Document:

BERKSHIRE HILLS BANCORP, INC.
                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT  AGREEMENT  ("Agreement")  is made effective as of June
27, 2000 (the "Effective  Time"), by and between  Berkshire Hills Bancorp,  Inc.
(the "Holding  Company"),  a corporation  organized  under the laws of Delaware,
with its principal offices at 24 North Street, Pittsfield, Massachusetts, 01202,
and Robert A. Wells ("Executive"). Any reference to the "Bank" herein shall mean
Berkshire Bank or any successor to Berkshire Bank.

         WHEREAS, the Holding Company believes that the assurance of Executive's
employment by the Holding Company for the term of this Agreement and the benefit
of his business experience are of material importance; and

         WHEREAS,  Executive  desires  to serve  in the  employ  of the  Holding
Company on a full-time basis for the term of this Agreement.

         NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  herein
contained,  and upon the other terms and conditions  hereinafter  provided,  the
parties to this Agreement hereby agree as follows:

1.       POSITIONS AND RESPONSIBILITIES

(a) During the term of this Agreement  Executive  agrees to serve as Chairman of
the Board of the Holding  Company.  Executive  shall render  administrative  and
management services to the Holding Company such as are customarily  performed by
persons in a similar  executive  capacity.  During  the term of this  Agreement,
Executive  also agrees to serve,  if elected or appointed,  as an officer and/or
director of any  subsidiary  of the Holding  Company and in such  capacity  will
carry  out such  duties  and  responsibilities  reasonably  appropriate  to that
office.

(b) During the term of Executive's  employment under this Agreement,  except for
periods of absence occasioned by illness,  vacation, and other reasonable leaves
of  absence,  Executive  shall  devote  substantially  all  his  business  time,
attention,  skill,  and efforts to the faithful  performance of his duties under
this Agreement,  including  activities and services related to the organization,
operation and management of the Holding Company and its subsidiaries, as well as
participation  in community,  professional  and civic  organizations;  provided,
however,  that,  with the  approval  of the Board of  Directors  of the  Holding
Company (the "Board of Directors"), as evidenced by a resolution of the Board of
Directors,  from time to time, Executive may serve, or continue to serve, on the
boards of directors of, and hold any other offices or positions in, companies or
organizations,  which,  in the  judgment  of the  Board of  Directors,  will not
present any conflict of interest with the Holding  Company or its  subsidiaries,
or materially  affect the  performance  of Executive's  duties  pursuant to this
Agreement.

(c) Notwithstanding anything herein contained to the contrary,  either Executive
or the Holding

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Company may terminate  Executive's  employment  with the Holding  Company at any
time during the term of this  Agreement,  subject to the terms and conditions of
this Agreement.

2.       TERM OF EMPLOYMENT

Executive's employment under this Agreement shall be deemed to have commenced as
of the Effective  Time and shall  continue for a period of thirty-six  (36) full
calendar months from the Effective Time.  Commencing on the date of execution of
this  Agreement,  the term of this  Agreement  shall extend for one day each day
until such time as the Board of Directors or Executive  elects not to extend the
term of the Agreement by giving written notice to the other party, in which case
the term of this  Agreement  shall  become  fixed  and  shall  end on the  third
anniversary of the date of such written notice.

3.       COMPENSATION, BENEFITS AND REIMBURSEMENT

(a) Base Salary. The Holding Company shall pay Executive an annual salary of not
less than $250,000 ("Base Salary").  Executive's Base Salary shall be payable in
accordance with the normal payroll  practices of the Holding  Company.  Whenever
used in this  Agreement,  Base Salary shall include any amounts of  compensation
deferred by Executive under any tax-qualified retirement or welfare benefit plan
or any other deferred compensation arrangement maintained by the Holding Company
or the Bank.  During the term of this  Agreement,  the Board of  Directors  or a
committee  appointed by the Board of Directors  shall  review  Executive's  Base
Salary  at least  annually  and the  Board of  Directors  or the  committee  may
increase  Executive's  Base Salary at any time. Any increase in Executive's Base
Salary shall become a term of this  Agreement and shall be the new "Base Salary"
for purposes of this Agreement.

(b) Incentive Compensation.  In addition to his Base Salary,  Executive shall be
entitled  to  participate  in and shall  receive  payments  under any  incentive
compensation  bonus  program  sponsored  by the  Holding  Company  or the  Bank.
Executive's incentive compensation shall be determined by the Board of Directors
or a committee  appointed by the Board of Directors at a level  appropriate  for
executive officers.

(c)  Supplemental  Pension and Life  Insurance.  The Holding Company or the Bank
shall continue to provide to Executive,  without cost, the supplemental  pension
and life insurance arrangements in place at the Effective Time. The supplemental
pension and life  insurance  arrangements  shall be governed by the terms of the
specific agreements in effect at the Effective Time.

(d) Club Dues.  In addition to any other  compensation  provided  for under this
Agreement,  the  Holding  Company  or the Bank  shall  pay  Executive  an amount
sufficient, on an after-tax basis, to maintain his membership at the Lenox Club.

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(e) Automobile and Cellular Phone. The Holding Company or the Bank shall provide
Executive with, and Executive shall have the primary use of, an automobile owned
or leased by the Holding Company or the Bank and the Holding Company or the Bank
shall pay (or reimburse Executive) for all expenses of insurance,  registration,
operation  and  maintenance  of the  automobile.  Executive  shall  comply  with
reasonable  reporting and expense limitations on the use of such automobile,  as
the Board of Directors may establish from time to time, and the Holding  Company
or  the  Bank  shall  annually  include  on  Executive's  Form  W-2  any  amount
attributable to Executive's personal use of such automobile. The Holding Company
or the Bank shall also provide Executive with a cellular phone and shall pay (or
reimburse  Executive) for all reasonable expenses related to the business use of
such phone.

(f) Vacation;  Holidays;  Sick Time.  Executive shall be entitled to vacation in
accordance  with the standard  vacation  policies of the Holding  Company or the
Bank for  senior  executive  officers,  but in no event less than four (4) weeks
vacation during each year of employment. Executive shall take vacation at a time
mutually agreed upon by the Holding Company or the Bank and Executive. Executive
shall  receive his Base Salary and other  benefits  during  periods of vacation.
Executive  shall also be entitled to paid legal holidays in accordance  with the
policies of the Holding Company or the Bank. Executive shall also be entitled to
sick leave in  accordance  with the policies of the Holding  Company or the Bank
for senior executive  officers,  but in no event less than the number of days of
sick leave per year to which Executive was entitled at the Effective Time.

(g) Other Employee  Benefits.  In addition to any other compensation or benefits
provided for under this  Agreement,  Executive  shall be entitled to continue to
participate in any employee  benefit plans,  arrangements and perquisites of the
Holding  Company  or the  Bank  in  which  he  participates  or is  eligible  to
participate  at  the  Effective  Time.  Executive  shall  also  be  entitled  to
participate in any employee  benefits or perquisites  the Holding Company or the
Bank offers to full-time  employees or executive  management in the future.  The
Holding Company or the Bank will not, without Executive's prior written consent,
make  any  changes  in such  plans,  arrangements  or  perquisites  which  would
adversely affect  Executive's  rights or benefits  thereunder without separately
providing for an arrangement that ensures Executive receives or will receive the
economic value that Executive  would  otherwise lose as a result of such adverse
effect.  Without  limiting the  generality of the  foregoing  provisions of this
paragraph,  Executive  shall be entitled to participate  in or receive  benefits
under all plans  relating  to stock  options,  restricted  stock  awards,  stock
purchases,  pension,  profit  sharing,  employee stock  ownership,  supplemental
retirement,  group life insurance, medical and other health and welfare coverage
that are made available by the Holding Company or the Bank at the Effective Time
or at any time in the future during the term of this  Agreement,  subject to and
on a basis consistent with the terms,  conditions and overall  administration of
such plans and  arrangements.  Nothing paid to Executive under any such plans or
arrangements  will be  deemed  to be in  lieu of  other  compensation  to  which
Executive is entitled under this Agreement.

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4.       PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION

(a) Upon the  occurrence of an Event of  Termination  (as defined  herein below)
during  Executive's term of employment  under this Agreement,  the provisions of
this Section 4 shall apply. As used in this Agreement, an "Event of Termination"
shall mean and include any one or more of the following:  (i) the termination of
Executive's full-time employment under this Agreement by the Holding Company for
any reason other than a termination governed by Section 7 of this Agreement;  or
(ii) Executive's  resignation from his employment with the Holding Company upon,
any (A) failure to elect or re-elect or to appoint or  re-appoint  Executive  to
his  positions  set  forth in  Section  1 of this  Agreement,  unless  Executive
consents to such event, (B) material change in Executive's functions, duties, or
responsibilities  with the Holding  Company or its  subsidiaries,  which  change
would  cause  Executive's  position(s)  to become one of lesser  responsibility,
importance, or scope, unless Executive consents to such event, (C) relocation of
Executive's  principal place of employment by more than  twenty-five  (25) miles
from its  location at the  Effective  Time,  unless  Executive  consents to such
event,  (D)  material  reduction in the  benefits  and  perquisites  provided to
Executive from those being provided as of the Effective Time of this  Agreement,
unless  Executive  consents to such event, (E) liquidation or dissolution of the
Holding  Company or the Bank,  or (F) breach of this  Agreement  by the  Holding
Company.  Upon the  occurrence of any event  described in clauses (A), (B), (C),
(D),  (E) or (F),  above,  Executive  shall  have  the  right to  terminate  his
employment  under this  Agreement by  resignation  upon not less than sixty (60)
days prior written  notice given within six (6) full  calendar  months after the
applicable  event giving rise to  Executive's  right to elect to  terminate  his
employment.

(b) Upon  Executive's  termination  from employment in accordance with paragraph
(a) of this  Section 4, on the Date of  Termination,  as defined in Section 8 of
the Agreement,  the Holding Company shall be obligated to pay Executive,  or, in
the event of his death  following the Date of  Termination,  his  beneficiary or
beneficiaries, or his estate, as the case may be, an amount equal to the sum of:
(i) the Base  Salary  and  incentive  compensation  that would have been paid to
Executive for the remaining  term of this Agreement had the Event of Termination
not occurred  (based on  Executive's  then current Base Salary and most recently
paid or accrued  bonus at the time of the Event of  Termination);  plus (ii) the
value, as calculated by a recognized firm customarily performing such valuation,
of any stock options which as of the Date of  Termination,  have been granted to
Executive but are not  exercisable  by Executive and the value of any restricted
stock awards which have been granted to Executive,  but in which  Executive does
not  have  a  non-forfeitable  or  fully-  vested  interest  as of the  Date  of
Termination;  plus (iii) the value of all employee benefits that would have been
provided to Executive for the remaining  term of this  Agreement had an Event of
Termination  not  occurred,  based on the  most  recent  level of  contribution,
accrual or other participation by or on behalf of Executive.  At the election of
Executive,  which election is to be made prior to the Date of Termination,  such
payments  shall be made in a lump sum.  In the event that no  election  is made,
payment to  Executive  will be made on a monthly  basis in  approximately  equal
installments during the remaining unexpired term of the Agreement. Such payments
shall not be reduced in the event Executive  obtains other employment  following
termination of employment.

