Document:

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                                                                    Exhibit 10.2

                                                                  EXECUTION COPY

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT, made effective as of January 1, 2000 by and between
Mellon Financial Corporation, a Pennsylvania corporation (the "Company"), and
Stephen E. Canter (the "Executive")

                                WITNESSETH THAT:

         WHEREAS, the Executive is currently serving as the President of the
Dreyfus Corporation ("Dreyfus"), and the Company desires to induce the Executive
to continue to serve in such capacity effective as of January 1, 2000, and the
Executive is willing to continue to serve in such capacity, on the terms and
conditions herein set forth;

         NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto, each intending to be legally bound hereby, agree
as follows:

         1. Employment. The Company agrees to continue to employ the Executive,
and the Executive agrees to continue to be employed by the Company, for the Term
provided in Paragraph 3(a) below and upon the other terms and conditions
hereinafter provided. The Executive hereby represents and warrants that he has
the legal capacity to execute and perform this Agreement, that it is a valid and
binding agreement, enforceable against him according to its terms, and that its
execution and performance by him do not violate the terms of any existing
agreement or understanding to which the Executive is a party.

         2. Position and Responsibilities. During the Term, the Executive agrees
to serve as President of Dreyfus. In his capacity as President of Dreyfus,
Executive shall be responsible for the general management of the affairs of
Dreyfus. The Executive shall be given such authority as is appropriate to carry
out the duties described above. The Executive agrees to serve, if elected, as an
officer and/or director of any other subsidiary or affiliate of the Company.

         3. Term and Duties.

         (a) Term of Agreement. The term of the Executive's employment under
this Agreement shall commence on January 1, 2000 and shall continue thereafter
through December 31, 2002 (the "Term"). Unless either party shall have given
written notice to the other on or before June 30, 2002 that the Executive's
employment with the Company and its subsidiaries and affiliates (collectively,
the "Companies") will terminate at the end of the Term, the parties shall be
obligated during the period from July 1 to November 15, 2002 to negotiate in
good faith an agreement for the continuation of the Executive's employment.

         (b) Duties. During the Term, and except for illness or incapacity and
reasonable vacation periods of no more than 4 weeks in any calendar year (or
such other periods as shall be consistent with the Companies' policies for other
key executives), the Executive shall devote all of his business time, attention,
skill and efforts exclusively to the business and affairs of the Companies,
shall not be engaged in any other business activity, and shall perform and
discharge well and faithfully the duties which may be assigned to him from time
to time and that are

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consistent with his position and status; provided, however, that nothing in this
Agreement shall preclude the Executive from devoting time during reasonable
periods required for:

                  (i) Serving, in accordance with the Companies' policies, as a
         director of any company or organization involving no actual or
         potential conflict of interest with the Companies;

                  (ii) delivering lectures and fulfilling speaking engagements;

                  (iii) engaging in charitable and community activities; and

                  (iv) investing his personal assets in businesses in which his
         participation is solely that of an investor in such form or manner as
         will not violate Section 7 below or require any services on the part of
         the Executive in the operation or the affairs of such business,

provided, however, that such activities do not materially affect or interfere
with the performance of the Executive's duties and obligations to the Companies.

         4. Compensation. For all services rendered by the Executive in any
capacity required hereunder during the Term, including, without limitation,
services as an executive, officer, director, or member of any committee of
Dreyfus, the Company or any subsidiary, affiliate or division of any thereof,
the Executive shall be compensated as set forth below:

                  (a) Base Salary. The Executive shall continue to be paid a
         fixed salary ("Base Salary") of $450,000 per annum as of the effective
         date of this Agreement. The Base Salary amount will be periodically
         reviewed at the times and in the manner generally applicable to members
         of the Company's Senior Management Committee and may be increased, but
         not decreased, during the Term. Base Salary shall be payable in
         accordance with the customary payroll practices of the Companies, but
         in no event less frequently than monthly.

                  (b) Annual Bonus. The Executive shall be eligible to be paid
         an annual bonus of up to three times the amount of his Base Salary in
         effect at the end of the annual bonus period. If the Executive receives
         an incentive rating of "1" for an annual bonus period, management of
         the Company will recommend to the Human Resources Committee of the
         Board of Directors ("HRC") that the Executive receive 100% of his bonus
         potential for such annual bonus period. If the Executive's incentive
         rating for such annual bonus period is less than "1," management of the
         Company will recommend to the HRC that he receive for such annual bonus
         period the percentage of his bonus potential equal to the percentage of
         bonus potential that management recommends for similarly rated other
         members of the Senior Management Committee. It is understood that the
         Executive may receive some portion of his annual bonus in the form of
         an award of restricted stock, with such awards to be made on the same
         terms as apply to other members of the Senior Management Committee.

                  (c) Equity-Based Compensation. Effective October 1, 1999, the
         Company granted to the Executive 151,803 shares of Third Century
         Performance Accelerated Restricted Stock (the "Third Century PARS")
         which shall derestrict based upon the

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         achievement of annual and cumulative performance goals over the Term as
         set forth in the Third Century PARS Agreement, dated October 1, 1999,
         issued to Executive. It is not contemplated that further awards under
         the Company's Long-Term Profit Incentive Plan (1996) (together with any
         successor Plan, the "Long-Term Plan") will be granted to the Executive
         during the Term.

                  (d) Additional Benefits. Except as modified by this Agreement,
         the Executive shall be entitled to participate in all compensation or
         employee benefit plans or programs, and to receive all benefits,
         perquisites and emoluments, which are generally available to members of
         the Company's Senior Management Committee under any plan or program now
         or hereafter established and maintained by the Company or Mellon Bank,
         N.A. for senior officers, to the extent permissible under the general
         terms and provisions of such plans or programs and in accordance with
         the provisions thereof, including group hospitalization, health, dental
         care, senior executive life or other life insurance, travel or accident
         insurance, disability plans, tax-qualified or non-qualified pension,
         savings, thrift and profit-sharing plans, deferred compensation plans,
         sick-leave plans, and executive contingent compensation plans,
         including, without limitation, capital accumulation programs and stock
         purchase plans. Notwithstanding the foregoing, the Executive
         acknowledges and agrees that the severance payments provided in certain
         circumstances under this Agreement are in lieu of any rights which the
         Executive might otherwise have under any and all other displacement,
         separation or severance plans or programs of the Companies, including
         without limitation the Mellon Financial Corporation Displacement
         Program, and the Executive hereby waives all rights to participate in
         any of such plans or programs in the event of the termination of his
         employment during the Term.

         5. Business Expenses. The Companies shall pay or reimburse the
Executive for all reasonable travel and other expenses incurred by the Executive
in connection with the performance of his duties and obligations under this
Agreement, subject to the Executive's presentation of appropriate vouchers in
accordance with such policies and procedures as the Companies from time to time
establish for senior officers.

         6. Effect of Termination of Employment; Disability.

         (a) Without Cause Termination or Constructive Discharge. In the event
the Executive's employment hereunder terminates due to either a Without Cause
Termination or a Constructive Discharge, earned but unpaid Base Salary as of the
Date of Termination (as defined in Section 14(b)) and any earned but unpaid
bonuses for prior years (collectively, the "Accrued Obligations") shall be
payable in full. In addition, subject to (1) the Executive's continuing
compliance with his obligations under the provisions of Section 7 below and (2)
the Executive's execution and delivery to the Company of a separation agreement,
including an irrevocable general release of claims, in a form acceptable to the
Company, the Executive may continue to earn the following termination benefits:

                  (i)  the Company shall:

                           (A) continue to pay the Executive's Base Salary, as
                  in effect at the Date of Termination, from the Date of
                  Termination until the end of the Term; and

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                           (B) pay to the Executive for the year of termination
                  and for each subsequent calendar year, if any, during the
                  remainder of the Term, an amount equal to the Cash Bonus
                  Amount of the highest annual bonus awarded to the Executive
                  for any year in the three years preceding the Date of
                  Termination, such payments to be made at the normal times for
                  payment of bonuses under the annual bonus plan applicable to
                  the Executive (the "Bonus Plan").

         With respect to the payments provided for in this Section 6(a)(i), the
         Executive shall be entitled, to the extent permitted by law as
         determined by the Company in good faith, to participate in any
         compensation deferral plans or arrangements then provided by the
         Company to senior executives.

                  (ii) To the extent permitted by law, the Company shall
         continue to provide the Executive for the period of salary continuation
         set forth in Section 6(a)(i)(A) above with (A) service credit under all
         qualified and nonqualified retirement plans and excess benefit plans in
         which the Executive participated as of his Date of Termination and (B)
         eligibility to receive employer matching contributions on any pre-tax
         contributions made by the Executive to the Retirement Savings Plan at
         the maximum rate which would have been available to the Executive had
         his employment continued.

                  (iii) The Company shall continue to provide Executive (and
         Executive's dependents, if applicable) for the period of salary
         continuation set forth in Section 6(a)(i)(A) above with medical,
         dental, accident, disability and life insurance benefits upon
         substantially the same terms and conditions (including contributions
         required by the Executive for such benefits) as those of the applicable
         employee benefit plans in effect from time to time as applied to
         employees; provided, however, that if the Executive cannot continue to
         participate under the terms of the Company plans providing such
         benefits, the Company shall otherwise provide such benefits on (as
         nearly as reasonably practicable) the same after-tax basis as if
         continued participation had been permitted. Notwithstanding the
         foregoing, in the event the Executive becomes re-employed with another
         employer and becomes eligible to receive welfare benefits from such
         employer, the welfare benefits described herein shall be secondary to
         such benefits during the period of the Executive's eligibility, but
         only to the extent that the Company reimburses the Executive for any
         increased cost and provides any additional benefits necessary to give
         the Executive the benefits provided hereunder.

