**Exhibit 10.FFFF**

 

**CINERGY CORP.**RETIREMENT ANDCONSULTING AGREEMENT

 

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

 

**Recitals**

 

# WHEREAS,the Executive intends to terminate voluntarily his employment and retireeffective as of June 1, 2005 (the “Termination Date”);

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# WHEREAS, inconnection with the Executive’s termination of employment, the Company iswilling to provide certain benefits to the Executive, provided that theExecutive (i) executes and does not timely revoke this Agreement and a waiverand release, in the form attached to this Agreement as Exhibit A (the “Waiver and Release”) of all claims that theExecutive might assert against the Company, its parent company, any of theirsubsidiaries and/or affiliated entities, and any successors or assigns to theforegoing (collectively, “Cinergy”) and certain related entitiesand individuals as set forth therein and (ii) complies with his obligationshereunder; and

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# WHEREAS,the parties have agreed to enter into this Agreement, which has beenspecifically negotiated between the Executive and Cinergy.

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# NOW,THEREFORE, the Company and the Executive enter into the following Agreement:

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**Agreement**

 

## 1.             Retirement.

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### a.             Termination of Employment.  The Executive will retire, and his employmentwith Cinergy will terminate, effective as of the close of business on theTermination Date.

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### b.             Effect on Other Agreements.  Effective as of the Termination Date, thisAgreement will replace and supersede any and all prior employment, separationand retirement agreements between Cinergy and the Executive, including but notlimited to the Employment Agreement between the Executive and Cinergy dated asof October 11, 2002 (the “Employment Agreement”); provided, however,that Section 3(b)(ii) of the Employment Agreement, and each provision of theEmployment Agreement that defines any defined term that is used in Section3(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 benefitprovided under Section 3(b)(ii) of the Employment Agreement shall be calculatedas if the Executive retired on February 1, 2005 if such retirement date wouldresult in the Executive receiving a larger supplemental retirement benefit thanif he retired on the first potential retirement date following the TerminationDate; provided, however, that consistent withQ&A-18(b) of IRS Notice 2005-1, any additional benefit to which theExecutive is entitled pursuant to this sentence (i) shall be treated as a

 

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### “material modification” of Section3(b)(ii) of the Employment Agreement only to the extent of such additionalbenefit, and (ii) shall be administered and distributed in a manner thatcomplies with the provisions of Section 409A of the Internal Revenue Code of1986, as amended, so as to prevent the inclusion in gross income of suchadditional benefit in a taxable year that is prior to the taxable year or yearsin which such benefit would otherwise actually be distributed or made availableto the Executive or his beneficiaries.

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## 2.             Consideration.  In exchange for entering into this Agreementand satisfying the conditions set forth herein, the Executive will receive the followingconsideration.  The benefits describedbelow in this Section only shall be provided to the Executive if he satisfieseach of the conditions specified below and, upon presentation to the Executive,the Executive timely executes and does not timely revoke the Waiver andRelease.  Notwithstanding anything hereinto the contrary, Cinergy may withhold from any amounts payable under thisAgreement such federal, state, local or other taxes as it reasonably determinesare required to be withheld pursuant to any applicable law or regulation.

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## a.             Consulting Arrangement.  In consideration for performing theconsulting services specified in Section 7, the Executive shall be provided aretainer in the amount of $1,200,000, payable in a single lump sum as soon asreasonably practicable after the expiration of the revocation period describedin the Waiver and Release.

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## b.             Restrictive Covenants.  In consideration for satisfying hisobligations pursuant to Section 9(b), the Executive shall be provided a paymentin the amount of $1,500,000, payable in a single lump sum as soon as reasonablypracticable after the expiration of the revocation period described in theWaiver and Release.

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## c.             Retirement Benefits.  In consideration for satisfying all of hisobligations under this Agreement other than those contained in Sections 7 and9(b), including but not limited to those contained in Sections 8, 9(c), 10, 11and 13, the benefits described below in this Section 2(c) shall be provided tothe Executive in a single lump sum as soon as reasonably practicable after theexpiration of the revocation period described in the Waiver and Release.

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### i.              Lump Sum Payment.  Cinergy agrees to pay the Executive a lumpsum cash payment equal to $1,659,241. The Executive acknowledges and agrees that the amount listed in thepreceding sentence includes any amount to which he would otherwise be entitledunder the Cinergy Corp. Annual Incentive Plan for the 2005 performance periodand for accrued vacation pay.

