Document:

exhibit 10.60

SEPARATION
AND SETTLEMENT AGREEMENT

 

This
Separation and Settlement Agreement (this “Agreement”) is entered into as of
July 10, 2012 by and between the executive listed on Exhibit A (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 in the
position set forth on Exhibit A;  

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”) dated as of the date
set forth on Exhibit A; and

WHEREAS,
the Executive has provided notice of his or her 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 12:01 a.m. on July 11, 2012 (the
“Resignation Date”), the Executive hereby resigns from his or her 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 or her 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 16 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 B 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.       
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.  

3.                 
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 that
(i) were granted before April 1, 2011 or are time-vested restricted stock units
granted at any time prior to 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), and (ii) are performance
shares granted under the Performance Share Sub-Plan that were granted on or
after April 1, 2011, will continue to vest based on the applicable performance
goals, subject to the amendment of such performance goals by the Duke Energy
Compensation Committee in the same manner as the performance goals are being
amended for active employees of Duke Energy, but in no event shall such
performance shares vest at lower than 50% of target level.    

4.                 
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.   

 

 

 

 

 

 

5.                
Release of Claims. 

a.       
In consideration of and in exchange for the benefits provided to him or her
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 or her 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 or her 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 or
her 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 or she has received a copy of this Agreement
prior to its execution and has been advised hereby of his or her opportunity to
review and consider the Release for 21 days prior to its execution.  The
Executive further acknowledges that he or she 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 or she 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 or she 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 or her decision to enter into this
Agreement, including the Release, he or she 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.

6.                 
Non-disparagement.   The Executive shall not disparage any of the
Affiliated Entities, their current or former 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. 
Attached to this Agreement as Exhibit C is a press release regarding
Executive’s termination of employment.  Neither the Executive nor Duke Energy
shall make any public statement regarding Executive’s termination of employment
that is materially inconsistent with such press release.  The Executive and
Duke Energy each represent that the applicable party has not, since the
“Effective Time” under the Merger Agreement and through the Resignation Date,
directly made, or requested a third party to make, any statement to the press,
elected or governmental officials, Standard & Poor’s, Moody’s Investors
Services, Fitch Group or Duke Energy’s regulators that would be a breach of
this Paragraph 6 had such statement been made on or after the Resignation Date. 
Nothing in the foregoing will preclude either the Executive or Duke Energy from
providing truthful disclosures as required by applicable law or legal process.

7.                
Confidential Information; Restrictive Covenants.  

 

 

 

 

 

 

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 or her best
efforts to obtain a protective order requiring that all disclosures be kept under
court seal) and will notify the Duke Energy promptly upon receipt of such order
or subpoena.   

b.       
Forfeiture and Repayments. The Executive agrees that, in the event he or
she violates the provisions of Paragraph 6 or Paragraph 7 of this Agreement, in
any material respect, he or she 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 or she 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(d)] 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 or she 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.

8.                  
Cooperation.   The Executive agrees to cooperate with Duke Energy in
connection with his or her 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 or she was responsible and about which he
or she had knowledge in connection with his or her employment with any of the
Affiliated Entities.  The Executive also will cooperate in any potential or
pending litigation or arbitration that may involve him or her in any capacity
as a result of his or her 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 with attorneys of any of the Affiliated
Entities, attending meetings, depositions and trial, and providing truthful
testimony.  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 10 hours in any
calendar month and/or (ii) after the first anniversary of the Resignation
Date.  

9.                   
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,
Duke Energy will reimburse or pay all legal fees and expenses that the
Executive may reasonably incur as a result of the dispute.  

10.                   
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.  

11.                    
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 or she 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.

12.                     
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.

13.                     
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 or she 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.  

14.                       
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 or her estate to the
extent applicable.  This Agreement shall inure to the benefit of and be binding
upon Duke Energy and its successors and assigns.

15.                         
Counterparts.   This Agreement may be executed in separate counterparts,
each of which is deemed to be an original and all of which taken together
constitute one and the same agreement.

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 or she 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 or her 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 or she 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.  

 

 

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

 

___/s/ Mark S.
Mulhen  _____________

           Executive

 

 

 

 

DUKE ENERGY
CORPORATION

By:__/s/ James E. Rogers _____________

Name: James E. Rogers

Title: Chief Executive Officer

       

 

 

 

 

 

 

 

     
 

EXHIBIT A

Name:  Mark F. Mulhern

Position:  Executive Vice
President & Chief Administrative Officer

Date of Employment Agreement:   September
18, 2007

 

 

 

 

 

 

 

EXHIBIT B

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

  	
  $1,700,000 (represents the sum of the
  Executive’s annual base salary and “target short term incentive award”
  multiplied by 2).  Paid in a lump sum within ten days following the date that
  is six months following the Resignation Date.

