Document:

Exhibit
10.3

ALLOS THERAPEUTICS, INC.

CONSULTANT AGREEMENT FOR

MARVIN JAFFE

 

THIS CONSULTANT AGREEMENT (“Agreement”) is entered into by and between Marvin Jaffe, an
individual (“Consultant”), and Allos
Therapeutics, Inc., a Delaware corporation (the “Company”),
effective as of May 10, 2006 (“Effective Date”).

 

WHEREAS, the Company is a
biopharmaceutical company currently focused on developing and commercializing
three innovative drugs for the treatment of cancer: EFAPROXYNTM (efaproxiral),
PDX (pralatrexate) and RH1 (collectively, the “Products”);

 

WHEREAS, Consultant, having been
involved with the Company since 1994 and serving as a member of the Board of
Directors, is a significant source of knowledge and expertise about the Company’s
business and its potential clinical development and commercialization
strategies for the Products;

 

WHEREAS, the parties have agreed
that Consultant shall be retained as a Consultant commencing as of the date
that Consultant ceases to serve as a member of the Company’s Board of Directors
until December 31, 2007 to allow the Company to retain the benefit of
Consultant’s knowledge and expertise; and

 

WHEREAS, Consultant has tendered
his resignation as a director effective immediately prior to the Company’s 2006
annual meeting of stockholders to be held on May 10, 2006 and the parties
hereby desire to mutually agree upon the terms and conditions of Consultant’s
consulting relationship with the Company.

 

NOW, THEREFORE, in consideration
of the mutual promises and covenants contained herein, it is agreed by and
between the parties as follows:

 

1.                                      CONSULTING
RELATIONSHIP.

 

1.1                               Consulting Services.  As part of the services provided by
Consultant to the Company pursuant to this Agreement, Consultant will:

 

(a)                                  Advise and consult with the Company on
clinical development and regulatory strategies related to the Products; and

 

(b)                                  Advise and consult with the Company on
strategic planning;

 

(c)                                  Perform such other services which relate
to Consultant’s areas of expertise and which the Company’s executive officers
believe would be beneficial to the Company (collectively, the “Consulting Services”).

 

1

 

1.2                               Performance.  As and when requested from time to time by the Company’s
President and Chief Executive Officer, Paul L. Berns or his delegates,
Consultant agrees to provide services to the Company under this Agreement. The
time commitment required for consulting services under this Agreement will
generally not exceed 10 hours per month, although the time commitment required
during any specific monthly period may vary from the time commitment required
in other periods. Consultant will render the Consulting Services to the best of
his ability. The manner and means by which Consultant chooses to perform the
Consulting Services are in Consultant’s sole discretion and control. Consultant
agrees to exercise the highest degree of professionalism, and to utilize his
best efforts, skills, expertise and creative talents in performing such
Consulting Services. In performing Consulting Services, Consultant agrees to
provide his own equipment, tools and other materials. Consultant shall perform
his Consulting Services in a timely and professional manner consistent with
industry standards. Consultant agrees to provide the Consulting Services at the
times reasonably requested by the Company; provided
that, the Company will reasonably cooperate with Consultant in the
event that he has conflicts in connection with other obligations, whether such
obligations are work related or personal. Consultant may not subcontract or
otherwise delegate his obligations under this Agreement without the Company’s
prior written consent.

 

2.                                      COMPENSATION.

 

2.1                               Options.  In consideration of his agreement to provide the
Consulting Services hereunder, and subject to the approval of the Compensation
Committee of the Board of Directors, Executive will receive a non qualified
option to purchase 20,000 shares of the Company’s Common Stock under the
Company’s 2000 Stock Incentive Compensation Plan (the “2000 Plan”) at an exercise price equal to
the closing sale price of the Company’s Common Stock as reported on the NASDAQ
National Market on the date such options are approved by the Compensation
Committee of the Board of Directors. Such options will be subject to the terms
and conditions of the 2000 Plan, and will vest in eighteen (18) equal monthly
installments commencing July 1, 2006. Consultant
shall not be entitled to any additional compensation or benefits in connection
with the performance of such Consulting Services.

 

2.2                               Expenses.  Consultant shall receive, against presentation of
proper receipts and vouchers, reimbursement for direct and reasonable
out-of-pocket expenses incurred by him in connection with the performance of
services hereunder, according to the policies of the Company.

