Document:

Exhibit
10.g

 

AMENDMENT
TO EMPLOYMENT AGREEMENT

 

The Employment Agreement between Cinergy Corp., its
subsidiaries and/or its affiliates (“Cinergy”) and Michael J. Cyrus (the
“Executive”) dated as of September 12, 2002 (the “Agreement”) is hereby amended
effective as of December 17, 2003.

 

AMENDMENTS

 

1.                                       Section 3b(ii) of the Agreement is hereby amended by adding
the following new subsection (4) at the end thereof:

 

“(4)  Special Payment Election Without a Change in Control.  Notwithstanding the foregoing, the Executive
may make an election, on a form provided by Cinergy, to receive a single lump
sum cash payment in an amount equal to one-half of the Actuarial Equivalent (as
defined above in Section 3b(ii)(3)(D)) of his supplemental retirement benefit
payable no later than 30 days after the date of his termination of
employment.  In order to be effective,
the special payment election under this Section 3b(ii)(4) must be made either
(A) at least one year prior to the termination of the Executive’s employment with
Cinergy or (B) during 2003 and at least six months prior to the termination of
the Executive’s employment with Cinergy. 
The lump sum amount payable pursuant to this Section 3b(ii)(4) shall be
calculated in accordance with the provisions of Section 3b(ii)(3)(D).  In the event an amount is paid to or on
behalf of the Executive pursuant to this Section 3b(ii)(4), such payment shall
discharge any liability under this Agreement to or on behalf of the Executive
with respect to one-half of the Actuarial Equivalent (as defined above in
Section 3b(ii)(3)(D)) of his supplemental retirement benefit.”

 

IN WITNESS WHEREOF, the Executive and Cinergy have caused
this Amendment to the Agreement to be executed as of the date first specified
above.

 

	
   

  	
   

  	
  CINERGY
  SERVICES, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/  James E.
  Rogers

  	
   

  
	
   

  	
   

  	
   

  	
  James E. Rogers

  Chairman and

  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/  Michael J. Cyrus

  	
   

  
	
   

  	
   

  	
  Michael
  J. Cyrus

  	
   

  
							

 

1Exhibit
10.i

 

AMENDMENT
TO EMPLOYMENT AGREEMENT

 

The Employment Agreement between Cinergy Corp., its
subsidiaries and/or its affiliates (“Cinergy”) and James L. Turner (the
“Executive”) dated as of September 24, 2002 (the “Agreement”) is hereby amended
effective as of December 17, 2003.

 

AMENDMENTS

 

1.             Section 3b(ii) of the Agreement is
hereby amended by adding the following new subsection (4) at the end thereof:

 

“(4)  Special Payment Election Without a Change in Control.  Notwithstanding the foregoing, the Executive
may make an election, on a form provided by Cinergy, to receive a single lump
sum cash payment in an amount equal to one-half of the Actuarial Equivalent (as
defined above in Section 3b(ii)(3)(D)) of his supplemental retirement benefit
payable no later than 30 days after the date of his termination of
employment.  In order to be effective,
the special payment election under this Section 3b(ii)(4) must be made either
(A) at least one year prior to the termination of the Executive’s employment
with Cinergy or (B) during 2003 and at least six months prior to the
termination of the Executive’s employment with Cinergy.  The lump sum amount payable pursuant to this
Section 3b(ii)(4) shall be calculated in accordance with the provisions of
Section 3b(ii)(3)(D).  In the event an
amount is paid to or on behalf of the Executive pursuant to this Section
3b(ii)(4), such payment shall discharge any liability under this Agreement to
or on behalf of the Executive with respect to one-half of the Actuarial Equivalent
(as defined above in Section 3b(ii)(3)(D)) of his supplemental retirement
benefit.”

 

IN WITNESS WHEREOF, the Executive and Cinergy have
caused this Amendment to the Agreement to be executed as of the date first
specified above.

 

	
   

  	
   

  	
  CINERGY
  SERVICES, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/  James E.
  Rogers

  	
   

  
	
   

  	
   

  	
   

  	
  James E. Rogers

  Chairman and

  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/  James L. Turner

  	
   

  
	
   

  	
   

  	
  James L.
  Turner

  	
   

  
							

 

1Exhibit
10.k

 

AMENDMENT
TO EMPLOYMENT AGREEMENT

 

The Employment Agreement between Cinergy Corp., its
subsidiaries and/or its affiliates (“Cinergy”) and R. Foster Duncan (the
“Executive”) dated as of January 1, 2002 (the “Agreement”) is hereby amended
effective as of December 17, 2003.

 

AMENDMENTS

 

1.                                       Section 3b(ii) of the Agreement is hereby amended by adding
the following new subsection (4) at the end thereof:

 

“(4)  Special Payment Election Without a Change in Control.  Notwithstanding the foregoing, the Executive
may make an election, on a form provided by Cinergy, to receive a single lump
sum cash payment in an amount equal to one-half of the Actuarial Equivalent (as
defined above in Section 3b(ii)(3)(D)) of his supplemental retirement benefit
payable no later than 30 days after the date of his termination of
employment.  In order to be effective,
the special payment election under this Section 3b(ii)(4) must be made either
(A) at least one year prior to the termination of the Executive’s employment
with Cinergy or (B) during 2003 and at least six months prior to the
termination of the Executive’s employment with Cinergy.  The lump sum amount payable pursuant to this
Section 3b(ii)(4) shall be calculated in accordance with the provisions of
Section 3b(ii)(3)(D).  In the event an
amount is paid to or on behalf of the Executive pursuant to this Section
3b(ii)(4), such payment shall discharge any liability under this Agreement to
or on behalf of the Executive with respect to one-half of the Actuarial
Equivalent (as defined above in Section 3b(ii)(3)(D)) of his supplemental
retirement benefit.”

 

IN WITNESS WHEREOF, the Executive and Cinergy have caused
this Amendment to the Agreement to be executed as of the date first specified
above.

 

	
   

  	
   

  	
  CINERGY
  SERVICES, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/  James E.
  Rogers

  	
   

  
	
   

  	
   

  	
   

  	
  James E. Rogers

  Chairman and

  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/  R. Foster Duncan

  	
   

  
	
   

  	
   

  	
  R. Foster
  Duncan

  	
   

  
							

 

1Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT is made
and entered into as of the 15th day of November, 2002 (the “Effective Date”),
by and between Cinergy and Marc E. Manly (the “Executive”).  This Agreement replaces and supersedes any
and all prior employment agreements between Cinergy and the Executive.  The capitalized words and terms used
throughout this Agreement are defined in Section 11.

Recitals

 

A.            The
Executive is currently serving as Executive Vice President and Chief Legal
Officer of the Company, and Cinergy desires to secure the continued employment
of the Executive in accordance with this Agreement.

 

B.            The
Executive is willing to continue to remain in the employ of Cinergy on the
terms and conditions set forth in this Agreement.

 

C.            The
parties intend that this Agreement will replace and supersede any and all prior
employment agreements between Cinergy (or any component company or business
unit of Cinergy) and the Executive.

 

Agreement

 

In consideration of the mutual promises, covenants and
agreements set forth below, the parties agree as follows:

 

1.             Employment and
Term.

 

a.             Cinergy agrees to employ the Executive,
and the Executive agrees to remain in the employ of Cinergy, in accordance with
the terms and provisions of this Agreement, for the Employment Period set forth
in Section 1b.  The parties agree
that the Company will be responsible for carrying out all of the promises,
covenants, and agreements of Cinergy set forth in this Agreement.

 

b.             The Employment Period of this Agreement
will commence as of the Effective Date and continue until December 31,
2005; provided that, commencing on December 31, 2003, and on each
subsequent December 31, the Employment Period will be extended for one (1)
additional year unless either party gives the other party written notice not to
extend this Agreement at least ninety (90) days before the extension would
otherwise become effective.

 

1

 

2.             Duties and Powers
of Executive.

 

a.             Position.  The Executive will serve Cinergy as Executive Vice President and
Chief Legal Officer of the Company and he will have such responsibilities,
duties, and authority as are customary for someone of that position and such
additional duties, consistent with his position, as may be assigned to him from
time to time during the Employment Period by the Board of Directors or the
Chief Executive Officer.  Executive
shall devote substantially all of Executive’s business time, efforts and
attention to the performance of Executive’s duties under this Agreement; provided,
however, that this requirement shall not preclude Executive from
reasonable participation in civic, charitable or professional activities or the
management of Executive’s passive investments, so long as such activities do
not materially interfere with the performance of Executive’s duties under this
Agreement.

 

b.            Place
of Performance.  In connection with
the Executive’s employment, the Executive will be based at the principal
executive offices of Cinergy, 221 East Fourth Street, Cincinnati, Ohio.  Except for required business travel to an
extent substantially consistent with the present business travel obligations of
Cinergy executives who have positions of authority comparable to that of the
Executive, the Executive will not be required to relocate to a new principal
place of business that is more than thirty (30) miles from such location.

 

3.             Compensation.  The Executive will receive the following
compensation for his services under this Agreement.

 

a.             Salary.  The Executive’s Annual Base Salary, payable in pro rata
installments not less often than semi-monthly, will be at the annual rate of
not less than $475,008.  Any increase in
the Annual Base Salary will not serve to limit or reduce any other obligation
of Cinergy under this Agreement.  The
Annual Base Salary will not be reduced except for across-the-board salary
reductions similarly affecting all Cinergy management personnel.  If Annual Base Salary is increased or
reduced during the Employment Period, then such adjusted salary will thereafter
be the Annual Base Salary for all purposes under this Agreement.

 

b.             Retirement, Incentive, Welfare Benefit
Plans and Other Benefits.