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### ii.             Relocation Benefits.  The Executive will be entitled toreimbursement from Cinergy for the reasonable costs of relocating from theCincinnati, Ohio, area to a new primary residence in a manner that isconsistent with the terms of Cinergy’s Relocation Program.  Notwithstanding the foregoing, if theExecutive becomes employed by another employer and is eligible to receiverelocation benefits under another employer-provided plan, any benefits providedto the Executive hereunder will be secondary to those provided under the otheremployer-provided relocation plan.  TheExecutive must report to Cinergy any such relocation benefits that he actuallyreceives under another employer-provided plan.

 

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## 3.             Basis for Entitlement.  The Executive acknowledges that he would notbe entitled to the benefits described in Section 2 of this Agreement absent histermination of employment, his execution of this Agreement and the Waiver andRelease and his satisfaction of his obligations under this Agreement.

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## 4.             Adequate Consideration.  The Executive agrees that the benefitsdescribed in this Agreement constitute good, valuable and sufficientconsideration for the obligations the Executive assumes herein and in theWaiver and Release.  The benefits offeredin exchange for the Executive’s execution of this Agreement and the Waiver andRelease exceed in kind and scope that to which the Executive would haveotherwise been legally entitled.

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## 5.             Future Employment.  The Executive waives any right to assert anyclaim or demand for reemployment with Cinergy.  The Executive, however, may accept an offer ofreemployment with Cinergy in the event such an offer is made.

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## 6.             Acknowledgement.  The Executive acknowledges and agrees that itis the policy of Cinergy to comply with all applicable federal, state and locallaws and regulations.  The Executiveaffirms that he has reported all compliance issues and violations of federal,state and local law or regulation or Cinergy policy of which he had knowledgeduring the term of his employment, if any. The Executive represents and acknowledges that he has no further oradditional knowledge or information regarding compliance issues or possibleviolations of federal, state or local law or regulations or Cinergy policyother than what the Executive may have previously raised, if any.

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## 7.             Consulting Arrangement.

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### a.             The Executive agrees to serve asa business consultant to Cinergy for a period of three (3) years beginning onthe Termination Date (the “Consulting Period”). The consulting services will be performed at reasonable times when and asneeded, as determined by mutual agreement between Cinergy and the Executive.

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### b.             The consulting services to beprovided by the Executive during the Consulting Period will consist ofconsultation with, and advice to, the officers and managerial employees ofCinergy, as requested by Cinergy, on matters relating to Cinergy’s businessaffairs about which the Executive has knowledge and experience, and shallinclude but not be limited to the following.

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i.              General strategicissues, including mergers and acquisitions.

 

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

 

iii.            Mentoring and executivedevelopment oversight.

 

### c.             The parties acknowledge that theExecutive (i) has unique and valuable expertise relating to Cinergy’s provisionof Broadband over Powerline Services (“BPL Services”), (ii) is currently amember of the Board and audit committee of Current Communications Group, LLCand (iii) is currently a member of the Boards of ACcess Broadband, LLC and CCBCommunications, LLC.  The Executiveagrees that the consulting services that he shall provide during the ConsultingPeriod may include overseeing Cinergy’s 

 

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### deployment of BPL Services in Cinergy’sservice territory and elsewhere through Cinergy’s investment in ACcessBroadband, LLC and CCB Communications, LLC.

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### d.             The parties understand and agreethat all of the consulting services to be provided by the Executive under thisAgreement will be performed by him as an independent contractor and not as anemployee of Cinergy.  The Executive willnot have any authority to act as an agent or representative of Cinergy, exceptto the extent expressly authorized in writing by Cinergy.  The Executive will perform his consultingservices to the best of his abilities. The Executive’s duties pursuant to this Section are purely those ofa consultant, and Cinergy is free to accept or reject his advice, as it deemsappropriate.  Cinergy is responsible forall actions it chooses to take based on the Executive’s advice, and Cinergyagrees to indemnify and hold the Executive harmless for the results of thoseactions, including all losses and damages resulting from any legal orregulatory action.

