.  The term "Employee" shall not include a
director of the Company or a  Participating  Affiliate who serves in no capacity
other than as a director, a consultant or independent  contractor doing work for
the Company or a Participating Affiliate or a person employed by a consultant or
independent contractor doing work for the Company or a Participating Affiliate.
      1.11 "Employee Benefits  Committee" or "Committee" shall mean the Employee
Benefits Committee of Public Service Electric and Gas Company.
      1.12  "Employee  Benefits  Policy  Committee"  shall  mean the  Employee
Benefits Policy  Committee of Public Service  Enterprise  Group  Incorporated,
the Company's parent.
      1.13 "ERISA"  shall mean the Employee  Retirement  Income  Security Act of
1974, as amended, and as the same may be amended from time to time.
      1.14  "Normal  Retirement  Date"  shall  mean the  first  day of the month
coinciding with or next following a Participant's attainment of age 65.
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      1.15  "Participant"  shall mean any  Employee  or former  Employee  of the
Company or a  Participating  Affiliate who meets the  requirements of Subsection
2.1 of the Plan.
      1.16  "Participating  Affiliate"  shall mean any  Affiliate of the Company
which (a) is the sponsor or a Participating Affiliate of the Pension Plan and/or
the Cash  Balance  Plan;  (b) adopts this Plan with the approval of the Board of
Directors;  (c)  authorizes  the Board of Directors  and the  Employee  Benefits
Committee  to act for it in all matters  arising  under or with  respect to this
Plan;  and (d) complies  with such other terms and  conditions  relating to this
Plan as may be imposed by the Board of Directors.
      1.17 "Pension Plan" shall mean the Pension Plan of Public Service Electric
and Gas Company and each successor or replacement plan.
      1.18 "Pension Plan  Retirement  Benefit"  shall mean the aggregate  annual
benefit  payable  to a  Participant  pursuant  to the  Pension  Plan or the Cash
Balance Plan, as the case may be, by reason of the Participant's  termination of
employment with the Company and all Affiliates for any reason other than death.
      1.19  "Pension Plan  Surviving  Spouse  Benefit"  shall mean the aggregate
annual benefit payable to the Surviving Spouse of a Participant  pursuant to the
Pension Plan or the Cash Balance  Plan,  as the case may be, in the event of the
death of the  Participant  at any time prior to  commencement  of payment of the
Participant's Pension Plan Retirement Benefit.
      1.20  "Plan"  shall mean this  Retirement  Income  Reinstatement  Plan for
Non-Represented  Employees  of Public  Service  Electric and Gas Company and Its
Affiliates.
      1.21 "Plan Year" shall mean the calendar year.

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      1.22 "Supplemental Retirement Benefit" shall mean the benefit payable to a
Participant pursuant to this Plan by reason of the Participant's  termination of
employment with the Company and all Affiliates for any reason other than death.
      1.23  "Surviving  Spouse"  shall  mean  a  person  who  is  married  to  a
Participant at the date of the Participant's death.
      1.24  "Supplemental  Surviving  Spouse  Benefit"  shall mean the benefit
payable to a Surviving Spouse pursuant to this Plan.
Section 2.  Eligibility
      2.1 A  Participant  who is eligible to receive a Pension  Plan  Retirement
Benefit,  the amount of which is reduced by reason of (a) the application of the
limitations on benefits imposed by application of any provisions of the Code, as
in effect on the date for commencement of the Pension Plan Retirement Benefit or
as in effect at any time  thereafter,  to the Pension  Plan or the Cash  Balance
Plan, as the case may be, or (b) the  restrictions  of Subsection  1.6(a) of the
Pension Plan or Subsection 1.1(k)(1) of the Cash Balance Plan, shall be eligible
to  receive  a  Supplemental  Retirement  Benefit.  The  Surviving  Spouse  of a
Participant  described in the preceding  sentence who dies prior to commencement
of payment of his Pension Plan Retirement Benefit shall be eligible to receive a
Supplemental  Surviving  Spouse  Benefit.
