Document:

EXHIBIT 10.4

 

PERFORMANCE AWARD AGREEMENT

 

This Performance
Award Agreement (the “Agreement”) has been made as of                                  
(the “Date of Grant”) between Duke Energy Corporation,
a Delaware corporation, with its principal offices in Charlotte, North Carolina
(the “Corporation”), and James E. Rogers (the
“Grantee”).

 

RECITALS

 

The Corporation has entered
into an employment agreement with the Grantee dated February 19, 2009 (the
“Employment Agreement”), pursuant to which it has agreed to make certain
equity-based awards to the Grantee, including the award memorialized by this
Agreement (the “Award”).  The Award
memorialized by this Agreement is made pursuant to the Duke Energy Corporation
2006 Long-Term Incentive Plan, as it may, from time to time, be further amended
(the “Plan”).  The applicable provisions
of the Plan are incorporated in this Agreement by reference, including the
definitions of terms contained in the Plan (unless such terms are otherwise
defined herein).

 

AWARD

 

In accordance with the Plan
and the Employment Agreement, the Corporation has made this Award, effective as
of the Date of Grant and upon the following terms and conditions:

 

Section 1.  Number and Nature of
Performance Shares and Tandem Dividend Equivalents.

 

(a)                                  At maximum
performance, the number of Performance Shares and the number of tandem Dividend
Equivalents subject to Section 2(a)(i) and the remaining provisions
of this Award (other than Section 2(a)(ii)) are each                 ;
at target performance, the number of Performance Shares and the number of
tandem Dividend Equivalents subject Section 2(a)(i) and the remaining
provisions of this Award (other than Section 2(a)(ii)) are each               .  Such maximum and target number of Performance
Shares shall be subject to adjustment in respect of attainment of safety goals
as further described in Section 2(a)(i). 
The Performance Shares described in this Section 1(a) are
herein referred to as the “Annual Performance Shares.”

 

(b)                                 At maximum
performance, the number of Performance Shares and the number of tandem Dividend
Equivalents subject to Section 2(a)(ii) and the remaining provisions
of this Award (other than Section 2(a)(i)) are each               ;
at target performance, the number of Performance Shares and the number of
tandem Dividend Equivalents subject Section 2(a)(ii) and the
remaining provisions of this Award (other than Section 2(a)(i)) are each                  .  The Performance Shares described in this Section 1(b) are
herein referred to as the “Long-Term Performance Shares” and, together with the
Annual Performance Shares, as the “Performance Shares.”

 

 

(c)                                  Each
Performance Share, upon becoming vested before its expiration, represents a
right to receive payment in the form of one (1) share of Common
Stock.  Each tandem Dividend Equivalent,
after its tandem Performance Share vests, represents a right to receive a cash
payment equivalent in amount to the aggregate cash dividends declared and paid
on one (1) share of Common Stock for the period beginning on the Date of
Grant and ending on the date the vested, tandem Performance Share is paid or
deferred and before the Dividend Equivalent expires.  Performance Shares and Dividend Equivalents
are used solely as units of measurement, and are not shares of Common Stock and
the Grantee is not, and has no rights as, a shareholder of the Corporation by
virtue of this Award.

 

Section 2.  Vesting of Performance Shares.

 

(a)                                  Performance
Goals

 

Except
as otherwise provided in this Section 2, the Performance Shares shall vest
only if and to the extent the Compensation Committee of the Board of Directors
of the Corporation (the “Committee”), or its delegatee, determines that the
performance goals for the respective performance period (the “Performance Goals”)
have been met (provided that such determination in respect of any performance
period shall be made not later than the first March 15 following the end
of the applicable performance period).  To
the extent Performance Goals are not met, the Performance Shares that do not so
become vested shall be forfeited.

 

(i)                                     The following
Performance Goal shall apply with respect to the Annual Performance Shares and the
related Dividend Equivalents.  Provided
Grantee’s
continuous employment by the Corporation, including Subsidiaries, has not
terminated, or as otherwise provided in Sections 2(b) or 2(c), 80% of such
Performance Shares shall become vested upon the written determination by the
Committee, or its delegatee, in its sole discretion, of the extent to which the
Corporation achieves the same goals (including the safety penalty and adder) established
by the Committee for the other executive officers of the Corporation in respect
of corporate performance under the Duke Energy Corporation Executive Short-Term
Incentive Plan for the period beginning                          
and ending                                    
(the “Short-Term Performance Period”), and the remaining 20% of such
Performance Shares shall become vested upon the written determination by the
Committee, or its delegatee, in its sole discretion, of the extent to which the
Grantee achieves the individual goals established by the Committee for the Short-Term
Performance Period (as set forth on Schedule I hereto), in each case in accordance
with the applicable vesting percentage specified in the following schedule
(expressed as a percent of the target number of Annual Performance Shares) and
subject to the adjustments described therein, and such Annual Performance Shares
that do not so become vested shall be forfeited:

 

	
  Nature of 

  Performance 

  Goal*

  	
   

  	
  Vesting
  Percentage 

  (Minimum Performance)

  	
   

  	
  Vesting 

  Percentage (Target

  Performance)

  	
   

  	
  Vesting
  Percentage 

  (Maximum 

  Performance)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

2

 

*When
a performance determination is at a level between those specified, the
Committee, or its delegatee, in its sole discretion, shall interpolate to
determine the applicable vesting percentage.

 

**
If EPS performance is at less than the minimum level, the Committee reserves
discretion to reduce the amounts otherwise payable by reason of attainment of
the O&M and Reliability Goals.

