Exhibit 10c(5)
Exhibit
10c(5)
Progress
Energy, Inc. 2002 Equity Incentive Plan
(Amended
and Restated Effective January 1, 2007)
Section
1. Purpose
Progress
Energy, Inc. (hereinafter referred to as the "Sponsor"), a North Carolina
corporation, hereby establishes the 2002 Equity Incentive Plan (the "Plan")
to
promote the interests of the Sponsor and its shareholders through the (i)
attraction and retention of executive officers, directors and other key
employees essential to the success of Sponsor and its Affiliates; (ii)
motivation of executive officers, directors and other key employees using
performance-related and stock-based incentives linked to the interests of the
Sponsor's shareholders; and (iii) enabling of such executive officers,
directors and other key employees to share in the long-term growth and success
of the Sponsor and its Affiliates. The Plan permits the grant of Nonqualified
Stock Options, Incentive Stock Options (intended to qualify under Section 422
of
the Internal Revenue Code of 1986, as amended), Stock Appreciation Rights,
Restricted Stock, Performance Shares, Performance Units, and any other Stock
Unit Awards or stock-based forms of Awards as the Committee may determine under
its sole and complete discretion at the time of grant, subject to the provisions
of this Plan document and applicable law. The 1997 Equity Incentive Plan of
Progress Energy, Inc. (the "1997 Plan") shall remain effective with regard
to
all Awards made thereunder, but shall be superseded by this Plan with regard
to
all Awards after the Effective Date.
Section
2. Effective
Date and Duration
The
Plan
was approved by the Board of Directors on March 20, 2002, subject to approval
by
the shareholders of the Sponsor. The Plan became effective on the date of
approval of the Plan by the Sponsor's shareholders (the "Effective Date").
The
Plan was further amended and restated effective July 10, 2002, and amended
and
restated effective January 1, 2007. The Plan shall expire on the tenth
anniversary of the Effective Date; however, all Awards made prior to, and
outstanding on such date, shall remain valid in accordance with their terms
and
conditions.
Section
3. Definitions
Except
as
otherwise defined in the Plan, the following terms shall have the meanings
set
forth below:
3.1 "Affiliate"
means, with respect to Sponsor, any entity that directly or indirectly, through
one or more intermediaries, controls, or is controlled by, or is under common
control with Sponsor.
3.2 "Award"
means individually or collectively, a grant under the Plan of Nonqualified
Stock
Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock,
Performance Units, Performance Shares, or other Stock Unit Awards.
3.3 "Award
Date" or "Grant Date" means the date on which an Award is made by the Committee
under this Plan.
3.4 "Award
Agreement" or "Agreement" means a written agreement implementing the grant
of
each Award signed by an authorized officer of the Sponsor and by the
Participant.
3.5 "Beneficial
Owner" shall have the meaning ascribed to such term in Rule 13d-3 under the
Exchange Act.
3.6 "Board"
or "Board of Directors" means the Board of Directors of the
Sponsor.
3.7 "Cashless
Exercise" means the exercise of an Option by the Participant in compliance
with
Section 13(k) of the Exchange Act and with the Federal Reserve Board's
Regulation T (or any successor provision) or as otherwise permitted by the
Committee through the use of a brokerage firm to make payment to the Sponsor
of
the exercise price either from the proceeds of a loan to the Participant from
the brokerage firm or from the proceeds of the sale of Stock issued pursuant
to
the exercise of the Option, and upon receipt of such payment, the Sponsor
delivers the exercised Stock to the brokerage firm. The date of exercise of
a
Cashless Exercise shall be the date the broker executes the sale of exercised
Stock, or if no sale is made, the date the broker receives the exercise loan
notice from the Participant to pay the Sponsor for the exercised
Stock.
3.8 "Cause"
means:
(a) embezzlement
or theft from the Company, or other acts of dishonesty, disloyalty or otherwise
injurious to the Company;
(b) disclosing
without authorization proprietary or confidential information of the
Company;
(c) committing
any act of negligence or malfeasance causing injury to the Company;
(d) conviction
of a crime amounting to a felony under the laws of the United States or any
of
the several states;
(e) any
violation of the Company’s Code of Ethics; or
(f) unacceptable
job performance which has been substantiated in accordance with the normal
practices and procedures of the Company.
3.9 "Change
in Control" means 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
(f) 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 on account of an event described
in paragraphs (a), (b), (c), (d) or (e) of this Section 3.9 until a majority
of
the members of the Board receive written certification from the Committee that
such event has occurred. Any determination that an event described in this
Section 3.9 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 Participants and their beneficiaries for all purposes of the
Plan.
3.10 "CEO"
means the chief executive officer of the Sponsor.
3.11 "Code"
means the Internal Revenue Code of 1986, as amended from time to
time.
3.12 "Committee"
means the Organization and Compensation Committee of the Board, comprised solely
of Outside Directors, which will administer the Plan pursuant to Section 4
herein.
3.13 "Company"
means Progress Energy, Inc., including all Affiliates, or any successor
thereto.
3.14 "Continuing
Director" means the members of the Board as of January 1, 2007; provided,
however, that any person becoming a director subsequent to such date whose
election or nomination for election was supported by seventy-five percent (75%)
or more of the directors
who then comprised Continuing Directors shall be considered to be a Continuing
Director.
3.15 "Covered
Participant" means a Participant who is a "covered employee" as defined in
Section 162(m)(3) of the Code, and the regulations promulgated
thereunder.
3.16 "Department"
means the Human Resources Department of Progress Energy Service Company,
LLC.
3.17 "Designated
Beneficiary" means the beneficiary designated by the Participant, pursuant
to
procedures established by the Department, to receive amounts due to the
Participant or to exercise any rights of the Participant to the extent permitted
hereunder in the event of the Participant's death. If the Participant does
not
make an effective designation, then the Designated Beneficiary will be deemed
to
be the Participant's estate.
3.18 "Disability"
means (i) the mental or physical disability, either occupational or
non-occupational in origin, of the Participant defined as "total disability"
in
the Long-term Disability Plan of the Sponsor currently in effect and as amended
from time to time; or (ii) a determination by the Committee of "Total
Disability" based on medical evidence that precludes the Participant from
engaging in any occupation or employment for wage or profit for at least twelve
months and appears to be permanent. In the case of Awards of Incentive Stock
Options, "Disability" shall have the meaning set forth in Section 22(e)(3)
of
the Code.
