AGREEMENT
     
     
               THIS AGREEMENT, dated JAN 22, 1996, is made
     by and between Orange and Rockland Utilities, Inc., a New
     York corporation (the "Company"), and D. Louis Peoples
     (the "Executive").
               WHEREAS, the Company considers it essential to
     the best interests of its shareholders to foster the
     continuous employment of key management personnel; and
               WHEREAS, the Board recognizes that, as is the
     case with many publicly held corporations, the possibili-
     ty of a Change in Control exists and that such possibili-
     ty, and the uncertainty and questions which it may raise
     among management, may result in the departure or distrac-
     tion of management personnel to the detriment of the
     Company and its shareholders; and
               WHEREAS, the Board has determined that appro-
     priate steps should be taken to reinforce and encourage
     the continued attention and dedication of members of the
     Company's management, including the Executive, to their
     assigned duties without distraction in the face of poten-
     tially disturbing circumstances arising from the possi-
     bility of a Change in Control; and
               WHEREAS, the Company has previously entered
     into an Agreement with the Executive dated October 18,
     1995 (the "Prior Agreement") and has previously entered
     into a letter agreement with the Executive dated April 6,
     1995 (the "Letter Agreement").
               NOW, THEREFORE, in consideration of the premis-
     es and the mutual covenants herein contained, the Company
     and the Executive hereby agree as follows:
               1.  Defined Terms.  The definitions of capital-
     ized terms used in this Agreement are provided in the
     last Section hereof.
               2.  Company's Covenants Summarized.  In order
     to induce the Executive to remain in the employ of the
     Company and in consideration of the Executive's covenants
     set forth in Section 3 hereof, the Company agrees, under
     the conditions described herein, to pay the Executive the
     Severance Payments and the other payments and benefits
     described herein in the event the Executive's employment
     with the Company is (or, under the terms of the second
     sentence of Section 6.1 hereof, is deemed to have been)
     terminated following a Change in Control and during the
     term of this Agreement.  Except as provided in the first
     sentence of Section 6.2(A) hereof and Section 9.1 hereof,
     no amount or benefit shall be payable under this Agree-
     ment unless there shall have been (or, under the terms of
     the second sentence of Section 6.1 hereof, there shall be
     deemed to have been) a termination of the Executive's
     employment with the Company following a Change in Control
     and during the Term of this Agreement.  This Agreement
     shall not be construed as creating an express or implied
     contract of employment and, except as otherwise agreed in
     writing between the Executive and the Company, the Execu-
     tive shall not have any right to be retained in the
     employ of the Company.
               3.  The Executive's Covenants.  The Executive
     agrees that, subject to the terms and conditions of this
     Agreement, in the event of a Potential Change in Control
     during the term of this Agreement, the Executive will
     remain in the employ of the Company until the earliest of
     (i) a date which is six (6) months from the date of such
     Potential Change of Control, (ii) the date of a Change in
     Control, (iii) the date of termination by the Executive
     of the Executive's employment for Good Reason or by
     reason of death, Disability or Retirement, or (iv) the
     termination by the Company of the Executive's employment
     for any reason.
               4.  Term of Agreement.  This Agreement shall
     commence on the date hereof and shall continue in effect
     for a period of thirty-six (36) months beyond the month
     in which a Change in Control occurs (or, if later, thir-
     ty-six (36) months beyond the consummation of the trans-
     action the approval of which by the Company's sharehold-
     ers constitutes a Change in Control under Section
     15(E)(III) or (IV) hereof).
               5.  Compensation Other Than Severance Payments. 
               5.1  Following a Change in Control and during
     the term of this Agreement, during any period that the
     Executive fails to perform the Executive's full-time
     duties with the Company as a result of incapacity due to
     physical or mental illness, the Company shall pay the
     Executive's full salary to the Executive at the rate in
     effect at the commencement of any such period, together
     with all compensation and benefits payable to the Execu-
     tive under the terms of any compensation or benefit plan,
     program or arrangement maintained by the Company during
     such period, until the Executive's employment is termi-
     nated by the Company for Disability.
               5.2  If the Executive's employment shall be
     terminated for any reason following a Change in Control
     and during the term of this Agreement, the Company shall
     pay the Executive's full salary to the Executive through
     the Date of Termination at the rate in effect at the time
     the Notice of Termination is given, together with all
     compensation and benefits to which the Executive is
     entitled in respect of all periods preceding the Date of
     Termination under the terms of the Company's compensation
     and benefit plans, programs or arrangements.
               5.3  If the Executive's employment shall be
     terminated for any reason following a Change in Control
     and during the term of this Agreement, the Company shall
     pay the Executive's normal post-termination compensation
     and benefits to the Executive as such payments become
     due.  Such post-termination compensation and benefits
     shall be determined under, and paid in accordance with,
     the Company's retirement, insurance and other compensa-
     tion or benefit plans, programs and arrangements.
               6.  Severance Payments.
               6.1  Subject to Section 6.2 hereof, the Company
     shall pay the Executive the payments described in this
     Section 6.1 (the "Severance Payments") upon the termina-
     tion of the Executive's employment following a Change in
     Control and during the term of this Agreement, in addi-
     tion to any payments and benefits to which the Executive
     is entitled under Section 5 hereof, unless such termina-
     tion is (i) by the Company for Cause, (ii) by reason of
     death or Disability, or (iii) by the Executive without
     Good Reason.  For purposes of this Agreement, the
     Executive's employment shall be deemed to have been
     terminated by the Company without Cause or by the Execu-
