Document:

exhibit 10.6.3

 

amendment
to the

CINeRGY
Corp. excess pension plan

 

The
Cinergy Corp. Excess Pension Plan, as amended and restated effective as of
December 31, 2008, as subsequently amended (the “Plan”), is hereby amended
effective as of the close of December 31, 2012, or such other date specified
below.

(1)            Explanation of Amendment

The Plan is amended to (i) reflect the merger
of the Cinergy Corp. Non-Union Employees’ Pension Plan into the Duke Energy
Retirement Cash Balance Plan, (ii) reflect a change in the interest crediting
rate, and (iii) update actuarial factors for certain optional forms to reflect
more recent mortality and interest rate experience.

(2)            Amendment 

(a)            Section 2.9 of the Plan is
amended in its entirety to read as follows:

“2.9          “Cinergy
Pension Plan” means, the following:

(a)            For purposes of Part II, (i)
for periods prior to the close of December 31, 2012 (i.e., the effective
date of the merger of the Cinergy Corp. Non-Union Employees’ Pension Plan into
the Duke Energy Retirement Cash Balance Plan), the Cinergy Corp. Non-Union
Employees’ Pension Plan as in effect from time to time, and (ii) for periods
after the close of December 31, 2012, the provisions (as such provisions are in
effect from time to time) of the Duke Energy Retirement Cash Balance Plan that
apply to participants in the Cinergy Corp. Non-Union Employees’ Pension Plan
who had their benefit transferred to the Duke Energy Retirement Cash Balance
Plan.

(b)            For purposes of Part I, the
Cinergy Corp. Non-Union Employees’ Pension Plan as in effect on October 3,
2004, without giving effect to amendments adopted thereafter except that (i)
the update to actuarial factors to reflect more recent mortality and interest
rate experience as provided in paragraphs (a) and (b) of Section 2 of the Sixth
Amendment to the Cinergy Corp. Non-Union Employees’ Pension Plan shall apply
and (ii) the 3.8% interest crediting floor under the investor and cash balance
programs as required by the IRS for issuing a favorable determination letter
and as provided in the Amendment to the Cinergy Corp. Non-Union Employees
Pension Plan dated April 11, 2012.”

(b)            Section 2.19 of the Plan is
amended in its entirety to read as follows:

“2.19        “Interest
Factor” means the interest rate determined by the formula (1+i), raised to the
one-twelfth (1/12th) power, minus one (1), where “i” equals the
following:

(a)            For
benefits accrued on or after January 1, 2013, four percent (4%).

(b)            For
benefits accrued prior to January 1, 2013, the yield on 30-year Treasury Bonds
as published in the Federal Reserve Statistical Release H.15 for the end of the
third full business week of the month prior to the beginning of the calendar quarter
for which the monthly accrual is being applied, but not more than an annual
percentage rate of nine percent (9%) and not less than an annual percentage
rate of four percent (4%).”

(c)            Section 4.3 of the Plan is
amended in its entirety to read as follows:

“4.3          Part
A Benefit.  Each eligible Participant’s Part A Benefit shall be determined
in the same manner as a Traditional Program Benefit, but only with respect to
the eligible Participant’s Part A – Prior Benefit as provided under the Cinergy
Pension Plan (and which is described in Article 28 of the Cinergy Pension Plan
as in effect as of December 31, 2012).”

 

IN WITNESS WHEREOF,
Duke Energy Corporation has caused this Amendment to be executed effective as
of the date specified below.

DUKE
ENERGY CORPORATION

 

By:           
/s/ JENNIFER L. WEBER____________________

Title:         Executive Vice President and

Chief Human Resources
Officer

 

 

 

 

 

 

Date:        December 26, 2012EXHIBIT 10.6

 

CINERGY
CORP. EXCESS PENSION PLAN

(As Amended and Restated Effective December 31, 2008)

ARTICLE I

PURPOSE OF PLAN

The
purpose of the Cinergy Corp. Excess Pension Plan (the "Plan") is to provide additional
retirement benefits for a select group of management or highly compensated
employees.  The Plan originally was effective as of January 1, 1986 (as the
"PSI Energy, Inc. Supplemental Pension Plan"), was restated and
renamed the "PSI Energy, Inc. Excess Benefit Plan" effective as of
January 1, 1989, was renamed the "Cinergy Corp. Excess Pension Plan"
effective as of January 1, 1997, and was restated effective January 1, 1998,
and has been amended thereafter from time to time.  The Plan is intended to be
a non-qualified, unfunded plan of deferred compensation for a select group of
management or highly compensated employees under the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and shall be so
interpreted and administered.  Effective December 31, 2008, the Plan is hereby amended
and restated in its entirety, as set forth herein, in order to comply with
Section 409A of the Internal Revenue Code of 1986, as amended (the
"Code").  Concurrent with this amendment and restatement, the benefit
under the Cinergy Corp. Supplemental Executive Retirement Plan of the only
individual who, as of December 31, 2008, participates therein and has not yet
commenced payment there under, is hereby transferred to, and shall be provided
under, Article XIII.

The
Plan is divided into two separate parts, one of which shall be referred to
herein as "Part I" and the other shall be referred to herein as
"Part II."  Part I, as set forth herein, applies only to participants
who had a Separation from Service before January 1, 2005 and only with respect
to "amounts deferred" in taxable years beginning before January 1,
2005 (within the meaning of Section 409A of the Code) and any earnings
thereon.  It is intended that such amounts and the earnings thereon shall 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 Part
I as of October 3, 2004, or add a new material benefit or right to Part I.  As
of January 1, 2005 ("Effective Date"), Part I is frozen, and neither
the Company, its affiliates nor any individual shall make or permit to be made
any additional contributions or deferrals under Part I (other than earnings) on
or after that date.

The
portion of the Plan that is not subject to Part I shall be subject to and
governed by the terms and conditions of Part II, as set forth herein, including
(i) any "amounts deferred" in taxable years beginning on or after
January 1, 2005 (within the meaning of Section 409A of the Code) and any
earnings thereon and (ii) "amounts deferred" at any time, whether
before or after the Effective Date, for participants who had not had a
Separation from Service before the Effective Date.  To the extent that any of
the amounts described in the preceding sentence were credited or accrued under
the Plan prior to the Effective Date (the "Transferred Amounts"),
then the Committee shall transfer the Transferred Amounts from Part I to Part
II and credit those amounts to the appropriate bookkeeping accounts under Part
II, as selected by the Committee in its sole discretion, or reflect such amount
as an accrual of benefits under Part II.  As a result of such transfer, all of
the Company's obligations and Participant's rights with respect to the
Transferred Amounts under Part I, if any, shall automatically be extinguished
and become obligations and rights under Part II without further action.

