Exhibit (10)(iii)31

CH ENERGY GROUP, INC.
DIRECTORS AND EXECUTIVES DEFERRED COMPENSATION PLAN

          The Company adopted the CH Energy Group, Inc. Directors and Executives
Deferred Compensation Plan (the “Plan”), effective September 26, 2003. The Plan
is hereby amended and restated, as set forth below, to comply with the
restrictions imposed by Section 409A of the Code.

          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. Part Two of the Plan shall be governed by
the terms and conditions set forth herein. Any “amounts deferred” in taxable
years beginning before January 1, 2005 (within the meaning of Section 409A of
the Code) and any earnings thereon shall be governed by the terms of Part One of
the Plan, and it is intended that such amounts and the earnings thereon shall be
exempt from the application of Section 409A of the Code. Any “amount deferred”
in taxable years beginning on or after January 1, 2005 (within the meaning of
Section 409A of the Code) and any earnings thereon shall be governed by the
terms and conditions of Part Two of the Plan, and it is intended that such
amounts and the earnings thereon shall be subject to and comply with the payment
restrictions imposed under Section 409A of the Code.

ARTICLE I
DEFINITIONS

          For purposes of the Plan, the following words and phrases shall have
the meanings set forth below, unless their context clearly requires a different
meaning:

          “Account” means the bookkeeping account maintained by the Committee on
behalf of each Participant pursuant to this Plan. The sum of each Participant’s
Sub-Accounts, in the aggregate, shall constitute his Account. The Account and
each and every Sub-Account shall be a bookkeeping entry only and shall be used
solely as a device to measure and determine the amounts, if any, to be paid to a
Participant or his Beneficiary under the Plan.

          “Affiliated Group” means (i) the Company, and (ii) all entities with
whom the Company 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.

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          “Annual Valuation Date” has the meaning given to such term in Section
4.2(a).

          “Base Salary” means the annual base rate of cash compensation payable
by the Affiliated Group to an Eligible Employee during a calendar year,
excluding Incentive Compensation, bonuses, special/overtime pay bonuses,
commissions, severance payments, Company Contributions, qualified plan
contributions or benefits, expense reimbursements, fringe benefits and all other
payments, and prior to reduction for any deferrals under this Plan or any other
plan of the Affiliated Groups under Sections 125 or 401(k) of the Code. For
purposes of this Plan, Base Salary payable after the last day of a calendar year
solely for services performed during the final payroll period described in
Section 3401(b) of the Code containing December 31 of such year shall be treated
as earned during the subsequent calendar year.

          “Beneficiary” or “Beneficiaries” means the person or persons,
including one or more trusts, designated by a Participant in accordance with the
Plan to receive payment of the remaining balance of the Participant’s Account in
the event of the death of the Participant prior to the Participant’s receipt of
the entire vested amount credited to his Account.

          “Beneficiary Designation Form” means the form established from time to
time by the Committee (in a paper or electronic format) that a Participant
completes, signs and returns to the Committee to designate one or more
Beneficiaries.

          “Board” means the Board of Directors of the Company.

          “Change in Control” means the occurrence of a “change in the
ownership,” a “change in the effective control” or a “change in the ownership of
a substantial portion of the assets” of the Company as defined under Section
409A of the Code.

          “Change in Control Termination” means a Separation from Service with
the Affiliated Group due to Retirement or Disability during the twenty-four
month period that begins on the date of a Change in Control and ends on the
second anniversary of such Change in Control.

          “Code” means the Internal Revenue Code of 1986, as amended.

          “Commencement Date” has the meaning given to such term in Section 2.3
hereof.

          “Committee” means the committee appointed to administer the Plan.
Unless and until otherwise specified, the Committee under the Plan shall be the
Compensation Committee, or its designee.

          “Company” means CH Energy Group, Inc. and its successors, including,
without limitation, the surviving corporation resulting from any merger or
consolidation of CH Energy Group, Inc. with any other corporation, limited
liability company, joint venture, partnership or other entity or entities.

          “Company Contribution Commencement Date” has the meaning given to such
term in Section 2.3 hereof.

          “Company Contribution” has the meaning given to such term in Section
4.1 hereof.

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          “Company Contribution Sub-Account” means the bookkeeping Company
Contribution Sub-Account maintained by the Committee on behalf of each
Participant pursuant to Section 2.4 hereof.

          “Deferral Commencement Date” has the meaning given to such term in
Section 2.3.

          “Deferral Election” means the Participant’s election on a form
approved by the Committee to defer a portion of his Base Salary, Incentive
Compensation or Director Fees in accordance with the provisions of Article III.

          “Director” means any individual who is a member of the Board and who
is not an employee of the Company or its Affiliated Group.

          “Director Fees” means the annual cash retainer for Board and committee
service, special assignment fees, meeting fees, committee chair or lead director
fees, and other cash amounts payable to a Participant for service to the Company
as a Director.

          “Director Stock Contribution” has the meaning given to such term in
Section 4.2 hereof.

          “Director Stock Sub-Account” means the bookkeeping Director Stock
Sub-Account maintained by the Committee on behalf of each Director pursuant to
Section 4.2 hereof.

          “Disability” means that the Participant meets one of the following
requirements: (a) the Participant is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months; or (b) the Participant is, by
reason of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period
of not less than three months under an accident and health plan covering
employees of the Participant’s employer. Such term shall be interpreted in a
manner consistent with the definition of “disability” contained in Treasury
Regulation Section 1.409A-3(i)(4).

          “Effective Date” has the meaning given to such term in Section 10.1
hereof.

          “Eligible Employee” has the meaning given to such term in Section 2.1
hereof.

          “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.

          “Incentive Compensation” means cash or equity compensation payable
pursuant to an incentive compensation or retention plan in which an Eligible
Employee participates, including but not limited to an annual or long-term
incentive compensation plan, whether such plan is now in effect or hereafter
established by the Affiliated Group, which the Committee may designate from time
to time.

          “Installment Calculation Date” has the meaning given to such term in
Section 6.1(d).

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          “In-Service Sub-Account” means each bookkeeping In-Service Sub-Account
maintained by the Committee on behalf of each Eligible Employee pursuant to
Section 2.4 hereof.

          “Newly Eligible Participant” means any Eligible Employee or Director
who has not previously participated in the Plan or an “aggregated plan” and is
not currently a participant of an “aggregated plan”. For purposes of this
definition, an “aggregated plan” is any plan that is required to be aggregated
with the Plan under Section 409A of the Code. For purposes of clarity, the
portion of the Plan consisting of the right to defer Base Salary, Incentive
Compensation and Director Fees shall be treated as separate and apart from, and
shall not aggregated with, the portion of the Plan consisting of the right to
receive credits of Company Contributions.

          “Participant” means any Eligible Employee or Director who (i) at any
time elected to defer the receipt of Base Salary, Incentive Compensation or
Director Fees in accordance with the Plan (including an amount treated as a
Transferred Amount) or received a credit to his Account pursuant to Section 4.1
or Section 4.2 hereof (including an amount treated as a Transferred Amount) and
(ii) in conjunction with his Beneficiary, has not received a complete payment of
the vested amount credited to his Account.

          “Part One” has the meaning given to such term in Section 10.1 hereof.

          “Part Two” has the meaning given to such term in Section 10.1 hereof.

          “Payment Election” means the Participant’s election on a form approved
by the Committee that sets forth the form of payment of the Company Contribution
Sub-Account and the Director Stock Sub-Account as provided in Section 4.3.

          “Performance-Based Compensation” means Incentive Compensation that is
based on services performed over a period of at least twelve (12) months and
that constitutes “performance-based compensation” within the meaning of Section
409A of the Code. Where a portion of an amount of Incentive Compensation would
qualify as Performance-Based Compensation if the portion were the sole amount
available under a designated incentive plan, that portion of the award will not
fail to qualify as Performance-Based Compensation if that portion is designated
separately by the Committee on the Deferral Election or is otherwise separately
identifiable under the terms of the designated incentive plan, and the amount of
each portion is determined independently of the other.

          “Performance Period” means, with respect to any Incentive
Compensation, the period of time during which such Incentive Compensation is
earned.

          “Phantom Share” means a hypothetical share of CH Energy Group, Inc.
common stock. A Participant shall not possess any incidents of ownership
(including, without limitation, dividend and voting rights) in any shares of CH
Energy Group, Inc. common stock represented by the Phantom Shares.

