Document:

Exhibit (10)(iii)39 

CENTRAL HUDSON GAS & ELECTRIC CORPORATION

RETIREMENT BENEFIT RESTORATION PLAN 

AMENDED AND RESTATED AS OF JANUARY 1, 2008

Introduction & History

          Effective
May 1, 1993, Central Hudson Gas & Electric Corporation (“Central Hudson”)
originally established the Central Hudson Gas & Electric Corporation
Retirement Benefit Restoration Plan (the “Plan”), which was established to
provide excess retirement benefits for eligible executives, and subsequently
amended and restated the Plan effective January 1, 2000. Effective as of
December 31, 2005, all benefit accruals under the Plan were frozen with respect
to vested Participants and the Plan was terminated with respect all non-vested
Participants. 

          Central
Hudson hereby amends and restates the Plan, effective January 1, 2008, to
incorporate changes required by Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”), in the manner provided hereunder. In order to
comply with section 409A of the Code, effective immediately before January 1,
2008, the Plan is divided into two parts, one of which shall be named “Part
One” and the other of which shall be named “Part Two”. Part One of the Plan
shall be governed by the terms and conditions of the Plan as in effect on October
3, 2004, as amended effective December 31, 2005, and shall apply to
“Grandfathered Participants” under Section 4.06. Part Two of the Plan shall be
governed by the terms and conditions of the Plan as set forth herein, and as it
may be amended from time to time hereafter, and shall apply to the individuals,
other than Grandfathered Participants, who participated in the Plan on or after
January 1, 2005 as listed on Exhibit A (the “Covered Participants”). Part Two
of the Plan is intended to comply with Section 409A of the Code. 

Article I. Definitions

          1.01          “Act”
shall mean the Employee Retirement Income Security Act of 1974 (“ERISA”), as
from time to time amended. 

          1.02
          “Affiliate”
means each entity with whom Central Hudson would be considered a single
employer under Sections 414(b) and 414(c) of the Code, provided that in
applying Section 1563(a)(1), (2), and (3) for purposes of determining a
controlled group of corporations under Section 414(b) of the Code, the language
“at least 50 percent” is used instead of “at least 80 percent” each place it
appears in Section 1563(a)(1), (2), and (3), and in applying Treasury
Regulation Section 1.414(c)-2 for purposes of determining trades or businesses
(whether or not incorporated) that are under common control for purposes of
Section 414(c), “at least 50 percent” is used instead of “at least 80 percent”
each place it appears in that regulation. Such term shall be interpreted in a
manner consistent with the definition of “service recipient” contained in
Section 409A of the Code. 

          1.03
          “Affiliated
Group” means (i) Central Hudson and (ii) all Affiliates. 

          1.04
          “Code” shall
mean the Internal Revenue Code of 1986, as amended from time to time.

          1.05
          “Central Hudson”
shall mean Central Hudson Gas & Electric Corporation.

          1.06
          “Effective Date”
shall mean May 1, 1993. 

          1.07
          “Employment
Agreement” shall mean a Change of Control Employment Agreement between a
Participant and Energy Group. 

          1.08
          “Energy Group”
shall mean CH Energy Group, Inc., the parent corporation of Central Hudson. 

          1.09
          “Maximum Benefit”
shall mean the benefit or benefits to be paid to a Participant under the
Pension Plan which corresponds to his Unrestricted Benefit. 

          1.10
          “Participant”
shall mean those individuals listed on Exhibit A. 

          1.11
          “Pension Plan”
shall mean the Retirement Income Plan of Central Hudson Gas & Electric
Corporation, as from time to time amended. 

          1.12
          “Plan” shall
mean Central Hudson Retirement Benefit Restoration Plan, as from time to time
amended, which shall be an unfunded and uninsured pension benefit plan for a
select group of highly compensated management employees of Central Hudson
and/or Energy Group. 

          1.13
          “SERP” shall
mean the CH Energy Group, Inc. Supplemental Executive Retirement Plan. 

          1.14
          “Termination of
Employment” means, subject to Section 4.05(b), the termination of an
Employee’s employment with the Affiliated Group as a result of his voluntary
termination, retirement, discharge, death or his becoming eligible to receive
disability benefits under Central Hudson’s or an Affiliate’s long-term
disability plan. 

