Document:

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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:
---------------------------                     ---------------------------
Attest                                          Title

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

                                              EMPLOYEE

---------------------------                     ---------------------------
Witness

                                                ---------------------------
                                                 DateEMPLOYMENT AGREEMENT

                                     BETWEEN

                         CAROLINA POWER & LIGHT COMPANY,

                            FLORIDA POWER CORPORATION

                                       AND

                           H. WILLIAM HABERMEYER, JR.

                                November 30, 2000

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                              EMPLOYMENT AGREEMENT
                              --------------------

         EMPLOYMENT AGREEMENT ("Agreement"), dated as of the 30th day of
November, 2000, between Carolina Power and Light Company, a North Carolina
corporation headquartered in Raleigh, North Carolina, and a subsidiary of CP&L
Energy, Florida Power Corporation, ("FPC") a Florida Corporation headquartered
in St. Petersburg, Florida and a subsidiary of CP&L Energy, its successors or
assigns and H. William Habermeyer, Jr. ("Habermeyer"). Carolina Power & Light
and CP&L Energy shall be referred to as CP&L throughout.

                                    Recitals
                                    --------

         1. The Company and Habermeyer wish to enter into an employment
relationship whereby Habermeyer will be employed initially by CP&L but will
perform as President - Chief Executive Officer of Florida Power Corporation
("FPC"). Beginning January 1, 2002, Habermeyer will cease being an employee of
Carolina Power and Light and will become an employee of Florida Power
Corporation. Throughout this document the term "Company" shall be used to refer
to Carolina Power and Light prior to January 1, 2002 or as long as Habermeyer is
employed by Carolina Power and Light and shall refer to FPC beginning January 1,
2002 or as long as Habermeyer is employed by FPC.

         2. Habermeyer will be employed as an "at will" employee of the Company.
The parties wish to enter into this Agreement to set forth certain terms related
to that relationship.

                                   Provisions
                                   ----------

         NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and accepted, the parties hereto
hereby agree as follows:

         1.       TERM OF THE AGREEMENT:
                  ----------------------

                  (a) The Agreement becomes effective on November 30, 2000, and
shall remain in effect for a three-year period;

                  (b) Each year, the Agreement will be extended such that
prospective term will always be three years forward ("Evergrow provisions") on
the anniversary date of the effective date.

                  (c) Company may elect to not extend this Agreement and must
notify Habermeyer at least 60 days prior to the annual anniversary date of the
Agreement's effective date. In each event, the Agreement will be effective for
the remainder of its term.

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                  (d) The Agreement cannot extend beyond Habermeyer's normal
retirement date unless Habermeyer is requested to serve in his full-time
position for a defined period as set forth by the Board of Directors.

         2.       RESPONSIBILITIES; OTHER ACTIVITIES.
                  ----------------------------------

                  Habermeyer shall initially occupy the position of President -
Chief Executive Officer at FPC and shall undertake the general responsibilities
and duties of such position as directed by the Company. During the Employment
Term, Habermeyer shall perform faithfully the duties of Habermeyer's position,
devote all of Habermeyer's working time and energies to the business and affairs
of the Company and shall use Habermeyer's best efforts, skills and abilities to
promote the Company's. The Company reserves the right to reassign Habermeyer to
other positions.

         3.       SALARY.
                  ------

                  As compensation for the services to be performed hereunder:
Habermeyer will be paid a salary at the annual rate of Two Hundred Thirty
Thousand Dollars ($230,000) (less applicable withholdings) beginning on November
30, 2000. Annual salary for each subsequent year of the Employment Term shall be
subject to adjustment by the Company during the normal annual salary review
process for similarly situated executives as determined by the Company in its
discretion. Annual Salary shall be deemed earned proportionally as Habermeyer
performs services over the course of the Salary Year. Payments of annual Salary
shall be made, except as otherwise provided herein, in accordance with the
Company's standard payroll policies and procedures.

         4.       BENEFITS
                  --------

                  During the Employment Term, Habermeyer shall be entitled to
participate in all Company sponsored benefits programs as the Company may have
in effect upon terms and in accordance with policies and procedures
substantially equivalent to those then in effect and applicable generally to
employees of the Company. Provided, however, that nothing contained in this
Agreement shall require the Company to continue to offer such benefits or
programs or to limit the Company's absolute right to modify or eliminate these
benefits.