 

(ii)                                  The following
Performance Goal shall apply with respect to the Long-Term Performance Shares
and the related Dividend Equivalents. 
Provided Grantee’s continuous employment by the Corporation, including
Subsidiaries, has not terminated, or as otherwise provided in Sections 2(b) or
2(c), such Performance Shares shall become vested upon the written
determination by the Committee, or its delegatee, in its sole discretion, of
the extent to which the Corporation achieves the same performance share goals
established by the Committee for the other executive officers of the
Corporation under the Corporation’s        
long-term incentive program for the period beginning                           
and ending                        
(the “Long-Term Performance Period” and, together with the Short-Term
Performance Period, each a “Performance Period”) in accordance with the
applicable vesting percentage specified in the following schedule (expressed as
a percent of the target number of Long-Term Performance Shares), and such Long-Term
Performance Shares that do not so become vested shall be forfeited:

 

	
  Nature of 

  Performance 

  Goal*

  	
   

  	
  Vesting
  Percentage 

  (Minimum Performance)

  	
   

  	
  Vesting 

  Percentage (Target 

  Performance)

  	
   

  	
  Vesting
  Percentage 

  (Maximum 

  Performance)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

*When
a performance determination is at a level between those specified, the
Committee, or its delegatee, in its sole discretion, shall interpolate to
determine the applicable vesting percentage.

 

(b)                                 Certain
Terminations

 

The provisions of this Section 2(b) shall
apply in the event that, prior to the date that the determination of the
achievement of each respective Performance Goal is made, the Grantee’s
continuous employment by the Corporation, including Subsidiaries, terminates as
follows:

 

(i)                                     If such
employment terminates as a result of termination of such employment (1) by
the Corporation without “Cause” (as defined in the Employment Agreement) or (2) by
the Grantee with “Good Reason” (as defined in the Employment Agreement) or (3) by
reason of retirement of the Grantee with approval of the Board of Directors of
the Corporation (the “Board”), subject to the timely execution and
non-revocation of a release of claims as described in the Employment Agreement,
each Performance Share outstanding at the time of such termination shall remain
outstanding and shall be payable (if at all) as determined with its terms
without regard to the termination of employment.

 

(ii)                                  If such
employment terminates (1) as the result of the Grantee’s death or (2) as
the result of the Grantee’s disability (meaning any physical or mental illness
or 

 

3

 

injury
that precludes Grantee from performing any job for which he is qualified and
able to perform based upon his education, training or experience), subject to
the timely execution and non-revocation of a release of claims as further described
in the Employment Agreement, each Performance Share outstanding at the time of
such termination shall remain outstanding and shall be payable (if at all) as
determined with its terms without regard to the termination of employment,
provided that the amount payable shall be such proportion of the amount
otherwise payable that the number of days elapsed at the time of termination
(inclusive) in the applicable Performance Period not yet concluded at the time
of termination bears to the total number of days in the applicable Performance
Period.

 

(iii)                               If such
employment terminates as a result of termination of such employment (1) by
the Employee other than with “Good Reason” (as defined in the Employment
Agreement) and other than by reason of retirement with the approval of the
Board or (2) by the Corporation  for
“Cause” (as defined in the Employment Agreement), each Performance Share
outstanding at the time of such termination shall expire and be forfeited
immediately.

 

(iv)                              If, following
the occurrence of a Change in Control (as defined in the Plan as in effect on
the effective date of the Employment Agreement) and before the second
anniversary of such occurrence, such employment is terminated (1) by the
Corporation without “Cause” (as defined in the Employment Agreement), (2) by
the Grantee with “Good Reason” (as defined in the Employment Agreement) or (3) by
reason of retirement of the Grantee with the approval of the Board, each
Performance Share subject to this Award that is then outstanding shall vest
immediately upon such termination based on the target level of performance,
irrespective of any subsequent determination of the achievement of each
Performance Goal.

 

(c)                                  Approved Leave
of Absence

 

In the event that Grantee is
on an employer-approved, personal leave of absence on the date that the
determination of the achievement of each Performance Goal is made, then, unless
prohibited by law, vesting shall be postponed and shall not occur unless and
until Grantee returns to active service in accordance with the terms of the
approved personal leave of absence and before November 1 of the calendar
year immediately following the calendar year in which the applicable Performance
Period ends, and if the Grantee returns after March 15 of the year
following the year in which the applicable Performance Period ends, payment
shall occur not later than the year in which the Grantee returns.  In the event Grantee does not return to
active service from such leave of absence prior to November 1 of the
calendar year immediately following the calendar year in which the Performance
Period ends, any Performance Shares covered by this Award that were not vested
as of the commencement of such leave shall be immediately forfeited (as if
Grantee terminated employment for purposes of Section 4 hereof).   Further, in the event that such
determination is made and during any portion of the applicable Performance
Period the Grantee was on employer-approved, personal leave of absence, the
applicable vesting percentage shall be determined by the Committee, or its
delegatee, in its sole discretion, to reflect only that portion of the applicable
Performance Period during which such employment continued while the Grantee was
entitled to payment of salary.

 

4

 

Section 3.  Grantee
Obligation under Employment Agreement.  Grantee acknowledges that this Award is
subject to Grantee’s obligations under the confidentiality, noncompetition and
nonsolicitation provisions set forth in Section 9 of the Employment
Agreement.

