Exhibit 10c(9)


     

    Exhibit
      10c(9)


     

    PROGRESS
      ENERGY, INC.

     

    AMENDED
      AND RESTATED

     

    MANAGEMENT
      DEFERRED COMPENSATION PLAN

     

    


     

    Adopted
      as of January 1, 2000

     

    (As
      Revised and Restated effective January
      1, 2007)

     

    



    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    


     

    
      TABLE
        OF CONTENTS

      


      
        	 	 	
                Page

              
	
                PREAMBLE

              	 	
                1

              
	 	 	 
	
                ARTICLE
                  I

              	
                DEFINITIONS

              	 	
                2

              
	 	
                1.1

              	
                Account
                  Balance

              	 	
                2

              
	 	
                1.2

              	
                Additional
                  Deferral Election

              	 	
                2

              
	 	
                1.3

              	
                Affiliated
                  Company

              	 	
                2

              
	 	
                1.4

              	
                Board

              	 	
                2

              
	 	
                1.5

              	
                Board
                  Committee

              	 	
                2

              
	 	
                1.6

              	
                Change
                  in Control

              	 	
                2

              
	 	
                1.7

              	
                Change
                  of Form Election

              	 	
                4

              
	 	
                1.8

              	
                Change-of-Investment
                  Election

              	 	
                4

              
	 	
                1.9

              	
                Code

              	 	
                4

              
	 	
                1.10

              	
                Committee

              	 	
                5

              
	 	
                1.11

              	
                Company

              	 	
                5

              
	 	
                1.12

              	
                Company
                  Incentive Plans

              	 	
                5

              
	 	
                1.13

              	
                Continuing
                  Directors

              	 	
                5

              
	 	
                1.14

              	
                Deemed
                  Investment Return

              	 	
                5

              
	 	
                1.15

              	
                Deferral
                  Election

              	 	
                5

              
	 	
                1.16

              	
                Deferrals

              	 	
                6

              
	 	
                1.17

              	
                Effective
                  Date

              	 	
                6

              
	 	
                1.18

              	
                Eligible
                  Employee

              	 	
                6

              
	 	
                1.19

              	
                Employee
                  Stock Incentive Plan

              	 	
                6

              
	 	
                1.20

              	
                Enrollment
                  Form

              	 	
                6

              
	 	
                1.21

              	
                ERISA

              	 	
                6

              
	 	
                1.22

              	
                Incentive
                  Matching Allocations

              	 	
                6

              
	 	
                1.23

              	
                Investment
                  Election

              	 	
                7

              
	 	
                1.24

              	
                Matching
                  Allocation

              	 	
                7

              
	 	
                1.25

              	
                Net
                  Salary

              	 	
                7

              
	 	
                1.26

              	
                Participant

              	 	
                7

              
	 	
                1.27

              	
                Participant
                  Accounts

              	 	
                7

              
	 	
                1.28

              	
                Participant
                  Company Account

              	 	
                7

              
	 	
                1.29

              	
                Participant
                  Deferral Account

              	 	
                8

              
	 	
                1.30

              	
                Participant
                  Matchable Deferral

              	 	
                8

              
	 	
                1.31

              	
                Payment
                  Commencement

              	 	
                8

              
	 	
                1.32

              	
                Phantom
                  Investment Fund

              	 	
                8

              
	 	
                1.33

              	
                Phantom
                  Funds Account

              	 	
                9

              
	 	
                1.34

              	
                Phantom
                  Investment Subaccount

              	 	
                9

              
	 	
                1.35

              	
                Phantom
                  Stock Unit

              	 	
                9

              
	 	
                1.36

              	
                Plan

              	 	
                9

              
	 	
                1.37

              	
                Plan
                  Year

              	 	
                9

              
	 	
                1.38

              	
                Plan
                  Year Accounts

              	 	
                9

              
	 	
                1.39

              	
                Progress
                  Energy 401(k) Savings & Stock Ownership Plan

              	 	
                10

              
	 	
                1.40

              	
                Retirement
                  Date

              	 	
                10

              
	 	
                1.41

              	
                Salary

              	 	
                10

              
	 	
                1.42

              	
                Section
                  409A

              	 	
                10

              
	 	
                1.43

              	
                Separation
                  from Service

              	 	
                10

              
	 	
                1.44

              	
                SMC
                  Participant

              	 	
                11

              
	 	
                1.45

              	
                Sponsor

              	 	
                11

              
	 	
                1.46

              	
                SSERP

              	 	
                11

              
	 	
                1.47

              	
                Valuation
                  Date

              	 	
                11

              
	 	
                1.48

              	
                Value

              	 	
                11

              
	 	
                1.49

              	
                Years
                  of Service

              	 	
                11

              
	 	 	 	 	 
	
                ARTICLE
                  II 

              	
                PARTICIPATION

              	 	
                12

              
	 	
                2.1

              	
                Eligibility

              	 	
                12

              
	 	
                2.2

              	
                Commencement
                  of Participation

              	 	
                12

              
	 	
                2.3

              	
                Annual
                  Participation Agreement

              	 	
                12

              
	 	
                2.4

              	
                Election
                  of Phantom

              	 	
                12

              
	 	 	 	 	 
	
                ARTICLE
                  III

              	
                DEFERRAL
                  ELECTIONS

              	 	
                13

              
	 	
                3.1

              	
                Participant
                  Deferred Salary Elections

              	 	
                13

              
	 	
                3.2

              	
                Matching
                  Allocations

              	 	
                14

              
	 	
                3.3

              	
                Incentive
                  Matching Allocations

              	 	
                15

              
	 	 	 	 	 
	
                ARTICLE
                  IV

              	
                ACCOUNTS

              	 	
                16

              
	 	
                4.1

              	
                Maintenance
                  of Accounts

              	 	
                16

              
	 	
                4.2

              	
                Separate
                  Plan Year Accounts

              	 	
                16

              
	 	
                4.3

              	
                Phantom
                  Investment Subaccounts

              	 	
                16

              
	 	
                4.4

              	
                Administration
                  of Deferral Accounts

              	 	
                16

              
	 	
                4.5

              	
                Administration
                  of Company Accounts

              	 	
                17

              
	 	
                4.6

              	
                Change
                  of Phantom Investment Subaccounts and Phantom Stock Units

              	 	
                19

              
	 	
