<PAGE>

                                                                   Exhibit 10.BB

                            KEY EMPLOYEE SEVERANCE
                             AGREEMENT AND RELEASE

          This Severance Agreement and Release ("Agreement") is made and entered
into this day of _____________ (the "Effective Date"), by and between DUKE
ENERGY CORPORATION ("Duke"), a North Carolina corporation with its principal
executive offices in Charlotte, North Carolina, and ___________________________
(the "Employee").

                              W I T N E S S E T H:

          WHEREAS, Duke has determined that it is in the best interests of Duke,
its affiliates and its stockholders to assure that Duke will have the continued
undivided time, attention, loyalty and dedication of the Employee,
notwithstanding the possibility or anticipation of a termination of employment;

          WHEREAS, Duke believes it is imperative to diminish the inevitable
distraction of the Employee by virtue of the personal uncertainties and risks
created by any pending or threatened termination of employment and to encourage
the Employee's full undivided time, attention, loyalty, and dedication to Duke
currently and in the event of any pending or threatened termination of
employment; and

          WHEREAS, it is Duke's intention that the Employee be assured of
compensation and benefit arrangements if his or her employment terminates which
are competitive with those of peer executive or management employees of
similarly situated corporations, and the Employee is willing to enter into an
agreement to that end, upon the terms and conditions hereinafter set forth.

          NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

          1.  Term of Agreement. The term of this Agreement (the "Agreement
              -----------------
Term") shall commence on the date first written above (the "Commencement Date")
and shall terminate on ______, in the event a termination of the Employee's
employment shall not have occurred by such date; provided, however, that such
                                                 --------  -------
termination date shall be automatically extended for consecutive one-month
periods effective on the first day of each month (each, a "Renewal Date")
following the Commencement Date unless either party gives written notice to the
other party not less than ten (10) days prior to a Renewal Date of its intention
to terminate the Agreement at the end of the then-current Agreement Term. In the
event a termination of the Employee's employment shall have occurred prior to
the expiration of the Agreement Term, this Agreement will continue in force and
effect until the satisfaction of all of the parties' obligations hereunder.
<PAGE>

          2.  Severance Benefits.
              ------------------

       (a)    General. In the event the Employee's employment by Duke and/or
              -------
any entity that controls, is controlled by, or is under common control with Duke
(a "Duke Affiliate") is terminated during the Agreement Term (so that the
Employee is no longer employed by Duke or any Duke Affiliate), the Employee
shall be entitled to the compensation and termination benefits set forth in this
Section 2; provided, however, that the obligations of Duke under Section 2(c)
           --------  -------
hereof shall be subject to the forfeiture and repayment provisions of Section
3(e) hereof and to the regulations regarding a release of claims under Section
16 hereof. Any lump-sum payments required under this Section 2 will be made by
Duke in cash as soon as practicable after the effective date of the Employee's
termination of employment. This Agreement does not grant the Employee any right
or entitlement to be retained by Duke or any Duke Affiliate and shall not affect
or prejudice the right of Duke or any Duke Affiliate to terminate the employment
of the Employee at any time for any reason, subject to the payment and benefit
provisions of this Section 2. In the event of the termination of Employee's
employment with Duke and all Duke Affiliates, the Employee agrees to immediately
resign all of his positions as an officer or director of Duke and any Duke
Affiliates.

       (b)  Termination on Account of Death, Disability, Cause or Voluntary
            ---------------------------------------------------------------
Quit. In the event that the Employee's employment hereunder is terminated:
----
            (i)   due to the death of the Employee,

            (ii)  due to any mental or physical impairment which prevents the
         Employee from performing the essential functions of his or her position
         with Duke for a period of 180 days during any 12-month period, or which
         has resulted in the Employee's becoming eligible for benefits under any
         long-term disability income program maintained by Duke or any Duke
         Affiliate,

