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**EXHIBIT 10(AA)(3)**

 

**CLECO CORPORATIONEXECUTIVE EMPLOYMENT AGREEMENT(Level 2 - Form B with a Principal Employer)**

**THIS AGREEMENT** (the"Agreement") is entered into by and between **Samuel H. Charlton III** ("Executive") Cleco Corporation, a corporation organizedand existing under the laws of the State of Louisiana (the"Company"), and **Cleco Midstream resources LLC**, an affiliateof  the Company that acts as Executive's principal employer (the"Principal Employer"), and is intended to amend and restate, with theexception of the term defined therein, that certain Executive SeveranceAgreement between **Cleco Midstream Resources LLC**and Executive, initiallyeffective as of July 28, 2000.

**1.  EMPLOYMENT AND TERM**

**1.1      Position. **The Principal Employer shall employ and retain Executive asits **Sr. Vice President - Asset Management** or in such othercapacity or capacities as shall be mutually agreed upon, from time to time, byExecutive and the Principal Employer (or the Company, as the case may be), andExecutive agrees to be so employed, subject to the terms and conditions setforth herein.  References herein to the Company shall be deemed to includeExecutive's Principal Employer, unless the context clearly indicates to thecontrary.  ** **

Executive's duties and responsibilitiesshall be those assigned to him or her, from time to time, by the ChiefFinancial Officer of the Company and shall include such duties as are the typeand nature normally assigned to similar executive or senior officers of acorporation of the size, type and stature of the Principal Employer. Executive shall report to the Chief Financial Officer of the Company. ** **

**1.2      Full Time and Attention. **During the term of this Agreement and anyextensions or renewals thereof, Executive shall devote his or her full time,attention and energies to the business of the Company and will not, without theprior written consent of the Chief Executive Officer of the Company, be engaged(whether or not during normal business hours) in any other business orprofessional activity, whether or not such activities are pursued for gain,profit or other pecuniary advantage.  

Notwithstanding the foregoing, Executive shall notbe prevented from (a) engaging in any civic or charitable activity for whichExecutive receives no compensation or other pecuniary advantage, (b) investinghis or her personal assets in businesses which do not compete with the Company,provided that such investment will not require any services on the part ofExecutive in the operation of the affairs of the businesses in whichinvestments are made and provided further that Executive's participation insuch businesses is solely that of an investor, or (c) purchasing securities inany corporation whose securities are regularly traded, provided that suchpurchases will not result in Executive owning beneficially at any time 5% ormore of the equity securities of any corporation engaged in a businesscompetitive with that of the Company. 

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**1.3      Term.**  Executive's employment under this Agreement shall commence asof July 28, 2000 (the "Effective Date"), and shall terminate on July28, 2003 (such date or the last day of employment specified in any renewal oramendment hereof referred to herein as the "Termination Date") (theperiod commencing as of the Effective Date and ending as of the TerminationDate referred to herein as the "Employment Term").  

Commencing on the  second anniversaryof the Effective Date and each anniversary thereafter, Executive's EmploymentTerm shall automatically be extended for an additional one‐year period;provided, however, that either party may provide written notice to the otherthat the Employment Term will not be further extended, such notice to beprovided not later than 30 days prior to the end of the then‐currentEmployment Term.  

**                                           2.  COMPENSATION AND BENEFITS**

**2.1      Base Compensation.**   The Company shall pay Executive an annualsalary equal to his or her annual base salary in effect as of the EffectiveDate, such amount shall be prorated and paid in equal installments inaccordance with the Company's regular payroll practices and policies and shallbe subject to applicable withholding and other applicable taxes (Executive's"Base Compensation").  Executive's Base Compensation shall bereviewed no less often than annually and may be increased or reduced by the ChiefExecutive Officer of the Company, in his sole discretion; provided, however,that Executive's Base Compensation may not be reduced at any time unless suchreduction is part of a reduction in pay uniformly applicable to all similarlysituated executives of the Company.  