                4.7

              	
                Transferred
                  Accounts

              	 	
                19

              
	 	 	 	 	 
	
                ARTICLE
                  V

              	
                VESTING

              	 	
                21

              
	 	
                5.1

              	
                Vesting

              	 	
                21

              
	 	 	 	 	 
	
                ARTICLE
                  VI

              	
                DISTRIBUTIONS

              	 	
                22

              
	 	
                6.1

              	
                Distribution
                  Elections

              	 	
                22

              
	 	
                6.2

              	
                Change-of-Form
                  Elections and Additional Deferral Elections

              	 	
                22

              
	 	
                6.3

              	
                Payment

              	 	
                23

              
	 	
                6.4

              	
                Unforeseeable
                  Emergency

              	 	
                24

              
	 	
                6.5

              	
                
                  Separation
                    from Service

                

              	 	25
	 	
                6.6

              	
                Taxes

              	 	
                26

              
	 	 6.7    	 Acceleration
                of Payment	 	26


      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      


      
        	
                ARTICLE
                  VII

              	
                DEATH
                  BENEFITS

              	 	
                27

              
	 	
                7.1

              	
                Designation
                  of Beneficiaries

              	 	
                27

              
	 	
                7.2

              	
                Death
                  Benefit

              	 	
                27

              
	 	 	 	 	 
	
                ARTICLE
                  VIII

              	
                CLAIMS

              	 	
                28

              
	 	
                8.1

              	
                Claims
                  Procedure

              	 	
                28

              
	 	
                8.2

              	
                Claims
                  Review Procedure

              	 	
                28

              
	 	 	 	 	 
	
                ARTICLE
                  IX

              	
                ADMINISTRATION

              	 	
                29

              
	 	
                9.1

              	
                Committee

              	 	
                29

              
	 	
                9.2

              	
                Authority

              	 	
                29

              
	 	 	 	 	 
	
                ARTICLE
                  X

              	
                AMENDMENT
                  AND TERMINATION OF THE PLAN

              	 	
                31

              
	 	
                10.1

              	
                Amendment
                  of the Plan

              	 	
                31

              
	 	
                10.2

              	
                Termination
                  of the Plan

              	 	
                31

              
	 	
                10.3

              	
                No
                  Impairment of Benefits

              	 	
                31

              
	 	 	 	 	 
	
                ARTICLE
                  XI

              	
                FUNDING
                  AND CLAIM STATUS

              	 	
                32

              
	 	
                11.1

              	
                General
                  Provisions

              	 	
                32

              
	 	 	 	 	 
	
                ARTICLE
                  XII

              	
                EFFECT
                  ON EMPLOYMENT OR ENGAGEMENT

              	 	
                35

              
	 	
                12.1

              	
                General

              	 	
                35

              
	 	 	 	 	 
	
                ARTICLE
                  XIII

              	
                GOVERNING
                  LAW

              	 	
                36

              
	 	
                13.1

              	
                General

              	 	
                36

              
	 	 	 	 	 
	
                EXHIBIT
                  A

              	 	 	
                37

              


      

      


    


    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



      PREAMBLE

     

    The
      Progress Energy, Inc. Management Deferred Compensation Plan (the “Plan”) was
      originally adopted by Carolina Power & Light Company effective as of January
      1, 2000, and was transferred to Progress Energy, Inc. (the “Sponsor”) effective
      August 1, 2000. The Plan is unfunded and will benefit only 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
      (“ERISA”).

     

    The
      Plan
      is intended to constitute a non-qualified deferred compensation plan that
      complies with Section 409A of the Code, related regulations and other guidance
      (“Section 409A”). Notwithstanding any provision of the Plan to the contrary, the
      Plan shall be construed in accordance with Section 409A. 

     

    The
      Plan
      as
      amended and restated effective January 1, 2007 shall govern deferrals under
      the
      Plan beginning January 1, 2007. 

     

    
      


    

     


    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



     
      ARTICLE I 

    DEFINITIONS

     

    
      	1.1  	
              Account
                Balance

            


    

     

    The
      value
      in terms of a dollar amount of a Participant’s Deferral Account or Company
      Account, as the case may be, as of the last Valuation Date.

     

    
      	1.2  	
              Additional
                Deferral Election

            


    

     

    The
      election by a Participant under Section 6.2 to defer distribution from a Plan
      Year Account.

     

    
      	1.3  	
              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 Code.

     

    
      	1.4  	
              Board

            


    

     

    The
      Board
      of Directors of the Sponsor.

     

    
      	1.5  	
              Board
                Committee

            


    

     

    The
      Organization and Compensation Committee of the Board.

     

    
      	1.6  	
              Change
                in
                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

               

            


    

    
      	(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 Company approve a plan of complete
                liquidation or winding-up of the Company or an agreement for the
                sale or
                disposition by the Company of all or substantially all of the Company’s
                assets; or

               

            


    

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

               

            


    

    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 Board Committee that one
      of
      the events set forth in this Section 1.6 has occurred. Any determination that
      an
      event described in this Section 1.6 has occurred shall, if made in good faith
      on
      the basis of information available at that time, be conclusive and binding
      on
      the Board Committee, the Company, the Participants and their beneficiaries
      for
      all purposes of the Plan.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	1.7  	
              Change
                of Form Election

            


    

     

    The
      election by a Participant under Section 6.2 to change the form of distribution
      of a Plan Year Account.

     

    
      	1.8  	
              Change-of-Investment
                Election

            


    

     

    The
      election by a Participant under Section 4.6 to change a Phantom Subaccount
      for
      the Participant Deferral Account or Company Account.

     

    
      	1.9  	
              Code

            


    

     

    The
      Internal Revenue Code of 1986, as amended, or any successor
      statute.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	1.10  	
              Committee

            


    

     

    The
      Administrative Committee described in Section 9.1 for administering the
      Plan.

     

    
      	1.11  	
              Company

            


    

     

    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
      Committee, adopts the Plan and is included in Exhibit A, as in effect from
      time
      to time.

     

    
      	1.12  	
              Company
                Incentive Plans

            


    

     

    The
      Sponsor’s Management Incentive Compensation Plan, or any Company sales incentive
      plans, marketing incentive plans, and any other cash incentive plans as
      determined by the Committee.