 

3.                                      INDEPENDENT
CONTRACTOR STATUS.

 

Consultant’s
relationship with the Company will be that of an independent contractor and
nothing in this Agreement should be construed to create a partnership, joint
venture, or employer-employee relationship. Consultant is not the agent of the
Company and is not authorized to make any representation, contract, or
commitment on behalf of the Company. Consultant will not be entitled to any of
the benefits which the Company may make available to its employees. Because
Consultant is an independent contractor, the Company will not withhold or make
payments for income taxes; social security; make unemployment insurance or
disability insurance contributions; or obtain workers’ compensation insurance
on Consultant’s behalf. Consultant agrees to accept exclusive liability for
complying with applicable state and federal

 

2

 

laws governing
self-employed individuals, including obligations such as payment of taxes,
social security, disability and other contributions based on compensation paid
to Consultant. Consultant hereby agrees to indemnify and defend the Company
against any and all claims for such taxes or contributions, including penalties
and interest.

 

4.                                      PROPRIETARY
INFORMATION OBLIGATIONS.

 

4.1                               Proprietary Information.  Consultant agrees during the Consulting Period and
thereafter that he will take all steps reasonably necessary to hold the Company’s
Proprietary Information in trust and confidence, will not use Proprietary
Information in any manner or for any purpose not expressly set forth in this
Agreement, and will not disclose any such Proprietary Information to any third
party without first obtaining the Company’s express written consent on a
case-by-case basis. By way of illustration, but not limitation, “Proprietary Information” includes (a) the Company’s
technology, including, but not limited to, discoveries, inventions, research
and development efforts, data, software, trade secrets, processes, samples,
media, gene sequences and/or cell lines (and procedures and formulations for
producing any such samples, media, gene sequences and/or cell lines), mask
works, chemical compounds, biological materials, vectors, viruses, assays,
plasmids, formulas, methods, product and know-how and show-how; and all
derivatives, improvements, additions, modifications, and enhancements to any of
the foregoing, including any such information or material created or developed
by Consultant under this Agreement (hereinafter collectively referred to as “Developments”); and (b) information regarding plans for
research, development, new products, marketing and selling, merchandising,
business plans, budgets and unpublished financial statements, licenses, prices
and costs, suppliers and customers; and (c) information regarding the
skills and compensation of employees and contractors of the Company. Notwithstanding
the other provisions of this Agreement, nothing received by Consultant will be
considered to be Company Proprietary Information if (i) it has been
published or is otherwise readily available to the public other than by a
breach of this Agreement; (ii) it has been rightfully received by
Consultant from a third party without confidential limitations; (iii) it
has been independently developed for Consultant by personnel or agents having
no access to Company Proprietary Information; or (iv) it was known to
Consultant prior to its first receipt from the Company.

 

4.2                               Third Party Information.  Consultant understands that the Company
has received and will in the future receive from third parties confidential or
proprietary information (“Third Party Information”)
subject to a duty on the Company’s part to maintain the confidentiality of such
information and use it only for certain limited purposes. Consultant agrees to
hold Third Party Information in confidence and not to disclose to anyone (other
than the Company personnel who need to know such information in connection with
their work for the Company) or to use, except in connection with Consultant’s
work for the Company, Third Party Information unless expressly authorized in
writing by an officer of the Company.

 

4.3                               No Conflict of Interest.  Consultant agrees during the term of this Agreement
not to accept work or enter into a contract or accept an obligation
inconsistent or incompatible with Consultant’s obligations under this Agreement
or the scope of services rendered for the Company. Consultant warrants that to
the best of his knowledge, there is no other existing contract or duty on
Consultant’s part inconsistent with this Agreement, unless a copy of such
contract or a description of such duty is attached to this Agreement as Exhibit A. Consultant

 

3

 

further agrees not to
disclose to the Company, or bring onto the Company’s premises, or induce the
Company to use any confidential information that belongs to anyone other than
the Company or Consultant.

 

4.4                               Disclosure of Work Product.  As used in this Agreement, the term “Work Product” means any development, whether or not
patentable, and all related know-how, designs, trademarks, formulae, processes,
manufacturing techniques, trade secrets, ideas, artwork or other copyrightable
or patentable works. Consultant agrees to disclose promptly in writing to the
Company, or any person designated by the Company, all Work Product which is
solely or jointly conceived, made, reduced to practice, or learned by
Consultant in the course of any work performed for the Company (“Company Work Product”). Consultant represents that any Work
Product relating to Products or to the Company’s business which Consultant has
made, conceived or reduced to practice as of the Effective Date has been
disclosed in writing to the Company and attached to this Agreement as Exhibit B. If disclosure of any such Prior Work Product
would cause Consultant to violate any prior confidentiality agreement,
Consultant understands that he is not to list such Prior Work Product in Exhibit B but he will disclose a cursory name for
each such invention, a listing of the party(ies) to whom it belongs, and the
fact that full disclosure as to such Prior Work Product has not been made for
that reason. A space is provided in Exhibit B
for such purpose.

