Exhibit 10(iv)












                 AMENDED MANAGEMENT INCENTIVE COMPENSATION PLAN

                                       OF

                              PROGRESS ENERGY, INC.



















                           AS AMENDED JANUARY 1, 2003


<PAGE>



                                TABLE OF CONTENTS


                                                                            Page

ARTICLE I                PURPOSE...........................................   1

ARTICLE II               DEFINITIONS.......................................   1

ARTICLE III              ADMINISTRATION....................................   7

ARTICLE IV               PARTICIPATION.....................................   8

ARTICLE V                AWARDS............................................   8

ARTICLE VI               DISTRIBUTION AND DEFERRAL OF AWARDS...............  12

ARTICLE VII              TERMINATION OF EMPLOYMENT.........................  18

ARTICLE VIII             MISCELLANEOUS.....................................  18











<PAGE>

                                    ARTICLE I

                                     PURPOSE

     The purpose of the Management  Incentive  Compensation Plan (the "Plan") of
Progress Energy,  Inc. (the "Sponsor") is to promote the financial  interests of
the  Sponsor  and  its  Affiliated  Companies,  including  its  growth,  by  (i)
attracting and retaining executive officers and other management-level employees
who can have a significant positive impact on the success of the Sponsor and its
Affiliated Companies; (ii) motivating such personnel to help the Sponsor and its
Affiliated  Companies  achieve annual  incentive,  performance and safety goals;
(iii)  motivating  such personnel to improve their own as well as their business
unit/work  group's  performance  through the effective  implementation  of human
resource  strategic  initiatives;  and  (iv)  providing  annual  cash  incentive
compensation  opportunities  that are  competitive  with  those  of other  major
corporations.

     The Sponsor amends and restates the Plan effective January 1, 2003.


                                   ARTICLE II

                                   DEFINITIONS

     The following definitions are applicable to the Plan:

     1. "Award": The benefit payable to a Participant hereunder, consisting of a
Corporate Component and a Noncorporate Component.

     2. "Affiliated  Company":  Any corporation or other entity that is required
to be aggregated with the Sponsor pursuant to Sections 414(b),  (c), (m), or (o)
of the Internal  Revenue Code of 1986, as amended (the "Code"),  but only to the
extent required.

     3. "Board": The Board of Directors of the Sponsor.

<PAGE>

     4. "Cause": means:

          (a)  embezzlement  or  theft  from  the  Company,  or  other  acts  of
               dishonesty, disloyalty or otherwise injurious to the Company;

          (b)  disclosing  without  authorization  proprietary  or  confidential
               information of the Company;

          (c)  committing any act of negligence or malfeasance causing injury to
               the Company;

          (d)  conviction of a crime amounting to a felony under the laws of the
               United States or any of the several states;

          (e)  any violation of the Company's Code of Ethics; or

          (f)  unacceptable  job  performance  which has been  substantiated  in
               accordance  with  the  normal  practices  and  procedures  of the
               Company.

     5. "Change of Control": 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  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

                                       2
<PAGE>

          (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   Company  of  all  or
               substantially all of the Sponsor's assets; or

                                       3
<PAGE>

          (f)  the  date  of  any  event  which  the  Board  determines   should
               constitute a Change of Control.

          A Change of  Control  shall not be  deemed  to have  occurred  until a
majority  of the members of the Board  receive  written  certification  from the
Compensation  Committee  that one of the events set forth in this  Section 5 has
occurred.  Any  determination  that an event  described  in this  Section  5 has
occurred shall,  if made in good faith on the basis of information  available at
that time, be conclusive and binding on the Compensation Committee, the Sponsor,
each  Affiliated  Company,  the  Participant  and  their  Beneficiaries  for all
purposes of the Plan.

     6. "Company":  Progress Energy, Inc., a North Carolina corporation,  or any
successor  to it in the  ownership of  substantially  all of its assets and each
Affiliated Company that, with the consent of the Compensation Committee,  adopts
the Plan and is  included  in  Exhibit  B, as in effect  from  time to time.