 

Section 4.  Forfeiture/Expiration.  Any
Performance Share subject to this Award shall be forfeited upon the termination
of the Grantee’s continuous employment by the Corporation, including
Subsidiaries, from the Date of Grant, except to the extent otherwise provided
in Section 2.  Any Dividend
Equivalent subject to this Award shall expire at the time its tandem
Performance Share (i) is vested and paid, or deferred, (ii) is
forfeited, or (iii) expires.  The
Grantee agrees that, in the event he violates the confidentiality,
noncompetition or nonsolicitation provisions set forth in Section 9 of the
Employment Agreement, (1) he will forfeit and not be entitled to any
further payments in accordance with Section 2(b)(i) hereof and (2) if
such violation is after the termination of his employment, he will be obligated
to repay to the Corporation any amounts paid (determined as of the date of
payment) after the termination of employment pursuant to Section 2(b) hereof,
with such sum reduced by any amount previously repaid pursuant to this Section 4. 
Such amount shall be paid to the Corporation in cash in a single sum within ten
(10) business days after the first date of the violation, whether or not
the Corporation has knowledge of the violation or has made a demand for
payment. Any such payment made following such date shall bear interest at a
rate equal to the prime lending rate of Citibank, N.A. (as periodically set)
plus 1%.

 

Section 5.  Dividend Equivalent
Payment.  Payment with respect to any Dividend
Equivalent subject to this Award that is in tandem with a Performance Share
that is vested and paid shall be paid in cash to the Grantee at the same time
as the vested Performance Share as provided in Section 6, or, if the
vested Performance Share is deferred by Grantee as provided in Section 6,
payment with respect to the tandem Dividend Equivalent shall likewise be
deferred.  The Dividend Equivalent
payment amount shall equal the aggregate cash dividends declared and paid with
respect to one (1) share of Common Stock for the period beginning on the
Date of Grant and ending on the date the vested, tandem Performance Share is
paid or deferred and before the Dividend Equivalent expires.  However, should the timing of a particular
payment under Section 6 to the Grantee in shares of Common Stock in
conjunction with the timing of a particular cash dividend declared and paid on
Common Stock be such that the Grantee receives such shares without the right to
receive such dividend and the Grantee would not otherwise be entitled to
payment under the expiring Dividend Equivalent with respect to such dividend,
the Grantee, nevertheless, shall be entitled to such payment.  Dividend Equivalent payments shall be subject
to withholding for taxes.  Any required
tax withholdings in respect of Dividend Equivalents attributable to Performance
Shares shall be satisfied by reducing the cash payment in respect of the
required withholding amount, unless the Committee, or its delegatee, in its
discretion, permits Grantee to satisfy such tax obligation by other payment to
the Corporation.

 

Section 6.  Payment of Performance
Shares.   Payment of Performance Shares subject to
this Award that become vested shall be made to the Grantee as soon as
practicable following the end of the applicable Performance Period (and in any
event on or before the first March 15 following the end of the applicable
Performance Period), except to the extent deferred by the Grantee in accordance
with such procedure as the Committee, or its delegatee, may prescribe from time
to time; provided that, in the case of Performance Shares that become vested by
reason 

 

5

 

of
the application of Section 2(b)(iv), payment shall be made as soon as
practicable and in any event within thirty (30) days following the applicable
termination of employment unless the Change in Control does not constitute a
change in the ownership or effective control of the Corporation or a change in
the ownership of a substantial portion of the assets of the Corporation within
the meaning of Section 409A of the Code, in which case payment shall be
made as soon as practicable following the end of the applicable Performance
Period (and in any event on or before the first March 15 following the end
of the applicable Performance Period); and provided further that payment shall
in any event be made in a manner required to avoid accelerated taxation and/or
tax penalties under Section 409A of the Code. Payment (or deferrals, as
applicable) shall be subject to withholding for taxes. Payment shall be in the
form of one (1) share of Common Stock for each full vested Performance
Share, and any fractional vested Performance Share shall be rounded down to the
next whole share for purposes of both vesting under Section 2 and payment
under Section 6.  Notwithstanding
the foregoing, the number of shares of Common Stock that would otherwise be
paid or deferred (valued at Fair Market Value on the date the respective Performance
Share became vested, or if later, payable) shall be reduced by the Committee,
or its delegatee, in its sole discretion, to fully satisfy tax withholding
requirements, unless the Committee, or its delegate, in its discretion requires
Grantee to satisfy such tax obligation by other payments to the Corporation.

 

Section 7.  No Employment Right.  Nothing in this Agreement or in the Plan
shall confer upon the Grantee the right to continued employment with the
Corporation or any Subsidiary, or affect the right of the Corporation or any
Subsidiary to terminate the employment or service of the Grantee at any time
for any reason.

 

Section 8.  Nonalienation.  The
Performance Shares and Dividend Equivalents subject to this Award are not
assignable or transferable by Grantee. 
Upon any attempt to transfer, assign, pledge, hypothecate, sell or
otherwise dispose of any such Performance Share or Dividend Equivalent, or of
any right or privilege conferred hereby, or upon the levy of any attachment or
similar process upon such Performance Share or Dividend Equivalent, or upon
such right or privilege, such Performance Share or Dividend Equivalent, or such
right or privilege, shall immediately become null and void.

 

Section 9.  Determinations.  Determinations
by the Committee, or its delegatee, shall be final and conclusive with respect
to the interpretation of the Plan and this Agreement.

 

Section 10.  Governing Law.  This
Agreement shall be governed, construed and enforced in accordance with the laws
of the State of Delaware applicable to transactions that take place entirely
within that state.