 

4.5                               Ownership of Work Product.  Consultant agrees that any and all developments
conceived, written, created or first reduced to practice in the performance of
Consulting Services shall be the sole and exclusive property of the Company.

 

4.6                               Assignment of the Company Work
Product.  Consultant irrevocably assigns to the Company all
right, title and interest worldwide in and to Company Work Product and all
applicable intellectual property rights related to Company Work Product,
including without limitation, copyrights, trademarks, trade secrets, patents,
moral rights, contract and licensing rights (the “Proprietary
Rights”). Except as set forth below, Consultant retains no rights to
use Company Work Product and agrees not to challenge the validity of the
Company’s ownership in Company Work Product. Consultant hereby grants to the
Company a non-exclusive, royalty-free, irrevocable and world-wide right, with
rights to sublicense through multiple tiers of sublicensees, to distribute,
reproduce, make derivative works of, publicly perform, and publicly display in
any form or medium, whether now known or later developed, make, have made, use,
sell, import and offer for sale any Prior Work Product incorporated or used in
Company Work Product for the purpose of developing and marketing Company
products, but not for the purpose of marketing Prior Work Products separate
from Company products.

 

4.7                               Waiver or Assignment of Other
Rights.  If Consultant has any rights to Company Work Product
that cannot be assigned to the Company, Consultant unconditionally and
irrevocably waives the enforcement of such rights, and all claims and causes of
action of any kind against the Company with respect to such rights, and agrees,
at the Company’s request and expense, to consent to and join in any action to
enforce such rights. If Consultant has any right to Company Work Product that
cannot be assigned to the Company or waived by Consultant, Consultant
unconditionally and irrevocably grants to the Company during the term of such rights,
an exclusive, irrevocable, perpetual, worldwide, fully paid and royalty-free
license, with rights to sublicense through multiple levels of sublicensees, to
reproduce, create derivative works

 

4

 

of, distribute, publicly
perform and publicly display by all means now known or later developed, such
rights.

 

4.8                               Assistance.  Consultant agrees to cooperate with the Company or its
designee(s), both during and after the term of this Agreement, in the procurement
and maintenance of the Company’s rights in Company Work Product and to execute,
when requested, any other documents deemed necessary by the Company to carry
out the purpose of this Agreement. Consultant agrees to execute upon the
Company’s request a signed transfer of copyright to the Company in the form
attached to this Agreement as Exhibit C
for all Company Work Product subject to copyright protection, including,
without limitation, notes, sketches, drawings and reports.

 

4.9                               Enforcement of Proprietary Rights.
 Consultant will assist the Company in every proper way
to obtain, and from time to time enforce, United States and foreign Proprietary
Rights relating to Company Work Product in any and all countries. To that end
Consultant will execute, verify and deliver such documents and perform such
other acts (including appearances as a witness) as the Company may reasonably
request for use in applying for, obtaining, perfecting, evidencing, sustaining
and enforcing such Proprietary Rights and the assignment thereof. In addition,
Consultant will execute, verify and deliver assignments of such Proprietary
Rights to the Company or its designee. Consultant’s obligation to assist the
Company with respect to Proprietary Rights relating to such Company Work Product
in any and all countries shall continue beyond the termination of this
Agreement, but the Company shall compensate Consultant at a reasonable
rate after such termination for the time actually spent by Consultant at the
Company’s request on such assistance.

 

4.10                        Execution of Documents.  In the event the Company is unable for any reason,
after reasonable effort, to secure Consultant’s signature on any document
needed in connection with the actions specified in the preceding Sections 4.8
and 4.9, Consultant hereby irrevocably designates and appoints the Company and
its duly authorized officers and agents as his agent and attorney in fact,
which appointment is coupled with an interest, to act for and in his behalf to
execute, verify and file any such documents and to do all other lawfully
permitted acts to further the purposes of the preceding paragraph with the same
legal force and effect as if executed by Consultant. Consultant hereby waives
and quitclaims to the Company any and all claims, of any nature whatsoever,
which Consultant now or may hereafter have for infringement of any Proprietary
Rights assigned hereunder to the Company.

 

5.                                      OTHER
ACTIVITIES.

 

5.1                               Other Services.  Consultant is free to enter any contract to provide
services to other business entities, except any contract which would tend to
induce Consultant to violate this Agreement. Further, during the term of this
Agreement, Consultant will not, without the prior written consent of the
Company, perform any services related to the development, preparation,
manufacture, marketing or sale of any drugs or therapeutics that may reasonably
be considered to compete with any Products, whether on behalf of his own
interest or that of any other person or entity.

