Document:

Exhibit 10.5

    
      Exhibit
        10.5

       

      
        	 	March 16,
                2006

      

    

    

    FermaVir
      Pharmaceuticals, Inc.

    420
      Lexington Avenue, Suite 445

    New
      York,
      NY 10170

    

    Gentlemen:

    

    FermaVir
      Pharmaceuticals, Inc. (the “Company”) has requested that I agree to certain
      modifications of Option No. 0-FERMAVIR-05-A-003, granted to me as of February
      22, 2005 (the “NQSO Options”), which presently permit me to acquire 525,000
      shares of the Company’s common stock for $.75 per share in order to facilitate
      financing for the Company. I refer you to the Repurchase Option Agreement dated
      as of the date of this letter (the “Repurchase Agreement”) between the Company
      and Chris McGuigan. Unless otherwise defined in this letter, capitalized terms
      herein shall have the meanings assigned to them in the Repurchase
      Agreement.

    

    In
      consideration of the Company entering into the Technology Acquisition Agreement
      (the “TAA”), I agree:

    

    (a) not
      to
      exercise in excess of 52,500 of the NQSO options until Phase I Clinical Trials
      have commenced for a product utilizing the Licensed Subject Matter (as
      reasonably determined by the Company, provided such determination will not
      be
      necessary if, following receipt of all requisite regulation approvals, human
      patients have been administered a product incorporating the Licensed Subject
      Matter). 

    

    (b) In
      the
      event the Trigger Event occurs, I agree that upon exercise of the Company’s
      Option set forth in Section 2A of the Repurchase Agreement and the payment
      to me
      of $50,000, the Company will cancel 472,500 options to purchase the Company’s
      common stock represented by Option No. 0-FERMAVIR-05-A-003.
      In
      addition, pursuant to Section 2.4 of the TAA, within thirty (30) days after
      the
      Exercise Notice (as defined in the TAA) has become effective, the Company shall
      transfer, in exchange for the consideration set forth in Section 2.3 of the
      TAA,
      all rights, title and interest in and to the Core Technology (as defined in
      the
      TAA), without any encumbrance or lien (but subject to any development or
      research right or licenses granted by the Company prior to the Exercise Date
      (as
      defined in the TAA) and the payment of the Purchase Note (as defined in the
      TAA)), and the Company will deliver the Core Technology, including any
      documentation thereto, to the Holders or any assignee of the Holders, including,
      without limitation, University Cardiff Consultants Limited, as directed in
      the
      Exercise Notice.

     

    
      	 	Very truly yours,
	 	 

      	 	/s/ Jan Balzarini
	 	 

      	 	Jan
              BalzariniExhibit 10(iii)(40)

                                                                       CORRECTED
                                                                  MARCH 31, 2006

                              CH ENERGY GROUP, INC.

      ---------------------------------------------------------------------

                              CH ENERGY GROUP, INC.
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

      ---------------------------------------------------------------------

                            Effective January 1, 2006

<PAGE>

                              CH ENERGY GROUP, INC.
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
                           (Effective January 1, 2006)

                                TABLE OF CONTENTS

ARTICLE I NAME, PURPOSE, LEGAL STATUS.........................................2

ARTICLE II GENERAL DEFINITIONS................................................3

ARTICLE III PARTICIPATION.....................................................5

ARTICLE IV SERP ACCRUED BENEFIT...............................................6

ARTICLE V VESTING.............................................................8

ARTICLE VI NORMAL RETIREMENT BENEFIT..........................................9

ARTICLE VII EARLY RETIREMENT BENEFIT.........................................11

ARTICLE VIII EFFECT OF DEATH AND DISABILITY ON BENEFITS......................13

ARTICLE IX SPECIAL PROVISIONS................................................14

ARTICLE X ADMINISTRATION AND FINANCING.......................................18

ARTICLE XI AMENDMENT AND TERMINATION.........................................20

ARTICLE XII MISCELLANEOUS....................................................21

<PAGE>

                                    ARTICLE I
                           NAME, PURPOSE, LEGAL STATUS

1.1   Name.  The plan  hereunder  shall be known as the CH  Energy  Group,  Inc.
      Supplemental  Executive  Retirement  Plan  (the  "Plan"),  which  shall be
      effective January 1, 2006 (the "Effective Date").

1.2   Purpose.  The  purpose of the Plan is to provide  supplemental  retirement
      benefits  for  eligible   executives  of  the  Company  and  Participating
      Affiliates.

1.3   Legal  Status.  The Company  intends  the Plan to be an unfunded  deferred
      compensation  plan for a select group of management or highly  compensated
      employees,  within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1)
      of ERISA.

1.4   Compliance  with Section 409A. The Company intends the Plan to comply with
      the provisions of Section 409A of the Code, so as to prevent the inclusion
      in gross income of any amounts  deferred  hereunder in a taxable year that
      is  prior  to the  taxable  year or years  in  which  such  amounts  would
      otherwise  actually be distributed or made  available to  Participants  or
      beneficiaries. This Plan shall be construed, administered, and governed in
      a manner that effects such intent,  and the  Committee  shall not take any
      action that would be  inconsistent  with such intent.  Any provisions that
      would cause any amount deferred or payable under the Plan to be includible
      in the gross  income  of any  Participant  or  beneficiary  under  Section
      409A(a)(1)  of the Code shall  have no force and  effect  unless and until
      amended to cause such amount to not be so includible  (which amendment may
      be retroactive to the extent  permitted by Section 409A of the Code).  Any
      reference  in this Plan to Section 409A of the Code shall also include any
      proposed,   temporary  or  final  regulations,   or  any  other  guidance,
      promulgated  with respect to such Section 409A by the U.S.  Department  of
      Treasury or the Internal Revenue Service.

                                      -2-
<PAGE>

                                   ARTICLE II
                               GENERAL DEFINITIONS

2.1   "Affiliate"  means a member of the Company's  Controlled  Group within the
      meaning of Section 1.8 of the Pension  Plan,  or any  successor  provision
      thereto.

2.2   "Board" means the Board of Directors of the Company.