     tive with Good Reason following a Change in Control if
     (i) the Executive's employment is terminated without
     Cause prior to a Change in Control and such termination
     was at the request or direction of a Person who has en-
     tered into an agreement with the Company the consummation
     of which would constitute a Change in Control, (ii) the
     Executive terminates his employment with Good Reason
     prior to a Change in Control and the circumstance or
     event which constitutes Good Reason occurs at the request
     or direction of such Person, or (iii) the Executive's
     employment is terminated without Cause prior to a Change
     in Control and such termination is otherwise in connec-
     tion with or in anticipation of a Change in Control which
     actually occurs.  For purposes of any determination
     regarding the applicability of the immediately preceding
     sentence, any position taken by the Executive shall be
     presumed to be correct unless the Company establishes to
     the Board by clear and convincing evidence that such
     position is not correct.
                         (A)  In lieu of any further salary
               payments to the Executive for periods subsequent to
               the Date of Termination and in lieu of any severance
               benefit otherwise payable to the Executive, the
               Company shall pay to the Executive a lump sum sever-
               ance payment, in cash, equal to three times the sum
               of (i) the higher of the Executive's annual base
               salary in effect immediately prior to the occurrence
               of the event or circumstance upon which the Notice
               of Termination is based or the Executive's annual
               base salary in effect immediately prior to the
               Change in Control, and (ii) the higher of the aver-
               age of the annual bonuses earned or received by the
               Executive from the Company or its subsidiaries in
               respect of the three (3) consecutive fiscal years
               immediately preceding that in which the Date of
               Termination occurs or the average of the annual
               bonuses so earned or received in respect of the
               three (3) consecutive fiscal years immediately pre-
               ceding that in which the Change in Control occurs.
                         (B)  Notwithstanding any provision of
               any annual or long-term incentive plan to the con-
               trary, the Company shall pay to the Executive a lump
               sum amount, in cash, equal to the sum of (i) any
               incentive compensation which has been allocated or
               awarded to the Executive for a completed fiscal year
               or other measuring period preceding the Date of
               Termination under any such plan but which, as of the
               Date of Termination, is contingent only upon the
               continued employment of the Executive to a subse-
               quent date or otherwise has not been paid, and (ii)
               a pro rata portion to the Date of Termination of the
               aggregate value of all contingent incentive compen-
               sation awards to the Executive for all then uncom-
               pleted periods under any such plan, calculated as to
               each such award by multiplying the award that the
               Executive would have earned on the last day of the
               performance award period, assuming the achievement,
               at the target level of the individual and corporate
               performance goals established with respect to such
               award, by the fraction obtained by dividing the
               number of full months and any fractional portion of
               a month during such performance award period through
               the Date of Termination by the total number of
               months contained in such performance award period.
                              (C)  From and after the occur-
                    rence of a Change in Control, notwithstanding
                    any provision of the Officers' Supplemental
                    Retirement Plan of Orange and Rockland Utili-
                    ties, Inc. as Amended and Restated (the "SERP")
                    to the contrary, (i) the Benefit Formula Per-
                    centage applicable to the Executive under the
                    SERP shall be deemed to be 70% and (ii) the
                    Executive shall be treated as having completed
                    20 years of Service for purposes of Section
                    2(8) of the SERP.  Notwithstanding any provi-
                    sion of the SERP to the contrary, upon the
                    termination of the Executive's employment by
                    the Executive for Good Reason or by the Compa-
                    ny, in either case at any time following the
                    occurrence of a Change in Control and during
                    the term of this Agreement, the Executive shall
                    be deemed to have satisfied all of the require-
                    ments for a Normal Retirement Allowance pursu-
                    ant to Section 6(D) of the SERP and the Execu-
                    tive shall, accordingly, be entitled to com-
                    mence receipt of such Normal Retirement Allow-
                    ance, without reduction on account of his age,
                    immediately following such termination of em-
                    ployment.
                              (D)  For the thirty-six (36)
                    month period immediately following the Date of
                    Termination, the Company shall arrange to pro-
                    vide the Executive with life, disability, acci-
                    dent and health insurance benefits substantial-
                    ly similar to those which the Executive is
                    receiving immediately prior to the Notice of
                    Termination (without giving effect to any
                    amendment to such benefits made subsequent to a
                    Change in Control which amendment adversely
                    affects in any manner the Executive's entitle-
                    ment to or the amount of such benefits); pro-
                    vided, however, that, unless the Executive con-
                    sents to a different method (after taking into
                    account the effect of such method on the calcu-
                    lation of "parachute payments" pursuant to
                    Section 6.2 hereof), such health insurance
                    benefits shall be provided through a third-
                    party insurer.  Benefits otherwise receivable
                    by the Executive pursuant to this Section
