Document:

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                                                                 EXHIBIT 10.4(b)

                            FIRST ESSEX BANCORP, INC.
                                 71 MAIN STREET
                              POST OFFICE BOX 2010
                          ANDOVER, MASSACHUSETTS 01810

                                December 16, 1999

Mr. Leonard A. Wilson
4 Eastman Road
Andover, Massachusetts 01810

                  RE:  EMPLOYMENT AND RELATED AGREEMENTS

Dear Len,

         We are writing to confirm the amendments we have agreed to make to
certain agreements between you and First Essex Bancorp, Inc. (the "Holding
Company") and First Essex Bank, FSB (the "Bank").

A. SPECIAL TERMINATION AGREEMENT

         We propose to amend that certain Special Termination Agreement between
you and the Holding Company, dated as of January 1, 1994 and restated as of
October 9, 1997 (the "Special Termination Agreement"), as follows:

         1. Section 4.2 of the Special Termination Agreement is hereby amended
to read as follows:

                  "4.2 An aggregate amount equal to three (3) times the sum of
         the Executive's (a) then current base salary and (b) highest annual
         bonus paid during the three fiscal years preceding termination of
         employment; and"

         2. Section 4.3 of the Special Termination Agreement is hereby amended
to read as follows:

                  "4.3 An amount equal to the excess of (a) the actuarial value
         of the benefits which the Executive would have accrued under the
         Employers' qualified pension plan and non-qualified supplemental
         retirement plan if the Executive's employment had continued for a
         period of three years following his date of

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         termination, over (b) the actuarial equivalent of the Executive's
         actual benefit under the pension plan and the non-qualified
         supplemental retirement plan."

B. EMPLOYMENT AGREEMENTS

         We propose to amend those certain Employment Agreements (the
"Employment Agreements") between you and each of the Holding Company and the
Bank, both dated October 9, 1997), as follows:

         1. Sections 1., 2., and 7.4 of both Employment Agreements are hereby
amended to reflect your current position as Chairman and Chief Executive
Officer, and to reflect the new Commencement Date for the Employment Agreements
as January 1, 1999.

         2. Section 3.1. of both Employment Agreements is hereby amended to
reflect your current salary at $362,250.

         3. Section 9.2 of the Holding Company Employment Agreement and Section
10.2 of the Bank Employment Agreement are hereby amended to read as follows:

                  "LUMP SUM PAYMENT OF REMAINING SALARY OBLIGATION. A lump sum
         severance benefit equal to three times the Executive's Highest Total
         Compensation during the three preceding fiscal years. Total Yearly
         Compensation shall equal the aggregate of all base compensation and any
         commissions, or bonuses paid during or accrued with respect to such
         year, together with any contributions or accruals made on behalf of
         Executive to any profit sharing plan or pension or retirement plan, by
         the Bank or the Holding Company (or any predecessor in interest) for
         the benefit of the Executive for the calendar year. If the Executive is
         a participant in a defined benefit pension or retirement plan, the
         increase in the actuarial value of the Executive's benefits under such
         plan between the start of the calendar year and the end of the calendar
         year shall be deemed to have been "paid" by the Executive's employer
         for the benefit of the Executive during such calendar year and shall be
         included in the calculation of Total Yearly Compensation."

         4. Section 15.8 of the Holding Company Employment Agreement and Section
17.8 of the Bank Employment Agreement are hereby amended to reflect that the
current amended agreements supersede the Employment Agreements made as of
October 9, 1997.

         In all other respects each of the foregoing agreements shall remain in
full force and effect.

         Please counter sign below to confirm your agreement with the foregoing
amendments to the agreements. Upon our receipt of such countersignature, this
letter agreement shall become a

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binding agreement between us, under seal, to be governed by in all respects the
laws of The Commonwealth of Massachusetts without giving effect to the
principles of conflicts of law of such state.

                                   Very truly yours,

                                   First Essex Bancorp, Inc.

