Attachment 2

                               EXHIBIT NO. 10b(19)
                                    AGREEMENT
                                  confidential

THIS AGREEMENT,  is made and entered into this the 18th day of September,  1996,
by and between  Carolina  Power & Light Company  ["CP&L"] and Sherwood H. Smith,
Jr. ["Smith"].

                                    RECITALS

Sherwood H.  Smith,  Jr.,  presently  serves as the Chief  Executive  Officer of
Carolina Power & Light Company, a position he has held since September, 1979. He
also has served as Chairman of the Board and Chairman of the Executive Committee
since May of 1980. Smith will cease serving as Chief Executive Officer effective
October 1, 1996,  but will remain  active as Chairman of the Board of  Directors
and Chairman of the Executive Committee. As of December 31, 1996, Smith plans to
retire  from CP&L,  and he will then no longer be an  employee of CP&L or any of
its  subsidiary  companies,  but he will then  render  various  services  to the
Company pursuant to this Agreement.

Smith has been an active  employee of CP&L since 1965,  during which time he has
acquired special  competence in, and intimate knowledge of, the business of CP&L
and of the  electric  utility  industry  and  related  businesses,  as  well  as
government  bodies  and their  impact  upon  CP&L.  He has held  many  executive
positions  within the CP&L  organization,  including 17 years'  service as Chief
Executive  Officer.  He is one of  the  most  experienced  and  respected  Chief
Executive   Officers  in  the  utility  industry,   and  has  received  national
recognition on many occasions for his management and professional skills.

Because of his knowledge of the CP&L organization,  his skills in business,  his
record  of  leadership  and  knowledge  of the  industry,  and  the  significant
contributions  which  he has made  and can  continue  to make to CP&L and to its
Board of  Directors,  the  Board  has  requested  that he  continue  to serve as
Chairman of the Board of  Directors  of CP&L and as  Chairman  of the  Executive
Committee, in addition to providing certain services pursuant to this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and covenants herein set
forth,  CP&L,  through the action of its Board of Directors,  and Smith mutually
agree as follows:

1. TERM OF AGREEMENT.  Subject to the provisions  for  termination as herein set
forth,  the term of this Agreement  shall be for a period  beginning  October 1,
1996, and ending  September 30, 1999, when Smith will reach the age of 65. It is
anticipated  that Smith will not serve as Chairman after the May, 1999,  meeting
but will continue to provide other services  through  September 30, 1999, as set
out in this Agreement.

2. DUTIES AND  RESPONSIBILITIES.  Smith shall perform the duties of the Chairman
of the Board of Directors and Chairman of the Executive Committee,  as set forth
in the CP&L  By-Laws and as directed by the Board.  In addition to such  service
for the Board of Directors,  it is  acknowledged  that Smith has unique  skills,
knowledge,  and  contacts  in  areas  and  activities  in  which  CP&L  and  its
subsidiaries  operate,  which qualify him to represent CP&L and its subsidiaries
in industry, governmental, public relations and civic matters and to assist CP&L
and its subsidiaries in furthering CP&L's business purposes.  To that end, Smith
as  Chairman  will also be  available  to perform  the  following  services,  as
requested,  subject  to the  request  and  general  direction  of  CP&L's  Chief
Executive  Officer:  [1] he will assist management in maintaining  relations and
communications with the investing public, shareholders,  and financial analysts;
[2] he will assist in representing CP&L in general industry,  trade association,
charitable,  educational, and public interest organizations and projects; [3] he
will assist in studying,  evaluating,  and advising  management and the Board on
general  economic and regulatory  conditions and the  implications  of such as a
basis  for  determining  the  strategic,  operational  and  financial  plans and
policies of CP&L; [4] he will assist  management in establishing and maintaining
favorable  relationships  and  communications  with  federal,  state  and  local
agencies involved in the regulation of CP&L and its subsidiary companies; [5] he
will keep abreast of legislative matters which affect the Company's  operations,
and represent CP&L if called upon to present CP&L's views on legislative  issues
to federal,  state,  and local  governments;  [6] he will assist  management  in
representing  CP&L's  views  and  interests  to  trade  associations  and  other
industry-related  organizations;  [7] he will be  available to  participate  and
assist in the contact,  maintenance, and development of existing and prospective
customer  relationships  for CP&L and its subsidiary  companies;  [8] he will be
available for speaking engagements and other  presentations;  [9] he will advise
with respect to contributions,  investments,  and pension plan matters; and [10]
any other reasonable specific service as may be requested by the Chief Executive
Officer and/or the Board of Directors of CP&L.

