Western New England Bancorp, Inc. S-8


Exhibit
10.6 


 


WESTERN
NEW ENGLAND BANCORP, INC.





2021
OMNIBUS INCENTIVE PLAN


 


Long-Term
Incentive and Retention Equity Award Agreement

Cover Sheet


 


Western
New England Bancorp, Inc., a Massachusetts corporation (the “Company”), hereby grants shares of the Company’s
common stock, $0.01 par value per share (the “Stock”), to the Grantee named below, subject to the terms and
conditions set forth in this cover sheet, in the attached Long-Term Incentive and Retention Equity Award Agreement (together with
the cover sheet, the “Agreement”), and in the Company’s 2021 Omnibus Incentive Plan (as it may be amended
from time to time, the “Plan”). 


	Grant
    Date:	 
	Name
    of Grantee:	 
	Number
    of Retention Shares:	 
	Target
    Number of Performance Shares:	 
	Retention
    Period:	 
	Performance
    Period:	 


 


By
your signature below, you agree to all of the terms and conditions described in the Agreement and in the Plan. You acknowledge
that you have carefully reviewed the Plan and agree that the Plan will control in the event any provision of this Agreement should
appear to be inconsistent with the Plan.


 


	Grantee:	 	 	Date:	 	 
	 	(Signature)	 	 	 	 
	 	 	 	 	 	 
	Company:	 	 	Date:	 	 
	 	(Signature)	 	 	 	 
	 	 	 	 	 	 
	Name:	 	 	 	 	 
	 	 	 	 	 	 
	Title:	 	 	 	 	 


 


Attachment


 


This
is not a share certificate or a negotiable instrument.


 






     


     

    



WESTERN NEW ENGLAND BANCORP, INC.





2021
OMNIBUS INCENTIVE PLAN 


 


Long-Term
Incentive and Retention Equity Award Agreement


 


	Restricted
    Stock	This
                                         grant consists of an award of time-based restricted shares, subject to the vesting conditions
                                         described below (the “Retention Shares”) and an award of performance-based
                                         restricted shares, subject to the vesting conditions described below (the “Performance
                                         Shares”).  The Retention Shares and the Performance Shares are referred
                                         to together as the “Restricted Stock.”  The purchase price
                                         for the Restricted Stock is deemed paid by your services to the Company.

                                                                                 

	Transferability	To
                                         the extent not yet vested, your Restricted Stock may not be sold, assigned, transferred,
                                         pledged, hypothecated, or otherwise encumbered, whether by operation of law or otherwise,
                                         nor may the Restricted Stock be made subject to execution, attachment, or similar process.  If
                                         you attempt to do any of these things, the Restricted Stock shall immediately be forfeited.  

                                                                               

	Number
    and Vesting 

    of Retention Shares	The
                                         number of Retention Shares is set forth on the cover sheet and will be equal to half
                                         the total number of shares of Stock that comprise the grant of Restricted Stock. The
                                         Retention Shares are subject to time-based vesting conditions described in Exhibit
                                         A to this Agreement.

         

        Your
        Retention Shares will be subject to forfeiture if your Service terminates prior to the applicable Retention Vesting Date
        (as set forth on Exhibit A to this Agreement), except as otherwise provided in this Agreement.

         

	Number
                                         and Vesting 

                                         of Performance
                                         

                                         Shares

         
	The
                                         Performance Shares are subject to the achievement of the Performance Factor described
                                         in Exhibit B to this Agreement. Following the end of the Performance Period, as
                                         set forth on the cover sheet, the Committee will determine the level of achievement of
                                         the Performance Factors and will determine the number of Performance Shares in which
                                         you will vest based on such achievement (which may be greater than or less than the Target
                                         Number of Performance Shares, as set forth on the cover sheet).

         

        Your
        Performance Shares will be subject to forfeiture if your Service terminates prior to the Performance Vesting Date set
        forth in Exhibit B to this Agreement, except as otherwise provided in this Agreement.