2.3   "Change in Control"  means the  transactions  or events defined in Section
      9.3.

2.4   "Code" means the Internal Revenue Code of 1986, as amended.

2.5   "Committee" means the Compensation  Committee of the Board or its delegate
      as provided in Section 10.1.

2.6   "Company"  means CH Energy  Group,  Inc., a New York  corporation,  or any
      corporate successor thereto.

2.7   "ERISA"  means the Employee  Retirement  Income  Security Act of 1974,  as
      amended.

2.8   "Effective  Date"  means the  effective  date of the Plan,  which  date is
      January 1, 2006.

2.9   "Earliest Retirement Date" means the date provided in Section 7.2.

2.10  "Employee"  means a common law  employee of the Company,  a  Participating
      Affiliate or other Affiliate.

2.11  "Eligible  Executive"  means an Employee  who is described in Section 3.4,
      provided  the  Employee  is a member of a select  group of  management  or
      highly  compensated  employees  within  the  meaning of  Sections  201(2),
      301(a)(3) and 401(a) of ERISA.

2.12  "Normal Retirement Date" means the date described in Section 6.2.

2.13  "Participant" means an Eligible Executive who becomes a Participant in the
      Plan under Section 3.1.

2.14  "Participating Affiliate" means an Affiliate that adopts the Plan with the
      consent of the Company.

2.15  "Pension  Plan" means the  Retirement  Income Plan of Central Hudson Gas &
      Electric Corporation.

2.16  "Plan" means this CH Energy Group, Inc. Supplemental  Executive Retirement
      Plan, and any amendment thereto.

2.17  "Restoration  Plan"  means the Central  Hudson Gas & Electric  Corporation
      Retirement Benefit Restoration Plan.

2.18  "SERP Accrued Benefit" means the amount determined under Section 4.1.

                                      -3-
<PAGE>

2.19  "SRP" means the CH Energy Group, Inc. Supplementary Retirement Plan.

2.20  "Termination  of  Employment"  means  the  termination  of  an  Employee's
      employment  with the Company and all  Participating  Affiliates  and other
      Affiliates as a result of his quit,  retirement,  discharge,  death or his
      becoming  eligible to receive  disability  benefits under the Company's or
      Affiliate's  long-term  disability plan, to the extent such termination of
      employment  constitutes:  (i) a  "separation  from  service" as defined in
      Section 409A of the Code or (ii)  "disability"  as defined in Section 409A
      of the Code.

2.21  "Years of Benefit Service" or "Benefit Service" means the years of service
      described in Section 4.3.

2.22  "Years of Vesting Service" or "Vesting Service" means the years of service
      described in Section 7.2.

                                      -4-
<PAGE>

                                   ARTICLE III
                                  PARTICIPATION

3.1   Participant.  An Eligible Executive shall become a Participant in the Plan
      on the date he first becomes an Eligible Executive,  or such later date as
      designated by the Committee.

3.2   Suspension of  Participation.  A Participant who has an employment  status
      change,   as  provided   under  Section  9.2,   shall  be  suspended  from
      participation in the Plan.

3.3   Reinstatement.  A Participant who has been suspended from participation in
      the Plan under  Section  3.2 may be  reinstated  as a  Participant  at the
      discretion of the Committee.

3.4   Eligible Executive. An Eligible Executive is an Employee of the Company or
      of Central Hudson Gas & Electric Corporation who holds an officer position
      with the Company or with Central Hudson Gas & Electric Corporation, unless
      otherwise determined by the Committee.

                                      -5-
<PAGE>

                                   ARTICLE IV
                              SERP ACCRUED BENEFIT

4.1   SERP Accrued Benefit. A Participant's monthly SERP Accrued Benefit payable
      commencing on his Normal  Retirement Date shall equal the amount,  if any,
      by which (i) the  Participant's  monthly  Target  Retirement  Benefit  (as
      defined in the next  sentence)  exceeds (ii) the sum of the  Participant's
      Pension  Monthly  Benefit,  Restoration  Monthly  Benefit  and SRP Monthly
      Benefit (all as defined below in this Article IV). Subject to Section 7.1,
      the Participant's  monthly "Target Retirement Benefit" shall be determined
      pursuant to the following formula:

                                               Years of Benefit Service
              (57% x Final Average Pay)   x    (not to exceed 30 years)
              -------------------------        ------------------------
                       12 months                      30 years

4.2   Final Average Pay. A  Participant's  "Final Average Pay" is the sum of his
      highest  annual   compensation   (as  defined  herein)  during  the  three
      consecutive  calendar  years of the ten  consecutive  calendar years which
      immediately precede his Termination of Employment, divided by three.

      The  Participant's  "annual  compensation"  is his base  salary and annual
      incentive  compensation  from the Company,  Participating  Affiliates  and
      other Affiliates paid during a calendar year (including any years prior to
      his Plan  participation).  The Participant's annual compensation shall not
      be reduced by any elective contributions or deferrals from his base salary
      or annual incentive compensation made to the Central Hudson Gas & Electric
      Company  Savings  Incentive  Plan, any Code Section 125 plan maintained by
      the Company or Affiliate,  or any nonqualified  deferred compensation plan
      maintained by the Company or Affiliate.

      A  Participant's  "annual  compensation"  shall not  include  compensation
      received by a  Participant  during any period that  precedes  the date the
      Participant's employer became an Affiliate.

      If  the  Participant  does  not  have  three  calendar  years  of  "annual
      compensation,"  his  Final  Average  Pay is  the  average  of his  monthly
      compensation  while employed with the Company,  a Participating  Affiliate
      and other Affiliates, multiplied by twelve.

4.3   Years of Benefit Service. A Participant's "Years of Benefit Service" shall
      equal his years of benefit service under Section 1.34 of the Pension Plan,
      or any successor  provision  thereto.  However,  a  Participant  shall not
      receive  credit for periods of service  with the  Company or an  Affiliate
      after his suspension from participation in the Plan under Section 3.2.

