EXHIBIT 10.62


SEPARATION
AND SETTLEMENT AGREEMENT


This
Separation and Settlement Agreement (this “Agreement”) is entered into as of
December 31, 2012 by and between Jeffrey J. Lyash (the “Executive”), and Duke
Energy Corporation, a Delaware corporation (“Duke Energy”).  The Executive and
Duke Energy are referred to as the “Parties,” and each as a “Party,” in this
Agreement.  


WHEREAS,
the Executive has been employed by Duke Energy and its affiliates as Executive
Vice President of Energy Supply; 


WHEREAS,
the Executive is a participant in the Progress Energy, Inc. Management
Change-in-Control Plan (the “CIC Plan”) and party to an employment agreement
with Progress Energy, Inc. (the “Employment Agreement”) signed as of May 30,
2007; and


WHEREAS,
the Executive has provided notice of his intent to resign, and the Executive
and Duke Energy wish to set forth their mutual agreement as to the terms and
conditions of such resignation;


NOW,
THEREFORE, Duke Energy and the Executive hereby agree as follows:


1.               Resignation. 
Effective as of December 31, 2012 (the “Resignation Date”), the Executive
hereby resigns from his employment with Duke Energy and from all other
positions the Executive then holds with respect to Duke Energy and its
subsidiaries or affiliates (Duke Energy and all of its subsidiaries and
affiliates, including Progress Energy, Inc. and any other predecessor entities,
are hereinafter referred to as the “Affiliated Entities”), including as an
officer or member of the board of directors of any Affiliated Entity.  Within
15 business days following the Resignation Date or such earlier time as
required by applicable law, the Executive will be paid all of his salary and
unused vacation earned or accrued through the Resignation Date.  


2.                Separation Payments and
Benefits.    


a.         Subject to the Executive’s
compliance with the terms of this Agreement and the non-revocation of the
release set forth in Paragraph 5 of this Agreement, following the Revocation
Date (as defined in Paragraph 15 of this Agreement), Duke Energy shall pay or
provide to the Executive the payments and benefits contemplated by Section 6.1,
Section 6.2 and Section 7 of the CIC Plan to which the Executive would have
been entitled upon a resignation by the Executive for “good reason” (as set
forth on Exhibit A hereto). 


b.          Consistent with Section 5.08 of
the Agreement and Plan of Merger, by and among Duke Energy, Diamond Acquisition
Corporation and Progress Energy, Inc., dated as of January 8, 2011 (the “Merger
Agreement”), following the Resignation Date, (i) Duke Energy shall provide or
cause to be provided to the Executive coverage under Duke Energy’s directors’
and officers’ insurance policies for events that occurred while the Executive
was a director or officer of any of the Affiliated Entities on the same terms
and conditions applicable to other former senior executives and directors of
Duke Energy generally and (ii) Duke Energy shall cause Progress Energy, Inc. to
indemnify and hold harmless the Executive as provided in Section 5.08(c) of the
Merger Agreement.


c.            Duke Energy shall reimburse the
Executive for any reasonable and necessary business expenses incurred by the
Executive and unreimbursed on or prior to the Resignation Date pursuant to Duke
Energy’s reimbursement policies, within 30 days following the Executive’s
presentation of an invoice to Duke Energy. 


d.            Duke Energy acknowledges and
agrees that the Executive shall not be required to reimburse Duke Energy for
any relocation benefits provided to the Executive in connection with his
relocation to Charlotte in 2012.


e.            Duke Energy agrees to reimburse
the Executive for reasonable attorney’s fees incurred in connection with
reviewing this Agreement, subject to the Executive providing the applicable
documentation (consistent with the terms of Duke Energy’s reimbursement
policies) relating to such attorney’s fees to Duke Energy no later than 30 days
following the Resignation Date.


f.             Except as provided in Paragraphs
1, 2, 3 and 4 of this Agreement, as well as any benefits that are accrued and
vested as of the Resignation Date under employee benefit plans of an Affiliated
Entity in which the Executive participates, the Executive shall be entitled to
no other compensation and/or benefits of any kind from any of the Affiliated
Entities.  For purposes of clarity, the Parties acknowledge and agree that upon
the Resignation Date the Executive shall forfeit, and have no further rights
under, the Retention Award Agreement dated July 9, 2012.


g.            Duke Energy acknowledges that
this Agreement shall not impact the Executive’s rights under the tax qualified
retirement plans sponsored by Duke Energy and its Affiliated Entities.