3.19 "Divestiture"
means the sale (including the spin-off) of, or closing by, the Company of the
business operations in which the Participant is employed.
3.20 "Early
Retirement" means retirement of a Participant from employment with the Company
after age 55, but prior to age 65 under the provisions of the Sponsor's Pension
Plan or the Sponsor's Supplemental Senior Executive Retirement Plan. In the
event of a change in the Sponsor's Pension Plan such that there is no longer
a
definition of "Early Retirement" or the Participant is not a participant in
the
Sponsor's Pension Plan for purposes of this plan, "Early Retirement" shall
mean
retirement before age 65 after reaching the 55th birthday together with
completion of 15 years of Vesting Service, or after completion of 35 years
of
Vesting Service with no age limitation.
3.21 "Exchange
Act" means the Securities Exchange Act of 1934, as amended.
3.22 "Executive
Officer" means an individual designated as an "officer" for purposes of Section
16 of the Securities Exchange Act of 1934 and as an "executive officer" for
Item
401(b) of Regulation S-K by the Board pursuant to resolutions adopted by the
Board from time to time.
3.23 "Fair
Market Value" means, on any given date, the closing price of Stock as reported
on the New York Stock Exchange composite tape on such day or, if no shares
of
Stock were traded on the New York Stock Exchange on such day, then on the next
preceding day that Stock was traded on such exchange, all as reported by such
source as the Committee may select. In the case of a Cashless Exercise, Fair
Market Value means the price of the Stock at the date and time the broker
executes the sale of exercised Stock.
3.24 "Full-time
Employee" means an employee of the Company designated by the Department as
being
a "regular, full-time employee" who is eligible for all plans and programs
of
the Company set forth for such employees. This designation excludes all
part-time, temporary, leased or contract employees and consultants to the
Company.
3.25 "Incentive
Stock Option" means an option to purchase Stock, granted under Section 7 herein,
which is designated as an incentive stock option by the Committee and is
intended to meet the requirements of Section 422 of the Code.
3.26 "Key
Employee" means an officer or other employee of the Company who is selected
for
participation in the Plan in accordance with Section 4.2.
3.27 "Nonqualified
Stock Option" means an Option to purchase Stock, granted under Section 7 herein,
which is not intended to be an Incentive Stock Option.
3.28 "Normal
Retirement" means the retirement of any Participant under the Sponsor's Pension
Plan at age 65. In the event of a change in the Sponsor's Pension Plan such
that
there is no longer a definition of "Normal Retirement" or the Participant is
not
a participant in the Sponsor's Pension Plan, for purposes of the Plan "Normal
Retirement" shall mean retirement upon attaining the age of 65 years and
completing five years of Vesting Service.
3.29 "Option"
means an Incentive Stock Option or a Nonqualified Stock Option.
3.30 "Other
Stock Unit Award" means Awards of Stock or other Awards that are valued in
whole
or in part by reference to, or are otherwise based on, shares of Stock or other
securities of the Sponsor.
3.31 "Outside
Director" means a member of the Board of Directors of the Sponsor who is not
an
employee of the Company.
3.32 "Participant"
means a Key Employee or Outside Director who has been granted an Award under
the
Plan.
3.33 "Performance-Based
Exception" means the performance-based exception from the tax deductibility
limitations of Code Section 162(m).
3.34 "Performance
Measures" mean, unless and until the Committee proposes for shareholder approval
and the Sponsor's shareholders approve a change in the general performance
measures set forth in this article, the attainment of which may determine the
degree of payout and/or vesting with respect to Awards which are designed to
qualify for the Performance-Based Exception, measure(s) chosen from among the
following alternatives:
(a) Total
shareholder return (absolute or peer-group comparative)
(b) Stock
price increase (absolute or peer-group comparative)
(c) Dividend
payout as a percentage of net income (absolute or peer-group
comparative)
(d) Return
on
equity (absolute or peer-group comparative)
(e) Return
on
capital employed (absolute or peer-group comparative)
(f) Cash
flow, including operating cash flow, free cash flow, discounted cash flow return
on investment, and cash flow in excess of cost of capital
(g) Economic
value added (income in excess of capital costs)
(h) Cost
per
KWH (absolute or peer-group comparative)
(i) Revenue
per KWH (absolute or peer-group comparative)
(j) Market
share
(k) Customer
satisfaction as measured by survey instruments (absolute or peer-group
comparative)
(l) Earnings
before interest, and taxes (absolute or peer-group comparative)
(m) Earnings
before interest, taxes, depreciation, and amortization (absolute or peer-group
comparative)
The
Committee shall have the discretion to adjust the determinations of the degree
of attainment of the pre-established Performance Measures; provided, however,
that Awards which are designed to qualify for the Performance-Based Exception
may not be adjusted upward (the Committee shall retain the discretion to adjust
such Awards downward), except to the extent permitted under Code Section 162(m)
and the regulations thereunder to reflect corporate reorganizations or other
events.
3.35 "Performance
Award" means a performance-based Award, which may be in the form of either
Performance Shares or Performance Units.
3.36 "Performance
Period" means the time period designated by the Committee during which
performance goals must be met.
3.37 "Performance
Share" means an Award, designated as a Performance Share, granted to a
Participant pursuant to Section 10 herein, the value of which is determined,
in
whole or in part, by the value of Stock in a manner deemed appropriate by the
Committee and described in the Agreement or Sub-Plan.
3.38 "Performance
Unit" means an Award, designated as a Performance Unit, granted to a Participant
pursuant to Section 10 herein, the value of which is determined, in whole or
in
part, by the attainment of pre-established goals relating to Sponsor's or
Company's financial or operating performance as deemed appropriate by the
Committee and described in the Agreement or Sub-Plan.
3.39 "Period
of Restriction" means the period during which the transfer of shares of
Restricted Stock is restricted, pursuant to Section 9 of the Plan.
3.40 "Person"
shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange
Act and used in Sections 13(d) and 14(d) thereof, including a "group" as defined
in Section 13(d).
