Exhibit 10.2

PERFORMANCE AWARD AGREEMENT

This Performance Award Agreement (the “Agreement”) has been made as of March 2,
2007 (the “Date of Grant”) between Duke Energy Corporation, a Delaware
corporation, with its principal offices in Charlotte, North Carolina (the
“Corporation”), and                   (the “Grantee”).

RECITALS

Under the Duke Energy Corporation 2006 Long-Term Incentive Plan, as it may, from
time to time, be further amended (the “Plan”), the Compensation Committee of the
Board of Directors of the Corporation (the “Committee”), or its delegatee, has
determined the form of this Agreement and selected the Grantee, as an Employee,
to receive the award evidenced by this Agreement (the “Award”) and the
Performance Shares and tandem Dividend Equivalents that are subject hereto.  The
applicable provisions of the Plan are incorporated in this Agreement by
reference, including the definitions of terms contained in the Plan (unless such
terms are otherwise defined herein).

AWARD

In accordance with the Plan, the Corporation has made this Award, effective as
of the Date of Grant and upon the following terms and conditions:

Section 1.              Number and Nature of Performance Shares and Tandem
Dividend Equivalents.  The number (at maximum performance) of Performance Shares
and the number (at maximum performance) of tandem Dividend Equivalents subject
to this Award are each                    (            ).  The number of such
Performance Shares that may become vested upon determination of achievement of
each Performance Goal at target, as provided in Section 2(a), is
                   (     ).  Each Performance Share, upon becoming vested before
its expiration, represents a right to receive payment in the form of one (1)
share of Common Stock.  Each tandem Dividend Equivalent, after its tandem
Performance Share vests, represents a right to receive a cash payment equivalent
in amount to the aggregate cash dividends declared and paid on one (1) share of
Common Stock for the period beginning on the Date of Grant and ending on the
date the vested, tandem Performance Share is paid or deferred.  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 Corporation by virtue of this Award.

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Section 2.              Vesting of Performance Shares.

(a)  Performance Goals

(i)            The following Performance Goal shall apply with respect to
one-half of the Performance Shares and Dividend Equivalents covered by this
Agreement.  Provided Grantee’s continuous employment by the Corporation,
including Subsidiaries, has not terminated, or as otherwise provided in Sections
2(b) or 2(c), one-half of the Performance Shares subject to this Award shall
become vested upon the written determination by the Committee, or its delegatee,
in its sole discretion, of the extent to which the Corporation achieves the “TSR
Performance Goal,” which is the Corporation’s Total Shareholder Return (“TSR”)
percentile ranking among the companies that are in the Philadelphia Utility
Index as of the end of the Performance Period, with higher percentile ranking
for more positive/less negative TSR, for the period beginning January 1, 2007
and ending December 31, 2009 (“Performance Period”), at, or above, the
30th percentile, in accordance with the applicable vesting percentage specified
for such percentile ranking in the following schedule:

Percentile
Ranking

 

Vesting
Percentage
(Applicable to
Target # of
Shares)

 

Vesting
Percentage
(Applicable to
Maximum # of
Shares)

 

 

 

 

 

 

 

Lower than 30th

 

0

%

0

%

*

 

*

 

*

 

30th

 

50

%

33.33

%

*

 

*

 

*

 

50th

 

100

%

66.66

%

*

 

*

 

*

 

70th or higher

 

150

%

100

%

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*When such determination is of a percentile ranking between those specified, the
Committee, or its delegatee, in its sole discretion, shall interpolate to
determine the applicable vesting percentage.

and such Performance Shares that do not so become vested shall be forfeited. 
For purposes of this Agreement, TSR means the change in fair market value over a
specified period of time, expressed as a percentage, of an initial investment in
specified common stock, with dividends reinvested, all as determined utilizing
such methodology as the Committee, or its delegatee, shall approve, provided,
however, that the Committee, or its delegatee, shall have the discretion to make
appropriate and equitable adjustments to the TSR of any company (including the

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Corporation) whose shares trade ex-dividend as of December 31, 2009, provided,
however, that no such adjustment shall be permitted if it would result in the
loss of the otherwise available exemption of the Award under Section 162(m) of
the Code.  In the event that a company becomes a member of the Philadelphia
Utility Index following January 1, 2007, such company shall not be taken into
account for purposes of this Agreement.

