CH ENERGY GROUP, INC.
PERFORMANCE SHARES
AGREEMENT
(Long-Term Equity Incentive
Plan)
Summary of Performance Shares
Grant
CH Energy Group, Inc., a New York
corporation (the “Company”), grants to the Grantee
named below, in accordance with the terms of the CH Energy Group,
Inc. Long-Term Equity Incentive Plan (the “LTI Plan”)
and this Performance Shares Agreement (the
“Agreement”), the following number of Performance
Shares, on the Date of Grant set forth below:
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Name of Grantee:
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_______________________________
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Number of Performance
Shares:
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_______________________________
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Date of Grant:
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_______________________________
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Performance Period:
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1.
Grant of Performance Shares. Subject to the terms and conditions of this
Agreement and the LTI Plan, the Company hereby grants to the
Grantee, as of the Date of Grant, the total number of Performance
Shares (the “Performance Shares”) set forth above. Each
Performance Share shall represent one hypothetical Common Share and
shall at all times be equal in value to one Common
Share.
2.
Management Objectives. The Grantee’s right to receive payment of
all or any portion of the Performance Shares shall be contingent
upon the achievement of certain management objectives established
by the Board or the Compensation Committee of the Board (the
“Committee”), as the case may be, as set forth below
(the “Management Objectives”). The achievement of the
Management Objectives will be measured during the Performance
Period set forth above. The Management Objectives for the
Performance Period shall relate to basic earnings per share and
annual dividend yield on book value and shall apply as
follows:
(a) Fifty
percent (50%) of the total number of Performance Shares shall be
dependent on the Company’s percentage growth (whether
positive or negative) in basic earnings per share during the
Performance Period relative to the percentage growth in basic
earnings per share of the companies listed on
Exhibit A (the “Performance Peer Group”)
during the same period (the “Relative EPS Performance
Shares”).
(b) Fifty
percent (50%) of the total number of Performance Shares shall be
dependent on the average of the Company’s annual dividend
yield on book value during the Performance Period relative to the
average of the annual dividend yield on book value of the companies
in the Performance Peer Group during the same period (the
“Relative Dividend Yield Performance
Shares”).
3.
Earning of Performance Shares. Except as provided in Section 4, the Performance
Shares shall be earned as follows, provided that the Grantee has
remained
continuously employed by the Company or any Subsidiary through the
end of the Performance Period:
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(a)
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The Relative EPS Performance
Shares .
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(i) If,
upon the conclusion of the Performance Period, the percentage
growth (whether positive or negative) in the Company’s basic
earnings per share during the Performance Period falls below the
threshold percentile rank relative to the Performance Peer Group,
as set forth in the Performance Matrix attached as
Exhibit B (the “Performance Matrix”), none of
the Relative EPS Performance Shares shall become earned.
(ii) If,
upon the conclusion of the Performance Period, the percentage
growth (whether positive or negative) in the Company’s basic
earnings per share during the Performance Period equals or exceeds
the threshold percentile rank but is less than maximum percentile
rank relative to the Performance Peer Group, as set forth in the
Performance Matrix, the percentage of the Relative EPS Performance
Shares shall become earned as set forth on the Performance Matrix
opposite such percentile rank.
(iii) If,
upon the conclusion of the Performance Period, the percentage
growth (whether positive or negative) in the Company’s basic
earnings per share during the Performance Period equals or exceeds
the maximum percentile rank relative to the Performance Peer Group,
as set forth in the Performance Matrix, 150% of the Relative EPS
Performance Shares shall become earned.
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(b)
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The Relative Dividend Yield
Performance Shares .
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(i) If,
upon the conclusion of the Performance Period, the average of the
Company’s annual dividend yield on book value during the
Performance Period falls below the threshold percentile rank
relative to the Performance Peer Group, as set forth in the
Performance Matrix, none of the Relative Dividend Yield Performance
Shares shall become earned.
(ii) If,
upon the conclusion of the Performance Period, the average of the
Company’s annual dividend yield on book value during the
Performance Period equals or exceeds the threshold percentile rank
but is less than maximum percentile rank relative to the
Performance Peer Group, as set forth in the Performance Matrix, the
percentage of the Relative Dividend Yield Performance Shares shall
become earned as set forth on the Performance Matrix opposite such
percentile rank.
(iii) If,
upon the conclusion of the Performance Period, the average of the
Company’s annual dividend yield on book value during the
Performance Period equals or exceeds the maximum percentile rank
relative to the Performance Peer Group, as set forth in the
Performance Matrix, 150% of the Relative Dividend Yield Performance
Shares shall become earned.
4.
Retirement, Death or Change in Control. Notwithstanding any provision of Section 3 to
the contrary:
(a) If
the Grantee’s employment with the Company or a Subsidiary
terminates following completion of the first full fiscal quarter of
the Performance Period but prior to the end of the Performance
Period due to the Grantee’s Retirement or death, the Company
shall pay to the Grantee or his or her executor or administrator,
as the case may be, a number of Performance Shares equal to (i) the
number of Performance Shares to which the Grantee would have been
entitled under Section 3 above based on the performance of the
Company during the full fiscal quarters completed during the
Performance Period until the date of termination, multiplied by
(ii) a fraction, the numerator of which is the number of days that
the Grantee was employed during the Performance Period and the
denominator of which is the number of days in the Performance
Period. For purposes of this Agreement, “Retirement”
means termination of employment with the Company or a Subsidiary
either (i) on or after age 65 or (ii) pursuant to the early
retirement provisions of the Retirement Income Plan of Central
Hudson Gas & Electric Corporation.
(b) If
a Change in Control occurs following the completion of the first
full fiscal quarter of the Performance Period but prior to the end
of the Performance Period, and the Grantee was employed by the
Company or any Subsidiary immediately prior to the Change in
Control, the Company shall pay to the Grantee a number of
Performance Shares equal to the number to which the Grantee would
have been entitled under Section 3 above based on the performance
of the Company during the full fiscal quarters completed during the
Performance Period until the date of the Change in
Control.
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5.
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Determinations;
Adjustments .
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(a) Prior
to the payment of any Performance Shares as provided herein, the
Committee shall determine in writing the extent, if any, that the
Management Objectives have been satisfied and shall determine the
number, if any, of Performance Shares that shall have become earned
hereunder. The determinations shall occur prior to the applicable
payment date set forth in Section 7 hereof. In all circumstances,
the Committee shall have the ability and authority to reduce, but
not increase, the amount of Performance Shares that become earned
hereunder.
(b) All
determinations involving the Management Objectives shall be based
on Generally Accepted Accounting Principles in effect at the time
the objectives are established without regard to any change in
accounting standards that may be required by the Financial
Accounting Standards Board after the objectives are
established.
(c) If
the Committee determines that a change in the business, operations,
corporate structure or capital structure of the Company, the manner
in which it conducts business or other events or circumstances
render the Management Objectives to be unsuitable, the Committee
may modify such Management Objectives or the related levels of
achievement, in whole or in part, as the Committee deems
appropriate; provided , however , that no such action may result in the loss of
the otherwise available exemption of the award under Section 162(m)
of the Internal Revenue Code of 1986, as amended (the
“Code”).
6.
Forfeiture of Performance Shares. The Performance Shares will be forfeited
automatically and without further notice if (a) they are not earned
at the end of the Performance Period (or such shorter period as
provided in Section 4, if applicable) or (b) if the
Grantee’s
