Exhibit 10.32

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”), dated as of April 1, 2004 (the
“Effective Date”), is made by and among Enterprise Bancorp, Inc., a
Massachusetts corporation (the “Company”), and its wholly owned subsidiary,
Enterprise Bank and Trust Company, a Massachusetts trust company with its main
office in Lowell, Massachusetts (the “Bank”) (the Bank and the Company being
collectively referred to herein as the “Employers”), and John P. Clancy Jr., an
individual residing at 11 Tanglewood Drive, Chelmsford, Massachusetts (the
“Executive”).  This Agreement shall be effective as of the date hereof (the
“Effective Date”).

 

WHEREAS, the Employers desire to continue to employ the Executive as President
and Treasurer of the Company and Executive Vice President and Treasurer of the
Bank and to enter into an employment agreement embodying the terms of such
relationship;

 

AND WHEREAS, the Executive is willing to continue to be employed as President
and Treasurer of the Company and Executive Vice President and Treasurer of the
Bank on the terms set forth herein;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Employers and the Executive hereby
agree as follows:

 

1.                                       Definitions.

 

1.1                                 “Affiliate” means any Person effectively
controlling, effectively controlled by or effectively under common control with
the Employers.

 

1.2                                 “Board” means the board of directors of the
Company or the Bank, as the case may be.

 

1.3                                 “Cause” means, when used with respect to the
termination of the employment of the Executive by the Employers, termination due
to (a) the Executive’s willful and continued failure to substantially perform
his employment duties (other than any such failure resulting from the
Executive’s incapacity due to physical or mental illness) or (b) the Executive’s
willfully engaging in conduct which is demonstrably and materially injurious to
the Company or the Bank, monetarily or otherwise.  For purposes of this
definition, no act, or failure to act, on the part of the Executive shall be
deemed “willful” unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that his action or omission was in the
best interests of the Company or the Bank.

 

1.4                                 “Change in Control” has the same meaning as
defined in the Company’s 2003 Stock Incentive Plan, as may be amended and in
effect from time to time.

 

1.5                                 “Code” means the Internal Revenue Code of
1986, as amended, and as in effect from time to time, and/or any successor code
thereto.

 

1.6                                 “Date of Termination” means the date
specified in the Notice of Termination (as such term is defined in Section 6.8
of this Agreement) or such date that the

 

--------------------------------------------------------------------------------

 

Executive’s employment terminates if such termination does not require or
otherwise depend upon a prior written notice by the Employers or the Executive,
as the case may be, under the terms of this Agreement; provided, however, that
if, within thirty (30) calendar days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party in
writing that a dispute exists concerning the termination of employment that is
the subject of such Notice of Termination, then the Date of Termination shall be
the date on which such dispute is finally resolved, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order or decree of a court of competent jurisdiction, including all
appeals, unless the time for appeal therefrom has expired and no appeal has been
perfected; provided, further, however, that the Date of Termination shall (a) in
no case be later than the date on which the Term of Employment (as such term is
defined in Section 3 of this Agreement) expires, and (b) be extended by a notice
of dispute as provided above only if such notice is given in good faith and the
party giving such notice pursues the resolution of such dispute with reasonable
diligence.

 

1.7                                 “Good Reason” means, and shall be deemed to
exist if, (a) without the written consent of the Executive, (i) the Employers
fail to appoint or reappoint the Executive as President and Treasurer of the
Company or Executive Vice President and Treasurer of the Bank, (ii) there occurs
any material change by the Employers to the Executive’s function, duties or
responsibilities as set forth in Section 4.1 of this Agreement, which change
would cause the Executive’s position with the Employers to become one of lesser
responsibility, importance or scope from the position and attributes thereof as
set forth in Section 4.1 of this Agreement, (iii) there occurs any material
breach of this Agreement by the Employers or (iv) the Employers fail to obtain a
satisfactory agreement from any successor(s) to assume and agree to perform the
Employers obligations under this Agreement, or (b) a Change in Control occurs,
whether or not the Executive has consented , in writing or otherwise, to such
Change in Control.

 

1.8                                 “Highest Annual Compensation” means, as
determined as of any Date of Termination, the sum of (a) the highest per annum
rate of base salary paid by the Employers to the Executive at any time during
the Term of Employment prior to such Date of Termination, (b) the highest amount
of commission or other compensation (which is not otherwise included in the base
salary and bonus amounts referred in clauses (a) and (c) hereof) paid by the
Employers to the Executive with respect to any fiscal year of the Employers
during the Term of Employment prior to such  Date of Termination, and (c) the
highest annual incentive compensation or other bonus amount paid by the
Employers to the Executive (or which would have been paid but for an election by
the Executive to defer payment to a later period) with respect to any fiscal
year of the Employers during the Term of Employment prior to such Date of
Termination.

 

1.9                                 “Parent” means any Person which has a direct
or indirect legal or beneficial ownership interest in the Employers, but only if
any such Person owns or controls, directly or indirectly, securities possessing
at least 50 percent of the total combined voting power of all classes of
securities of the Employers.

 

1.10                           “Person” means any natural person or any bank,
trust company, credit union, corporation, firm, unincorporated organization,
association, partnership, limited liability company, trust, estate, joint
venture or other business organization or entity.

 

2

--------------------------------------------------------------------------------

 

1.11                           “Subsidiary” means any Person (other than the
Company or the Bank) in which the Employers or any Parent has a direct or
indirect legal or beneficial ownership interest, but only if the Company or the
Parent, as the case may be, owns or controls, directly or indirectly, securities
possessing at least 50 percent of the total combined voting power of all classes
of securities in any such Person.

 

1.12                           “Retirement” means the termination of the
Executive’s employment with the Employers upon the initiative of the Executive
at any time after the Executive attains the age of 65 years old, other than (a)
a termination due to death, (b) a termination for Good Reason or (c) a
termination upon the expiration of the Term of Employment.

 

2.                                       Employment.  Subject to the terms and
provisions set forth in this Agreement, the Employers, during the Term of
Employment, agree to employ the Executive as President and Treasurer of the
Company and Executive Vice President and Treasurer of the Bank and the Executive
hereby accepts such employment. The parties acknowledge and agree that the
Executive’s employment by the Employers under this Agreement may not be
terminated for any reason other than as set forth in Section 6 below prior to
the expiration of the Term of Employment.

 

3.                                       Term of Employment.  The term of
employment under this Agreement shall commence as of the Effective Date and,
subject to extension as provided in this Section 3 or earlier termination as
provided under Section 6 of this Agreement, shall continue through March 31,
2006 (the “Term of Employment”).  As of the first day of each month of
April during which this Agreement remains in effect (each such day a “Renewal
Date”), a one-year extension of the then current Term of Employment shall
automatically be effected (for example, on April 1, 2005, the Term of Employment
shall be extended from a term ending on March  31, 2006 to a term ending on
March 31, 2007).  Either the Employers or the Executive may give written notice
to the other on or prior to any given Renewal Date of the intent of the party
giving such notice to terminate this Agreement at the expiration of the two-year
period commencing on such Renewal Date.  Upon the delivery by either party of
any such notice, the Term of Employment shall no longer be subject to the
automatic one-year extension provided for herein, but rather shall expire upon
the conclusion of such final two-year period.

