Document:

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                                                                 EXHIBIT 10.3.20

                              AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

         This Amended and Restated Employment Agreement ("Agreement") is made as
of the 28th day of October, 2002, by and between MASSBANK, a Massachusetts
savings bank with its main office in Reading, Massachusetts (the "Bank"),
MASSBANK Corp., a Delaware corporation (the "Company"), and Donna H. West (the
"Executive"). The Company and the Bank shall hereinafter be collectively
referred to as the "Employers".

                                   WITNESSETH

         WHEREAS, the Employers and the Executive entered into an Employment
Agreement, dated as of February 1, 1993 (the "Employment Agreement");

         WHEREAS, the Employers and the Executive entered into an Executive
Severance Agreement, dated as of December 23, 1993 (the "Severance Agreement");

         WHEREAS, the Executive participates in the Bank's Deferred Compensation
Program (the "Deferred Compensation Program");

         WHEREAS, the parties hereto desire to provide for the Executive's
continued employment by the Employers and to delineate the Executive's and the
Employers' rights and obligations arising in connection therewith, including in
the event of a Change in Control (as defined herein) subject to the amended
terms and conditions set forth herein; and

         WHEREAS, the parties hereto intend that this Agreement shall be an
amendment and restatement of the Employment Agreement and the Severance
Agreement.

         NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Employers and the Executive
agree as follows:

         1. Employment. The Employers agree to employ the Executive and the
Executive agrees to serve in the employ of the Employers on the terms and
conditions hereinafter set forth.

         2. Capacity. The Executive shall serve as an officer of the Bank and of
the Company in such capacity(ies) as their respective Boards of Directors may
from time to time determine. In such capacity(ies) the Executive shall, subject
to the By-laws of the Bank and the Company, as the case may be, and to the
direction of the President, Board of Directors and other appropriate officers,
have responsibility for such functions and duties as she may be directed from
time to time by the President or other appropriate officer of the Employers.

         3. Term. Subject to the applicable provisions herein, the term of the
Executive's employment hereunder shall be for two years from the date hereof;
provided, however, that the term shall be extended automatically by

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an additional one day commencing on the first day following the date hereof and
on each subsequent day thereafter, unless either the Executive or the Employers
give written notice to the other of such party's election not to extend the term
of this Agreement. The last day of the term of the Executive's employment
hereunder, as so extended from time to time, is herein sometimes referred to as
the "Expiration Date."

         4. Compensation and Benefits. The regular compensation and benefits
payable to the Executive under this Agreement shall be as follows:

            (a) Salary. For all services rendered by the Executive under this
Agreement, the Employers shall pay the Executive a salary equal to her present
salary, subject to increase from time to time in the sole discretion of the
Boards of Directors upon the recommendation of the Compensation Committee or the
Chief Executive Officer. The Executive's salary shall be payable in periodic
installments in accordance with the Employers' usual practices for its
executives.

            (b) Regular Benefits. The Executive shall also be entitled to
participate in those medical insurance plans, life insurance plans, disability
income plans, retirement plans, bonus incentive plans and other benefit plans
from time to time in effect generally for executives of the Employers. Such
participation shall be subject to (i) the terms of the applicable plan
documents, (ii) generally applicable policies of the Employers and (iii) the
discretion of the Boards of Directors of the Employers or any administrative or
other committee provided for in or contemplated by such plan.

            (c) Business Expenses. The Employers shall reimburse the Executive
for all reasonable travel and other business expenses incurred by her in the
performance of her duties and responsibilities, subject to the Employers' usual
practices and policies in connection therewith and to such reasonable
requirements with respect to substantiation and documentation as may from time
to time be specified by the Employers.

            (d) Vacation. The Executive shall be entitled to vacation in
accordance with the Employers' usual practices for its executives.

         5. Extent of Service. During her employment hereunder, the Executive
shall devote her full business time, best efforts and business judgment, skill
and knowledge to the advancement of the interests of the Employers and to the
discharge of her duties and responsibilities hereunder. The Executive shall
comply at all times with all Bank and Company policies. She shall not engage in
any other business activity, except as may be approved by the President of the
Company or its Board of Directors; provided, however, that nothing herein shall
be construed as preventing the Executive from:

            (a) Investing her assets in a manner not prohibited by Section 9
hereof, and in such form or manner as shall not require any material services on
her part in the operations or affairs of the companies or other entities in
which such investments are made;

            (b) Serving on the board of directors of any company, subject to the
approval of the Chief Executive Officer of the Company and the prohibitions set
forth in Section 9 and provided that she shall not be

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required to render any material services with respect to the operations or
affairs of any such company; or

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

         6. Termination. Notwithstanding the provisions of Section 3 hereof, the
Executive's employment hereunder may be terminated without any breach of this
Agreement under the following circumstances:

            (a) Death. In the event of the Executive's death during the
Executive's employment hereunder, the Executive's employment shall terminate on
the date of her death.

            (b) Disability. In the event of the Executive's "disability" during
the Executive's employment hereunder, the Executive's employment may be
terminated by the Employers. For purposes of this Agreement, "disability" shall
mean the Executive's incapacity due to physical or mental illness which has
caused the Executive to be absent from the full-time performance of her duties
with the Employers for a period of six consecutive months if the Employers shall
have given the Executive a notice of termination and, within 30 days after such
notice is given, the Executive shall not have returned to the full-time
performance of her duties.

            (c) Termination by the Employers for Cause. The Executive's
employment hereunder may be terminated for "cause" without further liability on
the part of the Employers effective immediately upon a determination of the
President or the Board of Directors that such "cause" exists. For purposes
hereof, any one or more of the following shall constitute "cause" for such
termination:

                (i)     Dishonesty of the Executive with respect to the
         Employers or any affiliate thereof;

                (ii)    Commission by the Executive of a crime punishable as a
         felony;

                (iii)   Failure by the Executive to perform in a satisfactory
         manner a substantial portion of her duties and responsibilities
         hereunder; or

                (iv)    Breach by the Executive of any term of this Agreement,
         including without limitation Section 9 hereof.

            (d) Termination by the Employers Without Cause. The Executive's
employment with the Employers may be terminated without cause at any time by the
Employers.

