Document:

Exhibit 10.1

     

    Exhibit
      10.1

    Progress
      Energy, Inc.

    

    RESTRICTED
      STOCK UNIT AWARD AGREEMENT

    

    Non-transferable

    

    GRANT
      TO

    

    _______________________

    (“Grantee”)

    

    by
      Progress Energy, Inc. (the “Sponsor”) of ____________

    

    Restricted
      Stock Units (the “Units”) representing the right to earn, on a one-for-one
      basis, shares of the Sponsor’s common stock (“Stock”), pursuant to and subject
      to the provisions of the Progress Energy, Inc. Amended and Restated 2002 Equity
      Incentive Plan (the “Plan”) and to the terms and conditions set forth on the
      following pages of this award agreement (“Agreement”). Capitalized terms used
      herein and not otherwise defined shall have the meanings assigned to such terms
      in the Plan. 

    

    By
      accepting this award, Grantee shall be deemed to have agreed to the terms and
      conditions of this Agreement and the Plan. Unless vesting is accelerated as
      provided in section 2 of the Terms and Conditions or otherwise in the discretion
      of the Sponsor’s Committee on Organization and Compensation (“Committee”), the
      Units shall vest in full (become non-forfeitable) in accordance with the
      following schedule: 

    

    
      	
               

              Continued
                Employment after Grant Date

            	 	
               

              Percent
                of Units Vested

            
	
              3
                years

            	 	
              33%

            
	
              4
                years

            	 	
              66%

            
	
              5
                years

            	 	
              100%

            

    

    

    IN
      WITNESS WHEREOF, Progress Energy, Inc. has caused this Agreement to be executed
      as of the Grant Date, as indicated below.

    

    PROGRESS
      ENERGY, INC.

    

    By:
      _________________________________________

     

    

    Grant
      Date: __________________________________

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    TERMS
      AND CONDITIONS

    

    1.
      Grant
      of Units.
      Each
      Unit
      represents the right to receive one share of the Sponsor’s Stock on the terms
      set forth in this Agreement. 

    

    2.
      Vesting
      of Units.
      The
      Units have been credited to a bookkeeping account on behalf of Grantee. The
      Units will vest and become non-forfeitable on the earliest to occur of the
      following (the “Vesting Date”):

    

    
      	
              (a)

            	
              As
                to the percentages of the Units specified on page 1 hereof, on the
                respective dates specified on page 1
                hereof;

            

    

    
      	
              (b)

            	
              As
                to all of the Units, the termination of Grantee’s employment with the
                Company due to death or disability at least one year following the
                Grant
                Date; 

            

    

    (c)
      As to
      all of the Units, the termination of Grantee’s employment with the Company due
      to Divestiture; 

    
      	
              (d)

            	
              As
                to all of the Units, upon the occurrence of a Change in Control,
                if
                the
                Units are not assumed by the surviving company or equitably converted
                or
                substituted; 

            

    

    
      	
              (e)

            	
              As
                to all of the Units, upon
                termination of Grantee’s employment without Cause at any time after a
                Change in Control;
                or

            

    

    
      	
              (f)

            	
              Upon
                Grantee’s Retirement, a prorata percentage of the then-unvested Units, if
                any, will vest based upon the number of full months elapsed between
                the
                Grant Date and the date of Retirement, divided by
                60.

            

    

    

    If
      Grantee’s employment terminates prior to the Vesting Date for any reason other
      than as described in (b), (c) or (e) or (f) above, Grantee shall forfeit all
      right, title and interest in and to the then unvested Units as of the date
      of
      such termination and the unvested Units will be reconveyed to the Sponsor
      without further consideration or any act or action by Grantee.

    

    3.
      Conversion
      to Stock.
      Unless
      the Units are forfeited prior to the Vesting Date as provided in Section 2
      above, the Units will be converted to Shares on the later of (i) the Vesting
      Date, or (ii) if required to comply with Code Section 409A and Treasury
      regulations and guidance with respect to such law, the six-month anniversary
      of
      Grantee’s separation from service (the “Conversion Date”). Such Shares will be
      registered on the books of the Sponsor in Grantee’s name as of the Conversion
      Date and delivered to Grantee as soon as practical thereafter, in certificated
      or uncertificated form, as the Participant shall direct. 