                  (a). Management Incentive Compensation Plan. Habermeyer will
be eligible to participate in the Management Incentive Compensation Plan (MICP).
Pursuant to the terms of MICP, Habermeyer's target compensation under such plan
will be 45% of base salary earnings, effective January 1, 2001, contingent upon
the closing of the Florida Progress Corporation ("FPC") acquisition.

                                       2
<PAGE>

                  (b). Long Term Incentives. Habermeyer will be eligible to
participate in the Performance Share Sub-Plan under the 1997 Equity Incentive
Plan in accordance with the terms of the plan. Pursuant to the terms of the
plan, Habermeyer's target compensation under such plan will be 100% of
Habermeyer's base salary at the time of the award. The annual target percentage
is effective January 1, 2001, contingent upon the closing of the FPC
acquisition.

                  (c). Restricted Share Grant. Habermeyer will be eligible to
participate in the Restricted Share Grant Plan under the 1997 Equity Incentive
Plan in accordance with the terms of the plan. Restrictions are based on
continued employment.

                  (d). Management Deferred Compensation Plan. Habermeyer will be
eligible for participation in CP&L's Management Deferred Compensation Plan
(MDCP), subject to its terms. Additionally, Habermeyer also has a vested benefit
under the suspended Deferred Compensation Plan for Key Management Employees.

                  (e). Supplemental Retirement Plan. Pursuant to its terms,
Habermeyer is eligible for participation in CP&L Supplemental Retirement Plan
(SRP), subject to its terms.

                  (f). Restoration Retirement Plan. Habermeyer will be eligible
for participation in CP&L's Restoration Retirement Plan, subject to its terms.
If Habermeyer becomes eligible for benefits under CP&L's Supplemental Senior
Executive Retirement Plan, Habermeyer forfeits all benefits under the
Restoration Retirement Plan.

                  (g). Supplemental Senior Executive Retirement Plan. Habermeyer
shall be eligible for participation in CP&L's Supplemental Senior Executive
Retirement Plan (SERP), subject to its terms.

                  (h). Executive Permanent Life Insurance Plan. Habermeyer shall
be eligible to participate in CP&L's Executive Permanent Life Insurance Plan,
subject to its terms.

                  (i). Executive AD&D Life Insurance. Habermeyer shall be
eligible to participate in CP&L's Executive AD&D Life Insurance Plan, subject to
its terms.

                  (j). Stock Purchase-Savings Plan. Habermeyer shall be eligible
to participate in CP&L's Stock Purchase-Savings Plan, subject to its terms.

                  (k). Financial Planning. Consistent with the Company's
practice with respect to other senior executives, Habermeyer will be reimbursed
for financial planning and tax preparation.

                  (l). Vacation. Habermeyer shall be entitled to four (4) weeks
of paid vacation days.

                                       3
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                  (m). Holiday. Habermeyer will be eligible for 11 paid holidays
in each calendar year as provided in the Company Handbook.

                  (n). Automobile Allowance. Habermeyer will be eligible to
receive an automobile allowance of One Thousand, Three Hundred and Fifty Dollars
($1350) per month (less withholdings) subject to the terms of the Company's
policies. Habermeyer will also be eligible for a cellular phone and reserved
parking at the Company's expense.

                  (o). Annual Physical. The Company will pay for an annual
physical examination by a physician of Habermeyer's choice.

                  (p). Luncheon/Dinner Club. FPC will pay an initiation fee and
monthly dues for a membership at a luncheon/dinner club approved by the FPC
Board of Directors. Habermeyer shall be eligible for this benefit on the Closing
Date.

                  (q).       Air Travel.

                             (i). The Company will provide airline club
membership in accordance with the Company's policy.

                             (ii). The Company will reimburse Habermeyer's
spouse's travel expenses when she accompanies Habermeyer to business meetings
where spousal attendance is customary.

                             (iii). The Company will provide chartered aircraft
for Habermeyer's business related travel as needed.

                             (iv). The Company will allow Habermeyer to travel
first class at his discretion for business related travel.

                  (r). Country Club Membership. At Habermeyer's option, if
joined, the Company will pay an initiation fee and monthly dues for a membership
for Habermeyer at a country club approved by the Company. Business related
expenses will be reimbursed consistent with the Company's expense account
guidelines.

                  (s). Health Club Membership. The Company will pay the
initiation fee and monthly dues to a health club membership for Habermeyer.

                  (t). Personal Computer. The Company will provide a personal
computer to Habermeyer to be used at his personal residence.

                  (u). Home Security. The Company will install a home security
system at Habermeyer's personal residence.