3.  INDEPENDENT  CONTRACTOR.  Smith  shall  not be  involved  in the  day-to-day
management or operations of CP&L,  and his services  shall be as directed by the
Chief Executive Officer.  Smith shall carry out his duties and  responsibilities
as an  independent  contractor,  and not as an  employee  of CP&L.  Smith  shall
endeavor  to make  himself  available  at such  times as CP&L  shall  reasonably
request for meetings,  public appearances,  governmental  hearings,  and similar
events. Consistent with the foregoing,  Smith shall devote such time to carrying
out his duties and responsibilities herein as he and the Chief Executive Officer
shall deem  necessary,  and he shall render the services  herein at such time or
times as he and the Chief Executive Officer shall determine.  Smith shall not be
required to work full time or to work any set schedule or number of hours during
any  specific  period,  nor shall he be  required  to  submit  time  reports  or
schedules to CP&L, except as otherwise provided for reimbursement of expenses.

4. COMPENSATION.  Smith's  compensation for the year 1996 shall be as set by the
Board to include  approved base salary and incentive plan payments to be made in
1997.  For the services  rendered by Smith as Chairman of the Board of Directors
and Chairman of the Executive Committee and for other services, pursuant to this
Agreement,  CP&L  shall pay to Smith the sum of  $33,100  per  month,  beginning
January 1, 1997,  through  December  31, 1997,  and $27,583 per month  beginning
January 1, 1998,  through  December  31, 1998;  and $16,550 per month  beginning
January 1, 1999, through September 30, 1999. Such payments are to be made at the
end of each calendar month.

5.  OFFICE  AND  EXPENSES.  CP&L will make  available  for Smith  office  space,
secretarial and other support  services  appropriate to the performance of these
duties and  responsibilities.  These shall be as approved by the Chief Executive
Officer.  CP&L shall pay the bills of or reimburse Smith in accordance with CP&L
policies  for all  reasonable  travel  and  other  expenses  incurred  by  Smith
[including,  when  appropriate,  travel  expenses  for his  wife] in  performing
services  under  this  Agreement  upon  presentation  by  him  of  the  required
accounting  and  documentation  in such  form as is  satisfactory  to the  Chief
Financial Officer of CP&L. Smith may use corporate air travel in the performance
of these duties,  with approval of the Chief Executive  Officer,  and he will be
provided a company  automobile  allowance in  accordance  with CP&L policy.  The
company will continue to maintain for him a home alarm and security  service,  a
company network  telephone and facsimile  equipment at his residence,  and a car
telephone.  [It is  anticipated  that a reduced level of office and  secretarial
support will also be supplied to Smith after September 30, 1999, in his capacity
as retired Chairman and Chief Executive  Officer.  Such  arrangements will be by
mutual agreement as approved by the Chief Executive Officer.]

6. BENEFITS.  After January 1, 1997,  Smith shall not be entitled to participate
in any  retirement  plans  or  other  benefit  plans  provided  by CP&L  for its
employees as a consequence of his service as Chairman of the Board of Directors,
except to the extent that such participation results from Smith's prior services
as an employee or officer of the Company.

7. INCOME TAX WITHHOLDING. CP&L shall not withhold federal or state income taxes
or  employment  taxes from payments made to Smith  hereunder,  unless  otherwise
required so to do by law.

8. FINANCIAL PLANNING SERVICES. CP&L shall provide Smith with financial planning
services,  and  shall  reimburse  Smith  for the  costs of  financial  and legal
advisors,  to the same  extent as if Smith were a senior  executive  entitled to
participate in CP&L's executive  financial  planning program.  Such services and
reimbursement  shall be available to Smith for one year following the end of the
term of the Agreement and to his spouse for one year following his death.

9.  NON-COMPETITION.  During  the term of this  Agreement  and for  three  years
thereafter,  Smith shall not engage in any business in  competition  with, or in
anyway in conflict with, the business of CP&L as an officer, employee,  advisor,
consultant,  partner, principal shareholder, or otherwise in which he shall have
an active role in consulting or advising with respect to such other  business or
activity. Smith shall be deemed to be a principal shareholder of any corporation
if he owns or controls,  directly or  indirectly,  twenty-five  percent [25%] or
more of the voting stock of the corporation.  Further, Smith shall not engage in
any activity  involving any other electric  utility  without the advance written
approval of the CP&L Chief Executive Officer.

