Exhibit 10.9


 


Provident
Bank


 


Long-Term
Incentive Plan


 


February
2005


 




    	 



    	 



    

 


2005 Amended and Restated Long-Term
Incentive Plan


 



 


Objective


Provident Bank is committed to rewarding and retaining senior managers
who make substantial contributions to the long-term success and growth in the Bank. The Bank’s original long-term incentive
plan (“Plan”) was developed in 1999, with initial phantom share grants awarded in 2000. Based on significant growth
of the Bank since 2000, the Plan has been modified to include additional participants and to align more closely with competitive
market practice. The original intent of the plan has stayed the same. The objectives of Provident Bank’s Long-Term Incentive
Plan are to:


 


		·	Align key executives with the Bank’s long-term goals and objectives.




 


		·	Encourage focus and collaboration needed to ensure the Bank continues
to grow and enhance its earnings.



 


		·	Provide competitive total compensation opportunities aligned with the
Banks’ success.



 


		·	Enable the Bank to attract and retain talented senior management.



 


The Plan is based on the concept of stock options
used by public banks, but since Provident Bank is a mutual, phantom shares are used and valued according to the Bank’s ability
to grow earnings and capital.


 


Eligibility


Select key senior managers. The Plan is intended to include those
who have the most influence on the long-term earnings of the Bank. In general, participants must be hired by January 1 of the plan
year to be included in that years’ grants. However, newly eligible participants may be eligible to receive an initial award
at the time of their hire date.


 


Performance Period


The Plan operates on a calendar year schedule (January 1 –
December 31). Grant awards will be considered annually, although actual grants will vary based on the achievement of pre-defined
performance goals and objectives.


 


Long-Term Incentive Award Ranges


Each participant will have a specified target incentive grant award
based on his or her role at the Bank. Target incentives are based on competitive practices and reflect the amount of long-term
incentive to be paid for meeting defined goals.


 


Plan grants will be allocated based on a combination of Bank and
individual performance. Each participant will have specific performance measures (e.g. Bank performance, department performance,
individual production goals) that will have a defined goals. At the end of each year, the participant will be reviewed relative
to his/her goals and an overall performance assessment made to determine Plan award.


 


Attachment (A) Shows award grant ranges.


 




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Plan Gate


In order for the Plan to pay out any
awards in a given year, Provident Bank must achieve a threshold level of earnings. Threshold earnings are defined
as pretax earnings, net of extraordinary items and securities gains, at 90% of Budgeted pretax earnings. Once we achieve this threshold
level of performance, all participants are eligible for an award based on their specific performance goals. 


 


Phantom Share Grant Award


There are three key steps in determining Plan awards each year.


 


		1.	Determine whether Plan exceeded the gate level of earnings. If the earnings exceeded threshold earnings, the Plan is activated.
If earnings did not achieve this gate, there are no awards granted for any participant in that year.



		2.	Review executive performance against the specific goals set at the start of the year to determine the relative award (i.e.
threshold, target, stretch). Award grants will be assessed based on achievements relative to the threshold, target and stretch
performance goals. Interpolation between the measures will be calculated to encourage and reward incremental performance improvement.
This will determine the participant’s value of the award as a percentage of salary.



		3.	The value of the executive’s award (as percent of base salary) will then be converted to a number of phantom shares based
on the present value1 of the share. These shares will vest fully after five years at which time the value to the participant
will grow in line with increases in Bank’s earnings over that five-year period.



 


Phantom Share Value 


The phantom shares operate in a manner similar to stock options.
However, because Provident Bank does not have real shares of stock, we use a bookkeeping process to determine the value of an underlying
“phantom share”. The total number of shares for the Plan was determined based on the Bank’s tier 1 capital in
1999. At the inception of the Plan, the bank had a total of 1,957,745 Share Units with a calculated Share Unit Value (SUV) of $10.00.


 


The SUV going forward is determined by dividing the Bank’s
tier 1 capital as of December 31 of each Plan year by the total number of Share Units – 1,957,745 that were created at the
time of the initiation of the plan. The SUV is adjusted for extraordinary items and securities gains, net of tax. In addition,
the Board of Directors may, at its discretion, recognize outstanding achievement by the Bank in a given year by adding an amount
up to 10% to that year’s SUV.


 


In summary, participants receive the appreciation in the SUV of
the phantom stock share that occurs between the time of the share grant and the time of its redemption.


 


 



		1	Because a phantom share operates similar to a stock option, we use a valuation process that is similar as well. Because stock
options and phantom shares have no value until the vesting period is served, we determine the future value of a stock grant, given
certain expectations of growth and then determine an equivalent cash value today to determine appropriate awards.



