Document:

Exhibit 10.3

 

 

 

 

 

July 30, 2007

 

 

 

 

Mr. John O. McCoy, Jr.

Executive Vice President 

  and Chief Administrative
Officer

Pogo Producing Company

Five Greenway Plaza, Suite 2700

Houston, Texas  77046-0504

 

Dear Mr. McCoy:

 

Reference is
hereby made to those certain Restricted Stock Award Agreements (the
“Agreements”) entered into by and between Pogo Producing Company, a Delaware
corporation (the “Company”), and me, pursuant to which I have been granted
certain awards of restricted stock (the “Restricted Stock”).  Pursuant to the Agreements, I am to become
vested in certain of the shares of the Restricted Stock on August 1, 2007 (the
“Vesting Restricted Stock”). 

 It is
acknowledged that the Vesting Restricted Stock is subject to the satisfaction
of all applicable federal, state and local income and employment tax
withholding requirements.  I hereby
authorize and direct the Company to withhold from the Vesting Restricted Stock
otherwise to be delivered to me as of August 1, 2007, 26.45% of the number of
shares of Vesting Restricted Stock. 

 

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Accepted By:

  
	
   

  	
   

  
	
   

  	
  Pogo Producing Company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  John O.
  McCoy, Jr.

  
	
   

  	
  Title:

  	
  Executive
  Vice President and

  
	
   

  	
   

  	
  Chief
  Administrative OfficerExhibit 10.1

DUKE
ENERGY CORPORATION

EXECUTIVE SAVINGS PLAN

(Amended and Restated Effective as of January 1, 2008)

PURPOSE

The purpose
of the Plan is to provide deferred compensation for a select group of
management or highly compensated employees. 
The Plan replaces certain plans previously maintained by the Company and
its affiliates, as described in more detail in Article V.  The Plan is intended to be a nonqualified,
unfunded plan of deferred compensation for a select group of management or
highly compensated employees under ERISA, and shall be so interpreted.

ARTICLE I

TITLE AND EFFECTIVE DATE

 

1.1           This Plan
shall be known as the Duke Energy Corporation Executive Savings Plan
(hereinafter referred to as the “Plan”).

1.2           The Plan
was first effective on January 1, 1997, has been amended from time to time
thereafter, and is amended and restated as set forth herein, effective as of
January 1, 2008.

ARTICLE II

DEFINITIONS

 

2.1           “Account”
shall mean the record of deferrals and contributions and adjustments thereto
maintained with respect to each Participant pursuant to Article VI.  Each Participant’s Account shall be a
bookkeeping entry only and shall be used solely as a device to measure and
determine the amounts, if any, to be paid to the Participant or his or her
Beneficiary under the Plan.

2.2           “Affiliated
Group” shall mean the Company and all entities with whom the Company would be
considered a single employer under Sections 414(b) and 414(c) of the Code,
provided that in applying Section 1563(a)(1), (2), and (3) for purposes of
determining a controlled group of corporations under Section 414(b) of the
Code, the term “at least 45 percent” is used instead of “at least 80 percent”
each place it appears in Code Section 1563(a)(1), (2), and (3), and in applying
Treasury Regulation Section 1.414(c)-2 for purposes of determining trades or
businesses (whether or not incorporated) that are under common control for
purposes of Section 414(c), the term “at least 45 percent” is used instead of “at
least 80 percent” each place it appears in that regulation.  Such term shall be interpreted in a manner
consistent with the definition of “service recipient” contained in Section 409A
of the Code.

2.3           “Base Pay”
shall mean, for each Participant, the base salary as defined by the Company’s
normal payroll practices and procedures, payable by the Affiliated Group during
a 

 

1

 

Plan Year
(or which would have been paid during a Plan Year but for salary reductions and
elective deferrals under Code Sections 125 and 401(k) and Base Pay
deferrals under this Plan).  In no event
shall Base Pay include any compensation, whether paid or deferred, pursuant to
Incentive Plans.

2.4           “Beneficiary”
means the person or persons designated by a Participant, or by another person
entitled to receive benefits hereunder, to receive benefits following the death
of such person. If a person fails to specify a surviving Beneficiary, the
person’s estate shall be his or her Beneficiary.

2.5           “Board”
shall mean the Board of Directors of the Company.

2.6           “CDP”
shall mean the Duke Power Company Compensation Deferral Plan, first effective
as of July 1, 1983.

2.7           “CDP
Subaccounts” shall have the mean provided in Section 6.3.

2.8           “Change in
Control” shall be deemed to have occurred upon:

(a)           an
acquisition subsequent to the Effective Date hereof by any individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 30% or more of either (A) the then outstanding
shares of common stock of Duke Energy Corporation or (B) the combined
voting power of the then outstanding voting securities of Duke Energy
Corporation entitled to vote generally in the election of directors; excluding,
however, the following:  (1) any
acquisition directly from Duke Energy Corporation, other than an acquisition by
virtue of the exercise of a conversion privilege unless the security being so
converted was itself acquired directly from Duke Energy Corporation,
(2) any acquisition by Duke Energy Corporation and (3) any
acquisition by an employee benefit plan (or related trust) sponsored or
maintained by Duke Energy Corporation or its affiliated companies;

(b)           during any
period of two (2) consecutive years (not including any period prior to the
Effective Date), individuals who at the beginning of such period constitute the
Board (and any new directors whose election by the Board or nomination for
election by the Duke Energy Corporation’s shareholders was approved by a vote
of at least 2/3 of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election was
so approved) cease for any reason (except for death, disability or voluntary
retirement) to constitute a majority thereof;

(c)           the
consummation of a merger, consolidation, reorganization or similar corporate
transaction which has been approved by the shareholders of Duke Energy
Corporation, whether or not Duke Energy Corporation is the surviving
corporation in such transaction, other than a merger, consolidation, or
reorganization that would result in the voting securities of Duke Energy Corporation
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 50% of the combined voting power 

 

2

 

of the
voting securities of Duke Energy Corporation (or such surviving entity)
outstanding immediately after such merger, consolidation or reorganization;

(d)           the
consummation of (A) the sale or other disposition of all or substantially
all of the assets of Duke Energy Corporation or (B) a complete liquidation
or dissolution of Duke Energy Corporation, which has been approved by the
shareholders of Duke Energy Corporation; or

(e)           adoption
by the Board of a resolution to the effect that any Person has acquired
effective control of the business and affairs of Duke Energy Corporation.

2.9           “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time.

2.10         “Committee”
shall mean the Compensation Committee of the Board or its delegate.

2.11         “Company”
shall mean Duke Energy Corporation and its successors, including, without
limitation, the surviving corporation resulting from any merger or
consolidation of Duke Energy Corporation with any other corporation, limited
liability company, joint venture, partnership or other entity or entities.

2.12         “Company
Matching Contribution” shall have the meaning provided in Section 4.5.

2.13         “Company
Matching Subaccount” shall mean the subaccount established and maintained
pursuant to Section 6.3.

2.14         “CRIDP”
shall mean the Crescent Resources Incentive Deferral Plan as effective
December 29, 1993.

2.15         “CRIDP
Subaccounts” shall have the meaning provided in Section 6.3.

2.16         “Deferral
Election” shall mean the Participant’s election on a form approved by the
Committee to defer a portion of his or her compensation in accordance with the
provisions of Article IV.

2.17         “Duke
Energy Common Stock Fund” shall mean the Investment Option that invests
primarily in Duke Energy Corporation common stock.

2.18         “Duke
Energy Common Stock - Stock Deferrals Subaccount” shall mean the subaccount
established and maintained pursuant to Section 6.3.

2.19         “Effective
Date” shall mean January 1, 2008.

2.20         “Employee”
shall mean a person employed by the Affiliated Group.

 

3

 

2.21         “ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended.

2.22         “General
Account” shall mean that portion of a Participant’s Account that is not in a
Subaccount.

2.23         “Incentive
Plans” shall mean the executive incentive compensation or bonus plans sponsored
by the Affiliated Group which are designated as “Incentive Plans” by the
Committee from time to time.

2.24         “Investment
Options” shall mean the various investment options that are made available from
time to time under the Plan, which options generally shall correspond to the
investment options made available from time to time under the Company’s RSP.

2.25         “KEDCP”
shall mean the Panhandle Eastern Corporation Key Executive Deferred
Compensation Plan, as amended and restated effective January 1, 1996.