          “Phantom Share Fund” shall mean a fund consisting solely of Phantom
Shares. At the end of each calendar quarter, the number of Phantom Shares deemed
to be held by a Participant’s Account shall be increased by any dividends paid
on shares of CH Energy Group, Inc. common stock for that calendar quarter. The
number of additional Phantom Shares credited to a

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Participant’s Account as a result of such increase shall be determined by (i)
multiplying the total number of Phantom Shares (excluding fractional Phantom
Shares) credited to the Participant’s Account as of the end of that calendar
quarter by the amount of the dividend paid with respect to a share of CH Energy
Group, Inc. common stock during that calendar quarter, and (ii) dividing the
product so determined by the closing price of a share of CH Energy Group, Inc.
common stock on the New York Stock Exchange on the last business day of the
calendar quarter. In the event of any merger, reorganization consolidation,
recapitalization, liquidation, stock dividend, split-up, spin-off, stock split,
reverse stock split, share combination, share exchange, extraordinary dividend,
or any change in the corporate structure affecting the CH Energy Group, Inc.
common stock, the number of Phantom Shares credited to the Phantom Share Fund
and/or the kind or class of shares in that fund shall be adjusted in such manner
as may be determined to be appropriate and equitable by the Board, in its sole
discretion, to prevent dilution or enlargement of benefits or potential benefits
intended to be made available under the Plan.

          “Plan” means this deferred compensation plan, which shall be known as
the CH Energy Group, Inc. Directors and Executives Deferred Compensation Plan.

          “Retirement” means with respect to an Eligible Employee, his
Separation from Service on or after the date he attains age 55 and with respect
to a Director, his Separation from Service.

          “Retirement Sub-Account” means the bookkeeping Retirement Sub-Account
maintained by the Committee on behalf of each Participant pursuant to Section
2.4 hereof.

          “Separation from Service” means a termination of employment or service
with the Affiliated Group in such a manner as to constitute a “separation from
service” as defined under Section 409A of the Code. Upon a sale or other
disposition of the assets of the Company or any member of the Affiliated Group
to an unrelated purchaser, the Committee 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.

          “Specified Employee” means a “specified employee”, as defined in
Section 409A of the Code (with such classification to be determined in
accordance with the methodology established by the Committee from time to time
in its sole discretion) of the Company or any entity which would be considered
to be a single employer with the Company under Section 414(b) or Section 414(c)
of the Code.

          “Sub-Account” means each bookkeeping In-Service Sub-Account,
Retirement Sub-Account, Company Contribution Sub-Account and Director Stock
Sub-Account maintained by the Committee on behalf of each Participant pursuant
to the Plan.

          “Subsequent Payment Election” has the meaning given to such term in
Section 6.1(c) hereof.

          “Transferred Amounts” shall have the meaning provided in Section
10.1(b).

          “Unforeseeable Emergency” means an “unforeseeable emergency” as
defined under Section 409A of the Code.

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ARTICLE II
ELIGIBILITY; SUB-ACCOUNTS

          2.1.          Selection by Committee. Participation in the Plan is
limited to (a) those employees of the Affiliated Group who are (i) expressly
selected by the Committee, in its sole discretion, to participate in the Plan,
and (ii) a member of a “select group of management or highly compensated
employees,” within the meaning of Sections 201, 301 and 401 of ERISA (the
“Eligible Employees”), and (b) Directors. In lieu of expressly selecting
Eligible Employees for Plan participation, the Committee may establish
eligibility criteria (consistent with the requirements of paragraph (a)(ii) of
this Section) providing for participation of all Eligible Employees who satisfy
such criteria. The Committee may at any time, in its sole discretion, change the
eligibility criteria for Eligible Employees, or determine that one or more
Participants will cease to be an Eligible Employee.

          2.2.          Enrollment Requirements. As a condition to
participation, each selected Eligible Employee and each Director shall complete,
execute and return to the Committee a Deferral Election, Payment Election (if
applicable) and Beneficiary Designation Form no later than the date or dates
specified by the Committee. In addition, the Committee may establish from time
to time such other enrollment requirements as it determines in its sole
discretion are necessary.

          2.3.          Commencement Date

                          (a)          Each Eligible Employee and each Director
shall commence participation on the date designated by the Committee (the
“Commencement Date”). For each Eligible Employee and Director, the Committee
shall assign one Commencement Date that relates to the right to defer Base
Salary, Incentive Compensation or Director Fees (a “Deferral Commencement Date”)
and a separate Commencement Date that applies to the right to receive credits of
Company Contributions or Director Stock Contributions (a “Company Contribution
Commencement Date”). If an Eligible Employee or Director has not satisfied the
applicable enrollment requirements of Section 2.2 within thirty (30) days of his
Deferral Commencement Date (or such earlier date as specified by the Committee),
such individual’s Deferral Commencement Date shall instead be the first day of
the calendar year next following the date that he or she satisfies such
enrollment requirements.

                          (b)          A Participant shall have no right to
defer Base Salary, Incentive Compensation or Director Fees under the Plan prior
to his Deferral Commencement Date and shall have no right to receive credits of
Company Contributions or Director Stock Contributions under the Plan prior his
Company Contribution Commencement Date.

                          (c)          Any Eligible Employee as of the Effective
Date with respect to whom Transferred Amounts are credited hereunder shall have
a Deferral Commencement Date and a Company Contribution Commencement Date of
January 1, 2008.

          2.4.          Sub-Accounts.

                          (a)          Establishment. The Committee shall
establish and maintain separate Retirement Sub-Accounts, Company Contribution
Sub-Accounts, Director Stock Sub-Accounts

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and In-Service Sub-Accounts for each Participant, as applicable, for each year
in which the Participant allocates Base Salary, Incentive Compensation, or
Director Fees to such Sub-Accounts and for each year in which the Company makes
a Company Contribution or Director Stock Contribution to such Sub-Accounts on
behalf of a Participant. Amounts credited to a Retirement Sub-Account, Company
Contribution Sub-Account or Director Stock Sub-Account shall commence to be paid
following the Participant’s Separation from Service, death or Disability as
provided in Article VI. Amounts credited to an In-Service Sub-Account shall
commence to be paid in a year specified by the Participant as provided in
Section 3.4(a) and Article VI below that occurs before the Participant’s
Separation from Service.

                          (b)          Adjustments.

                                         (i)          A Participant’s Retirement
Sub-Account and In-Service Sub-Account shall be credited with deferrals of Base
Salary, Incentive Compensation or Director Fees, if any, in accordance with
Article III hereof. Base Salary, Incentive Compensation or Director Fees that a
Participant elects to defer shall be treated as if they were set aside in a
Retirement Sub-Account or an In-Service Sub-Account on the date the Base Salary,
Incentive Compensation or Director Fees would otherwise have been paid to the
Participant.

                                         (ii)          A Participant’s Company
Contribution Sub-Account shall be credited with Company Contributions, if any,
in accordance with Section 4.1 hereof. Company Contributions shall be treated as
if they were set aside in a Company Contribution Sub-Account on the date
specified by the Committee in its sole discretion. A Participant’s Director
Stock Sub-Account shall be credited with Director Stock Contributions of Phantom
Shares, if any, in accordance with Section 4.2 hereof. Director Stock
Contributions shall be treated as if they were set aside in a Director Stock
Sub-Account on the dates set forth in Section 4.2.

                                         (iii)          A Participant’s
Sub-Accounts shall be credited with gains, losses and earnings as provided in
Article V hereof and shall be debited for any payments made to the Participant
as provided in Article VI hereof.

          2.5.          Termination.

                          (a)          Deferrals. An individual’s right to defer
Base Salary or Director Fees shall cease with respect to the calendar year
following the calendar year in which he ceases to be an Eligible Employee or
Director, although such individual shall continue to be subject to all of the
terms and conditions of the Plan for as long as he remains a Participant. A
Participant’s right to defer payment of Incentive Compensation shall cease as of
the date of his Separation from Service.

                          (b)          Company Contributions and Director Stock
Contributions. An individual’s right to receive credits of Company Contributions
and Director Stock Contributions, as the case may be, shall cease on the date
provided by the Committee in its sole discretion.

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ARTICLE III
DEFERRAL ELECTIONS

          3.1.          New Participants.

                          (a)          Application. This Section 3.1 applies to
each Eligible Employee or Director who is a Newly Eligible Participant in the
portion of the Plan relating to the right to defer Base Salary or Director Fees
and whose Deferral Commencement Date occurs after the first day of a calendar
year but prior to December 1 of such calendar year (or such earlier date as
specified by the Committee from time to time).

                          (b)          Deferral Election. An Eligible Employee
described in Section 3.1(a) may elect to defer his Base Salary earned during
such calendar year and a Director described in Section 3.1(a) may elect to defer
his Director Fees earned during such calendar year, as the case may be, by
filing a Deferral Election with the Committee in accordance with the following
rules:

                                         (i)          Timing; Irrevocability.
The Deferral Election must be filed with the Committee by, and shall become
irrevocable as of, the thirtieth (30th) day following the Participant’s Deferral
Commencement Date (or such earlier date as specified by the Committee on the
Deferral Election).