                  (iv) The Company shall provide the Executive with career
         counseling and outplacement services of the type historically provided
         by the Company to similarly situated executives of comparable rank and
         responsibility.

                  (v) To the extent that the restrictions on the Third Century
         PARS have not lapsed at the Date of Termination, the Third Century PARS
         shall remain outstanding, and the restrictions thereon shall lapse in
         full at the close of business on September 30, 2006.

         (b) Disability. In the event of the Executive's Disability, the Company
may, by giving a Notice of Disability as provided in Section 14(c), remove the
Executive from active employment

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and in that event shall provide the Executive for the remainder of the Term with
the same payments and benefits as those provided in Section 6(a), except that:

                  (i) in lieu of the bonus payments provided in Section
         6(a)(i)(B), the Executive shall receive, at the same time as bonus
         payments for the year of Disability would otherwise be made under the
         Bonus Plan, a prorated bonus for the year of Disability only equal to
         the Cash Bonus Amount of the bonus award the Executive would have
         received had he been actively employed throughout the bonus year,
         prorated on a daily basis as of the Date of Disability;

                  (ii) except for Accrued Obligations, Base Salary payments
         shall be offset by any amounts otherwise payable to the Executive under
         the Company's disability program generally available to other
         employees; and

                  (iii) to the extent that the restrictions on the Third Century
         PARS have not lapsed at the Date of Disability, the restrictions
         thereon shall lapse in full as of the Date of Disability.

         (c) Death. In the event the Executive's employment hereunder terminates
due to death, Accrued Obligations as of the date of death shall be payable in
full, and the Company shall pay to the Executive's estate, at the same time as
bonus payments for the year of death would otherwise be made under the Bonus
Plan, a prorated bonus for the year of death only equal to the Cash Bonus Amount
of the bonus award the Executive would have received had he been employed
throughout the bonus year, prorated on a daily basis as of the date of death.
The Third Century PARS shall become immediately and fully vested.

         (d) Other Termination of Employment. In the event the Executive's
employment hereunder terminates due to a Termination for Cause or the Executive
terminates employment for reasons other than due to a Without Cause Termination,
a Constructive Discharge, Disability or death, Accrued Obligations as of the
Date of Termination shall be payable in full, and vested stock options may be
exercised according to the terms of the Long-Term Plan. No other payments shall
be made, or benefits provided, by the Company except for benefits which have
already become vested under the terms of employee benefit programs maintained by
the Company or its affiliates for its employees generally as provided in Section
10.

         (e) Definitions. For purposes of this Agreement, the following terms
have the following meanings:

                  (i) "Termination for Cause" means, to the maximum extent
         permitted by applicable law, a termination of the Executive's
         employment by the Company because the Executive has (A) been convicted
         of or has entered a plea of nolo contendere with respect to a felony,
         or any misdemeanor evidencing moral turpitude, deceit, dishonesty or
         fraud, including without limitation a criminal offense covered by
         Section 19 of the Federal Deposit Insurance Act, 12 U.S.C. Section
         1829, or any successor provision, (B) engaged in conduct which
         constitutes a willful and continued failure to perform his duties
         hereunder (other than by reason of disability), after notice to the
         Executive and reasonable opportunity to correct the same, (C) been
         dismissed for violating a material provision of

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         the Company's Code of Conduct (as the same may be modified from time to
         time), (D) willfully engaged in any misconduct which has the effect of
         being injurious to the Company or any of its affiliates or (E) violated
         the representations made in Section 1 above, or any of the provisions
         of Sections 7(c), 7(d) or 7(e) below; provided, however, that the
         Company has given the Executive advance notice of such Termination for
         Cause including the reasons therefor, together with a reasonable
         opportunity for the Executive to dispute the factual basis of such
         notice.

                  (ii) "Constructive Discharge" means a termination of the
         Executive's employment by the Executive due to a failure of the Company
         or any successor to fulfill its obligations under this Agreement in any
         material respect, including (A) any material change by the Companies
         without the consent of the Executive in the functions, duties or
         responsibilities of the Executive's position with the Companies which
         would reduce the ranking or level, dignity, responsibility, importance
         or scope of such position, (B) any imposition on the Executive of a
         requirement to be permanently based at a location more than fifty miles
         from his principal business location as of the date of this Agreement
         without the consent of the Executive, or (C) any reduction without the
         consent of the Executive in the Executive's Base Salary below the
         amount then in effect under Section 4(a) hereof; provided that no
         change in position, responsibilities or compensation, attempted
         relocation or other event shall be deemed to constitute a Constructive
         Discharge unless the Executive provides written notice thereof to the
         Company at least 30 days in advance of any Notice of Termination with
         respect thereto and gives the Company the opportunity to remedy or cure
         the asserted basis for such Constructive Discharge within such 30-day
         period.

                  (iii) "Without Cause Termination" means a termination of the
         Executive's employment by the Company other than due to Disability or
         expiration of the Term and other than a Termination for Cause.

                  (iv) "Disability" for purposes of this Agreement means the
         Executive shall be disabled so as to be unable to perform for 180 days
         in any 365-day period, with or without reasonable accommodation, the
         essential functions of his then existing position or positions under
         this Agreement, as determined by the person or entity responsible for
         making determinations under the Company's long-term disability plan or,
         if any such person or entity is not able for any reason to make this
         determination, by another independent person or entity experienced in
         this field selected by the Company and acceptable to the Executive or
         his representative.

                  (v) The "Cash Bonus Amount" of a Bonus Plan award for any
         period means the sum of (A) the amount of such award paid or payable in
         cash (whether or not deferred) plus (B) with respect to any portion of
         the award paid or payable in restricted stock, phantom stock or other
         interests in Company securities, the amount of cash which would
         otherwise have been paid, excluding any premium in value given to
         compensate for risk of forfeiture or otherwise.

                  (vi) The "Date of Termination" and "Date of Disability" shall
         have the meanings ascribed to them in Section 14. To the fullest extent
         permitted by applicable law; to the

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         extent this Agreement requires the payment of Base Salary and/or
         the provision of coverages and benefits subsequent to the Date of
         Termination or Date of Disability, the Executive's Date of Termination
         or Date of Disability, as applicable, shall not be treated as a
         termination of employment (a "Benefit Plan Termination Date") from
         the Companies for purposes of determining the Executive's rights,
         responsibilities and tax treatment under any and all employee pension,
         welfare and fringe benefit plans maintained by the Companies. Rather,
         the Benefit Plan Termination Date shall be the day following the last
         day for which any Base Salary and/or coverages and benefits are
         required to be provided by this Agreement."

         (f) Change in Control. Notwithstanding anything else contained herein,
if any termination of the Executive's employment hereunder constitutes a
"Qualifying Termination" during the "Termination Period," each as defined in the
Agreement between the Executive and the Company dated as of March 2, 1999 (the
"Prior Agreement"), then the provisions of the Prior Agreement shall apply to
such termination in lieu of the provisions of this Section 6. Section 5 of the
Prior Agreement shall apply to any Payment (as therein defined) under this
Agreement to the extent provided therein. The definition of "Change in Control"
in Section 1(c) of the Prior Agreement is hereby amended by changing the phrase
"at least a majority of the members of the board of directors of the Parent
Corporation" in clause (C) of Paragraph 1(c)(iii) to read "at least half of the
members of the board of directors of the Parent Corporation."

         7. Other Duties of Executive During and After Term.

         (a) Confidential Information. Executive acknowledges that, by reason of
his duties, he will be given or may have access to and become informed of
confidential or proprietary information which the Companies possess or to which
the Companies have rights, which relates to the Companies and which is not
generally known to the public or in the trade and is a competitive asset of the
Companies, or information which constitutes a "trade secret" of the Companies,
as that term is defined by the Uniform Trade Secrets Act, as amended and
approved by the National Conference of Commissioners on Uniform State Laws in
1985 ("Confidential Information"), including without limitation, (i) the
Companies' planning data and marketing strategies; (ii) non-public terms of any
new products and investment strategies of the Companies; (iii) non-public
information relating to the Companies' personnel matters; (iv) the Companies'
financial results and information about their business condition; (v) non-public
terms of any investment, management or advisory agreement or other material
contract of the Companies; (vi) the Companies' proprietary software and related
documents; (vii) the Companies' client and prospecting lists and contact persons
at such clients and prospects; and (viii) non-public material information
concerning the Companies' customers or their operations, condition (financial or
otherwise) or plans. "Confidential Information" shall not include any
information (A) generally known to the public except as a result of disclosure
by Executive, (B) disclosed by the Company without an obligation of
confidentiality on the part of the recipient or (C) required to be disclosed by
law, rule, regulation or order without an obligation of confidentiality on the
part of the recipient, provided that prior to making any disclosure under this
clause (C), Executive shall provide the Company with notice and the opportunity
to contest such disclosure.

         Executive acknowledges that his employment creates a relationship of
confidence and trust between himself and the Companies with respect to
Confidential Information and that

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Confidential Information, whether compiled or created by him or the Companies,
is and shall remain the sole property of the Companies. Executive will
faithfully keep Confidential Information in strict confidence and shall not,
either directly or indirectly, at any time, while an employee of the Companies
or thereafter, make known, divulge, reveal, furnish, make available, or use
(except for use in the regular course of his duties for the Companies) any
Confidential Information without the written consent of the Company. Executive
understands and acknowledges that his obligations under this Section 7 will
survive termination of his employment and will continue indefinitely unless and
until any such Confidential Information has become, in the Company's reasonable
judgment, stale, or, through no fault of Executive's, generally known to the
public or he is required by law (after providing the Company with notice and an
opportunity to contest such requirement) to make disclosure.

         The Executive's obligations under this Section 7(a) are in addition to,
and not in limitation or preemption of, all other obligations of confidentiality
which the Executive may have to the Companies under general or specific legal or
equitable principles.

