EXHIBIT 10 (iii) 27


                     ADOPTION, ASSIGNMENT AND ASSUMPTION

                  LONG-TERM PERFORMANCE-BASED INCENTIVE PLAN


      Central Hudson Gas & Electric  Corporation  ("Assignor") hereby adopts the
Long-Term  Performance-Based  Incentive  Plan of the  Corporation,  pursuant  to
authorization of its Board of Directors by action taken on October 22, 1999, and
assigns  such  Plan,  in the form  attached  hereto,  to CH Energy  Group,  Inc.
("Assignee").

      Assignor and Assignee hereby agree as follows:

      Assignor  hereby  assigns all of its  interest and  obligations  under the
attached Plan to Assignee.  Assignee,  pursuant to authorization of its Board of
Directors  by action taken on November 2, 1999,  hereby  assumes all of Assignor
interest in and obligations under said Plan, as amended and restated,  effective
December 15, 1999.

                        CENTRAL HUDSON GAS & ELECTRIC CORPORATION

Dated: As of December 15, 1999

                        By:     /s/  Carl E. Meyer
                           -----------------------------------
                           Name:  Carl E. Meyer
                           Title: President and Chief Operating Officer



                        CH ENERGY  GROUP, INC.


Dated: As of December 15, 1999

                        By:     /s/  Paul J. Ganci
                           ----------------------------------
                           Name:  Paul J. Ganci
                           Title: Chairman of the Board, President and
                                  Chief Executive Officer







                                                           EXHIBIT 10 (iii) 27











                             CH ENERGY GROUP, INC.




                  LONG-TERM PERFORMANCE-BASED INCENTIVE PLAN


<PAGE>






                             CH ENERGY GROUP, INC.


                  LONG-TERM PERFORMANCE-BASED INCENTIVE PLAN




                       SECTION 1.   PURPOSE; DEFINITIONS

The Plan has been structured in accordance with the following principles for the
Corporation and its Affiliates:

      (1)   Establishing and maintaining  salaries of key executives,  including
            base compensation and short and long-term incentives, at competitive
            market levels,

      (2)   Establishing a portion of compensation that is "at risk" and tied to
            performance relative to specific  objectives.  The portion of salary
            "at risk" will be increased  from the 1999 level of a maximum of 10%
            of total  compensation for the Chairman of the Board,  President and
            Chief  Executive  Officer,  to a target  range of 15% to 30% for key
            executives; and

      (3)   The Plan establishes long-term incentives that include:

            (a)   Annual awards of performance  based shares that are awarded on
                  the basis of achieving  superior total  shareholder  return as
                  measured against an industry index; and

            (b)   Long-term   incentives  which  are  based  on  awarding  stock
                  options, the value of which are directly tied to the long-term
                  increased market value of the Corporation's common stock.

For purposes of the Plan, the following terms are defined as set forth below:

a.    "Affiliate"  means  a  corporation  or  other  entity  controlled  by  the
      Corporation and designated by the Committee, as defined in Section 2, from
      time to time as such.

b.    "Award" means a Stock Appreciation Right, Stock Option, Restricted Stock,
      Performance Share or Performance Unit.

c.    "Award Cycle" shall mean a period of consecutive  fiscal years or portions
      thereof  designated by the Committee over which Awards are to be earned or
      are to vest.

d.    "Board" means the Board of Directors of the Corporation.


                                                                               1

<PAGE>



e.    "Cause"  means (1)  conviction of a  participant  for  committing a felony
      under  federal law or the law of the state in which such action  occurred,
      (2)  dishonesty  in the course of  fulfilling a  participant's  employment
      duties or (3) willful and deliberate  failure on the part of a participant
      to perform employment duties in any material respect, or such other events
      as shall be determined by the Committee. The Committee shall have the sole
      discretion to determine  whether  "Cause"  exists,  and its  determination
      shall be final.

f.    "Change of Control" and "Change of Control Price" have the meanings set
      forth in Sections 10(b) and (c), respectively.

g.    "Code" means the Internal Revenue Code of 1986, as amended from time to
      time,and any successor thereto.

h.    "Commission" means the Securities and Exchange Commission or any successor
      agency.

i.    "Committee" means the Committee, as defined in Section 2.

j.    "Common Stock" means the common stock of the Corporation.

k.    "Corporation" means Central Hudson Gas & Electric Corporation,  a New York
      corporation  and upon the  assignment to and  assumption of the Plan by CH
      Energy Group, Inc., "Corporation" shall mean CH Energy Group, Inc.

l.    "Covered Employee" means a participant designated prior to the grant of an
      Award or Awards by the  Committee  who is or may be a  "covered  employee"
      within the meaning of Section  162(m)(3)  of the Code in the year in which
      an award or awards are expected to be taxable to such participant.

m.    "Disability" means permanent and total disability as determined under
      procedures established by the Committee for purposes of the Plan.

n.    "Early  Retirement"  means  retirement  from  active  employment  with the
      Corporation or an Affiliate pursuant to the early retirement provisions of
      the applicable pension plan of such employer.

o.    "Exchange Act" means the Securities Exchange Act of 1934, as amended from
      time to time, and any successor thereto.

p.    "Fair  Market  Value"  means,  as of any given date,  the mean between the
      highest and lowest reported sales prices of the Corporation's Common Stock
      on the New York Stock  Exchange  Composite  Tape or, if not listed on such
      exchange,  on any other national  securities  exchange on which the Common
      Stock is listed or on NASDAQ. If there is no regular public trading market
      for such Common Stock,  the Fair Market Value of the Common Stock shall be
      determined by the Committee in good faith.

q.    "Incentive  Stock  Option"  means  any Stock  Option  designated  as,  and
      qualified  as, an "Incentive  Stock Option"  within the meaning of Section
      422 of the Code.

                                                                               2

<PAGE>




r.    "Non-qualified Stock Option" means any Stock Option that is not an
      Incentive Stock Option.

s.    "Non-Employee  Director"  means a member of the Board who  qualifies  as a
      Non- Employee Director as defined in Rule  16b-3(b)(3),  as promulgated by
      the Commission under the Exchange Act, or any successor definition adopted
      by the Commission.

t.    "Normal Retirement" means retirement from active employment with the
      Corporation, or an Affiliate at or after age 65.

u.   "Performance  Goals" means the performance goals established by the
     Committee  prior to the grant of Restricted  Stock,  Performance  Shares or
     Performance  Units  that  are  based  on  the  attainment  of  one  or  any
     combination of the following:  Specified  levels of earnings per share from
     continuing operations, operating income, revenues, return on assets, return
     on equity,  return on invested capital,  shareholder value,  economic value
     added,  shareholder return (measured in terms of stock price  appreciation)
     and/or  total  shareholder   return  (measured  in  terms  of  stock  price
     appreciation  and/or  dividend  growth),   achievement  of  cost  controls,
     delivery cost per  Kilowatthour or delivery cost per Millions of Cubic Feet
     of natural gas,  customer  satisfaction  ratings,  frequency or duration of
     electric or gas service interruptions,  number of or severity of gas leaks,
     avoidance of environmental, public or employee safety problems, realization
     of the regulated return on equity, or the price of the Common Stock,  fixed
     on a company-wide basis or with reference to the Affiliate,  business unit,
     division  or  department  of  the  Corporation  for  or  within  which  the
     participant is primarily  employed,  and that are intended to qualify under
     Section  162(m)(4)(C) of the Code. Such Performance Goals also may be based
     upon attaining  specified  levels of  performance  under one or more of the
     measures described above relative to the performance of other corporations.
     Such Performance Goals shall be set by the Committee within the time period
     prescribed by Section 162(m) of the Code and related regulations.

v.    "Performance Units" or "Performance Shares" means awards made pursuant to
      Section 8 or Section 9 respectively.

w.    "Plan" means the Corporation's Long-Term Performance-Based Incentive Plan,
      as set forth herein and as hereinafter amended from time to time.

x.    "Restricted Stock" means an award granted under Section 7.

y.    "Retirement" means Normal or Early Retirement.

z.    "Rule 16b-3" means Rule 16b-3,  as  promulgated  by the  Commission  under
      Section 16(b) of the Exchange Act, as amended from time to time.

aa.   "Stock Appreciation Right" means a right granted under Section 6.

bb.   "Stock Option" means an option granted under Section 5.


