Exhibit 10.FFFF

 

CINERGY CORP.
RETIREMENT AND CONSULTING AGREEMENT

 

This Separation and Retirement Agreement (the “Agreement”), which is effective
as of this 5th day of May, 2005, is entered into by and between William J.
Grealis (the “Executive”) and Cinergy Services, Inc. (the “Company”), with the
mutual exchange of promises as consideration.

 

Recitals

 

WHEREAS, THE EXECUTIVE INTENDS TO TERMINATE VOLUNTARILY HIS EMPLOYMENT AND
RETIRE EFFECTIVE AS OF JUNE 1, 2005 (THE “TERMINATION DATE”);

 

WHEREAS, IN CONNECTION WITH THE EXECUTIVE’S TERMINATION OF EMPLOYMENT, THE
COMPANY IS WILLING TO PROVIDE CERTAIN BENEFITS TO THE EXECUTIVE, PROVIDED THAT
THE EXECUTIVE (I) EXECUTES AND DOES NOT TIMELY REVOKE THIS AGREEMENT AND A
WAIVER AND RELEASE, IN THE FORM ATTACHED TO THIS AGREEMENT AS EXHIBIT A (THE
“WAIVER AND RELEASE”) OF ALL CLAIMS THAT THE EXECUTIVE MIGHT ASSERT AGAINST THE
COMPANY, ITS PARENT COMPANY, ANY OF THEIR SUBSIDIARIES AND/OR AFFILIATED
ENTITIES, AND ANY SUCCESSORS OR ASSIGNS TO THE FOREGOING (COLLECTIVELY,
“CINERGY”) AND CERTAIN RELATED ENTITIES AND INDIVIDUALS AS SET FORTH THEREIN AND
(II) COMPLIES WITH HIS OBLIGATIONS HEREUNDER; AND

 

WHEREAS, THE PARTIES HAVE AGREED TO ENTER INTO THIS AGREEMENT, WHICH HAS BEEN
SPECIFICALLY NEGOTIATED BETWEEN THE EXECUTIVE AND CINERGY.

 

NOW, THEREFORE, THE COMPANY AND THE EXECUTIVE ENTER INTO THE FOLLOWING
AGREEMENT:

 

Agreement

 

1.             RETIREMENT.

 

A.             TERMINATION OF EMPLOYMENT.  THE EXECUTIVE WILL RETIRE, AND HIS
EMPLOYMENT WITH CINERGY WILL TERMINATE, EFFECTIVE AS OF THE CLOSE OF BUSINESS ON
THE TERMINATION DATE.

 

B.             EFFECT ON OTHER AGREEMENTS.  EFFECTIVE AS OF THE TERMINATION
DATE, THIS AGREEMENT WILL REPLACE AND SUPERSEDE ANY AND ALL PRIOR EMPLOYMENT,
SEPARATION AND RETIREMENT AGREEMENTS BETWEEN CINERGY AND THE EXECUTIVE,
INCLUDING BUT NOT LIMITED TO THE EMPLOYMENT AGREEMENT BETWEEN THE EXECUTIVE AND
CINERGY DATED AS OF OCTOBER 11, 2002 (THE “EMPLOYMENT AGREEMENT”); PROVIDED,
HOWEVER, THAT SECTION 3(B)(II) OF THE EMPLOYMENT AGREEMENT, AND EACH PROVISION
OF THE EMPLOYMENT AGREEMENT THAT DEFINES ANY DEFINED TERM THAT IS USED IN
SECTION 3(B)(II) OF THE EMPLOYMENT AGREEMENT, BUT ONLY WITH RESPECT TO SUCH
DEFINITION, SHALL REMAIN IN FULL FORCE AND EFFECT.  NOTWITHSTANDING THE
FOREGOING, THE SUPPLEMENTAL RETIREMENT BENEFIT PROVIDED UNDER SECTION 3(B)(II)
OF THE EMPLOYMENT AGREEMENT SHALL BE CALCULATED AS IF THE EXECUTIVE RETIRED ON
FEBRUARY 1, 2005 IF SUCH RETIREMENT DATE WOULD RESULT IN THE EXECUTIVE RECEIVING
A LARGER SUPPLEMENTAL RETIREMENT BENEFIT THAN IF HE RETIRED ON THE FIRST
POTENTIAL RETIREMENT DATE FOLLOWING THE TERMINATION DATE; PROVIDED, HOWEVER,
THAT CONSISTENT WITH Q&A-18(B) OF IRS NOTICE 2005-1, ANY ADDITIONAL BENEFIT TO
WHICH THE EXECUTIVE IS ENTITLED PURSUANT TO THIS SENTENCE (I) SHALL BE TREATED
AS A

 

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“MATERIAL MODIFICATION” OF SECTION 3(B)(II) OF THE EMPLOYMENT AGREEMENT ONLY TO
THE EXTENT OF SUCH ADDITIONAL BENEFIT, AND (II) SHALL BE ADMINISTERED AND
DISTRIBUTED IN A MANNER THAT COMPLIES WITH THE PROVISIONS OF SECTION 409A OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, SO AS TO PREVENT THE INCLUSION IN
GROSS INCOME OF SUCH ADDITIONAL BENEFIT IN A TAXABLE YEAR THAT IS PRIOR TO THE
TAXABLE YEAR OR YEARS IN WHICH SUCH BENEFIT WOULD OTHERWISE ACTUALLY BE
DISTRIBUTED OR MADE AVAILABLE TO THE EXECUTIVE OR HIS BENEFICIARIES.

 

2.             CONSIDERATION.  IN EXCHANGE FOR ENTERING INTO THIS AGREEMENT AND
SATISFYING THE CONDITIONS SET FORTH HEREIN, THE EXECUTIVE WILL RECEIVE THE
FOLLOWING CONSIDERATION.  THE BENEFITS DESCRIBED BELOW IN THIS SECTION ONLY
SHALL BE PROVIDED TO THE EXECUTIVE IF HE SATISFIES EACH OF THE CONDITIONS
SPECIFIED BELOW AND, UPON PRESENTATION TO THE EXECUTIVE, THE EXECUTIVE TIMELY
EXECUTES AND DOES NOT TIMELY REVOKE THE WAIVER AND RELEASE.  NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY, CINERGY MAY WITHHOLD FROM ANY AMOUNTS PAYABLE
UNDER THIS AGREEMENT SUCH FEDERAL, STATE, LOCAL OR OTHER TAXES AS IT REASONABLY
DETERMINES ARE REQUIRED TO BE WITHHELD PURSUANT TO ANY APPLICABLE LAW OR
REGULATION.

 

A.             CONSULTING ARRANGEMENT.  IN CONSIDERATION FOR PERFORMING THE
CONSULTING SERVICES SPECIFIED IN SECTION 7, THE EXECUTIVE SHALL BE PROVIDED A
RETAINER IN THE AMOUNT OF $1,200,000, PAYABLE IN A SINGLE LUMP SUM AS SOON AS
REASONABLY PRACTICABLE AFTER THE EXPIRATION OF THE REVOCATION PERIOD DESCRIBED
IN THE WAIVER AND RELEASE.

 

B.             RESTRICTIVE COVENANTS.  IN CONSIDERATION FOR SATISFYING HIS
OBLIGATIONS PURSUANT TO SECTION 9(B), THE EXECUTIVE SHALL BE PROVIDED A PAYMENT
IN THE AMOUNT OF $1,500,000, PAYABLE IN A SINGLE LUMP SUM AS SOON AS REASONABLY
PRACTICABLE AFTER THE EXPIRATION OF THE REVOCATION PERIOD DESCRIBED IN THE
WAIVER AND RELEASE.

 

C.             RETIREMENT BENEFITS.  IN CONSIDERATION FOR SATISFYING ALL OF HIS
OBLIGATIONS UNDER THIS AGREEMENT OTHER THAN THOSE CONTAINED IN SECTIONS 7 AND
9(B), INCLUDING BUT NOT LIMITED TO THOSE CONTAINED IN SECTIONS 8, 9(C), 10, 11
AND 13, THE BENEFITS DESCRIBED BELOW IN THIS SECTION 2(C) SHALL BE PROVIDED TO
THE EXECUTIVE IN A SINGLE LUMP SUM AS SOON AS REASONABLY PRACTICABLE AFTER THE
EXPIRATION OF THE REVOCATION PERIOD DESCRIBED IN THE WAIVER AND RELEASE.

 

I.              LUMP SUM PAYMENT.  CINERGY AGREES TO PAY THE EXECUTIVE A LUMP
SUM CASH PAYMENT EQUAL TO $1,659,241.  THE EXECUTIVE ACKNOWLEDGES AND AGREES
THAT THE AMOUNT LISTED IN THE PRECEDING SENTENCE INCLUDES ANY AMOUNT TO WHICH HE
WOULD OTHERWISE BE ENTITLED UNDER THE CINERGY CORP. ANNUAL INCENTIVE PLAN FOR
THE 2005 PERFORMANCE PERIOD AND FOR ACCRUED VACATION PAY.

