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Exhibit 10.8 Form of Collateral Assignment Split Dollar Agreement


                 COLLATERAL ASSIGNMENT SPLIT DOLLAR AGREEMENT

This Agreement entered into as of _______________, by and between __________(the
"Employee") and The Berlin City Bank (the "Bank").

      Whereas, the Bank wishes to provide life insurance coverage on behalf of
the Employee; and

      Whereas, Employee will be the sole owner and possessor of the Policy and
will assign an interest in the Policy's death benefit and cash value to the Bank
as collateral to secure repayment of Bank's premium payments with respect to the
Policy; and

      Whereas, it is the intent of the Bank and Employee to define the limited
extent of the Bank's security interest in the Policy;

      Now therefore, the Bank and Employee hereby agree as follows:

1.    Interests in the Policy

The Policy, which is the subject of this Split Dollar Agreement, is
____________________ (the "Insurer") Policy Number ____________________ on the
life of the Employee. The Bank's interest in the cash surrender value of the
Policy (the "Bank's Interest") shall be equal to the total amount of the premium
payments made on the Policy (including any contributions to any trust in the
event of a Change in Control as defined below) accumulated at interest at a rate
of 3.6% per annum. The Employee's interest in the cash value of the Policy (the
"Employee's Interest") shall be equal to the remaining cash surrender value of
the Policy, if any, in excess of the Bank's Interest.

2.    Premium Payments

During the term of the Agreement, on or before the due date of each premium
payment on the Policy, or within the grace period provided therein, the Bank
will pay the entire annual premium due on the Policy for a period of five (5)
years. The Employee shall have imputed income each year that this Agreement
remains in force in an amount equal to the annual cost of current death benefit
protection on the life of the Employee, measured by the lower of (a) the PS 58
rate, as set forth in Revenue Ruling 55-747 (or the corresponding applicable
provision of any future Revenue Ruling), or (b) the Insurer's current published
premium rate for annually renewable term insurance for standard risks.

In the event of a Change of Control of Northway Financial, Inc. (the
"Company"), the Bank shall pay to a grantor trust established by the Bank for
the benefit of creditors of the Bank and the Employee, within 30 days, an amount
equal to the present value of the remaining unpaid premiums due on the Policy
during the remainder of the first five (5) policy years, based on the then
current assumptions used by the Insurer to establish a pre-paid premium account
with respect to the Policy.

3.    Death Benefit Amounts

Upon the death of the Employee, and subject to the minimum death benefits
available to the Employee as described below, the death benefit payable to the
Bank under this Agreement shall be equal to the Bank's Interest in the Policy as
defined in Section 1 above.

Upon the death of the Employee, the death benefit payable to the Employee's
designated beneficiaries shall be equal to the total death proceeds under the
Policy less the amount payable to the Bank as defined above, except that the
minimum death benefit payable to the Employee's designated beneficiaries shall
be twenty-five thousand dollars ($25,000).

Employee understands that sufficiency of cash value in the Policy to provide
expected amounts of death benefit under this Agreement may vary as a result of
Policy performance and duration of premium payments and this is in no event
guaranteed by the Bank or the Insurer. The Bank makes no representations or
warranty as to the merits or risks of the investment performance of the Policy.

4.    Ownership and Rights in the Policy

The Policy will be owned exclusively by the Employee or the Employee's Assignee
(for the purposes of this Agreement, Employee's Assignee shall be included in
the definition of Employee, unless the context clearly suggests otherwise).
While this Agreement is in effect, the Bank has a security interest in the
Policy limited exclusively to:

      (a) that portion of the cash surrender value of the Policy equal to the
Bank's Interest in the Policy; or

      (b) an amount of the death benefit as defined above in Section 3.

The Employee's rights in the Policy include the right to make any investment
choices permitted by the Policy with respect to the cash values of the Policy,
the ability to irrevocably assign any of the Employee's rights under the Policy,
with the consent of the Bank and the Insurer and to select and change
beneficiaries to receive Employee's death benefits. The Employee will not be
permitted to borrow against, or totally surrender the Policy as long as the
Collateral Assignment remains in force without the express written consent of
the Bank. The Employee shall not be permitted to receive a distribution from the
cash value of the Policy while the Agreement remains in force, except in
accordance with the following rules: the Employee may request and receive a cash
withdrawal only from the Employee's Interest in the cash surrender value of the
Policy in accordance with the provisions of the Policy without the consent of
the Bank, but in no event shall such distribution be permitted prior to the
later of termination of the Employee's service with the Bank, or the fifth
anniversary of this Agreement, and in no event shall such distribution cause the
remaining cash surrender value to be less than the Bank's Interest.