                                   By:   /s/ BRIAN W. THOMPSON
                                        ------------------------------------
                                   Name: Brian W. Thompson
                                   Title: President and Chief Operating Officer

                                   First Essex Bank, FSB

                                   By:   /s/ BRIAN W. THOMPSON
                                        ------------------------------------
                                   Name: Brian W. Thompson
                                   Title: President and Chief Operating Officer

Agreed and Accepted:

  /s/ LEONARD A. WILSON
------------------------------
Leonard A. Wilson<PAGE>

                                                                    Exhibit 10.6

                                                                  EXECUTION COPY

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

         AGREEMENT made as of the 16th day of December, 1999, by and among FIRST
ESSEX BANCORP, INC., a Delaware corporation (the "Holding Company") and the
parent company for FIRST ESSEX BANK, FSB, a federal savings bank, with its main
office in Lawrence, Massachusetts (the "Bank"), (the Bank and the Holding
Company shall be hereinafter collectively referred to as the "Employers"), and
Brian W. Thompson of Amherst, Massachusetts (the "Executive").

                                   WITNESSETH

         WHEREAS, the Holding Company desires to continue to provide for the
Executive's employment by the Holding Company and in connection therewith
desires to amend and restate the existing employment agreement between the
Holding Company and the Executive;

         NOW THEREFORE, in consideration of the mutual covenants contained
herein, the Holding Company and the Executive agree as follows:

     1.  EMPLOYMENT The Executive shall serve the Bank and the Holding
Company as its President and Chief Operating Officer. In such positions, the
Executive shall have the duties, responsibilities and authorities and
authority as determined and designated from time to time by the Chief
Executive Officer or the Boards of Directors. Notwithstanding the above, the
Executive shall not be required to perform any duties and responsibilities
(a) which would result in a noncompliance with or violation of any applicable
law or regulation or (b) on a regular basis in any locations outside the
counties in which the Bank now has branch offices, unless agreed upon by the
Executive. During the pendency of any temporary or permanent suspension or
termination from the Bank, the Executive shall not perform, in any respect,
directly or indirectly, duties and responsibilities formerly performed at the
Bank as part of his duties and responsibilities as an officer of the Holding
Company.

     2.  EFFECTIVE DATE AND TERM. The commencement date (the "Commencement
Date") of this Agreement shall be January 1, 1999. The initial term of the
Executive's employment hereunder shall be for three years from the
Commencement Date. The parties intend that, at any point in time during the
Executive's employment hereunder, the then-remaining term of his employment
under this Agreement shall be three years. Accordingly, the term of
employment shall be automatically extended by one day for each day that the
Executive remains employed by the Bank or the Holding Company, unless the
Executive elects not to continue to extend the term of this Agreement by
giving written notice in accordance with Section 7.2 of this Agreement, or
the Board elects not to continue to extend the term of this Agreement (in
which event the provisions of Section 7.1 shall apply). The last day of such
term as so extended from time to time, is herein sometimes referred to as the
"Expiration Date" and the time period from the Commencement Date through the
Expiration Date shall be the "Term of Employment". At least once in each
calendar year the Board will review the Agreement and the Executive's
performance for purposes of determining whether to continue to extend the
Agreement and the rationale and results thereof shall be included in the
minutes of the Board's meeting. The Board shall give notice to the Executive
as soon as possible after such

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review as to whether the Agreement is to continue to be extended.

     3.  COMPENSATION AND BENEFITS. The compensation and benefits payable to the
Executive under this Agreement shall be as follows:

         3.1  SALARY. For all services rendered by the Executive to the
     Holding Company and its Subsidiaries, the Executive shall be entitled to
     receive a base salary at the rate of $233,500 per year, subject to
     increase from time to time in accordance with the usual practices of the
     Holding Company with respect to review of compensation of its senior
     executives. In addition, if the Board increases the Executive's annual
     base salary at any time before the Expiration Date, such increased
     annual base salary shall become a floor below which such annual base
     salary shall not fall (OTHER THAN concurrently with across-the-board
     salary reductions based on the Employers' financial performance
     similarly affecting all senior management personnel of the Holding
     Company) at any future time during the Term of Employment without the
     Executive's written consent. The Executive's salary shall be payable in
     periodic installments in accordance with the Holding Company's usual
     practice for its senior executives.

