<PAGE>

                                                                     EXHIBIT 4.3








                               CLECO CORPORATION

                           DEFERRED COMPENSATION PLAN
<PAGE>

                               CLECO CORPORATION
                           DEFERRED COMPENSATION PLAN

                                     INDEX
<TABLE>
<CAPTION>
                                                                                  PAGE
<S>                                                                               <C>

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

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

ARTICLE III - ELIGIBILITY AND PARTICIPATION....................................    4

ARTICLE IV - DEFERRALS.........................................................    4
 Deferral of Compensation, Bonus or Fees.......................................    4
 Deferral of Excess 401(k) Contributions.......................................    5
 Deferral of Option Gain.......................................................    6
 Short Term Deferrals..........................................................    6

ARTICLE V - COMPANY CONTRIBUTIONS..............................................    6
 Company Contributions.........................................................    6
 Matching Contributions........................................................    6
 Vesting.......................................................................    7

ARTICLE VI - MAINTENANCE AND INVESTMENT OF DEFERRED BENEFIT ACCOUNTS...........    7
 Establishment of Accounts.....................................................    7
 Status of Accounts............................................................    7
 Investment Policy.............................................................    7
 Deferral of Fees..............................................................    8
 Option Gain...................................................................    8
 Matching Contributions........................................................    8
 Accounting....................................................................    9
 Valuation Notice..............................................................    9
 No Rights as a Shareholder....................................................    9

ARTICLE VII - RETIREMENT BENEFITS..............................................    9
 Form of Retirement Benefit....................................................    9
 Amount of Retirement Benefits.................................................   10
 Time of Payment...............................................................   10
 Cash Out of Small Benefits....................................................   10
 Modification of Schedule A....................................................   10
 Manner of Payment.............................................................   11
</TABLE>

                                       i
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                              <C>
ARTICLE VIII - DEATH BENEFITS..................................................   11
 Beneficiary Designation.......................................................   11
 Participant's Death Before Benefit Commencement Date..........................   11
 Participant's Death After Benefit Commencement Date...........................   11
 Death of Beneficiary..........................................................   11
 Discretionary Death Benefit...................................................   11
 Single-Sum Payment............................................................   11
 Manner of Payment.............................................................   12

ARTICLE IX - SHORT TERM DEFERRALS; HARDSHIP WITHDRAWALS; OTHER DISTRIBUTIONS...   12
 Short Term Deferrals..........................................................   12
 Hardship Withdrawal...........................................................   12
 Benefits Payable on Termination for Cause.....................................   13
 Early Payments................................................................   14
 Change in Control; Business Transaction.......................................   14
 Disability....................................................................   14

ARTICLE X - PLAN ADMINISTRATION................................................   15
 Powers........................................................................   15
 Payments......................................................................   15
 Delegation of Administrative Authority........................................   15

ARTICLE XI - PARTICIPANTS' RIGHTS..............................................   15
 Spendthrift Provision.........................................................   15
 No Continued Employment.......................................................   16
 Offset........................................................................   16
 Obligation for Benefit Payments...............................................   16
 Taxes.........................................................................   16
 Company's Protection..........................................................   16

ARTICLE XII - MISCELLANEOUS....................................................   16
 Termination of Plan...........................................................   16
 Funding.......................................................................   17
 Inurement.....................................................................   17
 No Effect on Other Benefits...................................................   17
 Amendment and Modification....................................................   17
 Governing Law.................................................................   17
</TABLE>


                                      ii
<PAGE>

                               CLECO CORPORATION
                           DEFERRED COMPENSATION PLAN


     Cleco Corporation, a corporation organized and existing under the laws of
the State of Louisiana (the "COMPANY"), hereby establishes the Cleco Corporation
Deferred Compensation Plan (the "PLAN"), effective as of August 1, 2000 (the
"EFFECTIVE DATE").  This Plan is intended to incorporate the Cleco Corporation
Deferred Compensation Plan for Directors, as amended and restated, effective
April 24, 1998, and that certain deferred compensation agreement between the
Company and Gregory L. Nesbitt, dated December 27, 1999.

                                   ARTICLE I
                                    PURPOSE

     The Plan is intended to be an unfunded deferred compensation arrangement
for the benefit of certain directors and key management employees of Cleco
Corporation and its subsidiaries or affiliates, within the meaning of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").  As such,
this Plan is not intended to constitute an employee benefit plan under ERISA,
which is subject to the provisions of Parts 2, 3 and 4 of Title I of ERISA.  In
accordance with such intent, any obligation of the Company to pay benefits
hereunder shall be deemed to be an unsecured promise, and any right of a
Participant or Beneficiary to enforce such obligation shall be solely as a
general creditor of the Company.  The Plan is not intended to constitute a
qualified employee benefit plan within the meaning of Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "CODE").

                                  ARTICLE II
                                  DEFINITIONS


     2.1  ACCOUNTS or ACCOUNT means the aggregate of a Participant's Deferred
Benefit Account, Directors' Predecessor Account and/or Nesbitt Deferred Benefit
Account, as the case may be.

     2.2  AFFILIATE means any corporation or other form of entity of which the
Company owns, directly or indirectly, 50% or more of the total combined voting
power of all classes of stock or other equity interests, provided that such
entity is designated by the Committee as a participating entity hereunder.  The
initial Affiliates designated as participating entities hereunder are set forth
on Exhibit A hereto.

     2.3  BENEFICIARY means the person, persons, entity or entities designated
by a Participant to receive death benefits hereunder.

     2.4  BENEFIT COMMENCEMENT DATE means the date on which the payment of a
Participant's retirement benefit is paid or first commences.  Such date shall be
designated by each Participant on Schedule A hereto.

     2.5  BOARD or BOARD OF DIRECTORS means the Board of Directors of the
Company.
<PAGE>

     2.6   BONUS means an amount payable to a Participant as an annual cash
bonus under a separate plan, policy or program maintained by the Company or an
Affiliate, including, but not limited to, the Annual Incentive Compensation
Plan, provided such plan, policy or program is designated by the Committee as a
source for deferrals hereunder.

     2.7   BUSINESS TRANSACTION means and shall be deemed to occur in accordance
with Section 12.6 of the Cleco Corporation 2000 Long-Term Incentive Compensation
Plan, as amended from time to time.

