Exhibit (10)(iii)39

CENTRAL HUDSON GAS & ELECTRIC CORPORATION
RETIREMENT BENEFIT RESTORATION PLAN
AMENDED AND RESTATED AS OF JANUARY 1, 2008

Introduction & History

          Effective May 1, 1993, Central Hudson Gas & Electric Corporation
(“Central Hudson”) originally established the Central Hudson Gas & Electric
Corporation Retirement Benefit Restoration Plan (the “Plan”), which was
established to provide excess retirement benefits for eligible executives, and
subsequently amended and restated the Plan effective January 1, 2000. Effective
as of December 31, 2005, all benefit accruals under the Plan were frozen with
respect to vested Participants and the Plan was terminated with respect all
non-vested Participants.

          Central Hudson hereby amends and restates the Plan, effective January
1, 2008, to incorporate changes required by Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”), in the manner provided hereunder. In
order to comply with section 409A of the Code, effective immediately before
January 1, 2008, the Plan is divided into two parts, one of which shall be named
“Part One” and the other of which shall be named “Part Two”. Part One of the
Plan shall be governed by the terms and conditions of the Plan as in effect on
October 3, 2004, as amended effective December 31, 2005, and shall apply to
“Grandfathered Participants” under Section 4.06. Part Two of the Plan shall be
governed by the terms and conditions of the Plan as set forth herein, and as it
may be amended from time to time hereafter, and shall apply to the individuals,
other than Grandfathered Participants, who participated in the Plan on or after
January 1, 2005 as listed on Exhibit A (the “Covered Participants”). Part Two of
the Plan is intended to comply with Section 409A of the Code.

Article I. Definitions

          1.01          “Act” shall mean the Employee Retirement Income Security
Act of 1974 (“ERISA”), as from time to time amended.

          1.02           “Affiliate” means each entity with whom Central Hudson
would be considered a single employer under Sections 414(b) and 414(c) of the
Code, provided that in applying Section 1563(a)(1), (2), and (3) for purposes of
determining a controlled group of corporations under Section 414(b) of the Code,
the language “at least 50 percent” is used instead of “at least 80 percent” each
place it appears in Section 1563(a)(1), (2), and (3), and in applying Treasury
Regulation Section 1.414(c)-2 for purposes of determining trades or businesses
(whether or not incorporated) that are under common control for purposes of
Section 414(c), “at least 50 percent” is used instead of “at least 80 percent”
each place it appears in that regulation. Such term shall be interpreted in a
manner consistent with the definition of “service recipient” contained in
Section 409A of the Code.

          1.03           “Affiliated Group” means (i) Central Hudson and (ii)
all Affiliates.

          1.04           “Code” shall mean the Internal Revenue Code of 1986, as
amended from time to time.

          1.05           “Central Hudson” shall mean Central Hudson Gas &
Electric Corporation.

          1.06           “Effective Date” shall mean May 1, 1993.

--------------------------------------------------------------------------------

          1.07           “Employment Agreement” shall mean a Change of Control
Employment Agreement between a Participant and Energy Group.

          1.08           “Energy Group” shall mean CH Energy Group, Inc., the
parent corporation of Central Hudson.

          1.09           “Maximum Benefit” shall mean the benefit or benefits to
be paid to a Participant under the Pension Plan which corresponds to his
Unrestricted Benefit.

          1.10           “Participant” shall mean those individuals listed on
Exhibit A.

          1.11           “Pension Plan” shall mean the Retirement Income Plan of
Central Hudson Gas & Electric Corporation, as from time to time amended.

          1.12           “Plan” shall mean Central Hudson Retirement Benefit
Restoration Plan, as from time to time amended, which shall be an unfunded and
uninsured pension benefit plan for a select group of highly compensated
management employees of Central Hudson and/or Energy Group.

          1.13           “SERP” shall mean the CH Energy Group, Inc.
Supplemental Executive Retirement Plan.

          1.14           “Termination of Employment” means, subject to Section
4.05(b), the termination of an Employee’s employment with the Affiliated Group
as a result of his voluntary termination, retirement, discharge, death or his
becoming eligible to receive disability benefits under Central Hudson’s or an
Affiliate’s long-term disability plan.

          1.15           “Unrestricted Benefit” shall mean whichever of the
following is applicable: (i) the monthly retirement income benefit under the
Pension Plan (“Retirement Income Benefit”) and (ii) if applicable, the benefit
under the Cash Balance Account (“Cash Balance Benefit”) of the Pension Plan, all
determined under the Pension Plan without regard to the limitations imposed by
Code Sections 401(a)(17) and 415.

