Exhibit 10.2

 

PHANTOM STOCK AWARD AGREEMENT

 

This Phantom Stock Award Agreement (the “Agreement”) has been made as of
                                , (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 2010 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 Phantom
Stock units 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 Phantom Stock Units and Tandem
Dividend Equivalents.  The number of Phantom Stock units and the number of
tandem Dividend Equivalents subject to this Award are each
                                                                    .  Each
Phantom Stock unit, upon becoming vested, represents a right to receive payment
in the form of one (1) share of Common Stock.  Each tandem Dividend Equivalent
represents a right to receive cash payments equivalent to the amount of cash
dividends declared and paid on one (1) share of Common Stock after the Date of
Grant and before the Dividend Equivalent expires.  Phantom Stock units 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.

 

Section 2.              Vesting of Phantom Stock Units.  The specified
percentage of the Phantom Stock units subject to this Award, and not previously
forfeited, shall vest, with such percentage considered satisfied to the extent
such Phantom Stock units have previously vested, as follows:

 

(a)           Upon Grantee remaining continuously employed by the Corporation,
including Subsidiaries, through the specified anniversary of the Date

 

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of Grant (each a “Vesting Date”), with respect to the percentage of Phantom
Stock units set forth next to such date:

 

Vesting Percentage

 

Anniversary

 

 

 

33-1/3%

 

1st

66-2/3%

 

2nd

100%

 

3rd

 

For purposes of vesting under this Section 2(a), if such employment terminates
upon Retirement, which is defined as termination 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 Subsidiary
which plan the Committee, or the delegatee, in its sole discretion, determines
to be the functional equivalent of the Duke Energy Retirement Cash Balance Plan
or Cinergy Corp. Non-Union Employees’ Pension Plan, then Grantee’s employment
shall be considered to continue, with continued vesting under this Section 2(a),
unless the Committee or its delegatee, in its sole discretion, determines that
Grantee is in violation of any obligation identified in Section 3, in which case
any such Phantom Stock units not previously vested, or vested by application of
the following sentence shall be forfeited, or unless the Grantee dies, in which
case the Phantom Stock units subject to this Award shall vest in accordance with
the following sentences.  If such employment terminates (i) as the result of
Grantee’s death or (ii) as the result of Grantee’s permanent and total
disability within the meaning of Code Section 22(e)(3), all Phantom Stock units
subject to this Award, which units have not previously been forfeited or vested,
immediately shall become fully vested.  If such employment terminates (i) as the
result of termination of such employment by the Corporation, or employing
Subsidiary, other than for cause, as determined by the Committee or its
delegatee or (ii) as the direct and sole result, as determined by the Committee
or its delegatee, in its sole discretion, of the divestiture of assets, a
business or a company, by the Corporation or a Subsidiary, the Phantom Stock
units subject to this Award shall vest at such vesting percentage determined by
the Committee or its delegatee, in its sole discretion, by prorating from the
above schedule to reflect only that portion of the period beginning on the Date
of Grant and ending with the third (3rd) anniversary of the Date of Grant during
which such employment continued while Grantee was entitled to payment of salary,
and any such Phantom Stock units not then or previously vested shall be
forfeited.

 

Unless the Grantee’s right to receive payment of the Phantom Stock units
constitutes a “deferral of compensation” within the meaning of Section 409A of
the Code, in the event that at a time when vesting would otherwise occur under
this Section 2(a) Grantee is on an employer-approved, personal leave of absence,
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 January 14 of the calendar
year immediately following the calendar year in which the leave commenced.  In
the event Grantee does not return to active service from such leave of absence
prior to January 14 of the calendar year immediately

 

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following the calendar year in which the leave commenced, any Phantom Stock
units 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).

 

(b)           100%, if, following the occurrence of a Change in Control and
before the second anniversary of such occurrence, such employment is terminated
involuntarily, and not for cause, by the Corporation, or employing Subsidiary,
as determined by the Committee or its delegatee in its sole discretion.

 

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, due to Retirement, 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, (ii) violate any of Grantee’s
other noncompetition obligations, or any of Grantee’s nonsolicitation or
nondisclosure obligations, to the Corporation or any Subsidiary; or (iii) except
as required by subpoena or other legal process (in which event the Grantee will
give the Chief Legal Officer of the Corporation prompt notice of such subpoena
or other legal process in order to permit the Corporation or any affected
individual to seek appropriate protective orders), publish or provide any oral
or written statements about the Corporation or any  Subsidiary, any of the
Corporation’s or any Subsidiary’s current or former officers, executives,
directors, employees, agents or representatives or any initiative, program or
policy of the Corporation or any Subsidiary 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.  The noncompetition obligations of clause (i) of the preceding
sentence shall be limited in scope and shall be effective only with respect 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,

 

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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 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 from being retained during the Restricted Period
in a capacity as an attorney licensed to practice law, or to restrict Grantee
from providing advice and counsel in such capacity, in any jurisdiction where
such prohibition or restriction is contrary to law.

 

Section 4.              Forfeiture.  Any Phantom Stock unit subject to this
Award shall be forfeited upon the termination of Grantee’s continuous employment
by the Corporation, including Subsidiaries, from the Date of Grant, except to
the extent otherwise provided in Section 2.  Any Dividend Equivalent subject to
this Award shall expire at the time the unit of Phantom Stock with respect to
which the Dividend Equivalent is in tandem (i) is vested and paid, or deferred,
or (ii) is forfeited.  Notwithstanding any other provision to the contrary, this
Award shall be forfeited automatically and shall be void in the event that the
Grantee volunteers to terminate employment with the Corporation, including
Subsidiaries, pursuant to the Duke Energy Corporation 2010 Voluntary Opportunity
Plan.

