**EXHIBIT 10.18**

                                                                                                                                                                                    ExecutionCopy 

 

 

 

 

 

**ABINGTON SAVINGS BANK**

**DEFINED CONTRIBUTION SUPPLEMENTAL EXECUTIVE RETIREMENTAGREEMENT**

 

 

 

 

 

                                                                                                                                                                                                                

 

**TABLE OF CONTENTS**
| **PART 1.  DEFINITIONS**                                                 |                                                               |
|--------------------------------------------------------------------------|--------------------------------------------------------------------|
|                                                                     |                                                               |
|                                                                     | **1.1.  Beneficiary**                                              |   |
|                                                                     | **1.2. Board or Board of  Directors**                              |   |
|                                                                     | **1.3. Change in Control**                                         |   |
|                                                                     | **1.4. Code**                                                      |   |
|                                                                     | **1.5. Fund**                                                      |   |
|                                                                     | **1.6.  Fund Balance**                                             |   |
|                                                                     | **1.7.  Good Reason**                                              |   |
|                                                                     | **1.8. Normal Retirement Date**                                    |   |
|                                                                     | **1.9.  Trustee**                                                  |   |
|                                                                     | **1.10. Vested Benefit**                                           |   |
|                                                                     | **1.11. Vested Percentage**                                        |   |
|                                                                     |                                                               |   |
| **PART  2. BANK CONTRIBUTIONS TO FUND; PAYMENTS FROM FUND TO EXECUTIVE** |                                                               |
|                                                                     |                                                               |
|                                                                     | **2.1.  Establishment of and Contributions to the Fund**           |   |
|                                                                     | **2.2.  Additional Contributions Upon Change in Control.**         |   |
|                                                                     | **2.3. Investment of the Fund.**                                   |   |
|                                                                     | **2.4. Payments from Fund**                                        |   |
|                                                                     | **2.5. No Benefits  Upon Discharge for Cause**                     |   |
|                                                                     | **2.6. Discharge for Cause.**                                      |   |
|                                                                     |                                                               |   |
| **PART 3. ADDITIONAL  PROVISIONS**                                       |                                                               |
|                                                                     |                                                               |
|                                                                     | **3.1. Alternative  Forms of Benefit Payment**                     |   |
|                                                                     | **3.2. Beneficiary  Designation Procedure**                        |   |
|                                                                     | **3.3.  Alienability and Assignment Prohibition**                  |   |
|                                                                     | **3.4.  Binding Obligation of Bank and any Successor in Interest** |   |
|                                                                     | **3.5. Consultation with  Tax Advisor.**                           |   |
|                                                                     | **3.6.  Amendment**                                                |   |
|                                                                     | **3.7.  General**                                                  |   |
|                                                                     | **3.8.  Headings**                                                 |   |
|                                                                     | **3.9. Applicable Law**                                            |   |
|                                                                     | **3.10. Named  Fiduciary and Plan Administrator**                  |   |
|                                                                     | **3.11. Claims Procedure**                                         |   |
|                                                                     | **3.12.  Arbitration**                                             |   |
|                                                                     | **3.13. Entire Agreement**                                         |   |
|                                                                     | **3.14. Interpretation**                                           |   |
|                                                                     | **3.15.  Employment**                                              |   |
|                                                                     | **3.16. Communications**                                           |   |

**SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT**

             This Agreement, made and enteredinto as of July 26, 2001 by and between Abington Savings Bank, a Bankorganized and existing under the laws of The Commonwealth of Massachusetts (the“Bank”) and a wholly-owned subsidiary of Abington Bancorp, Inc. (the “HoldingCompany”), and Kevin M. Tierney, Sr., a key employee and executive of the Bank(the “Executive”).  The effective dateof this Agreement shall be July 26, 2001.

WITNESSETH.