2.26         “Legacy
Cinergy Plans” shall mean, collectively, the Cinergy Corp. 401(k) Excess Plan,
Cinergy Corp. Nonqualified Deferred Incentive Compensation Plan and the Cinergy
Corp. Excess Profit Sharing Plan.

2.27         “Legacy
Cinergy Subaccounts” shall have the mean provided in Section 6.3.

2.28         “LTIP Award”
shall mean any award, other than a stock option or restricted stock award,
granted under a long-term incentive plan maintained by the Affiliated Group
(including the Company’s 2006 Long-Term Incentive Plan).

2.29         “Participant”
shall mean any Employee for whom an Account is maintained under the Plan.  However for the purposes of Article IV,
the term Participant shall mean only those Participants who remain eligible to
participate in the Plan.

2.30         “Performance-Based
Compensation” shall mean that portion of a Participant’s compensation the
amount of which, or the entitlement to which, is contingent on the satisfaction
of pre-established organizational or individual performance criteria relating
to a performance period of at least twelve (12) consecutive months, and which
satisfies the requirements for “performance-based compensation” under Section
409A of the Code, including the requirement that the performance criteria be
established in writing by not later than (i) ninety (90) days after the
commencement of the period of service to which the criteria relates and (ii)
the date the outcome ceases to be substantially uncertain.  Where a portion of an amount of compensation
would qualify as Performance-Based Compensation if the portion were the sole
amount available under a designated incentive plan, that portion of the award
will not fail to qualify as Performance-Based Compensation if that portion is
designated separately on the Deferral Election or is otherwise separately
identifiable under the terms of the designated incentive plan, and the amount
of each portion is determined independently of the other.

2.31         “Plan”
shall mean the Duke Energy Corporation Executive Savings Plan, as amended.

 

4

 

2.32         “Plan Year”
shall mean the calendar year.

2.33         “Post-2004
Deferrals” shall have the meaning provided in Section 5.2(b).

2.34         “Pre-2005
Deferrals” shall have the meaning provided in Section 5.2(a).

2.35         “RSP” shall
mean the Duke Energy Retirement Savings Plan, as amended.

2.36         “Separation
from Service” shall mean a termination of employment with the Affiliated Group
in such a manner as to constitute a “separation from service” as defined under
Section 409A of the Code.  To the extent
permitted by Section 409A of the Code, the Committee retains discretion, in the
event of a sale or other disposition of assets, to specify whether a Participant
who provides services to the purchaser immediately after the transaction has
incurred a Separation from Service.  With
respect to Pre-2005 Deferrals, the term “Separation from Service” shall mean a
termination of employment within the meaning of the Plan or applicable Prior
Plan as in effect immediately prior to the Effective Date.

2.37         “Specified
Employee” shall mean, as of any date, a “specified employee”, as defined in
Section 409A of the Code (as determined under the Company’s policy for
determining specified employees on the relevant date), of the Company or any
entity which would be considered to be a single employer with the Company under
Section 414(b) or Section 414(c) of the Code.

2.38         “Spectra
Common Stock Fund” shall have the meaning provided under Section 6.5.

2.39         “Subaccounts”
shall mean the Subaccounts established under Article VI.

2.40         “Unforeseeable
Emergency” shall mean an “unforeseeable emergency” as defined under Section
409A of the Code.  With respect to
Pre-2005 Deferrals, the term “Unforeseeable Emergency” shall mean an
unforeseeable emergency or financial hardship within the meaning of the Plan or
Prior Plan as in effect immediately prior to the Effective Date.

2.41         “Valuation
Date” shall mean, with respect to a Participant, the last business day of the
month during which such Participant’s Separation from Service occurs.

ARTICLE III

ELIGIBILITY

 

3.1           General
Rule.  Any Employee designated by the
Committee shall be eligible to participate in the Plan on the date designated
by the Committee and shall remain so eligible, while continuing to be an
Employee, until designated ineligible to participate by the Committee.  Notwithstanding the foregoing, only Employees
who are members of a “select group of management or highly compensated
employees” under ERISA may participate in the Plan.  In lieu of expressly selecting Employees for
Plan participation, the Committee may establish eligibility criteria
(consistent with the requirements of the preceding sentence) providing for 

 

5

 

participation
of all Employees who satisfy such criteria. 
The Committee may at any time, in its sole discretion, change the
eligibility criteria for Employees, or determine that one or more Participants
will cease to be eligible to participate.

3.2           Prior
Plans.  Notwithstanding anything
contained in Section 3.1 to the contrary, any individual with respect to whom
amounts have been assumed from Prior Plans as described in Section 5.1 shall
automatically participate, and be a “Participant,” in the Plan with respect to
such amounts.

3.3           Termination
of Eligibility.  An individual’s
right to defer shall cease with respect to the Plan Year following the Plan
Year in which he or she ceases to be eligible to participate in the Plan,
although such individual shall continue to be subject to all of the terms and
conditions of the Plan for as long as he or she remains a Participant.  Upon the occurrence of a Participant’s
Separation from Service during a Plan Year, any then-outstanding Deferral
Election shall be cancelled and no additional amount shall be deferred pursuant
to such Deferral Election.  A Participant
shall not be entitled to receive a Company Matching Contribution with respect
to the Plan Year in which occurs his or her Separation from Service.

ARTICLE IV

PARTICIPANT DEFERRALS/COMPANY CREDITS

 

4.1           Base
Pay Deferrals.  Each eligible
Participant may irrevocably elect to defer in accordance with the terms of this
Plan, a percentage up to 75% (such percentage to be a multiple of 1%) of such
Participant’s Base Pay for the Plan Year. 
Unless an earlier date is specified by the Committee, such election must
be made by the Participant not later than the beginning of such Plan Year or
within 30 days of a Participant initially becoming eligible to participate
in the Plan (or any other plan required to be aggregated with the Plan under
Section 409A of the Code) under Section 3.1.  In the event that a Participant first becomes
eligible to participate in the Plan other than on the first day of a Plan Year,
he or she shall have no right to defer Base Pay prior to the date that is 30
days after he or she initially becomes eligible to participate in the Plan, and
his or her Deferral Election shall apply only to Base Pay earned beginning with
the first payroll period that begins immediately after the date that is 30 days
after he or she initially becomes eligible to participate in the Plan.  Base Pay deferred pursuant to this Section
shall be credited to the Participant’s Account at the time such Base Pay otherwise
would be paid to the Participant.

4.2           Incentive
Plan Deferrals.  Each eligible
Participant may irrevocably elect to defer in accordance with the terms of this
Plan, a percentage up to 75% (such percentage to be a multiple of 1%) of the
amount payable with respect to a Plan Year to such Participant as an award
under any Incentive Plans.  Such election
must be made by the Participant not later than the last day (or such earlier
date as specified by the Committee) of the Plan Year immediately preceding the
first day of the performance period for which such amount would otherwise be
earned.  Such amounts shall be credited
to the Participant’s Account as of the dates that award amounts under the
Incentive Plans otherwise would be paid to the Participant.

 

6

 

4.3           Long-Term Incentive Plan Award
Deferrals.  Each eligible Participant
may irrevocably elect to defer, in accordance with the terms of this Plan, the
entire amount of any nonvested LTIP Award, subject to the following conditions:

(a)           General
Rule.  Except as otherwise provided
in this Section, the Deferral Election shall be made by, and shall become
irrevocable as of, December 31 (or such earlier date as specified by the
Committee) of the Plan Year next preceding the Plan Year for which such LTIP
Award is granted.

(b)           Compensation
Subject to Vesting.   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 is subject to a 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 4.3(b) shall not
apply to such compensation.

(c)           Performance-Based
Compensation.  To the extent
permitted by the Company, 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 4.3(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 4.3(c). 
An election made under this Section 4.3(c) 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.

 

7

 

(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.

4.4           Dividend Equivalents Deferrals.  Each eligible Participant may irrevocably
elect to defer, in accordance with the terms of this Plan, 100% of the amounts
that would otherwise become payable as dividend equivalents, with respect to an
LTIP Award with respect to which the LTIP Award agreement specifically provides
for the deferral of dividend equivalents. 
Such election must be made by the Participant at the time the
Participant elects to defer receipt of the related LTIP Award pursuant to the
terms of Section 4.3.  Dividend
equivalents that have been deferred pursuant to the first sentence of this
Section and credited to the Participant’s Account shall be credited to the
Participant’s Duke Energy Common Stock - Stock Deferrals Subaccount as of the
dates such amounts would otherwise become payable pursuant to such LTIP Award.