     2.8   CHANGE IN CONTROL means and shall be deemed to occur in accordance
with Section 2.4 of the Cleco Corporation 2000 Long-Term Incentive Compensation
Plan, as amended from time to time.

     2.9   COMMITTEE means the members of the Compensation Committee of the
Board of Directors of the Company.

     2.10  COMPANY CONTRIBUTIONS means the amount credited to a Participant's
Deferred Benefit Account, if any, in accordance with Section 5.1 hereof.

     2.11  COMPANY STOCK means $2.00 par value voting common stock issued by the
Company.

     2.12  COMPENSATION means the base salary paid by the Company or an
Affiliate to a Participant for services rendered during a calendar year, but
determined before reduction for compensation deferred pursuant to this Plan or
any other plan maintained by the Company or an Affiliate. For this purpose, (a)
COMPENSATION shall not include the amount of any long-term disability benefit or
any form of retirement or deferred compensation payment distributed from a plan
or arrangement sponsored by the Company, and (b) COMPENSATION may include such
additional items of remuneration as may be designated by the Committee, from
time to time.

     2.13   DEFERRED BENEFIT ACCOUNT means an account maintained on the books of
the Company with respect to each Participant hereunder.

     2.14   DETERMINATION DATE means the Annual Determination Date and such
other dates as may be designated, from time to time, by the Committee. ANNUAL
DETERMINATION DATE means the last day of the Plan Year. The designation of such
Determination Dates need not be uniform as to all Deferred Benefit Accounts
maintained hereunder.

     2.15   DISABLED or DISABILITY means that an Employee is actually receiving
benefits under the Company's (or an Affiliate's) separate long-term disability
plan or that an Eligible Director would be receiving benefits under such plan,
if such director were a participant therein.  The Committee shall determine
whether a Participant or Eligible Director is or becomes Disabled.

                                       2
<PAGE>

     2.16  DIRECTORS' PREDECESSOR PLAN means the Cleco Corporation Deferred
Compensation Plan for Directors, most recently amended and restated effective as
of April 24, 1998.

     2.17  ELIGIBLE DIRECTOR means an individual, other than an employee, who
serves as a member of the Board of Directors of the Company or the board of
directors or managers of an Affiliate, provided that such Affiliate is
designated by the Committee as a participating Affiliate hereunder.

     2.18  FEES means the annual compensation paid by the Company or an
Affiliate to each Eligible Director for his or her service as a member of the
Board of Directors (or the board of directors or managers of an Affiliate) and
for service on certain committees thereof, whether paid in the form of cash or
Company Stock.

     2.19  FINANCIAL HARDSHIP means the occurrence of a severe financial
hardship resulting from extraordinary and unforeseeable circumstances beyond the
control of a Participant.

     2.20  OPTION GAIN means gain realized on the exercise of a nonqualified
option granted under the Cleco Corporation 2000 Long-Term Incentive Compensation
Plan and/or the 1990 Long-Term Incentive Compensation Plan, most recently
amended and restated as of April 24, 1998, as the same may be further amended
from time to time, or such other incentive compensation granted under such
plans, when designated by the Committee.

     2.21  PARTICIPANT means an executive officer, manager or other key employee
of the Company or an Eligible Director, each of whom is designated in accordance
with Article III hereof.

     2.22  PLAN means this Deferred Compensation Plan, as amended from time to
time.

     2.23  PLAN YEAR means the 12-month period beginning each January 1st and
ending each December 31st; provided, however, that the first Plan Year shall be
a five-month period commencing as of August 1, 2000, and ending as of December
31, 2000.

     2.24  401(k) SAVINGS AND INVESTMENT PLAN means a qualified employee benefit
plan maintained by Cleco Utility Group Inc., most recently amended and restated
in its entirety as of January 1, 1994, as the same may be further amended and/or
restated from time to time.  The terms "PRE-TAX CONTRIBUTION" and "MATCHING
CONTRIBUTION" shall have the meanings ascribed to them in such plan.

     2.25  SCHEDULE A means one or more written schedules which provide for (a)
the deferral of a Participant's Compensation, Bonus or Excess 401(k)
Contributions or Fees payable to an Eligible Director, (b) the designation of a
Benefit Commencement Date, and/or (c) the election of the form of benefit
payment.  The terms of any such Schedule A are incorporated in this Plan by this
reference.

                                       3
<PAGE>

     2.26  SHORT TERM DEFERRAL means the deferral of a Participant's
Compensation, Bonus or Fees for a designated period of not less than 24 months,
measured from the last day of the Plan Year with respect to which such
Compensation, Bonus or Fees is payable.

     2.27  OTHER DEFINITIONS.  The following terms shall have the meanings
ascribed below: "ADVERSE DETERMINATION" is defined in Section 9.4 hereof;
"CAUSE" is defined in Section 9.3 hereof; "EXCESS 401(K) CONTRIBUTIONS" is
defined in Section 4.2 hereof; "MATCHING CONTRIBUTIONS" is defined in Section
5.2 hereof; "DIRECTORS' PREDECESSOR BENEFIT ACCOUNT" and "NESBITT DEFERRED
BENEFIT ACCOUNT" are defined in Section 6.1 hereof.

                                  ARTICLE III
                         ELIGIBILITY AND PARTICIPATION


     Participants hereunder shall be (a) those persons listed on Exhibit A
hereto, (b) Eligible Directors of the Company, (c) executive officers, managers
and other key employees of the Company or an Affiliate, who may be designated
individually or by groups or categories, in the discretion of the Committee, and
(d) Eligible Directors of an Affiliate, provided the Committee has designated
such Affiliate as a participating Affiliate hereunder.  The Committee shall
notify each executive officer, manager or other key employee or Eligible
Director of his or her eligibility to participate in this Plan.  Except as to
those persons listed on Exhibit B hereto, participation shall commence upon the
execution of a Schedule A or similar agreement as provided herein.


