**Exhibit 10.b**

 

**EMPLOYMENT AGREEMENT**

 

ThisEMPLOYMENT AGREEMENT is made and entered into as of the 4th day of February,2004 (the “Effective Date”), by and between Cinergy and James E. Rogers (the“Executive”).  This Agreement replacesand supersedes any and all prior employment agreements between Cinergy and theExecutive.  The capitalized words andterms used throughout this Agreement are defined in Section 11.

 

# **Recitals**

 

A.            The Executive is currently servingas Chairman of the Board, President and Chief Executive Officer of the Company,and Cinergy desires to secure the continued employment of the Executive inaccordance with this Agreement.

 

B.            The Executive is willing to continueto remain in the employ of Cinergy on the terms and conditions set forth in thisAgreement.

 

C.            The parties intend that thisAgreement will replace and supersede any and all prior employment agreementsbetween Cinergy (or any component company or business unit of Cinergy) and theExecutive.

 

# **Agreement**

 

In consideration of the mutualpromises, covenants and agreements set forth below, the parties agree asfollows:

 

## **1.****                                      Employmentand Term.**

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### a.                                       Cinergyagrees to employ the Executive, and the Executive agrees to remain in theemploy of Cinergy, in accordance with the terms and provisions of thisAgreement, for the Employment Period set forth in Section 1b.  The parties agree that the Company will beresponsible for carrying out all of the promises, covenants, and agreements ofCinergy set forth in this Agreement.

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### b.                                      TheEmployment Period of this Agreement will commence as of the Effective Date andcontinue until December 31, 2006; provided that, commencing on December 31,2004, and on each subsequent December 31, the Employment Period will beextended for one (1) additional year unless either party gives the other partywritten notice not to extend this Agreement at least ninety (90) days beforethe extension would otherwise become effective.

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## **2.****                                      Dutiesand Powers of Executive.**

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### a.                                       Position.  The Executive will serve Cinergy as theChairman of the Board, President and Chief Executive Officer of the Company andhe will have such responsibilities, duties, and authority as are customary forsomeone of that position and such additional duties, consistent with hisposition, as may be

 

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### assigned tohim from time to time during the Employment Period by the Board of Directors(excluding the Executive).  Executiveshall devote substantially all of Executive’s business time, efforts andattention to the performance of Executive’s duties under this Agreement; provided,however, that this requirement shall not preclude Executive fromreasonable participation in civic, charitable or professional activities, themanagement of Executive’s passive investments or service on the board ofdirectors of one or more unrelated companies, so long as such activities do notmaterially interfere with the performance of Executive’s duties under thisAgreement.

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### b.                                      Placeof Performance.  In connection withthe Executive’s employment, the Executive will be based at the principalexecutive offices of Cinergy, 221 East Fourth Street, Cincinnati, Ohio.  Except for required business travel to anextent substantially consistent with the present business travel obligations ofCinergy executives who have positions of authority comparable to that of theExecutive, the Executive will not be required to relocate to a new principalplace of business that is more than fifty (50) miles from such location.

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## **3.****                                     ****Compensation.**  The Executive will receive the followingcompensation for his services under this Agreement.

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### a.                                       Salary.  The Executive’s Annual Base Salary, payablein pro rata installments not less often than semi-monthly, will be at theannual rate of not less than $1,250,004. The Board of Directors may, from time to time, increase the Annual BaseSalary as the Board of Directors deems to be necessary or desirable, includingwithout limitation adjustments to reflect increases in the cost of living.  Any increase in the Annual Base Salary willnot serve to limit or reduce any other obligation of Cinergy under thisAgreement.  The Annual Base Salary willnot be reduced without the consent of the Executive, except foracross-the-board salary reductions similarly affecting all Cinergy managementpersonnel.  If Annual Base Salary isincreased or reduced during the Employment Period (but only as permitted by thepreceding sentence), then such adjusted salary will thereafter be the AnnualBase Salary for all purposes under this Agreement.

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### b.                                      Retirement,Incentive, Welfare Benefit Plans and Other Benefits.

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#### (i)                                     Duringthe Employment Period, the Executive will be eligible, and Cinergy will takeall necessary action to cause the Executive to become eligible, to participatein short-term and long-term incentive, stock option, restricted stock,performance unit, savings, retirement and welfare plans, practices, policiesand programs commensurate with his position and at least comparable to thoseapplicable generally to senior executives of Cinergy who are considered Tier IIexecutives for compensation purposes, except with respect to any plan,practice, policy or program to which the Executive has waived his rights inwriting.

 

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In addition, Cinergy willassume and continue the Insurance Agreement and the Deferred CompensationAgreement.  Notwithstanding anything inthis Agreement to the contrary, in the event that Cinergy or any successorfails to assume, breaches, or, at any time during their respective terms,terminates, modifies, amends, or in any way affects, to the Executive’sdetriment and without his consent, the Insurance Agreement or the DeferredCompensation Agreement, then the Executive will be entitled to:  (i) in the case of the Deferred CompensationAgreement, those amounts that are described in Section 16 of the DeferredCompensation Agreement, and (ii) in the case of the Insurance Agreement, thoseamounts that are described in Section 12 of the Insurance Agreement.

 

#### (ii)                                  SupplementalRetirement Benefit.

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##### (1)                                  Amount,Form, Timing and Method of Payment. If the Executive retires from Cinergy, the Executive will be entitledand fully vested in a supplemental retirement benefit in an amount which, whenexpressed as an annual amount payable during the life of the Executive, shall equalthe excess of (1) 60% of the Executive’s Highest Average Earnings over (2) histotal aggregate annual benefit, payable in the form of a single life annuity tothe Executive, under all Executive Retirement Plans.  Except as described below, the form (e.g., the 100% joint andsurvivor annuity form of benefit), timing, and method of payment of thesupplemental retirement benefit payable under this Paragraph will be the sameas those elected by the Executive under the Pension Plan, and the amount ofsuch benefit shall be calculated after taking into account the actuarialfactors contained in the Pension Plan, provided, however, thatsuch benefit shall not be actuarially reduced for early commencement.  Notwithstanding the foregoing, if theExecutive retires from Cinergy after attaining age 56 but prior to attainingage 57, then this Section shall be applied by substituting 61-2/3% for60%.  If the Executive retires fromCinergy after attaining age 57 but prior to attaining age 58, then this Sectionshall be applied by substituting 63-1/3% for 60%.  If the Executive retires from Cinergy after attaining age 58,then this Section shall be applied by substituting 65% for 60%.

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##### (2)                                  DeathBenefit.  If the Executive diesprior to his retirement from Cinergy, and if his Spouse, on the date of hisdeath, is living on the date the first installment of the supplementalretirement benefit would be payable under this Paragraph, the Spouse will beentitled to receive the supplemental retirement benefit as a Spouse’s benefit.  The form, timing, and method of payment ofany Spouse’s benefit under this Paragraph will be the same as those applicableto the Spouse under the Pension Plan, and the amount of such benefit shall becalculated after taking into account the actuarial factors

 

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##### contained inthe Pension Plan, provided, however, that such benefit shall notbe actuarially reduced for early commencement.

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##### (3)                                  SpecialPayment Election Effective Upon a Change in Control.  Notwithstanding the foregoing, the Executivemay make a special payment election with respect to his supplemental retirementbenefit (if any) in accordance with the following provisions:

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###### (A)                              TheExecutive may elect, on a form provided by Cinergy, to receive a single lumpsum cash payment in an amount equal to the Actuarial Equivalent (as definedbelow) of his supplemental retirement benefit (or the Actuarial Equivalent ofthe remaining payments to be made in connection with his supplementalretirement benefit in the event that payment of his supplemental retirementbenefit has already commenced) payable no later than 30 days after the later ofthe occurrence of a Change in Control or the date of his termination ofemployment.

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###### (B)                                Suchspecial payment election shall become operative only upon the occurrence of aChange in Control and only if the Executive’s termination of employment occurseither (1) prior to the occurrence of a Change in Control or (2) during the24-month period commencing upon the occurrence of a Change in Control.  Once operative, such special paymentelection shall override any other payment election made by the Executive withrespect to his supplemental retirement benefit.

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###### (C)                                Inorder to be effective, a special payment election (or withdrawal of thatelection) must be made either prior to the occurrence of a Potential Change inControl or, with the consent of Cinergy, during the 30-day period commencingupon the occurrence of a Potential Change in Control.  In the event that a Potential Change in Control occurs andsubsequently ceases to exist, other than as a result of a Change in Control,such Potential Change in Control shall be disregarded for purposes of thisSection.

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###### (D)                               Inthe event that the Executive makes a special payment election and pursuant tothat election he becomes entitled to receive a single lump sum cash paymentpursuant to this Section payable prior to the commencement of hissupplemental retirement benefit in another form of payment, the ActuarialEquivalent of his supplemental retirement benefit shall be calculated based onthe following assumptions:

 

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(I)                                    The form of paymentfor each of the Executive’s retirement benefits under the Executive RetirementPlans and the Executive’s supplemental retirement benefit shall be a singlelife annuity;

 

(II)                                The commencement datefor each of the Executive’s retirement benefits under the Executive RetirementPlans and the Executive’s supplemental retirement benefit shall be the first dayof the calendar month coincident with or next following his termination ofemployment;

 

(III)                            The term “ActuarialEquivalent” has the meaning given to that term in the Pension Plan with respectto lump sum payments; and

 

(IV)                            The amount of the Executive’ssupplemental retirement benefit shall not be actuarially reduced for earlycommencement.

 

###### (E)                                 Inthe event that the Executive makes a special payment election and pursuant tothat election he is entitled to receive a single lump sum cash payment payable afterthe commencement of his supplemental retirement benefit in another form ofpayment, his lump sum cash payment shall be equal to the Actuarial Equivalent(as that term is used in the Pension Plan with respect to lump sum payments) ofthe remaining payments to be made in connection with his supplementalretirement benefit.