4.5           Retirement Savings Plan -
Excess Matching Contribution.  The
Company maintains the RSP, pursuant to which Employees are permitted to make
certain contributions with respect to which the Company makes matching
contributions, based on the Employee’s contribution election.  It is the Company’s intention to provide
matching contribution credits under this Plan where matching contributions
cannot be provided under the RSP due to: 
(i) the application of Section 401(a)(17) of the Code,
(ii) the application of Section 402(g) of the Code or (iii) the
application of Section 415 of the Code. 
Accordingly, during the first 90 days  following
each Plan Year, but only with respect to Participants who are eligible for such
contributions as described below,  the
Participant’s Account shall receive a credit (the “Company Matching
Contribution”) equal to the amount, if any, by which the lesser of the amounts
in subparagraph (a) or (b) below, exceeds the amount in
subparagraph (c) below; provided, however, that no such
Company Matching Contribution shall be made if it relates to compensation
attributable to services performed prior to the date that the distribution
option election for that contribution becomes irrevocable.  A Participant only shall be eligible for
Company Matching Contributions for a Plan Year if (i) he or she was eligible to
participate in the Plan during such Plan Year and (ii) was employed by the
Affiliated Group as of the last day of such Plan Year.

(a)           The
maximum matching contribution the Participant was eligible to receive for the
Plan Year under the RSP based upon the Participant’s Eligible Earnings as
defined in the RSP for the Plan Year, but determined without regard to the
limitations of Code Section 401(a)(17) and any Base Pay deferrals and Incentive
Plan deferrals pursuant to Sections 4.1 and 4.2.

(b)           The
Participant’s Before-Tax Eligible Deferrals and Roth Contributions under the
RSP for the Plan Year plus the Participant’s Base Pay deferrals and Incentive
Plan deferrals credited to the Participant’s Account during the Plan Year
pursuant to Sections 4.1 and 4.2.

(c)           The
Matching Contribution credited to the Participant’s account under the RSP for
the Plan Year.

 

8

 

4.6           Other Company Contributions.  The Company may, from time to time, in its
sole discretion, direct that a special credit in such amount as the Company
shall determine be made to a specified Participant’s Account in order to
(i) mitigate an unintended shortfall in matching contribution credit, or
(ii) implement provisions of an employment agreement.  A special credit may be awarded subject to
such vesting requirement as the Company shall determine (provided that upon a
Change in Control, any special credit shall become vested if the affected
Participant has not previously incurred a Separation from Service) and,
notwithstanding any provision of this Plan to the contrary, to the extent any
such special credit has not become vested, it shall not be paid under the Plan.

4.7           Elections.  Unless otherwise specified by the Committee
in accordance with procedures established from time to time, an election to
defer Base Pay, Incentive Plan compensation and LTIP Awards shall apply only
with respect to the compensation to which such election specifically relates,
and such Deferral Election cannot be revoked. 
The Committee may, in its sole discretion, cancel a Participant’s
Deferral Election due to an Unforeseeable Emergency or a hardship distribution
pursuant to Treasury Regulation Section 1.401(k)-1(d)(3).

ARTICLE V

FORMER PLANS AND TRANSITION RULES

 

5.1           Prior
Plans.  As described in more detail
in Appendix A, the Plan governs the terms and conditions of all or a portion of
the amounts previously earned under the following plans (each a “Prior Plan”):  (i) the Duke Power Company Compensation
Deferral Plan, first effective as of July 1, 1983 (“CDP”), (ii) the
Panhandle Eastern Corporation Key Executive Deferred Compensation Plan as
amended and restated January 1, 1996 (“KEDCP”), (iii) the Crescent
Resources Incentive Deferral Plan (“CRIDP”), (iv) the Company’s Supplementary
Defined Contribution Plan, (v) the Company’s Incentive Deferral Plan, (vi) the
Cinergy Corp. 401(k) Excess Plan, (vii) the Cinergy Corp. Nonqualified Deferred
Incentive Compensation Plan and (viii) the Cinergy Corp. Excess Profit Sharing
Plan.  For 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 rules established
by the Committee, the “investment” of his or her Account in one or more
Investment Options hereunder.  The
Participant’s Account shall thereafter be automatically adjusted daily (or on
such other basis as the Committee shall approve), upward or downward, in
proportion to the total percentage return experienced for the respective period
on amounts invested in the Investment Options. 
Accounts under the Plan shall be bookkeeping accounts reflecting units
of phantom Investment Options hereunder which mirror the performance that would
have resulted from an actual investment in the corresponding Investment
Option(s).  No amounts actually shall be
invested hereunder in any Investment Option.

6.3           Subaccounts.

(a)           Company
Matching Subaccount.  Amounts
contributed to a Participant’s Account as a Company Matching Contribution
pursuant to Section 4.5 and Section 5.1 shall be held in a subaccount
within such Participant’s Account (the “Company Matching Subaccount”).  Prior to the Effective Date, the amounts in
the Company Matching Subaccount were credited and maintained as units in the
phantom Investment Option hereunder that corresponded to the Duke Energy Common
Stock Fund.  At any time after 

 

10

 

the
Effective Date, at the election of the Participant, Company Matching
Contributions and amounts that have been credited to the Company Matching
Subaccount may be transferred into units of other Investment Options available
under Section 6.2 from time to time.

(b)           Subaccount for Deferrals of Stock
Awards.  Amounts credited to a
Participant’s Account pursuant to Section 4.3 shall be held in a
subaccount within such Participant’s Account (the “Duke Energy Common Stock -
Stock Deferrals Subaccount”).  The
amounts in the Duke Energy Common Stock - Stock Deferrals Subaccount shall be
credited and maintained as units of a phantom investment that mirrors the
performance of Duke Energy Corporation common stock (with cash dividends
reinvested).

(c)           CDP Subaccounts.  The amounts originally credited under the CDP
and transferred to a Participant’s Account pursuant to Section 5.1 shall
be maintained in one or two separate subaccounts (the “CDP Subaccounts”), and
shall continue to be credited with interest at one of two fixed rate(s) (i.e.,
10.5% or 17.5%) formerly applicable to such accounts under the CDP.  At any time the Participant may elect to
transfer any amount from such CDP Subaccounts to another Investment Option in
the Participant’s General Account, but no amount so removed from the CDP Subaccounts
may be transferred back to such CDP Subaccounts.

(d)           Legacy Cinergy Subaccounts.  The amounts originally credited under the
Legacy Cinergy Plans and transferred to a Participant’s Account pursuant to
Section 5.1 shall be maintained in separate subaccounts hereunder (the “Legacy
Cinergy Subaccounts”).  Amounts credited
to the Cinergy Corp. 401(k) Excess Plan that are required to remain invested in
an Investment Option that mirrors the performance of Duke Energy Corporation
common stock shall be transferred to the Duke Energy Common Stock - Stock
Deferrals Subaccount.

(e)           CRIDP Subaccount.  The amounts originally credited under the
CRIDP and transferred to a Participant’s Account on January 1, 2008 shall be
maintained in separate subaccounts hereunder (the “CRIDP Subaccounts”).

6.4           Transfer
Elections.  A Participant may elect
to transfer amounts out of Subaccounts of the Participant’s Account or of any
other portion of the Participant’s Account to other phantom Investment Options
hereunder or to make changes to his or her designation of phantom Investment
Options hereunder pursuant to Section 6.2, on a daily basis (or on such
other basis as the Committee shall approve). 
Each such election to transfer or change shall be effective in
accordance with procedures established by the Committee from time to time.  Participants or Beneficiaries who are
receiving installment payments may elect to transfer amounts between phantom
Investment Options hereunder on a daily basis (or on such other basis as the
Committee shall approve).  All transfers
must be in increments of 1%.  No
transfers may be made into or out of the Duke Energy Common Stock - Stock
Deferrals Subaccount.

