**Exhibit10-f**

 

**TEMPLATE**

 

**PERFORMANCESHARES AGREEMENT FOR**

**EMPLOYEESUNDER THE CINERGY CORP.**

**1996LONG-TERM INCENTIVE COMPENSATION PLAN**

 

THIS PERFORMANCE SHARESAGREEMENT (the “Agreement”), effective as of                               (the “Date of Grant”), is made by and between Cinergy Corp., a Delawarecorporation, and                               (the “Employee”), an employee of Cinergy Corp. or one of its directly orindirectly held majority or greater-owned subsidiaries (collectively referredto herein as the “Company”).

 

WHEREAS, Cinergy Corp.has adopted the Cinergy Corp. 1996 Long-Term Incentive Compensation Plan, asamended from time to time (the “Plan”), pursuant to which the Employee has beengranted the right, contingent upon the attainment of certain corporateperformance measures within an established time period, to receive shares ofCinergy Corp. common stock, with par value of $0.01 per share (“Common Stock”),on the terms set forth in this Agreement; and

 

WHEREAS, theparties desire to enter into this Agreement to set forth their understandingswith respect to the contingent right to receive a certain number of shares ofCommon Stock as described in this Agreement, such contingent right sometimesreferred to herein as “performance shares.”

 

NOW, THEREFORE, inconsideration of the recitals and the mutual agreements contained in thisAgreement, the parties agree as follows:

 

**1.****                                      ContingentAward.**

 

Cinergy Corp. herebygrants to the Employee effective as of the Date of Grant, the right, contingentupon the attainment of certain corporate performance measures duringperformance cycle         commencing on January 1,           and ending on December 31,           (the “Performance Cycle”), to receive shares of Common Stock on the terms andconditions set forth in this Agreement.  For the Performance Cycle, theEmployee’s contingent target award is                     shares of Common Stock (the “Target Award”).  The number of shares ofCommon Stock covered by the Target Award is subject to adjustment, includingreductions in the event of a demotion or change to a lower level position, asprovided in the Plan and in such procedures or guidelines that may from time totime be adopted by the Committee (as defined in the Plan), including the AdministrativeGuidelines adopted on                               (the “Administrative Guidelines”).

 

**2.****                                      CorporatePerformance Measure.**

 

The corporate performancemeasure is based on a comparison of the total shareholder return (“TSR”) of ashare of Common Stock to the TSR of the companies listed in the S&PSupercomposite Electric Index as of the beginning of the Performance Cycle (the“Comparator Group”); for purposes of this Agreement, TSRs shall be ascalculated by reference to Bloomberg Financial L.P. (including the reinvestmentof dividends or other distributions); provided, however, that theTSR of the Comparator Group shall be calculated without taking into account anycompany that, during the Performance Cycle, either (i) becomes the subjectof a voluntary or involuntary petition in bankruptcy pursuant to Title 11 ofthe United States Code, (ii) undergoes a “change in control,” or (iii) becomesthe subject of any public announcement of a proposal for such company toundergo a “change in control.” For this purpose, a “change in control”means (i) the sale of all or substantially all of the assets of thecompany on a consolidated basis to a person or entity other than to asubsidiary or affiliate of the company, (ii) a merger, reorganization orconsolidation after which the holders of the company’s outstanding voting powerimmediately

 

1

----

 

prior to suchtransaction, in the aggregate, do not own a majority of the outstanding votingpower of the surviving or resulting entity immediately upon completion of suchtransaction, (iii) the sale of all or substantially all of the outstandingcommon shares of the company to an unrelated person or entity or (iv) anyother transaction where the owners of the company’s outstanding voting powerprior to such transaction, in the aggregate, do not own at least a majority ofthe outstanding voting power of the relevant entity after the transaction.

 

**3.****                                      PayoutCalculation and Form of Payment.**

 

The number of shares ofCommon Stock earned for the Performance Cycle will be determined by comparingthe TSR of a share of Common Stock during the Performance Cycle to the TSR ofthe Comparator Group during the Performance Cycle, as described in Subsection 3(a) andSubsection 3(b) below.

 

(a)                                  Thepercentage of the Target Award earned by the Employee, if any, will bedetermined in accordance with the following chart and the guidelines containedin Subsection 3(b).