                                                                               3

<PAGE>



cc.  "Termination of Employment" means the termination of the participant's
     employment with the Corporation and any Affiliate.  A participant  employed
     by an Affiliate  shall also be deemed to incur a Termination  of Employment
     if the Affiliate  ceases to be such an Affiliate and the  participant  does
     not immediately thereafter become an employee of the Corporation or another
     Affiliate.  Temporary absences from employment because of illness, vacation
     or leave of absence and  transfers  among the  Corporation  and  Affiliates
     shall not be considered Terminations of Employment.

In addition,  certain other terms used herein have definitions  given to them in
the first place in which they are used.


                          SECTION 2.   ADMINISTRATION

The  Corporation,  acting by and  through  its Board of  Directors,  shall  have
overall  responsibility  for the  operation  of the  Plan.  The  Plan  shall  be
administered by the Committee on Compensation and  Succession/Retirement or such
other  committee of the Board as the Board may from time to time  designate (the
"Committee"),  which  shall  be  composed  of not  less  than  two  Non-Employee
Directors,  each of whom  shall be  required  to be an  "outside  director"  for
purposes of Section  162(m)(4) of the Code,  and shall be appointed by and serve
at the pleasure of the Board.

The Committee shall have plenary authority to grant Awards pursuant to the terms
of the Plan to officers and employees of the Corporation and its Affiliates.

Among other things, the Committee shall have the authority, subject to the terms
of the Plan and subject to approval of the Board:

(a)   To select the officers and other employees of the Corporation and its
      Affiliates to whom Awards may from time to time be granted;

(b)   Determine whether and to what extent an Award or any combination of Awards
      are to be granted hereunder;

(c)   Determine the number of shares of Common Stock to be covered by each Award
      granted hereunder;

(d)   Determine  the  terms  and  conditions  of  any  Award  granted  hereunder
      (including,  but not  limited  to, the option  price  (subject  to Section
      5(a)),  any vesting  condition,  restriction  or limitation  (which may be
      related to the  performance  of the  participant,  the  Corporation or any
      Affiliate) and any vesting acceleration or forfeiture waiver regarding any
      Award and the  shares  of Common  Stock  relating  thereto,  based on such
      factors as the Committee shall determine;

(e)   Modify, amend or adjust the terms and conditions of any Award, at any time
      or from time to time,  including  but not  limited to  Performance  Goals;
      provided  however,  that the Committee  may not adjust  upwards the amount
      payable to a  designated  Covered  Employee  with  respect to a particular
      Award upon the satisfaction of applicable Performance Goals;

                                                                               4

<PAGE>



(f)   Determine  to what extent and under what  circumstances  Common  Stock and
      other amounts payable with respect to an Award shall be deferred; and

(g)   Determine under what circumstances and/or in what proportions an Award may
      be settled in cash or Common Stock under Sections 5(j) and 8(b)(i).

The  Committee  shall  have the  authority  to  adopt,  alter  and  repeal  such
administrative  rules,  guidelines and practices  governing the Plan as it shall
from time to time deem  advisable,  to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any  agreement  relating  thereto)
and to otherwise supervise the administration of the Plan.

The Committee  may act only by a majority of its members then in office,  except
that the members  thereof may (i) delegate to an officer of the  Corporation the
authority to make decisions pursuant to paragraphs (c), (f), (g), (h) and (i) of
Section 5  (provided  that no such  delegation  may be made that would cause any
Award or transaction  under the Plan to cease to be exempt from Section 16(b) of
the  Exchange  Act or cause any Award or payment  made in respect  thereof to be
"applicable  employee  remuneration" under Section 162(m)(4)(A) of the Code) and
(ii) authorize any one or more of their number or any officer of the Corporation
to execute and deliver documents on behalf of the Committee.

Any  determination  made by the  Committee  or pursuant to  delegated  authority
pursuant to the  provisions  of the Plan with respect to any Award shall be made
in the sole  discretion  of the  Committee  or such  delegate at the time of the
grant of the Award or, unless in  contravention of any express term of the Plan,
at any time thereafter. All decisions made by the Committee or any appropriately
delegated  officer  pursuant  to the  provisions  of the Plan shall be final and
binding on all persons, including the Corporation and Plan participants, subject
to the next paragraph.

The Committee annually shall report to the Corporation's Board of Directors with
respect to the operation of the Plan and at least  annually shall meet with such
Board to review the  Committee's  acts and  determinations  with  respect to the
Plan. The Board of Directors of the  Corporation  shall have the right to review
any  decision,  act or  determination  made by the  Committee and shall have the
right  to  amend,  modify,   reverse  or  rescind  any  such  decision,  act  or
determination,  which Board  action  shall be final and binding on all  persons,
including the Corporation and Plan participants.


                   SECTION 3.   COMMON STOCK SUBJECT TO PLAN

The total number of shares of Common  Stock  reserved  and  available  for grant
under the Plan shall be 500,000,  no more than 50,000 of which  shares  shall be
granted as Awards of Restricted Stock which do not have Performance Goals as the
sole or partial  conditions for vesting.  No  participant  may be granted Awards
covering in excess of 150,000  shares of Common Stock over the life of the Plan,
including  Awards that expire or  terminate  unexercised.  Shares  subject to an
Award under the Plan may be  authorized  and unissued  shares or may be treasury
shares or may be purchased on the open market or any combination thereof.

Any  shares  subject  to an Award  under the Plan,  which  Award for any  reason
expires or is terminated  unexercised as to such shares,  shall,  subject to the
provisions of the previous

                                                                               5

<PAGE>



paragraph that may restrict their reissuance to a particular participant,  again
be available for the grant of other Awards under the Plan.

Subject to Sections  7(c)(iv) and 9(b) (iii), if any shares of Restricted  Stock
or  Performance  Shares are  forfeited or if any Stock Option (and related Stock
Appreciation Right, if any) terminates without being exercised,  or if any Stock
Appreciation  Right is exercised for cash,  shares subject to such Awards shall,
subject  to the  provisions  of the first  paragraph  of this  section  that may
restrict their distribution to a particular participant,  again be available for
distribution in connection with Awards under the Plan.