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### e.             Cinergy will reimburse theExecutive for all expenses authorized by Cinergy and incurred by the Executivein the performance of consulting services during the Consulting Period,including but not limited to telephone, duplication, secretarial services, mailand 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 byCinergy, the Executive will be reimbursed for all reasonable and customaryexpenses, including transportation, parking, food, and lodging.

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### 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 otherendeavor for profit, as he deems appropriate, provided that, in so doing, hedoes not breach any of his other obligations under this Agreement or(ii) be construed as requiring the Executive to reside or work nearCinergy’s headquarters.

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## 8.             Nondisclosure of ConfidentialInformation.  The Executive acknowledges that theinformation, observations and data obtained by him while employed by Cinergyconcerning the business or affairs of Cinergy (unless and except to the extentthe foregoing become generally known to and available for use by the publicother than as a result of the Executive’s acts or omissions to act) (hereinafterdefined as “ConfidentialInformation”) arethe property of Cinergy and he was and is required to hold in a fiduciarycapacity all Confidential Information obtained by him while employed by Cinergyfor the benefit of Cinergy as well as the successors and assigns thereof.  Therefore, the Executive agrees that he shallnot disclose any Confidential Information without the prior written consent ofthe Chief Legal Officer or the Chief Executive Officer of Cinergy Corp. (whichmay be withheld for any reason or no reason) unless and except to the extentthat such disclosure is required by any subpoena or other legal process (inwhich event the Executive will give the Chief Legal Officer of Cinergy Corp.prompt notice of such subpoena or other legal process in order to permitCinergy to seek appropriate protective orders), and that he shall not use anyConfidential Information for his own account without the prior written consentof the Chief Executive Officer of Cinergy Corp. (which may be withheld for anyreason or no reason).  As soon as practicablefollowing the last day of the Consulting Period, the Executive shall deliver tothe Company to the attention of Mr. Timothy Verhagen, Vice President, HumanResources, Cinergy Corp., 221 East Fourth Street, 30 AT II, Cincinnati, Ohio45202, all memoranda, notes, plans, records, reports, computer tapes andsoftware and other documents and data (and copies thereof) relating to theConfidential Information, or to the work product or the business of Cinergywhich he may possess or have under his control. The Executive’s 

 

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## obligations under this Section are inaddition to, and not in limitation of or preemption of, all other obligationsof confidentiality which the Executive may have to Cinergy under general legalor equitable principles, and federal, state or local law.

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## 9.             Non-Solicitation, Non-Competitionand Non-Disparagement.

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### a.             In General.  The Executive acknowledges that in the courseof his employment with Cinergy he may have become familiar with trade secretsand customer lists of, and other confidential information concerning, Cinergyand that his services have been of special, unique and extraordinary value toCinergy.

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### b.             Non-Solicitationand Non-Competition.  The Executive agrees that duringthe Consulting Period he will not in any manner, directly or indirectly, induceor attempt to induce any employee of Cinergy to quit or abandon his or heremploy.  The Executive agrees that at notime during the Consulting Period will he: (i) become employed by, enter into aconsulting arrangement with, or otherwise agree to perform personal servicesfor, a Competitor, (ii) acquire an ownership interest in a Competitor, providedthat the Executive may, for investment purposes, own not more than 3% of theoutstanding 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 ofa Competitor or otherwise call on, service or solicit competing business fromcustomers of Cinergy.  For purposes ofthis Agreement, the term “Competitor” means any person or entity that sellsgoods or services that are directly competitive with those sold by a businessthat (1) is being conducted by Cinergy at the time in question or (2) was beingconducted by Cinergy on the Termination Date. Notwithstanding anything in thepreceding sentence, goods or services will not be deemed to be competitive withthose of Cinergy solely as a result of the Executive being employed by orotherwise associated with a business that is in competition with Cinergy but asto which the Executive does not have direct or indirect responsibilities forthe products or services involved.

