PURPOSES OF CLARITY, THE PLAN IS THE SUCCESSOR TO THE DUKE ENERGY
CORPORATION EXECUTIVE SAVINGS PLAN I AND THE DUKE ENERGY CORPORATION EXECUTIVE
SAVINGS PLAN II.
AMOUNTS THAT WERE PREVIOUSLY PAYABLE UNDER THE PRIOR PLANS AND
THAT HAVE BEEN CREDITED TO ACCOUNTS HEREUNDER SHALL REMAIN SUBJECT TO THE SAME
VESTING SCHEDULE AND ELECTIONS (INCLUDING DEFERRAL AND DISTRIBUTION ELECTIONS)
AND BENEFICIARY DESIGNATIONS THAT WERE CONTROLLING UNDER THE APPLICABLE PRIOR
PLAN IMMEDIATELY PRIOR TO THE DATE SUCH AMOUNTS WERE CREDITED TO ACCOUNTS UNDER
THE PLAN UNTIL A NEW ELECTION IS MADE IN ACCORDANCE WITH THE TERMS OF THIS PLAN
THAT BY ITS TERMS SUPERSEDES THE PRIOR ELECTION.
THIS PLAN SHALL RECOGNIZE ANY
AMOUNT THAT WAS PROPERLY DEFERRED BY A PARTICIPANT UNDER A PRIOR PLAN BUT THAT
HAD NOT YET BEEN CREDITED TO HIS OR HER ACCOUNT THEREUNDER AS OF THE DATE THE
OBLIGATIONS UNDER SUCH PLAN WERE ASSUMED BY THIS PLAN.
EACH PARTICIPANT'S RIGHT
TO RECEIVE ANY BENEFIT THAT HAS BEEN TRANSFERRED TO THIS PLAN SHALL BE
DETERMINED SOLELY PURSUANT TO THE TERMS OF THIS PLAN.
ALL OF THE COMPANY'S
OBLIGATIONS AND PARTICIPANTS' RIGHTS WITH RESPECT TO THE AMOUNTS PREVIOUSLY
PAYABLE UNDER THE PRIOR PLAN SHALL AUTOMATICALLY BE EXTINGUISHED AND BECOME
OBLIGATIONS AND RIGHTS UNDER THIS PLAN WITHOUT FURTHER ACTION AS OF THE
EFFECTIVE DATE.
9
5.2
APPLICATION OF CODE SECTION 409A TO PRIOR PLANS.
(A)
PRE-2005 DEFERRALS.
ANY "AMOUNTS DEFERRED" IN TAXABLE YEARS
BEGINNING BEFORE JANUARY 1, 2005 UNDER THE PLAN OR PRIOR PLAN, WITHIN THE
MEANING OF SECTION 409A OF THE CODE, AND ANY EARNINGS THEREON ("PRE-2005
DEFERRALS"), SHALL BE GOVERNED BY THE TERMS OF THE PLAN OR PRIOR PLAN, AS
APPLICABLE, AS IN EFFECT ON OCTOBER 3, 2004, AND IT IS INTENDED THAT SUCH
AMOUNTS AND ANY EARNINGS THEREON BE EXEMPT FROM THE APPLICATION OF SECTION 409A
OF THE CODE.
NOTHING CONTAINED HEREIN IS INTENDED TO MATERIALLY ENHANCE A
BENEFIT OR RIGHT EXISTING UNDER THE PLAN OR PRIOR PLAN AS OF OCTOBER 3, 2004 OR
ADD A NEW MATERIAL BENEFIT OR RIGHT TO SUCH PLAN OR PRIOR PLAN.
(B)
POST-2004 DEFERRALS.
ANY "AMOUNTS DEFERRED" IN TAXABLE YEARS
BEGINNING ON OR AFTER JANUARY 1, 2005 UNDER THE PLAN OR PRIOR PLAN, WITHIN THE
MEANING OF SECTION 409A OF THE CODE, AND ANY EARNINGS THEREON ("POST-2004
DEFERRALS"), SHALL BE GOVERNED BY THE TERMS AND CONDITIONS OF THE PLAN.
ARTICLE VI
ACCOUNTS
6.1
MAINTENANCE OF PARTICIPANT ACCOUNTS.
AN ACCOUNT SHALL BE
ESTABLISHED AND MAINTAINED WITH RESPECT TO EACH PARTICIPANT.
EACH ACCOUNT SHALL
REFLECT THE AMOUNTS CREDITED THERETO PURSUANT TO ARTICLE IV AND V, PLUS OR MINUS
ADJUSTMENTS MADE IN ACCORDANCE WITH THE PROVISIONS OF THIS ARTICLE VI AND
REDUCED BY DISTRIBUTIONS MADE IN ACCORDANCE WITH ARTICLE VII.
6.2
PHANTOM INVESTMENT OPTIONS GENERALLY.
IN ACCORDANCE WITH SUCH
RULES AS THE COMMITTEE SHALL APPROVE, INVESTMENT OPTIONS SHALL BE AVAILABLE
HEREUNDER THAT GENERALLY CORRESPOND WITH EACH RSP INVESTMENT OPTION AND SUCH
OTHER INVESTMENT OPTIONS AS ARE DETERMINED TO BE APPROPRIATE BY THE COMMITTEE.
EACH PARTICIPANT HEREUNDER SHALL SPECIFY, IN ACCORDANCE WITH THIS SECTION AND