            (e) Termination by the Executive. The Executive's employment with
the Employers may be terminated by Executive at any time, including for Good
Reason following a Change in Control. For purposes of this Agreement, Good
Reason shall mean the occurrence of any of the following events:

                (i)     A substantial adverse change, not consented to by the
         Executive, in the nature or scope of the Executive's title,

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         responsibilities, authorities, powers, reporting relationship,
         functions or duties from the title, responsibilities, authorities,
         powers, reporting relationship, functions or duties exercised by the
         Executive immediately prior to the Change in Control; or

                (ii)    A reduction in the Executive's annual base salary as in
         effect on the date hereof or as the same may be increased from time to
         time; or

                (iii)   The relocation of the Employers' offices at which the
         Executive is principally employed immediately prior to the date of a
         Change in Control to a location more than 25 miles from such offices,
         or the requirement by the Employers for the Executive to be based
         anywhere other than the Employers' offices at such location, except for
         required travel on the Employers' business to an extent substantially
         consistent with the Executive's business travel obligations immediately
         prior to the Change in Control; or

                (iv)    The failure by the Employers to pay to the Executive any
         portion of her compensation or to pay to the Executive any portion of
         an installment of deferred compensation under any deferred compensation
         program of the Employers within 15 days of the date such compensation
         is due without prior written consent of the Executive; or

                (v)     Breach by the Employers of any provision of this
         Agreement, the SERP or any other agreement that may exist from time to
         time between the Executive and the Employers that provides for the
         payment of any compensation or benefits to Executive; or

                (vi)    The failure by the Employers to obtain and deliver to
         the Executive an effective agreement from any successor to assume and
         agree to perform this Agreement.

            (f) Date of Termination. "Date of Termination" shall mean: (A) if
Executive's employment is terminated by her death, the date of her death; (B) if
Executive's employment is terminated by reason of her disability, 30 days after
the date on which a notice of termination is given, (C) if Executive's
employment is terminated by the Employers without cause, 60 days after the date
on which a notice of termination is given; and (D) if Executive's employment is
terminated for any other reason, the date on which a notice of termination is
given.

         7. Compensation Upon Termination.

            (a) Termination Due to Death. If Executive's employment terminates
by reason of her death, the Employers shall, within 90 days of death, pay in a
lump sum cash payment to such person as Executive shall designate in a notice
filed with the Employers or, if no such person is designated, to Executive's
estate, Executive's accrued and unpaid salary to the date of her death, plus her
accrued and unpaid incentive compensation, if any. Upon the death of Executive,
all unvested stock options granted to Executive shall immediately vest and
become fully exercisable, and Executive's estate or other legal representatives
shall have one year from the Date of Termination, to exercise all stock options
granted to Executive. All other stock-based grants and awards held by Executive
shall vest upon the death of Executive. For a period of one year following the
Date of

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Termination, the Employers shall pay such health insurance premiums as may be
necessary to allow Executive's spouse and dependents to receive health insurance
coverage substantially similar to coverage they received prior to the Date of
Termination. In addition to the foregoing, any payments to which Executive's
spouse, beneficiaries, or estate may be entitled under any employee benefit plan
shall also be paid in accordance with the terms of such plan or arrangement.
Such payments, in the aggregate, shall fully discharge the Employers'
obligations hereunder.

            (b) Disability. In the event of termination pursuant to Section
6(b), the Employers shall, within 90 days of the Date of Termination, pay to the
Executive in a lump sum cash payment Executive's accrued and unpaid salary to
the Date of Termination, plus her accrued and unpaid incentive compensation, if
any. In addition, the Executive shall be entitled to the following benefits,
subject to the Executive signing a general release of claims (other than claims
for the right to receive the payments or benefits set forth in this Section
7(b)) in a form and manner satisfactory to the Employers:

                (i)     The Executive shall continue to receive her full salary
         under Section 4(a) of this Agreement until the earlier of her death,
         her becoming eligible for disability income under the Employers'
         disability income plan or three years following the Date of
         Termination;

                (ii)    For a period of three years following the Date of
         Termination, the Employers shall pay such health insurance premiums as
         may be necessary to allow Executive and Executive's spouse and
         dependents to receive health insurance coverage substantially similar
         to coverage they received immediately prior to the Date of Termination;
         and

                (iii)   All unvested stock options granted to Executive shall
         immediately vest and become exercisable, and the Executive or her legal
         representative shall have one year from the Date of Termination to
         exercise all stock options, subject to the provisions of Section 9(c).
         All other stock-based grants and awards held by Executive shall
         immediately vest upon the Date of Termination.

            (c) Termination by the Employers for Cause. In the event of
termination pursuant to Section 6(c), the Employers shall, within 90 days of the
Date of Termination, pay to the Executive in a lump sum cash payment Executive's
accrued and unpaid salary to the Date of Termination. Thereafter, the Employers
shall have no further obligation to Executive except as otherwise expressly
provided under this Agreement, provided that any such termination shall not
adversely affect or alter Executive's rights under any employee benefit plan of
the Employers in which Executive, at the Date of Termination, has a vested
interest, unless otherwise provided in such employee benefit plan or any
agreement or other instrument attendant thereto. In addition, all stock options
held by Executive as of the Date of Termination shall immediately terminate and
be of no further force and effect, and all other stock-based grants and awards
shall be cancelled or terminated in accordance with their terms.

            (d) Termination by the Employers Without Cause. In the event of
termination pursuant to Section 6(d), the Employers shall, within 90 days

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of the Date of Termination, pay to the Executive in a lump sum cash payment
Executive's accrued and unpaid salary to the Date of Termination, plus her
accrued and unpaid incentive compensation, if any. In addition, the Executive
shall be entitled to the following benefits, subject to the Executive signing a
general release of claims (other than claims for the right to receive the
payments or benefits set forth in this Section 7(d)) in a form and manner
satisfactory to the Employers:

                (i)     The Employers shall within 30 days following the Date of
         Termination pay Executive in a lump sum cash payment an amount equal to
         three times the sum of (A) Executive's current base salary and (B) the
         greater of (1) her immediate prior fiscal year's bonus or (2) the
         average of the Executive's bonus for the immediate past three fiscal
         years;

                (ii)    Upon the Date of Termination, each unvested stock option
         and any other stock-based grants and awards held by Executive shall
         immediately vest and become exercisable by the Executive. Subject to
         the provisions of Section 9(c), each such stock option may be exercised
         by Executive within 180 days after the Date of Termination;

                (iii)   In addition to any other benefits to which Executive may
         be entitled in accordance with the Employers' then existing severance
         policies, the Employers shall, for a period of three years commencing
         on the Date of Termination, pay such health insurance premiums as may
         be necessary to allow Executive and Executive's spouse and dependents
         to continue to receive health insurance coverage substantially similar
         to coverage they received immediately prior to the Date of Termination;
         and

                (iv)    Except as expressly set forth in this Section 7(d) or
         required by applicable law, the Executive shall not be entitled to any
         other payments or benefits from the Employers following her termination
         without cause.

Notwithstanding the foregoing, the terms of this Section 7(d) shall not apply to
a termination with respect to which Executive is entitled to receive benefits
pursuant to Section 8(c).