                    6.1(D) shall be reduced to the extent compa-
                    rable benefits are actually received by or made
                    available to the Executive without cost during
                    the thirty-six (36) month period following the
                    Executive's termination of employment (and any
                    such benefits actually received by or made
                    available to the Executive shall be reported to
                    the Company by the Executive).  If the benefits
                    provided to the Executive under this Section
                    6.1(D) shall result in a decrease, pursuant to
                    Section 6.2 hereof, in the Severance Payments
                    and these Section 6.1(D) benefits are thereaf-
                    ter reduced pursuant to the immediately preced-
                    ing sentence because of the receipt or avail-
                    ability of comparable benefits, the Company
                    shall, at the time of such reduction, pay to
                    the Executive the lesser of (a) the amount of
                    the decrease made in the Severance Payments
                    pursuant to Section 6.2 hereof, or (b) the
                    maximum amount which can be paid to the Execu-
                    tive without being, or causing any other pay-
                    ment to be, nondeductible by reason of section
                    280G of the Code.
                    (E)  If the Executive would have become
               entitled to benefits under the Company's post-re-
               tirement health care or life insurance plans had the
               Executive's employment terminated at any time during
               the period of thirty-six (36) months after the Date
               of Termination, the Company shall provide such post-
               retirement health care or life insurance benefits to
               the Executive commencing on the later of (i) the
               date that such coverage would have first become
               available and (ii) the date that benefits described
               in subsection (D) of this Section 6.2 terminate.
               6.2  (A)  Whether or not the Executive becomes
     entitled to the Severance Payments, if any payment or
     benefit received or to be received by the Executive in
     connection with a Change in Control or the termination of
     the Executive's employment (whether pursuant to the terms
     of this Agreement or any other plan, arrangement or
     agreement with the Company, any Person whose actions
     result in a Change in Control or any Person affiliated
     with the Company or such Person) (all such payments and
     benefits, including the Severance Payments, being herein-
     after called "Total Payments") will be subject (in whole
     or part) to the Excise Tax, then, subject to the provi-
     sions of subsection (B) of this Section 6.2, the Company
     shall pay to the Executive an additional amount (the
     "Gross-Up Payment") such that the net amount retained by
     the Executive, after deduction of any Excise Tax on the
     Total Payments and any federal, state and local income
     and employment tax and Excise Tax upon the Gross-Up Pay-
     ment, shall be equal to the Total Payments.  For purposes
     of determining the amount of the Gross-Up Payment, the
     Executive shall be deemed to pay federal income and
     employment taxes at the highest marginal rate of federal
     income and employment taxation in the calendar year in
     which the Gross-Up Payment is to be made and state and
     local income taxes at the highest marginal rate of taxa-
     tion in the state and locality of the Executive's resi-
     dence on the Date of Termination, net of the maximum
     reduction in federal income taxes which could be obtained
     from deduction of such state and local taxes.
               (B)  In the event that, after giving effect to
     any redeterminations described in subsection (D) of this
     Section 6.2, a reduction in the Severance Payments to the
     largest amount that would result in no portion of the
     Total Payments being subject to the Excise Tax (after
     taking into account any reduction in the Total Payments
     provided by reason of section 280G of the Code in such
     other plan, arrangement or agreement) would produce a net
     amount (after deduction of the net amount of federal,
     state and local income tax on such reduced Total Pay-
     ments) that would be greater than the net amount of
     unreduced Total Payments (after deduction of the net
     amount of federal, state and local income tax and the
     amount of Excise Tax to which the Executive would be
     subject in respect of such unreduced Total Payments),
     then subsection (A) of this Section 6.2 shall not apply
     and the cash Severance Payments shall first be reduced
     (if necessary, to zero), and all other noncash Severance
     Benefits shall thereafter be reduced (if necessary, to
     zero); provided, however, that the Executive may elect to
     have the noncash Severance Payments reduced (or elimi-
     nated) prior to any reduction of the cash Severance
     Payments.
               (C)  For purposes of determining whether any of
     the Total Payments will be subject to the Excise Tax and
     the amount of such Excise Tax, (i) all of the Total Pay-
     ments shall be treated as "parachute payments" within the
     meaning of section 280G(b)(2) of the Code, unless in the
     opinion of tax counsel (the "Tax Counsel") reasonably ac-
     ceptable to the Executive and selected by the accounting
     firm (the "Auditor") which was, immediately prior to the
     Change in Control, the Company's independent auditor,
     such other payments or benefits (in whole or in part) do
     not constitute parachute payments, including by reason of
     section 280G(b)(4)(A) of the Code, (ii) all "excess
     parachute payments" within the meaning of section
     280G(b)(l) of the Code shall be treated as subject to the
     Excise Tax unless, in the opinion of Tax Counsel, such
     excess parachute payments (in whole or in part) represent
     reasonable compensation for services actually rendered,
     within the meaning of section 280G(b)(4)(B) of the Code,
     in excess of the Base Amount allocable to such reasonable
     compensation, or are otherwise not subject to the Excise
     Tax, and (iii) the value of any noncash benefits or any
     deferred payment or benefit shall be determined by the
     Auditor in accordance with the principles of sections
     280G(d)(3) and (4) of the Code.  Prior to the payment
     date set forth in Section 6.3 hereof, the Company shall
     provide the Executive with its calculation of the amounts
     referred to in this Section 6.2(C) and such supporting
     materials as are reasonably necessary for the Executive