         

	Vesting
    and 

    Forfeiture upon 

    Termination of 

    Employment 	Death/Disability.
                                         If your Service terminates prior to the end of the Retention Period (as defined on the
                                         cover sheet) because of your death or Disability (as defined below), then 100% of the
                                         unvested Retention Shares will vest on the effective date of your termination. If your
                                         Service terminates prior to the end of the Performance Period (as defined on the cover
                                         sheet) because of your death or Disability (as defined below), then the Target Number
                                         of Performance Shares will vest on the effective date of your termination.

          




 






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	 	Other
                                         Termination of Employment. If, before the end of the Retention Period, you incur a termination
                                         of Service for any reason other than those specified above (including your retirement),
                                         whether voluntary or involuntary and prior to a Change in Control, your unvested Retention
                                         Shares shall be automatically forfeited upon such termination of Service, and neither
                                         the Company nor any Affiliate shall have any further obligations to you under this Agreement.
                                         If, before the end of the Performance Period, you incur a termination of Service for
                                         any reason other than those specified above, whether voluntary or involuntary and prior
                                         to a Change in Control, your Performance Shares shall be automatically forfeited upon
                                         such termination of Service, and neither the Company nor any Affiliate shall have any
                                         further obligations to you under this Agreement.

                                                                               

	Definition
    of 

    Disability	For
                                         purposes of this Agreement, “Disability” means, as determined
                                         by the Committee and unless otherwise provided in an applicable agreement with the Company,
                                         the Bank, or an Affiliate, your inability to perform each of the essential duties of
                                         your position by reason of a medically determinable physical or mental impairment which
                                         is potentially permanent in character or which can be expected to last for a continuous
                                         period of not less than twelve (12) months.

                                                                               

	Change
    in Control	If,
                                         within twelve months following the effective time of a Change in Control (as defined
                                         in the Plan), your Service is terminated by the Company without Cause or you voluntarily
                                         terminate Service for Good Reason (as defined below), and such termination occurs prior
                                         to the end of the Retention Period or the Performance Period, then 100% of the unvested
                                         Retention Shares and the Target Number of Performance Shares, respectively, will vest
                                         on the date of your termination.

         

        For
        purposes of this Agreement, “Cause” means, unless otherwise provided in an applicable agreement
        with the Company, the Bank, or an Affiliate, your (a) personal dishonesty, (b) incompetence, (c) willful misconduct, (d)
        breach of fiduciary duties involving personal profit, (e) intentional failure to perform stated duties, or (f) willful
        violation of any law, rule, or regulation (other than traffic violations or similar offenses) or final cease-and-desist
        order. Any determination by the Committee whether an event constituting Cause shall have occurred shall be final, binding,
        and conclusive.

         

        For
        purposes of this Agreement, “Good Reason” means, unless otherwise provided in an applicable
        agreement with the Company, the Bank, or an Affiliate, the occurrence of either of the following events, without your
        express written consent: (A) a material diminution in your authority, duties, or responsibilities; or (B) a change in
        your principal place of employment to a place that is not the principal executive office of the Company, or a relocation
        of the Company’s principal executive office to a location that is both more than twenty-five (25) miles away from
        your principal residence and more than twenty-five (25) miles away from the location of the Company’s principal
        executive office at the time of this Agreement. Notwithstanding the foregoing, a resignation will not be considered to
        have been on account of Good Reason unless: (1) you provide the Company not less than thirty (30) days’ advance
        notice in writing within ninety (90) days of the initial occurrence of the condition that is the basis for such Good Reason
        and the Company does not correct the condition in the thirty (30)-day period; and (2) you resign by no later than sixty
        (60) days after the Company’s time period for correcting the condition has expired.

         




 






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	Leaves
    of Absence	For
                                         purposes of this Agreement, your Service does not terminate when you go on a bona fide
                                         employee leave of absence that was approved by the Company, the Bank, or any Affiliate
                                         in writing, if the terms of the leave provide for continued Service crediting, or when
                                         continued Service crediting is required by applicable law. However, your Service will
                                         be treated as terminating ninety (90) days after you went on employee leave, unless your
                                         right to return to active work is guaranteed by law or by a contract. Your Service terminates
                                         in any event when the approved leave ends unless you immediately return to active employee
                                         work.

