**TEMPLATE**

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**RESTRICTEDSTOCK AGREEMENT FOR**

**EMPLOYEESUNDER THE CINERGY CORP.**

**1996LONG-TERM INCENTIVE COMPENSATION PLAN**

 

 

                THIS RESTRICTEDSTOCK AGREEMENT (the “Agreement”), dated effective as of _______________ (the “Dateof Grant”), is made by and between Cinergy Corp., a Delaware corporation, 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, as amended from time to time (the “Plan”),pursuant to which the Employee has been granted the right, contingent upon the Employeesatisfying certain vesting requirements, to receive shares of Cinergy Corp.common stock, with par value of $0.01 per share (“Common Stock”), on the termsset forth in this Agreement; and

 

WHEREAS, the parties desire to enter into thisAgreement to set forth their understandings with respect to the Common Stockdescribed in this Agreement, such Common Stock sometimes referred to herein as “RestrictedStock.”

 

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

 

**1.****                                     ****Grant of Restricted Stock****. **CinergyCorp. hereby grants to the Employee as of the Date of Grant ______ shares ofRestricted Stock (the “Restricted Stock”) subject to and upon the terms,conditions and restrictions set forth in this Agreement and the Plan.  The Restricted Stock shall be fully paid andnonassessable.

 

**2.****                                     ****Restrictions on RestrictedStock****. **The Restricted Stock shall be subject to the followingterms, conditions and restrictions:

 

(a)                                  Subject to the restrictions set forth inthe Plan and this Agreement, the Employee shall possess all incidents ofownership of the Restricted Stock.

 

(b)                                 The Restricted Stock, and the Employee’sinterest therein, may not be sold, exchanged, assigned, transferred, pledged,hypothecated, encumbered or otherwise disposed of by the Employee, except tothe Company, until the Restricted Stock has become vested as provided inSection 2(c) hereof; provided, however, that the Employee’srights with respect to the Restricted Stock may be transferred by will orpursuant to 

 

 

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                                                the laws of descent and distribution. Anypurported transfer or encumbrance in violation of this Agreement shall be void,and the other party to any such purported transaction shall not obtain anyright or interest in the Common Stock.

 

(c)                                  Subject to earlier forfeiture asdescribed in Section 2(d) hereof, the Restricted Stock shall vest on_______________, provided that the Employee has been continuously employed withthe Company as of such date [and the Compensation Committee of the Board ofDirectors of Cinergy Corp. or its delegate (the “Committee”) determines as ofsuch date that all of the performance measures set forth in Section 2(e) (the “PerformanceMeasures”) have been satisfied in full.] Notwithstanding the precedingsentence, the Restricted Stock shall immediately vest in full [(without regardto whether the Performance Measures have been satisfied)] if Employee has beencontinuously employed with the Company until the first to occur of the followingevents (provided that such events occur on or prior to _______________): (i)the Employee’s death, (ii) the Employee’s disability (as that term is definedin the Cinergy Corp. Long-Term Disability Plan), (iii) a Change in Controloccurs, (iv) the Company terminates the Employee’s employment for reasons otherthan Cause, or (v) the Employee terminates his or her employment with theCompany for Good Reason.(1)

 

(d)                                 The Employee shall forfeit his or her RestrictedStock in its entirety if he  or she ceasesto remain continuously employed by the Company until the date on which theRestricted Stock vests in accordance with Section 2(c) hereof. In the event offorfeiture, the certificate(s) representing the Restricted Stock covered bythis Agreement shall be transferred to and reacquired by the Company at no costto the Company.

 

(e)                                  For purposes of this Agreement, thefollowing terms shall have the following meanings:

 

(i)                                     “Cause” [Insert Definition of Cause]

 

(ii)                                  “Good Reason” [Insert Definition of GoodReason]

 

(iii)                               “Performance Period” shall mean theperiod beginning on _________________ and ending on _________________.

 

(iv)                              “Performance Measures” shall be asfollows:

 

                                                [Insert Performance Measures]

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(1) The vesting events forrestricted stock vary for each participant. Some restricted stock grants incorporate a cliff vesting schedule whileothers use a graded vesting schedule. The restricted stock grants incorporate some or all of the items setforth in Section 2(c).

