Exhibit 10c(11)













                              PROGRESS ENERGY, INC.

                              AMENDED AND RESTATED

                      MANAGEMENT DEFERRED COMPENSATION PLAN



                          Adopted as of January 1, 2000


               (As Revised and Restated effective January 1, 2005)


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                                TABLE OF CONTENTS

                                                                            Page

PREAMBLE......................................................................1

ARTICLE I          DEFINITIONS................................................2
      1.1      Account Balance................................................2
      1.2      Additional Deferral Election...................................2
      1.3      Affiliated Company.............................................2
      1.4      Board..........................................................2
      1.5      Board Committee................................................2
      1.6      Change of Control..............................................2
      1.7      Change of Form Election........................................4
      1.8      Change-of-Investment Election..................................4
      1.9      Code...........................................................5
      1.10     Committee......................................................5
      1.11     Company........................................................5
      1.12     Company Incentive Plans........................................5
      1.13     Continuing Directors...........................................5
      1.14     Deemed Investment Return.......................................5
      1.15     Deferral Election..............................................6
      1.16     Deferrals......................................................6
      1.17     Effective Date.................................................6
      1.18     Eligible Employee..............................................6
      1.19     Employee Stock Incentive Plan..................................6
      1.20     Enrollment Form................................................6
      1.21     ERISA..........................................................6
      1.22     Incentive Matching Allocations.................................7
      1.23     Investment Election............................................7
      1.24     Matching Allocation............................................7
      1.25     Net Salary.....................................................7
      1.26     Participant....................................................7
      1.27     Participant Accounts...........................................7
      1.28     Participant Company Account....................................7
      1.29     Participant Deferral Account...................................8
      1.30     Participant Matchable Deferral.................................8
      1.31     Payment Commencement...........................................8
      1.32     Phantom Investment Fund........................................8
      1.33     Phantom Funds Account..........................................9
      1.34     Phantom Investment Subaccount..................................9
      1.35     Phantom Stock Unit.............................................9
      1.36     Plan...........................................................9
      1.37     Plan Year......................................................9
      1.38     Plan Year Accounts.............................................9
      1.39     Progress Energy 401(k) Savings & Stock Ownership Plan.........10
      1.40     Retirement Date...............................................10
      1.41     Salary........................................................10

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      1.42     SMC Participant...............................................10
      1.43     Sponsor.......................................................10
      1.44     SSERP.........................................................10
      1.45     Valuation Date................................................10
      1.46     Value.........................................................11
      1.47     Years of Service..............................................11

ARTICLE II         PARTICIPATION.............................................12
      2.1      Eligibility...................................................12
      2.2      Commencement of Participation.................................12
      2.3      Annual Participation Agreement................................12
      2.4      Election of Phantom Investment Subaccounts....................13

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

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

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

ARTICLE VI         DISTRIBUTIONS.............................................23
      6.1      Distribution Elections........................................23
      6.2      Change-of-Form Elections and Additional Deferral Elections....24
      6.3      Payment.......................................................24
      6.4      Unforeseeable Emergency.......................................25
      6.5      Termination of Employment.....................................26
      6.6      Taxes.........................................................27
      6.7      Acceleration of Payment.......................................27

ARTICLE VII        DEATH BENEFITS............................................28
      7.1      Designation of Beneficiaries..................................28
      7.2      Death Benefit.................................................28

ARTICLE VIII       CLAIMS....................................................29
      8.1      Claims Procedure..............................................29
      8.2      Claims Review Procedure.......................................29

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

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

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

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

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

EXHIBIT A....................................................................37


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                                    PREAMBLE

     The  Progress  Energy,  Inc.  Management  Deferred  Compensation  Plan (the
"Plan") was originally adopted by Carolina Power & Light Company effective as of
January 1, 2000, and was  transferred to Progress  Energy,  Inc. (the "Sponsor")
effective  August 1, 2000.  The Plan is unfunded  and will benefit only a select
group of management or highly compensated  employees within the meaning of Title
I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").

