EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made and entered into as of the 24th day of October,
1994, by and among Cinergy Corp., a Delaware Corporation ("Cinergy"), Cinergy
Services, Inc., a Delaware Corporation ("Cinergy Services"), The Cincinnati
Gas & Electric Company, an Ohio Corporation ("CG&E"), PSI Energy, Inc., an
Indiana Corporation ("PSI"), and J. Wayne Leonard (the "Executive"). Cinergy,
Cinergy Services, CG&E, and PSI will sometimes be referred to in this
Employment Agreement collectively as the "Corporation".
WHEREAS, the Corporation desires that the Executive become an employee in
accordance with this Employment Agreement;
WHEREAS, the Executive is willing to commit himself to the employ of the
Corporation and any successor thereto, on the terms and conditions set forth
in this Employment Agreement and thus to forego opportunities elsewhere; and
WHEREAS, the parties desire to enter into this Employment Agreement as of
the date first set forth above setting forth the terms and conditions for the
employment relationship of the Executive;
NOW, THEREFORE, IN CONSIDERATION of the mutual premises, covenants and
agreements set forth below, it is hereby agreed as follows:
1. Employment and Term.
a. The Corporation agrees to employ the Executive, and the Executive
agrees to be employed, in accordance with the terms and provisions
of this Employment Agreement for the period set forth below (the
"Employment Period").
b. The Employment Period of the Executive as provided in Section 1(a)
will commence on October 24, 1994 (the "Effective Date") and shall
continue until December 31, 1997; provided, however, commencing on
January 1, 1996, and each January 1 thereafter (the "Renewal
Date"), the Employment Period of this Employment Agreement may
automatically be extended for one (1) additional year if the
Corporation shall have given notice to the Executive of its intent
to extend this Employment Agreement prior to such Renewal Date and
the Executive shall not have objected to such extension in writing
within ten (10) business days of receipt of such notice.
2. Duties and Powers of Executive.
a. Position. The Executive shall serve the Corporation in such
responsible executive capacity or capacities as the Board of
Directors of Cinergy or Cinergy Services (the Board of Directors
of Cinergy or Cinergy Services, as the case may be, may be
referred to sometimes as the "Board") or the Chief Executive
Officer of Cinergy or the Chief Operating Officer of Cinergy may
from time to time determine and shall have such responsibilities,
duties and authority as may be assigned to him from time to time
during the Employment Period by the Board or the Chief Executive
Officer of Cinergy or the Chief Operating Officer of Cinergy that
are consistent with such responsibilities, duties and authority.
Upon the Effective Date of this Employment Agreement, the
Executive shall initially serve as Group Vice President and Chief
Financial Officer for the Corporation, but consistent with the
foregoing provisions of this Section 2(a), may be assigned to any
other position or positions by either the Board or the Chief
Executive Officer of Cinergy or the Chief Operating Officer of
Cinergy during the Employment Period.
b. Place of Performance. In connection with the Executive's employment, the
Executive shall be based at the principal executive offices of the
Corporation, 221 East Fourth Street, Cincinnati, Ohio, and, except for
required business travel to an extent substantially consistent with the
present business travel obligations of executives of the Corporation who
have positions of authority comparable to that of the Executive, the
Executive shall not be required to relocate to a new principal place of
business which is more that thirty (30) miles from the current principal
place of business of the Corporation.
3. Compensation. The Executive shall receive the following compensation for
his services under this Employment Agreement.
a. Salary. The Executive's annual base salary (the "Annual Base
Salary"), payable not less often than semi-monthly, shall be at the
annual rate of not less than $250,000.00. The Board may, from time
to time, direct such upward adjustments in the Annual Base Salary as
the Board deems to be necessary or desirable, including without
limitation adjustments in order to reflect increases in the cost of
living. Any increase in the Annual Base Salary shall not serve to
limit or reduce any other obligation of the Corporation under this
Employment Agreement. The Annual Base Salary shall not be reduced
after any increase thereof except for across-the-board salary
reductions similarly affecting all management personnel of Cinergy,
Cinergy Services, PSI or CG&E.
b. Retirement, Incentive, Welfare Benefit Plans and Other Benefits.
