Document:

Exhibit 10.4

                              EMPLOYMENT AGREEMENT

      AGREEMENT made and entered into as of this ________ day of __________,
2004 by and between First Ipswich Bancorp, a Massachusetts corporation having
its principal place of business in Ipswich, Massachusetts ("Company"), and Neil
St. John Raymond of Ipswich, Massachusetts (the "Executive").

                                WITNESSETHE THAT:

      WHEREAS, the Executive has been a director of the Company since its
inception, and has been a director of the Company's wholly-owned subsidiary, The
First National Bank of Ipswich ("Bank") for many years, and is intimately
familiar with the Company and the communities it serves; and

      WHEREAS, the Executive is currently, and has been for seven years,
Chairman of the Board of Directors of the Company, and in that capacity has
devoted and will in the future devote significant efforts on behalf of the
Company and the Bank; and

      WHEREAS, the Executive's experience and knowledge and his reputation and
contacts in the community and the banking industry are valuable to the Company
and its subsidiaries; and

      WHEREAS, the Company desires to agree as to the compensation of Executive
for his services.

      NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

      1. Employment.

            (a) The Company hereby employs Executive as its Chairman. In such
capacity, the Executive shall be subject to the supervision of the Board of
Directors of the Company (the "Board"), and shall be assigned such duties as are
appropriate to the office of Chairman. Executive hereby accepts such employment
and agrees to discharge his duties faithfully and to the best of his abilities.
Executive shall devote such time to the performance of his duties as Chairman of
the Company and in connection with such offices in any subsidiary of the Company
to which he may be elected or appointed as is mutually agreeable between the
Company and Executive. It is understood and agreed that Executive has other
business interests and shall not be required to devote full time to his duties
hereunder. The Company encourages participation by Executive in activities
generally considered to be in the public interest.
<PAGE>

            (b) The Company agrees to propose to its shareholders at each annual
meeting during the term hereof for which he is otherwise eligible for
re-election to the Board, re-election of Executive as Chairman of the Company.
The Company also agrees to propose and to vote for the election of Executive as
a member of the Board of Directors of Bank during the term hereof.

      2. Term. The period of employment of the Executive under this Agreement
shall be deemed to commence as of the date first above written and shall
continue in effect through March 31, 2007; provided, however that commencing on
March 31, 2005 and on each March 31 thereafter the term of this Agreement shall
automatically be extended for one additional year unless during the 90 day
period preceding such March 31, either party hereto notifies the other by
written notice of his or its intent not to extend the same.

      3. Compensation and Benefits.

            (a) Base Compensation. With respect to the period beginning on the
date hereof and ending on December 31, 2004 and each twelve (12) month period
beginning on January 1 thereafter during the term hereof, the Company shall pay
to the Executive in equal weekly installments a base annual salary (prorated for
the period from the date hereof to December 31, 2004) in the amount of One
Hundred Fifty Thousand ($150,000) Dollars. Each January 1 the base annual salary
of the Executive shall be increased by an amount not less than 4% of the
previous calendar year's base annual salary, whereupon such increased amount
shall thereafter constitute the Executive's base annual salary. It is the
intention of the Company to compensate the Executive at a level at least
comparable to the compensation of persons employed in the position Chairman of
companies engaged in New England in activities substantially similar to those of
the Company and having approximately the same combined gross assets as the
Company and its subsidiaries.

            (b) Fringe Benefits. At all times during the term of this Agreement,
the Company shall provide or cause to be provided to the Executive the fringe
benefits set forth on Exhibit A to this Agreement, together with such other
benefits as may from time to time be provided generally for executive officers
of the Company or the Bank. The Executive shall maintain adequate records of all
reimbursable expenses necessary to satisfy reporting requirements of the
Internal Revenue Code and applicable Treasury regulations.

      4. Non-Competition. At all times during the term of this Agreement in
which the Executive is employed by the Company and for a period thereafter of
one (1) year (the "Non-Compete Term"), the Executive shall not, directly or
indirectly, as an Executive of any person or entity (whether or not engaged in
business for profit), individual proprietor, partner, stockholder, director,
officer, joint venturer, investor,

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<PAGE>

lender or in any other capacity whatever (otherwise than as holder of less than
ten (10) percent of any securities publicly traded in the market) compete with
the Company and any subsidiary or affiliate of the Company in any city or town
in which the Company or such subsidiary or affiliate operates at any time during
the term of this Agreement, and any contiguous city or town.

