Exhibit 10.4

                       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"), Pemigewasset National Bank, a national bank and wholly owned
subsidiary of Northway with its principal office located in New Hampshire
(Northway and Pemigewasset National Bank are hereinafter collectively referred
to as the "Employer"), and Fletcher Adams (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: /S/ William J. Woodward
                                                             -------------------
By: /S/ Donald R. Hatt                               Name:   William J. Woodward
        ----------------                             Title: President and Chief
Name:   Donald R. Hatt                                      Executive Officer
Title:  Senior Executive Vice President                     

                                                     PEMIGEWASSET NATIONAL BANK

                                                     By: /S/ Fletcher W. Adams 
                                                             ------------------
                                                     Name:   Fletcher W. Adams
                                                     Title: President and Chief
                                                            Executive Officer


                                                     EXECUTIVE

                                                      /S/ Fletcher W. Adams 
                                                          -------------------
                                                          Fletcher W. Adams