EXHIBIT 10A(16)1
                           EMPLOYMENT AGREEMENT


          THIS AGREEMENT is entered into this 10th day of August,
1995 by and between Atlantic Energy, Inc., a New Jersey
corporation (the "Company"), and Jerrold L. Jacobs (the
"Executive").

          In consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Company
and the Executive as follows:

          1.  Term of Agreement.  (a)  Employment Period.  The
term of this Agreement shall commence on the date hereof (the
"Effective Date") and shall continue until the second anniversary
of the Effective Date (the "Employment Period"); provided,
however, that the Employment Period shall be automatically
renewed for two years unless either party shall send the other
written notice of its intention to terminate the agreement at the
end of such Employment Period one year prior to the end of such
Employment Period; and, provided, further, that upon the
occurrence of a Change of Control, the Employment Period shall
become three years and shall commence on the date of the Change
of Control, and shall thereafter be automatically renewed for two
years unless either party shall send the other written notice of
its intention to terminate the agreement one year prior to the
end of the then current Employment Period.

          (b)  Consulting Period.  Notwithstanding the foregoing,
in the event that the Executive elects to retire at any time on
or after December 1, 1996 (the "Retirement Date") he may, at his
election, enter into a consulting arrangement with the Company
commencing on the day after the Retirement Date and ending on 
the second anniversary thereof (the "Consulting Period").  The
rights and obligations of the parties during the Consulting
Period are set forth on Exhibit A hereto.

   
          2.  Place of Employment.  The Executive's services
during the Employment Period shall be performed primarily at the
principal offices of the Company in Egg Harbor Township, New
Jersey.  The Executive shall be furnished with a suitable office
and such other facilities and services as he may reasonably
require in performing his obligations under this Agreement.

          3.  Employment Obligations.  

          (a)   Position and Duties.  The Company hereby agrees
to employ the Executive as its President and Chief Executive
Officer and as the Chairman and Chief Executive Officer of
Atlantic City Electric Company ("Electric") for the Employment
Period.  The Executive shall exercise his reasonable best efforts
in furtherance of, and shall devote substantially all of his
working time and attention to the affairs of the Company and its
affiliates, and shall perform such duties and services as may
reasonably be assigned to him by, and shall report directly to
the Board of Directors of the Company (the "Board").


          (b)  Business Time.  From and after the Effective Date,
the Executive agrees to devote his full business time during
normal business hours to the business and affairs of the Company
and to use his best efforts to perform faithfully and efficiently
the responsibilities assigned to him hereunder, to the extent
necessary to discharge such responsibilities, except for (i) time
spent in managing his personal, financial and legal affairs and
serving on corporate, civic or charitable boards or committees on
which he served prior to the Effective Date, in each case only if
and to the extent not substantially interfering with the
performance of such responsibilities, and (ii) periods of
vacation and sick leave to which he is entitled.  It is expressly
understood and agreed that the Executive's continuing to serve on
any boards and committees on which he is serving or with which he
is otherwise associated immediately preceding the Effective Date
which is not in violation of any Company policy shall not be
deemed to interfere with the performance of the Executive's
services to the Company.  In addition, the Executive may commence
service as a director of other corporations or organizations
after the Effective Date upon approval by the Board which, in the
judgment of the Board, will not present any conflict of interest
with the Company or any subsidiary or affiliate thereof, and
which would not affect the performance of Executive's duties
pursuant to this Agreement, which approval shall not be
unreasonably withheld; provided, however, that the Executive
shall neither (a) become an officer or director of (i) another
entity which has or will have the status of a public utility
under the Federal Power Act, or any successor act, (ii) any bank,
trust company, banking association or firm that is authorized by
law to underwrite or participate in the marketing of securities
of a public utility, or (iii) any company supplying electrical
equipment to the Company, nor (b) accept any such position and
commence the performance of any duties or services in such
capacity (an "Interlock"), unless the Executive shall have first
(x) furnished the Board with at least thirty (30) days prior
written notice of his intention to create such Interlock and (y)
secured, if the Board shall request that such action be taken,
any necessary authorization for such Interlock, in form and
substance satisfactory to the Board, from the Federal Energy
Regulatory Commission, or successor regulatory agency, pursuant
to Section 305(b) of the Federal Power Act, or any supplement or
amendment thereto.

     4.  Compensation.  (a)  Base Salary.  During the Employment
Period, the Executive shall receive a base salary ("Base Salary")
at an annual rate at least equal to the annual salary paid to the
Executive by the Company and any of its affiliated companies
immediately prior to the Effective Date.  The Base Salary shall
be reviewed at least once each year after the Effective Date, and
may be increased (but not decreased) at any time and from time to
time by action of the Board or any committee thereof or any
individual having authority to take such action in accordance
with the Company's regular practices.  Once increased, any
reference to Base Salary herein shall be a reference to such
increased amount.  Neither the Base Salary nor any increase in
Base Salary after the Effective Date shall serve to limit or
reduce any other obligation of the Company hereunder.

          (b)  Annual Bonus.  During the Employment Period, in
addition to the Base Salary, for each fiscal year of the Company
ending during the Employment Period, the Executive shall have the
opportunity to receive an annual bonus ("Annual Bonus
Opportunity"), based on the achievement of target levels of
performance.  Without limiting the generality of the foregoing,
following any Change of Control (as defined hereinafter), the
amount actually payable to the Executive as an annual bonus shall
not be less than an amount equal to the higher of the bonus paid
to the Executive for the most recently ended fiscal year of the
Company or the target bonus for the then current fiscal year (the
"Minimum Bonus Amount").  Any amount payable in respect of the
Annual Bonus Opportunity or the Minimum Bonus Amount shall be
paid no later than sixty (60) days after the close of the fiscal
year for which the amount (or prorated portion) is earned or
awarded, unless electively deferred by the Executive pursuant to
any deferral programs or arrangements that the Company may make
available to the Executive.

