**EXHIBIT 10(AA)(2)**

 

 

**CLECO CORPORATIONEXECUTIVE EMPLOYMENT AGREEMENT(Level 1)**

           **THIS AGREEMENT** (the "Agreement") is entered into as of this 1stday of January, 2002, by and between **David M. Eppler**("Executive"), and Cleco Corporation, aLouisiana corporation (the "Company"), and is intended to amend andrestate, with the exception of the term defined therein, that certain ExecutiveSeverance Agreement between Cleco Corporation andExecutive, initially effective as of July 28, 2000.

**1.  EMPLOYMENT AND TERM**

           **1.1       Position. **The Companyshall employ and retain Executive as its President and Chief Executive Officeror in such other capacity or capacities as shall be mutually agreed upon, fromtime to time, by Executive and the Company, and Executive agrees to be soemployed, subject to the terms and conditions set forth herein. Executive'sduties and responsibilities shall be those assigned to him hereunder, from timeto time, by the Board of Directors of the Company and shallinclude such duties as are the type and nature normally assigned to similarexecutive officers of a corporation of the size, type and stature of theCompany.  Executive shall report to the Board of Directors.              

           **1.2       Concurrent Employment. **Duringthe term of this Agreement, Executive and the Company acknowledge thatExecutive may be concurrently employed by the Company and a subsidiary or otherentity with respect to which the Company owns (within the meaning of Section425(f) of the Internal Revenue Code of 1986, as amended (the "Code"))50% or more of the total combined voting power of all classes of stock or otherequity interests (an "Affiliate"), and that all of the terms andconditions of this Agreement shall apply to such concurrent employment. Reference to the Company hereunder shall be deemed to include any suchconcurrent employers. 

           **1.3       Full Time and Attention. **Duringthe term of this Agreement and any extensions or renewals thereof, Executiveshall devote his full time, attention and energies to the business of theCompany and will not, without the prior written consent of the Board ofDirectors of the Company, be engaged (whether or not during normal businesshours) in any other business or professional activity, whether or not suchactivities are pursued for gain, profit or other pecuniary advantage.  

           Notwithstanding the foregoing, Executive shall not be prevented from (a)engaging in any civic or charitable activity for which Executive receives nocompensation or other pecuniary advantage, (b) investing his personal assets inbusinesses which do not compete with the Company, provided that such investmentwill not require any services on the part of Executive in the operation of theaffairs of the businesses in which investments are made and provided furtherthat Executive's participation in such businesses is solely that of aninvestor, or (c) purchasing 

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securitiesin any corporationwhose securities are regularly traded, provided that such purchases will notresult in Executive owning beneficially at any time 5% or more of the equitysecurities of any corporation engaged in a business competitive with that ofthe Company. 

           **1.4       Term.**  Executive'semployment under this Agreement shall commence as of July 28, 2000 (the"Effective Date"), and shall terminate on July 28, 2003 (such date orthe last day of employment specified in any renewal or amendment hereofreferred to herein as the "Termination Date") (the period commencingas of the Effective Date and ending as of the Termination Date referred toherein as the "Employment Term").  

           Commencing on the second anniversary of the Effective Date and each anniversarythereafter, Executive's employment shall automatically be extended for anadditional one‐year period; provided, however, that either party mayprovide written notice to the other that the Employment Term will not befurther extended, such notice to be provided not later than 30 days prior tothe end of the then current Employment Term.  

**2.  COMPENSATION AND BENEFITS**

           **2.1       Base Compensation.**  TheCompany shall pay Executive an annual salary equal to his annual base salary ineffect as of the Effective Date, such amount shall be prorated and paid inequal installments in accordance with the Company's regular payroll practicesand policies and shall be subject to applicable withholding and otherapplicable taxes (Executive's "Base Compensation").  Executive'sBase Compensation shall be reviewed no less often than annually and may beincreased or reduced by the Board of Directors of the Company (the "Board"),in its sole discretion; provided, however, that Executive's Base Compensationmay not be reduced at any time unless such reduction is part of a reduction inpay uniformly applicable to all officers of the Company.  

           **2.2       Annual Incentive Bonus.**  Inaddition to the foregoing, Executive shall be eligible for participation in theAnnual Incentive Compensation Plan or similar bonus arrangement maintained bythe Company or an Affiliate or such other bonus or incentive plans which theCompany or its Affiliates may adopt, from time to time, for similarly situatedexecutives (an "Incentive Bonus").  

