Document:

Exhibit 10.2

 

DUKE ENERGY CORPORATION 

EXECUTIVE CASH BALANCE PLAN

 

As Amended and Restated Effective August 26,
2008

 

ARTICLE I

PURPOSE OF PLAN

 

The
purpose of the Duke Energy Corporation Executive Cash Balance 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, 1997 and was amended
thereafter from time to time.  Effective January 1,
1999, the Plan replaced the PanEnergy Corp Key Executive Retirement Benefit
Equalization Plan and all benefits provided thereunder were provided in
accordance with the terms set forth herein. 
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 August 26, 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”).

 

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.”  Any “amounts deferred” in taxable years
beginning before January 1, 2005 (within the meaning of Section 409A of
the Code) and any earnings thereon shall be governed by the terms of Part I
of the Plan, as set forth herein.  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 of the Plan as of October 3, 2004, or add
a new material benefit or right to Part I of the Plan.  As of January 1, 2005 (“Effective Date”),
Part I of the Plan 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 of the Plan (other than earnings) on or after that
date.

 

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
shall be governed by the terms and conditions of Part II of the Plan, as
set forth herein.  To the extent that any
of those amounts were credited under the Plan prior to the Effective Date (the “Transferred
Amounts”), then the Committee shall transfer the Transferred Amounts from Part I
of the Plan to Part II of the Plan and credit those amounts to the
appropriate bookkeeping accounts under Part II of this Plan, as selected
by the Committee in its sole discretion. 
As a result of such transfer and crediting, all of the Company’s
obligations and Participant’s rights with respect to the Transferred Amounts
under Part I of the Plan, if any, shall automatically be extinguished and
become obligations and rights under Part II of this Plan 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 the
Company and all entities with whom the Company would be considered a single
employer under Sections 414(b) and 414(c) of the Code, provided that
in applying Section 1563(a)(1), (2), and (3) for purposes of
determining a controlled group of corporations under Section 414(b) of
the Code, the term “at least 45 percent” is used instead of “at least 80
percent” each place it appears in Code Section 1563(a)(1), (2), and (3),
and in applying Treasury Regulation Section 1.414(c)-2 for purposes of
determining trades or businesses (whether or not incorporated) that are under
common control for purposes of Section 414(c), the term “at least 45
percent” is used instead of “at least 80 percent” each place it appears in that
regulation.  Such term shall be
interpreted in a manner consistent with the definition of “service recipient”
contained in Section 409A of the Code.

 

2.2                                 “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.

 

2.3                                 “Board of Directors” means the Board
of Directors of Duke Energy Corporation.

 

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

 

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

 

(b)                                 during any period of two (2) consecutive
years (not including any period prior to the Effective Date), individuals who
at the beginning of such period constitute the Board of Directors (and any new
directors whose election by the Board of Directors 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;

 

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

 

2.5                                 “Code” means the Internal Revenue
Code of 1986, as amended.

 

2.6                                 “Committee” means the Compensation
Committee of the Board of Directors or its delegate.

 

2.7                                 “Company” means Duke Energy
Corporation and its affiliated companies.

 

2.8                                 “Compensation” means “Compensation”
as defined in the Retirement Cash Balance Plan but without regard to the
limitations of Code Section 401(a)(17) and including Employee deferrals
(except for deferrals of long-term incentive awards) under the Duke Energy
Corporation Executive Savings Plan.

 

2.9                                 “Employee” means a person employed
by the Affiliated Group.

 

2.10                           “Equalization Plan” means the
PanEnergy Corp Key Executive Retirement Benefit Equalization Plan as it existed
on December 31, 1998.

 

2.11                           “Interest Credit” means an amount credited
pursuant to Section 4.4 of the Plan.

 

2.12                           “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%).

 

2.13                           “Make-Whole Benefit” means the
benefit provided pursuant to Section 4.2 of the Plan.

 

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2.14                           “Participant” means an Employee who
is entitled to receive benefits from the Plan.

 

2.15                           “Part I” and “Part II” of
the Plan are defined in Article I.

 

2.16                           “Pay Credit” means a credit that is
added to a Participant’s Make-Whole Account pursuant to Section 4.2.

 

2.17                           “Plan” means the Duke Energy
Corporation Executive Cash Balance Plan.

