Exhibit 10.2

PERFORMANCE AWARD AGREEMENT

This Performance Award Agreement (the “Agreement”) has been made as of April 4,
2006 (the “Date of Award”) between Duke Energy Corporation, a Delaware
corporation, with its principal offices in Charlotte, North Carolina (the
“Company”), and James E. Rogers (the “Grantee”).

RECITALS

The Company has entered into an employment agreement with the Grantee dated
April 4, 2006 (the “Employment Agreement”), pursuant to which it has agreed to
make certain equity-based awards to the Grantee, including the award
memorialized by this Performance Award Agreement. The Company has assumed the
1998 Long-Term Incentive Plan that, prior to the consummation of the
transactions contemplated by the Agreement and Plan of Merger dated May 8, 2005,
by and among the Company, Duke Energy Corporation, a North Carolina corporation
(“Old Duke”), Cinergy Corp., Deer Acquisition Corp. and Cougar Acquisition
Corp., was maintained by Old Duke (the “Company Plan”). The grant memorialized
by this Performance Award Agreement is not made pursuant to the Company Plan;
however, for convenience, it shall be deemed to be made pursuant to a plan
document with terms substantially identical to the Company Plan (such deemed
plan document, the “Plan”). The applicable terms/provisions of the Plan are
incorporated in this Performance Award Agreement by reference, including the
definitions of terms contained in the Plan (except to the extent a term is
otherwise defined herein).

PERFORMANCE AWARD

The Company has made this Performance Award, effective as of the Date of Award
and upon the following terms and conditions:

Section 1. Number and Nature of Performance Shares and Dividend Equivalents. The
number of Performance Shares and the number of tandem Dividend Equivalents
subject to this Performance Award are each three hundred twenty-two thousand
eight hundred (322,800). Each Performance Share represents a right to receive,
following the vesting of the Performance Share, payment in the form of one share
of common stock, no par value, of the Company (“Common Stock”). Each tandem
Dividend Equivalent, until its expiration, represents a right to receive cash
payments equivalent in amount to the cash dividends declared and paid on one
share of Common Stock. Performance Shares and Dividend Equivalents are used
solely as units of measurement and are not shares of Common Stock, and the
Grantee is not, and has no rights as, a shareholder of the Company by virtue of
this Performance Award.

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Section 2. Vesting of Performance Shares. Except as otherwise provided in this
Section 2, Performance Shares subject to this Performance Award shall become
vested on the last day of the particular calendar year upon the written
determination by the Committee, or its delegatee, in its sole discretion, that
the Performance Goal that it has established for the particular calendar year
has been achieved, together with the level of such achievement between threshold
and target levels (provided that vesting can occur at less than (but not more
than) the target levels set forth above for any specified performance period as
determined by the Committee and vesting shall be interpolated for performance
above the threshold vesting level and below the target level set forth above).
The Committee’s written determination shall be provided no later than the
ninetieth (90th) day of the next calendar year. In this regard: (i) one hundred
seven thousand six hundred (107,600) Performance Shares shall vest at the target
level on December 31, 2006, subject to the achievement of the Performance Goal
for calendar year 2006; (ii) one hundred seven thousand six hundred
(107,600) Performance Shares shall vest at the target level on December 31,
2007, subject to the achievement of the Performance Goal for calendar year 2007;
and (iii) one hundred seven thousand six hundred (107,600) Performance Shares
shall vest at the target level on December 31, 2008, subject to the achievement
of the Performance Goal for calendar year 2008.

In the event, and to the extent, that the Committee, or its delegatee, in its
sole discretion, determines that the Performance Goal(s) for a particular
calendar year have not been achieved, the Performance Shares whose vesting is
subject to the Performance Goal(s), and respective tandem Dividend Equivalents,
are thereupon forfeited. In the event that the Grantee’s continuous employment
by the Company (including Subsidiaries) terminates by reason of death or
disability (meaning any physical or mental illness or injury that precludes the
Grantee from performing any job for which he is qualified and able to perform
based upon his education, training or experience), any outstanding and unvested
Performance Shares subject to this Performance Award shall immediately become
vested, irrespective of whether there is a subsequent determination that the
Performance Goal(s) have, or have not, been achieved. In the event that the
Grantee’s continuous employment by the Company (including Subsidiaries)
terminates for any other reason, a portion of each unvested Performance Share
shall immediately vest based on the target level of performance), such portion
to be equal to (i) the number of days elapsed at the time of termination
(inclusive) in the performance period not yet concluded at the time of
termination divided by (ii) the number of days in the performance period not yet
concluded at the time of termination, irrespective of whether there is a
subsequent determination that the Performance Goal(s) have, or have not, been
achieved, provided that if such a termination of employment occurs after
December 31, 2008, then the Performance Share Award shall be payable (if at all)
as determined in accordance with its terms without regard to the termination of
employment. Upon the termination of the Grantee’s continuous employment by the
Company (including Subsidiaries), any fraction of an outstanding Performance
Share that is vested shall be cancelled in exchange for a cash payment equal to
the fair market value of such fraction of a Performance Share and any
outstanding Performance Shares that are not vested (whether pursuant to the
provisions of this paragraph or otherwise), and tandem Dividend Equivalents,
shall be forfeited.

