AMENDED AND RESTATED
 
SUPPLEMENTAL SENIOR EXECUTIVE RETIREMENT PLAN
 
OF
 
PROGRESS ENERGY, 1NC.
 
Effective January 1, 1984
 
(As last amended effective January 1, 2009)

 

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TABLE OF CONTENTS
 
 
Page
 

ARTICLE I
                                                                                                                                   

STATEMENT OF PURPOSE
1
 
ARTICLE II
DEFINITIONS
2
 2.1
Terms
  2  2.2
Affiliated Company
  2  2.3 
Assumed Deferred Vested Pension Benefit
    2  2.4 
Assumed Early Retirement Pension Benefit
     2  2.5 
Assumed Normal Retirement Pension Benfit
3  2.6 
Board
3  2.7 
Change in Control
 3  2.8 
Committee
  5  2.9 
Company
  5  2.10 
Continuing Director
  5
 2.11 
Designated Beneficiary
  5  2.12 
Early Retirement Date
  6  2.13 
Eligible Spouse
6  2.14 
Final Average Salary
6  2.15 
Normal Retirement Date
  7  2.16 
Participant
  7  2.17 
Pension
  7  2.18 
Plan
7  2.19 
Salary 
    7  2.20 
Separation of Service
8  2.21 
Service
8  2.22
Social Security Benefit
8  2.23 
Spouse's Pension
9  2.24 
Target Early Retirement Benefit
  9  2.25 
Target Normal Retirement Benefit
  10  2.26
Target Pre-Retirement Death Benefit
    10  2.27 
Target Severance Benefit
10
 
ARTICLE III
ELIGIBILTY AND PARTICIPATION 11  3.1 
Eligibility
11  3.2 
Date of Participation
11  3.3 
Duration of Participation
11        
 
ARTICLE IV
RETIREMENT BENEFITS 11  4.1 
Normal Retirement Benefit
11
 4.2 
Early Retirement Benefit
13  4.3 
Surviving Spouse Benefit
15  4.4 
Re-employment of Retired Participant
15  
ARTICLE V
 
 
PRE-RETIREMENT DEATH BENEFITS 15  5.1 
Eligibility
15  5.2 
Amount
16  5.3 
Alternative Benefit
16  5.4
Commencement and Duration
16           ARTICLE VI SEVERANCE BENEFITS 16  6.1
Eligibility
16  6.2
Amount
16  6.3
Commencement and Duration
17  6.4
Surviving Spouse Benefit
18           ARTICLE VII ADMINISTRATION 19  7.1
Committee
19  7.2
Voting
19  7.3
Records
19
 7.4
Liability
19  7.5
Expenses
20 
   
ARTICLE VIII
AMENDEMENT AND TERMINATION
20
   
ARTICLE IX
MISCELLANEOUS
20
 9.1
Non-Alienation Benefits
  20 
 9.2
No Trust Created 
21
 9.3
No Employee Agreement 
21 
 9.4
Binding Effect 
21 
 9.5
Suicide 
22 
 9.6
Claims for Benefits 
22
 9.7
Entire Plan 
23 
 9.8
Change in Control 
23 
 9.9
Acceleration of Payment
23 
     
ARTICLE X
CONSTRUCTION
23 
 10.1
Governing Law 
23 
 10.2
Gender
23 
 10.3
Headings, etc. 
23 
 10.4
Action
24 

 

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ARTICLE I
 
 

 
 
STATEMENT OF PURPOSE
 
This Plan is designed and implemented for the purpose of enhancing the earnings
and growth of Progress Energy, Inc. (the "Sponsor") by providing to the limited
group of senior management employees largely responsible for such earnings and
long-term growth deferred compensation in the form of supplemental retirement
income benefits, thereby increasing the incentive of such key senior management
employees to make the Sponsor and its Affiliated Companies more profitable. The
benefits are normally payable to Participants upon retirement or death. The
terms of the benefits operate in conjunction with the Participant's benefits
payable under the Progress Energy Pension Plan and are designed to supplement
such pension plan benefits and provide the Participant with additional financial
security upon retirement or death.
 
The Plan is intended to constitute a nonqualified deferred compensation plan
that complies with the provisions of Section 409A of the Internal Revenue Code
of 1986, as amended (the "Code"). Accordingly, the Plan shall be construed in
accordance with Section 409A of the Code, regulations promulgated thereunder and
related guidance ("Section 409A"), notwithstanding any provision of the Plan to
the contrary. The Plan is further intended to be an unfunded retirement plan for
a select group of management or highly compensated employees within the meaning
of Title I of the Employee Retirement Income Security Act of 1974, as amended.
 
The Sponsor hereby restates and amends the Plan effective January 1, 2009.  The
terms of the amended and restated Plan shall govern the payment of any benefits
commencing on and after January 1, 2009.
 
 

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ARTICLE II
 
 

 
 
DEFINITIONS
 
2.1 Terms.  Unless otherwise clearly required by the context, the terms used
herein shall have the following meaning. Capitalized terms that are not defined
below shall have the meaning ascribed to them in the Retirement Plan.
 
