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                                                                    EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT


         This AGREEMENT (the "Agreement") is made as of September 1, 1999 (the
"Effective Date"), by and between People's Mortgage Corporation, a Massachusetts
corporation with its headquarters located in South Easton (the "Employer"), and
Richard G. Reese, Jr. (the "Executive"). In consideration of the mutual
covenants contained in this Agreement, the Employer and the Executive agree as
follows:

         1.       EMPLOYMENT. The Employer agrees to employ the Executive, and
the Executive agrees to be employed by the Employer on the terms and conditions
set forth in this Agreement.

         2.       CAPACITY. The Executive shall serve the Employer initially as
Regional Manager. The Executive shall also serve the Employer in such other or
additional offices as the Executive may be requested to serve by the Board of
Directors of the Employer (the "Board of Directors") or the Chief Executive
Officer. In such capacity or capacities, the Executive shall perform such
services and duties in connection with the business, affairs and operations of
the Employer as may be assigned or delegated to the Executive from time to time
by or under the authority of the Board of Directors or the Chief Executive
Officer.

         3.       TERM. Subject to the provisions of Section 6, the term of
employment pursuant to this Agreement (the "Term") shall be five (5) years and 4
months, beginning on the Effective Date and ending on December 31, 2004.
Thereafter, this Agreement shall automatically be renewed annually for an
additional one year term unless (a) either the Executive or the Employer gives
written notice to the other not less than sixty (60) days prior to the date of
the end of the current term of its or his intent not to renew the Agreement, or
(b) this Agreement is earlier terminated pursuant to Section 6 hereof. The last
day of the initial or any renewal term is herein referred to as the "Expiration
Date."

         4.       COMPENSATION AND BENEFITS. The regular compensation and
benefits payable to the Executive under this Agreement shall be as follows:

                  (a)      SALARY. For all services rendered by the Executive
         under this Agreement, the Employer shall pay the Executive a salary
         (the "Salary") at the annual rate of two hundred and forty thousand
         dollars ($240,000). The Salary shall be payable in periodic
         installments in accordance with the Employer's usual practice for its
         senior executives.

                  (b)      ADDITIONAL COMPENSATION. Subject to the provisions of
         Sections 6 and 8, for services rendered by the Executive under this
         Agreement, the Employer shall pay to the Executive the compensation as
         provided in SCHEDULE A attached hereto on such dates as are provided
         therein. The Executive shall be deemed to have earned the compensation
         as provided in SCHEDULE A only if (i) he is employed by the Employer at




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         the time a payment pursuant to SCHEDULE A is due, and (ii) the
         Executive has not breached any of his material obligations under this
         Agreement; provided that any breach of his obligations under Section 7
         shall be deemed material for purposes of this Agreement.

                  (c)      REGULAR BENEFITS. The Executive shall also be
         entitled to participate in any employee benefit plans, medical
         insurance plans, life insurance plans, disability income plans,
         retirement plans, vacation plans, and other benefit plans which the
         Employer may from time to time have in effect for all or most of its
         senior executives. Such participation shall be subject to the terms of
         the applicable plan documents, generally applicable policies of the
         Employer, applicable law and the discretion of the Board of Directors,
         the Compensation Committee of the Board of Directors or any
         administrative or other committee provided for in or contemplated by
         any such plan. Nothing contained in this Agreement shall be construed
         to create any obligation on the part of the Employer to establish any
         such plan or to maintain the effectiveness of any such plan which may
         be in effect from time to time.

                  (d)      ADDITIONAL BENEFITS. The Employer shall provide the
         following additional benefits to the Executive:

                           (i)      BUSINESS EXPENSES. The Employer shall
                  reimburse the Executive for his reasonable business expenses
                  incurred by him in the performance of his duties and
                  responsibilities, subject to the Employer's usual practice and
                  such requirements with respect to substantiation and
                  documentation as may be specified by the Employer.