            (e) Termination by the Executive. In the event of termination
pursuant to Section 6(e), the Employers shall, within 90 days of the Date of
Termination, pay to the Executive in a lump sum cash payment Executive's accrued
and unpaid salary to the Date of Termination. Thereafter, the Employers shall
have no further obligation to Executive except as otherwise expressly provided
under this Agreement, provided that any such termination shall not adversely
affect or alter Executive's rights under any employee benefit plan of the
Employers in which Executive, at the Date of Termination, has a vested interest,
unless otherwise provided in such employee benefit plan or any agreement or
other instrument attendant thereto. In addition, subject to the provisions of
Section 9(c), all vested but unexercised stock options held by Executive as of
the Date of Termination must be exercised by Executive within three months
following the Date of Termination or by the end of the option term, if earlier.
All other stock-based grants and awards held by Executive shall vest or be
canceled upon the Date of Termination in accordance with their terms.
Notwithstanding the foregoing, the terms of

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this Section 7(e) shall not apply to a termination with respect to which
Executive is entitled to receive benefits pursuant to Section 8(c).

         8. Certain Change in Control Payments.

            (a) Purpose. The provisions of this Section 8 shall apply if the
Date of Termination is within 24 months after the first event constituting a
Change in Control. The provisions of this Section 8 shall terminate and be of no
further force or effect beginning on the second anniversary of a Change in
Control.

            (b) A "Change in Control" shall be deemed to have occurred in any
one of the following events:

                (i)     Any "person" (as such term is used in Sections 13(d) and
         14(d)(2) of the Securities Exchange Act of 1934 (the "Act")) becomes a
         "beneficial owner" (as such term is defined in Rule 13d-3 promulgated
         under the Act) (other than any trustee or other fiduciary holding
         securities under an employee benefit plan of the Company, or any
         corporation owned, directly or indirectly, by the stockholders of the
         Company in substantially the same proportions as their ownership of
         stock of the Company), directly or indirectly, of securities of the
         Company representing fifty percent (50%) or more of the combined voting
         power of the Company's then outstanding securities;

                (ii)    Persons who, as of October 1, 2002, constituted the
         Company's Board of Directors (the "Incumbent Board") cease for any
         reason, including without limitation as a result of a tender offer,
         proxy contest, merger or similar transaction, to constitute at least a
         majority of the Board of Directors of the Company, provided that any
         person becoming a director of the Company subsequent to October 1, 2002
         whose election was approved by at least a majority of the directors
         then comprising the Incumbent Board shall, for purposes of this
         Agreement, be considered a member of the Incumbent Board;

                (iii)   The stockholders of the Company approve a merger or
         consolidation of the Company with any other corporation or other
         entity, other than (A) a merger or consolidation which would result in
         the voting securities of the Company outstanding immediately prior
         thereto continuing to represent (either by remaining outstanding or by
         being converted into voting securities of the surviving entity) more
         than 60% of the combined voting power of the voting securities of the
         Company or such surviving entity outstanding immediately after such
         merger or consolidation or (B) a merger or consolidation effected to
         implement a recapitalization of the Company (or similar transaction) in
         which no "person" (as hereinabove defined) acquires more than 50% of
         the combined voting power of the Company's then outstanding securities;
         or

                (iv)    The stockholders of the Company approve a plan of
         complete liquidation of the Company or an agreement for the sale or
         disposition by the Company of all or substantially all of the Company's
         assets.

            (c) Severance Payment. In the event within 24 months after a Change
in Control the Executive's employment is terminated by the Employers

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without cause (pursuant to Section 6(d)) or by the Executive for Good Reason
(pursuant to Section 6(e)), then in lieu of the benefits provided in Sections
7(d) and 7(e) above the Executive shall be entitled to the following benefits,
subject to signing by Executive of a general release of claims (other than
claims for the right to receive the payments or benefits set forth in this
Section 8) in a form and manner satisfactory to the Employers:

                (i)     The Employers shall pay to the Executive an amount equal
         to three times the "base amount" (as such term is defined in Section
         280G(b)(3) of the Internal Revenue Code of 1986, as amended (the
         "Code")) applicable to the Executive, payable in one lump-sum cash
         payment no later than 30 days following the Date of Termination (as
         such term is defined in Section 6(f)); and

                (ii)    All unvested stock options and other stock based awards
         granted to Executive shall immediately vest and become exercisable by
         the Executive. Each such stock option, may be exercised by Executive
         within 180 days after the Date of Termination

                (iii)   In addition to any other benefits to which the Executive
         may be entitled in accordance with the Employers' then existing
         severance policies, the Employers shall, for a period of three years
         commencing on the Date of Terminations, pay such health insurance
         premiums as may be necessary to allow Executive and Executive's spouse
         and dependents to continue to receive health insurance coverage
         substantially similar to coverage they received immediately prior to
         the Date of Termination.

            (d) Additional Limitation.

                (i)     Anything in this Agreement to the contrary
         notwithstanding, in the event that any compensation, payment or
         distribution by the Employers to or for the benefit of Executive,
         whether paid or payable or distributed or distributable pursuant to the
         terms of this Agreement or otherwise (the "Severance Payments"), would
         be subject to the excise tax imposed by Section 4999 of the Code the
         following provisions shall apply:

                        (A) If the Severance Payments, reduced by the sum of (1)
            the Excise Tax and (2) the total of the Federal, state, and local
            income and employment taxes payable by Executive on the amount of
            the Severance Payments which are in excess of the Threshold
            Amount (as defined below), are greater than or equal to the
            Threshold Amount, Executive shall be entitled to the full
            benefits payable under this Agreement.

                        (B) If the Threshold Amount is less than (x) the
            Severance Payments, but greater than (y) the Severance Payments
            reduced by the sum of (1) the Excise Tax and (2) the total of the
            Federal, state, and local income and employment taxes on the amount
            of the Severance Payments which are in excess of the Threshold
            Amount, then the benefits payable under this Agreement shall be
            reduced (but not below zero) to the extent necessary so that the
            maximum Severance Payments shall not exceed the Threshold Amount. To
            the extent that there is more than one method of reducing the
            payments to bring them within the

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               Threshold Amount, Executive shall determine which method shall be
               followed; provided that if Executive fails to make such
               determination within 45 days after the Employers have sent
               Executive written notice of the need for such reduction, the
               Employers may determine the amount of such reduction in its sole
               discretion.

         For the purposes of this Paragraph 8(d)(iv), "Threshold Amount" shall
         mean three times Executive's "base amount" within the meaning of
         Section 280G(b)(3) of the Code and the regulations promulgated
         thereunder less one dollar ($1.00); and "Excise Tax" shall mean the
         excise tax imposed by Section 4999 of the Code, and any interest or
         penalties incurred by Executive with respect to such excise tax.

