Document:

TEMPLATE

 

 

NON-QUALIFIED STOCK OPTION AGREEMENT FOR

EMPLOYEES UNDER THE CINERGY CORP.

1996 LONG-TERM INCENTIVE
COMPENSATION PLAN

 

 

THIS NON-QUALIFIED STOCK OPTION AGREEMENT (the “Agreement”),
effective as of _______________ (the “Date of Grant”), is made by and between
Cinergy Corp., a Delaware corporation, and _______________ (the “Optionee”), an
employee of Cinergy Corp. or one of its directly or indirectly held majority or
greater-owned subsidiaries (collectively referred to in this Agreement as the “Company”).

 

WHEREAS, Cinergy Corp. has adopted the Cinergy Corp.
1996 Long-Term Incentive Compensation Plan, as amended from time to time (the “Plan”),
pursuant to which the Optionee has been granted a non-qualified stock option
(the “Option”) to purchase shares of Cinergy Corp. common stock, with par value
of $0.01 per share (“Common Stock”), pursuant to the Plan, on the terms set
forth in this Agreement; and

 

                WHEREAS, the
parties desire to enter into this Agreement to set forth their understandings
with respect to the grant of the Option described in this Agreement.

 

                NOW, THEREFORE, in
consideration of the recitals and the mutual agreements contained in this
Agreement, the parties agree as follows:

 

1.                                      Option Grant.

 

Cinergy Corp. hereby grants to the Optionee effective
on the Date of Grant an Option to purchase __________ shares of Common Stock,
pursuant to the Plan, on the terms and conditions set forth in this
Agreement.  The number of shares of
Common Stock subject to this Option, and the Option Price described below in
Section 2, are subject to adjustment as provided in the Plan.  The
Option is intended to be a non-qualified stock option and shall not be treated
as an “incentive stock option” within the meaning of that term under Section
422 of the Internal Revenue Code of 1986, as amended.

 

2.                                      Purchase Price.

 

The purchase price of each share of Common Stock
subject to this Option is $__________ (the “Option Price”).  At the time this Option is exercised, the
Optionee must pay the aggregate Option Price of the shares with respect to
which the Optionee exercises the Option pursuant to one of the following
methods:  (a) in cash, (b) by tendering
to the Company whole shares of Common Stock owned by the Optionee, or owned
jointly by the Optionee and his or her spouse (with the spouse’s written
consent), for at least six (6) months (a “Stock Swap”), which tendered shares
must have a Fair Market Value (as defined in the Plan) equal to the aggregate
Option Price of the shares with respect to which the 

 

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Optionee exercises the Option, (c) any combination of
the methods described in (a) and (b) of this sentence, or (d) any other method
approved by the Compensation Committee (the “Committee”) of Cinergy Corp.’s Board
of Directors.  To exercise this Option,
the Optionee must send written notice to the Cinergy Corp. Manager,
Compensation, at the address noted in Section 19 or follow such other procedure
as specified by the Company.  The notice
shall state the number of shares of Common Stock in respect of which the Option
is being exercised, shall identify the Option as a non-qualified stock option,
and shall be signed by the person or persons exercising the Option.  The notice shall be accompanied by payment of
the full cash Option Price for such shares of Common Stock, or followed as soon
as practicable by the delivery of shares used in a Stock Swap and related cash
(if applicable), or any other consideration approved by the Committee.  Certificates evidencing shares of Common
Stock purchased pursuant to this Option will not be delivered to the Optionee
until payment has been made.

 

3.                                      Term of, and Right to
Exercise, Option.

 

The
term of this Option (the “Option Term”) shall be for a period of ten years from
the Date of Grant, subject to earlier termination as otherwise provided in this
Agreement. Except as otherwise provided below, the Option shall become
exercisable with respect to _______________ (____%) of the total number of
shares of Common Stock covered by this Option on _______________, but only if
the Optionee remains continuously employed with the Company from the Date of
Grant until _______________.(1)  From and after the date the Option becomes
exercisable, the shares of Common Stock subject to this Option may be purchased
at any time, or from time to time, in whole or in part, until the Option Term
expires, but in no case may fewer than 100 such shares be purchased at any one
time, except to purchase all remaining shares subject to the Option.

