FLORIDA POWER CORP (Form: 10-Q, Received: 11/08/2011 16:12:30)

EXHIBIT 10(d)

PROGRESS ENERGY, INC.

MANAGEMENT CHANGE-IN-CONTROL PLAN

(Amended and Restated Effective July 13, 2011)

1.0

PURPOSE OF PLAN

1.1

Purpose. The purpose of the Progress Energy, Inc. Management Change-in-Control Plan (the “Plan”) is to attract and retain certain highly qualified individuals as management employees of Progress Energy, Inc. and its subsidiaries, and to provide a benefit to such management employees if their employment is terminated in connection with a Change in Control (as defined below). This Plan is intended to qualify as a “top-hat” plan under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), in that it is intended to be an “employee pension benefit plan” (as such term is defined under Section 3(2) of ERISA) which is unfunded and provides benefits only to a select group of management or highly compensated employees of the Company or any Subsidiary. The Plan amends and restates the Plan as restated effective July 10, 2002, January 1, 2005, January 1, 2007, and January 1, 2008. The Carolina Power & Light Company Management Change-in-Control Plan was originally adopted effective January 1, 1998.

2.0

DEFINITIONS

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

2.1

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

2.2

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

2.3

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

2.4

“Cause” shall mean:

(a)

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

(b)

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

(c)

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

(d)

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

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

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

2.5

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

(a)

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

(b)

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

(c)

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

(d)

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

(e)

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

(f)

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

A Change-in-Control shall not be deemed to have occurred until a majority of the members of the Board receive written certification from the Committee that one of the events set forth in this Section 2.5 has occurred. Any determination that an event described in this Section 2.5 has occurred shall, if made in good faith on the basis of information available at that time, be conclusive and binding on the Committee, the Company, the Participants and their Beneficiaries for all purposes of the Plan.

2.6

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

2.7

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

2.8

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

2.9

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

Effective as of the Effective Time as such term is defined in the Agreement and Plan of Merger by and among Duke Energy Corporation, Diamond Acquisition Corporation and the Company dated as of January 8, 2011, “Committee” shall mean (i) the Board or (ii) a committee or subcommittee of the Board appointed by the Board from among its members. The Committee shall be the Board’s Committee on Organization and Compensation until a different Committee is appointed.

2.10

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

2.11

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

2.12

“ Effective Date” of the Plan, as amended and restated herein, shall mean January 1, 2008.

2.13

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

(a)

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

(b)

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

(c)

a material reduction in the Participant’s total incentive compensation opportunity under the Company’s Management Incentive Compensation Plan, the 1997 Equity Incentive Plan, the 2002 Equity Incentive Plan, the 2007 Equity Incentive Plan, the

Performance Share Sub-Plans, or any other incentive compensation plan (based on the total incentive compensation opportunity previously granted to such Participant during the 12-month period preceding a Change-in-Control Date) without the Participant’s prior written consent;

(d)

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

(e)

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

(f)

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

Effective January 8, 2011, notwithstanding the preceding provisions of this Section 2.13, with respect to “Post-Agreement Awards” (as defined below), the term “Good Reason” shall be defined as follows:

“Good reason” shall mean (i) a material reduction in the Participant’s annual base salary as in effect immediately before the Effective Time as defined in the Agreement and Plan of Merger between the Company and Duke Energy Corporation (exclusive of any across the board reduction similarly affecting all or substantially all similarly situated employees determined without regard to whether or not an otherwise similarly situated employee’s employment was with the Company prior to the Effective Time) or (ii) a material reduction in the Participant’s target annual bonus as in effect immediately prior to the Effective Time (exclusive of any across the board reduction similarly affecting all or substantially all similarly situated employees determined without regard to whether or not an otherwise similarly situated employee’s employment was with the Company prior to the Effective Time).

The term “Post-Agreement Award” means any equity award, including but not limited to options, restricted stock, restricted stock units and performance shares granted by the Company on or after January 8, 2011, other than any such awards granted to a Participant who has signed an agreement, with the Company or another entity, waiving the Participant’s right to assert certain grounds for a resignation with Good Reason (as defined in clauses (a) through (f) above).

2.14

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

2.15

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

2.16

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

2.17

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

2.18

“Retirement” shall mean the termination of employment of a Participant after having

attained the age of 65 with five or more years of service, or the age of 55 with 15 or more years of service, or after having completed 35 or more years of service regardless of age.

2.19

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

2.20

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

2.21

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

2.22

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

2.23

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

2.24

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

2.25

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

3.0

ELIGIBILITY AND PARTICIPATION

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

(a)

Tier I -

Chief Executive Officer, Chief Operating Officer, President and Executive Vice Presidents who are members of the Senior Management Committee of the Company.

(b)

Tier II -

Senior Vice Presidents who are members of the Senior Management Committee of the Company.

(c)

Tier III -

Vice Presidents, Department Heads and other selected Management Employees of the Company or any Subsidiary.

3.2

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

4.0

ADMINISTRATION

4.1

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

4.2

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

(a)

to determine eligibility for participation in the Plan;

(b) to designate Participants;

(c)

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

(d)

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

(e)

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

(f)

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

(g)

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

(h)

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

(i)

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

4.3

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

4.4

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

4.5

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

4.6

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

4.7

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

5.0

TERMINATION OF EMPLOYMENT

5.1

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

6.0

CHANGE-IN-CONTROL BENEFITS

6.1

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

(a)

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

(b)

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

or (ii) the Terminated Participant’s target annual incentive bonus for the year in which the Termination Date occurs.

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

	Participant			Applicable Percentage
	Tier I			300%
	Tier II			200%
	Tier III			150%

6.2

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

6.3

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

6.4

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

6.5

Performance Share Sub-Plans. The Terminated Participant shall become vested as of the Termination Date in any awards which have been granted to such Participant under the Company’s Performance Share Sub-Plans. The Terminated Participant shall be entitled to payment of any awards which have been granted to him or her under such plans prior to the Termination Date within 60-90 days following the Termination Date.

6.6

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

(a)

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

(b)

Option Not Assumed by Successor. If the Stock Option Agreement has not been assumed by the successor on or before the Change-in-Control Date, any outstanding options shall be fully vested as of the Change-in-Control Date and, in lieu of exercise, the value of such options shall be paid to the Terminated Participant in an amount equal to the excess, if any, of the aggregate fair market

value as of the Change-in-Control Date of the shares subject to such options over the aggregate exercise price for such shares. Such payment shall be made during the 10-day period following the later of (i) the Termination Date, or (ii) the Change-in-Control Date. Notwithstanding the foregoing, if the Terminated Participant was terminated in anticipation of a Change-in-Control as described in Section 5.1 and the anticipated Change-in-Control does not occur, this Section 6.6(b) shall not apply and the terms of the Stock Option Agreement shall control.

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

6.7

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

6.8

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

7.0

PARTICIPATION IN NONQUALIFIED PENSION AND WELFARE BENEFIT PLANS

7.1

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

7.2

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

7.3

Split-Dollar Life Insurance Policies. Following the Termination Date, the Terminated Participant shall be entitled to payment by the Company of all premiums due under any

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

7.4

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

(a)

the end of the Applicable Period following the Termination Date;

(b)

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

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

7.5

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

	Participant			Applicable Period
	Tier I			36 Months
	Tier II			24 Months
	Tier III			18 Months

8.0

TRIGGER TRUST

8.1

Establishment of Trigger Trust. Except as provided in the following sentence, the Board may, in its sole discretion, establish or cause to be established a Trigger Trust as described in Section 8.2 below, the purpose of which is to provide a fund for the payment of some or all of the Change-in-Control Benefits and other benefits provided under Sections 6 and 7 above to Terminated Participants following a Change-in-Control Date, and such other benefits as may be determined by the Board from time to time. Notwithstanding the preceding sentence, the Board shall not establish or cause to be established a Trigger Trust in connection with the transactions described in the Agreement and Plan of Merger by and among Duke Energy Corporation, Diamond Acquisition Corporation and the Company dated as of January 8, 2011.