           **2.3       Long-Term Incentives. **Inaddition to the foregoing, Executive shall be eligible for participation in the2000 Long-Term Incentive Compensation Plan maintained by the Company and suchother long-term incentive plans which the Company or its Affiliates may adopt,from time to time, for similarly situated executives (a "Long-TermIncentive").

           **2.4       Supplemental Retirement Benefit. **In addition to the foregoing, Executive shall be eligible to participate inthe Supplemental Executive Retirement Plan maintained by ClecoUtility Group Inc. or such other supplemental retirement benefit plans whichthe Company or its Affiliates may adopt, from time to time, for similarlysituated executives (the "Supplemental Plan").

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           **2.5       Other Benefits.** During the termof this Agreement and in addition to the amounts otherwise provided herein,Executive shall participate in such plans, policies, and programs as may bemaintained, from time to time, by the Company or its Affiliates for the benefitof senior executives or employees, including, without limitation, profit sharing,life insurance, and group medical and other welfare benefit plans.  Anysuch benefits shall be determined in accordance with the specific terms andconditions of the documents evidencing any such plans, policies, and programs. 

           **2.6       Reimbursement of Expenses.**  The Company shall reimburse Executive for such reasonable and necessaryexpenses as are incurred in carrying out his duties hereunder, consistent withthe Company's standard policies and annual budget.  The Company's obligationto reimburse 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 this Section 3 and except as provided in Sections3.3 or 3.8 hereof, Executive shall be paid the greater of the amounts orbenefits set forth below or the amounts or benefits provided under the terms ofthe separate plan or arrangement maintained by the Company (or its Affiliates)on account of termination of employment hereunder:

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

           b.         Executive's BaseCompensation payable until the Termination Date (determined without regard tothe automatic renewal provisions of Section 1.4 hereof), but not less than 100%of such annual Base Compensation.

           c.         Executive's Incentive Bonuspayable with respect to the year of his termination, prorated to reflectExecutive's actual period of service during such year.** **

**           **d.         Executive's IncentiveBonus payable in the target amount for the year in which his termination ofemployment occurs. 

           e.         If Executive's principaloffice is located in Pineville, Louisiana, the Company shall, at the writtenrequest of Executive:

i.         Purchase his principal residence if such residence is located within 60 milesof the Company's Pineville, Louisiana office (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 

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ii.                  Pay or reimburse Executive for the cost of relocating Executive, his family andtheir household goods and other personal property, in accordance with the Company'susual relocation practice, to any location in the United States.  

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

           f.          If Executive and/orhis dependents elects to continue group medical coverage, within the meaning ofCode Section 4980B(f)(2), with respect to a group health plan sponsored by theCompany or an Affiliate (other than a health flexible spending account under aself-insured medical reimbursement plan described in Code Sections 125 and105(h)), the Company shall pay the continuation coverage premium for the sametype and level of group health plan coverage received by Executive and hiselecting dependents immediately prior to such termination of Executive'semployment for the maximum period provided under Code Section 4980B or untilthe Executive secures other employment where group health insurance isprovided, whichever period is shorter. 

           g.         Executive shall be fullyvested for purposes of any service or similar requirement imposed under theCleco Utility Group Inc. Supplemental Executive RetirementPlan (the "Supplemental Plan"), regardless of the actual number ofyears of service attained by Executive.  

Except as expressly provided in Section 3.3 hereof,Executive shall also be entitled to receive such compensation or benefits asmay be provided under the terms of a separate plan or amendment maintained bythe Company (or its Affiliates) to the extent such compensation or benefits arenot duplicative of the compensation or benefits described above.

**           3.2       Termination for Death or Disability**. If Executive dies or becomes disabled during the Employment Term, thisAgreement and Executive's employment hereunder shall immediately terminate andthe Company's obligations hereunder shall automatically cease.  In suchevent, the Company shall pay to Executive (or his estate) the amounts describedin Sections 3.1a and 3.1c hereof.  Payment shall be made in the form ofone or more single-sums as soon as practicable after Executive's death ordisability or as and when such amounts are ascertainable.

           For purposes of this Section 3.2, Executive shall be deemed"disabled" if he or she is actually receiving benefits or is eligibleto receive benefits under the Company's (or an Affiliate's) separate long-termdisability plan. The Board shall determine whether Executive is disabledhereunder.