          1.15
          “Unrestricted
Benefit” shall mean whichever of the following is applicable: (i) the
monthly retirement income benefit under the Pension Plan (“Retirement Income
Benefit”) and (ii) if applicable, the benefit under the Cash Balance Account
(“Cash Balance Benefit”) of the Pension Plan, all determined under the Pension
Plan without regard to the limitations imposed by Code Sections 401(a)(17) and
415. 

Article II. Benefits

          2.01
          Benefit,
Commencement. Upon a Participant’s Termination of Employment, such
Participant shall be entitled to (i) a Retirement Income Benefit equal to his
or her Unrestricted Benefit less the Maximum Benefit (as determined under Section
3.09), in the amount thereof payable as of the first day of the first month
following the later of his or her 55th birthday or Termination of Employment
and (ii) if applicable, a Cash Balance Benefit equal to his or her Unrestricted
Benefit less the Maximum Benefit (as determined under Section 3.09), in the
amount thereof payable as of the date of the commencement of his or her Benefit
hereunder. A Participant’s Retirement Income Benefit shall commence, and his or
her Cash Balance Benefit shall be paid, to him or her as of the first day of
the first month following the later of (i) his 55th birthday or (ii) the
six-month anniversary of his or her Termination of Employment; with actual
payment(s) commencing or paid within 90 days thereof. If payments of his or her
Retirement Income Benefit commences as a result of the foregoing clause (ii),
the first payment thereof shall include any monthly payments (without interest)
that would have been made had the Retirement Income Benefit commenced on the
first day of the month following his or her Termination of Employment. 

          2.02
          Spouse’s Pension
Benefit. Subject to Section 2.03 below, upon the death of a Participant
whose spouse is eligible for an annuity under the Pension Plan, the
Participant’s surviving spouse shall be entitled to (i) a monthly benefit equal
to the surviving spouse benefit annually determined in accordance 

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with the provisions of the
Pension Plan without regard to any limitations imposed by the Code Sections
401(a)(17) and 415, less the related Maximum Benefit to which such spouse is
entitled and (ii) if applicable, a Cash Balance Benefit determined in
accordance with the provisions of the Pension Plan without regard to any
limitations imposed by Code Sections 401(a)(17) and 415, less the related
Maximum Benefit to which such spouse is entitled and less any amount of the
Cash Balance Benefit previously paid to the Participant. Payments shall
commence under this Section 2.02 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 benefit under Section 2.01 assuming the
Participant’s Termination of Employment occurred as of the date of his death,
with actual payment(s) commencing or paid within 90 days thereof. 

          2.03
          Forms of Benefit
Payment. A Participant’s Cash Balance Benefit shall be paid in the form of
a lump sum. A Participant’s Retirement Income Benefit shall be paid in the
annuity forms available under the SERP and the amount thereof shall be the
actuarial equivalent of the Retirement Income Benefit under Section 2.01
payable in a single life annuity, using the actuarial assumptions provided
under Section 9.7 of the SERP. However, if the Participant is a participant in
the SERP, his Retirement Income Benefit shall be paid in the same annuity form
of payment as he elects the payment of his retirement benefit under the SERP
and the amount thereof shall be the actuarial equivalent of the Retirement Income
Benefit under Section 2.01 payable in a single life annuity, using the
actuarial assumptions provided under Section 9.7 of the SERP. 

          2.04
          Reemployment.
If a Participant is receiving annuity payments under this Article and he is
subsequently reemployed by the Affiliated Group, the annuity payments shall
continue to be paid at the same time and form as in effect before his
reemployment. 

Article III. Administration of the Plan

          3.01
          Administrator.
The Plan shall be administered by the Board of Directors of Central Hudson (or
its designee), which shall have the authority to interpret the Plan and issue
such proceedings as it deems appropriate. The Administrator shall have the duty
and responsibility of maintaining records, making the requisite calculations
and disbursing the payments hereunder. The Administrator’s interpretations,
determinations, regulations and calculations shall be final and binding on all
persons and parties concerned. 