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(c) In addition to the payments provided for in paragraph (b) of this Section 4,
upon Executive's  termination of employment in accordance with the provisions of
paragraph  (a) of this Section 4, to the extent that the Holding  Company or the
Bank  continues  to offer  any  life,  medical,  health,  disability  or  dental
insurance plan or arrangement in which Executive participates in on the last day
of his  employment  (each  being a "Welfare  Plan"),  Executive  and his covered
dependents shall continue  participating  in such Welfare Plans,  subject to the
same premium contributions on the part of Executive as were required immediately
prior to the Event of  Termination  until the  earlier of (i) his death (ii) his
employment by another  employer other than one of which he is the majority owner
or (iii) the end of the remaining term of this Agreement. If the Holding Company
or Bank  does  not  offer  the  Welfare  Plans at any time  after  the  Event of
Termination,  then the Holding  Company shall provide  Executive  with a payment
equal to the  premiums  for such  benefits  for the period  which runs until the
earlier of (i) his death (ii) his employment by another  employer other than one
of which he is the majority owner or (iii) the end of the remaining term of this
Agreement.

5.       CHANGE IN CONTROL

(a) For purposes of this Agreement, a "Change in Control" shall mean an event of
a nature that:  (i) would be required to be reported in response to Item 1(a) of
the  current  report on Form 8-K, as in effect on the date  hereof,  pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act");
or (ii) results in a Change in Control of the Bank or the Holding Company within
the  meaning  of the Bank  Change in Control  Act and the Rules and  Regulations
promulgated by the Federal Deposit Insurance  Corporation  ("FDIC") at 12 C.F.R.
ss.  303.4(a) with respect to the Bank and the Board of Governors of the Federal
Reserve  System ("FRB") at 12 C.F.R.  ss.  225.41(b) with respect to the Holding
Company,  as in effect on the date  hereof;  or (iii)  results in a  transaction
requiring  prior FRB approval under the Bank Holding Company Act of 1956 and the
regulations  promulgated  thereunder by the FRB at 12 C.F.R.  ss. 225.11,  as in
effect on the date hereof except for the Holding  Company's  acquisition  of the
Bank;  or (iv) without  limitation  such a Change in Control  shall be deemed to
have  occurred at such time as (A) any "person" (as the term is used in Sections
13(d) and 14(d) of the Exchange  Act) is or becomes the  "beneficial  owner" (as
defined in Rule 13d-3  under the  Exchange  Act),  directly  or  indirectly,  of
securities of the Bank or the Holding  Company  representing  20% or more of the
Bank's or the Holding Company's outstanding securities except for any securities
of the Bank purchased by the Holding  Company in connection  with the conversion
of the Bank to the stock form and any securities  purchased by any tax-qualified
employee  benefit plan of the Bank; or (B)  individuals who constitute the Board
of Directors on the date hereof (the "Incumbent  Board") cease for any reason to
constitute  at least a majority  thereof,  provided  that any person  becoming a
director  subsequent to the date hereof whose election was approved by a vote of
at least  three-quarters  (3/4) of the directors comprising the Incumbent Board,
or whose  nomination  for  election by the Holding  Company's  stockholders  was
approved by the same  Nominating  Committee  serving  under an Incumbent  Board,
shall be, for purposes of this clause (B), considered as though he were a member
of the Incumbent Board; or (C) a plan of reorganization,  merger, consolidation,
sale of all or  substantially  all the assets of the Bank or the Holding Company
or similar  transaction  occurs in which the Bank or Holding  Company is not the
resulting  entity;  or (D) solicitations of shareholders of the Holding Company,
by someone other than the current

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management of the Holding  Company,  seeking  stockholder  approval of a plan of
reorganization,  merger  or  consolidation  of the  Holding  Company  or Bank or
similar  transaction  with one or more  corporations  as a result  of which  the
outstanding  shares  of the  class of  securities  then  subject  to the plan or
transaction  are exchanged for or converted  into cash or property or securities
not issued by the Bank or the Holding  Company  shall be  distributed;  or (E) a
tender offer is made for 20% or more of the voting securities of the Bank or the
Holding Company.

(b)  If any of the  events  described  in  paragraph  (a)  of  this  Section  5,
constituting  a Change in  Control,  have  occurred  or the  Board of  Directors
determines that a Change in Control has occurred, Executive shall be entitled to
the benefits provided in paragraphs (c), (d), (e), (f) and (g) of this Section 5
upon his termination of employment at any time during the term of this Agreement
on or  after  the date the  Change  in  Control  occurs  due to (1)  Executive's
dismissal or (2) Executive's  resignation following any demotion, loss of title,
office  or  significant   authority  or  responsibility,   reduction  in  annual
compensation  or benefits or relocation of his principal  place of employment by
more than  twenty-five  (25) miles from its  location  immediately  prior to the
Change  in  Control,  unless  such  termination  is  because  of  his  death  or
Termination for Cause; provided, however, that such payments shall be reduced by
any payment made under Section 4 of this Agreement.

(c)  Upon  the  occurrence  of a  Change  in  Control  followed  by  Executive's
termination of  employment,  as provided in paragraph (b) of this Section 5, the
Holding  Company shall pay Executive,  or in the event of his subsequent  death,
his  beneficiary  or  beneficiaries,  or his  estate,  as the  case  may be,  as
severance pay or liquidated  damages, or both, a sum equal to the greater of: 1)
the  payments and benefits  due for the  remaining  term of the  Agreement or 2)
three  (3)  times  Executive's  average  annual  compensation  from the  Holding
Company,  the Bank or their affiliates for the five (5) preceding  taxable years
or such lesser number of years in the event that  Executive  shall have actually
been  employed by the Holding  Company or the Bank for less than five (5) years.
In determining  Executive's  average annual  compensation,  annual  compensation
shall  include  Base  Salary and any other  taxable  income,  including  but not
limited to amounts  related to the  granting,  vesting or exercise of restricted
stock or stock option awards, commissions,  bonuses (whether paid or accrued for
the applicable  period), as well as, severance  payments,  retirement  benefits,
director or committee  fees and fringe  benefits paid or to be paid to Executive
or paid for Executive's  benefit during any such year, profit sharing,  employee
stock ownership plan and other retirement  contributions or benefits,  including
to any  tax-qualified  plan or  arrangement  (whether  or not  taxable)  made or
accrued on behalf of Executive of such year. At the election of Executive, which
election  is to be made  prior  to or  within  thirty  (30)  days of the Date of
Termination  on or following a Change in Control,  such payment may be made in a
lump sum (without  discount for early payment) on or  immediately  following the
Date of Termination  (which may be the date a Change in Control  occurs) or paid
in equal monthly installments during the sixty (60) months following Executive's
termination. In the event that no election is made, payment to Executive will be
made on a monthly  basis  during the sixty  (60)  months  following  Executive's
termination.

(d) Upon the  occurrence of a Change in Control,  Executive  will be entitled to
receive benefits due him under or contributed by the Bank or the Holding Company
on his behalf pursuant to any

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retirement,  incentive, profit sharing or other retirement,  bonus, performance,
disability or other employee  benefit plan  maintained by the Holding Company or
the Bank on  Executive's  behalf to the extent such  benefits are not  otherwise
paid to Executive under a separate provision of this Agreement. In addition, for
purposes of determining his vested accrued benefit,  Executive shall be credited
either under any defined  benefit pension plan maintained by the Bank or, if not
permitted  under such plan,  under a separate  arrangement,  with the additional
"years of service"  that he would have  earned for  vesting and benefit  accrual
purposes  for  the  remaining  term of the  Agreement  had  his  employment  not
terminated.

(e) Upon the  occurrence of a Change in Control and  Executive's  termination of
employment  in  connection  therewith,  the  Holding  Company  will  cause to be
continued life, medical and disability coverage  substantially  identical to the
coverage  maintained by the Holding Company or the Bank for Executive and any of
his  dependents  covered  under such plans prior to the Change in Control.  Such
coverage and payments  shall cease upon the  expiration of thirty-six  (36) full
calendar  months  following the Date of  Termination.  In the event  Executive's
participation  in any such plan or program is barred,  the Holding Company shall
arrange to provide  Executive and his  dependents  with  benefits  substantially
similar to those of which Executive and his dependents would otherwise have been
entitled to receive  under such plans and  programs  from which their  continued
participation is barred or provide their economic equivalent.

(f) The use or provision of any  membership,  license,  automobile use, or other
perquisites shall be continued during the remaining term of the Agreement on the
same financial terms and obligations as were in place  immediately  prior to the
Change in  Control.  To the extent that any item  referred to in this  paragraph
will,  at the end of the term of this  Agreement,  no  longer  be  available  to
Executive,  Executive  will have the option to purchase  all rights then held by
the Holding  Company or the Bank to such item for a price equal to the then fair
market value of the item.

(g) In the event that  Executive  is  receiving  monthly  payments  pursuant  to
Section  5(c)  hereof,  on an annual  basis,  thereafter,  between  the dates of
January 1 and January 31 of each year, Executive shall elect whether the balance
of the amount  payable  under the Agreement at that time shall be paid in a lump
sum or on a pro rata basis  pursuant to such  section.  Such  election  shall be
irrevocable for the year for which such election is made.

