Exhibit (10)(iii)32 AMENDED
AND RESTATED
EMPLOYMENT AGREEMENT AGREEMENT
by and between CH Energy Group Inc. (Energy Group), a New York corporation,
and Steven V. Lant (the Executive), dated as of the 1st day of January, 2008. The
Board of Directors of Energy Group (the Board) has determined that it is in
the best interests of Energy Group and its shareholders to assure that Energy
Group will have the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of
Energy Group. The Board believes it is impeto diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executives full attention and dedication to Energy Group currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
which ensure that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board has caused Energy
Group to enter into this Agreement with the Executive. NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: 1.          This
Employment Agreement shall be between Energy Group and the Executive named
above for all periods during which the Executive serves in the capacity as an
officer of Energy Group or any of its affiliated companies. Energy Group and
the Executive are parties to an Employment Agreement dated as of July 31, 2005
(the Original Agreement). Energy Group and the Executive hereby amend and restate
the Original Agreement so that this Agreement replaces and supersedes the
Original Agreement in its entirety. 2.          Certain
Definitions. (a)          As
used in this Agreement, Energy Group shall mean CH Energy Group, Inc. as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise. (b)          As
used in this Agreement, the term affiliated companies shall include any
company controlled by, controlling or under common control with Energy Group. (c)          The
Effective Date shall mean the first date during the Change of Control Period
(as defined in Section 2(d)) on which a Change of Control (as defined in
Section 3) occurs. Anything in this Agreement to the contrary notwithstanding,
if a Change of Control occurs and if the Executives employment with Energy
Group or any of its affiliated companies is terminated prior to the date on
which the Change of Control occurs, and if it is reasonably demonstrated by the
Executive that such termination of employment (i) was at the request of a third
party who has taken steps reasonably calculated to effect a Change of Control
or (ii)   otherwise
arose in connection with or anticipation of a Change of Control, then for all
purposes of this Agreement the Effective Date shall mean the date immediately
prior to the date of such termination of employment, and the Executive shall be
entitled to all payments and benefits under this Agreement as though the
Executive had terminated his employment for Good Reason. For purposes of the
immediately preceding sentence, a Change of Control means a Change of Control
that also constitutes 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 Energy Group within the meaning of Section 409A of the Internal Revenue Code
of 1986, as amended (the Code). For purposes of determining the timing of
payments and benefits to Executive under Section 7, the date of the actual
Change of Control (as defined in the immediately preceding sentence) shall be
treated as Executives Date of Termination (in lieu of the date set forth in
Section 6(e)).

(d)          The
Change of Control Period shall mean the period commencing on the date hereof
and ending on the following July 31, which July 31 and each annual anniversary
thereof shall be hereinafter referred to as the Renewal Date. Unless
previously terminated, the Change of Control Period shall be automatically
extended so as to terminate one year from such Renewal Date. Notwithstanding
the foregoing, this Agreement may be terminated by either the Executive or
Energy Group or any of its affiliated companies at any time prior to the
Effective Date by providing 60 days written notice to the other party, in
which case the Executive shall have no further rights under this Agreement; provided,
that such a notice shall be null and void if it is reasonably demonstrated by
the Executive that such notice was given (i) at the request of a third party
who has taken steps reasonably calculated to effect a Change of Control or (ii)
otherwise in connection with or anticipation of a Change of Control.

(e)          The
Multiple shall mean (i) three if the Executives Date of Termination (as
defined herein) occurs on or prior to the first anniversary of the Effective
Date, (ii) two if the Executives Date of Termination occurs after the first
anniversary of the Effective Date but on or prior to the second anniversary of
the Effective Date, and (iii) one if the Executives Date of Termination occurs
after the second anniversary of the Effective Date but on or prior to the third
anniversary of the Effective Date.

3.          Change
of Control. For the purpose of this Agreement, a Change of Control shall
mean:

(a)          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 20% or more of either (x) the
then outstanding shares of common stock of Energy Group (the Outstanding
Energy Group Common Stock) or (y) the combined voting power of the then
outstanding voting securities of Energy Group entitled to vote generally in the
election of directors (the Outstanding Energy Group Voting Securities);
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from Energy Group, (ii) any acquisition by Energy Group, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by Energy Group or its affiliated companies or (iv) any acquisition
by any

2

corporation
pursuant to a transaction which complies with clauses (i), (ii) and (iii) of
subsection (c) of this Section 3; or

(b)          Individuals
who, as of the date hereof, constitute the Board (the Incumbent Board) cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by Energy Groups shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or

(c)          Consummation
of a reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of Energy Group (a Business
Combination), in each case, unless, following such Business Combination, (i)
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Energy Group Common Stock and
Outstanding Energy Group Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns Energy Group or all or
substantially all of Energy Groups assets either directly or through one or
more of its affiliated companies) in substantially the same proportions as
their ownership, immediately prior to such Business Combination of the
Outstanding Common Stock and Outstanding Energy Group Voting Securities, as the
case may be, (ii) no Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan (or related trust) of Energy
Group or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (iii) at least a majority of the
members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing
for such Business combination; or

(d)          Approval
by the shareholders of Energy Group of a complete liquidation or dissolution of
Energy Group.

4.          Employment
Period. Energy Group hereby agrees to continue, or cause to be continued,
the Executive in its employ, or in the employ of any of its affiliated
companies, and the Executive hereby agrees to remain in the employ of Energy
Group or any of its affiliated companies subject to the terms and conditions of
this Agreement, for the period commencing on the Effective Date and ending on
the third anniversary of such date (the Employment Period).

3

5.          Terms of Employment.

(a)          Position
and Duties.