         (b) Return Of All Property And Documents. Upon the termination of his
employment for any reason or no reason, the Executive immediately shall return
to the Companies all of their property, including without limitation, all
documents (including copies) and information, however maintained (including
computer files, tapes, and recordings), concerning the Companies or acquired by
the Executive in the course and scope of his employment (excluding only those
documents relating solely to the Executive's own salary and benefits).

         (c) Non-Interference. Until the later of the end of the Term or two (2)
years after the termination of the Executive's employment, whether during or
after the Term and notwithstanding the cause of termination, the Executive shall
not (i) hire or employ, directly or indirectly through any enterprise with which
he is associated, any employee of the Companies having the rank of Vice
President of any of the Companies or above or (ii) recruit, solicit or induce
(or in any way assist another person or enterprise in recruiting, soliciting or
inducing) any such employee or any consultant, vendor or supplier of the
Companies to terminate or reduce such person's employment, consulting or other
relationship with the Companies. Without limiting clause (i) of the preceding
sentence, clause (ii) of the preceding sentence shall not be violated by the
making of general advertisements not specifically directed to employees of the
Companies.

         (d) Non-Solicitation. Until the later of the end of the Term or twelve
(12) months after the termination of the Executive's employment, whether during
or after the Term and notwithstanding the cause of termination, the Executive
shall not, directly or indirectly, in any capacity (i) solicit the business or
patronage of any Customer for any other person or entity, (ii) divert, entice,
or otherwise take away from the Companies the business or patronage of any
Customer, or attempt to do so, or (iii) solicit or induce any Customer to
terminate or reduce its relationship with the Companies.

         (e) Unfair Competition.

                  (i) Until six (6) months after the termination of the
         Executive's employment, whether during or after the Term and
         notwithstanding the cause of termination, the

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         Executive shall not, directly or indirectly, in any capacity (A)
         provide or assist with the provision of Relevant Financial Services,
         except as an employee of the Companies or (B) be employed by or
         affiliated or associated in a business capacity with any person or
         entity in the business of providing Relevant Financial Services other
         than the Companies.

                  (ii) Until the later of the end of the Term or twelve (12)
         months after the termination of the Executive's employment, whether
         during or after the Term and notwithstanding the cause of termination,
         the Executive shall not, directly or indirectly, in any capacity (A)
         provide or assist with the provision of Relevant Financial Services to
         a Customer of the Companies, except as an employee of the Companies or
         (B) be employed by or affiliated or associated in a business capacity
         with any person or entity other than the Companies which directly or
         indirectly provides or offers to provide Relevant Financial Services to
         any Customer of the Companies; provided that this Section 7(e)(ii) does
         not prohibit the Executive from being employed by or affiliated or
         associated with any person or entity after the termination of
         employment with the Companies and after the expiration of the period
         covered by Section 7(e)(i) so long as he does not have any direct or
         indirect involvement on behalf of any person or entity with respect to
         soliciting, managing, administering, supporting or retaining the
         Relevant Financial Services business provided or proposed to be
         provided to a Customer of the Companies.

                  (iii) Notwithstanding the foregoing, but without affecting the
         obligations of the Executive under any of the other provisions of this
         Section 7, the obligations of the Executive under this Section 7(e)
         shall not apply after December 31, 2002 unless, during any period of
         restriction under this Section 7(e) which follows that date, the
         Company pays to the Executive at the times otherwise payable under
         Section 4(a) hereof an amount equal to the sum of (A) Base Salary at
         the rate in effect on the date of termination of the Executive's
         employment and (B) (1) the average of the annual cash bonuses paid to
         the Executive for the two most recent years ending on or prior to the
         date of termination divided by (2) the number of pay periods in the
         calendar year. In the event the amount payable under clause (B) of the
         preceding sentence is not determinable at the time such payment would
         otherwise be made, such amount shall be paid to the Executive as soon
         as practicable after such amount has been determined.

         (f) Certain Definitions. For purposes of this Agreement:

                  (i) "Relevant Financial Services" shall mean (A) mutual fund
         management and related advisory services, (B) institutional asset and
         investment management and related advisory services and (C) any other
         services or products provided by the Companies from time to time which,
         at any time during the twelve (12) months preceding the termination of
         the Executive's employment, are within the scope of the Executive's
         responsibilities.

                  (ii) "Customer" means any person or entity to the extent that
         such person or entity (A) is receiving Relevant Financial Services from
         the Companies on the date of termination of the Executive's employment
         with the Companies, (B) received such services for compensation at any
         time during the one-year period immediately preceding the date of
         termination of the Executive's employment with the Companies or (C) at
         any

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         time during the one-year period immediately preceding the date of
         termination of the Executive's employment with the Companies was
         solicited by the Executive, directly or indirectly, in whole or in
         part, on behalf of the Companies to provide Relevant Financial
         Services.

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

         (h) Performance Record. The Executive understands, acknowledges and
agrees that the investment performance record (including without limitation
performance ratings or rankings provided by any rating or ranking service) of
any fund(s) or accounts of Customers with which he is associated while employed
at the Companies is attributable to a team of professionals of the Companies and
not solely the efforts of any single individual and that, therefore, the
performance records of the fund(s) or accounts managed by the Companies are and
shall be the exclusive property of the Companies.

         (i) Nondisparagement. During and after the Executive's employment,
notwithstanding the cause of termination, Executive and the Company each agrees
not to, and the Company shall cause its officers and directors not to, take any
action or make any statement, written or oral, to any current or former employee
of the Companies or to any other person which disparages Executive or the
Companies, their management, directors or shareholders, as applicable, or their
practices or which disrupts or impairs their normal operations, including
actions or statements (i) that would harm the reputation of Executive or the
Companies, as applicable, with their clients, suppliers, employees or the
public, or (ii) that would interfere with existing or prospective contractual or
employment relationships with clients, suppliers or individuals.

         (j) Remedies. The Company's obligation to make payments or provide any
benefits under this Agreement (except to the extent previously vested) shall
cease upon any violation of the provisions of this Section 7. In addition, in
the event of a violation by the Executive of the provisions of this Section 7,
the Company shall be entitled, if it shall so elect, to institute legal
proceedings to obtain damages for any such breach, or to enforce the specific
performance by the Executive of this Section 7 and to enjoin the Executive from
any further violation, and may exercise such remedies cumulatively or in
conjunction with such other remedies as may be available to the Companies at law
or in equity. The Executive agrees that it would be difficult to measure any
damages to the Companies which might result from any breach by the Executive of

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the promises set forth in this Section 7, and that in any event money damages
would be an inadequate remedy for any such breach. Accordingly, the Executive
agrees that if the Executive breaches any provision of this Agreement, the
Companies shall be entitled, in addition to all other remedies that they may
have, to an injunction or other appropriate equitable relief to restrain any
such breach, without showing or proving any actual damage to the Companies. In
the event the Company withholds any payment based upon a claimed violation of
this Section 7 and it is finally determined by a court that Executive is
entitled to such payment, the Company shall pay Executive interest on such
payment from the date originally due until the date paid at the rate applicable
to judgments under 28 U.S.C. Section 1961.

         (k) Survival; Authorization to Modify Restrictions. The Executive
acknowledges and agrees that the covenants of the Executive and the restrictions
contained in this Section 7 are intended to protect the Companies' interest in
its Confidential Information and its commercial relationships and goodwill with
its customers, prospective customers, vendors, suppliers, consultants and
employees. The Executive further acknowledges and agrees that the covenants of
the Executive and the restrictions contained in this Section 7 shall survive the
termination of this Agreement and any termination of the Executive's employment,
regardless of reason, for the periods stated herein and shall continue in full
force and effect regardless of any change in the Executive's title, duties,
responsibility, compensation or benefits while he remains employed by the
Companies; provided, however, that the covenants contained in Sections 7(d) and
7(e) shall not survive any termination of employment (i) for which a Notice of
Termination is given during the Termination Period following a Change in
Control, each as defined in the Prior Agreement or (ii) which is a termination
of employment described in the second sentence of Section 1(j) of the Prior
Agreement.

         The Executive represents that he has read and understands the
provisions of this Agreement, including this Section 7, that he has had the
opportunity to consult with counsel concerning such provisions, and that he
understands the effect of such provisions on his ability to earn his livelihood
upon any termination of his employment with the Company. The Executive
acknowledges that it would cause the Companies serious and irreparable injury
and cost if Executive were to use his ability and knowledge in competition with
the Companies or to otherwise breach the obligations contained in this Section 7
and, in view of the nature and level of his responsibilities and the level of
his compensation, agrees that the provisions of this Section 7 are reasonable.
Accordingly, it is the intention of the parties that the provisions of this
Section 7 shall be enforceable to the fullest extent permissible under
applicable law, but that if any portion or provision of this Agreement shall to
any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then (A) the court may amend such portion or provision so as to
comply with law in a manner consistent with the intention of this Agreement, (B)
the remainder of this Agreement, or the application of such illegal or
unenforceable portion or provision in circumstances other than those as to which
it is so declared illegal or unenforceable, shall not be affected thereby and
(C) each portion or provision of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.

         (l) Jurisdiction and Venue. The parties agree that any action by the
Company to enforce the covenants and restrictions contained in this Section 7
or any action by either party to obtain a judgment on an arbitrator's award
referred to in Section 9 may be instituted and maintained in the state or
federal courts in Pittsburgh, Pennsylvania or New York, New York or in any other

                                      -11-
<PAGE>

court having jurisdiction. Subject to the first sentence of Section 9 hereof,
the parties hereby irrevocably submit to the jurisdiction of the state and
federal courts in Pittsburgh, Pennsylvania and New York, New York in any suit,
action or proceeding arising under or relating to this Agreement and hereby
irrevocably waive any objections to the venue of any of such courts in any such
suit, action or proceeding, including any claim that any other court constitutes
a more appropriate or convenient forum.