 

2.18                           “Retirement Cash Balance Plan” means
(i) for purposes of Part I, the Duke Energy Retirement Cash Balance
Plan as in effect on October 3, 2004, without giving effect to amendments
adopted thereafter, and (ii) for purposes of Part II, the Duke Energy
Retirement Cash Balance Plan as in effect from time to time.

 

2.19                           “Separation from Service” shall mean
a termination of employment with the Affiliated Group in such a manner as to
constitute a “separation from service” as defined under Section 409A of
the Code.  To the extent permitted by Section 409A
of the Code, the Committee retains discretion, in the event of a sale or other
disposition of assets, to specify whether a Participant who provides services
to the purchaser immediately after the transaction has incurred a Separation
from Service.

 

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

 

2.21                           “Supplemental Credit” means a credit
that is added to a Participant’s Supplemental Account pursuant to Section 4.3.

 

2.22                           “Supplemental Benefit” means the
benefit provided under Section 4.3 of the Plan.

 

2.23                           “Supplemental Retirement Plan” means
the Supplemental Retirement Plan for Employees of Duke Power Company as it
existed on December 31, 1996.

 

2.24                           “Supplemental Security Plan” means
the Duke Power Company Supplemental Security Plan as it existed on December 31,
1996.

 

ARTICLE III

ELIGIBILITY

 

3.1                                 General 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.  Participants shall not receive any benefits 

 

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under
the terms of the Supplemental Retirement Plan, the Supplemental Security Plan
or the Equalization Plan.

 

3.2                                 Former Employees. 
Former Employees, (i) whose Company employment terminated before January 1,
1997, and who had accrued benefits under the Supplemental Retirement Plan or
Supplemental Security Plan, or (ii) whose Company employment terminated
before January 1, 1999, and who had accrued benefits under the
Equalization Plan, will receive payment, or will continue to receive payment,
of such benefits under the terms of such plans. 
Such former Employees will not participate in this Plan.

 

ARTICLE IV

BENEFITS

 

4.1                                 General Rule. 
The Plan provides a Make-Whole Benefit and may provide a Supplemental
Benefit.  Each Participant shall have a
Make-Whole Account, which is a bookkeeping account established under this Plan
and shall be eligible for a Make-Whole Benefit. 
The Committee will determine whether a Participant is to be eligible for
a Supplemental Benefit, in which case a “Supplemental Account,” which is a
bookkeeping account, shall be established.

 

4.2                                 Pay Credits to the Make-Whole
Account.  Under the Make-Whole Benefit, for any month
that a Participant is eligible to participate in this Plan, the Participant’s
Make-Whole Account shall receive a Pay Credit equal to the excess, if any, of (a) the
pay credit that would have been provided under the Retirement Cash Balance Plan
for the month if the Retirement Cash Balance 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 Retirement Cash Balance
Plan.  A Participant, while “Disabled” as
defined in the Retirement Cash Balance Plan and continuing to receive pay
credits to the Participant’s account under the Retirement Cash Balance Plan,
shall continue to receive Pay Credits to the Participant’s Make-Whole Account
determined on the same basis as his continued pay credits under the Retirement
Cash Balance Plan, and based upon his eligible Compensation.  In addition, the Make-Whole Benefit provides
a Pay Credit to the Participant’s Make-Whole Account equal to any reduction in
a benefit under the Retirement Cash Balance Plan resulting from the limitations
imposed by Section 415 of the Code. 
Where an opening account balance under the Retirement Cash Balance Plan
has been established for a Participant, the Committee, in its sole discretion,
may establish an opening balance for the Participant’s Make-Whole Account that
is designed to provide a transition benefit comparable to the benefit provided
through the Retirement Cash Balance Plan opening account balance, but without
regard to the limitations imposed by Sections 401(a)(17) or 415 of the
Code.  If the value of the benefit which
a vested Participant had accrued under the Supplemental Retirement Plan as of December 31,
1996, is greater than the value of the Participant’s Make-Whole Account on the
date the Participant retires, such higher value shall apply.

 

4.3                                 Supplemental Credits. 
A Participant’s Supplemental Account shall receive such Supplemental
Credits, in such amounts and at such times, as the Committee, in its sole
discretion, may determine.  Supplemental
Credits may include, but are not limited to, an opening account balance or a
one-time credit in recognition of the December 31, 1998, discontinuance of

 

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supplemental
pay credits.  Notwithstanding Sections
4.3 and 4.4 to the contrary, the Minimum Benefit feature of Section 4.3(e) of
the Plan, as in effect prior to January 1, 1999, is preserved herein and
incorporated by reference.

