Document:

TEMPLATE

 

 

PERFORMANCE
SHARES AGREEMENT FOR

EMPLOYEES
UNDER THE CINERGY CORP.

1996
LONG-TERM INCENTIVE COMPENSATION PLAN

 

 

THIS PERFORMANCE SHARES AGREEMENT (the “Agreement”),
effective as of _______________ (the “Date of Grant”), is made by and between
Cinergy Corp., a Delaware corporation, and _______________ (the “Employee”), an
employee of Cinergy Corp. or one of its directly or indirectly held majority or
greater-owned subsidiaries (collectively referred to herein as the “Company”).

 

WHEREAS, Cinergy Corp. has adopted the Cinergy Corp.
1996 Long-Term Incentive Compensation Plan, as amended from time to time (the “Plan”),
pursuant to which the Employee has been granted the right, contingent upon the
attainment of certain corporate performance measures within an established time
period, to receive shares of Cinergy Corp. common stock, with par value of
$0.01 per share (“Common Stock”), on the terms set forth in this Agreement; and

 

                WHEREAS, the
parties desire to enter into this Agreement to set forth their understandings
with respect to the contingent right to receive a certain number of shares of
Common Stock as described in this Agreement, such contingent right sometimes
referred to herein as “performance shares.”

 

                NOW, THEREFORE, in
consideration of the recitals and the mutual agreements contained in this
Agreement, the parties agree as follows:

 

1.                                      Contingent Award.

 

Cinergy Corp. hereby grants to the Employee effective
as of the Date of Grant, the right, contingent upon the attainment of certain
corporate performance measures during performance cycle ____ commencing on
January 1, _____ and ending on December 31, _____ (the “Performance Cycle”), to
receive shares of Common Stock on the terms and conditions set forth in this
Agreement.  For the Performance Cycle,
the Employee’s contingent target award is __________ shares of Common Stock
(the “Target Award”).  The number of
shares of Common Stock covered by the Target Award is subject to adjustment,
including reductions in the event of a demotion or change to a lower level
position, as provided in the Plan and in such procedures or guidelines that may
from time to time be adopted by the Compensation Committee of Cinergy Corp.’s
Board of Directors (the “Committee”), including the Administrative Guidelines adopted
on _______________ (the “Administrative Guidelines”).

 

1

 

2.                                      Corporate Performance
Measure.

 

The corporate performance measure is based on a
comparison of the total shareholder return (“TSR”) of a share of Common Stock
to the TSR of the companies listed in the S&P Supercomposite Electric Index
as of the beginning of the Performance Cycle (the “Comparator Group”); for
purposes of this Agreement, TSRs shall be as calculated by reference to Bloomberg
Financial L.P. (including the reinvestment of dividends or other
distributions); provided, however, that the TSR of the
Comparator Group shall be calculated without taking into account any company
that, during the Performance Cycle, either (i) becomes the subject of a voluntary or involuntary
petition in bankruptcy pursuant to Title 11 of the United States Code, (ii) undergoes a
“change in control,” or (iii) becomes the subject of any public announcement of a proposal for
such company to undergo a “change in control.” 
For this purpose, a “change in control” means (i) the sale of all or substantially all
of the assets of the company on a consolidated basis to a person or entity
other than to a subsidiary or affiliate of the company, (ii) a merger,
reorganization or consolidation after which the holders of the company’s
outstanding voting power immediately prior to such transaction, in the
aggregate, do not own a majority of the outstanding voting power of the
surviving or resulting entity immediately upon completion of such transaction,
(iii) the sale of all or substantially all of the outstanding common shares of
the company to an unrelated person or entity or (iv) any other transaction
where the owners of the company’s outstanding voting power prior to such transaction,
in the aggregate, do not own at least a majority of the outstanding voting
power of the relevant entity after the transaction.

 

3.                                      Payout Calculation and
Form of Payment.

 

The number of shares of Common Stock earned for the
Performance Cycle will be determined by comparing the TSR of a share of Common
Stock during the Performance Cycle to the TSR of the Comparator Group during
the Performance Cycle, as described in Subsection 3(a) and Subsection 3(b)
below.