     to evaluate the Company's calculations.  If the Executive
     disputes the Company's calculations (in whole or in
     part), the reasonable opinion of Tax Counsel with respect
     to the matter in dispute shall prevail.
               (D)  In the event that (i) amounts are paid to
     the Executive pursuant to subsection (A) of this Section
     6.2, (ii) the Excise Tax is subsequently determined to be
     less than the amount taken into account hereunder at the
     time of termination of the Executive's employment, and
     (iii) after giving effect to such redetermination, the
     Severance Payments are to be reduced pursuant to subsec-
     tion (B) of this Section 6.2, the Executive shall repay
     to the Company, at the time that the amount of such
     reduction in Excise Tax is finally determined, the por-
     tion of the Gross-Up Payment attributable to such reduc-
     tion (plus that portion of the Gross-Up Payment attribut-
     able to the Excise Tax and federal, state and local
     income tax imposed on the Gross-Up Payment being repaid
     by the Executive to the extent that such repayment re-
     sults in a reduction in the Excise Tax and/or a federal,
     state or local income tax deduction) plus interest on the
     amount of such repayment at the rate provided in section
     1274(b)(2)(B) of the Code.  In the event that (x) the
     Excise Tax is determined to exceed the amount taken into
     account hereunder at the time of the termination of the
     Executive's employment (including by reason of any pay-
     ment the existence or amount of which cannot be deter-
     mined at the time of the Gross-Up Payment) and (y) after
     giving effect to such redetermination, the Severance Pay-
     ments should not have been reduced pursuant to subsection
     (B) of this Section 6.2, the Company shall make an addi-
     tional Gross-Up Payment in respect of such excess and in
     respect of any portion of the Excise Tax with respect to
     which the Company had not previously made a Gross-Up Pay-
     ment (plus any interest, penalties or additions payable
     by the Executive with respect to such excess and such
     portion) at the time that the amount of such excess is
     finally determined.
               (E)  Exhibit A hereto is intended to illustrate
     the operation of this Section 6.2.
               6.3  The payments provided for in subsections
     (A) and (B) of Section 6.1 hereof and Section 6.2 hereof
     shall be made not later than the fifth day following the
     Date of Termination; provided, however, that if the
     amounts of such payments, and the limitation on such
     payments set forth in Section 6.2 hereof, cannot be
     finally determined on or before such day, the Company
     shall pay to the Executive on such day an estimate, as
     determined in good faith by the Executive or, in the case
     of payments under Section 6.2 hereof, in accordance with
     Section 6.2 hereof, of the minimum amount of such pay-
     ments to which the Executive is clearly entitled and
     shall pay the remainder of such payments (together with
     interest at the rate provided in section 1274(b)(2)(B) of
     the Code) as soon as the amount thereof can be determined
     but in no event later than the thirtieth (30th) day after
     the Date of Termination.  In the event that the amount of
     the estimated payments exceeds the amount subsequently
     determined to have been due, such excess shall constitute
     a loan by the Company to the Executive, payable on the
     fifth (5th) business day after demand by the Company
     (together with interest at the rate provided in section
     1274(b)(2)(B) of the Code).  At the time that payments
     are made under this Section, the Company shall provide
     the Executive with a written statement setting forth the
     manner in which such payments were calculated and the
     basis for such calculations including, without limita-
     tion, any opinions or other advice the Company has re-
     ceived from outside counsel, auditors or consultants (and
     any such opinions or advice which are in writing shall be
     attached to the statement).  In the event the Company
     should fail to pay when due the amounts described in
     subsections (A) or (B) of Section 6.1 hereof or Section
     6.2 hereof, the Executive shall also be entitled to
     receive from the Company an amount representing interest
     on any unpaid or untimely paid amounts from the due date,
     as determined under this Section 6.3 (without regard to
     any extension of the Date of Termination pursuant to
     Section 7.3 hereof), to the date of payment at a rate
     equal to the prime rate of Citibank as in effect from
     time to time after such due date.
               6.4  The Company also shall pay to the Execu-
     tive all legal fees and expenses incurred by the Execu-
     tive in disputing in good faith any issue relating to the
     termination of the Executive's employment following a
     Change in Control (including a termination of employment
     following a Potential Change in Control if the Executive
     alleges in good faith that such termination will be
     deemed to have occurred following a Change in Control
     pursuant to the second sentence of Section 6.1 hereof) or
     in seeking in good faith to obtain or enforce any benefit
     or right provided by this Agreement or in connection with
     any tax audit or proceeding to the extent attributable to
     the application of section 4999 of the Code to any pay-
     ment or benefit provided hereunder.  Such payments shall
     be made as such fees and expenses are incurred by the
     Executive, but in no event later than five (5) business
     days after delivery of the Executive's written requests
     for payment accompanied with such evidence of fees and
     expenses incurred as the Company reasonably may require.
               7.  Termination Procedures and Compensation
     During Dispute.
               7.1  Notice of Termination.  After a Change in
     Control and during the term of this Agreement, any pur-
     ported termination of the Executive's employment (other
     than by reason of death) shall be communicated by written
     Notice of Termination from one party hereto to the other
     party hereto in accordance with Section 10 hereof.  For
     purposes of this Agreement, a "Notice of Termination"
     shall mean a notice which shall indicate the specific
     termination provision in this Agreement relied upon and
     shall set forth in reasonable detail the facts and cir-
     cumstances claimed to provide a basis for termination of
     the Executive's employment under the provision so indi-
     cated.  Further, a Notice of Termination for Cause is
     required to include a copy of a resolution duly adopted
     by the affirmative vote of not less than three-quarters
     (3/4) of the entire membership of the Board at a meeting
