<PAGE>


                                                                    Exhibit 10.2












                            BENEFIT RESTORATION PLAN

                                       OF

                            WESTFIELD FINANCIAL, INC.

                        --------------------------------













                     Effective as of the Reorganization Date

<PAGE>

                        TABLE OF CONTENTS
                        -----------------
                                                 Page
                                                 ----
                          Article I

                         Definitions

Section 1.1       Affiliated Employer             1
Section 1.2       Applicable Limitation           1
Section 1.3       Bank                            1
Section 1.4       Beneficiary                     1
Section 1.5       Board                           2
Section 1.6       Code                            2
Section 1.7       Committee                       2
Section 1.8       Company                         2
Section 1.9       Eligible Employee               2
Section 1.10      Employee                        2
Section 1.11      Employer                        2
Section 1.12      Employer Contributions          2
Section 1.13      ERISA                           2
Section 1.14      ESOP                            2
Section 1.15      Exchange Act                    2
Section 1.16      Fair Market Value of a Share    2
Section 1.17      Former Participant              3
Section 1.18      Savings Plan                    3
Section 1.19      Participant                     3
Section 1.20      Plan                            3
Section 1.21      Share                           3
Section 1.22      Stock Unit                      3
Section 1.23      Termination of Service          3


                          Article II

                        Participation

Section 2.1       Eligibility for Participation   3
Section 2.2       Commencement of Participation   4
Section 2.3       Termination of Participation    4



                                      (i)


<PAGE>


                                                                    Page
                                                                    ----
                        Article III

                  Benefits to Participants

Section 3.1       Supplemental Savings Benefit                        4
Section 3.2       Supplemental ESOP Benefits                          5
Section 3.3       Restored  ESOP Benefits                             7


                       Article IV

                     Death Benefits

Section 4.1       Supplemental Savings Plan Death Benefits            8
Section 4.2       Supplemental ESOP Death Benefits                    8
Section 4.3       Restored ESOP Death Benefits                        8
Section 4.4       Beneficiaries                                       8


                       Article V

                       Trust Fund

Section 5.1       Establishment of Trust                              9
Section 5.2       Contributions to Trust                              9
Section 5.3       Unfunded Character of Plan                          9


                        Article VI

                      Administration

Section 6.1       The Committee                                      10
Section 6.2       Liability of Committee Members and their Delegates 11
Section 6.3       Plan Expenses                                      11
Section 6.4       Facility of Payment                                11


                                      (ii)

<PAGE>

                                                              Page
                                                              ____
                        Article VII

                  Amendment and Termination

Section 7.1       Amendment by the Company                    12
Section 7.2       Termination                                 12
Section 7.3       Amendment or Termination by Other Employers 12


                       Article VIII

                  Miscellaneous Provisions

Section 8.1       Construction and Language                   13
Section 8.2       Headings                                    13
Section 8.3       Non-Alienation of Benefits                  13
Section 8.4       Indemnification                             13
Section 8.5       Severability                                13
Section 8.6       Waiver                                      14
Section 8.7       Governing Law                               14
Section 8.8       Taxes                                       14
Section 8.9       No Deposit Account                          14
Section 8.10      No Right to Continued Employment            14
Section 8.11      Status of Plan Under ERISA                  14


                                     (iii)



<PAGE>


                            BENEFIT RESTORATION PLAN
                            ------------------------

                                       OF
                                       --

                            WESTFIELD FINANCIAL, INC.
                            -------------------------

                                    ARTICLE I
                                    ---------

                                   DEFINITIONS
                                   -----------

                  Wherever appropriate to the purposes of the Plan, capitalized
terms shall have the meanings assigned to them under the Savings Plan or ESOP,
as applicable; provided, however, that the following special definitions shall
apply for purposes of the Plan, unless a different meaning is clearly indicated
by the context:

                  Section 1.1 Affiliated Employer means any corporation which is
                              -------------------
a member of a controlled group of corporations (as defined in section 414(b) of
the Code) that includes the Company; any trade or business (whether or not
incorporated) that is under common control (as defined in section 414(c) of the
Code) with the Company; any organization (whether or not incorporated) that is a
member of an affiliated service group (as defined in section 414(m) of the Code)
that includes the Company; any leasing organization (as defined in section
414(n) of the Code) to the extent that any of its employees are required
pursuant to section 414(n) of the Code to be treated as employees of the
Company; and any other entity that is required to be aggregated with the Company
pursuant to regulations under section 414(o) of the Code.

