Exhibit 10-uuuu

 

AGREEMENT

 

In connection with the anticipated merger (the “Merger”) by and among Cinergy
Corp., a Delaware corporation (“Cinergy”), Duke Energy Corporation, a North
Carolina corporation (“Duke”) and their respective affiliates as contemplated by
the Agreement and Plan of Merger (the “Merger Agreement”) dated as of May 8,
2005, originally by and among Duke, Cinergy, Deer Holding Corp., a Delaware
corporation, Deer Acquisition Corp., a North Carolina corporation, and Cougar
Acquisition Corp., a Delaware corporation, Cinergy and the individual listed on
Exhibit A hereto (the “Executive”) (collectively, the “Parties”) hereby enter
into this agreement (this “Agreement”).  The Parties are entering into this
Agreement in order to accelerate the payment of certain amounts that are
expected to become payable following 2005.  Capitalized terms used but not
otherwise defined in this Agreement shall have the meaning set forth in the
Merger Agreement.

1.             Annual Incentive Plan.  Notwithstanding any deferral election to
the contrary, the Parties hereby agree that Cinergy shall pay to the Executive,
prior to December 31, 2005, in satisfaction of his or her expected payment under
the Cinergy Corp. Annual Incentive Plan (“AIP”) for the 2006 performance period,
which payment would otherwise be expected to be made during the thirty-day
period following the Effective Time, the amount (if any) set forth on Exhibit A
hereto.

a.             Within thirty days following the Effective Time, Cinergy hereby
agrees to provide the Executive with an additional payment equal to the excess,
if any, of (i) the payment to which the Executive would be entitled in
accordance with the terms of the AIP for the 2006 performance period (calculated
without regard to this Agreement), over (ii) the amount provided to the
Executive during 2005 pursuant to this Section 1.  The Executive hereby agrees
and acknowledges that, after such payments are made to him or her, Cinergy and
its affiliates shall have no further payment obligations to the Executive under
the AIP for the 2006 performance period and his or her participation, or right
to participate, in the AIP with respect to the 2006 performance period shall
cease immediately.

b.             For the avoidance of doubt, and notwithstanding anything herein
to the contrary, the payments described in this Section shall not be taken into
account in computing any benefits under any other plan, program or arrangement
of Cinergy or its affiliates; provided, however, that when determining the
Executive’s “Highest Average Earnings” under the Cinergy Corp. Non-Union
Employees’ Pension Plan, as amended, and any other plan or arrangement that
references such definition (collectively, the “Pension Plan”), the Executive
shall be treated as if he or she had received, at the Effective Time and under
the terms of the AIP, the payment(s) provided under this Section; further,
provided, however, that for the avoidance of doubt, the Parties acknowledge and
agree that the Pension Plan has been amended to specify that the amount of the
AIP

 

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payments taken into account in determining the Executive’s Highest Average
Earnings for the 2006 calendar year shall not exceed the greater of (i) the
payments made in 2006 under the AIP with respect to the 2005 performance period
and (ii) the payments made (or treated hereunder as having been made) in 2006
under the AIP with respect to the 2006 performance period.

2.             LTIP Performance Shares

a.             Cinergy hereby agrees to pay to the Executive, prior to December
31, 2005, in connection with the performance share agreements, if any, that have
been granted to him or her under the Cinergy Corp. 1996 Long-Term Incentive
Compensation Plan (“LTIP”) for performance cycle VIII (covering the 2004-2006
performance period), performance cycle IX (covering the 2005-2007 performance
period) and performance cycle X (covering the 2006-2008 performance period)
(collectively, his or her “Performance Shares”), under which payment would
otherwise be expected to be made during the thirty-day period following the
Effective Time, the amount (if any) set forth on Exhibit A hereto.  Within
thirty days following the Effective Time, Cinergy hereby agrees to provide the
Executive with an additional payment equal to the excess, if any, of (i) the
amount to which the Executive would be entitled in accordance with the terms of
his or her Performance Shares as a result of the Merger (calculated without
regard to this Agreement), over (ii) the amount provided to the Executive during
2005 pursuant to this Section 2(a).

b.             Cinergy hereby agrees to pay to the Executive, prior to December
31, 2005, the additional amount set forth on Exhibit A hereto in connection with
his or her Performance Shares for performance cycle X (covering the 2006-2008
performance period), which payment would otherwise be expected to be made only
in the event of the Executive’s qualifying termination of employment during the
two-year period following the Effective Time.  Notwithstanding the foregoing,
however, the Executive shall have a contingent right to an additional payment in
the event of his or her qualifying termination of employment in accordance with
Section 8(a)(iii) of the performance share agreement, if any, that has been
granted to him or her under the LTIP for performance cycle X (covering the
2006-2008 performance period), the amount of which shall be reduced by the
amount, if any, provided in 2005 pursuant to this Section 2(b).

c.             The Executive hereby acknowledges and agrees that, after the
payments described in this Section are made to him or her, Cinergy and its
affiliates shall have no further payment obligations to the Executive or his or
her beneficiaries under the LTIP with respect to his or her Performance Shares,
and his or her participation, or right to participate, in the LTIP for such
cycles shall cease.

