Exhibit 10c(12)


                              PROGRESS ENERGY, INC.
                        MANAGEMENT CHANGE-IN-CONTROL PLAN

                (Amended and Restated Effective January 1, 2005)

1.0  PURPOSE OF PLAN

1.1  Purpose.   The   purpose   of  the   Progress   Energy,   Inc.   Management
     Change-in-Control Plan (the "Plan") is to attract and retain certain highly
     qualified  individuals as management employees of Progress Energy, Inc. and
     its subsidiaries,  and to provide a benefit to such management employees if
     their  employment is terminated in connection  with a Change in Control (as
     defined below).  This Plan is intended to qualify as a "top-hat" plan under
     the Employee  Retirement Income Security Act of 1974, as amended ("ERISA"),
     in that it is intended to be an "employee  pension  benefit  plan" (as such
     term is defined under Section 3(2) of ERISA) which is unfunded and provides
     benefits  only to a  select  group  of  management  or  highly  compensated
     employees  of the Company or any  Subsidiary.  The Plan amends and restates
     the Plan as restated  effective  July 10, 2002,  which amended and restated
     the Carolina Power & Light Company Management  Change-in-Control Plan which
     was originally adopted effective January 1, 1998.

2.0  DEFINITIONS

The  following  terms  shall have the  following  meanings  unless  the  context
     indicates otherwise:

2.1  "Beneficiary"  shall  mean  a  beneficiary   designated  in  writing  by  a
     Participant  to  receive  any  payments  to be made  under the Plan to such
     Participant,  and if no beneficiary is designated by the Participant,  then
     the Participant's estate shall be deemed to be the Participant's designated
     beneficiary.

2.2  "Board" shall mean the Board of Directors of the Company.

2.3  "Cash  Payment"  shall  mean  a  payment  in  cash  by the  Company  or any
     Subsidiary to a Participant in accordance with Section 6.1 below.

2.4  "Cause" shall mean:

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

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

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

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

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

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

2.5  Change-in-Control" shall mean:

     2.5.1     General:  Except as may be otherwise  required in order to comply
               with Code Section  409A, a  Change-in-Control  shall be deemed to
               have occurred on 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  Company,
                    becomes, directly or indirectly,  the "beneficial owner" (as
                    defined in Rule 13d-3  promulgated  under the Securities Act
                    of  1934)  of   securities   of  the  Company   representing
                    twenty-five  percent  (25%) or more of the  combined  voting
                    power  of  the   Company's   then   outstanding   securities
                    (excluding  the  acquisition of securities of the Company by
                    an entity at least eighty  percent (80%) of the  outstanding
                    voting  securities  of which are,  directly  or  indirectly,
                    beneficially owned by the Company); or

               (b)  the date of consummation of a tender offer for the ownership
                    of more  than  fifty  percent  (50%) of the  Company's  then
                    outstanding voting securities; or

               (c)  the date of  consummation  of a merger,  share  exchange  or
                    consolidation  of the Company 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 Company  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  Company  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 Company  (other
                    than such an offer by the Company  for its own  securities),
                    or as a result of a proxy contest,  merger,  share exchange,
                    consolidation  or  sale of  assets,  or as a  result  of any
                    combination of the foregoing, individuals who are Continuing
                    Directors  cease  for any  reason  to  constitute  at  least
                    two-thirds (2/3) of the members of the Board; or

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

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

                    A  Change-in-Control  shall not be  deemed to have  occurred
                    until a majority of the members of the Board receive written
                    certification  from the Committee that one of the events set
                    forth in this Section 2.5.1 has occurred.  Any determination
                    that an event  described in this Section  2.5.1 has occurred
                    shall,  if made in good  faith on the  basis of  information
                    available  at that time,  be  conclusive  and binding on the
                    Committee,   the  Company,   the   Participants   and  their
                    Beneficiaries for all purposes of the Plan.

     2.5.2     Definition  Applicable to  Change-in-Control  Benefits Subject to
               Code Section 409A:  Notwithstanding  the preceding  provisions of
               Section 2.5.1, in the event that any  Change-in-Control  Benefits
               under the Plan are deemed to be deferred  compensation subject to
               the provisions of Code Section 409A, then  distributions  related
               to such benefits may be permitted, in the Committee's discretion,
               upon the  occurrence of one or more of the  following  events (as
               they are defined and interpreted under Code Section 409A, related
               regulations, or other guidance): (A) a change in the ownership of
               the Company, (B) a change in effective control of the Company, or
               (C) a change in the  ownership  of a  substantial  portion of the
               assets of the Company.

2.6  "Change-in-Control  Benefits"  shall  mean  the  benefits  described  under
     Section 6 below  provided to Terminated  Participants.  Except as otherwise
     provided herein, a Terminated Participant who is terminated in anticipation
     of a  Change-in-Control  as  described  in Section 5.1 shall be entitled to
     receive  the   Change-in-Control   Benefits  as  of  the  Termination  Date
     notwithstanding  the fact that the anticipated  Change-in-Control  does not
     occur.

2.7  "Change-in-Control Date" shall mean the date that a Change-in-Control first
     occurs.

2.8  "Code" shall mean the Internal  Revenue Code of 1986,  as amended from time
     to time.