         3.2  REGULAR BENEFITS. The Executive shall also be entitled to
     participate in any and all employee benefit plans, medical insurance
     plans, disability income plans, retirement plans, bonus incentive plans,
     and other benefit plans from time to time in effect for senior
     executives of the Holding Company. Such participation shall be subject
     to (i) the terms of the applicable plan documents, (ii) generally
     applicable policies of the Holding Company and (iii) the discretion of
     the Board of Directors of the Holding Company or any administrative or
     other committee provided for in or contemplated by such plan.

         3.3  OTHER BENEFITS

              (a)  AUTOMOBILE. The Executive shall be also be provided with
         the use of an automobile at the Employers' expense. The Executive
         shall comply with such reasonable reporting and expense limitations on
         the use of the automobile as may be established from time to time by
         the Holding Company. The Holding Company shall include annually on the
         Executive's Form W-2 any amount attributable to his personal use of
         such automobile.

               (b)  BUSINESS MEMBERSHIPS. The Executive shall also be reimbursed
         for the reasonable annual membership fee for the country club of the
         Executive's choice.

               (c) LIFE INSURANCE. The Executive shall be entitled to receive
         life insurance with aggregate coverage equal to a total of four (4)
         times the Executives then-current base salary. The amount of all life
         insurance provided to the Executive as a senior executive of the
         Holding Company shall be included in the calculation of the life
         insurance coverage in this section.

         3.4  BUSINESS EXPENSES. The Holding Company shall reimburse the
     Executive for all reasonable travel and other business expenses incurred
     by him in the performance of his duties and responsibilities, subject to
     such reasonable requirements with respect to substantiation and
     documentation as may be specified by the Holding Company. The Employers
     shall also reimburse the Executive for costs and expenses related to the
     relocation by the Executive of his primary personal residence from
     Amherst, Massachusetts, to a location within reasonable proximity for
     commuting purposes to the Employers' executive offices in Andover,
     Massachusetts, such reimbursement to be in accordance with the
     Employers' customary

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     practices and procedures pertaining to senior executive officers
     relocation expense coverage, including reasonable requirements with
     respect to substantiation and documentation as may be specified by the
     Employers.

         3.5  VACATION. The Executive shall be entitled to not less than four
     (4) weeks of vacation per year, to be taken at such times and intervals
     as shall be determined by the Executive with the approval of the Holding
     Company, which approval shall not be unreasonably withheld.

         3.6  GENERAL. Nothing paid to the Executive under any plan, policy
     or arrangement currently in effect or made available in the future shall
     be deemed to be in lieu of other compensation to the Executive as
     described in this Agreement.

     4.  EXTENT OF SERVICE. During the Term of Employment, the Executive shall,
subject to the direction and supervision of the Board of Directors of the
Holding Company, devote his full time, best efforts and business judgment, skill
and knowledge to the advancement of the Employers' interests and to the
discharge of his duties and responsibilities hereunder. He shall not engage in
any other business activity, except as may be approved by the Board of
Directors; PROVIDED, HOWEVER, that nothing herein shall be construed as
preventing the Executive from:

         (a)  investing his assets in such form or manner as shall not
     require any material services on his part in the operations or affairs
     of the companies or the other entities in which such investments are
     made;

         (b)  serving on the board of directors of any company, PROVIDED that
     he shall not be required to render any material services with respect to
     the operations or affairs of any such company; or

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

     5.  TERMINATION UPON DEATH. In the event of the Executive's death during
the Term of Employment, the Executive's employment shall terminate on the
date of his death; PROVIDED, HOWEVER, that the Holding Company shall pay to
the Executive's beneficiary designated in writing to the Holding Company
prior to his death (or to his estate, if he fails to make such designation),
(i) any base salary or other compensation earned (together with a PRO RATA
portion of the bonus payable with respect to the year in which death
occurred) but not paid to the Executive prior to the date of death, plus (ii)
the base salary that the Executive would have earned for a period of six
months following his death, plus (iii) an amount equal to any bonus payments
or other incentive compensation that the Executive would have earned if he
had been employed for six months after his death, plus (iv) any death
benefits that the Executive is entitled to under the Holding Company's
policies in effect on the Executive's date of death. The foregoing bonus
payments shall be payable at the time of payment of similar bonus payments to
other executives of the Holding Company and shall be computed on the
assumption that all the Executive's individual goals (if any) under any
applicable bonus plans were achieved. In addition, the Holding Company shall
continue in effect the medical benefits