3.             Miscellaneous Benefits.  Cinergy hereby agrees to pay to the
Executive, prior to December 31, 2005, in satisfaction of his or her rights with
respect to (a) outplacement benefits, (b) a vehicle allowance, (c) a perk pool
allowance, (d) tax and

 

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financial planning services, (e) continued welfare benefit coverage, (f)
executive life insurance coverage, and (g) relocation benefits  (collectively,
the “Miscellaneous Benefits”), which payments would otherwise be expected to be
made to him or her after 2005, the amounts (if any) set forth on Exhibit A
hereto.  The Executive hereby agrees and acknowledges that, after such payments
are made to him or her, Cinergy and its affiliates shall have no further payment
obligations to the Executive, under his or her employment agreement or
otherwise, and whether in connection with his or her termination of employment
or otherwise, with respect to each of the Miscellaneous Benefits for which an
amount is set forth on Exhibit A hereto; provided, however, that Cinergy hereby
agrees to provide the Executive with an additional payment equal to the excess,
if any, of (I) the relocation benefits to which the Executive would be entitled
in accordance with the terms of its applicable plans and arrangements
(calculated without regard to this Agreement), over (II) the benefits provided
to the Executive during 2005 in lieu of relocation benefits pursuant to this
Section 3.

4.             Restricted/Phantom Stock.  Cinergy hereby agrees to waive any
restrictions otherwise applicable to the restricted and/or phantom stock granted
to the Executive on the dates set forth on Exhibit A hereto, under which vesting
and/or payment would otherwise be expected to occur on or following the
Effective Time, and Cinergy hereby agrees to transfer and/or pay to the
Executive in connection with the waiver of such restrictions the number of
shares of Cinergy common stock and/or amount in cash set forth on Exhibit A
hereto, such that all income from such transfer shall be included in the
Executive’s taxable income in 2005.  The Executive hereby agrees and
acknowledges that, after such restrictions are released and/or such payments are
made, Cinergy and its affiliates shall have no further payment obligations to
the Executive with respect to such restricted and/or phantom stock grant (or the
portion thereof identified on Exhibit A hereto).

5.             Severance.  Cinergy hereby agrees to pay to the Executive, prior
to December 31, 2005, in satisfaction of all (or a portion) of the severance
benefits to which he or she otherwise might become entitled, the amount (if any)
set forth on Exhibit A hereto.  Within thirty days following a qualifying
termination of employment pursuant to which the Executive otherwise would be
entitled to severance benefits, Cinergy hereby agrees to provide the Executive
with an additional payment equal to the excess, if any, of (i) the severance
benefits to which the Executive would be entitled in connection with his or her
qualifying termination of employment (calculated without regard to this
Agreement), over (ii) the amount provided to the Executive during 2005 pursuant
to this Section 5.  The Executive hereby agrees and acknowledges that, after
such payments are made to him or her, Cinergy and its affiliates shall have no
further payment obligations to the Executive, under his or her employment
agreement or otherwise, with respect to severance benefits.  For purposes of
clarity, the Parties acknowledge and agree that the term “severance benefits”
where used herein shall mean any cash payment otherwise provided under the terms
of the Executive’s employment agreement, as amended and as currently effective,
or any severance plan sponsored by Cinergy or its affiliates, where the amount
of such payment is based on a multiple of the Executive’s salary and/or bonus or
bonus opportunity.

 

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6.             Nonqualified Pension Plan.  To the extent that the Executive is
or may become entitled to benefits under the Cinergy Corp. Excess Pension Plan,
Cinergy Corp. Supplemental Executive Retirement Plan and/or a supplemental
retirement benefit under his or her employment agreement (collectively, the
“Nonqualified Pension Plan”), the Parties agree that the Nonqualified Pension
Plan is hereby amended (but only with respect to the Executive) to provide for
the payment by Cinergy to the Executive, prior to December 31, 2005, of the
amount specified on Exhibit A hereto and is further amended to reduce the
actuarial equivalent (determined using the applicable actuarial factors
contained in the Nonqualified Pension Plan) of the Executive’s accrued benefits
thereunder (or right to additional benefits thereunder) by such amount.  In all
other respects the Nonqualified Pension Plan shall remain in full force and
effect.