During the Employment Period and so long as the Executive is employed
by the Corporation, the Executive shall be eligible, and the
Corporation shall take such actions as may be necessary or required
to cause the Executive to become eligible, to participate in all
short-term and long-term incentive, stock option, restricted stock,
performance unit, savings, retirement and welfare plans, practices,
policies and programs applicable generally to employees and/or other
senior executives of the Corporation, including but not limited to
Cinergy's Annual Incentive Plan, Cinergy's Performance Shares Plan,
Cinergy's Executive Supplemental Life Insurance Program, Cinergy's
Stock Option Plan, PSI's Pension Plan and PSI's Excess Benefit Plan,
or any successors thereto, except with respect to any plan, practice,
policy or program to which the Executive has waived his rights in
writing.
c. Fringe Benefits and Perquisites. During the Employment Period and so
long as the Executive is employed by the Corporation, the Executive
shall be entitled to the following additional fringe benefits:
(i) The Corporation shall furnish to the Executive an automobile
and shall pay all of the related expenses for gasoline, insurance,
maintenance and repairs,
(ii) The Corporation shall pay the initiation fee and the annual
dues, assessments and other membership charges of the Executive for
membership charges of the Executive for membership in a country club
selected by the Executive,
(iii) The Corporation shall provide paid vacation for four (4) weeks
per year (or longer if permitted by the Corporation's policy), and
(iv) The Corporation shall furnish to the Executive annual financial
planning and tax preparation services. In addition, the Executive shall
be entitled to receive such other fringe benefits in accordance with the
plans, practices, programs and policies of the Corporation from time to
time in effect, commensurate with his position and at least comparable
to those received by other senior executives of the Corporation.
d. Expenses. The Corporation 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 Employment
Agreement in accordance with the policies established from time to time
by the Board.
e. Relocation Benefits. The Executive shall be entitled to reimbursement
from the Corporation pursuant to the terms of the Corporation Relocation
Program in effect as of the day and year first written above, as well as
all actual expenses for temporary housing until such time as he has
moved into a new primary residence in the general area of the
Corporation's principal corporate office located in Cincinnati, Ohio.
The expenses described in this Section shall be "grossed up" to provide
for adverse tax consequences to the Executive.
4. Termination of Employment.
a. Death. The Executive's employment shall terminate automatically upon
the Executive's death during the Employment Period.
b. By the Corporation for Cause. The Corporation may terminate the
Executive's employment during the Employment Period for Cause. For
purposes of this Employment Agreement, "Cause" shall mean:
(i) The willful and continued failure by the Executive to substantially
perform the Executive's duties with the Corporation (other than any such
failure resulting from Executive's incapacity due to physical or mental
illness or any such actual or anticipated failure after the issuance of a
Notice of Termination for Good Reason by the Executive pursuant to
Section 4(c) after a written demand for substantial performance is
delivered to the Executive by the Board, which demand specifically
identifies the manner in which the Board believes that the Executive has
not substantially performed the Executive's duties, or
(ii) The breach by the Executive of the confidentiality provisions set
forth in Section 8 of this Employment Agreement, or
(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 the Corporation. For purposes of this
definition of "Cause", no act, or failure to act, on the Executive's part
shall be deemed "willful" unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the Executive's
act, or failure to act, was in the best interest of the Corporation.