    

    4. Dividend
      Equivalents.
      If and
      when cash dividends or other cash distributions are paid with respect to the
      Stock while the Units are outstanding, the dollar amount of such dividends
      or
      distributions with respect to the number of Shares then underlying the Units
      will be paid to Grantee at or about the same time that dividends are paid to
      shareholders of the Sponsor. 

    

    5.
      Rights
      as Stockholder.
      Except
      for the right to receive Dividend Equivalents as provided in Section 4 above,
      Grantee shall not have any rights as a stockholder of the Sponsor with respect
      to the Units, including voting rights, until conversion of the Units to shares
      of Stock. Upon conversion of the Units into shares of Stock, Grantee will obtain
      full voting and other rights as a stockholder of the Sponsor.

    

    6.
      Restrictions
      on Transfer.
      The
      Units may not be sold, transferred, exchanged, assigned, pledged, hypothecated
      or otherwise encumbered to or in favor of any party other than the Company,
      or
      be subjected to any lien, obligation or liability of Grantee to any other party
      other than the Company.

    

    7.
      No
      Right of Continued Employment.
      Nothing
      in this Agreement shall interfere with or limit in any way the right of the
      Company to terminate Grantee’s employment at any time, nor confer upon Grantee
      any right to continue in the employ of the Company.

    

    8.
      Payment
      of Taxes.
      The
      Company has the authority and the right to deduct or withhold, or require
      Grantee to remit to the employer, an amount sufficient to satisfy federal,
      state, and local taxes (including Grantee’s FICA obligation) required by law to
      be withheld with respect to any taxable event arising as a result of the vesting
      or settlement of the Units. The obligations of the Sponsor under this Agreement
      will be conditional on such payment or arrangements, and the Sponsor, and,
      where
      applicable, its Affiliates will, to the extent permitted by law, have the right
      to deduct any such taxes from any payment of any kind otherwise due to Grantee.
      Grantee hereby authorizes the Company to instruct a third party broker or plan
      administrator to sell Shares earned by Grantee upon settlement of the Units
      in
      an amount sufficient to satisfy the amount required to be withheld for tax
      purposes, and to remit the cash proceeds from such sale to the Company.

    

    9.
      Amendment.
      The
      Committee may amend, modify or terminate this Agreement without approval of
      Grantee; provided, however, that such amendment, modification or termination
      shall not, without Grantee’s consent, reduce or diminish the value of this award
      determined as if it had been fully vested (i.e., as if all restrictions on
      the
      Units hereunder had expired) on the date of such amendment or
      termination.

    

    10.
      Plan
      Controls.
      The
      terms contained in the Plan are incorporated into and made a part of this
      Agreement and this Agreement shall be governed by and construed in accordance
      with the Plan. In the event of any actual or alleged conflict between the
      provisions of the Plan and the provisions of this Agreement, the provisions
      of
      the Plan shall be controlling and determinative.

    

    11.
      Successors.
      This
      Agreement shall be binding upon any successor of the Sponsor, in accordance
      with
      the terms of this Agreement and the Plan.

    

    12.
      Severability.
      If any
      one or more of the provisions contained in this Agreement is invalid, illegal
      or
      unenforceable, the other provisions of this Agreement will be construed and
      enforced as if the invalid, illegal or unenforceable provision had never been
      included.

    

    13.
      Notice.
      Notices
      and communications under this Agreement must be in writing and either personally
      delivered or sent by registered or certified United States mail, return receipt
      requested, postage prepaid. Notices to the Sponsor must be addressed
      to:

    Progress
      Energy, Inc.

    410
      South
      Wilmington Street

    Raleigh,
      NC 27601

    Attn:
      General Counsel

    or
      any
      other address designated by the Sponsor in a written notice to Grantee. Notices
      to Grantee will be directed to the address of Grantee then currently on file
      with the Sponsor, or at any other address given by Grantee in a written notice
      to the Sponsor.Exhibit 10.2

     

    Exhibit
      10.2

    EXHIBIT
      C

    TO

    2002
      EQUITY INCENTIVE PLAN

    

    EXECUTIVE
      AND KEY MANAGER 2007 PERFORMANCE SHARE SUB-PLAN

    