     

    
      	1.13  	
              Continuing
                Directors

            


    

     

    The
      members of the Board at the Effective Date; provided, however, that any person
      becoming a director subsequent to such whose election or nomination for election
      was supported by 75% or more of the directors who then comprised Continuing
      Directors shall be considered to be a Continuing Director. 

     

    
      	1.14  	
              Deemed
                Investment Return

            


    

     

    The
      amounts that are credited (or charged) from time to time to each Participant’s
      Deferral Account and Company Account to reflect deemed investment gains and
      losses of Phantom Investment Subaccounts.

     

    
      	1.15  	
              Deferral
                Election

            


    

     

    An
      election to defer Salary pursuant to Section 3.1.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	1.16  	
              Deferrals

            


    

     

    The
      deferrals of Salary of a Participant pursuant to Section 3.1.

     

    
      	1.17  	
              Effective
                Date

            


    

     

    January
      1, 2007.

     

    
      	1.18  	
              Eligible
                Employee

            


    

     

    An
      employee of the Company (a) who is eligible to participate in the Sponsor’s
      Management Incentive Compensation Plan, or (b) who is eligible to participate
      in
      any other eligible Company Incentive Plan and is determined by the Committee
      to
      be eligible to be a Participant; and who is not excluded from participation
      pursuant to Section 2.1(b).

     

    
      	1.19  	
              Employee
                Stock Incentive Plan

            


    

     

    The
      Employee Stock Incentive Plan as adopted by the Board and any successor to
      such
      plan which provides additional matching allocations under the Progress Energy
      401(k) Savings & Stock Ownership Plan.

     

    
      	1.20  	
              Enrollment
                Form

            


    

     

    The
      enrollment form prepared by the Company which a Participant must execute to
      have
      Deferrals with respect to a Plan Year.

     

    
      	1.21  	
              ERISA

            


    

     

    The
      Employee Retirement Income Security Act of 1974, as amended.

     

    
      	1.22  	
              Incentive
                Matching Allocations

            


    

     

    The
      additional match allocation which is to be allocated to a Participant's Company
      Account in accordance with Section 3.3.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	1.23  	
              Investment
                Election

            


    

     

    The
      election by a Participant under Sections 2.4 and 4.6 of the Phantom Investment
      Subaccounts in which the Participant’s Deferral Accounts and Company Accounts
      will be allocated.

     

    
      	1.24  	
              Matching
                Allocation

            


    

     

    A
      match
      allocation to a Participant's Company Account of a Participant’s Matchable
      Deferrals in accordance with Section 3.2.

     

    
      	1.25  	
              Net
                Salary

            


    

     

    The
      Salary of a Participant projected to be payable (assuming no deferral elections
      under the Plan or the Progress Energy 401(k) Savings & Stock Ownership Plan)
      with respect to a Plan Year reduced by the projected Deferrals of a Participant
      for the Plan Year under the Plan.

     

    
      	1.26  	
              Participant

            


    

     

    An
      Eligible Employee participating in the Plan pursuant to Article II.

     

    
      	1.27  	
              Participant
                Accounts

            


    

     

    The
      aggregate of a Participant’s Deferral Account and Participant’s Company
      Accounts.

     

    
      	1.28  	
              Participant
                Company Account

            


    

     

    The
      notational bookkeeping account maintained under Sections 4.1 and 4.5 to record
      Matching Allocations and Incentive Matching Allocations on behalf of a
      Participant and the Deemed Investment Return thereon pursuant to the provisions
      of the Plan.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	1.29  	
              Participant
                Deferral Account

            


    

     

    The
      notational bookkeeping account maintained under Section 4.1 of the Plan to
      record Deferrals of a Participant and the Deemed Investment Return thereon
      pursuant to the provisions of the Plan.

     

    
      	1.30  	
              Participant
                Matchable Deferral

            


    

     

    6%
      of the
      amount of Deferrals of a Participant for a Plan Year but no greater than 6%
      of
      (A-B) where A is the compensation limit under Section 401(a)(17) of the Code
      for
      the Plan Year and B is the Net Salary of a Participant for the Plan Year (with
      any negative differences equating to $0 for purposes of this calculation);
      provided,
      however,
      that
      the Participant Matchable Deferrals for an SMC Participant for a Plan Year
      shall
      be an amount equal to 6% of (C - D) where C is the projected Salary of a
      Participant for the Plan Year and D is the compensation limit under Section
      401(a)(17) of the Code for the Plan Year. Participant Matchable Deferrals for
      a
      Plan Year shall be determined for each payroll period during the Plan Year
      based
      on projected Matchable Deferrals for the entire Plan Year.

     

    
      	1.31  	
              Payment
                Commencement

            


    

     

    The
      date
      payments are to commence with respect to a Plan Year Account in accordance
      with
      Section 6.1.

     

    
      	1.32  	
              Phantom
                Investment Fund

            


    

     

     A
      deemed investment option for
      purposes of the Plan, each of which shall be the same as those investment
      options generally available to all participants in the Progress Energy 401(k)
      Savings & Stock Ownership Plan, or as otherwise selected by the
      Committee.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	1.33  	
              Phantom
                Funds Account

            


    

     

    Notational
      bookkeeping accounts maintained under the Plan at the direction of the Committee
      representing allocations of Participants of Phantom Investment Subaccounts
      in a
      Phantom Investment Fund.

     

    
      	1.34  	
              Phantom
                Investment Subaccount

            


    

     

    A
      notational bookkeeping account maintained under the Plan at the direction of
      the
      Committee representing a deemed investment in one or more Phantom Investment
      Funds as directed by the Participant under Sections 2.4 and 4.6.

     

    
      	1.35  	
              Phantom
                Stock Unit

            


    

     

    A
      hypothetical share of common stock of the Sponsor or its parent company, as
      applicable.

     

    
      	1.36  	
              Plan

            


    

     

    The
      Progress Energy, Inc. Management Deferred Compensation Plan as set forth herein
      and as amended from time to time.

     

    
      	1.37  	
              Plan
                Year

            


    

     

    The
      twelve (12) consecutive month periods beginning January 1 and ending the
      following December 31 commencing with the Effective Date.

     

    
      	1.38  	
              Plan
                Year Accounts

            


    

     

    The
      separate Participant Deferral Account and Participant Company Account maintained
      under the Plan pursuant to Section 4.2 with respect to a Participant for each
      Plan Year a Participant has Deferrals.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	1.39  	
              Progress
                Energy 401(k) Savings & Stock Ownership
                Plan

            


    

     

    The
      Progress Energy 401(k) Savings & Stock Ownership Plan of the Company adopted
      by the Board, as amended from time to time, and any successor to such
      plan.

