Progress Energy 2008 Annual Report Download - page 167

Progress Energy Proxy Statement
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The Committee has the sole authority and discretion to designate employees and/or positions
for participation in the CIC Plan. The Committee has designated certain positions, including all of the
named executive officer positions, for participation in the CIC Plan. Participants are not eligible 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:
• areductionofbasesalaryorincentivetargets;
• certainreductionsinpositionorscopeofauthority;
• asignificantchangeinworklocation;or
• abreachofprovisionsoftheCICPlan.
Rather than allowing benefit amounts to be determined at the discretion of the Committee, the
CIC Plan has specified multipliers designed to be attractive to the executives and competitive with current
market practices. With the assistance of its executive compensation and benefits consultant, the Committee
has reviewed the benefits provided under the CIC Plan to ensure that they meet the Company’s needs,
are reasonable and fall within competitive parameters. The Committee has determined that the current
multipliers are needed for the CIC Plan to be effective at meeting the goals described above.
The CIC Plan provides separate tiers of severance benefits based on the position a participant
holds within our Company. The continuation of health and welfare benefits coverage and the degree of
excise tax gross-up for terminated participants align with the length of time during which they will receive
severance benefits.
The following table sets forth the key provisions of the CIC Plan benefits as it relates to our named
executive officers:
Tier I Tier II
Eligible Positions
Chief Executive Officer,
Chief Operating Officer,
Presidents and Executive
Vice Presidents
Senior Vice Presidents
Cash Severance 300% of base salary and
annual incentive1200% of base salary and
annual incentive1
Health & Welfare Coverage
Period Coverage up to 36 months Coverage up to 24 months
Gross-ups Full gross-up of excise tax Conditional gross-up of
excise tax
1 The cash severance payment will be equal to the sum of the applicable percentage of annual base salary
and the greater of the average of the participant’s annual incentive award for the three years immediately preceding
the participant’s employment termination date, or the participant’s target annual incentive award for the year the
participant’s employment with the Company terminates.