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###### (4)                              Special One-Time PaymentElection Without a Change in Control. Notwithstanding the foregoing, the Executive may make an election, on aform provided by Cinergy, to receive a single lump sum cash payment in anamount equal to one-half of the Actuarial Equivalent (as defined above inSection 3b(ii)(3)(D)) of his supplemental retirement benefit payable no laterthan 30 days after the date of his termination of employment.  In order to be effective, the specialpayment election under this Section 3b(ii)(4) must be made at least one yearprior to the termination of Executive’s employment with Cinergy.  The lump sum amount payable pursuant to thisSection 3b(ii)(4) shall be calculated in accordance with the provisions ofSection 3b(ii)(3)(D).  In the event anamount is paid to or on behalf of the Executive pursuant to this Section3b(ii)(4), such payment shall discharge any liability under this Agreement toor on behalf of the Executive with respect to one-half of the ActuarialEquivalent (as defined above in Section 3b(ii)(3)(D)) of his supplementalretirement benefit.

 

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#### (iii)                               Uponhis retirement, the Executive will be eligible for comprehensive medical anddental benefits which are not materially different from the benefits providedto retirees under the Cinergy Corp. Welfare Benefits Program or any similarprogram or successor to that program. For purposes of determining the amount of the monthly premiums due fromthe Executive, the Executive will receive from Cinergy the maximum subsidyavailable as of the date of his retirement to an active Cinergy employee withthe same medical benefits classification/eligibility as the Executive’s medicalbenefits classification/eligibility on the date of his retirement.

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#### (iv)                              TheExecutive will be a participant in the Annual Incentive Plan and will be paidpursuant to the terms and conditions of that plan, subject to the following:(1) The maximum annual bonus shall be not less than one hundred thirty percent(130%) of the Executive’s Annual Base Salary (the “Maximum Annual Bonus”); and(2) The target annual bonus shall be not less than seventy five percent (75%)of the Executive’s Annual Base Salary (the “Target Annual Bonus”).

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#### (v)                                 TheExecutive will be a participant in the Long-Term Incentive Plan (the “LTIP”),and the Executive’s annualized target award opportunity under the LTIP will beequal to no less than one hundred sixty percent (160%) of his Annual BaseSalary (the “Target LTIP Bonus”).

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### c.                                       FringeBenefits and Perquisites.  Duringthe Employment Period, the Executive will be entitled to the followingadditional fringe benefits in accordance with the terms and conditions ofCinergy’s policies and practices for such fringe benefits:

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#### (i)                                     Cinergywill furnish to the Executive an automobile appropriate for the Executive’slevel of position, or, at Cinergy’s discretion, a cash allowance of equivalentvalue.  Cinergy will also pay all of therelated expenses for gasoline, insurance, maintenance, and repairs, or providefor such expenses within the cash allowance.

 

(ii)                                  Cinergywill pay the initiation fee and the annual dues, assessments, and othermembership charges of the Executive for membership in up to two (2) countryclubs and one (1) luncheon club of the Executive’s choice that are used forbusiness purposes.

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#### (iii)                               Cinergywill provide paid vacation for four (4) weeks per year (or such longer periodfor which Executive is otherwise eligible under Cinergy’s policy).

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#### (iv)                              Cinergywill furnish to the Executive annual financial planning and tax preparationservices, provided, however, that the cost to Cinergy of suchservices shall not exceed $15,000 during any thirty-six (36) consecutive monthperiod.

 

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#### (v)                                 Cinergywill provide other fringe benefits in accordance with Cinergy plans, practices,programs, and policies in effect from time to time, commensurate with hisposition and at least comparable to those applicable generally to seniorexecutives of Cinergy who are considered Tier I or Tier II executives forcompensation purposes.

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### d.                                      Expenses.  Cinergy agrees to reimburse the Executivefor all expenses, including those for travel and entertainment, properlyincurred by him in the performance of his duties under this Agreement inaccordance with the policies established from time to time by the Board ofDirectors.

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### e.                                       RelocationBenefits.  Following termination ofthe Executive’s employment for any reason (other than death), the Executivewill be entitled to reimbursement from Cinergy for the reasonable costs ofrelocating from the Cincinnati, Ohio, area to a new primary residence withinthe continental United States in a manner that is consistent with the terms ofthe Relocation Program.  Notwithstandingthe foregoing, if the Executive becomes employed by another employer and iseligible to receive relocation benefits under another employer-provided plan,any benefits provided to the Executive under this Section 3e will be secondaryto those provided under the other employer-provided relocation plan.  The Executive must report to Cinergy anysuch relocation benefits that he actually receives under anotheremployer-provided plan.

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### f.                                         StockOptions and Stock Appreciation Rights. Notwithstanding Section 5d, upon the occurrence of a Change in Control,any stock options or stock appreciation rights then held by the Executivepursuant to the LTIP or Cinergy Corp. Stock Option Plan shall, to the extentnot otherwise provided in the applicable Stock Related Documents, becomeimmediately exercisable.  If theExecutive terminates employment for any reason during the twenty-four (24)month period commencing upon the occurrence of a Change in Control, notwithstandingSection 5d, any stock options or stock appreciation rights then held by theExecutive pursuant to the LTIP or Cinergy Corp. Stock Option Plan shall, to theextent not otherwise provided in the applicable Stock Related Documents, remainexercisable in accordance with their terms but in no event for a period lessthan the lesser of (i) three months following such termination of employment or(ii) the remaining term of such stock option or stock appreciation right (whichremaining term shall be determined without regard to such termination ofemployment).

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### g.                                      PerformanceAward.  The Executive is herebygranted a contingent right(the “Performance Award”) to have a Nonelective Employer Contributioncredited to his account under the 401(k) Excess Plan in an amount equal to the Fair Market Value as of thevesting date of 129,049 shares of Common Stock (the “Shares”) (which is the number of sharesobtained by dividing $5 million by the Fair Market Value of a share ofCommon Stock as of January 1, 2004),subject to the following terms and conditions:

 

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#### (i)                                     ThePerformance Award shall vest on December 31, 2006, provided that the Executivehas been continuously employed with Cinergy as of such date and the Committeedetermines as of such date that all of the applicable performance measures (asestablished by the Committee and communicated to the Executive no later thanApril 1, 2004) have been satisfied in full. Notwithstanding the foregoing, the Performance Award shall immediatelyvest in full (without regard to whether the performance measures have beensatisfied) if, on or prior to December 31, 2006, the Executive dies or becomesdisabled (as that term is defined in the Cinergy Corp. Long-Term Disability Plan),Cinergy terminates the Executive’s employment other than for Cause, theExecutive terminates employment for Good Reason, or a Change in Controloccurs.  The Performance Award shall becredited to the Executive’s account under the 401(k) Excess Plan as soon asadministratively practicable following the vesting date.

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#### (ii)                                  Unlessotherwise vested in accordance with Section 3g(i), the Executive shall forfeitthe Performance Award if he ceases to remain continuously employed by Cinergyuntil the date on which the Performance Award vests.

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#### (iii)                               The Executive shall have the right toreceive, during the period commencing on January 1, 2004 and ending onthe earlier of the date that the Performance Award vests in accordance withSection 3g(i) or the date that the Performance Award is forfeited in accordancewith Section 3g(ii), cash payments equal to the amount of dividends that theExecutive would have received if he had directly owned the Shares, whichamounts shall be paid to the Executive as soon as administratively practicablefollowing each relevant dividend payment date.  The amounts paid underthis Section 3g(iii) shall be fully vested when paid and shall not be subjectto forfeiture if the Performance Award does not vest thereafter.

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#### (iv)                              Theparties expressly agree and acknowledge that $600,000 of the Performance Award,whether or not vested in accordance with Section 3g(i), shall be deemed to beincluded in the Executive’s Annual Base Salary for each of the calendar years2005 and 2006 for purposes of Section 3b(v) and shall be deemed included in theExecutive’s “Highest Average Earnings” for each of the calendar years 2004,2005 and 2006 for purposes of calculating the Executive’s supplementalretirement benefit under Section 3b(ii). Moreover, for each of the calendar years 2004, 2005 and 2006, theExecutive shall be entitled to receive a special cash bonus, payable no laterthan March 15 of the subsequent calendar year, equal to the excess of (A) thebonus that the Executive would have received for the applicable calendar yearunder the Annual Incentive Plan had the Executive’s Annual Base Salary beenincreased by $600,000, over (B) the actual bonus earned by the Executive forthe applicable calendar year under the Annual Incentive Plan.  The amounts credited under this Section3g(iv)

 

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#### shall not beaffected by any forfeiture of the Performance Award occuring after the relevantcrediting date.

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#### (v)                                 TheCommittee shall make or provide for such adjustments in the number of Sharessubject to the Performance Award as the Committee, in its sole discretionexercised in good faith, may determine is equitably required in order toprevent dilution or enlargement of the Executive’s rights that otherwise wouldresult from (A) any stock dividend, stock split, combination of shares,recapitalization, or other change in the capital structure of the Company, (B)any merger, consolidation, spin-off, split-off, spin-out, split-up,reorganization, partial or complete liquidation, or other distribution ofassets or issuance of rights or warrants to purchase securities, or (C) anyother corporate transaction or event having an effect similar to any of theforegoing. Any amounts paid under thePerformance Award shall be paid from Cinergy’s general assets, and theExecutive shall have the status of a general unsecured creditor with respect toCinergy’s obligations under this Section 3g.

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## **4.****                                      Terminationof Employment.**

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### a.                                       Death.  The Executive’s employment will terminateautomatically upon the Executive’s death during the Employment Period.

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### b.                                      ByCinergy for Cause.  Cinergy mayterminate the Executive’s employment during the Employment Period forCause.  For purposes of this EmploymentAgreement, “Cause” means the following:

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#### (i)                                     Thewillful and continued failure by the Executive to substantially perform theExecutive’s duties with Cinergy (other than any such failure resulting from theExecutive’s incapacity due to physical or mental illness) that, if curable, hasnot been cured within 30 days after the Board of Directors or the ChiefExecutive Officer has delivered to the Executive a written demand forsubstantial performance, which demand specifically identifies the manner inwhich the Executive has not substantially performed his duties.  This event will constitute Cause even if theExecutive issues a Notice of Termination for Good Reason pursuant to Section 4dafter the Board of Directors or Chief Executive Officer delivers a written demandfor substantial performance.