2.9  "Committee" shall mean (i) the Board or (ii) a committee or subcommittee of
     the Board  appointed  by the Board from among its  members.  The  Committee
     shall be the Board's  Committee on Organization  and  Compensation  until a
     different Committee is appointed.  On a Change-in-Control  Date, and during
     the 36-month period  following such  Change-in-Control  Date, the Committee
     shall be  comprised  of such persons as appointed by the Board prior to the
     Change-in-Control  Date,  with any  additions  or changes to the  Committee
     following  such  Change-in-Control  Date to be made and or  approved by all
     Committee members then in office.

2.10 "Company" shall mean Progress Energy,  Inc., a North Carolina  corporation,
     including  any  successor  entity  or any  successor  to the  assets of the
     Company that has assumed the Plan.

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

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2.12 "Effective  Date" of the Plan, as amended and restated  herein,  shall mean
     January 1, 2005.

2.13 "Good Reason" shall mean the occurrence of any of the following:

     (a)  a reduction in the Participant's base salary without the Participant's
          prior  written  consent  (other  than  any  reduction   applicable  to
          management employees generally);

     (b)  a material  adverse change in the  Participant's  position,  duties or
          responsibilities  with  respect  to  his or her  employment  with  the
          Company and/or any Subsidiary without the Participant's  prior written
          consent;

     (c)  a material reduction in the Participant's total incentive compensation
          opportunity  under the  Company's  Management  Incentive  Compensation
          Plan, the 1997 Equity  Incentive Plan, the 2002 Equity Incentive Plan,
          the Performance Share Sub-Plans,  or any other incentive  compensation
          plan (based on the total incentive compensation opportunity previously
          granted to such  Participant  during the 12-month  period  preceding a
          Change-in-Control   Date)  without  the  Participant's  prior  written
          consent;

     (d)  an actual change in the Participant's  principal work location by more
          than 50 miles and more than 50 miles from the Participant's  principal
          place of abode as of the date of such change in job  location  without
          the Participant's prior written consent;

     (e)  the failure of the Company to obtain the  assumption of its obligation
          under the Plan by any  successor  to all or  substantially  all of the
          assets of the  Company  within 30 days after a merger,  consolidation,
          sale or similar transaction constituting a Change-in-Control; or

     (f)  a material  breach by the Company of any term or provision of the Plan
          without the Participant's prior written consent.

2.14 "Gross-Up Payment" shall mean a payment described in Section 11 below.

2.15 "Management  Employee"  shall  mean a  regular  full-time  employee  of the
     Company or any Subsidiary with managerial duties and responsibilities.

2.16 "Participant" shall mean any Management Employee who has been designated to
     participate in the Plan under Section 3 below.

2.17 "Plan" shall mean the Progress Energy,  Inc.  Management  Change-in-Control
     Plan.

2.18 "Retirement"  shall mean the  termination  of  employment  of a Participant
     after having attained the age of 65 with five or more years of service,  or
     the age of 55 with 15 or more years of service,  or after having  completed
     35 or more years of service regardless of age.

2.19 "Subsidiary"  shall mean a  corporation  of which the  Company  directly or
     indirectly  owns more than fifty percent (50%) of the voting stock (meaning
     the capital stock of any class or classes having general voting power under
     ordinary  circumstances,  in the  absence  of  contingencies,  to elect the
     directors  of a  corporation)  or any  other  business  entity in which the
     Company  directly or indirectly  has an ownership  interest of more than 50
     percent.

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2.20 "Terminated  Participant"  shall mean a  Participant  whose  employment  is
     terminated  as  described  in Section 5 below;  provided,  however,  that a
     Participant  who is reemployed by the Company or any Subsidiary  without an
     intervening  break in service  shall not be a  Terminated  Participant  for
     purposes of this Plan.

2.21 "Termination   Date"  shall  mean  the  date  a  Terminated   Participant's
     employment  with the Company and/or a Subsidiary is terminated as described
     in Section 5 below.

2.22 "Trigger Trust" shall mean a trust as described in Section 8 below.

3.0  ELIGIBILITY AND PARTICIPATION

3.1  Eligibility. An individual shall be eligible to participate in the Plan who
     is a Management Employee in one of the following positions:

     (a)  Tier I - Chief Executive Officer,  Chief Operating Officer,  President
          and Executive Vice Presidents who are members of the Senior Management
          Committee of the Company.

     (b)  Tier II -  Senior  Vice  Presidents  who  are  members  of the  Senior
          Management Committee of the Company.

     (c)  Tier  III - Vice  Presidents,  Department  Heads  and  other  selected
          Management Employees of the Company or any Subsidiary.

3.2  Participation.  The Committee  shall  designate  each  eligible  Management
     Employee who is a Participant  in the Plan.  The Committee may, in its sole
     discretion,  terminate the participation of a Participant at any time prior
     to the  date  that  substantive  negotiations  occur in  connection  with a
     potential Change-in-Control.

4.0  ADMINISTRATION

4.1  Responsibility.  The Committee shall have the  responsibility,  in its sole
     discretion,  to  control,  operate,  manage  and  administer  the  Plan  in
     accordance with its terms.

