Document:

Exhibit 10.4

 

AMENDED AND RESTATED

CHANGE IN CONTROL AGREEMENT

 

THIS AGREEMENT, dated as of August 26, 2008, is made by and
between Duke Energy Corporation, a Delaware corporation (the “Company”), and
                              
(the “Executive”).

 

WHEREAS, the Company considers it essential to the best interests of
its shareholders to foster the continued employment of key management
personnel; and

 

WHEREAS, the Board recognizes that, as is the case with many publicly
held corporations, the possibility of a Change in Control exists and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its shareholders; and

 

WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Company’s management, including the Executive, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control; and

 

WHEREAS, the Company and the Executive are parties to a Change in
Control Agreement dated as of                 
(the “Effective Date”), which agreement is hereby amended, restated and
replaced in its entirety with this Agreement in order to comply with Section 409A
of the Code.

 

NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive, intending to be
legally bound, do hereby agree as follows:

 

1.        Definitions.  For purposes of this Agreement, the following
terms shall have the meanings indicated below:

 

(A)          “Accrued
Rights” shall have the meaning set forth in Section 3 hereof.

 

(B)           “Affiliate”
shall have the meaning set forth in Rule 12b-2 promulgated under Section 12
of the Exchange Act.

 

(C)           “Auditor”
shall have the meaning set forth in Section 4.2 hereof.

 

(D)          “Base
Amount” shall have the meaning set forth in Section 280G(b)(3) of the
Code.

 

(E)           “Beneficial
Ownership” shall have the meaning set forth in Rule 13d-3 under the
Exchange Act.

 

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(F)           “Board”
shall mean the Board of Directors of the Company.

 

(G)           “Cause”
for termination by the Company of the Executive’s employment shall mean (i) a
material failure by the Executive to carry out, or malfeasance or gross
insubordination in carrying out, reasonably assigned duties or instructions
consistent with the Executive’s position, (ii) the final conviction of the
Executive of a felony or crime involving moral turpitude, (iii) an
egregious act of dishonesty by the Executive (including, without limitation,
theft or embezzlement) in connection with employment, or a malicious action by
the Executive toward the customers or employees of the Company or any
Affiliate, (iv) a material breach by the Executive of the Company’s Code
of Business Ethics, or (v) the failure of the Executive to cooperate fully
with governmental investigations involving the Company or its Affiliates;
provided, however, that the Company shall not have reason to terminate the
Executive’s employment for Cause pursuant to this Agreement unless the
Executive receives written notice from the Company identifying the acts or
omissions constituting Cause and gives the Executive a 30-day opportunity to
cure, if such acts or omissions are capable of cure.

 

(H)          A
“Change in Control” shall be deemed to have occurred if the event set forth in
any one of the following paragraphs shall have occurred:

 

(a)           an
acquisition subsequent to the Effective Date by any Person of Beneficial
Ownership of thirty percent (30%) or more of either (A) the then
outstanding shares of common stock of the Company or (B) the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors; excluding, however, the
following: (1) any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from the Company, (2) any
acquisition by the Company and (3) any acquisition by an employee benefit
plan (or related trust) sponsored or maintained by the Company or any
Subsidiary;

 

(b)           during
any period of two (2) consecutive years (not including any period prior to
the Effective Date), individuals who at the beginning of such period constitute
the Board (and any new directors whose election by the Board or nomination for
election by the Company’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 the Company, whether
or not the Company is the surviving corporation in such transaction, other than
a merger, consolidation, or reorganization that would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into 

 

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voting securities of the
surviving entity) at least fifty percent (50%) of the combined voting power of
the voting securities of the Company (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 the Company or (B) a complete liquidation or
dissolution of the Company, which has been approved by the shareholders of the
Company (in each case, exclusive of any transactions or events resulting from
the separation of the Company’s gas and electric businesses); or

 

(e)           adoption
by the Board of a resolution to the effect that any person has acquired
effective control of the business and affairs of the Company.

 

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

 

(J)            “Company”
shall mean Duke Energy Corporation, a Delaware corporation, and, except in
determining under Section 1.H hereof whether or not any Change in Control
of the Company has occurred, shall include any successor to its business and/or
assets which assumes and agrees to perform this Agreement by operation of law,
or otherwise.

 

(K)          “Confidential
Information” shall have the meaning set forth in Section 8 hereof.

 

(L)           “DB
Pension Plan” shall mean any tax-qualified, supplemental or excess defined
benefit pension plan maintained by the Company (or a Subsidiary) and any other
defined benefit plan or agreement entered into between the Executive and the
Company (or a Subsidiary) which is designed to provide the Executive with
supplemental retirement benefits.

 

(M)         “DC
Pension Plan” shall mean any tax-qualified, supplemental or excess defined
contribution plan maintained by the Company (or a Subsidiary) and any other
defined contribution plan or agreement entered into between the Executive and
the Company (or a Subsidiary) which is designed to provide the executive with
supplemental retirement benefits.

 

(N)          “Date
of Termination” with respect to any purported termination of the Executive’s
employment after a Change in Control and during the Term, shall mean (i) if
the Executive’s employment is terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that the Executive shall not have
returned to the full-time performance of the Executive’s duties during such
thirty (30) day period), and (ii) if the Executive’s employment is
terminated for any other reason, the date specified in the Notice of
Termination (which, in the case of a termination by the Company, shall not be
less than thirty (30) days (except in the case of a termination for Cause) and,
in the case of a termination by the Executive, shall not be less than fifteen
(15) days nor (without the consent of the Company) more than sixty (60) days,
respectively, from the date such Notice of Termination is given).

 

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(O)          “Disability”
shall be deemed the reason for the termination by the Company of the Executive’s
employment, if, as a result of the Executive’s incapacity due to physical or
mental illness, the Executive shall have been absent from the full-time
performance of the Executive’s duties with the Company for a period of six (6) consecutive
months, the Company shall have given the Executive a Notice of Termination for
Disability, and, within thirty (30) days after such Notice of Termination is
given, the Executive shall not have returned to the full-time performance of
the Executive’s duties.

 

(P)           “Effective
Date” shall have the meaning given to such term in the Preamble to this
Agreement.

 

(Q)          “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended from time to
time.

 

(R)           “Excise
Tax” shall mean any excise tax imposed under Section 4999 of the Code.

 

(S)           “Executive”
shall mean the individual named in the first paragraph of this Agreement.

