Exhibit (10)(iii)28




EMPLOYMENT
AGREEMENT
 
 AGREEMENT
by and between CH Energy Group Inc. ("Energy Group"), a New York corporation,
and James P. Laurito (the "Executive"), dated as of the 16th day of November,
2009.
 
 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 imperative to 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.
 
 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)      
     "Effective Date" means the first date during the
Change of Control Period (as defined in Section 2(d)) on which a Change of
Control occurs.  Notwithstanding anything in this Agreement to the
contrary, if (i) the Executive's employment with Energy Group is terminated by
Energy Group, (ii) the Date of Termination is prior to the date on which a
Change of Control occurs, and (iii) it is reasonably demonstrated by the
Executive that such termination of employment (A) was at the request of a third
party that has taken steps reasonably calculated to effect a Change of Control
or (B) otherwise arose in connection with or anticipation of a Change of
Control, then for all purposes of this Agreement, the "Effective Date" means the
date immediately prior to such Date of Termination, and the Executive shall be
entitled to all payments and benefits under this Agreement as though the
Executive had been terminated without Cause (as defined herein) during the
Employment Period.
  
  (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) twoif 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 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
  2
  (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").
 
 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.
  3
  (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.
 
 (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.
  4
  (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 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.
  5
  (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 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;
  6
  (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
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;
  7
  (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 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.”
  8
  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, 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.
  9
  (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.
 
 (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.
  10
  (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 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.


11
 
 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.
 
 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.
  12
  (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 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:
  13
  (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 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.
  14
  (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 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.
  15
  (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 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.
  16
  (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 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:
  17
  (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 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.
  18
  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:
 
 James P.
Laurito
 3 Taylors
Rise
 Rochester,
NY 14618
 
 If to Energy
Group:
 
 CH Energy
Group, Inc.
 284 South
Avenue
 Poughkeepsie,
New York  12601-4879
 
 Attention:  Chief
Executive Officer
 
 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.
  19
  (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 employmentmay 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 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.
  20
  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.
 
 
 James
      P. LauritoCH
      Energy Group, Inc.BySteven
      V. LantChairman of the
      Board, President andChief
      Executive Officer
   21