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#### (ii)                                  Thebreach by the Executive of the confidentiality provisions set forth in Section9.

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#### (iii)                               Theconviction of the Executive for the commission of a felony, including the entryof a guilty or nolo contendere plea, or any willful or grossly negligent actionor inaction by the Executive that has a materially adverse effect onCinergy.  For purposes of thisdefinition of Cause, no act, or failure to act, on the Executive’s part will bedeemed “willful” unless it is

 

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#### done, oromitted to be done, by the Executive in bad faith and without reasonable beliefthat the Executive’s act, or failure to act, was in the best interest ofCinergy.

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#### (iv)                              Notwithstandingthe foregoing, Cinergy shall be deemed to have not terminated the employment ofthe Executive for Cause unless and until there shall have been delivered to theExecutive a copy of a resolution duly adopted by the affirmative vote of notless than a majority of the members of the Board (excluding the Executive) thenin office at a meeting of the members of the Board called and held for suchpurpose (after reasonable notice to the Executive and an opportunity for theExecutive, together with his counsel, to be heard by the members of the Board),finding that, in the good faith opinion of the members of the Board (excludingthe Executive), the Executive had committed an act set forth above in thisSection 4b and specifying the particulars thereof in detail.

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### c.                                       ByCinergy Without Cause.  Cinergy may,upon at least 30 days advance written notice to the Executive, terminate theExecutive’s employment during the Employment Period for a reason other thanCause, but the obligations placed upon Cinergy in Section 5 will apply.

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### d.                                      Bythe Executive for Good Reason.  TheExecutive may terminate his employment during the Employment Period for GoodReason.  For purposes of this Agreement,“Good Reason” means the following:

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#### (i)                                     (1)A reduction in the Executive’s Annual Base Salary, except for across-the-boardsalary reductions similarly affecting all Cinergy management personnel, (2) areduction in the amount of the Executive’s Maximum Annual Bonus under theAnnual Incentive Plan, except for across-the-board Maximum Annual Bonusreductions similarly affecting all Cinergy management personnel, or (3) areduction in any other benefit or payment described in Section 3 of thisAgreement, except for changes to the employee benefits programs generallyaffecting Cinergy management personnel, provided that those changes, in theaggregate, will not result in a material adverse change with respect to thebenefits to which the Executive was entitled as of the Effective Date.

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#### (ii)                                  (1)The material reduction without his consent of the Executive’s title, authority,duties, or responsibilities from those in effect immediately prior to thereduction, (2) the failure by Cinergy without the consent of the Executive tonominate the Executive for re-election to the Board, or (3) a material adversechange in the Executive’s reporting responsibilities.

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#### (iii)                               Anybreach by Cinergy of any other material provision of this Agreement (includingbut not limited to the place of performance as specified in Section 2b).

 

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#### (iv)                              TheExecutive’s disability due to physical or mental illness or injury thatprecludes the Executive from performing any job for which he is qualified andable to perform based upon his education, training or experience.

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#### (v)                                 Afailure by the Company to require any successor entity to the Companyspecifically to assume in writing all of the Company’s obligations to theExecutive under this Agreement.

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### e.                                       Bythe Executive Without Good Reason. The Executive may terminate his employment without Good Reason uponprior written notice to the Company.

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### f.                                         Noticeof Termination.  Any termination ofthe Executive’s employment by Cinergy or by the Executive during the EmploymentPeriod (other than a termination due to the Executive’s death) will becommunicated by a written Notice of Termination to the other party to thisAgreement in accordance with Section 12b. For purposes of this Agreement, a “Notice of Termination” means awritten notice that meets the following requirements:

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#### (i)                                     Thenotice indicates the specific termination provision in this Agreement reliedupon as the basis for termination.

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#### (ii)                                  Tothe extent applicable, the notice sets forth in reasonable detail the facts andcircumstances claimed to provide a basis for termination of the Executive’semployment under the provision specified pursuant to Paragraph (i).

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#### (iii)                               Ifthe Date of Termination is other than the date of receipt of the notice, thenotice specifies the Date of Termination, which will be no more than 30 daysafter the date the notice was given. The failure by the Executive or Cinergy to set forth in the Notice ofTermination any fact or circumstances that contributes to a showing of GoodReason or Cause will not waive any right of the Executive or Cinergy under thisAgreement or preclude the Executive or Cinergy from asserting that fact orcircumstance in enforcing rights under this Agreement.

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#### (iv)                              ANotice of Termination for Cause after a Change in Control has occurred mustinclude a copy of a resolution duly adopted by the affirmative vote of not lessthree quarters (3/4) of the entire membership of the Board of Directors(excluding the Executive) at a meeting of the Board of Directors called andheld for the purpose of considering the termination.  The resolution must include a finding that, in the good faithopinion of the Board of Directors (excluding the Executive), the Executive wasguilty of conduct set forth in the definition of Cause, and it must specify theparticulars of the conduct in detail.

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### g.                                      Saleof Stock.  The Executiveacknowledges and agrees that he shall not sell or otherwise dispose of anyshares of Company stock acquired pursuant to the exercise of a stock option,other than shares sold in order to pay an option

 

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### exercise priceor the related tax withholding obligation, until 90 days after the Date ofTermination.  Notwithstanding theforegoing, Cinergy, in its sole discretion, may waive the restrictionscontained in the previous sentence.

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## **5.****                                      Obligationsof Cinergy Upon Termination.**

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### a.                                       CertainTerminations.

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#### (i)                                     Ifa Qualifying Termination occurs during the Employment Period, Cinergy will payto the Executive a lump sum amount, in cash, equal to the sum of the followingAccrued Obligations:

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##### (1)                                  thepro-rated portion of the Executive’s Annual Base Salary payable through theDate of Termination, to the extent not previously paid.

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##### (2)                                  anyamount payable to the Executive under the Annual Incentive Plan in respect ofthe most recently completed fiscal year, to the extent not theretofore paid.

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##### (3)                                  anamount equal to the AIP Benefit for the fiscal year that includes the Date ofTermination multiplied by a fraction, the numerator of which is the number ofdays from the beginning of that fiscal year to and including the Date ofTermination and the denominator of which is three hundred and sixty-five(365).  The AIP Benefit component of thecalculation will be equal to the annual bonus that would have been earned bythe Executive pursuant to any annual bonus or incentive plan maintained byCinergy in respect of the fiscal year in which occurs the Date of Termination,determined by projecting Cinergy’s performance and other applicable goals andobjectives for the entire fiscal year based on Cinergy’s performance during theperiod of such fiscal year occurring prior to the Date of Termination, andbased on such other assumptions and rates as Cinergy deems reasonable.

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##### (4)                                  theAccrued Obligations described in this Section 5a(i) will be paid within thirty(30) days after the Date of Termination. These Accrued Obligations are payable to the Executive regardless ofwhether a Change in Control has occurred.

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#### (ii)                                  Inthe event of a Qualifying Termination either prior to the occurrence of aChange in Control, or more than twenty-four (24) months following theoccurrence of a Change in Control, Cinergy will pay the Accrued Obligations,and Cinergy will have the following additional obligations described in thisSection 5a(ii); provided, however, that each of the benefitsdescribed below in this Section 5a(ii) shall only be provided to the Executiveif, upon presentation to the Executive following a Qualifying

 

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#### Termination,the Executive timely executes and does not timely revoke the Waiver andRelease.

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##### (1)                                  Cinergywill pay to the Executive a lump sum amount, in cash, equal to three (3) timesthe sum of the Annual Base Salary and the Annual Bonus.  For this purpose, the Annual Base Salarywill be at the rate in effect at the time Notice of Termination is given(without giving effect to any reduction in Annual Base Salary, if any, prior tothe termination, other than across-the-board reductions), and the Annual Bonuswill be the higher of (A) the annual bonus earned by the Executive pursuant toany annual bonus or incentive plan maintained by Cinergy in respect of the yearending immediately prior to the fiscal year in which occurs the Date ofTermination, and (B) the annual bonus that would have been earned by theExecutive pursuant to any annual bonus or incentive plan maintained by Cinergyin respect of the fiscal year in which occurs the Date of Termination,calculated by projecting Cinergy’s performance and other applicable goals andobjectives for the entire fiscal year based on Cinergy’s performance during theperiod of such fiscal year occurring prior to the Date of Termination, andbased on such other assumptions and rates as Cinergy deems reasonable; provided,however that for purposes of this Section 5a(ii)(1)(B), the Annual Bonusshall not be less than the Target Annual Bonus, nor greater than the MaximumAnnual Bonus for the year in which the Date of Termination occurs.  This lump sum will be paid within thirty(30) days after the expiration of the revocation period contained in the Waiverand Release.

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##### (2)                                  Withrespect to each performance share award held by the Executive pursuant to theValue Creation Plan of the LTIP on the Date of Termination (collectively, the“Performance Share Awards”), Cinergy will pay to the Executive an amount, incash, equal to the excess (if any) of (i) the amount to which the Executivewould have been entitled under each Performance Share Award if he had remainedemployed by Cinergy until the end of the Employment Period, over (ii) theamount to which he is actually entitled under such Performance ShareAward.  With respect to each PerformanceShare Award, such amount shall be paid to the Executive at the same time asother amounts are paid with respect to that Performance Share Award.

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##### (3)                                  Subjectto Clauses (A), (B) and (C) below, Cinergy will provide, until the end of theEmployment Period, medical and dental benefits to the Executive and/or theExecutive’s eligible dependents at least equal to those that would have beenprovided if the Executive’s employment had not been terminated (excludingbenefits to which the Executive has waived his rights in writing).

 

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##### The benefitsdescribed in the preceding sentence will be in accordance with the medical andwelfare benefit plans, practices, programs, or policies of Cinergy (the“M&W Plans”) as then currently in effect and applicable generally to otherCinergy senior executives and their families.