    This
      Executive and Key Manager 2007 Performance Share Sub-Plan (“Sub-Plan”) sets
      forth rules and regulations adopted by the Committee for issuance of Performance
      Share Awards under Section 10 of the 2002 Equity Incentive Plan (“Plan”). This
      Sub-Plan shall apply to Awards granted effective on and after January 1, 2007.
      In addition, the rules and regulations relating to the deferral of Awards set
      forth in this Sub-Plan shall apply to any Awards which become vested on or
      after
      January 1, 2005. Capitalized terms used in this Sub-Plan that are not defined
      herein shall have the meaning given in the Plan. In the event of any conflict
      between this Sub-Plan and the Plan, the terms and conditions of the Plan shall
      control. No Award Agreement shall be required for participation in this
      Sub-Plan.

    

    

    Section
      1. Definitions

    

    When
      used
      in this Sub-Plan, the following terms shall have the meanings as set forth
      below, and are in addition to the definitions set forth in the
      Plan.

    

    
      	
              1.1

            	
              “Account”
                means the account used to record and track the number of Performance
                Shares granted to each Participant as provided in Section
                2.4.

            

    

    

    
      	
              1.2

            	
              “Award”
                as used in this Sub-Plan means each aggregate award of Performance
                Shares
                as provided in Section 2.2.

            

    

    

    
      	
              1.3

            	
              “Early
                Vesting Event”
                with respect to a Performance Award means the Participant’s death,
                Retirement, or termination as a result of a Divestiture, or any of
                the
                vesting events provided in Section 3.2 in connection with a Change
                in
                Control.

            

    

    

    
      	
              1.4

            	
              “Performance
                Period”
                for purposes of this Sub-Plan means three consecutive Years beginning
                with
                the Year in which an Award is granted; provided, however that there
                shall
                be two phase-in Performance Periods, one of which is calendar year
                2007
                only and one of which is calendar years 2007 and
                2008.

            

    

    

    
      	
              1.5

            	
              “Performance
                Schedule”
                means Attachment 1 to this Sub-Plan, which sets forth the Performance
                Measures applicable to this
                Sub-Plan.

            

    

    

    
      	
              1.6

            	
              “Performance
                Share”
                for purposes of this Sub-Plan means each unit of an Award granted
                to a
                Participant, the value of which is equal to the value of Company
                Stock as
                hereinafter provided.

            

    

    

    
      	
              1.7

            	
              “Prorated
                Total Shareholder Return”
                for purposes of this Sub-Plan means the weighted average of the Total
                Shareholder Return over a Performance Period calculated for the period
                between the first day of the Performance Period and the date of the
                applicable Early Vesting Event (other than
                Retirement).

            

    

    

    
      	
              1.8

            	
              “Retire”
                or “Retirement”
                means Separation from Service on or
                after:

            

    

    

    (a)
      becoming 65 years old with at least 5 years of service;

    

    (b)
      becoming 55 years old with at least 15 years of service; or

    

    (c)
      achieving at least 35 years of service, regardless of age.

    

    
      	
              1.9

            	
              “Salary”
                means the regular base rate of compensation payable by the Company
                to a
                Participant on an annual basis. Salary does not include bonuses,
                if any,
                or incentive compensation, if any. Such compensation shall not be
                reduced
                by any deferrals made under any other plans or programs maintained
                by the
                Company.

            

    

    

    
      	
              1.10

            	
              “Section
                409A”
                means Section 409A of the Code, or any successor section under the
                Code,
                as amended and as interpreted by final or proposed regulations promulgated
                thereunder from time to time.

            

    

    

    
      	
              1.11

            	
              “Separation
                from Service”
                means the death, Retirement or other separation from service with
                the
                Company as defined for purposes of Section 409A of the
                Code.

            

    

    

    
      	
              1.12

            	
              “Total
                Shareholder Return”
                means the total percentage return realized by the owner of a share
                of
                stock during a relevant Year or any part thereof. Total Shareholder
                Return
                is equal to the appreciation or depreciation in value of the stock
                (which
                is equal to the average closing value of the stock over the last
                ten
                trading days of the relevant period minus the average closing value
                of the
                stock over the last ten trading days of the preceding Year) plus
                the
                dividends declared during the relevant period, divided by the average
                closing value of the stock over the last ten trading days of the
                preceding
                Year. For purposes of this Plan, Total Shareholder Return is calculated
                using (i) an adjusted end-of-period stock price based on a constant
                price
                to earnings ratio, which is equal to the average of the price to
                earnings
                ratio over the last ten trading days of the Year preceding the Year
                in
                which a grant takes place; and (ii) an earnings amount equal to the
                Company’s ongoing earnings (excluding non-core earnings) for the Year
                preceding the Year in which a grant takes
                place.

