SEVERANCE AGREEMENT


     THIS  AGREEMENT  entered into this 25th day of February,  2002  ("Effective
Date"),  by and between  Central  Co-operative  Bank (the "Bank") and Michael K.
Devlin (the "Employee").

     WHEREAS,  the  Employee  has  heretofore  been  employed  by  the  Bank  as
Treasurer/Chief Financial Officer and Senior Vice President; and

     WHEREAS,  the Bank deems it to be in its best  interest  to enter into this
Agreement  as  additional  incentive to the Employee to continue as an executive
employee of the Bank; and

     WHEREAS,   the  parties   desire  by  this   writing  to  set  forth  their
understanding  as to their  respective  rights and  obligations  in the event of
termination of Employee's  employment under the  circumstances set forth in this
Agreement.

     NOW, THEREFORE, it is AGREED as follows:

     1.   Payment in the Event of Change in Control.
          ------------------------------------------

          (a) If the  Employee's  employment is terminated by the Bank,  without
the Employee's prior written  consent,  in connection with or within twelve (12)
months  after any change in control  (as herein  defined) of the Bank or Central
Bancorp, Inc. (the "Company"), the Employee shall be paid an amount equal to two
(2)  times  the  Employee's  annual  base  salary  amount  at the rate in effect
immediately  prior to the date of the change in control.  In no event,  however,
shall such amount  exceed the  difference  between (i) the product of 2.99 times
the  Employee's  "base amount" as defined in Section  280G(b)(3) of the Internal
Revenue  Code of 1986,  as amended  (the  "Code")  and  regulations  promulgated
thereunder,  and (ii) the sum of any other parachute  payments (as defined under
Section  280G(b)(2)  of the Code) that the  Employee  receives on account of the
change in  control.  Said sum shall be paid in one lump sum within ten (10) days
after  such  termination.  The  term  "change  in  control"  shall  mean (1) the
ownership,  holding  or power to vote more than 25% of the  voting  stock of the
Bank or the Company, (2) the control of the election of a majority of the Bank's
or the Company's directors, (3) the exercise of a controlling influence over the
management  or  policies  of the Bank or the Company by any person or by persons
acting as a "group"  (within  the  meaning  of Section  13(d) of the  Securities
Exchange  Act of 1934),  or (4)  during  any  period of two  consecutive  years,
individuals  who at the  beginning  of  such  period  constitute  the  Board  of
Directors of the Bank or the Company  (the  "Company  Board")  (the  "Continuing
Directors")  cease for any reason to  constitute  at least  two-thirds  thereof,
provided that any  individual  whose  election or  nomination  for election as a
member of the Company Board was approved by a vote of at least two-thirds of the
Continuing  Directors then in office shall be considered a Continuing  Director.
The term "person" means an individual other than the Employee, or a corporation,
partnership,   trust,   association,   joint  venture,  pool,  syndicate,   sole
proprietorship,  unincorporated  organization  or any other  form of entity  not
specifically listed herein.

          (b) The Employee may voluntarily  terminate his employment  under this
Agreement within twelve (12) months following a change in control of the Bank or
the
<PAGE>

Company,  and the  Employee  shall  thereupon be entitled to receive the payment
described in Section 1(a) of this  Agreement,  upon the occurrence of any of the
following  events,  or within ninety (90) days  thereafter,  which have not been
consented to in advance by the Employee in writing: (i) the requirement that the
Employee perform his principal executive functions,  more than 35 miles from his
primary office as of the Effective Date of this  Agreement;  (ii) a reduction in
the Employee's base annual salary as in effect  immediately  prior to the change
in control;  (iii) the  failure by the Bank to continue to provide the  Employee
with compensation and benefits substantially similar to those provided to him at
the time of the change in control  under any of the  employee  benefit  plans in
which the  Employee  becomes a  participant,  or the taking of any action by the
Bank which would  directly or indirectly  reduce in any material  respect any of
such benefits or deprive the Employee of any material  fringe benefit enjoyed by
him at the time of the change in control; (iv) the assignment to the Employee of
material duties and  responsibilities  other than those normally associated with
his position as referenced in the recitals above;  or (v) a material  diminution
or  reduction  in  the  Employee's   responsibilities  or  authority  (including
reporting responsibilities) in connection with his employment with the Bank.