      5. No Solicitation of Executives. At all times during the Non-Compete Term
(as defined in Section 4 hereof), the Executive shall not, directly or
indirectly, employ, attempt to employ, recruit or otherwise solicit, induce or
influence to leave his employment any Executive of the Company or its
subsidiaries.

      6. No Disclosure of Information. The Executive shall not at any time
divulge, use, furnish, disclose or make accessible to anyone other than the
Company or any of its subsidiaries any knowledge of information with respect to
confidential or secret data, procedures or techniques of the Company or any of
its subsidiaries, provided, however, that nothing in this Section 6 shall
prevent the disclosure by the Executive of any such information which at any
time comes in to the public domain other than as a result of the violation of
the terms of this Section 6 by the Executive or which is otherwise lawfully
acquired by the Executive.

      7. Termination of Employment. The employment of the Executive shall
terminate on the earliest to occur of the following dates:

            (a) The expiration of the term hereof, as from time to time
extended;

            (b) The Executive's resignation from the Company or the death or
disability of the Executive (the Executive being deemed to be disabled if he has
been unable for one hundred eighty (180) consecutive days to render services
required to be rendered by him during the term hereof);

            (c) At the election of the Company, for Cause, acting through its
Board of Directors, as hereinafter defined, after ten (10) business days' prior
written notice of the basis therefor to the Executive if during such period the
Executive shall not have cured the basis therefor. The Company shall give the
Executive written notice of the meeting at which his termination will be
considered, and the right to appear at such meeting, with his advisers. For
purposes of this Agreement, the Company shall be deemed to have "Cause" to
terminate the employment of the Executive under this Agreement only if:

                  (i)   The Executive is convicted by a court of competent
                        jurisdiction of any criminal offense involving
                        dishonesty or breach of trust;

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<PAGE>

                  (ii)  The Executive shall commit an act of fraud materially
                        evidencing bad faith toward the Company or any of its
                        subsidiaries, or shall engage in willful misconduct
                        which is demonstrably and materially injurious to the
                        Company, or any of its subsidiaries, monetarily or
                        otherwise;

                  (iii) The Executive willfully and continuously fails to
                        substantially perform the duties reasonably assigned to
                        him by the Board of Directors of the Company (other than
                        any such failure resulting from the Executive's
                        incapacity due to physical or mental illness) after a
                        demand for substantial performance is delivered to
                        Executive by the Board of Directors of the Company which
                        specifically identifies the manner in which the board
                        believes that Executive has not substantially performed
                        such duties.

      For purposes of this Section 7, no failure or action shall be considered
"willful" unless done, or omitted to be done, by Executive not in good faith and
without reasonable belief that the action or omission was in the best interest
of the Company.

      8. Payments Upon Termination of Employment.

            (a) Payments Upon Death. If at any time while he is employed
hereunder the Executive shall die, in addition to all other benefits to which he
or his personal representatives may be entitled, the Company shall pay to his
designated beneficiary or, if no such beneficiary exists, to his estate, for a
period of three (3) months following the Executive's death, such amounts of base
annual salary as the Executive would have been entitled to receive during said
period (and at the times he would have been entitled to receive them) had he
remained alive.

            (b) Payments Upon Disability. If at any time during the term of this
Agreement, in the opinion of a physician mutually agreeable to the Company and
the Executive, the Executive shall be determined to be unable to render services
hereunder due to physical or mental illness or accident, in addition to all
other benefits to which he or his personal representatives may be entitled, the
Executive shall be entitled to receive all benefits payable to him under the
Bank's long-term disability income plan. Upon termination due to disability as
provided in Section 7(b) hereof, Executive shall be entitled to benefits under
the Company's policy of disability insurance until Executive attains age 65 or,
if earlier, until he is no longer disabled, which benefits shall not be less
favorable then the benefits available under the policy in effect on the date of
this Agreement or the Company shall make up any shortfall. Executive shall also
be entitled to receive the health insurance benefits described on Exhibit A
during the period he is receiving disability payments.

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<PAGE>

            (c) Payments Upon Expiration of Term Without Renewal. In the event
that the term of this Agreement shall expire without renewal, the Executive
shall be entitled to receive compensation through the date of expiration and
shall be entitled to purchase at Bank's book value any Bank-owned automobile
then being used by him.