  
	
  3

  	
  Annual Incentive Payment 

  	
  $350,000 (represents
  the Executive’s target short term incentive award for the year during which
  the Resignation Date occurs).  Paid in 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 August 31,
  2012.  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 and the Progress, Inc. Deferred Compensation Plan
  for Key Management Employees

  	
  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.

  

 

 

 

 

 

 

 

 

EXHIBIT C

PRESS RELEASE

 

NEWS RELEASE

 

Duke
Energy Corporation

P.O. Box 1009

Charlotte, NC 28201-1009 

 

	
  July 10, 2012

   

  	
   

  	
   

  
	
  MEDIA
  CONTACTS:

  	
  ANALYSTS:

  	
   

  
	
  Tom Williams

  	
  Bill Currens

  	
  Bob Drennan

  
	
  800-559-3853

  	
  704-382-1603

  	
  919-546-7474

  

 

 

Duke Energy Announces
Executive Departures

 

 

CHARLOTTE, NC – Duke Energy
Corporation today announced that John McArthur, executive vice president of
Regulated Utilities, Mark Mulhern, executive vice president and chief
administrative officer, and Paula Sims, chief integration and innovation
officer, have resigned, effective immediately. 

 

Jim Rogers, chairman,
president and chief executive officer of Duke Energy,
said, “We regret that John, Mark and Paula have decided to move on from Duke
Energy. Since we closed the merger, we have spoken extensively with the members
of our senior management committee. Our hope was that we could all work
together to capitalize on the significant opportunities we now have as one
company. While we encouraged the entire team to maintain their roles, John,
Mark and Paula requested to step down and we wish them well.

 

“We are grateful
to be able to draw from the deep bench of executives from both Progress Energy
and Duke Energy and have already begun working to identify the best way to
fulfill the responsibilities held by John, Mark and Paula. We look forward to
executing on our strategy as one company and one team committed to offering
significant benefits for customers, shareholders and the communities we serve,”
Rogers said.

 

The company also
noted that its integration efforts are on track. More than 50 integration teams
made up of representatives from both Duke Energy and Progress Energy have been
working diligently to execute on the integration at the functional level.

 

About Duke
Energy 

Duke Energy is
the largest electric power holding company in the United States with more than
$100 billion in total assets. Its regulated utility operations serve
approximately 7.1 million electric customers located in six states in the
Southeast and Midwest. Its commercial power and international business segments
own and operate diverse power generation assets in North America and Latin
America, including a growing portfolio of renewable energy assets in the United
States. Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company
traded on the New York Stock Exchange under the symbol DUK. More information
about the company is available on the Internet at: www.duke-energy.com.   

 

Forward-Looking Information

This document contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are typically identified by words or phrases such as
"may," "will," "should," "anticipate,"
"estimate," "expect," "project,"
"intend," "plan," "believe," "target,"
"forecast," and other words and terms of similar meaning.
Forward-looking statements involve estimates, expectations, projections, goals,
forecasts, assumptions, risks and uncertainties. Duke Energy cautions readers
that any forward-looking statement is not a guarantee of future performance and
that actual results could differ materially from those contained in the
forward-looking statement. Such forward-looking statements include, but are not
limited to, statements about the benefits of the merger involving Duke Energy
and Progress Energy, including future financial and operating results, Duke
Energy's plans, objectives, expectations and intentions, and other statements that
are not historical facts. Important factors that could cause actual results to
differ materially from those indicated by such forward-looking statements
include risks and uncertainties relating to: the risk that the businesses will
not be integrated successfully; the risk that the cost savings and any other
synergies from the transaction may not be fully realized or may take longer to
realize than expected; disruption from the transaction making it more difficult
to maintain relationships with customers, employees or suppliers; the diversion
of management time on merger-related issues; general worldwide economic
conditions and related uncertainties; 

 

 

 

 

 

the effect of
changes in governmental regulations; and other factors discussed or referred to
in the "Risk Factors" section of each of Progress Energy's and Duke
Energy's most recent Annual Report on Form 10-K filed with the Securities and
Exchange Commission (SEC). Additional risks and uncertainties are identified
and discussed in Progress Energy's and Duke Energy's reports filed with the SEC
and available at the SEC's website at http://www.sec.gov/. Each forward-looking statement speaks only as of the date
of the particular statement and Duke Energy undertakes no obligation to update
or revise its forward-looking statements, whether as a result of new
information, future events or otherwise.exhibit
10.61

SEPARATION
AND SETTLEMENT AGREEMENT

 

This
Separation and Settlement Agreement (this “Agreement”) is entered into as of
July 10, 2012 by and between the executive listed on Exhibit A (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 in the
position set forth on Exhibit A;  

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”) dated as of the date
set forth on Exhibit A; and

WHEREAS,
the Executive has provided notice of his or her 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 12:01 a.m. on July 11, 2012 (the
“Resignation Date”), the Executive hereby resigns from his or her 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 or her 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 16 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 B 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 shall pay the Executive her previously communicated integration
bonus of $50,000 in a lump sum on the 30th day following the
Resignation Date. 

e.       
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.  