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           **3.3       Company's Termination forCause. **This Agreement and Executive's employment hereunder may beterminated by the Company on account of Cause.  In such event, the Companyshall pay to Executive the amount described in Section 3.1a hereof. Payment shall be made in the form of a single-sum not later than three daysafter such termination.  Notwithstanding any provision of this Agreementor any other plan, policy or agreement evidencing any other compensationarrangement or benefit payable to Executive, no additional amount shall be paidto Executive, except as may be required by law.

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

           a.         Committed an intentional actof fraud, embezzlement or theft in the course of his employment or otherwiseengaged in any intentional misconduct which is materially injurious to theCompany's (or an Affiliate's) financial condition or business reputation;

           b.         Committed intentional damageto the property of the Company (or an Affiliate) or committed intentionalwrongful disclosure of Confidential Information (as defined in Section 5.2)which is materially injurious to the Company's (or an Affiliate's) financialcondition or business reputation; 

           c.         Intentionally refused toperform the material duties of his position; or

           d.         A material breach of thisAgreement by Executive.

No act or failure to act on the part of Executive will bedeemed "intentional" if it was due primarily to an error in judgmentor negligence, but will be deemed "intentional" only if done oromitted to be done by Executive not in good faith and without reasonable beliefthat his action or omission was in the best interest of the Company (or anAffiliate).  

           The Board, acting in good faith, may terminate Executive's employment hereunderon account of Cause (or may determine that any termination by the Company is onaccount of Cause).  The Board shall provide written notice to Executive,including a description of the specific reasons for the determination ofCause.  Executive shall have the opportunity to appear before the Board,with or without legal representation, to present arguments and evidence on hisbehalf.  Following such presentation (or upon Executive's failure toappear), the Board, by an affirmative vote of not less than 66% of its members,shall confirm that the actions or inactions of Executive constitute Causehereunder.

           **3.4       Executive's ConstructiveTermination.**Executive may terminate this Agreement and his employmenthereunder on account of a Constructive Termination upon 30 days prior writtennotice to the Board of Directors (or such shorter period as may be agreed uponby the parties hereto.)  In such event, the Company shall provide toExecutive (a) the amount described in Section 3.1a hereof, payable not laterthan three days after his termination of employment, (b) the amounts determinedunder Sections 3.1b and 3.1d hereof, payable in not more than two equalinstallments, one-half not later than 30 days after termination and the other 

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one-half six months after suchtermination, and (c) the benefits described in Sections 3.1e, 3.1f and 3.1ghereof.

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

           a.         A material reduction (otherthan a reduction in pay uniformly applicable to all officers of the Company) inthe amount of Executive's Base Compensation; 

           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 thisAgreement by the Company or its Affiliates.

No event or condition described in this Section 3.4 shallconstitute a Constructive Termination unless (a) Executive promptly gives theCompany notice of his objection to such event or condition, which notice may beprovided orally or in writing to the Board of Directors or his designee, (b)such event or condition is not corrected by the Company promptly after receiptof such notice, but in no event more than 30 days after receipt of notice, and(c) Executive resigns his employment with the Company (and all Affiliates) notmore than 15 days following the expiration of the 30-day period described insubparagraph (b) hereof.  

           **3.5       Termination by the Company, withoutCause.**  The Company may terminate this Agreement and Executive'semployment hereunder, without Cause, upon 30 days prior written notice toExecutive (or such shorter period as may be agreed upon by Executive and theBoard of Directors.)  In such event, the Company shall provide toExecutive (a) the amount described in Section 3.1a hereof, payable not laterthan three days after such termination, (b) 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 (c) the benefits described in Sections 3.1e,3.1f and 3.1g hereof.

             **3.6      Termination by Executive.**  Executive may terminate this Agreement andhis employment hereunder, other than on account of Constructive Termination,upon 30 days prior written notice to the Company or such shorter period as maybe agreed upon by the Board of Directors and Executive.  In such event,the Company shall pay to Executive the amount described in Section 3.1ahereof.  Payment shall be made in the form of a single-sum not later thanthree days after such termination.  No additional payments or benefitsshall be due hereunder, except as may be provided under a separate plan, policyor program evidencing such compensation arrangement or benefit or as may berequired by law.