          (c) The  Employee  shall not be required to mitigate the amount of any
payment  provided for in this Agreement by seeking other employment or otherwise
and no such payment shall be offset or reduced by the amount of any compensation
or benefits provided to the Employee in any subsequent employment.

     2.   Term.
          -----

          This Agreement shall remain in effect for the period commencing on the
Effective Date and ending on the earlier of (i) the date thirty-six months after
the  Effective  Date,  and  (ii)  the  date on  which  the  Employee  terminates
employment with the Bank;  provided that the Employee's  rights  hereunder shall
continue  following the termination of his employment with the Bank under any of
the  circumstances  described in  Paragraphs  1(a) or (b) hereof.  Additionally,
prior to each annual  anniversary date from the Effective Date, the term of this
Agreement shall be automatically  extended for a one-year period beyond the then
effective  expiration date,  unless written notice from the Bank or the Employee
is received  prior to an  anniversary  date  advising  the other party that this
Agreement  shall not be further  extended.  Any such  written  notice  shall not
affect any prior extensions of the term of this Agreement.

     3.   Expense Reimbursement.
          ----------------------

          In the event that any dispute arises between the Employee and the Bank
as to the terms or  interpretation  of this  Agreement,  whether  instituted  by
formal legal  proceedings  or otherwise,  including any action that the Employee
takes to enforce  the terms of this  Agreement  or to defend  against any action
taken by the Bank,  the Employee shall be reimbursed for all costs and expenses,
including reasonable attorneys' fees, arising from such dispute,  proceedings or
actions, provided that the Employee shall obtain a final non-appealable judgment
by  a  court  of  competent   jurisdiction  in  favor  of  the  Employee.   Such
reimbursement shall be paid within ten (10) days after the Employee furnishes to
the Bank written  evidence,  which may be in the form, among other things,  of a
cancelled check or receipt, of any costs or expenses incurred by the Employee.
<PAGE>

     4.   Regulatory Requirements.
           -----------------------

          Any payments made to the Employee  under this Agreement are subject to
and conditioned  upon their  compliance  with 12 U.S.C.  Section 1828(k) and any
regulations promulgated thereunder.

     5.   Successors and Assigns.
          ----------------------

          This  Agreement  shall inure to the benefit of and be binding upon any
corporate  or other  successor  of the Bank which  shall  acquire,  directly  or
indirectly,   by  merger,   consolidation,   purchase  or   otherwise,   all  or
substantially all of the assets or stock of the Bank.

     6.   Amendments.
          ----------

          No amendments or additions to this  Agreement  shall be binding unless
made in writing  and signed by all of the  parties,  except as herein  otherwise
specifically provided.

     7.   Applicable Law.
          --------------

          The  laws of the  Commonwealth  of  Massachusetts  shall  govern  this
Agreement in all respects, whether as to its validity,  construction,  capacity,
performance or otherwise.

     8.   Severability.
          ------------

          The  provisions of this  Agreement  shall be deemed  severable and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.

     9.   Entire Agreement.
          ----------------

          This  Agreement,  together  with any  understanding  or  modifications
hereof as agreed to in  writing  by the  parties,  shall  constitute  the entire
agreement between the parties hereto; provided however that nothing herein shall
be deemed alter or amend the rights or  obligations of the Bank and the Employee
pursuant to any employee  benefit or other plan,  program or policy,  including,
without limitation, the rights and obligations under any retirement,  insurance,
group benefit, stock option, incentive bonus or other plan in which the Employee
is, or may become, a participant.

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first hereinabove written.

ATTEST:                                       CENTRAL CO-OPERATIVE BANK


/s/ Rhoda K. Astone                           By: /s/ John D. Doherty
-----------------------------                     -----------------------------
Clerk


WITNESS:                                      EMPLOYEE:


/s/ Paul G. Crisafulli                        /s/ Michael K. Devlin
-----------------------------                 -----------------------------
                                              Michael K. Devlin