                  (ii)  The determination as to which of the alternative
         provisions of Paragraph 8(d)(iv)(A) shall apply to Executive shall be
         made by KPMG LLP or any other nationally recognized accounting firm
         selected by the Employers (the "Accounting Firm"), which shall provide
         detailed supporting calculations both to the Employers and Executive
         within 15 business days of the Date of Termination, if applicable, or
         at such earlier time as is reasonably requested by the Employers or
         Executive. For purposes of determining which of the alternative
         provisions of Paragraph 8(d)(iv)(A) shall apply, Executive shall be
         deemed to pay federal income taxes at the highest marginal rate of
         federal income taxation applicable to individuals for the calendar year
         in which the determination is to be made, and state and local income
         taxes at the highest marginal rates of individual taxation in the state
         and locality of Executive's residence on the Date of Termination, net
         of the maximum reduction in federal income taxes which could be
         obtained from deduction of such state and local taxes. Any
         determination by the Accounting Firm shall be binding upon the
         Employers and Executive.

              (e) Fees and Expenses. The Employers shall pay to the Executive
all reasonable legal and arbitration fees and expenses incurred by Executive in
successfully obtaining or enforcing any right or benefit provided in Section 8
of this Agreement.

         9.   Non-competition and Confidential Information.

              (a) Non-competition. During the term of Executive's employment
with the Employers, and, if Executive's employment with the Employers terminates
for any reason at least 90 days prior to a Change in Control, then during the
period after such termination of employment equal to the longer of (x) one year
following the Date of Termination, and (y) three years following the Date of
Termination if the Executive receives payments or benefits pursuant to Sections
7(b), 7(d) or 8(c) hereof, the Executive will not, directly or indirectly,
whether as owner, partner, shareholder, consultant, agent, employee, co-venturer
or otherwise, or through any person, association or entity, become an employee
of or a consultant to, become a Director of or acquire any ownership interest
in, or carry on, operate, manage, control, or become involved in any manner with
any bank (or any financial institution that engages in consumer banking) that
maintains or operates an office or branch in any city or town where the
Employers maintain or operate an office or branch as of the Date of Termination,
nor will Executive attempt to hire any employee of the Employers, assist (but
not including giving references)

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in such hiring by any other person, association or entity, encourage any such
employee to terminate her or her relationship with the Employers, or solicit or
encourage any customer of the Employers to terminate or reduce its relationship
with the Employers, or to conduct with any other person, association or entity
any business or activity which such customer conducts or could conduct with the
Employers, whether or not the Employers' relationship with such customer was
originally established in whole or in part by the Executive; provided, however,
that the foregoing shall not prohibit the Executive from owning up to two
percent (2%) of the outstanding stock of a publicly traded company engaged in
the banking or financial services industry.

            (b) Confidential Information. The Executive will not at any time
disclose to any other person, association or entity (except as required by
applicable law or in connection with the performance of her duties and
responsibilities hereunder), or use for her own benefit or gain, any
confidential information of the Employers obtained by her incident to her
employment with the Employers. The term "confidential information" includes,
without limitation, financial information, business plans, business practices,
customer lists, prospects and opportunities (such as lending relationships,
trust relationships, financial product developments, or possible acquisitions or
dispositions of businesses or facilities) which have been implemented, discussed
or considered by the Employers but does not include any information which has
become part of the public domain by means other than the Executive's
non-observance of her obligations hereunder.

            (c) Relief. The Executive agrees that the Employers shall be
entitled to injunctive relief for any breach by her of the covenants contained
in Section 9(a) or 9(b). In addition, notwithstanding anything herein or in any
option plan or agreement to the contrary, with respect to any stock option
granted to the Executive by the Employers on or after the date hereof (the "New
Options"), upon any breach by Executive of the covenants contained in Section
9(a) then (i) all New Options shall immediately terminate and be of no further
force and effect, and (ii) with respect to any New Options that were exercised
during the one year period immediately prior to such breach (A) to the extent
Executive owns any shares that he received as a result of such option exercise,
then Executive shall sell to the Employers (and the Employers shall purchase
from Executive) such shares for an aggregate purchase price equal to the lesser
of (x) the aggregate exercise price paid by Executive for such shares, or (y)
the fair market value of such shares, and (B) to the extent Executive no longer
owns any shares that he received as a result of such option exercise, the
Executive shall pay to the Employers an amount of cash equal to the sum of (x)
any gain realized upon the exercise of such option, and (y) any gain realized
upon the sale or transfer of such shares.

            (d) Interpretation. In the event that any provision of this Section
9 shall be determined by any court of competent jurisdiction to be unenforceable
by reason of its being extended over too great a period of time, too large a
geographic area, or too great a range of activities, it shall be interpreted to
extend only over the maximum period of time, geographic area, or range of
activities as to which it may be enforceable. As used in this Section 9, the
term "Employers" means the Bank, the Company and their affiliates.

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         10. Conflicting Agreements. The Executive hereby represents and
warrants that the execution of this Agreement and the performance of her
obligations hereunder will not breach or be in conflict with any other agreement
to which she is a party or is bound, and that she is not now subject to any
covenants against competition or similar covenants which would affect the
performance of her obligations hereunder.

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

         12. Arbitration of Disputes. Any controversy or claim arising out of or
relating to this Agreement or the breach thereof shall be settled by arbitration
in accordance with the rules of the American Arbitration Association in the City
of Boston. Such arbitration shall be conducted in the City of Boston in
accordance with the rules of the American Arbitration Association. Judgment upon
the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.

         13. Assignment; Successors and Assigns, etc. Neither the Employers nor
the Executive may make any assignment of this Agreement or any interest herein,
by operation of law or otherwise, without the prior written consent of the other
party; provided, however, that the Employers may assign their rights under this
Agreement without the consent of the Executive in the event the Employers shall
hereafter effect a reorganization, consolidate with or merge into any other
party, or transfer all or substantially all of their properties or assets to any
other party.

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

         15. Enforceability. If any portion or provision of this Agreement shall
to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law. The provisions of Sections 8(d), 8(e), 9 and 12
shall survive the termination of this Agreement.

         16. Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by registered or certified mail, postage prepaid, to the
Executive at the last address the Executive has filed in writing with the
Employers or, in the case of the Employers, at either of their main offices,
attention of the President.

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

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<PAGE>

         18. Governing Law. This is a Massachusetts contract and shall be
construed under and be governed in all respects by the laws of the Commonwealth
of Massachusetts.

         19. Prior Agreements. This Agreement shall supercede and replace in all
respects the Employment Agreement and the Severance Agreement. The Deferred
Compensation Program and all other agreements that may exist between the
Employers and Executive that provide for the payment of any compensation or
benefits to Executive shall survive.