Notwithstanding the above definition of "Cause", the Corporation may terminate
the Executive's employment during the Employment Period for a reason other
than Cause, but the obligations placed upon the Corporation in Section 5 shall
apply.
c. By the Executive for Good Reason. The Executive may terminate his
employment during the Employment Period for Good Reason. For purposes of
this Employment Agreement, "Good Reason" shall mean:
(i) The reduction in the Executive's Annual Base Salary as
specified in Section 3(a) of this Employment Agreement, or any
other benefit or payment described in Section 3 of this Employment
Agreement, except for across-the-board salary reductions similarly
affecting all management personnel of Cinergy, Cinergy Services,
CG&E, and PSI, and changes to the employee benefits programs
affecting all management personnel of those Corporations, provided
that such changes (either individually or in the aggregate) will
not result in a material adverse change with respect to the
benefits which the Executive was entitled to receive as of the
Effective Date;
(ii) The material reduction without his consent of the Executive's
title, authority, duties or responsibilities from those in effect
immediately prior to the reduction;
(iii) Any breach by the Corporation of any other material
provision (including but not limited to the place of performance
as specified in Section 2(b);
(iv) The Executive's disability due to physical or mental illness
or injury which precludes the Executive from performing any job
for which he is qualified and able to perform based upon his
education, training or experience; or
(v) Any event which constitutes a "Change in Control" as defined
in Section 4(f) of this Employment Agreement.
d. Notice of Termination. Any termination by the Corporation for
cause, or by the Executive for Good Reason, shall be communicated by
Notice of Termination to the other party to this Employment Agreement
given in accordance with Section 10(b) of this Employment Agreement.
For purposes of this Employment Agreement, a "Notice of Termination"
means a written notice which:
(i) Indicates the specific termination provision in this
Employment Agreement relied upon,
(ii) To the extent applicable, sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so
indicated, and
(iii) If the Date of Termination (as defined in Section 4(e)) is
other than the date of receipt of such notice, specifies the
termination date (which date shall be not more than thirty (30)
days after the giving of such notice). The failure by the
Executive or the Corporation to set forth in the Notice of
Termination any fact or circumstances which contributes to a
showing of Good Reason or Cause shall not waive any right of the
Executive or the Corporation under this Employment Agreement or
preclude the Executive or the Corporation from asserting such fact
or circumstances in enforcing the Executive's or the
Corporation's rights under this Employment Agreement.
e. Date of Termination. "Date of Termination" means:
(i) If the Executive's employment is terminated by the
Corporation for Cause, or by the Executive for Good Reason, the
date of receipt of the Notice of Termination or any later date
specified therein, as the case may be,
(ii) If the Executive's employment is terminated by the
Corporation other than for Cause, the date on which the
Corporation notifies the Executive of such termination, and
(iii) If the Executive's employment is terminated by reason of
death, the date of death.
f. Change in Control. A "Change in Control" shall be deemed to have
occurred if any of the following events occur after the Effective Date:
(i) Any corporation, person, other entity or group becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934) of more than fifty percent (50%) of the
then outstanding voting stock of Cinergy otherwise than through a
transaction arranged by, or consummated with, the prior approval
of the Board;
(ii) The shareholders of Cinergy approve a definite agreement to
merge or consolidate with or into another corporation in a
transaction in which neither Cinergy nor any of its subsidiaries
or affiliates will be the surviving corporation, or to sell or
otherwise dispose of all or substantially all of Cinergy's assets
to any person or group other than Cinergy or any of its
subsidiaries or affiliates, other than a merge or a sale which
will result in the voting securities of Cinergy outstanding prior
to the merger or sale continuing to represent at least fifty
percent (50%) of the combined voting power of the voting
securities of the corporation surviving the merger or purchasing
the assets; or
(iii) During any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the
Board of Directors of Cinergy (and any new director whose election
by the Board of Directors of Cinergy or whose nomination for
election by Cinergy's stockholders was approved by a vote of at
least two thirds (2/3) of the directors then still in office who
either were directors at the beginning of such period or whose
election or nomination for election was previously so approved)
cease for any reason to constitute a majority of Cinergy's Board
of Directors.
g. Person. "Person" shall have the meaning given in Section 3(a)(9)
of the Securities Exchange Act of 1934, as modified and used in Sections
13(d) and 14(d) thereof; however, a Person shall not include:
(i) The Corporation or any of its subsidiaries,
(ii) A trustee or other fiduciary holding securities under an
employee benefit plan of Cinergy or any of its subsidiaries,
(iii) An underwriter temporarily holding securities pursuant to
an offering of such securities, or
(iv) A corporation owned, directly or indirectly, by the
stockholders of Cinergy in substantially the same proportions as
their ownership of stock of the Corporation.