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of the Executive and the Executive's dependents, or any of the same, at the
level in effect on, and at the same out-of-pocket cost to the Executive as
of, the date of death for a six-month period commencing on the date of death
(or, if such continuation is not permitted by applicable law or if the Board
so determines in its sole discretion, the Holding Company shall provide the
economic equivalent in lieu thereof). Such medical benefits shall be deemed
to have been provided under the provisions of COBRA.

     6.  TERMINATION BY THE HOLDING COMPANY FOR CAUSE.

         6.1  TERMINATION BY HOLDING COMPANY. The Executive's employment
     hereunder may be terminated by the Holding Company, without further
     liability on the part of the Holding Company, effective immediately, by
     a two-thirds vote of all of the members of the Board of Directors of the
     Holding Company for Cause (as such term is defined in Section 6.2) by
     written notice to the Executive setting forth in reasonable detail the
     nature of such Cause, PROVIDED that the Board has complied with the
     provisions of Section 6.3.

         6.2  CAUSE.  Termination for "Cause" shall mean

              (a)  willful or gross neglect of duties for which employed
          (OTHER THAN on account of a medically determinable disability which
          renders the Executive incapable of performing such services);

              (b)  committing fraud, misappropriation or embezzlement in the
          performance of duties as an employee of the Bank or the Holding
          Company;

              (c)  conviction of a felony involving a crime of moral
          turpitude;

              (d)  willfully engaging in violations of material banking
          regulations; or

              (e)  willfully engaging in conduct materially injurious to the
          Bank or the Holding Company in violation of the covenants contained
          in this Agreement.

         6.3  BOARD TERMINATION PROCEDURE. In each case, in determining Cause
     the alleged acts or omissions of the Executive shall be measured against
     standards prevailing in the banking industry generally and the ultimate
     existence of Cause must be confirmed by not less than two-thirds of the
     Board at a meeting prior to any termination therefor.

         6.4  TERMINATION OF OBLIGATIONS. In the event of termination
     pursuant to Section 6, all obligations of the Holding Company under this
     Agreement shall terminate as of the date indicated, but vested rights of
     the parties hereunder shall not be affected.

     7.  TERMINATION BY THE EXECUTIVE

         7.1  TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The Executive
     shall be entitled to terminate his employment hereunder for Good Reason
     (as defined in Section 7.4) effective immediately by giving written notice
     to the Board of Directors. Upon any such termination, the Executive
     shall be entitled to receive the benefits set forth in Section 9.

         7.2  OTHER VOLUNTARY TERMINATION BY THE EXECUTIVE. During the Term
     of Employment, the Executive may effect, upon sixty (60) days prior
     written notice to the Holding Company, a Voluntary Termination of his
     employment hereunder and thereupon the Term of Employment (if not
     already expired) shall end. A "Voluntary Termination" shall

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     mean a termination of employment by the Executive on his own initiative
     OTHER THAN (a) a termination due to death or becoming Disabled (as
     defined in Section 11), (b) a termination for Good Reason, (c) a
     termination due to Retirement (as defined in Section 7.3), or (d) a
     termination as a result of the normal expiration of the full Term of
     Employment. If, during the Term of Employment, the Executive's
     employment is so terminated due to Voluntary Termination, the Term of
     Employment shall thereupon end and the Employers shall pay to the
     Executive the payments and benefits which the Executive would be
     entitled to in the event of a termination of his employment by the
     Employers for Cause.