**2.2      Annual Incentive Bonus.**   In addition to the foregoing, Executiveshall be eligible for participation in the Annual Incentive Compensation Planor similar bonus arrangement maintained by the Company or an Affiliate (asdefined in Section 6.17) or such other bonus or incentive plans which theCompany or its Affiliates may adopt, from time to time, for similarly situatedexecutives (an "Incentive Bonus").  Such participation shall bein accordance with the specific terms and conditions of such plan.  

**2.3      Long-Term Incentives. **In addition to the foregoing, Executive shallbe eligible for participation in the 2000 Long-Term Incentive Compensation Planmaintained by the Company and such other long-term incentive plans which theCompany or its Affiliates may adopt, from time to time, for similarly situatedexecutives (a "Long-Term Incentive"). Such participation shall be inaccordance with the specific terms and conditions of such plan.  

**2.4      Supplemental Retirement Benefit. **In addition to the foregoing,Executive shall be eligible to participate in the Supplemental ExecutiveRetirement Plan maintained by Cleco Utility Group Inc. or such othersupplemental retirement benefit plans which the Company or its Affiliates 

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may adopt, from time to time, for similarly situatedexecutives (the "Supplemental Plan"). Such participation shall be inaccordance with the specific terms and conditions of such plan.  

**2.5      Other Benefits.** During the term of this Agreement and in addition to theamounts otherwise provided herein, Executive shall participate in such plans,policies, and programs as may be maintained, from time to time, by the Companyor its Affiliates for the benefit of similarly situated executives oremployees, including, without limitation, profit sharing, life insurance, andgroup medical and other welfare benefit plans.  Any such benefits shall bedetermined in accordance with the specific terms and conditions of thedocuments evidencing any such plans, policies, and programs. 

**2.6      Reimbursement of Expenses.**   The Company shall reimburseExecutive for such reasonable and necessary expenses as are incurred incarrying out his or her duties hereunder, consistent with the Company'sstandard policies and annual budget.  The Company's obligation toreimburse Executive hereunder shall be contingent upon the presentment byExecutive of an itemized accounting of such expenditures.

                                                            **3.  TERMINATION**

**3.1      Termination Payments to Executive.**  As set forth more fully in thisSection 3 and except as provided in Section 3.3 and 3.8 hereof, Executive shallbe paid the greater of the amounts or benefits set forth below or the amountsor benefits provided under the terms of the separate plan or arrangementmaintained by the Company (or its Affiliates) on account of termination ofemployment hereunder:

a.        Executive's Base Compensation accrued but not yet paid as of the date of his orher termination.  

b.        An amount equal to 100% of Executive's Base Compensation, determined at thetime of termination, but immediately prior to any reduction in suchcompensation.

c.        An amount equal to Executive's Incentive Bonus, determined with respect to theyear of his or her termination and prorated to reflect Executive's actualperiod of service during such year.** **

d.        An amount equal to Executive's Incentive Bonus, determined as the target amountfor the year in which his or her termination of employment occurs. 

e.        The Company shall, at the written request of Executive:

i.         Purchase his or her principal residence if such residence is located within 60miles of the business location Executive was assigned to prior to termination 

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of employment (the "PrincipalResidence") for an amount equal to the greater of (1) the purchase priceof such Principal Residence plus the documented cost of any capitalimprovements to the Principal Residence made by Executive, or (2) the fairmarket value of such Principal Residence as determined by the Company's usualrelocation practice; and 

ii.         Pay or reimburse Executive for the cost of relocating Executive, his or herfamily and their household goods and other personal property, in accordancewith the Company's usual relocation practice, to any location in thecontinental United States.  

Notwithstanding the foregoing, theCompany shall not be obligated hereunder, unless, within 12 months after thetermination of his or her employment with the Company (and its Affiliates), theCompany is requested to purchase such Principal Residence and Executive hasactually relocated from such geographic area.

f.         If Executive and/or his or her dependents elects to continue group medicalcoverage, within the meaning of Code Section 4980B(f)(2), with respect to agroup health plan sponsored by the Company or an Affiliate (other than a healthflexible spending account under a self-insured medical reimbursement plandescribed in Code Sections 125 and 105(h)), the Company shall pay thecontinuation coverage premium for the same type and level of group health plancoverage received by Executive and his or her electing dependents immediatelyprior to such termination of Executive's employment for the maximum periodprovided under Code Section 4980B or until the Executive secures otheremployment where group health insurance is provided, whichever period isshorter. 