 

II.             RELOCATION BENEFITS.  THE EXECUTIVE WILL BE ENTITLED TO
REIMBURSEMENT FROM CINERGY FOR THE REASONABLE COSTS OF RELOCATING FROM THE
CINCINNATI, OHIO, AREA TO A NEW PRIMARY RESIDENCE IN A MANNER THAT IS CONSISTENT
WITH THE TERMS OF CINERGY’S RELOCATION PROGRAM.  NOTWITHSTANDING THE FOREGOING,
IF THE EXECUTIVE BECOMES EMPLOYED BY ANOTHER EMPLOYER AND IS ELIGIBLE TO RECEIVE
RELOCATION BENEFITS UNDER ANOTHER EMPLOYER-PROVIDED PLAN, ANY BENEFITS PROVIDED
TO THE EXECUTIVE HEREUNDER WILL BE SECONDARY TO THOSE PROVIDED UNDER THE OTHER
EMPLOYER-PROVIDED RELOCATION PLAN.  THE EXECUTIVE MUST REPORT TO CINERGY ANY
SUCH RELOCATION BENEFITS THAT HE ACTUALLY RECEIVES UNDER ANOTHER
EMPLOYER-PROVIDED PLAN.

 

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3.             BASIS FOR ENTITLEMENT.  THE EXECUTIVE ACKNOWLEDGES THAT HE WOULD
NOT BE ENTITLED TO THE BENEFITS DESCRIBED IN SECTION 2 OF THIS AGREEMENT ABSENT
HIS TERMINATION OF EMPLOYMENT, HIS EXECUTION OF THIS AGREEMENT AND THE WAIVER
AND RELEASE AND HIS SATISFACTION OF HIS OBLIGATIONS UNDER THIS AGREEMENT.

 

4.             ADEQUATE CONSIDERATION.  THE EXECUTIVE AGREES THAT THE BENEFITS
DESCRIBED IN THIS AGREEMENT CONSTITUTE GOOD, VALUABLE AND SUFFICIENT
CONSIDERATION FOR THE OBLIGATIONS THE EXECUTIVE ASSUMES HEREIN AND IN THE WAIVER
AND RELEASE.  THE BENEFITS OFFERED IN EXCHANGE FOR THE EXECUTIVE’S EXECUTION OF
THIS AGREEMENT AND THE WAIVER AND RELEASE EXCEED IN KIND AND SCOPE THAT TO WHICH
THE EXECUTIVE WOULD HAVE OTHERWISE BEEN LEGALLY ENTITLED.

 

5.             FUTURE EMPLOYMENT.  THE EXECUTIVE WAIVES ANY RIGHT TO ASSERT ANY
CLAIM OR DEMAND FOR REEMPLOYMENT WITH CINERGY.  THE EXECUTIVE, HOWEVER, MAY
ACCEPT AN OFFER OF REEMPLOYMENT WITH CINERGY IN THE EVENT SUCH AN OFFER IS MADE.

 

6.             ACKNOWLEDGEMENT.  THE EXECUTIVE ACKNOWLEDGES AND AGREES THAT IT
IS THE POLICY OF CINERGY TO COMPLY WITH ALL APPLICABLE FEDERAL, STATE AND LOCAL
LAWS AND REGULATIONS.  THE EXECUTIVE AFFIRMS THAT HE HAS REPORTED ALL COMPLIANCE
ISSUES AND VIOLATIONS OF FEDERAL, STATE AND LOCAL LAW OR REGULATION OR CINERGY
POLICY OF WHICH HE HAD KNOWLEDGE DURING THE TERM OF HIS EMPLOYMENT, IF ANY.  THE
EXECUTIVE REPRESENTS AND ACKNOWLEDGES THAT HE HAS NO FURTHER OR ADDITIONAL
KNOWLEDGE OR INFORMATION REGARDING COMPLIANCE ISSUES OR POSSIBLE VIOLATIONS OF
FEDERAL, STATE OR LOCAL LAW OR REGULATIONS OR CINERGY POLICY OTHER THAN WHAT THE
EXECUTIVE MAY HAVE PREVIOUSLY RAISED, IF ANY.

 

7.             CONSULTING ARRANGEMENT.

 

A.             THE EXECUTIVE AGREES TO SERVE AS A BUSINESS CONSULTANT TO CINERGY
FOR A PERIOD OF THREE (3) YEARS BEGINNING ON THE TERMINATION DATE (THE
“CONSULTING PERIOD”).  THE CONSULTING SERVICES WILL BE PERFORMED AT REASONABLE
TIMES WHEN AND AS NEEDED, AS DETERMINED BY MUTUAL AGREEMENT BETWEEN CINERGY AND
THE EXECUTIVE.

 

B.             THE CONSULTING SERVICES TO BE PROVIDED BY THE EXECUTIVE DURING
THE CONSULTING PERIOD WILL CONSIST OF CONSULTATION WITH, AND ADVICE TO, THE
OFFICERS AND MANAGERIAL EMPLOYEES OF CINERGY, AS REQUESTED BY CINERGY, ON
MATTERS RELATING TO CINERGY’S BUSINESS AFFAIRS ABOUT WHICH THE EXECUTIVE HAS
KNOWLEDGE AND EXPERIENCE, AND SHALL INCLUDE BUT NOT BE LIMITED TO THE FOLLOWING.

 

i.              General strategic issues, including mergers and acquisitions.

 

ii.             Strategic environmental issues and regulatory relations,
including state and federal regulatory matters and Cinergy’s policies relating
to new environmental regulations and laws, carbon compliance and coal
gasification.

 

iii.            Mentoring and executive development oversight.

 

C.             THE PARTIES ACKNOWLEDGE THAT THE EXECUTIVE (I) HAS UNIQUE AND
VALUABLE EXPERTISE RELATING TO CINERGY’S PROVISION OF BROADBAND OVER POWERLINE
SERVICES (“BPL SERVICES”), (II) IS CURRENTLY A MEMBER OF THE BOARD AND AUDIT
COMMITTEE OF CURRENT COMMUNICATIONS GROUP, LLC AND (III) IS CURRENTLY A MEMBER
OF THE BOARDS OF ACCESS BROADBAND, LLC AND CCB COMMUNICATIONS, LLC.  THE
EXECUTIVE AGREES THAT THE CONSULTING SERVICES THAT HE SHALL PROVIDE DURING THE
CONSULTING PERIOD MAY INCLUDE OVERSEEING CINERGY’S

 

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DEPLOYMENT OF BPL SERVICES IN CINERGY’S SERVICE TERRITORY AND ELSEWHERE THROUGH
CINERGY’S INVESTMENT IN ACCESS BROADBAND, LLC AND CCB COMMUNICATIONS, LLC.

 

D.             THE PARTIES UNDERSTAND AND AGREE THAT ALL OF THE CONSULTING
SERVICES TO BE PROVIDED BY THE EXECUTIVE UNDER THIS AGREEMENT WILL BE PERFORMED
BY HIM AS AN INDEPENDENT CONTRACTOR AND NOT AS AN EMPLOYEE OF CINERGY.  THE
EXECUTIVE WILL NOT HAVE ANY AUTHORITY TO ACT AS AN AGENT OR REPRESENTATIVE OF
CINERGY, EXCEPT TO THE EXTENT EXPRESSLY AUTHORIZED IN WRITING BY CINERGY.  THE
EXECUTIVE WILL PERFORM HIS CONSULTING SERVICES TO THE BEST OF HIS ABILITIES. 
THE EXECUTIVE’S DUTIES PURSUANT TO THIS SECTION ARE PURELY THOSE OF A
CONSULTANT, AND CINERGY IS FREE TO ACCEPT OR REJECT HIS ADVICE, AS IT DEEMS
APPROPRIATE.  CINERGY IS RESPONSIBLE FOR ALL ACTIONS IT CHOOSES TO TAKE BASED ON
THE EXECUTIVE’S ADVICE, AND CINERGY AGREES TO INDEMNIFY AND HOLD THE EXECUTIVE
HARMLESS FOR THE RESULTS OF THOSE ACTIONS, INCLUDING ALL LOSSES AND DAMAGES
RESULTING FROM ANY LEGAL OR REGULATORY ACTION.

 

E.             CINERGY WILL REIMBURSE THE EXECUTIVE FOR ALL EXPENSES AUTHORIZED
BY CINERGY AND INCURRED BY THE EXECUTIVE IN THE PERFORMANCE OF CONSULTING
SERVICES DURING THE CONSULTING PERIOD, INCLUDING BUT NOT LIMITED TO TELEPHONE,
DUPLICATION, SECRETARIAL SERVICES, MAIL AND COURIER SERVICES, AND NORMAL
SUPPLIES THAT MAY REASONABLY BE REQUIRED.  REIMBURSEMENT WILL BE MADE WITHIN
THIRTY (30) DAYS OF CINERGY’S RECEIPT OF REASONABLE AND CUSTOMARY
DOCUMENTATION.  FOR ANY TRAVEL REQUESTED AND AUTHORIZED BY CINERGY, THE
EXECUTIVE WILL BE REIMBURSED FOR ALL REASONABLE AND CUSTOMARY EXPENSES,
INCLUDING TRANSPORTATION, PARKING, FOOD, AND LODGING.

