Progress Energy 2009 Annual Report Download

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THE FUTURE. THE POWER TO DO BOTH. MANAGING THE PRESENT
TURE. THE POWER TO DO BOTH. MANAGING THE PRESENT.
THE POWER TO DO BOTH. MANAGING THE PRESENT. CREA
WER TO DO BOTH. MANAGING THE PRESENT. CREATING THE
O DO BOTH. MANAGING THE PRESENT. CREATING THE FUTURE.
TH. MANAGING THE PRESENT. CREATING THE FUTURE. THE
MANAGING THE PRESENT. CREATING THE FUTURE. THE POWER
ING THE PRESENT. CREATING THE FUTURE. THE POWER TO D
PRESENT. CREATING THE FUTURE. THE POWER TO DO BOTH.
ENT. CREATING THE FUTURE. THE POWER TO DO BOTH. MANA
CREATING THE FUTURE. THE POWER TO DO BOTH. MANAGING
ING THE FUTURE. THE POWER TO DO BOTH. MANAGING THE
TURE. THE POWER TO DO BOTH. MANAGING THE PRESENT
THE POWER TO DO BOTH. MANAGING THE PRESENT. CREA
WER TO DO BOTH. MANAGING THE PRESENT. CREATING THE
O DO BOTH. MANAGING THE PRESENT. CREATING THE FUTURE.
TH. MANAGING THE PRESENT. CREATING THE FUTURE. THE
MANAGING THE PRESENT. CREATING THE FUTURE. THE POWER
ING THE PRESENT. CREATING THE FUTURE. THE POWER TO D
PRESENT. CREATING THE FUTURE. THE POWER TO DO BOTH.
ENT. CREATING THE FUTURE. THE POWER TO DO BOTH. MANA
CREATING THE FUTURE. THE POWER TO DO BOTH. MANAGING
ING THE FUTURE. THE POWER TO DO BOTH. MANAGING THE
TURE. THE POWER TO DO BOTH. MANAGING THE PRESENT
THE POWER TO DO BOTH. MANAGING THE PRESENT. CREA
WER TO DO BOTH. MANAGING THE PRESENT. CREATING THE
O DO BOTH. MANAGING THE PRESENT. CREATING THE FUTURE.
TH. MANAGING THE PRESENT. CREATING THE FUTURE. THE
MANAGING THE PRESENT. CREATING THE FUTURE. THE POWER
ING THE PRESENT. CREATING THE FUTURE. THE POWER TO D
PRESENT. CREATING THE FUTURE. THE POWER TO DO BOTH.
MANAGING THE PRESENT.
CREATING THE FUTURE.
THE POWER TO DO BOTH.
2009 Annual Report and Notice of Annual Meeting and Proxy Statement
THE
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O
TURE.
THE
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.
THE
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THE
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.
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‘09

Table of contents

  • Page 1
    ... BOTH. MANAGING THE PRESENT. CREATING T DO BOTH. MANAGING THE PRESENT. CREATING THE FUT H. MANAGING THE PRESENT. CREATING THE FUTURE. T NAGING THE PRESENT. CREATING THE FUTURE. THE POW 2009 Annual Report and Notice of Annual Meeting and Proxy Statement THE PRESENT. CREATING THE FUTURE. THE POWER TO...

  • Page 2
    ... THE FUTURE. TH HE POWER TO DO BOTH. MANAGING THE PRESENT. CREA a message from our CEO DEAR SHAREHOLDERS: Progress Energy lived up to its commitments in 2009 despite the hard economic realities in our nation and region. We delivered reliable, responsive service to customers and solid results to...

  • Page 3
    ... of people count on us for an essential service or a quarterly dividend (in many cases, both), and for being a responsible corporate citizen. Throughout this period, our two electric utilities - Progress Energy Carolinas and Progress Energy Florida - have continued to excel in our core mission...

  • Page 4
    ... to fund the projects needed to be ready for a growing population and expanding economy as well as to meet the requirements of new energy and environmental policies. National and state energy policies remain in ï¬,ux, especially the rules to reduce greenhouse gas emissions and address global climate...

  • Page 5
    ...in a state-of-the-art power system. These larger investments include the Smart Grid and fossil-fuel ï¬,eet modernization in the near-to-mid term and new advanced nuclear generation in the longer term. Financial highlights Years ended December 31 (in millions except per share data) 2009 2008 2007...

  • Page 6
    ...encouraging early success and expect much more in the years ahead. In assessing the overall situation Progress Energy faces, I am confident we will meet our short-term priorities while also producing long-term value for our customers and shareholders. In other words, we will manage the present and...

  • Page 7
    &B?7B5CC>5B7I .+*,$)$%(%() -9 566B5I ?B25DD ?8>( #3BD8EB #93815; )389D# ? "

  • Page 8
    )       (  % (   % (   % ( -  (  " % % !  $   ) **  #  $ * ) 6

  • Page 9
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  )  %     $  $    "   % $   *  % $   $   (  ) + "* )  %   % &  ( *  % $ ) &B?7B5CC>5B7I )DB1D57I $*(%+*%$ ฀ ฀ ฀ ฀ ฀ &INANCIAL฀0E FO MANCE /PE A IONAL฀0E FO MANCE / GANI A IONAL฀%...

  • Page 10
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  ) %($0*%$"*,$)) $$"$%&(*%$"&(%(#$ (+"*%$$&+"&%"/ 8

  • Page 11
    &B?7B5CC>5B7I )*(*$**,) 9

  • Page 12
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  ) ()+"*)%%&(*%$) (in millions except per share data) ?BD85I51B5>454535=25B   %>7?9>71B>9>7C ,%=1B; D? =1B;5D =@19B=5>D>5D?6D1H 1 1 &      &     ?B@?B1D5 1>4%D85B   ...