4.4   Pension   Monthly   Benefit.   The  "Pension   Monthly   Benefit"  is  the
      Participant's monthly retirement benefit under the Pension Plan, paid as a
      single life annuity,  in the amount payable on his Normal Retirement Date,
      which  shall  include  the  social  security  supplement  payable  to  the
      Participant  under  Section  3.3 of the  Pension  Plan,  or any  successor
      provision  thereto,  converted  to a single  life  annuity,  but shall not
      include the retirement  account component of the Pension Plan as described
      in Article XI of the Pension Plan.

4.5   Restoration  Monthly  Benefit.  The  "Restoration  Monthly Benefit" is the
      Participant's  monthly retirement benefit under the Restoration Plan, paid
      as a single life annuity,  in the amount payable on his Normal  Retirement
      Date.

                                      -6-
<PAGE>

4.6   SRP Monthly Benefit. The "SRP Monthly Benefit" is the actuarial equivalent
      monthly amount of the Participant's  retirement  benefit under the SRP (if
      any) payable as of his Normal Retirement Date. For this purpose, actuarial
      equivalence  shall be determined (i) by converting the  participant's  SRP
      benefit payable on his Normal Retirement Date to an equivalent single life
      annuity payable on his Normal  Retirement Date based on the  Participant's
      single life expectancy as of his Normal  Retirement Date and (ii) based on
      actuarial  assumptions  and  procedures  prescribed by the Committee  from
      time-to-time, consistent with Section 9.7.

                                      -7-
<PAGE>

                                    ARTICLE V
                                     VESTING

5.1   Vesting  Requirements.  A Participant must become vested to be entitled to
      receive a SERP Accrued Benefit.  The Participant  shall become "vested" in
      the SERP  Accrued  Benefit  under the Plan under any one of the  following
      circumstances while an Employee:

      (a)   Attaining age 61 (under Section 5.2).

      (b)   Attaining Earliest Retirement Date (under Section 5.3).

      (c)   A Change in Control of the Company (under Section 5.5).

5.2   Attaining Age 61. A  Participant  shall become vested if he is an Employee
      of the  Company or an  Affiliate  on or after the day he attains age 61. A
      Participant  does not need 10 Years of Vesting Service to become vested in
      this case.

5.3   Earliest  Retirement Date. A Participant  shall also be vested if he is an
      Employee  of  the  Company  or an  Affiliate  on  or  after  his  Earliest
      Retirement Date as defined in Section 7.2. A Participant shall be entitled
      to a reduced  benefit if the  Participant  begins to receive  his  benefit
      before  attaining  age 61,  but after his  Earliest  Retirement  Date,  as
      provided for under Article VII.

5.4   Non-Vested  Termination.  Upon a  Participant's  Termination of Employment
      with the Company and all  Participating  Affiliates  and other  Affiliates
      before meeting any of the vesting requirements under Section 5.1, he shall
      not receive any benefit  from the Plan  whatsoever.  If a  Participant  is
      reemployed,  he may receive  credit for his prior  years of service  under
      Section 9.6.

5.5   Change in Control.  If a Participant is not otherwise vested under Section
      5.1, a  Participant  shall  become  vested upon a Change in Control of the
      Company as provided in Section 9.3.

5.6   Forfeiture Events. Even if vested, a Participant shall cease to be vested,
      and thereafter not entitled to any benefit from the Plan (regardless if it
      has  commenced),  under  certain  prescribed  circumstances  involving his
      conduct under Section 9.5.

                                      -8-
<PAGE>

                                   ARTICLE VI
                           NORMAL RETIREMENT BENEFIT

6.1   SERP Benefit.  If a  Participant  is vested under Article V as a result of
      attaining age 61, he shall receive his SERP Accrued  Benefit  effective as
      of his Normal Retirement Date (the  "commencement  date") as calculated in
      Section 4.1, to be paid in accordance with Section 6.3.

6.2   Normal Retirement Date. A Participant's "Normal Retirement Date" means the
      later of the date of his 61st birthday or the date of his  Termination  of
      Employment on or after his 61st birthday.

6.3   Actual  Payment.  A  Participant's  benefit  shall  be  paid  as  soon  as
      administratively  practicable  beginning  on the first day of the  seventh
      month  immediately  following  the  month in which the  commencement  date
      occurs in  accordance  with Section 6.1. The  Participant's  first payment
      shall include the value (without interest) of the payments the Participant
      would have  received  had his payment from the Plan begun on the first day
      of the first month following the commencement date.

6.4   Normal  Annuity  Form. A  Participant's  SERP  Accrued  Benefit is payable
      monthly in the form of a single life annuity.  However, if the Participant
      is married, his retirement benefit is payable in a joint and 100% survivor
      annuity with his spouse which is the  actuarial  equivalent  of the single
      life annuity.

      The normal annuity form of his SERP Accrued Benefit,  therefore, shall not
      be the actual  annuity  form in which he receives his  retirement  benefit
      from the Pension Plan.  Rather, the normal annuity form is based solely on
      his marital status at the commencement of his SERP Accrued Benefit.

6.5   Alternative  Form of Payment.  A Participant may elect to receive his SERP
      Accrued  Benefit  in one of the  following  forms of  payment  that is the
      actuarial  equivalent of the single life annuity form of payment,  subject
      to such rules and procedures as established by the Committee:

      (a)   A single life annuity.

      (b)   A 30%, 40%, 50%, 75% or 100% joint and survivor annuity.

      (c)   Any  other  annuity  form of  payment,  as may be  permitted  by the
            Committee.

      The Committee  shall disregard any election by a Participant to change the
      form of his SERP Accrued  Benefit to the extent such election would result
      in an  impermissible  acceleration  of the  payment  of the  Participant's
      benefit under the Plan within the meaning of Section 409A of the Code.

      At the election of the  Participant,  the joint and  survivor  annuity may
      provide  that  if  the  Participant's  joint  annuitant  dies  before  the
      Participant, the Participant's monthly benefit will increase to the amount
      he would have received had he  originally  elected the single life annuity
      form of payment. The joint and survivor annuity that includes this feature
      will be the actuarial  equivalent of a single life annuity form of payment
      as provided above.