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                                   ARTICLE I
                                   DEFINITIONS

          1.1 Account Balance

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

          1.2 Additional Deferral Election

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

          1.3 Affiliated Company

          Any corporation or other entity that is required to be aggregated with
the Sponsor pursuant to Sections 414(b), (c), (m), or (o) of the Code.

          1.4 Board

          The Board of Directors of the Sponsor.

          1.5 Board Committee

          The Organization and Compensation Committee of the Board.

          1.6 Change of Control

          The earliest of the following dates:

          (a)  the date any person or group of persons  (within  the  meaning of
               Section 13(d) or 14(d) of the  Securities  Exchange Act of 1934),
               excluding  employee  benefit  plans  of  the  Sponsor,   becomes,
               directly or  indirectly,  the  "beneficial  owner" (as defined in
               Rule  13d-3  promulgated  under  the  Securities  Act of 1934) of
               securities of the Sponsor representing  twenty-five percent (25%)
               or  more of the  combined  voting  power  of the  Sponsor's  then
               outstanding  securities  (excluding the acquisition of securities
               of the Sponsor by an entity at least eighty  percent (80%) of the
               outstanding   voting   securities  of  which  are,   directly  or
               indirectly, beneficially owned by the Sponsor); or

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

          (c)  the  date  of  consummation  of  a  merger,   share  exchange  or
               consolidation of the Sponsor with any other corporation or entity
               regardless of which entity is the survivor,  other than a merger,
               share exchange or consolidation  which would result in the voting
               securities of the Sponsor  outstanding  immediately prior thereto
               continuing to represent (either by remaining outstanding or being
               converted  into voting  securities  of the surviving or acquiring
               entity)  more than sixty  percent  (60%) of the  combined  voting
               power of the voting  securities of the Sponsor or such  surviving
               or acquiring entity outstanding  immediately after such merger or
               consolidation; or

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

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

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

          A  Change-of-Control  shall  not be deemed  to have  occurred  until a
          majority of the  members of the Board  receive  written  certification
          from the  Board  Committee  that one of the  events  set forth in this
          Section 1.6 has occurred. Any determination that an event described in
          this  Section  1.6 has  occurred  shall,  if made in good faith on the
          basis of information available at that time, be conclusive and binding
          on the  Board  Committee,  the  Company,  the  Participants  and their
          beneficiaries for all purposes of the Plan.

          1.7 Change of Form Election

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

          1.8 Change-of-Investment Election

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

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          1.9 Code

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

          1.10 Committee

          The   Administrative   Committee   described   in   Section   9.1  for
administering the Plan. 1.11 Company

          Progress  Energy,  Inc. or any  successor  to it in the  ownership  of
substantially  all of its  assets and each  Affiliated  Company  that,  with the
consent of the Board Committee, adopts the Plan and is included in Exhibit A, as
in effect from time to time.

          1.12 Company Incentive Plans

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

          1.13 Continuing Directors

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

          1.14 Deemed Investment Return

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

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          1.15 Deferral Election

          An election to defer Salary pursuant to Section 3.1.

          1.16 Deferrals

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

          1.17 Effective Date

          January 1, 2000.

          1.18 Eligible Employee

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

          1.19 Employee Stock Incentive Plan

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

          1.20 Enrollment Form

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

          1.21 ERISA

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

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          1.22 Incentive Matching Allocations

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

          1.23 Investment Election

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

          1.24 Matching Allocation

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

          1.25 Net Salary

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

          1.26 Participant

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

          1.27 Participant Accounts

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

          1.28 Participant Company Account

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

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          1.29 Participant Deferral Account

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

          1.30 Participant Matchable Deferral

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

          1.31 Payment Commencement

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

          1.32 Phantom Investment Fund

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

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          1.33 Phantom Funds Account

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

          1.34 Phantom Investment Subaccount

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

          1.35 Phantom Stock Unit

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

          1.36 Plan

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

          1.37 Plan Year

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

          1.38 Plan Year Accounts

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

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

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

          1.40 Retirement Date

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

          1.41 Salary

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

          1.42 SMC Participant

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

          1.43 Sponsor

          Progress Energy, Inc. and its successors in interest.