          (c)  Long-term Incentive Compensation Programs and
Equity Programs.  During the Employment Period, the Executive
shall participate in all long-term incentive compensation
programs and equity programs for key executives at a level that
is commensurate with the Executive's participation in such plans
immediately prior to the Effective Date, or, if more favorable to
the Executive, at the level made available to the Executive or
other similarly situated executive officers of the Company and
its affiliated companies at any time thereafter, it being
understood that as of the Effective Date all of the Executive's
options now or hereafter granted under such plans shall be
exercisable, by the Executive or his beneficiary, until the later
of (i) December 31, 1999, or (ii) the date set forth in the plan
or the operative option agreements. 

          (d)  Benefit Plans.  During the Employment Period, the
Executive (and, to the extent applicable, his dependents) shall
be entitled to participate in or be covered under all pension,
retirement, supplemental retirement or excess benefit
(collectively, the "Supplemental Retirement Benefits"), deferred
compensation, savings, medical, dental, health, disability, group
life, accidental death and travel accident insurance plans and
programs of the Company and its affiliated companies at a level
that is commensurate with and provides the same level and quality
of coverage as the Executive's participation in such plans
immediately prior to the Effective Date (except for the Medical
Executive Reimbursement Plan (the "MERP"), it being understood
that the MERP shall be terminated as of September 30, 1995), or,
if more favorable to the Executive, at the level made available
to the Executive or other similarly situated executive officers
of the Company and its affiliated companies at any time
thereafter, it being understood that (I) post-employment medical
benefits either under the Company's medical insurance plan, or
otherwise, shall be provided by the Company to the Executive and
his spouse, Carol Jacobs (the "Spouse"), at a level that is
commensurate with and provides the same level and quality of
coverage as the Executive and Spouse's participation in such plan
immediately prior to the Date of Termination until the later of
(i) the Executive's death or (ii) the Spouse's death; provided,
however, that such benefits shall be offset by any medical
benefits payable to the Executive or the Spouse under any then
applicable state or federal medical plans or programs, and (II)
to the extent Board or Company approval is required or to the
extent notice by the Executive is required under any plan
providing Supplemental Retirement Benefits for any election for
form of benefit or timing of payment thereof, such approval is
hereby deemed granted and such notice is deemed to have been
satisfied.  In addition, in the event that the Company adjusts
interest rate assumptions or mortality tables used in the
calculation of lump sum benefits under the Company's qualified
pension plan in order to comply with federal law, Executive's
aggregate benefits under the Company's qualified and nonqualified
pension plans shall not be less than such benefits would have
been if calculated in accordance with the interest rate
assumptions and mortality table in effect as of the Effective
Date.  

          (e)  Expenses.  During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by the Executive in accordance
with the policies and procedures of the Company as in effect from
time to time; provided, however, that in no event shall such
policies and procedures after the occurrence of a Change of
Control be less favorable to the Executive than immediately prior
to a Change of Control.  Notwithstanding the foregoing, the
Company may apply the policies and procedures in effect after the
Change of Control date to the Executive, if such policies and
procedures are more favorable to the Executive than those in
effect immediately prior to the Change of Control date.

          (f)  Vacation and Fringe Benefits.  During the
Employment Period, the Executive shall be entitled to paid
vacation and fringe benefits at a level that is commensurate with
the paid vacation and fringe benefits available to the Executive
immediately prior to the Effective Date, or, if more favorable to

the Executive, at the level made available from time to time to
the Executive or other similarly situated executive officers at
any time thereafter.

          (g)  Indemnification.  During and after the Employment
Period, the Company shall indemnify the Executive and hold the
Executive harmless from and against any claim, loss or cause of
action arising from or out of the Executive's performance as an
officer, director or employee of the Company or any of its
subsidiaries or in any other capacity, including any fiduciary
capacity, in which the Executive serves at the request of the
Company to the maximum extent permitted by applicable law and the
Company's Certificate of Incorporation and By-Laws (the
"Governing Documents"); provided, however, that in no event shall
the protection afforded to the Executive hereunder be less than
that afforded under the Governing Documents as in effect im-
mediately prior to the Effective Date, or if later, the Change of
Control.

 
          5.  Termination. (a)  Death, Permanent Disability or
Retirement.  Subject to the provisions of Section 1 hereof, this
Agreement shall terminate automatically upon the Executive's
death, Permanent Disability (as defined in Section 22(e)(3) of
the Internal Revenue Code of 1986, as amended (the "Code"),
except that a six month period shall be substituted for the
twelve month period provided for therein) or voluntary retirement
under any of the Company's retirement plans as in effect from
time to time, it being understood that the Executive is eligible
for voluntary retirement as of the Effective Date.

          (b)  Voluntary Termination.  Notwithstanding anything
in this Agreement to the contrary, the Executive may, upon not
less than 60 days' written notice to the Company, voluntarily
terminate employment for any reason; provided, however, that any
termination by the Executive pursuant to Section 5(d) on account
of Good Reason (as defined therein) or voluntary retirement shall
not be treated as a voluntary termination under this Section
5(b).  

          (c)  Cause.  The Company may terminate the Executive's
employment for Cause.  For purposes of this Agreement, "Cause"
means (i) willful and continuous failure by Executive to perform
his duties under this Agreement (other than resulting from
incapacity due to physical or mental illness), (ii) the
Executive's conviction or plea of nolo contendere to a felony;
(iii) the Executive's willful engagement in misconduct in
connection with employment which results in material damage to
the Company's business or reputation; or (iv) material breach of
Executive's duties hereunder which result in material damage to
the Company's business or reputation, in each of (ii) through
(iv) above, upon 30 days written notice to the Executive, the
opportunity for the Executive to be heard by the Board and the
good faith determination by at least two-thirds of the Company's
non-employee directors that Cause exists; provided, however, that
after the occurrence of a Change of Control (as hereinafter
defined), "Cause" shall be limited to (ii) through (iv) above.

