Exhibit 10-dddd


 


EMPLOYMENT AGREEMENT


 


 


                This EMPLOYMENT AGREEMENT is made and entered into as
of the 1st day of May, 2003 (the “Effective Date”), by and between
Cinergy and Lynn J. Good (the “Executive”). 
This Agreement replaces and supersedes any and all prior employment
agreements between Cinergy and the Executive. 
The capitalized words and terms used throughout this Agreement are
defined in Section 11.


 


 


Recitals


 


A.            The Executive is currently serving as Vice President,
Financial Project Strategy & Oversight. 
Cinergy desires to secure the continued employment of the Executive in
accordance with this Agreement.


 


B.            The Executive is willing to continue to remain in the
employ of Cinergy on the terms and conditions set forth in this Agreement.


 


C.            The parties intend that this Agreement will replace and
supersede any and all prior employment agreements between Cinergy (or any
component company or business unit of Cinergy) and the Executive.


 


Agreement


 


                In
consideration of the mutual promises, covenants and agreements set forth below,
the parties agree as follows:


 


1.                                      Employment and Term.


 


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


 


b.                                      The Employment
Period of this Agreement will commence as of the Effective Date and continue
until December 31, 2004; provided that, commencing on December 31, 2003, and on
each subsequent December 31, the Employment Period will be extended for
one (1) additional year unless either party gives the other party written
notice not to extend this Agreement at least ninety (90) days before the
extension would otherwise become effective.


 


 


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2.             Duties and Powers of Executive.


 


a.                                       Position.  The Executive will serve Cinergy as Vice
President, Financial Project Strategy & Oversight, or such other position
(including Vice President, Controller) as Cinergy may determine from time to
time, and she will have such responsibilities, duties, and authority as are customary
for someone of that position and such additional duties, consistent with her
position, as may be assigned to her from time to time during the Employment
Period by the Board of Directors, the Chief Executive Officer, or the senior
executive officer to whom she directly reports. 
Executive shall devote substantially all of Executive’s business time,
efforts and attention to the performance of Executive’s duties under this
Agreement; provided, however, that this requirement shall not
preclude Executive from reasonable participation in civic, charitable or
professional activities or the management of Executive’s passive investments,
so long as such activities do not materially interfere with the performance of
Executive’s duties under this Agreement.


 


b.                                      Place of
Performance.  In
connection with the Executive’s employment, the Executive will be based at the
principal executive offices of Cinergy, 221
East Fourth Street, Cincinnati, Ohio.  Except for required business travel
to an extent substantially consistent with the present business travel
obligations of Cinergy executives who have positions of authority comparable to
that of the Executive, the Executive will not be required to relocate to a new
principal place of business that is more than thirty (30) miles from such
location.


 


3.                                      Compensation.  The Executive will receive the following
compensation for her services under this Agreement.


 


a.                                       Salary.  The Executive’s Annual Base Salary, payable
in pro-rata installments not less often than semi-monthly, will be at the
annual rate of not less than $270,000. 
Any increase in the Annual Base Salary will not serve to limit or reduce
any other obligation of Cinergy under this Agreement.  The Annual Base Salary will not be reduced
except for across-the-board salary reductions similarly affecting all Cinergy
management personnel.  If Annual Base
Salary is increased or reduced during the Employment Period, then such adjusted
salary will thereafter be the Annual Base Salary for all purposes under this
Agreement.


 


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


 


	
  (i)

  	
   

  	
  During the Employment
  Period, the Executive will be eligible, and Cinergy will take all necessary
  action to cause the Executive to become eligible, to participate in
  short-term and long-term incentive, stock option, restricted stock,
  performance unit, savings, retirement and welfare plans, practices, policies
  and programs applicable generally to other senior executives of Cinergy at
  her level in the organization, except with respect

  



 


 


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  to any plan, practice,
  policy or program to which the Executive has waived her rights in
  writing.  The Executive will be a
  participant in the Senior Executive Supplement portion of the Cinergy Corp.
  Supplemental Executive Retirement Plan. 
  The Executive acknowledges and agrees that, except in the event of a
  Change in Control, she will not be entitled to receive her benefits (if any)
  in the form of a lump sum payment under the Cinergy Corp. Supplemental Executive
  Retirement Plan and/or the Cinergy Corp. Excess Pension Plan.

  



 


 


	
  (ii)

  	
   

  	
  Upon her retirement on or
  after having attained age 50, the Executive will be eligible for
  comprehensive medical and dental benefits which are not materially different
  from the benefits provided to retirees under the Cinergy Corp. Welfare
  Benefits Program or any similar program or successor to that program.  For purposes of determining the amount of
  the monthly premiums due from the Executive, the Executive will receive from
  Cinergy the maximum subsidy available as of the date of her retirement to an
  active Cinergy employee with the same medical benefits
  classification/eligibility as the Executive’s medical benefits
  classification/eligibility on the date of her retirement.

  



 


	
  (iii)

  	
   

  	
  The Executive will be a
  participant in the Annual Incentive Plan and will be paid pursuant to the
  terms and conditions of that plan, subject to the following:  (1) The maximum annual bonus shall be not
  less than seventy percent (70%) of the Executive’s Annual Base Salary (the
  “Maximum Annual Bonus”); and (2) The target annual bonus shall be not less
  than forty percent (40%) of the Executive’s Annual Base Salary (the “Target
  Annual Bonus”).

  



 


	
  (iv)

  	
   

  	
  The Executive will be a
  participant in the Long-Term Incentive Plan (the “LTIP”), and the Executive’s
  annualized target award opportunity under the LTIP will be equal to no less
  than seventy-five percent (75%) of her Annual Base Salary (the “Target LTIP
  Bonus”).

  



 


	
  (v)

  	
   

  	
  For purposes of Sections
  3b(iii) and 3b(iv), the Executive’s Annual Base Salary for any calendar year
  shall be increased by the amount of any Nonelective Employer Contributions
  made on behalf of the Executive during such calendar year under the 401(k)
  Excess Plan.

  



 


	
  (vi)

  	
   

  	
  Cinergy
  will recommend to the compensation committee of the Board (the “Committee”)
  that, no later than the first Committee meeting following the Effective Date,
  the Executive be granted the number of restricted shares of Cinergy Corp.
  Common Stock, par value of $0.01 per share (“Common Stock”) that has an
  aggregate value of $150,000 as of the date of grant, which number of shares
  shall be determined as if such shares were fully vested and not subject to
  any restrictions (the “Restricted Shares”). Except 

  



 


 


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  as otherwise provided in the applicable Stock
  Related Documents and this Agreement, the Restricted Shares will be
  substantially nonvested (within the meaning of Section 83 of the Code) until
  the third anniversary of the date of grant, subject to the Executive’s
  continued employment with Cinergy until that time. Notwithstanding the
  foregoing and Section 5d, upon the occurrence of a Change in Control, any
  Restricted Shares then held by the Executive shall, to the extent not otherwise
  provided in the applicable Stock Related Documents, become immediately
  vested. The Restricted Shares will be subject to the terms, definitions and
  provisions of the applicable Stock Related Documents.

  



 


c.                                       Fringe
Benefits and Perquisites.  During the Employment Period, the Executive
will be entitled to the following additional fringe benefits in accordance with
the terms and conditions of Cinergy’s policies and practices for such fringe
benefits:


 


	
  (i)

  	
   

  	
  Cinergy will furnish to the Executive an automobile
  cash allowance at least comparable to that received by other Cinergy
  executives at her level in the organization.

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  Cinergy will pay the initiation fee and the annual
  dues, assessments, and other membership charges of the Executive for
  membership in a country club selected by the Executive.

