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                                                                   Exhibit 10.10

                            DQE ENERGY SERVICES, INC.
                            EQUITY PARTICIPATION PLAN

                                    Article I

                           Purpose and Effective Date
                           --------------------------

          The purpose of this Plan is to promote the short-term and long-term
growth and profitability of DQE Energy Services, Inc. by providing Participants
with a financial interest in such growth and profitability and a financial
incentive to achieve pre-established minimum individual and company performance
goals. This Plan is effective as of January 1, 1999. Attached to this Plan as
Appendix A is a hypothetical example showing how certain features of the Plan
are intended to operate. This example is for illustration purposes only and
shall not be construed as predicting or assuring any particular financial result
or Plan benefit.

                                   Article II

                                   Definitions
                                   -----------

          Section 2.1 Allocation Percentage shall mean, with respect to any
                      ---------------------
Participant, the percentage of the Annual Company Value Increase allocated to
such Participant under Section 5.2 (a), as recommended by the President and
approved by the Committee. The Allocation Percentages of all Participants and
the Allocation Percentage, if any, reserved by the Committee pursuant to Section
5.4, may total 10% or less.

          Section 2.2 Annual Company Value Change for a Fiscal Year shall mean
                      ---------------------------
the dollar value increase or decrease of the Company Value, determined by
comparing the Company Value as of the last day of such Fiscal Year with (i) for
the initial Fiscal Year of a Participant's participation in the Plan: (which
shall be Fiscal Year 1999 for the initial Participants), the Base Company Value,
and (ii) for subsequent Fiscal Years, the Company Value as of the last day of
the immediately preceding Fiscal Year, and then subtracting from such increase
or decrease the
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cost attributable to the Capital Deposits for such Fiscal Year as determined by
the Board of Directors in its sole discretion. Appendix B sets forth the cost of
capital that will be used for this purpose. Appendix B may be amended from time
to time by the Board of Directors in its sole and absolute discretion.

          Section 2.3 Annual Incentive Allocation shall mean, with respect to a
                      ---------------------------
Participant for a Fiscal Year, the amount determined by multiplying such
Participant's Allocation Percentage by the dollar value of the Annual Company
Value Change for such Fiscal Year.

          Section 2.4 Annual Payment Amount shall be the amount, if any, of a
                      ---------------------
Participant's Capital Account that is payable to the Participant for a
particular Fiscal Year, as determined in accordance with Section 5.3.

          Section 2.5 Base Company Value shall mean (i) with respect to all
                      ------------------
Participants who are first eligible for the plan for Fiscal Year 1999, the
Capital Deposits at December 31,1998, and (ii) with respect to all other
Participants, the Company Value as of the last day of the Fiscal Year
immediately preceding the Fiscal Year for which participation of such
Participant begins.

          Section 2.6 Board of Directors shall mean the Board of Directors of
                      ------------------
the Company.

          Section 2.7 Capital Account shall mean a bookkeeping account
                      ---------------
established by the Company on behalf of a Participant to record the aggregate
amount of such Participant's Annual Incentive Allocations pursuant to Sections
5.2(c). The amount credited to a Participant's Capital Account shall be reduced
by the amount of all distributions and payments made to the Participant pursuant
to Section 5.3 and Article VI.

          Section 2.8 Capital Deposits shall mean the total book value of the
                      ----------------
capital provided to the Company by DQE and its other affiliates or otherwise
raised by the Company, including without limitation, equity investments, loans,
working capital and capital expenditures.

                                       2
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The Capital Deposits with respect to any particular Fiscal Year shall be the
average of the Capital Deposits as of the last day of each month within such
Fiscal Year.

          Section 2.9 Cause shall mean any of the following that is demonstrably
                      -----
and materially injurious to the interest, property, operations, business or
reputation of the Company or any of its affiliates:

          (a) the Participant's breach of the Guidelines for Ethical Conduct of
     DQE and its Family of Companies, as in effect from time to time;

          (b) the Participant's theft or embezzlement, or attempted theft or
     embezzlement, of money or property of the Company or its affiliates; the
     Participant's perpetration or attempted perpetration of fraud, or his
     participation in a fraud or attempted fraud, on the Company or its
     affiliates; or the Participant's unauthorized appropriation of, or his
     intentional attempt to misappropriate, any tangible or intangible assets or
     property of the Company or its affiliates; or

          (c) any act or acts of disloyalty, misconduct, or moral turpitude by
     the Participant or the Participant's conviction of a crime.