8.2

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

(a)

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

(b)

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

(c)

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

(d)

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

9.0

CLAIMS

9.1

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

9.2

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

9.3

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

10.0

TAXES

10.1

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

10.2

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

for the benefit of a Participant under the Plan, or that such tax treatment will apply to or be available to a Participant on account of participation in the Plan.

11.0

ADDITIONAL PAYMENTS

11.1

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

11.2

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

(a)

the total amount of the Payments shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments” within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, except to the extent that, in the opinion of independent

counsel selected by the Company and reasonably acceptable to such Participant (“Independent Counsel”), a Payment (in whole or in part) does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code, or such “excess parachute payments” (in whole or in part) are not subject to the Excise Tax;

(b)

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

(c)

the value of any noncash benefits or any deferred payment or benefit shall be

determined by Independent Counsel in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.

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

11.3

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

11.4

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

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

11.5

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

12.0

TERM OF PLAN; AMENDMENT AND TERMINATION

12.1

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

thereafter, such action shall not adversely affect the benefits of any Terminated Participant.

13.0

COMPLIANCE WITH SECTION 409A

13.1

General. The Plan and the amounts payable and other benefits provided under the Plan are intended to comply with, or otherwise be exempt from, Section 409A, after giving effect to the exemptions in Treasury Regulation section 1.409A-1(b)(3) through (b)(12). The Plan shall be administered, interpreted and construed in a manner consistent with Section 409A. If any provision of the Plan is found not to comply with, or otherwise not be exempt from, the provisions of Section 409A, it shall be modified and given effect, in the sole discretion of the Committee and without requiring a Participant’s consent, in such manner as the Committee determines to be necessary or appropriate to comply with, or to effectuate an exemption from, Section 409A; provided, however, that in exercising its discretion under this Section 13.1, the Committee shall modify the Plan or any amount payable or other benefits provided under the Plan, in the least restrictive manner necessary. If the Plan or any amount payable or other benefit provided under the Plan shall be deemed not to comply with Section 409A or any related regulations or other guidance, then neither the Company, a Subsidiary, the Committee or any of their designees or agents shall be liable to any Participant or other person for actions, decisions or determinations made in good faith.

Separation from Service; Specified Employees. If a payment or benefit obligation under the Plan arises on account of a Participant’s termination of employment and such payment or benefit obligation constitutes “deferred compensation” (as defined under Treasury Regulation section 1.409A-1(b)(1), after giving effect to the exemptions in Treasury Regulation section 1.409A-1(b)(3) through (b)(12), it shall be payable only after the Participant’s Separation from Service; provided, however, that if the Participant is a Specified Employee, any payment that is scheduled to be paid within six months after such Separation from Service shall accrue without interest and shall be paid on the date that is six months after such Separation from Service or, in the case of a payment or benefit payable in installments, on the first day of the seventh month beginning after the date of the Participant’s Separation from Service or, if earlier, within fifteen days after the Participant’s death (and the payment on the first day of the seventh month beginning after the date of the Participant’s Separation from Service shall include any installments that would have been paid during such period after the Separation from Service if the Participant was not a Specified Employee).

Reimbursement Benefits. With respect to any reimbursement of expenses of, or any provision of in-kind benefits to, a Participant as provided in the Plan, such reimbursement of expenses or provision of in-kind benefits shall be subject to the following limitations: (i) the expenses eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year, except for any medical reimbursement arrangement providing for the reimbursement of expenses referred to in Section 105(b) of the Code; (ii) the reimbursement of an eligible expense shall be made as specified in the Plan and in no event later than the end of the year in which such expense was incurred and (iii) the right to reimbursement or in-kind benefit shall not be subject to liquidation or exchange for another benefit.

13.2

Specific Terms Applicable to Change-in-Control Benefits Subject to Section 409A. Without limiting the effect of Section 13.1 above, and notwithstanding any other provision in the Plan to the contrary, the following provisions shall, to the extent required under

Section 409A, related regulations or other guidance, apply with respect to Change-in-Control Benefits deemed to involve the deferral of compensation under Section 409A:

(a)

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

(b)

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

(c)

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

14.0

MISCELLANEOUS

14.1

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

14.2

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

14.3

No Right to Continued Employment. The Participant’s rights, if any, to continue to serve the Company or any Subsidiary as an employee shall not be enlarged or otherwise affected

by his or her designation as a Participant under the Plan, and the Company or the applicable Subsidiary reserves the right to terminate the employment of any employee at any time. The adoption of the Plan shall not be deemed to give any employee, or any other individual any right to be selected as a Participant or to continued employment with the Company or any Subsidiary.

14.4

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

14.5

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

14.6

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

14.7

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

14.8

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

IN WITNESS WHEREOF, this instrument has been executed this 31 st day of October, 2011.

By:	PROGRESS ENERGY, INC. /s/ William D. Johnson William D. Johnson Chairman, President and Chief Executive Officer

EXHIBIT 10(e)

PROGRESS ENERGY, INC.

AMENDED AND RESTATED

MANAGEMENT DEFERRED COMPENSATION PLAN

Adopted as of January 1, 2000

(As Revised and Restated effective July 12, 2011)

			Page
PREAMBLE			1

ARTICLE I DEFINITIONS			2
	1.1	Account Balance	2
	1.2	Additional Deferral Election	2
	1.3	Affiliated Company	2
	1.4	Board	2
	1.5	Board Committee	2
	1.6	Change in Control	2
	1.7	Change of Form Election	3
	1.8	Change-of-Investment Election	4
	1.9	Code	4
	1.10	Committee	4
	1.11	Company	4
	1.12	Company Incentive Plans	4
	1.13	Continuing Directors	4
	1.14	Deemed Investment Return	4
	1.15	Deferral Election	4
	1.16	Deferrals	5
	1.17	Effective Date	5
	1.18	Eligible Employee	5
	1.19	Employee Stock Incentive Plan	5
	1.20	Enrollment Form	5
	1.21	ERISA	5
	1.22	[Reserved]	5
	1.23	Investment Election	5
	1.24	Matching Allocation	5
	1.25	Net Salary	6
	1.26	Participant	6
	1.27	Participant Accounts	6
	1.28	Participant Company Account	6
	1.29	Participant Deferral Account	6
	1.30	Participant Matchable Deferral	6
	1.31	Payment Commencement	6
	1.32	Phantom Investment Fund	7
	1.33	Phantom Funds Account	7
	1.34	Phantom Investment Subaccount	7
	1.35	Phantom Stock Unit	7
	1.36	Plan	7
	1.37	Plan Year	7
	1.38	Plan Year Accounts	7
	1.39	Progress Energy 401(k) Savings & Stock Ownership Plan	8
	1.40	Retirement Date	8
	1.41	Salary	8

	1.42	Section 409A	8
	1.43	Separation from Service	8
	1.44	SMC Participant	8
	1.45	Sponsor	8
	1.46	SSERP	8
	1.47	Valuation Date	9
	1.48	Value	9
	1.49	Years of Service	9

ARTICLE II PARTICIPATION			9
	2.1	Eligibility	9
	2.2	Commencement of Participation	9
	2.3	Annual Participation Agreement	9
	2.4	Election of Phantom Investment Subaccounts	10

ARTICLE III DEFERRAL ELECTIONS			10
	3.1	Participant Deferred Salary Elections	10
	3.2	Matching Allocations	11

ARTICLE IV ACCOUNTS			11
	4.1	Maintenance of Accounts	11
	4.2	Separate Plan Year Accounts	11
	4.3	Phantom Investment Subaccounts	12
	4.4	Administration of Deferral Accounts	12
	4.5	Administration of Company Accounts	12
	4.6	Change of Phantom Investment Subaccounts and Phantom Stock Units	13
	4.7	Transferred Accounts	13

ARTICLE V VESTING			14
	5.1	Vesting	14

ARTICLE VI DISTRIBUTIONS			14
	6.1	Distribution Elections	14
	6.2	Change-of-Form Elections and Additional Deferral Elections	15
	6.3	Payment	15
	6.4	Unforeseeable Emergency	15
	6.5	Separation from Service	16
	6.6	Taxes	17
	6.7	Acceleration of Payment	17

ARTICLE VII DEATH BENEFITS			17
	7.1	Designation of Beneficiaries	17
	7.2	Death Benefits	17

ARTICLE VIII CLAIMS			18
	8.1	Claim Procedure	18

	8.2	Claims Review Procedure	18

ARTICLE IX ADMINISTRATION			18
	9.1	Committee	18
	9.2	Authority	18

ARTICLE X AMENDMENT AND TERMINATION OF THE PLAN			19
	10.1	Amendment of the Plan	19
	10.2	Termination of the Plan	19
	10.3	No Impairment of Benefits	20

ARTICLE XI FUNDING AND CLAIM STATUS			20
	11.1	General Provisions	20

ARTICLE XII EFFECT ON EMPLOYMENT OR ENGAGMEENT			21
	12.1	General	21

ARTICLE XIII GOVERNING LAW			21
	13.1	General	21

EXHIBIT A

iii

PREAMBLE

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

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

The Plan as amended and restated effective January 1, 2008 shall govern deferrals under the Plan beginning January 1, 2008.