5. Obligations of the Corporation Upon Termination.
a. Certain Terminations. During the Employment Period, if the
Corporation shall terminate the Executive's employment (other than in
the case of a termination for Cause), the Executive shall terminate his
employment for Good Reason or the Executive's employment shall terminate
by reason of death (termination in any such case referred to as
"Termination"):
(i) The Corporation shall pay to the Executive a lump sum amount,
in case, equal to the sum of:
(1) the Executive's Annual Base Salary through the Date of
Termination to the extent not previously paid,
(2) an amount equal to the Cinergy Annual Incentive Plan
target percentage benefit for the fiscal year that includes
the Date of Termination multiplied by a fraction the
numerator of which shall be the number of days from the
beginning of such fiscal year to and including the Date of
Termination and the denominator of which shall be three
hundred and sixty-five (365),
(3) an amount equal to his vested accrued benefit under
the Cinergy Performance Shares Plan, and
(4) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon) and
any accrued vacation pay, in each case to the extent not
previously paid.
(The amounts specified in clauses (1), (2), (3) and
(4) shall be referred to in this Employment Agreement
as the "Accrued Obligations".) The amounts
specified in this Section 5(a)(i) shall be paid
within thirty (30) days after the Date of
Termination. The Accrued Obligations described in
this Section are payable to the Executive regardless
of whether a Change in Control has occurred.
(ii) Prior to the occurrence of a Change in Control, and in the
event of Termination other than by reason of the Executive's death,
then:
(1) the Corporation shall pay to the Executive a lump sum
amount, in cash, equal to the present value discounted using an
interest rate equal to the prime rate promulgated by CitiBank,
N.A. and in effect as of the Date of Termination (the "Prime
Rate") of the Annual Base Salary, and the Cinergy Annual
Incentive Plan target percentage payable through the end of the
Employment Period, each at the rate, and using the same goals
and factors, in effect at the time Notice of Termination is
given, and paid within thirty (30) days of the Date of
Termination;
(2) the Corporation shall pay to the Executive the present
value (discounted at the Prime Rate) of all amounts to which
the Executive would have been entitled had he remained in
employment with the Corporation until the end of the
Employment Period, each, where applicable, at the rate of the
Annual Base Salary, and using the same goals and factors, in
effect at the time Notice of Termination is given, under the
Cinergy Performance Shares Plan and the Cinergy Executive
Supplemental Life Insurance Program minus the present value
(discounted at the Prime Rate) of the benefits to which he is
actually entitled under the above mentioned plans and
programs;
(3) the Corporation shall pay the value of all deferred
compensation amounts and all executive life insurance benefits
whether or not then vested or payable; and
(4) the Corporation shall continue, until the end of the
Employment Period, medical and welfare benefits to the Executive
and/or the Executive's family at least equal to those which 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), such benefits to be in accordance with the most
favorable medical and welfare benefit plans, practices, programs or
policies (the "M&W Plans") of the Corporation as in effect and
applicable generally to other senior executives of the Corporation
and their families during the ninety (90) day period immediately
preceding the Date of Termination; provided, however, that if the
Executive becomes employed with another employer and is eligible to
receive medical or other welfare benefits under another employer-
provided plan, the benefits under the M&W Plans shall be secondary
to those provided under such other plan during such applicable
period of eligibility.