 

**Percentageof Individual Target Payment**

 

| **Relative TSR  Performance Percentile** | ** ** | **Percentage of  Target Award Earned** | ** ** |
|------------------------------------------|------------|----------------------------------------|------------|
| 85th or above                            |       | 200                                    | %          |
| 80th                                     |       | 185                                    | %          |
| 70th                                     |       | 150                                    | %          |
| 60th                                     |       | 115                                    | %          |
| 55th                                     |       | 100                                    | %          |
| 40th                                     |       | 40                                     | %          |
| 30th or below                            |       | 0                                      | %          |

 

(b)                                 Thechart contained in Subsection 3(a) shall be applied in accordancewith the following guidelines.

 

(i)            Ifthe relative TSR of a share of Common Stock compared to the TSR of theComparator Group is between any two levels listed above, the Committee willcalculate, by interpolation, the percentage of the Target Award that is earnedby the Employee.

 

(ii)           Ifthe relative TSR of a share of Common Stock*is equal to or less than the* 30th percentile of the TSR of the Comparator Group, theEmployee will not earn any performance shares under this Agreement.

 

(iii)          Themaximum number of shares of Common Stock that can be earned under thisAgreement is 200% of the number of shares of Common Stock covered by the TargetAward.

 

(c)                                  Exceptas otherwise provided herein, the number of shares of Common Stock earned bythe Employee shall be paid to or for the benefit of the Employee no later than March 15of the calendar year following the calendar year in which occurs the last dayof the Performance Cycle.  Notwithstanding the preceding sentence, in theevent of the Employee’s death during the Performance Cycle, the number ofshares of Common Stock earned by the Employee shall be paid on behalf of theEmployee as soon as administratively practicable following his or her death butno later than                                   .

 

(d)                                 Exceptas otherwise provided herein, the Employee shall be entitled to receive, nolater than March 15 of the calendar year following the calendar year inwhich occurs the last

 

2

----

 

day of the PerformanceCycle, the number of shares of Common Stock (if any) equal to (i) thecumulative amount of cash dividends that would have been paid to the Executiveif he or she had owned, during the entire Performance Cycle, the number ofshares of Common Stock specified in Section 3(c) above, divided by (ii) the“Fair Market Value” (as that term is defined in the Plan) of a share of CommonStock on the last day of the Performance Cycle.

 

(e)           Notwithstandingany other provision of this Agreement, the Committee in its sole discretion maydetermine whether to pay all or any portion of any award earned pursuant tothis Agreement in shares of Common Stock or in an amount of cash equal to theFair Market Value of such shares of Common Stock.

 

**4.****                                      Effectof Termination of Employment due to Reasons other than Retirement, Death orDisability.**

 

If, prior to the last dayof the Performance Cycle, the Employee ceases to be an employee of the Companyfor any reason other than as a result of his or her termination of employmenton or after attaining age fifty (50) with five years of “Service” under theCinergy Corp. Non-Union Employees’ Pension Plan (“Retirement”), death ordisability (as defined in Section 7), all contingent rights set forth inthis Agreement will be immediately forfeited on the effective date of theEmployee’s termination.

 

**5.****                                      Effect ofTermination of Employment Due to Retirement.**

 

If, prior to the last dayof the Performance Cycle, the Employee’s employment with the Company isterminated as a result of his or her Retirement, the Employee will continue toparticipate in the Performance Cycle and will earn a pro rata award ofperformance shares, the amount of which shall be calculated by the Committeebased on (a) the number of full and partial months (out of the totalmonths in the Performance Cycle) that the Employee was an active employeeduring the Performance Cycle and (b) the relative TSR of a share of CommonStock during the entire Performance Cycle compared to the TSR of the ComparatorGroup during the entire Performance Cycle.

 

**6.****                                      Effect ofTermination of Employment Due to Death.**

 

If, prior to the last dayof the Performance Cycle, the Employee dies while employed by the Company, theEmployee’s executor, administrator, legatees or estate beneficiaries willreceive a pro rata award of performance shares, the amount of which shall becalculated by the Committee based on (a) the number of full and partialmonths (out of the total months in the Performance Cycle) that the Employee wasan active employee during the Performance Cycle and (b) the relative TSRof a share of Common Stock compared to the TSR of the Comparator Group duringthe period of time commencing on the Date of Grant and ending on the December 31nearest the date of the Employee’s death, but ending no earlier than                               .