 

(a)                                  The
percentage of the Target Award earned by the Employee, if any, will be
determined in accordance with the following chart and the guidelines contained
in Subsection 3(b).

 

	
  Percentage
  of Individual Target Payment

  
	
  Relative TSR

  Performance
  Percentile

  	
  Percentage
  of

  Target
  Award Earned

  
	
  85th or
  above

  	
  200%

  
	
  80th

  	
  185%

  
	
  70th 

  	
  150%

  
	
  60th 

  	
  115%

  
	
  55th 

  	
  100%

  
	
  40th 

  	
     40%

  
	
  30th or
  below

  	
       0%

  

 

2

 

(b)                                 The chart contained in Subsection 3(a)
shall be applied in accordance with the following guidelines.

 

(i)                                     If the relative TSR of a share of Common
Stock compared to the TSR of the Comparator Group is between any two levels
listed above, the Committee will calculate, by interpolation, the percentage of
the Target Award that is earned by the Employee.

 

(ii)                                  If the relative TSR of a share of Common
Stock is equal to or less than the 30th percentile of the TSR
of the Comparator Group, the Employee will not earn any performance shares
under this Agreement.

 

(iii)                               The maximum number of shares of Common
Stock that can be earned under this Agreement is 200% of the number of shares
of Common Stock covered by the Target Award.

 

(c)                                  Except as otherwise provided herein, the
number of shares of Common Stock earned by the Employee shall be paid to or for
the benefit of the Employee no later than April 1 of the calendar year
following the calendar year in which occurs the last day of the Performance
Cycle.  Notwithstanding the preceding
sentence, in the event of the Employee’s death during the Performance Cycle,
the number of shares of Common Stock earned by the Employee shall be paid on
behalf of the Employee as soon as administratively practicable following his or
her death but no later than _________________.

 

(d)                                 Except as otherwise provided herein, the
Employee shall be entitled to receive, no later than April 1 of the calendar
year following the calendar year in which occurs the last day of the
Performance Cycle, the number of shares of Common Stock (if any) equal to (i)
the cumulative amount of cash dividends that would have been paid to the
Executive if he or she had owned, during the entire Performance Cycle, the
number of shares of Common Stock specified in Section 3(c) above, divided by
(ii) the “Fair Market Value” (as that term is defined in the Plan) of a share
of Common Stock on the last day of the Performance Cycle.

 

(e)                                  Notwithstanding any other provision of
this Agreement, the Committee in its sole discretion may determine whether to
pay all or any portion of any award earned pursuant to this Agreement in shares
of Common Stock or in an amount of cash equal to the Fair Market Value of such
shares of Common Stock.

 

3

 

 

4.                                      Effect of Termination of
Employment due to Reasons other than Retirement, Death or Disability.

 

If, prior to the last day of the Performance Cycle,
the Employee ceases to be an employee of the Company for any reason other than
as a result of his or her termination of employment on or after attaining age
fifty (50) with five years of “Service” under the Cinergy Corp. Non-Union
Employees’ Pension Plan (“Retirement”), death or disability (as defined in
Section 7), all contingent rights set forth in this Agreement will be
immediately forfeited on the effective date of the Employee’s termination.

 

5.                                      Effect of Termination of
Employment Due to Retirement.

 

If, prior to the last day
of the Performance Cycle, the Employee’s employment with the Company is
terminated as a result of his or her Retirement, the Employee will continue to
participate in the Performance Cycle and will earn a pro rata award of
performance shares, the amount of which shall be calculated by the Committee
based on (a) the number of full and partial months (out of the total months in
the Performance Cycle) that the Employee was an active employee during the
Performance Cycle and (b) the relative TSR of a share of Common Stock during
the entire Performance Cycle compared to the TSR of the Comparator Group during
the entire Performance Cycle.