6.       CHANGE IN CONTROL RELATED PROVISIONS

(a) Notwithstanding the preceding provisions of Section 5 of this Agreement, for
any taxable year in which Executive shall be liable for the payment of an excise
tax under Section 4999 of the Code (or any successor  provision  thereto),  with
respect to any  payment in the nature of the  compensation  made by the  Holding
Company or its  subsidiaries  to (or for the benefit of)  Executive  pursuant to
this  Agreement or otherwise,  the Holding  Company (or any  successor  thereto)
shall pay to Executive an amount determined under the following formula:

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         An amount equal to:  (E x P) + X

WHERE:

         X    =                                  E x P
                           -----------------------------------------
                           1 - [(FI x (1 - SLI)) + SLI + E + M + PO]

         E    =            the rate  at which the  excise  tax is assessed under
                           Section 4999 of the Code;

         P    =            the amount with  respect to which  such excise tax is
                           assessed, determined  without regard to  this Section
                           6;

        FI   =            the   highest   marginal  rate  of   federal  income,
                           employment, and other taxes (other than taxes imposed
                           under  Section  4999  of  the  Code)   applicable  to
                           Executive for the taxable year in question (including
                           any  effective   increase  in  Executive's  tax  rate
                           attributable to the disallowance of any deduction);

         SLI  =            the sum of  the highest  marginal rates of income and
                           payroll tax applicable to Executive under  applicable
                           state and local laws for the taxable year in question
                           (including any effective  increase in Executive's tax
                           rate   attributable   to  the   disallowance  of  any
                           deduction);

         M    =            highest marginal rate of Medicare tax; and

         PO   =            adjustment  for phase out of  or loss  of  deduction,
                           personal exemption or other similar items.

With  respect to any payment in the nature of  compensation  that is made to (or
for the benefit of) Executive under the terms of this Agreement or otherwise and
on which an excise tax under  Section  4999 of the Code may or will be assessed,
the payment  determined  under this  Section 6 shall be made to Executive on the
earliest of (i) the date the Holding  Company is required to withhold  such tax,
(ii) the date the tax is required to be paid by Executive,  or (iii) at the time
of the Change in Control.  It is the  intention  of the parties that the Holding
Company provide  Executive with a full tax gross-up under the provisions of this
Section 6, so that on a net after-tax  basis,  the result to Executive  shall be
the same as if the excise tax under Section 4999 (or any  successor  provisions)
of the Code had not been imposed.  The payment may be adjusted,  as appropriate,
if alternative minimum tax rules under the Code are applicable to Executive.

(b)  Notwithstanding  the  foregoing,  if it is (i) initially  determined by the
Holding Company's tax advisors that no excise tax under Section 4999 is due with
respect to any payment or benefit  described  in the first  paragraph of Section
6(a) and,  thereafter,  it is determined in a final judicial  determination or a
final  administrative  settlement  that the Section  4999 excise tax is due with
respect to such payments or benefits or (ii) subsequently  determined in a final
judicial determination or a

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final  administrative  settlement to which  Executive is a party that the excise
tax under Section 4999 is due or that the excess parachute payment as defined in
Section 4999 of the Code is more than the amount  determined as "P", above (such
revised  determination  under (i) or (ii) above being thereafter  referred to as
the  "Determinative  Excess  Parachute  Payment"),  then the tax advisors of the
Holding  Company (or any  successor  thereto)  shall  determine  the amount (the
"Adjustment  Amount"),  the  Holding  Company  (or its  successor)  must  pay to
Executive,  in order to put  Executive in the same  position as Executive  would
have  been  if the  amount  determined  as  "P"  above  had  been  equal  to the
Determinative  Excess Parachute  Payment.  In determining the Adjustment Amount,
the tax  advisors  shall  take into  account  any and all taxes  (including  any
penalties of any nature and interest) paid or payable by Executive in connection
with such final judicial  determination or final administrative  settlement.  As
soon as  practicable  after the Adjustment  Amount has been so  determined,  the
Holding Company shall pay the Adjustment Amount to Executive.

(c) The Holding  Company (or its successor)  shall  indemnify and hold Executive
harmless  from  any  and all  losses,  costs  and  expenses  (including  without
limitation,  reasonable attorney's fees, reasonable accountant's fees, interest,
fines and  penalties  of any  kind)  which  Executive  incurs as a result of any
administrative or judicial review of Executive's liability under Section 4999 of
the Code by the Internal  Revenue Service or any comparable state agency through
and including a final judicial determination or final administrative  settlement
of any dispute arising out of Executive's  liability for the Section 4999 excise
tax or otherwise  relating to the classification for purposes of Section 280G of
the Code of any  payment  or  benefit  in the  nature  of  compensation  made or
provided to Executive by the Holding Company or any successor thereto. Executive
shall promptly notify the Holding Company in writing whenever Executive receives
notice of the commencement of any judicial or administrative proceeding,  formal
or informal,  in which the federal tax treatment  under Section 4999 of the Code
of any  amount  paid or  payable  under  this  Supplemental  Agreement  is being
reviewed  or is in  dispute  (including  a notice  of  audit  or  other  inquiry
concerning  the reporting of  Executive's  liability  under Section  4999).  The
Holding  Company (or its  successor)  may assume control at its expense over all
legal and accounting  matters  pertaining to such federal or state tax treatment
(except to the extent necessary or appropriate for Executive to resolve any such
proceeding  with  respect to any  matter  unrelated  to amounts  paid or payable
pursuant to this contract) and Executive  shall cooperate fully with the Holding
Company in any such proceeding. Executive shall not enter into any compromise or
settlement  or  otherwise  prejudice  any rights  the  Holding  Company  (or its
successor) may have in connection therewith without prior consent to the Holding
Company  (or its  successor).  In the event  that the  Holding  Company  (or any
successor  thereto) elects not to assume control over such matters,  the Holding
Company (or any successor  thereto) shall promptly  reimburse  Executive for all
expenses  related thereto as and when incurred upon  presentation of appropriate
documentation relating thereto.

                                      - 9 -

<PAGE>

7.       TERMINATION FOR CAUSE

         The term  "Termination  for Cause"  shall mean  termination  because of
Executive's  personal  dishonesty,  willful misconduct,  any breach of fiduciary
duty involving  personal profit,  intentional  failure to perform stated duties,
willful violation of any law, rule, regulation (other than traffic violations or
similar  offenses),  final  cease and  desist  order or  material  breach of any
provision of this Agreement.  Notwithstanding the foregoing, Executive shall not
be deemed to have been  terminated  for cause  unless and until there shall have
been  delivered to him a Notice of  Termination  which shall include a copy of a
resolution duly adopted by the affirmative  vote of not less than  three-fourths
(3/4) of the  members  of the Board of  Directors  at a meeting  of the Board of
Directors called and held for that purpose (after reasonable notice to Executive
and an opportunity for him, together with counsel,  to be heard before the Board
of Directors), finding that in the good faith opinion of the Board of Directors,
Executive was guilty of conduct justifying  Termination for Cause and specifying
the particulars thereof in detail. Executive shall not have the right to receive
compensation  or other  benefits  for any period  after  Termination  for Cause.
During the period beginning on the date of the Notice of Termination pursuant to
Section 8 hereof  through  the Date of  Termination,  stock  options  granted to
Executive  under any stock  option plan shall not be  exercisable  nor shall any
unvested  awards granted to Executive  under any stock benefit plan of the Bank,
the Holding Company or any subsidiary or affiliate thereof, vest. At the Date of
Termination,  such stock options and any such unvested  awards shall become null
and void and shall not be  exercisable  by or delivered to Executive at any time
subsequent to such Termination for Cause.

8.       NOTICE

(a) Any purported  termination by the Holding  Company or by Executive  shall be
communicated by a Notice of Termination to the other party. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice which indicates
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  Executive's   employment  under  the  provision  so
indicated.

(b)  "Date of  Termination"  shall  mean the date  specified  in the  Notice  of
Termination  (which,  in the case of a Termination for Cause,  shall not be less
than thirty (30) days from the date such Notice of Termination is given).

(c) If, within thirty (30) 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,  except upon the  occurrence of a
Change in Control and voluntary  termination by Executive in which case the Date
of  Termination  shall  be  the  date  specified  in the  Notice,  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  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)
and provided further that the Date of Termination  shall be extended by a notice
of dispute  only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute

                                     - 10 -

<PAGE>

with reasonable diligence. Notwithstanding the pendency of any such dispute, the
Holding  Company will continue to pay Executive his full  compensation in effect
when the notice giving rise to the dispute was given (including, but not limited
to, Base Salary) and continue him as a participant in all compensation,  benefit
and insurance plans in which he was participating when the notice of dispute was
given,  until the dispute is finally resolved in accordance with this Agreement.
Amounts paid under this Section 8 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.

9.       POST-TERMINATION OBLIGATIONS

All payments and benefits to Executive  under this Agreement shall be subject to
Executive's  compliance  with this  Section  9 for one (1) full  year  after the
earlier of the  expiration  of this  Agreement  or  termination  of  Executive's
employment with the Holding Company.  Executive shall,  upon reasonable  notice,
furnish such information and assistance to the Holding Company as may reasonably
be required by the Holding Company in connection with any litigation in which it
or any of its subsidiaries or affiliates is, or may become, a party.

10.      NON-COMPETITION AND NON-DISCLOSURE

(a) Upon any termination of Executive's employment hereunder pursuant to Section
4 hereof,  Executive  agrees  not to  compete  with the  Holding  Company or its
subsidiaries  for a period of one (1) year  following  such  termination  in any
city, town or county in which Executive's  normal business office is located and
the  Holding  Company or any of its  subsidiaries  has an office or has filed an
application for regulatory approval to establish an office, determined as of the
effective date of such termination, except as agreed to pursuant to a resolution
duly adopted by the Board of Directors. Executive agrees that during such period
and within said  cities,  towns and  counties,  Executive  shall not work for or
advise,  consult or otherwise  serve with,  directly or  indirectly,  any entity
whose  business  materially  competes  with  the  depository,  lending  or other
business  activities  of the Holding  Company or its  subsidiaries.  The parties
hereto,  recognizing that irreparable  injury will result to the Holding Company
or its  subsidiaries,  its  business  and  property in the event of  Executive's
breach of this  Subsection  10(a)  agree that in the event of any such breach by
Executive,  the  Holding  Company  or its  subsidiaries,  will be  entitled,  in
addition  to any other  remedies  and damages  available,  to an  injunction  to
restrain  the  violation  hereof by  Executive,  Executive's  partners,  agents,
servants,  employees  and all  persons  acting  for or under  the  direction  of
Executive.  Executive represents and admits that in the event of the termination
of  his  employment  pursuant  to  Section  4  of  this  Agreement,  Executive's
experience and capabilities  are such that Executive can obtain  employment in a
business  engaged in other lines  and/or of a different  nature than the Holding
Company  or its  subsidiaries,  and that the  enforcement  of a remedy by way of
injunction will not prevent Executive from earning a livelihood.  Nothing herein
will be construed as prohibiting  the Holding Company or its  subsidiaries  from
pursuing any other remedies available to the Holding Company or its subsidiaries
for such breach or  threatened  breach,  including  the recovery of damages from
Executive.