 

4.                                       Positions, Responsibilities and Duties.

 

4.1                                 Positions and Duties.  During the Term of
Employment, the Executive shall be employed and shall serve as President and
Treasurer of the Company and Executive Vice President and Treasurer of the
Bank.  In such positions, the Executive shall have the duties, responsibilities
and authorities as determined and designated from time to time by the Chairman
and Chief Executive Officer of the Employers or the Board and as otherwise
provided in the bylaws of the Employers.  The Executive shall serve under the
direction of, and report only to, the Chairman and Chief Executive Officer of
the Employers.  Notwithstanding the above, the Executive shall not be required
to perform any duties and responsibilities which would result in the Employers’
or the Executive’s noncompliance with, or any other violation of, any applicable
law, regulation, regulatory policy or other regulatory requirement.

 

3

--------------------------------------------------------------------------------

 

4.2                                 Attention to Duties and Responsibilities. 
During the Term of Employment, the Executive shall, except for periods of
absence occasioned by illness, vacation in accordance with Section 5.6 of this
Agreement, and any other reasonable leaves of absence in accordance with any
applicable policies, programs, procedures or practices of the Employers, devote
substantially all of his business time to the business and affairs of the
Employers and the Executive shall use his best efforts, business skills, ability
and fidelity to perform faithfully and efficiently the duties and
responsibilities contemplated by this Agreement; provided, however, that the
Executive shall be allowed, to the extent such activities do not present a
conflict of interest or significantly interfere with the performance by the
Executive of his duties and responsibilities hereunder, (a) to manage the
Executive’s personal financial affairs, including his personal investment
portfolio, and (b)(i) to serve on boards of directors or trustees or committees
of civic or charitable organizations or trade associations, and (ii) after
obtaining the consent of the Board, as evidenced by a formally adopted vote or
resolution of the Board and under the terms and conditions specified in any such
vote or resolution, to serve on the board of directors or trustees or other
governing body of any company or other organization or  association or to serve
as a general partner or other type of active manager in any partnership or other
type of business venture; provided, further, however, that all offices or
positions which the Executive currently holds or has held prior to the date of
this Agreement and any other that may be set forth in a schedule attached to
this Agreement are hereby acknowledged by the Employers and designated as
currently consented to positions.

 

5.                                       Compensation and Other Benefits.

 

5.1                                 Base Salary.  During the Term of Employment,
the Executive shall receive a base salary of One Hundred Fifty-Eight Thousand
Four Hundred and 00/100 Dollars ($158,400.00) per annum (such per annum amount
being referred to herein as the Executive’s “Base Salary”), payable in
accordance with the Employers’ normal payroll practices.  The Executive’s Base
Salary shall be reviewed annually by the Board for increase (but not any
decrease) in the Board’s sole discretion.  The Executive’s Base Salary as may be
so increased from time to time during the Term of Employment shall then
constitute the Executive’s “Base Salary” for purposes of this Agreement.

 

5.2                                 Annual Bonus.  During the Term of
Employment, the Executive shall be entitled to participate in an equitable
manner with other executive officers of the Employers in such discretionary
bonus payment or awards as may be authorized, declared and paid by the Board to
the Employers’ executive employees.  No other compensation or additional
benefits provided for in this Agreement shall be deemed to be a substitute for
the Executive’s right to receive such bonuses if, when and as declared and paid
by the Board.

 

5.3                                 Incentive, Retirement, and Savings Plans. 
During the Term of Employment, the Executive shall participate in all incentive,
pension, retirement, savings, stock option and other stock grant and equity
compensation plans, as well as all other employee benefit plans and programs,
which may be maintained from time to time by the Employers for the benefit of
senior executives and/or other employees of the Employers.

 

4

--------------------------------------------------------------------------------

 

5.4                                 Welfare Benefit Plans.  During the Term of
Employment, the Executive and his spouse and other eligible dependents shall
participate in, and be covered by, all of the health and other welfare benefit
plans and programs that may be maintained from time to time by the Employers for
the benefit of senior executives and/or other employees of the Employers.

 

5.5                                 Expense Reimbursement.  During the Term of
Employment, the Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses, including reasonable business travel expenses, incurred
by the Executive in performing his duties and responsibilities under this
Agreement in accordance with the policies, programs, procedures and practices of
the Employers as in effect at the time the expense was incurred, as the same may
be changed from time to time.

 

5.6           Fringe Benefits; Automobile.  During the Term of Employment, the
Executive shall be eligible to benefit from such fringe benefits and
perquisites, in accordance with the policies, programs,  procedures and
practices of the Employers, as may be in effect and provided from time to time
to senior executives and/or other employees of the Employers, and shall be
entitled to the use of an automobile, of a type commensurate with the
Executive’s office and standing, at the Employers’ expense.

 

6.                                       Termination.

 

6.1                                 Termination Due to Death.  In the event of
the Executive’s death during the Term of Employment, the Term of Employment
shall thereupon end and his estate or other legal representative, as the case
may be, shall, subject to Section 6.11 of this Agreement, only be entitled to:

 

(a)                                  Base Salary continuation at the rate in
effect (as provided in Section 5.1 of this Agreement) on the Date of Termination
for a period of six months commencing on such Date of Termination or, if the
Board so determines in its sole discretion and in lieu of such six-month salary
continuation, a lump sum payment equal in amount to such six-month Base Salary
continuation; provided, however, that if the Executive’s death during the Term
of Employment occurs after, or within one year prior to, a Change in Control,
then the Executive’s estate or other legal representative shall receive, in lieu
of the payments required under this Section 6.1(a) and subject to Section 6.9
below, the full lump sum payment required under Section 6.4(a) below in the
event of a termination of the Executive’s employment after, or within one year
prior to, a Change in Control (and, in the case of the Executive’s death within
one year prior to a Change in Control, any amounts paid under this
Section 6.1(a) prior to the Change in Control shall be taken into account in
determining the total amount payable to the Executive’s estate or other legal
representative as a result of the Change in Control);

 

(b)                                 any Base Salary accrued but not yet paid as
of the Date of Termination;

 

(c)                                  any bonus actually awarded or commissions
actually earned, but not yet paid, as of the Date of Termination;

 

5

--------------------------------------------------------------------------------

 

(d)                                 reimbursement for all expenses (under
Section 5.5) incurred as of the Date of Termination, but not yet paid as of the
Date of Termination;

 

(e)                                  payment of the per diem value of any unused
vacation days that have accrued during the Term of Employment prior to the Date
of Termination and the unused, unaccrued portion of any vacation days available
through the end (but not beyond) of the calendar year in which the Date of
Termination occurs;

 

(f)                                    any other compensation and benefits as
may be provided in accordance with the terms and provisions of any applicable
plans, programs, procedures and practices of the Employers;

 

(g)                                 continuation of all health and other welfare
benefits provided under Section 5.4 of this Agreement for the benefit of the
Executive’s spouse and other eligible dependents at the level in effect on the
Date of Termination and at no cost to the Executive’s spouse and such other
eligible dependents for a period commencing on the Date of Termination and
ending, with respect to the Executive’s spouse, on the earlier of her death or
remarriage and, with respect to any other eligible dependent of the Executive,
on such date as such dependent reaches the age of legal emancipation in
accordance with the laws of the Commonwealth of Massachusetts (or, if such
continuation of health or other welfare benefits is not permitted by applicable
law, the Employers shall provide the economic equivalent in lieu thereof); and

 

(h)                                 any rights to indemnification in accordance
with Section 10 of this Agreement.