     of the Board which was called and held for the purpose of
     considering such termination (after reasonable notice to
     the Executive and an opportunity for the Executive,
     together with the Executive's counsel, to be heard before
     the Board) finding that, in the good faith opinion of the
     Board, the Executive was guilty of conduct set forth in
     clause (i) or (ii) of the definition of Cause herein, and
     specifying the particulars thereof in detail.
               7.2  Date of Termination.  "Date of Termina-
     tion," with respect to any purported termination of the
     Executive's employment after a Change in Control and
     during the term of this Agreement, shall mean (i) if the
     Executive's employment is terminated for Disability,
     thirty (30) days after Notice of Termination is given
     (provided that the Executive shall not have returned to
     the full-time performance of the Executive's duties
     during such thirty (30) day period), and (ii) if the
     Executive's employment is terminated for any other rea-
     son, the date specified in the Notice of Termination
     (which, in the case of a termination by the Company,
     shall not be less than thirty (30) days (except in the
     case of a termination for Cause) and, in the case of a
     termination by the Executive, shall not be less than
     fifteen (15) days nor more than sixty (60) days, respec-
     tively, from the date such Notice of Termination is
     given).
               7.3  Dispute Concerning Termination.  If within
     fifteen (15) days after any Notice of Termination is
     given, or, if later, prior to the Date of Termination (as
     determined without regard to this Section 7.3), the party
     receiving such Notice of Termination notifies the other
     party that a dispute exists concerning the termination,
     the Date of Termination shall be extended until the
     earlier of (i) the date on which the Term ends (taking
     into account any extensions thereof that shall have
     occurred pursuant to Section 2 hereof) or (ii) the date
     on which the dispute is finally resolved, either by
     mutual written agreement of the parties or by a final
     judgment, order or decree of a court of competent juris-
     diction (which is not appealable or with respect to which
     the time for appeal therefrom has expired and no appeal
     has been perfected); provided, however, that the Date of
     Termination shall be extended by a notice of dispute
     given by the Executive only if such notice is given in
     good faith and the Executive pursues the resolution of
     such dispute with reasonable diligence.
               7.4  Compensation During Dispute.  If a pur-
     ported termination occurs following a Change in Control
     and during the term of this Agreement and the Date of
     Termination is extended in accordance with Section 7.3
     hereof, the Company shall continue to pay the Executive
     the full compensation in effect when the notice giving
     rise to the dispute was given (including, but not limited
     to, salary) and continue the Executive as a participant
     in all compensation, benefit and insurance plans in which
     the Executive was participating when the notice giving
     rise to the dispute was given, until the Date of Termina-
     tion, as determined in accordance with Section 7.3 here-
     of.  Amounts paid under this Section 7.4 are in addition
     to all other amounts due under this Agreement and shall
     not be offset against or reduce any other amounts due
     under this Agreement.
               8.  No Mitigation.  The Company agrees that, if
     the Executive's employment with the Company terminates
     during the term of this Agreement, the Executive is not
     required to seek other employment or to attempt in any
     way to reduce any amounts payable to the Executive by the
     Company pursuant to Section 6 hereof or Section 7.4
     hereof.  Further, the amount of any payment or benefit
     provided for in this Agreement (other than Section 6.1(D)
     hereof) shall not be reduced by any compensation earned
     by the Executive as the result of employment by another
     employer, by retirement benefits, by offset against any
     amount claimed to be owed by the Executive to the Compa-
     ny, or otherwise.
               9.  Successors; Binding Agreement.
               9.1  In addition to any obligations imposed by
     law upon any successor to the Company, the Company will
     require any successor (whether direct or indirect, by
     purchase, merger, consolidation or otherwise) to all or
     substantially all of the business and/or assets of the
     Company to expressly assume and agree to perform this
     Agreement in the same manner and to the same extent that
     the Company would be required to perform it if no such
     succession had taken place.  Failure of the Company to
     obtain such assumption and agreement prior to the effec-
     tiveness of any such succession shall be a breach of this
     Agreement and shall entitle the Executive to compensation
     from the Company in the same amount and on the same terms
     as the Executive would be entitled to hereunder if the
     Executive were to terminate the Executive's employment
     for Good Reason after a Change in Control, except that,
     for purposes of implementing the foregoing, the date on
     which any such succession becomes effective shall be
     deemed the Date of Termination.
               9.2  This Agreement shall inure to the benefit
     of and be enforceable by the Executive's personal or
     legal representatives, executors, administrators, succes-
     sors, heirs, distributees, devisees and legatees.  If the
     Executive shall die while any amount would still be
     payable to the Executive hereunder (other than amounts
     which, by their terms, terminate upon the death of the
     Executive) if the Executive had continued to live, all
     such amounts, unless otherwise provided herein, shall be
     paid in accordance with the terms of this Agreement to
     the executors, personal representatives or administrators
     of the Executive's estate.
               10.  Notices.  For the purpose of this Agree-
     ment, notices and all other communications provided for
     in the Agreement shall be in writing and shall be deemed
     to have been duly given when delivered or mailed by
     United States registered mail, return receipt requested,
     postage prepaid, addressed, if to the Executive, to the
     address shown for the Executive in the personnel records
     of the Company and, if to the Company, to the address set
     forth below, or to such other address as either party may
     have furnished to the other in writing in accordance
     herewith, except that notice of change of address shall
     be effective only upon actual receipt:
     