ARTICLE I

DEFINITIONS

1.1	Account Balance

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

1.2	Additional Deferral Election

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

1.3	Affiliated Company

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

1.4

Board

The Board of Directors of the Sponsor.

1.5	Board Committee

The Organization and Compensation Committee of the Board.

1.6	Change in Control

The earliest of the following dates:

(a)

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

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

(c)

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

(d)

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

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

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

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

1.7	Change of Form Election

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

1.8	Change-of-Investment Election

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

1.9

Code

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

1.10

Committee

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

1.11

Company

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

1.12	Company Incentive Plans

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

1.13	Continuing Directors

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

1.14	Deemed Investment Return

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

1.15	Deferral Election

An election to defer Salary pursuant to Section 3.1.

1.16

Deferrals

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

1.17	Effective Date

January 1, 2008.

1.18	Eligible Employee

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

1.19	Employee Stock Incentive Plan

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

1.20	Enrollment Form

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

1.21

ERISA

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

1.22	[Reserved]

1.23	Investment Election

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

1.24	Matching Allocation

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

1.25	Net Salary

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

1.26	Participant

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

1.27	Participant Accounts

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

1.28	Participant Company Account

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

1.29	Participant Deferral Account

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

1.30	Participant Matchable Deferral

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

1.31	Payment Commencement

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

1.32	Phantom Investment Fund

A deemed investment option for purposes of the Plan, each of which shall be the same as those investment options generally available to all participants in the Progress Energy 401(k) Savings & Stock Ownership Plan, or as otherwise selected by the Committee, exclusive of Phantom Stock Units which shall not be a deemed investment option under this Plan for Deferrals made after September 1, 2010.

1.33	Phantom Funds Account

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

1.34	Phantom Investment Subaccount

A notational bookkeeping account maintained under the Plan at the direction of the Committee representing a deemed investment in one or more Phantom Investment Funds as directed by the Participant under Sections 2.4 and 4.6, and which may include Phantom Stock Units for Deferrals made prior to September 1, 2010 and for Matching Allocations made prior to January 1, 2003.

1.35	Phantom Stock Unit

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

1.36

Plan

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

1.37

Plan Year

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

1.38	Plan Year Accounts

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

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

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

1.40	Retirement Date

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

1.41

Salary

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

1.42	Section 409A

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

1.43	Separation from Service

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

1.44	SMC Participant

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

1.45

Sponsor

Progress Energy, Inc. and its successors in interest.

1.46

SSERP

The Supplemental Senior Executive Retirement Plan of the Company.

1.47	Valuation Date

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

1.48

Value

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

1.49	Years of Service

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

ARTICLE II

PARTICIPATION

2.1	Eligibility

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

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

2.2	Commencement of Participation

An Eligible Employee who is not a Participant may elect to become a Participant as of the first day of a Plan Year by completing and submitting an Enrollment Form to the Sponsor’s designated agent by November 30 prior to the first day of the Plan Year as of which participation is to commence.

2.3	Annual Participation Agreement

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

2.4	Election of Phantom Investment Subaccounts

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

ARTICLE III

DEFERRAL ELECTIONS

3.1	Participant Deferred Salary Elections

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

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

(i) A Participant who is (or would be) eligible for a bonus at the 10%, 12%, or 15% of salary target incentive level (the “Target”) for the Plan Year under the MICP may defer up to 10% of Salary.

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

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

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

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

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

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

3.2	Matching Allocations

A Participant who has made a Deferral Election with respect to a Plan Year and has Participant Matchable Deferrals for such Plan Year shall receive a credit to his Participant Company Account of a Matching Allocation for such Plan Year. The Matching Allocation with respect to a Plan Year shall equal 100% of the Participant Matchable Deferrals. Matching Allocations shall be credited to the Participant Company Account within ten business days following the applicable payroll date, based on a pro-rata portion of projected Matchable Deferrals for the Plan Year applicable to each payroll period during the Plan Year.

ARTICLE IV

ACCOUNTS

4.1	Maintenance of Accounts

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

4.2	Separate Plan Year Accounts

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

4.3	Phantom Investment Subaccounts

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

4.4	Administration of Deferral Accounts

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

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

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

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

4.5	Administration of Company Accounts

(a) A Participant’s Company Account shall be comprised of Phantom Investment Fund units which shall be recorded in Phantom Investment Subaccounts. Effective September 1, 2010, all Matching Allocations shall be recorded in Phantom Investment Subaccounts as elected by the Participant for his Plan Year Participant Deferral Account, or in the event the Participant has not made an election, the Matching Allocations shall be recorded in the phantom stable value fund. Prior to September 1, 2010, to the extent Matching Allocations are initially deemed to be invested in Phantom Stock Units, the number of Phantom Stock Units will be determined on the date of each allocation under the Plan based on the closing price of a share of common stock of the Sponsor on the New York Stock Exchange on the date of each allocation. To the extent the Matching Allocations are initially deemed to be invested in one or more Phantom Investment Funds (other than Phantom Stock Units), the number of units in these Phantom Investment Funds will be determined on the date of each allocation under the Plan, using the closing price of the units of the underlying investment fund on which the Phantom Investment Fund is based, on the date of each allocation.

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

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

4.6	Change of Phantom Investment Subaccounts and Phantom Stock Units

(a) A Participant may elect to reallocate the value of his Phantom Investment Subaccounts comprising his Deferral Account among other Phantom Investment Subaccounts and change the allocation of future Deferrals among Phantom Investment Subaccounts once per calendar month pursuant to uniform rules and procedures adopted by the Committee. Provided, however, that Participants may not reallocate the value of his Phantom Investment Subaccounts into Phantom Stock Units.

(b) A Participant may elect to reallocate Phantom Investment Subaccounts comprising his Company Account once per calendar month pursuant to uniform rules adopted by the Committee. Provided, however, that Participants may not reallocate the value of his Phantom Investment Subaccounts into Phantom Stock Units.

4.7	Transferred Accounts

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

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

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

ARTICLE V

VESTING

5.1

Vesting

A Participant’s Deferral Accounts and Participants Company Accounts shall be 100% vested at all times.

ARTICLE VI

DISTRIBUTIONS

6.1	Distribution Elections

A Participant when making a Deferral Election pursuant to an Enrollment Form with respect to a Plan Year shall elect on such Enrollment Form (a) to defer the payment of his Plan Year Accounts with respect to such Plan Year, in accordance with the Plan until (i) the April 1 following the date that is five years from the last day of such Plan Year, (ii) the April 1 following the Participant’s Retirement or (iii) the April 1 following the first anniversary of the Participant’s Retirement (each a “Payment Commencement Date”) and (b) to provide for the payment of such Plan Year Account in the form of (i) a lump sum or (ii) approximately equal installments over a period extending from two years to ten years (by paying a fraction of the account balance each year during such period), as elected by the Participant. Except as otherwise provided in this Article VI, such elections may not be changed or revoked. Notwithstanding the foregoing, if the Participant is a “key employee” as defined in Section 416(i) of the Code (but determined without regard to paragraph 5 thereof or the 50 employee limit on the number of officers treated as key employees), payment of deferred amounts shall not be made pursuant to an election under Section 6.1(a)(ii) above before the date that is six months after the date of Separation from Service for any reason including Retirement (or, if earlier, the date of death of the Participant). Such payment shall commence within 60 days following the six-month delay period. In the event payments to the Participant under this Plan shall be delayed for six months following the termination of the

Participant as provided in this paragraph (b), the Participant (if then living) shall receive a lump sum payment as of the first day of the seventh month following the termination of employment in an amount equal to six times the monthly payment due to the Participant under this Plan, in addition to the monthly payment then due to the Participant.