3.41 "Plan"
means the Progress Energy, Inc. 2002 Equity Incentive Plan as herein described
and as hereafter from time to time amended.
3.42 "Restricted
Stock" means an Award of Stock granted to a Participant pursuant to Section
9 of
the Plan.
3.43 "Rule
16b-3" means Rule 16b-3 under Section 16(b) of the Exchange Act or any successor
rule as amended from time to time.
3.44 “Section
409A” means Section 409A of the Code, or any successor section under the Code,
as amended and as interpreted by final or proposed regulations promulgated
thereunder from time to time and by related guidance.
3.45 "Section
162(m)" means Section 162(m) of the Code, or any successor section under the
Code, as amended from time to time and as interpreted by final or proposed
regulations promulgated thereunder from time to time.
3.46 "Securities
Act" means the Securities Act of 1933 and the rules and regulations promulgated
thereunder, or any successor law, as amended from time to time.
3.47 "Secretary"
means the corporate secretary of the Sponsor.
3.48 "Sponsor"
means Progress Energy, Inc., or any successor thereto.
3.49 "Sponsor's
Pension Plan" means the Progress Energy Pension Plan, as amended from time
to
time, and any successor thereto.
3.50 "Stock"
means the common stock of the Sponsor.
3.51 "Stock
Appreciation Right" means the right to receive an amount equal to the excess
of
the Fair Market Value of a share of Stock (as determined on the date of
exercise) over the Fair Market Value of the Stock on the Award Date of the
Stock
Appreciation Right.
3.52 "Stock
Unit Award" means an Award of Stock or units granted under Section 11 of the
Plan.
3.53 "Sub-Plan"
means a written document that permits the grant of Awards consistent with the
provisions of this Plan.
3.54 "Vesting
Service" means each year of employment with the Company in which a Participant
works one thousand (1,000) hours.
Section
4. Administration
4.1 The
Committee.
The
Plan shall be administered and interpreted by the Committee which shall have
full authority and all powers necessary or desirable for such administration.
The express grant in this Plan of any specific power to the Committee shall
not
be construed as limiting any power or authority of the Committee. In its sole
and complete discretion the Committee may adopt, alter, suspend and repeal
any
such administrative rules, regulations, guidelines, and practices governing
the
operation of the Plan as it shall from time to time deem advisable. In addition
to any other powers and, subject to the provisions of the Plan, the Committee
shall have the following specific powers: (i) to determine the terms and
conditions upon which the Awards may be made and exercised; (ii) to determine
all terms and provisions of each Agreement and/or Sub-Plan, which need not
be
identical for types of Awards nor for the same type of Award to different
Participants; (iii) to construe and interpret the Agreements, Sub-Plans and
the
Plan; (iv) to establish, amend, or waive rules or regulations for the Plan's
administration; (v) to accelerate the exercisability of any Award, the length
of
a Performance Period or the termination of any Period of Restriction except
for
Awards to Covered Participants that are intended to qualify for the
Performance-Based Exception, other than as may be otherwise provided under
the
terms of such an Award in the event of a Change in Control or as hereinafter
specified; and (vi) to make all other determinations and take all other actions
necessary or advisable for the administration of the Plan, including a
determination of a Change in Control under Section 3.9. The Committee may take
action by a meeting in person, by unanimous written consent, or by meeting
with
the assistance of communications equipment which allows all Committee members
participating in the meeting to communicate in either oral or written form.
The
Committee may seek the assistance or advice of any persons it deems necessary
to
the proper administration of the Plan.
4.2 Selection
of Participants Other Than Outside Directors.
Subject
to Section 5 of the Plan, the Committee shall have sole and complete discretion
in determining Key Employees who shall participate in the Plan; provided,
however, the Committee may delegate to the CEO the authority to designate Key
Employees and/or Awards to be made to Key Employees who are not Executive
Officers, subject to any limitations imposed by the Committee on the designation
of Key Employees including a fixed maximum Award amount for any group of Key
Employees and/or a maximum Award amount for any one Key Employee, as determined
by the Committee. Awards made to the Executive Officers shall be determined
by
the Committee.
4.3 Awards
to Outside Directors.
Awards
to Outside Directors shall be made in the sole discretion of the full Board
of
Directors; provided, however, that Awards of Options to Outside Directors shall
be limited to Nonqualified Stock Options.
4.4 Award
Agreements and Sub-Plans.
Each
Award granted under the Plan shall be granted either under the terms of an
Award
Agreement and/or a Sub-Plan. Award Agreements and Sub-Plans shall specify the
terms, conditions and any rules applicable to the Award, including but not
limited to the effect of transferability, a Change in Control, or death,
Disability, Divestiture, Early Retirement, Normal Retirement or other
termination of employment of the Participant on the Award. If the Award is
granted under the terms of an Award Agreement, the Award Agreement shall be
signed by an authorized representative of the Sponsor and the Participant,
and a
copy of the signed Award Agreement shall be provided to the Participant. If
the
Award is granted under the terms and conditions of a Sub-Plan, the Sub-Plan
shall be approved by the Committee as an Exhibit to the Plan, and a copy of
the
Sub-Plan or a summary description thereof shall be provided to each
Participant.
4.5 Committee
Decisions.
All
determinations and decisions made by the Committee pursuant to the provisions
of
the Plan shall be final, conclusive, and binding upon all persons, including
the
Company, its employees, Participants, and Designated Beneficiaries, and the
Sponsor's shareholders, except when the terms of any sale or award of shares
of
Stock or any grant of rights or Options under the Plan are required by law
or by
the Articles of Incorporation or Bylaws of the Sponsor to be approved by the
Sponsor's Board of Directors or shareholders prior to any such sale, award
or
grant.
4.6 Rule
16b-3, Section 162(m) and Section 409A.
Notwithstanding any other provision of the Plan, the Committee may impose such
conditions on any Award, and the Board may amend the Plan in any such respects,
as may be required to satisfy the requirements of Rule 16b-3, Section 162(m)
and
Section 409A.
4.7 Indemnification
of Committee.