 

F.              NOTHING IN THIS SECTION WILL (I) PROHIBIT THE EXECUTIVE FROM
SEEKING OR ACCEPTING OTHER EMPLOYMENT, ENGAGING IN ANY OTHER CONSULTING
SERVICES, OR PARTICIPATING IN ANY OTHER ENDEAVOR FOR PROFIT, AS HE DEEMS
APPROPRIATE, PROVIDED THAT, IN SO DOING, HE DOES NOT BREACH ANY OF HIS OTHER
OBLIGATIONS UNDER THIS AGREEMENT OR (II) BE CONSTRUED AS REQUIRING THE EXECUTIVE
TO RESIDE OR WORK NEAR CINERGY’S HEADQUARTERS.

 

8.             NONDISCLOSURE OF CONFIDENTIAL INFORMATION.  THE EXECUTIVE
ACKNOWLEDGES THAT THE INFORMATION, OBSERVATIONS AND DATA OBTAINED BY HIM WHILE
EMPLOYED BY CINERGY CONCERNING THE BUSINESS OR AFFAIRS OF CINERGY (UNLESS AND
EXCEPT TO THE EXTENT THE FOREGOING BECOME GENERALLY KNOWN TO AND AVAILABLE FOR
USE BY THE PUBLIC OTHER THAN AS A RESULT OF THE EXECUTIVE’S ACTS OR OMISSIONS TO
ACT) (HEREINAFTER DEFINED AS “CONFIDENTIAL INFORMATION”) ARE THE PROPERTY OF
CINERGY AND HE WAS AND IS REQUIRED TO HOLD IN A FIDUCIARY CAPACITY ALL
CONFIDENTIAL INFORMATION OBTAINED BY HIM WHILE EMPLOYED BY CINERGY FOR THE
BENEFIT OF CINERGY AS WELL AS THE SUCCESSORS AND ASSIGNS THEREOF.  THEREFORE,
THE EXECUTIVE AGREES THAT HE SHALL NOT DISCLOSE ANY CONFIDENTIAL INFORMATION
WITHOUT THE PRIOR WRITTEN CONSENT OF THE CHIEF LEGAL OFFICER OR THE CHIEF
EXECUTIVE OFFICER OF CINERGY CORP. (WHICH MAY BE WITHHELD FOR ANY REASON OR NO
REASON) UNLESS AND EXCEPT TO THE EXTENT THAT SUCH DISCLOSURE IS REQUIRED BY ANY
SUBPOENA OR OTHER LEGAL PROCESS (IN WHICH EVENT THE EXECUTIVE WILL GIVE THE
CHIEF LEGAL OFFICER OF CINERGY CORP. PROMPT NOTICE OF SUCH SUBPOENA OR OTHER
LEGAL PROCESS IN ORDER TO PERMIT CINERGY TO SEEK APPROPRIATE PROTECTIVE ORDERS),
AND THAT HE SHALL NOT USE ANY CONFIDENTIAL INFORMATION FOR HIS OWN ACCOUNT
WITHOUT THE PRIOR WRITTEN CONSENT OF THE CHIEF EXECUTIVE OFFICER OF CINERGY
CORP. (WHICH MAY BE WITHHELD FOR ANY REASON OR NO REASON).  AS SOON AS
PRACTICABLE FOLLOWING THE LAST DAY OF THE CONSULTING PERIOD, THE EXECUTIVE SHALL
DELIVER TO THE COMPANY TO THE ATTENTION OF MR. TIMOTHY VERHAGEN, VICE PRESIDENT,
HUMAN RESOURCES, CINERGY CORP., 221 EAST FOURTH STREET, 30 AT II, CINCINNATI,
OHIO 45202, ALL MEMORANDA, NOTES, PLANS, RECORDS, REPORTS, COMPUTER TAPES AND
SOFTWARE AND OTHER DOCUMENTS AND DATA (AND COPIES THEREOF) RELATING TO THE
CONFIDENTIAL INFORMATION, OR TO THE WORK PRODUCT OR THE BUSINESS OF CINERGY
WHICH HE MAY POSSESS OR HAVE UNDER HIS CONTROL.  THE EXECUTIVE’S

 

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OBLIGATIONS UNDER THIS SECTION ARE IN ADDITION TO, AND NOT IN LIMITATION OF OR
PREEMPTION OF, ALL OTHER OBLIGATIONS OF CONFIDENTIALITY WHICH THE EXECUTIVE MAY
HAVE TO CINERGY UNDER GENERAL LEGAL OR EQUITABLE PRINCIPLES, AND FEDERAL, STATE
OR LOCAL LAW.

 

9.             NON-SOLICITATION, NON-COMPETITION AND NON-DISPARAGEMENT.

 

A.             IN GENERAL.  THE EXECUTIVE ACKNOWLEDGES THAT IN THE COURSE OF HIS
EMPLOYMENT WITH CINERGY HE MAY HAVE BECOME FAMILIAR WITH TRADE SECRETS AND
CUSTOMER LISTS OF, AND OTHER CONFIDENTIAL INFORMATION CONCERNING, CINERGY AND
THAT HIS SERVICES HAVE BEEN OF SPECIAL, UNIQUE AND EXTRAORDINARY VALUE TO
CINERGY.

 

B.             NON-SOLICITATION AND NON-COMPETITION.  THE EXECUTIVE AGREES THAT
DURING THE CONSULTING PERIOD HE WILL NOT IN ANY MANNER, DIRECTLY OR INDIRECTLY,
INDUCE OR ATTEMPT TO INDUCE ANY EMPLOYEE OF CINERGY TO QUIT OR ABANDON HIS OR
HER EMPLOY.  THE EXECUTIVE AGREES THAT AT NO TIME DURING THE CONSULTING PERIOD
WILL HE: (I) BECOME EMPLOYED BY, ENTER INTO A CONSULTING ARRANGEMENT WITH, OR
OTHERWISE AGREE TO PERFORM PERSONAL SERVICES FOR, A COMPETITOR, (II) ACQUIRE AN
OWNERSHIP INTEREST IN A COMPETITOR, PROVIDED THAT THE EXECUTIVE MAY, FOR
INVESTMENT PURPOSES, OWN NOT MORE THAN 3% OF THE OUTSTANDING STOCK OF ANY CLASS
OF A COMPETITOR THAT IS PUBLICLY TRADED, OR (III) SOLICIT ANY CUSTOMERS OR
VENDORS OF CINERGY ON BEHALF OF OR FOR THE BENEFIT OF A COMPETITOR OR OTHERWISE
CALL ON, SERVICE OR SOLICIT COMPETING BUSINESS FROM CUSTOMERS OF CINERGY.  FOR
PURPOSES OF THIS AGREEMENT, THE TERM “COMPETITOR” MEANS ANY PERSON OR ENTITY
THAT SELLS GOODS OR SERVICES THAT ARE DIRECTLY COMPETITIVE WITH THOSE SOLD BY A
BUSINESS THAT (1) IS BEING CONDUCTED BY CINERGY AT THE TIME IN QUESTION OR (2)
WAS BEING CONDUCTED BY CINERGY ON THE TERMINATION DATE. NOTWITHSTANDING ANYTHING
IN THE PRECEDING SENTENCE, GOODS OR SERVICES WILL NOT BE DEEMED TO BE
COMPETITIVE WITH THOSE OF CINERGY SOLELY AS A RESULT OF THE EXECUTIVE BEING
EMPLOYED BY OR OTHERWISE ASSOCIATED WITH A BUSINESS THAT IS IN COMPETITION WITH
CINERGY BUT AS TO WHICH THE EXECUTIVE DOES NOT HAVE DIRECT OR INDIRECT
RESPONSIBILITIES FOR THE PRODUCTS OR SERVICES INVOLVED.