         

        The
        Committee determines, in its sole discretion, which leaves count for this purpose and when your Service terminates for
        all purposes under the Plan.

         

	Issuance
    	The
                                         issuance of the shares of Stock upon the grant of Restricted Stock pursuant to this Agreement
                                         will be evidenced in such a manner as the Company, in its discretion, deems appropriate,
                                         including, without limitation, book entry, registration, or issuance of one or more stock
                                         certificates, with any unvested Restricted Stock bearing the appropriate restrictions
                                         imposed by this Agreement. As your interest in the Stock vests, the recordation of the
                                         number of Restricted Stock attributable to you will be appropriately modified if necessary.

                                                                               

	Withholding
    Taxes	You
    agree, as a condition of this grant, that you will make acceptable arrangements to pay any withholding or other taxes that
    may be due as a result of or in connection with the Restricted Stock, including the payment of dividends and the vesting of
    Stock acquired under this grant.  In the event that the Company, the Bank, or any Affiliate determines that any
    federal, state, local, or foreign tax or withholding payment is required relating to the Restricted Stock, the Company, the
    Bank, or any Affiliate shall have the right to require such payments from you, or withhold such amounts from other payments
    due to you from the Company, the Bank, or any Affiliate.  To satisfy this withholding obligation, the Company may
    provide you with the opportunity, in its discretion, to have the Company withhold shares of Stock otherwise issuable to you
    or by delivering to the Company shares of Stock already owned by you.  If the Company provides you with the foregoing
    opportunity and you fail to make an election to do either, the Company may determine which method to use, including by withholding
    shares of Stock otherwise issuable to you.  The shares of Stock so delivered or withheld must have an aggregate
    Fair Market Value equal to the withholding obligation and may not be subject to any repurchase, forfeiture, unfulfilled vesting,
    or other similar requirements.



 






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	Retention
    Rights	This
                                         Agreement does not give you the right to be retained by the Company, the Bank, or any
                                         Affiliate in any capacity.  The Company, the Bank, and any Affiliate reserve the
                                         right to terminate your Service at any time and for any reason.

                                                                                 

	Stockholder
    Rights	You
                                         have the right to vote the Retention Shares and to receive any dividends declared or
                                         paid on such Retention Shares. Any distributions you receive as a result of any stock
                                         split, stock dividend, combination of shares, or other similar transaction will be deemed
                                         to be a part of the Retention Shares and subject to the same conditions and restrictions
                                         applicable thereto. The Company may in its sole discretion require any dividends paid
                                         on unvested Retention Shares to be reinvested in shares, which the Company may in its
                                         sole discretion deem to be a part of the Retention Shares and subject to the same conditions
                                         and restrictions applicable to the Retention Shares.

         

        You
        do not have any of the rights of a stockholder with respect to the Performance Shares unless and until any Performance
        Shares in which you vest have been delivered to you.

         

        No
        adjustments are made for dividends, distributions, or other rights if the applicable record date occurs before your share
        certificate is issued (or an appropriate entry is made), except as described in the Plan.

         

	Forfeiture
    of Rights	If
                                         you should take actions in violation or breach of or in conflict with (i) any employment
                                         agreement, (ii) any non-competition agreement, (iii) any agreement prohibiting solicitation
                                         of employees or clients of the Company, the Bank, or any Affiliate, (iv) any confidentiality
                                         obligation with respect to the Company, the Bank, or any Affiliate, (v) any Company or
                                         Bank policy or procedure, (vi) any other agreement, or (vii) any other obligation between
                                         you and the Company, the Bank, or any Affiliate, the Company has the right to cause an
                                         immediate forfeiture of your unvested Restricted Stock, and with respect to those shares
                                         of Restricted Stock vesting during the period commencing twelve (12) months prior to
                                         your termination of Service with the Company due to taking actions in violation or breach
                                         of or in conflict with the aforementioned agreements, policies, or procedures, the right
                                         to cause a forfeiture of those vested shares of Stock.