          Section 2.10 Change in Control shall mean the occurrence of any of the
                       -----------------
following:

          (a) any transaction that results in DQE and its subsidiaries (which
     shall include any corporation in an unbroken chain of corporations
     beginning with DQE if each of the corporations other than the last
     corporation in the unbroken chain owns stock possessing at least fifty
     percent (50%) of the total combined voting power of all classes of stock in
     one of the other corporations in the chain) (collectively, the "DQE Group")
     no longer being the beneficial owner (as defined in Rules 13d-3 and 13d-5
     under the Securities Exchange Act of 1934, as amended, which shall in any
     event include having the power to vote (or cause to be voted at the
     direction of any member of the DQE

                                       3
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     Group) pursuant to contract, irrevocable proxy or otherwise) of stock
     possessing more than fifty percent (50%) of the combined voting power of
     the issued and outstanding shares of all classes of the Company's stock
     entitled to vote generally in the election of directors, whether as a
     result of the issuance of securities of the Company, any direct or indirect
     transfer of securities of the Company, or otherwise, provided, however,
     that a Change in Control shall not be deemed to have occurred solely as a
     result of a public offering of securities by the Company, regardless of the
     level of the DQE Group's ownership of the Company's stock following such
     offering; or

          (b) consummation of a reorganization, merger or consolidation
involving the Company, unless, following such reorganization, merger or
consolidation involving the Company, the DQE Group beneficially owns, directly
or indirectly, stock possessing more than fifty percent (50%) of the total
combined voting power of the issued and outstanding shares of all classes or
voting stock of the corporation resulting from such reorganization, merger or
consolidation; or

          (c) a complete liquidation or dissolution of the Company; or

          (d) the sale or other disposition of all or substantially all of the
assets of the Company other than to a corporation with respect to which,
following such sale or disposition, the DQE Group beneficially owns, directly or
indirectly, stock possessing at least fifty percent (50%) of the total combined
voting power of the issued and outstanding shares of all classes of voting
stock; or

          (e) As a result of a business transaction (i) individuals who were
members of the Board of Directors of DQE immediately prior to the transaction
cease for any reason to constitute at least 50% of the Board of Directors of the
surviving entity or (ii) the shares of DQE Common Stock cease to be publicly
traded.

          Section 2.11 Committee shall mean the Compensation Committee of the
                       ---------
Board of Directors.

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          Section 2.12 Company shall mean DQE Energy Services, Inc., a
                       -------
Pennsylvania corporation, and its successors.

          Section 2.13 Company Value shall mean the total value of the Company
                       -------------
as determined in accordance with Section 5.1.

          Section 2.14 Determination Date shall mean December 31, 2003 for the
                       ------------------
President and December 31, 2004 for all other Participants; provided, however,
that the President may, by written notice given to the Committee prior to
December 31, 2003, elect to extend the Determination Date for the President
unti1 December 31, 2004 in which event the Determination Date for all other
Participants shall be extended until December 31, 2005; provided further,
however, that the occurrence of the Determination Date may be accelerated upon a
termination or curtailment of the Plan, as set forth in Article VII.

          Section 2.15 DQE shall mean DQE, Inc., a Pennsylvania corporation, and
                       ---
its successors.

          Section 2.16 Disability shall mean a Total and Permanent Disability,
                       ----------
as such term is defined in the Retirement Plan for Employees of Duquesne Light
Company and the Supplemental Retirement Plan for Non-Represented Employees of
Duquesne Light Company.

          Section 2.17 Effective Date shall mean January 1, 1999.
                       --------------

          Section 2.18 Fiscal Year shall mean a fiscal year of the Company that
                       -----------
ends after January 1, 1999 and on or before the Determination Date.