 

C.             NON-DISPARAGEMENT.  EXCEPT AS REQUIRED BY SUBPOENA OR OTHER LEGAL
PROCESS (IN WHICH EVENT THE EXECUTIVE WILL GIVE THE CHIEF LEGAL OFFICER OF
CINERGY CORP. PROMPT NOTICE OF SUCH SUBPOENA OR OTHER LEGAL PROCESS IN ORDER TO
PERMIT CINERGY OR ANY AFFECTED INDIVIDUAL TO SEEK APPROPRIATE PROTECTIVE
ORDERS), THE EXECUTIVE FURTHER AGREES THAT HE WILL REFRAIN FROM PUBLISHING OR
PROVIDING ANY ORAL OR WRITTEN STATEMENTS ABOUT CINERGY, ANY OF ITS CURRENT OR
FORMER OFFICERS, EXECUTIVES, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES OR
ANY INITIATIVE, PROGRAM OR POLICY OF CINERGY RELATING TO ANY MATTER WHATSOEVER
THAT ARE DISPARAGING, SLANDEROUS, LIBELOUS OR DEFAMATORY, OR THAT DISCLOSE
PRIVATE OR CONFIDENTIAL INFORMATION ABOUT THEIR BUSINESS AFFAIRS, OR THAT
CONSTITUTE AN INTRUSION INTO THEIR PRIVATE LIVES, OR THAT GIVE RISE TO
UNREASONABLE PUBLICITY ABOUT THEIR PRIVATE LIVES, OR THAT PLACE THEM IN A FALSE
LIGHT BEFORE THE PUBLIC, OR THAT CONSTITUTE A MISAPPROPRIATION OF THEIR NAME OR
LIKENESS.  EXCEPT AS REQUIRED BY SUBPOENA OR OTHER LEGAL PROCESS (IN WHICH EVENT
CINERGY WILL GIVE THE EXECUTIVE PROMPT NOTICE OF SUCH SUBPOENA OR OTHER LEGAL
PROCESS IN ORDER TO PERMIT THE EXECUTIVE TO SEEK APPROPRIATE PROTECTIVE ORDERS),
CINERGY FURTHER AGREES TO REFRAIN FROM PUBLISHING OR PROVIDING ANY ORAL OR
WRITTEN STATEMENTS ABOUT THE EXECUTIVE THAT ARE DISPARAGING, SLANDEROUS,
LIBELOUS OR DEFAMATORY, OR THAT DISCLOSE PRIVATE OR CONFIDENTIAL INFORMATION
ABOUT HIS BUSINESS AFFAIRS, OR THAT CONSTITUTE AN INTRUSION INTO HIS PRIVATE
LIFE, OR THAT GIVE RISE TO UNREASONABLE PUBLICITY ABOUT HIS PRIVATE LIFE, OR
THAT PLACE HIM IN A FALSE LIGHT BEFORE THE PUBLIC, OR THAT CONSTITUTE A
MISAPPROPRIATION OF HIS NAME OR LIKENESS.

 

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D.             REVISION.  IF, AT THE TIME OF ENFORCEMENT OF THIS SECTION, A
COURT HOLDS THAT THE RESTRICTIONS STATED HEREIN ARE UNREASONABLE UNDER
CIRCUMSTANCES THEN EXISTING, THE PARTIES HERETO AGREE THAT THE MAXIMUM PERIOD OR
SCOPE REASONABLE UNDER SUCH CIRCUMSTANCES WILL BE SUBSTITUTED FOR THE STATED
PERIOD OR SCOPE AND THAT THE COURT WILL BE ALLOWED TO REVISE THE RESTRICTIONS
CONTAINED HEREIN TO COVER THE MAXIMUM PERIOD OR SCOPE PERMITTED BY LAW.  THE
PARTIES ACKNOWLEDGE THAT ANY ALLEGED BREACH OF THIS SECTION COULD RESULT IN A
CLAIM FOR LEGAL AND/OR EQUITABLE DAMAGES BY THE AGGRIEVED PARTY.

 

10.           COOPERATION WITH LITIGATION.  UPON THE COMPANY’S REQUEST, THE
EXECUTIVE AGREES TO RENDER REASONABLE ASSISTANCE TO CINERGY IN CONNECTION WITH
ANY LITIGATION OR INVESTIGATION RELATING TO CINERGY’S BUSINESS, PROVIDED THAT
RENDERING SUCH ASSISTANCE DOES NOT IMPOSE AN UNREASONABLE BURDEN ON THE
EXECUTIVE OR INTERFERE IN ANY SIGNIFICANT RESPECT WITH THE EXECUTIVE’S
EMPLOYMENT OR OTHER BUSINESS PURSUITS FOLLOWING THE TERMINATION DATE.  SUCH
ASSISTANCE SHALL INCLUDE, BUT NOT BE LIMITED TO, PROVIDING TRUTHFUL INFORMATION,
ATTENDING MEETINGS, ASSISTING WITH INTERROGATORIES, GIVING DEPOSITIONS AND
MAKING COURT APPEARANCES.  THE EXECUTIVE AGREES TO PROMPTLY NOTIFY THE CHIEF
LEGAL OFFICER OF CINERGY CORP. OF ANY REQUESTS FOR INFORMATION OR TESTIMONY THAT
THE EXECUTIVE RECEIVES IN CONNECTION WITH ANY LITIGATION OR INVESTIGATION
RELATING TO CINERGY’S BUSINESS.  THE COMPANY AGREES TO PAY REASONABLE
COMPENSATION TO THE EXECUTIVE FOR THE EXECUTIVE’S ASSISTANCE IN CONNECTION WITH
ANY LITIGATION OR INVESTIGATION RELATING TO CINERGY’S BUSINESS, BUT ONLY IF SUCH
ASSISTANCE IS PROVIDED AFTER THE END OF THE CONSULTING PERIOD.

 

11.           INTELLECTUAL PROPERTY.  THE EXECUTIVE ACKNOWLEDGES THAT ANY AND
ALL WRITING, DOCUMENTS, INVENTIONS (WHETHER OR NOT PATENTABLE), DISCOVERIES,
TRADE SECRETS, COMPUTER PROGRAMS OR INSTRUCTIONS (WHETHER IN SOURCE CODE, OBJECT
CODE, OR ANY OTHER FORM), ALGORITHMS, FORMULAE, PLANS, CUSTOMER LISTS,
MEMORANDA, TESTS, RESEARCH, DESIGNS, SPECIFICATIONS, MODELS, DATA, DIAGRAMS,
FLOW CHARTS, AND/OR TECHNIQUES (WHETHER REDUCED TO WRITTEN FORM OR OTHERWISE)
THAT THE EXECUTIVE MADE, CONCEIVED, DISCOVERED, OR DEVELOPED, EITHER SOLELY OR
JOINTLY WITH ANY OTHER PERSON, AT ANY TIME DURING THE TERM OF HIS EMPLOYMENT,
WHETHER DURING WORKING HOURS OR AT CINERGY’S FACILITIES OR AT ANY OTHER TIME OR
LOCATION, AND WHETHER UPON THE REQUEST OR SUGGESTION OF CINERGY OR OTHERWISE,
THAT RELATE TO OR ARE USEFUL IN ANY WAY IN CONNECTION WITH ANY BUSINESS CARRIED
ON BY CINERGY (COLLECTIVELY, “INTELLECTUAL WORK PRODUCT”) WILL BE THE SOLE AND
EXCLUSIVE PROPERTY OF CINERGY.  THE EXECUTIVE WILL PROMPTLY AND FULLY DISCLOSE
ALL INTELLECTUAL WORK PRODUCT TO CINERGY.  ANY INTELLECTUAL WORK PRODUCT NOT
GENERALLY KNOWN TO AND AVAILABLE FOR USE BY THE PUBLIC SHALL BE CONSIDERED TO BE
CONFIDENTIAL INFORMATION AS DEFINED HEREIN.  THE EXECUTIVE ACKNOWLEDGES THAT ALL
INTELLECTUAL WORK PRODUCT THAT IS COPYRIGHTABLE WILL BE CONSIDERED A WORK MADE
FOR HIRE UNDER UNITED STATES COPYRIGHT LAW.  TO THE EXTENT THAT ANY
COPYRIGHTABLE INTELLECTUAL WORK PRODUCT MAY NOT BE CONSIDERED A WORK MADE FOR
HIRE UNDER THE APPLICABLE PROVISIONS OF THE COPYRIGHT LAW, OR TO THE EXTENT
THAT, NOTWITHSTANDING THE FOREGOING PROVISIONS, THE EXECUTIVE MAY RETAIN AN
INTEREST IN ANY INTELLECTUAL WORK PRODUCT THAT IS NOT COPYRIGHTABLE, THE
EXECUTIVE HEREBY IRREVOCABLY ASSIGNS AND TRANSFERS TO CINERGY ANY AND ALL RIGHT,
TITLE, OR INTEREST THAT THE EXECUTIVE MAY HAVE IN THE INTELLECTUAL WORK PRODUCT
UNDER COPYRIGHT, PATENT, TRADE SECRET AND TRADEMARK LAW, IN PERPETUITY OR FOR
THE LONGEST PERIOD OTHERWISE PERMITTED BY LAW, WITHOUT THE NECESSITY OF FURTHER
CONSIDERATION.  CINERGY WILL BE ENTITLED TO OBTAIN AND HOLD IN ITS OWN NAME ALL
COPYRIGHTS, PATENTS, TRADE SECRETS AND TRADEMARKS WITH RESPECT THERETO.  AT THE
SOLE REQUEST AND EXPENSE OF CINERGY, THE EXECUTIVE WILL ASSIST CINERGY IN
ACQUIRING AND MAINTAINING COPYRIGHT, PATENT, TRADE SECRET AND TRADEMARK
PROTECTION UPON, AND CONFIRMING ITS TITLE TO, SUCH INTELLECTUAL WORK PRODUCT. 
THE EXECUTIVE’S ASSISTANCE WILL INCLUDE SIGNING ALL APPLICATIONS

 

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FOR COPYRIGHT AND PATENT APPLICATIONS AND OTHER PAPERS, COOPERATING IN LEGAL
PROCEEDINGS AND TAKING ANY OTHER STEPS CONSIDERED DESIRABLE BY CINERGY.

