EX-10.5


     

    Exhibit
      10.5



    SUPPLEMENTAL
      EXECUTIVE RETIREMENT PLAN

    FOR
      THE

    CHIEF
      EXECUTIVE OFFICER OF BERKSHIRE BANK

    


    Article
      1

    Description,
      Purpose and Definitions

    


    1.1 Name.
      The name
      of this Plan is the “Berkshire Bank Supplemental Executive Retirement
      Plan.”

    


    1.2 Purpose.
      The
      purpose of the Plan is to promote the retention of Michael P. Daly, the Chief
      Executive Officer of the Company, by providing an additional source of
      retirement income to supplement that available to him from other
      sources.

    


    1.3 Definitions.
      For
      purposes of the Plan, the following words and phrases shall have the meanings
      indicated, unless the context clearly indicates otherwise.

    


    “Bank”
      means
      Berkshire Bank, Pittsfield, Massachusetts.

    


    “Cause”
      means
      termination of employment because of Executive’s personal dishonesty, willful
      misconduct, breach of fiduciary duty involving personal profit, intentional
      failure to perform stated duties, willful violation of any law, rule or
      regulation (other than traffic violations or similar infractions) or a final
      cease-and-desist order.

    


    “Change
      in Control”
      means an
      event of a nature that: (i) would be required to be reported in response to
      Item
      1(a) of the current report on Form 8-K, as in effect on the date hereof,
      pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
      “Exchange Act”); or (ii) results in a Change in Control of the Bank or the
      Company within the meaning of the Bank Change in Control Act and the Rules
      and
      Regulations promulgated by the Federal Deposit Insurance Corporation (“FDIC”) at
      12 C.F.R. § 303.4(a) with respect to the Bank and the Board of Governors of the
      Federal Reserve System (“FRB”) at 12 C.F.R. § 225.41(b) with respect to the
      Company, as in effect on the date hereof; or (iii) results in a transaction
      requiring prior FRB approval under the Bank Holding Company Act of 1956 and
      the
      regulations promulgated thereunder by the FRB at 12 C.F.R. § 225.11, as in
      effect on the date hereof except for the Company’s acquisition of the Bank; or
      (iv) without limitation such a Change in Control shall be deemed to have
      occurred at such time as (A) any “person” (as the term is used in Sections 13(d)
      and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined
      in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
      of
      the Bank or the Company representing 20% or more of the Bank’s or the Company’s
      outstanding securities except for any securities of the Bank purchased by the
      Company in connection with the conversion of the Bank to the stock form and
      any
      securities purchased by any tax-qualified employee benefit plan of the Bank;
      or
      (B) individuals who constitute the Board of Directors on the date hereof (the
      “Incumbent Board”) cease for any reason to constitute at least a majority
      thereof, provided that any person becoming a director subsequent to the date
      hereof whose election was approved by a vote of at least three-quarters (3/4)
      of
      the directors comprising the Incumbent Board, or whose nomination for election
      by the Company’s stockholders was


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    approved
      by the same Nominating Committee serving under an Incumbent Board, shall be,
      for
      purposes of this clause (B), considered as though he were a member of the
      Incumbent Board; or (C) a plan of reorganization, merger, consolidation, sale
      of
      all or substantially all the assets of the Bank or the Company or similar
      transaction occurs in which the Bank or Company is not the resulting entity;
      or
      (D) solicitations of shareholders of the Company, by someone other than the
      current management of the Company, seeking stockholder approval of a plan of
      reorganization, merger or consolidation of the Company or Bank or similar
      transaction with one or more corporations as a result of which the outstanding
      shares of the class of securities then subject to the plan or transaction are
      exchanged for or converted into cash or property or securities not issued by
      the
      Bank or the Company shall be distributed; or (E) a tender offer is made for
      20%
      or more of the voting securities of the Bank or the Company.

    


    “Company”
      means
      Berkshire Hills Bancorp, Inc., a Delaware corporation.

    


    “Disability”
      means
      Executive’s absence from employment which: (i) is due to his inability to engage
      in any substantial gainful activity by reason of any medically determinable
      physical or mental impairment which can be expected to result in death or can
      be
      expected to last for a continuous period of not less than twelve (12) months;
      or
      (ii) results from a medically determinable physical or mental impairment which
      can be expected to result in death or can be expected to last for a continuous
      period of not less than twelve (12) months, and causes Executive to receive
      income replacement benefits for a period of not less than three (3) months
      under
      an accident and health plan covering the Bank’s employees.

