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                                                                     Exhibit 4.3












                              PROGRESS ENERGY, INC.

                              AMENDED AND RESTATED

                      MANAGEMENT DEFERRED COMPENSATION PLAN




                          Adopted as of January 1, 2000

               (As Revised and Restated effective January 1, 2003)

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                               TABLE OF CONTENTS

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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 of Control .............................................    2
     1.7     Change-of-Form Election .......................................    4
     1.8     Change-of-Investment Election .................................    5
     1.9     Code ..........................................................    5
     1.10    Committee .....................................................    5
     1.11    Company .......................................................    5
     1.12    Company Incentive Plans .......................................    5
     1.13    Continuing Directors ..........................................    5
     1.14    Deemed Investment Return ......................................    6
     1.15    Deferral Election .............................................    6
     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 .........................................................    7
     1.22    Incentive Matching Allocations ................................    7
     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 ...................................    8
     1.29    Participant Deferral Account ..................................    8
     1.30    Participant Matchable Deferral ................................    8
     1.31    Payment Commencement ..........................................    8
     1.32    Phantom Investment Fund .......................................    9
     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 ............................................   10
     1.39    Progress Energy 401(k) Savings & Stock Ownership Plan .........   10
     1.40    Retirement Date ...............................................   10
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     1.41    Salary ..............................................................  10
     1.42    SMC Participant .....................................................  10
     1.43    Sponsor .............................................................  10
     1.44    SSERP ...............................................................  10
     1.45    Valuation Date ......................................................  11
     1.46    Value ...............................................................  11
     1.47    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 Investment Subaccounts ..........................  13

ARTICLE III. DEFERRAL ELECTIONS ..................................................  14
     3.1     Participant Deferred Salary Elections ...............................  14
     3.2     Matching Allocations ................................................  15
     3.3     Incentive Matching Allocations ......................................  16

ARTICLE IV.  ACCOUNTS ............................................................  17
     4.1     Maintenance of Accounts .............................................  17
     4.2     Separate Plan Year Accounts .........................................  17
     4.3     Phantom Investment Subaccounts ......................................  17
     4.4     Administration of Deferral Accounts .................................  17
     4.5     Administration of Company Accounts ..................................  18
     4.6     Change of Phantom Investment Subaccounts and Phantom Stock Units ....  20
     4.7     Transferred Accounts ................................................  20

ARTICLE V.   VESTING .............................................................  22
     5.1     Vesting .............................................................  22

ARTICLE VI.  DISTRIBUTIONS .......................................................  23
     6.1     Distribution Elections ..............................................  23
     6.2     Change-of-Form Elections and Additional Deferral Elections ..........  23
     6.3     Payment .............................................................  24
     6.4     Hardships ...........................................................  24
     6.5     Termination of Employment ...........................................  25
     6.6     Taxes ...............................................................  25
     6.7     Acceleration of Payment .............................................  26

ARTICLE VII. DEATH BENEFITS ......................................................  27
     7.1     Designation of Beneficiaries ........................................  27
     7.2     Death Benefit .......................................................  27
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ARTICLE VIII. CLAIMS 28
     8.1      Claims Procedure ............................................    28
     8.2      Claims Review Procedure .....................................    28

ARTICLE IX.   ADMINISTRATION ..............................................    30
     9.1      Committee ...................................................    30
     9.2      Authority ...................................................    30

ARTICLE X.    AMENDMENT AND TERMINATION OF THE PLAN .......................    32
     10.1     Amendment of the Plan .......................................    32
     10.2     Termination of the Plan .....................................    32
     10.3     No Impairment of Benefits ...................................    32

ARTICLE XI.   FUNDING AND CLAIM STATUS ....................................    33
     11.1     General Provisions ..........................................    33

ARTICLE XII.  EFFECT ON EMPLOYMENT OR ENGAGEMENT ..........................    35
     12.1     General .....................................................    35

ARTICLE XIII. GOVERNING LAW ...............................................    36
     13.1     General .....................................................    36

EXHIBIT A .................................................................    37
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                                    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").

                                        1

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                                    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 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

                                        2

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               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

                                        3

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               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-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 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.

                                        4

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          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.

                                        5

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          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, 2000.

          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.

                                        6

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          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.

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          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.

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          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.

                                       9

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          1.1  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 SMC Participant

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

          1.43 Sponsor

          Progress Energy, Inc. and its successors in interest.

          1.44 SSERP

          The Supplemental Senior Executive Retirement Plan of the Company.