                                       4
<PAGE>

                  (v). Other Benefits. Habermeyer shall be eligible for
participation in other Company benefit plans, subject to the terms of the
respective plans, as described in more detail in the Employee Handbook or
Summary Plan Descriptions.

         5.       TERMINATION OF EMPLOYMENT.
                  -------------------------

                  (a). Termination Without Cause. During the terms of this
Agreement, if Habermeyer's employment is terminated without cause, then
Habermeyer will be provided with his base salary at Habermeyer's current rate
for the remainder of the term of this Agreement. Additionally, the Company will
reimburse Habermeyer for his COBRA premium for up to eighteen (18) months after
the termination of Habermeyer's employment as long as Habermeyer is not eligible
for coverage under the same type of benefit plan covered by COBRA. Receipt of
these benefits is subject to the requirements of paragraph 5(g),(h) and (i) of
this Agreement. In addition, Habermeyer will be eligible to retain all benefits
under existing benefit programs to the extent vested within the terms of those
programs.

                  (b) Termination for Cause. During the term of this Agreement,
the Company may elect at any time to terminate Habermeyer's employment
immediately hereunder and remove Habermeyer from employment for cause. For
purposes of this paragraph 5, cause for the termination of employment shall be
defined as: (i) any act of Habermeyer's including, but not limited to,
misconduct, negligence, unlawfulness, dishonesty or inattention to the business,
which is detrimental to the Company's interests; or (ii) Habermeyer's
unsatisfactory job performance or failure to comply with the Company's
direction, policies, rules or regulations. If Habermeyer is terminated for Cause
as defined, then he shall be eligible to retain all benefits under existing
benefit programs which he has vested pursuant to those plans, but he shall not
be entitled to any form of salary continuance or any form of severance benefits.
Upon such termination, Habermeyer shall be entitled to any earned but unpaid
salary accrued to the date of termination. Any continued rights or benefits
Habermeyer's legal representatives may have under employee benefit plans and
programs of the Company upon Habermeyer's termination for cause shall be
determined in accordance with the terms or provisions of the plan or program.

                  (c).     Constructive Termination.
                           -------------------------

                           (i) Within the term of this Agreement, if
Habermeyer's employment is constructively terminated, then Habermeyer will be
provided with his base salary at the current rate for the remainder of the term
of this Agreement. Additionally, the Company will reimburse Habermeyer for his
COBRA premiums for up to eighteen (18) months after the termination of
Habermeyer's employment as long as Habermeyer is not eligible for coverage under
the same types of benefits plans covered by COBRA. Receipt of these benefits is
subject to the requirements of paragraph 5(g), (h) and (i) of this Agreement. In
addition, Habermeyer will be eligible to retain all benefits under existing
benefit programs to the extent vested within the terms of those programs.

                                       5
<PAGE>

                           (ii) For the purposes of paragraph 5 of this
Agreement, a constructive termination will be deemed to occur if: aa) there is a
substantial change in the form of ownership of the Company (e.g., the Company is
acquired, enters into a business combination with another company or otherwise
substantial changes form of ownership) and bb) Habermeyer is offered a new
position with a material change in authority, duties, wages or benefits, or
Habermeyer is asked to relocate more than 50 miles. If Habermeyer's employment
is constructively terminated under this paragraph, Habermeyer is entitled to the
greater of either the benefits contained in this paragraph or the benefits he is
entitled to, if any, under the CP&L Management Change-in-Control Plan, according
to the terms of the Plan. Changes in the corporation structure of the Company
not related to an acquisition of the Company shall not constitute a grounds for
constructive termination.

                  (d). Voluntary Termination - If Habermeyer terminates his
employment voluntarily for any reason at any time, then he shall be eligible to
retain all benefits under existing benefit plans which have vested pursuant to
the terms of those plans, but he shall not be entitled to any form of salary
continuance or any form of severance benefit.

                  (e). Termination Due to Death. In the event of the death of
Habermeyer during the Employment Term, Habermeyer's employment hereunder shall
terminate and the Company shall have no further obligation to Habermeyer under
this Agreement except as specifically provided in this Agreement. Habermeyer's
estate shall be entitled to receive all earned but unpaid Salary accrued to the
date of termination and any Bonus for a prior fiscal year that has been earned
but not paid. The Bonus, if any, for the current fiscal year shall be calculated
on a pro rata basis for the portion of the fiscal year in which death occurred
and shall be paid at the regularly scheduled time for the payment of the Bonus.
Any rights and benefits Habermeyer, or Habermeyer's estate or other legal
representatives, may have under employee benefit plans and programs of the
Company upon Habermeyer's death during the Employment Term, if any, shall be
determined in accordance with the terms and provisions of such plans and
programs.