 

Section 11.  Conflicts with Plan,
Correction of Errors, Section 409A and Grantee’s Consent.  In the event that any provision of this
Agreement conflicts in any way with a provision of the Plan, such Plan
provision shall be controlling and the applicable provision of this Agreement
shall be without force and effect to the extent necessary to cause such Plan
provision to be controlling.  In
addition, in the event that any provision of this Agreement and/or Plan
conflicts in any way with a provision of the Employment Agreement, such
Employment Agreement provision shall be controlling and the applicable
provision of this Agreement and/or 

 

6

 

Plan
shall be without force and effect to the extent necessary to cause such
Employment Agreement provision to be controlling, except to the extent such
treatment would constitute a material modification of the Plan requiring
stockholder approval.  In the event that,
due to administrative error, this Agreement does not accurately reflect an
Award properly granted to the Grantee pursuant to the Plan and the Employment
Agreement, the Corporation, acting through its Executive Compensation and
Benefits Department, reserves the right to cancel any erroneous document and,
if appropriate, to replace the cancelled document with a corrected
document.  To the extent applicable, it
is intended that this Agreement comply with the provisions of Section 409A
of the Code and that this Award not result in unfavorable tax consequences to
Grantee under Section 409A of the Code.  This Agreement will be
administered and interpreted in a manner consistent with this intent, and any
provision that would cause this Agreement to fail to satisfy Section 409A
of the Code will have no force and effect until amended to comply therewith
(which amendment may be retroactive to the extent permitted by Section 409A
of the Code).  The Corporation and the Grantee agree to work together in
good faith in an effort to comply with Section 409A of the Code including,
if necessary, amending this Agreement based on further guidance issued by the
Internal Revenue Service from time to time, provided that the Corporation shall
not be required to assume any increased economic burden.  Notwithstanding
anything contained herein to the contrary, to the extent required in order to
avoid accelerated taxation and/or tax penalties under Section 409A of the
Code, the Grantee shall not be considered to have terminated employment with Corporation
for purposes of this Agreement and no payments shall be due to him under this
Agreement which are payable upon his termination of employment until he would
be considered to have incurred a “separation from service” from the Corporation
within the meaning of Section 409A of the Code.  To the extent
required in order to avoid accelerated taxation and/or tax penalties under Section 409A
of the Code, amounts that would otherwise be payable and benefits that would
otherwise be provided pursuant to this Agreement during the six-month period
immediately following the Grantee’s termination of employment shall instead be
paid within 30 days following the first business day after the date that is six
months following his termination of employment (or upon his death, if earlier). 
In addition, for purposes of this Agreement, each amount to be paid or benefit
to be provided to the Grantee pursuant to this Agreement shall be construed as
a separate identified payment for purposes of Section 409A of the Code. 
Grantee acknowledges and agrees that payments made under this Agreement are
subject to the Corporation’s requirement that the Grantee reimburse the portion
of any payment where such portion of the payment was predicated upon the
achievement of financial results that are subsequently the subject of a
restatement caused or partially caused by Grantee’s fraud or misconduct.

 

Section 12.  Compliance with Law. 
The Corporation shall make reasonable efforts to comply with all applicable
federal and state securities laws applicable to the Plan and this Award;
provided, however, notwithstanding any other provision of this Award, the
Corporation shall not be obligated to deliver any shares of Common Stock
pursuant to this Award if the delivery thereof would result in a violation of
any such law.

 

7

 

IN WITNESS WHEREOF, the
Corporation has caused this Agreement to be executed and granted in Charlotte,
North Carolina, to be effective as of the Date of Grant.

 

	
  ATTEST:

  	
  DUKE
  ENERGY CORPORATION:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:
  

  	
  Marc
  E. Manly

  	
  By:
   James H. Hance, Jr.

  
	
   

  	
  Corporate
  Secretary

  	
  Its:
     Chairman, Compensation Committee

  
				

 

8

 

Acceptance
of Performance Award

 

IN WITNESS OF Grantee’s
acceptance of this Performance Award and Grantee’s agreement to be bound by the
provisions of this Agreement and the Plan, Grantee has signed this Agreement effective
this            day of                               .

 

 

	
   

  	
   

  	
  Grantee’s
  Signature

  
	
   

  	
  James E. Rogers

  

 

9

 

SCHEDULE I

Short-Term Performance Period

Individual Performance Goals

 

10EXHIBIT 10.5

 

PERFORMANCE AWARD AGREEMENT

 

This Performance
Award Agreement (the “Agreement”) has been made as of February 19, 2009 (the “Date of Grant”) between Duke Energy Corporation, a Delaware corporation, with its
principal offices in Charlotte, North Carolina (the “Corporation”), and                                 
(the “Grantee”).

 

RECITALS

 

Under the Duke Energy
Corporation 2006 Long-Term Incentive Plan, as it may, from time to time, be
further amended (the “Plan”), the Compensation Committee of the Board of
Directors of the Corporation (the “Committee”), or its delegatee, has
determined the form of this Agreement and selected the Grantee, as an Employee,
to receive the award evidenced by this Agreement (the “Award”) and the
Performance Shares and tandem Dividend Equivalents that are subject
hereto.  The applicable provisions of the
Plan are incorporated in this Agreement by reference, including the definitions
of terms contained in the Plan (unless such terms are otherwise defined
herein).