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Section  3.  Supplemental  Retirement Benefit
      3.1 The Supplemental Retirement Benefit payable to an eligible Participant
shall be equal to the excess of (a) over (b) where:
            (a) is the amount of Pension  Plan  Retirement  Benefit to which the
Participant  would have been entitled under the Pension Plan or the Cash Balance
Plan,  as the case may be, if such benefit were computed  without  regard to (i)
the exclusion of any amounts pursuant to Subsection  1.6(a) of the Pension Plan,
(ii) the exclusion of any amounts  pursuant to Subsection  1.1(k)(1) of the Cash
Balance Plan, (iii) the Benefit Limitation or (iv) the Compensation  Limitation;
and
            (b) is the amount of the Pension Plan  Retirement  Benefit  actually
payable to the  Participant  or payable  to a third  party on the  Participant's
behalf under the Pension Plan or the Cash Balance Plan, as the case may be.
            The  amounts  described  in (a) and (b) shall be  computed as of the
date of  termination of employment of the  Participant  with the Company and all
Affiliates in the form of a single life annuity payable over the lifetime of the
Participant only commencing on his Normal Retirement Date.
      3.2. The Supplemental Retirement Benefit payable to a Participant shall be
paid in the same form under which the Pension Plan Retirement Benefit is payable
to the Participant (including the election to receive a lump sum distribution of
the present value of any benefit).  The Participant's election under the Pension
Plan or the Cash  Balance  Plan,  as the case may be,  of any  optional  form of
payment of his Pension Plan  Retirement  Benefit  (with the valid consent of his
spouse where  required  under the Pension Plan or the Cash Balance  Plan, as the
case  may be)  shall  also be  applicable  to the  payment  of his  Supplemental
Retirement Benefit.

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      3.3 Payment of the Supplemental  Retirement Benefit to a Participant shall
commence on the same date as payment of the Pension Plan  Retirement  Benefit to
the  Participant  commences.  Any  election  under the Pension  Plan or the Cash
Balance  Plan, as the case may be, made by the  Participant  with respect to the
commencement  of payment of his Pension Plan  Retirement  Benefit  shall also be
applicable  with  respect to the  commencement  of  payment of his  Supplemental
Retirement Benefit.
      3.4  Notwithstanding  the  provisions  of Sections  3.2 and 3.3 above,  an
election  made by the  Participant  under the Pension  Plan or the Cash  Balance
Plan,  as the case may be,  with  respect to the form of payment of his  Pension
Plan  Retirement  Benefit (with the valid  consent of his spouse where  required
under the Pension Plan), or the date for commencement of payment thereof,  shall
not be effective with respect to the form of payment or date for commencement of
payment of his Supplemental  Retirement  Benefits hereunder unless such election
is  expressly  approved  by the  Committee  with  respect  to  his  Supplemental
Retirement Benefit.  If the Committee shall not approve such election,  then the
form of  payment  or date  for  commencement  of  payment  of the  Participant's
Supplemental  Retirement Benefits shall be selected by the Committee in its sole
discretion.
      3.5 A Supplemental  Retirement  Benefit which is payable in any form other
than a single  life  annuity  over the  lifetime  of the  Participant,  or which
commences at any time prior to the  Participant's  Normal Retirement Date, shall
be the actuarial equivalent of the Supplemental  Retirement Benefit set forth in
Subsection  3.1 above as determined by the same  actuarial  adjustments as those
specified in the Pension Plan or the Cash Balance Plan, as the case may be, with
respect to determination of the amount of the Pension Plan Retirement Benefit on
the  date  for  commencement  of  payment  hereunder.
Section  4.  Supplemental Surviving Spouse Benefit
      4.1 If a Participant  dies prior to commencement of payment of his Pension
Plan Retirement  Benefit under  circumstances  in which a Pension Plan Surviving
Spouse Benefit is payable to his Surviving Spouse, then a Supplemental Surviving
Spouse Benefit shall be payable to his Surviving Spouse as hereinafter provided.