                                         (ii)          Base Salary. The Deferral
Election shall only apply to Base Salary earned during such calendar year
beginning with the first payroll period that begins immediately after the date
that the Deferral Election becomes irrevocable in accordance with Section
3.1(b)(i) hereof.

                                         (iii)          Director Fees. The
Deferral Election shall only apply to Director Fees earned after the date that
the Deferral Election becomes irrevocable in accordance with Section 3.1(b)(i)
hereof.

                          (c)          Incentive Compensation. Newly Eligible
Participants may elect to defer Incentive Compensation only in accordance with
Section 3.2

          3.2.          Annual Deferral Elections. Unless Section 3.1 applies,
an Eligible Employee may elect to defer his Base Salary and Incentive
Compensation earned during a calendar year and a Director may elect to defer his
Director Fees earned during a calendar year, as the case may be, by filing a
Deferral Election with the Committee in accordance with the following rules:

                          (a)          Base Salary. The Deferral Election with
respect to Base Salary must be filed with the Committee by, and shall become
irrevocable as of, December 31 (or such earlier date as specified by the
Committee on the Deferral Election) of the calendar year next preceding the
calendar year for which such Base Salary would otherwise be earned.

                          (b)          Incentive Compensation. The Deferral
Election with respect to Incentive Compensation must be filed with the Committee
by, and shall become irrevocable as of, December 31 (or such earlier date as
specified by the Committee on the Deferral Election) of the calendar year next
preceding the first day of the Performance Period for which such Incentive
Compensation would otherwise be earned.

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                          (c)          Performance-Based Compensation.

                                         (i)          Notwithstanding anything
contained in this Section 3.2 to the contrary, and only to the extent permitted
by the Committee, the Deferral Election with respect to Incentive Compensation
that constitutes Performance-Based Compensation must be filed with the Committee
by, and shall become irrevocable as of, the date that is six months before the
end of the applicable Performance Period (or such earlier date as specified by
the Committee on the Deferral Election), provided that in no event may such
Deferral Election be made after such Incentive Compensation has become “readily
ascertainable” within the meaning of Section 409A of the Code.

                                         (ii)          In order to make a
Deferral Election under this Section 3.2(c), the Participant must perform
services continuously from the later of the beginning of the Performance Period
or the date the performance criteria are established through the date a Deferral
Election becomes irrevocable under this Section 3.2(c).

                                         (iii)          A Deferral Election made
under this Section 3.2(c) shall not apply to any portion of the
Performance-Based Compensation that is actually earned by a Participant
regardless of satisfaction of the performance criteria.

                                         (iv)          To the extent permitted
by the Committee, an Eligible Employee described in Section 3.1(a) hereof shall
be permitted to make a Deferral Election with respect to Performance-Based
Compensation in accordance with this Section 3.2(c) provided that the Eligible
Employee satisfies all of the other requirements of this Section.

                          (d)          Director Fees. The Deferral Election with
respect to Director Fees must be filed with the Committee by, and shall become
irrevocable as of, December 31 (or such earlier date as specified by the
Committee on the Deferral Election) of the calendar year next preceding the
calendar year for which such Director Fees would otherwise be earned.

          3.3.          Amount Deferred. A Participant shall designate on the
Deferral Election the portion of his Base Salary, Incentive Compensation or, if
applicable, Director Fees that is to be deferred in accordance with this Article
III. Unless otherwise determined by the Committee, a Participant may defer (in
1% increments) up to 50% of his Base Salary, up to 100% of his Director Fees and
up to 100% of his Incentive Compensation for any calendar year; provided,
however, that the Participant shall not be permitted to defer less than 1% of
each of his Base Salary, Director Fees or Incentive Compensation during any one
calendar year or Performance Period, as the case may be, and any such attempted
deferral shall not be effective.

          3.4.          Elections as to Time and Form of Payment. The Deferral
Election for each year shall contain the Participant’s allocation of deferrals
of Base Salary, Incentive Compensation and/or Director Fees among a Retirement
Sub-Account and, to the extent permitted by the Committee from time to time, one
or more In-Service Sub-Accounts. Such Retirement Sub-Account and In-Service
Sub-Account shall be paid at such time and in such form as set forth below:

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                          (a)          Time of Payment.

                                         (i)          Retirement Sub-Account.
Amounts allocated to a Retirement Sub-Account shall be paid on the Participant’s
Separation from Service, death or Disability in accordance with Article VI.

                                         (ii)          In-Service Sub-Account. A
Participant shall designate the year in which payments will commence to be paid
from an In-Service Sub-Account, which date must be at least two years after the
date in which such Deferral Election becomes irrevocable. The specified date
designated on the Deferral Election will apply to all amounts deferred under the
Plan for that year unless the Participant modifies the time and/or form of
payment of the amounts allocated to the Sub-Account in accordance with the rules
of Section 6.1(c).

                                         (iii)          Default. To the extent
that a Participant does not designate the Sub-Account to which deferrals of Base
Salary, Incentive Compensation or Director Fees shall be credited on a Deferral
Election for a year as provided in this Section 3.4 (or such designation does
not comply with the terms of the Plan), such deferrals for that year shall be
credited to the Participant’s Retirement Sub-Account.

                          (b)          Form of Payment.

                                         (i)          Retirement Sub-Account.
Pursuant to the Deferral Election filed by a Participant under Sections 3.1 or
3.2 for a year, a Participant shall elect the form of payment for the amounts
credited to his Retirement Sub-Account. The Participant shall make one election
that applies to amounts payable due to Retirement or Disability, and one
election that applies to amounts payable due to a Change in Control Termination.
In each case, the Participant may select payment in a single lump sum or in a
number of approximately equal quarterly installments over a five, ten or fifteen
year period. Such payment elections will apply to all amounts credited to the
Retirement Sub-Account under the Plan for the year unless the Participant
modifies such payment elections in accordance with the rules of Section 6.1(c).
In the event a Participant fails to designate a payment form of a Retirement
Sub-Account on his Deferral Election (or such designation does not comply with
the terms of the Plan) for a year, the amounts allocated to the Retirement
Sub-Account for that year shall be paid in a single-lump sum payment.

                                         (ii)          In-Service Sub-Account.
Amounts allocated to an In-Service Sub-Account shall be paid in cash in a single
lump-sum.

          3.5.          Duration and Cancellation of Deferral Elections.

                          (a)          Duration. Once irrevocable, a Deferral
Election shall only be effective for the calendar year or Performance Period
with respect to which such election was timely filed with the Committee. Except
as provided in Section 3.5(b) hereof, a Deferral Election, once irrevocable,
cannot be cancelled during a calendar year or Performance Period.

                          (b)          Cancellation.

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                                         (i)          The Committee may, in its
sole discretion, cancel a Participant’s Deferral Election where such
cancellation occurs by the later of the end of the Participant’s taxable year or
the 15th day of the third month following the date the Participant incurs a
“disability.” For purposes of this Section 3.5(b)(i), a disability refers to any
medically determinable physical or mental impairment resulting in the
Participant’s inability to perform the duties of his or her position or any
substantially similar position, where such impairment can be expected to result
in death or can be expected to last for a continuous period of not less than six
months.

                                         (ii)          The Committee may, in its
sole discretion, cancel a Participant’s Deferral Election due to an
Unforeseeable Emergency or a hardship distribution pursuant to Treasury
Regulation Section 1.401(k)-1(d)(3).

                                         (iii)          If a Participant’s
Deferral Election is cancelled with respect to a particular calendar year or
Performance Period in accordance with this Section 3.5(b), he may make a new
Deferral Election for a subsequent calendar year or Performance Period, as the
case may be, only in accordance with Section 3.2 hereof.

          3.6.          Vested Interest in Deferrals. Each Participant shall at
all times have a fully vested and nonforfeitable interest in his Retirement
Sub-Account and his In-Service Sub-Account balance.

ARTICLE IV
COMPANY CONTRIBUTIONS

          4.1.          Company Contributions. For each calendar year, any
entity in the Affiliated Group, in its sole discretion, may, but is not required
to, credit any amount it desires to any Eligible Employee’s Company Contribution
Sub-Account. The amount so credited to an Eligible Employee may be smaller or
larger than an amount credited to any other Eligible Employee, and the amount
credited to any Employee for a year may be zero even though one or more Eligible
Employees receive a Company Contribution for that year. No credits of Company
Contributions may be allocated to a Retirement Sub-Account or an In-Service
Sub-Account.

