2.                            Compensation .

a.                                        In exchange for entering into this Agreement and the Waiver and Release, and satisfying any additional conditions set forth in this Agreement, including but not limited to the requirement to provide transition services and comply with Sections 8, 9, 10, 11 and 14, and in lieu of any other compensation or benefits that might be payable to the Executive under any and all employment agreements, separation agreements, severance plans or severance agreements between Duke and the Executive, including but not limited to the Duke Energy Corporation Integrated Severance Plan and the Amended and Restated Change in Control Agreement by and among Duke Energy Corporation and the Executive dated August 26, 2008, Duke Energy Corporation agrees to modify the performance share awards that were granted to the Executive under the LTIP (as defined below) on March 2, 2007, February 26, 2008 and February 19, 2009 such that the Executive shall be deemed to be employed with Duke, solely for purposes of such awards, during the entirety of the performance periods applicable under each such performance share award.  The consideration described in this Section 2(a) of this Agreement shall only be provided to the Executive if, within 21 days after presentation to the Executive, which presentation will occur within 30 days after the Retirement Date, the Executive timely executes and does not timely revoke the Waiver and Release.  Notwithstanding anything herein to the contrary, the Company may withhold from any amounts payable under this Agreement such federal, state, local or other taxes as it reasonably determines are required to be withheld pursuant to any applicable law or regulation.

b.                                       The Executive acknowledges and agrees that he shall be entitled to no other benefits or compensation from Duke or any of its benefit plans or arrangements, other than as described in Section 2(a) of this Agreement and the following paragraphs of this Section 2(b):

i.                                           2009 Short-Term Incentive .  The Executive shall be entitled to a prorated award under the Duke Energy Corporation Executive Short-Term Incentive Plan (the “STI Plan”) for 2009, with the amount of such award being determined pursuant to the terms of the STI Plan and any applicable administrative guidelines, as amended, and such award shall be paid no later than March 15, 2010.

ii.                                        Accrued Vacation .  The Executive will receive the accrued vacation to which he is entitled under the applicable Duke vacation policy.

iii.                                     Equity Awards .  Except as described in Section 2(a) of this Agreement, the Executive’s rights with respect to the equity awards granted to him pursuant to the Duke Energy Corporation 1998 Long-Term Incentive Plan and the Duke Energy Corporation 2006 Long-Term Incentive Plan (individually and collectively, the “LTIP”) shall be determined pursuant to the terms of the LTIP and any applicable equity award agreements, including any post-employment non-competition/confidentiality restrictions contained therein.   Duke acknowledges and agrees that the Executive shall be treated, for purposes of the LTIP, as having terminated employment after becoming eligible for retirement.

2

iv.                                    Retirement Benefits .  The Executive’s rights with respect to retirement benefits shall be determined pursuant to the terms of the Duke Energy Retirement Savings Plan, the Duke Energy Retirement Cash Balance Plan, the Duke Energy Corporation Executive Savings Plan and the Duke Energy Corporation Executive Cash Balance Plan, each as amended from time to time.

v.                                       Welfare Benefits .  The Executive’s rights with respect to welfare benefits shall be determined pursuant to the terms of the Duke Energy Health & Welfare Benefit Plans and the Duke Energy Health & Welfare Benefit (Financed) Plans, each as amended from time to time.

3.                                        Transition Services .  The Executive agrees to serve as a consultant to Duke for the 6-month period beginning on the Retirement Date (the “Consulting Period”).  The consulting services to be provided by the Executive during the Consulting Period will consist of consultation with, and advice to, the officers and managerial employees of Duke, as reasonably requested by the Chief Executive Officer or Chief Financial Officer (or his or her delegate), on matters relating to Duke’s business affairs about which the Executive has historical knowledge and experience. When requested by Duke, the Executive will perform the consulting services at reasonable times, as determined by mutual agreement between Duke and the Executive; provided, however, that in no event will the Executive be required, pursuant to this Agreement, to provide more than ten (10) hours of consulting services to Duke in any calendar week without his consent.  The Company will reimburse the Executive for all reasonable expenses authorized by Duke and incurred by the Executive in connection with the provision of consulting services pursuant to this Section 3.  All such reimbursements shall be subject to Duke’s Section 409A Payment Policy.  The Parties understand and agree that all of the consulting services to be provided by the Executive under this Agreement will be performed by him as an independent contractor and not as an employee of Duke.  The Executive will perform his consulting services to the best of his abilities.  The Executive’s duties pursuant to this Section 3 are purely those of a consultant, and Duke is free to accept or reject his advice, as it deems appropriate.  Duke is responsible for all actions it chooses to take based on the Executive’s advice, and Duke agrees to hold the Executive harmless and indemnify him for the results of those actions, including all losses and damages, including without limitation his reasonable legal expenses, resulting from any legal or regulatory action.  The Executive will not have any authority to act as an agent or representative of Duke, except to the extent expressly authorized in writing by Duke.

4.                                        Basis for Entitlement .  The Executive acknowledges that he would not be entitled to the consideration described in Section 2(a) of this Agreement absent his termination of employment and his execution of this Agreement and the Waiver and Release.

5.                                        Adequate Consideration .   The Executive agrees that the benefits described in this Agreement constitute good, valuable and sufficient consideration for the obligations the Executive assumes in Sections 6 through 15 and the Waiver and Release.  The consideration offered in exchange for the Executive’s execution of this

3

Agreement exceed in kind and scope that to which the Executive would have otherwise been legally entitled.

6.                                        Future Employment .  The Executive waives any right to assert any claim or demand for reemployment with Duke.  The Executive, however, may accept an offer of reemployment with Duke in the event such an offer is made.

