SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934

(Amendment No.)

Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

Westborough Financial Services, Inc.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- -----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

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(5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing party:

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(4) Date Filed:

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December 28, 2001

Dear Shareholder:

You are cordially invited to attend the year 2002 Annual Meeting of
Shareholders of Westborough Financial Services, Inc., the holding company
for The Westborough Bank, which will be held on January 31, 2002 at 3:00
p.m., local time, at the Wyndham Westborough Hotel located at 5400 Computer
Drive, Westborough, Massachusetts 01581 (the "Annual Meeting").

The attached Notice of Annual Meeting and proxy statement describe
the formal business that we will transact at the Annual Meeting. In
addition to the formal items of business, management will report on the
operations and activities of Westborough Financial Services and Westborough
Bank and you will have an opportunity to ask questions.

The Board of Directors of Westborough Financial Services has
determined that an affirmative vote on each matter to be considered at the
Annual Meeting is in the best interests of Westborough Financial Services
and its shareholders and unanimously recommends a vote "FOR" each of these
matters.

Please complete, sign and return the enclosed proxy card promptly,
whether or not you plan to attend the Annual Meeting. Your vote is
important regardless of the number of shares you own. Voting by proxy will
not prevent you from voting in person at the Annual Meeting but will assure
that your vote is counted if you cannot attend.

On behalf of the Board of Directors and the employees of Westborough
Financial Services and Westborough Bank, we thank you for your continued
support and look forward to seeing you at the Annual Meeting.

Sincerely yours,

/s/ Joseph F. MacDonough

Joseph F. MacDonough
President and Chief Executive Officer

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

Date: Thursday, January 31, 2002
Time: 3:00 p.m., local time
Place: Wyndham Westborough Hotel
5400 Computer Drive
Westborough, Massachusetts 01581

At our 2002 Annual Meeting, we will ask you to:

1. Elect five directors to serve for a three-year term to expire at
the 2005 Annual Meeting. The following five directors are the
Board of Directors' nominees:

* Edward S. Bilzerian * Paul F. McGrath * Charlotte C. Spinney
* Phyllis A. Stone * James E. Tashjian

2. Approval of Article IX of the Westborough Financial Services,
Inc. 2001 Stock Option Plan, allowing for, among other things,
acceleration of vesting upon retirement or change in control;

3. Approval of Article X of the Westborough Financial Services,
Inc. 2001 Recognition and Retention Plan, allowing for, among
other things, acceleration of vesting upon retirement or change
in control;

4. Ratify the appointment of Wolf & Company, P.C. as our
independent public accountant for the fiscal year ending
September 30, 2002; and

5. Transact any other business as may properly come before the
Annual Meeting.

You may vote at the Annual Meeting if you were a shareholder of
Westborough Financial Services at the close of business on December 7,
2001, the record date.

By Order of the Board of Directors,

/s/ John L. Casagrande

John L. Casagrande
Clerk

Westborough, Massachusetts
December 28, 2001

===========================================================================
You are cordially invited to attend the Annual Meeting. It is important
that your shares be represented regardless of the number of shares you own.
The Board of Directors urges you to sign, date and mark the enclosed proxy
card promptly and return it in the enclosed envelope. Returning the proxy
card will not prevent you from voting in person if you attend the Annual
Meeting.
===========================================================================

GENERAL INFORMATION

GENERAL

Westborough Financial Services, Inc. is a Massachusetts-chartered
stock holding company, which owns all the capital stock of The Westborough
Bank. In February 2000, Westborough Bank reorganized into the mutual
holding company structure and Westborough Financial Services conducted an
initial public offering of its common stock. As used in this proxy
statement, "we," "us" and "our" refer to Westborough Financial Services
and/or its subsidiaries, depending on the context. The term "Annual
Meeting," as used in this proxy statement, includes any adjournment or
postponement of such meeting.

We have sent you this proxy statement and enclosed proxy card because
the Board of Directors is soliciting your proxy to vote at the Annual
Meeting. This proxy statement summarizes the information you will need to
know to cast an informed vote at the Annual Meeting. You do not need to
attend the Annual Meeting to vote your shares. You may simply complete,
sign and return the enclosed proxy card and your votes will be cast for you
at the Annual Meeting. This process is described below in the section
entitled "Voting Rights."

We began mailing this proxy statement, the Notice of Annual Meeting
and the enclosed proxy card on or about December 28, 2001 to all
shareholders entitled to vote. If you owned common stock of Westborough
Financial Services at the close of business on December 7, 2001, the record
date, you are entitled to vote at the Annual Meeting. On the record date,
there were 1,581,374 shares of common stock outstanding.

QUORUM

A quorum of shareholders is necessary to hold a valid meeting. If
the holders of at least a majority of the total number of the outstanding
shares of common stock entitled to vote are represented in person or by
proxy at the Annual Meeting, a quorum will exist. We will include proxies
marked as abstentions and broker non-votes to determine the number of
shares present at the Annual Meeting.

VOTING RIGHTS

You are entitled to one vote at the Annual Meeting for each share of
the common stock of Westborough Financial Services that you owned as of
record at the close of business on December 7, 2001. The number of shares
you own (and may vote) is listed at the top of the back of the proxy card.

You may vote your shares at the Annual Meeting in person or by proxy.
To vote in person, you must attend the Annual Meeting and obtain and submit
a ballot, which we will provide to you at the Annual Meeting. To vote by
proxy, you must complete, sign and return the enclosed proxy card. If you
properly complete your proxy card and send it to us in time to vote, your
"proxy" (one of the individuals named on your proxy card) will vote your
shares as you have directed. If you sign the proxy card but do not make
specific choices, your proxy will vote your shares FOR each of the
proposals identified in the Notice of the Annual Meeting.

If any other matter is presented, your proxy will vote the shares
represented by all properly executed proxies on such matters as a majority
of the Board of Directors determines. As of the date of this proxy
statement, we know of no other matters that may be presented at the Annual
Meeting, other than those listed in the Notice of the Annual Meeting.

VOTE BY WESTBOROUGH BANCORP, MHC

Westborough Bancorp, MHC is the holding company of Westborough
Financial Services which was formed pursuant to the reorganization of
Westborough Bank to a mutual holding company structure on February 15,
2000. As indicated under "Security Ownership of Certain Beneficial Owners
and Management," Westborough Bancorp, MHC owns 65%, or 1,027,893 shares, of
the outstanding common stock of Westborough Financial Services.

All shares of common stock owned by Westborough Bancorp, MHC will be
voted in accordance with the instructions of the Board of Trustees of
Westborough Bancorp, MHC. Westborough Bancorp, MHC is expected to vote
such shares "FOR" Proposals 1, 2, 3 and 4.

VOTE REQUIRED

Proposal 1: The nominees for director who receive the
Election of most votes will be elected. So, if you do
Directors not vote for a nominee, or you indicate
"withhold authority" for any nominee on
your proxy card, your vote will not count
"for" or "against" the nominee. You may
not vote your shares cumulatively for the
election of directors.

Proposals 2, 3 and 4: Approval of each proposal requires the
Approval of Article IX of affirmative vote of a majority of the
the 2001 Stock Option Plan; outstanding shares of our common stock.
Article X of the 2001 So, if you "abstain" from voting, it has
Recognition and Retention the same effect as if you voted "against"
Plan; and Ratification of the these proposals.
Independent Accountants

EFFECT OF BROKER NON-VOTES

If your broker holds shares that you own in "street name," the broker
may vote your shares on the proposals listed above even if the broker does
not receive instructions from you. If your broker does not vote on a
proposal, this will constitute a "broker non-vote." Here is the effect of a
"broker non-vote."

* Proposal 1: Election of Directors. A broker non-vote would have no
effect on the outcome of this proposal because only a plurality of
votes cast is required to elect a director.

* Proposals 2, 3 and 4: Approval of Article IX of the 2001 Stock
Option Plan, Approval of Article X of the 2001 Recognition and
Retention Plan and Ratification of the Independent Auditors. A
broker non-vote will have the effect of a vote against these
proposals.

CONFIDENTIAL VOTING POLICY

Westborough Financial Services maintains a policy of keeping
shareholder votes confidential. We only let our Inspector of Election
examine the voting materials. We will not disclose your vote to management
unless it is necessary to meet legal requirements. We will, however,
forward any written comments that you may have to management.

REVOKING YOUR PROXY

You may revoke your proxy at any time before it is exercised by:

* Filing with the Clerk a letter revoking the proxy;
* Submitting another signed proxy with a later date; or
* Attending the Annual Meeting and voting in person, provided you
file a written revocation with the Secretary of the Annual
Meeting prior to the voting of such proxy.

If your shares are not registered in your own name, you will need
appropriate documentation from your shareholder of record to vote
personally at the Annual Meeting. Examples of such documentation include a
broker's statement, letter or other document that will confirm your
ownership of shares of Westborough Financial Services.

SOLICITATION OF PROXIES

Westborough Financial Services will pay the costs of soliciting
proxies from its shareholders. Directors, officers or employees of
Westborough Financial Services and Westborough Bank may solicit proxies by:

* mail;
* telephone; or
* other forms of communication.

We will also reimburse banks, brokers, nominees and other fiduciaries
for the expenses they incur in forwarding the proxy materials to you.

INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON

Our directors, officers and employees have been granted stock options
and restricted stock awards under the Westborough Financial Services, Inc.
2001 Stock Option Plan and the Westborough Financial Services, Inc. 2001
Recognition and Retention Plan, respectively. Currently, the vesting of
stock options and restricted stock awards may be accelerated only upon the
death or disability of the participant. In certain cases, the stock
options and restricted stock awards will be permitted to vest upon the
retirement of such person or a change in control, as defined in the plans,
of Westborough Financial Services if the amendments being presented for
approval in Proposals 2 and 3, respectively, are approved by shareholders.
As a result, certain of our directors, officers and employees have a
personal interest in the outcome of the vote on Proposals 2 and 3.

