TEMPLATE


 


 


RESTRICTED
STOCK AGREEMENT FOR


EMPLOYEES
UNDER THE CINERGY CORP.


1996
LONG-TERM INCENTIVE COMPENSATION PLAN


 


 


                THIS RESTRICTED
STOCK AGREEMENT (the “Agreement”), dated effective as of _______________ (the “Date
of Grant”), is made by and between Cinergy Corp., a Delaware corporation, and _______________
(the “Employee”), an employee of Cinergy Corp. or one of its directly or
indirectly held majority or greater-owned subsidiaries (collectively referred
to herein as the “Company”).


 


                WHEREAS, Cinergy Corp. has adopted the Cinergy Corp.
1996 Long-Term Incentive Compensation Plan, as amended from time to time (the “Plan”),
pursuant to which the Employee has been granted the right, contingent upon the Employee
satisfying certain vesting requirements, to receive shares of Cinergy Corp.
common stock, with par value of $0.01 per share (“Common Stock”), on the terms
set forth in this Agreement; and


 


WHEREAS, the parties desire to enter into this
Agreement to set forth their understandings with respect to the Common Stock
described in this Agreement, such Common Stock sometimes referred to herein as “Restricted
Stock.”


 


                NOW, THEREFORE, in
consideration of the recitals and the mutual agreements contained in this
Agreement, the parties agree as follows:


 


1.                                      Grant of Restricted Stock. 
Cinergy
Corp. hereby grants to the Employee as of the Date of Grant ______ shares of
Restricted Stock (the “Restricted Stock”) subject to and upon the terms,
conditions and restrictions set forth in this Agreement and the Plan.  The Restricted Stock shall be fully paid and
nonassessable.


 


2.                                      Restrictions on Restricted
Stock.  The Restricted Stock shall be subject to the following
terms, conditions and restrictions:


 


(a)                                  Subject to the restrictions set forth in
the Plan and this Agreement, the Employee shall possess all incidents of
ownership of the Restricted Stock.


 


(b)                                 The Restricted Stock, and the Employee’s
interest therein, may not be sold, exchanged, assigned, transferred, pledged,
hypothecated, encumbered or otherwise disposed of by the Employee, except to
the Company, until the Restricted Stock has become vested as provided in
Section 2(c) hereof; provided, however, that the Employee’s
rights with respect to the Restricted Stock may be transferred by will or
pursuant to 


 


 


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                                                the laws of descent and distribution. Any
purported transfer or encumbrance in violation of this Agreement shall be void,
and the other party to any such purported transaction shall not obtain any
right or interest in the Common Stock.


 


(c)                                  Subject to earlier forfeiture as
described in Section 2(d) hereof, the Restricted Stock shall vest on
_______________, provided that the Employee has been continuously employed with
the Company as of such date [and the Compensation Committee of the Board of
Directors of Cinergy Corp. or its delegate (the “Committee”) determines as of
such date that all of the performance measures set forth in Section 2(e) (the “Performance
Measures”) have been satisfied in full.] Notwithstanding the preceding
sentence, the Restricted Stock shall immediately vest in full [(without regard
to whether the Performance Measures have been satisfied)] if Employee has been
continuously employed with the Company until the first to occur of the following
events (provided that such events occur on or prior to _______________): (i)
the Employee’s death, (ii) the Employee’s disability (as that term is defined
in the Cinergy Corp. Long-Term Disability Plan), (iii) a Change in Control
occurs, (iv) the Company terminates the Employee’s employment for reasons other
than Cause, or (v) the Employee terminates his or her employment with the
Company for Good Reason.(1)


 


(d)                                 The Employee shall forfeit his or her Restricted
Stock in its entirety if he  or she ceases
to remain continuously employed by the Company until the date on which the
Restricted Stock vests in accordance with Section 2(c) hereof. In the event of
forfeiture, the certificate(s) representing the Restricted Stock covered by
this Agreement shall be transferred to and reacquired by the Company at no cost
to the Company.