4.2  Authority  of  the  Committee.   The  Committee   shall  have  the  maximum
     discretionary authority permitted by law that may be necessary to enable it
     to discharge its  responsibilities  with respect to the Plan, including but
     not limited to the following:

     (a)  to determine eligibility for participation in the Plan;

     (b)  to designate Participants;

     (c)  to determine  and  establish  the formula to be used in  calculating a
          Participant's Change-in-Control Benefits;

     (d)  to  correct  any  defect,   supply  any  omission,  or  reconcile  any
          inconsistency  in the Plan in such  manner  and to such  extent  as it
          shall deem  appropriate in its sole  discretion to carry the same into
          effect;

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     (e)  to issue  administrative  guidelines as an aid to administer  the Plan
          and make  changes  in such  guidelines  as it from time to time  deems
          proper;

     (f)  to make rules for  carrying  out and  administering  the Plan and make
          changes in such rules as it from time to time deems proper;

     (g)  to the extent  permitted under the Plan,  grant waivers of Plan terms,
          conditions, restrictions, and limitations;

     (h)  to make reasonable  determinations  as to a Participant's  eligibility
          for benefits under the Plan, including  determinations as to Cause and
          Good Reason; and

     (i)  to take any and all other actions it deems  necessary or advisable for
          the proper operation or administration of the Plan.

4.3  Action by the  Committee.  The  Committee may act only by a majority of its
     members. Any determination of the Committee may be made, without a meeting,
     by a writing or writings signed by all of the members of the Committee.  In
     addition,  the  Committee  may  authorize any one or more of its members to
     execute and deliver documents on behalf of the Committee.

4.4  Delegation of  Authority.  The Committee may delegate to one or more of its
     members,  or to one or more agents,  such  administrative  duties as it may
     deem advisable;  provided,  however,  that any such delegation  shall be in
     writing. In addition, the Committee, or any person to whom it has delegated
     duties as  aforesaid,  may employ one or more persons to render advice with
     respect to any  responsibility  the Committee or such person may have under
     the Plan. The Committee may employ such legal or other counsel, consultants
     and agents as it may deem desirable for the  administration of the Plan and
     may rely upon any opinion or  computation  received  from any such counsel,
     consultant or agent.  Expenses  incurred by the Committee in the engagement
     of such counsel,  consultant or agent shall be paid by the Company,  or the
     Subsidiary  whose  employees have benefited from the Plan, as determined by
     the Committee.

4.5  Determinations and Interpretations by the Committee. All determinations and
     interpretations  made by the Committee  shall be binding and  conclusive to
     the maximum extent  permitted by law on all  Participants  and their heirs,
     successors, and legal representatives.

4.6  Information.  The Company  shall  furnish to the  Committee  in writing all
     information  the  Committee  may deem  appropriate  for the exercise of its
     powers and duties in the  administration  of the Plan. Such information may
     include,  but shall not be limited to, the full names of all  Participants,
     their earnings and their dates of birth,  employment,  retirement or death.
     Such information  shall be conclusive for all purposes of the Plan, and the
     Committee  shall be entitled  to rely  thereon  without  any  investigation
     thereof.

4.7  Self-Interest.  No  member  of the  Committee  may act,  vote or  otherwise
     influence a decision of the Committee  specifically  relating to his or her
     benefits, if any, under the Plan.

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5.0  TERMINATION OF EMPLOYMENT

5.1  Termination  of  Employment.  If the  Company or a  Subsidiary  employing a
     Participant terminates such Participant's employment without Cause, or if a
     Participant  terminates  his  or  her  employment  with  the  Company  or a
     Subsidiary  for  Good  Reason,  and in  either  case  such  termination  of
     employment is not due to the death or Retirement  of the  Participant,  and
     such termination of employment  occurs during the 24-month period following
     the Change-in-Control  Date, or occurs prior to the Change-in-Control  Date
     but after substantive negotiations leading to the Change-in-Control and can
     be demonstrated to have occurred at the request or initiation of parties to
     the  Change-in-Control  (such date of  termination  of employment  shall be
     referred to herein as the "Termination  Date"), the Terminated  Participant
     shall be entitled to receive the  Change-in-Control  Benefits in accordance
     with Section 6 below.

6.0  CHANGE-IN-CONTROL BENEFITS

6.1  Cash Payment.  Within ten days following the Termination  Date, the Company
     shall pay to the Terminated  Participant,  in a lump sum, an amount in cash
     as determined under a formula established by the Committee (such formula to
     be established by the Committee,  in its sole  discretion,  on the date the
     Committee  designates  such  individual as a Participant in accordance with
     Section 3.2 above);  provided,  however,  that such Cash Payment  shall not
     exceed in the aggregate an amount equal to the sum of:

     (a)  The Applicable Percentage of the Terminated  Participant's annual base
          salary in effect on the Termination Date; plus

     (b)  The  Applicable  Percentage  of the  greater of (i) the average of the
          Terminated Participant's annual incentive bonus paid to the Terminated
          Participant under the Company's Management Incentive Compensation Plan
          or  otherwise  with  respect  to the three  completed  calendar  years
          immediately  preceding the year in which the Termination  Date occurs;
          provided, however, that if the Terminated Participant was not eligible
          to receive an annual incentive bonus with respect to each of the three
          calendar years immediately preceding the year in which the Termination
          Date  occurs,  the  average  shall be  determined  for that  period of
          calendar  years,  if any,  for which the  Terminated  Participant  was
          eligible to receive an annual  incentive bonus, or (ii) the Terminated
          Participant's  target annual incentive bonus for the year in which the
          Termination Date occurs.