4.              Equity Awards.  Subject
to the Executive’s compliance with the terms of this Agreement and the
non-revocation of the Release set forth in Paragraph 5 of this Agreement, the
outstanding equity awards under the applicable Progress Energy, Inc. equity
plans held by the Executive as of the Resignation Date shall immediately vest
on the Resignation Date pursuant to Section 6.4 and Section 6.5 of the CIC Plan
(with performance shares vesting at target level).


 







 




 










 








 




 








5.               280G
Matters.  The Executive shall, subject to the Executive’s reasonable
cooperation with Duke Energy in making determinations with respect to Section
280G of the Internal Revenue Code of 1986, as amended (the “Code”), taking into
account the value of reasonable compensation for services to be rendered by the
Executive before or after the Resignation Date, including any non-competition
provisions that apply to the Executive and Duke Energy, be eligible to receive
“Gross-Up Payments” consistent with, but only to the extent provided by,
Section 11 of the CIC Plan.   


6.                Release
of Claims. 


a.         In consideration of and in
exchange for the benefits provided to him under this Agreement, including but
not necessarily limited to Duke Energy’s acceptance of the Executive’s
resignation effective as of the Resignation Date, and the benefits set forth in
Paragraphs 2, 3 and 4 of this Agreement, the Executive, of his own free will,
voluntarily and unconditionally releases and forever discharges (the “Release”)
the Affiliated Entities, their respective directors, officers, employees,
agents, stockholders, successors and assigns (both individually and in their
official capacities with Duke Energy) (the “Duke Releases”) from, any and all
past or present causes of action, suits, agreements or other claims which the
Executive, his dependents, relatives, heirs, executors, administrators,
successors and assigns has or may hereafter have from the beginning of time to
the date hereof against Duke Energy or the Duke Releases upon or by reason of
any matter, cause or thing whatsoever, including, but not limited to, any
matters arising out of his employment by the Affiliated Entities, and the
cessation of said employment or any claim for compensation, and including, but
not limited to, any alleged violation of the Civil Rights Acts of 1964 and
1991, the Equal Pay Act of 1963, the Age Discrimination in Employment Act of
1967, the Rehabilitation Act of 1973, the Employee Retirement Income Security
Act of 1974, the Older Workers Benefit Protection Act of 1990, the Americans with
Disabilities Act of 1990, the North Carolina Equal Employment Protection Act
and any other federal, state or local law, regulation or ordinance, or public
policy, contract or tort law having any bearing whatsoever on the terms and
conditions of employment or termination of employment.  The Release shall not,
however, constitute a waiver of any of the Executive’s rights to compensation
and benefits due under this Agreement.  


b.        The Executive acknowledges that he
has received a copy of this Agreement prior to its execution and has been
advised hereby of his opportunity to review and consider the Release for 21
days prior to its execution.  The Executive further acknowledges that he has
been advised hereby to consult with an attorney prior to executing this
Agreement.  The Executive enters into this Agreement having freely and
knowingly elected, after due consideration, to execute this Agreement and to
fulfill the promises set forth herein.  The Release shall be revocable by the
Executive during the seven-day period following its execution, and shall not
become effective or enforceable until the expiration of such seven-day period. 
In the event of such a revocation, the Executive shall not be entitled to the
consideration under this Agreement set forth in Paragraphs 2, 3 and 4.  


c.         The Executive represents and
warrants that there has been no assignment or other transfer of any interest in
any claim which the Executive may have against Duke Energy or any of the Duke Releases.
The Executive represents that he has not commenced or joined in any claim,
charge, action or proceeding whatsoever against Duke Energy or any of the Duke Releases
arising out of or relating to any of the matters set forth in this Release. The
Executive further agrees that he will not seek or be entitled to any personal
recovery in any claim, charge, action or proceeding whatsoever against Duke
Energy or any of the Duke Releases for any of the matters set forth in the
Release.  