         7.3  TERMINATION DUE TO RETIREMENT. "Retirement" means the
     termination of the Executive's employment with the Holding Company for
     any reason by the Executive at any time after the Executive attains
     "Retirement Age" (as hereinafter defined). "Retirement Age" shall mean
     the earliest to occur of (X) age 65, (Y) (if applicable) any lesser age
     at which the Executive is entitled to retire from the Employers and
     receive retirement benefits under the Employers' qualified pension plan,
     and (Z) an age of 62 or greater at which the Employers permit the
     Executive to retire. The Executive may terminate the Executive's
     employment hereunder due to Retirement upon thirty (30) days prior
     written notice to the Holding Company. If, during the Term of
     Employment, the Executive's employment is so terminated due to
     Retirement, the Term of Employment shall thereupon end and the Executive
     shall be entitled to (i) continuation of the Executive's medical
     benefits at the level in effect on, and at the same out-of-pocket cost
     to the Executive as of, the date of termination for the one year period
     following the termination of the Executive's employment due to
     Retirement (or, if such continuation is not permitted by applicable law
     or if the Board so determines in its sole discretion, the Holding
     Company shall provide the economic equivalent in lieu thereof), and (ii)
     any other compensation and benefits as may be provided in accordance
     with the terms and provisions of any applicable plans and programs, if
     any, of the Holding Company. Such medical benefits shall be deemed to
     have been provided under the provisions of COBRA.

         7.4  GOOD REASON. For purposes of this Agreement, the term "Good
     Reason" shall mean any of the following:

              (a)  the failure of the Board of Directors of the Holding
          Company to elect the Executive to the office of President and Chief
          Operating Officer, or to continue the Executive in such offices;

              (b)  the failure by the Holding Company to comply with the
          provisions of Section 3.1;

              (c)  any failure by the Holding Company to timely pay the
          amounts (OTHER THAN base salary) or provide the benefits described
          in this Agreement, OTHER THAN an isolated failure not occurring in
          bad faith and which is remedied promptly after receipt of written
          notice thereof given by Executive;

              (d)  any reduction in the Executive's base salary or any
          material reduction in other benefits in effect for  the Executive
          on the date hereof or as set forth in this Agreement;

              (e)  a material breach by the Holding Company of any of the
          provisions of this Agreement which failure or breach shall have
          continued for thirty (30) days after written notice from the
          Executive to the Holding Company specifying the nature of

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          such failure or breach; and

              (f)  a determination by the Board not to continue to extend the
          term of this Agreement as provided in Section 2.

In addition,"Good Reason" shall include the following events but only if they
shall occur within two years following a "Change in Control" (which term shall
have the meaning defined in the Special Termination Agreement between the
Executive and the Holding Company):

              (g)  there occurs any material change by the Holding Company to
         the Executive's function, duties, or responsibilities in effect on the
         date hereof or as set forth in this Agreement, which change would cause
         the Executive's position with the Holding Company to become one of
         lesser responsibility, importance, or scope from the position and
         attributes thereof in effect on the date hereof or as set forth in
         this Agreement;

              (h)  the failure by the Holding Company to continue to provide the
         Executive with benefits substantially similar to those available to
         the Executive under any of the life insurance, medical, health and
         accident, or disability plans or any other material benefit plans in
         which the Executive was participating at the time of the Change in
         Control, or the taking of any action by the Holding Company which
         would directly or indirectly materially reduce any of such benefits,
         or the failure by the Holding Company to provide the Executive with
         the number of paid vacation days to which the Executive is entitled on
         the basis of years of service with the Holding Company in accordance
         with the Holding Company's normal vacation policy in effect at the
         time of the Change in Control;

              (i)  A reasonable determination by the Executive that, as a
          result of a Change in Control, he is unable to exercise the
          responsibilities, authorities, powers, functions or duties
          exercised by the Executive immediately prior to such Change in
          Control; or

              (j)   A reasonable determination by the Executive that, as a
          result of a Change in Control, his working conditions have
          significantly worsened.

     8.  TERMINATION BY THE HOLDING COMPANY WITHOUT CAUSE. The Executive's
employment with the Holding Company may be terminated without cause by a
two-thirds vote of all of the members of the Board of Directors of the Holding
Company on written notice to the Executive, PROVIDED, HOWEVER, that the Holding
Company shall have the obligation upon any such termination to make the payments
to the Executive provided for under Section 9 of this Agreement.