                           (ii)     AUTOMOBILE. The Employer shall provide the
                  Executive an automobile allowance of six hundred dollars
                  ($600.00) per month (inclusive of payments relating to leases,
                  rentals, gas, maintenance, etc.)

                  (e)      TAXATION OF PAYMENTS AND BENEFITS. The Employer shall
         undertake to make deductions, withholdings and tax reports with respect
         to payments and benefits under this Agreement to the extent that it
         reasonably and in good faith believes that it is required to make such
         deductions, withholdings and tax reports. Payments under this Agreement
         shall be in amounts net of any such deductions or withholdings. Nothing
         in this Agreement shall be construed to require the Employer to make
         any payments to compensate the Executive for any adverse tax effect
         associated with any payments or benefits or for any deduction or
         withholding from any payment or benefit.

                  (f)      EXCLUSIVITY OF SALARY AND BENEFITS. The Executive
         shall not be entitled to any payments or benefits other than those
         provided under this Agreement.

         5.       EXTENT OF SERVICE. During the Executive's employment under
this Agreement, the Executive shall, subject to the direction and supervision of
the Board of Directors or the







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Chief Executive Officer, devote the Executive's full business time, best efforts
and business judgment, skill and knowledge to the advancement of the Employer's
interests and to the discharge of the Executive's duties and responsibilities
under this Agreement. The Executive shall not engage in any other business
activity, except as may be approved by the Board of Directors; provided that
nothing in this Agreement shall be construed as preventing the Executive from:

                  (a)      investing the Executive's assets in any company or
         other entity in a manner not prohibited by Section 7(d) and in such
         form or manner as shall not require any material activities on the
         Executive's part in connection with the operations or affairs of the
         companies or other entities in which such investments are made; or

                  (b)      engaging in religious, charitable or other community
         or non-profit activities that do not impair the Executive's ability to
         fulfill the Executive's duties and responsibilities under this
         Agreement.

         6.       TERMINATION AND TERMINATION BENEFITS. Notwithstanding the
provisions of Section 3, the Executive's employment under this Agreement shall
terminate under the following circumstances set forth in this Section 6.

                  (a)      DEATH. In the event of Executive's death during his
         employment with the Employer, this Agreement shall terminate
         automatically effective as of the end of the month during which the
         date of death shall have occurred without further liability on the part
         of the Employer.

                  (b)      TERMINATION BY THE EMPLOYER FOR CAUSE. The
         Executive's employment under this Agreement may be terminated for cause
         without further liability on the part of the Employer effective
         immediately upon a vote of the Board of Directors and written notice to
         the Executive. Only the following shall constitute "cause" for such
         termination:

                           (i)      dishonest statements or acts of the
                  Executive with respect to the Employer or any affiliate of the
                  Employer;

                           (ii)     the commission by or indictment of the
                  Executive for (A) a felony or (B) any misdemeanor involving
                  moral turpitude, deceit, dishonesty or fraud ("indictment,"
                  for these purposes, meaning an indictment, probable cause
                  hearing or any other procedure pursuant to which an initial
                  determination of probable or reasonable cause with respect to
                  such offense is made);

                           (iii)    failure to perform to the reasonable
                  satisfaction of the Board of Directors a substantial portion
                  of the Executive's duties and responsibilities assigned or
                  delegated under this Agreement, which failure continues, in
                  the






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                  reasonable judgment of the Board of Directors, after written
                  notice given to the Executive by the Board of Directors;

                           (iv)     gross negligence, willful misconduct or
                  insubordination of the Executive with respect to the Employer
                  or any affiliate of the Employer;

                           (v)      violation of any law, rule or regulation
                  applicable to the Employer's business; or

                           (vi)     material breach by the Executive of any of
                  the Executive's obligations under this Agreement; provided
                  that any breach of his obligations under Section 7 shall be
                  deemed material for purposes of this Agreement.