The Supplemental Surviving Spouse Benefit payable to a Surviving Spouse shall be
equal to the excess of (a) over (b) where:
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            (a) is the amount of Pension Plan Surviving  Spouse Benefit to which
the Surviving Spouse would have been entitled under the Pension Plan or the Cash
Balance Plan, as the case may be, if such benefit were computed  without  regard
to (i) the exclusion of any amounts pursuant to Subsection 1.6(a) of the Pension
Plan, (ii) the exclusion of any amounts pursuant to Subsection  1.1(k)(1) of the
Cash  Balance  Plan,  (iii)  the  Benefit  Limitation  or (iv) the  Compensation
Limitation; and
            (b) is the  amount of the  Pension  Plan  Surviving  Spouse  Benefit
actually  payable to the  Surviving  Spouse  under the Pension  Plan or the Cash
Balance Plan, as the case may be.
      4.2 A  Supplemental  Surviving  Spouse  Benefit  shall be payable over the
lifetime of the Surviving Spouse only in monthly installments  commencing on the
date for commencement of payment of the Pension Plan Surviving Spouse Benefit to
the  Surviving  Spouse and  terminating  on the date of the last  payment of the
Pension Plan Surviving Spouse Benefit made before the Surviving  Spouse's death.
Section 5. Administration of the Plan
      5.1 The Committee  shall be the named  fiduciary of this Plan  responsible
for the general  operation and  administration of this Plan and for carrying out
the provisions  thereof.  The Committee  shall have  discretionary  authority to
construe the terms of this Plan.
      5.2 The  Committee  shall  adopt  such  rules and  procedures  as it deems
necessary and  advisable to  administer  this Plan and to transact its business.
Subject to the other requirements of this Section 5, the Committee may--
            (a) employ  agents to carry out  non-fiduciary  responsibility;  (b)
            employ agents to carry out fiduciary responsibilities
(other  than  trustee  responsibilities  as defined in  Section  405(c)(3)  of
ERISA);
            (c)   consult with  counsel,  who may be counsel to the Company or
an Affiliate; and
            (d) provide for the allocation of fiduciary  responsibilities (other
than trustee  responsibilities  as defined in Section  405(c)(3) of ERISA) among
its members.
            However,  any action described in sub-paragraphs  (b) or (d) of this
Subsection 5.2, and any  modification  or rescission of any such action,  may be
effected by the  Committee  only by a  resolution  approved by a majority of the
Committee. The Committee shall be entitled to rely conclusively upon all tables,
valuations,   certificates,   opinions  and  reports   furnished   any  actuary,
accountant,  controller,  counsel  or other  person  employed  or engaged by the
Committee with respect to this Plan.
      5.3 The Committee shall keep written minutes of all its proceedings, which
shall  be open to  inspection  by the  Board  of  Directors.  In the case of any
decision by the Committee  with respect to a claim for benefits under this Plan,
such Committee  shall include in its minutes a brief  explanation of the grounds
upon which such decision was based.
      5.4 In  performing  their duties,  the members of the Committee  shall act
solely in the interest of the Participants in this Plan and their  Beneficiaries
and
            (a)   for  the   exclusive   purpose  of  providing   benefits  to
Participants and their Beneficiaries;
            (b)  with  the  care,  skill,   prudence  and  diligence  under  the
circumstances  then prevailing that a prudent person acting in like capacity and
familiar  with such matters  would use in the conduct of an enterprise of a like
character and with like aims; and
            (c) in accordance with the documents and instruments  governing this
Plan  insofar  as  such  documents  and  instruments  are  consistent  with  the
provisions of Title I of ERISA.
      5.5 In addition to any other duties the Committee may have,  the Committee
shall review the  performance  of all persons to whom the  Committee  shall have
delegated or  allocated  fiduciary  duties  pursuant to the  provisions  of this
Section 5.