         8. Proprietary Developments. Any and all inventions, products,
discoveries, improvements, processes, methods, computer software programs,
models, techniques, formulae, trade secrets, service marks, trademarks and works
of authorship (collectively, hereinafter referred to as "Intellectual
Property"), made, developed or created by the Executive (alone or in conjunction
with others, during regular hours of work or otherwise) during the Executive's
employment by the Companies, which may be directly or indirectly useful in, or
relate to, business conducted or to be conducted by the Companies shall be the
Companies' exclusive property and will be promptly disclosed by the Executive to
the Companies. The term "Intellectual Property" shall not be deemed to include
inventions, products, discoveries, improvements, processes, methods, computer
software programs, models, techniques, formulae, trade secrets, service marks,
trademarks or works of authorship which were in the possession of the Executive
prior to the Executive's employment by the Companies and which were not obtained
from or through the Companies. To the fullest extent permitted by law, such
Intellectual Property shall be deemed works made for hire. Executive hereby
transfers and assigns to the Company or its designated affiliate any proprietary
rights which Executive may have or acquire in any such Intellectual Property,
and Executive waives any license or other special right which Executive may have
or accrue therein. Executive agrees to execute any documents and to take any
actions that may be required, as reasonably determined by the Company's counsel,
to effect and confirm such transfer, assignment and waiver.

         The Executive will, upon the Company's request, execute any documents
necessary or advisable in the opinion of the Company's counsel to direct the
issuance of patents, trademarks or copyrights to the Company or its designated
affiliate with respect to such Intellectual Property as are to be the Companies'
exclusive property under this Section 8 or to vest in the Company or such
affiliate title to such Intellectual Property, the expense of securing any
patent, trademark or copyright, however, to be borne by the Company or such
affiliate. The Executive will keep confidential and will hold for sole benefit
of the Companies any Intellectual Property which is to be their exclusive
property under this Section 8 for which no patent, trademark or copyright is
issued.

         The Executive agrees that non-public terms of Intellectual Property
shall constitute Confidential Information within the meaning of Section 7(a).

         The foregoing provisions of this Section 8 shall be binding upon the
Executive's heirs and legal representatives. The agreements of the Executive in
this Section shall be enforceable by injunction and shall survive the
termination of this Agreement.

         9. Resolution of Disputes. Except as otherwise provided in Section
7(j), any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in New York, New York, by
three arbitrators in accordance with the rules of the

                                      -12-
<PAGE>

American Arbitration Association then in effect. Judgment may be entered on
the arbitrators' award in any court having jurisdiction.

         10. Full Settlement; No Mitigation: Non-Exclusivity of Benefits. Except
as provided in Section 6(f), the Company's obligation to make any payment
provided for in this Agreement and otherwise to perform its obligations
hereunder shall be in lieu and in full settlement of all other severance
payments to the Executive under any other severance plan, arrangement or
agreement of the Company and its affiliates, including but not limited to the
Mellon Financial Corporation Displacement Program, and in full settlement of any
and all claims or rights of the Executive for severance, separation and/or
salary continuation payments resulting from the termination of his employment.
In no event shall the Executive be obligated to seek other employment or to take
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement, and except as specifically provided
herein, such amounts shall not be reduced whether or not the Executive obtains
other employment. Except as provided above in this Section 10, nothing in this
Agreement shall prevent or limit the Executive's continuing or future
participation in any plan, program, policy or practice provided by the Company
or any of its affiliates for which the Executive may qualify, nor, except as
otherwise specifically provided in this Agreement, shall anything herein limit
or otherwise affect such rights as the Executive may have under any contract or
agreement with the Company or any of its affiliates, including without
limitation any stock option or restricted stock agreement. Amounts or benefits
which are vested benefits or which the Executive is otherwise entitled to
receive under any such plan, program, policy, practice, contract or agreement
prior to, at or subsequent to any Date of Termination or Date of Disability
shall be paid or provided in accordance with the terms of such plan, program,
policy, practice, contract or agreement except as explicitly modified by this
Agreement.

         11. Employment and Payments by Affiliates. Except as herein otherwise
specifically provided, references in this Agreement to employment by the Company
shall include employment by affiliates of the Company, and the obligation of the
Company to make any payment or provide any benefit to the Executive hereunder
shall be deemed satisfied to the extent that such payment is made or such
benefit is provided by any affiliate of the Company.

         12. Withholding Taxes. The Companies may directly or indirectly
withhold from any payments made under this Agreement all Federal, state, city or
other taxes as shall be required pursuant to any law or governmental regulation
or ruling.

         13. Consolidation, Merger, or Sale of Assets. Nothing in this Agreement
shall preclude the Company from consolidating or merging into or with, or
transferring all or substantially all of its assets to, another corporation or
entity which assumes this Agreement and all obligations and undertakings of the
Company hereunder. Upon such a consolidation, merger or transfer of assets and
assumption, the term "Company" as used herein shall mean such other corporation
or entity, and this Agreement shall continue in full force and effect.

         14.  Notices.

         (a) General. All notices, requests, demands and other communications
required or permitted hereunder shall be given in writing and shall be deemed to
have been duly given when

                                      -13-
<PAGE>

delivered or 5 days after being deposited in the United States mail, certified
and return receipt requested, postage prepaid, addressed as follows:

                  (i)      To the Company:

                           Manager-Human Resources Department
                           Mellon Bank, N.A.
                           One Mellon Bank Center
                           Pittsburgh, Pennsylvania  15258

                  (ii)     To the Executive:

                           Stephen E. Canter
                           71 E. 77th Street, Apt. #6D
                           New York, NY  10021

                           with a copy to:

                           Beth J. Felder, Esquire
                           Epstein Becker & Green, P.C.
                           75 State Street
                           Boston, MA  02109

or to such other address as the addressee party shall have previously specified
in writing to the other.

         (b) Notice of Termination. Except in the case of death of the
Executive, any termination of the Executive's employment hereunder, whether by
the Executive or the Company, shall be effected only by a written notice given
to the other party in accordance with this Section 14 (a "Notice of
Termination"). Any Notice of Termination shall (i) indicate the specific
termination provision in Section 6 relied upon, (ii) in the case of a
termination for Cause or a Constructive Discharge, set forth in reasonable
detail the facts and circumstances claimed to provide a basis for such
termination and (iii) specify the effective date of such termination of
employment (the "Date of Termination"), which shall not be less than 15 days nor
more than 60 days after such notice is given. The failure of the Executive or
the Company to set forth in any Notice of Termination any fact or circumstance
which contributes to a showing of Cause or Constructive Discharge shall not
waive any right of the Executive or the Company hereunder or preclude the
Executive or the Company from asserting such fact or circumstance in enforcing
the Executive's or the Company's rights hereunder.

         (c) Notice of Disability. Any finding of Disability by the Company
shall be effected only by a written notice given to the Executive in accordance
with this Section 14 (a "Notice of Disability"). Any Notice of Disability shall
(i) set forth in reasonable detail the facts and circumstances claimed to
provide a basis for such finding of Disability and (ii) specify an effective
date (the "Date of Disability"), which shall not be less than 10 days after such
notice is given. The failure of the Company to set forth in any Notice of
Disability any fact or circumstance which contributes to a showing of Disability
shall not waive any right of the

                                      -14-
<PAGE>

Company hereunder or preclude the Company from asserting such fact or
circumstance in enforcing the Company's rights hereunder.

         15. No Attachment. Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or
to execution, attachment, levy or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect; provided, however, that nothing in this Section
15 shall preclude the assumption of such rights by executors, administrators, or
other legal representatives of the Executive or his estate or their assigning
any rights hereunder to the person or persons entitled thereto.

         16. Binding Agreement. This Agreement shall be binding upon, and shall
inure to the benefit of, the Executive and the Company and, as permitted by this
Agreement, their respective successors, assigns, heirs, beneficiaries and
representatives.

         17. Governing Law. The validity, interpretation, performance and
enforcement of this Agreement shall be governed exclusively by the laws of the
Commonwealth of Pennsylvania, without regard to principles of conflicts of laws
thereof.

         18. Counterparts; Headings; Interpretation. This Agreement may be
executed in counterparts, each of which, when executed, shall be deemed to be an
original and all of which together shall be deemed to be one and the same
instrument. The underlined Section headings contained in this Agreement are for
convenience of reference only and shall not affect the interpretation or
construction of any provision hereof. This Agreement is the result of
negotiation and compromise between the parties hereto, each represented by
counsel. The fact that either party, in the course of negotiations, agreed to an
addition, deletion or change requested by the other party in the language of
this Agreement shall not be deemed an admission of fact by the party agreeing to
such change.

         19. Entire Agreement; Amendments. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and
supercedes all prior agreements or understandings with regard to the terms and
conditions of the Executive's employment other than those contained in plans,
policies and practices of general applicability to members of the Company's
senior management. No amendment or waiver of this Agreement or any provision
hereof shall be effective unless contained in a writing executed by the party
against whom such amendment or waiver is asserted, and in the case of the
Company, by its duly authorized officer.

                                      -15-
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Executive has signed this Agreement, all as of the first
date above written.