Any other rights in the Policy other than those specifically mentioned in this
Agreement must be exercised with the written consent of both the Employee and
the Bank.

5.    Assignment of Policy to Secure Bank's Payments

To secure the Bank's Interest in the Policy under this Agreement, Employee will
collaterally assign the Policy to the Bank by signing the separate Collateral
Assignment. The Collateral Assignment cannot be altered without the Bank's,
Employee's and Insurer's written consent.

6.    Termination of Split Dollar Agreement

This Agreement, and all obligations of the Bank to pay premiums under it, will
terminate upon the earliest to occur of the following:

      (a) Death of the Employee;
      (b) Written agreement of both the Employee and the Bank to terminate this
          Agreement;
      (c) Termination of Employee's employment for Cause;
      (d) Failure of the Employee to contribute any amounts that the Bank would
          otherwise be required to withhold after retirement; and,
      (e) Failure of the Employee to complete all necessary requirements for the
          Insurer to issue a policy.

Upon termination of this Agreement, the Bank shall receive the Bank's Interest
in the Policy as soon as is practical, but in no event shall receipt be later
than sixty (60) days from the earliest of the dates listed above. In the event
of termination of this Agreement for reason other than the death of the
Employee, the Bank's Interest in the Policy under this Agreement shall be
satisfied either directly from the cash value of the Policy or by direct payment
by the Employee, at the discretion of the Employee. In this event, the recovery
of the Bank's Interest shall be limited to the cash surrender value of the
Policy as that time. In the event of termination of this Agreement by reason of
the death of the Employee, the Bank's Interest in the Policy and under this
Agreement shall be satisfied through direct payment from the Insurer from the
Policy proceeds.

7.    Payment of Proceeds or Cash Surrender Value to Bank

Upon receipt on the Bank's Interest in the Policy, as provided above, whether
from the Policy, or from the Employee, the Bank will release the Collateral
Assignment. Upon satisfaction of the Bank's Interest in the Policy, the Employee
shall have unrestricted ownership to the Policy.

Upon termination of this Agreement by reason of the death of the Employee, the
Insurer in satisfaction of the Employee's obligations, will issue a check
directly to the Bank as collateral assignee in an amount set forth in Section 3
above.

8.    Miscellaneous

(a) Not an Employment Agreement. This Agreement does not in any way constitute
an employment agreement, and the Bank reserves the right to terminate Employee's
employment to the same extent as though this Agreement did not exist. This
Agreement may be amended at any time by written agreement signed on behalf of
the Bank and by the Employee.

(b) Change in Control. For purposes of this Agreement, a Change in Control shall
mean the occurrence of any one of the following events:

      (i) any "Person," as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Act") other than the Company,
any of its Subsidiaries, or any trustee, fiduciary or other person or entity
holding securities under any employee benefit plan or trust of the Company or
any of its Subsidiaries), together with all "affiliates" and "associates" (as
such terms are defined in Rule 12b-2 under the Act) of such person, shall become
the "beneficial owner" ( as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company representing 25% or more of
the combined voting power of the Company's then outstanding securities having
the right to vote in an election of the Company's Board of Directors ("Voting
Securities") (in such case other than as a result of an acquisition of
securities directly from the Company); or

      (ii) persons who, as of the date hereof, constitute the Company's Board of
Directors (the "Incumbent Directors") cease for any reason, including, without
limitation, as a result of a tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority of the Board, provided that any
person becoming a director of the Company subsequent to the date hereof shall be
considered an Incumbent Director if such person's election was approved by or
such person was nominated for election by either (A) a vote of at least a
majority of the Incumbent Directors or (B) a vote of at least a majority of the
Incumbent Directors who are members of a nominating committee comprised, in the
majority, of Incumbent Directors; but provided further, that any such person
whose initial assumption of office is in connection with an actual or threatened
election contest relating to the election of members of the Board of Directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board of Directors including by reason of
agreement intended to avoid or settle any such actual or threatened contest or
solicitation, shall not be considered an Incumbent Director; or