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###### (A)                              If,as of the Executive’s Date of Termination, the Executive meets the eligibilityrequirements for Cinergy’s retiree medical and welfare benefit plans, theprovision of those retiree medical and welfare benefit plans to the Executivewill satisfy Cinergy’s obligation under this Section 5a(ii)(3).

######  

###### (B)                                If,as of the Executive’s Date of Termination, the provision to the Executive ofthe M&W Plan benefits described in this Section 5a(ii)(3) would either (1)violate the terms of the M&W Plans (or any related insurance policies) or(2) violate any of the Code’s nondiscrimination requirements applicable to theM&W Plans, then Cinergy, in its sole discretion, may elect to pay theExecutive, in lieu of the M&W Plan benefits described under this Section5a(ii)(3), a lump sum cash payment equal to the total monthly premiums (or inthe case of a self funded plan, the cost of COBRA continuation coverage) thatwould have been paid by Cinergy for the Executive under the M&W Plans fromthe Date of Termination through the end of the Employment Period.  Nothing in this Clause will affect theExecutive’s right to elect COBRA continuation coverage under a M&W Plan inaccordance with applicable law, and Cinergy will make the payment described inthis Clause whether or not the Executive elects COBRA continuation coverage,and whether or not the Executive receives health coverage from anotheremployer.

######  

###### (C)                                Ifthe Executive becomes employed by another employer and is eligible to receivemedical or other welfare benefits under another employer-provided plan, anybenefits provided to the Executive under the M&W Plans will be secondary tothose provided under the other employer-provided plan during the Executive’sapplicable period of eligibility.

######  

##### (4)                                  Cinergywill pay the Executive a lump sum amount, in cash, equal to $15,000 in order tocover tax counseling services through an agency selected by the Executive.  Such payment will be transferred to the Executivewithin thirty (30) days of the

 

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##### expiration ofthe revocation period contained in the Waiver and Release.

#####  

##### (5)                                  Inlieu of any and all other rights with respect to the automobile assigned byCinergy to the Executive (or the equivalent cash allowance), Cinergy willprovide the Executive with a lump sum payment in the amount of $60,000.  Such payment will be transferred to theExecutive within thirty (30) days of the expiration of the revocation periodcontained in the Waiver and Release.

#####  

#### (iii)                               Inthe event of a Qualifying Termination during the twenty-four (24) month periodbeginning upon the occurrence of a Change in Control, Cinergy will pay theAccrued Obligations listed in Sections 5a(i)(1) and (2), Cinergy will pay theAccrued Obligations listed in Section 5a(i)(3) (but only if such QualifyingTermination occurs after the calendar year in which occurs such Change in Control)and Cinergy will have the following additional obligations described in thisSection 5a(iii); provided, however, that each of the benefitsdescribed below in this Section 5a(iii) shall only be provided to the Executiveif, upon presentation to the Executive following a Qualifying Termination, theExecutive timely executes and does not timely revoke the Waiver and Release.

####  

##### (1)                                  Cinergywill pay to the Executive a lump sum severance payment, in cash, equal to three(3) times the higher of (x) the sum of the Executive’s current Annual BaseSalary and Target Annual Bonus and (y) the sum of the Executive’s Annual BaseSalary in effect immediately prior to the Change in Control and the Change inControl Bonus.  For purposes of thisAgreement, the Change in Control Bonus shall mean the higher of (A) the annualbonus earned by the Executive pursuant to any annual bonus or incentive planmaintained by Cinergy in respect of the year ending immediately prior to thefiscal year in which occurs the Date of Termination or, if higher, immediatelyprior to the fiscal year in which occurs the Change in Control, and (B) theannual bonus that would have been earned by the Executive pursuant to anyannual bonus or incentive plan maintained by Cinergy in respect of the year inwhich occurs the Date of Termination, calculated by projecting Cinergy’sperformance and other applicable goals and objective for the entire fiscal yearbased on Cinergy’s performance during the period of such fiscal year occurringprior to the Date of Termination, and based on such other assumptions and ratesas Cinergy deems reasonable, provided, however, that for purposesof this Section 5a(iii)(1)(B), such Change in Control Bonus shall not be lessthan the Target Annual Bonus, nor greater than the Maximum Annual Bonus.  This lump sum will be paid within thirty(30) days of the expiration of the revocation period contained

 

15

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##### in the Waiverand Release.  Nothing in this Section5a(iii)(1) shall preclude the Executive from receiving the amount, if any, towhich he is entitled in accordance with the terms of the Annual Incentive Planfor the fiscal year that includes the Date of Termination.

#####  

##### (2)                                  Cinergywill pay to the Executive the lump sum present value of any benefits under theExecutive Supplemental Life Program under the terms of the applicable plan orprogram as of the Date of Termination, calculated as if the Executive was fullyvested as of the Date of Termination. The lump sum present value, assumingcommencement at the Executive’s age as of the Date of Termination, will bedetermined using the interest rate applicable to lump sum payments in theCinergy Corp. Non-Union Employees’ Pension Plan or any successor to that planfor the plan year that includes the Date of Termination. To the extent no suchinterest rate is provided therein, the annual interest rate applicable underSection 417(e)(3) of the Code, or any successor provision thereto, for thesecond full calendar month preceding the first day of the calendar year thatincludes the Date of Termination will be used. This lump sum will be paidwithin thirty (30) days of the expiration of the revocation period contained inthe Waiver and Release.

#####  

##### (3)                                  TheExecutive shall be fully vested in his accrued benefits as of the Date ofTermination under the Executive Retirement Plans, and his aggregate accruedbenefits thereunder and under Section 3b(ii) of this Agreement will becalculated, and he will be treated for all purposes, as if he was credited withthree (3) additional years of age and service as of the Date of Termination, provided,however, that to the extent a calculation is made regarding theactuarial equivalent amount of any alternate form of benefit, the Executivewill not be credited with three additional years of age for purposes of suchcalculation.

#####  

##### (4)                                  Fora thirty-six (36) month period after the Date of Termination, Cinergy willarrange to provide to the Executive and/or the Executive’s eligible dependentslife, disability, accident, and health insurance benefits substantially similarto those that the Executive and/or the Executive’s dependents are receivingimmediately prior to the Notice of Termination at a substantially similar costto the Executive (without giving effect to any reduction in those benefitssubsequent to a Change in Control that constitutes Good Reason), except for anybenefits that were waived by the Executive in writing.  If Cinergy arranges to provide the Executiveand/or the Executive’s dependents with life, disability, accident, and healthinsurance benefits, those benefits will be reduced to the extent comparablebenefits are actually received by or made available to

 

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##### the Executiveand/or the Executive’s dependents during the thirty-six (36) month periodfollowing the Executive’s Date of Termination. The Executive must report to Cinergy any such benefits that he or hisdependents actually receives or that are made available to him or hisdependents.  In lieu of the benefitsdescribed in the preceding sentences, Cinergy, in its sole discretion, mayelect to pay to the Executive a lump sum cash payment equal to thirty-six (36)times the monthly premiums (or in the case of a self funded plan, the cost ofCOBRA continuation coverage) that would have been paid by Cinergy to providethose benefits to the Executive and/or the Executive’s dependents.  Nothing in this Section 5a(iii)(4) willaffect the Executive’s right to elect COBRA continuation coverage in accordancewith applicable law, and Cinergy will provide the benefits or make the paymentdescribed in this Clause whether or not the Executive elects COBRA continuationcoverage, and whether or not the Executive receives health coverage fromanother employer.

#####  

##### (5)                                  Inlieu of any and all other rights with respect to the automobile assigned byCinergy to the Executive (or the equivalent cash allowance), Cinergy willprovide the Executive with a lump sum payment in the amount of $60,000.  Such payment will be transferred to theExecutive within thirty (30) days of the expiration of the revocation periodcontained in the Waiver and Release.

#####  

##### (6)                                  Cinergywill pay the Executive a lump sum amount, in cash, equal to $15,000 in order tocover tax counseling services through an agency selected by the Executive.  Such payment will be transferred to the Executivewithin thirty (30) days of the expiration of the revocation period contained inthe Waiver and Release.

#####  

##### (7)                                  Cinergywill provide annual dues and assessments of the Executive for membership in acountry club selected by the Executive until the end of the EmploymentPeriod.  Such payment will betransferred to the Executive within thirty (30) days of the expiration of therevocation period contained in the Waiver and Release.

#####  

##### (8)                                  Cinergywill provide outplacement services suitable to the Executive’s position untilthe end of the Employment Period; provided, however, that in noevent shall the cost of such outplacement services exceed 15% of theExecutive’s Annual Base Salary.

 

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For purposes of this Section5a(iii), the Executive will be deemed to have incurred a Qualifying Terminationupon a Change in Control if the Executive’s employment is terminated prior to aChange in Control, without Cause at the direction of a Person who has enteredinto an agreement with Cinergy, the consummation of which will constitute aChange in Control, or if the Executive terminates his employment for GoodReason prior to a Change in Control if the circumstances or event thatconstitutes Good Reason occurs at the direction of such a Person.

 

### b.                                      Terminationby Cinergy for Cause or by the Executive Other Than for Good Reason.  Subject to the provisions of Section 5c andSection 7, and notwithstanding any other provisions of this Agreement, if theExecutive’s employment is terminated for Cause during the Employment Period, orif the Executive terminates employment during the Employment Period other thana termination for Good Reason, Cinergy will have no further obligations to theExecutive under this Agreement other than the obligation to pay to theExecutive the Accrued Obligations, plus any other earned but unpaidcompensation, in each case to the extent not previously paid.

###  

### c.                                       CertainTax Consequences.

###  

#### (i)                                     Inthe event that any compensation and/or benefits paid or payable to theExecutive or for his benefit pursuant to the terms of this Agreement or anyother plan or arrangement in connection with, or arising out of, his employmentwith Cinergy or a change in ownership or effective control of Cinergy or of asubstantial portion of its assets (a “Payment” or “Payments”) would be subjectto any Excise Tax, then the Executive will be entitled to receive an additionalpayment (a “Gross-Up Payment”) in an amount such that after payment by theExecutive of all taxes (including any interest, penalties, additional tax, orsimilar items imposed with respect thereto and the Excise Tax), including anyExcise Tax imposed upon the Gross-Up Payment, the Executive retains an amountof the Gross-Up Payment equal to the Excise Tax imposed upon or assessableagainst the Executive due to the Payments.

