Document:

Exhibit 10c(9)

     

    Exhibit
      10c(9)

     

    PROGRESS
      ENERGY, INC.

     

    AMENDED
      AND RESTATED

     

    MANAGEMENT
      DEFERRED COMPENSATION PLAN

     

    

     

    Adopted
      as of January 1, 2000

     

    (As
      Revised and Restated effective January
      1, 2007)

     

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    
      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
                  in Control

              	 	
                2

              
	 	
                1.7

              	
                Change
                  of Form Election

              	 	
                4

              
	 	
                1.8

              	
                Change-of-Investment
                  Election

              	 	
                4

              
	 	
                1.9

              	
                Code

              	 	
                4

              
	 	
                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

              	 	
                5

              
	 	
                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

              	 	
                6

              
	 	
                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

              
	 	
                1.42

              	
                Section
                  409A

              	 	
                10

              
	 	
                1.43

              	
                Separation
                  from Service

              	 	
                10

              
	 	
                1.44

              	
                SMC
                  Participant

              	 	
                11

              
	 	
                1.45

              	
                Sponsor

              	 	
                11

              
	 	
                1.46

              	
                SSERP

              	 	
                11

              
	 	
                1.47

              	
                Valuation
                  Date

              	 	
                11

              
	 	
                1.48

              	
                Value

              	 	
                11

              
	 	
                1.49

              	
                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

              	 	
                12

              
	 	 	 	 	 
	
                ARTICLE
                  III

              	
                DEFERRAL
                  ELECTIONS

              	 	
                13

              
	 	
                3.1

              	
                Participant
                  Deferred Salary Elections

              	 	
                13

              
	 	
                3.2

              	
                Matching
                  Allocations

              	 	
                14

              
	 	
                3.3

              	
                Incentive
                  Matching Allocations

              	 	
                15

              
	 	 	 	 	 
	
                ARTICLE
                  IV

              	
                ACCOUNTS

              	 	
                16

              
	 	
                4.1

              	
                Maintenance
                  of Accounts

              	 	
                16

              
	 	
                4.2

              	
                Separate
                  Plan Year Accounts

              	 	
                16

              
	 	
                4.3

              	
                Phantom
                  Investment Subaccounts

              	 	
                16

              
	 	
                4.4

              	
                Administration
                  of Deferral Accounts

              	 	
                16

              
	 	
                4.5

              	
                Administration
                  of Company Accounts

              	 	
                17

              
	 	
                4.6

              	
                Change
                  of Phantom Investment Subaccounts and Phantom Stock Units

              	 	
                19

              
	 	
                4.7

              	
                Transferred
                  Accounts

              	 	
                19

              
	 	 	 	 	 
	
                ARTICLE
                  V

              	
                VESTING

              	 	
                21

              
	 	
                5.1

              	
                Vesting

              	 	
                21

              
	 	 	 	 	 
	
                ARTICLE
                  VI

              	
                DISTRIBUTIONS

              	 	
                22

              
	 	
                6.1

              	
                Distribution
                  Elections

              	 	
                22

              
	 	
                6.2

              	
                Change-of-Form
                  Elections and Additional Deferral Elections

              	 	
                22

              
	 	
                6.3

              	
                Payment

              	 	
                23

              
	 	
                6.4

              	
                Unforeseeable
                  Emergency

              	 	
                24

              
	 	
                6.5

              	
                
                  Separation
                    from Service

                

              	 	25
	 	
                6.6

              	
                Taxes

              	 	
                26

              
	 	 6.7    	 Acceleration
                of Payment	 	26

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	
                ARTICLE
                  VII

              	
                DEATH
                  BENEFITS

              	 	
                27

              
	 	
                7.1

              	
                Designation
                  of Beneficiaries

              	 	
                27

              
	 	
                7.2

              	
                Death
                  Benefit

              	 	
                27

              
	 	 	 	 	 