 

5

 

5.2                               Noncompetition.  During and for a period of one (1) year immediately
following termination of this Agreement, Consultant will not, directly or
indirectly, without the prior written consent of the Company:  own, manage, operate, join, control, finance
or participate in the ownership, management, operation, control or financing
of, or be connected as an officer, director, employee, consultant, partner,
principal, agent, representative, licensor, licensee or otherwise with, any
business or enterprise engaged in any business which is competitive or is
preparing to be competitive with the business of the Company (“Competitive Activity”). As used herein, Competitive Activity
will mean the development, manufacture, marketing, or sale of any drugs or therapeutics
that may reasonably be considered to compete with any Products. Notwithstanding
the above, Consultant will not be deemed to be engaged directly or indirectly
in any Competitive Activity if Consultant participates in any such business
solely as a passive investor in up to one percent (1%) of the equity securities
of a company or partnership, the securities of which are publicly traded. During
and for a period of one (1) year immediately following termination of this
Agreement, Consultant agrees not to acquire, assume or participate in, directly
or indirectly, any position, investment or interest known by him to be adverse
or antagonistic to the Company, its business or prospects, financial or
otherwise.

 

5.3                               Noninterference with Business.  During and for a period of one (1) year immediately
following termination of this Agreement, Consultant agrees not to directly or
indirectly solicit or induce any Company employee or independent contractor of
the Company to terminate or breach an employment, contractual or other
relationship with the Company.

 

6.                                      TERM;
TERMINATION.

 

6.1                               Term.  Unless sooner terminated in accordance with this
Section 6, the term of this Agreement shall commence on the Effective Date and
shall terminate on December 31, 2007. Notwithstanding the foregoing, this
Agreement shall automatically terminate immediately upon (i) Just Cause (as
defined below) or (ii) consummation of a Change in Control.

 

6.2                               Termination for Just Cause.  The Company may terminate this Agreement immediately
in its sole discretion for Just Cause. In the event the Company terminates this
Agreement pursuant to this Section 6.2, the unexercised portion of Dr. Jaffe’s
then outstanding stock options, including all vested and unvested shares, shall
be immediately forfeited and shall no longer be exercisable. The Company shall
reimburse Consultant for any business expenses that were incurred but not
reimbursed as of the date of termination. As used in this Agreement, “Just Cause” shall mean the occurrence of one or more of the
following: (i) Consultant’s conviction of a felony or a crime involving moral
turpitude or dishonesty; (ii) Consultant’s participation in a fraud or act of
dishonesty against the Company; (iii) Consultant’s intentional and material
damage to the Company’s property; (iv) Consultant’s material breach of any
provision of this Agreement that is not remedied by Consultant within fourteen
(14) days of written notice of such breach from the Board of Directors, or (v)
Consultant’s failure to perform the Consulting Services in accordance with
Section 1.2 hereof at the times reasonably requested by the Company.

 

6.3                               Termination by Consultant.  Consultant
may terminate this Agreement at his convenience upon ten (10) days prior
written notice to the Company. In the event the Consultant terminates this
Agreement pursuant to this Section 6.3, (i) the vesting of any unvested options
to

 

6

 

purchase the Company’s
common stock granted to Consultant shall cease on the date of termination, and
(ii) the period during which Consultant’s then outstanding vested options may
be exercised shall expire on the earlier of (A) one year after the date of
termination; or (B) March 30, 2008. In addition, the Company shall reimburse
Consultant for any business expenses that were incurred but not reimbursed as
of the date of termination.

 

6.4                               Termination by the Company
without Just Cause.  In the event that the Company terminates
this Agreement without Just Cause, then, notwithstanding anything contained in
Consultant’s stock option agreements to the contrary, (i) Consultant’s then
outstanding stock options shall be accelerated in full and such options shall
become fully vested and exercisable, and (ii) the period during which
Consultant’s then outstanding options may be exercised shall be extended until
the earlier of (A) March 30, 2008; or (B) the last date to which such
exercisability may be extended without causing such options to be subject to
Section 409A(a)(1) of the Internal Revenue Code of 1986, as amended (the “Code”);
provided, that, in no event shall
such options be exercisable after the expiration date of such options as set
forth in the grant notice and/or agreement evidencing such options. In
addition, the Company shall reimburse Consultant for any business expenses that
were incurred but not reimbursed as of the date of termination.