                  Section 1.2 Applicable Limitation means any of the following:
                              ---------------------
(a) the limitation on annual compensation that may be recognized under a
tax-qualified plan for benefit computation purposes pursuant to section
401(a)(17) of the Code; (b) the maximum limitation on annual additions to a
tax-qualified defined contribution plan pursuant to section 415(c) of the Code;
(c) the maximum limitation on aggregate annual benefits and annual additions
under a combination of tax-qualified defined benefit and defined contribution
plans maintained by a single employer pursuant to section 415(e) of the Code;
(d) the maximum limitation on annual elective deferrals to a qualified cash or
deferred arrangement pursuant to section 402(g) of the Code; (e) the annual
limitation on elective deferrals under a qualified cash or deferred arrangement
by highly compensated employees pursuant to section 401(k) of the Code; and (f)
the annual limitation on voluntary employee contributions by, and employer
matching contributions for, highly compensated employees pursuant to section
401(m) of the Code.

                  Section 1.3 Bank means Westfield Bank and its successors or
                              ----
assigns.

                  Section 1.4 Beneficiary means any person, other than a
                              -----------
Participant or Former Participant, who is determined to be entitled to benefits
under the terms of the Plan.



<PAGE>



                  Section 1.5 Board means the Board of Directors of Company.
                              -----

                  Section 1.6 Code means the Internal Revenue Code of 1986
                              ----
(including the corresponding provisions of any prior law or succeeding law).

                  Section 1.7 Committee means the Compensation Committee of the
                              ---------
Board of Directors of the Company, or such other person, committee or other
entity as shall be designated by or on behalf of the Board to perform the duties
set forth in Article VI.

                  Section 1.8 Company means Westfield Financial, Inc., a
                              -------
Massachusetts corporation, and any successor thereto.

                  Section 1.9 Eligible Employee means an Employee who is
                              -----------------
eligible for participation in the Plan in accordance with the provisions of
Article II.

                  Section 1.10 Employee means any person, including an officer,
                               --------
who is employed by the Employer.

                  Section 1.11 Employer means the Bank and any successor thereto
                               --------
and the Company and any successor thereto and any Affiliated Employer which,
with the prior written approval of the Board of Directors of the Bank and
subject to such terms and conditions as may be imposed by the Board, shall adopt
this Plan.

                  Section 1.12 Employer Contributions means contributions (other
                               ----------------------
than pursuant to a compensation reduction agreement) by any Employer to the
Savings Plan or the ESOP.

                  Section 1.13 ERISA means the Employee Retirement Income
                               -----
Security Act of l974, as amended from time to time (including the corresponding
provisions of any succeeding law).

                  Section 1.14 ESOP means the Employee Stock Ownership Plan of
                               ----
Westfield Financial, Inc., as amended from time to time (including the
corresponding provisions of any successor qualified employee stock ownership
plan adopted by the Company).

                  Section 1.15 Exchange Act means the Securities Exchange Act of
                               ------------
1934, as amended from time to time (including the corresponding provisions of
any succeeding law).

                  Section 1.16 Fair Market Value of a Share means, with respect
                               ----------------------------
to a Share on a specified date:


                  (a) the final reported sales price on the date in question (or
         if there is no reported sale on such date, on the last preceding date
         on which any reported sale occurred) as reported in the principal
         consolidated reporting system with respect to securities listed or
         admitted to trading on the principal United States securities exchange
         on which the Shares are listed or admitted to trading; or



                                       2

<PAGE>



                  (b) if the Shares are not listed or admitted to trading on any
         such exchange, the closing bid quotation with respect to a Share on
         such date on the National Association of Securities Dealers Automated
         Quotations System, or, if no such quotation is provided, on another
         similar system, selected by the Committee, then in use; or

                  (c) if sections 1.16(a) and (b) are not applicable, the fair
         market value of a Share as the Committee may determine.

                  Section 1.17 Former Participant means a person whose
                               ------------------
participation in the Plan has terminated as provided under section 2.3.

                  Section 1.18 Savings Plan means the tax-qualified 401(k) plan
                               ------------
maintained by the Company or the Bank from time to time.

                  Section 1.19 Participant means any person who is participating
                               -----------
in the Plan in accordance with its terms.

                  Section 1.20 Plan means the Benefit Restoration Plan of
                               ----
Westfield Financial, Inc. as amended from time to time (including the
corresponding provisions of any successor plan adopted by the Company).

