Document:

Exhibit 10c(16)

    EXHIBIT
      A

    TO

    2002
      EQUITY INCENTIVE PLAN

    

    EXECUTIVE
      AND KEY MANAGER PERFORMANCE SHARE SUB-PLAN

    

    (Effective
      January 1, 2005)

    

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

    

    Section
      1. Definitions

    

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

    

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

    

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

    

    1.3 “EBITDA”
      means earnings before interest, taxes, depreciation, and amortization as
      determined from time to time by the Committee.

    

    1.4 “EBITDA
      Growth” means the percentage increase (if any) in EBITDA for any Year, as
      compared to the previous Year as determined from time to time by the
      Committee.

    

    1.5 “Peer
      Group” means the peer group of utilities designated by the Committee prior
      to the beginning of the Performance Period for which an Award is granted.

    

    1.6 “Performance
      Period”
for
      purposes of this Sub-Plan means three consecutive Years beginning with the
      Year
      in which an Award is granted.

    

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

    
      
         

        

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

    1.9 “Retire”
or
      “Retirement”
means
      termination of employment on or after:

    

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

    

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

    

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

    

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

    

    1.11 “Total
      Shareholder Return”
means
      the total percentage return realized by the owner of a share of stock during
      a
      relevant Year or any part thereof. Total Shareholder Return is equal to the
      appreciation or depreciation in value of the stock (which is equal to the
      closing value of the stock on the last trading day of the relevant period minus
      the closing value of the stock on the last trading day of the preceding Year)
      plus the dividends declared during the relevant period, divided by the closing
      value of the stock on the last trading day of the preceding Year.

    

    1.12 “Year”
means
      a
      calendar year.

    

    Section
      2. Sub-Plan Participation and Awards

    

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

    

    2.2 Awards.
      Subject
      to any adjustments to be made under Section 2.5, the Compensation Committee
      may,
      in its sole discretion, grant Awards to some or all of the Participants in
      the
      form of a specific number of Performance Shares. The target and maximum value
      of
      any Award granted to any Participant in any calendar Year will be based upon
      the
      following:

    
      
         

        

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    
      	
              Participant

            	
              Target
                Award

            	
              Maximum
                Award

            
	
              CEO*

            	
              290%
                of Salary

            	
              362.5%
                of Salary

            
	
              COO*

            	
              200%
                of Salary

            	
              250%
                of Salary

            
	
              Presidents*/Executive
                VPs*

            	
              133%
                of Salary

            	
              166.25%
                of Salary

            
	
              Senior
                VPs*

            	
              110%
                of Salary

            	
              137.5%
                of Salary

            
	
              VP/Department
                Heads**

              Level
                I

              Level
                II

              Level
                III

            	
               

              100%
                of Salary

              80%
                of Salary

              60%
                of Salary

            	
               

              125%
                of Salary

              100%
                of Salary

              75%
                of Salary

            
	
              Key
                Managers

            	
              55%
                of Salary

            	
              68.75%
                of Salary

            

    

    *
      Senior
      Management Committee level position

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

    

    

    2.3 Award
      Valuation at Grant.
      In
      calculating the value of an Award for purposes of Section 2.2, the value of
      each
      Performance Share shall be equal to the closing price of a share of Stock on
      the
      last trading day of the Year before the Performance Period begins. The
      Participant’s Salary shall be determined as of the January 31 preceding the date
      the Award is granted, or such other time as is determined in the discretion
      of
      the Committee. Each Award is deemed to be granted on the day that it is approved
      by the Committee.

    

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

    

    2.5 Performance
      Schedule and Calculation of Awards.
      Except
      as otherwise provided, each Award shall become vested on January 1 immediately
      following the end of the applicable Performance Period, subject to adjustment
      in
      accordance with the following procedure:

    

    (a) One-half
      of the Award shall be adjusted as follows:

    

    (i) The
      Total
      Shareholder Return for the Company shall be determined for each Year during
      the
      Performance Period, and shall then be averaged (the “Company TSR”).

    

    (ii) The
      average Total Shareholder Return for the Peer Group utilities shall be
      determined for each Year during the Performance Period, and shall then be
      averaged ( the “Peer Group TSR”). The two highest and two lowest performing
      utilities within the Peer Group shall be excluded for purposes of determining
      the Peer Group TSR.

    

    (iii) The
      Peer
      Group TSR for the Performance Period shall be subtracted from the Company TSR
      for the Performance Period. The remainder shall then be used to determine the
      number of vested Performance Shares using the Performance Schedule, based on
      one-half of the number of Performance Shares in the Participant’s
      Account.

    

    (b) The
      other
      one-half of the Award shall be adjusted as follows:

    

    (i) The
      EBITDA Growth for the Company shall be determined for each Year during the
      Performance Period, and shall then be averaged (the “Company EBITDA
      Growth”).