(i)          During
the Employment Period, the Executives authority, duties and responsibilities
shall, in the aggregate, be at least commensurate in all material respects with
the most significant of those exercised and assigned at any time during the
120-day period immediately preceding the Effective Date, and neither a reduced
scope of the Executives responsibilities resulting from the fact that the
Change of Control has created a larger organization, nor a change in the
Executives position (including status, offices, titles and reporting
requirements) shall be the sole basis for determining whether the requirements
of this Section 5(a)(i) are met.

(ii)          During
the Employment Period, the Executives services shall be performed at the location
where the Executive was employed immediately preceding the Effective Date or
any office or location less than 50 miles from such location.

(iii)          During
the Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote reasonable
attention and time during normal business hours to the business and affairs of
Energy Group or any of its affiliated companies and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executives reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to serve on civic or charitable boards or
committees, so long as such activities do not significantly interfere with the
performance of the Executives responsibilities as an employee of Energy Group
or any of its affiliated companies in accordance with this Agreement. It is
expressly understood and agreed that to the extent that any such activities
have been conducted by the Executive prior to the Effective Date, the continued
conduct of such activities (or the conduct of activities similar in nature and
scope thereto) subsequent to the Effective Date shall not thereafter be deemed
to interfere with the performance of the Executives responsibilities to Energy
Group or any of its affiliated companies.

(b)          Compensation.

(i)          Base
Salary. During the Employment Period, the Executive shall receive an annual
base salary (Annual Base Salary), which shall be paid at a monthly rate, at
least equal to twelve times the highest monthly base salary paid or payable,
including any base salary which has been earned but deferred, to the Executive
by Energy Group or any of its affiliated companies in respect of the
twelve-month period immediately preceding the month in which the Effective Date
occurs. During the Employment Period, the Annual Base Salary shall be reviewed
no more than 12 months after the last salary increase awarded to the Executive
prior to the Effective Date and thereafter at least annually. Any increase in
Annual Base Salary shall not serve to limit or reduce any other obligation to
the Executive under this Agreement. Annual Base Salary shall not be reduced
after any such increase and the term Annual Base Salary as used in this
Agreement shall refer to Annual Base Salary as so increased.

4

(ii)          Annual
Bonus. In addition to Annual Base Salary, the Executive shall be awarded,
for each fiscal year ending during the Employment Period, an annual bonus (the
Annual Bonus) in cash at least equal to the average of the bonuses payable
under Energy Groups Executive Annual Incentive Plan, if applicable, or any
comparable annual bonus under any predecessor or successor plan, for the last
three full fiscal years prior to the Effective Date, or if the Executive was
eligible to earn such a bonus for less than the last three full fiscal years,
for the fiscal years during which the Executive was eligible to earn such a
bonus immediately prior to the Effective Date (annualized in the event that the
Executive was not employed by Energy Group or its affiliated companies (or was
not eligible to earn such a bonus) for the whole of each such fiscal year) (the
Average Annual Bonus). If the Executive was not eligible to earn such an
annual bonus for any fiscal year ending on or before the Effective Date, then
the Average Annual Bonus shall be deemed to equal the Executives target annual
bonus as in effect immediately prior to the Effective Date. Each
such Annual Bonus shall be paid no later than two and one-half months after the
end of the fiscal year next following the fiscal year for which the Annual
Bonus is awarded.

(iii)          Incentive,
Savings and Retirement Plans. During the Employment Period, the Executive
shall be entitled to participate in all incentive, savings and retirement
plans, practices, policies and programs applicable generally to other peer
executives of Energy Group or its affiliated companies, but in no event shall
such plans, practices, policies and programs provide the Executive with
incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit opportunities, in
each case, less favorable, in the aggregate, than the most favorable of those
provided by Energy Group or its affiliated companies for the Executive under
such plans, practices, policies and programs as in effect at any time during
the 120-day period immediately preceding the Effective Date or if more
favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of Energy Group or its affiliated
companies.

(iv)          Welfare
Benefit Plans. During the Employment Period, the Executive and/or the
Executives family, as the case may be, shall be eligible for participation in
and shall receive all benefits under welfare benefit plans, practices, policies
and programs provided by Energy Group or its affiliated companies (including,
without limitation, medical, prescription, dental, disability, employee life,
group life, accidental death and travel accident insurance plans and programs)
to the extent applicable generally to other peer executives of Energy Group or
its affiliated companies, but in no event shall such plans, practices, policies
and programs provide the Executive with benefits which are less favorable, in
the aggregate, than the most favorable of such plans, practices, policies and
programs in effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive, those provided generally at any time after the Effective Date to
other peer executives of Energy Group or its affiliated companies.

(v)          Expenses.
During the Employment Period, the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive in
accordance with the most favorable policies, practices and procedures of Energy
Group or any

5

of its
affiliated companies in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of Energy Group or any of its affiliated companies.

(vi)          Fringe
Benefits. During the Employment Period, the Executive shall be entitled to
fringe benefits, including, without limitation, use of an automobile and
payment of related expenses, in accordance with the most favorable plans,
practices, programs and policies of Energy Group or any of its affiliated
companies in effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of Energy Group or any of its affiliated companies.

(vii)          Vacation.
During the Employment Period, the Executive shall be entitled to paid vacation
in accordance with the most favorable plans, policies, programs and practices
of Energy Group or any of its affiliated companies as in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally
at any time thereafter with respect to other peer executives of Energy Group or
any of its affiliated companies.

(viii)          Certain
Exclusions. In determining the benefits provided in subclauses (i) through
and including (viii) of this paragraph (b), there shall be excluded from
consideration any such benefits provided by any of the affiliated companies
during the measuring periods, if any, referred to in such subclauses if Energy
Group has elected not to enter into Employment Agreements (of this Type) with
executives of such affiliated companies.