OBTAINING AN ANNUAL REPORT ON FORM 10-KSB

If you would like a copy of our Annual Report on Form 10-KSB and
audited financials for the year ended September 30, 2001, which will be
filed with the Securities and Exchange Commission ("SEC"), we will send you
one (without exhibits) free of charge. Please write to:

John L. Casagrande, Clerk
Westborough Financial Services, Inc.
100 East Main Street
Westborough, Massachusetts 01581

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

PRINCIPAL SHAREHOLDERS OF WESTBOROUGH FINANCIAL SERVICES

The following table contains common stock ownership information for
persons known to Westborough Financial Services to "beneficially own" 5% or
more of Westborough Financial Services's common stock as of December 7,
2001. In general, beneficial ownership includes those shares that a person
has the power to vote, sell, or otherwise dispose. Beneficial ownership
also includes the number of shares which an individual has the right to
acquire within 60 days (such as stock options) after December 7, 2001. Two
or more persons may be considered the beneficial owner of the same shares.
We obtained the information provided in the following table from filings
with the SEC and with Westborough Financial Services. In this proxy
statement, "voting power" is the power to vote or direct the voting of
shares, and "investment power" includes the power to dispose or direct the
disposition of shares.

Amount and Nature of
Name and Address of Beneficial
Title of Class Beneficial Owner Ownership(1) Percent
- -------------- ------------------- -------------------- -------

<s> <c> <c> <c>
Common Stock Westborough Bancorp, MHC
$.01 par value 100 East Main Street
Westborough, Massachusetts 01581 1,027,893 65.0%

<FN>
- --------------------
<F1> As reported by Westborough Bancorp, MHC in a Schedule 13D dated
February 15, 2000, which reported sole voting and dispositive power
with respect to 1,027,893 shares.
</FN>

SECURITY OWNERSHIP OF MANAGEMENT

The following table shows the number of shares of Westborough
Financial Services's common stock, par value $0.01 per share beneficially
owned by each director, and all directors and executive officers of
Westborough Financial Services as a group, as of December 7, 2001. The
percent of common stock outstanding was based on a total of 1,581,374
shares of Westborough Financial Services's common stock outstanding as of
December 7, 2001, plus shares of common stock which such person or group
has the right to acquire within 60 days after December 7, 2001, by the
exercise of stock options. Except as otherwise indicated, each person and
each group shown in the table has sole voting and investment power with
respect to the shares of common stock listed next to their name.

Position with Amount and
Westborough Financial Nature Percent of
Services and Westborough of Beneficial Common Stock
Name Bank Ownership(1) Outstanding
- --------------------------- ------------------------ ------------- ------------

<s> <c> <c> <c>
Nelson P. Ball Director 650(2) *
Edward S. Bilzerian Director 3,650 *
David E. Carlstrom Director 3,150 *
John L. Casagrande Senior Vice President,
Treasurer, Clerk and Director 4,654(3) *
William W. Cotting, Jr. Director 1,650 *
Robert G. Daniel Director 8,150 *
Earl H. Hutt Director 4,150 *
Walter A. Kinell, Jr. Chairman of the Board 7,150 *
Robert A. Klugman Director 8,150(4) *
Roger B. Leland Director 7,150(5) *
Joseph F. MacDonough President, Chief Executive
Officer and Director 14,746(6) *
Paul F. McGrath Director 5,650(7) *
Charlotte C. Spinney Director 2,150(8) *
Phyllis A. Stone Director 2,300(9) *
James E. Tashjian Director 3,650(10) *
Daniel G. Tear Director 2,650 *
All directors and executive
officers as a group
(21 persons)(11) 133,527 8.4%
======= ===

<FN>
- --------------------
* Less than one percent of the total outstanding shares of common
stock.
<F1> Includes stock options that may be acquired by executive officers and
directors of Westborough Financial Services under the Westborough
Financial Services Inc. 2001 Stock Option Plan within 60 days after
December 7, 2001. Under the plan, each outside director may acquire
200 shares of common stock and Messrs. Casagrande and MacDonough may
each acquire 900 and 1,920 shares of common stock, respectively.

These amounts also include restricted stock awards of 6,300 shares in
the aggregate made to outside directors under the Westborough
Financial Services, Inc. 2001 Recognition and Retention Plan. Under
the plan, Messrs. Casagrande and MacDonough were also granted
restricted stock awards of 2,000 and 3,800 shares of common stock,
respectively. Each recipient of a restricted stock award has sole
voting power but no investment power, except in limited
circumstances, over the common stock covered by the award. The
restricted stock awards will vest at the rate of 20% per year on each
April 30th following the date of grant, with the first installment to
vest on April 30, 2002.
<F2> Excludes 3,500 shares held by his spouse for which Mr. Ball disclaims
beneficial ownership.
<F3> Reflects 1,581 shares held in Westborough Bank's 401(k) plan.
<F4> Includes 6,000 shares held in Mr. Klugman's individual retirement
account.
<F5> Includes 2,000 shares held in his spouse's individual retirement
account.
<F6> Includes 1,741 shares held in Mr. MacDonough's individual retirement
account, 1,814 shares held in his spouse's individual retirement
account, 1,679 shares held in Westborough Bank's 401(k) plan, and
3,500 shares held jointly with his spouse.
<F7> Reflects 5,000 shares held in Mr. McGrath's individual retirement
account.
<F8> Reflects 1,500 shares held in Ms. Spinney's individual retirement
account.
<F9> Includes 50 shares held by Ms. Stone as custodian for an individual,
25 shares held by Ms. Stone as custodian under the Uniform Transfer
to Minors Act, and 1,500 shares held jointly with her spouse.
<F10> Reflects 3,000 shares held jointly with his spouse.
<F11> The Westborough Financial Services, Inc. Employee Stock Ownership
Plan ("ESOP") is administered by the ESOP committee of Westborough
Financial Services (the "ESOP Committee"). The ESOP's assets are
held in a trust (the "ESOP Trust"), for which Eastern Bank, serves as
trustee (the "ESOP Trustee"). The ESOP Trust purchased these shares
with funds borrowed from Westborough Financial Services, initially
placed these shares in a suspense account for future allocation to be
allocated to employees participating in the ESOP over a period of
years as its acquisition debt is retired. The ESOP Trustee is the
beneficial owner of the shares held in the ESOP Trust. The terms of
the ESOP Trust Agreement provide that, subject to the ESOP Trustee's
fiduciary responsibilities under the Employee Retirement Income
Security Act of 1974, as amended, the ESOP Trustee will vote, tender
or exchange shares of common stock held in the ESOP Trust in
accordance with instructions received from the participants. As of
December 7, 2001, 2,947 shares held by the ESOP Trust have been
released for allocation. The ESOP Trustee will vote allocated shares
as to which no instructions are received and any shares that have not
been allocated to participants' accounts in the same proportion as
allocated shares with respect to which the ESOP trustee receives
instructions are voted. The ESOP Trustee will tender or exchange any
shares in the suspense account or that otherwise have not been
allocated to participants' accounts in the same proportion as
allocated shares with respect to which the ESOP Trustee receives
instructions are tendered or exchanged, but otherwise has no
disposition power.

This amount also includes shares held in trust pursuant to the ESOP
that have been allocated to individual accounts as follows: Mr.
Casagrande, 173 shares and Mr. MacDonough, 292 shares. The amount of
shares for all directors and executive officers as a group also
includes 41,253 shares held by the ESOP Trust that have not been
allocated to eligible participants as of December 31, 2000, over
which the ESOP Committee (consisting of Messrs. Carlstrom, Daniel and
Leland) may be deemed to have sole investment power, except in
limited circumstances, thereby causing each committee member to be a
beneficial owner of such shares. Each of the members of the ESOP
Committee disclaims beneficial ownership of such shares and
accordingly, such shares are not attributed to the members of the
ESOP Committee individually.
</FN>

DISCUSSION OF PROPOSALS RECOMMENDED BY BOARD

------------------------------
Proposal 1
Election Of Directors
------------------------------

GENERAL

The Nominating Committee has nominated five persons for election as
directors at the Annual Meeting. The nominees are currently serving on
Westborough Financial Services's Board of Directors. If you elect the
nominees, they will hold office until the Annual Meeting in 2005, or until
their successors have been elected.

We know of no reason why any nominee may be unable to serve as a
director. If any nominee is unable to serve, your proxy may vote for
another nominee proposed by the Board. If for any reason these nominees
prove unable or unwilling to stand for election, the Board will nominate
alternates or reduce the size of the Board of Directors to eliminate the
vacancy. The Board has no reason to believe that its nominees would prove
unable to serve if elected.

NOMINEES AND CONTINUING DIRECTORS

Position(s) Held
with Westborough
Nominees Age(1) Term Expires Financial Services Director Since(2)
- -------- ------ ------------ ------------------ -----------------

<s> <c> <c> <c> <c>
Edward S. Bilzerian 68 2002 Director 1993
Paul F. McGrath 55 2002 Director 1993
Charlotte C. Spinney 65 2002 Director 1991
Phyllis A. Stone 58 2002 Director 1999
James E. Tashjian 60 2002 Director 1973

Continuing Directors
- --------------------

David E. Carlstrom 67 2003 Director 1976
John L. Casagrande 55 2003 Senior Vice President, 1994
Treasurer, Clerk and
Director
William W. Cotting, Jr. 55 2003 Director 1988
Walter A. Kinell, Jr. 72 2003 Chairman of the Board 1967
Robert A. Klugman 50 2003 Director 1991
Nelson P. Ball 70 2004 Director 1980
Robert G. Daniel 72 2004 Director 1969
Earl H. Hutt 74 2004 Director 1988
Roger B. Leland 72 2004 Director 1974
Joseph F. MacDonough 55 2004 President, Chief Executive 1982
Officer and Director

Retiring Director
- -----------------
Daniel G. Tear 75 2002 Director 1985

<FN>
- --------------------
<F1> As of September 30, 2001.
<F2> Includes service as a trustee of Westborough Bank prior to the
formation of Westborough Financial Services in 2000.
</FN>

The principal occupation and business experience of each nominee for
election as director and each continuing director are set forth below.
Unless otherwise indicated, each of the following persons has held his or
her present position for the last five years.