            (iii) for "Cause," which is defined as the occurrence of any one of
         the following (provided the Employee receives written notice from Duke
         identifying the acts or omissions constituting Cause and is given a 30-
         day opportunity to cure, if such acts or omissions are capable of
         cure): (A) a final conviction of a felony or a crime involving moral
         turpitude; (B) an egregious act of dishonesty (including, without
         limitation, theft or embezzlement) in connection with employment, or a
         malicious action by the Employee toward the customers or employees of
         Duke or any Duke Affiliate; (C) a violation of the provisions of
         Section 3 or Section 4 hereof; or (D) material failure to carry out, or
         malfeasance or gross insubordination in carrying out, reasonably
         assigned duties or instructions consistent with his or her position
         (provided that material failure to carry out reasonably assigned duties
         shall be deemed to constitute Cause only after a finding by Duke's
         Chief Executive Officer of material failure on the part of the
         Employee), or

                                       2
<PAGE>

               (iv)  voluntarily by the Employee,

then the Employee shall be entitled only to salary amounts payable in the normal
course for service through the date of his or her termination of employment and
any rights or payments that have become vested or that are otherwise due in
accordance with the terms of any employee benefit, incentive or compensation
plan or arrangement maintained by Duke or any Duke Affiliate that the Employee
participated in at the time of his or her termination of employment (together,
the "Accrued Rights").

       (c)     Termination by Duke other than for Cause. In the event that the
               ----------------------------------------
Employee's employment is terminated by Duke or the applicable Duke Affiliate
other than as described in clauses (b)(i), (ii) or (iii) above, the Employee
will be paid and entitled to the following:

               (i)   the payments and benefits representing the Employee's
           Accrued Rights;

               (ii)  a lump-sum payment equal to (A) the Employee's annual bonus
           payment earned for any completed bonus year prior to termination of
           employment, if not previously paid, plus (B) a pro-rata amount of the
           Employee's target bonus under any Bonus Plan (as defined below) for
           the year in which the termination occurs, determined as if all
           program goals had been met (the "Target Bonus"), pro-rated based on
           the number of days of service during the bonus year occurring prior
           to termination of employment;

               (iii)  a lump-sum payment equal to two (2) times the sum of the
           Employee's then-current Base Salary and Target Bonus;

               (iv)   continued coverage for the Severance Period (as defined
           below) under the medical and dental (but not medical spending account
           or employee assistance) and basic life insurance plans that the
           Employee participated in at the time of his or her termination, or
           their equivalent, under the same terms and at the same cost to the
           Employee as though the Employee had not terminated employment;
           provided, however, that in the event the Employee becomes covered or
           --------  -------
           eligible for coverage under substitute medical or life insurance
           plans of another employer during this period, subject to applicable
           requirements of the Consolidated Omnibus Budget Reconsiliation Act of
           1985, as amended and the regulations thereunder ("COBRA"), Duke will
           no longer be obligated to provide such coverage to the Employee under
           this Section 2(c)(iv); and, provided, further, that in lieu of
                                       --------  -------
           providing medical coverage (as described above) hereunder, Duke may
           make a lump-sum payment to the Employee in an amount equal to the
           aggregate cost of such coverage for the Severance Period, based on
           the premium costs being utilized for the provision of such coverage
           to former employees under COBRA at the time of the Employee's
           termination of employment, and/or in lieu of providing basic life
           insurance coverage hereunder, Duke may make a lump-sum payment to the
           Employee in an amount equal to the anticipated cost of such coverage
           for the Severance Period, based on Duke's assumed costs for such

                                       3
<PAGE>

           coverage for internal accounting purposes at the time of the
           Employee's termination of employment;

               (v)    a lump-sum payment equal to the present value (determined
           based on a six (6) percent interest rate assumption and, in the case
           of any pension plan accrual, the applicable mortality table for
           calculating optional forms of benefits under such plan) of any
           employer contribution (other than a contribution under section 401(k)
           of the Internal Revenue Code of 1986, as amended), benefit accrual or
           employer-financed account allocation that would have been made or
           accrued during the Severance Period under any qualified or non-
           qualified pension or savings plan maintained by Duke or any Duke
           Affiliate in which the Employee participated at the time of his or
           her termination, determined using the Employee's Base Salary and
           Target Bonus (if relevant) at the time of termination and assuming
           the maximum elective deferral by the Employee permitted by such
           plans, if applicable;