  • Page 13
    ... HIGHE ฀ IN E MEN ฀ LO E ฀ OF฀ CE AIN฀ EMPLO EE฀ BENE ฀ ฀ NFA O ABLE฀ IMPAC ฀ OF฀ DI CON IN ED฀ NON ILI ฀ ฀ NFA O ABLE฀ NE ฀ E AIL฀ C OME ฀ G O H฀ AND฀ AGE฀ A ฀ ฀ HIGHE ฀ DEP ECIA ION฀ AND฀ AMO I A ION฀ E PEN E฀ A ฀ 0%&฀ ฀ HIGHE ฀IN...

  • Page 14
    (,$+) 12

  • Page 15
    &B?7B5CC>5B7I %)(%''%*)-*"&$            .&$)) E54&EB381C54&?G5B %@5B1D9?>1>4#19>D5>1>35 13

  • Page 16
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  ) *1H5C%D85B*81>?>>3?=5 *?D13?=5$5D 5@B5391D9?>=?BD9J1D9?>1>433B5D9?> *?D1D5B5CD81B75C$5D 14

  • Page 17
    &B?7B5CC>5B7I >3?=5*1HH@5>C5 (,$+) &B?7B5CC>5B7I

  • Page 18
    .&$)) E54&EB381C54&?G5B 16

  • Page 19
    &B?7B5CC>5B7I 5@B5391D9?>=?BD9J1D9?>1>433B5D9?> %@5B1D9?>1>4#19>D5>1>35 17

  • Page 20
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  ) *1H5C%D85B*81>?>>3?=5 >3?=5*1HH@5>C5 %D85B *?D13?=5$5D ?B@?B1D51>4%D85B *?D1D5B5CD81B75C$5D 18

  • Page 21
    &B?7B5CC>5B7I      #&(#$* 19

  • Page 22
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  ) =@13D?6+D9

  • Page 23
    &B?7B5CC>5B7I CC5D(5D9B5=5>D%2C ??4G9

  • Page 24
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  ) +>29

  • Page 25
    &B?7B5CC>5B7I >3?=5*1H5C &5>C9?>?CDC 23

  • Page 26
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  ) "'+*/$&*"()%+() %F5BF95G 24

  • Page 27
    &B?7B5CC>5B7I 9CD?B9314  1C?=@1B54D?  )"%-)(%#%&(*%$) $,)*$*,*) 25

  • Page 28
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  ) $$$*,*)  ฀ /N฀ AN A ฀  ฀  ฀ HE฀ 0A EN ฀ PAID฀ A ฀ MA I ฀ 26

  • Page 29
    ... NE฀ ฀ ฀0%#฀EN E ED฀IN O฀A฀3E EN E EN H฀ ฀ /N฀ -A ฀  ฀  ฀ 0 OG E ฀ #API AL฀ (OLDING ฀ )NC ฀ ONE฀ ฀ /N฀.O EMBE ฀ ฀ ฀ HE฀0A EN ฀I ED฀AN฀AGG EGA E฀ ฀ /N฀ NE฀  ฀  ฀ 0%&฀ I ED฀ ฀ MILLION฀ OF...

  • Page 30
    ...  ฀  ฀ D E฀ O฀ E EME฀ OLA ILI ฀ IN฀ HE฀ ฀ /N฀ 3EP EMBE ฀  ฀  ฀ 0%&฀ I ED฀ ฀ MILLION฀ OF฀ &I ฀ ฀ /N฀$ECEMBE ฀ ฀ ฀0 OG E ฀#API AL฀(OLDING ฀)NC ฀ ฀ 0 OG E ฀ %NE G ฀ I ED฀ APP O IMA EL ฀ ฀ MILLION฀ 28

  • Page 31
    &B?7B5CC>5B7I 29

  • Page 32
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  ) &%D85B#1DD5BC (+"*%(/#**()$(%,(/%%)*) &?CD (53?F5BI

  • Page 33
    &B?7B5CC>5B7I &1C5(1D5C &?CD (53?F5BI

  • Page 34
    3DE1 32

  • Page 35
    &B?7B5CC>5B7I (in millions)   &1B5>D D17   9F5 I51B5H@9B9>7   9F5 I51B5H@9B9>7   *?D1 %EDCD1>49>71 L L L L (5C5BF542   L L   F19

  • Page 36
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  ) *)#!,(.%)#&1B5>D & &  &1@9D1

  • Page 37
    &B?7B5CC>5B7I % "$)*(($#$*)$ %$*(*+"%"*%$) E1B1>D55C 2 35

  • Page 38
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  ) #1B;5D(9C;1>45B9F1D9F5C * * ?>DB13DE1

  • Page 39
    &B?7B5CC>5B7I %*(#**() (57EF9B?>=5>D 37

  • Page 40
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  ) >5B7I5=1>4 38

  • Page 41
    &B?7B5CC>5B7I 39

  • Page 42
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  ) &%*$*"$-%$)*(+*%$ $E3

  • Page 43
    &B?7B5CC>5B7I 41

  • Page 44
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  ) )&$*$+"(+"#**() 42

  • Page 45
    &B?7B5CC>5B7I >F9B?>=5>D1

  • Page 46
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  ) )=?;5CD13;C3D ('+"*/$-*('+"*/ 44

  • Page 47
    &B?7B5CC>5B7I 9B>D5BCD1D5(E

  • Page 48
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  ) >F9B?>=5>D1

  • Page 49
    &B?7B5CC>5B7I 9B1>4-1D5B'E1F9B?>=5>D149DEB5C %)(%''%*)- * $?BD81B?1DD?B>5I5>5B1E>45B)53D9?> ?6D859B3D * * $1D9?>1D9B'E141B4C * 47