 

6.                                      Effect of Termination of
Employment Due to Death.

 

If, prior to the last day
of the Performance Cycle, the Employee dies while employed by the Company, the
Employee’s executor, administrator, legatees or estate beneficiaries will
receive a pro rata award of performance shares, the amount of which shall be
calculated by the Committee based on (a) the number of full and partial months
(out of the total months in the Performance Cycle) that the Employee was an
active employee during the Performance Cycle and (b) the relative TSR of a
share of Common Stock compared to the TSR of the Comparator Group during the
period of time commencing on the Date of Grant and ending on the December 31
nearest the date of the Employee’s death, but ending no earlier than _______________.

 

7.                                      Effect of Disability.

 

If, prior to the last day of the Performance Cycle,
the Employee becomes “disabled” as that term is defined under the then existing
long-term disability plan of the Company in which the Employee participates (or
if no such plan exists, as determined by the Committee), the Employee will
continue to participate in the Performance Cycle and will earn a pro rata award
of performance shares, the amount of which shall be calculated by the Committee
based on (a) the number of full months (out of the total months in the Performance
Cycle) that the Employee was an active employee during the Performance Cycle
and (b) the relative TSR of a share of Common Stock during the entire
Performance Cycle

 

4

 

compared to the TSR of the Comparator Group during the
entire Performance Cycle.

 

8.                                      Effect of Change in
Control.

 

(a)                                  Notwithstanding the above, if a “Change
in Control” (as defined in the Plan) of Cinergy Corp. occurs while the Employee
is employed by the Company and prior to the last day of the Performance Cycle,
the following provisions shall apply and benefits shall not be paid to or on
behalf of the Employee under any other provision of this Agreement.

 

(i)                                     The Target Award shall be deemed fully
earned at the maximum level, and shall be payable, subject to Section 3(e), in
shares of Common Stock within thirty (30) days after the occurrence of such
Change in Control.

 

(ii)                                  The Employee shall also be entitled to
receive, subject to Section 3(e), within thirty (30) days after the occurrence
of such Change in Control, the number of shares of Common Stock equal to (I)
the cumulative amount of cash dividends that would have been paid to the
Executive if he or she had owned, during the period commencing on the Date of
Grant and ending on the date of the Change in Control, the number of shares of
Common Stock specified in Section 8(a)(i) above, divided by (II) the Fair
Market Value of a share of Common Stock immediately prior to the Change in
Control.

 

(b)                                 Notwithstanding the foregoing, if a Change
in Control of Cinergy Corp. occurs after the Employee’s Retirement but prior to
the last day of the Performance Cycle, the following provisions shall apply and
benefits shall not be paid to or on behalf of the Employee under any other
provision of this Agreement.

 

(i)                                     The Employee shall be entitled to
receive, subject to Section 3(e), within thirty (30) days after the occurrence
of such Change in Control, a pro rata award of performance shares, the amount
of which shall be calculated by the Committee based on (I) the number of full
and partial months (out of a total of 36 months) that he or she was an active
employee during the Performance Cycle and (II) the fact that the Target Award
shall be deemed earned at the maximum level.

 

(ii)                                  The Employee shall also be entitled to
receive, subject to Section 3(e), within thirty (30) days after the occurrence
of such Change in Control, the number of shares of Common Stock equal to (I)
the cumulative amount of cash dividends that would have been paid to the Executive
if he or she had owned, during the period commencing on the Date of Grant and
ending on the date of the 

 

5

 

                                                Change in Control, the number of shares
of Common Stock specified in Section 8(b)(i) above, divided by (II) the Fair
Market Value of a share of Common Stock immediately prior to the Change in
Control.

 

(c)                                  Notwithstanding the foregoing, if a
Change in Control of Cinergy Corp. occurs after the Employee’s death while
employed by the Company,  but prior to
the later of (I) the December 31 nearest the date of the Employee’s death or
(II) _______________, the following provisions shall apply and benefits shall
not be paid to or on behalf of the Employee under any other provision of this
Agreement.

 

(i)                                     The Employee’s executor, administrator,
legatees or estate beneficiaries shall be entitled to receive, subject to
Section 3(e), within thirty (30) days after the occurrence of such Change in
Control, a pro rata award of performance shares, the amount of which shall be
calculated by the Committee based on (I) the number of full and partial months
(out of a total of 36 months) that he or she was an active employee during the
Performance Cycle and (II) the fact that the Target Award shall be deemed
earned at the maximum level.

