CONSULTING AGREEMENT




	
   

  










This
Consulting Agreement (the “Agreement”), effective as of January 1, 2013, is
made by and between Duke Energy Corporation (“Duke Energy”) and John R.
McArthur (the “Consultant”) (collectively referred to herein as the “Parties”
and individually as a “Party”).


1.         
Scope.  The Consultant will provide advice and consulting services on
matters relating to legal, regulatory and legislative policy issues advanced by
Duke Energy before the North Carolina General Assembly and the North Carolina
Utilities Commission (the “NCUC”), as well as on methods and procedures for
maintaining good relationships with government officials in North Carolina, as
may be requested from time to time by the Executive Vice President for
Regulated Utilities of Duke Energy (the “Services”).  The Consultant will
perform all Services requested by Duke Energy in a competent manner using
reasonable care and diligence and will only interact or correspond with the
NCUC and other government or regulatory officials regarding Duke Energy at the
request, and with the advance permission, of Duke Energy.  The Consultant will
predominantly provide the Services in Raleigh, North Carolina, but may be
required to travel from time to time in order to perform the Services.


2.          
Status as an Independent Contractor.  The relationship of the Consultant
with Duke Energy will at all times be that of an independent contractor and not
an employee or agent.  The Parties acknowledge and agree that Duke Energy shall
not exercise general supervision or control over the time, place or manner in
which the Consultant provides the Services.  The Consultant will have no
authority to (i) bind Duke Energy, its subsidiaries, affiliates or related
entities, or (ii) act, incur any liabilities or obligations, or make any
representations or warranties on its or their behalf.  Nothing in this
Agreement will be construed to create a partnership, joint venture, agency or
employment relationship between Duke Energy and the Consultant.  The Parties
acknowledge and agree that the Consultant will not be required to provide more
than 40 hours of Services pursuant to this Agreement in any calendar month.  


3.            
Fees and Reimbursement.  During the term of the Agreement, Duke Energy
will pay the Consultant a retainer, payable in arrears, of $14,880 per month,
for Services requested by Duke Energy and provided by the Consultant.  The
Consultant will return all Duke Energy property to Duke Energy at the end of
the Consulting Term (as defined below).  Duke Energy also will reimburse the
Consultant for actual, necessary, and reasonable out-of-pocket business-related
expenses that the Consultant incurs providing the Services requested by Duke
Energy.  On or before the first day of each month, the Consultant agrees to
submit to Duke Energy his invoice for any reasonable out of pocket businesses
expenses incurred by Consultant during the prior month, with such business
expenses to be documented on a form prescribed by Duke Energy and substantiated
by receipts in a manner consistent with Duke Energy’s policies and Duke Energy
agrees to pay Consultant's invoice for reasonable expenses no later than the
thirtieth (30th) day thereafter.  The Parties agree that, except as
specifically set forth in this Section 3, the Consultant shall be entitled to
no compensation or benefits from Duke Energy with respect to the Services,
shall not be eligible to participate in any employee benefit plans of Duke
Energy and its subsidiaries and affiliates in connection with providing
Services and shall not be credited with service or age credit for purposes of
eligibility, vesting or benefit accrual under any employee benefit plan of Duke
Energy or its subsidiaries or affiliates.


4.       
Duration and Termination.  This Agreement will commence on January 1,
2013 (“Effective Date”) and expire/terminate on December 31, 2014, unless
earlier terminated pursuant to the terms of this Agreement (the “Consulting
Term”).  This Agreement will be terminated immediately upon the death or incapacity
of the Consultant, and may be terminated (a) immediately, by the Consultant for
any reason, at any time, upon the provision of written notice; and (b) by Duke
Energy with Cause (as defined below).  In the event of the termination of this
Agreement, as of the time of termination, this Agreement will be of no further
force or effect, and no Party will have any liability to the other Party,
except that (a) Section Three (solely with respect to any fees or expenses of
Consultant for Services accrued or incurred on or prior to the date of
termination but not yet paid or reimbursed in full by Duke Energy in accordance
therewith) and Sections Seven, Eight, Nine and Ten will survive such
termination in accordance with their terms (or, if no survival period is
expressly set forth therein, indefinitely); and (b) nothing herein will relieve
any party from liability for any willful breach of this Agreement prior to its
termination.  For the purposes of this Section 4, “Cause” shall mean (i) a
material failure by the Consultant to carry out, or malfeasance or gross
insubordination in carrying out, reasonably assigned duties or instructions
consistent with the Services set forth in this Agreement, (ii) the final
conviction of the Consultant of a felony or crime involving moral turpitude,
(iii) an egregious act of dishonesty by the Consultant (including, without
limitation, theft or embezzlement) in connection with providing Services, or a
malicious action by the Consultant toward the customers or employees of Duke Energy
or any of its affiliates, (iv) a material breach by the Consultant of the Duke
Energy Code of Business Ethics or any other applicable code of conduct, or (v)
the failure of the Consultant to cooperate fully with governmental
investigations involving Duke Energy and/or any of its affiliates.