               (vi)   notwithstanding the terms of any award agreement or plan
           document to the contrary, continued vesting of any long term
           incentive awards (excluding Chairman's Awards), including awards of
           stock options or restricted stock, held by the Employee at the time
           of his or her termination of employment that are not vested or
           exercisable on such date, in accordance with their terms as if the
           Employee's employment had not terminated, for the duration of the
           Severance Period, with any options or similar rights to remain
           exercisable (to the extent exercisable at the end of the Severance
           Period) for a period of 90 days following the close of the Severance
           Period, but not beyond the maximum original term of such options or
           rights; and

               (vii)  in the event that the Employee would have satisfied the
           eligibility requirements of any retiree medical plan or program
           maintained by Duke or any Duke Affiliate generally for its retirees
           (a "Retiree Plan") within two years after the date of his or her
           termination of employment, the provision of such retiree medical
           benefits to the Employee from and after the date he or she would have
           satisfied such requirements (assuming continued employment) on a
           basis substantially equivalent to the retiree medical benefits
           provided generally under the Retiree Plan, subject to such terms and
           conditions and requirements for participation as apply under the
           Retiree Plan from time to time and as such Retiree Plan may be
           amended or terminated by Duke or a Duke Affiliate, as the case may
           be, at any time.

       (d)   Definitions. For purposes of this Agreement, the terms below shall
             -----------
have the following definitions:

             (1)   "Bonus Plan" shall mean any bonus plan, program or
      arrangement in which the Employee participates where bonus payments are
      based upon achievement of performance targets by Duke, a Duke Affiliate,
      any business unit thereof or the Employee.

                                       4
<PAGE>

             (2)   "Base Salary" shall mean the annualized amount of the
      Employee's regular salary during any payroll period reductions for
      elective deferrals or salary reductions but excluding any overtime,
      incentive or other special compensation.

             (3)  "Severance Period" shall be the 24-month period following the
      Employee's termination of employment.

         3.  Restrictive Covenants.
             ---------------------

     (a)     Noncompetition and Nonsolicitation. The Employee agrees that he or
             ----------------------------------
she shall not, during the "Restricted Period" (as defined below), without Duke's
prior written consent, for any reason, directly or indirectly, either as
principal, agent, manager, employee, partner, shareholder, director, officer,
consultant or otherwise (A) become engaged or involved in any business (other
than as a less-than 3% equity owner of any corporation traded on any national,
international or regional stock exchange or in the over-the-counter market) that
competes with Duke or any Duke Affiliate in the business of production,
transmission, distribution or retail or wholesale marketing or selling of
electricity, gathering, processing or transmission of natural gas, resale or
arranging for the purchase or for resale, brokering, marketing or trading of
natural gas, electricity or derivatives thereof, energy management and energy
solution provision, or national or international energy development; or (B)
induce or attempt to induce any customer, client, supplier, employee, agent or
independent contractor of Duke or any Duke Affiliate to reduce, terminate,
restrict or otherwise alter its business relationship with Duke or any Duke
Affiliate. The provisions of this Section 3(a) shall be limited in scope and
effective only within the following geographical areas: (i) any country in the
world where Duke or any Duke Affiliate has $25 million in capital deployed as of
the date of termination; (ii) the Continent of North America; (iii) the United
States of America; and (iv) the states of North Carolina, South Carolina,
Virginia, Georgia, Florida, Texas, California, Massachusetts, Illinois, Michigan
and New York. The parties intend the above geographical areas to be completely
severable and independent, and any invalidity or unenforceability of this
Agreement with respect to any one area shall not render this Agreement
unenforceable as applied to any one or more of the other areas.

     (b)  Restricted Period. For purposes hereof, the "Restricted Period" shall
          -----------------
be the period of the Employee's employment during the Agreement Term and, in the
event of a termination of the Employee's employment that is covered by Section
2(c) hereof, the twelve-month period following the such termination of
employment.

     (c)  Severability. If any provision or part of this Section 3 is held to be
          ------------
unenforceable because of the duration of such provision or the area covered
thereby, the parties hereto agree to modify such provision, or that the court
making such determination shall have the power to modify such provision, to
reduce the duration or area of such provision or both, or to delete specific
words or phrases therefrom ("blue-penciling"), and in its reduced or blue-
penciled form, such provision shall then be enforceable and shall be enforced.
The parties intend the above restrictions on competition to be completely
severable and independent, and any invalidity

                                       5
<PAGE>

or unenforceability of any one or more of such restrictions shall not render
invalid or unenforceable any one or more of the other restrictions.