 

(ii)                                  The Employee’s executor, administrator,
legatees or estate beneficiaries shall also be entitled to receive, subject to
Section 3(e), within thirty (30) days after the occurrence of such Change in
Control, the number of shares of Common Stock equal to (I) the cumulative
amount of cash dividends that would have been paid to the Executive if he or
she had owned, during the period commencing on the Date of Grant and ending on
the date of the Change in Control, the number of shares of Common Stock
specified in Section 8(c)(i) above, divided by (II) the Fair Market Value of a
share of Common Stock immediately prior to the Change in Control.

 

(d)                                 Notwithstanding the foregoing, if a
Change in Control of Cinergy Corp. occurs after the Employee becomes disabled
while employed by the Company but prior to the last day of the Performance
Cycle, the following provisions shall apply and benefits shall not be paid to
or on behalf of the Employee under any other provision of this Agreement.

 

(i)                                     The Employee shall be entitled to
receive, subject to Section 3(e), within thirty (30) days after the occurrence
of such Change in Control, a pro rata award of performance shares, the amount
of which shall be calculated by the Committee based on (I) the number of full
months (out of a total of 36 months) that he or she was an active employee
during the Performance Cycle and (II) the fact that the Target Award shall be
deemed earned at the maximum level.

 

6

 

(ii)                                  The Employee shall also be entitled to
receive, subject to Section 3(e), within thirty (30) days after the occurrence
of such Change in Control, the number of shares of Common Stock equal to (I)
the cumulative amount of cash dividends that would have been paid to the
Executive if he or she had owned, during the period commencing on the Date of
Grant and ending on the date of the Change in Control, the number of shares of
Common Stock specified in Section 8(d)(i) above, divided by (II) the Fair
Market Value of a share of Common Stock immediately prior to the Change in
Control.

 

9.                                      Transferability.

 

The contingent rights set forth in this Agreement are
not transferable otherwise than by will or the laws of descent and
distribution.

 

10.                               Effect of Assignment or Pledge.

 

If the Employee assigns or pledges contingent shares
of Common Stock covered by this Agreement or attempts to do so, or if there is
a levy, attachment, execution or other legal or equitable process upon the
contingent shares, the Company has the right to terminate this Agreement.

 

11.                               Incorporation of the Plan’s
Terms.

 

This Agreement is subject to all the terms, provisions
and conditions of the Plan, which is incorporated into this Agreement by
reference, and to such regulations as may from time to time be adopted by the
Committee, including the Administrative Guidelines.  A copy of the Plan and a set of
Administrative Guidelines have been furnished to the Employee and an additional
copy of each may be obtained from the Company. 
In the event of any conflict between the provisions of the Plan or the
Administrative Guidelines (as the case may be) and the provisions of this
Agreement, the terms, conditions and provisions of the Plan and/or
Administrative Guidelines shall control, and this Agreement shall be deemed to
be modified accordingly.  The Committee
shall have final authority to interpret and construe the Plan and this
Agreement and to make any and all determinations thereunder, and its decision
shall be binding and conclusive upon the Employee and his or her legal
representative in respect of any questions arising under the Plan, or this
Agreement.

 

12.                               No Right to Continued
Employment.

 

Nothing in this Agreement shall restrict the
right of the Company to terminate the Employee’s employment at any time with or
without cause.

 

 

7

 

13.                               Successors.

 

The terms of this Agreement shall be binding upon and
inure to the benefit of the Company, its successors and assigns, and the
Employee and the Employee’s beneficiaries, executors, administrators, heirs and
successors.

 

14.                               Invalid Provision.

 

The invalidity of unenforceability of any particular
provision of this Agreement shall not affect the other provisions of this
Agreement, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provision has been omitted.

 

15.                               Modifications.

 

No
change, modification or waiver of any provision of this Agreement shall be
valid unless the same be in writing and signed by the parties.