           **3.7       Return of Property.**  Upontermination of this Agreement for any reason, Executive shall promptly returnto the Company all of the property of the 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 theabove and any Confidential 

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Information (as defined in Section 5.2 hereof) that is inthe possession or under the control of Executive. 

           **3.8       Consideration for Other Agreements.** Executive acknowledges that all or a portion of the amount payable underSection 3.1d hereof is in excess of the amount otherwise due or payable underthe Annual Incentive Compensation Plan and that the payment of such excessamount shall constitute adequate consideration for the execution of suchseparate waivers or releases as the Company (or Affiliate) may requestExecutive to execute in connection with the termination of his employmenthereunder.  Executive agrees that failure to execute any such waiver orrelease within the time request by the Company shall result in the forfeitureof the excess amount payable under Section 3.1d hereof.

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

           **4.1       Definitions.  **The terms"Change in Control" and "Business Transaction" shall havethe meanings ascribed to them in the ClecoCorporation 2000 Long-Term Incentive Compensation Plan, as the same may beamended from time to time.

           The term "Good Reason," when used herein, shall mean that inconnection with a Change in Control: 

           a.         Executive's BaseCompensation in effect immediately before such Change in Control is reduced orthere is a significant reduction or termination of Executive's rights to anyemployee benefit in effect immediately prior to the Change in Control;

           b.         Executive's authority,duties or responsibilities are significantly reduced from those contemplated inSection 1.1 hereof or Executive has reasonably determined that, as a result ofa change in circumstances that significantly affects his employment with theCompany (or an Affiliate), he or she is unable to exercise the authority,power, duties and responsibilities contemplated in Section 1.1 hereof;

           c.         Executive is required to beaway from his office in the course of discharging his duties andresponsibilities under this Agreement significantly more than was requiredprior to the Change in Control; or

           d.         Executive is required totransfer to an office or business location located more than 60 miles from thelocation to which he or she was assigned prior to the Change in Control.

No event or condition described in this Section 4.1 shallconstitute Good Reason unless (a) Executive gives the Company notice of hisobjection to such event or condition within a reasonable period after Executivelearns of such event, which notice may be delivered orally or in writing to theBoard of Directors  (or his designee), (b) suchevent or condition is not promptly 

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corrected by the Company, but in no event later than 30days after receipt of such notice, and (c) Executive resigns his employmentwith the Company (and its Affiliates) not more than 60 days following theexpiration of the 30-day period described in subparagraph (b)hereof.   

           **4.2       Termination In Connection With aChange in Control.**  If Executive's employment described herein isterminated by the Company, without Cause (as defined in Section 3.3 hereof), orExecutive terminates his employment hereunder for Good Reason at any timewithin the 60-day period preceding or 36-month period following such Change inControl, then notwithstanding any provision of this Agreement to the contraryand in lieu of any compensation or benefits otherwise payable hereunder:

           a.         The Company shall pay toExecutive the amount described in Section 3.1a in the form of a single-sum notlater than three days after such termination.

           b.         The Company shall pay anamount equal to three times Executive's "base amount," payable in theform of a single-sum not later than 30 days after such termination.  Forpurposes of this agreement, "base amount" is defined as theExecutive's current annual base compensation and target annual bonus.

           c.         The Company shall provide toExecutive and his dependents coverage under the Company's or an Affiliate'sgroup medical plan for the same type and level of health benefits received byExecutive and his dependents immediately prior to such termination for a periodof three years or until Executive and/or his dependents obtain coverage under areasonably satisfactory group health plan with no applicable preexistingcondition limitation, whichever comes first; such coverage to be in addition toany coverage available to Executive and his dependents under Code Section4980B. 

           d.         Vesting shall beaccelerated, any restrictions shall lapse, and all performance objectives shallbe deemed satisfied as to any outstanding grants or awards made to Executiveunder the 2000 Long-Term Incentive Compensation Plan and/or the 1990 Long-TermIncentive Compensation Plan.  Executive shall be entitled to suchadditional benefits or rights as may be provided in the documents evidencingsuch plans or the terms of any agreement evidencing such grant or award.

           e.         Executive shall be fullyvested for purposes of any service or similar requirement imposed under theSupplemental Plan, regardless of the actual number of years of service attainedby Executive.  Executive shall be credited with an additional three yearsof age for purposes of determining his benefit percentage under theSupplemental Plan, but in no event shall such benefit percentage be less than50%; and Executive shall be credited with an additional three years of age forpurposes of determining any reduction taken with respect to benefits commencingbefore Executive's normal retirement date (as defined in such plan).