2.2 Affiliated Company.  Shall mean any corporation or other entity that is
required to be aggregated with the Sponsor pursuant to Section 414(b), (c), (m),
or (o) of the Code, but only to the extent required.
 
2.3 Assumed Deferred Vested Pension Benefit.  Shall mean the monthly benefit of
the deferred vested Pension to commence on his Normal Retirement Date payable in
the form of an annuity to which a separated Participant would be entitled under
the Retirement Plan, calculated with the following assumptions based on such
Participant's marital status at the time benefits hereunder commence:
 
(a) In the case of a Participant with an Eligible Spouse, in the form of a 50%
Qualified Joint and Survivor Annuity as provided in the Retirement Plan.
(b) In the case of a Participant without an Eligible Spouse, in the form of a
Single Life Annuity as provided in the Retirement Plan.
(c) Without regard to any other benefit payment option under the Retirement
Plan.
 
2.4 Assumed Early Retirement Pension Benefit.  Shall mean the monthly benefit of
the normal retirement Pension payable in the form of an annuity to which a
Participant would be entitled under the Retirement Plan at his Normal Retirement
Date, based upon his projected years of Service at his Normal Retirement Date
and calculated with the following assumptions based upon his marital status at
the time benefits hereunder commence:
 
 
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(a) In the case of a Participant with an Eligible Spouse, in the form of a 50%
Qualified Joint and Survivor Annuity as provided in the Retirement Plan.
(b) In the case of a Participant without an Eligible Spouse, in the form of a
Single Life Annuity as provided in the Retirement Plan.
(c) Without regard to any other benefit payment option under the Retirement
Plan.
 
2.5 Assumed Normal Retirement Pension Benefit.  Shall mean the monthly benefit
of the normal retirement Pension payable in the form of an annuity to which a
Participant would be entitled under the Retirement Plan if he retired at his
Normal Retirement Date, calculated with the following assumptions based on his
marital status at the time benefits hereunder commence:
 
(a) In the case of a Participant with an Eligible Spouse, in the form of a 50%
Qualified Joint and Survivor Annuity as provided in the Retirement Plan.
(b) In the case of a Participant without an Eligible Spouse, in the form of a
Single Life Annuity as provided in the Retirement Plan.
(c) Without regard to any other benefit payment option under the Retirement
Plan.
 
2.6 Board.  Shall mean the Board of Directors of Sponsor.
 
2.7 Change in Control.  Shall occur on the earliest of the following dates:
 
(a) the date any person or group of persons (within the meaning of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934), excluding employee benefit
plans of the Sponsor, becomes, directly or indirectly, the "beneficial owner"
(as defined in Rule 13d-3 promulgated under the Securities Act of 1934) of
securities of the Sponsor representing twenty-five percent (25%) or more of the
combined voting power of the Sponsor's then outstanding
 
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securities (excluding the acquisition of securities of the Sponsor by an entity
at least eighty percent (80%) of the outstanding voting securities of which are,
directly or indirectly, beneficially owned by the Sponsor); or
(b) the date of consummation of a tender offer for the ownership of more than
fifty percent (50%) of the Sponsor's then outstanding voting securities; or
(c) the date of consummation of a merger, share exchange or consolidation of the
Sponsor with any other corporation or entity regardless of which entity is the
survivor, other than a merger, share exchange or consolidation which would
result in the voting securities of the Sponsor outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or being
converted into voting securities of the surviving or acquiring entity) more than
sixty percent (60%) of the combined voting power of the voting securities of the
Sponsor or such surviving or acquiring entity outstanding immediately after such
merger or consolidation; or
(d) the date, when as a result of a tender offer or exchange offer for the
purchase of securities of the Sponsor (other than such an offer by the Sponsor
for its own securities), or as a result of a proxy contest, merger, share
exchange, consolidation or sale of assets, or as a result of any combination of
the foregoing, individuals who are Continuing Directors cease for any reason to
constitute at least two-thirds (2/3) of the members of the Board; or
(e) the date the shareholders of the Sponsor approve a plan of complete
liquidation or winding-up of the Sponsor or an agreement for the sale or
disposition by the Sponsor of all or substantially all of the Sponsor's assets;
or the date of any event which the Board determines should constitute a Change
in Control.
 
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A Change in Control shall not be deemed to have occurred until a majority of the
members of the Board receive written certification from the Committee that such
event has occurred. Any determination that such an event has occurred shall, if
made in good faith on the basis of information available at that time, be
conclusive and binding on the Committee, the Sponsor, the Company, the
Participants and their beneficiaries for all purposes of the Plan,
 
2.8 Committee.  Shall mean the Committee on Organization and Compensation of the
Board.
 
2.9 Company.  Shall mean Progress Energy, Inc. or any successor to it in the
ownership of substantially all of its assets, and each Affiliated Company that,
with the consent of the Board adopts the Plan and is included in Appendix A, as
in effect from time to time. Appendix A shall set forth any limitations imposed
on employees of Affiliated Companies that adopt the Plan, including limitations
on "Service," notwithstanding any provision of the Plan to the contrary.
 