6.          Termination
of Employment.

(a)       Death
or Disability. The Executives employment shall terminate automatically
upon the Executives death during the Employment Period. If Energy Group or any
of its affiliated companies determines in good faith that the Disability of the
Executive has occurred during the Employment Period (pursuant to the definition
of Disability set forth below), it may give to the Executive written notice in
accordance with Section 16(b) of this Agreement of its intention to terminate
the Executives employment; provided that such notice is provided no later than
9 months following the Executives first day of Disability. In such event, the Executives
employment with Energy Group or any of its affiliated companies shall terminate
effective on the 30th day after receipt of such notice by the Executive (the
Disability Effective Date), provided that, within the 30 days after such
receipt, the Executive shall not have returned to full-time performance of the
Executives duties. For purposes of this Agreement, Disability shall mean the
absence of the Executive from the Executives duties with Energy Group or any
of its affiliated companies on a full-time basis for at least 180 consecutive
business days as a result of any medically determinable physical or mental
impairment resulting in the Executives inability to perform the duties of his
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. The determination of Disability shall be made by a
physician

6

selected by
Energy Group or its insurers and acceptable to the Executive or the Executives
legal representative.

(b)        Cause.
The Executives employment during the Employment Period may be terminated for
Cause. For purposes of this Agreement, Cause shall mean:

(i)          the
 willful and continued failure of the Executive to perform substantially the
 Executives duties with Energy Group or any of its affiliated companies (other
 than any such failure resulting from incapacity due to physical or mental
 illness), after a written demand for substantial performance is delivered to
 the Executive by the Board or the Chief Executive Officer of Energy Group
 which specifically identifies the manner in which the Board or Chief
 Executive Officer believes that the Executive has not substantially performed
 the Executives duties;(ii)          the
 willful engaging by the Executive in illegal conduct or gross misconduct
 which is materially and demonstrably injurious to Energy Group or any of its
 affiliated companies;(iii)          the
 repeated use of alcohol by the Executive that materially interferes with
 Executives duties, use of illegal drugs by the Executive, or a violation by
 the Executive of the drug and/or alcohol policies of Energy Group or any of
 its affiliated companies;(iv)          a
 conviction, guilty plea or plea of nolo
 contendere of the Executive for any crime involving moral
 turpitude or for any felony;(v)          a
 breach by the Executive of his fiduciary duties of loyalty or care to Energy
 Group or any of its affiliated companies or a material violation of the Code
 of Business Conduct and Ethics, or similar policies, of Energy Group or any
 of its affiliated companies; or(vi)          the
 breach by the Executive of the confidentiality provision set forth in Section
 11(a) hereof.For
purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered willful unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executives action or omission was in the best interests of Energy Group or any
of its affiliated companies. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board or upon the
instructions of the Chief Executive Officer or a senior officer of Energy Group
or any of its affiliated companies based upon the advice of counsel for Energy
Group shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of Energy Group or any of its
affiliated companies. The cessation of employment of the Executive shall not be
deemed to be for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board at a meeting of
the Board called and held for such purpose (after

7

reasonable
notice is provided to the Executive and the Executive is given an opportunity,
together with counsel, to be heard before the Board), finding that, in the good
faith opinion of the Board, the Executive is guilty of the conduct described in
subparagraph (i) through and including (vi) above, and specifying the
particulars thereof in detail.

(c)        Good
Reason. The Executives employment may be terminated by the Executive for
Good Reason. For purposes of this Agreement, Good Reason shall mean:

(i)          any
 material reduction in the Executives authority, duties or responsibilities
 that is not permitted by Section 5(a)(i) of this Agreement, without the
 Executives written consent, excluding for this purpose an action not taken
 in bad faith and which is remedied by Energy Group or any of its affiliated
 companies promptly after receipt of notice thereof given by the Executive;(ii)          any
 failure by Energy Group or any of its affiliated companies to comply with any
 of the provisions of Section 5(b) of this Agreement, other than a failure not
 occurring in bad faith and which is remedied by Energy Group or any of its affiliated
 companies promptly after receipt of notice thereof given by the Executive;(iii)          Energy
 Group or any of its affiliated companies requiring the Executive to be based
 at any office or location other than as provided in Section 5(a)(ii) of this
 Agreement;(iv)          any
 purported termination by Energy Group or any of its affiliated companies of
 the Executives employment otherwise than as expressly permitted by this
 Agreement; or(v)          any
 failure by Energy Group or any of its affiliated companies to comply with and
 satisfy Section 12(c) of this Agreement.For
purposes of this Section 6(c), any claim by the Executive that Good Reason exists
shall be presumed to be correct unless Energy Group establishes by clear and
convincing evidence that Good Reason does not exist.

(d)       Notice
of Termination. Any termination by Energy Group or any of its affiliated
companies for Cause, or by the Executive for Good Reason, shall be communicated
by Notice of Termination to the other party hereto given in accordance with
Section 16(b) of this Agreement. For purposes of this Agreement, a Notice of
Termination means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executives employment under the
provision so indicated and (iii) if the Date of Termination (as defined below)
is other than the date of receipt of such notice, specifies the termination
date (which date shall be not more than thirty days after the giving of such
notice). The failure by the Executive or Energy Group or any of its affiliated
companies to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any
right of the Executive or Energy Group or any of its affiliated companies,
respectively, hereunder or preclude the Executive or Energy Group or any of its

8

affiliated
companies, respectively, from asserting such fact or circumstance in enforcing
the Executives or Energy Groups or any of its affiliated companys rights
hereunder.