 

6.5                               Change in Control.  In the event that the Company consummates a Change in
Control (as defined herein) within twelve (12) months of the Effective Date of
this Agreement, then, notwithstanding anything contained in Consultant’s stock
option agreements to the contrary, (i) the vesting of Consultant’s then
outstanding stock options shall be accelerated in full and such options shall
become fully vested and exercisable in accordance with the 2000 Plan, and (ii)
in the event the surviving corporation or acquiring corporation assumes
Consultant’s stock options in accordance with the terms of the 2000 Plan in
connection with such Change in Control, the period during which Consultant’s
then outstanding options may be exercised shall be extended to the earlier of:
(A) twelve (12) months after the date of termination of this Agreement; or (B)
the last date to which such exercisability may be extended without causing such
options to be subject to Section 409A(a)(1) of the Code; provided, that, in no event shall such
options be exercisable after the expiration date of such options as set forth
in the grant notice and/or agreement evidencing such options. As used in this
Agreement, a “Change in Control” is defined as;
(a) a sale, lease, exchange or other
transfer in one transaction or a series of related transactions of all or
substantially all of the assets of the Company (other than the transfer of the
Company’s assets to a majority-owned subsidiary corporation); (b) a merger or
consolidation in which the Company is not the surviving corporation (other than
a merger or consolidation in which shareholders immediately before the merger
or consolidation have, immediately after the merger or consolidation, greater
stock voting power); (c) a reverse merger in which the Company is the surviving
corporation but the shares of the Company’s common stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash or otherwise (other
than a reverse merger in which shareholders immediately before the merger have,
immediately after the merger, greater stock voting power); or (d) any
transaction or series of related transactions in which in excess of 50% of the
Company’s voting power is transferred.

 

7

 

6.6                               Termination of Company’s
Obligations.  Notwithstanding any provisions in this
Agreement to the contrary, the Company’s obligations, and Consultant’s rights
pursuant to Sections 6.4 and 6.5 herein, regarding acceleration of vesting and
extension of the exercise periods for Consultant’s stock options shall cease
and be rendered a nullity immediately should Consultant breach any term or
provision of Section 4 or Section 5 of this Agreement.

 

6.7                               Return of Company Property.  Upon termination of the Agreement or earlier as
requested by the Company, Consultant will deliver to the Company any and all
drawings, notes, photographs, memoranda, specifications, samples, formulas, and
documents, together with all copies thereof, and any other material containing
or disclosing any Company Work Product or Proprietary Information of the
Company. Consultant further agrees that any property situated on the Company’s
premises and owned by the Company, including work and storage areas or filing
cabinets, is subject to inspection by Company personnel at any time with or
without notice.

 

7.                                      GENERAL
PROVISIONS.

 

7.1                               Notices.  Any notices provided hereunder must be in writing and
will be deemed effective upon the earlier of personal delivery (including
personal delivery by facsimile), the third day after mailing by first class
mail, or the day following delivery by overnight courier, to the Company at its
primary office location and to Consultant at his address and facsimile number
as provided by Consultant to the Company in writing.

 

7.2                               Severability.  Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction to the extent possible in
conformance with the intent of the parties expressed herein.

 

7.3                               Remedies.  Consultant’s duties regarding the Company’s
Proprietary Information will survive termination of his consulting relationship
with the Company and of this Agreement. Consultant acknowledges that a remedy
at law for any breach or threatened breach by his of the provisions of
Section 4 or Section 5 would be inadequate, and he therefore agrees
that the Company will be entitled to injunctive relief in case of any such
breach or threatened breach.

 

7.4                               Waiver.  If either party should waive any breach of any provisions
of this Agreement, he or it will not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision of this
Agreement.

 

7.5                               Complete Agreement.  This Agreement, including Exhibits A,
B, and C, constitute the complete, final, and exclusive embodiment
of the entire agreement between Consultant and the Company with regard to the
subject matter contained herein. It is entered into without reliance on any
promise or representation, and it cannot be modified or amended except in a
writing signed by an officer of the Company and Consultant. Each party has
carefully read this Agreement, has been afforded the opportunity to be advised
of its meaning

 

8

 

and consequences by his
or its respective attorneys, and signed the same of his or its own free will.

 

7.6                               Counterparts.  This Agreement may be executed in two counterparts,
each of which need not contain signatures of more than one party, but all of
which taken together will constitute one and the same Agreement.

 

7.7                               Headings.  The headings of the sections hereof are inserted for
convenience only and will not be deemed to constitute a part hereof nor to
affect the meaning thereof.

 

7.8                               Successors and Assigns.  This Agreement is intended to bind and inure to the
benefit of and be enforceable by Consultant and the Company, and their
respective successors, assigns, heirs, executors and administrators, except
that Consultant may not assign any of his duties hereunder and he may not
assign any of his rights hereunder without the written consent of the Company,
which will not be withheld unreasonably.

 

7.9                               Attorney Fees.  If either party brings any action to enforce his or
its rights hereunder, the prevailing party in any such action will be entitled
to recover his or its reasonable attorneys fees and costs incurred in
connection with such action.