6.5           Adjustments
to Reflect Spin-Off of Spectra Energy Corp. 
Each phantom unit of Duke Energy Corporation common stock credited to
the Duke Energy Common Stock - Stock Deferrals Subaccount and Duke Energy
Common Stock Fund on behalf of a Participant at the time of the spin-off of
Spectra Energy Corp, whether under the Plan or a Prior Plan, was converted, as
of such spin-off, into phantom units of Spectra Energy Corp common stock and 

 

11

 

phantom
units of Duke Energy Corporation common stock and reallocated as described
below.  The number of phantom units of
Spectra Energy Corp common stock was equal to the number of shares of Spectra
Energy Corp common stock to which the Participant would have been entitled on
the spin-off had the phantom units of Duke Energy Corporation common stock
represented actual shares of Duke Energy Corporation as of the record date of
the spin-off, the resulting number of phantom units of Spectra Energy Corp
common stock being rounded down to the nearest whole unit.  The resulting number of phantom units of
Spectra Energy Corp common stock was automatically transferred from the Duke
Energy Common Stock - Stock Deferrals Subaccount and Duke Energy Common Stock
Fund and credited to the Investment Option that invested primarily in Spectra
Energy Corp common stock (the “Spectra Common Stock Fund”), effective as of the
spin-off.  Each Participant is entitled
to elect, pursuant to rules and procedures prescribed by the Company, to
reallocate amounts deemed invested in the Spectra Common Stock Fund into any
other open Investment Option.  The
Spectra Common Stock Fund shall be closed to additional deferrals and to
transfers from any other Investment Option.

6.6           Adjustments
to Stock Funds.  If there shall occur
any merger, consolidation, liquidation, issuance of rights or warrants to
purchase securities, recapitalization, reclassification, stock dividend,
spin-off, split-off, stock split, reverse stock split or other distribution
with respect to the shares of the Company or Spectra Energy Corp, or any
similar corporate transaction or event in respect of such shares, then the
Committee shall, in the manner and to the extent that it deems appropriate and
equitable to the Participants and consistent with the terms of this Plan, cause
a proportionate adjustment to be made in number and kind of shares deemed held
under the Plan.  Moreover, in the event
of any such transaction or event, the Committee, in its discretion, may provide
in substitution for any or all outstanding shares under the Plan such alternative
consideration as it, in good faith, may determine to be equitable under the
circumstances.

ARTICLE VII

BENEFITS

 

7.1           Separation
from Service.

(a)           General
Rule.  Upon the Participant’s
Separation from Service, for any reason, the amount in the Participant’s
Account shall be paid to the Participant (or to the Beneficiary designated
pursuant to Section 8.1) in accordance with the terms of the distribution
option elected by the Participant under Section 5.1 or this Article, except as
otherwise provided in this Article.

(b)           Participants Who Are Not
Retirement Eligible — Pre-2005 Deferrals. 
Notwithstanding the above, if a Participant (i) has a Separation from
Service for any reason, except death, layoff or disability, prior to becoming
eligible for early or normal retirement under the Duke Energy Retirement Cash
Balance Plan as in effect on October 3, 2004, without giving effect to
amendments adopted thereafter, and (ii) has elected term payments of
10 years or 15 years, then the portion of that Participant’s Account
that is 

 

12

 

comprised
of Pre-2005 Deferrals shall be paid instead for a 3-year term in
accordance with Section 7.3(b).

7.2           Election
of Distribution Option.

(a)           Pre-2005
Deferrals.  With respect to Pre-2005
Deferrals, each Participant has been provided the opportunity to elect from
among the distribution options specified in Section 7.3, the manner in
which such Participant’s Account shall be paid following Separation from
Service.  A Participant may change his or
her distribution option to a distribution option permitted under Section 7.3 by
completing a new election form and delivering it to the Committee.  A Participant’s election to change the form
of benefit payment shall become effective one year from the date on which the
election form was submitted to the Committee, but only if the Participant has
remained an Employee throughout such one year period.  A Participant may not elect to change the
distribution option applicable to his or her CRIDP Subaccount.

(b)           Post-2004 Deferrals.  With respect to each amount deferred under
the Plan after 2007, each Participant shall, in accordance with procedures
established from time to time by the Committee and no later than the last day
for filing the Deferral Election to which such deferrals relate, be entitled to
make a separate class-year election from among the distribution options
specified in Section 7.4.  With respect
to all amounts deferred under the Plan after 2004 and before 2008, each
Participant shall, in accordance with procedures established from time to time
by the Committee consistent with Section 7.10, be entitled to make a single
election (which may be separate for LTIP Award deferrals and all other amounts)
from among the distribution options specified in Section 7.4.  A Participant may not elect to change such
elections.

7.3           Distribution
Options for Pre-2005 Deferrals. 
Subject to the foregoing, the following distribution options are
available with respect to Pre-2005 Deferrals:

(a)           Lump Sum.  Payment of the full
amount of the Participant’s Account on the last business day of the month
following the month in which Separation from Service occurs.

(b)           Term Payments.  Payments on a
monthly basis over a term of years, which shall be either 3 years,
10 years, or 15 years, as follows: 
The Company shall determine the amount of the Participant’s Account on
the Valuation Date, and as of the last business day of each month
thereafter.  The Participant shall
receive on the last business day of each month during the term, beginning with
the last day of the month following the Valuation Date, an amount determined
pursuant to the following formula:

 

13

 

	
  amount =

  	
  V

  N

  
	
  where

  	
   

  
	
  N

  	
  represents the number of
  months remaining in the term (including the month for which the payment is
  being calculated) and

  
	
  V

  	
  represents the amount of
  the Participant’s Account as of the last day of the preceding month.

  

 

Any
remaining balance in the Participant’s Account shall be paid to the Participant
on the last day of the last month of the term. 
Distributions from the Participant’s Duke Energy Common Stock - Stock
Deferrals Subaccount shall be on an annual, rather than a monthly basis, and
the formula set forth above shall be reformed accordingly.  Term payments from the Duke Energy Common
Stock - Stock Deferrals Subaccount shall be made on the last business day of
the month immediately following each anniversary of the Valuation Date.

(c)           Legacy
Cinergy Plans.  Notwithstanding
Section 7.3(a) and (b), Pre-2005 Deferrals attributable to the Legacy Cinergy
Plans shall be payable only in a lump sum payment or in substantially equal
annual installments over a specified number of whole years from 2 to 10
years.  Distribution of the Participant’s
Account shall commence no later than 30 days after Separation from
Service.  Subsequent installments shall
be payable on or as soon as administratively practicable following each
anniversary of the payment commencement date. 
If a Participant failed to make an election under the terms of the applicable
Legacy Cinergy Plan and this Plan, the portion of his or her Account
attributable to Pre-2005 Deferrals under such applicable Legacy Cinergy Plan
shall be distributed in five substantially equal annual installments commencing
no later than 30 days after Separation from Service.

(d)           CRIDP.  Notwithstanding Section 7.3(a) and (b), all
amounts in the CRIDP Subaccounts shall be payable only in accordance with a
Participant’s original distribution election, in annual installments commencing
as soon as practicable following the date on which the Participant has a
Separation from Service and ending no later than the fifteenth anniversary of
such date.

7.4           Distribution
Options for Post-2004 Deferrals. 
Subject to the foregoing, the following distribution options are
available with respect to Post-2004 Deferrals:

(a)           Lump Sum.  Payment of the full
amount of the Participant’s Account on the last business day of the month
following the month in which Separation from Service occurs.

 

14

 

(b)           Term Payments.  Payments on a
monthly basis over a term of years, which shall be any number of whole years
from 2 to 10 years, or 15 years, as follows:  The Company shall determine the amount of the
Participant’s Account on the Valuation Date, and as of the last business day of
each month thereafter.  The Participant
shall receive on the last business day of each month during the term, beginning
with the last day of the month following the Valuation Date, an amount
determined pursuant to the following formula:

	
  amount =

  	
  V

  N

  
	
  where

  	
   

  
	
  N

  	
  represents the number of
  months remaining in the term (including the month for which the payment is
  being calculated) and

  
	
  V

  	
  represents the amount of
  the Participant’s Account as of the last day of the preceding month.

  

 

Any
remaining balance in the Participant’s Account shall be paid to the Participant
on the last day of the last month of the term. 
Distributions from the Participant’s Duke Energy Common Stock - Stock
Deferrals Subaccount shall be on an annual, rather than a monthly basis, and
the formula set forth above shall be reformed accordingly.  Term payments from the Duke Energy Common
Stock - Stock Deferrals Subaccount shall be made on the last business day of
the month immediately following each anniversary of the Valuation Date.