     (d)  Enforcement. The Employee acknowledges that Duke may have no adequate
          -----------
means to protect its rights under this Section 3 other than by securing an
injunction (a court order prohibiting the Employee from violating this
Agreement). The Employee agrees that Duke may enforce this Agreement by
obtaining a preliminary and permanent injunction and any other appropriate
equitable relief in any court of competent jurisdiction. The Employee
acknowledges that the recovery of damages will not be an adequate means to
redress a breach of this Agreement, but nothing in this Section 3 shall prohibit
Duke from pursuing any remedies in addition to injunctive relief, including
recovery of damages and/or any forfeiture or repayment obligations provided for
herein.

     (e)  Forfeitures and Repayments. The Employee agrees that, in the event he
          --------------------------
or she violates the provisions of Section 3(a) hereof during the Restricted
Period, he or she will forfeit and not be entitled to any cash severance
payments or any non-cash benefits or rights (including, without limitation,
stock option rights), other than Accrued Rights, to which he or she would
otherwise be entitled to under Section 2(c) hereof (together, the "Termination
Benefits"). The Employee further agrees that, in the event he or she violates
the provisions of Section 3(a) hereof following the payment or commencement of
any Termination Benefits, (i) he or she will forfeit and not be entitled to any
further Termination Benefits, and (ii) he or she will be obligated to repay to
Duke an amount in respect of the cash payments previously made to him or her
under Section 2(c) hereof (the "Repayment Amount"). The Repayment Amount shall
be determined by aggregating the cash severance payments made to the Employee
under Sections 2(c)(ii), 2(c)(iii),2(c)(iv) and 2(c)(v) hereof, and multiplying
the resulting amount by a fraction, the numerator of which is the number of full
and partial calendar months remaining in the Severance Period at the time of the
violation (rounded to the nearest quarter of a month), and the denominator of
which is twenty-four (24). The Repayment Amount shall be paid to Duke in cash in
a single sum within ten (10) business days after the first date of the
violation, whether or not Duke has knowledge of the violation or has made a
demand for payment. Any such payment made following such date shall bear
interest at a rate equal to six (6) percent. Furthermore, in the event the
Employee violates the provisions of Section 3(a) hereof, and notwithstanding the
terms of any award agreement or plan document to the contrary (which shall be
considered to be amended to the extent necessary to reflect the terms hereof),
the Employee shall immediately forfeit the right to exercise any stock option or
similar rights that are outstanding at the time of the violation, and the
Repayment Amount, calculated as provided above, shall be increased by the amount
of any gains (measured by the difference between the aggregate fair market value
on the date of exercise of shares underlying the stock option or similar right
and the aggregate exercise price of such stock option or similar right) realized
by the Employee upon the exercise of stock options or similar rights within the
one-year period prior to the first date of the violation.

     (f)  Permissive Release. The Employee may request that Duke release him or
          ------------------
her from the restrictive covenants of Section 3(a) hereof upon the occurrence of
the forfeiture and repayment of termination benefits and rights provided for in
Section 3(e) hereof. Duke may, in its sole discretion, grant such a release in
whole or in part or may reject such request and continue to enforce its rights
under this Section 3.

                                       6
<PAGE>

     (g)  Consideration; Survival. The Employee acknowledges and agrees
          -----------------------
that the compensation and benefits provided in this Agreement constitute
adequate and sufficient consideration for the covenants made by the Employee in
this Section 3 and in the remainder of this Agreement. The Employee's
obligations under this Section 3 shall survive any termination of his or her
employment as specified herein.