             **WHEREAS**, the Executive is a valuable, key employee ofthe Bank, serving the Bank as a senior executive; and

             **WHEREAS**, because of the Executive’s experience,knowledge of the affairs of the Bank, and reputation and contacts in thebanking industry, the Bank deems the Executive’s continued employment with theBank important for its future growth; and

             **WHEREAS**, it is the desire of the Bank and in its bestinterest that the Executive’s services be retained; and

             **WHEREAS**, in order to induce the Executive to continuein the employ of the Bank, the Bank has entered into this Agreement to providehim or his beneficiaries with certain benefits in accordance with the terms andconditions hereinafter set forth; and

             **WHEREAS**, the Bank desires to establish a Fund (asdefined in Section 1.5) and to contribute to the Fund certain assets thatshall be held therein, subject to the terms of this Agreement, until such timeas benefits have been paid to the Executive or his beneficiaries as specifiedherein;

             **NOW, THEREFORE**, in consideration of services performed in thepast and to be performed in the future as well as of the mutual promises andcovenants herein contained, it is agreed as follows:

**Part 1. Definitions**

             1.1.       **Beneficiary** shall mean theperson or persons designated by the Executive in accordance withSection 3.2 hereof to receive benefits under this Agreement after thedeath of the Executive.

             1.2.       **Board**or **Board of Directors** shall mean theBoard of Directors of the Bank, or, where the context requires, the Board ofDirectors of the Holding Company.

             1.3.       **Change in Control** shall have themeaning defined in that certain Special Termination Agreement dated as ofNovember 2, 1998 by and among the Holding Company, the Bank, and the Executive.

             1.4.       **Code** shall mean theInternal Revenue Code of 1986, as amended.

             1.5.       **Fund** shall mean the Fund established by the Bankpursuant to Section 2.1 with the contributions to be made under this Agreement.

             1.6.       **Fund Balance** shall be theaggregate of all contributions made by the Bank to the Fund for the benefit ofthe Executive under this Agreement and the investment proceeds of suchcontributions.

             1.7.       **Good Reason** shall mean:

                           (a) A reduction inthe Executive’s annual base salary as in effect on the date hereof; or

                           (b) A significantdiminution in the nature or scope of the Executive’s responsibilities,authorities, powers, functions or duties; or

                           (c) A material breachby the Bank of any of the provisions of this Agreement which failure or breachshall have continued for thirty (30) days after written notice from theExecutive to the Holding Company or the Bank specifying the nature of suchfailure or breach.

             1.8.       **Normal Retirement Date** shall mean thedate on which the Executive attains age sixty-five (65).

             1.9.       **Trustee** shall mean the trustee to be appointed under thatcertain Trust Agreement established by the Bank in connection with thisAgreement.

             1.10.     **Vested Benefit** shall mean theamount of the Fund Balance that has become vested as of any particular date intime and shall be calculated by multiplying (i) the Fund Balance times (ii) theVested Percentage.  The Vested Benefitshall be paid in the manner chosen by the Executive pursuant to Section 3.1.

             1.11.     **Vested Percentage** shall be zero percent until the “Usual Full VestingDate,” which date shall be the later to occur of the date which is (i) twoyears from the date of this Agreement or (ii) five years from the date theExecutive commenced employment with the Bank. Thereafter the Vested Percentageshall be 100%. Notwithstanding the provisions of the first sentence of thisSection 1.11, if any of the following shall occur before the Usual Full VestingDate, the Vested Percentage shall become 100%:

                           (a) The Executiveterminates his employment with the Bank for Good Reason; or

                           (b) The Executivedies; or

                           (c) The Bank terminatesthe Executive’s employment without Cause; or

                           (d) A Change inControl shall have occurred.

**Part 2. Bank Contributions to Fund; Payments from Fund to****Executive**

**            **2.1.**       Establishment of andContributions to the Fund****.**  As of the date of this Agreement the Bankhas established the Fund with the Trustee under the Trust Agreement for thebenefit of the Executive.  As of thelast day of each Calendar Year, if the Executive is employed by the Bank as ofsuch date, the Bank will contribute to the Fund an amount equal to $[42,000](the “Annual Contribution”).  The Bankwill cease to have any further obligation to pay the Annual Contribution uponthe earlier to occur of (i) the Normal Retirement Date or (ii) the date on whichthe Executive’s employment terminates for any reason.