 

12.           BREACH OF THIS AGREEMENT.  BECAUSE THE EXECUTIVE’S SERVICES ARE
UNIQUE AND BECAUSE THE EXECUTIVE HAS ACCESS TO CONFIDENTIAL INFORMATION AND
INTELLECTUAL WORK PRODUCT, THE PARTIES AGREE THAT CINERGY WOULD BE DAMAGED
IRREPARABLY IN THE EVENT ANY OF THE PROVISIONS OF SECTIONS 8, 9, 10, 11 AND 13
WERE NOT PERFORMED IN ACCORDANCE WITH THEIR SPECIFIC TERMS OR WERE OTHERWISE
BREACHED AND THAT MONEY DAMAGES WOULD BE AN INADEQUATE REMEDY FOR ANY SUCH
NON-PERFORMANCE OR BREACH.  IN THE EVENT THAT THE EXECUTIVE BREACHES OR
THREATENS TO BREACH ANY PROVISION OF THIS AGREEMENT OR THE WAIVER AND RELEASE,
THE EXECUTIVE AGREES THAT CINERGY SHALL BE ENTITLED TO SEEK ANY AND ALL
EQUITABLE AND LEGAL RELIEF PROVIDED BY LAW, SPECIFICALLY INCLUDING IMMEDIATE AND
PERMANENT INJUNCTIVE RELIEF TO PREVENT ANY BREACH OR THREATENED BREACH OF ANY OF
SUCH PROVISIONS AND TO ENFORCE SUCH PROVISIONS SPECIFICALLY (WITHOUT POSTING A
BOND OR OTHER SECURITY).  THE EXECUTIVE HEREBY WAIVES ANY CLAIM THAT CINERGY HAS
AN ADEQUATE REMEDY AT LAW.  IN ADDITION, AND TO THE EXTENT NOT PROHIBITED BY
LAW, THE EXECUTIVE AGREES THAT CINERGY SHALL BE ENTITLED TO AN AWARD OF ALL
COSTS AND ATTORNEYS’ FEES REASONABLY INCURRED BY CINERGY IN ANY SUCCESSFUL
EFFORT TO ENFORCE THE TERMS OF THIS AGREEMENT.  THE EXECUTIVE AGREES THAT THE
FOREGOING RELIEF SHALL NOT BE CONSTRUED TO LIMIT OR OTHERWISE RESTRICT CINERGY’S
ABILITY TO PURSUE ANY OTHER REMEDY PROVIDED BY LAW, INCLUDING THE RECOVERY OF
ANY ACTUAL, COMPENSATORY OR PUNITIVE DAMAGES.  MOREOVER, IF THE EXECUTIVE
PURSUES ANY CLAIMS THAT HE HAS WAIVED IN THE WAIVER AND RELEASE OR OTHERWISE
BREACHES THIS AGREEMENT, (I) THE EXECUTIVE AGREES TO IMMEDIATELY REIMBURSE THE
COMPANY FOR ALL AMOUNTS RECEIVED BY THE EXECUTIVE PURSUANT TO THIS AGREEMENT TO
THE FULLEST EXTENT PERMITTED BY LAW, AND (II) THE COMPANY WILL BE RELIEVED OF
ANY AND ALL OBLIGATIONS TO MAKE FUTURE PAYMENTS TO THE EXECUTIVE PURSUANT TO
THIS AGREEMENT.

 

13.           RETURN OF CORPORATE PROPERTY.  EXCEPT AS OTHERWISE PROVIDED IN
THIS AGREEMENT, THE EXECUTIVE AGREES TO RETURN TO CINERGY ALL KEYS,
IDENTIFICATION BADGES, ELECTRONIC PASSES, CREDIT CARDS, COMPUTER PROGRAMS, AND
OTHER PROPERTY BELONGING TO CINERGY WHEN REQUESTED AND TO DO SO BY CINERGY’S
REPRESENTATIVE.

 

14.           CONTINUING OBLIGATIONS.  THE EXECUTIVE HEREBY AFFIRMS AND
ACKNOWLEDGES THE EXECUTIVE’S CONTINUING OBLIGATIONS TO COMPLY WITH THE
POST-TERMINATION COVENANTS CONTAINED IN THIS AGREEMENT, INCLUDING, BUT NOT
LIMITED TO, THE PROVISIONS OF SECTIONS 7, 8, 9, 10, 11, 12 AND 13 OF THIS
AGREEMENT AND THE WAIVER AND RELEASE.  THE EXECUTIVE ACKNOWLEDGES THAT THE
RESTRICTIONS CONTAINED THEREIN ARE VALID AND REASONABLE IN EVERY RESPECT, ARE
NECESSARY TO PROTECT CINERGY’S LEGITIMATE BUSINESS INTERESTS AND HEREBY
AFFIRMATIVELY WAIVES ANY CLAIM OR DEFENSE TO THE CONTRARY.

 

15.           NO ADMISSION OF LIABILITY.  THE PARTIES ACKNOWLEDGE THAT THIS
AGREEMENT IS ENTERED INTO SOLELY FOR THE PURPOSE OF ENDING THEIR EMPLOYMENT
RELATIONSHIP ON AN AMICABLE BASIS AND SHALL NOT BE CONSTRUED AS AN ADMISSION OF
LIABILITY OR WRONGDOING BY ANY PARTY AND THAT EACH PARTY EXPRESSLY DENIES ANY
SUCH LIABILITY OR WRONGDOING.

 

16.           NO RELIANCE.          THE EXECUTIVE DOES NOT RELY, AND HAS NOT
RELIED, UPON ANY REPRESENTATION OR STATEMENT MADE BY CINERGY OR BY ANY OF
CINERGY’S EMPLOYEES, OFFICERS, AGENTS, STOCKHOLDERS, DIRECTORS OR ATTORNEYS WITH
REGARD TO THE SUBJECT MATTER, BASIS OR EFFECT OF THIS AGREEMENT OTHER THAN THOSE
SPECIFICALLY CONTAINED HEREIN.  THE EXECUTIVE EXPRESSLY AGREES TO DEFEND,
INDEMNIFY AND HOLD HARMLESS CINERGY AND ITS DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, REPRESENTATIVES AND INSURERS FROM AND AGAINST ANY AND ALL TAX
ASSESSMENTS, TAX LIENS, PENALTIES OR INTEREST ASSESSED BY THE INTERNAL REVENUE
SERVICE, OR ANY OTHER FEDERAL, STATE OR

 

7

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LOCAL TAXING AUTHORITY AGAINST THE EXECUTIVE ON ACCOUNT OF, ARISING OUT OF OR IN
ANY WAY CONNECTED WITH THIS AGREEMENT.  NOTWITHSTANDING THE FOREGOING, IN THE
EVENT THAT ANY BENEFITS PAID OR PAYABLE TO THE EXECUTIVE OR FOR HIS BENEFIT
PURSUANT TO THE TERMS OF THIS AGREEMENT OR ANY OTHER PLAN OR ARRANGEMENT IN
CONNECTION WITH, OR ARISING OUT OF, HIS EMPLOYMENT WITH CINERGY OR A CHANGE IN
OWNERSHIP OR EFFECTIVE CONTROL OF CINERGY OR OF A SUBSTANTIAL PORTION OF ITS
ASSETS (“PAYMENTS”) WOULD BE SUBJECT TO ANY EXCISE TAX PURSUANT TO SECTION 4999
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THEN THE EXECUTIVE WILL BE
ENTITLED TO RECEIVE AN ADDITIONAL PAYMENT (A “GROSS-UP PAYMENT”) IN AN AMOUNT
SUCH THAT AFTER PAYMENT BY THE EXECUTIVE OF ALL TAXES (INCLUDING ANY INTEREST,
PENALTIES, ADDITIONAL TAX, OR SIMILAR ITEMS IMPOSED WITH RESPECT THERETO AND THE
EXCISE TAX), INCLUDING ANY EXCISE TAX IMPOSED UPON THE GROSS-UP PAYMENT, THE
EXECUTIVE RETAINS AN AMOUNT OF THE GROSS-UP PAYMENT EQUAL TO THE EXCISE TAX
IMPOSED UPON OR ASSESSABLE AGAINST THE EXECUTIVE DUE TO THE PAYMENTS.

 

17.           SEVERABILITY.  THE PARTIES AGREE THAT EACH AND EVERY PARAGRAPH,
SENTENCE, CLAUSE, TERM AND PROVISION OF THIS AGREEMENT IS SEVERABLE AND THAT, IF
ANY PORTION OF THIS AGREEMENT SHOULD BE DEEMED NOT ENFORCEABLE FOR ANY REASON,
SUCH PORTION SHALL BE STRICKEN AND THE REMAINING PORTION OR PORTIONS THEREOF
SHOULD CONTINUE TO BE ENFORCED TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW.