          (d)  Good Reason.  During the Employment Period,
Executive may terminate his employment for Good Reason.  For
purposes of this Agreement, "Good Reason" means the occurrence of
any of the following, without the express written consent of the
Executive:

            (i   (A) the assignment to the Executive of any
     duties inconsistent with the Executive's position, authority
     or responsibilities as contemplated by Section 3 of this
     Agreement, or (B) any other adverse change in such position,
     including titles, authority or responsibilities;

           (ii   reduction of Executives's base salary or bonus
     opportunities, or any other material breach by the Company
     of this Agreement;

          (iii   the Company's requiring the Executive to be
     based at any office or location more than 25 miles from that
     location at which he performed his services specified under
     the provisions of Section 2 immediately prior to the Change
     of Control, except for travel reasonably required in the
     performance of the Executive's responsibilities; or

           (iv   any failure by the Company to obtain the
     assumption and agreement to perform this Agreement by a
     successor as contemplated by Section 12(b) upon the
     occurrence of a Change of Control; provided, however, that
     the successor has had actual written notice of the existence
     of this Agreement and its terms and an opportunity to assume
     the Company's responsibilities under this Agreement during a
     period of 10 business days after receipt of such notice.

          (e)  Notice of Termination.  Any termination by the
Company for Cause or by the Executive for Good Reason shall be
communicated by Notice of Termination to the other party hereto
given in accordance with Section 13(f).  For purposes of this
Agreement, a "Notice of Termination" means a written notice
given, in the case of a termination for Cause, within 10 business
days of the Company's having actual knowledge of the events
giving rise to such termination, and in the case of a termination
for Good Reason, within 180 days of the Executive's having actual
knowledge of the events giving rise to such termination, and
which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so
indicated, and (iii) if the termination date is other than the
date of receipt of such notice, specifies the termination date of
this Agreement (which date shall be not more than 15 days after
the giving of such notice).  The failure by the Executive to set
forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason shall not waive any right
of the Executive hereunder or preclude the Executive from
asserting such fact or circumstance in enforcing his rights
hereunder.

          (f)  Date of Termination.  For purposes of this
Agreement, the term "Date of Termination" means (i) in the case
of a termination for which a Notice of Termination is required,
the date of receipt of such Notice of Termination or, if later,
the date specified therein, as the case may be, and (ii) in all
other cases, the actual date on which the Executive's employment
terminates during the Employment Period.  On or as soon as
practicable following the Date of Termination, the Executive
shall return to the Company all property of the Company and all
copies thereof in the Executive's possession or under his
control.


          6.  Obligations of the Company upon Termination.
(a)  Death, Permanent Disability or Retirement.  If the
Executive's employment is terminated during the Employment Period
by reason of the Executive's death, Permanent Disability or
voluntary retirement, this Agreement shall terminate without
further obligations to the Executive or the Executive's legal
representatives under this Agreement other than those obligations
accrued hereunder at the Date of Termination, and the Company
shall pay or provide to the Executive or the Executive's legal
representatives under this Agreement the following amounts either
in a lump sum or in such other form of payment as is provided or
elected by the Executive under the operative plan:

          (i)  the Executive's full Base Salary through the Date
               of Termination (the "Earned Salary");

              (ii)  in the event of a termination by reason of
              death
                    or Permanent Disability only, a cash amount
                    (the
                    "Severance Amount") equal to the sum of

                    (A)  the Executive's annual Base Salary; plus

                    (B)  the Minimum Bonus Amount; multiplied by

                    (C)  a fraction, the numerator of which is
                         the number of full months remaining in
                         the Employment Period, and the
                         denominator of which is twelve.

                    Notwithstanding the foregoing, in the event
                    of termination by reason of Permanent
                    Disability, the Severance Amount shall be
                    reduced by any salary replacement payments
                    received by the Executive under any long-term
                    disability plan sponsored by the Company.
     
             (iii)  the Supplemental Retirement Benefits and the
                    amount otherwise payable to or in respect of the
                    Executive under the Company's otherwise applicable
                    long-term incentive compensation and equity plans
                    and programs (the "Incentive and Equity  Amounts")
                    it being understood that, in the event of death or
                    disability, any applicable performance targets
                    thereunder (to the extent not already determined
                    as of the last day of Employment) shall be deemed
                    to have been met for the applicable performance
                    period and that payments thereunder shall be pro-
                    rated as of the last day of the Employment Period;
                    and in the event of a termination by reason of
                    voluntary retirement, then the Supplemental
                    Retirement Benefits and the Incentive and Equity
                    Amounts, the Incentive and Equity Amounts being
                    calculated and payable in accordance with the
                    terms of the underlying plans and payable to the
                    Executive when awards are payable to all other
                    participants in such plans in accordance with the
                    terms thereof, but prorated through the date of
                    such retirement; and

              (iv)  an amount (the "Pro-Rated Bonus") equal to the
                    product of (x) times (y), minus (z):

                    (x) the Minimum Bonus Amount;

                    (y) a fraction, the numerator of which is the
                    number of days in the then current calendar
                    year which have elapsed as of the Date of
                    Termination, and the denominator of which is
                    365;

                    (z) if Executive's termination occurs in the
                    same calendar year as the Change of Control,
                    an amount equal to the amount paid to the
                    Executive under the Company's applicable
                    bonus plan (the "Actual Bonus Payment")
     
          (v)  all vested amounts or benefits owing to the
               Executive under the Company's otherwise applicable
               employee benefit plans and programs, including any
               compensation previously deferred by the Executive
               (together with any accrued earnings thereon) and
               not yet paid by the Company and any accrued
               vacation pay not yet paid by the Company (the
               "Accrued Obligations").

Any Earned Salary, Severance Amount, Accrued Obligations and
Pro-Rated Bonus shall be paid in cash in a single lump sum as
soon as practicable (but in no event more than 20 days) following
the Date of Termination.  Any Incentive and Equity Amounts and
Supplemental Retirement Benefits accrued by the Executive shall
be payable in accordance with the terms of the underlying plans,
it being understood that for purposes of such plans, in the event
of a termination by reason of death or Permanent Disability,
Executive shall be treated as if he retired on the last day of
the Employment Period.