                                       12

<PAGE>

         IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Employers and the Executive, as of the date first above
written.

                                                MASSBANK

                                                By: /s/ Gerard H. Brandi
                                                    ----------------------------
                                                    Gerard H. Brandi
                                                    Title:  President & CEO

                                                MASSBANK CORP.

                                                By: /s/ Gerard H. Brandi
                                                    ----------------------------
                                                    Title: President & CEO

                                                    /s/ Donna H. West
                                                    ----------------------------
                                                    Donna H. West

                                       13<PAGE>

                                                                 EXHIBIT 10.3.21

                              EMPLOYMENT AGREEMENT

     This Employment Agreement ("Agreement") is made as of the 28th day of
October, 2002, by and between MASSBANK, a Massachusetts savings bank with its
main office in Reading, Massachusetts (the "Bank"), and Thomas J. Queeney (the
"Executive").

                                   WITNESSETH

     WHEREAS, the parties hereto desire to provide for the Executive's continued
employment by the Bank and to delineate the Executive's and the Bank's rights
and obligations arising in connection therewith, including in the event of a
Change in Control (as defined herein) subject to the amended terms and
conditions set forth herein.

     NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Bank and the Executive agree
as follows:

     1.   Employment. The Bank agrees to employ the Executive and the Executive
agrees to serve in the employ of the Bank on the terms and conditions
hereinafter set forth.

     2.   Capacity. The Executive shall serve as an officer of the Bank in such
capacity as the Board of Directors may from time to time determine. In such
capacity the Executive shall, subject to the By-laws of the Bank and to the
direction of its President, Board of Directors and other appropriate officers,
have responsibility for such functions and duties as he may be directed from
time to time by the President or other appropriate officer of the Bank.

     3.   Term. Subject to the applicable provisions herein, the term of the
Executive's employment hereunder shall be for two years from the date hereof;
provided, however, that the term shall be extended automatically by an
additional one day commencing on the first day following the date hereof and on
each subsequent day thereafter, unless either the Executive or the Bank gives
written notice to the other of such party's election not to extend the term of
this Agreement. The last day of the term of the Executive's employment
hereunder, as so extended from time to time, is herein sometimes referred to as
the "Expiration Date."

     4.   Compensation and Benefits. The regular compensation and benefits
payable to the Executive under this Agreement shall be as follows:

          (a)  Salary. For all services rendered by the Executive under this
Agreement, the Bank shall pay the Executive a salary equal to his present salary
at the Bank, subject to increase from time to time in the sole discretion of the
Board of Directors upon the recommendation of the Compensation Committee or the
Chief Executive Officer of the Bank. The Executive's salary shall be payable in
periodic installments in accordance with the Bank's usual practices for its
executives.

<PAGE>

          (b)  Regular Benefits. The Executive shall also be entitled to
participate in those medical insurance plans, life insurance plans, disability
income plans, retirement plans, bonus incentive plans and other benefit plans
from time to time in effect generally for executives of the Bank. Such
participation shall be subject to (i) the terms of the applicable plan
documents, (ii) generally applicable policies of the Bank and (iii) the
discretion of the Board of Directors of the Bank or any administrative or other
committee provided for in or contemplated by such plan.

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

          (d)  Vacation. The Executive shall be entitled to vacation in
accordance with the Bank's usual practices for its executives.

     5.   Extent of Service. During his employment hereunder, the Executive
shall devote his full business time, best efforts and business judgment, skill
and knowledge to the advancement of the interests of the Bank and to the
discharge of his duties and responsibilities hereunder. The Executive shall
comply at all times with all Bank policies. He shall not engage in any other
business activity, except as may be approved by the President of the Bank or its
Board of Directors; provided, however, that nothing herein shall be construed as
preventing the Executive from:

          (a)  Investing his assets in a manner not prohibited by Section 9
hereof, and in such form or manner as shall not require any material services on
his part in the operations or affairs of the companies or other entities in
which such investments are made;

          (b)  Serving on the board of directors of any company, subject to the
approval of the Chief Executive Officer of the Bank and the prohibitions set
forth in Section 9 and provided that he shall not be required to render any
material services with respect to the operations or affairs of any such company;
or

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

     6.   Termination. Notwithstanding the provisions of Section 3 hereof, the
Executive's employment hereunder may be terminated without any breach of this
Agreement under the following circumstances:

          (a)  Death. In the event of the Executive's death during the
Executive's employment hereunder, the Executive's employment shall terminate on
the date of his death.

          (b)  Disability. In the event of the Executive's "disability" during
the Executive's employment hereunder, the Executive's employment may be
terminated by the Bank. For purposes of this Agreement, "disability" shall mean
the Executive's incapacity due to physical or mental illness which has caused
the Executive to be absent from the full-time performance of his

                                       2

<PAGE>

duties with the Bank for a period of six consecutive months if the Bank shall
have given the Executive a notice of termination and, within 30 days after such
notice is given, the Executive shall not have returned to the full-time
performance of his duties.

          (c)  Termination by the Bank for Cause. The Executive's employment
hereunder may be terminated for "cause" without further liability on the part of
the Bank effective immediately upon a determination of the President or the
Board of Directors that such "cause" exists. For purposes hereof, any one or
more of the following shall constitute "cause" for such termination:

               (i)   Dishonesty of the Executive with respect to the Bank or any
     affiliate thereof;

               (ii)  Commission by the Executive of a crime punishable as a
     felony;

               (iii) Failure by the Executive to perform in a satisfactory
     manner a substantial portion of his duties and responsibilities hereunder;
     or

               (iv)  Breach by the Executive of any term of this Agreement,
     including without limitation Section 9 hereof.

          (d)  Termination by the Bank Without Cause. The Executive's employment
with the Bank may be terminated without cause at any time by the Bank.