7.             Nonqualified Account Plan.  To the extent that the Executive is
entitled to benefits under the Cinergy Corp. 401(k) Excess Plan, Cinergy Corp.
Nonqualified Deferred Incentive Compensation Plan and/or the Cinergy Corp.
Excess Profit Sharing Plan (collectively, the “Nonqualified Account Plan”), the
Parties agree that the Nonqualified Account Plan is hereby amended (but only
with respect to the Executive) to provide for the payment by Cinergy to the
Executive, prior to December 31, 2005, of the amount specified on Exhibit A
hereto and is further amended to reduce the Executive’s benefits thereunder by
such amount.  In all other respects the Nonqualified Account Plan shall remain
in full force and effect.

8.             Tax Matters.  Cinergy shall withhold and deposit all federal,
state and local income and employment taxes that are owed with respect to all
amounts paid or benefits provided pursuant to this Agreement.  The Parties agree
that none of the payments and benefits payable or provided hereunder and in
connection with the Merger are expected to constitute “excess parachute
payments” within the meaning of Section 280G of the Code.  In the event that any
amounts payable or benefits provided hereunder become subject to the excise tax
under Section 4999 of the Code, the Executive shall continue to have the rights,
if any, that are provided to him or her under his or her employment agreement
with respect to excise tax gross-up payments.  In the event that the highest
marginal Ohio income tax rate is higher in 2005 than in 2006, Cinergy shall
provide the Executive with an additional payment in 2006 equal to the
incremental tax obligation resulting from such higher 2005 rate so that the
Executive is in the same position, for Ohio income tax purposes, as if he or she
had received the payments made under this Agreement in 2006 rather than in 2005.

                9.             Assignment; Governing Law.  Neither this
Agreement nor any of the rights, obligations or interests arising hereunder may
be assigned by the Executive, otherwise than by will or the laws of descent and
distribution.  This Agreement shall be binding upon the Company and its
successors and assigns.  This Agreement shall be interpreted, enforced and
governed under the laws of the State of Ohio without regard to any applicable
state’s choice of law provisions.  Any dispute between the Parties under this
Agreement shall be resolved through informal arbitration by an arbitrator
selected under the rules of the American Arbitration Association and the
arbitration shall be conducted in Cincinnati, Ohio.

 

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                10.           Entire Agreement.  This Agreement shall supersede
any and all prior oral or written representations, understandings and agreements
of the Parties with respect to the matters contained herein, and it contains the
entire agreement of the Parties with respect to those matters.  Once signed by
the Parties hereto, no provision of this Agreement may be modified or amended
unless agreed to in a writing signed by the Parties.  Any notice required by
this Agreement shall be sent in writing and delivered by first class mail to the
last known address of the Party to whom it is sent.  This Agreement may be
executed by the Parties hereto in counterparts, and each of which shall be
considered an original for all purposes.

                11.           Miscellaneous

a.             The Executive acknowledges and agrees that Cinergy (and/or any of
its authorized officers and/or employees) is authorized to act for each of its
subsidiaries and affiliates, including Duke and its subsidiaries and affiliates
following the Merger, with respect to all aspects of the administration and
interpretation of this Agreement, and that with respect to employment matters
references herein to Cinergy shall include Cinergy Services, Inc. or such other
affiliate that employs the Executive.

b.             Notwithstanding any other provision of this Agreement, this
Agreement shall be administered in a manner that complies with the provisions of
Section 409A of the Code, so as to prevent the inclusion in gross income of any
amount in a taxable year that is prior to the taxable year or years in which
such amount would otherwise actually be distributed or made available to or on
behalf of the Executive.

c.             The Executive acknowledges and agrees that no action taken in
connection with this Agreement shall give him the right to terminate his or her
employment for “Good Reason” or shall otherwise provide him or her with rights
under his or her employment agreement or any other compensation agreement or
arrangement.

d.             The Executive acknowledges and agrees that, within 45 days
following his or her termination of employment with Cinergy and its affiliates,
he or she shall be required to execute (and not timely revoke) a waiver and
release of all claims that he or she might assert against Cinergy and its
affiliates and successors, on a form provided by Cinergy (which form shall be
substantially in the form of the waiver and release attached to the Executive’s
employment agreement, if applicable).