 

(i)            During the Employment Period, the Executive
will be eligible, and Cinergy will take all necessary action to cause the
Executive to become eligible, to participate in short-term and long-term
incentive, stock option, restricted stock, performance unit, savings,
retirement and welfare plans, practices, policies and programs applicable generally
to other senior executives of Cinergy who are considered Tier II executives for
compensation purposes, except with respect to any plan, practice, policy or
program to which the Executive has waived his rights in writing. The Executive
will be a participant in the Senior Executive Supplement portion of the Cinergy
Corp. Supplemental Executive Retirement Plan (the “SERP”) and the Executive
will receive a supplemental retirement benefit hereunder in an amount equal to
the excess of the amount that he would be entitled to receive under the terms
of the SERP if his “Total Pay Replacement Percentage” thereunder were equal to
the product of five percent (5%) and the number of his years of “Senior
Executive Service” not in excess of 15 (in whole years) as of the applicable
date over the amount to which the Executive is actually entitled pursuant to
the terms of the SERP as

 

2

 

of the applicable date.  The supplemental retirement
benefit described in the preceding sentence shall be payable in
accordance with the terms of the SERP (including any applicable vesting
schedule)  and shall be
treated hereunder (including for purposes of Section 5a(iii)(3)) as
if it were payable under the SERP. 
Notwithstanding the foregoing, in no event shall the sum of the
supplemental retirement benefit described in this Section 3b(i) and the
Executive’s total aggregate annual benefit under the SERP exceed 60% of the
Executive’s Highest Average Earnings.

 

(ii)           Supplemental Retirement Benefit.

 

(1)           Amount, Form, Timing and Method of
Payment.  If the Executive retires
from Cinergy after reaching age 62, the Executive will be entitled and fully
vested in a supplemental retirement benefit in an amount which, when expressed
as an annual amount payable during the life of the Executive, shall equal the
excess of (1) 60% of the Executive’s Highest Average Earnings over (2) his
total aggregate annual benefit, payable in the form of a single life annuity to
the Executive, under Section 3b(i) hereof and under all Executive
Retirement Plans.  Except as described
below, the form (e.g., the 100% joint and survivor annuity form of benefit),
timing, and method of payment of the supplemental retirement benefit payable
under this Paragraph will be the same as those elected by the Executive under
the Pension Plan, and the amount of such benefit shall be calculated after
taking into account the actuarial factors contained in the Pension Plan, provided,
however, that such benefit shall not be actuarially reduced for early
commencement.

 

(2)           Death Benefit.  If the Executive dies after reaching age 62
but prior to his retirement from Cinergy, and if his Spouse, on the date of his
death, is living on the date the first installment of the supplemental
retirement benefit would be payable under this Paragraph, the Spouse will be
entitled to receive the supplemental retirement benefit as a Spouse’s
benefit.  The form, timing, and method
of payment of any Spouse’s benefit under this Paragraph will be the same as those
applicable to the Spouse under the Pension Plan, and the amount of such benefit
shall be calculated after taking into account the actuarial factors contained
in the Pension Plan, provided, however, that such benefit shall
not be actuarially reduced for early commencement.

 

(3)           Special Payment Election Effective Upon a
Change in Control.  Notwithstanding
the foregoing, the Executive may make a special payment election with respect
to his supplemental retirement benefit (if any) in accordance with the following
provisions:

 

(A)          The Executive may elect, on a form provided
by Cinergy, to receive a single lump sum cash payment in an amount equal to the
Actuarial Equivalent (as defined below) of his supplemental retirement benefit
(or the Actuarial Equivalent of the remaining payments to be made in connection
with his supplemental retirement benefit in the event that payment of his
supplemental retirement benefit has already commenced) payable no later than 30
days after the later of the occurrence of a Change in Control or the date of
his termination of employment.

 

(B)           Such special payment election shall become
operative only upon the occurrence of a Change in Control and only if the
Executive’s termination of employment occurs either (1) prior to the occurrence
of a Change in Control or (2) during the 24-month period commencing upon the

 

3

 

occurrence of a Change in Control. 
Once operative, such special payment election shall override any other
payment election made by the Executive with respect to his supplemental
retirement benefit.

 

(C)           In order to be effective, a special payment
election (or withdrawal of that election) must be made either prior to the
occurrence of a Potential Change in Control or, with the consent of Cinergy,
during the 30-day period commencing upon the occurrence of a Potential Change
in Control.  In the event that a
Potential Change in Control occurs and subsequently ceases to exist, other than
as a result of a Change in Control, such Potential Change in Control shall be
disregarded for purposes of this Section.

 

(D)          In the event that the Executive makes a
special payment election and pursuant to that election he becomes entitled to
receive a single lump sum cash payment pursuant to this Section payable prior
to the commencement of his supplemental retirement benefit in another form of
payment, the Actuarial Equivalent of his supplemental retirement benefit shall
be calculated based on the following assumptions:

 

(I)            The form of payment for each of the
Executive’s retirement benefits under Section 3b(i) hereof and under the
Executive Retirement Plans and the Executive’s supplemental retirement benefit
shall be a single life annuity;

 

(II)           The commencement date for each of the
Executive’s retirement benefits under Section 3b(i) hereof and under the
Executive Retirement Plans and the Executive’s supplemental retirement benefit
shall be the first day of the calendar month coincident with or next following
his termination of employment;

 

(III)         The term “Actuarial Equivalent” has the
meaning given to that term in the Pension Plan with respect to lump sum
payments; and

 

(IV)         The amount of the Executive’s supplemental
retirement benefit shall not be actuarially reduced for early commencement.

 

(E)           In the event that the Executive makes a
special payment election and pursuant to that election he is entitled to
receive a single lump sum cash payment payable after the commencement of
his supplemental retirement benefit in another form of payment, his lump sum
cash payment shall be equal to the Actuarial Equivalent (as that term is used
in the Pension Plan with respect to lump sum payments) of the remaining
payments to be made in connection with his supplemental retirement benefit.

 

(4)           Except as provided in
Section 3b(ii)(3), the supplemental retirement benefit shall not be
payable in the form of a single lump sum.

 

(iii)          Upon his retirement on or after having become
fully vested in his benefit under the Pension Plan, the Executive will be
eligible for comprehensive medical and dental benefits which are not materially
different from the benefits provided to retirees under the Cinergy Corp.
Welfare Benefits Program or any similar program or successor to that program.
For purposes of

 

4

 

determining the amount of the monthly premiums due from the Executive,
the Executive will receive from Cinergy the maximum subsidy available as of the
date of his retirement to an active Cinergy employee with the same medical benefits
classification/eligibility as the Executive’s medical benefits
classification/eligibility on the date of his retirement.

 

(iv)          The Executive will be a participant in the
Annual Incentive Plan and will be paid pursuant to the terms and conditions of
that plan, subject to the following: (1) The maximum annual bonus shall be not
less than one hundred five percent (105%) of the Executive’s Annual Base Salary
(the “Maximum Annual Bonus”); and (2) The target annual bonus shall be not less
than sixty percent (60%) of the Executive’s Annual Base Salary (the “Target
Annual Bonus”).

 

(v)           The Executive will be a participant in the
Long-Term Incentive Plan (the “LTIP”), and the Executive’s annualized target
award opportunity under the LTIP will be equal to no less than ninety percent
(90%) of his Annual Base Salary (the “Target LTIP Bonus”).

 

(vi)          For purposes of Sections 3b(iv) and 3b(v),
the Executive’s Annual Base Salary for any calendar year shall be increased by
the amount of any Nonelective Employer Contributions made on behalf of the
Executive during such calendar year under the 401(k) Excess Plan.

 

c.             Fringe Benefits and Perquisites.  During the Employment Period, the Executive
will be entitled to the following additional fringe benefits in accordance with
the terms and conditions of Cinergy’s policies and practices for such fringe
benefits:

 

(i)            Cinergy will furnish to the Executive an
automobile appropriate for the Executive’s level of position, or, at Cinergy’s
discretion, a cash allowance of equivalent value.  Cinergy will also pay all of the related expenses for gasoline,
insurance, maintenance, and repairs, or provide for such expenses within the
cash allowance.  All benefits provided
pursuant to this Section 3c(i) shall be provided in accordance with generally
applicable procedures established from time to time by Cinergy in its sole
discretion.

 

(ii)           Cinergy will pay the initiation fee and the
annual dues, assessments, and other membership charges of the Executive for
membership in a country club selected by the Executive.

 

(iii)          Cinergy will provide paid vacation for four
(4) weeks per year (or such longer period for which Executive is otherwise
eligible under Cinergy’s policy).

 

(iv)          Cinergy will furnish to the Executive annual
financial planning and tax preparation services, provided, however,
that the cost to Cinergy of such services shall not exceed $15,000 during any
thirty-six (36) consecutive month period. 
Notwithstanding the preceding sentence, in the event any  payment to the Executive pursuant to this
Section 3c(iv) is subject to any 
federal, state, or local income or employment taxes, Cinergy shall
provide to the Executive an additional payment in an amount necessary such that
after payment by the Executive of all such taxes (calculated after assuming
that the Executive pays such taxes for the year in which the benefit occurs at
the highest marginal tax rate applicable), including the taxes imposed on the
additional payment, the Executive retains an amount equal to the benefit
provided pursuant to this Section 3c(iv).

 

(v)           Cinergy will pay to relocate the Executive
and his immediate family to the Cincinnati, Ohio area

 

5

 

under the terms of the Relocation Program.

 

(v)           Cinergy will provide other fringe benefits
in accordance with Cinergy plans, practices, programs, and policies in effect
from time to time, commensurate with his position and at least comparable to
those received by other Cinergy Tier II executives.

 

d.             Expenses.  Cinergy agrees to reimburse the Executive for all expenses,
including those for travel and entertainment, properly incurred by him in the
performance of his duties under this Agreement in accordance with the policies
established from time to time by the Board of Directors.