 

16.          Headings.

 

The headings of the Sections of this Agreement are
provided for convenience only and are not to serve as a basis for
interpretation or construction, and shall not constitute a part of this
Agreement.

 

17.          Governing
Law.

 

Except to the extent pre-empted by federal law, this
Agreement and the Employee’s rights under it shall be construed and determined
in accordance with the laws of the state of Delaware.

 

18.          Entire
Agreement.

 

This Agreement, the Plan and the Administrative
Guidelines contain the entire agreement and understanding of the parties with
respect to the subject matter contained in this Agreement, and supersede all
prior communications, representations and negotiations in respect thereto.

 

19.          Counterparts.

 

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

 

20.          Satisfaction
of Legal Requirements.

 

No
payment will be made under this Agreement until the Company has been advised by
counsel that all applicable legal requirements have been met.

 

8

 

21.          Notices
and Electronic Delivery and Signature.

 

All notices to the Company shall be addressed to
Cinergy Corp., 139 East Fourth Street, Cincinnati, Ohio 45202, Attention:
Manager, Compensation, or such other address or in accordance with such other
procedure as the Company may, from time to time, specify.  Notwithstanding the foregoing, the Employee
hereby consents and agrees to electronic delivery of any Plan documents, proxy
materials, annual reports and other related documents, including all materials
required to be distributed pursuant to applicable securities laws.  If the Company establishes procedures for an
electronic signature system for delivery and acceptance of Plan documents
(including documents relating to any programs adopted under the Plan), the
Employee hereby consents to such procedures and agrees that his or her
electronic signature is the same as, and shall have the same force and effect
as, his or her manual signature.  The
Employee consents and agrees that any such procedures and delivery may be
effected by a third party engaged by the Company to provide administrative
services related to the Plan, including any program adopted under the
Plan.  The Employee understands that,
unless earlier revoked by the Employee, this consent shall be effective for the
duration of the Agreement and that he or she shall have the right at any time to
request written copies of any and all materials referred to above.

 

 

IN WITNESS WHEREOF, this Agreement has been executed by the
parties  effective as of the _____ day of
_______________, _____.

 

 

	
  EMPLOYEE

  	
  CINERGY CORP.

  
	
   

   

  Signature:  _________________________

                    

  	
   

   

  By:  ______________________________

           

  

 

 

9TEMPLATE

 

 

PHANTOM
STOCK AGREEMENT FOR

EMPLOYEES
UNDER THE CINERGY CORP.

1996
LONG-TERM INCENTIVE COMPENSATION PLAN

 

 

THIS PHANTOM STOCK AGREEMENT (the “Agreement”),
effective as of _______________ (the “Date of Grant”), is made by and between
Cinergy Corp., a Delaware corporation, and _______________ (the “Employee”), an
employee of Cinergy Corp. or one of its directly or indirectly held majority or
greater-owned subsidiaries (collectively referred to herein as the “Company”).

 

WHEREAS, Cinergy Corp. has adopted the Cinergy Corp.
1996 Long-Term Incentive Compensation Plan, as amended from time to time (the “Plan”),
pursuant to which the Employee has been granted the right, contingent upon the
Employee satisfying certain vesting requirements, to receive a lump sum cash
payment, the amount of which shall be based on the value of a certain,
predetermined number of shares of Cinergy Corp. Common Stock, with par value of
$0.01 per share (“Common Stock”), on the terms set forth in this Agreement; and

 

                WHEREAS, the
parties desire to enter into this Agreement to set forth their understandings
with respect to the contingent right described in this Agreement, such
contingent right sometimes referred to herein as “Phantom Stock Right.”

 

                NOW, THEREFORE, in
consideration of the recitals and the mutual agreements contained in this
Agreement, the parties agree as follows:

 

1.                                      Contingent Award.

 

(a)                                  Award of Phantom Stock
Right.  In consideration of Employee’s
service for the Company, Cinergy Corp. hereby grants a Phantom Stock Right to
Employee and shall establish an account (the “Account”) in the name of Employee
on the books and records of Cinergy Corp. and credit the Account with _______
Phantom Stock Right units.  Each Phantom
Stock Right unit shall correspond to one share of Common Stock.