                                     - 11 -

<PAGE>

(b) Executive  recognizes  and  acknowledges  that the knowledge of the business
activities  and plans for  business  activities  of the Holding  Company and its
subsidiaries  as it may exist  from time to time,  is a  valuable,  special  and
unique  asset of the  business  of the  Holding  Company  and its  subsidiaries.
Executive  will not,  during or after the term of his  employment,  disclose any
knowledge of the past, present, planned or considered business activities of the
Holding Company and subsidiaries  thereof to any person, firm,  corporation,  or
other entity for any reason or purpose whatsoever unless expressly authorized by
the Board of  Directors  or  required  by law.  Notwithstanding  the  foregoing,
Executive  may disclose  any  knowledge of banking,  financial  and/or  economic
principles,  concepts or ideas which are not solely and exclusively derived from
the business  plans and  activities  of the Holding  Company.  In the event of a
breach or threatened  breach by Executive of the  provisions of this Section 10,
the Holding Company will be entitled to an injunction restraining Executive from
disclosing,  in whole or in part, the knowledge of the past, present, planned or
considered  business  activities of the Holding  Company or its  subsidiaries or
from rendering any services to any person,  firm,  corporation,  other entity to
whom such knowledge, in whole or in part, has been disclosed or is threatened to
be  disclosed.  Nothing  herein will be  construed  as  prohibiting  the Holding
Company from pursuing any other  remedies  available to the Holding  Company for
such  breach or  threatened  breach,  including  the  recovery  of damages  from
Executive.

11.      DEATH AND DISABILITY

(a)  Death.  Notwithstanding  any  other  provision  of  this  Agreement  to the
contrary,  in the event of Executive's  death during the term of this Agreement,
the  Holding  Company  shall  immediately  pay his  estate  any salary and bonus
accrued  but  unpaid as of the date of his death,  and,  for a period of six (6)
months after  Executive's  death,  the Holding Company shall continue to provide
medical  insurance  benefits  existing  on the date of his  death  and shall pay
Executive's  designated  beneficiary  all  compensation  that would otherwise be
payable to him pursuant to Section 3 of this Agreement. This provision shall not
negate any rights  Executive  or his  beneficiaries  may have to death  benefits
under any employee benefit plan of the Holding Company or the Bank.

(b)      Disability

         (i) Existing Condition.  As of the date of this Agreement Executive has
been determined to be entitled to receive disability benefits under the terms of
the long-term disability  insurance policy ("Disability  Policy") maintained for
him by the  Bank.  As a result  of such  determination,  the  Holding  Company's
obligation  to pay  Executive  his Base  Salary  has been  reduced  to equal the
difference  between  Executive's  Base Salary and amounts  received from time to
time under the  long-term  disability  policy,  to the extent  that such  salary
payments do not result in a reduction in disability payments.

         (ii)  Incremental  Disability.   If  during  the  term  of  Executive's
employment,  he begins  to  receive  additional  disability  benefits  under the
Disability  Policy  as a  result  of an  incremental  or  additional  disability
("Incremental Disability"), then the Holding Company's obligation to pay

                                     - 12 -

<PAGE>

Executive his Base Salary shall, as of the date additional benefits first become
payable under such Disability Policy on account of such Incremental  Disability,
be further reduced to equal the difference  between  Executive's Base Salary and
amounts  received under all long-term  disability  policies,  to the extent that
such salary payments do not result in a reduction in disability payments.

         (iii) Incapacity. If as a result of an Incremental Disability Executive
is  determined  by a  physician  chosen by the  Holding  Company or the Bank and
reasonably  acceptable to Executive or Executive's personal  representatives not
to be capable of fulfilling  Executive's  responsibilities  as an officer of the
Holding Company ("Incapacity Determination"), (i) Executive shall continue to be
covered by the Bank's medical  insurance and life  insurance  policies until the
third  anniversary  of  the  Incapacity  Determination,  and  (ii)  the  Holding
Company's  and Bank's  obligation  to provide  Executive  with other  employment
related fringe benefits  hereunder shall cease as of the date of such Incapacity
Determination   ("Incapacity  Determination  Date").  Prior  to  the  Incapacity
Determination  Date,  the Holding  Company  shall  continue to pay Executive his
annual salary in usual  installments and Executive shall continue to receive all
other  employment-related  fringe benefits due Executive in accordance with this
Agreement.  The Holding Company's or Bank's obligation to provide Executive with
the benefits  described  in Section 4(a) shall not be affected by an  Incapacity
Determination  unless  the terms of the  separate  arrangements  governing  such
benefits so provide.

         (iv)  Termination  of Employment by Reason of  Incapacity.  At any time
from and after the Incapacity Determination Date, the Board of Directors, in its
discretion,  may elect to  terminate  Executive's  employment  by reason of such
incapacity.  Any such  termination as a result of incapacity shall be considered
to be an Event of Termination in accordance with Section 4 of this Agreement.

12.      SOURCE OF PAYMENTS

(a) All  payments  provided  in this  Agreement  shall be timely paid in cash or
check from the general funds of the Holding Company or subject to Section 12(b).

(b)  Notwithstanding  any provision  herein to the contrary,  to the extent that
payments and benefits, as provided by this Agreement, are paid to or received by
Executive  under an  employment  agreement in effect  between  Executive and the
Bank,  such  compensation  payments  and  benefits  paid  by the  Bank  will  be
subtracted  from any  amount  due  simultaneously  to  Executive  under  similar
provisions of this Agreement.  Payments  pursuant to this Agreement and the Bank
agreement shall be allocated in proportion to the level of activity and the time
expended on such  activities by Executive as  determined by the Holding  Company
and the Bank.

                                     - 13 -

<PAGE>

13.      EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS

This Agreement contains the entire understanding  between the parties hereto and
supersedes any prior  employment  agreement  between the Holding  Company or any
predecessor  of the Holding  Company and  Executive,  except that this Agreement
shall not affect or operate to reduce  any  benefit or  compensation  inuring to
Executive of a kind elsewhere provided.  No provision of this Agreement shall be
interpreted to mean that  Executive is subject to receiving  fewer benefits than
those available to him without reference to this Agreement.

14.      NO ATTACHMENT

(a) Except as required by law, no right to receive payments under this Agreement
shall be subject to anticipation,  commutation,  alienation,  sale,  assignment,
encumbrance,  charge,  pledge,  or hypothecation,  or to execution,  attachment,
levy,  or similar  process or  assignment  by operation of law, and any attempt,
voluntary or involuntary,  to affect any such action shall be null, void, and of
no effect.

(b) This Agreement shall be binding upon, and inure to the benefit of, Executive
and the Holding Company and their respective successors and assigns.

15.      MODIFICATION AND WAIVER

         (a)  This  Agreement  may  not be  modified  or  amended  except  by an
instrument in writing signed by the parties hereto.

(b) No term or condition of this Agreement  shall be deemed to have been waived,
nor shall there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver or
estoppel.  No such written  waiver shall be deemed a  continuing  waiver  unless
specifically  stated therein,  and each such waiver shall operate only as to the
specific term or condition waived and shall not constitute a waiver of such term
or condition for the future as to any act other than that specifically waived.

16.      SEVERABILITY

If,  for any  reason,  any  provision  of  this  Agreement,  or any  part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this  Agreement or any part of such  provision not held so invalid,  and each
such other provision and part thereof shall, to the full extent  consistent with
law, continue in full force and effect.

                                     - 14 -

<PAGE>

17.      HEADINGS FOR REFERENCE ONLY

The  headings  of  sections  and  paragraphs  herein  are  included  solely  for
convenience of reference and shall not control the meaning or  interpretation of
any of the provisions of this Agreement.

18.      GOVERNING LAW

This  Agreement  shall be governed by the laws of the State of Delaware  without
regard to principles of conflicts of law of that state.

19.      ARBITRATION

Any dispute or  controversy  arising under or in connection  with this Agreement
shall be settled  exclusively by arbitration,  conducted before a panel of three
arbitrators  sitting in a location selected by Executive within fifty (50) miles
from the location of the Holding  Company,  in accordance  with the rules of the
American Arbitration  Association then in effect. Judgment may be entered on the
arbitrator's award in any court having  jurisdiction;  provided,  however,  that
Executive shall be entitled to seek specific performance of his 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.

In the event any dispute or  controversy  arising  under or in  connection  with
Executive's termination is resolved in favor of Executive,  whether by judgment,
arbitration  or  settlement,  Executive  shall be entitled to the payment of all
back-pay,  including  salary,  bonuses and any other cash  compensation,  fringe
benefits and any compensation and benefits due Executive under this Agreement.

20.      PAYMENT OF COSTS AND LEGAL FEES

All  reasonable  costs and legal fees paid or incurred by Executive  pursuant to
any dispute or question of  interpretation  relating to this Agreement  shall be
paid or  reimbursed  by the Holding  Company,  if Executive is  successful  with
respect to such  dispute  or  question  of  interpretation  pursuant  to a legal
judgment, arbitration or settlement.

21.      INDEMNIFICATION

(a) The Holding Company shall provide Executive (including his heirs,  executors
and  administrators)  with coverage  under a standard  directors'  and officers'
liability insurance policy at its expense and shall indemnify Executive (and his
heirs,  executors and  administrators)  to the fullest  extent  permitted  under
Delaware law against all expenses and liabilities  reasonably incurred by him in
connection with or arising out of any action, suit or proceeding in which he may
be  involved  by reason of his having  been a director or officer of the Holding
Company  (whether or not he continues to be a director or officer at the time of
incurring  such  expenses or  liabilities);  such  expenses and  liabilities  to
include,  but not to be limited to,  judgments,  court costs and attorneys' fees
and the cost of reasonable settlements.

                                     - 15 -

<PAGE>

(b) Any payments  made to  Executive  pursuant to this Section 21 are subject to
and conditioned  upon  compliance  with 12 U.S.C.  Section 1828(k) and 12 C.F.R.
Part 359 and any rules or regulations promulgated thereunder.

22.      SUCCESSOR TO THE HOLDING COMPANY

The Holding  Company shall require any successor or assignee,  whether direct or
indirect,  by  purchase,   merger,   consolidation  or  otherwise,   to  all  or
substantially all the business or assets of the Bank or the Holding Company,  to
expressly and unconditionally  assume and agree to perform the Holding Company's
obligations under this Agreement, in the same manner and to the same extent that
the Holding  Company  would be required to perform such  obligations  if no such
succession or assignment had taken place.