 

18.           CONSULTATION WITH ATTORNEY ADVISED.  THE EXECUTIVE IS ADVISED TO
CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS AGREEMENT.  THE EXECUTIVE
ACKNOWLEDGES BEING GIVEN THAT ADVICE.  THE EXECUTIVE REPRESENTS THAT HE HAS READ
AND FULLY UNDERSTANDS ALL OF THE PROVISIONS OF THIS AGREEMENT.  THE EXECUTIVE
REPRESENTS THAT HE IS VOLUNTARILY SIGNING THIS AGREEMENT.

 

19.           BINDING EFFECT OF AGREEMENT.   THIS AGREEMENT, ONCE SIGNED BY EACH
OF THE EXECUTIVE AND THE CHIEF EXECUTIVE OFFICER OF CINERGY CORP., WILL BE
BINDING UPON AND WILL OPERATE FOR THE BENEFIT OF THE HEIRS, EXECUTORS,
ADMINISTRATORS, ASSIGNS, AND SUCCESSORS IN INTEREST OF THE EXECUTIVE AND
CINERGY.  CINERGY AGREES THAT IN THE EVENT OF A SALE, MERGER, ACQUISITION, OR
OTHER CHANGE IN STRUCTURE (INCLUDING THE CESSATION OR RESTRUCTURING OF ANY PART
OF CINERGY’S BUSINESS) AND/OR OWNERSHIP, CINERGY WILL ENSURE THAT THE CONTRACT
LANGUAGE PERTAINING TO THE TRANSACTION CONFIRMS THE CONTINUING LIABILITY OF
CINERGY (AND ITS ASSIGNS AND SUCCESSORS IN INTEREST) TO THE EXECUTIVE UNDER THIS
AGREEMENT.  THE EXECUTIVE AGREES THAT CINERGY SERVICES, INC. (AND/OR ANY OF ITS
AUTHORIZED EMPLOYEES) IS AUTHORIZED TO ACT FOR CINERGY WITH RESPECT TO ALL
ASPECTS PERTAINING TO THIS AGREEMENT, INCLUDING THE ADMINISTRATION AND
INTERPRETATION OF THIS AGREEMENT.

 

20.           COMPLETE AGREEMENT.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
THIS AGREEMENT, THE TERMS OF THIS AGREEMENT CONSTITUTE THE ENTIRE AGREEMENT
BETWEEN THE PARTIES AND SUPERSEDE ALL PREVIOUS COMMUNICATIONS, REPRESENTATIONS,
AND AGREEMENTS, ORAL OR WRITTEN, BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT
MATTER OF THIS AGREEMENT.  NO AGREEMENT OR UNDERSTANDING MODIFYING THIS
AGREEMENT WILL BE BINDING ON EITHER PARTY UNLESS IT IS IN WRITING AND SIGNED BY
AN AUTHORIZED REPRESENTATIVE OF THE PARTY SOUGHT TO BE BOUND.  IF ANY PART OF
THIS AGREEMENT IS ADJUDGED BY A COURT OF COMPETENT JURISDICTION (OR THE
ARBITRATOR(S) PURSUANT TO SECTION 21) TO BE CONTRARY TO LAW, THEN THIS AGREEMENT
WILL, IN ALL OTHER RESPECTS, REMAIN EFFECTIVE AND BINDING TO THE FULL EXTENT
PERMITTED BY LAW.

 

8

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21.           ARBITRATION.

 

a.             Any dispute between the parties under this Agreement, the breach
thereof, the Executive’s employment with Cinergy, or the termination thereof,
shall be resolved (except as provided below) through informal arbitration by an
arbitrator selected under the rules of the American Arbitration Association
(located in Cincinnati, Ohio) and the arbitration shall be conducted in that
location under the rules of said Association, to the extent they do not conflict
with this Agreement.

 

b.             Within thirty days of the notice of a demand for arbitration,
both parties shall exchange with one another documents in their respective
possession that are relevant to the dispute.  There shall be no interrogatories
or depositions taken in preparation for the arbitration; provided, however, that
the arbitrator may permit limited deposition discovery in extraordinary
circumstances and if necessary to avoid manifest injustice.  The grieving party
shall file a written statement explaining his or its claim, including relevant
documentation, within forty-five days of the notice for arbitration; the
opposing party shall respond within thirty days thereafter; and the grieving
party may reply within fifteen days of the response.   After this period of
limited discovery, a live hearing before the arbitrator will occur.  The
arbitrator shall have the right only to interpret and apply the provisions of
this Agreement and may not change any of its provisions.  The determination of
the arbitrator shall be conclusive and binding upon the parties and judgment
upon the same may be entered in any court having jurisdiction thereof.  The
arbitrator shall give written notice to the parties stating his or their
determination, and shall furnish to each party a signed copy of such
determination.

 

c.             The expenses of arbitration will be borne equally by the
Executive and the Company, and each party will bear its own costs, including
attorneys’ fees; provided, however, that the arbitrator shall have the power to
award such expenses and costs, including attorneys’ fees, to the prevailing
party in accordance with applicable law and to require Cinergy at the beginning
of the proceedings to fully or partially reimburse (or provide an advance to)
the Executive for expenses (but not for costs, including attorneys’ fees) in the
event the Executive can demonstrate that the amount of the expenses is an
unreasonable impediment to adjudication of his claims in arbitration.  If the
arbitrator awards a monetary amount to either party in excess of $1,000,000, the
party against whom the award was made may seek judicial resolution of the
dispute under a de novo standard before any court with appropriate jurisdiction
over the matter.

 

d.             Notwithstanding the foregoing, Cinergy shall not be required to
seek or participate in arbitration regarding any breach by the Executive of his
agreements in Sections 8, 9, 10, 11 or 13 hereof, but may pursue its remedies
for such breach in a court of competent jurisdiction in Cincinnati, Ohio.  Any
arbitration or action pursuant to this Section will be governed by and construed
in accordance with the substantive laws of the State of Ohio, without giving
effect to the principles of conflict of laws of such State.

 

22.           GOVERNING LAW.  THIS AGREEMENT WILL BE INTERPRETED, ENFORCED, AND
GOVERNED UNDER THE LAWS OF THE STATE OF OHIO, WITHOUT REGARD TO ANY PRINCIPLES
OF CONFLICTS OF LAWS.

 

9

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed,
effective as of the date above written.

 

CINERGY SERVICES, INC.

EXECUTIVE

 

 

 

 

By:

/s/ James E. Rogers

 

/s/ William J. Grealis

 

 

James E. Rogers

William J. Grealis

 

Chairman and Chief Executive Officer

 

 

10

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EXHIBIT A

 

*****

 

WAIVER AND RELEASE AGREEMENT

 

THIS WAIVER AND RELEASE AGREEMENT (this “Waiver and Release”) is entered into by
and between William J. Grealis (the “Executive”) and Cinergy Services, Inc. (the
“Company”) (collectively, the “Parties”).

 

WHEREAS, the Parties have entered into the Retirement and Consulting Agreement
dated May 5, 2005 (the “Agreement”);

 

WHEREAS, the Executive’s employment has been terminated in accordance with the
terms of the Agreement;

 

WHEREAS, the Executive is required to sign this Waiver and Release in order to
receive the payment of certain compensation under the Agreement following
termination of employment; and

 

WHEREAS, the Company has agreed to sign this Waiver and Release.

 

NOW, THEREFORE, in consideration of the promises and agreements contained herein
and other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, and intending to be legally bound, the Parties agree as
follows:

 

1.             THIS WAIVER AND RELEASE IS EFFECTIVE ON THE DATE HEREOF AND WILL
CONTINUE IN EFFECT AS PROVIDED HEREIN.

 

2.             In consideration of the payments to be made and the benefits to
be received by the Executive pursuant to the Agreement (the “Benefits”), which
the Executive acknowledges are in addition to payment and benefits to which the
Executive would be entitled to but for the Agreement, the Executive, on behalf
of himself, his heirs, representatives, agents and assigns by dower or otherwise
hereby COVENANTS NOT TO SUE OR OTHERWISE VOLUNTARILY PARTICIPATE IN ANY LAWSUIT
AGAINST, FULLY RELEASES, INDEMNIFIES, HOLDS HARMLESS and OTHERWISE FOREVER
DISCHARGES (i) Cinergy, (ii) its compensation, benefit, incentive (including,
but not limited to, individual incentive, annual incentive, long-term incentive
and annual bonus), pension, welfare and other plans and arrangements, and any
predecessor or successor to any such plans and arrangements and (iii) any of its
current or former officers, directors, agents, executives, employees, attorneys,
insurers, shareholders, predecessors, successors or assigns, from any and all
actions, charges, claims, demands, damages or liabilities of any kind or
character whatsoever, known or unknown, which the Executive now has or may have
had whether or not based on or arising out of the Executive’s employment
relationship with Cinergy or the termination of that employment relationship
through the date of execution of this Waiver and Release, other than workers’
compensation claims filed prior to the date of execution of this Waiver and
Release.  The Executive acknowledges and understands that in the event the
Executive files a charge or complaint with the Equal Employment Opportunity
Commission (“EEOC”), the Ohio Civil Rights Commission (“OCRC”), the Indiana
Civil Rights Commission (“ICRC”),