     7. "Compensation Committee": The Organization and Compensation Committee of
the Board of Directors of the Sponsor.

     8.  "Continuing  Director":  The  members of the Board as of the  Effective
Date; provided,  however, that any person becoming a director subsequent to such
date whose  election or nomination  for election was  supported by  seventy-five
percent (75%) or more of the directors who then comprised  Continuing  Directors
shall be considered to be a Continuing Director.

     9. "Corporate Factor": The factor determined by the Compensation  Committee
to be utilized in  calculating  the Corporate  Component of an Award pursuant to
Article V, Section 3.a. hereof, which can range from 0 to 2.0.

     10. "Corporate Component":  That portion of an Award based upon the overall
performance of the Sponsor, as determined in Article V, Section 3.a. hereof.


                                       4
<PAGE>

     11. "Date of Retirement":  The first day of the calendar month  immediately
following the Participant's Retirement.

     12.   "Designated   Beneficiary":   The   beneficiary   designated  by  the
Participant,   pursuant  to  procedures   established  by  the  Human  Resources
Department  of the  Company,  to receive  amounts due to the  Participant  or to
exercise any rights of the Participant to the extent permitted  hereunder in the
event of the Participant's  death. If the Participant does not make an effective
designation,   then  the  Designated  Beneficiary  will  be  deemed  to  be  the
Participant's estate.

     13.  "EBITDA":  The  earnings  of  the  Sponsor  before  interest,   taxes,
depreciation,   and  amortization  as  determined  from  time  to  time  by  the
Compensation Committee.

     14.  "EBITDA  Growth":  The  percentage  increase (if any) in EBITDA of the
Sponsor for any Year, as compared to the previous  Year as determined  from time
to time by the Compensation Committee.

     15.  "Effective  Date": The Effective Date of this Plan, as amended,  is of
January 1, 2003.

     16. "Noncorporate Component": That portion of an Award based upon the level
of attainment of a Company,  business unit/group,  departmental,  and individual
Performance  Measures,  as provided in Article V, Section 3.b. hereof, which can
range from 0 to 2.0.

     17.  "Participant":  An employee of any Company who is selected pursuant to
Article IV hereof to be eligible to receive an Award under the Plan.

     18. "Peer Group":  The utilities  included in the Standard & Poor's Utility
(Electric Power Companies) Index.

                                       5
<PAGE>

     19.  "Performance  Measure":  A goal or goals established for measuring the
performance of a Company,  business unit/group,  department,  or individual used
for the  purpose  of  computing  the  Noncorporate  Component  of an Award for a
Participant.

     20.  "Performance  Unit":  A unit or  credit,  linked  to the  value of the
Sponsor's Common Stock under the terms set forth in Article VI hereof.

     21. "Plan": The Management Incentive  Compensation Plan of Progress Energy,
Inc. as contained herein, and as it may be amended from time to time.

     22. "Retirement":  A Participant's termination of employment with a Company
after  having met at least one of the  following  requirements:  at least age 65
with 5+ years of  service,  at least  age 55 with 15+ years of  service,  or 35+
years of service regardless of age.

     23.  "Salary":  The  compensation  paid by a Company to a Participant  in a
relevant Year,  consisting of regular or base  compensation,  such  compensation
being understood not to include bonuses, if any, or incentive  compensation,  if
any. Provided, that such compensation shall not be reduced by any cash deferrals
of said compensation  made under any other plans or programs  maintained by such
Company.

     24. "Section 16  Participants":  Those  Participants who are subject to the
provisions of Section 16 of the Securities Exchange Act of 1934, as amended (the
"1934 Act").  Individuals who are subject to Section 16 of the 1934 Act include,
without  limitation,  directors  and certain  officers of the  Sponsor,  and any
individual  who  beneficially  owns  more  than  ten  percent  of a class of the
Sponsor's equity securities registered under Section 12 of the 1934 Act.