          3.02
          Amendment and
Termination. The Administrator may amend or terminate the Plan at any time,
provided, however, that no such amendment or termination shall deprive any
Participant or beneficiary of the benefits to which such Participant is
entitled, under Section 2.01 hereof, as of the date of such amendment or
termination unless the Participant or beneficiary becomes entitled to an amount
equal to such benefit under another plan or practice adopted by Central Hudson.
Notwithstanding the foregoing, for three years following a “Change in Control”
(as defined in the SERP), (i) the Plan may not be amended in any manner adverse
to any individual who is a Participant in the Plan immediately before the
Change-of-Control (a “Protected Participant”), or a beneficiary of a Protected
Participant and (ii) the Plan may not be terminated with respect to Protected
Participants and their beneficiaries. 

          3.03
          Payments.
Central Hudson will pay all benefits arising under this Plan and all costs,
charges and expenses relating thereto. 

          3.04
          Non-Assignability
of Benefits. Except as otherwise permitted or required by law, the benefits
payable hereunder or the right to receive future benefits under the Plan may
not be anticipated, alienated, pledged, encumbered, or subjected to any charge
or legal process, and if any attempt is made to do so, or a person eligible for
any benefits becomes bankrupt, the interest under the Plan of the person 

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affected may be terminated
by the Administrator which, in its sole discretion, may cause the same to be
held or applied for the benefit of one or more of the dependents of such person
or make any other disposition of such benefits that it deems appropriate. 

          3.05
          Status of Plan.
The benefits under this Plan shall not be funded, but shall constitute
liabilities of Central Hudson payable when due. 

          3.06
          Nonguarantee of
Employment. Nothing contained in this Plan shall be construed as a contract
of employment between Central Hudson and any Participant, or as a right of any
Participant to be continued in employment of Central Hudson, or as a limitation
on the right of Central Hudson to discharge any of its employees, with or
without cause. 

          3.07
          Applicable Law.
All questions pertaining to the construction, validity and effect of the Plan
shall be determined in accordance with the laws of the United States and to the
extent not pre-empted by such laws, by the laws of the State of New York. 

          3.08
          Inclusion of
Energy Group Participants. This Plan shall only apply to Energy Group
Participants if Energy Group’s Board of Directors adopts this Plan. 

          3.09
          Accrual of
Benefits and Participation after December 31, 2005. Effective as of
December 31, 2005, the Plan is terminated with no future Benefit payable with
respect to any Participant who, as of December 31, 2005, is not vested in a
Benefit under Article II of the Plan (as determined under the Pension Plan) and
no employee of Energy Group or Central Hudson may become a Participant in the
Plan on or after December 31, 2005. A Participant who, as of December 31, 2005,
has a vested benefit under Article II will not accrue any additional Benefit
under the Plan after December 31, 2005 and his Benefit under the Plan will be
determined as of December 31, 2005, based on the Participant’s Unrestricted
Benefit and Maximum Benefit as of December 31, 2005. 

          3.10
          Pre-2008
Payments. If a Participant commences payment of benefits in conjunction
with his benefit under the Pension Plan prior to January 1, 2008, then such
benefit shall be payable for the remainder of 2007 and subsequent calendar
years at the same time and in the same form elected by the Participant under
the Pension Plan. Such time and form of payment shall not be subject to change
after January 1, 2008 and shall not be affected by any changes in the time or
form of payment of the benefit under the Pension Plan that occur on or after
January 1, 2008. 

Article IV. Section 409A Provisions

          4.01
          Discretionary
Acceleration of Payments. Subject to Sections 3.02 and 4.05(a), to the
extent permitted by Section 409A of the Code, the Plan Administrator may, in
its sole discretion, accelerate the time or schedule of a payment under the
Plan. The provision is intended to comply with the exception to accelerated
payments under Treasury Regulation Section 1.409A-3(j) and shall be interpreted
and administered accordingly. 

          4.02
          Delay of Payments.
To the extent permitted under Section 409A of the Code, the Plan Administrator
may, in its sole discretion, delay payment under any of the following
circumstances, provided that the Plan Administrator treats all payments to
similarly situated Participants on a reasonably consistent basis: 

                            (a)          A
Payment may be delayed where the Plan Administrator reasonably anticipates that
the making of the payment will violate federal securities laws or other
applicable law; provided that the delayed payment is made at the earliest date
at which the Plan Administrator reasonably anticipates 

4

that the making of the
payment will not cause such violation. For purposes of the preceding sentence,
the making of a payment that would cause inclusion in gross income or the
application of any penalty provision or other provision of the Code is not
treated as a violation of applicable law. 