(ii)           The following Performance Goal shall apply with respect to
one-half of the Performance Shares and Dividend Equivalents covered by this
Agreement.  Provided Grantee’s continuous employment by the Corporation,
including Subsidiaries, has not terminated, or as otherwise provided in Sections
2(b) or 2(c), one-half of the Performance Shares subject to this Award shall
become vested upon the written determination by the Committee, or its delegatee,
in its sole discretion, of the extent to which the Corporation achieves the
“CAGR Performance Goal,” which is based on the Corporation’s compounded annual
growth rate (“CAGR”) with respect to its ongoing earnings per share (“EPS”), as
calculated in accordance with Exhibit A, for the Performance Period at, or
above, 4%, in accordance with the applicable vesting percentage specified for
CAGR in the following schedule:

CAGR

 

Vesting
Percentage
(Applicable to
Target # of Shares)

 

Vesting
Percentage
(Applicable to
Maximum # of
Shares)

 

 

 

 

 

 

 

Lower than 4%

 

0

%

0

%

*

 

*

 

*

 

4%

 

50

%

33.33

%

*

 

*

 

*

 

5%

 

100

%

66.66

%

*

 

*

 

*

 

6% or higher

 

150

%

100

%

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*When such determination is at a level between those specified, the Committee,
or its delegatee, in its sole discretion, shall interpolate to determine the
applicable vesting percentage.

and such Performance Shares that do not so become vested shall be forfeited.

(b) In the event that, prior to the date that the determination of the
achievement of each Performance Goal is made, the Grantee’s continuous
employment by the Corporation, including Subsidiaries, terminates, the
Performance Shares subject to this Award are thereupon forfeited, except that if
such employment terminates

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(i) at a time when Grantee has attained age 55 and has at least five years of
vesting service under the Duke Energy Retirement Cash Balance Plan or Cinergy
Corp. Non-Union Employees’ Pension Plan, or under another retirement plan of the
Corporation or a Subsidiary which plan the Committee, or its delegatee, in its
sole discretion, determines to be the functional equivalent of the Duke Energy
Retirement Cash Balance Plan or the Cinergy Corp. Non-Union Employees’ Pension
Plan, unless the Committee, or its delegatee, in its sole discretion, determines
that Grantee is in violation of any obligation identified in Section 3, (ii) as
the result of the Grantee’s death, (iii) as the result of the Grantee’s
permanent and total disability within the meaning of Code Section 22(e)(3), (iv)
as the result of the termination of such employment by the Corporation, or
employing Subsidiary, other than for cause, as determined by the Corporation or
employing Subsidiary, in its sole discretion, or (v) as the direct and sole
result, as determined by the Corporation, or employing Subsidiary, in its sole
discretion, of the divestiture of assets, a business, or a company, by the
Corporation or a Subsidiary, the Performance Shares subject to this Award shall
vest upon such determination of the achievement of each Performance Goal, at
such vesting percentage determined by the Committee, or its delegatee, in its
sole discretion, by prorating on the basis of the portion of the Performance
Period that such employment continued while Grantee was entitled to payment of
salary (unless such termination occurs after the end of the Performance Period,
in which event the number of Performance Shares earned, if any, shall not be
prorated).

In the event that Grantee is on an employer-approved, personal leave of absence
on the date that the determination of the achievement of each Performance Goal
is made, then, unless prohibited by law, vesting shall be postponed and shall
not occur unless and until Grantee returns to active service in accordance with
the terms of the approved personal leave of absence and before the second
anniversary of the commencement of such leave of absence; unless the Committee
or delegatee determines otherwise, in the event Grantee does not return to
active service from such leave of absence prior to the second anniversary of the
commencement of such leave of absence, any Performance Shares covered by this
Award that were not vested as of the commencement of such leave shall be
immediately forfeited (as if Grantee terminated employment for purposes of
Section 4 hereof). .  Further, in the event that such determination is made and
during any portion of the Performance Period the Grantee was on
employer-approved, personal leave of absence, the applicable vesting percentage
shall be determined by the Committee, or its delegatee, in its sole discretion,
to reflect only that portion of the Performance Period during which such
employment continued while the Grantee was entitled to payment of salary.