ARTICLE II

DEFINITIONS

Wherever
used herein, a pronoun or adjective in the masculine gender includes the
feminine gender, the singular includes the plural, and the following terms have
the following meanings unless a different meaning is clearly required by the
context:

2.1
"Affiliated Group" shall mean Cinergy and all entities with whom
Cinergy 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.

2.2"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 as provided by the Plan.

2.3
"Board of Directors" means the Board of Directors of Cinergy.

2.4
"Cash Balance Make-Whole Account" means the account provided pursuant
to Section 4.4.

2.5
"Cash Balance Make-Whole Pay Credit" means a credit that is added to
a Participant's Cash Balance Make-Whole Account pursuant to Section 4.4.

2.6
"Cash Balance Program" means the cash balance formula under the
Cinergy Pension Plan.

2.7
"Change in Control" shall be deemed to have occurred upon:

(a) an acquisition 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 consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of Duke Energy Corporation  (and any new
directors whose election by the Board of Directors of Duke Energy Corporation
or nomination for election by the Duke Energy Corporation's shareholders was
approved by a vote of at least two-thirds (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 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 Directors of Duke Energy Corporation of a resolution to the effect that any
Person has acquired effective control of the business and affairs of Duke
Energy Corporation. 

2.8
"Cinergy" means Cinergy Corp., a Delaware corporation, and any
corporation that succeeds to its business and adopts the Plan.

2.9"Cinergy
Pension Plan" means (i) for purposes of Part I, the Cinergy Corp.
Non-Union Employees' Pension Plan as in effect on October 3, 2004, without
giving effect to amendments adopted thereafter, and (ii) for purposes of Part
II, the Cinergy Corp. Non-Union Employees' Pension Plan as in effect from time
to time.

2.10"Cinergy
Transition Benefit" means the benefit provided under Section 4.7.

2.11"Code"
means the Internal Revenue Code of 1986, as amended.  

2.12"Committee"
means the Compensation Committee of the Board of Directors of Duke Energy
Corporation or its delegate.

2.13"Company"
means Cinergy and its affiliated companies.

2.14
"Compensation" means "Compensation" as defined in the
Cinergy Pension Plan but without regard to the limitations of Code Section
401(a)(17).

2.15
"Effective Date" has the meaning given to such term in Article I.

2.16
"Employee" means a person employed by the Affiliated Group.

2.17
"ERISA" has the meaning given to such term in Article I.

2.18
"Interest Credit" means an amount credited pursuant to Section 4.6.

2.19
"Interest Factor" means the interest rate determined by the formula
(1 + i), raised to the one-twelfth (1/12th) power, minus one (1), where "i" equals
the yield on 30-year Treasury Bonds as published in the Federal Reserve
Statistical Release H.15 for the end of the third full business week of the
month prior to the beginning of the calendar quarter for which the monthly
accrual is being applied, but not more than an annual percentage rate of nine
percent (9%) and not less than an annual percentage rate of four percent (4%).

2.20
"Mid-Career Benefit" means the benefit provided pursuant to Article
XIII.

2.21
"Part A Benefit" means the benefit provided pursuant to Section 4.3.

2.22
"Participant" means an Employee who is entitled to receive benefits
from the Plan.

2.23"Part
I" and "Part II" of the Plan are defined in Article I.  

2.24"Plan"
means the Cinergy Corp. Excess Pension Plan.

 

 

 

 

 

2.25"Plan Year" means the calendar year.

2.26"Separation
from Service" shall mean, with respect to Part II, 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, provided
that 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 Part
I, “Separation from Service” shall mean a termination of employment within the
meaning of the Plan as in effect prior to the Effective Date.

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

2.28
"Supplemental Account" means the account provided under Section 4.5.

2.29
"Supplemental Credit" means a credit that is added to a Participant's
Supplemental Account pursuant to Section 4.5.

2.30
"Traditional Program" means the final average pay formula under the
Cinergy Pension Plan.

2.31
"Traditional Program Benefit" means the benefit provided pursuant to
Section 4.2.

ARTICLE III

ELIGIBILITY

3.1General
Rule.  Any Employee designated by the Committee shall be eligible to
participate in the Plan and shall remain eligible as long as he continues to be
an Employee or until designated ineligible by the Committee.  Notwithstanding
the foregoing, an Employee who is not a member of a "select group of
management or highly compensated employees" within the meaning of ERISA,
may not participate in the Plan.

3.2Eligibility
for Various Benefits.   

(a)Traditional Program
Benefit.  A Participant shall be eligible to receive a Traditional Program
Benefit under Section 4.2 if he participates in the Traditional Program, he
does not also participate in the Cash Balance Program, and his Compensation
exceeds the limitations of Section 401(a)(17) of the Code.

(b)Part A Benefit.  A
Participant shall be eligible to receive a Part A Benefit under Section 4.3 if
he is treated as a “Choice Participant” under the Cinergy Pension Plan (e.g.,
he elected to start participating in the Cash Balance Program effective on
April 1, 2007, or commenced participating therein on a later applicable rehire
or transfer date) and his Compensation exceeds the limitations of Section
401(a)(17) of the Code.

(c)Cash Balance
Make-Whole Account.  A Participant shall be eligible to receive Cash
Balance Make-Whole Pay Credits to his Cash Balance Make-Whole Account under
Section 4.4 if he participates in the Cash Balance Program and his Compensation
exceeds the limitations of Section 401(a)(17) of the Code.

(d)Supplemental Credits. 
A Participant shall be eligible to receive Supplemental Credits to his
Supplemental Account, under Section 4.5, at the sole discretion of the
Committee.  Each Participant who participated in the Cinergy Corp. Executive
Life Insurance Program and was an employee of the Company on December 31, 2008
shall be entitled to a Supplemental Credit to his Supplemental Account in an
amount determined by the Committee, which amount shall become vested only if he
attains age 50 and has at least five Years of Service (within the meaning of
the Cinergy Pension Plan) prior to his Separation from Service.

(e)Cinergy Transition
Benefit.  A Participant shall be eligible to receive a Cinergy Transition
Benefit, under Section 4.7, if he was hired prior to 2003 and elected to move
from the Traditional Program to the Investor Program or Balanced Program (as
defined in the Cinergy Pension Plan) on January 1, 2003 (or his later
applicable rehire or transfer date).