 

AWARD

 

In accordance with the Plan, the Corporation has
made this Award, effective as of the Date of Grant and upon the following terms
and conditions:

 

Section 1.                            Number and Nature of Performance Shares and Tandem Dividend Equivalents.  At target performance, the
number of Performance Shares and the number of tandem Dividend Equivalents
subject to this Award are each                                     ;
at maximum performance, the number of Performance Shares and the number of tandem
Dividend Equivalents subject to this award are equal to 150% of the number of
Performance Shares and tandem Dividend Equivalents at target performance,
respectively.  The number of such
Performance Shares that may become vested upon determination of achievement of
each Performance Goal at maximum, as provided in Section 2(a), is 150% of
the number that becomes vested at target performance.  Each Performance Share, upon becoming vested,
represents a right to receive payment in the form of one (1) share of
Common Stock.  Each tandem Dividend
Equivalent, after its tandem Performance Share vests, represents a right to
receive a cash payment equivalent in amount to the aggregate cash dividends
declared and paid on one (1) share of Common Stock for the period
beginning on the Date of Grant and ending on the date the vested, tandem
Performance Share is paid or deferred and before the Dividend Equivalent expires.  Performance Shares and Dividend Equivalents
are used solely as units of measurement, and are not shares of Common Stock and
the Grantee is not, and has no rights as, a shareholder of the Corporation by
virtue of this Award.

 

1

 

Section 2.                            Vesting of Performance Shares.

 

(a)  Performance Goals. 
Except as otherwise provided in this Section 2, the Performance
Shares shall vest only if and to the extent the Committee, or its delegatee,
determines that the Performance Goals (as defined below) have been met
(provided that such determination shall be made not later than the first March 15
following the end of the Performance Period, as defined below).  To the extent Performance Goals are not met,
the Performance Shares that do not so become vested shall be forfeited.

 

(i)                                     The following Performance Goal shall apply
with respect to one-half of the Performance Shares and Dividend Equivalents
covered by this Agreement.  Provided
Grantee’s continuous employment by the Corporation, including Subsidiaries, has
not terminated, or as otherwise provided in Sections 2(b) or 2(c), up to one-half
of the Performance Shares subject to this Award shall become vested upon the
written determination by the Committee, or its delegatee, in its sole
discretion, of the extent to which the Corporation achieves the “TSR
Performance Goal,” which is the Corporation’s Total Shareholder Return (“TSR”)
percentile ranking among the companies that are in the Philadelphia Utility
Index as of the end of the Performance Period, with higher percentile ranking
for more positive/less negative TSR, for the period beginning January 1,
2009 and ending December 31, 2011 (“Performance Period”), in accordance
with the applicable vesting percentage specified for such percentile ranking in
the following schedule:

 

	
  Percentile

  Ranking

  	
   

  	
  Vesting

  Percentage

  (Applicable to

  Target # of

  Shares)

  	
   

  	
  Vesting

  Percentage

  (Applicable to

  Maximum # of

  Shares)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

*     When such determination is of a percentile
ranking between those specified, the Committee, or its delegatee, in its sole
discretion, shall interpolate to determine the applicable vesting percentage.

 

Such Performance Shares that
do not so become vested shall be forfeited. 
For purposes of this Agreement, TSR means the change in fair market
value over a specified period of time, expressed as a percentage, 

 

2

 

of an initial investment in
specified common stock, with dividends reinvested, all as determined utilizing
such methodology as the Committee, or its delegatee, shall approve, provided,
however, that the Committee, or its delegatee, shall have the discretion to
make appropriate and equitable adjustments to the TSR of any company (including
the Corporation) whose shares trade ex-dividend as of December 31, 2011,
provided, however, that no such adjustment shall be permitted if it would
result in the loss of the otherwise available exemption of the Award under Section 162(m) of
the Code.  In the event that a company
becomes a member of the Philadelphia Utility Index following January 1,
2009, such company shall not be taken into account for purposes of this
Agreement.

 

(ii)                                  The following Performance Goal shall apply
with respect to one-half of the Performance Shares and Dividend Equivalents
covered by this Agreement.  Provided
Grantee’s continuous employment by the Corporation, including Subsidiaries, has
not terminated, or as otherwise provided in Sections 2(b) or 2(c), up to one-half
of the Performance Shares subject to this Award shall become vested upon the
written determination by the Committee, or its delegatee, in its sole discretion,
of the extent to which the Corporation achieves the “CAGR Performance Goal,”
which is based on the Corporation’s compounded annual growth rate (“CAGR”) with
respect to its adjusted diluted earnings per share (“EPS”), as calculated in
accordance with Exhibit A, for the Performance Period, in
accordance with the applicable vesting percentage specified for CAGR in the
following schedule:

 

	
  CAGR

  	
   

  	
  Vesting

  Percentage

  (Applicable to

  Target # of Shares)

  	
   

  	
  Vesting

  Percentage

  (Applicable to

  Maximum # of

  Shares)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

*     When such determination is at a level between those specified, the
Committee, or its delegatee, in its sole discretion, shall interpolate to
determine the applicable vesting percentage.

 

Such Performance Shares that
do not so become vested shall be forfeited.