 

7.10                        Choice of Law.  All questions concerning the construction, validity
and interpretation of this Agreement will be governed by the law of the State
of Colorado.

 

[Remainder of page
intentionally left blank]

 

9

 

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

 

	
  MARVIN JAFFE,

  	
  ALLOS THERAPEUTICS, INC.

  
	
  an Individual

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  Sign:    /s/ Marvin Jaffe

  	
   

  	
  By: 

  	
      /s/ Paul L. Berns

  	
   

  
	
   

  	
   

  	
  Paul L. Berns

  
	
   

  	
   

  	
  President & Chief Executive Officer

  
	
   

  	
   

  
	
  Date:

  	
     May 10, 2006

  	
   

  	
  Date:

  	
     May 10, 2006

  	
   

  
										

 

For copyright registration purposes only, Consultant

 

must provide the following information:

 

	
  Date of Birth:

  	
   

  
	
   

  
	
  Nationality or Domicile:

  	
   

  
			

 

10

 

EXHIBIT A

 

CONFLICT OF INTEREST DISCLOSURE

 

None.

 

 

EXHIBIT B

 

PRIOR WORK PRODUCT DISCLOSURE

 

1.                                      Except
as listed in Section 2 below, the following is a complete list of all
Prior Work Product that have been made or conceived or first reduced to
practice by Consultant alone or jointly with others prior to my engagement by
the Company:

 

ý                                    No
inventions or improvements.

 

 ̈                                    See
below:

 

 

 

 

 ̈                                    Additional
sheets attached.

 

2.                                      Due
to a prior confidentiality agreement, Consultant cannot complete the disclosure
under Section 1 above with respect to inventions or improvements generally
listed below, the proprietary rights and duty of confidentiality with respect
to which Consultant owes to the following party(ies):

 

	
  Invention or Improvement

  	
   

  	
  Party(ies)

  	
   

  	
  Relationship

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3. 

  	
   

  	
   

  	
   

  	
   

  

 

 ̈                          Additional
sheets attached.

 

 

EXHIBIT C

 

ASSIGNMENT OF COPYRIGHT

 

For good and valuable consideration which has been
received, the undersigned sells, assigns and transfers to the Company, a
Delaware corporation, and its successors and assigns, the copyright in and to
the following work, which was created by the following indicated author(s):

 

Title:                                                            

 

Author(s):                                                                          

 

Copyright Office Identification No. (if any):                                

 

and all of the right, title and interest of the undersigned, vested and
contingent, therein and thereto.

 

Executed
this                            
day of                                                   ,
200       .

 

	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Printed Name:Exhibit 10.1

INDEPENDENT
DIRECTOR AWARD

PHANTOM
STOCK AWARD AGREEMENT

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

RECITALS

Under
the            as it may,
from time to time, be amended (the “Plan”), the Board of Directors of the
Corporation (the “Board”) has determined the form of this Agreement and
selected the Grantee, as an Independent Director, to receive the award
evidenced by this Agreement (the “Award”) and the Phantom Stock units and
tandem Dividend Equivalents that are subject hereto. The applicable provisions
of the Plan are incorporated in this Agreement by reference, including the
definitions of terms contained in the Plan (unless such terms are otherwise
defined herein).

AWARD

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

Section 1.     Number and Nature of Phantom Stock Units and Tandem
Dividend Equivalents. The number of Phantom Stock units and the
number of tandem Dividend Equivalents subject to this Award are each             (     ). Each Phantom Stock unit,
upon becoming vested, before its expiration, represents a right to receive
payment in the form of one (1) share of Common Stock. Each tandem Dividend
Equivalent represents a right to receive cash payments equivalent to the amount
of cash dividends declared and paid on one (1) share of Common Stock after
the Date of Grant and before the Dividend Equivalent expires. Phantom Stock
units and Dividend Equivalents are used solely as units of measurement, and are
not shares of Common Stock and the Grantee is not, and has no rights as, a
stockholder of the Corporation by virtue of this Award.

Section 2.     Vesting of Phantom Stock Units.
The specified percentage of the Phantom Stock units subject to this Award, and
not previously forfeited, shall vest, with such percentage considered satisfied
to the extent such Phantom Stock units have previously vested, as follows:

 

a.               Upon Grantee
continuously remaining an Independent Director from the Date of Grant through            .

b.              100%, upon Grantee
ceasing to continuously remain an Independent Director, provided such cessation
constitutes a “separation from service” within the meaning of Code Section 409A(a)(2)(A)(i),
(i) after Grantee has attained age sixty-two (62) and has completed at
least ten (10) years of continuous service as an Independent Director
(including, if applicable, continuous service as a member of the board of
directors of Cinergy Corp.), (ii) on or after the date of the annual
meeting of the stockholders of the Corporation coinciding with, or next
following, Grantee’s attainment of age seventy (70), (iii) by reason of
Grantee’s total and permanent disability within the meaning of Code Section 22(e)(3),
or (iv) by reason of Grantee’s death.

c.               100%, upon the
occurrence of a Change in Control, provided such occurrence would satisfy the
distribution requirements of Code Section 409A(a)(2)(A)(v).

