Contract

Exhibit 10(iii)(43) FORM OF CH ENERGY GROUP, INC. PERFORMANCE SHARES AGREEMENT (Long-Term Equity Incentive Plan) This Performance Shares Agreement (this “Agreement”) is made as ofMarch ___, 2006 (the “Date of Grant”) between CH Energy Group, Inc., a New Yorkcorporation (the “Corporation”) and __________________, an employee of theCorporation or its Subsidiaries (the “Grantee”). WHEREAS, the Board of Directors of the Corporation has duly adopted,subject to shareholder approval, the CH Energy Group, Inc. Long-Term EquityIncentive Plan (the “Plan”), which authorizes the Corporation to grant toeligible individuals performance shares, each such performance share being equalin value to one share of the Corporation’s common stock, par value $0.10, (the”Common Shares”); and WHEREAS, the Compensation Committee of the Board of Directors of theCorporation (the “Committee”) has determined that it is desirable and in thebest interests of the Corporation to grant to the Grantee a certain number ofperformance shares, subject to shareholder approval of the Plan, in order toprovide the Grantee with an incentive to advance the interests of theCorporation, all according to the terms and conditions set forth herein and inthe Plan. NOW, THEREFORE, in consideration of the mutual promises and covenantscontained herein, the parties hereby agree as follows:1. Grant of Performance Shares. (a) Subject to the terms and conditions of this Agreement andthe Plan, and subject to shareholder approval of the Plan, the Corporationhereby grants to the Grantee ___________ performance shares (the “PerformanceShares”), payment of which depends on the Corporation’s performance as set forthin this Agreement and in the Performance Matrix (the “Performance Matrix”)attached as Exhibit A. (b) The Grantee’s right to receive payment of all or anyportion of the Performance Shares is contingent upon the achievement of certainmanagement objectives established by the Committee (the “ManagementObjectives”), as set forth below. The achievement of the Management Objectiveswill be measured during the period from January 1, 2006 through December 31,2008 (the “Performance Period”). (c) The Management Objectives for the Performance Period arebased on earnings per share and annual dividend yield on book value, eachrelative to the performance of the companies in the Edison Electric InstituteIndex (the “EEI Index”). Each of the Management Objectives shall be weighted asfollows: (i) Fifty percent (50%) of the total number ofPerformance Shares shall be based on the Corporation’s percentage growth inearnings per share during the Performance Period relative to the percentagegrowth in earnings per share of the companies in the EEI Index during the sameperiod (the “EPS Performance Shares”). (ii) Fifty percent (50%) of the total number ofPerformance Shares shall be based on the average of the Corporation’s annualdividend yield on book value during the Performance Period relative to theaverage of the annual dividend yield on book value of the companies in the EEIIndex during the same period (“Dividend Yield Performance Shares”). (d) All determinations involving the Management Objectivesshall be based on Generally Accepted Accounting Principles in effect at the timethe objectives are established without regard to any change in accountingstandards that may be required by the Financial Accounting Standards Board afterthe objectives are established. (e) The Grantee shall have no rights of ownership in thePerformance Shares or in the Common Shares related thereto and shall have noright to dividends and no right to vote Performance Shares or the Common Sharesrelated thereto until the date on which the Common Shares underlying thePerformance Shares are issued to the Grantee pursuant to Section 5 hereof.2. Earning of Performance Shares. (a) The EPS Performance Shares. (i) If, upon the conclusion of the PerformancePeriod, the percentage growth in the Corporation’s earnings per share during thePerformance Period falls below the threshold percentile rank relative to the EEIIndex, as set forth in the Performance Matrix, none of the EPS PerformanceShares shall become earned. (ii) If, upon the conclusion of the PerformancePeriod, the percentage growth in the Corporation’s earnings per share during thePerformance Period equals or exceeds the threshold percentile rank but is lessthan maximum percentile rank relative to the EEI Index, as set forth in thePerformance Matrix, the percentage of the EPS Performance Shares shall becomeearned as set forth on the Performance Matrix opposite such percentile rank. (iii) If, upon the conclusion of the PerformancePeriod, the percentage growth in the Corporation’s earnings per share during thePerformance Period equals or exceeds the maximum percentile rank