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### c.             Non-Disparagement.  Except as required by subpoena or other legalprocess (in which event the Executive will give the Chief Legal Officer ofCinergy Corp. prompt notice of such subpoena or other legal process in order topermit Cinergy or any affected individual to seek appropriate protectiveorders), the Executivefurther agrees that he will refrain from publishing or providing any oral orwritten 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 aredisparaging, slanderous, libelous or defamatory, or that disclose private orconfidential information about their business affairs, or that constitute anintrusion into their private lives, or that give rise to unreasonable publicityabout their private lives, or that place them in a false light before thepublic, or that constitute a misappropriation of their name or likeness.  Except as required by subpoena or other legalprocess (in which event Cinergy will give the Executive prompt notice of suchsubpoena or other legal process in order to permit the Executive to seekappropriate protective orders), Cinergy further agrees to refrain frompublishing or providing any oral or written statements about the Executive thatare disparaging, slanderous, libelous or defamatory, or that disclose privateor confidential information about his business affairs, or that constitute anintrusion into his private life, or that give rise to unreasonable publicityabout 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 thisSection, a court holds that the restrictions stated herein are unreasonableunder circumstances then existing, the parties hereto agree that the maximumperiod or scope reasonable under such circumstances will be substituted for thestated period or scope and that the court will be allowed to revise therestrictions contained herein to cover the maximum period or scope permitted bylaw.  The parties acknowledge that anyalleged breach of this Section could result in a claim for legal and/orequitable damages by the aggrieved party.

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## 10.           Cooperation With Litigation.  Upon the Company’s request, the Executiveagrees to render reasonable assistance to Cinergy in connection with anylitigation or investigation relating to Cinergy’s business, provided thatrendering such assistance does not impose an unreasonable burden on theExecutive or interfere in any significant respect with the Executive’semployment or other business pursuits following the Termination Date.  Such assistance shall include, but not belimited to, providing truthful information, attending meetings, assisting withinterrogatories, giving depositions and making court appearances.  The Executive agrees to promptly notify theChief Legal Officer of Cinergy Corp. of any requests for information ortestimony that the Executive receives in connection with any litigation orinvestigation relating to Cinergy’s business. The Company agrees to pay reasonable compensation to the Executive forthe Executive’s assistance in connection with any litigation or investigationrelating to Cinergy’s business, but only if such assistance is provided after theend of the Consulting Period.

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## 11.           Intellectual Property.  The Executive acknowledges that any and allwriting, documents, inventions (whether or not patentable), discoveries, tradesecrets, computer programs or instructions (whether in source code, objectcode, 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 orjointly 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 orlocation, 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 carriedon by Cinergy (collectively, “Intellectual Work Product”) will be the sole andexclusive property of Cinergy.  TheExecutive will promptly and fully disclose all Intellectual Work Product toCinergy.  Any Intellectual Work Productnot generally known to and available for use by the public shall be consideredto be Confidential Information as defined herein.  The Executive acknowledges that allIntellectual Work Product that is copyrightable will be considered a work madefor hire under United States Copyright Law. To the extent that any copyrightable Intellectual Work Product may notbe considered a work made for hire under the applicable provisions of theCopyright Law, or to the extent that, notwithstanding the foregoing provisions,the Executive may retain an interest in any Intellectual Work Product that isnot copyrightable, the Executive hereby irrevocably assigns and transfers toCinergy any and all right, title, or interest that the Executive may have inthe Intellectual Work Product under copyright, patent, trade secret andtrademark law, in perpetuity or for the longest period otherwise permitted bylaw, without the necessity of further consideration.  Cinergy will be entitled to obtain and holdin its own name all copyrights, patents, trade secrets and trademarks withrespect thereto.  At the sole request andexpense of Cinergy, the Executive will assist Cinergy in acquiring andmaintaining copyright, patent, trade secret and trademark protection upon, andconfirming its title to, such Intellectual Work Product.  The Executive’s assistance will includesigning all applications 

 

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## for copyright andpatent applications and other papers, cooperating in legal proceedings andtaking any other steps considered desirable by Cinergy.