(e)        Date
of Termination. Date of Termination means (i) if the Executives
employment is terminated by Energy Group or any of its affiliated companies for
Cause, or by the Executive for Good Reason, the date of receipt of the Notice
of Termination or any later date specified therein, as the case may be, (ii) if
the Executives employment is terminated by Energy Group or any of its
affiliated companies other than for Cause or Disability, the Date of
Termination shall be the date on which Energy Group or any of its affiliated
companies notifies the Executive of such termination and (iii) if the
Executives employment is terminated by reason of death or Disability, the Date
of Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be. Energy Group and the Executive shall take
all steps necessary (including with regard to any post-termination services by
the Executive) to ensure that any termination described in this Section 6(e)
constitutes a separation from service within the meaning of Section 409A of
the Code, and the date on which such separation from service takes place shall
be the Date of Termination.

7.          Obligations
of Energy Group and its Affiliated Companies upon Termination. (a) Good
Reason; Other Than for Cause, Death or Disability. If, during the
Employment Period, Energy Group or any of its affiliated companies shall
terminate the Executives employment other than for Cause or Disability or the
Executive shall terminate employment for Good Reason:

(i)          Energy
 Group shall pay, or cause to be paid, to the Executive in a lump sum in cash
 the sum of: (A) the Executives Annual Base Salary through the Date of
 Termination to the extent not theretofore paid, (B) the product of (x) the
 Average Annual Bonus and (y) a fraction, the numerator of which is the number
 of days in the current fiscal year through the Date of Termination, and the
 denominator of which is 365 and (C) any accrued vacation pay, in each case to
 the extent not theretofore paid (the sum of the amounts described in clauses
 (A), (B), and (C) shall be hereinafter referred to as the Accrued
 Obligations). The amounts described in clauses (A) and (C) shall be paid
 within 30 days after the Date of Termination. The amounts described in clause
 (B) shall be paid within the 30-day period commencing on the 60th day
 following the Date of Termination, or such later date set forth in Section
 17(a).(ii)          Energy
 Group shall pay, or cause to be paid, to the Executive in twelve (12) equal
 monthly installments, the product of (1) the Multiple and (2) the sum of (x)
 the Executives Annual Base Salary and (y) the Average Annual Bonus. The
 first installment shall commence within the 30 day period commencing on the
 60th day following the Date of Termination, or such later date set forth in
 Section 17(a).(iii)          For
 a number of years after the Executives Date of Termination equal to the
 Multiple, or such longer period as may be provided by the terms of the
 appropriate plan, program, practice or policy, Energy Group or any of its
 affiliated companies shall continue benefits to the Executive and/or the
 Executives family at least equal to those which would have been provided to
 them in accordance with the plans,9

programs,
 practices and policies described in Section 5(b)(iv) of this Agreement if the
 Executives employment had not been terminated or, if more favorable to the
 Executive, as in effect generally at any time thereafter with respect to
 other peer executives of Energy Group or any of its affiliated companies and
 their families, provided, however, that if the Executive becomes reemployed
 with another employer and is eligible to receive medical or other welfare
 benefits under another employer provided plan, the medical and other welfare
 benefits described herein shall be secondary to those provided under such
 other plan during such applicable period of eligibility. For purposes of
 determining eligibility (but not the time of commencement of benefits) of the
 Executive for retiree benefits pursuant to such plans, practices, programs
 and policies, the Executive shall be considered to have remained employed
 until the expiration of a number of years after the Date of Termination equal
 to the Multiple and to have retired on the last day of such period. The
 continued benefits described in this Section 7(a)(iii) that are taxable
 benefits (and that are not disability pay or death benefit plans within the
 meaning of Section 409A of the Code) are intended to comply, to the maximum
 extent possible, with the exception to Section 409A of the Code set forth in Section
 1.409A-1(b)(9)(v) of the Treasury Regulations. To the extent that any of
 those benefits either do not qualify for that exception, or are provided
 beyond the applicable time periods set forth in Section 1.409A-1(b)(9)(v) of
 the Treasury Regulations, then they shall be subject to the following
 additional rules: (A) any reimbursement of eligible expenses shall be paid
 within 10 calendar days following Executives written request for
 reimbursement, or such later date set forth in Section 17(a); provided that
 the Executive provides written notice no later than 15 calendar days prior to
 the last day of the calendar year following the calendar year in which the
 expense was incurred; (B) the amount of expenses eligible for reimbursement,
 or in-kind benefits provided, during any calendar year shall not affect the
 amount of expenses eligible for reimbursement, or in-kind benefits to be
 provided, during any other calendar year; and (C) the right to reimbursement
 or in-kind benefits shall not be subject to liquidation or exchange for
 another benefit.(iv)        Energy
 Group or any of its affiliated companies shall, at its sole expense as
 incurred, provide the Executive with outplacement services from a recognized
 outplacement service provider, the scope of which shall be selected by the
 Executive in his sole discretion; provided that (i) the cost to Energy Group
 shall not exceed $30,000, and (ii) in no event shall the outplacement
 services be provided beyond the end of the second calendar year after the
 calendar year in which the Date of Termination occurs.(v)        To
 the extent not theretofore paid or provided, Energy Group or any of its
 affiliated companies shall timely pay or provide to the Executive any other
 amounts or benefits required to be paid or provided or which the Executive is
 eligible to receive under any plan, program, policy or practice or contract
 or agreement of Energy Group or any of its affiliated companies (such other
 amounts and benefits shall be hereinafter referred to as the Other
 Benefits).Notwithstanding
the foregoing, except with respect to payments and benefits under Sections
7(a)(i)(A), 7(a)(i)(C) and 7(a)(v), all payments and benefits shall cease in
the event Executive breaches any of his obligations under Section 11 hereof.