     

    
      	1.40  	
              Retirement
                Date

            


    

     

              
The
      date a Participant retires
      from the Company on or after attaining (i) age 65 with 5 years of service,
      (ii)
      age 55 with 15 years of service, (iii) 35 years of service,
      or (iv)
      eligibility for retirement under the SSERP if covered under such plan.


     

    
      	1.41  	
              Salary

            


    

     

    The
      amount of an Eligible Employee's regular annual base salary, payable from time
      to time by the Company prior to a Deferral Election under the Plan and prior
      to
      any deferral election under the Progress Energy 401(k) Savings & Stock
      Ownership Plan.

     

    
      	1.42  	
              Section
                409A

            


    

     

    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.

    


    
      	1.43  	
              Separation
                from Service

            


    

     

    A
      participant separates from service if the Participant dies, retires or otherwise
      has a “termination of employment” with the Company, as defined for purposes of
      Section 409A.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	1.44  	
              SMC
                Participant

            


    

     

    A
      senior
      executive officer of the Company who is a member of the “Senior Management
      Committee” of the Sponsor.

     

    
      	1.45  	
              Sponsor

            


    

     

    Progress
      Energy, Inc. and its successors in interest.

     

    
      	1.46  	
              SSERP

            


    

     

    The
      Supplemental Senior Executive Retirement Plan of the Company.

     

    
      	1.47  	
              Valuation
                Date

            


    

     

    The
      last
      day of each calendar month and such other dates as selected by the Committee,
      in
      its sole discretion.

     

    
      	1.48  	
              Value

            


    

     

    The
      value
      of an account maintained under the Plan based on the fair market value of
      notational investments of Phantom Investment Subaccounts and Phantom Stock
      Units, as the case may be, as of the last Valuation Date. For purposes of
      calculating Value as of the end of a Plan Year, accrued but unallocated
      Incentive Matching Allocations shall be taken into consideration with respect
      to
      Participant Company Accounts.

     

    
      	1.49  	
              Years
                of Service

            


    

     

    Years
      of
      service of a Participant as calculated under the Progress Energy 401(k) Savings
      & Stock Ownership Plan.

    



    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    ARTICLE
      II

    PARTICIPATION

     

    
      	2.1  	
              Eligibility

            


    

     

    (a)  Participation
      in the Plan shall be limited to Eligible Employees.

    (b)  The
      Committee, in its sole discretion, may at any time limit the participation
      of an
      Eligible Employee in the Plan so as to assure that the Plan will not be subject
      to the provisions of parts 2, 3 and 4 of Title I of ERISA.

     

    
      	2.2  	
              Commencement
                of Participation

            


    

     

    An
      Eligible Employee who is not a Participant may elect to become a Participant
      as
      of the first day of a Plan Year by completing and submitting an Enrollment
      Form
      to the Sponsor’s designated agent by November 30 prior
      to
      the first day of the Plan Year as of which participation is to
      commence.

     

    
      	2.3  	
              Annual
                Participation Agreement

            


    

     

    Each
      Participant shall complete a new Enrollment Form with respect to a Plan Year
      by
      November 30 prior to the commencement of the Plan Year. If the Participant
      does not complete such form and submit it to the Sponsor’s designated agent by
      November 30, the Participant will have no Deferrals for the following Plan
      Year.

     

    
      	2.4  	
              Election
                of Phantom Investment
                Subaccounts

            


    

     

    Each
      Participant shall elect on his Enrollment Form the allocation of his Plan Year
      Participant Deferral Account among the Phantom Investment
      Subaccounts.

    



    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    ARTICLE
      III

    DEFERRAL
      ELECTIONS

     

    
      	3.1  	
              Participant
                Deferred Salary Elections

            


    

     

    (a)  A
      Participant completing an Enrollment Form in accordance with Sections 2.2 or
      2.3
      may make an election, pursuant to this Section 3.1, to defer his or her Salary
      (a “Deferral Election”) in accordance with the Plan. A Deferral Election shall
      apply only to the Participant’s Salary for the Plan Year specified in the
      Enrollment Form.

     

    (b)  The
      amount of Salary that may be deferred by a Participant shall be based on their
      target incentive level under the Sponsor’s Management Incentive Compensation
      Plan (“MICP”); or, for Participants in Company Incentive Plans other than the
      MICP, their target incentive level assuming that they participated in the MICP.
      Deferral Elections shall be made on the Enrollment Form for the applicable
      Plan
      Year pursuant to the following limitations:

     

    (i)  A
      Participant who is (or would be) eligible for a bonus at the 20% of salary
      target incentive level (the “Target”) for the Plan Year under the MICP
      may defer up to 15% of Salary.

     

    (ii)  A
      Participant who is (or would be) eligible for a bonus at the 25% of salary
      Target for the Plan Year under the MICP may defer up to 25% of
      Salary.

     

    (iii)  A
      Participant who is (or would be) eligible for a bonus at the 35% or more of
      salary Target under the MICP may defer up to 50% of Salary.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    All
      Deferrals shall be in increments of 5% of Salary. The minimum projected
      Deferrals for a Plan Year for a Participant who commences Deferrals after the
      beginning of a Plan Year in accordance with Section 2.2 shall be
      $1,000.

     

    (c)  A
      Deferral Election once made with respect to a Plan Year, cannot be changed
      or
      revoked. In the case of a new Participant, the Deferral Election will apply
      only
      to amounts that are both paid after the election is made and earned for services
      performed after the election is made. The amount of Salary that is deferred
      pursuant to a Deferral Election will reduce the Participant Salary
      proportionately throughout the applicable Plan Year or, in the case of a new
      Participant, throughout the portion of the Plan Year to which the Deferral
      Election is applicable.

     

    (d)  A
      dollar
      amount equal to the Salary deferred pursuant to this Section 3.1 (“Deferrals”)
      at each applicable payroll date shall be credited to the Participant’s Deferral
      Account within ten business days following the applicable payroll
      date.

