AMENDED AND
RESTATED
SUPPLEMENTAL SENIOR EXECUTIVE
RETIREMENT PLAN
OF
PROGRESS ENERGY,
1NC.
Effective January 1, 1984
(As last amended effective January
1, 2009)
TABLE OF CONTENTS
Page
ARTICLE I
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STATEMENT OF
PURPOSE
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1
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ARTICLE II
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DEFINITIONS
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2
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2.1
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2
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2.2
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2
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2.3
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Assumed
Deferred Vested Pension Benefit
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2
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2.4
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Assumed Early Retirement Pension
Benefit
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2
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2.5
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Assumed Normal Retirement Pension
Benfit
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3
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2.6
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3
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2.7
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3
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2.8
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5
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2.9
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5
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2.10
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5
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2.11
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5
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2.12
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6
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2.13
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6
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2.14
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6
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2.15
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7
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2.16
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7
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2.17
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7
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2.18
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7
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2.19
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7
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2.20
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8
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2.21
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8
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2.22
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8
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2.23
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9
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2.24
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Target Early
Retirement Benefit
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9
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2.25
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Target Normal
Retirement Benefit
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10
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2.26
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Target
Pre-Retirement Death Benefit
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10
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2.27
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10
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ARTICLE III
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ELIGIBILTY AND
PARTICIPATION
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11
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3.1
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11
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3.2
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11
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3.3
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Duration of
Participation
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11
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RETIREMENT
BENEFITS
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11
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4.1
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Normal
Retirement Benefit
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11
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4.2
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13
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4.3
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15
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4.4
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Re-employment of Retired Participant
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15
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ARTICLE V
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PRE-RETIREMENT
DEATH BENEFITS
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15
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5.1
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15
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5.2
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16
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5.3
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16
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5.4
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Commencement
and Duration
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16
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ARTICLE VI
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SEVERANCE
BENEFITS
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16
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6.1
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16
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6.2
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16
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6.3
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Commencement and Duration
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17
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6.4
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18
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ARTICLE VII
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ADMINISTRATION
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19
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7.1
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19
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7.2
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19
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7.3
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19
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7.4
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19
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7.5
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20
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ARTICLE VIII
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AMENDEMENT AND
TERMINATION
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20
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ARTICLE IX
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MISCELLANEOUS
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20
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9.1
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20
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9.2
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21
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9.3
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21
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9.4
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21
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9.5
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22
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9.6
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22
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9.7
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23
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9.8
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23
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9.9
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23
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ARTICLE X
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CONSTRUCTION
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23
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10.1
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23
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10.2
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23
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10.3
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23
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10.4
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24
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ARTICLE I
STATEMENT OF
PURPOSE
This Plan is designed and
implemented for the purpose of enhancing the earnings and growth of
Progress Energy, Inc. (the "Sponsor") by providing to the limited
group of senior management employees largely responsible for such
earnings and long-term growth deferred compensation in the form of
supplemental retirement income benefits, thereby increasing the
incentive of such key senior management employees to make the
Sponsor and its Affiliated Companies more profitable. The benefits
are normally payable to Participants upon retirement or death. The
terms of the benefits operate in conjunction with the Participant's
benefits payable under the Progress Energy Pension Plan and are
designed to supplement such pension plan benefits and provide the
Participant with additional financial security upon retirement or
death.
The Plan is intended to constitute a
nonqualified deferred compensation plan that complies with the
provisions of Section 409A of the Internal Revenue Code of 1986, as
amended (the "Code"). Accordingly, the Plan shall be construed in
accordance with Section 409A of the Code, regulations promulgated
thereunder and related guidance ("Section 409A"), notwithstanding
any provision of the Plan to the contrary. The Plan is further
intended to be an unfunded retirement plan for a select group of
management or highly compensated employees within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, as
amended.
The Sponsor hereby restates and amends the Plan
effective January 1, 2009. The terms of the amended and
restated Plan shall govern the payment of any benefits commencing
on and after January 1, 2009.