 

4.4                                 Interest Credits. 
An Interest Credit will be added to a Participant’s 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 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.  Notwithstanding the
foregoing, and for purposes of Part I only, Interest Credits to the
Supplemental Account of a Participant whose employment with the Company terminates
before attaining the earliest retirement age under the Retirement Cash Balance
Plan will be suspended beginning with the month during which employment
terminates and will not resume until the month following the month during which
payment of the Supplemental Benefit commences.

 

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 Make-Whole Account and the Participant’s Supplemental Account, if
any, when (i) the Participant becomes vested under the Retirement Cash
Balance Plan, or (ii) the Participant’s employment with the Company
terminates on account of the Participant’s death or the Participant having
become “Disabled”, as defined in the Retirement Cash Balance Plan.  If a Participant’s employment with the Company
terminates and the Participant is not fully vested, the unvested portion of the
Participant’s Make-Whole Account and of the Participant’s Supplemental Account,
if any, shall be immediately forfeited and no benefit under the Plan shall be
paid with respect thereto.

 

5.2                                 Prior Supplemental Credits. 
Notwithstanding the foregoing, any one-time Supplemental Credit to a
Participant’s Supplemental Account that is made in recognition of the December 31,
1998 discontinuance of supplemental pay credit, and any Interest Credits
thereon, shall not vest, and shall be forfeited if the Participant’s employment
with the Company terminates before January 1, 2004, unless such employment
termination is on account of the Participant’s retirement under the Retirement
Cash Balance Plan, death, or the Participant having become “Disabled,” as
defined in the Retirement Cash Balance Plan, or unless such employment
termination is by the Company other than for “cause”.  The Company shall have “cause” to terminate
the Participant’s employment upon (a) the willful and continued failure by
the Participant to substantially perform his employment duties (other than any
such failure resulting from the Participant’s incapacity due to physical or
mental illness) after demand for substantial performance is delivered by the
Company, specifically identifying the manner in which the Company believes the
Participant has not substantially performed his duties, or (b) the willful
engaging by the Participant in misconduct which is materially injurious to the
Company, monetarily or otherwise.  For
purposes of this Section, no act, or failure to act, on the 

 

6

 

Participant’s
part shall be considered “willful” unless done, or omitted to be done, by him
not in good faith and without reasonable belief that his action or omission was
in the best interest of the Company.

 

5.3                                 Change in Control. 
In the event of a Change in Control, all Participant accounts 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 this Plan.

 

ARTICLE VI

PAYMENT OF BENEFITS

 

6.1(a)                   Timing of Payments Under Part I. 
For purposes of Part I of the Plan, a Participant whose Company
employment terminates prior to the Participant’s earliest retirement age under
the Retirement Cash Balance Plan will receive, or will begin to receive,
payment of his vested Make-Whole Account and his vested Supplemental Account,
if any, as soon as administratively feasible following the month in which the
Participant attains age 55.  A
Participant whose Company employment terminates after the Participant’s
earliest retirement age under the Retirement Cash Balance Plan will receive, or
will begin to receive, payment of his vested Make-Whole Account and his vested
Supplemental Account, if any, as soon as administratively feasible following
the month in which the Participant’s employment terminates.  However, a Participant, while “Disabled” (as
defined in the Retirement Cash Balance Plan) and continuing to receive pay
credits to the Participant’s account under the Retirement Cash Balance Plan,
shall not receive payment of benefits during the period the Participant
receives such pay credits.  Any other
Participant whose Company employment terminates and whose Make-Whole Account
and Supplemental Account, if any, have a combined balance, as of the last day
of the month during which employment terminated, of less than $25,000, will
receive payment of his vested Make-Whole Account and his vested Supplemental
Account, if any, in a single sum, as soon as administratively feasible
following the month in which the Participant’s employment with the Company terminates.

 

6.1(b)                  Timing of Payments Under Part II. 
For purposes of Part II of the Plan, and subject to Section 6.5,
a Participant whose Company employment terminates on or after December 31,
2006 will receive, or will begin to receive, payment of his vested Make-Whole
Account and his vested Supplemental Account, if any, within 60 days after
Separation from Service.