     

    
      	3.2  	
              Matching
                Allocations

            


    

     

    A
      Participant who has made a Deferral Election with respect to a Plan Year and
      has
      Participant Matchable Deferrals for such Plan Year shall receive a credit to
      his
      Participant Company Account of a Matching Allocation for such Plan Year. The
      Matching Allocation with respect to a Plan Year shall equal 50% of the
      Participant Matchable Deferrals. Matching Allocations shall be credited to
      the
      Participant Company Account within ten business days following the applicable
      payroll date, based on a pro-rata portion of projected Matchable Deferrals
      for
      the Plan Year applicable to each payroll period during the Plan
      Year.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	3.3  	
              Incentive
                Matching Allocations

            


    

     

    Participants
      with Matchable Deferrals for a Plan Year shall receive a credit to their
      Participant Company Account for the Plan Year of an Incentive Matching
      Allocation if an “Incentive Matching Allocation” is provided under the Progress
      Energy 401(k) Savings & Stock Ownership Plan for the Plan Year. The
      Incentive Matching Allocation shall equal that percentage of the Participant
      Matchable Deferrals for the Plan Year equal to the “Incentive Matching
      Allocation” (stated as a percentage) provided (or that would have been provided
      if the Participant participated) under the Progress Energy 401(k) Savings &
Stock Ownership Plan for such Plan Year. Incentive Matching Allocations with
      respect to a Plan Year, if any, shall be credited to a Participant’s Company
      Account in accordance with Section 4.5 pursuant to rules and procedures adopted
      by the Committee approximately coincident with the credit under the Progress
      Energy 401(k) Savings & Stock Ownership Plan of “Incentive Matching
      Allocations” following the end of a Plan Year; provided, however, no such
      allocation shall be made if a Participant is not employed at the end of the
      applicable Plan Year, unless the Participant retired, died, or became disabled
      during the Plan Year.

    



    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    ARTICLE
      IV

    ACCOUNTS

     

    
      	4.1  	
              Maintenance
                of Accounts

            


    

     

    The
      Committee shall maintain a Participant Deferral Account and a Participant
      Company Account for each Participant. There shall be credited to a Participant's
      Deferral Account all Deferrals by a Participant under the Plan and there shall
      be credited to a Participant's Company Account all Matching Allocations and
      Incentive Matching Allocations with respect to a Participant under the Plan
      in
      accordance with Sections 3.2 and 3.3.

     

    
      	4.2  	
              Separate
                Plan Year Accounts

            


    

     

    The
      Committee shall maintain a separate Participant Deferral Account and Participant
      Company Account for each Plan Year a Participant has Deferrals (separately
      a
“Plan Year Deferral Account” and a “Plan Year Company Account” and together the
“Plan Year Account”).

     

    
      	4.3  	
              Phantom
                Investment Subaccounts

            


    

     

    The
      Committee shall maintain separate Phantom Investment Subaccounts representing
      deemed investments in Phantom Investment Funds as directed by the Participant.
      Phantom Investment Subaccounts shall be valued as of each Valuation Date based
      on the notional investments of each such account, pursuant to rules and
      procedures adopted by the Committee.

     

    
      	4.4  	
              Administration
                of Deferral Accounts

            


    

     

    (a)  A
      Participant's Deferral Accounts shall be comprised in total, of units in Phantom
      Investment Subaccounts.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)  Participants
      shall allocate their Deferrals among Phantom Investment Subaccounts pursuant
      to
      elections under Section 2.4.

     

    (c)  The
      Value
      of that portion of a Participant’s Deferral Account allocated to a Phantom
      Investment Subaccount shall be changed on each Valuation Date to reflect the
      new
      Value of the Phantom Investment Subaccount.

     

    (d)  The
      interest of a Participant’s Deferral Account in a Phantom Investment Subaccount
      shall be stated in a unit value or dollar amount, as determined by the
      Committee.

     

    
      	4.5  	
              Administration
                of Company Accounts

            


    

     

    (a)  A
      Participant’s Company Account shall be comprised of Phantom Investment Fund
      units which shall be recorded in Phantom Investment Subaccounts. All Matching
      Allocations and Incentive Matching Allocations shall be recorded in Phantom
      Investment Subaccounts and shall be deemed invested in Phantom Stock Units,
      units of other Phantom Investment Funds, or a combination of Phantom Stock
      Units
      and other Phantom Investment Funds as determined by the Committee in its sole
      discretion. To the extent the Matching Allocations and Incentive Matching
      Allocations are initially deemed to be invested in Phantom Stock Units, the
      number of Phantom Stock Units will be determined on the date of each allocation
      under the Plan based on the closing price of a share of common stock of the
      Sponsor on the New York Stock Exchange on the date of each allocation. To the
      extent the Matching Allocations and Incentive Matching Allocations are initially
      deemed to be invested in one or more Phantom Investment Funds (other than
      Phantom Stock Units), the number of units in these Phantom Investment Funds
      will
      be determined on the date of each allocation under the Plan, using the closing
      price of the units of the underlying investment fund on which the Phantom
      Investment fund is based, on the date of each allocation.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)  The
      number of Phantom Stock Units allocated to a Participant’s Company Account shall
      be adjusted periodically to reflect the deemed reinvestment of dividends on
      Sponsor common stock in additional Phantom Stock Units.

     

    (c)  In
      the
      event there is any change in the common stock of the Sponsor, through merger,
      consolidation, reorganization, recapitalization (other than pursuant to
      bankruptcy proceedings), stock dividend, stock split, reverse stock split,
      split-up, split-off, spin-off, combination of shares, exchange of shares,
      dividend in kind or other like change in capital structure (an “Adjustment
      Event”), the number of Phantom Stock Units subject to the Plan shall be adjusted
      by the Committee in its sole judgment so as to give appropriate effect to such
      Adjustment Event. Any fractional units resulting from such adjustment may be
      eliminated. Each successive Adjustment Event shall result in the consideration
      by the Committee of whether any adjustment to the number of Phantom Stock Units
      subject to the Plan is necessary in the Committee’s judgment. Issuance of common
      stock or securities convertible into common stock for value will not be deemed
      to be an Adjustment Event unless otherwise expressly determined by the
      Committee.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	4.6  	
              Change
                of Phantom Investment Subaccounts
                and Phantom Stock Units

            


    

     

    (a)  A
      Participant may elect to reallocate the value of his Phantom Investment
      Subaccounts comprising his Deferral Accounts among other Phantom Investment
      Subaccounts and change the allocation of future Deferrals among Phantom
      Investment Subaccounts once per calendar month, pursuant to uniform rules and
      procedures adopted by the Committee.