 

e.             Relocation Benefits.  Following termination of the Executive’s
employment for any reason (other than death), the Executive will be entitled to
reimbursement from Cinergy for the reasonable costs of relocating from the
Cincinnati, Ohio, area to a new primary residence in a manner that is
consistent with the terms of the Relocation Program.  Notwithstanding the foregoing, if the Executive becomes employed
by another employer and is eligible to receive relocation benefits under
another employer-provided plan, any benefits provided to the Executive under
this Section 3e will be secondary to those provided under the other
employer-provided relocation plan.  The
Executive must report to Cinergy any such relocation benefits that he actually
receives under another employer-provided plan.

 

f.              Stock Options and Stock Appreciation
Rights.  Notwithstanding
Section 5d, upon the occurrence of a Change in Control, any stock options
or stock appreciation rights then held by the Executive pursuant to the LTIP or
Cinergy Corp. Stock Option Plan shall, to the extent not otherwise provided in
the applicable Stock Related Documents, become immediately exercisable.  If the Executive terminates employment for
any reason during the twenty-four (24) month period commencing upon the
occurrence of a Change in Control, notwithstanding Section 5d, any stock
options or stock appreciation rights then held by the Executive pursuant to the
LTIP or Cinergy Corp. Stock Option Plan shall, to the extent not otherwise
provided in the applicable Stock Related Documents, remain exercisable in
accordance with their terms but in no event for a period less than the lesser
of (i) three months following such termination of employment or (ii) the
remaining term of such stock option or stock appreciation right (which
remaining term shall be determined without regard to such termination of
employment).

 

6

 

4.             Termination of
Employment.

 

a.             Death.  The Executive’s employment will terminate automatically upon the
Executive’s death during the Employment Period.

 

b.             By Cinergy for Cause.  Cinergy may terminate the Executive’s
employment during the Employment Period for Cause.  For purposes of this Employment Agreement, “Cause” means the
following:

 

(i)            The willful and continued failure by the
Executive to substantially perform the Executive’s duties with Cinergy (other
than any such failure resulting from the Executive’s incapacity due to physical
or mental illness) that, if curable, has not been cured within 30 days after
the Board of Directors or the Chief Executive Officer has delivered to the
Executive a written demand for substantial performance, which demand
specifically identifies the manner in which the Executive has not substantially
performed his duties.  This event will
constitute Cause even if the Executive issues a Notice of Termination for Good
Reason pursuant to Section 4d after the Board of Directors or Chief
Executive Officer delivers a written demand for substantial performance.

 

(ii)           The breach by the Executive of the
confidentiality provisions set forth in Section 9.

 

(iii)          The conviction of the Executive for the
commission of a felony, including the entry of a guilty or nolo contendere
plea, or any willful or grossly negligent action or inaction by the Executive
that has a materially adverse effect on Cinergy.  For purposes of this definition of Cause, no act, or failure to
act, on the Executive’s part will be deemed “willful” unless it is done, or
omitted to be done, by the Executive in bad faith and without reasonable belief
that the Executive’s act, or failure to act, was in the best interest of
Cinergy.

 

(iv)          Notwithstanding the foregoing, Cinergy shall
be deemed to have not terminated the employment of the Executive for Cause
unless and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than a majority of
the Board then in office at a meeting of the Board called and held for such
purpose (after reasonable notice to the Executive and an opportunity for the
Executive, together with his counsel, to be heard by the Board), finding that,
in the good faith opinion of the Board, the Executive had committed an act set
forth above in this Section 4b and specifying the particulars thereof in
detail.

 

7

 

c.             By Cinergy Without Cause.  Cinergy may, upon at least 30 days advance
written notice to the Executive, terminate the Executive’s employment during
the Employment Period for a reason other than Cause, but the obligations placed
upon Cinergy in Section 5 will apply.

 

d.             By the Executive for Good Reason.  The Executive may terminate his employment
during the Employment Period for Good Reason. 
For purposes of this Agreement, “Good Reason” means the following:

 

(i)            (1) A reduction in the Executive’s Annual
Base Salary, except for across-the-board salary reductions similarly affecting
all Cinergy management personnel, (2) a reduction in the amount of the
Executive’s Maximum Annual Bonus under the Annual Incentive Plan, except for
across-the-board Maximum Annual Bonus reductions similarly affecting all
Cinergy management personnel, or (3) a reduction in any other benefit or
payment described in Section 3 of this Agreement, except for changes to
the employee benefits programs generally affecting Cinergy management
personnel, provided that those changes, in the aggregate, will not result in a
material adverse change with respect to the benefits to which the Executive was
entitled as of the Effective Date.

 

(ii)           (1) The material reduction without his
consent of the Executive’s title, authority, duties, or responsibilities from
those in effect immediately prior to the reduction, (2) in the event the
Executive is or becomes a member of the Board during the Employment Period, the
failure by Cinergy without the consent of the Executive to nominate the
Executive for re-election to the Board, or (3) a material adverse change in the
Executive’s reporting responsibilities.

 

(iii)          Any breach by Cinergy of any other material
provision of this Agreement (including but not limited to the place of
performance as specified in Section 2b).

 

(iv)          The Executive’s disability due to physical or
mental illness or injury that precludes the Executive from performing any job
for which he is qualified and able to perform based upon his education,
training or experience.

 

(v)           A failure by the Company to require any
successor entity to the Company specifically to assume in writing all of the
Company’s obligations to the Executive under this Agreement.

 

For purposes of determining whether Good Reason exists with
respect to a Qualifying Termination occurring on or within 24 months following
a Change in Control, any claim by the Executive that Good Reason exists shall
be presumed to be correct unless the Company establishes to the Board by clear
and convincing evidence that Good Reason does not exist.

 

e.             By the Executive Without Good Reason.  The Executive may terminate his employment
without Good Reason upon prior written notice to the Company.

 

8

 

f.              Notice of Termination.  Any termination of the Executive’s
employment by Cinergy or by the Executive during the Employment Period (other
than a termination due to the Executive’s death) will be communicated by a
written Notice of Termination to the other party to this Agreement in
accordance with Section 12b.  For
purposes of this Agreement, a “Notice of Termination” means a written notice
that specifies the particular provision of this Agreement relied upon and that
sets forth in reasonable detail the facts and circumstances claimed to provide
a basis for terminating the Executive’s employment under the specified
provision.  The failure by the Executive
or Cinergy to set forth in the Notice of Termination any fact or circumstance
that contributes to a showing of Good Reason or Cause will not waive any right
of the Executive or Cinergy under this Agreement or preclude the Executive or
Cinergy from asserting that fact or circumstance in enforcing rights under this
Agreement.

 

g.             Sale of Company Stock.  The Executive acknowledges and agrees that
he shall not sell or otherwise dispose of any shares of Company stock acquired
pursuant to the exercise of a stock option, other than shares sold in order to
pay an option exercise price or the related tax withholding obligation, until
90 days after the Date of Termination. 
Notwithstanding the foregoing, Cinergy, in its sole discretion, may
waive the restrictions contained in the previous sentence.

 

5.             Obligations of
Cinergy Upon Termination.

 

a.             Certain Terminations.

 

(i)            If a Qualifying Termination occurs during
the Employment Period, Cinergy will pay to the Executive a lump sum amount, in
cash, equal to the sum of the following Accrued Obligations:

 

(1)           the pro-rated portion of the Executive’s
Annual Base Salary payable through the Date of Termination, to the extent not
previously paid.

 

(2)           any amount payable to the Executive under
the Annual Incentive Plan in respect of the most recently completed fiscal
year, to the extent not theretofore paid.

 

(3)           an amount equal to the AIP Benefit for the
fiscal year that includes the Date of Termination multiplied by a fraction, the
numerator of which is the number of days from the beginning of that fiscal year
to and including the Date of Termination and the denominator of which is three
hundred and sixty-five (365).  The AIP
Benefit component of the calculation will be equal to the annual bonus that
would have been earned by the Executive pursuant to any annual bonus or
incentive plan maintained by Cinergy in respect of the fiscal year in which
occurs the Date of Termination, determined by projecting Cinergy’s performance
and other applicable goals and objectives for the entire fiscal year based on
Cinergy’s performance during the period of such fiscal year occurring prior to
the Date of Termination, and based on such other assumptions and rates as
Cinergy deems reasonable.

 

(4)           the Accrued Obligations described in this
Section 5a(i) will be paid within thirty (30) days after the Date of
Termination.  These Accrued Obligations
are payable to the Executive regardless of whether a Change in Control has
occurred.

 

9

 

(ii)           In the event of a Qualifying Termination either
prior to the occurrence of a Change in Control, or more than twenty-four (24)
months following the occurrence of a Change in Control, Cinergy will pay the
Accrued Obligations, and Cinergy will have the following additional obligations
described in this Section 5a(ii); provided, however, that
each of the benefits described below in this Section 5a(ii) shall only be
provided to the Executive if, upon presentation to the Executive following a
Qualifying Termination, the Executive timely executes and does not timely
revoke the Waiver and Release.

 

(1)           Cinergy will pay to the Executive a lump sum
amount, in cash, equal to three (3) times the sum of the Annual Base Salary and
the Annual Bonus.  For this purpose, the
Annual Base Salary will be at the rate in effect at the time Notice of
Termination is given (without giving effect to any reduction in Annual Base
Salary, if any, prior to the termination, other than across-the-board
reductions), and shall include the amount of any Nonelective Employer
Contributions made on behalf of the Executive under the 401(k) Excess Plan
during the fiscal year in which the Executive’s Qualifying Termination occurs,
and the Annual Bonus will be the higher of (A) the annual bonus earned by the
Executive pursuant to any annual bonus or incentive plan maintained by Cinergy
in respect of the year ending immediately prior to the fiscal year in which
occurs the Date of Termination, and (B) the annual bonus that would have been
earned by the Executive pursuant to any annual bonus or incentive plan
maintained by Cinergy in respect of the fiscal year in which occurs the Date of
Termination, calculated by projecting Cinergy’s performance and other
applicable goals and objectives for the entire fiscal year based on Cinergy’s
performance during the period of such fiscal year occurring prior to the Date
of Termination, and based on such other assumptions and rates as Cinergy deems
reasonable; provided, however that for purposes of this
Section 5a(ii)(1)(B), the Annual Bonus shall not be less than the Target
Annual Bonus, nor greater than the Maximum Annual Bonus for the year in which
the Date of Termination occurs.  This
lump sum will be paid within thirty (30) days after the expiration of the
revocation period contained in the Waiver and Release.