     25. "Senior Management  Committee":  The Senior Management Committee of the
Company.

                                       6
<PAGE>

     26. "Target Award Opportunity":  The target for an Award under this Plan as
set forth in Section 2 of Article V hereof. 27. "Year": A calendar year.

                                   ARTICLE III

                                 ADMINISTRATION

     The Plan  shall be  administered  by the  Chief  Executive  Officer  of the
Sponsor. Except as otherwise provided herein, the Chief Executive Officer of the
Sponsor shall have sole and complete  authority to (i) select the  Participants;
(ii)  establish  and  adjust  (either  before or  during  the  relevant  Year) a
Participant's  Performance  Measures,  their relative percentage weight, and the
performance  criteria  necessary for attainment of various  performance  levels;
(iii) approve  Awards;  (iv)  establish  from time to time  regulations  for the
administration   of  the  Plan;   and  (v)  interpret  the  Plan  and  make  all
determinations deemed necessary or advisable for the administration of the Plan,
all  subject to its  express  provisions.  Notwithstanding  the  foregoing,  the
Compensation Committee shall (a) approve the performance criteria and Awards for
all  Participants  who are  members  of the  Senior  Management  Committee;  (b)
determine  the total  payout under the Plan up to a maximum of four percent (4%)
of the Sponsor's  after-tax  income for a relevant  Year; and (c) certify to the
Board that a Change of Control has  occurred as provided in Section 5 of Article
II.

     A majority of the Compensation Committee shall constitute a quorum, and the
acts of a majority  of the  members  present at any meeting at which a quorum is
present,  or acts  approved  in  writing  by a  majority  of the  members of the
Committee without a meeting, shall be the acts of such Committee.

                                       7
<PAGE>

                                   ARTICLE IV

                                  PARTICIPATION

     The Chief  Executive  Officer of the Sponsor shall select from time to time
the  Participants in the Plan for each Year from those employees of each Company
who, in his opinion, have the capacity for contributing in a substantial measure
to the successful performance of the Company that Year. No employee shall at any
time have a right to be selected as a Participant  in the Plan for any Year nor,
having  been  selected  as a  Participant  for one  Year,  have the  right to be
selected as a Participant in any other Year.

                                    ARTICLE V

                                     AWARDS

     1.  Eligibility.  In order for any Participant to be eligible to receive an
Award,  two conditions must be met. First, a contribution  must be earned by one
or more groups of employees  under the Employee Stock  Incentive Plan feature of
the Sponsor's  401(k) Savings & Stock Ownership Plan.  Second,  the Sponsor must
also meet  minimum  threshold  performance  levels for return on common  equity,
EBITDA Growth, and other measures for the relevant Year as may be established by
the Compensation  Committee.  Threshold  performance for return on common equity
and EBITDA Growth is the weighted average of a Peer Group of utilities, averaged
over the most recent three-year  period. To satisfy threshold  performance,  the
Sponsor  must be above the  three-year  average with respect to return on common
equity and EBITDA Growth.

     2. Target Award Opportunities.  The following table sets forth Target Award
Opportunities,  expressed  as a  percentage  of Salary,  for  various  levels of
participation in the Plan:

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-------------------------------------------------------------------------------
                         Participation             Target Award Opportunities
-------------------------------------------------------------------------------
Chief Executive Officer of Sponsor*                           85%
-------------------------------------------------------------------------------
Chief Operating Officer of Sponsor*                           70%
-------------------------------------------------------------------------------
Presidents*/Executive Vice Presidents*                        55%
-------------------------------------------------------------------------------
Senior Vice Presidents*                                       45%
-------------------------------------------------------------------------------
Department Heads                                              35%
-------------------------------------------------------------------------------
Other Participants:
         Key Managers                                         25%
         Other Managers                                       20%
-------------------------------------------------------------------------------
    *Senior Management Committee level positions.

