Progress Energy 2008 Annual Report Download - page 201

Progress Energy Proxy Statement
65
4 Unvested performance shares would be forfeited under voluntary termination, involuntary not for cause
termination, or for cause termination. Mr. Lyash 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. Lyash 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. Lyash would immediately vest 13,727 restricted stock
units granted on March 20, 2007, and would forfeit 4,790 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. Lyash 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. Lyash’s restricted stock
grant dates are beyond the one-year threshold; therefore, all 7,300 restricted stock shares would vest immediately.
7 No accelerated vesting or incremental nonqualified pension benefit applies under any of these scenarios.
Mr. Lyash 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. Lyash is not eligible for early retirement or normal
retirement. Unvested MICP deferral premiums would be forfeited. Mr. Lyash 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. Lyash is not eligible for early retirement or normal retirement. Under involuntary not for cause termination,
Mr. Lyash 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. Lyash 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. Lyash 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. There is no provision
for early retirement under the Split-Dollar program, and Mr. Lyash 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. Lyash 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. Lyash. Under IRC Section 280G, Mr. Lyash
would be subject to excise tax on $2,885,621 of excess parachute payments above his base amount. Those excess parachute
payments result in $577,124 of excise taxes, $965,267 of tax gross-ups, and $22,365 of employer Medicare tax related to
the excise tax payment.