(c)           Default
Distribution Option.  To the extent
that a Participant does not designate the form of payment of an amount deferred
or contributed to his or her Account, such amount (adjusted for earnings and
losses) shall be distributed in a single lump sum on the last business day of
the month following the month in which Separation from Service occurs.

7.5           Payments
After Death.  If a Participant (or a
Beneficiary previously designated by a deceased Participant) dies before
receiving all amounts payable hereunder, then the remaining amounts payable
shall be paid to the specified Beneficiary of such deceased person in
accordance with the distribution option in effect, but subject to
Section 7.6; provided, however, that, except with respect to
Pre-2005 Deferrals attributable to the Legacy Cinergy Plans and Post-2004
Deferrals, if a person receiving payments over a term of years dies and an
estate is such person’s Beneficiary, then such term payments shall cease and
the remaining amount credited to the Account shall be paid to such estate in a
single lump sum within 60 days after the date of death.

7.6           Small
Payments.  If the portion of a
Participant’s Account balance attributable to Pre-2005 Deferrals, other than
amounts in the Legacy Cinergy Subaccounts and amounts transferred from the
CRIDP on January 1, 2008, at Separation from Service is less than $25,000, 

 

15

 

the
Participant’s Account shall automatically be paid in a lump sum as soon as
practicable following Separation from Service.

7.7           Form of
Payment.  All amounts due under the
Plan shall be paid in cash, except that units in the Duke Energy Common Stock -
Stock Deferrals Subaccount shall be converted to whole shares of Company common
stock and cash for any fractional share. 
To the extent that the delivery of any shares of Company common stock to
a Participant under this Plan otherwise would cause all or any portion of the
Plan to be considered an “equity compensation plan” as such term is defined in
Section 303A(8) of the New York Stock Exchange Listed Company Manual or any
successor rule (“Listed Company Manual”), then such shares shall be paid from,
and shall count against the share reserve of, a Company-sponsored “equity
compensation plan” designated by the Committee that complies with the
shareholder approval requirements contained in the Listed Company Manual.

7.8           Acceleration
of Payment in the Event of Unforeseeable Emergency.  A Participant shall have the right to request,
on a form provided by the Committee, an accelerated payment of all or a portion
of his or her Account in a lump sum if he or she experiences an Unforeseeable
Emergency.  The Committee shall have the
sole discretion to determine, in accordance with the standards and to the
extent it would not result in a material modification of Pre-2005 Deferrals
under Section 409A of the Code, whether to grant such a request and the amount
to be paid pursuant to such request. 
Whether a Participant is faced with an Unforeseeable Emergency
permitting a payment under this Section is to be determined based on the
relevant facts and circumstances of each case, but, in any case, a payment on
account of an Unforeseeable Emergency may not be made to the extent that such emergency
is or may be relieved through reimbursement or compensation from insurance or
otherwise, by liquidation of the Participant’s assets, to the extent the
liquidation of such assets would not cause severe financial hardship, or by
cessation of deferrals under the Plan.  
Payments because of an Unforeseeable Emergency must be limited to the
amount reasonably necessary to satisfy the emergency need (which may include
amounts necessary to pay any Federal, state, local, or foreign income taxes or
penalties reasonably anticipated to result from the payment).  Payment shall be made within thirty days
following the determination by the Committee that a withdrawal shall be
permitted under this Section, or such later date as may be required under
Section 7.11.  No amounts attributable to
the Cinergy Corp. Excess Profit Sharing Plan may be distributed pursuant to
this Section.

7.9           In-Service
Distribution — Certain Pre-2005 Deferrals. 
Notwithstanding any other provision of this Article VII, but only
with respect to the portion of a Participant’s Account balance attributable to
Pre-2005 Deferrals, other than amounts in the Legacy Cinergy Subaccounts, a
distribution shall be made to any Participant who, prior to Separation from
Service, files a written request for an immediate lump sum distribution in an
amount not less than $25,000 (the entire account balance in the case of
Accounts that are valued at less than $25,000), and who simultaneously agrees
in writing to a permanent forfeiture equal to 10% of the amount requested as a
distribution.  Such distribution, less
the 10% forfeiture, shall be made within 30 days following receipt by the
Company of the signed request for distribution and forfeiture agreement.  Distributions under this Section shall be
removed from a Participant’s Accounts on a prorated basis.

 

16

 

7.10         Transition
Relief for Payment Elections — Post-2004 Deferrals.  With respect to Post-2004 Deferrals, a
Participant designated by the Committee may, no later than a date specified by
the Committee (provided that such date occurs no later than December 31, 2008
or such other date as permitted under Section 409A of the Code) elect on a form
provided by the Committee to (a) change the date of payment of his or her
Subaccounts or (b) change the form of payment of his or her Subaccounts to a
form of payment otherwise permitted for that Subaccount under the Plan.  The Committee may also take any action that
it deems necessary, in its sole discretion, to amend prior Deferral Elections
or payment elections of a Participant, without the Participant’s consent, to
conform such elections to the terms of this Plan.  This Section is intended to comply with
Notice 2007-86, any subsequent notice or guidance, and the applicable proposed
and final Treasury Regulations issued under Section 409A of the Code and shall
be interpreted in a manner consistent with such intent.

7.11         Mandatory
Six-Month Delay — Post-2004 Deferrals. 
Except as otherwise provided in Sections 7.12(a) and (b), in no event
may payments of Post-2004 Deferrals commence, with respect to any Participant
who is a Specified Employee as of his or her Separation from Service, prior to
the first business day of the seventh month following such Separation from
Service (or if earlier, upon the Participant’s death) if such amounts are
otherwise payable pursuant to the Participant’s Separation from Service.  Any amount that is postponed as a result of
the prior sentence shall be accumulated through and paid on the first business
day of the seventh month following such Separation from Service (or if earlier,
upon the Participant’s death).

7.12         Discretionary
Acceleration of Payment.  To the
extent permitted by Section 409A of the Code, the Committee may, in its sole
discretion, accelerate the time or schedule of a payment of Post-2004 Deferrals
under the Plan as provided in this Section. 
The provisions of this Section are intended to comply with the exception
to accelerated payments under Treasury Regulation Section 1.409A-3(j) and shall
be interpreted and administered accordingly.   
Except as otherwise specifically provided in this Plan, the Committee
may not accelerate the time or schedule of any payment or amount scheduled to
be paid under the Plan within the meaning of Section 409A of the Code.

(a)           Domestic
Relations Orders.   The Committee
may, in its sole discretion, accelerate the time or schedule of a payment under
the Plan to an individual other than the Participant as may be necessary to
fulfill a domestic relations order (as defined in Section 414(p)(1)(B) of the
Code).

(b)           Employment
Taxes.  The Committee may, in its
sole discretion, provide for the acceleration of the time or schedule of a
payment under the Plan to pay the Federal Insurance Contributions Act (FICA) tax
imposed under Sections 3101, 3121(a), and 3121(v)(2) of the Code, or the
Railroad Retirement Act (RRTA) tax imposed under Sections 3201, 3211,
3231(e)(1), and 3231(e)(8) of the Code, where applicable, on compensation
deferred under the Plan (the FICA or RRTA amount). Additionally, the Committee
may, in its sole discretion, provide for the acceleration of the time or
schedule of a payment, to pay the income tax at source on wages imposed under
Section 3401 of the Code or the corresponding withholding provisions of
applicable state, local, or foreign tax laws as a result of the payment of the
FICA or RRTA amount, and to pay the 

 

17

 

additional
income tax at source on wages attributable to the pyramiding Section 3401 of
the Code wages and taxes. However, the total payment under this acceleration
provision must not exceed the aggregate of the FICA or RRTA amount, and the
income tax withholding related to such FICA or RRTA amount.

(c)           Payment
Upon Income Inclusion Under Section 409A. 
Subject to Section 7.11 hereof, the Committee may, in its sole
discretion, provide for the acceleration of the time or schedule of a payment
under the Plan at any time the Plan fails to meet the requirements of Section
409A of the Code. The payment may not exceed the amount required to be included
in income as a result of the failure to comply with the requirements of Section
409A of the Code.