                    To the Company:
     
                    Orange and Rockland Utilities, Inc.
                    One Blue Hill Plaza
                    Pearl River, NY  10965
                    Attention:  Vice President and
                                   General Counsel
     
               11.  Miscellaneous.  No provision of this
     Agreement may be modified, waived or discharged unless
     such waiver, modification or discharge is agreed to in
     writing and signed by the Executive and such officer as
     may be specifically designated by the Board.  No waiver
     by either party hereto at any time of any breach by the
     other party hereto of, or compliance with, any condition
     or provision of this Agreement to be performed by such
     other party shall be deemed a waiver of similar or dis-
     similar provisions or conditions at the same or at any
     prior or subsequent time.  This Agreement supersedes the
     Prior Agreement, the Letter Agreement and any other
     agreements or representations, oral or otherwise, express
     or implied, with respect to the subject matter hereof
     (i.e., benefits payable to the Executive by reason of the
     occurrence of a Change in Control) which have been made
     by either party.  The validity, interpretation, construc-
     tion and performance of this Agreement shall be governed
     by the laws of the State of New York.  All references to
     sections of the Exchange Act or the Code shall be deemed
     also to refer to any successor provisions to such sec-
     tions.  Any payments provided for hereunder shall be paid
     net of any applicable withholding required under federal,
     state or local law and any additional withholding to
     which the Executive has agreed.  The obligations of the
     Company and the Executive under Sections 6 and 7 hereof
     shall survive the expiration of the term of this Agree-
     ment.
               12.  Validity.  The invalidity or
     unenforceability of any provision of this Agreement shall
     not affect the validity or enforceability of any other
     provision of this Agreement, which shall remain in full
     force and effect.
               13.  Counterparts.  This Agreement may be
     executed in several counterparts, each of which shall be
     deemed to be an original but all of which together will
     constitute one and the same instrument.
               14.  Settlement of Disputes; Arbitration.  All
     claims by the Executive for benefits under this Agreement
     shall be directed to and determined by the Board and
     shall be in writing.  Any denial by the Board of a claim
     for benefits under this Agreement shall be delivered to
     the Executive in writing and shall set forth the specific
     reasons for the denial and the specific provisions of
     this Agreement relied upon.  The Board shall afford a
     reasonable opportunity to the Executive for a review of
     the decision denying a claim and shall further allow the
     Executive to appeal to the Board a decision of the Board
     within sixty (60) days after notification by the Board
     that the Executive's claim has been denied.  Any further
     dispute or controversy arising under or in connection
     with this Agreement shall be settled exclusively by
     arbitration in New York, New York in accordance with the
     rules of the American Arbitration Association then in
     effect.  Judgment may be entered on the arbitrator's
     award in any court having jurisdiction.  Notwithstanding
     any provision of this Agreement to the contrary, the
     Executive shall be entitled to seek specific performance
     of the Executive's right to be paid until the Date of
     Termination during the pendency of any dispute or contro-
     versy arising under or in connection with this Agreement.
               15.  Definitions.  For purposes of this Agree-
     ment, the following terms shall have the meanings indi-
     cated below:
               (A)  "Base Amount" shall have the meaning set
     forth in section 280G(b)(3) of the Code.
               (B)  "Beneficial Owner" shall have the meaning
     set forth in Rule 13d-3 under the Exchange Act.
               (C)  "Board" shall mean the Board of Directors
     of the Company.
               (D)  "Cause" for termination by the Company of
     the Executive's employment shall mean (i) the willful and
     continued failure by the Executive to substantially
     perform the Executive's duties with the Company (other
     than any such failure resulting from the Executive's
     incapacity due to physical or mental illness or any such
     actual or anticipated failure after the issuance of a
     Notice of Termination for Good Reason by the Executive
     pursuant to Section 7.1 hereof) after a written demand
     for substantial performance is delivered to the Executive
     by the Board, which demand specifically identifies the
     manner in which the Board believes that the Executive has
     not substantially performed the Executive's duties, or
     (ii) the willful engaging by the Executive in conduct
     which is demonstrably and materially injurious to the
     Company or its subsidiaries, monetarily or otherwise. 
     For purposes of clauses (i) and (ii) of this definition,
     (x) no act, or failure to act, on the Executive's part
     shall be deemed "willful" unless done, or omitted to be
     done, by the Executive not in good faith and without
     reasonable belief that the Executive's act, or failure to
     act, was in the best interest of the Company and (y) in
     the event of a dispute concerning the application of this
     provision, no claim by the Company that Cause exists
     shall be given effect unless the Company establishes to
     the Board by clear and convincing evidence that Cause ex-
     ists.
               (E)  A "Change in Control" shall be deemed to
     have occurred if the event set forth in any one of the
     following paragraphs shall have occurred:
                         (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 Com-
                    pany 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 
                         (II) the following individuals cease
                    for any reason to constitute a majority of the
                    number of directors then serving: individuals
                    who, on the date hereof, constitute the Board
                    and any new director (other than a director
                    whose initial assumption of office is in con-
                    nection with an actual or threatened election
                    contest, including but not limited to a consent
                    solicitation, relating to the election of di-
                    rectors 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 date hereof or whose appointment, elec-
                    tion or nomination for election was previously
                    so approved; or
                         (III)  the shareholders of the Compa-
                    ny approve a merger or consolidation of the
                    Company with any other corporation or approve
                    the issuance of voting securities of the Compa-
                    ny in connection with a merger or consolidation
                    of the Company (or any direct or indirect sub-
                    sidiary of the Company) pursuant to applicable
                    stock exchange requirements, other than (i) a
                    merger or consolidation which would result in
                    the voting securities of the Company outstand-
                    ing immediately prior to such merger or consol-
                    idation 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, at least 65% of the com-
                    bined 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 recap-
                    italization of the Company (or similar transac-
                    tion) 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 Com-
                    pany 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 dis-
                    solution 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 com-
                    bined 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 of the Company 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)  "Code" shall mean the Internal Revenue
     Code of 1986, as amended from time to time.
               (G)  "Company" shall mean Orange and Rockland
     Utilities, Inc. and, except in determining under Section
     15(E) hereof whether or not any Change in Control of the
     Company has occurred, shall include its subsidiaries and
     any successor to its business and/or assets which assumes
     and agrees to perform this Agreement by operation of law,
     or otherwise.
               (H)  "Date of Termination" shall have the
     meaning stated in Section 7.2 hereof.
               (I)  "Disability" shall be deemed the reason
     for the termination by the Company of the Executive's
     employment, if, as a result of the Executive's incapacity
     due to physical or mental illness, the Executive shall
     have been absent from the full-time performance of the
     Executive's duties with the Company for a period of six
     (6) consecutive months, the Company shall have given the
     Executive a Notice of Termination for Disability, and,
     within thirty (30) days after such Notice of Termination
     is given, the Executive shall not have returned to the
     full-time performance of the Executive's duties.
               (J)  "Exchange Act" shall mean the Securities
     Exchange Act of 1934, as amended from time to time.