 

A-1

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the Texas Workforce Commission Civil Rights Division (“TWCCRD”), the
Occupational Safety and Health Administration (“OSHA”) or the Secretary of
Labor, the Executive shall be entitled to no relief, reinstatement,
remuneration, damages, back pay, front pay, or compensation whatsoever from
Cinergy as a result of such charge or complaint.  The Executive understands and
agrees that he is waiving and releasing any and all actions and causes of
action, suits, debts, claims, complaints and demands of any kind whatsoever, in
law or in equity, including, but not limited to, the following:

 

A.             THOSE ARISING UNDER ANY FEDERAL, STATE OR LOCAL STATUTE,
ORDINANCE OR COMMON LAW GOVERNING OR RELATING TO THE PARTIES’ EMPLOYMENT
RELATIONSHIP INCLUDING, BUT NOT LIMITED TO, (I) ANY CLAIMS ON ACCOUNT OF,
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE EXECUTIVE’S HIRING BY CINERGY,
EMPLOYMENT WITH CINERGY OR THE TERMINATION OF THAT EMPLOYMENT; (II) ANY CLAIMS
ALLEGED OR WHICH COULD HAVE BEEN ALLEGED IN ANY CHARGE OR COMPLAINT AGAINST
CINERGY, INCLUDING, BUT NOT LIMITED TO, THOSE WITH THE EEOC, OCRC, ICRC, TWCCRD,
OSHA AND THE SECRETARY OF LABOR; (III) ANY CLAIMS RELATING TO THE CONDUCT,
INCLUDING ACTION OR INACTION, OF ANY EXECUTIVE, EMPLOYEE, OFFICER, DIRECTOR,
AGENT OR OTHER REPRESENTATIVE OF CINERGY; (IV) ANY CLAIMS OF DISCRIMINATION,
HARASSMENT OR RETALIATION ON ANY BASIS; (V) ANY CLAIMS ARISING FROM ANY LEGAL
RESTRICTIONS ON AN EMPLOYER’S RIGHT TO SEPARATE ITS EMPLOYEES; (VI) ANY CLAIMS
FOR PERSONAL INJURY, COMPENSATORY OR PUNITIVE DAMAGES, FRONT PAY, BACK PAY,
LIQUIDATED DAMAGES, TREBLE DAMAGES, LEGAL AND/OR ATTORNEYS’ FEES, EXPENSES AND
LITIGATION COSTS OR OTHER FORMS OF RELIEF; (VII) ANY CLAIMS FOR COMPENSATION AND
BENEFITS; (VIII) ANY CAUSE OF ACTION OR CLAIM THAT COULD HAVE BEEN ASSERTED IN
ANY LITIGATION OR OTHER DISPUTE RESOLUTION PROCESS, REGARDLESS OF FORUM
(JUDICIAL, ARBITRAL OR OTHER), AGAINST ANY EMPLOYEE, OFFICER, DIRECTOR, AGENT OR
OTHER REPRESENTATIVE OF CINERGY; (IX) ANY CLAIM FOR, OR RIGHT TO, ARBITRATION,
AND ANY CLAIM ALLEGED OR WHICH COULD HAVE BEEN ALLEGED IN ANY CHARGE, COMPLAINT
OR REQUEST FOR ARBITRATION AGAINST CINERGY; (X) ANY CLAIM ON ACCOUNT OF, ARISING
OUT OF OR IN ANY WAY CONNECTED WITH ANY EMPLOYMENT AGREEMENT BETWEEN THE
EXECUTIVE AND CINERGY; (XI) ANY CLAIM ON ACCOUNT OF, ARISING OUT OF OR IN ANY
WAY CONNECTED WITH THE ALLEGED TERMINATION OF THE EXECUTIVE’S EMPLOYMENT FOR
“GOOD REASON”; (XII) ANY CLAIM ON ACCOUNT OF, ARISING OUT OF OR IN ANY WAY
CONNECTED WITH MEDICAL, DENTAL, LIFE INSURANCE OR OTHER WELFARE BENEFIT PLAN
COVERAGE; AND (XIII) ALL OTHER CAUSES OF ACTION SOUNDING IN CONTRACT, TORT OR
OTHER COMMON LAW BASIS, INCLUDING, BUT NOT LIMITED TO: (A) THE BREACH OF ANY
ALLEGED ORAL OR WRITTEN CONTRACT; (B) NEGLIGENT OR INTENTIONAL
MISREPRESENTATIONS; (C) WRONGFUL DISCHARGE; (D) JUST CAUSE DISMISSAL; (E)
DEFAMATION; (F) INTERFERENCE WITH CONTRACT OR BUSINESS RELATIONSHIP; (G)
NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; (H) PROMISSORY
ESTOPPEL; (I) CLAIMS IN EQUITY OR PUBLIC POLICY; (J) ASSAULT; (K) BATTERY; (L)
BREACH OF EMPLOYEE HANDBOOKS, MANUALS OR OTHER POLICIES; (M) BREACH OF FIDUCIARY
DUTY; (N) FALSE IMPRISONMENT; (O) FRAUD; (P) INVASION OF PRIVACY; (Q)
WHISTLEBLOWER CLAIMS; AND (R) NEGLIGENCE, NEGLIGENT HIRING, RETENTION OR
SUPERVISION; AND

 

b.             Those arising under any law relating to sex, age, race, color,
religion, handicap or disability, harassment, veteran status, sexual
orientation, retaliation, or national origin or Appalachian origin
discrimination including, without

 

A-2

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limitation, any rights or claims arising under Title VII of the Civil Rights Act
of 1866 and 1964, as amended, 42 U.S.C. §§ 1981 and 2000(e) et seq.; the Civil
Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as
amended, 29 U.S.C. §§ 621 et seq., as amended by the Older Workers Benefit
Protection Act; the Americans with Disabilities Act of 1990, as amended, 42
U.S.C. §§ 12,101 et seq.; Sections 806 and 1107 of the Sarbanes-Oxley Act of
2002; the Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201 et seq.; the
National Labor Relations Act, 29 U.S.C. §§ 151 et seq.; the Occupational Safety
and Health Act, 29 U.S.C. §§ 651 et seq.; the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. §§ 2101, et seq.; Ohio Civil Rights Statutes, Ohio
Revised Code Chapter 4112 et seq.; the Ohio Whistleblower Act, Ohio Revised Code
§ 4113.51, et seq.; Ohio Workers’ Compensation Retaliation Statute, Ohio Revised
Code § 4123.90; the Indiana Civil Rights Act, IC § 22-9-1-12.1 et seq.; Indiana
Equal Pay Statute, IC § 20-8.1-6.1 et seq.; Indiana Workers’ Compensation
Statute, IC § 22-3-1-1 et seq., Indiana Whistleblower Statute, IC § 22-5-3-3 et
seq.; the Texas Commission on Human Rights Act, Tex. Lab. Code. Ann. §§21.001 et
seq.; Tex. Lab. Code. Ann. §§21.051; Tex. Lab. Code. Ann. §§21.055, Texas
Workers’ Compensation Act, Texas Whistleblower Act, as such statutes may be
amended from time to time; and

 

c.             Those arising out of the Employee Retirement Income Security Act
of 1974; and

 

d.             Those arising out of the Family and Medical Leave Act, 29 U.S.C.
§§ 2601 et seq.; and

 

e.             Those arising under the civil rights, labor and employment laws
of any state, municipality or local ordinance; and

 

f.              Any claim for reinstatement, compensatory damages, back pay,
front pay, interest, punitive damages, special damages, legal and/or attorneys’
fees, expenses and litigation costs including expert fees; and

 

G.             ANY OTHER FEDERAL OR STATE STATUTE THAT AFFORDS EMPLOYEES OR
INDIVIDUALS PROTECTION OF ANY KIND WHATSOEVER.

 

3.             THE PARTIES ACKNOWLEDGE THAT IT IS THEIR MUTUAL AND SPECIFIC
INTENT THAT THIS WAIVER AND RELEASE FULLY COMPLIES WITH THE REQUIREMENTS OF THE
OLDER WORKERS BENEFIT PROTECTION ACT (29 U.S.C. § 626) AND ANY SIMILAR LAW
GOVERNING THE RELEASE OF CLAIMS.  ACCORDINGLY, THE EXECUTIVE HEREBY ACKNOWLEDGES
THAT:

 

a.             The Executive has consulted with an attorney prior to executing
this Waiver and Release and acknowledges being given the advice to do so.  The
Executive represents that the Executive has read and fully understands all of
the provisions of this Waiver and Release.  The Executive represents that the
Executive is voluntarily signing this Waiver and Release.