                  (c)      TERMINATION BY THE EXECUTIVE. The Executive's
         employment under this Agreement may be terminated by the Executive by
         written notice to the Board of Directors at least sixty (60) days prior
         to such termination.

                  (d)      TERMINATION BY THE EMPLOYER WITHOUT CAUSE. Subject to
         the payment of Termination Benefits pursuant to Section 6(e), the
         Executive's employment under this Agreement may be terminated by the
         Employer without cause upon written notice to the Executive by a vote
         of the Board of Directors.

                  (e)      CERTAIN TERMINATION BENEFITS.

                           (i)      Unless otherwise specifically provided in
                  this Agreement or otherwise required by law, all compensation
                  and benefits payable to the Executive under this Agreement
                  shall terminate on the date of termination of the Executive's
                  employment under this Agreement.

                           (ii)     Notwithstanding Section 6(e)(i) and subject
                  to Section 4(b)(ii), in the event (A) a Terminating Event (as
                  defined in Section 8(b)) occurs within two (2) years after a
                  Change in Control (as defined in Section 8(a)), or (B) the
                  Executive is terminated by the Employer for any reason other
                  than for cause (as defined in Section 6(b)), the Employer
                  shall pay to the Executive an aggregate amount equal to three
                  million three hundred thousand dollars ($3,300,000.00);
                  provided that such amount shall be reduced by all payments
                  previously made to the Executive pursuant to Section 4(b); and
                  provided further that such amount shall be payable in one
                  lump-sum payment on the date of such termination or
                  resignation.

                           (iii)    Notwithstanding Section 6(e)(i) and (ii), if
                  at the time the Executive's employment with the Executive
                  terminates pursuant to either Section 6(e)(ii)(A) or (B) the
                  Employer has paid to the Executive pursuant to Section
                  4(b)(ii) an amount equal to or greater than three million
                  three hundred






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                  thousand dollars ($3,300,000.00), the Executive shall be
                  entitled to the Executive's full Salary and benefits under
                  Section 4(c) (except to the extent that the Executive may be
                  ineligible for one or more such benefits under applicable plan
                  terms) for a period of two years subsequent to the date of
                  such termination.

                  (f)      DISABILITY. If the Executive shall be disabled so as
         to be unable to perform the essential functions of the Executive's then
         existing position or positions under this Agreement with or without
         reasonable accommodation, the Chief Executive Officer or the Board of
         Directors may remove the Executive from any responsibilities and/or
         reassign the Executive to another position with the Employer for the
         remainder of the Term or during the period of such disability.
         Notwithstanding any such removal or reassignment, the Executive shall
         continue to receive the Executive's full Salary (less any disability
         pay or sick pay benefits to which the Executive may be entitled under
         the Employer's policies) and benefits under Section 4(c) of this
         Agreement (except to the extent that the Executive may be ineligible
         for one or more such benefits under applicable plan terms) for a period
         of time equal to the lesser of (i) six (6) months; or (ii) the
         remainder of the Term. If any question shall arise as to whether during
         any period the Executive is disabled so as to be unable to perform the
         essential functions of the Executive's then existing position or
         positions with or without reasonable accommodation, the Executive may,
         and at the request of the Employer shall, submit to the Employer a
         certification in reasonable detail by a physician selected by the
         Employer to whom the Executive or the Executive's guardian has no
         reasonable objection as to whether the Executive is so disabled or how
         long such disability is expected to continue, and such certification
         shall for the purposes of this Agreement be conclusive of the issue.
         The Executive shall cooperate with any reasonable request of the
         physician in connection with such certification. If such question shall
         arise and the Executive shall fail to submit such certification, the
         Employer's determination of such issue shall be binding on the
         Executive. Nothing in this Section 6(e) shall be construed to waive the
         Executive's rights, if any, under existing law including, without
         limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. ss.2601
         et seq. and the Americans with Disabilities Act, 42 U.S.C. ss.12101 et
         seq.