     For this  purpose,  the  "Applicable  Percentage"  shall be  determined  as
     follows:

              Participant                        Applicable Percentage

              Tier I                                      300%
              Tier II                                     200%
              Tier III                                    150%

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6.2  Annual Cash Incentive  Compensation Plans. The Terminated Participant shall
     be entitled to receive an amount equal to his or her compensation under the
     annual cash incentive compensation plan covering the Terminated Participant
     based on 100  percent  (100%) of his or her target  bonus  under such plan,
     which  shall be paid during the 10-day  period  following  the  Termination
     Date.

6.3  Long Term Compensation  Plan. The Terminated  Participant shall be entitled
     to receive any awards which have been earned prior to the Termination  Date
     under the Company's Amended and Restated Long Term Compensation Plan, which
     shall be paid during the 10-day period following the Termination Date.

6.4  Restricted Stock Agreements. The Terminated Participant shall become vested
     as of the Termination  Date in any restricted  share awards which have been
     granted to him or her under the Company's 1997 Equity  Incentive  Plan, the
     2002 Equity Incentive Plan or any successor plans, and such shares shall be
     delivered  to him or her  without  restriction  during  the  10-day  period
     following the Termination Date.

6.5  Performance Share Sub-Plans. The Terminated Participant shall become vested
     as of the  Termination  Date in any awards  which have been granted to such
     Participant under the Company's Performance Share Sub-Plans. The Terminated
     Participant  shall be  entitled  to payment  of any awards  which have been
     granted to him or her under such plans prior to the Termination Date within
     ten days  following the date that the data needed to calculate the value of
     the awards is available to the Company.

6.6  Stock  Option  Agreements.  Except to the extent  that  greater  rights are
     provided to the  Terminated  Participant  under the terms of a Stock Option
     Agreement  between  the  Terminated   Participant  and  the  Company,   the
     Terminated  Participant  shall have the  following  rights  under any Stock
     Option Agreement following the Termination Date:

     (a)  Option  Assumed by Successor.  If the Stock Option  Agreement has been
          assumed   by  the   successor   to  the   Company  on  or  before  the
          Change-in-Control  Date,  any options not previously  forfeited  shall
          vest in  accordance  with the terms of the Stock Option  Agreement and
          any vested  options may be  exercised  by the  Terminated  Participant
          during  the  remaining  term  of  such  options   notwithstanding  the
          termination of employment by the Terminated Participant.

     (b)  Option Not Assumed by Successor. If the Stock Option Agreement has not
          been assumed by the successor on or before the Change-in-Control Date,
          any   outstanding   options   shall   be  fully   vested   as  of  the
          Change-in-Control  Date and,  in lieu of  exercise,  the value of such
          options shall be paid to the Terminated Participant in an amount equal
          to the excess,  if any, of the  aggregate  fair market value as of the
          Change-in-Control  Date of the shares subject to such options over the
          aggregate  exercise price for such shares.  Such payment shall be made
          during the 10-day period  following  the later of (i) the  Termination
          Date,  or  (ii)  the  Change-in-Control   Date.   Notwithstanding  the
          foregoing,   if  the   Terminated   Participant   was   terminated  in
          anticipation  of a  Change-in-Control  as described in Section 5.1 and
          the anticipated  Change-in-Control does not occur, this Section 6.6(b)
          shall not apply and the  terms of the  Stock  Option  Agreement  shall
          control.

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     For purposes of this Section  6.6,  the  successor  shall be deemed to have
     "assumed" a Stock  Option  Agreement  if the excess of the  aggregate  fair
     market  value of the  shares  subject  to the  options  over the  aggregate
     exercise price  immediately after the assumption is no less than the excess
     of the  aggregate  fair market  value of the shares  subject to the options
     over the aggregate exercise price immediately prior to the assumption.

6.7  Other Company  Incentive  Compensation  Plans.  The Terminated  Participant
     shall  become  vested as of the  Termination  Date in any awards which have
     been granted to such Participant under any Company  incentive  compensation
     plan, program or agreements (other than those plans or agreements specified
     in Sections  6.2,  6.3,  6.4, 6.5 and 6.6 above)  prior to the  Termination
     Date. A Terminated Participant shall be entitled to (i) payment of any cash
     awards and (ii)  delivery of any  unrestricted  shares (if such award is in
     the form of restricted stock),  which have been granted to him or her under
     such  plan(s)  prior to the  Termination  Date  during  the  10-day  period
     following the Termination Date.

6.8  Payment of Change-in-Control Benefits to Beneficiaries. In the event of the
     Participant's  death, all  Change-in-Control  Benefits that would have been
     paid to the Participant under this Section 6 but for his or her death shall
     be paid to the Participant's Beneficiary.

7.0  PARTICIPATION IN NONQUALIFIED PENSION AND WELFARE BENEFIT PLANS

7.1  Nonqualified Deferred Compensation Plans;  Restoration Retirement Plan. The
     Terminated  Participant  shall be entitled to payment of his or her benefit
     in any nonqualified  deferred  compensation or restoration  pension plan of
     the  Company  (including,  but not  limited  to,  the  Management  Deferred
     Compensation  Plan,  the  Deferred  Compensation  Plan  for Key  Management
     Employees and the Restoration Retirement Plan) in accordance with the terms
     of such plan.

