EXHIBIT 10.6


 


PHANTOM
STOCK AWARD AGREEMENT


 


This Phantom
Stock  Award Agreement (the “Agreement”)
has been made as of February 19, 2009, (the
“Date of Grant”) between Duke Energy Corporation,
a Delaware corporation, with its principal offices in Charlotte, North Carolina
(the “Corporation”), and                               
(the “Grantee”).


 


RECITALS


 


Under the Duke Energy
Corporation 2006 Long-Term Incentive Plan, as it may, from time to time, be
further amended (the “Plan”), the Compensation Committee of the Board of
Directors of the Corporation (the “Committee”), or its delegatee, has
determined the form of this Agreement and selected the Grantee, as an Employee,
to receive the award evidenced by this Agreement (the “Award”) and the Phantom
Stock units and tandem Dividend Equivalents that are subject hereto.  The applicable provisions of the Plan are
incorporated in this Agreement by reference, including the definitions of terms
contained in the Plan (unless such terms are otherwise defined herein).


 


AWARD


 


In accordance with the Plan, the Corporation has
made this Award, effective as of the Date of Grant and upon the following terms
and conditions:


 


Section
1.              Number and Nature of Phantom Stock Units and Tandem
Dividend Equivalents.  The
number of Phantom Stock units and the number of tandem Dividend Equivalents
subject to this Award are each                                                     .  Each Phantom Stock unit, upon becoming
vested, represents a right to receive payment in the form of one (1) share of
Common Stock.  Each tandem Dividend
Equivalent represents a right to receive cash payments equivalent to the amount
of cash dividends declared and paid on one (1) share of Common Stock after the
Date of Grant and before the Dividend Equivalent expires.  Phantom Stock units and Dividend Equivalents
are used solely as units of measurement, and are not shares of Common Stock and
the Grantee is not, and has no rights as, a shareholder of the Corporation by
virtue of this Award.


 


Section 2.              Vesting of Phantom
Stock Units.  The
specified percentage of the Phantom Stock units subject to this Award, and not
previously forfeited, shall vest, with such percentage considered satisfied to
the extent such Phantom Stock units have previously vested, as follows:


 


(a)           Upon Grantee remaining continuously employed by the
Corporation, including Subsidiaries, through the specified anniversary of the
Date


 


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of
Grant (each a “Vesting Date”),  with respect to the percentage of Phantom Stock units set forth next to
such date:


 


	
  Vesting Percentage

  	
   

  	
  Anniversary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  33-1/3%

  	
   

  	
  1st

  	
   

  
	
  66-2/3%

  	
   

  	
  2nd

  	
   

  
	
  100%

  	
   

  	
  3rd

  	
   

  



 


For
purposes of vesting under this Section 2(a), if such employment terminates
upon Retirement, which is defined as termination at a time when Grantee has
attained age 55 and has at least five years of vesting service under the Duke
Energy Retirement Cash Balance Plan or Cinergy Corp. Non-Union Employees’
Pension Plan, or under another retirement plan of the Corporation or Subsidiary
which plan the Committee, or the delegatee, in its sole discretion, determines
to be the functional equivalent of the Duke Energy Retirement Cash Balance Plan
or Cinergy Corp. Non-Union Employees’ Pension Plan, then Grantee’s employment
shall be considered to continue, with continued vesting under this Section 2(a),
unless the Committee or its delegatee, in its sole discretion, determines that
Grantee is in violation of any obligation identified in Section 3, in
which case any such Phantom Stock units not previously vested, or vested by
application of the following sentence shall be forfeited, or unless the Grantee
dies, in which case the Phantom Stock units subject to this Award shall vest in
accordance with the following sentences. 
If such employment terminates (i) as the result of Grantee’s death
or (ii) as the result of Grantee’s permanent and total disability within
the meaning of Code Section 22(e)(3), all Phantom Stock units subject to
this Award, which units have not previously been forfeited or vested,
immediately shall become fully vested. 
If such employment terminates (i) as the result of termination of
such employment by the Corporation, or employing Subsidiary, other than for
cause, as determined by the Committee or its delegatee or (ii) as the
direct and sole result, as determined by the Committee or its delegatee, in its
sole discretion, of the divestiture of assets, a business or a company, by the
Corporation or a Subsidiary, the Phantom Stock units subject to this Award
shall vest at such vesting percentage determined by the Committee or its
delegatee, in its sole discretion, by prorating from the above schedule to
reflect only that portion of the period beginning on the Date of Grant and
ending with the third (3rd) anniversary of the Date of Grant during
which such employment continued while Grantee was entitled to payment of
salary, and any such Phantom Stock units not then or previously vested shall be
forfeited.