NOMINEES

Edward S. Bilzerian is president of Bilzerian Consulting Group, Inc.,
a privately held company located in Worcester, Massachusetts, specializing
in small business turnarounds. Prior to that, he was Vice President of
Marketing and Finance at Bay State Abrasive's Division of Dresser
Industries. He has been self-employed for over 15 years.

Paul F. McGrath is a certified public accountant and has served as
President of Mottle McGrath Braney & Flynn, P.C. for over ten years.
Mottle McGrath is a certified public accounting firm, located in Worcester,
Massachusetts, that provides accounting, tax and business advisory services
throughout central New England.

Charlotte C. Spinney is a retired social studies teacher. She taught
at Westborough High School for 41 years and, during that time, she created
the curriculum for the community service component of the school's
Sociology course.

Phyllis A. Stone had served as Vice President and Treasurer of Comey
Oil Co., Inc., located in Westborough, Massachusetts, for 13 years prior to
her retirement in 2001. She had served in various other capacities within
Comey Oil for over 30 years. She is currently President of Schenker
Properties, Inc., a real estate holding company based in Westborough,
Massachusetts. She is past Treasurer of the Regatta Point Community
Sailing Inc. of Worcester, Massachusetts.

James E. Tashjian is a partner in the law firm of Tashjian, Simsarian
& Wickstrom, located in Worcester, Massachusetts. He has engaged in the
general practice of law for over 30 years.

CONTINUING DIRECTORS

David E. Carlstrom has served as President of Carlstrom Pressed Metal
Co., Inc. for over 25 years. Carlstrom Pressed Metal is a contract
manufacturer of light and heavy metal stampings located in Westborough,
Massachusetts.

John L. Casagrande has served as the Senior Vice President and
Treasurer of Westborough Bank since 1993 and of Westborough Financial
Services since its inception in 2000. He joined Westborough Bank after
having been employed as a senior bank officer and certified public
accountant for over 15 years at various times by several financial
institutions (including mutual and stock institutions) and the accounting
firm of Peat Marwick. Mr. Casagrande has been serving as Clerk of
Westborough Financial Services since 2001.

William W. Cotting, Jr. has been an attorney in private practice for
over 20 years. His practice is located in Northborough, Massachusetts.

Walter A. Kinell, Jr. has served as Chairman of the Board for
Westborough Bank since 1994 and for Westborough Financial Services since
its inception in 2000. Mr. Kinell joined Westborough Bank in 1949 as an
assistant treasurer, became President and Chief Executive Officer in 1969
and retired from this position in 1994.

Robert A. Klugman, M.D., F.A.C.P. has practiced general medicine in
Westborough, Massachusetts for over 20 years. Dr. Klugman is currently an
Associate Professor of Clinical Medicine at the University of Massachusetts
Medical School as well as Division Chief of Community Internal Medicine at
the UMASS/ Memorial.

Nelson P. Ball is the owner of Ball Financial Services, Co., located
in Westborough, Massachusetts. He has served as a financial services
consultant for over 35 years and is a member of the National Association of
Securities Dealers, Inc.

Robert G. Daniel was employed in various capacities, including
President and Treasurer, at Carlson Daniel Insurance Agency, Inc., located
in Westborough, Massachusetts from 1958 to 1994. Mr. Daniel sold insurance
from 1994 to 1996 for Allied American Agency following its acquisition of
Carlson Daniel Insurance. From 1996 to 1999, Mr. Daniel served as
President and Treasurer of Westborough Insurance Agency, Inc., a non-active
corporation used as a vehicle for payments from Allied American as
negotiated in connection with the acquisition of Carlson Daniel.
Westborough Insurance Agency, Inc. dissolved in 1999.

Earl H. Hutt has served as an investment advisor and portfolio
manager for private industry for over 20 years.

Roger B. Leland has practiced estate, tax and real estate law at
Leland Law Associates for over 30 years. During that time, he also served
as an insurance broker, selling life and casualty insurance products,
through Leland Insurance Agency, Inc. Leland Law Associates and Leland
Insurance Agency are located in Northborough, Massachusetts.

Joseph F. MacDonough has served as President and Chief Executive
Officer of Westborough Bank since 1994 and of Westborough Financial
Services since its inception in 2000. He joined Westborough Bank in 1981
and served as Vice President and Treasurer until his appointment as
President. Mr. MacDonough serves on the Board of Trustees of The Savings
Bank Employees' Retirement Association and is a certified public
accountant.

RETIRING DIRECTOR

Daniel G. Tear has served as a director of Westborough Financial
Services since 2000 and Westborough Bank since 1985. Mr. Tear has served
as a consultant to businesses in the area of management psychology for the
past 30 years. He will be retiring from the Boards of Directors of both
Westborough Financial Services and Westborough Bank effective January 31,
2002.

===========================================================================
The Board of Directors unanimously recommends a vote "FOR" all of the
nominees for election as directors.
===========================================================================

INFORMATION ABOUT BOARD OF DIRECTORS AND MANAGEMENT

BOARD OF DIRECTORS

Westborough Financial Services's Board of Directors currently
consists of 16 members. Westborough Financial Services's Articles of
Organization provides that the Board shall be divided into three classes.
The terms of five directors expire at the Annual Meeting.

The Board of Directors oversees our business and monitors the
performance of our management. In accordance with our corporate governance
procedures, the Board of Directors does not involve itself in the day-to-
day operations of Westborough Financial Services. Westborough Financial
Services's executive officers and management oversee the day-to-day
operations of Westborough Financial Services. Our directors fulfill their
duties and responsibilities by attending regular meetings of the Board
which are held on a monthly basis. Our directors also discuss business and
other matters with the Chairman, other key executives, and our principal
external advisers (legal counsel, auditors, financial advisors and other
consultants).

The Board of Directors held 12 regular meetings and one special
meeting during the fiscal year ended September 30, 2001. Each incumbent
director attended at least 75% of the meetings of the Board of Directors,
plus meetings of committees on which that particular director served during
this period.

COMMITTEES OF THE BOARD

The Board of Directors of Westborough Financial Services has
established the following committees:

EXECUTIVE The Executive Committee exercises the powers of the Board
COMMITTEE of Directors in between Board meetings.

Directors Carlstrom, Daniel, Klugman, Leland, MacDonough,
and Tashjian currently serve as members of the committee.
Mr. MacDonough is the Chairman of the Committee. The
Executive Committee met 26 times in the 2001 fiscal year.

COMPENSATION The Compensation Committee provides advice and
COMMITTEE recommendations to the Board of Directors in the areas of
employee salaries and benefit programs.

Directors Carlstrom, Daniel and Leland currently serve on
the committee. Mr. Daniel is the Chairman of the
Committee. The Compensation Committee met 11 times in the
2001 fiscal year.

LONG RANGE The Long Range Planning Committee sets long-range goals
PLANNING and objectives and develops plans for their achievement.
COMMITTEE
Directors Carlstrom, Daniel, Kinell, Klugman, Leland,
MacDonough, Tashjian and Tear currently serve on the
committee. Mr. Leland is the Chairman of the Committee.
The Long Range Planning Committee met six times in the
2001 fiscal year.

NOMINATING The Nominating Committee recommends nominees for election
COMMITTEE as directors and reviews, if any, shareholder nominations
to ensure compliance with the notice procedures set forth
in Westborough Financial Services's Bylaws.

Westborough Financial Services's Bylaws set forth a
procedure for shareholders to nominate directors by
notifying the Clerk of Westborough Financial Services in
writing and meeting other requirements set forth in the
Bylaws.

Directors Carlstrom, McGrath and Tear currently serve on
the committee. Mr. McGrath is the Chairman of the
Committee. The Nominating Committee met three times in the
2001 fiscal year to select the nominees for election as
directors at the Annual Meeting.

AUDIT The Audit Committee reviews the annual audit prepared by
COMMITTEE the independent accountants and recommends the appointment
of accountants. The board of directors of Westborough
Financial Services has adopted a written charter for the
Audit Committee.

Directors Bilzerian, Hutt and McGrath currently serve as
members of the committee. Mr. Hutt is the Chairman of the
Committee. All members of the Audit Committee are
independent directors as defined under the National
Association of Securities Dealers' listing standards.

The Audit Committee met six times in the 2001 fiscal year.

AUDIT COMMITTEE REPORT

WESTBOROUGH FINANCIAL SERVICES, INC. AUDIT COMMITTEE REPORT

The following Audit Committee Report is provided in accordance with
the rules and regulations of the Securities and Exchange Commission (the
"SEC"). Pursuant to such rules and regulations, this report shall not be
deemed "soliciting materials," filed with the SEC, subject to Regulation
14A or 14C of the SEC or subject to the liabilities of section 18 of the
Securities Exchange Act of 1934, as amended.

The Audit Committee has reviewed and discussed the audited financial
statements with management. The committee has also reviewed and discussed
with Wolf & Company, P.C., their independent auditors the matters required
to be discussed by SAS 61, as may be modified or supplemented.

The Audit Committee also has received the written disclosures and the
letter from the independent accountants required by Independence Standards
Board Standard No. 1 (Independence Standards Board Standard No.1,
Independence Discussions with Audit Committee), as may be modified or
supplemented, and has discussed with Wolf & Company, P.C. its independence.
Based on the foregoing discussions, the Audit Committee recommended to the
Board of Directors of Westborough Financial Services that the audited
financial statements be included in the Westborough Financial Services's
Annual Report on Form 10-KSB for the year ended September 30, 2001.

Audit Committee of Westborough
Financial Services, Inc.

Earl H. Hutt (Chairman)
Edward S. Bilzerian
Paul F. McGrath

DIRECTORS' COMPENSATION

Meeting Fees. Currently, each non-employee director of Westborough
Bank receives the following fees:

* $250 per Board of Directors meeting attended; and

* $250 per committee meeting attended, with the Chairman of each
committee receiving a fee of $275.

