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                                                                    Exhibit 10.6


                              MASSBANK FOR SAVINGS
              TERMS AND CONDITIONS OF DEFERRED COMPENSATION PROGRAM
              -----------------------------------------------------


     1.   Eligibility in the Program shall be limited to the employees of the
MASSBANK for Savings (the "Bank") whose Taxable Compensation exceeds the IRC
Section 401(a)(17) annual compensation limit (the "Participants").

     2.   (a)  Each Participant who is actively employed by the Bank on October
               31, beginning October 31, 1994, shall receive a deferred
               compensation award in an amount equal to 20% of his Taxable
               Compensation during the prior twelve-month period that is in
               excess of the IRC Section 401(a)(17) annual compensation limit.
               All amounts awarded to a Participant under this Paragraph 2(a)
               shall be credited to a separate book account (a "Deferred
               Compensation Account") in his name as of October 31 of each year.

          (b)  The term "Taxable Compensation" shall mean the eligible
               Participant's annual compensation paid by the Bank and recognized
               as such under the Bank's qualified retirement plan ("SBERA"), but
               without regard to the IRC Section 401(a)(17) annual compensation
               limit or any indirect noncash compensation and contributions to
               this Program.

          (c)  The IRC Section 401(a)(17) annual compensation limit is $235,840
               for the year ending October 31, 1994, and $150,000 for the year
               ending October 31, 1995, as adjusted by the Secretary for
               increases in the cost-of-living in accordance with Section
               401(a)(17)(B) if the Internal Revenue Code of 1986, as amended.

     3.   The amount standing to the credit of a Participant's Deferred
Compensation Account shall be deemed invested in one or more the mutual funds
chosen by the Participant from time to time in accordance with such rules and
regulations adopted by the Administrator. From time to time and no less often
than once a year, the amount standing to the credit of a Participant's Deferred
Compensation Account shall be adjusted on an equitable basis for deemed earnings
or losses. The reasonable determination of such adjustment by the Administrator
shall be conclusive and binding on all Participants and their beneficiaries.

     4.   During his period of active employment, no Participant shall have any
rights to the amounts which he has been awarded hereunder. Participation in the
Program, and any actions taken pursuant to the Program, shall not create or be
deemed to create a trust or fiduciary relationship of any kind between the Bank
and the Participant. The Bank may, but shall have no obligation to, establish
any separate fund, reserve, or escrow or to provide security with respect to any
amounts awarded under the Plan. Any assets of the Bank which are set aside in
any separate fund, reserve or escrow shall continue for all purposes to be a
part of the general assets of the Bank, with title to the beneficial ownership
of any such assets remaining at all times in the Bank. No Participant, his legal
representatives, or any of his beneficiaries shall have any right, other than
the right of an unsecured general creditor of the Bank, in respect of the
Deferred Compensation Account established hereunder, and such persons shall have
no property interest whatsoever in any specific assets of the Bank.

     5.   (a)  Except as otherwise provided in Paragraph 6 below, upon the
               termination of a Participant's employment with the Bank, the
               Participant shall be entitled to receive a percentage of the
               amount standing to the credit of his Deferred Compensation
               Account. Such percentage shall be calculated according to the
               vesting schedule provided in SBERA.


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          (b)  Such payment shall be made within 60 days of the Participant's
               termination of employment. The vested amount standing to the
               credit of the Participant's Deferred Compensation Account as of
               the preceding October 31 shall be adjusted for earnings or losses
               based on the total investment return on the Participant's
               investment choice from November 1 of the year of termination
               until the end of the month immediately preceding the date of
               distribution. Such payment shall completely discharge the Bank's
               obligation under the Program and the Participant shall forfeit
               the non-vested portion of his Deferred Compensation Account. The
               Board of Directors of the Bank (the "Board") shall have full
               power and discretion to award additional vesting to any
               Participant.

     6.   Notwithstanding anything to the contrary contained herein, in the
event of a good faith determination by the Board that a Participant (a)
committed fraud in respect of any matter involving the Bank in any respect
whatsoever, (b) misappropriated an asset or assets of the Bank, whether tangible
or intangible, (c) committed gross misconduct, or (d) has been convicted of a
crime involving moral turpitude, then the Participant shall immediately forfeit
all rights to amounts credited to such Participant's Deferred Compensation
Account, and the Participant, his estate, or beneficiaries shall have no further
rights with respect thereto or any claims against the Bank under this Program.

     7.   Any distribution of deferred compensation payments will be reduced by
the amounts required to be withheld pursuant to any governmental law or
regulation with respect to taxes or similar provisions.