 

(T)           “Good
Reason” for termination by the Executive of the Executive’s employment shall
mean the occurrence (without the Executive’s express written consent which
specifically references this Agreement) after any Change in Control of any one
of the following acts by the Company, or failures by the Company to act, unless
such act or failure to act is corrected prior to the Date of Termination
specified in the Notice of Termination given in respect thereof: (i) a
reduction in the Executive’s annual base salary as in effect immediately prior
to the Change in Control (exclusive of any across the board reduction similarly
affecting all or substantially all similarly situated employees determined
without regard to whether or not an otherwise similarly situated employee’s
employment was with the Company prior to the Change in Control), (ii) a
reduction in the Executive’s target annual bonus as in effect immediately prior
to the Change in Control (exclusive of any across the board reduction similarly
affecting all or substantially all similarly situated employees determined
without regard to whether or not an otherwise similarly situated employee’s
employment was with the Company prior to the Change in Control), or (iii) the
assignment to the Executive of a job position with a total point value under
the Hay Point Factor Job Evaluation System that is less than seventy percent
(70%) of the total point value of the job position held by the Executive
immediately before the Change in Control; provided, however, that
in the event there is a claim by the Executive that there has been such an
assignment and the Company disputes such claim, whether there has been such an
assignment shall be conclusively determined by the HayGroup (or any successor
thereto) or if such entity (or any successor) is no longer in existence or will
not serve, a consulting firm mutually selected by the Company and the Executive
or, if none, a consulting firm drawn by lot from two nationally recognized
consulting firms that agree to serve and that are nominated by the Company and
the Executive, respectively (such consulting firm, the “Consulting Firm”) under
such procedures as the Consulting Firm shall in its sole 

 

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discretion establish; provided further that such procedures shall
afford both the Company and the Executive an opportunity to be heard; and further
provided, however, that the Company and the Executive shall use
their best efforts to enable and cause the Consulting Firm to make such
determination within thirty (30) days of the Executive’s claim of such an
assignment.  The Executive’s continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any act or failure to act constituting Good Reason hereunder.

 

(U)          “Notice
of Termination” shall have the meaning set forth in Section 5 hereof.

 

(V)           “Person”
shall have the meaning given in Section 3(a)(9) of the Exchange Act,
as modified and used in Sections 13(d) and 14(d) thereof, except that
such term shall not include (i) the Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any of its Affiliates, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the shareholders of the Company
in substantially the same proportions as their ownership of stock of the
Company.

 

(W)         “Release
Deadline” shall mean the 55th day immediately following the date that the
Executive incurs a “separation from service” within the meaning of Section 409A
of the Code.

 

(X)          “Repayment
Amount” shall have the meaning set forth in Section 7.3 hereof.

 

(Y)           “Restricted
Period” shall have the meaning set forth in Section 7.2 hereof.

 

(Z)           “Severance
Payments” shall have the meaning set forth in Section 4.1 hereof.

 

(AA)       “Severance
Period” shall have the meaning set forth in Section 4.1(C) hereof.

 

(BB)        “Subsidiary”
means an entity that is wholly owned, directly or indirectly, by the Company,
or any other affiliate of the Company that is so designated from time to time
by the Company.

 

(CC)        “Term”
shall mean the period of time described in Section 2 hereof (including any
extension, continuation or termination described therein).

 

(DD)       “Total
Payments” shall mean those payments so described in Section 4.2 hereof.

 

2.        Term
of Agreement. The Term of this Agreement shall commence on the Effective
Date and shall continue in effect through the second anniversary of the 

 

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Effective Date; provided, however, that commencing on the
date that is twenty-four (24) months following the Effective Date and each
subsequent monthly anniversary, the Term shall automatically be extended for
one additional month; further provided, however, the Company or
the Executive may terminate this Agreement effective at any time following the
second anniversary of the Effective Date only with six (6) months advance
written notice (which such notice may be given before such second anniversary);
and further provided, however, that, notwithstanding the above, if a Change in
Control shall have occurred during the Term, the Term shall in no case expire
earlier than twenty-four (24) months beyond the month in which such Change in
Control occurred.

 

3.             Compensation Other
Than Severance Payments. If the Executive’s employment shall be terminated
for any reason following a Change in Control and during the Term, the Company
shall pay the Executive (A) the salary amounts payable in the normal
course for service through the Date of Termination within 30 days after the
Date of Termination, and (B) and any rights or payments that have become
vested or that are otherwise due in accordance with the terms of any employee
benefit, incentive, or compensation plan or arrangement maintained by the
Company that the Executive participated in at the time of his or her
termination of employment (together, the “Accrued Rights”).

 

4.             Severance Payments.

 

4.1           Subject
to Section 4.2 hereof, and further subject to the Executive executing a
release of claims substantially in the form set forth as Exhibit A
to this Agreement and the release becoming effective and irrevocable in
accordance with its terms by the Release Deadline, if the Executive’s
employment is terminated following a Change in Control and during the Term (but
in any event not later than twenty-four (24) months following a Change in
Control), other than (A) by the Company for Cause, (B) by reason of
death or Disability, or (C) by the Executive without Good Reason, then, in
either such case, in addition to the payments and benefits representing the
Executive’s Accrued Rights, the Company shall pay the Executive the amounts,
and provide the Executive the benefits, described in this Section 4.1 (“Severance
Payments”).

 

(A)          A
lump-sum payment equal to (i) the Executive’s annual bonus payment earned
for any completed bonus year prior to termination of employment, if not
previously paid, plus (ii) a pro-rata amount of the Executive’s target
bonus under any performance-based bonus plan, program, or arrangement in which
the Executive participates for the year in which the termination occurs,
determined as if all program goals had been met, pro-rated based on the number
of days of service during the bonus year occurring prior to termination of
employment.  The amount described in
clause (i) shall be paid pursuant to the terms of the applicable
short-term incentive plan and shall not be conditioned on signing a release
described in Section 4.1.  The
amounts described in clause (ii) shall be paid within 30 calendar days
after the Release Deadline, or such later date as may be required under Section
13.1.

 

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(B)           In
lieu of any severance benefit otherwise payable to the Executive, the Company
shall pay to the Executive a lump sum severance payment, in cash, equal to two
(or, if less, the number of years (including partial years) until the Executive
reaches the Company’s mandatory retirement age, provided that the Company
adopts a mandatory retirement age pursuant to 29 USC §631(c)) times the sum of (i) the
Executive’s base salary as in effect immediately prior to the Date of
Termination or, if higher, in effect immediately prior to the first occurrence
of an event or circumstance constituting Good Reason, and (ii) the
Executive’s target short-term incentive bonus opportunity for the fiscal year
in which the Date of Termination occurs or, if higher, the fiscal year in which
the first event or circumstance constituting Good Reason occurs.  The amount described in this Section 4.1(B) shall
be paid within 30 calendar days after the Release Deadline, or such later date
as may be required under Section 13.1.