          Section 2.19 Final Award shall mean the amount payable to a
                       -----------
Participant in accordance with Section 6.1.

                                       5
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          Section 2.20 Participant shall mean the President and any other
                       -----------
employee of the Company who is designated as eligible to participate in the Plan
pursuant to Article IV hereof.

          Section 2.21 Participation Notice shall mean a written notice from the
                       --------------------
Company to a Participant which shall set forth the Participant's Allocation
Percentage, provisions with regard to distributions, an other terms and
conditions and supplemental provisions as shall be applicable to the
Participant. The terms and conditions set forth in a Participation Notice shall
be incorporated by reference into, and shall become a part of, this Plan as it
applies to such Participant.

          Section 2.22 Performance Goals shall mean, with respect to a
                       -----------------
Participant for a Fiscal Year, the individual and/or corporate performance goals
established for such Participant for such Fiscal Year by the Committee. The
President shall, prior to or as soon as practicable after the beginning of a
Fiscal Year, notify each Participant in writing of the Performance Goals
established for such Participant for such Fiscal Year. Notwithstanding the
foregoing, the President shall notify each Participant of the Performance Goals
established for the Fiscal Year beginning January 1, 1999 as soon as practicable
after this Plan is adopted. The Committee shall have the sole discretion to
determine the extent to which a Participant's Performance Goals have been
achieved (i.e. the Participant's Performance Percentage).

          Section 2.23 Performance Percentage shall mean, for each Fiscal Year,
                       ----------------------
the percentage of a Participant's Performance Goals that is determined by the
Committee to have been achieved.

          Section 2.24 Plan shall mean this DQE Energy Services, Inc. Equity
                       ----
Participation Plan, as the same may be amended from time to time.

          Section 2.25 President shall mean, as of any particular date, the
                       ---------
person serving as the President of the Company on such date.

                                       6
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          Section 2.26 Resignation for Good Reason shall mean the resignation
                       ---------------------------
from employment by a Participant following a Change in Control if such
resignation occurs within thirty (30) days after anyone of the following events:

          (a)  a reduction of such Participant's Allocation Percentage; or

          (b)  a reduction of such Participant's base salary .

                                   Article III

                                 Administration
                                 ---------------

          Except as otherwise expressly provided herein, this Plan shall be
administered by the Committee, which shall have the full power, authority and
discretion to construe and interpret the Plan (including, without limitation,
Plan provisions relating to the eligibility of individual employees of the
Company to participate in or receive benefits under the Plan), to make all
financial and other determinations required under the Plan (except for the
determination of Company Value pursuant to Section 5.1, which shall be made by
the Board of Directors), to establish and amend administrative regulations
hereunder, to recommend to the Board of Directors substantive modifications to
the Plan and to take such other actions as it may deem necessary or appropriate
to further the purposes of the Plan. In carrying out its functions under the
Plan, the Committee shall be under no obligation to treat Participants
uniformly, and may treat any Participant or group of Participants differently
from any other Participant or group of Participants. The Committee may delegate
all or any portion of its administrative responsibilities under the Plan to one
or more other employees of the Company or of DQE or its affiliates. All
decisions, actions or interpretations of the Committee and its designees shall
be final, binding and conclusive upon all persons. No person shall be liable for
any action taken or determination made in good faith in the administration of
this Plan. All persons acting in good faith to administer the Plan shall be
fully indemnified for, and held harmless against, any liability arising out of
the administration of the Plan.

                                   Article IV

                                  Participation
                                  -------------

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          The Participants shall be the President and each other key employee of
the Company who is recommended for participation by the President and approved
by the Committee. The President shall also recommend, subject to Committee
approval, the Allocation Percentages of the Participants other than the
President. Each Participant shall be given a timely Participation Notice for
each Fiscal Year. Once an employee is designated as a Participant, he or she
shall continue as such for each succeeding Fiscal Year during the term of this
Plan; provided, however, that no employee shall be eligible to participate in
the Plan for any Fiscal Year beginning after the date of such employee's
termination of employment with the Company; and provided further, however, that
the Committee may adjust or reduce to zero the Allocation Percentages of one or
more Participants for future Fiscal Years upon written notice to the
Participant(s) prior to or as soon as practicable after the beginning of the
first Fiscal Year to which such change is to apply. As a condition to his or her
participation under this Plan, each Participant shall be required to enter into
a Non-Compete and Confidentiality Agreement with the Company, which Agreement
shall be in form and substance satisfactory to the Committee, and execute such
other documents and agreements as the Committee may request from time to time.