    

    (ii) The
      average EBITDA Growth for the Peer Group utilities shall be determined for
      each
      Year during the Performance period, and shall be averaged (the “Peer Group
      EBITDA Growth”). The two highest and two lowest performing utilities within the
      Peer Group shall be excluded for purposes of determining the Peer Group EBITDA
      Growth.

    

    (iii) The
      Peer
      Group EBITDA Growth for the Performance Period shall be subtracted from the
      Company EBITDA Growth for the Performance Period. The remainder shall then
      be
      used to determine the number of vested Performance Shares using the Performance
      Schedule, based on one-half of the number of Performance Shares in the
      Participant’s Account.

    

    (c) The
      total
      number of vested Performance Shares payable to the Participant shall be the
      sum
      of the amounts determined in accordance with subsections (a) and (b)
      above.

    

    (d) The
      Performance Measures and the Performance Schedule will not change during any
      Performance Period with regard to any Awards that have already been granted.
      The
      Committee reserves the right to modify or adjust the Performance Measures and/or
      the Performance Schedule in the Committee’s sole discretion with regard to
      future grants.

    

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

    

    (a) 100%
      during the month of April of the Year immediately following expiration of the
      Performance Period, or as soon as practical thereafter; or

    

    (b) in
      accordance with an alternative payment election made by Participant
      substantially in the form attached hereto as Attachment 2, provided that such
      election is executed by the Participant and returned to the Vice President,
      Human Resources Department no later than the end of the first Year of the
      Performance Period. Once made, this election is irrevocable. A deferral election
      may only be made by a Participant who is employed as a Department Head or in
      a
      higher position on the date the deferral election is solicited. 

    

    2.7 Grantor
      Trust.
      In the
      case of a Change in Control, the Company shall, subject to the restrictions
      in
      this Section 2.7 and Section 13.12 of the Plan, irrevocably set aside shares
      of
      Stock or cash in one or more such grantor trusts in an amount that is sufficient
      to pay each Participant employed by such Company (or Designated Beneficiary),
      the net present value as of the date on which the Change in Control occurs,
      of
      the earned benefits to which Participants (or their Designated Beneficiaries)
      would be entitled pursuant to the terms of the Plan if the value of their
      deferral account (if any) established pursuant to section 2.6(b) would be paid
      in a lump sum upon the Change in Control. Any such trust shall be subject to
      the
      claims of the general creditors of the Sponsor or Company in the event of
      bankruptcy or insolvency of the Sponsor or Company.

    

    Section
      3. Early Vesting and Forfeiture

    

    3.1 Retirement,
      Death or Divestiture.
      If the
      Participant Retires or dies prior to expiration of the Performance Period,
      or
      terminates employment as the result of a Divestiture during a Performance
      Period, any outstanding Awards of the Participant for any unexpired Performance
      Period shall immediately become vested. Payment of the outstanding Awards of
      such Participant shall be subject to the following special
      provisions:

    

    (a) In
      the
      event of the Retirement of the Participant, the Participant’s outstanding Awards
      shall be adjusted in accordance with Section 2.5 and paid in accordance with
      Section 2.6 following the end of the Performance Period for the Award; provided,
      that if the Participant has elected to defer payment until a specified date
      certain and retires before the date specified in the deferral election, the
      Company will commence distribution of the Award as soon as practical on or
      after
      the later of: (i) the April 1 following the first anniversary of the date of
      Retirement, or (ii) the April 1 of the year following the end of the Performance
      Period, even though said date is earlier than the date specified in the deferral
      election. 

    

    (b) In
      the
      event of the death of the Participant, or termination of employment as the
      result of a Divestiture during a Performance Period, the Participant’s
      outstanding Awards shall be adjusted and paid in accordance with Section
      3.3.

    

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

    

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

    

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

    

    3.3 Adjustment
      of Awards.
      Any
      Award which is vested prior to the end of the Performance Period due to the
      death of the Participant, termination of employment as a result of a
      Divestiture, or Change in Control during the Performance Period, shall be
      adjusted pursuant to the following procedure:

    

    (a) One-half
      of the Award shall be adjusted as follows:

    

    (i) The
      Company TSR shall be determined for each Year or partial Year, and a weighted
      average Company TSR shall be calculated for the period between the first day
      of
      the Performance Period and the date the Participant dies, the date of
      termination as a result of the Divestiture or the date that the Award is vested
      pursuant to Section 3.2 (the “Prorated Company TSR”).

    

    (ii) The
      average Peer Group TSR shall be determined for each Year or partial Year, and
      a
      weighted average Peer Group TSR shall be calculated for the period between
      the
      first day of the Performance Period and the date the Participant dies, the
      date
      of termination as a result of the Divestiture or the date that the Award is
      vested pursuant to Section 3.2 (the “Prorated Peer Group TSR”). The two highest
      and two lowest performing utilities within the Peer Group shall be excluded
      for
      purposes of determining the Peer Group TSR.

