Exhibit (10)(iii)31 CH ENERGY GROUP, INC. 
DIRECTORS AND EXECUTIVES DEFERRED COMPENSATION PLAN The
Company adopted the CH Energy Group, Inc. Directors and Executives Deferred
Compensation Plan (the Plan), effective September 26, 2003. The Plan is
hereby amended and restated, as set forth below, to comply with the
restrictions imposed by Section 409A of the Code. In
order to comply with section 409A of the Code, effective immediately before
January 1, 2008, the Plan is divided into two parts, one of which shall be
named Part One and the other of which shall be named Part Two. Part One of
the Plan shall be governed by the terms and conditions of the Plan as in effect
on October 3, 2004. Part Two of the Plan shall be governed by the terms and
conditions set forth herein. Any amounts deferred in taxable years beginning
before January 1, 2005 (within the meaning of Section 409A of the Code) and any
earnings thereon shall be governed by the terms of Part One of the Plan, and it
is intended that such amounts and the earnings thereon shall be exempt from the
application of Section 409A of the Code. Any amount deferred in taxable years
beginning on or after January 1, 2005 (within the meaning of Section 409A of
the Code) and any earnings thereon shall be governed by the terms and
conditions of Part Two of the Plan, and it is intended that such amounts and
the earnings thereon shall be subject to and comply with the payment
restrictions imposed under Section 409A of the Code. ARTICLE I 
DEFINITIONS For
purposes of the Plan, the following words and phrases shall have the meanings
set forth below, unless their context clearly requires a different meaning: Account means the bookkeeping account
maintained by the Committee on behalf of each Participant pursuant to this
Plan. The sum of each Participants Sub-Accounts, in the aggregate, shall
constitute his Account. The Account and each and every Sub-Account shall be a
bookkeeping entry only and shall be used solely as a device to measure and
determine the amounts, if any, to be paid to a Participant or his Beneficiary
under the Plan. Affiliated
Group means (i) the Company,
and (ii) all entities with whom the Company would be considered a single
employer under Sections 414(b) and 414(c) of the Code, provided that in
applying Section 1563(a)(1), (2), and (3) for purposes of determining a
controlled group of corporations under Section 414(b) of the Code, the language
at least 50 percent is used instead of at least 80 percent each place it
appears in Section 1563(a)(1), (2), and (3), and in applying Treasury
Regulation Section 1.414(c)-2 for purposes of determining trades or businesses
(whether or not incorporated) that are under common control for purposes of Section
414(c), at least 50 percent is used instead of at least 80 percent each
place it appears in that regulation. Such term shall be interpreted in a manner
consistent with the definition of service recipient contained in Section 409A
of the Code.   Annual
Valuation Date has the meaning
given to such term in Section 4.2(a).

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

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

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

Board means the Board of Directors of the
Company.

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

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

Code means the Internal Revenue Code of
1986, as amended.

Commencement Date has the meaning given to
such term in Section 2.3 hereof.

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

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

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

Company
Contribution has the meaning given
to such term in Section 4.1 hereof.

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

Deferral
Commencement Date has the meaning
given to such term in Section 2.3.

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

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

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

Director
Stock Contribution has the
meaning given to such term in Section 4.2 hereof.

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

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

Effective
Date has the meaning given to
such term in Section 10.1 hereof.

Eligible
Employee has the meaning given to
such term in Section 2.1 hereof.

ERISA means the Employee Retirement Income
Security Act of 1974, as amended.

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

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

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

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

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

Part
One has the meaning given to such
term in Section 10.1 hereof.

Part
Two has the meaning given to such
term in Section 10.1 hereof.

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

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

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

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

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

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

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

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

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

Separation
from Service means a
termination of employment or service with the Affiliated Group in such a manner
as to constitute a separation from service as defined under Section 409A of
the Code. Upon a sale or other disposition of the assets of the Company or any
member of the Affiliated Group to an unrelated purchaser, the Committee reserves
the right, to the extent permitted by Section 409A of the Code, to determine
whether Participants providing services to the purchaser after and in
connection with the purchase transaction have experienced a Separation from
Service.

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

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

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

Transferred
Amounts shall have the meaning
provided in Section 10.1(b).

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

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ARTICLE II 
ELIGIBILITY; SUB-ACCOUNTS

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

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

2.3.          Commencement
Date

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

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

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

2.4.          Sub-Accounts.

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

6

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

(b)          Adjustments.

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

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

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

2.5.          Termination.

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

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

7

ARTICLE III 
DEFERRAL ELECTIONS

3.1.          New
Participants.

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

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

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

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

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

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

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

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

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

8

(c)          Performance-Based
Compensation.

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

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

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

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

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

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

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

9

(a)          Time
of Payment.

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

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

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

(b)          Form
of Payment.

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

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

3.5.          Duration
and Cancellation of Deferral Elections.

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

(b)          Cancellation.

10

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

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

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

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

ARTICLE IV 
COMPANY CONTRIBUTIONS

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

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

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

11

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

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

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

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

12

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

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

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

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

ARTICLE V 
CREDITING OF GAINS, LOSSES AND EARNINGS TO ACCOUNTS

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

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

13

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

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

ARTICLE VI 
PAYMENTS

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

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

(b)          In-Service
Sub-Account.

