EXHIBIT 10.3
NONQUALIFIED STOCK OPTION
AGREEMENT
(Optionee: James E. Rogers
Grant
Date)
THIS AGREEMENT
is made as of the Grant Date
specified above (the “Grant Date”), between Duke Energy
Corporation, a Delaware corporation (the
“Corporation”), and the Optionee specified above (the
“Optionee”).
RECITALS
The Corporation has entered into an
employment agreement with the Grantee dated
(the “Employment Agreement”), pursuant to which it has
agreed to make certain equity-based awards to the Grantee,
including the award memorialized by this Agreement (the
“Award”). The Award is made pursuant to the Duke
Energy Corporation 2006 Long-Term Incentive Plan, as it may, from
time to time, be further amended (the “Plan”).
The applicable provisions of the Plan are incorporated in this
Agreement by reference, including the definitions of terms
contained in the Plan (unless such terms are otherwise defined
herein).
Section 1
. Grant and Designation of
Option . Pursuant to the provisions of the Employment
Agreement, the Corporation hereby grants to the Optionee, subject
to the terms and conditions of the Plan, the Employment Agreement
and this Agreement, the right and option to purchase from the
Corporation the aggregate number of
shares of common stock of the Company (“Common Stock”)
at a per share price of
(the “Option Price”), all subject to adjustment as
provided in Section 3.2 of the Plan (collectively, the
“Option”). The Option is not an incentive stock option
within the meaning of Section 422 of the Code. This Agreement
shall constitute an “Award Agreement” under the
Plan.
Section 2
. Term of Option and
Vesting . Subject to earlier forfeiture, termination,
acceleration or cancellation of the Option as provided in this
Agreement, the term of the Option shall be for a period of ten
(10) years from the Grant Date. Subject to the
provisions of this Agreement, the Option shall vest at such times
and as to such number of shares as determined on the basis of the
following schedule:
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Number of Shares
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Upon Optionee remaining
continuously employed with the
Corporation and Subsidiaries from
the Grant Date through
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Section 3
. Method of Exercise .
To the extent that the right to purchase shares has become
vested, the Option, or any part thereof, may be exercised by giving
signed, written notice
of exercise to the Corporation (the
“Exercise Notice”) specifying the number of shares to
be purchased, subject to Section 7. The date of exercise
shall be the date the properly completed Exercise Notice is
delivered to the Corporation. The Exercise Notice shall be
accompanied by payment of the aggregate Option Price for the shares
to be purchased, in the following manner:
(a)
in U.S. dollars by personal check, bank draft or money order
payable to the order of the Corporation, or by wire transfer or
direct account debit; or
(b)
by delivery of shares of Common Stock or other securities of the
Corporation with a Fair Market Value on the date of exercise at
least equal to the Option Price for the shares being purchased;
or
(c)
by combination of the methods described in paragraphs (a) and
(b) above.
For purposes of paragraph (a) above, if,
and in such manner, as the Optionee is permitted by the
Corporation’s Executive Compensation and Benefits Department,
and which is not contrary to federal or state securities or other
laws, rules and regulations, the Optionee may provide for the
payment of the aggregate Option Price for the shares to be
purchased by delivering a properly executed Exercise Notice
together with irrevocable instructions to a broker to promptly
deliver to the Corporation the amount of such aggregate Option
Price. The Corporation, acting through its Executive
Compensation and Benefits Department, may comply with applicable
law or internal procedures by restricting the manner by which the
Optionee may pay the Option Price or permitting an alternate method
therefore.
Subject to Section 4 and the
other applicable provisions of this Agreement and the Plan, in the
event of the exercise of the Option, the Corporation shall deliver
to the Optionee or, if applicable, to a broker designated by the
Optionee, a certificate representing the shares of Common Stock
purchased as a result of the exercise.
Section 4
. Tax Withholding .
Shares of Common Stock shall not be issued upon the exercise
of the Option unless all federal, state and other governmental
withholding tax requirements arising from such exercise have been
satisfied by the Optionee or provision therefor has been made to
the satisfaction of the Executive Compensation and Benefits
Department. The number of shares of Common Stock that would
otherwise be deliverable upon exercise of the Option shall be
reduced by the Committee, or its delegatee, to fully satisfy any
tax withholding requirements, unless the Committee, or its
delegatee, in its discretion permits Optionee to satisfy such tax
obligation by other payment to the Corporation.
Section 5
. Nonalienation .
The Option granted hereunder is not assignable or
transferable by the Optionee otherwise than by will or the laws of
descent and distribution, and is exercisable, during the
Optionee’s lifetime, only by the Optionee. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of the Option, or of any right or privilege conferred
hereby, contrary to the provisions hereof, or upon the levy of any
attachment or similar process upon, or other voluntary or
involuntary attempted alienation of, the Option, or any right or
privilege conferred hereby, the Option and the right and privilege
conferred hereby shall immediately become null and void.
Notwithstanding the foregoing provisions of this
Section 5,
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in accordance with Section 6.5 of the Plan,
the Optionee may, with the advance approval of the Committee,
transfer or assign some or all of the Option granted hereunder to
members of the Optionee’s immediate family (as determined by
the Committee) or to trusts, partnerships or corporations whose
beneficiaries, members or owners are members of the
Optionee’s immediate family. Any such transfer or assignment
shall be subject to the terms and conditions specified by the
Committee as described in an Option Transfer Agreement to be
executed by the Corporation, the Optionee and the assignee or
transferee. Except to the extent provided in Sections 3 or 4
above or the foregoing provisions of this Section 5, in no
event may shares of Common Stock subject to the Option be sold,
transferred, exchanged, assigned, pledged, hypothecated, alienated
or otherwise encumbered until January 1, 2014 or, if earlier,
the termination of the Optionee’s continuous employment by
the Corporation (including its Subsidiaries).
Section 6
. Rights as a
Stockholder . The Optionee shall have no rights as a
stockholder with respect to any shares of Common Stock subject to
the
