CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
                            EXECUTIVE INCENTIVE PLAN











                             As Amended and Restated
                          Effective as of April 1, 1999







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                                      ( i )
                 CONSOLIDATED EDISON COMPANY OF NEW YORK, INC
                            EXECUTIVE INCENTIVE PLAN


                                     PURPOSE


In its  original  form,  the  Consolidated  Edison  Company  of New  York,  Inc.
Executive  Incentive Plan (the "Plan") was effective as of March 23, 1982.  This
document  reflects the  revisions to the Plan which are effective as of April 1,
1999. As to a Participant  who is in the employ of the Company or its Affiliated
Companies  on April 1,  1999,  the  Mandatory  Deferral  Portions  and  Optional
Deferral Portions of Incentive Awards credited on the Participant's behalf prior
to  April  1,  1999  and  deferred  to a date  beyond  April  1,  1999  shall be
transferred  to and  administered  under  the  Deferred  Income  Plan as soon as
practicable after April 1, 1999.

The purpose of the Plan is to provide  executives  designated  by the  Company's
Board of  Trustees as eligible to  participate  in the Plan with  incentives  to
achieve goals which are important to shareholders  and customers of the Company,
to supplement the Company's salary and benefit programs so as to provide overall
compensation for such executives  which is more  competitive  with  corporations
with which the Company must compete for the best executive talent, and to assist
the Company in  attracting  and  retaining  executives  who are important to the
continued success of the Company.


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                CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
                            EXECUTIVE INCENTIVE PLAN

                                TABLE OF CONTENTS
                                  

                                                                            Page

                                     
                  CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
                            EXECUTIVE INCENTIVE PLAN
                                TABLE OF CONTENTS

ARTICLE I.  DEFINITIONS......................................................1
      1.01  Adjusted Maximum Incentive Fund..................................1
      1.02  Affiliated Company...............................................1
      1.03  Award Date.......................................................1
      1.04  Board or Board of Trustees.......................................1
      1.05  Change in Control................................................1
      1.06  Company..........................................................4
      1.07  Deferred Income Plan.............................................4
      1.08  Disability.......................................................4
      1.09  Equivalent Stock Account.........................................5
      1.10  Equivalent Stock Unit............................................5
      1.11  Incentive Award..................................................5
      1.12  Incentive Percentage.............................................5
      1.13  Management Retirement Plan.......................................5
      1.14  Mandatory Deferral Portion.......................................5
      1.15  Maximum Incentive Fund...........................................5
      1.16  Normal Retirement Age............................................5
      1.17  Optional Deferral Portion........................................5
      1.18  Participant......................................................5
      1.19  Plan.............................................................6
      1.20  Plan Administrator...............................................6
      1.21  Potential Award..................................................6
      1.22  Potential Change in Control......................................6
      1.23  Valuation Date...................................................6

ARTICLE II.  ELIGIBILITY.....................................................6

ARTICLE III.  ADMINISTRATION.................................................7

ARTICLE IV.  DETERMINATION OF AWARDS.........................................7
      4.01  Incentive Percentages............................................7
      4.02  Maximum Incentive Fund...........................................8
      4.03  Adjusted Maximum Incentive Fund..................................9
      4.04  Incentive Awards.................................................9

ARTICLE V.  DEFERRAL OF AWARDS..............................................10
      5.01  Mandatory Deferral Portion......................................10
      5.02  Optional Deferral Portion.......................................11
      5.03  Transfer to Deferred Income Plan................................11

ARTICLE VI.  VALUATION OF AWARD.............................................12
      6.01  Non-Deferred Awards.............................................12
      6.02  Equivalent Stock Account........................................12
      6.03  Common Stock Value..............................................13

ARTICLE VII.  PAYMENT OF AWARDS.............................................14
      7.01  Time of Payment.................................................14
      7.02  Amount of Payment...............................................14
      7.03  Manner of Payment...............................................15
      7.04  Forfeiture......................................................15
      7.05  Posthumous Payments.............................................15
      7.06  Payment Upon the Occurrence of a Change in Control..............16

ARTICLE VIII.  ELECTIONS....................................................17
      8.01  Manner..........................................................17
      8.02  Timing..........................................................17
      8.03  Presumptions....................................................17

ARTICLE IX.  MISCELLANEOUS..................................................18
      9.01  Amendment and Termination.......................................18
      9.02  Effect of Plan..................................................18
      9.03  Withholding.....................................................19
      9.04  Funding.........................................................19
      9.05  Facility of Payment.............................................20
      9.06  Nonalienation...................................................20


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                  CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
                            EXECUTIVE INCENTIVE PLAN


                             ARTICLE I. DEFINITIONS


The following  terms when  capitalized  herein shall have the meanings set forth
below.

