Exhibit 10(i)

Amended and Restated Progress Energy, Inc. Restoration Retirement Plan

Carolina Power & Light Company established the Carolina Power & Light Company Restoration Retirement Plan (the "Plan"), effective as of January 1, 1998 ("Effective Date"), and amended and restated the Plan effective January 1, 1999 and 2000.

The Sponsor hereby restates and amends the Plan effective as of July 10, 2002.

ARTICLE I

PURPOSE

The purpose of the Plan is to provide a means by which certain employees may be provided benefits which otherwise would be provided under the Retirement Plan, in the absence of certain restrictions imposed by applicable law on benefits which may be provided under the Retirement Plan. The Plan is intended to constitute an unfunded retirement plan for 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.

ARTICLE II

DEFINITIONS

Capitalized terms which are not defined herein shall have the meaning ascribed to them in the Retirement Plan.

2.1 "Actuarial Value" shall mean an equivalent lump sum value as of the Benefit Commencement Date using the average 30-year Treasury Rate for the month of August immediately preceding the calendar year the determination is made and the GAR 94 mortality table (50% male, 50% female).

2.2 "Affiliated Company" shall mean 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, but only to the extent so required.

2.3 "Benefit Commencement Date" shall mean the effective date for the payment of a Participant's Accrued Benefit under the Retirement Plan, whether in the form of a lump sum or an annuity.

2.4 "Board" shall mean the Board of Directors of the Sponsor.

2.5 "Change in Control" shall occur 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 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 Sponsor approve a plan of complete liquidation or winding-up of the Sponsor or an agreement for the sale or disposition by the Sponsor of all or substantially all of the Sponsor'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 on Organization and Compensation of the Board that such event has occurred. Any determination that such an event has occurred shall, if made in good faith on the basis of information available at that time, be conclusive and binding on the Board, the Sponsor, the Company, the Participants and their beneficiaries for all purposes of the Plan.

2.6 "Code" shall mean the Internal Revenue Code of 1986, as amended.

2.7 "Committee" shall mean a committee selected by the Plan Administrator to hear claim disputes under Article IV of the Plan.

2.8 "Company" shall mean 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, adopts the Plan and is included in Appendix A, as in effect from time to time. Appendix A shall set forth any limitations

imposed on employees of Affiliated Companies that adopt the Plan including any limitations on benefit accruals, notwithstanding any provision in the Plan to the contrary.

2.9 "Compensation and Benefit Limitations" shall mean (a) the limitation on compensation under the Retirement Plan in accordance with Section 401(a)(17) of the Code and (b) any limits on benefits paid under the Retirement Plan that are necessary for compliance with Section 415 of the Code.

2.10 "Continuing Directors" shall mean the members of the Board as of July 10, 2002; provided, however, that any person becoming a director subsequent to such date whose election or nomination for election was supported by 75 percent or more of the directors who then comprised Continuing Directors shall be considered to be a Continuing Director.

2.11 "Deferrals" shall mean a Participant's deferrals of compensation under the MDCP to the extent not utilized in calculating a Participant's Accrued Benefit under the Retirement Plan.

2.12 "Eligible Employee" shall mean any member of the Retirement Plan who is not a Participant in the Sponsor's Supplemental Senior Executive Retirement Plan and who has not retired or terminated his or her employment with the Company prior to the Effective Date.

2.13 "MDCP" shall mean the Progress Energy, Inc. Amended and Restated Management Deferred Compensation Plan.

2.14 "Participant" shall mean an Eligible Employee who participates in the Plan pursuant to Article III. An Eligible Employee shall remain a Participant under the Plan until the earlier of (a) all amounts payable on his or her behalf under the Plan have been paid, (b) the Eligible Employee no longer has a Restoration Accrued Benefit, (c) the Eligible Employee has a Termination without a Vested Restoration Accrued Benefit, or (d) the Eligible Employee becomes a Participant in the Sponsor's Supplemental Senior Executive Retirement Plan.

2.15 "Restoration Accrued Benefit" shall mean, as of any determination date, the excess of (a) a Participant's Accrued Benefit calculated under the Retirement Plan (1) assuming a Participant's Compensation under the Retirement Plan includes Deferrals of a Participant and (ii) without regard to the Compensation and Benefit Limitations, over (b) a Participant's Accrued Benefit calculated under the Retirement Plan. For purposes of this Section 2.15, a Participant's Accrued Benefit for purposes of clauses (a) and (b) above shall be calculated in the form of a Single Life Annuity for a Participant who does not have a Spouse and in the form of a 50% Qualified Joint and Survivor Annuity for a Participant who has a Spouse, with such calculation performed without regard to any other form of benefit elected by a Participant under the Retirement Plan.

2.16 "Retirement Plan" shall mean the Progress Energy Pension Plan, as it may be amended from time to time, or any successor plan.

2.17 "Sponsor" shall mean Progress Energy, Inc.

2.18 "Spouse" shall mean the spouse of a Participant as would be determined at the applicable time under the definition of Spouse in the Retirement Plan (or any successor provisions).

2.19 "Termination" shall mean a termination of employment with the Sponsor and all Affiliated Companies.

2.20 "Vested Restoration Accrued Benefit" shall mean a Participant's Restoration Accrued Benefit when the Participant becomes fully vested under the provisions of the Retirement Plan (or any successor provisions) or as provided in Article VI of the Plan.

Unless the context clearly indicates to the contrary in interpreting the Plan, any references to the masculine alone shall include the feminine and the singular shall include the plural.

ARTICLE III

PARTICIPATION AND BENEFITS

3.1 Participation. An Eligible Employee will participate in the Plan when he or she has a Restoration Accrued Benefit.

3.2 Amount of Benefit Payable. Subject to the forfeiture provisions of
Section 3.4 and lump sum payment provisions of Section 3.5 of the Plan, a Participant who becomes eligible for the payment of a benefit under the Retirement Plan, shall be entitled to monthly benefit payments commencing on his Benefit Commencement Date based on the Participant's Restoration Accrued Benefit calculated immediately prior to the Benefit Commencement Date and actuarially adjusted as if an annuity were being paid under the Retirement Plan as of the Benefit Commencement Date. The monthly payment shall be in the form of a Single Life Annuity if the Participant has no Spouse and in the form of a 50% Joint and Survivor Annuity if the Participant has a Spouse, with the Spouse determined at the Benefit Commencement Date entitled to any survivor benefit upon the death of the Participant.

3.3 Pre-Retirement Death Benefit. Subject to the provisions of Section 3.5, if a surviving Spouse of a deceased Participant would have been eligible for a preretirement death benefit under the Retirement Plan (i.e., the Spouse being married to the Participant for a one-year period prior to the date of death), then upon such Participant's death, such Spouse shall be entitled to a monthly benefit payment under the Plan commencing on the first day of the month in which he or she would be entitled to commence receiving a monthly death benefit under the Retirement Plan, equal to the amount, if any, by which (a) exceeds (b) each month, where (a) is the Spouse's monthly death benefit that would be payable in accordance with the provisions of the Retirement Plan determined as if (i) the Participant's Compensation under the Retirement Plan included Deferrals and (ii) the Compensation and Benefit Limitations did not apply, and (b) is the actual monthly death benefit payable under the Retirement Plan, and assuming for purposes of clauses (a) and (b) that the Spouse elected a monthly annuity as a death benefit under the Retirement Plan.

3.4 Other Termination of Employment; Forfeitures. Neither Eligible Employees, Participants nor their Spouses or Beneficiaries are entitled to any benefits under the Plan except as otherwise provided in this Article III and

under Article VI of the Plan. Any Participant who terminates employment with the Sponsor and any of its Affiliated Companies prior to a Change in Control and without being 100% vested under the Retirement Plan shall not be eligible to receive any benefits under the Plan and shall forfeit his or her Restoration Accrued Benefit. Any Participant ceasing to be an Eligible Employee because he or she becomes a Participant in the Supplemental Senior Executive Retirement Plan shall forfeit his or her Restoration Accrued Benefit.

Notwithstanding any other provision of the Plan, no benefit shall be payable under the Plan with respect to an Eligible Employee whose employment with the Sponsor or any of its Affiliated Companies is terminated for Cause. As used herein, the term "Cause" shall be limited to (a) action by the Eligible Employee involving willful malfeasance having a material adverse effect on the Sponsor or any of its Affiliated Companies (b) substantial and continuing willful refusal by the Eligible Employee to perform the duties ordinarily performed by an employee in the same position and having similar duties as the Eligible Employee, (c) the Eligible Employee being convicted of a felony, or (d) willful failure to comply with the Sponsor or the applicable Affiliated Company's Code of Conduct or other Policy or Procedure.

3.5 Lump Sum Payments. The Committee shall provide for the payment under the Plan of a cash lump sum amount in lieu of the annuity otherwise payable under Sections 3.2 or 3.3, if the annuity amount to be paid is less that $100 per month. For a Participant (or spouse) whose benefit under the Retirement Plan is based upon the Participant's Cash Balance Account, the lump sum shall be equal to what the Restoration Accrued Benefit would be if "Cash Balance Account" were substituted for "Accrued Benefit" in Section 2.15 and Restoration Accrued Benefit referred to a dollar amount. For a Participant (or spouse) whose benefit under the Retirement Plan is based on the Final Average Pay Formula Pension, the lump sum shall be equal to the Actuarial Value of the annuity payments that would otherwise be made to the Participant (or spouse) under Sections 3.2 or 3.3, as the case may be.

ARTICLE IV

PLAN ADMINISTRATION

4.1 Administration. The Plan shall be administered by the Sponsor's Vice President, Human Resources (the "Plan Administrator"). The Plan Administrator and the Committee shall have full authority to administer and interpret the Plan, determine eligibility for benefits, make benefit payments and maintain records hereunder, all in their sole and absolute discretion, subject to the allocation of responsibilities set forth below.

4.2 Delegated Responsibilities. The Plan Administrator shall have the authority to delegate any of his or her responsibilities to such persons as he or she deems proper.

4.3 Claims.

(a) Claims Procedure. If any Participant, Spouse or Beneficiary has a claim for benefits which is not being paid, such claimant may file with the Plan Administrator a written claim setting forth the amount and nature of the claim, supporting facts, and the claimant's address. The Plan

Administrator 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 claim review procedure under the Plan.

(b) 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 V

MISCELLANEOUS

5.1 Amendment and Termination. The Board may amend, modify or terminate the Plan at any time, provided, however, that no such amendment or termination shall reduce any Participant's Vested Restoration Accrued Benefit under the Plan as of the date of such amendment or termination, unless at the time of such amendment or termination, affected Participants and spouses become entitled to an amount equal to the equivalent actuarial value, to be determined in the sole discretion of the Committee, of such Vested Restoration Accrued Benefit under another plan, program or practice adopted by a Company. In the event the Plan is terminated, the Sponsor shall determine whether to pay Vested Restoration Accrued Benefits in the form of an actuarial equivalent lump sum payment or defer the payment of Vested Restoration Accrued Benefits until the payment of Early Retirement Pensions or Normal Retirement Pensions under the Retirement Plan.

