Exhibit 10.10

                                                                  Execution Copy

                          AMENDED AND RESTATED EMPLOYMENT AGREEMENT

        AGREEMENT made as of the 18th day of June,  1997, as further amended and
restated as of the 18th day of May, 1999, by and between IPSWICH SAVINGS BANK, a
Massachusetts-chartered   savings  bank,   with  its  main  office  in  Ipswich,
Massachusetts  (the  "Bank")  and David L. Grey of  Wenham,  Massachusetts  (the
"Executive").

                                   WITNESSETH

        WHEREAS,  the  parties  hereto  desire to  continue  to provide  for the
Executive's  continued  employment  by the Bank by amending and  restating  that
certain Amended and Restated  Employment  Agreement  entered into as of June 18,
1997 and further amended and restated as of June 17, 1998;

        NOW  THEREFORE,  in  consideration  of the  mutual  covenants  contained
herein, the Bank and the Executive agree as follows:

        1 . Employment.  The Bank agrees to employ the Executive for the purpose
of  serving  as its  President  and Chief  Executive  Officer,  on the terms and
conditions hereinafter set forth.

        2 . Capacity.  The Executive shall serve the Bank as President and Chief
Executive Officer,  subject to his election by the Bank's Board of Directors. In
addition,   upon   completion   of  the   presently-pending   "Holding   Company
Reorganization"  (as such term is defined in Section ) the Executive shall serve
as  President  and Chief  Executive  Officer of Ipswich  Bancshares,  Inc.  (the
"Company"),  subject to his election by the Company's Board of Directors. Unless
otherwise  determined  by the Board of Directors of the Company,  the  Executive
shall not be entitled to compensation in addition to the  compensation set forth
in Section 4 of this  Agreement  as a result of his serving as an officer of the
Company.

        3 . Effective Date and Term. The  commencement  date (the  "Commencement
Date")  of this  Agreement  shall  be June 18,  1997.  The  initial  term of the
Executive's  employment hereunder shall be for three years from the Commencement
Date.  The parties  intend  that,  at any point in time  during the  Executive's
employment  hereunder,  the  then-remaining  term of his  employment  under this
Agreement  shall be three years.  Accordingly,  the term of employment  shall be
automatically  extended  by one day for  each day  that  the  Executive  remains
employed by the Bank. The last day of such term as so extended from time to time
is herein  sometimes  referred to as the  "Expiration  Date";  provided that for
purposes of Section 11, the "Expiration Date" shall be (i) the third anniversary
of the  date on which  the  Board  designates  another  executive  to act in the
Executive's  place under Section 11, or (ii) the Long Term  Disability  Date (as
defined in Section 11), whichever is earlier.

        4 . Compensation  and Benefits.  The regular  compensation  and benefits
payable to the Executive under this Agreement shall be as follows:
<PAGE>
            (a) Salary.  For all services  rendered by the Executive  under this
Agreement,  the  Bank  shall  pay the  Executive  a base  salary  at the rate of
$145,000 per year,  subject to increase from time to time in accordance with the
usual practice of the Bank with respect to review of  compensation of its senior
executives.  In addition,  if the Board  increases the  Executive's  annual base
salary at any time before the Expiration Date, such increased annual base salary
shall  become a floor below which such annual base salary  shall not fall at any
future time during the term of the  Executive's  employment  without his written
consent.  The  Executive's  salary shall be payable in periodic  installments in
accordance with the Bank's usual practice for its senior executives.

            (b)  Regular  Benefits.  The  Executive  shall also be  entitled  to
participate in any and all employee  benefit  plans,  medical  insurance  plans,
disability  income plans,  retirement  plans,  bonus incentive  plans, and other
benefit  plans from time to time in effect for  senior  executives  of the Bank.
Such  participation  shall be  subject to (i) the terms of the  applicable  plan
documents,  (ii)  generally  applicable  policies  of the  Bank  and  (iii)  the
discretion of the Board of Directors of the Bank or any  administrative or other
committee  provided  for in or  contemplated  by such plan.  Nothing paid to the
Executive  under any plan,  policy or  arrangement  currently  in effect or made
available in the future shall be deemed to be in lieu of other  compensation  to
the Executive as described in this Agreement.

            (c) Business  Expenses.  The Bank shall  reimburse the Executive for
all  reasonable  travel  and  other  business  expenses  incurred  by him in the
performance  of his duties  and  responsibilities,  subject  to such  reasonable
requirements  with  respect  to  substantiation  and  documentation  as  may  be
specified by the Bank.