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  Cinergy will furnish to
  the Executive annual financial planning and tax preparation services,
  provided, however, that the cost to Cinergy of such services shall not exceed
  $15,000 during any thirty-six (36) consecutive month period. Notwithstanding
  the preceding sentence, any payment to the Executive pursuant to this Section
  3c(iv) will be grossed-up to cover all applicable federal, state and local
  income and employment taxes, calculated after assuming that the Executive
  pays such taxes for the year in which the payment occurs at the highest marginal
  tax rate applicable.

  
	
  (v)

  	
   

  	
  Cinergy will provide other fringe benefits in accordance
  with Cinergy plans, practices, programs, and policies in effect from time to
  time, commensurate with her position and at least comparable to those
  received by other Cinergy executives at her level in the organization.

  



 


d.                                      Expenses.  Cinergy agrees to reimburse the
Executive for all expenses, including those for travel and entertainment,
properly incurred by her in the performance of her duties under this Agreement in
accordance with the policies established from time to time by the Board of
Directors.


 


 


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e.                                       Stock Options 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 Executive pursuant to the LTIP or Cinergy Corp. Stock
Option Plan shall, to the extent not otherwise provided in the applicable Stock
Related Documents, become immediately exercisable.  If the Executive terminates employment for any
reason during the twenty-four (24) month period commencing upon the occurrence
of a Change in Control, notwithstanding Section 5d, any stock options or stock
appreciation rights then held by the Executive pursuant to the LTIP or Cinergy
Corp. Stock Option Plan shall, to the extent not otherwise provided in the
applicable Stock Related Documents, remain exercisable in accordance with their
terms but in no event for a period less than the lesser of (i) three months
following such termination of employment or (ii) the remaining term of such
stock option or stock appreciation right (which remaining term shall be
determined without regard to such termination of employment).


 


4.             Termination of
Employment.


 


a.                                       Death.  The Executive’s employment will terminate
automatically upon the Executive’s death during the Employment Period.


 


b.                                      By Cinergy for Cause.  Cinergy may terminate the Executive’s
employment during the Employment Period for Cause.  For purposes of this Employment Agreement, “Cause”
means the following:


 


	
  (i)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  The breach by the
  Executive of the confidentiality provisions set forth in Section 9.

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  The conviction of the
  Executive for the commission of a felony, including the entry of a guilty or
  nolo contendere plea, or any willful or grossly negligent action or inaction
  by the Executive that has a materially adverse effect on Cinergy. For
  purposes of this definition of Cause, no act, or failure to act, on the
  Executive’s part will be deemed “willful” unless it is

  



 


 


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  done, or
  omitted to be done, by the Executive in bad faith and without reasonable
  belief that the Executive’s act, or failure to act, was in the best interest
  of Cinergy.

  



 


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


 


d.                                      By the
Executive for Good Reason.  The Executive may terminate her employment
during the Employment Period for Good Reason. 
For purposes of this Agreement, “Good Reason” means the following:


 


	
  (i)

  	
   

  	
  (1) A reduction in the
  Executive’s Annual Base Salary, except for across-the-board salary reductions
  similarly affecting all Cinergy management personnel, or (2) a reduction in
  any other benefit or payment described in Section 3 of this Agreement, except
  for changes to the employee benefits programs generally affecting Cinergy
  management personnel, provided that those changes, in the aggregate, will not
  result in a material adverse change with respect to the benefits to which the
  Executive was entitled as of the Effective Date.

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  (1) The material reduction
  without her consent of the Executive’s title, authority, duties, or
  responsibilities from those in effect immediately prior to the reduction, or
  (2) a material adverse change in the Executive’s reporting responsibilities.

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  Any breach by Cinergy of
  any other material provision of this Agreement (including but not limited to
  the place of performance as specified in Section 2b).

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  The Executive’s
  disability due to physical or mental illness or injury that precludes the
  Executive from performing any job for which she is qualified and able to
  perform based upon her education, training or experience.

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  A failure by the Company
  to require any successor entity to the Company specifically to assume in
  writing all of the Company’s obligations to the Executive under this
  Agreement.

  



 


For purposes of determining whether Good Reason
exists with respect to a Qualifying Termination occurring on or within 24
months following a Change in Control, any claim by the Executive that Good
Reason exists shall be presumed to be correct unless the Company establishes to
the Board by clear and convincing evidence that Good Reason does not exist.


 


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                                                e.                                       By the Executive Without Good Reason.  The Executive may terminate her employment
without Good Reason upon prior written notice to the Company.


 


f.                                         Notice of Termination.  Any termination of the Executive’s employment
by Cinergy or by the Executive during the Employment Period (other than a
termination due to the Executive’s death) will be communicated by a written
Notice of Termination to the other party to this Agreement in accordance with
Section 12b.  For purposes of this
Agreement, a “Notice of Termination” means a written notice that specifies the
particular provision of this Agreement relied upon and that sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
terminating the Executive’s employment under the specified provision.  The failure by the Executive or Cinergy to
set forth in the Notice of Termination any fact or circumstance that
contributes to a showing of Good Reason or Cause will not waive any right of
the Executive or Cinergy under this Agreement or preclude the Executive or
Cinergy from asserting that fact or circumstance in enforcing rights under this
Agreement.


 


g.                                      Sale of Company Stock.  The Executive acknowledges
and agrees that she shall not sell or otherwise dispose of any shares of
Company stock acquired pursuant to the exercise of a stock option, other than
shares sold in order to pay an option exercise price or the related tax
withholding obligation, until 90 days after the Date of Termination.  Notwithstanding the foregoing, Cinergy, in
its sole discretion, may waive the restrictions contained in the previous
sentence.


 


5.             Obligations of
Cinergy Upon Termination.


 


a.                                       Certain
Terminations. 


(i)                                     If a
Qualifying Termination occurs during the Employment Period, Cinergy will pay to
the Executive a lump sum amount, in cash, equal to the sum of the following
Accrued Obligations:


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


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


(3)                                  an amount
equal to the AIP Benefit for the fiscal year that includes the Date of
Termination multiplied by a fraction, the numerator of which is the number of
days from the beginning of that fiscal year to and including the Date of
Termination and the denominator of which is three hundred and sixty-five
(365).  The AIP Benefit component of the
calculation will be equal to the annual bonus that 


 


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would have been earned by the Executive pursuant to
any annual bonus or incentive plan maintained by Cinergy in respect of the
fiscal year in which occurs the Date of Termination, determined by projecting
Cinergy’s performance and other applicable goals and objectives for the entire
fiscal year based on Cinergy’s performance during the period of such fiscal
year occurring prior to the Date of Termination, and based on such other
assumptions and rates as Cinergy deems reasonable.


 


	
   

  	
   

  	
  (4)

  	
   

  	
  the
  Accrued 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 of whether a Change in Control has occurred.

  



 


	
  (ii)

  	
   

  	
  In the
  event of a Qualifying Termination either prior to the occurrence of a Change
  in Control, or more than twenty-four (24) months following the occurrence of
  a Change in Control, Cinergy will pay the Accrued Obligations, and Cinergy
  will have the following additional obligations described in this Section
  5a(ii); provided, however, that each of the benefits described below in this
  Section 5a(ii) shall only be provided to the Executive if, upon presentation
  to the Executive following a Qualifying Termination, the Executive timely
  executes and does not timely revoke the Waiver and Release.