            

    

    

    
      	
              1.13

            	
              “Year”
                means a calendar year.

            

    

    

    Section
      2. Sub-Plan Participation and Awards

    

    2.1 Participant
      Selection.
      Participants under this Sub-Plan shall be selected by the Committee in its
      sole
      discretion as provided in Section 4.2 of the Plan.

    

    2.2 Awards.
      The
      Compensation Committee may, in its sole discretion, grant Awards to some or
      all
      of the Participants in the form of a specific number of Performance Shares.
      Except as described below, the target and maximum value of any Award granted
      to
      any Participant in any calendar Year will be based upon the
      following:

     

    
      	
              Participant

            	
              Target
                Award 

            	
              Maximum
                Award 

            
	
              CEO*

            	
              233%
                of Salary

            	
              291.25%
                of Salary

            
	
              COO*

            	
              184%
                of Salary

            	
              230%
                of Salary

            
	
              CFO*

            	
              133%
                of Salary

            	
              166.25%
                of Salary

            
	
              Presidents*/Executive
                VPs*

            	
              117%
                of Salary

            	
              146.25%
                of Salary

            
	
              Senior
                VPs*

            	
              100%
                of Salary

            	
              125%
                of Salary

            
	
              VP/Department
                Heads**

              Level
                I

              Level
                II 

            	
               

              80%
                of Salary

              67%
                of Salary

            	
               

              100%
                of Salary

              83.75%
                of Salary

            
	
              Key
                Managers

            	
              67%
                of Salary

            	
              83.75%
                of Salary

            

    

    *
      Senior
      Management Committee level position

    **Levels
      shall be determined in the sole discretion of the Committee

    

    Notwithstanding
      the above limitation, the Committee may grant Awards in an amount up to three
      times the Maximum Award in 2007, with vesting to occur ratably in 2008, 2009
      and
      2010.

    

    2.3 Award
      Valuation at Grant.
      In
      calculating the value of an Award for purposes of Section 2.2, the value of
      each
      Performance Share shall be equal to the closing price of a share of Stock on
      the
      last trading day of the Year before the Performance Period begins. The
      Participant’s Salary shall be determined as of the January 1 preceding the date
      the Award is granted, or such other time as is determined in the discretion
      of
      the Committee. Each Award is deemed to be granted on the day that it is approved
      by the Committee.

    

    2.4 Accounting
      and Adjustment of Awards.
      The
      number of Performance Shares awarded to a Participant shall be recorded in
      a
      separate Account for each Participant. The number of Performance Shares recorded
      in a Participant’s Account shall be adjusted to reflect any splits or other
      adjustments in the Stock in accordance with Section 6.4 of the Plan. If any
      cash
      dividends are paid on the Stock, the number of Performance Shares in each
      Participant’s Account shall be increased by a number equal to (i) the dividend
      multiplied by the number of Performance Shares in each Participant’s Account,
      divided by (ii) the closing price of a share of Stock on the payment date of
      the
      dividend. No adjustment shall be made to any outstanding Awards of a Retired
      Participant for cash dividends paid on Stock during the Performance Period
      following the Retirement of the Participant.

    

    2.5 Performance
      Schedule and Calculation of Awards.
      

    

    (a) The
      Committee shall, as soon as practicable after the end of the Performance Period,
      but in no event later than April 15 of the first Year immediately following
      expiration of the Performance Period, certify as to (i) the Company’s average
      Total Shareholder Return over the Performance Period, and (ii) the applicable
      percentage of the Performance Shares vesting in accordance with the Performance
      Schedule contained in Attachment 1 hereto. 