 

(2)           Subject to Clauses (A), (B) and (C) below,
Cinergy will provide, until the end of the Employment Period, medical and
dental benefits to the Executive and/or the Executive’s dependents at least
equal to those that would have been provided if the Executive’s employment had
not been terminated (excluding benefits to which the Executive has waived his
rights in writing).  The benefits
described in the preceding sentence will be in accordance with the medical and welfare
benefit plans, practices, programs, or policies of Cinergy (the “M&W
Plans”) as then currently in effect and applicable generally to other Cinergy
senior executives and their families. 
In the event that any medical or dental benefits or payments provided
pursuant to this Section 5a(ii)(2)(B) are subject to federal, state, or
local income or employment taxes, Cinergy shall provide the Executive with an
additional payment in the amount necessary such that after payment by the
Executive of all such taxes (calculated after assuming that the Executive pays
such taxes for the year in which the payment or benefit occurs at the highest
marginal tax rate applicable), including the taxes imposed on the additional
payment, the Executive retains an amount equal to the medical or dental
benefits or payments provided pursuant to this Section 5a(ii)(2)(B).

 

(A)          If, as of the Executive’s Date of
Termination, the Executive meets the eligibility requirements for Cinergy’s
retiree medical and welfare benefit plans, the provision of those retiree
medical and

 

10

 

welfare benefit plans to the Executive will satisfy Cinergy’s
obligation under this Section 5a(ii)(2).

 

(B)           If, as of the Executive’s Date of
Termination, the provision to the Executive of the M&W Plan benefits
described in this Section 5a(ii)(2) would either (1) violate the terms of
the M&W Plans (or any related insurance policies) or (2) violate any of the
Code’s nondiscrimination requirements applicable to the M&W Plans, then
Cinergy, in its sole discretion, may elect to pay the Executive, in lieu of the
M&W Plan benefits described under this Section 5a(ii)(2), a lump sum
cash payment equal to the total monthly premiums (or in the case of a self
funded plan, the cost of COBRA continuation coverage) that would have been paid
by Cinergy for the Executive under the M&W Plans from the Date of
Termination through the end of the Employment Period.  Nothing in this Clause will affect the Executive’s right to elect
COBRA continuation coverage under a M&W Plan in accordance with applicable
law, and Cinergy will make the payment described in this Clause whether or not
the Executive elects COBRA continuation coverage, and whether or not the
Executive receives health coverage from another employer.

 

(C)           If the Executive becomes employed by another
employer and is eligible to receive medical or other welfare benefits under
another employer-provided plan, any benefits provided to the Executive under
the M&W Plans will be secondary to those provided under the other employer-provided
plan during the Executive’s applicable period of eligibility.

 

(3)           Cinergy will pay the Executive a lump sum
amount, in cash, equal to $15,000 in order to cover tax counseling services
through an agency selected by the Executive. 
In the event any payment to the Executive pursuant to this
Section 5a(ii)(3) is subject to any federal, state, or local income or
employment taxes, Cinergy shall provide to the Executive an additional payment
in an amount necessary such that after payment by the Executive of all such
taxes (calculated after assuming that the Executive pays such taxes for the
year in which his Date of Termination occurs at the highest marginal tax rate
applicable), including the taxes imposed on the additional payment, the
Executive retains an amount equal to the payment provided pursuant to this
Section 5a(ii)(3).  Such payment
will be transferred to the Executive within thirty (30) days of the expiration
of the revocation period contained in the Waiver and Release.

 

(iii)          In the event of a Qualifying Termination
during the twenty-four (24) month period beginning upon the occurrence of a
Change in Control, Cinergy will pay the Accrued Obligations listed in Sections
5a(i)(1) and (2), Cinergy will pay the Accrued Obligations listed in Section 5a(i)(3)
(but only if such Qualifying Termination occurs after the calendar year in
which occurs such Change in Control) and Cinergy will have the following
additional obligations described in this Section 5a(iii); provided,
however, that each of the benefits described below in this
Section 5a(iii) shall only be provided to the Executive if, upon
presentation to the Executive following a Qualifying Termination, the Executive
timely executes and does not timely revoke the Waiver and Release.

 

(1)           Cinergy will pay to the Executive a lump sum
severance payment, in cash, equal to three (3) times the higher of (x) the sum
of the Executive’s current Annual Base Salary and Target Annual Bonus and (y)
the sum of the Executive’s Annual Base Salary in effect immediately prior to
the Change in Control and the Change in Control Bonus.  For purposes of the preceding sentence, the
Executive’s Annual Base Salary on any given date shall include the amount of
any

 

11

 

Nonelective Employer Contributions made on behalf of the Executive
under the 401(k) Excess Plan during the fiscal year in which such date
occurs.  For purposes of this Agreement,
the Change in Control Bonus shall mean the higher of (A) the annual bonus
earned by the Executive pursuant to any annual bonus or incentive plan
maintained by Cinergy in respect of the year ending immediately prior to the
fiscal year in which occurs the Date of Termination or, if higher, immediately
prior to the fiscal year in which occurs the Change in Control, and (B) the
annual bonus that would have been earned by the Executive pursuant to any
annual bonus or incentive plan maintained by Cinergy in respect of the year in
which occurs the Date of Termination, calculated by projecting Cinergy’s
performance and other applicable goals and objective for the entire fiscal year
based on Cinergy’s performance during the period of such fiscal year occurring
prior to the Date of Termination, and based on such other assumptions and rates
as Cinergy deems reasonable, provided, however, that  for purposes of this
Section 5a(iii)(1)(B), such Change in Control Bonus shall not be less than
the Target Annual Bonus, nor greater than the Maximum Annual Bonus.  This lump sum will be paid within thirty
(30) days of the expiration of the revocation period contained in the Waiver
and Release.  Nothing in this
Section 5a(iii)(1) shall preclude the Executive from receiving the amount,
if any, to which he is entitled in accordance with the terms of the Annual Incentive
Plan for the fiscal year that includes the Date of Termination.

 

(2)           Cinergy will pay to the Executive the lump
sum present value of any benefits under the Executive Supplemental Life Program
under the terms of the applicable plan or program as of the Date of
Termination, calculated as if the Executive was fully vested as of the Date of
Termination. The lump sum present value, assuming commencement at age 50 or the
Executive’s age as of the Date of Termination if later, will be determined
using the interest rate applicable to lump sum payments in the Cinergy Corp.
Non-Union Employees’ Pension Plan or any successor to that plan for the plan
year that includes the Date of Termination. To the extent no such interest rate
is provided therein, the annual interest rate applicable under
Section 417(e)(3) of the Code, or any successor provision thereto, for the
second full calendar month preceding the first day of the calendar year that
includes the Date of Termination will be used. This lump sum will be paid within
thirty (30) days of the expiration of the revocation period contained in the
Waiver and Release.

 

(3)           The Executive shall be fully vested in his
accrued benefits as of the Date of Termination under the Executive Retirement
Plans and the last three sentences of Section 3b(i) of this Agreement and,
and his aggregate accrued benefits thereunder and under Section 3b(ii) of
this Agreement will be calculated, and he will be treated for all purposes, as
if he was credited with three (3) additional years of age and service as of the
Date of Termination, provided, however, that to the extent a
calculation is made regarding the actuarial equivalent amount of any alternate
form of benefit, the Executive will not be credited with three additional years
of age for purposes of such calculation. 
However, Cinergy will not commence payment of such benefits prior to the
date that the Executive has attained, or is treated (after taking into account
the preceding sentence) as if he had attained, age 50.

 

(4)           For a thirty-six (36) month period after the
Date of Termination, Cinergy will arrange to provide to the Executive and/or
the Executive’s dependents life, disability, accident, and health insurance
benefits substantially similar to those that the Executive and/or the Executive’s
dependents are

 

12

 

receiving immediately prior to the Notice of Termination at a
substantially similar cost to the Executive (without giving effect to any
reduction in those benefits subsequent to a Change in Control that constitutes
Good Reason), except for any benefits that were waived by the Executive in
writing.  If Cinergy arranges to provide
the Executive and/or the Executive’s dependents with life, disability,
accident, and health insurance benefits, those benefits will be reduced to the
extent comparable benefits are actually received by or made available to the
Executive and/or the Executive’s dependents during the thirty-six (36) month
period following the Executive’s Date of Termination.  The Executive must report to Cinergy any such benefits that he or
his dependents actually receives or that are made available to him or his
dependents.  In lieu of the benefits
described in the preceding sentences, Cinergy, in its sole discretion, may elect
to pay to the Executive a lump sum cash payment equal to thirty-six (36) times
the monthly premiums (or in the case of a self funded plan, the cost of COBRA
continuation coverage) that would have been paid by Cinergy to provide those
benefits to the Executive and/or the Executive’s dependents.  Nothing in this Section 5a(iii)(4) will
affect the Executive’s right to elect COBRA continuation coverage in accordance
with applicable law, and Cinergy will provide the benefits or make the payment
described in this Clause whether or not the Executive elects COBRA continuation
coverage, and whether or not the Executive receives health coverage from
another employer.  In the event that any
benefits or payments provided pursuant to this Section 5a(iii)(4) are subject
to federal, state, or local income or employment taxes, Cinergy shall provide
the Executive with an additional payment in the amount necessary such that
after payment by the Executive of all such taxes (calculated after assuming
that the Executive pays such taxes for the year in which the payment or benefit
occurs at the highest marginal tax rate applicable), including the taxes
imposed on the additional payment, the Executive retains an amount equal to the
benefits or payments provided pursuant to this Section 5a(iii)(4).