1.01  Adjusted  Maximum  Incentive  Fund  shall  have the  meaning  set forth in
      Section 4.03(c).

1.02  Affiliated  Company shall mean any company other than the Company which is
      a member of a  controlled  group of  corporations  (as  defined in Section
      414(b) of the Code) which also includes as a member the Company; any trade
      or business  under  common  control  (as defined in Section  414(c) of the
      Code) with the Company;  any  organization  (whether or not  incorporated)
      which is a member of an  affiliated  service  group (as defined in Section
      414(m) of the Code)  which  includes  the  Company;  and any other  entity
      required to be aggregated with the Company  pursuant to regulations  under
      Section 414(o) of the Code.

1.03  Award Date shall mean, with respect to any Incentive  Award,  January 1 of
      the year following the year to which such Incentive Award relates.

1.04  Board  or Board of  Trustees  shall  mean  the  Board of  Trustees  of the
      Company.

1.05  Change in Control shall mean an event which shall occur if:
      (a)   any person, as defined in Section 3(a)(9) of the Securities
            Exchange Act of 1934  ("Exchange  Act"), as such term is modified in
            Sections  13(d) and 14(d) of the  Exchange  Act (other  than (i) any
            employee  plan  established  by any  "Corporation"  (which for these
            purposes  shall be deemed  to be the  Company  and any  corporation,
            association,  joint
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            venture,  proprietorship or partnership which is
            connected with the Company either through stock ownership or through
            common  control,  within the meaning of Sections  414(b) and (c) and
            1563 of the Code),  (ii) the  Company or any of its  affiliates  (as
            defined in Rule 12b-2  promulgated under the Exchange Act), (iii) an
            underwriter  temporarily  holding securities pursuant to an offering
            of  such  securities,  or  (iv) a  corporation  owned,  directly  or
            indirectly, by stockholders of the Company in substantially the same
            proportions as their  ownership of the Company) (a "Person"),  is or
            becomes the beneficial  owner (as defined in Rule 13d-3  promulgated
            under the Exchange Act),  directly or  indirectly,  of securities of
            the Company  (excluding  from the securities  beneficially  owned by
            such Person any securities directly acquired from the Company or its
            affiliates  other than in  connection  with the  acquisition  by the
            Company or its affiliates of a business)  representing 20 percent 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 voting securities;
      (b)   during any period of up to two consecutive years (not including
            any period prior to April 1, 1999) individuals who, at the
            beginning of such period, constitute the Board cease for any
            reason to constitute a majority of the directors then serving on
            the Board, provided that any person who becomes a director
            subsequent to the beginning of such period and whose appointment
            or election by the Board or nomination for election by the
            Company's shareholders was approved by at least two-thirds of the
            directors then still in office who either were directors at the
            beginning of such period or whose appointment, election or
            nomination for election was previously so approved (other than a
            director (i) whose initial assumption of office is in connection
            with an actual or threatened election contest relating to the
            election of the directors of the Company, as such terms are used
            in Rule 14a-11 of Regulation 14A under the Exchange Act, or (ii)
            who was designated by a 

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            person who has entered into an agreement
            with the Company to effect a transaction described in paragraph
            (a), (c) or (d) of this Section 1.05) shall be deemed a director
            as of the beginning of such period;
      (c)   consummation of a merger or consolidation of the Company with any
            other corporation or approval of the issuance of voting
            securities of the Company in connection with a merger or
            consolidation of the Company occurs (other than (i) a merger or
            consolidation that would result in the voting securities of the
            Company outstanding immediately prior thereto 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 any Corporation, at least 51 percent 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 (ii) 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 (as defined in paragraph (a) above), 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 the
            affiliates of a business) representing 20 percent 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
            voting securities); or
      (d)   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 percent of the 

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            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 the 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 integrated  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 integrated transactions.