             
              (b)
          A payment may be
delayed upon such other events and conditions as the Internal Revenue Service
may prescribe in generally applicable guidance published in the Internal
Revenue Bulletin. To the extent permitted under Section 409A of the Code, the
Plan Administrator may, in its sole discretion, delay payment under any of the
following circumstances, provided that the Plan Administrator treats all
payments to similarly situated Participants on a reasonably consistent basis: 

          4.03
          Actual Date of
Payment. To the extent permitted by Section 409A of the Code, the Plan
Administrator may delay payment in the event that it is not administratively
possible to make payment on the date (or within the periods) specified in the
Plan, or the making of the payment would jeopardize the ability of Central
Hudson (or any entity which would be considered to be a single employer with
Central Hudson under Section 414(b) or Section 414(c) of the Code) to continue
as a going concern. Notwithstanding the foregoing, payment must be made no
later than the latest possible date permitted under Section 409A of the Code. 

          4.04
          Discharge of
Obligations. The payment to a Participant or his beneficiary of his entire
benefit under the Plan shall discharge all obligations of the Affiliated Group
to such Participant or beneficiary under the Plan with respect to that Plan
benefit. 

          4.05
          Compliance with
Section 409A of the Code. 

                           (a)          Notwithstanding
anything contained in the Plan to the contrary, if the Participant is a
“specified employee,” as determined under Central Hudson’s policy for
identifying specified employees on the date of his “separation from service”
within the meaning of Section 409A of the Code, then to the extent required in
order to comply with Section 409A of the Code, all amounts payable under the
Plan that constitute a “deferral of compensation” within the meaning of Section
409A of the Code, that are provided as a result of a “separation from service”
within the meaning of Section 409A of the Code and that would otherwise be paid
during the first six months following such separation from service shall be
accumulated through and paid or provided on the first day of the seventh month
immediately following the month of such separation from service (or, if the
Participant dies during such six-month period, within 30 days after the
Participant’s death). 

                           (b)
          Notwithstanding
anything contained in the Plan to the contrary, the term “Termination of
Employment” or words or phrases of similar import shall mean a “separation from
service” as defined in Section 409A of the Code and the effective date of a
Participant’s “separation from service” as defined in Section 409A of the Code
shall constitute a “Termination of Employment”. Central Hudson and the
Participant shall take all steps necessary to ensure that a Termination of
Employment shall constitute a “separation from service” within the meaning of
Section 409A of the Code, and any benefit payable as a result of a Participant’s
Termination of Employment shall be paid or provided, if and only if, such
Termination of Employment constitutes a “separation from service” within the
meaning of Section 409A of the Code. Upon a sale or other disposition of the
assets of Central Hudson or any Affiliate to an unrelated purchaser, Central
Hudson reserves the right, to the extent permitted by Section 409A of the Code,
to determine whether Participants providing services to the purchaser after and
in connection with the purchase transaction have experienced a “separation from
service” as defined in Section 409A of the Code. 

                           (c)          It
is intended that the payments and benefits provided under the Plan shall comply
with the requirements of Section 409A of the Code. The Plan shall be construed,
administered, 

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and governed in a manner
that effects such intent, and Central Hudson shall not take any action that
would be inconsistent with such intent. Without limiting the foregoing, the
payments and benefits provided under the Plan may not be deferred, accelerated,
extended, paid out or modified in a manner that would result in the imposition
of an additional tax under Section 409A of the Code upon the Participant.
Although Central Hudson shall use its best efforts to avoid the imposition of
taxation, interest and penalties under Section 409A of the Code, the tax
treatment of the benefits provided under the Plan is not warranted or
guaranteed. Neither Central Hudson, its affiliates, directors, officers, employees
nor its advisers shall be held liable for any taxes, interest, penalties or
other monetary amounts owed by the Participant or other taxpayer as a result of
the Plan. Any reference in the Plan to Section 409A of the Code will 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. 