In the event of any change in corporate capitalization, such as a stock split or
a  corporate  transaction,  such  as  any  merger,  consolidation,   separation,
including  a  spin-off,  or  other  distribution  of stock  or  property  of the
Corporation, any reorganization (whether or not such reorganization comes within
the  definition  of such  term in  Section  368 of the Code) or any  partial  or
complete liquidation of the Corporation ("Corporate Transaction"), the Committee
or Board may make such  substitution or adjustments in the aggregate  number and
kind of shares  reserved for issuance  under the Plan,  in the number,  kind and
option  price  of  shares  subject  to  outstanding   Stock  Options  and  Stock
Appreciation  Rights,  in the  number  and  kind  of  shares  subject  to  other
outstanding   Awards  granted  under  the  Plan  and/or  such  other   equitable
substitution  or  adjustments  as it may determine to be appropriate in its sole
discretion;  provided  however,  that the number of shares  subject to any Award
shall always be a whole number. Such adjusted option price shall also be used to
determine the amount payable by the  Corporation  upon the exercise of any Stock
Appreciation Right associated with any Stock Option.


                           SECTION 4.   ELIGIBILITY

Officers  and other  employees of the  Corporation  and its  Affiliates  who are
responsible  for  or  contribute  to  the  management,  governance,  growth  and
profitability  of the business of the Corporation or its Affiliates are eligible
to be granted Awards under the Plan. No grant shall be made under this Plan to a
director who is not an officer or a salaried  employee of the Corporation or its
Affiliates.


                          SECTION 5.   STOCK OPTIONS

Stock Options may be granted alone or in addition to other Awards  granted under
the Plan and may be of two types,  Incentive  Stock  Options  and  Non-qualified
Stock Options.  Any Stock Option granted under the Plan shall be in such form as
the Committee may from time to time approve.

The  Committee  shall have the authority to grant any optionee  Incentive  Stock
Options,  Non-qualified  Stock  Options or both types of Stock  Options (in each
case with or without Stock Appreciation  Rights);  provided however, that grants
hereunder  are  subject  to  the   aggregate   limit  on  grants  to  individual
participants set forth in Section 3. Incentive Stock Options may be granted only
to  employees  of the  Corporation  and its  Affiliates  (within  the meaning of
Section  424(f)  of the  Code).  To the  extent  that any  Stock  Option  is not
designated  as an  Incentive  Stock  Option  or even if so  designated  does not
qualify as an Incentive Stock Option, it shall constitute a Non-qualified  Stock
Option.

                                                                               6

<PAGE>



Stock Options shall be evidenced by option agreements,  the terms and provisions
of which may differ.  An option  agreement shall indicate on its face whether it
is intended to be an agreement for an Incentive  Stock Option or a Non-qualified
Stock  Option.  The grant of a Stock Option shall occur on the date on which the
Committee by resolution  selects an individual to be a participant  in any grant
of a Stock Option, determines the number of shares of Common Stock to be subject
to such Stock Option to be granted to such  individual  and  specifies the terms
and provisions of the Stock Option.  The Corporation  shall notify a participant
of any grant of a Stock  Option,  and a written  option  agreement or agreements
shall be duly executed and delivered by the Corporation to the participant. Such
agreement or agreements shall become effective upon execution by the Corporation
and the participant.

Anything  in the  Plan to the  contrary  notwithstanding,  no  term of the  Plan
relating to Incentive Stock Options shall be interpreted, amended or altered nor
shall any  discretion or authority  granted under the Plan be exercised so as to
disqualify the Plan under Section 422 of the Code or, without the consent of the
optionee  affected,  to disqualify any Incentive Stock Option under said Section
422.

Stock Options granted under the Plan shall be subject to the following terms and
conditions  and  shall  contain  such  additional  terms and  conditions  as the
Committee shall deem desirable:

(a)   Option Price. The option price per share of Common Stock purchasable under
      a Stock Option shall be  determined  by the Committee and set forth in the
      option agreement,  but shall not be less than the Fair Market Value of the
      Common Stock subject to the Stock Option on the date of grant.

(b)   Option  Term.  The  term  of each  Stock  Option  shall  be  fixed  by the
      Committee, but no Incentive Stock Option shall be exercisable more than 10
      years after the date on which the Stock Option is granted.

(c)   Exercisability.  Except as otherwise provided herein,  Stock Options shall
      be  exercisable  at such  time or times  and  subject  to such  terms  and
      conditions  as shall be  determined  by the  Committee.  If the  Committee
      provides that any Stock Option is exercisable  only in  installments,  the
      Committee may at any time waive such installment exercise  provisions,  in
      whole or in part, based on such factors as the Committee may determine. In
      addition,  the Committee may at any time accelerate the  exercisability of
      any Stock Option.

(d)   Method of  Exercise.  Subject to the  provisions  of this Section 5, Stock
      Options  may be  exercised,  in whole or in part,  at any time  during the
      option  term by giving  written  notice  of  exercise  to the  Corporation
      specifying  the  number of shares of  Common  Stock  subject  to the Stock
      Option to be purchased.

      Such notice shall be  accompanied by payment in full of the purchase price
      by certified or bank check or such other instrument as the Corporation may
      accept.  If approved by the  Committee,  payment,  in full or in part, may
      also be made in the form of unrestricted Common Stock already owned by the
      optionee  (based on the Fair Market  Value of the Common Stock on the date
      the Stock Option is exercised) and which has been held by the optionee for
      at least six (6) months; provided

                                                                               7

<PAGE>



      however,  that, in the case of an Incentive Stock Option the right to make
      a payment  in the form of  already  owned  shares  of Common  Stock may be
      authorized only at the time the Stock Option is granted.

      In the  discretion of the  Committee,  payment for any shares subject to a
      Stock Option may also be made by delivering a properly  executed  exercise
      notice  to  the   Corporation,   together  with  a  copy  of   irrevocable
      instructions to a broker to deliver promptly to the Corporation the amount
      of sale or loan proceeds to pay the purchase price, and, if requested,  by
      the amount of any federal,  state, local or foreign  withholding taxes. To
      facilitate the foregoing,  the  Corporation  may enter into agreements for
      coordinated procedures with one or more brokerage firms.

      In addition,  in the discretion of the  Committee,  payment for any shares
      subject to a Stock Option may also be made by instructing the Committee to
      withhold a number of such shares having a Fair Market Value on the date of
      exercise equal to the aggregate exercise price of such Stock Option.

      No shares of Common Stock shall be issued until full payment  therefor has
      been made. An optionee  shall have all of the rights of a  shareholder  of
      the  Corporation  holding  the class or series  of  Common  Stock  that is
      subject to such Stock Option (including, if applicable,  the right to vote
      the shares  and the right to receive  dividends),  when the  optionee  has
      given written notice of exercise, has paid in full for such shares and, if
      requested, has given the representation described in Section 13 (a).

(e)  Nontransferability  of  Stock  Options.  No  Stock  Option  shall  be
     transferable  by the  optionee  other  than  (i) by will or by the  laws of
     descent  and  distribution;  or (ii) in the case of a  Non-qualified  Stock
     Option, pursuant to (a) a qualified domestic relations order (as defined in
     the Code or Title I of the Employee Retirement Income Security Act of 1974,
     as  amended,  or the  rules  thereunder)  or (b) a gift to such  optionee's
     children,  whether  directly  or  indirectly  or by  means  of a  trust  or
     partnership  or  otherwise,  if expressly  permitted  under the  applicable
     option  agreement.  All Stock Options shall be exercisable,  subject to the
     terms of this Plan, during the optionee's lifetime, only by the optionee or
     by the guardian or legal  representative of the optionee or, in the case of
     a  Non-qualified  Stock  Option,  its  alternative  payee  pursuant to such
     qualified  domestic  relations  order or the recipient of a gift  permitted
     under the applicable option  agreement,  it being understood that the terms
     "holder" and "optionee"  include the guardian and legal  representative  of
     the optionee named in the option agreement and any person to whom an option
     is transferred by will or the laws of descent and  distribution  or, in the
     case of a Non-  qualified  Stock Option,  pursuant to a qualified  domestic
     relations order or a gift permitted under the applicable option agreement.