 




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For example


 


		·	Tier 1 capital at the time of grant is divided by the total number
of shares allocated to the Plan (1,957,745) to determine the original SUV.



		·	An executive is granted shares with current value based on the original
SUV and a five-year cliff vest (i.e. the executive receives the value of the award after five years).



		·	Earnings during the vesting period increase the bank’s tier
1 capital.



		·	Tier 1 capital (adjusted for any extraordinary items and/or securities
gains) at the time of vesting is divided by the total number of shares allocated to the Plan (1,957,745) to determine the present
SUV.



		·	The difference between the present SUV and the original SUV is then
multiplied by the number of shares granted to determine a cash award. 



 


The plan design supports its objective to align participants with
the long-term earnings of the Bank while providing a powerful retention feature. For new employees, the Plan will provide it’s
first payment after five years’ service. After five years, assuming annual grants are awarded, participants will receive
payouts based on the growth of the shares granted five years prior.


 


Share Allocation


The Plan is funded with 500,000 shares for employees and 121,000
shares for Directors, which are available for distribution while the Plan remains in force. Grant awards reduce available shares,
while redeemed vested shares increase available shares.


 


Vesting


Each phantom stock grant will have a five year cliff vesting provision
that requires the participant to wait five years before the value of the grant is awarded.


 


All grants are considered fully vested upon retirement at age 62
or later, death, or termination as a result of full disability of the participant.


 


If the participant leaves the Bank prior to satisfying the vesting
requirement, his/her grant will be forfeited.


 


Plan participants terminated for cause will forfeit all rights to
their unvested grants.


 




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Terms and Conditions


 





 



 


Effective Date


This Plan is effective January 1, 2005 to reflect plan year January
1, 2005 to December 31, 2005. The Plan will be reviewed annually by the Bank’s Board and Executive Management to ensure proper
alignment with the Bank’s business objectives. Provident Bank retains the rights as described below to amend, modify or discontinue
the Plan at any time during the specified period.


 


Program Administration


The Plan is authorized and administered by the Board of Directors,
with recommendations from the Compensation Committee. The Chief Executive Officer and/or the Board of Directors have the sole authority
to interpret the Plan and to make or nullify any rules and procedures, as necessary, for proper administration. Any determination
by the Chief Executive Officer and/or Board of Directors will be final and binding on all participants.


 


Program Changes or Discontinuance


Provident Bank has developed the Plan on the basis of existing business,
market and economic conditions; current services; and staff assignments. If substantial changes occur that affect these conditions,
services, assignments, or forecasts, Provident Bank may add to, amend, modify or discontinue any of the terms or conditions of
the Plan at any time.


 


The Board of Directors may, at its sole discretion, waive, change
or amend any portion of the Plan, as it deems appropriate.


 


Long-Term Incentive Award Payments


Phantom share grants will be awarded as soon after the year-end
as possible. Once vested, the shares will be paid in cash, based on the value determined. Payouts will be made within the first
two and a half months following year-end. Phantom share payments are considered taxable income to participants in the year paid
and will be subject to withholding for required income and other applicable taxes.


 


Any rights accruing to a participant or his/her beneficiary under
the Plan shall be solely those of an unsecured general creditor of Provident Bank. Nothing contained in the Plan, and no action
taken pursuant to the provisions hereof, will create or be construed to create a trust of any kind, or a pledge, or a fiduciary
relationship between Provident Bank or the participant or any other person. Nothing herein will be construed to require Provident
Bank to maintain any fund or to segregate any amount for a participant’s benefit.


 


Program Funding


The Plan is funded and accrued based on Bank performance results.


 


Reduced Work Schedules, Promotions, and Transfers


If a participant changes his/her role during the Plan year, and
it is deemed that new phantom share grant targets are appropriate, he/she will be eligible for the new target awards on a pro rata
basis (i.e. the award will be prorated based on the number of months employed in the respective positions.)


 


In the event of an approved leave of absence, the award opportunity
level for the year will be adjusted to reflect the time in active status.


 




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Ethics and Interpretation


If there is any ambiguity as to the meaning of any terms or provisions
of this plan or any questions as to the correct interpretation of any information contained therein, the Bank’s interpretation
expressed by the CEO and/or Board of Directors will be final and binding.


 


The altering, inflating, and/or inappropriate manipulation of performance/financial
results or any other infraction of recognized ethical business standards, will subject the employee to disciplinary action up to
and including termination of employment. In addition, any incentive compensation as provided by this plan to which the employee
would otherwise be entitled will be revoked.