          4.   Confidentiality. The Employee acknowledges that during the
               ---------------
Employee's employment with Duke or any Duke Affiliate, the Employee will
acquire, be exposed to and have access to, material, data and information of
Duke and the Duke Affiliates and/or their customers or clients that is
confidential, proprietary, and/or a trade secret. At all times, both during and
after the Agreement Term, the Employee shall keep and retain in confidence and
shall not disclose, except as required and authorized in the course of the
Employee's employment with Duke or any Duke Affiliate, to any person, firm or
corporation, or use for his or her own purposes, any of this proprietary,
confidential or trade secret information. For purposes of this paragraph, such
information shall include, but shall not be limited to: sales methods,
information concerning principals or customers, advertising methods, financial
affairs or methods of procurement, marketing and business plans, strategies,
projections, business opportunities, client lists, sales and cost information
and financial results and performance. The Employee acknowledges that the
obligations pertaining to the confidentiality and non-disclosure of information
shall remain in effect for a period of five (5) years after termination of
employment, or until Duke or a Duke Affiliate has released any such information
into the public domain, in which case the Employee's obligation hereunder shall
cease with respect only to such information so released into the public domain.
The Employee's obligations under this Section 4 shall survive any termination of
his or her employment. If the Employee receives a subpoena or other judiciary
process requiring that he or she produce, provide or testify about information
that is confidential property and/or a trade secret, the Employee shall notify
Duke and cooperate fully with Duke in resisting disclosure of confidential
information. Duke at its expense has the right either in the name of the
Employee or in its own name to oppose or move to quash any subpoena or other
legal process directed to the Employee regarding confidential information. If
Duke does not successfully oppose or move successfully to quash any subpoena or
other legal process directed to the Employee after being notified of it by him
or her, he or she shall be free to respond to the subpoena as he or she
determines to be appropriate.

          5.   Post-Employment Obligations.
               ---------------------------

     (a)   Duke Property. All records, files, lists, including, computer
           -------------
generated lists, drawings, documents, equipment and similar items relating to
the business of Duke and the Duke Affiliates which the Employee shall prepare or
receive from Duke or the Duke Affiliates shall remain the sole and exclusive
property of Duke and the Duke Affiliates. Upon termination of the Employee's
employment for any reason, the Employee shall promptly return all property of
Duke or any Duke Affiliate in his or her possession. The Employee further
represents that he or she will not copy or cause to be copied, print out or
cause to be printed out any software, documents or other materials originating
with or belonging to Duke or any Duke Affiliate. The Employee additionally
represents that, upon termination of his or her employment with Duke or a Duke
Affiliate, he or she will not retain in his or her possession any such software,
documents or other materials.

                                       7
<PAGE>

         (b)   Cooperation. The Employee agrees to cooperate with and provide
               -----------
assistance to Duke and the Duke Affiliates and their legal counsel in connection
with any litigation (including arbitration or administrative hearings) or
investigation affecting Duke or any Duke Affiliate, in which, in the reasonable
judgment of the counsel of Duke or any Duke Affiliate, the Employee's assistance
or cooperation is needed. The Employee shall, when requested by Duke or any Duke
Affiliate, provide testimony or other assistance and shall travel at the request
of Duke or any Duke Affiliate in order to fulfill this obligation; provided,
                                                                   --------
however, that, in connection with such litigation or investigation, Duke or the
-------
Duke Affiliate, as the case may be, shall attempt to accommodate the Employee's
schedule, shall provide him or her with reasonable notice in advance of the
times in which his or her cooperation or assistance is needed, and shall
reimburse the Employee for any reasonable expenses incurred in connection with
such matters, as well as for any actual lost wages suffered as a result from
absences from employment.

         6.    Tax Withholding. Duke may withhold from any amounts payable under
               ---------------
this Agreement such federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.

         7.    Notice. Any notices to be given hereunder by either party to the
               ------
other may be effectuated either by personal delivery in writing or by mail,
registered or certified, postage prepaid, with return receipt requested. Mailed
notices shall be addressed to the parties at the following addresses:

If to Duke or any other
Duke Affiliate:               Mr. Richard Priory
                              Chairman, President and CEO
                              Duke Energy Corporation
                              Post Office Box 1006, EC3XB
                              Charlotte, North Carolina 28201-1006

               cc:            Mr. Christopher C. Rolfe
                              Vice President, Corporate Human Resources
                              Duke Energy Corporation
                              Post Office Box 1244, PB04J
                              Charlotte, North Carolina 28201-1244


         8.    Waiver of Breach. The waiver by any party to a breach of any
               ----------------
provision in this Agreement cannot operate or be construed as a waiver of any
subsequent breach by a party. Any waiver or consent from Duke with respect to
any term or provision of this Agreement or any other aspect of the Employee's
conduct or employment shall be effective only in the specific instance and for
the specific purpose for which given and shall not be deemed, regardless of
frequency given, to be a further or continuing waiver or consent. The failure or
delay of Duke at any time or times to require performance of, or to exercise any
of its powers, rights or remedies with respect to, any term or provision of this
Agreement or any other aspect of the Employee's conduct or employment shall in
no manner (except as otherwise expressly provided herein) affect Duke's right at
a later time to enforce any such term or provision.