          4.2.          Director Stock Contributions. The Company shall
establish and maintain a Director Stock Sub-Account for each Director. Except as
otherwise provided under Section 4.3, the Company shall credit each Director’s
Director Stock Sub-Account in accordance with the following rules:

                          (a)          Current Directors. Except as provided in
Section 4.2(c) hereof, on the fifth business day following the Annual Valuation
Date of a year and on the first business day of each calendar quarter thereafter
during such year (each a “Crediting Date”), the Company shall credit to the
Director Stock Sub-Account of each currently serving Director a number of
Phantom Shares calculated by: (x) dividing $55,000 (or such other amount
established by the Board) by the closing price of a share of CH Energy Group,
Inc. common stock on the New York Stock Exchange on the Annual Valuation Date,
and (y) dividing the result so determined by four (and then rounding to the
nearest tenth). For purposes of this Section 4.2(a), the first Monday following
the first Tuesday in January of each year shall be the Annual Valuation Date.

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                          (b)          Newly Appointed Directors.
Notwithstanding anything contained in Section 4.2(a), and except as provided in
Section 4.2(c) hereof, the number of Phantom Shares to be credited during any
calendar year to the Director Stock Sub-Account of a person who first becomes a
Director on a date during such year after the fifth business day following the
Annual Valuation Date shall be pro-rated and shall be calculated on the basis of
the closing price of a share of CH Energy Group, Inc. common stock on the New
York Stock Exchange on the first business day following the date on which the
person first becomes a Director. A Director whose Company Contribution
Commencement Date begins after January 1 of a year shall be deemed to have
elected to receive payment of his Director Stock Sub-Account credit for such
year in a lump-sum upon his Separation from Service.

                          (c)          Directors Who Satisfy Ownership
Guidelines. No later than the end of each calendar year (or with respect to a
newly-appointed Director described in Section 4.2(b) hereof, no later than the
date of his appointment), the Committee shall determine, in its sole discretion
but after consulting with each Director, whether any Director satisfies the
then-applicable Director stock ownership guidelines for that year, or whether
any Director will satisfy the then-applicable Director stock ownership
guidelines for the immediately following calendar year based on the anticipated
credits of Phantom Shares to the Director Stock Sub-Account for that year as set
forth in Sections 4.2(a) or (b) hereof. If the Committee determines, in its sole
discretion, that a Director either satisfies or will satisfy the then-applicable
Director stock ownership guidelines, then that Director shall receive a cash
payment in lieu of the Phantom Shares that would have otherwise been credited to
his Director Stock Sub-Account for any Crediting Date that occurs after the date
on which the Director satisfies the then-applicable Director stock ownership
guidelines (which date shall be set forth by the Committee in writing, after
consulting with the Director, no later than the end of the applicable time
period set forth in the first sentence of this Section 4.2(c)). The cash payment
in lieu of Phantom Shares for any Crediting Date shall equal $13,750 (or such
other amount established by the Board or as required by Section 4.2(b) hereof)
and shall be treated as a Director Fee for all purposes of the Plan. The
Director may elect to defer the cash payments described in this Section 4.2(c)
to a Retirement Sub-Account or an In-Service Sub-Account pursuant to the rules
applicable to the deferral of Director Fees in Article III hereof and may invest
the deferrals in any permitted investment option of the Plan as provided in
Section 5.2 hereof. To the extent that all or any portion of a cash payment
described in this Section 4.2(c) for any Crediting Date is not deferred under
this Plan, it shall be paid to the Director within 10 days after the applicable
Crediting Date.

          4.3.          Payment Elections. A Participant shall file a Payment
Election for his Company Contribution Sub-Account or Director Stock Sub-Account,
as the case may be, for a year in accordance with the following rules:

                          (a)          Timing; Irrevocability. Each Newly
Eligible Participant shall file with the Committee a Payment Election with
respect to Company Contributions and Director Stock Contributions, as the case
may be, by, and such Payment Election shall become irrevocable as of, the
thirtieth (30th) day following the Participant’s Company Contribution
Commencement Date (or such earlier date as specified by the Committee on the
Payment Election). Each other Eligible Employee or Director shall file a Payment
Election with the Committee with respect to Company Contributions or Director
Stock Contributions for a year by, and such Payment Election shall become
irrevocable as of, December 31 (or such earlier date as specified by the

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Committee on the Deferral Election) of the year that precedes the year in which
the Company Contribution or Director Stock Contribution is to be made by the
Company to the Company Contribution Sub-Account or Director Stock Sub-Account.
Once irrevocable, a Payment Election with respect to a Company Contribution
Sub-Account or a Director Stock Sub-Account for a year may only be changed in
accordance with Section 6.1(c) hereof.

                          (b)          Form of Payment. The Participant shall
designate on the Payment Election that he files with the Committee for a year
the form of payment of the Company Contribution Sub-Account or Director Stock
Sub-Account. The Participant shall make one election that applies to amounts
payable due to Retirement or Disability, and one election that applies to
amounts payable due to a Change in Control Termination. In each case, the
Participant may select payment in a single lump sum or in a number of
approximately equal quarterly installments over a five, ten or fifteen year
period. Such Payment Election will apply to all amounts credited to the Company
Contribution Sub-Account or the Director Stock Sub-Account under the Plan for
the year unless the Participant modifies such Payment Election in accordance
with the rules of Section 6.1(c). In the event that a Participant does not
designate the form of payment of a Company Contribution Sub-Account or Director
Stock Sub-Account on a Payment Election as provided in this Section 4.3(b) (or
such designation does not comply with the terms of the Plan), such Sub-Account
shall be paid in a single lump-sum payment.

                          (c)          Time of Payment. Company Contribution
Sub-Accounts and Director Stock Sub-Accounts shall be paid upon a Participant’s
Separation from Service, death or Disability in accordance with Article VI.

          4.4.          Vesting. Each Participant’s Company Contribution
Sub-Account shall be subject to such vesting schedule as may be determined by
the Company or other member of the Affiliated Group from time to time. The
vesting schedule need not be the same for each Participant. Amounts credited to
a Director’s Director Stock Sub-Account shall be fully vested at all times.

ARTICLE V
CREDITING OF GAINS, LOSSES AND EARNINGS TO ACCOUNTS

          5.1.          Director Stock Sub-Account. The amounts credited to the
Director Stock Sub-Account will be credited with gains, losses and earnings
based on the performance of the Phantom Share Fund for all periods prior to a
Director’s Separation from Service. Immediately following a Director’s
Separation from Service, the amounts credited to his Director Stock Sub-Account
may be invested in any investment option available under the Plan, subject to
the rules set forth in Section 5.2 hereof.

          5.2.          Retirement Sub-Account, In-Service Sub-Account and
Company Contribution Sub-Account. To the extent provided by the Committee in its
sole discretion, and except as provided in Section 5.1 hereof, each
Participant’s Sub-Accounts will be credited with gains, losses and earnings
based on investment directions made by the Participant in accordance with
investment deferral crediting options and procedures established from time to
time by the Committee. Subject to the investment procedures established by the
Committee, Participants may elect to invest amounts allocated to a Sub-Account
in the Phantom Share Fund. The

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Committee specifically retains the right in its sole discretion to change the
investment deferral crediting options and procedures from time to time.

          5.3.          Limitation of Rights with Respect to Investments. By
electing to defer any amount under the Plan (or by receiving or accepting any
benefit under the Plan), each Participant acknowledges and agrees that the
Affiliated Group is not and shall not be required to make any investment in
connection with the Plan, nor is it required to follow the Participant’s
investment directions in any actual investment it may make or acquire in
connection with the Plan or in determining the amount of any actual or
contingent liability or obligation of the Company or any other member of the
Affiliated Group thereunder or relating thereto. Any amounts credited to a
Participant’s Sub-Accounts (other than the Director Stock Sub-Account) with
respect to which a Participant does not provide investment direction shall be
credited with gains, losses and earnings as if such amounts were invested in an
investment option to be selected by the Committee in its sole discretion.

ARTICLE VI
PAYMENTS

          6.1.          Date of Payment of Sub-Accounts. Except as otherwise
provided in this Article VI, a Participant’s Sub-Accounts shall commence to be
paid as follows:

                          (a)          Retirement Sub-Account; Company
Contribution Sub-Account and Director Stock Sub-Account. The vested amounts
credited to a Participant’s Retirement Sub-Account, Company Contribution
Sub-Account and Director Stock Sub-Account shall commence to be paid within 30
days of the last day of the calendar quarter in which the Participant’s
Retirement, Disability or Change in Control Termination occurs, or such later
date required by Section 6.2. In the event of the Participant’s Retirement,
Disability or Change in Control Termination, the Participant’s Retirement
Sub-Accounts shall be paid in the form selected by the Participant in accordance
with Section 3.4(b) and the Company Contribution Sub-Accounts and the Director
Stock Sub-Accounts, as applicable, shall be paid in the form selected by the
Participant in accordance with Section 4.3(b). In the event a Participant incurs
a Separation from Service other than due to Retirement, Disability or Change in
Control Termination, the Participant’s Retirement Sub-Account and Company
Contribution Sub-Account shall be paid in a single lump sum.

                          (b)          In-Service Sub-Account.