Except as expressly provided in Section3.3 hereof, Executive shall also be entitled to receive such compensation orbenefits as may be provided under the terms of a separate plan or agreementmaintained by the Company (or its Affiliates) to the extent such compensationor benefits are not duplicative of the compensation or benefits describedabove.

**3.2      Termination for Death or Disability**.  If Executive dies or becomesdisabled during the Employment Term, this Agreement and Executive's employmenthereunder shall immediately terminate and the Company's obligations hereundershall automatically cease.  In such event, the Company shall pay toExecutive (or his or her estate) the compensation described in Sections 3.1aand the additional amount described in Section 3.1c hereof.  Payment shallbe made in the form of one or more single-sums as soon as practicable afterExecutive's death or disability or as and when such amounts are ascertainable.

For purposes of this Section 3.2,Executive shall generally be deemed "disabled" if he or she isactually receiving benefits or is eligible to receive benefits under theCompany's (or an Affiliate's) 

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separate long-term disability plan or he or she is actuallyreceiving Social Security disability benefits. The Company shall determinewhether Executive is disabled hereunder.

**3.3      Company's Termination for Cause. **This Agreement and Executive'semployment hereunder may be terminated by the Company on account ofCause.  In such event, the Company shall pay to Executive the compensationdescribed in Section 3.1a hereof.  Payment shall be made in the form of asingle-sum not later than three days after such termination. Notwithstanding any provision of this Agreement or any other plan, policy oragreement evidencing any other compensation arrangement or benefit payable toExecutive, no additional amount shall be paid to Executive, except as may berequired by law.

For purposes of this Agreement,"Cause" means that Executive has:

a.        Committed an intentional act of fraud, embezzlement or theft in the course ofhis or her employment or otherwise engaged in any intentional misconduct whichis materially injurious to the Company's (or an Affiliate's) financialcondition or business reputation;

b.        Committed intentional damage to the property of the Company (or an Affiliate) orcommitted intentional wrongful disclosure  of Confidential Information (asdefined  in Section 5.2) which is materially injurious to the Company's(or an Affiliate's) financial condition or business reputation; 

c.        Intentionally refused to perform the material duties of his or her position; or

d.        A material breach of this Agreement by Executive.

No act or failure to act on the part ofExecutive will be deemed "intentional" if it was due primarily to anerror in judgment or negligence, but will be deemed "intentional"only if done or omitted to be done by Executive not in good faith and withoutreasonable belief that his or her action or omission was in the best interestof the Company (or an Affiliate).  

The Company, acting in good faith, maydetermine that any termination by the Company is on account of Cause.  TheCompany shall provide written notice to Executive, including a description ofthe specific reasons for the determination of Cause.  Executive shall havethe opportunity to present arguments and evidence on his or her behalf to theChief Executive Officer. Following such presentation (or upon Executive'sfailure to appear) the Chief Executive Officer shall confirm that the actionsor inactions of Executive constitute Cause hereunder.

**3.4      Executive's Constructive Termination. **Executive may terminate thisAgreement and his or her employment hereunder on account of a ConstructiveTermination upon 30 days prior written notice to the Chief Executive Officer(or such shorter period as may be agreed upon by the 

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parties hereto).  In such event, the Company shallprovide to Executive the compensation described in Section 3.1a hereof, payablenot later than three days after his or her termination of employment and thefollowing: (a) the additional amounts determined under Sections 3.1b and 3.1dhereof, payable in not more than two equal installments, one-half not laterthan 30 days after termination and the other one-half six months after suchtermination, and (b) the benefits described in Sections 3.1e and 3.1fhereof.  

For purposes of this Agreement,"Constructive Termination" means:

a.        A material reduction (other than a reduction in pay uniformly applicable to allsimilarly situated executives of the Company) in the amount of Executive's BaseCompensation; 

b.        A material reduction in Executive's authority, duties or responsibilities fromthose contemplated in Section 1.1 of this Agreement; or

c.        A material breach of this Agreement by the Company or its Affiliates.