(d)           Payment
of State, Local, or Foreign Taxes. Subject to Section 7.11 hereof, the
Committee may, in its sole discretion, provide for the acceleration of the time
or schedule of a payment under the Plan to reflect payment of state, local, or
foreign tax obligations arising from participation in the Plan that apply to an
amount deferred under the Plan before the amount is paid or made available to
the participant (the state, local, or foreign tax amount). Such payment may not
exceed the amount of such taxes due as a result of participation in the
Plan.  The payment may be made in the
form of withholding pursuant to provisions of applicable state, local, or
foreign law or by payment directly to the participant.  Additionally, the Committee may, in its sole
discretion, provide for the acceleration of the time or schedule of a payment
under the Plan to pay the income tax at source on wages imposed under Section
3401 of the Code as a result of such payment and to pay the additional income
tax at source on wages imposed under Section 3401 of the Code attributable to
such additional wages and taxes. However, the total payment under this
acceleration provision must not exceed the aggregate of the state, local, and
foreign tax amount, and the income tax withholding related to such state,
local, and foreign tax amount.

(e)           Certain
Offsets.  Subject to Section 7.11
hereof, the Committee may, in its sole discretion, provide for the acceleration
of the time or schedule of a payment under the Plan as satisfaction of a debt
of the Participant to the Company (or any entity which would be considered to
be a single employer with the Company under Section 414(b) or Section 414(c) of
the Code), where such debt is incurred in the ordinary course of the service
relationship between the Company (or any entity which would be considered to be
a single employer with the Company under Section 414(b) or Section 414(c) of
the Code) and the Participant, the entire amount of reduction in any of the
taxable years of the Company (or any entity which would be considered to be a
single employer with the Company under Section 414(b) or Section 414(c) of the
Code) does not exceed $5,000, and the reduction is made at the same time and in
the same amount as the debt otherwise would have been due and collected from
the Participant.

(f)            Bona
Fide Disputes as to a Right to a Payment. 
Subject to Section 7.11 hereof, the Committee may, in its sole
discretion, provide for the acceleration of the time or schedule of a payment
under the Plan where such payments occur as part of a settlement between the
Participant and the Company (or any entity which would be considered to be a
single employer with the Company under Section 414(b) or Section 

 

18

 

414(c) of the Code) of an arm’s length, bona fide dispute as
to the Participant’s right to the deferred amount.

(g)           Other
Events and Conditions.  Subject to
Section 7.11 hereof, a payment may be accelerated upon such other events and
conditions as the Internal Revenue Service may prescribe in generally
applicable guidance published in the Internal Revenue Bulletin.

7.13         Delay of
Payments.  To
the extent permitted under Section 409A of the Code, the Committee may, in its
sole discretion, delay payment of Post-2004 Deferrals under any of the
following circumstances, provided that the Committee treats all payments to
similarly situated Participants on a reasonably consistent basis:

(a)           Payments
subject to Section 162(m).  A payment
may be delayed to the extent that the Committee reasonably anticipates that if
the payment were made as scheduled, the Company’s deduction with respect to
such payment would not be permitted due to the application of Section 162(m) of
the Code.  If a payment is delayed
pursuant to this Section, then the payment must be made either (i) during the
Company’s first taxable year in which the Committee reasonably anticipates, or
should reasonably anticipate, that if the payment is made during such year, the
deduction of such payment will not be barred by application of Section 162(m)
of the Code, or (ii) during the period beginning with the first business day of
the seventh month following the Participant’s Separation from Service (the “six
month anniversary”) and ending on the later of (x) the last day of the taxable
year of the Company in which the six month anniversary occurs or (y) the 15th
day of the third month following the six month anniversary.  Where any scheduled payment to a specific
Participant in a Company’s taxable year is delayed in accordance with this
paragraph, all scheduled payments to that Participant that could be delayed in
accordance with this paragraph must also be delayed.  The Committee may not provide the Participant
an election with respect to the timing of the payment under this Section.  For purposes of this Section, the term
Company includes any entity which would be considered to be a single employer
with the Company under Section 414(b) or Section 414(c) of the Code.

(b)           Federal
Securities Laws or Other Applicable Law. 
A Payment may be delayed where the Committee reasonably anticipates that
the making of the payment will violate federal securities laws or other
applicable law; provided that the delayed payment is made at the earliest date
at which the Committee reasonably anticipates that the making of the payment
will not cause such violation.  For
purposes of the preceding sentence, the making of a payment that would cause
inclusion in gross income or the application of any penalty provision or other
provision of the Code is not treated as a violation of applicable law.

(c)           Other
Events and Conditions.  A payment may
be delayed upon such other events and conditions as the Internal Revenue
Service may prescribe in generally applicable guidance published in the
Internal Revenue Bulletin.

 

19

7.14           Actual Date of Payment.  If calculation of
the amount of the payment is not administratively practicable due to events
beyond the control of the Participant (or Beneficiary), the payment will be
treated as made upon the date specified under the Plan if the payment is made
during the first calendar year in which the calculation of the amount of the
payment is administratively practicable. Notwithstanding the foregoing, payment
must be made no later than the latest possible date permitted under Section
409A of the Code. Moreover, notwithstanding any other provision of this Plan to
the contrary except Section 7.11, and to the extent permitted by Section 409A
of the Code, a payment will be treated as made upon the date specified under
the Plan if the payment is made as close as administratively practicable to the
relevant payment date specified herein, and in any event within the same
calendar year.

ARTICLE VIII

BENEFICIARY

 

8.1           Designation
of Beneficiary.  A Participant shall
designate a Beneficiary to receive benefits under the Plan by submitting to the
Committee a Designation of Beneficiary in the form required by the
Committee.  If more than one Beneficiary
is named, the share and precedence of each Beneficiary shall be indicated.  A Participant shall have the right to change
the Beneficiary by submitting to the Committee a Change of Beneficiary in the
form provided, but no change of Beneficiary shall be effective until
acknowledged in writing by the Company. 
If a deceased Participant has failed to specify a surviving Beneficiary
then the Participant’s estate shall be considered to be the Beneficiary

8.2           Designation
by Beneficiary.  A Beneficiary who
has become entitled to receive benefits shall designate a Beneficiary.

8.3           Discharge
of Obligations.  Any payment made by
the Company, in good faith and in accordance with this Plan, shall fully
discharge the Company from all further obligations with respect to that
payment.  If the Company has any doubt as
to the proper Beneficiary to receive payments hereunder, the Company shall have
the right to withhold such payments until the matter is finally adjudicated.

8.4           Payment
to Minors and Incapacitated Persons. 
In the event that any amount is payable to a minor or to any person who,
in the judgment of the Committee, is incapable of making proper disposition
thereof, such payment shall be made to the legal guardian of the property of
such minor or such person.  The Company
shall make such payments as directed by the Committee without the necessary
intervention of any guardian or like fiduciary, and without any obligation to
require bond or to see to the further application of such payment.  Any payment so made shall be in complete
discharge of the Plan’s obligation to the Participant and his or her
Beneficiaries.

ARTICLE IX

NATURE OF COMPANY’S OBLIGATION

 

9.1           Unsecured
Promise.  The Company’s obligation to
the Participant under this Plan shall be an unfunded and unsecured promise to
pay.  The rights of a Participant or
Beneficiary under this Plan shall be solely those of an unsecured general
creditor of the Company.  The 

 

20

 

Company
shall not be obligated under any circumstances to set aside or hold assets to
fund its financial obligations under this Plan.

9.2           No
Right to Specific Assets. 
Notwithstanding the foregoing, the Company may, in its sole discretion
establish such accounts, trusts, insurance policies or arrangements, or any
other mechanisms it deems necessary or appropriate to account for or fund its obligations
under the Plan.  Any assets which the
Company may set aside, acquire or hold to help cover its financial liabilities
under this Plan are and remain general assets of the Company subject to the
claims of its creditors.  The Company
does not give, and the Plan does not give, any beneficial ownership interest in
any assets of the Company to a Participant or Beneficiary.  All rights of ownership in any assets are and
remain in the Company.  Any general asset
used or acquired by the Company in connection with the liabilities it has
assumed under this Plan shall not be deemed to be held under any trust for the
benefit of the Participant or any Beneficiary, and no general asset shall be
considered security for the performance of the obligations of the Company.  Any asset shall remain a general, unpledged,
and unrestricted asset of the Company.

9.3           Plan
Provisions.  The Company’s liability
for payment of benefits shall be determined only under the provisions of this
Plan, as it may be amended from time to time.