relative to theEEI Index, as set forth in the Performance Matrix, 150% of the EPS PerformanceShares shall become earned. (b) The Dividend Yield Performance Shares. (i) If, upon the conclusion of the PerformancePeriod, the average of the Corporation’s annual dividend yield on book valueduring the Performance Period falls below the threshold percentile rank relativeto the EEI Index, as set forth in the Performance Matrix, none of the DividendYield Performance Shares shall become earned. (ii) If, upon the conclusion of the PerformancePeriod, the average of the Corporation’s annual dividend yield on book valueduring the Performance Period equals or exceeds the threshold percentile rankbut is less than maximum percentile rank relative to the EEI Index, as set forthin the Performance Matrix, the percentage of the Dividend Yield PerformanceShares shall become earned as set forth on the Performance Matrix opposite suchpercentile rank. (iii) If, upon the conclusion of the PerformancePeriod, the percentage growth in the Corporation’s earnings per share during thePerformance Period equals or exceeds the maximum percentile rank relative to theEEI Index, as set forth in the Performance Matrix, 150% of the Dividend YieldPerformance Shares shall become earned. (c) Modification. If the Committee determines that a change inthe business, operations, corporate structure or capital structure of theCorporation, the manner in which it conducts business or other events orcircumstances render the Management Objectives to be unsuitable, the Committeemay modify such Management Objectives or the related levels of achievement, inwhole or in part, as the Committee deems appropriate; provided, however, that nosuch action may result in the loss of the otherwise available exemption of theaward under Section 162(m) of the Internal Revenue Code of 1986, as amended (the”Code”). (d) Conditions; Determination of Earned Award. Except asotherwise provided herein, the Grantee’s right to receive any Performance Sharesis contingent upon his or her remaining in the continuous employ of theCorporation or a Subsidiary through the end of the Performance Period. Forpurposes of this Agreement, the continuous employment of the Grantee with theCompany and its Subsidiaries shall not be deemed to have been interrupted, andthe Grantee shall not be deemed to have ceased to be an employee of the Companyand its Subsidiaries by reason of the transfer of his employment among theCompany and its Subsidiaries or a leave of absence approved by the Committee.Prior to the payment of any Performance Shares as provided in Sections 3, 5 or6, the Committee shall certify in writing the extent, if any, that theManagement Objectives have been satisfied and shall determine the number, ifany, of Performance Shares that shall have become earned hereunder. In allcircumstances, the Committee shall have the ability and authority to reduce, butnot increase, the amount of Performance Shares that become earned hereunder. 3. Retirement or Death. If the Grantee’s employment with theCorporation or a Subsidiary terminates following completion of the first fullfiscal quarter of the Performance Period but prior to the end of the PerformancePeriod due to the Grantee’s Retirement or death, the Corporation shall pay tothe Grantee or his or her executor or administrator, as the case may be, anumber of Performance Shares equal to (i) the number of Performance Shares towhich the Grantee would have been entitled under Section 2 above based on theperformance of the Corporation during the full fiscal quarters completed duringthe Performance Period until the date of termination, multiplied by (ii) afraction, the numerator of which is the number of days that the Grantee wasemployed during the Performance Period and the denominator of which is thenumber of days in the Performance Period. For purposes of this Agreement,”Retirement” means termination of employment with the Corporation or aSubsidiary either (i) on or after age 65 or (ii) pursuant to the earlyretirement provisions of the applicable pension plan of the Corporation. Suchpayment shall occur 30 days following the Grantee’s termination of employment(or as soon as administratively practicable thereafter). 4. Other Termination. If the Grantee’s employment with the Corporationor a Subsidiary terminates before the payment of the Performance Shares asprovided herein for any reason other than as set forth in Section 3 above, thePerformance Shares will be forfeited automatically and without further notice. 