    


    “Executive”
      means
      Michael P. Daly, Chief Executive Officer of the Bank.

    


    “Final
      Average Earnings” means
      the
      highest average of the total salary and bonus paid to executive for any three
      consecutive completed calendar years preceding termination.

    


    “Separation
      from Service”
      means
      Executive’s termination from employment with the Bank on account of Executive’s
      death, Disability, retirement, or other such termination of employment.
      Executive will not be deemed to have experienced a Separation from Service
      if he
      is on military leave, sick leave, or other bona fide leave of absence, to the
      extent such leave does not exceed a period of six (6) months or, if longer,
      such
      longer period of time as is protected by either statute or contract. Executive
      will not be deemed to have experienced a Separation from Service, if he
      continues to provide “significant services” to the Company. For purpose of the
      preceding sentence, Executive will be considered to provide “significant
      services” if he provides continuing services that average at least twenty
      percent (20%) of the services provided by him during the immediately preceding
      three (3) full calendar year of employment and the annual remuneration paid
      for
      such services is at least twenty percent (20%) of the average annual
      compensation earned during the final three (3) full calendar years of
      employment.

    


    Article
      2

    Eligibility

    


    2.1 Entitlement
      to Benefits.
      Except
      to the extent provided in Sections 3.2, 3.3 and 3.4, Executive shall become
      entitled to receive a benefit under the Plan only if his
      employment


    
      
        
        

      

      
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    with
      the
      Bank terminates for reasons other than Cause after he has attained age 62.
      Notwithstanding anything in this Plan to the contrary, no benefit shall be
      payable to Executive if his employment is terminated for Cause.

    


    Article
      3

    Supplemental
      Retirement Benefits

    


    3.1 Basic
      Benefit.
      Subject
      to the succeeding provisions of this Article, Executive shall be entitled to
      an
      annual benefit equal to 46.6%
      of his
      Final Average Earnings upon his separation from service (other than for Cause)
      at or after attaining age 62.

    


    3.2 Early
      Retirement Benefit.
      If
      Executive’s separation from service occurs prior to the date he attains age 62
      but after attaining age 55, other than by reason of his death or Disability
      or
      following a Change in Control, he shall be entitled to a percentage of the
      basic
      benefit determined under Section 3. The percentage of Executive’s benefit
      under this Section 3.2 shall be determined as follows:

    


    
      	 	
              (i)

            	
              If
                he retires during the calendar year in which he attains age 55, the
                benefit otherwise determined under Section 3.1 shall be reduced by
                50%.

            


    

    


    
      	 	
              (ii)

            	
              If
                he retires during the calendar year in which he attains age 56, the
                benefit otherwise determined under Section 3.1 shall be reduced by
                40%.

            


    

    


    
      	 	
              (iii)

            	
              If
                he retires during the calendar year in which he attains age 57, the
                benefit otherwise determined under Section 3.1 shall be reduced by
                30%.

            


    

    


    
      	 	
              (iv)

            	
              If
                he retires during the calendar year in which he attains age 58, the
                benefit otherwise determined under Section 3.1 shall be reduced by
                20%.

            


    

    


    
      	 	
              (v)

            	
              If
                he retires during the calendar year in which he attains age 59, the
                benefit otherwise determined under Section 3.1 shall be reduced by
                15%.

            


    

    


    
      	 	
              (vi)

            	
              If
                he retires during the calendar year in which he attains age 60, the
                benefit otherwise determined under Section 3.1 shall be reduced by
                10%.

            


    

    


    
      	 	
              (vii)

            	
              If
                he retires during the calendar year in which he attains age 61, the
                benefit otherwise determined under Section 3.1 shall be reduced by
                5%.

            


    

    


    Such
      benefit shall be paid in accordance with Executive’s election under Section 3.5
      at the time specified in Section 3.6.

    


    3.3 Death
      and Disability Benefits.

    


    
      	 	
              A.

            	
              If
                Executive dies while employed by the Bank or his separation from
                service
                occurs by reason of his Disability, there shall be paid to him or
                his
                designated beneficiary an amount equal to the benefit he would
                have

            


    


    
      
        
        

      

      
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    received
      under Section 3.1 if he had retired on the date immediately preceding his date
      of death or termination of employment and, as of such date, was deemed to
      satisfy the age requirement of Section 3.1. Such benefit shall be paid in
      accordance with his election under Section 3.5 at the time specified in Section
      3.6.

    


    
      	 	
              B.

