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                                                                   Exhibit 10.25

                              AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

         AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") made as of
this 16th day of May, 2000 by and among Karen C. Keenan ("Employee"), Investors
Financial Services Corp., a Delaware corporation ("IFSC"), and Investors Bank &
Trust Company, a Massachusetts chartered trust company having its principal
place of business at 200 Clarendon Street, Boston, Massachusetts (the
"Company").

         WHEREAS, IFSC, the Company and the Employee are parties to an
employment agreement, dated as of October 12, 1995 (the "Prior Agreement"), and
the parties thereto wish to enter into this Agreement in order to update the
Prior Agreement;

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

         1. POSITION AND RESPONSIBILITIES. During the term of this Agreement,
the Employee shall serve as Senior Vice President and Chief Financial Officer of
the Company and of IFSC. The Employee will have such responsibilities, duties
and authority as she has as of the date hereof in her positions as Senior Vice
President and Chief Financial Officer of the Company and of IFSC. The Employee
will have such other responsibilities, duties and authority as may from time to
time be assigned to her that are consistent and commensurate with her status and
positions at the Company and IFSC. The Employee shall at all times report to,
and only to, and her activities shall at all times be subject to the direction
and control of, the Chief Executive Officer of the Company, and the Employee
shall exercise such powers and comply with and perform, faithfully and to the
best of her ability, such directions and duties in relation to the business and
affairs of the Company, as may from time to time be vested in or requested of
her by the Chief Executive Officer of the Company. The Employee agrees to devote
substantially all of her business time, attention and services to the diligent,
faithful and competent discharge of such duties for the successful operation of
the Company's business. During the term hereof, the Employee will not have any
managerial or operations responsibility, other than service on a board of
directors, in any enterprise, firm, corporation, trust or other business entity
other than the Company and IFSC; provided, however, that nothing herein shall
prevent the ownership by the Employee of an equity interest in any business
entity, provided that such ownership does not involve any managerial or
operational responsibility other than serving on the board of directors of a
corporation. Any directorships of corporations other than the Company and IFSC
must be approved in writing by the Board of Directors of IFSC (the "IFSC Board")
in advance. At all times during the term of this Agreement, the Employee's
primary place of employment shall be within fifteen (15) miles of Boston,
Massachusetts.

         2. COMPENSATION: SALARY, ANNUAL BONUS, EQUITY PARTICIPATION AND OTHER
BENEFITS. During the term of this Agreement, the Company shall pay the Employee
the following compensation, including the following salary, bonus and other
fringe and welfare benefits:

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         (A) SALARY. In consideration of the services to be rendered by the
Employee to the Company and IFSC, the Company will pay to the Employee an annual
base salary of $235,000 (the "Base Rate"). Such Base Rate shall be payable in
conformity with the Company's customary practices for executive compensation as
such practices shall be established or modified from time to time. The
Employee's Base Rate shall be evaluated annually by the IFSC Board or the
Compensation Committee thereof, and may be increased as appropriate, within
thirty (30) days of the end of each calendar year, but in no circumstances shall
the Base Rate be decreased below the Base Rate that was established for the most
recently concluded calendar year.

         (B) WELFARE AND FRINGE BENEFITS. The Employee will be entitled to
participate in the Company's welfare and fringe benefit plans, programs and
policies generally available to other senior executives of the Company, on the
same basis as such other senior executives. In addition, the Employee will be
entitled to four (4) weeks vacation during each calendar year, which shall
accrue if and to the extent unused. The Employee will be entitled to be
reimbursed for all of her business-related expenses, including but not limited
to telephone usage and business related travel expenses.

         (C) ANNUAL BONUS. For each twelve month period ending on December 31
during the term of this Agreement ("Year End"), in addition to the amounts
payable under Section 2(A) above, the Employee shall receive a cash bonus (the
"Annual Bonus"), with the amount of such bonus to be determined pursuant to such
bonus plan as may from time to time be adopted by the IFSC Board or the
Compensation Committee thereof. The Annual Bonus shall be payable at such times
as the IFSC Board shall establish, provided that the Employee continues to be
employed by the Company on each such Year End except as otherwise provided in
Section 4 hereof.

         (D) EQUITY PARTICIPATION.

             (i) The Employee shall be entitled to participate annually in the
         1995 Stock Plan and any future equity compensation plan that is
         generally made available to other senior executives of the Company, in
         such amounts and on such terms as are determined appropriate thereunder
         commensurate with her position and performance, and in accordance with
         all of the terms and conditions of such plan.