         7.       CONFIDENTIAL INFORMATION, NONCOMPETITION AND COOPERATION.

                  (a)      CONFIDENTIAL INFORMATION. As used in this Agreement,
         "Confidential Information" means information belonging to the Employer
         which is of value to the Employer in the course of conducting its
         business and the disclosure of which could result in a competitive or
         other disadvantage to the Employer. Confidential Information includes,
         without limitation, financial information, reports, and forecasts;
         inventions, improvements and other intellectual property; trade
         secrets; know-how; designs, processes or formulae; software; market or
         sales information or plans; customer lists; and business plans,
         prospects and opportunities (such as lending relationships, financial
         product developments, or possible acquisitions or dispositions of
         businesses or facilities) which have been discussed or considered by
         the management of the






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         Employer. Confidential Information includes information developed by
         the Executive in the course of the Executive's employment by the
         Employer, as well as other information to which the Executive may have
         access in connection with the Executive's employment. Confidential
         Information also includes the confidential information of others with
         which the Employer has a business relationship. Notwithstanding the
         foregoing, Confidential Information does not include information in the
         public domain, unless due to breach of the Executive's duties under
         Section 7(b).

                  (b)      CONFIDENTIALITY. The Executive understands and agrees
         that the Executive's employment creates a relationship of confidence
         and trust between the Executive and the Employer with respect to all
         Confidential Information. At all times, both during the Executive's
         employment with the Employer and after its termination, the Executive
         will keep in confidence and trust all such Confidential Information,
         and will not use or disclose any such Confidential Information without
         the written consent of the Employer, except as may be necessary in the
         ordinary course of performing the Executive's duties to the Employer.

                  (c)      DOCUMENTS, RECORDS, ETC. All documents, records,
         data, apparatus, equipment and other physical property, whether or not
         pertaining to Confidential Information, which are furnished to the
         Executive by the Employer or are produced by the Executive in
         connection with the Executive's employment will be and remain the sole
         property of the Employer. The Executive will return to the Employer all
         such materials and property as and when requested by the Employer. In
         any event, the Executive will return all such materials and property
         immediately upon termination of the Executive's employment for any
         reason. The Executive will not retain with the Executive any such
         material or property or any copies thereof after such termination.

                  (d)      NONCOMPETITION AND NONSOLICITATION. During the Term
         and for two years thereafter, the Executive (i) will not, directly or
         indirectly, whether as owner, partner, shareholder, consultant, agent,
         employee, co-venturer or otherwise, engage, participate, assist or
         invest in any Competing Business (as hereinafter defined); (ii) will
         refrain from directly or indirectly employing, attempting to employ,
         recruiting or otherwise soliciting any employee of the Employer (or
         anyone who had been employed by the Employer within 3 months prior to
         the termination of the Executive's employment), or inducing or
         influencing any person to leave employment with the Employer (other
         than terminations of employment of subordinate employees undertaken in
         the course of the Executive's employment with the Employer); and (iii)
         will refrain from soliciting or encouraging any customer, investor or
         supplier to terminate or otherwise modify adversely its business
         relationship with the Employer. The Executive understands that the
         restrictions set forth in this Section 7(d) are intended to protect the
         Employer's interest in its Confidential Information and established
         employee, customer, investor and supplier relationships and goodwill,
         and agrees that such restrictions are reasonable and appropriate for
         this purpose. For purposes of this Agreement, the term "Competing
         Business" shall mean a business conducted anywhere in the States of






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         Maryland and Virginia relating to residential mortgage lending or
         brokering or which is competitive with any other business which the
         Employer or any of its affiliates conducts or proposes to conduct at
         any time during the employment of the Executive. Notwithstanding the
         foregoing, the Executive may own up to one percent (1%) of the
         outstanding stock of a publicly held corporation which constitutes or
         is affiliated with a Competing Business.

