EXHIBIT A
TO
2007 EQUITY INCENTIVE PLAN

EXECUTIVE AND KEY MANAGER 2007 PERFORMANCE SHARE SUB-PLAN

This Executive and Key Manager 2007 Performance Share Sub-Plan (“Sub-Plan”) sets
forth rules and regulations adopted by the Committee for issuance of Performance
Share Awards under Section 10 of the 2007 Equity Incentive Plan (“Plan”). This
Sub-Plan shall apply to Awards granted effective on and after May 9, 2007. In
addition, the rules and regulations relating to the deferral of Awards set forth
in this Sub-Plan shall apply to any Awards which become vested on or after
January 1, 2005. Capitalized terms used in this Sub-Plan that are not defined
herein shall have the meaning given in the Plan. In the event of any conflict
between this Sub-Plan and the Plan, the terms and conditions of the Plan shall
control. No Award Agreement shall be required for participation in this
Sub-Plan.

Section 1. Definitions

When used in this Sub-Plan, the following terms shall have the meanings as set
forth below, and are in addition to the definitions set forth in the Plan.

1.1   “Account” means the account used to record and track the number of
Performance Shares granted to each Participant as provided in Section 2.4.

1.2   “Award” as used in this Sub-Plan means each aggregate award of Performance
Shares as provided in Section 2.2.

1.3   “Early Vesting Event” with respect to a Performance Award means the
Participant’s death, Retirement, or termination as a result of a Divestiture, or
any of the vesting events provided in Section 3.2 in connection with a Change in
Control.

1.4   “Performance Period” for purposes of this Sub-Plan means three consecutive
Years beginning with the Year in which an Award is granted.

1.5   “Performance Schedule” means Attachment 1 to this Sub-Plan, which sets
forth the Performance Measures applicable to this Sub-Plan.

1.6   “Performance Share” for purposes of this Sub-Plan means each unit of an
Award granted to a Participant, the value of which is equal to the value of
Company Stock as hereinafter provided.

1.7   “Prorated Total Shareholder Return” for purposes of this Sub-Plan means
the weighted average of the Total Shareholder Return over a Performance Period
calculated for the period between the first day of the Performance Period and
the date of the applicable Early Vesting Event (other than Retirement).

1.8   “Retire” or “Retirement” means Separation from Service on or after:

(a) becoming 65 years old with at least 5 years of service;

(b) becoming 55 years old with at least 15 years of service; or

(c) achieving at least 35 years of service, regardless of age.

1.9   “Salary” means the regular base rate of compensation payable by the
Company to a Participant on an annual basis. Salary does not include bonuses, if
any, or incentive compensation, if any. Such compensation shall not be reduced
by any deferrals made under any other plans or programs maintained by the
Company.

1.10   “Section 409A” means Section 409A of the Code, or any successor section
under the Code, as amended and as interpreted by final or proposed regulations
promulgated thereunder from time to time.

1.11   “Separation from Service” means the death, Retirement or other separation
from service with the Company as defined for purposes of Section 409A of the
Code.

1.12   “Total Shareholder Return” means the total percentage return realized by
the owner of a share of stock during a relevant Year or any part thereof. Total
Shareholder Return is equal to the appreciation or depreciation in value of the
stock (which is equal to the average closing value of the stock over the last
ten trading days of the relevant period minus the average closing value of the
stock over the last ten trading days of the preceding Year) plus the dividends
declared during the relevant period, divided by the average closing value of the
stock over the last ten trading days of the preceding Year. For purposes of this
Plan, Total Shareholder Return is calculated using (i) an adjusted end-of-period
stock price based on a constant price to earnings ratio, which is equal to the
average of the price to earnings ratio over the last ten trading days of the
Year preceding the Year in which a grant takes place; and (ii) an earnings
amount equal to the Company’s ongoing earnings (excluding non-core earnings) for
the Year preceding the Year in which a grant takes place.

1.13   “Year” means a calendar year.

    Section 2. Sub-Plan Participation and Awards

2.1 Participant Selection. Participants under this Sub-Plan shall be selected by
the Committee in its sole discretion as provided in Section 4.2 of the Plan.