The Target  Award  Opportunity  for the Chief  Executive  Officer of the Sponsor
shall  be 85%;  however,  the  Compensation  Committee  of the  Board  shall  be
authorized  to change that  amount  from year to year,  or to award an amount of
compensation based on other considerations, in its complete discretion.

     3.  Award  Components.  Awards  under  the Plan to which  Participants  are
eligible  consist  of  the  sum  of a  Corporate  Component  and a  Noncorporate
Component.  The portion of the Target Award  Opportunities  attributable  to the
Corporate Component and Noncorporate Component, respectively, for various levels
of participation, is set forth in the following table:

------------------------------------------------------------------------------
                        Participants            Corporate     Noncorporate
                                                Component      Component
------------------------------------------------------------------------------
Chief Executive Officer of Sponsor*               100%             -
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Chief Operating Officer of Sponsor*               100%             -
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Presidents*/Executive Vice Presidents*             75%            25%
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Senior Vice Presidents*                            75%            25%
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Department Heads                                   50%            50%
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Other Participants                                 50%            50%
------------------------------------------------------------------------------
    *Senior Management Committee level positions.

          a. Corporate  Component.  The Corporate Component of an Award is based
upon the overall  performance  of the Sponsor.  In the event the  conditions set
forth in Section 1 of Article V are met and the Compensation  Committee,  in its
discretion,  determines an appropriate  Corporate Factor,  that Corporate Factor
shall be multiplied by the portion of a Participant's  Target Award  Opportunity

                                       9
<PAGE>

attributable to the Corporate  Component in order to determine the percentage of
such Participant's  Salary which will comprise the Corporate Component of his or
her Award.  Notwithstanding the foregoing,  if the second condition set forth in
Section  1 of  Article  V is not  fully  met,  the  Compensation  Committee  may
nevertheless  in its discretion  determine an appropriate  Corporate  Factor and
grant a Corporate Component of an Award to the Participants.

          b. Noncorporate Component.  The Noncorporate Component of an Award for
a  Participant  is based  upon the  level of  attainment  of  Company,  business
unit/group,   departmental  and  individual  Performance  Measures.  Performance
Measures for each Participant and their relative weight are determined  pursuant
to authority granted in Article III hereof.

               (i)  Performance  Levels.  There are three levels of  performance
related to each of a Participant's  Performance Measures:  outstanding,  target,
and  threshold.   The  specific   performance  criteria  for  each  level  of  a
Participant's  Performance  Measures  shall be set forth in writing prior to the
beginning of an applicable  Year, or within thirty (30) days after a Participant
first  becomes  eligible to  participate  in the Plan,  and shall be  determined
pursuant to authority granted in Article III hereof.  The payout  percentages to
be applied to each Participant's Target Award Opportunity are as follows:

              Performance Level          Payout Percenge

                 Outstanding                  200%
                 Target                       100%
                 Threshold                     50%

Payout  percentages  shall be adjusted for  performance  between the  designated
performance levels,  provided,  however,  that performance which falls below the

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<PAGE>

"Threshold"  performance level results in a payout percentage of zero unless the
Chief Executive Officer of Sponsor directs otherwise.

                           (ii) Determination of Noncorporate Component. In
order to determine a
Participant's Noncorporate Component, if any, for a particular Year, the Chief
Executive Officer of Sponsor initially shall determine the appropriate payout
percentage for each of such Participant's Performance Measures. Thereafter, each
payout percentage is multiplied by the percentage weight assigned to each such
Performance Measure and the results added together. That aggregate amount is
multiplied by the Participant's Target Award Opportunity for the Noncorporate
Award Component for the respective Year and the result is multiplied by the
Participant's Salary.