    

    (iii) The
      Prorated Peer Group TSR for the Performance Period shall be subtracted from
      the
      Prorated Company TSR for the Performance Period. The remainder shall then be
      used to determine the vested Performance Shares using the Performance Schedule,
      based on one-half of the number of Performance Shares in the Participant’s
      Account.

    

    (b) The
      other
      one-half of the Award shall be adjusted as follows:

    

    (i) The
      Company EBITDA Growth shall be determined for each Year or partial Year, and
      a
      weighted average Company EBITDA Growth shall be calculated for the period
      between the first day of the Performance Period and the end of the calendar
      quarter immediately preceding the date the Participant dies, the date of
      termination as a result of the Divestiture or the date that the Award is vested
      pursuant to Section 3.2 (the “Prorated Company EBITDA Growth”).

    

    (ii) The
      average Peer Group EBITDA Growth shall be determined for each Year or partial
      Year, and a weighted average Peer Group EBITDA Growth shall be calculated for
      the period between the first day of the Performance Period and the end of the
      calendar quarter immediately preceding the date the Participant dies, the date
      of termination as a result of the Divestiture or the date that the Award is
      vested pursuant to Section 3.2 (the “Prorated Peer Group EBITDA Growth”). The
      two highest and two lowest performing utilities within the Peer Group shall
      be
      excluded for purposes of determining the Peer Group EBITDA Growth.

    

    (iii) The
      Prorated Peer Group EBITDA Growth for the Performance Period shall be subtracted
      from the Prorated Company EBITDA Growth for the Performance Period. The
      remainder shall then be used to determine the vested Performance Shares using
      the Performance Schedule, based on one-half of the number of Performance Shares
      in the Participant’s Account.

    

    (c) The
      total
      number of vested Performance Shares payable to the Participant shall be the
      sum
      of the amounts determined in accordance with subsections (a) and (b)
      above.

    

    (d) In
      the
      event of the death of the Participant, payment shall be made within a reasonable
      time after the Participant dies to the Participant’s Designated Beneficiary. In
      the event of the termination of employment of the Participant as a result of
      a
      Divestiture, payment shall be made within a reasonable time after the
      termination of the Participant, notwithstanding any election under Section
      2.6;
      provided, that if the Participant is a “key employee” as defined in Section
      416(i) of the Code (but determined without regard to the 50 employee limit
      on
      the number of officers treated as key employees), payment shall not be made
      before six months after the date of separation from service (or, if earlier,
      the
      date of death of the Participant) and the amount of any payment made in cash
      (i.e.,
      with
      respect to Awards granted prior to January 1, 2005) shall be based upon the
      value of the Performance Shares as determined by reference to the closing price
      of the Stock on the trading day occurring on or next following the date that
      is
      six months after the date of separation of the Participant (or, if earlier
      the
      date of death of the Participant). If the Award is vested pursuant to Section
      3.2, the Award shall be paid within a reasonable time after the date of vesting,
      notwithstanding any election under Section 2.6. The Company will issue one
      share
      of Stock in payment for each Performance Share (rounded to the nearest whole
      Performance Share) credited to the Account of the Participant. 

    

    3.4 Termination
      of Employment.
      In the
      event that a Participant’s employment with the Company terminates for any reason
      other than as provided in this Section 3, any Award made to the Participant
      which has not vested as provided in Section 2 or Section 3 shall be forfeited.
      Any vested Awards shall be paid within a reasonable time after termination
      (for
      reasons other than Retirement), notwithstanding any election to defer the
      payment of any Award under Section 2.6. However, if the Participant is a “key
      employee” as defined in Section 416(i) of the Code (but determined without
      regard to the 50 employee limit on the number of officers treated as key
      employees), payment shall not be made before six months after the date of
      separation from service for any reason including Retirement (or, if earlier,
      the
      date of death of the Participant) and the amount of any payment made in cash
      (i.e.,
      with
      respect to Awards granted prior to January 1, 2005) shall be based upon the
      value of the Performance Shares as determined by reference to the closing price
      of the Stock on the trading day occurring on or next following the date that
      is
      six months after the date of separation of the Participant (or, if earlier
      the
      date of death of the Participant).

    

    Section
      4. Non-Assignability of Awards

    

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

    

    Section
      5. Amendment and Termination

    

    This
      Sub-Plan shall be subject to amendment, suspension, or termination as provided
      in the Plan.