 

## 12.           Breach of this Agreement.  Because the Executive’s services are uniqueand because the Executive has access to Confidential Information andIntellectual Work Product, the parties agree that Cinergy would be damagedirreparably in the event any of the provisions of Sections 8, 9, 10, 11 and 13were not performed in accordance with their specific terms or were otherwisebreached and that money damages would be an inadequate remedy for any suchnon-performance or breach.  In the eventthat the Executive breaches or threatens to breach any provision of thisAgreement or the Waiver and Release, the Executive agrees that Cinergy shall beentitled to seek any and all equitable and legal relief provided by law,specifically including immediate and permanent injunctive relief to prevent anybreach or threatened breach of any of such provisions and to enforce suchprovisions specifically (without posting a bond or other security).  The Executive hereby waives any claim thatCinergy has an adequate remedy at law. In addition, and to the extent not prohibited by law, the Executiveagrees that Cinergy shall be entitled to an award of all costs and attorneys’fees reasonably incurred by Cinergy in any successful effort to enforce theterms of this Agreement.  The Executiveagrees that the foregoing relief shall not be construed to limit or otherwiserestrict 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 claimsthat he has waived in the Waiver and Release or otherwise breaches thisAgreement, (i) the Executive agrees to immediately reimburse the Company forall amounts received by the Executive pursuant to this Agreement to the fullestextent permitted by law, and (ii) the Company will be relieved of any and allobligations to make future payments to the Executive pursuant to thisAgreement.

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## 13.           Return of Corporate Property.  Except as otherwise provided in thisAgreement, the Executive agrees to return to Cinergy all keys, identificationbadges, electronic passes, credit cards, computer programs, and other propertybelonging to Cinergy when requested and to do so by Cinergy’s representative.

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## 14.           ContinuingObligations.  The Executivehereby affirms and acknowledges the Executive’s continuing obligations tocomply with the post-termination covenants contained in this Agreement,including, but not limited to, the provisions of Sections 7, 8, 9, 10, 11, 12and 13 of this Agreement and the Waiver and Release.  The Executive acknowledges that therestrictions contained therein are valid and reasonable in every respect, arenecessary to protect Cinergy’s legitimate business interests and herebyaffirmatively waives any claim or defense to the contrary.

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## 15.           NoAdmission of Liability. The parties acknowledge that this Agreement is entered into solely forthe purpose of ending their employment relationship on an amicable basis andshall not be construed as an admission of liability or wrongdoing by any partyand that each party expressly denies any such liability or wrongdoing.

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## 16.           NoReliance.           TheExecutive does not rely, and has not relied, upon any representation orstatement made by Cinergy or by any of Cinergy’s employees, officers, agents,stockholders, directors or attorneys with regard to the subject matter, basisor effect of this Agreement other than those specifically containedherein.  The Executive expressly agreesto defend, indemnify and hold harmless Cinergy and its directors, officers,employees, agents, representatives and insurers from and against any and alltax assessments, tax liens, penalties or interest assessed by the InternalRevenue Service, or any other federal, state or 

 

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## local taxing authority against theExecutive on account of, arising out of or in any way connected with thisAgreement.  Notwithstanding theforegoing, inthe event that any benefits paid or payable to the Executive or for his benefitpursuant to the terms of this Agreement or any other plan or arrangement inconnection with, or arising out of, his employment with Cinergy or a change inownership or effective control of Cinergy or of a substantial portion of itsassets (“Payments”) would be subject to any excise tax pursuant to Section4999 of the Internal Revenue Code of 1986, as amended, then the Executivewill be entitled to receive an additional payment (a “Gross-Up Payment”) in anamount such that after payment by the Executive of all taxes (including anyinterest, penalties, additional tax, or similar items imposed with respectthereto and the excise tax), including any excise tax imposed upon the Gross-UpPayment, the Executive retains an amount of the Gross-Up Payment equal tothe excise tax imposed upon or assessable against the Executive dueto the Payments.

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## 17.           Severability.  The parties agree that each and everyparagraph, sentence, clause, term and provision of this Agreement is severableand that, if any portion of this Agreement should be deemed not enforceable forany reason, such portion shall be stricken and the remaining portion orportions thereof should continue to be enforced to the fullest extent permittedby applicable law.

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## 18.           Consultation With AttorneyAdvised.  The Executive is advised to consult with anattorney prior to executing this Agreement.  The Executive acknowledges being given thatadvice.  The Executive represents that hehas read and fully understands all of the provisions of this Agreement.  The Executive represents that he isvoluntarily signing this Agreement.