(f)   Termination by Death. Unless otherwise determined by the Committee,  if an
      optionee's employment terminates by reason of death, any Stock Option held
      by such optionee may thereafter be exercised in full,  whether or not then
      exercisable,  or on such accelerated basis as the Committee may determine,
      for a period of three (3) years (or such other period as the Committee may
      specify in the option  agreement) from the date of such death or until the
      expiration  of the stated term of such Stock Option,  whichever  period is
      the shorter.

                                                                               8

<PAGE>



(g)  Termination by Reason of Disability. Unless otherwise determined by the
     Committee,  if an optionee's employment terminates by reason of Disability,
     any Stock Option held by such  optionee may  thereafter be exercised by the
     optionee,  to the extent it was exercisable at the time of termination,  or
     on such accelerated  basis as the Committee may determine,  for a period of
     three (3) years (or such shorter period as the Committee may specify in the
     option  agreement) from the date of such termination of employment or until
     the expiration of the stated term of such Stock Option, whichever period is
     the  shorter;  provided  however,  that if the  optionee  dies  within such
     period,   any  unexercised  Stock  Option  held  by  such  optionee  shall,
     notwithstanding  the expiration of such period,  continue to be exercisable
     to the extent to which it was exercisable at the time of death for a period
     of one (1) year from the date of such death or until the  expiration of the
     stated term of such Stock Option,  whichever period is the shorter.  In the
     event of termination of employment by reason of Disability, if an Incentive
     Stock Option is exercised after the expiration of the exercise periods that
     apply for  purposes  of Section  422 of the Code,  such Stock  Option  will
     thereafter be treated as a Non-qualified Stock Option.

(h)  Termination by Reason of Retirement. Unless otherwise determined by the
     Committee,  if an optionee's employment terminates by reason of Retirement,
     any Stock Option held by such  optionee may  thereafter be exercised by the
     optionee,  to the extent it was exercisable at the time of such Retirement,
     or on such accelerated  basis as the Committee may determine,  for a period
     of five (5) years (or such shorter  period as the  Committee may specify in
     the option  agreement)  from the date of such  termination of employment or
     until the  expiration  of the stated term of such Stock  Option,  whichever
     period is the shorter;  provided however,  that if the optionee dies within
     such period,  any  unexercised  Stock Option held by such  optionee  shall,
     notwithstanding  the expiration of such period,  continue to be exercisable
     to the extent to which it was exercisable at the time of death for a period
     of twelve (12)  months from the date of such death or until the  expiration
     of the stated term of such Stock Option,  whichever  period is the shorter.
     In the event of termination  of employment by reason of  Retirement,  if an
     Incentive  Stock Option is exercised  after the  expiration of the exercise
     periods  that apply for  purposes  of Section  422 of the Code,  such Stock
     Option will thereafter be treated as a Non- qualified Stock Option.

(i)  Other Termination. Unless otherwise determined by the Committee: (A) If
     an optionee incurs a Termination of Employment for Cause, all Stock Options
     held by such optionee  shall  thereupon  terminate;  and (B) If an optionee
     incurs a  Termination  of  Employment  for any  reason  other  than  death,
     Disability  or  Retirement  or for  Cause,  any Stock  Option  held by such
     optionee,  to the extent then exercisable,  or on such accelerated basis as
     the Committee may  determine,  may be exercised for the lesser of three (3)
     months from the date of such  Termination  of  Employment or the balance of
     such Stock  Option's  term;  provided  however,  that if the optionee  dies
     within such three (3)-month  period,  any unexercised  Stock Option held by
     such  optionee  shall,  notwithstanding  the  expiration of such three (3)-
     month  period,  continue  to be  exercisable  to the extent to which it was
     exercisable at the time of death for a period of 12 months from the date of
     such death or until the expiration of the stated term of such Stock Option,
     whichever  period is the  shorter.  Notwithstanding  the  foregoing,  if an
     optionee incurs a Termination of Employment at or after a Change of Control
     (as defined Section 10(b)), other than

                                                                               9

<PAGE>



      by reason of death,  Disability  or  Retirement,  any Stock Option held by
      such optionee  shall be  exercisable  for the lesser of (1) six (6) months
      and one (1) day from the date of such  Termination of Employment,  and (2)
      the balance of such Stock  Option's  term. In the event of  Termination of
      Employment, if an Incentive Stock Option is exercised after the expiration
      of the  exercise  periods  that apply for  purposes  of Section 422 of the
      Code,  such Stock  Option will  thereafter  be treated as a  Non-qualified
      Stock Option.

(j)   Cashing Out of Stock Option.  Upon receipt of written  notice of exercise,
      the  Committee  may  elect to cash out all or part of the  portion  of the
      shares of Common  Stock for  which a Stock  Option is being  exercised  by
      paying the  optionee  an  amount,  in cash or Common  Stock,  equal to the
      excess of the Fair Market  Value of the Common Stock over the option price
      times the  number of shares of Common  Stock for which the Option is being
      exercised on the effective date of such cash-out.

(k)  Change of Control Cash-Out.  Notwithstanding any other provision of the
     Plan,  during the  60-day  period  from and after a Change of Control  (the
     "Exercise  Period"),  unless the Committee shall determine otherwise at the
     time of grant,  an optionee shall have the right,  whether or not the Stock
     Option is fully  exercisable  and in lieu of the  payment  of the  exercise
     price for the shares of Common Stock being purchased under the Stock Option
     and by giving  notice to the  Corporation,  to elect  (within the  Exercise
     Period) to surrender all or part of the Stock Option to the Corporation and
     to receive cash,  within 30 days of such notice,  in an amount equal to the
     amount by which the  Change of Control  Price per share of Common  Stock on
     the date of such  election  shall  exceed the  exercise  price per share of
     Common Stock under the Stock Option (the "Spread") multiplied by the number
     of shares of Common  Stock  granted  under the Stock Option as to which the
     right granted under this Section 5(k) shall have been exercised.

(l)  Notwithstanding anything in the Plan to the contrary, no Stock Option shall
     be reissued or repriced.


                     SECTION 6.  STOCK APPRECIATION RIGHTS

(a)   Grant  and  Exercise.   Stock  Appreciation   Rights  may  be  granted  in
      conjunction  with all or part of any Stock Option  granted under the Plan.
      In the case of a  Non-qualified  Stock Option,  such rights may be granted
      either at or after the time of grant of such Stock Option.  In the case of
      an Incentive Stock Option,  such rights may be granted only at the time of
      grant of such Stock Option. A Stock Appreciation Right shall terminate and
      no longer be exercisable  upon the  termination or exercise of the related
      Stock Option.

      A Stock  Appreciation  Right may be exercised by an optionee in accordance
      with Section 6(b) by  surrendering  the applicable  portion of the related
      Stock Option in accordance with  procedures  established by the Committee.
      Upon such  exercise  and  surrender,  the  optionee  shall be  entitled to
      receive an amount  determined  in the manner  prescribed  in Section 6(b).
      Stock  Options  which  have  been  so  surrendered   shall  no  longer  be
      exercisable to the extent the related Stock Appreciation  Rights have been
      exercised.