 


Unless
the Grantee would satisfy the definition of Retirement upon termination of
employment (i.e., Grantee is “Retirement-eligible”)
on the Date of Grant or could become Retirement-eligible during the vesting
period, in the event that at a time when vesting would otherwise occur under
this Section 2(a) Grantee is on an employer-approved, personal leave
of absence, then, unless prohibited by law, vesting shall be postponed and
shall not occur unless and until Grantee returns to active service in
accordance with the terms of the approved personal leave of 


 


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absence
and before January 14 of the calendar year immediately following the
calendar year in which the leave commenced. 
In the event Grantee does not return to active service from such leave
of absence prior to January 14 of the calendar year immediately following
the calendar year in which the leave commenced, any Phantom Stock units covered
by this Award that were not vested as of the commencement of such leave shall
be immediately forfeited (as if Grantee terminated employment for purposes of Section 4
hereof).


 


(b)           100%, if, following the occurrence of
a Change in Control and before the second anniversary of such occurrence, such
employment is terminated involuntarily, and not for cause, by the Corporation,
or employing Subsidiary, as determined by the Committee or its delegatee in its
sole discretion.


 


Section 3.              Violation of Grantee Obligation.  In consideration of the continued vesting
opportunity provided under Section 2 following the termination of Grantee’s
continuous employment by the Corporation, including Subsidiaries, due to
Retirement, Grantee agrees that during the period beginning with such
termination of employment and ending with the third anniversary of the Date of
Grant (“Restricted Period”), Grantee shall not (i) without the prior
written consent of the Corporation, or its delegatee, become employed by, serve
as a principal, partner, or member of the board of directors of, or in any
similar capacity with, or otherwise provide service to, a competitor, to the
detriment of the Corporation or any Subsidiary, (ii) violate any of
Grantee’s other noncompetition obligations, or any of Grantee’s nonsolicitation
or nondisclosure obligations, to the Corporation or any Subsidiary; or (iii) except
as required by subpoena or other legal process (in which event the Grantee will
give the Chief Legal Officer of the Corporation prompt notice of such subpoena
or other legal process in order to permit the Corporation or any affected
individual to seek appropriate protective orders), publish or provide any oral
or written statements about the Corporation or any Subsidiary, any of the
Corporation’s or any Subsidiary’s current or former officers, executives,
directors, employees, agents or representatives or any initiative, program or
policy of the Corporation or any Subsidiary relating to any matter whatsoever
that are disparaging, slanderous, libelous or defamatory, or that disclose
private or confidential information about their business affairs, or that
constitute an intrusion into their private lives, or that give rise to
unreasonable publicity about their private lives, or that place them in a false
light before the public, or that constitute a misappropriation of their name or
likeness.  The noncompetition obligations
of clause (i) of the preceding sentence shall be limited in scope and
shall be effective only with respect to competition with the Corporation or any
Subsidiary in the businesses of: 
production, transmission, distribution, or retail or wholesale marketing
or selling of electricity; resale or arranging for the purchase or for the
resale, brokering, marketing, or trading of electricity or derivatives thereof;
energy management and the provision of energy solutions; development and
management of fiber optic communications systems; development and operation of
power generation facilities, and sales and marketing of electric power,
domestically and abroad; and any other business in 


 


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which the Corporation, including
Subsidiaries, is engaged at the termination of Grantee’s continuous employment
by the Corporation, including Subsidiaries; and within the following
geographical areas (i) any country in the world where the Corporation,
including Subsidiaries, has at least US$25 million in capital deployed as of
termination of Grantee’s continuous employment by Corporation, including
Subsidiaries; (ii) the continent of North America; (iii) the United
States of America and Canada; (iv) the United States of America; (v) the
states of North Carolina, South Carolina, Virginia, Georgia, Florida, Texas,
California, Massachusetts, Illinois, Michigan, New York, Colorado, Oklahoma and
Louisiana; (vi) the states of North Carolina, South Carolina, Texas,
Colorado, Ohio, Kentucky, and Indiana; and (vii) any state or states with
respect to which was conducted a business of the Corporation, including
Subsidiaries, which business constituted a substantial portion of Grantee’s
employment.  The Corporation and Grantee
intend the above restrictions on competition in geographical areas to be
entirely severable and independent, and any invalidity or enforceability of
this provision with respect to any one or more of such restrictions, including
areas, shall not render this provision unenforceable as applied to any one or
more of the other restrictions, including areas.  If any part of this provision is held to be
unenforceable because of the duration, scope or area covered, the Corporation
and Grantee agree to modify such part, or that the court making such holding
shall have the power to modify such part, to reduce its duration, scope or
area, including deletion of specific words and phrases, i.e., “blue penciling”,
and in its modified, reduced or blue pencil form, such part shall become
enforceable and shall be enforced. 
Nothing in Section 3 shall be construed to prohibit Grantee from
being retained during the Restricted Period in a capacity as an attorney
licensed to practice law, or to restrict Grantee from providing advice and
counsel in such capacity, in any jurisdiction where such prohibition or
restriction is contrary to law.