                                   SIGNATURES

         IN WITNESS  WHEREOF,  Berkshire  Hills  Bancorp,  Inc.  has caused this
Agreement  to be  executed  and its  seal to be  affixed  hereunto  by its  duly
authorized  officer and Executive has signed this Agreement,  on the 9th day of
August, 2000.

ATTEST:                         BERKSHIRE HILLS BANCORP, INC.

/s/Rose A. Borotto                  By:  /s/James A. Cunningham, Jr.
-------------------                      --------------------------
Rose A. Borotto                          James A. Cunningham, Jr.
Corporate Secretary                      For the Entire Board of Directors

                  [SEAL]

WITNESS:                        EXECUTIVE

/s/Rose A. Borotto                  By:  /s/Robert A. Wells
-------------------                      ------------------
Rose A. Borotto                          Robert A. Wells
Corporate Secretary

                                     - 16 -BERKSHIRE HILLS BANCORP, INC.
                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT  AGREEMENT  ("Agreement")  is made effective as of June
27, 2000 (the "Effective  Time"), by and between  Berkshire Hills Bancorp,  Inc.
(the "Holding  Company"),  a corporation  organized  under the laws of Delaware,
with its principal offices at 24 North Street, Pittsfield, Massachusetts, 01202,
and Susan M. Santora  ("Executive").  Any  reference to the "Bank"  herein shall
mean Berkshire Bank or any successor to Berkshire Bank.

         WHEREAS, the Holding Company believes that the assurance of Executive's
employment by the Holding Company for the term of this Agreement and the benefit
of her business experience are of material importance; and

         WHEREAS,  Executive  desires  to serve  in the  employ  of the  Holding
Company on a full-time basis for the term of this Agreement.

         NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  herein
contained,  and upon the other terms and conditions  hereinafter  provided,  the
parties to this Agreement hereby agree as follows:

1.       POSITIONS AND RESPONSIBILITIES

(a) During the term of this  Agreement  Executive  agrees to serve as  Executive
Vice President of the Holding Company. Executive shall render administrative and
management services to the Holding Company such as are customarily  performed by
persons in a similar  executive  capacity.  During  the term of this  Agreement,
Executive also agrees to serve, if appointed, as an officer of any subsidiary of
the  Holding  Company  and in such  capacity  will  carry  out such  duties  and
responsibilities reasonably appropriate to that office.

(b) During the term of Executive's  employment under this Agreement,  except for
periods of absence occasioned by illness,  vacation, and other reasonable leaves
of  absence,  Executive  shall  devote  substantially  all  her  business  time,
attention,  skill,  and efforts to the faithful  performance of her duties under
this Agreement,  including  activities and services related to the organization,
operation and management of the Holding Company and its subsidiaries, as well as
participation  in community,  professional  and civic  organizations;  provided,
however,  that,  with the  approval  of the Board of  Directors  of the  Holding
Company (the "Board of Directors"), as evidenced by a resolution of the Board of
Directors,  from time to time, Executive may serve, or continue to serve, on the
boards of directors of, and hold any other offices or positions in, companies or
organizations,  which,  in the  judgment  of the  Board of  Directors,  will not
present any conflict of interest with the Holding  Company or its  subsidiaries,
or materially  affect the  performance  of Executive's  duties  pursuant to this
Agreement.

         (c) Notwithstanding  anything herein contained to the contrary,  either
Executive or the Holding

                                      - 1 -

<PAGE>

Company may terminate  Executive's  employment  with the Holding  Company at any
time during the term of this  Agreement,  subject to the terms and conditions of
this Agreement.

2.       TERM OF EMPLOYMENT

Executive's employment under this Agreement shall be deemed to have commenced as
of the Effective  Time and shall  continue for a period of thirty-six  (36) full
calendar months from the Effective Time.  Commencing on the date of execution of
this  Agreement,  the term of this  Agreement  shall extend for one day each day
until such time as the Board of Directors or Executive  elects not to extend the
term of the Agreement by giving written notice to the other party, in which case
the term of this  Agreement  shall  become  fixed  and  shall  end on the  third
anniversary of the date of such written notice.

3.       COMPENSATION, BENEFITS AND REIMBURSEMENT

(a) Base Salary. The Holding Company shall pay Executive an annual salary of not
less than $125,510 ("Base Salary").  Executive's Base Salary shall be payable in
accordance with the normal payroll  practices of the Holding  Company.  Whenever
used in this  Agreement,  Base Salary shall include any amounts of  compensation
deferred by Executive under any tax-qualified retirement or welfare benefit plan
or any other deferred compensation arrangement maintained by the Holding Company
or the Bank.  During the term of this  Agreement,  the Board of  Directors  or a
committee  appointed by the Board of Directors  shall  review  Executive's  Base
Salary  at least  annually  and the  Board of  Directors  or the  committee  may
increase  Executive's  Base Salary at any time. Any increase in Executive's Base
Salary shall become a term of this  Agreement and shall be the new "Base Salary"
for purposes of this Agreement.

(b) Incentive Compensation.  In addition to her Base Salary,  Executive shall be
entitled  to  participate  in and shall  receive  payments  under any  incentive
compensation  bonus  program  sponsored  by the  Holding  Company  or the  Bank.
Executive's incentive compensation shall be determined by the Board of Directors
or a committee  appointed by the Board of Directors at a level  appropriate  for
executive officers.

(c) Vacation;  Holidays;  Sick Time.  Executive shall be entitled to vacation in
accordance  with the standard  vacation  policies of the Holding  Company or the
Bank for  senior  executive  officers,  but in no event less than four (4) weeks
vacation during each year of employment. Executive shall take vacation at a time
mutually agreed upon by the Holding Company or the Bank and Executive. Executive
shall  receive her Base Salary and other  benefits  during  periods of vacation.
Executive  shall also be entitled to paid legal holidays in accordance  with the
policies of the Holding Company or the Bank. Executive shall also be entitled to
sick leave in  accordance  with the policies of the Holding  Company or the Bank
for senior executive  officers,  but in no event less than the number of days of
sick leave per year to which Executive was entitled at the Effective Time.

                                      - 2 -

<PAGE>

(d) Other Employee  Benefits.  In addition to any other compensation or benefits
provided for under this  Agreement,  Executive  shall be entitled to continue to
participate in any employee  benefit plans,  arrangements and perquisites of the
Holding  Company  or the  Bank in  which  she  participates  or is  eligible  to
participate  at  the  Effective  Time.  Executive  shall  also  be  entitled  to
participate in any employee  benefits or perquisites  the Holding Company or the
Bank offers to full-time  employees or executive  management in the future.  The
Holding Company or the Bank will not, without Executive's prior written consent,
make  any  changes  in such  plans,  arrangements  or  perquisites  which  would
adversely affect  Executive's  rights or benefits  thereunder without separately
providing for an arrangement that ensures Executive receives or will receive the
economic value that Executive  would  otherwise lose as a result of such adverse
effect,   unless   such   change  is  general   in  nature  and   applies  in  a
nondiscriminatory  manner to all employees  covered by the plan,  arrangement or
perquisite.  Without limiting the generality of the foregoing provisions of this
paragraph,  Executive  shall be entitled to participate  in or receive  benefits
under all plans  relating  to stock  options,  restricted  stock  awards,  stock
purchases,  pension,  profit  sharing,  employee  stock  ownership,  group  life
insurance, medical and other health and welfare coverage that are made available
by the Holding  Company or the Bank at the Effective  Time or at any time in the
future during the term of this Agreement,  subject to and on a basis  consistent
with  the  terms,  conditions  and  overall  administration  of such  plans  and
arrangements.  Nothing  paid to Executive  under any such plans or  arrangements
will be  deemed  to be in lieu of  other  compensation  to  which  Executive  is
entitled under this Agreement.

4.       PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION

(a) Upon the  occurrence of an Event of  Termination  (as defined  herein below)
during  Executive's term of employment  under this Agreement,  the provisions of
this Section 4 shall apply. As used in this Agreement, an "Event of Termination"
shall mean and include any one or more of the following:  (i) the termination of
Executive's full-time employment under this Agreement by the Holding Company for
any reason other than a termination governed by Section 7 of this Agreement;  or
(ii) Executive's  resignation from her employment with the Holding Company upon,
any (A) failure to re-appoint  Executive to her positions set forth in Section 1
of this Agreement,  unless Executive consents to such event, (B) material change
in Executive's  functions,  duties, or responsibilities with the Holding Company
or its subsidiaries,  which change would cause Executive's position(s) to become
one of lesser responsibility, importance, or scope, unless Executive consents to
such event, (C) relocation of Executive's  principal place of employment by more
than  twenty-five  (25) miles from its location at the  Effective  Time,  unless
Executive  consents to such event, (D) material  reduction (except to the extent
provided for in Section 3(d) of this  Agreement) in the benefits and perquisites
provided to Executive from those being provided as of the Effective Time of this
Agreement,   unless  Executive  consents  to  such  event,  (E)  liquidation  or
dissolution of the Holding  Company or the Bank, or (F) breach of this Agreement
by the Holding  Company.  Upon the occurrence of any event  described in clauses
(A),  (B),  (C),  (D),  (E) or (F),  above,  Executive  shall  have the right to
terminate her employment  under this Agreement by resignation upon not less than
sixty (60) days prior written  notice given within six (6) full calendar  months
after  the  applicable  event  giving  rise to  Executive's  right  to  elect to
terminate her employment.

                                      - 3 -

<PAGE>

(b) Upon  Executive's  termination  from employment in accordance with paragraph
(a) of this  Section 4, on the Date of  Termination,  as defined in Section 8 of
the Agreement,  the Holding Company shall be obligated to pay Executive,  or, in
the event of her death  following the Date of  Termination,  her  beneficiary or
beneficiaries, or her estate, as the case may be, an amount equal to the sum of:
(i) the Base  Salary  and  incentive  compensation  that would have been paid to
Executive for the remaining  term of this Agreement had the Event of Termination
not occurred  (based on  Executive's  then current Base Salary and most recently
paid or accrued  bonus at the time of the Event of  Termination);  plus (ii) the
value, as calculated by a recognized firm customarily performing such valuation,
of any stock options which as of the Date of  Termination,  have been granted to
Executive but are not  exercisable  by Executive and the value of any restricted
stock awards which have been granted to Executive,  but in which  Executive does
not  have  a  non-forfeitable  or  fully-  vested  interest  as of the  Date  of
Termination;  plus (iii) the value of all employee benefits that would have been
provided to Executive for the remaining  term of this  Agreement had an Event of
Termination  not  occurred,  based on the  most  recent  level of  contribution,
accrual or other participation by or on behalf of Executive.  At the election of
Executive,  which election is to be made prior to the Date of Termination,  such
payments  shall be made in a lump sum.  In the event that no  election  is made,
payment to  Executive  will be made on a monthly  basis in  approximately  equal
installments during the remaining unexpired term of the Agreement. Such payments
shall not be reduced in the event Executive  obtains other employment  following
termination of employment.