Article II. Benefits

          2.01           Benefit, Commencement. Upon a Participant’s Termination
of Employment, such Participant shall be entitled to (i) a Retirement Income
Benefit equal to his or her Unrestricted Benefit less the Maximum Benefit (as
determined under Section 3.09), in the amount thereof payable as of the first
day of the first month following the later of his or her 55th birthday or
Termination of Employment and (ii) if applicable, a Cash Balance Benefit equal
to his or her Unrestricted Benefit less the Maximum Benefit (as determined under
Section 3.09), in the amount thereof payable as of the date of the commencement
of his or her Benefit hereunder. A Participant’s Retirement Income Benefit shall
commence, and his or her Cash Balance Benefit shall be paid, to him or her as of
the first day of the first month following the later of (i) his 55th birthday or
(ii) the six-month anniversary of his or her Termination of Employment; with
actual payment(s) commencing or paid within 90 days thereof. If payments of his
or her Retirement Income Benefit commences as a result of the foregoing clause
(ii), the first payment thereof shall include any monthly payments (without
interest) that would have been made had the Retirement Income Benefit commenced
on the first day of the month following his or her Termination of Employment.

          2.02           Spouse’s Pension Benefit. Subject to Section 2.03
below, upon the death of a Participant whose spouse is eligible for an annuity
under the Pension Plan, the Participant’s surviving spouse shall be entitled to
(i) a monthly benefit equal to the surviving spouse benefit annually determined
in accordance

2

--------------------------------------------------------------------------------

with the provisions of the Pension Plan without regard to any limitations
imposed by the Code Sections 401(a)(17) and 415, less the related Maximum
Benefit to which such spouse is entitled and (ii) if applicable, a Cash Balance
Benefit determined in accordance with the provisions of the Pension Plan without
regard to any limitations imposed by Code Sections 401(a)(17) and 415, less the
related Maximum Benefit to which such spouse is entitled and less any amount of
the Cash Balance Benefit previously paid to the Participant. Payments shall
commence under this Section 2.02 as soon as administratively practicable on the
first day of the first month coincident with or after the date the Participant
would have been able to receive his benefit under Section 2.01 assuming the
Participant’s Termination of Employment occurred as of the date of his death,
with actual payment(s) commencing or paid within 90 days thereof.

          2.03           Forms of Benefit Payment. A Participant’s Cash Balance
Benefit shall be paid in the form of a lump sum. A Participant’s Retirement
Income Benefit shall be paid in the annuity forms available under the SERP and
the amount thereof shall be the actuarial equivalent of the Retirement Income
Benefit under Section 2.01 payable in a single life annuity, using the actuarial
assumptions provided under Section 9.7 of the SERP. However, if the Participant
is a participant in the SERP, his Retirement Income Benefit shall be paid in the
same annuity form of payment as he elects the payment of his retirement benefit
under the SERP and the amount thereof shall be the actuarial equivalent of the
Retirement Income Benefit under Section 2.01 payable in a single life annuity,
using the actuarial assumptions provided under Section 9.7 of the SERP.

          2.04           Reemployment. If a Participant is receiving annuity
payments under this Article and he is subsequently reemployed by the Affiliated
Group, the annuity payments shall continue to be paid at the same time and form
as in effect before his reemployment.

Article III. Administration of the Plan

          3.01           Administrator. The Plan shall be administered by the
Board of Directors of Central Hudson (or its designee), which shall have the
authority to interpret the Plan and issue such proceedings as it deems
appropriate. The Administrator shall have the duty and responsibility of
maintaining records, making the requisite calculations and disbursing the
payments hereunder. The Administrator’s interpretations, determinations,
regulations and calculations shall be final and binding on all persons and
parties concerned.

          3.02           Amendment and Termination. The Administrator may amend
or terminate the Plan at any time, provided, however, that no such amendment or
termination shall deprive any Participant or beneficiary of the benefits to
which such Participant is entitled, under Section 2.01 hereof, as of the date of
such amendment or termination unless the Participant or beneficiary becomes
entitled to an amount equal to such benefit under another plan or practice
adopted by Central Hudson. Notwithstanding the foregoing, for three years
following a “Change in Control” (as defined in the SERP), (i) the Plan may not
be amended in any manner adverse to any individual who is a Participant in the
Plan immediately before the Change-of-Control (a “Protected Participant”), or a
beneficiary of a Protected Participant and (ii) the Plan may not be terminated
with respect to Protected Participants and their beneficiaries.

          3.03           Payments. Central Hudson will pay all benefits arising
under this Plan and all costs, charges and expenses relating thereto.