 

(C)           For
a period of two years immediately following the Date of Termination (or, if
less, the period until the Executive reaches the Company’s mandatory retirement
age, provided that the Company adopts a mandatory retirement age pursuant to 29
USC §631(c)) (the “Severance Period”), the Company shall arrange to provide the
Executive and his or her dependents medical and dental insurance benefits
substantially similar to those provided to the Executive and his or her
dependents immediately prior to the Date of Termination or, if more favorable
to the Executive, those provided to the Executive and his or her dependents
immediately prior to the first occurrence of an event or circumstance
constituting Good Reason, at no greater after tax cost to the Executive than
the after tax cost to the Executive immediately prior to such date or
occurrence.  Benefits otherwise
receivable by the Executive pursuant to this Section 4.1(C) shall be
reduced to the extent benefits of the same type are received by or made
available to the Executive during the Severance Period as a result of
subsequent employment (and any such benefits received by or made available to
the Executive shall be reported to the Company by the Executive).  In addition, the Company shall make a lump sum
cash payment, payable within 30 calendar days after the Release Deadline or
such later date as may be required under Section 13.1, in an amount equal
to the anticipated cost of basic life insurance coverage for the Severance
Period, based on the Company’s assumed cost for such coverage for internal
accounting purposes at the Date of Termination. 
The continued benefits described in this paragraph 4.1(C) that are
taxable benefits (and that are not disability pay or death benefit plans within
the meaning of Section 409A of the Code) are intended to comply, to the
maximum extent possible, with the exception to Section 409A of the Code
set forth in Section 1.409A-1(b)(9)(v) of the Treasury
Regulations.  To the extent that any of
those benefits either do not qualify for that exception, or are provided beyond
the applicable time periods set forth in Section 1.409A-1(b)(9)(v) of
the Treasury Regulations, then they shall be subject to the following
additional rules: (1) any reimbursement of eligible expenses shall be paid
within 10 calendar days following Executive’s written request for
reimbursement, or such later date as may be required under Section 13.1;  provided that the Executive provides written
notice no later than 15 calendar days prior to the last day of the calendar
year following the calendar year in which the expense was incurred; (2) the
amount of expenses eligible for reimbursement, or in-kind benefits provided,
during any calendar year shall not affect 

 

7

 

the amount of expenses eligible for reimbursement, or in-kind benefits
to be provided, during any other calendar year; and (3) the right to
reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit.

 

(D)          Executive’s
benefits accrued or credited through the Date of Termination under the DC
Pension Plan that are not vested as of the Date of Termination but that would
have vested had Executive remained employed by the Company for the remainder of
the Term shall be fully vested as of the Date of Termination and paid in
accordance with the terms of the applicable plan.  In addition to the benefits to which the
Executive is entitled under the DC Pension Plan, the Company shall pay the
Executive a lump sum amount, in cash, equal to the amount that would have been
contributed thereto by the Company on the Executive’s behalf during the
Severance Period, determined (x) as if the Executive made the maximum
permissible contributions thereto during such period, (y) as if the
Executive earned compensation during such period equal to the sum of the
Executive’s base salary and target bonus as in effect immediately prior to the
Date of Termination, or, if higher, as in effect immediately prior to the
occurrence of the first event or circumstance constituting Good Reason, and (z) without
regard to any amendment to the DC Pension Plan made subsequent to a Change in
Control and on or prior to the Date of Termination, which amendment adversely
affects in any manner the computation of benefits thereunder.  The amount described in the immediately
preceding sentence shall be paid within 30 calendar days after the Release
Deadline, or such later date as may be required under Section 13.1.

 

(E)           Executive’s
benefits accrued or credited through the Date of Termination of employment
under the DB Pension Plan that are not vested as of the Date of Termination but
that would have vested had Executive remained employed by the Company for the
remainder of the Term shall be fully vested as of the Date of Termination and
paid in accordance with the terms of the applicable plan. In addition to the
benefits to which the Executive is entitled under the DB Pension Plan, the
Company shall pay the Executive a lump sum amount, in cash, equal to the amount
that would have been allocated thereunder by the Company in respect of the
Executive (or accrued by the Executive, which accrual shall be calculated based
on the actuarial assumptions contained in the DB Pension Plan) during the
Severance Period, determined (x) as if the Executive earned compensation
during such period equal to the sum of the Executive’s base salary and target
bonus as in effect immediately prior to the Date of Termination, or, if higher,
as in effect immediately prior to the occurrence of the first event or
circumstance constituting Good Reason, and (y) without regard to any
amendment to the DB Pension Plan made subsequent to a Change in Control and on
or prior to the Date of Termination, which amendment adversely affects in any
manner the computation of benefits thereunder. 
The amount described in the immediately preceding sentence shall be paid
within 30 calendar days after the Release Deadline, or such later date as may
be required under Section 13.1.

 

(F)           Notwithstanding
the terms of any award agreement or plan document to the contrary, the
Executive shall be entitled to receive continued vesting of any long term
incentive awards, including awards of stock options but excluding awards 

 

8

 

of restricted stock, held by the Executive at the time of his or her
termination of employment that are not vested or exercisable on such date, in
accordance with their terms as if the Executive’s employment had not
terminated, for the duration of the Severance Period, with any options or
similar rights to remain exercisable (to the extent exercisable at the end of
the Severance Period) for a period of 90 days following the close of the
Severance Period, but not beyond the maximum original term of such options or
rights.