In addition, Directors Carlstrom, Daniel, Klugman, Leland, and
Tashjian receive an annual retainer of $5,000 as members of the Executive
Committee, and Director Kinell receives an annual retainer of $5,000 as
Chairman of the Board. Directors Bilzerian, Hutt and McGrath receive an
annual retainer of $3,500 as members of the Audit Committee. Directors
Ball, Cotting, Spinney, Stone and Tear receive an annual retainer of
$2,500.

Total directors' meeting and committee fees for fiscal 2001 were
$161,300. We do not compensate our employee-directors for service as
directors. Directors are also entitled to the protection of certain
indemnification provisions in our Articles of Organization.

Stock Option Plan and Recognition and Retention Plan. Our directors
are eligible to participate in the Westborough Financial Services, Inc.
2001 Stock Option Plan and the Westborough Financial Services, Inc. 2001
Recognition and Retention Plan. These stock benefit plans are discussed
under "--Benefit Plans -- 2001 Stock Option Plan" and "-- 2001 Recognition
and Retention Plan."

EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS

Biographical information and the business experience of each non-
director executive officer of Westborough Financial Services and
Westborough Bank is set forth below.

In addition to Messrs. Casagrande and MacDonough, Westborough
Financial Services and Westborough Bank have the following executive
officers:

Michael D. Allard, age 39, is Vice President of Marketing and Retail
Sales, a position he has held since 2001. Prior to joining Westborough
Bank in 2001, he served as Senior Vice President of Sales, Marketing and
Branch Administration at Ipswich Bank, a position he held from 2000 to
2001. Prior to that, from 1996 to 2000, he served as Vice President and
Regional Sales and Marketing Coordinator of US Trust Bank. Mr. Allard has
over 15 years retail banking experience.

Vickie A. Bouvier, age 44, has worked for Westborough Bank since 1976
in various capacities and has been the Vice President and Senior Operations
Officer since 1994.

Margaret I. Duquette, age 49, has worked for Westborough Bank as its
Director of Human Resources since 1997. Prior to 1997, she held the
position of Director of Human Resources at Bay State Savings Bank in
Worcester, Massachusetts where she worked for 19 years.

Robert K. McCann, age 44, is currently the Vice President of
Commercial Lending, a position he has held since 2000. Mr. McCann joined
Westborough Bank in 1999 as Assistant Vice President. Prior to joining
Westborough Bank, he worked in a similar capacity at Citizens-Union Savings
Bank, located in Massachusetts. Mr. McCann has over 20 years of finance
and banking experience.

Alexander P. Tautkas, age 57, is currently Vice President and a
Senior Loan Officer of Westborough Bank, an office which he has held since
1997. He has been employed by Westborough Bank in various positions since
1977.

EXECUTIVE COMPENSATION

The following table sets forth compensation paid during the fiscal
year ended September 30, 2001 to the Chief Executive Officer of Westborough
Financial Services and Westborough Bank and to the other most highly
compensated executive officer of Westborough Financial Services and
Westborough Bank whose salary and bonus for 2001 was at least $100,000. We
refer to these individuals as "named executive officers" in this proxy
statement.

Summary Compensation Table

Long Term Compensation
------------------------------------------------
Annual Compensation Awards Payouts
----------------------------------- --------------------- -----------------------
Other Restricted
Annual Stock LTIP All Other
Name and Principal Bonus Compensation Awards Options Payouts Compensation
Positions Year Salary($) ($) ($)(1) ($)(2) (#)(3) ($) ($)(4)
- ------------------ ---- --------- ----- ------------ ---------- ------- ------- ------------

<s> <c> <c> <c> <c> <c> <c> <c> <c>
Joseph F. MacDonough 2001 $205,365 - - $39,186 9,600 - $96,307
President and Chief 2000 $178,644 - - - - - $37,328
Executive Officer 1999 $156,437 $29,371 - - - - $38,405

John L. Casagrande 2001 $103,089 $ 5,000 - $20,624 4,500 - $53,367
Senior Vice President, 2000 $ 99,012 - - - - - $17,531
Treasurer and Clerk 1999 $ 87,331 $19,931 - - - - $18,092

<FN>
- --------------------
<F1> Westborough Bank provides Mr. MacDonough with certain non-cash
benefits and perquisites, such as the use of an automobile, club
membership dues and certain other personal benefits, the aggregate
value of which did not exceed the lesser of $50,000 or 10% of the
total annual salary and annual bonus reported for him in the Summary
Compensation Table.
<F2> Pursuant to the Westborough Financial Services, Inc. 2001 Recognition
and Retention Plan, Mr. MacDonough and Mr. Casagrande were awarded
3,800 and 2,000 shares of restricted stock, respectively as of
January 25, 2001, which vest in 20% increments on April 30th of each
year, with the first installment scheduled to vest on April 30, 2002.
Dividends attributable to such shares are held in the trust fund of
the Westborough Financial Services, Inc. 2001 Recognition and
Retention Plan and are distributed as soon as it is administratively
feasible. The dollar amounts shown in the table for 2001 are based
on the fair market value of a share of common stock on January 25,
2001 which was $10.312. The aggregate fair market value of the
restricted stock awards made to Messrs. MacDonough and Casagrande
were $67,450 and $35,500, respectively, on September 30, 2001, based
on a closing price of $17.75 per share on September 28, 2001, the
last trading day of Westborough Financial Services 2001 fiscal year.
During the fiscal years ended September 30, 2000 and 1999, neither
Westborough Bank nor Westborough Financial Services maintained any
restricted stock plans.
<F3> Represents shares of common stock as to which the named individuals
have the right to acquire beneficial ownership pursuant to the
exercise of stock options. Such options were granted on January 25,
2001 pursuant to the Westborough Financial Services, Inc. 2001 Stock
Option Plan, and vest in 20% increments on January 25th of each year.
The first installments will vest on January 25, 2002.
<F4> Includes the dollar value of the benefit of the following components
to Messrs. MacDonough and Casagrande, respectively, unless otherwise
noted: (1) premiums paid by Westborough Bank under their split dollar
life and group term life insurance arrangements during 2001, 2000 and
1999, respectively: Mr. MacDonough, $89,989, $34,523 and $35,136; and
Mr. Casagrande, $49,415, $15,715 and $16,082; (2) contributions on
behalf of Westborough Bank's 401(k) plan during 2001, 2000 and 1999,
respectively: Mr. MacDonough, $1,700, $1,648 and $1,735; and Mr.
Casagrande, $1,086, $1,000 and $1,004; (3) allocations of common
stock under the ESOP during 2001: Mr. MacDonough, $2,984; and Mr.
Casagrande, $1,767; and (4) accruals under the benefit restoration
plan for Mr. MacDonough during 2001 and 2000 were $336 and $77,
respectively.
</FN>

Westborough Financial Services had entered into separate employment
agreements with Messrs. MacDonough and Casagrande to secure their services
as President and Chief Executive Officer, and Senior Vice President and
Treasurer, respectively. The employment agreements provide for an initial
term of three years in the case of Mr. MacDonough, and two years in the
case of Mr. Casagrande. Commencing on the first anniversary of the
effective date of each agreement, and continuing on each anniversary date
thereafter, the employment agreements may be extended, after review by the
Compensation Committee of the Board of the executive's performance, for an
additional one-year period, so that the remaining term will be three years
in the case of Mr. MacDonough, and two years in the case of Mr. Casagrande.

The employment agreements provide for each executive's base salary to
be reviewed annually by the Board. Each executive's base salary may be
adjusted based on his job performance and the overall performance of
Westborough Financial Services and Westborough Bank. In addition to base
salary, each employment agreement provides for participation in stock,
retirement, and welfare benefit plans and eligibility for fringe benefits
applicable to executive personnel. Mr. MacDonough's agreement provides for
the reimbursement of his ordinary and necessary business expenses, which
specifically include travel and entertainment expenses, expenses related to
the use of an automobile, and fees for membership in clubs and
organizations that he and Westborough Financial Services agree are for
business purposes. Mr. Casagrande's agreement provides for the
reimbursement of his ordinary and necessary business expenses, which
specifically include certain travel and entertainment expenses.

Westborough Financial Services may terminate each executive's
employment at any time with or without cause, and each executive may resign
at any time provided he provides 30 days' prior written notice and fully
cooperates in the transition of his duties. In the event an executive's
employment is terminated without cause during the term of the employment
agreement, the executive will be entitled to severance benefits. These
severance benefits include a lump sum payment equal to the present value of
the base salary and bonus payments that would have been made to the
executive for the remaining term of his employment agreement, assuming the
executive would have been awarded a bonus for each year remaining in the
agreement term equal to the highest annual bonus paid to him in the
preceding three-year period and paid his base salary during the remaining
agreement term at the annual rate in effect as of the termination. In
addition, the executive would be entitled to continue his participation in
the group life, health, dental, accidental death and long-term disability
plans sponsored by Westborough Bank for the remaining term of his
employment agreement. The same severance benefits would be payable if the
executive resigns during the term of the employment agreement following:
failure of the Board to reappoint the executive to the position provided
for in his employment agreement; failure of Westborough Financial Services
to vest in the executive the duties set forth in the agreement; and
Westborough Financial Services's material breach of the agreement. The
employment agreements also provide certain uninsured benefits in the event
the executive's employment terminates because of death or disability.

Under his employment agreement, Mr. MacDonough agrees that for the
three-year period following his termination of employment, he will not take
a position with any competitor that would require him to work within a 50
mile radius of the headquarters of Westborough Financial Services or
Westborough Bank. Mr. Casagrande agrees under his employment agreement
that for a period of two years following his termination of employment he
will not take a position with any competitor that would require him to work
within a 30 mile radius of the headquarters of Westborough Financial
Services or Westborough Bank.