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           f.          If Executive'sprincipal office is located in Pineville, Louisiana, the Company shall, at thewritten request of Executive:

i.         Purchase his principal residence if such residence is located within 60 milesof the Company's Pineville, Louisiana office (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 reimburseExecutive for the cost of relocating Executive, his family and their householdgoods and other personal property, in accordance with the Company's usualrelocation practice, to any location in the United States.  

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

           g.         The Company shall pay toExecutive an amount equal to the Company's (including all Affiliates) maximummatching contribution obligation under the ClecoCorporation 401(k) Savings and Investment Plan, as the same may be amended fromtime to time, for each of the three years immediately following Executive'stermination of employment, determined as if Executive was credited with atleast 1,000 hours of service in each such plan year, was employed as of thelast day of each plan year, and contributed the maximum permissible amountunder Code Section 402(g) in each such year, but determined using the amount ineffect as of the date of Executive's termination of employment; such amountshall be paid in the form of a single-sum not later than 30 days afterExecutive's termination of employment hereunder.

           **            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 Executive (a)the amount described in Section 3.1a hereof, payable not later than three daysafter his termination of employment, (b) the amounts determined under Sections3.1b and 3.1d hereof, payable in not more than two equal installments, one-halfnot later than 30 days after termination and the other one-half six monthsafter such termination, and (c) the benefits described in Sections 3.1e and3.1f and 4.2e and 4.2f hereof.

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**4.4             Tax Payment.** If any payment to Executive pursuant to this Agreementor any other payment or benefit from the Company or an Affiliate in connectionwith a Change in Control or Business Transaction is subject to the excise taximposed under Code Section 4999 or any similar excise or penalty tax payableunder any United States federal, state, local or other law, the Company shallpay an amount to Executive such that, after the payment by Executive of alltaxes on such amount, there remains a balance sufficient to pay such excise orpenalty tax.  Executive shall submit to the Company the amount to be paidunder 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 onActivities.**  Executive acknowledges that the execution of thisAgreement and the payments described herein constitute consideration for thelimitations on activities set forth in this Section 5, the adequacy of which ishereby expressly acknowledged by Executive. 

**           5.2       Confidential Information. **Executiverecognizes and acknowledges that during the terms of his employment, he willhave access to confidential, proprietary, non-public information concerning theCompany and its Affiliates, which may include, without limitation, (a) booksand records relating to operations, finance, accounting, personnel andmanagement, (b) price, rate and volume data, future price and rate plans, andtest data, (c) information related to product design and development, (d)computer software, customer lists, information obtained on competitors, andsales tactics, and (e) various other non-public trade or business information,including business opportunities, marketing or business diversification plans,methods and processes, 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, makeany independent use of, or disclose to any other person or organization (exceptas authorized by the Company or pursuant to court order) any of theConfidential Information.

           **5.3       Non-Solicitation. **Executiveagrees that during the one-year period commencing as of the date of voluntarytermination by Executive (as described in Section 3.6 hereof) or theinvoluntary termination of Executive on account of Cause (as described inSection 3.3 hereof), he or she shall not, directly or indirectly, for his ownbenefit or on behalf of another or to the Company's (or an Affiliate's)detriment:

           a.         Hire or offer to hire any ofthe Company's (or Affiliate's) officers,employees oragents;

           b.         Persuade or attempt topersuade in any manner any officer, employee or agent of the Company (or anAffiliate) to discontinue any relationship with the Company; or 

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           c.         Solicit or divert or attemptto divert any customer or supplier of the Company or an Affiliate. 

The provisions of this Section 5.3 shall apply in thelocations set forth on Exhibit A hereto, as the same may be amended from timeto time.  Executive acknowledges that the Company (or its Affiliates) ispresently doing business in such locations and that during the Employment TermExecutive will be required to provide services to or for the benefit of theCompany (or its Affiliates) in such locations.

           The parties agree that each of the foregoing prohibitions is intended toconstitute a separate restriction. Accordingly, should any such prohibition bedeclared invalid or unenforceable, such prohibition shall be deemed severablefrom and shall not affect the remainder thereof.  The parties furtheragree that each of the foregoing restrictions is reasonable in both time andgeographic scope.  