                  (e)      THIRD-PARTY AGREEMENTS AND RIGHTS. The Executive
         hereby confirms that the Executive is not bound by the terms of any
         agreement with any previous employer or other party which restricts in
         any way the Executive's use or disclosure of information or the
         Executive's engagement in any business. The Executive represents to the
         Employer that the Executive's execution of this Agreement, the
         Executive's employment with the Employer and the performance of the
         Executive's proposed duties for the Employer will not violate any
         obligations the Executive may have to any such previous employer or
         other party. In the Executive's work for the Employer, the Executive
         will not disclose or make use of any information in violation of any
         agreements with or rights of any such previous employer or other party,
         and the Executive will not bring to the premises of the Employer any
         copies or other tangible embodiments of non-public information
         belonging to or obtained from any such previous employment or other
         party.

                  (f)      LITIGATION AND REGULATORY COOPERATION. During and
         after the Executive's employment, the Executive shall cooperate fully
         with the Employer in the defense or prosecution of any claims or
         actions now in existence or which may be brought in the future against
         or on behalf of the Employer which relate to events or occurrences that
         transpired while the Executive was employed by the Employer. The
         Executive's full cooperation in connection with such claims or actions
         shall include, but not be limited to, being available to meet with
         counsel to prepare for discovery or trial and to act as a witness on
         behalf of the Employer at mutually convenient times. During and after
         the Executive's employment, the Executive also shall cooperate fully
         with the Employer in connection with any investigation or review of any
         federal, state or local regulatory authority as any such investigation
         or review relates to events or occurrences that transpired while the
         Executive was employed by the Employer. The Employer shall reimburse
         the Executive for any reasonable out-of-pocket expenses incurred in
         connection with the Executive's performance of obligations pursuant to
         this Section 7(f).

                  (g)      INJUNCTION. The Executive agrees that it would be
         difficult to measure any damages caused to the Employer which might
         result from any breach by the Executive of the promises set forth in
         this Section 7, and that in any event money damages would be an
         inadequate remedy for any such breach. Accordingly, subject to Section
         8 of this Agreement, the Executive agrees that if the Executive
         breaches, or proposes to breach, any portion of this Agreement, the
         Employer shall be entitled, in addition to all other remedies that it
         may have, to an injunction or other appropriate






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         equitable relief to restrain any such breach without showing or proving
         any actual damage to the Employer.

                  (h)      The restrictions contained in this Section 7 are
         reasonable in kind, duration and scope, and, furthermore, the Executive
         specifically acknowledges that the duration of the restrictions set
         forth in Section 7(d) (i.e., Term and two years thereafter) are
         reasonable in light of the fact that, effective until the date of this
         Agreement, the Executive was a member of Allied Bancshares Mortgage
         Group, LLC, the assets of which company were purchased by the Employer
         on the date of this Agreement.

         8.       SPECIAL TERMINATION.

                  (a)      CHANGE IN CONTROL. A "Change in Control" shall be
         deemed to have occurred when any "person" (as such term is used in
         Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
         amended (the "1934 Act")) becomes a "beneficial owner" (as such term is
         defined in Rule 13d-3 promulgated under the 1934 Act), directly or
         indirectly, of securities of the Employer representing twenty-five
         percent (25%) or more of the total number of votes that may be cast for
         the election of directors of the Employer (other than in the case of
         the formation of a holding company by the Employer or the holding
         company's ownership of the capital stock of the Employer), and the
         Board of Directors of the Employer has not consented to such event by a
         two-thirds vote of all of the members of the Board of Directors adopted
         either prior to such event or within sixty (60) days thereafter;
         provided that if at the time such a consent vote is adopted after such
         event, the persons who were directors of the Employer immediately prior
         to such event do not constitute a majority of the Board of Directors of
         the Employer, or of any successor institution, such vote shall not be
         deemed to constitute consent for the purposes of this provision. In
         addition, a Change in Control shall be deemed to have occurred if any
         tender or exchange offer, merger or other business combination, sale of
         assets or contested election, or any combination of the foregoing
         transactions has occurred and as the result of, or in connection with,
         such transaction the persons who were directors of the Employer before
         such transaction cease to constitute a majority of the Board of
         Directors of the Employer, or of any successor institution.