      (iii) the stockholders of the Company shall approve (A) any consolidation
or merger of the Company where the stockholders of the Company, immediately
prior to the consolidation or merger, would not, immediately after the
consolidation or merger, beneficially own (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, shares representing in the aggregate
more than 50% of the voting shares of the corporation issuing cash or securities
in the consolidation or merger (or of its ultimate parent corporation, if any),
(B) any sale, lease, exchange or other transfer (in one transaction or a series
of transactions contemplated or arranged by any party as a single plan) of all
or substantially all of the assets of the Company or (C) any plan or proposal
for the liquidation or dissolution of the Company.

Notwithstanding the foregoing, a "Change of Control" shall not be deemed to have
occurred for purposes of the foregoing clause (i) solely as the result of an
acquisition of securities by the Company which, by reducing the number of shares
of Voting Securities outstanding increases the proportionate number of shares of
Voting Securities beneficially owned by any person to 25 percent or more of the
combined voting power of all then outstanding Voting Securities; provided,
however, that if any person referred to in this sentence shall thereafter become
the beneficial owner of any additional shares of Voting Securities (other than
pursuant to a stock split, stock dividend, or similar transaction or as result
of any acquisition of securities directly from the Company) and immediately
thereafter beneficially owns 25% or more of the combined voting power of all
then outstanding securities.

(c) Termination for Cause. For purpose of this Agreement, whether an Employee
has had his employment terminated for Cause shall be determined in the sole
discretion of the Bank and shall mean a termination of employment by reason of a
finding that the Employee (i) acted dishonestly or engaged in willful misconduct
in the performance of his duties for the Bank; (ii) breached a fiduciary duty to
the Bank for personal profit to himself; or (iii) willfully violated any law,
rule or regulation (other than traffic violations or similar offenses) or any
final cease and desist order.

(d) Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Bank and its successors and assigns, and to the Employee and the
Employee's assigns, heirs, executor or personal representative, and
beneficiaries.

(e) Notices. Any notice, consent or demand required or permitted under this
Agreement shall be made in writing and shall be signed by the party making the
notice, consent, or demand. Such notice shall be sent by United States certified
mail, postage pre-paid and shall be sent to the other party's last known address
as shown on the records of the Bank. The date of such mailing shall be deemed to
be the date of such notice consent or demand.

(f) Governing Law. This Agreement shall be governed by and be construed in
accordance with the laws of the State of New Hampshire.

9.    Claims Procedures

Any person or entity claiming a benefit, requesting an interpretation or ruling
under this Agreement, or requesting information under the Agreement (hereinafter
referred to as "Claimant") shall present the request in writing to the Bank,
which shall respond in writing as soon as practicable. If the claim or request
is denied, the written notice of denial shall state the reason for denial, with
specific reference to the provisions on which the denial is based, a description
of any additional material or information required and an explanation of why it
is necessary, and an explanation of the claims review procedure.

Review of Claim. Any Claimant whose claim or request is denied or who has not
received a response within sixty (60) days may request a review by notice given
in writing to the Bank. Such request must be made within sixty (60) days after
receipt by the Claimant of the written notice of denial, or in the event
Claimant has not received a response sixty (60) days after receipt by the Bank
of Claimant's claim or request. The claim or request shall be reviewed by the
Bank which may, but shall not be required to, grant the Claimant a hearing. On
review, the Claimant may have representation, examine pertinent documents, and
submit issues and comments in writing.

Final Decision. The decision on review shall normally be made within sixty (60)
days after the Bank's receipt of Claimant's claim or request. If an extension of
time is required for a hearing or other special circumstances, the Claimant
shall be notified and the time limit shall be one hundred twenty (120) days. The
decision shall be in writing and shall state the reason and the relevant
provisions. All decisions on review shall be final and bind all parties
concerned.

IN WITNESS WHEREOF, the Bank and the Employee have signed this Agreement, which
is effective as of the effective date of the Policy described herein.

                                          THE BERLIN CITY BANK




                                            By:
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Attest                                          Title


                                                ---------------------------
                                                Date


                                              EMPLOYEE


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Witness


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                                                 Date