No event or condition described in thisSection 3.4 shall constitute a Constructive Termination unless (a) Executivepromptly gives the Company notice of his or her objection to such event orcondition, which notice may be provided orally or in writing to the ChiefExecutive Officer or his designee, (b) such event or condition is not correctedby the Company promptly after receipt  of such notice, but in no eventmore than 30 days  after receipt of notice, and (c) Executive resigns hisor her employment with the Company (and all Affiliates) not more than 15 daysfollowing the expiration of the 30-day period described in subparagraph (b)hereof.  

**3.5      Termination by the Company, without Cause.**  The Company may terminatethis Agreement and Executive's employment hereunder, without Cause, upon 30days prior written notice to Executive (or such shorter period as may be agreedupon by Executive and the Chief Executive Officer).  In such event, theCompany shall provide to Executive the compensation described in Section 3.1ahereof, payable not later than three days after such termination, and thefollowing additional amounts and/or benefits: (a) the amounts determined underSections 3.1b and 3.1d hereof, payable in not more than two equal installments,one-half not later than 30 days after termination and the other one-half sixmonths after such termination, and (b) the benefits described in Sections 3.1eand 3.1f hereof.

**3.6      Termination by Executive.**  Executive may terminate this Agreement andhis or her employment hereunder, other than on account of ConstructiveTermination, upon 30 days prior written notice to the Company or such shorterperiod as may be agreed upon by the Chief Executive Officer andExecutive.  In such event, the Company shall pay to Executive thecompensation described in Section 3.1a hereof.  Payment shall be made inthe form of a single-sum not later than three days after suchtermination.  No additional payments or benefits shall be due hereunder,except 

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as may be provided under a separate plan, policy or programevidencing such compensation arrangement or benefit or as may be required bylaw.

**3.7      Return of Property.**  Upon termination of this Agreement for anyreason, Executive shall promptly return to the Company all of the property ofthe Company (and its Affiliates), including, without limitation, automobiles,equipment, computers, fax machines, portable telephones, printers, software,credit cards, manuals, customer lists, financial data, letters, notes,notebooks, reports and copies of any of the above and any ConfidentialInformation (as defined in Section 5.2 hereof) that is in the possession orunder the control of Executive. 

**3.8      Consideration for Other Agreements.**  Executive acknowledges that allor a portion of the amount payable under Section 3.1d hereof is in addition tothe amount otherwise due or payable under the Annual Incentive CompensationPlan on account of a separation from service and that the payment of suchadditional amount is intended to and shall constitute adequate considerationfor the execution of such separate waivers or releases as the Company (or itsAffiliates) may request Executive to execute in connection with the terminationof his or her employment hereunder.  Executive agrees that failure toexecute any such waiver or release within the time requested by the Companyshall result in the forfeiture of the additional amount payable under Section3.1d hereof.

                       **4.  CHANGE IN CONTROL AND BUSINESS TRANSACTION**

**4.1      Definitions.  **The term "Change in Control" and"Business Transaction" shall have the meanings ascribed to them inthe Cleco Corporation 2000 Long-Term Incentive Compensation Plan, as the samemay be amended from time to time.

The term "Good Reason," whenused  herein,  shall mean that in connection with a  Change inControl: 

a.        Executive's Base Compensation in effect immediately before such Change inControl is reduced or there is a significant reduction or termination ofExecutive's rights to any employee benefit in effect immediately prior to theChange in Control;

b.        Executive's authority, duties or responsibilities are significantly reducedfrom those contemplated in Section 1.1 hereof or  Executive has reasonablydetermined that, as  a result of a change in circumstances thatsignificantly affects his or her employment with the Company (or an Affiliate),he or she is unable to exercise the authority, power, duties andresponsibilities contemplated in Section 1.1 hereof;

c.        Executive is required to be away from his or her office in the course ofdischarging his or her duties and responsibilities under this Agreement significantlymore than was required prior to the Change in Control; or

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d.        Executive is required to transfer to an office or business location locatedmore than 60 miles from the location he or she was assigned to prior to theChange in Control.

