CONSOLIDATED EDISON, INC.
                      RESTRICTED STOCK PLAN FOR NON-OFFICER DIRECTORS
                            EFFECTIVE OCTOBER 1, 1998

     I.  PURPOSE.  The  purpose  of the  Plan is to  advance  the  interests  of
Consolidated  Edison,  Inc. and its  stockholders  by  assisting  the Company in
attracting and retaining individuals of superior talent, ability and achievement
to serve on its Board of Directors.

      II.  DEFINITIONS.  The following words and phrases shall have the meanings
set forth below unless a different meaning is required by the context:

      (a)Adjustment  Shares:  New or  additional  or different  shares of Common
         Stock or other  securities  (other  than rights or warrants to purchase
         securities)  received  or  entitled  to  be  received  by an  owner  of
         Restricted  Stock as a  result  of a change  in  capitalization  of the
         Company as set forth in Article VII hereof.

      (b)  Annual Meeting: The Annual Meeting of Stockholders of the Company.

      (c) Beneficial Owner: As set forth in Rule 13d-3 under the Exchange Act.

      (d) Board: The Board of Directors of the Company.

      (e) Change in Control: The occurrence of any of the following:

         (i)any  Person  is  or  becomes  the  Beneficial  Owner,   directly  or
            indirectly,  of  securities  of the Company  (not  including  in the
            securities beneficially owned by such Person any securities acquired
            directly from the Company or its affiliates other than in connection
            with the acquisition by the Company or its affiliates of a business)
            representing  20% or more of either the then  outstanding  shares of
            Common Stock or the  combined  voting  power of the  Company's  then
            outstanding securities; or

         (ii) the  following  individuals  cease for any reason to  constitute a
            majority  of the  number of  directors  then  serving  on the Board;
            individuals who, on the Effective Date hereof,  constitute the Board
            and any new director (other than a director whose initial assumption
            of office is in  connection  with an actual or  threatened  election
            contest,  including  but  not  limited  to a  consent  solicitation,
            relating to the  election of directors of the Company (as such terms
            are used in Rule 14a-11 of Regulation  14A under the Exchange  Act))
            whose  appointment  or  election  by the  Board  or  nomination  for
            election by the Company's  shareholders was approved by a vote of at
            least  two-thirds  (2/3) of the  directors  then still in office who
            either  were  directors  on  the  Effective  Date  hereof  or  whose
            appointment,  election or nomination  for election was previously so
            approved; or

         (iii) the shareholders of the Company approve a merger or consolidation
            of the Company with any other corporation or approve the issuance of
            voting  securities  of the  Company in  connection  with a merger or
            consolidation  of the Company (or any direct or indirect  subsidiary
            of the Company) pursuant to applicable stock exchange  requirements,
            other than (A) a merger or  consolidation  that would  result in the
            voting  securities of the Company  outstanding  immediately prior to
            such merger or  consolidation  continuing  to  represent  (either by
            remaining  outstanding or by being converted into voting  securities
            of the surviving entity or any parent thereof),  in combination with
            the ownership of any trustee or other fiduciary  holding  securities
            under an employee  benefit  plan of the Company or any  affiliate of
            the Company, at least 65% of the combined voting power of the voting
            securities  of the  Company or such  surviving  entity or any parent
            thereof outstanding  immediately after such merger or consolidation,
            or  (B)  a  merger  or   consolidation   effected  to   implement  a
            recapitalization of the Company (or similar transaction) in which no
            Person is or becomes the Beneficial  Owner,  directly or indirectly,
            of  securities  of the  Company  (not  including  in the  securities
            beneficially  owned by such Person any securities  acquired directly
            from the Company or its affiliates other than in connection with the
            acquisition  by  the  Company  or  its  affiliates  of  a  business)
            representing  20% or more of either the then  outstanding  shares of
            Common  Stock of the  Company or the  combined  voting  power of the
            Company's then outstanding securities; or

         (iv) the  stockholders  of  the  Company  approve  a plan  of  complete
            liquidation  or  dissolution  of the Company or an agreement for the
            sale or  disposition by the Company of all or  substantially  all of
            the  Company's  assets,  other  than a sale  or  disposition  by the
            Company of all or  substantially  all of the Company's  assets to an
            entity,  at least 65% of the  combined  voting  power of the  voting
            securities of which are owned by Persons in  substantially  the same
            proportions as their ownership of the Company  immediately  prior to
            such sale.

         Notwithstanding  the foregoing,  no "Change in Control" shall be deemed
         to have occurred if there is consummated  any  transaction or series of
         integrated transactions  immediately following which the record holders
         of the Common Stock  immediately prior to such transaction or series of
         transactions  continue  to have  substantially  the same  proportionate
         ownership  in an  entity  which  owns all or  substantially  all of the
         assets of the Company immediately  following such transaction or series
         of transactions.

      (f)   Committee:  The Company's Nominating Committee.