5.2 Source of Payments. Each Company will pay with respect to its own Eligible Employees all benefits arising under the Plan and all costs, charges and expenses relating thereto out of its general assets.

5.3 Non-Assignability of Benefits. Except as otherwise required by law, neither any benefit payable hereunder nor the right to receive any future benefit under the Plan may 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 a person eligible for any benefits under the Plan becomes bankrupt, the interest under the Plan of the person affected may be terminated by the Plan Administrator which, in his or her sole discretion, may cause the same to be held or applied for the benefit of one or more of the dependents of such person or make any other disposition of such benefits that it deems appropriate.

5.4 Plan Unfunded. Nothing in the Plan shall be interpreted or construed to require a Company in any manner to fund any obligation to the Participants, terminated Participants, or beneficiaries hereunder. Nothing contained in the Plan nor any action taken hereunder shall create, or be construed to create, a trust of any kind, or a fiduciary relationship between a Company and the Participants, terminated Participants, beneficiaries, or any other persons. Any funds which may be accumulated by a Company in order to meet any obligations under the Plan shall for all purposes continue to be a part of the general assets of a Company; provided, however, that a Company may establish a trust to hold funds intended to provide benefits hereunder to the extent the assets of such trust become subject to the claims of the general creditors of such Company in the event of bankruptcy or insolvency of such Company. To the extent that any Participant, terminated Participant, or beneficiary acquires aright to receive payments from a Company under the Plan, such rights shall be no greater than the rights of any unsecured general creditor of such Company.

5.5 Applicable Law. All questions pertaining to the construction, validity and effect of the Plan shall be determined in accordance with the laws of the State of North Carolina to the extent not preempted by Federal law.

5.6 Limitation of Rights. The Plan is a voluntary undertaking on the part of the Sponsor and each Company. Neither the establishment of the Plan nor the payment of any benefits hereunder, nor any action of the Sponsor, a Company or the Plan Administrator shall be held or construed to be a contract of employment between the Sponsor, a Company and any Eligible Employee or to confer upon any person any legal right to be continued in the employ of the Sponsor or a Company. The Sponsor and each Company expressly reserves the right to discharge, discipline or otherwise terminate the employment of any Eligible Employee at any time. Participation in the Plan gives no right or claim to any benefits beyond those which are expressly provided herein and all rights and claims hereunder are limited as set forth in the Plan.

5.7 Severability. In the event any provision of the Plan shall be held illegal or invalid, or the inclusion of any Participant would serve to invalidate the Plan as an unfunded plan for a select group of management or highly compensated employees under ERISA, then the illegal or invalid provision shall be deemed to be null- and void, and the Plan shall be construed as if it did not contain that provision and in the case of the inclusion of any such Participant, a separate plan, with the same provisions as the Plan, shall be deemed to have been established for the Participant or Participants ultimately determined not to constitute a select group of management or highly compensated employees.

5.8 Headings. The headings to the Articles and Sections of the Plan are inserted for reference only, and are not to be taken as limiting or extending the provisions hereof.

5.9 Incapacity. If the Plan Administrator shall determine that a Participant, or any other person entitled to a benefit under the Plan (the "Recipient") is unable to care for his or her affairs because of illness, accident, or mental or physical incapacity, or because the Recipient is a minor, the Plan Administrator may direct that any benefit payment due the Recipient be paid to his or her duly appointed legal representative, or, if no such representative is appointed, to the Recipient's spouse, child, parent, or other

blood relative, or to a person with whom the Recipient resides or who has incurred expense on behalf of the Recipient. Any such payment so made shall be a complete discharge of the liabilities of the Plan with respect to the Recipient.

5.10 Binding Effect and Release. Obligations incurred by the Sponsor or a Company pursuant to this Plan shall be binding upon the Sponsor or a Company, its successors and assigns, and inure to the benefit of the Participant or his Eligible Spouse. All persons accepting benefits under the Plan shall be deemed to have consented to the terms of the Plan. Any payment or distribution to any person entitled to benefits under the Plan shall be in full satisfaction of all claims against the Plan, the Committee, and the Sponsor and any Company arising by virtue of the Plan.

ARTICLE VI

CHANGE IN CONTROL

Upon the occurrence of a Change in Control, the following provisions shall become effective immediately:

6.1 Vesting. There shall be full Vesting of each Participant's Restoration Accrued Benefit, regardless of any termination of employment prior to eligibility for an Early Retirement Pension under the Retirement Plan, if he or she is otherwise vested under the Retirement Plan.

6.2 No Reduction Benefit. No amendment or termination of the Plan may reduce any Participant's Restoration Accrued Benefit as of the date of such amendment or termination.

6.3 Contributions to Trust. The Sponsor shall irrevocably set aside funds in one or more grantor trusts, subject to the provisions of Section 5.4, in an amount that is sufficient to pay each Participant (or Spouse) the benefits accrued under the Plan as of the date of the Change in Control. Any such trust shall be subject to the claims of the general creditors of the Sponsor in the event of the bankruptcy or insolvency of the Sponsor.

APPENDIX A

North Carolina Natural Gas Company solely with respect to accrued benefits on or after January 1, 2000 so that no Restoration Accrued Benefit is calculated under the Plan with respect to employment prior to January 1, 2000.

Progress Energy Florida, Inc. (non-bargaining employees) solely with respect to accrued benefits on or after January 1, 2002 so that no Restoration Accrued Benefit is calculated under the Plan with respect to employment prior to January 1, 2002.

Progress Telecom Corporation solely with respect to accrued benefits on or after January 1, 2002 so that no Restoration Accrued Benefit is calculated under the Plan with respect to employment prior to January 1, 2002.

Progress Fuels Corporation (corporate employees) solely with respect to accrued benefits on or after January 1, 2002 so that no Restoration Accrued Benefit is calculated under the Plan with respect to employment prior to January 1, 2002.

Progress Energy Carolinas, Inc.

Progress Energy Service Company, LLC

Progress Energy Ventures, Inc.

Exhibit 10(ii)

PROGRESS ENERGY, INC.
NON-EMPLOYEE DIRECTOR STOCK UNIT PLAN

1.0 RECITALS

1.1 Whereas, Carolina Power & Light Company ("CP&L") adopted the Carolina Power & Light Company Retirement Plan for Outside Directors (the "Directors Retirement Plan") in 1986, which provided for a fixed-dollar retirement benefit for non-employee directors of CP&L following their termination of service as a member of the Board of Directors of CP&L.

1.2 Whereas, effective January 1, 1998, CP&L froze the Directors Retirement Plan so that no further benefits would accrue under such plan, and adopted the Carolina Power & Light Company Non-Employee Director Stock Unit Plan (the "Plan"), the purpose of which was to provide deferred compensation to the non-employee directors of CP&L based on the value of CP&L common stock.

1.3 Whereas, sponsorship of the Plan was transferred to CP&L Energy, Inc. effective August 1, 2000, and the name of the Plan was subsequently changed to Progress Energy, Inc. Non-Employee Director Stock Unit Plan.

1.4 Whereas, the Company desires to amend and restate the Plan to reflect the new name of the Plan and to provide additional protection to participants in the event of a Change of Control.

1.5 Now, therefore, effective July 10, 2002, the Company adopts this amended and restated Progress Energy, Inc. Non-Employee Director Stock Unit Plan.

2.0 PURPOSE

2.1 Purpose. The purpose of the Plan is to attract and retain highly qualified individuals as non-employee directors of the Company, and to provide deferred compensation to the Company's non-employee directors based on the value of the Company's stock.

3.0 DEFINITIONS

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

3.1 "Annual Stock Unit Grant" shall mean a grant of Stock Units as described in
Section 5.2 below.

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

3.3 "Change of Control" shall mean the earliest of the following dates:

(1) 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

(2) 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

(3) 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

(4) 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 of Directors; or

(5) 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

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

A Change of Control shall not be deemed to have occurred until a majority of the members of the Board of Directors receive written certification from the Committee that one of the events set forth in this Section 3.3 as occurred. Any determination that an event described in this Section 3.3 has occurred shall, if made in good faith on the basis of information available

at that time, be conclusive and binding on the Board of Directors, the Company, the Participants and their beneficiaries for all purposes of the Plan.

3.4 "Committee" shall mean the Board's Committee on Organization and Compensation.

3.5 "Common Stock" shall mean the common stock of the Company.

3.6 "Company" shall mean Progress Energy, Inc., a North Carolina corporation, including any successor entity.

3.7 "Continuing Directors" shall mean the members of the Board as of July 10, 2002; provided, however, that any person becoming a director subsequent to such date whose election or nomination for election was supported by 75 percent or more of the directors who then comprised Continuing Directors shall be considered to be a Continuing Director.

3.8 "Distribution Date" shall mean the later of (i) the date a Participant is no longer a member of the Board or (ii) the date such Participant attains age 65.

3.9 "Effective Date" shall mean January 1, 1998.

3.10 "Common Stock Value" shall mean:

(1) the average of the highest and lowest selling prices of Common Stock on the relevant date (or on the last preceding trading date if Common Stock was not traded on the relevant date) if Common Stock is readily tradable on a national securities exchange or other market system; or

(2) an amount determined in good faith by the Board as the fair market value of Common Stock on the date of determination if Common Stock is not readily tradable on a national securities exchange or other market system.

3.11 "Initial Stock Unit Grant" shall mean a grant of Stock Units us described in Section 5.1 below.

3.12 "Matching Stock Unit Grant" shall mean a grant of Stock Units as described in Section 5.3 below.

3.13 "Participant" shall mean a member of the Board who is not an employee of the Company or any of its Subsidiaries.

3.14 "Stock Unit" shall mean a unit maintained by the Company for bookkeeping purposes, equal in value to one (1) share of Common Stock.

3.15 "Stock Unit Account" shall mean a bookkeeping account established and maintained (or caused to be established and maintained) by the Company for the Participant which shall record the number of Stock Units granted to the

Participant under Section 5 below. This account shall be established (or caused to be established) by the Company for bookkeeping purposes only, and no separate funds shall be segregated by the Company for the benefit of the Participant.

3.16 "Plan" shall mean the Progress Energy, Inc. Non-Employee Director Stock Unit Plan.

3.17 "Subsidiary" shall mean a corporation of which the Company directly or indirectly owns more than 50 percent 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.