            (d) Payments Upon Termination for Cause. In the event that Executive
is terminated for Cause (as defined herein), the Executive shall be entitled to
receive compensation through the date of termination.

            (e) Payment Upon Other Involuntary Termination or Voluntary
Termination for Good Reason. If at any time during the term of this Agreement
the employment of the Executive is terminated involuntarily for any reason
without Cause, as heretofore defined, or voluntarily for Good Reason, as defined
below, then in such case:

                  (i)   Within five days after such termination, the Company
                        shall pay to the Executive (or to his personal
                        representative in case of death), in addition to all
                        accrued and unpaid compensation through the date of such
                        termination, a lump sum amount equal to base annual
                        salary as in effect as of the date of such termination
                        for a period equal to the longer of the remaining term
                        of this Agreement or 12 months.

                  (ii)  The Company shall maintain or cause to be maintained in
                        effect for the Executive for the period following such
                        termination provided in Section 8(e)(i), at the
                        Company's sole expense, all group insurance (including
                        life, health, accident and disability insurance) and all
                        other Executive benefit plans, programs or arrangements,
                        other than the Bank's qualified retirement plan, in
                        which the Executive was participating at any time during
                        the twelve (12) months preceding such termination.

                  (iii) The Executive shall be entitled to purchase at Bank's
                        book value any Bank-owned automobile then being used by
                        him.

                  (iv)  The Executive, without further action by the Executive,
                        the Company or the Bank, shall automatically become
                        fully vested in any outstanding options held by him to
                        acquire shares of the Company or any subsidiary of the
                        Company and in all benefits accrued on his behalf under
                        any other benefit programs of the Company or the Bank.

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<PAGE>

                  (v)   The Executive shall not be required to mitigate the
                        amount of any payment provided for in this Section 8(e)
                        by seeking employment or otherwise.

      In the event that the Executive's participation in any of the foregoing
plans, programs or arrangements (including those contemplated by Subsections
8(e)(ii) hereof) is barred by law or otherwise, or in the event that any such
plan, program or arrangement is discontinued or the benefits thereunder are
materially reduced during such period, the Company shall provide the Executive
with benefits substantially similar to those to which the Executive was entitled
immediately prior to the date of his termination of employment. Upon expiration
of the period of coverage provided hereunder, the Executive shall be provided
with the opportunity to have assigned to him at no cost and with no
apportionment of prepaid premiums any assignable insurance owned by the Company
or any of its subsidiaries and relating specifically to the Executive.

      For purposes of this Agreement, voluntary termination for "Good Reason"
shall occur when Executive resigns after delivery of a notice of termination to
the Board terminating Executive's employment under this Agreement at any time
not earlier than ninety (90) days after the date of such notice for any of the
following reasons:

            (i) Failure to elect or re-elect or appoint or re-appoint Executive
to the office of Chairman of the Company other than in connection with the death
or disability of Executive, or the expiration of the term of this Agreement.

            (ii) A material change in the Executive's function, duties or
responsibilities, which change would cause Executive's position with the Company
to become of less responsibility, importance or scope.

            (iii) The relocation of the office where the Bank requires Executive
to be based to a location more than forty (40) miles from its present
headquarters in Ipswich, Massachusetts, except for required travel on the
Company's business to an extent substantially consistent with his present
business travel obligations;

            (iv) Material breach of this Agreement by the Company, not cured
within 10 days of written notice thereof.

      The notice of termination referred to above shall be delivered by
Executive within a reasonable period following the occurrence of an event
described in clauses (i) through (iv) above, which period shall not exceed four
(4) calendar months after the event or at any time during the continuation of a
continuing breach. Executive's

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<PAGE>

continued employment shall not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting Good Reason hereunder.

      9. Notices. Notices under this Agreement shall be in writing and shall be
mailed by registered or certified mail, effective upon receipt, addressed as
follows:

            (a)  To the Company:       First Ipswich Bancorp
                                       31 Market Street
                                       Beverly, MA 01915
                                       Attn: President

            (b) To the Executive:      Neil St. John Raymond
                                       34 Heartbreak Road
                                       Ipswich, MA 01938

      Either party may by notice in writing change the address to which notices
to it or him are to be addressed hereunder.