10

(b)          Death.
If the Executives employment is terminated by reason of the Executives death
during the Employment Period, this Agreement shall terminate without further
obligations to the Executives legal representatives under this Agreement,
other than for payment of Accrued Obligations and the timely payment or
provision of Other Benefits. Accrued Obligations shall be paid to the
Executives estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 7(b) shall
include, without limitation, and the Executives estate and/or beneficiaries
shall be entitled to receive, benefits at least equal to the most favorable
benefits provided by Energy Group or any of its affiliated companies to the
estates and beneficiaries of peer executives of Energy Group and any such
affiliated companies under such plans, programs, practices and policies
relating to death benefits, if any, as in effect with respect to other peer
executives and their beneficiaries at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executives estate and/or the Executives beneficiaries, as in effect on the
date of the Executives death with respect to other peer executives of Energy
Group or any of its affiliated companies and their beneficiaries.

(c)          Disability.
If the Executives employment is terminated by reason of the Executives
Disability during the Employment Period, this Agreement shall terminate as of
the Disability Effective Date, without further obligations to the Executive,
other than for payment of Accrued Obligations and the timely payment or
provision of Other Benefits. Accrued Obligations shall be paid to the Executive
in a lump sum in cash at the same time as set forth in Section 7(a)(i). With
respect to the provision of Other Benefits, the term Other Benefits as utilized
in this Section 7(c) shall include, and the Executive shall be entitled after
the Disability Effective Date to receive, disability and other benefits at
least equal to the most favorable of those generally provided by Energy Group
or any of its affiliated companies to disabled executives and/or their families
in accordance with such plans, programs, practices and policies relating to
disability, if any, as in effect generally with respect to other peer
executives and their families at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive and/or the
Executives family, as in effect at any time thereafter generally with respect
to other peer executives of Energy Group or any of its affiliated companies and
their families.

(d)          Cause;
Other than for Good Reason. If the Executives employment shall be
terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the
obligation to pay to the Executive (x) his Annual Base Salary through the Date
of Termination, and (y) Other Benefits, in each case to the extent theretofore
unpaid. If the Executive voluntarily terminates employment during the
Employment Period, excluding a termination for Good Reason, this Agreement
shall terminate without further obligations to the Executive, other than for
Accrued Obligations and the timely payment or provision of Other Benefits. In
such case, all Accrued Obligations shall be paid to the Executive in a lump sum
in cash at the same time as set forth in Section 7(a)(i).

8.         Non-exclusivity
of Rights. Nothing in this Agreement shall prevent or limit the Executives
continuing or future participation in any plan, program, policy or practice
provided

11

by Energy
Group or any of its affiliated companies and for which the Executive may
qualify, nor, subject to Section 16(f), shall anything herein limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with Energy Group or any of its affiliated companies. Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any plan, policy, practice or program of or any contract or agreement
with Energy Group or any of its affiliated companies at or subsequent to the
Date of Termination shall be payable in accordance with such plan, policy,
practice or program or contract or agreement except as explicitly modified by
this Agreement.

9.          Full
Settlement.

(a)          Except
as otherwise provided in Section 7(a) hereof, Energy Groups obligation to make
the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which Energy Group or any
of its affiliated companies may have against the Executive or others. In no event
shall the Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Executive under any
of the provisions of this Agreement and such amounts shall not be reduced
whether or not the Executive obtains other employment.

(b)          Except as
otherwise provided in this Section 9 or Section 11 of this Agreement, Energy
Group agrees to pay as incurred (within 10 calendar days following Energy
Groups receipt of an invoice from the Executive), to the full extent permitted
by law, all legal fees and expenses which the Executive may reasonably incur at
any time from the date of this Agreement through the Executives remaining
lifetime or, if longer, through the 20th anniversary of the date of the Change
of Control, including the legal fees and expenses of any arbitration
proceeding, as a result of any contest (regardless of the outcome thereof) by
Energy Group or any of its affiliated companies, the Executive or others of the
validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any
contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Code; provided, that
the Executive shall have submitted an invoice for such fees and expenses at
least 15 calendar days before the end of the calendar year next following the
calendar year in which such fees and expenses were incurred. Notwithstanding
the foregoing, Energy Group shall not be obligated to pay any legal fees or
expenses incurred by the Executive in any contest in which the trier of fact
determines that the Executives position was frivolous or maintained in bad
faith. The amount of such legal fees and expenses that Energy Group is
obligated to pay in any given calendar year shall not affect the legal fees and
expenses that Energy Group is obligated to pay in any other calendar year, and
the Executives right to have Energy Group pay such legal fees and expenses may
not be liquidated or exchanged for any other benefit. Energy Groups obligation
to pay Executives eligible legal fees and expenses under this Section 9(b)
shall not be conditioned upon Executives termination of employment.

12

10.          Certain
Additional Payments by Energy Group or its Affiliated Companies.

(a)          Anything
in this Agreement to the contrary notwithstanding and except as set forth
below, in the event it shall be determined that any payment or distribution by
Energy Group or any of its affiliated companies to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 10) (a Payment) would be
subject to the excise tax imposed by Section 4999 of the Code or any interest
or penalties are incurred by the Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the Excise Tax), then the Executive
shall be entitled to receive an additional payment (a Gross-Up Payment) in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. Notwithstanding the foregoing provisions of this
Section 10(a), if it shall be determined that the Executive is entitled to a
Gross-Up Payment, but that the Payments do not exceed 110% of the greatest
amount (the Reduced Amount) that could be paid to the Executive such that the
receipt of Payments would not give rise to any Excise Tax, then no Gross-Up
Payment shall be made to the Executive and the Payments, in the aggregate,
shall be reduced to the Reduced Amount. If a reduction in Payments is necessary
pursuant to the immediately preceding sentence, then the reduction shall occur
in the following order: (i) cash payments; (ii) cancellation of accelerated
vesting of performance-based equity awards (based on the reverse order of the
date of grant); (iii) cancellation of accelerated vesting of other equity
awards (based on the reverse order of the date of grant); (iv) reduction in
retirement benefits under the Supplemental Executive Retirement Plan; and (v)
reduction of welfare benefits. Energy Groups obligation to make Gross-Up
Payments under this Section 10 shall not be conditioned upon Executives
termination of employment.