 

6.2                                 Suspension for Disability.

 

(a)                                  If, during the Term of Employment, the
Executive shall either qualify to receive disability benefits under any group
long-term disability plan then maintained by the Employers or, if no such plan
is maintained by the Employers, have been absent from his duties with the
Employers on a full-time basis due to physical or mental illness for six (6)
consecutive months, and in either case shall not have returned to the full-time
performance of his duties within thirty (30) days after written notice of
potential suspension has been given to the Executive by the Employers, then the
Executive’s employment shall be deemed to be suspended on the basis of
disability (a “Suspension for Disability”).

 

(b)                                 If a Suspension for Disability occurs during
the Term of Employment, the Employers shall pay the Executive an amount equal,
on a per annum basis, to seventy-five percent (75%) of the Executive’s Highest
Annual Compensation as determined on the effective date of the Suspension for
Disability (assuming, for purposes of such determination, that the effective
date of the Suspension for Disability is the Date of Termination as referred to
in the definition of Highest Annual Compensation), such amount to be paid out in
equal periodic installments in accordance with the Employers’ ordinary payroll
practices during the period that such payments are required to be made

 

6

--------------------------------------------------------------------------------

 

under this Section 6.2(b).  These payments shall commence on the first ordinary
payroll payment date of the Employers after the effective date of the
Executive’s Suspension for Disability and will end on the earliest to occur of
the following:  (i) the date on which the Executive returns to full-time
employment with the Employers; (ii) the Executive’s death; or (iii) the
termination by either party, or the expiration, of the Term of Employment in
accordance with the terms of this Agreement.  After a Suspension for Disability
occurs, the Employers shall be free to fill the Executive’s positions.  Upon the
Executive being able to return to full-time employment before any termination or
the expiration of the Term of Employment, the Executive shall, at his option,
(i) assume the President and Treasurer position of the Company and Executive
Vice President and Treasurer position of the Bank or, if another individual is
then holding either of such positions and the Executive is not reappointed to
both such positions, assume such other position(s) as may be available with the
Employers at the same Base Salary as was in effect at the time the Suspension
for Disability had commenced and otherwise continue in the employ of the
Employers in accordance with the terms of this Agreement or (ii) if another
individual is then holding either of such positions and the Executive is not
reappointed to both such positions, exercise his right to terminate this
Agreement for Good Reason under Section 6.4 of this Agreement.  The disability
payments to be paid to the Executive during a Suspension for Disability under
this Section 6.2(b) shall be in addition to any payments or other benefits
payable to the Executive under any qualified or nonqualified retirement plans or
programs maintained by the Employers but shall be reduced by any payments
received by the Executive during such Suspension for Disability under any group
long-term disability plan maintained by the Employers.  Notwithstanding any
other provision contained in this Agreement to the contrary, the occurrence of a
Suspension of Disability shall not in any way prevent or otherwise limit the
parties’ exercising any of their respective rights to terminate the Term of
Employment at any time in accordance with the terms of this Agreement.

 

(c)                                  The Employers shall cause to be continued
during any Suspension for Disability all life, health and other welfare
coverages and benefits as were maintained by the Employers for the benefit of
the Executive and his spouse and other eligible dependents prior to the
occurrence of such Suspension for Disability, such continuation to continue,
subject to Section 6.2(d) of this Agreement, until the expiration of the Term of
Employment.

 

(d)                                 Notwithstanding any other provision to the
contrary in this Section 6.2, there shall be no reduction in the compensation
(except as otherwise provided in Section 6.2(b) above), accrued benefits or
pension granted or accruing to the Executive during the period of any Suspension
for Disability and there shall be no abrogation or limitation of any of the
other provisions of this Agreement that grant rights to the Executive or the
Executive’s spouse or other eligible dependents or the Executive’s estate
following the Executive’s death, Retirement or other applicable termination of
employment during the Term of Employment as a result of any Suspension for 
Disability.

 

7

--------------------------------------------------------------------------------

 

6.3                                 Termination by the Board for Cause.

 

(a)                                  The Board may terminate the Executive’s
employment hereunder for Cause, as provided in Section 6.3(b) below.  If the
Board terminates the Executive’s employment under this Section 6.3 for Cause,
the Term of Employment shall thereupon end as set forth below and the Executive
shall, subject to Section 6.11 of this Agreement, only be entitled to:

 

(i)            any Base Salary accrued but not yet paid as of the Date of
Termination;

 

(ii)           any bonus actually awarded or commissions actually earned, but
not yet paid, as of the Date of Termination;

 

(iii)          reimbursement for all expenses (under Section 5.5) incurred as of
the Date of Termination, but not yet paid as of the Date of Termination; and

 

(iv)          payment of the per diem value of any unused vacation days that   
have accrued during the Term of Employment prior to the Date of Termination and
the unused, unaccrued portion of any vacation days available through the end
(but not beyond) of the calendar year in which the Date of Termination occurs.

 

(b)                                 In determining Cause, the alleged acts or
omissions of the Executive must be confirmed beyond a reasonable doubt by not
less than two-thirds of the Board (meaning, for purposes of this Section 6.3(b),
the Board excluding the Executive and any other directors of the Employers who
are alleged to have been involved or otherwise to have an interest in any of
such alleged acts or omissions of the Executive) at a meeting duly called and
held for the purpose of the Board’s making such determination (the
“Determination Meeting”). In the event of such a confirmation by  the Board, the
Employers shall notify the Executive that the Employers intend to terminate the
Executive’s employment for Cause under this Section 6.3 (the “Confirmation
Notice”).  The Confirmation Notice shall specify the act(s), or omission(s),
upon the basis of which the Board has confirmed the existence of Cause and must
be delivered to the Executive within ten (10) days after the date on which the
Determination Meeting has been held.  If the Executive notifies the Employers in
writing (the “Opportunity Notice”) within ten (10) days after the Executive has
received the Confirmation Notice, the Executive (together with counsel) shall be
provided one opportunity to meet with the Board (or a sufficient quorum thereof)
to discuss such act(s) or omission(s).  Such opportunity to meet with the Board
shall be fixed and shall occur on a date selected by the Board (such date being
not less than ten (10) nor more than thirty (30) days after the Employers
receive the Opportunity Notice from the Executive).  Such meeting (the “Final
Meeting”) shall take place at the principal offices of the Employers or such
other location as agreed to by the Executive and the Employers.  During the
period commencing on the date on which notice of the Determination Meeting is
duly given to the Board and ending either on the date of the Determination
Meeting, if no determination of Cause is made at the Determination Meeting, or
on the Date of Termination, and not withstanding anything to