          (b)  Cause and Voluntary Termination.  If, during the
Employment Period, the Executive's employment shall be terminated
for Cause or voluntarily terminated by the Executive (other than
on account of Good Reason), the Company shall pay the Executive
the Earned Salary and the Accrued Obligations (including, but not
limited to, the Incentive and Equity Amounts and Supplemental
Retirement Benefits, each in accordance with the terms of the
underlying plan) in cash in a single lump sum as soon as
practicable (but in no event more than 20 days following) the
Date of Termination, or in accordance with the terms of the
underlying plan.

          (c)  Termination by the Company other than for Cause
and Termination by the Executive for Good Reason.

     (A) Prior to the Occurrence of a Change of Control.

            (i   Payments.  If, prior to a Change of Control, the
     Company terminates the Executive's employment other than for
     Cause, or the Executive terminates his employment for Good
     Reason, the Company shall pay to the Executive the following
     amounts, either in a lump sum or in such other form of
     payment as is provided or elected by the Executive under the
     operative plan:

          (A)  the Executive's Earned Salary;

          (B)  a cash amount (the "Pre-Change Severance Amount")
               equal to two multiplied by the sum of

                    (1)  the Executive's annual Base Salary; plus

                    (2)  the Minimum Bonus Amount.

          (C)  the Pro-Rated Bonus;

          (D)  the Incentive and Equity Amounts;

          (E)  the Supplemental Retirement Benefits, it being
               understood that upon the occurrence of a
               termination under this Section 6(c)(A),
               Executive's vested interest in such benefits shall
               accelerate; and

          (F)  the Accrued Obligations.

     Any Earned Salary, Pre-Change Severance Amount, Accrued
     Obligations and Pro-Rated Bonus shall be paid in cash in a
     single lump sum as soon as practicable (but in no event more
     than 20 days) following the Date of Termination.  The
     Supplemental Retirement Benefits and Incentive and Equity
     Amounts shall be payable in accordance with the terms of the
     underlying plans.

           (ii   Continuation of Benefits.  If, during the
     Employment Period, the Company terminates the Executive's
     employment other than for Cause, or the Executive terminates
     employment for Good Reason prior to the occurrence of a
     Change of Control:

          (A)  the Executive (and, to the extent applicable, his
               dependents) shall be entitled, after the Date of
               Termination until the earlier of (i) the second
               anniversary of the Date of Termination, or (ii)
               the date on which the Executive is covered under
               any comparable plans of a subsequent employer (the
               "End Date"), to continue participation (including,
               but not limited to, vesting and accruals) in all
               of the Company's employee and executive pension,
               welfare and fringe benefit plans, it being
               understood that for purposes of the calculation of
               Supplemental Retirement Benefits, Final Annual
               Compensation (as defined in the underlying plans)
               shall be equal to Final Annual Compensation as of
               the Date of Termination (the "Benefit Plans").  To
               the extent any such benefits cannot be provided
               under the terms of the applicable plan, policy or
               program, the Company shall provide a comparable
               benefit under another plan or from the Company's
               general assets.  The Executive's participation in
               the Benefit Plans will be on the same terms and
               conditions that would have applied had the
               Executive continued to be employed by the Company
               through the End Date;

          (B)  the Executive (or, in the event of the Executive's
               death during such period, the Executive's
               beneficiary or estate) shall have the right to
               exercise any outstanding options to purchase
               shares of Common Stock of the Company then
               exercisable by the Executive or which would become
               exercisable in accordance with the applicable
               option agreement and the applicable equity
               incentive plan of the Company (such agreements and
               plans referred to collectively as the "Equity
               Documents") for the period of time described in
               Section 4(c) after the Date of Termination; and

          (C)  for purposes of the Benefit Plans and the Equity
               Documents, the Executive will be deemed to have
               terminated employment under mutually satisfactory
               conditions.


     (B) After the Occurrence of a Change of Control.

          (i)  Payments.  If, following a Change of Control, the
     Company terminates the Executive's employment other than for
     Cause, or the Executive terminates his employment for Good
     Reason, the Company shall pay to the Executive the following
     amounts, either in a lump sum or in such other form of
     payment as is provided or elected by the Executive under the
     operative plan:

          (A)  the Executive's Earned Salary;

          (B)  a cash amount (the "Severance Amount") equal to
               three times the sum of

                    (1)  the Executive's annual Base Salary; and

                    (2)  the Minimum Bonus Amount;


          (C)  the Pro-Rated Bonus;

          (D)  the Incentive and Equity Amounts, all of which
               shall be fully accelerated and deemed earned, and
               all applicable performance targets thereunder
               shall be deemed to have been met upon the
               occurrence of a Change of Control;

          (E)  the Supplemental Retirement Benefits, which shall
               be determined based on the granting of service
               credit for a period of three years and, after such
               credit has been granted, shall be computed based
               upon the deemed age of the Executive at the end of
               such three year period, it being understood that
               upon the occurrence of a Change of Control,
               Executive's vested interest in such benefits shall
               accelerate and that for purposes of the
               calculation of Supplemental Retirement Benefits,
               Final Annual Compensation (as defined in the
               underlying plans) shall be equal to Final Annual
               Compensation as of the Date of Termination; and

          (F)  the Accrued Obligations.

     Any Earned Salary, Severance Amount, Accrued Obligations,
     and Pro-Rated Bonus shall be paid in cash, or in the case of
     the Incentive and Equity Amounts, in kind if so provided
     under the relevant plan, in a single lump sum as soon as
     practicable (but in no event more than 20 days) following
     the Date of Termination.  The Supplemental Retirement
     Benefits shall be payable in accordance with the terms of
     the underlying plans (after giving effect to the
     acceleration and granting of service credit provided for
     herein) and the elections of the Executive thereunder.