                                         (i)          In general, the vested
amounts credited to a Participant’s In-Service Sub-Account shall commence to be
paid in a single lump sum in January of the year specified by the Participant
for such Sub-Account in accordance with Section 3.4(a) hereof.

                                         (ii)          If a Participant’s
Separation from Service occurs prior to the commencement of one or more
In-Service Sub-Accounts, the amounts credited to such In-Service Sub-Accounts
shall immediately be transferred to the Participant’s Retirement Sub-Account of
the same year and payment of the transferred amounts shall thereafter be
governed by the terms and conditions applicable to the Retirement Sub-Account of
the same year, including, without limitation, Section 6.2 hereof.

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                          (c)          Subsequent Payment Elections. A
Participant may elect on a form provided by the Committee to change the time and
or form of payment with respect to one or more of his Sub-Accounts (a
“Subsequent Payment Election”). The Subsequent Payment Election shall become
irrevocable upon receipt by the Committee and shall be made in accordance with
the following rules:

                                         (i)          In General. The Subsequent
Payment Election may not take effect until at least twelve (12) months after the
date on which it is accepted by the Committee. The Subsequent Payment Election
most recently accepted by the Committee and that satisfies the requirements of
this Section 6.1(c) shall govern the payout of the Sub-Accounts notwithstanding
anything contained in Section 6.1(a) or (b) hereof to the contrary.

                                         (ii)          Retirement Sub-Account;
Company Contribution Sub-Account; Director Stock Sub-Account. A Participant may
make an election (to the extent permitted by the Committee in its sole
discretion) to change the form of payment for each of his Retirement
Sub-Accounts, Company Contribution Sub-Accounts and Director Stock Sub-Accounts
to a form otherwise permitted under the Plan. Except in the event of the death
or Unforeseeable Emergency of the Participant, the payment of such Sub-Account
will be delayed until the fifth (5th) anniversary of the first day of the month
that the Sub-Account would otherwise have been paid under the Plan if such
Subsequent Payment Election had not been made (or, in the case of installment
payments, which are treated as a single payment for purposes of this Section, on
the fifth (5th) anniversary of the first day of the month that the first
installment payment was scheduled to be made).

                                         (iii)          In-Service Sub-Account.
A Participant may make one or more elections to delay the payment date of one or
more In-Service Sub-Account(s) to a payment date permitted for In-Service
Sub-Accounts under the Plan. Such Subsequent Payment Election must be filed with
the Committee at least twelve (12) months before the first day of the month the
amount would have otherwise been paid under the Plan. On such Subsequent Payment
Election, the Participant must delay the payment date for a period of at least
five (5) years after the first day of the month that the Sub-Account would
otherwise have been paid under the Plan.

                                         (iv)          Acceleration Prohibited.
The Committee shall disregard any Subsequent Payment Election by a Participant
to the extent such election would result in an acceleration of the time or
schedule of any payment or amount scheduled to be paid under the Plan within the
meaning of Section 409A of the Code.

                          (d)          Calculation of Installment Payments. In
the event that a Sub-Account is paid in installments: (i) the first installment
shall commence on the date specified in Section 6.1 (subject to Section 6.2),
and each subsequent installment shall be paid quarterly until the Sub-Account
has been fully paid; (ii) the amount of each installment shall equal the
quotient obtained by dividing the Participant’s vested Sub-Account balance as of
the end of the month immediately preceding the month of such installment payment
(the “Installment Calculation Date”) by the number of installment payments
remaining to be paid at the time of the calculation; and (iii) the amount of
such Sub-Account remaining unpaid shall continue to be credited with gains,
losses and earnings as provided in Article V hereof. By way of example, if the
Participant elects to receive payments of a Sub-Account in equal quarterly
installments over a period of five (5)

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years, the first payment shall equal 1/20th of the vested Sub-Account balance,
calculated as described in this Section 6.1(d). The following quarter, the
payment shall be 1/19 of the vested Sub-Account balance, calculated as described
in this Section 6.1(d).

          6.2.          Mandatory Six-Month Delay. Except as otherwise provided
in Sections 6.5(a), (b) and (c), and to the extent required in order to comply
with Section 409A of the Code, all payments under this Agreement that are made
as a result of the Separation from Service of a Specified Employee (including a
Disability termination that occurs at the same time as the Separation from
Service) and that would otherwise be paid during the first six months following
such Separation from Service shall be accumulated through and paid within 30
days after the first business day of the seventh month following the
Participant’s Separation from Service (or if earlier, upon the Participant’s
death).

          6.3.          Death of Participant.

                          (a)          Each Participant shall file a Beneficiary
Designation Form with the Committee at the time the Participant files an initial
Deferral Election or Payment Election. A Participant’s Beneficiary Designation
Form may be changed at any time prior to his death by the execution and delivery
of a new Beneficiary Designation Form. The Beneficiary Designation Form on file
with the Committee that bears the latest date at the time of the Participant’s
death shall govern. If a Participant fails to properly designate a Beneficiary
in accordance with this Section 6.3(a), then his Beneficiary shall be his
estate.

                          (b)          In the event of the Participant’s death,
the remaining amount of the Participant’s vested Sub-Accounts shall be paid to
the Beneficiary or Beneficiaries designated on a Beneficiary Designation Form in
a single lump sum within 30 days of the Participant’s death.

          6.4.          Withdrawal Due to Unforeseeable Emergency. A Participant
shall have the right to request, on a form provided by the Committee, an
accelerated payment of all or a portion of his Account in a lump sum if he
experiences an Unforeseeable Emergency. The Committee shall have the sole
discretion to determine whether to grant such a request and the amount to be
paid pursuant to such request.

                          (a)          Determination of Unforeseeable Emergency.
Whether a Participant is faced with an unforeseeable emergency permitting a
payment under this Section 6.4 is to be determined based on the relevant facts
and circumstances of each case, but, in any case, a payment on account of an
Unforeseeable Emergency may not be made to the extent that such emergency is or
may be relieved through reimbursement or compensation from insurance or
otherwise, by liquidation of the Participant’s assets, to the extent the
liquidation of such assets would not cause severe financial hardship, or by
cessation of deferrals under the Plan. Payments because of an Unforeseeable
Emergency must be limited to the amount reasonably necessary to satisfy the
emergency need (which may include amounts necessary to pay any Federal, state,
local, or foreign income taxes or penalties reasonably anticipated to result
from the payment). Determinations of amounts reasonably necessary to satisfy the
emergency need must take into account any additional compensation that is
available if the Plan provides for cancellation of a Deferral Election upon a
payment due to an Unforeseeable Emergency. However, the determination of amounts
reasonably necessary to satisfy the emergency need is not required to

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take into account any additional compensation that is available from a qualified
plan of the Company as defined in Section 409A of the Code (including any amount
available by obtaining a loan under such plan), or that due to the Unforeseeable
Emergency is available under another nonqualified deferred compensation plan but
has not actually been paid (including a plan that would provide for deferred
compensation except due to the application of the effective date provisions of
Section 409A of the Code).

                          (b)          Payment of Account. Payment shall be made
within 30 days following the determination by the Committee that a withdrawal
will be permitted under this Section 6.4, or such later date as may be required
under Section 6.2 hereof.

          6.5.          Discretionary Acceleration of Payments. To the extent
permitted by Section 409A of the Code, the Committee may, in its sole
discretion, accelerate the time or schedule of a payment under the Plan as
provided in this Section. The provisions of this Section are intended to comply
with the exception to accelerated payments under Treasury Regulation Section
1.409A-3(j) and shall be interpreted and administered accordingly.

                          (a)          Domestic Relations Orders. The Committee
may, in its sole discretion, accelerate the time or schedule of a payment under
the Plan to an individual other than the Participant as may be necessary to
fulfill a domestic relations order (as defined in Section 414(p)(1)(B) of the
Code).

                          (b)          Conflicts of Interest. The Committee may,
in its sole discretion, provide for the acceleration of the time or schedule of
a payment under the Plan to the extent necessary for any Federal officer or
employee in the executive branch to comply with an ethics agreement with the
Federal government. Additionally, the Committee may, in its sole discretion,
provide for the acceleration of the time or schedule of a payment under the Plan
the to the extent reasonably necessary to avoid the violation of an applicable
Federal, state, local, or foreign ethics law or conflicts of interest law
(including where such payment is reasonably necessary to permit the Participant
to participate in activities in the normal course of his or her position in
which the Participant would otherwise not be able to participate under an
applicable rule).

