***SELECTED
      EXECUTIVES***


***SUPPLEMENTAL
      DEFERRED COMPENSATION PROGRAM AGREEMENT***








THIS
      AGREEMENT is made this the _____ day of August, 1996, between CAROLINA POWER
      & LIGHT COMPANY, a North Carolina corporation (hereinafter the “Company”),
      and CLAYTON S. HINNANT a key management employee of the Company (hereinafter
      called the “Participant”).





WHEREAS,
      the Board of Directors of the Company has approved an additional deferred
      compensation program for the purpose of attracting and retaining outstanding
      key
      management personnel as employees of the Company; and





WHEREAS,
      the Participant shall be eligible to receive additional deferred compensation
      if
      all conditions described in this Agreement are met.





NOW
      THEREFORE, in consideration of the mutual agreements herein contained, the
      Company and the Participant agree as follows:





1.  Amount
      of Award .
      If the
      Participant terminates employment with the Company before attaining age sixty,
      the Participant will not be entitled to receive any deferred compensation under
      this Agreement. If the Participant remains employed with the Company until
      or
      beyond age sixty, the Participant will be entitled to receive a deferred
      compensation award that shall become payable in accordance with the table set
      forth in Exhibit A to this Agreement, based on the age of the Participant while
      the Participant remains employed with the Company. The amount of any deferred
      compensation award as determined in accordance with this Section 1 is hereafter
      referred to as the “Deferral Award”. Notwithstanding the above, if the
      Participant terminates employment voluntarily or involuntarily before age sixty,
      upon management’s recommendation the Personnel, Executive Development &
Compensation Committee of the Board of Directors (hereinafter the “Committee”),
      in their sole discretion, may grant the Participant a deferred compensation
      award in some smaller amount as they deem appropriate considering the
      Participant’s performance of duties for the Company and other factors regarding
      the best interest of the Company.





2.  Payment .
      Any
      Deferral Award that the Participant is entitled to receive will be paid after
      the Participant leaves the employment of the Company for any reason. If the
      Deferral Award is paid before the Participant has met the requirements for
      normal or early retirement under the Company’s Supplemental Retirement Plan
      (hereinafter “Retirement”), the Deferral Award shall be paid in a single lump
      sum within thirty days after the Participant leaves the employment of the
      Company. If the Deferral Award is paid after the Participant’s Retirement, the
      Deferral Award shall be paid in sixty equal monthly installments as specified
      in
      Exhibit A, or if a timely election is made, the Participant shall be paid in
      a
      single lump sum. The Participant must exercise the option to receive payment
      of
      the Deferral Award after retirement in a single lump sum by completing and
      signing the form attached to this Agreement as Exhibit B, and submitting it
      to
      the Company’s senior vice president responsible for Human Resources before the
      Participant’s fifty-eighth birthday. Once elected, the option to receive payment
      of the Deferral Award after retirement in a single lump sum can be revoked
      by
      written notice to the Company’s senior vice president responsible for Human
      Resources at any time before the Participant’s fifty-eighth birthday. The option
      to receive payment of the Deferral Award in a single lump sum payment after
      retirement cannot be elected or revoked after the Participant’s fifty-eighth
      birthday.








3.  Taxes .
      All
      FICA taxes shall be paid by the Company in accordance with applicable laws,
      rules and regulations. If any Deferral Award is paid to the Participant, the
      Company shall withhold any other federal and state income and payroll taxes
      as
      required by law.





4.  Death
      of Participant .  In
      the
      event that the Participant dies after the Participant’s sixtieth birthday, but
      before the Deferral Award is fully paid, any unpaid amounts in the Participant’s
      account will be paid in a lump sum to any beneficiary or beneficiaries that
      are
      designated by the Participant (the “Designated Beneficiary”). The form attached
      to this Agreement as Exhibit C shall be completed, signed, and sent to Company’s
      senior vice president responsible for Human Resources within thirty days from
      the date of this Agreement. The Participant may change the Designated
      Beneficiary at any time by submitting a new beneficiary designation form. If
      at
      any time the Participant has not designated a beneficiary, or if the beneficiary
      predeceases the Participant, payment of any vest Deferral Award will be made
      to
      the Participant’s estate.





5.  Deferral
      Award Accounting .  A
      ledger
      account shall be established by the Company to track the balance of the
      Participant’s Deferral Award. The account will be charged with any payments made
      to the Participant or the Participant’s Designated Beneficiary. The actual
      Deferral Award payable to the Participant, if any, will be determined as of
      the
      date that the Deferral Award becomes payable. Any Deferral Award that becomes
      payable shall be paid from the general assets of the Company. No special fund
      or
      trust has been established for paying the Deferral Award. Neither the
      Participant nor the Designated Beneficiary shall have any interest in any
      specific assets of the Company, but shall only be entitled to receive the
      benefits described in this Agreement.