                  Section 1.21 Share means a share of common stock, par value
                               -----
$.01 per share, of Westfield Financial, Inc.

                  Section 1.22 Stock Unit means a right to receive a payment
                               ----------
under the Plan in an amount equal, on the date as of which such payment is
valued, to the Fair Market Value of a Share.

                  Section 1.23 Termination of Service means an Employee's
                               ----------------------
separation from service with all Employers as an Employee, whether by
resignation, discharge, death, disability, retirement or otherwise.

                                   ARTICLE II
                                   ----------

                                  PARTICIPATION
                                  -------------

                  Section 2.1 Eligibility for Participation.
                              ------------------------------

                  Only Eligible Employees may become Participants. An Employee
shall become an Eligible Employee if:

                  (a) he has been designated an Eligible Employee by resolution
        of the Board; and



                                       3

<PAGE>



                  (b) he is a participant in the Savings Plan or the ESOP, or
           any combination thereof, and the benefits to which he is entitled
           thereunder are limited by one or more of the Applicable Limitations;

provided, however, that no person shall be named an Eligible Employee, nor shall
any person who has been an Eligible Employee continue as an Eligible Employee,
to the extent that such person's participation, or continued participation, in
the Plan would cause the Plan to fail to be considered maintained for the
primary purpose of providing deferred compensation for a select group of
management or highly compensated employees for purposes of ERISA.

                  Section 2.2 Commencement of Participation.
                              ------------------------------

                  An Employee shall become a Participant on the date when he
first becomes an Eligible Employee, unless the Committee shall, by resolution,
establish an earlier or later effective date of participation for a Participant.

                  Section 2.3 Termination of Participation.
                              -----------------------------

                  Participation in the Plan shall cease on the earlier of (a)
the date of the Participant's Termination of Service or (b) the date on which he
ceases to be an Eligible Employee.

                                   ARTICLE III
                                   -----------

                            BENEFITS TO PARTICIPANTS
                            ------------------------

                  Section 3.1 Supplemental Savings Benefit.
                              -----------------------------

                  (a) A Participant whose benefits under the Savings Plan are
limited by one or more of the Applicable Limitations shall be eligible for a
supplemental savings benefit under this Plan in an amount equal to:

                           (i) the aggregate amount of Employer Contributions
           (including any reallocation of amounts forfeited upon the termination
           of employment of others participating in the Savings Plan) that would
           have been credited to the Participant's account under the Savings
           Plan in the absence of the Applicable Limitations if for all relevant
           periods he had made the maximum amount of elective deferrals, within
           the meaning of section 402(g)(3) of the Code, or voluntary employee
           contributions, within the meaning of section 401(a) of the Code,
           required to qualify for the maximum possible allocation of Employer
           Contributions (and without regard to the amount of elective deferrals
           or voluntary employee contributions actually made); over



                                       4

<PAGE>


                           (ii) the aggregate amount of Employer Contributions
         (including any reallocation of amounts forfeited upon the termination
         of employment of others participating in the Savings Plan) actually
         credited to the Participant's account under the Savings Plan for such
         periods;

adjusted for earnings and losses as provided in section 3.1(b); provided,
however, that if the Participant dies before the payment of such supplemental
savings benefit begins, no benefit shall be payable under this section 3.1 and
the survivor benefit, if any, which may be payable shall be determined under
section 4.1.

                  (b) The Committee shall cause to be maintained a bookkeeping
account to reflect all Employer Contributions (including any reallocation of
amounts forfeited upon the termination of employment of others participating in
the Savings Plan) that cannot be made to a Participant's account under the
Savings Plan due to the Applicable Limitations and shall cause such bookkeeping
account to be credited with all such Employer Contributions as of the date on
which such Employer Contributions would have been credited to the Participant's
account in the Savings Plan in the absence of the Applicable Limitations. The
balance credited to such bookkeeping account shall be adjusted for earnings or
losses as follows:

                           (i) except as provided in section 3.1(b)(ii), the
         balance credited to such bookkeeping account shall be credited with
         interest as of the last day of each calendar month at a rate for such
         month equal to one-twelfth of the annual interest rate prescribed by
         the Commissioner of Internal Revenue for such month pursuant to section
         417(e) of the Code; or

                           (ii) if and to the extent permitted by the Committee,
         as though such Employer Contributions had been contributed to a trust
         fund and invested, for the benefit of the Participant, in such
         investments at such time or times as the Participant shall have
         designated in such form and manner as the Committee shall prescribe.

