Document:

<PAGE>

                                                                    Exhibit 10.3

                              ENGAGEMENT AGREEMENT

          THIS AGREEMENT made as of January 1, 2002 (the effective date), by and
between ON Technology Geschaftsfuhrungs GmbH, a German corporation (the
"Company"), and Mr. Harald Faulhaber (the "VP EMEA Operations").

          WHEREAS, the VP EMEA Operations has been a Sales Director of the
Company in the past, and the VP EMEA Operations and the Company now desire to
enter into a new relationship.

          NOW THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, and for good and valuable consideration the
parties agree as follows:

          1.   New Engagement. The prior relationship between the parties is
     hereby terminated. The Company hereby re-engages the VP EMEA Operations as
     Geschaftsfuhrer, and the VP EMEA Operations hereby accepts such engagement
     by the Company, upon the terms and conditions hereinafter set forth.

          2.   Management Duties

               2.1. The VP EMEA Operations shall be entitled and obliged to
          represent the Company and to manage the business in accordance with
          all applicable laws and statutory regulations, the articles of
          incorporation, the rules of administration, if any, as well as the
          provisions hereof, and shall be bound by shareholders' resolutions.

               2.2. The VP EMEA Operations shall bear particular responsibility
          for all operative activities in Europe, Australia, New Zealand, The
          Middle East, Far East, and Africa.

               2.3. The VP EMEA Operations shall in all situations obtain the
          prior consent of the Company's Stockholders for matters exceeding the
          day-to-day running of the business of the Company, including those
          examples listed in Appendix A1 hereto.

               2.3. The VP EMEA Operations shall report to the President of ON
          Technology Corporation ("ON Technology"), a Delaware USA corporation
          and the indirect parent of the Company.

               2.5. The VP EMEA Operations shall execute his office with the
          care and diligence of a prudent businessman and shall faithfully
          perform the duties entrusted to him by law and contract. He shall be
          obligated to serve and promote the business of the Company to the best
          of his ability, for the purpose thereof he shall place at the
          disposition of the Company all of his knowledge and ability as well as
          his entire working capacity, and agrees not to accept or perform full
          or part time employment or consulting services, or other "freelance"
          activities for any other business or non-profit entity, unless
          otherwise approved in writing by the Company's stockholders. The PC
          shop, which is legally owned by the VP EMEA Operations, is approved by
          the stockholders. The VP EMEA Operations may, however, render general
          business advice to third parties without remuneration or in connection
          with the VP EMEA Operations investment activities so long as such
          activity does not; (a) constitute employment by another company, (b)
          violate the VP EMEA Operations Non-Solicitation obligations set forth
          in Section 9 herein; or (c) interfere with the VP EMEA Operations's
          said full time and best efforts obligations to the Company.

          3.   Term. The VP EMEA Operations's term of engagement (the
     "Engagement Period") under this agreement is open-ended.

          4.   Compensation. The Company agrees to pay the VP EMEA Operations as
     follows in consideration for his services hereunder:

                                       1

<PAGE>

               4.1. Base Salary. Company hereby agrees to pay the VP EMEA
          Operations an annual salary of one hundred sixty six thousand six
          hundred sixty seven Euros ((euro) 166.667) per year beginning as of
          the Effective Date (the "Base Salary") in accordance with Company's
          present payroll policies.

               4.2. Incentive Compensation. In addition, the VP EMEA Operations
          will be eligible for an annual incentive bonus, payable under the
          terms of the executive compensation plan of the ON Technology (such
          plan described in Schedule 2 hereof), of one hundred sixty six
          thousand six hundred sixty seven Euros ((euro) 166.667), at 100% of
          achievement of objectives. The objectives for each year will be agreed
          upon at the beginning of each year.

          5.   Other Benefits. The VP EMEA Operations shall also be entitled to
     the following benefits of the Company.

               5.1. Vacations. The VP EMEA Operations shall be entitled to 30
          days' paid vacation time per year.

               5.2. Additional Compensation and Benefits. The VP EMEA Operations
          shall receive the following additional benefits; a leased company car
          of his own choice up to a total leasing sum of (euro) 2000 net per
          month during his employment with the Company. The VP EMEA Operations
          may also use this vehicle for private purposes. Operating and
          maintenance expenses will be paid by the company with the exception of
          costs of gasoline used for vacation trips. The vehicle may only be
          used by a third party upon prior approval of the Company. The VP EMEA
          Operations is responsible for paying the tax imposed on the monetary
          advantage of the private use of the vehicle Upon termination of this
          Agreement for any reason, the VP EMEA shall return the company car to
          the Company immediately upon the date of termination. For purposes of
          clarification: (i) in the event this Agreement is terminated by the
          Company pursuant to the provisions of Section 6.1(d), the VP EMEA
          Operations shall be entitled to use the company car as described in
          this Section 5.2 during the one hundred eighty day notice period
          described in Section 6.1(d); and (ii) in the event this Agreement is
          terminated by the VP EMEA Operations pursuant to the provisions of
          Section 6.2(b), the VP EMEA Operations shall be entitled to use the
          company car as described in this Section 5.2 during the one hundred
          eighty day notice period described in Section 6.2(b), provided,
          however, that the VP EMEA Operations shall be responsible for all
          operating and maintenance expenses incurred during such 180-day
          period.