(c) In the event that a Change in Control occurs before the Performance Period
has ended and (i) before the Grantee’s continuous employment by the Corporation,
including Subsidiaries, terminates, or (ii) after such employment terminates
during the Performance Period, (A) at a time when Grantee is

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considered “retired”, unless the Corporation, in its sole discretion, determines
that Grantee is in violation of any obligation identified in Section 3, or (B)
as the result of an event listed in items (ii) — (v) of the first sentence of
Section 2(b), the Performance Shares subject to this Award shall vest upon such
occurrence, at such vesting percentage determined by the Committee, or its
delegatee, in its sole discretion, by prorating down, assuming performance at
the target level for each Performance Goal, on the basis of the portion of the
Performance Period that has elapsed prior to the time of such occurrence (or
such earlier termination of employment), and the remaining Performance Shares
shall be forfeited, irrespective of any subsequent determination of the
achievement of each Performance Goal.

Section 3.              Violation of Grantee Obligation.  In consideration of
the continued vesting opportunity provided under Section 2 following the
termination of Grantee’s continuous employment by the Corporation, including
Subsidiaries, if, at the time of such termination of employment, Grantee is
considered “retired”, Grantee agrees that during the period beginning with such
termination of employment and ending with the third anniversary of the Date of
Grant (“Restricted Period”), Grantee shall not (i) without the prior written
consent of the Corporation, or its delegatee, become employed by, serve as a
principal, partner, or member of the board of directors of, or in any similar
capacity with, or otherwise provide service to, a competitor, to the detriment,
of the Corporation or any Subsidiary, or (ii) violate any of Grantee’s other
noncompetition obligations, or any of Grantee’s nonsolicitation or nondisclosure
obligations, to the Corporation or any Subsidiary.  The noncompetition
obligations of clause (i) of the preceding sentence shall be limited in scope
and shall be effective only to competition with the Corporation or any
Subsidiary in the businesses of:  production, transmission, distribution, or
retail or wholesale marketing or selling of electricity; resale or arranging for
the purchase or for the resale, brokering, marketing, or trading of electricity
or derivatives thereof; energy management and the provision of energy solutions;
development and management of fiber optic communications systems; development
and operation of power generation facilities, and sales and marketing of
electric power, domestically and abroad; and any other business in which the
Corporation, including Subsidiaries, is engaged at the termination of Grantee’s
continuous employment by the Corporation, including Subsidiaries; and within the
following geographical areas (i) any country in the world where the Corporation,
including Subsidiaries, has at least US$25 million in capital deployed as of
termination of Grantee’s continuous employment by Corporation, including
Subsidiaries; (ii) the continent of North America; (iii) the United States of
America and Canada; (iv) the United States of America; (v) the states of North
Carolina, South Carolina, Virginia, Georgia, Florida, Texas, California,
Massachusetts, Illinois, Michigan, New York, Colorado, Oklahoma and Louisiana;
(vi) the states of North Carolina, South Carolina, Texas, Colorado, Ohio,
Kentucky, and Indiana; and (vii) any state or states with respect to which was
conducted a business of the Corporation, including Subsidiaries, which business
constituted a substantial portion of

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Grantee’s employment.  The Corporation and Grantee intend the above restrictions
on competition in geographical areas to be entirely severable and independent,
and any invalidity or enforceability of this provision with respect to any one
or more of such restrictions, including areas, shall not render this provision
unenforceable as applied to any one or more of the other restrictions, including
areas.  If any part of this provision is held to be unenforceable because of the
duration, scope or area covered, the Corporation and Grantee agree to modify
such part, or that the court making such holding shall have the power to modify
such part, to reduce its duration, scope or area, including deletion of specific
words and phrases, i.e., “blue penciling”, and in its modified, reduced or blue
pencil form, such part shall become enforceable and shall be enforced.  Nothing
in Section 3 shall be construed to prohibit Grantee being retained during the
Restricted Period in a capacity as an attorney licensed to practice law, or to
restrict Grantee providing advice and counsel in such capacity, in any
jurisdiction where such prohibition or restriction is contrary to law.