                                      -9-
<PAGE>

6.6   Lump Sum for Small  Benefits.  The Plan does not allow a lump sum payment.
      However,  if the  actuarially  equivalent  lump  sum  present  value  of a
      Participant's  benefit  is under  $20,000 as of the  Participant's  Normal
      Retirement  Date, his benefit shall be paid in a lump sum on the first day
      of the  seventh  month  immediately  following  the  month  in  which  the
      Participant's Normal Retirement Date occurs.

                                      -10-
<PAGE>

                                   ARTICLE VII
                            EARLY RETIREMENT BENEFIT

7.1   Early Retirement Benefit. If a Participant is vested under Section 5.3, he
      shall receive an early retirement  benefit effective as of his Termination
      of Employment  (the  "commencement  date"),  to be paid in accordance with
      Section 7.3. The  Participant's  early retirement  benefit shall equal his
      SERP Accrued  Benefit  determined in accordance  with Section 4.1,  except
      that for purposes of this calculation,  the  Participant's  monthly Target
      Retirement  Benefit shall be reduced by one-third of one percent per month
      (or 4% per year) for each full month by which the commencement date of his
      SERP Accrued Benefit precedes the date he attains age 61.

7.2   Earliest Retirement Date. A Participant's "Earliest Retirement Date" means
      the date he has both (i)  attained age 55 and (ii) been  credited  with at
      least 10 Years of Vesting Service.

      A  Participant's  "Years  of  Vesting  Service"  shall  equal his years of
      vesting  service  under Section 1.35 of the Pension Plan, or any successor
      provision thereto.

7.3   Actual  Payment.  A  Participant's  benefit  shall  be  paid  as  soon  as
      administratively  practicable  beginning  on the first day of the  seventh
      month  immediately  following  the  month in which the  commencement  date
      occurs in  accordance  with Section 7.1. The  Participant's  first payment
      shall include the value (without interest) of the payments the Participant
      would have  received  had his payment from the Plan begun on the first day
      of the first month following the commencement date.

7.4   Normal Annuity Form. A  Participant's  SERP Accrued  Benefit is payable in
      the "normal"  annuity form based on his marital status on the commencement
      date of his SERP Accrued Benefit, as provided in Section 6.4.

7.5   Alternative  Form of Payment.  A Participant may elect to receive his SERP
      Accrued  Benefit  in one of the  following  forms of  payment  that is the
      actuarial  equivalent of the single life annuity form of payment,  subject
      to such rules and procedures as established by the Committee:

      (a)   A single life annuity.

      (b)   A 30%, 40%, 50%, 75% or 100% joint and survivor annuity.

      (c)   Any  other  annuity  form of  payment,  as may be  permitted  by the
            Committee.

      The Committee  shall disregard any election by a Participant to change the
      form of his SERP Accrued  Benefit to the extent such election would result
      in an  impermissible  acceleration  of the  payment  of the  Participant's
      benefit under the Plan within the meaning of Section 409A of the Code.

      At the election of the  Participant,  the joint and  survivor  annuity may
      provide  that  if  the  Participant's  joint  annuitant  dies  before  the
      Participant, the Participant's monthly benefit will increase to the amount
      he would have received had he  originally  elected the single life annuity
      form of payment. The joint and survivor annuity that includes this feature
      will be the actuarial equivalent of single life annuity form of payment as
      provided above.

7.6   Lump Sum for Small  Benefits.  The Plan does not allow a lump sum payment.
      However, if the lump sum present value of a Participant's benefit is under
      $20,000 as of the  Participant's  Termi-

                                      -11-
<PAGE>

      nation of Employment, his benefit shall be paid in a lump sum on the first
      day of the  seventh  month  immediately  following  the month in which the
      Participant's Termination of Employment occurs.

                                      -12-
<PAGE>

                                  ARTICLE VIII
                   EFFECT OF DEATH AND DISABILITY ON BENEFITS

8.1   Death Benefit.  If a Participant  dies before  becoming vested in his SERP
      Accrued Benefit under Article V, the Participant  shall not be entitled to
      any benefit under the Plan. If a Participant is vested in his SERP Accrued
      Benefit under Article V and dies before the commencement  date of his SERP
      Accrued  Benefit,  his surviving  spouse (if marrried for at least the one
      year period  ending on his death) shall  receive a benefit for the life of
      the surviving  spouse in an amount equal to the monthly  amount that would
      have been  payable as a single life annuity to the  Participant  as of the
      date of his death.  Payments  shall  commence as soon as  administratively
      practicable on the first day of the first month  coincident  with or after
      the date the Participant  would have been able to receive his SERP Accrued
      Benefit assuming the Participant's  Termination of Employment  occurred as
      of the date of his death.  If the  Participant  dies  without a  surviving
      spouse, the death benefit is not paid to any person. If a Participant dies
      after the commencement date of his SERP Accrued Benefit,  no death benefit
      will be payable  under this Section  8.1. In this case,  the Plan will pay
      only whatever  survivor  benefit is payable under the terms of the annuity
      form of payment  in which the  Participant  elected  to  receive  his SERP
      Accrued Benefit.

8.2   Disability.  If a  Participant  who is  vested  under  Article  V  becomes
      disabled  (within the meaning of the  Company's or  Affiliate's  long-term
      disability plan) while an Eligible  Executive,  the Participant's  benefit
      shall  be  paid  as soon as  administratively  practicable  following  the
      Participant's  Termination of Employment in accordance  with Article VI or
      VII  (subject  to  Section  9.4(a)).   For  purposes  of  calculating  the
      Participant's SERP Accrued Benefit under Article IV, the Participant shall
      accrue  additional  Years of  Benefit  Service  under the Plan to the same
      extent the Participant accrues benefit service under Sections 1.34 and 3.6
      of the Pension Plan (up to a maximum of five Years of Benefit Service).

                                      -13-
<PAGE>

                                   ARTICLE IX
                               SPECIAL PROVISIONS

9.1   Leaves of Absence, Severance Pay. A Participant's Years of Benefit Service
      and Years of Vesting Service shall include leaves of absence authorized by
      the Company and such other  periods of  employment  as  determined  by the
      Committee.  However,  the  Participant's  annual  compensation,  Years  of
      Vesting Service, and Years of Benefit Service shall not include any period
      following his Termination of Employment during which he receives severance
      pay, unless otherwise provided in Section 9.4.