            	
              If
                Executive dies after his entitlement to a benefit has been established
                by
                reason of his termination of employment but prior to the time that
                benefit
                payment(s) have commenced, such payment(s) shall be made to his
                beneficiary in accordance with his
                election.

            


    

    


    
      	 	
              C.

            	
              Executive
                may, on a form prescribed by and filed with the Administrator, designate
                a
                beneficiary to receive any death benefit payable under this section.
                If no
                effective beneficiary designation is on file at the time of his death,
                the
                death benefit under this section shall be paid as
                follows:

            


    

    


    
      	 	
              (1)

            	
              To
                his surviving spouse; or 

            


    

    


    
      	 	
              (2)

            	
              If
                no spouse survives, to his surviving children in equal shares, with
                the
                descendants of a child who has predeceased him taking such child’s share
                by representation; or

            


    

    


    
      	 	
              (3)

            	
              If
                none of his spouse and descendants is living, to the representative
                of his
                estate.

            


    

    


    
      	 	
              D.

            	
              The
                automatic beneficiaries set forth in Subsection C and, except as
                otherwise
                provided in Executive’s duly filed beneficiary designation, the
                beneficiaries named in such designation, shall become fixed at his
                death
                so that if a beneficiary survives him but dies before final payment
                of the
                death benefit, any remaining death benefits shall be paid to the
                representative of such beneficiary’s
                estate.

            


    

    


    3.4 Change
      in Control Benefit

    


    If
      Executive experiences a separation from service with the Bank following a Change
      in Control (other than for Cause), there shall be paid to him an amount equal
      to
      the benefit he would have received if he had retired on the date immediately
      preceding his date of termination of employment and, as of such date, was deemed
      to satisfy the age requirements of Section 3.1. Such benefit shall be paid
      in a
      single lump sum within ten (10) days of the Change in Control. The benefit
      payable under this provision shall be calculated using Executive’s Final Average
      Earnings as of his date of termination.

    


    3.5 Form
      of Benefit.

    


    
      	 	
              A.

            	
              Upon
                Executive’s entitlement to a benefit under this Plan, his benefit shall be
                paid in the form of (i) a single life annuity with twenty (20)
                annual

            


    


    
      
        
        

      

      
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    payments
      guaranteed or (ii) a lump sum which is actuarially equivalent to the annuity
      form of payment in (i), as designated by Executive on an election form provided
      by the Bank for such purpose.

    


    
      	 	
              B.

            	
              Executive
                may, while employed by the Bank, change the form in which his benefits
                shall be paid by filing a revised election indicating such change
                at least
                one (1) calendar year prior to the date payments are to commence.
                Such
                election shall be irrevocable beginning one (1) calendar year prior
                to the
                date payments are to commence and the election must defer the payment
                date
                by at least five (5) calendar years beyond the previously scheduled
                commencement date. No changes in the form of benefit payment shall
                be
                permitted following his termination of
                employment.

            


    

    


    3.6 Time
      of Payment/Calculation of Lump Sum.

    


    
      	 	
              A.

            	
              Benefit
                payments made to Executive or Executive’s beneficiary pursuant to Sections
                3.1, 3.2 or 3.3 shall commence in accordance with his election under
                Section 3.5 not later than 60 days following his separation from
                service.

            


    

    


    
      	 	
              B.

            	
              For
                purposes of this Plan, any lump sum calculation shall be made assuming
                a
                mortality age using the 1994 Group Annuity Reserve (GRA) table and
                a
                discount rate of six percent (6%).

            


    

    


    3.7 Payment
      in the Event of Incapacity or Minority.
      If the
      Bank, in its discretion, determines that any person entitled to receive any
      payment under this Plan is physically, mentally or legally incapable of
      receiving or acknowledging receipt of payment, and no legal representative
      has
      been appointed for such person, the Administrator in its discretion may (but
      shall not be required to) cause any sum otherwise payable to such person to
      be
      paid to one or more legal person(s) as may be chosen by the Administrator from
      among the following: the institution maintaining such person, such person’s
      spouse, children, parents or other relatives by blood or marriage, a custodian
      under any applicable Uniform Transfers to Minors Act or any other person
      determined by the Administrator to have incurred expense for such person. The
      Administrator’s payment, based upon its good faith determination of the
      incapacity of the person otherwise entitled to payments under this Plan and
      the
      existence of any other person specified above, shall be conclusive and binding
      on all persons. Any such payment shall be a complete discharge of the
      liabilities of the Company under this Plan to the extent of such
      payment.