               (iii) Change of Job Status. Participants who change organizations
during a Year will have their  Noncorporate  Component  prorated  based upon the
Performance Measures achieved in each organization and the length of time served
in each  organization.  In the  discretion  of the Chief  Executive  Officer  of
Sponsor, employees may become Participants during a Year based on promotions and
may  receive  an  Award  prorated  based on the  length  of time  served  in the
qualifying  job and the  Performance  Measures  achieved while in the qualifying
job.

     4. New Participants.  Any Award that is earned during the Year of selection
shall be pro rated based on the length of time served in the qualifying job.

     5. Adjustment of Award Amount. In the event of documented  performance of a
Participant  during a Year that is either  deficient or  exceptional,  the Chief
Executive  Officer  of  Sponsor,  in his sole  discretion,  may adjust the Award
payable to such Participant for such Year.

                                       11
<PAGE>

     6.  Example.  Attached as Exhibit A and  incorporated  by  reference  is an
example of the process by which an Award is granted  hereunder.  Said exhibit is
intended  solely as an example and in no way  modifies  the  provisions  of this
Article V.

                                   ARTICLE VI

                        DISTRIBUTION AND DEFERRAL OF AWARDS

     1.  Distribution of Awards.  Unless a Participant  elects to defer an award
pursuant to the  remaining  provisions of this Article VI, awards under the Plan
earned during any Year shall be paid in cash in the succeeding Year, normally no
later than March of such succeeding Year.

     2. Deferral Election. A Participant may elect to defer the Plan Award he or
she has earned for any Year by completing and submitting to the Vice  President,
Human Resources, a deferral election form by the later of (i) November 30 of the
Year in which the Award is earned or (ii) the  thirtieth  (30th) day after first
becoming  eligible to  participate  in the deferral  election  provisions of the
Plan. Such election shall apply to the Participant's Award, if any, otherwise to
be paid after the Year during  which it was  earned.  A  Participant's  deferral
election  may  apply to 100%,  75%,  50%,  or 25% of the Plan  Award;  provided,
however, that in no event shall the amount deferred be less than $1,000.

     The election to defer shall be  irrevocable  as to the Award earned  during
the particular Year.

     3. Period of Deferral. At the time of a Participant's  deferral election, a
Participant  must  also  select a  distribution  date and form of  distribution.
Subject  to  Section  6, the  distribution  date may be: (a) any date that is at
least five (5) years  subsequent  to the date the Plan Award would  otherwise be
payable,  but not later than the second anniversary of the Participant's Date of
Retirement; or (b) any date that is within two years following the Participant's

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<PAGE>

Date of Retirement. Subject to Section 6, the form of distribution may be either
(i) a lump sum or (ii) equal installments over a period extending from two years
to ten years, as elected by the Participant. Subject to Section 6, a Participant
may extend the distribution date for one or more additional  Year(s) by making a
new  deferral  election  at least one (1) year  before the  previously  selected
distribution  date  occurs;  provided,  however,  that (a) in no event shall the
subsequent  distribution  date be a date that is more than two years  beyond the
Participant's  Date of  Retirement  and (b) such a change will only be available
once for each deferred  Award.  Additionally,  a Participant may elect to change
the  form  of  distribution  by  making  a new  form of  distribution  election,
provided,  however, that (a) any change in the form of distribution must be made
at least one (1) year before any distribution  occurs and (b) such a change will
only be available once for each deferred Award.

     4. Performance Units. All Awards which are deferred under the Plan shall be
recorded in the form of Performance  Units.  Each  Performance Unit is generally
equivalent to a share of the  Sponsor's  Common  Stock.  In converting  the cash
award to Performance  Units,  the number of  Performance  Units granted shall be
determined  by dividing  the amount of the Award by 85% of the average  value of
the opening and closing  price of a share of the  Sponsor's  Common Stock on the
last trading day of the month  preceding the date of the Award.  The Performance
Units  attributable  to the 15% discount from the average value of the Sponsor's
Common  Stock  shall be referred to as the  "Incentive  Performance  Units." The
Incentive  Performance  Units and any  adjustments or earnings  attributable  to
those  Performance  Units shall be  forfeited  by the  Participant  if he or she
terminates  employment either voluntarily or involuntarily  other than for death
or  Retirement  prior to five years  from March 15 of the Year in which  payment

                                       13
<PAGE>

would have been made if the Award had not been deferred; provided, however, that
if before such date the  employment  of the  Participant  is  terminated  by the
Company without Cause following a Change in Control,  the Incentive  Performance
Units  shall  not be  forfeited  but  shall be  payable  to the  Participant  in
accordance with Section 8 of this Article VI.