 

8

--------------------------------------------------------------------------------

 

the contrary in this Agreement, the Executive shall be suspended from employment
with the Employers (with continuing payment of Base Salary and continuation of
benefits in accordance with Section 5 of this Agreement, to the extent such
payments and benefits are not prohibited by applicable law, regulation,
regulatory policy or other regulatory requirement), and the Board may, during
such suspension period, reasonably limit the Executive’s access to the principal
offices and any other premises of the Employers and/or the Executive’s access to
any of the Employers’ assets or personnel.  If the Board properly sets the date
of the Final Meeting and if the Board (or a sufficient quorum thereof) attends
the Final Meeting and in good faith does not rescind its confirmation of Cause
at the Final Meeting or if the Executive fails to attend the Final Meeting for
any reason, the Executive’s employment by the Employers shall, immediately upon
the closing of the Final Meeting and the delivery to the Executive of the Notice
of Termination, be terminated for Cause under this Section 6.3.  If the
Executive does not respond in writing to the Confirmation Notice in the manner
and within the time period specified in this Section 6.3, the Executive’s
employment with the Employers shall, on the eleventh day after the receipt by
the Executive of the Confirmation Notice, be terminated for Cause under this
Section 6.3.  In the event of any dispute hereunder, the Executive shall be
entitled, to the extent not prohibited by applicable law, regulation, regulatory
policy or other regulatory requirement, until the earliest to occur of (i) the
Date of Termination, (ii) the expiration of the then current Term of Employment
or (iii) the resolution of such dispute, to be paid his Base Salary in
accordance with the Employers’ ordinary payroll practices and continue to
receive all other benefits to be provided to the Executive pursuant to Section 5
hereof, and there shall be no reduction whatsoever of any amounts subsequently
paid to the Executive upon resolution of such dispute as a result of, or in
respect to, such interim payments or coverage.  The procedure set forth in this
Section 6.3 to determine the existence of Cause shall at all times be subject to
the requirements of applicable law, regulation, regulatory policy or other
regulatory requirements.

 

6.4                                 Termination by Employers Without Cause or by
Executive for Good Reason.  The Employers may terminate the Executive’s
employment for any reason and without Cause, or for no reason at all, at any
time during the Term of Employment upon sixty (60) days prior written notice to
the Executive.  The Executive may terminate his employment for Good Reason at
any time during the Term of Employment upon sixty (60) days prior written notice
to the Employers.  If the Employers terminate the Executive’s employment
hereunder without Cause or the Executive terminates his employment hereunder for
Good Reason, then the Term of Employment shall thereupon end and the Executive
shall, subject to Section 6.11 of this Agreement, only be entitled to:

 

(a)                                  an aggregate amount equal to two times the
Executive’s Highest Annual Compensation, such amount to be paid out in equal
periodic installments in accordance with the Employers’ ordinary payroll
practices over the two-year period commencing on the first payroll payment date
after the Date of Termination; provided, however, that if such termination by
either the Employers or the Executive occurs at any time during the Term of
Employment after, or within one year prior to, a Change in Control, then the
Executive shall, subject to Section 6.9 below, be entitled to a cash lump sum
payment

 

9

--------------------------------------------------------------------------------

 

equal to two (2) times the Executive’s Highest Annual Compensation, which lump
sum shall be paid within thirty (30) days following the later of the Date of
Termination or the date of the Change in Control (and, in the case of any such
termination within one year prior to a Change in Control, any amounts paid under
this Section 6.4(a) prior to the Change in Control shall be taken into account
in determining the total amount payable to the Executive as a result of the
Change in Control);

 

(b)                                 any Base Salary accrued but not yet paid as
of the Date of Termination;

 

(c)                                  any bonus actually awarded or commissions
actually earned, but not yet paid, as of the Date of Termination;

 

(d)                                 reimbursement for all expenses (under
Section 5.5) incurred as of the Date of Termination, but not yet paid as of the
Date of Termination;

 

(e)                                  payment of the per diem value of any unused
vacation days that have accrued during the Term of Employment prior to the Date
of Termination and the unused, unaccrued portion of any vacation days available
through the end (but not beyond) of the calendar year in which the Date of
Termination occurs;

 

(f)                                    any other compensation and benefits as
may be provided in accordance with the terms and provisions of any applicable
plans, programs, procedures or practices of the Employers;

 

(g)                                 continuation of the welfare benefits of the
Executive and his spouse and other eligible dependents at the level in effect
(as provided for by Section 5.4 of this Agreement) on, and at the same
out-of-pocket cost to the Executive as of, the Date of Termination for the
two-year period commencing on the Date of Termination (or, if such continuation
is not permitted by applicable law or if the Board so determines in its sole
discretion, the Employers shall provide the economic equivalent in lieu
thereof);

 

(h)                                 reimbursement for the reasonable fees of a
professional out-placement service selected by the Executive within ninety (90)
days after the Date of Termination; and

 

(i)                                     any rights to indemnification in
accordance with Section 10 of this Agreement.

 

In the event of any dispute hereunder, the Executive shall be entitled until the
earliest to occur of (i) the Date of Termination, (ii) the expiration of the
then current Term of Employment, or (iii) the resolution of such dispute, to be
paid his Base Salary in accordance with the Employers’ ordinary payroll
practices and continue to receive all other benefits to be provided to the
Executive pursuant to Section 5 hereof, and there shall be no reduction
whatsoever of any amounts subsequently paid to the Executive upon resolution of
such dispute as a result of, or in respect to, such interim payments or
coverage.

 

10

--------------------------------------------------------------------------------

 

6.5                                 Voluntary Termination.

 

(a)                                  During the Term of Employment, the
Executive may effect, upon sixty (60) days prior written notice to the
Employers, a Voluntary Termination of his employment hereunder and thereupon the
Term of Employment shall end.  A “Voluntary Termination” shall mean a
termination of employment by the Executive on his own initiative other than (i)
a termination due to death, (ii) a termination for Good Reason, (iii) a
termination due to Retirement, or (iv) a termination upon expiration of the Term
of Employment.