               The VP EMEA Operations will also be entitled to such additional
          compensation and benefits as the Company may award from time to time
          at its sole discretion.

               5.3. Expenses. The VP EMEA Operations shall be entitled to
          reimbursement, upon substantiation thereof in accordance with the
          Company's standard procedure, for all reasonable expenses in the
          ordinary course of business, and incurred by the VP EMEA Operations in
          the furtherance of the Company's business.

               5.4. Corporation Benefits. The VP EMEA Operations shall also
          receive the benefits provided to an officer of ON Technology.

          6.   Termination. Termination may occur as follows:

               6.1. By the Company. The Company may terminate the VP EMEA
          Operations's engagement as follows:

               (a)  Without notice for "cause" as defined in 6.3 herein;
               (b)  Upon death of the VP EMEA Operations;
               (c)  Upon any disability that prevents the VP EMEA Operations
                    from rendering services to the Company consistent with his
                    duties for a period of six (6) consecutive months or more;
                    or
               (d)  Upon one hundred eighty (180) days advance notice without
                    "cause" and subject to any payment due under (S) 6.4 herein.

                                       2

<PAGE>

               6.2. By the VP EMEA Operations. The VP EMEA Operations may
          terminate his engagement by the Company as follows:

               (a)  At any time following a material breach hereof that remains
                    uncured by the Company, and which the Company fails to cure
                    within thirty days after written notice; or
               (b)  Upon one hundred eighty (180) days advanced notice.

               6.3. Cause. For the purposes of this Section "cause" means:

               (a)  Participating in any crime or similar offence involving
                    money or other property of the Company;
               (b)  Conviction of a felony;
               (c)  Continuing failure or refusal to perform directives,
                    consistent with the VP EMEA Operations's duties hereunder
                    after (i) notice that such failure will be deemed to
                    constitute cause for termination and (ii) a reasonable
                    opportunity to cure such failure or refusal;
               (d)  Failure to adhere to material written Company policies; or
               (e)  Knowing and Material violation of Section 7, 8 or 9 herein.

               6.4. Payments Upon Termination. All forms of compensation payable
          to the VP EMEA Operations will cease effective as of the date of any
          termination under (S)(S) 6.1 (a) herein. However, the Company shall
          pay the VP EMEA Operations the equivalent of six months worth of its
          full compensation (defined as Base Salary, average Incentive
          Compensation and Other Benefits) as severance pay in the event of
          termination pursuant to (S) 6.1(c)-(d). In event of termination
          pursuant to (S) 6.1 (b), the Company shall pay the VP EMEA Operations
          the equivalent of six months worth of its full compensation (defined
          as Base Salary, average Incentive Compensation and Other Benefits) as
          severance pay, such severance pay being paid directly to the VP EMEA
          Operations's Spouse or to the VP EMEA Operations's children, or their
          legal Guardian, in the event that the VP EMEA Operations's Spouse does
          not outlive him.

               6.5. Return of Media. In the event of termination the VP EMEA
          Operations shall deliver all Media (as defined for the purposes of
          (S)7 herein) to the Company immediately, and shall destroy any
          reproductions thereof not delivered to the Company.

               6.6. Notice of termination of the VP EMEA Operations's
          appointment as Geschaftsfuhrer shall be construed as notice of
          termination of this Agreement to take effect at the earliest possible
          time.

               6.7. Survival of Obligations. The obligations of the VP EMEA
          Operations under (S)(S)7, 8, 9 & 11 shall survive termination hereof.

          7.   Protection of Propriety Information.

               7.1. For the purposes of this and the following section, the term
          "Company" shall include the Company as previously defined, plus any
          parent or subsidiary thereof. "Proprietary Information" is defined for
          the purposes of this and the following section as any and all
          information (in whole or in part) that the VP EMEA Operations will in
          future make, conceive, reduce to practice, fix in tangible form, or
          acquire while employed by the Company (either solely or jointly with
          others), and that are within the scope of his engagement hereunder or
          related thereto, or in which property rights have been assigned or
          otherwise conveyed to the Company, which information has commercial
          value in the Company's business, and is treated by the Company as
          confidential (whether or not marked "Confidential" or "Proprietary").
          The development and acquisition of the Proprietary Information are the
          result of great effort and expense on the part of the Company and are
          critical to the success and survival of the Company.

               7.2. By way of illustration but not limitation, Proprietary
          Information includes (a) trade secrets; (b) inventions, processes,
          designs, including patents or patent applications thereon; (c)
          confidential research or development information; (d) works of
          authorship, including copyrights therefore; or (e) mask works.
          Proprietary Information also includes data formulas, computer

                                       3

<PAGE>

          programs, documentation and software, know-how, improvements,
          discoveries, developments, designs, algorithms, techniques,
          strategies, new products, marketing plans, forecasts, unpublished
          financial statements, contract forms, budgets, projections, licences
          prices, costs, customer and supplier lists and employee rosters, and
          any other information of a similar nature not available to the public,
          whether oral or written, in drawings or in machine readable form.

               7.3. "Intellectual Property Rights" is defined for the purposes
          of this and the following section as all patent, copyright, trade
          secret, and any other rights associated with the Proprietary
          Information or the Inventions.