     5. Plan Accounts.  A Plan Deferral Account will be established on behalf of
each  Participant,  and the number of Performance Units awarded to a Participant
shall be recorded in each Participant's Plan Deferral Account as of the first of
the  month  coincident  with or next  following  the  month in which a  deferral
becomes  effective.  The number of Performance Units recorded in a Participant's
Plan  Deferral  Account  shall  be  adjusted  to  reflect  any  splits  or other
adjustments  in the Sponsor's  Common Stock,  the payment of any cash  dividends
paid on the Sponsor's  Common Stock and the payment of Awards under this Plan to
the  Participant.  To the extent that any cash  dividends  have been paid on the
Sponsor's  Common Stock,  the number of  Performance  Units shall be adjusted to
reflect  the number of  Performance  Units that would have been  acquired if the
same dividend had been paid on the number of  Performance  Units recorded in the
Participant's Plan Deferral Account on the dividend record date. For purposes of
determining  the number of Performance  Units  acquired with such dividend,  the
average of the opening and closing  price of the  Sponsor's  Common Stock on the
payment date of the Sponsor's Common Stock dividend shall be used.

     Each  Participant  shall receive an annual  statement of the balance of his
Plan Deferral Account,  which shall include the Incentive  Performance Units and
associated  earnings  and  adjustments  that are subject to being  forfeited  as
provided above.

     6.  Payment  of  Deferred  Plan  Awards.  Subject  to  Section 4 related to
forfeiture of Incentive Performance Units, Deferred Plan Awards shall be paid in
cash  by  each  Company  on the  deferred  distribution  date  specified  by the

                                       14
<PAGE>

Participant in accordance with Section 3, or as soon as practicable  thereafter.
To convert the Performance  Units in a Participant's  Plan Deferral Account to a
cash payment amount, Performance Units shall be multiplied by the average of the
opening and closing price of the Sponsor's  Common Stock on the last trading day
preceding the applicable  distribution date specified by the Participant for the
Deferred Plan Award. Except as otherwise provided, deferred amounts will be paid
either in a single  lump-sum  payment or in up to ten (10)  annual  payments  as
elected by the Participant at the time of the deferral election.

     In the event that a  Participant  elects to receive the deferred Plan Award
in equal  annual  payments,  the amount of the Award to be received in each year
shall be determined as follows:

          (a) To determine the amount of the initial annual payment,  the number
of Performance Units in the Participant's  Plan Deferral Account will be divided
by the total number of annual  payments to be  received,  and the result will be
multiplied  by the average of the opening  and  closing  price of the  Sponsor's
Common  Stock on the last  trading  day  preceding  the due date of the  initial
payment.

          (b) To determine the amount of each  successive  annual  payment,  the
Plan Deferral  Account  balance will be divided by the number of annual payments
remaining,  and the result will be  multiplied by the average of the opening and
closing  price of the  Sponsor's  Common Stock on the last trading day preceding
the due date of the annual payment.

     7. Termination of Employment/Effect on Deferral Election. If the employment
of a  Participant  terminates  prior to the last day of a Year for  which a Plan
Award is determined,  then any deferral  election made with respect to such Plan
Award for such Year shall not become  effective  and any Plan Award to which the

                                       15
<PAGE>

Participant is otherwise entitled shall be paid as soon as practicable after the
end of the Year during which it was earned,  in accordance  with  paragraph 1 of
this Article VI.