                                                                              10

<PAGE>



(b)   Terms and Conditions.  Stock Appreciation  Rights shall be subject to such
      terms and  conditions as shall be determined by the  Committee,  including
      the following:

      (i)   Stock Appreciation  Rights shall be exercisable only at such time or
            times and to the extent that the Stock  Options to which they relate
            are exercisable in accordance with the provisions Section 5 and this
            Section 6.

      (ii)  Upon the exercise of a Stock  Appreciation  Right, an optionee shall
            be entitled to receive an amount in cash,  shares of Common Stock or
            both,  equal in value to the excess of the Fair Market  Value of one
            share of Common Stock over the option  price per share  specified in
            the  related  Stock  Option  multiplied  by the  number of shares in
            respect  of which  the  Stock  Appreciation  Right  shall  have been
            exercised, with the Committee having the right to determine the form
            of payment.

      (iii) Stock  Appreciation  Rights shall be transferable  only to permitted
            transferees  of the  underlying  Stock  Option  in  accordance  with
            Section 5(e).

      (iv)  Upon the exercise of a Stock Appreciation Right, the Stock Option or
            part thereof to which such Stock Appreciation Right is related shall
            be deemed to have been  exercised for the purpose of the  limitation
            set forth in Section 3 on the number of shares of Common Stock to be
            issued  under the  Plan,  but only to the  extent  of the  number of
            shares  covered  by the  Stock  Appreciation  Right  at the  time of
            exercise based on the value of the Stock  Appreciation Right at such
            time.


                         SECTION 7.   RESTRICTED STOCK

(a)  Administration.  Shares of Restricted Stock may be awarded either alone
     or in addition to other Awards granted under the Plan. The Committee  shall
     determine  the officers  and other  employees  of the  Corporation  and its
     Affiliates  to whom and the time or times  at which  grants  of  Restricted
     Stock  will  be  awarded,  the  number  of  shares  to be  awarded  to  any
     participant  (subject  to the  aggregate  limit  on  grants  to  individual
     participants set forth in Section 3), the conditions for vesting,  the time
     or times  within  which such  Awards may be subject to  forfeiture  and any
     other terms and conditions of the Awards, in addition to those contained in
     Section 7(c).

      The Committee may, prior to grant,  condition  vesting of Restricted Stock
      upon the attainment of Performance  Goals.  The Committee may, in addition
      to requiring satisfaction of Performance Goals, condition vesting upon the
      continued  service of the participant.  The provisions of Restricted Stock
      Awards (including the applicable  Performance  Goals) need not be the same
      with respect to each recipient. All Performance Goals applicable to Awards
      of  Restricted  Stock  shall be approved  by the  Committee  in writing as
      required  by  Section  162(m) of the Code and the  rules  and  regulations
      thereunder  in order  for the  value  of the  Restricted  Stock  delivered
      pursuant to such Award to be deductible.

(b)   Awards and Certificates.  Shares of Restricted Stock shall be evidenced in
      such manner as the Committee may deem appropriate, including book- entry
      registration

                                                                              11

<PAGE>



      or issuance of one or more stock  certificates.  Any certificate issued in
      respect of shares of  Restricted  Stock shall be registered in the name of
      such  participant  and shall bear an appropriate  legend  referring to the
      terms, conditions and restrictions applicable to such Award, substantially
      in the following form:

         "THE  TRANSFERABILITY  OF THIS  CERTIFICATE  AND THE  SHARES  OF  STOCK
      REPRESENTED  HEREBY  ARE  SUBJECT TO THE TERMS AND  CONDITIONS  (INCLUDING
      FORFEITURE)  OF  CH  ENERGY  GROUP,  INC.  LONG-  TERM   PERFORMANCE-BASED
      INCENTIVE PLAN AND A RESTRICTED STOCK  AGREEMENT.  COPIES OF SUCH PLAN AND
      AGREEMENT  ARE ON FILE AT THE OFFICES OF THE SECRETARY OF CH ENERGY GROUP,
      INC., 284 SOUTH AVENUE, POUGHKEEPSIE, NEW YORK."

      The Committee may require that the certificates  evidencing such shares be
      held in custody by the Corporation  until the  restrictions  thereon shall
      have lapsed and that, as a condition of any Award of Restricted Stock, the
      participant  shall  have  delivered  a stock  power,  endorsed  in  blank,
      relating to the Common Stock covered by such Award.

(c)   Terms and Conditions.  Shares of Restricted Stock shall be subject to the
      following terms and conditions:

     (i)  Subject to the  provisions  of the Plan and the  Restricted  Stock
          Agreement referred to in Section 7(c)(vi),  during the period, if any,
          set by the Committee, commencing with the date of such Award for which
          such  participant's  continued  service is required (the  "Restriction
          Period"), and until the later of (i) the expiration of the Restriction
          Period and (ii) the date the applicable Performance Goals (if any) are
          satisfied,  the  participant  shall not be permitted to sell,  assign,
          transfer,  pledge or otherwise  encumber  shares of Restricted  Stock;
          provided,  that the  foregoing  shall not prevent a  participant  from
          pledging  Restricted Stock as security for a loan, the sole purpose of
          which is to provide  funds to pay the option price for Stock  Options.
          Within  these  limits,  the  Committee  may  provide  for the lapse of
          restrictions based upon period of service in installments or otherwise
          and may accelerate or waive, in whole or in part,  restrictions  based
          upon period of service or upon performance;  provided however, that in
          the case of Restricted Stock subject to Performance Goals granted to a
          participant  who is a Covered  Employee,  the  applicable  Performance
          Goals have been satisfied.

     (ii) Except as provided in this  paragraph  (ii) and Section  7(c)(i) and
          the Restricted  Stock  Agreement,  the participant  shall have, with
          respect to the shares of  Restricted  Stock,  all of the rights of a
          shareholder of the Corporation holding the class or series of Common
          Stock that is the subject of the  Restricted  Stock,  including,  if
          applicable,  the right to vote the  shares  and the right to receive
          any  cash  dividends.  If so  determined  by  the  Committee  in the
          applicable  Restricted  Stock Agreement and subject to Section 13(e)
          of the  Plan,  (1) cash  dividends  on the class or series of Common
          Stock that is the  subject of the  Restricted  Stock  Award shall be
          automatically  deferred  and  reinvested  in  additional  Restricted
          Stock,  held subject to vesting of the underlying  Restricted Stock,
          or held subject to

                                                                              12

<PAGE>



            meeting  Performance  Goals  applicable  only to dividends,  and (2)
            dividends  payable  in  Common  Stock  shall  be paid in the form of
            Restricted  Stock of the same class as the  Common  Stock with which
            such  dividend was paid,  held subject to vesting of the  underlying
            Restricted Stock,  and/or held subject to meeting  Performance Goals
            applicable only to dividends.

      (iii) Except to the extent otherwise provided in the applicable Restricted
            Stock Agreement and Sections 7(c)(i), 7(c)(iv) and 10(a)(ii), upon a
            participant's  Termination  of Employment  for any reason during the
            Restriction  Period or before the applicable  Performance  Goals are
            satisfied,   all  shares  still  subject  to  restriction  shall  be
            forfeited by the participant.