 

(5)           In lieu of any and all other rights with
respect to the automobile assigned by Cinergy to the Executive, Cinergy will
provide the Executive with a lump sum payment in the amount of $50,000.  In the event any payment to the Executive
pursuant to this Section 5a(iii)(5) is subject to any federal, state, or
local income or employment taxes, Cinergy shall provide to the Executive an
additional payment in an amount necessary such that after payment by the
Executive of all such taxes (calculated after assuming that the Executive pays
such taxes for the year in which his Date of Termination occurs at the highest
marginal tax rate applicable), including the taxes imposed on the additional
payment, the Executive retains an amount equal to the payment provided pursuant
to this Section 5a(iii)(5).  Such
payment will be transferred to the Executive within thirty (30) days of the
expiration of the revocation period contained in the Waiver and Release.

 

(6)           Cinergy will pay the Executive a lump sum
amount, in cash, equal to $15,000 in order to cover tax counseling services
through an agency selected by the Executive. 
In the event any payment to the Executive pursuant to this
Section 5a(iii)(6) is subject to any federal, state, or local income or employment
taxes, Cinergy shall provide to the Executive an additional payment in an
amount necessary such that after payment by the Executive of all such taxes
(calculated after assuming that the Executive pays such taxes for the year in
which his Date of Termination occurs at the highest marginal tax rate
applicable), including the taxes imposed on the additional payment, the
Executive retains an amount equal to the payment provided pursuant to this
Section 5a(iii)(6).  Such payment
will be transferred to the Executive within thirty (30) days of the expiration
of the

 

13

 

revocation period contained in the Waiver and Release.

 

(7)           Cinergy will provide annual dues and
assessments of the Executive for membership in a country club selected by the
Executive until the end of the Employment Period.

 

(8)           Cinergy will provide outplacement services
suitable to the Executive’s position until the end of the Employment Period or,
if earlier, until the first acceptance by the Executive of an offer of
employment.  At the Executive’s
discretion, 15% of Annual Base Salary may be paid in lieu of outplacement
services, which payment will be transferred to the Executive within thirty (30)
days of the expiration of the revocation period contained in the Waiver and
Release.

 

For purposes of this Section 5a(iii), the Executive will
be deemed to have incurred a Qualifying Termination upon a Change in Control if
the Executive’s employment is terminated prior to a Change in Control, without
Cause at the direction of a Person who has entered into an agreement with
Cinergy, the consummation of which will constitute a Change in Control, or if
the Executive terminates his employment for Good Reason prior to a Change in
Control if the circumstances or event that constitutes Good Reason occurs at
the direction of such a Person.

 

b.             Termination by Cinergy for Cause or by
the Executive Other Than for Good Reason. 
Subject to the provisions of Section 7, and notwithstanding any
other provisions of this Agreement, if the Executive’s employment is terminated
for Cause during the Employment Period, or if the Executive terminates
employment during the Employment Period other than a termination for Good
Reason, Cinergy will have no further obligations to the Executive under this
Agreement other than the obligation to pay to the Executive the Accrued
Obligations, plus any other earned but unpaid compensation, in each case to the
extent not previously paid.

 

c.             Certain Tax Consequences.

 

(i)            In the event that any benefits paid or
payable to the Executive or for his benefit pursuant to the terms of this
Agreement or any other plan or arrangement in connection with, or arising out
of, his employment with Cinergy or a change in ownership or effective control of
Cinergy or of a substantial portion of its assets (a “Payment” or “Payments”)
would be subject to any Excise Tax, then the Executive will be entitled to
receive an additional payment (a “Gross-Up Payment”) in an amount such that
after payment by the Executive of all taxes (including any interest, penalties,
additional tax, or similar items imposed with respect thereto and the Excise
Tax), including any Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
or assessable against the Executive due to the Payments.

 

(ii)           Subject to the provisions of
Section 5c, all determinations required to be made under this
Section 5c, including whether and when a Gross-Up Payment is required and
the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by the Accounting Firm, which
shall provide detailed supporting calculations both to the Company and the
Executive within fifteen (15) business days of the receipt of notice from the
Executive that there has been a Payment, or such earlier time as is requested
by the Company.  If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall, at the

 

14

 

same time as it makes such determination, furnish the Executive with an
opinion that he has substantial authority not to report any Excise Tax on his
federal income tax return.  All fees and
expenses of the Accounting Firm shall be borne solely by the Company.  Any Gross-Up Payment, as determined pursuant
to this Section 5c, shall be paid by Cinergy to the Executive within five
(5) days of the receipt of the Accounting Firm’s determination.  Any determination by the Accounting Firm
shall be binding upon Cinergy and the Executive.  As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by Cinergy should have been made (“Underpayment”), consistent
with the calculations required to be made hereunder.  In the event of any Underpayment, the Accounting Firm shall determine
the amount of the Underpayment that has occurred and any such Underpayment
shall be promptly paid by Cinergy to or for the benefit of the Executive, and
Cinergy shall indemnify and hold harmless the Executive for any such
Underpayment, on an after-tax basis, including interest and penalties with
respect thereto.  In the event that the
Excise Tax is subsequently determined to be less than the amount taken into
account hereunder at the time of termination of the Executive’s employment, the
Executive shall repay to the Company, at the time that the amount of such
reduction in Excise Tax is finally determined, the portion of the Gross-Up
Payment attributable to such reduction (plus that portion of the Gross-Up
Payment attributable to the Excise Tax and federal, state and local income and
employment tax imposed on the Gross-Up Payment being repaid by the Executive to
the extent that such repayment results in a reduction in Excise Tax and/or a
federal, state or local income or employment tax deduction) plus interest on
the amount of such repayment at the rate provided in Code
Section 1274(b)(2)(B).

 

(iii)          The value of any non-cash benefits or any
deferred payment or benefit paid or payable to the Executive will be determined
in accordance with the principles of Code Sections 280G(d)(3) and (4).  For purposes of determining the amount of
the Gross-Up Payment, the Executive will be deemed to pay federal income taxes
at the highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and applicable state and local income
taxes at the highest marginal rate of taxation in the state and locality of the
Executive’s residence on the Date of Termination, net of the maximum reduction
in federal income taxes that would be obtained from deduction of those state
and local taxes.

 

(iv)          Notwithstanding anything contained in this
Agreement to the contrary, in the event that, according to the Accounting
Firm’s determination, an Excise Tax will be imposed on any Payment or Payments,
Cinergy will pay to the applicable government taxing authorities as Excise Tax
withholding, the amount of the Excise Tax that Cinergy has actually withheld
from the Payment or Payments in accordance with law.

 

d.             Value Creation Plan and Stock Options.  Upon the Executive’s termination of employment
for any reason, the Executive’s entitlement to restricted shares and
performance shares under the Value Creation Plan and any stock options granted
under the Cinergy Corp. Stock Option Plan, the LTIP or any other stock option
plan will be determined under the terms of the appropriate plan and any
applicable administrative guidelines and written agreements, provided, however,
that following the occurrence of a Change in Control the terms of any such
plan, administrative guideline or written agreement shall not be amended in a
manner that would adversely affect the

 

15

 

Executive with respect to awards granted to the Executive prior to the
Change in Control.

 

e.             Benefit Plans in General.  Upon the Executive’s termination of
employment for any reason, the Executive’s entitlements, if any, under all
benefit plans of Cinergy, including but not limited to the Deferred
Compensation Plan, 401(k) Excess Plan, Cinergy Corp. Supplemental Executive
Retirement Plan, Cinergy Corp. Excess Profit Sharing Plan and any vacation
policy, shall be determined under the terms of such plans, policies and any
applicable administrative guidelines and written agreements, provided, however,
that following the occurrence of a Change in Control the terms of such plans
and policies and any applicable administrative guidelines and written
agreements shall not be amended in a manner that would adversely affect the
Executive with respect to benefits earned by the Executive prior to the Change
in Control.

 

f.              Other Fees and Expenses.  Cinergy will also reimburse the Executive
for all reasonable legal fees and expenses incurred by the Executive (i) in
successfully disputing a Qualifying Termination that entitles the Executive to
Severance Benefits or (ii) in reasonably disputing whether or not Cinergy has
terminated his employment for Cause. 
Payment will be made within five (5) business days after delivery of the
Executive’s written request for payment accompanied by such evidence of fees and
expenses incurred as Cinergy reasonably may require.

 

6.             Non-Exclusivity of
Rights.  Nothing in this
Agreement will prevent or limit the Executive’s continuing or future
participation in any benefit, plan, program, policy, or practice provided by
Cinergy and for which the Executive may qualify, except with respect to any
benefit to which the Executive has waived his rights in writing or any plan,
program, policy, or practice that expressly excludes the Executive from
participation.  In addition, nothing in
this Agreement will limit or otherwise affect the rights the Executive may have
under any other contract or agreement with Cinergy entered into after the
Effective Date.  Amounts that are vested
benefits or that the Executive is otherwise entitled to receive under any
benefit, plan, program, policy, or practice of, or any contract or agreement
entered into after the Effective Date with Cinergy, at or subsequent to the
Date of Termination, will be payable in accordance with that benefit, plan,
program, policy or practice, or that contract or agreement, except as
explicitly modified by this Agreement. 
Notwithstanding the above, in the event that the Executive receives
Severance Benefits under Section 5a(ii) or 5a(iii), (a) the Executive
shall not be entitled to any benefits under any severance plan of Cinergy,
including but not limited to the Severance Opportunity Plan for Non-Union
Employees of Cinergy Corp. and (b) if the Executive receives such Severance
Benefits as a result of his termination for Good Reason, as that term is
defined in Section 4d(iv), Cinergy’s obligations under Sections 5a(ii) and
5a(iii) shall be reduced by the amount of any benefits payable to the Executive
under any short-term or long-term disability plan of Cinergy, the amount of which
shall be determined by Cinergy in good faith.