5. Payment of Performance Shares. Payment of any Performance Sharesthat become earned as set forth herein will be made in the form of CommonShares. Except as otherwise provided in Sections 3 and 6, payment will be madeas soon as practicable after the receipt of audited financial statements of theCorporation relating to the last fiscal year of the Performance Period and thedetermination by the Committee of the level of attainment of the ManagementObjectives, but in no event shall such payment occur after March 15, 2009.Performance Shares will be forfeited if they are not earned at the end of thePerformance Period (or such shorter period as provided in Section 3 or 6, ifapplicable) and, except as otherwise provided in this Agreement, if the Granteeceases to be employed by the Corporation or a Subsidiary at any time prior tosuch shares becoming earned. To the extent that the Corporation or anySubsidiary is required to withhold any federal, state, local, foreign or othertax in connection with the payment of earned Performance Shares pursuant to thisAgreement, it shall be a condition to the receipt of such Performance Sharesthat the Grantee make arrangements satisfactory to the Corporation or suchSubsidiary for payment of such taxes required to be withheld. This taxwithholding obligation may be satisfied by the Corporation withholdingPerformance Shares otherwise payable pursuant to this award. 6. Change in Control. If a Change in Control occurs following thecompletion of the first full fiscal quarter of the Performance Period but priorto the end of the Performance Period, the Corporation shall pay to the Grantee anumber of Performance Shares equal to the number to which the Grantee would havebeen entitled under Section 2 above based on the performance of the Corporationduring the full fiscal quarters completed during the Performance Period untilthe date of the Change in Control. Such payment shall occur 30 days followingthe Change in Control (or as soon as administratively practicable thereafter). 7. Transferability. The Performance Shares subject to this Agreementare personal to the Grantee and may not be sold, exchanged, assigned,transferred, pledged, encumbered or otherwise disposed of by the Grantee untilthey become earned as provided in this Agreement; provided, however, that theGrantee’s rights with respect to such Performance Shares may be transferred bywill or pursuant to the laws of descent and distribution. Any purported transferor encumbrance in violation of the provisions of this Section 7, shall be void,and the other party to any such purported transaction shall not obtain anyrights to or interest in such Performance Shares. 8. No Employment Contract. Nothing contained in this Agreement shallconfer upon the Grantee any right with respect to continuance of employment bythe Corporation and its Subsidiaries, nor limit or affect in any manner theright of the Corporation and its Subsidiaries to terminate the employment oradjust the compensation of the Grantee. Any economic or other benefit to theGrantee under this Agreement will not be taken into account in determining anybenefits to which the Grantee may be entitled under any profit-sharing,retirement or other benefit or compensation plan maintained by the Corporationand its Subsidiaries, unless provided otherwise in any such plan. 9. Compliance with Law. The Corporation shall make reasonable effortsto comply with all applicable federal and state securities laws and listingrequirements of the New York Stock Exchange or any national securities exchange;provided, however, notwithstanding any other provision of this Agreement, noCommon Shares shall be delivered if the delivery thereof would result in aviolation of any such law or listing requirement. 10. Compliance with Section 409A of the Code. To the extent applicable,it is intended that this Agreement and the Plan comply with the provisions ofSection 409A of the Code, so that the income inclusion provisions of Section409A(a)(1) of the Code do not apply to the Grantee. This Agreement and the Planshall be administered in a manner consistent with this intent, and any provisionthat would cause the Agreement or the Plan to fail to satisfy Section 409A ofthe Code shall have no force and effect until amended to comply with Section409A of the Code (which amendment may be retroactive to the extent permitted bySection 409A of the Code and may be made by the Corporation without the consentof the Grantee). In particular, to the extent the Grantee has a right to receivepayment pursuant to Sections 3 or 6 that is subject to Section 409A of the Codeand the event triggering the right to payment does not constitute a permitteddistribution event under Section 409A(a)(2) of the Code, then notwithstandinganything to the contrary in Sections 3, 5 or 6 above, issuance of the CommonShares will be made, to the extent necessary to comply with Section 409A of theCode, to the Grantee on the earlier of (a) the Grantee’s “separation fromservice” with the Corporation (determined in accordance with Section 409A);provided, however, that if the Grantee is a “specified employee” (within themeaning of Section 409A) at such time, the Grantee’s date of issuance of theCommon Shares shall be the date that is six months after the date of theGrantee’s separation from service with the Corporation; (b) the date the paymentwould otherwise occur under this Agreement; or (c) the Grantee’s death.Reference to Section 409A of the Code will also include any proposed, temporaryor final regulations, or any other guidance, promulgated with respect to suchSection by the U.S. Department of the Treasury or the Internal Revenue Service. 