 

(b)                                 Vesting of Phantom Stock
Right.  Subject to earlier forfeiture as described
below, the Phantom Stock Right shall become fully vested in its entirety if the
Employee is continuously employed by the Company from  the Date of Grant until the earliest to occur
of the following dates (i) _______________, (ii) the date of the Employee’s
death, (iii) the date on which the Company terminates the Employee’s employment
other than for Cause, (iv) the date on which the Employee voluntarily terminates

 

1

 

                                                employment for
Good Reason, or (v) the date of a Change in Control as defined in the Plan.(1)

 

(c)                                  Forfeiture of Phantom
Stock Right.  The Employee
shall forfeit his or her Phantom Stock Right in its entirety if he or she ceases
to remain continuously employed by the Company until the date on which the
Phantom Stock Right vests in accordance with Section 1(b) hereof.

 

(d)                                 Definitions.  Where used herein, the term “Cause” shall
mean ____________________, and the term “Good Reason” shall mean ____________________.

 

2.                   Payout Calculation and Form of Payment.

 

Except as otherwise
provided herein, in the event that Phantom Stock Right  units become fully vested in accordance with
Section 1(b), the Employee shall be entitled to receive a lump sum cash payment
equal to the sum of (a) the product of (i) the number of Phantom Stock Right
units vesting, adjusted as provided in this Agreement, and (ii) the Fair Market
Value (as that term is defined in the Plan) of a share of Common Stock as of
the date the Phantom Stock Right units vest, plus (b) the product of (i) the
number of Phantom Stock Right units vesting and (ii) the aggregate amount of
cash dividends paid on a share of Common Stock from the Date of Grant through
the date of payment.  Such payment shall
be made as soon as administratively practicable following the date on which the
Phantom Stock Right units become vested. 
The Company shall have the right to deduct from all payments made to the
Employee pursuant to this Agreement such federal, state or local taxes as are,
in the reasonable opinion of the Company, required to be withheld by the
Company with respect to such payment.

 

3.                                      Adjustments.

 

The Compensation Committee of Cinergy Corp.’s Board of
Directors (the “Committee”) may make or provide for such adjustments in the
number of Phantom Stock Right units covered by this Agreement as the Committee,
in its sole discretion exercised in good faith, may determine is equitably
required in order to prevent dilution or enlargement of Employee’s rights that
otherwise would result from (i) any stock dividend, stock split, combination of
shares, recapitalization, or other change in the capital structure of Cinergy
Corp., (ii) any merger, consolidation, spin-off, split-off, spin-out, split-up,
reorganization, partial or complete liquidation, or other distribution of
assets or issuance of rights or warrants to purchase securities, or (iii) any
other corporate transaction or event having an effect similar to any of the
foregoing.  In the event of any such 

(1) The vesting events for phantom stock
grants vary for each participant.  Some
phantom stock grants incorporate cliff vesting schedules while others use a
graded vesting schedule.  The phantom
stock grants may incorporate some or all of the items set forth in Section
1(b).

 

 

2

 

transaction or event, the Committee, in its sole
discretion exercised in good faith, may provide, in substitution for the
Phantom Stock Right, such alternative consideration as it may determine to be
equitable in the circumstances and may require in connection therewith the
surrender of the Phantom Stock Right.

 

4.                                      Transferability.

 

The contingent rights set forth in this Agreement are
not transferable otherwise than by will or the laws of descent and
distribution.

 

5.                                      Effect of Assignment or
Pledge.

 

If the Employee assigns or pledges contingent rights
covered by this Agreement or attempts to do so, or if there is a levy,
attachment, execution or other legal or equitable process upon the contingent
rights, Cinergy Corp. shall have the right to terminate this Agreement.