  



 


	
   

  	
   

  	
  (1)

  	
   

  	
  Cinergy
  will pay to the Executive a lump sum amount, in cash, equal to two (2) times
  the sum of the Annual Base Salary and the Annual Bonus.  For this purpose, the Annual Base Salary will
  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 to the
  termination, other than across-the-board reductions), and shall include the
  amount of any Nonelective Employer Contributions made on behalf of the
  Executive under the 401(k) Excess Plan during the fiscal year in which the
  Executive’s Qualifying Termination occurs, and the Annual Bonus will be the
  higher of (A) the annual bonus earned by the Executive pursuant to any annual
  bonus or incentive plan maintained by Cinergy in respect of the year ending
  immediately prior to the fiscal year in which occurs the Date of Termination,
  and (B) the annual bonus that would have been earned by the Executive
  pursuant to any annual bonus or incentive plan maintained by Cinergy in
  respect of the fiscal year in which occurs the Date of Termination,
  calculated by projecting Cinergy’s performance and other applicable goals and
  objectives for the entire fiscal year based on Cinergy’s performance during
  the period of such fiscal year occurring prior to the Date of Termination,
  and based on such other assumptions and rates as Cinergy deems reasonable;
  provided, however that for purposes of 

  



 


 


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  this
  Section 5a(ii)(1)(B), the Annual Bonus shall not be less than the Target
  Annual Bonus, nor greater than the Maximum Annual 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 Waiver and Release.

  



 


	
   

  	
   

  	
  (2)

  	
   

  	
  Subject
  to Clauses (A), (B) and (C) below, Cinergy will provide, until the end of the
  Employment Period, medical and dental benefits to the Executive and/or the Executive’s
  dependents at least equal to those that would have been provided if the
  Executive’s employment had not been terminated (excluding benefits to which
  the Executive has waived her rights in writing).  The benefits described in the preceding
  sentence will be in accordance with the medical and welfare benefit plans,
  practices, programs, or policies of Cinergy (the “M&W Plans”) as then
  currently in effect and applicable generally to other Cinergy senior
  executives and their families.  In the
  event that any medical or dental benefits, or payments pursuant to Section
  5a(ii)(2)(B), are subject to federal, state or local income taxes, Cinergy
  shall provide the Executive with an additional payment in the amount
  necessary such that after payment by the Executive of all such taxes,
  including the taxes imposed on the additional payment, the Executive retains
  an amount equal to the medical or dental benefits or payments pursuant to
  Section 5a(ii)(2)(B).

  



 


	
   

  	
   

  	
   

  	
   

  	
  (A)

  	
   

  	
  If, as
  of the Executive’s Date of Termination, the Executive meets the eligibility
  requirements for Cinergy’s retiree medical and welfare benefit plans, the
  provision of those retiree medical and welfare benefit plans to the Executive
  will satisfy Cinergy’s obligation under this Section 5a(ii)(2).

  



 


	
   

  	
   

  	
   

  	
   

  	
  (B)

  	
   

  	
  If, as
  of the Executive’s Date of Termination, the provision to the Executive of the
  M&W Plan benefits described in this Section 5a(ii)(2) 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 the M&W Plans, then Cinergy, in its sole
  discretion, may elect to pay the Executive, in lieu of the M&W Plan
  benefits described under this Section 5a(ii)(2), a lump sum cash payment
  equal to the total monthly premiums (or in the case of a self funded plan,
  the cost of COBRA continuation coverage) that would have been paid by Cinergy
  for the Executive under the M&W Plans from the Date of Termination
  through the end of the Employment Period. 
  Nothing in this Clause will affect the

  



 


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  Executive’s
  right to elect COBRA continuation coverage under a M&W Plan in accordance
  with applicable law, and Cinergy will make the payment described in this
  Clause whether or not the Executive elects COBRA continuation coverage, and
  whether or not the Executive receives health coverage from another employer.

  



 


	
   

  	
   

  	
   

  	
   

  	
  (C)

  	
   

  	
  If the
  Executive becomes employed by another employer and is eligible to receive
  medical or other welfare benefits under another employer-provided plan, any
  benefits provided to the Executive under the M&W Plans will be secondary
  to those provided under the other employer-provided plan during the
  Executive’s applicable period of eligibility.

  



 


	
   

  	
   

  	
  (3)

  	
   

  	
  Cinergy
  will pay the Executive a lump sum amount, in cash, equal to $15,000 in order
  to cover tax counseling services through an agency selected by the Executive, which
  amount will be grossed-up to cover all applicable federal, state and local
  income and employment taxes, calculated after assuming that the Executive
  pays such taxes for the year in which her Date of Termination occurs at the
  highest marginal tax rate applicable. 
  Such payment will be transferred to the Executive within thirty (30)
  days of the expiration of the revocation period contained in the Waiver and
  Release.

  



 


	
  (iii)

  	
   

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

  



 


	
   

  	
   

  	
  (1)

  	
   

  	
  Cinergy
  will 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
  Base Salary and Target Annual Bonus and (y) the sum of the Executive’s Annual
  Base Salary in effect immediately prior to the Change in Control and the
  Change in Control Bonus.  For purposes
  of the preceding sentence, the Executive’s Annual Base Salary on any given date
  shall include the amount of any Nonelective Employer Contributions made on

  



 


                                                


 


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  behalf
  of the Executive under the 401(k) Excess Plan during the fiscal year in which
  such date occurs.  For purposes of this
  Agreement, the Change in Control Bonus shall mean the higher of (A) the
  annual bonus earned by the Executive pursuant to any annual bonus or
  incentive plan maintained by Cinergy in respect of the year ending
  immediately prior to the fiscal year in which occurs the Date of Termination
  or, if higher, immediately prior to the fiscal year in which occurs the
  Change in Control, and (B) the annual bonus that would have been earned by
  the Executive pursuant to any annual bonus or incentive plan maintained by
  Cinergy in respect of the year in which occurs the Date of Termination,
  calculated by projecting Cinergy’s performance and other applicable goals and
  objective for the entire fiscal year based on Cinergy’s performance during
  the period of such fiscal year occurring prior to the Date of Termination,
  and based on such other assumptions and rates as Cinergy deems reasonable,
  provided, however, that  for purposes
  of this Section 5a(iii)(1)(B), such Change in Control Bonus shall not be less
  than 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 in the Waiver
  and Release.  Nothing in this Section
  5a(iii)(1) shall preclude the Executive from receiving the amount, if any, to
  which she is entitled in accordance with the terms of the Annual Incentive
  Plan for the fiscal year that includes the Date of Termination.

  



 


	
   

  	
   

  	
  (2)

  	
   

  	
  Cinergy
  will pay to the Executive the lump sum present value of any benefits under
  the Executive Supplemental Life Program under the terms of the applicable
  plan or program as of the Date of Termination, calculated as if the Executive
  was fully vested as of the Date of Termination. The lump sum present value,
  assuming commencement at age 50 or the Executive’s age as of the Date of
  Termination if later, will be determined using the interest rate applicable
  to lump sum payments in the Cinergy Corp. Non-Union Employees’ Pension Plan
  or any successor to that plan for the plan year that includes the Date of
  Termination. To the extent no such interest rate is provided therein, the
  annual interest rate applicable under Section 417(e)(3) of the Code, or any
  successor provision thereto, for the second full calendar month preceding the
  first day of the calendar year that includes the Date of Termination will be
  used. This lump sum will be paid within thirty (30) days of the expiration of
  the revocation period contained in the Waiver and Release.