                                  ARTICLE IV
                                   DEFERRALS


     4.1  DEFERRAL OF COMPENSATION, BONUS OR FEES. A Participant shall elect to
defer his or her Compensation, Bonus or Fees, as the case may be:

     a.   During the 30-day period immediately following receipt of initial
          notice from the Committee in accordance with Article III hereof, such
          election shall be effective with respect to Compensation, Bonus, or
          Fees payable with respect to services performed after such election is
          received and accepted by the Committee;

     b.   At least 30 days prior to the first day of each Plan Year (or such
          shorter period permitted by the Committee); such election shall be
          effective with respect to Compensation, Bonus or Fees payable for
          services rendered during such Plan Year; or

     c.   During the 30-day period immediately following the Effective Date with
          respect to the initial Plan Year; such election shall be effective
          with respect to Compensation or Fees payable with respect to services
          performed after such election is received and accepted by the
          Committee and with respect to any Bonus payable for service performed
          during such initial Plan Year.

                                       4
<PAGE>

An election to defer Compensation, Bonus or Fees hereunder shall be made, in
writing, and shall be irrevocable during the Plan Year with respect to which the
election relates or such longer period as may be designated by the Committee.
An election hereunder shall remain in effect until it is revoked or modified,
except as to the first Plan Year or Option Gain.

     The Committee, in its discretion, may limit the amount of Compensation,
Bonus or Fees subject to deferral hereunder, may prescribe a minimum deferral
amount, may designate additional forms of remuneration for deferral under the
Plan, may provide for the administration of multiple Benefit Commencement Dates
with respect to deferrals hereunder or adopt such additional procedures as the
Committee deems necessary or appropriate.  The Committee shall notify all
affected Participants, in writing, of any such limitations or additional forms
of Compensation eligible for deferral.  Any such procedures, conditions,
limitations or designations shall be effective as of the January 1st which
coincides with or immediately follows the date on which notice is provided to
each Participant hereunder or at such other time as the Committee may designate.

     4.2  DEFERRAL OF EXCESS 401(k) CONTRIBUTIONS. Effective as of January 1,
2001, or such later date as may be designated by the Committee, the Company
shall defer certain amounts contributed hereunder, pending contribution to the
401(k) Savings and Investment Plan ("EXCESS 401(k) CONTRIBUTIONS"), as set forth
below:

     a.   Prior to the first day of each Plan Year, each Participant who is also
          a participant in the 401(k) Savings and Investment Plan may designate
          on a written deferral election applicable to the 401(k) Savings and
          Investment Plan the maximum amount to be contributed as a Pre-Tax
          Contribution thereunder and elect to make an Excess 401(k)
          Contribution to this Plan on Schedule A hereto.  Both such elections
          shall be irrevocable with respect to such Plan Year.

     b.   During each Plan Year, Excess 401(k) Contributions shall be
          provisionally credited to such Participant's Deferred Benefit Account.

     c.   The Committee may direct that a Matching Contribution be provisionally
          credited to such Participant's Deferred Benefit Account, the amount of
          such contribution to be determined in accordance with the terms of the
          401(k) Savings and Investment Plan and the Participant's elections and
          contributions thereunder.

     d.   As of the end of each Plan Year, the Committee shall determine the
          principal amount of such provisional contributions to be remitted to
          the trustee of the 401(k) Savings and Investment Plan as a Pre-Tax
          Contribution thereunder (including the related Matching Contribution,
          if any) and the amount to be finally characterized as an Excess 401(k)
          Contribution hereunder (including the related Matching Contributions,
          if any).  Such remission shall be made not later than March 15th of
          the Plan Year immediately succeeding the Plan Year in which such
          contributions were made to this Plan.

                                       5
<PAGE>

     4.3  DEFERRAL OF OPTION GAIN.   Effective as of January 1, 2001, or such
later date as may be designated by the Committee, a Participant may elect to
defer Option Gain, subject to the approval of the Committee, as follows:

     a.   A Participant shall provide a written election to the Committee, which
          election shall (i) direct the deferral of Option Gain, (ii) designate
          a specific number of options with a designated option price to be
          subject to such deferral, and (iii) specify an exercise date.  The
          terms of such election shall be irrevocable and shall be received and
          accepted by the Committee not later than six months prior to the
          designated exercise date.

     b.   As of the exercise date, the affected Participant shall exercise the
          number and kind of options designated in his or her election.

     c.   In lieu of the delivery of shares of Common Stock to the Participant
          as of the exercise date, Option Gain shall be credited to the affected
          Participant's Deferred Benefit Account as of such date.

     4.4  SHORT TERM DEFERRALS.  A Participant may designate all or a portion of
any Compensation, Bonus or Fee deferred hereunder as a Short Term Deferral,
subject to the following rules:

     a.   A Participant's designation of Compensation, Bonus or Fee defined
          hereunder as a Short Term Deferral shall be irrevocable; and

     b.   A Participant shall designate the deferral period with respect to such
          amount on Schedule A hereto, which period shall not be less than 24
          months, measured from the last day of the Plan Year with respect to
          the initial year in which Compensation, Bonus or Fees is otherwise
          payable; the designation of such deferral period shall be irrevocable.

                                   ARTICLE V
                             COMPANY CONTRIBUTIONS


     5.1  COMPANY CONTRIBUTIONS.  The Committee, in its sole discretion, may
credit an additional amount to the Deferred Benefit Account of any Participant
hereunder.  Any such contribution need not be uniform with respect to all
Participants, but may be made with respect to any Participant or group of
Participants designated by the Committee.

     5.2  MATCHING CONTRIBUTIONS.  The Company shall credit to the Deferred
Benefit Account of any affected Participant hereunder the amount of any Matching
Contribution attributable to an Excess 401(k) Contribution hereunder, determined
as if such amount was made as a Pre-Tax Contribution under the 401(k) Savings
and Investment Plan (a "MATCHING CONTRIBUTION").  Any such contribution shall be
treated as a provisional contribution and may be transferred to the 401(k)
Savings and Investment Plan in accordance with Section 4.2 hereof.

                                       6
<PAGE>

     5.3  VESTING.  The Committee, in its discretion, may establish a vesting
schedule with respect to any Company Contribution hereunder (including earnings,
gains or losses credited to such amount) and may impose a vesting schedule with
respect to any Matching Contribution hereunder in accordance with the terms of
the 401(k) Savings and Investment Plan.  The Committee shall provide written
notice of any such schedule to each affected Participant; any such schedule need
not be uniform with respect to all Participants or each Company Contribution
hereunder.