             2.2.       **Additional ContributionsUpon Change in Control.**  Immediately upon a Change in Control, theBank shall make an irrevocable contribution to the Fund in an amount that isequal to three times the amount of the then current Annual Contribution.  Payments made under this Section 2.2 shallnot have any effect on the Bank’s continuing obligation to make AnnualContributions as provided for in Section 2.1, to the extent that the Executiveremains employed at the end of a calendar year.

**            **2.3.**       Investment of the Fund.**  The assets contributed by the Bank to theFund will be invested by the Trustee as directed by the Executive pursuant tothe Trust Agreement.  Under the terms ofthe Trust, the Executive will have responsibility to make all investmentdecisions.  The Executive shall bear allrisk with respect to such investments. The Bank will have no liability with respect to results obtained as aresult of such investments.

             2.4.      **Paymentsfrom Fund**

                           (a) **Termination of Service.**  If the Executive terminates service as anemployee with the Bank (other than (i) for Cause (whichis provided for in Section 2.5), (ii) by reason of death (which is provided forin Section 2.4(b)) or (iii) before the Normal Retirement Date by reason ofdisability (which is provided for in Section 2.4(c))), he shall beentitled to receive the Vested Benefit, with such payment to commence on hisNormal Retirement Date.  If thetermination of employment is before the Normal Retirement Date, the Executivemay commence to receive the Vested Benefit not later than 60 days after thetermination of employment, with the permission of the Board. In the event thatthe Executive requests permission to commence receiving his Vested Benefitbefore his Normal Retirement Date and the Board refuses to grant permission forsuch early commencement of payments, the Executive may request the Board toreconsider its decision.  If the Boardhas not agreed to permit such early payment by a date which is thirty daysafter the request for reconsideration was made, the Executive shall have theright to receive upon written application to the Bank his Vested Benefit, lessa penalty of 7%.

**                          **(b)**Death of the Executive.**  Upon theExecutive’s death, the Trustee shall pay to the estate of the Executive (or tohis beneficiary if he shall have designated a beneficiary to receive paymentspursuant to Section 3.2) the then remaining Fund Balance.

                           (c) **Disability.**

             (1)In the event that the Executive shall become “disabled” (as defined below)while in the employ of the Bank and prior to his Normal Retirement Date, theBank shall continue to make Annual Contributions until such time as Executivecommences to receive benefits (“**Long TermDisability Date**”) under the long term disability plan maintained bythe Bank. From and after the Long Term Disability Date, the Vested Percentageshall equal 100%.  As of the Long TermDisability Date the Executive shall be entitled to receive the Fund Balance,with such payment to commence on his Normal Retirement Date.  With the permission of the Board, theExecutive may commence to receive the Fund Balance not later than 60 days afterthe termination of employment. Payments under this Section 2.4(c) shall bein addition to any payments otherwise payable to the Executive as a result ofdisability under any other plans or agreements in effect from time to time.

             (2)The Executive shall be considered to be “disabled” when he is no longer capableof performing the material aspects of his employment duties for the Bank as aresult of physical and/or mental impairment. The Executive shall be considered to be no longer “disabled” at suchtime as he returns to work in a position with responsibilities comparable tothose inherent in the position in which he was employed on the date he became“disabled.”

             (3)If the Executive recovers from his disability and returns to the employ of theBank, the Bank will resume making Annual Contributions.

             (4)In the event there is disagreement as to whether the provisions of thisSection 2.4(c) are applicable, the Bank and the Executive (or his personalrepresentative) each shall select a physician. If the physicians are in disagreement, they shall select a thirdphysician.  A majority opinion of thethree physicians as to disability shall be binding on all the partieshereto.  The parties agree that the Bankwill, regardless of the outcome of this procedure, reimburse the Executive (orhis surviving spouse or Beneficiary, as the case may be) for the reasonable andnecessary fees and costs directly attributable to such procedure.

**            **2.5.       **No Benefits UponDischarge for Cause****.**  Should the Executive be discharged for Causein accordance with the procedures set forth in Section 2.6 at any time(before or after his Normal Retirement Date), all Benefits under Part 2 of thisAgreement shall be forfeited.  If adispute arises as to discharge for “Cause”, such dispute shall be resolved byarbitration as set forth in Section 3.12 of this Agreement.