####  

#### (ii)                                  Subjectto the provisions of Section 5c, all determinations required to be made underthis Section 5c, including whether and when a Gross-Up Payment is required andthe amount of such Gross-Up Payment and the assumptions to be utilized inarriving at such determination, shall be made by the Accounting Firm, whichshall provide detailed supporting calculations both to the Company and theExecutive within fifteen (15) business days of the receipt of notice from theExecutive that there has been a Payment, or such earlier time as is requestedby the Company.  If the Accounting Firmdetermines that no Excise Tax is payable by the Executive, it shall, at thesame time as it makes such determination, furnish the Executive with an opinionthat he has substantial authority not to report any Excise Tax on his federalincome tax return.  All fees andexpenses of the Accounting Firm shall be borne solely by the Company.  Any Gross-Up Payment, as determined pursuantto this Section 5c, shall

 

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#### be paid byCinergy to the Executive within five (5) days of the receipt of the AccountingFirm’s determination.  Any determinationby the Accounting Firm shall be binding upon Cinergy and the Executive.  As a result of the uncertainty in theapplication of Section 4999 of the Code at the time of the initialdetermination by the Accounting Firm hereunder, it is possible that Gross-UpPayments which will not have been made by Cinergy should have been made(“Underpayment”), consistent with the calculations required to be madehereunder.  In the event of anyUnderpayment, the Accounting Firm shall determine the amount of theUnderpayment that has occurred and any such Underpayment shall be promptly paidby Cinergy to or for the benefit of the Executive, and Cinergy shall indemnifyand hold harmless the Executive for any such Underpayment, on an after-taxbasis, including interest and penalties with respect thereto.  In the event that the Excise Tax issubsequently determined to be less than the amount taken into account hereunderat the time of termination of the Executive’s employment, then, unlessotherwise treated as an impermissible loan under applicable law, the Executiveshall repay to the Company, at the time that the amount of such reduction inExcise Tax is finally determined, the portion of the Gross-Up Paymentattributable to such reduction (plus that portion of the Gross-Up Paymentattributable to the Excise Tax and federal, state and local income andemployment tax imposed on the Gross-Up Payment being repaid by the Executive tothe extent that such repayment results in a reduction in Excise Tax and/or afederal, state or local income or employment tax deduction) plus interest onthe amount of such repayment at the rate provided in Code Section1274(b)(2)(B).

####  

#### (iii)                               Thevalue of any non-cash benefits or any deferred payment or benefit paid orpayable to the Executive will be determined in accordance with the principlesof Code Sections 280G(d)(3) and (4). For purposes of determining the amount of the Gross-Up Payment, theExecutive will be deemed to pay federal income taxes at the highest marginalrate of federal income taxation in the calendar year in which the Gross-UpPayment is to be made and applicable state and local income taxes at thehighest marginal rate of taxation in the state and locality of the Executive’sresidence on the Date of Termination, net of the maximum reduction in federalincome taxes that would be obtained from deduction of those state and localtaxes.

####  

#### (iv)                              Notwithstandinganything contained in this Agreement to the contrary, in the event that,according to the Accounting Firm’s determination, an Excise Tax will be imposedon any Payment or Payments, Cinergy will pay to the applicable governmenttaxing authorities as Excise Tax withholding, the amount of the Excise Tax thatCinergy has actually withheld from the Payment or Payments in accordance withlaw.

 

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### d.                                      ValueCreation Plan and Stock Options. Upon the Executive’s termination of employment for any reason, theExecutive’s entitlement to restricted shares and performance shares under theValue Creation Plan and any stock options granted under the Cinergy Corp. StockOption Plan, the LTIP or any other stock option plan will be determined underthe terms of the appropriate plan and any applicable administrative guidelinesand written agreements, provided, however, that following theoccurrence of a Change in Control the terms of any such plan, administrativeguideline or written agreement shall not be amended in a manner that wouldadversely affect the Executive with respect to awards granted to the Executiveprior to the Change in Control.

###  

### e.                                       BenefitPlans in General.  Upon theExecutive’s termination of employment for any reason, the Executive’sentitlements, if any, under all benefit plans of Cinergy, including but notlimited to the Deferred Compensation Plan, 401(k) Excess Plan, Cinergy Corp.Supplemental Executive Retirement Plan, Cinergy Corp. Excess Profit SharingPlan and any vacation policy, shall be determined under the terms of suchplans, policies and any applicable administrative guidelines and writtenagreements, provided, however, that following the occurrence of aChange in Control the terms of such plans and policies and any applicableadministrative guidelines and written agreements shall not be amended in amanner that would adversely affect the Executive with respect to benefitsearned by the Executive prior to the Change in Control.

###  

### f.                                         OtherFees and Expenses.  Cinergy willalso reimburse the Executive for all reasonable legal fees and expenses incurredby the Executive (i) in successfully disputing a termination which isultimately determined to constitute a Qualifying Termination that entitles theExecutive to Severance Benefits or (ii) in reasonably disputing whether or notCinergy has terminated his employment for Cause.  Payment will be made within five (5) business days after deliveryof the Executive’s written request for payment accompanied by such evidence offees and expenses incurred as Cinergy reasonably may require.

###  

## **6.****                                     ****Non-Exclusivity of Rights. **Nothing in this Agreement will preventor limit the Executive’s continuing or future participation in any benefit,plan, program, policy, or practice provided by Cinergy and for which theExecutive may qualify, except with respect to any benefit to which theExecutive has waived his rights in writing or any plan, program, policy, orpractice that expressly excludes the Executive from participation.  In addition, nothing in this Agreement willlimit or otherwise affect the rights the Executive may have under any othercontract or agreement with Cinergy entered into after the Effective Date.  Amounts that are vested benefits or that theExecutive is otherwise entitled to receive under any benefit, plan, program,policy, or practice of, or any contract or agreement entered into after theEffective Date with Cinergy, at or subsequent to the Date of Termination, willbe payable in accordance with that benefit, plan, program, policy or practice,or that contract or agreement, except as explicitly modified by thisAgreement.  Notwithstanding the above,in the event that the Executive receives Severance Benefits under Section5a(ii) or 5a(iii), (a) the Executive shall not be entitled to any benefitsunder any severance plan of Cinergy, including but not limited to the

 

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## SeveranceOpportunity Plan for Non-Union Employees of Cinergy Corp. and (b) if theExecutive receives such Severance Benefits as a result of his termination forGood Reason, as that term is defined in Section 4d(iv), Cinergy’s obligationsunder Sections 5a(ii) and 5a(iii) shall be reduced by the amount of anybenefits payable to the Executive under any short-term or long-term disabilityplan of Cinergy, the amount of which shall be determined by Cinergy in goodfaith.

##  

## **7.****                                     ****Full Settlement: Mitigation. **Exceptas otherwise provided herein, Cinergy’s obligation to make the paymentsprovided for in this Agreement and otherwise to perform its obligations underthis Agreement will not be affected by any set-off, counterclaim, recoupment,defense, or other claim, right, or action that Cinergy may have against theExecutive or others.  In no event willthe Executive be obligated to seek other employment or take any other action byway of mitigation of the amounts (including amounts for damages for breach)payable to the Executive under any of the provisions of this Agreement and,except as provided in Sections 3e, 5a(ii)(3) and 5a(iii)(4), those amounts willnot be reduced simply because the Executive obtains other employment.  If the Executive finally prevails on thesubstantial claims brought with respect to any dispute between Cinergy and theExecutive as to the interpretation, terms, validity, or enforceability of(including any dispute about the amount of any payment pursuant to) thisAgreement, Cinergy agrees to pay all reasonable legal fees and expenses thatthe Executive may reasonably incur as a result of that dispute.

##  

## **8.****                                      Arbitration.**  The parties agree that any dispute, claim,or controversy based on common law, equity, or any federal, state, or localstatute, ordinance, or regulation (other than workers’ compensation claims)arising out of or relating in any way to the Executive’s employment, the terms,benefits, and conditions of employment, or concerning this Agreement or itstermination and any resulting termination of employment, including whether sucha dispute is arbitrable, shall be settled by arbitration.  This agreement to arbitrate includes but isnot limited to all claims for any form of illegal discrimination, improper orunfair treatment or dismissal, and all tort claims.  The Executive will still have a right to file a discriminationcharge with a federal or state agency, but the final resolution of anydiscrimination claim will be submitted to arbitration instead of a court orjury.  The arbitration proceeding willbe conducted under the employment dispute resolution arbitration rules of theAmerican Arbitration Association in effect at the time a demand for arbitrationunder the rules is made, and such proceeding will be adjudicated in the stateof Ohio in accordance with the laws of the state of Ohio, without regard to anyapplicable state’s choice of law provisions. The decision of the arbitrator(s), including determination of the amountof any damages suffered, will be exclusive, final, and binding on all parties,their heirs, executors, administrators, successors and assigns.  Each party will bear its own expenses in thearbitration for arbitrators’ fees and attorneys’ fees, for its witnesses, andfor other expenses of presenting its case. Other arbitration costs, including administrative fees and fees forrecords or transcripts, will be borne equally by the parties.  Notwithstanding anything in this Section tothe contrary, if the Executive prevails with respect to any dispute submittedto arbitration under this Section, Cinergy will reimburse or pay all legal feesand expenses that the Executive may reasonably incur as a result of the disputeas required by Section 7.