2.10 Continuing Director.  Shall mean the members of the Board as of January 1,
2009; provided, however, that any person becoming a Director subsequent to such
date whose election or nomination for election was supported by seventy-live
percent (75%) or more of the Directors who then comprised Continuing Directors
shall be considered to be a Continuing Director.
 
2.11 Designated Beneficiary.  Shall mean one or more beneficiaries as designated
by a Participant in writing delivered to the Committee. In the event no such
written designation is made by a Participant or if such beneficiary shall not be
living or in existence at the time for commencement of payment to any Designated
Beneficiary under the Plan, the Participant shall be deemed to have designated
his estate as such beneficiary.
 
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2.12 Early Retirement Date.  Shall mean the date on which a Participant who
qualifies for the early retirement benefit of Section 4.02 hereof retires from
the employ of the Company and its affiliated entities.
 
2.13 Eligible Spouse.  Shall mean the spouse of a Participant who, under the
laws of the State where the marriage was contracted, is deemed married to that
Participant on the date on which the payments from this Plan are to begin to the
Participant, except that for purposes of Articles V and VI hereof, Eligible
Spouse shall mean a person who is married to a Participant for a period of at
least one year prior to his death.
 
2.14 Final Average Salary.  Shall mean a Participant's average monthly Salary
(as defined in Section 2.20 hereof) during the 36 completed calendar months of
highest compensation within the 120-month period immediately preceding the
earliest to occur of the Participant's death, Separation from Service, Early
Retirement Date, or Normal Retirement Date, whichever is applicable. Provided,
however, if a Participant becomes entitled to a benefit hereunder while under a
period of long-term disability under the Sponsor's Group Insurance Plan, Final
Average Salary shall be determined for the 12 calendar months immediately
preceding the commencement of such period of long-term disability. Provided,
further, in determining average monthly Salary (i) annual incentives and other
similar payments shall be deemed received in twelve (12) equal payments
beginning with the eleventh preceding month and ending with the month in which
actual payment is made, and (ii) amounts of compensation deferred under any
deferred compensation plan or arrangement shall be deemed received in the months
such payments would have been received assuming no deferral had occurred. For
years of Service granted under the terms of a written employment agreement as
provided under Section
 
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2.22, Salary during each such month is deemed to be zero dollars ($0.00) for
purposes of calculating Final Average Salary.
 
2.15 Normal Retirement Date.  Shall mean the first day of the calendar month
coinciding with or next following the Participant's 65th birthday.
 
2.16 Participant.  Shall mean an employee of the Company who is eligible and is
participating in this Plan in accordance with Article III hereof.
 
2.17 Pension.  Shall mean a level monthly annuity which is payable under the
Retirement Plan as of the Benefit Commencement Date if the Participant elected
an annuity form of benefit.
 
2.18 Plan.  Shall mean the "Supplemental Senior Executive Retirement Plan of
Progress Energy, Inc." as contained herein and as it may be amended from time to
time hereafter. 2.19 Retirement Plan. Shall mean the "Progress Energy Pension
Plan" (as amended effective January 1, 2002) as it may be amended from time to
time thereafter.
 
2.19 Salary.  Shall mean the sum of:
(1) The annual base compensation paid by the Company to a Participant, and
(2) annual cash awards made under incentive compensation programs excluding,
however, any payment made under the Sponsor's Long-Term Compensation Program or
the Sponsor's Equity Incentive Plans, and
(3) amounts of annual compensation deferred under any deferred compensation plan
or arrangement (including, without limitation, the "Executive Deferred
Compensation Plan," the "Deferred Compensation Plan for Key Management Employees
of Progress Energy, Inc.," the "Progress Energy, Inc. Management Deferred
 
 
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Compensation Plan" and the "Progress Energy 401(k) Savings and Stock Ownership
Plan") and which, but for the deferral, would have been reflected in Internal
Revenue Service Form W-2.
 
2.20 Separation from Service.  Shall mean the date the Participant leaves the
employ of the Company and all affiliated entities other than on account of his
death, a period of long-term disability under the Company's long-term disability
plan, or retirement at either his Early Retirement Date or upon or after his
Normal Retirement Date. Separation from Service under this Section 2.21 must
also be "separation from service," as defined for purposes of Section 409A.
 
2.21 Service.  Shall have the same meaning as "Eligibility Service," determined
as provided in Sections 2.02 and 3.01 of the Retirement Plan, plus any
additional years of service that may be granted to the Participant in connection
with this Plan under the terms of a written employment agreement (or any
amendment thereto) entered into between the Company and the Participant.
 
