Progress Energy 2009 Annual Report Download - page 200

PROXY STATEMENT
62
3 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, 2009, the performance factor is 100%. In the event
of death or disability, the 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 and 2009 performance grants, a pro-rata payment would be made based upon
time in the plan.
4 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; 2,272 restricted stock units granted on March 18, 2008; and would forfeit 8,404 restricted stock
units granted on March 17, 2009.
5 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 5,834 restricted stock shares would vest immediately.
6 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, 2009, so there is no incremental value due to accelerated vesting under
involuntary or good reason termination (CIC).
7 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.
8 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 $847.18 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
$830.57 per month.
9 Mr. Mulhern would be eligible to receive $500,000 proceeds from the executive AD&D policy.
10 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 $2,691,811 of excess parachute payments above his base amount. Those excess parachute payments result
in $538,362 of excise taxes, $900,436 of tax gross-ups, and $20,863 of employer Medicare tax related to the excise tax payment.