 

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## **9.****                                     ****Confidential Information.**  The Executive will hold in a fiduciarycapacity for the benefit of Cinergy, as well as all of Cinergy’s successors andassigns, all secret, confidential information, knowledge, or data relating toCinergy, and its affiliated businesses, that the Executive obtains during theExecutive’s employment by Cinergy or any of its affiliated companies, and thathas not been or subsequently becomes public knowledge (other than by acts by theExecutive or representatives of the Executive in violation of thisAgreement).  During the EmploymentPeriod and thereafter, the Executive will not, without Cinergy’s prior writtenconsent or as may otherwise be required by law or legal process, communicate ordivulge any such information, knowledge, or data to anyone other than Cinergyand those designated by it.  TheExecutive understands that during the Employment Period, Cinergy may berequired from time to time to make public disclosure of the terms or existenceof the Executive’s employment relationship to comply with various laws andlegal requirements.  In addition to allother remedies available to Cinergy in law and equity, this Agreement issubject to termination by Cinergy for Cause under Section 4b in the event theExecutive violates any provision of this Section.

##  

## **10.****                               Successors.**

##  

### a.                                       ThisAgreement is personal to the Executive and, without Cinergy’s prior writtenconsent, cannot be assigned by the Executive other than Executive’s designationof a beneficiary of any amounts payable hereunder after the Executive’sdeath.  This Agreement will inure to thebenefit of and be enforceable by the Executive’s legal representatives.

###  

### b.                                      ThisAgreement will inure to the benefit of and be binding upon Cinergy and itssuccessors and assigns.

###  

### c.                                       Cinergywill require any successor (whether direct or indirect, by purchase, merger,consolidation or otherwise) to all or substantially all of the business and/orassets of Cinergy to assume expressly and agree to perform this Agreement inthe same manner and to the same extent that Cinergy would be required toperform it if no succession had taken place. Cinergy’s failure to obtain such an assumption and agreement prior to theeffective date of a succession will be a breach of this Agreement and willentitle the Executive to compensation from Cinergy in the same amount and onthe same terms as if the Executive were to terminate his employment for GoodReason upon a Change in Control, except that, for purposes of implementing theforegoing, the date on which any such succession becomes effective will bedeemed the Date of Termination.

###  

## **11.****                              ****Definitions. **As used in this Agreement, the following terms, whencapitalized, will have the following meanings:

##  

### a.                                       AccountingFirm.  “Accounting Firm” meansCinergy’s independent auditors.

###  

### b.                                      AccruedObligations.  “Accrued Obligations”means the accrued obligations described in Section 5a(i).

 

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### c.                                       Agreement.  “Agreement” means this Employment Agreementbetween Cinergy and the Executive.

###  

### d.                                      AIPBenefit.  “AIP Benefit” means theAnnual Incentive Plan benefit described in Section 5a(i).

###  

### e.                                       AnnualBase Salary.  “Annual Base Salary”means, except where otherwise specified herein, the annual base salary payableto the Executive pursuant to Section 3a.

###  

### f.                                         AnnualBonus.  “Annual Bonus” has themeaning set forth in Section 5a(ii)(1).

###  

### g.                                      AnnualIncentive Plan.  “Annual IncentivePlan” means the Cinergy Corp. Annual Incentive Plan or any similar plan orsuccessor to the Annual Incentive Plan.

###  

### h.                                      Boardof Directors or Board.  “Board ofDirectors” or “Board” means the board of directors of the Company.

###  

### i.                                          COBRA.  “COBRA” means the Consolidated OmnibusBudget Reconciliation Act of 1985, as amended.

###  

### j.                                          Cause.  “Cause” has the meaning set forth in Section4b.

###  

### k.                                       Changein Control.  A “Change in Control”will be deemed to have occurred if any of the following events occur, after theEffective Date:

###  

#### (i)                                     AnyPerson is or becomes the beneficial owner (as defined in Rule 13d-3 under theSecurities Exchange Act of 1934, as amended (“1934 Act”)), directly orindirectly, of securities of the Company (not including in the securitiesbeneficially owned by such Person any securities acquired directly from theCompany or its affiliates) representing more than twenty percent (20%) of thecombined voting power of the Company’s then outstanding securities, excludingany Person who becomes such a beneficial owner in connection with a transactiondescribed in Clause (1) of Paragraph (ii) below; or

####  

#### (ii)                                  Thereis consummated a merger or consolidation of the Company or any direct orindirect subsidiary of the Company with any other corporation, partnership orother entity, other than (1) a merger or consolidation that would result in thevoting securities of the Company outstanding immediately prior to that mergeror consolidation continuing to represent (either by remaining outstanding or bybeing converted into voting securities of the surviving entity or its parent)at least sixty percent (60%) of the combined voting power of the securities ofthe Company or the surviving entity or its parent outstanding immediately afterthe merger or consolidation, or (2) a merger or consolidation effected toimplement a recapitalization of the Company (or similar transaction) in whichno Person is or becomes the beneficial owner, directly or indirectly, of

 

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#### securities ofthe Company (not including in the securities beneficially owned by such aPerson any securities acquired directly from the Company or its affiliatesother than in connection with the acquisition by the Company or its affiliatesof a business) representing twenty percent (20%) or more of the combined votingpower of the Company’s then outstanding securities; or

####  

#### (iii)                               Duringany period of two (2) consecutive years, individuals who at the beginning ofthat period constitute the Board of Directors and any new director (other thana director whose initial assumption of office is in connection with an actualor threatened election contest, including but not limited to a consentsolicitation, relating to the election of directors of the Company) whoseappointment or election by the Company’s stockholders was approved orrecommended by a vote of at least two-thirds (2/3) of the directors then stillin office who either were directors at the beginning of that period or whoseappointment, election, or nomination for election was previously so approved orrecommended cease for any reason to constitute a majority of the Board ofDirectors; or

####  

#### (iv)                              Thestockholders of the Company approve a plan of complete liquidation ordissolution of the Company or there is consummated a sale or disposition by theCompany of all or substantially all of the Company’s assets, other than a saleor disposition by the Company of all or substantially all of the Company’sassets to an entity, at least sixty percent (60%) of the combined voting powerof the voting securities of which are owned by stockholders of the Company insubstantially the same proportions as their ownership of the Companyimmediately prior to the sale.

####  

### l.                                          Changein Control Bonus.  “Change inControl Bonus” has the meaning set forth in Section 5a(iii)(1).

###  

### m.                                    Cinergy.  “Cinergy” means the Company, itssubsidiaries, and/or its affiliates, and any successors to the foregoing.

###  

### n.                                      Code.  “Code” means the Internal Revenue Code of1986, as amended, and interpretive rules and regulations.

###  

### o.                                      Committee.  “Committee” means the duly designatedcompensation committee of Cinergy’s Board of Directors.

###  

### p.                                      CommonStock.  “Common Stock” means anyauthorized share of ownership of the Company represented by a common stockcertificate, with par value of $.01 per share, or any other appropriateinstrument evidencing the same.

###  

### q.                                      Company.  “Company” means Cinergy Corp.

 

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### r.                                         Dateof Termination.  “Date ofTermination” means:

###  

#### (i)                                     ifthe Executive’s employment is terminated by Cinergy for Cause, or by theExecutive with Good Reason, the date of receipt of the Notice of Termination orany later date specified in the notice, as the case may be;

####  

#### (ii)                                  ifthe Executive’s employment is terminated by the Executive without Good Reason,thirty (30) days after the date on which the Executive notifies Cinergy of thetermination;

####  

#### (iii)                               ifthe Executive’s employment is terminated by Cinergy other than for Cause,thirty (30) days after the date on which Cinergy notifies the Executive of thetermination; and

####  

#### (iv)                              ifthe Executive’s employment is terminated by reason of death, the date of death.

####  

### s.                                       DeferredCompensation Agreement.  “DeferredCompensation Agreement” means the deferred compensation agreement, datedDecember 16, 1992 and effective as of January 1, 1992, between the Executiveand PSI Energy, Inc.

###  

### t.                                         DeferredCompensation Plan.  “DeferredCompensation Plan” means the Cinergy Corp. Non-Qualified Deferred IncentiveCompensation Plan or any similar plan or successor to that plan.

###  

### u.                                      EffectiveDate.  “Effective Date” has themeaning given to that term in the first paragraph of this Agreement.

###  

### v.                                      EmploymentPeriod.  “Employment Period” has themeaning set forth in Section 1b.

###  

### w.                                    ExciseTax.  “Excise Tax” means any excisetax imposed by Code section 4999, together with any interest, penalties,additional tax or similar items that are incurred by the Executive with respectto the excise tax imposed by Code section 4999.

###  

### x.                                        Executive.  “Executive” has the meaning given to thatterm in the first paragraph of this Agreement.

###  

### y.                                      ExecutiveRetirement Plans.  “ExecutiveRetirement Plans” means the Pension Plan, the Cinergy Corp. SupplementalExecutive Retirement Plan and the Cinergy Corp. Excess Pension Plan or anysimilar plans or successors to those plans.

###  

### z.                                        ExecutiveSupplemental Life Program. “Executive Supplemental Life Program” means the Cinergy Corp. ExecutiveSupplemental Life Insurance Program or any similar program or successor to theExecutive Supplemental Life Program.

 

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### aa.                                 FairMarket Value.  “Fair Market Value”means, as of any particular date with respect to a share of Common Stock, theaverage of the high and low sales prices of a share of Common Stock on suchdate, or on the preceding trading day if that date was not a trading date, asreported by the “NYSE -Composite Transactions” published in The Wall StreetJournal.

###  

### bb.                               401(k)Excess Plan.  “401(k) Excess Plan”means the Cinergy Corp. 401(k) Excess Plan, or any similar plan or successor tothat plan.

###  

### cc.                                 GoodReason.  “Good Reason” has themeaning set forth in Section 4d.

###  

### dd.                               Gross-UpPayment.  “Gross-Up Payment” has themeaning set forth in Section 5c.

###  

### ee.                                 HighestAverage Earnings.  “Highest AverageEarnings” shall have the meaning given to such term in the Cinergy Corp.Supplemental Executive Retirement Plan (as modified where relevant by Section3g(iv) hereof), provided,however, that any amount deferred by the Executive under the DeferredCompensation Agreement during any relevant period shall be included in theExecutive’s Highest Average Earnings. For purposes of clarity, the parties hereto acknowledge and agree thatthe Executive’s Highest Average Earnings for any year shall not include anybenefits received by the Executive pursuant to Section 5 of this Agreement,other than pursuant to Section 5a(i) of this Agreement.