 

Section 5.              Dividend Equivalent Payments.  Payments with respect to
any Dividend Equivalent subject to this Award shall be paid in cash to the
Grantee within 60 days after the time cash dividends are declared and paid with
respect to the Common Stock on or after the Date of Grant and before the
Dividend Equivalent expires, but in no event later than the calendar year in
which the dividends are declared and paid.  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. Any required income tax
withholdings in respect of Dividend Equivalents attributable to Phantom Stock
units shall be satisfied by reducing the cash payment in respect of the required
withholding amount, unless the Committee, or its delegatee, in its discretion,
requires Grantee to satisfy such tax obligation by other payment to the
Corporation.

 

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Section 6.              Payment of Phantom Stock Units.  Payment of Phantom
Stock units subject to this Award shall be made to the Grantee as soon as
practicable following the time such units become vested in accordance with
Section 2 but in no event later than 60 days following such vesting, except to
the extent deferred by Grantee in accordance with such procedures as the
Committee, or its delegatee, may prescribe from time to time or except to the
extent required to avoid accelerated taxation and/or tax penalties under
Section 409A of the Code.  To the extent the Grantee’s right to receive payment
of the Phantom Stock units constitutes a “deferral of compensation” within the
meaning of Section 409A of the Code, then notwithstanding the first sentence of
this Section 6, except in the event that the Grantee’s employment terminates as
a result of death, payment of vested Phantom Stock units subject to this Award
shall be made to the Grantee within 60 days following the applicable Vesting
Date(s) as provided in Section 2(a).  Payment (or deferrals, as applicable)
shall be subject to withholding for taxes.  Payment shall be in the form of one
(1) share of Common Stock for each full vested unit of Phantom Stock and any
fractional vested unit of Phantom 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 Phantom Stock units became vested, or if
later, payable.  Notwithstanding the foregoing, the number of shares of Common
Stock that would otherwise be paid or deferred (valued at Fair Market Value on
the date the respective unit of Phantom Stock became vested, or if later,
payable) shall be reduced by the Committee, or its delegatee, in its sole
discretion, to fully satisfy tax withholding requirements, unless the Committee,
or its delegatee, in its discretion requires Grantee to satisfy such tax
obligation by other payment to the Corporation.  In the event that payment,
after any such reduction in the number of shares of Common Stock to satisfy
withholding for tax requirements, would be 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
Phantom Stock units became vested, or if later, payable.

 

Section 7.              No Employment Rights.  Nothing in this Agreement or in
the Plan shall confer upon the Grantee the right to continued employment by 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 Phantom Stock units and Dividend
Equivalents subject to this Award are not assignable or transferable by the
Grantee.  Upon any attempt to transfer, assign, pledge, hypothecate, sell or
otherwise dispose of any such Phantom Stock unit or Dividend Equivalent, or of
any right or privilege conferred hereby, or upon the levy of any attachment or
similar process upon such Phantom Stock unit or Dividend Equivalent, or upon
such right or privilege, such Phantom Stock unit or Dividend Equivalent or right
or privilege, shall immediately become null and void.

 

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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.  The validity and construction of this
Agreement shall be governed by the laws of the state of Delaware applicable to
transactions taking place entirely within that state.

 

Section 11.            Conflicts with Plan, Correction of Errors, Section 409A
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 a Phantom Stock Award properly granted to 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.

 

To the extent applicable, it is intended that this Agreement comply with the
provisions of Section 409A of the Code and that this Award not result in
unfavorable tax consequences to Grantee under Section 409A of the Code.  This
Agreement will be administered and interpreted in a manner consistent with this
intent, and any provision that would cause this Agreement to fail to satisfy
Section 409A of the Code will have no force and effect until amended to comply
therewith (which amendment may be retroactive to the extent permitted by
Section 409A of the Code).  The Corporation and the Grantee agree to work
together in good faith in an effort to comply with Section 409A of the Code
including, if necessary, amending this Agreement based on further guidance
issued by the Internal Revenue Service from time to time, provided that the
Corporation shall not be required to assume any increased economic burden. 
Notwithstanding anything contained herein to the contrary, to the extent
required in order to avoid accelerated taxation and/or tax penalties under
Section 409A of the Code, the Grantee shall not be considered to have terminated
employment with Corporation for purposes of this Agreement and no payments shall
be due to him under this Agreement which are payable upon his termination of
employment until he would be considered to have incurred a “separation from
service” from the Corporation within the meaning of Section 409A of the Code. 
To the extent required in order to avoid accelerated taxation and/or tax
penalties under Section 409A of the Code, amounts that would otherwise be
payable and benefits that would otherwise be provided pursuant to this Agreement
during the six-month period immediately following the Grantee’s termination of
employment shall instead be paid within 60 days following the first business day
after the date that is six months following his termination of employment (or
upon his death, if earlier).  In addition, for purposes of this Agreement, each
amount

 

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to be paid or benefit to be provided to the Grantee pursuant to this Agreement
shall be construed as a separate identified payment for purposes of Section 409A
of the Code.

 

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
                       , 2011, has signed a duplicate of this Agreement, in the
space provided below, and returned the signed duplicate to
the                                                          , which, if, and to
the extent, permitted by the Executive Compensation and Benefits Department, may
be accomplished by electronic means.

 

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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

 

 

Acceptance of Phantom Stock Award

 

IN WITNESS OF Grantee’s acceptance of this 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
                                          , 2011.

 

 

 

 

Grantee’s Signature

 

 

 

 

 

(print name)

 

 

 

 

 

(address)

 

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