 

4.2           (A)          Notwithstanding any
other provisions of this Agreement, in the event that any payment or benefit
received or to be received by the Executive (including any payment or benefit
received in connection with a Change in Control or the termination of the
Executive’s employment, whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement) (all such payments and benefits, including
the Severance Payments, being hereinafter referred to as the “Total Payments”)
would be subject (in whole or part), to the Excise Tax, then, after taking into
account any reduction in the Total Payments provided by reason of Section 280G
of the Code in such other plan, arrangement or agreement, the Severance
Payments shall be reduced to the extent necessary so that no portion of the
Total Payments is subject to the Excise Tax but only if (i) the net amount
of such Total Payments, as so reduced (and after subtracting the net amount of
federal, state and local income taxes on such reduced Total Payments and after
taking into account the phase out of itemized deductions and personal
exemptions attributable to such reduced Total Payments) is greater than or
equal to (ii) the net amount of such Total Payments without such reduction
(but after subtracting the net amount of federal, state and local income taxes
on such Total Payments and the amount of Excise Tax to which the Executive
would be subject in respect of such unreduced Total Payments and after taking
into account the phase out of itemized deductions and personal exemptions
attributable to such unreduced Total Payments). 
If a reduction in Severance Payments is necessary pursuant to this Section 4.2(A),
then the reduction shall occur in the following order:  (i) cash payments under Section 4.1(A)(ii),
4.2(B), 4.2(D) and 4.2(E); (ii) cancellation of accelerated vesting
of performance-based equity awards (based on the reverse order of the date of
grant); (iii) cancellation of accelerated vesting of other equity awards
(based on the reverse order of the date of grant); and (iv) reduction of
welfare benefits.

 

(B)           For
purposes of determining whether and the extent to which the Total Payments will
be subject to the Excise Tax, (i) no portion of the Total Payments the
receipt or enjoyment of which the Executive shall have waived at such time and
in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of
the Code shall be taken into account, (ii) no portion of the Total Payments
shall be taken into account which, in the opinion of tax counsel (“Tax Counsel”)
who is reasonably acceptable to the Executive and selected by the accounting
firm (the “Auditor”) which was, immediately prior to the Change in Control, the
Company’s independent auditor, does not constitute a “parachute payment” within
the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of
the Code) and, in calculating the Excise Tax, no portion of such Total Payments
shall be taken into account which, in the opinion of Tax Counsel, constitutes
reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) 

 

9

 

of the Code, in excess of the
Base Amount allocable to such reasonable compensation, and (iii) the value
of any non-cash benefit or any deferred payment or benefit included in the
Total Payments shall be determined by the Auditor in accordance with the
principles of Sections 280G(d)(3) and (4) of the Code.

 

(C)           At
the time that payments are made under this Agreement, the Company shall provide
the Executive with a written statement setting forth the manner in which such
payments were calculated and the basis for such calculations including, without
limitation, any opinions or other advice the Company has received from Tax
Counsel, the Auditor or other advisors or consultants (and any such opinions or
advice which are in writing shall be attached to the statement).

 

5.             Notice of
Termination. After a Change in Control and during the Term, any purported
termination of the Executive’s employment (other than by reason of death) shall
be communicated by written Notice of Termination from one party hereto to the
other party hereto in accordance with Section 12 hereof. For purposes of
this Agreement, a “Notice of Termination” shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon.

 

6.             No Mitigation.
The Company agrees that, if the Executive’s employment with the Company
terminates during the Term, the Executive is not required to seek other
employment or to attempt in any way to reduce any amounts payable to the
Executive by the Company pursuant to Section 4 hereof. Further, except as
specifically provided in Section 4.1(C) hereof, no payment or benefit
provided for in this Agreement shall be reduced by any compensation earned by
the Executive as the result of employment by another employer, by retirement
benefits or otherwise.  The Company’s
obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall be absolute and unconditional and shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company or any of its Subsidiaries may have
against the Executive or others.

 

7.             Restrictive
Covenants.

 

7.1           Noncompetition
and Nonsolicitation. During the Restricted Period (as defined below), the
Executive agrees that he or she shall not, without the Company’s prior written
consent, for any reason, directly or indirectly, either as principal, agent,
manager, employee, partner, shareholder, director, officer, consultant or
otherwise (A) become engaged or involved, in a manner that relates to or
is similar in nature to those duties performed by Executive at any time during
his or her employment with the Company, in any business (other than as a
less-than three percent (3%) equity owner of any corporation traded on any national,
international or regional stock exchange or in the over-the-counter market)
that competes with the Company or any of its Affiliates in the business of
production, transmission, distribution, or retail or wholesale marketing or
selling of electricity; resale or arranging for the purchase or for the resale,
brokering, marketing, or trading of electricity or derivatives thereof; energy
management and the provision of energy solutions; development and management of
fiber optic communications systems; development and operation of power
generation 

 

10

 

facilities, domestically and
abroad; and any other business in which the Company, including Affiliates, is
engaged at the termination of the Executive’s continuous employment with the
Company, including Affiliates; or (B) induce or attempt to induce any
customer, client, supplier, employee, agent or independent contractor of the
Company or any of its Affiliates to reduce, terminate, restrict or otherwise
alter its business relationship with the Company or its Affiliates. The
provisions of this Section 7.1 shall be limited in scope and effective
only within one or more of the following geographical areas: (i) The
States of North Carolina, South Carolina, Ohio, Kentucky, and Indiana, or (ii) any
other state in the United States where the Company including Affiliates, has at
least U.S. $25 million in capital deployed as of the termination of the
Executive’s continuous employment with the Company, including Affiliates; or (iii) any
state or country with respect to which was conducted a business of the Company,
including Affiliates, which business, or oversight of which business,
constituted any part of the Executive’s employment.  The parties intend the above geographical
areas to be completely severable and independent, and any invalidity or
unenforceability of this Agreement with respect to any one area shall not
render this Agreement unenforceable as applied to any one or more of the other
areas. Nothing in Section 7.1 shall be construed to prohibit the Executive
being retained during the Restricted Period in a capacity as an attorney
licensed to practice law, or to restrict the Executive from providing advice
and counsel in such capacity, in any jurisdiction where such prohibition or
restriction is contrary to law.

 

7.2           Restricted
Period. For purposes of this Agreement, “Restricted Period” shall mean the
period of the Executive’s employment during the Term and, in the event of a
termination of the Executive’s employment following a Change in Control that
entitles Executive to Severance Payments covered by Section 4 hereof, the
twelve (12) month period following such termination of employment, commencing
from the Date of Termination.