No event or condition described in thisSection 4.1 shall constitute Good Reason unless (a) Executive gives the Companynotice of his or her objection to such event or condition within a reasonableperiod after Executive learns of such event, which notice may be deliveredorally or in writing to the Chief Executive Officer, (b) such event orcondition is not promptly corrected by the Company, but in no event later than30 days after receipt of such notice, and (c) Executive resigns his or heremployment with the Company (and its Affiliates) not more than 60 daysfollowing the expiration of the 30-day period described in subparagraph (b)hereof.   

**4.2      Termination In Connection With a Change in Control.**  If a Change inControl occurs prior to the expiration of the Employment Term and at any timewithin the 60-day period preceding or 36-month period following such Change inControl, Executive's employment described herein is terminated by the Company,without Cause (as defined in Section 3.3 hereof), or Executive terminates hisor her employment hereunder for Good Reason, then notwithstanding any provision of this Agreement to the contrary and in lieu of any compensation orbenefits otherwise payable hereunder:

a.        The Company shall pay to Executive the compensation described in Section 3.1ain the form of a single-sum not later than three days after such termination.

b.        The Company shall pay an amount equal to three times Executive's "baseamount," payable in the form of a single-sum not later than 30 days aftersuch termination.  For purposes of this agreement, "base amount"is defined as the Executive's current annual base compensation and targetannual bonus.

c.        The Company shall provide the benefits described in Sections 3.1e and 3.1f. 

d.        Vesting shall be accelerated, any restrictions shall lapse, and all performanceobjectives shall be deemed satisfied as to any outstanding grants or awardsmade to Executive under the 2000 Long-Term Incentive Compensation Plan and/orthe 1990 Long-Term Incentive Compensation Plan.  Executive shall beentitled to such additional benefits or rights as may be provided in thedocuments evidencing such plans or the terms of any agreement evidencing suchgrant or award.

e.        Executive shall be fully vested for purposes of any service or similarrequirement imposed under the Supplemental Plan, regardless of the actualnumber of years of service attained by Executive; Executive shall be creditedwith an additional three years of age for purposes of determining his or herbenefit percentage under the Supplemental Plan, but in no event shall suchbenefit percentage be less than 50%; and Executive shall be credited with anadditional three years of age for purposes of 

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determining any reduction taken withrespect to benefits commencing before Executive's normal retirement date (asdefined in such plan).

**4.3             Business Transaction.** If Executive's employment hereunder is terminated(other than on account of Cause as defined in Section 3.3 hereof) in connectionwith a Business Transaction, then notwithstanding any provision of thisAgreement to the contrary, the Company shall pay or provide to Executivebenefits as described in Section 4.2.

**4.4**      **Tax Payment.** If any payment to Executive pursuant to thisAgreement or any other payment or benefit from the Company or an Affiliate inconnection with a Change in Control or Business Transaction is subject to theexcise tax imposed under Code Section 4999 or any similar excise or penalty taxpayable under any United States federal, state, local or other law, the Companyshall pay an amount to Executive such that, after the payment by Executive ofall taxes on such amount, there remains a balance sufficient to pay such exciseor penalty tax.  Executive shall submit to the Company the amount to bepaid under this Section 4.4, together with supporting documentation.  IfExecutive and the Company disagree as to such amount, an independent publicaccounting firm agreed upon by Executive and the Company shall make suchdetermination. 

**5.  LIMITATIONS ON ACTIVITIES**

**5.1      Consideration for Limitation on Activities.**  Executive acknowledgesthat the execution of this Agreement and the payments described hereinconstitute consideration for the limitations on activities set forth in thisSection 5, the adequacy of which is hereby expressly acknowledged by Executive.