(iii) From and after the occurrence of a Change in Control and
in the event of Termination other than by reason of the Executive's
death, then in lieu of any further salary payments to the Executive
for periods subsequent to the Date of Termination and in lieu of
any other benefits payable pursuant to Section 5(a)(ii) of this
Employment Agreement:
(1) The Corporation shall pay to the Executive a lump sum
severance payment, in cash, equal to the greater of:
(A) the present value of all amounts and benefits
that would have been due under Sections 5(a)(ii) of
this Employment Agreement, excluding Section
5(a)(ii)(4), and
(B) three (3) times the sum of (x) the higher of the
Executive's Annual Base Salary in effect immediately
prior to the occurrence of the event or circumstance
upon which the Notice of Termination is based or in
effect immediately prior to the Change in Control, and
(y) the higher of the amount paid to the Executive
pursuant to all incentive compensation or bonus plans
or programs maintained by the Corporation, in the year
preceding that in which the Date of Termination occurs
or in the year preceding that in which the Change in
Control occurs; and
(2) For a thirty-six (36) month period after the Date of
Termination, the Corporation shall arrange to provide the
Executive with life, disability, accident and health
insurance benefits substantially similar to those which the
Executive is receiving immediately prior to the Notice of
Termination (without giving effect to any reduction in such
benefits subsequent to a Change in Control which reduction
constitutes Good Reason), except for any benefits that were
waived by the Executive in writing. Benefits otherwise
receivable by the Executive pursuant to this Section
5(a)(iii)(2) shall be reduced to the extent comparable
benefits are actually received by or made available to the
Executive without cost during the thirty-six (36) month
period following the Executive's termination of employment
(and any such benefits actually received by the Executive
shall be reported to the Corporation by the Executive).
The Executive's employment shall be deemed to have been terminated following a
Change in Control of Cinergy without Cause or by the Executive for Good Reason
if, in addition to all other applicable Terminations, 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 or any of
its subsidiaries or affiliates, 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 which
constitutes Good Reason occurs at the direction of such Person.
b. Termination by the Corporation for Cause or by the Executive
Other Than for Good Reason. Subject to the provisions of Section
7 of this Employment Agreement, if the Executive's employment
shall be terminated for Cause during the Employment Period, or if
the Executive terminates employment during the Employment Period
other than a termination for Good Reason, the Corporation shall
have no further obligations to the Executive under this Employment
Agreement other than the obligation to pay to the Executive the
Accrued Obligations and the amounts determined under Section 5(c),
plus any other earned but unpaid compensation, in each case to the
extent not previously paid.
c. Retirement Benefits on Termination. In addition to
retirement benefits under PSI's Pension Plan and PSI's Excess
Benefit Plan, or any successors thereto, the Executive shall also
be eligible to participate in any supplemental executive
retirement plan (commonly referred to as a "SERP") sponsored by
the Corporation.
d. Survival of Section 5(c). The provisions of Section 5(c)
shall survive the expiration or termination of this Employment
Agreement for any reason.
e. Certain Tax Consequences. In the event that the Executive
becomes entitled to the payments and benefits described in
this Section 5 (the "Severance Benefits"), if any of the
Severance Benefits will be subject to any excise tax (the "Excise
Tax") imposed under Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code"), the Corporation shall pay to the
Executive an additional amount (the "Gross-Up Payment") such that
the net amount retained by the Executive, after deduction of an
Excise Tax on the Severance Benefits and any federal, state and
local income and employment tax and Excise Tax upon the payment
provided for by this Section 5, shall be equal to the Severance
Benefits. For purposes of determining whether any of the
Severance Benefits will be subject to the Excise Tax and the
amount of such Excise Tax,
(i) any other payments or benefits received or to be received by
the Executive in connection with a Change in Control or the
Executive's termination of employment (whether pursuant to the
terms of this Employment Agreement or any other plan, arrangement
or agreement with the Corporation, any Person whose actions result
in a Change in Control or any Person affiliated with the
Corporation or such Person) shall be treated as "parachute
payments" within the meaning of Section 280G(b)(2) of the Code,
and all "excess parachute payments" within the meaning of Section
280G(b)(1) of the Code shall be treated as subject to the Excise
Tax, unless in the opinion of tax counsel selected by the
Corporation's independent auditors and reasonably acceptable to
the Executive such other payments or benefits (in whole or in
part) do not constitute parachute payments, including by reason of
Section 280G(b)(4)(A) of the Code, or such excess parachute
payments (in whole or in part) represent reasonable compensation
for services actually rendered, within the meaning of Section
280G(b)(4)(B) of the Code, in excess of the Base Amount as
defined in Section 280G(b)(3) of the Code allocable to such
reasonable compensation, or are otherwise not subject to the
Excise Tax,
(ii) the amount of the Severance Benefits that shall be treated as
subject to the Excise Tax shall be equal to the lesser of
(1) the total amount of the Severance Benefits, or
(2) the amount of excess parachute payments within the meaning of
Section 280G(b)(1) of the Code (after applying clause (i), above), and
(iii) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Corporation's independent auditors
in accordance with the principles of Section 280G(d)(3) and (4) of
the Code. For purposes of determining the amount of the Gross-Up
Payment, the Executive shall 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 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 which would be
obtained from deduction of such state and local taxes. 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 Corporation,
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 Section 1274(b)(2)(B) of the Code.