      10. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in Boston,
Massachusetts, in accordance with the rules of the American Arbitration
Association then in effect. Notwithstanding the pendency of any such dispute or
controversy, the Company will pay the Executive promptly an amount equal to his
full compensation in effect when the notice giving rise to the dispute was given
(including, but not limited to, base salary) and shall provide or cause to be
provided to the Executive all compensation, benefits and insurance plans in
which he was participating when the notice giving rise to the dispute was given,
until the dispute is finally resolved. Amounts paid under this Section 10 are in
addition to all other amounts due under this Agreement and shall not be offset
against or reduce any other amounts due under this Agreement. Judgment may be
entered on the arbitrator's award in any court having jurisdiction; provided,
however, that the Executive shall be entitled to seek specific performance of
his right to be paid as specified in this Section 10.

      11. Miscellaneous.

            (a) Indemnification. During the period of his employment hereunder,
the Company agrees to indemnify the Executive in his capacity as a director and
officer of the Bank, the Company, and, each subsidiary of either, all to the
maximum extent permitted under the laws of the Commonwealth of Massachusetts and
applicable banking rules and regulations. The provisions of the Section 11(a)
shall survive expiration or termination of this Agreement for any reason
whatsoever.

            (b) Legal Fees. The Company shall pay to the Executive all
reasonable legal fees and expenses incurred by him in contesting or disputing
any

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<PAGE>

termination of this Agreement or in seeking to obtain or enforce any right or
benefit provided by this Agreement, provided that the final resolution of such
matter principally is in Executive's favor.

            (c) Entire Agreement. This Agreement constitutes the entire
Agreement between the parties and may not be changed except by a writing duly
executed and delivered by the Company and the Executive in the same manner as
the Agreement.

            (d) Governing Law. This Agreement is governed by and shall be
construed in accordance with the laws of the Commonwealth of Massachusetts.
Executive agrees that it supersedes in all respects any prior agreement between
the Company or the Bank and the Executive.

            (e) Binding Effect; Non-Assignability. This Agreement shall be
binding upon the Company and inure to the benefit of the Company and its
successors. Neither this Agreement or any rights arising hereunder may be
assigned or pledged by the Executive during his lifetime. This Agreement shall
inure to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

            (f) Severability. If any portion or provision of this Agreement
shall to any extent be unenforceable as a result of either a declaration by a
court of competent jurisdiction or the operation of applicable laws and
regulations, then the remainder of the Agreement, or the application of such
portion or provisions in circumstances other than those as to which it is
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.

      IN WITNESS WHEREOF, the parties hereto have executed the within instrument
as a sealed document as of the date first above written.

ATTEST                              FIRST IPSWICH BANCORP

                                    By
------------------------------         ------------------------------------
Its Clerk                              Its President

                                    ---------------------------------------
                                    Neil St. John Raymond

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<PAGE>

                                    EXHIBIT A
                                       to
                              Employment Agreement
                                     between
                              First Ipswich Bancorp
                                       and
                              Neil St. John Raymond

      1.

      2.

      3.

                                        9Exhibit 10.5

                              First Ipswich Bancorp
                                31 Market Street
                          Ipswich, Massachusetts 01938

                                                        __________________, 2004

Mr. Donald P. Gill
7 Beverly Commons, Apt. 3
Salem Building
Beverly, MA 01915

Dear Mr. Gill:

      First Ipswich Bancorp (the "Company") considers it essential to the best
interest of its stockholders to foster the continuous employment of key
management personnel of the Company and its subsidiary, The First National Bank
of Ipswich (the "Bank"). The Board of Directors of the Company (the "Board"),
recognizes that, as is the case with many publicly held corporations, the
possibility of a change in control of the Company may exist and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its stockholders.

      The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's and the Bank's management, including yourself, to their assigned
duties in the face of the potentially disturbing circumstances arising from the
possibility of a change in control of the Company. The continued performance of
your duties as an officer of the Bank may require your strenuous opposition to
such a threatened change in control of the Company which, in the judgment of the
Board, may not be in the best interests of the Company and its stockholders, and
your opposition to a threatened change of control could prevent or inhibit you
from effectively continuing your duties as an officer of the Bank should such a
change of control occur.