1.06  Company shall mean  Consolidated  Edison Company of New York,  Inc. or any
      successor by merger,  purchase or otherwise;  provided,  however, that for
      purposes of Section 1.05,  Section 1.22,  the second  paragraph of Section
      5.01(b),  Section 6.02 (with the  exception  of the next to last  sentence
      thereof), Section 6.03, and Section 7.06, "Company" shall mean the highest
      level holding company of Consolidated Edison Company of New York, Inc. (or
      any successor thereto which continues this Plan) which has publicly traded
      common stock.
1.07 Deferred  Income Plan shall mean the  Consolidated  Edison  Company of New
      York, Inc. Deferred Income Plan, as amended from time to time.

1.08  Disability  shall mean  circumstances  under which a Participant  would be
      entitled  to  receive a pension  by reason of  disability  (or would be so
      entitled  but for failure to satisfy  vesting,  age, or  length-of-service
      requirements) under the Management Retirement Plan.

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1.09  Equivalent  Stock  Account  shall  mean  an  account   established  for  a
      Participant pursuant to Section 6.02.

1.10 Equivalent Stock Unit shall have the meaning set forth in Section 6.02.

1.11 Incentive Award shall have the meaning set forth in Section 4.04.

1.12 Incentive Percentage shall have the meaning set forth in Section 4.01.

1.13  Management  Retirement Plan shall mean The Consolidated  Edison Retirement
      Plan for Management Employees, as amended from time to time.

1.14  Mandatory  Deferral  Portion  shall mean the  one-third of each  Incentive
      Award that is required to be deferred pursuant to Section 5.01.

1.15  Maximum  Incentive  Fund  shall  have the  meaning  set  forth in  Section
      4.02(a).

1.16  Normal  Retirement  Age  shall  mean the later of the  Participant's  65th
      birthday or the fifth  anniversary of the  Participant's  participation in
      the Management Retirement Plan.

1.17  Optional  Deferral  Portion shall mean the  two-thirds  of each  Incentive
      Award that is permitted to be deferred pursuant to Section 5.02.

1.18  Participant  shall mean any executive who at any time shall be eligible to
      participate in the Plan.

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1.19  Plan  shall  mean  the  Consolidated  Edison  Company  of New  York,  Inc.
      Executive Incentive Plan, as in effect from time to time.

1.20  Plan  Administrator  shall mean the individual  appointed by the Company's
      Chief Executive Officer to administer the Plan as provided in Article III.

1.21 Potential Award shall have the meaning set forth in Section 4.02(c).

1.22  Potential  Change in Control shall mean an event which shall occur if: (a)
      the Company enters into a definitive written agreement, the
            consummation of which would result in the occurrence of a Change
            in Control;
      (b)   the Company or any Person (as defined in Section  1.05(a))  publicly
            announces an intention to take or to consider  taking actions which,
            if consummated, would constitute a Change in Control; or
      (c)   any Person  becomes the  beneficial  owner (as defined in Rule 13d-3
            promulgated  under the Exchange  Act),  directly or  indirectly,  of
            securities  of the  Company  representing  15 percent or more of the
            then  outstanding  shares  of  Common  Stock of the  Company  or the
            combined voting power of the Company's then outstanding securities.

1.23  Valuation  Date shall have the meaning set forth in Section  6.01 or 6.02,
      whichever is applicable.

                             ARTICLE II. ELIGIBILITY

The Board,  in its  discretion,  from time to time, may designate and change the
designation  of  the  executives  or  executive   position  levels  eligible  to
participate in the Plan. To be eligible to receive an 

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award under the Plan for a  particular  year,  an  executive  must (a) have been
employed  by the  Company  during any  portion  of such year and (b)  achieve an
eligible position level or be designated by the Board as eligible not later than
September 30 of such year.

                           ARTICLE III. ADMINISTRATION

Except as otherwise  provided in the Plan, all determinations in connection with
the Plan shall be made by the Plan Administrator, whose decisions shall be final
and conclusive upon all Participants and any persons asserting any claim derived
from a Participant.  The Plan Administrator shall make such determinations after
receiving the  recommendations  of the Company's Chief Executive Officer (except
as to matters  relating to the  participation  of the Company's  Chief Executive
Officer  in  the  Plan).   The  Plan   Administrator   shall  abstain  from  any
determination  under  the Plan in which he or she has a  personal  interest,  in
which case such  determination  shall be made by the Company's  Chief  Executive
Officer.  The Plan Administrator  shall be responsible for the administration of
the Plan under the direction of the Company's Chief Executive Officer.