                  (b)      TERMINATING EVENT. A "Terminating Event" shall mean
         termination by the Employer of the employment of the Executive with the
         Employer for any reason other than for cause as defined in Section 6(b)
         above, or resignation of the Executive from the employ of the Employer,
         subsequent to the occurrence of any of the following events:

                           (i)      A significant change in the nature or scope
                  of the Executive's stated responsibilities or duties from the
                  responsibilities or duties exercised by







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                  the Executive immediately prior to the Change in Control,
                  which change constitutes a demotion;

                           (ii)     A demotion in title or in the offices held
                  by the Executive or any removal of the Executive from, or any
                  failure to reelect the Executive to any of the titles or
                  offices held by the Executive; or

                           (iii)    A decrease in the base salary and material
                  change in the method of determining bonuses and commissions
                  from that provided in the Schedules hereto payable by the
                  Employer to the Executive, unless (A) other executives
                  employed by the Employer receive similar treatment, or (B)
                  such decrease and material change are the result of a material
                  deterioration of the Employer's operations.

                  The Executive shall provide the Employer with thirty (30)
         days' notice and an opportunity to cure any of the events listed in
         this Section 8(b)(i) through (iv) and shall not be entitled to
         compensation pursuant to this Section 8 unless the Employer fails to
         cure within a reasonable period.

                  (c)      SEVERANCE PAYMENTS. Subject to the provisions of
         Section 8(d), in the event a Terminating Event occurs within two (2)
         years after a Change in Control, the Employer shall pay to the
         Executive as provided in Section 6(e).

                  (d)      LIMITATION ON BENEFITS.

                           (i)      It is the intention of the Executive and the
                  Employer that no payments by the Employer to or for the
                  benefit of the Executive under this Agreement and/or any other
                  agreement or plan pursuant to which the Executive is entitled
                  to receive payments or benefits shall be non-deductible to the
                  Employer by reason of the operation of Section 280G of the
                  Internal Revenue Code of 1986, as amended (the "Code")
                  relating to parachute payments. Accordingly, and
                  notwithstanding any other provision of this Agreement or any
                  such agreement or plan, if by reason of the operation of said
                  Section 280G, any such payments exceed the amount which can be
                  deducted by the Employer in the aggregate, such payments shall
                  be reduced to the maximum amount which can be deducted by the
                  Employer. To the extent that payments exceeding such maximum
                  deductible amount have been made to or for the benefit of the
                  Executive either under this Agreement and/or any other
                  agreement or plan, such excess payments shall be refunded to
                  the Employer with interest thereon at the applicable Federal
                  Rate determined under Section 1274(d) of the Code, compounded
                  annually, or at such other rate as may be required in order
                  that no such payments shall be non-deductible to the Employer
                  by reason of the operation of said Section 280G. To the extent
                  that there is more than one method of reducing the payments to
                  bring them within the limitations of said





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                  Section 280G, the Executive shall determine which method shall
                  be followed; provided that if the Executive fails to make such
                  determination within forty-five (45) days after the Employer
                  has sent him written notice of the need for such reduction,
                  the Employer may determine the method of such reduction in its
                  sole discretion.

                           (ii)     If any dispute between the Employer and the
                  Executive as to any of the amounts to be determined under this
                  Section 8(d), or the method of calculating such amounts,
                  cannot be resolved by the Employer and the Executive, either
                  the Employer or the Executive after giving three days written
                  notice to the other, may refer the dispute to a partner in the
                  Boston office of a firm of independent certified public
                  accountants selected jointly by the Employer and the
                  Executive, which firm must be one of the so-called "big five"
                  firms. The determination of such partner as to the amount to
                  be determined under Section 8(d)(i) and the method of
                  calculating such amounts shall be final and binding on both
                  the Employer and the Executive. The Employer shall bear the
                  costs of any such determination.