     8. Termination of Employment/Acceleration of Deferral.  Notwithstanding the
foregoing,  if a Participant terminates employment by reason other than death or
Retirement,  full  payment  of  all  amounts  due to the  Participant  shall  be
accelerated  and  paid on the  first  day of the  month  following  the  date of
termination,  or as soon as practicable thereafter.  Incentive Performance Units
shall be subject to forfeiture to the extent provided in Section 4.

     9. Financial Hardship Payments. In the event of a severe financial hardship
occasioned by an emergency,  including, but not limited to, illness,  disability
or personal injury sustained by the Participant or a member of the Participant's
immediate family, a Participant may apply to receive a distribution earlier than
initially  elected.  The Chief Executive Officer of Sponsor or his designee may,
in his sole discretion,  either approve or deny the request.  The  determination
made by the Chief Executive  Officer of Sponsor will be final and binding on all
parties. If the request is granted, the payments will be accelerated only to the
extent  reasonably  necessary to alleviate  the  financial  hardship.  Incentive
Performance Units shall not be subject to early  distribution under this Section
9 until five years  from March 15 of the Year in which  payment  would have been
made if the Award had not been deferred.

     10. Death of a Participant.  If the death of a Participant  occurs before a
full  distribution of the Participant's  Plan Deferral Account is made,  payment
shall be made to the  Designated  Beneficiary  of the  Participant in accordance
with the schedule  specified in the  Participant's  Deferral Election form. Said
payment shall be made as soon as practical following notification that death has
occurred.

                                       16
<PAGE>

     11.  Non-Assignability of Interests.  The interests herein and the right to
receive  distributions under this Article VI 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 a  Participant  becomes
bankrupt,  the  interests  of  the  Participant  under  this  Article  VI may be
terminated  by the  Chief  Executive  Officer  of  Sponsor,  which,  in his sole
discretion,  may cause the same to be held or applied  for the benefit of one or
more of the dependents of such Participant or make any other disposition of such
interests that he deems appropriate.

     12. Unfunded  Deferrals.  Nothing in this Plan,  including this Article VI,
shall be  interpreted  or construed to require the Sponsor or any Company in any
manner to fund any obligation to the  Participants,  terminated  Participants or
beneficiaries  hereunder.  Nothing  contained  in this Plan nor any action taken
hereunder  shall  create,  or be construed to create,  a trust of any kind, or a
fiduciary  relationship between the Sponsor or any Company and the Participants,
terminated  Participants,  beneficiaries,  or any other persons. Any funds which
may be accumulated in order to meet any obligation under this Plan shall for all
purposes  continue to be a part of the general assets of the Sponsor or Company;
provided,  however,  that the Sponsor or Company  may  establish a trust to hold
funds  intended to provide  benefits  hereunder to the extent the assets of such
trust  become  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.  To
the extent that any Participant, terminated Participant, or beneficiary acquires
a right to receive  payments from the Sponsor or Company  under this Plan,  such
rights shall be no greater than the rights of any unsecured  general creditor of
the Sponsor or Company.

     13.  Change of  Control.  In the case of a Change of  Control,  the Company
shall,  subject to the restrictions in this Section 13 and Section 12 of Article

                                       17
<PAGE>

VI,  irrevocably set aside funds 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
of Control occurs,  of the benefits to which  Participants  (or their Designated
Beneficiaries)  would be entitled pursuant to the terms of the Plan if the value
of their Plan  Deferral  Account  would be paid in a lump sum upon the Change of
Control.