In
addition to such other rights of indemnification as they may have as Outside
Directors or as members of the Committee, the members of the Committee shall
be
indemnified by the Sponsor against reasonable expenses incurred from their
administration of the Plan. Such reasonable expenses include, but are not
limited to, attorneys' fees actually and reasonably incurred in connection
with
the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any Award
granted or made hereunder, and all amounts reasonably paid by them in settlement
thereof or paid by them in satisfaction of a judgment in any such action, suit
or proceeding, if such members acted in good faith and in a manner which they
believed to be in, and not opposed to, the best interests of the
Company.
Section
5. Eligibility
Selection
of Participants by the Committee or the CEO under Section 4.2 shall be subject
to the following limitations: (i) no person owning, directly or indirectly,
more
than five percent (5%) of the total combined voting power of all classes of
Stock shall be eligible to participate under the Plan; and (ii) only Full-time
Employees shall be eligible to participate under the Plan, except that Outside
Directors may be granted Nonqualified Stock Options or Restricted Stock Awards
in accordance with Section 4.3.
Section
6. Shares
of Stock Subject to the Plan
6.1 Number
of Shares.
Subject
to adjustment as provided below and except as otherwise provided in Section
6.4
and Section 6.5 herein, the maximum aggregate number of shares of Stock that
may
be issued pursuant to Awards made under the Plan shall not exceed fifteen
million (15,000,000) shares of Stock, which may be in any combination of
Options, Restricted Stock, Performance Shares or any other right or Option
which
is payable in the form of Stock. Additionally, shares of Stock available for
issuance on the Effective Date under the 1997 Plan shall be transferred to
the
Plan and added to the shares available for the grant of Awards under this Plan.
The maximum aggregate number of shares that may be granted in the form of
Incentive Stock Options shall be ten million (10,000,000). The maximum aggregate
number of shares of Stock that may be granted in the form of Restricted Stock
shall be three million (3,000,000) and the maximum aggregate number of shares
of
Stock (or derivatives of shares of Stock) that may be granted in the form of
Performance Shares, Performance Units or other Stock Unit Awards shall be four
million (4,000,000). Shares of Stock may be available from the authorized but
unissued shares of Stock. Except as provided in Sections 6.2 and 6.3 herein,
the
issuance of shares of Stock in connection with the exercise of, or as other
payment for, Awards under the Plan shall reduce the number of shares of Stock
available for future Awards under the Plan.
6.2 Lapsed
Awards of Forfeited Shares of Stock.
In the
event that (i) any Option or other Award granted under the Plan or the 1997
Plan
terminates, expires, or lapses for any reason other than exercise of the Award,
or (ii) if shares of Stock issued pursuant to the Awards are canceled or
forfeited for any reason, the number of shares of Stock available for Awards
under the Plan shall be increased by the number of shares of Stock that were
subject to such Award; provided, however, that this provision shall not be
construed to allow for the issuance of treasury stock.
6.3 Delivery
of Shares of Stock as Payment.
In the
event a Participant pays for any Option or other Award granted under the Plan
through the delivery of previously acquired shares of Stock, the number of
shares of Stock available for Awards under the Plan shall be increased by the
number of shares of Stock surrendered by the Participant, subject to Rule 16b-3
as interpreted by the Securities and Exchange Commission or its staff; provided,
however, that this provision shall not be construed to allow for the issuance
of
treasury stock.
6.4 Capital
Adjustments.
The
number and class of shares of Stock subject to each outstanding Award, the
maximum number of shares of Stock that may be subject to an Award under Sections
7.7, 8.5, 9.6, 10.6, and 11.1, the Option Price (as hereinafter defined) and
the
aggregate number, type and class of shares of Stock for which Awards thereafter
may be made shall be adjusted in the case of an event described in subsection
(a) or (b) below; provided, however, that with respect to Incentive Stock
Options such adjustment shall be made in a manner consistent with Section 424(a)
of the Code and, with respect to Awards to Executive Officers, in a manner
consistent with the requirements of Section 162(m) of the Code and the
regulations promulgated thereunder. Such events include but are not limited
to
the following:
(a) If
the
outstanding shares of Stock of the Sponsor are increased, decreased or exchanged
through merger, consolidation, sale of all or substantially all of the property
of the Sponsor, reorganization, recapitalization, reclassification, stock
dividend, stock split or other distribution in respect to such shares of Stock,
for a different number or type of shares of Stock, or if additional shares
of
Stock or new or different shares of Stock are distributed with respect to such
shares of Stock, an appropriate and proportionate adjustment shall be made
in:
(i) the maximum number of shares of Stock available for the Plan as provided
in
Section 6.1 herein, (ii) the type of shares of Stock or other securities
available for the Plan, (iii) the number of shares of Stock subject to any
then
outstanding Awards under the Plan, and (iv) the price (including exercise price)
for each share of Stock (or other kind of shares or securities) subject to
then
outstanding Awards, but without change in the aggregate purchase price as to
which such Options remain exercisable or Restricted Stock
releasable.
(b) If
other
events not specified above in this Section 6.4, such as any extraordinary cash
dividend, split-up, spin-off, combination, exchange of shares, warrants or
rights offering to purchase Stock, or other similar corporate event affect
the
Stock such that an adjustment is necessary to maintain the benefits or potential
benefits intended to be provided under this Plan, then the Committee shall
make
adjustments to any or all of (i) the number and type of shares of Stock which
thereafter may be optioned and sold or awarded or made subject to Stock
Appreciation Rights under the Plan, (ii) the grant, exercise or conversion
price
of any Award made under the Plan thereafter, and (iii) the number and price
(including Exercise Price) of each share of Stock (or other kind of shares
or
securities) subject to then outstanding Awards, but without change in the
aggregate purchase price as to which such Options remain exercisable or
Restricted Stock releasable. Any adjustment as provided above for Awards that
are intended to qualify for the Performance-Based Exception shall be subject
to
any applicable restrictions set forth in Section 12 or in Section
162(m).
Any
adjustment made by the Committee pursuant to the provisions of this Section
6.4
shall be final, binding and conclusive. A notice of such adjustment, including
identification of the event causing such an adjustment, the calculation method
of such adjustment, and the change in price and the number of shares of Stock,
or securities, cash or property purchasable subject to each Award shall be
sent
to each affected Participant. No fractional interests shall be issued under
the
Plan based on such adjustments, and shall be forfeited.