ARTICLE IV

BENEFITS

4.1 General.   

(a)            Part I. 
For purposes of Part I, a Participant's benefit shall be the benefit determined
under the Plan as in effect prior to the Effective Date.

(b)            Part II. 
For purposes of  Part II, the Plan provides: (i) a Traditional Program Benefit
described in Section 4.2 for each Participant who participates under the
Traditional Program, (ii) a Part A Benefit described in Section 4.3 for each
Participant who is treated as a “Choice Participant” under the Cinergy Pension
Plan (e.g., he elected to start participating in the Cash Balance
Program effective on April 1, 2007, or commenced participating therein on a
later applicable rehire or transfer date), (iii) a Cash Balance Make-Whole
Account described in Section 4.4 for each Participant who participates in the
Cash Balance Program, (iv) a Supplemental Account for each Participant
described in Section 4.5, and (v) a Cinergy Transition Benefit for each
Participant described in Section 4.7.

 

 

 

 

 

4.2            Traditional Program Benefit. 

(a)           General
Rule.           This Section 4.2 shall apply to each Participant eligible
for a Traditional Program Benefit.  Upon a Participant's Separation from
Service, the Participant will be entitled to a monthly benefit under the Plan
that is equal to the excess, if any, of his Unrestricted Benefit over his
Maximum Benefit, as defined below.  The benefit under the Plan will be
calculated after the Participant's benefits payable under the Cinergy Pension
Plan are calculated (as of the date benefits under the Plan are to commence).

(b)           Definitions. 
 

(i)           "Maximum
Benefit" means, for purposes of this Section 4.2, the monthly equivalent
of the benefit to which the Participant is entitled under the Cinergy Pension
Plan after applying Sections 415(b) and (e) of the Code and Section 401(a)(17)
of the Code.

(ii)           "Unrestricted
Benefit" means, for purposes of this Section 4.2, the monthly equivalent
of the benefit to which the Participant would be entitled under the Cinergy
Pension Plan, if that benefit had been determined without regard to the limitations
imposed on qualified retirement plan benefits under Sections 415(b) and (e) of
the Code, and the limitation imposed on qualified retirement plan compensation
under Section 401(a)(17) of the Code.  Notwithstanding the preceding sentence,
but only to the extent specified by the Committee, any nonelective employer
contributions (other than matching contributions) made on behalf of a
Participant under the Cinergy Corp. 401(k) Excess Plan during any applicable
period shall be taken into account when calculating such Participant's
Unrestricted Benefit.  The Committee from time to time, in its sole discretion,
may designate other amounts that shall be taken into account when calculating a
Participant's Unrestricted Benefit.  Notwithstanding the foregoing, a Participant's
benefit under the Plan shall be calculated without taking into account the
provision in the Cinergy Pension Plan which provides that, in the event the
Participant's highest average annual Earnings (as defined in the Cinergy
Pension Plan) occurs other than during his last 36 months of Participation (as
defined in the Cinergy Pension Plan), the Participant's Highest Average
Earnings (as defined in the Cinergy Pension Plan) shall be calculated as if the
Accrued Vacation Pay (as defined in Cinergy’s Pension Plan), if any, that was
received by the Participant was received during the last month that occurs
during the period that is used for purposes of determining the Participant's
Highest Average Earnings (as defined in the Cinergy Pension Plan).

4.3
          Part A Benefit.  Each eligible Participant’s Part A Benefit
shall be determined in the same manner as a Traditional Program Benefit, but
only with respect to the eligible Participant's Part A – Prior Benefit under
Article 28 of the Cinergy Pension Plan.

4.4
          Pay Credits to the Cash Balance Make-Whole Account.  With
respect to any month after January 1, 2009 that a Participant is eligible for a
Cash Balance Make-Whole Pay Credit under the Plan, the Participant's Cash
Balance Make-Whole Account shall receive a Cash Balance Make-Whole Pay Credit
equal to the excess, if any, of (a) the pay credit that would have been
provided under the Cinergy Pension Plan for the month if the Cinergy Pension
Plan used the definition of Compensation set forth herein and, to the extent
determined by the Committee from time to time, other types of excluded pay were
treated as eligible compensation under such Plan, over (b) the pay credit for
the month that is actually made to the Participant's account under the Cinergy
Pension Plan.  A Participant, while Disabled (as defined in the Cinergy Pension
Plan) and continuing to receive pay credits to the Participant's account under
the Cinergy Pension Plan, shall continue to receive Cash Balance Make-Whole Pay
Credits to the Participant's Cash Balance Make-Whole Account determined on the
same basis as his continued pay credits under the Cinergy Pension Plan, and
based upon his eligible Compensation.  In addition, each eligible Participant
shall receive a Cash Balance Make-Whole Pay Credit to the Participant's Cash
Balance Make-Whole Account equal to any reduction in a benefit under the
Cinergy Pension Plan resulting from the limitations imposed by Section 415 of
the Code.  Where an account balance under the Cinergy Pension Plan has been
established for a Participant prior to January 1, 2009, the Committee shall
establish an opening balance for the Participant's Cash Balance Make-Whole
Account that is designed to provide a benefit under the Plan comparable to the
additional benefit that would have been provided under the Plan through the
Cash Balance Program provisions of the Cinergy Pension Plan through December
31, 2008, had the benefit been determined without regard to the limitations
imposed by Sections 401(a)(17) or 415 of the Code.

4.5
        Supplemental Credits.  A Participant's Supplemental Account
shall receive Supplemental Credits, in such amounts and at such times, as the
Committee, in its sole discretion, may determine (including a Supplemental
Credit in such amount and such times, as the Committee, in its sole discretion,
may determine corresponding to the elimination of the Cinergy Corp. Executive
Life Insurance Program).

4.6
         Interest Credits.  An Interest Credit will be added to a
Participant's Cash Balance Make-Whole Account and to a Participant's
Supplemental Account as of the end of each calendar month ending prior to the
month in which the respective account is fully distributed or forfeited.  The
amount of the Interest Credit for a month will equal the balance of the
respective account as of the end of the prior month (after adding any Cash
Balance Make-Whole Pay Credit, Supplemental Credit and Interest Credit for the
prior month and subtracting any payment or forfeiture for the prior month)
multiplied by the Interest Factor for the month.