	
                ARTICLE
                  VIII

              	
                CLAIMS

              	 	
                28

              
	 	
                8.1

              	
                Claims
                  Procedure

              	 	
                28

              
	 	
                8.2

              	
                Claims
                  Review Procedure

              	 	
                28

              
	 	 	 	 	 
	
                ARTICLE
                  IX

              	
                ADMINISTRATION

              	 	
                29

              
	 	
                9.1

              	
                Committee

              	 	
                29

              
	 	
                9.2

              	
                Authority

              	 	
                29

              
	 	 	 	 	 
	
                ARTICLE
                  X

              	
                AMENDMENT
                  AND TERMINATION OF THE PLAN

              	 	
                31

              
	 	
                10.1

              	
                Amendment
                  of the Plan

              	 	
                31

              
	 	
                10.2

              	
                Termination
                  of the Plan

              	 	
                31

              
	 	
                10.3

              	
                No
                  Impairment of Benefits

              	 	
                31

              
	 	 	 	 	 
	
                ARTICLE
                  XI

              	
                FUNDING
                  AND CLAIM STATUS

              	 	
                32

              
	 	
                11.1

              	
                General
                  Provisions

              	 	
                32

              
	 	 	 	 	 
	
                ARTICLE
                  XII

              	
                EFFECT
                  ON EMPLOYMENT OR ENGAGEMENT

              	 	
                35

              
	 	
                12.1

              	
                General

              	 	
                35

              
	 	 	 	 	 
	
                ARTICLE
                  XIII

              	
                GOVERNING
                  LAW

              	 	
                36

              
	 	
                13.1

              	
                General

              	 	
                36

              
	 	 	 	 	 
	
                EXHIBIT
                  A

              	 	 	
                37

              

      

      

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

      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”).

     

    The
      Plan
      is intended to constitute a non-qualified deferred compensation plan that
      complies with Section 409A of the Code, related regulations and other guidance
      (“Section 409A”). Notwithstanding any provision of the Plan to the contrary, the
      Plan shall be construed in accordance with Section 409A. 

     

    The
      Plan
      as
      amended and restated effective January 1, 2007 shall govern deferrals under
      the
      Plan beginning January 1, 2007. 

     

    
      

    

     

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     
      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
                in
                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

               

            

    

    
      	(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

               

            

    

    
      	(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 in
                Control.

               

            

    

    A
      Change
      in Control shall not be deemed to have occurred until a majority of the members
      of the Board receive written certification from the 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.

     

    
      	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.

     

    
      	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, 2007.

     

    
      	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.

     

    
      	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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	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  	
              Section
                409A

            

    

     

    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.

    

    
      	1.43  	
              Separation
                from Service

            

    

     

    A
      participant separates from service if the Participant dies, retires or otherwise
      has a “termination of employment” with the Company, as defined for purposes of
      Section 409A.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	1.44  	
              SMC
                Participant

            

    

     

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

     

    
      	1.45  	
              Sponsor

            

    

     

    Progress
      Energy, Inc. and its successors in interest.

     

    
      	1.46  	
              SSERP

            

    

     

    The
      Supplemental Senior Executive Retirement Plan of the Company.

     

    
      	1.47  	
              Valuation
                Date

            

    

     

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

     

    
      	1.48  	
              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.

     

    
      	1.49  	
              Years
                of Service

            

    

     

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

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    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

            

    

     

    An
      Eligible Employee who is not a Participant may elect to become a Participant
      as
      of the first day of a Plan Year 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.

     

    
      	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.

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    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.

     

    (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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	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.

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	4.6  	
              Change
                of Phantom Investment Subaccounts
                and Phantom Stock Units

            

    

     

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

     

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

     

    
      	4.7  	
              Transferred
                Accounts

            

    

     

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

     

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

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    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%

               

            

    

    

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    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 paragraph 5
      thereof or the 50 employee limit on the number of officers treated as key
      employees), payment of deferred amounts shall not be made pursuant to an
      election under Section 6.1(a)(ii) above before the date that is six months
      after
      the date of Separation from Service for any reason including Retirement (or,
      if
      earlier, the date of death of the Participant). 

