Exhibit 10.1


    Exhibit
      10.1

     

    Green
      Mountain Power Corporation

     

    Director
      Deferral Agreement

    


    THIS
      DEFERRAL AGREEMENT (the “Agreement”) is between David R. Coates (the
“Participant”), who in 2006 may be granted Stock Units under the Green Mountain
      Power Corporation 2004 Stock Incentive Plan (the “Plan”), and GREEN MOUNTAIN
      POWER CORPORATION, a Vermont corporation (the “Company”). All terms used herein
      that are defined in the Plan have the same meaning given them in the
      Plan.

    


    1. Election
      of Deferred Benefit

    


    In
      accordance with Section 6(g)(iii) of the Plan, the Participant hereby elects
      to
      defer payment of 100 percent of any Stock Units that may be awarded in 2006
      (the
“2006 Stock Units”) and receive an equal number of Deferred Stock Units
      (“DSUs”). If the number of 2006 Stock Units elected to be deferred under this
      Section is more than the number actually awarded, the Participant’s election
      shall be deemed to apply to all of the 2006 Stock Units.

    


    2. Future
      Distribution of Shares

    


    As
      soon
      as practicable following the distribution date prescribed by Section 5 of this
      Agreement, the Company shall issue or distribute shares of Common Stock in
      settlement of the vested DSUs and the Additional Shares, as defined in Section
      3, to the Participant or, if the Participant is not living, the Participant’s
      Beneficiary. For purposes of this Agreement, the Participant’s Beneficiary shall
      be the person or persons or entity or entities who succeed to the Participant’s
      rights under the Agreement by will or by the laws of descent and
      distribution.

    


    3. Dividend
      Equivalents

    


    The
      Company shall pay dividend equivalents to the Participant with respect to the
      DSUs which shall be treated as invested in additional shares of Common Stock
      (“Dividend Shares”) and dividend equivalents also shall be credited on the
      Dividend Shares. The term “Additional Shares” means the sum of the Dividend
      Shares and the dividend equivalents credited on the Dividend Shares. The amount
      of any dividend equivalents payable under this Section 3 shall be equal to
      the
      amount of dividends that would have been payable on an equivalent number of
      shares of Common Stock as represented by the DSUs and the Dividend Shares if
      that number of shares were outstanding on the record date for the dividend
      payment. Dividend equivalents shall be credited as soon as practicable following
      the payment date for the dividend on the Common Stock.

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    4. Vesting

    


    The
      Participant’s right to receive shares of Common Stock in settlement of the DSUs
      and the Additional Shares attributable thereto shall be vested to the extent
      that the vesting requirements applicable to the 2006 Stock Unit award are
      satisfied. Notwithstanding the immediately preceding sentence, the obligation
      to
      distribute Common Stock in settlement of the vested DSUs and the Additional
      Shares is an unfunded obligation of the Company and the Participant is an
      unsecured creditor of the Company with respect to the satisfaction of the DSUs
      and the Additional Shares.

    


    5. Deferral
      of Distribution and/or Dividend Equivalents

    


    (a) Subject
      to the provisions of Section 5(b) of this Agreement, the Participant hereby
      elects the date as of which shares of Common Stock will be issued in settlement
      of the vested DSUs and any Additional Shares. The Participant may elect a
      distribution date with reference to a specific date, separation from service
      as
      a director of the Company (as defined for purposes of Section 409A of the
      Internal Revenue Code) (“termination”) or the Participant may elect a
      distribution date with reference to the earlier or later to occur of a specific
      date or termination. Subject to the provisions of Section 5(b) of this
      Agreement, the Participant hereby makes the following election with respect
      to
      the distribution of the vested DSUs and any Additional Shares:

    


              
Distribution
      as of this date:
   .

    X     Distribution
      upon termination.

    Distribution
      as of the earlier of this date: _______________ or termination.

    Distribution
      as of the later of this date: _______________ or termination.

    


    Notwithstanding
      the foregoing, if a distribution is payable to a “specified employee” (as
      defined in Section 409A of the Internal Revenue Code) on account of termination,
      such distribution shall be postponed until the first day of the sixth month
      beginning after the Participant’s termination.

    


    (b) Notwithstanding
      the Participant’s election(s) under the preceding Section 5(a), Common Stock
      will be distributed in settlement of the DSUs and the Additional Shares as
      soon
      as practicable following the Participant’s death or if the Participant becomes
      disabled (as defined in Section 409A of the Internal Revenue Code), while acting
      as a director of the Company.

    


    6. Shareholder
      Rights

    


    The
      Participant (and any Beneficiary) shall not have any rights as a shareholder
      of
      the Company with respect to the DSUs or any Additional Shares until the issuance
      of shares of Common Stock to the Participant or Beneficiary.

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    7. Adjustments
      for Capital Changes

    


    The
      number of DSUs and the Additional Shares shall be adjusted as the Committee
      determines is equitably required in the event that the Company effects one
      or
      more stock dividends, stock split-ups, share consolidations or other similar
      changes in the capitalization of the Company.

    


    8. Tax
      Withholding

    


    The
      Participant (or any Beneficiary) shall make arrangements satisfactory to the
      Company for the satisfaction of any income, employment or other tax withholding
      obligations arising in connection with this Agreement or the settlement of
      the
      DSUs or Additional Shares.

    


    9. Governing
      Law

    


    This
      Agreement shall be governed by, and interpreted under, the laws of the State
      of
      Vermont except its choice of law provisions to the extent that they would
      require the application of the laws of a State other than the State of
      Vermont.

    


    10. Nonassignment;
      Successors

    


    (a) The
      Participant may not assign, pledge, hypothecate or transfer the Participant’s
      rights under this Agreement other than by will or the law of descent and
      distribution. This Agreement shall be binding upon the Beneficiary and any
      successor in interest to the Participant.

    


    (b) This
      Agreement shall be binding upon the Company and any successor in interest to
      the
      Company, whether such succession is by contract, assignment, operation or law
      or
      otherwise.

    


    IN
      WITNESS WHEREOF, the Company has caused this Agreement to be signed by its
      duly
      authorized officer and the Participant has signed this Agreement on the date
      or
      dates set forth below.

    


    


    GREEN
      MOUNTAIN POWER CORPORATION

    


    By: /s/
      Christopher L. Dutton   

    


    Date: December
      30, 2005    

    


    


    DAVID
      R.
      COATES

    


    By: /s/
      David R. Coates    

    


    Date: December
      27, 2005