 

4.                                      Effect of Termination of
Employment due to Reasons other than Retirement, Death or Disability.

 

If the Optionee ceases to be an employee of the
Company for any reason other than as a result of his or her termination of
employment on or after attaining age fifty (50) with five years of “Service”
under the Cinergy Corp. Non-Union Employees’ Pension Plan (“Retirement”), death
or disability (as defined in Section 7), this Option, to the extent exercisable
on the date of termination, will remain exercisable until the earlier of (a)
the date three months following the effective date of the Optionee’s
termination of employment or (b) the expiration of the Option Term.

 

5.                                      Effect of Termination of
Employment Due to Retirement.

 

If the Optionee ceases to
be an employee of the Company as a result of his or her Retirement, the Option
shall become immediately exercisable in its entirety

(1) The vesting
events for stock option grants vary for each participant (e.g.,
cliff or graded vesting schedule).

 

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and the Optionee may
exercise this Option in whole or in part, subject to Section 6, at any time
prior to the expiration of the Option Term.

 

6.                                      Effect of Death.

 

Notwithstanding Section 5, if the Optionee dies either
while employed by the Company or after his or her termination of employment
because of Retirement, the Option shall become immediately exercisable in its
entirety and may be exercised in whole or in part by the Optionee’s executor,
administrator, legatees or estate at any time during the period commencing upon
the Optionee’s death and ending on the earlier of (a) the date twelve (12)
months after the date of the Optionee’s death or (b) the expiration of the
Option Term.

 

7.                                      Effect of Disability.

 

In the event that the Optionee while employed by the
Company becomes “disabled,” as that term is defined under the then existing
long-term disability plan of the Company in which the Optionee participates (or
if no such plan exists, as determined by the Committee), the Optionee will be
deemed to be employed by the Company during his or her period of disability.

 

8.                                      Effect of Change in
Control.

 

Notwithstanding the foregoing, in the event that a “Change
in Control” (as defined in the Plan) of Cinergy Corp. occurs while the Optionee
is employed by the Company, the Option, to the extent it has not previously
terminated, shall immediately become exercisable in full.

 

9.                                      Transferability.

 

Except as otherwise provided by the Committee, this
Option is not transferable or assignable otherwise than by will or the laws of
descent and distribution.  The Option may
be exercised only by the Optionee, or, if the Optionee dies, by his or her
executor, administrator, legatees, or beneficiaries of his or her estate who
are entitled to this Option, or in the event of his or her legal incapacity, by
his or her guardian or legal representative acting on behalf of the Optionee in
a fiduciary capacity under state law and court supervision.

 

10.                               Effect of Assignment or
Pledge.

 

If the Optionee attempts to assign or pledge shares of
Common Stock covered by this Option, or if there is a levy, attachment,
execution or other legal or equitable process upon this Option, the Company has
the right to terminate this Option.

 

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11.                               Incorporation of the Plan’s
Terms.

 

This Option is subject to all the terms, provisions
and conditions of the Plan, which is incorporated into this Agreement by
reference, and to such regulations, procedures and administrative guidelines as
may from time to time be adopted by the Committee.  A copy of the Plan and a set of
administrative guidelines have been furnished to the Optionee and an additional
copy may be obtained from the Company. 
In the event of any conflict between the provisions of the Plan or
administrative guidelines (as the case may be) and the provisions of this
Agreement, the terms, conditions and provisions of the Plan and/or
administrative guidelines shall control, and this Agreement shall be deemed to
be modified accordingly.  The Committee
shall have final authority to interpret and construe the Plan and this
Agreement and to make any and all determinations thereunder, and its decision
shall be binding and conclusive upon the Optionee and his or her legal
representative in respect of any questions arising under the Plan, or this
Agreement.