    


    3.8 Specified
      Employee. Notwithstanding
      any other provision of this Article 3, in the event Executive is a Specified
      Employee, as defined in accordance with Section 409A of the Internal Revenue
      Code of 1986, as amended (the “Code”) and any regulations issued thereunder,
      payment of Executive’s Basic Benefit or Early Retirement Benefit, as applicable,
      shall not commence until six (6) months after Executive’s Separation from
      Service.


    
      
        
        

      

      
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    Article
      4

    Source
      of Benefits

    


    4.1 Employer
      Funds.
      This
      Plan is unfunded, and all benefits payable to Executive and his beneficiaries
      shall be payable solely from the general assets of the Bank. Executive shall
      not
      be required or permitted to make any contribution to the Plan.

    


    4.2 Trust
      Fund.
      The Bank
      may establish a trust from which part or all of the benefits under the Plan
      are
      to be paid. If a trust is established, all of the principal and income of such
      trust shall remain subject to the claims of the Bank’s creditors until applied
      to the payment of benefits.

    


    4.3 Executive’s
      Right to Funds.
      This
      Plan constitutes a mere promise by the Bank to make benefit payments in the
      future. Beneficial ownership of any assets, whether cash or investments, that
      the Bank may earmark or place in trust to pay Executive’s benefits under this
      Plan shall at all times remain in the Bank, and neither Executive nor his
      beneficiaries shall have any property interest in any specific assets of the
      Bank. To the extent Executive or any other person acquires a right to receive
      payments from the Bank under this Plan, such right shall be no greater than
      the
      right of any unsecured general creditor of the Bank.

    


    Article
      5

    Administration

    


    5.1 Administrator.
      The
      Board of Directors of the Bank shall be the Administrator of the Plan. The
      Board
      may delegate any of its administrative functions to another person, subject
      to
      the revocation of such delegation at any time.

    


    5.2 Discretion.
      The
      Administrator shall also have the discretionary power and authority, which
      it
      shall exercise in good faith, to determine whether Executive is entitled to
      a
      benefit under the Plan, the identity of Executive’s beneficiaries, and the
      amount and form of the benefit payable to Executive or his beneficiary. The
      Administrator shall have the discretion and authority to interpret the Plan
      and
      to make such rules and regulations as it deems necessary for the administration
      of the Plan and to carry out its purposes. The determinations of the
      Administrator shall be conclusive and binding on all persons. 

    


    5.3 Determination
      of Benefit.
      The
      Administrator’s good faith determination of the benefits to which Executive or
      his beneficiaries are entitled under this Plan shall be conclusive and binding
      on all persons; provided, however, that this provision shall not preclude the
      Administrator’s correcting any error the Administrator determines to have been
      made in the computation of any benefit. The Administrator shall be entitled
      to
      recover from any Participant or beneficiary, or from his estate, the amount of
      any overpayment of benefits and may reduce the amount of future benefits payable
      to any individual by the amount of any overpayment made with respect to
      Executive.

    


    5.4 Benefit
      Claim Procedure.
      Within a
      reasonable period of time following Executive’s termination of employment, the
      Administrator will inform Executive or his beneficiary of the amount of
      benefits, if any, payable from the Plan. Not later than 30 days
      after


    
      
        
        

      

      
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    receipt
      of such notification, Executive or his beneficiary may file with the
      Administrator a written claim objecting to the amount of benefits payable under
      the Plan. The Administrator, not later than 90 days after receipt of such claim,
      will render a written decision to the claimant on the claim. If the claim is
      denied, in whole or in part, such decision will include the reason or reasons
      for the denial, a reference to the Plan provision that is the basis for the
      denial, a description of additional material or information, if any, necessary
      for the claimant to perfect the claim, an explanation as to why such information
      or material is necessary and an explanation of the Plan’s claim procedure. The
      claimant may file with the Administrator, not later than 60 days after receiving
      the Administrator’s written decision, a written notice of request for review of
      the decision, and the claimant or the claimant’s representative may review Plan
      documents which relate to the claim and may submit written comments to the
      Administrator. Not later than 60 days after receipt of such review request,
      the
      Administrator will render a written decision on the claim, which decision will
      include the specific reasons for the decision, including a reference to the
      Plan’s specific provisions where appropriate. The foregoing 90- and 60-day
      periods during which the Administrator must respond to the claimant may be
      extended by up to an additional 90 or 60 days, respectively, if special
      circumstances beyond the Administrator’s control so require.