  • Page 50
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  ) * * * * $5G)?EB35(5F95G * * * * -1D5B'E1

  • Page 51
    &B?7B5CC>5B7I !.%*)  *".$!'!).!,. %*($,(%$#$*"#**() 

  • Page 52
    #  $    #  $ *  )    )  + ) )  % $   $    $  "/ )  ) * "571< $5G33?E>D9>7)D1>41B4C )I>D85D93E5

  • Page 53
    #(!*()!)"%)+() &B?7B5CC>5B7I '+$***,$'+"**, )"%)+()%+*#(!*()! >D5B5CD(1D5(9C; 51

  • Page 54
    (dollars in millions) 535=25B   9H54 B1D57 D5B=452D  F5B1759>D5B5CDB1D5 ,1B912DB13DC  F5B175@1IB1D5  F5B175B5359F5B1D5 * 2        L L   ...

  • Page 55
    &B?7B5CC>5B7I ?>D9>75>D,1

  • Page 56
    #(!*()!)"%)+() )"%-) 54

  • Page 57
    (  & % ( * )  %   #  $    #  $ *   $    $   &  $   $ * ()*(&+"%+$*$(# &B?7B5CC>5B7I #$#$*)(&%(*%$$*($"%$*(%"%,($$"(&%(*$     55

  • Page 58
    (  & % ( * )  %   #  $    #  $ *   $    $   &  $   $ * ()*(&+"%+$*$(# (&%(*%$&$$*()*(&+"%+$*$(# *?D85?1B4?69B53D?BC1>4)81B58?5B7I>3         ...

  • Page 59
    &B?7B5CC>5B7I (&%(*%$&$$*()*(&+"%+$*$(# *?D85?1B4?69B53D?BC1>4)81B58?5B7I>3      57

  • Page 60
    5B1D9>7B5F5>E5C %@5B1D9>75H@5>C5C D175H@5>C5C D13?=5>5D D1D5B5CD381B75C>5D      9F945>4C453C81B5 =?E>DC1DDB92ED12DB?D5B5CDC  %@5B1D9>79>3?=5 %D85B9>3?=55H@5>C5 >D5B5CD381B75C >3?=56B?=3?>D9>...

  • Page 61
    &B?7B5CC>5B7I D94?D85B1CC5DC   *?D14?D85B1CC5DC   *?D1

  • Page 62
     % $ ) % "   *      $  $    "  ) **  #  $ * ) %$)%"*)**#$*)%)"%-) %)(%''%*)-   %@5B1D9>713D9F9D95C      L                            L     ...

  • Page 63
    &B?7B5CC>5B7I 135535=25B           135535=25B           135535=25B   $5D9>3?=51 %D85B3?=@B585>C9F59>3?=5 CCE1>35?6C81B5C 

  • Page 64
    $ % *  )  * %   % $ ) % "   *      $  $    "  ) **  #  $ * ) T U %($0*%$$)+##(/% )$$*%+$*$&%")  %B71>9J1D9?>  1C9C?6&B5C5>D1D9?>  ?>C??6,1B912D5B5CD>D9D95C 62

  • Page 65
    &B?7B5CC>5B7I ,("$*()*$**)%(-&)* &(#(/$(/ %*(,("&$*()*) 63

  • Page 66
    $ % *  )  * %   % $ ) % "   *      $  $    "  ) **  #  $ * ) )*%! )%#&$)*%$  )97>9K31>D33?E>D9>7&?

  • Page 67
    &B?7B5CC>5B7I &(*%$$#%(*0*%$L+*"*/&"$* $,$*%(/ (+"*%(/))*)$""*) $+"(%)*((") ))*(*(#$*%"*%$) )$)'+,"$*) %%-""$$*$"))*) 65

  • Page 68
    $ % *  )  * %   % $ ) % "   *      $  $    "  ) **  #  $ * ) +$#%(*0*&(#+#))%+$*)$ .&$)) "%))%$*$$)$$,(%$#$*" ""*) $%#*.) (,*,) #&(#$*%"%$ ",))*)$ $,)*#$*) 66

  • Page 69
    &B?7B5CC>5B7I )  ))$?   O9C3

  • Page 70
    $ % *  )  * %   % $ ) % "   *      $  $    "  ) **  #  $ * ) )+  O>F5CD=5>DC9>5BD19>>D9D95C *81D1D85D93E55CC5C )   )&) ( ...

  • Page 71
    &B?7B5CC>5B7I   L    L    %L5?B791%@5B1D9?>C   L    L  L   ?19>7EC9>5CC5C 69

  • Page 72
    $ % *  )  * %   % $ ) % "   *      $  $    "  ) **  #  $ * ) %)(%''%*)-   L    L   %D85B9F5BC9K54EC9>5CC5C  &(%&(*/&"$*$'+&#$*  +D9D85D93E5D5B5CDC 70

  • Page 73
    &B?7B5CC>5B7I   ?9>D%G>5BC89@?65>5B1D9>71399D BICD19D >D5B35CC9?>9DI+>9D& ?=@1>I%G>5BC89@ >D5B5CD             &D>F5CD=5>D 33E=E

  • Page 74
     CC5D(5D9B5=5>D%2C 72

  • Page 75
    &B?7B5CC>5B7I 33B5D9?>5H@5>C5 (5F9C9?>CD?@B9?B5CD9=1D5C CC5DB5D9B5=5>D?2C1D535=25B    >CEB1>35 73

  • Page 76
     $,$*%(/  (57E4"9129

  • Page 77
    &B?7B5CC>5B7I L  75

  • Page 78
    $ % *  )  * %   % $ ) % "   *      $  $    "  ) **  #  $ * )  &(5D19

