Exhibit 10.3

AMENDMENT TO EMPLOYMENT AGREEMENT

     This Amendment to Employment Agreement ("Amendment") is entered into by and
among Northway Financial, Inc., a New Hampshire chartered corporation
("Northway"), The Berlin City Bank, a New Hampshire chartered bank and wholly
owned subsidiary of Northway with its principal office located in New Hampshire
(Northway and The Berlin City Bank are hereinafter collectively referred to as
the "Employer"), and William J. Woodward (the "Executive").

     WHEREAS, the Employer and the Executive are parties to an Employment
Agreement dated September 30, 1997 (the "Employment Agreement"); and

     WHEREAS, the Employer and the Executive have determined that it is in their
mutual best interest to amend the Employment Agreement as set forth below;

     NOW, THEREFORE, the Employer and the Executive agree as follows:

             The Employment Agreement is amended by adding the following to the
     end of Section 7(d) ("Noncompetition and Nonsolicitation"):

             Notwithstanding the foregoing, in the event that the Executive
             becomes entitled to Termination Benefits pursuant to Section 6(f)
             ("Termination Following a Change of Control"), this Section 7(d)
             shall not apply to the Executive with respect to the Executive's
             activities during any period following the termination of the
             Executive's employment.

             This Amendment shall be effective as of January 1, 1999 (the
     "Effective Date").


     IN WITNESS WHEREOF, this Amendment has been executed as a sealed instrument
by the Employer, by its duly authorized officer, and by the Executive, as of the
Effective Date.

                                                   NORTHWAY FINANCIAL, INC.
Attest:
                                                   By:     Fletcher W. Adams
                                                           -------------------
By:   /S/ Donald R. Hatt                             Name: Fletcher W. Adams
          --------------------                       Title: Vice Chairman
Name:     Donald R. Hatt                             
Title:    Senior Executive Vice President
            and Chief Financial Officer

                                                   THE BERLIN CITY BANK

                                                   By:   /S/ William J. Woodward
                                                             -------------------
                                                   Name:     William J. Woodward
                                                   Title: President and Chief 
                                                   Executive Officer


                                                     EXECUTIVE

                                                     /S/ William J. Woodward
                                                         ----------------------
                                                         William J. Woodward