               7.4. "Media" is defined for the purposes of this and the
          following section as all documents, notes, drawings, specifications,
          data, computer disks, cassettes, and any tangible medium of expression
          pertaining to the VP EMEA Operations's work hereunder or containing
          any Proprietary Information.

               7.5. The VP EMEA Operations recognizes that his relationship with
          the Company is one of high trust and confidence by reason to access to
          and contact with the trade secrets and other confidential information
          of the Company in technical and commercial matters, and also with
          respect to such secrets and information of the Company's customers,
          vendors and other parties to whom the Company may owe an obligation of
          confidence. The VP EMEA Operations therefore agrees that the VP EMEA
          Operations shall at all times during the VP EMEA Operations's
          engagement and thereafter protect the Proprietary Information and
          other confidential information of the Company or that belonging to
          third parties who may have disclosed such information to the Company
          under an obligation of confidentiality; not disclose to others or use
          for the VP EMEA Operations own benefit or for the benefit of any
          person other than the Company any Proprietary Information (whether or
          not learned, obtained or developed solely by the VP EMEA Operations or
          jointly with others).

               7.6. The Company is a work-for-hire author for copyright law
          purposes of all computer programs, databases ore other writings made
          hereunder, and All Proprietary Information and the Intellectual
          Property Rights are and shall remain the sole property of the Company.
          But the Company may nonetheless request an assignment in lieu or as a
          supplement of such rights. The VP EMEA Operations hereby assigns to
          the Company, now and in advance, any Intellectual Property rights that
          the VP EMEA Operations may have now or shall acquire later.

          8.   Inventions, etc.

               8.1. "Inventions" shall mean all Proprietary Information made,
          conceived, reduced to practice or learned by the VP EMEA Operations,
          either alone or jointly with others, during the period that he is
          employed by the Company, whether or not during normal working hours or
          on Company premises, that is related to or useful in the business of
          the Company and results from tasks assigned to him by the Company, or
          from the use of premises or equipment owned, leased or contracted for
          by the Company.

               8.2. The VP EMEA Operations shall disclose promptly all
          Inventions to the Company, or to any persons designated by it.

               8.3. The VP EMEA Operations agrees that all Intellectual Property
          Rights to the Inventions shall become the sole property of the
          Company. The VP EMEA Operations hereby assigns to the Company any
          rights that he may have or quire in the Inventions. The VP EMEA
          Operations further agrees as to the Inventions to assist the Company
          in every proper way, at the Company's expense, to secure or enforce
          from time to time all Intellectual Property Rights in any and all
          countries and jurisdictions. These services shall include, but not be
          limited to, preparing and executing any and all documents needed to
          secure or enforce the Intellectual Property Rights, together with any
          assignments thereof, and the giving of testimony, in court or
          otherwise, when needed. The VP EMEA Operations's obligation under this
          section shall survive termination hereof, but the Company shall
          compensate the VP EMEA Operations at a reasonable rate for all time
          spent at the Company's request.

                                       4

<PAGE>

                    8.4. In the event that the Company is unable, after
               reasonable effort, to secure the VP EMEA Operations's signature
               on any document needed to secure or enforce the Intellectual
               Property Rights, whether because or physical or mental
               incapacity, or any other reason, the VP EMEA Operations hereby
               designates and appoints the Company and its duly authorized
               officers and agents irrevocably as the VP EMEA Operations's
               agents and attorneys-in-fact to act for and in the VP EMEA
               Operations's behalf and stead, and to do all other lawfully
               permitted act to further prosecution and issuance of the
               Intellectual Property Rights with the same legal force and effect
               as if executed by the VP EMEA Operations.

               9.   Non-Solicitation.

                    9.1. Until the later to occur of (1) the three-year
               anniversary of the date hereof or (2) a period of twelve (12)
               months following the termination, for any reason, of the VP EMEA
               Operations's engagement by the Company, the VP EMEA Operations
               will not, without the Company's prior written approval, directly
               or indirectly:

                    (a)   Recruit, solicit or knowingly induce, or attempt to
                          induce, any employee or consultant of the Company to
                          terminate his employment or consulting relationship
                          with, or otherwise cease his relationship with, the
                          Company; or
                    (b)   Solicit, divert or take away, or attempt to do so, the
                          business or patronage of any clients, customers or
                          accounts, or prospective clients, customers or
                          accounts, of the Company (defined, for purposes
                          hereof, as any individual or entity whose business is
                          solicited by the Company, proposed to be solicited by
                          the Company, or who approaches the Company, with
                          respect to possibly becoming a client, costumer, or
                          account during the Engagement Period or Initial
                          Engagement Period).

                    9.2.  If any restriction set forth in this Section is found
               by any court of competent jurisdiction to be unenforceable
               because it covers too long a period of time, too great a range of
               activities, or too broad a geographic area, it shall be narrowed
               to cover the maximum period of time, range of activities or
               geographic areas that may be enforceable.

                    9.3.  The VP EMEA Operations acknowledges that the
               restrictions contained in this Section are necessary for the
               protection of the business and goodwill of the Company and are
               considered by the VP EMEA Operations to be reasonable for this
               purpose. The VP EMEA Operations agrees that any breach of this
               Section will cause the Company substantial and irrevocable damage
               and, therefore, in the event of any such breach, in addition to
               such other remedies which may be available, the Company will have
               the right to seek specific performance and injunctive relief.