 

(b)                                 Upon a Voluntary Termination, the Executive
shall, subject to Section 6.11 of this Agreement, only be entitled to:

 

(i)                                     Base Salary accrued but not yet paid as
of the Date of Termination;

 

(ii)                                  any bonus actually awarded or commissions
actually earned, but not yet paid, as of the Date of Termination;

 

(iii)                               reimbursement for all expenses (under
Section 5.5) incurred as of the Date of Termination, but not yet paid as of the
Date of Termination;

 

(iv)                              payment of the per diem value of any unused
vacation days that have accrued during the Term of Employment prior to the Date
of Termination and the unused, unaccrued portion of any vacation days available
through the end (but not beyond) of the calendar year in which the Date of
Termination occurs;

 

(v)                                 any other compensation and benefits as may
be provided in accordance with the terms and provisions of any applicable plans,
programs, procedures or practices of the Employers; and

 

(vi)                              any rights to indemnification in accordance
with Section 10 of this Agreement;

 

provided, however, that if a Voluntary Termination occurs within one year prior
to a Change in Control, then the Executive shall receive, in addition to all of
the payments and benefits required under this Section 6.5(b) and subject to
Section 6.9 below, the full lump sum payment required under Section 6.4(a) above
in the event of a termination of the Executive’s employment after, or within one
year prior to, a Change in Control, which lump sum shall be paid within thirty
(30) days following the date of the Change in Control.

 

6.6                                 Termination Due to Retirement.  The
Executive may terminate his employment hereunder on the basis of his Retirement
upon sixty (60) days prior written notice to the Employers.  If, during the Term
of Employment, the Executive’s employment is so terminated due to Retirement,
the Term of Employment shall thereupon end and the Executive shall, subject to
Section 6.11 of this Agreement, only be entitled to:

 

(a)                                  Base Salary accrued but not yet paid as of
the Date of Termination;

 

11

--------------------------------------------------------------------------------

 

(b)                                 any bonus actually awarded or commissions
actually earned, but not yet paid, as of the Date of Termination;

 

(c)                                  reimbursement for all expenses (under
Section 5.5) incurred as of the Date of Termination, but not yet paid as of the
Date of Termination;

 

(d)                                 payment of the per diem value of any unused
vacation days that have accrued during the Term of Employment prior to the Date
of Termination and the unused, unaccrued portion of any vacation days available
through the end (but not beyond) of the calendar year in which the Date of
Termination occurs;

 

(e)                                  any other compensation and benefits as may
be provided in accordance with the terms and provisions of any applicable plans,
programs, procedures or practices of the Employers;

 

(f)                                    continuation of the welfare benefits of
the Executive, his spouse and other eligible dependants, if any, at the level in
effect (as described in Section 5.4 of this Agreement) on, and at the same
out-of-pocket cost to the Executive as of, the Date of Termination for the
one-year period commencing on the Date of Termination (or, if such continuation
of benefits is not permitted by applicable law or if the Board so determines in
its sole discretion, the Employers shall provide the economic equivalent in lieu
thereof); and

 

(g)                                 any rights to indemnification in accordance
with Section 10 of this Agreement;

 

provided, however, that if a termination due to Retirement occurs within one
year prior to a Change in Control, then the Executive shall receive, in addition
to all of the payments and benefits required under this Section 6.6 and subject
to Section 6.9 below, the full lump sum payment required under Section 6.4(a)
above in the event of a termination of the Executive’s employment after, or
within one year prior to, a Change in Control, which lump sum shall be paid
within thirty (30) days following the date of the Change in Control.

 

6.7                                 No Obligation to Mitigate; Offset Under
Certain Circumstances.  In the event of any termination of the Executive’s
employment under this Section 6, the Executive shall be under no obligation to
seek other employment or to mitigate damages.  If any termination of the
Executive’s employment occurs after a Change in Control, then there shall be no
offset against any amounts due the Executive under this Agreement for any
reason, including, without limitation, on account of any remuneration
attributable to any subsequent employment that the Executive may obtain.  If any
termination of the Executive’s employment occurs prior to a Change in Control,
then the amounts that may be payable by the Employers to the Executive during
any applicable period following the Date of Termination and prior to the date of
any Change in Control under Sections 6.4(a) or 7.3 of this Agreement may be
adjusted, so that any payment paid to the Executive by the Employers during any
such period shall equal the difference between the total amount that the
Employers would otherwise be required to pay to

 

12

--------------------------------------------------------------------------------

 

the Executive for such period pursuant to Sections 6.4(a) or 7.3, as applicable,
and the total amount of any payments received by the Executive from any third
party(ies) during such period.

 

6.8                                 Notice of Termination.  Any termination of
the Executive’s employment under this Section 6 requiring advance written notice
shall be communicated by a notice of termination to the other party hereto given
in accordance with Section 11.3 of this Agreement (the “Notice of
Termination”).  The Notice of Termination, in the case of a termination by the
Employers for Cause, or a termination by the Executive for Good Reason, shall
indicate the specific termination provision in this Agreement relied upon and
set forth in reasonable detail the dates, facts and circumstances claimed to
provide a basis for termination of the Executive’s employment under the
provision so indicated.

 

6.9                                 Code Section 280G Reduction.  Anything in
this Agreement or in any other agreement, contract, understanding, plan or
program entered into or maintained by the Employers to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Employers to or for the benefit of the Executive, whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (collectively, the “Payments”), would be subject to the
excise tax imposed by Section 4999 of the Code, and/or any successor provision
or section thereto (such excise tax, together with any interest or penalties
incurred by the Executive with respect to such excise tax, collectively, the
“Excise Tax”), and if the Payments less the Excise Tax would be less than the
amount of the Payments that would otherwise be payable to the Executive without
imposition of the Excise Tax, then, to the extent necessary to eliminate the
imposition of the Excise Tax (and taking into account any reduction in the
Payments provided by reason of Section 280G of the Code in any such other
agreement, contract, understanding, plan or program), the cash and non-cash
payments and benefits payable to the Executive shall be reduced (with the
executive being provided with the amount of each payment and benefit as
calculated by the Employers and given ten (10) business days in which to
prioritize the order of reduction of each such payment or benefit); but only if,
by reason of any such reduction, the Payments with any such reduction shall
exceed the Payments less the Excise Tax without any such reduction.  For
purposes of this Section 6.9, (i) no portion of the Payments, the receipt or
enjoyment of which the Executive shall have effectively waived in writing prior
to the Date of Termination, shall be taken into account, (ii) no portion of the
Payments shall be taken into account that, in the opinion of tax counsel
selected in good faith by the Employers, does not constitute a “parachute
payment” within the meaning of Section 280G(b)(2) of the Code, including without
limitation by reason of Section 280G(b)(4)(A) of the Code, (iii) any payments
and/or benefits under this Agreement or otherwise for services to be rendered on
or after the effective date of a Change in Control shall be reduced only to the
extent necessary so that such payments and/or benefits in their entirety
constitute reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(4)(B) of the Code or are otherwise not subject to
disallowance as deductions, in the opinion of the tax counsel referred to in the
immediately preceding clause (ii) of this sentence, and (iv) the value of any
non-cash payment or benefit or any deferred payment or benefit included in the
Payments shall be determined by the Employers’ independent auditors in
accordance with the principles of Sections 280G(d)(3) and 280G(d)(4) of the Code
and the applicable regulations or proposed regulations under the Code.  Except
as otherwise provided in this Section 6.9, the foregoing calculations and
determinations shall be made in good faith by the Employers and shall be
conclusive and binding

 

13

--------------------------------------------------------------------------------

 

upon the parties.  The Employers shall pay all costs and expenses incurred in
connection with any such calculations or determinations.

