Exhibit
10-c


 


TEMPLATE


 


INCENTIVE
STOCK OPTION AGREEMENT FOR


EMPLOYEES
UNDER THE CINERGY CORP.


1996
LONG-TERM INCENTIVE COMPENSATION PLAN


 


THIS INCENTIVE STOCK
OPTION AGREEMENT (the “Agreement”), effective as of                               
(the “Date of Grant”), is made by and between Cinergy Corp., a Delaware
corporation, and                               
(the “Optionee”), an employee of Cinergy Corp. or one of its directly or
indirectly held majority or greater-owned subsidiaries (collectively referred
to in this Agreement 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 Optionee has been
granted an incentive stock option (the “Option”) to purchase shares of Cinergy
Corp. common stock, with par value of $0.01 per share (“Common Stock”),
pursuant to the Plan, 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 grant of the Option described in this Agreement.


 


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


 


1.                                      Option Grant.


 


Cinergy Corp. hereby
grants to the Optionee effective on the Date of Grant an Option to purchase                     
shares of Common Stock, pursuant to the Plan, on the terms and conditions set
forth in this Agreement.  The number of shares of Common Stock subject to
this Option, and the Option Price described below in Section 2, are
subject to adjustment as provided in the Plan.


 


2.                                      Purchase Price.


 


The purchase price of
each share of Common Stock subject to this Option is $                    
(the “Option Price”).  At the time this Option is exercised, the Optionee
must pay the aggregate Option Price of the shares with respect to which the
Optionee exercises the Option pursuant to one of the following methods:  (a) in
cash, (b) by tendering to the Company whole shares of Common Stock owned
by the Optionee, or owned jointly by the Optionee and his or her spouse (with
the spouse’s written consent), for at least six (6) months (a “Stock Swap”),
which tendered shares must have a Fair Market Value (as defined in the Plan)
equal to the aggregate Option Price of the shares with respect to which the
Optionee exercises the Option, (c) any combination of the methods
described in (a) and (b) of this sentence, or (d) any other
method approved by the Committee (as defined in the Plan).  To exercise
this Option, the Optionee must send written notice to the Cinergy Corp.
Manager, Compensation, at the address noted in Section 20 or follow such
other procedures as are specified by the Company.  The notice shall state
the number of shares of Common Stock in respect of which the Option is being
exercised, shall identify the Option as an incentive stock option, and shall be
signed by the person or persons exercising the Option.  The notice shall
be accompanied by payment of the full cash Option Price for such shares of
Common Stock, or followed as soon as practicable by the delivery of shares used
in a Stock Swap and related cash (if applicable), or any other consideration
approved by the Committee.  Certificates evidencing shares of Common Stock
purchased pursuant to this Option will not be delivered to the Optionee until
payment has been made.


 


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3.                                      Term of, and
Right to Exercise, Option.


 


The term of this Option
(the “Option Term”) shall be for a period of ten years from the Date of Grant,
subject to earlier termination as otherwise provided in this Agreement. Except
as otherwise provided below, the Option shall become exercisable with respect
to                               
(        %) of the total number
of shares of Common Stock covered by this Option on                               ,
but only if the Optionee remains continuously employed with the Company from
the Date of Grant until                               .(1)
 From and after the date the Option
becomes exercisable, the shares of Common Stock subject to this Option may be
purchased at any time, or from time to time, in whole or in part, until the
Option Term expires, but in no case may fewer than 100 such shares be purchased
at any one time, except to purchase all remaining shares subject to the Option.


 


4.                                      Effect
of Termination of Employment due to Reasons other than Retirement, Death or
Disability.


 


If the Optionee ceases to
be an employee of the Company for any reason other than as a result of his or
her termination of employment on or after attaining age fifty (50) with five
years of “Service” under the Cinergy Corp. Non-Union Employees’ Pension Plan (“Retirement”),
death or disability (as defined in Section 7), this Option, to the extent
exercisable on the date of termination, will remain exercisable until the
earlier of (a) the date three months following the effective date of the
Optionee’s termination of employment or (b) the expiration of the Option
Term.


 


5.                                      Effect of
Termination of Employment Due to Retirement.


 


If the Optionee ceases to
be an employee of the Company as a result of his or her Retirement, the Option
shall become immediately exercisable in its entirety and the Optionee may
exercise this Option in whole or in part, subject to Section 6, at any
time prior to the expiration of the Option Term.


 


6.                                      Effect of
Death.


 


Notwithstanding Section 5,
if the Optionee dies either while employed by the Company or after his or her
termination of employment because of Retirement, the Option shall become
immediately exercisable in its entirety and may be exercised in whole or in
part by the Optionee’s executor, administrator, legatees or estate
beneficiaries at any time during the period commencing upon the Optionee’s death
and ending on the earlier of (a) the date twelve (12) months after the
date of the Optionee’s death or (b) the expiration of the Option Term.


 


7.                                      Effect of
Disability.


 


In the event that the
Optionee while employed by the Company becomes “disabled,” as that term is
defined under the then existing long-term disability plan of the Company in
which the Optionee participates (or if no such plan exists, as determined by
the Committee), the Optionee will be deemed to be employed by the Company
during his or her period of disability.