                       ARTICLE IV. DETERMINATION OF AWARDS

4.01  Incentive Percentages
      The  Board  shall  determine  a  percentage  of  annual  salary  deemed to
      constitute  an  appropriate  incentive  for each  executive  or  executive
      position level eligible to participate in the Plan.  Each such  percentage
      is herein  called an "Incentive  Percentage".  The Board may, from time to
      time, increase or decrease any Incentive Percentage, as the Board may deem
      appropriate.

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4.02  Maximum Incentive Fund
(a) At the  end of each  year,  the  annual  rate of  salary  of each  executive
eligible to  participate  in the Plan for such year, as such salary is in effect
at the end of  such  year,  shall  be  multiplied  by the  Incentive  Percentage
applicable  to such  person  at such  time.  The  sum of such  products  for all
executives eligible to participate As Amended and Restated Effective as of April
1, 1999in the Plan for such year is herein called the
      "Maximum Incentive Fund" for such year.

(b)   For purposes of calculating  the Maximum  Incentive Fund for any year: (i)
      In the case of an executive whose employment with the Company has
            terminated during the year, the annual salary rate of such executive
            in effect at the time of such termination  shall be deemed to be the
            annual  salary  rate of  such  executive  at the  end of such  year,
            subject to paragraph (ii) next following.
      (ii)  The annual  salary rate,  at the end of the year,  for any executive
            who  became  eligible  to  participate  during  the  year  or  whose
            employment  with the  Company  terminated  during  the year shall be
            deemed reduced by one-twelfth  for each whole calendar month of such
            year before such executive became eligible or after such executive's
            employment terminated.
      (iii) Deferred  compensation,  at the annual  rate in effect at the end of
            the  year  pursuant  to an  agreement  between  the  Company  and an
            executive,  shall be considered part of such executive's annual rate
            of salary at the end of such year.
      (iv)  An executive's annual rate of salary shall be determined without any
            deduction for pre-tax contributions or after-tax  contributions made
            pursuant  to the Con  Edison  Thrift  Savings  Plan  for  Management
            Employees,  the Con Edison Flexible  Reimbursement


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Account  Plan for  Management  Employees,  the Con Edison  OPTIONS  Program  for
Management Employees, or the Deferred Income Plan.

(c)   The  amount  included  in the  Maximum  Incentive  Fund for any year  with
      respect to each executive  (determined  without regard to Section 4.02(d))
      is called such executive's "Potential Award".

(d)   Notwithstanding  any other  provision of the Plan,  the Maximum  Incentive
      Fund for any year may not exceed  one-half  of 1 percent of the  Company's
      net income for common stock for such year.

4.03  Adjusted Maximum Incentive Fund
(a)   In January of each year the Board  shall  determine  whether  award of the
      Maximum  Incentive  Fund for the preceding  year is appropriate or whether
      and to what  extent  such  Maximum  Incentive  Fund  shall be  reduced  or
      eliminated  entirely.  In  making  such  determination,  the  Board  shall
      consider the Company's  performance during the preceding year, taking into
      account such factors as the Board deems relevant.

(b)   The  Maximum  Incentive  Fund for any year in which  the  Company  omits a
      dividend on its common stock shall be reduced to zero.

(c)   The Maximum Incentive Fund for a year, reduced by any adjustments pursuant
      to this Section 4.03, is herein  called the  "Adjusted  Maximum  Incentive
      Fund".

4.04  Incentive Awards
      After the Adjusted  Maximum  Incentive Fund for a year has been determined
      as provided in Section 4.03, the Executive Personnel and Pension Committee
      of the Board,  upon the

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recommendations of the Company's Chief Executive Officer (except with respect to
his own award),  shall make,  subject to  confirmation  by the Board,  awards to
individual  Participants  who are eligible to  participate  in the Plan for such
year. Such awards are herein called "Incentive  Awards".  Incentive Awards shall
be determined in the following manner:

(a)   Each Incentive Award shall be determined in the light of the  contribution
      of the Participant's group to the overall performance of the Company,  the
      Participant's  contribution to the performance of the Participant's group,
      and the Participant's individual performance.
(b)   An Incentive Award may range from zero to 150 percent of the Participant's
      Potential Award for the year in question.
(c)   The  aggregate  of all  Incentive  Awards  for a year may not  exceed  the
      Adjusted Maximum Incentive Fund for such year.