**5.2      Confidential Information. **Executive recognizes and acknowledges thatduring the terms of his or her employment, he or she will have access toconfidential, proprietary, non-public information concerning the Company andits Affiliates, which may include, without limitation, (a) books and recordsrelating to operations, finance, accounting, personnel and management, (b) price,rate and volume data, future price and rate plans, and test data, (c)information related to product design and development, (d) computer software,customer lists, information obtained on competitors, and sales tactics, and (e)various other non-public trade or business information, including businessopportunities, marketing or business diversification plans, methods andprocesses, and financial data and the like (collectively, the"Confidential Information").  Executive agrees that he or shewill not  at any time, either while employed by the Company or afterwards,make any independent use of, or disclose to any other person or organization(except as authorized by the Company or pursuant to court order) any of theConfidential Information.

**5.3      Non-Solicitation. **Executive agrees that during the one-year periodcommencing as of the date of voluntary termination by Executive (as describedin Section 3.6 hereof) or the involuntary termination of Executive on accountof Cause  (as described in Section 3.3 hereof), he 

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or she shall not, directly or indirectly, for his or herown benefit or on behalf of another or to the Principal Employer's detriment:

a.        Hire or offer to hire any of the Principal Employer's officers, employees oragents;

b.        Persuade or attempt to persuade in any manner any officer, employee or agent ofthe Principal Employer to discontinue any relationship with the PrincipalEmployer; or 

c.        Solicit or divert or attempt to divert any customer or supplier of thePrincipal Employer. 

The provisions of this Section 5.3 shallapply in the locations set forth on Exhibit A hereto,  as the same may beamended from time to time.  Executive acknowledges that the PrincipalEmployer is presently doing business in such locations and that during theEmployment Term Executive will be required to provide services to or for thebenefit of the Principal Employer in such locations.

The parties agree that each of theforegoing prohibitions is intended to constitute a separate restriction. Accordingly, should any such prohibition be declared invalid or unenforceable,such prohibition shall be deemed severable from and shall not affect theremainder thereof.  The parties further agree that each of the foregoingrestrictions is reasonable in both time and geographic scope. 

**5.4      Business Reputation.**  Executive agrees that during his or heremployment with the Company (and its Affiliates) and at all times thereafter,he or she shall refrain from performing any act, engaging in any conduct orcourse of action or making or publishing an adverse, untrue or misleadingstatement which has or may reasonably have the effect of demeaning the name orbusiness reputation of the Company or its Affiliates or which adversely affects(or may reasonably adversely affect) the best interests (economic or otherwise)of the Company or an Affiliate.** **

**5.5      Remedies.**  In the event of a breach or threatened breach byExecutive of the provisions of Sections 5.2, 5.3 or 5.4 hereof, Executiveagrees that the Company shall be entitled to  a temporary restrainingorder or a preliminary injunction (without the necessity of posting bond inconnection therewith) and that any additional payments or benefits due toExecutive or his or her dependents under Sections 3 and 4 hereof shall becanceled and forfeited.  Nothing herein shall be construed as prohibitingthe Company from pursuing any other remedy available to it for such breach orthreatened breach, including the recovery of damages from Executive.

**                                                          6.  MISCELLANEOUS**

**6.1**      **Mitigation Not Required.**  As a condition of any payment hereunder,Executive shall not be required to mitigate the amount of such payment byseeking other employment or otherwise, 

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nor will any profits, income, earnings or other benefitsfrom any source whatsoever create any mitigation, offset, reduction or anyother obligation on the part of Executive under this Agreement. 

**6.2      Enforcement of this Agreement. **In the event any dispute in connectionwith this Agreement arises with respect to obligations of Executive or theCompany that were required prior  to the occurrence of a Change in Controlor a Business Transaction, all costs, fees and expenses, including attorneyfees, of any arbitration or other legal action in connection with such mattersin which Executive substantially prevails, shall be borne by, and be theobligation of, the Company. 