     9.  CERTAIN TERMINATION BENEFITS. In the event of termination pursuant to
Section 7.1 or 8, the Executive shall be entitled to each of the following
benefits:

         9.1  EARNINGS TO DATE OF TERMINATION. An amount equal to the sum of
     (a) base salary or other compensation earned through the date of
     termination, plus (b) the Executive's PRO RATA share (based on the
     portion of the fiscal year during which the Executive was employed) of
     the highest annual bonus paid during the three fiscal years preceding the

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     termination of employment, plus (c) all accrued vacation and deferred
     compensation.

         9.2  LUMP SUM PAYMENT OF REMAINING SALARY OBLIGATION. A lump sum
     severance benefit equal to three times the Executive's Highest Total
     Compensation during the three preceding fiscal years. Total Yearly
     Compensation shall equal the aggregate of all base compensation and any
     commissions, or bonuses paid during or accrued with respect to such
     year, together with any contributions or accruals made on behalf of
     Executive to any profit sharing plan or pension or retirement plan, by
     the Bank or the Holding Company (or any predecessor in interest) for the
     benefit of the Executive for the calendar year. If the Executive is a
     participant in a defined benefit pension or retirement plan, the
     increase in the actuarial value of the Executive's benefits under such
     plan between the start of the calendar year and the end of the calendar
     year shall be deemed to have been "paid" by the Executive's employer for
     the benefit of the Executive during such calendar year and shall be
     included in the calculation of Total Yearly Compensation.

         9.3  BENEFIT CONTINUATION. For the period subsequent to the date of
     termination until the Expiration Date, the Executive shall continue to
     receive the disability and medical benefits described in Section 3.2
     existing on the date of termination at the level in effect on, and at
     the same out-of-pocket cost to the Executive as of, the date of
     termination. Any cash bonus plans shall be prorated through the date of
     termination.

         9.4  PENSION ADJUSTMENT. An amount equal to the excess of (a) the
     actuarial value of the benefits which the Executive would have accrued
     under the Employers' qualified pension plan and non-qualified
     supplemental retirement plan if the Executive's employment had continued
     for a period of three years following his date of termination, over (b)
     the actuarial equivalent of the Executive's actual benefit under the
     pension plan and the non-qualified supplemental retirement plan.

     10. ADJUSTMENT FOR UNAVAILABILITY OF BENEFITS. If, in spite of the
provisions of Section 9, benefits or service credits under any benefit plan
provided by a third party shall not be payable or provided under any such
plan to the Executive, or to the Executive's dependents, beneficiaries or
estate, because the Executive is no longer deemed to be an employee of the
Holding Company, the Holding Company shall pay or provide for payment of such
benefits and service credits for such benefits to the Executive, or to the
Executive's dependents, beneficiaries or estate.

     11. DISABILITY. If, due to physical or mental illness, the Executive
shall be disabled so as to be unable to perform substantially all of his
duties and responsibilities hereunder, the Holding Company, acting through
its Board of Directors, may designate another executive to act in his place
during the period of his disability. Notwithstanding any such designation,
the Executive shall continue to receive his full salary and benefits under
Section 3 of this Agreement until the earlier of (X) the Expiration Date or (Y)
the date on which he becomes eligible for disability income under the
Employer's disability income plan (at which time the Executive shall be
considered to be "Disabled"). While receiving disability payments under such
plan, the Executive shall receive a salary from the Holding Company which
when combined with the Executive's disability income payments will equal
eighty (80%) percent of the Executive's prior salary from the Holding
Company, and shall continue to participate in the Employers' benefit plans
and to receive other benefits as specified in Section 3.2 until the

<PAGE>

Expiration Date, with all such benefits to be at the level in effect on, and
at the same out-of-pocket cost to the Executive as of, the date of
disability. In the absence of a disability income plan at the time of such
disability, the Holding Company shall pay the Executive benefits equal to
those the Executive would have received if the Holding Company's current
disability plan were in effect at such time. Upon the Executive being able to
return to full-time employment after being Disabled but before the expiration
of the Term of Employment, the Executive shall be offered an equivalent
available position and otherwise be subject to the provisions of this
Agreement. Nothing contained in this Section 11 shall preclude the Holding
Company from terminating the Executive's employment without cause, subject to
its payment of benefits as provided in Section 9.

