Progress Energy 2008 Annual Report Download - page 203

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. Yates 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. Yates 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. Yates 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. Yates 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. Yates’s restricted stock grant dates are beyond the one-year threshold; therefore,
all 8,500 restricted stock shares would vest immediately.
7 No accelerated vesting or incremental nonqualified pension benefit applies under any of these scenarios. Mr. Yates
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. Yates is not eligible for early retirement or normal retirement. Unvested
MICP deferral premiums would be forfeited. Mr. Yates 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. Yates is not eligible for early retirement or normal retirement. Under involuntary not for cause termination, Mr. Yates
would be reimbursed for 18 months of COBRA premiums at $1,274.20 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. Yates was participating in prior to termination for 36 months at $1,249.22
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. Yates 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. Yates 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. Yates 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. Yates. Under IRC Section 280G, Mr. Yates would be
subject to excise tax on $2,883,233 of excess parachute payments above his base amount. Those excess parachute payments result
in $576,647 of excise taxes, $964,468 of tax gross-ups, and $22,346 of employer Medicare tax related to the excise tax payment.