Change in Control Provisions. In the event Mr. MacDonough or Mr.
Casagrande resigns for any reason or is terminated without cause following
a change in control of Westborough Financial Services or Westborough Bank,
he will be entitled to certain severance benefits. These severance
benefits include a lump sum payment equal to the present value of the base
salary and bonus payments that would have been

made to the executive for the remaining term of his employment agreement,
assuming the executive would have been awarded a bonus for each year remaining
in the agreement term equal to the highest annual bonus paid to him in the
preceding three-year period and paid his base salary during the remaining
agreement term at the annual rate in effect as of the termination. However,
in no event will the amount of this lump sum payment be less than 2.99
multiplied by the executive's average annual compensation for the preceding
five years. In addition, the executive will be entitled to continue his
participation in the group life, health, dental, accidental death and
long-term disability plans sponsored by Westborough Bank for the remaining
term of his employment agreement. A second-step conversion will not trigger
additional benefits or accelerate benefits under the employment agreements or
under any other arrangement.

If Westborough Financial Services or Westborough Bank experiences a
change in ownership, a change in effective ownership or control or a change
in the ownership of a substantial portion of their assets as contemplated
by section 280G of the Internal Revenue Code, a portion of any severance
payments under the employment agreements might constitute an "excess
parachute payment" under current federal tax laws. Any excess parachute
payment would be subject to a 20% federal excise tax payable by the
executive. Neither Westborough Bank nor Westborough Financial Services
could claim a federal income tax deduction for an excess parachute payment.
The employment agreements require Westborough Financial Services to
indemnify each executive against the financial effects of the excise tax.

BENEFIT PLANS

Pension Plans. Westborough Bank maintains a tax-qualified pension
plan that covers substantially all employees who have attained age 21 and
have at least one year of service. The following table shows the estimated
aggregate benefits payable under the pension plan upon retirement at age 65
with various years of service and average compensation combinations.

Years of Service
Average --------------------------------------------------------------
Compensation 10 15 20 25 30 35
- ------------ ------- ------- ------- ------- ------- -------

<s> <c> <c> <c> <c> <c> <c>
$100,000 $16,394 $24,590 $32,787 $40,984 $40,984 $40,984
$125,000 $21,019 $31,528 $42,037 $52,547 $52,547 $52,547
$150,000 $25,644 $38,465 $51,287 $64,109 $64,109 $64,109
$160,000 $27,494 $41,240 $54,987 $68,734 $68,734 $68,734
$175,000 $29,344 $44,015 $58,687 $73,359 $73,359 $73,359
$200,000 $29,344 $44,015 $58,687 $73,359 $73,359 $73,359
$300,000 $29,344 $44,015 $58,687 $73,359 $73,359 $73,359
$400,000 $29,344 $44,015 $58,687 $73,359 $73,359 $73,359

The benefits shown in the preceding table are annual benefits payable
in the form of a single life annuity and are not subject to any deduction
for Social Security benefits or other offset amounts. At September 30,
2001, Mr. MacDonough's and Mr. Casagrande's average compensation and
estimated years of service were $163,333 and 23.9 years of service and
$106,233 and 7.75 years of service, respectively.

Mr. MacDonough and Mr. Casagrande are entitled to supplemental
retirement benefits under an Executive Supplemental Compensation Agreement
each has entered into with Westborough Bank. Under each agreement, each
executive is entitled to an annual retirement benefit, payable at age 65 in
the form of a single life annuity, equal to 70% of his benefit computation
base, but reduced by the sum of: 2% multiplied by the executive's annual
primary Social Security benefit multiplied by his years of service, plus
his annual retirement benefit under any tax-qualified defined benefit
pension plan, plus the annual

annuity payable to the executive under his Split Dollar Agreement. Under the
agreements, the executive's benefit computation base is his average annual
compensation during the 12 consecutive calendar quarters in which his
compensation is the highest.

Employee Stock Ownership Plan. This plan is a tax-qualified plan that
covers substantially all employees of Westborough Bank and Westborough
Financial Services who have at least one year of service and have attained
age 21.

The ESOP purchased 44,200 shares of common stock issued by
Westborough Financial Services in its mutual holding company reorganization
with borrowed funds. This loan is for a term of 15 years and calls for
level annual payments of principal and interest. The plan has pledged the
shares as collateral for the loan and holds them in a suspense account.

The plan will release a portion of the pledged shares annually,
allocating the shares released each year among the accountants of
participants in proportion to their salary for the year. For example, if a
participant's base salary for a year represents 1% of the total base
salaries of all participants for the year, the plan would allocate to that
participant 1% of the shares released for the year. Participants direct
the voting of shares allocated to their accounts. Shares in the suspense
account will usually be voted in a way that mirrors the votes which
participants cast for shares in their individual accounts.

This plan may purchase additional shares in the future, and may do so
using borrowed funds, cash dividends, periodic employer contributions or
other cash flow.

Benefit Restoration Plan. Westborough Financial Services has also
adopted a benefit restoration plan for Mr. MacDonough. This plan is
designed to provide Mr. MacDonough with the benefits that would otherwise
be earned by him as a participant in the 401(k) Plan and the employee stock
ownership plan if such benefits were not limited by certain provisions of
the Internal Revenue Code. The benefit restoration plan provides for a
benefit equal in value to the allocations under the employee stock
ownership plan and the 401(k) that would have been made on Mr. MacDonough's
behalf but for these IRS limits, including employer matching contributions
that would have been made under the 401(k) Plan if Mr. MacDonough had
elected to make pre-tax contributions to the 401(k) Plan up to the maximum
percentage of salary permitted under the terms of the plan and the annual
IRS limit on pre-tax contributions did not apply.

Under the benefit restoration plan, a bookkeeping account has been
established for Mr. MacDonough which will be credited with a number of
"stock units" equal to the number of shares that could not be allocated on
his behalf under the employee stock ownership plan each year because of the
IRS limits. The value of this supplemental employee stock ownership plan
bookkeeping account at any time is equal to the number of stock units
credited to the account multiplied by the current fair market value per
share. A bookkeeping account also has been established for Mr. MacDonough
which will be credited each year with an amount equal to the employer
matching contributions that could not be allocated to his account under the
401(k) Plan because of the IRS limits. Each year, this supplemental
employer matching contribution bookkeeping account will be credited with
hypothetical investment earnings as if the amount credited to the account
were invested in certain investment funds selected by the Compensation
Committee.

Unless a different time or form of distribution is elected by Mr.
MacDonough within the 30-day period following the effective date of the
plan, the value of his supplemental employee stock ownership plan and
employer matching contribution bookkeeping accounts will be paid to him in
one lump sum cash payment as soon as possible following the end of the
calendar year in which his employment terminates.

The benefit restoration plan is an unfunded plan, and benefits payable
thereunder will be paid from the general assets of Westborough Financial
Services.

Officers' Deferred Compensation Plan. Westborough Financial Services
also maintains the Officers' Deferred Compensation Plan of Westborough
Financial Services, Inc., a non-qualified plan, in order to offer eligible
executives the opportunity to defer the receipt of a portion of their
income in a manner that defers the taxation of such income.

2001 Stock Option Plan. The Westborough Financial Services, Inc. 2001
Stock Option Plan was adopted by our Board of Directors and approved by our
shareholders at an annual meeting held on January 25, 2001. Article IX of
the Westborough Financial Services, Inc. 2001 Stock Option Plan to allow
for acceleration of vesting upon retirement of the option holder or a
change in control of Westborough Financial Services, terms that are defined
in the plans, is subject to the approval of our shareholders at this Annual
Meeting. For information on this proposal, please see "Proposal 2."

The following table summarizes the grants of options that were made
to the named executive officers pursuant to the Westborough Financial
Services, Inc. 2001 Stock Option Plan during fiscal 2001. The Westborough
Financial Services, Inc. 2001 Stock Option Plan does not provide for the
grant of stock appreciation rights.

Option/SAR Grants in Fiscal Year 2001(1)
Individual Grants

Potential Realizable
Percent of Value At Assumed
Securities Options/SARs Annual Rates of Stock
Underlying Granted to Exercise or Price Appreciation for
Options/SARs Employees in Base Price Option Term
Granted Fiscal Year ($ Per Expiration ----------------------
Name (#) (%) Share) Date 5%($) 10%($)
- -------------------- ------------ ------------ ----------- ---------- ------ -------

<s> <c> <c> <c> <c> <c> <c>
Joseph F. MacDonough 9,600 34.2 10.312 1/25/11 62,258 157,773
John L. Casagrande 4,500 16.0 10.312 1/25/11 29,183 73,956

<FN>
- --------------------
<F1> All options were granted on January 25, 2001, the date of shareholder
approval of the Westborough Financial Services, Inc. 2001 Stock
Option Plan and vest at the rate of 20% per year beginning on January
25, 2002, with accelerated vesting in the case of death or
disability, or if, shareholders approve Proposal 2 (see "Proposal 2 -
- Approval of Article IX of the Westborough Financial Services, Inc.
2001 Stock Option Plan), retirement of the option holder or change in
control of Westborough Financial Services while in the service of
Westborough Financial Services or Westborough Bank.
</FN>

The following table provides the value for "in-the-money" options,
which represent the positive spread between the exercise price of any such
existing stock options and the closing price per share of the common stock
on September 28, 2001, the last trading day of the Westborough Financial
Services's 2001 fiscal year, which was $17.75 per share. The first
installment of options will become exercisable on January 25, 2002.

2001 Fiscal Year End Option/SAR Values

Number of Securities
Shares Value Underlying Unexercised Value of Unexercised
Acquired Realized Options/SARs at Fiscal In-the-Money Options/SARs
on on Year-end at Fiscal Year-end
Exercise Exercise (#) ($)
Name (#) ($) Exercisable/Unexercisable(1) Exercisable/Unexercisable(2)
- -------------------- -------- -------- ---------------------------- ----------------------------

<s> <c> <c> <c> <c>
Joseph F. MacDonough N/A N/A 0/9,600 0/170,400
John L. Casagrande N/A N/A 0/4,500 0/79,875

<FN>
- --------------------
<F1> All options were granted on January 25, 2001, and will vest at the
rate of 20% per year beginning on January 25, 2002.
<F2> The closing price per share of common stock on September 28, 2001,
the last trading day before the fiscal year ended September 30, 2001,
was $17.75, and all options have an exercise price of $10.312 per
share, which equals a spread of $7.438 per share.
</FN>

2001 Recognition and Retention Plan. The Westborough Financial
Services, Inc. 2001 Recognition and Retention Plan was adopted by our Board
of Directors and approved by our shareholders at the annual meeting held on
January 25, 2001. Article X of the Westborough Financial Services, Inc.
2001 Recognition and Retention Plan to allow for acceleration of vesting
upon retirement or change in control of Westborough Financial Services,
terms which are defined in the plans, is subject to the approval of our
shareholders at this annual meeting. For more information on this proposal,
please see "Proposal 3."