**           5.4       Business Reputation.**  Executiveagrees that during his employment with the Company (and its Affiliate) and atall times thereafter, he shall refrain from performing any act, engaging in anyconduct or course of action or making or publishing an adverse, untrue ormisleading statement which has or may reasonably have the effect of demeaningthe name or business reputation of the Company or its Affiliates or whichadversely affects (or may reasonably adversely affect) the best interests(economic or otherwise) of the Company or an Affiliate.

**           5.5       Remedies.**  In the eventof a breach or threatened breach by Executive of the provisions of Sections5.2, 5.3 or 5.4 hereof, Executive agrees that the Company shall be entitled toa temporary restraining order or a preliminary injunction (without thenecessity of posting bond in connection therewith) and that any additionalpayments or benefits due to Executive or his dependents under Sections 3 and 4hereof shall be canceled and forfeited.  Nothing herein shall be construedas prohibiting the Company from pursuing any other remedy available to it forsuch breach or threatened breach, including the recovery of damages fromExecutive.

**6.  MISCELLANEOUS**

           **6.1**       **Mitigation Not Required.** As a condition of any payment hereunder, Executive shall not be required tomitigate the amount of such payment by seeking other employment or otherwise,nor will any profits, income, earnings or other benefits from any sourcewhatsoever create any mitigation, offset, reduction or any other obligation onthe part of Executive under this Agreement. 

           **6.2       Enforcement of this Agreement. **In the event any dispute in connection with this Agreement arises withrespect to obligations of Executive or the Company that were required prior tothe occurrence of a Change in Control or a Business Transaction, all costs,fees and expenses, including attorney fees, of any litigation, arbitration orother legal action in connection with such matters in which Executive substantiallyprevails, shall be borne by, and be the obligation of, the Company. 

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           After a Change in Control or Business Transaction has occurred, Executive shallnot be required to incur legal fees and the related expenses associated with theinterpretation, enforcement or defense of Executive'srights under this Agreement by litigation or otherwise.  Accordingly, if,following a Change in Control or Business Transaction, the Company has failedto comply with any of its obligations under this Agreement or the Company orany other person takes or threatens to take any action to declare thisAgreement void or unenforceable or in any way reduce the possibility ofcollecting the amounts due hereunder, or institutes any litigation or otheraction or proceeding designed to deny or to recover from Executive the benefitsprovided or intended to be provided under this Agreement, Executive shall beentitled to retain counsel of Executive's choice, at the expense of theCompany, to advise and represent Executive in connection with any suchinterpretation, enforcement or defense, including without limitation theinitiation or defense of any litigation, arbitration or other legal action,whether by or against the Company or any director, officer, stockholder orother person affiliated with the Company, in any jurisdiction.  TheCompany shall pay and be solely financially responsible for any and allattorneys' and related fees and expenses incurred by Executive in connectionwith any of the foregoing, without regard to whether Executive prevails, inwhole or in part. 

           In no event shall Executive be required to reimburse the Company for any of thecosts and expenses incurred by the Company relating to arbitration, litigation orother legal action in connection with this Agreement. 

           **6.3       No Set-Off. ** Thereshall be no right of set‐off or counterclaim in respect of any claim,debt or obligation against any payment to Executive providedfor in this Agreement. 

           **6.4       Assistance with Litigation. **Fora period of one year after the end of the last period for which Executive willhave received any compensation under this Agreement, Executive will furnishsuch information and proper assistance as may be reasonably necessary inconnection with any litigation in which the Company (or an Affiliate) is thenor may become involved. 

**           6.5       Headings.**  Section and otherheadings contained in this Agreement are for reference purposes only and shallnot affect in any way the meaning or interpretation of this Agreement.

           **6.6       Entire Agreement. **ThisAgreement constitutes the entire understanding and agreement among the partieshereto with respect to the subject matter hereof, and there are no otheragreements, understandings, restrictions, representations or warranties amongthe parties other than those set forth herein.

           **6.7       Amendments. **This Agreementmay be amended or modified at any time in any or all respects, but only by aninstrument in writing executed by the parties hereto.

           **6.8       Choice of Law. **Thevalidity of this Agreement, the construction of its terms, and thedetermination of the rights and duties of the parties hereto shall be governedby and 

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construed in accordance with theinternal laws of the State of Louisiana applicable to contracts made to beperformed wholly within such state.