          3.04           Non-Assignability of Benefits. Except as otherwise
permitted or required by law, the benefits payable hereunder or the right to
receive future benefits under the Plan may not be anticipated, alienated,
pledged, encumbered, or subjected to any charge or legal process, and if any
attempt is made to do so, or a person eligible for any benefits becomes
bankrupt, the interest under the Plan of the person

3

--------------------------------------------------------------------------------

affected may be terminated by the Administrator which, in its sole discretion,
may cause the same to be held or applied for the benefit of one or more of the
dependents of such person or make any other disposition of such benefits that it
deems appropriate.

          3.05           Status of Plan. The benefits under this Plan shall not
be funded, but shall constitute liabilities of Central Hudson payable when due.

          3.06           Nonguarantee of Employment. Nothing contained in this
Plan shall be construed as a contract of employment between Central Hudson and
any Participant, or as a right of any Participant to be continued in employment
of Central Hudson, or as a limitation on the right of Central Hudson to
discharge any of its employees, with or without cause.

          3.07           Applicable Law. All questions pertaining to the
construction, validity and effect of the Plan shall be determined in accordance
with the laws of the United States and to the extent not pre-empted by such
laws, by the laws of the State of New York.

          3.08           Inclusion of Energy Group Participants. This Plan shall
only apply to Energy Group Participants if Energy Group’s Board of Directors
adopts this Plan.

          3.09           Accrual of Benefits and Participation after December
31, 2005. Effective as of December 31, 2005, the Plan is terminated with no
future Benefit payable with respect to any Participant who, as of December 31,
2005, is not vested in a Benefit under Article II of the Plan (as determined
under the Pension Plan) and no employee of Energy Group or Central Hudson may
become a Participant in the Plan on or after December 31, 2005. A Participant
who, as of December 31, 2005, has a vested benefit under Article II will not
accrue any additional Benefit under the Plan after December 31, 2005 and his
Benefit under the Plan will be determined as of December 31, 2005, based on the
Participant’s Unrestricted Benefit and Maximum Benefit as of December 31, 2005.

          3.10           Pre-2008 Payments. If a Participant commences payment
of benefits in conjunction with his benefit under the Pension Plan prior to
January 1, 2008, then such benefit shall be payable for the remainder of 2007
and subsequent calendar years at the same time and in the same form elected by
the Participant under the Pension Plan. Such time and form of payment shall not
be subject to change after January 1, 2008 and shall not be affected by any
changes in the time or form of payment of the benefit under the Pension Plan
that occur on or after January 1, 2008.

Article IV. Section 409A Provisions

          4.01           Discretionary Acceleration of Payments. Subject to
Sections 3.02 and 4.05(a), to the extent permitted by Section 409A of the Code,
the Plan Administrator may, in its sole discretion, accelerate the time or
schedule of a payment under the Plan. The provision is intended to comply with
the exception to accelerated payments under Treasury Regulation Section
1.409A-3(j) and shall be interpreted and administered accordingly.

          4.02           Delay of Payments. To the extent permitted under
Section 409A of the Code, the Plan Administrator may, in its sole discretion,
delay payment under any of the following circumstances, provided that the Plan
Administrator treats all payments to similarly situated Participants on a
reasonably consistent basis:

                            (a)          A Payment may be delayed where the Plan
Administrator reasonably anticipates that the making of the payment will violate
federal securities laws or other applicable law; provided that the delayed
payment is made at the earliest date at which the Plan Administrator reasonably
anticipates

4

--------------------------------------------------------------------------------

that the making of the payment will not cause such violation. For purposes of
the preceding sentence, the making of a payment that would cause inclusion in
gross income or the application of any penalty provision or other provision of
the Code is not treated as a violation of applicable law.

                            (b)           A payment may be delayed upon such
other events and conditions as the Internal Revenue Service may prescribe in
generally applicable guidance published in the Internal Revenue Bulletin. To the
extent permitted under Section 409A of the Code, the Plan Administrator may, in
its sole discretion, delay payment under any of the following circumstances,
provided that the Plan Administrator treats all payments to similarly situated
Participants on a reasonably consistent basis:

          4.03           Actual Date of Payment. To the extent permitted by
Section 409A of the Code, the Plan Administrator may delay payment in the event
that it is not administratively possible to make payment on the date (or within
the periods) specified in the Plan, or the making of the payment would
jeopardize the ability of Central Hudson (or any entity which would be
considered to be a single employer with Central Hudson under Section 414(b) or
Section 414(c) of the Code) to continue as a going concern. Notwithstanding the
foregoing, payment must be made no later than the latest possible date permitted
under Section 409A of the Code.

          4.04           Discharge of Obligations. The payment to a Participant
or his beneficiary of his entire benefit under the Plan shall discharge all
obligations of the Affiliated Group to such Participant or beneficiary under the
Plan with respect to that Plan benefit.