  • Page 79
    &B?7B5CC>5B7I S $,(%$#$*"%#&"$%)*(%,(/ %*(#**() ($-"$(/$$(/$/ &%(*%"%)*$(%)*(%,(/ 77

  • Page 80
    $ % *  )  * %   % $ ) % "   *      $  $    "  ) **  #  $ * )  &(5D19

  • Page 81
    &B?7B5CC>5B7I +"%)*(%,(/ 79

  • Page 82
    $ % *  )  * %   % $ ) % "   *      $  $    "  ) **  #  $ * ) $+"(%)*(%,(/ "5FI$E3

  • Page 83
    &B?7B5CC>5B7I (+@B1D5 )*%(#%)*(%,(/ 81

  • Page 84
    $ % *  )  * %   % $ ) % "   *      $  $    "  ) **  #  $ * )  $E3

  • Page 85
    &B?7B5CC>5B7I 81B5C $5D&B?3554C          )D?3; 1C54?=@5>C1D9?> * 83

  • Page 86
    *+.%*)23 84

  • Page 87
    &B?7B5CC>5B7I 85

  • Page 88
     1B>9>7C&5B?==?>)81B5 2        33E=EC9F5"?CC >3?=5 L  86

  • Page 89
    &B?7B5CC>5B7I 0 PEF 87

  • Page 90
    52D1>4B549D139D    L L B941&B?7B5CCE>49>7?B@?B1D9?>)55$?D5 L L 88

  • Page 91
    &B?7B5CC>5B7I    L L    L L   (in millions)   &1B5>D D17   9F5 I51B5H@9B9>7   9F5 I51B5H@9B9>7   *?D1 %EDCD1>49>71 L L L L (5C5BF542   L L   F19

  • Page 92
    $ % *  )  * %   % $ ) % "   *      $  $    "  ) **  #  $ * ) %)(%''%*)- %*(()*(*%$)  ?F5>1>DC1>4561EC $$"%,$$*) (%)) +"*&(%,)%$) 90

  • Page 93
    &B?7B5CC>5B7I  >F5CD=5>DC L    ?DC  E1B1>D55C?6)E2C9491BI52D  5479>73D9F9D95C  52D1>4>F5CD=5>DC * 91

  • Page 94
    $ % *  )  * %   % $ ) % "   *      $  $    "  ) **  #  $ * ) $,)*#$*) %)(%''%*)- (in millions)   AE9DIC53EB9D95C ?B@?B1D5452DC53EB9D95C + ) CD1D51>4=E>939@146?B597>7?F5B>=5>D 452DC53EB9D95C #?>5I=1B;5D6E>4C1>4 ?D85BC53EB9D95C...

  • Page 95
    &B?7B5CC>5B7I  19B,1DC %)(%''%*)- CC5DC "9129

  • Page 96
     94

  • Page 97
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  • Page 98
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  • Page 135
    ... Progress Energy Center for the Performing Arts, 2 East South Street, Raleigh, North Carolina. As described in the accompanying Notice of Annual Meeting of Shareholders and Proxy Statement, the matters scheduled to be acted upon at the meeting for Progress Energy, Inc. are the election of directors...

  • Page 136
    ...at the Annual Meeting, please vote your shares as promptly as possible. In addition to voting in person, shareholders of record may VOTE VIA A TOLL-FREE TELEPHONE NUMBER OR OVER THE INTERNET, as instructed in the materials. If you received this Proxy Statement by mail, please promptly SIGN, DATE and...

  • Page 137
    ... Company's Common Stock of record at the close of business on March 5, 2010, are entitled to attend the meeting and to vote. The stock transfer books will remain open. By order of the Board of Directors JOHN R. MCARTHUR Executive Vice President and Corporate Secretary Raleigh, North Carolina March...

  • Page 138
    ... PROXY STATEMENT TABLE OF CONTENTS Page Annual Meeting and Voting Information Proposal 1-Election of Directors ...4 Principal Shareholders ...10 Management Ownership of Common Stock ...10 Transactions with Related Persons ...12 Section 16(a) Beneficial Ownership Reporting Compliance...13 Corporate...

  • Page 139
    ... by the Board of Directors (at times referred to as the "Board") of proxies to be used at the Annual Meeting of Shareholders. That meeting will be held at 10:00 a.m. on May 12, 2010, at the Progress Energy Center for the Performing Arts, 2 East South Street, Raleigh, North Carolina. (For directions...

  • Page 140
    ... a "hold-into-retirement" policy for equity awards as set forth in this Proxy Statement. Proxies will be voted at the discretion of the named proxies on any other business properly brought before the meeting. If you are a participant in our 401(k) Savings & Stock Ownership Plan, shares allocated to...

  • Page 141
    .... At the 2010 Annual Meeting of Shareholders, two nonroutine matters, the election of 14 directors of the Company with terms expiring in 2011 and a shareholder proposal regarding the adoption of a "hold-into-retirement" policy for equity awards, will be presented for a vote. Accordingly, if you...

  • Page 142
    .... Shares held in "street name" that are not voted with respect to the shareholder proposal regarding the adoption of a "hold-into-retirement" policy for equity awards will not be included in determining the number of votes cast. We will announce preliminary voting results at the Annual Meeting...

  • Page 143
    ... of our non-management directors, and Mr. Martinez was recommended to the Governance Committee by William D. Johnson, who is our Chairman of the Board, President and Chief Executive Officer. (Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. ("PEC") and Florida Power Corporation...