d.        The Executive acknowledges that, in
his decision to enter into this Agreement, including the Release, he has not
relied on any representations, promises or agreements of any kind, including
oral statements by representatives of Duke Energy or any of the Duke Releases,
except as set forth in the Release and this Agreement.


e.        Nothing contained in the Release
will be deemed or construed as an admission of wrongdoing or liability on the
part of Duke Energy or any of the Duke Releases.   


f.         Nothing in this Agreement shall be
construed to prohibit, restrict or otherwise discourage the Executive from
participating in protected activity as defined in 10 CFR 50.7 and Section 211
of the Energy Reorganization Act of 1974, including, but not limited to
reporting any suspected instance of illegal activity of any nature, any nuclear
safety concern, any workplace safety concern, any public safety concern, or any
other matter within the United States Nuclear Regulatory Commission’s
(“NRC”)regulatory responsibilities to the NRC, the United States Department of
Labor, or any other federal or state governmental agency.  This Agreement
further does not prohibit the Executive from participating in any way in any
state or federal administrative,
judicial, or legislative proceeding or investigation with respect to any claims
and matters not resolved and terminated pursuant to this Agreement. With
respect to any claims and matters resolved and terminated pursuant to this
Agreement, the Executive is free to participate in any federal or state
administrative, judicial, or legislative proceeding or investigation if
subpoenaed.  The Executive shall give Duke Energy, through its legal counsel,
notice, including a copy of the subpoena, within 24 hours of receipt
thereof.


7.              Non-disparagement.  The
Executive shall not disparage any of the Affiliated Entities, their directors,
officers, employees, agents, stockholders, successors and assigns (both
individually and in their official capacities with Duke Energy) (the “Duke
Energy Parties”) or any Duke Energy Parties’ goods, services, employees,
customers, business relationships, reputation or financial condition.  Duke
Energy shall instruct its current officers and directors (as such terms are
used for purposes of Section 16 of the Securities Exchange Act of 1934) not to
disparage the Executive and shall treat any such disparagement as a violation
of Duke Energy’s Code of Business Ethics.  For purposes of this Agreement, to
“disparage” means to make statements, whether oral or written, whether direct or
indirect, whether true or false and whether acting alone or through any other
person, that cast the subject of the statement in a critical or unfavorable
light or that otherwise cause damage to, or intend to embarrass, the subject of
the statement.  Nothing in the foregoing will preclude either the Executive or
Duke Energy from providing truthful disclosures as required by applicable law
or legal process. 


 







 




 










 








 




 








8.               
Confidential Information; Restrictive Covenants; Return of Property.   


a.        Confidentiality; Covenant not to
Compete; Non-Interference.  The Executive shall be subject to each of the
covenants set forth in Section 8(g) (Covenant not to Compete), Section 8(h)
(Non-Interference) and Section 8(i) (Confidential Information; Trade Secrets)
of the Employment Agreement.  In addition, unless otherwise made public by Duke
Energy, the Executive will not disclose the existence and any terms of this
Agreement except (i) to financial and legal advisors or spouse (or domestic
partner) under an obligation for such parties to maintain confidentiality, or
(ii) as required by a valid court order, subpoena or legal, regulatory, or
legislative process (and in such event will use his best efforts to obtain a
protective order requiring that all disclosures be kept under court seal) and
will notify Duke Energy promptly upon receipt of such order or subpoena.   


b.        Forfeiture and
Repayments. The Executive agrees that, in the event he violates the provisions
of Paragraph 6 or Paragraph 7 of this Agreement, in any material respect, on or
following the Resignation Date, he will forfeit and not be entitled to any
further payments in accordance with Paragraph 2 or Paragraph 4 of this
Agreement or settlement in accordance with Paragraph 3 and he will be obligated
to repay to Duke Energy any amounts paid (determined as of the date of payment)
after the termination of employment pursuant to the applicable provisions of
Paragraph 2, Paragraph 3 and Paragraph 4 of this Agreement (other than any
amounts paid pursuant to Paragraph 2(c) and Paragraph 2(e) of this
Agreement).  Such amount shall be paid to Duke Energy in cash in a single
lump sum within ten business days after the first date of the violation,
whether or not Duke Energy has knowledge of the violation or has made a demand
for payment.  Any such payment made following such date shall bear interest at
a rate equal to the prime lending rate of Citibank, N.A. (as periodically set)
plus 1%.