                  (e)      TERMINATION. The provisions of this Section 8 shall
         terminate upon the earliest of (i) the termination by the Employer of
         the employment of the Executive because of death or for cause as
         defined in Section 6(b), (ii) the resignation of the Executive for any
         reason prior to a Change in Control, or (iii) the resignation of the
         Executive after a Change in Control for any reason other than the
         occurrence of any of the events enumerated in Section 8(b)(i), (ii ),
         (iii) and (iv).

         9.       "KEY MAN" LIFE INSURANCE. The Employer has the right to
purchase a "key man" term life insurance policy, for a term of up to five years,
with respect to the Executive for a beneficial amount of up to five million
dollars ($5,000,000.00), for the benefit of the Employer or the Employer's
successors or assigns.

         10.      ARBITRATION OF DISPUTES. Any controversy or claim arising out
of or relating to this Agreement or the breach thereof or otherwise arising out
of the Executive's employment or the termination of that employment (including,
without limitation, any claims of unlawful employment discrimination whether
based on age or otherwise) shall, to the fullest extent permitted by law, be
settled by arbitration in any forum and form agreed upon by the parties or, in
the absence of such an agreement, under the auspices of the American Arbitration
Association ("AAA") in Boston, Massachusetts in accordance with the Employment
Dispute Resolution Rules of the AAA, including, but not limited to, the rules
and procedures applicable to the selection of arbitrators. In the event that any
person or entity other than the Executive or the Employer may be a party with
regard to any such controversy or claim, such controversy or claim shall be
submitted to arbitration subject to such other person or entity's agreement.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. This Section 10 shall be specifically enforceable.
Notwithstanding the foregoing, this Section 10 shall not preclude either party
from pursuing a court action for





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the sole purpose of obtaining a temporary restraining order or a preliminary
injunction in circumstances in which such relief is appropriate; provided that
any other relief shall be pursued through an arbitration proceeding pursuant to
this Section 10.

         11.      CONSENT TO JURISDICTION. To the extent that any court action
is permitted consistent with or to enforce Section 10 of this Agreement, the
parties hereby consent to the jurisdiction of the Superior Court of the
Commonwealth of Massachusetts and the United States District Court for the
District of Massachusetts. Accordingly, with respect to any such court action,
the Executive (a) submits to the personal jurisdiction of such courts; (b)
consents to service of process; and (c) waives any other requirement (whether
imposed by statute, rule of court, or otherwise) with respect to personal
jurisdiction or service of process.

         12.      INTEGRATION. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements between the parties with respect to any related subject matter.

         13.      ASSIGNMENT; SUCCESSORS AND ASSIGNS, ETC. Neither the Employer
nor the Executive may make any assignment of this Agreement or any interest
herein, by operation of law or otherwise, without the prior written consent of
the other party; provided that the Employer shall assign its rights under this
Agreement without the consent of the Executive in the event that the Employer
shall effect a reorganization, consolidate with or merge into any other
corporation, partnership, organization or other entity, or transfer all or
substantially all of its properties or assets to any other corporation,
partnership, organization or other entity. This Agreement shall inure to the
benefit of and be binding upon the Employer and the Executive, their respective
successors, executors, administrators, heirs and permitted assigns.

         14.      ENFORCEABILITY/SEVERABILITY. If any portion or provision of
this Agreement is to any extent be declared illegal or unenforceable by a court
of competent jurisdiction, then the court may amend such portion or provision so
as to comply with the law in a manner consistent with the intention of this
Agreement, and the remainder of this Agreement, or the application of such
illegal or unenforceable portion or provision in circumstances other than those
as to which it is so declared illegal or unenforceable, will not be affected
thereby, and each portion and provision of the Agreement will be valid and
enforceable to the fullest extent permitted by law. In the event that any
provision of this Agreement is determined by any court of competent jurisdiction
to be unenforceable by reason of excessive scope as to geographic, temporal or
functional coverage, such provision will be deemed to extend only over the
maximum geographic, temporal and functional scope as to which it may be
enforceable.