          4.06
          Grandfathered
Participants. The individuals
who were participants of the Plan, vested, and terminated employment as of
December 31, 2004 (the “Grandfathered Participants”) and, therefore, whose
entire benefit under Article V of Part One of the Plan qualifies as an “amount
deferred” prior to January 1, 2005 within the meaning of Section 409A of the
Code, shall participate in, and be governed by the terms and conditions of,
Part One of the Plan. It is intended that such amounts shall be exempt from the
application of Section 409A of the Code. Nothing contained herein is intended
to materially enhance a benefit or right existing under Part One of the Plan or
add a new material benefit or right to Part One of the Plan with respect to
Grandfathered Participants. 

          IN
WITNESS WHEREOF, Central Hudson Gas & Electric Corporation has caused this
instrument to be executed by its duly authorized officer on this ___ day of
December, 2007. 

	
 

	
 

	
 

	
 

	
 

	
CENTRAL
  HUDSON GAS & ELECTRIC CORPORATION

	
 

	
 

	
 

	
 

	
By:

	
/s/ Steven V. Lant

	
 

	
 

	

	
 

	
 

	
 

	
Steven V. Lant, Chairman,
  Chief Executive Officer of
Central Hudson Gas & Electric Corporation

6

CENTRAL HUDSON GAS & ELECTRIC CORPORATION

RETIREMENT BENEFIT RESTORATION PLAN

AMENDED AND RESTATED AS OF JANUARY 1, 2008

Exhibit A—Covered Participants

Steven V. Lant

Carl E. Meyer

Joseph J. DeVirgilio, Jr

Charles A. Freni

Thomas C. Brocks

Donna S. Doyle

Michael L. Mosher

Stacey A. Renner

Denise D. VanBuren

7Exhibit (10)(iii)40

CH
ENERGY GROUP, INC

SHORT-TERM INCENTIVE PLAN

          1.          Purpose.
The purpose of this Short-Term Incentive Plan (this
“STI Plan”) is to reward designated executives of CH Energy Group, Inc. (the “Company”)
and its Subsidiaries for the achievement of each year’s business plan
objectives and individual performance goals in a manner consistent with the
Company’s strategy of achieving long-term shareholder value. 

          2.          Definitions. The
following capitalized words as used in this STI Plan shall have the following
meanings:

                       “Award
Opportunity” means a cash award opportunity established under the STI Plan for
a Participant by the Committee pursuant to such terms, conditions, restrictions
and/or limitations, if any, as the Committee may establish.

                       “Board”
means the Board of Directors of the Company.

                       “Chief
Executive Officer” means the Chief Executive Officer of the Company.

                       “Code”
means the Internal Revenue Code of 1986, as amended.

                       “Committee”
means the Compensation Committee of the Board. 

                       “Company”
has the meaning given such
term in Section 1 of this STI Plan. 

                       “Employee”
means any person employed by the Company or its Subsidiaries, whether such
Employee is so employed at the time the STI Plan is adopted or becomes so
employed subsequent to the adoption of the STI Plan.

                       “Participant”
means, as to any Performance Period, any Employee who is selected by the
Committee to be eligible to participate in the STI Plan for that Performance
Period, as provided herein.

                       “Payout
Formula” means the formula
established by the Committee for determining Award Opportunities for a
Performance Period based on the level of achievement of the Performance
Objectives for the Performance Period. 

                       “Performance
Objectives” means the measurable or subjective performance objective or
objectives established pursuant to this STI Plan for Participants who have
received Award Opportunities. Performance Objectives may be described in terms
of Company-wide objectives or objectives that are related to the performance of
the individual Participant or of a Subsidiary, division, business unit,
department, region or function within the Company or 

Subsidiary in which the Participant is employed. The
Performance Objectives may be made relative to the performance of other
corporations or entities.

                       “Performance
Period” means the Company’s fiscal year or such other period as determined by
the Committee in its discretion.

                       “STI
Plan” means this CH Energy Group, Inc. Short-Term Incentive Plan, as amended
from time to time.

                       “Subsidiary”
means a corporation, company or other entity (i) more than 50 percent of whose
outstanding shares or securities (representing the right to vote for the
election of directors or other managing authority) are, or (ii) which does not
have outstanding shares or securities (as may be the case in a partnership,
joint venture or unincorporated association), but more than 50 percent of whose
ownership interest representing the right generally to make decisions for such
other entity is, now or hereafter, owned or controlled, directly or indirectly,
by the Company. 