  • Page 144
    ... oversaw the generation and delivery of electricity by PEC and PEF. Mr. Johnson has been with Progress Energy (formerly CP&L) in a number of roles since 1992, including Group President for Energy Delivery, President and Chief Executive Officer for Progress Energy Service Company, LLC and General...

  • Page 145
    ...as a director of the Company since 2005. He is a member of the Board's Audit and Corporate Performance Committee, the Nuclear Project Oversight Committee and the Operations and Nuclear Oversight Committee. Other public directorships in past five years: Premiere Global Services, Inc. (2007 to present...

  • Page 146
    ... will help us in the years ahead as our Company pursues a balanced solution to meeting its customers' future energy needs. He has served as a director of the Company since 2007. Mr. Pryor is Chair of the Board's Nuclear Project Oversight Committee and a member of the Audit and Corporate Performance...

  • Page 147
    ...served as a director of the Company since 2001 and is a member of the Board's Audit and Corporate Performance Committee and the Finance Committee. Other public directorships in past five years: Advance Auto Parts, Inc. (2003 to present) THERESA M. STONE, age 65, has been Executive Vice President and...

  • Page 148
    ... below sets forth the only shareholder we know to beneficially own more than 5 percent (5%) of the outstanding shares of our Common Stock as of December 31, 2009. We do not have any other class of voting securities. Title of Class Name and Address of Beneficial Owner Number of Shares Beneficially...

  • Page 149
    ... Stock Unit Plan as of February 22, 2010. A unit of Common Stock does not represent an equity interest in the Company, and possesses no voting rights, but is equal in economic value at all times to one share of Common Stock. Directors' Deferred Compensation Plan Non-Employee Director Stock Unit Plan...

  • Page 150
    ... any of the Company's directors, executive officers, nominees for director or any of their immediate family members had a direct or indirect material interest. Our Board of Directors has adopted policies and procedures for the review, approval or ratification of Related Person Transactions under...

  • Page 151
    ... Lead Director, Progress Energy, Inc. Board of Directors, c/o John R. McArthur, Executive Vice President and Corporate Secretary, P.O. Box 1551, Raleigh, North Carolina 27602-1551. We screen mail addressed to Mr. Mullin for security purposes and to ensure that it relates to discrete business matters...

  • Page 152
    ... Company's Code of Ethics as its own standard. Board members, our officers and our employees certify their compliance with our Code of Ethics on an annual basis. Our Governance Guidelines and Code of Ethics are posted on our Internet Web site and can be accessed at www.progress-energy.com/investor...

  • Page 153
    ..., 2009, and Mr. Saladrigas, who was recovering from an illness at the time of the meeting. BOARD COMMITTEES The Board of Directors appoints from its members an Executive Committee, an Audit and Corporate Performance Committee, a Governance Committee, a Finance Committee, a Nuclear Project Oversight...

  • Page 154
    ... and investments, pension funds and financing plans. The Finance Committee also monitors our risk management activities and financial position and recommends changes to our dividend policy and proposed budget. The Finance Committee held four meetings in 2009. Nuclear Project Oversight Committee...

  • Page 155
    ... plans are aligned with our business strategy and compensation philosophy. John R. McArthur, our Executive Vice President and Corporate Secretary, serves as management's liaison to the Compensation Committee. William D. Johnson, our Chief Executive Officer, is responsible for conducting annual...

  • Page 156
    ... to vote for the election of directors at the applicable meeting of shareholders may nominate persons for election to the Board of Directors if that shareholder complies with the notice procedure set forth in the By-Laws and summarized in "Future Shareholder Proposals" below. Governance Committee...

  • Page 157
    ... send communications to the Board and, if applicable, to the Governance Committee or to specified individual directors, including the Lead Director, in writing c/o John R. McArthur, Executive Vice President and Corporate Secretary, Progress Energy, Inc., P.O. Box 1551, Raleigh, North Carolina 27602...

  • Page 158
    ...managed within the established framework. The Finance Committee reports to the full Board at least once a quarter. The Operations and Nuclear Oversight Committee is charged with oversight of risks related to operations and environmental and health and safety issues. The Organization and Compensation...

  • Page 159
    ... executive compensation structure with our shareholders' interests. These actions include a significant reduction of perquisites for both our executive officers and non-executive officers who are in senior management; an increase in the stock ownership guidelines; implementation of a new performance...

  • Page 160
    ... environmentally responsible generating capacity increases. To address this issue, we have designed market-based compensation programs that are competitive and are aligned with our corporate strategy. Consistent with these principles, the Committee seeks to provide executive officers a compensation...

  • Page 161
    ...WR reflect the compensation program's goals of risk assumption and sharing between executives and shareholders. ‡ ‡ ‡ ‡ ‡ We have determined that the compensation program for non-executive officers who are in senior management positions does not encourage excessive risk taking for all...

  • Page 162
    ... to each of the parties in the event of termination of employment. Personal benefits awarded outside of base pay and incentives. Employee benefits such as health and welfare benefits, 401(k) and pension plan. Provides executives with tax deferral options in addition to those available under our...

  • Page 163
    ... the NYSE Corporate Governance Rules). Members of the Committee currently do not receive compensation under any compensation program in which our executive officers participate. For a discussion of director compensation, see the "Director Compensation" section on page 69 of this Proxy Statement. The...

  • Page 164
    ... our business strategy and meet the principles described above. John R. McArthur, our Executive Vice President, serves as management's liaison to the Committee. Our executive officers and other Company employees provide the consultant with information regarding our executive compensation plans and...

  • Page 165
    ... nondeductible compensation. The Company received shareholder approval of the Progress Energy 2009 Executive Incentive Plan (the "EIP"), an annual cash incentive plan for the Company's named executive officers, at its 2009 Annual Meeting of Shareholders. The MICP and EIP were designed to work...