7.2  Supplemental Senior Executive Retirement Plan. A Terminated Participant who
     is a participant in the Company's  Supplemental Senior Executive Retirement
     Plan shall (i) be deemed to have a minimum of three years of service on the
     Senior Management  Committee and (ii) receive a grant of additional service
     so that such  Terminated  Participant has a minimum of ten years of service
     with the Company for benefit purposes.  The Terminated Participant shall be
     entitled to payment of his or her  benefit  under the  Supplemental  Senior
     Executive  Retirement  Plan in accordance  with the terms of such plan upon
     reaching the earliest age for receipt of benefits (including any additional
     credited  service  described  in  the  previous  sentence  and  as if  such
     Terminated Participant has met the service requirements for such benefits).

7.3  Split-Dollar Life Insurance  Policies.  Following the Termination Date, the
     Terminated  Participant  shall be entitled to payment by the Company of all
     premiums  due under any  split-dollar  life  insurance  arrangement  of the
     Company  (including,  but not limited to, the Split  Dollar Life  Insurance
     Plan, the Executive Estate  Conservation  Plan and the Executive  Permanent
     Life  Insurance  Plan)  for any  life  insurance  policy  under  which  the
     Terminated  Participant  is the insured that come due during the Applicable
     Period following the Termination Date.

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7.4  Employee Welfare Benefits.  The Company or the applicable  Subsidiary shall
     pay the total cost for the  Terminated  Participant  to  continue  coverage
     after  the  Termination  Date in the  medical,  dental,  vision,  and  life
     insurance plans of the Company or the applicable  Subsidiary in which he or
     she was participating on the Termination Date until the earlier of:

     (a)  the end of the Applicable Period following the Termination Date;

     (b)  the  date,  or  dates,  he or she  receives  comparable  coverage  and
          benefits under the plans, programs and/or arrangements of a subsequent
          employer   (such   coverage  and  benefits  to  be   determined  on  a
          coverage-by-coverage or benefit-by-benefit basis); or

     (c)  the Retirement of the Terminated Participant.

     Notwithstanding the foregoing,  however, the termination of the Participant
     shall  constitute  a  qualifying  event  with  respect  to the right of the
     Terminated  Participant  and  any  covered  dependents  to  continue  group
     medical,  dental and vision  coverage in  accordance  with  COBRA,  and the
     continuation  period for purposes of COBRA shall run concurrently  with the
     Applicable Period.


7.5  Applicable  Period.  For  purposes of Section 7.3 and 7.4,  the  Applicable
     Period shall be determined as follows:

                  Participant                        Applicable Period

                  Tier I                                36 Months
                  Tier II                               24 Months
                  Tier III                              18 Months

8.0  TRIGGER TRUST

8.1  Establishment  of Trigger  Trust.  The Board may,  in its sole  discretion,
     establish  or cause to be  established  a  Trigger  Trust as  described  in
     Section  8.2  below,  the  purpose  of which is to  provide  a fund for the
     payment of some or all of the Change-in-Control Benefits and other benefits
     under  Sections  6 and 7  above  to  Terminated  Participants  following  a
     Change-in-Control Date, and such other benefits as may be determined by the
     Board from time to time.

8.2  Trigger Trust Requirements. The Trigger Trust shall be a trust:

     (a)  of which the Company is the grantor,  within the meaning of subpart E,
          part I, subchapter J, chapter 1, subtitle A of the Code;

     (b)  under  which all  Participants  as of the  Change-in-Control  Date are
          beneficiaries; and

     (c)  the assets of which  shall be  subject to the claims of the  Company's
          general  creditors in accordance with Internal Revenue Service Revenue
          Procedure 92-64.

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<PAGE>

9.0  CLAIMS

9.1  Claims  Procedure.  If any  Participant  or  Beneficiary,  or  their  legal
     representative,  has a claim for  benefits  which is not being  paid,  such
     claimant  may file a written  claim with the  Committee  setting  forth the
     amount  and  nature of the  claim,  supporting  facts,  and the  claimant's
     address.  Written  notice of the  disposition  of a claim by the  Committee
     shall be furnished to the claimant within 90 days after the claim is filed.
     In the event of special circumstances,  the Committee may extend the period
     for  determination  for up to an additional 90 days, in which case it shall
     so advise the claimant.  If the claim is denied, the reasons for the denial
     shall be specifically set forth in writing, the pertinent provisions of the
     Plan will be cited,  including  an  explanation  of the Plan's claim review
     procedure,  and, if the claim is perfectible,  an explanation as to how the
     claimant can perfect the claim shall be provided.

9.2  Claims Review  Procedure.  If a claimant whose claim has been denied wishes
     further  consideration  of his or her  claim,  he or she  may  request  the
     Committee  to  review  his or  her  claim  in a  written  statement  of the
     claimant's  position  filed with the  Committee no later than 60 days after
     receipt of the written notification  provided for in Section 9.1 above. The
     Committee  shall  fully and fairly  review  the  matter and shall  promptly
     advise the claimant,  in writing,  of its decision within the next 60 days.
     Due to  special  circumstances,  the  Committee  may  extend the period for
     determination for up to an additional 60 days.