            (d) Vacation.  The Executive shall be entitled to not less than four
(4) weeks of vacation per year, to be taken at such times and intervals as shall
be  determined by the Executive  with the approval of the Bank,  which  approval
shall not be reasonably withheld.

            (e) Other Benefits.

                (1) Automobile Allowance.  The Bank shall pay Executive not less
        than $6,932 per year as an automobile allowance.

                (2) SBLI  Insurance.  The Bank shall  continue  to pay an annual
        premium of $1,680 for a Savings Bank Life  Insurance  policy on the life
        of the Executive of which the Executive is the owner and beneficiary.

                (3) Supplemental  Disability  Policy. The Bank shall continue to
        pay the annual premium for a supplemental  disability  insurance  policy
        ("Supplemental  Policy") which provides, in the event of the Executive's
        disability  (as  defined  in  the  Supplemental   Policy),   for  annual
        supplemental  disability payments in addition to payments made under the
        Bank's  group long term  disability  insurance  plan.  The  Supplemental
        Policy currently provides for an annual supplemental benefit of $78,600,
        and will be amended  from time to time so that it  continues  to provide
        for  a  supplemental  disability  payment  sufficient  to  maintain  the
        Executive's  aggregate  annual long term disability  benefit  (including
        amounts payable under the Bank's group long term disability plan) at 70%
        of his Cash Compensation as of the date benefits are first payable under
        the Supplemental  Policy.  The term "Cash  Compensation"  shall mean the
        Executive's  annual base salary as of the date of determination plus the
        annual cash bonus paid to the  Executive  during the year  preceding the
        date of determination.
<PAGE>
            (f) No Impact on Other  Agreements.  Nothing in this Agreement shall
have any affect on the  Executive's  rights under (i) that certain  Split Dollar
Agreement  dated  February 21, 1996 between the Bank and the  Executive  (as the
same may be amended from time to time) or (ii) options  granted to the Executive
pursuant to the stock option plans of the Bank or the Company.

        5 . Extent of Service.  During his employment  hereunder,  the Executive
shall, subject to the direction and supervision of the Board of Directors of the
Bank,  devote his full time,  best  efforts  and  business  judgment,  skill and
knowledge to the advancement of the Bank's interests and to the discharge of his
duties and responsibilities hereunder. He shall not engage in any other business
activity,  except  as may be  approved  by the  Board  of  Directors;  provided,
however,  that nothing  herein shall be construed as  preventing  the  Executive
from:

            (a)  investing  his assets in a manner not  prohibited by Section 12
hereof, and in such form or manner as shall not require any material services on
his part in the  operations or affairs of the companies or the other entities in
which such investments are made;

            (b) serving on the board of directors of any company, subject to the
prohibitions  set forth in Section 12 and provided that he shall not be required
to render any material services with respect to the operations or affairs of any
such company; or

            (c)  engaging  in  religious,   charitable  or  other  community  or
non-profit  activities which do not impair his ability to fulfill his duties and
responsibilities under this Agreement.

        6 . Termination Upon Death. In the event of the Executive's death during
the  Executive's  employment  hereunder,  the Bank shall pay to the  Executive's
beneficiary  designated  in  writing  to the Bank  prior to his death (or to his
estate,  if he fails to make  such  designation),  (i) any base  salary or other
compensation  earned (together with a pro rata portion of the bonus payable with
respect to the year in which death  occurred) but not paid to Executive prior to
the date of death,  plus (ii) the base salary that  Executive  would have earned
for a period  of six (6)  months  following  his  death,  plus  (iii) a pro rata
portion of any bonuses or other incentive compensation that Executive would have
earned  if he had  been  employed  for the  full  fiscal  year in which he died,
payable at the time of payment of similar  bonuses made to other  Executives  of
the Bank,  plus (iv) any death  benefits that Executive is entitled to under the
Bank's policies in effect on Executive's date of death.

        7 . Termination by the Bank for Cause.

            (a) Termination of Employment.  The Executive's employment hereunder
may be terminated by the Bank for Cause without further liability on the part of
the Bank, effective  immediately,  by a vote of a majority of all of the members
of the Executive  Committee and a majority of all of the members of the Board of
Directors of the Bank.  The Bank shall provide the Executive with written notice
setting forth in reasonable detail the nature of such Cause.
<PAGE>
            (b) Cause.  For purposes of this Agreement a termination  shall be a
termination for "Cause" only if the  termination is for fraud,  misappropriation
or embezzlement  in the Executive's  performance of his duties as an employee of
the Bank or any subsidiary or affiliate thereof,  or conviction of the Executive
of a crime involving moral turpitude.