ARTICLE X

TERMINATION, AMENDMENT, MODIFICATION OR

SUPPLEMENTATION OF PLAN

 

10.1         Right to
Terminate and Amend.  The Committee
retains the sole and unilateral right to terminate, amend, modify or supplement
this Plan, in whole or in part, at any time. 
The Committee may delegate the right to amend the Plan, subject to any
limitations it may impose, to an officer of the Company.  No such action shall adversely affect a
Participant’s right to receive amounts then credited to a Participant’s Account
with respect to events occurring prior to the date of such amendment.  With respect to Post-2004 Deferrals, subject
to Section 7.11 hereof, the Committee may, in its sole discretion to the extent
permitted in Section 409A of the Code, provide for the acceleration of the time
or schedule of a payment under the Plan upon the termination of the Plan.  With respect to Pre-2005 Deferrals
attributable to the Legacy Cinergy Plans, the Committee may, in its sole
discretion, provide for the acceleration of the time or schedule of a payment
under the Plan provided such payments commence no later than the earlier of a
Participant’s death or Separation from Service.

10.2         Change in Control.  In the event of a Change in Control, the Plan
shall become irrevocable and may not be amended or terminated without the
written consent of each Plan Participant who may be affected in any way by such
amendment or termination, either at the time of such action or at any time
thereafter.  This restriction in the
event of a Change in Control shall be determined by reference to the date any
amendment or resolution terminating the Plan is actually signed by an
authorized party rather than the date such action purports to be effective.

 

21

 

ARTICLE XI

RESTRICTIONS ON ALIENATION OF BENEFITS

 

11.1         No
Assignment.  Except as permitted by
the Plan, no right or benefit under the Plan shall be subject to anticipation,
alienation, sale, assignment, pledge, encumbrance or charge.  Any attempt to anticipate, alienate, sell,
assign, pledge, encumber or charge these benefits shall be void.  No right or benefit under this Plan shall in
any manner be liable for or subject to the debts, contracts, liabilities, or
torts of the person entitled to the benefit. 
If any Participant or Beneficiary under the Plan should become bankrupt
or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge
any right to a benefit hereunder, then the right or benefit, in the discretion
of the Committee, shall cease.  In these
circumstances, the Committee may hold or apply the benefit payment or payments,
or any part of it, for the benefit of the Participant or his or her
Beneficiary, the Participant’s spouse, children, or other dependents, or any of
them, in any manner and in any portion that the Committee may deem proper.  Notwithstanding the foregoing, to the extent
permitted by Section 409A of the Code and subject to Section 7.12, the
Committee shall honor a judgment, order or decree from a state domestic
relations court which requires the payment of part or all of a Participant’s or
Beneficiary’s interest under this Plan to an “alternate payee” as defined in
Section 414(p) of the Code.

ARTICLE XII

ADMINISTRATION

 

12.1         Top Hat
Plan.  The Company intends for the
Plan to be “top-hat” plan for a select group of management or highly
compensated employees which is exempt from substantially all of the
requirements of Title I of ERISA pursuant to Sections 201(2), 301(a)(3),
and 401(a)(1) of ERISA.  The Company is
the Plan sponsor under Section 3(16)(B) of ERISA.

12.2         Plan
Administrator.  The Committee is the
administrator of the Plan within the meaning of Section 3(16)(A) of
ERISA.  As administrator, the Committee
has the authority (without limitation as to other authority) to delegate its
duties to agents and to make rules and regulations that it believes are
necessary or appropriate to carry out the Plan. 
The Committee has the discretion as a Plan fiduciary (i) to
interpret and construe the terms and provisions of the Plan (including any
rules or regulations adopted under the Plan), (ii) to determine questions
of eligibility to participate in the Plan and (iii) to make factual
determinations in connection with any of the foregoing.  A decision of the Committee with respect to any
matter pertaining to the Plan including without limitation the Employees
determined to be Participants, the benefits payable, and the construction or
interpretation of any provision thereof, shall be conclusive and binding upon
all interested persons.

 

22

 

ARTICLE XIII

CLAIMS PROCEDURE

 

13.1         Claim.  If a Participant has any grievance,
complaint, or claim concerning any aspect of the operation or administration of
the Plan, including but not limited to claims for benefits and complaints
concerning the performance or administration of the phantom investment funds
(collectively referred to herein as “claim” or “claims”), the Participant shall
submit the claim to the Committee, which shall have the initial responsibility
for deciding the claim.

13.2         Written
Claim.  A claim for benefits shall be
considered as having been made when submitted in writing by the claimant to the
Committee.  No particular form is
required for the claim, but the claim must identify the name of the claimant
and describe generally the benefit to which the claimant believes he or she is
entitled.  The claim may be delivered
personally during normal business hours or mailed to the Committee.  All such claims shall be submitted in writing
and shall set forth the relief requested and the reasons the relief should be
granted.  All such claims must be
submitted with the “applicable limitations period.”  The “applicable limitations period” shall be
two years beginning on:  (i) in the
case of any lump-sum payment, the date on which the payment was made,
(ii) in the case of an installment payment, the date of the first in the
series of payments, or (iii) for all other claims, the date on which the
action complained or grieved of occurred.

13.3         Committee
Determination.  The Committee shall
determine whether, or to what extent, the claim may be allowed or denied under
the terms of the Plan.  If the claim is
wholly or partially denied, the claimant shall be so informed by written notice
within 90 days after the day the claim is submitted unless special
circumstances require an extension of time for processing the claim.  If such an extension of time for processing
is required, written notice of the extension shall be furnished to the claimant
prior to the termination of the initial 90-day period.  Such extension may not exceed an additional
90 days from the end of the initial 90-day period.  The extension notice shall indicate the
special circumstances requiring an extension of time and the date by which the
Plan expects to render the final decision. 
If notice of denial of a claim (in whole or in part) is not furnished
within the initial 90-day period after the claim is submitted (or, if
applicable, the extended 90-day period), the claimant shall consider that
his or her claim has been denied just as if he or she had received actual
notice of denial.

13.4         Notice of Determination.  The notice informing the claimant that his or
her claim has been wholly or partially denied shall be written in a manner
calculated to be understood by the claimant and shall include:

(a)           The
specific reason(s) for the denial.

(b)           Specific
reference to pertinent Plan provisions on which the denial is based.

 

23

 

(c)           A
description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary.

(d)           Appropriate
information as to the steps to be taken if the Participant or Beneficiary
wishes to submit his or her claim for review.

13.5         Appeal.  If the claim is wholly or partially denied,
the claimant (or his or her authorized representative) may file an appeal of
the denied claim with the Committee requesting that the claim be reviewed.  The Committee shall conduct a full and fair
review of each appealed claim and its denial. 
Unless the Committee notifies the claimant that due to the nature of the
benefit and other attendant circumstances he or she is entitled to a greater
period of time within which to submit his or her request for review of a denied
claim, the claimant shall have 60 days after he or she (or his or her
authorized representative) receives written notice of denial of his or her
claim within which such request must be submitted to the Committee.

13.6         Request
for Review.  The request for review
of a denied claim must be made in writing in connection with making such
request, the claimant or his or her authorized representative may:

(a)           Review
pertinent documents.

(b)           Submit
issues and comments in writing.

13.7         Determination
of Appeal.  The decision of the
Committee regarding the appeal shall be promptly given to the claimant in
writing and shall normally be given no later than 60 days following the
receipt of the request for review.  However,
if special circumstances (for example, if the Committee decides to hold a
hearing on the appeal) require a further extension of time for processing, the
decision shall be rendered as soon as possible, but no later than 120 days
after receipt of the request for review. 
However, if the Committee holds regularly scheduled meetings at least
quarterly, a decision on review shall be made by no later than the date of the
meeting which immediately follows the Plan’s receipt of a request for review,
unless the request is filed within 30 days preceding the date of such
meeting.  In such case, a decision may be
made by no later than the date of the second meeting following the Plan’s
receipt of the request for review.  If
special circumstances (for example, if the Committee decides to hold a hearing
on the appeal) require a further extension of time for processing, the decision
shall be rendered as soon as possible, but no later than the third meeting
following the Plan’s receipt of the request for review.  If special circumstances require that the
decision shall be made beyond the initial time for furnishing the decision,
written notice of the extension shall be furnished to the claimant (or his or
her authorized representative) prior to the commencement of the extension.  The decision on review shall be in writing
and shall be furnished to the claimant or to his or her authorized
representative within the appropriate time for the decision.  If a decision on review is not furnished
within the appropriate time, the claim shall be deemed to have been denied on
appeal.

