Document:

EX-4.C

Exhibit
4(c)

Progress Energy, Inc.

OFFICER’S CERTIFICATE

     Thomas R. Sullivan, the Treasurer of Progress Energy, Inc. (the “Company”), pursuant to the
authority granted in the Securities Pricing Committee Resolutions dated March 16, 2009 and the
Indenture, as defined herein, does hereby certify to The Bank of New York Mellon Trust Company,
National Association (the “Trustee”), as successor Trustee under the Indenture (For Debt
Securities) of the Company, dated as of February 15, 2001 (as supplemented by this Officer’s
Certificate, the “Indenture”), that he has authorized the issue and sale of $450,000,000 principal
amount of 7.05% Senior Notes due 2019 (the “Notes”) by the Company, and, in connection with such
issuance, has determined, approved or appointed, as the case may be, the following:

	1.	 	The notes of this series issued under the Indenture shall be designated “7.05% Senior Notes
due 2019.” The Form of Note is attached hereto as Exhibit A. All capitalized terms used in
this certificate which are not defined herein shall have the meanings (if any) set forth in
Exhibit A hereto; all capitalized terms used in this certificate which are not defined herein
or in Exhibit A hereto shall have the meanings set forth in the Indenture.
	 
	2.	 	If not redeemed earlier pursuant to their terms, the Notes shall mature and the principal
thereof shall be due and payable together with all accrued and unpaid interest thereon on
March 15, 2019.
	 
	3.	 	The Notes shall initially be issued as Global Securities registered in the name of a nominee
of The Depository Trust Company. The Notes shall be issued in denominations of $2,000 and
integral multiples of $1,000 above that amount.
	 
	4.	 	The Notes shall bear interest as provided in Exhibit A.
	 
	5.	 	The Notes may be redeemed at any time as provided in Exhibit A.
	 
	6.	 	The Notes shall not be subject to a sinking fund.
	 
	7.	 	Principal and interest will be payable initially at the corporate trust office of The Bank of
New York Mellon Trust Company, National Association, presently located at 10161 Centurion
Parkway, Jacksonville, Florida 32256, or such other place as may be designated by the Company
from time to time.
	 
	8.	 	The Notes will be subject to certain events of default and certain covenants as set forth in
the Indenture and Exhibit A.
	 
	9.	 	The Trustee shall initially be The Bank of New York Mellon Trust Company, National
Association, the principal corporate trust office of which presently is located at 10161
Centurion Parkway, Jacksonville, Florida 32256.
	 
	10.	 	The Notes shall be senior unsecured obligations of the Company.

 

 

	11.	 	Any further terms of the Notes shall be as provided for in Exhibit A hereto and in the
Indenture.

[Remainder of Page Intentionally Left Blank]

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     IN WITNESS WHEREOF, the undersigned Treasurer of the Company has executed this Certificate as
of the 19th day of March, 2009.

	 	 	 
	 
	 	 
	 
	 	/s/ Thomas R. Sullivan 
	 

	 	 
	 

	 	Thomas R. Sullivan, Treasurer

[Signature page to Officer’s Certificate for 7.05% Senior Notes]

 

 

