8-KLeadership ChangesExhibits & Filings

Duke Energy CORP 8-K Report, Executive Changes (Feb 25, 2009)

Filed February 25, 2009For Securities:DUKDUKBDUK-PA

Summary

Duke Energy Corporation (DUK) filed an 8-K on February 25, 2009, detailing a new employment agreement for its President, CEO, and Chairman, James E. Rogers, effective February 19, 2009. This agreement extends through December 31, 2013, and notably continues Mr. Rogers' compensation structure which excludes base salary and cash bonuses in favor of equity-based awards. The new agreement outlines specific annual grants of stock options, phantom shares, and performance shares, with increasing values over the term. It also details the conditions under which these awards would vest or be forfeited upon various termination scenarios, including change in control. Additionally, the filing confirms the certification of Mr. Rogers' 2008 performance shares, reflecting achievement against pre-established objectives and a safety performance bonus.

Key Highlights

  • 1New employment agreement for CEO James E. Rogers extends through December 31, 2013.
  • 2Mr. Rogers' compensation will continue to be entirely equity-based (stock options, phantom shares, performance shares), with no base salary or cash bonuses.
  • 3The agreement outlines specific annual grant values for equity awards, with increases scheduled for subsequent years.
  • 4Detailed provisions address the treatment of equity awards upon various termination events (e.g., without cause, for good reason, retirement, death, disability) and change in control scenarios.
  • 52008 performance share results for Mr. Rogers were certified, with payouts based on actual performance and a safety-related bonus.
  • 6The agreement includes restrictive covenants (non-competition, non-solicitation) and specific provisions for aircraft usage and reimbursement for spousal travel expenses.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report on the new employment agreement entered into between Duke Energy Corporation and its President, CEO, and Chairman, James E. Rogers. It details the terms of his compensation and employment through December 31, 2013.

Under the new agreement, Mr. Rogers will not receive a base salary or participate in cash bonus programs. Instead, his compensation will consist of annual grants of stock options, phantom shares, and performance shares. The values of these grants are specified and increase over the term of the agreement.

The agreement specifies different outcomes for equity awards based on the reason for termination. For example, termination without cause or for good reason, or retirement with board approval, allows awards to continue vesting or be payable based on performance. Termination for death or disability results in full vesting of stock options and phantom stock, with pro-rated performance shares. Unvested awards expire if Mr. Rogers terminates without good reason or retires without approval, or if terminated for cause. A change in control coupled with termination by the company without cause or by Mr. Rogers for good reason can lead to immediate vesting of awards.

Yes, the filing confirms the certification of Mr. Rogers' 2008 performance shares. He earned a certain number of Duke Energy and Spectra Energy shares based on performance objectives, and received an additional payout (in Duke and Spectra Energy shares) due to zero work-related fatalities in 2008, consistent with the short-term incentive plan for other employees.