9.3  Reimbursement of Expenses.  If there is any dispute between the Company and
     a  Participant  with respect to a claim under the Plan,  the Company  shall
     reimburse such Participant all reasonable fees, costs and expenses incurred
     by such Participant with respect to such disputed claim; provided, however,
     that (i) such  Participant  is the  prevailing  party with  respect to such
     disputed claim or (ii) the disputed claim is settled.

10.0 TAXES

10.1 Withholding  Taxes.  The Company shall be entitled to withhold from any and
     all payments made to a Participant under the Plan all federal, state, local
     and/or other taxes or imposts which the Company  determines are required to
     be so withheld from such  payments or by reason of any other  payments made
     to or on behalf of the Participant or for his or her benefit hereunder.

10.2 No Guarantee of Tax Consequences.  No person connected with the Plan in any
     capacity, including, but not limited to, the Company and any Subsidiary and
     their directors,  officers,  agents and employees makes any representation,
     commitment, or guarantee that any tax treatment, including, but not limited
     to, federal,  state. and local income, estate and gift tax treatment,  will
     be applicable  with respect to amounts  deferred under the Plan, or paid to
     or for the  benefit  of a  Participant  under  the  Plan,  or that such tax
     treatment  will apply to or be  available  to a  Participant  on account of
     participation in the Plan.

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<PAGE>

11.0 ADDITIONAL PAYMENTS

11.1 Gross-Up  Payment.  In the event that any payment or benefit received or to
     be received by any Participant pursuant to the terms of the Plan (the "Plan
     Payments") or of any other plan, arrangement or agreement of the Company or
     any Subsidiary ("Other Payments" and, together with the Plan Payments,  the
     "Payments")  would be subject to the excise tax (the "Excise  Tax") imposed
     by Section 4999 of the Code as  determined as provided  below,  the Company
     shall pay to such Participant, at the time specified in Section 11.3 below,
     an  additional  amount (the  "Gross-Up  Payment")  such that the net amount
     retained by such Participant, after deduction of the Excise Tax on Payments
     and any federal,  state and local income tax and any additional  Excise Tax
     upon the Gross-Up Payment, and any interest,  penalties or additions to tax
     payable by such  Participant  with respect  thereto,  shall be equal to the
     total  present  value  (using the  applicable  federal  rate (as defined in
     Section  1274(d) of the Code in such  calculation)  of the  Payments at the
     time such Payments are to be made. Notwithstanding the foregoing provisions
     of this Section 11.1, if it shall be determined  that a Participant in Tier
     II or Tier III is entitled  to a Gross-Up  Payment,  but that the  Payments
     would not be subject to the Excise Tax if the  Payments  were reduced by an
     amount  that  does not  exceed  ten  percent  (10%) of the  portion  of the
     Payments that would be treated as "parachute  payments"  under Section 280G
     of the Code,  then the Plan Payments  shall be reduced (but not below zero)
     to the maximum amount that could be paid to the Participant  without giving
     rise to the Excise Tax (the "Safe  Harbor  Cap"),  and no Gross-Up  Payment
     shall  be made to the  Participant.  The  reduction  of the  Plan  Payments
     hereunder, if applicable,  shall be made by reducing first the Cash Payment
     under Section 6.1, unless an alternative  method of reduction is elected by
     the  Participant  and agreed to by the Committee.  For purposes of reducing
     the  Payments  to the Safe  Harbor Cap,  only Plan  Payments  (and no other
     Payments) shall be reduced. If the reduction of the Plan Payments would not
     result in a  reduction  of the  Payments to the Safe Harbor Cap, no amounts
     payable under this Plan shall be reduced pursuant to this provision.

11.2 Determination. For purposes of determining whether any of the Payments will
     be subject to the Excise Tax and the amounts of such Excise Tax:

     (a)  the total  amount  of the  Payments  shall be  treated  as  "parachute
          payments"  within the meaning of Section  280G(b)(2) of the Code,  and
          all  "excess  parachute   payments"  within  the  meaning  of  Section
          280G(b)(1)  of the Code shall be treated as subject to the Excise Tax,
          except to the  extent  that,  in the  opinion of  independent  counsel
          selected by the Company and reasonably  acceptable to such Participant
          ("Independent  Counsel"),  a Payment  (in  whole or in part)  does not
          constitute  a  "parachute  payment"  within  the  meaning  of  Section
          280G(b)(2) of the Code, or such "excess parachute  payments" (in whole
          or in part) are not subject to the Excise Tax;

     (b)  the  amount of the  Payments  that  shall be treated as subject to the
          Excise Tax shall be equal to the lesser of (i) the total amount of the
          Payments or (ii) the amount of "excess parachute  payments" within the
          meaning of Section  280G(b)(1)  of the Code  (after  applying  Section
          11.2(a) above); and

     (c)  the value of any noncash  benefits or any deferred  payment or benefit
          shall be determined  by  Independent  Counsel in  accordance  with the
          principles of Sections 280G(d)(3) and (4) of the Code.