                          (c)          Employment Taxes. The Committee may, in
its sole discretion, provide for the acceleration of the time or schedule of a
payment under the Plan to pay the Federal Insurance Contributions Act (FICA) tax
imposed under Sections 3101, 3121(a), and 3121(v)(2) of the Code, or the
Railroad Retirement Act (RRTA) tax imposed under Sections 3201, 3211,
3231(e)(1), and 3231(e)(8) of the Code, where applicable, on compensation
deferred under the Plan (the FICA or RRTA amount). Additionally, the Committee
may, in its sole discretion, provide for the acceleration of the time or
schedule of a payment, to pay the income tax at source on wages imposed under
Section 3401 of the Code or the corresponding withholding provisions of
applicable state, local, or foreign tax laws as a result of the payment of the
FICA or RRTA amount, and to pay the additional income tax at source on wages
attributable to the pyramiding Section 3401 of the Code wages and taxes.
However, the total payment under this acceleration provision must not exceed the
aggregate of the FICA or RRTA amount, and the income tax withholding related to
such FICA or RRTA amount.

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                          (d)          Limited Cash-Outs. Subject to Section 6.2
hereof, the Committee may, in its sole discretion, require a mandatory lump sum
payment of amounts deferred under the Plan that do not exceed the applicable
dollar amount under Section 402(g)(1)(B) of the Code, provided that the payment
results in the termination and liquidation of the entirety of the Participant’s
interest under the Plan, including all agreements, methods, programs, or other
arrangements with respect to which deferrals of compensation are treated as
having been deferred under a single nonqualified deferred compensation plan
under Section 409A of the Code.

                          (e)          Payment Upon Income Inclusion Under
Section 409A. Subject to Section 6.2 hereof, the Committee may, in its sole
discretion, provide for the acceleration of the time or schedule of a payment
under the Plan at any time the Plan fails to meet the requirements of Section
409A of the Code. The payment may not exceed the amount required to be included
in income as a result of the failure to comply with the requirements of Section
409A of the Code.

                          (f)          Certain Payments to Avoid a Nonallocation
Year under Section 409(p). Subject to Section 6.2 hereof, the Committee may, in
its sole discretion, provide for the acceleration of the time or schedule of a
payment under the Plan to prevent the occurrence of a nonallocation year (within
the meaning of Section 409(p)(3) of the Code) in the plan year of an employee
stock ownership plan next following the plan year in which such payment is made,
provided that the amount paid may not exceed 125 percent of the minimum amount
of payment necessary to avoid the occurrence of a nonallocation year.

                          (g)          Payment of State, Local, or Foreign
Taxes. Subject to Section 6.2 hereof, the Committee may, in its sole discretion,
provide for the acceleration of the time or schedule of a payment under the Plan
to reflect payment of state, local, or foreign tax obligations arising from
participation in the Plan that apply to an amount deferred under the Plan before
the amount is paid or made available to the Participant (the state, local, or
foreign tax amount). Such payment may not exceed the amount of such taxes due as
a result of participation in the Plan. The payment may be made in the form of
withholding pursuant to provisions of applicable state, local, or foreign law or
by payment directly to the Participant. Additionally, the Committee may, in its
sole discretion, provide for the acceleration of the time or schedule of a
payment under the Plan to pay the income tax at source on wages imposed under
Section 3401 of the Code as a result of such payment and to pay the additional
income tax at source on wages imposed under Section 3401 of the Code
attributable to such additional wages and taxes. However, the total payment
under this acceleration provision must not exceed the aggregate of the state,
local, and foreign tax amount, and the income tax withholding related to such
state, local, and foreign tax amount.

                          (h)          Certain Offsets. Subject to Section 6.2
hereof, the Committee may, in its sole discretion, provide for the acceleration
of the time or schedule of a payment under the Plan as satisfaction of a debt of
the Participant to the Company (or any entity which would be considered to be a
single employer with the Company under Section 414(b) or Section 414(c) of the
Code), where such debt is incurred in the ordinary course of the service
relationship between the Company (or any entity which would be considered to be
a single employer with the Company under Section 414(b) or Section 414(c) of the
Code) and the Participant, the entire amount of reduction in any of the taxable
years of the Company (or any entity which would be

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considered to be a single employer with the Company under Section 414(b) or
Section 414(c) of the Code) does not exceed $5,000, and the reduction is made at
the same time and in the same amount as the debt otherwise would have been due
and collected from the Participant.

                          (i)          Bona Fide Disputes as to a Right to a
Payment. Subject to Section 6.2 hereof, the Committee may, in its sole
discretion, provide for the acceleration of the time or schedule of a payment
under the Plan where such payments occur as part of a settlement between the
Participant and the Company (or any entity which would be considered to be a
single employer with the Company under Section 414(b) or Section 414(c) of the
Code) of an arm’s length, bona fide dispute as to the Participant’s right to the
deferred amount.

                          (j)          Plan Terminations and Liquidations.
Subject to Section 6.2 hereof, the Committee may, in its sole discretion,
provide for the acceleration of the time or schedule of a payment under the Plan
as provided in Section 8.2 hereof.

                          (k)          Other Events and Conditions. Subject to
Section 6.2 hereof, a payment may be accelerated upon such other events and
conditions as the Internal Revenue Service may prescribe in generally applicable
guidance published in the Internal Revenue Bulletin.

Except as otherwise specifically provided in this Plan, including but not
limited to Section 3.5(b), this Section 6.5 and Section 8.2 hereof, the
Committee may not accelerate the time or schedule of any payment or amount
scheduled to be paid under the Plan within the meaning of Section 409A of the
Code.

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

                          (a)          Federal Securities Laws or Other
Applicable Law. A Payment may be delayed where the Committee 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 Committee reasonably anticipates 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)          Other Events and Conditions. 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.

          6.7.          Actual Date of Payment. To the extent permitted by
Section 409A of the Code, the Committee may delay payment in the event that it
is not administratively possible to make payment on the date (or within the
periods) specified in this Article VI, or the making of the payment would
jeopardize the ability of the Company (or any entity which would be considered
to be a single employer with the Company 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.

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          6.8.          Discharge of Obligations. The payment to a Participant
or his Beneficiary of a his Sub-Account in a single lump sum or the number of
installments elected by the Participant pursuant to this Article VI shall
discharge all obligations of the Affiliated Group to such Participant or
Beneficiary under the Plan with respect to that Sub-Account.

ARTICLE VII
ADMINISTRATION

          7.1.          General. The Company, through the Committee, shall be
responsible for the general administration of the Plan and for carrying out the
provisions hereof. In general, the Committee shall have the full power,
discretion and authority to carry out the provisions of the Plan; in particular,
the Committee shall have full discretion to (a) interpret all provisions of the
Plan, (b) resolve all questions relating to eligibility for participation in the
Plan and the amount in the Account of any Participant and all questions
pertaining to claims for benefits and procedures for claim review, (c) resolve
all other questions arising under the Plan, including any factual questions and
questions of construction, (d) determine all claims for benefits, and (e) take
such further action as the Company shall deem advisable in the administration of
the Plan. The actions taken and the decisions made by the Committee hereunder
shall be final, conclusive, and binding on all persons, including the Company,
its shareholders, the other members of the Affiliated Group, employees,
Participants, and their estates and Beneficiaries.

          7.2.          Compliance with Section 409A of the Code.

                          (a)          It is intended that the Plan comply with
the provisions of Section 409A of the Code, so as to prevent the inclusion in
gross income of any amounts deferred hereunder in a taxable year that is prior
to the taxable year or years in which such amounts would otherwise actually be
paid or made available to Participants or Beneficiaries. This Plan shall be
construed, administered, and governed in a manner that effects such intent, and
the Committee shall not take any action that would be inconsistent with such
intent.

                          (b)          Although the Committee shall use its best
efforts to avoid the imposition of taxation, interest and penalties under
Section 409A of the Code, the tax treatment of deferrals under this Plan is not
warranted or guaranteed. Neither the Company, the other members of the
Affiliated Group, the Board, nor the Committee (nor its designee) shall be held
liable for any taxes, interest, penalties or other monetary amounts owed by any
Participant, Beneficiary or other taxpayer as a result of the Plan.

                          (c)          Any reference in this 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. For purposes of the
Plan, the phrase “permitted by Section 409A of the Code,” or words or phrases of
similar import, shall mean that the event or circumstance shall only be
permitted to the extent it would not cause an amount deferred or payable under
the Plan to be includible in the gross income of a Participant or Beneficiary
under Section 409A(a)(1) of the Code.