6.2	Change-of-Form Elections and Additional Deferral Elections

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

(b) Any elections made under Section 6.1 with respect to amounts deferred after December 31, 2004, shall be irrevocable except as permitted by rules promulgated under Section 409A and consented to by the Committee.

6.3

Payment

Upon occurrence of an event specified in the Participant’s distribution election under Section 6.1 (a “Distribution Event”) with respect to Plan Year Accounts, as modified by any applicable subsequent Additional Deferral Election under Section 6.2, the Account Balance of a Participant’s Plan Year Accounts shall be paid by the Company to the Participant in the form elected under Section 6.1. Such payments shall commence within 60 days following the occurrence of the Distribution Event.

6.4	Unforeseeable Emergency

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

An “unforeseeable emergency” shall mean a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s

spouse or a dependent (as defined in Section 152(a) of the Code) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

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

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

6.5	Separation from Service

In the event of the Separation from Service of a Participant with the Company and any parent, subsidiary or affiliate for any reason, prior to the Retirement or death of the Participant, the vested portion of the Participant Accounts of such Participant shall be paid in a lump sum to such Participant based on the Value of such accounts as of the Valuation Date coincident with or immediately preceding the date of distribution. Such payment shall be made within 60 days following the Participant’s termination date as determined under the Company’s normal administrative practices. The nonvested portion of a terminated Participant’s Company Account shall be forfeited by the Participant. In the event of the Separation from Service of a SMC Participant for whom no Deferral Election was made for a Plan Year, any Matching Allocation, and Deemed Investment Return allocated to such Participant shall be distributed to the Participant following termination of employment in accordance with this Section 6.5. In the event of the Retirement of a Participant prior to the Payment Commencement Date elected by the Participant under Section 6.1(a)(i) with respect to a Plan Year Account, distribution of such account shall commence no later than April 1 following the first anniversary of the Participant’s Retirement. Notwithstanding the foregoing, if the Participant is a “key employee” as defined in Section 416(i) of the Code (but determined without regard to paragraph 5 thereof or the 50 employee limit on the number of officers treated as key employees), payment of deferred amounts shall not be made before the date that is six months after the date of Separation from Service for any reason including Retirement (or, if earlier, the date of death of the Participant). Such payment shall commence within 60 days following the six-month delay period.

6.6

Taxes

The Company shall report Deferrals in the year they occur as required by Section 6041 and Section 6051 of the Code. The Company shall deduct from all payments under the Plan federal, state and local income and employment taxes, as required by applicable law. Deferrals will be taken into account for purposes of any tax or withholding obligation under the Federal Insurance Contributions Act and Federal Unemployment Tax Act in the year of the Deferrals, as required by Sections 3121(v) and 3306(r) of the Code and the regulations thereunder. Amounts required to be withheld in the year of the Deferrals pursuant to Sections 3121(v) and 3306(r) shall be withheld out of current wages or other compensation paid by the Company to the Participant.

6.7	Acceleration of Payment

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

ARTICLE VII

DEATH BENEFITS

7.1	Designation of Beneficiaries

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

7.2	Death Benefit

In the event of the death of a Participant prior to the payout of his Participant Accounts, the Value of the remaining portion of the Participant Accounts shall be paid by the Company in a lump sum to the Participant’s beneficiary (as defined under Section 7.1) based on the Value of such accounts on the Valuation Date immediately following the date of death. Payment shall be made within 60 days following such Valuation Date pursuant to rules and procedures adopted by the Committee.

ARTICLE VIII

CLAIMS

8.1	Claims Procedure

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

8.2	Claims Review Procedure

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

ARTICLE IX

ADMINISTRATION

9.1

Committee

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

9.2

Authority

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

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

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

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

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

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

ARTICLE X

AMENDMENT AND TERMINATION OF THE PLAN

10.1	Amendment of the Plan

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

10.2	Termination of the Plan

The Plan may be terminated at any time by written action of the Board or the Board Committee or by the Committee as provided under the Plan; provided, that termination of the Plan shall not affect the distribution of the Participant Accounts (except as otherwise permitted under Section 409A of the Code). Notwithstanding the foregoing, the Plan may be terminated and Participant Accounts distributed to

Participants within twelve months of a “change in control event” as defined for purposes of Section 409A of the Code.

10.3	No Impairment of Benefits

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

ARTICLE XI

FUNDING AND CLAIM STATUS

11.1	General Provisions

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

(b) In the case of a Change in Control that is not a “change in the financial health” of the Company, as defined for purposes of Section 409A, the Company shall, subject to the restrictions in this paragraph and in Section 11.1(a), irrevocably set aside funds in one or more such grantor trusts in an amount that is sufficient to pay each Participant employed by such Company (or beneficiary) the net present value as of the date on which the Change in Control occurs, of the benefits to which Participants (or their beneficiaries) would be entitled pursuant to the terms of the Plan if the Value of their Participant Account would be paid in a lump sum upon the Change of Control. Notwithstanding the preceding sentence, the Company shall not set aside funds, revocably or irrevocably, in one or more grantor trusts in connection with the transactions described in the Agreement and Plan of Merger between the Company and Duke Energy Corporation dated as of January 8, 2011.

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

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

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

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

ARTICLE XII

EFFECT ON EMPLOYMENT OR ENGAGEMENT

12.1

General

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

ARTICLE XIII

GOVERNING LAW

13.1

General

The Plan and all actions taken in connection with the Plan shall be governed by and construed in accordance with the laws of the State of North Carolina

without reference to principles of conflict of laws, except as superseded by applicable federal law.

IT WITNESS WHEREOF, this instrument has been executed this 31 st day of October, 2011.

By:	PROGRESS ENERGY, INC. /s/ William D. Johnson William D. Johnson Chairman, President and Chief Executive Officer

EXHIBIT A

Progress Energy Service Company, LLC

Progress Energy Carolinas, Inc.

Progress Energy Ventures, Inc.

Progress Energy Florida, Inc.

Progress Fuels Corporation (corporate employees only)

Commission File Number	Exact name of registrants as specified in their charters, states of incorporation, addresses of principal executive offices, and telephone numbers	I.R.S. Employer Identification Number


1-15929	Progress Energy, Inc. 410 South Wilmington Street Raleigh, North Carolina 27601-1748 Telephone: (919) 546-6111 State of Incorporation: North Carolina	56-2155481

1-3382	Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. 410 South Wilmington Street Raleigh, North Carolina 27601-1748 Telephone: (919) 546-6111 State of Incorporation: North Carolina	56-0165465

1-3274	Florida Power Corporation d/b/a Progress Energy Florida, Inc. 299 First Avenue North St. Petersburg, Florida 33701 Telephone: (727) 820-5151 State of Incorporation: Florida	59-0247770

Progress Energy, Inc. (Progress Energy)	Yes	x	No	o
Carolina Power & Light Company (PEC)	Yes	x	No	o
Florida Power Corporation (PEF)	Yes	o	No	x

Progress Energy	Yes	x	No	o
PEC	Yes	x	No	o
PEF	Yes	x	No	o

Progress Energy	Large accelerated filer	x	Accelerated filer	o
	Non-accelerated filer	o	Smaller reporting company	o

PEC	Large accelerated filer	o	Accelerated filer	o
	Non-accelerated filer	x	Smaller reporting company	o

PEF	Large accelerated filer	o	Accelerated filer	o
	Non-accelerated filer	x	Smaller reporting company	o

Progress Energy	Yes	o	No	x
PEC	Yes	o	No	x
PEF	Yes	o	No	x

Registrant	Description	Shares
Progress Energy	Common Stock (Without Par Value)	295,005,362

PEC	Common Stock (Without Par Value)	159,608,055 (all of which were held directly by Progress Energy, Inc.)