     10. Former and Other Employment. The VP EMEA Operations represents that
his performance hereunder does not and will not breach any prior agreement with
or commitment to any third party to (i) keep proprietary information acquired by
him in confidence or trust, or (ii) refrain form competing, directly or
indirectly, with the business of such other party. The VP EMEA Operations
covenants that he shall not enter into any agreement, either written or oral
that conflicts herewith. The VP EMEA Operations represents, as part of the
consideration for this Agreement, that the VP EMEA Operations has not brought
and shall not bring to the Company any materials or documents of a former or
other employer or client that are not generally available to the public unless
he has first obtained express written authorization to do so.

     11.  Publicity; Use of Marks. The VP EMEA Operations shall not at any time
use the Company's name or any the Company trademark(s) or trade name(s) in any
advertising or publicity without the prior written consent of the company.

     12.  Miscellaneous.

                    12.1. Entire Agreement. This Agreement constitutes the
               entire agreement between the parties with respect to the matters
               herein, supersedes all prior understandings and agreements,
               whether written or oral, and may not be amended or modified
               except by any instrument in writing signed by both parties
               hereto.

                    12.2. Successors and Assigns. This Agreement is binding upon
               and inures to the benefit of both parties and their respective
               successors and assigns, including any corporation with which or

                                      5

<PAGE>

               into which the Company may be merged or which may succeed to its
               assets or business, although the obligations of the VP EMEA
               Operations are personal and may be performed only by him.

                    12.3. Severability. If any provision hereof is held invalid,
               illegal of unenforceable, that provision shall be construed so as
               to most closely reflect the original intent of the parties, but
               still be enforceable, and the remaining provisions shall continue
               in full force and effect and shall not be affected or impaired
               thereby.

                    12.4. Captions. Captions have been inserted herein solely
               for convenience of references, and in no way define, limit or
               affect the scope or substance of any provision hereof.

                    12.5. Notices. Any notice hereunder shall be in writing and
               delivered by hand or sent by Federal Express, registered or
               certified mail, postage prepaid, addressed as follows or to such
               other address of which a given party may have given notice:

                    To the Company:  ON Technology Geschaftsfuhrungs GmbH - ON
                                      Technology Corp.
                                     880 Winter Street
                                     Waltham, MA UAA 02451
                                     Attn.: Steven Wasserman, Director

                    With a Copy to:  ON Technology's Legal Department
                                     (Same address)

                    To the VP EMEA   Harald Faulhaber
                    Operations       Forststr. 27
                                     82008 Unterhaching, Germany.

                    12.6. Injunctive Relief. The VP EMEA Operations acknowledges
               and agrees that the extent of damage to the Company in the event
               of a breach by the VP EMEA Operations of any of the covenants
               contained herein would be difficult or impossible to ascertain,
               and that there would be no adequate remedy at law available to
               the Company in the such event. The VP EMEA Operations agrees
               therefore that the Company shall be entitled to enforce any or
               all of the covenants contained herein by injunctive or other
               equitable relief in addition to receiving damages or other relief
               to which the Company may be entitled.

                    12.7. Liability. Because of the special German legal term in
               this section the German text is the leading one.
               (1) Die Gesellschaft ist verpflichtet, durch die
               Gesellschafterversammlung jahrlich, spatestens zum Zeitpunkt der
               Feststellung des Jahresabschlusses, einen Beschluss uber die
               Entlastung des Geschaftsfuhrers fur die vorangegangene Tatigkeit
               zu fassen.

               The Company will, every year at the latest at the time of
               accepting the annual accounts, through the annual shareholders
               meeting or through a shareholder resolution, hold the
               Geschaftsfuhrer harmless for his activities for the time period
               covered by such resolution.

               (2) Die Haftung des Geschaftsfuhrers gegenuber der Gesellschaft
               ist auf vorsatzliches und grob fahrlassiges Verhalten beschrankt.

               The liability of the Geschaftsfuhrer is limited to wilful
               fraudulent or negligent behaviour and to acts of gross negligence

               (3) Der Geschaftsfuhrer haftet gegenuber der Gesellschaft fur
               alle Schaden nur bis zu einem Hochstbetrag von Euro 25.000. Diese
               Beschrankung gilt nicht bei Schaden durch Vorsatz oder grobe
               Fahrlassigkeit

               The GF liability to the company for all damages is limited to a
               maximum of Euro 25.000. This limitation shall not apply in the
               event the damages are caused by the GF's wilful or fraudulent
               acts or if caused by the GF's gross negligence.

                                       6

<PAGE>

               (4) Der Geschaftsfuhrer haftet gegenuber der Gesellschaft nicht,
               sofern und soweit er auf ausdruckliche Weisung der Gesellschafter
               tatig geworden ist.

               The GF carries has no liability to the company in instances
               arising from matters where he acted upon the instruction, written
               or verbal, of the shareholders

                    12.8. Governing Law and Jurisdiction. This Agreement, and
               all transactions hereunder shall be construed, interpreted and
               enforced in accordance with the law and in the courts of the
               Republic of Germany. The VP EMEA Operations agrees to submit to
               the jurisdiction of the said courts for the purposes of suit
               therein.