4.7
         Cinergy Transition Benefit.  For those Participants who were
hired prior to 2003 and elected to move from the Traditional Program to the
Investor Program or Balanced Program (as defined in the Cinergy Pension Plan)
on January 1, 2003 (or later applicable rehire or transfer date), the Cinergy
Pension Plan provides a special rule that the Annual Pension (as defined in the
Cinergy Pension Plan) shall be no less than the sum of the Participant's Prior
Conversion Pension (as defined in the Cinergy Pension Plan) and the Annual
Pension (as defined in the Cinergy Pension Plan) if the Participant had no
accrued benefit other than his Cash Balance Account (as defined in the Cinergy
Pension Plan) and had no amount credited to the Cash Balance Account (as
defined in the Cinergy Pension Plan) as an opening balance.  If, upon
Separation from Service, the special rule described in the immediately
preceding sentence is applicable to the Participant under the Cinergy Pension
Plan, determined as if the Participant elected to receive his benefit under the
Cinergy Pension Plan in the form of a single life annuity upon his Separation
from Service, the Participant shall receive from the Plan upon his Separation
from Service, the Actuarial Equivalent (as defined in the Cinergy Pension Plan)
present value (i.e., single lump sum) of the additional benefit (if any)
that would have been provided through the special rule under the Cinergy
Pension Plan, had the benefit under the special rule been determined without
regard to the limitations imposed by Sections 401(a)(17) or 415 of the Code,
which single lump sum shall be paid within 60 days after his Separation from
Service, or such later date required by Section 6.5.

 

 

 

 

 

4.8          Special Rule for Payments Under the Commercial
Business Unit Annual Incentive Plan.  Effective with respect to amounts
received on or after January 1, 2004, notwithstanding any other provision of
the Plan, for purposes of calculating the benefit under the Plan (including the
Maximum Benefit and Unrestricted Benefit) of any Participant who is a participant in
the Energy Merchant Business Unit Annual Incentive Plan, which is also known as
the Cinergy Corp. Commercial Business Unit Annual Incentive Plan, Duke Energy
Generation Services (DEGS) Annual Short-Term Incentive (STI) Discretionary Pool
Plan, Commercial Asset Management (CAM) Discretionary Pool Plan, Regulated
Portfolio Optimization & Fuels Discretionary Incentive Pool Plan, and
Wholesale Origination and Structuring Discretionary Incentive Pool Plan, or any
successor plan (collectively a "Commercial Unit Plan"), the amount of the Annual Performance Cash Award (as defined
in the Cinergy Pension Plan) that is to be taken into account for a Plan Year
shall not exceed the Participant's rate of annual Base Salary or Base Wage (as
those terms are defined in the Cinergy Pension Plan), as applicable, as of the
last day of the performance period for which the Annual Performance Cash Award
(as defined in the Cinergy Pension Plan) is calculated.  For purposes of
clarity, any amount payable under the Commercial Unit Plan or any other annual
incentive plan maintained by the Commercial Business Unit that is automatically
deferred until a subsequent Plan Year shall not be considered as part of the
Participant's Annual Performance Cash Award (as defined in the Cinergy Pension
Plan).  Notwithstanding the foregoing, the limitations contained in this
Section 4.2(b) shall not apply to amounts payable under the Cinergy Corp. Annual
Incentive Plan or the Duke Energy Corporation Annual Incentive Plan.

ARTICLE V

VESTING

5.1         
General Rule.  Unless the Committee provides otherwise for a particular
Participant at the time the Participant initially becomes eligible to
participate in the Plan or at the time of an award of a particular Supplemental
Credit (and any Interest Credits thereto), a Participant will become fully
vested in the Participant's Traditional Program Benefit, Part A Benefit, Cash
Balance Make-Whole Account, Supplemental Account, and Cinergy Transition
Benefit, if and as applicable, when the Participant becomes vested under the
Cinergy Pension Plan.  If a Participant's employment with the Company
terminates and the Participant is not fully vested, the unvested portion of the
Participant's benefit shall be immediately forfeited and no benefit under the
Plan shall be paid with respect thereto.

5.2         
Change in Control.  In the event of a Change in Control, all Participant
benefits under the Plan shall become fully and immediately vested and
non-forfeitable and shall thereafter be maintained and paid in accordance with
the terms of the Plan.

ARTICLE VI

PAYMENT OF BENEFITS

6.1          Timing of Payments. 

(a)           Part I. 
For purposes of Part I, the payment of a Participant's benefit under the Plan
will begin as of the same date his benefits under the Cinergy Pension Plan
begin.   Notwithstanding the foregoing, where the Actuarial Equivalent present
value of a Participant's Part I benefit payable under the Plan does not exceed
$5,000, the Committee or its designee will pay the excess in a single lump sum
equal to the Actuarial Equivalent (as defined in the Cinergy Pension Plan) of
the benefit otherwise payable.

(b)           Part II. 
For purposes of Part II, and subject to Section 6.5, a Participant who incurs a
Separation from Service on or after December 31, 2008 will receive, or will
begin to receive, payment of his vested Traditional Program Benefit, Part A
Benefit, Cash Balance Make-Whole Account, Supplemental Account, and Cinergy
Transition Benefit, if and as applicable, as of the first day of the month
following the commencement date elected by the Participant, and if the
Participant was not provided with the opportunity to make such an election or
did not effectively make such an election, in accordance with the default
timing rules specified on Exhibit A. 

6.2          
Election of Form of Benefit.  At such time as benefits under the Plan
become payable with respect to a Participant, such benefits shall be paid in
accordance with the benefit payment form then in effect unless otherwise
expressly provided by the Plan.

(a)           Part I. 
For purposes of Part I, the payment of a Participant's benefit under the Plan
will be paid in the same form in which the Participant elects to receive his
pension under the Cinergy Pension Plan.

(b)           Part II. 
 

(i)           Participant
Elections.  With respect to Part II, no later than December 31, 2008 (or
such earlier date set by the Committee), each Employee who was then a
Participant was provided an election from among the forms of benefit described
in Section 6.2(c) and on Exhibit A regarding the manner
in which such Participant's vested Traditional Program Benefit, Part A Benefit,
Cash Balance Make-Whole Account, and Supplemental Account (but only if such
Participant then-participated in the Cash Balance Program), if and as
applicable, shall be paid.  The election
described in this Section 6.2(b) shall be subject to such terms and conditions
as the Committee may specify in its sole discretion and shall be consistent
with the terms of Notice 2007-86 and the applicable proposed and final Treasury
Regulations issued under Section 409A of the Code.

(ii)           Default
Rules.   

(A)           General. 
To the extent that a Participant was not provided with the opportunity to make
an election or did not effectively make such an election, his vested
Traditional Program Benefit, Part A Benefit, Cash Balance Make-Whole Account
and Supplemental Account, if and as applicable, shall be paid in accordance
with default rules specified on Exhibit A. 