 

b.             The Executive has been offered at least twenty-one (21) days in
which to review and consider this Waiver and Release.

 

A-3

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C.             THE EXECUTIVE WAIVES ANY RIGHT TO ASSERT ANY CLAIM OR DEMAND FOR
REEMPLOYMENT WITH CINERGY.

 

4.             THE PARTIES AGREE THAT THIS WAIVER AND RELEASE SHALL NOT BECOME
EFFECTIVE AND ENFORCEABLE UNTIL THE DATE THIS WAIVER AND RELEASE IS SIGNED BY
BOTH PARTIES OR SEVEN (7) CALENDAR DAYS AFTER ITS EXECUTION BY THE EXECUTIVE,
WHICHEVER IS LATER.  THE EXECUTIVE MAY REVOKE THIS WAIVER AND RELEASE FOR ANY
REASON BY PROVIDING WRITTEN NOTICE OF SUCH INTENT TO THE COMPANY WITHIN SEVEN
(7) DAYS AFTER HE HAS SIGNED THIS WAIVER AND RELEASE, THEREBY FORFEITING THE
EXECUTIVE’S RIGHT TO RECEIVE ANY BENEFITS AND RENDERING THIS WAIVER AND RELEASE
NULL AND VOID IN ITS ENTIRETY.

 

5.             THE EXECUTIVE HEREBY AFFIRMS AND ACKNOWLEDGES HIS CONTINUED
OBLIGATIONS TO COMPLY WITH THE POST-TERMINATION COVENANTS CONTAINED IN THE
AGREEMENT, INCLUDING BUT NOT LIMITED TO, THE PROVISIONS OF SECTIONS 8, 9, 10,
11, 12 AND 13 OF THE AGREEMENT.  THE EXECUTIVE ACKNOWLEDGES THAT THE
RESTRICTIONS CONTAINED THEREIN ARE VALID AND REASONABLE IN EVERY RESPECT, ARE
NECESSARY TO PROTECT CINERGY’S LEGITIMATE BUSINESS INTERESTS AND HEREBY
AFFIRMATIVELY WAIVES ANY CLAIM OR DEFENSE TO THE CONTRARY.

 

6.             IN THE EVENT THAT THE EXECUTIVE BREACHES OR THREATENS TO BREACH
ANY PROVISION OF THIS WAIVER AND RELEASE, HE AGREES THAT CINERGY SHALL BE
ENTITLED TO SEEK ANY AND ALL EQUITABLE AND LEGAL RELIEF PROVIDED BY LAW,
SPECIFICALLY INCLUDING IMMEDIATE AND PERMANENT INJUNCTIVE RELIEF.  THE EXECUTIVE
HEREBY WAIVES ANY CLAIM THAT CINERGY HAS AN ADEQUATE REMEDY AT LAW.  IN
ADDITION, AND TO THE EXTENT NOT PROHIBITED BY LAW, THE EXECUTIVE AGREES THAT
CINERGY SHALL BE ENTITLED TO AN AWARD OF ALL COSTS AND ATTORNEYS’ FEES INCURRED
BY CINERGY IN ANY SUCCESSFUL EFFORT TO ENFORCE THE TERMS OF THIS WAIVER AND
RELEASE.  THE EXECUTIVE AGREES THAT THE FOREGOING RELIEF SHALL NOT BE CONSTRUED
TO LIMIT OR OTHERWISE RESTRICT CINERGY’S ABILITY TO PURSUE ANY OTHER REMEDY
PROVIDED BY LAW, INCLUDING THE RECOVERY OF ANY ACTUAL, COMPENSATORY OR PUNITIVE
DAMAGES.  MOREOVER, IF THE EXECUTIVE PURSUES ANY CLAIMS AGAINST THE COMPANY
SUBJECT TO THE FOREGOING WAIVER AND RELEASE, THE EXECUTIVE AGREES TO IMMEDIATELY
REIMBURSE THE COMPANY FOR THE VALUE OF ALL BENEFITS RECEIVED TO THE FULLEST
EXTENT PERMITTED BY LAW.

 

7.             CINERGY HEREBY RELEASES THE EXECUTIVE, HIS HEIRS,
REPRESENTATIVES, AGENTS AND ASSIGNS FROM ANY AND ALL KNOWN CLAIMS, CAUSES OF
ACTION, GRIEVANCES, DAMAGES AND DEMANDS OF ANY KIND OR NATURE BASED ON ACTS OR
OMISSIONS COMMITTED BY THE EXECUTIVE DURING AND IN THE COURSE OF HIS EMPLOYMENT
WITH THE COMPANY PROVIDED SUCH ACT OR OMISSION WAS COMMITTED IN GOOD FAITH AND
OCCURRED WITHIN THE SCOPE OF HIS NORMAL DUTIES AND RESPONSIBILITIES.

 

8.             THE PARTIES ACKNOWLEDGE THAT THIS WAIVER AND RELEASE IS ENTERED
INTO SOLELY FOR THE PURPOSE OF ENDING THEIR EMPLOYMENT RELATIONSHIP ON AN
AMICABLE BASIS AND SHALL NOT BE CONSTRUED AS AN ADMISSION OF LIABILITY OR
WRONGDOING BY EITHER PARTY AND THAT BOTH CINERGY AND THE EXECUTIVE HAVE
EXPRESSLY DENIED ANY SUCH LIABILITY OR WRONGDOING.

 

9.             EACH OF THE PROMISES AND OBLIGATIONS SHALL BE BINDING UPON AND
SHALL INURE TO THE BENEFIT OF THE HEIRS, EXECUTORS, ADMINISTRATORS, ASSIGNS AND
SUCCESSORS IN INTEREST OF EACH OF THE PARTIES.

 

A-4

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10.           THE PARTIES AGREE THAT EACH AND EVERY PARAGRAPH, SENTENCE, CLAUSE,
TERM AND PROVISION OF THIS WAIVER AND RELEASE IS SEVERABLE AND THAT, IF ANY
PORTION OF THIS WAIVER AND RELEASE SHOULD BE DEEMED NOT ENFORCEABLE FOR ANY
REASON, SUCH PORTION SHALL BE STRICKEN AND THE REMAINING PORTION OR PORTIONS
THEREOF SHOULD CONTINUE TO BE ENFORCED TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW.

 

11.           THIS WAIVER AND RELEASE SHALL BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO WITHOUT REGARD TO ANY APPLICABLE
STATE’S CHOICE OF LAW PROVISIONS.

 

12.           THE EXECUTIVE REPRESENTS AND ACKNOWLEDGES THAT IN SIGNING THIS
WAIVER AND RELEASE HE DOES NOT RELY, AND HAS NOT RELIED, UPON ANY REPRESENTATION
OR STATEMENT MADE BY CINERGY OR BY ANY OF CINERGY’S EMPLOYEES, OFFICERS, AGENTS,
STOCKHOLDERS, DIRECTORS OR ATTORNEYS WITH REGARD TO THE SUBJECT MATTER, BASIS OR
EFFECT OF THIS WAIVER AND RELEASE OTHER THAN THOSE SPECIFICALLY CONTAINED
HEREIN.

 

13.           THIS WAIVER AND RELEASE REPRESENTS THE ENTIRE AGREEMENT BETWEEN
THE PARTIES CONCERNING THE SUBJECT MATTER HEREOF, SHALL SUPERSEDE ANY AND ALL
PRIOR AGREEMENTS WHICH MAY OTHERWISE EXIST BETWEEN THEM CONCERNING THE SUBJECT
MATTER HEREOF (SPECIFICALLY EXCLUDING, HOWEVER, THE POST-TERMINATION OBLIGATIONS
CONTAINED IN THE AGREEMENT OR ANY OTHER LEGALLY-BINDING DOCUMENT), AND SHALL NOT
BE ALTERED, AMENDED, MODIFIED OR OTHERWISE CHANGED EXCEPT BY A WRITING EXECUTED
BY BOTH PARTIES.

 

14.           CAPITALIZED WORDS AND TERMS USED THROUGHOUT THIS WAIVER AND
RELEASE THAT ARE NOT DEFINED IN THIS WAIVER AND RELEASE SHALL HAVE THE MEANING
GIVEN TO SUCH WORD OR TERM IN THE AGREEMENT.

 

A-5

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PLEASE READ CAREFULLY.  WITH RESPECT TO THE EMPLOYEE, THIS

 

WAIVER AND RELEASE INCLUDES A COMPLETE RELEASE OF ALL KNOWN

 

AND UNKNOWN CLAIMS.

 

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

 

EMPLOYEE

CINERGY SERVICES, INC.

 

 

 

 

Signed:

/s/ William J. Grealis

 

By:

/s/ James E. Rogers

 

 

 

Printed:

William J. Grealis

Title:

Chairman and Chief Executive Officer

 

 

 

Dated:

May 5, 2005

 

Dated:

May 5, 2005

 

 

A-6

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