c.        Scope of Restrictions;
Consideration.  The Executive acknowledges that the restrictions set forth
in this Paragraph 7 are reasonable and necessary to protect Duke Energy’s
business and goodwill. The Executive acknowledges that if any of these
restrictions or obligations are found by a court having jurisdiction to be
unreasonable or overly broad or otherwise unenforceable, he and Duke Energy
agree that the restrictions or obligations shall be modified by the court so as
to be reasonable and enforceable and if so modified shall be fully enforced.  The
Executive acknowledges and agrees that the compensation and benefits provided
in this Agreement constitute adequate and sufficient consideration for the
covenants made by the Executive in this Paragraph 7.  As further consideration
for the covenants made by the Executive in this Paragraph 7, the Affiliated
Entities have provided the Executive certain proprietary and other confidential
information about Duke Energy, including, but not limited to, business plans
and strategies, budgets and budgetary projections, income and earnings
projections and statements, cost analyses and assessments, and/or business
assessments of legal and regulatory issues.


d.        Return of Property.  The
Executive acknowledges and agrees that all “Company Materials”, which include,
but are not limited to, computers, blackberry, computer software, computer
disks, tapes, printouts, source, HTML and other code, flowcharts, schematics,
designs, graphics, drawings, photographs, charts, graphs, notebooks, customer
lists, sound recordings, other tangible or intangible manifestation of content,
and all other documents whether printed, typewritten, handwritten, electronic,
or stored on computer disks, tapes, hard drives, or any other tangible medium,
as well as samples, prototypes, models, products and the like, shall be the
exclusive property of Duke Energy and, as of the Resignation Date, all Company
Materials, including all copies thereof, as well as all other property of Duke
Energy then in the Employee’s possession or control, shall be returned to Duke Energy.


9.                  Cooperation. 
The Executive agrees to cooperate with Duke Energy in connection with his
departure as reasonably requested by Duke Energy, including with respect to any
communications to current and former employees or directors of any of the
Affiliated Entities as may reasonably be requested by Duke Energy in connection
with such departure.  The Executive will be available, upon reasonable notice,
to respond to questions and provide assistance to Duke Energy regarding matters
for which he was responsible and about which he had knowledge in connection
with his employment with any of the Affiliated Entities.  The Executive also
will cooperate in any potential or pending litigation or arbitration that may
involve him in any capacity as a result of his employment with, or service as a
member of the board of directors of, any of the Affiliated Entities.  This
includes, if necessary, meeting at mutually convenient times and locations with
attorneys of any of the Affiliated Entities, attending meetings, depositions
and trial, and providing truthful testimony.  All such assistance and
cooperation shall be provided by the Executive at such times, and at such
places (including by teleconference or videoconference), as shall be mutually
agreeable to the Parties, and the Executive shall be reimbursed in accordance
with Duke Energy’s policies for any reasonable expenses incurred in connection
with the provision of services under this Paragraph 8.  Notwithstanding any
provision of this Paragraph 8, in no event will the Executive be required,
without mutually acceptable additional compensation, to provide services under
this Paragraph 8 (i) that exceed 15 hours in any calendar month and/or (ii)
after the second anniversary of the Resignation Date, except that the Executive
shall not be required to provide services under this Paragraph 8 after the
first anniversary of the Resignation Date with respect to any matter unrelated
to the Crystal River nuclear plant.