          3.          Administration.
The Committee shall be responsible for
administration of the STI Plan. The Committee, by majority action, is
authorized to interpret the STI Plan, to prescribe, amend, and rescind
regulations relating to the STI Plan, to provide for conditions and assurances
deemed necessary or advisable to protect the interests of the Company and its
Subsidiaries, and to make all other determinations necessary or advisable for
the administration of the STI Plan, but only to the extent not contrary to the
express provisions of the STI Plan. Determinations, interpretations, or other
actions made or taken by the Committee pursuant to the provisions of the STI
Plan shall be final, binding and conclusive for all purposes and upon all
Participants. No member of the Committee shall be liable for any such action or
determination made in good faith. The Board (acting solely by the independent
directors as identified under the applicable exchange listing standards) may
perform any function of the Committee hereunder, in which case the term “Committee”
shall refer to the Board.

          4.          Eligibility.
The
Committee, in its sole discretion, shall determine which Employees will be
eligible to participate in the STI Plan for any given Performance Period. When
making this determination, the Committee shall consider the recommendations of
the Chief Executive Officer. Eligible Participants shall be designated by the
Committee either before or within 90 days following the beginning of the
Performance Period. An Employee who is a Participant for a given Performance
Period is neither guaranteed nor assured of being selected for participation in
any subsequent Performance Period.

          5.          Award
Opportunities 

                       a.          No
later than the first 90 days following the beginning of each Performance
Period, the Committee shall establish the Award Opportunity for each
Participant, including the applicable Performance Objectives and Payout
Formula. Each Performance Objective will be weighted by the Committee to
reflect its relative importance to the Company in the applicable Performance
Period. The Payout Formulas, Performance Objectives and weighting of the
Performance Objectives need not be uniform with respect to any or all Participants.
The 

2

Committee shall consider the recommendations of the
Chief Executive Officer in determining the applicable Payout Formulas,
Performance Objectives or weighting of the Performance Objectives with respect
to Participants other than the Chief Executive Officer. The Committee may also
establish Award Opportunities for newly hired or newly promoted employees
without compliance with such timing and other limitations as provided herein,
which Award Opportunities may be based on performance during less than the full
Performance Period and may be pro rated in the discretion of the Committee.

                       b.          Participants
must achieve the Performance Objectives established by the Committee in order
to receive payment of an Award Opportunity under the STI Plan. However, the
Committee may determine that only a threshold level relating to a Performance
Objective must be achieved for Award Opportunities to be paid under the STI
Plan. Similarly, the Committee may establish a minimum threshold performance
level, a maximum performance level, and one or more intermediate performance
levels or ranges, with target award levels or ranges that will correspond to
the respective performance levels or ranges included in the Payout Formula.

                       c.          The
Committee may in its sole discretion modify the Payout Formulas, Performance
Objectives or the related minimum acceptable level of achievement, in whole or
in part, as the Committee deems appropriate and equitable (i) to reflect a
change in the business, operations, corporate structure or capital structure of
the Company or its Subsidiaries, the manner in which it conducts its business,
or other events or circumstances or (ii) in the event that a Participant’s
responsibilities materially change during a Performance Period or the Participant
is transferred to a position that is not designated or eligible to participate
in the STI Plan. 

          6.          Determination
of Award Opportunities. Within
the first 60 days following the end of each Performance Period, the Committee
shall determine in writing whether and to what extent the Performance
Objectives with respect to each Participant for the applicable Performance
Period have been achieved and, if such Performance Objectives have been
achieved, to approve actual payment of each Award Opportunity under the STI
Plan pursuant to the applicable Payout Formulas. The Committee shall consider
the recommendations of the Chief Executive Officer when determining whether the
Performance Objectives have been achieved with respect to Participants other
than the Chief Executive Officer. In the event a Participant terminates
employment with the Company and its Subsidiaries for any reason prior to the
last day of the Performance Period, the Participant shall not be entitled to
payment of an Award Opportunity with respect to that Performance Period;
provided that in the case of termination of employment by reason of death,
disability or normal or early retirement, or in the case of other special
circumstances, the Committee may, in it sole discretion, pay all or any portion
of the Award Opportunity to the Participant (or to the Participant’s estate in
the event of his or her death) as the Committee deems appropriate and
equitable. 