 


Participants who have willfully engaged in any activity, injurious
to the Bank, will upon termination of employment, death, or retirement, forfeit any incentive award earned during the award period
in which the termination occurred.


 


Miscellaneous


The Plan will not be deemed to give any participant the right to
be retained in the employ of Provident Bank, nor will the Plan interfere with the right of Provident Bank to discharge any participant
at any time.


 


In the absence of an authorized, written employment contract, the
relationship between employees and Provident Bank is one of at-will employment. The Plan does not alter the relationship.


 


This incentive plan and the transactions and payments hereunder
shall, in all respect, be governed by, and construed and enforced in accordance with the laws of the state of Massachusetts.


 


Each provision in this Plan is severable, and if any provision is
held to be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions shall not,
in any way, be affected or impaired thereby. 


 


This plan is proprietary and confidential to Provident Bank and
its employees and should not be shared outside the organization.


 




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Attachment (A)


 


Long-Term Incentive Award Ranges – Tier 1


 


	 	 	Annual LTI Grant	 
	 	 	%
    of Base Salary	 
	 	 	Threshold	 	 	Target	 	 	Stretch	 
	President/CFO	 	 	10	%	 	 	20	%	 	 	30	%



 


		o	Threshold = 90% of Budgeted Pretax Earnings



 


		o	Target = Budgeted Pretax Earnings



 


		o	Stretch = 115% of Budgeted Pretax Earnings



 


Long-Term Incentive Award Ranges – Tier 2


 


	 	 	Annual LTI Grant	 
	 	 	%
    of Base Salary	 
	 	 	Threshold	 	 	Target	 	 	Stretch	 
	EVP Senior Lender	 	 	5	%	 	 	15	%	 	 	25	%



 


50% of the Award Based on the Following:


 


		o	Threshold = Net Total Loan Goal Misses Budget by no more than 10%



 


		o	Target = Net Total Loan Goal Meets Budget



 


		o	Stretch = Net Total Loan Goal Exceeds Budget by 20%



 


Strong Consideration to be given to Volume, Mix, Credit
Quality and Yield


 


50% of the Award Based on Bank Performance as Follows:


 


		o	Threshold = 90% of Budgeted Pretax Earnings



 


		o	Target = Budgeted Pretax Earnings



 


		o	Stretch = 115% of Budgeted Pretax Earnings



 




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Attachment (A)


 


Long-Term Incentive Award Ranges – Tier 2 (Continued)


 


	 	 	Annual LTI Grant	 
	 	 	%
    of Base Salary	 
	 	 	Threshold	 	 	Target	 	 	Stretch	 
	SVP Retail Banking	 	 	5	%	 	 	15	%	 	 	25	%



 


50% of the Award Based on the Following:


 


		o	Threshold = Net Deposit Goal Misses Budget by no more than 10%



 


		o	Target = Net Deposit Goal Meets Budget



 


		o	Stretch = Net Deposit Goal Exceeds Budget by 20%



 


Strong Consideration to be given to Mix and Yield


 


50% of the Award Based on Bank Performance as Follows:


 


		o	Threshold = 90% of Budgeted Pretax Earnings



 


		o	Target = Budgeted Pretax Earnings



 


		o	Stretch = 115% of Budgeted Pretax Earnings



 




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Attachment (A)


 


Long-Term Incentive Award Ranges – Tier 3


 


	 	 	Annual LTI Grant	 
	 	 	%
    of Base Salary	 
	 	 	Target	 	 	Stretch	 
	SVP Senior Credit Officer	 	 	10	%	 	 	20	%



 


50% of the Award Based on the Following:


 


		o	Target = Net Total Loan Goal Meets Budget



 


		o	Stretch = Net Total Loan Goal Exceeds Budget by 20%



 


Strong Consideration to be given to Volume, Mix, Credit
Quality and Credit Administration


 


50% of the Award Based on Bank Performance as Follows:


 


		o	Target = Budgeted Pretax Earnings



 


		o	Stretch = 115% of Budgeted Pretax Earnings



 


	 	 	Annual LTI Grant	 
	 	 	%
    of Base Salary	 
	 	 	Threshold	 	 	Target	 	 	Stretch	 
	SVP Commercial Lending, VP Commercial
    Lenders	 	 	0	%	 	 	10	%	 	 	20	%



 


		o	Threshold = N/A



 


		o	Target = Loan Goals Achieved (Volume, Mix, Credit Quality and Rate)



 


		o	Stretch = Loan Goals Exceeded by 25%



 




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