           (ii   Continuation of Benefits.  If, during the
     Employment Period and after the occurrence of a Change of
     Control, the Company terminates the Executive's employment
     other than for Cause, or the Executive terminates his
     employment for Good Reason:

          (A)  the Executive (and, to the extent applicable, his
               dependents) shall be entitled, after the Date of
               Termination until the earlier of (i) the third
               anniversary of the Date of Termination, or (ii)
               the date on which the Executive is covered under
               any comparable plans of a subsequent employer (the
               "End Date"), to continue participation (including,
               but not limited to, vesting and accruals) in all
               of the Company's employee and executive pension,
               welfare and fringe benefit plans, excluding the
               Supplemental Retirement Benefits (the "Benefit
               Plans").  To the extent any such benefits cannot
               be provided under the terms of the applicable
               plan, policy or program, the Company shall provide
               a comparable benefit under another plan or from
               the Company's general assets.  The Executive's
               participation in the Benefit Plans will be on the
               same terms and conditions that would have applied
               had the Executive continued to be employed by the
               Company through the End Date;

          (B)  the Executive (or, in the event of the Executive's
               death during such period, the Executive's
               beneficiary or estate) shall have the right to
               exercise any outstanding options to purchase
               shares of Common Stock of the Company then
               exercisable by the Executive or which would become
               exercisable in accordance with the Equity
               Documents for the period of time described in
               Section 4(c) after the Date of Termination; and

          (C)  for purposes of the Benefit Plans and the Equity
               Documents, the Executive will be deemed to have
               terminated employment under mutually satisfactory
               conditions.

          (d)  Discharge of the Company's Obligations.  Except as
expressly provided in the last sentence of this Section 6(d), the
amounts payable to the Executive pursuant to this Section 6
following termination of his employment shall be in full and
complete satisfaction of the Executive's rights under this
Agreement and any other claims he may have in respect of his
employment by the Company or any of its Subsidiaries.  Such
amounts shall constitute liquidated damages with respect to any
and all such rights and claims and, upon the Executive's receipt
of such amounts, the Company shall be released and discharged
from any and all liability to the Executive in connection with
this Agreement or otherwise in connection with the Executive's
employment with the Company and its Subsidiaries.  Nothing in
this Section 6(d) shall be construed to release the Company from
its commitment to indemnify the Executive and hold the Executive
harmless from and against any claim, loss or cause of action
arising from or out of the Executive's performance as an officer,
director or employee of the Company or any of its Subsidiaries or
in any other capacity, including any fiduciary capacity, in which
the Executive served at the request of the Company to the maximum
extent permitted by applicable law and the Governing Documents.

          (e)  Certain Further Payments by the Company.

            (i   In the event that any amount or benefit paid
     or distributed to the Executive pursuant to this Agreement,
     taken together with any amounts or benefits otherwise paid
     or distributed to the Executive by the Company or any
     affiliated company (collectively, the "Covered Payments"),
     are or become subject to the tax (the "Excise Tax") imposed
     under Section 4999 of the Code or any similar tax that may
     hereafter be imposed, the Company shall pay to the Executive
     at the time specified in Section 6(e)(v) below an additional
     amount (the "Tax Reimbursement Payment") such that the net
     amount retained by the Executive with respect to such
     Covered Payments, after deduction of any Excise Tax on the
     Covered Payments and any Federal, state and local income,
     employment or other tax and Excise Tax on the Tax
     Reimbursement Payment provided for by this Section 6(e), but
     before deduction for any Federal, state or local income or
     employment tax withholding on such Covered Payments, shall
     be equal to the amount of the Covered Payments.

           (ii   For purposes of determining whether any of the
     Covered Payments will be subject to the Excise Tax and the
     amount of such Excise Tax,

          (A)  such Covered Payments will be treated as
               "parachute payments" within the meaning of Section
               28OG of the Code, and all "parachute payments" in
               excess of the "base amount" (as defined under
               Section 28OG(b)(3) of the Code) shall be treated
               as subject to the Excise Tax, unless, and except
               to the extent that, in the good faith judgment of
               the Company's independent certified public
               accountants appointed prior to the Effective Date
               or tax counsel selected by such Accountants (the
               "Accountants"), the Company has a reasonable basis
               to conclude that such Covered Payments (in whole
               or in part) either do not constitute "parachute
               payments" or represent reasonable compensation for
               personal services actually rendered (within the
               meaning of Section 28OG(b)(4)(B) of the Code) in
               excess of the "base amount," or such "parachute
               payments" are otherwise not subject to such Excise
               Tax, and 

          (B)  the value of any non-cash benefits or any deferred
               payment or benefit shall be determined by the
               Accountants in accordance with the principles of
               Section 28OG of the Code.

          (iii   For purposes of determining the amount of the
     Tax Reimbursement Payment, the Executive shall be deemed to
     pay:

          (A)  Federal income taxes at the highest applicable
               marginal rate of Federal income taxation for the
               calendar year in which the Tax Reimbursement
               Payment is to be made, and

          (B)  any applicable state and local income taxes at the
               highest applicable marginal rate of taxation for
               the calendar year in which the Tax Reimbursement
               Payment is to be made, net of the maximum
               reduction in Federal incomes taxes which could be
               obtained from the deduction of such state or local
               taxes if paid in such year.

           (iv   In the event that the Excise Tax is subsequently
     determined by the Accountants or pursuant to any proceeding
     or negotiations with the Internal Revenue Service to be less
     than the amount taken into account hereunder in calculating
     the Tax Reimbursement Payment made, the Executive shall
     repay to the Company, at the time that the amount of such
     reduction in the Excise Tax is finally determined, the
     portion of such prior Tax Reimbursement Payment that would
     not have been paid if such Excise Tax had been applied in
     initially calculating such Tax Reimbursement Payment, plus
     interest on the amount of such repayment at the rate
     provided in Section 1274(b)(2)(B) of the Code. 
     Notwithstanding the foregoing, in the event any portion of
     the Tax Reimbursement Payment to be refunded to the Company
     has been paid to any Federal, state or local tax authority,
     repayment thereof shall not be required until actual refund
     or credit of such portion has been made to the Executive,
     and interest payable to the Company shall not exceed
     interest received or credited to the Executive by such tax
     authority for the period it held such portion.  The
     Executive and the Company shall mutually agree upon the
     course of action to be pursued (and the method of allocating
     the expenses thereof) if the Executive's good faith claim
     for refund or credit is denied.