      (g) Common Stock: The Company's Common Shares, $.10 par value.

      (h) Company: Consolidated Edison, Inc., or its successor or successors.

      (i) Effective Date: October 1, 1998.

      (j)Exchange Act: The  Securities  Exchange Act of 1934, as amended,  or as
         it may be amended from time to time.

      (k)Non-Officer  Director: A member of the Board who is not also an officer
         or employee of the Company.

      (l)Person:  As defined in Section 3(a)(9) of the Exchange Act, as modified
         and used in  Sections  13(d) and 14(d)  thereof,  except that such term
         shall not include (i) the Company or any of its  affiliates (as defined
         in Rule 12b-2  promulgated  under the Exchange Act),  (ii) a trustee or
         other fiduciary  holding  securities  under an employee benefit plan of
         the Company or any of its affiliates,  (iii) an underwriter temporarily
         holding securities pursuant to an offering of such securities,  or (iv)
         a corporation owned, directly or indirectly, by the stockholders of the
         Company in  substantially  the same  proportions as their  ownership of
         stock of the Company.

      (m)Plan:  Consolidated  Edison, Inc. Restricted Stock Plan for Non-Officer
         Directors, as it may be amended from time to time.

      (n)Restriction  Termination  Date: as to each  Non-Officer  Director,  the
         earlier  of (i)  five  years  from the  date of  grant  (determined  in
         accordance with Article IV hereof), (ii) retirement from Service at age
         72 (or earlier with the consent of the Board or  Committee),  (iii) the
         death of the Director, or (iv) a Change in Control.

      (o)Restricted  Stock:  Shares  of Common  Stock  subject  to  restrictions
         awarded pursuant to Article IV hereof.

      (p)Securities  Act: The Securities  Act of 1933, as amended,  or as it may
         be amended from time to time.

      (q) Service: A Non-Officer Director's service as a member of the Board.

      (r)Year of Service:  The annual  period of Service  commencing  the day of
         each  Annual  Meeting  and  ending on the day  before  the next  Annual
         Meeting. For any person first appointed a member of the Board after the
         date of an Annual  Meeting,  his or her  first  Year of  Service  shall
         commence upon his or her appointment as a Director and shall end on the
         day before the next Annual Meeting.


      III. SHARES SUBJECT TO THE PLAN.  Shares of Restricted Stock awarded under
the Plan shall be purchased on the open market by or on behalf of the Company or
its agent.

      IV.  RESTRICTED STOCK AWARDS.

      A. On the Effective  Date, each  Non-Officer  Director shall be granted an
award of 200 shares of Restricted Stock.

      B. After the Effective Date, each Non-Officer Director shall be granted an
award of 200 shares of Restricted  Stock upon the  commencement  of each Year of
Service.  The  date of  grant  shall  be the  first  business  day of the  month
following the Annual Meeting or the Non-Officer  Director's first appointment as
a member of the Board.

      C. The award of shares of Restricted  Stock,  including  the  restrictions
thereon, shall be consistent with the following:

      (i)Shares  of  Restricted  Stock  will  be  issued  in  the  name  of  the
         Non-Officer  Director receiving the award, but prior to the Restriction
         Termination  Date the  shares  will be held by the  Company or an agent
         appointed by the Company for the account of such  Non-Officer  Director
         (together with a blank stock power which the Non-Officer Director shall
         execute and deliver to the Company).

      (ii) Upon  the  Restriction  Termination  Date,  the  restrictions  on the
         Restricted  Stock  shall  lapse and the  Company  shall  deliver to the
         Non-Officer  Director,  or  such  other  person  as may  be  designated
         pursuant to Article IV.C (iii) a certificate  for the shares which have
         been  awarded to him or her  without any legend or  restriction  of any
         kind and the  Company  shall  return  to the  Non-Officer  Director  or
         destroy any and all blank  stock  powers  previously  provided to it by
         such  Non-Officer  Director.  The Company shall use its reasonable best
         efforts to ensure  that the shares  are freely  transferable  after the
         Restriction Termination Date, including, if necessary,  registering the
         shares  under  the   Securities   Act  and   obtaining   such  listing,
         qualification  and  compliance  as may be  required by state or federal
         law, or the securities  exchange or exchanges on which the Common Stock
         is listed.

      (iii) Shares of Restricted Stock may not be sold,  assigned,  transferred,
         pledged,   hypothecated   or  otherwise   disposed  of,  prior  to  the
         Restriction  Termination  Date except with the consent of the Committee
         or the Board and provided that a Director may direct that the shares of
         Restricted   Stock  be  registered   jointly  with  another  person  or
         transferred to a family member or to a trust or other entity for estate
         planning purposes.  Any attempted sale, assignment,  transfer,  pledge,
         hypothecation  or other  disposition in  contravention of the foregoing
         shall be null and void and without effect.