After a Change in Control or BusinessTransaction has occurred, Executive shall not be required to incur legal feesand the related expenses associated with the interpretation, enforcement ordefense of Executive's rights under this Agreement by arbitration orotherwise.  Accordingly, if, following a Change in Control or BusinessTransaction, the Company has failed to comply with any of its obligations underthis Agreement or the Company or any other person takes or threatens to takeany action to declare this Agreement void or unenforceable or in any wayreduces the possibility of collecting the amounts due hereunder, or institutesany action or proceeding designed to deny or to recover from Executive thebenefits provided or intended to be provided under this Agreement, Executiveshall be entitled to retain counsel of Executive's choice, at the expense ofthe Company,  to advise and represent Executive in connection with anysuch interpretation, enforcement or defense, including without limitation theinitiation or defense of any arbitration or other legal action, whether by oragainst the Company or any director, officer, stockholder or other personaffiliated with the Company, in any jurisdiction.  The Company shall payand be solely financially responsible for any and all attorneys' and relatedfees and expenses incurred by Executive in connection with any of theforegoing, without regard to whether Executive prevails, in whole or in part. 

In no event shall Executive be required toreimburse the Company for any of the costs and expenses incurred by the Companyrelating to arbitration or other legal action in connection with thisAgreement.

**6.3      Arbitration.**  Any dispute, controversy or claim arising out of orrelating to this Agreement or Executive's employment or the terminationthereof, including, but not limited to, any claim of discrimination under stateor federal law, shall be resolved exclusively by binding arbitration inAlexandria, Louisiana (or such other location as may be agreed to by theparties), in accordance with the rules of the American Arbitration Associationthen in effect; provided, however, that in the event of a claimed violation ofSection 5 hereof, the Company may seek injunctive or other relief specified inSection 5.5 hereof.  Judgment may be entered on the arbitrator's award inany court having competent jurisdiction.  

**6.4      No Set-Off. ** There shall be no right of set‐off orcounterclaim in respect of any claim, debt or obligation against any payment toExecutive provided for in this Agreement. 

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**6.5      Assistance with Litigation. **For a period of one year after the end ofthe last period for which Executive will have received any compensation underthis Agreement, Executive will furnish such information and proper assistanceas may be reasonably necessary in connection with any litigation in which theCompany (or an Affiliate) is then or may become involved. 

**6.6      Headings.**  Section and other headings contained in this Agreement arefor reference purposes only and shall not affect in any way the meaning orinterpretation of this Agreement.

**6.7      Entire Agreement. **This Agreement constitutes the entire understandingand agreement among the parties hereto with respect to the subject matterhereof, and there are no other agreements, understandings, restrictions,representations or warranties among the parties other than those set forthherein.

**6.8      Amendments. **This Agreement may be amended or modified at any time inany or  all respects, but only by an instrument in writing executed by theparties hereto.

**6.9      Choice of Law. **The validity of this Agreement, the construction ofits terms, and the determination of the rights and duties of the parties heretoshall be governed by and construed in accordance with the internal laws of theState of Louisiana applicable to contracts made to be performed wholly withinsuch state.

**6.10    Notices. **All notices and other communications under this Agreementmust be in writing and will be deemed to have been duly given when (a) deliveredby hand, (b) sent by telecopier to a telecopier number given below, providedthat a copy is sent by a nationally recognized overnight delivery service(receipt requested), or (c) when received by the addressee, if sent by anationally recognized overnight delivery service (receipt requested), in eachcase as follows:
|   | If  to Executive:   | **Samuel  H. Charlton III  2916 George's Lane  Alexandria, LA  71301**                                                          |
|--------|---------------------|--------------------------------------------------------------------------------------------------------------------------------------|
|   | If  to the Company: | Cleco  Corporation  2030 Donahue Ferry Road  Pineville, LA 71360  Telecopier:  318 484-7777  Attention: Chief Executive Officer |

or to such other addresses as a party may designate bynotice to the other party.

**6.11    Assignment. **This Agreement will inure to the benefit of and bebinding upon the Company, its Affiliates, successors and assigns, including,without limitation, any person, partnership, company, corporation or otherentity that may acquire substantially all of the Company's 

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assets or business or with or into which the Company may beliquidated, consolidated, merged or otherwise combined, and will inure to thebenefit of and be binding upon Executive, his or her heirs, estate, legateesand legal representatives.  If payments become payable to Executive'ssurviving spouse or other assigns and such person thereafter dies, such paymentwill revert to Executive's estate. 