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      5.6 The Company agrees to indemnify and  reimburse,  to the fullest extent
permitted  by law,  members of the  Committee,  directors  and  employees of the
Company  and  its  Affiliates,  and  all  such  former  members,  directors  and
employees,  for any and all expenses,  liabilities  or losses arising out of any
act or omission  relating to the rendition of services for or the management and
administration of this Plan.
      5.7   No member  of the  Committee  nor any  delegate  thereof  shall be
personally  liable by virtue of any  contract,  agreement or other  instrument
made or executed by him or on his behalf in such capacity.
Section 6.  Claims Procedure and Status Determination
      6.1  Claims  for  benefits  under  this  Plan  and  requests  for a status
determination shall be filed in writing with the Company.
      6.2 In the case of a claim for benefits,  written notice shall be given to
the  claiming  Participant  or  Beneficiary  of the  disposition  of such claim,
setting forth specific reasons for any denial of such claim in whole or in part.
If a claim is denied  in whole or in part,  the  notice  shall  state  that such
Participant or Beneficiary may, within sixty days of the receipt of such denial,
request  in writing  that the  decision  denying  the claim be  reviewed  by the
Committee and provide the Committee with  information in support of his position
by submitting such information in writing to the Secretary of the Committee.
      6.3 The  Committee  shall  review each claim for  benefits  which has been
denied in whole or in part and for which  such  review  has been  requested  and
shall  notify,  in writing,  the  affected  Participant  or  Beneficiary  of its
decision and the reasons therefor.
      6.4   In the case of a request for status determination,  written notice
shall be given to the  requesting  person  within a  reasonable  time  setting
forth specific reasons for the decision.
Section 7.  Amendment or Termination
      7.1 The Company  reserves the right to amend or terminate  this Plan when,
in the sole opinion of the Company,  such amendment or termination is advisable.
Any such amendment or termination  shall be made pursuant to a resolution of the
Board or of the Employee  Benefits  Policy  Committee  and shall be effective as
provided for in such resolution.
      7.2 No amendment or  termination of this Plan shall directly or indirectly
deprive any current or former  Participant,  Beneficiary or Surviving  Spouse of
all or any  portion  of any  Supplemental  Retirement  Benefit  or  Supplemental
Surviving Spouse Benefit payment which has commenced prior to the effective date
of such  amendment  or  termination  or the right to which has  accrued  on such
effective date.
Section 8. General Provisions
      8.1 This Plan at all times shall be  entirely  unfunded  and no  provision
shall at any time be made with respect to segregating  any assets of the Company
or  any  Affiliate  for  payment  of any  benefits  hereunder.  No  Participant,
Beneficiary, Surviving Spouse or any other person shall have any interest in any
particular  assets of the  Company  or any  Affiliate  by reason of the right to
receive  a  benefit  under  this  Plan  and any such  Participant,  Beneficiary,
Surviving  Spouse  or other  person  shall  have  only the  rights  of a general
unsecured creditor with respect to any rights under the Plan.
      8.2  Except  as  otherwise   expressly  provided  herein,  all  terms  and
conditions  of the Pension  Plan or the Cash Balance  Plan,  as the case may be,
applicable  to a Pension Plan  Retirement  Benefit or a Pension  Plan  Surviving
Spouse Benefit shall also be applicable to a Supplemental  Retirement Benefit or
a Supplemental  Surviving  Spouse Benefits payable  hereunder.  Any Pension Plan
Retirement  Benefit or  Pension  Plan  Surviving  Spouse  Benefit,  or any other
benefit payable under the Pension Plan or the Cash Balance Plan, as the case may
be,  shall be paid solely in  accordance  with the terms and  conditions  of the
Pension Plan or the Cash Balance  Plan,  as the case may be, and nothing in this
Plan shall  operate or be  construed  in any way to modify,  amend or affect the
terms and  provisions  of the Pension Plan or the Cash Balance Plan, as the case
may be.
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      8.3  Nothing  contained  in this Plan shall  constitute  a guaranty by the
Company  or any other  entity or person  that the  assets of the  Company or any
Affiliate will be sufficient to pay any benefit hereunder.