  • Page 166
    ... our executives with the interests of shareholders, the Board of Directors utilizes stock ownership guidelines for all executive officers. The guidelines are designed to ensure that our management maintains a significant ownership stake in the Company. The guidelines require each senior executive to...

  • Page 167
    ...Peer Group identified above and consideration of each executive officer's skills, experience, responsibilities and performance. Market compensation levels are used to assist in establishing each executive's job value (commonly called the "midpoint" at other companies). Job values serve as the market...

  • Page 168
    ...Y S T AT E M E N T Each year, the Committee establishes the threshold, target and outstanding levels for the performance measures applicable to the named executive officers. The 2009 MICP performance measures were ongoing earnings per share (EPS) and business unit EBITDA for PEC and PEF as shown in...

  • Page 169
    ... Company's shareholders and drive specific financial performance. Performance shares are intended to focus executive officers on the multi-year sustained achievement of financial and shareholder value objectives. Restricted stock units are service-based and provide an opportunity for the executive...

  • Page 170
    ... named executive officers' long-term incentive targets compared to the targeted benchmarks in "2009 COMPENSATION DECISIONS" on page 40 below. Grants of equity-based awards typically occur in the first quarter, after the annual earnings release. This timing allows current financial information...

  • Page 171
    ... incentive plans of other highly regulated utility companies and to improve its alignment with the Company's goals. The 2009 PSSP continues to be based on a three-year performance period, and performance shares accrue quarterly dividend equivalents, which are reinvested in additional shares. Shares...

  • Page 172
    ... units provide the same incentives and value as restricted stock, but are more flexible and cost effective for the Company. Executive officers typically receive a grant of service-based restricted stock units in the first quarter of each year which are subject to a three-year graded vesting schedule...

  • Page 173
    ... pay includes base salary and annual incentive. (For those executives who became SERP participants on or after January 1, 2009, the target benefit percentage is 2.25% rather than 4% per year of service. None of the named executive officers for 2009 is subject to the new benefit percentage.) Benefits...

  • Page 174
    ... to receive any of the CIC Plan's benefits absent both a CIC of the Company and an involuntary termination of the participant's employment without cause, including voluntary termination for good reason. Good reason termination includes changes in employment circumstances such as DUHGXFWLRQRIEDVH...

  • Page 175
    ... the Company terminates. Additionally, the following benefits are potentially available to named executive officers upon a CIC. Benefit Annual Incentive Restricted Stock Agreements Performance Share Sub-Plan Stock Option Agreements Supplemental Senior Executive Retirement Plan Deferred Compensation...

  • Page 176
    ...available to the named executive officers during 2009 include: Perquisites for 2009 Personal Travel on Corporate Aircraft and "Business-Related" Spousal Travel1 Financial and Estate Planning Luncheon and Health Club Dues Executive Physical Internet and Telecom Service2 Home Security Accidental Death...

  • Page 177
    ... work more efficiently and, in the case of the tax and financial planning services, help them to optimize the value received from all of the compensation and benefits programs offered. The costs of these benefits constitute only a small percentage of each named executive officer's total compensation...

  • Page 178
    ...executive officer management team, the Company reported solid financial and operating results in 2009 despite the challenging economic and regulatory environment. Highlights of the Company's 2009 performance include the following: ‡ ‡ 5HWXUQHGYDOXHWRVKDUeholders including increasing dividends...

  • Page 179
    ... stock units and 55,546 performance shares in accordance with his pre-established targets of 117% and 233%, respectively, of his base salary. The performance shares are earned based on performance over the three years ending December 31, 2011. Additionally, 29,456 shares of the 2007 annual grant...

  • Page 180
    ... in the Company achieving its EPS goal, execution of a funding strategy for the pension plan, and obtaining interim rate relief for PEF. With respect to his long-term incentive compensation, in 2009, Mr. Mulhern was granted 5,604 restricted stock units and 11,304 performance shares in accordance...

  • Page 181
    ... gas-fired plants; and increased the focus on safety by reducing our OSHA injury rate. With respect to long-term compensation, in 2009 each of the other named executive officers received annual grants of restricted stock units and performance shares in accordance with their pre-established targets...

  • Page 182
    ... in the SERP in 2009. IV. COMPENSATION COMMITTEE REPORT The Committee has reviewed and discussed this CD&A with management as required by Item 402(b) of Regulation S-K. Based on such review and discussions, the Committee recommended to the Company's Board of Directors that the CD&A be included...

  • Page 183
    ...our stock option program. 4 Includes the awards given under the Management Incentive Compensation Plan (MICP) for 2007, 2008 and 2009 performance. 5 Includes the change in present value of the accrued benefit under Progress Energy's Pension Plan, SERP, and/ or Restoration Plan where applicable. In...

  • Page 184
    ... 2000. The above market earnings under the Deferred Compensation Plan for Key Management Employees are included in this column for Mr. Johnson. 6 Includes the following items: Company match contributions under the Progress Energy 401(k) Savings & Stock Ownership Plan; dividends paid under provisions...

  • Page 185
    Progress Energy Proxy Statement travel, home security, and Internet and telecom access. During 2009, the Company required Mr. Lyash to relocate from Florida to North Carolina in connection with his becoming the Company's Executive Vice President - Corporate Development. Mr. Lyash received standard ...

  • Page 186
    ... Equity Incentive Plan Awards2 All Other Stock Awards: Number of Shares of Stock or Units3 (#) (i) Grant Threshold Target Maximum Threshold Date (d) (e) (f) (c) (b) MICP 3/5/10 $416,173 $832,346 $1,664,692 Restricted William D. Johnson, Stock Chairman, President and Units Chief Executive Officer...