TRANSACTIONS WITH CERTAIN RELATED PERSONS

Westborough Bank does not make loans to its executive officers or
employees. However, Westborough Bank does make loans to its non-employee
directors. These loans bear interest at the same rate as loans offered to
non-director borrowers and have the same underwriting terms that apply to
non-director borrowers. The outstanding principal balance of such loans to
directors totaled $274,438 or 1.0%, of Westborough Financial Services's
total equity at September 30, 2001.

Westborough Financial Services retains the law firm of Tashjian,
Simsarian & Wickstrom. Mr. James E. Tashjian, a director of Westborough
Financial Services and Westborough Bank, and a trustee of Westborough
Bancorp, MHC, has been a partner of Tashjian, Simsarian & Wickstrom since
1995. The legal fees received by the law firm for professional services
rendered to Westborough Bank during the year ended September 30, 2001 did
not exceed 5% of the firm's gross revenues.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires Westborough Financial Services's directors and executive officers,
and persons who own more than 10% of Westborough Financial Services's
common stock, to report to the SEC their initial ownership of Westborough
Financial Services's common stock and any subsequent changes in that
ownership. Specific due dates for these reports have been established by
the SEC and Westborough Financial Services is required to disclose in this
proxy statement any late filings or failures to file.

To Westborough Financial Services's knowledge, based solely on its
review of the copies of such reports furnished to Westborough Financial
Services and written representations that no other reports were required
during the fiscal year ended September 30, 2001, all Section 16(a) filing
requirements applicable to Westborough Financial Services's executive
officers and directors during fiscal 2001 were met.

------------------------------
PROPOSAL 2
APPROVAL OF ARTICLE IX OF
THE WESTBOROUGH FINANCIAL SERVICES, INC.
2001 STOCK OPTION PLAN
------------------------------

GENERAL PLAN INFORMATION

The shareholders of Westborough Financial Services approved the
Westborough Financial Services, Inc. 2001 Stock Option Plan (the "Stock
Option Plan"), and the plan became effective on January 25, 2001. The
purpose of the 2001 Stock Option Plan is to enable Westborough Financial
Services to grant certain officers, employees and outside directors a
right, known as an option, to purchase shares of the common stock of
Westborough Financial Services at a stated price during a specified period
or term. If the option is not exercised during its term, it will expire.
The 2001 Stock Option Plan is not an employee pension or welfare benefit
Plan. As a result, the 2001 Stock Option Plan is not subject to the
Employee Retirement Income Security Act of 1974, as amended.

Pursuant to regulations of the Massachusetts Division of Banks
applicable to management stock benefit plans established or implemented by
a savings bank or its holding company within one year following the
completion of a mutual holding company reorganization, the 2001 Stock
Option Plan contains certain restrictions and limitations, including among
others, provisions requiring the vesting of options granted to occur no
more rapidly than 20% per year beginning on the first anniversary of the
date the stock option plan is approved by shareholders, with accelerated
vesting only in cases of death or disability of an option holder.

In accordance with the regulations of the Massachusetts Division of
Banks, Article IX of the 2001 Stock Option Plan, which was included in the
2001 Stock Option Plan as approved by shareholders on January 25, 2001, but
by its terms will become effective only if approved by the shareholders of
Westborough Financial Services again at a meeting held after February 15,
2001, eliminates such restrictions and limitations. Article IX does not
increase the number of shares reserved for issuance under the 2001 Stock
Option Plan, decrease the price per share at which options were granted
under the 2001 Stock Option Plan or alter the classes of individuals
eligible to participate in the 2001 Stock Option Plan. In the event that
Article IX is not approved by the shareholders at the Annual Meeting,
Article IX will not take effect, but the 2001 Stock Option Plan will remain
in effect.

The principal provisions of the 2001 Stock Option Plan, including the
provisions set forth in Article IX, are summarized below. The full text of
Article IX of the 2001 Stock Option Plan is set forth as Appendix A to this
proxy statement and the summary of Article IX provided below is qualified
in its entirety by such reference.

PURPOSE OF THE 2001 STOCK OPTION PLAN

The 2001 Stock Option Plan is a long-term incentive compensation
plan. Its purpose is to promote the growth and profitability of
Westborough Financial Services by providing its key officers, employees and
directors with an "equity stake" in Westborough Financial Services that
will encourage them to achieve corporate goals and increase the value of
Westborough Financial Services and its subsidiaries. The 2001 Stock Option
Plan will also assist Westborough Financial Services in attracting and
retaining officers, employees and directors of outstanding caliber and
experience through future grants to be made from the 2001 Stock Option
Plan's share reserve.

DESCRIPTION OF THE 2001 STOCK OPTION PLAN

Administration. The plan will be administered by the members of the
Compensation Committee of Westborough Financial Services who are
"disinterested directors" under the federal tax and securities laws. In
general, disinterested directors are directors who (1) are not, and never
were, officers or employees of Westborough Financial Services or
Westborough Bank; and (2) do not receive material compensation from
Westborough Financial Services or Westborough Bank except for service as a
director. The compensation committee must have at least two members and
has broad discretionary powers.

Stock Subject to the 2001 Stock Option Plan. Westborough Financial
Services has reserved 55,348 shares of its common stock for issuance upon
the exercise of options under the 2001 Stock Option Plan. Such shares may
be authorized and unissued shares or shares previously issued that
Westborough Financial Services has reacquired. Any shares subject to
grants under the option plan which expire or are terminated, forfeited or
canceled without having been exercised or vested in full, shall be
available for new option grants. As of September 30, 2001, the aggregate
fair market value of the shares reserved for issuance under the plan was
$982,427, which was based on the closing sales price per share of common
stock of $17.75 on the OTC Bulletin Board on September 28, 2001, the last
trading day before the fiscal year ended September 30, 2001.

Eligibility. The compensation committee for the plan selects the
people who receive stock option grants. Any employee, officer or director
of Westborough Financial Services, Westborough Bank or any affiliate
approved by the compensation committee may be selected to receive option
grants. As of September 30, 2001, 6 employees and 14 directors and
trustees of Westborough Financial Services, Westborough Bank and
Westborough Bancorp, MHC who are not also employees or officers were
selected by the compensation committee to receive option grants.

Terms and Conditions of Options. The compensation committee sets the
terms and conditions of the stock options that it grants. In setting terms
and conditions, it must observe the following restrictions:

* It may not grant options to purchase more than 13,837 shares to any
one employee. In addition, it may not grant options to purchase more
than 2,767 shares of our common stock to any one non-employee
director or options to purchase more than 16,604 shares of our common
stock to all outside directors in the aggregate.

* It may not grant a stock option with a purchase price that is less
than the fair market value of a share of our common stock on the date
it grants the stock option.

* It may not grant a stock option with a term that is longer than 10
years.

* It may not grant options that become exercisable more rapidly than at
the rate of 20% per year measured from the date we receive
shareholder approval for the plan, with acceleration permitted only
in the case of death or disability. If, however, shareholders
approve Article IX of the 2001 Stock Option Plan, accelerated vesting
of stock options would be permitted upon the retirement of the option
holder or change in control of Westborough Financial Services. For
more information, please see below "-- Purpose of Article IX of the
2001 Stock Option Plan."

* It may not grant options with an effective date that is before the
date that we receive shareholder approval for the plan.

The committee may grant incentive stock options that qualify for
special federal income tax treatment or non-qualified stock options that do
not qualify for special federal income tax treatment. Incentive stock
options are subject to certain additional restrictions under the Internal
Revenue Code and the plan.

Upon the exercise of an option, the exercise price of the option must
be paid in full. Payment may be made in cash, common stock of Westborough
Financial Services already owned by the option holder, shares to be
acquired by the option holder upon exercise of the option, or in such other
consideration as the compensation committee authorizes. Options may be
transferred prior to exercise only to certain family members, certain non-
profit organizations, and on death of the option holder.

Mergers and Reorganizations; Adjustments for Extraordinary Dividends.
The number of shares available under the plan, the maximum limits on option
grants to individual officers and directors and to non- employee directors
in the aggregate, and the number of shares subject to outstanding options
will be adjusted to reflect any merger, consolidation or business
reorganization in which Westborough Financial Services is the surviving
entity, and to reflect any stock split, stock dividend or other event
generally affecting the number of shares. If a merger, consolidation or
other business reorganization occurs and Westborough Financial Services is
not the surviving entity, outstanding options may be canceled upon written
notice to the option holder so long as the option holder receives payment
determined by the Board to be of a value equivalent to the value of the
canceled options.

TERMINATION OR AMENDMENT OF THE OPTION PLAN

This plan will be in effect for a ten-year period that began on
January 25, 2001, the date of shareholder approval; and will end on January
25, 2011. The Board of Directors may suspend or terminate the plan before
then. It may also amend this plan at any time and in any respect. Any
amendment that would change the class of eligible employees, increase the
number of stock options that may be granted to any person or in total, or
reduce the minimum option price must first be approved by our shareholders.