     

    
      	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 except as permitted by rules promulgated under
      Section 409A and consented to by the Committee. 

     

    
      	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
      similar extraordinary and 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. If the request is granted, the amounts
      distributed will not exceed the amounts necessary to satisfy the emergency
      need
      plus amounts necessary to pay taxes reasonably anticipated as result of the
      distribution, after taking into account the extent to which such hardship is
      or
      may be relieved by reason of the cessation of Deferrals for the Plan Year in
      which the distribution is made and 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).

     

    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 shall cease.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	6.5  	
              Separation
                from Service

            

    

     

    In
      the
      event of the Separation from Service 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 Separation from Service 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 paragraph 5 thereof or the 50
      employee limit on the number of officers treated as key employees), payment
      of
      deferred amounts shall not be made before the date that is six months after
      the
      date of Separation from Service for any reason including Retirement (or, if
      earlier, the date of death of the Participant). 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6.6 Taxes

     

    The
      Company shall report Deferrals in the year they occur as required by Section
      6041 and Section 6051 of the Code. 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.

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    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.

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    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.

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (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.

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    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 event” 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.

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    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
§ 1.83-3(e); and, except in the case of a Change in 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 §
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 in Control that is not a “change in the financial health” of
      the Company, as defined for purposes of Section 409A, 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 in 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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (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.

    

                   
      (f)      The
      foregoing provisions of this Article XI notwithstanding, the Company shall
      establish no grantor trust if its assets are includable in the income of
      Participants thereby pursuant to Section 409A(b). 

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    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.

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    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.

    

    

    IT
      WITNESS WHEREOF, this instrument has been executed this 15th day of December,
      2006.

    

                        PROGRESS
      ENERGY,
      INC.

    

     

                              
By:
      /s/ Robert
      B. McGehee

                                                           
Robert
      B. McGeehee

                            
      Chief Executive Officer

     

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

     

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

      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)Exhibit 10c(10)

     

    Exhibit
      10c(10)

    PROGRESS
      ENERGY, INC.

    MANAGEMENT
      CHANGE-IN-CONTROL PLAN

    

    (Amended
      and Restated Effective January 1, 2007)

    

    1.0         
      PURPOSE
      OF PLAN

    

    1.1         
      Purpose.
      The
      purpose of the Progress Energy, Inc. Management Change-in-Control Plan (the
      “Plan”) is to attract and retain certain highly qualified individuals as
      management employees of Progress Energy, Inc. and its subsidiaries, and to
      provide a benefit to such management employees if their employment is terminated
      in connection with a Change in Control (as defined below). This Plan is intended
      to qualify as a “top-hat” plan under the Employee Retirement Income Security Act
      of 1974, as amended (“ERISA”), in that it is intended to be an “employee pension
      benefit plan” (as such term is defined under Section 3(2) of ERISA) which is
      unfunded and provides benefits only to a select group of management or highly
      compensated employees of the Company or any Subsidiary. The Plan amends and
      restates the Plan as restated effective January 1, 2005 and July 10, 2002.
      The
      Carolina Power & Light Company Management Change-in-Control Plan was
      originally adopted effective January 1, 1998.

    

    2.0   DEFINITIONS

    

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

    

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

    

    2.2  
“Board”
      shall
      mean the Board of Directors of the Company.

