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EXHIBIT 10.1
 
CH ENERGY GROUP, INC.
2011 LONG-TERM EQUITY INCENTIVE PLAN

 
PERFORMANCE SHARES AGREEMENT
 
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.
2011 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:
 
 

   Name of Grantee:  ________________________              Number of Performance
Shares:  ________________________              Date of Grant:  
__________________, 20___              Performance Period:  
________________________  

 
 
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 Share and shall at all times be equal in value to one Share.
 
2.           Performance 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 performance objectives established by the Board or the
Compensation Committee of the Board (the "Committee"), as the case may be, as
set forth below (the "Performance Objectives").  The achievement of the
Performance Objectives will be measured during the Performance Period set forth
above.  The Performance 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").
 
 
 

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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:
 
(a)           The Relative EPS Performance Shares.
 
(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.
 
(b)           The Relative Dividend Yield Performance Shares.
 
(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.
 
 
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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 death, the Company shall pay to the Grantee's executor or
administrator a pro-rated 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.
 
(b)           If the Grantee’s employment with the Company or a Subsidiary
terminates prior to the end of the Performance Period due to the Grantee’s
Retirement, the Company shall pay to the Grantee a pro-rated 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 Performance Period, 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
(other than as a result of the Grantee's death) 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.
 
(c)           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.
 
5.           Determinations; Adjustments.
 
(a)           Prior to the payment of any Performance Shares as provided herein,
the Committee shall determine in writing the extent, if any, that the
Performance 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 Performance Objectives shall be
based on Generally Accepted Accounting Principles.
 
 
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(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
Performance Objectives to be unsuitable, the Committee may modify such
Performance 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 and Recoupment 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 employment with
the Company or a Subsidiary terminates before the end of the Performance Period
for any reason other than as set forth in Section 4.  Notwithstanding any
provision contained herein to the contrary, any Performance Shares, Shares or
other amounts that the Grantee may receive pursuant to this Agreement are
subject to recoupment by the Company in accordance with the Company's
Compensation Recovery Policy, as it may be amended from time to time, and as
interpreted and applied by the Company's Board of Directors.
 
7.           Payment of Performance Shares.  Payment of any Performance Shares
that become earned as set forth in Section 3 or 4 will be made in the form of
Shares as follows:
 
(a)           The Shares underlying the Performance Shares that are earned
pursuant to Section 3 or Section 4(b) shall be delivered to the Grantee in the
calendar year next following the end of the Performance Period, but in no event
later than August 1 of that year.
 
(b)           The Shares underlying the Performance Shares that are earned
pursuant to Section 4(a) or Section 4(c) shall be delivered to the Grantee
within ninety (90) days following the  earlier of (i) the Grantee's "separation
from service" within the meaning of Section 409A of the Code; (ii) the
occurrence of a "change in the ownership," a "change in the effective control"
or a "change in the ownership of a substantial portion of the assets" of the
Company within the meaning of Section 409A of the Code; or (iii) the
commencement of the calendar year next following the end of the Performance
Period.  Notwithstanding the preceding sentence, if the Performance Shares
become payable as a result of a "separation from service" within the meaning of
Section 409A of the Code (other than as a result of death), and the Grantee is a
"specified employee," as determined under the Company's policy for identifying
specified employees on the date of separation from service, then to the extent
required to comply with Section 409A of the Code the Shares shall be delivered
to the Grantee within ninety (90) days after the first business day that is more
than six months after the date of his or her separation from service (or, if the
Grantee dies during such six-month period, within ninety (90) days after the
Grantee's death).
 
(c)           The Company's obligations with respect to the Performance Shares
shall be satisfied in full upon the delivery of the Shares (and the cash in lieu
of any fractional Shares) underlying the earned Performance Shares as provided
in this Section 7.
 
8.           Transferability. The Performance Shares subject to this Agreement
are personal to the Grantee and may not be sold, exchanged, assigned,
transferred, pledged, encumbered or otherwise disposed of by the Grantee until
they become earned as provided in this Agreement; provided, however, that the
Grantee’s rights with respect to such Performance Shares may be transferred by
will or pursuant to the laws of descent and distribution. Any purported transfer
or encumbrance in violation of the provisions of this Section 8, shall be void,
and the other party to any such purported transaction shall not obtain any
rights to or interest in such Performance Shares.
 