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 all the discretionary authority that may be necessary or helpful 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 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;

(c) 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;

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

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

(f) to make reasonable determinations as to a Participant's eligibility for benefits under the Plan, including determinations as to vesting; and

(g) 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 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 STOCK UNIT GRANTS

5.1 Rollover. CP&L granted an Initial Stock Unit Grant to the Participants listed on Schedule A (who were participants in the CP&L Retirement Plan for Outside Directors) who elected by December 31, 1997, pursuant to an election made in writing to the CP&L Vice President-Human Resources to rollover their accrued benefit under such plan (the "Accrued Benefit") into the Plan. The number of shares underlying each Initial Stock Unit Grant was equal to the present value of the Participant's Accrued Benefit as of December 31, 1997, divided by the Common Stock Value of CP&L common stock on the last trading day of 1997. Any fractional Stock Unit greater than 50 percent was rounded up to one Stock Unit, and any fractional Stock Unit equal to or less than 50 percent was disregarded. Such number of Stock Units underlying the Initial Stock Unit Grant was entered and recorded in the Participant's Stock Unit Account, and later adjusted to reflect the change in the capital structure of CP&L as a result of which CP&L became a Subsidiary of the Company.

5.2 Annual Grant. The Company shall grant to each Participant who has been a member of the Board for a least 1 year an Annual Stock Unit Grant equal to 350 Stock Units. The Annual Stock Unit Grant shall be made on or about the

date of the Company's annual meeting of shareholders. The Company shall enter and record (or shall cause to be entered and recorded) in the Participant's Stock Unit Account such number of Stock Units underlying the Annual Stock Unit Grant.

5.3 Matching Grant. With respect to any specific year, if the corporate incentive goals established by the Board are met for purposes of determining the Company stock incentive matching contributions under the Progress Energy 401(k) Savings and Stock Ownership Plan, the Company shall grant to each Participant on or about the date of the Company's annual meeting of shareholders following such year a Matching Stock Unit Grant equal to up to 350 Stock Units in accordance with the terms of such program. The Company shall enter and record (or shall cause to be entered and recorded) in the Participant's Stock Unit Account such number of Stock Units underlying the Annual Stock Unit Grant.

5.4 Dividend Stock Units. On the date that any holder of Common Stock receives a dividend with respect to Common Stock, the Company shall grant to each Participant, and shall enter and record (or shall cause to be entered and recorded) in each such Participant's Stock Unit Account a number of Stock Units equal to the result of (x) the dollar amount of such dividend paid with respect to one share of Common Stock multiplied by (y) the number of Stock Units in the Stock Unit Account as of the date such dividend is paid divided by (z) the Common Stock Value as of the date such dividend is paid. Any fractional Stock Unit greater than 50 percent shall be rounded up to one Stock Unit, and any fractional Stock Unit equal to or less than 50 percent shall be disregarded.

6.0 BENEFIT

6.1 Vesting. A Participant shall be entitled to a Benefit described in this
Section 6 only after such Participant has been a member of the Board for 5 years. If there is a Change in Control, the Participant shall be entitled to a Benefit described in this Section 6 as of the date of the Change in Control, regardless of the number of years such Participant has been a member of the Board.

6.2 Timing of Benefit. In accordance with Section 6.4 below, the Company shall pay or begin paying a Benefit to a vested Participant during the 60-day period following the Distribution Date. If the Participant has selected annual payments in accordance with Section 6.4(b) below, all payments other than the first payment shall be made on the applicable anniversary of the Distribution Date.

6.3 Valuation. The value of a Participant's Stock Unit Account for purposes of the Benefit shall be equal to the product of (x) the number of Stock Units in the Participant's Stock Unit Account as of the Distribution Date or the applicable anniversary of the Distribution Date multiplied by (y) the Common Stock Value on the Distribution Date or the applicable anniversary of the Distribution Date, in accordance with Section 6.4 below.

6.4 Form of Benefit. The Company shall pay a Benefit to a vested Participant in one of the following four (4) forms, as selected by the Participant within 60 days after becoming a Participant:

(a) a lump sum payment, with such payment equal to the value of the Participant's Stock Unit Account as of the Distribution Date: or

(b) annual payments over 5, 10 or 15 years, with each annual payment equal to (x) the value of the Participant's Stock Unit Account as of the Distribution Date or the applicable anniversary of the Distribution Date divided by (y) the number of payments yet to be made.

6.5 Change of Form of Benefit. The Participant may change the form of Benefit, provided, however, that such change is made at least six (6) months prior to the Distribution Date.

6.6 Death of Participant Prior to the Distribution Date. If the Participant's death occurs prior to the Distribution Date, the Company shall pay or begin paying a Benefit to a vested Participant's beneficiary (as designated by the Participant under Section 6.8 below) on the first day of the sixth month following the date of the Participant's death, and if the Participant has selected a form of Benefit under Section 6.4(b) above, the Company shall pay the remaining annual payments on the anniversary of the first payment date as determined under this Section 6.6.

6.7 Death of Participant Following the Distribution Date. If the Participant's death occurs following the Distribution Date, the Company shall continue to pay the Benefit to the Participant's beneficiary (as designated by the Participant under Section 6.8 below) following the date of the Participant's death in the form of Benefit selected by the Participant in accordance with Section 6.4 above.

6.8 Designation of Beneficiary. Within 60 days after becoming a Participant, a Participant shall designate a beneficiary to receive the Benefit in the event of the Participant's death. If the Participant does not designate a beneficiary, the beneficiary shall be deemed to be the Participant's spouse on the date of the Participant's death, and if the Participant does not have a spouse on the date of his or her death, then the Participant's estate shall be deemed to be the beneficiary under this Section 6.

7.0 TAXES

7.1 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.

7.2 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.

8.0 TERM OF PLAN; AMENDMENT AND TERMINATION

8.1 Term. The Plan shall be effective as of the Effective Date. The Plan shall remain in effect until the Board terminates the Plan.

8.2 Termination or Amendment of Plan. The Board may suspend or terminate the Plan at any time with or without prior notice and the Board may amend the Plan at any time with or without prior notice; provided, however, that no action authorized by this Section 8.2 shall reduce the balance of the Stock Unit Account credited to a Participant or adversely affect the vesting of such account.

9.0 MISCELLANEOUS

9.1 Adjustments. If there shall be any change in Common Stock through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spin-off, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends) to holders of Common Stock, the number of Stock Units and the Participant's Stock Unit Account shall be adjusted to equitably reflect such change or distribution.

9.2 Governing Law. The Plan and all actions taken in connection herewith 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.

9.3 No Right Title or Interest in Company Assets. 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 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. 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.

9.4 No Right to Continued Service. The Participant's rights, if any, to continue to serve the Company as a member of the Board shall not be enlarged or otherwise affected by his or her participation in the Plan.

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

9.6 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. If, however, the Committee determines in its sole discretion that any term or condition of the Plan which is invalid or unenforceable is material to the interests of the Company, the Committee may declare the Plan null and void in its entirety.

9.7 Incapacity. If the Committee determines that a Participant or a designated 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 designated 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.

9.8 Transferability of Rights. No Participant or spouse of a Participant shall have any right to encumber, transfer or otherwise dispose of or alienate any present or future right or expectancy which the Participant or such spouse may have at any time to receive payments of benefits hereunder, which benefits and the right thereto are expressly declared to be nonassignable 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 be null and void and without effect.

9.9 Entire Document. The Plan, as set forth herein, supersedes any and all prior practices, understandings, agreements, descriptions or other non-written arrangements respecting severance, and written employment or severance contracts signed by the Company.

9.10 Change of Control. In the case of a Change of Control, the Company, subject to the restrictions in this Section 9.10 and in Section 9.3, shall irrevocably set aside funds in one or more grantor trusts in an amount that is sufficient to pay each Participant the value of the Participant's Stock Unit Account as of the date on which the Change of Control occurs. The obligations and responsibilities of the Company under this Plan shall be assumed by any successor or acquiring corporation, and all of the rights, privileges and benefits of the Participants hereunder shall continue following the Change of Control.

SCHEDULE A

Participants Who Are Eligible To Receive Initial Stock Unit Grants

1. Edwin B. Borden

2. Richard L. Daugherty

3. Robert L. Jones

4. Felton J. Capel

5. Charles W. Coker

6. Estell C. Lee

7. Leslie M. Baker, Jr.

8. William O. McCoy

9. J. Tylee Wilson

Exhibit 10(iii)

AMENDED AND RESTATED

SUPPLEMENTAL SENIOR EXECUTIVE RETIREMENT PLAN

OF

PROGRESS ENERGY, INC.

Effective January 1, 1984

(As last amended effective July 10, 2002)

                                TABLE OF CONTENTS


                                                                           Page
                                    ARTICLE I

STATEMENT OF PURPOSE.........................................................1


                                   ARTICLE II

DEFINITIONS..................................................................1
   2.01       Terms..........................................................1
   2.02       Affiliated Company.............................................1
   2.03       Assumed Deferred Vested Pension Benefit........................2
   2.04       Assumed Early Retirement Pension Benefit.......................2
   2.05       Assumed Normal Retirement Pension Benefit......................2
   2.06       Board..........................................................3
   2.07       Change in Control..............................................3
   2.08       Committee......................................................5
   2.09       Company........................................................5
   2.10       Continuing Director............................................5
   2.11       Designated Beneficiary.........................................5
   2.12       Early Retirement Date..........................................5
   2.13       Eligible Spouse................................................6
   2.14       Final Average Salary...........................................6
   2.15       Normal Retirement Date.........................................7
   2.16       Participant....................................................7
   2.17       Pension........................................................7
   2.18       Plan...........................................................7
   2.19       Retirement Plan................................................7
   2.20       Salary.........................................................7
   2.21       Service........................................................8
   2.22       Severance Date.................................................8
   2.23       Social Security Benefit........................................8
   2.24       Spouse's Pension..............................................10
   2.25       Target Early Retirement Benefit...............................10
   2.26       Target Normal Retirement Benefit..............................10
   2.27       Target Pre-Retirement Death Benefit...........................10
   2.28       Target Severance Benefit......................................10


                                   ARTICLE III

ELIGIBILITY AND PARTICIPATION...............................................10
   3.01       Eligibility...................................................10
   3.02       Date of Participation.........................................11
   3.03       Duration of Participation.....................................11

                                       i

                                   ARTICLE IV

RETIREMENT BENEFITS.........................................................11
   4.01       Normal Retirement Benefit.....................................11
   4.02       Early Retirement Benefit......................................12
   4.03       Commencement and Duration.....................................13
   4.04       Surviving Spouse Benefit......................................14
   4.05       Re-employment of Retired Participant..........................14


                                    ARTICLE V

RETIREMENT DEATH BENEFITS...................................................14
   5.01       Eligibility...................................................14
   5.02       Amount........................................................14
   5.03       Alternative Benefit...........................................14
   5.04       Commencement and Duration.....................................15