###  

### ff.                                     InsuranceAgreement.  “Insurance Agreement”means the split dollar insurance agreement dated October 7, 1992 between theExecutive and PSI Energy, Inc., as amended effective December 11, 1992 and June1, 2000.

###  

### gg.                               Long-TermIncentive Plan or LTIP.  “Long-TermIncentive Plan” or “LTIP” means the long-term incentive plan implemented underthe Cinergy Corp. 1996 Long-Term Incentive Compensation Plan or any successorto that plan.

###  

### hh.                               M&WPlans.  “M&W Plans” has themeaning set forth in Section 5a(ii)(3).

###  

### ii.                                       MaximumAnnual Bonus.  “Maximum AnnualBonus” has the meaning set forth in Section 3b.

###  

### jj.                                       NonelectiveEmployer Contribution.  “NonelectiveEmployer Contribution” has the meaning set forth in the 401(k) Excess Plan.

###  

### kk.                                 Noticeof Termination.  “Notice ofTermination” has the meaning set forth in Section 4f.

###  

### ll.                                       Paymentor Payments.  “Payment” or“Payments” has the meaning set forth in Section 5c.

###  

### mm.                           PensionPlan.  “Pension Plan” means theCinergy Corp. Non-Union Employees’ Pension Plan or any successor to that plan.

 

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### nn.                               PerformanceAward.  “Performance Award” has themeaning set forth in Section 3g.

###  

### oo.                               PerformanceShare Awards.  “Performance ShareAwards” has the meaning set forth in Section 5a(ii)(2).

###  

### pp.                               Person.  “Person” has the meaning set forth inparagraph 3(a)(9) of the 1934 Act, as modified and used in subsections 13(d)and 14(d) of the 1934 Act; however, a Person will not include the following:

###  

#### (i)                                     Cinergyor any of its subsidiaries or affiliates;

####  

#### (ii)                                  Atrustee or other fiduciary holding securities under an employee benefit plan ofCinergy or its subsidiaries or affiliates;

####  

#### (iii)                               Anunderwriter temporarily holding securities pursuant to an offering of thosesecurities; or

####  

#### (iv)                              Acorporation owned, directly or indirectly, by the stockholders of the Companyin substantially the same proportions as their ownership of stock of theCompany.

####  

### qq.                               PotentialChange in Control.  A “PotentialChange in Control” means any period during which any of the followingcircumstances exist:

###  

#### (i)                                     TheCompany enters into an agreement, the consummation of which would result in theoccurrence of a Change in Control; provided that a Potential Change in Controlshall cease to exist upon the expiration or other termination of suchagreement; or

####  

#### (ii)                                  TheCompany or any Person publicly announces an intention to take or to considertaking actions which, if consummated, would constitute a Change in Control;provided that a Potential Change in Control shall cease to exist when theCompany or such Person publicly announces that it no longer has such anintention; or

####  

#### (iii)                               AnyPerson who is or becomes the beneficial owner (as defined in Rule 13d-3 underthe 1934 Act), directly or indirectly, of securities of the Companyrepresenting ten percent (10%) or more of the combined voting power of theCompany’s then outstanding securities, increases such Person’s beneficial ownershipof such securities by an amount equal to five percent (5%) or more of thecombined voting power of the Company’s then outstanding securities; or

####  

#### (iv)                              TheBoard of Directors adopts a resolution to the effect that, for purposes hereof,a Potential Change in Control has occurred.

 

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Notwithstanding anything herein to the contrary, aPotential Change in Control shall cease to exist not later than the date that(i) the Board of Directors determines that the Potential Change in Control nolonger exists, or (ii) a Change in Control occurs.

 

### rr.                                     PrimeRate.  “Prime Rate” means the primerate of interest promulgated by Citibank, N.A. and in effect as of the Date ofTermination.

###  

### ss.                                 QualifyingTermination.  “QualifyingTermination” means (i) the termination by Cinergy of the Executive’s employmentwith Cinergy during the Employment Period other than a termination for Cause or(ii) the termination by the Executive of the Executive’s employment withCinergy during the Employment Period for Good Reason.

###  

### tt.                                     RelocationProgram.  “Relocation Program” meansthe Cinergy Corp. Relocation Program, or any similar program or successor tothat program, as in effect on the date of the Executive’s termination ofemployment.

###  

### uu.                               SeveranceBenefits.  “Severance Benefits”means the payments and benefits payable to the Executive pursuant to Section 5.

###  

### vv.                               Shares.  “Shares” has the meaning set forth inSection 3g.

###  

### ww.                           Spouse.  “Spouse” means the Executive’s lawfullymarried spouse.  For this purpose,common law marriage or a similar arrangement will not be recognized unlessotherwise required by federal law.

###  

### xx.                                   StockRelated Documents.  “Stock RelatedDocuments” means the LTIP, the Cinergy Corp. Stock Option Plan, and the ValueCreation Plan and any applicable administrative guidelines and writtenagreements relating to those plans.

###  

### yy.                               TargetAnnual Bonus.  “Target Annual Bonus”has the meaning set forth in Section 3b.

###  

### zz.                                   TargetLTIP Bonus.  “Target LTIP Bonus” hasthe meaning set forth in Section 3b.

###  

### aaa.                           ValueCreation Plan.  “Value CreationPlan” means the Value Creation Plan or any similar plan, or successor plan ofthe LTIP.

###  

### bbb.                        Waiverand Release.  “Waiver and Release”means a waiver and release, in substantially the form attached to thisAgreement as Exhibit A.

###  

## **12.****                               Miscellaneous.**

##  

### a.                                       ThisAgreement will be governed by and construed in accordance with the laws of theState of Ohio, without reference to principles of conflict of laws.  The captions of this Agreement are not partof its provisions and will have no force or effect.

 

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### This Agreementmay not be amended, modified, repealed, waived, extended, or discharged exceptby an agreement in writing signed by the party against whom enforcement of theamendment, modification, repeal, waiver, extension, or discharge issought.  No person, other than pursuantto a resolution of the members of the Board of Directors (excluding theExecutive) or a committee of the Board of Directors (excluding the Executive),will have authority on behalf of Cinergy to agree to amend, modify, repeal,waive, extend, or discharge any provision of this Agreement.

###  

### b.                                      Allnotices and other communications under this Agreement will be in writing andwill be given by hand delivery to the other party or by Federal Express orother comparable national or international overnight delivery service,addressed in the name of such party at the following address, whichever isapplicable:

###  

If to the Executive:Cinergy Corp.221 East Fourth StreetCincinnati, Ohio 45201-0960

 

If to Cinergy:Cinergy Corp.221 East Fourth StreetCincinnati, Ohio 45201-0960Attn: Chief Legal Officer

 

or to such other address as either party has furnished to theother in writing in accordance with this Agreement.  All notices and communications will be effective when actuallyreceived by the addressee.

 

### c.                                       Theinvalidity or unenforceability of any provision of this Agreement will notaffect the validity or enforceability of any other provision of this Agreement.

###  

### d.                                      Cinergymay withhold from any amounts payable under this Agreement such federal, state,or local taxes as are required to be withheld pursuant to any applicable law orregulation.

###  

### e.                                       TheExecutive’s or Cinergy’s failure to insist upon strict compliance with anyprovision of this Agreement or the failure to assert any right the Executive orCinergy may have under this Agreement, including without limitation the rightof the Executive to terminate employment for Good Reason pursuant to Section 4dor the right of Cinergy to terminate the Executive’s employment for Causepursuant to Section 4b, will not be deemed to be a waiver of that provision orright or any other provision or right of this Agreement.

###  

### f.                                         Referencesin this Agreement to the masculine include the feminine unless the contextclearly indicates otherwise.

 

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### g.                                      Thisinstrument contains the entire agreement of the Executive and Cinergy withrespect to the subject matter of this Agreement; and subject to any agreementsevidencing stock option or restricted stock grants described in Section 3b andthe Stock Related Documents, all promises, representations, understandings,arrangements, and prior agreements are merged into this Agreement andaccordingly superseded.

###  

### h.                                      ThisAgreement may be executed in counterparts, each of which will be deemed to bean original but all of which together will constitute one and the sameinstrument.

###  

### i.                                          Cinergyand the Executive agree that Cinergy Services, Inc. will be authorized to actfor Cinergy with respect to all aspects pertaining to the administration andinterpretation of this Agreement.

 

 

IN WITNESSWHEREOF, the Executive and the Company have caused this Agreement to be executedas of the Effective Date.

 

 
|   |   | CINERGY SERVICES, INC.    |
|--------|--------|---------------------------|
|   |   |                      |   |
|   |   |                      |   |
|   |   | By:                       | /s/  Michael G. Browning |   |
|   |   |                      | Michael G.  Browning  Chairman, Compensation Committee of the Board of Directors |
|   |   |                      |   |
|   |   |                      |   |
|   |   | EXECUTIVE                 |
|   |   |                      |   |
|   |   | /s/  James E. Rogers |   |
|   |   | James E. Rogers           |   |
|        |        |                           |  |  |  |

 

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**EXHIBIT A**

 

*********

 

**WAIVER AND RELEASE AGREEMENT**

 

**THIS WAIVER AND RELEASE AGREEMENT**(this “Waiver and Release”) is entered into by and between James E. Rogers (the“Executive”) and Cinergy Corp.  (“Cinergy”)(collectively, the “Parties”).

 

**WHEREAS**, the Parties have enteredinto the Employment Agreement dated                                  (the “Employment Agreement”);

 

**WHEREAS**, the Executive’s employmenthas been terminated in accordance with the terms of the Employment Agreement;

 

**WHEREAS**, the Executive is requiredto sign this Waiver and Release in order to receive the payment of certaincompensation under the Employment Agreement following termination ofemployment; and

 

**WHEREAS**, Cinergy has agreed to signthis Waiver and Release.

 

**NOW, THEREFORE**, inconsideration of the promises and agreements contained herein and other goodand valuable consideration, the sufficiency and receipt of which are herebyacknowledged, and intending to be legally bound, the Parties agree as follows:

 

1.                                       This Waiver andRelease is effective on the date hereof and will continue in effect as providedherein.