        8.  Termination by the Executive.

            (a) Termination by the Executive for Good Reason.  The Executive may
terminate  his  employment  hereunder for Good Reason at any time by delivery of
written  notice  to the Bank  within  the one year  period  commencing  upon the
occurrence  of the Good Reason.  Unless  otherwise  agreed to by the Bank,  such
termination  shall not be  effective  until  thirty (30) days after such written
notice is delivered.

            (b) Good  Reason.  For  purposes of this  Agreement,  the term "Good
Reason" shall mean:

                (1) the  failure  of the Board of  Directors  of the  Company to
        elect the  Executive  to the  office of  President  and Chief  Executive
        Officer of the Company,  or to continue the Executive in such office, or
        the failure of the Board of Directors of the Bank to elect the Executive
        to the office of President and Chief  Executive  Officer of the Bank, or
        to continue the Executive in such office;

                (2) the  failure  by the Bank to comply  with the  provisions of
        Section 4(a);

                (3)  a  significant  change  in  the  nature  or  scope  of  the
        Executive's responsibilities,  authorities, powers, functions or duties;
        or

                (4) a material  breach by the Bank of any of the  provisions  of
        this  Agreement  which failure or breach shall have continued for thirty
        (30) days after written notice from the Executive to the Bank specifying
        the nature of such failure or breach.

In  addition,"Good  Reason" shall include the following  events but only if they
shall occur within two years following a Change in Control:

                (5) the failure by the Bank to continue to provide the Executive
        with benefits  substantially similar to those available to the Executive
        under  any of the life  insurance,  medical,  health  and  accident,  or
        disability  plans or any  other  material  benefit  plans  in which  the
        Executive was participating at the time of the Change in Control, or the
        taking of any  action by the Bank which  would  directly  or  indirectly
        materially  reduce any of such  benefits,  or the failure by the Bank to
        provide the Executive with the number of paid vacation days to which the
        Executive  is entitled on the basis of years of service with the Bank in
        accordance  with the Bank's normal vacation policy in effect at the time
        of the Change in Control;

                (6) A  reasonable  determination  by the  Executive  that,  as a
        result  of  a  Change  in  Control,   he  is  unable  to  exercise   the
        responsibilities,  authorities, powers, functions or duties exercised by
        the Executive immediately prior to such Change in Control;
<PAGE>
                (7) A  reasonable  determination  by the  Executive  that,  as a
        result of a Change in Control, his working conditions have significantly
        worsened; or

                (8)  the  failure  of  the  Bank  or the  Company  to  obtain  a
        satisfactory agreement from any successor to assume and agree to perform
        this Agreement.

          (c) Change in Control.   Except to the extent  otherwise   provided in
Section , for the purposes of this Agreement  "Change in Control" shall mean the
occurrence of any one or more of the following four events:

                (1) If there has occurred a change in control  which the Bank or
        Company  would be  required  to report in response to Item 1 of Form 8-K
        promulgated  under the Securities  Exchange Act of 1934, as amended (the
        "1934  Act"),  or,  if such  regulation  is no  longer  in  effect,  any
        regulations  promulgated  by  the  Securities  and  Exchange  Commission
        pursuant to the 1934 Act which are intended to serve similar purposes;

                (2) When any  "person"  (as such term is used in Sections  13(d)
        and 14(d)(2) of 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  Company  or the  Bank  representing
        twenty-five  percent (25%) or more of the total number of votes that may
        be cast for the election of directors of the Company or the Bank, as the
        case may be;

                (3) During any period of two consecutive years,  individuals who
        at the beginning of such period constitute the Board of Directors of the
        Company,  and any new director  (other than a director  designated  by a
        person who has entered  into an  agreement  with the Company to effect a
        transaction  described in Section 8(c)(2),  8(c)(4),  or 8 (c) 5 of this
        Agreement) whose election by the Board or nomination for election by the
        Company's  stockholders  was  approved by a vote of at least  two-thirds
        (2/3) of the directors then still in office who either were directors at
        the beginning of the period or whose election or nomination for election
        was previously so approved,  cease for any reason to constitute at least
        a majority of the Board of Directors of the Company;