10.            Governing Law and Forum
Selection.  The Parties agree that any dispute, claim or controversy based
on common law, equity, or any federal, state, or local statute, ordinance, or
regulation (other than workers’ compensation claims) arising out of or relating
in any way to the Executive’s employment, the terms, benefits, and conditions
of employment, or concerning this Agreement and the resulting termination of
employment, including whether such a dispute is arbitrable, shall be settled by
arbitration. The arbitration proceeding will be conducted under the employment
dispute resolution arbitration rules of the American Arbitration Association in
effect at the time a demand for arbitration under the rules is made, and such
proceeding will be adjudicated in Charlotte, North Carolina. The decision of
the arbitrator(s), including determination of the amount of any damages
suffered, will be exclusive, final, and binding on all Parties, their heirs,
executors, administrators, successors and assigns. Each Party will bear its own
expenses in the arbitration for arbitrators’ fees and attorneys’ fees, for its
witnesses, and for other expenses of presenting its case. Other arbitration
costs, including administrative fees and fees for records or transcripts, will
be borne equally by the Parties.  Notwithstanding anything in this
Paragraph 9 to the contrary, if the Executive prevails with respect to any
dispute submitted to arbitration under this Paragraph 9, or such dispute is
settled, Duke Energy will reimburse or pay all legal fees and expenses that the
Executive may reasonably incur as a result of the dispute.  


11.           Applicable Law.  Except
to the extent that federal law governs, this Agreement will be governed by and
construed and enforced in accordance with the laws of the State of North Carolina,
without regard to any applicable state’s choice of law provisions.  


 







 




 










 








 




 








12.            Integrated
Agreement; Amendments.  Except with respect to the provisions of the CIC
Plan and the Employment Agreement expressly referenced herein, this Agreement
sets forth the entire agreement of Duke Energy and the Executive with respect
to the subject matter hereof, and supersedes all other agreements between any
of the Affiliated Entities and the Executive and any employment or severance
plan, policy, agreement or arrangement of any of the Affiliated Entities. 
Without limiting the generality of the foregoing, the Executive expressly
acknowledges and agrees that except as specifically set forth in this
Agreement, he is not entitled to receive any severance pay, severance benefits,
compensation or employee benefits of any kind whatsoever from Duke Energy or
any of its affiliates.  This Agreement may not be amended unless the amendments
are in writing and signed by the Executive and an authorized representative of Duke
Energy.  This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.


13.           Severability.  The
invalidity or unenforceability of any particular provision in this Agreement
shall not affect the other provisions hereof, and this Agreement shall be
construed in all respects as if the invalid or unenforceable provision were
omitted.


14.           Taxes.   Notwithstanding
any other provision of this Agreement, Duke Energy may withhold from any
amounts payable under this Agreement, or any other benefits received pursuant
hereto, such Federal, state and/or local taxes as shall be required to be
withheld under any applicable law or regulation.  The obligations under this
Agreement are intended to comply with the requirements of Section 409A of the
Code, or an exemption or exclusion therefrom, provided that the Executive
acknowledges and agrees that he shall be solely responsible for any taxes
and/or penalties imposed under Section 409A of the Code.  Each payment under
this Agreement shall be treated as a separate payment for purposes of Section
409A of the Code.  In no event may the Executive, directly or indirectly,
designate the calendar year of any payment to be made under this Agreement.  If
the Executive is a “specified employee” (within the meaning of Section 409A of
the Code) then any payments that are required to be made to the Executive
pursuant to this Agreement that constitute the deferral of compensation (within
the meaning of Treasury Regulations Section 1.409A-1(b) and that would in the
absence of this Paragraph 13 have been paid to the Executive within six months
and one day of the Resignation Date shall not be paid to the Executive during
such period, but shall instead be accumulated and paid to the Executive in a
lump sum on the earlier of (i) the day after the date that is six months
from the Resignation Date and (ii) if the Executive shall die prior to the
expiration of such six-month period, as soon as practicable following the date
of the Executive’s death.  All reimbursements and in-kind benefits that
constitute deferred compensation within the meaning of Section 409A of the Code
provided under this Agreement shall be made or provided in accordance with the
requirements of Section 409A of the Code, including, without limitation, that
(i) in no event shall reimbursements by Duke Energy under this Agreement be
made later than the end of the calendar year next following the calendar year
in which the applicable fees and expenses were incurred; (ii) the amount of
in-kind benefits that Duke Energy is obligated to pay or provide in any given
calendar year shall not affect the in-kind benefits that Duke Energy is
obligated to pay or provide in any other calendar year; and (iii) the
Executive’s right to have Duke Energy pay or provide such reimbursements and
in-kind benefits may not be liquidated or exchanged for any other benefit.  