 

6.2(a)(1)                                                     Election of Form of Benefit
Under Part I.  With respect to Part I of the Plan, each
Participant has been provided the opportunity to elect from among the forms of
benefit payment specified in Section 6.2(b)(1) the manner in which
such Participant’s vested Make-Whole Account and his vested Supplemental
Account, if any, shall be paid.  A
Participant may change his form of benefit payment election under Part I
of the Plan at any time, and from time to time, by completing such form as the
Committee provides and filing the completed form with the Committee.  No such change shall become effective unless
and until the Participant has continued in employment with the Company for at
least one year from the date on which the Committee receives notification of
the change.

 

7

 

6.2(a)(2)                                                   Election of Form of Benefit
Under Part II.  With respect to Part II of the Plan, no
later than December 31, 2008 (or such earlier date set by the Committee),
each Participant must elect from among the forms of benefit payment specified
in Section 6.2(b)(2) the manner in which such Participant’s vested
Make-Whole Account and his vested Supplemental Account, if any, shall be
paid.  The election described in this Section 6.2(a)(2) 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.  To the extent that a
Participant does not designate the manner in which such Participant’s vested
Make-Whole Account and his vested Supplemental Account, if any, shall be paid
as provided in this Section 6.2(a)(2) (or such designation does not
comply with the terms of Part II of the Plan), such accounts shall be paid
in a single lump sum.  Notwithstanding
anything contained in the Plan to the contrary, except Section 6.2(d), 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 this Plan), a Participant who becomes eligible to
participate in the Plan after December 31, 2008 shall have no right to
choose a form of payment for his accounts, and, instead, his vested Make-Whole
Account and his vested Supplemental Account, if any, shall be paid in a single
lump sum.

 

6.2(b)(1)                                                  Forms of Benefit Under Part I. 
The forms of benefit payment available under Part I of the Plan
are:

 

(A)                              single lump sum payment;

(B)                                monthly payments for three years;

(C)                                monthly payments for ten years; and

(D)                               monthly payments for fifteen years.

 

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.

 

6.2(b)(2)                                                  Forms of Benefit Under Part II. 
The forms of benefit payment available under Part II of the Plan
are:

 

(A)                              single lump sum payment;

(B)                                monthly payments for two to ten
years; and

(C)                                monthly payments for fifteen years.

 

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.

 

6.2(c)                   Calculation of Installment Payments. 
In the event of monthly installment payments, the amount of the payment
for a particular month shall be calculated as follows:

 

	
  Monthly amount

  	
  =

  	
  V

  
	
   

  	
   

  	
  N

  

 

8

 

where

 

N                                       represents the number of months
remaining in the payment term and

 

V                                        represents the sum of the balance of
the Participant’s 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 Pay Credits, Supplemental Credits and Interest Credits for the prior
month and subtracting any payment or forfeiture for the prior month.

 

6.2(d)                                                                Forms of Benefit – Supplemental
Account.  Notwithstanding any other provision of the
Plan, 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, such
amount of the remaining balance of the Participant’s vested 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.  For purposes of Part I of the Plan, the
term “financial hardship” shall mean a severe financial hardship as determined
under federal income tax law, regulations and rulings which are applicable to
non-qualified deferred compensation plans. 
For purposes of Part II of the Plan, 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. 
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 from Part II of the Plan 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).

 

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 of the Plan as provided in
this Section.  The provisions of this Section are
intended to comply with the exception to accelerated payments under Treasury
Regulation Section 1.409A-3(j) and shall be interpreted and administered
accordingly.  Except as otherwise
specifically provided in Part II of this Plan, the Committee may not
accelerate the time or schedule of any payment or amount scheduled to be paid
under the Plan within the meaning of Section 409A of the Code.

 

9

 

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

 

(b)                                 Employment Taxes. 
The Committee may, in its sole discretion, provide for the acceleration
of the time or schedule of a payment under Part II of the Plan to pay the
Federal Insurance Contributions Act (FICA) tax imposed under Sections 3101,
3121(a), and 3121(v)(2) of the Code, or the Railroad Retirement Act (RRTA)
tax imposed under Sections 3201, 3211, 3231(e)(1), and 3231(e)(8) of the
Code, where applicable, on compensation deferred under the Plan (the FICA or
RRTA amount).  Additionally, the
Committee may, in its sole discretion, provide for the acceleration of the time
or schedule of a payment, to pay the income tax at source on wages imposed
under Section 3401 of the Code or the corresponding withholding provisions
of applicable state, local, or foreign tax laws as a result of the payment of
the FICA or RRTA amount, and to pay the 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 of the Plan at any time the Plan fails to meet the
requirements of Section 409A of the Code.  The payment may not exceed the amount required
to be included in income as a result of the failure to comply with the
requirements of Section 409A of the Code.