                                  ARTICLE VI
            MAINTENANCE AND INVESTMENT OF DEFERRED BENEFIT ACCOUNTS


     6.1  ESTABLISHMENT OF ACCOUNTS.   The Company shall establish and maintain
one or more of the following accounts for the benefit of each Participant
hereunder:

     a.   A "DEFERRED BENEFIT ACCOUNT," which shall be credited with a
          Participant's Compensation, Bonus or Fees deferred hereunder and
          Matching Contributions or Company Contributions made hereunder. A
          Deferred Benefit Account may be administered as one or more
          subaccounts to facilitate (i) the maintenance of any vesting schedule
          imposed hereunder, (ii) the administration of Short Term Deferrals,
          (iii) a particular method of crediting income, gain or losses, or (iv)
          for such other purpose as the Committee may deem necessary or
          appropriate;

     b.   A "DIRECTORS' PREDECESSOR ACCOUNT," which shall be credited with each
          Eligible Director's balance in the Directors' Predecessor Plan,
          determined as of the Effective Date (or such later date designated by
          the Committee).  No additional deferrals shall be credited to such
          account; and/or

     c.   The "NESBITT DEFERRED BENEFIT ACCOUNT," which shall be credited with
          amounts deferred under that deferred compensation agreement between
          the Company and Gregory L. Nesbitt as of the Effective Date.  No
          additional deferrals shall be credited to such account. Creation of
          the Nesbitt Deferred Benefit Account hereunder shall be deemed to
          extinguish the Company's obligation under the separate deferred
          compensation agreement between Gregory L. Nesbitt and the Company,
          dated December 27, 1999.

     6.2  STATUS OF ACCOUNTS.  Accounts established hereunder shall be a
bookkeeping entry only.  The establishment and maintenance of any such account
shall not be deemed to create a trust or other form of fiduciary relationship
between the Company (or an Affiliate) and any Participant or Beneficiary or
otherwise create, for the benefit of any Participant or Beneficiary, an
ownership interest in or expectation of any specific asset of the Company (or of
an Affiliate).

     6.3  INVESTMENT POLICY.  Except as provided in Sections 6.4, 6.5 and 6.6
hereof, the Committee shall establish an investment policy with respect to
amounts credited to Accounts maintained hereunder.  Such policy may provide for
the aggregation and investment of all Accounts, for the investment of such
accounts in accordance with the specifications of each

                                       7
<PAGE>

Participant or for a combination thereof. Such determination shall be made in
the sole discretion of the Committee and need not be uniform as to all Accounts
maintained hereunder.

     If the Committee determines that the Accounts shall be aggregated for
investment purposes, the Committee, in its discretion, shall direct the manner
in which gain or loss is determined hereunder.

     If the Committee permits Participants to provide investment specifications
with respect to Accounts hereunder, such specifications shall be deemed to be
advisory only and shall not bind the Company, an Affiliate or the Committee to
acquire any specific property or to invest the assets of any trust established
in connection with this Plan in accordance therewith. Such specifications shall
relate to investment in the types of property, including open or closed end
mutual funds, common or collective funds or other pooled or collective accounts,
as may be designated, from time to time, by the Committee (or its designee).
The Committee (or its designee) shall adopt rules governing investment
specifications hereunder, including, without limitation (a) the increments in
which such specifications shall be expressed, (b) the times at which changes can
be made, (c) distinctions between the investment of prospective contributions
and existing account balances, and (d) such other procedures as the Committee
may determine are necessary or appropriate.  Such rules need not be uniform as
to all Participants and may be expressed in the form of written procedures or
informally, as administrative practices.

     If a Participant ceases to be an employee or Eligible Director of the
Company or an Affiliate for any reason, the Committee, in its sole discretion,
may direct that gain or loss credited to such Participant's Accounts be
determined with respect to one or more investments designated by the Committee
or may permit such Participant or Beneficiary to continue to specify the
investments in which his or her Accounts are deemed to be invested.  Such
determination shall be made in the sole discretion of the Committee and need not
be uniform as to all Participants.

     6.4  DEFERRAL OF FEES.  Notwithstanding any provision of this Plan to the
contrary, if an Eligible Director elects to receive his or her Fees in the form
of Company Stock or his or her Fees deferred under the Directors' Predecessor
Plan were deferred in the form of Company Stock, then the Committee may direct
that earnings, gains or losses attributable to such Fees shall be determined as
if such deferrals remained invested in Company Stock at all times during the
deferral period.

     6.5  OPTION GAIN.  Notwithstanding any provision of this Plan to the
contrary, if a Participant elects to defer Option Gain hereunder, the Committee
may direct that earnings, gains or losses attributable to such Option Gain shall
be determined as if such deferral remained invested in Company Stock at all
times during the deferral period.

     6.6  MATCHING CONTRIBUTIONS.  Notwithstanding any provision of this Plan to
the contrary, if all or any portion of a Participant's Deferred Benefit Account
consists of Matching Contributions, the Committee may direct that earnings,
gains or losses attributable to such portion shall be determined as if such
portion remained invested in Company Stock.

                                       8
<PAGE>

     6.7  ACCOUNTING.  As of each Determination Date, a Participant's Accounts
shall be adjusted as follows:

     a.   There shall be credited to each Deferred Benefit Account the amount of
          any Compensation, Bonus, Excess 401(k) Contributions (including
          provisional contributions) deferred not later than 30 days following
          the applicable payment date.

     b.   Any Matching Contributions (including provisional contributions) or
          Company Contributions since the immediately preceding Determination
          Date shall be credited to each affected Participant's Deferred Benefit
          Account.

     c.   Interest, gain or loss, including, without limitation, dividend
          equivalent units, shall be credited (or charged) to the Participant's
          Accounts for the period since the immediately preceding Determination
          Date.

     d.   The Participant's accounts shall be reduced by any payment or other
          form of distribution or transfer (including the transfer of
          provisional contributions) made since the immediately preceding
          Determination Date.

     6.8  VALUATION NOTICE.  At least as frequently as each Annual Determination
Date, the Committee shall furnish each Participant with a valuation notice which
includes the amounts credited to the Participant's Accounts and the earnings,
gains or losses allocated to such Accounts since the immediately preceding
Determination Date.