     12. EXCISE TAXES. In the event that the Executive shall have imposed
upon him the tax which is imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code") or by any successor provision, by
reason of any payment or benefit which the Executive has received from the
Holding Company or any Subsidiaries, the Holding Company shall pay as
additional compensation to the Executive that amount which, after taking into
account all taxes (including any tax which shall be imposed by Code Section
4999) imposed upon such amount by any federal, state or local government,
shall be equal to the amount of said tax imposed by Code Section 4999.

     13. CONFIDENTIAL INFORMATION. The Executive will not disclose to any
other Person (except as required by applicable law or in connection with the
performance of his duties and responsibilities hereunder), or use for his own
benefit or gain, any confidential information of either Employer obtained by
him incident to his employment with the Holding Company. The term
"confidential information" includes, without limitation, financial
information, business plans, prospects and opportunities (such as lending
relationships, financial product developments, or possible acquisitions or
dispositions of business or facilities) which have been discussed or
considered by the management of the Holding Company but does not include any
information which has become part of the public domain by means other than
the Executive's nonobservance of his obligations hereunder.

     14. NO MITIGATION; NO OFFSET. In the event of any termination of
employment under this Agreement, the Executive shall be under no obligation
to seek other employment or to mitigate damages, and there shall be no offset
against any amounts due to him under this Agreement for any reason,
including, without limitation, on account of any remuneration attributable to
any subsequent employment that the Executive may obtain. Any amounts due
under this Agreement are in the nature of severance payments or liquidated
damages, or both, and are not in the nature of a penalty.

     15. MISCELLANEOUS.

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

         15.2  DEFINITION OF "PERSON". For purposes of this Agreement, the
     term "Person"

<PAGE>

     shall mean an individual, a corporation, an association, a partnership,
     an estate, a trust and any other entity or organization.

         15.3  WITHHOLDING. All payments made by the Holding Company under
     this Agreement shall be net of any tax or other amounts required to be
     withheld by the Holding Company under applicable law.

         15.4  ARBITRATION OF DISPUTES. Any controversy or claim arising out
     of or relating to this Agreement or the breach thereof shall be settled
     by arbitration in accordance with the laws of the Commonwealth of
     Massachusetts by three arbitrators, one of whom shall be appointed by
     the Holding Company, one by the Executive and the third by the first two
     arbitrators. If the first two arbitrators cannot agree on the
     appointment of a third arbitrator, then the third arbitrator shall be
     appointed by the American Arbitration Association in the City of Boston.
     Such arbitration shall be conducted in the City of Boston in accordance
     with the rules of the American Arbitration Association, except with
     respect to the selection of arbitrators which shall be as provided in
     this Section 15.4. Judgment upon the award rendered by the arbitrators may
     be entered in any court having jurisdiction thereof. In the event that
     it shall be necessary or desirable for the Executive to retain legal
     counsel or incur other costs and expenses in connection with the
     enforcement of any or all of the Executive's rights under this
     Agreement, the Holding Company shall pay (or the Executive shall be
     entitled to recover from the Holding Company, as the case may be) the
     Executive's reasonable attorneys' fees and other reasonable costs and
     expenses in connection with the enforcement of said rights (including
     the enforcement of any arbitration award in court) regardless of the
     final outcome, unless and to the extent the arbitrators shall determine
     that under the circumstances recovery by the Executive of all or a part
     of any such fees and costs and expenses would be unjust.

         15.5  ASSIGNMENT; SUCCESSORS AND ASSIGNS, ETC. Neither the Holding
     Company nor the Executive may make any assignment of this Agreement or
     any interest herein, by operation of law or otherwise, without the prior
     written consent of the other party and without such consent any
     attempted transfer or assignment shall be null and of no effect;
     PROVIDED, HOWEVER, that the Holding Company may assign its rights under
     this Agreement without the consent of the Executive in the event either
     Employer shall hereafter effect a reorganization, consolidate with or
     merge into any other Person, or transfer all or substantially all of its
     properties or assets to any other Person. This Agreement shall inure to
     the benefit of and be binding upon the Holding Company and the
     Executive, and their respective successors, executors, administrators,
     heirs and permitted assigns. In the event of the Executive's death prior
     to the completion by the Holding Company of all payments due him under
     this Agreement, the Holding Company shall continue such payments to the
     Executive's beneficiary designated in writing to the Holding Company
     prior to his death (or to his estate, if he fails to make such
     designation).