          4.05           Compliance with Section 409A of the Code.

                           (a)          Notwithstanding anything contained in
the Plan to the contrary, if the Participant is a “specified employee,” as
determined under Central Hudson’s policy for identifying specified employees on
the date of his “separation from service” within the meaning of Section 409A of
the Code, then to the extent required in order to comply with Section 409A of
the Code, all amounts payable under the Plan that constitute a “deferral of
compensation” within the meaning of Section 409A of the Code, that are provided
as a result of a “separation from service” within the meaning of Section 409A of
the Code and that would otherwise be paid during the first six months following
such separation from service shall be accumulated through and paid or provided
on the first day of the seventh month immediately following the month of such
separation from service (or, if the Participant dies during such six-month
period, within 30 days after the Participant’s death).

                           (b)           Notwithstanding anything contained in
the Plan to the contrary, the term “Termination of Employment” or words or
phrases of similar import shall mean a “separation from service” as defined in
Section 409A of the Code and the effective date of a Participant’s “separation
from service” as defined in Section 409A of the Code shall constitute a
“Termination of Employment”. Central Hudson and the Participant shall take all
steps necessary to ensure that a Termination of Employment shall constitute a
“separation from service” within the meaning of Section 409A of the Code, and
any benefit payable as a result of a Participant’s Termination of Employment
shall be paid or provided, if and only if, such Termination of Employment
constitutes a “separation from service” within the meaning of Section 409A of
the Code. Upon a sale or other disposition of the assets of Central Hudson or
any Affiliate to an unrelated purchaser, Central Hudson reserves the right, to
the extent permitted by Section 409A of the Code, to determine whether
Participants providing services to the purchaser after and in connection with
the purchase transaction have experienced a “separation from service” as defined
in Section 409A of the Code.

                           (c)          It is intended that the payments and
benefits provided under the Plan shall comply with the requirements of Section
409A of the Code. The Plan shall be construed, administered,

5

--------------------------------------------------------------------------------

and governed in a manner that effects such intent, and Central Hudson shall not
take any action that would be inconsistent with such intent. Without limiting
the foregoing, the payments and benefits provided under the Plan may not be
deferred, accelerated, extended, paid out or modified in a manner that would
result in the imposition of an additional tax under Section 409A of the Code
upon the Participant. Although Central Hudson shall use its best efforts to
avoid the imposition of taxation, interest and penalties under Section 409A of
the Code, the tax treatment of the benefits provided under the Plan is not
warranted or guaranteed. Neither Central Hudson, its affiliates, directors,
officers, employees nor its advisers shall be held liable for any taxes,
interest, penalties or other monetary amounts owed by the Participant or other
taxpayer as a result of the Plan. Any reference in the Plan to Section 409A of
the Code will also include any proposed, temporary or final regulations, or any
other guidance, promulgated with respect to such Section 409A by the U.S.
Department of Treasury or the Internal Revenue Service.

          4.06           Grandfathered Participants. The individuals who were
participants of the Plan, vested, and terminated employment as of December 31,
2004 (the “Grandfathered Participants”) and, therefore, whose entire benefit
under Article V of Part One of the Plan qualifies as an “amount deferred” prior
to January 1, 2005 within the meaning of Section 409A of the Code, shall
participate in, and be governed by the terms and conditions of, Part One of the
Plan. It is intended that such amounts shall be exempt from the application of
Section 409A of the Code. Nothing contained herein is intended to materially
enhance a benefit or right existing under Part One of the Plan or add a new
material benefit or right to Part One of the Plan with respect to Grandfathered
Participants.

          IN WITNESS WHEREOF, Central Hudson Gas & Electric Corporation has
caused this instrument to be executed by its duly authorized officer on this ___
day of December, 2007.

 

 

 

 

 

CENTRAL HUDSON GAS & ELECTRIC CORPORATION

 

 

 

 

By:

/s/ Steven V. Lant

 

 

--------------------------------------------------------------------------------

 

 

 

Steven V. Lant, Chairman, Chief Executive Officer of
Central Hudson Gas & Electric Corporation

6

--------------------------------------------------------------------------------

CENTRAL HUDSON GAS & ELECTRIC CORPORATION
RETIREMENT BENEFIT RESTORATION PLAN
AMENDED AND RESTATED AS OF JANUARY 1, 2008

Exhibit A—Covered Participants

Steven V. Lant

Carl E. Meyer

Joseph J. DeVirgilio, Jr

Charles A. Freni

Thomas C. Brocks

Donna S. Doyle

Michael L. Mosher

Stacey A. Renner

Denise D. VanBuren

7

--------------------------------------------------------------------------------