             2.6.      **Discharge for Cause.**

**                          **(a) **Cause.**  The term“Cause” shall mean the Executive’s deliberate dishonesty with respect to theHolding Company or the Bank or any subsidiary or affiliate thereof; convictionof a crime involving moral turpitude; or gross and willful failure to perform(other than on account of a medically determinable disability which renders theExecutive incapable of performing such services) a substantial portion of theExecutive’s duties and responsibilities as an officer of the Holding Company orthe Bank, which failure continues for more than thirty days after writtennotice given to the Executive pursuant to a two-thirds vote of all of themembers of the Board then in office, such vote to set forth in reasonabledetail the nature of such failure.

**                          **(b)**No Limitation on Authority of Board.**  As is provided in Section 3.15, nothingcontained in this Agreement (and nothing contained in this Section 2.6)shall in any way limit the right of the Holding Company or the Bank todischarge the Executive with or without Cause or to limit the access of theExecutive to the premises or assets of the Bank or the Holding Company.

**Part 3. Additional Provisions**

**            **3.1.       **Alternative Forms ofBenefit Payment****.**  TheExecutive shall have the right upon becoming subject to the Plan to elect theform of payment in which his Vested Benefit is to be paid.  The Executive shall designate the form ofpayment in which his Vested Benefit is to be paid in writing and shall submitsuch writing to the Executive Vice President or Treasurer of the Bank within[  ] months of the date of this Agreement.In any Calendar Year prior to the year in which amounts become payablehereunder, and at least six months prior to the Executive’s termination ofemployment, the Executive may change the form of payment he has elected. TheExecutive is entitled to receive the Vested Benefit in a lump sum or in monthlyor annual installments payable over a period not to exceed five years.

**            **3.2.       **Beneficiary DesignationProcedure****.** The Executive may designate one or moreBeneficiaries to receive, upon the Executive’s death, specified percentages ofany benefit payments to be paid hereunder. The Executive shall designate any such Beneficiaries in writing andshall submit such writing to the Executive Vice President or Treasurer of theBank.  Only designated Beneficiariesalive at the Executive’s death shall be entitled to share in the benefitpayments.  If no designated Beneficiaryis alive at the Executive’s death, his surviving spouse shall be entitled toall benefits payable under this Agreement. If the Executive dies leaving neither a designated Beneficiary nor asurviving spouse, his estate shall be entitled to any benefits payable underthis Agreement.

**            **3.3.       **Alienability and Assignment Prohibition****.**  Neither the Executive, his surviving spousenor any other Beneficiary under this Agreement shall have any power or right totransfer, assign, anticipate, hypothecate, mortgage, commute, modify orotherwise encumber in advance any of the benefits payable hereunder nor shallany of said benefits be subject to seizure for the payment of any debts,judgments, alimony or separate maintenance owed by the Executive or hisBeneficiary, nor be transferable by operation of law in the event ofbankruptcy, insolvency or otherwise.  Inthe event the Executive or any Beneficiary attempts assignment, commutation,hypothecation, transfer or disposal of the benefits hereunder, the Bank’sliabilities shall forthwith cease and terminate.

**            **3.4.       **Binding Obligation of Bank and any Successor in Interest****.**  This Agreement shall bind the Executive andthe Bank, their heirs, successors, personal representatives and assigns. TheBank expressly agrees that it shall not merge or consolidate into or withanother bank or sell substantially all of its assets to another bank, firm orperson until such bank, firm or person expressly agrees, in writing, to assumeand discharge the duties and obligations of the Bank under this Agreement.

**            **3.5.       **Consultation with Tax Advisor.** The Bank has advised the Executive to consultwith a tax advisor to select the form and schedule for receipt of benefitsunder this Agreement.  The Executiveacknowledges that the different form and timing choices he may select willresult in differing tax consequences.

**            **3.6.       **Amendment****.** During the lifetime of the Executive, thisAgreement may be amended only with the mutual written assent of the Executiveand the Bank.

