Exhibit 10.11

                                                                  Execution Copy

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

        AGREEMENT made as of the 18th day of June, 1997, as amended and restated
as of the 17th day of June,  1998 and the 18th day of May,  1999 by and  between
IPSWICH  SAVINGS  BANK, a  Massachusetts-chartered  saving  bank,  with its main
office in  Ipswich,  Massachusetts  (the  "Bank")  and  Francis  Kenney of North
Andover, Massachusetts (the "Executive").

                                   WITNESSETH

        WHEREAS,  in recognition of the  Executive's  contribution to the growth
and  success  of the  Bank,  the  parties  hereto  desire  to  provide  for  the
Executive's  continued  employment by the Bank by entering into this  Employment
Agreement;

        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 Senior Vice  President  and Chief  Financial  Officer,  on the
terms and conditions hereinafter set forth.

        2 .  Capacity.  The  Executive  shall  serve  the  Bank as  Senior  Vice
President, Treasurer and Chief Financial 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 27) the
Executive  shall serve as Senior Vice President and Chief  Financial  Officer of
Ipswich  Bancshares  (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  eighteen  months  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  eighteen  months.  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 the
eighteen month anniversary of (i) 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 $65,000
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 three
(3) 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 unreasonably withheld.

            (e) No Impact on Options.  Nothing in this Agreement  shall have any
affect on the  Executive's  rights under stock options  granted to the Executive
pursuant to the Bank's stock option plans.

        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
<PAGE>
            (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.

            (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  Chief  Financial
                     Officer,  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 Chief Financial Officer,  or
                     to continue the Executive in such office;

                     (2) the failure by the Bank to comply  with the  provisions
                     of Section 4(a);
<PAGE>
                     (3) 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:

                     (4) 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;

                     (5) 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;

                     (6) A reasonable  determination by the Executive that, as a
                     result of a Change in Control,  his working conditions have
                     significantly worsened; or

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

            (c) Change in Control. For the purposes of this Agreement "Change in
Control"  shall mean the  occurrence  of any one or more of the  following  four
events:

                     (1) Any  "person"  (as such term is used in Sections  13(d)
                     and 14(d) of the  Securities  Exchange Act of 1934),  other
                     than the Company or the Bank,  becomes a "beneficial owner"
                     (as such term is defined in Rule 13d-3 as promulgated under
                     the Securities Exchange Act of 1934) directly or indirectly
                     of securities  representing 25% or more of the total number
                     of votes that may be cast for the  election of Directors of
                     the  Company  or the Bank and two  thirds  of the  Board of
                     Directors of the Company or the Bank (the  "Board") has not
                     consented to such event prior to its  occurrence  or within
                     sixty (60) days  thereafter,  provided  that if the consent
                     occurs  after  the  event,  it shall  only be valid for the
                     purposes  of  this  paragraph  (i)  if a  majority  of  the
                     consenting  Board is  comprised of Directors of the Company
                     or the Bank who were  Directors  of the Company or the Bank
                     immediately prior to the event;
<PAGE>
                     (2) Within two years after a merger,  consolidation or sale
                     of assets involving the Company or the Bank, or a contested
                     election  of  a  Company  or  a  Bank   Director,   or  any
                     combination  of the  foregoing,  the  individuals  who were
                     Directors  of the  Company  or the Bank  immediately  prior
                     thereto shall cease to constitute a majority of the Board;

                     (3) Within two years after a tender offer or exchange offer
                     for voting  securities  of the  Company or the Bank  (other
                     than by the Company or the Bank),  the individuals who were
                     Directors  of the  Company  or the Bank  immediately  prior
                     thereto shall cease to constitute a majority of the Board.

        Under  no  circumstances   shall  the  Holding  Company   Reorganization
constitute a Change in Control.

            (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 majority 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 8(a) or termination  by the Bank
without  cause  pursuant  to Section , 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 annual bonus
        paid during the fiscal year  preceding the  termination  of  employment,
        plus (c) all accrued vacation; plus

                (2) Severance  Pay. In the event of termination of employment by
        either the  Executive  for Good Reason  pursuant to Section  8(a) or the
        Bank  without  cause  pursuant  to  Section  9, the  Executive  shall be
        entitled  to a  severance  benefit  equal  to 150% of the sum of (x) the
        annual bonus paid to the Executive  during the fiscal year preceding the
        termination  of employment and (y) the  Executive's  then current annual
        base salary.
<PAGE>
            (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.