 

 

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(f)**                                   **The Employeeshall have the right to receive, during the period commencing on the Date of Grant andending on the date the Restricted Stock vests, cash payments equal to theamount of dividends that the Employee would have received if he or she hadowned ______ shares of Common Stock during such period, which amounts shall bepaid to the Employee as soon as administratively practicable following eachrelevant dividend payment date.

 

**3.****                                     ****Certificate; Restrictive Legend****.**  The Employee agrees that the Restricted Stockshall be represented by a certificate or certificates registered in the Employee’sname and endorsed with an appropriate legend referring to the restrictions setforth in this Agreement.

 

**4.****                                     ****Retention of Stock Certificate; Dividends****.**

 

(a)                                  Thecertificate(s) representing the Restricted Stock shall be held in custody bythe Company or its agent until those shares have become vested in accordancewith Section 2(c) of this Agreement.  TheEmployee hereby appoints the Company, with full power of substitution, as theEmployee’s true and lawful attorney-in-fact with irrevocable power andauthority in the name and on behalf of the Employee to take any action andexecute all documents and instruments, including, without limitation, stockpowers which may be necessary to transfer the certificate or certificatesevidencing such forfeited shares to the Company upon such forfeiture.

 

(b)                                 Except as otherwise provided herein, fromand after the Date of Grant, [the Employee shall have all rights of ashareholder with respect to the Restricted Stock, including the right to votethe Restricted Stock and receive any dividends;] [during the period commencingon _______________ and ending on the date the Restricted Stock becomes fullyvested, any dividends that would have been paid to the Employee if he or she hadheld the Restricted Stock during such period and such stock had not beensubject to forfeiture provisions will be retained by the Company and will besubject to the provisions set forth in Section 2; if the Restricted Stockbecomes vested as provided herein, the Company shall transfer to the Employeeadditional Common Stock having a fair market value on the date of transfer equalto the dividends retained with respect to the Restricted Stock;] provided,however, that any additional Common Stock or other securities that the Employeemay become entitled to receive pursuant to a stock dividend, stock split,combination of shares, recapitalization, merger, consolidation, separation orreorganization or any other change in the capital structure of the Companyshall be subject to the same restrictions as the Restricted Stock covered bythis Agreement.

 

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**5.****                                     ****Income Taxes****. **The Employeeshall pay to the Company promptly upon request, and in any event at the timethe Employee recognizes taxable income in respect of the Restricted Stock, anamount equal to the taxes the Company determines it is required to withholdunder applicable tax laws with respect to the Restricted Stock.  Such payment shall be made in the form ofcash, shares of Common Stock already owned or withholding from shares otherwisetransferable upon the lapse of restrictions, or in a combination of suchmethods, as determined by the Employee. The Employee shall promptly notify the Company of any election made bythe Employee pursuant to Section 83(b) of the Code.

 

**6.**                                      **Deferral of RestrictedStock.**  To the extent permitted by law, the Committeemay permit the Employee to elect to defer the settlement of the RestrictedStock pursuant to such rules, procedures or programs as it may establish forpurposes of this Agreement. The Committee also may provide that the deferredsettlement includes the payment or crediting of dividend equivalents or intereston the deferred amounts.

 

**7.****                                     ****Incorporation by Reference****. **Theprovisions of the Plan are incorporated into this Agreement by reference. ThisAgreement shall be construed in accordance with the provisions of the Plan andsuch regulations as may from time to time be adopted by the Committee. Anycapitalized terms not otherwise defined in this Agreement shall have thedefinitions set forth in the Plan. The Committee shall have final authority tointerpret and construe the Plan and this Agreement and to make any and alldeterminations thereunder, and its decision shall be binding and conclusiveupon the Employee and his or her legal representative in respect of anyquestions arising under the Plan, or this Agreement. In the event of anyconflict between the provisions of the Plan and the provisions of thisAgreement, the terms, conditions and provisions of the Plan shall control, andthis Agreement shall be deemed to be modified accordingly. By signing thisAgreement, the Employee acknowledges that he or she has received a copy of thePlan and this Agreement and has had an opportunity to review the Plan and thisAgreement and agrees to be bound by all the terms and provisions of the Planand this Agreement.