                  (c) The supplemental savings benefit payable to a Participant
hereunder shall be paid in a single lump sum as soon as practicable following
the last day of the calendar year in which the Participant's Termination of
Service occurs and shall be equal to the balance credited to his bookkeeping
account as of the last day of the last calendar month to end prior to the date
of payment. Notwithstanding the foregoing, a Participant may specify that such
supplemental savings benefit be paid in a different form or commencing at a
different time by filing a written election, in such form and manner as the
Committee may prescribe; provided, however, that no such election or change made
thereto shall be given effect unless it is made prior to the Participant's
commencement of participation.

                  Section 3.2 Supplemental ESOP Benefits.
                              ---------------------------

                  (a) A Participant whose benefits under the ESOP are limited by
one or more of the Applicable Limitations shall be eligible for a supplemental
ESOP benefit under this Plan in an amount equal to the sum of:



                                       5

<PAGE>


                           (i) a number of Stock Units equal to the excess (if
         any) of (A) the aggregate number of Shares (including any reallocation
         of Shares forfeited upon the termination of employment of others
         participating in the ESOP) that would have been credited to the
         Participant's account under the ESOP in the absence of the Applicable
         Limitations over (B) the number of Shares actually credited to his
         account under the ESOP; plus

                           (ii) if and to the extent that Employer Contributions
         to the ESOP result in allocations to the Participant's account of
         assets other than Shares, an amount equal to the excess (if any) of (A)
         the aggregate amount of Employer Contributions (including any
         reallocation of amounts forfeited upon the termination of employment of
         others participating in the ESOP) that would have been credited to the
         Participant's account under the ESOP in the absence of the Applicable
         Limitations over (B) the aggregate amount of Employer Contributions
         (including any reallocation of amounts forfeited upon the termination
         of employment of others participating in the ESOP) actually credited to
         the Participant's account under the ESOP;

adjusted for earnings and losses as provided section 3.2(b); provided, however,
that if the Participant dies before the payment of such supplemental ESOP
benefit begins, no benefit shall be payable under this section 3.2 and the
survivor benefit, if any, which may be payable shall be determined under section
4.2.

                  (b) The Committee shall cause to be maintained a bookkeeping
account to reflect all Shares and Employer Contributions (including any
reallocation of amounts forfeited upon the termination of employment of others
participating in the ESOP) that cannot be allocated to a Participant's account
under the ESOP due to the Applicable Limitations and shall cause such
bookkeeping account to be credited with such Employer Contributions and Stock
Units reflecting such Shares as of the date on which such Employer Contributions
and Shares, respectively, would have been credited to the Participant's account
in the ESOP in the absence of the Applicable Limitations. The balance credited
to such bookkeeping account shall be adjusted for earnings or losses as follows:

                           (i) all Stock Units shall be adjusted from time to
         time so that the value of a Stock Unit on any date is equal to the Fair
         Market Value of a Share on such date, and the number of Stock Units
         shall be adjusted as and when appropriate to reflect any stock
         dividend, stock split, reverse stock split, exchange, conversion, or
         other event generally affecting the number of Shares held by all
         holders of Shares; and

                           (ii) (A) except as provided in section 3.2(b)(ii)(B),
         the balance credited to such bookkeeping account that does not consist
         of Stock Units shall be credited with interest as of the last day of
         each calendar month at a rate for such month equal to one-twelfth of
         the annual interest rate prescribed by the Commissioner of Internal
         Revenue for such month pursuant to section 417(e) of the Code; or


                                       6

<PAGE>

                           (B) if and to the extent permitted by the Committee,
         the balance credited to such bookkeeping account that does not consist
         of Stock Units shall be adjusted as though such Employer Contributions
         had been contributed to a trust fund and invested, for the benefit of
         the Participant, in such investments at such time or times as the
         Participant shall have designated in such form and manner as the
         Committee shall prescribe;

provided, however, that to the extent that the Participant shall receive on a
current basis any dividend paid with respect to Shares credited to his account
under the ESOP, the bookkeeping account established for him under this Plan
shall not be adjusted to reflect such dividend and, instead, the Participant
shall be paid an amount per Stock Unit equal to the dividend per Share received
by the Participant under the ESOP, at substantially the same time as such
dividend is paid under the ESOP.