                                   ARTICLE VI

SEVERANCE BENEFITS..........................................................15
   6.01       Eligibility...................................................15
   6.02       Amount........................................................15
   6.03       Commencement and Duration.....................................16
   6.04       Surviving Spouse Benefit......................................16


                                   ARTICLE VII

ADMINISTRATION..............................................................17
   7.01       Committee.....................................................17
   7.02       Voting........................................................17
   7.03       Records.......................................................17
   7.04       Liability.....................................................17
   7.05       Expenses......................................................18


                                  ARTICLE VIII

AMENDMENT AND TERMINATION...................................................18


                                   ARTICLE IX

MISCELLANEOUS...............................................................18
   9.01       Non-Alienation of Benefits....................................18
   9.02       No Trust, Created.............................................19
   9.03       No Employment Agreement.......................................19

                                       ii

   9.04       Binding Effect................................................20
   9.05       Suicide.......................................................20
   9.06       Claims for Benefits...........................................20
   9.07       Entire Plan...................................................21
   9.08       Change in Control.............................................21


                                    ARTICLE X

CONSTRUCTION................................................................21
   10.01      Governing Law.................................................21
   10.02      Gender........................................................21
   10.03      Headings, etc.................................................21
   10.04      Action........................................................21

ARTICLE I

STATEMENT OF PURPOSE

This Plan is designed and implemented for the purpose of enhancing the earnings and growth of Progress Energy, Inc. (the "Sponsor") by providing to the limited group of senior management employees largely responsible for such earnings and long-term growth deferred compensation in the form of supplemental retirement income benefits, thereby increasing the incentive of such key senior management employees to make the Sponsor and its Affiliated Companies more profitable. The benefits are normally payable to Participants upon retirement or death. The terms of the benefits operate in conjunction with the Participant's benefits payable under the Progress Energy Pension Plan and are designed to supplement such pension plan benefits and provide the Participant with additional financial security upon retirement or death.

The Plan is intended to constitute an unfunded retirement plan for 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.

The Sponsor hereby restates and amends the Plan effective July 10, 2002.

ARTICLE II

DEFINITIONS

2.01 Terms. Unless otherwise clearly required by the context, the terms used herein shall have the following meaning. Capitalized terms that are not defined below shall have the meaning ascribed to them in the Retirement Plan.

2.02 Affiliated Company. Shall mean any corporation or other entity that is required to be aggregated with the Sponsor pursuant to Section 414(b), (c),
(m), or (o) of the Internal Revenue Code of 1996, as amended (the "Code"), but only to the extent required.

2.03 Assumed Deferred Vested Pension Benefit. Shall mean the monthly benefit of the deferred vested Pension to commence on his Normal Retirement Date payable in the form of an annuity to which a separated Participant would be entitled under the Retirement Plan, calculated with the following assumptions based on such Participant's marital status at the time benefits hereunder commence:

(a) In the case of a Participant with an Eligible Spouse, in the form of a 50% Qualified Joint and Survivor Annuity as provided in the Retirement Plan.

(b) In the case of a Participant without an Eligible Spouse, in the form of a Single Life Annuity as provided in the Retirement Plan.

(c) Without regard to any other benefit payment option under the Retirement Plan.

2.04 Assumed Early Retirement Pension Benefit. Shall mean the monthly benefit of the normal retirement Pension payable in the form of an annuity to which a Participant would be entitled under the Retirement Plan at his Normal Retirement Date, based upon his projected years of Service at his Normal Retirement Date and calculated with the following assumptions based upon his marital status at the time benefits hereunder commence:

(a) In the case of a Participant with an Eligible Spouse, in the form of a 50% Qualified Joint and Survivor Annuity as provided in the Retirement Plan.

(b) In the case of a Participant without an Eligible Spouse, in the form of a Single Life Annuity as provided in the Retirement Plan.

(c) Without regard to any other benefit payment option under the Retirement Plan.

2.05 Assumed Normal Retirement Pension Benefit. Shall mean the monthly benefit of the normal retirement Pension payable in the form of an annuity to which

a Participant would be entitled under the Retirement Plan if he retired at his Normal Retirement Date, calculated with the following assumptions based on his marital status at the time benefits hereunder commence:

(a) In the case of a Participant with an Eligible Spouse, in the form of a 50% Qualified Joint and Survivor Annuity as provided in the Retirement Plan.

(b) In the case of a Participant without an Eligible Spouse, in the form of a Single Life Annuity as provided in the Retirement Plan.

(c) Without regard to any other benefit payment option under the Retirement Plan.

2.06 Board. Shall mean the Board of Directors of Sponsor.

2.07 Change in Control. Shall occur 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 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 Sponsor approve a plan of complete liquidation or winding-up of the Sponsor or an agreement for the sale or disposition by the Sponsor of all or substantially all of the Sponsor'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 such event has occurred. Any determination that such an event 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 Sponsor, the Company, the Participants and their beneficiaries for all purposes of the Plan.

2.08 Committee. Shall mean the Committee on Organization and Compensation of the Board.

2.09 Company. Shall mean 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 adopts the Plan and is included in Appendix A, as in effect from time to time. Appendix A shall set forth any limitations imposed on employees of Affiliated Companies that adopt the Plan, including limitations on "Service," notwithstanding any provision of the Plan to the contrary.

2.10 Continuing Director. Shall mean the members of the Board as of July 10, 2002; 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.

2.11 Designated Beneficiary. Shall mean one or more beneficiaries as designated by a Participant in writing delivered to the Committee. In the event no such written designation is made by a Participant or if such beneficiary shall not be living or in existence at the time for commencement of payment to any Designated Beneficiary under the Plan, the Participant shall be deemed to have designated his estate as such beneficiary.

2.12 Early Retirement Date. Shall mean the date on which a Participant who qualifies for the early retirement benefit of Section 4.02 hereof retires from the employ of the Company and its affiliated entities.

2.13 Eligible Spouse. Shall mean the spouse of a Participant who, under the laws of the State where the marriage was contracted, is deemed married to that Participant on the date on which the payments from this Plan are to begin to the Participant, except that for purposes of Articles V and VI hereof, Eligible Spouse shall mean a person who is married to a Participant for a period of at least one year prior to his death.

2.14 Final Average Salary. Shall mean a Participant's average monthly Salary (as defined in Section 2.18 hereof) during the 36 completed calendar months of highest compensation within the 120-month period immediately preceding the earliest to occur of the Participant's death, Severance Date, Early Retirement Date, or Normal Retirement Date, whichever is applicable. Provided, however, if a Participant becomes entitled to a benefit hereunder while under a period of long-term disability under the Sponsor's Group Insurance Plan, Final Average Salary shall be determined for the 12 calendar months immediately preceding the commencement of such period of long-term disability. Provided, further, in determining average monthly Salary (i) annual incentives and other similar payments shall be deemed received in twelve (12) equal payments beginning with the eleventh preceding month and ending with the month in which actual payment is made, and (ii) amounts of compensation deferred under any deferred compensation plan or arrangement shall be deemed received in the months such payments would have been received assuming no deferral had occurred. For years of Service granted under the terms of a written employment agreement as provided under Section 2.21, Salary during each such month is deemed to be zero dollars ($0.00) for purposes of calculating Final Average Salary.

2.15 Normal Retirement Date. Shall mean the first day of the calendar month coinciding with or next following the Participant's 65th birthday.

2.16 Participant. Shall mean an employee of the Company who is eligible and is participating in this Plan in accordance with Article III hereof.

2.17 Pension. Shall mean a level monthly annuity which is payable under the Retirement Plan as of the Benefit Commencement Date if the Participant elected an annuity form of benefit.

2.18 Plan. Shall mean the "Supplemental Senior Executive Retirement Plan of Progress Energy, Inc." as contained herein and as it may be amended from time to time hereafter.

2.19 Retirement Plan. Shall mean the "Progress Energy Pension Plan" (as amended effective January 1, 2002) as it may be amended from time to time hereafter.

2.20 Salary. Shall mean the sum of

(1) The annual base compensation paid by the Company to a Participant, and

(2) annual cash awards made under incentive compensation programs excluding, however, any payment made under the Sponsor's Long-Term Compensation Program or the Sponsor's 1997 and 2002 Equity Incentive Plans, and

(3) amounts of annual compensation deferred under any deferred compensation plan or arrangement (including, without limitation, the "Executive Deferred Compensation Plan," the "Deferred Compensation Plan for Key Management Employees of Progress Energy, Inc.," the "Progress Energy, Inc. Management Deferred Compensation Plan" and the "Progress Energy 401(k) Savings and Stock Ownership Plan") and which, but for the deferral, would have been reflected in Internal Revenue Service Form W-2.

2.21 Service. Shall have the same meaning as "Eligibility Service," determined as provided in Sections 2.02 and 3.01 of the Retirement Plan, plus any additional years of service that may be granted to the Participant in connection with this Plan under the terms of a written employment agreement (or any amendment thereto) entered into between the Company and the Participant.

2.22 Severance Date. Shall mean the earlier of:

(a) The date a Participant leaves the employ of the Company and all affiliated entities other than on account of his death, a period of long-term disability under the Company's Group Insurance Plan, or retirement at either his Early Retirement Date or upon or after his Normal Retirement Date, or

(b) The first anniversary of the date on which a Participant is first absent from the service of the Sponsor and all Affiliated Companies, with or without pay, other than on account of his death, a period of long-term disability under the Company's Group Insurance Plan, or his retirement at either his Early Retirement Date or upon or after his Normal Retirement Date. If a Participant shall leave the employ of the Company and all Affiliated Companies under circumstances described in
(b) and shall during such absence (and before the first anniversary of commencement of said absence) quit or be discharged, his Severance Date shall be the date he quits or is discharged.

2.23 Social Security Benefit. Means the monthly amount of benefit which a Participant is or would be entitled to receive at age 65 as a primary insurance amount under the federal Social Security Act, as amended, whether or not he applies for such benefit, and even though he may lose part or all

of such benefit through delay in applying for it, by making application prior to age 65 for a reduced benefit, by entering into covered employment, or for any other reason. The amount of such Social Security Benefit to which the Participant is or would be entitled shall be estimated by the Committee for the purposes of this Plan as of the January 1 of the year in which his Severance Date or retirement occurs on the following basis:

(a) For a Participant entitled to a normal retirement benefit, on the basis of the federal Social Security Act as in effect on the January 1 coincident with or next preceding his Normal Retirement Date (regardless of any retroactive changes made by legislation enacted after said January 1);

(b) For a Participant entitled to an early retirement benefit, on the basis of the federal Social Security Act as in effect on the January 1 coincident with or next preceding his Early Retirement Date (regardless of any retroactive change made by legislation enacted after said January 1), assuming that his employment, and Salary in effect at his Early Retirement Date, continued to age 65; or

(c) For a Participant entitled to a severance benefit, on the basis of the federal Social Security Act as in effect on the January 1 coincident with or next preceding his Severance Date (regardless of any retroactive change made by legislation enacted after said January 1), assuming that his employment, and Salary in effect at his Severance Date, continued to age 65.