5.             
Taxes and Compliance.  As an independent contractor, the Consultant is
responsible for all taxes associated with any payment he receives from Duke
Energy pursuant to this Agreement and will indemnify Duke Energy and its
subsidiaries, affiliates and related entities and hold them harmless in any
proceeding, lawsuit, claim or demand pertaining to such taxes.  The Consultant
also will comply with all applicable federal, state, and/or local laws in performing
the Services requested by Duke Energy.  If the Consultant performs the Services
requested by Duke Energy at one of Duke Energy’s facilities or offices, the
Consultant will comply with the policies and procedures of such facilities or
offices that apply to other consultants or contractors of Duke Energy who
perform work on Duke Energy’s premises.  In addition, the Consultant
acknowledges that, while he is providing the Services, he will be subject to
the Duke Energy Code of Business Ethics and all other ethical standards and
codes of conduct applicable to attorneys providing legal advice.


6.               
Conflicting Engagements.  During the term of this Agreement, the
Consultant will not accept employment with or perform services or work for a
person or entity that Duke Energy reasonably determines, in its sole
discretion, to be adverse to the interests of Duke Energy or that of its
subsidiaries, affiliates or related entities.  If Duke Energy determines that
the Consultant is in breach of this provision of the Agreement, it will provide
written notice to the Consultant as soon as is practicable.  If the Consultant
fails to discontinue the conflicting employment, work or services within ten
(10) days of the date of said written notice, this Agreement will terminate as
of the date specified by Duke Energy in that notice, which date will be no
earlier than the date of the notice.  For the avoidance of doubt, this Section
6 does not limit the Consultant’s obligations pursuant to Sections 6 and 7 of
the Separation and Settlement Agreement by and between Duke Energy and the
Consultant, dated as of July 10, 2012 (the “Separation Agreement”).


7.              Confidentiality.  The
Consultant may acquire or have access to confidential and proprietary
information in performing the Services requested by Duke Energy.  That
confidential and proprietary information may include, but is not limited to,
information relating to trade secrets, inventions, products, processes,
machinery, apparatus, prices, discounts, costs, business affairs, future plans
or technical data belonging to Duke 







 




 










 








 




 








Energy, those with
whom Duke Energy has contracted with regarding such information, and/or the
subsidiaries, affiliates or related entities of Duke Energy (the “Confidential
Information”). The Consultant will not, at any time, without Duke Energy’s
prior written consent, directly or indirectly, use or disclose any Confidential
Information for his benefit or the benefit of any other person or entity.   The
Consultant’s obligations under this provision will survive the expiration or
termination of this Agreement and are in addition to, and not in limitation of
or preemption of, all other obligations of confidentiality which the Consultant
may have to Duke Energy and/or its subsidiaries, affiliates or related
entities.  The Consultant will return all Confidential Information to Duke
Energy at the end of the Consulting Term.  


The
Consultant acknowledges that the Confidential Information is and at all times
remains the sole and exclusive property of Duke Energy and/or its affiliates
and that Duke Energy and/or its affiliates has the exclusive right, title, and
interest to its Confidential Information.  No right or license, by implication
or otherwise, is granted by Duke Energy as a result of the disclosure of
Confidential Information under this Agreement.  Duke Energy reserves the right
at any time in its sole discretion, for any reason or no reason, to refuse to
provide any further access to and to demand the return of the Confidential
Information.  For the avoidance of doubt, this Section 7 does not limit the
Consultant’s obligations with respect to Section 7 of the Separation Agreement.


8.       
Restrictive Covenants.  The restrictive covenants set forth in Section 7
of the Separation Agreement, including, without limitation, the covenant not to
compete, shall remain in full force and effect until the later of (i) the date
they would expire absent this Agreement or (ii) the date the Consulting Term
ends.  For purposes of clarity, the Parties acknowledge that statements by the
Consultant solely to executive officers of Duke Energy shall not result in a
violation of the non-disparagement provision in Section 6 of the Separation
Agreement.