2.22 Social Security Benefit.  Means the monthly amount of benefit which a
Participant is or would be entitled to receive at age 65 as a primary insurance
amount under the federal Social Security Act, as amended, whether or not he
applies for such benefit, and even though he may lose part or all of such
benefit through delay in applying for it, by making application prior to age 65
for a reduced benefit, by entering into covered employment, or for any other
reason. The amount of such Social Security Benefit to which the Participant is
or would be entitled shall be estimated by the Committee for the purposes of
this Plan as of the January 1 of the year in which his Separation from Service
or retirement occurs on the following basis:
 
 
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(a) For a Participant entitled to a normal retirement benefit, on the basis of
the federal Social Security Act as in effect on the January 1 coincident with or
next preceding his Normal Retirement Date (regardless of any retroactive changes
made by legislation enacted after said January 1);
(b) For a Participant entitled to an early retirement benefit, on the basis of
the federal Social Security Act as in effect on the January 1 coincident with or
next preceding his Early Retirement Date (regardless of any retroactive change
made by legislation enacted after said January 1), assuming that his employment,
and Salary in effect at his Early Retirement Date, continued to age 65; or
(c) For a Participant entitled to a severance benefit, on the basis of the
federal Social Security Act as in effect on the January 1 coincident with or
next preceding his Separation from Service (regardless of any retroactive change
made by legislation enacted after said January 1), assuming that his employment,
and Salary in effect at his Separation from Service, continued to age 65.
 
For purposes of the calculations required under paragraphs (a) and (b) above, if
a Participant is disabled under a period of long-term disability under the
Company's Group Insurance Plan, said Social Security Benefit shall be calculated
as if his Salary in effect at the commencement of such period of long-term
disability continued to age 65.
 
2.23 Spouse's Pension.  Shall mean the actual monthly benefit payable to an
Eligible Spouse under the Retirement Plan, assuming the Eligible Spouse elected
a 50% Joint and Survivor Annuity form of benefit.
 
2.24 Target Early Retirement Benefit.  Shall mean an amount equal to a
Participant's Final Average Salary determined at his Early Retirement Date
multiplied by two and one-quarter
 
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percent (2.25%) for each projected year of Service at his Normal Retirement Date
up to a maximum of sixty-two percent (62%).  Notwithstanding the foregoing, with
respect to a Participant who first entered the Plan as a Participant prior to
January 1, 2009, the Target Early Retirement Benefit shall be determined by
multiplying the Participant's Final Average Salary by four percent (4%) for each
projected year of Service at his Normal Retirement Date up to a maximum of
sixty-two percent (62%).
 
2.25 Target Normal Retirement Benefit.  Shall mean an amount equal to a
Participant's Final Average Salary determined at his Normal Retirement Date
multiplied by two and one-quarter percent (2.25%) for each projected year of
Service at his Normal Retirement Date up to a maximum of sixty-two percent
(62%).  Notwithstanding the foregoing, with respect to a Participant who first
entered the Plan as a Participant prior to January 1, 2009, the Target Normal
Retirement Benefit shall be determined by multiplying the Participant's Final
Average Salary by four percent (4%) for each projected year of Service at his
Normal Retirement Date up to a maximum of sixty-two percent (62%).
 
2.26 Target Pre-Retirement Death Benefit.  Shall mean an amount equal to a
deceased Participant's Final Average Salary determined at his death multiplied
by two and one-quarter percent (2.25%) for each year of Service at his death up
to a maximum of sixty-two percent (62%).  Notwithstanding the foregoing, with
respect to a Participant who first entered the Plan as a Participant prior to
January 1, 2009, the Target Pre-Retirement Death Benefit shall be determined by
multiplying the Participant's Final Average Salary by four percent (4%) for each
year of Service at his death up to a maximum of sixty-two percent (62%).
 
2.27 Target Severance Benefit.  Shall mean an amount equal to a Participant's
Final Average Salary determined at his Separation from Service multiplied by two
and one-quarter
 
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percent (2.25%) for each year of Service at his Separation from Service up to a
maximum of sixty-two percent (62%).  Notwithstanding the foregoing, with respect
to a Participant who first entered the Plan as a Participant prior to January 1,
2009, the Target Severance Benefit shall be determined by multiplying the
Participant's Final Average Salary by four percent (4%) for each year of Service
at his Separation from Service up to a maximum of sixty-two percent (62%).
 
ARTICLE III
 
 

 
 
ELIGIBILITY AND PARTICIPATION
 
3.1 Eligibility.  Any executive employee of a Company who has served on the
Senior Management Committee of the Sponsor and who has been a Senior Vice
President or above for a minimum period of three (3) years and who has at least
ten (10) years of Service shall be eligible to participate in this Plan.
 
3.2 Date of Participation.  Each executive who is eligible to become a
Participant under Section 3.01 shall become a Participant on the first day of
the month following the month in which he is first eligible to participate.
 
3.3 Duration of Participation.  Each executive who becomes a Participant shall
continue to be a Participant until the termination of his employment with the
Company or, if later, the date he is no longer entitled to benefits under this
Plan.
 