  



 


	
   

  	
   

  	
  (3)

  	
   

  	
  The
  Executive shall be fully vested in her accrued benefits as of the Date of
  Termination under the Executive Retirement Plans, and her

  



 


 


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  aggregate
  accrued benefits thereunder will be calculated, and she will be treated for
  all purposes, as if she was credited with three (3) additional years of age
  and service as of the Date of Termination, provided, however, that to the
  extent a calculation is made regarding the actuarial equivalent amount of any
  alternate form of benefit, the Executive will not be credited with three
  additional years of age for purposes of such calculation.   However, Cinergy will not commence payment
  of such benefits prior to the date that the Executive has attained, or is
  treated (after taking into account the preceding sentence) as if she had
  attained, age 50.

  



 


	
   

  	
   

  	
  (4)

  	
   

  	
  For a
  thirty-six (36) month period after the Date of Termination, Cinergy will
  arrange to provide to the Executive and/or the Executive’s dependents life,
  disability, accident, and health insurance benefits substantially similar to
  those that the Executive and/or the Executive’s dependents are receiving
  immediately prior to the Notice of Termination at a substantially similar
  cost to the Executive (without giving effect to any reduction in those benefits
  subsequent to a Change in Control that constitutes Good Reason), except for
  any benefits that were waived by the Executive in writing.  If Cinergy arranges to provide the
  Executive and/or the Executive’s dependents with life, disability, accident,
  and health insurance benefits, those benefits will be reduced to the extent
  comparable benefits are actually received by or made available to the
  Executive and/or the Executive’s dependents during the thirty-six (36) month
  period following the Executive’s Date of Termination.  The Executive must report to Cinergy any
  such benefits that she or her dependents actually receives or that are made
  available to her or her dependents.  In
  lieu of the benefits described in the preceding sentences, Cinergy, in its
  sole discretion, may elect 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 of COBRA continuation coverage) that would have been
  paid by Cinergy to provide those benefits to the Executive and/or the
  Executive’s dependents.  Nothing in
  this Section 5a(iii)(4) will affect the Executive’s right to elect COBRA
  continuation coverage in accordance with applicable law, and Cinergy will
  provide the benefits or make the payment described in this Clause whether or
  not the Executive elects COBRA continuation coverage, and whether or not the
  Executive receives health coverage from another employer.  In the event that any benefits or payments
  provided pursuant to this Section 5a(iii)(4) are subject to federal, state or
  local income taxes, Cinergy shall provide the Executive with an additional
  payment in the amount necessary such that after payment by the Executive of

  



 


12

















	
   

  	
   

  	
   

  	
   

  	
  all such
  taxes, including taxes imposed on the additional payment, the Executive
  retains an amount equal to the benefit or payments provided in this Section
  5a(iii)(4).

  



 


	
   

  	
   

  	
  (5)

  	
   

  	
  In lieu
  of any and all other rights with respect to the automobile assigned by
  Cinergy to the Executive, Cinergy will provide the Executive with a lump sum
  payment in the amount of $35,000, which amount will be grossed-up to cover
  all applicable federal, state and local income and employment taxes,
  calculated after assuming that the Executive pays such taxes for the year in
  which her Date of Termination occurs at the highest marginal tax rate
  applicable.  Such payment will be
  transferred to the Executive within thirty (30) days of the expiration of the
  revocation period contained in the Waiver and Release.

  



 


	
   

  	
   

  	
  (6)

  	
   

  	
  Cinergy will pay the
  Executive a lump sum amount, in cash, equal to $15,000 in order to cover tax
  counseling services through an agency selected by the Executive, which amount will be grossed-up to cover all
  applicable federal, state and local income and employment taxes, calculated
  after assuming that the Executive pays such taxes for the year in which her
  Date of Termination occurs at the highest marginal tax rate applicable.  Such payment will be transferred to the
  Executive within thirty (30) days of the expiration of the revocation period
  contained in the Waiver and Release.

  



 


	
   

  	
   

  	
  (7)

  	
   

  	
  Cinergy will provide
  annual dues and assessments of the Executive for membership in a country club
  selected by the Executive until the end of the Employment Period.

  



 


	
   

  	
   

  	
  (8)

  	
   

  	
  Cinergy
  will provide outplacement services suitable to the Executive’s position until
  the end of the Employment Period or, if earlier, until the first acceptance
  by the Executive of an offer of employment.  
  At the Executive’s discretion, 15% of Annual Base Salary may be paid
  in lieu of outplacement services, which payment will be transferred to the
  Executive within thirty (30) days of the expiration of the revocation period
  contained in the Waiver and Release.

  



 


For purposes of this Section 5a(iii), the Executive
will be deemed to have incurred a Qualifying Termination upon a Change in
Control if the Executive’s employment is terminated prior to a Change in
Control, without Cause at the direction of a Person who has entered into an
agreement with Cinergy, the consummation of which will constitute a Change in
Control, or if the Executive terminates her employment for Good Reason prior to
a Change in Control if the circumstances or event that constitutes Good Reason
occurs at the direction of such a Person.


 


13

















 


 


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


c.                                       Certain Tax
Consequences.


(i)                                     In the event that any benefits
paid or payable to the Executive or for her benefit pursuant to the terms of
this Agreement or any other plan or arrangement in connection with, or arising out of, her employment with Cinergy or a
change in ownership or effective control of Cinergy or of a substantial portion
of its assets (a “Payment” or “Payments”) would be subject to any Excise Tax,
then the Executive will be entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by the Executive of all taxes
(including any interest, penalties, additional tax, or similar items imposed
with respect thereto and the Excise Tax), including any Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon or assessable against the Executive due to
the Payments.


(ii)                                  Subject to the
provisions of Section 5c, all determinations required to be made under this
Section 5c, including whether and when a Gross-Up Payment is required and the
amount of such Gross-Up Payment and the assumptions to be utilized in arriving
at such determination, shall be made by the Accounting Firm, which shall
provide detailed supporting calculations both to the Company and the Executive
within fifteen (15) business days of the receipt of notice from the Executive
that there has been a Payment, or such earlier time as is requested by the
Company.  If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall, at the
same time as it makes such determination, furnish the Executive with an opinion
that she has substantial authority not to report any Excise Tax on her federal
income tax return.  All fees and expenses of the Accounting Firm shall be
borne solely by the Company.  Any
Gross-Up Payment, as determined pursuant to this Section 5c, shall be paid by
Cinergy to the Executive within five (5) days of the receipt of the Accounting
Firm’s determination.  Any determination
by the Accounting Firm shall be binding upon Cinergy and the Executive.  As a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by Cinergy should
have been made (“Underpayment”), consistent with the


 


14

















 


calculations required to be made hereunder. 
In the event of any Underpayment, the
Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by Cinergy to or for the
benefit of the Executive, and Cinergy shall indemnify and hold harmless
the Executive for any such Underpayment, on an after-tax basis, including
interest and penalties with respect thereto.  In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account hereunder
at the time of termination of the Executive’s employment, the Executive shall
repay to the Company, at the time that the amount of such reduction in Excise
Tax is finally determined, the portion of the Gross-Up Payment attributable to
such reduction (plus that portion of the Gross-Up Payment attributable to the
Excise Tax and federal, state and local income and employment tax imposed on
the Gross-Up Payment being repaid by the Executive to the extent that such
repayment results in a reduction in Excise Tax and/or a federal, state or local
income or employment tax deduction) plus interest on the amount of such
repayment at the rate provided in Code Section 1274(b)(2)(B).


 


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


 


(iv)                              Notwithstanding
anything contained in this Agreement to the contrary, in the event that,
according to the Accounting Firm’s determination, an Excise Tax will be imposed
on any Payment or Payments, Cinergy will pay to the applicable government
taxing authorities as Excise Tax withholding, the amount of the Excise Tax that
Cinergy has actually withheld from the Payment or Payments in accordance with
law.