 

**8.********                                  ****Notices and ElectronicDelivery and Signature****. **Except as otherwise provided by theCompany from time to time, any and all notices, designations, consents, offers,acceptances and any other communications provided for in this Agreement shallbe given in writing and shall be delivered either personally or by registeredor certified mail, postage prepaid, which shall be addressed, in the case ofCinergy Corp., to its Corporate Secretary at the principal office of CinergyCorp., in the case of the Employee, to the Employee’s address appearing on thebooks of the Company, or to the Employee’s residence or to such other addressas may be designated in writing by the Employee.  Notwithstanding theforegoing, the Employee hereby consents and agrees to electronic delivery ofany Plan documents, proxy materials, annual reports and other relateddocuments, including all materials required to be distributed pursuant toapplicable securities laws.  If theCompany establishes procedures for an

 

 

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                                                electronicsignature system for delivery and acceptance of Plan documents (includingdocuments relating to any programs adopted under the Plan), the Employee herebyconsents to such procedures and agrees that his or her electronic signature isthe same as, and shall have the same force and effect as, his or her manualsignature.  The Employee consents andagrees that any such procedures and delivery may be effected by a third partyengaged by the Company to provide administrative services related to the Plan,including any program adopted under the Plan. The Employee understands that, unless earlier revoked by the Employee,this consent shall be effective for the duration of the Agreement and that heor she shall have the right at any time to request written copies of any andall materials referred to above.

 

**9****.****                                     ****No Right to ContinuedEmployment****. **Nothing in the Plan or in this Agreementshall confer upon the Employee any right to continue in the employ of theCompany or shall interfere with or restrict in any way the right of theCompany, which is hereby expressly reserved, to remove, terminate or dischargethe Employee at any time for any reason whatsoever, with or without Cause.

 

**10.****                              ****Successors****. **The termsof this Agreement shall be binding upon and inure to the benefit of CinergyCorp., its successors and assigns, and on the Employee and the beneficiaries,executors, administrators, heirs, and successors of the Employee.

 

**11.****                              ****Invalid Provision****. **Theinvalidity or unenforceability of any particular provision of this Agreement shallnot affect the other provisions of this Agreement, and this Agreement shall beconstrued in all respects as if such invalid or unenforceable provision hasbeen omitted.

 

**1****2.****                              ****Modifications****.**No change, amendment, modification or waiver of anyprovision of this Agreement shall be valid unless the same is in writing andsigned by the parties.

 

**13.****                              ****Entire Agreement****. **ThisAgreement and the Plan contain the entire agreement and understanding of theparties with respect to the subject matter contained in this Agreement, andsupersede all prior communications, representations and negotiations in respectthereto.

 

**14.****                              ****Governing Law****.** This Agreement and the Employee’s rights under it shall be construed anddetermined in accordance with the laws of the state of Delaware.

 

**15.****                              ****Headings****. **Theheadings of the Sections of this Agreement are provided for convenience onlyand are not to serve as a basis for interpretation or construction, and shallnot constitute a part of this Agreement.

 

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**16.****                              ****Counterparts****. **ThisAgreement may be executed in counterparts, each of which shall be deemed anoriginal, but all of which together shall constitute one and the sameinstrument.

 

**17.****                              ****Compliance with Law****.**  The Companyshall make reasonable efforts to comply with all applicable federal and statesecurities laws; provided, however, notwithstanding any otherprovision of this Agreement, the Company shall not be obligated to deliver anyCommon Stock pursuant to this Agreement if the delivery thereof would result ina violation of any such law.

 

 

                IN WITNESS WHEREOF, this Agreement has been executedand delivered by the parties as of the ______ day of _______________, _____.

 

EMPLOYEE                                                                                                           CINERGYCORP.

 

 

 

Signature:  _________________________                                                  By:  __________________________

 

 

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