ARTICLE IV
 
 

 
 
RETIREMENT BENEFITS
 
4.1 Normal Retirement Benefit.
(a) Eligibility.  A Participant whose employment with the Company or any
Affiliated Company terminates on or after his Normal Retirement Date and whose
termination is
 
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"separation from service," as defined for purposes of Section 409A, shall be
eligible for the normal retirement benefit described in this Section 4.01.
(b) Amount and Form.  The monthly payment hereunder shall be in the form of a
Single Life Annuity if the Participant has no Eligible Spouse and in the form of
a 50% Qualified Joint and Survivor Annuity if the Participant has an Eligible
Spouse. The eligible Participant's normal retirement benefit shall be a monthly
amount equal to his Target Normal Retirement Benefit reduced by the sum of (1)
his Assumed Normal Retirement Pension Benefit and (2) his Social Security
Benefit.
(c) Commencement and Duration.  Monthly normal retirement benefit payments shall
commence within sixty days of the first day of the calendar month next following
the retirement of the Participant, and shall continue in monthly installments
thereafter ending with a payment for the month in which such eligible
Participant's death occurs, unless the benefit is being paid in the form of a
Qualified Joint and Survivor Annuity. in which case the survivor benefit shall
be paid to the Eligible Spouse, if living, for his or her life. If at the time
of commencement of payment such eligible Participant does not have an Eligible
Spouse the monthly benefit payments shall be guaranteed for one hundred twenty
(120) monthly payments with any such guaranteed payments remaining at such
Participant's death payable to his Designated Beneficiary.
(d) Key Employees.  Notwithstanding the foregoing, payments with respect to a
Participant who is a key employee (as defined in Section 4I6(i) of the Code but
determined without regard to paragraph 5 thereof or the 50 employee limit on the
number of officers treated as key employees) shall not begin earlier than the
date that is six months after the date of termination of the Participant (or, if
earlier, the date of death). In the event payments to the
 
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Participant under this Plan shall be delayed for six months following the
termination of the Participant as provided in this paragraph (d), the
Participant (if then living) shall receive a lump sum payment as of the first
day of the seventh month following the termination of employment in an amount
equal to six times the monthly payment due to the Participant under this Plan,
plus the monthly payment then due to the Participant. If the Participant dies
following termination of employment but prior to the commencement of payments
under this paragraph (d), the Participant's surviving Eligible Spouse, if any,
or Designated Beneficiary shall be entitled to receive the same death benefit
payable in the event the Participant had commenced receiving benefit payments as
of the first day of the month prior to his death.
 
4.2 Early Retirement Benefit.
(a) Eligibility.  A Participant whose employment with the Company or any
Affiliated Company terminates upon or after his attainment of age fifty-five
(55) with at least fifteen (15) years of Service (except for purposes of
calculating benefits payable under Article V and Article VI herein below, as
applicable) but prior to his Normal Retirement Date, shall be eligible for the
early retirement benefit described in this Section 4.02, provided that such
termination of employment is "separation from service," as defined for purposes
of Section 409A.
(b) Amount and Form.  The monthly payment hereunder shall be in the form of a
Single Life Annuity if the Participant has no Eligible Spouse and in the form of
a 50% Qualified Joint and Survivor Annuity if the Participant has an Eligible
Spouse. The eligible Participant's early retirement benefit shall he a monthly
amount equal to his Target Early Retirement Benefit reduced by the sum of (1)
his Assumed Early Retirement Pension Benefit and
 
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(2) his Social Security Benefit; provided, however, such benefit will be
reduced, where applicable, by the following:
(i) The amount of 2.5% for each year that such benefit is received prior to his
Normal Retirement Date, and
(ii) If such eligible Participant's projected years of Service at his Normal
Retirement Date are less than fifteen (15), his Target Early Retirement Benefit
and his Assumed Early Retirement Pension Benefit shall be calculated based upon
his actual years of Service at his Early Retirement Date rather than upon his
projected years of Service at his Normal Retirement Date.
(c) Commencement and Duration. Monthly early retirement benefit payments shall
commence within sixty days of the first day of the calendar month next following
the retirement of the Participant, and shall continue in monthly installments
thereafter ending with a payment for the month in which such eligible
Participant's death occurs, unless the benefit is being paid in the form of a
Qualified Joint and Survivor Annuity, in which case the survivor benefit shall
be paid to the Eligible Spouse, if living, for his or her life. If at the time
of commencement of payment such eligible Participant does not have an Eligible
Spouse, the monthly benefit payments shall be guaranteed for one hundred twenty
(120) monthly payments with any such guaranteed payments remaining at such
Participant's death payable to his Designated Beneficiary.
(d) Key Employees. Notwithstanding the foregoing, payments with respect to a
Participant who is a key employee (as defined in Section 416(i) of the Code but
determined without regard to paragraph 5 thereof or the 50 employee limit on the
number of officers treated
 
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as key employees) shall not begin earlier than the date that is six months after
the date of termination of the Participant (or, if earlier, the date of death).
In the event payments to the Participant under this Plan shall be delayed for
six months following the termination of the Participant as provided in this
paragraph (d), the Participant (if then living) shall receive a lump sum payment
as of the first day of the seventh month following the termination of employment
in an amount equal to six times the monthly payment due to the Participant under
this Plan, plus the monthly payment then due to the Participant. If the
Participant dies following termination of employment but prior to the
commencement of payments under this paragraph (d), the Participant's surviving
Eligible Spouse, if any, or Designated Beneficiary shall be entitled to receive
the same death benefit payable in the event the Participant had commenced
receiving benefit payments as of the first day of the month prior to his death.
 