          In the event that the Excise Tax is later determined by
     the Accountants or pursuant to any proceeding or
     negotiations with the Internal Revenue Service (the
     "Service") to exceed the amount taken into account hereunder
     at the time the Tax Reimbursement Payment is made
     (including, but not limited to, by reason of any payment the
     existence or amount of which cannot be determined at the
     time of the Tax Reimbursement Payment), the Company shall
     make an additional Tax Reimbursement Payment in respect of
     such excess (plus any interest or penalty payable with
     respect to such excess) at the time that the amount of such
     excess is finally determined, such that the net amount
     retained by the Executive with respect to the Covered
     Payments, after deduction of any Excise Tax on the Covered
     Payments and any Federal, state and local income, employment
     or other tax and Excise Tax on the Tax Reimbursement Payment
     provided for by this Section, but before deduction for any
     Federal, state or local income or employment tax withholding
     on such Covered Payments, shall be equal to the amount of
     the Covered Payments.

     The Company agrees to reimburse the Executive for reasonable
     fees and expenses in connection with any audit or assessment
     by the Service if a claim ("Claim") by the Service arises
     out of, or results from the treatment by the Service of any
     payments made by the Company as parachute payments and for
     the cost of preparing the Executive's income tax returns for
     the year in which any payment by the Company may be
     characterized as a parachute payment.  The Executive shall
     notify the Company in writing of any such Claim as soon as
     practicable but in no event later than ten (10) business
     days after the Executive is informed of such Claim and shall
     cooperate with the Company in good faith to effectively
     contest the Claim.  The Company shall control all
     proceedings taken in connection with such contest and, at
     its sole option, may pursue or forego any and all
     administrative appeals, proceedings, hearings and
     conferences with the taxing authority in respect of such
     Claim and the Executive agrees to prosecute such contest as
     the Company shall determine.  Notwithstanding the foregoing,
     if the Company forgoes further prosecution of such contest,
     the Executive may elect to continue such prosecution;
     provided, however, that in no event shall the Company be
     liable for the fees and expenses in connection with such
     further prosecution. 

            (v   The Tax Reimbursement Payment (or portion
     thereof) provided for in Section 6(e)(i) above shall be paid
     to the Executive not later than 10 business days following
     the payment of the Covered Payments; provided, however, that
     if the amount of such Tax Reimbursement Payment (or portion
     thereof) cannot be finally determined on or before the date
     on which payment is due, the Company shall pay to the
     Executive by such date an amount estimated in good faith by
     the Accountants to be the minimum amount of such Tax Re-
     imbursement Payment and shall pay the remainder of such Tax
     Reimbursement Payment (together with interest at the rate
     provided in Section 1274(b)(2)(B) of the Code) as soon as
     the amount thereof can be determined, but in no event later
     than 45 calendar days after payment of the related Covered
     Payment.  In the event that the amount of the estimated Tax
     Reimbursement Payment exceeds the amount subsequently
     determined to have been due, such excess shall constitute a
     loan by the Company to the Executive, payable on the fifth
     business day after written demand by the Company for payment
     (together with interest at the rate provided in Section 1274
     (b)(2)(B) of the Code).

7.  Definitions.  (a)  Change of Control.  For purposes of this
Agreement, a "Change of Control" shall be deemed to have
occurred:

            (i   when any "person" as defined in Section 3(a)(9)
     of the Securities Exchange Act of 1934, as amended (the
     "Exchange Act") and as used in Section 13(d) and 14(d)
     thereof, including a "group" as defined in Section 13(d) of
     the Exchange Act but excluding the Company and any
     subsidiary and any employee benefit plan sponsored or
     maintained by the Company or any subsidiary (including any
     trustee of such plan acting as trustee), directly or
     indirectly, becomes the "beneficial owner" (as defined in
     Rule 13d-3 under the Exchange Act), of securities of the
     Company representing 20 percent or more of the combined
     voting power of the Company's then outstanding securities;
     or

           (ii   when, during any period of 24 consecutive months
     during the Employment Period, the individuals who, at the
     beginning of such period, constitute the Board (the
     "Incumbent Directors") cease for any reason other than death
     to constitute at least a majority thereof; provided,
     however, that a director who is not a director at the
     beginning of such 24-month period shall be deemed  to have
     satisfied such 24-month requirement (and be an Incumbent
     Director) if such director was elected by, or on the
     recommendation of or with the approval of, at least two-
     thirds of the directors who then qualified as Incumbent
     Directors either actually (because they were directors at
     the beginning of such 24-month period) or by prior operation
     of this Section; or

          (iii)  upon the occurrence of a transaction requiring
     stockholder approval for the acquisition of the Company by
     an entity other than the Company or a subsidiary through
     purchase of assets, or by merger, or otherwise.

For purposes of this Section 7, if any of the above occur with
respect to Electric while the Executive is employed by Electric,
"Company" shall include Electric.

          8.  Non-exclusivity of Rights.  Except as expressly
provided herein, nothing in this Agreement shall prevent or limit
the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by
the Company or any of its affiliated companies and for which the
Executive may qualify, nor shall anything herein limit or
otherwise prejudice such rights as the Executive may have under
any other agreements with the Company or any of its affiliated
companies, including employment agreements or stock option
agreements.  Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan or
program of the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in
accordance with such plan or program.

          9.  Full Settlement.  The Company's obligation to make
the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any
circumstances, including, without limitation, any set-off,
counterclaim, recoupment, defense or other right which the
Company may have against the Executive or others whether by
reason of the subsequent employment of the Executive or otherwise
In the event that the Executive shall in good faith give a Notice
of Termination for Good Reason and it shall thereafter be
determined that Good Reason did not exist, the employment of the
Executive shall, unless the Company and the Executive shall
otherwise mutually agree, be deemed to have terminated, at the
date of giving such purported Notice of Termination, by mutual
consent of the Company and the Executive and, except as provided
in the last preceding sentence, the Executive shall be entitled
to receive only his Earned Salary and the Accrued Obligations.

          10.  Legal Fees and Expenses.  If the Executive asserts
any claim in any contest (whether initiated by the Executive or
by the Company) as to the validity, enforceability or
interpretation of any provision of this Agreement, the Company
shall pay the Executive's legal expenses (or cause such expenses
to be paid) including, without limitation, his reasonable
attorney's fees, on a quarterly basis, upon presentation of proof
of such expenses in a form reasonably acceptable to the Company.

