Exhibit 10(iii)(34)
PERFORMANCE SHARES AGREEMENT
This Performance Shares Agreement ("Agreement") is made between CH Energy
Group, Inc. ("Corporation"), a New York corporation, and __________
("Participant"), an officer of the Corporation or one of its Affiliates.
WHEREAS, the Corporation has adopted the Long-Term Performance-Based
Incentive Plan, a copy of which has been previously provided to the Participant;
and
WHEREAS, pursuant to authority of the Board of Directors of the
Corporation, the Compensation Committee of the Board of Directors of the
Corporation ("Committee"), effective January 1, 2005 ("Date of Grant"), granted
the Participant Performance Shares, subject to entering into this Agreement.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
set forth later in this Agreement, and of other good and valuable consideration,
the receipt and sufficiency of which are acknowledged, the parties to this
Agreement, intending to be legally bound, agree as follows (terms used herein
shall have the meanings set forth in the Plan, which terms are incorporated
herein by reference, unless otherwise defined herein):
Section 1. Performance Shares/Performance Goals. The Corporation hereby
confirms the grant to the Participant of ____ Performance Shares (subject to
increase or decrease as described in this Section 1) to be earned during the
Award Cycle, which cycle, the Committee determined, shall begin on the Date of
Grant and shall expire on the close of business on December 31, 2007, in
accordance with the terms of this Agreement and the Plan.
There shall be two Performance Goals during the Award Cycle, each of which
shall be weighted equally (i.e., each Performance Goal accounts for 50% of the
total payout). The first Performance Goal shall be based on the Corporation's
percentage growth in earnings per share during the Award Cycle relative to the
percentage growth in earnings per share of the companies in the EEI Index during
the same period, as set forth on Exhibit A. The second Performance Goal shall be
based on the average of the Corporation's annual dividend yield on book value
during the Award Cycle relative to the average of the annual dividend yield on
book value of the companies in the EEI Index during the same period, as set
forth on Exhibit A. The Performance Shares and associated reinvested dividends
granted hereby shall be earned and paid based on the level of the Corporation's
performance results with respect to each of the Performance Goals as shown on
Exhibit A. The
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number of Performance Shares earned and paid will range, according to the level
of performance achieved, from 0% to 150% of the Performance Shares granted
hereunder. All determinations involving the Performance Goals shall be
calculated based on Generally Accepted Accounting Principles in effect at the
time the goals are established without regard to any change in accounting
standards that may be required by the Financial Accounting Standards Board after
the goals are established.
The Committee has determined that, subject to the terms of the Plan, (1)
cash dividends on the Common Stock that is the subject of the Performance Shares
shall be automatically deferred and reinvested in additional shares of Common
Stock, held subject to vesting of the underlying Performance Shares and meeting
the Performance Goals described herein, and (2) dividends payable in Common
Stock shall be paid in the form of shares of Common Stock, held subject to
vesting of the underlying Performance Shares and meeting the Performance Goals
described herein. Any reinvested dividend referred to in this paragraph shall be
applied to the number of Performance Shares earned as set forth in the
immediately preceding paragraph.
Section 2. Vesting Conditions. Except as described in Section 4, the
vesting of the Performance Shares is conditioned on the continued employment of
the Participant with the Corporation and its Affiliates.
Section 3. Delivery of Shares. At the expiration of the Award Cycle, the
Committee shall evaluate the Corporation's performance in light of the
Performance Goals for the Performance Shares and shall determine the Performance
Shares and associated reinvested dividends earned by the Participant (under
Section 1) and the value thereof, and the Corporation shall deliver the number
of shares of Common Stock whose Fair Market Value is equal to the cash value of
the number of the Performance Shares and associated reinvested dividends
determined by the Committee to have been earned by the Participant. The delivery
of such shares of Common Stock shall be made in accordance with this Agreement
and the Plan as soon as practicable after they are earned, but in no event later
than March 15, 2008.
The certificate or certificates representing such shares of Common Stock
shall be registered in the name of the Participant and shall bear any legend
required by any federal or state securities law, rule or regulation, and (if
applicable) a legend referring to the restrictions provided under this
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Agreement and under the Plan. Upon the issuance of such certificate or
certificates, the Participant shall have all the rights of a stockholder with
respect to those shares of Common Stock and to receive all dividends or other
distributions paid or made with respect to those shares; provided, however, that
those shares shall be subject to the restrictions, if any, under this Agreement
and in the Plan.