    

    (b) Notwithstanding
      the Company’s average Total Shareholder Return over the Performance Period, or
      the Prorated Total Shareholder Return, as the case may be:

    

    (i)
      with
      respect to any Participant holding an Award for the 2005-2007 Performance
      Period, the number of Performance Shares earned by that Participant with respect
      to his or her Award for the 2007 Performance Period shall be reduced to reflect
      the value of any Performance Shares earned or received with respect to the
      2005-2007 Performance Share Award; and

    

    (ii)
      with
      respect to any Participant holding an Award for the 2006-2008 Performance
      Period, the number of Performance Shares earned by that Participant with respect
      to his or her Award for the 2007-2008 Performance Period shall be reduced to
      reflect the value of any Performance Shares earned or received with respect
      to
      the 2006-2008 Performance Share Award; and

    

    (iii)
      the
      Committee may in its sole discretion, with respect to any or all Participants,
      elect to vest fewer Performance Shares than indicated by the Performance
      Schedule. This subsection 2.5(b)(iii) shall cease to apply upon the occurrence
      of a Change in Control.

    

    (c) Except
      with respect to the adjustments required or permitted by subsection (b) above,
      the Performance Measures and the Performance Schedule will not change during
      any
      Performance Period with regard to any Awards that have already been granted.
      The
      Committee reserves the right to modify or adjust the Performance Measures and/or
      the Performance Schedule in the Committee’s sole discretion with regard to
      future grants.

    

    (d)
      Except in the case of an Early Vesting Event, each Award shall become vested
      on
      January 1 immediately following the end of the applicable Performance Period.
      In
      no event shall such “normal” vesting date be construed to be earlier than
      January 1 immediately following the end of the applicable Performance
      Period.

    

    2.6 Payment
      of Awards.
      Except
      as provided in Section 3, Awards shall be paid after expiration of the
      Performance Period. The Company will issue one share of Stock in payment for
      each vested Performance Share (rounded to the nearest whole Performance Share)
      credited to the Account of the Participant. Payment shall be made as
      follows:

    

    (a) Normal
      Payment.
      Unless
      deferred as provided below, 100% of the vested Performance Shares for a
      Performance Period shall be converted to shares of Stock no later than April
      15
      of the Year immediately following expiration of the Performance Period and
      will
      be delivered to Participants as soon as practical thereafter, in certificated
      or
      uncertificated form, as the Participant shall direct.

    

    (b) Deferred
      Payment.
      Any
      Participant who is employed as a Department Head or in a higher position as
      of
      the beginning of a Performance Period may elect to defer the conversion and
      payment of his or her Performance Shares for that Performance Period by
      executing a deferral election substantially in the form attached hereto as
      Attachment 2, and returning it to the Vice President, Human Resources Department
      no later than the end of the first Year of the Performance Period. Once made,
      this election shall be irrevocable except as may be permitted by rules
      promulgated under Section 409A and allowed by the Committee. 

    

    2.7 Grantor
      Trust.
      In the
      case of a Change in Control, the Company shall, subject to the restrictions
      in
      this Section 2.7 and Section 13.12 of the Plan, irrevocably set aside shares
      of
      Stock or cash in one or more such grantor trusts in an amount that is sufficient
      to pay each Participant employed by such Company (or Designated Beneficiary),
      the net present value as of the date on which the Change in Control occurs,
      of
      the earned benefits to which Participants (or their Designated Beneficiaries)
      would be entitled pursuant to the terms of the Plan if the value of their
      deferral account (if any) established pursuant to section 2.6(b) would be paid
      in a lump sum upon the Change in Control. Any such trust shall be subject to
      the
      claims of the general creditors of the Sponsor or Company in the event of
      bankruptcy or insolvency of the Sponsor or Company. Notwithstanding the
      foregoing provisions of this Section 2.7, the Company shall establish no such
      trust if the assets thereof shall be includable in the income of Participants
      thereby pursuant to Section 409A(b).

    

    Section
      3. Early Vesting and Forfeiture

    

    3.1 Retirement,
      Death or Divestiture.
      If the
      Participant Retires or dies prior to expiration of the Performance Period,
      or
      terminates employment as the result of a Divestiture during a Performance
      Period, any outstanding Awards of the Participant for any unexpired Performance
      Period shall vest as of the date of such Early Vesting Event. In the event
      of
      the death of the Participant (whether before or after Retirement), or
      termination of employment as the result of a Divestiture during a Performance
      Period, the Participant’s outstanding Awards shall be calculated on the basis of
      the Prorated Total Shareholder Return. In each such case, the early-vesting
      Awards shall be paid in accordance with Section 3.3.