[CORPORATE SEAL]                            MELLON FINANCIAL CORPORATION

Attest:  /s/ CARL KRASIK                    By: /s/ MARTIN G. MCGUINN
       -------------------------------          --------------------------------
                Secretary                       Title: Chairman and
                                                       Chief Executive Officer

                                                /s/ STEPHEN E. CANTER
                                                --------------------------------
                                                       STEPHEN E. CANTER

                                      -16-<PAGE>

                                                                    Exhibit 10.3

                                                                  EXECUTION COPY

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT, made effective as of January 1, 2000 by and between
Mellon Financial Corporation, a Pennsylvania corporation (the "Company"), and
David F. Lamere (the "Executive")

                                WITNESSETH THAT:

         WHEREAS, the Executive is currently serving as Executive Vice President
of Mellon Bank, N.A. (the "Bank"), responsible for Mellon Private Asset
Management ("MPAM"), and the Company desires to induce the Executive to continue
to serve in such capacity effective as of January 1, 2000, and the Executive is
willing to continue to serve in such capacity, on the terms and conditions
herein set forth;

         NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto, each intending to be legally bound hereby, agree
as follows:

         1. Employment. The Company agrees to continue to employ the Executive,
and the Executive agrees to continue to be employed by the Company, for the Term
provided in Paragraph 3(a) below and upon the other terms and conditions
hereinafter provided. The Executive hereby represents and warrants that he has
the legal capacity to execute and perform this Agreement, that it is a valid and
binding agreement, enforceable against him according to its terms, and that its
execution and performance by him do not violate the terms of any existing
agreement or understanding to which the Executive is a party.

         2. Position and Responsibilities. During the Term, the Executive agrees
to serve as Executive Vice President of the Bank. In his capacity as Executive
Vice President of the Bank, the Executive shall be responsible for the general
management of the affairs of MPAM. The Executive shall be given such authority
as is appropriate to carry out the duties described above. The Executive agrees
to serve, if elected, as an officer and/or director of any other subsidiary or
affiliate of the Company.

         3. Term and Duties.

         (a) Term of Agreement. The term of the Executive's employment under
this Agreement shall commence on January 1, 2000 and shall continue thereafter
through December 31, 2002 (the "Term"). Unless either party shall have given
written notice to the other on or before June 30, 2002 that the Executive's
employment with the Company and its subsidiaries and affiliates (collectively,
the "Companies") will terminate at the end of the Term, the parties shall be
obligated during the period from July 1 to November 15, 2002 to negotiate in
good faith an agreement for the continuation of the Executive's employment.

         (b) Duties. During the Term, and except for illness or incapacity and
reasonable vacation periods of no more than 4 weeks in any calendar year (or
such other periods as shall be consistent with the Companies' policies for other
key executives), the Executive shall devote all of his business time, attention,
skill and efforts exclusively to the business and affairs of the

<PAGE>

Companies, shall not be engaged in any other business activity, and shall
perform and discharge well and faithfully the duties which may be assigned to
him from time to time and that are consistent with his position and status;
provided, however, that nothing in this Agreement shall preclude the Executive
from devoting time during reasonable periods required for:

                  (i) Serving, in accordance with the Companies' policies, as a
         director of any company or organization involving no actual or
         potential conflict of interest with the Companies;

                  (ii) delivering lectures and fulfilling speaking engagements;

                  (iii) engaging in charitable and community activities; and

                  (iv) investing his personal assets in businesses in which his
         participation is solely that of an investor in such form or manner as
         will not violate Section 7 below or require any services on the part of
         the Executive in the operation or the affairs of such business,

provided, however, that such activities do not materially affect or interfere
with the performance of the Executive's duties and obligations to the Companies.

         4. Compensation. For all services rendered by the Executive in any
capacity required hereunder during the Term, including, without limitation,
services as an executive, officer, director, or member of any committee of the
Bank, the Company or any subsidiary, affiliate or division of any thereof, the
Executive shall be compensated as set forth below:

                  (a) Base Salary. The Executive shall continue to be paid a
         fixed salary ("Base Salary") of $300,000 per annum as of the effective
         date of this Agreement. The Base Salary amount will be periodically
         reviewed at the times and in the manner generally applicable to members
         of the Company's Senior Management Committee and may be increased, but
         not decreased, during the Term. Base Salary shall be payable in
         accordance with the customary payroll practices of the Companies, but
         in no event less frequently than monthly.

                  (b) Annual Bonus. The Executive shall be eligible to be paid
         an annual bonus of up to three times the amount of his Base Salary in
         effect at the end of the annual bonus period. If the Executive receives
         an incentive rating of "1" for an annual bonus period, management of
         the Company will recommend to the Human Resources Committee of the
         Board of Directors ("HRC") that the Executive receive 100% of his bonus
         potential for such annual bonus period. If the Executive's incentive
         rating for such annual bonus period is less than "1," management of the
         Company will recommend to the HRC that he receive for such annual bonus
         period the percentage of his bonus potential equal to the percentage of
         bonus potential that management recommends for similarly rated other
         members of the Senior Management Committee. It is understood that the
         Executive may receive some portion of his annual bonus in the form of
         an award of restricted stock, with such awards to be made on the same
         terms as apply to other members of the Senior Management Committee.

                                      -2-
<PAGE>
                  (c) Equity-Based Compensation. Effective October 1, 1999, the
         Company granted to the Executive 60,722 shares of Third Century
         Performance Accelerated Restricted Stock (the "Third Century PARS")
         which shall derestrict based upon the achievement of annual and
         cumulative performance goals over the Term as set forth in the Third
         Century PARS Agreement, dated October 1, 1999, issued to Executive. It
         is not contemplated that further awards under the Company's Long-Term
         Profit Incentive Plan (1996) (together with any successor Plan, the
         "Long-Term Plan") will be granted to the Executive during the Term.

                  (d) Additional Benefits. Except as modified by this Agreement,
         the Executive shall be entitled to participate in all compensation or
         employee benefit plans or programs, and to receive all benefits,
         perquisites and emoluments, which are generally available to members of
         the Company's Senior Management Committee under any plan or program now
         or hereafter established and maintained by the Company or the Bank for
         senior officers, to the extent permissible under the general terms and
         provisions of such plans or programs and in accordance with the
         provisions thereof, including group hospitalization, health, dental
         care, senior executive life or other life insurance, travel or accident
         insurance, disability plans, tax-qualified or non-qualified pension,
         savings, thrift and profit-sharing plans, deferred compensation plans,
         sick-leave plans, and executive contingent compensation plans,
         including, without limitation, capital accumulation programs and stock
         purchase plans. Notwithstanding the foregoing, the Executive
         acknowledges and agrees that the severance payments provided in certain
         circumstances under this Agreement are in lieu of any rights which the
         Executive might otherwise have under any and all other displacement,
         separation or severance plans or programs of the Companies, including
         without limitation the Mellon Financial Corporation Displacement
         Program, and the Executive hereby waives all rights to participate in
         any of such plans or programs in the event of the termination of his
         employment during the Term.

         5. Business Expenses. The Companies shall pay or reimburse the
Executive for all reasonable travel and other expenses incurred by the Executive
in connection with the performance of his duties and obligations under this
Agreement, subject to the Executive's presentation of appropriate vouchers in
accordance with such policies and procedures as the Companies from time to time
establish for senior officers.

         6. Effect of Termination of Employment; Disability.

         (a) Without Cause Termination or Constructive Discharge. In the event
the Executive's employment hereunder terminates due to either a Without Cause
Termination or a Constructive Discharge, earned but unpaid Base Salary as of the
Date of Termination (as defined in Section 14(b)) and any earned but unpaid
bonuses for prior years (collectively, the "Accrued Obligations") shall be
payable in full. In addition, subject to (1) the Executive's continuing
compliance with his obligations under the provisions of Section 7 below and (2)
the Executive's execution and delivery to the Company of a separation agreement,
including an irrevocable general release of claims, in a form acceptable to the
Company, the Executive may continue to earn the following termination benefits:

                                      -3-
<PAGE>

                  (i) the Company shall:

                           (A) continue to pay the Executive's Base Salary, as
                  in effect at the Date of Termination, from the Date of
                  Termination until the end of the Term; and

                           (B) pay to the Executive for the year of termination
                  and for each subsequent calendar year, if any, during the
                  remainder of the Term, an amount equal to the Cash Bonus
                  Amount of the highest annual bonus awarded to the Executive
                  for any year in the three years preceding the Date of
                  Termination, such payments to be made at the normal times for
                  payment of bonuses under the annual bonus plan applicable to
                  the Executive (the "Bonus Plan").

         With respect to the payments provided for in this Section 6(a)(i), the
         Executive shall be entitled, to the extent permitted by law as
         determined by the Company in good faith, to participate in any
         compensation deferral plans or arrangements then provided by the
         Company to senior executives.

                  (ii) To the extent permitted by law, the Company shall
         continue to provide the Executive for the period of salary continuation
         set forth in Section 6(a)(i)(A) above with (A) service credit under all
         qualified and nonqualified retirement plans and excess benefit plans in
         which the Executive participated as of his Date of Termination and (B)
         eligibility to receive employer matching contributions on any pre-tax
         contributions made by the Executive to the Retirement Savings Plan at
         the maximum rate which would have been available to the Executive had
         his employment continued.

                  (iii) The Company shall continue to provide Executive (and
         Executive's dependents, if applicable) for the period of salary
         continuation set forth in Section 6(a)(i)(A) above with medical,
         dental, accident, disability and life insurance benefits upon
         substantially the same terms and conditions (including contributions
         required by the Executive for such benefits) as those of the applicable
         employee benefit plans in effect from time to time as applied to
         employees; provided, however, that if the Executive cannot continue to
         participate under the terms of the Company plans providing such
         benefits, the Company shall otherwise provide such benefits on (as
         nearly as reasonably practicable) the same after-tax basis as if
         continued participation had been permitted. Notwithstanding the
         foregoing, in the event the Executive becomes re-employed with another
         employer and becomes eligible to receive welfare benefits from such
         employer, the welfare benefits described herein shall be secondary to
         such benefits during the period of the Executive's eligibility, but
         only to the extent that the Company reimburses the Executive for any
         increased cost and provides any additional benefits necessary to give
         the Executive the benefits provided hereunder.