 


Section 4.              Forfeiture.  Any
Phantom Stock unit subject to this Award shall be forfeited upon the
termination of Grantee’s continuous employment by the Corporation, including
Subsidiaries, from the Date of Grant, except to the extent otherwise provided
in Section 2.  Any Dividend
Equivalent subject to this Award shall expire at the time the unit of Phantom
Stock with respect to which the Dividend Equivalent is in tandem (i) is
vested and paid, or deferred, or (ii) is forfeited.


 


Section 5.              Dividend
Equivalent Payments.  Payments
with respect to any Dividend Equivalent subject to this Award shall be paid in
cash to the Grantee within 60 days after the time cash dividends are declared
and paid with respect to the Common Stock on or after the Date of Grant and
before the Dividend Equivalent expires, but in no event later than the calendar
year in which the dividends are declared and paid.  However, should the timing of a particular
payment under Section 6 to the Grantee in shares of Common Stock in
conjunction with the timing of a particular cash dividend declared and paid on
Common Stock be such that the Grantee receives such shares without the right to
receive such dividend and the Grantee would not otherwise be entitled to 


 


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payment
under the expiring Dividend Equivalent with respect to such dividend, the
Grantee, nevertheless, shall be entitled to such payment.  Dividend Equivalent payments shall be subject
to withholding for taxes. Any required income tax withholdings in respect of
Dividend Equivalents attributable to Phantom Stock units shall be satisfied by
reducing the cash payment in respect of the required withholding amount, unless
the Committee, or its delegatee, in its discretion, requires Grantee to satisfy
such tax obligation by other payment to the Corporation.


 


Section 6.              Payment of Phantom Stock Units.  Payment of Phantom Stock units
subject to this Award shall be made to the Grantee as soon as practicable
following the time such units become vested in accordance with Section 2
but in no event later than 60 days following such vesting, except to the extent
deferred by Grantee in accordance with such procedures as the Committee, or its
delegatee, may prescribe from time to time or except to the extent required to
avoid accelerated taxation and/or tax penalties under Section 409A of the
Code.  To the extent that Grantee would
satisfy the definition of Retirement upon termination of employment (i.e., Grantee is “Retirement-eligible”) on the Date of Grant
or could become Retirement-eligible during the vesting period, or the Grantee’s
right to receive payment of the Phantom Stock units otherwise constitutes a “deferral
of compensation” within the meaning of Section 409A of the Code, then
notwithstanding the first sentence of this Section 6, except in the event
that the Grantee’s employment terminates as a result of death, payment of
vested Phantom Stock units subject to this Award shall be made to the Grantee
in three equal installments, with each installment due within 60 days following
the applicable Vesting Date as provided in Section 2(a), except to the
extent deferred by Grantee as provided herein. 
Payment (or deferrals, as applicable) shall be subject to withholding
for taxes.  Payment shall be in the form
of one (1) share of Common Stock for each full vested unit of Phantom
Stock and any fractional vested unit of Phantom Stock shall be made in a cash
amount equal in value to the shares of Common Stock that would otherwise be
paid, valued at Fair Market Value on the date the respective Phantom Stock
units became vested, or if later, payable. 
Notwithstanding the foregoing, the number of shares of Common Stock that
would otherwise be paid or deferred (valued at Fair Market Value on the date
the respective unit of Phantom Stock became vested, or if later, payable) shall
be reduced by the Committee, or its delegatee, in its sole discretion, to fully
satisfy tax withholding requirements, unless the Committee, or its delegatee,
in its discretion requires Grantee to satisfy such tax obligation by other
payment to the Corporation.  In the event
that payment, after any such reduction in the number of shares of Common Stock
to satisfy withholding for tax requirements, would be less than ten (10) shares
of Common Stock, then, if so determined by the Committee, or its delegatee, in
its sole discretion, payment, instead of being made in shares of Common Stock,
shall be made in a cash amount equal in value to the shares of Common Stock
that would otherwise be paid, valued at Fair Market Value on the date the
respective Phantom Stock units became vested, or if later, payable.


 


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Section 7.              No Employment
Rights.  Nothing in this Agreement or in the Plan
shall confer upon the Grantee the right to continued employment by the
Corporation or any Subsidiary, or affect the right of the Corporation or any
Subsidiary to terminate the employment or service of the Grantee at any time
for any reason.


 


Section 8.              Nonalienation.  The Phantom Stock units and
Dividend Equivalents subject to this Award are not assignable or transferable
by the Grantee.  Upon any attempt to
transfer, assign, pledge, hypothecate, sell or otherwise dispose of any such
Phantom Stock unit or Dividend Equivalent, or of any right or privilege
conferred hereby, or upon the levy of any attachment or similar process upon
such Phantom Stock unit or Dividend Equivalent, or upon such right or
privilege, such Phantom Stock unit or Dividend Equivalent or right or
privilege, shall immediately become null and void.