9.2   Changes of Employment Status. If a Participant  transfers  employment to a
      non-Participating  Affiliate,  is  reassigned  to a position  other than a
      position  described in Section  3.4, or otherwise  fails to be eligible to
      participate  in  the  Plan,  the  Participant   shall  be  suspended  from
      participation in the Plan. A Participant,  whose participation in the Plan
      has been suspended,  shall cease to accrue  additional  benefits after the
      effective  date of  such  employment  status  change.  Such  Participant's
      benefit  under  Section  4.1  shall  be  calculated  as if he  incurred  a
      termination of employment on the date of the employment status change.

9.3   Change in Control of the  Company.  A  Participant  shall vest in his SERP
      Accrued  Benefit upon the  occurrence of one of the  following  "Change in
      Control" events:

      (a)   The  acquisition  by any  individual,  entity or group  (within  the
            meaning of Section  13(d)(3) or 14(d)(2) of the Securities  Exchange
            Act of 1934,  as  amended  (the  "Exchange  Act")) (a  "Person")  of
            beneficial  ownership  (within the meaning of Rule 13d-3 promulgated
            under  the  Exchange  Act)  of 20% or more of  either  (x) the  then
            outstanding  shares of common stock of the Company (the "Outstanding
            Company Common Stock") or (y) the combined  voting power of the then
            outstanding  voting  securities  of the  Company  entitled  to  vote
            generally  in the election of directors  (the  "Outstanding  Company
            Voting Securities");  provided,  however,  that for purposes of this
            subsection  (a), the following  acquisitions  shall not constitute a
            Change of Control:  (i) any  acquisition  directly from the Company,
            (ii) any  acquisition by the Company,  (iii) any  acquisition by any
            employee  benefit plan (or related trust) sponsored or maintained by
            the  Company  or  an  Affiliate  or  (iv)  any  acquisition  by  any
            corporation  pursuant to a transaction  which  complies with clauses
            (i), (ii) and (iii) of subsection (c) of this Section 9.3; or

      (b)   Individuals  who, as of the date hereof,  constitute  the Board (the
            "Incumbent  Board")  cease for any reason to  constitute  at least a
            majority  of the  Board;  provided,  however,  that  any  individual
            becoming a director subsequent to the date hereof whose election, or
            nomination for election by Company's shareholders, was approved by a
            vote of at least a majority of the  directors  then  comprising  the
            Incumbent Board shall be considered as though such individual were a
            member of the Incumbent Board, but excluding,  for this purpose, any
            such  individual  whose  initial  assumption  of office  occurs as a
            result of an actual or threatened  election  contest with respect to
            the election or removal of  directors or other actual or  threatened
            solicitation  of  proxies  or  consents  by or on behalf of a Person
            other than the Board; or

      (c)   Consummation of a reorganization, merger or consolidation or sale or
            other  disposition of all or substantially  all of the assets of the
            Company (a "Business Combination"),  in each case, unless, following
            such  Business  Combination,  (i)  all or  substantially  all of the
            individuals   and   entities   who  were  the   beneficial   owners,
            respectively,   of  the   Outstanding

                                      -14-
<PAGE>

            Company  Common  Stock and  Outstanding  Company  Voting  Securities
            immediately  prior to such Business  Combination  beneficially  own,
            directly or  indirectly,  more than 60% of,  respectively,  the then
            outstanding  shares of common stock and the combined voting power of
            the then outstanding voting securities entitled to vote generally in
            the election of  directors,  as the case may be, of the  corporation
            resulting  from  such  Business  Combination   (including,   without
            limitation, a corporation which as a result of such transaction owns
            the  Company or all or  substantially  all of the  Company's  assets
            either directly or through one or more of its affiliated  companies)
            in   substantially   the  same   proportions  as  their   ownership,
            immediately  prior to such Business  Combination of the  Outstanding
            Company Common Stock and Outstanding  Company Voting Securities,  as
            the case may be, (ii) no Person (excluding any corporation resulting
            from such  Business  Combination  or any  employee  benefit plan (or
            related  trust) of the Company or such  corporation  resulting  from
            such   Business   Combination)   beneficially   owns,   directly  or
            indirectly,  20% or more  of,  respectively,  the  then  outstanding
            shares  of  common  stock of the  corporation  resulting  from  such
            Business  Combination  or the  combined  voting  power  of the  then
            outstanding  voting  securities  of such  corporation  except to the
            extent that such ownership existed prior to the Business Combination
            and  (iii)  at  least a  majority  of the  members  of the  board of
            directors  of  the   corporation   resulting   from  such   Business
            Combination  were members of the Incumbent  Board at the time of the
            execution of the initial  agreement,  or of the action of the Board,
            providing for such Business combination; or

      (d)   Approval  by  the   shareholders   of  the  Company  of  a  complete
            liquidation or dissolution of the Company.

9.4   Effect of a Change in Control on a SERP Accrued Benefit.

      (a)   If a  Participant  who is  vested  under  Article V as a result of a
            Change in Control  incurs a Termination  of  Employment  (and is not
            otherwise  vested under Section  5.1(a) or (b)), he will receive his
            SERP  Accrued  Benefit  on the  later  of  (i)  his  Termination  of
            Employment, or (ii) his attaining age 55. Subject to Section 9.4(b),
            the  amount,  time and form of  payment  of the  Participant's  SERP
            Accrued Benefit shall be determined in accordance with Article VII.

      (b)   If  a   Participant's   Termination   of  Employment   occurs  under
            circumstances  entitling him to severance  pay or benefits  under an
            Employment  Agreement  between the  Participant and the Company that
            becomes  effective  as a result of the Change in  Control,  then the
            amount (but not the time for  payment) of the SERP  Accrued  Benefit
            shall  be  computed  as if the  Participant's  employment  with  the
            Company or a  Participating  Affiliate had continued for a number of
            years  equal  to  the  multiple  (as  defined  in  such   Employment
            Agreement),   with   annual   compensation   equal  to  the   annual
            compensation required by the Employment Agreement.