                          ARTICLE V. DEFERRAL OF AWARDS

5.01  Mandatory Deferral Portion
(a)   One-third of each Incentive Award shall be allocated to the  Participant's
      Equivalent  Stock  Account and shall be deferred  until the earlier of (i)
      the  fifth  anniversary  of  the  Award  Date  or  (ii)  the  date  of the
      Participant's  termination  of employment  with the Company and Affiliated
      Companies, except as otherwise provided in Section 7.06.

(b)   Notwithstanding the provisions of paragraph (a) above, the Participant
      may elect to defer all or any part of such one-third for a further
      period ending on the earlier of (i) the sixth or any later anniversary
      of the Award Date or (ii) the date of the Participant's termination of
      employment with the Company and Affiliated Companies; provided however,
      that if the Participant makes a deferral election with respect to any
      portion of the Mandatory Deferral Portion of an Incentive


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     Awardpursuant to this paragraph (b), on the fifth  anniversary of the Award
Date of such Incentive Award, the value of the portion of the Mandatory Deferral
Portion of an Incentive  Award so deferred shall be  administered  and accounted
for under the Deferred Income Plan.

      The  value  of such  Mandatory  Deferral  Portion  or part  thereof  to be
      administered and accounted for under the Deferred Income Plan shall be the
      value  on the  fifth  anniversary  of the  Award  Date of  such  Mandatory
      Deferral  Portion  of a number of shares  of common  stock of the  Company
      equal to the number of Equivalent Stock Units in the respective subaccount
      for the Mandatory  Deferral Portion or part thereof to be administered and
      accounted for under the Deferral Income Plan.

5.02  Optional Deferral Portion
      Up to  two-thirds  of  each  Incentive  Award  may,  at the  Participant's
      election, be deferred to the earlier of (a) the third or later anniversary
      of the  Award  Date  of  such  Incentive  Award,  or (b)  the  date of the
      Participant's  termination  of employment  with the Company and Affiliated
      Companies;  provided  however,  that if the  Participant  makes a deferral
      election with respect to any portion of the Optional  Deferral  Portion of
      an Incentive  Award  pursuant to this Section  5.02,  on the Award Date of
      such  Incentive  Award the value of the portion of the  Optional  Deferral
      Portion so deferred  shall be  administered  and  accounted  for under the
      Deferred Income Plan.

5.03  Transfer to Deferred Income Plan
      The portion of a Participant's  accounts deferred hereunder prior to April
      1, 1999, which are no longer subject to potential  forfeiture  pursuant to
      Section 7.04 as of such date,  shall be transferred to the Deferred Income
      Plan and thereafter be administered  and accounted for  thereunder.  As of
      the date that other amounts deferred  hereunder prior to April 1, 1999 are
      no longer subject to 
 
<PAGE>

      potential  forfeiture  pursuant to Section 7.04, such
      amounts shall be transferred to the Deferred Income Plan and thereafter be
      administered and accounted for thereunder.

                         ARTICLE VI. VALUATION OF AWARD

6.01  Non-Deferred Awards
      The Valuation Date of any portion of the Optional  Deferral  Portion of an
      Incentive Award that is not deferred pursuant to Section 5.02 shall be the
      Award  Date,  and the value on the  Valuation  Date  shall be equal to the
      amount of such portion.

6.02  Equivalent Stock Account
      An Equivalent Stock Account shall be established for each  Participant.  A
      separate   subaccount  within  such  Equivalent  Stock  Account  shall  be
      established  for  each  Mandatory   Deferral  Portion  allocated  to  such
      Equivalent  Stock Account.  Each Mandatory  Deferral  Portion so allocated
      shall be converted to a number of Equivalent  Stock Units  calculated  (to
      the nearest  thousandth)  by dividing (x) such portion by (y) the value of
      one share of the Company's  common stock on the Award Date, and the number
      of  Equivalent  Stock  Units  so  calculated  shall  be  credited  to  the
      respective  subaccount within the Participant's  Equivalent Stock Account.
      On each  dividend  payment date for the Company's  common stock  occurring
      between the Award Date and the Valuation Date of such  Mandatory  Deferral
      Portion,  there  shall  be  credited  to such  subaccount  the  number  of
      additional  Equivalent Stock Units calculated (to the nearest  thousandth)
      by  dividing  (x) the amount of the total  dividend  which would have been
      paid on a number of shares (including  fractional shares) of the Company's
      common stock equal to the closing  balance (in Equivalent  Stock Units) in
      such subaccount on the record date for such dividend  payment date, by (y)
      the  value of one  share of the  Company's  common  stock on the  dividend
      payment  date.  In the 