                                      10

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          1.45 Valuation Date

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

          1.46 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.

          1.47 Years of Service

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

                                       11

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                                   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

          Each Eligible Employee on the Effective Date may elect to become a
Participant as of the Effective Date by completing and submitting an Enrollment
Form to the Sponsor's designated agent by November 30, 1999. An employee of the
Company first becoming an Eligible Employee after January 1, 2000 may elect to
become a Participant effective as of thirty days after first becoming an
Eligible Employee by completing and submitting an Enrollment Form to the
Sponsor's designated agent within such thirty-day period. An Eligible Employee
who is not a Participant may elect to become a Participant as of the first day
of a Plan Year commencing after December 31, 2000 by completing and submitting
an Enrollment Form to the Sponsor's designated agent by November 30 prior to the
commencement of the Plan Year.

          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.

                                       12

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          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.

                                       13

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                                  ARTICLE III
                               DEFERRAL ELECTIONS

          3.1  Participant Deferred Salary Elections

          (a)  A Participant completing an Enrollment Form in accordance with
     Sections 2.2 0r 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.

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          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-

                                       15

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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.

                                       16

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                                   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.

                                       17

<PAGE>

          (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

                                       18

<PAGE>

     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.

                                       19

<PAGE>

          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

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<PAGE>

     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.

                                       21

<PAGE>

                                   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%

                                       22

<PAGE>

                                   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.

          6.2 Change-of-Form Elections and Additional Deferral Elections

          Any Participant who has made elections under Section 6.1
      with respect to Plan Year Accounts may elect at least one
     year prior to the Payment Commencement Date with respect to such 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 a 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

                                       23

<PAGE>

     to Plan Year Accounts at least one year prior to the applicable Payment
     Commencement Date for such accounts.

          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 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 as modified by any subsequent
     Change-of-Form Election under Section 6.2. 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 Hardships

          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 be limited to a severe financial
     hardship to the Participant resulting from a sudden and unexpected illness
     or accident of the Participant or of 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 circumstances that will constitute an unforeseeable
     emergency will depend upon the facts of each case, but, in any case,
     payment may not be

                                       24

<PAGE>

     made to the extent that such hardship is or may be relieved: (i) through
     reimbursement or compensation by available insurance or otherwise or (ii)
     by liquidation of the Participant's assets, to the extent the liquidation
     of such assets would not itself cause severe financial hardship.

          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 457 of the Code and
     the regulations thereunder.

          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
     will cease.

          6.5 Termination of Employment

          In the event of the termination of the employment of a Participant
     with the Company and any parent, subsidiary or affiliate for any reason,
     other than Retirement or death, 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 on the Valuation Date
     immediately following the termination date. 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.

          6.6 Taxes

          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

                                       25

<PAGE>

     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

          Notwithstanding any provision contained in the Plan to the contrary,
     the Committee may, in its sole discretion, accelerate the distribution in a
     lump sum of the Value of all Participant Accounts on the date of a Change
     of Control. Such payment shall be made by the Company, to the extent
     practicable, on the date of such Change of Control.

                                       26

<PAGE>

                                   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.

                                       27

<PAGE>

                                    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

                                       28

<PAGE>

     to the Plan provisions on which the decision is based. The decision of the
     Committee shall be final and binding on all parties.

                                       29

<PAGE>

                                   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.

                                       30

<PAGE>

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.

                                       31

<PAGE>

                                   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.

     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. On
termination of the Plan, the Committee may (but shall not be required to) direct
the immediate payment of all benefits under the Plan by the Company employing
each respective Participant.

     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, an immediate payout of all Plan benefits
on termination of the Plan, 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.

                                       32

<PAGE>

                                  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(S)
1.83-3(e); and, except in the case of a Change of 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, the Company, in its sole discretion, may establish one or more
grantor trusts described in Treasury Regulations(S)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 of Control, the Company shall, subject to the
restrictions in this paragraph and in Section 11.1 , 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 of Control occurs, of the benefits to which
Participants (or their beneficiaries) would be entitled pursuant to the terms of
the

                                       33

<PAGE>

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.

                                       34

<PAGE>

                                   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.

                                       35

<PAGE>

                                  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.

                                  *     *      *

                                       36

<PAGE>

                                    EXHIBIT A

                         Progress Energy Carolinas, Inc.

                      Progress Energy Service Company, LLC

                         Progress Energy Ventures, Inc.

                          Progress Energy Florida, Inc.

                          Progress Telecom Corporation

              Progress Fuels Corporation (corporate employees only)

                                       37