Progress Energy 2008 Annual Report Download - page 199

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. McArthur 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. McArthur 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. McArthur would immediately vest 13,432 restricted
stock units granted on March 20, 2007, and would forfeit 4,491 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. McArthur 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. McArthur’s restricted
stock grant dates are beyond the one-year threshold; therefore, all 9,167 restricted stock shares would vest immediately.
7 Mr. McArthur was not vested under the SERP as of December 31, 2008, so this is the incremental value
due to accelerated vesting under involuntary or good reason termination (CIC). No accelerated vesting or incremental
nonqualified pension benefit applies under any other scenario above.
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. McArthur is not eligible for early
retirement or normal retirement. Unvested MICP deferral premiums would be forfeited. Mr. McArthur 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. McArthur is not eligible for early retirement or normal retirement. Under involuntary not for cause
termination, Mr. McArthur would be reimbursed for 18 months of COBRA premiums at $1,249.64 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. McArthur was
participating in prior to termination for 36 months at $1,225.14 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. McArthur 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 2008 projected cash surrender value per the original policy illustration with a minimum of $5,000. There is no
provision for early retirement under the Split-Dollar program, and Mr. McArthur 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 three
years. In the event of death, proceeds of the Policy would be payable as of the last policy anniversary date.
11 Mr. McArthur 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. McArthur. Under IRC Section 280G,
Mr. McArthur would be subject to excise tax on $3,988,664 of excess parachute payments above his base amount. Those
excess parachute payments result in $797,733 of excise taxes, $1,334,245 of tax gross-ups, and $30,914 of employer
Medicare tax related to the excise tax payment.