ARTICLE II
DEFINITIONS
2.1 Terms
. Unless otherwise clearly required by the context, the
terms used herein shall have the following meaning. Capitalized
terms that are not defined below shall have the meaning ascribed to
them in the Retirement Plan.
2.2 Affiliated
Company . Shall mean any corporation or other entity
that is required to be aggregated with the Sponsor pursuant to
Section 414(b), (c), (m), or (o) of the Code, but only to the
extent required.
2.3 Assumed
Deferred Vested Pension Benefit . Shall mean the
monthly benefit of the deferred vested Pension to commence on his
Normal Retirement Date payable in the form of an annuity to which a
separated Participant would be entitled under the Retirement Plan,
calculated with the following assumptions based on such
Participant's marital status at the time benefits hereunder
commence:
(a) In the case of a
Participant with an Eligible Spouse, in the form of a 50% Qualified
Joint and Survivor Annuity as provided in the Retirement
Plan.
(b) In the case of a
Participant without an Eligible Spouse, in the form of a Single
Life Annuity as provided in the Retirement Plan.
(c) Without regard to
any other benefit payment option under the Retirement
Plan.
2.4 Assumed Early
Retirement Pension Benefit . Shall mean the monthly
benefit of the normal retirement Pension payable in the form of an
annuity to which a Participant would be entitled under the
Retirement Plan at his Normal Retirement Date, based upon his
projected years of Service at his Normal Retirement Date and
calculated with the following assumptions based upon his marital
status at the time benefits hereunder commence:
(a) In the case of a
Participant with an Eligible Spouse, in the form of a 50% Qualified
Joint and Survivor Annuity as provided in the Retirement
Plan.
(b) In the case of a
Participant without an Eligible Spouse, in the form of a Single
Life Annuity as provided in the Retirement Plan.
(c) Without regard to
any other benefit payment option under the Retirement
Plan.
2.5 Assumed Normal
Retirement Pension Benefit . Shall mean the monthly
benefit of the normal retirement Pension payable in the form of an
annuity to which a Participant would be entitled under the
Retirement Plan if he retired at his Normal Retirement Date,
calculated with the following assumptions based on his marital
status at the time benefits hereunder commence:
(a) In the case of a
Participant with an Eligible Spouse, in the form of a 50% Qualified
Joint and Survivor Annuity as provided in the Retirement
Plan.
(b) In the case of a
Participant without an Eligible Spouse, in the form of a Single
Life Annuity as provided in the Retirement Plan.
(c) Without regard to
any other benefit payment option under the Retirement
Plan.
2.6 Board
. Shall mean the Board of Directors of
Sponsor.
2.7 Change in
Control . Shall occur on the earliest of the
following dates:
(a) the date any
person or group of persons (within the meaning of Section 13(d) or
14(d) of the Securities Exchange Act of 1934), excluding employee
benefit plans of the Sponsor, becomes, directly or indirectly, the
"beneficial owner" (as defined in Rule 13d-3 promulgated under the
Securities Act of 1934) of securities of the Sponsor representing
twenty-five percent (25%) or more of the combined voting power of
the Sponsor's then outstanding
securities (excluding the
acquisition of securities of the Sponsor by an entity at least
eighty percent (80%) of the outstanding voting securities of which
are, directly or indirectly, beneficially owned by the Sponsor);
or
(b) the date of
consummation of a tender offer for the ownership of more than fifty
percent (50%) of the Sponsor's then outstanding voting securities;
or
(c) the date of
consummation of a merger, share exchange or consolidation of the
Sponsor with any other corporation or entity regardless of which
entity is the survivor, other than a merger, share exchange or
consolidation which would result in the voting securities of the
Sponsor outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or being converted into
voting securities of the surviving or acquiring entity) more than
sixty percent (60%) of the combined voting power of the voting
securities of the Sponsor or such surviving or acquiring entity
outstanding immediately after such merger or consolidation;
or
(d) the date, when as
a result of a tender offer or exchange offer for the purchase of
securities of the Sponsor (other than such an offer by the Sponsor
for its own securities), or as a result of a proxy contest, merger,
share exchange, consolidation or sale of assets, or as a result of
any combination of the foregoing, individuals who are Continuing
Directors cease for any reason to constitute at least two-thirds
(2/3) of the members of the Board; or
(e) the date the
shareholders of the Sponsor approve a plan of complete liquidation
or winding-up of the Sponsor or an agreement for the sale or
disposition by the Sponsor of all or substantially all of the
Sponsor's assets; or the date of any event which the Board
determines should constitute a Change in Control.