          1.44 SSERP

          The Supplemental Senior Executive Retirement Plan of the Company.

          1.45 Valuation Date

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

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          1.46 Value

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

          1.47 Years of Service

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


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                                   ARTICLE II
                                  PARTICIPATION

          2.1 Eligibility

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

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

          2.2 Commencement of Participation

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

          2.3 Annual Participation Agreement

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

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          2.4 Election of Phantom Investment Subaccounts

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

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                                  ARTICLE III
                               DEFERRAL ELECTIONS

          3.1 Participant Deferred Salary Elections

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

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

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

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

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

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

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

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

          3.2 Matching Allocations

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

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          3.3 Incentive Matching Allocations

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

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                                   ARTICLE IV
                                    ACCOUNTS

          4.1 Maintenance of Accounts

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

          4.2 Separate Plan Year Accounts

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

          4.3 Phantom Investment Subaccounts

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

          4.4 Administration of Deferral Accounts

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

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

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

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

          4.5 Administration of Company Accounts

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

                                       18
<PAGE>

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

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

                                       19
<PAGE>

          4.6 Change of Phantom Investment Subaccounts and Phantom Stock Units

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

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

          4.7 Transferred Accounts

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

                                       20
<PAGE>

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

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

                                       21
<PAGE>

                                   ARTICLE V
                                     VESTING

          5.1 Vesting

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

            Years of Service                  Percent of Vesting
               Less than 1                            0
               1 or more                            100%


                                       22
<PAGE>

                                   ARTICLE VI
                                  DISTRIBUTIONS

          6.1 Distribution Elections

          A  Participant  when  making  a  Deferral   Election  pursuant  to  an
Enrollment  Form with respect to a Plan Year shall elect on such Enrollment Form
(a) to defer the  payment of his Plan Year  Accounts  with  respect to such Plan
Year, in accordance  with the Plan until (i) the April 1 following the date that
is five years from the last day of such Plan  Year,  (ii) the April 1  following
the  Participant's   Retirement  or  (iii)  the  April  1  following  the  first
anniversary of the Participant's Retirement (each a "Payment Commencement Date")
and (b) to provide for the payment of such Plan Year  Account in the form of (i)
a lump sum or (ii) approximately equal installments over a period extending from
two years to ten years (by paying a fraction  of the account  balance  each year
during such period), as elected by the Participant. Except as otherwise provided
in  this   ARTICLE   VI,  such   elections   may  not  be  changed  or  revoked.
Notwithstanding the foregoing, if the Participant is a "key employee" as defined
in Section 416(i) of the Code (but determined  without regard to the 50 employee
limit on the number of officers  treated as key  employees),  payment of amounts
deferred  after  December  31, 2004,  shall not be made  pursuant to an election
under  Section  6.1(a)(ii)  above before six months after the date of separation
from service for any reason  including  Retirement (or, if earlier,  the date of
death of the  Participant).  For this  purpose,  an  amount  will be  considered
deferred  after  December 31, 2004, if it is not earned and vested on such date,
and shall include the Matching  Allocation,  Incentive  Matching  Allocation and
Deemed  Investment  Return with respect to such  Deferrals.

                                       23
<PAGE>

          6.2 Change-of-Form Elections and Additional Deferral Elections


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

          (b) Any  elections  made  under  Section  6.1 with  respect to amounts
     deferred after December 31, 2004, shall be irrevocable.