6.5 Acquisitions.
In
connection with the acquisition of any business by the Company or any of its
Affiliates, any outstanding grants, awards or sales of options or other similar
rights pertaining to such business may be assumed or replaced by grants or
awards under the Plan upon such terms and conditions as the Committee
determines. The date of any such grant or award shall relate back to the date
of
the initial grant or award being assumed or replaced, and service with the
acquired business shall constitute service with the Company for purposes of
such
grant or award. Any shares of Stock underlying any grant or award or sale
pursuant to any such acquisition shall be disregarded for purposes of applying
the limitations, and shall not reduce the number of shares of Stock available,
under Section 6.1 above. Notwithstanding any provision in this Plan to the
contrary, the exercise price of any such Award may be below Fair Market Value
in
order to replace the value of another award in the sole discretion of the
Committee.
Section
7. Stock
Options
7.1 Grant
of Stock Options.
Subject
to the terms and provisions of the Plan and applicable law, the Committee,
at
any time and from time to time, may grant Options to Key Employees, and with
respect to Outside Directors pursuant to approval by the Board, as it shall
determine. Except with respect to Outside Directors, the Committee shall have
sole and complete discretion in determining the type of Option granted, the
Option Price (as hereinafter defined), the duration of the Option, the number
of
shares of Stock to which an Option pertains, any conditions imposed upon the
exercisability of the Options, the conditions under which the Option may be
terminated and any such other provisions as may be warranted to comply with
the
law or rules of any securities trading system or stock exchange. Notwithstanding
the preceding, the Committee may delegate to the CEO authority to grant options
in accordance with Section 4.2. Each Option grant shall have such specified
terms and conditions detailed in an Award Agreement. The Agreement shall specify
whether the Option is intended to be an Incentive Stock Option within the
meaning of Section 422 of the Code, or a Nonqualified Stock Option.
7.2 Option
Price.
The
exercise price per share of Stock covered by an Option ("Option Price") shall
be
determined at the time of grant by the Committee, subject to Section 6.5 hereof
and the limitation that the Option Price shall not be less than one hundred
percent (100%) of the Fair Market Value of the Stock on the Grant
Date.
7.3 Exercisability.
Options
granted under the Plan shall be exercisable at such times and be subject to
such
restrictions and conditions as the Committee or the CEO, as the case may be,
shall determine, which will be specified in the Award Agreement and need not
be
the same for each Participant. However, no Option may be exercisable within
the
first year following the Grant Date, except in the event of a Change in Control,
or after the expiration of ten (10) years from the Grant Date.
7.4 Limitations
on Incentive Stock Options.
Incentive Stock Options may be granted only to Participants who are employees
of
the Sponsor or of a "Parent Corporation" or "Subsidiary Corporation" (as defined
in Sections 424(e) and (f) of the Code, respectively) at the Grant Date. The
aggregate Fair Market Value (determined as of the time the Stock Option is
granted) of the Stock with respect to which Incentive Stock Options are
exercisable for the first time by a Participant during any calendar year (under
all option plans of the Company and of any Parent Corporation or Subsidiary
Corporation) shall not exceed one hundred thousand dollars ($100,000). For
purposes of the preceding sentence, Incentive Stock Options will be taken into
account in the order in which they are granted. The per-share exercise price
of
an Incentive Stock Option shall not be less than one hundred percent (100%)
of
the Fair Market Value of the Stock on the Grant Date, and no Incentive Stock
Option may be exercised later than ten (10) years after the date it is granted.
In addition, no Incentive Stock Option may be issued to a Participant in tandem
with a Nonqualified Stock Option. Further, Incentive Stock Options may not
be
granted to any Participant who, at the time of grant, owns stock possessing
(after the application of the attribution rules of Section 424(d) of the Code)
more than ten percent (10%) of the total combined voting power of all classes
of
stock of the Company or any Parent Corporation or Subsidiary Corporation, unless
the exercise price of the option is fixed at not less than one hundred ten
percent (110%) of the Fair Market Value of the Stock on the Grant Date and
the
exercise of such Option is prohibited by its terms after the expiration of
five
(5) years from the Grant Date of such Option.
7.5 Method
of Exercise.
Options
shall be exercised by the delivery of a notice from the Participant to the
Secretary (or his or her designee) in the form prescribed by the Committee
setting forth the number of shares of Stock with respect to which the Option
is
to be exercised, accompanied by full payment for the shares of Stock. The Option
Price shall be payable to the Sponsor in full in cash, or its equivalent, or
by
delivery of shares of Stock (not subject to any security interest or pledge)
valued at Fair Market Value at the time of exercise or by a combination of
the
foregoing. In addition, the Committee may permit the Cashless Exercise of the
Option. As soon as practicable after receipt of notice and payment, the Sponsor
shall deliver to the Participant Stock certificates in an appropriate amount
based upon the number of shares of Stock with respect to which the Option is
exercised, issued in the Participant's name.
7.6 Notice.
Each
Participant shall give prompt notice to the Sponsor of any disposition of shares
of Stock acquired upon exercise of an Incentive Stock Option if such disposition
occurs within either two (2) years after the Grant Date or one (1) year after
the date of transfer of such shares of Stock to the Participant upon the
exercise of such Incentive Stock Option.
7.7 Maximum
Award.
The
maximum number of shares of Stock that may be granted in the form of Options
pursuant to any Award granted in a single calendar year to any one Participant
shall be two million (2,000,000).
7.8 Limitation
on Transferability.
Solely
to the extent permitted by the Committee in an Award Agreement and subject
to
the terms and conditions as the Committee shall specify, a Nonqualified Stock
Option (but not an Incentive Stock Option) may be transferred to members of
the
Participant's immediate family (as determined by the Committee) or to trusts,
partnerships or corporations whose beneficiaries, members or owners are members
of the Participant's immediate family, and/or to such other persons or entities
as may be approved by the Committee in advance and set forth in an Award
Agreement, in each case subject to the condition that the Committee be satisfied
that such transfer is being made for estate or tax planning purposes or for
gratuitous or donative purposes, without consideration (other than nominal
consideration) being received therefor. Except to the extent permitted by the
Committee in accordance with the foregoing, an Option shall be nontransferable
otherwise than by will or by the laws of descent and distribution, and shall
be
exercisable during the lifetime of the Participant only by such
Participant.