4.3 Surviving Spouse Benefit.  The surviving Eligible Spouse of a Participant
who is entitled to receive a Qualified Joint and Survivor Benefit as a normal
retirement benefit or as an early retirement benefit shall be eligible for the
surviving spouse benefit upon the death of the Participant for the duration of
the Eligible Spouse's life.
 
4.4 Re-employment of Retired Participant.  A retired Participant receiving or
eligible to receive the retirement benefits described in Sections 4.01 and 4.02
hereof' who is reemployed by the Company shall be ineligible to again
participate in this Plan.
 
ARTICLE V
 
 

 
 
PRE-RETIREMENT DEATH BENEFITS
 
5.1 Eligibility.  A Participant's surviving Eligible Spouse shall be eligible
for the pre-retirement death benefit as described in this Article V if such
Participant dies while in the employ of the Company with 10 or more years of
Service.
 
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5.2 Amount.  Such surviving Eligible Spouse shall be entitled to a monthly
pre-retirement death benefit payable in the form of an annuity in an amount
equal to the difference, if any, between (a) forty percent (40%) of the Target
Pre-Retirement Death Benefit and (b) the Spouse's Pension.
 
5.3 Alternative Benefit.  If greater than the monthly benefit of Section 5.02
hereof, the surviving Eligible Spouse of a Participant who dies while in the
employ of the Company after attaining age fifty-five (55) with fifteen (15)
years of Service shall be entitled to a monthly pre-retirement death benefit
equal to fifty percent (50%) of the early retirement benefit the Participant
would have been entitled to receive under Section 4.02 hereof (calculated using
both reductions, where applicable, in subsections 4.02(b)(i) and 4.02(b)(ii)) as
if he had retired immediately prior to his death with the recommendation of the
Chief Executive Officer and approval of the Committee.
 
5.4 Commencement and Duration.  The surviving Eligible Spouse's monthly
pre-retirement death benefit payments shall commence in the month following the
Participant's death and shall be paid in monthly installments thereafter ending
with a payment for the month in which such surviving Eligible Spouse's death
occurs.
 
ARTICLE VI
 
 

 
 
SEVERANCE BENEFITS
 
6.1 Eligibility.  Upon his Separation from Service from the Company or any
Affiliated Company, a Participant who has completed ten (10) or more years of
Service but is not eligible for a retirement benefit under Article IV shall be
eligible for one of the severance benefits described in this Article VI.
 
6.2 Amount.
 
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(a) If at Separation from Service such eligible Participant is not entitled to a
deferred vested Pension pursuant to Section 5.03 of the Retirement Plan or an
early retirement Pension pursuant to Section 5.02 of the Retirement Plan, his
severance benefit shall be a monthly amount equal to his Target Severance
Benefit reduced by his Social Security Benefit.
(b) If at Separation from Service such eligible Participant is entitled to a
deferred vested Pension pursuant to Section 5.03 of the Retirement Plan, his
severance benefit shall be a monthly amount equal to his Target Severance
Benefit reduced by the sum of (1) his Assumed Deferred Vested Pension Benefit
and (2) his Social Security Benefit.
(c) If at his Separation from Service such eligible Participant is entitled to
an early retirement Pension pursuant to Section 5.02 of the Retirement Plan, his
severance benefit shall be a monthly amount equal to his Target Severance
Benefit reduced by the sum of (1) his Assumed Early Retirement Pension Benefit
and (2) his Social Security Benefit; provided, however, such Assumed Early
Retirement Pension Benefit shall be calculated based upon his actual years of
Service at his Separation from Service rather than upon his projected years of
Service at his Normal Retirement Date.

6.3 Commencement and Duration.
(a) General.  Monthly severance benefit payments shall commence as of the
eligible Participant's Normal Retirement Date and shall continue in monthly
installments thereafter ending with a payment for the month in which such
eligible Participant's death occurs.
(b) Key Employees.  Notwithstanding the foregoing, payments with respect to a
Participant who is a key employee (as defined in Section 416(i) of the Code but
determined without regard to paragraph 5 thereof or the 50 employee limit on the
number of officers treated
 
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as key employees) shall not begin earlier than the date that is six months after
the date of termination of the Participant (or, if earlier, the date of death).
In the event payments to the Participant under this Plan shall be delayed for
six months following the termination of the Participant as provided in this
paragraph (b), the Participant (if then living) shall receive a lump sum payment
as of the first day of the seventh month following the termination of employment
in an amount equal to six times the monthly payment due to the Participant under
this Plan, in addition to the monthly payment then due to the Participant. If
the Participant dies following termination of employment but prior to the
commencement of payments under this paragraph (b), the Participant's surviving
Eligible Spouse, if any, shall be eligible for the surviving spouse benefit
provided in Section 6.04.
 
