FORFEITURE CONDITION REQUIRING THE PARTICIPANT'S CONTINUED SERVICES FOR A
PERIOD OF AT LEAST 12 MONTHS FROM THE DATE THAT THE PARTICIPANT OBTAINS A
"LEGALLY BINDING RIGHT" TO SUCH COMPENSATION (WITHIN THE MEANING OF SECTION 409A
OF THE CODE) MUST BE MADE BY, AND SHALL BECOME IRREVOCABLE AS OF, THE THIRTIETH
DAY FOLLOWING THE DATE THAT THE PARTICIPANT OBTAINS THE LEGALLY BINDING RIGHT TO
SUCH COMPENSATION, PROVIDED THAT THE ELECTION IS MADE AT LEAST TWELVE MONTHS IN
ADVANCE OF THE EARLIEST DATE AT WHICH THE FORFEITURE CONDITION COULD LAPSE.
FOR
THIS PURPOSE, A CONDITION WILL NOT BE TREATED AS FAILING TO REQUIRE THE
PARTICIPANT TO CONTINUE TO PROVIDE SERVICES FOR A PERIOD OF AT LEAST 12 MONTHS
MERELY BECAUSE THE CONDITION IMMEDIATELY LAPSES UPON THE DEATH OR DISABILITY (AS
DEFINED IN SECTION 409A OF THE CODE) OF THE PARTICIPANT, OR UPON A CHANGE IN
CONTROL (AS DEFINED IN SECTION 409A OF THE CODE), PROVIDED THAT IF SUCH DEATH,
DISABILITY, OR CHANGE IN CONTROL OCCURS AND THE CONDITION LAPSES BEFORE THE END
OF SUCH 12-MONTH PERIOD, THE DEFERRAL ELECTION MADE UNDER THIS SECTION 3.3(B)
SHALL NOT APPLY TO SUCH COMPENSATION.
(C)
PERFORMANCE-BASED COMPENSATION.
TO THE EXTENT PERMITTED BY THE
COMMITTEE, AND NOTWITHSTANDING ANYTHING CONTAINED IN THIS SECTION TO THE
CONTRARY, THE DEFERRAL ELECTION WITH RESPECT TO AN LTIP AWARD THAT CONSTITUTES
PERFORMANCE-BASED COMPENSATION MUST BE MADE BY, AND SHALL BECOME IRREVOCABLE AS
OF, THE DATE THAT IS SIX MONTHS BEFORE THE END OF THE APPLICABLE PERFORMANCE
PERIOD (OR SUCH EARLIER DATE AS SPECIFIED BY THE COMMITTEE ON THE DEFERRAL
ELECTION), PROVIDED THAT IN NO EVENT MAY SUCH DEFERRAL ELECTION BE MADE AFTER
SUCH LTIP AWARD HAS BECOME "READILY ASCERTAINABLE" WITHIN THE MEANING OF SECTION
409A OF THE CODE.
IN ORDER TO MAKE A DEFERRAL ELECTION UNDER THIS SECTION
3.3(C), THE PARTICIPANT MUST PERFORM SERVICES CONTINUOUSLY FROM THE LATER OF THE
BEGINNING OF THE PERFORMANCE PERIOD OR THE DATE THE PERFORMANCE CRITERIA ARE
ESTABLISHED THROUGH THE DATE A DEFERRAL ELECTION BECOMES IRREVOCABLE UNDER THIS
SECTION 3.3(C).
AN ELECTION MADE UNDER THIS SECTION SHALL NOT APPLY TO ANY
PORTION OF THE PERFORMANCE-BASED COMPENSATION THAT IS ACTUALLY EARNED BY A
PARTICIPANT REGARDLESS OF SATISFACTION OF THE PERFORMANCE CRITERIA.
(D)
CREDITING DATE.
UPON THE DATE THAT AN LTIP AWARD THAT THE
PARTICIPANT HAS ELECTED TO DEFER OTHERWISE WOULD HAVE BEEN PAYABLE, THE NUMBER
OF SHARES OF STOCK OR THE CASH PAYMENT THAT WOULD HAVE BECOME SO PAYABLE BUT FOR
THE DEFERRAL ELECTION SHALL BE CREDITED TO THE DUKE ENERGY COMMON STOCK - STOCK
DEFERRALS SUBACCOUNT.
(E)
DIVIDEND EQUIVALENTS.
DIVIDEND EQUIVALENTS, TO THE EXTENT
DEFERRED, SHALL ALSO BE DEFERRED AND CREDITED TO THE PARTICIPANT'S DUKE ENERGY
COMMON STOCK - STOCK DEFERRALS SUBACCOUNT COMMENCING ON THE PAYMENT DATE OF THE
FIRST CASH DIVIDEND OF DUKE ENERGY COMMON STOCK THAT IS DECLARED AFTER THE DATE
ON WHICH THE DEFERRED LTIP AWARD VESTS.
6
ARTICLE IV
ACCOUNTS AND PRIOR PLANS
4.1
PRIOR PLANS.
AS DESCRIBED IN MORE DETAIL IN APPENDIX A, THE PLAN
GOVERNS THE TERMS AND CONDITIONS OF