 

6.                                      Incorporation of the Plan’s
Terms.

 

This Agreement is subject to all of the terms,
provisions and conditions of the Plan, which is incorporated into this
Agreement by reference, and to such regulations as may from time to time be
adopted by the Committee.  A copy of the
Plan has been furnished to the Employee and an additional copy may be obtained
from Cinergy Corp.  In the event of any
conflict between the provisions of the Plan and the provisions of this
Agreement, the terms, conditions and provisions of the Plan shall control, and
this Agreement shall be deemed to be modified accordingly.  The Committee shall have final authority to
interpret and construe the Plan and this Agreement and to make any and all
determinations thereunder, and its decision shall be binding and conclusive
upon the Employee and his or her legal representative in respect of any
questions arising under the Plan, or this Agreement.

 

7.                                      No Right to Continued
Employment.

 

Solely for purposes of
this Agreement, Employee shall be deemed to be employed by the Company during
all periods in which he or she is receiving benefits under any Cinergy-sponsored
short-term or long-term disability plan or program; provided, however, that nothing
in this Agreement shall restrict the right of the Company to terminate the
Employee’s employment at any time with or without Cause.

 

8.                                      Successors.

 

The terms of this Agreement shall be binding upon and
inure to the benefit of Cinergy Corp., its successors and assigns, and the
Employee and the Employee’s beneficiaries, executors, administrators, heirs and
successors.

 

3

 

9.                                      Invalid Provision.

 

The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions of this
Agreement, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provision has been omitted.

 

10.                               Modifications.

 

No
change, modification or waiver of any provision of this Agreement shall be
valid unless the same be in writing and signed by the parties.

 

11.          Headings.

 

The headings of the Sections of this Agreement are
provided for convenience only and are not to serve as a basis for
interpretation or construction, and shall not constitute a part of this
Agreement.

 

12.          Governing
Law.

 

Except to the extent
pre-empted by federal law, this Agreement and the Employee’s rights under it
shall be construed and determined in accordance with the laws of the state of
Delaware.

 

13.          Entire
Agreement.

 

This Agreement and the Plan contain the entire
agreement and understanding of the parties with respect to the subject matter
contained in this Agreement, and supersede all prior communications,
representations and negotiations in respect thereto.

 

14.          Counterparts.

 

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

 

15.      Satisfaction
of Legal Requirements.

 

No payment will be made under this Agreement until the
Company has been advised by counsel that all applicable legal requirements have
been met.

 

4

 

16.          Source of Payment.

 

Any payments to Employee
under this Agreement shall be paid from the Company’s general assets, and
Employee shall have the status of a general unsecured creditor with respect to
the Company’s obligations to make payments under this Agreement.  Employee acknowledges that the Company shall
have no obligation to set aside any assets to fund its obligations under this
Agreement.

 

17.          Notices
and Electronic Delivery and Signature.

 

All notices to the Company shall be addressed to
Cinergy Corp., 139 East Fourth Street, Cincinnati, Ohio 45202, Attention:
Manager, Compensation, or such other address or in accordance with such other
procedure as the Company may, from time to time, specify.  Notwithstanding the
foregoing, the Employee hereby consents and agrees to electronic delivery of
any Plan documents, proxy materials, annual reports and other related
documents, including all materials required to be distributed pursuant to
applicable securities laws.  If the
Company establishes procedures for an electronic signature system for delivery
and acceptance of Plan documents (including documents relating to any programs
adopted under the Plan), the Employee hereby consents to such procedures and
agrees that his or her electronic signature is the same as, and shall have the
same force and effect as, his or her manual signature.  The Employee consents and agrees that any
such procedures and delivery may be effected by a third party engaged by the
Company to provide administrative services related to the Plan, including any
program adopted under the Plan.  The
Employee understands that, unless earlier revoked by the Employee, this consent
shall be effective for the duration of the Agreement and that he or she shall
have the right at any time to request written copies of any and all materials
referred to above.

 

 

IN WITNESS WHEREOF, this
Agreement has been executed by the parties effective as of the date set forth
herein.

 

 

	
  EMPLOYEE

  	
  CINERGY CORP.

  
	
   

   

  Signature:  _________________________

                   
  

  	
   

   

  By:  ______________________________

           

  

 

 

 

5

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