     6.9  NO RIGHTS AS A SHAREHOLDER.  Prior to the distribution of Company
Stock hereunder, a Participant shall have no rights as a shareholder with
respect to amounts deemed invested in such stock.

                                  ARTICLE VII
                              RETIREMENT BENEFITS

     7.1  FORM OF RETIREMENT BENEFIT.  A retirement benefit shall be payable in
accordance with the Participant's election on Schedule A in the form of:

     a.   Substantially equal annual installment payments for a period
          designated by such Participant, but not in excess of 15 consecutive
          years; or

     b.   A single-sum payment.

If no election is received by the Committee or if a Participant's election
cannot be administered, such Participant's retirement benefit shall be
distributed in five substantially equal annual installment payments.

                                       9
<PAGE>

     7.2  AMOUNT OF RETIREMENT BENEFITS.  The amount of a Participant's
retirement benefit hereunder shall equal the amount credited to such
Participant's Accounts, determined in accordance with the following rules:

     a.   If such benefit is paid in the form of a single-sum, such benefit
          shall equal the amount credited to such Participant's Accounts as of
          the Determination Date that corresponds to or immediately follows such
          Participant's Benefit Commencement Date.  If a Participant has elected
          to defer his or her Bonus with respect to the year in which his or her
          Benefit Commencement Date occurs, the amount of such Bonus shall be
          paid in the form of a single-sum as of the Determination Date that
          coincides with or immediately follows the date on which the Bonus is
          credited to the Participant's Deferred Benefit Account hereunder.

     b.   If such benefit is paid in the form of installments, the amount of
          each annual installment shall equal the value of the Participant's
          Accounts as of the Annual Determination Date that coincides with or
          immediately precedes the payment date multiplied by a fraction (i) the
          numerator of which is one, and (ii) the denominator of which is the
          number of annual installments remaining to be paid pursuant to the
          Participant's election.  During the installment period, the
          Participant's Accounts shall be credited with income, gain or loss in
          accordance with the provisions of Article VI hereof.  To facilitate
          installment distributions hereunder, each Participant's investments
          (if any) shall be deemed liquidated on a pro rata basis, unless the
          Committee provides otherwise.

     7.3  TIME OF PAYMENT.  A Participant's retirement benefit shall be payable
(or payments shall commence) as of the first day of the second calendar month
immediately following such Participant's Benefit Commencement Date.  If a
Participant's retirement benefit is payable in the form of annual installments,
each remaining installment shall be paid as of February 1st.

     7.4  CASH OUT OF SMALL BENEFITS.  If the value of a Participant's Accounts
is $25,000 or less as of the date on which his or her employment with the
Company and all Affiliates ceases or as of his or her Benefit Commencement Date,
then notwithstanding any provision of this Plan to the contrary, the Committee
shall distribute such amount to the Participant in the form of an immediate
single-sum payment as of such date.  No additional benefit shall be payable with
respect to such Accounts.

     7.5  MODIFICATION OF SCHEDULE A.  The portion of each Schedule A as to the
time and manner of payment shall be deemed to apply to the aggregate amount
credited to a Participant's Accounts, from time to time.  A Participant shall be
entitled to modify his or her Schedule A, from time to time, with respect to the
time or manner of payment thereunder; provided, however, that any such
modification shall be effective only if received and accepted by the Committee
at least 18 months prior to his or her termination of employment with the
Company and all Affiliates or 18 months prior to his or her Benefit Commencement
Date, if earlier.

                                       10
<PAGE>

     7.6  MANNER OF PAYMENT.  If the Committee directs that a Participant's
deferrals hereunder shall be deemed invested in Company Stock in accordance with
the provisions of Section 6.4 or 6.5 hereof, then any distribution with respect
to such deferrals shall be made in the form of Company Stock, with cash
distributed in lieu of a fractional share.

                                 ARTICLE VIII
                                DEATH BENEFITS

     8.1  BENEFICIARY DESIGNATION.  A Participant shall be entitled to designate
one or more Beneficiaries on forms provided by the Committee.   Any such
designation may be modified by delivery of a new designation to the Committee.
Any designation or modification shall be effective upon its receipt and
acceptance by the Committee.  If a Participant fails to designate a Beneficiary
or if a Participant's designation cannot be administered, the Participant's
estate shall be deemed his or her Beneficiary hereunder.

     8.2  PARTICIPANT'S DEATH BEFORE BENEFIT COMMENCEMENT DATE.  If a
Participant dies before his or her Benefit Commencement Date, the Participant's
Beneficiary shall be paid a death benefit in the form of five substantially
equal installment payments, commencing as soon as practicable after the date of
the Participant's death.  The amount of each annual installment shall equal the
value of the deceased Participant's Accounts as of the Annual Determination Date
immediately preceding payment, multiplied by a fraction (a) the numerator of
which is one, and (b) the denominator of which is the number of annual
installments remaining to be paid.  During the installment period, the deceased
Participant's Accounts shall be credited with income, gain or loss in accordance
with the provisions of Article VI hereof.  To facilitate payment hereunder, such
Beneficiary's individual investments (if any) shall be deemed liquidated on a
pro rata basis, unless the Committee provides otherwise.

     8.3  PARTICIPANT'S DEATH AFTER BENEFIT COMMENCEMENT DATE.  If a
Participant dies after his or her Benefit Commencement Date, the Company shall
pay to the Participant's Beneficiary the remaining benefit, if any, that would
otherwise be payable to the deceased Participant, determined in accordance with
the terms of his or her Schedule A.

     8.4  DEATH OF BENEFICIARY.  In the event of the death of a Beneficiary, the
remaining benefit to which such Beneficiary was entitled at the time of such
Beneficiary's death, if any, shall be payable to the beneficiary or
beneficiaries designated in writing, by such Beneficiary on a form submitted by
such Beneficiary to the Committee (or such benefits shall be payable to the
Beneficiary's estate if the Beneficiary fails to designate a beneficiary or
beneficiaries).