PEF	Common Stock (Without Par Value)	100 (all of which were held indirectly by Progress Energy, Inc.)

TABLE OF CONTENTS
GLOSSARY OF TERMS		2

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS		5

PART I. FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS	7

	Unaudited Condensed Interim Financial Statements

	Progress Energy, Inc. (Progress Energy)
	Unaudited Condensed Consolidated Statements of Income	7
	Unaudited Condensed Consolidated Balance Sheets	8
	Unaudited Condensed Consolidated Statements of Cash Flows	9

	Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. (PEC)
	Unaudited Condensed Consolidated Statements of Income	10
	Unaudited Condensed Consolidated Balance Sheets	11
	Unaudited Condensed Consolidated Statements of Cash Flows	12

	Florida Power Corporation d/b/a Progress Energy Florida, Inc. (PEF)
	Unaudited Condensed Statements of Income	13
	Unaudited Condensed Balance Sheets	14
	Unaudited Condensed Statements of Cash Flows	15

	Combined Notes to Unaudited Condensed Interim Financial Statements for Progress Energy, Inc., Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. and Florida Power Corporation d/b/a Progress Energy Florida, Inc.	16

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	72

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	110

ITEM 4.	CONTROLS AND PROCEDURES	113

PART II. OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	114

ITEM 1A.	RISK FACTORS	114

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	115

ITEM 6.	EXHIBITS	116

SIGNATURES		118

TERM	DEFINITION

2010 Form 10-K	Progress Registrants’ annual report on Form 10-K for the fiscal year ended December 31, 2010
401(k)	Progress Energy 401(k) Savings & Stock Ownership Plan
AFUDC	Allowance for funds used during construction
ARO	Asset retirement obligation
ASC	FASB Accounting Standards Codification
ASLB	Atomic Safety and Licensing Board
the Asset Purchase Agreement	Agreement by and among Global, Earthco and certain affiliates, and the Progress Affiliates as amended on August 23, 2000
ASU	Accounting Standards Update
Audit Committee	Audit and Corporate Performance Committee of Progress Energy’s board of directors
BART	Best Available Retrofit Technology
Base Revenues	Non-GAAP measure defined as operating revenues excluding clause recoverable regulatory returns, miscellaneous revenues and fuel and other pass-through revenues
Brunswick	PEC’s Brunswick Nuclear Plant
Btu	British thermal unit
CAA	Clean Air Act
CAIR	Clean Air Interstate Rule
CAMR	Clean Air Mercury Rule
CAVR	Clean Air Visibility Rule
CCRC	Capacity Cost-Recovery Clause
CERCLA or Superfund	Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended
Clean Smokestacks Act	North Carolina Clean Smokestacks Act
the Code	Internal Revenue Code
CO 2	Carbon dioxide
COL	Combined license
Corporate and Other	Corporate and Other segment primarily includes the Parent, PESC and miscellaneous other nonregulated businesses
CR1 and CR2	PEF’s Crystal River Units No. 1 and No. 2 coal-fired steam turbines
CR3	PEF’s Crystal River Unit No. 3 Nuclear Plant
CR4 and CR5	PEF’s Crystal River Units No. 4 and No. 5 coal-fired steam turbines
CSAPR	Cross-State Air Pollution Rule
CVO	Contingent value obligation
D.C. Court of Appeals	U.S. Court of Appeals for the District of Columbia Circuit
DOE	U.S. Department of Energy
DOJ	U.S. Department of Justice
DSM	Demand-side management
Duke Energy	Duke Energy Corporation
Earthco	Four coal-based solid synthetic fuels limited liability companies of which three were wholly owned
ECCR	Energy Conservation Cost Recovery Clause
ECRC	Environmental Cost Recovery Clause
EE	Energy efficiency

EGU MACT	MACT standards for coal-fired and oil-fired electric steam generating units
EIP	Equity Incentive Plan
EPA	U.S. Environmental Protection Agency
EPC	Engineering, procurement and construction
ESOP	Employee Stock Ownership Plan
FASB	Financial Accounting Standards Board
FDEP	Florida Department of Environmental Protection
FERC	Federal Energy Regulatory Commission
FGT	Florida Gas Transmission Company, LLC
Fitch	Fitch Ratings
the Florida Global Case	U.S. Global, LLC v. Progress Energy, Inc. et al.
Florida Progress	Florida Progress Corporation
FPSC	Florida Public Service Commission
Funding Corp.	Florida Progress Funding Corporation, a wholly owned subsidiary of Florida Progress
GAAP	Accounting principles generally accepted in the United States of America
GHG	Greenhouse gas
Global	U.S. Global, LLC
GWh	Gigawatt-hours
Harris	PEC’s Shearon Harris Nuclear Plant
IPP	Progress Energy Investor Plus Plan
kV	Kilovolt
kVA	Kilovolt-ampere
kWh	Kilowatt-hours
Levy	PEF’s proposed Levy Units No. 1 and No. 2 Nuclear Plants
LIBOR	London Inter Bank Offered Rate
MACT	Maximum achievable control technology
MD&A	Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in PART I, Item 2 of this Form 10-Q
Medicare Act	Medicare Prescription Drug, Improvement and Modernization Act of 2003
the Merger	Proposed merger between Progress Energy and Duke Energy
the Merger Agreement	Agreement and Plan of Merger, dated as of January 8, 2011, by and among Progress Energy and Duke Energy
MGP	Manufactured gas plant
MW	Megawatts
MWh	Megawatt-hours
Moody’s	Moody’s Investors Service, Inc.
NAAQS	National Ambient Air Quality Standards
NC REPS	North Carolina Renewable Energy and Energy Efficiency Portfolio Standard
NCUC	North Carolina Utilities Commission
NDT	Nuclear decommissioning trust
NEIL	Nuclear Electric Insurance Limited
NERC	North American Electric Reliability Corporation
NO 2	Nitrogen dioxide
North Carolina Global Case	Progress Synfuel Holdings, Inc. et al. v. U.S. Global, LLC
NOx	Nitrogen oxides
NRC	Nuclear Regulatory Commission
O&M	Operation and maintenance expense
OATT	Open Access Transmission Tariff
OCI	Other comprehensive income
Ongoing Earnings	Non-GAAP financial measure defined as GAAP net income attributable to controlling interests less discontinued operations and the effects of certain identified gains and charges
OPEB	Postretirement benefits other than pensions

the Parent	Progress Energy, Inc. holding company on an unconsolidated basis
PEC	Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc.
PEF	Florida Power Corporation d/b/a Progress Energy Florida, Inc.
PESC	Progress Energy Service Company, LLC
Power Agency	North Carolina Eastern Municipal Power Agency
PPACA	Patient Protection and Affordable Care Act and the related Health Care and Education Reconciliation Act
Preferred Securities	7.10% Cumulative Quarterly Income Preferred Securities due 2039, Series A issued by the Trust
Preferred Securities Guarantee	Florida Progress’ guarantee of all distributions related to the Preferred Securities
Progress Affiliates	Five affiliated coal-based solid synthetic fuels facilities
Progress Energy	Progress Energy, Inc. and subsidiaries on a consolidated basis
Progress Registrants	The reporting registrants within the Progress Energy consolidated group. Collectively, Progress Energy, Inc., PEC and PEF
PRP	Potentially responsible party, as defined in CERCLA
PSSP	Performance Share Sub-Plan
QF	Qualifying facility
RCA	Revolving credit agreement
Reagents	Commodities such as ammonia and limestone used in emissions control technologies
REPS	Renewable energy portfolio standard
the Registration Statement	The registration statement filed on Form S-4 by Duke Energy related to the Merger
Robinson	PEC’s Robinson Nuclear Plant
ROE	Return on equity
RSU	Restricted stock unit
SCPSC	Public Service Commission of South Carolina
Section 29	Section 29 of the Code
Section 29/45K	General business tax credits earned after December 31, 2005 for synthetic fuels production in accordance with Section 29
Section 45K	Section 45K of the Code
Section 316(b)	Section 316(b) of the Clean Water Act
(See Note/s “#”)	For all sections, this is a cross-reference to the Combined Notes to the Financial Statements contained in PART I, Item 1 of this Form 10-Q
SERC	SERC Reliability Corporation
S&P	Standard & Poor’s Rating Services
SO 2	Sulfur dioxide
SOx	Sulfur oxides
Subordinated Notes	7.10% Junior Subordinated Deferrable Interest Notes due 2039 issued by Funding Corp.
Tax Agreement	Intercompany Income Tax Allocation Agreement
the Trust	FPC Capital I
the Utilities	Collectively, PEC and PEF
VSP	Voluntary severance plan
VIE	Variable interest entity
Ward	Ward Transformer site located in Raleigh, N.C.
Ward OU1	Operable unit for stream segments downstream from the Ward site
Ward OU2	Operable unit for further investigation at the Ward facility and certain adjacent areas