 

7.3           Forfeiture
and Repayments. The Executive agrees that, in the event he or she violates
the provisions of Section 7 hereof during the Restricted Period, he or she
will forfeit and not be entitled to any Severance Payments or any non-cash
benefits or rights under this Agreement (including, without limitation, stock
option rights), other than the payments provided under Section 3 hereof.
The Executive further agrees that, in the event he or she violates the
provisions of Section 7 hereof following the payment or commencement of
any Severance Payments, (A) he or she will forfeit and not be entitled to
any further Severance Payments, and (B) he or she will be obligated to
repay to the Company an amount in respect of the Severance Payments previously
made to him or her under Section 4 hereof (the “Repayment Amount”). The
Repayment Amount shall be determined by aggregating the cash Severance Payments
made to the Executive and multiplying the resulting amount by a fraction, the
numerator of which is the number of full and partial calendar months remaining
in the Severance Period at the time of the violation (rounded to the nearest
quarter of a month), and the denominator of which is twenty-four (24). The
Repayment Amount shall be paid to the Company in cash in a single sum within
ten (10) business days after the first date of the violation, whether or
not the Company has knowledge of the violation or has made a demand for
payment. Any such payment made following such date shall bear interest at a
rate equal to the 

 

11

 

prime lending rate of Citibank,
N.A. (as periodically set) plus 1%. Furthermore, in the event the Executive
violates the provisions of Section 7 hereof, and notwithstanding the terms
of any award agreement or plan document to the contrary (which shall be
considered to be amended to the extent necessary to reflect the terms hereof),
the Executive shall immediately forfeit the right to exercise any stock option
or similar rights that are outstanding at the time of the violation, and the Repayment
Amount, calculated as provided above, shall be increased by the amount of any
gains (measured, if applicable, by the difference between the aggregate fair
market value on the date of exercise of shares underlying the stock option or
similar right and the aggregate exercise price of such stock option or similar
right) realized by the Executive upon the exercise of stock options or similar
rights or vesting of restricted stock or other equity compensation within the
one-year period prior to the first date of the violation.

 

7.4           Permissive
Release. The Executive may request that the Company release him or her from
the restrictive covenants of Section 7.1 hereof upon the condition that
the Executive forfeit and repay all termination benefits and rights provided
for in Section 4.1 hereof. The Company may, in its sole discretion, grant
such a release in whole or in part or may reject such request and continue to
enforce its rights under this Section 7.

 

7.5           Consideration;
Survival. The Executive acknowledges and agrees that the compensation and
benefits provided in this Agreement constitute adequate and sufficient
consideration for the covenants made by the Executive in this Section 7
and in the remainder of this Agreement. As further consideration for the covenants
made by the Executive in this Section 7 and in the remainder of this
Agreement, the Company has provided and will provide the Executive certain
proprietary and other confidential information about the Company, including,
but not limited to, business plans and strategies, budgets and budgetary
projections, income and earnings projections and statements, cost analyses and
assessments, and/or business assessments of legal and regulatory issues. The
Executive’s obligations under this Section 7 shall survive any termination
of his or her employment as specified herein.

 

8.             Confidentiality.
The Executive acknowledges that during the Executive’s employment with the
Company or any of its Affiliates, the Executive will acquire, be exposed to and
have access to, non-public material, data and information of the Company and
its Affiliates and/or their customers or clients that is confidential,
proprietary, and/or a trade secret (“Confidential Information”). At all times,
both during and after the Term, the Executive shall keep and retain in
confidence and shall not disclose, except as required and authorized in the
course of the Executive’s employment with the Company or any its Affiliates, to
any person, firm or corporation, or use for his or her own purposes, any
Confidential Information. For purposes of this Agreement, such Confidential
Information shall include, but shall not be limited to: sales methods,
information concerning principals or customers, advertising methods, financial
affairs or methods of procurement, marketing and business plans, strategies
(including risk strategies), projections, business opportunities, inventions,
designs, drawings, research and development plans, client lists, sales and cost
information and financial results and performance. Notwithstanding the
foregoing, “Confidential Information” shall 

 

12

 

not include any information known generally to the public (other than
as a result of unauthorized disclosure by the Executive or by the Company or
its Affiliates). The Executive acknowledges that the obligations pertaining to
the confidentiality and non-disclosure of Confidential Information shall remain
in effect for a period of five (5) years after termination of employment,
or until the Company or its Affiliates has released any such information into
the public domain, in which case the Executive’s obligation hereunder shall
cease with respect only to such information so released into the public domain.
The Executive’s obligations under this Section 8 shall survive any
termination of his or her employment. If the Executive receives a subpoena or
other judicial process requiring that he or she produce, provide or testify
about Confidential Information, the Executive shall notify the Company and
cooperate fully with the Company in resisting disclosure of the Confidential
Information. The Executive acknowledges that the Company has the right either
in the name of the Executive or in its own name to oppose or move to quash any
subpoena or other legal process directed to the Executive regarding
Confidential Information. Notwithstanding any other provision of this
Agreement, the Executive remains free to report or otherwise communicate any
nuclear safety concern, any workplace safety concern, or any public safety
concern to the Nuclear Regulatory Commission, United States Department of
Labor, or any other appropriate federal or state governmental agency, and the
Executive remains free to participate in any federal or state administrative,
judicial, or legislative proceeding or investigation with respect to any claims
and matters not resolved and terminated pursuant to this Agreement. With
respect to any claims and matters resolved and terminated pursuant to this
Agreement, the Executive is free to participate in any federal or state
administrative, judicial, or legislative proceeding or investigation if
subpoenaed. The Executive shall give the Company, through its legal counsel,
notice, including a copy of the subpoena, within twenty-four (24) hours of
receipt thereof.

 

9.             Return of Company
Property. All records, files, lists, including, computer generated lists,
drawings, documents, equipment and similar items relating to the business of
the Company and its Affiliates which the Executive shall prepare or receive
from the Company or its Affiliates shall remain the sole and exclusive property
of Company and its Affiliates. Upon termination of the Executive’s employment
for any reason, the Executive shall promptly return all property of the Company
or any of its Affiliates in his or her possession. The Executive further
represents that he or she will not copy or cause to be copied, print out or
cause to be printed out any software, documents or other materials originating
with or belonging to the Company or any of its Affiliates.

 

10.           Acknowledgement
and Enforcement. The Executive acknowledges that the restrictions contained
in this Agreement with regards to the Executive’s use of Confidential
Information and his or her future business activities are fair, reasonable and
necessary to protect the Company’s legitimate protectable interests,
particularly given the competitive nature and broad scope of the Company’s
business and that of its Affiliates, as well as the Executive’s position with
the Company. The Executive further acknowledges that the Company may have no
adequate means to protect its rights under this Agreement other than by
securing an injunction (a court order prohibiting the Executive from violating
this Agreement). The Executive therefore agrees that the 

 

13

 

Company, in addition to any other right or remedy it may have, shall be
entitled to enforce this Agreement by obtaining a preliminary and permanent
injunction and any other appropriate equitable relief in any court of competent
jurisdiction. The Executive acknowledges that the recovery of damages will not
be an adequate means to redress a breach of this Agreement, but nothing in this
Section 10 shall prohibit the Company from pursuing any remedies in
addition to injunctive relief, including recovery of damages and/or any
forfeiture or repayment obligations provided for herein.