                                    Article V

          Determination and Disposition of Annual Incentive Allocations
          --------------------------------------------------------------

          Section 5.1 Determination of Company Value. Except as otherwise
                      ------------------------------
provided in Section 6.1(c), Company Value shall be determined in accordance with
this Section 5.1. As soon as administratively practicable after the end of each
Fiscal Year, the Board of Directors of the Company shall determine, in its sole
and absolute discretion, the Company Value as of the last day of such Fiscal
Year. Such Company Value shall equal the sum of (a) the fair market value of the
Company as of such date, and (b) the cumulative dollar value of any dividends or
other distributions paid by the Company to its shareholder(s) after the
Effective Date and on or before the applicable valuation date, less the Capital
Deposits as of the applicable valuation date. The Company Value shall be based
on a valuation, paid for by the Company, by an appraisal firm selected by the
Committee, using such assumptions and methodologies as the Committee shall
approve from time to time in good faith; provided, however, that if the

                                       8
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Common Stock of the Company is actively traded on an established securities
market, the public trading price of such Common Stock will be used to establish
the Company Value. Such determination of Company Value shall take into account
and fully reflect the cost to the Company of administering and providing the
benefits contemplated by this Plan. Notwithstanding the foregoing, in the event
there is a contemporaneous sale of all of a portion of the Company or its assets
that the Board of Directors believes, in its sole discretion, establishes an
appropriate standard for Company Value, then that transaction price shall be
used in determining Company Value. It is understood that by giving notice to the
President within a reasonable period of time prior to the Determination Date,
the Board of Directors may direct the Company to sell certain of its assets
prior to the Determination Date if the Board deems such sale(s) to be necessary
or appropriate to establish the Company Value. It is further understood that the
Board of Directors in its sole discretion, acting in good faith, shall make such
adjustments as it determines to be appropriate to reflect the effect on Company
Value of any restructuring within DQE's affiliated group which involves the
Company or any of its assets.

          Section 5.2 Annual Incentive Allocations.
                      -----------------------------

          (a) Determination of Amounts. After determining the Company Value for
              ------------------------
     a Fiscal Year in accordance with Section 5.1, but subject to the employment
     requirement set forth in Section 5.2(b), the Committee shall determine the
     Annual Incentive Allocation of each Participant by multiplying the
     aggregate Annual Company Value Change by such Participant's Allocation
     Percentage.

          (b) Employment Requirement. A Participant generally must be employed
              ----------------------
     by the Company on the last day of a Fiscal Year in order to receive an
     Annual Incentive Allocation for such Fiscal Year; provided, however, that
     (i) in the event of a Participant's death or Disability during a Fiscal
     Year, such Participant shall be entitled to an Annual Incentive Allocation
     for such Fiscal Year equal to the Annual Incentive Allocation determined
     pursuant to Section 5.2(a) above multiplied by a fraction, the numerator of
     which is the number of days in such Fiscal Year preceding such
     Participant's death or Disability and the denominator of which is the total
     number of days in such Fiscal Year

                                       9
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     and (ii) in the event of the termination of the Participant's employment by
     the Company without Cause (A) during a Fiscal Year with respect to which
     the Annual Company Value Change is a negative amount, such Participant
     shall receive a full Annual Incentive Allocation for such Fiscal Year, and
     (B) during a Fiscal Year with respect to which the Annual Company Value
     Change is a positive amount, such Participant shall be entitled to an
     Annual Incentive Allocation for such Fiscal Year equal to the Annual
     Incentive Allocation determined pursuant to Section 5.2(a) above multiplied
     by a fraction, the numerator of which is the number of days in such Fiscal
     Year preceding such Participant's date of termination and the denominator
     of which is the total number of days in such Fiscal Year. In addition, the
     Committee may, but shall not be required to, make an exception to the
     requirement of employment on the last day of a Fiscal Year in the event of
     a Participant's termination of employment with the Company for any other
     reason. Any Annual Incentive Allocation credited to a Participant pursuant
     to this Section 5.2(b) shall be the final Annual Incentive Allocation for
     which such Participant shall be eligible.