                  (c) The supplemental ESOP benefit payable to a Participant
hereunder shall be paid in a single lump sum cash payment as soon as practicable
following the last day of the calendar year in which the Participant's
Termination of Service occurs and shall be in an amount equal to the balance
credited to his bookkeeping account. Notwithstanding the foregoing, a
Participant may specify that such supplemental ESOP benefit be paid in a
different form or commencing at a different time by filing a written election,
in such form and manner as the Committee may prescribe; provided, however, that
no such election or change made thereto shall be given effect unless it is made
at least twelve months prior to the Participant's Termination of Service.

                  Section 3.3 Restored ESOP Benefits.
                              -----------------------

                  (a) A Participant who satisfies section 2.1 shall be entitled
to, upon his Termination of Service upon or after attaining age 55, an unfunded,
unsecured promise from the Company to receive an amount determined by:

                           (i) projecting the total number of Shares that would
         have been allocated to the Participant's account under the terms of the
         ESOP (without regard to the Applicable Limitations) had the Participant
         continued in the employ of the Bank until the ESOP loan was repaid in
         full and the final allocation of Shares acquired when the ESOP loan was
         made occurred; and then

                           (ii) multiplying the number of Shares determined in
         section 3.3(a)(i) above by the average of the closing prices of such
         Shares at the end of each fiscal quarter during the four fiscal
         quarters immediately preceding (or such fewer quarters as the
         Participant has been a Participant) the Participant's Termination of
         Service.

                  (b) The projection of Shares required by section 3.3(a)(i)
above shall be performed by a public accountant or other third party selected by
the Committee based on assumptions which the Committee has approved as
reasonable at the time the calculation of the benefit payable to the Participant
is performed.

                  (c) The restored ESOP benefit payable to a Participant
hereunder shall be paid in a single lump sum cash payment as soon as practicable
following the last day of the calendar year


                                       7

<PAGE>

in which the Participant's Termination of Service occurs and shall be in an
amount determined pursuant to section 3.3(a) above. Notwithstanding the
foregoing, a Participant may specify that such restored ESOP benefit be paid in
a different form or commencing at a different time by filing a written election,
in such form and manner as the Committee may prescribe; provided, however, that
no such election or change made thereto shall be given effect unless it is made
prior to the Participant's commencement of participation.

                                   ARTICLE IV
                                   ----------

                                 DEATH BENEFITS
                                 --------------

                  Section 4.1 Supplemental Savings Plan Death Benefits.
                              -----------------------------------------

                  If a Participant who is eligible for a supplemental savings
benefit under section 3.1 dies before the payment of such benefit begins, a
supplemental savings benefit shall be payable to the Participant's Beneficiary
under this Plan in amount equal to the balance credited to the bookkeeping
account established for the Participant under section 3.1(b). Such benefit shall
be paid in a single lump sum payment as soon as practicable following the death
of the Participant and the bookkeeping account established for such Participant
pursuant to section 3.1(b) shall continue to be adjusted as provided therein
through the last day of the last calendar month to end prior to the date of
payment.

                  Section 4.2 Supplemental ESOP Death Benefits.
                              ---------------------------------

                  If a Participant who is eligible for a supplemental ESOP
benefit under section 3.2 dies before the payment of such benefit begins, a
supplemental ESOP benefit shall be payable to the Participant's Beneficiary
under this Plan in amount equal to the balance credited to the bookkeeping
account established for the Participant under section 3.2(b). Such benefit shall
be paid in a single lump sum payment as soon as practicable following the death
of the Participant, and the bookkeeping account established for such Participant
pursuant to section 3.2(b) shall continue to be adjusted as provided therein
through the last day of the last calendar month to end prior to the date of
payment.

                  Section 4.3 Restored ESOP Death Benefits.
                              -----------------------------

                  If a Participant who is eligible for a restored ESOP benefit
under section 3.3 (or would be eligible for such a benefit if he terminated
employment) dies before the payment of such benefit begins, a restored ESOP
benefit shall be payable to the Participant's Beneficiary under this Plan in
amount determined pursuant to section 3.3(b). Such benefit shall be paid in a
single lump sum payment as soon as practicable following the death of the
Participant.