               (K)  "Excise Tax" shall mean any excise tax
     imposed under section 4999 of the Code.
               (L)  "Executive" shall mean the individual
     named in the first paragraph of this Agreement.
               (M)  "Good Reason" for termination by the
     Executive of the Executive's employment shall mean the
     occurrence (without the Executive's express written
     consent) after any Change in Control, or after any Poten-
     tial Change in Control under the circumstances described
     in the second sentence of Section 6.1 hereof (treating
     all references in paragraphs (I) and (VII) below to a
     "Change in Control" as references to a "Potential Change
     in Control"), of any one of the following acts by the
     Company, or failures by the Company to act, unless, in
     the case of any act or failure to act described in para-
     graph (I), (V), (VI) or (VII) below, such act or failure
     to act is corrected prior to the Date of Termination
     specified in the Notice of Termination given in respect
     thereof:
                     (I)  the assignment to the Executive of
                    any duties inconsistent with the Executive's
                    status as a senior executive officer of the
                    Company or a substantial adverse alteration in
                    the nature or status of the Executive's respon-
                    sibilities from those in effect immediately
                    prior to the Change in Control other than any
                    such alteration primarily attributable to the
                    fact that the Company may no longer be a public
                    company;
                         (II)  a reduction by the Company in
                    the Executive's annual base salary as in effect
                    on the date hereof or as the same may be in-
                    creased from time to time except for
                    across-the-board salary reductions similarly
                    affecting all senior executives of the Company
                    and all senior executives of any Person in
                    control of the Company;
                         (III)  the relocation of the
                    Company's principal executive offices to a
                    location within New York City or to a location
                    more than 50 miles from the location of such
                    offices immediately prior to the Change in Con-
                    trol or the Company's requiring the Executive
                    to be based anywhere other than the Company's
                    principal executive offices except for required
                    travel on the Company's business to an extent
                    substantially consistent with the Executive's
                    present business travel obligations;
                         (IV)  the failure by the Company,
                    without the Executive's consent, to pay to the
                    Executive any portion of the Executive's cur-
                    rent compensation except pursuant to an
                    across-the-board compensation deferral similar-
                    ly affecting all senior executives of the Com-
                    pany and all senior executives of any Person in
                    control of the Company, or to pay to the Exec-
                    utive any portion of an installment of deferred
                    compensation under any deferred compensation
                    program of the Company, within seven (7) days
                    of the date such compensation is due;
                         (V)  the failure by the Company to
                    continue in effect any compensation plan in
                    which the Executive participates immediately
                    prior to the Change in Control which is materi-
                    al to the Executive's total compensation, in-
                    cluding but not limited to the Company's stock
                    option, restricted stock, stock appreciation
                    right, incentive compensation, bonus and other
                    plans or any substitute plans adopted prior to
                    the Change in Control, unless an equitable
                    arrangement (embodied in an ongoing substitute
                    or alternative plan) has been made with respect
                    to such plan, or the failure by the Company to
                    continue the Executive's participation therein
                    (or in such substitute or alternative plan) on
                    a basis not materially less favorable, both in
                    terms of the amount of benefits provided and
                    the level of the Executive's participation
                    relative to other participants, as existed
                    immediately prior to the Change in Control;
                         (VI)  the failure by the Company to
                    continue to provide the Executive with benefits
                    substantially similar to those enjoyed by the
                    Executive under any of the Company's pension,
                    life insurance, medical, health and accident,
                    or disability plans in which the Executive was
                    participating immediately prior to the Change
                    in Control, the taking of any action by the
                    Company which would directly or indirectly
                    materially reduce any of such benefits or de-
                    prive the Executive of any material fringe
                    benefit enjoyed by the Executive at the time of
                    the Change in Control, or the failure by the
                    Company to maintain a vacation policy with
                    respect to the Executive that is at least as
                    favorable as the vacation policy (whether for-
                    mal or informal) in place with respect to the
                    Executive immediately prior to the Change in
                    Control; or
                         (VII)  any purported termination of
                    the Executive's employment which is not effect-
                    ed pursuant to a Notice of Termination satisfy-
                    ing the requirements of Section 7.1 hereof; for
                    purposes of this Agreement, no such purported
                    termination shall be effective.
               The Executive's right to terminate the
     Executive's employment for Good Reason shall not be
     affected by the Executive's incapacity due to physical or
     mental illness.  The Executive's continued employment
     shall not constitute consent to, or a waiver of rights
     with respect to, any act or failure to act constituting
     Good Reason hereunder.
               For purposes of any determination regarding the
     existence of Good Reason, any claim by the Executive that
     Good Reason exists shall be presumed to be correct unless
     the Company establishes to the Board by clear and con-
     vincing evidence that Good Reason does not exist.
               (N)  "Gross-Up Payment" shall have the meaning
     set forth in Section 6.2 hereof.
               (O)  "Notice of Termination" shall have the
     meaning stated in Section 7.1 hereof.
               (P)  "Pension Plan" shall mean any tax-quali-
     fied, supplemental or excess benefit pension plan main-
     tained by the Company and any other agreement entered
     into between the Executive and the Company which is
     designed to provide the Executive with supplemental
     retirement benefits.
               (Q)  "Person" shall have the meaning given 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 sub-
     stantially the same proportions as their ownership of
     stock of the Company.
               (R)  "Potential Change in Control" shall be
     deemed to have occurred if the event set forth in any one
     of the following paragraphs shall have occurred:
                         (I)  the Company enters into an
                    agreement, the consummation of which would
                    result in the occurrence of a Change in Con-
                    trol; 
                         (II)  the Company or any Person pub-
                    licly announces an intention to take or to
                    consider taking actions which, if consummated,
                    would constitute a Change in Control; 
                         (III)  any Person becomes the Benefi-
                    cial Owner, directly or indirectly, of securi-
                    ties of the Company representing 10% 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 securi-
                    ties; or 
                         (IV)  the Board adopts a resolution
                    to the effect that, for purposes of this Agree-
                    ment, a Potential Change in Control has oc-
                    curred.  
               (S)  "Retirement" shall be deemed the reason
     for the termination of the Executive's employment if such
     employment is terminated in accordance with the Company's
     retirement policy generally applicable to its salaried
     employees, as in effect immediately prior to the Change
     in Control, or in accordance with any retirement arrange-
     ment established with the Executive's consent with re-
     spect to the Executive.
               (T)  "Severance Payments" shall mean those
     payments described in Section 6.1 hereof.
               (U)  "Total Payments" shall mean those payments
     described in Section 6.2 hereof.
     