<PAGE>

      event  of a  dividend  payable  in  shares  of the
      Company's  common stock, a like number of Equivalent  Stock Units shall be
      added to the  subaccount.  The Valuation Date of such  Mandatory  Deferral
      Portion  of an  Incentive  Award  shall be the date on  which  occurs  the
      earliest of: (a) the  Participant's  termination  of  employment  with the
      Company and
            Affiliated Companies on or after the Participant's Normal
            Retirement Age;
      (b)   the Participant's death;
      (c)   the Participant's Disability; or
      (d)   the fifth  anniversary of the Award Date of such Incentive  Award if
            the Participant  has not terminated  employment with the Company and
            Affiliated Companies on or prior to such date;
      provided,  however,  that  if the  Participant's  date of  termination  of
      employment with the Company and Affiliated  Companies  occurs prior to the
      earliest  of the dates  specified  in (a)  through (d) above but the Chief
      Executive Officer of the Company makes a determination pursuant to Section
      7.04 that no forfeiture shall occur, the Valuation Date shall be such date
      of  termination.  The  value of such  Mandatory  Deferral  Portion  on the
      Valuation Date shall be the value,  on the Valuation  Date, of a number of
      shares of the  Company's  common  stock equal to the number of  Equivalent
      Stock Units in the respective subaccount on the Valuation Date.

6.03  Common Stock Value
      For all purposes of the Plan, the value of a share of the Company's common
      stock, as of any date,  shall be deemed to be the mean of the high and low
      sale price for such a share  reported on the New York Stock  Exchange  for
      trading on such date (or, if there was no reported trade for such date, on
      the first day of trading  thereafter).  Appropriate  adjustments  shall be
      made in the event of a stock split, reclassification or reorganization.

<PAGE>


                         ARTICLE VII. PAYMENT OF AWARDS

7.01  Time of Payment
(a)   Each portion of a Mandatory Deferral Portion of an Incentive Award (i)
      for which the deferral election in Section 5.01(b) has not been made or
      (ii) for which such deferral election has been made and the Participant
      (A) does not terminate employment with the Company and Affiliated
      Companies until on or after the earliest of the dates specified in (a)
      through (d) of Section 6.02 or (B) terminates employment with the
      Company and Affiliated Companies prior to the earliest of the dates
      specified in (a) through (d) of Section 6.02 but the Chief Executive
      Officer of the Company makes a determination pursuant to Section 7.04
      that no forfeiture shall be made, shall become payable as soon as
      administratively practicable after its respective Valuation Date, as
      provided in this Article VII.

(b)   Each portion of an Optional Deferral Portion for which a deferral election
      under  Section  5.02 has not been made  shall  become  payable  as soon as
      administratively  practicable  after its  respective  Valuation  Date,  as
      provided in this Article VII.

7.02  Amount of Payment
      Each portion of (a) the Mandatory  Deferral  Portion of an Incentive Award
      (i) for which the deferral  election in Section  5.01(b) has not been made
      or (ii) for which such deferral election has been made and the Participant
      (A)  does  not  terminate  employment  with  the  Company  and  Affiliated
      Companies  until on or after the  earliest of the dates  specified  in (a)
      through (d) of Section 6.02 or (B) terminates  employment with the Company
      and Affiliated  Companies  prior to the earliest of the dates specified in
      (a) through  (d) of Section  6.02 but the Chief  Executive  Officer of the
      Company makes a determination  pursuant to Section 7.04 that no forfeiture
      shall be 

<PAGE>

      made, and (b) an Optional  Deferral  Portion for which a deferral
      election under Section 5.02 has not been made,  shall be paid at its value
      on the Valuation Date, as determined pursuant to Article VI.