    

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

    

    2.4          
      “Cause”
      shall
      mean:

    

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

    

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

    

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

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

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

    

    2.5          
      Change-in-Control”
      shall
      mean:

    

    
      	 	
              2.5.1

            	
              General:
                A
                Change-in-Control shall be deemed to have occurred on the earliest
                of the
                following dates:

            

    

    

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

    

    
      	 	
              (b)

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

            

    

    

    
      	 	
              (c)

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

            

    

     

    
      	 	
              (d)

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

            

    

    

    (e)          
      the
      date
      the shareholders of the Company approve a plan of complete  liquidation
      or winding-up of the Company or an agreement for the sale
      or     

                   
      disposition
      by the Company of all or substantially all of the Company’s  assets;
      or

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

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

    

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

    

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

    

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

     

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

     

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

    

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

    

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

    

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

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.12         “Effective
      Date”
      of the
      Plan, as amended and restated herein, shall
      mean January 1, 2007.

     

    2.13         “Good
      Reason” shall
      mean the occurrence of any of the following:

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

    2.19      
      “Section
      409A”
      shall
      mean 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 and by related guidance.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.20       
      “Separation
      from Service”
      shall
      mean the death, Retirement or other termination of employment with the Company
      as defined for purposes of Section 409A.

    

    2.21       
      “Specified
      Employee” shall
      mean a “key employee,” as defined in Section 416(i) of the Code without regard
      to paragraph 5 thereof or the 50-employee limit on the number of officers
      treated as key employees.

    

    2.22        
      “Subsidiary”
      shall
      mean a corporation of which the Company directly or indirectly owns more than
      fifty percent (50%) of the voting stock (meaning the capital stock of any class
      or classes having general voting power under ordinary circumstances, in the
      absence of contingencies, to elect the directors of a corporation) or any other
      business entity in which the Company directly or indirectly has an ownership
      interest of more than 50 percent.

    

    2.23      
      “Terminated
      Participant” shall
      mean a Participant whose employment is terminated as described in Section 5
      below; provided,
      however,
      that a
      Participant who is reemployed by the Company or any Subsidiary without an
      intervening break in service shall not be a Terminated Participant for purposes
      of this Plan.

    

    2.24       
      “Termination
      Date” shall
      mean the date a Terminated Participant’s employment with the Company and/or a
      Subsidiary is terminated as described in Section 5 below.

    

    2.25       
      “Trigger
      Trust”
      shall
      mean a trust as described in Section 8 below.

    

    3.0    ELIGIBILITY
      AND PARTICIPATION

    

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

    

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

    

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

    

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

    

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

    

    4.0    ADMINISTRATION

    

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

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

    

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

    

    (b)    to
      designate Participants;

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

    

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

    

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

    

    5.0    TERMINATION
      OF EMPLOYMENT

    

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

    

    6.0    CHANGE-IN-CONTROL
      BENEFITS

    

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

    

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

            

    

     

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

            

    

     

    

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

    

    Participant                 Applicable
      Percentage

    

    Tier
      I                                 
      300%

    Tier
      II                                                                        
200%

    Tier
      III                                                                       
150%  

    

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

     

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

     

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

    

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

    

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

    

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

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

    

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

    

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

    

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

    

    7.0    PARTICIPATION
      IN NONQUALIFIED PENSION AND WELFARE BENEFIT PLANS

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7.2   Supplemental
      Senior Executive Retirement Plan.
      A
      Terminated Participant who is a member of the Senior Management Committee and
      would otherwise be eligible to participate in the Company’s Supplemental Senior
      Executive Retirement Plan but for the applicable service requirements shall
      (i)
      be deemed to have a minimum of three years of service on the Senior Management
      Committee and as a Senior Vice President or more senior officer and (ii) receive
      a grant of additional service so that such Terminated Participant has
a
      minimum
      of ten years of service with the Company for benefit purposes. Such a
terminated
      Participant shall be entitled to payment of his or her benefit under the
      Supplemental Senior Executive Retirement Plan in accordance with the terms
      of
      such plan upon reaching the earliest age for receipt of benefits (including
      any
      additional credited service described in the previous sentence).

    

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

    

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

    

    
      	 	
              (a)

            	
              the
                end of the Applicable Period following the Termination
                Date;

            

    

    

    
      	 	
              (b)

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

            

    

    

           
      (c)   the
      Retirement of the Terminated Participant.