     
                         ORANGE AND ROCKLAND UTILITIES, INC.
     
     
     
                         By:                                          
                              Name: James F. O'Grady, Jr.
                              Title: Chairman of the
                                       Compensation Committee
     
     
     
                                                                      
                                  D. Louis Peoples
                                                                       EXHIBIT A
                             Illustration 1


Facts:

Five Year Average Compensation (Base Amount)      $100,000
Safe Harbor Amount (3x Base Amount minus $1)      $299,999
Unadjusted Severance Benefit                      $299,999 or less    

Result:

Full Unadjusted Severance Benefit is paid without adjustment.

Explanation:

No excise tax is due because the Unadjusted Severance Benefit
does not exceed the Safe Harbor Amount.  Accordingly, the full
Unadjusted Severance Benefit is paid without reduction and with-
out a gross up payment.

____________________
Each of the following illustrations assumes that the highest
marginal rate of federal, state and local income and employ-
ment tax in the state and locality of the Executive's resi-
dence (net of the maximum reduction in federal income taxes
which could be obtained from deduction of the state and 
local taxes) is 40%.
<PAGE>
Illustration 2
                             

Facts:

Five Year Average Compensation (Base Amount)           $100,000
Safe Harbor Amount (3x Base Amount minus $1)           $299,999
Unadjusted Severance Benefit                           $390,000
Amount of Unadjusted Severance Benefit subject
  to excise tax (Unadjusted Severance Benefit 
  minus Base Amount)                                   $290,000
Income tax on Unadjusted Severance Benefit
  (40% of $390,000)                                    $156,000
Income tax if benefit reduced (40% of $299,999)        $119,999
Excise tax on Unadjusted Severance Benefit 
  (20% of $290,000)                                    $ 58,000
Net amount of Unadjusted Severance Benefit             $176,000
Net amount of Reduced Severance Benefit                $180,000


Result:

The Unadjusted Severance Benefit is reduced and only an amount
equal to the Safe Harbor Amount is paid.

Explanation:

The Unadjusted Severance Benefit exceeds the Safe Harbor Amount.
Therefore, either the Unadjusted Severance Benefit is reduced to
the Safe Harbor Amount or a gross up payment is paid in addition
to the Unadjusted Severance Benefit.  If the Unadjusted Severance
Benefit was paid, the net amount retained after all taxes would
be $176,000, i.e., the full amount of the Unadjusted Severance
Benefit ($390,000) reduced by applicable income taxes ($156,000
at the assumed 40% tax rate) and further reduced by the excise
tax ($58,000, calculated as 20% of the excess of the Unadjusted
Severance Benefit over the Base Amount).  If only the portion of
the Unadjusted Severance Benefit not in excess of the Safe Harbor
Amount was paid, the net amount retained after all taxes would be
$180,000, i.e., the Safe Harbor Amount ($299,999) reduced by
applicable income taxes ($119,999 at the assumed 40% tax rate). 
There would be no excise tax since the amount paid did not exceed
the Safe Harbor Amount.  Since the net amount retained is in-
creased by reducing the amount paid to the Safe Harbor Amount,
the Unadjusted Severance Benefit is so reduced--only an amount
equal to the Safe Harbor Amount is paid and there is no gross up
payment.
<PAGE>
Illustration 3
                      

Facts:

Five Year Average Compensation (Base Amount)           $100,000
Safe Harbor Amount (3x Base Amount minus $1)           $299,999
Unadjusted Severance Benefit                           $410,000
Amount of Unadjusted Severance Benefit subject
  to excise tax (Unadjusted Severance Benefit 
  minus Base Amount)                                   $310,000
Income tax on Unadjusted Severance Benefit
  (40% of $410,000)                                    $164,000
Income tax if benefit reduced (40% of $299,999)        $119,999
Excise tax on Unadjusted Severance Benefit 
  (20% of $310,000)                                    $ 62,000
Net amount of Unadjusted Severance Benefit
 (if no gross up)                                      $184,000
Net amount of Reduced Severance Benefit                $180,000
Gross up payment                                       $155,000
Net amount of Unadjusted Severance Benefit -
  with gross up (60% of $410,000)                      $246,000


Result:

The Unadjusted Severance Benefit is paid in full together with a
gross up payment that puts the individual in the same after-tax
position he would have been in had there been no excise applica-
ble to the Unadjusted Severance Benefit.


Explanation:

The Unadjusted Severance Benefit exceeds the Safe Harbor Amount. 
Therefore, either the Unadjusted Severance Benefit is reduced to
the Safe Harbor Amount or a gross up payment is paid in addition
to the Unadjusted Severance Benefit.  If the Unadjusted Severance
Benefit was paid, the net amount retained after all taxes would
be $184,000, i.e., the full amount of the Unadjusted Severance
Benefit ($410,000) reduced by applicable income taxes ($164,000
at the assumed 40% tax rate) and further reduced by the excise
tax ($62,000, calculated as 20% of the excess of the Unadjusted
Severance Benefit over the Base Amount).  If only the portion of
the Unadjusted Severance Benefit not in excess of the Safe Harbor
Amount was paid, the net amount retained after all taxes would be
$180,000, i.e., the Safe Harbor Amount ($299,999) reduced by
applicable income taxes ($119,999 at the assumed 40% tax rate). 
There would be no excise tax since the amount paid did not exceed
the Safe Harbor Amount.  Since the net amount retained is not in-
creased by reducing the amount paid to the Safe Harbor Amount,
the Unadjusted Severance Benefit is paid in full together with
the gross up payment.  The gross up payment would be $155,000. 
This payment would itself be subject to taxes of $93,000 (40%
income tax and 20% excise tax), leaving $62,000 to pay the excise
tax on the Unadjusted Severance Benefit.