             (ii) The Company agrees that with respect to all options and
         restricted shares to be granted by the Company, upon grant and during
         the term of such options and the vesting period of such restricted
         shares, the Company shall use its reasonable efforts to comply with the
         requirements of Rule 16b-3, promulgated pursuant to the Securities
         Exchange Act of 1934, as amended, as such rule shall be in effect from
         time to time, or with any successor provision ("Rule 16b-311") such
         that such options and restricted shares shall be afforded the benefits
         of Rule 16b-3.

             (iii) The Company agrees that it shall use its best efforts to file
         and cause to become and remain effective a registration statement on
         Form S-8 (or a successor form) such that either the resale by the
         Employee of restricted shares granted to the Employee

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         by the Company or the grant of such shares and the purchase of shares
         by the Employee upon the exercise of the options to be granted to the
         Employee shall be registered under the; Securities Act of 1933, as
         amended, or any successor provision.

         (E) LIFE INSURANCE PREMIUM PAYMENTS AND TAX GROSS-UP. The Company shall
pay to the Employee the cost of premiums (such payments to be "grossed-up" to
account for the tax liability to the Employee on such payments) for a life
insurance policy for the benefit of the Trustees of an insurance trust
designated by the Employee or such other entity or individual as the Employee
shall so designate (the "Life Insurance Policy"). The amount of such policy
shall not exceed the amount of the termination for Good Reason severance payment
determined under Section 4(A) hereof. The Company shall provide reasonable
assistance to the Employee in obtaining the Life Insurance Policy.

         3. TERM. The term of this Agreement shall commence on the date first
above written and shall terminate on the earlier to occur of (i) three (3) years
from such date, or, if later, three (3) years from the date upon which the IFSC
Board last renewed the term as provided below; (ii) the Employee's death, or
upon written notice from the Company to the Employee, if the Employee is
permanently disabled, or (iii) the occurrence of any of the circumstances
described in Section 4 hereof. For the purposes of this Agreement, the Employee
shall be deemed to be permanently disabled if a physician, chosen by the
Company, and reasonably acceptable to the Employee or her legal representative,
determines in good faith that, as a result of a physical or mental condition
caused by injury, illness, disease or mental disorder, the Employee is unable to
perform her duties hereunder for any one hundred twenty (120) work days out of
any 365-day period or for ninety (90) consecutive days in any 365-day period.
Within thirty (30) days of December 31 of each calendar year, the IFSC Board
shall consider the extension of the term of this Agreement to three years from
such December 31. Each such extension shall be effective only when agreed to by
the Employee. In the event that the IFSC Board fails to extend the term of this
Agreement, the Employee may terminate this Agreement for "Good Reason," in
accordance with Section 4(A) hereof, notwithstanding any other term hereof.

         4. TERMINATION. The Employee's employment under this Agreement, and
this Agreement, subject to Section 16 hereof, may be terminated as follows:

         (A) BY THE EMPLOYEE WITH OR WITHOUT GOOD REASON. The Employee may
terminate her employment, with or without Good Reason (as defined below), at any
time upon at least sixty (60) days' advance written notice to the Company. In
the event of a family emergency, including but not limited to the death or
incapacity of an immediate family member, or upon other circumstances deemed
sufficient by a majority of the IFSC Board, the Employee may terminate her
employment upon fifteen (15) days' advance written notice to the Company. In the
event of termination at the Employee's option without Good Reason, the Employee
shall be entitled to no severance or other termination benefits after the
expiration of the sixty-day period referred to above, except as otherwise
required by law. In the event the Employee terminates her employment for Good
Reason, the Company agrees to pay the Employee, in a lump sum within fifteen
(15) days of the Employee's last day of employment with the Company, a severance
payment equal to the product of (i) the greater of (x) the remaining number of
months in the term

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of this Agreement and (y) twenty-four months (the "Severance Period"), divided
by twelve, multiplied by (ii) the sum of the Employee's Base Rate immediately
prior to such termination and the Recent Annual Bonus (as defined below). In
addition, during the Severance Period, the Company shall continue to provide the
Employee and her eligible dependents (to the extent applicable) with group
health benefits and life and disability insurance on the same terms and
conditions applicable to active senior executives of the Company, including
cost-sharing (hereinafter the "Welfare Benefits"), provided, that if the Welfare
Benefits cannot be provided to inactive employees under the terms of the
applicable plans or applicable law, the Company shall provide the Employee with,
or pay the Employee for the cost of obtaining, substitute benefits that are no
less favorable in the aggregate than the Welfare Benefits as in effect
immediately prior to the Employee's termination. Notwithstanding the foregoing,
the Company's responsibility for the cost of the Welfare Benefits shall not
exceed twice the cost it paid for such coverage immediately prior to the
Employee's termination. As used in this Agreement, "Recent Annual Bonus" shall
mean the highest Annual Bonus paid or payable to the Employee (including any
deferred amounts) with respect to any of the three full calendar years ending
immediately prior to the Employee's termination of employment.