     

    (b)  A
      Participant may elect to reallocate Phantom Investment Subaccounts comprising
      his Company Account, once per calendar month, pursuant to uniform rules adopted
      by the Committee.

     

    
      	4.7  	
              Transferred
                Accounts

            


    

     

    (a)  Effective
      as of the Effective Date, the Value of a SMC Participant’s Company Account shall
      include the value of such Participant’s deferral account as of such date (being
      a “Transferred Account”) under the Carolina Power & Light Executive Deferred
      Compensation Plan, but only to the extent the Participant acknowledges in
      writing he has no further interest in the Executive Deferred Compensation
      Plan.

     

    (b)  Effective
      on the Effective Date, the Value of any Participant’s Company Account shall
      include the value of such Participant’s additional benefits (currently recorded
      as phantom Company stock units) granted under Article VIII.2. (also being a
      “Transferred Account”) under the Company’s Deferred Compensation Plan for Key
      Management Employees, but only to the extent the Participant acknowledges in
      writing that he has no further interest in these benefits in the Company’s
      Deferred Compensation Plan for Key Management Employees.

     

    (c)  The
      total
      value of the Transferred Accounts as described in this Section 4.7 shall be
      deemed a vested Company Account for all purposes of the Plan.

    



    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    ARTICLE
      V

    VESTING

     

    
      	5.1  	
              Vesting

            


    

     

    A
      Participant’s Deferral Accounts shall be 100% vested at all times. A
      Participant’s Company Accounts shall vest in accordance with the following
      schedule:

     

    
      	
              Years
                of Service

            	
               Percent
                of Vesting

            
	
              Less
                than 1

            	
              0

            
	
              1
                or more

               

            	
              100%

               

            


    

    


    



    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    ARTICLE
      VI

    DISTRIBUTIONS

     

    
      	6.1  	
              Distribution
                Elections

            


    

     

    A
      Participant when making a Deferral Election pursuant to an Enrollment Form
      with
      respect to a Plan Year shall elect on such Enrollment Form (a) to defer the
      payment of his Plan Year Accounts with respect to such Plan Year, in accordance
      with the Plan until (i) the April 1 following the date that is five years
      from the last day of such Plan Year, (ii) the April 1 following the
      Participant’s Retirement or (iii) the April 1 following the first
      anniversary of the Participant’s Retirement (each a “Payment Commencement Date”)
      and (b) to provide for the payment of such Plan Year Account in the form of
      (i)
      a lump sum or (ii) approximately equal installments over a period extending
      from
      two years to ten years (by paying a fraction of the account balance each year
      during such period), as elected by the Participant. Except as otherwise provided
      in this Article VI, such elections may not be changed or revoked.
      Notwithstanding the foregoing, 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), payment of deferred amounts shall not be made pursuant to an
      election under Section 6.1(a)(ii) above before the date that is six months
      after
      the date of Separation from Service for any reason including Retirement (or,
      if
      earlier, the date of death of the Participant). 

     

    
      	6.2  	
              Change-of-Form
                Elections and Additional Deferral
                Elections

            


    

     

    (a)  Any
      Participant who has made elections under Section 6.1 with respect to amounts
      deferred before January 1, 2005, may change such elections pursuant to this
      Section 6.2(a) as in effect prior to January 1, 2005, unless such provisions
      are
      materially modified after October 3, 2004. For this purpose, an amount is
      considered deferred before January 1, 2005, if the amount is earned and vested
      before such date. Such Participant may elect at least one year prior to the
      Payment Commencement Date with respect to such Plan Year Accounts a new Payment
      Commencement Date that either is five years from the then current Payment
      Commencement Date or otherwise is permitted under Section 6.1(a)(ii) or (iii).
      Only one such Additional Deferral Election will be permitted with respect to
      Plan Year Accounts relating to a particular Plan Year. In addition, the
      Participant may elect to change the form of distribution to any of the forms
      permitted under Section 6.1(b) by completing a Change-of-Form Elections with
      respect to Plan Year Accounts at least one year prior to the applicable Payment
      Commencement Date for such accounts.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)  Any
      elections made under Section 6.1 with respect to amounts deferred after December
      31, 2004, shall be irrevocable except as permitted by rules promulgated under
      Section 409A and consented to by the Committee. 

     

    
      	6.3  	
              Payment

            


    

     

    Upon
      occurrence of an event specified in the Participant’s distribution election
      under Section 6.1 (a “Distribution Event”) with respect to Plan Year Accounts,
      as modified by any applicable subsequent Additional Deferral Election under
      Section 6.2, the Account Balance of a Participant’s Plan Year Accounts shall be
      paid by the Company to the Participant in the form elected under Section 6.1.
      Such payments shall commence as soon as practicable and in no event more than
      30
      days following the occurrence of the Distribution Event.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	6.4  	
              Unforeseeable
                Emergency

            


    

     

    In
      case
      of an unforeseeable emergency, a Participant may request the Committee, on
      a
      form to be provided by the Committee or its delegate, that payment of the vested
      portion of Participant Accounts be made earlier than the date provided under
      the
      Plan.

     

    An
      “unforeseeable emergency” shall mean a severe financial hardship to the
      Participant resulting from an illness or accident of the Participant, the
      Participant’s spouse or a dependent (as defined in Section 152(a) of the Code)
      of the Participant, loss of the Participant’s property due to casualty, or other
      similar extraordinary and unforeseeable circumstances arising as a result of
      events beyond the control of the Participant.

     

    The
      Committee shall consider any requests for payment under this Section 6.4 on
      a
      uniform and nondiscriminatory basis and in accordance with the standards of
      interpretation described in Section 409A. If the request is granted, the amounts
      distributed will not exceed the amounts necessary to satisfy the emergency
      need
      plus amounts necessary to pay taxes reasonably anticipated as result of the
      distribution, after taking into account the extent to which such hardship is
      or
      may be relieved by reason of the cessation of Deferrals for the Plan Year in
      which the distribution is made and through reimbursement or compensation by
      insurance or otherwise or by liquidation of the Participant’s assets (to the
      extent such liquidation would not itself cause severe financial
      hardship).