                (4) The  stockholders  of the  Company  approve a merger,  share
        exchange or  consolidation  ("merger or  consolidation")  of the Company
        with any other  corporation,  other  than (a) a merger or  consolidation
        which would result in the voting  securities of the Company  outstanding
        immediately  prior thereto  continuing to represent (either by remaining
        outstanding  or  by  being  converted  into  voting  securities  of  the
        surviving  entity)  more than 70% of the  combined  voting  power of the
        voting  securities of the Company or such surviving  entity  outstanding
        immediately  after  such  merger  or  consolidation  or (b) a merger  or
        consolidation  effected to implement a  recapitalization  of the Company
        (or similar  transaction) in which no "person" (as hereinabove  defined)
        acquires  more than 30% of the combined  voting  power of the  Company's
        then outstanding securities; or

                (5) The  stockholders  of the Company or the Bank approve a plan
        of complete  liquidation  of the Company or the Bank or an agreement for
        the  sale or  other  disposition  by the  Company  or the Bank of all or
        substantially all of the Company's or the Bank's assets.
<PAGE>
            (d) Voluntary Termination.  The Executive may, upon thirty (30) days
prior  written  notice  to the  Bank,  effect  a  Voluntary  Termination  of his
employment  hereunder.  A "Voluntary  Termination"  shall mean a termination  of
employment by the Executive on his own  initiative  other than (a) a termination
due to death or disability, or (b) a termination for Good Reason.

        9 . Termination by the Bank Without Cause.  The  Executive's  employment
with the Bank may be terminated  without cause only by a two-thirds  vote of all
of the members of the Board of  Directors  of the Bank on written  notice to the
Executive.

        10 . Certain  Termination  Benefits.  In the event of termination by the
Executive  for Good Reason  pursuant to Section (a) or  termination  by the Bank
without cause  pursuant  to Section 8(a), the Executive shall be entitled to the
following benefits:

            (a) Severance  Payments.  The Executive  shall be entitled to a lump
sum payment, payable within 30 days of the last day of his employment,  equal to
the sum of the following:

                (1) Payment for Services  Already  Rendered.  An amount equal to
        the sum of (a) the  Executive's  base salary for the period  through the
        date of  termination,  plus (b) the Executive's pro rata share (based on
        the number of whole or partial  months  during which the  Executive  was
        employed in the year of termination divided by 12) of the highest annual
        bonus paid during the three fiscal years  preceding the  termination  of
        employment, plus (c) all accrued vacation; plus

                (2) Severance Pay. A severance  benefit equal to three times the
        sum of (a) the  Executive's  then current  annual base  salary;  (b) the
        highest annual bonus paid to the Executive during the three fiscal years
        preceding the  termination  of  employment;  and (c) the highest  annual
        payments that the Bank made to the Executive or on his behalf during the
        three fiscal years preceding the termination of employment under Section
        4(e)(1), 4(e)(2) and 4(e)(3) hereof.

            (b) Benefit  Continuation.  For the period subsequent to the date of
termination  until the Expiration  Date, the Executive shall continue to receive
all  benefits   described  in  Section  4(b)  above  existing  on  the  date  of
termination. For purposes of application of such benefits the Executive shall be
treated as if he had  remained  in the employ of the Bank,  with a total  annual
salary at the rate in effect on the date of  termination,  and  service  credits
will  continue to accrue  during such period as if the Executive had remained in
the employ of the Bank.

        If,  in spite of the  provisions  of this  Section  10(b),  benefits  or
service  credits  under any benefit plan shall not be payable or provided  under
any such plan to the Executive, or to the Executive's dependents,  beneficiaries
or estate,  because the  Executive is no longer  deemed to be an employee of the
Bank,  the Bank itself  shall pay for, or provide for payment of, such  benefits
and  service  credits  for  such  beneficiaries  to  the  Executive,  or to  the
Executive's dependents, beneficiaries or estate.

            (c)  No  Duty  to  Mitigate.  In the  event  of  termination  of the
Executive's employment, the Executive shall be under no obligation to seek other
employment  or to  mitigate  damages  and there  shall be no offset  against any
amounts  due the  Executive  under this  Agreement  for any  reason,  including,
without  limitation,   on  account  of  any  remuneration  attributable  to  any
subsequent employment that the Executive may obtain.
<PAGE>
            (d) No Benefits Upon Voluntary Termination or Termination for Cause.
In the event of Voluntary Termination pursuant to Section 8(d) or termination of
the  Executive's  employment for Cause pursuant to Section 7, all obligations of
the Bank under this Agreement shall terminate as of the date of termination, but
vested rights of the parties hereunder shall not be affected.