 


d.                                      Value Creation Plan and
Stock Options.  Upon the Executive’s
termination of employment for any reason, the Executive’s entitlement to
restricted shares and performance shares under the Value Creation Plan and any
stock options granted under the Cinergy Corp. Stock
Option Plan, the LTIP or any
other stock option plan will be determined
under the terms of the appropriate plan and any applicable administrative
guidelines and written agreements, provided, however, that following the
occurrence of a Change in Control the terms of any such plan, 


 


15

















 


administrative
guideline or written agreement shall not be amended in a manner that would
adversely affect the Executive with respect to awards granted to the Executive
prior to the Change in Control.


 


e.                                       Benefit Plans in General. 
Upon the Executive’s termination of employment for any reason, the
Executive’s entitlements, if any, under all benefit plans of Cinergy, including
but not limited to the Deferred Compensation Plan, 401(k) Excess Plan, Cinergy
Corp. Supplemental Executive Retirement Plan, Cinergy Corp. Excess Profit
Sharing Plan and any vacation policy, shall be determined under the terms of
such plans, policies and any applicable administrative guidelines and written
agreements, provided, however, that following the occurrence of a
Change in Control the terms of such plans and policies and any applicable
administrative guidelines and written agreements shall not be amended in a
manner that would adversely affect the Executive with respect to benefits
earned by the Executive prior to the Change in Control.


 


f.                                         Other Fees and Expenses.  Cinergy will also reimburse the Executive for
all reasonable legal fees and expenses incurred by the Executive (i) in
successfully disputing a Qualifying Termination that entitles the Executive to
Severance Benefits or (ii) in reasonably disputing whether or not Cinergy has
terminated her employment for Cause. 
Payment will be made within five (5) business days after delivery of the
Executive’s written request for payment accompanied by such evidence of fees
and expenses incurred as Cinergy reasonably may require.


 


6.                                      Non-Exclusivity
of Rights.  Nothing in this
Agreement will prevent or limit the Executive’s continuing or future
participation in any benefit, plan, program, policy, or practice provided by
Cinergy and for which the Executive may qualify, except with respect to any
benefit to which the Executive has waived her rights in writing or any plan,
program, policy, or practice that expressly excludes the Executive from
participation.  In addition, nothing in
this Agreement will limit or otherwise affect the rights the Executive may have
under any other contract or agreement with Cinergy entered into after the
Effective Date.  Amounts that are vested
benefits or that the Executive is otherwise entitled to receive under any
benefit, plan, program, policy, or practice of, or any contract or agreement
entered into after the Effective Date with Cinergy, at or subsequent to the
Date of Termination, will be payable in accordance with that benefit, plan,
program, policy or practice, or that contract or agreement, except as
explicitly modified by this Agreement. 
Notwithstanding the above, in the event that the Executive receives
Severance Benefits under Section 5a(ii) or 5a(iii), (a) the Executive shall not
be entitled to any benefits under any severance plan of Cinergy, including but
not limited to the Severance Opportunity Plan for Non-Union Employees of
Cinergy Corp. and (b) if the Executive receives such Severance Benefits as a
result of her termination for Good Reason, as that term is defined in Section
4d(iv), Cinergy’s obligations under Sections 5a(ii) and 5a(iii) shall be
reduced by the amount of any benefits payable to the Executive under any
short-term or long-term disability plan of Cinergy, the amount of which shall
be determined by Cinergy in good faith.


 


16

















 


 


7.                                      Full
Settlement:  Mitigation.  Except as otherwise provided herein, Cinergy’s obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations under this
Agreement will not be affected by any set-off, counterclaim, recoupment,
defense, or other claim, right, or action that Cinergy may have against the
Executive or others.  In no event will
the Executive be obligated to seek other employment or take any other action by
way 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 5a(ii)(2)
and 5a(iii)(4), those amounts will not be reduced simply because the Executive
obtains other employment.  If the
Executive finally prevails on the substantial claims brought with respect to
any dispute between Cinergy and the Executive as to the interpretation, terms,
validity, or enforceability of (including any dispute about the amount of any payment
pursuant to) this Agreement, Cinergy agrees to pay all reasonable legal fees
and expenses that the Executive may reasonably incur as a result of that
dispute.


 


8.                                      Arbitration.  Any dispute between the parties under this Agreement,
or any dispute between the parties relating to the breach of this Agreement,
the Executive’s employment with Cinergy, or the termination thereof, will be
resolved (except as provided below) through informal arbitration by an
arbitrator selected under the rules of the American Arbitration Association
(located in Cincinnati, Ohio) and the arbitration will be conducted in that
location under the rules of said Association, to the extent they do not
conflict with this Agreement.  Within 30 days
of the notice of a demand for arbitration, both parties will exchange with one
another documents in their respective possession that are relevant to the
dispute.  There will be no
interrogatories or depositions taken in preparation for the arbitration; provided,
however, that the arbitrator may permit limited deposition discovery in
extraordinary circumstances and if necessary to avoid manifest injustice.  The grieving party will file a written
statement explaining his, her or its claim, including relevant documentation,
within 45 days of the notice for arbitration; the opposing party will respond
within 30 days thereafter; and the grieving party may reply within 15 days of
the response.  After this period of
limited discovery, a live hearing before the arbitrator will occur.  The arbitrator will have the right only to
interpret and apply the provisions of this Agreement and may not change any of
its provisions.  The determination of the
arbitrator will be conclusive and binding upon the parties and judgment upon
the same may be entered in any court having jurisdiction thereof.  The arbitrator will give written notice to
the parties stating his, her or its determination, and will furnish to each
party a signed copy of such determination. 
Except as provided in Sections 7 and 5(f) hereof, the expenses of
arbitration will be borne equally by the Executive and Cinergy, and each party
will bear its own costs, including attorneys’ fees; provided, however, that the
arbitrator shall have the power to award such expenses and costs, including
attorneys’ fees, to the prevailing party in accordance with applicable law and
to require Cinergy at the beginning of the proceedings to fully or partially
reimburse (or provide an advance to) the Executive for expenses (but not for
costs, including attorneys’ fees) in the event the Executive can demonstrate
that the amount of the expenses is an unreasonable impediment to adjudication
of his or her claims in 


 


17

















 


arbitration.  If the arbitrator
awards a monetary amount to either party in excess of $1,000,000, the party
against whom the award was made may seek judicial resolution of the dispute
under a de novo standard before any court with appropriate jurisdiction over
the matter.  Notwithstanding the
foregoing, Cinergy will not be required to seek or participate in arbitration
regarding any breach by the Executive of his or her obligations under Section 9
hereof, but may pursue its remedies for such breach in a court of competent
jurisdiction in Cincinnati, Ohio.  Any arbitration
or action pursuant to this Section 8 will be governed by and construed in
accordance with the substantive laws of the State of Ohio, without giving
effect to the principles of conflict of laws of such State.


 


9.                                      Confidential
Information. 
The Executive will hold in a fiduciary capacity for the benefit of
Cinergy, as well as all of Cinergy’s successors and assigns, all secret,
confidential information, knowledge, or data relating to Cinergy, and its
affiliated businesses, that the Executive obtains during the Executive’s
employment by Cinergy or any of its affiliated companies, and that has not been
or subsequently becomes public knowledge (other than by acts by the Executive
or representatives of the Executive in violation of this Agreement).  During the Employment Period and thereafter,
the Executive will not, without Cinergy’s prior written consent or as may
otherwise be required by law or legal process, communicate or divulge any such
information, knowledge, or data to anyone other than Cinergy and those
designated by it.  The Executive
understands that during the Employment Period, Cinergy may be required from
time to time to make public disclosure of the terms or existence of the
Executive’s employment relationship to comply with various laws and legal
requirements.  In addition to all other
remedies available to Cinergy in law and equity, this Agreement is subject to
termination by Cinergy for Cause under Section 4b in the event the Executive
violates any provision of this Section.