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## 19.           Binding Effect of Agreement.   This Agreement, once signed by each of theExecutive and the Chief Executive Officer of Cinergy Corp., will be binding upon and willoperate for the benefit of the heirs, executors, administrators, assigns, andsuccessors 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 orrestructuring of any part of Cinergy’s business) and/or ownership, Cinergy willensure that the contract language pertaining to the transaction confirms thecontinuing liability of Cinergy (and its assigns and successors in interest) tothe Executive under this Agreement.  TheExecutive agrees that Cinergy Services, Inc. (and/or any of its authorizedemployees) is authorized to act for Cinergy with respect to all aspectspertaining to this Agreement, including the administration and interpretationof this Agreement.

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## 20.           Complete Agreement.  Except as otherwise expressly provided in thisAgreement, the terms of this Agreement constitute the entire Agreement betweenthe parties and supersede all previous communications, representations, andagreements, oral or written, between the parties with respect to the subjectmatter of this Agreement.  No agreementor understanding modifying this Agreement will be binding on either partyunless it is in writing and signed by an authorized representative of the partysought to be bound.  If any part of thisAgreement is adjudged by a court of competent jurisdiction (or thearbitrator(s) pursuant to Section 21) to be contrary to law, then thisAgreement will, in all other respects, remain effective and binding to the fullextent permitted by law.

 

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## 21.           Arbitration.

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

 

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

 

c.             The expenses of arbitration will be borneequally by the Executive and the Company, and each party will bear its owncosts, including attorneys’ fees; provided, however, that the arbitrator shallhave the power to award such expenses and costs, including attorneys’ fees, tothe prevailing party in accordance with applicable law and to require Cinergyat the beginning of the proceedings to fully or partially reimburse (or providean advance to) the Executive for expenses (but not for costs, includingattorneys’ fees) in the event the Executive can demonstrate that the amount ofthe expenses is an unreasonable impediment to adjudication of his claims inarbitration.  If the arbitrator awards amonetary amount to either party in excess of $1,000,000, the party against whomthe award was made may seek judicial resolution of the dispute under a de novostandard before any court with appropriate jurisdiction over the matter.

 

d.             Notwithstandingthe foregoing, Cinergy shall not be required to seek or participate in arbitrationregarding any breach by the Executive of his agreements in Sections 8, 9, 10,11 or 13****hereof, but may pursue its remediesfor such breach in a court of competent jurisdiction in Cincinnati, Ohio.  Any arbitration or action pursuant to thisSection will be governed by and construed in accordance with the substantivelaws of the State of Ohio, without giving effect to the principles of conflictof 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 anyprinciples of conflicts of laws.

 

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IN WITNESSWHEREOF, the parties have caused this Agreement to be executed, effective as ofthe 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 |   |
|                         |                                       |  |  |  |

 

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**EXHIBIT A**

 

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**WAIVER AND RELEASE AGREEMENT**

 

**THIS WAIVER AND RELEASE AGREEMENT** (this “Waiver and Release”) is entered into by and betweenWilliam 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 May5, 2005 (the “Agreement”);

 

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

 

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

 

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

 

**NOW, THEREFORE**, in consideration of the promises and agreements containedherein and other good and valuable consideration, the sufficiency and receiptof which are hereby acknowledged, and intending to be legally bound, theParties agree as follows:

 

## 1.             This Waiver and Release iseffective on the date hereof and will continue in effect as provided herein.

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2.             Inconsideration of the payments to be made and the benefits to be received by theExecutive pursuant to the Agreement (the “Benefits”), which the Executiveacknowledges are in addition to payment and benefits to which the Executivewould be entitled to but for the Agreement, the Executive, on behalf ofhimself, his heirs, representatives, agents and assigns by dower or otherwisehereby COVENANTS NOT TO SUE OR OTHERWISE VOLUNTARILY PARTICIPATE IN ANY LAWSUITAGAINST, FULLY RELEASES, INDEMNIFIES, HOLDS HARMLESS and OTHERWISE FOREVERDISCHARGES (i) Cinergy, (ii) its compensation, benefit, incentive (including,but not limited to, individual incentive, annual incentive, long-term incentiveand annual bonus), pension, welfare and other plans and arrangements, and anypredecessor or successor to any such plans and arrangements and (iii) any ofits current or former officers, directors, agents, executives, employees,attorneys, insurers, shareholders, predecessors, successors or assigns, fromany and all actions, charges, claims, demands, damages or liabilities of anykind or character whatsoever, known or unknown, which the Executive now has ormay have had whether or not based on or arising out of the Executive’semployment relationship with Cinergy or the termination of that employmentrelationship through the date of execution of this Waiver and Release, otherthan workers’ compensation claims filed prior to the date of execution of thisWaiver and Release.  The Executiveacknowledges and understands that in the event the Executive files a charge orcomplaint with the Equal Employment Opportunity Commission (“EEOC”), the OhioCivil Rights Commission (“OCRC”), the Indiana Civil Rights Commission (“ICRC”),

