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                                                                   Exhibit 10.11

                    DEFERRED COMPENSATION PLAN FOR DIRECTORS
                  OF ANDOVER BANCORP, INC. AND ITS SUBSIDIARIES

      The Deferred Compensation Plan For Directors of Andover Bancorp. Inc. and
Its Subsidiaries, originally effective July 1, 1993, amended and restated
effective February 22, 1996, is hereby amended and restated as follows effective
November 1, 1996:

1.    Eligibility. Any member of the Board of Directors of Andover Bancorp, Inc.
      or any of its subsidiaries (each such entity being referred to herein as
      the "Corporation"} who is not an employee of Andover Bancorp, Inc. or any
      of its subsidiaries may elect to defer, in accordance with this Plan,
      payment of all or a portion of the compensation payable to him for service
      as such Director.

2.    Election to Defer. A Director's election to defer payments shall be made
      in writing and shall be effective upon receipt and acceptance by the
      Corporation. Except in the case of a newly elected Director who may file
      an election to defer within thirty (30) days of his election as Director,
      an election to defer shall be made no later than ten {10) days preceding
      commencement of a calendar year with respect to deferral of compensation
      to be earned in such year. Any election may be revoked in writing and
      shall be effective upon receipt by the Corporation, but only as to
      compensation to be earned at and after commencement of the next succeeding
      calendar month. Any election may be changed in writing and shall be
      effective upon receipt by the Corporation, but only as to compensation to
      be earned at and after commencement of the next succeeding calendar year.

3.    Crediting of Interest. The Corporation shall maintain a book account to
      which the deferred compensation of each Director participating in this
      Plan shall be credited as of the end of each calendar month after such
      compensation is earned. As of the end of each calendar month, the
      Corporation shall also credit each deferred compensation account with
      interest on the amount then standing in the account, exclusive of any
      deferred compensation credited to the account as of such date. The rate to
      be used for this purpose shall be the maximum interest yield paid by
      Andover Bank with respect to its 36-month term deposit accounts, or if
      there shall be no 36-month term deposit accounts, at the maximum interest
      yield paid on the term deposit account of such duration as most closely
      approximates 36 months.

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4.    Stock Units.

      (a) In lieu of receiving interest credit each month, a Director may elect
      to convert the amounts in his deferred compensation account (and any
      future deferrals) into stock units equivalent in value to shares of common
      stock of Andover Bancorp, Inc. ("Stock"). Such an election must be made in
      writing. A Director may revoke his election and elect to receive interest
      credit pursuant to Paragraph 3 above with respect to future deferred
      compensation.

      (b) The conversion of deferred compensation into stock units will be made
      on the basis of the fair market value of the Stock on the date of
      conversion, or the date the compensation would otherwise be paid, which
      ever is applicable. For this purpose, fair market value of the Stock on
      any given date shall mean the closing price reported for the Stock on the
      NASDAQ National Market on such date or, if no sales were reported on such
      date, for the last date preceding such date for which a sale was reported.

      (c) During the term of the deferral, each Director's account of stock
      units will be credited with additional units to reflect any payment of
      dividends (other than dividends payable only in shares of Stock}. Each
      account will be credited with a number of whole and fractional shares of
      stock units determined by multiplying the dividend value per share of
      stock by the number of units in the account on the record date and
      dividing the result by the fair market value of the Stock (as defined in
      Paragraph 4(b) above) on the record date.

      (d) In the event of a stock dividend, stock split or similar change in
      capitalization affecting the Stock, appropriate adjustments shall be made
      in the number of stock units credited to each Director's account.

5.    Time and Method of Payment.

      (a) Amounts credited to a Director's deferred compensation account shall
      be paid, or commenced to be paid. on the January 15 coincident with or
      next following the date on which the Director ceases to be a member of the
      Board of Directors of the Corporation for any reason whatsoever. In the
      case of semi-annual installments, payments shall also be made on each July
      15.

      (b) Payments of deferred compensation may be made either in a single lump
      sum or in annual, or semi-annual, installments over a period of ten (10)
      years, as the Director may have irrevocably specified before the
      compensation is earned. In the absence of an effective election, payment
      shall be made in a single lump sum. In the case of installment payments,
      interest or dividend equivalent shall continue to be credited in
      accordance with Paragraph 3 or 4 during the payment period. The amount of
      each installment payment shall be equal to the amount credited to the
      deferred compensation account as of the preceding June 30 or December 31,
      as the case may be divided by the number of,


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      payments remaining to be made, including the current payment. On or after
      the date which is the later of six months from the effective date of this
      amendment or the date this amendment is approved by shareholders of
      Andover Bancorp, Inc., payments from each Director's deferred compensation
      account of stock units shall be payable only in the form of whole shares
      of Stock, with any fractional share payable in cash.