      In order to induce you to remain in the employ of the Company and the Bank
and in consideration of your agreement set forth in Subsection 2(c) hereof, this
Agreement sets forth the severance benefits which the Company agrees will be
provided to you in the event your employment with the Company and the Bank, or
either or both of them as applicable (the "Employer") is terminated under the
circumstances described below.
<PAGE>

      1. Term of Agreement. This Agreement shall commence on the date hereof and
shall continue in effect through March 31, 2007; provided, however, that
commencing on March 31, 2005 and each March 31 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless during
the 90-day period ending on the next previous March 31, the Company shall have
given notice that it does not wish to extend this Agreement. However, if a
Change in Control of the Company shall have occurred during the original or any
extended term of this Agreement, this Agreement shall continue in effect for a
period of thirty-six (36) months beyond the month in which such Change in
Control occurred. In addition, if a Potential Change in Control of the Company
shall have occurred during the original or any extended term of this Agreement,
this Agreement shall continue in effect for a period of twelve (12) months
beyond the month in which said Potential Change in Control occurred
notwithstanding notice from the Company that it does not wish to extend the
Agreement.

      2. Change in Control.

            (a) For purposes of this Agreement, a "Change in Control" of the
Company shall occur if the Raymond Family shall cease to own, in the aggregate,
at least 51% of the common stock of the Company or, if applicable, at least 51%
of the common stock of the surviving entity in any merger, consolidation or
reorganization to which the Company is a party, the entity to which all or
substantially all of the assets of the Bank or the Company are sold, or the
entity which assumes all or substantially all of the deposits of the Company.
The "Raymond Family" shall mean Neil St. John Raymond, his spouse, issue and
their spouses, and trusts of which any of the described persons is a
beneficiary, which shall include trusts or custodianship arrangements under
retirement plans, and custodian, nominee, agency or similar arrangements created
by or which benefit any of the described persons.

            (b) For purposes of this Agreement, a "Potential Change in Control"
of the Company shall have occurred if (i) the Company enters into an agreement,
the consummation of which would result in the occurrence of a Change in Control
of the Company, (ii) any person (including the Company) publicly announces an
intention to take or to consider taking actions which if consummated would
constitute a Change in Control of the Company; (iii) any person, other than a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or a corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company, and other than the Raymond Family, is or becomes the beneficial
owner, directly or indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company's then outstanding securities;
or (iv) the Board adopts a

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<PAGE>

resolution to the effect that, for purposes of this Agreement, a Potential
Change in Control of the Company has occurred.

      3. Termination Following a Change in Control or a Potential Change in
Control. If any of the events described in Subsection 2 hereof constituting a
Change in Control or a Potential Change in Control shall have occurred, you
shall be entitled to the benefits provided in Section 4 hereof upon the
termination of your employment by the Employer, or by you, within thirty-six
(36) months after a Change in Control, or within the 12 month period after a
Potential Change in Control, unless such termination is (a) because of your
death, (b) by the Employer for Cause or Disability (as hereafter defined), or
(c) by you other than for Good Reason. In the event the term of the Employment
Agreement would otherwise expire during such 36 or 12-month period, it shall be
extended to the end of such 36 or 12-month period. Your right to terminate your
employment pursuant to this Subsection shall not be affected by your incapacity
due to physical or mental illness. Your continued employment shall not
constitute consent to, or a waiver of rights with respect to, any circumstance
constituting Good Reason hereunder. "Disability" and "Cause" shall have the
meanings provided in the Employment Agreement between Executive and the Company
of even date, as the same may from time to time be amended, (the "Employment
Agreement") whether or not such agreement is in effect at the time of
application, and "Good Reason," "Notice of Termination" and "Date of
Termination" shall have the meanings set forth below:

            (i) Good Reason. For purposes of this Agreement, "Good Reason" shall
mean the occurrence after a Change in Control or Potential Change in Control of
the Company of any of the circumstances constituting "Good Reason" pursuant to
the Employment Agreement or any of the following circumstances without your
express written consent unless, in the case of paragraphs (a), (e), (f), (g) or
(h), such circumstances are fully corrected retroactive to the original
effective date of such circumstances prior to the Date of Termination specified
in the Notice of Termination, as defined in this section 3, given in respect
thereof:

            (a) the assignment to you of a title of less than President or the
assignment to you of any duties inconsistent (except in the nature of a
promotion) with the position in the Employer held immediately prior to the
Change in Control or Potential Change in Control, or a substantial adverse
alteration in the nature or status of your responsibilities from those in effect
immediately prior to the Change in Control or Potential Change in Control of the
Company;

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<PAGE>

            (b) a reduction by the Employer in your annual base salary as in
effect immediately prior to the Change in Control or Potential Change in Control
of the Company or as the same may be increased from time to time;

            (c) the relocation of the office where the Company requires you to
be based to a location more than forty (40) miles from its present headquarters
in Ipswich, Massachusetts, except for required travel on the Company's business
to an extent substantially consistent with your present business travel
obligations;

            (d) the failure by the Company, without your consent, to pay to you
any portion of your current compensation, within seven (7) days of the date such
compensation is due;

            (e) the failure by the Company to continue in effect any
compensation plan in which you participate immediately prior to the Change in
Control or Potential Change in Control of the Company, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan) has been
made with respect to such plan, or the failure by the Company to continue your
participation therein (or in such substitute or alternative plan) on a basis not
materially less favorable, both in terms of the amount of benefits provided and
the level of your participation relative to other participants, as existed at
the time of the Change in Control or Potential Change in Control;

            (f) the failure by the Company to continue to provide you with
benefits substantially similar to those enjoyed by you under any of the profit
sharing plans, life insurance, medical, health and accident, disability or other
employee benefit plans in which you were participating at the time of the Change
in Control or Potential Change in Control of the Company, the taking of any
action by the Company which would directly or indirectly reduce any of such
benefits or deprive you of any material fringe benefit enjoyed by you at the
time of the Change in Control or Potential Change in Control of the Company, or
the failure by the Company to provide you with the number of paid vacation days
to which you are entitled on the basis of years of service with the Company in
accordance with the Company's normal vacation policy in effect at the time of
the Change in Control or Potential Change in Control of the Company;

            (g) the failure of the Company to obtain a satisfactory agreement
from any successor to assume and agree to perform this Agreement, as
contemplated in Section 5 hereof; or

            (h) any purported termination of your employment which is not
effected pursuant to a Notice of Termination satisfying the requirements

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<PAGE>

specified below (and, if applicable, the requirements of the Employment
Agreement as to terminations for Cause); for purposes of this Agreement, no such
purported termination shall be effective.

            (ii) Notice of Termination. Any purported termination of your
employment by the Employer or by you shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 6 hereof. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision so
indicated.

            (iii) Date of Termination. "Date of Termination" shall mean (a) if
your employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that you shall not have returned to the
performance of your duties on a full-time basis during such thirty (30) day
period), (b) if your employment is terminated for Cause pursuant to the
Employment Agreement, the date specified in the Notice of Termination, and (c)
if your employment is terminated for Good Reason or for any other reason, the
date on which a Notice of Termination is given; provided that if within fifteen
(15) days after any Notice of Termination is given the party receiving such
Notice of Termination notifies the other party that a dispute exists concerning
the termination, the Date of Termination shall be the date on which the dispute
is finally determined, either by mutual written agreement of the parties, by a
binding and final arbitration award or by a final judgment, order or decree of a
court of competent jurisdiction (the time for appeal therefrom having expired
and no appeal having been perfected). Any such dispute shall extend periods for
termination following a Change in Control or a Potential Change in Control set
forth in the first sentence of this Section 3.

      4. Compensation Upon Termination or During Disability. Following a Change
in Control or a Potential Change in Control of the Company, upon termination of
your employment you shall be entitled to the following benefits:

            (a) During any period that you fail to perform your duties as an
employee as a result of incapacity due to physical or mental illness, you shall
continue to receive your full base salary until your employment is terminated in
accordance with the Employment Agreement, and you shall thereupon be compensated
as provided in the Employment Agreement.

            (b) If your employment is terminated for Cause, your compensation
shall be as provided in the Employment Agreement.