 

12.                               Tax Withholding.

 

A certificate evidencing the shares of Common Stock
purchased as a result of the exercise of this Option will not be issued until
the Optionee has satisfied his or her obligations with respect to withholding
tax.

 

13.                               Expiration of Rights.

 

Unless earlier terminated in accordance with the terms
of this Agreement, all rights to exercise this Option will expire, in any
event, ten years from the Date of Grant.

 

14.                               Certificate.

 

Certificates evidencing shares transferred upon
exercise of this Option may bear a legend setting forth, among other things,
such restrictions on the disposition or transfer of the shares as the Company
may deem consistent with applicable federal and state laws.

 

15.                               No Right to Continued
Employment.

 

Nothing in this Option shall restrict the right of the
Company to terminate the Optionee’s employment at any time with or without
cause.

 

16.                               Successors.

 

The terms of this Agreement shall be binding upon and
inure to the benefit of the Company, its successors and assigns, and the
Optionee and the Optionee’s beneficiaries, executors, administrators, heirs and
successors.

 

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17.                               Invalid Provision.

 

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.

 

18.                               Modifications.

 

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.

 

19.          Notices
and Electronic Delivery and Signature.

 

All notices to the Company and the exercise of the
Option herein granted, shall be addressed to Cinergy Corp., 139 East Fourth
Street, Cincinnati, Ohio 45202, Attention: Manager, Compensation, or such other
address or in accordance with such other procedure as the Company may, from
time to time, specify.  Notwithstanding
the foregoing, the Employee hereby consents and agrees to electronic delivery
of any Plan documents, proxy materials, annual reports and other related
documents, including all materials required to be distributed pursuant to
applicable securities laws.  If the
Company establishes procedures for an electronic signature system for delivery
and acceptance of Plan documents (including documents relating to any programs
adopted under the Plan), the Employee hereby consents to such procedures and
agrees that his or her electronic signature is the same as, and shall have the
same force and effect as, his or her manual signature.  The Employee consents and agrees that any
such procedures and delivery may be effected by a third party engaged by the
Company to provide administrative services related to the Plan, including any
program adopted under the Plan.  The
Employee understands that, unless earlier revoked by the Employee, this consent
shall be effective for the duration of the Agreement and that he or she shall
have the right at any time to request written copies of any and all materials
referred to above.

 

20.          Headings.

 

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.

 

21.          Governing
Law.

 

This Agreement and the Optionee’s rights under it
shall be construed and determined in accordance with the laws of the state of
Delaware.

 

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22.          Entire
Agreement.

 

This Agreement and the Plan contain the entire
agreement and understanding of the parties with respect to the subject matter
contained in this Agreement, and supersede all prior communications, representations
and negotiations in respect thereto.

 

23.          Counterparts.

 

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.

 

24.          Satisfaction
of Legal Requirements.

 

This Option may not be exercised until the Company has
been advised by counsel that all applicable legal requirements have been met.

 

 

IN WITNESS WHEREOF, this Agreement has been executed by the
parties effective as of the _____ day of _______________, _____.

 

	
  OPTIONEE

  	
  CINERGY CORP.

  
	
   

   

  Signature:  ____________________________

  	
   

   

  By:  _____________________________

           

  

 

 

6TEMPLATE

 

 

RESTRICTED
STOCK AGREEMENT FOR

EMPLOYEES
UNDER THE CINERGY CORP.

1996
LONG-TERM INCENTIVE COMPENSATION PLAN

 

 

                THIS RESTRICTED
STOCK AGREEMENT (the “Agreement”), dated effective as of _______________ (the “Date
of Grant”), is made by and between Cinergy Corp., a Delaware corporation, and _______________
(the “Employee”), an employee of Cinergy Corp. or one of its directly or
indirectly held majority or greater-owned subsidiaries (collectively referred
to herein as the “Company”).