PROGRESS ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
September 30, 2011

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of INCOME
	Three months ended September 30						Nine months ended September 30
(in millions except per share data)	2011			2010			2011			2010
Operating revenues	$	2,747		$	2,962		$	7,170		$	7,869
Operating expenses
Fuel used in electric generation		844			935			2,236			2,574
Purchased power		349			418			898			996
Operation and maintenance		487			474			1,491			1,459
Depreciation, amortization and accretion		175			201			508			680
Taxes other than on income		163			161			437			448
Other		39			20			31			25
Total operating expenses		2,057			2,209			5,601			6,182
Operating income		690			753			1,569			1,687
Other income (expense)
Interest income		1			3			2			6
Allowance for equity funds used during construction		22			22			77			68
Other, net		(70	)		(5	)		(60	)		(5	)
Total other (expense) income, net		(47	)		20			19			69
Interest charges
Interest charges		180			197			568			587
Allowance for borrowed funds used during construction		(8	)		(8	)		(26	)		(24	)
Total interest charges, net		172			189			542			563
Income from continuing operations before income tax		471			584			1,046			1,193
Income tax expense		178			219			386			456
Income from continuing operations before cumulative effect of change in accounting principle		293			365			660			737
Discontinued operations, net of tax		-			(2	)		(4	)		(2	)
Cumulative effect of change in accounting principle, net of tax		-			2			-			-
Net income		293			365			656			735
Net income attributable to noncontrolling interests, net of tax		(2	)		(4	)		(5	)		(4	)
Net income attributable to controlling interests	$	291		$	361		$	651		$	731
Average common shares outstanding – basic		296			294			296			289
Basic and diluted earnings per common share
Income from continuing operations attributable to controlling interests, net of tax	$	0.98		$	1.23		$	2.22		$	2.53
Discontinued operations attributable to controlling interests, net of tax		-			-			(0.02	)		-
Net income attributable to controlling interests	$	0.98		$	1.23		$	2.20		$	2.53
Dividends declared per common share	$	0.620		$	0.620		$	1.860		$	1.860
Amounts attributable to controlling interests
Income from continuing operations, net of tax	$	291		$	363		$	655		$	733
Discontinued operations, net of tax		-			(2	)		(4	)		(2	)
Net income attributable to controlling interests	$	291		$	361		$	651		$	731

See Notes to Progress Energy, Inc. Unaudited Condensed Consolidated Interim Financial Statements.

PROGRESS ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)	September 30, 2011			December 31, 2010
ASSETS
Utility plant
Utility plant in service	$	30,729		$	29,708
Accumulated depreciation		(11,905	)		(11,567	)
Utility plant in service, net		18,824			18,141
Other utility plant, net		222			220
Construction work in progress		2,233			2,205
Nuclear fuel, net of amortization		736			674
Total utility plant, net		22,015			21,240
Current assets
Cash and cash equivalents		103			611
Receivables, net		1,207			1,033
Inventory		1,376			1,226
Regulatory assets		180			176
Derivative collateral posted		112			164
Deferred tax assets		285			156
Prepayments and other current assets		162			110
Total current assets		3,425			3,476
Deferred debits and other assets
Regulatory assets		2,333			2,374
Nuclear decommissioning trust funds		1,512			1,571
Miscellaneous other property and investments		410			413
Goodwill		3,655			3,655
Other assets and deferred debits		327			325
Total deferred debits and other assets		8,237			8,338
Total assets	$	33,677		$	33,054
CAPITALIZATION AND LIABILITIES
Common stock equity
Common stock without par value, 500 million shares authorized, 295 million and 293 million shares issued and outstanding, respectively	$	7,414		$	7,343
Accumulated other comprehensive loss		(207	)		(125	)
Retained earnings		2,905			2,805
Total common stock equity		10,112			10,023
Noncontrolling interests		3			4
Total equity		10,115			10,027
Preferred stock of subsidiaries		93			93
Long-term debt, affiliate		273			273
Long-term debt, net		11,717			11,864
Total capitalization		22,198			22,257
Current liabilities
Current portion of long-term debt		950			505
Short-term debt		45			-
Accounts payable		895			994
Interest accrued		184			216
Dividends declared		185			184
Customer deposits		339			324
Derivative liabilities		303			259
Accrued compensation and other benefits		140			175
Other current liabilities		507			298
Total current liabilities		3,548			2,955
Deferred credits and other liabilities
Noncurrent income tax liabilities		2,310			1,696
Accumulated deferred investment tax credits		104			110
Regulatory liabilities		2,326			2,635
Asset retirement obligations		1,253			1,200
Accrued pension and other benefits		1,226			1,514
Derivative liabilities		255			278
Other liabilities and deferred credits		457			409
Total deferred credits and other liabilities		7,931			7,842
Commitments and contingencies (Notes 14 and 15)
Total capitalization and liabilities	$	33,677		$	33,054

See Notes to Progress Energy, Inc. Unaudited Condensed Consolidated Interim Financial Statements.

CAROLINA POWER & LIGHT COMPANY
d/b/a PROGRESS ENERGY CAROLINAS, INC.
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
September 30, 2011

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS of INCOME
	Three months ended September 30						Nine months ended September 30
(in millions)	2011			2010			2011			2010
Operating revenues	$	1,332		$	1,414		$	3,525		$	3,794
Operating expenses
Fuel used in electric generation		388			464			1,077			1,322
Purchased power		117			109			257			235
Operation and maintenance		271			256			859			841
Depreciation, amortization and accretion		132			120			382			358
Taxes other than on income		57			58			163			169
Other		38			5			38			5
Total operating expenses		1,003			1,012			2,776			2,930
Operating income		329			402			749			864
Other income (expense)
Interest income		-			1			1			3
Allowance for equity funds used during construction		15			17			53			45
Other, net		(4	)		(2	)		(5	)		(5	)
Total other income, net		11			16			49			43
Interest charges
Interest charges		45			51			149			154
Allowance for borrowed funds used during construction		(4	)		(5	)		(15	)		(14	)
Total interest charges, net		41			46			134			140
Income before income tax		299			372			664			767
Income tax expense		100			138			227			284
Income before cumulative effect of change in accounting principle		199			234			437			483
Cumulative effect of change in accounting principle, net of tax		-			2			-			-
Net income		199			236			437			483
Net (income) loss attributable to noncontrolling interests, net of tax		-			(2	)		-			1
Net income attributable to controlling interests		199			234			437			484
Preferred stock dividend requirement		(1	)		(1	)		(2	)		(2	)
Net income available to parent	$	198		$	233		$	435		$	482

See Notes to Progress Energy Carolinas, Inc. Unaudited Condensed Consolidated Interim Financial Statements.