For purposes of the calculations required under paragraphs (a) and (b) above, if a Participant is disabled under a period of long-term disability under the Company's Group Insurance Plan, said Social

Security Benefit shall be calculated as if his Salary in effect at the commencement of such period of long-term disability continued to age 65.

2.24 Spouse's Pension. Shall mean the actual monthly benefit payable to an Eligible Spouse under the Retirement Plan, assuming the Eligible Spouse elected a 50% Joint and Survivor Annuity form of benefit.

2.25 Target Early Retirement Benefit. Shall mean an amount equal to a Participant's Final Average Salary determined at his Early Retirement Date multiplied by four percent (4%) for each projected year of Service at his Normal Retirement Date up to a maximum of sixty-two percent (62%).

2.26 Target Normal Retirement Benefit. Shall mean an amount equal to a Participant's Final Average Salary determined at his Normal Retirement Date multiplied by four percent (4%) for each projected year of Service at his Normal Retirement Date up to a maximum of sixty-two percent (62%).

2.27 Target Pre-Retirement Death Benefit. Shall mean an amount equal to a deceased Participant's Final Average Salary determined at his death multiplied by four percent (4%) for each year of Service at his death up to a maximum of sixty-two percent (62%).

2.28 Target Severance Benefit. Shall mean an amount equal to a Participant's Final Average Salary determined at his Severance Date multiplied by four percent (4%) for each year of Service at his Severance Date up to a maximum of sixty-two percent (62%).

ARTICLE III

ELIGIBILITY AND PARTICIPATION

3.01 Eligibility. Any executive employee of a Company who has served on the Senior Management Committee of the Sponsor and who has been a Senior Vice

President or above for a minimum period of three (3) years and who has at least ten (10) years of Service shall be eligible to participate in this Plan.

3.02 Date of Participation. Each executive who is eligible to become a Participant under Section 3.01 shall become a Participant on the first day of the month following the month in which he is first eligible to participate.

3.03 Duration of Participation. Each executive who becomes a Participant shall continue to be a Participant until the termination of his employment with the Company or, if later, the date he is no longer entitled to benefits under this Plan.

ARTICLE IV

RETIREMENT BENEFITS

4.01 Normal Retirement Benefit.

(a) Eligibility. A Participant whose employment with the Company terminates on or after his Normal Retirement Date shall be eligible for the normal retirement benefit described in this Section 4.01.

(b) Amount and Form. The monthly payment hereunder shall be in the form of a Single Life Annuity if the Participant has no Eligible Spouse and in the form of a 50% Qualified Joint and Survivor Annuity if the Participant has an Eligible Spouse. The eligible Participant's normal retirement benefit shall be a monthly amount equal to his Target Normal Retirement Benefit reduced by the sum of (1) his Assumed Normal Retirement Pension Benefit and (2) his Social Security Benefit.

(c) Commencement and Duration. Monthly normal retirement benefit payments shall commence at the same time as the eligible Participant's normal retirement Pension payable from the Retirement Plan and shall continue

in monthly installments thereafter ending with a payment for the month in which such eligible Participant's death occurs, unless the benefit is being paid in the form of a Qualified Joint and Survivor Annuity, in which case the survivor benefit shall be paid to the Eligible Spouse, if living, for his or her life. If at the time of commencement of payment such eligible Participant does not have an Eligible Spouse the monthly benefit payments shall be guaranteed for one hundred twenty (120) monthly payments with any such guaranteed payments remaining at such Participant's death payable to his Designated Beneficiary.

4.02 Early Retirement Benefit.

(a) Eligibility. Upon recommendation of the Chief Executive Officer of the Company and approval of the Committee, a Participant whose employment with the Company terminates upon or after his attainment of age fifty-five (55) with at least fifteen (15) years of Service (except for purposes of calculating benefits payable under Article V.
PRE-RETIREMENT DEATH BENEFITS and Article VI. SEVERANCE BENEFITS, as applicable) but prior to his Normal Retirement Date, shall be eligible for the early retirement benefit described in this Section 4.02.

(b) Amount and Form. The monthly payment hereunder shall be in the form of a Single Life Annuity if the Participant has no Eligible Spouse and in the form of a 50% Qualified Joint and Survivor Annuity if the Participant has an Eligible Spouse. The eligible Participant's early retirement benefit shall be a monthly amount equal to his Target Early

Retirement Benefit reduced by the sum of (1) his Assumed Early Retirement Pension Benefit and (2) his Social Security Benefit; provided, however, such benefit will be reduced, where applicable, by the following:

(i) The amount of, 2.5% for each year that such benefit is received prior to his Normal Retirement Date, and

(ii) If such eligible Participant's projected years of Service at his Normal Retirement Date are less than fifteen (15), his Target Early Retirement Benefit and his Assumed Early Retirement Pension Benefit shall be calculated based upon his actual years of Service at his Early Retirement Date rather than upon his projected years of Service at his Normal Retirement Date.

4.03 Commencement and Duration. Monthly early retirement benefit payments shall commence on the first day of the month following the Participant's attainment of age 65, provided, such Participant may make written application to the Committee to have payments commence on the first day of any month following his Early Retirement Date and the decision of the Committee, based upon its sole and absolute discretion, to allow such early commencement of payment shall be final. After commencement of payment, said early retirement benefit payments shall continue in monthly installments thereafter ending with a payment for the month in which such eligible Participant's death occurs, unless the benefit is being paid in the form of a Qualified Joint and Survivor Annuity, in which case the survivor benefit shall be paid to the Eligible Spouse, if living, for his or her life. If at

the time of commencement of payment such eligible Participant does not have an Eligible Spouse, the monthly benefit payments shall be guaranteed for one hundred twenty (120) monthly payments with any such guaranteed payments remaining at such Participant's death payable to his Designated Beneficiary.

4.04 Surviving Spouse Benefit. The surviving Eligible Spouse of a Participant who is receiving a Qualified Joint and Survivor Benefit as a normal retirement benefit or as an early retirement benefit shall be eligible for the surviving spouse benefit upon the death of the Participant for the duration of the Eligible Spouse's life.

4.05 Re-employment of Retired Participant. A retired Participant receiving or eligible to receive the retirement benefits described in Sections 4.01 and 4.02 hereof who is reemployed by the Company shall be ineligible to again participate in this Plan.

ARTICLE V

RETIREMENT DEATH BENEFITS

5.01 Eligibility. A Participant's surviving Eligible Spouse shall be eligible for the pre- retirement death benefit as described in this Article V if such Participant dies while in the employ of the Company with 10 or more years of Service.

5.02 Amount. Such surviving Eligible Spouse shall be entitled to a monthly pre-retirement death benefit payable in the form of an annuity in an amount equal to the difference, if any, between (a) forty percent (40%) of the Target Pre-Retirement Death Benefit and (b) the Spouse's Pension.

5.03 Alternative Benefit. If greater than the monthly benefit of Section 5.02 hereof, the surviving Eligible Spouse of a Participant who dies while in the employ of the Company after attaining age fifty-five (55) with fifteen
(15) years of Service shall be entitled to a monthly pre-retirement death benefit equal to fifty percent (50%) of the early retirement benefit the

Participant would have been entitled to receive under Section 4.02 hereof (calculated using both reductions, where applicable, in subsections 4.02(b)(i) and 4.02(b)(ii)) as if he had retired immediately prior to his death with the recommendation of the Chief Executive Officer and approval of the Committee.

5.04 Commencement and Duration. The surviving Eligible Spouse's monthly pre-retirement death benefit payments shall commence in the month following the Participant's death and shall be paid in monthly installments thereafter ending with a payment for the month in which such surviving Eligible Spouse's death occurs.

ARTICLE VI

SEVERANCE BENEFITS

6.01 Eligibility. Upon his termination of employment with the Company at his Severance Date, a Participant who has completed ten (10) or more years of Service shall be eligible for one of the severance benefits described in this Article VI.

6.02 Amount.

(a) If at his Severance Date such eligible Participant is not entitled to a deferred vested Pension pursuant to Section 5.03 of the Retirement Plan or an early retirement Pension pursuant to Section 5.02 of the Retirement Plan, his severance benefit shall be a monthly amount equal to his Target Severance Benefit reduced by his Social Security Benefit.

(b) If at his Severance Date such eligible Participant is entitled to a deferred vested Pension pursuant to Section 5.03 of the Retirement Plan, his severance benefit shall be a monthly amount equal to his

Target Severance Benefit reduced by the sum of (1) his Assumed Deferred Vested Pension Benefit and (2) his Social Security Benefit.

(c) If at his Severance Date such eligible Participant is entitled to an early retirement Pension pursuant to Section 5.02 of the Retirement Plan, his severance benefit shall be a monthly amount equal to his Target Severance Benefit reduced by the sum of (1) his Assumed Early Retirement Pension Benefit and (2) his Social Security Benefit; provided, however, such Assumed Early Retirement Pension Benefit shall be calculated based upon his actual years of Service at his Severance Date rather than upon his projected years of Service at his Normal Retirement Date.

6.03 Commencement and Duration. Monthly severance benefit payments shall commence on the eligible Participant's Normal Retirement Date and shall continue in monthly installments thereafter ending with a payment for the month in which such eligible Participant's death occurs.

6.04 Surviving Spouse Benefit.

(a) Eligibility. The surviving Eligible Spouse of a Participant who is receiving or who dies after attaining age fifty-five (55) entitled to receive a severance benefit hereunder shall be eligible for the surviving spouse benefit described in this Section 6.04.

(b) Such surviving Eligible Spouse shall be entitled to a monthly surviving spouse benefit in an amount equal to fifty percent (50%) of the severance benefit which the deceased Participant was receiving or

entitled to receive at his Normal Retirement Date under either Section 6.02(a) or 6.02(b) hereof on the day before his death.

(c) Commencement and Duration. The monthly surviving spouse benefit payment shall commence in the month following the Participant's death and shall be paid in monthly installments thereafter ending with a payment for the month in which such surviving Eligible Spouse's death occurs.

ARTICLE VII

ADMINISTRATION

7.01 Committee. This Plan shall be administered by the Committee. The Committee shall have all powers necessary to enable it to carry out its duties in the administration of the Plan. Not in limitation, but in application of the foregoing, the Committee shall have the duty and power to determine all questions that may arise hereunder as to the status and rights of Participants in the Plan.

7.02 Voting. The Committee shall act by a majority of the number then constituting the Committee, and such action may be taken either by vote at a meeting or in writing , without a meeting.