2.2 Awards. The Compensation Committee may, in its sole discretion, grant Awards
to some or all of the Participants in the form of a specific number of
Performance Shares. Except as described below, the target and maximum value of
any Award granted to any Participant in any calendar Year will be based upon the
following:

          Participant   Target Award   Maximum Award
CEO*
  233% of Salary   291.25% of Salary
 
       
COO*
  184% of Salary   230% of Salary
 
       
CFO*
  133% of Salary   166.25% of Salary
 
       
Presidents*/Executive
VPs*
 
117% of Salary  
146.25% of Salary
 
       
Senior VPs*
  100% of Salary   125% of Salary
 
       
VP/Department Heads**
Level I
Level II
 
80% of Salary
67% of Salary  
100% of Salary
83.75% of Salary
 
       
Key Managers
  67% of Salary   83.75% of Salary
 
       

* Senior Management Committee level position

**Levels shall be determined in the sole discretion of the Committee

2.3 Award Valuation at Grant. In calculating the value of an Award for purposes
of Section 2.2, the value of each Performance Share shall be equal to the
closing price of a share of Stock on the last trading day of the Year before the
Performance Period begins. The Participant’s Salary shall be determined as of
the January 1 preceding the date the Award is granted, or such other time as is
determined in the discretion of the Committee. Each Award is deemed to be
granted on the day that it is approved by the Committee.

2.4 Accounting and Adjustment of Awards. The number of Performance Shares
awarded to a Participant shall be recorded in a separate Account for each
Participant. The number of Performance Shares recorded in a Participant’s
Account shall be adjusted to reflect any splits or other adjustments in the
Stock in accordance with Section 6.4 of the Plan. If any cash dividends are paid
on the Stock, the number of Performance Shares in each Participant’s Account
shall be increased by a number equal to (i) the dividend multiplied by the
number of Performance Shares in each Participant’s Account, divided by (ii) the
closing price of a share of Stock on the payment date of the dividend. No
adjustment shall be made to any outstanding Awards of a Retired Participant for
cash dividends paid on Stock during the Performance Period following the
Retirement of the Participant.

2.5 Performance Schedule and Calculation of Awards.

(a) The Committee shall, as soon as practicable after the end of the Performance
Period, but in no event later than April 15 of the first Year immediately
following expiration of the Performance Period, certify as to (i) the Company’s
average Total Shareholder Return over the Performance Period, and (ii) the
applicable percentage of the Performance Shares vesting in accordance with the
Performance Schedule contained in Attachment 1 hereto.

(b) Notwithstanding the Company’s average Total Shareholder Return over the
Performance Period, or the Prorated Total Shareholder Return, as the case may
be, the Committee may in its sole discretion, with respect to any or all
Participants, elect to vest fewer Performance Shares than indicated by the
Performance Schedule. This subsection 2.5(b) shall cease to apply upon the
occurrence of a Change in Control.

(c) Except with respect to the adjustments permitted by subsection (b) above,
the Performance Measures and the Performance Schedule will not change during any
Performance Period with regard to any Awards that have already been granted. The
Committee reserves the right to modify or adjust the Performance Measures and/or
the Performance Schedule in the Committee’s sole discretion with regard to
future grants.

(d) Except in the case of an Early Vesting Event, each Award shall become vested
on January 1 immediately following the end of the applicable Performance Period.
In no event shall such “normal” vesting date be construed to be earlier than
January 1 immediately following the end of the applicable Performance Period.

2.6 Payment of Awards. Except as provided in Section 3, Awards shall be paid
after expiration of the Performance Period. The Company will issue one share of
Stock in payment for each vested Performance Share (rounded to the nearest whole
Performance Share) credited to the Account of the Participant. Payment shall be
made as follows:

(a) Normal Payment. Unless deferred as provided below, 100% of the vested
Performance Shares for a Performance Period shall be converted to shares of
Stock no later than April 15 of the Year immediately following expiration of the
Performance Period and will be delivered to Participants as soon as practical
thereafter, in certificated or uncertificated form, as the Participant shall
direct.

