Second Amendment to the Amended and Restated Separation
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and Retirement Agreement and Waiver and Release of Liability
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Cinergy Corp. and Xxxxx X. Xxxxxx (the "Parties") entered into the Amended
and Restated Separation and Retirement Agreement and Waiver and Release of
Liability dated February 15, 2002 (the "Separation Agreement"). The Parties now
desire to amend the Separation Agreement through the adoption of this Amendment,
which is effective as of February 15, 2002, with the mutual exchange of promises
as consideration. Capitalized words and terms used throughout this Amendment
that are not defined elsewhere in this Amendment shall have the meaning given to
them in the Separation Agreement.
1. Section 2k of the Separation Agreement is hereby amended by adding the
following at the end thereof:
"The amount of the benefit provided to the Executive pursuant to this
Section 2k shall not be actuarially reduced for early commencement.
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 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 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 the Pension Plan, the Cinergy Corp. Excess Pension
Plan 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 the Pension Plan, the Cinergy Corp. Excess Pension
Plan 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.
(F) For purposes of Section 2k, the calculation of the Executive's Highest
Average Earnings shall take into account the amount of any Nonelective
Employer Contributions made on behalf of the Executive under the
Cinergy Corp. 401(k) Excess Plan."
2. Section 22 of the Separation Agreement is hereby amended by adding the
following at the end thereof:
"l. Change in Control. A "Change in Control" of the Company will be deemed
to have occurred if any of the following events occur:
(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 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
of the Company 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 of the Company; 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.
m. 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 of the Company 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 of the Company determines that the Potential Change
in Control no longer exists, or (ii) a Change in Control occurs.
n. 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: (1) the
Company or any of its subsidiaries or affiliates; (2) a trustee or
other fiduciary holding securities under an employee benefit plan of
the Company or any of its subsidiaries or affiliates; (3) an
underwriter temporarily holding securities pursuant to an offering of
those securities; or (4) 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."
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
as of the effective date set forth above.
CINERGY CORP. Xxxxx X. Xxxxxx
By:
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Xxxxxx X. Xxxxxxxxx Executive
By:
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Xxxxxxx X. Xxxxxxxx