(b)          Subject
to the provisions of Section 10(c), all determinations required to be made
under this Section 10, including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment, whether and in what amount
any Payments are to be reduced pursuant to the second sentence of Section
10(a), and the assumptions to be utilized in arriving at such determination, shall
be made by a major accounting firm with expertise in such matters designated by
the Executive (the Accounting Firm) which shall provide detailed supporting
calculations both to Energy Group and the Executive within 15 business days of
the receipt of notice from the Executive that there has been a Payment, or such
earlier time as is requested by Energy Group. Any determination by the
Accounting Firm shall be binding upon Energy Group and the Executive. As a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by Energy Group
should have been made (Underpayment), consistent with the calculations
required to be made hereunder. In the event that Energy Group exhausts its
remedies pursuant to Section 10(c) and the Executive thereafter is required to
make a payment of any Excise Tax, the Accounting Firm shall determine the
amount of the Underpayment that has occurred and any such Underpayment shall be

13

promptly paid,
or caused to be paid, by Energy Group to or for the benefit of the Executive,
as provided in Section 10(e).

(c)       The
Executive shall notify Energy Group in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by Energy Group
of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise Energy Group of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to Energy Group (or such shorter period
ending on the date that any payment of taxes with respect to such claim is
due). If Energy Group notifies the Executive in writing prior to the expiration
of such period that it desires to contest such claim, the Executive shall:

(i)          give
 Energy Group any information reasonably requested by Energy Group relating to
 such claim,(ii)          take
 such action in connection with contesting such claim as Energy Group shall
 reasonably request in writing from time to time, including, without
 limitation, accepting legal representation with respect to such claim by an
 attorney reasonably selected by Energy Group,(iii)          cooperate
 with Energy Group in good faith in order effectively to contest such claim,
 and(iv)          permit
 Energy Group to participate in any proceedings relating to such claim;provided,
however, that Energy Group shall bear and pay, or cause to be paid, directly
all costs and expenses (including additional interest and penalties) incurred
in connection with such contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses as provided in Section 10(e).
Without limitation on the foregoing provisions of this Section 10(c), Energy
Group shall control all proceedings taken in connection with such contest and,
at its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as Energy Group shall determine; provided,
however, that if Energy Group directs the Executive to pay such claim and sue
for a refund, Energy Group shall advance, or cause to be advanced, the amount
of such payment to the Executive, on an interest-free basis and shall indemnify
and hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance, as provided in Section 10(e); and further provided

14

that any
extension of the statute of limitations relating to payment of taxes for the taxable
year of the Executive with respect to which such contested amount is claimed to
be due is limited solely to such contested amount. Furthermore, Energy Groups
control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and the Executive shall be entitled
to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.

(d)          If,
after the receipt by the Executive of an amount advanced, or caused to be
advanced, by Energy Group pursuant to Section 10(c), the Executive becomes
entitled to receive any refund with respect to such claim, the Executive shall
(subject to Energy Groups complying with the requirements of
Section 10(c)) promptly pay to Energy Group the amount of such refund
(together with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Executive of an amount advanced, or
caused to be advanced, by Energy Group pursuant to Section 10(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and Energy Group does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.

(e)          Any
Gross-Up Payment shall be paid by Energy Group within 5 calendar days of
receipt of the Accounting Firms determination as described in this Section 10,
or such later date as provided in Section 17(a), provided that Executive
submits written notice of a Payment no later than 30 calendar days prior to the
end of the calendar year next following the calendar year in which the Excise
Tax on a Payment is remitted to the Internal Revenue Service or any other
applicable taxing authority. The Gross-Up Payment, if any, shall be paid to the
Executive; provided that Energy Group, in its sole discretion, may withhold and
pay over to the Internal Revenue Service or any other applicable taxing
authority, for the benefit of the Executive, all or any portion of any Gross-Up
Payment, and the Executive hereby consents to such withholding. Any
reimbursement or payment by Energy Group of expenses incurred by the Executive
in connection with a tax audit or litigation relating to the Excise Tax, as
provided for in this Section 10, shall be paid within 5 calendar days of
written request by the Executive, or such later date as provided in Section
17(a), provided that Executive submits the written request no later than 30
calendar days prior to the end of the calendar year following the calendar year
in which the Excise Taxes that are subject to the audit or litigation are
remitted to the Internal Revenue Service or any other applicable taxing
authority, or where as a result of the audit or litigation, no Excise Taxes are
remitted, the end of the calendar year next following the calendar year in
which the audit is completed or there is a final and nonappealable settlement
or other resolution of the litigation.

(f)          All
fees and expenses of the Accounting Firm for services performed pursuant to
this Section 10 at any time from the date of this Agreement through the
Executives remaining lifetime or, if longer, through the 20th anniversary of
the date of the Change of Control, shall be borne solely by Energy Group.
Energy Group shall pay such fees and expenses not later than the end of the
calendar year following the calendar year in which the related work is
performed or the expenses are incurred by the Accounting Firm, subject to
Section 17(a). The

15

amount of such
fees and expenses that Energy Group is obligated to pay in any given calendar
year shall not affect the fees and expenses that Energy Group is obligated to
pay in any other calendar year, and the Executives right to have Energy Group
pay such fees and expenses may not be liquidated or exchanged for any other
benefit.