(c) In addition to the payments provided for in paragraph (b) of this Section 4,
upon Executive's  termination of employment in accordance with the provisions of
paragraph  (a) of this Section 4, to the extent that the Holding  Company or the
Bank  continues  to offer  any  life,  medical,  health,  disability  or  dental
insurance plan or arrangement in which Executive participates in on the last day
of her  employment  (each  being a "Welfare  Plan"),  Executive  and her covered
dependents shall continue  participating  in such Welfare Plans,  subject to the
same premium contributions on the part of Executive as were required immediately
prior to the Event of  Termination  until the  earlier of (i) her death (ii) her
employment by another employer other than one of which she is the majority owner
or (iii) the end of the remaining term of this Agreement. If the Holding Company
or Bank  does  not  offer  the  Welfare  Plans at any time  after  the  Event of
Termination,  then the Holding  Company shall provide  Executive  with a payment
equal to the  premiums  for such  benefits  for the period  which runs until the
earlier of (i) her death (ii) her employment by another  employer other than one
of which she is the  majority  owner or (iii) the end of the  remaining  term of
this Agreement.

5.       CHANGE IN CONTROL

(a) For purposes of this Agreement, a "Change in Control" shall mean an event of
a nature that:  (i) would be required to be reported in response to Item 1(a) of
the  current  report on Form 8-K, as in effect on the date  hereof,  pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act");
or (ii) results in a Change in Control of the Bank or the Holding Company within
the  meaning  of the Bank  Change in Control  Act and the Rules and  Regulations
promulgated by the Federal Deposit Insurance  Corporation  ("FDIC") at 12 C.F.R.
ss.  303.4(a) with respect to the Bank and the Board of Governors of the Federal
Reserve System ("FRB") at 12 C.F.R. ss. 225.41(b)

                                      - 4 -

<PAGE>

with respect to the Holding Company,  as in effect on the date hereof;  or (iii)
results in a  transaction  requiring  prior FRB approval  under the Bank Holding
Company Act of 1956 and the regulations  promulgated thereunder by the FRB at 12
C.F.R.  ss.  225.11,  as in effect on the date  hereof  except  for the  Holding
Company's  acquisition of the Bank; or (iv) without  limitation such a Change in
Control  shall be deemed to have  occurred at such time as (A) any  "person" (as
the term is used in Sections  13(d) and 14(d) of the Exchange Act) is or becomes
the  "beneficial  owner"  (as  defined in Rule 13d-3  under the  Exchange  Act),
directly  or  indirectly,  of  securities  of the  Bank or the  Holding  Company
representing  20% or more of the  Bank's or the  Holding  Company's  outstanding
securities  except  for any  securities  of the Bank  purchased  by the  Holding
Company in connection  with the conversion of the Bank to the stock form and any
securities purchased by any tax-qualified  employee benefit plan of the Bank; or
(B)  individuals  who  constitute the Board of Directors on the date hereof (the
"Incumbent  Board")  cease for any  reason  to  constitute  at least a  majority
thereof,  provided  that any person  becoming a director  subsequent to the date
hereof whose election was approved by a vote of at least three-quarters (3/4) of
the directors  comprising the Incumbent  Board, or whose nomination for election
by the  Holding  Company's  stockholders  was  approved  by the same  Nominating
Committee  serving  under an  Incumbent  Board,  shall be, for  purposes of this
clause (B),  considered as though she were a member of the Incumbent  Board;  or
(C)  a  plan  of  reorganization,   merger,   consolidation,   sale  of  all  or
substantially  all the  assets of the Bank or the  Holding  Company  or  similar
transaction  occurs in which the Bank or Holding  Company  is not the  resulting
entity; or (D) solicitations of shareholders of the Holding Company,  by someone
other than the current  management of the Holding Company,  seeking  stockholder
approval of a plan of  reorganization,  merger or  consolidation  of the Holding
Company or Bank or similar transaction with one or more corporations as a result
of which the  outstanding  shares of the class of securities then subject to the
plan or  transaction  are  exchanged  for or converted  into cash or property or
securities not issued by the Bank or the Holding  Company shall be  distributed;
or (E) a tender  offer is made for 20% or more of the voting  securities  of the
Bank or the Holding Company.

(b)  If any of the  events  described  in  paragraph  (a)  of  this  Section  5,
constituting  a Change in  Control,  have  occurred  or the  Board of  Directors
determines that a Change in Control has occurred, Executive shall be entitled to
the benefits provided in paragraphs (c), (d), (e), (f) and (g) of this Section 5
upon her termination of employment at any time during the term of this Agreement
on or  after  the date the  Change  in  Control  occurs  due to (1)  Executive's
dismissal or (2) Executive's  resignation following any demotion, loss of title,
office  or  significant   authority  or  responsibility,   reduction  in  annual
compensation  or benefits or relocation of her principal  place of employment by
more than  twenty-five  (25) miles from its  location  immediately  prior to the
Change  in  Control,  unless  such  termination  is  because  of  her  death  or
Termination for Cause; provided, however, that such payments shall be reduced by
any payment made under Section 4 of this Agreement.

(c)  Upon  the  occurrence  of a  Change  in  Control  followed  by  Executive's
termination of  employment,  as provided in paragraph (b) of this Section 5, the
Holding  Company shall pay Executive,  or in the event of her subsequent  death,
her  beneficiary  or  beneficiaries,  or her  estate,  as the  case  may be,  as
severance pay or liquidated  damages, or both, a sum equal to the greater of: 1)
the  payments and benefits  due for the  remaining  term of the  Agreement or 2)
three (3) times

                                      - 5 -

<PAGE>

Executive's  average annual  compensation from the Holding Company,  the Bank or
their affiliates for the five (5) preceding  taxable years or such lesser number
of years in the event that  Executive  shall have  actually been employed by the
Holding  Company  or the Bank for less  than  five  (5)  years.  In  determining
Executive's average annual compensation,  annual compensation shall include Base
Salary  and any other  taxable  income,  including  but not  limited  to amounts
related to the granting, vesting or exercise of restricted stock or stock option
awards,  commissions,  bonuses  (whether  paid or  accrued  for  the  applicable
period),  as well as,  severance  payments,  retirement  benefits,  director  or
committee  fees and fringe  benefits paid or to be paid to Executive or paid for
Executive's  benefit  during  any such  year,  profit  sharing,  employee  stock
ownership plan and other retirement contributions or benefits,  including to any
tax-qualified  plan or  arrangement  (whether or not taxable) made or accrued on
behalf of Executive of such year. At the election of Executive,  which  election
is to be made prior to or within thirty (30) days of the Date of  Termination on
or  following  a  Change  in  Control,  such  payment  may be made in a lump sum
(without  discount for early  payment) on or  immediately  following the Date of
Termination  (which may be the date a Change in Control occurs) or paid in equal
monthly  installments  during  the  sixty  (60)  months  following   Executive's
termination. In the event that no election is made, payment to Executive will be
made on a monthly  basis  during the sixty  (60)  months  following  Executive's
termination.

(d) Upon the  occurrence of a Change in Control,  Executive  will be entitled to
receive benefits due her under or contributed by the Bank or the Holding Company
on her behalf  pursuant to any  retirement,  incentive,  profit sharing or other
retirement,  bonus,  performance,  disability  or other  employee  benefit  plan
maintained  by the  Holding  Company  or the Bank on  Executive's  behalf to the
extent  such  benefits  are not  otherwise  paid to  Executive  under a separate
provision of this Agreement. In addition, for purposes of determining her vested
accrued  benefit,  Executive  shall be credited either under any defined benefit
pension plan maintained by the Bank or, if not permitted under such plan,  under
a separate  arrangement,  with the additional  "years of service" that she would
have earned for vesting and benefit  accrual  purposes for the remaining term of
the Agreement had her employment not terminated.

(e) Upon the  occurrence of a Change in Control and  Executive's  termination of
employment  in  connection  therewith,  the  Holding  Company  will  cause to be
continued life, medical and disability coverage  substantially  identical to the
coverage  maintained by the Holding Company or the Bank for Executive and any of
her  dependents  covered  under such plans prior to the Change in Control.  Such
coverage and payments  shall cease upon the  expiration of thirty-six  (36) full
calendar  months  following the Date of  Termination.  In the event  Executive's
participation  in any such plan or program is barred,  the Holding Company shall
arrange to provide  Executive and her  dependents  with  benefits  substantially
similar to those of which Executive and her dependents would otherwise have been
entitled to receive  under such plans and  programs  from which their  continued
participation is barred or provide their economic equivalent.

(f) The use or provision of any  membership,  license,  automobile use, or other
perquisites shall be continued during the remaining term of the Agreement on the
same financial terms and obligations as were in place  immediately  prior to the
Change in Control. To the extent that any item

                                      - 6 -

<PAGE>

referred to in this paragraph will, at the end of the term of this Agreement, no
longer be available to Executive, Executive will have the option to purchase all
rights  then held by the  Holding  Company  or the Bank to such item for a price
equal to the then fair market value of the item.

(g) In the event that  Executive  is  receiving  monthly  payments  pursuant  to
Section  5(c)  hereof,  on an annual  basis,  thereafter,  between  the dates of
January 1 and January 31 of each year, Executive shall elect whether the balance
of the amount  payable  under the Agreement at that time shall be paid in a lump
sum or on a pro rata basis  pursuant to such  section.  Such  election  shall be
irrevocable for the year for which such election is made.