      (iv) Except as otherwise provided herein, a Non-Officer Director receiving
         an award of shares  of  Restricted  Stock  shall  have all  rights of a
         stockholder with respect to shares of Restricted Stock issued in his or
         her name,  including  the right to vote and to  receive  dividends  and
         other distributions.

      (v)If a  Non-Officer  Director,  as owner of shares of  Restricted  Stock,
         receives  or  shall be  entitled  to  receive  Adjustment  Shares,  the
         certificates  representing the Adjustment Shares (together with a blank
         stock power executed by such  Non-Officer  Director) shall be delivered
         to and held by the Company or its agent. Any Adjustment Shares shall be
         Restricted  Stock for all  purposes  of the Plan,  subject  to the same
         restrictions as the shares of Restricted Stock to which they relate. If
         a Non-Officer Director shall receive rights or warrants with respect to
         any shares of Restricted Stock or any Adjustment Shares, such rights or
         warrants may be held,  exercised,  sold or otherwise disposed of by the
         Non-Officer  Director,  and any shares or other securities  acquired by
         the Non-Officer  Director as a result of the exercise of such rights or
         warrants  likewise may be held,  sold, or otherwise  disposed of by the
         Non-Officer Director, free and clear of any restrictions.

      V.  FURTHER CONDITIONS.

      A. A Non-Officer  Director  granted an award of shares of Restricted Stock
shall,  unless the Company is  otherwise  advised in writing by the  Non-Officer
Director,  be deemed to  represent  to the  Company  that the  shares  are being
acquired for  investment  purposes  only and not with a view towards the further
resale or distribution thereof.

      B. The  Committee may make such  provisions  and take such steps as it may
deem necessary or appropriate  for the withholding of any taxes that the Company
is required by any law or  regulation  of any  governmental  authority,  whether
federal, state or local, domestic or foreign, to withhold in connection with the
award of any Restricted Stock, including, but not limited to (i) the withholding
of delivery of  certificates  for shares of Common  Stock until the  Non-Officer
Director  reimburses  the  Company  for the amount the  Company is  required  to
withhold with respect to such taxes,  (ii) the canceling of any number of shares
of Common Stock  issuable in an amount  sufficient  to reimburse the Company for
the amount it is required to so  withhold  or (iii)  withholding  the amount due
from any such Non-Officer Director's other compensation.

      VI. ADMINISTRATION. The Plan shall be administered by the Committee, which
shall have full and final authority to interpret the provisions of the Plan and,
subject to Article VIII hereof, to establish rules and regulations and otherwise
make determinations  regarding the administration and operation of the Plan. All
decisions and determinations by the Committee with respect to the Plan or awards
payable thereunder shall be final and binding upon all parties.

      VII.  ADJUSTMENT  UPON  CHANGES IN  CAPITALIZATION.  In the event that the
outstanding   shares  of  Common  Stock  are  hereafter  changed  by  reason  of
recapitalization,  reclassification,  stock  split,  combination  or exchange of
shares of Common Stock or the like,  or by the issuance of dividends  payable in
shares of Common Stock, an appropriate adjustment shall be made by the Committee
in the number of shares of Restricted Stock outstanding.

      VIII.  TERMINATION, MODIFICATION AND AMENDMENT.

      A. The Board may, at any time,  terminate  the Plan or, from time to time,
 make such modifications or amendments of the Plan as it may deem advisable.

      B.  Subject  to  Article  X.C  hereof,  no  termination,  modification  or
amendment  of the Plan may  adversely  affect the rights  under any  outstanding
shares of Restricted  Stock without the consent of the  Non-Officer  Director to
whom such shares of Restricted Stock shall have been previously awarded.

      IX. NOT A CONTRACT FOR CONTINUED SERVICE. Nothing contained in the Plan or
shall be  deemed to  confer  upon any  Non-Officer  Director  to whom  shares of
Restricted Stock are or may be awarded hereunder any right to remain a member of
the Board or in any way limit  the  right of the  Board or the  stockholders  to
terminate or fail to re-nominate or reelect any Non-Officer Director as a member
of the Board.

      X.  MISCELLANEOUS.

      A. The costs and expenses of administering  the Plan shall be borne by the
Company  and  shall not be  charged  against  any  award nor to any  Non-Officer
Director receiving an award.

      B. This Plan and actions  taken in connection  herewith  shall be governed
and construed in accordance with the laws of the State of New York.

      C. In the event of a merger,  consolidation or other business combination,
liquidation  or  reorganization  of the Company,  the  Committee may provide for
appropriate  adjustments,  including  rescinding  any grant of Restricted  Stock
under this Plan  within not more than two years  after the grant and only to the
extent  deemed  necessary  in the opinion of the  Company's  independent  public
accountants  to permit  the  Company  to engage  in a merger,  consolidation  or
business  combination  intended to be  accounted  for as a pooling of  interests
transaction.