FLORIDA POWER CORPORATION
d/b/a PROGRESS ENERGY FLORIDA, INC.
UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
September 30, 2011

UNAUDITED CONDENSED STATEMENTS of INCOME
	Three months ended September 30						Nine months ended September 30
(in millions)	2011			2010			2011			2010
Operating revenues	$	1,414		$	1,543		$	3,639		$	4,065
Operating expenses
Fuel used in electric generation		456			471			1,159			1,252
Purchased power		232			309			641			761
Operation and maintenance		221			234			655			647
Depreciation, amortization and accretion		39			77			112			311
Taxes other than on income		106			102			274			278
Other		(1	)		6			(13	)		6
Total operating expenses		1,053			1,199			2,828			3,255
Operating income		361			344			811			810
Other income (expense)
Interest income		1			-			1			1
Allowance for equity funds used during construction		7			5			24			23
Other, net		(1	)		(3	)		3			-
Total other income, net		7			2			28			24
Interest charges
Interest charges		50			68			187			202
Allowance for borrowed funds used during construction		(4	)		(3	)		(11	)		(10	)
Total interest charges, net		46			65			176			192
Income before income tax		322			281			663			642
Income tax expense		119			101			245			241
Net income		203			180			418			401
Preferred stock dividend requirement		-			-			(1	)		(1	)
Net income available to parent	$	203		$	180		$	417		$	400

See Notes to Progress Energy Florida, Inc. Unaudited Condensed Interim Financial Statements.

Registrant	Applicable Notes

PEC	1 through 9, 11, 12, 14 and 15

PEF	1 through 9, 11, 12, 14 and 15

(in millions)	Replacement Power Costs			Repair Costs
Spent to date	$	457		$	229
NEIL proceeds received to date		(162	)		(136	)
Insurance receivable at September 30, 2011		(162	)		(48	)
Balance for recovery	$	133	(a)	$	45

(in millions)	Total Common Stock Equity			Noncontrolling Interests			Total Equity
Balance, December 31, 2010	$	10,023		$	4		$	10,027
Net income (a)		651			2			653
Other comprehensive loss		(82	)		-			(82	)
Issuance of shares through offerings and stock- based compensation plans (See Note 5D)		70			-			70
Dividends declared		(550	)		-			(550	)
Distributions to noncontrolling interests		-			(3	)		(3	)
Balance, September 30, 2011	$	10,112		$	3		$	10,115

Balance, December 31, 2009	$	9,449		$	6		$	9,455
Cumulative effect of change in accounting principle		-			(2	)		(2	)
Net income (a)		731			1			732
Other comprehensive loss		(77	)		-			(77	)
Issuance of shares through offerings and stock- based compensation plans (See Note 5D)		461			-			461
Dividends declared		(543	)		-			(543	)
Distributions to noncontrolling interests		-			(2	)		(2	)
Balance, September 30, 2010	$	10,021		$	3		$	10,024

(in millions)	Fair Value		Unrealized Losses		Unrealized Gains
September 30, 2011
Common stock equity	$	925	$	41	$	313
Preferred stock and other equity		50		1		8
Corporate debt		90		1		6
U.S. state and municipal debt		121		2		6
U.S. and foreign government debt		289		-		17
Money market funds and other		89		-		2
Total	$	1,564	$	45	$	352

December 31, 2010
Common stock equity	$	1,021	$	13	$	408
Preferred stock and other equity		28		-		11
Corporate debt		90		-		6
U.S. state and municipal debt		132		4		3
U.S. and foreign government debt		264		2		10
Money market funds and other		52		-		1
Total	$	1,587	$	19	$	439

(in millions)
Due in one year or less	$	35
Due after one through five years		212
Due after five through 10 years		127
Due after 10 years		140
Total	$	514

	Three months ended September 30				Nine months ended September 30
(in millions)	2011		2010		2011		2010
Proceeds	$	1,062	$	2,051	$	4,254	$	5,743
Realized gains		9		7		24		17
Realized losses		11		5		20		20

PROGRESS ENERGY
(in millions)	Level 1		Level 2		Level 3		Total
September 30, 2011
Assets
Nuclear decommissioning trust funds
Common stock equity	$	925	$	-	$	-	$	925
Preferred stock and other equity		23		27		-		50
Corporate debt		-		90		-		90
U.S. state and municipal debt		1		118		-		119
U.S. and foreign government debt		100		188		-		288
Money market funds and other		-		40		-		40
Total nuclear decommissioning trust funds		1,049		463		-		1,512
Derivatives
Commodity forward contracts		-		7		-		7
Other marketable securities
Money market and other		18		7		-		25
Total assets	$	1,067	$	477	$	-	$	1,544

Liabilities
Derivatives
Commodity forward contracts	$	-	$	426	$	43	$	469
Interest rate contracts		-		86		-		86
Contingent value obligations		-		-		74		74
Total liabilities	$	-	$	512	$	117	$	629

PROGRESS ENERGY
	Pension Benefits						OPEB
(in millions)	2011			2010			2011		2010
Service cost	$	13		$	12		$	3	$	3
Interest cost		35			35			10		13
Expected return on plan assets		(45	)		(40	)		-		(1	)
Amortization of actuarial loss (a)		16			13			3		6
Other amortization, net (a)		2			2			1		1
Net periodic cost	$	21		$	22		$	17	$	22

Instrument / Balance sheet location	September 30, 2011					December 31, 2010
(in millions)	Asset		Liability			Asset		Liability
Derivatives designated as hedging instruments
Commodity cash flow derivatives
Derivative liabilities, current				$	1				$	-
Interest rate derivatives
Prepayments and other current assets	$	-				$	1
Other assets and deferred debits		-					3
Derivative liabilities, current					70					32
Derivative liabilities, long-term					16					7
Total derivatives designated as hedging instruments		-			87		4			39

Derivatives not designated as hedging instruments
Commodity derivatives (a)
Prepayments and other current assets		6					11
Other assets and deferred debits		1					4
Derivative liabilities, current					231					226
Derivative liabilities, long-term					237					268
CVOs (b)
Other current liabilities					74					-
Other liabilities and deferred credits					-					15
Fair value of derivatives not designated as hedging instruments		7			542		15			509
Fair value loss transition adjustment (c)
Derivative liabilities, current					1					1
Derivative liabilities, long-term					2					3
Total derivatives not designated as hedging instruments		7			545		15			513
Total derivatives	$	7		$	632	$	19		$	552

Derivatives Designated as Hedging Instruments
Instrument	Amount of Gain or (Loss) Recognized in OCI, Net of Tax on Derivatives (a)						Amount of Gain or (Loss), Net of Tax Reclassified from Accumulated OCI into Income (a)						Amount of Pre-tax Gain or (Loss) Recognized in Income on Derivatives (b)
(in millions)	2011			2010			2011			2010			2011			2010
Commodity cash flow derivatives (d)	$	(1	)	$	-		$	-		$	-		$	-		$	-
Interest rate derivatives (c) (e)		(68	)		(30	)		(2	)		(1	)		(1	)		-
Total	$	(69	)	$	(30	)	$	(2	)	$	(1	)	$	(1	)	$	-

Derivatives Not Designated as Hedging Instruments
Instrument	Realized Gain or (Loss) (a)							Unrealized Gain or (Loss) (b)
(in millions)		2011			2010				2011			2010
Commodity derivatives		$	(91	)	$	(114	)		$	(157	)	$	(181	)

Instrument	Amount of Gain or (Loss) Recognized in Income on Derivatives
(in millions)	2011			2010
Fair value loss transition adjustment (a)	$	1		$	1
CVOs (a)		(63	)		-
Total	$	(62	)	$	1

(a)	Amounts recorded in the Consolidated Statements of Income are classified in other, net.

