Filed by Bowne Pure Compliance





Exhibit 10.6



[Letterhead of Berkshire Hills Bancorp, Inc.]




December 12, 2008




Michael P. Daly

President and Chief Executive Officer

c/o Berkshire Hills Bancorp, Inc.

24 North Street

Pittsfield, Massachusetts 01201




Dear Michael,




Berkshire Hills Bancorp, Inc. (the “Company”) anticipates entering into a Securities Purchase
Agreement (the “Participation Agreement”) with the United States Department of Treasury
(“Treasury”) that provides for the Company’s participation in the Treasury’s TARP Capital Purchase
Program (the “CPP”). If the Company does not participate or ceases at any time to participate in
the CPP, this letter shall be of no further force and effect.



For the Company to participate in the CPP and as a condition to the closing of the investment
contemplated by the Participation Agreement, the Company is required to establish specified
standards for incentive compensation to its senior executive officers and to make changes to its
compensation arrangements. To comply with these requirements, and in consideration of the benefits
that you will receive as a result of the Company’s participation in the CPP, you agree as follows:




	 	(1)	 	No Golden Parachute Payments. The Company is prohibiting any golden parachute payment
to you during any “CPP Covered Period.” A “CPP Covered Period” is any period during which
(A) you are a senior executive officer and (B) Treasury holds an equity or debt position
acquired from the Company in the CPP.
	 
	 	(2)	 	Recovery of Bonus and Incentive Compensation. Any bonus and incentive compensation paid
to you during a CPP Covered Period is subject to recovery or “clawback” by the Company if
the payments were based on materially inaccurate financial statements or any other
materially inaccurate performance metric criteria.
	 
	 	(3)	 	Compensation Program Amendments. Each of the Company’s compensation, bonus, incentive and other
benefit plans, arrangements and agreements (including golden parachute, severance and employment
agreements) either currently or hereinafter in effect and including all amendments thereto
(collectively, “Benefit Plans”) with respect to you is hereby amended to the extent necessary to
give effect to provisions (1) and (2).




 


 









 





Michael P. Daly

December 12, 2008

Page 2




In addition, the Company is required to review its Benefit Plans to ensure that they do not
encourage senior executive officers to take unnecessary and excessive risks that threaten the value
of the Company. To the extent any such review requires revisions to any Benefit Plan with respect
to you, you and the Company agree to negotiate such changes promptly and in good faith.




	 	(4)	 	Definitions and Interpretation. This letter shall be interpreted as follows:






	 	•	 	“Senior executive officer” means the Company’s “senior executive officers” as
defined in subsection 111(b)(3) of EESA.
	 
	 	•	 	“Golden parachute payment” is used with same meaning as in Section 111(b)(2)(C) of
EESA.
	 
	 	•	 	“EESA” means the Emergency Economic Stabilization Act of 2008 as implemented by
guidance or regulation issued by the Department of the Treasury and as published in the
Federal Register on October 20, 2008.
	 
	 	•	 	The term “Company” includes any entities treated as a single employer with the
Company under 31 C.F.R. § 30.1(b) (as in effect on the Closing Date). You are also
delivering a waiver pursuant to the Participation Agreement, and, as between the
Company and you, the term “employer” in that waiver will be deemed to mean the Company
as used in this letter.
	 
	 	•	 	The term “CPP Covered Period” shall be limited by, and interpreted in a manner
consistent with, 31 C.F.R. § 30.11 (as in effect on the Closing Date).
	 
	 	•	 	Provisions (1) and (2) of this letter are intended to, and will be interpreted,
administered and construed to, comply with Section 111 of EESA (and, to the maximum
extent consistent with the preceding, to permit operation of the Benefit Plans in
accordance with their terms before giving effect to this letter).






	 	(5)	 	Miscellaneous. To the extent not subject to federal law, this letter will be governed
by and construed in accordance with the laws of New York. This letter may be executed in
two or more counterparts, each of which will be deemed to be an original. A signature
transmitted by facsimile will be deemed an original signature.




 


 









 










Michael P. Daly

December 12, 2008

Page 3




The Board appreciates the concessions you are making and looks forward to your continued
leadership during these financially turbulent times.



	 	 	 	 	 
	 	
Yours sincerely, 



BERKSHIRE HILLS BANCORP, INC.

 	 
	 	By:  	/s/ Kevin P. Riley
 	 
	 	 	Name:  	Kevin P. Riley 	 
	 	 	Title:  	Executive Vice President, 
Chief Financial
Officer and Treasurer 	 



	 	 	 	 	 
	Intending to be legally bound, I agree with and
accept the foregoing terms on the date set forth
below.	 	 
	 
	 	 	 	 
	/s/ Michael P.Daly
	 	 	 	 
	 

Michael P. Daly

	 	 
	 	 
	Date: December 12, 2008