          11.  Confidential Information; Company Property.  By
and in consideration of the salary and benefits to be provided by
the Company hereunder, including the severance arrangements set
forth herein, the Executive agrees that:

          (a)  Confidential Information.  The Executive shall
hold in a fiduciary capacity for the benefit of the Company all
secret or confidential information, knowledge or data relating to
the Company or any of its affiliated companies, and their
respective businesses, (i) obtained by the Executive during his
employment by the Company or any of its affiliated companies and
(ii) not otherwise public knowledge (other than by reason of an
unauthorized act by the Executive).  After termination of the
Executive's employment with the Company, the Executive shall not,
without the prior written consent of the Company, unless
compelled pursuant to an order of a court or other body having
jurisdiction over such matter, communicate or divulge any such
information, knowledge or data to anyone other than the Company
and those designated by it.

          (b)  Injunctive Relief and Other Remedies with Respect
to Covenants.  The Executive acknowledges and agrees that the
covenants and obligations of the Executive with respect to
confidentiality and Company property relate to special, unique
and extraordinary matters and that a violation of any of the
terms of such covenants and obligations will cause the Company
irreparable injury for which adequate remedies are not available
at law.  Therefore, the Executive agrees that the Company shall
(i) be entitled to an injunction, restraining order or such other
equitable relief (without the requirement to post bond)
restraining Executive from committing any violation of the
covenants and obligations contained in this Section 11 and (ii)
have no further obligation to make any payments to the Executive
hereunder following any material violation of the covenants and
obligations contained in this Section 11.  These remedies are
cumulative and are in addition to any other rights and remedies
the Company may have at law or in equity.  In connection with the
foregoing provisions of this Section 11, the Executive represents
that his economic means and circumstances are such that such
provisions will not prevent him from providing for himself and
his family on a basis satisfactory to him.  In no event shall an
asserted violation of the provisions of this Section 11
constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.

          12.  Successors. (a) This Agreement is personal to the
Executive and, without the prior written consent of the Company,
shall not be assignable by the Executive otherwise than by will
or the laws of descent and distribution.  This Agreement shall
inure to the benefit of and be enforceable by the Executive's
legal representatives.

          (b)  This Agreement shall inure to the benefit of and
be binding upon the Company and its successors.  The Company
shall require any successor to all or substantially all of the
business and/or assets of the Company, whether direct or
indirect, by purchase, merger, consolidation, acquisition of
stock, or otherwise, by an agreement in form and substance
satisfactory to the Executive, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent
as the Company would be required to perform if no such succession
had taken place.

          13.  Miscellaneous. (a)  Effect of this Agreement on
Existing Employment Agreements.  Any other agreements between the
Executive and the Company or any of its Subsidiaries relating to
Executive's employment by any such entity shall be automatically
superseded upon the occurrence of the Effective Date, including,
but not limited to, that certain Employment Agreement between the
parties dated as of February 11, 1993.

          (b)  Applicable Law.  This Agreement shall be governed
by and construed in accordance with the laws of the State of New
Jersey, applied without reference to principles of conflict of
laws.

          (c)  Arbitration.  Any dispute or controversy arising
under or in connection with this Agreement shall be resolved by
binding arbitration.  The arbitration shall be held in the city
of Atlantic City, New Jersey or in the City of Philadelphia,
Pennsylvania and except to the extent inconsistent with this
Agreement, shall be conducted in accordance with the Voluntary
Labor Arbitration Rules of the American Arbitration Association
then in effect at the time of the arbitration, and otherwise in
accordance with principles which would be applied by a court of
law or equity.  The arbitrator shall be acceptable to both the
Company and the Executive.  If the parties cannot agree on an
acceptable arbitrator, the dispute shall be heard by a panel of
three arbitrators, one appointed by each of the parties and the
third appointed by the other two arbitrators.

          (d)  Amendments.  This Agreement may not be amended or
modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal
representatives.

          (e)  Entire Agreement.  This Agreement constitutes the
entire agreement between the parties hereto with respect to the
matters referred to herein.  No other agreement relating to the
terms of the Executive's employment by the Company, oral or
otherwise, shall be binding between the parties unless it is in
writing and signed by the party against whom enforcement is
sought.  There are no promises, representations, inducements or
statements between the parties other than those that are
expressly contained herein.  The Executive acknowledges that he
is entering into this Agreement of his own free will and accord,
and with no duress, that he has read this Agreement and that he
understands it and its legal consequences.

          (f)  Notices.  All notices and other communications
hereunder shall be in writing and shall be given by hand-delivery
to the other party or by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:

If to the Executive:          at the home address of the
                              Executive noted on the records of
                              the Company


If to the Company:            Atlantic Energy, Inc.
                              6801 Black Horse Pike
                              Pleasantville, New Jersey  08232
                              Attention: Secretary



with a copy to:               Simpson Thacher & Bartlett
                              425 Lexington Avenue
                              New York, York, NY  10019
                              Attention: Alvin H. Brown, Esq.


or to such other address as either party shall have furnished to
the other in writing in accordance herewith.  Notice and
communications shall be effective when actually received by the
addressee.


          (g)  Tax Withholding.  The Company may withhold from
any amounts payable under this Agreement such Federal, state or
local taxes as shall be required to be withheld pursuant to any
applicable law or regulation.


          (h)  Severability; Reformation.  In the event that one
or more of the provisions of this Agreement shall become invalid,
illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein
shall not be affected thereby.  In the event that any of the
provisions of any of Section 11(a) are not enforceable in
accordance with its terms, the Executive and the Company agree
that such Section shall be reformed to make such Section
enforceable in a manner which provides the Company the maximum
rights permitted at law.


          (i)  Waiver.  Waiver by any party hereto of any breach
or default by the other party of any of the terms of this
Agreement shall not operate as a waiver of any other breach or
default, whether similar to or different from the breach or
default waived.  No waiver of any provision of this Agreement
shall be implied from any course of dealing between the parties
hereto or from any failure by either party hereto to assert its
or his rights hereunder on any occasion or series of occasions.