 

6.10                           Payment.  Except as otherwise provided in this
Agreement, any payments to which the Executive shall be entitled to under this
Section 6, including, without limitation, any economic equivalent of any
benefit, shall be made, to the extent practicable, within five (5) business days
following the Date of Termination.

 

6.11                           Bank Regulatory Limitations.  Any payments made
to the Executive pursuant to this Agreement, or otherwise, are subject to and
conditioned upon their compliance with 12 U.S.C. § 1828(k) and any applicable
regulations promulgated thereunder.  In addition, to the extent required by
applicable law, regulation, regulatory policy  or other regulatory requirement,
the aggregate amount and/or value of the compensation paid as a result of any
termination of the Executive’s employment with the Employers, regardless of the
reason for any such termination of employment, shall not exceed the limit
prescribed by such applicable law, regulation, regulatory policy or other
regulatory requirement.

 

6.12                           Option to Serve as Consultant.

 

(a)                                  In lieu of the Employers terminating the
Term of Employment without Cause or the Executive terminating the Term of
Employment for any reason, the parties may agree that the Executive shall serve
as a consultant to the Employers for the balance of the Term of Employment (as
such may be extended pursuant to Section 3 of this Agreement) in accordance with
the terms set forth in this Section 6.12.  If the Employers and the Executive so
agree that the Executive shall serve as a consultant to the Employers hereunder,
the Executive shall render such services of an advisory or consultative nature
as the Employers may reasonably require of him from time to time and he shall
assist the Employers in their relations with their employees and customers, such
that the Employers shall have the benefit of the Executive’s experience and
knowledge of the Employers’ business and operations, his reputation and contacts
in the industry generally as well as in the Employers’ market area and his
general business experience.

 

(b)                                 During the period of the Executive’s
providing the consulting services contemplated by Section 6.12(a) above (the
“Consulting Period”), the Executive shall devote approximately one-half of his
time during normal business hours to the business and affairs of the Employers,
and shall receive as compensation therefor an amount equal, on a per annum
basis, to fifty percent (50%) of the Executive’s Highest Annual Compensation as
determined as of the date upon which the Consulting Period commences (assuming,
for purposes of such determination, that the date upon which the Consulting
Period commences is the Date of Termination as referred to in the definition of
Highest Annual Compensation), such amount to be paid out in equal periodic
installments in accordance with the Employers’ ordinary payroll practices during
the Consulting Period.

 

(c)                                  During the Consulting Period, the Executive
shall be deemed to be an employee of the Employers and, on this basis, the
Executive shall be entitled to a

 

14

--------------------------------------------------------------------------------

 

continuation of all of the compensation, payments and other benefits provided to
him, his spouse and other eligible dependents pursuant to Sections 5.3 through
5.6 of this Agreement in accordance with the terms thereof.  During the
Consulting Period, there shall be no affirmative obligation on the part of the
Executive to serve or to continue to serve as a member of the Board, and any
such membership shall be in accordance with the mutual agreement of the
Executive and the Employers.

 

(d)                                 The Consulting Period may be terminated at
any time by either the Employers or the Executive for any reason, or for no
reason at all, upon sixty (60) days prior written notice to the other party.  If
the Consulting Period is terminated by either the Employers or the Executive
prior to the occurrence of a Change in Control, then, so long as the Consulting
Period has not been terminated by the Employers for Cause and subject to any
applicable provisions of Section 6.12(e) below, such termination shall be deemed
to have occurred, effective as of the date on which the Consulting Period
terminates, on the grounds that would have applied at the time of the parties’
first entering into the consulting arrangement provided for in this
Section 6.12, if the Employers or the Executive, as the case may be, had
exercised the right of termination then available to such party, and the
Executive shall be entitled to receive all of the payments and benefits set
forth in the applicable provisions of Section 6 of this Agreement on account of
such termination, except that any reference to Base Salary in any such
applicable provision shall mean the amount of annual compensation required to be
paid to the Executive under Section 6.12(b) above; provided, however,
notwithstanding the grounds for termination that may have applied at the time of
the parties’ first entering into the consulting arrangement provided for in this
Section 6.12, if the Employers terminate the Consulting Period without Cause or
the Executive terminates the Consulting Period for Good Reason (to the extent
that the principle of Good Reason may apply to the Executive’s termination of
the Consulting Period pursuant to clauses (a)(iii) and (a)(iv) of the definition
of Good Reason contained above), then the Executive shall be entitled to receive
all of the payments and benefits set forth in Section 6.4 of this Agreement
(including without limitation Section 6.4(a) above) on account of such
termination, except that the reference to Base Salary in Section 6.4(b) above
shall mean the amount of annual compensation required to be paid to the
Executive under Section 6.12(b) above.  If the Consulting Period is terminated
by either the Employers or the Executive for any reason, or for no reason at
all, following the occurrence of a Change in Control, then, subject to any
applicable provisions of Section 6.12(e) below, the Executive shall be deemed to
have exercised his right to terminate this Agreement for Good Reason, where such
Good Reason is the occurrence of such Change in Control, effective as of the
date on which the Consulting Period terminates, and the Executive shall be
entitled to all of the payments and benefits set forth in Section 6.4 of this
Agreement (including without limitation Section 6.4(a) above) on account of such
termination, except that the reference to Base Salary in Section 6.4(b) above
shall mean the amount of annual compensation required to be paid to the
Executive under Section 6.12(b) above.  For purposes of calculating the amount
payable to the Executive under Section 6.4(a) of this Agreement if the
Consulting Period is terminated hereunder, to the extent that any such payment
is required, the Executive’s Highest Annual Compensation shall be determined as
of the date on which

 

15

--------------------------------------------------------------------------------

 

the Employers and the Executive first entered into the consulting arrangement
provided for under this Section 6.12.

 

(e)                                  If the Consulting Period is terminated as a
result of the Executive’s death, then the Executive’s estate or other legal
representative, as the case may be, shall be entitled to receive the payments
and benefits set forth in Section 6.1 of this Agreement, including the payments
provided for in Section 6.1(a) above if the Executive’s death occurs after, or
within one year prior to, a Change in Control, except that the references to
Base Salary in Sections 6.1(a) above, in the case of the Executive’s death prior
to a Change in Control, and 6.1(b) above shall mean the amount of annual
compensation required to be paid to the Executive under Section 6.12(b) above. 
If the Executive becomes disabled during the Consulting Period, as such
disability is contemplated under Section 6.2(a) of this Agreement, then all of
the terms of Section 6.2 above shall apply, except that the amount that may be
paid to the Executive during any Suspension for Disability shall equal
seventy-five percent (75%) of the amount of the compensation required to be paid
to the Executive under Section 6.12(b) above, the reference to Base Salary in
Section 6.2(b) above shall mean the amount of annual compensation required to be
paid to the Executive under Section 6.12(b) above, and any and all references in
Section 6.2 to the Executive’s employment, offices, titles, positions or other
functions with the Employers shall mean the consulting arrangement entered into
between the Employers and the Executive pursuant to this Section 6.12.  If the
Consulting Period is terminated by the Employers for Cause, then the Executive
shall be entitled to all of the payments set forth in Section 6.3 of this
Agreement, except that the reference to Base Salary in Section 6.3(a)(i) above
shall mean the amount of annual compensation required to be paid to the
Executive under Section 6.12(b) above.