In the event that the Excise Tax is determined to exceed the amount
taken into account hereunder at the time of the termination of the
Executive's employment (including by reason of any payment the
existence or amount of which cannot be determined at the time of the
Gross-Up Payment), the Corporation shall make an additional Gross-Up
Payment in respect of such excess (plus any interest, penalties or
additions payable by the Executive with respect to such excess) at
the time that the amount of such excess is finally determined. The
Executive and the Corporation shall each reasonably cooperate with
the other in connection with any administrative or judicial
proceedings concerning the existence or amount of liability for
Excise Tax with respect to the Severance Benefits.
f. Other Fees and Expenses. The Corporation also shall pay to the
Executive all legal fees and expenses incurred by the Executive as a
result of a termination which entitles the Executive to the
Severance Benefits (including all such fees and expenses, if any,
incurred in disputing any such termination or in seeking in good
faith to obtain or enforce any benefit or right provided by this
Employment Agreement). Such payments shall be made within five (5)
business days after delivery of the Executive's written requests for
payment accompanied with such evidence of fees and expenses incurred
as the Corporation reasonably may require.
6. Non-exclusivity of Rights. Nothing in this Employment Agreement
shall prevent or limit the Executive's continuing or future participation
in any benefit, plan, program, policy or practice provided by the
Corporation and for which the Executive may qualify (except with respect
to any benefit to which the Executive has waived his rights in writing),
nor shall anything herein limit or otherwise affect such rights as the
Executive may have under any other contract or agreement entered into
after the date hereof with the Corporation. Amounts which are vested
benefits or which 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 date hereof with, the Corporation at or
subsequent to the Date of Termination, shall be payable in accordance
with such benefit, plan, program, policy or practice, or contract or
agreement, except as explicitly modified by this Employment Agreement.
7. Full Settlement: Mitigation. Except as provided in Sections
5(a)(ii)(4) and 5(a)(iii)(2) of this Employment Agreement, the
Corporation's obligation to make the payments provided for in this
Employment Agreement and otherwise to perform its obligations under this
Employment Agreement shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Corporation
may have against the Executive or others. In no event shall 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
Employment Agreement and such amounts shall not be reduced whether or not
the Executive obtains other employment. If the Executive finally
prevails with respect to any dispute between the Corporation, the
Executive or others as to the interpretation, terms, validity or
enforceability of (including any dispute about the amount of any payment
pursuant to) this Employment Agreement, the Corporation agrees to pay all
legal fees and expenses which the Executive may reasonably incur as a
result of any such dispute.
8. Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of Cinergy, all of its subsidiary companies and
affiliates, as well as all successors and assigns thereof (the "Cinergy
Companies"), all secret, confidential information, knowledge or data
relating to the Cinergy Companies, and their respective businesses, that
shall have been obtained by the Executive during the Executive's
employment by the Corporation and that shall not have been or now or
subsequently have become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this
Employment Agreement). During the Employment Period and thereafter, the
Executive shall not, without the prior written consent of the Corporation
or as may otherwise by required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the
Corporation and those designated by it. The Executive understands that
during the Employment Period, the Cinergy Companies may be required from
time to time to make public disclosure of the terms or existence of the
Executive's employment relationship in order to comply with various laws
and legal requirements. In addition to all other remedies available to
the Corporation in law and equity, this Employment Agreement is subject
to termination by the Corporation for Cause under Section 4(b) in the
event the Executive violates any provision of this Section 8.