 


10.                               Successors.


 


a.                                       This Agreement is
personal to the Executive and, without Cinergy’s prior written consent, cannot
be assigned by the Executive other than Executive’s designation of a
beneficiary of any amounts payable hereunder after the Executive’s death.  This Agreement will inure to the benefit of
and be enforceable by the Executive’s legal representatives.


 


b.                                      This Agreement will
inure to the benefit of and be binding upon Cinergy and its successors and
assigns.


 


c.                                       Cinergy will require
any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of
Cinergy to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that Cinergy would be required to perform it if
no succession had taken place.  Cinergy’s
failure to obtain such an assumption and agreement prior to the effective date
of a succession will be a breach of this Agreement and will entitle the
Executive to compensation from 


 


18

















 


Cinergy
in the same amount and on the same terms as if the Executive were to terminate
her employment for Good Reason upon a Change in Control, except that, for
purposes of implementing the foregoing, the date on which any such succession
becomes effective will be deemed the Date of Termination.


 


11.                               Definitions.  As used in this Agreement, the following
terms, when capitalized, will have the following meanings:


 


a.                                       Accounting Firm.  “Accounting Firm” means Cinergy’s independent auditors.


 


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


 


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


 


d.                                      AIP Benefit.  “AIP Benefit” means the Annual Incentive Plan
benefit described in Section 5a(i).


 


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


 


f.                                         Annual Bonus.  “Annual Bonus” has the meaning set forth in Section 5a(ii)(1).


 


g.                                      Annual Incentive Plan.  “Annual Incentive Plan” means the Cinergy
Corp. Annual Incentive Plan or any similar plan or successor to the Annual
Incentive Plan.


 


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


 


i.                                          COBRA.  “COBRA” means the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended.


 


j.                                          Cause.  “Cause” has the meaning set forth in Section 4b.


 


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


 


(i)                                     Any Person is
or becomes the beneficial owner (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (“1934 Act”), directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such Person any
securities acquired 


 


19

















 


directly from the Company or its affiliates) representing more than twenty
percent (20%) of the combined voting power of the Company’s then outstanding
securities, excluding any Person who becomes such a beneficial
owner in connection with a transaction described in Clause (1) of Paragraph
(ii) below; or


 


(ii)           There is consummated a
merger or consolidation of the Company or any direct or indirect subsidiary of
the Company with any other corporation, partnership or other entity, other than (1) a merger or consolidation that would result in the voting
securities of the Company outstanding immediately prior to that merger or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or its parent)
at least sixty percent (60%) of the combined voting power of the securities of
the Company or the surviving entity or its parent outstanding immediately after
the merger or consolidation, or (2) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which
no Person is or becomes the beneficial
owner, directly or indirectly, of securities of the Company (not including in
the securities beneficially owned by such a Person any securities acquired
directly from the Company or its affiliates other than in connection with the
acquisition by the Company or its affiliates of a business) representing twenty
percent (20%) or more of the combined voting power of the Company’s then
outstanding securities; or


 


(iii)          During any period of
two (2) consecutive years, individuals who at the beginning of that period
constitute the Board of Directors and any new director (other than a director
whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Company’s stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then
still in office who either were directors at the beginning of that period or
whose appointment, election, or nomination for election was previously so
approved or recommended cease for any reason to constitute a majority of the
Board of Directors; or


 


(iv)          The stockholders of the
Company approve a plan of complete liquidation or dissolution of the Company or
there is consummated a sale or disposition by the Company of all or
substantially all of the Company’s assets, other than a sale or disposition by
the Company of all or substantially all of the Company’s assets to an entity,
at least sixty percent (60%) of the combined voting power of the voting
securities of which are owned by stockholders of the Company in substantially the same


 


20

















 


proportions as their ownership of the Company immediately prior to the
sale.


 


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


 


m.                                    Chief Executive Officer.  “Chief Executive Officer” means the individual who, at any relevant time, is
then serving as the chief executive officer of
the Company.


 


n.                                      Cinergy.  “Cinergy” means the Company, its
subsidiaries, and/or its affiliates, and any successors to the foregoing.


 


o.                                      Code.  “Code” means the Internal Revenue Code of
1986, as amended, and interpretive rules and regulations.


 


p.                                      Company.  “Company” means Cinergy Corp.


 


q.                                      Date of Termination.  “Date of Termination” means:


 


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


 


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


 


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


 


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


 


r.                                         Deferred Compensation
Plan.  “Deferred Compensation Plan” means
the Cinergy Corp. Non-Qualified Deferred Incentive Compensation Plan or any
similar plan or successor to that plan.


 


s.                                       Effective Date.  “Effective Date” has the meaning given to that term in the first
paragraph of this Agreement.


 


t.                                         Employment Period.  “Employment Period” has the meaning set forth
in Section 1b.


 


 


21

















 


u.                                      Excise Tax.  “Excise Tax” means any excise tax imposed by
Code section 4999, together with any interest, penalties, additional tax or
similar items that are incurred by the Executive with respect to the excise tax
imposed by Code section 4999.


 


v.                                      Executive.  “Executive” has the meaning given to that term in the first
paragraph of this Agreement.


 


w.                                    Executive Retirement
Plans.  “Executive Retirement Plans” means
the Pension Plan, the Cinergy Corp. Supplemental Executive Retirement Plan and
the Cinergy Corp. Excess Pension Plan or any similar plans or successors to
those plans.


 


x.                                        Executive Supplemental
Life Program.  “Executive
Supplemental Life Program” means the Cinergy Corp. Executive Supplemental Life
Insurance Program or any similar program or successor to the Executive
Supplemental Life Program.


 


                                                y.                                      401(k) Excess Plan.  “401(k) Excess Plan” means the Cinergy Corp.
401(k) Excess Plan, or any similar plan or successor to that plan.


 


                                                z.                                        Good Reason.  “Good Reason” has the meaning set forth in Section
4d.


 


aa.                                 Gross-Up Payment.  “Gross-Up Payment” has the meaning set forth
in Section 5c.


 


bb.                               Long-Term Incentive
Plan or LTIP.  “Long-Term
Incentive Plan” or “LTIP” means the long-term incentive plan implemented under
the Cinergy Corp. 1996 Long-Term Incentive Compensation Plan or any successor
to that plan.


 


cc.                                 M&W Plans.  “M&W Plans” has the
meaning set forth in Section 5a(ii)(2).


 


dd.                               Maximum Annual Bonus.  “Maximum
Annual Bonus” has the meaning set forth in Section 3b.


 


                                                ee.                                 Nonelective Employer
Contribution.  “Nonelective Employer Contribution” has the meaning set forth in the 401(k)
Excess Plan.


 


ff.                                     Notice of Termination.  “Notice
of Termination” has the meaning set forth in Section 4f.


 


                                                gg.                               Payment or Payments.  “Payment”
or “Payments” has the meaning set forth in Section 5c.


 


                                                hh.                               Pension Plan.  “Pension Plan” means the Cinergy Corp.
Non-Union Employees’ Pension Plan or any successor to that plan.


