CLECO CORPORATION SEPARATION AGREEMENT

THIS SEPARATION AGREEMENT (the “Agreement”) is made effective as of May 31, 2008 (the “Effective Date”), between Cleco Corporation and each of its subsidiaries and affiliates (collectively, the “Company”) and Kathleen F. Nolen (“Employee”).

1.            Separation from Employment.   Effective as of May 31, 2008, and pursuant to Paragraph 3.4 of that certain Employment Agreement by and between the Company and Employee dated May 5, 2005 (the “Employment Agreement”), the parties agree that Employee’s employment with the Company shall be separated (the “Separation Date”).

2.            Final Wages.   The Company shall pay to Employee any base compensation accrued but unpaid as of her Separation Date as soon as practicable thereafter.

3.            General Waiver and Release.   In consideration for Employee’s execution of the General Waiver and Release, attached as Exhibit A hereto, and provided that such General Waiver and Release is executed by Employee and returned to the Company not later than 21 days after Employee’s Separation Date, the Company shall pay to Employee an amount equal to $119,250 , which amount shall be paid in the form of a single sum not later than ten business days after such General Waiver and Release becomes irrevocable in accordance with its terms.  The Employee acknowledges and agrees that the consideration described herein is not for services she has rendered, is not otherwise due or owing to him under any agreement (whether oral or written) with the Company or under any Company plan, policy or practice, is to be paid solely on account of her separation, and that such payment would not be made or owing absent her execution of the General Waiver and Release.

4.            Separation Payments and Benefits.

4.1            Severance Pay.   Provided Employee is not in breach of any post-termination obligation imposed under the Employment Agreement, she shall be entitled to a payment in the amount of $265,000 ,   one-half of which shall be paid not later than 30 days following her Separation Date and one-half of which shall be paid on December 1, 2008.

4.2            Relocation.   If Employee elects to cause the Company to provide the relocation assistance set forth in Paragraph 3.1e of the Employment Agreement, she shall request, not later than May 30, 2009, that the Company (a) pay or reimburse him for relocation costs as provided in Paragraph 3.1e(ii) of the Employment Agreement, and/or (b) purchase her principal residence at a price equal to the greater of (i) its appraised value, or (ii) Employee’s purchase price plus the documented cost of any improvements made by Employee.  Payment or reimbursement hereunder shall be made not later than December 31, 2009.

5.            Equity Compensation.

As used in this Paragraph 5, the terms “Restricted Stock,” “Opportunity Shares,” “Common Stock Equivalent Units” and “Performance Cycles” shall have the meanings ascribed to them in the Company’s 2000 Long-Term Incentive Compensation Plan, as amended (the “2000 LTIP”).

5.1            Disposition of Stock Awards.   Under the 2000 LTIP, Employee has outstanding awards of Restricted Stock and Opportunity Shares for the three-year Performance Cycles beginning in 2006, 2007 and 2008, respectively, which shall be disposed of as follows:

Any other Restricted Stock, Opportunity Shares or similar equity awards shall be deemed canceled and forfeited to the Company, without requirement of further notice or compensation.

Employee shall not be entitled to an income tax adjustment with respect to any award made with respect to the 2006, 2007 and 2008 Performance Cycles and will be solely responsible for any Federal or state taxes due with respect thereto.  The Company shall, however, withhold from any award the applicable taxes as required by law (see Section 18).

5.2            Stock Options.   Any stock options granted to Employee under the 1990 LTIP or the 2000 LTIP that are vested and remain unexercised as of her Separation Date shall remain exercisable during the 30-day period following her Separation Date in accordance with their terms (See Exhibit B).  Employee acknowledges that options not vested as of her Separation Date shall be cancelled and forfeited to the Company as of such date options otherwise exercisable hereunder that remain unexercised at the conclusion of such 30-day period shall be cancelled and forfeited to the Company at the conclusion of such period.

6.            Supplemental Executive Retirement Plan.   As of her Separation Date, Employee shall be entitled to a benefit under the Company’s Supplemental Executive Retirement Plan (“SERP”) in an amount equal to 45% of her final compensation (as defined in Paragraph 2.9 of the SERP), reduced appropriately for retirement prior to age 65 as described in paragraphs 3.3B and offset as otherwise provided in 3.5 thereof.  The amount and payment of such benefit shall be further subject to the terms of the SERP, as it may be amended from time to time

7.            Other Benefits.   Notwithstanding the foregoing and except as may be expressly provided herein, this Agreement is not intended to affect or restrict Employee’s benefits under the employee benefit

plans generally maintained for the benefit of all of the employees of the Company, as in effect as of the Separation Date.

8.            Extinguishment.   Employee acknowledges that, except as otherwise provided in this Agreement, payment of the amounts and benefits described herein extinguishes the Company’s obligations under the Employment Agreement and the Annual Incentive Compensation Plan, in their entirety.

9.            Surviving Covenants.   Employee acknowledges that she is subject to and bound by covenants concerning the use of the Company’s confidential information and the nonsolicitation of the Company’s employees set forth in her Employment Agreement, and that they shall survive her separation of employment in accordance with their terms.

10.            Return of Property.   Employee shall promptly return to the Company all of the property of the Company, including, without limitation, automobiles, equipment, computers, fax machines, portable telephones, printers, software, credit cards, manuals, customer lists, financial data, letters, notes, notebooks, reports and copies of any of the above and any confidential information that is in the possession or under the control of Employee.

11.            Nondisparagement.   As a material inducement to the Company to enter into this Agreement, Employee agrees that she will not:

Notwithstanding the foregoing, Employee shall not be deemed in breach of the covenants contained herein solely by reason of testimony compelled by process of law or the conduct permitted in subparagraph b above.

The Company a