11. Unsecured Creditor. The Grantee acknowledges that no assets of theCorporation or any Subsidiary shall be segregated for the purpose of deliveringCommon Shares under this Agreement or shall be held (or deemed to be held) intrust for the benefit of the Grantee. It is the intention of the Grantee and theCorporation that all payment obligations under this Agreement shall constituteat all times general unsecured obligations of the Corporation and itsSubsidiaries. 12. Amendments. Subject to the terms of the Plan, the Committee maymodify this Agreement upon written notice to the Grantee. Any amendment to thePlan shall be deemed to be an amendment to this Agreement to the extent that theamendment is applicable hereto. Notwithstanding the foregoing, no amendment ofthe Plan or this Agreement shall adversely affect the rights of the Granteeunder this Agreement without the Grantee’s consent. 13. Severability. In the event that one or more of the provisions ofthis Agreement shall be invalidated for any reason by a court of competentjurisdiction, any provision so invalidated shall be deemed to be separable fromthe other provisions hereof, and the remaining provisions hereof shall continueto be valid and fully enforceable. 14. Relation to Plan. This Agreement is subject to the terms andconditions of the Plan. This Agreement and the Plan contain the entire agreementand understanding of the parties with respect to the subject matter contained inthis Agreement, and supersede all prior communications, representations andnegotiations in respect thereto. In the event of any inconsistency between theprovisions of this Agreement and the Plan, the Plan shall govern. Capitalizedterms used herein without definition shall have the meanings assigned to them inthe Plan. The Committee acting pursuant to the Plan, as constituted from time totime, shall, except as expressly provided otherwise herein, have the right todetermine any questions which arise in connection with the grant of PerformanceShares. 15. Successors and Assigns. Without limiting Section 7 hereof, theprovisions of this Agreement shall inure to the benefit of, and be binding upon,the successors, administrators, heirs, legal representatives and assigns of theGrantee, and the successors and assigns of the Corporation. 16. Governing Law. The interpretation, performance, and enforcement ofthis Agreement shall be governed by the laws of the State of New York, withoutgiving effect to the principles of conflict of laws thereof. 17. Notices. Any notice to the Corporation provided for herein shall bein writing to the Corporation and any notice to the Grantee shall be addressedto the Grantee at his or her address on file with the Corporation. Except asotherwise provided herein, any written notice shall be deemed to be duly givenif and when delivered personally or deposited in the United States mail, firstclass certified or registered mail, postage and fees prepaid, return receiptrequested, and addressed as aforesaid. Any party may change the address to whichnotices are to be given hereunder by written notice to the other party as hereinspecified (provided that for this purpose any mailed notice shall be deemedgiven on the third business day following deposit of the same in the UnitedStates mail). 18. Deferral of Performance Shares. Notwithstanding anything containedherein to the contrary, the Grantee may elect to defer receipt of thePerformance Shares in accordance with the terms and conditions of the Directorsand Executives Deferred Compensation Plan (or any successor plan). (Signatures are on the following page) IN WITNESS WHEREOF, the Corporation has caused this Agreement to beexecuted on its behalf by its duly authorized officer and the Grantee has alsoexecuted this Agreement in duplicate, as of the day and year first abovewritten. CH ENERGY GROUP, INC. By: _______________________________ Name:______________________________ Title:_____________________________ The undersigned hereby acknowledges receipt of an executed original ofthis Agreement and accepts the award of Performance Shares granted thereunder onthe terms and conditions set forth herein and in the Plan. GRANTEE ———————————–