                12.           Repayment Obligation.  This Section shall apply
with respect to the Executive only to the extent it is not unlawful under the
Sarbanes-Oxley Act of 2002 or any related rule, regulation or interpretation.

a.             In the event that the Executive voluntarily terminates employment
with Cinergy and its affiliates prior to the Effective Time, the Executive shall
be

 

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required to repay 100% of any benefits or payments provided hereunder within ten
days following his or her termination of employment.

b.             The Parties acknowledge and agree that (i) payments provided
hereunder in 2005 might not otherwise be payable in the event that the Merger
does not occur, (ii) the receipt of such amounts will be includible in the
Executive’s taxable income in 2005 and (iii) the Executive’s ability to recover
the taxes paid in connection with such amounts is limited under current tax
laws.  Accordingly, in the event that the Effective Time does not occur prior to
December 15, 2006, the Executive shall be required to repay 50% of any benefits
or payments provided hereunder no later than December 31, 2006.

c.             Notwithstanding anything herein to the contrary, (i) the
Executive shall not be required to repay any amount which, without regard to
this Agreement, Cinergy determines in good faith the Executive has earned prior
to the date on which repayment would otherwise be required, (ii) in the event of
repayment, the Executive shall not be treated as having waived his or her rights
to earn, after the date of repayment, the repaid amounts as a result of
satisfying the eligibility criteria for such amounts in accordance with the
terms of Cinergy’s applicable plans and arrangements, (iii) no repayment shall
be required with respect to any amount provided pursuant to Section 7, and (iv)
this Section 12 shall be administered in a manner that complies with the
provisions of Section 409A of the Code, so as to prevent the inclusion in gross
income of any amount in a taxable year that is prior to the taxable year or
years in which such amount would otherwise actually be distributed or made
available to or on behalf of the Executive.

                13.           Affect on Other Arrangements.  Except as otherwise
provided in Section 1, for the avoidance of doubt, and notwithstanding anything
herein to the contrary, the Parties acknowledge and agree that payments made
under this Agreement shall not be taken into account in computing any benefits
under any plan, program or arrangement of Cinergy or its affiliates.

 

IN WITNESS WHEREOF, the Parties have signed, or caused a duly authorized agent
thereof to sign, this Agreement on their behalf and thereby acknowledge their
intent to be bound by its terms and conditions.

 

EXECUTIVE

 

CINERGY CORP.

 

 

 

Signed:

 

 

Signed:

 

 

 

 

 

 

Printed:

 

 

Printed:

 

 

 

 

 

 

Date:

 

 

Date:

 

 

 

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EXHIBIT A

 

Executive:  _____________________

 

 

1.

Annual Incentive Plan (§ 1)

 

 

 

$

 

 

 

 

 

 

 

 

 

2.

LTIP Performance Shares (§ 2)

 

 

 

 

 

 

a.

Cycle VIII (2004-2006)

 

 

 

$

 

 

b.

Cycle IX (2005-2007)

 

 

 

$

 

 

c.

Cycle X (2006-2008 (§ 2(a))

 

 

 

$

 

 

d.

Cycle X (2006-2008 (§ 2(b))

 

 

 

$

 

 

 

 

 

 

 

 

 

3.

Miscellaneous Benefits (§ 3)

 

 

 

 

 

 

a.

Outplacement Benefits

 

 

 

$

 

 

b.

Vehicle Allowance

 

 

 

$

 

 

c.

Perk Pool Allowance

 

 

 

$

 

 

d.

Tax and Financial Planning

 

 

 

$

 

 

e.

Continued Welfare Benefits

 

 

 

$

 

 

f.

Executive Life Insurance

 

 

 

$

 

 

g.

Relocation Benefits

 

 

 

 

 

 

 

 

 

 

 

 

 

4.

Restricted and/or Phantom Stock (§ 4)

 

 

 

 

 

 

a.

Date of Grant:

 

 

Payment or number of shares:

 

 

 

 

b.

Date of Grant:

 

 

Payment or number of shares:

 

 

 

 

 

 

 

 

 

 

 

5.

Severance Benefits (Employment Agreement) (§ 5)

 

 

 

$

 

 

 

 

 

 

 

 

 

6.

Nonqualified Pension Plan (§ 6)

 

 

 

 

 

 

a.

Excess Pension Plan

 

 

 

$

 

 

b.

Supplemental Executive Retirement Plan

 

 

 

$

 

 

c.

Supplemental Retirement Benefit (Employment Agreement)

 

 

 

$

 

 

 

 

 

 

 

 

 

7.

Nonqualified Account Plan (§ 7)

 

 

 

 

 

 

a.

401(k) Excess Plan

 

 

 

$

 

 

b.

Nonqualified Deferred Incentive Compensation Plan

 

 

 

$

 

 

c.

Excess Profit Sharing Plan

 

 

 

$

 

 

 

 

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