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EXECUTIVE PERMANENT LIFE INSURANCE AGREEMENT

Life Insurance Split Dollar Agreement

EXECUTIVE PERMANENT LIFE INSURANCE AGREEMENT | Document Parties: CAROLINA POWER  LIGHT COMPANY | Northwestern Mutual Life Insurance Company | Permanent Life Insurance You are currently viewing:
This Life Insurance Split Dollar Agreement involves

CAROLINA POWER LIGHT COMPANY | Northwestern Mutual Life Insurance Company | Permanent Life Insurance

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Title: EXECUTIVE PERMANENT LIFE INSURANCE AGREEMENT
Date: 3/1/2007

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Exhibit 10c(23)
 
EXECUTIVE PERMANENT LIFE INSURANCE AGREEMENT
 
 
THIS AGREEMENT is made this ____________ between CAROLINA POWER & LIGHT COMPANY ("Company") and ____________________________________ ("Employee").

WITNESSETH:
 
WHEREAS, the Company has instituted an Executive Permanent Life Insurance Program in order to assist selected key employees in providing death benefits for their beneficiaries; and

WHEREAS, the Company desires to provide such benefits in the Executive Permanent Life Insurance Program to the extent provided herein;

NOW, THEREFORE, it is mutually agreed that:

1.    Insurance Policy . In furtherance of the purpose of the Executive Permanent Life Insurance Program, the Company and Employee have jointly applied for and purchased life insurance from Northwestern Mutual Life Insurance Company ("Insured") insuring the life of _________ _________, an employee of the Company. The policy number is _________ _________ and the original face amount is ________________ ("Policy").

2.     Policy Ownership . The Company and the Employee agree that the Policy shall be divided into two separate and distinct policy interests as provided in Paragraph 4. During the term of this Agreement, the parties shall have the following ownership rights with respect to such policy interests.
 
a)   Company .

i)     The contingent limited right to obtain one or more loans or advances on the Policy which shall be limited to the extent of the Company's Policy Interest, as defined in Paragraph 4 below, and to pledge or assign the Policy for such loans or advances. Any such loan, advance, pledge or assignment by the Company shall be subject to the written consent of the Employee. If such loans are for the purpose of paying premiums or otherwise to purchase or carry the Policy, the Company agrees to adhere to the requirement of Section 264 of the Internal Revenue code of 1986, as amended from time to time, so that the interest paid on such loans, or some portion thereof, may be deductible for federal income tax purposes;

ii)     Ownership of Policy cash value equal to the sum of all "Company premiums" as defined in Paragraph 3(a) hereof; and
 
iii)   The limited right to receive death proceeds of the Policy to the extent of the Company’s Policy Interest in the event of the Employee’s death during the term of this Agreement.
 


 
b)    Employee . Except as provided in Paragraph 2(a) above and otherwise in this Agreement, the Employee shall have all remaining ownership rights in the Policy, including but not limited to, the following:
 
i)     The contingent limited right to obtain one or more loans or advances on the Policy which shall be limited to the extent of the Employee's Policy Interest, as defined in Paragraph 4 below, and to pledge or assign the Policy for such loans or advances. Any such loan, advance, pledge or assignment by the Employee shall be subject to the written consent of the Company;

ii)     The right to designate beneficiaries of the Employee's Policy Interest including selection of settlement options;

iii)     The right to assign any part or all of the Employee's ownership rights in the Policy to any person, entity or trust by execution of appropriate documents;

iv)     The right to surrender the Policy subject to the Company’s Policy Interest; and

v)     Ownership of all Policy cash value not owned by the Company.

3.   Payment of Premiums .

a)
 
       i)      Subject to Paragraph 3(b) below, payment of the Policy’s annual premium shall be split between the Company and the Employee. The Employee shall pay that portion of
                 the annual premium equal to the “economic benefit” as defined in Revenue Rulings 64-325 and 66-110. The value of the economic benefit shall be calculated by using
                 the lower of the P.S. 58 rates or the Insurer’s term rates. The Company shall pay the remainder of the premium (hereafter referred to as “Company premium(s)”).

 
ii)    Notwithstanding the foregoing, during the term of this Agreement, the Company shall pay its portion of the annual premium for ten (10) years commencing with the premium for the initial policy year beginning July 1, 1998, and including the premium due on the July 1, 2007 policy anniversary; provided, however, that the Company may agree to pay such additional premiums as it and the Employee may agree. In the event the Company is not obligated to pay a portion of the premium on the policy for any policy year during the term of this Agreement, the Employee shall pay such premium either in cash or by the application of policy dividends and/or values.

iii)    By mutual consent of the parties hereto and for administrative convenience, the Company may pay the entire premium as it becomes due, whereupon the Employee shall reimburse the Company for the Employee's share of the premium in such manner as the Company and the Employee may mutually agree.


b)   If either a standard disability waiver of premium benefit or accidental death benefit is added as a rider to the Policy, the Employee agrees to pay the annual cost of such riders.
 
4.   Policy Interests .
 
a)    Subject to Paragraph 4(b) below, during the term of this Agreement and prior to or   upon the death of the Employee, the Company, by reason of payment of
       premiums   pursuant to Paragraph 3 above, shall have an interest in the Policy equal to the sum   of Company premiums paid reduced by any Policy indebtedness
       which is incurred by   the Company and unpaid interest on such Policy indebtedness ("Company's Policy   Interest"). The Employee, by reason of payment
       of premiums pursuant to Paragraph   3 above, shall have all the remaining interest in the Policy in excess of the   Company's   Policy Interest ("Employee's Policy Interest").
 
 
b)
In the event of the death of the Employee during the term of this Agreement, the proceeds of the Policy shall be payable as follows:
 
i)     The Company shall be entitled to receive an amount of the Policy death proceeds equal to the proceeds of the Policy reduced by the death benefit payable to the Employee’s beneficiary pursuant to Paragraph 4(b)(ii) below, less any Policy indebtedness which is incurred by the Company and unpaid interest on such Policy indebtedness.
 
ii)    The Employee's beneficiary shall be entitled to receive an amount of the Policy death proceeds as follows plus death proceeds, if any, from an accidental death benefit rider:
 
Year
Amount
1
705,000
2
747,300
3
792,138
4
839,666
5
890,046
6
943,449
7
1,000,056
8
1,060,059
9
1,123,663
10
1,191,083
11
1,262,548
12
1,338,300
 
 

 
5.    Dividends . During the term of the Agreement, the Company and Employee agree that any dividends attributable to the Policy shall be used to purchase paid-up additional life insurance on the Employee's life unless mutually agreed otherwise. Notwithstanding the foregoing, in the event a premium on the Policy becomes due during the term of this Agreement and the Company is not obligated to pay any portion of such premium, the Employee may elect to have Policy dividends first offset such premium due with any remaining dividends used to purchase paid-up additional life insurance.
 
6.     Beneficiary Designation . The Company and Employee agree that the beneficiary designation for the payment of death proceeds in the Policy Application shall be completed so that the Company will be entitled to receive proceeds equal to the Company's

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