AMENDED MANAGEMENT INCENTIVE COMPENSATION PLAN OF PROGRESS ENERGY, INC

EXHIBIT 10.3

AMENDED MANAGEMENT INCENTIVE COMPENSATION PLAN

The purpose of the Management Incentive Compensation Plan (the “Plan”) of Progress Energy, Inc. is to promote the financial interests of the Company, including its growth, by (i) attracting and retaining executive officers and other management-level employees who can have a significant positive impact on the success of the Company; (ii) motivating such personnel to help the Company achieve annual incentive, performance and safety goals; (iii) motivating such personnel to improve their own as well as their business unit/work group’s performance through the effective implementation of human resource strategic initiatives; and (iv) providing annual cash incentive compensation opportunities that are competitive with those of other major corporations.  The Sponsor amends and restates the Plan effective January 1, 2010.  The terms of the amended and restated Plan shall govern the payment of any benefits commencing after January 1, 2010.

The following definitions are applicable to the Plan:

1.   “ Achievement Factor ”:  The sum of the Weighted Achievement Percentages determined for each of the Performance Measures for the Year.

2.   “ Award ”:  The benefit payable to a Participant hereunder based upon achievement of the Performance Measures and as may be adjusted in accordance with Section 6 of Article V below.

3.   “ Affiliated Entity ”:  Any corporation or other entity that is required to be aggregated with the Sponsor pursuant to Sections 414(b), (c), (m), or (o) of the Internal Revenue Code of 1986, as amended (the “Code”), but only to the extent required.

4.   “ Board ”:  The Board of Directors of the Sponsor.

5.   “ Cause ”:  Any of the following:

6.   “ Change in Control ”: The earliest of the following dates:

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 Compensation Committee that one of the events set forth in this Section 6 has occurred.  Any determination that an event described in this Section 6 has occurred shall, if made in good faith on the basis of information available at that time, be conclusive and binding on the Compensation Committee, the Sponsor, each Affiliated Entity, the Participant and their Beneficiaries for all purposes of the Plan.

7.   “ Company ”:  The Sponsor and each Affiliated Entity.

8.   “ Compensation Committee ”:  The Organization and Compensation Committee of the Board of Directors of the Sponsor.

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

10.   “ Date of Retirement ”:  The first day of the calendar month immediately following the Participant’s Retirement.

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

12.   “ Earnings ”:  The net income of the Participating Employer as determined from time to time by the Compensation Committee.

13.   “ ECIP Goals ”:  The goals set forth to receive a payment under the Employee Cash Incentive Plan of each department or business unit of the Company.

14.   “ Effective Date ”:  The Effective Date of this Plan, as amended, is January 1, 2009.

15.   “ EPS” :  The on-going earnings per share of the Sponsor’s Common Stock for a Year as determined by the Compensation Committee from time to time.

16.   “ Legal Entity Earnings ”:  The Earnings of the Participating Employer which employs the Participant.

17.   “ Participant ”:  An employee of a Participating Employer who is selected pursuant to Article IV hereof to be eligible to receive an Award under the Plan.

18.   “ Participating Employer ”:  Each Affiliated Entity that, with the consent of the Compensation Committee, adopts the Plan and is included in Exhibit C , as in effect from time to time.

19.   “ Performance Measures ”:  The EPS, Legal Entity Earnings and ECIP Goals.

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

21.   “ Performance Unit Subaccount ”:  A notational bookkeeping account maintained under the Plan at the direction of the Compensation Committee representing a deemed investment in Performance Units, including the Incentive Performance Units described in Section 4 of Article VI, and associated earnings and adjustments.  The number of Performance Units awarded to a Participant shall be recorded in each Participant’s Performance Unit Subaccount as of the first day of the month coincident with or next following the month in which a deferral becomes effective with respect to Awards deferred for Years beginning prior to January 1, 2009, and thereafter with respect to deferred Awards allocated to the Performance Unit Subaccount by the Participant.  The number of Performance Units recorded in a Participant’s Plan Deferral Account shall be adjusted to reflect any splits or other adjustments in the Sponsor’s Common Stock, the payment of any cash dividends paid on the Sponsor’s Common Stock and the payment of Awards under this Plan to the Participant.  To the extent that any cash dividends have been paid on the Sponsor’s Common Stock, the number of Performance Units shall be adjusted to reflect the number of Performance Units that would have been acquired if the same dividend had been paid on the number of Performance Units recorded in the Participant’s Plan Deferral Account on the dividend record date.  For purposes of determining the number of Performance Units acquired with such dividend, the average of the opening and closing price of the Sponsor’s Common Stock on the payment date of the Sponsor’s Common Stock dividend shall be used.

22.   “ 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, as amended from time to time, or as otherwise selected by the Compensation Committee.

23.   “ Phantom Investment Subaccount ”:  A notational bookkeeping account maintained under the Plan at the direction of the Compensation Committee representing a deemed investment in one or more Phantom Investment Funds as directed by the Participant under Section 6 of Article VI, including the Performance Unit Subaccount of the Participant, if any.

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

25.   “ Retirement ”:  A Participant’s termination of employment from the Company on or after attaining (i) age 65 with 5 years of service, (ii) age 55 with 15 years of service, or (iii) 35 years of service.

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

27.   “ Senior Management Committee ”:  The Senior Management Committee of the Company.

28.   “ 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 and by related guidance.

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

30.   “ Sponsor ”:  Progress Energy, Inc., a North Carolina corporation, or any successor to it in the ownership of substantially all of its assets.

31.   “ Target Award Opportunity ”:  The target for an Award under this Plan as set forth in Section 1 of Article V hereof.

32.   “ Unforeseeable Emergency ”:  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.

33.   “ Valuation Date ”:  The last day of each calendar month and such other dates as selected by the Compensation Committee, in its sole discretion.

34.   “ Weighted Achievement Percentage ”:  The percentage determined by multiplying the relative percentage weight assigned to each of the Performance Measures applicable to the Participant for the Year by the payout percentage corresponding to the level of achievement of the Performance Measure as determined for each department or business unit for the Year.

35.   “ Year ”:  A calendar year.

The Plan shall be administered by the Chief Executive Officer of the Sponsor. Except as otherwise provided herein, the Chief Executive Officer of the Sponsor shall have sole and complete authority to (i) select the Participants; (ii) establish and adjust (either before or during the Year) the performance criteria necessary for a Participant to attain an Award for the Year; (iii) adjust and approve Awards; (iv) establish from time to time regulations for the administration of the Plan; and (v) interpret the Plan and make all determinations deemed necessary or advisable for the administration of the Plan, all subject to its express provisions. Notwithstanding the foregoing, the Compensation Committee shall (a) approve the applicable threshold, target and outstanding levels of performance for a Performance Measure for the Year; (b) approve the performance criteria and Awards for all Participants who are members of the Senior Management Committee; and (c) certify to the Board that a Change in Control has occurred as provided in Section 6 of Article II.

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

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

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

     *Senior Management Committee level positions.

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

2.   Award Components .