                  (iv) The Company shall provide the Executive with career
         counseling and outplacement services of the type historically provided
         by the Company to similarly situated executives of comparable rank and
         responsibility.

                  (v) To the extent that the restrictions on the Third Century
         PARS have not lapsed at the Date of Termination, the Third Century PARS
         shall remain outstanding, and the restrictions thereon shall lapse in
         full at the close of business on September 30, 2006.

         (b) Disability. In the event of the Executive's Disability, the Company
may, by giving a Notice of Disability as provided in Section 14(c), remove the
Executive from active employment

                                      -4-
<PAGE>

and in that event shall provide the Executive for the remainder of the Term with
the same payments and benefits as those provided in Section 6(a), except that:

                  (i) in lieu of the bonus payments provided in Section
         6(a)(i)(B), the Executive shall receive, at the same time as bonus
         payments for the year of Disability would otherwise be made under the
         Bonus Plan, a prorated bonus for the year of Disability only equal to
         the Cash Bonus Amount of the bonus award the Executive would have
         received had he been actively employed throughout the bonus year,
         prorated on a daily basis as of the Date of Disability;

                  (ii) except for Accrued Obligations, Base Salary payments
         shall be offset by any amounts otherwise payable to the Executive under
         the Company's disability program generally available to other
         employees; and

                  (iii) to the extent that the restrictions on the Third Century
         PARS have not lapsed at the Date of Disability, the restrictions
         thereon shall lapse in full as of the Date of Disability.

         (c) Death. In the event the Executive's employment hereunder terminates
due to death, Accrued Obligations as of the date of death shall be payable in
full, and the Company shall pay to the Executive's estate, at the same time as
bonus payments for the year of death would otherwise be made under the Bonus
Plan, a prorated bonus for the year of death only equal to the Cash Bonus Amount
of the bonus award the Executive would have received had he been employed
throughout the bonus year, prorated on a daily basis as of the date of death.
The Third Century PARS shall become immediately and fully vested.

         (d) Other Termination of Employment. In the event the Executive's
employment hereunder terminates due to a Termination for Cause or the Executive
terminates employment for reasons other than due to a Without Cause Termination,
a Constructive Discharge, Disability or death, Accrued Obligations as of the
Date of Termination shall be payable in full, and vested stock options may be
exercised according to the terms of the Long-Term Plan. No other payments shall
be made, or benefits provided, by the Company except for benefits which have
already become vested under the terms of employee benefit programs maintained by
the Company or its affiliates for its employees generally as provided in Section
10.

         (e) Definitions. For purposes of this Agreement, the following terms
have the following meanings:

                  (i) "Termination for Cause" means, to the maximum extent
         permitted by applicable law, a termination of the Executive's
         employment by the Company because the Executive has (A) been convicted
         of or has entered a plea of nolo contendere with respect to a felony,
         or any misdemeanor evidencing moral turpitude, deceit, dishonesty or
         fraud, including without limitation a criminal offense covered by
         Section 19 of the Federal Deposit Insurance Act, 12 U.S.C. Section
         1829, or any successor provision, (B) engaged in conduct which
         constitutes a willful and continued failure to perform his duties
         hereunder (other than by reason of disability), after notice to the
         Executive and reasonable opportunity to correct the same, (C) been
         dismissed for violating a material provision of the Company's Code of

                                      -5-
<PAGE>

         Conduct (as the same may be modified from time to time), (D) willfully
         engaged in any misconduct which has the effect of being injurious to
         the Company or any of its affiliates or (E) violated the
         representations made in Section 1 above, or any of the provisions of
         Sections 7(c), 7(d) or 7(e) below; provided, however, that the Company
         has given the Executive advance notice of such Termination for Cause
         including the reasons therefor, together with a reasonable opportunity
         for the Executive to dispute the factual basis of such notice.

                  (ii) "Constructive Discharge" means a termination of the
         Executive's employment by the Executive due to a failure of the Company
         or any successor to fulfill its obligations under this Agreement in any
         material respect, including (A) any material change by the Companies
         without the consent of the Executive in the functions, duties or
         responsibilities of the Executive's position with the Companies which
         would reduce the ranking or level, dignity, responsibility, importance
         or scope of such position, (B) any imposition on the Executive of a
         requirement to be permanently based at a location more than fifty miles
         from his principal business location as of the date of this Agreement
         without the consent of the Executive, or (C) any reduction without the
         consent of the Executive in the Executive's Base Salary below the
         amount then in effect under Section 4(a) hereof; provided that no
         change in position, responsibilities or compensation, attempted
         relocation or other event shall be deemed to constitute a Constructive
         Discharge unless the Executive provides written notice thereof to the
         Company at least 30 days in advance of any Notice of Termination with
         respect thereto and gives the Company the opportunity to remedy or cure
         the asserted basis for such Constructive Discharge within such 30-day
         period.

                  (iii) "Without Cause Termination" means a termination of the
         Executive's employment by the Company other than due to Disability or
         expiration of the Term and other than a Termination for Cause.

                  (iv) "Disability" for purposes of this Agreement means the
         Executive shall be disabled so as to be unable to perform for 180 days
         in any 365-day period, with or without reasonable accommodation, the
         essential functions of his then existing position or positions under
         this Agreement, as determined by the person or entity responsible for
         making determinations under the Company's long-term disability plan or,
         if any such person or entity is not able for any reason to make this
         determination, by another independent person or entity experienced in
         this field selected by the Company and acceptable to the Executive or
         his representative.

                  (v) The "Cash Bonus Amount" of a Bonus Plan award for any
         period means the sum of (A) the amount of such award paid or payable in
         cash (whether or not deferred) plus (B) with respect to any portion of
         the award paid or payable in restricted stock, phantom stock or other
         interests in Company securities, the amount of cash which would
         otherwise have been paid, excluding any premium in value given to
         compensate for risk of forfeiture or otherwise.

                  (vi) The "Date of Termination" and "Date of Disability" shall
         have the meanings ascribed to them in Section 14. To the fullest extent
         permitted by applicable law; to the

                                      -6-
<PAGE>

         extent this Agreement requires the payment of Base Salary and/or the
         provision of coverages and benefits subsequent to the Date of
         Termination or Date of Disability, the Executive's Date of Termination
         or Date of Disability, as applicable, shall not be treated as a
         termination of employment (a "Benefit Plan Termination Date") from the
         Companies for purposes of determining the Executive's rights,
         responsibilities and tax treatment under any and all employee pension,
         welfare and fringe benefit plans maintained by the Companies. Rather,
         the Benefit Plan Termination Date shall be the day following the last
         day for which any Base Salary and/or coverages and benefits are
         required to be provided by this Agreement."

         (f) Change in Control. Notwithstanding anything else contained herein,
if any termination of the Executive's employment hereunder constitutes a
"Qualifying Termination" during the "Termination Period," each as defined in the
Agreement between the Executive and the Company dated as of February 1, 1997
(the "Prior Agreement"), then the provisions of the Prior Agreement shall apply
to such termination in lieu of the provisions of this Section 6. Section 5 of
the Prior Agreement shall apply to any Payment (as therein defined) under this
Agreement to the extent provided therein. The definition of "Change in Control"
in Section 1(c) of the Prior Agreement is hereby amended by changing the phrase
"at least a majority of the members of the board of directors of the Parent
Corporation" in clause (C) of Paragraph 1(c)(iii) to read "at least half of the
members of the board of directors of the Parent Corporation."

         7. Other Duties of Executive During and After Term.

         (a) Confidential Information. Executive acknowledges that, by reason of
his duties, he will be given or may have access to and become informed of
confidential or proprietary information which the Companies possess or to which
the Companies have rights, which relates to the Companies and which is not
generally known to the public or in the trade and is a competitive asset of the
Companies, or information which constitutes a "trade secret" of the Companies,
as that term is defined by the Uniform Trade Secrets Act, as amended and
approved by the National Conference of Commissioners on Uniform State Laws in
1985 ("Confidential Information"), including without limitation, (i) the
Companies' planning data and marketing strategies; (ii) non-public terms of any
new products and investment strategies of the Companies; (iii) non-public
information relating to the Companies' personnel matters; (iv) the Companies'
financial results and information about their business condition; (v) non-public
terms of any investment, management or advisory agreement or other material
contract of the Companies; (vi) the Companies' proprietary software and related
documents; (vii) the Companies' client and prospecting lists and contact persons
at such clients and prospects; and (viii) non-public material information
concerning the Companies' customers or their operations, condition (financial or
otherwise) or plans. "Confidential Information" shall not include any
information (A) generally known to the public except as a result of disclosure
by Executive, (B) disclosed by the Company without an obligation of
confidentiality on the part of the recipient or (C) required to be disclosed by
law, rule, regulation or order without an obligation of confidentiality on the
part of the recipient, provided that prior to making any disclosure under this
clause (C), Executive shall provide the Company with notice and the opportunity
to contest such disclosure.

         Executive acknowledges that his employment creates a relationship of
confidence and trust between himself and the Companies with respect to
Confidential Information and that

                                      -7-
<PAGE>

Confidential Information, whether compiled or created by him or the Companies,
is and shall remain the sole property of the Companies. Executive will
faithfully keep Confidential Information in strict confidence and shall not,
either directly or indirectly, at any time, while an employee of the Companies
or thereafter, make known, divulge, reveal, furnish, make available, or use
(except for use in the regular course of his duties for the Companies) any
Confidential Information without the written consent of the Company. Executive
understands and acknowledges that his obligations under this Section 7 will
survive termination of his employment and will continue indefinitely unless and
until any such Confidential Information has become, in the Company's reasonable
judgment, stale, or, through no fault of Executive's, generally known to the
public or he is required by law (after providing the Company with notice and an
opportunity to contest such requirement) to make disclosure.