 

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

 

## a.             Thosearising under any federal, state or local statute, ordinance or common lawgoverning or relating to the Parties’ employment relationship including, butnot limited to, (i) any claims on account of, arising out of or in any wayconnected with the Executive’s hiring by Cinergy, employment with Cinergy orthe termination of that employment; (ii) any claims alleged or which could havebeen alleged in any charge or complaint against Cinergy, including, but notlimited to, those with the EEOC, OCRC, ICRC, TWCCRD, OSHA and the Secretary ofLabor; (iii) any claims relating to the conduct, including action or inaction,of any executive, employee, officer, director, agent or other representative ofCinergy; (iv) any claims of discrimination, harassment or retaliation on anybasis; (v) any claims arising from any legal restrictions on an employer’sright 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 orother 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 orother dispute resolution process, regardless of forum (judicial, arbitral orother), against any employee, officer, director, agent or other representativeof Cinergy; (ix) any claim for, or right to, arbitration, and any claim allegedor which could have been alleged in any charge, complaint or request forarbitration against Cinergy; (x) any claim on account of, arising out of or inany way connected with any employment agreement between the Executive andCinergy; (xi) any claim on account of, arising out of or in any way connectedwith 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 orother welfare benefit plan coverage; and (xiii) all other causes of actionsounding in contract, tort or other common law basis, including, but notlimited to: (a) the breach of any alleged oral or written contract; (b)negligent or intentional misrepresentations; (c) wrongful discharge; (d) justcause dismissal; (e) defamation; (f) interference with contract or businessrelationship; (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 ofprivacy; (q) whistleblower claims; and (r) negligence, negligent hiring,retention or supervision; and

##  

b.             Thosearising under any law relating to sex, age, race, color, religion, handicap ordisability, harassment, veteran status, sexual orientation, retaliation, ornational origin or Appalachian origin discrimination including, without 

 

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limitation, any rights or claims arising under Title VII of the CivilRights Act of 1866 and 1964, as amended, 42 U.S.C. §§ 1981 and 2000(e) etseq.; the Civil Rights Act of 1991; the Age Discrimination in EmploymentAct of 1967, as amended, 29 U.S.C. §§ 621 etseq., as amended bythe Older Workers Benefit Protection Act; the Americans with Disabilities Actof 1990, as amended, 42 U.S.C. §§ 12,101 etseq.; Sections 806and 1107 of the Sarbanes-Oxley Act of 2002; the Fair Labor Standards Act of1938, 29 U.S.C. §§ 201 etseq.; the National Labor Relations Act,29 U.S.C. §§ 151 etseq.; the Occupational Safety and Health Act,29 U.S.C. §§ 651 etseq.; the Worker Adjustment and Retraining NotificationAct, 29 U.S.C. §§ 2101, etseq.; Ohio Civil Rights Statutes, OhioRevised Code Chapter 4112 etseq.; the Ohio Whistleblower Act,Ohio Revised Code § 4113.51, etseq.; Ohio Workers’ CompensationRetaliation Statute, Ohio Revised Code § 4123.90; the Indiana Civil Rights Act,IC § 22-9-1-12.1 etseq.; Indiana Equal Pay Statute, IC §20-8.1-6.1 etseq.; Indiana Workers’ Compensation Statute, IC §22-3-1-1 etseq., Indiana Whistleblower Statute, IC § 22-5-3-3 etseq.; 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 suchstatutes may be amended from time to time; and

 

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

 

d.             Thosearising out of the Family and Medical Leave Act, 29 U.S.C. §§ 2601 etseq.;and

 

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

 

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

 

## g.             Anyother federal or state statute that affords employees or individuals protectionof any kind whatsoever.

##  

## 3.             The Parties acknowledge that itis their mutual and specific intent that this Waiver and Release fully complieswith 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 herebyacknowledges that:

##  

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

 

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

 

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## c.             TheExecutive waives any right to assert any claim or demand for reemployment withCinergy.