     8.5  DISCRETIONARY DEATH BENEFIT.  The Committee, in its discretion, may
increase the amount of any death benefit payable in accordance with Section 8.2
or 8.3 hereof.  Such increase, if any, shall be aggregated with amounts
otherwise credited to the deceased Participant's Accounts and shall be payable
in accordance with Section 8.2 or 8.3, as the case may be.  The amount of any
such increase need not be uniform as to all Participants hereunder.

     8.6  SINGLE-SUM PAYMENT.  If the value of a death benefit payable hereunder
is $25,000 or less, then notwithstanding any provision of this Plan to the
contrary, the Committee

                                       11
<PAGE>

shall distribute such amount to the Participant's Beneficiary or Beneficiaries
in the form of a single-sum payment, and no additional benefit shall be payable
under this Plan with respect to such Participant.

     8.7  MANNER OF PAYMENT.  If the Committee directs that an amount deferred
hereunder be deemed invested in Company Stock during the period of such deferral
in accordance with Section 6.4 or 6.5 hereof, amounts distributable with respect
to such deferral shall be paid in the form of Company Stock, with cash
distributed in lieu of a fractional share.

                                  ARTICLE IX
                        SHORT TERM DEFERRALS; HARDSHIP
                       WITHDRAWALS; OTHER DISTRIBUTIONS


     9.1  SHORT TERM DEFERRALS.   Notwithstanding any provision of this Plan to
the contrary, the amount of a Participant's Short Term Deferral (as adjusted for
income, gain or loss) shall be distributed in the form of a single-sum payment
as of the Determination Date that coincides with or immediately follows the
Annual Distribution Date designated by such Participant on his or her Schedule
A.

     9.2  HARDSHIP WITHDRAWAL.  If a Participant experiences a Financial
Hardship, such Participant may request the Committee to approve the withdrawal
of all or a portion of his or her Accounts in the form of an immediate single-
sum payment, subject to the limitations set forth below.

     a.   A request for withdrawal shall be made, in writing, and shall set
          forth the circumstances surrounding the Financial Hardship.  As a
          condition of and part of such request, the Participant shall provide
          to the Committee his or her written representation that (i) the
          hardship cannot be relieved by insurance or other reimbursement
          reasonably available to the Participant, (ii) the hardship can only be
          relieved by liquidation of the Participant's assets and any such
          liquidation would itself result in severe damage or injury to the
          Participant, and (iii) the Participant has no reasonable borrowing
          capacity to relieve the hardship.  The Committee shall be entitled to
          request such additional information as may be reasonably required to
          determine whether a Financial Hardship exists and the amount of the
          hardship and to establish additional conditions precedent to the
          review or granting of a request for a withdrawal on account of a
          Financial Hardship.

     b.   If the Committee determines that a Financial Hardship exists, the
          Committee may authorize the immediate distribution of an amount
          required to meet the financial need created by such hardship,
          including any taxes payable on account of such distribution.

     c.   The amount of a withdrawal on account of a Financial Hardship shall
          reduce the amount credited to a Participant's Accounts, and the
          Participant's Accounts shall be reduced by an additional amount equal
          to 10% of the amount withdrawn.

                                       12
<PAGE>

     d.   The Committee shall require, as a condition of any withdrawal on
          account of a Financial Hardship, the termination of any deferral
          election as to any Compensation with respect to which services have
          not yet been performed.  In no event shall the affected Participant be
          entitled to enter into a new Schedule A until the January 1st
          immediately following the year in which such cessation of a deferral
          occurs.

     e.   The Committee shall establish such additional rules as may be
          reasonably required to administer the withdrawal of amounts under this
          Section 9.2.  Such rules may include, but shall not be limited to, the
          imposition of additional conditions precedent to the withdrawal, the
          determination of the amount of any benefit reduction, and the
          disposition of any terminated deferral election under Section 9.2d,
          hereof.  The determination by the Committee as to all matters
          pertaining to a Financial Hardship shall be final and binding upon all
          affected Participants and Beneficiaries.

     9.3  BENEFITS PAYABLE ON TERMINATION FOR CAUSE.  Notwithstanding any other
provision of this Plan to the contrary, if a Participant's employment with the
Company or any Affiliate is terminated for Cause before his or her Benefit
Commence Date, the Participant's participation in this Plan shall be terminated
and the Participant shall not be entitled to any form of benefit hereunder;
provided, however, that the Participant (or the Participant's Beneficiary) shall
be paid the principal amount of such Participant's Compensation, Bonus, or Fees
deferred hereunder (but not Matching Contributions, Company Contributions or the
earnings or losses thereon), as soon as practicable after such termination.

     For purposes of this Section 9.3, the term "CAUSE" means that a Participant
has:

     a.   Committed an intentional act of fraud, embezzlement or theft in the
          course of his or her employment or otherwise engaged in any
          intentional misconduct which is materially injurious to the Company's
          (or an Affiliate's) financial condition or business reputation;

     b.   Committed intentional damage to the property of the Company (or an
          Affiliate) or committed intentional wrongful disclosure of
          confidential information which is materially injurious to the
          Company's (or an Affiliate's) financial condition or business
          reputation; or

     c.   Intentionally refused to perform the material duties of his or her
          position.

No act or failure to act on the part of the Participant will be deemed
"intentional" if it was due primarily to an error in judgment or negligence, but
will be deemed "intentional" only if done or omitted to be done by a Participant
not in good faith and without reasonable belief that his or her action or
omission was in the best interest of the Company (or an Affiliate).  The
Committee (or its designee) shall determine whether Cause has occurred
hereunder.

                                       13
<PAGE>

     9.4  EARLY PAYMENTS.  Notwithstanding any provision of this Plan to the
contrary, the Committee may direct the distribution to any Participant (or
Beneficiary) in the form of an immediate single-sum payment all or any portion
of the amount then credited to a Participant's affected Deferred Benefit
Account, if an Adverse Determination is made with respect to such Participant.
For this purpose, the term "ADVERSE DETERMINATION" shall mean that, based upon
Federal tax or revenue law, a published or private ruling or similar
announcement issued by the Internal Revenue Service, a regulation issued by the
Secretary of the Treasury, a decision by a court of competent jurisdiction, a
closing agreement made under Section 7121 of the Code that is approved by the
Internal Revenue Service and involves such Participant or a determination of
counsel, a Participant has or will recognize income for Federal income tax
purposes with respect to any amount that is or will be payable under this Plan
before it is otherwise to be paid hereunder.