                                                                               

	Recoupment	This
                                         grant is subject to mandatory repayment by you to the Company to the extent you are or
                                         in the future become subject to (i) any Company or Bank “clawback” or recoupment
                                         policy or (ii) any law, rule, or regulation that requires the repayment by you to the
                                         Company of compensation paid by the Company to you in the event that you fail to comply
                                         with, or violate, the terms or requirements of such policy or law, rule, or regulation. 




 






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	 	If the Company
                                         is required to prepare an accounting restatement due to the material noncompliance of
                                         the Company, as a result of misconduct, with any financial reporting requirement under
                                         the securities laws and you knowingly engaged in the misconduct, were grossly negligent
                                         in engaging in the misconduct, knowingly failed to prevent the misconduct, or were grossly
                                         negligent in failing to prevent the misconduct, you will reimburse the Company the amount
                                         of any payment in settlement of this Grant earned or accrued during the twelve (12)-month
                                         period following the first public issuance or filing with the Securities and Exchange
                                         Commission (whichever first occurred) of the financial document that contained such material
                                         noncompliance.

                                                                      

	Adjustments	In
                                         the event of a stock split, a dividend, or a similar change in the shares, the number
                                         of shares covered by this grant may be adjusted (and rounded down to the nearest whole
                                         number) pursuant to the Plan.

         

        Your
        Restricted Stock will be subject to the terms of any applicable agreement of merger, liquidation, or reorganization in
        the event the Company is subject to such corporate activity.

         

	Legends	All
                                         share certificates representing the Stock issued in connection with this grant shall,
                                         where applicable, have endorsed thereon the following legend:

         

        “THE
        SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN AN AGREEMENT BETWEEN
        THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE
        PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE HOLDER
        OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE.”

         

	Applicable
    Law	This
                                         Agreement will be interpreted and enforced under the laws of the Commonwealth of Massachusetts,
                                         other than any conflicts or choice of law rule or principle that might otherwise refer
                                         construction or interpretation of this Agreement to the substantive law of another jurisdiction.

                                                                               

	The
    Plan	The
                                         text of the Plan is incorporated in this Agreement by reference.

         

        Certain
        capitalized terms used in this Agreement are defined in the Plan, and have the meaning set forth in the Plan.

         

        This
        Agreement and the Plan constitute the entire understanding between you and the Company regarding this grant of Restricted
        Stock. Any prior agreements, commitments, or negotiations concerning this grant are superseded, except that any written
        employment, consulting, confidentiality, non-solicitation, and/or severance agreement between you and the Company, the
        Bank, or any Affiliate will supersede this Agreement with respect to its subject matter.

         




 






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	Data
    Privacy	To
                                         administer the Plan, the Company may process personal data about you. Such data includes,
                                         but is not limited to, the information provided in this Agreement and any changes thereto,
                                         other appropriate personal and financial data about you such as home address and business
                                         addresses and other contact information, and any other information that might be deemed
                                         appropriate by the Company to facilitate the administration of the Plan.

         

        By
        accepting this grant, you give explicit consent to the Company to process any such personal data. You also give explicit
        consent to the Company to transfer any such personal data outside the country in which you work, including, with respect
        to non-U.S. resident grantees, to the United States, to transferees who will include the Company and other persons who
        are designated by the Company to administer the Plan.

         

	Consent
    to Electronic 

    Delivery	The
                                         Company may choose to deliver certain statutory materials relating to the Plan in electronic
                                         form.  By accepting this grant, you agree that the Company may deliver the Plan
                                         prospectus and the Company’s annual report to you in an electronic format.  If
                                         at any time you would prefer to receive paper copies of these documents, as you are entitled
                                         to, the Company would be pleased to provide copies.  Please contact the Secretary
                                         of the Company to request paper copies of these documents.