##  

## 4.             The Parties agree that thisWaiver and Release shall not become effective and enforceable until the datethis Waiver and Release is signed by both Parties or seven (7) calendar daysafter its execution by the Executive, whichever is later.  The Executive may revoke this Waiver andRelease for any reason by providing written notice of such intent to theCompany within seven (7) days after he has signed this Waiver and Release,thereby forfeiting the Executive’s right to receive any Benefits and renderingthis Waiver and Release null and void in its entirety.

##  

## 5.             The Executive hereby affirms andacknowledges his continued obligations to comply with the post-terminationcovenants contained in the Agreement, including but not limited to, theprovisions of Sections 8, 9, 10, 11, 12 and 13 of the Agreement.  The Executive acknowledges that therestrictions contained therein are valid and reasonable in every respect, arenecessary to protect Cinergy’s legitimate business interests and herebyaffirmatively waives any claim or defense to the contrary.

##  

## 6.             In the event that the Executivebreaches or threatens to breach any provision of this Waiver and Release, heagrees that Cinergy shall be entitled to seek any and all equitable and legalrelief provided by law, specifically including immediate and permanentinjunctive relief.  The Executive herebywaives any claim that Cinergy has an adequate remedy at law.  In addition, and to the extent not prohibitedby law, the Executive agrees that Cinergy shall be entitled to an award of all costsand attorneys’ fees incurred by Cinergy in any successful effort to enforce theterms of this Waiver and Release.  The Executiveagrees that the foregoing relief shall not be construed to limit or otherwiserestrict 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 claimsagainst the Company subject to the foregoing Waiver and Release, the Executiveagrees to immediately reimburse the Company for the value of all Benefitsreceived to the fullest extent permitted by law.

##  

## 7.             Cinergy hereby releases theExecutive, his heirs, representatives, agents and assigns from any and allknown claims, causes of action, grievances, damages and demands of any kind ornature based on acts or omissions committed by the Executive during and in thecourse of his employment with the Company provided such act or omission wascommitted in good faith and occurred within the scope of his normal duties andresponsibilities.

##  

## 8.             The Parties acknowledge thatthis Waiver and Release is entered into solely for the purpose of ending theiremployment relationship on an amicable basis and shall not be construed as anadmission of liability or wrongdoing by either Party and that both Cinergy and theExecutive have expressly denied any such liability or wrongdoing.

##  

## 9.             Each of the promises andobligations shall be binding upon and shall inure to the benefit of the heirs,executors, administrators, assigns and successors in interest of each of theParties.

 

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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, ifany portion of this Waiver and Release should be deemed not enforceable for anyreason, such portion shall be stricken and the remaining portion or portionsthereof should continue to be enforced to the fullest extent permitted byapplicable law.

##  

## 11.           This Waiver and Release shall be governed by and interpretedin accordance with the laws of the State of Ohio without regard to anyapplicable state’s choice of law provisions.

##  

## 12.           The Executive represents and acknowledges that in signingthis Waiver and Release he does not rely, and has not relied, upon anyrepresentation or statement made by Cinergy or by any of Cinergy’s employees,officers, agents, stockholders, directors or attorneys with regard to thesubject matter, basis or effect of this Waiver and Release other than thosespecifically contained herein.

##  

## 13.           This Waiver and Release represents the entire agreementbetween the Parties concerning the subject matter hereof, shall supersede anyand all prior agreements which may otherwise exist between them concerning thesubject matter hereof (specifically excluding, however, the post-terminationobligations contained in the Agreement or any other legally-binding document),and shall not be altered, amended, modified or otherwise changed except by awriting executed by both Parties.

##  

## 14.           Capitalized words and terms used throughout this Waiver andRelease that are not defined in this Waiver and Release shall have the meaninggiven to such word or term in the Agreement.

 

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**PLEASE READ CAREFULLY.  WITH RESPECT TO THE EMPLOYEE, THIS**

 

**WAIVER AND RELEASE INCLUDES A COMPLETERELEASE OF ALL KNOWN**

 

**AND UNKNOWN CLAIMS.**

 

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

 
| 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 |   |
|          |                         |  |  |  |  |  |  |  |

 

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