 

                WHEREAS, Cinergy Corp. has adopted the Cinergy Corp.
1996 Long-Term Incentive Compensation Plan, as amended from time to time (the “Plan”),
pursuant to which the Employee has been granted the right, contingent upon the Employee
satisfying certain vesting requirements, to receive shares of Cinergy Corp.
common stock, with par value of $0.01 per share (“Common Stock”), on the terms
set forth in this Agreement; and

 

WHEREAS, the parties desire to enter into this
Agreement to set forth their understandings with respect to the Common Stock
described in this Agreement, such Common Stock sometimes referred to herein as “Restricted
Stock.”

 

                NOW, THEREFORE, in
consideration of the recitals and the mutual agreements contained in this
Agreement, the parties agree as follows:

 

1.                                      Grant of Restricted Stock. 
Cinergy
Corp. hereby grants to the Employee as of the Date of Grant ______ shares of
Restricted Stock (the “Restricted Stock”) subject to and upon the terms,
conditions and restrictions set forth in this Agreement and the Plan.  The Restricted Stock shall be fully paid and
nonassessable.

 

2.                                      Restrictions on Restricted
Stock.  The Restricted Stock shall be subject to the following
terms, conditions and restrictions:

 

(a)                                  Subject to the restrictions set forth in
the Plan and this Agreement, the Employee shall possess all incidents of
ownership of the Restricted Stock.

 

(b)                                 The Restricted Stock, and the Employee’s
interest therein, may not be sold, exchanged, assigned, transferred, pledged,
hypothecated, encumbered or otherwise disposed of by the Employee, except to
the Company, until the Restricted Stock has become vested as provided in
Section 2(c) hereof; provided, however, that the Employee’s
rights with respect to the Restricted Stock may be transferred by will or
pursuant to 

 

 

1

 

                                                the laws of descent and distribution. Any
purported transfer or encumbrance in violation of this Agreement shall be void,
and the other party to any such purported transaction shall not obtain any
right or interest in the Common Stock.

 

(c)                                  Subject to earlier forfeiture as
described in Section 2(d) hereof, the Restricted Stock shall vest on
_______________, provided that the Employee has been continuously employed with
the Company as of such date [and the Compensation Committee of the Board of
Directors of Cinergy Corp. or its delegate (the “Committee”) determines as of
such date that all of the performance measures set forth in Section 2(e) (the “Performance
Measures”) have been satisfied in full.] Notwithstanding the preceding
sentence, the Restricted Stock shall immediately vest in full [(without regard
to whether the Performance Measures have been satisfied)] if Employee has been
continuously employed with the Company until the first to occur of the following
events (provided that such events occur on or prior to _______________): (i)
the Employee’s death, (ii) the Employee’s disability (as that term is defined
in the Cinergy Corp. Long-Term Disability Plan), (iii) a Change in Control
occurs, (iv) the Company terminates the Employee’s employment for reasons other
than Cause, or (v) the Employee terminates his or her employment with the
Company for Good Reason.(1)

 

(d)                                 The Employee shall forfeit his or her Restricted
Stock in its entirety if he  or she ceases
to remain continuously employed by the Company until the date on which the
Restricted Stock vests in accordance with Section 2(c) hereof. In the event of
forfeiture, the certificate(s) representing the Restricted Stock covered by
this Agreement shall be transferred to and reacquired by the Company at no cost
to the Company.

 

(e)                                  For purposes of this Agreement, the
following terms shall have the following meanings:

 

(i)                                     “Cause” [Insert Definition of Cause]

 

(ii)                                  “Good Reason” [Insert Definition of Good
Reason]

 

(iii)                               “Performance Period” shall mean the
period beginning on _________________ and ending on _________________.