9.        
Indemnity.  The Consultant will indemnify and hold Duke Energy and its
subsidiaries, affiliates and related entities harmless from any and all claims,
demands, suits, actions, causes of action, damages, losses, injuries, costs and
expenses, including, but not limited to, attorneys’ fees, payments, judgments,
and any and all liabilities arising, or alleged to arise, in whole or in part,
from or out of, in any manner whatsoever, the willful misconduct or gross
negligence of the Consultant in performing the Services requested by Duke
Energy pursuant to this Agreement.  Subject to the preceding sentence, Duke
Energy agrees to indemnify and hold the Consultant harmless with respect to the
results of any action taken based on the advice of the Consultant, including
all losses and damages resulting from any legal or regulatory action.  This
provision will continue in full force and effect notwithstanding expiration or
termination of this Agreement.  


10.            Miscellaneous. 
 


 


a)       Successors. 
This Agreement will be binding on the Parties and their respective successors
and permitted assigns.  Any assignment of this Agreement, in whole or in part,
by the Consultant without Duke Energy’s prior written consent (in its sole
discretion) will be null and void.  Nothing in this Agreement, express or
implied, is intended or will be construed to confer upon any person other than
the Parties any right, remedy or claim under or by reason of this Agreement.


 


b)        Relief. 
The Parties agree that the other would be damaged irreparably in the event any
of the provisions of Sections Seven and Eight were not performed in accordance
with their specific terms or were otherwise breached and that money damages
would be an inadequate remedy for any such non-performance or breach.  The
Parties acknowledge and agree that, in the event either party breaches or
threatens to breach any provision of this Agreement, the non-breaching party
will be entitled to seek any and all equitable and legal relief provided by
law, specifically including immediate and permanent injunctive relief to
prevent any breach or threatened breach of any of such provisions and to
enforce such provisions specifically (without posting a bond or other
security).  The Parties hereby waive any claim that the other has an adequate
remedy at law.  The Parties agree that the foregoing relief will not be
construed to limit or otherwise restrict their ability to pursue any other
remedy provided by law, including the recovery of any actual, compensatory or
punitive damages.  


 


c)          Notices. 
All notices, requests, demands, consents and other communications under this
Agreement will be in writing and will be delivered by hand, nationally
recognized overnight courier, or registered or certified mail, return receipt
requested, first class postage prepaid, addressed as follows:


 









 




 










 








 




 








If
to Duke Energy:  


 


	
  Address:

  	
  Duke Energy Corporation

  550 South Tryon Street

  Charlotte, North Carolina 28202

   

  
	
  Attention:

  	
  Corporate Secretary

  




 


If to the Consultant: 



At the most recent
address in Duke Energy’s records.


 


a)             Applicable Law.  This
Agreement will be governed by, construed, and enforced in accordance with the
procedural and substantive laws of the State of North Carolina.   Any dispute,
controversy or claim arising out of or relating to this Agreement will be
submitted to the state or federal court in North Carolina. 


 


b)             Severability.  If any
term or provision of this Agreement is deemed to be invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
terms and conditions of this Agreement will remain in full force and effect. 
If any term or provision of this Agreement is deemed to be excessively broad in
scope, it will be construed by limiting and reducing it, so as to be
enforceable to the extent compatible with the applicable law then in effect.  


 


c)              Waiver of Breach.  No
delay or omission by a Party to exercise any right under this Agreement will be
construed as a waiver unless the waiver is in writing.  No waiver by either
Party of any breach of this Agreement by the other Party will be construed as a
waiver of any subsequent breach.  


 


d)              Amendment.  This
Agreement may not be modified except by a written document signed by both
Parties.  This Agreement constitutes the entire agreement between the Parties
and supersedes all previous communications, representations, and agreements,
oral or written, between the Parties with respect to the subject matter of this
Agreement.  


 


e)              Counterparts.  This
Agreement may be executed in counterparts, each of which will be an original,
but all of which together will constitute one and the same agreement.  












 




 










 








 




 








 


IN WITNESS
THEREOF, the Consultant has hereunto set his hand, and Duke Energy has caused
these presents to be executed in its name and on its behalf.


CONSULTANT                                                                       
DUKE ENERGY CORPORATION


/s/
John R. McArthur                                                                 /s/
Jennifer L. Weber___________________________


Executive Vice President 


and Chief Human Resources Officer


 


December
28, 2012                                                                   1/4/13_______________________________________ 


Date                                                                
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