6.  Non-Alienation
      of Benefits .
      The
      Participant’s right to receive the benefits described in this Agreement shall
      not be subject to anticipation, alienation, sale, assignment, pledge,
      encumbrance, or charge, and any attempt to anticipate, alienate, sell, assign,
      pledge, encumber, or charge any right or benefits hereunder shall be
      void.





7.  Reservation
      of Rights .
      Nothing
      in this Agreement shall in any way limit the right of the Company to terminate
      the Participant’s employment at any time, with or without cause, or at
      will.





8.  Non-Competition .
      During
      the period of five years following the termination of the employment of the
      Participant if the Participant is entitled to a Deferral Award, the Participant
      will not, without the Committee’s prior written consent, directly or indirectly
      engage as an employee, consultant, or in any other capacity in any business
      activities: (a) which compete with the Company or any of it’s subsidiaries
      business; (b) which relate to the production or delivery of electricity in
      the
      Company’s service area or any immediate surrounding area; or (c)  for
      any wholesale customer or any general service retail customer for whom the
      Company has produced or delivered electricity or to whom it may present a
      proposal or otherwise negotiate to provide such services. Participant shall
      submit any request for such consent to the Company’s senior vice president
      responsible for Human Resources.








9.  Applicable
      Law .
      This
      Agreement shall be interpreted and construed in accordance with the laws of
      the
      State of North Carolina, without regard to any conflicts of laws provisions
      that
      might require the application of the laws of any other state or
      jurisdiction.





10. Entire
      Agreement .
      This
      Agreement contains the entire agreement and understanding by and between the
      Company and the Participant with respect to the subject matter hereof, and
      no
      representations, promises, agreements, or understandings with regard to the
      payment of Deferral Award, whether written or oral, not contained herein shall
      be of any force or effect.





IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the day and
      year
      first above written.





CAROLINA
      POWER & LIGHT COMPANY PARTICIPANT











By:
      _______________________________    ________________________________





Title:______________________________








**EXHIBIT
      B**





**SELECTED
      EXECUTIVES SUPPLEMENTAL DEFERRED COMPENSATION**


**PROGRAM
      AGREEMENT**





**EXERCISE
      OF OPTION**


**FOR**


**LUMP
      SUM PAYMENT**











As
      provided in my ***Selected
      Executives Supplemental Deferred Compensation Program
      Agreement*** with
      Carolina Power & Light Company dated August ____, 1996, in the event that a
      Deferral Award is paid to me after my retirement from Carolina Power & Light
      Company, I hereby exercise my option to receive payment of the Deferral Award
      in
      a single lump sum.








**DATE** :
      ___________________








**SIGNATURE
      OF PARTICIPANT** :____________________________________


























**EXHIBIT
      A**





**SELECTED
      EXECUTIVES SUPPLEMENTAL DEFERRED COMPENSATION**


**PROGRAM
      AGREEMENT**





**DEFERRAL
      AWARD TABLE**











Target
      Benefit:  $750,000





If
      the
      Participant continues his employment with the Company until or beyond age sixty,
      the Participant’s Deferral Award pursuant to the Agreement shall be as
      follows:





**Ages**
            **Deferral
                Award**
            **Annual
                Amounts**
              **(payable
                for 5 years)**51-59
            $060
            421,000
            97,00061
            473,000
            109,00062
            531,000
            122,00063
            595,000
            137,00064
            668,000
            154,00065
            750,000
            173,000








The
      amount of the Deferral Award shall be equal to the amount specified above on
      the
      Participant’s birthday for the ages specified above. The Deferral Award amount
      shall not be prorated between birthdays. The amount of the Deferral Award shall
      not increase after the Participant’s sixty-fifth birthday.





**EXHIBIT
      C**





**DESIGNATION
      OF BENEFICIARY**


**SELECTED
      EXECUTIVES SUPPLEMENTAL DEFERRED COMPENSATION**


**PROGRAM
      AGREEMENT**


**WITH**


**CAROLINA
      POWER & LIGHT COMPANY**





As
      provided in my ***Selected
      Executives Supplemental Deferred Compensation Program Agreement*** with
      Carolina Power & Light Company dated August ____, 1996, I hereby designate
      the following person(s) as my “Designated Beneficiary”, with respect to any
      Deferral Award that becomes payable.





**PRIMARY
      BENEFICIARY** :





_________________________________





_________________________________





_________________________________








**CONTINGENT
      BENEFICIARY** :





_________________________________





_________________________________





_________________________________








Any
      and
      all prior designations of one or more beneficiaries under my ***Selected
      Executives Supplemental Deferred Compensation Program Agreement*** with
      Carolina Power & Light Company are hereby revoked and superseded by this
      designation, I understand that the Designated Beneficiary named above may be
      changed or revoked by me at any time by filing a new designation in writing
      with
      the Company’s senior vice president responsible for Human
      Resources.








**DATE** :
      ________________________





**SIGNATURE
      OF PARTICIPANT** :
      __________________________________





The
      Participant named above executed this document in my presence.








**WITNESS** :
      ______________________________  **WITNESS** :
      ______________________________