                                       8
<PAGE>

         9.    Severability. The validity or unenforceability of any particular
               ------------
provision in this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if the invalid or
unenforceable provision were omitted.

         10.   Entire Agreement. Except as otherwise provided herein, this
               ----------------
Agreement covers the entire understanding of the parties with respect to the
subject matter hereof, superseding all prior understandings and agreements
[including, without limitation, the Employment Agreement between the Employee
and Duke dated November 24, 1996, as amended]. No modifications or amendments of
the terms and conditions herein shall be effective unless in writing and signed
by the parties or their respective duly authorized agents.

         11.   Applicability of Change in Control Agreement. Notwithstanding
               --------------------------------------------
anything to the contrary in this Agreement, if a termination of employment by
the Employee shall be covered by a "Change in Control Agreement" (or similar
change in control severance agreement) between the Employee and Duke, the
provisions of such Change in Control Agreement shall be controlling and this
Agreement shall cease to be of any further effect.

         12.   Governing Law. This Agreement shall be interpreted, construed and
               -------------
governed according to the laws of the State of North Carolina, without reference
to conflicts of law principles thereof.

         13.   Successors and Assigns. Neither this Agreement, nor any of the
               ----------------------
parties' respective rights, powers, duties or obligations hereunder, may be
assigned by either party without the prior written consent of the other party.
This Agreement shall be binding upon and inure to the benefit of the Employee
and his or her heirs and legal representatives of Duke and its successors.
Successors of Duke shall include, without limitation, any company or companies
acquiring, directly or indirectly, all or substantially all of the assets of
Duke, whether by merger, consolidation, purchase, lease or otherwise, and such
successor shall thereafter be deemed "Duke" for the purpose hereof.

         14.   Forum Selection. The Employee agrees that any claim against Duke
               ---------------
or any Duke Affiliate arising out of or relating in any way to this Agreement or
to the Employee's employment with Duke or any Duke Affiliate (including without
limitation any claim arising under the federal civil rights statutes) shall be
brought exclusively in the Superior Court of Mecklenburg County, North Carolina,
or the United States District Court for the Western District of North Carolina,
and in no other forum. The Employee hereby consents to the personal and subject
matter of jurisdiction of these courts for the purpose of adjudicating any
claims subject to this forum selection clause. The Employee also agrees that any
dispute of any kind arising out of or relating to this Agreement or to the
Employee's employment (including without limitation any claim arising under the
federal civil rights statutes) shall at the sole election or demand of Duke or
the applicable Duke Affiliate be submitted to final, conclusive and binding
arbitration before and according to the rules then prevailing of the American
Arbitration Association in Mecklenburg County, North Carolina, which election or
demand may be made by Duke or the applicable Duke Affiliate at any time prior to
the last day to answer and/or respond to a summons and/or complaint made by the
Employee. The results of any such arbitration proceeding shall be final and
binding both upon Duke or the applicable Duke Affiliate and upon the Employee,
and shall be subject to judicial confirmation as provided by the Federal

                                       9
<PAGE>

Arbitration Act or the North Carolina Arbitration Act, including specifically
the terms of N.C. Gen. Stat. (S) 1-567.2, which are incorporated herein by
reference.

         15.   Legal Fees. To provide the Employee with reasonable assurance
               ----------
that the purposes of this Agreement will not be frustrated by the cost of
enforcement, Duke shall pay and be solely responsible for reasonable attorneys'
fees and expenses incurred by the Employee as a result of a claim that Duke has
breached or otherwise failed to perform its obligations under this Agreement or
any provision hereof, regardless of which party, if any, prevails in the
contest; provided, however, that Duke shall not be responsible for such fees and
         --------  -------
expenses to the extent incurred in connection with a claim made by the Employee
that the trier of fact in any such contest finds to be frivolous.