                                   ARTICLE VII

                            TERMINATION OF EMPLOYMENT

     Except as otherwise  provided in this Article  VII, a  Participant  must be
actively  employed by a Company on the next January 1 immediately  following the
Year for which a Plan Award is earned in order to be  entitled to payment of the
full amount of any Award for that Year. In the event the active  employment of a
Participant  shall  terminate or be  terminated  for any reason  before the next
January 1 immediately  following the Year for which a Plan Award is earned, such
Participant  shall  receive his or her Award for the year,  if any, in an amount
that  the  Chief   Executive   Officer  of  the   Sponsor   deems   appropriate.
Notwithstanding  the foregoing  provisions of this Article VII, in the event the
employment  of the  Participant  is  terminated  by the  Company  without  Cause
following  a Change in  Control,  the Award of the  Participant  for the Year in
which the  termination  occurs  shall  equal the amount of the Award which would
have been earned for the Year if the  Participant had remained in the employment
of the Company until the next January 1, pro rated to reflect the portion of the
Year completed by the Participant as an employee;  provided,  however, that such
Award shall not be less than the Target Award Opportunity of the Participant for
the  Year,  pro  rated to  reflect  the  portion  of the Year  completed  by the
Participant as an employee.

                                       18
<PAGE>
                                  ARTICLE VIII

                                  MISCELLANEOUS

     1.  Assignments  and  Transfers.  The rights and interests of a Participant
under the Plan may not be assigned,  encumbered or  transferred  except,  in the
event  of the  death  of a  Participant,  by will or the  laws  of  descent  and
distribution.

     2.  Employee  Rights  Under the Plan.  No Company  employee or other person
shall have any claim or right to be granted an Award under the Plan or any other
incentive bonus or similar plan of the Sponsor or any Company. Neither the Plan,
participation  in the Plan nor any action taken  hereunder shall be construed as
giving any employee any right to be retained in the employ of the Sponsor or any
Company.

     3. Withholding. The Sponsor or Company (as applicable) shall have the right
to deduct from all amounts paid in cash any taxes required by law to be withheld
with respect to such cash payments.

     4. Amendment or  Termination.  The  Compensation  Committee may in its sole
discretion  amend,  suspend or terminate the Plan or any portion  thereof at any
time;  provided,  that in the event of a Change of Control, no such action shall
take effect prior to the January 1 next  following  the Year in which occurs the
Change of  Control.  No action to amend,  suspend  or  terminate  the Plan shall
affect the right of a Participant to the payment of a Plan Award earned prior to
the effective date of such action.

     5.  Governing  Law. This Plan shall be construed and governed in accordance
with the laws of the state of North Carolina.

     6. Entire Agreement. This document (including the Exhibits attached hereto)
sets forth the entire Plan.

                                       19
<PAGE>

                                    EXHIBIT A


                                (to be supplied)





<PAGE>

                                    EXHIBIT B




                         Progress Energy Carolinas, Inc.

                      Progress Energy Service Company, LLC

                          Progress Energy Florida, Inc.

                         Progress Energy Ventures, Inc.

                Progress Fuels Corporation (corporate employees)



<PAGE>

                           DESIGNATION OF BENEFICIARY
                     MANAGEMENT INCENTIVE COMPENSATION PLAN
                                       OF
                              PROGRESS ENERGY, INC.

     As  provided  in the  Management  Incentive  Compensation  Plan of Progress
Energy,  Inc., I hereby  designate the following person as my beneficiary in the
event of my death before a full distribution of my Deferral Account is made.

                              PRIMARY BENEFICIARY:

                         -------------------------------

                         -------------------------------

                         -------------------------------


                             CONTINGENT BENEFICIARY:

                         -------------------------------

                         -------------------------------

                         -------------------------------

Any and all  prior  designations  of one or more  beneficiaries  by me under the
Management  Incentive  Compensation  Plan of Progress  Energy,  Inc.  are hereby
revoked and superseded by this  designation.  I understand  that the primary and
contingent beneficiaries named above may be changed or revoked by me at any time
by filing a new designation with the Sponsor's Human Resources Department.


DATE:
     ----------------------


SIGNATURE OF PARTICIPANT:
                         ------------------------------

The  Participant  named above executed this document in our presence on the date
set forth above


WITNESS:                                  WITNESS:
        -------------------------                 ----------------------------