3.                 
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 that
(i) were granted before April 1, 2011 or are time-vested restricted stock units
granted at any time prior to 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), and (ii) are performance
shares granted under the Performance Share Sub-Plan that were granted on or
after April 1, 2011, will continue to vest based on the applicable performance
goals, subject to the amendment of such performance goals by the Duke Energy
Compensation Committee in the same manner as the performance goals are being
amended for active employees of Duke Energy, but in no event shall such
performance shares vest at lower than 50% of target level.    

4.                 
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.   

 

 

 

 

 

 

5.                
Release of Claims. 

a.       
In consideration of and in exchange for the benefits provided to him or her
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 or her 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 or her 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 or
her 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 or she has received a copy of this Agreement
prior to its execution and has been advised hereby of his or her opportunity to
review and consider the Release for 21 days prior to its execution.  The
Executive further acknowledges that he or she 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 or she 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 or she 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 or her decision to enter into this
Agreement, including the Release, he or she 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.

6.                 
Non-disparagement.   The Executive shall not disparage any of the
Affiliated Entities, their current or former 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.  Attached to this
Agreement as Exhibit C is a press release regarding Executive’s termination of
employment.  Neither the Executive nor Duke Energy shall make any public
statement regarding Executive’s termination of employment that is materially
inconsistent with such press release.  The Executive and Duke Energy each
represent that the applicable party has not, since the “Effective Time” under
the Merger Agreement and through the Resignation Date, directly made, or
requested a third party to make, any statement to the press, elected or
governmental officials, Standard & Poor’s, Moody’s Investors Services,
Fitch Group or Duke Energy’s regulators that would be a breach of this
Paragraph 6 had such statement been made on or after the Resignation Date. 
Nothing in the foregoing will preclude either the Executive or Duke Energy from
providing truthful disclosures as required by applicable law or legal process.

7.                
Confidential Information; Restrictive Covenants.  

 

 

 

 

 

 

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 or her best
efforts to obtain a protective order requiring that all disclosures be kept
under court seal) and will notify the Duke Energy promptly upon receipt of such
order or subpoena.   

b.       
Forfeiture and Repayments. The Executive agrees that, in the event he or
she violates the provisions of Paragraph 6 or Paragraph 7 of this Agreement, in
any material respect, he or she 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 or she 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(d)] 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 or she 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.

8.                  
Cooperation.   The Executive agrees to cooperate with Duke Energy in
connection with his or her 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 or she was responsible
and about which he or she had knowledge in connection with his or her
employment with any of the Affiliated Entities.  The Executive also will
cooperate in any potential or pending litigation or arbitration that may
involve him or her in any capacity as a result of his or her 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
with attorneys of any of the Affiliated Entities, attending meetings,
depositions and trial, and providing truthful testimony.  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 10 hours in any calendar month and/or (ii)
after the first anniversary of the Resignation Date.  

9.                   
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,
Duke Energy will reimburse or pay all legal fees and expenses that the
Executive may reasonably incur as a result of the dispute.  

10.                    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.  

11.                    
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 or she 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.

12.                     
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.

13.                      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 or she 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.  

14.                       
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 or her estate to the
extent applicable.  This Agreement shall inure to the benefit of and be binding
upon Duke Energy and its successors and assigns.

15.                         
Counterparts.   This Agreement may be executed in separate counterparts,
each of which is deemed to be an original and all of which taken together
constitute one and the same agreement.

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 or she 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 or her 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 or she 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.  

 

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

 

 

 

 

 

 

 

 

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

 

___/s/ Paula J.
Sims  _____________

           Executive

 

 

 

 

DUKE ENERGY
CORPORATION

By:__/s/ James E. Rogers _____________

Name: James E. Rogers

Title: Chief Executive Officer

       

 

 

 

 

 

 

 

     
 

EXHIBIT A

Name:  Paula J. Sims

Position:  Chief Integration and
Innovation Officer

Date of Employment Agreement:   July
1, 2007

 

 

 

 

 

 

 

EXHIBIT B

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

  	
  $1,280,000 (represents the sum of the
  Executive’s annual base salary and “target short term incentive award”
  multiplied by 2).  Paid in a lump sum within ten days following the date that
  is six months following the Resignation Date.