 
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9.           Continuous Employment.  For purposes of this Agreement, the
continuous employment of the Grantee with the Company and its Subsidiaries shall
not be deemed to have been interrupted, and the Grantee shall not be deemed to
have ceased to be an employee of the Company and its Subsidiaries by reason of
the transfer of his employment among the Company and its Subsidiaries or a leave
of absence approved by the Committee.
 
10.           Dividend, Voting and Other Rights.  The Grantee shall have no
rights of ownership in the Performance Shares or in the Shares related thereto
and shall have no right to dividends and no right to vote Performance Shares or
the Shares related thereto until the date on which the Shares underlying the
Performance Shares are delivered to the Grantee pursuant to this Agreement.  The
obligations of the Company under this Agreement will be merely that of an
unfunded and unsecured promise of the Company to deliver Shares in the future,
and the rights of the Grantee will be no greater than that of an unsecured
general creditor. No assets of the Company will be held or set aside as security
for the obligations of the Company under this Agreement.
 
11.           No Employment Contract. Nothing contained in this Agreement shall
confer upon the Grantee 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 the Grantee.  Any economic or other benefit to the Grantee under
this Agreement will not be taken into account in determining any benefits to
which the Grantee may be entitled under any profit-sharing, retirement or other
benefit or compensation plan maintained by the Company and its Subsidiaries,
unless provided otherwise in any such plan.
 
12.           Withholding.  To the extent that the Company or any Subsidiary is
required to withhold any federal, state, local, foreign or other tax in
connection with the payment of earned Performance Shares pursuant to this
Agreement, it shall be a condition to the receipt of such Performance Shares
that the Grantee make arrangements satisfactory to the Company or such
Subsidiary for payment of such taxes required to be withheld.  To the extent
that either the Performance Shares are deferred pursuant to Section 20 hereof or
tax withholding is required at any time other than upon delivery of the Shares
pursuant to this Agreement, then Company or Subsidiary shall have the right in
its sole discretion to (i) require the Grantee to pay or provide for payment of
the required tax withholding, or (ii) deduct the required tax withholding from
any amount of salary, bonus, incentive compensation or other payment otherwise
payable in cash to the Grantee.  Otherwise, the Grantee shall satisfy such
required withholding obligation by surrendering to the Company a portion of the
Shares that are otherwise deliverable under this Agreement, and the Shares so
surrendered by the Grantee shall be credited against any such required
withholding obligation at the Fair Market Value per Share of such Shares on the
date of such surrender.
 
 
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13.           Compliance with Law. The Company shall make reasonable efforts to
comply with all applicable federal and state securities laws and listing
requirements of the New York Stock Exchange or any national securities exchange
with respect to the Performance Shares; provided, however, notwithstanding any
other provision of this Agreement, no Shares shall be delivered if the delivery
thereof would result in a violation of any such law or listing requirement.
 
14.           Compliance with Section 409A of the Code.  It is intended that
this Agreement shall or comply with the requirements of Section 409A of the
Code.  This Agreement 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.  Without limiting the foregoing, the
Performance Shares shall not be deferred, accelerated, extended, paid out,
settled, adjusted, substituted, exchanged or modified in a manner that would
cause the award to fail to satisfy the conditions of an applicable exception
from the requirements of Section 409A of the Code or otherwise would subject the
Grantee to the additional tax imposed under Section 409A of the Code.
 
15.           Amendments. Subject to the terms of the LTI Plan, the Committee
may modify this Agreement upon written notice to the Grantee.  Any amendment to
the LTI Plan shall be deemed to be an amendment to this Agreement to the extent
that the amendment is applicable hereto.  Notwithstanding the foregoing, no
amendment of the LTI Plan or this Agreement shall adversely affect the rights of
the Grantee under this Agreement without the Grantee's consent, unless that
amendment is required to comply with the payment restrictions of Section 409A of
the Code.
 
16.           Severability.  In the event that one or more of the provisions of
this Agreement shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining provisions hereof shall continue
to be valid and fully enforceable.
 