15.              Successors.  This
Agreement is personal to the Executive and without the prior written consent of
Duke Energy shall not be assignable by the Executive other than by will or the
laws of descent and distribution.  This Agreement shall inure to the benefit of
and be enforceable by the Executive’s legal representatives and the legal
representatives of his estate to the extent applicable.  This Agreement shall
inure to the benefit of and be binding upon Duke Energy and its successors and
assigns.


16.               Representations and
Warranties.  By signing this Agreement, the Executive warrants that he or
she:  


a.          has carefully read and reviewed
this Agreement; 


b.         fully
understands all of its terms and conditions; 


c.         fully
understands that this Agreement is legally binding and that by signing it he is
giving up certain rights;


d.         has not
relied on any other representations by Duke Energy or its employees or agents,
whether written or oral, concerning the terms of this Agreement; 


e.         has been
advised of his opportunity to consider for up to 21 days whether to accept the
Release; 


f.          will have
seven days to revoke the Release (but not the remainder of this Agreement)
after signing it, with the eighth day following the execution of this Agreement
being referred to as the “Revocation Date”; 


g.         has been
advised by, and has had the opportunity to consult with, an attorney prior to
executing this Agreement; 


h.        
acknowledges that all notice requirements under any other agreement,
arrangement or plan have been fully satisfied;


i.         executes
and delivers this Agreement freely and voluntarily; 


j.         is waiving
any rights or claims he may have under the Age Discrimination in Employment Act
of 1967; and 


k.         is not
waiving any rights or claims which may arise after this Agreement is signed.  


 


 









 




 










 








 




 








IN WITNESS WHEREOF, each of the parties
hereto has duly executed this Agreement as of the date first set forth above.


EXECUTIVE


__/s/ Jeffrey J. Lyash__________________

        Jeffrey J. Lyash


Date:____December
31, 2012___________ 


 


 


 


DUKE ENERGY
CORPORATION








By:__/s/
Jennifer L. Weber______________

              Executive Vice President


             
and Chief Human Resources Officer 


 


 


Date:____December
31, 2012___________






       


     
 


EXHIBIT A


SEPARATION PAYMENTS
AND BENEFITS


 


 


	
  #

  	
  Description of
  Payment / Benefit

  	
  Payment Terms

   

  
	
  1

  	
  (1) unpaid annual base salary through the
  Resignation Date and (2) accrued and unused paid time off through the
  Resignation Date

  	
  Amount determined based on payroll records,
  paid in a lump sum within fifteen days following the Resignation Date.  

  
	
  2

  	
  Severance Payments

  	
  $2,781,000 (represents the sum of the
  Executive’s annual base salary and “target short term incentive award”
  multiplied by 3).  Paid in a lump sum within ten days following the date that
  is six months following the Resignation Date.

  
	
  3

  	
  Annual Incentive Payment 

  	
  $412,000 (represents the Executive’s target
  short term incentive award for the year during which the Resignation Date
  occurs).  Paid in a lump sum within ten days following the date that is six
  months following the Resignation Date.

  
	
  4

  	
  Unreimbursed business expenses incurred
  through the Resignation Date (including any reasonable relocation expenses)

  	
  Amount to be
  determined after submission of written receipts and substantiation by the
  Executive according to Duke Energy’s policy by no later than January 31,
  2013.  Paid through normal expense reimbursement process not later than 45
  days following the substantiation of such expenses.

  
	
  5

  	
  Accrued and vested amounts under all
  non-qualified and incentive plans, including the Progress,
  Inc. Management Deferred Compensation Plan, the Progress, Inc. Management
  Incentive Compensation Plan, the Progress, Inc. Deferred Compensation Plan
  for Key Management Employees, and the Duke Energy Corporation Executive Cash
  Balance Plan (including amounts previously earned under the Progress Energy,
  Inc. Supplemental Senior Executive Retirement Plan)

  	
  Amount determined
  consistent with the terms of the applicable plan based on accrued and vested
  benefits as of the Resignation Date.  Paid at the time (or times) and in a
  form consistent with the terms of the applicable plan or arrangement.

  
	
  6

  	
  Continued in-kind benefit under health and
  welfare plans

  	
  Paid consistently
  with the terms of the CIC Plan.