 

3

 

(b) In the event that,
prior to the date that the determination of the achievement of each Performance
Goal is made, the Grantee’s continuous employment by the Corporation, including
Subsidiaries, terminates, the Performance Shares subject to this Award are
thereupon forfeited, except that if such employment terminates (i) at a
time when Grantee has attained age 55 and has at least five years of vesting
service under the Duke Energy Retirement Cash Balance Plan or Cinergy Corp.
Non-Union Employees’ Pension Plan, or under another retirement plan of the
Corporation or a Subsidiary which plan the Committee, or its delegatee, in its
sole discretion, determines to be the functional equivalent of the Duke Energy
Retirement Cash Balance Plan or the Cinergy Corp. Non-Union Employees’ Pension
Plan, unless the Committee, or its delegatee, in its sole discretion,
determines that Grantee is in violation of any obligation identified in Section 3,
(ii) as the result of the Grantee’s death, (iii) as the result of the
Grantee’s permanent and total disability within the meaning of Code Section 22(e)(3),
(iv) as the result of the termination of such employment by the
Corporation, or employing Subsidiary, other than for cause, as determined by
the Corporation or employing Subsidiary, in its sole discretion, or (v) as
the direct and sole result, as determined by the Corporation, or employing
Subsidiary, in its sole discretion, of the divestiture of assets, a business,
or a company, by the Corporation or a Subsidiary, the Performance Shares
subject to this Award shall vest upon such determination of the achievement of
each Performance Goal, at such vesting percentage determined by the Committee,
or its delegatee, in its sole discretion, by prorating on the basis of the
portion of the Performance Period that such employment continued while Grantee
was entitled to payment of salary (unless such termination occurs after the end
of the Performance Period, in which event the number of Performance Shares
earned, if any, shall not be prorated).

 

In the event that Grantee is on an
employer-approved, personal leave of absence on the date that the determination
of the achievement of each Performance Goal is made, then, unless prohibited by
law, vesting shall be postponed and shall not occur unless and until Grantee
returns to active service in accordance with the terms of the approved personal
leave of absence and before November 1 of the calendar year immediately following
the calendar year in which the Performance Period ends.  In the event Grantee does not return to
active service from such leave of absence prior to November 1 of the
calendar year immediately following the calendar year in which the Performance
Period ends, any Performance Shares covered by this Award that were not vested
as of the commencement of such leave shall be immediately forfeited (as if
Grantee terminated employment for purposes of Section 4 hereof).   Further, in the event that such determination
is made and during any portion of the Performance Period the Grantee was on
employer-approved, personal leave of absence, the applicable vesting percentage
shall be determined by the Committee, or its delegatee, in its sole discretion,
to reflect only that portion of the Performance Period during which such
employment continued while the Grantee was entitled to payment of salary.

 

4

 

(c) In the event that a
Change in Control occurs before the Performance Period has ended and (i) before
the Grantee’s continuous employment by the Corporation, including Subsidiaries,
terminates, or (ii) after such employment terminates during the
Performance Period, (A) at a time when Grantee is considered “retired”,
unless the Corporation, in its sole discretion, determines that Grantee is in
violation of any obligation identified in Section 3, or (B) as the
result of an event listed in items (ii) — (v) of the first sentence
of Section 2(b), the Performance Shares subject to this Award shall vest
upon such occurrence, at such vesting percentage determined by the Committee,
or its delegatee, in its sole discretion, by prorating down, assuming
performance at the target level for each Performance Goal, on
the basis of the portion of the Performance Period that has elapsed prior to
the time of such occurrence (or such earlier termination of employment), and
the remaining Performance Shares shall be forfeited, irrespective of any
subsequent determination of the achievement of each Performance Goal.

 

Section 3.                            Violation of Grantee
Obligation.  In consideration of the continued vesting
opportunity provided under Section 2 following the termination of Grantee’s
continuous employment by the Corporation, including Subsidiaries, if, at the
time of such termination of employment, Grantee is considered “retired”,
Grantee agrees that during the period beginning with such termination of
employment and ending with the third anniversary of the Date of Grant (“Restricted
Period”), Grantee shall not (i) without the prior written consent of the
Corporation, or its delegatee, become employed by, serve as a principal,
partner, or member of the board of directors of, or in any similar capacity
with, or otherwise provide service to, a competitor, to the detriment, of the
Corporation or any Subsidiary, (ii) violate any of Grantee’s other
noncompetition obligations, or any of Grantee’s nonsolicitation or
nondisclosure obligations, to the Corporation or any Subsidiary; or (iii) except
as required by subpoena or other legal process (in which event the Grantee will
give the Chief Legal Officer of the Corporation prompt notice of such subpoena
or other legal process in order to permit the Corporation or any affected
individual to seek appropriate protective orders), publish or provide any oral
or written statements about the Corporation or any Subsidiary, any of the
Corporation’s or any Subsidiary’s current or former officers, executives,
directors, employees, agents or representatives or any initiative, program or
policy of the Corporation or any Subsidiary relating to any matter whatsoever
that are disparaging, slanderous, libelous or defamatory, or that disclose
private or confidential information about their business affairs, or that
constitute an intrusion into their private lives, or that give rise to
unreasonable publicity about their private lives, or that place them in a false
light before the public, or that constitute a misappropriation of their name or
likeness. The noncompetition obligations of clause (i) of the preceding
sentence shall be limited in scope and shall be effective only with respect to
competition with the Corporation or any Subsidiary in the businesses of:  production, transmission, distribution, or
retail or wholesale marketing or selling of electricity; resale or arranging
for the purchase or for the resale, brokering, marketing, or trading of
electricity or derivatives thereof; energy management and the provision of
energy 

 

