Progress Energy 2008 Annual Report Download - page 197

Progress Energy Proxy Statement
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4 Unvested performance shares would be forfeited under voluntary termination, involuntary not for cause
termination, or for cause termination. Mr. Mulhern is not eligible 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, 2008, the performance factor
is 100%. In the event of death or disability, the 2007 2-year transitional and 2007 performance shares would vest 100% and be
paid in an amount using performance factors determined at the time of the event. For the 2008 performance grant, a pro-rata
payment would be made based upon time in the plan.
5 Unvested restricted stock units (RSU) would be forfeited under voluntary termination, involuntary not for
cause termination, or for cause termination. Mr. Mulhern is not eligible for early retirement or normal retirement. In the event
of involuntary or good reason termination (CIC), all outstanding restricted stock units would vest immediately. For a detailed
description of outstanding restricted stock units, see the “Outstanding Equity Awards at Fiscal Year-End Table.” Upon death or
disability, all outstanding restricted stock units that are more than one year past their grant date would vest immediately. Shares
that are less than one year past their grant date would be forfeited. Mr. Mulhern would immediately vest 10,566 restricted stock
units granted on March 20, 2007, and would forfeit 3,407 restricted stock units granted on March 18, 2008.
6 Unvested restricted stock would be forfeited under voluntary termination, involuntary not for cause
termination, or for cause termination. Mr. Mulhern is not eligible for early retirement or normal retirement. In the event of
involuntary or good reason termination (CIC), all outstanding restricted stock shares would vest immediately. For a detailed
description of outstanding restricted stock shares, see the “Outstanding Equity Awards at Fiscal Year-End Table.” Upon death
or disability, all outstanding restricted stock shares that are more than one year past their grant date would vest immediately.
Shares that are less than one year past their grant date would be forfeited. All of Mr. Mulhern’s restricted stock grant dates are
beyond the one-year threshold; therefore, all 14,800 restricted stock shares would vest immediately.
7 No accelerated vesting or incremental nonqualified pension benefit applies under any of these scenarios.
Mr. Mulhern was vested under the SERP as of December 31, 2008, so there is no incremental value due to accelerated vesting
under involuntary or good reason termination (CIC).
8 All outstanding deferred compensation balances will be paid immediately following termination, subject to
IRC Section 409(a) regulations, under voluntary termination, involuntary not for cause termination, for cause termination,
involuntary or good reason termination (CIC), death and disability. Mr. Mulhern is not eligible for early retirement or normal
retirement. Unvested MICP deferral premiums would be forfeited. Mr. Mulhern would forfeit $0 of unvested deferred MICP
premiums.
9 No post-retirement health care benefits apply under voluntary termination, for cause termination, death or
disability. Mr. Mulhern is not eligible for early retirement or normal retirement. Under involuntary not for cause termination,
Mr. Mulhern would be reimbursed for 18 months of COBRA premiums at $900.29 per month as provided in his employment
agreement. In the event of involuntary or good reason termination (CIC), the Management Change-in-Control Plan provides
for Company-paid medical, dental and vision coverage in the same plan Mr. Mulhern was participating in prior to termination
for 24 months at $882.64 per month.
10 The Executive Permanent Split-Dollar Life Insurance program involves sharing of insurance costs and
benefits between the Company and the participant. The benefit sharing was scheduled to end at age 65. However, in 2008, the
Committee authorized the Chief Executive Officer to terminate the executive split-dollar program. The Plan was terminated
effective January 1, 2009. Mr. Mulhern surrendered his policy for cash value. Surrender proceeds were issued in January
2009 equal to the greater of the 2008 projected cash surrender value per the original policy illustration or actual cash value at
December 31, 2008, with a minimum of $5,000. At December 31, 2008, the program was still active and potential payments
would have been due under the following events: Under voluntary termination, involuntary not for cause termination, and for
cause termination, the policy would be split in proportion to cash value ownership. The amounts in these columns represent
the actual cash value at December 31, 2008. There is no provision for early retirement under the Split-Dollar program, and
Mr. Mulhern is not eligible for normal retirement. Under involuntary or good reason termination (CIC), this value represents
premiums that would be paid by the Company for two years. In the event of death, proceeds of the Policy would be payable as
of the last policy anniversary date.
11 Mr. Mulhern would be eligible to receive $500,000 proceeds from the executive AD&D policy.
12 Upon a change in control, the Management Change-in-Control Plan provides for the Company to pay
all excise taxes under IRC Section 280G plus applicable gross-up amounts for Mr. Mulhern. Under IRC Section 280G,
Mr. Mulhern would be subject to excise tax on $1,801,050 of excess parachute payments above his base amount. Those excess
parachute payments result in $360,210 of excise taxes, $602,468 of tax gross-ups, and $13,959 of employer Medicare tax
related to the excise tax payment.