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<PAGE>

            (c) If your employment shall be terminated (i) by the Employer other
than for death, Cause or Disability, or (ii) by you for Good Reason, then the
Company shall pay you, in lieu of any further salary or bonus payments to you
for periods subsequent to the Date of Termination, the following:

                  (i) a lump sum severance payment (the "Severance Payment")
equal to the product of (i) your Average Annual Base Compensation multiplied by
(ii) the number three, less one dollar. For purposes of this Agreement, Average
Annual Base Compensation shall be the average of the total annual compensation
paid or deemed paid for Federal income tax purposes to you by the Company and
including such other adjustments as may be required or allowed by the
Regulations promulgated under Section 280G of the Internal Revenue Code of 1986,
as amended (the "Code"), for the five years preceding a Change in Control or for
such fewer number of years as you have been employed by the Company.
Notwithstanding the foregoing, if any payment or benefit received or to be
received by you in connection with a Change in Control of the Company or the
termination of your employment (whether pursuant to the terms of this Agreement
or any other plan, arrangement or agreement with the Company or the Bank, any
person whose actions result in a Change in Control or any person affiliated with
the Company, the Bank or such person) (collectively, "Total Payments"), would
not be deductible (in whole or part) under Section 280G of the Code by the
Company, the Bank, an affiliate or other person making such payment or providing
such benefit, the Severance Payment shall be reduced until no portion of the
Total Payments is not deductible, or the Severance Payment is reduced to zero,
and in the event that notwithstanding reduction of the Severance Payment to zero
payments or benefits other than the Severance Payment would not be deductible
under Section 280G (as aforesaid), then such other payments or benefits will
likewise be reduced until no portion of the Total Payments is not deductible.
For purposes of this limitation (A) no portion of the Total Payments the receipt
or enjoyment of which you shall have effectively waived in writing prior to the
date of payment of the Severance Payment shall be taken into account, (B) no
portion of the Total Payments shall be taken into account which in the opinion
of tax counsel selected by the Company's independent auditors and acceptable to
you does not constitute a "parachute payment" within the meaning of Section
280G(b)(2) of the Code, (c) the Severance Payment shall be reduced only to the
extent necessary so that the Total Payments (other than those referred to in
clauses (A) or (B)) in their entirety constitute reasonable compensation for
services actually rendered within the meaning of Section 280G(b)(4) of the Code
or are otherwise not subject to disallowance as deductions, in the opinion of
the tax counsel referred to in clause (A), and (D) the value of any non-cash
benefit or any deferred payment or benefit included in the Total Payments shall
be determined by the Company's

                                       6
<PAGE>

independent auditors in accordance with the principles of Sections 280G(d)(3)
and (4) of the Code.

                  (ii) The Company shall also pay you all legal fees and
expenses incurred by you as a result of such termination (including all such
fees and expenses, if any, incurred in contesting or disputing any such
termination or in seeking to obtain or enforce any right or benefit provided by
this Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of Section 4999 of the Code to any payment or
benefit provided hereunder) except to the extent that the payment of such fees
and expenses would not be, or would cause any other portion of the Total
Payments not to be, deductible by reason of Section 280G of the Code. Such
payments shall be made at the later of the times specified in paragraph (iii)
below, or within five (5) days after your request for payment accompanied with
such evidence of fees and expenses incurred as the Company reasonably may
require.

                  (iii) The payments provided for in paragraph 4(c)(i) shall be
made not later than the fifth day following the Date of Termination; provided,
however, that if the amounts of such payments, and the limitation on such
payments set forth in paragraph 4(c)(i), cannot be finally determined on or
before such day, the Company shall pay to you on such day an estimate, as
determined in good faith by the Company, of the minimum amount of such payments
and shall pay the remainder of such payments (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined but in no event later than the thirtieth day after the Date of
Termination. In the event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess shall constitute a
loan by the Company to you, payable on the fifth day after demand by the Company
(together with interest at the rate provided in Section 1274(b)(2)(B) of the
Code). Any payments provided for under this Agreement shall be paid net of any
applicable withholding required under federal, state or local law.