(b) Deferred Payment. Any Participant who is employed as a Department Head or in
a higher position as of the beginning of a Performance Period may elect to defer
the conversion and payment of his or her Performance Shares for that Performance
Period by executing a deferral election substantially in the form attached
hereto as Attachment 2, and returning it to the Vice President, Human Resources
Department no later than the end of the first Year of the Performance Period.
Once made, this election shall be irrevocable except as may be permitted by
rules promulgated under Section 409A and allowed by the Committee.

2.7 Grantor Trust. In the case of a Change in Control, the Company shall,
subject to the restrictions in this Section 2.7 and Section 13.12 of the Plan,
irrevocably set aside shares of Stock or cash in one or more such grantor trusts
in an amount that is sufficient to pay each Participant employed by such Company
(or Designated Beneficiary), the net present value as of the date on which the
Change in Control occurs, of the earned benefits to which Participants (or their
Designated Beneficiaries) would be entitled pursuant to the terms of the Plan if
the value of their deferral account (if any) established pursuant to section
2.6(b) would be paid in a lump sum upon the Change in Control. Any such trust
shall be subject to the claims of the general creditors of the Sponsor or
Company in the event of bankruptcy or insolvency of the Sponsor or Company.
Notwithstanding the foregoing provisions of this Section 2.7, the Company shall
establish no such trust if the assets thereof shall be includable in the income
of Participants thereby pursuant to Section 409A(b).

Section 3. Early Vesting and Forfeiture

3.1 Retirement, Death or Divestiture. If the Participant Retires or dies prior
to expiration of the Performance Period, or terminates employment as the result
of a Divestiture during a Performance Period, any outstanding Awards of the
Participant for any unexpired Performance Period shall vest as of the date of
such Early Vesting Event. In the event of the death of the Participant (whether
before or after Retirement), or termination of employment as the result of a
Divestiture during a Performance Period, the Participant’s outstanding Awards
shall be calculated on the basis of the Prorated Total Shareholder Return. In
each such case, the early-vesting Awards shall be paid in accordance with
Section 3.3.

3.2 Change in Control. In the event of a Change in Control prior to the
expiration of the Performance Period, any outstanding Award of the Participant
for any unexpired Performance Period shall be treated as follows:

(a) Awards Assumed by Acquiror. If the Award is assumed by the successor to the
Sponsor as of the date of the Change in Control, each outstanding Award not
previously forfeited shall continue to vest and shall be paid pursuant to the
terms of this Sub-Plan; provided, however, that in the event the employment of
the Participant is terminated by the Company without Cause following the Change
in Control, any outstanding Award shall become vested as of the termination
date, and the aggregate value of the Award shall be paid in accordance with
Section 3.3.

(b) Awards Not Assumed by Acquiror. If the Award is not assumed by the successor
to the Sponsor as of the date of the Change in Control, any outstanding Award
shall become vested as of the date of the Change in Control, and the aggregate
value of the Award shall be paid in accordance with Section 3.3.

3.3 Payment of Awards Due to Early Vesting Event. Any Award that is vested prior
to the end of the Performance Period due to an Early Vesting Event shall be paid
as follows:

(a) Retirement. In the event of the Retirement of the Participant, the
Participant’s outstanding Awards shall be paid in accordance with Section 2.6
following the end of the Performance Period for the Award; provided, that if the
Participant has elected to defer payment until a specified date certain and
Retires before the date specified in the deferral election, the Company will
commence distribution of the Deferred Award as soon as practicable on or after
the later of: (i) the April 1 following the first anniversary of the date of
Retirement, or (ii) the April 1 of the year following the end of the Performance
Period, even though said date is earlier than the date specified in the deferral
election. If the Participant dies following Retirement but prior to the
expiration of the Performance Period, the Participant’s outstanding vested
Awards shall be paid to the Participant’s Designated Beneficiary within a
reasonable time after the Participant’s death.