 


(e)                                  For purposes of this Agreement, the
following terms shall have the following meanings:


 


(i)                                     “Cause” [Insert Definition of Cause]


 


(ii)                                  “Good Reason” [Insert Definition of Good
Reason]


 


(iii)                               “Performance Period” shall mean the
period beginning on _________________ and ending on _________________.


 


(iv)                              “Performance Measures” shall be as
follows:


 


                                                [Insert Performance Measures]










(1) The vesting events for
restricted stock vary for each participant. 
Some restricted stock grants incorporate a cliff vesting schedule while
others use a graded vesting schedule. 
The restricted stock grants incorporate some or all of the items set
forth in Section 2(c).


 


 


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(f)                                    The Employee
shall have the right to receive, during the period commencing on the Date of Grant and
ending on the date the Restricted Stock vests, cash payments equal to the
amount of dividends that the Employee would have received if he or she had
owned ______ shares of Common Stock during such period, which amounts shall be
paid to the Employee as soon as administratively practicable following each
relevant dividend payment date.


 


3.                                      Certificate; Restrictive Legend.  The Employee agrees that the Restricted Stock
shall be represented by a certificate or certificates registered in the Employee’s
name and endorsed with an appropriate legend referring to the restrictions set
forth in this Agreement.


 


4.                                      Retention of Stock Certificate; Dividends.


 


(a)                                  The
certificate(s) representing the Restricted Stock shall be held in custody by
the Company or its agent until those shares have become vested in accordance
with Section 2(c) of this Agreement.  The
Employee hereby appoints the Company, with full power of substitution, as the
Employee’s true and lawful attorney-in-fact with irrevocable power and
authority in the name and on behalf of the Employee to take any action and
execute all documents and instruments, including, without limitation, stock
powers which may be necessary to transfer the certificate or certificates
evidencing such forfeited shares to the Company upon such forfeiture.


 


(b)                                 Except as otherwise provided herein, from
and after the Date of Grant, [the Employee shall have all rights of a
shareholder with respect to the Restricted Stock, including the right to vote
the Restricted Stock and receive any dividends;] [during the period commencing
on _______________ and ending on the date the Restricted Stock becomes fully
vested, any dividends that would have been paid to the Employee if he or she had
held the Restricted Stock during such period and such stock had not been
subject to forfeiture provisions will be retained by the Company and will be
subject to the provisions set forth in Section 2; if the Restricted Stock
becomes vested as provided herein, the Company shall transfer to the Employee
additional Common Stock having a fair market value on the date of transfer equal
to the dividends retained with respect to the Restricted Stock;] provided,
however, that any additional Common Stock or other securities that the Employee
may become entitled to receive pursuant to a stock dividend, stock split,
combination of shares, recapitalization, merger, consolidation, separation or
reorganization or any other change in the capital structure of the Company
shall be subject to the same restrictions as the Restricted Stock covered by
this Agreement.


 


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5.                                      Income Taxes. 
The Employee
shall pay to the Company promptly upon request, and in any event at the time
the Employee recognizes taxable income in respect of the Restricted Stock, an
amount equal to the taxes the Company determines it is required to withhold
under applicable tax laws with respect to the Restricted Stock.  Such payment shall be made in the form of
cash, shares of Common Stock already owned or withholding from shares otherwise
transferable upon the lapse of restrictions, or in a combination of such
methods, as determined by the Employee. 
The Employee shall promptly notify the Company of any election made by
the Employee pursuant to Section 83(b) of the Code.


 


6.                                      Deferral of Restricted
Stock.  To the extent permitted by law, the Committee
may permit the Employee to elect to defer the settlement of the Restricted
Stock pursuant to such rules, procedures or programs as it may establish for
purposes of this Agreement. The Committee also may provide that the deferred
settlement includes the payment or crediting of dividend equivalents or interest
on the deferred amounts.