    

    

    
      
        
 

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    ATTACHMENT
      1

    

    PERFORMANCE
      SCHEDULE

    

    PERFORMANCE
      SHARE CALCULATION1

    

    

    

    The
      following table shall be used to adjust one half of the Participant’s Award in
      accordance with Section 2.5(a) or Section 3.3(a) of the Plan:

    

    
      	
               

              If
                the Company TSR2 minus

              the
                Peer Group TSR2 is:

            	
              Then
                the 50% of the vested

              Performance
                Share Award

              shall
                be multiplied by:

            
	
              5%
                or better

            	
              2.00

            
	
              4.0
                - 4.99

            	
              1.75

            
	
              3.0
                - 3.99

            	
              1.50

            
	
              2.0
                - 2.99

            	
              1.25

            
	
              1.0
                - 1.99

            	
              1.00

            
	
              (0.99)
                - 0.99

            	
              .50

            
	
              (1.0)
                - (1.99)

            	
              .25

            
	
              2.0)
                or less

            	
              0.00

            

    

    
      
         

        

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    The
      following table shall be used to adjust one half of the Participant’s Award in
      accordance with Section 2.5(b) or Section 3.3(b) of the Plan:

    

    
      	
               

              If
                the Company EBITDA Growth2 minus

              the
                Peer Group EBITDA Growth2 is:

            	
              Then
                the 50% of the vested

              Performance
                Share Award

              shall
                be multiplied by:

            
	
              5%
                or better

            	
              2.00

            
	
              4.0
                - 4.99

            	
              1.75

            
	
              3.0
                - 3.99

            	
              1.50

            
	
              2.0
                - 2.99

            	
              1.25

            
	
              1.0
                - 1.99

            	
              1.00

            
	
              0.00
                - 0.99

            	
              .50

            
	
              Less
                than 0

            	
              0

            

    

    

    1
      The
      number of Performance Shares as calculated above shall be paid in accordance
      with the provisions of Section 2.5 and 2.6 of the Sub-Plan.

    

    2
      For
      purposes of Section 3, the Prorated Company TSR and EBITDA Growth and Prorated
      Peer Group TSR and EBITDA Growth shall be used, and the number of Performance
      Shares as calculated above shall be paid in accordance with the provisions
      of
      the Sub-Plan.

    

    

    ATTACHMENT
      2

    Performance
      Share Sub-Plan

    200_
      Deferral Election Form

    

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

    

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

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

    

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

    

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

    

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

    of
      the
      Performance Period:              
      4 / 1
      /         

    (month/day/year)

     

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

    

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

    

    

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

    

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

    

    [
      ] a
      single
      payment                     [
      ] annual
      payments commencing on the date set forth above and payable

                  
on
      the anniversary date thereof
      over:

    

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

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

    

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

    

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

    

    

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

    

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

    

    

                             

    (Signature)      (Date)

                                                                                                                                     

    (Print
      Name)      (Company
      Location)

    

    Received:

    Agent
      of
      Chief Executive Officer

    

                                                                                                   

    (Signature)      (Date)Exhibit 10c(36)

                                                                                                Exhibit
    10c(36)

    

    

    

    

    

    

    

    AMENDED
      MANAGEMENT INCENTIVE COMPENSATION PLAN

    OF

    PROGRESS
      ENERGY, INC.

    

    

    

    Amendment,
      effective April 1, 2005

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
      22 was amended to read as follows:

    
      	22.  	
              “Retirement”:
                A Participant’s termination of employment 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) age 50 with
                5 years
                of service as of March 31, 2005, and where the Participant elects
                during
                the period beginning March 15, 2005, and ending April 15, 2005, to
                retire
                no later than December 1, 2005, pursuant to the terms of the Voluntary
                Enhanced Retirement Program (a “VERP Participant”). Notwithstanding any
                other provision of the Plan to the contrary, a VERP Participant may
                elect
                on or before December 31, 2005, to (a) commence payment of the Plan
                Deferral Account as of (i) April 1, 2006, (ii) April 1, 2007, or
                (iii) April 1, 2011 (each a “Payment Commencement Date”) and (b) provide
                for the payment of the Plan Deferral Account in the form of (i) a
                lump sum
                or (ii) annual installments over a period extending from two years
                to ten
                years following the Payment Commencement Date. In the event no other
                payment election is made by the VERP Participant prior to January
                1, 2006,
                the VERP Participant shall be deemed to have elected for payment
                of the
                Plan Deferral Account to be made in accordance with the deferral
                election
                submitted by the VERP Participant; provided, that if the VERP Participant
                is a “key employee” as defined in Section 416(i) of the Code (but
                determined without regard to the 50 employee limit on the number
                of
                officers treated as key employees), the Payment Commencement Date
                shall
                not be earlier than six months after the date of Retirement of the
                VERP
                Participant (or, if earlier, the date of death of the Participant).
                A VERP
                Participant may not make any election with respect to the payment
                of the
                Plan Deferral Account after December 31,
                2005.

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