 

(iv)                              “Performance Measures” shall be as
follows:

 

                                                [Insert Performance Measures]

(1) The vesting events for
restricted stock vary for each participant. 
Some restricted stock grants incorporate a cliff vesting schedule while
others use a graded vesting schedule. 
The restricted stock grants incorporate some or all of the items set
forth in Section 2(c).

 

 

2

 

(f)                                    The Employee
shall have the right to receive, during the period commencing on the Date of Grant and
ending on the date the Restricted Stock vests, cash payments equal to the
amount of dividends that the Employee would have received if he or she had
owned ______ shares of Common Stock during such period, which amounts shall be
paid to the Employee as soon as administratively practicable following each
relevant dividend payment date.

 

3.                                      Certificate; Restrictive Legend.  The Employee agrees that the Restricted Stock
shall be represented by a certificate or certificates registered in the Employee’s
name and endorsed with an appropriate legend referring to the restrictions set
forth in this Agreement.

 

4.                                      Retention of Stock Certificate; Dividends.

 

(a)                                  The
certificate(s) representing the Restricted Stock shall be held in custody by
the Company or its agent until those shares have become vested in accordance
with Section 2(c) of this Agreement.  The
Employee hereby appoints the Company, with full power of substitution, as the
Employee’s true and lawful attorney-in-fact with irrevocable power and
authority in the name and on behalf of the Employee to take any action and
execute all documents and instruments, including, without limitation, stock
powers which may be necessary to transfer the certificate or certificates
evidencing such forfeited shares to the Company upon such forfeiture.

 

(b)                                 Except as otherwise provided herein, from
and after the Date of Grant, [the Employee shall have all rights of a
shareholder with respect to the Restricted Stock, including the right to vote
the Restricted Stock and receive any dividends;] [during the period commencing
on _______________ and ending on the date the Restricted Stock becomes fully
vested, any dividends that would have been paid to the Employee if he or she had
held the Restricted Stock during such period and such stock had not been
subject to forfeiture provisions will be retained by the Company and will be
subject to the provisions set forth in Section 2; if the Restricted Stock
becomes vested as provided herein, the Company shall transfer to the Employee
additional Common Stock having a fair market value on the date of transfer equal
to the dividends retained with respect to the Restricted Stock;] provided,
however, that any additional Common Stock or other securities that the Employee
may become entitled to receive pursuant to a stock dividend, stock split,
combination of shares, recapitalization, merger, consolidation, separation or
reorganization or any other change in the capital structure of the Company
shall be subject to the same restrictions as the Restricted Stock covered by
this Agreement.

 

3

 

5.                                      Income Taxes. 
The Employee
shall pay to the Company promptly upon request, and in any event at the time
the Employee recognizes taxable income in respect of the Restricted Stock, an
amount equal to the taxes the Company determines it is required to withhold
under applicable tax laws with respect to the Restricted Stock.  Such payment shall be made in the form of
cash, shares of Common Stock already owned or withholding from shares otherwise
transferable upon the lapse of restrictions, or in a combination of such
methods, as determined by the Employee. 
The Employee shall promptly notify the Company of any election made by
the Employee pursuant to Section 83(b) of the Code.

 

6.                                      Deferral of Restricted
Stock.  To the extent permitted by law, the Committee
may permit the Employee to elect to defer the settlement of the Restricted
Stock pursuant to such rules, procedures or programs as it may establish for
purposes of this Agreement. The Committee also may provide that the deferred
settlement includes the payment or crediting of dividend equivalents or interest
on the deferred amounts.