Section
8. Stock
Appreciation Rights
8.1 Grant
of Stock Appreciation Rights.
Subject
to the terms and provisions of the Plan and applicable law, the Committee,
at
any time and from time to time, may grant freestanding Stock Appreciation
Rights, Stock Appreciation Rights in tandem with an Option, or Stock
Appreciation Rights in addition to an Option. Stock Appreciation Rights granted
in tandem with an Option or in addition to an Option may be granted at the
time
of the Option or at a later time.
8.2 Price.
The
exercise price of each Stock Appreciation Right shall be determined at the
time
of grant by the Committee, subject to the limitation that the grant price shall
not be less than one hundred percent (100%) of Fair Market Value of the Stock
on
the Grant Date.
8.3 Exercise.
The
Participant shall be entitled to receive payment upon exercise of a Stock
Appreciation Right in accordance with Section 8.4.
8.4 Payment.
Upon
exercise of the Stock Appreciation Right, the Participant shall be entitled
to
receive payment from the Company in an amount determined by multiplying (a)
the
difference between the Fair Market Value of a share of Stock on the date of
Exercise of the Stock Appreciation Right over the grant price specified in
the
Award Agreement by (b) the number of shares of Stock with respect to which
the
Stock Appreciation Right is exercised.
8.5 Maximum
Award.
The
maximum number of shares of Stock that may be subject to Stock Appreciation
Rights granted to any Participant during a single calendar year shall be two
million (2,000,000).
Section
9. Restricted
Stock
9.1 Grant
of Restricted Stock.
Subject
to the terms and provisions of the Plan and applicable law, the Committee,
at
any time and from time to time, may grant shares of Restricted Stock under
the
Plan to such Participants, and in such amounts and for such duration and/or
consideration as it shall determine. Participants receiving Restricted Stock
Awards are not required to pay the Sponsor or the Company therefor (except
for
applicable tax withholding) other than the rendering of services and/or other
consideration as determined by the Committee at its sole
discretion.
9.2 Restricted
Stock Agreement.
Each
Restricted Stock grant shall be evidenced by an Agreement that shall specify
the
Period of Restriction; the conditions which must be satisfied prior to removal
of the restriction; the number of shares of Restricted Stock granted; and such
other provisions as the Committee shall determine. The Committee may specify,
but is not limited to, the following types of restrictions in the Award
Agreement: (i) restrictions on acceleration or achievement of terms or vesting
based an any business or financial goals of the Company, including, but not
limited to the Performance Measures set out in Section 3.33, and (ii) any
further restrictions that may be advisable under the law, including requirements
set forth by the Securities Act, any securities trading system or stock exchange
upon which such shares under the Plan are listed.
9.3 Removal
of Restrictions.
Except
as otherwise noted in this Section 9, Restricted Stock covered by each Award
made under the Plan shall be provided to and become freely transferable by
the
Participant after the last day of the Period of Restriction and/or upon the
satisfaction of other conditions as determined by the Committee. Except as
specifically provided in this Section 9, the Committee shall have no authority
to reduce or remove the restrictions or to reduce or remove the Period of
Restriction without the express consent of the shareholders of the Sponsor.
If
the grant of Restricted Stock is performance-based, the total Restricted Period
for any or all shares or units of Restricted Stock so granted shall be no less
than one (1) year. Any other shares of Restricted Stock issued pursuant to
this
Section 9 shall provide that the minimum Period of Restrictions shall be three
(3) years, which Period of Restriction may permit the removal of restrictions
on
no more than one-third (1/3) of the shares of Restricted Stock at the end of
the
first year following the Grant Date, and the removal of the restrictions on
an
additional one-third (1/3) of the shares at the end of each subsequent year.
Notwithstanding the previous sentence, if a Participant terminates employment
from the Company at or following Early Retirement or Normal Retirement, any
time-based Period of Restriction may be removed at the discretion of the
Committee. In no event shall any restrictions be removed from shares of
Restricted Stock during the first year following the Grant Date, except due
to
retirement as described in the preceding sentence or in the event of a Change
in
Control.
9.4 Voting
Rights.
During
the Period of Restriction, Participants in whose name Restricted Stock is
granted under the Plan may exercise full voting rights with respect to those
shares.
9.5 Dividends
and Other Distributions.
During
the Period of Restriction, Participants in whose name Restricted Stock is
granted under the Plan shall be entitled to receive all dividends and other
distributions paid with respect to those shares. If any such dividends or
distributions are paid in shares, the shares shall be subject to the same
restrictions on transferability as the Restricted Stock with respect to which
they were distributed.
9.6 Maximum
Award.
The
maximum number of shares of Stock that may be granted in the form of Restricted
Stock pursuant to an Award granted to a Participant during a single calendar
year shall be two hundred fifty thousand (250,000).
Section
10. Performance-Based
Awards
10.1 Grant
of Performance Awards.
Subject
to the terms and provisions of the Plan and applicable law, the Committee,
at
any time and from time to time, may issue Performance Awards in the form of
either Performance Units or Performance Shares to Participants subject to the
Performance Measures and Performance Period as it shall determine. The Committee
shall have complete discretion in determining the number and value of
Performance Units or Performance Shares granted to each Participant.
Participants receiving Performance Awards are not required to pay the Sponsor
or
a Subsidiary or Affiliate therefor (except for applicable tax withholding)
other
than the rendering of services.
10.2 Value
of Performance Awards.
The
Committee shall determine the number and value of Performance Units or
Performance Shares granted to each Participant as a Performance Award. The
Committee shall set Performance Measures in its discretion for each Participant
who is granted a Performance Award. The extent to which such Performance
Measures are met will determine the value of the Performance Unit to the
Participant or the number of Performance Shares earned by the Participant.
Such
Performance Measures may be particular to a Participant, may relate to the
performance of the Affiliate which employs him or her, may be based on the
division which employs him or her, may be based on the performance of the
Company generally, or a combination of the foregoing. The terms and conditions
of each Performance Award will be set forth in an Agreement and/or a
Sub-Plan.
10.3 Settlement
of Performance Awards.
After a
Performance Period has ended, the holder of a Performance Unit or Performance
Share shall be entitled to receive the value thereof based on the degree to
which the Performance Measures established by the Committee and set forth in
the
Agreement and/or Sub-Plan have been satisfied.