         The Executive's obligations under this Section 7(a) are in addition to,
and not in limitation or preemption of, all other obligations of confidentiality
which the Executive may have to the Companies under general or specific legal or
equitable principles.

         (b) Return Of All Property And Documents. Upon the termination of his
employment for any reason or no reason, the Executive immediately shall return
to the Companies all of their property, including without limitation, all
documents (including copies) and information, however maintained (including
computer files, tapes, and recordings), concerning the Companies or acquired by
the Executive in the course and scope of his employment (excluding only those
documents relating solely to the Executive's own salary and benefits).

         (c) Non-Interference. Until the later of the end of the Term or two (2)
years after the termination of the Executive's employment, whether during or
after the Term and notwithstanding the cause of termination, the Executive shall
not (i) hire or employ, directly or indirectly through any enterprise with which
he is associated, any employee of the Companies having the rank of Vice
President of any of the Companies or above or (ii) recruit, solicit or induce
(or in any way assist another person or enterprise in recruiting, soliciting or
inducing) any such employee or any consultant, vendor or supplier of the
Companies to terminate or reduce such person's employment, consulting or other
relationship with the Companies. Without limiting clause (i) of the preceding
sentence, clause (ii) of the preceding sentence shall not be violated by the
making of general advertisements not specifically directed to employees of the
Companies.

         (d) Non-Solicitation. Until the later of the end of the Term or twelve
(12) months after the termination of the Executive's employment, whether during
or after the Term and notwithstanding the cause of termination, the Executive
shall not, directly or indirectly, in any capacity (i) solicit the business or
patronage of any Customer for any other person or entity, (ii) divert, entice,
or otherwise take away from the Companies the business or patronage of any
Customer, or attempt to do so, or (iii) solicit or induce any Customer to
terminate or reduce its relationship with the Companies.

         (e)  Unfair Competition.

                  (i) Until six (6) months after the termination of the
         Executive's employment, whether during or after the Term and
         notwithstanding the cause of termination, the

                                      -8-
<PAGE>

         Executive shall not, directly or indirectly, in any capacity (A)
         provide or assist with the provision of Relevant Financial Services,
         except as an employee of the Companies or (B) be employed by or
         affiliated or associated in a business capacity with any person or
         entity in the business of providing Relevant Financial Services other
         than the Companies.

                  (ii) Until the later of the end of the Term or twelve (12)
         months after the termination of the Executive's employment, whether
         during or after the Term and notwithstanding the cause of termination,
         the Executive shall not, directly or indirectly, in any capacity (A)
         provide or assist with the provision of Relevant Financial Services to
         a Customer of the Companies, except as an employee of the Companies or
         (B) be employed by or affiliated or associated in a business capacity
         with any person or entity other than the Companies which directly or
         indirectly provides or offers to provide Relevant Financial Services to
         any Customer of the Companies; provided that this Section 7(e)(ii) does
         not prohibit the Executive from being employed by or affiliated or
         associated with any person or entity after the termination of
         employment with the Companies and after the expiration of the period
         covered by Section 7(e)(i) so long as he does not have any direct or
         indirect involvement on behalf of any person or entity with respect to
         soliciting, managing, administering, supporting or retaining the
         Relevant Financial Services business provided or proposed to be
         provided to a Customer of the Companies.

                  (iii) Notwithstanding the foregoing, but without affecting the
         obligations of the Executive under any of the other provisions of this
         Section 7, the obligations of the Executive under this Section 7(e)
         shall not apply after December 31, 2002 unless, during any period of
         restriction under this Section 7(e) which follows that date, the
         Company pays to the Executive at the times otherwise payable under
         Section 4(a) hereof an amount equal to the sum of (A) Base Salary at
         the rate in effect on the date of termination of the Executive's
         employment and (B) (1) the average of the annual cash bonuses paid to
         the Executive for the two most recent years ending on or prior to the
         date of termination divided by (2) the number of pay periods in the
         calendar year. In the event the amount payable under clause (B) of the
         preceding sentence is not determinable at the time such payment would
         otherwise be made, such amount shall be paid to the Executive as soon
         as practicable after such amount has been determined.

         (f) Certain Definitions. For purposes of this Agreement:

                  (i) "Relevant Financial Services" shall mean (A) private asset
         and investment management and related advisory services and (B) any
         other services or products provided by the Companies from time to time
         which, at any time during the twelve (12) months preceding the
         termination of the Executive's employment, are within the scope of the
         Executive's responsibilities.

                  (ii) "Customer" means any person or entity to the extent that
         such person or entity (A) is receiving Relevant Financial Services from
         the Companies on the date of termination of the Executive's employment
         with the Companies, (B) received such services for compensation at any
         time during the one-year period immediately preceding

                                      -9-
<PAGE>

         the date of termination of the Executive's employment with the
         Companies or (C) at any time during the one-year period immediately
         preceding the date of termination of the Executive's employment with
         the Companies was solicited by the Executive, directly or indirectly,
         in whole or in part, on behalf of the Companies to provide Relevant
         Financial Services.

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

         (h) Performance Record. The Executive understands, acknowledges and
agrees that the investment performance record (including without limitation
performance ratings or rankings provided by any rating or ranking service) of
any fund(s) or accounts of Customers with which he is associated while employed
at the Companies is attributable to a team of professionals of the Companies and
not solely the efforts of any single individual and that, therefore, the
performance records of the fund(s) or accounts managed by the Companies are and
shall be the exclusive property of the Companies.

         (i) Nondisparagement. During and after the Executive's employment,
notwithstanding the cause of termination, Executive and the Company each agrees
not to, and the Company shall cause its officers and directors not to, take any
action or make any statement, written or oral, to any current or former employee
of the Companies or to any other person which disparages Executive or the
Companies, their management, directors or shareholders, as applicable, or their
practices or which disrupts or impairs their normal operations, including
actions or statements (i) that would harm the reputation of Executive or the
Companies, as applicable, with their clients, suppliers, employees or the
public, or (ii) that would interfere with existing or prospective contractual or
employment relationships with clients, suppliers or individuals.

         (j) Remedies. The Company's obligation to make payments or provide any
benefits under this Agreement (except to the extent previously vested) shall
cease upon any violation of the provisions of this Section 7. In addition, in
the event of a violation by the Executive of the provisions of this Section 7,
the Company shall be entitled, if it shall so elect, to institute legal
proceedings to obtain damages for any such breach, or to enforce the specific
performance by the Executive of this Section 7 and to enjoin the Executive from
any further violation, and may exercise such remedies cumulatively or in
conjunction with such other remedies as may be available to the Companies at law
or in equity. The Executive agrees that it would be difficult to

                                      -10-
<PAGE>

measure any damages to the Companies which might result from any breach by the
Executive of the promises set forth in this Section 7, and that in any event
money damages would be an inadequate remedy for any such breach. Accordingly,
the Executive agrees that if the Executive breaches any provision of this
Agreement, the Companies shall be entitled, in addition to all other remedies
that they may have, to an injunction or other appropriate equitable relief to
restrain any such breach, without showing or proving any actual damage to the
Companies. In the event the Company withholds any payment based upon a claimed
violation of this Section 7 and it is finally determined by a court that
Executive is entitled to such payment, the Company shall pay Executive interest
on such payment from the date originally due until the date paid at the rate
applicable to judgments under 28 U.S.C. Section 1961.

         (k) Survival; Authorization to Modify Restrictions. The Executive
acknowledges and agrees that the covenants of the Executive and the restrictions
contained in this Section 7 are intended to protect the Companies' interest in
its Confidential Information and its commercial relationships and goodwill with
its customers, prospective customers, vendors, suppliers, consultants and
employees. The Executive further acknowledges and agrees that the covenants of
the Executive and the restrictions contained in this Section 7 shall survive the
termination of this Agreement and any termination of the Executive's employment,
regardless of reason, for the periods stated herein and shall continue in full
force and effect regardless of any change in the Executive's title, duties,
responsibility, compensation or benefits while he remains employed by the
Companies; provided, however, that the covenants contained in Sections 7(d) and
7(e) shall not survive any termination of employment (i) for which a Notice of
Termination is given during the Termination Period following a Change in
Control, each as defined in the Prior Agreement or (ii) which is a termination
of employment described in the second sentence of Section 1(j) of the Prior
Agreement.

         The Executive represents that he has read and understands the
provisions of this Agreement, including this Section 7, that he has had the
opportunity to consult with counsel concerning such provisions, and that he
understands the effect of such provisions on his ability to earn his livelihood
upon any termination of his employment with the Company. The Executive
acknowledges that it would cause the Companies serious and irreparable injury
and cost if Executive were to use his ability and knowledge in competition with
the Companies or to otherwise breach the obligations contained in this Section 7
and, in view of the nature and level of his responsibilities and the level of
his compensation, agrees that the provisions of this Section 7 are reasonable.
Accordingly, it is the intention of the parties that the provisions of this
Section 7 shall be enforceable to the fullest extent permissible under
applicable law, but that if any portion or provision of this Agreement shall to
any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then (A) the court may amend such portion or provision so as to
comply with law in a manner consistent with the intention of this Agreement, (B)
the remainder of this Agreement, or the application of such illegal or
unenforceable portion or provision in circumstances other than those as to which
it is so declared illegal or unenforceable, shall not be affected thereby and
(C) each portion or provision of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.

         (l) Jurisdiction and Venue. The parties agree that any action by the
Company to enforce the covenants and restrictions contained in this Section 7 or
any action by either party to obtain a judgment on an arbitrator's award
referred to in Section 9 may be instituted and maintained in

                                      -11-
<PAGE>
the state or federal courts in Pittsburgh, Pennsylvania or Boston,
Massachusetts or in any other court having jurisdiction. Subject to the first
sentence of Section 9 hereof, the parties hereby irrevocably submit to the
jurisdiction of the state and federal courts in Pittsburgh, Pennsylvania and
Boston, Massachusetts in any suit, action or proceeding arising under or
relating to this Agreement and hereby irrevocably waive any objections to the
venue of any of such courts in any such suit, action or proceeding, including
any claim that any other court constitutes a more appropriate or convenient
forum.