          (e)  Termination by the Executive. The Executive's employment with the
Bank may be terminated by Executive at any time, including for Good Reason
following a Change in Control. For purposes of this Agreement, Good Reason shall
mean the occurrence of any of the following events:

               (i)   A substantial adverse change, not consented to by the
     Executive, in the nature or scope of the Executive's title,
     responsibilities, authorities, powers, reporting relationship, functions or
     duties from the title, responsibilities, authorities, powers, reporting
     relationship, functions or duties exercised by the Executive immediately
     prior to the Change in Control; or

               (ii)  A reduction in the Executive's annual base salary as in
     effect on the date hereof or as the same may be increased from time to
     time; or

               (iii) The relocation of the Bank's offices at which the Executive
     is principally employed immediately prior to the date of a Change in
     Control to a location more than 25 miles from such offices, or the
     requirement by the Bank for the Executive to be based anywhere other than
     the Bank's offices at such location, except for required travel on the
     Bank's business to an extent substantially consistent with the Executive's
     business travel obligations immediately prior to the Change in Control; or

               (iv)  The failure by the Bank to pay to the Executive any portion
     of his compensation or to pay to the Executive any portion of

                                        3

<PAGE>

     an installment of deferred compensation under any deferred compensation
     program of the Bank within 15 days of the date such compensation is due
     without prior written consent of the Executive; or

               (v)   Breach by the Bank of any provision of this Agreement or
     any other agreement that may exist from time to time between the Executive
     and the Bank that provides for the payment of any compensation or benefits
     to Executive; or

               (vi)  The failure by the Bank to obtain and deliver to the
     Executive an effective agreement from any successor to assume and agree to
     perform this Agreement.

          (f)  Date of Termination. "Date of Termination" shall mean: (A) if
Executive's employment is terminated by his death, the date of his death; (B) if
Executive's employment is terminated by reason of his disability, 30 days after
the date on which a notice of termination is given, (C) if Executive's
employment is terminated by the Bank without cause, 60 days after the date on
which a notice of termination is given; and (D) if Executive's employment is
terminated for any other reason, the date on which a notice of termination is
given.

     7.   Compensation Upon Termination.

          (a)  Termination Due to Death. If Executive's employment terminates by
reason of his death, the Bank shall, within 90 days of death, pay in a lump sum
cash payment to such person as Executive shall designate in a notice filed with
the Bank or, if no such person is designated, to Executive's estate, Executive's
accrued and unpaid salary to the date of his death, plus his accrued and unpaid
incentive compensation, if any. Upon the death of Executive, all unvested stock
options granted to Executive shall immediately vest and become fully
exercisable, and Executive's estate or other legal representatives shall have
one year from the Date of Termination, to exercise all stock options granted to
Executive. All other stock-based grants and awards held by Executive shall vest
upon the death of Executive. For a period of one year following the Date of
Termination, the Bank shall pay such health insurance premiums as may be
necessary to allow Executive's spouse and dependents to receive health insurance
coverage substantially similar to coverage they received prior to the Date of
Termination. In addition to the foregoing, any payments to which Executive's
spouse, beneficiaries, or estate may be entitled under any employee benefit plan
shall also be paid in accordance with the terms of such plan or arrangement.
Such payments, in the aggregate, shall fully discharge the Bank's obligations
hereunder.

          (b)  Disability. In the event of termination pursuant to Section 6(b),
the Bank shall, within 90 days of the Date of Termination, pay to the Executive
in a lump sum cash payment Executive's accrued and unpaid salary to the Date of
Termination, plus his accrued and unpaid incentive compensation, if any. In
addition, the Executive shall be entitled to the following benefits, subject to
the Executive signing a general release of claims (other than claims for the
right to receive the payments or benefits set forth in this Section 7(b)) in a
form and manner satisfactory to the Bank:

                                       4

<PAGE>

               (i)   The Executive shall continue to receive his full salary
     under Section 4(a) of this Agreement until the earlier of his death, his
     becoming eligible for disability income under the Bank's disability income
     plan or two years following the Date of Termination;

               (ii)  For a period of two years following the Date of
     Termination, the Bank shall pay such health insurance premiums as may be
     necessary to allow Executive and Executive's spouse and dependents to
     receive health insurance coverage substantially similar to coverage they
     received immediately prior to the Date of Termination; and

               (iii) All unvested stock options granted to Executive shall
     immediately vest and become exercisable, and the Executive or his legal
     representative shall have one year from the Date of Termination to exercise
     all stock options, subject to the provisions of Section 9(c). All other
     stock-based grants and awards held by Executive shall immediately vest upon
     the Date of Termination.

          (c)  Termination by the Bank for Cause. In the event of termination
pursuant to Section 6(c), the Bank shall, within 90 days of the Date of
Termination, pay to the Executive in a lump sum cash payment Executive's accrued
and unpaid salary to the Date of Termination. Thereafter, the Bank shall have no
further obligation to Executive except as otherwise expressly provided under
this Agreement, provided that any such termination shall not adversely affect or
alter Executive's rights under any employee benefit plan of the Bank in which
Executive, at the Date of Termination, has a vested interest, unless otherwise
provided in such employee benefit plan or any agreement or other instrument
attendant thereto. In addition, all stock options held by Executive as of the
Date of Termination shall immediately terminate and be of no further force and
effect, and all other stock-based grants and awards shall be cancelled or
terminated in accordance with their terms.

          (d)  Termination by the Bank Without Cause. In the event of
termination pursuant to Section 6(d), the Bank shall, within 90 days of the Date
of Termination, pay to the Executive in a lump sum cash payment Executive's
accrued and unpaid salary to the Date of Termination, plus his accrued and
unpaid incentive compensation, if any. In addition, the Executive shall be
entitled to the following benefits, subject to the Executive signing a general
release of claims (other than claims for the right to receive the payments or
benefits set forth in this Section 7(d)) in a form and manner satisfactory to
the Bank:

               (i)   The Bank shall within 30 days following the Date of
     Termination pay Executive in a lump sum cash payment an amount equal to two
     times the sum of (A) Executive's current base salary and (B) the greater of
     (1) his immediate prior fiscal year's bonus or (2) the average of the
     Executive's bonus for the immediate past three fiscal years;

               (ii)  Upon the Date of Termination, each unvested stock option
     and any other stock-based grants and awards held by Executive shall
     immediately vest and become exercisable by the Executive. Subject to the
     provisions of Section 9(c), each such stock option may be exercised by
     Executive within 180 days after the Date of Termination;

                                       5

<PAGE>

               (iii) In addition to any other benefits to which Executive may be
     entitled in accordance with the Bank's then existing severance policies,
     the Bank shall, for a period of two years commencing on the Date of
     Termination, pay such health insurance premiums as may be necessary to
     allow Executive and Executive's spouse and dependents to continue to
     receive health insurance coverage substantially similar to coverage they
     received immediately prior to the Date of Termination; and

               (iv) Except as expressly set forth in this Section 7(d) or
     required by applicable law, the Executive shall not be entitled to any
     other payments or benefits from the Bank following his termination without
     cause.

Notwithstanding the foregoing, the terms of this Section 7(d) shall not apply to
a termination with respect to which Executive is entitled to receive benefits
pursuant to Section 8(c).