          (c) Adjustment of Capital Account. Each Participant's Annual Incentive
              -----------------------------
     Allocation for a Fiscal Year shall be credited (or debited) to the
     Participant's Capital Account. If the Annual Incentive Allocation is a
     positive amount for such Fiscal Year, the Capital Account of the
     Participant shall be increased by his or her Annual Incentive Allocation
     for such Fiscal Year. If the Annual Incentive Allocation is a negative
     amount for such Fiscal Year, the Capital Account of the Participant shall
     be decreased by his or her Annual Incentive Allocation for such Fiscal
     Year.

          Section 5.3 Annual Payment. If a Participant's Capital Account is a
                      --------------
positive number, and if the Participant attained all or a portion of his or her
Performance Goals for the Fiscal Year, then as soon as administratively
practicable after the determination of each Participant's Annual Incentive
Allocation for a Fiscal Year and the corresponding adjustment of Capital
Accounts pursuant to Section 5.2(c), the Company shall distribute to each
eligible Participant his or her Annual Payment Amount, which shall be equal to
the excess of (a) the net cumulative amount of the Annual Incentive Allocations
credited or debited to the Participant's

                                       10
<PAGE>

Capital Account for all Fiscal Years to and including the most recently
completed Fiscal Year times one-third (1/3) times the Participant's Performance
Percentage for the Fiscal Year over (b) the total Annual Payment Amounts
previously paid to the Participant under this Section 5.3. provided, however,
that each Participant's Annual Payment Amount shall be proportionately reduced
(but not below zero) to the extent that for any Fiscal Year for which the
Company's after-tax return on average capital employed, as determined by the
Committee in its sole discretion, is less than 8%. A Participant's Annual
Payment Amount shall be paid in cash or in such other form as the Committee
shall determine.

          Section 5.4 Reserve Allocations. Notwithstanding any other provision
                      -------------------
of this Plan to the contrary, the Committee may for any Fiscal Year hold an
Allocation Percentage in reserve, and the value associated with such reserved
Allocation Percentage shall not be allocated to any Participant unless the
Committee determines otherwise.

                                   Article VI

                               Final Distributions
                               --------------------

          Section 6.1 Determination and Distributions of Final Awards.
                      -----------------------------------------------

          (a) Distribution Following Determination Date. Subject to Section
              -----------------------------------------
     6.1(c), after the Determination Date, the Committee shall determine the
     Final Award of each Participant who is then an employee of the Company,
     which shall be the aggregate amount credited to each Participant's Capital
     Account as of the Determination Date. Such Final Awards shall be paid to
     the Participants in cash, marketable securities or such other form as may
     be set forth in such Participant's Participation Notice. If all or
     substantially all of the Company or its assets is sold within six months
     after the date the amount of the Final Awards is determined and the value
     received results in a higher valuation determination for the Company than
     the final Company Value used in calculating such Final Awards, then the
     amount of the Final Awards shall be increased to reflect such higher
     valuation. Except as otherwise provided in Section 6.1(c), any

                                       11
<PAGE>

     transactions occurring after the close of such six-month period shall have
     no effect on the Final Awards hereunder.