        11 . Disability.  If, due to physical or mental  illness,  the Executive
shall be disabled so as to be unable to perform  substantially all of his duties
and responsibilities hereunder, the Bank, acting through its Board of Directors,
may  designate  another  executive  to act in his place during the period of his
disability,  but such  action by the Bank  shall  constitute  Good  Reason if it
occurs  after a Change in Control.  Notwithstanding  any such  designation,  the
Executive shall continue to receive his full salary and benefits under Section 4
of this Agreement until the earlier of (X) the Expiration  Date, or (Y) the date
on which he becomes  eligible for  disability  income under the Bank's long term
disability income plan ("Long Term Disability Date"). While receiving disability
payments under such plan the Executive shall, until the Expiration Date, receive
a salary from the Bank which will equal seventy (70%) percent of the Executive's
Cash Compensation (as defined in Section 4(e)(3)) as of the Long Term Disability
Date,  when combined with the Executive's  disability  income payments under the
Bank's  group  plan and  under  the  supplemental  disability  insurance  policy
maintained by the Bank for the Executive.  The Executive  shall also continue to
participate  in the  Bank's  benefit  plans and to  receive  other  benefits  as
specified  in Section 4 until the  Expiration  Date.  Nothing  contained in this
Section shall  preclude the Bank from  terminating  the  Executive's  employment
without  cause  pursuant  to Section 9,  subject to its  payment of  benefits as
provided in Section 10.

        12 .  Noncompetition.  During  the  Executive's  employment  by the Bank
hereunder and during a period of one year  following the date of  termination of
his employment with the Bank for any reason, the Executive will not, directly or
indirectly whether as owner, partner, shareholder,  consultant, agent, employee,
co-venturer or otherwise, or through any Person (as hereafter defined),  compete
in the Bank's  market area  (defined as Essex  County,  Massachusetts)  with the
banking or any other business conducted by the Bank or any Subsidiary during the
period of his employment hereunder,  nor will he attempt to hire any employee of
the Bank, assist in such hiring by any other Person, encourage any such employee
to terminate his or her relationship  with the Bank or to conduct with any other
Person any business or activity  which such  customer  conducts or could conduct
with the Bank.  For  purposes  of this  Section 12, the  Executive  shall not be
deemed to be  competing  with the Bank if he is  employed  outside of the Bank's
market area for a bank or corporation which has its headquarters  outside of the
Bank's market area,  even if such bank or corporation  has a branch or office in
the Bank's market area. Notwithstanding the foregoing, this Section 12 will have
no further force and effect if, within two years  following the  occurrence of a
Change in Control (as  defined in Section  (c),  the  Executive  terminates  his
employment for Good Reason  pursuant to Section 8(a) or the Bank  terminates the
Executive's employment without cause pursuant to Section .

        13 .  Confidential  Information.  The Executive will not disclose to any
other Person  (except as required by applicable  law or in  connection  with the
performance of his duties and  responsibilities  hereunder),  or use for his own
benefit  or gain,  any  confidential  information  of the Bank  obtained  by him
incident to his employment  with the Bank. The term  "confidential  information"
includes, without limitation,  financial information,  business plans, prospects
and   opportunities   (such  as   lending   relationships,   financial   product
developments,   or  possible   acquisitions   or  dispositions  of  business  or
facilities)  which have been  discussed or considered  by the  management of the
Bank but does not  include any  information  which has become part of the public
domain by means  other than the  Executive's  nonobservance  of his  obligations
hereunder.
<PAGE>
        14 .  Post-Termination Obligations.

            (a) Upon  termination of the Executive's  employment for any reason,
the  Executive  shall act at all times in an ethical  manner with regard to, and
shall take no action which  directly or  indirectly  has or could  reasonably be
expected to have the effect of terminating or otherwise  adversely affecting the
relationship  of the Bank with any  employees  of, or others  with  business  or
advantageous relationships with, the Bank or any of its affiliates.

            (b) During the term of the Executive's  employment hereunder and for
one (1) full year after the  termination  thereof for any reason,  or subject to
ordinary court process,  the Executive shall,  upon reasonable  notice,  use his
reasonable best efforts to cooperate with the Bank by providing such information
and  assistance  to the Bank as may  reasonably  be  required by the Bank at the
Bank's  expense in connection  with any litigation not commenced by or involving
the Executive in which the Bank is, or may become, a party.

        15 . Relief; Interpretation. The Executive agrees that the Bank shall be
entitled to injunctive  relief for any breach by him of the covenants  contained
in  Sections  12, 13 and 14. In the event that any  provision  of the  foregoing
Sections  shall be  determined  by any  court of  competent  jurisdiction  to be
unenforceable  by reason of its being  extended over too great a period of time,
too large a geographic  area,  or too great a range of  activities,  it shall be
interpreted to extend only over the maximum period of time,  geographic area, or
range of activities as to which it may be enforceable.  For purposes of Sections
12, 13 and 14,  the term  "Bank"  shall mean the Bank and its  subsidiaries  and
affiliates.