             3.7.       **General****.** The benefits provided by the Bank to theExecutive pursuant to this Agreement are in the nature of a fringe benefit andshall in no event be construed to affect or limit the Executive’s current orprospective salary increases, cash bonuses or profit-sharing distributions orcredits or his right to participate in or be covered by any qualified ornon-qualified pension, profit-sharing, group, bonus or other supplementalcompensation or fringe benefit plan.

**            **3.8.       **Headings****.**  Headingsand subheadings in this Agreement are inserted for reference and convenienceonly and shall not be deemed a part of this Agreement.

**            **3.9.**       Applicable Law****.**  ThisAgreement shall be governed by, and construed and enforced in accordance with,the substantive laws of The Commonwealth of Massachusetts without regard to itsprinciples of conflicts of laws.

**            **3.10.     **Named Fiduciary and Plan Administrator****.** The Plan Administrator of this plan shall beAbington Savings Bank until another administrator is chosen by the Board.  As Plan Administrator, the Bank shall beresponsible for the management, control and administration of the benefits tobe provided under this Agreement.

**            **3.11.     **Claims Procedure****.**  In theevent a dispute arises over benefits payable under this Agreement and benefitsare not paid to the Executive (or to his estate in the case of the Executive’sdeath) and such claimants feel they are entitled to receive such benefits, thena written claim must be made to the Plan Administrator named above within sixty(60) days from the date payments are refused. The Plan Administrator shall review the written claim and if the claimis denied, in whole or in part, it shall provide in writing within sixty (60)days of receipt of such claim its specific reasons for such denial, referenceto the provisions of this Agreement upon which the denial is based and anyadditional material or information necessary to perfect the claim. Such writtennotice shall further indicate the additional steps to be taken by claimants ifa further review of the claim denial is desired.  A claim shall be deemed to have been denied if the PlanAdministrator fails to take any action within the aforesaid sixty-day period.

             If claimants desire a second reviewthey shall notify the Plan Administrator in writing within ninety (90) days ofthe first claim denial.  Claimants mayreview this Agreement or any documents relating thereto and submit any writtenissues and comments they may feel appropriate. In its sole discretion, the Plan Administrator shall then review thesecond claim and provide a written decision within sixty (60) days of receiptof such claim. This decision shall likewise state the specific reasons for thedecision and shall include reference to specific provisions of this Agreementupon which the decision is based.

**            **3.12.     **Arbitration****.** Anycontroversy or claim arising out of or relating to the Agreement, or the breachthereof, or any failure to agree where agreement of the parties is necessarypursuant hereto, including the determination of the scope of this agreement toarbitrate, shall be resolved by the following procedures:

                           (a) The parties agreeto submit any dispute to final and binding arbitration administered by theAmerican Arbitration Association (the “AAA”), pursuant to the CommercialArbitration Rules of the AAA as in effect at the time of submission.  The arbitration shall be held in Boston,Massachusetts before a single neutral, independent, and impartial arbitrator(the “Arbitrator”).

                           (b)Unless the parties have agreed upon the selection of the Arbitrator beforethen, the AAA shall appoint the Arbitrator within thirty (30) days after thesubmission to AAA for binding arbitration. The arbitration hearings shall commence within fifteen (15) days afterthe selection of the Arbitrator.  Eachparty shall be limited to two pre-hearing depositions each lasting no longerthan two (2) hours.  The parties shallexchange documents to be used at the hearing no later than ten (10) days priorto the hearing date.  Each party shallhave no longer than three (3) hours to present its position, and the entireproceedings before the Arbitrator shall be on no more than two (2) hearing dayswithin a two week period.  The awardshall be made no more than ten (10) days following the close of theproceeding.  The Arbitrator’s awardshall not include consequential, exemplary, or punitive damages.  The Arbitrator’s award shall be a final andbinding determination of the dispute and shall be fully enforceable in anycourt of competent jurisdiction.  Exceptin a proceeding to enforce the results of the arbitration, neither party northe Arbitrator may disclose the existence, content, or results of anyarbitration hereunder without the prior written consent of both parties.