    

    3.2 Change
      in Control.
      In the
      event of a Change in Control prior to the expiration of the Performance Period,
      any outstanding Award of the Participant for any unexpired Performance Period
      shall be treated as follows:

     

    (a) Awards
      Assumed by Acquiror.
      If the
      Award is assumed by the successor to the Sponsor as of the date of the Change
      in
      Control, each outstanding Award not previously forfeited shall continue to
      vest
      and shall be paid pursuant to the terms of this Sub-Plan; provided, however,
      that in the event the employment of the Participant is terminated by the Company
      without Cause following the Change in Control, any outstanding Award shall
      become vested as of the termination date, and the aggregate value of the Award
      shall be paid in accordance with Section 3.3.

    

    (b) Awards
      Not Assumed by Acquiror.
      If the
      Award is not assumed by the successor to the Sponsor as of the date of the
      Change in Control, any outstanding Award shall become vested as of the date
      of
      the Change in Control, and the aggregate value of the Award shall be paid in
      accordance with Section 3.3.

    

    3.3 Payment
      of Awards Due to Early Vesting Event.
      Any
      Award that is vested prior to the end of the Performance Period due to an Early
      Vesting Event shall be paid as follows:

    

    (a) Retirement.
      In the
      event of the Retirement of the Participant, the Participant’s outstanding Awards
      shall be paid in accordance with Section 2.6 following the end of the
      Performance Period for the Award; provided, that if the Participant has elected
      to defer payment until a specified date certain and Retires before the date
      specified in the deferral election, the Company will commence distribution
      of
      the Deferred Award as soon as practicable on or after the later of: (i) the
      April 1 following the first anniversary of the date of Retirement, or (ii)
      the
      April 1 of the year following the end of the Performance Period, even though
      said date is earlier than the date specified in the deferral election. If the
      Participant dies following Retirement but prior to the expiration of the
      Performance Period, the Participant’s outstanding vested Awards shall be paid to
      the Participant’s Designated Beneficiary within a reasonable time after the
      Participant’s death. 

    

    (b) Death.
      In the
      event of the death of the Participant, payment shall be made to the
      Participant’s Designated Beneficiary within a reasonable time after the
      Participant’s death, notwithstanding any election to defer the payment of any
      Award under Section 2.6(b). 

    

    (c) Divestiture.
      In the
      event of the termination of employment of the Participant as a result of a
      Divestiture, payment shall be made within a reasonable time after the date
      of
      termination, notwithstanding any election to defer the payment of any Award
      under Section 2.6(b). 

    

    (d) Change
      in Control.
      If the
      Award vests pursuant to Section 3.2(b) or by reason of a termination of
      employment without Cause following a Change in Control pursuant to Section
      3.2(a), the Award shall be paid within a reasonable time after the date of
      vesting, notwithstanding any election to defer the payment of any Award under
      Section 2.6(b). 

    

    (e) 409A
      Delay.
      Notwithstanding subsections (a), (c) or (d) above, if the Participant is a
“key
      employee” as defined in Section 416(i) of the Code (but determined without
      regard to paragraph 5 thereof or the 50 employee limit on the number of officers
      treated as key employees), then payment shall not be made before the date that
      is six months after the date of Separation from Service (or, if earlier, the
      date of death of the Participant) and the amount of any payment made in cash
      (i.e.,
      with
      respect to Awards granted prior to January 1, 2005) shall be based upon the
      value of the Performance Shares as determined by reference to the closing price
      of the Stock on the trading day occurring on or next following the date that
      is
      six months after the date of Separation from Service of the Participant (or,
      if
      earlier the date of death of the Participant). 

    

    3.4 Other
      Termination of Employment.
      In the
      event that a Participant’s employment with the Company terminates for any reason
      other than as provided in this Section 3, any Award made to the Participant
      that
      has not vested as provided in Section 2 or Section 3 shall be forfeited.