17.           Relation to LTI Plan.  This Agreement is subject to the terms and
conditions of the LTI Plan.  This Agreement and the LTI Plan contain the entire
agreement and understanding of the parties with respect to the subject matter
contained in this Agreement, and supersede all prior communications,
representations and negotiations in respect thereto.  In the event of any
inconsistency between the provisions of this Agreement and the LTI Plan, the LTI
Plan shall govern.  Capitalized terms used herein without definition shall have
the meanings assigned to them in the LTI Plan.  The Committee acting pursuant to
the LTI Plan, as constituted from time to time, shall, except as expressly
provided otherwise herein, have the right to determine any questions which arise
in connection with the grant of Performance Shares.
 
18.           Successors and Assigns.  Without limiting Section 8 hereof, the
provisions of this Agreement shall inure to the benefit of, and be binding upon,
the successors, administrators, heirs, legal representatives and assigns of the
Grantee, and the successors and assigns of the Company.
 
 
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19.           Governing Law. The interpretation, performance, and enforcement of
this Agreement shall be governed by the laws of the State of New York, without
giving effect to the principles of conflict of laws thereof.
 
20.           Deferral of Performance Shares. Notwithstanding anything contained
herein to the contrary, the Grantee may elect to defer receipt of the
Performance Shares in accordance with the terms and subject to the conditions of
the Directors and Executives Deferred Compensation Plan (or any successor plan).
 
21.           Electronic Delivery.  The Grantee hereby consents and agrees to
electronic delivery of any documents that the Company may elect to deliver
(including, but not limited to, prospectuses, prospectus supplements, grant or
award notifications and agreements, account statements, annual and quarterly
reports, and all other forms of communications) in connection with this and any
other award made or offered under the LTI Plan. The Grantee understands that,
unless earlier revoked by the Grantee by giving written notice to the Secretary
of the Company, this consent shall be effective for the duration of the
Agreement.  The Grantee also understands that he or she shall have the right at
any time to request that the Company deliver written copies of any and all
materials referred to above at no charge.
 

 
(Signatures are on the following page)
 
 
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its
behalf by its duly authorized officer and the Grantee has also executed this
Agreement, as of the Date of Grant.
 

  CH ENERGY GROUP, INC.                   
 
By:
/s/ Steven V. Lant       Name: Steven V. Lant      
Title: Chairman of the Board, President and
          Chief Executive Officer 
 

 
 
 
The undersigned hereby acknowledges receipt of a copy of the LTI Plan, Plan
Summary and Prospectus, and the Company's most recent Annual Report and Proxy
Statement (the "Prospectus Information"). The Grantee represents that he or she
is familiar with the terms and provisions of the Prospectus Information and
hereby accepts the award of Performance Shares on the terms and conditions set
forth herein and in the LTI Plan.

       
 
 
        Grantee                      Date:    

 
 
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EXHIBIT A

PERFORMANCE PEER GROUP
 
 
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EXHIBIT B

PERFORMANCE MATRIX

Percentile Rank for
Performance Objective
Relative to Performance Peer Group
 
Percentage of
Performance Shares Earned
Maximum:  80% or more
150.0%
79%
148.3%
78%
146.6%
77%
145.0%
76%
143.3%
75%
141.6%
74%
140.0%
73%
138.3%
72%
136.6%
71%
135.0%
70%
133.3%
69%
131.6%
68%
130.0%
67%
128.3%
66%
126.6%
65%
125.0%
64%
123.3%
63%
121.6%
62%
120.0%
61%
118.3%
60%
116.6%
59%
115.0%
58%
113.3%
57%
111.6%
56%
110.0%
55%
108.3%
54%
106.6%
53%
105.0%
52%
103.3%
51%
101.6%
50%
100.0%
49%
96.7%
48%
93.3%
47%
90.0%
46%
86.7%
45%
83.3%
44%
80.0%

 
 
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Percentile Rank for
Performance Objective
Relative to Performance Peer Group
 
Percentage of
Performance Shares Earned
43%
76.7%
42%
73.3%
41%
70.0%
40%
66.7%
39%
63.3%
38%
60.0%
37%
56.7%
36%
53.3%
35%
50.0%
34%
46.7%
33%
43.3%
32%
40.0%
31%
36.7%
30%
33.3%
29%
30.0%
28%
26.7%
27%
23.3%
26%
20.0%
25%
16.7%
24%
13.3%
23%
10.0%
22%
6.7%
Threshold:  21%
3.3%
20% or below
0.0%

 
 
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