          (b)  Effect of Certain Events Before Determination Date.
               ---------------------------------------------------

               (i) Death, Disability or Certain Terminations Following a Change
                   -------------------------------------------------------------
          in Control. Subject to Section 6.1(c), if a Participant's termination
          ----------
          of employment with the Company occurs prior to the Determination Date
          by reason of the Participant's death or Disability, or under the
          circumstances described in Section 6.2(a), and if upon such
          termination, the Participant's Capital Account has a positive balance,
          such Participant, or his or her heirs or estate, shall receive a
          distribution of a Final Award consisting of such Capital Account
          balance as soon as administratively practicable following the
          determination of the final Annual Incentive Allocation of the
          Participant pursuant to Section 5.2(b) for the Fiscal Year in which
          such event occurs. Such Final Award shall be paid to the Participant
          in cash or in such other form as the Committee shall determine. If, at
          such time, the Participant's Capital Account balance is negative, all
          rights of the Participant, and/or his or her heirs or estate, in the
          Participant's Capital Account shall be forfeited immediately.

               (ii) Retirement, Resignation, Termination by Company for Cause or
                    ------------------------------------------------------------
          Breach of Obligations. If a Participant's termination of employment
          ---------------------
          with the Company occurs prior to the Determination Date by reason of
          the Participant's retirement or resignation from employment (other
          than a resignation described in Section 6.2(a)) or the discharge of
          the Participant from employment by the Company for Cause, or if a
          Participant breaches the Non-Compete and Confidentiality Agreement
          referred to in Article IV, all rights of the Participant, and/or his
          or her heirs or estate, in the Participant's Capital Account shall be
          forfeited immediately.

                                       12
<PAGE>

               (iii) Termination by Company Without Cause or Other Termination
                     ---------------------------------------------------------
          of Employment Subject to Section 6.1(c), if a Participant's employment
          -------------
          terminates prior to the Determination Date by reason of discharge from
          employment by the Company without Cause (other than a discharge
          described in Section 6.2(a)) or for any other reason except those
          described in Section 6.1(b)(i) or (ii), and if upon such termination,
          the Participant's Capital Account has a positive balance, such
          Participant, or his or her heirs or estate, shall receive after the
          Determination Date a distribution of a Final Award, consisting of the
          Participant's Capital Account balance on the last day of the Fiscal
          Year in which such event occurs (reflecting any final allocation to
          which the Participant may be entitled under Section 5.2(b)). Such
          Final Award shall be paid at the same time as Final Awards are payable
          pursuant to Section 6.1(a), in cash or in such other form as the
          Committee shall determine.

          (c) Delay Pending Company Sale. Notwithstanding the provisions of
              --------------------------
     Section 6.1(a) and (b), the Board of Directors may notify the President in
     writing at least 90 days before the Determination Date of its election to
     have the final Company Value determined by a sale to a third party or an
     initial public offering by a good faith notice of such intent including a
     reasonable estimate of the timing of such event. In the event that a
     binding commitment with respect to such a third party sale is not obtained,
     or such a public offering is not consummated, within the period of time
     estimated in such written notice, the amount of such Final Awards shall be
     determined retroactively as of the Determination Date under subsections (a)
     and (b) of this Section 6.1, as appropriate, and without regard to the
     foregoing provisions of this subsection (c).

          Section 6.2 Change in Control. This Section 6.2 shall have no force or
                      -----------------
effect prior to the occurrence of a Change in Control and only be applicable if
a Change in Control shall occur prior to the payment of all amounts due to all
Participants under the Plan.

          (a) If a Change in Control occurs before the Determination Date, and
     if after such Change in Control and before the Determination Date has
     otherwise occurred such

                                       13
<PAGE>

     Participant's employment with the Company terminates by reason of a
     discharge by the Company without Cause or Resignation for Good Reason, then
     the Participant shall be entitled to a distribution pursuant to Section
     6.1(b)(i).

          (b) Following a Change in Control, the Company shall pay, upon written
     demand therefor by a Participant, all legal fees and expenses the
     Participant reasonably incurs as a result of any dispute or contest
     (regardless of the outcome thereof) by or with the Company or others
     regarding the validity or enforceability of, or liability under, any
     provision of this Plan, plus in each case, interest at the applicable
     Federal rate provided for in Section 7872(f)(2) of the Internal Revenue
     Code. The Participant agrees to repay to the Company any such fees and
     expenses paid or advanced by the Company if and to the extent that the
     Company or such others obtains a judgment or determination that the
     Participant's claim was frivolous or was without merit from the arbitrator
     or a court of competent jurisdiction from which no appeal may be taken,
     whether because the time to do so has expired or otherwise. Notwithstanding
     any provision hereof or any other agreement, the Company may offset any
     other obligation it has to the Participant by the amount of such repayment.
     The obligation of the Company and a Participant under this Section 6.3(b)
     shall survive the termination for any reason of this Plan.