                    12.9. Liability Insurance and Indemnification. During the
               term of this Agreement, ON Technology shall ensure that the VP
               EMEA Operations shall be covered under ON Technology's Officer
               and Director Errors and Omissions Insurance Policy. In addition,
               ON Technology hereby confirms that during the VP EMEA Operations'
               term as an officer of ON Technology, the VP EMEA Operations shall
               be indemnified by ON Technology to the full extent permitted
               under ON Technology's Certificate of Incorporation and By-Laws
               and the General Corporate Law of the State of Delaware.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, intending
the same to take effect as a sealed instrument, as of the date first written
above.

ON Technology Geschaftsfuhrungs GmbH        VP EMEA Operations

By:_________________________________        _______________________________
Name: Ian  Mark Chapman                     Harald Faulhaber
Title: Geschaftsfuhrer

ON Technology Geschaftsfuhrungs GmbH

By:_________________________________
Name: Steven Wasserman
Title: Geschaftsfuhrer of
Wilma 96 Vermogensverwaltungs GmbH
as shareholder of
ON Technology Geschaftsfuhrungs GmbH

                                       7

<PAGE>

Schedule 1 to Engagement Agreement

between ON Technology Geschaftsfuhrungs GmbH

and

Harald Faulhaber

The VP EMEA Operations shall in all situations obtain the prior consent of the
Company's stockholders for matters exceeding the day-to-day running of the
business of the Company including those examples listed Appendix A1 attached
hereto.

Schedule 2 to Engagement Agreement

between ON Technology Geschaftsfuhrungs GmbH

and

Harald Faulhaber

The ON Technology Corporation executive compensation plan (designated as "ON
Technology Corporation Fiscal Year 2001 commission plan is attached as Appendix
A2 attached hereto.

                                       8

<PAGE>

Appendix A1

The follow matters shall be deemed to exceed the day-to-day business of the ON
Technology Europe GmbH % Co. KG and its related entities (the "Company"):

     1.   Adoption of a yearly budget;
     2.   Approval of any measures that exceeds the yearly budget;
     3.   Sale or lease of a substantial amount of the Company's assets;
     4.   Acquisition of a substantial amount of the assets or stock or another
          company;
     5.   Entering into, altering or terminating a joint venture, partnership or
          profit sharing agreement with another company;
     6.   Issuance of Company Stock;
     7.   Establishment of a new line of business of the Company or terminating
          of substantially altering and existing one;
     8.   Signing, altering or terminating any licence agreement outside of the
          ordinary course of business of the Company;
     9.   Purchase, sale or encumbrance of real estate of any value or of other
          fixed asset that exceeds (euro) 100,000 in value;
     10.  Standing as a surety, giving a guarantee, accepting joint or several
          liability for third parties, or granting pledge or other collateral
          for third parties other than the discounting of bills of exchange in
          the ordinary course of business of the Company;
     11.  Granting a loan or accepting deferred payment terms or taking out a
          loan outside of the ordinary course of business or budget of the
          company;
     12.  Waiver or subordination of any claim outside the ordinary course of
          business or budget of the Company;
     13.  Hiring of personnel other than through the standard personnel policies
          of the Company;
     14.  Giving pension promises

                                        9

<PAGE>

Appendix A2

                     THIS SCHEDULE IS INTENTIALLY LEFT BLANK

                                       10<PAGE>

                                                                    Exhibit 10.1

                              EMPLOYMENT AGREEMENT

     AGREEMENT made and entered into as of the 9th day of July, 2002 by and
between Beverly National Corporation, a Massachusetts corporation having its
principal place of business at 240 Cabot Street in Beverly, Massachusetts 01915
("Company"), and Donat Fournier with a principal residence of 17 Homestead Road
in West Simsbury, Connecticut 06092-2227 (the "Employee").

                         W I T N E S S E T H   T H A T:

     WHEREAS the Company wishes to employ the Employee as its President and as
the President of The Beverly National Bank, a wholly-owned subsidiary of the
Company (the "Bank"); and

     WHEREAS the Employee desires to be so employed.

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

     1. Term. The period of employment of the Employee under this Agreement
shall be deemed to commence as of August 1, 2002 and shall continue in effect
through July 31, 2005. On July 31, 2005 and on each subsequent anniversary
thereof, the term of this Agreement shall automatically extend for an additional
year unless, not later than the proceeding January 31st either party notifies
the other by written notice of his or its intent not to extend the same.
Notwithstanding the foregoing provisions of this Section 1, his employment shall
terminate in any event upon the Employee's attainment of age sixty-six (66) or,
if earlier, the normal retirement age provided in the Bank's retirement plan,
and the Employee may resign from, and terminate his employment by, the Company
at any time upon ninety (90) days prior written notice to the Company.