 

7.             Full
Settlement:  Mitigation.  Except as otherwise provided herein,
Cinergy’s obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations under this Agreement will not be affected
by any set-off, counterclaim, recoupment, defense, or other claim, right, or
action that Cinergy may have against the Executive or others.  In no event will the Executive be obligated
to seek other employment or take any other action by way of mitigation of the
amounts (including amounts for damages for breach) payable to the Executive
under any of the provisions of this Agreement and, except as provided in
Sections 3e, 5a(ii)(2)

 

16

 

and 5a(iii)(4), those amounts will not be reduced simply because the
Executive obtains other employment.  If
the Executive finally prevails on the substantial claims brought with respect
to any dispute between Cinergy and the Executive as to the interpretation,
terms, validity, or enforceability of (including any dispute about the amount
of any payment pursuant to) this Agreement, Cinergy agrees to pay all
reasonable legal fees and expenses that the Executive may reasonably incur as a
result of that dispute.

 

8.             Arbitration.  The parties agree that any dispute, claim,
or controversy based on common law, equity, or any federal, state, or local
statute, ordinance, or regulation (other than workers’ compensation claims)
arising out of or relating in any way to the Executive’s employment, the terms,
benefits, and conditions of employment, or concerning this Agreement or its
termination and any resulting termination of employment, including whether such
a dispute is arbitrable, shall be settled by arbitration.  This agreement to arbitrate includes but is
not limited to all claims for any form of illegal discrimination, improper or
unfair treatment or dismissal, and all tort claims.  The Executive will still have a right to file a discrimination
charge with a federal or state agency, but the final resolution of any
discrimination claim will be submitted to arbitration instead of a court or
jury.  The arbitration proceeding will
be conducted under the employment dispute resolution arbitration rules of the
American Arbitration Association in effect at the time a demand for arbitration
under the rules is made, and such proceeding will be adjudicated in the state
of Ohio in accordance with the laws of the state of Ohio.  The decision of the arbitrator(s), including
determination of the amount of any damages suffered, will be exclusive, final,
and binding on all parties, their heirs, executors, administrators, successors
and assigns.  Each party will bear its
own expenses in the arbitration for arbitrators’ fees and attorneys’ fees, for
its witnesses, and for other expenses of presenting its case.  Other arbitration costs, including
administrative fees and fees for records or transcripts, will be borne equally
by the parties.  Notwithstanding
anything in this Section to the contrary, if the Executive prevails with
respect to any dispute submitted to arbitration under this Section, Cinergy
will reimburse or pay all legal fees and expenses that the Executive may
reasonably incur as a result of the dispute as required by Section 7.

 

9.             Confidential
Information.  The Executive will
hold in a fiduciary capacity for the benefit of Cinergy, as well as all of
Cinergy’s successors and assigns, all secret, confidential information,
knowledge, or data relating to Cinergy, and its affiliated businesses, that the
Executive obtains during the Executive’s employment by Cinergy or any of its
affiliated companies, and that has not been or subsequently becomes public
knowledge (other than by acts by the Executive or representatives of the Executive
in violation of this Agreement).  During
the Employment Period and thereafter, the Executive will not, without Cinergy’s
prior written consent or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge, or data to anyone other
than Cinergy and those designated by it. 
The Executive understands that during the Employment Period, Cinergy may
be required from time to time to make public disclosure of the terms or existence
of the Executive’s employment relationship to comply with various laws and
legal requirements.  In addition to all
other remedies available to Cinergy in law and equity, this Agreement is
subject to termination by Cinergy for Cause under Section 4b in the event
the Executive violates any provision of this Section.

 

17

 

10.          Successors.

 

a.             This Agreement is personal to the
Executive and, without Cinergy’s prior written consent, cannot be assigned by
the Executive other than Executive’s designation of a beneficiary of any
amounts payable hereunder after the Executive’s death.  This Agreement will inure to the benefit of
and be enforceable by the Executive’s legal representatives.

 

b.             This Agreement will inure to the benefit
of and be binding upon Cinergy and its successors and assigns.

 

c.             Cinergy 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 Cinergy to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that Cinergy would be required to perform it if no succession had
taken place.  Cinergy’s failure to
obtain such an assumption and agreement prior to the effective date of a
succession will be a breach of this Agreement and will entitle the Executive to
compensation from Cinergy in the same amount and on the same terms as if the
Executive were to terminate his employment for Good Reason upon a Change in
Control, except that, for purposes of implementing the foregoing, the date on
which any such succession becomes effective will be deemed the Date of
Termination.

 

18

 

11.          Definitions.  As used in this Agreement, the following
terms, when capitalized, will have the following meanings:

 

a.             Accounting Firm.  “Accounting Firm” means Cinergy’s
independent auditors.

 

b.             Accrued Obligations.  “Accrued Obligations” means the accrued
obligations described in Section 5a(i).

 

c.             Agreement.  “Agreement” means this Employment Agreement
between Cinergy and the Executive.

 

d.             AIP Benefit.  “AIP Benefit” means the Annual Incentive
Plan benefit described in Section 5a(i).

 

e.             Annual Base Salary.  “Annual Base Salary” means, except where
otherwise specified herein, the annual base salary payable to the Executive
pursuant to Section 3a.

 

f.              Annual Bonus.  “Annual Bonus” has the meaning set forth in
Section 5a(ii)(1).

 

g.             Annual Incentive Plan.  “Annual Incentive Plan” means the Cinergy
Corp. Annual Incentive Plan or any similar plan or successor to the Annual
Incentive Plan.

 

h.             Board of Directors or Board.  “Board of Directors” or “Board” means the
board of directors of the Company.

 

i.              COBRA.  “COBRA” means the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended.

 

j.              Cause.  “Cause” has the meaning set forth in Section 4b.

 

k.             Change in Control.  A “Change in Control” will be deemed to have
occurred if any of the following events occur, after the Effective Date:

 

(i)            Any Person is or becomes the beneficial
owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (“1934 Act”)), directly or indirectly, of securities of the Company
(not including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its affiliates) representing
more than twenty percent (20%) of the combined voting power of the Company’s
then outstanding securities, excluding any Person who becomes such a beneficial
owner in connection with a transaction described in Clause (1) of Paragraph
(ii) below; or

 

(ii)           There is consummated a merger or
consolidation of the Company or any direct or indirect subsidiary of the
Company with any other corporation, partnership or other entity, other than (1)
a merger or consolidation that would result in the voting securities of the
Company outstanding immediately prior to that merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its parent) at least sixty
percent (60%) of the combined voting power of the securities of the Company or
the surviving entity or its parent outstanding immediately after the merger or
consolidation, or (2) a

 

19

 

merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or becomes the
beneficial owner, directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such a Person any securities
acquired directly from the Company or its affiliates other than in connection
with the acquisition by the Company or its affiliates of a business)
representing twenty percent (20%) or more of the combined voting power of the
Company’s then outstanding securities; or

 

(iii)          During any period of two (2) consecutive
years, individuals who at the beginning of that period constitute the Board of
Directors and any new director (other than a director whose initial assumption
of office is in connection with an actual or threatened election contest,
including but not limited to a consent solicitation, relating to the election
of directors of the Company) whose appointment or election by the Company’s
stockholders was approved or recommended 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 that period or whose appointment, election, or nomination for
election was previously so approved or recommended cease for any reason to
constitute a majority of the Board of Directors; or

 

(iv)          The stockholders of the Company approve a
plan of complete liquidation or dissolution of the Company or there is
consummated a sale or disposition by the Company of all or substantially all of
the Company’s assets, other than a sale or disposition by the Company of all or
substantially all of the Company’s assets to an entity, at least sixty percent
(60%) of the combined voting power of the voting securities of which are owned
by stockholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to the sale.

 

l.              Change in Control Bonus.  “Change in Control Bonus” has the meaning
set forth in Section 5a(iii)(1).

 

m.            Chief Executive Officer.  “Chief Executive Officer” means the
individual who, at any relevant time, is then serving as the chief executive
officer of the Company.

 

n.             Cinergy.  “Cinergy” means the Company, its subsidiaries, and/or its
affiliates, and any successors to the foregoing.

 

o.             Code.  “Code” means the Internal Revenue Code of
1986, as amended, and interpretive rules and regulations.

 

p.             Company.  “Company” means Cinergy Corp.

 

q.             Date
of Termination.  “Date of
Termination” means:

 

(i)            if the Executive’s employment is terminated
by Cinergy for Cause, or by the Executive with Good Reason, the date of receipt
of the Notice of Termination or any later date specified in the notice, as the
case may be;

 

(ii)           if the Executive’s employment is terminated
by the Executive without Good Reason, thirty (30) days after the date on which
the Executive notifies Cinergy of the termination;

 

20

 

(iii)          if the Executive’s employment is terminated
by Cinergy other than for Cause, thirty (30) days after the date on which
Cinergy notifies the Executive of the termination; and

 

(iv)          if the Executive’s employment is terminated
by reason of death, the date of death.

 

r.              Deferred Compensation Plan.  “Deferred Compensation Plan” means the
Cinergy Corp. Non-Qualified Deferred Incentive Compensation Plan or any similar
plan or successor to that plan.

 

s.             Effective Date.  “Effective Date” has the meaning given to
that term in the first paragraph of this Agreement.

 

t.              Employment Period.  “Employment Period” has the meaning set
forth in Section 1b.