9.5   Forfeiture  Events.  Even if a  Participant  is vested in his SERP Accrued
      Benefit under Article V, he shall cease to be vested,  and  thereafter not
      be entitled to any benefit from the Plan (regardless if it commenced),  if
      the  Participant's   employment  with  the  Company  or  an  Affiliate  is
      terminated for any one or more of the following reasons:

      (a)   The   Participant's   willful  and  continued   failure  to  perform
            substantially  his duties  with the Company or an  Affiliate  (other
            than any such failure  resulting from  incapacity due to physical or
            mental illness),  after a written demand for substantial performance
            is deliv-

                                      -15-
<PAGE>

            ered to the Participant which specifically  identifies the manner in
            which the Participant has not substantially performed his duties;

      (b)   the willful  engaging by the Participant in illegal conduct or gross
            misconduct  which is materially  and  demonstrably  injurious to the
            Company or an Affiliate;

      (c)   the  repeated  use of alcohol  by the  Participant  that  materially
            interferes with  Participant's  duties,  use of illegal drugs by the
            Participant,  or a violation by the  Participant  of the drug and/or
            alcohol policies of the Company or Affiliate;

      (d)   a  conviction,  guilty  plea  or  plea  of  nolo  contendere  of the
            Participant  for any  crime  involving  moral  turpitude  or for any
            felony;

      (e)   a breach by the  Participant  of his fiduciary  duties of loyalty or
            care to the Company or Affiliate or a material violation of the Code
            of Business Conduct and Ethics, or similar policies,  of the Company
            or an Affiliate; or

      (f)   the breach by the Participant of the  confidentiality  provision set
            forth in his Employment Agreement with the Company.

      Further, even if a Participant is vested, he shall cease to be vested, and
      thereafter not be entitled to any benefit from the Plan  (regardless if it
      commenced),  if (i) his  death  occurs  during  the  first  24  months  of
      participation  in the  Plan  as a  result  of  suicide  or  (ii) he made a
      material  misrepresentation  in any form or document provided by him to or
      for the benefit of the Company or an Affiliate.

9.6   Reemployment.  Upon a Participant's  non-vested Termination of Employment,
      his Years of Vesting  Service  and his Years of Benefit  Service  shall be
      immediately  forfeited.  If  the  Participant  is  ever  reemployed  as an
      Employee  eligible  to  participate  in the Plan under  Section  3.1,  the
      Committee may, in its sole discretion,  reinstate all or some of his Years
      of Benefit  Service for purposes of  calculating  the  Participant's  SERP
      Accrued  Benefit under Section 4.1 and all or some of his Years of Vesting
      Service  for  purposes  of  determining   his  eligibility  for  an  early
      retirement  benefit  under  Section 7.1 to the extent such  service is not
      otherwise credited under Sections 1.34 or 1.35 of the Pension Plan, or any
      successor provision thereto.

      If a Participant was vested under Section 5.2,  Section 5.3 or Section 5.5
      as of his Termination of Employment and he is ever reemployed and eligible
      to participate in the Plan under Section 3.1, he shall  participate in the
      Plan and continue to accrue  increases to his SERP Accrued  Benefit  under
      Section 4.1. If the Participant's  retirement  benefit has commenced,  the
      Committee  in its  discretion  may  suspend  the  benefit  to  the  extent
      permitted  under Section 409A of the Code. In any event,  upon  subsequent
      retirement,  his  retirement  benefit  will be  recalculated  to take into
      account   subsequent   increases  to  his  accrued  benefit  and  previous
      retirement benefit payments.

9.7   Actuarial Equivalence.  For purposes of the Plan, "actuarial  equivalence"
      or  "actuarially  equivalent"  shall have the same  meaning as provided in
      Sections  1.2(a) and 1.2(b) of the  Pension  Plan with  respect to annuity
      calculations and lump-sum calculations.

9.8   Delay  and  Acceleration  of  Payments.  The  Committee  may,  in its sole
      discretion,  accelerate  any  payment to the extent such  acceleration  is
      permitted  under Section 409A of the Code.  The Committee may, in its sole
      discretion,  delay  payment  of any  amount to the  extent  such  delay is
      permitted or required  under Section 409A of the Code. For purposes of the
      Plan, the phrase "permitted

                                      -16-
<PAGE>

      or required by Section  409A of the Code" shall mean that the action shall
      only be  permitted  to the  extent it would  not  cause  the SERP  Accrued
      Benefit  to  be  includible  in  the  gross  income  of a  Participant  or
      beneficiary under Section 409A(a)(1) of the Code.

                                      -17-
<PAGE>

                                    ARTICLE X
                          ADMINISTRATION AND FINANCING

10.1  Plan  Administration.  The  Plan is  administered  by the  Committee.  The
      Committee is responsible for the  administration  of the Plan and may also
      delegate certain administrative functions to other persons,  including the
      Central  Hudson  Gas  &  Electric  Corporation  Benefits  Committee.   The
      Committee  possesses  the sole and  absolute  discretionary  authority  to
      interpret and construe the  provisions of the Plan, as well as to make all
      determinations  under the Plan,  such as  eligibility,  benefits,  service
      credit   and   distributions.    The   Committee's   interpretations   and
      determinations are conclusive on all interested parties.

10.2  Claims  Procedures.  If a  Participant's  claim for benefits is denied (in
      whole or in part),  he shall receive,  within 90 days after receipt of the
      claim (180 if special circumstances apply), a written explanation from the
      Committee  detailing  the  specific  reasons for the denial,  the specific
      references  to the plan  provisions  on  which  the  denial  is  based,  a
      description  of any  additional  information  needed from him and why such
      information   is  required,   and  a  description  of  the  Plan's  appeal
      procedures,  including applicable time limits and a statement of his right
      to bring a civil action under Section 502(a) of ERISA.