         As used in this Agreement, a "Good Reason" shall mean any of the
following:

             (i) a material change by the Company or IFSC in the Employee's
         authority, functions, duties or responsibilities as Senior Vice
         President and Chief Financial Officer of the Company and IFSC
         (including, without limitation, material changes in the control or
         structure of the Company or IFSC) which would cause the Employee's
         position with the Company or IFSC to become of less responsibility,
         importance or scope than the Employee's position as of the date of this
         Agreement, provided that such material change is not in connection with
         a termination of the Employee's employment hereunder for Cause in
         accordance with Section 4B;

             (ii) a failure by the Company to renew this Agreement as provided
         in Section 3 hereof, provided that such nonrenewal is not in connection
         with a termination of the Employee's employment hereunder for Cause in
         accordance with Section 4B; or

             (iii) a failure by the Company to comply in a material respect with
         any material provision of this Agreement or any other agreement between
         the parties, which has not been cured within fifteen (15) days after
         notice of such noncompliance has been given by the Employee to the
         Company.

         (B) AT THE ELECTION OF THE COMPANY FOR CAUSE. The Company may,
immediately and unilaterally, terminate the Employee's employment hereunder for
Cause at any time during the term of this Agreement. Termination of the
Employee's employment by the Company shall constitute a termination for Cause
under this Agreement if such termination is for one or more of the following
reasons, as found by the IFSC Board by a resolution duly adopted in good faith
by a majority of its members after notice to the Employee and an opportunity to
be heard before the IFSC Board with counsel. As used herein, "Cause" shall mean:

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             (i) the continued failure or continued refusal of the Employee to
         render services to the Company or IFSC in accordance with her
         obligations under this Agreement or a reasonable determination by a
         majority of the IFSC Board that the Employee has performed inadequately
         the duties of her employment, in each case continuing for fifteen (15)
         days after the Employee's receipt of written notice specifying the
         alleged failure, refusal or performance inadequacy;

             (ii) gross negligence, dishonesty, breach of fiduciary duty or
         material breach of the material terms of this Agreement or the other
         agreements executed in connection herewith;

             (iii) the commission by the Employee of an act of fraud,
         embezzlement or deliberate disregard of the rules or policies of the
         Company or IFSC or the commission by the Employee of any other action
         with the intent to injure materially the Company or IFSC;

             (iv) the conviction by the Employee of a felony, either in
         connection with the performance of her obligations hereunder or that
         will materially and adversely affect the Employee's ability to perform
         her obligations hereunder; or

             (v) the commission of an act which constitutes unfair competition
         with the Company or which induces any customer of the Company to breach
         a contract with the Company.

         In the event of a termination for Cause pursuant to the provisions of
clauses (ii) through (v) above, inclusive, the Employee shall not be entitled to
severance or other termination benefits, except as required by law. In the event
of a termination for Cause pursuant to the provisions of clause (i) above, the
Company, notwithstanding the remaining term of this Agreement, agrees to (x) pay
the Employee a lump-sum severance payment equal to nine (9) months' salary at
the Employee's Base Rate, within fifteen (15) days of the Employee's last day of
employment by the Company and (y) provide continuing group health benefits
during the nine (9) month severance period to the Employee and her eligible
dependents on the same basis and terms and conditions, including cost-sharing,
as provided to other active senior executives of the Company during such period.

         (C) AT THE ELECTION OF THE COMPANY FOR REASONS OTHER THAN FOR CAUSE.
The Company may, immediately and unilaterally, terminate the Employee's
employment hereunder and this Agreement at any time during the term of this
Agreement without Cause by giving sixty (60) days' advance written notice to the
Employee of the Company's election to terminate. During such sixty-day period,
the Employee will be available on a full-time basis for the benefit of the
Company to assist the Company in making the transition to a new, successor
officer of the Company. In the event the Company exercises its right to
terminate the Employee under this Section 4(C), the Company agrees to pay the
Employee, in a lump sum within fifteen (15) days of the Employee's last day of
employment with the Company, a severance payment equal to the amount determined
under Section 4(A) hereof and to provide the Welfare Benefits during the

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Severance Period, in each case as if the Employee had terminated employment for
Good Reason under Section 4(A) hereof.