Derivatives Designated as Hedging Instruments
Instrument	Amount of Gain or (Loss) Recognized in OCI, Net of Tax on Derivatives (a)						Amount of Gain or (Loss), Net of Tax Reclassified from Accumulated OCI into Income (a)						Amount of Pre-tax Gain or (Loss) Recognized in Income on Derivatives (b)
(in millions)	2011			2010			2011			2010			2011			2010
Interest rate derivatives (c) (d)	$	(40	)	$	(26	)	$	(3	)	$	(3	)	$	(1	)	$	-

(in millions)	PEC		PEF		Corporate and Other				Eliminations			Totals
At and for the three months ended September 30, 2011
Revenues
Unaffiliated	$	1,332	$	1,413		$	2		$	-		$	2,747
Intersegment		-		1			69			(70	)		-
Total revenues		1,332		1,414			71			(70	)		2,747
Ongoing Earnings		202		202			(60	)		-			344
Total Assets		15,543		14,014			20,954			(16,834	)		33,677

For the three months ended September 30, 2010
Revenues
Unaffiliated	$	1,414	$	1,543		$	5		$	-		$	2,962
Intersegment		-		-			66			(66	)		-
Total revenues		1,414		1,543			71			(66	)		2,962
Ongoing Earnings		233		177			(49	)		-			361

For the nine months ended September 30, 2011
Revenues
Unaffiliated	$	3,525	$	3,637		$	8		$	-		$	7,170
Intersegment		-		2			203			(205	)		-
Total revenues		3,525		3,639			211			(205	)		7,170
Ongoing Earnings		453		454			(150	)		-			757

For the nine months ended September 30, 2010
Revenues
Unaffiliated	$	3,794	$	4,064		$	11		$	-		$	7,869
Intersegment		-		1			179			(180	)		-
Total revenues		3,794		4,065			190			(180	)		7,869
Ongoing Earnings		493		409			(146	)		-			756

	For the three months ended September 30
(in millions)		2011			2010
Ongoing Earnings		$	344		$	361
Tax levelization			8			4
CVO mark-to-market, net of tax benefit of $13 (Note 10)			(50	)		-
Impairment, net of tax benefit of $1			-			(2	)
Merger and integration costs, net of tax benefit of $7 (Note 2)			(15	)		-
CR3 indemnification adjustment, net of tax expense of $2 (Note 15B)			4			-
Continuing income attributable to noncontrolling interests, net of tax			2			2
Income from continuing operations before cumulative effect of change in accounting principle			293			365
Discontinued operations, net of tax			-			(2	)
Cumulative effect of change in accounting principle, net of tax			-			2
Net income attributable to noncontrolling interests, net of tax			(2	)		(4	)
Net income attributable to controlling interests		$	291		$	361

	For the nine months ended September 30
(in millions)			2011			2010
Ongoing Earnings		$	757		$	756
Tax levelization			2			3
CVO mark-to-market, net of tax benefit of $13 (Note 10)			(46	)		-
Impairment, net of tax benefit of $3			-			(5	)
Plant retirement adjustment, net of tax expense of $1			-			1
Change in tax treatment of the Medicare Part D subsidy (Note 11)			-			(22	)
Merger and integration costs, net of tax benefit of $11 (Note 2)			(36	)		-
CR3 indemnification charge, net of tax benefit of $16 (Note 15B)			(22	)		-
Continuing income attributable to noncontrolling interests, net of tax			5			4
Income from continuing operations			660			737
Discontinued operations, net of tax			(4	)		(2	)
Net income attributable to noncontrolling interests, net of tax			(5	)		(4	)
Net income attributable to controlling interests		$	651		$	731

PROGRESS ENERGY
(in millions)	MGP and Other Sites			Remediation of Distribution and Substation Transformers			Total
Balance, December 31, 2010	$	20		$	15		$	35
Amount accrued for environmental loss contingencies (a)		1			6			7
Expenditures for environmental loss contingencies (b)		(4	)		(13	)		(17	)
Balance, September 30, 2011 (c)	$	17		$	8		$	25

Balance, December 31, 2009	$	22		$	20		$	42
Amount accrued for environmental loss contingencies (a)		7			11			18
Expenditures for environmental loss contingencies (b)		(8	)		(14	)		(22	)
Balance, September 30, 2010 (c)	$	21		$	17		$	38

(a)	Amounts accrued are for the nine months ended September 30, 2011 and 2010. For the three months ended September 30, 2011 and 2010, our accruals for environmental loss contingencies were not material.
(b)	Expenditures are for the nine months ended September 30, 2011 and 2010. For the three months ended September 30, 2011, our expenditures for environmental loss contingencies were not material. For the three months ended September 30, 2010, our expenditures were not material for the remediation of MGP and other sites and were $5 million for the remediation of distribution and substation transformers.
(c)	Expected to be paid out over one to 15 years.

(a)	Amounts accrued are for the nine months ended September 30, 2011 and 2010. For the three months ended September 30, 2011 and 2010, PEC's accruals for the remediation of MGP and other sites were not material.
(b)	Expenditures are for the nine months ended September 30, 2011 and 2010. For the three months ended September 30, 2011 and 2010, PEC's expenditures for the remediation of MGP and other sites were not material.
(c)	Expected to be paid out over one to five years.

Condensed Consolidating Statement of Income
Three months ended September 30, 2011
(in millions)	Parent			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Other			Progress Energy, Inc.
Operating revenues
Operating revenues	$	-		$	1,415		$	1,332		$	-		$	2,747
Affiliate revenues		-			-			69			(69	)		-
Total operating revenues		-			1,415			1,401			(69	)		2,747
Operating expenses
Fuel used in electric generation		-			456			388			-			844
Purchased power		-			232			117			-			349
Operation and maintenance		2			221			332			(68	)		487
Depreciation, amortization and accretion		-			39			136			-			175
Taxes other than on income		-			106			58			(1	)		163
Other		-			1			38			-			39
Total operating expenses		2			1,055			1,069			(69	)		2,057
Operating (loss) income		(2	)		360			332			-			690
Other income (expense)
Interest income		-			-			1			-			1
Allowance for equity funds used during construction		-			7			15			-			22
Other, net		(63	)		(1	)		(5	)		(1	)		(70	)
Total other (expense) income, net		(63	)		6			11			(1	)		(47	)
Interest charges
Interest charges		80			56			45			(1	)		180
Allowance for borrowed funds used during construction		-			(4	)		(4	)		-			(8	)
Total interest charges, net		80			52			41			(1	)		172
(Loss) income from continuing operations before income tax and equity in earnings of consolidated subsidiaries		(145	)		314			302			-			471
Income tax (benefit) expense		(45	)		116			103			4			178
Equity in earnings of consolidated subsidiaries		391			-			-			(391	)		-
Income from continuing operations		291			198			199			(395	)		293
Discontinued operations, net of tax		-			1			(1	)		-			-
Net income		291			199			198			(395	)		293
Net income attributable to noncontrolling interests, net of tax		-			(1	)		-			(1	)		(2	)
Net income attributable to controlling interests	$	291		$	198		$	198		$	(396	)	$	291

Condensed Consolidating Statement of Income
Three months ended September 30, 2010
(in millions)	Parent			Subsidiary Guarantor			Non- Guarantor Subsidiaries			Other			Progress Energy, Inc.
Operating revenues
Operating revenues	$	-		$	1,548		$	1,414		$	-		$	2,962
Affiliate revenues		-			-			66			(66	)		-
Total operating revenues		-			1,548			1,480			(66	)		2,962
Operating expenses
Fuel used in electric generation		-			471			464			-			935
Purchased power		-			309			109			-			418
Operation and maintenance		2			234			301			(63	)		474
Depreciation, amortization and accretion		-			77			124			-			201
Taxes other than on income		-			102			60			(1	)		161
Other		-			10			10			-			20
Total operating expenses		2			1,203			1,068			(64	)		2,209
Operating (loss) income		(2	)		345			412			(2	)		753
Other income (expense)
Interest income		2			1			2			(2	)		3
Allowance for equity funds used during construction		-			5			17			-			22
Other, net		-			(3	)		(3	)		1			(5	)
Total other income, net		2			3			16			(1	)		20
Interest charges
Interest charges		71			74			53			(1	)		197
Allowance for borrowed funds used during construction		-			(3	)		(5	)		-			(8	)
Total interest charges, net		71			71			48			(1	)		189
(Loss) income from continuing operations before income tax and equity in earnings of consolidated subsidiaries		(71	)		277			380			(2	)		584
Income tax (benefit) expense		(25	)		99			147			(2	)		219
Equity in earnings of consolidated subsidiaries		406			-			-			(406	)		-
Income from continuing operations before cumulative effect of change in accounting principle		360			178			233			(406	)		365
Discontinued operations, net of tax		1			(1	)		(2	)		-			(2	)
Cumulative effect of change in accounting principle, net of tax		-			-			2			-			2
Net income		361			177			233			(406	)		365
Net income attributable to noncontrolling interests, net of tax		-			(1	)		(2	)		(1	)		(4	)
Net income attributable to controlling interests	$	361		$	176		$	231		$	(407	)	$	361