The Performance Shares are payable only if compliance with all applicable
federal and state securities laws, security exchange listing requirements and
other requirements of the Plan can be effected and only by (i) the Participant's
completion, execution and delivery to the Corporation, if and to the extent
required by the Corporation, of an "investment letter" in the form supplied by
the Corporation and (ii) the Participant satisfying the tax-withholding
requirements of the Plan.
Section 4. Forfeitures. Except to the extent otherwise provided in this
Agreement and the Plan, the Participant's right to receive the Performance
Shares and associated reinvested dividends shall be forfeited automatically and
without further notice on the date of the Participant's Termination of
Employment for any reason during the Award Cycle or before the Performance Goals
are satisfied. Notwithstanding the foregoing, in the event of the Participant's
Retirement before the end of the Award Cycle, a prorated portion of the
Performance Shares and associated reinvested dividends, which portion shall be
prorated based on the Participant's length of employment during the Award Cycle,
shall be considered to be earned and payable to the extent of the Corporation's
attainment of the Performance Goals (determined pursuant to Section 1) during
the period commencing on the Date of Grant and ending on the last day of the
calendar quarter last completed prior to the date of such Retirement. The
delivery of any shares of Common Stock earned under this Section 4 shall be made
in accordance with Section 3, but in no event later than two and one-half (2
1/2) months after the close of the fiscal year in which the Retirement occurs.
Section 5. Change of Control. In the event of a Change of Control, the
Performance Shares and associated reinvested dividends shall be considered to be
earned and payable to the extent that the Performance Goals have been satisfied
during the period beginning on the Date of Grant and ending on the date of the
Change of Control, and such Performance Shares and associated reinvested
dividends shall be settled in cash as soon as administratively practicable
following such Change of
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Control, but in no event later than two and one-half (2 1/2) months after the
close of the fiscal year in which the Change of Control occurs.
Section 6. Transfer Restrictions. Subject to the provisions of the Plan
and this Agreement, during the Award Cycle, Performance Shares and associated
reinvested dividends may not be sold, assigned, transferred, pledged or
otherwise encumbered.
Section 7. Terms and Conditions of Plan. The terms and conditions included
in the Plan are incorporated by reference in this Agreement, and, to the extent
that any conflict may exist between any term or provision of this Agreement and
any term or provision of the Plan, the term or provision of the Plan shall
control.
Section 8. Headings. The headings and other captions contained in this
Agreement are for convenience and reference only and shall not be used in
interpreting, construing, or enforcing any of the provisions of this Agreement.
Section 9. Entire Agreement. This Agreement and the attached Exhibit A,
which is incorporated herein by reference, set forth all of the promises,
agreements, conditions, understandings, warranties, and representations between
the parties to this Agreement with respect to the Performance Shares and
associated reinvested dividends, and there are no promises, agreements,
conditions, understandings, warranties, or representations, oral or written,
express or implied, between them with respect to the Performance Shares and
associated reinvested dividends other than as set forth in this Agreement. This
Agreement is, and is intended by the parties to be, an integration of any and
all prior agreements or understandings, oral or written, with respect to the
Performance Shares and associated reinvested dividends.
Section 10. Further Agreements. The Participant agrees to execute any
further documents or instruments necessary or desirable to carry out the
purposes or intent of this Agreement.
Section 11. Genders. The use of any gender in this Agreement shall be
deemed to be or include the other genders, and the use of the singular in this
Agreement shall be deemed to be or include the plural (and vice versa), wherever
appropriate.
Section 12. Notices. Any and all notices provided for in this Agreement
shall be addressed: (i) if to the Corporation, to the principal executive office
of the Corporation in care of the Corporate
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Secretary; and (ii) if to the Participant, to the address of the Participant as
reflected on the records of the Corporation or any employer - Affiliate.
Section 13. Invalid or Unenforceable Provisions. The invalidity or
unenforceability of any particular provision of this Agreement shall not affect
the other provisions of this Agreement, and this Agreement shall be construed in
all respects as if those invalid or unenforceable provisions were omitted.
Section 14. Governing Law. This Agreement shall be construed and enforced
in accordance with the laws of New York.