      The Participant, or any person he may choose to represent him, may ask the
      Committee  for a review of his denied claim within 60 days after his claim
      has been  denied.  The  Participant's  request,  which must be in writing,
      should  include  the  following  information:  The  date  the  Participant
      submitted his original  request for benefits,  the specific portion of the
      denial  notice that he wishes the  Committee to review,  the reason why he
      thinks his original  request  should be approved and any written  material
      that he wishes the Committee to consider when  reviewing his request.  The
      Participant  may  also  request  that all  documents,  records  and  other
      information  relevant to his claim be made  available for his review.  The
      Participant may submit information for review regardless of whether it was
      considered in the original claim review.

      The Committee or other named  fiduciaries for appeals shall conduct a full
      and fair review of the claim and appeal and notify the  Participant of its
      decision  within  60  days  (120 if  special  circumstances  apply).  That
      decision  shall be in writing and shall  include the specific  reasons and
      the Plan references to the pertinent Plan provisions on which the decision
      is based.

10.3  Committee  Authority.  The  Committee  shall have the  authority  to make,
      amend,  interpret,  and enforce all appropriate  rules and regulations for
      the administration of the Plan and decide or resolve any and all questions
      including  interpretations  of the Plan, as provided under Section 10.1. A
      majority vote of the Committee members shall control any decision.

10.4  Agents.  The  Committee  may,  from time to time,  employ other agents and
      delegate to them such  administrative  duties as it sees fit, and may from
      time to time consult with counsel who may be counsel to the Company.

10.5  Binding  Effect of  Decisions.  The decision or action of the Committee in
      respect  of  any  question  arising  out  of or  in  connection  with  the
      administration,  interpretation  and application of the Plan and the rules
      and  regulations  promulgated  hereunder shall be final and conclusive and
      binding upon all persons having any interest in the Plan.

                                      -18-
<PAGE>

10.6  Indemnity of Committee.  The Company shall indemnify and hold harmless the
      members of the Committee against any and all claims, loss, damage, expense
      or liability arising from any action or failure to act with respect to the
      Plan on account of such member's  service on the  Committee  except in the
      case of gross negligence or willful misconduct.

10.7  Unfunded  Plan.  The Plan is an  unfunded  plan  maintained  primarily  to
      provide deferred  compensation  benefits for a select group of "management
      or highly compensated  employees" within the meaning of Sections 201, 301,
      and 401 of ERISA,  and therefore is exempt from the provisions of Parts 2,
      3 and 4 of Title I of ERISA.  Accordingly,  to the extent  permitted under
      Section  409A of the Code,  the  Company or  Participating  Affiliate  may
      terminate the Plan and make no further benefit payments, or remove certain
      employees  as  Participants  if it is  determined  by  the  United  States
      Department of Labor, a court of competent  jurisdiction,  or an opinion of
      counsel that the Plan  constitutes an employee pension benefit plan within
      the meaning of Section 3(2) of ERISA (as  currently in effect or hereafter
      amended) which is not so exempt.

10.8  Company  Obligation.  The  obligation  to  make  benefit  payments  to any
      Participant under the Plan shall be an obligation solely of the Company or
      a Participating  Affiliate with respect to the benefit receivable from the
      Company or a  Participating  Affiliate  and shall not be an  obligation of
      another company.

10.9  Interest of Participants.  A Participant and his beneficiaries  shall have
      no legal or equitable rights, interest or claims in any property or assets
      of  the  Company  or  a  Participating   Affiliate,   nor  shall  they  be
      beneficiaries  of, or have any rights,  claims or  interests  in, any life
      insurance  policies,  annuity contracts or the proceeds therefrom owned or
      which may be acquired by the Company or a  Participating  Affiliate.  Such
      policies or other assets shall not be held for the benefit of Participants
      and their beneficiaries, or held in any way as collateral security for the
      fulfilling of the obligations of the Company or a Participating  Affiliate
      under  the  Plan.  Any  and  all  of  the  assets  of  the  Company  and a
      Participating  Affiliate  shall be, and remain,  the  general,  unpledged,
      unrestricted  assets thereof.  The Company and  Participating  Affiliate's
      obligations  under the Plan  shall be that of an  unfunded  and  unsecured
      promise to pay money in the future.

10.10 Trust Fund. The Company or a Participating  Affiliate shall be responsible
      for the  payment  of all  benefits  provided  under the Plan  regarding  a
      Participant  employed by the Company or  Participating  Affiliate.  At its
      discretion,  the  Company  may  establish  one or more  trusts,  with such
      trustees as the Company may approve,  for the purpose of providing for the
      payment of such benefits. Such trust or trusts may be irrevocable, but the
      assets  thereof  shall  be  subject  to  the  claims  of  the  Company  or
      Participating  Affiliate's  general creditors.  To the extent any benefits
      provided under the Plan are actually paid from any such trust, the Company
      or Participating  Affiliate shall have no further  obligation with respect
      thereto,  but to the extent not so paid,  such  benefits  shall remain the
      obligation  of,  and  shall  be paid  by,  the  Company  or  Participating
      Affiliate.

                                      -19-
<PAGE>

                                   ARTICLE XI
                            AMENDMENT AND TERMINATION

11.1  Amendment.  The sponsor of the Plan is the Company, which has the right to
      amend the provisions of the Plan for any reason and at any time, including
      the reduction of accrued  benefits and optional forms of payment under the
      Plan. Any amendment may provide different  benefits or amounts of benefits
      from those set forth hereunder, provided that such change in the amount or
      form of benefits  does not result in an  impermissible  acceleration  of a
      payment within the meaning of Section 409A(a)(3) of the Code.

11.2  Suspension,  Termination. The Company may, in its sole discretion, suspend
      or terminate the Plan at any time, in whole or in part as permitted  under
      Section 409A of the Code.

11.3  Termination  Upon a  Change  in  Control.  The  Company  may,  in its sole
      discretion,  terminate the Plan and  distribute  vested  benefits  accrued
      under the Plan within the 30-day  period  preceding or during the 12-month
      period  following a "change in control" of the Company as permitted  under
      Section 409A of the Code.  For purposes of this Section  11.3, a change in
      control shall have the meaning ascribed to such term under Section 409A of
      the Code.