7.                                        Acknowledgement .  The Executive acknowledges and agrees that it is the policy of the Company and Duke to comply with all applicable federal, state and local laws and regulations.  The Executive affirms that he has reported all compliance issues and violations of federal, state and local law or regulation or Duke policy of which he had knowledge during the term of his employment, if any.  The Executive represents and acknowledges that he has no further or additional knowledge or information regarding compliance issues or possible violations of federal, state or local law or regulations or Duke policy other than what the Executive may have previously raised, if any.

8.                                    Restrictive Covenants .

a.                                        In General .  The Executive acknowledges that in the course of his employment with Duke he has been exposed to and become familiar with trade secrets, customer lists, and other proprietary and confidential information  concerning Duke, and that his services have been of special, unique and extraordinary value to Duke.

b.                                       Non-Solicitation .  The Executive further agrees that, during the Consulting Period and the 24-month period thereafter, he will not in any manner, directly or indirectly, without the advance written consent of Duke, induce or attempt to induce any employee of Duke to quit or abandon his or her employ, or, for competitive purposes, call on, service, or solicit business from customers of Duke.

c.                                        Non Competition .  The Executive agrees that at no time during the Consulting Period or the 24-month period thereafter will he, without the prior written consent of Duke, (i) become employed by, or otherwise associated with, and work in or provide advice to a Competitor, (ii) acquire an ownership interest in a Competitor, provided that the Executive may, for investment purposes, own not more than 3% of the outstanding stock of any class of a Competitor that is publicly traded, or (iii) solicit any customers of Duke on behalf of or for the benefit of a Competitor.  For purposes of this Agreement, the term “Competitor” means any person or entity that is engaged in any business in which Duke is engaged as of the Retirement Date.   Provided, however, that the Parties acknowledge and agree that the operations of FairPoint Communications, Inc. and its affiliates as of the Retirement Date shall not result in FairPoint Communications, Inc. and its affiliates being considered a Competitor hereunder or under any other equity or incentive award agreement granted to the Executive.

d.                                       Non-Disparagement .  Except as required by subpoena or other legal process (in which event the Executive will give the Chief Legal Officer of Duke Energy Corporation prompt notice of such subpoena or other legal process in order to

4

permit Duke or any affected individual to seek appropriate protective orders), the Executive further agrees that he will refrain from publishing or providing any oral or written statements about Duke, any of Duke’s current or former officers, executives, directors, employees, agents or representatives or any initiative, program or policy of Duke relating to any matter whatsoever that are disparaging, slanderous, libelous or defamatory, or that disclose private or confidential information about their business affairs, or that constitute an intrusion into their private lives, or that give rise to unreasonable publicity about their private lives, or that place them in a false light before the public, or that constitute a misappropriation of their name or likeness.  Except as required by subpoena or other legal process (in which event Duke will give the Executive prompt notice of such subpoena or other legal process in order to permit the Executive to seek appropriate protective orders), Duke further agrees to refrain from publishing or providing any oral or written statements about the Executive that are disparaging, slanderous, libelous or defamatory, or that disclose private or confidential information about his business affairs, or that constitute an intrusion into his private life, or that give rise to unreasonable publicity about his private life, or that place him in a false light before the public, or that constitute a misappropriation of his name or likeness.

e.                                        Revision .  If, at the time of enforcement of this Section, a court holds that the restrictions stated herein are unreasonable under circumstances then existing, the Parties hereto agree that the maximum period or scope reasonable under such circumstances will be substituted for the stated period or scope and that the court will be allowed to revise the restrictions contained herein to cover the maximum period or scope permitted by law.  The Parties acknowledge that any alleged breach of this Section 8 could result in a claim for legal and/or equitable damages by the aggrieved party.

9.                Nondisclosure of Confidential Information .  The Executive acknowledges that the information, observations and data obtained by him while employed by Duke and during the Consulting Period concerning the business or affairs of Duke (unless and except to the extent the foregoing become generally known to and available for use by the public other than as a result of the Executive’s acts or omissions to act) (hereinafter defined as “Confidential Information”) are the property of Duke and he was and is prohibited from using, disclosing or misappropriating (on behalf of himself or any other person or entity) such Confidential Information during his employment with Duke and following the separation of his employment from Duke Energy.  For purpose of clarity, the fact of, or any information regarding any investigation undertaken by Duke or completed on Duke’s behalf regarding Duke’s business or the conduct of Duke’s business relating to legal, compliance, or risk management issues shall be deemed Confidential Information unless and except to the extent the foregoing become generally known to and available for use, in its entirety, by the public other than as a result of the Executive’s acts or omissions to act.  Therefore, the Executive agrees that he shall not disclose any Confidential Information without the prior written consent of the Chief Legal Officer or the Chief Executive Officer of Duke Energy Corporation (which may be withheld for any reason or no reason) unless and except to the extent that such disclosure is required by any subpoena or other legal process (in which event the

5

Executive will give the Chief Legal Officer of Duke Energy Corporation prompt notice of such subpoena or other legal process in order to permit Duke to seek appropriate protective orders), and that he shall not use any Confidential Information for his own account without the prior written consent of the Chief Legal Officer or the Chief Executive Officer of Duke Energy Corporation (which may be withheld for any reason or no reason).  As soon as practicable after the Retirement Date, Executive shall deliver to the Company all memoranda, notes, plans, records, reports, computer tapes and software and other documents and data (and copies thereof), whether in writing or any other form, relating to the Confidential Information, or to the work product or the business of Duke which he may possess or have under his control.  The Executive’s obligations under this Section 9 are in addition to, and not in limitation of or preemption of, all other obligations of confidentiality which the Executive may have to Duke under general legal or equitable principles, and federal, state or local law.  The Parties acknowledge and agree that, not