          (c) In the event that following a Change in Control any dispute or
     difference arises between the Company and a Participant with respect to the
     subject matter of this Plan and the enforcement of rights hereunder, either
     the Participant or the Company may, by written notice to the other, require
     such dispute or difference to be submitted to arbitration. The arbitrator
     or arbitrators shall be selected by agreement of the parties or, if they
     cannot agree on an arbitrator or arbitrators within 30 days after one party
     has notified the other of his, her or its desire to have the question
     settled by arbitration, then the arbitrator or arbitrators shall be
     selected by the American Arbitration Association (the "AAA") in Pittsburgh,
     Pennsylvania, upon the application of the Participant. The determination
     reached in such arbitration shall be final and binding on all parties
     without any right of appeal or further dispute. Execution of the
     determination by such arbitrator may be sought in any court of competent
     jurisdiction. The arbitrators shall not be bound

                                       14
<PAGE>

     by judicial formalities and may abstain from following the strict rules of
     evidence and shall interpret this Plan as an honorable engagement and not
     merely as a legal obligation. Unless otherwise agreed by the parties, any
     such arbitration shall take place in Pittsburgh, Pennsylvania, and shall be
     conducted in accordance with the Rules of the AAA. The Participant's
     expenses for such proceeding shall be paid, or repaid to the Company, as
     the case may be, as provided in subsection (b) above.

          Section 6.3 Repayment of Benefits in Certain Circumstances. If a
                      ----------------------------------------------
Participant breaches the Non-Compete and Confidentiality Agreement referred to
in Article IV at any time following the receipt of any payment or distribution
under this Plan, other than a payment received more than two years after the
termination of the Participant's employment with the Company, such payment or
distribution may be rescinded by the Company by notice given to the Participant
within two years after the date the payment is made. In the event of any such
rescission, the Participant shall pay to the Company the amount of any payment
or distribution received in such manner and on such terms and conditions as may
be required, and the Company shall be entitled to set-off against the amount of
any such payment or distribution any amount owed to the Participant by the
Company.

                                   Article VII

                            Amendment and Termination
                            -------------------------

          The Committee shall have the power and authority to amend or terminate
this Plan at any time and for any reason as it deems necessary or appropriate;
provided, however, that no such amendment or termination shall, without the
Participant's consent, adversely affect any benefit after the date it is earned
in accordance with the terms of this Plan. If the Plan is terminated or
substantially curtailed, the Company shall pay to all Participants a Final Award
determined in accordance with Section 6.1, using as the Determination Date the
effective date of such termination or curtailment. For purposes of the
foregoing, a termination or substantial curtailment shall not be deemed to have
occurred solely because of a reduction or elimination of a Participant's
Allocation Percentage.

                                       15
<PAGE>

                                  Article VIII

                                  Miscellaneous
                                  -------------

          Section 8.1 Limitations on Transfer. Except as the Committee may
                      -----------------------
otherwise determine, the rights and interest of a Participant under this Plan
may not be assigned or transferred other than by will or the laws of descent and
distribution, during the lifetime of a Participant, only the Participant
personally may exercise rights under this Plan.

          Section 8.2 Taxes. The Company shall be entitled to withhold (or
                      -----
secure payment from the Participant in lieu of withholding) the amount of any
withholding or other tax required by law to be withheld or paid by the Company
with respect to any cash payment under this Plan, and the Company may defer the
payment of cash hereunder unless and until indemnified to its satisfaction
against any liability for such tax. The amount of such withholding or tax
payment shall be determined by the Company.

          Section 8.3 No Right to Award; No Right to Employment. No employee or
                      -----------------------------------------
other person shall have any claim of right to be permitted to participate in or
be granted an award under this Plan. Neither the Plan nor any action taken
hereunder shall be construed as giving any employee any right to be retained in
the employ of the Company or any affiliate thereof.