                                       12
<PAGE>

     For  purposes  of  determining  the amount of the  Gross-Up  Payment,  such
     Participant  shall be deemed to pay  federal  income  taxes at the  highest
     marginal rates of federal income taxation  applicable to the individuals in
     the calendar year in which the Gross-Up Payment is to be made and state and
     local income taxes at the highest marginal rates of taxation  applicable to
     individuals   as  are  in  effect  in  the  state  and   locality  of  such
     Participant's  residence in the calendar year in which the Gross-Up Payment
     is to be made,  net of the maximum  reduction in federal  income taxes that
     can be obtained from  deduction of such state and local taxes,  taking into
     account any limitations applicable to individuals subject to federal income
     tax at the highest marginal rates.

11.3 Date of Payment of Gross-Up Payments. The Gross-Up Payments provided for in
     Section  11.1 above  shall be paid upon the  earlier of (i) the  payment to
     such   Participant  of  any  Payment  or  (ii)  the  imposition  upon  such
     Participant or payment by such Participant of any Excise Tax.

11.4 Adjustment.  If it is established  pursuant to a final  determination  of a
     court  or  an  Internal  Revenue  Service  proceeding  or  the  opinion  of
     Independent  Counsel that the Excise Tax is less than the amount taken into
     account  under  Section  11.1 above,  such  Participant  shall repay to the
     Company  within  30 days of such  Participant's  receipt  of notice of such
     final  determination  or  opinion  the  portion  of  the  Gross-Up  Payment
     attributable  to such reduction  (plus the portion of the Gross-Up  Payment
     attributable  to the Excise  Tax and  federal,  state and local  income tax
     imposed on the Gross-Up  Payment being repaid by such  Participant  if such
     repayment  results in a  reduction  in Excise  Tax or a federal,  state and
     local income tax deduction) plus any interest  received by such Participant
     on the amount of such repayment.  If it is established  pursuant to a final
     determination of a court or an Internal  Revenue Service  proceeding or the
     opinion of independent Counsel that the Excise Tax exceeds the amount taken
     into account hereunder (including by reason of any payment the existence or
     amount of which cannot be determined at the time of the Gross-Up  Payment),
     the Company  shall make an additional  Gross-Up  Payment in respect of such
     excess  within 30 days of the  Company's  receipt  of notice of such  final
     determination or opinion.

11.5 Further Interpretation of Section 280G or 4999 of the Code. In the event of
     any change in, or further  interpretation  of,  Section 280G or 4999 of the
     Code and the regulations promulgated thereunder,  such Participant shall be
     entitled,  by  written  notice to the  Company,  to  request  an opinion of
     Independent  Counsel regarding the application of such change to any of the
     foregoing, and the Company shall use its best efforts to cause such opinion
     to be  rendered  as  promptly  as  practicable.  All fees and  expenses  of
     Independent  Counsel  incurred in connection  with this agreement  shall be
     borne by the Company.

12.0 TERM OF PLAN; AMENDMENT AND TERMINATION

12.1 Term of Plan, Amendment, Termination. The Plan shall be effective as of the
     Effective  Date and shall remain in effect until the Board  terminates  the
     Plan. The Plan may be terminated,  suspended or amended by the Board at any
     time with or without prior notice prior to a  Change-in-Control;  provided,
     however,  that the Plan shall not be terminated,  suspended or amended on a
     Change-in-Control   Date  or  during  the  3-year  period   following  such
     Change-in-Control Date, and if the Plan is terminated, suspended or amended
     thereafter,  such action  shall not  adversely  affect the  benefits of any
     Terminated Participant.

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<PAGE>

13.0 COMPLIANCE WITH CODE SECTION 409A

13.1 General.  Notwithstanding  any other provision in the Plan to the contrary,
     if and to the extent  that  Section  409A of the Code is deemed to apply to
     the Plan or any  Change-in-Control  Benefit  provided under the Plan, it is
     the general  intention of the Company  that the Plan and all such  benefits
     shall comply with Code Section 409A, related regulations or other guidance,
     and the Plan and any such  Change-in-Control  Benefit shall,  to the extent
     practicable,  be  construed  in  accordance  therewith.  Without in any way
     limiting the effect of the foregoing,  in the event that Code Section 409A,
     related  regulations  or other  guidance  require  that any special  terms,
     provisions or  conditions be included in the Plan or any  Change-in-Control
     Benefit,  then such terms,  provisions and conditions  shall, to the extent
     practicable,  be deemed to be made a part of the Plan or  Change-in-Control
     Benefit,  as  applicable.  Further,  in the  event  that  the  Plan  or any
     Change-in-Control  Benefit  shall be deemed not to comply with Code Section
     409A or any  related  regulations  or  other  guidance,  then  neither  the
     Company, the Committee nor its or their designees or agents shall be liable
     to any Participant or other person for actions, decisions or determinations
     made in good faith.