 

11.           Successors; Binding
Agreement.

 

11.1         In
addition to any obligations imposed by law upon any successor to the Company,
the Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.

 

11.2         This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If the Executive shall die while
any amount would still be payable to the Executive hereunder (other than
amounts which, by their terms, terminate upon the death of the Executive) if
the Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement
to the executors, personal representatives or administrators of the Executive’s
estate; provided, however, such amounts shall be offset by any
amounts owed by the Executive to the Company.

 

12.           Notices.
All notices or other communications hereunder shall be in writing and shall be
deemed to have been duly given (a) when delivered personally, (b) upon
confirmation of receipt when such notice or other communication is sent by
facsimile, (c) one day after timely delivery to an overnight delivery
courier, or (d) when delivered or mailed by United States registered mail,
return receipt requested, postage prepaid. The addresses for such notices shall
be as follows:

 

To the Company:

 

Duke Energy Corporation

Post Office Box 1006, EC3XB

Charlotte, North Carolina 28201-1006

Attention: Mr. James E. Rogers

Chief Executive Officer

 

With a Copy to:

 

Duke Energy Corporation

Post Office Box 1244, PB04M

Charlotte, North Carolina 28201-1244

Attention: Mr. Marc E. Manly

Group Executive and Chief Legal Officer

 

14

 

To the Executive:

 

At the most recent address on file in the records of the Company

 

Either party hereto may, by notice to the other, change its address for
receipt of notices hereunder.

 

13.           Section 409A.

 

13.1         Notwithstanding
anything contained in this Agreement to the contrary, if the Executive is a “specified
employee” on the Date of Termination, as determined under the Company’s policy
for identifying specified employees, 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 the 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 calendar days after
the first business day that is more than six months following the Date of
Termination (or, if the Executive dies during such six-month period, within 30
calendar days after the Executive’s death).

 

13.2         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, and
the Company shall not take any action that would be inconsistent with such
intent.  Without limiting the foregoing,
the payments and benefits provided under this Agreement may not be deferred,
accelerated, extended, paid out or modified in a manner that would result in
the imposition of an additional tax under Section 409A of the Code upon
Executive.

 

13.3         It
is the intention of the Company and the Executive that this Agreement not
result in unfavorable tax consequences to the Executive under Section 409A
of the Code. Accordingly, the Executive consents to any amendment of this
Agreement as the Company may reasonably make in furtherance of such intention,
and the Company shall promptly provide, or make available to, the Executive a
copy of such amendment.  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 the benefits provided under this Agreement is not warranted or
guaranteed.  Neither the Company, 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 Executive or other taxpayer as a result of the Agreement.

 

14.           Miscellaneous.
Except as otherwise provided in Section 13 hereof, no provision of this
Agreement may be modified, waived or discharged unless such waiver, 

 

15

 

modification or discharge is agreed to in writing and signed by the
Executive and the Chief Executive Officer (or such officer as may be
specifically designated by the Chief Executive Officer). No waiver by either
party hereto at any time of any breach by the other party hereto of, or of any
lack of compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. This
Agreement supersedes any other agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof which
have been made by either party; provided, however, that this
Agreement shall supersede any agreement setting forth the terms and conditions
of the Executive’s employment with the Company only in the event that the
Executive’s employment with the Company is terminated during the Term and on or
within two years following a Change in Control, by the Company other than for
Cause or by the Executive for Good Reason. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of North Carolina. All references to sections of the Exchange Act or
the Code shall be deemed also to refer to any successor provisions to such
sections. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed and no such payments
shall be treated as creditable compensation under any other employee benefit
plan, program, arrangement or agreement of or with the Company or its
affiliates. The obligations of the Company and the Executive under this
Agreement which by their nature may require either partial or total performance
after the expiration of the Term (including, without limitation, those under Section 4
hereof) shall survive such expiration.

 

15.           Certain Legal Fees.
To provide the Executive with reasonable assurance that the purposes of this
Agreement will not be frustrated by the cost of enforcement, the Company shall
reimburse the Executive for reasonable attorneys’ fees and expenses incurred by
the Executive during the two-year period immediately following the Executive’s
Date of Termination as a result of a claim that the Company has breached or
otherwise failed to perform its obligations under this Agreement or any
provision hereof, regardless of which party, if any, prevails in the contest; provided,
however, that Company shall not be responsible for such fees and
expenses to the extent incurred in connection with a claim made by the
Executive that the trier of fact in any such contest finds to be frivolous or
if the Executive is determined to have breached his or her obligations under
Sections 7, 8, 9, 16, or 17 of this Agreement; and provided further, however,
the Company shall not be responsible for such fees or expenses in excess of
$50,000 in the aggregate.  The
reimbursement, if any, shall be paid to the Executive within 10 calendar days
following the expiration of the two-year period described above, provided that
the Executive shall have submitted an invoice for such fees and expenses at
least 30 calendar days prior to the expiration of that period.  The amount of such legal fees and expenses
that the Company is obligated to pay in any given calendar year shall not
affect the legal fees and expenses that the Company is obligated to pay in any
other calendar year, and the Executive’s right to have the Company pay such
legal fees and expenses may not be liquidated or exchanged for any other
benefit.

 

16

 

16.           Cooperation. The
Executive agrees that he or she will fully cooperate in any litigation,
proceeding, investigation or inquiry in which the Company or its Affiliates may
be or become involved. The Executive also agrees to cooperate fully with any
internal investigation or inquiry conducted by or on behalf of the Company.
Such cooperation shall include the Executive making himself or herself available,
upon the request of the Company or its counsel, for depositions, court
appearances and interviews by Company’s counsel. The Company shall reimburse
the Executive for all reasonable and documented out-of-pocket expenses incurred
by him or her in connection with such cooperation. To the maximum extent
permitted by law, the Executive agrees that he or she will notify the Board if
he or she is contacted by any government agency or any other person
contemplating or maintaining any claim or legal action against the Company or
its Affiliates or by any agent or attorney of such person. Nothing contained in
this Section 16 shall preclude the Executive from providing truthful
testimony in response to a valid subpoena, court order, regulatory request or
as may be required by law.  To the extent
required to comply with Section 409A of the Code, any payment or
reimbursement of expenses pursuant to this Section 16 that will not be
excluded from the Executive’s income when received is subject to the following
requirements: (i) the expenses to be reimbursed must be incurred during
the Executive’s lifetime; (ii) the amount of expenses eligible for
reimbursement during a calendar year may not affect the expenses eligible for
reimbursement, or in-kind benefits to be provided in any other calendar year; (iii) any
reimbursement of eligible expenses shall be paid within 10 calendar days
following Executive’s written request for reimbursement, or such later date as
may be required under Section 13.1; 
provided that the Executive provides written notice no later than 15
calendar days prior to the last day of the calendar year following the calendar
year in which the expense was incurred; and (iv) the right to
reimbursement is not subject to liquidation or exchange for another benefit.