Section 3.     Forfeiture/Expiration. Any Phantom
Stock unit subject to this Award shall be forfeited upon Grantee ceasing to
continuously remain an Independent Director from the Date of Grant, except to
the extent otherwise provided in Section 2, and, if not previously vested
and paid, or deferred, or forfeited, shall expire immediately before the tenth
anniversary of the Date of Grant. Any Dividend Equivalent subject to this Award
shall expire at the time the unit of Phantom Stock with respect to which the
Dividend Equivalent is in tandem (i) is vested and paid, or deferred, (ii) is
forfeited, or (iii) expires.

Section 4.     Dividend Equivalent Payments.
Payments with respect to any Dividend Equivalent subject to this Award shall be
paid in cash to the Grantee as soon as practicable following any time cash
dividends are declared and paid with respect to the Common Stock on or after
the Date of Grant and before the Dividend Equivalent expires (but in no event
shall such payment be made later than March 15 of the year following the
calendar year in which the dividends are paid to the holders of Common Stock). However,
should the timing of a particular payment under Section 5 to the Grantee
in shares of Common Stock in conjunction with the timing of a particular cash
dividend declared and paid on Common Stock be such that the Grantee receives
such shares without the right to receive such dividend and the Grantee would
not otherwise be entitled to payment under the expiring Dividend Equivalent
with respect to such dividend, the Grantee, nevertheless, shall be entitled to
such payment.

Section 5.     Payment of Phantom Stock Units. Payment
of Phantom Stock units subject to this Award shall be made to the Grantee as
soon as practicable following the time such units become vested in accordance
with Section 2 prior to their expiration, but in no event later than 30
days following such vesting, except to the extent deferred by Grantee. Payment
shall be in the form of one (1) share of Common Stock for each full vested
unit of Phantom Stock and any partial vested Phantom Stock unit

 

shall be valued on the basis of the corresponding part
of the Fair Market Value of a share of Common Stock on the date the respective
partial Phantom Stock unit became vested and shall be paid in cash.

Section 6.     No Right to Continue to Be an
Independent Director. Nothing in this Agreement or in the Plan shall
confer upon the Grantee the right to continue as an Independent Director or to
be nominated as a candidate for re-election as an Independent Director.

Section 7.     Nonalienation. The
Phantom Stock units and Dividend Equivalents subject to this Award are not
assignable or transferable by the Grantee. Upon any attempt to transfer,
assign, pledge, hypothecate, sell or otherwise dispose of any such Phantom
Stock unit or Dividend Equivalent, or of any right or privilege conferred
hereby, or upon the levy of any attachment or similar process upon such Phantom
Stock unit or Dividend Equivalent, or upon such right or privilege, such
Phantom Stock unit or Dividend Equivalent or right or privilege, shall
immediately become null and void.

Section 8.     Determinations. Determinations by
the Board, or its delegatee, shall be final and conclusive with respect to the
interpretation of the Plan and this Agreement.

Section 9.     Governing Law. The validity and
construction of this Agreement shall be governed by the laws of the state of
Delaware applicable to transactions taking place entirely within that state.

Section 10.   Certain Definitions. The
following shall apply notwithstanding anything in this Agreement or the Plan to
the contrary. The term “Change in Control” has the meaning given such term in Section 12.2
of the Duke Energy Corporation 1998 Long-Term Incentive Plan, as amended; provided,
however, that no Change in Control shall be deemed to occur in respect
of any transactions or events resulting from the separation of the Corporation’s
gas and electric businesses. The term “Independent Director” means a member of
the Board who is not an employee of the Corporation or any entity that is
wholly owned, directly or indirectly, by the Corporation, or any other
affiliate of the Corporation that is so designated, from time to time, by the
Board.

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

 

amendment of this Agreement as the Corporation may
reasonably make in furtherance of such intention, and the Corporation shall
promptly provide, or make available to, Grantee a copy of any such amendment.

NOTWITHSTANDING
THE FOREGOING, this Award is subject to cancellation by the Corporation in its
sole discretion unless the Grantee, by not later than         
has signed a duplicate of this Agreement, in the space provided below, and
returned the signed duplicate to the Executive Compensation and Benefits
Department - Phantom Stock (STO5F), Duke Energy Corporation, P. O. Box
1007, Charlotte, NC 28201-1007, which, if and to the extent permitted may
be accomplished by electronic means.