     

    In
      the
      event of a hardship determination by the Committee, the Company shall pay out
      in
      a lump sum to the Participant such portion of the Participant Accounts as
      determined by the Committee and Deferrals by the Participant for the Plan Year
      in which the hardship distribution is made shall cease.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	6.5  	
              Separation
                from Service

            


    

     

    In
      the
      event of the Separation from Service of a Participant with the Company and
      any
      parent, subsidiary or affiliate for any reason, prior to the Retirement or
      death
      of the Participant, the vested portion of the Participant Accounts of such
      Participant shall be paid in a lump sum to such Participant based on the Value
      of such accounts as of the Valuation Date coincident with or immediately
      preceding the date of distribution. Such payment shall be made as soon as
      administratively practicable following the Participant’s termination date as
      determined under the Company’s normal administrative practices. The nonvested
      portion of a terminated Participant’s Company Account shall be forfeited by the
      Participant. In the event of the Separation from Service of a SMC Participant
      for whom no Deferral Election was made for a Plan Year, any Matching Allocation,
      Incentive Matching Allocation and Deemed Investment Return allocated to such
      Participant shall be distributed to the Participant following termination of
      employment in accordance with this Section 6.5. In the event of the Retirement
      of a Participant prior to the Payment Commencement Date elected by the
      Participant under Section 6.1(a)(i) with respect to a Plan Year Account,
      distribution of such account shall commence no later than April 1 following
      the
      first anniversary of the Participant’s Retirement. Notwithstanding the
      foregoing, 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), payment
      of
      deferred amounts shall not be made before the date that is six months after
      the
      date of Separation from Service for any reason including Retirement (or, if
      earlier, the date of death of the Participant). 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6.6 Taxes

     

    The
      Company shall report Deferrals in the year they occur as required by Section
      6041 and Section 6051 of the Code. The Company shall deduct from all payments
      under the Plan federal, state and local income and employment taxes, as required
      by applicable law. Deferrals will be taken into account for purposes of any
      tax
      or withholding obligation under the Federal Insurance Contributions Act and
      Federal Unemployment Tax Act in the year of the Deferrals, as required by
      Sections 3121(v) and 3306(r) of the Code and the regulations thereunder. Amounts
      required to be withheld in the year of the Deferrals pursuant to Sections
      3121(v) and 3306(r) shall be withheld out of current wages or other compensation
      paid by the Company to the Participant.

     

    
      	6.7  	
              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 of the Code. 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
      VII

    DEATH
      BENEFITS

     

    
      	7.1  	
              Designation
                of Beneficiaries

            


    

     

    The
      Participant’s beneficiary under this Plan entitled to receive benefits under the
      Plan in the event of the Participant’s death shall be designated by the
      Participant on a form provided by the Committee. In the absence of such
      designation or in the event the designated beneficiary has predeceased the
      Participant, the beneficiary shall be deemed the estate of the
      Participant.

     

    
      	7.2  	
              Death
                Benefit

            


    

     

    In
      the
      event of the death of a Participant prior to the payout of his Participant
      Accounts, the Value of the remaining portion of the Participant Accounts shall
      be paid by the Company in a lump sum to the Participant’s beneficiary (as
      defined under Section 7.1) based on the Value of such accounts on the Valuation
      Date immediately following the date of death. Payment shall be made as soon
      as
      administratively practicable following such Valuation Date pursuant to rules
      and
      procedures adopted by the Committee.

    



    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    ARTICLE
      VIII

    CLAIMS

     

    
      	8.1  	
              Claims
                Procedure

            


    

     

    If
      any
      Participant or his or her beneficiary has a claim for benefits which is not
      being paid, such claimant may file with the Committee a written claim setting
      forth the amount and nature of the claim, supporting facts, and the claimant’s
      address. The Committee shall notify each claimant of its decision in writing
      by
      registered or certified mail within sixty (60) days after its receipt of a
      claim
      or, under special circumstances, within ninety (90) days after its receipt
      of a
      claim. If a claim is denied, the written notice of denial shall set forth the
      reasons for such denial, refer to pertinent Plan provisions on which the denial
      is based, describe any additional material or information necessary for the
      claimant to realize the claim, and explain the claims review procedure under
      the
      Plan.

     

    
      	8.2  	
              Claims
                Review Procedure

            


    

     

    A
      claimant whose claim has been denied, or such claimant’s duly authorized
      representative, may file, within sixty (60) days after notice of such denial
      is
      received by the claimant, a written request for review of such claim by the
      Committee. If a request is so filed, the Committee shall review the claim and
      notify the claimant in writing of its decision within sixty (60) days after
      receipt of such request. In special circumstances, the Committee may extend
      for
      up to sixty (60) additional days the deadline for its decision. The notice
      of
      the final decision of the Committee shall include the reasons for its decision
      and specific references to the Plan provisions on which the decision is based.
      The decision of the Committee shall be final and binding on all
      parties.

    



    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    ARTICLE
      IX

    ADMINISTRATION

     

    
      	9.1  	
              Committee

            


    

     

    The
      Administrative Committee consisting of not less than three (3) or more than
      seven (7) persons appointed by the Board Committee or its delegate to administer
      the Plan.

     

    
      	9.2  	
              Authority

            


    

     

    (a)  The
      Committee shall have the exclusive right to interpret the Plan to the maximum
      extent permitted by law, to prescribe, amend and rescind rules and regulations
      relating to it, and to make all other determinations necessary or advisable
      for
      the administration of the Plan, including the determination under Section 9.2(b)
      herein. The decisions, actions and records of the Committee shall be conclusive
      and binding upon the Company and all persons having or claiming to have any
      right or interest in or under the Plan.

     

    (b)  The
      Committee may delegate to one or more agents, or to the Company such
      administrative duties as it may deem advisable. The Committee may employ such
      legal or other counsel and consultants as it may deem desirable for the
      administration of the Plan and may rely upon any opinion or determination
      received from counsel or consultant.

     

    (c)  No
      member
      of the Committee shall be directly or indirectly responsible or otherwise liable
      for any action taken or any failure to take action as a member of the Committee,
      except for such action, default, exercise or failure to exercise resulting
      from
      such member’s gross negligence or willful misconduct. No member of the Committee
      shall be liable in any way for the acts or defaults of any other member of
      the
      Committee, or any of its advisors, agents or representatives.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)  The
      Company shall indemnify and hold harmless each member of the Committee against
      any and all expenses and liabilities arising out of his or her own activities
      relating to the Committee, except for expenses and liabilities arising out
      of a
      member’s gross negligence or willful misconduct.