7.03  Manner of Payment
(a)   Any portion of the Mandatory  Deferral Portion of an Incentive Award which
      becomes payable on or prior to the fifth  anniversary of the Award Date of
      such  Incentive  Award shall be paid to the  Participant  in a single lump
      sum.

(b)   Any portion of the Optional  Deferral  Portion of an  Incentive  Award for
      which a deferral  election  under  Section 5.02 has not been made shall be
      paid to the Participant in a single lump sum.

7.04  Forfeiture
      Unless  the  Chief  Executive  Officer  of  the  Company  shall  otherwise
      determine,  the Mandatory  Deferral Portion of an Incentive Award shall be
      forfeited, and no amount shall be payable to the Participant in respect of
      such portion,  if the employment of the  Participant  with the Company and
      Affiliated  Companies  shall be  terminated,  other  than on or after  the
      Participant's  Normal  Retirement Age or by reason of death or Disability,
      prior to the fifth  anniversary of the Award Date of such Incentive Award.
      Notwithstanding  the prior sentence,  no forfeiture  shall occur after the
      date a Change in Control occurs.

7.05  Posthumous Payments
      Subject to Section  7.04 and  Section  9.05,  if a  Participant  shall die
      before all  payments  to be made to the  Participant  under this Plan have
      been  made,  the  remaining  payment  or  payments  shall  be  made to the
      Participant's estate or personal representative in a single lump sum, with
      such

<PAGE>

      posthumous payment to be made as soon as administratively practicable
      after the Participant's death.

7.06 Payment Upon the Occurrence of a Change in Control (a) Unless a Participant
elects otherwise prior to the date a Change in
      Control occurs, upon the occurrence of a Change in Control the Participant
      shall  automatically  receive  the  value,  as of the date the  Change  in
      Control occurs, of a number of shares of common stock of the Company equal
      to the number of Equivalent Stock Units in the respective subaccount as of
      the date the  Change in Control  occurs.  Such  payment  will be made in a
      single lump sum as soon as administratively practicable after the date the
      Change in Control occurs.

(b)   If, due to an election pursuant to paragraph (a) above, a Participant
      is not to receive a single lump sum upon a Change in Control, the
      Participant may elect, within 30 days after the date the Change in
      Control occurs, to receive, in a single lump sum, the value, on the
      date the Change in Control occurs, of a number of shares of common
      stock of the Company equal to the number of Equivalent Stock Units in
      the respective subaccount on the date the Change in Control occurs,
      reduced by the prime rate as published in the Wall Street Journal on
      the date the Change in Control occurs plus 100 basis points.  Such
      payment will be made as soon as administratively practicable after the
      Participant's election is received by the Plan Administrator.

(c)   The elections  permitted to  Participants  by paragraphs (a) and (b) above
      shall be made by a writing signed by the  Participant and delivered to the
      Plan Administrator.


<PAGE>

                             ARTICLE VIII. ELECTIONS

8.01  Manner
      The elections  permitted to  Participants by Section 5.01 and Section 5.02
      shall be made by a writing signed by the  Participant and delivered to the
      Plan  Administrator.  A separate election may be made with respect to each
      Incentive Award. An election made for any Incentive Award shall govern all
      subsequent  Incentive  Awards,  unless a new election is timely made as to
      subsequent Incentive Awards.

8.02  Timing
      The  elections  pursuant to Section  5.01 and Section 5.02 with respect to
      any Incentive  Award must be made prior to the Award Date. An election may
      be changed at any time up to the  deadline for making such  election,  but
      not thereafter.

8.03  Presumptions
      In the absence of a valid election to the contrary by the Participant, the
      following presumptions shall apply:
(a)   The Participant  elects not to defer any portion of the Mandatory Deferral
      Portion of an Incentive  Award pursuant to Section 5.01 beyond the minimum
      mandatory deferral.
(b)   The Participant  elects not to defer any portion of the Optional  Deferral
      Portion of an Incentive Award pursuant to Section 5.02.