          (j)  Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.


          (k)  Captions.  The captions of this Agreement are not
part of the provisions hereof and shall have no force or effect.


          IN WITNESS WHEREOF, the Executive has hereunto set his
hand and the Company has caused this Agreement to be executed in
its name on its behalf, and its corporate seal to be hereunto
affixed and attested by its Secretary, all as of the day and year
first above written.

ATTEST:                          Atlantic Energy, Inc.



                                 By:/S/ J. Michael Galvin, Jr.    
        
     Secretary                           J. Michael Galvin, Jr.
       (Seal)                    Title:  Chairman, Personnel & 
                                         Benefits Committee


                                 EXECUTIVE:


                                                                  
        
                                   J. L. Jacobs

<PAGE>
                                 EXHIBIT A
                             CONSULTING TERMS

          (i)  Executive shall serve as a consultant to the
          Company on an exclusive basis and shall furnish
          advisory and consultative services to the Company, its
          divisions and subsidiaries including advice and
          assistance in connection not only with matters then
          current, but also matters in which Executive
          participated during and subsequent to the Employment
          Period in accordance with the instructions of the
          Board;

          (ii)  Executive shall be entitled to prompt
          reimbursement as vouchers are presented in accordance
          with the Company's practices for all reasonable
          business expenses incurred by him in the performance of
          services during the Consulting Period;

          (iii)   The Company shall pay Executive $130,000 annual
          consulting fee payable annually at the end of each
          fiscal year;

          (iv)  In the event of the occurrence of a Change of
          Control, the Executive shall be paid in a lump sum as
          soon as practicable thereafter (but in no event more
          than 20 days thereafter) an amount equal to his
          consulting fee for the balance of the Consulting
          Period;

          (v)  In the event that the Executive dies prior to the
          end of the Consulting Period, the Company shall pay the
          Executive's legal representatives under this Agreement
          in a lump sum as soon as practicable thereafter (but in
          no event more than 20 days thereafter) an amount equal
          to the Executive's consulting fee for the balance of
          the Consulting Period;

          (vi)    During the Consulting Period, Executive shall
          be treated by the Company as an independent contractor
          for all purposes, and is therefore not entitled to
          participate in the Company's employee benefit plans,
          programs or arrangements, (except to the extent such
          participation is attributable to service rendered prior
          to or during the Employment Period).
<PAGE>
                    SUPPLEMENT TO EMPLOYMENT AGREEMENT
                                  BETWEEN
                ATLANTIC ENERGY, INC. and JERROLD L. JACOBS
                           Dated August 10, 1995


     THIS AGREEMENT SUPPLEMENT is entered into this 10th day of
August, 1995 by and between ATLANTIC ENERGY, INC., a New Jersey
corporation (the "Company") and JERROLD L. JACOBS (the
"Executive") and is a supplement to that Employment Agreement
dated the same date hereof (the "Employment Agreement").
     In consideration of the mutual promises and covenants herein
contained and as contained in the Employment Agreement, the
adequacy and sufficiency of which is deemed by the parties to be
fair and reasonable and to constitute due consideration, the
Company and the Executive hereby agree as follows:
     1.   Capitalized Terms.  Capitalized terms, when used
herein, shall have the same meaning as in the Employment
Agreement.
     2.   Agreement Not To Compete.  The Executive hereby
represents, covenants and warrants to the Company that, for a
period of one (1) year following the Date of Termination
Executive shall not undertake any activity, employment, task or
assignment, whether through ownership, employment, consulting
arrangement or otherwise, with any person or entity engaged in
any business activity in competition with the Company or any of
its subsidiaries or affiliates.  This covenant not to compete is
limited to the geographic area which, as of the date of this
Agreement Supplement, comprises the Pennsylvania-New Jersey-
Maryland Interconnection area and is also intended to include the
southeastern portion of the State of New York which lies south of
the northern most boundary line of the Commonwealth of
Pennsylvania.
          It is the intent of this covenant not to compete that
the Executive will not, during the one year period following Date
of Termination and within the geographical limits hereinabove
described, directly or indirectly engage, participate or make any
financial investments in, or become employed by or render
(whether or not for compensation) any consulting, advisory or
other services to or for the benefit of any person, firm or
corporation, or otherwise engage in any business activity which
directly or indirectly competes with any of the business
operations or activities in which the Company or any of its
subsidiaries or affiliates is engaged as of the Date of
Termination, nor any business in which the Company or any of its
subsidiaries or affiliates is actively engaged in pursuing or
developing as of the Date of Termination.
          Nothing contained herein is intended to restrict the
Executive from making any investments in any corporation,
partnership or other business enterprise whose outstanding
capital stock or other equity interests are listed or admitted to
unlisted trading privileges on a national securities exchange or
included for quotation through an inter-dealer quotation system
of a registered national securities association, provided that
such investment (i) represents less than five percent (5%) of the
aggregate outstanding capital stock or other equity interests of
such corporation, partnership or business enterprise and (ii)
does not otherwise provide Executive or any affiliate of
Executive with the right or power (whether or not exercised) to
influence, direct or cause the direction of the management
policies and/or affairs of any such business or enterprise which
is or might directly or indirectly compete with any business,
operations or activities of the Company or any of its
subsidiaries and affiliates.

     IN WITNESS WHEREOF, intending to be legally bound the
Executive has hereunto set his hand and the Company has caused
this Agreement to be executed in its name on its behalf, and its
corporate seal to be hereunto affixed and attested by its
Secretary, all as of the day and year first above written.

ATTEST:                       ATLANTIC ENERGY, INC.
(Seal)

____________________________       
BY:______________________________
                                   J. Michael Galvin, Jr.
                              Chairman, Personnel & Benefits
Committee

                              BY:  /s/ J. L. Jacobs
                                       J. L. Jacobs
                              President & Chief Executive Officer

                              EXECUTIVE:

                              /s/ J. L. Jacobs
                                  J. L. Jacobs