 


7.                                      Incorporation by Reference. 
The
provisions of the Plan are incorporated into this Agreement by reference. This
Agreement shall be construed in accordance with the provisions of the Plan and
such regulations as may from time to time be adopted by the Committee. Any
capitalized terms not otherwise defined in this Agreement shall have the
definitions set forth in the Plan. The Committee shall have final authority to
interpret and construe the Plan and this Agreement and to make any and all
determinations thereunder, and its decision shall be binding and conclusive
upon the Employee and his or her legal representative in respect of any
questions arising under the Plan, or this Agreement. In the event of any
conflict between the provisions of the Plan and the provisions of this
Agreement, the terms, conditions and provisions of the Plan shall control, and
this Agreement shall be deemed to be modified accordingly. By signing this
Agreement, the Employee acknowledges that he or she has received a copy of the
Plan and this Agreement and has had an opportunity to review the Plan and this
Agreement and agrees to be bound by all the terms and provisions of the Plan
and this Agreement.


 


8.                                    Notices and Electronic
Delivery and Signature.  Except as otherwise provided by the
Company from time to time, any and all notices, designations, consents, offers,
acceptances and any other communications provided for in this Agreement shall
be given in writing and shall be delivered either personally or by registered
or certified mail, postage prepaid, which shall be addressed, in the case of
Cinergy Corp., to its Corporate Secretary at the principal office of Cinergy
Corp., in the case of the Employee, to the Employee’s address appearing on the
books of the Company, or to the Employee’s residence or to such other address
as may be designated in writing by the Employee.  Notwithstanding the
foregoing, the Employee hereby consents and agrees to electronic delivery of
any Plan documents, proxy materials, annual reports and other related
documents, including all materials required to be distributed pursuant to
applicable securities laws.  If the
Company establishes procedures for an


 


 


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                                                electronic
signature system for delivery and acceptance of Plan documents (including
documents relating to any programs adopted under the Plan), the Employee hereby
consents to such procedures and agrees that his or her electronic signature is
the same as, and shall have the same force and effect as, his or her manual
signature.  The Employee consents and
agrees that any such procedures and delivery may be effected by a third party
engaged by the Company to provide administrative services related to the Plan,
including any program adopted under the Plan. 
The Employee understands that, unless earlier revoked by the Employee,
this consent shall be effective for the duration of the Agreement and that he
or she shall have the right at any time to request written copies of any and
all materials referred to above.


 


9.                                      No Right to Continued
Employment.  Nothing in the Plan or in this Agreement
shall confer upon the Employee any right to continue in the employ of the
Company or shall interfere with or restrict in any way the right of the
Company, which is hereby expressly reserved, to remove, terminate or discharge
the Employee at any time for any reason whatsoever, with or without Cause.


 


10.                               Successors. 
The terms
of this Agreement shall be binding upon and inure to the benefit of Cinergy
Corp., its successors and assigns, and on the Employee and the beneficiaries,
executors, administrators, heirs, and successors of the Employee.


 


11.                               Invalid Provision. 
The
invalidity or unenforceability of any particular provision of this Agreement shall
not affect the other provisions of this Agreement, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provision has
been omitted.


 


12.                               Modifications. No change, amendment, modification or waiver of any
provision of this Agreement shall be valid unless the same is in writing and
signed by the parties.


 


13.                               Entire Agreement. 
This
Agreement and the Plan contain the entire agreement and understanding of the
parties with respect to the subject matter contained in this Agreement, and
supersede all prior communications, representations and negotiations in respect
thereto.


 


14.                               Governing Law. 
This Agreement and the Employee’s rights under it shall be construed and
determined in accordance with the laws of the state of Delaware.


 


15.                               Headings. 
The
headings of the Sections of this Agreement are provided for convenience only
and are not to serve as a basis for interpretation or construction, and shall
not constitute a part of this Agreement.


 


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


 


17.                               Compliance with Law.  The Company
shall make reasonable efforts to comply with all applicable federal and state
securities laws; provided, however, notwithstanding any other
provision of this Agreement, the Company shall not be obligated to deliver any
Common Stock pursuant to this Agreement if the delivery thereof would result in
a violation of any such law.


 


 


                IN WITNESS WHEREOF, this Agreement has been executed
and delivered by the parties as of the ______ day of _______________, _____.


 


EMPLOYEE                                                                                                           CINERGY
CORP.


 


 


 


Signature:  _________________________                                                  By:  __________________________


 


 


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