                                       24
<PAGE>

          6.3 Payment

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

          6.4 Unforeseeable Emergency

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

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

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

                                       25
<PAGE>

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

          6.5 Termination of Employment

          In the event of the  termination  of the  employment  of a Participant
with the Company and any parent,  subsidiary or affiliate for any reason,  prior
to the  Retirement  or death  of the  Participant,  the  vested  portion  of the
Participant  Accounts  of such  Participant  shall be paid in a lump sum to such
Participant  based  on the  Value  of such  accounts  as of the  Valuation  Date
coincident with or immediately preceding the date of distribution.  Such payment
shall  be  made  as  soon  as   administratively   practicable   following   the
Participant's   termination  date  as  determined  under  the  Company's  normal
administrative  practices.  The nonvested portion of a terminated  Participant's
Company  Account  shall be  forfeited  by the  Participant.  In the event of the
termination of employment of a SMC Participant for whom no Deferral Election was
made for a Plan Year, any Matching Allocation, Incentive Matching Allocation and
Deemed  Investment  Return allocated to such Participant shall be distributed to
the  Participant  following  termination  of employment in accordance  with this
Section  6.5.  In the  event of the  Retirement  of a  Participant  prior to the
Payment  Commencement  Date elected by the Participant  under Section  6.1(a)(i)
with respect to a Plan Year Account, distribution of such account shall commence
no later than  April 1  following  the first  anniversary  of the  Participant's
Retirement.  Notwithstanding  the  foregoing,  if  the  Participant  is  a  "key
employee"  as  defined  in Section  416(i) of the Code (but  determined  without
regard  to the 50  employee  limit on the  number  of  officers  treated  as key
employees),  payment of amounts  deferred after December 31, 2004,  shall not be
made before six months after the date of separation  from service for any reason
including Retirement (or, if earlier, the date of death of the Participant). For
this purpose,  an amount will be considered deferred after December 31, 2004, if
it is not  earned  and  vested on such  date,  and shall  include  the  Matching
Allocation,  Incentive  Matching  Allocation and Deemed  Investment  Return with
respect to such Deferrals.

                                       26
<PAGE>

          6.6 Taxes

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

          6.7 Acceleration of Payment

          The  acceleration of the time or schedule of any payment due under the
Plan is prohibited except as provided in regulations and administrative guidance
provided under Section 409A of the Code. It is not an  acceleration  of the time
or  schedule  of  payment  if the  Company  waives or  accelerates  the  vesting
requirements applicable to a benefit under the Plan.

                                       27
<PAGE>

                                  ARTICLE VII
                                 DEATH BENEFITS

          7.1 Designation of Beneficiaries

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

          7.2 Death Benefit

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


                                       28
<PAGE>

                                  ARTICLE VIII
                                     CLAIMS

          8.1 Claims Procedure

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

          8.2 Claims Review Procedure

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


                                       29
<PAGE>

                                   ARTICLE IX
                                 ADMINISTRATION

          9.1 Committee

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

          9.2 Authority

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

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

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

                                       30
<PAGE>

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

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

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


                                       31
<PAGE>

                                   ARTICLE X
                      AMENDMENT AND TERMINATION OF THE PLAN

          10.1 Amendment of the Plan

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

          10.2 Termination of the Plan

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

          10.3 No Impairment of Benefits

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


                                       32
<PAGE>

                                   ARTICLE XI
                            FUNDING AND CLAIM STATUS

          11.1 General Provisions

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

          (b) In the case of a Change of Control,  the Company shall, subject to
     the restrictions in this paragraph and in Section 11.1(a),  irrevocably set
     aside  funds  in one or more  such  grantor  trusts  in an  amount  that is
     sufficient   to  pay  each   Participant   employed  by  such  Company  (or
     beneficiary)  the net  present  value as of the date on which the Change of
     Control  occurs,   of  the  benefits  to  which   Participants   (or  their
     beneficiaries)  would be entitled  pursuant to the terms of the Plan if the
     Value of  their  Participant  Account  would be paid in a lump sum upon the
     Change of Control.

                                       33
<PAGE>

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

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

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

                                       34
<PAGE>

                                  ARTICLE XII
                       EFFECT ON EMPLOYMENT OR ENGAGEMENT

          12.1 General

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


                                       35
<PAGE>

                                  ARTICLE XIII
                                  GOVERNING LAW

          13.1 General

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

                                     * * *

                                       36
<PAGE>

                                    EXHIBIT A



                         Progress Energy Carolinas, Inc.
                      Progress Energy Service Company, LLC
                         Progress Energy Ventures, Inc.
                          Progress Energy Florida, Inc.
              Progress Fuels Corporation (corporate employees only)


                                       37