EXHIBIT A

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED
IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO PROGRESS ENERGY, INC. (THE “COMPANY”) OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS 7.05% SENIOR NOTE DUE 2019, MAY AS PROVIDED IN THE INDENTURE, BE EXCHANGED FOR 7.05% SENIOR
NOTES DUE 2019 IN THE FORM OF DEFINITIVE CERTIFICATES OF LIKE TENOR AND OF AN EQUAL AGGREGATE
PRINCIPAL AMOUNT, IN AUTHORIZED DENOMINATIONS, REGISTERED IN THE NAMES OF SUCH PERSONS AS THE
DEPOSITARY SHALL INSTRUCT THE TRUSTEE, IF (I) THE DEPOSITARY GIVES NOTICE TO THE COMPANY OR TO THE
TRUSTEE THAT IT IS UNWILLING OR UNABLE TO CONTINUE AS DEPOSITARY AND A SUCCESSOR DEPOSITARY IS NOT
APPOINTED BY THE COMPANY WITHIN 90 DAYS, (II) THE DEPOSITARY CEASES TO BE ELIGIBLE UNDER THE
INDENTURE AND A SUCCESSOR DEPOSITARY IS NOT APPOINTED BY THE COMPANY WITHIN 90 DAYS OR (III) THE
COMPANY DECIDES TO DISCONTINUE USE OF THE SYSTEM OF BOOK-ENTRY TRANSFERS THROUGH THE DEPOSITARY OR
ITS SUCCESSOR. ANY SUCH EXCHANGE SHALL BE MADE UPON RECEIPT BY THE TRUSTEE OF AN OFFICER’S
CERTIFICATE THEREFOR AND A WRITTEN INSTRUCTION FROM THE DEPOSITARY SETTING FORTH THE NAME OR NAMES
IN WHICH THE TRUSTEE IS TO REGISTER SUCH 7.05% SENIOR NOTES DUE 2019 IN THE FORM OF DEFINITIVE
CERTIFICATES.

 

 

PROGRESS ENERGY, INC.

7.05% Senior Note due 2019

	 	 	 
	No. R-1

	 	$450,000,000
	 
	 	 
	 

	 	CUSIP No. 743263AN5

     Progress Energy, Inc., a corporation duly organized and existing under the laws of the State
of North Carolina (herein called the “Company,” which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of Four Hundred Fifty Million and No/100 Dollars
($450,000,000) on March 15, 2019 and to pay interest thereon from March 19, 2009 or from the most
recent Interest Payment Date with respect to which interest has been paid or duly provided for,
semi-annually on March 15 and September 15 in each year (each an “Interest Payment Date”),
commencing September 15, 2009, at the rate of 7.05% per annum, until the principal hereof is paid
or made available for payment, provided that any principal and premium, and any such installment of
interest, which is overdue shall bear interest at the rate of 7.05% per annum (to the extent that
the payment of such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment, and such interest shall be payable on demand.
The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular Record Date for such
interest, which shall be (i) for Notes of this series in the form of Global Securities, on the
business day prior to each Interest Payment Date, or (ii) for Notes of this series in the form of
definitive certificates, on February 28 (or in the case of any leap year, February 29) or August 31
(whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to
the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note
(or one or more Predecessor Notes) is registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Notes of this series not less than 10 days prior to such Special Record Date,
or be paid at any time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.

     Payment of the principal of (and premium if any) and such interest on this Note will be made
at the office or agency of the Trustee maintained for that purpose in The City of New York, in such
coin or currency of the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option of the Company payment
of such interest may be made by check mailed

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to the address of the Person entitled thereto as such address shall appear in the Debt
Security Register.

     The amount of interest payable for any period will be computed on the basis of a 360-day year
of twelve 30-day months. Interest will accrue from each prior Interest Payment Date to, but not
including, the relevant payment date. In the event that any date on which interest is payable on
the Notes of this series is not a Business Day at any Place of Payment, then payment of interest or
principal and premium, if any, need not be made at such Place of Payment on such date, but may be
made on the next succeeding Business Day at such Place of Payment with the same force and effect as
if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, and, if such
payment is made or duly provided for on such Business Day, no interest shall accrue on the amount
so payable for the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, to such Business Day. A “Business Day” means when used with respect
to a Place of Payment or any other particular location specified in the Indenture, means any day,
other than a Saturday or Sunday, which is not a day on which banking institutions or trust
companies in such Place of Payment or other location are generally authorized or required by law,
regulation or executive order to remain closed.

     Principal of and any premium on the Notes will be paid at Stated Maturity or the Redemption
Date, upon presentation of the Notes at the office of the Trustee, as the paying agent. The
Company may, at its discretion, appoint one or more additional paying agents and security
registrars and designate one or more additional places for payment and for registration of
transfer.