      (c) Elections by a Director of a method of payment under sub-paragraph (b)
      shall be made in writing, effective upon receipt and acceptance by the
      Corporation, and applicable only to compensation to be earned after the
      effective date of the election. Such elections may also be changed by a
      Director, subject to the same restrictions.

      (d) Payments of deferred compensation shall be made as they become due to
      the Directors if then living, otherwise to a beneficiary or beneficiaries
      designated by the Director in writing to the Corporation prior to the
      Director's death, or failing such designation, the Director's estate.

      (e) Notwithstanding any provision hereof to the contrary, if a Director.
      or after a Director's death the Director's beneficiary, believes he is
      suffering from financial hardship, an application may be made to the Board
      of Directors of the Corporation for an acceleration of payments from the
      deferred compensation account of the Director. A "financial hardship"
      shall mean a need for financial assistance due to the occurrence of an
      unanticipated emergency caused by an event beyond the Director's control.
      The need for financial assistance must be such that the Director, any
      member of the Director's immediate family or, after the Director's death,
      a designated beneficiary will be subject to substantial hardship if the
      acceleration is not permitted. If the Board of Directors of the
      Corporation determines, in its sole discretion, that a hardship exists,
      the Corporation may accelerate payment to the Director or the designated
      beneficiary of only so much of the deferred compensation account as the
      Board of Directors of the Corporation may determine is required to
      alleviate such hardship, and the deferred compensation account shall be
      charged with said amount upon payment.

6.    Limitation on Rights of Directors. No action taken pursuant to this Plan
      shall create or be deemed to create a trust or fiduciary relationship of
      any kind between the Corporation and the Directors. Although the
      Corporation shall have no obligation to establish any separate fund,
      reserve, or to invest in any specific asset to provide security with
      respect to any deferred amounts during the deferral period, the
      Corporation may elect to do so and, in such event, the Directors shall not
      have any interest in such assets and all such assets shall continue for
      all purposes to be a part of the general assets of the Corporation, with
      title to the beneficial ownership of such

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      assets remaining at all times in the Corporation. Each Director, his legal
      representative, or any of his beneficiaries shall not have any right,
      other than the right of an unsecured general creditor of the Corporation,
      in respect to the deferred compensation account established hereunder, and
      such persons shall have no property interest in any specific assets of the
      Corporation.

7.    Nonforfeitable. The right of each Director to the payment of deferred
      compensation under this Plan shall be nonforfeitable and no action or
      failure to act by the Director, the Corporation, or any other person,
      shall deprive the Director of, or excuse the Corporation from its
      obligations to pay, the amounts due hereunder.

8.    Witholding Tax. The Corporation shall have the right to deduct from all
      deferred amounts or payments hereunder any federal or state taxes required
      by law to be withheld with respect to such deferred amounts or payments.

9.    Non-Assignable. The deferred compensation payable under this Plan 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.   Termination and Amendment. This Plan may be amended at any time or may be
      terminated, in whole or in part. at any time, and from time to time, by
      Andover Bancorp, Inc. The foregoing provisions of this Paragraph
      notwithstanding, no amendment or termination of this Plan shall, without
      the consent of a Director, adversely affect the amounts payable hereunder
      on account of compensation deferred prior to the effective date of such
      amendment or termination.

11.   Notices. All notices, elections, or designations by a Director to the
      Corporation shall be delivered in person or by registered mail, postage
      prepaid, and noted to be brought to the attention of the Treasurer,
      Andover Bancorp, Inc.

12.   Governing Law. This Plan, and all actions taken hereunder, shall be
      governed by and construed in accordance with the laws of the State of
      Massachusetts, except as such laws may be superseded by any applicable
      federal law.


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13.   Shares Issuable. The aggregate maximum number of shares of Stock reserved
      and available for issuance under the Plan shall be 50,000, subject to
      appropriate adjustments in the event of a stock dividend, stock split, or
      similar change in capitalization affecting the Stock. Shares subject to
      the Plan are authorized but unissued shares or Treasury shares.
      Notwithstanding the foregoing, no shares of Stock may be issued under the
      Plan until the amendment and restatement of this Plan has been approved by
      the affirmative votes of the holders of a majority of the shares of Stock
      of Andover Bancorp, Inc. present, or represented, and entitled to vote at
      a meeting of shareholders.