         (D) TERMINATION DUE TO DEATH OR DISABILITY. In the event this Agreement
shall terminate due to the Employee's death or upon written notice from the
Company to the Employee if the Employee is permanently disabled, the Company
shall pay the Employee or her legal representatives an amount equal to the
amount payable under Section 4(C) as if the Employee had been terminated other
than for Cause, reduced by any amount payable to an insurance trust or such
other designated individual or entity under the Life Insurance Policy, if any,
in the case of the Employee's death, or under disability insurance provided by
the Company, in the case of the Employee's termination due to her permanent
disability. In addition, upon a termination of the Employee due to her permanent
disability, the Company shall continue to provide the Welfare Benefits during
the Severance Period, as if the Employee's employment had been terminated other
than for Cause under Section 4(C). The provisions of this Section 4(D) shall
survive the termination of this Agreement by reason of the death or permanent
disability of the Employee.

         5. NONCOMPETITION AND CONFIDENTIALITY. In connection with her
employment by the Company, the Employee has previously executed the
Noncompetition and Confidentiality Agreement attached hereto as EXHIBIT A, the
terms and conditions of which are incorporated herein by reference. The
Noncompetition and Confidentiality Agreement shall survive the termination of
this Agreement and shall remain in full force and effect for so long as is
provided by its own terms and as is permitted by law.

         6. CONSENT AND WAIVER BY THIRD PARTIES. The Employee hereby represents
and warrants that she has obtained all waivers and/or consents from third
parties which are necessary to enable her to enjoy employment with the Company
on the terms and conditions set forth herein and to execute and perform this
Agreement without being in conflict with any other agreement, obligation or
understanding with any such third party. The Employee represents that she is not
bound by any agreement or any other existing or previous business relationship,
which conflicts with, or may conflict with, the performance of her obligations
hereunder or prevent the full performance of her duties and obligations
hereunder.

         7. GOVERNING LAW. This Agreement, the employment relationship
contemplated herein and any claim arising from such relationship, whether or not
arising under this Agreement, shall be governed by and construed in accordance
with the internal law of the Commonwealth of Massachusetts and this Agreement
shall be deemed to be performable in Massachusetts.

         8. SEVERABILITY. In case any one or more of the provisions contained in
the Agreement or the other agreements executed in connection with the
transactions contemplated hereby for any reason shall be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement or such
other agreements, but this Agreement or such other agreements, as the case may
be, shall be construed and reformed to the maximum extent permitted by law.

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         9. WAIVERS AND MODIFICATIONS. This Agreement may be modified, and the
rights, remedies and obligations contained in any provision hereof may be
waived, only in accordance with this Section 9. No waiver by either party of any
breach by the other or any provision hereof shall be deemed to be a waiver of
any later or other breach thereof or as a waiver of any other provision of this
Agreement. This Agreement sets forth all of the terms of the understandings
between the parties with reference to the subject matter set forth herein on or
after the date hereof and may not be waived, changed, discharged or terminated
orally or by any course of dealing between the parties, but only by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought. No modification or waiver by the Company
shall be effective without the consent of at least a majority of the members of
the IFSC Board (excluding the Employee) then in office at the time of such
modification or waiver.

         10. ASSIGNMENT. The Employee acknowledges that the services to be
rendered by her hereunder are unique and personal in nature. Accordingly, the
Employee may not assign any of her rights or delegate any of her duties or
obligations under this Agreement, provided, however, that this Agreement shall
inure to the benefit of Employee's heirs, executors, administrators, personal
and legal representatives, distributees, devisees, legatees and successors. The
rights and obligations of the Company and IFSC under this Agreement shall inure
to the benefit of, and shall be binding upon, the successors and assigns of the
Company and IFSC, respectively. The Company and IFSC agree that a successor in
interest by merger, operation of law, consolidation, assignment, purchase or
otherwise of a controlling interest in the business of the Company or IFSC will
be informed prior to such event of the existence of this Agreement. The Company
and IFSC will require any successor (whether direct or indirect, by purchase,
merger, operation of law, consolidation, assignment or otherwise of a
controlling interest in the business, stock or other assets of the Company or
IFSC) to assume expressly and agree to perform this Agreement. As used in this
Agreement, "the Company" and "IFSC" shall mean the Company and IFSC as
hereinbefore defined and any successors as aforesaid.