10.4 Form
of Payment.
Payment
of the amount to which a Participant shall be entitled upon the settlement
of a
Performance Award shall be made in cash, Stock, or a combination thereof as
determined by the Committee. Payment may be made in a lump sum or installments
as prescribed by the Committee.
10.5 Deferral
of Performance Awards.
The
Committee may permit a Participant to elect, in accordance with Section 409A
and
rules prescribed by the Committee, not to receive a distribution upon the
vesting of such Performance Award and instead have the Company continue to
maintain the Performance Award on its books of account.
10.6 Maximum
Award.
The
maximum number of shares of Stock that may be the subject of a Performance
Share
Award granted to a Participant in a single calendar year shall be two hundred
fifty thousand (250,000) shares or if less, ten million dollars ($10,000,000)
of
Stock (rounded to the nearest whole share). The maximum amount of compensation
payable, without regard to any deferred amounts, to a Participant pursuant
to
the grant of Performance Unit Awards in any calendar year shall be ten million
dollars ($10,000,000).
Section
11. Other
Stock-Based Awards
11.1 Grant
of Other Stock-Based Awards.
Subject
to the terms and provisions of the Plan and applicable law, the Committee,
at
any time and from time to time, may issue to Participants, either alone or
in
addition to other Awards made under the Plan, Stock Unit Awards which may be
in
the form of or based on Stock or other securities. The maximum number of shares
of Stock that may be granted in any calendar year to a Participant as part
of a
Stock Unit Award shall be two hundred fifty thousand (250,000). If the value
of
any Stock Unit Award is not based entirely on the value of the underlying Stock,
the maximum amount of compensation payable, without regard to any deferred
amounts, to a Participant pursuant to the grant of all such Stock Unit Awards
in
any calendar year shall be two million five hundred thousand dollars
($2,500,000). The Committee, in its sole and complete discretion, may determine
that an Award, either in the form of a Stock Unit Award under this Section
11 or
as an Award granted pursuant to Sections 7 through 10, may provide to the
Participant (i) dividends or dividend equivalents (payable on a current or
deferred basis) and (ii) cash payments in lieu of or in addition to an Award.
Subject to the provisions of the Plan, the Committee in its sole and complete
discretion, shall determine the terms, restrictions, conditions, vesting
requirements, and payment rules (all of which are sometimes hereinafter
collectively referred to as "rules") of the Award. The Award Agreement and/or
Sub-Plan shall specify the rules of each Award as determined by the Committee.
However, each Stock Unit Award need not be subject to identical
rules.
11.2 Rules.
The
Committee, in its sole and complete discretion, may grant a Stock Unit Award
subject to the following rules:
(a) Stock
or
other securities issued pursuant to Stock Unit Awards may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated by a
Participant until the expiration of at least six months from the Award Date,
except that such limitation shall not apply in the case of death or Disability
of the Participant. All rights with respect to such other Stock Unit Awards
granted to a Participant under the Plan shall be exercisable during his or
her
lifetime only by such Participant or his or her guardian or legal
representative.
(b) Stock
Unit Awards may require the payment of cash consideration by the Participant
in
receipt of the Award or provide that the Award, and any Stock or other
securities issued in conjunction with the Award be delivered without the payment
of cash consideration.
(c) The
Committee, in its sole and complete discretion, may establish certain
Performance Measures that may relate in whole or in part to receipt of the
Stock
Unit Awards.
(d) Stock
Unit Awards may be subject to a deferred payment schedule and/or vesting over
a
specified employment period.
(e) The
Committee, in its sole and complete discretion, as a result of certain
circumstances, may waive or otherwise remove, in whole or in part, any
restriction or condition imposed on a Stock Unit Award at the time of
grant.
11.3 Deferral
of Stock Unit Awards.
The
Committee may permit a Participant to elect, in accordance with Section 409A
and
rules prescribed by the Committee, not to receive a distribution upon the
vesting of a Stock Unit Award and instead have the Company continue to maintain
the Stock Unit on its books of account.
Section
12. Special
Provisions Applicable to Covered Participants.
Unless
the Committee in its sole discretion determines that any Award made to a Covered
Employee is not intended to qualify for the Performance-Based Exception under
Section 162(m), Awards subject to Performance Measures that are granted to
Covered Participants under this Plan shall be governed by the conditions of
this
Section 12, in addition to the requirements of Sections 9, 10, and 11 above.
Should conditions set forth under this Section 12 (when applicable) conflict
with the requirements of Sections 9, 10, and 11, the conditions of this Section
12 shall prevail.
(a) Performance
Measures for Covered Participants shall be established by the Committee in
writing prior to the beginning of the Performance Period, or by such other
later
date during the Performance Period as may be permitted under Section 162(m).
Performance Measures for Covered Participants may include alternative and
multiple Performance Measures and may be based on one or more business
criteria.
(b) All
Performance Measures must be objective and must satisfy third party
"objectivity" standards under Section 162(m).
(c) The
Performance Measures shall not allow for any discretion by the Committee as
to
an increase in any Award, but discretion to lower an Award is
permissible.
(d) The
Award
and payment of any Award under this Plan to a Covered Participant with respect
to relevant Performance Period shall be contingent upon the attainment of the
Performance Measures that are applicable to such Covered Participant. The
Committee shall certify in writing prior to payment of any such Award that
such
applicable Performance Measures relating to the Award are satisfied. Approved
minutes of the Committee may be used for this purpose.
(e) All
Awards to Covered Participants under this Plan shall be further subject to
such
other conditions, restrictions, and requirements as the Committee may determine
to be necessary to carry out the purpose of this Section 12.
Section
13. General
Provisions
13.1 Withholding.
The
Company shall have the right to deduct or withhold, or require a Participant
to
remit to the Company, any taxes, including employment taxes, required by law
to
be withheld with respect to the Awards made under this Plan. In the event an
Award is paid in the form of Stock, the Committee may require the Participant
to
remit to the Company the amount of any taxes required to be withheld from such
payment in Stock, or, in lieu thereof the Company may withhold (or the
Participant may be provided the opportunity to elect to tender) the number
of
shares of Stock equal in Fair Market Value to the amount required to be
withheld.