 

17.           Non-Disparagement.
The Executive agrees that he or she will not make or publish, or cause to be
made or published, any statement which is, or may reasonably be considered to
be, disparaging of the Company or its Affiliates, or directors, officers or
employees of the businesses of the Company or its Affiliates. Nothing contained
in this Section 17 shall preclude the Executive from providing truthful
testimony in response to a valid subpoena, court order, regulatory request or
as may be required by law.

 

18.           Validity;
Severability. The invalidity or unenforceability of any provision of any Section or
sub-Section of this Agreement, including, but not limited to, any
provision contained in Section 7 hereof, shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect. If any provision of this Agreement is held to be
unenforceable because of the scope, activity or duration of such provision, or
the area covered thereby, the parties hereto agree to modify such provision, or
that the court making such determination shall have the power to modify such
provision, to reduce the scope, activity, duration and/or area of such
provision, or to delete specific words or phrases therefrom, and in its reduced
or modified form, such provision shall then be enforceable and shall be
enforced to the maximum extent permitted by applicable law.

 

17

 

19.           Counterparts.
This Agreement may be executed in several counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the
same instrument.

 

20.           Settlement of
Disputes. All claims by the Executive for benefits under this Agreement
shall be directed to and determined by the Chief Executive Officer and shall be
in writing. Any denial by the Chief Executive Officer of a claim for benefits
under this Agreement shall be delivered to the Executive in writing and shall
set forth the specific provisions of this Agreement relied upon.

 

21.           Trust.  The Company shall establish a trust with an
independent trustee prior to the occurrence of a Change in Control for the
purpose of paying benefits under this Agreement and other similar agreements
maintained by the Company.  The trust
shall be a grantor trust subject to the claims of the Company’s creditors and
shall, immediately prior to a Change in Control, be funded in cash or such
other assets as the Company deems appropriate with an amount equal to 100
percent of the estimated benefits payable under this Agreement (including
without limitation the potential legal fees described in Section 15
hereof), which amount shall be determined after assuming that the Executive
incurred a termination of employment entitling him to Severance Payments
immediately following the Change in Control; provided, that, in the event that
such funding would result in the imposition of taxes or penalties under Section 409A
of the Code with respect to the Executive, then this Section 21 shall
cease to apply.

 

IN WITNESS
WHEREOF, the parties have executed this Agreement as of the date first above
written.

 

 

	
   

  	
  DUKE ENERGY CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
					

 

18

 

EXHIBIT A

 

RELEASE OF CLAIMS

 

This RELEASE OF CLAIMS (the “Release”) is executed and delivered by                           
(the “Employee”) to DUKE ENERGY CORPORATION (together with its Affiliates and
any successors thereto, the “Company”). The term “Company” in this Release also
includes any employee benefit plan established or maintained by Duke Energy
Corporation or any of its Affiliates, and any administrator, trustee, fiduciary
or service provider of any such plan).

 

In
consideration of the agreement by the Company to provide the Employee with the
rights, payments and benefits under the Change in Control Agreement between the
Employee and the Company dated                               
(the “Severance Agreement”), which the Employee acknowledges is consideration
to which he or she would not otherwise be entitled, the Employee hereby agrees
as follows:

 

Section 1.  Release and
Covenant.  The Employee, of his or
her own free will, voluntarily and unconditionally releases and forever
discharges the Company, its subsidiaries, parents, affiliates, their directors,
officers, employees, agents, stockholders, successors and assigns (both
individually and in their official capacities with the Company) (the “Company
Releasees”) from any and all past or present causes of action, suits,
agreements or other claims which the Employee, his or her dependents,
relatives, heirs, executors, administrators, successors and assigns has or may
hereafter have from the beginning of time to the date hereof against the
Company or the Company Releasees upon or by reason of any matter, cause or
thing whatsoever, including, but not limited to, any matters arising out of his
or her employment by the Company and the cessation of said employment, and
including, but not limited to, any alleged violation of the Civil Rights Acts
of 1964 and 1991, the Equal Pay Act of 1963, the Employee Retirement Income
Security Act of 1974, the Age Discrimination in Employment Act of 1967, the
Rehabilitation Act of 1973, the Older Workers Benefit Protection Act of 1990, the
Americans with Disabilities Act of 1990 and any other federal, state or local
law, regulation or ordinance, or public policy, contract or tort law having any
bearing whatsoever on the terms and conditions of employment or termination of
employment.  This Release shall not,
however, constitute a waiver of any of the Employee’s rights under the
Severance Agreement nor a waiver of any claims that might arise after the date
the Release is signed.

 

Section 2.  Due Care.  The Employee acknowledges that he or she has
received a copy of this Release prior to its execution and has been advised
hereby of his or her opportunity to review and consider this Release for 21
days prior to its execution.  The
Employee further acknowledges that he or she has been advised hereby to consult
with an attorney prior to executing this Release.  The Employee enters into this Release having
freely and knowingly elected, after due consideration, to execute this Release
and to fulfill the promises set forth herein. 
This Release shall be revocable by the Employee during the 7-day period
following its execution, and shall not become effective or enforceable until
the expiration of such 7-day period.  In
the event of such a 

 

19

 

revocation, the Employee shall
not be entitled to the consideration for this Release set forth above.

 

Section 3.  Nonassignment of Claims; Proceedings.  The Employee represents and warrants that
there has been no assignment or other transfer of any interest in any claim
which the Employee may have against the Company or any of the Company
Releasees.   The Employee represents that
he or she has not commenced or joined in any claim, charge, action or
proceeding whatsoever against the Company or any of the Company Releasees
arising out of or relating to any of the matters set forth in this Release. The
Employee further agrees that he or she will not seek or be entitled to any
personal recovery in any claim, charge, action or proceeding whatsoever against
the Company or any of the Company Releasees for any of the matters set forth in
this Release.