                  (iv) Unless you are terminated for Cause or you terminate your
employment other than for Good Reason, the Company shall cause the Bank to
maintain in full force and effect, for your continued benefit for a period of
three years, all employee welfare benefit plans and programs or arrangements in
which you are entitled to participate immediately prior to the Notice of
Termination, provided that your continued participation is possible under the
general terms and provisions of such plans and programs. In the event the Bank
does not maintain such plans for your benefit or your participation in any such
plan or program is barred, the Company shall arrange to provide you with
benefits substantially similar to those which you would otherwise be entitled to

                                        7
<PAGE>

receive under such plans. Benefits otherwise receivable by you pursuant to this
Subsection 4(c)(iv) shall be reduced to the extent comparable benefits are
actually received by you from sources other than the Company or the Bank during
the three-year period following your termination, and any such benefits actually
received by you shall be reported to the Company. If the benefits provided to
you under this subsection shall result in a decrease, pursuant to Subsection
4(ii) in the Severance Payment and such benefits are thereafter reduced pursuant
to the immediately preceding sentence, the Company shall, at the time of such
reduction, pay to you the lesser of (x) the amount of such decrease in the
Severance Payment or (y) the maximum amount which can be paid to you without
being, or causing any other payment to be, nondeductible by reason of Section
280G of the Code.

            (d) You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise, nor
shall the amount of any payment provided for in this Section 4 be reduced by any
compensation earned by you as the result of employment by another employer after
the Date of Termination, or otherwise except as specifically provided in this
Section 4.

      5. Successors; Binding Agreement.

            (a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to you, to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle you to
compensation from the Company in the same amount and on the same terms as you
would be entitled hereunder if you terminated your employment for Good Reason,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination. As
used in this Agreement, "Company" shall mean the Company as hereinbefore defined
and any successor to its business, and/or assets, as aforesaid which executes
and delivers the agreement provided for in this Section 5 or which otherwise
become bound by all the terms and provisions of this Agreement by operation of
law.

            (b) This Agreement shall inure to the benefit of and be enforceable
by your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should die while
any

                                        8
<PAGE>

amount would still be payable to you hereunder if you had continued to live, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to your devisee, legatee or other designee or, if
there be no such designee, to your estate.

      6. Notices. All notices and all other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by United States registered mail, return receipt requested,
postage prepaid, addressed to the respective addresses set forth on the first
page of this Agreement, provided that all notices to the Company shall be
directed to the attention of the Board with a copy to the Clerk of the Company,
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notice of change of address shall be
effective only upon receipt.

      7. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing signed by you and such officers as may be specifically designated by the
Board. No waiver by either party hereto at any time of any breach by the other
party hereto, or of failure to comply with any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The obligations of
the Company under Section 4 shall survive the expiration of the term of this
Agreement. All reference to sections of any statute, including the Code, shall
be deemed also to refer to any successor provisions thereof. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the Commonwealth of Massachusetts. This Agreement is made under
seal.

      8. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

      9. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

      10. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in Boston,
Massachusetts in accordance with the rules of American Arbitration

                                        9
<PAGE>

Association then in effect. Notwithstanding the pendency of any such dispute or
controversy, the Company will cause the Bank to continue to pay, or will itself
pay, your full compensation in effect when the notice giving rise to the dispute
was given (including, but not limited to, base salary) and continue you as a
participant in all compensation, benefit and insurance plans in which you were
participating when the notice giving rise to the dispute was given, until the
dispute is finally resolved in accordance with Section 3(F) hereof. Amounts paid
under this Section 10 are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement except to the extent otherwise provided in Subsection 4(a)(ii).
Judgment may be entered on the arbitrator's award in any court having
jurisdiction; provided, however, that you shall be entitled to seek specific
performance of your right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement.

      11. Election of Benefits. An election by you to resign after a Change of
Control under the provisions of this Agreement will not constitute a breach by
you of the Employment Agreement, and you will not be deemed to have voluntarily
terminated your employment for purposes of interpreting the provisions of any
benefit plans, programs or policies. Nothing in this Agreement will be construed
to limit your rights under the Employment Agreement or any other agreement
governing your employment with the Company or the Bank, provided, however, that
if there is a termination under Section 3 hereof, you may elect either to
receive the severance payment provided under Section 4 hereof or such
termination monetary payments as you may have under any such employment
agreement, but may not elect to receive both. Election to receive the severance
payment provided in this agreement will not impair any right you may have to
continuation of insurance and other fringe benefits to the extent provided in
any employment agreement.

      If this letter correctly sets forth our agreement on the subject matter
hereof, kindly sign and return to the Company the enclosed copy of this letter
which will then constitute our agreement on this subject.

                              FIRST IPSWICH BANCORP

                              By:
                                 ----------------------------------------
                                 Its

Agreed:

----------------------------
Donald P. Gill

                                       10

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