(B)           Cash
Balance Make-Whole Account.  For purposes of clarity, to the extent that a
Participant does not designate the form of payment for his vested Cash Balance
Make-Whole Account, and with respect to a Participant who 

 

 

 

 

 

first
becomes eligible to participate in the Plan after 2008, such Participant’s Cash
Balance Make-Whole Account, if and as applicable, shall be paid in a single
lump sum, notwithstanding anything contained in the Plan to the contrary, or
any other plan, policy, practice or program, contract or agreement with the
Company or the Affiliated Group (unless otherwise specifically provided therein
in a specific reference to the Plan).

(C)           Supplemental
Account.  For purposes of clarity, each Participant’s Supplemental Account,
if any, shall be paid: (A) in the same form as his Cash Balance Make-Whole
Account, if any, and (B) in the form of a single lump sum if he does not have a
Cash Balance Make-Whole Account.

(iii)          Benefits
that Commence Prior to 2009.  Benefits that commence to be paid to a
Participant prior to 2009 shall continue to be paid after 2008, in accordance
with the form of benefit elected, until fully paid out.  If a Participant has a
Separation from Service prior to 2009 and elects to commence the payment of his
benefit under the Cinergy Pension Plan prior to 2009, such election shall
govern the payment of his benefit under the Plan, which shall be paid at the
same time and in the same form as his benefit under the Cinergy Pension Plan. 

(c)             Available
Forms of Benefit – Part II.  Except as otherwise provided on Exhibit A,
the following forms of benefit are available under Part II.

(i)               Cash
Balance Make-Whole Account and Supplemental Account.  With respect to each
Participant who is provided with an election, the following forms of benefit
are available for the Participant’s Cash Balance Make-Whole Account and
Supplemental Account:  (A) a single lump sum payment, (B) monthly payments for
two to ten years, and (B) monthly payments for fifteen years.  In the event of
monthly installment payments, the amount of the payment for a particular month
shall be calculated as follows.  The monthly amount shall equal “V” divided by
“N,”  where “N” represents the number of months remaining in the payment term
and “V” represents the sum of the balance of the Participant's Cash Balance
Make-Whole Account and the balance of the Participant's Supplemental Account,
if any, determined as of the end of the prior month after adding any Cash
Balance Make-Whole Pay Credits, Supplemental Credits and Interest Credits for
the prior month and subtracting any payment or forfeiture for the prior month.

(ii)            Traditional
Program.  With respect to each Participant who is provided with an
election, the following forms of benefit are available for the Participant’s
Traditional Program Benefit, each of which shall be determined pursuant to the
payment provisions of the Cinergy Pension Plan.

(A)            Single
Life Annuity.  Provides the Participant with monthly payments for life.  All benefit
payments stop upon the Participant’s death.

(B)           
100%
Contingent Annuitant Option.  Provides the Participant with monthly payments for life,
and, if he dies before his Beneficiary, with 100% of the monthly amount
continuing after his death to his Beneficiary for the remainder of the
Beneficiary’s lifetime.  If the Beneficiary dies before the Participant and the
Participant commenced his benefit on or after age 50, the Participant’s benefit
will increase to the amount of the Single Life Annuity on the first of the
month after the Company is notified of the Beneficiary's death.

(C)          
66-2/3%
Contingent Annuitant Option.  Provides monthly payments for the Participant’s life,
and, if he dies before his Beneficiary, with 66-2/3% of the monthly amount
continuing after his death to his Beneficiary for the remainder of his
Beneficiary’s lifetime.  If his Beneficiary dies before him, the Participant’s
benefit will increase to the amount of the Single Life Annuity on the first of
the month after the Company is notified of the Beneficiary's death.

(D)          
50%
Contingent Annuitant Option.  Provides monthly payments for the Participant’s life,
and, if he dies before his Beneficiary, with 50% of the monthly amount
continuing after his death to his Beneficiary for the remainder of his
Beneficiary’s lifetime.  If his Beneficiary dies before him and he commenced
his benefit on or after age 50, his benefit will increase to the amount of the
Single Life Annuity on the first of the month after the Company is notified of
the Beneficiary's death.

(E)           Ten-Year Certain and
Life Option. 
Provides the Participant with a monthly amount payable during his lifetime.  If
his death occurs before he receives payments for ten years, the person he names
as Beneficiary (or his Beneficiary's estate) receives payments for the
remainder of the original ten-year period.  If the Participant dies after he
receives ten years of payments, no further benefits are payable to any
Beneficiary.  The Participant’s benefit under this option does not increase to
the Single Life Annuity if his Beneficiary dies before him.

(iii)            Part A
Benefit.  With respect to each Participant who is provided with an
election, the same forms of benefit are available for the Participant’s Part A
Benefit as are described above in Section 6.2(c)(ii), except as described
below.

(A)            If the
Participant becomes entitled to a Part A Benefit under the Plan after 2007, his
Part A Benefit will be payable only in the form of a single lump sum.

(B)            If the
Participant commences the payment of his Part A Benefit prior to his attainment
of age 50, he shall not be entitled to receive his Part A Benefit in the form
of a 66-2/3%
Contingent Annuitant Option or a Ten-Year Certain and Life Option.

 

 

 

 

 

(d)           
Special Rule for Supplemental Account.  Notwithstanding any other
provision of the Plan, and subject to the restrictions of Section 409A of the
Code, prior to making a Supplemental Credit, the Committee may provide that the
portion of the Participant’s vested Supplemental Account that is attributable
to such Supplemental Credit shall be distributed in any benefit payment form specified
in advance by the Committee.

6.3           Payments in Cash.  Any
benefit payment due under the Plan shall be paid in cash.

6.4           Financial Hardship. 
Upon written request by a Participant, the Committee may distribute to a
Participant who is receiving a monthly payment form of distribution under Part
II, such amount of the remaining balance of the Participant's vested
Cash Balance Make-Whole Account and vested Supplemental Account, if any, which
the Committee determines is necessary to provide for a financial hardship
suffered by the Participant.  The term "financial hardship" shall
mean an "unforeseeable emergency" as defined under Section 409A of
the Code.  Payment shall be made within 60 days following the determination
that a withdrawal shall be permitted under this Section, or such later date as
may be required under Section 6.5.

6.5           Mandatory Six-Month Delay
Under Part II.   

(a)            Lump Sum
or Installments.  Except as otherwise provided in Sections 6.6(a) and (b),
and to the extent required under Section 409A of the Code, with respect to any
Participant who is a Specified Employee as of his or her Separation from
Service, the payment of benefits in the form of a single lump sum or
installments under Part II that are otherwise payable pursuant to the
Participant’s Separation from Service shall commence within 60 days after the
first business day of the seventh month following such Separation from Service
(or if earlier, upon the Participant's death).