 

**7.****                                      Effect of Disability.**

 

If, prior to the last dayof the Performance Cycle, the Employee becomes “disabled” as that term isdefined under the then existing long-term disability plan of the Company inwhich the Employee participates (or if no such plan exists, as determined bythe Committee), the Employee will continue to participate in the PerformanceCycle and will earn a pro rata award of performance shares, the amount of whichshall be calculated by the Committee based on (a) the number of fullmonths (out of the total months in the Performance Cycle) that the Employee wasan active employee during the Performance Cycle and (b) the relative TSRof a share of Common Stock during the entire Performance Cycle compared to theTSR of the Comparator Group during the entire Performance Cycle.

 

3

----

 

**8.****                                      Effect ofChange in Control.**

 

(a)           Changein Control While Employed. Notwithstanding the above, if a “Change in Control” (as defined in thePlan) of Cinergy Corp. occurs while the Employee is employed by the Company andprior to the last day of the Performance Cycle, the following provisions shallapply and benefits shall not be paid to or on behalf of the Employee under anyother provision of this Agreement.

 

(i)            TheTarget Award shall be deemed earned at a level equal to the greater of(I) the actual performance level during the period (the “Pro Rata Period”)commencing on January 1, 2006 and ending on the date that is twobusiness days immediately preceding the date on which the “EffectiveTime” occurs, as such term is defined in the Agreement and Plan of Merger byand among Duke Energy Corporation, Cinergy Corp., Deer Holding Corp., DeerAcquisition Corp. and Cougar Acquisition Corp., dated as of May 8, 2005 or(ii) the target performance level (i.e., the 55th performance percentile),and the Employee shall earn a pro rata award of performance shares, the amountof which shall be calculated by the Committee based on the number ofdays in the Pro Rata Period out of the total number of days in the PerformanceCycle.  The number of performance shares described above shallbe payable, subject to Section 3(e), in shares of Common Stock withinthirty (30) days after the occurrence of such Change in Control.

 

(ii)           TheEmployee shall also be entitled to receive, subject to Section 3(e),within thirty (30) days after the occurrence of such Change in Control, thenumber of shares of Common Stock equal to (I) the cumulative amount of cashdividends that would have been paid to the Executive if he or she had owned,during the period commencing on the Date of Grant and ending on the date of theChange in Control, the number of shares of Common Stock specified in Section 8(a)(i) above,divided by (II) the Fair Market Value of a share of Common Stock immediatelyprior to the Change in Control.

 

(iii)          QualifyingTermination of Employment Following Change in Control.  In addition to any other payments made underSections 8(a)(i) and 8(a)(ii) of this Agreement, in the event that,during the two-year period beginning on the Cinergy Effective Time, theEmployee has an involuntary “separation from service” (within the meaning ofCode Section 409A) other than for Cause or a voluntary “separation fromservice” (within the meaning of Code Section 409A) for Good Reason, theEmployee shall be entitled to receive, subject to Section 3(e), withinthirty (30) days after the occurrence of such separation from service, thenumber of shares of Common Stock equal to (I) the Target Award reduced by thenumber of shares of Common Stock specified in Section 8(a)(i) above,plus (II) the cumulative amount of cash dividends that would have been paid tothe Employee if he or she had owned, during the period commencing on the Dateof Grant and ending on the date of the separation from service, the number ofshares of Common Stock specified in Section 8(a)(iii)(I) above, divided bythe Fair Market Value of a share of Common Stock immediately prior to theseparation from service.  Notwithstandingthe above, if required to comply with Code Section 409A, such paymentshall not be made until five (5) days following the 6th monthanniversary of such separation from service if the Employee is a “specifiedemployee” within the meaning of Code Section 409A.

 

(iv)          Forpurposes of this Agreement, “Cinergy Effective Time” has the meaning given tosuch term in the Agreement and Plan of Merger by and among Duke EnergyCorporation, Cinergy Corp., Deer Holding Corp., Deer Acquisition Corp. andCougar Acquisition Corp., dated May 8, 2005, and the terms “Cause”

 

4

----

 

and “Good Reason” shallhave the meaning given to such terms in the most recent employment agreement,as amended, in effect for the Employee.

 

(b)           Changein Control Following Retirement. Notwithstanding the foregoing, if a Change in Control of Cinergy Corp.occurs after the Employee’s Retirement but prior to the last day of thePerformance Cycle, the following provisions shall apply and benefits shall notbe paid to or on behalf of the Employee under any other provision of thisAgreement.

 

(i)            TheEmployee shall be entitled to receive, subject to Section 3(e), withinthirty (30) days after the occurrence of such Change in Control, a pro rataaward of performance shares, the amount of which shall be calculated by theCommittee based on (I) the number of full and partial months (out of a total of36 months) that he or she was an active employee during the Performance Cycleand (II) the fact that the Target Award shall be deemed earned at the greaterof the actual performance level during the Pro Rata Period or the targetperformance level (i.e., the 55th performance percentile).