         16.   Release of Claims. In consideration of the obligations of Duke
               -----------------
under this Agreement, the Employee agrees to execute and honor the release of
claims in the form attached as Exhibit A hereto upon a termination of employment
that is covered by Section 2(c) hereof. The obligations of Duke under Section
2(c) hereof shall be contingent upon the execution, nonrevocation and continued
compliance by the Employee with this release of claims.

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
_____________.


                         DUKE ENERGY CORPORATION



                         By:_______________________________

                         Title:____________________________


                         EMPLOYEE


                         __________________________

                                       10
<PAGE>

                                   EXHIBIT A
                                   ---------

                   RELEASE OF CLAIMS AND COVENANT NOT TO SUE
                   -----------------------------------------


          This RELEASE OF CLAIMS AND COVENANT NOT TO SUE (the "Release") is
executed and delivered by _____________ (the "Employee") to DUKE ENERGY
CORPORATION ("Duke").

          In consideration of the agreement by Duke to provide the Employee with
the rights, payments and benefits under the Severance Agreement between the
Employee and Duke dated _____________ (the "Severance Agreement"), the Employee
hereby agrees as follows:

          Section 1.  Release and Covenant.  The Employee, of his or her own
                      --------------------
free will, voluntarily releases and forever discharges Duke, its subsidiaries,
affiliates, their directors, officers, employees, agents, stockholders,
successors and assigns (both individually and in their official capacities with
Duke) from, and covenants not to sue or proceed against any of the foregoing on
the basis of, any and all past or present causes of action, suits, agreements or
other claims which the Employee, his or her dependents, relatives, heirs,
executors, administrators, successors and assigns has or may hereafter have from
the beginning of time to the date hereof against Duke upon or by reason of any
matter, cause or thing whatsoever, including, but not limited to, any matters
arising out of his or her employment by Duke and the cessation of said
employment, and including, but not limited to, any alleged violation of the
Civil Rights Acts of 1964 and 1991, the Equal Pay Act of 1963, the Age
Discrimination in Employment Act of 1967, the Rehabilitation Act of 1973, the
Older Workers Benefit Protection Act of 1990, the Americans with Disabilities
Act of 1990, the Family and Medical Leave Act of 1993 and any other federal,
state or local law, regulation or ordinance, or public policy, contract or tort
law having any bearing whatsoever on the terms and conditions of employment or
termination of employment. This Release shall not, however, constitute a waiver
of any of the Employee's rights under the Severance Agreement.

          Section 2.  Due Care.  The Employee acknowledges that he or she has
                      --------
received a copy of this Release prior to its execution and has been advised
hereby of his or her opportunity to review and consider this Release for 21 days
prior to its execution.  The Employee further acknowledges that he or she has
been advised hereby to consult with an attorney prior to executing this Release.
The Employee enters into this Release having freely and knowingly elected, after
due consideration, to execute this Release and to fulfill the promises set forth
<PAGE>

herein. This Release shall be revocable by the Employee during the 7-day period
following its execution, and shall not become effective or enforceable until the
expiration of such 7-day period. In the event of such a revocation, the Employee
shall not be entitled to the consideration for this Release set forth above.

          Section 3.  Nonassignment of Claims.  The Employee represents and
                      -----------------------
warrants that there has been no assignment or other transfer of any interest in
any claim which the Employee may have against Duke. The Employee agrees to
indemnify and hold Duke harmless from any liability, claims, demands, damages,
costs, expenses and attorneys' fees incurred as a result of any person asserting
such assignment or transfer of any rights or claims under any such assignment or
transfer. It is the intention of the Employee and Duke that this indemnity does
not require payment as a condition precedent to recovery by Duke from the
Employee under this indemnity.

          Section 4.  Reliance by Employee.  The Employee acknowledges that, in
                      --------------------
his or her decision to enter into this Release, he or she has not relied on any
representations, promises or agreements of any kind, including oral statements
by representatives of Duke, except as set forth in this Release.

          This RELEASE OF CLAIMS AND COVENANT NOT TO SUE is executed by the
Employee and delivered to Duke on _____________________.



                         EMPLOYEE


                         ____________________________________________________



           [not to be signed upon execution of Severance Agreement]

                                      A-2