6.       CHANGE IN CONTROL RELATED PROVISIONS

(a) Notwithstanding the preceding provisions of Section 5 of this Agreement, for
any taxable year in which Executive shall be liable for the payment of an excise
tax under Section 4999 of the Code (or any successor  provision  thereto),  with
respect to any  payment in the nature of the  compensation  made by the  Holding
Company or its  subsidiaries  to (or for the benefit of)  Executive  pursuant to
this  Agreement or otherwise,  the Holding  Company (or any  successor  thereto)
shall pay to Executive an amount determined under the following formula:

         An amount equal to:  (E x P) + X

WHERE:

         X        =                           E x P
                           -----------------------------------------
                           1 - [(FI x (1 - SLI)) + SLI + E + M + PO]

         E        =        the rate at which  the excise tax  is  assessed under
                           Section 4999 of the Code;

         P        =        the amount with respect  to which  such excise tax is
                           assessed, determined without regard to this Section
                           6;

        FI       =         the   highest  marginal   rate   of  federal  income,
                           employment, and other taxes (other than taxes imposed
                           under  Section  4999  of  the  Code)   applicable  to
                           Executive for the taxable year in question (including
                           any  effective   increase  in  Executive's  tax  rate
                           attributable to the disallowance of any deduction);

         SLI      =        the sum of  the highest marginal  rates of income and
                           payroll tax applicable to Executive under  applicable
                           state and local laws for the taxable year in question
                           (including any effective  increase in Executive's tax
                           rate   attributable   to  the   disallowance  of  any
                           deduction);

         M        =        highest marginal rate of Medicare tax; and

                                      - 7 -

<PAGE>

         PO       =        adjustment  for  phase  out of or loss of  deduction,
                           personal exemption or other similar items.

With  respect to any payment in the nature of  compensation  that is made to (or
for the benefit of) Executive under the terms of this Agreement or otherwise and
on which an excise tax under  Section  4999 of the Code may or will be assessed,
the payment  determined  under this  Section 6 shall be made to Executive on the
earliest of (i) the date the Holding  Company is required to withhold  such tax,
(ii) the date the tax is required to be paid by Executive,  or (iii) at the time
of the Change in Control.  It is the  intention  of the parties that the Holding
Company provide  Executive with a full tax gross-up under the provisions of this
Section 6, so that on a net after-tax  basis,  the result to Executive  shall be
the same as if the excise tax under Section 4999 (or any  successor  provisions)
of the Code had not been imposed.  The payment may be adjusted,  as appropriate,
if alternative minimum tax rules under the Code are applicable to Executive.

(b)  Notwithstanding  the  foregoing,  if it is (i) initially  determined by the
Holding Company's tax advisors that no excise tax under Section 4999 is due with
respect to any payment or benefit  described  in the first  paragraph of Section
6(a) and,  thereafter,  it is determined in a final judicial  determination or a
final  administrative  settlement  that the Section  4999 excise tax is due with
respect to such payments or benefits or (ii) subsequently  determined in a final
judicial  determination or a final administrative  settlement to which Executive
is a party  that the  excise  tax under  Section  4999 is due or that the excess
parachute payment as defined in Section 4999 of the Code is more than the amount
determined  as "P",  above (such revised  determination  under (i) or (ii) above
being thereafter referred to as the "Determinative  Excess Parachute  Payment"),
then the tax advisors of the Holding  Company (or any successor  thereto)  shall
determine  the amount (the  "Adjustment  Amount"),  the Holding  Company (or its
successor) must pay to Executive, in order to put Executive in the same position
as  Executive  would  have been if the amount  determined  as "P" above had been
equal  to  the  Determinative  Excess  Parachute  Payment.  In  determining  the
Adjustment  Amount,  the tax advisors  shall take into account any and all taxes
(including  any  penalties  of any  nature  and  interest)  paid or  payable  by
Executive  in  connection  with  such  final  judicial  determination  or  final
administrative  settlement.  As soon as practicable  after the Adjustment Amount
has been so determined,  the Holding Company shall pay the Adjustment  Amount to
Executive.

(c) The Holding  Company (or its successor)  shall  indemnify and hold Executive
harmless  from  any  and all  losses,  costs  and  expenses  (including  without
limitation,  reasonable attorney's fees, reasonable accountant's fees, interest,
fines and  penalties  of any  kind)  which  Executive  incurs as a result of any
administrative or judicial review of Executive's liability under Section 4999 of
the Code by the Internal  Revenue Service or any comparable state agency through
and including a final judicial determination or final administrative  settlement
of any dispute arising out of Executive's  liability for the Section 4999 excise
tax or otherwise  relating to the classification for purposes of Section 280G of
the Code of any  payment  or  benefit  in the  nature  of  compensation  made or
provided to Executive by the Holding Company or any successor thereto. Executive
shall promptly notify the Holding Company in writing whenever Executive receives
notice of the commencement of any judicial or administrative proceeding,  formal
or informal, in which the federal tax treatment under

                                      - 8 -

<PAGE>

Section 4999 of the Code of any amount paid or payable  under this  Supplemental
Agreement  is being  reviewed or is in dispute  (including  a notice of audit or
other inquiry  concerning the reporting of Executive's  liability  under Section
4999).  The Holding Company (or its successor) may assume control at its expense
over all legal and  accounting  matters  pertaining to such federal or state tax
treatment  (except to the extent  necessary  or  appropriate  for  Executive  to
resolve any such proceeding with respect to any matter unrelated to amounts paid
or payable  pursuant to this contract) and Executive  shall cooperate fully with
the Holding Company in any such  proceeding.  Executive shall not enter into any
compromise or settlement or otherwise  prejudice any rights the Holding  Company
(or its successor) may have in connection therewith without prior consent to the
Holding  Company (or its  successor).  In the event that the Holding Company (or
any  successor  thereto)  elects not to assume  control over such  matters,  the
Holding Company (or any successor  thereto) shall promptly  reimburse  Executive
for all expenses  related  thereto as and when  incurred  upon  presentation  of
appropriate documentation relating thereto.

7.       TERMINATION FOR CAUSE

         The term  "Termination  for Cause"  shall mean  termination  because of
Executive's  personal  dishonesty,  willful misconduct,  any breach of fiduciary
duty involving  personal profit,  intentional  failure to perform stated duties,
willful violation of any law, rule, regulation (other than traffic violations or
similar  offenses),  final  cease and  desist  order or  material  breach of any
provision of this Agreement.  Notwithstanding the foregoing, Executive shall not
be deemed to have been  terminated  for cause  unless and until there shall have
been  delivered to her a Notice of  Termination  which shall include a copy of a
resolution duly adopted by the affirmative  vote of not less than  three-fourths
(3/4) of the  members  of the Board of  Directors  at a meeting  of the Board of
Directors called and held for that purpose (after reasonable notice to Executive
and an opportunity for her, together with counsel,  to be heard before the Board
of Directors), finding that in the good faith opinion of the Board of Directors,
Executive was guilty of conduct justifying  Termination for Cause and specifying
the particulars thereof in detail. Executive shall not have the right to receive
compensation  or other  benefits  for any period  after  Termination  for Cause.
During the period beginning on the date of the Notice of Termination pursuant to
Section 8 hereof  through  the Date of  Termination,  stock  options  granted to
Executive  under any stock  option plan shall not be  exercisable  nor shall any
unvested  awards granted to Executive  under any stock benefit plan of the Bank,
the Holding Company or any subsidiary or affiliate thereof, vest. At the Date of
Termination,  such stock options and any such unvested  awards shall become null
and void and shall not be  exercisable  by or delivered to Executive at any time
subsequent to such Termination for Cause.

8.       NOTICE

(a) Any purported  termination by the Holding  Company or by Executive  shall be
communicated by a Notice of Termination to the other party. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice which indicates
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  Executive's   employment  under  the  provision  so
indicated.

                                      - 9 -

<PAGE>

(b)  "Date of  Termination"  shall  mean the date  specified  in the  Notice  of
Termination  (which,  in the case of a Termination for Cause,  shall not be less
than thirty (30) days from the date such Notice of Termination is given).

(c) If, within thirty (30) 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,  except upon the  occurrence of a
Change in Control and voluntary  termination by Executive in which case the Date
of  Termination  shall  be  the  date  specified  in the  Notice,  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  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)
and provided further that the Date of Termination  shall be extended by a notice
of dispute  only if such notice is given in good faith and the party giving such
notice  pursues  the  resolution  of such  dispute  with  reasonable  diligence.
Notwithstanding  the  pendency of any such  dispute,  the Holding  Company  will
continue to pay Executive her full compensation in effect when the notice giving
rise to the dispute was given  (including,  but not limited to, Base Salary) and
continue her as a participant in all  compensation,  benefit and insurance plans
in which she was participating  when the notice of dispute was given,  until the
dispute is finally  resolved in  accordance  with this  Agreement.  Amounts paid
under  this  Section 8 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.

9.       POST-TERMINATION OBLIGATIONS

All payments and benefits to Executive  under this Agreement shall be subject to
Executive's  compliance  with this  Section  9 for one (1) full  year  after the
earlier of the  expiration  of this  Agreement  or  termination  of  Executive's
employment with the Holding Company.  Executive shall,  upon reasonable  notice,
furnish such information and assistance to the Holding Company as may reasonably
be required by the Holding Company in connection with any litigation in which it
or any of its subsidiaries or affiliates is, or may become, a party.

10.      NON-COMPETITION AND NON-DISCLOSURE

(a) Upon any termination of Executive's employment hereunder pursuant to Section
4 hereof,  Executive  agrees  not to  compete  with the  Holding  Company or its
subsidiaries  for a period of one (1) year  following  such  termination  in any
city, town or county in which Executive's  normal business office is located and
the  Holding  Company or any of its  subsidiaries  has an office or has filed an
application for regulatory approval to establish an office, determined as of the
effective date of such termination, except as agreed to pursuant to a resolution
duly adopted by the Board of Directors. Executive agrees that during such period
and within said  cities,  towns and  counties,  Executive  shall not work for or
advise,  consult or otherwise  serve with,  directly or  indirectly,  any entity
whose  business  materially  competes  with  the  depository,  lending  or other
business  activities  of the Holding  Company or its  subsidiaries.  The parties
hereto,  recognizing that irreparable  injury will result to the Holding Company
or its  subsidiaries,  its  business  and  property in the event of  Executive's
breach

                                     - 10 -

<PAGE>

of this  Subsection  10(a)  agree  that  in the  event  of any  such  breach  by
Executive,  the  Holding  Company  or its  subsidiaries,  will be  entitled,  in
addition  to any other  remedies  and damages  available,  to an  injunction  to
restrain  the  violation  hereof by  Executive,  Executive's  partners,  agents,
servants,  employees  and all  persons  acting  for or under  the  direction  of
Executive.  Executive represents and admits that in the event of the termination
of  her  employment  pursuant  to  Section  4  of  this  Agreement,  Executive's
experience and capabilities  are such that Executive can obtain  employment in a
business  engaged in other lines  and/or of a different  nature than the Holding
Company  or its  subsidiaries,  and that the  enforcement  of a remedy by way of
injunction will not prevent Executive from earning a livelihood.  Nothing herein
will be construed as prohibiting  the Holding Company or its  subsidiaries  from
pursuing any other remedies available to the Holding Company or its subsidiaries
for such breach or  threatened  breach,  including  the recovery of damages from
Executive.