13.8         Hearing.  The Committee may, in its sole discretion,
decide to hold a hearing if it determines that a hearing is necessary or
appropriate in order to make a full and fair review of the appealed claim.

 

24

 

13.9         Decision.  The decision on review shall include specific
reasons for the decision, written in a manner calculated to be understood by
the claimant, as well as specific references to the pertinent Plan provisions
on which the decision is based.

13.10       Exhaustion
of Appeals.  A Participant must
exhaust his or her rights to file a claim and to request a review of the denial
of his or her claim before bringing any civil action to recover benefits due to
him or her under the terms of the Plan, to enforce his or her rights under the
terms of the Plan, or to clarify his or her rights to future benefits under the
terms of the Plan.  No action at law or
in equity to recover under this Plan shall be commenced later than one year
from the date of the decision on review (or deemed denial if no decision is
issued).

13.11       Committee’s
Authority.  The Committee shall
exercise its responsibility and authority under this claims procedure as a
fiduciary and, in such capacity, shall have the discretionary authority and
responsibility (a) to interpret and construe the Plan and any rules or
regulations under the Plan, (b) to determine the eligibility of Employees
to participate in the Plan, and the rights of Participants to receive benefits
under the Plan, and (c) to make factual determinations in connection with
any of the foregoing.

ARTICLE XIV

GENERAL PROVISIONS

 

14.1         No Right
to Employment.  Nothing in this Plan
shall be deemed to give any person the right to remain in the employ of the
Affiliated Group or its affiliates or affect the right of the Affiliated group
or its affiliates to terminate any Participant’s employment with or without
cause.

14.2         Withholding.  Any amount required to be withheld under
applicable Federal, state, local or other tax laws (including any amounts
required to be withheld under Section 3121(v) of the Code) shall be
withheld in such manner as the Committee shall determine and any payment under
the Plan shall be reduced by the amount so withheld, as well as by any other
lawful withholding.

14.3         Governing
Law.  This Plan shall be construed
and administered in accordance with the laws of the State of North Carolina to
the extent that such laws are not preempted by Federal law.

14.4         Transfer
of Accounts.  The Account of each
Spectra Energy Participant maintained under the Plan immediately prior to the
Distribution Date shall be transferred to the Spectra Energy Corp Executive
Savings Plan and assumed by Spectra Energy Corp as of the Distribution Date
(the “Assumed Amounts”). For purposes of this Plan, the term “Assumed Amounts”
shall include any amounts of Base Pay or Incentive Plan awards of a Spectra
Energy Participant that are earned but not yet paid as of the Distribution Date
or equity awards granted to a Spectra Energy Participant under the Duke Energy
Corporation 1998 Long-Term Incentive Plan, that were properly deferred by
the Spectra Energy Participant under the Plan but that had not yet been
credited to his or her Account under the Plan as of the Distribution Date.  Each such Spectra Energy Participant shall
have no further rights under the Plan immediately after his or 

 

25

 

her Account
is transferred to the Spectra Energy Corp Executive Savings Plan and assumed by
Spectra Energy Corp in accordance with the terms and conditions of the Employee
Matters Agreement by and between Duke Energy Corporation and Spectra Energy
Corp (the “Employee Matters Agreement”). 
Capitalized terms used in this Section 14.5 that are not defined in this
Plan shall have the meaning set forth in the Employee Matters Agreement.

14.5         Compliance
with Section 409A of the Code.  It is
intended that the Plan comply with the provisions of Section 409A of the Code,
so as to prevent the inclusion in gross income of any amounts deferred
hereunder in a taxable year that is prior to the taxable year or years in which
such amounts would otherwise actually be paid or made available to Participants
or Beneficiaries. This Plan shall be construed, administered, and governed in a
manner that effects such intent, and the Committee shall not take any action
that would be inconsistent with such intent. 
Although the Committee shall use its best efforts to avoid the
imposition of taxation, interest and penalties under Section 409A of the Code,
the tax treatment of deferrals under this Plan is not warranted or
guaranteed.  Neither the Company, the
other members of the Affiliated Group, their respective directors, officers,
employees and advisors, the Board, nor the Committee (nor its designee) shall
be held liable for any taxes, interest, penalties or other monetary amounts
owed by any Participant, Beneficiary or other taxpayer as a result of the
Plan.  Any reference in this Plan to
Section 409A of the Code will also include any proposed, temporary or final
regulations, or any other guidance, promulgated with respect to such Section
409A of the Code by the U.S. Department of Treasury or the Internal Revenue
Service.  For purposes of the Plan, the
phrase “permitted by Section 409A of the Code,” or words or phrases of similar
import, shall mean that the event or circumstance shall only be permitted to
the extent it would not cause an amount deferred or payable under the Plan to
be includible in the gross income of a Participant or Beneficiary under Section
409A(a)(1) of the Code.

14.6         Electronic
or Other Media.  Notwithstanding any
other provision of the Plan to the contrary, including any provision that
requires the use of a written instrument, the Committee may establish
procedures for the use of electronic or other media in communications and
transactions between the Plan or the Committee and Participants and
Beneficiaries.  Electronic or other media
may include, but are not limited to, e-mail, the Internet, intranet systems and
automated telephonic response systems.

 

IN WITNESS
WHEREOF, this amendment and restatement of the Plan is executed on behalf of
the Corporation this 31st day of October, 2007.

 

	
   

  	
  DUKE ENERGY CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Karen R. Feld

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President, Corporate Human Resources

  

 

 

26

 

 

Appendix A

 

Prior Plans

 

A-1         Duke Power Company Compensation
Deferral Plan (“CDP”).  As of
January 1, 1997, each Participant’s Account was credited with the amount,
if any, that the Participant had deferred into the CDP as of December 31, 1996,
plus interest compounded at the “Benefit Rate” applicable to such deferred
amounts.

A-2         Key Executive Deferred Compensation
Plan (“KEDCP”).  As of January 1,
1999, each Participant’s Account was credited with the amount, if any, that the
Participant had deferred into the KEDCP as of December 31, 1998, plus all
income credited thereon provided such Participant had made an irrevocable
election in a form acceptable to the Company to be bound by the terms of the
Plan and, specifically Section 7.2, with respect to all such amounts
deferred by the Participant under the KEDCP. 
Any Employee or former employee of PanEnergy Corporation or its
affiliated companies or its predecessors who was not designated a Participant
by the Company in connection with the transfer of such individual’s account to
the Plan shall have such accounts maintained under the Plan but subject to all
of the terms and conditions of the KEDCP as in effect on December 31,
1998.

A-3         Crescent Resources Incentive
Deferral Plan (“CRIDP”).  As of
January 1, 2003, the Account of each individual who was then eligible to
participate in the Plan was credited with (i) an amount under the Duke Energy
Common Stock Fund equal to the value, if any, of any “Phantom Shares” credited
to the Participant’s account in the CRIDP immediately prior to such date and
(ii) an amount equal to the balance of the Participant’s interest bearing
account in the CRIDP immediately prior to such date and such amount was
credited as units in such phantom Investment Option(s) as the Participant
elected, and in the absence of such an election was credited to the phantom
Investment Option that corresponded to the RSP’s Money Market Fund.  As of January 1, 2008, the account of any
remaining participant in the CRIDP was transferred to an Account under the
Plan.

A-4         Supplementary Defined Contribution
Plan.  As of January 1, 1997, each
Participant’s Account was credited with an amount equal to the balance, if any,
of the Participant’s account under the Company’s Supplementary Defined
Contribution Plan.

A-5         Incentive Deferral Plan.  As of January 1, 1997, each Participant’s
Account was credited with an amount equal to the balance, if any, of the
Participant’s account under the Company’s Incentive Deferral Plan.

A-6         Legacy Cinergy Plans.  As of January 1, 2008, each Participant’s
Account was credited with an amount equal to the balance, if any, of the
Participant’s accounts under the Legacy Cinergy Plans immediately prior to such
date.  LTIP Awards and certain
nonelective contributions deferred under the Cinergy Corp. 401(k) Excess Plan
shall be credited as of January 1, 2008 to the Duke Energy Common Stock — Stock
Deferrals Subaccount.

 

27

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