          7.3.          Claims Procedure. If a Participant (including a
Director) or his Beneficiary, as the case may be, disagrees with a decision made
regarding his Account or payment from his

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Account, the Participant or his Beneficiary, as the case may be, should outline
his claim in a letter and submit it to the Committee. A claim must be signed by
the Participant, the Participant’s Beneficiary, or the Participant’s authorized
representative (the “Claimant”). In the event that a Claimant’s claim is wholly
or in part denied by the Committee (or its designee), the Committee (or its
designee) will provide written notice of the denial within 90 calendar days (or
within 180 days if special circumstances exist) after it received the claim.
This notice will state, in a manner designed to be understood by the Claimant,
the following:

 

 

 

 

•

the specific reason or reasons for the denial,

 

 

 

 

•

specific reference to the Plan provision(s) on which the denial is based,

 

 

 

 

•

a description of any additional material or information which the Claimant may
need to perfect the claim with an explanation as to why such material or
information is necessary,

 

 

 

 

•

a statement that the Claimant has the right, upon request and free of charge, to
review and obtain copies of records and documents relating to his claim which
are held by the Committee (or its designee), and

 

 

 

 

•

an explanation of the appeal right and procedure described in the next
paragraph, including timelines and a statement of the Claimant’s right to file
suit under ERISA §502(a) if the Claimant’s claim is denied on review.

If a Claimant’s claim is denied, wholly or in part, the Claimant has the right
of an appeal to the Committee for review of the denial. The following provisions
apply to such right of appeal.

 

 

 

 

•

The request for review must be filed with the Committee within 60 calendar days
following the Claimant’s receipt of written notice of denial of the claim.

 

 

 

 

•

The request must be in writing from the Claimant and must state the specific
portions of the claim denial that the Committee is asked to review.

 

 

 

 

•

The Claimant has the right, upon request and free of charge, to review and
obtain copies of records and documents relating to the Claimant’s claim that are
held by the Committee (or its designee).

 

 

 

 

•

The Claimant may submit issues, arguments, and other comments in writing to the
Committee with any documentary evidence in support of his claim.

 

 

 

 

•

The Committee’s review will take into account all information submitted by the
Claimant, without regard to whether the information was submitted or considered
in the initial benefit determination.

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•

Written notice of the Committee’s decision will be given to the Claimant within
60 calendar days of receipt of the Claimant’s request for review (or within 120
calendar days if special circumstances exist). This notice will state specific
reasons for the decision, including specific reference to the Plan provision(s)
on which the decision is based in language designed to be understood by the
Claimant. It will also include a statement that the Claimant is entitled to
receive, free of charge and upon request, copies of documents and other
information relevant to his claim, and that the Claimant has the right to bring
a civil action under ERISA §502(a) if the Committee’s decision on review is
adverse to the Claimant.

No lawsuit by a Claimant may be filed prior to exhausting the Plan’s
administrative appeal process. Any lawsuit must be filed no later than the
earlier of one year after the Claimant’s claim for benefit was denied or the
date the cause of action first arose.

ARTICLE VIII
AMENDMENT AND TERMINATION

          8.1.          Amendment. The Company reserves the right to amend,
terminate or freeze the Plan, in whole or in part, at any time by action of the
Board. Moreover, the Committee may amend the Plan at any time in its sole
discretion to ensure that the Plan complies with the requirements of Section
409A of the Code or other applicable law; provided, however, that such
amendments, in the aggregate, may not materially increase the benefit costs of
the Plan to the Company. In no event shall any such action by the Board or
Committee adversely affect any Participant or Beneficiary who has an Account, or
result in any change in the timing or manner of payment of the amount of any
Account (except as otherwise permitted under the Plan), without the consent of
the Participant or Beneficiary, unless the Board or the Committee, as the case
may be, determines in good faith that such action is necessary to ensure
compliance with Section 409A of the Code. To the extent permitted by Section
409A of the Code, the Committee may, in its sole discretion, modify the rules
applicable to Deferral Elections, Payment Elections and Subsequent Payment
Elections to the extent necessary to satisfy the requirements of the Uniformed
Service Employment and Reemployment Rights Act of 1994, as amended, 38 U.S.C.
4301-4334.

          8.2.          Payments Upon Termination of Plan. In the event that the
Plan is terminated, the amounts allocated to a Participant’s Sub-Accounts shall
be paid to the Participant or his Beneficiary on the dates on which the
Participant or his Beneficiary would otherwise receive payments hereunder
without regard to the termination of the Plan. Notwithstanding the preceding
sentence, and subject to Section 6.2 hereof:

                          (a)          Liquidation; Bankruptcy. The Board shall
have the authority, in its sole discretion, to terminate the Plan and pay each
Participant’s entire Account to the Participant or, if applicable, his
Beneficiary within twelve (12) months of a corporate dissolution taxed under
Section 331 of the Code or with the approval of a bankruptcy court pursuant to
11 U.S.C. 503(b)(1)(A), provided that the amounts are included in the
Participant’s gross income in the latest of the following years (or, if earlier,
the taxable year in which the amount is actually or

22

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constructively received): (i) the calendar year in which the Plan termination
and liquidation occurs; (ii) the first calendar year in which the amount is no
longer subject to a substantial risk of forfeiture as defined under Section 409A
of the Code; or (iii) the first calendar year in which the payment is
administratively practicable.

                          (b)          Change in Control. The Board shall have
the authority, in its sole discretion, to terminate the Plan and pay each
Participant’s entire Account to the Participant or, if applicable, his
Beneficiary pursuant to an irrevocable action taken by the Board within the 30
days preceding or the 12 months following a Change in Control, provided that
this paragraph will only apply if all agreements, methods, programs, and other
arrangements sponsored by the Company (or any entity which would be considered
to be a single employer with the Company under Section 414(b) or Section 414(c)
of the Code) immediately after the time of the Change in Control event with
respect to which deferrals of compensation are treated as having been deferred
under a single plan under Section 409A of the Code are terminated and paid with
respect to each Participant that experienced the Change in Control event, so
that under the terms of the termination and payment all such Participants are
required to receive all amounts of compensation deferred under the terminated
agreements, methods, programs, and other arrangements within 12 months of the
date the Company (or any entity which would be considered to be a single
employer with the Company under Section 414(b) or Section 414(c) of the Code)
irrevocably takes all necessary action to terminate and liquidate the
agreements, methods, programs, and other arrangements.

                          (c)          Discretionary Terminations. The Board
shall have the authority, in its sole discretion, to terminate the Plan and pay
each Participant’s entire Account to the Participant or, if applicable, his
Beneficiary, provided that: (i) the termination and liquidation does not occur
proximate to a downturn in the financial health of the Company (or any entity
which would be considered to be a single employer with the Company under Section
414(b) or Section 414(c) of the Code); (ii) The Company (or any entity which
would be considered to be a single employer with the Company under Section
414(b) or Section 414(c) of the Code) terminates and liquidates all agreements,
methods, programs, and other arrangements sponsored by the Company (or any
entity which would be considered to be a single employer with the Company under
Section 414(b) or Section 414(c) of the Code) that would be aggregated with any
terminated and liquidated agreements, methods, programs, and other arrangements
under Section 409A of the Code if the same Participant had deferrals of
compensation under all of the agreements, methods, programs, and other
arrangements that are terminated and liquidated; (iii) no payments in
liquidation of the Plan are made within 12 months of the date the Board takes
all necessary action to irrevocably terminate and liquidate the Plan other than
payments that would be payable under the terms of the Plan if the action to
terminate and liquidate the Plan had not occurred; (iv) all payments are made
within 24 months of the date the Board takes all necessary action to irrevocably
terminate and liquidate the Plan; and (v) the Company (or any entity which would
be considered to be a single employer with the Company under Section 414(b) or
Section 414(c) of the Code) does not adopt a new plan that would be aggregated
with any terminated and liquidated plan under Section 409A of the Code if the
same Participant participated in both plans, at any time within three years
following the date the Board takes all necessary action to irrevocably terminate
and liquidate the Plan.

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                          (d)          Other Events. The Board shall have the
authority, in its sole discretion, to terminate the Plan and pay each
Participant’s entire Account to the Participant or, if applicable, his
Beneficiary upon such other events and conditions as the Internal Revenue
Service may prescribe in generally applicable guidance published in the Internal
Revenue Bulletin.

ARTICLE IX
MISCELLANEOUS

          9.1.          Non-alienation of Deferred Compensation. Except as
permitted by the Plan, no right or interest under the Plan of any Participant or
Beneficiary shall, without the written consent of the Company, be (i) assignable
or transferable in any manner, (ii) subject to alienation, anticipation, sale,
pledge, encumbrance, attachment, garnishment or other legal process or (iii) in
any manner liable for or subject to the debts or liabilities of the Participant
or Beneficiary. Notwithstanding the foregoing, to the extent permitted by
Section 409A of the Code and subject to Section 6.5(a) hereof, the Committee
shall honor a judgment, order or decree from a state domestic relations court
which requires the payment of part or all of a Participant’s or Beneficiary’s
interest under this Plan to an “alternate payee” as defined in Section 414(p) of
the Code.