                  (f).     Termination Due to Medical Condition.

                           (i). The Company may terminate Habermeyer's
employment hereunder, subject to the Americans With Disabilities Act or other
applicable law, due to medical condition if (i) for a period of 180 consecutive
days during the Employment Term, Habermeyer is totally and permanently disabled
as determined in accordance with the Company's long-term disability plan, if
any, as in effect during such time or (ii) at any time during which no such plan
is in effect, Habermeyer is substantially unable to perform Habermeyer's duties
hereunder because of a medical condition for a period of 180 consecutive days
during the Employment Term. Provided, however, that if Habermeyer applies for
and is deemed eligible for benefits under CP&L's Long-Term Disability Plan (LTD
Benefits), Habermeyer shall receive such benefits and his employment will not be
terminated as long as he is receiving LTD Benefits.

                           (ii). Upon the termination of Habermeyer's employment
due to medical condition or placement of Habermeyer on Long Term Disability
(LTD), the Company

                                       6
<PAGE>

shall have no further obligation to Habermeyer under this Agreement except as
specifically provided in this Agreement. Upon such termination or placement on
LTD, Habermeyer shall be entitled to all earned but unpaid Salary accrued to the
date of termination or placement on LTD and any Bonus for a prior fiscal year
that has been earned but not paid. The Bonus, if any, for the current fiscal
year shall be calculated on a pro rata basis for the portion of the fiscal year
Habermeyer was employed or placed on LTD by the Company and shall be paid at the
regularly scheduled time for the payment of the Bonus. Any continued rights and
benefits Habermeyer, or Habermeyer's legal representatives, may have under
employee benefit plans and programs of the Company upon Habermeyer's termination
or placement on LTD due to medical condition, if any, shall be determined in
accordance with the terms and provisions of such plans and programs.

                  (g). Release of Claims - In order to receive continuation of
salary under this paragraph 5(a) and 5(c), Habermeyer agrees to execute a
written release of all claims against the Company, and its employees, officers,
directors, subsidiaries and affiliates, on a form acceptable to the Company.

                  (h) Covenant Not to Compete. If the Company terminates
Habermeyer's employment without Cause under paragraph 5(a) or Constructively
terminates Habermeyer's employment under paragraph 5(c) of this Agreement,
Habermeyer, for one year after the Termination Date, shall not compete directly
or indirectly with the Company, or its affiliates within fifty (50) miles of any
geographic area in which the Company or its affiliates has a material business
interests with which Habermeyer is involved at the time of the termination of
Habermeyer's employment.

                  (i) Non Interference. If the Company terminates Habermeyer's
employment without Cause under paragraph 5(a) or Constructively terminates
Habermeyer's employment under paragraph 5(c) of this Agreement, Habermeyer, for
one year after the Termination Date, shall not whether on his own account or on
the account of another individual, partnership, firm, corporation, or other
business organization (other than the Company and its affiliates), directly or
indirectly, intentionally solicit, endeavor to entice away from the Company or
any of its affiliates, or otherwise interfere with the relationship of the
Company or its affiliates with, any person who is employed by or otherwise
engaged to perform services for the Company or its affiliates including but not
limited to, any independent representatives or organizations, or any person or
entity that is a customer of the Company or its affiliates.
         6.       ASSIGNABILITY.
                  -------------

                  No rights or obligations of Habermeyer under this Agreement
may be assigned or transferred by Habermeyer, except that (a) Habermeyer's
rights to compensation and benefits hereunder may be transferred by will or laws
of intestacy to the extent specified herein and (b) Habermeyer's rights under
employee benefit plans or programs described in Section 4 may be assigned or
transferred in accordance with the terms of such plans or programs, or regular
practices thereunder. The Company may assign or transfer its rights and
obligations under this Agreement.

                                       7
<PAGE>

         7.      CONFIDENTIALITY. Habermeyer will not disclose the terms of this
Agreement except (i) to financial and legal advisors under an obligation to
maintain confidentiality, or (ii) as required by a valid court order or subpoena
(and in such event will use Habermeyer's best efforts to obtain a protective
order requiring that all disclosure be kept under court seal) and will notify
the Company promptly upon receipt of such order or subpoena.

         8.       MISCELLANEOUS.
                  -------------

                  (a) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of North Carolina without
reference to laws governing conflicts of law.

                  (b) Entire Agreement. This Agreement contains all of the
understandings and representations between the parties hereto pertaining to the
subject matter hereof and supersedes all undertakings and agreements, whether
oral or in writing, if any, previously entered into by them with respect
thereto.