    

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

    

    
      	 	
              7.5

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

            

    

    

    Participant                     Applicable
      Period

    

    Tier
      I                              36
      Months

    Tier
      II                            
24
      Months

    Tier
      III                            18
      Months 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	
              8.0

            	
              TRIGGER
                TRUST

            

    

    

    
      	 	
              8.1

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

            

    

    

    
      	 	
              8.2

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

            

    

    

    
      	 	
              (a)

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

            

    

    

    
      	 	
              (b)

            	
              under
                which all Participants as of the Change-in-Control Date are beneficiaries;
                

            

    

    

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

    

    (d)    none
      of
      the assets of which shall be includable in the income of Participants solely
      as
      a result of Section 409A of the Code.

    

    9.0    CLAIMS

    

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

    

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

    

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

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    10.0  
TAXES

    

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

    

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

    

    11.0    ADDITIONAL
      PAYMENTS

    

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

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

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

    

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

    

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

    

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

    

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

     

        11.4       
      Adjustment.
      If it
      is established
      pursuant to a final determination of a court or an Internal Revenue
      Service proceeding
      or the opinion
      of Independent Counsel that the Excise Tax is less than the amount taken into
      account under Section 11.1 above, such Participant shall repay to the Company
      within 30 days of such Participant’s receipt of notice of such final
      determination or opinion the portion of the Gross-Up
      Payment attributable to such reduction (plus the portion of the Gross-Up Payment
      attributable to the Excise Tax and federal, state and local income tax imposed
      on the Gross-Up Payment being repaid by such Participant if such repayment
      results in a reduction in Excise Tax or a federal, state and local income tax
      deduction) plus any interest received by such Participant on the amount of
      such
      repayment. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    If
      it is
      established pursuant to a final determination of a court
      or
      an Internal Revenue Service
      proceeding or the opinion of independent Counsel that the Excise Tax exceeds
      the
      amount taken into account hereunder (including by reason of any payment the
      existence or amount of which cannot be determined at the time of the Gross-Up
      Payment), the Company shall make an additional Gross-Up Payment in respect
      of
      such excess within 30 days of the Company’s receipt of
      notice
      of such final determination or opinion.

    

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

    

    12.0        
      TERM
      OF PLAN; AMENDMENT AND TERMINATION

    

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

    

    13.0       
      COMPLIANCE
      WITH SECTION 409A

    

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

    

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

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

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

    

    14.0        
      MISCELLANEOUS

    

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

    

    14.2       
      No
      Right, Title, or Interest in Company Assets.
      Participants shall have no right, title, or interest whatsoever in or to any
      assets of the Company or any investments which the Company may make to aid
      it in
      meeting its obligations under the Plan. Nothing contained in the Plan, and
      no
      action taken pursuant to its provisions, shall create or be construed to create
      a trust of any kind, or a fiduciary relationship between the Company and any
      Participant, Beneficiary, legal representative or any other person. To the
      extent that any person acquires a right to receive payments from the Company
      under the Plan, such right shall be no greater than the right of an unsecured
      general creditor of the Company. Subject to Section 8 above, all payments to
      be
      made hereunder shall be paid from the general funds of the Company and no
      special or separate fund shall be established and no segregation of assets
      shall
      be made to assure payment of such amounts except as expressly set forth in
      the
      Plan.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

    

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

    

    14.5       
      Governing
      Law.
      The Plan
      shall be governed by and construed in accordance with the laws of the State
      of
      North Carolina without reference to principles of conflict of laws, except
      as
      superseded by applicable federal law.

    

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

    

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

    

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

    

    

    IN
      WITNESS WHEREOF, this instrument has been executed this 15th day of December,
      2006.

    

                        PROGRESS
      ENERGY,
      INC.

    

    

                              
By:
      /s/ Robert
      B. McGehee

                                                                 
      Robert B. McGehee

                          Chief
      Executive
      Officer

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