6.4 Surviving Spouse Benefit.
(a) Eligibility.  The surviving Eligible Spouse of a Participant who is
receiving or who dies after attaining age fifty-five (55) entitled to receive a
severance benefit hereunder shall be eligible for the surviving spouse benefit
described in this Section 6.04.
(b) Benefit Amount.  Such surviving Eligible Spouse shall be entitled to a
monthly surviving spouse benefit in an amount equal to fifty percent (50%) of
the severance benefit which the deceased Participant was receiving or entitled
to receive at his Normal Retirement Date under either Section 6.02(a) or 6.02(b)
hereof on the day before his death.
(c) Commencement and Duration.  The monthly surviving spouse benefit payment
shall commence in the month following the Participant's death and shall be paid
in monthly installments thereafter ending with a payment for the month in which
such surviving Eligible Spouse's death occurs.
 
 
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ARTICLE VII
 
 

 
 
ADMINISTRATION
 
7.1 Committee.  This Plan shall be administered by the Committee. The Committee
shall have all powers necessary to enable it to carry out its duties in the
administration of the Plan. Not in limitation, but in application of the
foregoing, the Committee shall have the duty and power to determine all
questions that may arise hereunder as to the status and rights of Participants
in the Plan.
 
7.2 Voting.  The Committee shall act by a majority of the number then
constituting the Committee, and such action may be taken either by vote at a
meeting or in writing, without a meeting.
 
7.3 Records.  The Committee shall keep a complete record of all its proceedings
and all data relating to the administration of the Plan. The Committee shall
select one of its members as a Chairman. The Committee shall appoint a Secretary
to keep minutes of its meetings and the Secretary may or may not be a member of
the Committee. The Committee shall make such rules and regulations for the
conduct of its business as it shall deem advisable.
 
7.4 Liability.  To the extent permitted by law, no member of the Committee shall
be liable to any person for any action taken or omitted in connection with the
interpretation and administration of this Plan unless attributable to his own
gross negligence or willful misconduct. The Sponsor shall indemnify the members
of the Committee against any and all claims, losses, damages, expenses,
including counsel fees, incurred by them., and any liability, including any
amounts paid in settlement with their approval, arising from their action or
failure to act, except when the same is judicially determined to be attributable
to their gross negligence or willful misconduct.
 
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7.5 Expenses.  The cost of payments from this Plan and the expenses of
administering the Plan shall borne by each Company with respect to its own
employees.
 
ARTICLE VIII
 
 

 
 
AMENDMENT AND TERMINATION
 
The Sponsor reserves the right, at any time or from time to time, by action of
its Board, to modify or amend in whole or in part any or all provisions of the
Plan. In addition, the Sponsor reserves the right by action of its Board to
terminate the Plan in whole or in part; provided, however, that no such
modification, amendment or termination shall in any way affect a Participant's
accrued benefit or the right to payment thereof under the provisions of the Plan
as in effect immediately prior to such amendment or termination. Notwithstanding
the foregoing, the Plan may be terminated and benefits distributed to
Participants within twelve months of a "change in control event" as defined for
purposes of Section 409A.
 
ARTICLE IX
 
 

 
 
MISCELLANEOUS
 
9.1 Non-Alienation of Benefits.  No right or benefit under the Plan shall be
subject to anticipation, alienation, sale, assignment, pledge, encumbrance, or
charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber,
or charge any right or benefit under the Plan shall be void. No right or benefit
hereunder shall in any manner be liable for or subject to the debts, contracts,
liabilities or torts of the person entitled to such benefits. If the Participant
or Eligible Spouse shall become bankrupt, or attempt to anticipate, alienate,
sell, assign, pledge, encumber, or charge any right hereunder, then such right
or benefit shall, in the discretion of the Committee, cease and terminate, and
in such event, the Committee may hold or apply the same
 
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or any part thereof for the benefit of the Participant or his spouse, children,
or other dependents, or any of them, in such manner and in such amounts and
proportions as the Committee may deem proper.
 
9.2 No Trust Created.  The obligations of the Sponsor and each Company to make
payments hereunder shall constitute a liability of the Sponsor and each Company,
as the case may be, to a Participant. Such payments shall be made from the
general funds of the Sponsor or a Company, and the Sponsor or a Company shall
not be required to establish or maintain any special or separate fund, or
purchase or acquire life insurance on a Participant's life, or otherwise to
segregate assets to assure that such payment shall be made, and neither a
Participant nor Eligible Spouse shall have any interest in any particular asset
of the Sponsor or a Company by reason of its obligations hereunder. Nothing
contained in the Plan shall create or be construed as creating a trust of any
kind or any other fiduciary relationship between the Sponsor, a Company and a
Participant or any other person.
 