                  (c) Amendment or Modification; Waiver. No provision in this
Agreement may be amended or waived unless such amendment or waiver is agreed to
in writing, signed by Habermeyer and by an officer of the Company thereunto duly
authorized to do so. Except as otherwise specifically provided in the Agreement,
no waiver by a party hereto of any breach by the other party hereto of any
condition or provision of the Agreement to be performed by such other party
shall be deemed a wavier of a similar or dissimilar provision or condition at
the same or any prior or subsequent time.

                  (d) Notice. Any notice (with the exception of notice of
termination by the Company, which may be given by any means and need not be in
writing except that if termination is for Cause, oral notice must be followed by
written notice required under Section 5(c) hereof) or other document or
communication required or permitted to be given or delivered hereunder shall be
in writing and shall be deemed to have been duly given or delivered if (i)
mailed by United States mail, certified, return receipt requested, with proper
postage prepaid, or (ii) otherwise delivered by hand or by overnight delivery,
against written receipt, by a common carrier or commercial courier or delivery
service, to the party to whom it is to be given at the address of such party as
set forth below (or to such other address as a party shall have designated by
notice to the other parties given pursuant hereto):

                                       8
<PAGE>

                  If to Habermeyer:

                           H. William Habermeyer, Jr.
                           Florida Power Corporation
                           411 Fayetteville Street Mall
                           Raleigh, North Carolina  27602

                  If to the Company:

                           CP&L Service Company LLC
                           411 Fayetteville Street Mall
                           Raleigh, North Carolina  27602
                           Attn.:  Vice President, Human Resources

Any such notice, request, demand, advice, schedule, report, certificate,
direction, instruction or other document or communication so mailed or sent
shall be deemed to have been duly given, if sent by mail, on the third business
day following the date on which it was deposited at a United States post office,
and if delivered by hand, at the time of delivery by such commercial courier or
delivery service, and, if delivered by overnight delivery service, on the first
business day following the date on which it was delivered to the custody of such
common carrier or commercial courier or delivery service, as all such dates are
evidenced by the applicable delivery receipt, airbill or other shipping or
mailing document.

                  (e) Severability. In the event that any provision or portion
of this Agreement shall be determined to be invalid or unenforceable for any
reason, the remaining provisions or portions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.

                  (f) References. In the event of Habermeyer's death or a
judicial determination of Habermeyer's incompetence, reference in this Agreement
to Habermeyer shall be deemed, where appropriate, to refer to Habermeyer's legal
representative, or, where appropriate, to Habermeyer's beneficiary or
beneficiaries.

                  (g) Headings. Headings contained herein are for convenient
reference only and shall not in any way affect the meaning or interpretation of
this Agreement.

                  (h) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

                  (i) Rules of Construction. The following rules shall apply to
the construction and interpretation of this Agreement:

                                       9
<PAGE>

                           (i) Singular words shall connote the plural number as
well as the singular and vice versa, and the masculine shall include the
feminine and the neuter.

                           (ii) All references herein to particular articles,
paragraphs, sections, subsections, clauses, Schedules or Exhibits are references
to articles, paragraphs, sections, subsections, clauses, Schedules or Exhibits
of this Agreement.

                           (iii) Each party and its counsel have reviewed and
revised (or requested revisions of) this Agreement, and therefore any rule of
construction requiring that ambiguities are to be resolved against a particular
party shall not be applicable in the construction and interpretation of this
Agreement or any exhibits hereto or amendments hereof.

                           (iv) As used in this Agreement, "including" is
illustrative, and means "including but not limited to."

                  (j) Remedies. Remedies specified in this Agreement are in
addition to any others available at law or in equity.

                  (k) Withholding Taxes. All payments under this Agreement shall
be subject to applicable income, excise and employment tax withholding
requirements.

         IN WITNESS WHEREOF, the parties hereto have executed, or have caused
this Agreement to be executed by their duly authorized officer, as the case may
be, all as of the day and year written below.

By:      /s/ H. William Habermeyer, Jr.                       Date:    12/11/00
         ------------------------------
         H. William Habermeyer, Jr.

By:      /s/ William Cavanaugh III                            Date:    12/4/00
         ---------------------------
         Carolina Power and Light Company

Title:
         -----------------------------------

By:      /s/ William Cavanaugh III                            Date:    12/4/00
         ---------------------------
         Florida Power Corporation

Title:
         -----------------------------------

                                       10

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