 

u.             Excise Tax.  “Excise Tax” means any excise tax imposed by
Code section 4999, together with any interest, penalties, additional tax
or similar items that are incurred by the Executive with respect to the excise
tax imposed by Code section 4999.

 

v.             Executive.  “Executive” has the meaning given to that
term in the first paragraph of this Agreement.

 

w.            Executive Retirement Plans.  “Executive Retirement Plans” means the
Pension Plan, the Cinergy Corp. Supplemental Executive Retirement Plan and the
Cinergy Corp. Excess Pension Plan or any similar plans or successors to those
plans.

 

x.             Executive Supplemental Life Program.  “Executive Supplemental Life Program” means
the Cinergy Corp. Executive Supplemental Life Insurance Program or any similar
program or successor to the Executive Supplemental Life Program.

 

y.             401(k) Excess Plan.  “401(k) Excess Plan” means the Cinergy Corp.
401(k) Excess Plan, or any similar plan or successor to that plan.

 

z.             Good Reason.  “Good Reason” has the meaning set forth in
Section 4d.

 

aa.           Gross-Up Payment.  “Gross-Up Payment” has the meaning set forth
in Section 5c.

 

bb.          Highest Average Earnings.  “Highest Average Earnings” shall have the
meaning given to such term in the Cinergy Corp. Supplemental Executive
Retirement Plan.  For purposes of
clarity, the parties hereto acknowledge and agree that the Executive’s Highest
Average Earnings for any year shall not include any benefits received by the
Executive pursuant to Section 5 of this Agreement, other than pursuant to
Section 5a(i) of this Agreement.

 

cc.           Long-Term Incentive Plan or LTIP.  “Long-Term Incentive Plan” or “LTIP” means
the long-term incentive plan implemented under the Cinergy Corp. 1996 Long-Term
Incentive Compensation Plan or any successor to that plan.

 

dd.          M&W Plans.  “M&W Plans” has the meaning set forth in
Section 5a(ii)(2).

 

ee.           Maximum Annual Bonus.  “Maximum Annual Bonus” has the meaning set
forth in Section 3b.

 

21

 

ff.            Nonelective Employer Contribution.
“Nonelective Employer Contribution” has the meaning set forth in the 401(k)
Excess Plan.

 

gg.          Notice of Termination.  “Notice of Termination” has the meaning set
forth in Section 4f.

 

hh.          Payment or Payments.  “Payment” or “Payments” has the meaning set
forth in Section 5c.

 

ii.             Pension Plan.  “Pension Plan” means the Cinergy Corp.
Non-Union Employees’ Pension Plan or any successor to that plan.

 

jj.             Person.  “Person” has the meaning set forth in paragraph 3(a)(9) of the
1934 Act, as modified and used in subsections 13(d) and 14(d) of the 1934 Act;
however, a Person will not include the following:

 

(i)            Cinergy or any of its subsidiaries or
affiliates;

 

(ii)           A trustee or other fiduciary holding
securities under an employee benefit plan of Cinergy or its subsidiaries or
affiliates;

 

(iii)          An underwriter temporarily holding securities
pursuant to an offering of those securities; or

 

(iv)          A corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company.

 

kk.           Potential Change in Control.  A “Potential Change in Control” means any
period during which any of the following circumstances exist:

 

(i)            The Company enters into an agreement, the
consummation of which would result in the occurrence of a Change in Control;
provided that a Potential Change in Control shall cease to exist upon the
expiration or other termination of such agreement; or

 

(ii)           The Company or any Person publicly announces
an intention to take or to consider taking actions which, if consummated, would
constitute a Change in Control; provided that a Potential Change in Control
shall cease to exist when the Company or such Person publicly announces that it
no longer has such an intention; or

 

(iii)          Any Person who is or becomes the beneficial
owner (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of
securities of the Company representing ten percent (10%) or more of the
combined voting power of the Company’s then outstanding securities, increases
such Person’s beneficial ownership of such securities by an amount equal to
five percent (5%) or more of the combined voting power of the Company’s then
outstanding securities; or

 

(iv)          The Board of Directors adopts a resolution to
the effect that, for purposes hereof, a Potential Change in Control has
occurred.

 

Notwithstanding anything
herein to the contrary, a Potential Change in Control shall cease to exist not
later than the date that (i) the Board of Directors

 

22

 

determines that the
Potential Change in Control no longer exists, or (ii) a Change in Control
occurs.

 

ll.             Qualifying Termination.  “Qualifying Termination” means (i) the
termination by Cinergy of the Executive’s employment with Cinergy during the
Employment Period other than a termination for Cause or (ii) the termination by
the Executive of the Executive’s employment with Cinergy during the Employment
Period for Good Reason.

 

mm.         Relocation Program.  “Relocation Program” means the Cinergy Corp.
Relocation Program, or any similar program or successor to that program, as in
effect on the date of the Executive’s termination of employment.

 

nn.          Severance Benefits.  “Severance Benefits” means the payments and
benefits payable to the Executive pursuant to Section 5.

 

oo.          Spouse.  “Spouse” means the Executive’s lawfully married spouse.  For this purpose, common law marriage or a
similar arrangement will not be recognized unless otherwise required by federal
law.

 

pp.          Stock Related Documents.  “Stock Related Documents” means the LTIP,
the Cinergy Corp. Stock Option Plan, and the Value Creation Plan and any
applicable administrative guidelines and written agreements relating to those
plans.

 

qq.          Target Annual Bonus.  “Target Annual Bonus” has the meaning set
forth in Section 3b.

 

rr.            Target
LTIP Bonus.  “Target LTIP Bonus” has
the meaning set forth in Section 3b.

 

ss.           Value Creation Plan.  “Value Creation Plan” means the Value
Creation Plan or any similar plan, or successor plan of the LTIP.

 

tt.            Waiver and Release.  “Waiver and Release” means a waiver and
release, in substantially the form attached to this Agreement as Exhibit A.

 

12.          Miscellaneous.

 

a.             This Agreement will be governed by and
construed in accordance with the laws of the State of Ohio, without reference
to principles of conflict of laws.  The
captions of this Agreement are not part of its provisions and will have no
force or effect.  This Agreement may not
be amended, modified, repealed, waived, extended, or discharged except by an
agreement in writing signed by the party against whom enforcement of the
amendment, modification, repeal, waiver, extension, or discharge is
sought.  Only the Chief Executive
Officer or his designee will have authority on behalf of Cinergy to agree to
amend, modify, repeal, waive, extend, or discharge any provision of this
Agreement.

 

b.             All notices and other communications under
this Agreement will be in writing and will be given by hand delivery to the
other party or by Federal Express or other comparable national or international
overnight delivery service, addressed in the name of such party at the
following

 

23

 

address, whichever is applicable:

 

If to the Executive:

Cinergy Corp.

221 East Fourth Street

Cincinnati, Ohio 45201-0960

 

If to Cinergy:

Cinergy Corp.

221 East Fourth Street

Cincinnati, Ohio 45201-0960

Attn: Chief Executive Officer

 

or to such other address as either party has furnished to the other in
writing in accordance with this Agreement. 
All notices and communications will be effective when actually received
by the addressee.

 

c.             The invalidity or unenforceability of any
provision of this Agreement will not affect the validity or enforceability of
any other provision of this Agreement.

 

d.             Cinergy may withhold from any amounts
payable under this Agreement such federal, state, or local taxes as are
required to be withheld pursuant to any applicable law or regulation.

 

e.             The Executive’s or Cinergy’s failure to
insist upon strict compliance with any provision of this Agreement or the
failure to assert any right the Executive or Cinergy may have under this
Agreement, including without limitation the right of the Executive to terminate
employment for Good Reason pursuant to Section 4d or the right of Cinergy
to terminate the Executive’s employment for Cause pursuant to Section 4b,
will not be deemed to be a waiver of that provision or right or any other
provision or right of this Agreement.

 

f.              References in this Agreement to the
masculine include the feminine unless the context clearly indicates otherwise.

 

g.             This instrument contains the entire
agreement of the Executive and Cinergy with respect to the subject matter of
this Agreement; and subject to any agreements evidencing stock option or
restricted stock grants described in Section 3b and the Stock Related
Documents, all promises, representations, understandings, arrangements, and
prior agreements are merged into this Agreement and accordingly superseded.

 

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

 

i.              Cinergy and the Executive agree that
Cinergy Services, Inc. will be authorized to act for Cinergy with respect to
all aspects pertaining to the administration and interpretation of this
Agreement.

 

24

 

IN WITNESS WHEREOF, the Executive
and the Company have caused this Agreement to be executed as of the Effective
Date.

 

	
   

  	
   

  	
  CINERGY SERVICES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ James E. Rogers

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  James E. Rogers

  
	
   

  	
   

  	
   

  	
  Chairman and

  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Marc E. Manly

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Marc E. Manly 

  
					

 

25

 

EXHIBIT A

 

*****

 

WAIVER AND RELEASE AGREEMENT

 

THIS WAIVER AND RELEASE AGREEMENT (this “Waiver and Release”) is entered into by and between
Marc E. Manly (the “Executive”) and Cinergy Corp.  (“Cinergy”) (collectively, the “Parties”).

 

WHEREAS,
the Parties have entered into the Employment Agreement dated
                                  
(the “Employment Agreement”);

 

WHEREAS,
the Executive’s employment has been terminated in accordance with the terms of
the Employment Agreement;

 

WHEREAS,
the Executive is required to sign this Waiver and Release in order to receive
the payment of certain compensation under the Employment Agreement following
termination of employment; and

 

WHEREAS,
Cinergy has agreed to sign this Waiver and Release.