  • Page 187
    Progress Energy Proxy Statement Reflects the potential payouts in shares of the 2009 PSSP grants. The grant size was calculated by multiplying the executive's salary as of January 1, 2009, times his 2009 PSSP target and dividing by the December 31, 2008, closing stock price of $39.85. The Threshold...

  • Page 188
    ... of employees and protecting our confidential information and trade secrets for specified periods if the applicable officer is terminated without cause or otherwise becomes eligible for the benefits under the agreement. Except for the application of previously granted years of service credit to...

  • Page 189
    Progress Energy Proxy Statement OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END Option Awards1 Stock Awards Equity Incentive Plan Equity Awards: Incentive Market or Plan Payout Awards: Number of Value of Unearned Unearned Shares, Shares, Units or Units or Other Other Rights Rights That That Have Not ...

  • Page 190
    ...on March 20, 2010; 1,547 units on March 17, 2011; 1,205 units on March 18, 2011; 1,189 units on March 20, 2011; 3,548 units on March 17, 2011; and 1,188 units on March 20, 2012. 14 Includes performance shares granted on March 20, 2007, March 18, 2008, March 17, 2009, and accumulated GLYLGHQGVDVRI...

  • Page 191
    ... the number of restricted stock shares, restricted stock units, and performance shares that vested in 2009. Restricted stock units vested for named executive officers on March 18 at $33.80 per share, and performance shares vested on January 1, 2009 for the 2006 and 2007 2-year transitional grants at...

  • Page 192
    ...T PENSION BENEFITS TABLE Number of Present Years Value of Payments Credited Accumulated During Last Service Benefit1 Fiscal Year Plan Name b) (c) (d) (e) Progress Energy Pension Plan 17.3 $448,578 $0 Supplemental Senior Executive Retirement Plan 24.32 $7,282,4833 $0 Progress Energy Pension Plan 13...

  • Page 193
    ... Plan, Performance Share Sub-Plan, Management Deferred Compensation Plan, and Deferred Compensation Plan for Key Management Employees. Includes above market earnings of $10,037 under the Deferred Compensation Plan for Key Management Employees, which is reported as "Change in Pension Value...

  • Page 194
    ...Ms. Sims received a distribution from her Management Incentive Deferred Compensation Plan: $14,115. 12 Includes balances under the following deferral plans: Management Deferred Compensation Plan: $296,625; Management Incentive Compensation Plan: $86,401; and Performance Share Sub-Plan: $61,023. 56

  • Page 195
    ...$15,188 $904,941 Consists of the total 2009 base salary earnings prior to (i) employee contributions to the Progress Energy 401(k) Savings & Stock Ownership Plan and (ii) voluntary deferrals, if applicable, under the Management Deferred Compensation Plan (MDCP) shown in column (c). 2 Awards given...

  • Page 196
    ... stock price for Progress Energy Common Stock on the business day prior to when distribution occurred. Reflects dividends and dividend equivalents paid as the result of outstanding restricted stock or restricted stock units held in Company Plan accounts. 7 Reflects the value of any stock options...

  • Page 197
    ... the Annual Cash Incentive Compensation Plan provisions of the Management Change-in-Control Plan, calculated as 85% times $990,000. In the event of early retirement, death or disability, Mr. Johnson would receive a pro-rata incentive award for the period worked during the year. For December 31, 2009...

  • Page 198
    ... 2007 grant; 34,012 performance shares from the 2008 grant; and 18,458 performance shares from the 2009 grant. In the event of involuntary or good reason termination (CIC), unvested performance shares vest as of the date of Management Change-in-Control and payment is made based upon the applicable...

  • Page 199
    ...Termination Retirement ($) ($) Compensation Base Salary-$425,0001 Annual Incentive2 Long-term Incentives Performance Shares (PSSP)3 2007 (performance period) 2008 (performance period) 2009 (performance period) Restricted Stock Units4 grant date vesting grant date vesting grant date vesting grant...

  • Page 200
    ... for early retirement or normal retirement. In the event of involuntary or good reason termination (CIC), unvested performance shares vest as of the date of Management Change-in-Control and payment is made based upon the applicable performance factor. As of December 31, 2009, the performance factor...

  • Page 201
    ...Termination Retirement ($) ($) Compensation Base Salary-$453,0001 Annual Incentive2 Long-term Incentives Performance Shares (PSSP)3 2007 (performance period) 2008 (performance period) 2009 (performance period) Restricted Stock Units4 grant date vesting grant date vesting grant date vesting grant...

  • Page 202
    ... for early retirement or normal retirement. In the event of involuntary or good reason termination (CIC), unvested performance shares vest as of the date of Management Change-in-Control and payment is made based upon the applicable performance factor. As of December 31, 2009, the performance factor...

  • Page 203
    ...Termination Retirement ($) ($) Compensation Base Salary-$448,0001 Annual Incentive2 Long-term Incentives Performance Shares (PSSP)3 2007 (performance period) 2008 (performance period) 2009 (performance period) Restricted Stock Units4 grant date vesting grant date vesting grant date vesting grant...

  • Page 204
    ... for early retirement or normal retirement. In the event of involuntary or good reason termination (CIC), unvested performance shares vest as of the date of Management Change-in-Control and payment is made based upon the applicable performance factor. As of December 31, 2009, the performance factor...

  • Page 205
    ...Termination Retirement ($) ($) Compensation Base Salary-$370,0001 Annual Incentive2 Long-term Incentives Performance Shares (PSSP)3 2007 (performance period) 2008 (performance period) 2009 (performance period) Restricted Stock Units4 grant date vesting grant date vesting grant date vesting grant...