                                      -20-
<PAGE>

                                   ARTICLE XII
                                  MISCELLANEOUS

12.1  Nonassignability.  Neither a  Participant  nor any other person shall have
      any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
      or  otherwise  encumber,  transfer,  hypothecate  or convey in  advance of
      actual  receipt the amounts,  if any,  payable under the Plan, or any part
      thereof,  which are, and all rights to which are, expressly declared to be
      unassignable  and  nontransferable.  No part of the amounts payable shall,
      prior to actual payment,  be subject to seizure or  sequestration  for the
      payment of any debts,  judgments,  alimony or separate maintenance owed by
      the  Participant or any other person,  nor be transferable by operation of
      law in the event of the Participant's or any other person's  bankruptcy or
      insolvency.

      However,  if, as a result of a divorce,  a Participant is responsible  for
      child support,  alimony, or marital property rights payments,  his benefit
      under the Plan may be assigned  to meet those  payments,  if a  qualifying
      domestic  relations order has been issued for the Plan, as approved by the
      Committee.

12.2  Protective  Provisions.  A Participant  will cooperate with the Company by
      furnishing any and all information  requested by the Company,  in order to
      facilitate  the payment of benefits  hereunder and by taking such physical
      examinations  as the  Company  may deem  necessary  and taking  such other
      action as may be requested by the Company.

12.3  Gender and Number.  Whenever  any words are used herein in the  masculine,
      they shall be  construed  as though they were used in the feminine and the
      neuter in all cases where they would so apply;  and wherever any words are
      used herein in the  singular or in the plural,  they shall be construed as
      though they were used in the plural or the  singular,  as the case may be,
      in all cases where they would so apply.

12.4  Captions.  The captions of the  articles,  sections and  paragraphs of the
      Plan are for convenience  only and shall not control or affect the meaning
      or construction of any of its provisions.

12.5  Governing  Law.  The  provisions  of  the  Plan  shall  be  construed  and
      interpreted  according to the laws of the State of New York, except to the
      extent preempted by ERISA.

12.6  Validity.  In case any  provision  of the Plan  shall be held  illegal  or
      invalid for any reason, said illegality or invalidity shall not affect the
      remaining parts hereof, but the Plan shall be construed and enforced as if
      such illegal and invalid provision had never been inserted herein.

12.7  Notice.  Any notice or filing  required  or  permitted  to be given to the
      Committee  under  the Plan  shall be  sufficient  if in  writing  and hand
      delivered,  or sent by registered  or certified  mail to any member of the
      Committee or the  Secretary  of the  Company.  Such notice shall be deemed
      given as of the date of delivery  or, if  delivery is made by mail,  as of
      the  date  shown  on the  postmark  on the  receipt  for  registration  or
      certification.  Mailed  notice to the  Committee  shall be directed to the
      Company's  address.  Mailed  notice  to a  Participant,  eligible  spouse,
      surviving spouse or beneficiary shall be directed to the individual's last
      known address in the Company's records.

                                      -21-
<PAGE>

12.8  Successors. The provisions of the Plan shall bind and inure to the benefit
      of the  Company  and a  Participating  Affiliate  and its  successors  and
      assigns. The term successors as used herein shall include any corporate or
      other  business  entity  which  shall,  whether by merger,  consolidation,
      purchase or otherwise,  acquire all or  substantially  all of the business
      and assets of the Company or a Participating  Affiliate, and successors of
      any such corporation or other business entity.

12.9  Withholding.  The Company shall  withhold from payments made  hereunder to
      any Participant or beneficiary any taxes required to be withheld from such
      payments under federal, state or local law.

12.10 Payment to  Guardian.  If a Plan benefit is payable to a minor or a person
      declared  incompetent or to a person incapable of handling the disposition
      of property,  the Committee may direct payment of such Plan benefit to the
      guardian,  legal  representative  or person having the care and custody of
      such minor,  incompetent  or person.  The  Committee  may require proof of
      incompetency,   minority,  incapacity  or  guardianship  as  it  may  deem
      appropriate  prior to distribution of the Plan benefit.  Such distribution
      shall completely  discharge the Company and  Participating  Affiliate from
      all liability with respect to such benefit.

12.11 Release.  Notwithstanding  anything  contained  herein  to  the  contrary,
      neither the Company nor any  Affiliate  shall be obligated to make payment
      of any benefit to a  Participant  under the Plan  unless such  Participant
      first  executes a  release,  in a form  provided  by the  Company,  of all
      current or future  claims,  known or  unknown,  against the  Company,  its
      Affiliates, its officers,  directors,  shareholders,  employees and agents
      arising on or before the date of the release, including but not limited to
      all claims arising out of the Participant's employment with the Company or
      its Affiliates or the  termination of such  employment,  and to the extent
      such payment is subject to the seven-day  revocation  period prescribed by
      the Age  Discrimination  in Employment Act of 1967, as amended,  or to any
      similar  revocation  period in effect  on the date of  termination  of the
      Participant's employment, such revocation period has expired.

12.12 Miscellaneous  Employment.  The  establishment of the Plan does not give a
      Participant  the legal right to continued  employment  with the Company or
      Affiliate.  Further, a Participant's  eligibility or his right to benefits
      under the Plan should not be interpreted as any guarantee of employment.

      In the event that any lawsuit or any settlement  thereof or any claim,  or
      if any governmental  agency,  court or other governing body,  requires the
      Company to  reclassify  the  employment  status of any  individual  who is
      excluded from participation  under the Plan, such reclassified  individual
      nevertheless  shall not be  considered  an eligible  employee or otherwise
      eligible for the Plan and,  therefore,  not be entitled to accrue benefits
      under the Plan as a result thereof.

                                      -22-
<PAGE>

      IN WITNESS WHEREOF, CH Energy Group, Inc. has caused this instrument to be
executed by its duly authorized officer on this 31st day of March, 2006.

                                               CH ENERGY GROUP, INC.

                                               By: /s/ Steven V. Lant
                                                  ------------------------------

                                               Dated: March 31, 2006
                                                     ---------------------------

                                      -23-

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