10.  TERMINATION.  This  Agreement  shall  terminate at the close of business on
September  30, 1999.  Additionally,  this  Agreement  shall  terminate  upon the
occurrence of the following events:

         [a] Death or Incapacity.  This Agreement shall terminate upon the death
         of Smith. In the event of Smith's  incapacity for a period in excess of
         three  months,  the  Board  of  Directors  of CP&L may  terminate  this
         Agreement.  In the event of the death of Smith,  CP&L  shall pay to any
         party that has been  designated  by Smith in writing to CP&L,  or if no
         such party has been designated, to his executor(s) or administrator(s),
         or in the event of such incapacity, to Smith or his designee, guardian,
         or representative, an amount equal to his unpaid compensation hereunder
         as of the end of the  month in which he dies or has been  incapacitated
         for the previous  consecutive  three months,  and thereafter CP&L shall
         have no further  liability to Smith or his executors or  administrators
         for  compensation  for  additional  services  arising  pursuant to this
         Agreement.

         [b] Failure to Perform.  In the event of Smith's  failure to observe or
         perform the  provisions  of this  Agreement  required to be observed or
         performed by him following written notice of such nonperformance, or if
         Smith shall accept  full-time  employment with any other  organization,
         then  in  either  event,  CP&L  may  terminate  this  Agreement,   such
         termination  to be effective  thirty [30] days after CP&L gives written
         notice of such termination to Smith.

It is  understood  and agreed by Smith and CP&L that  nothing  contained in this
Agreement shall obligate the Board,  any member of the Board, or CP&L in any way
to vote for,  elect,  or  continue  Smith in office as  Chairman of the Board of
Directors  or Chairman of the  Executive  Committee if at any time a majority of
the Board determines that it is in CP&L's best interests not to so do.

11.  NOTICES.  Any notice required or permitted to be given under this Agreement
shall be sufficient  if in writing and sent by  registered  mail to Smith at 408
Drummond  Drive,  Raleigh,  North  Carolina,  27609, or to such other address as
either party shall designate by written notice to the other.

12.  ASSIGNMENT.  The rights and  obligations of CP&L under this Agreement shall
inure to the benefit of and shall be binding upon the  successors and assigns of
CP&L. The rights and obligations of Smith hereunder are personal, and may not be
assigned or delegated by Smith.

13.  MODIFICATION,  WAIVER AND  ATTACHMENT.  

         [a]  Amendment  of  Agreement.  This  Agreement  may not be modified or
         amended  except by an  instrument  in  writing  signed  by the  parties
         hereto.  This  Agreement  may be modified,  amended,  or extended by an
         instrument in writing signed by the parties hereto.

         [b] Waiver.  No term or condition of this Agreement  shall be deemed to
         have  been  waived,  nor  shall  there  be  any  estoppel  against  the
         enforcement  of any  provision  of this  Agreement,  except by  written
         instrument of the party charged with such waiver,  and each such waiver
         shall  operate  only as to the specific  term or  condition  waived and
         shall not  constitute a waiver of such term or condition for the future
         or as to any act other than that specifically waived.

         [c] No  Attachment.  Except as  required  by law,  no right to  receive
         payments  under this Agreement  shall be subject to  alienation,  sale,
         assignment,   encumbrance,  charge,  pledge,  or  hypothecation  or  to
         execution,  attachment,  levy  or  similar  process  or  assignment  by
         operation of law, and any attempt, voluntary or involuntary,  to effect
         any such action shall be null, void, and of no effect.

14.  SEVERABILITY.  If, for any reason,  any provision of this Agreement is held
invalid,  such invalidity shall not affect any other provision of this Agreement
not held so  invalid,  and each such other  provision  shall to the full  extent
consistent with law continue in full force and effect.  If any provision of this
Agreement shall be held invalid in part, such invalidity  shall in no way affect
the rest of such provision not held so invalid,  and the rest of such provision,
together with all other  provisions of this Agreement,  shall to the full extent
consistent with law continue in full force and effect.

15. EFFECT ON OTHER AGREEMENTS.  Nothing contained in this Agreement is intended
to alter in any way or to  affect  the  provisions  of any  other  agreement  or
contract  which  previously  may have been entered into by and between Smith and
CP&L.

16.  GOVERNING  LAW.  This  Agreement  has been  executed and delivered in North
Carolina, and its interpretation,  performance and enforcement shall be governed
by such laws.

IN WITNESS  WHEREOF,  CP&L,  through  its Board of  Directors,  has caused  this
Agreement  to be executed  and its seal to be affixed  hereunto by its  officers
duly authorized,  and Smith has signed and sealed this Agreement, all on the day
and year first above written.

                                                     By:   /S/ Charles W. Coker
                                                        ------------------------
                                                          Charles W. Coker

                                                           /S/ William Cavanaugh
                                                        ------------------------
                                                          William Cavanaugh


                                                  CAROLINA POWER & LIGHT COMPANY


 /S/ Sherwood H. Smith, Jr.
---------------------------
Sherwood H. Smith, Jr.