(b)            Annuity
Payments.  Except as otherwise provided in Sections 6.6(a) and (b), and to
the extent required under Section 409A of the Code, with respect to any
Participant who is a Specified Employee as of his or her Separation from
Service, all annuity payments payable under Part II that are otherwise payable
pursuant to, and during the six-month period commencing upon, the Participant’s
Separation from Service, shall be accumulated (along with interest determined
utilizing the Interest Factor) and shall be paid within 60 days after the first
business day of the seventh month following such Separation from Service (or if
earlier, upon the Participant's death).

6.6            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 benefits under Part II 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
Part II, 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 Order.  The Committee may, in its sole discretion, accelerate the
time or schedule of a payment under Part II 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 Part II 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 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 6.5 hereof,
the Committee may, in its sole discretion, provide for the acceleration of the
time or schedule of a payment under Part II 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 6.5 hereof, the
Committee may, in its sole discretion, provide for the acceleration of the time
or schedule of a payment under Part II to reflect payment of state, local, or
foreign tax obligations arising from participation in the Plan that apply to an
amount deferred under Part II 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 Part II
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 6.5 hereof, the Committee may, in its sole
discretion, provide for the acceleration of the time or schedule of a payment
under Part II 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 6.5 hereof, the
Committee may, in its sole discretion, provide for the acceleration of the time
or schedule of a payment under Part II 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 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 6.5 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.

6.7           Delay of Payments.  To
the extent permitted under Section 409A of the Code, the Committee may, in its
sole discretion, delay payment of benefits under Part II 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 Laws.  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.

6.8           Actual
Date of Payment.  If calculation of the amount of the payment under Part II
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 Part II 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 the Plan to the contrary except Section
6.5, and to the extent permitted by Section 409A of the Code, a payment will be
treated as made upon the date specified under Part II 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 VII

DEATH BENEFITS

7.1           General
Rule.  For purposes of Part I, death benefits shall be provided in
accordance with the Plan in effect prior to the Effective Date.  For purposes
of Part II, the Plan provides the following death benefits:  (i) Traditional
Program death benefits described in Section 7.2 for each Participant who
participates under the Traditional Program, (ii) Part A death benefits
described in Section 7.3 for each Participant who has a Part A Benefit, and
(iii) death benefits as described in Section 7.4 for each Participant who has a
Cash Balance Make-Whole Account or Supplemental Account.

7.2          
Traditional Program Death Benefit.  Upon the death of a Participant
under the Traditional Program of the Cinergy Pension Plan, if his Spouse is
entitled to receive a Spouse's benefit under the Cinergy Pension Plan, his
Spouse will be entitled to receive an annual benefit under the Plan that is
equal to the amount the Participant would have received under the Plan.  Any
excess pension benefits payable under this Section 7.2 to a Spouse will be
payable in equal monthly installments, each installment being equal to 1/12th of
the annual amount as determined pursuant to this Section 7.2.  If at the date
of his death a Participant had reached age 50, the first monthly installment
will be payable to the Participant's Spouse on the first day of the calendar
month coincident with or following the date of the Participant's death, if his
Spouse is then living.  If at the date of his death the Participant had not
reached age 50, the first monthly installment will be payable to the
Participant's Spouse on the first day of the calendar month coincident with or
following the date the Participant would have reached age 50, had he survived
until that date if his Spouse is then living.  In either event, subsequent
monthly installments will be payable on the first day of each month and will cease
upon the payment of the installment due on the first day of the calendar month
in which the Spouse dies.  For purposes of this Section 7.2, "Spouse"
means, with respect to any Participant, the Participant's lawfully married
Spouse, if any, on the applicable date.  The Plan will not recognize common law
arrangements or similar arrangements unless required to do so by federal law.

 

 

 

 

 

7.3            Part A Death Benefit.  The Part A Benefit
for a Participant's Spouse (as defined in Section 7.2) in the event of the
Participant’s death shall be determined in the same manner as the Traditional
Program death benefit in Section 7.2, but only with respect to the
Participant's Part A Benefit.

7.4          
Cash Balance Make-Whole Account and Supplemental Account Death Benefit. 
Upon a Participant's death, any remaining balance of a Participant's vested
Cash Balance Make-Whole Account and vested Supplemental Account shall be paid
to the Participant's Beneficiary as a death benefit.  The Committee will
provide each Participant with a form to be completed and filed with the
Committee whereby the Participant may designate a Beneficiary.  If the
Participant does not designate a Beneficiary, or if the Beneficiary who is
designated should predecease the Participant, the death benefit for a deceased
Participant shall be paid to the estate of the Participant, as the
Participant's Beneficiary.  If a Participant should die before payment of any
Plan benefits has commenced, payments of any death benefit shall be made to the
Participant's Beneficiary within 90 days after Separation from Service in the
same benefit payment form elected by the Participant, or otherwise required,
under Section 6.2.  If a Participant should die after payment of Plan benefits
has commenced, payment of any death benefit will be made to the Participant's
Beneficiary as a continuation of the benefit payment form that had been in
effect for the Participant.

ARTICLE VIII

AMENDMENT AND TERMINATION

Cinergy
retains the sole and unilateral right to terminate, amend, modify or supplement
the Plan, in whole or in part, at anytime.  Amendment shall be through action
of the Board of Directors or the Committee.  The Board of Directors or
Committee may delegate its respective 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 benefits earned prior to the
date of such amendment.  With respect to Part II, subject to Section 6.5
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.  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.

ARTICLE IX

ADMINISTRATION

9.1
          Top Hat Plan.  The Company intends for the Plan to be an
unfunded "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.

9.2
           Plan Administrator.  The Committee shall have the authority
to control and manage the operation and administration of the Plan except as
otherwise expressly provided in the Plan document.  The Committee may designate
other persons to carry out fiduciary responsibilities under the Plan.  The
Committee is the administrator of the Plan within the meaning 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 (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.  Benefits under the Plan shall be paid only if the
Committee decides in its discretion that the applicant is entitled to benefits
under the Plan.

ARTICLE X

CLAIMS PROCEDURE

10.1
       Claim.  A person with an interest in the Plan shall have the
right to file a claim for benefits under the Plan and to appeal any denial of a
claim for benefits.  Any request or application for a Plan benefit or to
clarify the claimant's rights to future benefits under the terms of the Plan
shall be considered to be a claim.