     Reference is hereby made to the further provisions of this Note set forth below, which further
provisions shall for all purposes have the same effect as if set forth at this place.

     Unless the certificate of authentication hereon has been executed by the Trustee referred to
below by manual signature, this Note shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.

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     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its
corporate seal.

	 	 	 	 	 
	     Dated: March 19, 2009
	 	 	 	 
	 
	 	 	 	 
	 

	 	PROGRESS ENERGY, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	[SEAL]

	 	 	 	Thomas R. Sullivan
	Attest:

	 	 	 	Treasurer
	 
	 	 	 	 
	 
	 	 	 	 
	Arlene S. Graves

Assistant Secretary	 	 	 	 

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TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     This is one of the Notes of the series designated herein referred to in the within-mentioned
Indenture.

	 	 	 	 	 
	     Dated: March 19, 2009
	 	 	 	 
	 
	 	 	 	 
	 

	 	THE BANK OF NEW YORK MELLON TRUST COMPANY,

NATIONAL ASSOCIATION,

     as Trustee
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Christie Leppert

Authorized Representative

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[Reverse of 7.05% Senior Note due 2019]

     This Note is one of the duly authorized issue of securities of the Company of the series
designated on the face hereof (herein called the “Notes”), issued and to be issued in one or more
series under an Indenture (For Debt Securities), dated as of February 15, 2001 (herein, together
with any amendments thereto, called the “Indenture,” which term shall have the meaning assigned to
it in such instrument), between the Company and The Bank of New York Mellon Trust Company, National
Association, as successor Trustee (herein called the “Trustee,” which term includes any successor
trustee under the Indenture), and reference is hereby made to the Indenture, including the Board
Resolutions and Officer’s Certificate filed with the Trustee on March 19, 2009, creating the series
designated on the face hereof, for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of
the terms upon which the Notes are, and are to be, authenticated and delivered.

     The Notes are senior unsecured obligations of the Company and rank equally with all of the
Company’s other senior unsecured indebtedness from time to time outstanding. Debt Securities may be
issued under the Indenture from time to time as a single series or in two or more separate series
up to the aggregate principal amount from time to time authorized for each series. The Company
may, from time to time, without the consent of the holder of this Note, provide for the issuance of
Notes or other Debt Securities under the Indenture in addition to this Note.

     The Notes will not be subject to a sinking fund.

Events of Default

     If an Event of Default with respect to Notes of this series shall occur and be continuing, the
principal of the Notes may be declared due and payable in the manner and with the effect provided
in the Indenture.

     In addition to the Events of Default specified in the Indenture, a default with respect to any
indebtedness to which the Company is a party other than the Notes of this series shall constitute
an Event of Default with respect to the Notes of this series if: (i) the default results from a
failure to pay such indebtedness when due, whether by reason of acceleration or otherwise
and (ii) the principal amount of such indebtedness, together with the principal amount of
any other such defaulted indebtedness, exceeds $100,000,000.

Restrictive Covenants

     Limitation on Liens

     So long as the Notes remain outstanding, neither the Company nor any of its Subsidiaries (as
defined below) may issue, assume or guarantee or permit to exist any

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indebtedness secured by a lien on any capital stock of any Subsidiary or on any tangible
property owned by the Company or any Subsidiary, without effectively securing the Notes equally and
ratably with (or prior to) the new indebtedness (but only so long as such new indebtedness is so
secured).