9.3 No Employment Agreement.  Neither the execution of this Plan nor any action
taken by the Sponsor or a Company pursuant to this Plan shall be held or
construed to confer on a Participant any legal right to be continued as an
employee of the Sponsor or a Company in an executive position or in any other
capacity whatsoever. This Plan shall not be deemed to constitute a contract of
employment between the Sponsor or a Company and a Participant, nor shall any
provision herein restrict the right of any Participant to terminate his
employment with the Sponsor or a Company.
 
9.4 Binding Effect.  Obligations incurred by the Sponsor or a Company pursuant
to this Plan shall be binding upon and inure to the benefit of the Sponsor or a
Company, its successors and assigns, and the Participant or his Eligible Spouse.
 
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9.5 Suicide.  No benefit shall be payable under the Plan to a Participant or
Eligible Spouse where such Participant dies as a result of suicide within two
(2) years of his commencement of participation herein.
 
9.6 Claims for Benefits.  Each Participant or Eligible Spouse must claim any
benefit to which he is entitled under this Plan by a written notification to the
Committee. If a claim is denied, it must be denied within a reasonable period of
time, and be contained in a written notice stating the following:
(A) The specific reason for the denial.
(B) Specific reference to the Plan provision on which the denial is based.
(C) Description of additional information necessary for the claimant to present
his claim, if any, and an explanation of why such material is necessary.
(D) An explanation of the Plan's claims review procedure.
The claimant will have 60 days to request a review of the denial by the
Committee, which will provide a full and fair review. The request for review
must be in writing delivered to the Committee. The claimant may review pertinent
documents, and he may submit issues and comments in writing.
 
The decision by the Committee with respect to the review must be given within 60
days after receipt of the request, unless special circumstances require an
extension (such as for a hearing). In no event shall the decision be delayed
beyond 120 days after receipt of the request for review. The decision shall be
written in a manner calculated to be understood by the claimant, and it shall
include specific reasons and refer to specific Plan provisions as to its effect.
 
 
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9.7 Entire Plan.  This document and any amendments contain all the terms and
provisions of the Plan and shall constitute the entire Plan, any other alleged
terms or provisions being of no effect.
 
9.8 Change in Control.  In the event of a Change in Control, the Sponsor shall
irrevocably set aside funds in one or more grantor trusts in an amount that is
sufficient to pay each Participant (or Designated Beneficiary) the amount of
benefits accrued under the Plan as of the date of the Change in Control. Any
such trust shall be subject to the claims of the general creditors of the
Company in the event of the bankruptcy or insolvency of the Company.
 
9.9 Acceleration of Payment.  The acceleration of the time or schedule of any
payment due under the Plan is prohibited except as provided in regulations and
administrative guidance provided under Section 409A. It is not an acceleration
of the time or schedule of payment if the Company waives or accelerates the
vesting requirements applicable to a benefit under the Plan.
 
ARTICLE X
 
 

 
 
CONSTRUCTION
 
10.1 Governing Law.  This Plan shall be construed and governed in accordance
with the laws of the State of North Carolina to the extent not preempted by
Federal Law.
 
10.2 Gender.  The masculine gender, where appearing in the Plan, shall be deemed
to include the feminine gender, and the singular may include the plural, unless
the context clearly indicates to the contrary.
 
10.3 Headings, etc.  The cover page of this Plan, the Table of Contents and all
headings used in this Plan are for convenience of reference only and are not
part of the substance of this Plan.
 
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10.4 Action.  Any action under this Plan required or permitted by the Sponsor
shall be by action of its Board or its duly authorized designee.
 
IN WITNESS WHEREOF, this instrument has been executed this  ____  day of
___________, 2009.
PROGRESS ENERGY, INC.

By:                                                                           
William D. Johnson
Chief Executive Officer

 
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APPENDIX A
 
AFFILIATED COMPANIES
 
Progress Energy Florida, Inc. (non-bargaining employees) ("PEF"); provided that
for all purposes of the Plan, Service for an employee of PEF on December 31,
2001 (as defined in Section 2.21) shall include employment only with PEF (or
another adopting Company) on or after January 1, 2002; and further provided that
the accrued benefit calculated under Sections 2.03, 2.04 and 2.05 shall not
include the "Accrued Benefit" under Supplement B, Paragraph B-2(a) of the
Retirement Plan, attributable to the FPC Plan.
 
Progress Fuels Corporation (corporate employees) ("PFC"); provided that for all
purposes of the Plan, Service for an employee of PFC on December 31, 2001 (as
defined in Section 2.21) shall include employment only with PFC (or another
adopting Company) on or after January 1, 2002; and further provided that the
accrued benefit calculated under Sections 2.03, 2.04 and 2.05 shall not include
the "Accrued Benefit" under Supplement B, Paragraph B-2(a) of the Retirement
Plan, attributable to the FPC Plan.
 
Progress Energy Carolinas, Inc.
Progress Energy Service Company, LLC
Progress Energy Ventures, Inc.

 

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