     2. Capacity.

        (a) At all times during the term hereof, the Company shall employ the
Employee as its President and Chief Executive Officer. In such capacity, the
Employee shall be assigned only such duties and tasks as are appropriate for a
person in the position of President and Chief Executive Officer, and he shall be
subject to the supervision of the Board of Directors of the Company. The Company
shall employee the Employee on full-time basis, and (subject to the last
sentence of this paragraph) the Employee shall devote his full time and
professional efforts to the performance of his duties as President of the

                                       1

<PAGE>

Company and any office he may hold in each of its subsidiaries. It is the
intention of the Company and the Employee that the Employee shall have full
discretionary authority to control the day-to-day operations of the Company and
each subsidiary of the Company and to incur such obligations on behalf of such
entities as may be required in the ordinary course of their business. The
Company encourages participation by the Employee on community boards and
committees and in activities generally considered to be in the public interest,
but the Company shall have the right to approve the Employee's participation on
such other boards and committees as may conflict with the Company's own business
or demands upon the Employee's time.

        (b) During the period of his employment by the Company the Employee
agrees to serve as President and Chief Executive officer of the Bank without
additional compensation, except for reimbursement for all reasonable
out-of-pocket expenses. In the event that during the term of his employment the
Employee is terminated as President and Chief Executive Officer of the Bank
involuntarily without Cause, as hereinafter defined (except that for such
purpose such definition shall refer to the Bank rather than the Company), the
Employee shall have the right to resign as President of the Company for Good
Reason, in which case he shall be entitled to the benefits set forth in Section
8(d).

        (c) The Company represents that Employee has been duly elected a
director of the Company and of the Bank effective August 1, 2002.

        (d) The Company agrees to propose to its shareholders at each Annual
Meeting of Shareholders during the term hereof for which he is otherwise
eligible, the reelection of the Employee as a Director of the Company, to vote
for the reelection of the Employee as a Director of the Bank and to cause
Employee to be employed as the President and Chief Executive officer of the
Company and the Bank.

     3. Compensation and Benefits.

        (a) Base Compensation. The Company shall pay to the Employee in equal
monthly installments a base annual salary in the amount of Two Hundred Thousand
Dollars ($200,000.00) Dollars. The base annual salary of the Employee shall be
adjusted upward from time to time in the sole discretion of the Company, in
which case such increased amount shall thereafter constitute the Employee's base
annual salary. It is the intention of the Company to compensate the Employee at
a level at least comparable to the compensation of persons employed in the
position of President and Chief Executive Officer of companies engaged in new
England in activities substantially similar to those of the Company and having
approximately the same combined gross assets as the Company and its
subsidiaries.

                                       2

<PAGE>

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

     4. Non-Competition. At all times during which the Employee is employed by
the Company under this Agreement and for a period of one (1) year thereafter,
the Employee shall not, directly or indirectly, as an employee of any person or
entity (whether or not engaged in business for profit), individual proprietor,
partner, stockholder, director, officer, joint venturer, investor, lender or in
any other capacity whatever (otherwise than as holder of less than ten (10)
percent of any securities publicly traded in the market) compete within (i) the
City of Beverly, Massachusetts, or the Towns of Hamilton or Manchester,
Massachusetts, or (ii) municipalities contiguous to the City of Beverly,
Massachusetts, the Town of Hamilton, Massachusetts, or the Town of Manchester,
Massachusetts or (iii) any other Cities or Towns in which the Bank may locate
during the term of this Agreement, with the business of the Company or any of
its subsidiaries, as such businesses are constituted at any time during the term
of this Agreement. For purposes of this Section 4, the Employee's ownership of
or employment by an institution doing business in Beverly, Massachusetts,
Hamilton, Massachusetts, Manchester, Massachusetts, in municipalities contiguous
to Beverly, Hamilton or Manchester, Massachusetts or in such other Cities or
Towns, but having its principal place of business elsewhere, shall not
constitute competition hereunder so long as the Employee does not solicit
business in Beverly, Hamilton, or Manchester, in such contiguous municipalities,
or in such other Cities or Towns, as the case may be.

     5. No Solicitation of Employees. At all times during which the Employee is
employed under this Agreement and for a period of one (1) year thereafter, the
Employee shall not, directly or indirectly, employ, attempt to employ, recruit
or otherwise solicit, induce or influence to leave his employment any employee
of the Company or its subsidiaries. This Section shall not apply to solicitation
by a future employer of Employee who takes such actions without the assistance
or consent of the Employee.

     6. No Disclosure of Information. The Employee shall not at any time
divulge, use, furnish, disclose or make accessible to anyone other than the
Company or any of its subsidiaries any knowledge of information with respect to
confidential or secret data, procedures or techniques of the Company or any of

                                       3

<PAGE>

its subsidiaries, provided, however, that nothing in this Section 6 shall
prevent the disclosure by the Employee of any such information which at any time
comes in to the public domain other than as a result of the violation of the
terms of this Section 6 by the Employee or which is otherwise lawfully acquired
by the Employee.