      (iv)  Except to the extent otherwise provided in Section 10(a)(ii), in the
            event that a participant retires or such participant's employment is
            involuntarily terminated (other than for Cause), the Committee shall
            have the  discretion  to  waive,  in  whole  or in part,  any or all
            remaining  restrictions (other than, in the case of Restricted Stock
            with  respect  to  which  a  participant  is  a  Covered   Employee,
            satisfaction  of  any  applicable   Performance   Goals  unless  the
            participant's  employment  is  terminated  by  reason  of  death  or
            Disability) with respect to any or all of such participant's  shares
            of Restricted Stock.

      (v)   If and when any applicable  Performance  Goals are satisfied and the
            Restriction  Period  expires  without  a  prior  forfeiture  of  the
            Restricted Stock,  unlegended  certificates for such shares shall be
            delivered  to  the  participant   upon  surrender  of  the  legended
            certificates.

      (vi)  Each Award shall be confirmed  by, and be subject to, the terms of a
            Restricted Stock Agreement.


                        SECTION 8.   PERFORMANCE UNITS

(a)  Administration.  Performance  Units may be awarded  either alone or in
     addition  to other  Awards  granted  under the Plan.  The  Committee  shall
     determine  the officers  and other  employees  of the  Corporation  and its
     Affiliates to whom and the time or times at which  Performance  Units shall
     be  awarded,  the  number  of  Performance  Units  to  be  awarded  to  any
     participant  (subject  to the  aggregate  limit  on  grants  to  individual
     participants  set forth in Section 3), the  duration of the Award Cycle and
     any other terms and conditions of the Award, in addition to those contained
     in Section 8(b).

     The Committee may, prior to grant, condition the settlement of Performance
     Units upon  continued  employment  and/or the  attainment  of  Performance
     Goals. The provisions of such Awards (including the applicable Performance
     Goals)  need  not  be  the  same  with  respect  to  each  recipient.  All
     Performance Goals applicable to Awards of Performance Units awarded during
     an Award Cycle shall be approved by the  Committee  in writing as required
     by Section 162(m) of the Code and the rules and regulations  thereunder in
     order for the cash and/or property  delivered pursuant to such Award to be
     deductible.


                                                                              13

<PAGE>



(b)   Terms and Conditions.  Performance Units Awards shall be subject to the
      following terms and conditions:

     (i)  Subject to the  provisions of the Plan and the  Performance  Units
          Agreement  referred to in Section 8(b)(vi),  Performance Units may not
          be sold, assigned, transferred, pledged or otherwise encumbered during
          the Award Cycle.  At the expiration of the Award Cycle,  the Committee
          shall  evaluate  the   Corporation's   performance  in  light  of  the
          Performance Goals for such Award to the extent  applicable,  and shall
          determine the value of  Performance  Units granted to the  participant
          which have been earned,  and the  Committee  may then elect to deliver
          (1) the cash amount  equal to the value and number of the  Performance
          Units  determined  by the  Committee to have been  earned,  or (2) the
          number of shares of Common  Stock whose Fair Market  Value is equal to
          cash  value and  number of the  Performance  Units  determined  by the
          Committee to have been earned the  participant.  The maximum  value of
          cash and/or  property that any participant may receive with respect to
          Performance Units in any year is $600,000.

     (ii) Except  to  the  extent   otherwise   provided  in  the   applicable
          Performance  Unit Agreement and Sections  8(b)(iii) and  10(a)(iii),
          upon a participant's Termination of Employment for any reason during
          the  Award  Cycle or before  any  applicable  Performance  Goals are
          satisfied, the rights to the shares still covered by the Performance
          Units Award shall be forfeited by the participant.

      (iii) Except to the extent otherwise  provided in Section  10(a)(iii),  in
            the event that a participant's  employment is terminated (other than
            for  Cause) or in the event a  participant  retires,  the  Committee
            shall have the discretion to waive,  in whole or in part, any or all
            remaining   payment   limitations   (other  than,  in  the  case  of
            Performance  Units with respect to which a participant  is a Covered
            Employee,  satisfaction of any applicable  Performance  Goals unless
            the  participant's  employment  is  terminated by reason of death or
            Disability)  with  respect  to  any or  all  of  such  participant's
            Performance Units.

      (iv)  A participant  may elect to further defer receipt of the Performance
            Units payable under an Award (or an  installment  of an Award) for a
            specified period or until a specified event, subject in each case to
            the Committee's  approval and to such terms as are determined by the
            Committee  (the  "Elective  Deferral  Period").  Such  election must
            generally be made prior to  commencement  of the Award Cycle for the
            Award (or for such installment of an Award).

      (v)   If and when any applicable  Performance  Goals are satisfied and the
            Elective  Deferral Period expires without a prior  forfeiture of the
            Performance Units, payment in accordance with Section 8(b)(i) hereof
            shall be made to the participant.

      (vi)  Each Award shall be confirmed  by, and be subject to, the terms of a
            Performance Unit Agreement.



                                                                              14

<PAGE>



                        SECTION 9.   PERFORMANCE SHARES

(a)  Administration.  Performance  Shares may be awarded either alone or in
     addition  to other  Awards  granted  under the Plan.  The  Committee  shall
     determine  the officers  and other  employees  of the  Corporation  and its
     Affiliates to whom and the time or times at which Performance  Shares shall
     be  awarded,  the  number  of  Performance  Shares  to be  awarded  to  any
     participant  (subject  to the  aggregate  limit  on  grants  to  individual
     participants  set forth in Section 3), the  duration of the Award Cycle and
     any other terms and conditions of the Award, in addition to those contained
     in Section 9(b).

      The Committee may, prior to grant, condition the settlement of Performance
      Shares upon  continued  employment  and/or the  attainment of  Performance
      Goals. The provisions of such Awards (including the applicable Performance
      Goals)  need  not  be  the  same  with  respect  to  each  recipient.  All
      Performance  Goals  applicable  to Awards of  Performance  Shares  awarded
      during an Award Cycle shall be  approved  by the  Committee  in writing as
      required  by  Section  162(m) of the Code and the  rules  and  regulations
      thereunder in order for the property  delivered  pursuant to such Award to
      be deductible by the Corporation under the Code.

(b)   Terms and Conditions.  Performance Shares Awards shall be subject to the
      following terms and conditions:

      (i) Subject to the provisions of the Plan and the  Performance  Shares
          Agreement referred to in Section 9(b)(vi),  Performance Shares may not
          be sold, assigned, transferred, pledged or otherwise encumbered during
          the Award Cycle.  At the expiration of the Award Cycle,  the Committee
          shall  evaluate  the   Corporation's   performance  in  light  of  the
          Performance Goals for such Award to the extent  applicable,  and shall
          determine the value and number of  Performance  Shares and  associated
          reinvested  dividends earned by the  participant.  If so determined by
          the  Committee in the  applicable  Performance  Shares  Agreement  and
          subject to Section 13(e) of the Plan,  (1) cash dividends on the class
          or series of Common Stock that is the subject of the Performance Share
          Award shall be  automatically  deferred and  reinvested  in additional
          shares of Common  Stock,  held  subject to  vesting of the  underlying
          Performance Shares, or held subject to meeting Performance Goals , and
          (2)  dividends  payable in Common  Stock  shall be paid in the form of
          shares of Common  Stock of the same  class as the  Common  Stock  with
          which  such  dividend  was  paid,  held  subject  to  vesting  of  the
          underlying   Performance  Shares,  or  held  subject  to  meeting  the
          Performance  Goals. The maximum value of property that any participant
          may  receive  with  respect  to  Performance  Shares  in any  year  is
          $600,000.  Delivery  to the  participant  will be in  shares of Common
          Stock only.