     The foregoing limitation does not limit the following liens and indebtedness:

          (1) purchase money liens on property acquired in the future; liens of any kind existing on
property or shares of stock at the time they are acquired; conditional sales agreements and other
title retention agreements on property acquired in the future (as long as none of the liens
referenced in this clause (1) cover any other properties of the Company or any of its
Subsidiaries);

          (2) liens on property that exist as of the date the Notes are first issued (including the
existing first mortgage indentures of Carolina Power & Light Company d/b/a Progress Energy
Carolinas, Inc. and Florida Power Corporation d/b/a Progress Energy Florida, Inc.); liens on the
shares of stock of any corporation, which liens existed at the time that corporation became a
Subsidiary;

          (3) liens in favor of the United States (or any State or territory thereof), any foreign
country or any department, agency or instrumentality or political subdivision of those
jurisdictions, to secure payments pursuant to any contract or statute or to secure any debt
incurred for the purpose of financing the purchase price or the cost of constructing or improving
the property subject to those liens, including, for example, liens to secure debt of the pollution
control or industrial revenue bond type;

          (4) debt issued by the Company or any Subsidiary in connection with a consolidation or merger
of the Company or any such Subsidiary with or into any other company in exchange for secured debt
of that company (“Third Party Debt”) as long as that debt (i) is secured by a mortgage on all or a
portion of the property of that company, (ii) prohibits secured debt from being incurred by that
company, unless the Third Party Debt is secured on an equal and ratable basis or (iii) prohibits
secured debt from being incurred by that company;

          (5) liens on any property acquired, constructed, developed or improved after the date the
Notes are first issued, which liens are created before or within 24 months after the acquisition,
construction, development or improvement of the property and secure the payment of the costs of
such acquisition, construction, development or improvement or related costs;

          (6) liens in favor of the Company or any of the Company’s wholly owned Subsidiaries;

          (7) the replacement, extension or renewal of any lien referred to above in clauses (1) through
(6) as long as the amount secured by the liens or the property subject to the liens is not
increased; and

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          (8) any other lien not covered by clauses (1) through (7) above as long as immediately after
the creation of the lien the aggregate principal amount of debt secured by all liens created or
assumed under this clause (8), together with the aggregate Attributable Value of all Sale and
Leaseback Transactions (other than Sale and Leaseback Transactions permitted by clause (2) of the
“Limitation on Sale and Leaseback Transactions” covenant below), does not exceed 20% of the
Company’s Consolidated Net Tangible Assets.

     Limitation on Sale and Leaseback Transactions

     So long as the Notes remain outstanding, neither the Company nor any of its Subsidiaries may
enter into any Sale and Leaseback Transaction unless either:

          (1) the Company and its Subsidiaries would be entitled pursuant to the “Limitation on Liens”
covenant above to create indebtedness secured by a lien on the property to be leased back in an
amount equal to the Attributable Value of such Sale and Leaseback Transaction without the Notes
being effectively secured equally and ratably with (or prior to) that indebtedness; or

          (2) the Company or the relevant Subsidiary, within 270 days after the sale or transfer of the
relevant assets shall have been made, applies, in the case of a sale or transfer for cash, an
amount equal to the net proceeds from the sale or, in the case of a sale or transfer otherwise than
for cash, an amount equal to the fair market value of the property so leased (as determined by any
two directors of the Company or the relevant Subsidiary) to (i) the retirement of long-term
indebtedness of the Company or the relevant Subsidiary ranking prior to or on a parity with the
Notes or (ii) the investment in any property used in the ordinary course of business by the Company
or any Subsidiary.

     As used in this subsection:

     “Attributable Value” means, as to any particular lease under which the Company or any of its
Subsidiaries is at any time liable as lessee and at any date as of which the amount thereof is to
be determined, the amount equal to the greater of (i) the net proceeds from the sale or transfer of
the property leased pursuant to the Sale and Leaseback Transaction or (ii) the net book value of
the property, as determined by the Company in accordance with generally accepted accounting
principles at the time of entering into the Sale and Leaseback Transaction, in either case
multiplied by a fraction, the numerator of which shall be equal to the number of full years of the
term of the lease that is part of the Sale and Leaseback Transaction remaining at the time of
determination and the denominator of which shall be equal to the number of full years of the term,
without regard, in any case, to any renewal or extension options contained in the lease.