     8.   If a Participant who has deferred compensation under the Program dies
before he has received full payment of the amount credited to his account, such
unpaid portion shall be paid to the Participant's beneficiary as designated by
the Participant in writing. If no beneficiary has been designated or if a
designated beneficiary has predeceased the Participant, such unpaid portion
shall be paid to the Participant's surviving spouse, if any; otherwise to the
Participant's estate.

     9.   The deferred compensation payable under this Program shall not be
subject to alienation, assignment, garnishment, execution, or levy of any kind,
and any attempt to cause any compensation to be so subjected shall not be
recognized.

     10.  All expenses incurred, or taxes paid by the Bank, and attributable to
a Participant's Deferred Compensation Account shall be borne by the Bank and
shall not reduce the amount credited to such Deferred Compensation Account.

     11.  Nothing in this Program shall be construed as giving any Participant
the right to be retained in the employ of the Bank in any capacity. The Bank
expressly reserves the right to dismiss any employee, at any time, without
liability for the effect which such dismissal may have upon such employee
hereunder.

     12.  This Program may be amended in any way or may be terminated, in whole
or in part, at any time, and from time to time, by the Board. The foregoing
provisions of this paragraph notwithstanding, no amendment or termination of the
Program shall adversely affect the amounts payable hereunder on account of
compensation awarded under the Program prior to the effective date of such
amendment or termination.




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     13.  The Board shall delegate the administration of this Program to an
individual who shall serve as the Administrator. The Administrator shall have
full power and authority to interpret, construe, and administer this Program,
and the Administrator's interpretations and construction thereof, and actions
hereunder, including any determination of any amount credited or charged to the
Participant's Deferred Compensation Account or the amount or recipient of any
payment to be made therefrom, shall be binding and conclusive on all persons for
all purposes.

     14.  All notices, elections, or designations by a Participant to the Bank
shall be delivered in person or by registered mail, postage prepaid, and noted
to be brought to the attention of the Administrator.

     15.  The terms of this Program shall be binding upon and shall inure to the
benefit of the Bank and its successors or assigns and each Participant and his
beneficiaries, heirs, executors, and administrators.

     16.  Subject to its obligation to pay the amount credited to the
Participant's Deferred Compensation Account at the time distribution is called,
neither the Bank, any person acting on behalf of the Bank nor the Administrator
shall be liable for any act performed or the failure to perform any act with
respect to the terms of the Program, except in the event that there has been a
judicial determination of willful misconduct on the part of the Bank, such
person or the Administrator.

     17.  This Program, and all actions taken hereunder, shall be governed by
and construed in accordance with the laws of the Commonwealth of Massachusetts,
except as such laws may be superseded by any applicable Federal laws.

     18.  This Program shall be effective as of October 31, 1994.

     19.  (a)  All claims for benefits under this Program shall be filed in
               writing with the Administrator in accordance with such procedures
               as the Administrator shall reasonably establish.

          (b)  The Administrator shall, within 90 days of submission of a claim,
               provide adequate notice in writing to any claimant whose claim
               for benefits under the Program has been denied. Such notice shall
               contain the specific reason or reasons for the denial and
               references to specific Program provisions on which the denial is
               based. The Administrator shall also provide the claimant with a
               description of any material or information which is necessary in
               order for the claimant to perfect his claim and an explanation of
               why such information is necessary. If special circumstances
               require an extension of time for processing the claim, the
               Administrator shall furnish the claimant a written notice of such
               extension prior to the expiration of the 90-day period. The
               extension notice shall indicate the reasons for the extension and
               the expected date for a final decision, which date shall not be
               more than 180 days from the initial claim.

          (c)  The Administrator shall, upon written request by a claimant
               within 60 days of receipt of the notice that his claim has been
               denied, afford a reasonable opportunity to such claimant for a
               full and fair review by the Administrator of the decision denying
               the claim. The Administrator will afford the claimant an
               opportunity to review pertinent documents and submit issues and
               comments in writing. The claimant shall have the right to be
               represented.



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          (d)  The Administrator shall, within 60 days of receipt of a request
               for a review, render a written decision on his review. If special
               circumstances require extra time for the Administrator to review
               his decision, the Administrator will attempt to make his decision
               as soon as practicable, and in no event will the Administrator
               take more than 120 days to send the claimant a written notice of
               his decision.

     IN WITNESS WHEREOF, this Program has been signed and sealed for and on
behalf of the Bank by its duly authorized officer this 15th day of November,
1994.


                                                MASSBANK FOR SAVINGS





                                                /s/ Reginald E. Cormier
                                                --------------------------------
                                                Sr. Vice President, Treasurer
                                                And CFO




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