     

    (e)  The
      Company shall furnish to the Committee all information the Committee may deem
      appropriate for the exercise of its powers and duties in the administration
      of
      the Plan. The Committee shall be entitled to rely on any information provided
      by
      the Company without any investigation thereof.

     

    (f)  No
      member
      of the Committee may act, vote or otherwise influence a decision of such
      Committee relating to his or her benefits, if any, under the Plan.

    



    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    ARTICLE
      X

    AMENDMENT
      AND TERMINATION OF THE PLAN

     

    
      	10.1  	
              Amendment
                of the Plan

            


    

     

    The
      Plan
      may be wholly or partially amended or otherwise modified at any time by the
      Board or the Board Committee consistent with the requirements of Section 409A
      of
      the Code.

     

    
      	10.2  	
              Termination
                of the Plan

            


    

     

    The
      Plan
      may be terminated at any time by written action of the Board or the Board
      Committee or by the Committee as provided under the Plan; provided, that
      termination of the Plan shall not affect the distribution of the Participant
      Accounts (except as otherwise permitted under Section 409A of the Code).
      Notwithstanding the foregoing, the Plan may be terminated and Participant
      Accounts distributed to Participants within twelve months of a “change in
      control event” as defined for purposes of Section 409A of the Code.

     

    
      	10.3  	
              No
                Impairment of Benefits

            


    

     

    Notwithstanding
      the provisions of Sections 10.1 and 10.2, no amendment to or termination of
      the
      Plan shall impair any rights to benefits which theretofore accrued hereunder;
      provided, however, the payout of all Plan benefits on termination of the Plan,
      if permitted pursuant to Section 10.2, or a change of any Phantom Investment
      Funds or creation of a substitute for Phantom Investment Funds as a result
      of a
      Plan amendment or action of the Committee shall not constitute an impairment
      of
      any rights or benefits.

    



    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    ARTICLE
      XI

    FUNDING
      AND CLAIM STATUS

     

    
      	11.1  	
              General
                Provisions

            


    

     

    (a)  The
      Company shall make no provision for the funding of any Participant Accounts
      payable hereunder that (i) would cause the Plan to be a funded plan for purposes
      of Section 404(a)(5) of the Code or for purposes of Title I of ERISA, or (ii)
      would cause the Plan to be other than an “unfunded and unsecured promise to pay
      money or other property in the future” under Treasury Regulations
§ 1.83-3(e); and, except in the case of a Change in Control of the Sponsor,
      the Company shall have no obligation to make any arrangements for the
      accumulation of funds to pay any amounts under this Plan. Subject to the
      restrictions of this Section 11.1(a), the Company, in its sole discretion,
      may
      establish one or more grantor trusts described in Treasury Regulations §
1.677(a)-1(d) to accumulate funds to pay amounts under this Plan, provided
      that
      the assets of such trust(s) shall be required to be used to satisfy the claims
      of the Company’s general creditors in the event of the Company’s bankruptcy or
      insolvency.

     

    (b)  In
      the
      case of a Change in Control that is not a “change in the financial health” of
      the Company, as defined for purposes of Section 409A, the Company shall, subject
      to the restrictions in this paragraph and in Section 11.1(a), 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 beneficiary) the net
      present value as of the date on which the Change in Control occurs, of the
      benefits to which Participants (or their beneficiaries) would be entitled
      pursuant to the terms of the Plan if the Value of their Participant Account
      would be paid in a lump sum upon the Change of Control.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)  In
      the
      event that the Company shall decide to establish an advance accrual reserve
      on
      its books against the future expense of payments from any Participant, such
      reserve shall not under any circumstances be deemed to be an asset of this
      Plan
      but, at all times, shall remain a part of the general assets of the Company,
      subject to claims of the Company’s creditors.

     

    (d)  Participants,
      their legal representatives and their beneficiaries shall have no right to
      anticipate, alienate, sell, assign, transfer, pledge or encumber their interests
      in the Plan, nor shall such interests be subject to attachment, garnishment,
      levy or execution by or on behalf of creditors of the Participants or of their
      beneficiaries.

     

    (e)  Participants
      shall have no right, title, or interest whatsoever in or to any investments
      which the Company may make to aid it in meeting its obligations under the Plan.
      Nothing contained in the Plan, and no action taken pursuant to its provisions,
      shall create a trust of any kind, or a fiduciary relationship between the
      Company and any Participant, beneficiary, legal representative or any other
      person. To the extent that any person acquires a right to receive payments
      from
      the Company under the Plan, such right shall be no greater than the right of
      an
      unsecured general creditor of the Company. All payments to be made hereunder
      with respect to a Participant shall be paid from the general funds of the
      Company employing such Participant.

    


                   
      (f)      The
      foregoing provisions of this Article XI notwithstanding, the Company shall
      establish no grantor trust if its assets are includable in the income of
      Participants thereby pursuant to Section 409A(b). 

    



    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    ARTICLE
      XII

    EFFECT
      ON
      EMPLOYMENT OR ENGAGEMENT

     

    
      	12.1  	
              General

            


    

     

    Nothing
      contained in the Plan shall affect, or be construed as affecting, the terms
      of
      employment or engagement of any Participant except to the extent specifically
      provided herein. Nothing contained in the Plan shall impose, or be construed
      as
      imposing, an obligation on the Company to continue the employment or engagement
      of any Participant.

    



    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    ARTICLE
      XIII

    GOVERNING
      LAW

     

    
      	13.1  	
              General

            


    

     

    The
      Plan
      and all actions taken in connection with the Plan shall be governed by and
      construed in accordance with the laws of the State of North Carolina without
      reference to principles of conflict of laws, except as superseded by applicable
      federal law.

    


    


    IT
      WITNESS WHEREOF, this instrument has been executed this 15th day of December,
      2006.

    


                        PROGRESS
      ENERGY,
      INC.

    


     

                              
By:
      /s/ Robert
      B. McGehee

                                                           
Robert
      B. McGeehee

                            
      Chief Executive Officer

     

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


     


    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



     

      EXHIBIT
      A

     

    Progress
      Energy Carolinas, Inc.

    Progress
      Energy Service Company, LLC

    Progress
      Energy Ventures, Inc.

    Progress
      Energy Florida, Inc.

    Progress
      Fuels Corporation (corporate employees only)