         15.6  ENFORCEABILITY. If any portion or provision of this Agreement
     shall to any extent be declared illegal or unenforceable by a court of
     competent jurisdiction, then the remainder of this Agreement, or the
     application of such portion or provision in circumstances other than
     those as to which it is so declared illegal or unenforceable, shall not
     be affected thereby, and each portion and provision of this Agreement
     shall be valid and enforceable to the fullest extent permitted by law.

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

         15.8  PRIOR AGREEMENTS. This Agreement supersedes the Amended and
     Restated Employment Agreement made as of October 9, 1997 by and among
     the Executive, the Holding Company and the Bank.

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

         15.10 AMENDMENT. This Agreement may be amended or modified only by
     a written instrument signed by the Executive and by duly authorized
     representatives of the Holding Company.

         15.11 GOVERNING LAW. This is a Massachusetts contract and shall be
     construed under and be governed in all respects by the laws of The
     Commonwealth of Massachusetts.

     16. SOURCE OF PAYMENTS.

         16.1  HOLDING COMPANY GUARANTY. All payments provided in this
     Agreement shall be timely paid in cash or check from the general funds
     of the Holding Company.

         16.2  NO DUPLICATE PAYMENTS. 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 the Executive under the
     Amended and Restated Employment Agreement dated as of the date hereof
     between the Executive and the Bank, such compensation payments and
     benefits paid by the Bank will be subtracted from any amounts due
     simultaneously to the Executive under similar provisions of this
     Agreement. Under no circumstances shall the Executive be entitled to
     receive duplicate payments or benefits under this Agreement and such
     other Employment Agreement. Payments pursuant to this Agreement and the
     Bank Agreement shall be allocated in proportion to the services rendered
     and time expended on such activities by the Executive as determined by
     the Holding Company and the Bank on a quarterly basis.

     17.  NONCOMPETITION.

          17.1  WHILE EMPLOYED. During such time as the Executive is employed
     hereunder, the Executive will not compete with the banking or any other
     business conducted by either of the Employers during the period of his
     employment hereunder, nor will he attempt to hire any employee of either
     of the Employers, assist in such hiring by any other Person, encourage
     any such employee to terminate his or her relationship with either of
     the Employers, or solicit or encourage any customer of either of the
     Employers to terminate its relationship with such Employer or to conduct
     with any other person any business or activity which such customer
     conducts or could conduct with such Employer.

         17.2  POST-EMPLOYMENT. The provisions of this Section 17.2 shall not
     be binding

<PAGE>

     on the Executive after a Change in Control shall have occurred. During
     the one year period following the date of termination of the Executive's
     employment (x) by the Executive on his own initiative for any reason
     OTHER THAN (1) death, (2) becoming Disabled (as defined in Section 11),
     or (3) Retirement (as defined in Section 7.3), or (y) by either Employer
     for Cause or under circumstances which result in the Executive receiving
     termination benefits pursuant to Section 9 hereof, the Executive will not
     compete from an office within 20 miles of the Bank's main office with
     the banking or any other business conducted by either of the Employers
     during the period of his employment hereunder, nor will he attempt to
     hire any employee of either of the Employers, assist in such hiring by
     any other Person, or encourage any such employee to terminate his or her
     relationship with either of the Employers.

                                      * * * * *

                  [Remainder of page intentionally left blank.]

<PAGE>

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

ATTEST:                                       FIRST ESSEX BANK, FSB

 /s/ FRANCES GOSSELIN                         By:   /s/ LEONARD A. WILSON
------------------------                          ----------------------------
                                              Title: Chairman and CEO

[Seal]
WITNESS                                       EXECUTIVE

   /s/ CYNTHIA CROSS                                /s/ BRIAN W. THOMPSON
------------------------                          ----------------------------
                                              Brian W. Thompson

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