**            **3.13.     **Entire Agreement****.**  ThisAgreement constitutes the entire agreement between the parties pertaining toits subject matter and supersedes all prior and contemporaneous agreements,understandings, negotiations, prior draft agreements, and discussions of theparties, whether oral or written.

**            **3.14.     **Interpretation****.**  When areference is made in this Agreement to Sections or Exhibits, such referenceshall be to a Section of or Exhibit to this Agreement unless otherwiseindicated.  Unless the context otherwiserequires, throughout this Agreement, references to Sections refer to Sectionsof this Agreement. References to Sections include subsections, which are partof the related Section (*e.g.*, asection numbered “Section 5.5(a)” would be part of “Section 5.5” and referencesto “Section 5.5” would also refer to material contained in the subsectiondescribed as “Section 5.5(a)”). The recitals hereto constitute an integral partof this Agreement.  The headingscontained in this Agreement are for reference purposes only and shall notaffect in any way the meaning or interpretation of this Agreement.  Whenever the words “include”, “includes” or“including” are used in this Agreement, they shall be deemed to be followed bythe words “without limitation”.  Thephrases “the date of this Agreement”, “the date hereof” and terms of similarimport, unless the context otherwise requires, shall be deemed to refer to thedate set forth in the Preamble to this Agreement.

**            **3.15.     **Employment****.** No provisionof this Agreement shall be deemed to restrict or limit any existing employmentagreement by and between the Holding Company or the Bank and the Executive, norshall any conditions herein create specific employment rights to the Executivenor limit the right of the Holding Company or the Bank to discharge theExecutive with or without Cause.  In asimilar fashion, no provision shall limit the Executive’s rights to voluntarilyterminate his employment at any time.

**            **3.16.     **Communications****.**  All noticesand other communications hereunder shall be in writing and shall be given byhand, sent by facsimile transmission with confirmation of receipt requested,sent via a reputable overnight courier service with confirmation of receiptrequested, or mailed by registered or certified mail (postage prepaid andreturn receipt requested) to the parties at the their respective addresses setforth below (or at such other address for a party as shall be specified by likenotice), and shall be deemed given on the date on which delivered by hand orotherwise on the date of receipt as confirmed:

                                        Tothe Bank or Holding Company:

                                                     AbingtonSavings Bank                                                     536Washington Street                                                     Abington,Massachusetts 02351                                                     Attention:Treasurer

                                        Tothe Executive:

                                                     KevinM. Tierney, Sr.                                                     12Hussey Avenue                                                     Danvers,Massachusetts 01923

             **IN WITNESS WHEREOF**, the parties have executed thisAgreement as an instrument under seal, as of the date first written above.

|                                   |                                    |   |                 | **ABINGTON  SAVINGS BANK**     |
|----------------------------------------|-----------------------------------------|--------|----------------------|--------------------------------|
|                                   |                                    |   |                 |                           |
| /S/Lewis J. Paragona                   |                                    | By:    | Vice President/Clerk |
|                                        |                                    |   |                      |
| Witness                                |                                    |   | Title                |
|                                   |                                    |   |                 |                           |
|                                   |                                    |   |                 | **EXECUTIVE**                  |
|                                   |                                    |   |                 |                           |
|                                   |                                    |   | By              |  /S/Kevin M. Tierney, Sr. |
|                                   |                                    |   |                 |                                |
|                                   |                                    |   |                 | Kevin M. Tierney,  Sr.         |
|                                   |                                    |   |                 |                           |
| The undersigned  hereby guarantees the |                                    |   |                 |
| obligations of  Abington Savings Bank  |                                    |   |                 |
| under the foregoing  agreement         |                                    |   |                 |
|                                   |                                    |   |                 |                           |
| **ABINGTON  BANCORP, INC**.            |                                    |   |                 |
|                                   |                                    |   |                 |                           |
| By:                                    | James P. McDonough                      |   |                 |                           |
|                                   |                                         |   |                 |                           |
| Title:                                 | President & Chief Executive Officer |   |                 |                           |
|                                   |                                         |   |                 |                           |
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| [Seal]                                 |                                    |   |                 |                           |