A Change in Control shall not be deemed to have
occurred until a majority of the members of the Board receive
written certification from the Committee that such event has
occurred. Any determination that such an event has occurred shall,
if made in good faith on the basis of information available at that
time, be conclusive and binding on the Committee, the Sponsor, the
Company, the Participants and their beneficiaries for all purposes
of the Plan,
2.8 Committee
. Shall mean the Committee on Organization and
Compensation of the Board.
2.9 Company
. Shall mean Progress Energy, Inc. or any successor to
it in the ownership of substantially all of its assets, and each
Affiliated Company that, with the consent of the Board adopts the
Plan and is included in Appendix A, as in effect from time to time.
Appendix A shall set forth any limitations imposed on employees of
Affiliated Companies that adopt the Plan, including limitations on
"Service," notwithstanding any provision of the Plan to the
contrary.
2.10 Continuing
Director . Shall mean the members of the Board as of
January 1, 2009; provided, however, that any person becoming a
Director subsequent to such date whose election or nomination for
election was supported by seventy-live percent (75%) or more of the
Directors who then comprised Continuing Directors shall be
considered to be a Continuing Director.
2.11 Designated
Beneficiary . Shall mean one or more beneficiaries
as designated by a Participant in writing delivered to the
Committee. In the event no such written designation is made by a
Participant or if such beneficiary shall not be living or in
existence at the time for commencement of payment to any Designated
Beneficiary under the Plan, the Participant shall be deemed to have
designated his estate as such beneficiary.
2.12 Early
Retirement Date . Shall mean the date on which a
Participant who qualifies for the early retirement benefit of
Section 4.02 hereof retires from the employ of the Company and its
affiliated entities.
2.13 Eligible
Spouse . Shall mean the spouse of a Participant who,
under the laws of the State where the marriage was contracted, is
deemed married to that Participant on the date on which the
payments from this Plan are to begin to the Participant, except
that for purposes of Articles V and VI hereof, Eligible Spouse
shall mean a person who is married to a Participant for a period of
at least one year prior to his death.
2.14 Final Average
Salary . Shall mean a Participant's average monthly
Salary (as defined in Section 2.20 hereof) during the 36 completed
calendar months of highest compensation within the 120-month period
immediately preceding the earliest to occur of the Participant's
death, Separation from Service, Early Retirement Date, or Normal
Retirement Date, whichever is applicable. Provided, however, if a
Participant becomes entitled to a benefit hereunder while under a
period of long-term disability under the Sponsor's Group Insurance
Plan, Final Average Salary shall be determined for the 12 calendar
months immediately preceding the commencement of such period of
long-term disability. Provided, further, in determining average
monthly Salary (i) annual incentives and other similar payments
shall be deemed received in twelve (12) equal payments beginning
with the eleventh preceding month and ending with the month in
which actual payment is made, and (ii) amounts of compensation
deferred under any deferred compensation plan or arrangement shall
be deemed received in the months such payments would have been
received assuming no deferral had occurred. For years of Service
granted under the terms of a written employment agreement as
provided under Section
2.22, Salary during each such month is deemed to
be zero dollars ($0.00) for purposes of calculating Final Average
Salary.
2.15 Normal
Retirement Date . Shall mean the first day of the
calendar month coinciding with or next following the Participant's
65th birthday.
2.16 Participant
. Shall mean an employee of the Company who is eligible
and is participating in this Plan in accordance with Article III
hereof.