 


22

















 


 


ii.                                       Person.  “Person” has the meaning set forth in
paragraph 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)

  	
   

  	
  Cinergy or any of its subsidiaries or affiliates;

  



 


	
  (ii)

  	
   

  	
  A trustee or other fiduciary
  holding securities under an employee benefit plan of Cinergy or its
  subsidiaries or
  affiliates;

  



 


	
  (iii)

  	
   

  	
  An underwriter temporarily holding
  securities pursuant to an offering of those securities; or

  



 


	
  (iv)

  	
   

  	
  A corporation owned, directly or indirectly,
  by the stockholders of the Company in substantially the same proportions as
  their ownership of stock of the Company.

  



 


jj.                                       Qualifying Termination.  “Qualifying Termination” means (i)  the
termination by Cinergy of the Executive’s employment with Cinergy
during the Employment Period other than a
termination for Cause or (ii)  the termination by the Executive of the
Executive’s employment with Cinergy during the Employment Period for Good Reason.


 


kk.                                 Relocation Program.  “Relocation Program” means the Cinergy Corp.
Relocation Program, or any similar program or successor to that program, as in
effect on the date of the Executive’s termination of employment.


 


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


 


mm.                           Stock Related Documents.  “Stock Related Documents” means the LTIP, the
Cinergy Corp. Stock Option Plan, and the Value Creation Plan and any applicable
administrative guidelines and written agreements relating to those plans.


 


nn.                               Target Annual Bonus.  “Target Annual Bonus” has the meaning set
forth in Section 3b.


 


oo.                               Target LTIP Bonus.  “Target LTIP Bonus” has the meaning set forth
in Section 3b.


 


pp.                               Value Creation Plan.  “Value Creation Plan” means the Value Creation
Plan or any similar plan, or successor plan of the LTIP.


 


qq.                               Waiver and Release.  “Waiver
and Release” means a waiver and release, in substantially the form attached to
this Agreement as Exhibit A.


 


23

















 


12.                             Miscellaneous.


 


	
  a.

  	
   

  	
  This
  Agreement will be governed by and construed in accordance with the laws of
  the State of Ohio, without reference to principles of conflict of laws. The
  captions of this Agreement are not part of its provisions and will have no force
  or effect. This Agreement may not be amended, modified, repealed, waived,
  extended, or discharged except by an agreement in writing signed by the party
  against whom enforcement of the amendment, modification, repeal, waiver,
  extension, or discharge is sought. Only the Chief Executive Officer or his
  designee will have authority on behalf of Cinergy to agree to amend, modify,
  repeal, waive, extend, or discharge any provision of this Agreement.

  
	
   

  	
   

  	
   

  
	
  b.

  	
   

  	
  All
  notices and other communications under this Agreement will be in writing and
  will be given by hand delivery to the other party or by Federal Express or
  other comparable national or international overnight delivery service,
  addressed in the
  name of such party at the following address, whichever is applicable:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If to
  the Executive:

  
	
   

  	
   

  	
  Cinergy
  Corp.

  
	
   

  	
   

  	
  221
  East Fourth Street

  
	
   

  	
   

  	
  Cincinnati,
  Ohio 45201-0960

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If to
  Cinergy:

  
	
   

  	
   

  	
  Cinergy
  Corp.

  
	
   

  	
   

  	
  221
  East Fourth Street

  
	
   

  	
   

  	
  Cincinnati,
  Ohio 45201-0960

  
	
   

  	
   

  	
  Attn:
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
  c.

  	
   

  	
  The
  invalidity or unenforceability of any provision of this Agreement will not
  affect the validity or enforceability of any other provision of this
  Agreement.

  
	
   

  	
   

  	
   

  
	
  d.

  	
   

  	
  Cinergy
  may 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 or regulation.

  
	
   

  	
   

  	
   

  
	
  e.

  	
   

  	
  The
  Executive’s or Cinergy’s failure to insist upon strict compliance with any
  provision of this Agreement or the failure to assert any right the Executive
  or Cinergy may have under this Agreement, including without limitation the
  right of the Executive to terminate employment for Good Reason pursuant to Section 4d or the right of Cinergy to terminate the Executive’s employment for
  Cause pursuant to Section 4b, will not
  be deemed to be a waiver of that provision or right or any other provision or
  right of this Agreement.

  



 


24

















 


f.                                         References in this
Agreement to the masculine include the feminine unless the context clearly
indicates otherwise.


g.                                      This instrument contains
the entire agreement of the Executive and Cinergy with respect to the subject
matter of this Agreement; and subject to any agreements evidencing stock option
or restricted stock grants described in Section 3b and the
Stock Related Documents, all promises, representations, understandings,
arrangements, and prior agreements are merged into this Agreement and
accordingly superseded.


h.                                      This Agreement may be
executed in counterparts, each of which will be deemed to be an original but
all of which together will constitute one and the same instrument.


                                                i.                                          Cinergy and the Executive agree that
Cinergy Services, Inc. will be authorized to act for Cinergy with respect to
all aspects pertaining to the administration and interpretation of this
Agreement.


 


 


25

















 


 


IN WITNESS WHEREOF, the Executive and the Company have caused this
Agreement to be executed as of the Effective Date.


 


                                                


	
   

  	
  CINERGY SERVICES INC.

  



 


 


 


	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  James
  E. Rogers

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Chairman
  and

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  



 


 


	
   

   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Lynn J. Good

  



 


26

















 


EXHIBIT A


*****


WAIVER AND RELEASE
AGREEMENT


THIS WAIVER AND
RELEASE AGREEMENT (this “Waiver and Release”) is
entered into by and between Lynn J. Good (the “Executive”) and Cinergy
Corp.  (“Cinergy”) (collectively, the “Parties”).


WHEREAS, the
Parties have entered into the Employment Agreement dated                           
(the “Employment Agreement”);


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


WHEREAS, the
Executive is required to sign this Waiver and Release in order to receive the
payment of certain compensation under the Employment Agreement following
termination of employment; and


WHEREAS, Cinergy
has agreed to sign this Waiver and Release.


NOW, THEREFORE, in
consideration of the promises and agreements contained herein and other good
and valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, and intending to be legally bound, the Parties agree as follows:


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


2.                                       In consideration of the
payments to be made and the benefits to be received by the Executive pursuant
to Section 5 of the Employment Agreement (the “Severance Benefits”), which the
Executive acknowledges are in addition to payment and benefits to which the
Executive would be entitled to but for the Employment Agreement, the Executive,
on behalf of herself, her heirs, representatives, agents and assigns hereby
COVENANTS NOT TO SUE OR OTHERWISE VOLUNTARILY PARTICIPATE IN ANY LAWSUIT
AGAINST, FULLY RELEASES, INDEMNIFIES, HOLDS HARMLESS, and OTHERWISE FOREVER
DISCHARGES (i) Cinergy, (ii) its subsidiary or affiliated entities, (iii) all
of their present or former directors, officers, employees, shareholders, and
agents as well as (iv) all predecessors, successors and assigns thereof (the
persons listed in clauses (i) through (iv) hereof shall be referred to
collectively as the “Company”) from any and all actions, charges, claims,
demands, damages or liabilities of any kind or character whatsoever, known or
unknown, which Executive now has or may have had through the effective date of
this Waiver and Release.  Executive
acknowledges and understands that she is not hereby prevented from filing a
charge of discrimination with the Equal Employment Opportunity Commission or
any state-equivalent agency or otherwise participate in any proceedings before such
Commissions.  Executive also acknowledges
and understands that in the event she does 


 


27





















 


file such a charge, she shall be entitled to no
remuneration, damages, back pay, front pay, or compensation whatsoever from the
Company as a result of such charge.