    


    5.5 Indemnification.
      The Bank
      shall indemnify the Administrator and each other person to whom administrative
      functions are delegated against any and all liabilities that may arise out
      of
      their administration of the Plan, except those that are imposed on account
      of
      such person’s willful misconduct.

    


    5.6 Limitation
      of Authority.
      No
      person performing any administrative functions with respect to the Plan shall
      exercise, or participate in the exercise of, any discretion with respect to
      his
      own benefit under the Plan. This provision shall not preclude such person from
      exercising discretionary authority with respect to the generally applicable
      provisions of the Plan, even though such person’s benefit may be affected by
      such exercise.

    


    Article
      6

    Miscellaneous

    


    6.1 Actuarial
      Equivalency.
      Except
      as otherwise provided for in Section 3.7C, whenever an actuarial equivalent
      must
      be determined under this Plan, it shall be determined using reasonable actuarial
      factors elected by the Administrator.

    


    6.2 Termination
      of Employment.
      Executive shall be deemed to have terminated employment for purposes of this
      Plan when he or she has ceased to provide service to the Bank as an
      employee.

    


    6.3 Effective
      Date.
      This
      Plan is restated effective as of December
      14, 2006.

    


    6.4 No
      Employment Rights.
      Nothing
      contained in this Plan shall be construed as conferring upon Executive the
      right
      to continue in the employ of the Bank.

    


    6.5 No
      Compensation Guarantees.
      Nothing
      contained in this Plan shall be construed as conferring upon Executive the
      right
      to receive any specific level of compensation;


    
      
        
        

      

      
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    nor
      shall
      the Bank be prevented in any way from modifying the manner or form in which
      Executive is to be compensated.

    


    6.6 Effect
      on Benefit Plans.
      Neither
      benefits accrued by Executive under this Plan nor amounts paid pursuant to
      the
      Plan following his termination of employment shall be deemed to be salary or
      other compensation to him for the purpose of computing benefits to which he
      or
      she may be entitled under any pension plan or other employee benefit plan or
      arrangement sponsored by the Bank, except to the extent such other plan
      expressly provides otherwise.

     

    6.7 Rights
      and Benefits Not Assignable.
      The
      rights and benefits of Executive and any other person or persons to whom
      payments may be made pursuant to this Plan are personal and, except for payments
      made to the representative of a person’s estate which may be assigned to the
      persons entitled to such estate, shall not be subject to any voluntary or
      involuntary anticipation, alienation, sale, assignment, pledge, transfer,
      encumbrance, attachment, garnishment by creditors of Executive or such person
      or
      other disposition.

    


    6.8 Amendment
      and Termination.

    


    
      	 	
              A.

            	
              The
                Board of Directors of the Bank may amend this Plan in such manner
                as it
                deems advisable, provided that no amendment shall reduce the accrued
                benefit of Executive, determined as of the date of the adoption of
                such
                amendment. 

            


    

    


    
      	 	
              B.

            	
              The
                Bank may terminate this Plan at any time. No person shall accrue
                any
                additional benefits under the Plan following the date of its termination.
                However, the termination of the Plan shall not affect Executive’s right to
                receive payment of his accrued benefit (determined as of the date
                of the
                Plan’s termination) upon termination of employment; provided Executive
                would have been entitled to a benefit upon termination of employment
                if
                the Plan had not been terminated.

            


    

    


    6.9 Governing
      Law.
      Except
      to the extent preempted by federal law, this Plan shall be construed in
      accordance with, and governed by, the laws of the Commonwealth of Massachusetts
      without regard to rules relating to choice of law.

    


    6.10 Entire
      Agreement.
      This
      Plan constitutes the entire understanding between the Bank and each Participant
      as to the subject matter hereof. No rights are granted to Executive by virtue
      of
      this Agreement other than those specifically set forth herein. 

    


    6.11 Section
      409A Compliance.
      Notwithstanding any other provision of the Plan or any administrative form
      related to the Plan, this Plan shall be interpreted in accordance with, and
      incorporate the terms and conditions required by, Section 409A of the Code,
      together with any Department of Treasury regulations and other guidance issued
      thereunder, including without limitation, any regulations or other guidance
      that
      may be issued after the date hereof. The Board 


    
      
        
        

      

      
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    of
      Directors, in its discretion, may adopt any amendments to the Plan or modify
      any
      related administrative form or adopt other policies and procedures (including
      amendments, policies and procedures with retroactive effect), or take any other
      actions the Board of Director determines to be necessary or appropriate to
      comply with the requirements of Section 409A of the Code.

    


    


    


     

     

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