7.03 Records. The Committee shall keep a complete record of all its proceedings and all data relating to the administration of the Plan. The Committee shall select one of its members as a Chairman. The Committee shall appoint a Secretary to keep minutes of its meetings and the Secretary may or may not be a member of the Committee. The Committee shall make such rules and regulations for the conduct of its business as it shall deem advisable.

7.04 Liability. To the extent permitted by law, no member of the Committee shall be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Plan unless attributable to

his own gross negligence or willful misconduct. The Sponsor shall indemnify the members of the Committee against any and all claims, losses, damages, expenses, including counsel fees, incurred by them, and any liability, including any amounts paid in settlement with their approval, arising from their action or failure to act, except when the same is judicially determined to be attributable to their gross negligence or willful misconduct.

7.05 Expenses. The cost of payments from this Plan and the expenses of administering the Plan shall borne by each Company with respect to its own employees.

ARTICLE VIII

AMENDMENT AND TERMINATION

The Sponsor reserves the right, at any time or from time to time, by action of its Board, to modify or amend in whole or in part any or all provisions of the Plan. In addition, the Sponsor reserves the right by action of its Board to terminate the Plan in whole or in part. Provided, however, any such modification, amendment or termination shall not reduce benefits accrued at such time nor increase vesting requirements with respect to such accrued benefits.
ARTICLE IX

MISCELLANEOUS

9.01 Non-Alienation of Benefits. No right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge any right or benefit under the Plan shall be void. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities or torts of the person entitled to such

benefits. If the Participant or Eligible Spouse shall become bankrupt, or attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge any right hereunder, then such right or benefit shall, in the discretion of the Committee, cease and terminate, and in such event, the Committee may hold or apply the same or any part thereof for the benefit of the Participant or his spouse, children, or other dependents, or any of them, in such manner and in such amounts and proportions as the Committee may deem proper.

9.02 No Trust, Created. The obligations of the Sponsor and each Company to make payments hereunder shall constitute a liability of the Sponsor and each Company, as the case may be, to a Participant. Such payments shall be made from the general funds of the Sponsor or a Company, and the Sponsor or a Company shall not be required to establish or maintain any special or separate fund, or purchase or acquire life insurance on a Participant's life, or otherwise to segregate assets to assure that such payment shall be made, and neither a Participant nor Eligible Spouse shall have any interest in any particular asset of the Sponsor or a Company by reason of its obligations hereunder. Nothing contained in the Plan shall create or be construed as creating a trust of any kind or any other fiduciary relationship between the Sponsor, a Company and a Participant or any other person.

9.03 No Employment Agreement. Neither the execution of this Plan nor any action taken by the Sponsor or a Company pursuant to this Plan shall be held or construed to confer on a Participant any legal right to be continued as an employee of the Sponsor or a Company in an executive position or in any other capacity whatsoever. This Plan shall not be deemed to constitute a contract of employment between the Sponsor or a Company and a Participant, nor shall any provision herein restrict the right of any Participant to terminate his employment with the Sponsor or a Company.

9.04 Binding Effect. Obligations incurred by the Sponsor or a Company pursuant to this Plan shall be binding upon and inure to the benefit of the Sponsor or a Company, its successors and assigns, and the Participant or his Eligible Spouse.

9.05 Suicide. No benefit shall be payable under the Plan to a Participant or Eligible Spouse where such Participant dies as a result of suicide within two (2) years of his commencement of participation herein.

9.06 Claims for Benefits. Each Participant or Eligible Spouse must claim any benefit to which he is entitled under this Plan by a written notification to the Committee. If a claim is denied, it must be denied within a reasonable period of time, and be contained in a written notice stating the following:

A. The specific reason for the denial.

B. Specific reference to the Plan provision on which the denial is based.

C. Description of additional information necessary for the claimant to present his claim, if any, and an explanation of why such material is necessary.

D. An explanation of the Plan's claims review procedure. The claimant will have 60 days to request a review of the denial by the Committee, which will provide a full and fair review. The request for review must be in writing delivered to the Committee. The claimant may review pertinent documents, and he may submit issues and comments in writing. The decision by the Committee with respect to the review must be given within 60 days after receipt of the request, unless special circumstances require an extension (such as for a hearing). In no event shall the decision be delayed beyond 120 days after receipt of

the request for review. The decision shall be written in a manner calculated to be understood by the claimant, and it shall include specific reasons and refer to specific Plan provisions as to its effect.

9.07 Entire Plan. This document and any amendments contain all the terms and provisions of the Plan and shall constitute the entire Plan, any other alleged terms or provisions being of no effect.

9.08 Change in Control. In the event of a Change in Control, the Sponsor shall irrevocably set aside funds in one or more grantor trusts in an amount that is sufficient to pay each Participant (or Designated Beneficiary) the amount of benefits accrued under the Plan as of the date of the Change in Control. Any such trust shall be subject to the claims of the general creditors of the Company in the event of the bankruptcy or insolvency of the Company.

ARTICLE X

CONSTRUCTION

10.01Governing Law. This Plan shall be construed and governed in accordance with the laws of the State of North Carolina, to the extent not preempted by Federal Law.

10.02Gender. The masculine gender, where appearing in the Plan, shall be deemed to include the feminine gender, and the singular may include the plural, unless the context clearly indicates to the contrary.

10.03Headings, etc. The cover page of this Plan, the Table of Contents and all headings used in this Plan are for convenience of reference only and are not part of the substance of this Plan.

10.04Action. Any action under this Plan required or permitted by the Sponsor shall be by action of its Board or its duly authorized designee.

APPENDIX A

North Carolina Natural Gas Company ("NCNG"); provided that for all purposes of the Plan, Service for an employee of NCNG on December 31, 1999 (as defined in
Section 2.21) shall include employment only with NCNG (or another adopting Company) on or after January 1, 2000; and further provided that the accrued benefit calculated under Sections 2.03, 2.04 and 2.05 shall not include the "Accrued Benefit" under Supplement A, Paragraph A-2 of the Retirement Plan, attributable to the NCNG Employees Pension Plan.

Progress Energy Florida, Inc. (non-bargaining employees) ("PEF"); provided that for all purposes of the Plan, Service for an employee of PEF on December 31, 2001 (as defined in Section 2.21) shall include employment only with PEF (or another adopting Company) on or after January 1, 2002; and further provided that the accrued benefit calculated under Sections 2.03, 2.04 and 2.05 shall not include the "Accrued Benefit" under Supplement B, Paragraph B-2(a) of the Retirement Plan, attributable to the FPC Plan.

Progress Telecom Corporation ("PTC"); provided that for all purposes of the Plan, Service for an employee of PTC on December 31, 2001 (as defined in Section 2.21) shall include employment only with PTC (or another adopting Company) on or after January 1, 2002; and further provided that the accrued benefit calculated under Sections 2.03, 2.04 and 2.05 shall not include the "Accrued Benefit" under Supplement B, Paragraph B-2(a) of the Retirement Plan, attributable to the FPC Plan.

Progress Fuels Corporation (corporate employees) ("PFC"); provided that for all purposes of the Plan, Service for an employee of PFC on December 31, 2001 (as defined in Section 2.21) shall include employment only with PFC (or another adopting Company) on or after January 1, 2002; and further provided that the

accrued benefit calculated under Sections 2.03, 2.04 and 2.05 shall not include the "Accrued Benefit" under Supplement B, Paragraph B-2(a) of the Retirement Plan, attributable to the FPC Plan.

Progress Energy Carolinas, Inc.
Progress Energy Service Company, LLC Progress Energy Ventures, Inc.

Exhibit 10(iv)

AMENDED MANAGEMENT INCENTIVE COMPENSATION PLAN

OF

PROGRESS ENERGY, INC.

AS AMENDED JANUARY 1, 2003

                                TABLE OF CONTENTS


                                                                            Page

ARTICLE I                PURPOSE...........................................   1

ARTICLE II               DEFINITIONS.......................................   1

ARTICLE III              ADMINISTRATION....................................   7

ARTICLE IV               PARTICIPATION.....................................   8

ARTICLE V                AWARDS............................................   8

ARTICLE VI               DISTRIBUTION AND DEFERRAL OF AWARDS...............  12

ARTICLE VII              TERMINATION OF EMPLOYMENT.........................  18

ARTICLE VIII             MISCELLANEOUS.....................................  18

ARTICLE I

PURPOSE

The purpose of the Management Incentive Compensation Plan (the "Plan") of Progress Energy, Inc. (the "Sponsor") is to promote the financial interests of the Sponsor and its Affiliated Companies, including its growth, by (i) attracting and retaining executive officers and other management-level employees who can have a significant positive impact on the success of the Sponsor and its Affiliated Companies; (ii) motivating such personnel to help the Sponsor and its Affiliated Companies achieve annual incentive, performance and safety goals;
(iii) motivating such personnel to improve their own as well as their business unit/work group's performance through the effective implementation of human resource strategic initiatives; and (iv) providing annual cash incentive compensation opportunities that are competitive with those of other major corporations.

The Sponsor amends and restates the Plan effective January 1, 2003.

ARTICLE II

DEFINITIONS

The following definitions are applicable to the Plan:

1. "Award": The benefit payable to a Participant hereunder, consisting of a Corporate Component and a Noncorporate Component.

2. "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 Internal Revenue Code of 1986, as amended (the "Code"), but only to the extent required.

3. "Board": The Board of Directors of the Sponsor.

4. "Cause": means:

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

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

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

(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.

5. "Change of Control": The earliest of the following dates:

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

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

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

A Change of Control shall not be deemed to have occurred until a majority of the members of the Board receive written certification from the Compensation Committee that one of the events set forth in this Section 5 has occurred. Any determination that an event described in this Section 5 has occurred shall, if made in good faith on the basis of information available at that time, be conclusive and binding on the Compensation Committee, the Sponsor, each Affiliated Company, the Participant and their Beneficiaries for all purposes of the Plan.

6. "Company": Progress Energy, Inc., a North Carolina corporation, or any successor to it in the ownership of substantially all of its assets and each Affiliated Company that, with the consent of the Compensation Committee, adopts the Plan and is included in Exhibit B, as in effect from time to time.

7. "Compensation Committee": The Organization and Compensation Committee of the Board of Directors of the Sponsor.

8. "Continuing Director": 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.

9. "Corporate Factor": The factor determined by the Compensation Committee to be utilized in calculating the Corporate Component of an Award pursuant to Article V, Section 3.a. hereof, which can range from 0 to 2.0.

10. "Corporate Component": That portion of an Award based upon the overall performance of the Sponsor, as determined in Article V, Section 3.a. hereof.

11. "Date of Retirement": The first day of the calendar month immediately following the Participant's Retirement.

12. "Designated Beneficiary": The beneficiary designated by the Participant, pursuant to procedures established by the Human Resources Department of the Company, to receive amounts due to the Participant or to exercise any rights of the Participant to the extent permitted hereunder in the event of the Participant's death. If the Participant does not make an effective designation, then the Designated Beneficiary will be deemed to be the Participant's estate.