          7.          Payment
of Award Opportunities. If earned,
an Award Opportunity of a Participant for a particular Performance Period shall
be paid in cash after the end of the Performance Period, but in no event later
than two-and-one-half months after the end of the Performance Period. Notwithstanding
the foregoing, a Participant may elect to defer receipt of 

3

payment of an Award Opportunity in accordance with the
terms and subject to the conditions of the Directors and Executives Deferred
Compensation Plan (or any successor plan).

          8.          Tax
Withholding. The Company and its Subsidiaries shall have
the right to deduct from all payments made to any person under the STI Plan any
federal, state, local, foreign or other taxes which, in the opinion of the
Company and its Subsidiaries, are required to be withheld with respect to such
payments.

          9.          No
Employment Contract. Nothing
contained in this STI Plan shall confer upon a Participant any right with
respect to continuance of employment by the Company and its Subsidiaries, nor
limit or affect in any manner the right of the Company and its Subsidiaries to
terminate the employment or adjust the compensation of a Participant. For
purposes of the STI Plan, the transfer of employment of a Participant between
the Company and any one of its Subsidiaries (or between Subsidiaries) shall not
be deemed a termination of the Participant’s employment. 

          10.        Transferability.
No right or benefit under
this STI Plan will be subject to anticipation, alienation, sale, assignment,
pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell,
assign, pledge, encumber, or charge such right or benefit will be void. No such
right or benefit will in any manner be liable for or subject to the debts,
liabilities, or torts of a Participant.

          11.        Successors.
All obligations of the Company under the STI Plan
shall be binding on any successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase, merger,
consolidation, or otherwise, of all or substantially all of the business or
assets of the Company. 

          12.        Governing
Law. The STI Plan and all Award Opportunities
shall be construed in accordance with and governed by the laws of the State of
New York, but without regard to its conflict of law provisions.

          13.        Amendment
or Termination. The Board reserves the right, at any time, to amend, suspend or terminate
the STI Plan, in whole or in part, in any manner, and for any reason, and
without the consent of any Participant, Eligible Employee or other person;
provided, that no such amendment, suspension or termination shall adversely
affect the payment of any amount for a Performance Period ending prior to the
action of the Board amending, suspending or terminating the STI Plan.

          14.        Participation
by Employees of Subsidiaries. Any Subsidiary may, by action of its board of directors or equivalent
governing body and with the consent of the Board, adopt the STI Plan; provided
that the Board may waive the requirement that such board of directors or
equivalent governing body effect such adoption. By its adoption of or
participation in the STI Plan, the adopting Subsidiary shall be deemed to
appoint the Company its exclusive agent to exercise on its behalf all of the
power and authority conferred by the STI Plan upon the Company and accept the
delegation to the Committee of all the power and authority conferred upon it by
the STI Plan. The authority of the Company to act as such agent shall continue
until 

4

the STI Plan is terminated
as to the participating Subsidiary. An Award Opportunity of a Participant
employed by a participating Subsidiary shall be paid in accordance with the STI
Plan solely by that Subsidiary, unless the Board otherwise determines that the
Company shall be responsible for payment. Each Award Opportunity that
may become payable under the STI Plan shall be paid solely from the general
assets of the Company or the Subsidiary responsible for payment thereof. Nothing
in this STI Plan shall be construed to create a trust or to establish or
evidence any Participant’s claim of any right to payment of an Award
Opportunity other than as an unsecured general creditor with respect to any
payment to which he or she may be entitled. 

          IN
WITNESS WHEREOF, CH Energy Group, Inc. has caused this STI Plan to be executed
by its duly authorized officer on this 1st day of January, 2008.

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 CH ENERGY GROUP, INC.

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 By: 

 	
 /s/ Steven V. Lant

 	
  

 
	
  

 	
  

 	
 

 	
  

 
	
  

 	
  

 	
 Steven V. Lant,
 Chairman, President and

 	
  

 
	
  

 	
  

 	
 Chief Executive
 Officer of

 	
  

 
	
  

 	
  

 	
 CH Energy Group,
 Inc.

 	
  

 

5

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