 

2.                                       In considerationof the payments to be made and the benefits to be received by the Executivepursuant to Section 5 of the Employment Agreement (the “Severance Benefits”),which the Executive acknowledges are in addition to payment and benefits towhich the Executive would be entitled to but for the Employment Agreement, theExecutive, on behalf of himself, his heirs, representatives, agents and assignshereby COVENANTS NOT TO SUE OR OTHERWISE VOLUNTARILY PARTICIPATE IN ANY LAWSUITAGAINST, FULLY RELEASES, INDEMNIFIES, HOLDS HARMLESS, and OTHERWISE FOREVERDISCHARGES (i) Cinergy, (ii) its subsidiary or affiliated entities, (iii) allof their present or former directors, officers, employees, shareholders, andagents as well as (iv) all predecessors, successors and assigns thereof (thepersons listed in clauses (i) through (iv) hereof shall be referred tocollectively as the “Company”) from any and all actions, charges, claims,demands, damages or liabilities of any kind or character whatsoever, known orunknown, which Executive now has or may have had through the effective date ofthis Waiver and Release.  Executiveacknowledges and understands that he is not hereby prevented from filing acharge of discrimination with the Equal Employment Opportunity Commission orany state-equivalent agency or otherwise participate in any proceedings beforesuch

 

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Commissions.  Executive alsoacknowledges and understands that in the event he does file such a charge, heshall be entitled to no remuneration, damages, back pay, front pay, orcompensation whatsoever from the Company as a result of such charge.

 

3.                                       Without limitingthe generality of the foregoing release, it shall include:  (i) all claims or potential claims arisingunder any federal, state or local laws relating to the Parties’ employmentrelationship, including any claims Executive may have under the Civil RightsActs 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 Employment Act, asamended, 29 U.S.C. §§ 621 etseq.; the Americans withDisabilities Act of 1990, as amended, 42 U.S.C. §§ 12,101 etseq.;the Fair Labor Standards Act, 29 U.S.C. §§ 201 etseq.; theWorker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101, etseq.; the Ohio Civil Rights Act, Chapter 4112 etseq.; andany other federal, state or local law governing the Parties’ employmentrelationship; (ii) any claims on account of, arising out of or in any wayconnected with Executive’s employment with the Company or leaving of thatemployment; (iii) any claims alleged or which could have been alleged in anycharge or complaint against the Company; (iv) any claims relating to theconduct of any employee, officer, director, agent or other representative ofthe Company; (v) any claims of discrimination or harassment on any basis; (vi)any claims arising from any legal restrictions on an employer’s right toseparate its employees; (vii) any claims for personal injury, compensatory orpunitive damages or other forms of relief; and (viii) all other causes ofaction sounding in contract, tort or other common law basis, including: (a) thebreach of any alleged oral or written contract; (b) negligent or intentionalmisrepresentations; (c) wrongful discharge; (d) just cause dismissal; (e)defamation; (f) interference with contract or business relationship; or (g)negligent or intentional infliction of emotional distress.

 

4.                                       The Partiesacknowledge that it is their mutual and specific intent that the above waiverfully complies with the requirements of the Older Workers Benefit ProtectionAct (29 U.S.C. § 626) and any similar law governing release of claims.  Accordingly, Executive hereby acknowledgesthat:

 

(a)                                  He has carefully readand fully understands all of the provisions of this Waiver and Release and thathe has entered into this Waiver and Release knowingly and voluntarily afterextensive negotiations and having consulted with his counsel;

 

(b)                                 The Severance Benefitsoffered in exchange for Executive’s release of claims exceed in kind and scopethat to which he would have otherwise been legally entitled;

 

(c)                                  Prior to signing thisWaiver and Release, Executive had been advised in writing by this Waiver andRelease as well as other writings to seek counsel from, and has in fact had anopportunity to consult with, an attorney of his choice concerning its terms andconditions; and

 

(d)                                 He has been offered atleast twenty-one (21) days within which to review and consider this Waiver andRelease.

 

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5.                                       The Partiesagree that this Waiver and Release shall not become effective and enforceableuntil the date this Waiver and Release is signed by both Parties or seven (7)calendar days after its execution by Executive, whichever is later.  Executive may revoke this Waiver and Releasefor any reason by providing written notice of such intent to Cinergy withinseven (7) days after he has signed this Waiver and Release, thereby forfeitingExecutive’s right to receive any Severance Benefits provided hereunder andrendering this Waiver and Release null and void in its entirety.

 

6.                                       The Executivehereby affirms and acknowledges his continued obligations to comply with thepost-termination covenants contained in his Employment Agreement, including butnot limited to, the Confidential Information provisions of Section 9 of theEmployment Agreement.  Executiveacknowledges that the restrictions contained therein are valid and reasonablein every respect, are necessary to protect the Company’s legitimate businessinterests and hereby affirmatively waives any claim or defense to the contrary.

 

7.                                       Executivespecifically agrees and understands that the existence and terms of this Waiverand Release are strictly CONFIDENTIAL and that such confidentiality is amaterial term of this Waiver and Release. Accordingly, except as required by law or unless authorized to do so byCinergy in writing, Executive agrees that he shall not communicate, display orotherwise reveal any of the contents of this Waiver and Release to anyone otherthan his spouse, primary legal counsel, tax advisor and financial advisor, provided,however, that they are first advised of the confidential nature of thisWaiver and Release and Executive obtains their agreement to be bound by thesame.  Cinergy agrees that Executive mayrespond to legitimate inquiries regarding his employment with Cinergy bystating that he voluntarily resigned to pursue other opportunities, that theParties terminated their relationship on an amicable basis and that the Partieshave entered into a confidential Waiver and Release that prohibits him fromfurther discussing the specifics of his separation.  Nothing contained herein shall be construed to prevent Executivefrom discussing or otherwise advising subsequent employers of the existence ofany obligations as set forth in his Employment Agreement.  Further, nothing contained herein shall beconstrued to limit or otherwise restrict the Company’s ability to disclose theterms and conditions of this Waiver and Release as may be required by businessnecessity.

 

8.                                       In the eventthat Executive breaches or threatens to breach any provision of this Waiver andRelease, he agrees that Cinergy shall be entitled to seek any and all equitableand legal relief provided by law, specifically including immediate andpermanent injunctive relief.  Executivehereby waives any claim that Cinergy has an adequate remedy at law.  In addition, and to the extent notprohibited by law, Executive agrees that Cinergy shall be entitled to an awardof all reasonable costs and attorneys’ fees incurred by Cinergy in anysuccessful effort to enforce the terms of this Waiver and Release.  Executive agrees that the foregoing reliefshall not be construed to limit or otherwise restrict Cinergy’s ability topursue any other remedy provided by law, including the recovery of any actual,compensatory or punitive damages. Moreover, if Executive pursues any claims against the Company subject tothe foregoing Waiver and Release, Executive agrees to

 

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immediately reimburse the Company for the value of all benefitsreceived under this Waiver and Release to the fullest extent permitted by law.

 

9.                                       Cinergy herebyreleases the Executive, his heirs, representatives, agents and assigns from anyand all known claims, causes of action, grievances, damages and demands of anykind or nature based on acts or omissions committed by the Executive during andin the course of his employment with Cinergy provided such act or omission wascommitted in good faith and occurred within the scope of his normal duties andresponsibilities.

 

10.                                 The Partiesacknowledge that this Waiver and Release is entered into solely for the purposeof ending their employment relationship on an amicable basis and shall not beconstrued as an admission of liability or wrongdoing by either Party and thatboth Cinergy and Executive have expressly denied any such liability orwrongdoing.

 

11.                                 Each of the promisesand obligations shall be binding upon and shall inure to the benefit of theheirs, executors, administrators, assigns and successors in interest of each ofthe Parties.

 

12.                                 The Parties agree thateach and every paragraph, sentence, clause, term and provision of this Waiverand Release is severable and that, if any portion of this Waiver and Releaseshould be deemed not enforceable for any reason, such portion shall be strickenand the remaining portion or portions thereof should continue to be enforced tothe fullest extent permitted by applicable law.

 

13.                                 This Waiver andRelease shall be governed by and interpreted in accordance with the laws of theState of Ohio without regard to any applicable state’s choice of lawprovisions.

 

14.                                 Executive representsand acknowledges that in signing this Waiver and Release he does not rely, andhas not relied, upon any representation or statement made by Cinergy or by anyof Cinergy’s employees, officers, agents, stockholders, directors or attorneyswith regard to the subject matter, basis or effect of this Waiver and Releaseother than those specifically contained herein.

 

15.                                 This Waiver andRelease represents the entire agreement between the Parties concerning thesubject matter hereof, shall supercede any and all prior agreements which mayotherwise exist between them concerning the subject matter hereof (specificallyexcluding, however, the post-termination obligations contained in any existingEmployment Agreement or other legally-binding document), and shall not bealtered, amended, modified or otherwise changed except by a writing executed byboth Parties.

 

16.                                 Cinergy Corp. and theExecutive agree that Cinergy Services, Inc. will be authorized to act forCinergy Corp. with respect to all aspects pertaining to the administration andinterpretation of this Waiver and Release.

 

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**PLEASE READ CAREFULLY.  WITHRESPECT TO THE EXECUTIVE, THIS**

 

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

 

**AND UNKNOWN CLAIMS.**

 

IN WITNESSWHEREOF, the Parties have themselves signed, or caused a duly authorized agentthereof to sign, this Waiver and Release on their behalf and therebyacknowledge their intent to be bound by its terms and conditions.

 
| EXECUTIVE | CINERGY SERVICES, INC. |
|-----------|------------------------|
|      |                   |
|      |                   |
| Signed:   |                   |   | By: |   |   |
|      |                   |
| Printed:  |                   |   | Title: |   |   |
|      |                   |
| Dated:    |                   |   | Dated: |   |   |
|           |                        |  |  |  |  |  |  |  |  |

 

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