 

(ii)           TheEmployee shall also be entitled to receive, subject to Section 3(e),within thirty (30) days after the occurrence of such Change in Control, thenumber of shares of Common Stock equal to (I) the cumulative amount of cashdividends that would have been paid to the Executive if he or she had owned,during the period commencing on the Date of Grant and ending on the date of theChange in Control, the number of shares of Common Stock specified in Section 8(b)(i) above,divided by (II) the Fair Market Value of a share of Common Stock immediatelyprior to the Change in Control.

 

(c)           Changein Control Following Death.  Notwithstandingthe foregoing, if a Change in Control of Cinergy Corp. occurs after theEmployee’s death while employed by the Company,  but prior to the later of(I) the December 31 nearest the date of the Employee’s death or (II)                               ,the following provisions shall apply and benefits shall not be paid to or onbehalf of the Employee under any other provision of this Agreement.

 

(i)            TheEmployee’s executor, administrator, legatees or estate beneficiaries shall beentitled to receive, subject to Section 3(e), within thirty (30) daysafter the occurrence of such Change in Control, a pro rata award of performanceshares, the amount of which shall be calculated by the Committee based on (I)the number of full and partial months (out of a total of 36 months) that he orshe was an active employee during the Performance Cycle and (II) the fact thatthe Target Award shall be deemed earned at the greater of the actualperformance level during the Pro Rata Period or the target performance level(i.e., the 55th performance percentile).

 

(ii)           TheEmployee’s executor, administrator, legatees or estate beneficiaries shall alsobe entitled to receive, subject to Section 3(e), within thirty (30) daysafter the occurrence of such Change in Control, the number of shares of CommonStock equal to (I) the cumulative amount of cash dividends that would have beenpaid to the Executive if he or she had owned, during the period commencing onthe Date of Grant and ending on the date of the Change in Control, the numberof shares of Common Stock specified in Section 8(c)(i) above, dividedby (II) the Fair Market Value of a share of Common Stock immediately prior tothe Change in Control.

 

(d)           Changein Control Following Disability. Notwithstanding the foregoing, if a Change in Control of Cinergy Corp.occurs after the Employee becomes disabled while employed by the Company butprior to the last day of the Performance Cycle, the following

 

5

----

 

provisions shall apply andbenefits shall not be paid to or on behalf of the Employee under any otherprovision of this Agreement.

 

(i)            TheEmployee shall be entitled to receive, subject to Section 3(e), withinthirty (30) days after the occurrence of such Change in Control, a pro rataaward of performance shares, the amount of which shall be calculated by theCommittee based on (I) the number of full months (out of a total of 36 months)that he or she was an active employee during the Performance Cycle and (II) thefact that the Target Award shall be deemed earned at the greater of the actualperformance level during the Pro Rata Period or the target performance level(i.e., the 55th performance percentile).

 

(ii)           TheEmployee shall also be entitled to receive, subject to Section 3(e),within thirty (30) days after the occurrence of such Change in Control, thenumber of shares of Common Stock equal to (I) the cumulative amount of cashdividends that would have been paid to the Executive if he or she had owned,during the period commencing on the Date of Grant and ending on the date of theChange in Control, the number of shares of Common Stock specified in Section 8(d)(i) above,divided by (II) the Fair Market Value of a share of Common Stock immediatelyprior to the Change in Control.

 

(e)           Notwithstandingany other provision of this Agreement, an event shall not result in theoccurrence of a Change in Control unless, within the meaning of Code Section 409A,such event results in a change in the ownership or effective control of the Companyor in the ownership of a substantial portion of the assets of the Company.

 

**9.****                                      Transferability.**

 

The contingent rights setforth in this Agreement are not transferable otherwise than by will or the lawsof descent and distribution.

 

**10.****                               Effect of Assignmentor Pledge.**

 

If the Employee assignsor pledges contingent shares of Common Stock covered by this Agreement orattempts to do so, or if there is a levy, attachment, execution or other legalor equitable process upon the contingent shares, the Company has the right toterminate this Agreement.