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

        (a) The expiration of the term hereof as provided in Section 1 hereof or
as from time to time extended;

        (b) The Employee's resignation from the Company or the death or
disability of the Employee;

        (c) Upon the election of the Company, for Cause, as hereinafter defined,
after ten (10) business days' prior written notice to the Employee and by an
affirmative vote of not less than three fourths (3/4) of the entire Board of the
Company at a meeting held for such purpose at which the Employee shall be
granted an opportunity to be heard, for Cause, as hereinafter defined. For
purposes of this Agreement, the Company shall be deemed to have "Cause" to
terminate the employment of the Employee under this Agreement only if:

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

            (ii) The Employee shall commit an act of fraud materially evidencing
bad faith toward the Company or any of its subsidiaries;

            (iii) The Employee fails (after demand and an opportunity to correct
as set forth below) to substantially perform the duties reasonably assigned to
him by the Board of Directors of the Company which are normal and customary for
an Employee in a similar position in a substantially similar company in
Massachusetts (other than any such failure resulting from the Employee's
incapacity due to physical or mental illness). The Board shall first make a
written demand for substantial performance to Employee by the Board of Directors
of the Company. Such demand shall specifically identify the objective and
reasonable

                                       4

<PAGE>

standards which such board believes that Employee has not substantially
performed such duties. Such demand shall also specify a reasonable time
forEmployee to demonstrate objectively to the Board of Directors of the Company
that he has substantially performed the duties reasonably assigned to him.

        (d) At the election of the Employee, for Good Reason, as hereinafter
defined, after ten (10) business days written notice of the basis thereof to the
Company if during such period the Company shall not cure the basis thereof. For
the purpose of this Agreement, the Employee shall be deemed to have "Good
Reason" to terminate his employment only if the Company is in material breach of
this Agreement or any other written agreement the Company may have with the
Employee, or if the Employee resigns as President of the Company as provided in
Subsection 2b hereof.

        (e) Upon the election of the Company, without Cause (as hereinabove
defined), after ten (10) business days prior written notice to the Employee and
by the affirmative vote of not less than a majority of the entire Board of the
Company at a meeting held for such purposes at which the Employee shall be
granted an opportunity to be heard, for any reason other than Cause.

     8. Payments Upon Termination of Employment.

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

        (b) Payments Upon Disability. If at any time during the term of this
Agreement, in the opinion of a physician mutually agreeable to the Company and
the Employee, the Employee shall be determined to be unable to render services
hereunder due to physical or mental illness or accident, in addition to all
other benefits to which he or his personal representatives may be entitled, the
Employee shall be entitled to receive all benefits payable to him under the
Bank's long-term disability income plan. Notwithstanding the above, the Employee
will be deemed to be disabled if he has been unable for one

                                       5

<PAGE>

hundred eighty (180) consecutive days to render services required to be rendered
by him during the term hereof.

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

        (d) Payments Upon Termination Without Cause or for Good Reason. If at
any time during the term of this Agreement (as provided in Section 1 hereof) the
employment of the Employee is terminated (i) voluntarily for Good Reason or (ii)
involuntarily for any reason except for termination for Cause under Section 7c,
as heretofore defined, then in such case:

            (i) Within five days after such termination, the Company shall pay
to the Employee (or to his personal representative in case of death), the sum of
all accrued and unpaid compensation through the date of such termination, plus a
lump sum amount equal to twelve months' base annual salary as in effect as of
the date of such termination.

            (ii) The Company shall maintain or cause to be maintained in effect
for the Employee for a period of twelve months following such termination, at
the Company's sole expense, all group insurance (including life, health,
accident and disability insurance) and all other employee benefit plans,
programs or arrangements (other than the Bank's retirement plan, the Bank's
profit-sharing plan, and the Company's employee stock ownership plan), in which
the Employee was participating at any time during the twelve (12) months
preceding such termination.

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

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

                                       6

<PAGE>

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

     9. Payments upon Termination for Cause. If at any time during the term of
this Agreement, Employee is terminated for Cause pursuant to Section 7(c)
hereof, the Company shall pay Employee, to the extent it has not been previously
paid, an amount equal to Employee's full base salary through the date of
Employee's termination of employment at the rate in effect at that time and the
Company shall have no further obligation to Employee under this Agreement.

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

         (a) To the Company:  Beverly National Corporation
                              240 Cabot Street
                              Beverly, Massachusetts 01915
                              Attention:  Treasurer

         (b) To the Employee: Mr. Donat Fournier
                              17 Homestead Road
                              West Simsbury, CT 06092-2227

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

     10. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in Boston,
Massachusetts, in accordance with the rules of the American Arbitration
Association then in effect. Notwithstanding the pendency of any such dispute or
controversy, the Company will pay the Employee promptly an amount equal to his
full compensation in effect when the notice giving rise to the dispute was

                                       7

<PAGE>

given (including, but not limited to, base salary) and shall provide or cause to
be provided to the Employee all compensation, benefits and insurance plans in
which he was participating when the notice giving rise to the dispute was given,
until the dispute is finally resolved. Amounts paid under this Section 10 are in
addition to all other amounts due under this Agreement and shall not be offset
against or reduce any other amounts due under this Agreement. Judgment may be
entered on the arbitrator's award in any court having jurisdiction; provided,
however, that the Employee shall be entitled to seek specific performance of his
right to be paid as specified in this Section 10.

     11. Miscellaneous.

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

         (b) Legal Fees. The Company shall pay to the Employee all reasonable
legal fees and expenses incurred by him in contesting or disputing any
termination of this Agreement or in seeking to obtain or enforce any right or
benefit provided by this Agreement, provided that the final resolution of such
matter principally is in Employee's favor.