            (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 below) as of the Long Term Disability Date, when
combined with the Executive's  disability income payments under the Bank's group
long term  disability  plan. 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 11 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.

        The term "Cash  Compensation"  shall mean the  Executive's  annual  base
salary as of the Long Term  Disability  Date plus the annual  cash bonus paid to
the Executive during the fiscal year preceding the Long Term Disability Date.

        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.
<PAGE>
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 ), 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 9.

        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.

        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.  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 . Code Section 280G Reduction.  Notwithstanding  any other provisions
of this Agreement or of any other agreement,  contract,  understanding,  plan or
program  entered  in to or  maintained  by the Bank,  if any  payment or benefit
received or to be received by the Executive in connection  with the  termination
of the Executive's  employment  (whether pursuant to the terms of this Agreement
or any other plan,  arrangement or agreement with (a) the Bank or any Affiliate,
Parent or Subsidiary of the Bank, or (b) any person  affiliated with the Bank or
any such person) (all such payments and/or benefits,  including the payments and
benefits,  if any, under this Agreement,  being  hereinafter  referred to as the
"Total  Payments")  would  subject  the  Executive  to an Excise Tax (as defined
below),  and if such Total Payments less the Excise Tax is less than the maximum
amount of Total  Payments  which  would  otherwise  be payable to the  Executive
without  imposition of an Excise Tax, then, to the extent necessary to eliminate
the  imposition of an Excise Tax (and after taking into account any reduction in
the Total Payments  provided by reason of Section 280G of the Code in such other
plan, arrangement or agreement), (i) the cash and non-cash payments and benefits
payable  under this  Agreement  shall first be reduced (but not below  zero),and
(ii) all other cash and non-cash  payments  and  benefits  shall next be reduced
(but not below zero);  but only if, by reason of any such  reduction,  the Total
Payments with any such  reduction  shall exceed the Total  Payments  without any
such  reduction.  For  purposes of this  Section 18, (A) no portion of the Total
Payments the receipt or enjoyment of which the Executive shall have  effectively
waived in writing prior to the date of termination of employment  shall be taken
into account,  (B) no portion of the Total  Payments shall be taken into account
which in the opinion of tax counsel  selected in good faith by the Bank does not
constitute a "parachute payment" within the meaning of Section 280G(b)(2) of the
Code, including (without  limitation) by reason of Section  280G(b)(4)(A) of the
Code,  and (C) the value of any  non-cash  payment or  benefit  or any  deferred
payment or benefit  included in the Total  Payments  shall be  determined by the
Bank's  independent  auditors  in  accordance  with the  principles  of Sections
280G(d)(3)  and  (4) of the  Code.  Except  as  otherwise  provided  above,  the
foregoing  calculations  and  determinations  shall be made in good faith by the
Bank and the Executive. If no agreement on the calculations is reached, then the
Executive and the Bank will agree to the selection of an accounting firm to make
the  calculations.  If no agreement can be reached regarding the selection of an
accounting firm the Bank will select a prominent national  accounting firm which
has no current or recent business relationship with the Bank. The Bank shall pay
all costs and expenses  incurred in  connection  with any such  calculations  or
determinations.  Any calculations or determinations made in accordance with this
Section 18 shall be conclusive and binding on all parties.

        For  purposes of this  Section 18, the term  "Excise Tax" shall mean any
excise tax imposed under  Section 4999 of the Code and/or any successor  section
thereto.

        19 . Arbitration of Disputes. 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.

        22 . Prior Agreements. This Agreement supersedes the Severance Agreement
made as of September  27, 1995 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 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.

        IN  WITNESS  WHEREOF,  the  Company,  the  Bank and the  Executive  have
executed this Agreement under seal as of the dates first above written.

ATTEST:                               IPSWICH SAVINGS BANK

______________________________        By:

                                               David L. Grey, President

[Seal]

WITNESS                               EXECUTIVE

------------------------------
                                          Francis Kenney

The undersigned hereby guarantees the
obligations of Ipswich Savings Bank under the
foregoing agreement

IPSWICH BANCSHARES, INC.

By:

  David L. Grey, President