  • Page 206
    ... for early retirement or normal retirement. In the event of involuntary or good reason termination (CIC), unvested performance shares vest as of the date of Management Change-in-Control and payment is made based upon the applicable performance factor. As of December 31, 2009, the performance factor...

  • Page 207
    ... Proxy Statement DIRECTOR COMPENSATION The following includes the required table and related narrative detailing the compensation each director received for his or her services in 2009. Change in Pension Value and Fees Non-Equity Nonqualified Earned Incentive Deferred or Paid in Stock Option Plan...

  • Page 208
    ... column. The numbers of stock units outstanding in the Non-Employee Director Deferred Compensation Plan as of December 3, 2009 for each Director listed above are in the table below. Non-Employee Director Non-Employee Director Stock Unit Plan Deferred Compensation Plan Dividend Reinvestments Dividend...

  • Page 209
    ... equal to the market value of a share of the Company's Common Stock on the date of payment multiplied by the number of units credited to the participant's account. NON-EMPLOYEE DIRECTOR STOCK UNIT PLAN Effective January 1, 1998, we established the Non-Employee Director Stock Unit Plan ("Stock Unit...

  • Page 210
    ... to various cultural arts and sporting events, which are de minimis in value. Each retiring Director also receives a gift valued at approximately $1,500 in appreciation for his/her service on the Board. Additionally, in 2009, directors were eligible to receive a 50 percent match from the Company for...

  • Page 211
    Progress Energy Proxy Statement EQUITY COMPENSATION PLAN INFORMATION as of December 31, 2009 (c) Number of (a) securities Number of remaining available securities to for future issuance be issued upon (b) under equity exercise of Weighted-average compensation plans outstanding exercise price of (...

  • Page 212
    ... AUDIT AND CORPORATE PERFORMANCE COMMITTEE The Audit and Corporate Performance Committee of the Company's Board of Directors (the "Audit Committee") has reviewed and discussed the audited financial statements of the Company for the fiscal year ended December 31, 2009, with the Company's management...

  • Page 213
    ......Other fees ...Total Fees ... Audit fees include fees billed for services rendered in connection with (i) the audits of our annual financial statements and those of our SEC reporting subsidiaries (Carolina Power & Light Company and Florida Power Corporation); (ii) the audit of the effectiveness of...

  • Page 214
    ... independent registered public accounting firm for the fiscal year ending December 31, 2010, requires approval by a majority of the votes actually cast by holders of Common Stock present in person or represented by proxy at the Annual Meeting of Shareholders and entitled to vote thereon. Abstentions...

  • Page 215
    ... compensation builds executive ownership. We also view a retention requirement approach as superior to a stock ownership guideline because a guideline loses effectiveness once it has been satisfied. We urge stockholders to vote for this proposal. COMPANY RESPONSE The Board and management oppose...

  • Page 216
    ...his base salary although our guidelines require him to hold 5 times his base salary in equity compensation. All of our senior executives are in compliance with the Company's stock ownership guidelines. The proposal states that the two-year post retirement retention approach is "superior" because the...

  • Page 217
    ... our executives almost completely dependent on the value of the Company stock, potentially resulting in them becoming unduly risk averse to the detriment of our shareholders. The Board of Directors remains committed to the design and implementation of equity compensation programs and stock ownership...

  • Page 218
    ...the proxy statement for our 2011 Annual Meeting must be received no later than December 1, 2010, at our principal executive offices, addressed to the attention of: John R. McArthur Executive Vice President and Corporate Secretary Progress Energy, Inc. P.O. Box 1551 Raleigh, North Carolina 27602-1551...

  • Page 219
    Progress Energy Proxy Statement ± DQ\RWKHULQIRUPDWLRQUHODWLQJWRVXFKSHUVRQWKDWLVUHTXLUHGWREHGLVFORVHGLQVROLFLWDWLRQV of proxies for election of directors or is otherwise required by the rules and regulations of the SEC promulgated under the Securities Exchange Act of 1934; and WKH...

  • Page 220
    ... the Company's last fiscal year was, a director or executive officer (i.e. members of the Senior Management Committee and the Controller) of the Company, Progress Energy Carolinas, Inc., or Progress Energy Florida, Inc. or a nominee to become a director of the Company, Progress Energy Carolinas, Inc...

  • Page 221
    Progress Energy Proxy Statement C. Approval Procedures 1. The Board has determined that the Committee is best suited to review and approve Related Person Transactions. Accordingly, at each calendar year's first regularly scheduled Committee meeting, management shall recommend Related Person ...

  • Page 222
    ... Board and any material Related Person Transaction shall be disclosed to the full Board of Directors. The material features of this Policy shall be disclosed in the Company's annual report on Form 10-K or in the Company's proxy statement, as required by applicable laws, rules and regulations. A-3

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    Progress Energy Proxy Statement Directions to Progress Energy's 2010 Annual Shareholders' Meeting Progress Energy Center for the Performing Arts 2 E. South Street, Raleigh, North Carolina Public Parking 002CS-61034

  • Page 227
    ... Business School at the University of North Carolina at Chapel Hill and formerly Chief Executive Officer of Suncorp-Metway Ltd. (banking and insurance in Australia). Chapel Hill, N.C. Elected to the board in 2005 and sits on the following committees: Audit and Corporate Performance; Nuclear Project...

  • Page 228
    .... CREATING THE FU CR Progress Energy, Inc. E. THE POWER TO DO BOTH. MANAGING THE PRESENT IN P.O. Box 1551 ATING THE FUTURE. THE POWERRaleigh, TO BOTH. MANAG FU N.C.DO 27602-1551 progress-energy.com HE PRESENT. CREATING THE FUTURE. THE POWER TO DO TH H. MANAGING THE PRESENT. CREATING THE FUTURE. THE...