 

**11.****                               Incorporation of thePlan’s Terms.**

 

This Agreement is subjectto all the terms, provisions and conditions of the Plan, which is incorporatedinto this Agreement by reference, and to such regulations as may from time totime be adopted by the Committee, including the AdministrativeGuidelines.  A copy of the Plan and a set of Administrative Guidelineshave been furnished to the Employee and an additional copy of each may beobtained from the Company.  In the event of any conflict between theprovisions of the Plan or the Administrative Guidelines (as the case may be)and the provisions of this Agreement, the terms, conditions and provisions ofthe Plan and/or Administrative Guidelines shall control, and this Agreementshall be deemed to be modified accordingly.  The Committee shall havefinal authority to interpret and construe the Plan and this Agreement and tomake any and all determinations thereunder, and its decision shall be bindingand conclusive upon the Employee and his or her legal representative in respectof any questions arising under the Plan, or this Agreement.

 

**12.****                               No Right to ContinuedEmployment.**

 

Nothing in this Agreementshall restrict the right of the Company to terminate the Employee’s

 

6

----

 

employment at any timewith or without cause.

 

**13.****                               Successors.**

 

The terms of thisAgreement shall be binding upon and inure to the benefit of the Company, itssuccessors and assigns, and the Employee and the Employee’s beneficiaries,executors, administrators, heirs and successors.

 

**14.****                               Invalid Provision.**

 

The invalidity ofunenforceability of any particular provision of this Agreement shall not affectthe other provisions of this Agreement, and this Agreement shall be construedin all respects as if such invalid or unenforceable provision has been omitted.

 

**15.****                               Modifications and Section 409Aof the Code.**

 

No change, modificationor waiver of any provision of this Agreement shall be valid unless the same bein writing and signed by the parties.  Tothe extent applicable, it is intended that this Agreementand the Plan comply with the provisions of Section 409A of the Code,including the provisions requiring a delay in payment.  This Agreement and the Plan shall beadministered in a manner consistent with this intent, andany provision that would cause the Agreement or the Plan to fail tosatisfy Section 409A of the Code shall have no force and effect untilamended to comply with Section 409A of the Code (which amendment may beretroactive to the extent permitted by Section 409A of the Code and may bemade by the Company without the consent of the Employee).

 

**16.****                               Headings.**

 

The headings of theSections of this Agreement are provided for convenience only and are not toserve as a basis for interpretation or construction, and shall not constitute apart of this Agreement.

 

**17.****                               Governing Law.**

 

Except to the extentpre-empted by federal law, this Agreement and the Employee’s rights under itshall be construed and determined in accordance with the laws of the state ofDelaware.

 

**18.****                               Entire Agreement.**

 

This Agreement, the Planand the Administrative Guidelines contain the entire agreement andunderstanding of the parties with respect to the subject matter contained inthis Agreement, and supersede all prior communications, representations andnegotiations in respect thereto.

 

**19.****                               Counterparts.**

 

This Agreement may beexecuted in counterparts, each of which shall be deemed an original, but all ofwhich together shall constitute one and the same instrument.

 

**20.****                               Satisfaction of LegalRequirements.**

 

No payment will be madeunder this Agreement until the Company has been advised by counsel that allapplicable legal requirements have been met.

 

**21.****                               Notices andElectronic Delivery and Signature.**

 

All notices to theCompany shall be addressed to Cinergy Corp., 139 East Fourth Street,Cincinnati, Ohio 45202, Attention: Manager, Compensation, or such other addressor in

 

7

----

 

accordance with suchother procedure as the Company may, from time to time, specify. Notwithstanding the foregoing, the Employee hereby consents and agrees toelectronic delivery of any Plan documents, proxy materials, annual reports andother related documents, including all materials required to be distributedpursuant to applicable securities laws.  If the Company establishesprocedures for an electronic signature system for delivery and acceptance ofPlan documents (including documents relating to any programs adopted under thePlan), the Employee hereby consents to such procedures and agrees that his orher electronic signature is the same as, and shall have the same force andeffect as, his or her manual signature.  The Employee consents and agreesthat any such procedures and delivery may be effected by a third party engagedby the Company to provide administrative services related to the Plan,including any program adopted under the Plan.  The Employee understandsthat, unless earlier revoked by the Employee, this consent shall be effectivefor the duration of the Agreement and that he or she shall have the right atany time to request written copies of any and all materials referred to above.

 

IN WITNESS WHEREOF, thisAgreement has been executed by the parties effective as of the           day of                               ,          .

 

 
| EMPLOYEE   | CINERGY CORP. |
|------------|---------------|
|       |          |
|       |          |
| Signature: |          |   | By: |   |   |
|            |               |  |  |  |  |

 

8

----