5

 

solutions; development and management of
fiber optic communications systems; development and operation of power
generation facilities, and sales and marketing of electric power, domestically
and abroad; and any other business in which the Corporation, including Subsidiaries,
is engaged at the termination of Grantee’s continuous employment by the
Corporation, including Subsidiaries; and within the following geographical
areas (i) any country in the world where the Corporation, including
Subsidiaries, has at least US$25 million in capital deployed as of termination
of Grantee’s continuous employment by Corporation, including Subsidiaries; (ii) the
continent of North America; (iii) the United States of America and Canada;
(iv) the United States of America; (v) the states of North Carolina,
South Carolina, Virginia, Georgia, Florida, Texas, California, Massachusetts,
Illinois, Michigan, New York, Colorado, Oklahoma and Louisiana; (vi) the
states of North Carolina, South Carolina, Texas, Colorado, Ohio, Kentucky, and
Indiana; and (vii) any state or states with respect to which was conducted
a business of the Corporation, including Subsidiaries, which business
constituted a substantial portion of Grantee’s employment.  The Corporation and Grantee intend the above
restrictions on competition in geographical areas to be entirely severable and
independent, and any invalidity or enforceability of this provision with
respect to any one or more of such restrictions, including areas, shall not
render this provision unenforceable as applied to any one or more of the other
restrictions, including areas.  If any
part of this provision is held to be unenforceable because of the duration,
scope or area covered, the Corporation and Grantee agree to modify such part,
or that the court making such holding shall have the power to modify such part,
to reduce its duration, scope or area, including deletion of specific words and
phrases, i.e., “blue penciling”, and in its modified, reduced or blue pencil
form, such part shall become enforceable and shall be enforced.  Nothing in Section 3 shall be construed
to prohibit Grantee from being retained during the Restricted Period in a
capacity as an attorney licensed to practice law, or to restrict Grantee from
providing advice and counsel in such capacity, in any jurisdiction where such
prohibition or restriction is contrary to law.

 

Section 4.                            Forfeiture.  Any Performance Share subject to
this Award shall be forfeited upon the termination of the Grantee’s continuous
employment by the Corporation, including Subsidiaries, from the Date of Grant,
except to the extent otherwise provided in Section 2.  Any Dividend Equivalent subject to this Award
shall expire at the time its tandem Performance Share (i) is vested and
paid, or deferred, or (ii) is forfeited.

 

Section 5.                            Dividend Equivalent Payment.  Payment with respect to any
Dividend Equivalent subject to this Award that is in tandem with a Performance
Share that is vested and paid shall be paid in cash to the Grantee at the same
time as the vested Performance Share as provided in Section 6, or, if the
vested Performance Share is deferred by Grantee as provided in Section 6,
payment with respect to the tandem Dividend Equivalent shall likewise be
deferred.  The Dividend Equivalent
payment amount shall equal the aggregate cash dividends declared and paid with
respect to one (1) share of Common Stock for the period 

 

6

 

beginning on the Date of Grant and ending on
the date the vested, tandem Performance Share is paid or deferred and before
the Dividend Equivalent expires. 
However, should the timing of a particular payment under Section 6
to the Grantee in shares of Common Stock in conjunction with the timing of a
particular cash dividend declared and paid on Common Stock be such that the
Grantee receives such shares without the right to receive such dividend and the
Grantee would not otherwise be entitled to payment under the expiring Dividend
Equivalent with respect to such dividend, the Grantee, nevertheless, shall be
entitled to such payment.  Dividend
Equivalent payments shall be subject to withholding for taxes. Any required
income tax withholdings in respect of Dividend Equivalents attributable to
Performance Shares shall be satisfied by reducing the cash payment in respect
of the required withholding amount, unless the Committee, or its delegatee, in
its discretion, requires Grantee to satisfy such tax obligation by other
payment to the Corporation.

 

Section 6.                            Payment of Performance Shares.   Payment of Performance Shares
subject to this Award that become vested shall be made to the Grantee on the
earlier of: (i) the calendar year immediately following the Performance
Period, or (ii) within 30 days after the occurrence of a “change in the
ownership,” a “change in the effective control” or a “change in the ownership
of a substantial portion of the assets” of the Corporation within the meaning
of Section 409A of the Code, except to the extent deferred by the Grantee
in accordance with such procedures as the Committee, or its delegatee, may
prescribe from time to time or except to the extent required to avoid
accelerated taxation and/or tax penalties under Section 409A of the
Code.  Payment (or deferrals, as
applicable) shall be subject to withholding for taxes.  Payment shall be in the form of one (1) share
of Common Stock for each full vested Performance Share, and any fractional
vested Performance Share shall be rounded up to the next whole share for
purposes of both vesting under Section 2 and payment under Section 6.  Notwithstanding the foregoing, the number of
shares of Common Stock that would otherwise be paid or deferred (valued at Fair
Market Value on the date the respective Performance Share became vested, or if
later, payable) shall be reduced by the Committee, or its delegatee, in its
sole discretion, to fully satisfy tax withholding requirements, unless the
Committee, or its delegate, in its discretion requires Grantee to satisfy such tax
obligation by other payment to the Corporation. 
In the event that payment, after any reduction in the number of shares
of Common Stock to satisfy withholding for tax requirements, would be for less
than ten (10) shares of Common Stock, then, if so determined by the
Committee, or its delegatee, in its sole discretion, payment, instead of being
made in shares of Common Stock, shall be made in a cash amount equal in value
to the shares of Common Stock that would otherwise be paid, valued at Fair
Market Value on the date the respective Performance Shares became vested.

 

Section 7.                            No Employment Right. 
Nothing in this Agreement or in the Plan shall confer upon the Grantee
the right to continued employment with the Corporation or any Subsidiary, or
affect the right of the Corporation or any 

 

7

 

Subsidiary to terminate the employment or
service of the Grantee at any time for any reason.