(b) Death. In the event of the death of the Participant, payment shall be made
to the Participant’s Designated Beneficiary within a reasonable time after the
Participant’s death, notwithstanding any election to defer the payment of any
Award under Section 2.6(b).

(c) Divestiture. In the event of the termination of employment of the
Participant as a result of a Divestiture, payment shall be made within a
reasonable time after the date of termination, notwithstanding any election to
defer the payment of any Award under Section 2.6(b).

(d) Change in Control. If the Award vests pursuant to Section 3.2(b) or by
reason of a termination of employment without Cause following a Change in
Control pursuant to Section 3.2(a), the Award shall be paid within a reasonable
time after the date of vesting, notwithstanding any election to defer the
payment of any Award under Section 2.6(b).

(e) 409A Delay. Notwithstanding subsections (a), (c) or (d) above, if the
Participant 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 as key employees), then payment shall not be made
before the date that is six months after the date of Separation from Service
(or, if earlier, the date of death of the Participant) and the amount of any
payment made in cash (i.e., with respect to Awards granted prior to January 1,
2005) shall be based upon the value of the Performance Shares as determined by
reference to the closing price of the Stock on the trading day occurring on or
next following the date that is six months after the date of Separation from
Service of the Participant (or, if earlier the date of death of the
Participant).

3.4 Other Termination of Employment. In the event that a Participant’s
employment with the Company terminates for any reason other than as provided in
this Section 3, any Award made to the Participant that has not vested as
provided in Section 2 or Section 3 shall be forfeited.

Section 4. Payment of Taxes

The Company has the authority and the right to deduct or withhold, or require a
Participant to remit to the employer, an amount sufficient to satisfy federal,
state, and local taxes (including the Participant’s FICA obligation) required by
law to be withheld with respect to any taxable event arising as a result of the
vesting or settlement of the Performance Shares. The obligations of the Sponsor
under this Sub-Plan will be conditional on such payment or arrangements, and the
Sponsor, and, where applicable, its Affiliates will, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Participant. By participating in this Sub-Plan, each
Participant thereby authorizes the Company to instruct a third party broker or
plan administrator to sell Shares earned by the Participant upon settlement of
the Performance Shares in an amount sufficient to satisfy the amount required to
be withheld for tax purposes, and to remit the cash proceeds from such sale to
the Company.

Section 5. Non-Assignability of Awards

The Awards and any right to receive payment under the Plan and this Sub-Plan may
not be anticipated, alienated, pledged, encumbered, or subject to any charge or
legal process, and if any attempt is made to do so, or a Participant becomes
bankrupt, then in the sole discretion of the Committee, any Award made to the
Participant which has not vested as provided in Sections 2 and 3 shall be
forfeited.

Section 6. Amendment and Termination

This Sub-Plan shall be subject to amendment, suspension, or termination as
provided in the Plan. No action to amend, suspend or terminate this Sub-Plan
shall permit the acceleration of the time or schedule of the payment of any
Award granted under this Sub- Plan (except as provided in regulations under
Section 409A).

Section 7. Section 409A

This Sub-Plan shall be administered in compliance with Section 409A.

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IN WITNESS WHEREOF, this instrument has been executed this 10th day of July,
2007.

PROGRESS ENERGY, INC.

By: /s/ Robert B. McGehee
Robert B. McGehee
Chief Executive Officer

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ATTACHMENT 1

PERFORMANCE SCHEDULE

PERFORMANCE SHARE CALCULATION
for Post-2007 Performance Awards

                  Total Shareholder                
Return(1)(2) up>
  <     (3)
     %  
     (3)     %  
     (3)     %  
     (3)_% or >
 
               
% of Target Award
Earned(2)
 
0%  
50%  
100%  
200%
 
               

1 For purposes of Section 3 of the Sub-Plan, the Prorated Total Shareholder
Return shall be used.
2 Straight line interpolation between points
3 Total Shareholder Return performance metrics to be established by the
Committee on an annual basis

Committee Discretion. Unless a Change in Control shall have occurred, the
Committee retains the sole discretion to reduce the number of Performance Shares
earned, with respect to any or all Participants, if the formula would result in
payouts that the Committee deems to be disproportionate to Company performance
or other circumstances merit a reduction in the amounts earned.