     “Consolidated Net Tangible Assets” means the amount shown as total assets on the Company’s
consolidated balance sheet, less (i) intangible assets including, without limitation, such items as
goodwill, trademarks, trade names, patents, unamortized debt discount and expense and certain
regulatory assets, and (ii) appropriate adjustments, if any, on account of minority interest.
Consolidated Net Tangible Assets shall be

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determined in accordance with generally accepted accounting principles and practices
applicable to the type of business in which the Company is engaged and approved by the independent
accountants regularly retained by the Company, and may be determined as of a date not more than 60
days prior to the happening of the event for which such determination is being made.

     “Subsidiary” means an entity more than 50% of the outstanding voting stock (or comparable
equity interest) of which is owned, directly or indirectly, by the Company or by one or more other
Subsidiaries, or by the Company and one or more other Subsidiaries. For purposes of this
definition, “voting stock” means stock that ordinarily has voting power for the election of
directors, whether at all times or only so long as no senior class of stock has such voting power
by reasons of any contingency.

     “Sale and Leaseback Transaction” means any transaction or series of related transactions
relating to property now owned or hereafter acquired by the Company or any of its Subsidiaries
whereby the Company or one of its Subsidiaries transfers the property to a person and the Company
or one of its Subsidiaries leases the property from that person for a period, including renewals,
in excess of 48 months.

Optional Redemption

     The Notes of this series are subject to redemption by the Company, at its option, in whole, at
any time, or in part, from time to time, upon notice as provided in the Indenture (not less than 30
nor more than 60 days prior to a date fixed for redemption (the “Redemption Date”)) at a redemption
price equal to the greater of (i) 100% of the principal amount of the Notes then outstanding to be
redeemed or (ii) the sum of the present values of the remaining scheduled payments of principal and
interest on the Notes being redeemed discounted to the Redemption Date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 50 basis
points (.50%), plus, in each case, accrued and unpaid interest on the principal amount being
redeemed to the Redemption Date (the “Redemption Price”), such Redemption Price to be set forth in
an Officer’s Certificate delivered to the Trustee on or before the Redemption Date and upon which
the Trustee may conclusively rely.

     So long as the Notes are registered in the name of DTC, its nominee or a successor depositary,
if the Company elects to redeem less than all of the Notes, DTC’s practice is to determine by lot
the amount of the interest of each eligible DTC participant in the Notes to be redeemed. At all
other times, if the Company elects to redeem less than all of the Notes, the Trustee will select,
in such manner as it deems fair and appropriate, the particular Notes, or portions of them, to be
redeemed. Notice of redemption shall be given by mail not less than 30 nor more than 60 days prior
to the date fixed for redemption to the holders of Notes to be redeemed, which, as long as the
Notes are held in the book entry only system, will be DTC, its nominee or a successor depositary.
On and after the Redemption Date (unless the Company defaults in the payment of the Redemption
Price and interest accrued thereon to such date), interest on the Notes, or the portions of them so
called for redemption, shall cease to accrue.

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     In the event of redemption of this Note in part only, a new Note or Notes of this series and
of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof
upon the cancellation hereof.

     As used in this subsection:

     “Comparable Treasury Issue” means the United States Treasury security or securities selected
by an Independent Investment Banker (as defined below) as having an actual or interpolated maturity
comparable to the remaining term of the Notes being redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of the Notes.

     “Comparable Treasury Price” means, with respect to any Redemption Date, the average of the
Reference Treasury Dealer Quotations (as defined below) for such redemption date.

     “Independent Investment Banker” means one of the Reference Treasury Dealer(s) (as defined
below) appointed by the Company.

     “Reference Treasury Dealer” means Banc of America Securities LLC, and its successor, and one
additional primary U.S. Government securities dealer in The City of New York (each a “Primary
Treasury Dealer”) selected by the Company. If any Reference Treasury Dealer shall cease to be a
Primary Treasury Dealer, the Company will substitute another Primary Treasury Dealer for that
dealer.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any Redemption Date, the average, as determined by the Company, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Company by such Reference Treasury Dealer at 3:30 p.m. New York time on
the third Business Day preceding such Redemption Date.