13.2 No
Right to Employment.
No
granting of an Award shall be construed as a right to employment with the
Company.
13.3 Rights
as Shareholder.
Subject
to the Award provisions, no Participant or Designated Beneficiary shall be
deemed a shareholder of the Sponsor nor have any rights as such with respect
to
any shares of Stock to be provided under the Plan until he or she has become
the
holder of such shares. Notwithstanding the aforementioned, with respect to
Stock
granted under a Restricted Stock Agreement under this Plan, the Participant
or
Designated Beneficiary of such Award shall be deemed the owner of such shares.
As such, unless contrary to the provisions herein or in any such related Award
Agreement, such shareholder shall be entitled to full voting, dividend and
distribution rights as provided any other Sponsor shareholder.
13.4 Construction
of the Plan.
The
Plan, and its rules, rights, Agreements, Sub-Plans and regulations, shall be
governed, construed, interpreted and administered in accordance with applicable
Federal laws, or to the extent that Federal laws do not apply, the laws of
the
State of North Carolina. In the event any provision of the Plan shall be held
invalid, illegal or unenforceable, in whole or in part, for any reason, such
determination shall not affect the validity, legality or enforceability of
any
remaining provision, or portion of provision, of the Plan overall, which shall
remain in full force and effect.
13.5 Amendment
of Plan.
The
Committee or the Board of Directors may amend, suspend, or terminate the Plan
or
any portion thereof at any time, provided (a) such amendment is made with
shareholder approval if such approval is necessary to comply with any tax or
regulatory requirement, including for these purposes any approval requirement
for the Performance-Based Exception under Section 162(m), and (b) such amendment
may not adjust or amend the exercise price of Options previously granted to
a
Participant without further shareholder approval except as provided in Sections
6.4 and 6.5 hereof. The Committee in its discretion may amend the Plan so as
to
conform with any applicable regulatory requirements subject to any provisions
to
the contrary specified herein.
13.6 Amendment
of Award.
At any
time and in its sole and complete discretion, the Committee may amend any Award
for the following reasons: (i) additions and/or changes are made to the Code,
any federal or state securities law, or other law or regulations subsequent
to
the Grant Date, and have an impact on the Award; or (ii) for any other reason
not described in clause (i), provided (a) such amendment does not adversely
affect a Participant or, if it does, provided the Participant gives his or
her
consent to such amendment, and (b) such amendment may not adjust or amend the
exercise price of Options previously granted to a Participant without further
shareholder approval except as provided in Sections 6.4 and 6.5
hereof.
13.7 Exemption
from Computation of Compensation for Other Purposes.
By
accepting an Award under this Plan, each Participant agrees that such Award
shall be considered special incentive compensation and will be exempt from
inclusion as "wages" or "salary" for purposes of calculating benefits under
pension, profit sharing, disability, severance, life insurance, and other
employee benefit plans of the Company, except as otherwise provided in those
benefit plans.
13.8 Legend.
In its
sole and complete discretion, the Committee may elect to legend certificates
representing shares of Stock sold or awarded under the Plan, to make appropriate
references to the restrictions imposed on such shares.
13.9 Executive
Officers and Covered Participants.
All
Award Agreements and/or Sub-Plans for Participants subject to Section 16(b)
shall be deemed to include any such additional terms, conditions, limitations
and provisions as Rule 16b-3 requires, unless the Committee in its discretion
determines that any such Award should not be governed by Rule 16b3. All Awards
subject to the Performance-Based Exception shall be deemed to include any such
additional terms, conditions, limitations and provisions as are necessary to
comply with the Performance-Based Compensation exemption of Section 162(m),
unless the Committee, in its sole discretion, determines that an Award to a
Covered Participant is not intended to qualify for the Performance-Based
Exception.
13.10 Change
in Control.
In the
event of a Change in Control, the Committee may provide, in its sole and
complete discretion, either within the terms of the Award Agreement or
subsequently, for the acceleration of the payment and/or vesting of any Award,
the extension of the time during which an Award is exercisable to its full
term
regardless of a Participant's termination of employment with the Company and/or
the release of any restrictions on any Award.
13.11 Divestiture.
In the
event of a Divestiture, the Committee may provide, in its sole and complete
discretion, either within the terms of the Award Agreement or subsequently,
for
the acceleration of the payment and/or vesting of any Award, the extension
of
the time during which an Award is exercisable to its full term regardless of
a
Participant's termination of employment with the Company and/or the release
of
any restrictions on any Award or the assumption of an Award as contemplated
in
Section 13.14.
13.12 Unfunded
Obligation.
Nothing
in this Plan shall be interpreted or construed to require the Company in any
manner to fund any obligation to the Participants or any Designated Beneficiary.
Nothing contained in this Plan nor any action taken hereunder shall create,
or
be construed to create a trust of any kind, or a fiduciary relationship between
the Company and/or the Committee, and the Participants and/or any Designated
Beneficiary. To the extent that any Participant or Designated Beneficiary
acquires a right to receive payments under this Plan, such rights shall be
no
greater than the rights of any unsecured general creditor of the
Sponsor.
13.13 Plan
Expenses.
All
reasonable expenses of the Plan shall be paid by the Company.
13.14 Transfer.
The
sponsorship of this Plan may be assumed by any Affiliate of the Sponsor in
the
case of a reorganization of the Sponsor and its Affiliates, or by any successor
in interest of the Sponsor. Further, in the event any Award under the Plan
is
assumed by an Affiliate or another entity in connection with the disposition
or
sale of any business of the Sponsor and its Affiliates, the Award so assumed
shall be cancelled under the Plan.
13.15 Deferred
Compensation.
In the
event an Award is considered “deferred compensation,” as defined for purposes of
Section 409A, such Award shall be deemed to include such additional terms,
conditions, limitations and provisions as may be required for it not to be
subject to excise tax under Section 409A. In no event may the time or schedule
of any payment of deferred compensation under the Plan be accelerated except
as
provided under Section 409A.
IN
WITNESS WHEREOF, this instrument has been executed this 15th day of December,
2006
PROGRESS
ENERGY,
INC.
By:
/s/
Robert
B. McGehee
Robert
B. McGehee
Chief Executive Officer
239485
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