Progress Energy 2008 Annual Report Download - page 228

PROXY STATEMENT
D-4
on the Participant’s allocation of the Incentive Pool for that Performance Period and the terms and
conditions of the Individual Award. Thereupon (but subject to Section 4(h)), the Committee shall pay
out and settle the Individual Award, subject to the following:
(i) Unless a Participant elects to defer payment of an Individual Award as provided
in subparagraph (iii) below, the Committee shall pay out and settle the Individual
Award in cash no later than March 15 following the end of the Performance
Period;
(ii) If a Participant dies after the end of a Performance Period but prior to payout (or
settlement of any deferral) of an Individual Award for that Performance Period,
any payments due to such Participant shall be paid to the Participant’s Beneficiary;
(iii) Each Participant shall have the right to defer, in accordance with the terms and
conditions of the MICP, receipt of part of all of any payment due with respect to
such Individual Award; provided, however, that the terms of such deferral shall
comply with the requirements of Section 409A of the Code and shall not cause any
EIP Award under this Plan to fail to qualify as “performance-based compensation”
under Section 162(m) of the Code; and
(iv) In connection with any payout in settlement of an Individual Award, the
Committee shall post a corresponding debit to the Incentive Pool for the relevant
Performance Period.
Notwithstanding anything in this Plan to the contrary, the Committee may, in its discretion, decrease the
amount of the Individual Award payable with respect to the applicable Performance Period based on such
factors as it deems appropriate (including, but not limited to, corporate, business unit/division or individual
performance factors applicable under the MICP); provided, however, that the exercise of such discretion in
respect of one Participant shall not affect the allocation or amount of the payout to another Participant.
(h) Written Certifications. Determinations by the Committee as to the level of the
Performance Measure actually achieved and the resulting hypothetical funding of the Incentive Pool,
the amount potentially payable in respect of each Individual Award, the final amount, if any, payable in
settlement of each Individual Award, the satisfaction of other material terms of the Individual Award, and
other matters relating to Individual Awards shall be certified in writing prior to the payout and settlement of
the Individual Award.
5. Adjustments.
The Committee is authorized at any time during or after a Performance Period to adjust or modify the terms
of the EIP Awards or the calculation of the Performance Measure or specify new Individual Awards,
(i) in the event of any large, special and non-recurring dividend or other distribution, recapitalization,
reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange, liquidation,
dissolution or other similar corporate transaction, (ii) in recognition of any other unusual or nonrecurring event
affecting the Company or the financial statements of the Company (including events described in (i) above as
well as acquisitions and dispositions of businesses and assets and extraordinary items determined under
generally accepted accounting principles), or (iii) in response to changes in applicable laws and regulations,
accounting principles, and tax rates (and interpretations thereof) or changes in business conditions or
the Committee’s assessment of the business strategy of the Company. No such adjustment shall be authorized
or made if and to the extent that the existence of such authority would cause EIP Awards granted under the
Plan to Participants intended to qualify as “performance-based compensation” under Section 162(m) of
the Code to otherwise fail to qualify as “performance-based compensation.”