           **6.9       Notices. **All notices andother communications under this Agreement must be in writing and will be deemedto have been duly given when (a) delivered by hand, (b) sent bytelecopier to a telecopier numbergiven below, provided that a copy is sent by a nationally recognized overnightdelivery service (receipt requested), or (c) when received by the addressee, ifsent by a nationally recognized overnight delivery service (receipt requested),in each case as follows:
|   | If to Executive:   | David M. Eppler  550 Hiawatha Trail  Pineville, Louisiana 71360                                                                             |
|--------|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|
|   | If to the Company: | Cleco Corporation  2030 Donahue Ferry Road  Pineville, LA 71360  Attention: Chairman, Board of Directors  Telecopier:   (318) 484-7777 |

or to such other addresses as aparty may designate by notice to the other party.

           **6.10     Assignment. **This Agreement will inureto the benefit of and be binding upon the Company, its Affiliates, successorsand assigns, including, without limitation, any person, partnership, company,corporation or other entity that may acquire substantially all of the Company'sassets or business or with or into which the Company may be liquidated,consolidated, merged or otherwise combined, and will inure to the benefit ofand be binding upon Executive, his heirs, estate, legatees and legalrepresentatives.  If payments become payable to Executive's survivingspouse or other assigns and such person thereafter dies, such payment willrevert to Executive's estate. 

           **6.11     Severability.**  Each provision of thisAgreement is intended to be severable.  In the event that any one or moreof the provisions contained in this Agreement shall for any reason be held tobe invalid, illegal or unenforceable, the same shall not affect the validity orenforceability of any other provision of this Agreement, but this Agreement shallbe construed as if such invalid, illegal or unenforceable provisions was notcontained herein.  Notwithstanding the foregoing, however, no provisionshall be severed if it is clearly apparent under the circumstances that theparties would not have entered into this Agreement without such provision.

           **6.12     Withholding. **The Company (or anAffiliate) may withhold from any payment hereunder any federal,state or local taxes required to be withheld.

           **6.13     Survival. ** Notwithstandinganything herein to the contrary, to the extent applicable, the obligations ofthe Company (and its Affiliates) under Sections 3 and 4, and the 

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obligations of Executive underSections 3 and 5, shall remain operative and in full force and effectregardless of the expiration of this Agreement.

** **

**           6.14     Waiver.**  The failure of either party toinsist in any one or more instances upon performance of any terms or conditionsof this Agreement will not be construed as a waiver of future performance ofany such term, covenant, or condition and the obligations of either party withrespect to such term, covenant or condition will continue in full force andeffect. 

           **THIS AGREEMENT**is executed in multiple counterparts as of the dates setforth below, each of which shall be deemed an original, to be effective as ofthe Effective Date designated above.
| **CLECO CORPORATION   **                                                                                                                                                                                          | **EXECUTIVE**                                                                                                                                                                                                                                           |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| By:  /s/ Catherine C.  Powell                               | /s/ David M. Eppler                                       |
| Its:  Sr. V.P. Employee & Corporate  Services                                                                                                                                                       | **David M. Eppler   **                                                                                                                                                                                                                             |
| Date:  3/25/2002                                                                                                                       | Date:  3/26/02                                                                                                                            |

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**CLECO CORPORATIONEXECUTIVE EMPLOYMENT AGREEMENTEXHIBIT A**

           This Exhibit A is intended to form a part of that certain Executive EmploymentAgreement by and between Cleco Corporation and **DavidM. Eppler, first effective as of January 1,2002.  The parties agree that the proscriptions set forth in Section 5.3thereof shall apply in the State of Louisiana, Parishes of:
Acadia ParishAllen ParishAvoyelles ParishBeauregard ParishCalcasieu ParishCatahoula ParishDesoto ParishEvangeline ParishGrant ParishIberia ParishJefferson Davis ParishLafayette ParishLasalle ParishNatchitoches ParishRapides ParishRed River ParishSabine ParishSt. Landry ParishSt. Martin ParishSt. Mary ParishSt. Tammany ParishVernon ParishWashington Parish

Executive and the Company agree that the Company shallamend this Exhibit A, from time to time, to eliminate Parishes in which theCompany is no longer doing business and to add Parishes in which the Company iscurrently doing business.

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