 

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

 

(e)                                  Certain Offsets. 
Subject to Section 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 of the Plan as satisfaction of a debt of the Participant to
the Company (or any entity which would be considered to be a single employer
with the Company under Section 414(b) or Section 414(c) of
the Code), where such debt is incurred in the ordinary course of the service
relationship between 

 

10

 

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 of the Plan where such payments
occur as part of a settlement between the Participant and the Company (or any
entity which would be considered to be a single employer with the Company under
Section 414(b) or Section 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 of
the Plan 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 

 

11

 

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 of the
Plan 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 of the Plan if the payment is made during the
first calendar year in which the calculation of the amount of the payment is
administratively practicable.  Notwithstanding the foregoing, payment must be
made no later than the latest possible date permitted under Section 409A
of the Code.  Moreover, notwithstanding
any other provision of this Plan to the contrary except Section 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 of the Plan if the
payment is made as close as administratively practicable to the relevant
payment date specified herein, and in any event within the same calendar year.

 

ARTICLE VII

DEATH BENEFITS

 

7.1                                 Designation of Beneficiary. 
Upon a Participant’s death, any remaining balance of a Participant’s
vested 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.

 

7.2                                 Failure to 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.

 

7.3                                 Death Prior to Commencement of
Payment.  If a Participant should die while still
employed by the Company or otherwise before payment of any Plan benefits has
commenced, payments of any death benefit shall be made to the Participant’s
Beneficiary in the same benefit payment form elected by the Participant, or
otherwise required, under Section 6.2. 
Notwithstanding the foregoing, with respect to Part I of the Plan
only:  (i) if the Beneficiary is the
estate, then the death benefit shall be paid in a single lump sum, and (ii) if
the death benefit is less than $25,000, the death benefit shall be paid to the
Participant’s Beneficiary in a single lump sum.

 

7.4                                 Death After Commencement of Payment. 
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. 
Notwithstanding the foregoing, with respect to Part I of the Plan
only, if the Beneficiary is the estate, then the death benefit shall be paid in
a single lump sum.

 

12

 

7.5                                 Death Benefit for Certain
Participants.  If an Employee who was an active participant
in the Supplemental Security Plan on December 31, 1996, should die while
still employed by the Company, the portion of the death benefit attributable to
the Employee’s Supplemental Account, determined after taking into account other
death benefits attributable to the elimination of the Supplemental Security
Plan, shall not be less than the amount determined by multiplying two point
five (2.5) times the annualized base rate of pay of the Employee on the date of
death.

 

ARTICLE VIII

AMENDMENT AND TERMINATION

 

The
Committee retains the sole and unilateral right to terminate, amend, modify or
supplement this Plan, in whole or in part, at anytime.  The Committee may delegate the right to amend
the Plan, subject to any limitations it may impose, to an officer of the
Company.  No such action shall adversely
affect a Participant’s right to receive amounts then credited to a Participant’s
account with respect to events occurring prior to the date of such amendment.  With respect to Part II of the Plan, 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 this 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 

 

13

 

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:

 

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

 

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

 

(3)                                  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.

 

(4)                                  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 

 

14

 

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:

 

(1)                                  Review pertinent documents.

 

(2)                                  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 

 

15

 

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 this Plan shall be an
unfunded and unsecured promise to pay. 
The rights of a Participant or Beneficiary under this Plan shall be
solely those of an unsecured general creditor of the Company.  The Company shall not be obligated under any
circumstances to set aside or hold assets to fund its financial obligations
under this 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 this Plan are and remain general assets of the Company
subject to the claims of its creditors.  The
Company does not give, and the Plan does not give, any beneficial ownership
interest in any assets of the Company to a Participant or Beneficiary.  All rights of ownership in any assets are and
remain in the Company.  Any general asset
used or acquired by the Company in connection with the liabilities it has
assumed under this Plan shall not be deemed to be held under any trust for the
benefit of the Participant or any Beneficiary, and no general asset shall be
considered security for the performance of the obligations of the Company.  Any asset shall remain a general, unpledged,
and unrestricted asset of the Company.  The
Company’s liability for payment of benefits shall be determined only under the
provisions of this Plan, as it may be amended from time to time.