**6.12    Severability.**  Each provision of this Agreement is intended to beseverable.  In the event that any one or more of the provisions containedin this Agreement shall for any reason be held to be invalid, illegal orunenforceable, the same shall not affect the validity or enforceability of anyother provision of this Agreement, but this Agreement shall be construed as ifsuch invalid, illegal   or unenforceable provisions was not containedherein.  Notwithstanding the foregoing, however, no provision shall besevered if it is clearly apparent under the circumstances that the partieswould not have entered into this Agreement without such provision.

**6.13     Withholding. **The Company (or an Affiliate) may withhold from any payment hereunder anyfederal, state or local taxes required to be withheld.

**6.14    Survival. ** Notwithstanding anything herein to the contrary, tothe extent applicable, the obligations of the Company (and its Affiliates)under Sections 3 and 4, and the obligations of Executive under Sections 3 and5, shall remain operative and in full force and effect regardless of  theexpiration of this Agreement.** **

**6.15     Waiver.** The failure of either party to insist in any one or more instances uponperformance of any terms or conditions of this Agreement will not be construedas a waiver of future performance of any such term, covenant, or condition andthe obligations of either party with respect to such term, covenant orcondition will continue in full force and effect. ** **

**6.16    Delegation.**  The Chief Executive Officer, in his discretion, maydelegate to one or more executive officers of the Company or its Affiliates allor a portion of the power and authority granted to him or the Companyhereunder.  Such delegation shall be effective whether made orally or in writing.  ** **

**6.17    Definition.**  For purposes of this Agreement, "Affiliate"shall mean one or more subsidiaries or other entities with respect to which theCompany owns (within the meaning of Section 425(f) of the Internal Revenue Codeof 1986, as amended (the "Code")) 50% or more of the total combinedvoting power of all classes of stock or other equity interests.

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**THIS AGREEMENT**is executed inmultiple counterparts as of the dates set forth below, each of which shall bedeemed an original, to be effective as of the Effective Date designated above.**  **

| **CLECO  CORPORATION**                                                                                                                                | **EXECUTIVE**                                                                                                                                                                                  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| By:  /s/ Catherine C.  Powell                     | /s/  Samuel H. Charlton  III                            |
| Catherine  C. Powell                                                                                                                                  | **Samuel  H. Charlton III**                                                                                                                                                                    |
| Its: Senior V.P., Employee & Corporate Services                                                                                                   | Date: 10/7/2002                                                                                                                                   |
| Date:   8/28/2002                                                                              |                                                                                                                                                                                           |

**  **

**THIS AGREEMENT**was reviewed and accepted by thePrincipal Employer, as of the date set forth below, to be effective as of theEffective Date designated above.

|   |              Cleco Corporation                                                                                                                                                                                        |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | By:   /s/ Darrell J.  Dubroc                                                                                                     |
|   | Its:   Exec. V.P. &  COO                                                                                      |
|   | Date:   (Undated)                                          |

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**CLECO CORPORATIONEXECUTIVE EMPLOYMENT AGREEMENTEXHIBIT A**

This Exhibit A is intended to form a partof that certain Executive Employment Agreement by and between ClecoCorporation, the Principal Employer and **Samuel H. Charlton III**, firsteffective as of the Effective Date designated above (the"Agreement").  The parties agree that the proscriptions setforth in Section 5.3 thereof shall apply in the State of Louisiana, Parishesof:

           Acadia             Allen            Avoyelles            Beauregard            Calcasieu            Catahoula            DeSoto            Evangeline            Grant            Iberia            JeffersonDavis            Lafayette            Natchitoches            Rapides            Red River            Sabine            St. Landry            St. Martin            St. Mary            St. Tammany            Vernon            Washington

           Notwithstanding Section 6.8 of the Agreement, the Principal Employer shallpossess the authority to amend this Exhibit A, from time to time, to eliminateparishes in which the Principal Employer is no longer doing business and to addparishes in which the Principal Employer is currently doing business, subjectto Executive's consent, which shall not be unreasonably withheld.

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