 

7.                                      Incorporation by Reference. 
The
provisions of the Plan are incorporated into this Agreement by reference. This
Agreement shall be construed in accordance with the provisions of the Plan and
such regulations as may from time to time be adopted by the Committee. Any
capitalized terms not otherwise defined in this Agreement shall have the
definitions set forth in the Plan. The Committee shall have final authority to
interpret and construe the Plan and this Agreement and to make any and all
determinations thereunder, and its decision shall be binding and conclusive
upon the Employee and his or her legal representative in respect of any
questions arising under the Plan, or this Agreement. In the event of any
conflict between the provisions of the Plan and the provisions of this
Agreement, the terms, conditions and provisions of the Plan shall control, and
this Agreement shall be deemed to be modified accordingly. By signing this
Agreement, the Employee acknowledges that he or she has received a copy of the
Plan and this Agreement and has had an opportunity to review the Plan and this
Agreement and agrees to be bound by all the terms and provisions of the Plan
and this Agreement.

 

8.                                    Notices and Electronic
Delivery and Signature.  Except as otherwise provided by the
Company from time to time, any and all notices, designations, consents, offers,
acceptances and any other communications provided for in this Agreement shall
be given in writing and shall be delivered either personally or by registered
or certified mail, postage prepaid, which shall be addressed, in the case of
Cinergy Corp., to its Corporate Secretary at the principal office of Cinergy
Corp., in the case of the Employee, to the Employee’s address appearing on the
books of the Company, or to the Employee’s residence or to such other address
as may be designated in writing by the Employee.  Notwithstanding the
foregoing, the Employee hereby consents and agrees to electronic delivery of
any Plan documents, proxy materials, annual reports and other related
documents, including all materials required to be distributed pursuant to
applicable securities laws.  If the
Company establishes procedures for an

 

 

4

 

                                                electronic
signature system for delivery and acceptance of Plan documents (including
documents relating to any programs adopted under the Plan), the Employee hereby
consents to such procedures and agrees that his or her electronic signature is
the same as, and shall have the same force and effect as, his or her manual
signature.  The Employee consents and
agrees that any such procedures and delivery may be effected by a third party
engaged by the Company to provide administrative services related to the Plan,
including any program adopted under the Plan. 
The Employee understands that, unless earlier revoked by the Employee,
this consent shall be effective for the duration of the Agreement and that he
or she shall have the right at any time to request written copies of any and
all materials referred to above.

 

9.                                      No Right to Continued
Employment.  Nothing in the Plan or in this Agreement
shall confer upon the Employee any right to continue in the employ of the
Company or shall interfere with or restrict in any way the right of the
Company, which is hereby expressly reserved, to remove, terminate or discharge
the Employee at any time for any reason whatsoever, with or without Cause.

 

10.                               Successors. 
The terms
of this Agreement shall be binding upon and inure to the benefit of Cinergy
Corp., its successors and assigns, and on the Employee and the beneficiaries,
executors, administrators, heirs, and successors of the Employee.

 

11.                               Invalid Provision. 
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.

 

12.                               Modifications. No change, amendment, modification or waiver of any
provision of this Agreement shall be valid unless the same is in writing and
signed by the parties.

 

13.                               Entire Agreement. 
This
Agreement and the Plan contain the entire agreement and understanding of the
parties with respect to the subject matter contained in this Agreement, and
supersede all prior communications, representations and negotiations in respect
thereto.

 

14.                               Governing Law. 
This Agreement and the Employee’s rights under it shall be construed and
determined in accordance with the laws of the state of Delaware.

 

15.                               Headings. 
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.

 

5

 

 

16.                               Counterparts. 
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.

 

17.                               Compliance with Law.  The Company
shall make reasonable efforts to comply with all applicable federal and state
securities laws; provided, however, notwithstanding any other
provision of this Agreement, the Company shall not be obligated to deliver any
Common Stock pursuant to this Agreement if the delivery thereof would result in
a violation of any such law.

 

 

                IN WITNESS WHEREOF, this Agreement has been executed
and delivered by the parties as of the ______ day of _______________, _____.

 

EMPLOYEE                                                                                                           CINERGY
CORP.

 

 

 

Signature:  _________________________                                                  By:  __________________________

 

 

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