     “Treasury Rate” means, with respect to any Redemption Date, the rate per annum equal to the
semiannual equivalent yield to maturity or interpolated (on a day count basis) of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for such Redemption Date.

Certain Indenture Provisions

     The Indenture permits, in certain circumstances therein specified, the amendment thereof
without the consent of the Holders of any of the Debt Securities. The Indenture also permits, with
certain exceptions as therein provided, the amendment thereof and the modification of the rights
and obligations under the Indenture of the Company and the rights of Holders of the Debt Securities
of each series to be affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of a specified percentage in aggregate principal amount of the Debt
Securities at the time

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Outstanding of each series to be affected. The Indenture also contains provisions permitting
the Holders of a specified percentage in aggregate principal amount of the Debt Securities of each
series at the time Outstanding, on behalf of the Holders of all the Debt Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this Note.

     As provided in and subject to the provisions of the Indenture, a Holder of Debt Securities
shall not have the right to institute any proceeding with respect to the Indenture or for the
appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall
have previously given the Trustee written notice of a continuing Event of Default with respect to
the Debt Securities of this series, the Holders of not less than a specified percentage in
aggregate principal amount of the Debt Securities of all series at the time Outstanding in respect
of which an Event of Default shall have occurred and be continuing shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered
the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a
majority in principal amount of Debt Securities of all series at the time Outstanding in respect of
which an Event of Default shall have occurred and be continuing a direction inconsistent with such
request, and shall have failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the
Holder of this Note for the enforcement of any payment of principal hereof or any premium or
interest hereon on or after the respective due dates expressed herein.

     No reference herein to the Indenture and no provision of this Note, subject to the provisions
for satisfaction and discharge in Article Seven of the Indenture, shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the principal of and
interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

     The Indenture permits the Company, by irrevocably depositing, in amounts and maturities
sufficient to pay and discharge at the Stated Maturity or Redemption Date, as the case may be, the
entire indebtedness on all Outstanding Notes, cash or U.S. Government Obligations with the Trustee
in trust solely for the benefit of the Holders of all Outstanding Notes, to defease the Indenture
with respect to such Notes, and upon such deposit the Company shall be deemed to have paid and
discharged its entire indebtedness on such Notes. Thereafter, Holders would be able to look only
to such trust fund for payment of principal and interest at the Stated Maturity or Redemption Date,
as the case may be.

     The Notes are issuable only in registered form without coupons in denominations of $2,000 and
any integral multiples of $1,000 above such amount. As provided in the Indenture and subject to
certain limitations therein set forth, the transfer of Notes is

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registrable in the Debt Security Register, upon surrender of a Note for registration of
transfer at the Corporate Trust Office of the Trustee or at such other offices or agencies of the
Trustee from time to time designated for such purpose, or at such other offices or agencies as the
Company may designate, duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Notes of like tenor, of
authorized denominations and for the same aggregate principal amount, shall be issued to the
designated transferee or transferees.

     No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

     Prior to due presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name this Note is
registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

     All undefined terms used in this Note that are defined in the Indenture shall have the
meanings assigned to them in the Indenture.

12EX-10.13

Exhibit 10.13

EXECUTIVE AND DIRECTOR COMPENSATION

Fiscal 2008 Executive Bonuses. Given the recent economic downturn, the Company’s implementation of
a restructuring plan and the Company’s performance during 2008, the Compensation Committee
determined not to grant cash incentive awards to our Named Executive Officers under the 2008
executive cash incentive program.