                                                                                 

	Code
    Section 409A	The
    grant is intended to be exempt from, or to comply with, Code Section 409A to the extent subject thereto, and, accordingly,
    to the maximum extent permitted, this Agreement will be interpreted and administered to be in compliance with Code Section
    409A.  Notwithstanding anything to the contrary in the Plan or this Agreement, neither the Company, the Bank, their
    Affiliates, the Board, nor the Committee will have any obligation to take any action to prevent the assessment of any excise
    tax or penalty on you under Code Section 409A, and neither the Company, the Bank, their Affiliates, the Board, nor the Committee
    will have any liability to you for such tax or penalty.


 


By
signing this Agreement, you agree to all of the terms and

conditions described in this Agreement and in
the Plan.


 




    7 


     

    

 


Exhibit
A


 


Long-Term
Incentive and Retention Equity Award Agreement 


 


Number
and Vesting of Retention SHARES


 


The
Retention Shares are subject to the Time-Based Vesting Requirements set forth below.


 


Time-Based
Vesting Requirements:


 


Except
as otherwise described in the Agreement, subject to your continued Service through each applicable Retention Vesting Date, your
Retention Shares will vest as follows:


 


	Retention
    Vesting Date	Vesting
    Percentage
	 	 
	[Date]	[33%]
	 	 
	[Date]	[33%]
	 	 
	[Date]	[34%]


 


The
resulting aggregate number of vested Retention Shares will be rounded down to the nearest whole number as to each Retention Vesting
Date, and you cannot vest in more than the number of Retention Shares set forth on the cover sheet.


 




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Exhibit
B


 


LONG-TERM
INCENTIVE AND RETENTION EQUITY AWARD AGREEMENT 


 


Number
and Vesting of Performance SHARES


 


The
Performance Shares are subject to both the Performance-Based Vesting Requirements and Time-Based Vesting Requirements set forth
below.


 


Performance-Based
Vesting Requirements:


 


The
Committee will determine the number of Performance Shares in which you will vest based on the Company’s achievement of Return
on Equity (“ROE”) goals during the Performance Period set forth on the cover sheet. The Company’s ROE
will be measured over [three] periods within the Performance Period, as follows:


 


	 	 	ROE
    Targets
	 	 	Threshold	Target	Maximum
	Period
    1	[Date]
    – [Date]	[%]	[%]	[%]
	Period
    2	[Date]
    – [Date]	[%]	[%]	[%]
	Period
    3	[Date]
    – [Date]	[%]	[%]	[%]


 


Following
the end of each of [Period 1, Period 2, and Period 3], but no later than March 15th of the calendar year following
the end of such period, the Committee will determine and certify the ROE for the Company based on data available to the public.
Then, the Committee will multiply the ROE Performance Factor that corresponds to the level of ROE the Company has achieved, as
determined under the table below, by [one-third] of the Target Number of Performance Shares (as set forth on the cover sheet),
to determine the number of Performance Shares that will be earned for each of [Period 1, Period 2, and Period 3].


 





	Level of ROE Achieved	ROE Performance Factor (%)
	Less than Threshold	[0%]
	Threshold	[50%]
	Target	[100%]
	Maximum	[150%]







 


Notwithstanding
anything to the contrary in the Agreement or this Exhibit B, no (0%) Performance Shares will be earned for a period if
Threshold ROE is not attained. If the ROE for the any period falls between threshold and target performance levels, or between
target and maximum performance levels, the ROE Performance Factor will be interpolated on a linear slope.


 






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Following
the end of the Performance Period, but no later than March 15th of the calendar year following the end of the Performance
Period, you will vest in the number of Performance Shares equal to the sum of the number of Performance Shares earned in each
of [Period 1, Period 2, and Period 3]. In no event may you vest in a number of Performance Shares greater than [150%] of the Target
Number of Performance Shares.


 


Time-Based
Vesting Requirements:


 


In
order to vest in the Performance Shares that you earn in accordance with this Exhibit B, you must remain in Service with
the Company or an Affiliate through the end of the Performance Period.


 








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