          Section 8.4 Governing Law. The Plan and all determinations made and
                      -------------
actions taken pursuant to the Plan shall be governed by the laws of the
Commonwealth of Pennsylvania other than the conflict of laws provisions of such
laws, and shall be construed in accordance therewith.

          Section 8.5 Consent to Jurisdiction and Service of Process. The
                      ----------------------------------------------
Company and, as a condition to his or her participation under this Plan, each of
the Participants shall be deemed to have expressly agreed and consented to the
personal jurisdiction of the Court of Common Pleas for Allegheny County,
Pennsylvania and/or the United States District Court for the Western District of
Pennsylvania with respect to any dispute or controversy related to, arising
under or in connection with this Plan, and that such courts, and only such
courts, shall have

                                       16
<PAGE>

exclusive jurisdiction to determine any controversy or dispute related to,
arising under or in connection with this Plan. The Company and each of the
Participants shall also be deemed to have expressly agreed that such courts are
convenient forums for the parties to any such controversy or dispute and for any
potential witnesses and that process issued out of any such court or in
accordance with the rules of practice of such court may be served by mail or
other forms of substituted service to the Company at the address of its
principal executive office and to a Participant at his or her last known address
as reflected in the Company's records.

          Section 8.6 No Strict Construction. No rule of strict construction
                      ----------------------
shall be implied against the Company, the Committee or any other person in the
interpretation of any of the terms of the Plan, any award granted under the Plan
or any rule or procedure established by the Committee.

          Section 8.7 Captions. The captions (i.e., all Article, Section and
                      --------
subsection headings) used in the Plan are for convenience only, do not
constitute a part of the Plan, and shall not be deemed to limit, characterize,
or affect in any way the provisions of the Plan, and all provisions of the Plan
shall be construed as if no captions had been used in the Plan.

          Section 8.8 Severability. Whenever possible, each provision in the
                      ------------
Plan shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of the Plan shall be held to be prohibited
by or invalid under applicable law, then (i) such provision shall be deemed
amended to accomplish the objectives of the provision as originally written to
the fullest extent permitted by law and (ii) all other provisions of the Plan
shall remain in full force and effect.

          Section 8.9 Company Liability; Unfunded Plan. This Plan is a
                      --------------------------------
contractual obligation solely of the Company, and neither DQE nor any of its
affiliates other than the Company shall have any direct or indirect liability or
obligation to pay any amount due under this Plan to a Participant or any other
person. The Plan shall at all times be an unfunded obligation of the Company
payable from its general assets and no provision shall be at any time be made to
segregate assets of the Company for payment of any amount under this Plan. No
Plan

                                       17
<PAGE>

or other person shall have any interest in any particular assets of the Company
by reason of the amounts payable under this Plan and all Participants and other
persons shall have only the rights of a general unsecured creditor of the
Company with respect to any amounts payable under the Plan.

          Section 8.10 No Guarantees; No Limitation on Transactions. The Company
                       --------------------------------------------
has made no guarantees, representations, warranties or covenants to any
Participant or any other person with respect to the Company's future business
operations, the amount, nature or timing of future capital contributions to the
Company or the value of future benefits under this Plan. Nothing in this Plan
shall be construed as limiting the right or ability of DQE and its affiliates to
engage in any Change in Control transaction or any other transaction affecting
their respective interests or investments in the Company.

          Section 8.11 No Effect on Benefit Plans. Amounts paid to Participants
                       --------------------------
under this Plan shall not be taken into account for purposes of determining
benefits under any other employee benefit plan, program or policy of the Company
or any of its affiliates unless such plan, program or policy provides otherwise.

                                   Article IX

                                    Execution
                                    ---------

          WITNESS the due execution hereof this 27th day of May, 1999.

                                           DQE ENERGY SERVICES, INC.


                                           By:  /s/ David D. Marshall
                                                --------------------------------
                                                    David D. Marshall
                                                    Chairman of the Board

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