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

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

         (e) Binding Effect; Non-Assignability. This Agreement shall be binding
upon the Company and inure to the benefit of the Company and its successors.
Neither this Agreement nor any rights arising hereunder may be assigned or
pledged by the Employee during his lifetime. This Agreement shall inure to the
benefit of and be enforceable by the Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

                                       8

<PAGE>

         (f) Time is of the Essence. It is expressly understood by the Obligors
that time is of the essence in performance of all terms and conditions of this
Agreement.

         (g) Duplicate Originals. Two or more duplicate originals of this
Agreement may be signed by the parties hereto, each of which shall constitute
one and the same instrument.

         (h) Captions. The caption of the sections of this Agreement are for the
purpose of convenience only and are not intended to be a part of this Agreement
and shall not be deemed to modify, explain, enlarge or restate any of the
provisions in this Agreement.

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

ATTEST                                  BEVERLY NATIONAL CORPORATION

/s/ Paul Germano                        By: /s/ Alice B. Griffin
-----------------------------               ------------------------------------
                                            Its Duly Authorized Representative

                                        /s/ Donat Fournier
                                        ----------------------------------------
                                        Donat Fournier, Individually

                                       9

<PAGE>

                                    EXHIBIT A
                                       TO
                              EMPLOYMENT AGREEMENT
                                 BY AND BETWEEN
                          BEVERLY NATIONAL CORPORATION
                                       AND
                                 DONAT FOURNIER
                               DATED: July 9, 2002

1.   Automobile - The Employee shall be entitled to the exclusive use of an
     automobile the value of which shall not be unreasonable in view of the
     Employee's position consistent with Company policy. The automobile may
     be replaced every three (3) years or seventy thousand (70,000) miles,
     whichever occurs first.

2.   Vacation - The Employee shall be entitled to five (5) weeks paid
     vacation in each calendar year during the term of the Agreement. A
     vacation period should not be for more than four weeks or less than two
     weeks. The Employee shall also be entitled to all paid holidays
     recognized by the Bank.

3.   Club Memberships - Upon concurrence of the Board of Directors of the
     Company the Employee shall be entitled to reimbursement for club
     membership fees and dues at a local country club of his choice and
     consistent with Internal Revenue Service Regulations, such other club
     membership fees and dues as shall be determined to be in the best
     interests of the Company.

4.   Conventions, Seminars and Travel - The Employee shall be entitled at no
     expense to the Employee to attend conventions and seminars consistent
     with the business of the Company and the Bank and his position
     therewith.

5.   General Reimbursement - The Employee shall be entitled to reimbursement
     for any and all expenses incurred by him reasonably related to and
     incurred on account of advancement of the interests of the Bank.

6.   Pension Plan - The Employee shall be entitled to participate in the Bank's
     retirement plan as amended from time to time.

7.   401(k) Profit Sharing Plan - The Employee shall be entitled to participate
     in the Bank's 401(k) profit sharing plan as amended from time to time.

8.   Incentive Stock Option Plan - The Employee shall be entitled to participate
     in the Company's incentive stock options plans in effect from time to time.

                                       10

<PAGE>

9.   Directors' Plan - The Employee shall be entitled to participate in the
     Company's Directors' Plans in effect from time to time. The Employee
     shall not be entitled to receive fees for attendance at meetings of the
     Board or of any committees thereof.

10.  Employee Stock Ownership Plan - The Employee shall be entitled to
     participate in the Company's employee stock ownership plan in effect from
     time to time.

11.  Insurance - The Employee shall be entitled to participate in all
     insurance programs and benefits as outlined and subject to the
     limitations contained in the Summary of Employee Benefits maintained by
     the Company or the Bank including life, health, accident and
     disability. The Company shall reimburse Employee for his COBRA health
     insurance cost prior to Employee's eligibility under the Company's
     health insurance plan. The Company shall provide Employee with key man
     life insurance in such amounts as shall be mutually agreed upon.

12.  Moving expenses to cover the cost of the amount of all household goods
     and furnishings from West Simsbury, Connecticut to a community within
     the Company's present service area and for reasonable temporary lodging
     expenses, which in the aggregate shall not exceed $15,000.

13.  Bank's Incentive Plan - The Employee will be entitled to participate in
     the Bank's incentive plan in effect from time to time. Targets are
     determined annually at budget time. Awards for President/CEO range from
     0% to 40% of cash compensation of President/CEO. For employment through
     December 31, 2002, Employee shall receive a bonus of $35,000, payable
     not later than March 31, 2003.

14.  Signing Bonus of Treasury Stock - The Company shall award Employee, as
     bonuses, 500 shares of Company's common stock on each of August 1,
     2003, August 1, 2004, August 1, 2005, August 1, 2006 and August 1,
     2007, provided that Employee's employment with the Company (or any
     successor) has not been previously terminated as a result of resignation,
     death, disability or for Cause. A Certificate shall be issued as soon as
     practical after each such award and such compensation shall be included in
     Employee's W-2 compensation.

15.  Supplemental Executive Retirement Plan - The plan will be set forth in
     a separate agreement to be agreed by Company and Employee, based upon
     Employee's existing plans and Company contributions in the future.

16.  Change in Control Protection - The protection is set forth in the separate
     agreement dated as of the date hereof.

                                       11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00041-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00041-of-00352.parquet"}]]