          (e)  Termination by the Executive. In the event of termination
pursuant to Section 6(e), the Bank shall, within 90 days of the Date of
Termination, pay to the Executive in a lump sum cash payment Executive's accrued
and unpaid salary to the Date of Termination. Thereafter, the Bank shall have no
further obligation to Executive except as otherwise expressly provided under
this Agreement, provided that any such termination shall not adversely affect or
alter Executive's rights under any employee benefit plan of the Bank in which
Executive, at the Date of Termination, has a vested interest, unless otherwise
provided in such employee benefit plan or any agreement or other instrument
attendant thereto. In addition, subject to the provisions of Section 9(c), all
vested but unexercised stock options held by Executive as of the Date of
Termination must be exercised by Executive within three months following the
Date of Termination or by the end of the option term, if earlier. All other
stock-based grants and awards held by Executive shall vest or be canceled upon
the Date of Termination in accordance with their terms. Notwithstanding the
foregoing, the terms of this Section 7(e) shall not apply to a termination with
respect to which Executive is entitled to receive benefits pursuant to Section
8(c).

     8.   Certain Change in Control Payments.

          (a)  Purpose. The provisions of this Section 8 shall apply if the Date
of Termination is within 24 months after the first event constituting a Change
in Control. The provisions of this Section 8 shall terminate and be of no
further force or effect beginning on the second anniversary of a Change in
Control.

          (b)  A "Change in Control" shall be deemed to have occurred in any one
of the following events:

               (i)   Any "person" (as such term is used in Sections 13(d) and
     14(d)(2) of the Securities Exchange Act of 1934 (the "Act")) becomes a
     "beneficial owner" (as such term is defined in Rule 13d-3 promulgated under
     the Act) (other than MASSBANK Corp. ("the Company"), any trustee or other
     fiduciary holding securities under an employee benefit plan of the Company,
     or any corporation owned, directly or indirectly, by the stockholders of
     the Company in substantially the same proportions as their ownership of
     stock of the Company), directly

                                       6

<PAGE>

     or indirectly, of securities of the Company representing fifty percent
     (50%) or more of the combined voting power of the Company's then
     outstanding securities;

               (ii)  Persons who, as of October 1, 2002, constituted the
     Company's Board of Directors (the "Incumbent Board") cease for any reason,
     including without limitation as a result of a tender offer, proxy contest,
     merger or similar transaction, to constitute at least a majority of the
     Board of Directors of the Company, provided that any person becoming a
     director of the Company subsequent to October 1, 2002 whose election was
     approved by at least a majority of the directors then comprising the
     Incumbent Board shall, for purposes of this Agreement, be considered a
     member of the Incumbent Board;

               (iii) The stockholders of the Company approve a merger or
     consolidation of the Company with any other corporation or other entity,
     other than (A) a merger or consolidation which would result in the voting
     securities of the Company outstanding immediately prior thereto continuing
     to represent (either by remaining outstanding or by being converted into
     voting securities of the surviving entity) more than 60% of the combined
     voting power of the voting securities of the Company or such surviving
     entity outstanding immediately after such merger or consolidation or (B) a
     merger or consolidation effected to implement a recapitalization of the
     Company (or similar transaction) in which no "person" (as hereinabove
     defined) acquires more than 50% of the combined voting power of the
     Company's then outstanding securities; or

               (iv)  The stockholders of the Company approve a plan of complete
     liquidation of the Company or an agreement for the sale or disposition by
     the Company of all or substantially all of the Company's assets.

         (c)   Severance Payment. In the event within 24 months after a Change
 in Control the Executive's employment is terminated by the Bank without cause
(pursuant to Section 6(d)) or by the Executive for Good Reason (pursuant to
Section 6(e)), then in lieu of the benefits provided in Sections 7(d) and 7(e)
above the Executive shall be entitled to the following benefits, subject to
signing by Executive of a general release of claims (other than claims for the
right to receive the payments or benefits set forth in this Section 8) in a form
and manner satisfactory to the Bank:

               (i)   The Bank shall pay to the Executive an amount equal to
     three times the "base amount" (as such term is defined in Section
     280G(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"))
     applicable to the Executive, payable in one lump-sum cash payment no later
     than 30 days following the Date of Termination (as such term is defined in
     Section 6(f)); and

               (ii)  All unvested stock options and other stock based awards
     granted to Executive shall immediately vest and become exercisable by the
     Executive. Each such stock option, may be exercised by Executive within 180
     days after the Date of Termination

               (iii) In addition to any other benefits to which the Executive
     may be entitled in accordance with the Bank's then existing

                                       7

<PAGE>

     severance policies, the Bank shall, for a period of three years commencing
     on the Date of Terminations, pay such health insurance premiums as may be
     necessary to allow Executive and Executive's spouse and dependents to
     continue to receive health insurance coverage substantially similar to
     coverage they received immediately prior to the Date of Termination.

         (d)   Additional Limitation.

               (i)   Anything in this Agreement to the contrary notwithstanding,
     in the event that any compensation, payment or distribution by the Bank to
     or for the benefit of Executive, whether paid or payable or distributed or
     distributable pursuant to the terms of this Agreement or otherwise (the
     "Severance Payments"), would be subject to the excise tax imposed by
     Section 4999 of the Code the following provisions shall apply:

                     (A) If the Severance Payments, reduced by the sum of (1)
         the Excise Tax and (2) the total of the Federal, state, and local
         income and employment taxes payable by Executive on the amount of the
         Severance Payments which are0 in excess of the Threshold Amount (as
         defined below), are greater than or equal to the Threshold Amount,
         Executive shall be entitled to the full benefits payable under this
         Agreement.

                     (B) If the Threshold Amount is less than (x) the Severance
         Payments, but greater than (y) the Severance Payments reduced by the
         sum of (1) the Excise Tax and (2) the total of the Federal, state, and
         local income and employment taxes on the amount of the Severance
         Payments which are in excess of the Threshold Amount, then the benefits
         payable under this Agreement shall be reduced (but not below zero) to
         the extent necessary so that the maximum Severance Payments shall not
         exceed the Threshold Amount. To the extent that there is more than one
         method of reducing the payments to bring them within the Threshold
         Amount, Executive shall determine which method shall be followed;
         provided that if Executive fails to make such determination within 45
         days after the Bank has sent Executive written notice of the need for
         such reduction, the Bank may determine the amount of such reduction in
         its sole discretion.

     For the purposes of this Paragraph 8(d)(iv), "Threshold Amount" shall mean
     three times Executive's "base amount" within the meaning of Section
     280G(b)(3) of the Code and the regulations promulgated thereunder less one
     dollar ($1.00); and "Excise Tax" shall mean the excise tax imposed by
     Section 4999 of the Code, and any interest or penalties incurred by
     Executive with respect to such excise tax.