      8.4 No Participant  or Surviving  Spouse shall have any right to a benefit
under this Plan except in accordance with the terms of this Plan.  Establishment
of this Plan  shall not be  construed  to give any  Participant  the right to be
retained in the service of the Company or any Affiliate.
      8.5 No  interest of any person or entity in, or right to receive a benefit
under, this Plan shall be subject in any manner to sale,  transfer,  assignment,
pledge, attachment,  garnishment or other alienation or encumbrance of any kind;
nor any  such  interest  or  right  to  receive  a  benefits  be  taken,  either
voluntarily or  involuntarily,  for the  satisfaction  of the debts of, or other
obligations  or claims  against,  such  person or entity,  including  claims for
alimony, support, separate maintenance and claims in bankruptcy proceedings.
      8.6 This Plan shall be construed  and  administered  under the laws of the
United  States  and the State of New  Jersey to the  extent  not  superseded  by
Federal law.
      8.7  If the  present  value  of any  Supplemental  Retirement  Benefit  or
Supplemental  Surviving Spouse benefit is less than $3,500,  the Company may pay
the present value of such Benefit to the  Participant  or Surviving  Spouse in a
single lump sum in lieu of any further benefit payments hereunder.
      8.8  Actuarial  assumptions  to determine the present value of any benefit
hereunder  shall be the same as used to determine  the present value of benefits
under the Pension Plan or the Cash Balance Plan, as the case may be.
      8.9 If any person  entitled to a benefit payment under this Plan is deemed
by the  Committee  to be incapable of  personally  receiving  and giving a valid
receipt for such payment,  then, unless and until claim therefor shall have been
made by a duly appointed guardian or other legal  representative of such person,
the Committee may provide for such payment or any part thereof to be made to any
other person or institution then  contributing  toward or providing for the care
and  maintenance  of such person.  Any such  payment  shall be a payment for the
account of such person and a complete  discharge of any liability of the Company
and this Plan therefor.
      8.10 This Plan shall not be automatically terminated by a transfer or sale
of assets of the Company or by the merger or  consolidation  of the Company into
or with any other  company or other  entity,  but this Plan  shall be  continued
after  such sale,  merger or  consolidation  only if and to the extent  that the
transferee,  purchaser or successor  entity agrees to continue this Plan. In the
event that this Plan is not continued by the transferee,  purchaser or successor
entity, then this Plan shall terminate subject to the provisions of Section 7.2.

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      8.11 Each  Participant  shall keep the  Company  informed  of his  current
address  and the  current  address  of his  spouse.  The  Company  shall  not be
obligated  to search for the  whereabouts  of any person.  If the  location of a
Participant  is not made known to the Company  within  three (3) years after the
date on which payment of the Participant's  Supplemental  Retirement Benefit may
first be made, payment may be made as though the Participant had died at the end
of the three-year  period.  If, within one additional year after such three-year
period  has  elapsed,  or,  within  three  years  after  the  actual  death of a
Participant,  the  Company  is  unable  to locate  any  Surviving  Spouse of the
Participant,  then the  Company  shall  have no  further  obligation  to pay any
benefit  hereunder to such  Participant or Surviving  Spouse or any other person
and such benefit shall be irrevocably forfeited.
      8.12 Notwithstanding any of the preceding provisions of this Plan, none of
the Company,  the Committee or any individual  acting as an employee or agent of
the  Company  or the  Committee  shall  be  liable  to any  Participant,  former
Participant, Surviving Spouse or any other person for any claim, loss, liability
or expense incurred in connection with this Plan.
Section 9. Miscellaneous
      9.1 As used  herein,  words in the  masculine  gender  shall  include  the
feminine  and the  singular  shall  include the plural,  and vice versa,  unless
otherwise  required by the context.  Any  headings  used herein are included for
ease of  reference  only and are not to be  construed  so as to alter  the terms
hereof.