                  Section 4.4 Beneficiaries.
                              --------------

                  A Participant or Former Participant may designate a
Beneficiary or Beneficiaries to receive any death benefits payable under the
Plan upon his death. Any such designation, or change therein or revocation
thereof, shall be made in writing in the form and manner prescribed by the



                                       8

<PAGE>

Committee, shall be revocable until the death of the Participant, and shall
thereafter be irrevocable; provided, however, that any change or revocation
shall be effective only if received by the Committee prior to the Participant's
or Former Participant's death. If a Participant or Former Participant shall die
without having effectively named a Beneficiary, he shall be deemed to have named
his estate as his sole Beneficiary. If a Participant or Former Participant and
his designated Beneficiary shall die in circumstances which give rise to doubt
as to which of them shall have been the first to die, the Participant or Former
Participant shall be deemed to have survived the Beneficiary. If a Participant
or Former Participant designates more than one Beneficiary, all shall be deemed
to have equal shares unless the Participant or Former Participant shall
expressly provide otherwise.

                                    ARTICLE V
                                    ---------

                                   TRUST FUND
                                   ----------

                  Section 5.1 Establishment of Trust.
                              -----------------------

                  The Company may establish a trust fund which may be used to
accumulate funds to satisfy benefit liabilities to Participants, Former
Participants and their Beneficiaries under the Plan; provided, however, that the
assets of such trust shall be subject to the claims of the creditors of the
Company in the event that it is determined that the Company is insolvent; and
provided, further, that the trust agreement shall contain such terms, conditions
and provisions as shall be necessary to cause the Company to be considered the
owner of the trust fund for federal, state or local income tax purposes with
respect to all amounts contributed to the trust fund or any income attributable
to the investments of the trust fund. The Company shall pay all costs and
expenses incurred in establishing and maintaining such trust. Any payments made
to a Participant, Former Participant or Beneficiary from a trust established
under this section 5.1 shall offset payments which would otherwise be payable by
the Company in the absence of the establishment of such trust. Any such trust
will conform to the terms of the model trust described in Revenue Procedure
92-64, as the same may be modified from time to time.

                  Section 5.2 Contributions to Trust.
                              -----------------------

                  If a trust is established in accordance with section 5.1, the
Company shall make contributions to such trust in such amounts and at such times
as may be specified by the Committee or as may be required pursuant to the terms
of the agreement governing the establishment and operation of such trust.

                  Section 5.3 Unfunded Character of Plan.
                              ---------------------------

                  Notwithstanding the establishment of a trust pursuant to
section, the Plan shall be unfunded for purposes of the Code and ERISA. Any
liability of the Bank, the Company or another Employer to any person with
respect to benefits payable under the Plan shall be based solely upon such
contractual obligations, if any, as shall be created by the Plan, and shall give
rise only to a claim against the general assets of the Bank, the Company or such
Employer. No such liability shall be



                                       9

<PAGE>


deemed to be secured by any pledge or any other encumbrance on any specific
property of the Bank, the Company or any other Employer.

                                   ARTICLE VI
                                   ----------

                                 ADMINISTRATION
                                 --------------

                  Section 6.1 The Committee.
                              --------------

                  Except for the functions reserved to the Bank or the Board,
the administration of the Plan shall be the responsibility of the Committee. The
Committee shall have the power and the duty to take all actions and to make all
decisions necessary or proper to carry out the Plan. The determination of the
Committee as to any question involving the general administration and
interpretation of the Plan shall be final, conclusive and binding. Any
discretionary actions to be taken under the Plan by the Committee shall be
uniform in their nature and applicable to all persons similarly situated.
Without limiting the generality of the foregoing, the Committee shall have the
following powers:

                  (a) to furnish to all Participants, upon request, copies of
         the Plan and to require any person to furnish such information as it
         may request for the purpose of the proper administration of the Plan as
         a condition to receiving any benefits under the Plan;

                  (b) to make and enforce such rules and regulations and
         prescribe the use of such forms as it shall deem necessary for the
         efficient administration of the Plan;

                  (c) to interpret the Plan, and to resolve ambiguities,
         inconsistencies and omissions, and the determinations of the Committee
         in respect thereof shall be binding, final and conclusive upon all
         interested parties;

                  (d) to decide on questions concerning the Plan in accordance
         with the provisions of the Plan;

                  (e) to determine the amount of benefits which shall be payable
         to any person in accordance with the provisions of the Plan, to hear
         and decide claims for benefits, and to provide a full and fair review
         to any Participant whose claim for benefits has been denied in whole or
         in part;

                  (f) to designate a person, who may or may not be a member of
         the Committee, as "plan administrator" for purposes of the ERISA;

                  (g) to allocate any such powers and duties to or among
         individual members of the Committee; and


                  (h) the power to designate persons other than Committee
         members to carry out any duty or power which would otherwise be a
         responsibility of the Committee or Administrator, under the terms of
         the Plan.