 

ARTICLE XII

GENERAL PROVISIONS

 

12.1                           No Right to Employment. 
Nothing in this Plan shall be deemed to give any person the right to
remain in the employ of the 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 this Plan shall in
any manner be liable for or subject to the debts, contracts, liabilities, or
torts of the person entitled to the benefit. 
If any Participant or Beneficiary under 

 

16

 

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

 

12.5                           Transfer of Accounts. 
The Make-Whole Account and Supplemental Account, if any, of each Spectra
Energy Participant maintained under the Plan immediately prior to the
Distribution Date shall be transferred to the Spectra Energy Corp Executive
Cash Balance Plan and assumed by Spectra Energy Corp as of the Distribution
Date.  Each such Spectra Energy
Participant shall have no further rights under the Plan immediately after his
Make-Whole Account and Supplemental Account, if any, are transferred to the
Spectra Energy Corp Executive Cash Balance Plan and assumed by Spectra Energy
Corp in accordance with the terms and conditions of the Employee Matters
Agreement by and between Duke Energy Corporation and Spectra Energy Corp (the “Employee
Matters Agreement”).  Capitalized terms
used in this Section 12.5 that are not defined in this Plan shall have the
meaning set forth in the Employee Matters Agreement.

 

12.6                           Compliance with Section 409A of
the Code.  It is intended that Part II of the Plan
comply with the provisions of Section 409A of the Code, so as to prevent
the inclusion in gross income of any amounts deferred hereunder in a taxable
year that is prior to the taxable year or years in which such amounts would
otherwise actually be paid or made available to Participants or Beneficiaries.  This Plan shall be construed, administered,
and governed in a manner that effects such intent, and the 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 this Plan is not warranted or
guaranteed.  Neither the Company, the
other members of the Affiliated Group, their respective directors, officers,
employees and advisors, the Board, nor 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 this Plan to Section 409A
of the Code will also include any proposed, temporary or final regulations, or
any other guidance, promulgated with respect to such Section 409A of the
Code by the U.S. Department of Treasury or the Internal Revenue Service.  For purposes of the Plan, the phrase 

 

17

 

“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.

 

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

 

IN WITNESS
WHEREOF, this amendment and restatement of the Plan is executed on behalf of Duke
Energy Corporation this 29th day of August, 2008.

 

	
   

  	
  DUKE ENERGY
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Marc E.
  Manly

  
	
   

  	
   

  	
  Marc E.
  Manly

  
	
   

  	
   

  	
  Group
  Executive & Chief Legal Officer

  

 

18Exhibit 10.3

 

AMENDMENT TO

EMPLOYMENT AGREEMENT

 

The Employment
Agreement dated April 4, 2006 between Duke Energy Corporation and James E.
Rogers (the “Agreement”) is amended, effective August 26, 2008, as
follows:

 

1.             Section 22
of the Agreement is replaced and superseded in its entirety as follows:

 

“22.         Compliance with Section 409A.  It is intended that
the payments and benefits provided under this Agreement shall either be exempt
from the application of, or comply with, the requirements of Section 409A of
the Code.  This Agreement shall be
construed, administered, and governed in a manner that effects such
intent.  Notwithstanding anything
contained in this Agreement to the contrary, the following provisions shall
apply:

 

(a)           The severance benefits described in Section 12(b) shall
only be payable if the termination of employment described therein constitutes
a “separation from service” within the meaning of Section 409A of the
Code, and the date on which such separation from service takes place shall be the
“date of termination.”  To the extent
that the Employee is required to execute a release of claims to receive
severance benefits, the release must be executed by the Employee and returned
to Duke Energy no later than 50 days following termination of employment.