Payment of Awards. The number of Performance Shares earned shall be paid in
accordance with the provisions of Section 2.6 or 3.3 of the Sub-Plan, as
appropriate.

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ATTACHMENT 2

PERFORMANCE SHARE SUB-PLAN
200_ DEFERRAL ELECTION FORM

As a Participant in the Performance Share Sub-Plan of the 2007 Equity Incentive
Plan (“Sub-Plan”), I hereby elect to defer payment of my Award otherwise payable
to me by the Company and attributable to services to be performed by me during
the Performance Period beginning on January      , 200     . This election shall
apply to [CHECK ONE]:

         
[ ]
[ ]
  100% of the Award
75% of the Award   [ ] 50% of the Award
[ ] 25% of the Award

Upon vesting, I understand that my Award shall continue to be recorded in my
Account as Performance Shares as described in the Sub-Plan and adjusted to
reflect the payment and reinvesting of the Company’s common stock dividends over
the deferral period, until paid in full.

I hereby elect to defer receipt (or commencement of receipt) of my Award until
the date specified below, or as soon as practical thereafter [CHECK ONE]:*

             
[ ]
  a specific date certain at least 5 years from expiration
of the Performance Period:  
4/1/  

 
           

(month/day/year)

[ ] the April 1 following the date of Retirement, or if later, the date which is
six months after the date of my Separation from Service for any reason
(including Retirement), if I am 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 as key employees).

[ ] the April 1 following the first anniversary of my date of Retirement

* Notwithstanding any election above, if I elect a date certain distribution and
I Retire before that date certain, I understand that the Company will commence
distribution of my Account as soon as practicable on or after the later of:
(i) the April 1 following the first anniversary of the date of Retirement, or
(ii) the April 1 of the year following the end of the Performance Period, even
though said date is earlier than 5 years from the expiration of the Performance
Period.

I hereby elect to be paid as described in the Sub-Plan in the form of [CHECK
ONE]:

[ ] a single payment

[ ] annual payments commencing on the date set forth above and payable on the
anniversary date thereof over:

[ ] a two year period [ ] a three year period
[ ] a four year period [ ] a five year period

I understand that I will receive “earnings” on those deferred amounts when they
are paid to me.

I understand that the election made as indicated herein is irrevocable and that
all deferral elections are subject to the provisions of the Sub-Plan, including
provisions that may affect timing of distributions.

I understand that this deferral election is subject to the requirements of
Section 409A of Code, and regulations and other guidance issued thereunder. The
Company makes no representation or guarantee that any tax treatment, including,
but not limited to, federal, state and local income, or estate and gift tax
treatment, will be applicable with respect to the amounts deferred. The Company
shall have no responsibility for the tax consequences that I may incur as a
result of Section 409A, regulations or guidance issued thereunder, or any other
provision of the Internal Revenue Code. I understand it is my responsibility to
consult a legal or tax advisor regarding the tax effects of this deferral
election. I further acknowledge and agree that the Company may (but shall not be
required to) modify this election as necessary to comply with Section 409A and
any guidance or regulations issued thereunder. I further agree to cooperate in
any manner necessary to ensure that this election is in compliance with
Section 409A and any guidance or regulations issued thereunder.

I understand and acknowledge that my interests herein and my rights to receive
distribution of the deferred amounts may not be anticipated, alienated, sold,
transferred, assigned, pledged, encumbered, or subjected to any charge or legal
process, and if any attempt is made to do so, or I become bankrupt, my interest
may be terminated by the Committee, in its sole discretion, may cause the same
to be held or applied for the benefit of one or more of my dependents or make
any other disposition of such interests that it deems appropriate. I further
understand that nothing in the Sub-Plan shall be interpreted or construed to
require the Company in any manner to fund any obligation to me, or to my
beneficiary(ies) in the event of my death.

          (Signature)   (Date) (Print Name)   (Company Location)

Received:
Agent of Chief Executive Officer

(Signature) (Date)

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