                                       10

<PAGE>

                  Section 6.2 Liability of Committee Members and their Delegates
                              --------------------------------------------------

                  To the extent permitted by law, the Committee and any person
to whom it may delegate any duty or power in connection with administering the
Plan, the Bank, the Company, any Employer, and the officers and directors
thereof, shall be entitled to rely conclusively upon, and shall be fully
protected in any action taken or suffered by them in good faith in the reliance
upon, any actuary, counsel, accountant, other specialist, or other person
selected by the Committee, or in reliance upon any tables, valuations,
certificates, opinions or reports which shall be furnished by any of them.
Further, to the extent permitted by law, no member of the Committee, nor the
Bank, the Company, any Employer, nor the officers or directors thereof, shall be
liable for any neglect, omission or wrongdoing of any other members of the
Committee, agent, officer or employee of the Bank, the Company or any Employer.
Any person claiming benefits under the Plan shall look solely to the Employer
for redress.

                  Section 6.3 Plan Expenses
                              -------------

                  All expenses that shall arise in connection with the
administration of the Plan (including, but not limited to administrative
expenses, proper charges and disbursements, compensation and other expenses and
charges of any actuary, counsel, accountant, specialist, or other person who
shall be employed by the Committee in connection with the administration of the
Plan), shall be paid by the Company.

                  Section 6.4 Facility of Payment.
                              --------------------

                  If the Company is unable to make payment to any Participant,
Former Participant Beneficiary, or any other person to whom a payment is due
under the Plan, because it cannot ascertain the identity or whereabouts of such
Participant, Former Participant Beneficiary, or other person after reasonable
efforts have been made to identify or locate such person (including a notice of
the payment so due mailed to the last known address of such Participant, Former
Participant Beneficiary, or other person shown on the records of the Employer),
such payment and all subsequent payments otherwise due to such Participant,
Former Participant, Beneficiary or other person shall be forfeited 24 months
after the date such payment first became due; provided, however, that such
payment and any subsequent payments shall be reinstated, retroactively, without
interest or other investment return attributable to the intervening period no
later than 60 days after the date on which the Participant, Former Participant,
Beneficiary, or other person is identified or located.


                                       11

<PAGE>

                                   ARTICLE VII
                                   -----------

                            AMENDMENT AND TERMINATION
                            -------------------------

                  Section 7.1 Amendment by the Company.
                              -------------------------

                  The Company reserves the right, in its sole and absolute
discretion, at any time and from to time, by action of the Board, to amend the
Plan in whole or in part. In no event, however, shall any such amendment
adversely affect the right of any Participant, Former Participant or Beneficiary
to receive any benefits under the Plan in respect of participation for any
period ending on or before the later of the date on which such amendment is
adopted or the date on which it is made effective.

                  Section 7.2 Termination.
                              ------------

                  The Company also reserves the right, in its sole and absolute
discretion, by action of the Board, to terminate the Plan. In such event,
undistributed benefits attributable to participation prior to the date of
termination shall be distributed as though each Participant terminated
employment with the Bank, the Company and all other Employers as of the
effective date of termination of the Plan.

                  Section 7.3 Amendment or Termination by Other Employers.
                              --------------------------------------------

                  In the event that a corporation or trade or business other
than the Bank shall adopt this Plan, such corporation or trade or business
shall, by adopting the Plan, empower the Bank to amend or terminate the Plan,
insofar as it shall cover employees of such corporation or trade or business,
upon the terms and conditions set forth in sections 7.1 and 7.2; provided,
however, that any such corporation or trade or business may, by action of its
board of directors or other governing body, amend or terminate the Plan, insofar
as it shall cover employees of such corporation or trade or business, at
different times and in a different manner. In the event of any such amendment or
termination by action of the board of directors or other governing body of such
a corporation or trade or business, a separate plan shall be deemed to have been
established for the employees of such corporation or trade or business, and any
amounts set aside to provide for the satisfaction of benefit liabilities with
respect to Employees of such corporation or trade or business shall be
segregated from the assets set aside for the purposes of this Plan at the
earliest practicable date and shall be dealt with in accordance with the
documents governing such separate plan.



                                       12

<PAGE>

                                  ARTICLE VIII
                                  ------------

                            MISCELLANEOUS PROVISIONS
                            ------------------------

                  Section 8.1 Construction and Language.
                              --------------------------

                  Wherever appropriate in the Plan, words used in the singular
may be read in the plural, words in the plural may be read in the singular, and
words importing the masculine gender shall be deemed equally to refer to the
feminine or the neuter. Any reference to an Article or section shall be to an
Article or section of the Plan, unless otherwise indicated.