10.2
         Written Claim.  A claim for benefits will be considered as
having been made when submitted in writing by the claimant (or by such
claimant's authorized representative) to the Committee.  No particular form is
required for the claim, but the written claim must identify the name of the
claimant and describe generally the benefit to which the claimant believes he
is entitled.  The claim may be delivered personally during normal business hours
or mailed to the Committee.

10.3
         Committee Determination.  The Committee will 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 claim has been denied just as if he had
received actual notice of denial.

10.4
        Notice of Determination .  The notice informing the claimant
that his 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.

(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 claimant wishes to submit his
claim for review.

10.5
        Appeal.  If the claim is wholly or partially denied, the
claimant (or his 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 is entitled to a greater period of
time within which to submit his request for review of a denied claim, the
claimant shall have 60 days after he (or his authorized representative)
receives written notice of denial of his claim within which such request must
be submitted to the Committee.

10.6
        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 authorized representative may:

(a)            Review pertinent documents.

(b)            Submit issues and comments in
writing.

10.7
        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 will be made beyond the initial time for furnishing the
decision, written notice of the extension shall be furnished to the claimant
(or his 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 authorized representative within the appropriate time for
the decision.

10.8
        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.

10.9
        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.

10.10
      Exhaustion of Appeals.  A person must exhaust his rights to file a claim
and to request a review of the denial of his claim before bringing any civil
action to recover benefits due to him under the terms of the Plan, to enforce
his rights under the terms of the Plan, or to clarify his rights to future
benefits under the terms of the Plan.

10.11
      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 (1) to interpret and
construe the Plan and any rules or regulations under the Plan, (2) to determine
the eligibility of Employees to participate in the Plan, and the rights of
Participants to receive benefits under the Plan, and (3) to make factual
determinations in connection with any of the foregoing.  Benefits under the
Plan shall be paid only if the Committee decides in its discretion that the
applicant is entitled to benefits under the Plan.

10.12    
Civil Action.  Any civil action brought with respect to a decision of the
Committee on review shall be brought within one year of the mailing of the
written decision to the claimant.

 

ARTICLE XI

NATURE OF COMPANY'S OBLIGATION

11.1
       Nature of Obligation.  The Company's obligation to the Participant under
the Plan shall be an unfunded and unsecured promise to pay.  The rights of a
Participant or Beneficiary under the Plan shall be solely those of an unsecured
general creditor of the Company.  The Company shall not be obligated under any
circumstances to set aside or hold assets to fund its financial obligations
under the Plan.

11.2
        Financing.  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 the 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 the 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.  The Company's
liability for payment of benefits shall be determined only under the provisions
of the Plan, as it may be amended from time to time.

ARTICLE XII

GENERAL PROVISIONS

12.1
         No Right to Employment.  Nothing in the Plan shall be deemed to give
any person the right to remain in the employ of the Company or affect the right
of the Company to terminate any Participant's employment with or without cause.

12.2
         No Assignment.  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 the 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 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 6.6, 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 the Plan to an "alternate
payee" as defined in Section 414(p) of the Code.

12.3
        Withholding.  Any amount required to be withheld under applicable
Federal, state and local tax laws (including any amounts required to be withheld
under Section 3121(v) of the Code) will be withheld in such manner as the
Committee will determine and any payment under the Plan will be reduced by the
amount so withheld, as well as by any other lawful withholding.

12.4
        Governing Law.  The 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.

12.5        
Compliance with Section 409A of the Code.  It is intended that Part II 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.  The Plan
shall be construed, administered, and governed in a manner that effects such
intent, and the Company shall not take any action that would be inconsistent
with such intent.  Although the Company 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 the 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 of Directors, nor any
committee 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 the 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.

12.6         
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.

ARTICLE XIII

MID-CAREER BENEFIT

13.1
        Cinergy SERP.  The Cinergy Corp. Supplemental Executive Retirement Plan
(the "Cinergy SERP") was originally adopted effective as of January
1, 1983 by PSI Energy Inc. as the PSI Energy, Inc. Supplemental Retirement
Plan, was renamed effective as of January 1, 1997, and was last amended and
restated effective as of January 1, 1999, and has been subsequently amended. 
The Plan is intended as a continuation, replacement and complete restatement of
the Cinergy SERP for the only individual (the “Legacy SERP Participant”) who,
as of December 31, 2008, was an employee of the Company, participated in the
Cinergy SERP and had not yet commenced payment thereunder, and all rights,
benefits and obligations provided under the Cinergy SERP with respect to such
individual shall be extinguished and shall be provided hereunder.

13.2         
Eligibility.  The Legacy SERP Participant shall be eligible for a Mid-Career
Benefit under the Plan.  The Mid-Career Benefit (or spouse's benefit with
respect to the Mid-Career Benefit) under the Plan shall be calculated in the
same manner as such benefit would have been calculated under the Mid-Career
Benefit of the Cinergy SERP as in effect immediately prior to this restatement
of the Plan.  For purposes of clarity, the Mid-Career Benefit shall be
determined under the Traditional Program, and shall be reduced by the Legacy SERP
Participant’s: (a) benefit under the Cinergy Pension Plan’s Traditional Program
and the Cash Balance Program, (b) Cash Balance Make-Whole Account and
Supplemental Account and (c) Social Security benefits (50%), all in accordance
with the procedures contained in the Cinergy Pension Plan.

13.3.       
Payment.  Subject to provisions of Article VI, the Legacy SERP Participant’s
entire benefit under the Plan shall be paid in the form of an annuity, from
among the payment options selected by the Legacy SERP Participant, which
options shall be the same as those available for a Traditional Program
Benefit.  Payment of the Legacy SERP Participant’s benefit under the Plan shall
commence as of the first day of the month following the Legacy SERP
Participant’s Separation from Service or such later date required by Section
6.5.  In the event that the Legacy SERP Participant dies 

 

 

 

 

 

prior
to the commencement of the payment of his Plan benefit, such benefit shall be
paid to his spouse, if any, as if such benefit were a Traditional Program
Benefit under Section 7.2. 

IN
WITNESS WHEREOF, this amendment and restatement of the Plan is executed on
behalf of Cinergy Corp. this 31st day of December, 2008.

CINERGY
CORP.