      (ii)Except  to  the  extent   otherwise   provided  in  the   applicable
          Performance  Unit Agreement and Sections  9(b)(iii) and  10(a)(iii),
          upon a participant's Termination of Employment for any reason during
          the  Award  Cycle or before  any  applicable  Performance  Goals are
          satisfied, the rights to the shares still covered by the Performance
          Shares Award shall be forfeited by the participant.

                                                                              15

<PAGE>



      (iii) Except to the extent otherwise  provided in Section  10(a)(iii),  in
            the event that a participant's  employment is terminated (other than
            for  Cause) or in the event a  participant  retires,  the  Committee
            shall have the discretion to waive,  in whole or in part, any or all
            remaining   payment   limitations   (other  than,  in  the  case  of
            Performance  Shares with respect to which a participant is a Covered
            Employee,  satisfaction of any applicable  Performance  Goals unless
            the  participant's  employment  is  terminated by reason of death or
            Disability)  with  respect  to  any or  all  of  such  participant's
            Performance Shares.

      (iv)  A participant  may elect to further defer receipt of the Performance
            Shares  payable under an Award (or an installment of an Award) for a
            specified period or until a specified event, subject in each case to
            the Committee's  approval and to such terms as are determined by the
            Committee (the "Elective  Deferral  Period").  Such election must be
            made prior to  commencement of the Award Cycle for the Award (or for
            such installment of an Award).

      (v)   If and when any applicable  Performance  Goals are satisfied and the
            Elective  Deferral Period expires without a prior  forfeiture of the
            Performance  Shares,  payment in  accordance  with  Section  9(b)(i)
            hereof shall be made to the participant.

      (vi)  Each Award shall be confirmed  by, and be subject to, the terms of a
            Performance Unit Agreement.


                  SECTION 10.   CHANGE OF CONTROL PROVISIONS

(a)   Impact of Event. Notwithstanding any other provision of the Plan to the
      contrary, in the event of a Change of Control:

      (i)   Any Stock Options and Stock  Appreciation  Rights  outstanding as of
            the date such Change of Control is determined to have occurred,  and
            which  are not then  exercisable  and  vested,  shall  become  fully
            exercisable and vested to the full extent of the original grant.

      (ii)  The  restrictions  and  deferral   limitations   applicable  to  any
            Restricted Stock shall lapse, and such Restricted Stock shall become
            free of all restrictions and become fully vested and transferable to
            the full extent of the original grant.

      (iii) All Performance  Shares shall be considered to be earned and payable
            to the extent that any  Performance  Goals which the Committee shall
            establish  have  been met or  exceeded,  and any  deferral  or other
            restriction shall lapse and such Performance Shares shall be settled
            in cash as promptly as is practicable.

(b)   Definition of Change of Control.  For purposes of the Plan, a "Change of
      Control" shall mean the happening of any of the following events:


                                                                              16

<PAGE>



   (i)    The  acquisition  by any  individual,  entity or group (within the
          meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
          of 1934, as amended (the  "Exchange  Act")) (a "Person") of beneficial
          ownership  (within  the  meaning of Rule 13d-3  promulgated  under the
          Exchange Act) of 50% or more of either (1) the then outstanding shares
          of  Common  Stock of the  Corporation  (the  "Outstanding  Corporation
          Common  Stock")  or  (2)  the  combined   voting  power  of  the  then
          outstanding  voting  securities  of the  Corporation  entitled to vote
          generally in the election of directors (the  "Outstanding  Corporation
          Voting  Securities");  provided,  however,  that for  purposes of this
          subsection  (i), the  following  acquisitions  shall not  constitute a
          Change of Control;  (1) any acquisition directly from the Corporation,
          (2) any acquisition by the  Corporation,  or (3) any acquisition by an
          employee  benefit plan (or related  trust)  sponsored or maintained by
          the Corporation or any corporation controlled by the Corporation.

   (ii)   Approval  by the  shareholders  of  the  Corporation  of a  complete
          liquidation or dissolution of the  Corporation or the sale of all or
          substantially  all of the  assets of the  Company  or the  merger or
          consolidation of the Corporation with or into another corporation.

(c)  Change of Control Price.  For purposes of the Plan,  "Change of Control
     Price" means the higher of (i) the highest  reported  sales price,  regular
     way, of a share of Common Stock in any transaction reported on the New York
     Stock  Exchange  Composite  Tape or other  national  exchange on which such
     shares  are  listed or on NASDAQ  during  the  60-day  period  prior to and
     including  the date of a Change of Control or (ii) if the Change of Control
     is the result of a tender or exchange offer or a Corporate Transaction, the
     highest  price per share of Common  Stock paid in such  tender or  exchange
     offer  or  Corporate  Transaction;  provided  however,  that in the case of
     Incentive Stock Options and Stock Appreciation Rights relating to Incentive
     Stock  Options,  the Change of Control Price shall be in all cases the Fair
     Market Value of the Common Stock on the date such Incentive Stock Option or
     Stock Appreciation Right is exercised. To the extent that the consideration
     paid in any such  transaction  described  above  consists all or in part of
     securities or other non- cash  consideration,  the value of such securities
     or other noncash  consideration  shall be determined in the sole discretion
     of the Board.


                 SECTION 11.   TERM, AMENDMENT AND TERMINATION

The Plan will  terminate 10 years after the effective  date of the Plan.  Awards
outstanding as of such date shall not be affected or impaired by the termination
of the Plan.

The Board may amend, alter or discontinue the Plan, but no amendment, alteration
or  discontinuation  shall be made  which  would  (i)  impair  the  rights of an
optionee  under a Stock  Option or a recipient  of a Stock  Appreciation  Right,
Restricted  Stock  Award,  Performance  Share  Award or  Performance  Unit Award
therefore granted without the optionee's or recipient's consent,  except such an
amendment  made to cause the Plan to qualify for the exemption  provided by Rule
16b-3, or (ii)  disqualify the Plan or any Award or transaction  thereunder from
the exemption  provided by Rule 16b-3.  In addition,  no such amendment shall be
made without the approval of the Corporation's shareholders to the

                                                                              17

<PAGE>



extent such approval is required by law, regulation or agreement.

The Committee may amend the terms of any Stock Option or other Award theretofore
granted, prospectively or retroactively,  but no such amendment shall impair the
rights of any holder without the holder's  consent except such an amendment made
to cause the Plan,  or Award,  transaction  or payment  made under the Plan,  to
qualify for the exemption provided by Rule 16b-3 and any such amendment shall be
subject to Section 2(e) hereof.

Subject to the above  provisions,  the Board shall have  authority  to amend the
Plan to take into account changes in law and tax and accounting rules as will as
other developments,  and to grant Awards which qualify for beneficial  treatment
under such rules with shareholder approval.


                     SECTION 12.   UNFUNDED STATUS OF PLAN

It is presently  intended that the Plan shall  constitute an "unfunded" plan for
incentive and deferred compensation. The Committee may authorize the creation of
trusts or other  arrangements to meet the obligations  created under the Plan to
deliver  Common  Stock or make  payments;  provided  however,  that  unless  the
Committee  otherwise   determines,   the  existence  of  such  trusts  or  other
arrangements is consistent with the "unfunded" status of the Plan.