13.2 Specific Terms  Applicable to  Change-in-Control  Benefits  Subject to Code
     Section  409A.  Without  limiting  the effect of Section  13.1  above,  and
     notwithstanding  any  other  provision  in the  Plan to the  contrary,  the
     following provisions shall, to the extent required under Code Section 409A,
     related   regulations   or  other   guidance,   apply   with   respect   to
     Change-in-Control  Benefits  deemed to involve the deferral of compensation
     under Code Section 409A:

     (a)  Distributions:   Distributions   may   be   made   with   respect   to
          Change-in-Control  Benefits  subject to Code  Section 409A not earlier
          than upon the occurrence of one or more of the following  events:  (A)
          separation of service; (B) disability; (C) death; (D) a specified time
          or  pursuant to a fixed  schedule;  (E) a change in the  ownership  or
          effective control of the Company, or in the ownership of a substantial
          portion of the assets of the Company,  as defined in Section 2.5.2; or
          (F)  the  occurrence  of  an  unforeseeable  emergency.  Each  of  the
          preceding  distribution  events  shall be defined and  interpreted  in
          accordance  with Code  Section 409A and related  regulations  or other
          guidance.

     (b)  Key Employees:  With respect to  Participants  who are "key employees"
          (as  defined  in Code  Section  409A,  related  regulations  or  other
          guidance), a distribution due to separation of service may not be made
          before the date that is six months after the Termination  Date (or, if
          earlier,  the  date of  death of the  Participant),  except  as may be
          otherwise permitted pursuant to Code Section 409A, related regulations
          or other guidance. To the extent that a Participant is subject to this
          section and a distribution is to be paid in  installments,  through an
          annuity,  or in some other manner where payment will be periodic,  the
          Participant  shall be paid,  during the seventh  month  following  the
          Termination  Date,  the  aggregate  amount of  payments  he would have
          received  but  for the  application  of this  section;  all  remaining
          payments shall be made in their ordinary course.

     (c)  No Acceleration:  Unless  permissible under Code Section 409A, related
          regulations  or  other  guidance,  the  acceleration  of the  time  or
          schedule for the payment of any  Change-in-Control  Benefit  under the
          Plan is prohibited.

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<PAGE>

14.0 MISCELLANEOUS

14.1 Offset. The  Change-in-Control  Benefits shall be reduced by any payment or
     benefit  made  or  provided  by  the  Company  or  any  Subsidiary  to  the
     Participant  pursuant  to  (i)  any  severance  plan,  program,  policy  or
     arrangement  of the Company or any  subsidiary of the Company not otherwise
     referred to in the Plan, (ii) any employment  agreement between the Company
     or any  Subsidiary  and the  Participant,  and (iii) any federal,  state or
     local statute, rule, regulation or ordinance.

14.2 No Right, Title, or Interest in Company Assets.  Participants shall have no
     right,  title, or interest whatsoever in or to any assets of the Company or
     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 or be construed to 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.  Subject to Section 8 above, all
     payments to be made  hereunder  shall be paid from the general funds of the
     Company  and no  special  or  separate  fund  shall be  established  and no
     segregation  of assets  shall be made to  assure  payment  of such  amounts
     except as expressly set forth in the Plan.

14.3 No Right to Continued  Employment.  The  Participant's  rights,  if any, to
     continue to serve the Company or any Subsidiary as an employee shall not be
     enlarged or otherwise  affected by his or her  designation as a Participant
     under the Plan, and the Company or the applicable  Subsidiary  reserves the
     right to terminate the employment of any employee at any time. The adoption
     of the  Plan  shall  not be  deemed  to give  any  employee,  or any  other
     individual  any  right to be  selected  as a  Participant  or to  continued
     employment with the Company or any Subsidiary.

14.4 Other Rights. The Plan shall not affect or impair the rights or obligations
     of the Company,  any  Subsidiary or a  Participant  under any other written
     plan,  contract,   arrangement,   or  pension,   profit  sharing  or  other
     compensation plan.

14.5 Governing  Law. 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.

14.6 Severability.  If any term or  condition  of the Plan  shall be  invalid or
     unenforceable  to any extent or in any  application,  then the remainder of
     the Plan,  with the exception of such invalid or  unenforceable  provision,
     shall not be affected  thereby and shall continue in effect and application
     to its fullest extent.

14.7 Incapacity. If the Committee determines that a Participant or a Beneficiary
     is unable to care for his or her affairs  because of illness or accident or
     because  he  or  she  is a  minor,  any  benefit  due  the  Participant  or
     Beneficiary may be paid to the Participant's  spouse or to any other person
     deemed by the  Committee  to have  incurred  expense  for such  Participant
     (including   a  duly   appointed   guardian,   committee   or  other  legal
     representative),  and any such payment shall be a complete discharge of the
     Company's obligation hereunder.

                                       15
<PAGE>

14.8 Transferability of Rights. The Company shall have the unrestricted right to
     transfer  its  obligations  under  the  Plan  with  respect  to one or more
     Participants to any person, including, but not limited to, any purchaser of
     all or any part of the Company's  business.  No  Participant or Beneficiary
     shall have any right to commute, encumber, transfer or otherwise dispose of
     or alienate any present or future right or expectancy which the Participant
     or  Beneficiary  may  have at any  time to  receive  payments  of  benefits
     hereunder,  which benefits and the right thereto are expressly  declared to
     be  non-assignable  and  nontransferable,  except to the extent required by
     law.  Any attempt to transfer  or assign a benefit,  or any rights  granted
     hereunder,  by a Participant or the spouse of a Participant  shall,  in the
     sole discretion of the Committee  (after  consideration of such facts as it
     deems pertinent),  be grounds for terminating any rights of the Participant
     or Beneficiary to any portion of the Plan benefits not previously paid.



                                       16