Exhibit 10(ii)


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



1.0  RECITALS

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

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

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

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

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

2.0  PURPOSE

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

3.0  DEFINITIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

3.10 "Common Stock Value" shall mean:

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

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

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

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

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

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

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

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

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

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

4.0  ADMINISTRATION

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

4.2  Authority of the Committee.  The Committee shall have all the discretionary
     authority  that may be necessary  or helpful to enable it to discharge  its
     responsibilities with respect to the Plan, including but not limited to the
     following:

     (a)  to determine eligibility for participation in the Plan;

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

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

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

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

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

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

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

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

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

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

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

5.0  STOCK UNIT GRANTS

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

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

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

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

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

6.0  BENEFIT

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

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

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

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

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

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

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

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

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

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

7.0  TAXES

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

7.2  No Guarantee of Tax Consequences.  No person connected with the Plan in any
     capacity, including, but not limited to, the Company and any Subsidiary and
     their directors,  officers,  agents and employees makes any representation,

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     Commitment, or guarantee that any tax treatment, including, but not limited
     to, federal, state and local income, estate and gift tax treatment, will be
     applicable  with respect to amounts  deferred under the Plan, or paid to or
     for the benefit of a Participant under the Plan, or that such tax treatment
     will apply to or be available to a Participant on account of  participation
     in the Plan.

8.0  TERM OF PLAN; AMENDMENT AND TERMINATION

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

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

9.0  MISCELLANEOUS

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

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

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

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

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

9.6  Severability.  If any term or  condition  of the Plan  shall be  invalid or
     unenforceable  to any extent or in any  application,  then the remainder of
     the Plan,  with the exception of such invalid or  unenforceable  provision,
     shall not be affected  thereby and shall continue in effect and application
     to its fullest extent.  If, however,  the Committee  determines in its sole
     discretion  that any term or  condition  of the Plan  which is  invalid  or
     unenforceable  is material to the  interests of the Company,  the Committee
     may declare the Plan null and void in its entirety.

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

9.8  Transferability  of Rights. No Participant or spouse of a Participant shall
     have any right to encumber,  transfer or  otherwise  dispose of or alienate
     any present or future right or  expectancy  which the  Participant  or such
     spouse  may have at any time to receive  payments  of  benefits  hereunder,
     which  benefits  and  the  right  thereto  are  expressly  declared  to  be
     nonassignable  and  nontransferable,  except to the extent required by law.
     Any  attempt  to  transfer  or  assign a  benefit,  or any  rights  granted
     hereunder,  by a Participant  or the spouse of a Participant  shall be null
     and void and without effect.

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

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


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                                   SCHEDULE A



Participants Who Are Eligible To Receive Initial Stock Unit Grants


1. Edwin B. Borden

2. Richard L. Daugherty

3. Robert L. Jones

4. Felton J. Capel

5. Charles W. Coker

6. Estell C. Lee

7. Leslie M. Baker, Jr.

8. William O. McCoy

9. J. Tylee Wilson



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