 

7.                                       Confidential Information;
Noncompetition.

 

7.1                                 Confidentiality.  The Executive shall not,
during or after the period during which he is employed by the Employers,
disclose any Confidential Information (as such term is defined herein) to any
Person for any reason or purpose whatsoever.  The term “Confidential
Information” shall mean all confidential information of or relating to the
Employers and any of their Affiliates, including without limitation financial
information and data, business plans and information regarding prospects and
opportunities (such as, by way of example only, client and customer lists and
acquisition, disposition, expansion, product development and other strategic
plans), but does not include any information that is or becomes public knowledge
by means other than the Executive’s breach or nonobservance of his obligations
described in this Section 7.1.  Notwithstanding the foregoing, the Executive may
disclose such Confidential Information as he may be legally required to do so on
the advice of counsel in connection with any legal or regulatory proceeding;
provided, however, that the Executive shall provide the Employers with prior
written notice of any such required or potentially required disclosure and shall
cooperate with the Employers and use his best efforts under such circumstances
to obtain appropriate confidential treatment of any such Confidential
Information that may be so required to be disclosed in connection with any such
legal or regulatory proceeding.  The Executive’s obligation to refrain from
disclosing any Confidential Information under this Section 7.1 shall

 

16

--------------------------------------------------------------------------------

 

continue in effect in accordance with its terms following any termination of
this Agreement pursuant to Section 6 above.

 

7.2                                 Noncompetition.  If the Executive’s
employment with the Employers (including without limitation any employment
during a Consulting Period) is terminated by the Employers or the Executive for
any reason, other than due to death, or for no reason at all or otherwise
terminates as a result of the expiration of the Term of Employment, in any such
case prior to a Change in Control, then during the two-year period following the
Date of Termination or, if a Change in Control occurs at any time during such
two-year period, such shorter period from the Date of Termination up to the date
of such Change in Control, and subject to Section 7.3 hereof, the Executive
shall not:  (a) directly or indirectly, whether as owner, partner, shareholder
(other than the holder of 1% or less of the common stock of any company the
common stock of which is listed on a national stock exchange or quoted on the
Nasdaq Stock Market),  be engaged as a consultant, agent, employee or otherwise,
engage in competition with the Employers or any of their Affiliates within a ten
(10) mile radius of any city or town in which the Bank or any Affiliate has a
branch or other office; or (b) hire or attempt to hire, or assist in hiring, any
employees of the Employers or any of their Affiliates, or solicit, encourage or
induce any such employee to terminate his or her relationship with the Employers
or any such Affiliate; or (c) solicit, encourage or induce any customer or
client of the Employers or any of their Affiliates to terminate his or its
relationship with the Employers or any such Affiliate or to do business with
anyone other than the Employers and their Affiliates.

 

7.3                                 Payments.  During the two years or such
shorter period during which the restrictions of Section 7.2 above apply, the
Executive shall be paid, subject to Section 6.7 above, a per annum amount equal
to seventy percent (70%) of the per annum amount required under Section 6.4(a)
of this Agreement in the event of a termination of the Executive’s employment
prior to a Change in Control; provided, however, that, if the termination of the
Executive’s employment that precedes such period of restriction required under
Section 7.2 above has occurred pursuant to Section 6.4 above, then the Executive
shall be paid during such period the full per annum amount required under
Section 6.4(a).  If the period of the restrictions required under Section 7.2
above follows any termination of a Consulting Period, then the payments required
under this Section 7.3 shall be reduced to a per annum amount equal to fifty
percent (50%) of the per annum amount specified in Section 6.4(a) of this
Agreement, subject to Section 6.7 above and subject further to any requirement
that the full per annum amount under Section 6.4(a) be paid during such period
pursuant to Sections 6.12(d) or 6.12(e) above.  The amount payable under this
Section 7.3 is only payable during the period of restriction that is the subject
of Section 7.2 of this Agreement.  Inasmuch as such period of restriction shall
not apply under any circumstances after a Change in Control, no amount shall be
paid to the Executive under this Section 7.3 under any circumstances after a
Change in Control (although amounts may otherwise be paid to the Executive, his
estate or other legal representative after a Change in Control under other
applicable provisions of this Agreement).  The amounts to be paid to the
Executive under this Section 7.3 shall be paid out in equal periodic
installments in accordance with the Employers’ ordinary payroll practices over
the two-year or such shorter  period commencing on the first payroll date after
the Date of Termination.

 

17

--------------------------------------------------------------------------------

 

7.4                                 Injunctive Relief.  The Executive
acknowledges and agrees that the Employers will have no adequate remedy at law,
and would be irreparably harmed, if the Executive breaches or threatens to
breach any of the provisions of this Section 7.  The Executive agrees that the
Employers shall be entitled to equitable and/or injunctive relief to prevent any
breach or threatened breach of this Section 7, and to specific performance of
each of the terms of this Section 7 in addition to any other legal or equitable
remedies that the Employers may have.  The Executive further agrees that he
shall not, in any equity proceeding relating to the enforcement of the terms of
this Section 7, raise the defense that the Employers have an adequate remedy at
law.

 

7.5                                 Special Severability.  The terms and
provisions of this Section 7 are intended to be separate and divisible
provisions and if, for any reason, any one or more of them is held to be invalid
or unenforceable, neither the validity nor the enforceability of any other
provision of this Agreement shall thereby be affected.

 

8.                                       Arbitration of Disputes.  Any
controversy or claim arising out of or relating to this Agreement or the breach
hereof, other than an action brought by the Employers for injunctive or other
equitable relief in the enforcement of the Employers’ rights under Section 7
above, in which case such action may be brought in any court of competent
jurisdiction, shall be settled by arbitration in accordance with the laws of the
Commonwealth of Massachusetts by three arbitrators, one of whom shall be
appointed by the Employers, one by the Executive and the third by the first two
arbitrators.  If the first two arbitrators cannot agree on the appointment of a
third arbitrator, then the third arbitrator shall be appointed by the American
Arbitration Association in the City of Boston, Massachusetts.  Such arbitration
shall be conducted in the City of Boston, Massachusetts in accordance with the
rules of the American Arbitration Association, except with respect to the
selection of arbitrators which shall be as provided in this Section 8.  Judgment
upon the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.  In the event that it shall be necessary or desirable for
the Executive to retain legal counsel and/or incur other costs and expenses in
connection with the enforcement of any or all of Executive’s  rights under this
Agreement, the Employers shall pay (or the Executive shall be entitled to
recover from the Employers, as the case may be) the Executive’s reasonable
attorneys’ fees and other reasonable costs and expenses in connection with the
enforcement of said rights (including the enforcement of any arbitration award
in court) regardless of the final outcome, unless and to the extent that the
arbitrators shall determine that the Executive has not acted in good faith or
that under the circumstances recovery by the Executive of all or part of any
such fees and costs and expenses would be inequitable or otherwise unjust.