               (ii)  The determination as to which of the alternative provisions
     of Paragraph 8(d)(iv)(A) shall apply to Executive shall be made by KPMG LLP
     or any other nationally recognized accounting firm selected by the Bank
     (the "Accounting Firm"), which shall provide detailed supporting
     calculations both to the Bank and Executive within 15 business days of the
     Date of Termination, if applicable, or at such earlier time as is
     reasonably requested by the Bank or Executive. For purposes of determining
     which of the alternative provisions of

                                       8

<PAGE>

     Paragraph 8(d)(iv)(A) shall apply, Executive shall be deemed to pay federal
     income taxes at the highest marginal rate of federal income taxation
     applicable to individuals for the calendar year in which the determination
     is to be made, and state and local income taxes at the highest marginal
     rates of individual taxation in the state and locality of Executive's
     residence on the Date of Termination, net of the maximum reduction in
     federal income taxes which could be obtained from deduction of such state
     and local taxes. Any determination by the Accounting Firm shall be binding
     upon the Bank and Executive.

         (e) Fees and Expenses. The Bank shall pay to the Executive all
reasonable legal and arbitration fees and expenses incurred by Executive in
successfully obtaining or enforcing any right or benefit provided in Section 8
of this Agreement.

     9.  Non-competition and Confidential Information.

         (a) Non-competition. During the term of Executive's employment with the
Bank, and, if Executive's employment with the Bank terminates for any reason at
least 90 days prior to a Change in Control, then during the period after such
termination of employment equal to the longer of (x) one year following the Date
of Termination, and (y) two years following the Date of Termination if the
Executive receives payments or benefits pursuant to Sections 7(b), 7(d) or 8(c)
hereof, the Executive will not, directly or indirectly, whether as owner,
partner, shareholder, consultant, agent, employee, co-venturer or otherwise, or
through any person, association or entity, become an employee of or a consultant
to, become a Director of or acquire any ownership interest in, or carry on,
operate, manage, control, or become involved in any manner with any bank (or any
financial institution that engages in consumer banking) that maintains or
operates an office or branch in any city or town where the Bank maintains or
operates an office or branch as of the Date of Termination, nor will Executive
attempt to hire any employee of the Bank, assist (but not including giving
references) in such hiring by any other person, association or entity, encourage
any such employee to terminate his or her relationship with the Bank, or solicit
or encourage any customer of the Bank to terminate or reduce its relationship
with the Bank, or to conduct with any other person, association or entity any
business or activity which such customer conducts or could conduct with the
Bank, whether or not the Bank's relationship with such customer was originally
established in whole or in part by the Executive; provided, however, that the
foregoing shall not prohibit the Executive from owning up to two percent (2%) of
the outstanding stock of a publicly traded company engaged in the banking or
financial services industry.

         (b) Confidential Information. The Executive will not at any time
disclose to any other person, association or entity (except as required by
applicable law or in connection with the performance of his duties and
responsibilities hereunder), or use for his own benefit or gain, any
confidential information of the Bank obtained by him incident to his employment
with the Bank. The term "confidential information" includes, without limitation,
financial information, business plans, business practices, customer lists,
prospects and opportunities (such as lending relationships, trust relationships,
financial product developments, or possible acquisitions or dispositions of
businesses or facilities) which have been implemented, discussed or considered
by the Bank but does not include

                                       9

<PAGE>

any information which has become part of the public domain by means other than
the Executive's non-observance of his obligations hereunder.

         (c) Relief. The Executive agrees that the Bank shall be entitled to
injunctive relief for any breach by him of the covenants contained in Section
9(a) or 9(b). In addition, notwithstanding anything herein or in any option plan
or agreement to the contrary, with respect to any stock option granted to the
Executive by the Bank on or after the date hereof (the "New Options"), upon any
breach by Executive of the covenants contained in Section 9(a) then (i) all New
Options shall immediately terminate and be of no further force and effect, and
(ii) with respect to any New Options that were exercised during the one year
period immediately prior to such breach (A) to the extent Executive owns any
shares that he received as a result of such option exercise, then Executive
shall sell to the Bank (and the Bank shall purchase from Executive) such shares
for an aggregate purchase price equal to the lesser of (x) the aggregate
exercise price paid by Executive for such shares, or (y) the fair market value
of such shares, and (B) to the extent Executive no longer owns any shares that
he received as a result of such option exercise, the Executive shall pay to the
Bank an amount of cash equal to the sum of (x) any gain realized upon the
exercise of such option, and (y) any gain realized upon the sale or transfer of
such shares.

         (d) Interpretation. In the event that any provision of this Section 9
shall be determined by any court of competent jurisdiction to be unenforceable
by reason of its being extended over too great a period of time, too large a
geographic area, or too great a range of activities, it shall be interpreted to
extend only over the maximum period of time, geographic area, or range of
activities as to which it may be enforceable. As used in this Section 9, the
term "Bank" means the Bank and its affiliates.

     10. Conflicting Agreements. The Executive hereby represents and warrants
that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party or is bound, and that he is not now subject to any covenants against
competition or similar covenants which would affect the performance of his
obligations hereunder.

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

     12. Arbitration of Disputes. Any controversy or claim arising out of or
relating to this Agreement or the breach thereof shall be settled by arbitration
in accordance with the rules of the American Arbitration Association in the City
of Boston. Such arbitration shall be conducted in the City of Boston in
accordance with the rules of the American Arbitration Association. Judgment upon
the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.

     13. Assignment; Successors and Assigns, etc. Neither the Bank nor the
Executive may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the other
party; provided, however, that the Bank may assign its rights under this
Agreement without the consent of the Executive in the event the Bank shall
hereafter effect a reorganization, consolidate with or merge into

                                       10

<PAGE>

any other party, or transfer all or substantially all of its properties or
assets to any other party.

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

     15. Enforceability. If any portion or provision of this Agreement shall to
any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law. The provisions of Sections 8(d), 8(e), 9 and 12
shall survive the termination of this Agreement.

     16. Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by registered or certified mail, postage prepaid, to the
Executive at the last address the Executive has filed in writing with the Bank
or, in the case of the Bank, at its main office, attention of the President.

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

     18. Governing Law. This is a Massachusetts contract and shall be construed
under and be governed in all respects by the laws of the Commonwealth of
Massachusetts.

     19. Prior Agreements. All agreements that may exist between the Bank and
Executive that provide for the payment of any compensation or benefits to
Executive shall survive.

                                       11

<PAGE>

         IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Bank and the Executive, as of the date first above written.

                                        MASSBANK

                                        By: /s/ Gerard H. Brandi
                                            -------------------------------
                                             Gerard H. Brandi
                                             Title:  President & CEO

                                        /s/ Thomas J. Queeney
                                        -----------------------------------
                                        Thomas J. Queeney

                                       12

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