     Further, notwithstanding any provision of the Plan to the contrary, the
Committee may direct the trustee of any trust established pursuant to Section
12.2 hereof to distribute to any Participant in the form of an immediate single-
sum payment all or any portion of the amount then credited to a Participant's
Deferred Benefit Account based upon a change in ERISA, a published advisory
opinion or similar announcement issued by the Department of Labor, a regulation
issued by the Secretary of Labor, a decision by a court of competent
jurisdiction, an agreement between such Participant and the Department of Labor
or similar agency or an opinion of counsel, such Participant is not a
"management" or "highly compensated" employee or this Plan is not an "unfunded"
plan within the meaning of ERISA.

     9.5  CHANGE IN CONTROL; BUSINESS TRANSACTION.  Notwithstanding any
provision of this Plan to the contrary, upon the occurrence of a Change in
Control or a Business Transaction, the Committee shall provide each affected
Participant with written notice of the occurrence of such change or transaction.
Each affected Participant may request distribution of all or a portion of his or
her Accounts by providing written notice to the Committee, within 30 days of
receipt of notice of such event, which notice shall designate the amount to be
withdrawn; any such withdrawal shall be subject to the following rules and
limitations:

     a.   Such withdrawal shall be made not later than 30 days after notice is
          received by the Committee;

     b.   No more than one such withdrawal shall be permitted hereunder; and

     c.   At the time of such withdrawal, the Participant's Accounts shall be
          reduced by an additional amount equal to 10% of the withdrawal.

     9.6  DISABILITY.  If a Participant becomes Disabled, he or she shall be
entitled to request the withdrawal of all or a designated portion of his or her
Accounts by providing written notice to the Committee at any time after such
Disability commences.  The Committee shall distribute the affected portion of
such Participant's Accounts as soon as practicable after receipt of written
notice, subject to the following rules and limitations:

     a.   No more than two such withdrawals shall be permitted hereunder; and

                                       14
<PAGE>

     b.   At the time of each such withdrawal, the affected Participant's
          Accounts shall be reduced by an amount equal to 10% of the
          distribution.

                                   ARTICLE X
                              PLAN ADMINISTRATION


     10.1 POWERS.  This Plan and all matters related thereto shall be
administered by the Committee.  The Committee shall have the power and authority
to interpret the provisions of this Plan and shall determine all questions
arising under the Plan including, without limitation, all questions concerning
administration, eligibility, the determination of benefits hereunder, and the
interpretation of any form or other document related to this Plan.  In addition,
the Committee shall have the authority to prescribe, amend and rescind rules and
administrative procedures relating to the operation of this Plan, to instruct
any trustee as to the investment of any asset held for the purposes described in
Section 12.2, hereof, and to correct any defect, supply any omission or
reconcile any inconsistency in this Plan.

     Any determination by the Committee need not be uniform as to all or any
Participant hereunder.  Any such determination shall be conclusive and binding
on all persons.  The Committee shall engage the services of such independent
actuaries, accountants, attorneys and other administrative personnel as it deems
necessary to administer the Plan.

     10.2 PAYMENTS.  The Committee shall have the power and authority to
determine the time and amount of any distribution or withdrawal hereunder.  The
Committee shall direct the trustee of any trust established pursuant to Section
12.2, hereof, in writing, as to any such distribution or withdrawal.

     10.3 DELEGATION OF ADMINISTRATIVE AUTHORITY.  The Committee, in its sole
discretion, may delegate to the executive officers of the Company all or any
portion of the power and authority granted to it hereunder.  When acting in
accordance with such delegation (whether made orally or in writing) such
officers shall be deemed to possess the power and authority granted to the
Committee hereunder.

                                  ARTICLE XI
                             PARTICIPANTS' RIGHTS

     11.1 SPENDTHRIFT PROVISION.  Neither a Participant nor any other person
shall have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber any amount payable hereunder.  No amount payable
under this Plan shall, prior to actual payment, be subject to seizure or
sequestration for the payment of any debt, judgment, alimony or separate
maintenance owed by a Participant or any other person.  No amount payable under
this Plan shall be transferable by operation of law in the event of a
Participant's or other person's bankruptcy or insolvency.

                                       15
<PAGE>

     11.2 NO CONTINUED EMPLOYMENT.  No Participant shall have any right to
continue in the employ of the Company or an Affiliate for any period of time or
any right to continue his or her present or any other rate of compensation on
account of participation in this Plan.

     11.3 OFFSET.  If, at the time of any distribution hereunder, a Participant
or his or her Beneficiary is indebted to the Company or an Affiliate, then any
distribution to be made to the Participant, his or her Beneficiary or both, may,
at the discretion of the Committee, be reduced by the amount of such
indebtedness.

     11.4 OBLIGATION FOR BENEFIT PAYMENTS.  Notwithstanding any provision of
this Plan to the contrary, the payment of benefits under this Plan shall remain
the obligation of the Company or any such Affiliate.  In the event the Company
designates a third-party as the payor of the benefits and the assets of such
third-party are insufficient to meet the payment obligations of the Company
and/or with respect to any Participant who is an employee of an Affiliate, the
obligation of such Affiliate, the Company or Affiliate, as the case may be,
shall remain responsible for such deficiency.

     11.5 TAXES.  The Company or an Affiliate or any third-party payor shall
withhold from the payment benefits hereunder any amount required to be withheld
under applicable federal or state tax laws.

     11.6 COMPANY'S PROTECTION.  By execution of a Schedule A, each Participant
shall be deemed to have agreed to cooperate with the Company by furnishing any
and all information reasonably requested by the Committee in order to facilitate
the payment of benefits hereunder, including, without limitation, the taking of
such physical examinations as the Company or the Committee may deem necessary
and taking such other action as may reasonably be requested by the Company or
the Committee.  If a Participant refuses to cooperate, is uninsurable or is
insurable at other than standard rates, the Committee, in its sole discretion,
may determine that the Participant is ineligible to participate hereunder.  Upon
any such determination, the Participant shall be entitled to the return of the
principal amount of his or her deferrals, whether attributable to Compensation,
Bonus, Fees or Excess 401(k) Contributions.