                       SECTION 13.   GENERAL PROVISIONS

(a)   The  Committee  may require each person  purchasing  or  receiving  shares
      pursuant to an Award to  represent  to and agree with the  Corporation  in
      writing  that such person is  acquiring  the shares  without a view to the
      distribution  thereof.  The  certificates  for such shares may include any
      legend which the Committee deems  appropriate to reflect any  restrictions
      on transfer.

      Notwithstanding  any  other  provision  of the  Plan  or  agreements  made
      pursuant  thereto,  the  Corporation  shall  not be  required  to issue or
      deliver any certificate or  certificates  for shares of Common Stock under
      the Plan prior to fulfillment of all of the following conditions:

      (1)   Listing or approval for listing upon notice of issuance of such
            shares on the New York Stock Exchange,Inc., or such other securities
            exchange as may at the time be the principal market for the Common
            Stock;

      (2)   Any  registration  or  other  qualification  of such  shares  of the
            Corporation  under  any  state  or  federal  law or  regulation,  or
            maintaining in effect any such  registration or other  qualification
            which the  Committee  shall,  in its  absolute  discretion  upon the
            advice of counsel, deem necessary or advisable; and

      (3)   Obtaining  any other  consent,  approval or permit from any state or
            federal  governmental  agency  which  the  Committee  shall,  in its
            absolute discretion after receiving the advice of counsel, determine
            to be necessary or advisable.

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(b)   Nothing  contained  in the  Plan  shall  prevent  the  Corporation  or any
      Affiliate from adopting other or additional compensation  arrangements for
      its employees.

(c)   Neither  adoption of the Plan nor the grant or any Award  thereunder shall
      confer upon any employee any right to continued  employment,  nor shall it
      interfere in any way with the right of the Corporation or any Affiliate to
      terminate the employment of any employee at any time.

(d)  No later than the date as of which an amount first  becomes  includible
     in the gross income of the participant for federal income tax purposes with
     respect  to any  Award  under the Plan,  the  participant  shall pay to the
     Corporation, or make arrangements satisfactory to the Corporation regarding
     the  payment of, any  federal,  state,  local or foreign  taxes of any kind
     required  by law  to be  withheld  with  respect  to  such  amount.  Unless
     otherwise  determined by the  Corporation,  withholding  obligations may be
     settled with Common Stock, including Common Stock that is part of the Award
     that gives rise to the  withholding  requirement.  The  obligations  of the
     Corporation  under  the Plan  shall be  conditioned  upon such  payment  or
     arrangements,  and the Corporation and its Affiliates  shall, to the extent
     permitted by law,  have the right to deduct any such taxes from any payment
     otherwise  due  to  the  participant.  The  Committee  may  establish  such
     procedures as it deems appropriate, including making irrevocable elections,
     for settlement of withholding obligations with Common Stock.

(e)   Reinvestment  of dividends in additional  Restricted  Stock or Performance
      Shares at the time of any dividend  payment shall only be  permissible  if
      sufficient  shares of Common Stock are available  under Section 3 for such
      reinvestment (taking into account then outstanding Stock Options and other
      Awards).

(f)   The Committee shall establish such procedures as it deems  appropriate for
      a participant  to designate a beneficiary  to whom any amounts  payable in
      the event of the participant's  death are to paid or by whom any rights of
      the participant, after the participant's death, may be exercised.

(g)   In the case of a grant of an Award to any  employee of an Affiliate of the
      Corporation,  the Corporation  may, if the Committee so directs,  issue or
      transfer the shares of Common Stock,  if any,  covered by the Award to the
      Affiliate,  for such lawful  consideration  as the  Committee may specify,
      upon the condition or  understanding  that the Affiliate will transfer the
      shares of Common Stock to the employee in accordance with the terms of the
      Award specified by the Committee pursuant to the provisions of the Plan.

(h)   Notwithstanding the foregoing,  if any right granted pursuant to this Plan
      would   make   a   Change   of   Control   transaction    ineligible   for
      pooling-of-interests accounting under APB No.16 that but for the nature of
      such grant would otherwise be eligible for such accounting treatment,  the
      Committee  shall  have the  ability  to  substitute  for any cash  payable
      pursuant to such right  Common Stock with a Fair Market Value equal to the
      cash that would otherwise be payable hereunder.

(i)   Notwithstanding  anything  in this Plan to the  contrary,  no  transaction
      between a participant and the Corporation  that requires as a condition of
      its exemption from

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      Section  16 of the  Exchange  Act  approval  in the  manner  set  forth in
      paragraph  (d)(1) or (d)(2) of Rule 16b-3 shall be consummated  until such
      approval is obtained;  but failure to obtain such approval shall not cause
      a transaction  consummated  to be void or voidable  without the consent of
      such  participant nor shall it disqualify the transaction from the benefit
      of any of available exemption from said Section 16.

(j)  Unless the Committee shall otherwise  determine or any provision of the
     Plan shall  otherwise  specifically  require,  no  delivery  of cash and/or
     property shall be made to any "covered  employee",  as that term is defined
     in Section  162(m)(3) of the Code,  or any  transferee to whom the right of
     such  covered  employee  to  receive  such cash  and/or  property  has been
     transferred as the result of a transfer  permitted by the Plan, in any year
     to the extent that the value such cash and/or  property,  together with the
     value of all other cash and/or property  delivered to such covered employee
     or transferee in such year, shall not be deductible by the Corporation as a
     result of the  operation  of Section  162(m) of the Code.  Any cash  and/or
     property  not  deliverable  because  of the  application  of  the  previous
     sentence  shall be  delivered  together  with the value of all  other  cash
     and/or  property  delivered to such covered  employee or transferee in such
     year, is so  deductible,  until such cash and/or  property  shall have been
     delivered  in full.  Such  undelivered  cash  and/or  property  shall  bear
     interest  from  the  date  on  which  it was  first  payable,  but  for the
     application  of this Section (j), until paid in full, at a rate of interest
     per annum to be determined  by the  Committee in accordance  with any rules
     adopted  under said Section 162. For purposes of computing  such  interest,
     the Committee  shall  determine the value of such property,  based upon (i)
     its Fair Market  Value  (adjusted  as the  Committee  shall see fit, but at
     least quarterly) if it is Common Stock or if its value is determinable with
     reference  to the  price of  Common  Stock or (ii) as the  Committee  shall
     determine in all other  cases.  This Section (j) shall cease to have effect
     upon the occurrence of a Change of Control and the Plan shall thereafter be
     construed  as if this  Section (j) had never been part  thereof,  except in
     respect of the obligation of the  Corporation  to pay interest  pursuant to
     the provisions of this Section (j); without limiting the generality of this
     sentence, (i) all property deliverable as a result of such occurrence shall
     be delivered  when due as if this Section (j) were not part of the Plan and
     (ii) all property deliverable,  but for the provisions of this Section (j),
     shall  become  deliverable  upon such  Change  of  Control,  together  with
     interest accrued thereon.

(k)   The Plan  and all  Awards  made  and  actions  taken  thereunder  shall be
      governed by and construed in accordance  with the laws of the State of New
      York, without reference to principles of conflict of laws.


               SECTION 14. EFFECTIVE DATE - SHAREHOLDER APPROVAL

The Plan shall  become  effective on January 1, 2000,  subject to obtaining  the
approval of the  shareholders  of the  Corporation  as required by Code  Section
422(b) and Rule 16 b- 3(d)(2) of the Exchange Act.

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