<PAGE>

                            ARTICLE IX. MISCELLANEOUS

9.01  Amendment and Termination
      The Company  reserves the right,  by action of the Board of  Trustees,  to
      terminate the Plan entirely, or to temporarily or permanently  discontinue
      the making of awards under the Plan;  and further  reserves the right,  by
      action of the Board of Trustees or the Plan  Administrator,  to  otherwise
      modify  the Plan from time to time;  provided  that no such  modification,
      termination,  or  discontinuance  shall  adversely  affect  the  rights of
      Participants with respect to Incentive Awards previously  determined;  and
      provided further, that no modification by action of the Plan Administrator
      shall have a material effect on the benefits  payable under the Plan. Upon
      termination  of the Plan,  the Board of Trustees may elect to continue the
      Plan with respect to deferred  portions of Incentive  Awards, or may elect
      to  distribute  immediately  such  deferred  portions  in single  lump sum
      payments,  with appropriate adjustments in valuation, as determined by the
      Board.

9.02  Effect of Plan
      The  establishment  and  continuance  of the Plan shall not  constitute  a
      contract of  employment  between the Company and any  employee.  No person
      shall have any claim to be granted an award under the Plan and there is no
      obligation for uniformity of treatment of employees or Participants  under
      the Plan.  Neither  the Plan nor any action  taken under the Plan shall be
      construed  as giving to any  employees  the  right to be  retained  in the
      employ of the Company,  nor any right to examine the books of the Company,
      or to require an accounting.

<PAGE>

9.03  Withholding
      The Company  shall  deduct from any  payment  under the Plan any  federal,
      state,  or local taxes required by law to be withheld with respect to such
      payment.

9.04  Funding
(a)   All  amounts  payable  in  accordance  with this Plan shall  constitute  a
      general unsecured obligation of the Company.  Such amounts, as well as any
      administrative  costs  relating  to the  Plan,  shall  be paid  out of the
      general  assets of the Company,  to the extent not paid from the assets of
      any trust established pursuant to paragraph (b) below.

(b)   The Company may, for administrative reasons, establish a grantor trust
      for the benefit of Participants in the Plan.  Notwithstanding the
      foregoing sentence, the Company shall, upon a Potential Change in
      Control, establish a grantor trust for the benefit of the Participants
      in the Plan and shall fund such trust at a level at least equal to the
      liabilities of the Plan as of the day before the Potential Change in
      Control occurred. The assets placed in such trust shall be held
      separate and apart from other Company funds and shall be used
      exclusively for the purposes set forth in the Plan and the applicable
      trust agreement, subject to the following conditions:
      (i)   the creation of such trust shall not cause the Plan to be other
            than "unfunded" for purposes of Title I of ERISA;
      (ii)  the Company shall be treated as "grantor" of such trust for
            purposes of Section 677 of the Code; and
      (iii) the  agreement  of such trust shall  provide  that its assets may be
            used upon the  insolvency  or  bankruptcy  of the Company to satisfy
            claims of the  Company's  general  creditors  and that the rights of
            such general  creditors  are  enforceable  by them under federal and
            state law.

<PAGE>

9.05  Facility of Payment
      In the event that the Plan Administrator  shall find that a Participant is
      unable  to care for such  Participant's  affairs  because  of  illness  or
      accident  or  because  he  or  she  is a  minor  or  has  died,  the  Plan
      Administrator  may,  unless claim shall have been made  therefor by a duly
      appointed  legal  representative,  direct that any benefit payment due the
      Participant,  to the extent not payable from a grantor  trust,  be paid on
      the Participant's behalf to the Participant's spouse, a child, a parent or
      other blood relative,  or to a person with whom the Participant resides or
      a legal  guardian,  and any  such  payment  so made  shall  be a  complete
      discharge of the liabilities of the Company and the Plan therefor.

9.06  Nonalienation
      Subject to any applicable  law, no benefit under the Plan shall be subject
      in any manner to anticipation,  alienation,  sale,  transfer,  assignment,
      pledge, encumbrance or charge, and any attempt to do so shall be void, nor
      shall  any  such  benefit  be in  any  manner  liable  for or  subject  to
      garnishment,  attachment,  execution or levy,  or liable for or subject to
      the  debts,  contracts,  liabilities,  engagements  or torts of the person
      entitled to such benefits.

      IN WITNESS  WHEREOF,  Consolidated  Edison  Company of New York,  Inc. has
caused this  instrument to be executed by its officer  thereunto duly authorized
as of the 25th day of March, 1999.

                                    By: Richard P. Cowie
                                    Vice President-Employee Relations
                                    Consolidated Edison Company of
                                    New York, Inc.