PURPOSE OF ARTICLE IX OF THE 2001 STOCK OPTION PLAN

Currently, the 2001 Stock Option Plan requires that options granted
become exercisable no more rapidly than 20% per year beginning on the first
anniversary date of shareholder approval, with accelerated vesting only
upon death or disability of the option holder. Approval of Article IX
would permit accelerated vesting upon a change in control of Westborough
Financial Services or the retirement of the option holder, as such terms
are defined in the 2001 Stock Option Plan. Pursuant to Article IX, all
options that are outstanding as of the date of a change in control of
Westborough Financial Services, and as of the date of an option holder's
retirement may automatically become fully vested and exercisable.

The provisions of Article IX, however, will not be applicable, and
will be of no force or effect, unless and until the shareholders of
Westborough Financial Services have approved such provisions by an
affirmative vote of the holders of a majority of the shares represented in
person or by proxy and entitled to vote at a meeting of shareholders duly
called and held after February 15, 2001.

FEDERAL INCOME TAX CONSEQUENCES

The following discussion is intended to be a summary and is not a
comprehensive description of the federal tax laws, regulations and policies
affecting Westborough Financial Services and recipients of stock option
grants under the plan. Any descriptions of the provisions of any law,
regulation or policy are qualified in their entirety by reference to the
particular law, regulation or policy. Any change in applicable law or
regulation or in the policies of various taxing authorities may have a
significant effect on this summary. The plan is not a qualified plan under
section 401(a) of the Internal Revenue Code.

Federal Tax Consequences for Option Recipients. Incentive stock
options will not create federal income tax consequences when they are
granted. If they are exercised during employment or within three months
after termination of employment, the exercise will not create federal
income tax consequences either. When the shares acquired on exercise of an
incentive stock option are sold, the seller must pay federal income taxes
on the amount by which the sales price exceeds the purchase price. This
amount will be taxed at capital gains rates if the sale occurs at least two
years after the option was granted and at least one year after the option
was exercised. Otherwise, it is taxed as ordinary income.

Incentive stock options that are exercised more than one year after
termination of employment due to death or disability or three months after
termination of employment for other reasons are treated as non- qualified
stock options. Non-qualified stock options will not create federal income
tax consequences when they are granted. When they are exercised, federal
income taxes at ordinary income tax rates must be paid on the amount by
which the fair market value of the shares acquired by exercising the option
exceeds the exercise price. When an option holder sells shares acquired by
exercising non-qualified stock option, he or she must pay federal income
taxes on the amount by which the sales price exceeds the purchase price
plus the amount included in ordinary income at option exercise. This
amount will be taxed at capital gains rates, which will vary depending upon
the time that has elapsed since the exercise of the option. A cash payment
under the plan's change of control provisions is taxed as if it were the
exercise of a non-qualified stock option followed immediately by a resale
of the stock acquired by exercising the option.

Federal Tax Consequences for Westborough Financial Services. When a
non-qualified stock option is exercised, Westborough Financial Services may
be allowed a federal income tax deduction for the same amount that the
option holder includes in his or her ordinary income. When an incentive
stock option is exercised, there is no tax deduction unless the shares
acquired are resold sooner than two years after the option was granted or
one year after the option was exercised. A cash payment under the plan's
change of control provisions is deductible as if it were the exercise of a
non-qualified stock option. The Internal Revenue Code places an annual
limit of $1.0 million each on the tax deduction which we may claim in any
fiscal year for the compensation of our chief executive officer and for the
compensation of our four next most highly compensated executive officers
whose salary and bonus for the fiscal year in question equals or exceeds
$100,000. There is an exception to this limit for so-called "qualified
performance-based compensation." We have designed this plan with the
intention that the stock options that we grant will constitute qualified
performance-based compensation. As a result, we do not believe that this
limit will impair our ability to claim federal income tax deductions that
are otherwise available when an option holder exercises a non-qualified
stock option.

The preceding statements summarize the general principles of current
federal income tax law applicable to options that may be granted under the
plan. State and local tax consequences may also be significant.

===========================================================================
The Board of Directors unanimously recommends a vote "FOR" the approval of
Article IX of the Westborough Financial Services, Inc. 2001 Stock Option
Plan.
===========================================================================

------------------------------
PROPOSAL 3
APPROVAL OF ARTICLE X OF
THE WESTBOROUGH FINANCIAL SERVICES, INC.
2001 RECOGNITION AND RETENTION PLAN
------------------------------

GENERAL PLAN INFORMATION

The shareholders of Westborough Financial Services approved the
Westborough Financial Services, Inc. 2001 Recognition and Retention Plan
(the "2001 Recognition and Retention Plan"), and the plan became effective
on January 25, 2001. The 2001 Recognition and Retention Plan allows
Westborough Financial Services to grant restricted stock awards to certain
officers, employees and outside directors. A "restricted stock award"
constitutes a right to receive a certain number of shares of common stock
upon the award holder's satisfaction of certain requirements. As a general
rule, if the award holder fails to fulfill the requirements contained in
the restricted stock award, the award will not vest. Instead, the award
will be forfeited and canceled. The 2001 Recognition and Retention Plan,
like the 2001 Stock Option Plan, is not subject to Employee Retirement
Income Security Act of 1974, as amended, and is not a tax-qualified plan
under the Internal Revenue Code.

Pursuant to regulations of the Massachusetts Division of Banks
applicable to stock plans established or implemented within one year
following the completion of a mutual holding company reorganization, the
2001 Recognition and Retention Plan contains certain restrictions and
limitations, including among others, provisions requiring the vesting of
awards granted to occur no more rapidly than 20% per year beginning on the
first anniversary of the date the 2001 Recognition and Retention Plan was
approved by shareholders, with accelerated vesting only in the case of
death or disability of an award holder.

In accordance with regulations of the Massachusetts Division of
Banks, Article X of the 2001 Recognition and Recognition Plan, which was
included in the 2001 Recognition and Retention Plan as approved by the
shareholders on January 25, 2001, but by its terms will become effective
only if approved by the shareholders of Westborough Financial Services
again at a meeting held after February 15, 2001, eliminates such
restrictions and limitations. Article X does not increase the number of
shares reserved for issuance under the 2001 Recognition and Retention Plan,
decrease the price per share at which the awards were granted under the
2001 Recognition and Retention Plan or alter the classes of individuals
eligible to participate in the 2001 Recognition and Retention Plan. In the
event that Article X is not approved by the shareholders at the Annual
Meeting, Article X will not take effect, but the 2001 Recognition and
Retention Plan will remain in effect.

The principal provisions of Article X are summarized below. The full
text of Article X is set forth in Appendix B to this proxy statement, to
which reference is made, and the summary of Article X provided below is
qualified in its entirety by such reference.

PURPOSE OF THE 2001 RECOGNITION AND RETENTION PLAN

The 2001 Recognition and Retention Plan is a long-term incentive
compensation plan. Its purpose is to promote the growth and profitability
of Westborough Financial Services by providing key personnel and directors
with an incentive to achieve corporate objectives. Awards granted under
the 2001 Recognition and Retention Plan are also used to attract and retain
individuals of outstanding competence and to provide such individuals with
an equity interest in Westborough Financial Services. The 2001 Recognition
and Retention Plan will also assist Westborough Financial Services in
attracting and retaining top-notch officers, employees and directors
through future awards to be made from the 2001 Recognition and Retention
Plan's share reserve.

DESCRIPTION OF THE 2001 RECOGNITION AND RETENTION PLAN

Stock Subject to the 2001 Recognition and Retention Plan.
Westborough Financial Services will establish a trust and will contribute
certain amounts of money or property to be determined by the Board, in its
discretion. No contributions by participants will be permitted. The
trustee will invest the assets of the trust primarily in the shares of our
common stock that will be used to make restricted stock awards. It is
currently anticipated that the trust will purchase common stock on the open
market, or in private transactions. The trust is not expected to purchase
previously authorized but unissued shares from Westborough Financial
Services. The trust is not authorized to purchase more than 22,139 shares
of common stock of Westborough Financial Services. As of September 30,
2001, the aggregate fair market value of the shares of common stock to be
purchased under this plan was $392,967, which was based on the closing
sales price per share of common stock of $17.75 on the OTC Bulletin Board
on September 28, 2001, the last trading day before the fiscal year ended
September 30, 2001.

Eligibility. The compensation committee for the plan selects the
people who receive restricted stock awards under the 2001 Recognition and
Retention Plan. Any employee, officer or director of Westborough Financial
Services, Westborough Bank or any affiliate approved by the compensation
committee may be selected to receive stock awards. As of September 30,
2001, 6 employees and 14 directors and trustees of Westborough Financial
Services, Westborough Bank and Westborough Bancorp, MHC who are not also
employees or officers have been selected by the compensation committee to
receive stock awards.

Terms and Conditions of Awards. The compensation committee may, in
its discretion, grant awards of restricted stock to eligible individuals,
up to a maximum of 22,139 shares. The compensation committee will
determine at the time of the grant the number of shares of common stock
subject to an award, the vesting schedule applicable to the award and may,
in its discretion, establish other terms and conditions applicable to the
award. In setting terms and conditions, it must observe the following
restrictions:

* It may not grant restricted stock awards for more than 5,534 shares
of our common stock to any one officer or employee, more than 1,106
shares of our common stock to any one non-employee director, or more
than 6,641 shares to all non-employee directors in the aggregate.

* It may not grant restricted stock awards that become exercisable more
rapidly than at the rate of 20% per year measured from the date we
receive shareholder approval for the Plan, with acceleration
permitted only in cases of death or disability. If, however,
shareholders approve Article X of the 2001 Recognition and Retention
Plan, accelerated vesting of stock awards would be permitted upon
retirement of the award holder or change in control of Westborough
Financial Services. For more information, please see below "--
Purpose of Article X of the 2001 Recognition and Retention Plan."

* It may not grant restricted stock awards with an effective date that
is before the date that we receive shareholder approval for the plan.

As a general rule, shares of our common stock that are subject to a
restricted stock award are held in trust for the benefit of the award
recipient until vested and, when vested, are transferred from the trust to
the award recipient. While the shares are held in the trust, the award
recipient receives dividends and exercises voting rights. In the
alternative, the compensation committee may authorize the immediate
distribution of the restricted shares to the award recipient in the form of
a stock certificate bearing a legend containing the applicable vesting
restrictions.

