On September 30, 2008, Progress Energy, Inc. (the "Company") took action to terminate the Carolina Power & Light Company Split Dollar Life Insurance Plan (the "Plan"), formerly one of the Company's executive benefits programs. The termination is expected to be effective on January 1, 2009. The Plan currently provides for the acquisition of a life insurance policy on the life of each participant, with the participant owning the policy upon termination of the agreement between the Company and the participant.

In connection with the termination, each participant is expected to enter into an amended Agreement concerning his or her life insurance policy. Pursuant to the amended Agreements, the Participants may elect to surrender the life insurance policy maintained under the Program on their behalf in exchange for a cash payment equal to the greater of the policy's accumulated cash value or $5,000.

Participants eligible to receive the cash payments described above include the following executive officers:

                                                      Projected cash payment upon
                                                      surrender of life insurance
   Participant                   Title                 policy as described above
William D. Johnson Chairman, President and Chief                          $150,914
                   Executive Officer
 John R. McArthur  Executive Vice President, General                        $5,000
                   Counsel and Corporate Secretary
 Jeffrey J. Lyash  President and Chief Executive                           $13,608
                   Officer of Progress Energy
                   Florida, Inc.
 Mark F. Mulhern   Senior Vice President and Chief                         $40,006
                   Financial Officer
  Lloyd M. Yates   President and Chief Executive                           $25,165
                   Officer of Progress Energy
                   Carolinas, Inc.