         8. Proprietary Developments. Any and all inventions, products,
discoveries, improvements, processes, methods, computer software programs,
models, techniques, formulae, trade secrets, service marks, trademarks and works
of authorship (collectively, hereinafter referred to as "Intellectual
Property"), made, developed or created by the Executive (alone or in conjunction
with others, during regular hours of work or otherwise) during the Executive's
employment by the Companies, which may be directly or indirectly useful in, or
relate to, business conducted or to be conducted by the Companies shall be the
Companies' exclusive property and will be promptly disclosed by the Executive to
the Companies. The term "Intellectual Property" shall not be deemed to include
inventions, products, discoveries, improvements, processes, methods, computer
software programs, models, techniques, formulae, trade secrets, service marks,
trademarks or works of authorship which were in the possession of the Executive
prior to the Executive's employment by the Companies and which were not obtained
from or through the Companies. To the fullest extent permitted by law, such
Intellectual Property shall be deemed works made for hire. Executive hereby
transfers and assigns to the Company or its designated affiliate any proprietary
rights which Executive may have or acquire in any such Intellectual Property,
and Executive waives any license or other special right which Executive may have
or accrue therein. Executive agrees to execute any documents and to take any
actions that may be required, as reasonably determined by the Company's counsel,
to effect and confirm such transfer, assignment and waiver.

         The Executive will, upon the Company's request, execute any documents
necessary or advisable in the opinion of the Company's counsel to direct the
issuance of patents, trademarks or copyrights to the Company or its designated
affiliate with respect to such Intellectual Property as are to be the Companies'
exclusive property under this Section 8 or to vest in the Company or such
affiliate title to such Intellectual Property, the expense of securing any
patent, trademark or copyright, however, to be borne by the Company or such
affiliate. The Executive will keep confidential and will hold for sole benefit
of the Companies any Intellectual Property which is to be their exclusive
property under this Section 8 for which no patent, trademark or copyright is
issued.

         The Executive agrees that non-public terms of Intellectual Property
shall constitute Confidential Information within the meaning of Section 7(a).

         The foregoing provisions of this Section 8 shall be binding upon the
Executive's heirs and legal representatives. The agreements of the Executive in
this Section shall be enforceable by injunction and shall survive the
termination of this Agreement.

         9. Resolution of Disputes. Except as otherwise provided in Section
7(j), any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Boston, Massachusetts,
by three arbitrators in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrators' award in
any court having jurisdiction.

                                      -12-
<PAGE>

         10. Full Settlement; No Mitigation: Non-Exclusivity of Benefits. Except
as provided in Section 6(f), the Company's obligation to make any payment
provided for in this Agreement and otherwise to perform its obligations
hereunder shall be in lieu and in full settlement of all other severance
payments to the Executive under any other severance plan, arrangement or
agreement of the Company and its affiliates, including but not limited to the
Mellon Financial Corporation Displacement Program, and in full settlement of any
and all claims or rights of the Executive for severance, separation and/or
salary continuation payments resulting from the termination of his employment.
In no event shall the Executive be obligated to seek other employment or to take
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement, and except as specifically provided
herein, such amounts shall not be reduced whether or not the Executive obtains
other employment. Except as provided above in this Section 10, nothing in this
Agreement shall prevent or limit the Executive's continuing or future
participation in any plan, program, policy or practice provided by the Company
or any of its affiliates for which the Executive may qualify, nor, except as
otherwise specifically provided in this Agreement, shall anything herein limit
or otherwise affect such rights as the Executive may have under any contract or
agreement with the Company or any of its affiliates, including without
limitation any stock option or restricted stock agreement. Amounts or benefits
which are vested benefits or which the Executive is otherwise entitled to
receive under any such plan, program, policy, practice, contract or agreement
prior to, at or subsequent to any Date of Termination or Date of Disability
shall be paid or provided in accordance with the terms of such plan, program,
policy, practice, contract or agreement except as explicitly modified by this
Agreement.

         11. Employment and Payments by Affiliates. Except as herein otherwise
specifically provided, references in this Agreement to employment by the Company
shall include employment by affiliates of the Company, and the obligation of the
Company to make any payment or provide any benefit to the Executive hereunder
shall be deemed satisfied to the extent that such payment is made or such
benefit is provided by any affiliate of the Company.

         12. Withholding Taxes. The Companies may directly or indirectly
withhold from any payments made under this Agreement all Federal, state, city or
other taxes as shall be required pursuant to any law or governmental regulation
or ruling.

         13. Consolidation, Merger, or Sale of Assets. Nothing in this Agreement
shall preclude the Company from consolidating or merging into or with, or
transferring all or substantially all of its assets to, another corporation or
entity which assumes this Agreement and all obligations and undertakings of the
Company hereunder. Upon such a consolidation, merger or transfer of assets and
assumption, the term "Company" as used herein shall mean such other corporation
or entity, and this Agreement shall continue in full force and effect.

         14. Notices.

         (a) General. All notices, requests, demands and other communications
required or permitted hereunder shall be given in writing and shall be deemed to
have been duly given when delivered or 5 days after being deposited in the
United States mail, certified and return receipt requested, postage prepaid,
addressed as follows:

                                      -13-
<PAGE>

                  (i)      To the Company:

                           Manager-Human Resources Department
                           Mellon Bank, N.A.
                           One Mellon Bank Center
                           Pittsburgh, Pennsylvania  15258

                  (ii)     To the Executive:

                           David F. Lamere
                           28 Green Lane
                           Weston, MA 02493

                           with a copy to:

                           Beth J. Felder, Esquire
                           Epstein Becker & Green, P.C.
                           75 State Street
                           Boston, MA  02109

or to such other address as the addressee party shall have previously specified
in writing to the other.

         (b) Notice of Termination. Except in the case of death of the
Executive, any termination of the Executive's employment hereunder, whether by
the Executive or the Company, shall be effected only by a written notice given
to the other party in accordance with this Section 14 (a "Notice of
Termination"). Any Notice of Termination shall (i) indicate the specific
termination provision in Section 6 relied upon, (ii) in the case of a
termination for Cause or a Constructive Discharge, set forth in reasonable
detail the facts and circumstances claimed to provide a basis for such
termination and (iii) specify the effective date of such termination of
employment (the "Date of Termination"), which shall not be less than 15 days nor
more than 60 days after such notice is given. The failure of the Executive or
the Company to set forth in any Notice of Termination any fact or circumstance
which contributes to a showing of Cause or Constructive Discharge shall not
waive any right of the Executive or the Company hereunder or preclude the
Executive or the Company from asserting such fact or circumstance in enforcing
the Executive's or the Company's rights hereunder.

         (c) Notice of Disability. Any finding of Disability by the Company
shall be effected only by a written notice given to the Executive in accordance
with this Section 14 (a "Notice of Disability"). Any Notice of Disability shall
(i) set forth in reasonable detail the facts and circumstances claimed to
provide a basis for such finding of Disability and (ii) specify an effective
date (the "Date of Disability"), which shall not be less than 10 days after such
notice is given. The failure of the Company to set forth in any Notice of
Disability any fact or circumstance which contributes to a showing of Disability
shall not waive any right of the Company hereunder or preclude the Company from
asserting such fact or circumstance in enforcing the Company's rights hereunder.

                                      -14-
<PAGE>

         15. No Attachment. Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or
to execution, attachment, levy or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect; provided, however, that nothing in this Section
15 shall preclude the assumption of such rights by executors, administrators, or
other legal representatives of the Executive or his estate or their assigning
any rights hereunder to the person or persons entitled thereto.

         16. Binding Agreement. This Agreement shall be binding upon, and shall
inure to the benefit of, the Executive and the Company and, as permitted by this
Agreement, their respective successors, assigns, heirs, beneficiaries and
representatives.

         17. Governing Law. The validity, interpretation, performance and
enforcement of this Agreement shall be governed exclusively by the laws of the
Commonwealth of Pennsylvania, without regard to principles of conflicts of laws
thereof.

         18. Counterparts; Headings; Interpretation. This Agreement may be
executed in counterparts, each of which, when executed, shall be deemed to be
an original and all of which together shall be deemed to be one and the same
instrument. The underlined Section headings contained in this Agreement are
for convenience of reference only and shall not affect the interpretation or
construction of any provision hereof. This Agreement is the result of
negotiation and compromise between the parties hereto, each represented by
counsel. The fact that either party, in the course of negotiations, agreed to
an addition, deletion or change requested by the other party in the language of
this Agreement shall not be deemed an admission of fact by the party agreeing
to such change.

         19. Entire Agreement; Amendments. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and
supercedes all prior agreements or understandings with regard to the terms and
conditions of the Executive's employment other than those contained in plans,
policies and practices of general applicability to members of the Company's
senior management. No amendment or waiver of this Agreement or any provision
hereof shall be effective unless contained in a writing executed by the party
against whom such amendment or waiver is asserted, and in the case of the
Company, by its duly authorized officer.

                                      -15-
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Executive has signed this Agreement, all as of the first
date above written.

[CORPORATE SEAL]                            MELLON FINANCIAL CORPORATION

Attest: /s/ CARL KRASIK                     By: /s/ MARTIN G. MCGUINN
       ----------------------------             --------------------------------
                Secretary                       Title: Chairman and
                                                       Chief Executive Officer

                                                /s/ DAVID F. LAMERE
                                                --------------------------------
                                                         DAVID F. LAMERE

                                      -16-

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