 

Section 8.                            Nonalienation.  The Performance Shares and
Dividend Equivalents subject to this Award are not assignable or transferable
by Grantee.  Upon any attempt to
transfer, assign, pledge, hypothecate, sell or otherwise dispose of any such
Performance Share or Dividend Equivalent, or of any right or privilege
conferred hereby, or upon the levy of any attachment or similar process upon
such Performance Share or Dividend Equivalent, or upon such right or privilege,
such Performance Share or Dividend Equivalent, or such right or privilege,
shall immediately become null and void.

 

Section 9.                            Determinations.  Determinations by the Committee,
or its delegatee, shall be final and conclusive with respect to the
interpretation of the Plan and this Agreement.

 

Section 10.                     Governing Law.  This Agreement shall be
governed, construed and enforced in accordance with the laws of the State of
Delaware applicable to transactions that take place entirely within that state.

 

Section 11.                     Conflicts with Plan, Correction
of Errors, Section 409A and Grantee’s Consent. 
In the event that any
provision of this Agreement conflicts in any way with a provision of the Plan, such
Plan provision shall be controlling and the applicable provision of this
Agreement shall be without force and effect to the extent necessary to cause
such Plan provision to be controlling. 
In the event that, due to administrative error, this Agreement does not
accurately reflect an Award properly granted to the Grantee pursuant to the
Plan, the Corporation, acting through its Executive Compensation and Benefits
Department, reserves the right to cancel any erroneous document and, if
appropriate, to replace the cancelled document with a corrected document.  It is the intention of the Corporation and
the Grantee that this Award not result in unfavorable tax consequences to
Grantee under Code Section 409A. 
Accordingly, Grantee consents to such amendment of this Agreement as the
Corporation may reasonably make in furtherance of such intention, and the
Corporation shall promptly provide, or make available to, Grantee a copy of any
such amendment.

 

To the extent applicable, it
is intended that this Agreement comply with the provisions of Section 409A
of the Code and that this Award not result in unfavorable tax consequences to
Grantee under Section 409A of the Code. 
This Agreement will be administered and interpreted in a manner
consistent with this intent, and any provision that would cause this Agreement
to fail to satisfy Section 409A of the Code will have no force and effect
until amended to comply therewith (which amendment may be retroactive to the
extent permitted by Section 409A of the Code).  The Corporation and the Grantee agree to work
together in good faith in an effort to comply with Section 409A of the
Code including, if necessary, amending this Agreement based on further guidance
issued by the Internal Revenue Service from time to time, provided that the 

 

8

 

Corporation shall not be required to assume
any increased economic burden. 
Notwithstanding anything contained herein to the contrary, to the extent
required in order to avoid accelerated taxation and/or tax penalties under Section 409A
of the Code, the Grantee shall not be considered to have terminated employment
with Corporation for purposes of this Agreement and no payments shall be due to
him under this Agreement which are payable upon his termination of employment
until he would be considered to have incurred a “separation from service” from
the Corporation within the meaning of Section 409A of the Code.  To the extent required in order to avoid
accelerated taxation and/or tax penalties under Section 409A of the Code,
amounts that would otherwise be payable and benefits that would otherwise be
provided pursuant to this Agreement during the six-month period immediately
following the Grantee’s termination of employment shall instead be paid within
30 days following the first business day after the date that is six months
following his termination of employment (or upon his death, if earlier).  In addition, for purposes of this Agreement,
each amount to be paid or benefit to be provided to the Grantee pursuant to
this Agreement shall be construed as a separate identified payment for purposes
of Section 409A of the Code.

 

Grantee acknowledges and
agrees that payments made under this Agreement are subject to the Corporation’s
requirement that the Grantee reimburse the portion of any payment where such
portion of the payment was predicated upon the achievement of financial results
that are subsequently the subject of a restatement caused or partially caused
by Grantee’s fraud or misconduct.

 

Section 12.                     Compliance with Law.  The Corporation shall make reasonable
efforts to comply with all applicable federal and state securities laws
applicable to the Plan and this Award; provided, however, notwithstanding any
other provision of this Award, the Corporation shall not be obligated to
deliver any shares of Common Stock pursuant to this Award if the delivery
thereof would result in a violation of any such law.

 

Notwithstanding the
foregoing, this Award is subject to cancellation by the Corporation in its sole
discretion unless the Grantee, by not later than                         , 2009,
has signed a duplicate of this Agreement, in the space provided below, and
returned the signed duplicate to the Executive Compensation and Benefits
Department - Performance Award [(STO6E)], Duke Energy Corporation, P. O.
Box 1007, Charlotte, NC 28201-1007, which, if, and to the extent, permitted by
the Executive Compensation and Benefits Department, may be accomplished by
electronic means.

 

IN WITNESS WHEREOF, the
Corporation has caused this Agreement to be executed and granted in Charlotte,
North Carolina, to be effective as of the Date of Grant.

 

9

 

	
   

  	
  ATTEST:

  	
  DUKE ENERGY CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Corporate Secretary

  	
  Its:

  	
  Chief Executive Officer

  
					

 

 

Acceptance of Performance Award

 

IN WITNESS OF Grantee’s
acceptance of this Performance Award and Grantee’s agreement to be bound by the
provisions of this Agreement and the Plan, Grantee has signed this Agreement
this            day of                                           , 2009.

 

 

	
   

  	
   

  
	
   

  	
  Grantee’s Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (print name)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (address)

  

 

10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00153-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00153-of-00352.parquet"}]]