        16 .  Withholding.  All payments  made by the Bank under this  Agreement
shall be net of any tax or other  amounts  required  to be  withheld by the Bank
under applicable law.

        17 .  Indemnification.  The Bank shall  indemnify  and hold harmless the
Executive (and his heirs,  executors and  administrators)  to the fullest extent
permitted by applicable law, regulations,  regulatory bulletin, and/or any other
regulatory  requirement,  as the same exists or may hereafter be  promulgated or
amended, against all expense, liability and loss (including, without limitation,
attorneys' fees, judgments, fines, excise taxes or penalties and amounts paid or
to be paid in settlement)  reasonably incurred or suffered by the Executive as a
consequence  of the Executive  being or having been made a party to, or being or
having been involved,  in any threatened,  pending or completed action,  suit or
proceeding, whether civil, criminal,  administrative or investigative, by reason
of the fact that the Executive is or was a director or officer of the Bank or is
or was serving at the  request of the Bank as a trustee,  director or officer or
of another  corporation  (including,  but not  limited  to, a  subsidiary  or an
Affiliate  of the  Bank),  and such  indemnification  shall  continue  after the
Executive  shall  cease to be an  officer,  director  or  trustee.
<PAGE>
The right to  indemnification  conferred  hereby  shall be a contract  right and
shall also include, to the extent permitted by applicable law or regulation, the
right  to be paid by the  Bank  the  expenses  incurred  in  defending  any such
proceeding  in advance of the final  disposition  upon receipt by the Bank of an
undertaking  by or on behalf of the Executive to repay such amounts or a portion
thereof, if it shall ultimately be determined that the Executive is not entitled
to be indemnified by the Bank pursuant hereto or as otherwise  authorized by law
but such  repayment  by the  Executive  shall  only be in an  amount  ultimately
determined  to exceed  the  amount to which the  Executive  was  entitled  to be
indemnified.

        18 . Certain Additional Payments by the Bank.

            (a) Anything in this Agreement to the contrary  notwithstanding  and
except as set forth below,  in the event it shall be determined that any payment
or distribution by the Bank to or for the benefit of the Executive (whether paid
or  payable  or  distributed  or  distributable  pursuant  to the  terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 18) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
the  Executive  with respect to such excise tax (such excise tax,  together with
any such interest and penalties, are hereinafter collectively referred to as the
"Excise  Tax"),  then the  Executive  shall be entitled to receive an additional
payment (a  "Gross-Up  Payment")  in an amount  such that  after  payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such  taxes),  including,  without  limitation,  any  income  taxes  (and any
interest  and  penalties  imposed with respect to hereto) and Excise Tax imposed
upon the  Gross-Up  Payment,  the  Executive  retains an amount of the  Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.

            (b) Subject  to   the    provisions    of    Section   18(c),    all
determinations  required to be made under this Section 18, including whether and
when a Gross-Up  Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination,  shall be made
by such "big five" certified public  accounting firm as may be designated by the
Executive  (the  "Accounting  Firm")  which shall  provide  detailed  supporting
calculations  both to the Bank and the Executive  within 15 business days of the
receipt of notice  from the  Executive  that  there has been a Payment,  or such
earlier time as is requested by the Bank. In the event that the Accounting  Firm
is  serving  as  accountant  or  auditor  for the  individual,  entity  or group
effecting the Change of Control,  the Executive shall appoint another nationally
recognized accounting firm to make the determinations  required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting  Firm shall be borne solely by the Bank. Any
Gross-Up  Payment,  as determined  pursuant to this Section 18, shall be paid by
the Bank to the  Executive  within  five days of the  receipt of the  Accounting
Firm's determination.  Any determination by the Accounting Firm shall be binding
upon  the  Bank  and  the  Executive.  As a  result  of the  uncertainty  in the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting  Firm hereunder,  it is possible that Gross-Up  Payments which
will not have been  made by the Bank  should  have  been made  ("Underpayment"),
consistent with the  calculations  required to be made  hereunder.  In the event
that the Bank exhausts its remedies  pursuant to Section 18(c) and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting  Firm
shall  determine the amount of the  Underpayment  that has occurred and any such
Underpayment  shall be  promptly  paid by the Bank to or for the  benefit of the
Executive.