         11. ACKNOWLEDGMENTS. The Employee hereby acknowledges and recognizes
that the enforcement of any of the provisions in this Agreement and the
Noncompetition and Confidentiality Agreement incorporated herein may potentially
interfere with the Employee's ability to pursue a proper livelihood. The
Employee represents that she is knowledgeable about the business of the Company.
The Employee recognizes and agrees that the enforcement of the Noncompetition
and Confidentiality Agreement is intended to ensure the preservation, protection
and continuity of the business trade secrets and goodwill of the Company. The
Employee agrees that, due to the proprietary nature of the Company's business,
the restrictions set forth in the Noncompetition and Confidentiality Agreement
are reasonable as to time and scope. The foregoing shall not prohibit the
Employee from employment with any company by which the Employee has been
employed in the past so long as her activities with any such company do not
otherwise constitute a breach of the Noncompetition and Confidentiality
Agreement.

         12. ENTIRE AGREEMENT. This Agreement, and the Noncompetition and
Confidentiality Agreement and any other plans or agreements referenced herein,
constitute the entire understanding of the parties relating to the subject
matter hereof and, except as provided herein, supersede and cancel all
agreements, written or oral, made prior to the date hereof between the

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Employee and the Company relating to employment, salary, bonus, or other
compensation of any description, future equity participation, pension,
post-retirement benefits, severance or other remuneration, other than the Change
of Control Agreement between IFSC and the Employee dated as of May 16, 2000. In
addition, notwithstanding anything contained herein to the contrary, with
respect to stock options granted to the Employee prior to the date of this
Agreement, the definition of "Change of Control" contained in Section 4(D) of
the Prior Agreement shall continue to apply and shall remain in full force and
effect.

         13. NOTICES. All notices hereunder shall be in writing and shall be
delivered in person, mailed by certified or registered mail, return receipt
requested, or sent by overnight courier, addressed as follows:

         If to the Company, to: Investors Financial Services Corp.
                                200 Clarendon Street
                                Boston, MA 02116-9130
                                Attention: Karen C. Keenan

         If to the Employee:    At the most recent address
                                on file at the Company.

All notices hereunder shall be deemed to have been given either (i) if
personally, upon receipt, (ii) if sent by overnight courier on the next business
day following the day such notice is delivered to the courier service, or (iii)
if sent by registered or certified mail, on the 5th business day following the
day such mailing is made.

         14. COUNTERPARTS. This Agreement may be executed in two counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.

         15. SECTION HEADINGS. The descriptive section headings herein have been
inserted for convenience only and shall not be deemed to define, limit, or
otherwise affect the construction of any provision hereof.

         16. SURVIVAL. Notwithstanding any other provision hereof, the
provisions of Sections 2(D), 4, 5, 17, 18, 19 and 20 shall survive any
termination of the Employees employment and the other provisions of this
Agreement.

         17. MITIGATION. The Employee shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise, nor, other than as provided in Section 4(D) hereof, shall the
amount of any payment provided for herein be reduced by any compensation earned
by the Employee as the result of employment by another employer or by retirement
benefits or insurance payments after the date of termination or otherwise.

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         18. LEGAL EXPENSES. The Company will pay the Employee's reasonable fees
for legal and tax advice and other related expenses associated with the
negotiation and completion of this Agreement, as well as any future amendments
hereto and any disputes arising hereunder, provided, however, in the event of
any dispute arising hereunder, if a court of competent jurisdiction shall render
a final judgment in favor of the Company on the issues in such dispute
hereunder, from which there is no further right of appeal, the Employee shall
reimburse the Company all amounts paid to the Employee under this Section 18
with respect to such dispute.

         19. INDEMNIFICATION. The Company agrees that the Employee shall be
entitled to indemnification, and advancement of expenses in connection
therewith, as a director, officer and employee of the Company, of IFSC and of
any affiliate of the Company or IFSC to the full extent permitted by applicable
law.

         20. WITHHOLDING. The Company may withhold from any amounts payable
under this Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.



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         IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written as an instrument under seal.

Investors Bank & Trust Company                       Karen C. Keenan

By:
   -----------------------------------
                                                     Signature
Title:
      --------------------------------

Investors Financial Services Corp.

By:
   -----------------------------------

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




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