 


Section 9.              Determinations.  Determinations by the Committee,
or its delegatee, shall be final and conclusive with respect to the
interpretation of the Plan and this Agreement.


 


Section 10.            Governing Law.  The validity and construction of
this Agreement shall be governed by the laws of the state of Delaware
applicable to transactions taking place entirely within that state.


 


Section 11.            Conflicts with Plan, Correction
of Errors, Section 409A and Grantee’s Consent.  In the event that any provision
of this Agreement conflicts in any way with a provision of the Plan, such Plan
provision shall be controlling and the applicable provision of this Agreement
shall be without force and effect to the extent necessary to cause such Plan
provision to be controlling.  In the
event that, due to administrative error, this Agreement does not accurately
reflect a Phantom Stock Award properly granted to Grantee pursuant to the Plan,
the Corporation, acting through its Executive Compensation and Benefits
Department, reserves the right to cancel any erroneous document and, if
appropriate, to replace the cancelled document with a corrected document.  It is the intention of the Corporation and
the Grantee that this Award not result in unfavorable tax consequences to
Grantee under Code Section 409A. 
Accordingly, Grantee consents to such amendment of this Agreement as the
Corporation may reasonably make in furtherance of such intention, and the
Corporation shall promptly provide, or make available to, Grantee a copy of any
such amendment.


 


To the extent applicable, it
is intended that this Agreement comply with the provisions of Section 409A
of the Code and that this Award not result in unfavorable tax consequences to
Grantee under Section 409A of the Code. 
This Agreement will be administered and interpreted in a manner
consistent with this intent, and any provision that would cause this Agreement
to fail to satisfy Section 409A of the Code will have no force and effect
until amended to comply therewith (which amendment may be retroactive to the
extent permitted by 


 


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Section 409A
of the Code).  The Corporation and the
Grantee agree to work together in good faith in an effort to comply with Section 409A
of the Code including, if necessary, amending this Agreement based on further
guidance issued by the Internal Revenue Service from time to time, provided
that the Corporation shall not be required to assume any increased economic
burden.  Notwithstanding anything
contained herein to the contrary, to the extent required in order to avoid
accelerated taxation and/or tax penalties under Section 409A of the Code,
the Grantee shall not be considered to have terminated employment with
Corporation for purposes of this Agreement and no payments shall be due to him
under this Agreement which are payable upon his termination of employment until
he would be considered to have incurred a “separation from service” from the
Corporation within the meaning of Section 409A of the Code.  To the extent required in order to avoid
accelerated taxation and/or tax penalties under Section 409A of the Code,
amounts that would otherwise be payable and benefits that would otherwise be
provided pursuant to this Agreement during the six-month period immediately
following the Grantee’s termination of employment shall instead be paid within
60 days following the first business day after the date that is six months
following his termination of employment (or upon his death, if earlier).  In addition, for purposes of this Agreement,
each amount to be paid or benefit to be provided to the Grantee pursuant to this
Agreement shall be construed as a separate identified payment for purposes of Section 409A
of the Code.


 


Section 12.            Compliance with Law.  The Corporation shall make reasonable
efforts to comply with all applicable federal and state securities laws
applicable to the Plan and this Award; provided, however, notwithstanding any
other provision of this Award, the Corporation shall not be obligated to
deliver any shares of Common Stock pursuant to this Award if the delivery
thereof would result in a violation of any such law.


 


Notwithstanding the foregoing,
this Award is subject to cancellation by the Corporation in its sole discretion
unless the Grantee, by not later than                   
    , 2009, has signed a duplicate of this
Agreement, in the space provided below, and returned the signed duplicate to
the Executive Compensation and Benefits Department - Phantom Stock [(STO6E)],
Duke Energy Corporation, P. O. Box 1007, Charlotte, NC 28201-1007, which,
if, and to the extent, permitted by the Executive Compensation and Benefits
Department, may be accomplished by electronic means.


 


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IN WITNESS WHEREOF, the
Corporation has caused this Agreement to be executed and granted in Charlotte,
North Carolina, to be effective as of the Date of Grant.


 


 


	
  ATTEST:

  	
  DUKE ENERGY CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  By:

  	
   

  
	
   

  	
  Corporate Secretary

  	
  Its:

  	
  Chief Executive Officer

  



 


 


Acceptance of Phantom Stock Award


 


IN WITNESS OF Grantee’s
acceptance of this Award and Grantee’s agreement to be bound by the provisions
of this Agreement and the Plan, Grantee has signed this Agreement this           
day of                                           , 2009.


 


 


	
   

  	
   

  
	
   

  	
  Grantee’s Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (print name)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (address)

  
	
   

  	
   

  



 


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