Section 15. Modifications. Any modification of this Agreement must be
written and signed by the parties to this Agreement to be valid; provided,
however, that the Participant covenants and agrees to execute any amendment to
this Agreement that shall be required or desirable (in the opinion of the
Corporation or its counsel) to comply with any rule or regulation promulgated or
proposed under the Code by the Internal Revenue Service.
Section 16. Compliance with Section 409A of the Code. To the extent
applicable, it is intended that this Agreement and the Plan comply with the
provisions of Section 409A of the Code. This Agreement and the Plan shall be
administered in a manner consistent with this intent, and any provision that
would cause the Agreement or the Plan to fail to satisfy Section 409A of the
Code shall have no force and effect until amended to comply with Section 409A of
the Code (which amendment may be retroactive to the extent permitted by Section
409A of the Code and may be made by the Corporation without the consent of the
Participant).
Section 17. Unsecured Creditor. The Participant acknowledges that no
assets of the Corporation shall be segregated for the purpose of delivering
Common Stock under this Agreement or shall be held (or deemed to be held) in
trust for the benefit of the Participant. It is the intention of the Participant
and the Corporation that all payment obligations under this Agreement shall
constitute at all times general unsecured obligations of the Corporation.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Corporation and the Participant have executed this
Agreement as of the day and year first above written.
CH ENERGY GROUP, INC.
ATTEST:
________________________________ By:_________________________________________
Name: Lincoln X. Xxxxxxxx Name: Xxxxxx X. Xxxx
Title: Secretary & Assistant Title: Chairman of the Board, President &
Treasurer Chief Executive Officer
PARTICIPANT:
WITNESS:
________________________________ ____________________________________________
DATED: _____________________
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EXHIBIT A
Performance Goals
Each Performance Goal shall be evaluated separately to determine the applicable
payout percentage as shown below.
1. Earnings Per Share. If the percentage growth in the Corporation's earnings
per share during the Award Cycle is in the percentile range of the
percentage growth in earnings per share of the companies in the EEI Index
during the same period, as set forth below, then such Performance Goal
shall be assigned the payout percentage set forth opposite such percentile
range.
2. Dividend Yield. If the average of the Corporation's annual dividend yield
on book value during the Award Cycle is in the percentile range of the
average of the annual dividend yield on book value of the companies in the
EEI Index during the same period, as set forth below, then such
Performance Goal shall be assigned the payout percentage set forth
opposite such percentile range.
Calculation of Performance Shares Earned
The number of Performance Shares earned shall be determined by multiplying (i)
the average of the payout percentages assigned to each Performance Goal, as
described above, by (ii) the number of the Performance Shares set forth in
Section 1 of this Agreement (as adjusted for reinvested dividends).
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Percentile Rank for Performance Goal
Relative to EEI Index Payout Percentage
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80% or more 150.0%
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79% 148.3%
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78% 146.6%
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77% 145.0%
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76% 143.3%
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75% 141.6%
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74% 140.0%
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73% 138.3%
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72% 136.6%
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71% 135.0%
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70% 133.3%
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69% 131.6%
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68% 130.0%
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67% 128.3%
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66% 126.6%
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65% 125.0%
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64% 123.3%
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63% 121.6%
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62% 120.0%
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61% 118.3%
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60% 116.6%
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59% 115.0%
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58% 113.3%
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57% 111.6%
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56% 110.0%
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55% 108.3%
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54% 106.6%
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53% 105.0%
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52% 103.3%
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51% 101.6%
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50% 100.0%
--------------------------------------------------------------------------------
49% 96.7%
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48% 93.3%
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47% 90.0%
--------------------------------------------------------------------------------
46% 86.7%
--------------------------------------------------------------------------------
45% 83.3%
--------------------------------------------------------------------------------
44% 80.0%
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43% 76.7%
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42% 73.3%
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41% 70.0%
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40% 66.7%
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39% 63.3%
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38% 60.0%
--------------------------------------------------------------------------------
37% 56.7%
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36% 53.3%
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35% 50.0%
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34% 46.7%
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33% 43.3%
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32% 40.0%
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31% 36.7%
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30% 33.3%
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29% 30.0%
--------------------------------------------------------------------------------
28% 26.7%
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27% 23.3%
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26% 20.0%
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25% 16.7%
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24% 13.3%
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23% 10.0%
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22% 6.7%
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21% 3.3%
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20% or below 0.0%
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