                  Section 8.2 Headings.
                              ---------

                  The headings of Articles and sections are included solely for
convenience of reference. If there is any conflict between such headings and the
text of the Agreement, the text shall control.

                  Section 8.3 Non-Alienation of Benefits.
                              ---------------------------

                  Except as may otherwise be required by law, no distribution or
payment under the Plan to any Participant, Former Participant or Beneficiary
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, whether voluntary or involuntary, and
any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber
or charge the same shall be void; nor shall any such distribution or payment be
in any way liable for or subject to the debts, contracts, liabilities,
engagements or torts of any person entitled to such distribution or payment. If
any Participant, Former Participant or Beneficiary is adjudicated bankrupt or
purports to anticipate, alienate, sell, transfer, assign, pledge encumber or
charge any such distribution or payment, voluntarily or involuntarily, the
Committee, in its sole discretion, may cancel such distribution or payment or
may hold or cause to be held or applied such distribution or payment, or any
part thereof, to or for the benefit of such Participant, Former Participant or
Beneficiary, in such manner as the Committee shall direct; provided, however,
that no such action by the Committee shall cause the acceleration or deferral of
any benefit payments from the date on which such payments are scheduled to be
made.

                  Section 8.4 Indemnification.
                              ----------------

                  The Bank shall indemnify, hold harmless and defend each
Participant, Former Participant and Beneficiary, against their reasonable costs,
including legal fees, incurred by them or arising out of any action, suit or
proceeding in which he may be involved, as a result of his efforts, in good
faith, to defend or enforce the obligation of the Bank, the Company and any
other Employer under the terms of the Plan.

                  Section 8.5 Severability.
                              -------------

                  A determination that any provision of the Plan is invalid or
unenforceable shall not affect the validity or enforceability of any other
provision hereof.


                                       13

<PAGE>

                  Section 8.6 Waiver.
                              -------

                  Failure to insist upon strict compliance with any of the
terms, covenants or conditions of the Plan shall not be deemed a waiver of such
term, covenant or condition. A waiver of any provision of the Plan must be made
in writing, designated as a waiver, and signed by the party against whom its
enforcement is sought. Any waiver or relinquishment of any right or power
hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.

                  Section 8.7 Governing Law.
                              --------------

                  The Plan shall be construed, administered and enforced
according to the laws of the Commonwealth of Massachusetts without giving effect
to the conflict of laws principles thereof, except to the extent that such laws
are preempted by the federal laws of the United States. Any payments made
pursuant to this Plan are subject to and conditioned upon their compliance with
12 U.S.C. ss. 1828(k) and any regulations promulgated thereunder.

                  Section 8.8 Taxes.
                              ------

                  The Employer shall have the right to retain a sufficient
portion of any payment made under the Plan to cover the amount required to be
withheld pursuant to any applicable federal, state and local tax law.

                  Section 8.9 No Deposit Account.
                              -------------------

                  Nothing in this Plan shall be held or construed to establish
any deposit account for any Participant or any deposit liability on the part of
the Bank. Participants' rights hereunder shall be equivalent to those of a
general unsecured creditor of each Employer.

                  Section 8.10 No Right to Continued Employment.
                               ---------------------------------

                  Neither the establishment of the Plan, nor any provisions of
the Plan nor any action of the Plan Administrator, the Committee or any Employer
shall be held or construed to confer upon any Employee any right to a
continuation of employment by the Employer. The Employer reserves the right to
dismiss any Employee or otherwise deal with any Employee to the same extent as
though the Plan had not been adopted.

                  Section 8.11 Status of Plan Under ERISA.
                               ---------------------------

                  The Plan is intended to be (a) to the maximum extent permitted
under applicable laws, an unfunded, non-qualified excess benefit plan as
contemplated by section 3(36) of ERISA for the purpose of providing benefits in
excess of the limitations imposed under section 415 of the Code, and (b) to the
extent not so permitted, an unfunded, non-qualified plan maintained primarily
for the purpose of providing deferred compensation for highly compensated
employees, as contemplated by sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.
The Plan is not intended to comply with the requirements of section 401(a) of
the Code or to be subject to Parts 2, 3 and 4 of Title I of ERISA. The Plan
shall be administered and construed so as to effectuate this intent.

                                       14