2.17 Pension
. Shall mean a level monthly annuity which is payable
under the Retirement Plan as of the Benefit Commencement Date if
the Participant elected an annuity form of benefit.
2.18 Plan
. Shall mean the "Supplemental Senior Executive
Retirement Plan of Progress Energy, Inc." as contained herein and
as it may be amended from time to time hereafter. 2.19 Retirement
Plan. Shall mean the "Progress Energy Pension Plan" (as amended
effective January 1, 2002) as it may be amended from time to time
thereafter.
2.19 Salary
. Shall mean the sum of:
(1) The annual base
compensation paid by the Company to a Participant, and
(2) annual cash awards
made under incentive compensation programs excluding, however, any
payment made under the Sponsor's Long-Term Compensation Program or
the Sponsor's Equity Incentive Plans, and
(3) amounts of annual
compensation deferred under any deferred compensation plan or
arrangement (including, without limitation, the "Executive Deferred
Compensation Plan," the "Deferred Compensation Plan for Key
Management Employees of Progress Energy, Inc.," the "Progress
Energy, Inc. Management Deferred
Compensation Plan" and the "Progress
Energy 401(k) Savings and Stock Ownership Plan") and which, but for
the deferral, would have been reflected in Internal Revenue Service
Form W-2.
2.20 Separation from
Service . Shall mean the date the Participant leaves
the employ of the Company and all affiliated entities other than on
account of his death, a period of long-term disability under the
Company's long-term disability plan, or retirement at either his
Early Retirement Date or upon or after his Normal Retirement Date.
Separation from Service under this Section 2.21 must also be
"separation from service," as defined for purposes of Section
409A.
2.21 Service
. Shall have the same meaning as "Eligibility Service,"
determined as provided in Sections 2.02 and 3.01 of the Retirement
Plan, plus any additional years of service that may be granted to
the Participant in connection with this Plan under the terms of a
written employment agreement (or any amendment thereto) entered
into between the Company and the Participant.
2.22 Social Security
Benefit . Means the monthly amount of benefit which
a Participant is or would be entitled to receive at age 65 as a
primary insurance amount under the federal Social Security Act, as
amended, whether or not he applies for such benefit, and even
though he may lose part or all of such benefit through delay in
applying for it, by making application prior to age 65 for a
reduced benefit, by entering into covered employment, or for any
other reason. The amount of such Social Security Benefit to which
the Participant is or would be entitled shall be estimated by the
Committee for the purposes of this Plan as of the January 1 of the
year in which his Separation from Service or retirement occurs on
the following basis:
(a) For a Participant
entitled to a normal retirement benefit, on the basis of the
federal Social Security Act as in effect on the January 1
coincident with or next preceding his Normal Retirement Date
(regardless of any retroactive changes made by legislation enacted
after said January 1);
(b) For a Participant
entitled to an early retirement benefit, on the basis of the
federal Social Security Act as in effect on the January 1
coincident with or next preceding his Early Retirement Date
(regardless of any retroactive change made by legislation enacted
after said January 1), assuming that his employment, and Salary in
effect at his Early Retirement Date, continued to age 65;
or
(c) For a Participant
entitled to a severance benefit, on the basis of the federal Social
Security Act as in effect on the January 1 coincident with or next
preceding his Separation from Service (regardless of any
retroactive change made by legislation enacted after said January
1), assuming that his employment, and Salary in effect at his
Separation from Service, continued to age 65.
For purposes of the calculations
required under paragraphs (a) and (b) above, if a Participant is
disabled under a period of long-term disability under the Company's
Group Insurance Plan, said Social Security Benefit shall be
calculated as if his Salary in effect at the commencement of such
period of long-term disability continued to age 65.
2.23 Spouse's
Pension . Shall mean the actual monthly benefit
payable to an Eligible Spouse under the Retirement Plan, assuming
the Eligible Spouse elected a 50% Joint and Survivor Annuity form
of benefit.
2.24 Target Early
Retirement Benefit . Shall mean an amount equal to a
Part