Fiscal 2009 Executive Base Salaries. The 2009 base salary levels of the persons who are
anticipated to constitute the Company’s Named Executive Officers for 2009 were set by the
Compensation Committee, effective March 2009, as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	2009 Base	 	 	2008 Base	 
	Name	 	 	Title	 	Salary	 	 	Salary	 
	Daniel J. Kohl	 	President and Chief Executive Officer
	 	$	400,000	 	 	$	400,000	 
	Brian P. Callahan	 	Chief Financial Officer
	 	$	225,750	 	 	$	225,750	 
	Anthony D. James	 	Chief Operating Officer
	 	$	231,000	 	 	$	231,000	 
	J. Alan Whorton	 	Senior Vice President, Sales and Marketing
	 	$	180,250	 	 	$	180,250	 
	Christopher R. Rehm, M.D.	 	Chief Medical Officer
	 	$	180,180	 	 	$	180,180	 

2009 Spheris Executive Incentive Program. The Company’s 2009 Spheris Executive Incentive Program
(the “Executive Incentive Program”), which was approved by the Compensation Committee, is intended
to provide incentives to members of senior management, including the Named Executive Officers, in
the form of cash bonus payments for achieving certain Company performance goals established by the
Compensation Committee. For the Named Executive Officers, the performance awards will be based
upon achievement of established Company Adjusted EBITDA goals. Actual awards range from zero to
50% of such participant’s base salary, except that awards for the Chief Executive Officer range
from zero to 100% of his base salary. In accordance with the Executive Incentive Program, these
awards may be increased in the event of significant overachievement of the Company performance
goals. Each participant in the Executive Incentive Program, including the Named Executive
Officers, employed and in good standing with the Company as of April 1, 2009 will have the
opportunity to earn a minimum retention bonus award so long as such participant is employed and in
good standing with the Company as of December 15, 2009 and does not have an “unsatisfactory”
performance rating. The amount of any minimum retention bonus award earned shall reduce dollar for
dollar the amount of any performance bonus award earned and payable under the Executive Incentive
Program (e.g., participants are only eligible to receive the greater of their minimum retention
bonus award or their applicable performance bonus award, without duplication). The potential
amounts payable to the Named Executive Officers as minimum retention bonus awards under the
Executive Incentive Program are as follows: Mr. Kohl ($400,000); Mr. Callahan ($112,875); Mr.
James ($115,500); Mr. Whorton ($90,125); and Dr. Rehm ($90,090) The Compensation Committee will
administer and make all determinations under the Executive Incentive Program.Equity Awards to Named
Executive Officers. There were no additional equity awards granted to the Named Executive Officers
at the first quarter 2009 Compensation Committee meeting.

Outside Director Compensation Program. Set forth below is a summary of the 2009 compensation
program for our outside directors. Employees who also serve as directors and directors appointed
to the Board of Directors as representatives of Warburg Pincus, Towerbrook and CHS, as applicable,
currently are not eligible to receive compensation for their service as directors, other than
reimbursement of expenses incurred in connection with their services.

Annual Retainer. Each outside director receives $20,000 as an annual retainer.

Meeting Fees. For each meeting of the Board of Directors attended in person an outside director
receives $1,500. An outside director also receives $1,000 for each Committee and special Board
meeting not in conjunction with a regular quarterly Board meeting attended in person. An outside
director receives $500 for each Board and Committee meeting attended by telephone. Directors are
also reimbursed for expenses incurred in connection with their services as directors.

 

 

Committee Chairmen. The chair of the Audit Committee receives an annual retainer of $15,000 and
the chairs of the Compensation Committee and the Nominating and Corporate Governance Committee
receive an annual retainer of $7,500 each. Members of the Audit, Compensation and Nominating and
Corporate Governance Committees each receive an annual retainer of $5,000.

Equity Incentives. Each outside director receives an award of 30,000 shares of restricted common
stock under the Stock Incentive Plan upon his or her initial election to the Board of Directors,
vesting in one-third increments on each anniversary of the date of grant, and 10,000 shares of
restricted common stock annually following his or her re-election to the Board of Directors,
vesting on the first anniversary of the date of re-election.

Election. In lieu of receiving the retainers and fees set forth above in cash, an outside director
may elect to receive the retainers and fees in shares of Series A Convertible Preferred Stock of
Spheris Holding III based on a ratio to be set by the Board of Directors each year. Such election
must be made prior to December 31st of the year prior to the year in which such
retainers and fees will be earned.

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