 

(b)           To the extent that the continued benefits described in
Sections 5(a)(ii)(3) of the Cinergy Employment Agreement and Sections 6,
7, 8 or 9 of the Agreement are subject to Section 409A of the Code, then
they shall be subject to the following additional rules: (i) any
reimbursement of eligible expenses shall be paid within 30 days following the
Employee’s written request for reimbursement; provided that the Employee
provides written notice no later than 60 days prior to the last day of the
calendar year following the calendar year in which the expense was incurred; (ii) the
amount of expenses eligible for reimbursement, or in-kind benefits provided,
during any calendar year shall not affect the amount of expenses eligible for
reimbursement, or in-kind benefits to be provided, during any other calendar
year; and (iii) the right to reimbursement or in-kind benefits shall not
be subject to liquidation or exchange for another benefit.  The first sentence of Section 5(a)(ii)(3)(B) of
the Cinergy Employment Agreement is deleted in its entirety.

 

(c)           Any tax gross-up payments (or related payments) due under the
Cinergy Employment Agreement or the Agreement will be paid or reimbursed on the
earlier of (i) the date specified for payment therein, or (ii) December 31st
of the year following the year in which the applicable 

 

 

taxes are remitted or, in the case of reimbursement of
expenses incurred due to a tax audit or litigation to which there is no
remittance of taxes, the end of the calendar year following the year in which
the audit is completed or there is a final and nonappealable settlement or
other resolution of the litigation in accordance with Section 409A of the
Code.

 

(d)           Any reimbursement of legal fees and expenses described in Section 12(d) or
Section 19 of the Agreement shall be subject to the following
requirements:  (i) the fees and
expenses must be incurred at any time from the Effective Time through the
Employee’s remaining lifetime; (ii) the fees and expenses shall be paid
within 10 days following Duke Energy’s receipt of an invoice from the Employee,
provided that he submits the invoice at least 15 days before the end of the
calendar year next following the calendar year in which such fees and expenses
were incurred; (iii) the amount of such legal fees and expenses that Duke
Energy is obligated to pay in any given calendar year shall not affect the
legal fees and expenses that Duke Energy is obligated to pay in any other
calendar year; and (iv) the Employee’s right to have Duke Energy pay such
legal fees and expenses may not be liquidated or exchanged for any other
benefit.  To the extent the reimbursement
is contingent on the Employee being named the prevailing party or otherwise
being successful in the dispute, then the legal fess shall nonetheless be
reimbursed as provided herein, but the Employee shall be required to return
(within 10 days following receipt of demand therefore) all reimbursements of
the fees and expenses if the Employee does not so prevail in respect of at
least one material claim (whether the Employee is prosecuting or defending such
claim) in the dispute.

 

(e)           Notwithstanding anything contained in this Agreement to the
contrary, if the Employee is a “specified employee,” as determined under Duke
Energy’s policy for determining specified employees on the date of termination,
then to the extent required in order to comply with Section 409A of the
Code, all payments, benefits or reimbursements paid or provided under this
Agreement that constitute a “deferral of compensation” within the meaning of Section 409A
of the Code, that are provided as a result of a “separation from service”
within the meaning of Section 409A of the Code and that would otherwise be
paid or provided during the first six months following such date of termination
shall be accumulated through and paid or provided (together with interest at
the applicable federal rate under Section 7872(f)(2)(A) of the Code
in effect on the date of termination), within 30 days after the first business
day that is more than six months after the date of his separation from service
(or, if the Employee dies during such six-month period, within 30 days after
the Employee’s death).

 

(f)            Although Duke Energy shall use its best efforts to avoid the
imposition of taxation, interest and penalties under Section 409A of the 

 

2

 

Code, the tax treatment of the benefits provided under
this Agreement is not warranted or guaranteed. 
Neither Duke Energy, its affiliates, nor their respective directors,
officers, employees or advisers shall be held liable for any taxes, interest,
penalties or other monetary amounts owed by the Employee or other taxpayer as a
result of the Agreement.”

 

2.             Except
as explicitly set forth herein, the Agreement will remain in full force and
effect.

 

IN WITNESS WHEREOF, the parties hereto have executed this
amendment to the Agreement as of the day and year first above written.

 

 

	
   

  	
  DUKE
  ENERGY CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/Ann
  Maynard Gray

  
	
   

  	
  By:

  	
  Ann
  Maynard Gray

  
	
   

  	
  Title:

  	
  Lead Director

  
	
   

  	
   

  
	
   

  	
  /s/James
  E. Rogers

  
	
   

  	
  James E.
  Rogers

  
				

 

3

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