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

	
  ATTEST:

  	
   

  	
  DUKE ENERGY CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
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  By:

  	
   

  	
   

  
	
   

  	
  Corporate Secretary

  	
   

  	
  Its:

  	
   

  	
  Chief Executive Officer

  

 

Acceptance
of Phantom Stock Award

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

	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Grantee’s Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
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Election
to Defer

This Agreement (“Agreement”) is made and entered into
as of            by and
between Duke Energy Corporation, a Delaware corporation (the “Company”) and            
(the “Director”).

WHEREAS, the Company and the Director wish to provide for the
deferral of the payment of certain shares of the Company’s common stock (“Common
Stock”) that may be payable upon the vesting of the Phantom Stock Award
Agreement provided to the Director by the Company (the “Award”) in      
in consideration for the Director’s service as a member of the Company’s Board
of Directors (“Board”).

NOW THEREFORE, in consideration of the premises and other
good and valuable consideration, receipt of which is hereby acknowledged, the
Company and the Director hereby agree as follows:

1.   Account.   The Company shall establish a
bookkeeping account for the benefit of the Director (the “Account”). The
balance in the Account shall reflect the shares of Common Stock credited by the
Company, and adjustments thereto for dividend equivalents, in accordance with Section 2
hereof.

2.   Credit to, and Adjustment of, Account.   Effective
upon the vesting of the Director’s Award, the Company shall credit to the
Account the number of shares of Common Stock that otherwise would have been
delivered to the Director pursuant to the Award. The amount credited to the
Account, plus dividend equivalents thereon, shall be deemed to be invested at
all times in shares of Common Stock, in accordance with procedures established
from time to time by the Board or its delegate. The Board or its delegate may
make or provide for such adjustments in the number of shares of Common Stock
credited to the Account as the Board or its delegate, in its sole discretion
exercised in good faith, may determine is equitably required in order to
prevent dilution or enlargement of the Director’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 the Company, (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 transaction or event, the Board or its delegate, in its sole
discretion exercised in good faith, may provide, in substitution for the Common
Stock credited to the Account, such alternative consideration as it may
determine to be equitable in the circumstances.

3.   Payments to Director.   The Director will
be entitled to receive the shares of Common Stock then-credited to his Account
as soon as administratively practicable following the date on which the
Director ceases to be a director of the Company and its affiliates. The lump
sum payment shall be made in the form of shares of Common Stock, and cash in
lieu of any fractional share. The payment to the Director of a single lump sum
payment shall discharge all obligations of the Company to the Director under

 

this Agreement. Notwithstanding the above, the date on
which the Director ceases to be a director of the Company shall be deemed to
have not occurred for purposes of this Agreement unless such cessation
constitutes a “separation from service” within the meaning of Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), and any
regulations promulgated thereunder.

4.   Death.   If
the Director dies before the balance of his Account has been paid to him, the
balance of the Account shall be paid to the Director’s beneficiary in a single
lump sum payment as soon as administratively practicable following the date of
the Director’s death. The lump sum payment shall be made in the form of shares
of Common Stock, and cash in lieu of any fractional share. The Director’s “beneficiary”
is the person or persons, including one or more trusts, designated by the
Director to receive payment of the Account in the event of the death of the
Director on a form provided by the Company. If the Director fails to designate
a beneficiary or designates a beneficiary who fails to survive him, the
Director’s beneficiary shall be his estate.

5.   Administration.   The
Company, through the Board or its delegate, shall be responsible for the
general administration of the Agreement and for carrying out the provisions
hereof. All payments under this Agreement shall be paid by the Company out of
its general assets. No amount payable under this Agreement may be assigned,
transferred, encumbered or subject to any legal process for the payment of any
claim against the Director or his or her beneficiary. This Agreement may be
amended from time to time by a writing signed by both parties hereto which
makes specific reference to this Agreement. This Agreement and the Director’s
rights under it shall be construed and determined in accordance with the laws
of the State of Delaware. This Agreement shall be binding upon the successors
and assigns of the parties hereto.

6.   Compliance with Law.   This
Agreement shall be construed, administered and governed in a manner that is
consistent with, and that satisfies the requirements of, Section 409A of
the Code and any regulations promulgated thereunder, so that taxation to the
Director is deferred under this Agreement until distribution as provided
hereunder.

7.   Tax
Withholding.   To the extent required by law, the Company will withhold
all applicable income and other taxes from amounts otherwise payable under this
Agreement.

IN WITNESS WHEREOF, this
Agreement has been executed and delivered by the parties as of the date first
written above.

	
  DIRECTOR

  	
   

  	
  DUKE ENERGY CORPORATION

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