(b) Executive  recognizes  and  acknowledges  that the knowledge of the business
activities  and plans for  business  activities  of the Holding  Company and its
subsidiaries  as it may exist  from time to time,  is a  valuable,  special  and
unique  asset of the  business  of the  Holding  Company  and its  subsidiaries.
Executive  will not,  during or after the term of her  employment,  disclose any
knowledge of the past, present, planned or considered business activities of the
Holding Company and subsidiaries  thereof to any person, firm,  corporation,  or
other entity for any reason or purpose whatsoever unless expressly authorized by
the Board of  Directors  or  required  by law.  Notwithstanding  the  foregoing,
Executive  may disclose  any  knowledge of banking,  financial  and/or  economic
principles,  concepts or ideas which are not solely and exclusively derived from
the business  plans and  activities  of the Holding  Company.  In the event of a
breach or threatened  breach by Executive of the  provisions of this Section 10,
the Holding Company will be entitled to an injunction restraining Executive from
disclosing,  in whole or in part, the knowledge of the past, present, planned or
considered  business  activities of the Holding  Company or its  subsidiaries or
from rendering any services to any person,  firm,  corporation,  other entity to
whom such knowledge, in whole or in part, has been disclosed or is threatened to
be  disclosed.  Nothing  herein will be  construed  as  prohibiting  the Holding
Company from pursuing any other  remedies  available to the Holding  Company for
such  breach or  threatened  breach,  including  the  recovery  of damages  from
Executive.

11.      DEATH AND DISABILITY

(a)  Death.  Notwithstanding  any  other  provision  of  this  Agreement  to the
contrary,  in the event of Executive's  death during the term of this Agreement,
the  Holding  Company  shall  immediately  pay her  estate  any salary and bonus
accrued  but  unpaid as of the date of her death,  and,  for a period of six (6)
months after  Executive's  death,  the Holding Company shall continue to provide
medical  insurance  benefits  existing  on the date of her  death  and shall pay
Executive's  designated  beneficiary  the Base  Salary that would  otherwise  be
payable to her pursuant to Section 3 of this Agreement. This provision shall not
negate any rights  Executive  or her  beneficiaries  may have to death  benefits
under any employee benefit plan of the Holding Company or the Bank.

                                     - 11 -

<PAGE>

(b)      Disability

         (i) Disability.  If during the term of Executive's employment Executive
begins to receive disability benefits under the long-term  disability  insurance
policy  maintained  by the Bank  (the  "Disability  Policy"),  then the  Holding
Company's obligation to pay Executive her Base Salary shall, as of the date such
benefits  first  become  payable  under  the  Disability  Policy on  account  of
Executive's  disability,  be reduced to equal the difference between Executive's
Base Salary and amounts received under all long-term disability policies, to the
extent that such salary  payments  do not result in a  reduction  in  disability
payments.

         (ii) Incapacity. If, as a result of Disability, Executive is determined
by a  physician  chosen  by the  Holding  Company  or the  Bank  and  reasonably
acceptable  to  Executive  or  Executive's  personal  representatives  not to be
capable of fulfilling Executive's  responsibilities as an officer of the Holding
Company ("Incapacity Determination"), (1) Executive shall continue to be covered
by the Bank's  medical  insurance and life  insurance  policies  until the third
anniversary of the Incapacity  Determination,  and (2) the Holding  Company's or
the Bank's obligation to provide Executive with other employment-related  fringe
benefits  hereunder shall cease as of the date of such Incapacity  Determination
("Incapacity  Determination Date"). Prior to the Incapacity  Determination Date,
the Holding  Company shall  continue to pay Executive her annual salary in usual
installments    and   Executive    shall   continue   to   receive   all   other
employment-related  fringe  benefits due to Executive  in  accordance  with this
Agreement.

         (iii)  Termination of Employment by Reason of  Incapacity.  At any time
from and after the Incapacity Determination Date, the Board of Directors, in its
discretion,  may elect to  terminate  Executive's  employment  by reason of such
incapacity.  Any such  termination as a result of incapacity shall be considered
to be an Event of Termination in accordance with Section 4 of this Agreement.

12.      SOURCE OF PAYMENTS

(a) All  payments  provided  in this  Agreement  shall be timely paid in cash or
check from the general funds of the Holding Company or subject to Section 12(b).

(b)  Notwithstanding  any provision  herein to the contrary,  to the extent that
payments and benefits, as provided by this Agreement, are paid to or received by
Executive  under an  employment  agreement in effect  between  Executive and the
Bank,  such  compensation  payments  and  benefits  paid  by the  Bank  will  be
subtracted  from any  amount  due  simultaneously  to  Executive  under  similar
provisions of this Agreement.  Payments  pursuant to this Agreement and the Bank
agreement shall be allocated in proportion to the level of activity and the time
expended on such  activities by Executive as  determined by the Holding  Company
and the Bank.

                                     - 12 -

<PAGE>

13.      EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS

This Agreement contains the entire understanding  between the parties hereto and
supersedes any prior  employment  agreement  between the Holding  Company or any
predecessor  of the Holding  Company and  Executive,  except that this Agreement
shall not affect or operate to reduce  any  benefit or  compensation  inuring to
Executive of a kind elsewhere provided.  No provision of this Agreement shall be
interpreted to mean that  Executive is subject to receiving  fewer benefits than
those available to her without reference to this Agreement.

14.      NO ATTACHMENT

(a) Except as required by law, no right to receive payments under this Agreement
shall be subject to anticipation,  commutation,  alienation,  sale,  assignment,
encumbrance,  charge,  pledge,  or hypothecation,  or to execution,  attachment,
levy,  or similar  process or  assignment  by operation of law, and any attempt,
voluntary or involuntary,  to affect any such action shall be null, void, and of
no effect.

(b) This Agreement shall be binding upon, and inure to the benefit of, Executive
and the Holding Company and their respective successors and assigns.

15.      MODIFICATION AND WAIVER

(a) This  Agreement  may not be modified or amended  except by an  instrument in
writing signed by the parties hereto.

(b) No term or condition of this Agreement  shall be deemed to have been waived,
nor shall there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver or
estoppel.  No such written  waiver shall be deemed a  continuing  waiver  unless
specifically  stated therein,  and each such waiver shall operate only as to the
specific term or condition waived and shall not constitute a waiver of such term
or condition for the future as to any act other than that specifically waived.

16.      SEVERABILITY

If,  for any  reason,  any  provision  of  this  Agreement,  or any  part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this  Agreement or any part of such  provision not held so invalid,  and each
such other provision and part thereof shall, to the full extent  consistent with
law, continue in full force and effect.

                                     - 13 -

<PAGE>

17.      HEADINGS FOR REFERENCE ONLY

The  headings  of  sections  and  paragraphs  herein  are  included  solely  for
convenience of reference and shall not control the meaning or  interpretation of
any of the provisions of this Agreement.

18.      GOVERNING LAW

This  Agreement  shall be governed by the laws of the State of Delaware  without
regard to principles of conflicts of law of that state.

19.      ARBITRATION

Any dispute or  controversy  arising under or in connection  with this Agreement
shall be settled  exclusively by arbitration,  conducted before a panel of three
arbitrators  sitting in a location selected by Executive within fifty (50) miles
from the location of the Holding  Company,  in accordance  with the rules of the
American Arbitration  Association then in effect. Judgment may be entered on the
arbitrator's award in any court having  jurisdiction;  provided,  however,  that
Executive shall be entitled to seek specific performance of her 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.

In the event any dispute or  controversy  arising  under or in  connection  with
Executive's termination is resolved in favor of Executive,  whether by judgment,
arbitration  or  settlement,  Executive  shall be entitled to the payment of all
back-pay,  including  salary,  bonuses and any other cash  compensation,  fringe
benefits and any compensation and benefits due Executive under this Agreement.

20.      PAYMENT OF COSTS AND LEGAL FEES

All  reasonable  costs and legal fees paid or incurred by Executive  pursuant to
any dispute or question of  interpretation  relating to this Agreement  shall be
paid or  reimbursed  by the Holding  Company,  if Executive is  successful  with
respect to such  dispute  or  question  of  interpretation  pursuant  to a legal
judgment, arbitration or settlement.

21.      INDEMNIFICATION

(a) The Holding Company shall provide Executive (including her heirs,  executors
and  administrators)  with coverage  under a standard  directors'  and officers'
liability insurance policy at its expense and shall indemnify Executive (and her
heirs,  executors and  administrators)  to the fullest  extent  permitted  under
Delaware law against all expenses and liabilities  reasonably incurred by her in
connection  with or arising out of any action,  suit or  proceeding in which she
may be  involved  by reason of her  having  been a  director  or  officer of the
Holding Company (whether or not she continues to be a director or officer at the
time of incurring such expenses or  liabilities);  such expenses and liabilities
to include, but not to be limited to, judgments, court costs and attorneys' fees
and the cost of reasonable settlements.

                                     - 14 -

<PAGE>

(b) Any payments  made to  Executive  pursuant to this Section 21 are subject to
and conditioned  upon  compliance  with 12 U.S.C.  Section 1828(k) and 12 C.F.R.
Part 359 and any rules or regulations promulgated thereunder.

22.      SUCCESSOR TO THE HOLDING COMPANY

The Holding  Company shall require any successor or assignee,  whether direct or
indirect,  by  purchase,   merger,   consolidation  or  otherwise,   to  all  or
substantially all the business or assets of the Bank or the Holding Company,  to
expressly and unconditionally  assume and agree to perform the Holding Company's
obligations under this Agreement, in the same manner and to the same extent that
the Holding  Company  would be required to perform such  obligations  if no such
succession or assignment had taken place.

                                   SIGNATURES

         IN WITNESS  WHEREOF,  Berkshire  Hills  Bancorp,  Inc.  has caused this
Agreement  to be  executed  and its  seal to be  affixed  hereunto  by its  duly
authorized  officer and Executive has signed this Agreement,  on the 16th day of
August, 2000.

ATTEST:                               BERKSHIRE HILLS BANCORP, INC.

/s/Rose A. Borotto                  By:        /s/James A. Cunningham, Jr.
-------------------                            ---------------------------------
Rose A. Borotto                                James A. Cunningham, Jr.
Corporate Secretary                            For the Entire Board of Directors

                  [SEAL]

WITNESS:                              EXECUTIVE

/s/Rose A. Borotto                     By:     /s/Susan M. Santora
--------------------                           -------------------
Rose A. Borotto                                Susan M. Santora
Corporate Secretary

                                     - 15 -

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