13. "EBITDA": The earnings of the Sponsor before interest, taxes, depreciation, and amortization as determined from time to time by the Compensation Committee.

14. "EBITDA Growth": The percentage increase (if any) in EBITDA of the Sponsor for any Year, as compared to the previous Year as determined from time to time by the Compensation Committee.

15. "Effective Date": The Effective Date of this Plan, as amended, is of January 1, 2003.

16. "Noncorporate Component": That portion of an Award based upon the level of attainment of a Company, business unit/group, departmental, and individual Performance Measures, as provided in Article V, Section 3.b. hereof, which can range from 0 to 2.0.

17. "Participant": An employee of any Company who is selected pursuant to Article IV hereof to be eligible to receive an Award under the Plan.

18. "Peer Group": The utilities included in the Standard & Poor's Utility (Electric Power Companies) Index.

19. "Performance Measure": A goal or goals established for measuring the performance of a Company, business unit/group, department, or individual used for the purpose of computing the Noncorporate Component of an Award for a Participant.

20. "Performance Unit": A unit or credit, linked to the value of the Sponsor's Common Stock under the terms set forth in Article VI hereof.

21. "Plan": The Management Incentive Compensation Plan of Progress Energy, Inc. as contained herein, and as it may be amended from time to time.

22. "Retirement": A Participant's termination of employment with a Company after having met at least one of the following requirements: at least age 65 with 5+ years of service, at least age 55 with 15+ years of service, or 35+ years of service regardless of age.

23. "Salary": The compensation paid by a Company to a Participant in a relevant Year, consisting of regular or base compensation, such compensation being understood not to include bonuses, if any, or incentive compensation, if any. Provided, that such compensation shall not be reduced by any cash deferrals of said compensation made under any other plans or programs maintained by such Company.

24. "Section 16 Participants": Those Participants who are subject to the provisions of Section 16 of the Securities Exchange Act of 1934, as amended (the "1934 Act"). Individuals who are subject to Section 16 of the 1934 Act include, without limitation, directors and certain officers of the Sponsor, and any individual who beneficially owns more than ten percent of a class of the Sponsor's equity securities registered under Section 12 of the 1934 Act.

25. "Senior Management Committee": The Senior Management Committee of the Company.

26. "Target Award Opportunity": The target for an Award under this Plan as set forth in Section 2 of Article V hereof. 27. "Year": A calendar year.

ARTICLE III

ADMINISTRATION

The Plan shall be administered by the Chief Executive Officer of the Sponsor. Except as otherwise provided herein, the Chief Executive Officer of the Sponsor shall have sole and complete authority to (i) select the Participants;
(ii) establish and adjust (either before or during the relevant Year) a Participant's Performance Measures, their relative percentage weight, and the performance criteria necessary for attainment of various performance levels;
(iii) approve Awards; (iv) establish from time to time regulations for the administration of the Plan; and (v) interpret the Plan and make all determinations deemed necessary or advisable for the administration of the Plan, all subject to its express provisions. Notwithstanding the foregoing, the Compensation Committee shall (a) approve the performance criteria and Awards for all Participants who are members of the Senior Management Committee; (b) determine the total payout under the Plan up to a maximum of four percent (4%) of the Sponsor's after-tax income for a relevant Year; and (c) certify to the Board that a Change of Control has occurred as provided in Section 5 of Article II.

A majority of the Compensation Committee shall constitute a quorum, and the acts of a majority of the members present at any meeting at which a quorum is present, or acts approved in writing by a majority of the members of the Committee without a meeting, shall be the acts of such Committee.

ARTICLE IV

PARTICIPATION

The Chief Executive Officer of the Sponsor shall select from time to time the Participants in the Plan for each Year from those employees of each Company who, in his opinion, have the capacity for contributing in a substantial measure to the successful performance of the Company that Year. No employee shall at any time have a right to be selected as a Participant in the Plan for any Year nor, having been selected as a Participant for one Year, have the right to be selected as a Participant in any other Year.

ARTICLE V

AWARDS

1. Eligibility. In order for any Participant to be eligible to receive an Award, two conditions must be met. First, a contribution must be earned by one or more groups of employees under the Employee Stock Incentive Plan feature of the Sponsor's 401(k) Savings & Stock Ownership Plan. Second, the Sponsor must also meet minimum threshold performance levels for return on common equity, EBITDA Growth, and other measures for the relevant Year as may be established by the Compensation Committee. Threshold performance for return on common equity and EBITDA Growth is the weighted average of a Peer Group of utilities, averaged over the most recent three-year period. To satisfy threshold performance, the Sponsor must be above the three-year average with respect to return on common equity and EBITDA Growth.

2. Target Award Opportunities. The following table sets forth Target Award Opportunities, expressed as a percentage of Salary, for various levels of participation in the Plan:

-------------------------------------------------------------------------------
                         Participation             Target Award Opportunities
-------------------------------------------------------------------------------
Chief Executive Officer of Sponsor*                           85%
-------------------------------------------------------------------------------
Chief Operating Officer of Sponsor*                           70%
-------------------------------------------------------------------------------
Presidents*/Executive Vice Presidents*                        55%
-------------------------------------------------------------------------------
Senior Vice Presidents*                                       45%
-------------------------------------------------------------------------------
Department Heads                                              35%
-------------------------------------------------------------------------------
Other Participants:
         Key Managers                                         25%
         Other Managers                                       20%
-------------------------------------------------------------------------------

*Senior Management Committee level positions.

The Target Award Opportunity for the Chief Executive Officer of the Sponsor shall be 85%; however, the Compensation Committee of the Board shall be authorized to change that amount from year to year, or to award an amount of compensation based on other considerations, in its complete discretion.

3. Award Components. Awards under the Plan to which Participants are eligible consist of the sum of a Corporate Component and a Noncorporate Component. The portion of the Target Award Opportunities attributable to the Corporate Component and Noncorporate Component, respectively, for various levels of participation, is set forth in the following table:

------------------------------------------------------------------------------
                        Participants            Corporate     Noncorporate
                                                Component      Component
------------------------------------------------------------------------------
Chief Executive Officer of Sponsor*               100%             -
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Chief Operating Officer of Sponsor*               100%             -
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Presidents*/Executive Vice Presidents*             75%            25%
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Senior Vice Presidents*                            75%            25%
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Department Heads                                   50%            50%
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Other Participants                                 50%            50%
------------------------------------------------------------------------------

*Senior Management Committee level positions.

a. Corporate Component. The Corporate Component of an Award is based upon the overall performance of the Sponsor. In the event the conditions set forth in Section 1 of Article V are met and the Compensation Committee, in its discretion, determines an appropriate Corporate Factor, that Corporate Factor shall be multiplied by the portion of a Participant's Target Award Opportunity

attributable to the Corporate Component in order to determine the percentage of such Participant's Salary which will comprise the Corporate Component of his or her Award. Notwithstanding the foregoing, if the second condition set forth in
Section 1 of Article V is not fully met, the Compensation Committee may nevertheless in its discretion determine an appropriate Corporate Factor and grant a Corporate Component of an Award to the Participants.

b. Noncorporate Component. The Noncorporate Component of an Award for a Participant is based upon the level of attainment of Company, business unit/group, departmental and individual Performance Measures. Performance Measures for each Participant and their relative weight are determined pursuant to authority granted in Article III hereof.

(i) Performance Levels. There are three levels of performance related to each of a Participant's Performance Measures: outstanding, target, and threshold. The specific performance criteria for each level of a Participant's Performance Measures shall be set forth in writing prior to the beginning of an applicable Year, or within thirty (30) days after a Participant first becomes eligible to participate in the Plan, and shall be determined pursuant to authority granted in Article III hereof. The payout percentages to be applied to each Participant's Target Award Opportunity are as follows:

Performance Level          Payout Percenge

   Outstanding                  200%
   Target                       100%
   Threshold                     50%

Payout percentages shall be adjusted for performance between the designated performance levels, provided, however, that performance which falls below the

"Threshold" performance level results in a payout percentage of zero unless the Chief Executive Officer of Sponsor directs otherwise.

(ii) Determination of Noncorporate Component. In order to determine a Participant's Noncorporate Component, if any, for a particular Year, the Chief Executive Officer of Sponsor initially shall determine the appropriate payout percentage for each of such Participant's Performance Measures. Thereafter, each payout percentage is multiplied by the percentage weight assigned to each such Performance Measure and the results added together. That aggregate amount is multiplied by the Participant's Target Award Opportunity for the Noncorporate Award Component for the respective Year and the result is multiplied by the Participant's Salary.

(iii) Change of Job Status. Participants who change organizations during a Year will have their Noncorporate Component prorated based upon the Performance Measures achieved in each organization and the length of time served in each organization. In the discretion of the Chief Executive Officer of Sponsor, employees may become Participants during a Year based on promotions and may receive an Award prorated based on the length of time served in the qualifying job and the Performance Measures achieved while in the qualifying job.

4. New Participants. Any Award that is earned during the Year of selection shall be pro rated based on the length of time served in the qualifying job.

5. Adjustment of Award Amount. In the event of documented performance of a Participant during a Year that is either deficient or exceptional, the Chief Executive Officer of Sponsor, in his sole discretion, may adjust the Award payable to such Participant for such Year.

6. Example. Attached as Exhibit A and incorporated by reference is an example of the process by which an Award is granted hereunder. Said exhibit is intended solely as an example and in no way modifies the provisions of this Article V.

ARTICLE VI

DISTRIBUTION AND DEFERRAL OF AWARDS

1. Distribution of Awards. Unless a Participant elects to defer an award pursuant to the remaining provisions of this Article VI, awards under the Plan earned during any Year shall be paid in cash in the succeeding Year, normally no later than March of such succeeding Year.

2. Deferral Election. A Participant may elect to defer the Plan Award he or she has earned for any Year by completing and submitting to the Vice President, Human Resources, a deferral election form by the later of (i) November 30 of the Year in which the Award is earned or (ii) the thirtieth (30th) day after first becoming eligible to participate in the deferral election provisions of the Plan. Such election shall apply to the Participant's Award, if any, otherwise to be paid after the Year during which it was earned. A Participant's deferral election may apply to 100%, 75%, 50%, or 25% of the Plan Award; provided, however, that in no event shall the amount deferred be less than $1,000.

The election to defer shall be irrevocable as to the Award earned during the particular Year.