          9.2.          Participation by Employees of Affiliated Group Members.
Any member of the Affiliated Group may, by action of its board of directors or
equivalent governing body and with the consent of the Board, adopt the Plan;
provided that the Board may waive the requirement that such board of directors
or equivalent governing body effect such adoption. By its adoption of or
participation in the Plan, the adopting member of the Affiliated Group shall be
deemed to appoint the Company its exclusive agent to exercise on its behalf all
of the power and authority conferred by the Plan upon the Company and accept the
delegation to the Committee of all the power and authority conferred upon it by
the Plan. The authority of the Company to act as such agent shall continue until
the Plan is terminated as to the participating affiliate. An Eligible Employee
who is employed by a member of the Affiliated Group and who elects to
participate in the Plan shall participate on the same basis as an Eligible
Employee of the Company. The Account of a Participant employed by a
participating member of the Affiliated Group shall be paid in accordance with
the Plan solely by such member to the extent attributable to Base Salary,
Incentive Compensation or Director Fees that would have been paid by such
participating member in the absence of deferral pursuant to the Plan, unless the
Board otherwise determines that the Company shall be the obligor.

          9.3.          Interest of Participant.

                          (a)          The obligation of the Company and any
other participating member of the Affiliated Group under the Plan to make
payment of amounts reflected in an Account merely constitutes the unsecured
promise of the Company (or, if applicable, the participating members of the
Affiliated Group) to make payments from their general assets and no Participant
or Beneficiary shall have any interest in, or a lien or prior claim upon, any
property of the Affiliated Group. Nothing in the Plan shall be construed as
guaranteeing future employment to Eligible Employees. It is the intention of the
Affiliated Group that the Plan be unfunded for tax purposes and for purposes of
Title I of ERISA. The Company may create a trust to hold funds to be used in
payment of its and the Affiliated Group’s obligations under the Plan, and may
fund such trust;

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provided, however, that any funds contained therein shall remain liable for the
claims of the general creditors of the Company and the other participating
members of the Affiliated Group.

                          (b)          In the event that, in the sole discretion
of the Committee, the Company and/or the other members of the Affiliated Group
purchases an insurance policy or policies insuring the life of any Participant
(or any other property) to allow the Company and/or the other members of the
Affiliated Group to recover the cost of providing the benefits, in whole or in
part, hereunder, neither the Participants nor their Beneficiaries or other
distributees shall have nor acquire any rights whatsoever therein or in the
proceeds therefrom. The Company and/or the other members of the Affiliated Group
shall be the sole owner and beneficiary of any such policy or policies and, as
such, shall possess and may exercise all incidents of ownership therein. A
Participant’s participation in the underwriting or other steps necessary to
acquire such policy or policies may be required by the Company and, if required,
shall not be a suggestion of any beneficial interest in such policy or policies
to such Participant or any other person.

          9.4.          Claims of Other Persons. The provisions of the Plan
shall in no event be construed as giving any other person, firm or corporation
any legal or equitable right as against the Affiliated Group or the officers,
employees or directors of the Affiliated Group, except any such rights as are
specifically provided for in the Plan or are hereafter created in accordance
with the terms and provisions of the Plan.

          9.5.          Severability. The invalidity and unenforceability of any
particular provision of the Plan shall not affect any other provision hereof,
and the Plan shall be construed in all respects as if such invalid or
unenforceable provision were omitted.

          9.6.          Governing Law. Except to the extent preempted by federal
law, the provisions of the Plan shall be governed and construed in accordance
with the laws of the State of New York.

          9.7.          Relationship to Other Plans. The Plan is intended to
serve the purposes of and to be consistent with any incentive compensation plan
approved by the Committee for purposes of the Plan.

          9.8.          Successors. The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation, reorganization
or otherwise) to all or substantially all of the business and/or assets of the
Company expressly to assume this Plan. This Plan shall be binding upon and inure
to the benefit of the Company and any successor of or to the Company, including
without limitation any persons acquiring directly or indirectly all or
substantially all of the business and/or assets of the Company whether by sale,
merger, consolidation, reorganization or otherwise (and such successor shall
thereafter be deemed the “Company” for the purposes of this Plan), and the
heirs, beneficiaries, executors and administrators of each Participant.

          9.9.          Withholding of Taxes. Subject to Section 6.5 hereof, to
the extent required by the law in effect at the time payments are made, the
Affiliated Group may withhold or cause to be withheld from any amounts deferred
or payable under the Plan all Federal, state, local and other taxes as shall be
legally required. The Affiliated Group shall have the right in its sole
discretion to (i) require a Participant to pay or provide for payment of the
amount of any taxes

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that the Affiliated Group may be required to withhold with respect to amounts
that the Company credits to a Participant’s Account or (ii) deduct from any
amount of salary, bonus, incentive compensation or other payment otherwise
payable in cash to the Participant the amount of any taxes that the Company may
be required to withhold with respect to amounts that the Company credits to a
Participant’s Account.

          9.10.          Electronic or Other Media. Notwithstanding any other
provision of the Plan to the contrary, including any provision that requires the
use of a written instrument, the Committee may establish procedures for the use
of electronic or other media in communications and transactions between the Plan
or the Committee and Participants and Beneficiaries. Electronic or other media
may include, but are not limited to, e-mail, the Internet, intranet systems and
automated telephonic response systems.

          9.11.          Headings; Interpretation. Headings in this Plan are
inserted for convenience of reference only and are not to be considered in the
construction of the provisions hereof. Unless the context clearly requires
otherwise, the masculine pronoun wherever used herein shall be construed to
include the feminine pronoun.

          9.12.          Participants Deemed to Accept Plan. By accepting any
benefit under the Plan, each Participant and each person claiming under or
through any such Participant shall be conclusively deemed to have indicated his
acceptance and ratification of, and consent to, all of the terms and conditions
of the Plan and any action taken under the Plan by the Board, the Committee or
the Company or the other members of the Affiliated Group, in any case in
accordance with the terms and conditions of the Plan.

ARTICLE X
EFFECTIVE DATE AND TRANSITION RULES

          10.1.          Effective Date. This amendment and restatement of the
Plan is effective as of January 1, 2008 (the “Effective Date”). 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. Part Two of the Plan shall be governed by the terms and conditions set
forth herein.

                            (a)          Pre-2005 Deferrals. Any “amounts
deferred” in taxable years beginning before January 1, 2005 (within the meaning
of Section 409A of the Code) and any earnings thereon shall be governed by the
terms of Part One of the Plan, and it is intended that such amounts and the
earnings thereon 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 as of October 3, 2004, or add a new
material benefit or right to Part One of the Plan. As of January 1, 2008, Part
One of the Plan is frozen, and neither the Company, its affiliates nor any
individual shall make or permit to be made any additional contributions or
deferrals under Part One of the Plan (other than earnings) on or after that
date.

                            (b)          Post-2004 Deferrals. Any “amounts
deferred” in taxable years beginning on or after January 1, 2005 (within the
meaning of Section 409A of the Code) and any earnings

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thereon shall be governed by the terms and conditions of Part Two of the Plan.
To the extent that any of those amounts were deferred under the Plan prior to
the Effective Date (the “Transferred Amounts”), then the Committee shall
transfer the Transferred Amounts from Part One of the Plan to Part Two of this
Plan and credit those amounts to the appropriate Sub-Accounts under Part Two of
this Plan, as selected by the Committee in its sole discretion. As a result of
such transfer and crediting, all of the Company’s obligations and Participant’s
rights with respect to the Transferred Amounts under Part One of the Plan, if
any, shall automatically be extinguished and become obligations and rights under
Part Two of this Plan without further action.

          10.2.          Transition Relief for Payment Elections. A Participant
designated by the Committee may, no later than a date specified by the Committee
(provided that such date occurs no later than December 31, 2008) elect on a form
provided by the Committee to (i) change the date of payment of his Sub-Accounts
to a date otherwise permitted for that Sub-Account under the Plan; or (ii)
change the form of payment of his Sub-Accounts to a form of payment otherwise
permitted for that Sub-Account under the Plan, without complying with the
special timing requirements of Section 6.1(c). A Participant designated by the
Committee may, no later than a date specified by the Committee (provided that
such date occurs no later than December 31, 2008) elect on a form provided by
the Committee to defer any Incentive Compensation designated by the Committee in
its sole discretion without complying with the special timing requirements for
Deferral Elections under Article III. Any such change or election shall be
subject to such terms and conditions as the Committee may specify in its sole
discretion. This Section 10.2 is intended to comply with the requirements of
Notice 2007-86 and the applicable proposed and final Treasury Regulations issued
under Section 409A of the Code and shall be interpreted in a manner consistent
with such intent.

          IN WITNESS WHEREOF, CH Energy Group, Inc. has caused this instrument
to be executed by its duly authorized officer on this ___ day of December, 2007.

 

 

 

 

CH ENERGY GROUP, INC.

 

 

 

 

 

 

 

By:

/s/Steven V. Lant

 

 

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

 

 

Steven V. Lant, Chairman, President and

 

 

Chief Executive Officer of CH Energy

 

 

Group, Inc.

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