11.          Restrictive
Covenants.

(a)          The
Executive shall hold in a fiduciary capacity for the benefit of Energy Group or
any of its affiliated companies all secret or confidential information,
knowledge or data relating to Energy Group or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executives employment by Energy Group or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this
Agreement). The Executive hereby covenants and agrees that during the
Employment Period and thereafter, the Executive shall not, without the prior
written consent of Energy Group, communicate or divulge any such information,
knowledge or data to anyone other than Energy Group and those designated by it.
Notwithstanding the foregoing, the Executive or his representatives may
disclose any such information if such disclosure is compelled by subpoena or
other legal process, provided that if the Executive is so compelled, he shall provide
Energy Group prompt written notice of such subpoena or legal process in order
to permit Energy Group to seek appropriate protective orders. The Executive
agrees to contact Energy Group for written clarification if the Executive has
any question regarding what information, knowledge or data would be considered
by Energy Group to be confidential and subject to this provision. The
Executives obligations under this Section 11(a) are in addition to, and not in
limitation of or preemption of, all other obligations of confidentiality which
the Executive may have to Energy Group or any of its affiliated companies under
general legal or equitable principles, and federal, state or local law.

(b)          The
Executive agrees that for a period of one year after his Date of Termination he
will not, directly or indirectly, induce, attempt to induce, or assist others
in inducing or attempting to induce, any employee of Energy Group or any of its
affiliated companies to terminate such persons employment relationship with
Energy Group or any of its affiliated companies.

(c)          The
Executive acknowledges and agrees that any breach or threatened breach of this
Section 11 by him will cause injury to Energy Group and its affiliated
companies for which money damages alone will not provide an adequate remedy;
that if he commits or threatens to commit any such breach, Energy Group or any
of its affiliated companies should have the right to have the provisions of
this Section 11 specifically enforced by any court having jurisdiction. The
Executive agrees that he will not assert in any such enforcement action that
Energy Group or any of its affiliated companies have an adequate remedy in
damages; and that such rights and remedies will be in addition to and not in
lieu of any other rights or remedies available to Energy Group or any of its
affiliated companies at law or in equity. The Executive agrees that if any
court determines that he has breached this Section 11, he shall be liable to
and will pay Energy Group its reasonable legal fees and expenses incurred in
connection with such proceedings, including appeals therefrom, and Energy Group
shall not be obligated to reimburse

16

the Executive
for the legal fees and expenses incurred by the Executive in connection with
such proceedings, including appeals therefrom. In addition, while the duration
of the covenants contained in this Section 11 will be determined generally in
accordance with their terms, if the Executive violates any of these covenants,
he agrees to an extension of such covenant on the same terms and conditions for
an additional period of time equal to the time that elapses from the
commencement of such violation to the later of (i) the termination of such violation
or (ii) the final resolution of any litigation stemming from such violation.

(d)          If
any covenant contained in this Section 11, or any portion of such covenant, is
found by a court of competent jurisdiction to be invalid or unenforceable for
any reason, the Executive hereby authorizes and requests such court to exercise
its discretion to reform such covenant to the end that he will be subject to
covenants that are reasonable under the circumstances and enforceable by Energy
Group or any of its affiliated companies. In any event, if any provision is
found to be unenforceable for any reason, such provision shall remain in force
and effect to the maximum extent allowable, all non-affected provisions shall
remain fully valid and enforceable, and such finding shall in no way affect the
subsequent enforceability of any such provision against a different employee of
Energy Group.

(e)          The
Executive agrees that the promises and obligations made by Energy Group in this
Agreement (specifically including, but not limited to, the payments and
benefits provided for under Section 7(a) hereof (other than payments and
benefits under Sections 7(a)(i)(A), 7(a)(i)(C) and 7(a)(v)) constitute
sufficient consideration for the covenants contained in this Section 11. The
Executive further acknowledges that it is not Energy Groups intention to
interfere in any way with his employment opportunities, except in such
situations where the same conflict with the legitimate business interests of
Energy Group or any of its affiliated companies. The Executive agrees that he
will notify Energy Group in writing if he has, or reasonably should have, any
questions regarding the applicability of this Section 11.

12.          Successors.

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

(b)          This
Agreement shall inure to the benefit of and be binding upon Energy Group and
its successors and assigns.

(c)          Energy
Group will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of Energy Group to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that Energy Group would be
required to perform it if no such succession had taken place.

13.          Early
Termination. This agreement shall terminate as of the date Executive
becomes employed by any of the affiliated companies to which Energy Group has
elected not to

17

enter into
employment agreements (of this Type) with executives of such affiliated
companies; provided such employment becomes effective prior to a Change of
Control.

14.          Arbitration.
Except as otherwise provided herein, any dispute, controversy or claim between
the parties arising out of or relating to this Agreement (or any subsequent
amendments thereof or waivers thereto) (hereinafter, a Claim or Claims)
shall be submitted to final and binding arbitration. Claims which are subject
to this section include, but are not limited to, the following: (i) claims
relating to this Agreements existence, enforceability, validity, interpretation,
performance or breach, (ii) claims for compensation or benefits, and (iii)
claims of wrongful or discriminatory termination based on any federal, state or
local statute, regulation, ordinance, tort, public policy, contract or
promissory estoppel theory, including any dispute as to the cause or reason for
termination. All Claims submitted to arbitration pursuant to this Section 14
shall be subject to the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association, effective January 1, 2004,
except as hereinafter provided:

(a)          A
request to arbitrate a Claim must be made within 180 days of the date the Claim
arose;

(b)          Energy
Group shall pay any and all fees and expenses of the arbitrator;

(c)          The
arbitration hearing shall be held in Poughkeepsie, New York, unless the parties
mutually agree to another location;

(d)          Each
party shall exchange documents to be utilized as exhibits in the arbitration
hearing and each party shall be limited to five (5) pre-hearing depositions of
no more than ten hours each, unless the arbitrator orders additional discovery;

(e)          The
arbitrator shall be appointed in accordance with Rule 12 of the
above-referenced Rules of the American Arbitration Association, except that if,
for any reason, an arbitrator cannot be selected by the process described in
Rule 12, subparts (i) through (iii), the American Arbitration Association shall
submit the names of seven (7) additional arbitrators from its roster and the
parties shall select the arbitrator by alternately striking names with the
party requesting arbitration first striking; and

(f)          Either
party shall be entitled to seek and obtain injunctive or other appropriate
equitable relief in any federal or state court having jurisdiction in order to
enforce the arbitration provisions of this Agreement; and Energy Group shall be
entitled to seek and obtain such injunctive or other appropriate equitable
relief in order to prevent (pending arbitration) any breach of the Restrictive
Covenants set forth in Section 11 of this Agreement in any federal or state
court having jurisdiction.