         15.      WAIVER. No waiver of any provision hereof shall be effective
unless made in writing and signed by the waiving party. The failure of any party
to require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.





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<PAGE>   12



         16.      NOTICES. Any notices, requests, demands and other
communications provided for by this Agreement shall be sufficient if in writing
and delivered in person or sent by registered or certified mail, postage
prepaid, return receipt requested, or by a nationally recognized courier to the
Executive at the last address the Executive has filed in writing with the
Employer or, in the case of the Employer, at its main offices, attention of the
Chief Executive Officer, and shall be effective on the date of delivery in
person or by a nationally recognized courier or three (3) days after the date
mailed.

         17.      AMENDMENT. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a duly authorized
representative of the Employer.

         18.      GOVERNING LAW. This is a Massachusetts contract and shall be
construed under and be governed in all respects by the laws of the Commonwealth
of Massachusetts, without giving effect to the conflict of laws principles of
such Commonwealth. With respect to any disputes concerning federal law, such
disputes shall be determined in accordance with the law as it would be
interpreted and applied by the United States Court of Appeals for the First
Circuit.

         19.      COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be taken to be
an original; but such counterparts shall together constitute one and the same
document.







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<PAGE>   13



         IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Employer, by its duly authorized officer, and by the
Executive, as of the Effective Date.


                                EMPLOYER:

                                PEOPLE'S MORTGAGE CORPORATION


                                By:_________________________________
                                   Name:
                                   Title:


                                EXECUTIVE:



                                ____________________________________
                                Richard G. Reese, Jr.









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<PAGE>   14


                                   SCHEDULE A
                             ADDITIONAL COMPENSATION


A.       The Executive shall be entitled to the following bonuses, payable in
         accordance with Paragraphs B and C below:

         1.       For the period beginning on September 1, 1999 and ending on
                  December 31, 1999, and for each of the calendar years ending
                  on December 31, 2000 and December 31, 2001, the Executive
                  shall be entitled to an amount equal to twenty-five percent
                  (25%) of the aggregate pre-tax profits of the regional offices
                  of the Employer under the managerial control of the Executive;
                  provided that the identity of such regional offices will be
                  determined by the Employer's Chief Executive Officer (the
                  "Regional Offices").

         2.       For each of the calendar years ending on December 31, 2002,
                  December 31, 2003, and December 31, 2004, the Executive shall
                  be entitled to an amount equal to:

                  2.1      Fifteen percent (15%) of the aggregate pre-tax
                           profits of the Regional Offices that do not exceed
                           three million dollars ($3,000,000);

                  2.2      twenty percent (20%) of the aggregate pre-tax profits
                           of the Regional Offices that exceed three million
                           dollars ($3,000,000) but are less than four million
                           dollars ($4,000,000); and

                  2.3      twenty-five percent (25%) of the aggregate pre-tax
                           profits of the Regional Offices that exceed four
                           million dollars ($4,000,000).

B.       For purposes of this Schedule A, the aggregate pre-tax profits of the
         Regional Offices shall be calculated by adding the pre-tax profits of
         each of the Regional Offices for the relevant time period or calendar
         year as set forth in the balance sheets and profit and loss statements
         corresponding to each Regional Office as prepared by the Employer on a
         monthly basis; provided that such profit and loss statements shall
         include reasonable corporate expense allocations that will vary from
         time to time.

C.       The bonuses provided for in this Schedule A shall be paid as a lump-sum
         payment on or before April 15 of the calendar year following the year
         to which the bonus is attributable.








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