 

 

By:          
/s/ JENNIFER L. WEBER___________

Jennifer
L. Weber

Senior
Vice President and

Chief
Human Resources Officer

 

 

 

 

 

 

EXHIBIT A

	
  Group Description

  	
  Commencement Date

  	
  Payment Forms

  
	
  Traditional
  Program Benefit:

  Participants
  who as of December 31, 2008 had terminated employment after 2004 and prior to
  attaining age 50 (code 3a)

  	
  Age
  designated by participant between age 50 and 65 and occurs in 2009 or later

  Default:
  Age 65

  	
  Single
  Life Annuity

  100%
  Contingent Annuitant

  66-2/3%
  Contingent Annuitant

  50%
  Contingent Annuitant

  Ten-Year
  Certain and Life

  
	
  Traditional
  Program Benefit:

  Participants
  who as of December 31, 2008 had terminated employment after 2004 and on and
  after attaining age 50 (code 3b)

  	
  Age
  designated by participant between age 50 and 62 and occurs in 2009 or later

  Default:
  Age 62

  	
  Single
  Life Annuity

  100% Contingent
  Annuitant

  66-2/3%
  Contingent Annuitant

  50%
  Contingent Annuitant

  Ten-Year
  Certain and Life

  
	
  Traditional
  Program Benefit:

  Participants
  who are employed as of December 31, 2008 (code 12)

  	
  Age 50
  toggle:  Separation from Service before age 50, either (i) age 50 or (ii) age
  65, as designated by participant

  Age 50
  toggle: Separation from Service on or after age 50, either (i) later of age
  62 or Separation from Service or (ii) Separation from Service, as designated
  by participant

  Rule of
  85 toggle:  Separation from Service before 85 points, one of the following as
  designated by the participant: (i) later of age 50 or Separation from
  Service, (ii) later of age 62 or Separation from Service, or (iii) later of
  age 65 or Separation from Service

  Rule of
  85 toggle: Separation from Service on or after 85 points, Separation from
  Service

  Default:
  Age 50 toggle, with commencement at age 62 or later Separation from Service
  (if Separation from Service occurs on or after age 50) and at age 65 or later
  Separation from Service (if Separation from Service occurs prior to age 50)

  	
  Single
  Life Annuity

  100%
  Contingent Annuitant

  66-2/3%
  Contingent Annuitant

  50%
  Contingent Annuitant

  Ten-Year
  Certain and Life

  
	
  Traditional
  Program Benefit:

  Participants
  who become participants after 2008 (code 14)

  	
  Separation
  from Service before 85 points, age 62

  Separation
  from Service on or after 85 points, Separation from Service

  	
  Single
  Life Annuity

  100%
  Contingent Annuitant

  66-2/3%
  Contingent Annuitant

  50%
  Contingent Annuitant

  Ten-Year
  Certain and Life

  
	
  Cash
  Balance Make-Whole Account:

  Participants
  who terminated employment after 2004 but before 2007 (code 7)

  	
  Age 65

  	
  Lump sum

  
	
  Cash
  Balance Make-Whole Account:

  Participants who have only participated in the Cash Balance
  Program and who have a Cash Balance Make-Whole Account as of December 31,
  2008 (code 4)

  Participants
  who elected to participate in the Cash Balance Program effective on January
  1, 2003 and who have a Cash Balance Make-Whole Account as of December 31,
  2008 (code 5)

  Participants
  with A+B Conversion who have a Cash Balance Make-Whole Account and
  Traditional Program Benefit as of December 31, 2008 (codes 6a and 6b)

  	
  Separation
  from Service

  If
  Separation from Service occurs in 2008, payment will commence on July 1, 2009

  	
  Lump sum

  Monthly
  installments over a two-year to 10-year period, or over 15 years

  Default:
  Lump sum

  
	
  Cash
  Balance Make-Whole Account:

  Participants
  with A+B Conversion and who first become entitled to a Cash Balance
  Make-Whole Account after 2008 (codes 11 and 19)

  	
  Separation
  from Service

  	
  Lump sum

  
	
  Supplemental
  Account

  	
  Separation
  from Service

  	
  Lump sum

  Monthly
  installments over a two-year to 10-year period, or over 15 years

  (Election
  with respect to Cash Balance Make-Whole Account, if any, controls)

  
	
  Part A
  Benefit:

  Participants
  with A+B Conversion who become eligible for a Part A Benefit after 2008 (code
  19)

  Participants
  with A+B Conversion and became entitled to Part A Benefit under the Plan in
  2008 (code 18b)

  Participants
  with A+B Conversion and Part A Benefit only as of December 31, 2008, but
  excluding those who first became entitled to a benefit under the Plan in 2008
  (code 13)

  	
  Separation
  from Service before 85 points, age 62

  Separation
  from Service after 85 points, Separation from Service

  	
  Lump sum

  
	
  Part A
  Benefit:

  Participants
  with A+B Conversion and who have a Part A Benefit and a Cash Balance
  Make-Whole Account as of December 31, 2008, but excluding those who first
  became entitled to a benefit under the Plan in 2008 (codes 6a and 6b)

  	
  Age 50
  toggle:  Separation from Service before age 50, one of the following as
  designated by the participant (i) Separation from Service, (ii) age 50 or
  (iii) age 65

  Age 50
  toggle:  Separation from Service after age 50, either (i) later of age 62 or
  Separation from Service or (ii) Separation from Service, as designated by
  participant

  Rule of
  85 toggle:  Separation from Service before 85 points, one of the following as
  designated by the participant: (i) Separation from Service, (ii) later of age
  50 or Separation from Service, (iii) later of age 62 or Separation from
  Service, or (iv) later of age 65 or Separation from Service

  Rule of
  85 toggle:  Separation from Service on or after 85 points, Separation from
  Service

  Default:
  Age 50 toggle, with commencement at age 62 or later Separation from Service
  (if Separation from Service occurs on or after age 50) and at age 65 or later
  Separation from Service (if Separation from Service occurs
  prior to age 50)

  	
  Before
  Age 50:

  Lump Sum

  100%
  Contingent Annuitant

  50%
  Contingent Annuitant

  Single
  Life Annuity

  Default:
  Annuity

  On or
  after Age 50:

  Lump Sum

  Single
  Life Annuity

  100%
  Contingent Annuitant

  66-2/3%
  Contingent Annuitant

  50%
  Contingent Annuitant

  Ten-Year
  Certain and Life

  Default:
  Annuity

  
	
  Mid-Career
  Benefit (code 9)

  	
  Separation
  from Service

  	
  Single
  Life Annuity

  100% Contingent
  Annuitant

  66-2/3%
  Contingent Annuitant

  50%
  Contingent Annuitant

  Ten-Year
  Certain and Life

  

 

 

 

 

 

 

·         
The
term ”A+B Conversion” refers to a Participant who elected to start
participating in the Cash Balance Program effective on April 1, 2007, or upon a
later rehire or transfer date, and who previously participated in the
Traditional Program.

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