EXHIBIT
10.56


 


RETENTION AWARD
AGREEMENT


 


THIS
RETENTION AWARD AGREEMENT (the “Agreement”), effective as of July 9, 2012, is
made by and between Duke Energy Corporation, and Lloyd Yates (the “Employee”),
an employee of Duke Energy Corporation or one of its subsidiaries or affiliates
(collectively referred to herein as the “Company”).


 


1.              Retention Award. 


 


(a)        Grant of Retention
Award.
  In consideration of the Employee’s continuing service for the Company,
the Company hereby grants to the Employee the opportunity to earn a retention
award (the “Retention Award”) pursuant to the terms of this Agreement in the
amount of one million dollars ($1,000,000).  


 


(b)         Vesting Schedule.   Subject to
earlier forfeiture as described below, the Retention Award shall become fully
vested in its entirety if the Employee is continuously employed by the Company
until the second (2nd) anniversary of the closing of the Merger (as
defined in the Agreement and Plan of Merger by and among Duke Energy Corporation,
Diamond Acquisition Corporation and Progress Energy, Inc., dated as of January
8, 2011) (the “Vesting Date”). 


 


(c)       Forfeiture of
Retention Award. 
The Employee shall forfeit the Retention Award in its entirety upon (i) failing
to remain continuously employed with the Company for any reason through the
Vesting Date in accordance with Section 1(b) or (ii) breaching this Agreement. 
For purposes of clarity, the Retention Award shall be forfeited in the event
that the Employee is entitled to payments under the terms of the Progress
Energy, Inc. Management Change-in-Control Plan.


 


2.         Crediting
of Vested
Retention Award. 
In the event the Retention Award becomes fully vested in accordance with
Section 1(b), the vested Retention Award (less applicable taxes, including
employment taxes, upon vesting) shall be credited on the Vesting Date to a
subaccount under the Duke Energy Corporation Executive Savings Plan (the
“Plan”), which subaccount shall be credited with gains and losses in accordance
with the terms of the Plan and shall be paid to the Employee in the form of
monthly installments over a period of seven years as provided under the terms
of the Plan.  Except as explicitly set forth herein, no payments made pursuant
to this Agreement will be considered when determining the Employee’s benefits
under the Company’s other benefit plans (e.g., 401(k) plan, defined
benefit pension plan, etc.).  


 


3.        Miscellaneous.  The contingent
rights set forth in this Agreement are not transferable otherwise than by will
or the laws of descent and distribution.  Nothing in this Agreement shall
restrict the right of the Company to terminate the Employee’s employment at any
time with or without “cause”.  The terms of this Agreement shall be binding
upon and inure to the benefit of the Company, its successors and assigns, and
the Employee and the Employee’s beneficiaries, executors, administrators, heirs
and successors.  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.  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.  Except to the extent pre-empted by federal law, this Agreement and
the Employee’s rights under it shall be construed and determined in accordance
with the laws of the State of North Carolina.  This Agreement contains the
entire agreement and understanding of the parties with respect to the subject
matter contained in this Agreement, and supersedes all prior communications,
representations and negotiations in respect thereto.  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.  The Company, or
its delegate, shall have final authority to interpret and construe this
Agreement and to make any and all determinations thereunder, and its decision
shall be binding and conclusive upon the Employee and the Employee’s legal
representative in respect of any questions arising under this Agreement.  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.  Any payments to
Employee under this Agreement shall be paid from the Company’s general assets,
and Employee shall have the status of a general unsecured creditor with respect
to the Company’s obligations to make payments under this Agreement.     


 


4.         Confidentiality
of this Agreement. 
The Employee specifically agrees and understands that the existence and terms
of this Agreement are strictly CONFIDENTIAL and that such confidentiality is a
material term of this Agreement.  Accordingly, except as required by law, any
judicial or administrative federal, state or local agency or unless authorized
to do so by the Company in writing, the Employee agrees that the Employee shall
not communicate, display or otherwise reveal the existence or contents of this
Agreement to anyone other than the Employee's attorney, spouse, tax advisor or
financial advisor, provided, however, that they are instructed of
the confidential nature of this Agreement and the Employee obtains their
agreement to be bound by the same.  Any violation of the requirements of this
Section 4 shall result in the forfeiture of this Retention Award.


IN WITNESS
WHEREOF, this Agreement has been executed by the parties effective as of the
date set forth herein.


 


 


 


	
  EMPLOYEE

  	
  DUKE ENERGY CORPORATION

  
	
   

   

  ___/s/  LLOYD YATES_______________ 

                

  	
   

   

  By: __/s/ JENNIFER L. WEBER________ 

       
  Jennifer L. Weber

        Executive Vice
  President and Chief Human Resources Officer