Subject to
paragraph (f) of this Section 14, above, it is the intention of the parties to
avoid litigation in any court of any and all Claims concerning this Agreement,
or otherwise arising from the Executives employment with Energy Group or its
affiliate entities, and that all such claims will be subject to this arbitration
agreement. Neither party shall commence or pursue any

18

litigation on
any claim that is or was the subject of arbitration under this Agreement. Each
party agrees that this agreement to arbitrate, and any award arising out of any
arbitration contemplated by this Agreement, are enforceable under, and subject
to, the Federal Arbitration Act, 11 U.S.C. § I, et seq. Both parties consent that judgment upon any
arbitration award may be entered in any federal or state court having
jurisdiction.

15.          Release.
Notwithstanding anything contained herein to the contrary, Energy Group shall
only be obligated to make the payments or provide any benefit under Section
7(a) hereof (other than payments and benefits under Sections 7(a)(i)(A), 7(a)(i)(C)
and 7(a)(v)) if: (a) within the 50-day period after the Date of Termination,
the Executive executes a release, in a form provided by Energy Group, of all
current or future claims, known or unknown, against Energy Group, its
affiliated companies, its officers, directors, shareholders, employees and
agents arising on or before the date of the release, including but not limited
to all claims arising out of the Executives employment with Energy Group or
its affiliated companies or the termination of such employment, and (b) the
Executive does not revoke the release during the seven-day revocation period
prescribed by the Age Discrimination in Employment Act of 1967, as amended, or
any similar revocation period, if applicable. Energy Group shall be obligated
to provide such release to the Executive promptly following the Date of
Termination.

16.          Miscellaneous.

(a)          This
Agreement 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. The
captions of this Agreement are not part of the provisions hereof and shall have
no force or effect. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.

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

If to the
 Executive:Steven V.
 Lant59 Colburn
 DrivePoughkeepsie,
 NY 12603If to Energy
 Group:CH Energy
 Group, Inc.284 South AvenuePoughkeepsie,
 New York 12601-4879Attention:
 Chief Executive Officer19

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

(c)          The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement.

(d)          Energy
Group may withhold from any amounts payable under this Agreement such Federal,
state, local or foreign taxes as shall be required to be withheld pursuant to
any applicable law or regulation.

(e)          The
Executives or Energy Groups failure to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right the Executive or
Energy Group may have hereunder, including, without limitation, the right of
the Executive to terminate employment for Good Reason pursuant to
Section 6(c)(i)-(v) of this Agreement, shall not be deemed to be a waiver
of such provision or right or any other provision or right of this Agreement.

(f)          The
Executive and Energy Group acknowledge that, except as may otherwise be
provided under any other written agreement between the Executive and Energy
Group, or any of its affiliated companies, the employment of the Executive by
Energy Group or any of its affiliated companies is at will and, subject to
Section 2(c) hereof, the Executives employment may be terminated at any
time prior to the Effective Date by either the Executive or Energy Group or any
of its affiliated companies, in which case the Executive shall have no further
rights under this Agreement. From and after the Effective Date, this Agreement
shall supersede any other agreement between the parties with respect to the
subject matter hereof.

17.          Compliance
with Section 409A of the Code.

(a)          Notwithstanding
anything contained in this Agreement to the contrary, if the Executive is a
specified employee, as determined under Energy Groups policy for determining
specified employees on the Date of Termination, then to the extent required in
order to comply with Section 409A of the Code, all payments, benefits or
reimbursements paid or provided under this Agreement that constitute a
deferral of compensation within the meaning of Section 409A of the Code, that
are provided as a result of a separation from service within the meaning of
Section 409A and that would otherwise be paid or provided during the first six
months following such Date of Termination shall be accumulated through and paid
or provided (together with interest at the applicable federal rate under
Section 7872(f)(2)(A) of the Code in effect on the Date of Termination) within
30 days after the first business day following the six month anniversary of
such Date of Termination (or, if the Executive dies during such six-month
period, within 30 days after the Executives death).

(b)          It
is intended that the payments and benefits provided under this Agreement shall
either be exempt from the application of, or comply with, the requirements of
Section 409A of the Code. This Agreement shall be construed, administered, and
governed in a manner that effects such intent, and Energy Group shall not take
any action that would be

20

inconsistent
with such intent. Without limiting the foregoing, the payments and benefits
provided under this Agreement may not be deferred, accelerated, extended, paid
out or modified in a manner that would result in the imposition of an
additional tax under Section 409A of the Code upon Executive. Although Energy
Group shall use its best efforts to avoid the imposition of taxation, interest
and penalties under Section 409A of the Code, the tax treatment of the benefits
provided under this Agreement is not warranted or guaranteed. Neither Energy
Group, its affiliates, directors, officers, employees nor its advisers shall be
held liable for any taxes, interest, penalties or other monetary amounts owed
by the Executive or other taxpayer as a result of the Agreement. Any reference
in this Agreement 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.

IN
WITNESS WHEREOF, the Executive has hereunto set the Executives hand and,
pursuant to the authorization from its Board of Directors, Energy Group has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.

Steven V. LantCH Energy
 Group, Inc.ByChristopher
 M. CaponeEVP and CFO21