Mergers and Reorganizations. The number of shares available under
the plan, the maximum limits on restricted stock awards to individual
officers and directors and to non-employee directors in the aggregate, and
any outstanding awards will be adjusted to reflect any merger,
consolidation or business reorganization in which Westborough Financial
Services is the surviving entity, and to reflect any stock split, stock
dividend or other event generally affecting the number of shares. If a
merger, consolidation or other business reorganization occurs and
Westborough Financial Services is not the surviving entity, the trustee
will hold any money, stock, securities or other property received in the
trust fund, and adjust any award by allocating such money, stock,
securities or other property to the individual eligible for the award.

TERMINATION OR AMENDMENT

The Board has the authority to suspend or terminate the plan in whole
or in part at any time by giving written notice to the compensation
committee, but the plan may not be terminated while there are outstanding
awards that will vest in the future. Upon the termination of the plan, the
trustee will make distributions from the trust as directed by the
compensation committee and will return any remaining assets of the trust to
Westborough Financial Services.

PURPOSE OF ARTICLE X OF THE 2001 RECOGNITION AND RETENTION PLAN

Currently, the shares covered by an award will become vested in
accordance with the terms of the award and, as soon as practicable
following such vesting, the trustee will transfer the shares to the
recipient. Currently, the 2001 Recognition and Retention Plan requires
that awards granted will vest no more rapidly than 20% per year beginning
on the first anniversary date of shareholder approval of the plan with
accelerated vesting only upon death or disability. Approval by
shareholders of Article X would permit accelerated vesting upon a change in
control of Westborough Financial Services or the retirement of an award
holder, as such terms are defined in the 2001 Recognition and Retention
Plan.

The provisions of Article X, however, will not be applicable, and
will be of no force or effect, unless and until the shareholders of
Westborough Financial Services have approved such provisions by an
affirmative vote of the holders of a majority of the shares represented in
person or by proxy and entitled to vote at a meeting of shareholders duly
called and held after February 15, 2001 approve the proposal.

===========================================================================
The Board of Directors unanimously recommends a vote "FOR" the approval of
Article X of the Westborough Financial Services, Inc. 2001 Recognition and
Retention Plan.
===========================================================================

------------------------------
PROPOSAL 4
RATIFICATION OF APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS
------------------------------

The Board of Directors has appointed Wolf & Company, P.C. to act as
the independent public accountants for Westborough Financial Services for
the fiscal year ending September 30, 2002, and we are asking shareholders
to ratify the appointment. Representatives of Wolf & Company, P.C. are
expected to attend the Annual Meeting.

During the fiscal year ended September 30, 2001, Westborough
Financial Services retained and paid the following fees to Wolf & Company,
P.C. for services rendered:

* Audit services, including quarterly reviews of interim
financial information, of $69,060; and

* All other fees, including tax compliance, of $19,500.

===========================================================================
The Board of Directors unanimously recommends a vote "FOR" the ratification
of the appointment of Wolf & Company, P.C. as independent public
accountants for Westborough Financial Services.
===========================================================================

ADDITIONAL INFORMATION

INFORMATION ABOUT SHAREHOLDER PROPOSALS

Under the proxy solicitation regulations of the SEC, if you wish to
submit a proposal to be included in our proxy statement for the 2003 Annual
Meeting, we must receive it by August 29, 2002. SEC rules contain
standards as to whether shareholder proposals are required to be included
in the proxy statement. Any such proposal will be subject to 17 C.F.R.
[SECTION] 240.14a-8 of the rules and regulations promulgated by the SEC.

In addition, under Westborough Financial Services's Bylaws, if you
wish to bring other business before an annual meeting (which is not
included in the proxy statement for the 2003 Annual Meeting), you must be a
shareholder of record and have given timely notice in writing to the Clerk
of Westborough Financial Services according to the procedures set forth in
our Bylaws.

By Order of the Board of Directors,

/s/ John L. Casagrande

John L. Casagrande
Clerk

Westborough, Massachusetts
December 28, 2001

===========================================================================
To assure that your shares are represented at the Annual Meeting, please
complete, sign, date and promptly return the accompanying proxy card in the
postage-paid envelope provided.
===========================================================================

Appendix A
----------

Article IX of the Westborough Financial Services, Inc. 2001 Stock Option Plan
Additional Provisions Subject to Further Shareholder Approval

Section 9.1 Accelerated Vesting Upon Retirement or Change in Control.

Notwithstanding anything in the Plan to the contrary, but subject to
section 9.3: (a) in the event that any Eligible Employee terminates
service as an Employee of all Employers, or in the event that an Eligible
Director terminates service as a voting member of all Employers' boards of
directors, and such termination constitutes a Retirement, all Options
outstanding to such holder on the date of his Retirement shall, to the
extent not already exercisable, become exercisable upon Retirement; and (b)
in the event of a Change in Control, all Options outstanding under the Plan
on the date of the Change in Control shall, to the extent not already
exercisable, become exercisable on the date of the Change in Control.

Section 9.2 Discretion to Establish Vesting Schedules.

Notwithstanding anything in the Plan to the contrary, but subject to
section 9.3, section 5.5(b) shall apply in determining the exercisability
of Options granted to Eligible Employees only if no different vesting
schedule is established by the Committee and specified in the agreement
evidencing an outstanding Option.

Section 9.3 No Effect Prior to Shareholder Approval.

Notwithstanding anything contained in this Article IX to the
contrary, the provisions of this Article IX shall not be applied, and shall
be of no force or effect, unless and until the shareholders of the Company
shall have approved such provisions by affirmative vote of the holders of a
majority of the Shares represented in person or by proxy and entitled to
vote at a meeting of shareholders duly called and held after February 15,
2001.

A-1

Appendix B
----------

Article X of the Westborough Financial Services, Inc. 2001
Recognition and Retention Plan
Additional Provisions Subject to Further Shareholder Approval

Section 10.1 Accelerated Vesting Upon Retirement or Change in Control.

Notwithstanding anything in the Plan to the contrary, but subject to
section 10.3, unless otherwise determined by the Committee and specified in
the Award Notice relating to an Award: (a) in the event that any Eligible
Employee terminates service as an Employee of all Employers, or in the
event that an Eligible Director terminates service as a voting member of
all Employers' boards of directors, and such termination constitutes a
Retirement, all Awards outstanding to such holder on the date of his
Retirement shall, to the extent not already vested, become vested upon
Retirement; and (b) in the event of a Change of Control, all Awards
outstanding under the Plan on the date of the Change of Control shall, to
the extent not already vested, become vested on the date of the Change of
Control.

Section 10.2 Discretion to Establish Vesting Schedules.

Notwithstanding anything in the Plan to the contrary, but subject to
section 10.3, section 7.1 shall apply in determining the vesting of Awards
only if no different vesting schedule is established by the Committee and
specified in the Award Notice.

Section 10.3 No Effect Prior to Stockholder Approval.

Notwithstanding anything contained in this Article X to the contrary,
the provisions of this Article X shall not be applied, and shall be of no
force or effect, unless and until the shareholders of the Company shall
have approved such provisions by affirmative vote of the holders of a
majority of the Shares represented in person or by proxy and entitled to
vote at a meeting of shareholders duly called and held after February 15,
2001.

B-1

REVOCABLE PROXY

Westborough Financial Services, Inc.

This proxy is solicited on behalf of the Board of Directors of
Westborough Financial Services, Inc.
for the Annual Meeting of Stockholders to be held on
Thursday, January 31, 2002

The undersigned stockholder of Westborough Financial Services, Inc.
hereby appoints David E. Carlstrom, Walter A. Kinell, Jr., and Roger B.
Leland, or each of them, with full powers of substitution, to attend and act
as proxy for the undersigned and to vote all shares of common stock of
Westborough Financial Services, Inc. which the undersigned may be entitled to
vote at the Annual Meeting of Stockholders to be held at the Wyndham
Westborough Hotel located at 5400 Computer Drive, Westborough, Massachusetts
01581, on Thursday, January 31, 2002, at 3:00 p.m., local time, and at any
adjournment or postponement thereof.

This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. If you do not give us any
direction, this proxy will be voted FOR the proposals in Items 1, 2, 3 and 4.

(Continued on Reverse Side)

PLEASE COMPLETE, SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE
AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE.

The Board of Directors recommends Please mark your vote as
a vote "FOR"each of the proposals indicated in this example. [ ]
in Items 1, 2, 3 and 4.

I will attend the annual
meeting. [X]

(Please mark box if you plan
to attend the annual meeting.)
(Important: If your shares are
not registered in your name,
you will need additional
documentation to attend the
annual meeting.)

1. Election of five directors for terms of three years each.

Nominees: Edward S. Bilzerian, Paul F. McGrath, Charlotte C. Spinney,
Phyllis A. Stone and James E. Tashijian.
FOR WITHHOLD
all nominees (except as for all
otherwise indicated) nominees
[ ] [ ]

Instruction: TO WITHHOLD AUTHORITY to vote for any individual nominee, write
that nominee's name in the space provided:

___________________________________________________________________________
2. Approval of Article IX of the Westborough Financial Services, Inc.
2001 Stock Option Plan, allowing for, among other things, acceleration
of vesting upon retirement or change in control.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]

3. Approval of Article X of the Westborough Financial Services, Inc.
2001 Recognition and Retention Plan, allowing for, among other things,
acceleration of vesting upon retirement or change in control.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]

4. Ratify the appointment of Wolf & Company, P.C. as our independent
public accountants for the fiscal year ending September 30, 2002.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]

The undersigned hereby acknowledges
receipt of the Notice of Annual
Meeting of Stockholders and the proxy
statement for the annual meeting.

(Signature(s)) _____________________

Dated: ______________________, _____
Please sign exactly as your name
appears on this proxy. Joint owners
should each sign personally. If
signing as attorney, executor,
administrator, trustee or guardian,
please include your full title.
Corporate or partnership proxies
should be signed by an authorized
officer.