3. Period of Deferral. At the time of a Participant's deferral election, a Participant must also select a distribution date and form of distribution. Subject to Section 6, the distribution date may be: (a) any date that is at least five (5) years subsequent to the date the Plan Award would otherwise be payable, but not later than the second anniversary of the Participant's Date of Retirement; or (b) any date that is within two years following the Participant's

Date of Retirement. Subject to Section 6, the form of distribution may be either
(i) a lump sum or (ii) equal installments over a period extending from two years to ten years, as elected by the Participant. Subject to Section 6, a Participant may extend the distribution date for one or more additional Year(s) by making a new deferral election at least one (1) year before the previously selected distribution date occurs; provided, however, that (a) in no event shall the subsequent distribution date be a date that is more than two years beyond the Participant's Date of Retirement and (b) such a change will only be available once for each deferred Award. Additionally, a Participant may elect to change the form of distribution by making a new form of distribution election, provided, however, that (a) any change in the form of distribution must be made at least one (1) year before any distribution occurs and (b) such a change will only be available once for each deferred Award.

4. Performance Units. All Awards which are deferred under the Plan shall be recorded in the form of Performance Units. Each Performance Unit is generally equivalent to a share of the Sponsor's Common Stock. In converting the cash award to Performance Units, the number of Performance Units granted shall be determined by dividing the amount of the Award by 85% of the average value of the opening and closing price of a share of the Sponsor's Common Stock on the last trading day of the month preceding the date of the Award. The Performance Units attributable to the 15% discount from the average value of the Sponsor's Common Stock shall be referred to as the "Incentive Performance Units." The Incentive Performance Units and any adjustments or earnings attributable to those Performance Units shall be forfeited by the Participant if he or she terminates employment either voluntarily or involuntarily other than for death or Retirement prior to five years from March 15 of the Year in which payment

would have been made if the Award had not been deferred; provided, however, that if before such date the employment of the Participant is terminated by the Company without Cause following a Change in Control, the Incentive Performance Units shall not be forfeited but shall be payable to the Participant in accordance with Section 8 of this Article VI.

5. Plan Accounts. A Plan Deferral Account will be established on behalf of each Participant, and the number of Performance Units awarded to a Participant shall be recorded in each Participant's Plan Deferral Account as of the first of the month coincident with or next following the month in which a deferral becomes effective. The number of Performance Units recorded in a Participant's Plan Deferral Account shall be adjusted to reflect any splits or other adjustments in the Sponsor's Common Stock, the payment of any cash dividends paid on the Sponsor's Common Stock and the payment of Awards under this Plan to the Participant. To the extent that any cash dividends have been paid on the Sponsor's Common Stock, the number of Performance Units shall be adjusted to reflect the number of Performance Units that would have been acquired if the same dividend had been paid on the number of Performance Units recorded in the Participant's Plan Deferral Account on the dividend record date. For purposes of determining the number of Performance Units acquired with such dividend, the average of the opening and closing price of the Sponsor's Common Stock on the payment date of the Sponsor's Common Stock dividend shall be used.

Each Participant shall receive an annual statement of the balance of his Plan Deferral Account, which shall include the Incentive Performance Units and associated earnings and adjustments that are subject to being forfeited as provided above.

6. Payment of Deferred Plan Awards. Subject to Section 4 related to forfeiture of Incentive Performance Units, Deferred Plan Awards shall be paid in cash by each Company on the deferred distribution date specified by the

Participant in accordance with Section 3, or as soon as practicable thereafter. To convert the Performance Units in a Participant's Plan Deferral Account to a cash payment amount, Performance Units shall be multiplied by the average of the opening and closing price of the Sponsor's Common Stock on the last trading day preceding the applicable distribution date specified by the Participant for the Deferred Plan Award. Except as otherwise provided, deferred amounts will be paid either in a single lump-sum payment or in up to ten (10) annual payments as elected by the Participant at the time of the deferral election.

In the event that a Participant elects to receive the deferred Plan Award in equal annual payments, the amount of the Award to be received in each year shall be determined as follows:

(a) To determine the amount of the initial annual payment, the number of Performance Units in the Participant's Plan Deferral Account will be divided by the total number of annual payments to be received, and the result will be multiplied by the average of the opening and closing price of the Sponsor's Common Stock on the last trading day preceding the due date of the initial payment.

(b) To determine the amount of each successive annual payment, the Plan Deferral Account balance will be divided by the number of annual payments remaining, and the result will be multiplied by the average of the opening and closing price of the Sponsor's Common Stock on the last trading day preceding the due date of the annual payment.

7. Termination of Employment/Effect on Deferral Election. If the employment of a Participant terminates prior to the last day of a Year for which a Plan Award is determined, then any deferral election made with respect to such Plan Award for such Year shall not become effective and any Plan Award to which the

Participant is otherwise entitled shall be paid as soon as practicable after the end of the Year during which it was earned, in accordance with paragraph 1 of this Article VI.

8. Termination of Employment/Acceleration of Deferral. Notwithstanding the foregoing, if a Participant terminates employment by reason other than death or Retirement, full payment of all amounts due to the Participant shall be accelerated and paid on the first day of the month following the date of termination, or as soon as practicable thereafter. Incentive Performance Units shall be subject to forfeiture to the extent provided in Section 4.

9. Financial Hardship Payments. In the event of a severe financial hardship occasioned by an emergency, including, but not limited to, illness, disability or personal injury sustained by the Participant or a member of the Participant's immediate family, a Participant may apply to receive a distribution earlier than initially elected. The Chief Executive Officer of Sponsor or his designee may, in his sole discretion, either approve or deny the request. The determination made by the Chief Executive Officer of Sponsor will be final and binding on all parties. If the request is granted, the payments will be accelerated only to the extent reasonably necessary to alleviate the financial hardship. Incentive Performance Units shall not be subject to early distribution under this Section 9 until five years from March 15 of the Year in which payment would have been made if the Award had not been deferred.

10. Death of a Participant. If the death of a Participant occurs before a full distribution of the Participant's Plan Deferral Account is made, payment shall be made to the Designated Beneficiary of the Participant in accordance with the schedule specified in the Participant's Deferral Election form. Said payment shall be made as soon as practical following notification that death has occurred.

11. Non-Assignability of Interests. The interests herein and the right to receive distributions under this Article VI 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 a Participant becomes bankrupt, the interests of the Participant under this Article VI may be terminated by the Chief Executive Officer of Sponsor, which, in his sole discretion, may cause the same to be held or applied for the benefit of one or more of the dependents of such Participant or make any other disposition of such interests that he deems appropriate.

12. Unfunded Deferrals. Nothing in this Plan, including this Article VI, shall be interpreted or construed to require the Sponsor or any Company in any manner to fund any obligation to the Participants, terminated Participants or beneficiaries hereunder. Nothing contained in this Plan nor any action taken hereunder shall create, or be construed to create, a trust of any kind, or a fiduciary relationship between the Sponsor or any Company and the Participants, terminated Participants, beneficiaries, or any other persons. Any funds which may be accumulated in order to meet any obligation under this Plan shall for all purposes continue to be a part of the general assets of the Sponsor or Company; provided, however, that the Sponsor or Company may establish a trust to hold funds intended to provide benefits hereunder to the extent the assets of such trust become 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. To the extent that any Participant, terminated Participant, or beneficiary acquires a right to receive payments from the Sponsor or Company under this Plan, such rights shall be no greater than the rights of any unsecured general creditor of the Sponsor or Company.

13. Change of Control. In the case of a Change of Control, the Company shall, subject to the restrictions in this Section 13 and Section 12 of Article

VI, 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 Designated Beneficiary) the net present value as of the date on which the Change of Control occurs, of the benefits to which Participants (or their Designated Beneficiaries) would be entitled pursuant to the terms of the Plan if the value of their Plan Deferral Account would be paid in a lump sum upon the Change of Control.

ARTICLE VII

TERMINATION OF EMPLOYMENT

Except as otherwise provided in this Article VII, a Participant must be actively employed by a Company on the next January 1 immediately following the Year for which a Plan Award is earned in order to be entitled to payment of the full amount of any Award for that Year. In the event the active employment of a Participant shall terminate or be terminated for any reason before the next January 1 immediately following the Year for which a Plan Award is earned, such Participant shall receive his or her Award for the year, if any, in an amount that the Chief Executive Officer of the Sponsor deems appropriate. Notwithstanding the foregoing provisions of this Article VII, in the event the employment of the Participant is terminated by the Company without Cause following a Change in Control, the Award of the Participant for the Year in which the termination occurs shall equal the amount of the Award which would have been earned for the Year if the Participant had remained in the employment of the Company until the next January 1, pro rated to reflect the portion of the Year completed by the Participant as an employee; provided, however, that such Award shall not be less than the Target Award Opportunity of the Participant for the Year, pro rated to reflect the portion of the Year completed by the Participant as an employee.

ARTICLE VIII

MISCELLANEOUS

1. Assignments and Transfers. The rights and interests of a Participant under the Plan may not be assigned, encumbered or transferred except, in the event of the death of a Participant, by will or the laws of descent and distribution.

2. Employee Rights Under the Plan. No Company employee or other person shall have any claim or right to be granted an Award under the Plan or any other incentive bonus or similar plan of the Sponsor or any Company. Neither the Plan, participation in the Plan nor any action taken hereunder shall be construed as giving any employee any right to be retained in the employ of the Sponsor or any Company.

3. Withholding. The Sponsor or Company (as applicable) shall have the right to deduct from all amounts paid in cash any taxes required by law to be withheld with respect to such cash payments.

4. Amendment or Termination. The Compensation Committee may in its sole discretion amend, suspend or terminate the Plan or any portion thereof at any time; provided, that in the event of a Change of Control, no such action shall take effect prior to the January 1 next following the Year in which occurs the Change of Control. No action to amend, suspend or terminate the Plan shall affect the right of a Participant to the payment of a Plan Award earned prior to the effective date of such action.

5. Governing Law. This Plan shall be construed and governed in accordance with the laws of the state of North Carolina.

6. Entire Agreement. This document (including the Exhibits attached hereto) sets forth the entire Plan.

EXHIBIT A

(to be supplied)

EXHIBIT B

Progress Energy Carolinas, Inc.

Progress Energy Service Company, LLC

Progress Energy Florida, Inc.

Progress Energy Ventures, Inc.

Progress Fuels Corporation (corporate employees)

DESIGNATION OF BENEFICIARY
MANAGEMENT INCENTIVE COMPENSATION PLAN
OF
PROGRESS ENERGY, INC.

As provided in the Management Incentive Compensation Plan of Progress Energy, Inc., I hereby designate the following person as my beneficiary in the event of my death before a full distribution of my Deferral Account is made.

PRIMARY BENEFICIARY:

CONTINGENT BENEFICIARY:

Any and all prior designations of one or more beneficiaries by me under the Management Incentive Compensation Plan of Progress Energy, Inc. are hereby revoked and superseded by this designation. I understand that the primary and contingent beneficiaries named above may be changed or revoked by me at any time by filing a new designation with the Sponsor's Human Resources Department.

The Participant named above executed this document in our presence on the date set forth above