            (c) The  Executive  shall notify the Bank in writing of any claim by
the Internal  Revenue Service that, if successful,  would require the payment by
the Bank of the Gross-Up Payment.  Such  notification  shall be given as soon as
practicable  but no later than ten business days after the Executive is informed
in writing of such claim and shall  apprise the Bank of the nature of such claim
and the date on which such claim is requested to be paid.
<PAGE>
The  Executive  shall not pay such claim prior to the  expiration  of the 30-day
period  following  the date on which it gives  such  notice to the Bank (or such
shorter period ending on the date that any payment of taxes with respect to such
claim is due).  If the Bank  notifies  the  Executive  in  writing  prior to the
expiration  of such period that it desires to contest such claim,  the Executive
shall:

                (1) give the Bank any  information  reasonably  requested by the
        Bank relating to such claim,

                (2) take such action in connection with contesting such claim as
        the  Bank  shall  reasonably  request  in  writing  from  time to  time,
        including,  without  limitation,  accepting  legal  representation  with
        respect to such claim by an attorney reasonably selected by the Bank,

                (3) cooperate  with the Bank in good faith in order  effectively
        to contest such claim, and

                (4) permit the Bank to participate in any  proceedings  relating
        to such  claim;  provided,  however,  that the Bank  shall  bear and pay
        directly  all costs and  expenses  (including  additional  interest  and
        penalties)  incurred in connection with such contest and shall indemnify
        and hold the Executive  harmless,  on an after-tax basis, for any Excise
        Tax or  income  tax  (including  interest  and  penalties  with  respect
        thereto) imposed as a result of such representation and payment of costs
        and expenses.  Without  limitation  on the foregoing  provisions of this
        Section  18(c),  the  Bank  shall  control  all  proceedings   taken  in
        connection  with such  contest  and, at its sole  option,  may pursue or
        forgo any and all  administrative  appeals,  proceedings,  hearings  and
        conferences  with the taxing authority in respect of such claim and may,
        at its sole option,  either  direct the Executive to pay the tax claimed
        and sue for a refund or contest the claim in any permissible manner, and
        the Executive agrees to prosecute such contest to a determination before
        any administrative  tribunal,  in a court of initial jurisdiction and in
        one or more appellate  courts,  as the Bank shall  determine;  provided,
        however,  that if the Bank  directs the  Executive to pay such claim and
        sue for a refund,  the Bank shall  advance the amount of such payment to
        the Executive,  on an  interest-free  basis and shall indemnify and hold
        the Executive  harmless,  on an after-tax basis,  from any Excise Tax or
        income tax  (including  interest  or  penalties  with  respect  thereto)
        imposed  with  respect to such  advance or with  respect to any  imputed
        income  with  respect to such  advance;  and further  provided  that any
        extension of the statute of limitations relating to payment of taxes for
        the taxable year of the Executive  with respect to which such  contested
        amount is claimed to be due is limited solely to such contested  amount.
        Furthermore,  the  Bank's  control  of the  contest  shall be limited to
        issues  with  respect  to which a  Gross-Up  Payment  would  be  payable
        hereunder and the Executive  shall be entitled to settle or contest,  as
        the case may be, any other issue raised by the Internal  Revenue Service
        or any other taxing authority.

            (d) If, after the receipt by the Executive of an amount  advanced by
the Bank pursuant to Section 18(c),  the Executive  becomes  entitled to receive
any refund  with  respect to such claim,  the  Executive  shall  (subject to the
Bank's complying with the requirements of Section ) promptly pay to the Bank the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto).
<PAGE>
If,  after  the  receipt  by the  Executive  of an amount  advanced  by the Bank
pursuant to Section 18(c, a  determination  is made that the Executive shall not
be  entitled  to any  refund  with  respect  to such claim and the Bank does not
notify the  Executive  in writing of its intent to contest such denial of refund
prior to the expiration of 30 days after such  determination,  then such advance
shall be forgiven  and shall not be required to be repaid and the amount of such
advance  shall offset,  to the extent  thereof,  the amount of Gross-Up  Payment
required to be paid.