    

    Section
      4. Payment of Taxes

    

    The
      Company has the authority and the right to deduct or withhold, or require a
      Participant to remit to the employer, an amount sufficient to satisfy federal,
      state, and local taxes (including the Participant’s FICA obligation) required by
      law to be withheld with respect to any taxable event arising as a result of
      the
      vesting or settlement of the Performance Shares. The obligations of the Sponsor
      under this Sub-Plan will be conditional on such payment or arrangements, and
      the
      Sponsor, and, where applicable, its Affiliates will, to the extent permitted
      by
      law, have the right to deduct any such taxes from any payment of any kind
      otherwise due to the Participant. By participating in this Sub-Plan, each
      Participant thereby authorizes the Company to instruct a third party broker
      or
      plan administrator to sell Shares earned by the Participant upon settlement
      of
      the Performance Shares in an amount sufficient to satisfy the amount required
      to
      be withheld for tax purposes, and to remit the cash proceeds from such sale
      to
      the Company. 

    

    Section
      5. Non-Assignability of Awards

    

    The
      Awards and any right to receive payment under the Plan and this Sub-Plan may
      not
      be anticipated, alienated, pledged, encumbered, or subject to any charge or
      legal process, and if any attempt is made to do so, or a Participant becomes
      bankrupt, then in the sole discretion of the Committee, any Award made to the
      Participant which has not vested as provided in Sections 2 and 3 shall be
      forfeited.

    

    Section
      6. Amendment and Termination

    

    This
      Sub-Plan shall be subject to amendment, suspension, or termination as provided
      in the Plan. No action to amend, suspend or terminate this Sub-Plan shall permit
      the acceleration of the time or schedule of the payment of any Award granted
      under this Sub- Plan (except as provided in regulations under Section
      409A).

    

    Section
      7. Section 409A

    

    This
      Sub-Plan shall be administered in compliance with Section 409A.

    

    

    

    IN
      WITNESS WHEREOF, this instrument has been executed this ______ day of
      __________, 2007.

    

    PROGRESS
      ENERGY, INC.

    

    

    By: ______________________________

    Robert
      B.
      McGehee

    Chief
      Executive Officer

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ATTACHMENT
      1

    

    PERFORMANCE
      SCHEDULE

    

    

    PERFORMANCE
      SHARE CALCULATION

    for
      the 2007, 2007-2008, and 2007-2009 Performance Periods

    

    
      	
              Total
                Shareholder Return(1)(2)

            	
              <5%

            	
              5%

            	
              8%

            	
              10.5%
                or >

            
	
              %
                of Target Award Earned(2)

            	
              0%

            	
              50%

            	
              100%

            	
              200%

            

    

    1
      For
      purposes of Section 3 of the Sub-Plan, the Prorated Total Shareholder Return
      shall be used.

    2
      Straight
      line interpolation between points

    

    PERFORMANCE
      SHARE CALCULATION

    for
      Post-2007 Performance Awards

    

    
      	
              Total
                Shareholder Return(1)(2)

            	
              <__(3)__%

            	
              ___(3)__%

            	
              ___(3)__%

            	
              __(3)_%
                or >

            
	
              %
                of Target Award Earned(2)

            	
              0%

            	
              50%

            	
              100%

            	
              200%

            

    

    1
      For
      purposes of Section 3 of the Sub-Plan, the Prorated Total Shareholder Return
      shall be used.

    2
      Straight
      line interpolation between points

    3
      Total
      Shareholder Return performance metrics to be established by the Committee on
      an
      annual basis

    

    Committee
      Discretion.
      Unless a
      Change in Control shall have occurred, the Committee retains the sole discretion
      to reduce the number of Performance Shares earned, with respect to any or all
      Participants, if the formula would result in payouts that the Committee deems
      to
      be disproportionate to Company performance or
      other
      circumstances merit a reduction in the amounts earned.

    

    Payment
      of Awards.
      The
      number of Performance Shares earned shall be paid in accordance with the
      provisions of Section 2.6 or 3.3 of the Sub-Plan, as appropriate.
      