 

9.                                       Successors.

 

9.1                                 The Executive.  This Agreement is personal
to the Executive and, without the prior written consent of the Employers, shall
not be assignable by the Executive, except that the Executive’s rights to
receive any compensation or benefits under this Agreement may be transferred or
disposed of pursuant to testamentary disposition, intestate succession or
pursuant to a qualified domestic relations order.  This Agreement shall inure to
the benefit of and be enforceable by the Executive’s heirs, beneficiaries and/or
legal representatives.  In the event of the Executive’s death prior to the
completion by the Employers of all payments due to the

 

18

--------------------------------------------------------------------------------

 

Executive under this Agreement, the Employers shall continue to make such
payments to the Executive’s beneficiary(ies) as designated in writing by the
Executive to the Employers prior to his death (or to his estate, if he fails to
make such designation).

 

9.2                                 The Employers.  This Agreement shall inure
to the benefit of and be binding upon the Employers and their successors and
assigns.  Each of the Company and the Bank shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of its businesses and/or assets to assume expressly and agree
to perform this Agreement in the same manner and to the same extent as if no
such succession had taken place.  Failure of either the Company or the Bank to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the Executive
to compensation in the same amount and on the same terms as he would be entitled
to hereunder if he terminated this Agreement for Good Reason following a Change
in Control, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed to be the Date of
Termination.  As used in this Agreement, “Company,” “Bank” and “Employers” shall
mean the Company, the Bank and the Employers as hereinbefore defined and any
successor to the business and/or assets of either the Company or the Bank as
aforesaid which successor assumes and agrees to perform this Agreement by
operation of law or otherwise.

 

10.                                 Indemnification.  The Executive (and his
heirs, executors and administrators) shall be indemnified and held harmless by
the Employers to the fullest extent permitted by applicable law, regulation,
regulatory policy or other regulatory requirement, against all expenses,
liabilities and losses (including, without limitation, all reasonable attorneys’
fees and all judgments, fines, excise taxes or penalties and amounts paid or to
be paid in settlement) incurred or suffered by the Executive as a consequence of
the Executive being or having been made a party to, or being or having been
involved in, any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that the Executive is or was a trustee, director or officer of the Employers or
is or was serving at the request of the Employers as a trustee, director or
officer of another corporation or other entity (including, but not limited to, a
Subsidiary or an Affiliate of the Employers), and such indemnification shall
continue after the Executive shall cease to be an officer, director or trustee. 
The right to indemnification conferred hereby shall be a contract right and
shall also include, to the extent permitted by applicable law, regulation,
regulatory policy or other regulatory requirement, the right to be paid by the
Employers the expenses incurred in defending any such proceeding in advance of
the final disposition upon receipt by the Employers of an undertaking by or on
behalf of the Executive to repay such amount or a portion thereof, if it shall
ultimately be determined that the Executive is not entitled to be indemnified by
the Employers pursuant hereto or as otherwise authorized by law, regulation,
regulatory policy or other regulatory requirement, but such repayment by the
Executive shall only be in an amount ultimately determined to exceed the amount
to which the Executive was entitled to be indemnified.  The Employers’
acceptance of any such undertaking by or on behalf of the Executive may not be
conditioned upon any evidence or demonstration by or on behalf of the Executive
of any financial capacity to make any such repayment at the time such
undertaking is delivered.

 

19

--------------------------------------------------------------------------------

 

11.                                 Miscellaneous.

 

11.1                           Applicable Law.  This Agreement shall, to the
extent not superseded by federal law, be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts, without regard to principles
of conflict of laws.

 

11.2                           Amendments/Waiver.  This Agreement may not be
amended, waived, or modified otherwise than by a written agreement executed by
the parties to this Agreement or their respective successors and legal
representatives.  No waiver by any party to this Agreement of any breach of any
term, provision or condition of this Agreement by the other party shall be
deemed a waiver of a similar or dissimilar condition or provision at the same
time, or any prior or subsequent time.

 

11.3                           Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed given when received by
hand-delivery to the other party, by facsimile transmission, by overnight
courier, or by registered or certified mail, return receipt requested, postage
prepaid, addressed, if to the Executive, to the Executive at his last address on
file with the Employers and, if to the Employers, to the Employers at their then
current executive offices or to such other address as either party shall have
furnished to the other in writing in accordance herewith.  Notices and
communications shall be effective when actually received by the addressee (which
receipt shall be deemed to have occurred at any time that the addressee refuses
or otherwise attempts to avoid delivery of any such notice or communication).

 

11.4                           Withholdings.  The Employers may withhold from
any amounts payable under this Agreement such taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

 

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

 

11.6                           Captions.  The captions of this Agreement are for
convenience of reference only, are not part of the terms of this Agreement and
shall have no force or effect in the application or interpretation thereof.

 

11.7                           Entire Agreement.  This Agreement contains the
entire agreement between the parties to this Agreement concerning the subject
matter hereof and supersedes all prior agreements, understandings, discussions,
negotiations and undertakings, whether written or oral, between the parties.

 

11.8                           Survivorship.  The respective rights and
obligations of the parties to this Agreement, including, without limitation, any
of their respective rights and obligations under Section 10 of this Agreement,
shall survive any termination of this Agreement or any termination

 

20

--------------------------------------------------------------------------------

 

of the Executive’s employment hereunder for any reason to the extent necessary
to accomplish the intended preservation of such rights and obligations.

 

IN WITNESS WHEREOF, the Executive has hereunto set his hand and each of the
Employers has caused this Agreement to be executed in its name and on its behalf
by a duly authorized officer, in each case as an instrument under seal and as of
the date set forth above.

 

ATTEST:

ENTERPRISE BANCORP, INC.

 

 

 

 

 /s/ Arnold S. Lerner

 

By:

 /s/ George L. Duncan

 

Arnold S. Lerner

 

George L. Duncan.

Vice Chairman

 

Chairman and Chief Executive Officer

 

 

 

 

 

 

ATTEST:

 

ENTERPRISE BANK AND TRUST COMPANY

 

 

 

 

 

 

 /s/ Arnold S. Lerner

 

By:

 /s/ George L. Duncan

 

Arnold S. Lerner

 

George L. Duncan

Vice Chairman

 

Chairman and Chief Executive Officer

 

 

 

 

 

 

WITNESS:

 

EXECUTIVE

 

 

 

 

 

 

/s/ Robert R. Gilman

 

 /s/ John P. Clancy, Jr.

 

 

 

John P. Clancy Jr.

 

21

--------------------------------------------------------------------------------