 


8.                                      Effect of
Change in Control.


 


The occurrence of a “Change
in Control” (as defined in the Plan) of Cinergy Corp. shall have no affect upon
the vesting and exercisability of the Option. 
Notwithstanding the foregoing, in the event that the Optionee’s
employment is terminated by the Company without Cause or by the Optionee for
Good Reason during the two-year period beginning on the “Cinergy Effective Time”,
as such term is used in the Agreement and Plan of Merger by and among Duke Energy


 










(1)          The
vesting events for stock option grants vary for each participant (e.g., cliff
or graded vesting schedule).


 


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Corporation, Cinergy
Corp., Deer Holding Corp., Deer Acquisition Corp. and Cougar Acquisition Corp.,
dated May 8, 2005, the Option to the extent it has not previously
terminated shall immediately become vested and exercisable in full.  For purposes of this Agreement, the terms “Cause”
and “Good Reason” shall have the meaning given to such terms in the most recent
employment agreement, as amended, in effect for the Optionee.


 


9.                                      Transferability.


 


This Option is not
transferable or assignable otherwise than by will or the laws of descent and
distribution.  The Option may be exercised only by the Optionee, or, if
the Optionee dies, by his or her executor, administrator, legatees, or
beneficiaries of his or her estate who are entitled to this Option, or in the
event of his or her legal incapacity, by his or her guardian or legal representative
acting on behalf of the Optionee in a fiduciary capacity under state law and
court supervision.


 


10.                               Effect of Assignment
or Pledge.


 


If the Optionee attempts
to assign or pledge shares of Common Stock covered by this Option, or if there
is a levy, attachment, execution or other legal or equitable process upon this
Option, the Company has the right to terminate this Option.


 


11.                               Incorporation of the
Plan’s Terms.


 


This Option is subject to
all the terms, provisions and conditions of the Plan, which is incorporated
into this Agreement by reference, and to such regulations, procedures and
administrative guidelines as may from time to time be adopted by the
Committee.  A copy of the Plan and a set of administrative guidelines have
been furnished to the Optionee and an additional copy may be obtained from the
Company.  In the event of any conflict between the provisions of the Plan
or administrative guidelines (as the case may be) and the provisions of this
Agreement, the terms, conditions and provisions of the Plan and/or
administrative guidelines shall control, and this Agreement shall be deemed to
be modified accordingly.  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 Optionee and his or her legal representative in respect of any
questions arising under the Plan, or this Agreement.


 


12.                               Incentive Stock
Options.


 


This Option is intended
to be an “incentive stock option” within the meaning of that term under Section 422
of the Internal Revenue Code of 1986, as amended.  Subject to and upon the
terms, conditions and provisions of the Plan, each and every provision of this
Agreement shall be administered, construed and interpreted so that this Option
shall so qualify as an incentive stock option.


 


13.                               Disqualifying
Dispositions.


 


The Optionee agrees to
notify the Company, in writing pursuant to Section 20 of the Plan or
pursuant to such other procedures as are specified by the Company, immediately
upon any sale or transfer of any shares of Common Stock received upon exercise
of this Option to the extent such sale or transfer takes place prior to the
later of (a) two years from the Date of Grant, or (b) one year from
the date of exercise of this Option.


 


14.                               Expiration of Rights.


 


Unless earlier terminated
in accordance with the terms of this Agreement, all rights to exercise this
Option will expire, in any event, ten years from the Date of Grant.


 


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15.                               Certificate.


 


Certificates evidencing
shares transferred upon exercise of this Option may bear a legend setting
forth, among other things, such restrictions on the disposition or transfer of
the shares as the Company may deem consistent with applicable federal and state
laws.


 


16.                               No Right to Continued
Employment.


 


Nothing in this Option
shall restrict the right of the Company to terminate the Optionee’s employment
at any time with or without cause.


 


17.                               Successors.


 


The terms of this
Agreement shall be binding upon and inure to the benefit of the Company, its
successors and assigns, and the Optionee and the Optionee’s beneficiaries,
executors, administrators, heirs and successors.


 


18.                               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.


 


19.                               Modifications.


 


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


 


20.                               Notices and
Electronic Delivery and Signature.


 


All notices to the
Company and the exercise of the Option herein granted, shall be addressed to
Cinergy Corp., 139 East Fourth Street, Cincinnati, Ohio 45202, Attention:
Manager, Compensation, or such other address or in accordance with such other
procedure as the Company may, from time to time, specify.  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
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.


 


21.                               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.


 


22.                               Governing Law.


 


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


 


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23.                               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.


 


24.                               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.


 


25.                               Satisfaction of Legal
Requirements.


 


This Option may not be
exercised until the Company has been advised by counsel that all applicable
legal requirements have been met.


 


IN WITNESS WHEREOF, this
Agreement has been executed by the parties effective as of the           
day of                               ,
          .


 


	
  OPTIONEE

  	
  CINERGY CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
						



 


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