Section 4.              Forfeiture/Expiration.  Any Performance Share subject to
this Award shall be forfeited upon the termination of the Grantee’s continuous
employment by the Corporation, including Subsidiaries, from the Date of Grant,
except to the extent otherwise provided in Section 2, and, if not previously
vested and paid, or deferred, or forfeited, shall expire immediately before the
tenth (10th) anniversary of the Date of Grant.  Any Dividend Equivalent subject
to this Award shall expire at the time its tandem Performance Share (i) is
vested and paid, or deferred, (ii) is forfeited, or (iii) expires.

Section 5.              Dividend Equivalent Payment.  Payment with respect to
any Dividend Equivalent subject to this Award that is in tandem with a
Performance Share that is vested and paid shall be paid in cash to the Grantee
as soon as practicable following the vesting and payment of the Performance
Share, or, if the vested Performance Share is deferred by Grantee as provided in
Section 6, payment with respect to the tandem Dividend Equivalent shall likewise
be deferred.  The Dividend Equivalent payment amount shall equal the aggregate
cash dividends declared and paid with respect to one (1) share of Common Stock
for the period beginning on the Date of Grant and ending on the date the vested,
tandem Performance Share is paid or deferred and before the Dividend Equivalent
expires.  However, should the timing of a particular payment under Section 6 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 receives such shares without the right to receive such dividend and the
Grantee would not otherwise be entitled to payment under the expiring Dividend
Equivalent with respect to such dividend, the Grantee, nevertheless, shall be
entitled to such payment.  Dividend Equivalent payments shall be subject to
withholding for taxes.

Section 6.              Payment of Performance Shares.  Payment of Performance
Shares subject to this Award shall be made to the Grantee as soon as

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practicable following the time such Performance Shares become vested in
accordance with Section 2 prior to their expiration but in no event later than
30 days following such vesting event, except to the extent deferred by the
Grantee in accordance with such procedure as the Committee, or its designee, may
prescribe.  Payment shall be subject to withholding for taxes. Payment shall be
in the form of one (1) share of Common Stock for each full vested Performance
Share, and any fractional vested Performance Share shall be rounded up to the
next whole share for purposes of both vesting under Section 2 and payment under
Section 6.  In the event that payment, after any reduction in the number of
shares of Common Stock to satisfy withholding for tax requirements, would be for
less than ten (10) shares of Common Stock, then, if so determined by the
Committee, or its delegatee, in its sole discretion, payment, instead of being
made in shares of Common Stock, shall be made in a cash amount equal in value to
the shares of Common Stock that would otherwise be paid, valued at Fair Market
Value on the date the respective Performance Shares became vested.

Section 7.              No Employment Right.  Nothing in this Agreement or in
the Plan shall confer upon the Grantee the right to continued employment with
the Corporation or any Subsidiary, or affect the right of the Corporation or any
Subsidiary to terminate the employment or service of the Grantee at any time for
any reason.

Section 8.              Nonalienation.  The Performance Shares and Dividend
Equivalents subject to this Award are not assignable or transferable by
Grantee.  Upon any attempt to transfer, assign, pledge, hypothecate, sell or
otherwise dispose of any such Performance Share or Dividend Equivalent, or of
any right or privilege conferred hereby, or upon the levy of any attachment or
similar process upon such Performance Share or Dividend Equivalent, or upon such
right or privilege, such Performance Share or Dividend Equivalent, or such right
or privilege, shall immediately become null and void.

Section 9.              Determinations.  Determinations by the Committee, or its
delegatee, shall be final and conclusive with respect to the interpretation of
the Plan and this Agreement.