 

NOW, THEREFORE, in consideration of the promises and agreements contained
herein and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, and intending to be legally bound, the
Parties agree as follows:

 

1.             This Waiver and
Release is effective on the date hereof and will continue in effect as provided
herein.

 

2.             In consideration of
the payments to be made and the benefits to be received by the Executive
pursuant to Section 5 of the Employment Agreement (the “Severance
Benefits”), which the Executive acknowledges are in addition to payment and
benefits to which the Executive would be entitled to but for the Employment
Agreement, the Executive, on behalf of himself, his heirs, representatives, agents
and assigns hereby COVENANTS NOT TO SUE OR OTHERWISE VOLUNTARILY PARTICIPATE IN
ANY LAWSUIT AGAINST, FULLY RELEASES, INDEMNIFIES, HOLDS HARMLESS, and OTHERWISE
FOREVER DISCHARGES (i) Cinergy, (ii) its subsidiary or affiliated entities,
(iii) all of their present or former directors, officers, employees,
shareholders, and agents as well as (iv) all predecessors, successors and
assigns thereof (the persons listed in clauses (i) through (iv) hereof shall be
referred to collectively as the “Company”) from any and all actions, charges,
claims, demands, damages or liabilities of any kind or character whatsoever,
known or unknown, which Executive now has or may have had through the effective
date of this Waiver and Release. 
Executive acknowledges and understands that he is not hereby prevented
from filing a charge of discrimination with the Equal Employment Opportunity
Commission or any state-equivalent agency or otherwise participate in any
proceedings before such Commissions. 
Executive also acknowledges and understands that in the event he does
file such a charge, he shall be entitled to no remuneration,

 

26

 

damages, back pay, front pay, or compensation
whatsoever from the Company as a result of such charge.

 

3.             Without limiting the
generality of the foregoing release, it shall include:  (i) all claims or potential claims arising
under any federal, state or local laws relating to the Parties’ employment
relationship, including any claims Executive may have under the Civil Rights
Acts of 1866 and 1964, as amended, 42 U.S.C. §§ 1981 and 2000(e) et
seq.; the Civil Rights Act of 1991; the Age Discrimination in Employment
Act, as amended, 29 U.S.C. §§ 621 et  seq.; the Americans
with Disabilities Act of 1990, as amended, 42 U.S.C. §§ 12,101 et  seq.;
the Fair Labor Standards Act, 29 U.S.C. §§ 201 et  seq.; the
Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101, et
seq.; the Ohio Civil Rights Act, Chapter 4112 et  seq.; and
any other federal, state or local law governing the Parties’ employment
relationship; (ii) any claims on account of, arising out of or in any way
connected with Executive’s employment with the Company or leaving of that
employment; (iii) any claims alleged or which could have been alleged in any
charge or complaint against the Company; (iv) any claims relating to the
conduct of any employee, officer, director, agent or other representative of
the Company; (v) any claims of discrimination or harassment on any basis; (vi)
any claims arising from any legal restrictions on an employer’s right to
separate its employees; (vii) any claims for personal injury, compensatory or
punitive damages or other forms of relief; and (viii) all other causes of
action sounding in contract, tort or other common law basis, including: (a) the
breach of any alleged oral or written contract; (b) negligent or intentional
misrepresentations; (c) wrongful discharge; (d) just cause dismissal; (e)
defamation; (f) interference with contract or business relationship; or (g)
negligent or intentional infliction of emotional distress.

 

4.             The Parties
acknowledge that it is their mutual and specific intent that the above waiver
fully complies with the requirements of the Older Workers Benefit Protection
Act (29 U.S.C. § 626) and any similar law governing release of
claims.  Accordingly, Executive hereby
acknowledges that:

 

(a)           He has carefully read
and fully understands all of the provisions of this Waiver and Release and that
he has entered into this Waiver and Release knowingly and voluntarily after
extensive negotiations and having consulted with his counsel;

 

(b)           The Severance Benefits
offered in exchange for Executive’s release of claims exceed in kind and scope
that to which he would have otherwise been legally entitled;

 

(c)           Prior to signing this
Waiver and Release, Executive had been advised in writing by this Waiver and
Release as well as other writings to seek counsel from, and has in fact had an
opportunity to consult with, an attorney of his choice concerning its terms and
conditions; and

 

(d)           He has been offered at
least twenty-one (21) days within which to review and consider this Waiver and
Release.

 

5.             The Parties agree
that this Waiver and Release shall not become effective and enforceable until
the date this Waiver and Release is signed by both Parties or seven (7)
calendar days after its execution by Executive, whichever is later.  Executive may revoke this Waiver and Release
for

 

27

 

any reason by providing written notice of
such intent to Cinergy within seven (7) days after he has signed this Waiver
and Release, thereby forfeiting Executive’s right to receive any Severance
Benefits provided hereunder and rendering this Waiver and Release null and void
in its entirety.

 

6.             The Executive hereby
affirms and acknowledges his continued obligations to comply with the
post-termination covenants contained in his Employment Agreement, including but
not limited to, the Confidential Information provisions of Section 9 of
the Employment Agreement.  Executive
acknowledges that the restrictions contained therein are valid and reasonable
in every respect, are necessary to protect the Company’s legitimate business
interests and hereby affirmatively waives any claim or defense to the contrary.

 

7.             Executive
specifically agrees and understands that the existence and terms of this Waiver
and Release are strictly CONFIDENTIAL and that such confidentiality is a
material term of this Waiver and Release. 
Accordingly, except as required by law or unless authorized to do so by
Cinergy in writing, Executive agrees that he shall not communicate, display or
otherwise reveal any of the contents of this Waiver and Release to anyone other
than his spouse, primary legal counsel or financial advisor, provided, however,
that they are first advised of the confidential nature of this Waiver and
Release and Executive obtains their agreement to be bound by the same.  Cinergy agrees that Executive may respond to
legitimate inquiries regarding his employment with Cinergy by stating that he
voluntarily resigned to pursue other opportunities, that the Parties terminated
their relationship on an amicable basis and that the Parties have entered into
a confidential Waiver and Release that prohibits him from further discussing
the specifics of his separation. 
Nothing contained herein shall be construed to prevent Executive from
discussing or otherwise advising subsequent employers of the existence of any
obligations as set forth in his Employment Agreement.  Further, nothing contained herein shall be construed to limit or
otherwise restrict the Company’s ability to disclose the terms and conditions
of this Waiver and Release as may be required by business necessity.

 

8.             In the event that
Executive breaches or threatens to breach any provision of this Waiver and
Release, he agrees that Cinergy shall be entitled to seek any and all equitable
and legal relief provided by law, specifically including immediate and
permanent injunctive relief.  Executive
hereby waives any claim that Cinergy has an adequate remedy at law.  In addition, and to the extent not
prohibited by law, Executive agrees that Cinergy shall be entitled to an award
of all costs and attorneys’ fees incurred by Cinergy in any successful effort
to enforce the terms of this Waiver and Release.  Executive agrees that the foregoing relief shall not be construed
to limit or otherwise restrict Cinergy’s ability to pursue any other remedy
provided by law, including the recovery of any actual, compensatory or punitive
damages.  Moreover, if Executive pursues
any claims against the Company subject to the foregoing Waiver and Release,
Executive agrees to immediately reimburse the Company for the value of all
benefits received under this Waiver and Release to the fullest extent permitted
by law.

 

9.             Cinergy hereby
releases the Executive, his heirs, representatives, agents and assigns from any
and all known claims, causes of action, grievances, damages and demands of any
kind or nature based on acts or omissions committed by the Executive during and
in the course of his employment with Cinergy provided such act or omission was
committed in good faith and occurred within the scope of his normal duties and
responsibilities.

 

28

 

10.           The Parties acknowledge
that this Waiver and Release is entered into solely for the purpose of ending
their employment relationship on an amicable basis and shall not be construed
as an admission of liability or wrongdoing by either Party and that both
Cinergy and Executive have expressly denied any such liability or wrongdoing.

 

11.           Each of the promises
and obligations shall be binding upon and shall inure to the benefit of the
heirs, executors, administrators, assigns and successors in interest of each of
the Parties.

 

12.           The Parties agree that
each and every paragraph, sentence, clause, term and provision of this Waiver
and Release is severable and that, if any portion of this Waiver and Release
should be deemed not enforceable for any reason, such portion shall be stricken
and the remaining portion or portions thereof should continue to be enforced to
the fullest extent permitted by applicable law.

 

13.           This Waiver and Release
shall be governed by and interpreted in accordance with the laws of the State
of Ohio without regard to any applicable state’s choice of law provisions.

 

14.           Executive represents
and acknowledges that in signing this Waiver and Release he does not rely, and
has not relied, upon any representation or statement made by Cinergy or by any
of Cinergy’s employees, officers, agents, stockholders, directors or attorneys
with regard to the subject matter, basis or effect of this Waiver and Release
other than those specifically contained herein.

 

15.           This Waiver and Release
represents the entire agreement between the Parties concerning the subject
matter hereof, shall supercede any and all prior agreements which may otherwise
exist between them concerning the subject matter hereof (specifically
excluding, however, the post-termination obligations contained in any existing
Employment Agreement or other legally-binding document), and shall not be
altered, amended, modified or otherwise changed except by a writing executed by
both Parties.

 

16.           Cinergy Corp. and the
Executive agree that Cinergy Services, Inc. will be authorized to act for
Cinergy Corp. with respect to all aspects pertaining to the administration and
interpretation of this Waiver and Release.

 

29

 

PLEASE READ CAREFULLY.  WITH RESPECT TO THE EXECUTIVE, THIS

 

WAIVER AND RELEASE INCLUDES A COMPLETE
RELEASE OF ALL KNOWN

 

AND UNKNOWN CLAIMS.

 

 

IN WITNESS WHEREOF, the Parties
have themselves signed, or caused a duly authorized agent thereof to sign, this
Waiver and Release on their behalf and thereby acknowledge their intent to be
bound by its terms and conditions.

 

	
  EXECUTIVE

  	
  CINERGY SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signed: 

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
  Printed: Marc E. Manly

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  Dated:

  	
   

  
										

 

30

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