  
	
  3

  	
  Annual Incentive Payment 

  	
  $240,000 (represents the Executive’s target
  short term incentive award for the year during which the Resignation Date
  occurs).  Paid in 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 August 31,
  2012.  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 and the Progress, Inc. Deferred Compensation Plan
  for Key Management Employees

  	
  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.

  

 

 

 

 

 

 

 

 

EXHIBIT C

PRESS RELEASE

 

NEWS RELEASE

 

Duke
Energy Corporation

P.O. Box 1009

Charlotte, NC 28201-1009 

 

	
  July 10, 2012

   

  	
   

  	
   

  
	
  MEDIA
  CONTACTS:

  	
  ANALYSTS:

  	
   

  
	
  Tom Williams

  	
  Bill Currens

  	
  Bob Drennan

  
	
  800-559-3853

  	
  704-382-1603

  	
  919-546-7474

  

 

 

Duke Energy Announces
Executive Departures

 

 

CHARLOTTE, NC – Duke Energy
Corporation today announced that John McArthur, executive vice president of
Regulated Utilities, Mark Mulhern, executive vice president and chief
administrative officer, and Paula Sims, chief integration and innovation
officer, have resigned, effective immediately. 

 

Jim Rogers, chairman,
president and chief executive officer of Duke Energy,
said, “We regret that John, Mark and Paula have decided to move on from Duke
Energy. Since we closed the merger, we have spoken extensively with the members
of our senior management committee. Our hope was that we could all work
together to capitalize on the significant opportunities we now have as one
company. While we encouraged the entire team to maintain their roles, John,
Mark and Paula requested to step down and we wish them well.

 

“We are grateful
to be able to draw from the deep bench of executives from both Progress Energy
and Duke Energy and have already begun working to identify the best way to
fulfill the responsibilities held by John, Mark and Paula. We look forward to
executing on our strategy as one company and one team committed to offering
significant benefits for customers, shareholders and the communities we serve,”
Rogers said.

 

The company also
noted that its integration efforts are on track. More than 50 integration teams
made up of representatives from both Duke Energy and Progress Energy have been
working diligently to execute on the integration at the functional level.

 

About Duke
Energy 

Duke Energy is
the largest electric power holding company in the United States with more than
$100 billion in total assets. Its regulated utility operations serve
approximately 7.1 million electric customers located in six states in the
Southeast and Midwest. Its commercial power and international business segments
own and operate diverse power generation assets in North America and Latin
America, including a growing portfolio of renewable energy assets in the United
States. Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company
traded on the New York Stock Exchange under the symbol DUK. More information
about the company is available on the Internet at: www.duke-energy.com.   

 

Forward-Looking Information

This document contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are typically identified by words or phrases such as
"may," "will," "should," "anticipate,"
"estimate," "expect," "project,"
"intend," "plan," "believe," "target,"
"forecast," and other words and terms of similar meaning.
Forward-looking statements involve estimates, expectations, projections, goals,
forecasts, assumptions, risks and uncertainties. Duke Energy cautions readers
that any forward-looking statement is not a guarantee of future performance and
that actual results could differ materially from those contained in the
forward-looking statement. Such forward-looking statements include, but are not
limited to, statements about the benefits of the merger involving Duke Energy
and Progress Energy, including future financial and operating results, Duke
Energy's plans, objectives, expectations and intentions, and other statements
that are not historical facts. Important factors that could cause actual
results to differ materially from those indicated by such forward-looking
statements include risks and uncertainties relating to: the risk that the
businesses will not be integrated successfully; the risk that the cost savings
and any other synergies from the transaction may not be fully realized or may
take longer to realize than expected; disruption from the transaction making it
more difficult to maintain relationships with customers, employees or
suppliers; the diversion of management time on merger-related issues; general
worldwide economic conditions and related uncertainties; 

 

 

 

 

 

the
effect of changes in governmental regulations; and other factors discussed or
referred to in the "Risk Factors" section of each of Progress
Energy's and Duke Energy's most recent Annual Report on Form 10-K filed with the
Securities and Exchange Commission (SEC). Additional risks and uncertainties
are identified and discussed in Progress Energy's and Duke Energy's reports
filed with the SEC and available at the SEC's website at http://www.sec.gov/. Each forward-looking statement speaks only as of the date
of the particular statement and Duke Energy undertakes no obligation to update
or revise its forward-looking statements, whether as a result of new
information, future events or otherwise.

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