Section 10.            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 11.            Conflicts with Plan, Correction of Errors, and Grantee’s
Consent.  In the event that any provision of this Agreement conflicts in any way
with a provision of the Plan, such Plan provision shall be controlling and the
applicable provision of this Agreement shall be without force and effect to the
extent necessary to cause such Plan provision to be controlling.  In the event
that, due to administrative error, this Agreement does not accurately reflect an

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Award properly granted to the Grantee pursuant to the Plan, the Corporation,
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.  It is the intention of the
Corporation and the Grantee that this Award not result in unfavorable tax
consequences to Grantee under Code Section 409A.  Accordingly, Grantee consents
to such amendment of this Agreement as the Corporation may reasonably make in
furtherance of such intention, and the Corporation shall promptly provide, or
make available to, Grantee a copy of any such amendment.

Section 12.            Compliance with Law.  The Corporation shall make
reasonable efforts to comply with all applicable federal and state securities
laws applicable to the Plan and this Award; provided, however, notwithstanding
any other provision of this Award, the Corporation shall not be obligated to
deliver any shares of Common Stock pursuant to this Award if the delivery
thereof would result in a violation of any such law.

Notwithstanding the foregoing, this Award is subject to cancellation by the
Corporation in its sole discretion unless the Grantee, by not later than
                    , 2007, has signed a duplicate of this Agreement, in the
space provided below, and returned the signed duplicate to the Executive
Compensation and Benefits Department - Performance Award (ST05F), Duke Energy
Corporation, P. O. Box 1007, Charlotte, NC 28201-1007, which, if, and to the
extent, permitted by the Executive Compensation and Benefits Department, may be
accomplished by electronic means.

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

ATTEST

 

DUKE ENERGY CORPORATION

 

 

 

 

 

 

 

 

 

 

By:

 

 

By:

 

 

Corporate Secretary

 

Its:

Chief Executive Officer

 

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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 and the Plan, Grantee
has signed this Agreement this            day of
                                           , 2007.

 

 

 

 

 

Grantee’s Signature

 

 

 

 

 

 

 

 

(print name)

 

 

 

 

 

 

 

 

(social security number)

 

 

 

 

 

 

 

 

(address)

 

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EXHIBIT A

CALCULATION OF CAGR

The Committee shall calculate CAGR using the following methodology.

CAGR = [2009 EPS / 2006 EPS (without regard to Spectra Energy Corp)] 1/3 - 1

CAGR = (2009 EPS / $1.07)1/3 - 1

“EPS” for this purpose shall be equal to Duke Energy’s diluted ongoing earnings
per share, as reported in Duke Energy’s earnings releases.  Transactions that
will be excluded from actual results in determining EPS include, but are not
limited to, the following: (i) gains and losses on asset sales, with the
exception of gains and losses associated with routine land sales (e.g.
easements, rights of way) made in the normal course of business; (ii) changes in
accounting principles mandated by FASB (that are not assumed in the financial
plan); (iii) enterprise-wide restructuring charges; (iv) asset impairments; (v)
mark-to-market impacts arising from economically hedging the output within the
Commercial Power segment; (vi) discontinued operations (if discontinued
operations arise during the year, the EBIT portion of the amount reported as
discontinued operations will be added back to  business unit ongoing EBIT for
purposes of calculating that business unit’s ROCE); and (viii) significant,
unanticipated non-recurring reserve accruals and reversals (e.g. legal
settlements).  Such transactions must be equal to or greater than $10 million,
either individually or in the aggregate for multiple transactions similar in
nature, in order to qualify for exclusion.  Excluding routine asset sales made
in the normal course of business, as identified above, financial plan ongoing
earnings does not include any gains or losses associated with asset sales. 
Transactions that will qualify for adjustments to the above EPS performance
levels include, but are not limited to, the following:  (i) impacts of
mark-to-market accounting arising from economically hedging the output within
the Commercial Power segment; (ii) financial plan operating earnings associated
with the sale of any assets outside those included in the financial plan, as any
such sales occur, prospectively from the date of sale; and (iii) the impact of
actual operating earnings associated with asset divestitures assumed in the
financial plan caused by any differences between assumed and actual divestiture
timing (no asset divestitures are assumed in the 2007 financial plan).  For the
asset sale related items above, such transactions must be equal to or greater
than $10 million of EBIT, either individually or in the aggregate for multiple
transactions similar in nature, in order to qualify for performance level
adjustment.

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