        19 . Arbitration of Disputes.  Except as otherwise provided in Section ,
any  controversy  or claim  arising out of or relating to this  Agreement or the
breach thereof shall be settled by  arbitration  in accordance  with the laws of
the  Commonwealth of Massachusetts  by three  arbitrators,  one of whom shall be
appointed  by the  Bank,  one by the  Executive  and the  third by the first two
arbitrators.  If the first two arbitrators  cannot agree on the appointment of a
third  arbitrator,  then the third arbitrator shall be appointed by the American
Arbitration  Association  in the  City of  Boston.  Such  arbitration  shall  be
conducted  in the City of Boston in  accordance  with the rules of the  American
Arbitration  Association,  except with respect to the  selection of  arbitrators
which shall be as provided in this Section 19.  Judgment upon the award rendered
by the arbitrators may be entered in any court having  jurisdiction  thereof. In
the event that it shall be necessary or  desirable  for the  Executive to retain
legal  counsel  and/or  incur other costs and  expenses in  connection  with the
enforcement of any or all of the Executive's  rights under this  Agreement,  the
Bank shall pay (or the Executive  shall be entitled to recover from the Bank, as
the case may be) the Executive's reasonable attorneys' fees and other reasonable
costs and expenses in connection with the enforcement of said rights  (including
the  enforcement  of any  arbitration  award in court)  regardless  of the final
outcome, unless and to the extent the arbitrators shall determine that under the
circumstances  recovery by the  Executive  of all or a part of any such fees and
costs and expenses would be unjust.

        20 . Assignment;  Successors and Assigns,  etc. Neither the Bank 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 and without such consent any  attempted  transfer or  assignment  shall be
null and of no effect;  provided,  however,  that the Bank may assign its rights
under this Agreement  without the consent of the Executive in the event the Bank
shall  hereafter  effect a  reorganization,  consolidate  with or merge into any
other Person,  or transfer all or substantially  all of its properties or assets
to any other Person. This Agreement shall inure to the benefit of and be binding
upon the Bank and the  Executive,  its  successors,  executors,  administrators,
heirs and permitted assigns.  In the event of the Executive's death prior to the
completion  by the Bank of all payments due him under this  Agreement,  the Bank
shall  continue  such  payments to the  Executive's  beneficiary  designated  in
writing  to the Bank prior to his death (or to his  estate,  if he fails to make
such designation).

        21 . Enforceability. If any portion or provision of this Agreement shall
to any extent be  declared  illegal  or  unenforceable  by a court of  competent
jurisdiction,  then the remainder of this Agreement,  or the application of such
portion  or  provision  in  circumstances  other than those as to which it is so
declared  illegal or  unenforceable,  shall not be  affected  thereby,  and each
portion and provision of this  Agreement  shall be valid and  enforceable to the
fullest extent permitted by law.
<PAGE>
        22  .  Prior  Agreements.   This  Agreement  supersedes  the  Employment
Agreement made as of November 13, 1989, as subsequently  amended, by and between
the Executive and the Bank.  The Executive  hereby  represents and warrants that
the execution of this Agreement and the performance of his obligations hereunder
will not  breach or be in  conflict  with any other  agreement  to which he is a
party or is  bound,  and that he is not now  subject  to any  covenants  against
competition  or similar  covenants  which would  affect the  performance  of his
obligations hereunder.

        23 . 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,  to the
Executive at the last address the  Executive  has filed in writing with the Bank
or,  in the case of the  Bank,  at its main  office,  attention  of the Board of
Directors.

        24 . Amendment  and Waiver.  This  Agreement  may be amended or modified
only by a written  instrument  signed by the  Executive  and by duly  authorized
representatives  of the  Bank.  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.

        25 . Governing  Law.  This  Agreement  shall be  construed  under and be
governed  in all  respects  by the  substantive  laws  of  the  Commonwealth  of
Massachusetts, without regard to its principles of conflicts of laws.

        26 . Definition of "Person".  For purposes of this  Agreement,  the term
"Person" shall mean an individual, a corporation, an association, a partnership,
an estate, a trust and any other entity or organization.

        27 . Establishment  of a Holding  Company.  The stockholders of the Bank
have approved the formation of Ipswich Bancshares,  Inc., a holding company (the
"Holding  Company") for the Bank ("Holding  Company  Reorganization").  Once the
Holding  Company  Reorganization  is  completed,  the  Company  will be the sole
stockholder of the Bank.  Notwithstanding any other provision of this Agreement,
the Holding Company  Reorganization shall not constitute a Change in Control (as
defined in Section ).

        IN WITNESS  WHEREOF,  this  Agreement and the amendment and  restatement
hereof  have been  executed  as a sealed  instrument  by the  Bank,  by its duly
authorized officer, and by the Executive, as of the dates first above written.

ATTEST:                               IPSWICH SAVINGS BANK

                                         By:
-------------------------------            -------------------------------------

                                         Title:
                                               ---------------------------------
[Seal]

WITNESS                                  EXECUTIVE

                                         /s/ David L. Grey
-------------------------------          ---------------------------------------
                                         David L. Grey