 

Section 4.  Reliance by
Employee.  The Employee acknowledges
that, in his or her decision to enter into this Release, he or she has not
relied on any representations, promises or agreements of any kind, including
oral statements by representatives of the Company or any of the Company
Releasees, except as set forth in this Release and the Severance Agreement.

 

Section 5.  Nonadmission.   Nothing contained in this Release will be deemed
or construed as an admission of wrongdoing or liability on the part of the
Company or any of the Company Releasees.

 

Section 6.  Communication
of Safety Concerns.  Notwithstanding
any other provision of this Release and the Severance Agreement, the Employee
remains free to report any suspected instance of illegal activity of any
nature, any nuclear safety concern, any workplace safety concern, or any public
safety concern to the United States Nuclear Regulatory Commission, the United
States Department of Labor, or any other federal or state governmental agency.
Further, nothing in this Release or the Agreement prohibits the Employee from
participating in any way in any state or federal administrative, judicial or
legislative proceeding or investigation or filing a charge of discrimination
with an administrative agency, provided, however, that should an
agency pursue any claims on the Employee’s behalf, by signing and not revoking
this Release the Employee has waived his or her right to any recovery, monetary
or otherwise.  Should the Employee
receive a subpoena in connection with any federal or state administrative,
judicial, or legislative proceeding involving the Company, the Employee shall,
if permitted by law, provide the Company with notice of the subpoena, including
a copy of the subpoena, with twenty-four (24) hours of receipt of the
subpoena.  The notice shall be provided
to the Company’s Chief Legal Officer.

 

Section 7.  Cash Balance
Litigation.  Employee may or may not
know that a class action lawsuit was commenced on February 6, 2006.  Here is the caption of that case:  Kenneth Walton George,
Dennis Reed Bowen, Clyde Freeman, George Moyers, Jim Matthews, and Henry
Miller, on their own behalf and on behalf of a class of persons similarly
situated v. Duke Energy Retirement Cash Balance Plan and Duke Energy 

 

20

 

Corporation,
Case No. 8:06-CV-00373-RBH, pending in the United States District Court
for the District of South Carolina.  This
paragraph deals with that lawsuit, and any lawsuit asserting similar claims
(the “Cash Balance Plan Litigation”). 
The Cash Balance Plan Litigation seeks additional benefits under the
Duke Energy Retirement Cash Balance Plan (the “Cash Balance Plan”), and other
relief.  The Company and the Cash Balance
Plan intend to defend themselves vigorously in the Cash Balance Plan Litigation
and take the position that no damages should result from the litigation.  Employee should consider the Cash Balance
Plan Litigation in connection with this Release, because the Company and the
Cash Balance Plan will take the position that this Release completely releases
Employee’s rights in the Cash Balance Plan Litigation.  In the event that a court in the Cash Balance
Plan Litigation should rule that despite this Release Employee is entitled
to some recovery of benefits under the terms of the Cash Balance Plan, Employee
agrees that he or she will get only the difference, if any, between what the
Employee has been paid under the Severance Agreement and what he or she would
get under that ruling.  In the event that
a court in the Cash Balance Plan Litigation should rule that despite this
Release the Company or the Cash Balance Plan must pay damages other than
benefits under the Cash Balance Plan, Employee agrees that he or she will get
only the difference, if any, between what Employee has been paid under the
Severance Agreement and what he or she would get under that ruling.  Employee is free to consult with counsel representing
the plaintiff class in the Cash Balance Plan Litigation, whose names and
addresses are attached.  Employee may, of
course, contact any other lawyer. 
Employee is encouraged to discuss this matter with the lawyer of his or
her own choosing.

 

Section 8.  Governing Law.  This
Release shall be interpreted, construed and governed according to the laws of
the State of North Carolina, without reference to conflicts of law principles
thereof.

 

Section 9.  Severability.  It is understood by Employee and the
Company that if any part of this Release of Claims is held by a court to be
invalid, the remaining portions shall not be affected.

 

This RELEASE
OF CLAIMS is executed by the Employee and delivered to the Company on                                           .

 

 

	
   

  	
  EMPLOYEE

  

 

 

[not to be signed upon execution of Change in Control Agreement]

 

21Exhibit 10.5

 

AMENDMENT TO

PHANTOM STOCK AND PERFORMANCE AWARDS

 

The Phantom Stock Agreement between Duke Energy Corporation
and James E. Rogers dated April 4, 2006, and the Performance Award
Agreement between Duke Energy Corporation and James E. Rogers dated April 4,
2006 (the “Agreements”) are amended, effective August 26, 2008, as
follows:

 

1.             A
new Section 11 is added to the Agreements as follows:

 

“Section 11.  Compliance with Section 409A.  Notwithstanding anything contained in this
Agreement to the contrary:

 

(a)           Payment of the award shall occur no later than 30 days after
the payment date or event specified in Section 5, or such later date as
provided in Section 11(c).

 

(b)           Payment of Dividend Equivalents described in Section 4
shall occur no later than the end of the calendar year in which they are paid
with respect to the Common Stock.

 

(c)           This Section 11(c) applies in the event that the
award is paid as a result of the termination of Grantee’s continuous employment
by the Company (including Subsidiaries):

 

(i)            The phrase “termination of Grantee’s continuous employment”
or words or phrases of similar import shall mean the Grantee’s “separation from
service” with the Company and its Subsidiaries within the meaning of Section 409A
of the Code.  In this regard, the Company
and the Grantee shall take all steps necessary (including with regard to any
post-termination services by the Grantee) to ensure that any termination of
employment under this Agreement constitutes a “separation from service”.

 

(ii)           If the Grantee is a “specified employee” on his separation
from service, as determined under the Company’s policy for identifying
specified employees, then to the extent required in order to comply with Section 409A
of the Code, any amount payable under this Agreement that constitutes a “deferral
of compensation” within the meaning of Section 409A of the Code and that
is payable as a result of a separation from service shall be paid 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 Grantee dies during such six-month
period, within 30 days after the Grantee’s death).

 

 

(d)           It is intended that the Agreement 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, and the Company shall not take any action that
would be inconsistent with such intent. 
The Grantee consents to any amendment of this Agreement as the Company
may reasonably make in furtherance of such intention, and the Company shall
promptly provide, or make available to, the Grantee a copy of such
amendment.  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 the
benefits provided under this Agreement is not warranted or guaranteed.  Neither the Company, 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
Grantee or other taxpayer as a result of the Agreement.”

 

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

 

IN WITNESS WHEREOF, the parties hereto have executed this
amendment to the Agreements 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

  
				

 

2

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