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

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

14

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

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

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

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

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

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

15

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

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

6.3.          Death
of Participant.

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

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

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

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

16

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

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

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

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

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

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

17

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

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

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

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

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

18

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

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

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

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

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

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

(a)          Federal
Securities Laws or Other Applicable Law. A Payment may be delayed where the
Committee reasonably anticipates that the making of the payment will violate
Federal securities laws or other applicable law; provided that the delayed
payment is made at the earliest date at which the Committee reasonably
anticipates that the making of the payment will not cause such violation. For
purposes of the preceding sentence, the making of a payment that would cause
inclusion in gross income or the application of any penalty provision or other
provision of the Code is not treated as a violation of applicable law.

(b)          Other
Events and Conditions. A payment may be delayed upon such other events and
conditions as the Internal Revenue Service may prescribe in generally
applicable guidance published in the Internal Revenue Bulletin.

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

19

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

ARTICLE VII 
ADMINISTRATION

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

7.2.          Compliance
with Section 409A of the Code.

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

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

(c)          Any
reference in this Plan to Section 409A of the Code will also include any
proposed, temporary or final regulations, or any other guidance, promulgated
with respect to such Section 409A by the U.S. Department of Treasury or the
Internal Revenue Service. For purposes of the Plan, the phrase permitted by
Section 409A of the Code, or words or phrases of similar import, shall mean
that the event or circumstance shall only be permitted to the extent it would
not cause an amount deferred or payable under the Plan to be includible in the
gross income of a Participant or Beneficiary under Section 409A(a)(1) of the
Code.

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

20

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


the specific
 reason or reasons for the denial,
specific
 reference to the Plan provision(s) on which the denial is based,
a
 description of any additional material or information which the Claimant may
 need to perfect the claim with an explanation as to why such material or
 information is necessary,
a statement
 that the Claimant has the right, upon request and free of charge, to review
 and obtain copies of records and documents relating to his claim which are
 held by the Committee (or its designee), and
an
 explanation of the appeal right and procedure described in the next
 paragraph, including timelines and a statement of the Claimants right to
 file suit under ERISA §502(a) if the Claimants claim is denied on review.If a Claimants
claim is denied, wholly or in part, the Claimant has the right of an appeal to
the Committee for review of the denial. The following provisions apply to such
right of appeal.


The request
 for review must be filed with the Committee within 60 calendar days following
 the Claimants receipt of written notice of denial of the claim.
The request
 must be in writing from the Claimant and must state the specific portions of
 the claim denial that the Committee is asked to review.
The Claimant
 has the right, upon request and free of charge, to review and obtain copies
 of records and documents relating to the Claimants claim that are held by
 the Committee (or its designee).
The Claimant
 may submit issues, arguments, and other comments in writing to the Committee
 with any documentary evidence in support of his claim.
The
 Committees review will take into account all information submitted by the
 Claimant, without regard to whether the information was submitted or considered
 in the initial benefit determination.21


Written
 notice of the Committees decision will be given to the Claimant within 60
 calendar days of receipt of the Claimants request for review (or within 120
 calendar days if special circumstances exist). This notice will state
 specific reasons for the decision, including specific reference to the Plan
 provision(s) on which the decision is based in language designed to be
 understood by the Claimant. It will also include a statement that the
 Claimant is entitled to receive, free of charge and upon request, copies of
 documents and other information relevant to his claim, and that the Claimant
 has the right to bring a civil action under ERISA §502(a) if the Committees
 decision on review is adverse to the Claimant.No lawsuit by
a Claimant may be filed prior to exhausting the Plans administrative appeal
process. Any lawsuit must be filed no later than the earlier of one year after
the Claimants claim for benefit was denied or the date the cause of action
first arose.

ARTICLE VIII 
AMENDMENT AND TERMINATION

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

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

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

22

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

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

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

23

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

ARTICLE IX 
MISCELLANEOUS

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

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

9.3.          Interest
of Participant.

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

24

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

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

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

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

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

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

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

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

25

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

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

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

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

ARTICLE X 
EFFECTIVE DATE AND TRANSITION RULES

10.1.          Effective
Date. This amendment and restatement of the Plan is
effective as of January 1, 2008 (the Effective Date). In order to comply with
section 409A of the Code, effective immediately before January 1, 2008, the
Plan is divided into two parts, one of which shall be named Part One and the
other of which shall be named Part Two. Part One of the Plan shall be
governed by the terms and conditions of the Plan as in effect on October 3,
2004. Part Two of the Plan shall be governed by the terms and conditions set
forth herein.

(a)          Pre-2005
Deferrals. Any amounts deferred in taxable years beginning before January
1, 2005 (within the meaning of Section 409A of the Code) and any earnings
thereon shall be governed by the terms of Part One of the Plan, and it is
intended that such amounts and the earnings thereon shall be exempt from the
application of Section 409A of the Code. Nothing contained herein is intended
to materially enhance a benefit or right existing under Part One of the Plan as
of October 3, 2004, or add a new material benefit or right to Part One of the
Plan. As of January 1, 2008, Part One of the Plan is frozen, and neither the
Company, its affiliates nor any individual shall make or permit to be made any
additional contributions or deferrals under Part One of the Plan (other than
earnings) on or after that date.

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

26

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

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

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

CH ENERGY
 GROUP, INC.By:
/s/Steven V.
 LantSteven V. Lant,
Chairman, President andChief Executive
Officer of CH EnergyGroup,
Inc.27