3.                                       Without limiting the
generality of the foregoing release, it shall include:  (i) all claims or potential claims arising
under any federal, state or local laws relating to the Parties’ employment
relationship, including any claims Executive may have under the Civil Rights
Acts of 1866 and 1964, as amended, 42 U.S.C. §§ 1981 and 2000(e) et seq.; the
Civil Rights Act of 1991; the Age Discrimination in Employment Act, as amended,
29 U.S.C. §§ 621 et seq.; the Americans with Disabilities Act of 1990, as
amended, 42 U.S.C. §§ 12,101 et seq.; the Fair Labor Standards Act, 29 U.S.C.
§§ 201 et seq.; the Worker Adjustment and Retraining Notification Act, 29
U.S.C. §§ 2101, et seq.; the Ohio Civil Rights Act, Chapter 4112 et seq.; and
any other federal, state or local law governing the Parties’ employment
relationship; (ii) any claims on account of, arising out of or in any way
connected with Executive’s employment with the Company or leaving of that
employment; (iii) any claims alleged or which could have been alleged in any
charge or complaint against the Company; (iv) any claims relating to the
conduct of any employee, officer, director, agent or other representative of
the Company; (v) any claims of discrimination or harassment on any basis; (vi)
any claims arising from any legal restrictions on an employer’s right to
separate its employees; (vii) any claims for personal injury, compensatory or
punitive damages or other forms of relief; and (viii) all other causes of
action sounding in contract, tort or other common law basis, including: (a) the
breach of any alleged oral or written contract; (b) negligent or intentional
misrepresentations; (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 Parties acknowledge
that it is their mutual and specific intent that the above waiver fully
complies with the requirements of the Older Workers Benefit Protection Act (29
U.S.C. § 626) and any similar law governing release of claims.  Accordingly, Executive hereby acknowledges
that:


(a)                                  She
has carefully read and fully understands all of the provisions of this Waiver
and Release and that she has entered into this Waiver and Release knowingly and
voluntarily after extensive negotiations and having consulted with her counsel;


(b)                                 The
Severance Benefits offered in exchange for Executive’s release of claims exceed
in kind and scope that to which she would have otherwise been legally entitled;


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


(d)                                 She
has been offered at least twenty-one (21) days within which to review and
consider this Waiver and Release.


 


28

















 


	
  5.

  	
   

  	
  The
  Parties agree that this Waiver and Release shall not become effective and
  enforceable until 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 Release for any reason by
  providing written notice of such intent to Cinergy within seven (7) days
  after she has signed this Waiver and Release, thereby forfeiting Executive’s
  right to receive any Severance Benefits provided hereunder and rendering this
  Waiver and Release null and void in its entirety.

  
	
  6.

  	
   

  	
  The
  Executive hereby affirms and acknowledges her continued obligations to comply
  with the post-termination covenants contained in her Employment Agreement,
  including but not limited to, the Confidential Information provisions of
  Section 9 of the Employment Agreement. Executive acknowledges that the
  restrictions contained therein are valid and reasonable in every respect, are
  necessary to protect the Company’s legitimate business interests and hereby
  affirmatively waives any claim or defense to the contrary.

  
	
  7.

  	
   

  	
  Executive
  specifically agrees and understands that the existence and terms of this
  Waiver and Release are strictly CONFIDENTIAL and that such confidentiality is
  a material term of this Waiver and Release. Accordingly, except as required
  by law or unless authorized to do so by Cinergy in writing, Executive agrees
  that she shall not communicate, display or otherwise reveal any of the
  contents of this Waiver and Release to anyone other than her spouse, primary
  legal counsel or financial advisor, provided, however, that they are first
  advised of the confidential nature of this Waiver and Release and Executive
  obtains their agreement to be bound by the same. Cinergy agrees that
  Executive may respond to legitimate inquiries regarding her employment with
  Cinergy by stating that she voluntarily resigned to pursue other
  opportunities, that the Parties terminated their relationship on an amicable
  basis and that the Parties have entered into a confidential Waiver and
  Release that prohibits her from further discussing the specifics of her
  separation. Nothing contained herein shall be construed to prevent Executive
  from discussing or otherwise advising subsequent employers of the existence
  of any obligations as set forth in her Employment Agreement. Further, nothing
  contained herein shall be construed to limit or otherwise restrict the
  Company’s ability to disclose the terms and conditions of this Waiver and
  Release as may be required by business necessity.

  
	
  8.

  	
   

  	
  In
  the event that Executive breaches or threatens to breach any provision of
  this Waiver and Release, she agrees that Cinergy shall be entitled to seek
  any and all equitable and legal relief provided by law, specifically
  including immediate and permanent injunctive relief. Executive hereby waives
  any claim that Cinergy has an adequate remedy at law. In addition, and to the
  extent not prohibited by law, Executive agrees that Cinergy shall be entitled
  to an award of all costs and attorneys’ fees incurred by Cinergy in any
  successful effort to enforce the terms of this Waiver and Release. Executive
  agrees that the foregoing relief shall not be construed to limit or otherwise
  restrict Cinergy’s ability to pursue 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 to the
  foregoing Waiver and Release, Executive agrees to

  



 


29





















 


	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Cinergy hereby releases the Executive, her heirs,
  representatives, agents and assigns from any and all known claims, causes of
  action, grievances, damages and demands of any kind or nature based on acts
  or omissions committed by the Executive during and in the course of her
  employment with Cinergy provided such act or omission was committed in good
  faith and occurred within the scope of her normal duties and
  responsibilities.

  
	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  The Parties acknowledge that this Waiver and Release
  is entered into solely for the purpose of ending their employment
  relationship on an amicable basis and shall not be construed as an admission
  of liability or wrongdoing by either Party and that both Cinergy and
  Executive have expressly denied any such liability or wrongdoing.

  
	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Each of the promises and obligations shall be
  binding upon and shall inure to the benefit of the heirs, executors,
  administrators, assigns and successors in interest of each of the Parties.

  
	
   

  	
   

  	
   

  
	
  12.

  	
   

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

  
	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  This Waiver and Release shall be governed by and
  interpreted in accordance with the laws of the State of Ohio without regard
  to any applicable state’s choice of law provisions.

  
	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Executive represents and acknowledges that in
  signing this Waiver and Release she does not rely, and has not relied, upon
  any representation or statement made by Cinergy or by any of Cinergy’s
  employees, officers, agents, stockholders, directors or attorneys with regard
  to the subject matter, basis or effect of this Waiver and Release other than
  those specifically contained herein.

  
	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  This Waiver and Release represents the entire
  agreement between the Parties concerning the subject matter hereof, shall
  supercede any and all prior agreements which may otherwise exist between them
  concerning the subject matter hereof (specifically excluding, however, the
  post-termination obligations contained in any existing Employment Agreement
  or other legally-binding document), and shall not be altered, amended,
  modified or otherwise changed except by a writing executed by both Parties.

  
	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  Cinergy Corp. and the Executive agree that Cinergy
  Services, Inc. will be authorized to act for Cinergy Corp. with respect to
  all aspects pertaining to the administration and interpretation of this
  Waiver and Release.

  



 


30

















 


PLEASE READ
CAREFULLY.  WITH RESPECT TO THE
EXECUTIVE, THIS


WAIVER AND RELEASE
INCLUDES A COMPLETE RELEASE OF ALL KNOWN


AND UNKNOWN CLAIMS.


 


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


	
  EXECUTIVE

  	
  CINERGY SERVICES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signed:

  	
  /s/ Lynn J. Good

  	
   

  	
  By:

  	
  /s/ James E. Rogers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Printed:

  	
  Lynn J. Good

  	
   

  	
  Title:

  	
  James E. Rogers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
  May 1, 2003

  	
   

  	
  Dated

  	
  May 1, 2003

  	
   

  
											



 


31