     If insurance on the life of any Participant is obtained and such
Participant commits suicide during the two-year period beginning on the date of
his or her participation in this Plan or if a Participant hereunder makes any
material misstatement of information or nondisclosure  of medical history, the
Committee, in its sole discretion, may terminate the participation of any such
Participant hereunder.  Upon any such termination, the Participant shall be
entitled to the return of the principal amount of his or her deferrals
hereunder, whether attributable to Compensation, a Bonus, Fees or Excess 401(k)
Contributions.

                                  ARTICLE XII
                                 MISCELLANEOUS


     12.1 TERMINATION OF PLAN.  The Board of Directors shall have the right, at
any time, to terminate this Plan.  The Board shall provide written notice of
such termination to each Participant hereunder.  During the 30-day period
immediately following receipt of such notice,

                                       16
<PAGE>

each Participant shall be entitled to elect a distribution of all or a portion
of the amount then credited to his or her Accounts in the form of an immediate
single-sum payment. In the event a Participant elects a single-sum payment
hereunder, the value of his or her Accounts shall be reduced by 10% of the
amount of the payment.

     12.2 FUNDING.  The Company shall establish a trust in connection with the
adoption of this Plan.  Each year during the continuance of this Plan, the
Committee may designate amounts or property to be added to the trust on behalf
of the Company or an Affiliate.  The property comprising the assets of such
trust, including any insurance policy on the life of a Participant purchased by
such trust or contributed to such trust by the Company or an Affiliate, shall at
all times remain the property of such trust.  The trustee of such trust shall
distribute the assets comprising such trust in accordance with the provisions
and the trust agreement, all as instructed by the Committee, but in no event
shall such trustee distribute the assets of such trust to or for the benefit of
the Company or any Affiliate, except as provided in the trust agreement.

     No Participant or Beneficiary shall have the right to, or claim under or
against, any insurance policy on the life of the Participant obtained by the
Company or an Affiliate or any asset held in trust to help defray the cost
incurred in providing benefits under this Plan.  Any such policy or other
property shall be, and remain, a general, unpledged asset of the Company or an
Affiliate or the trust, as the case may be.

     12.3 INUREMENT.  This Plan shall be binding upon and shall inure to the
benefit of the Company and each Participant hereto and their respective heirs,
executors, administrators, successors and assigns.

     12.4 NO EFFECT ON OTHER BENEFITS.  Any compensation paid or benefits
provided to a Participant shall be in addition to, and not in lieu of, the
benefits provided to such Participant under this Plan.  Nothing in this Plan
shall be construed as limiting, varying or reducing the provision of any benefit
available to a Participant, such Participant's estate or Beneficiary pursuant to
any employment agreement, retirement plan, including any qualified pension or
profit-sharing plan, health, disability or life insurance plan or any other form
of agreement or arrangement between the Company and/or an Affiliate and a
Participant.

     12.5 AMENDMENT AND MODIFICATION.  The Board of Directors of the Company may
amend this Plan, in its discretion; provided, however, that any amendment
adversely affecting amounts then credited to Accounts hereunder shall be
approved by each affected Participant (or his or her Beneficiary).
Notwithstanding the foregoing, however, the consent of any Participant or
Beneficiary shall not be required if the Board of Directors reasonably
determines that an amendment is necessary to ensure that amounts credited to a
Participant's Accounts are not subject to federal income taxation until
withdrawn or distributed or to ensure that the Plan is deemed to be unfunded or
maintained for the benefit of a select group of management employees within the
meaning of ERISA.

     12.6 GOVERNING LAW.  This Plan is governed by the internal laws of the
State of Louisiana, in all respects, including matters of construction, validity
and performance.

                                       17
<PAGE>

     THIS PLAN was approved by the Board of Directors of Cleco Corporation on
July 28, 2000, to be effective as of August 1, 2000.

                                          CLECO CORPORATION




                                       18
<PAGE>

                               CLECO CORPORATION
                           DEFERRED COMPENSATION PLAN

                                   EXHIBIT A
                        INITIAL PARTICIPATING AFFILIATES


Entity                                               Federal Tax ID Number

CLE Resources, Inc.                                         51-0347558
Cleco Innovations LLC                                       pending
Cleco Midstream Resources LLC                               72-1430427
Cleco Support Group LLC                                     72-1440332
Cleco Power LLC                                             72-0244480
Acadia Power Holdings LLC                                   55-2222960
Cleco Business Development LLC                              72-1459477
Cleco Columbian LLC                                         none
Cleco ConnexUs LLC                                          72-1458889
Cleco Energy LLC                                            72-0552102
Cleco Evangeline LLC                                        72-1430430
Cleco Generation Services LLC                               72-1432536
Cleco Marketing & Trading LLC                               72-1432535
Perryville Energy Holdings LLC                              72-1483837
Utility Construction & Technology Solutions LLC             72-1401308
Acadia Power Partners LLC                                   72-0535898
Perryville Energy Partners, LLC                             pending
Sabine Texican Pipeline Company                             75-1085381
CLE Intrastate Pipeline Company, Inc.                       72-1137860
DeSoto Pipeline Company, Inc.                               75-1131148
Four Square Gas Company, Inc.                               72-1085382
Four Square Production, L.L.C.                              75-2684991
Panola Exploration, Inc.                                    75-2694481
STP Marketing, Inc.                                         72-1085380
Hudson SVD, L.L.C.                                          75-2655754
Providence Partners, L.L.C.                                 75-2703758
Rio Bravo Energy LLC                                        74-2888452
Sonora Pipeline LLC                                         76-0592044

                                       19
<PAGE>

                               CLECO CORPORATION
                           DEFERRED COMPENSATION PLAN

                                   EXHIBIT B
                              INITIAL PARTICIPANTS


     This Exhibit B is intended to form a part of the Cleco Corporation Deferred
Compensation Plan and to be deemed incorporated therein by this reference.  In
accordance with Article III of the Plan, the following persons shall be deemed
Participants in the Plan, without the necessity of further action:

     a.  Gregory L. Nesbitt; and

     b.   Any member of the Board of Directors of Cleco Utility Group Inc. who
          elected to defer his or her fees under the terms of the Cleco
          Corporation Deferred Compensation Plan for Directors.

                                       20