BLHB EX-10.7 12/31/08





Exhibit 10.7




AMENDED AND RESTATED

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; or (iii) is based on a determination by the
Social Security Administration that Executive is totally disabled.




“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” shall mean the Executive has experienced a termination of employment
with the Bank and its affiliates due to death, Disability, retirement or other 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 doe not
exceed a period of six months or, if longer, such longer period of time as is protected by either
statute or contract. For purposes of this Plan, Executive will be presumed to have a Separation
from Service where the level of services performed by the Executive is less than 50 percent of the
average level of services performed during the immediately preceding 36-month period. For all
purposes hereunder, whether the Executive has had a Separation from Service will be determined in
accordance with Treasury Regulation Section 1.409A-1(h) and subsequent guidance.



“Specified Employee” shall have the meaning required under Treasury Regulation Section
1.409A-1(b)(i).


 


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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 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.


 


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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
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) and such Change in Control also satisfies the requirements for a Change in
Control within the meaning of Treasury Regulation Section 1.409A-3(i)(5), 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. If Executive’s Separation from Service occurs within
two (2) years of the Change in Control, such benefit shall be paid in a single lump sum within ten
(10) days following Separation from Service, provided however, that if Executive is considered a
Specified Employee at the time such payment is due, the lump sum benefit shall be delayed and shall
be paid on the first day of the seventh (7th) month following such Separation from
Service. If Executive’s Separation from Service occurs more than 2 years following the occurrence
of a Change in Control, or if it occurs within 2 years of a Change in Control but the Change in
Control does not also satisfy the requirements of Treasury Regulation Section 1.409A-3(i)(5),
Executive’s benefit shall be paid in accordance with Executive’s election under Section 3.5. To
the extent necessary to avoid a penalty under Section 409A of the Code, all or a portion of
Executive’s benefit shall be delayed and paid on the first day of the seventh month following
Executive’s Separation from Service.


 


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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 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. The election form
contemplated by this Section 3.5-A must be completed by Executive no later than
December 31, 2008. If Executive has made an election prior to December 31,
2008 and wishes to change such election, Executive can change such election
prior to December 31, 2008, without complying with the additional requirements
of Section 3.5-B hereof, so long as Executive’s election does not: (i) cause a
payment to be made to Executive in 2008 which otherwise would have been made in
a later year, or (ii) delay a payment that would otherwise be made to Executive
in 2008 and cause such payment to be made in a later year.







	 	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, provided that the election complies with this Section 3.5-B. Such
election shall (i) not take effect until at least 12 months after the date on
which the election is made, (ii) in the case of an election related to a
payment made for reasons other than due or death or Disability, the election
must defer the payment date by at least five (5) years beyond the previously
scheduled commencement date (or in the case of a life annuity or installment
payments treated as a single payment, five (5) years from the date the first
amount was scheduled to be paid), and (iii) with respect to an election related
to a payment at a specified time or pursuant to a fixed schedule (as described
in Treasury Regulation Section 1.409A-3(a)(4)), the election must be made not
less than 12 months before the date the payment is scheduled to be paid (or in
the case of a life annuity or installment payments treated as a single payment,
five (5) years from the date the first amount was scheduled to be paid). No
changes in the form of benefit payment shall be permitted following his
termination of employment.





 


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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.



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.


 


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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 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.


 


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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 January 1, 2008.



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; 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.


 


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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
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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