9. Successors.
a. This Employment Agreement is personal to the Executive and,
without the prior written consent of the Corporation, shall not be
assignable by the Executive otherwise than by will or the laws of
descent and distribution. This Employment Agreement shall insure to
the benefits of and be enforceable by the Executive's legal
representatives.
b. This Employment Agreement shall inure to the benefit of and be
binding upon the Corporation, and its successors and assigns.
c. The Corporation shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation to
assume expressly and agree to perform this Employment Agreement in the
same manner and to the same extent that the Corporation would be
required to perform it if no such succession had taken place.
10. Miscellaneous.
a. This Employment Agreement shall 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 Employment
Agreement are not part of the provisions hereof and shall have no
force or effect. This Employment 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
such amendment, modification, repeal, waiver, extension or discharge
is sought. No person, other than pursuant to a resolution of the
Board or a committee thereof, shall have authority on behalf of the
Corporation to agree to amend, modify, repeal, waive, extend or
discharge any provision of this Employment Agreement or anything in
reference thereto.
b. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive:
J. Wayne Leonard
Cinergy Corp.
221 East Fourth Street
P. O. Box 960
Cincinnati, Ohio 45201-0960
If to the Corporation:
Cinergy Corp.
221 East Fourth Street
P. O. Box 960
Cincinnati, Ohio 45201-0960
Attn: Vice President, General Counsel and
Corporate Secretary
or to such other address as either party shall have furnished to the other in
writing in accordance with this Employment Agreement. All notices and
communications shall be effective when actually received by the addressee.
c. The invalidity or unenforceability of any provision of this
Employment Agreement shall not affect the validity or
enforceability of any other provision of this Employment
Agreement.
d. The Corporation may withhold from any amounts payable under
this Employment Agreement such federal, state or local taxes as
shall be required to be withheld pursuant to any applicable law or
regulation.
e. The Executive's or the Corporation's failure to insist upon
strict compliance with any provision of this Employment Agreement
or the failure to assert any right the Executive or the
Corporation may have under this Employment Agreement, including
without limitation the right of the Executive to terminate
employment for Good Reason pursuant to Section 4(c) of this
Employment Agreement, or the right of the Corporation to terminate
the Executive's employment for Cause pursuant to Section 4(b) of
this Employment Agreement, shall not be deemed to be a waiver of
such provision or right or any other provision or right of this
Employment Agreement.
f. This instrument contains the entire agreement of the
Executive and the Corporation with respect to the subject matter
hereof; and all promises, representations, understandings,
arrangements and prior agreements are merged into this Employment
Agreement and accordingly superseded.
g. This Employment Agreement may be executed in counterparts,
each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
h. The Corporation and the Executive agree that Cinergy shall be
authorized to act for the Corporation with respect to all aspects
pertaining to the administration and interpretation of this
Employment Agreement.
IN WITNESS WHEREOF, the Executive and the Corporation have caused this
Employment Agreement to be executed as of the day and year first above
written.
CINERGY CORP.
By: Jackson H. Randolph_________
(Jackson H. Randolph)
Chairman and Chief Executive Officer
CINERGY SERVICES, INC.
By: Jackson H. Randolph_______
(Jackson H. Randolph)
Chairman and Chief Executive Officer
THE CINCINNATI GAS & ELECTRIC COMPANY
By: Jackson H. Randolph_______
(Jackson H. Randolph)
Chairman and Chief Executive Officer
PSI ENERGY, INC.
By: Jackson H. Randolph_______
(Jackson H. Randolph)
Chairman and Chief Executive Officer
EXECUTIVE
J. Wayne Leonard___________
(J. Wayne Leonard)