**PROGRESS      ENERGY, INC.**

**NON-EMPLOYEE      DIRECTOR STOCK UNIT PLAN **

**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. |
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**Whereas,      **

**Whereas,      **

| 1.4 | **Whereas,**the                Company amended                and restated the Plan effective January                1, 2005 to increase the Annual Stock Unit Grant and to comply with                the                requirements of Section 409A of the Internal Revenue Code of 1986,                as                amended (the "Code"), regarding the payment of benefits from the                Plan. |
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| 1.5 | **Whereas**,                the Company amended and restated the Plan effective January 1, 2006,                for                the purposes of (i) changing the date of the allocation of the annual                stock unit grant                to                participants'                accounts from the date of the Company’s annual meeting of shareholders to                the first business day in January of each year; and (ii) to eliminate                the                requirement that to be eligible to receive an annual stock unit grant                a                participant must have served on the Board for one                year. |
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| 1.6 | **Whereas**,                the Company desires to amend and restate the Plan effective January                1,                2007 for the purpose of making certain clarifying and conforming                changes                to the Plan. |
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| 1.7 | **Now,                therefore**,                effective January 1, 2007, the Company adopts this amended and restated                Progress Energy, Inc. Non-Employee Director Stock Unit                Plan. |
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| 2.0 | **    PURPOSE** |
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| 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. |
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| 3.0 | **    DEFINITIONS** |
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*"Annual      Stock Unit Grant" *

*"Board*
*"*

*"Change      in Control*
*"      *

|   | (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 |
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|   | (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 |
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|   | (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 |
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|   | (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 |
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|   | (6) | the                date of any event which the Board of Directors determines should                constitute a                Change in Control. |
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*"Committee"*

*"Common      Stock"*

*"Company"*

| 3.7 | *"Continuing                Directors"*                shall mean the members of the Board as of January 1, 2007; *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. |
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| 3.8 | *"Distribution                Date"* shall                mean the later of (i) the date a Participant is no longer a member                of the                Board and otherwise “separates from service” with the Company, as defined                for purposes of Section 409A of the Code, or (ii) the date such                Participant attains age 65. |
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*"Effective      Date"*

*"Common      Stock Value"*

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

| 3.13  | *"Stock                Unit"* shall                mean a unit maintained by the Company for bookkeeping purposes, equal                in                value to one (1) share of Common                Stock. |
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| 3.14 | *"Stock                Unit**Account”* shall                mean a bookkeeping account established and maintained (or caused                to be                established and maintained) by the Company for the Participant which                shall                record the number of Stock Units granted to the Participant under                Section                5 below. This account shall be established (or caused to be established)                by the Company for bookkeeping purposes only, and no separate funds                shall                be segregated by the Company for the benefit of the                Participant. |
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*"Plan"*

| 3.16 | *"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. |
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**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. |
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| 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: |
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|   | (g) | to                take any and all other actions it deems necessary or advisable for                the                proper operation or administration of the                Plan. |
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**Action      by 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. |
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**Determinations      and **
**Interpretations      by the Committee. **

**Information.      **

**Self-Interest.      **

**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 were 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. |
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| 5.2 | **Annual                Grant**.                Effective January 1, 2006, the Company shall grant to each Participant                an                Annual Stock Unit Grant equal to 1,200 Stock Units. The Annual Stock                Unit                Grant shall                be made                the first business day of January. 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. |
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| 5.3 | **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. |
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**BENEFIT**

| 6.1 | **Vesting.**A                Director shall be fully vested at all times in the Stock Units credited                to                his or her Account. |
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| 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. |
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| 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 elected by the                Participant: |
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|   | (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 |
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| 6.5 | **Change                of Form of Benefit.**The                Participant may change the form of payment of all Stock Units credited                to                the                Stock Unit                Account                of the                Participant and vested prior to January 1, 2005, so long as the change                is                made at least six (6) months prior to the Distribution Date. With                respect                to Stock Units credited to the Stock Unit Account of the Participant                or                vesting on or after January 1, 2005, the Participant must make or                have in                effect an election as to the form of payment of Stock Units to be                credited                to the Stock Unit Account of the Participant during the upcoming                year no                later than December 31 of the preceding year, which election shall                be                irrevocable for such upcoming year. The Participant may change his                or her                election for a subsequent year by delivering a new election as to                the form                of payment to the Company on or before December 31 of the preceding                year.                An election as to form of payment will remain in effect for future                years                unless and until changed by the Participant’s timely delivery of a new                election as to the form of payment with respect to an upcoming Plan                Year.                The Participant may not amend or change such an election with respect                to                any prior year. Notwithstanding the foregoing, on or before December                31,                2007 the Participant may make a one-time change to the Participant’s                election as to the form of payment of Stock Units credited to his                or her                Stock Unit Account as to all years prior to and including 2007, as                permitted by the transition relief rules under Code Section 409A                and the                regulations thereunder. |
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| 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. |
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| 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. |
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| 6.8** ** | **Designation                of Beneficiary.**Within                30 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. |
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**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. |
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| 7.2 | **No                Guarantee of Tax Consequences.**No                person connected with the Plan in any capacity, including, but not                limited                to, the Company and any Subsidiary and their directors, officers,                agents                and employees makes any representation, Commitment, or guarantee                that any                tax treatment, including, but not limited to, federal, state and                local                income,                estate                and                gift tax treatment, will be applicable with respect to amounts deferred                under the Plan, or paid to or for the benefit of a Participant under                the                Plan, or that such tax treatment will apply to or be available to                a                Participant on account of participation in the                Plan. |
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**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. |
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| 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                or                adversely affect the vesting of the Stock Unit Account of a Participant,                or cause the acceleration of the time or schedule of any payment                under the                Plan except as provided by regulations under Section 409A of the                Code. |
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**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.  |
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| 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. |
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**No      Right Title or Interest in Company Assets. **

| 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. |
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| 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. |
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| 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. |
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| 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. |
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| 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. |
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| 9.10 | **Change                in Control.**In                the case of a Change in 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 in                Control occurs.                The foregoing notwithstanding, the Company shall establish no such                grantor                trust if its assets shall become includable in the income of Participants                thereby solely as a result of Section 409A of the Code. 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 in Control. |
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**Section      409A.**

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| 1.   | Edwin                B. Borden |
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| 2.   | Richard                L. Daugherty |
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| 3.   | Robert                L. Jones |
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| 4.   | Felton                J. Capel |
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| 5.   | Charles                W. Coker |
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| 6.   | Estell                C. Lee |
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| 7.   | Leslie                M. Baker, Jr. |
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| 8.   | William                O. McCoy |
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| 9.   | J.                Tylee Wilson |
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