 

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Section 3. Forfeiture/Expiration. Except as otherwise expressly provided herein,
any Performance Share subject to this Performance Award shall be forfeited upon
the termination of the Grantee’s continuous employment by the Company (including
Subsidiaries) from the Date of Award, to the extent not then or previously
vested. Any right to future Dividend Equivalents subject to this Performance
Award shall expire at the time the Performance Share with respect to which the
Dividend Equivalent is in tandem is either paid or forfeited.

Section 4. Dividend Equivalent Payments. Payments with respect to any Dividend
Equivalent subject to this Performance Award shall be paid in cash to the
Grantee (or, if the Grantee is dead, the Grantee’s beneficiary) as soon as
practicable whenever cash dividends are declared and paid with respect to the
Common Stock after the Date of Award and before the Dividend Equivalent expires.
However, should the timing of a particular payment under Section 5 to the
Grantee in shares of Common Stock in conjunction with the timing of a particular
cash dividend declared and paid on Common Stock be such that the Grantee (or the
Grantee’s beneficiary) receives such shares without the right to receive such
dividend and the Grantee (or the Grantee’s beneficiary) would not otherwise be
entitled to payment under the expiring tandem Dividend Equivalents with respect
to such dividend, the Grantee (or the Grantee’s beneficiary), nevertheless,
shall be entitled to such payment. Dividend Equivalent payments shall be subject
to withholding for taxes.

Section 5. Payment of Performance Shares Payment under all vested Performance
Shares subject to this Performance Award shall be made to the Grantee (or, if
the Grantee is dead, the Grantee’s beneficiary) as soon as practicable following
April 3, 2009 or, if earlier, the termination of the Grantee’s continuous
employment by the Company (including Subsidiaries) but, in any event, no earlier
or later than the applicable date or dates under Section 409A of the Code in
order to avoid the imposition of any taxation under such Code section. Payment
shall be subject to withholding for taxes and shall not occur until the Grantee
(or the Grantee’s beneficiary) has arranged to meet this obligation to the
satisfaction of the Executive Compensation and Benefits Department.
Notwithstanding the foregoing, to the extent that Grantee fails to timely tender
to the Corporation sufficient cash to satisfy withholding for tax requirements,
such withholding shall be applied to reduce the number of shares of Common Stock
that would otherwise be paid. Payment shall be in the form of one (1) share of
Common Stock for each full Performance Share so vested, and any fractional
Performance Share so vested shall not be paid unless and until subsequent
vesting results in the full Performance Share becoming vested.

Section 6. No Employment Right. Nothing in this Agreement shall affect the right
of the Company or any Subsidiary to terminate the employment of service of the
Grantee at any time for any, or no, reason, or confer upon the Grantee the right
to continued employment with the Company (including Subsidiaries).

 

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Section 7. Restrictions on Transfer, Beneficiary. Performance Shares and
Dividend Equivalents subject to this Performance Award may not be sold,
transferred, exchanged, assigned, pledged, hypothecated, alienated or otherwise
encumbered. The Grantee may designate a beneficiary or beneficiaries to receive
any payments that are due under Section 4 or 5 following Grantee’s death. To be
effective, such designation must be made in accordance with such rules and on
such form as prescribed by the Company’s Executive Compensation and Benefits
Department for such purpose which completed form must be received by the
Company’s Executive Compensation and Benefits Department before Grantee’s death.
If the Grantee fails to designate a beneficiary, or if no designated beneficiary
survives Grantee’s death, Grantee’s estate shall be deemed Grantee’s
beneficiary.

Section 8. Determinations. Determinations by the Committee, or its delegatee,
shall be final and conclusive with respect to the interpretation of this
Agreement.

Section 9. Governing Law. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of Delaware applicable to
transactions that take place entirely within that state.

Section 10. Conflicts with Plan and Correction of Errors. In the event that, due
to administrative error, this Agreement does not accurately reflect a
Performance Award properly granted to the Grantee pursuant to the Employment
Agreement, the Company, acting through its Executive Compensation and Benefits
Department, reserves the right to cancel any erroneous document and, if
appropriate, to replace the cancelled document with a corrected document.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and
granted in Charlotte, North Carolina, to be effective as of the Date of Award.

 

ATTEST      DUKE ENERGY CORPORATION By:  

 

     By:  

 

         James H. Hance, Jr.   Corporate Secretary      Its:   Chairman,
Compensation Committee

 

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Acceptance of Performance Award

IN WITNESS OF Grantee’s acceptance of this Performance Award and Grantee’s
agreement to be bound by the provisions of this Agreement, Grantee has signed
this Agreement this 5th day of April 2006.

 

 

Grantee’s Signature

 

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