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ATTACHMENT
      2

    

    PERFORMANCE
      SHARE SUB-PLAN

    200_
      DEFERRAL ELECTION FORM

    

    As
      a
      Participant in the Performance Share Sub-Plan of the 2002 Equity Incentive
      Plan
      ("Sub-Plan"), I hereby elect to defer payment of my Award otherwise payable
      to
      me by the Company and attributable to services to be performed by me during
      the
      Performance Period beginning on January __, 200__. This election shall apply
      to
[CHECK
      ONE]:

    

    [
      ] 100%
      of
      the Award   [
      ] 50%
      of the Award

    [
      ] 75%
      of
      the Award   [
      ] 25%
      of the Award

    

    Upon
      vesting, I understand that my Award shall continue to be recorded in my Account
      as Performance Shares as described in the Sub-Plan and adjusted to reflect
      the
      payment and reinvesting of the Company’s common stock dividends over the
      deferral period, until paid in full.

    

    I
      hereby
      elect to defer receipt (or commencement of receipt) of my Award until the date
      specified below, or as soon as practical thereafter
      [CHECK ONE]:*

    

    [
      ] a
      specific date certain at least 5 years from expiration

    of
      the
      Performance
      Period:                                                                                            
 4/1/            

    (month/day/year)

    

    [
      ] the
      April
      1 following the date of Retirement, or if later, the date which is six months
      after the date of my Separation from Service for any reason (including
      Retirement), if I am a “key employee” as defined in Section 416(i) of the Code
      (but determined without regard to paragraph 5 thereof or the 50 employee limit
      on the number of officers treated as key employees).

    

    [
      ] the
      April
      1 following the first anniversary of my date of Retirement

    

    *
      Notwithstanding any election above, if I elect a date certain distribution
      and I
      Retire before that date certain, I understand that the Company will commence
      distribution of my Account as soon as practicable on or after the later of:
      (i)
      the April 1 following the first anniversary of the date of Retirement, or (ii)
      the April 1 of the year following the end of the Performance Period, even though
      said date is earlier than 5 years from the expiration of the Performance
      Period.

    

    I
      hereby
      elect to be paid as described in the Sub-Plan in the form of [CHECK
      ONE]:

    

    [
      ] a
      single
      payment

    

    [
      ]
 annual
      payments commencing on the date set forth above and payable on the anniversary
      date thereof over:

    

    [
      ] a two
      year period [ ] a three year period

    [
      ] a
      four year period [ ] a five year period

    

    I
      understand that I will receive “earnings” on those deferred amounts when they
      are paid to me.

    

    I
      understand that the election made as indicated herein is irrevocable and that
      all deferral elections are subject to the provisions of the Sub-Plan, including
      provisions that may affect timing of distributions.

    

    I
      understand that this deferral election is subject to the requirements of Section
      409A of Code, and regulations and other guidance issued thereunder. The Company
      makes no representation or guarantee that any tax treatment, including, but
      not
      limited to, federal, state and local income, or estate and gift tax treatment,
      will be applicable with respect to the amounts deferred. The Company shall
      have
      no responsibility for the tax consequences that I may incur as a result of
      Section 409A, regulations or guidance issued thereunder, or any other provision
      of the Internal Revenue Code. I understand it is my responsibility to consult
      a
      legal or tax advisor regarding the tax effects of this deferral election. I
      further acknowledge and agree that the Company may (but shall not be required
      to) modify this election as necessary to comply with Section 409A and any
      guidance or regulations issued thereunder. I further agree to cooperate in
      any
      manner necessary to ensure that this election is in compliance with Section
      409A
      and any guidance or regulations issued thereunder.

    

    I
      understand and acknowledge that my interests herein and my rights to receive
      distribution of the deferred amounts may not be anticipated, alienated, sold,
      transferred, assigned, pledged, encumbered, or subjected to any charge or legal
      process, and if any attempt is made to do so, or I become bankrupt, my interest
      may be terminated by the Committee, in its sole discretion, may cause the same
      to be held or applied for the benefit of one or more of my dependents or make
      any other disposition of such interests that it deems appropriate. I further
      understand that nothing in the Sub-Plan shall be interpreted or construed to
      require the Company in any manner to fund any obligation to me, or to my
      beneficiary(ies) in the event of my death.

    

    

                                                                                                                                                         

    (Signature)      (Date)

    

    
                                                                                                                                                           

    

    (Print
      Name)     (Company
      Location)

    

    Received:

    Agent
      of
      Chief Executive Officer

     

     

    
                                                                                                                                                           

    

                                                   
      (Signature)      (Date)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}]]