Short-Term Incentive Plan (effective January 1, 2019)

Ex: 10.20

Annual Executive Short-Term Incentive Plan

Plan Summary

2019

Introduction and Objective

Cambridge Trust’s Annual Incentive Plan is designed to recognize and reward management for their collective contributions to the Bank’s success. The Plan focuses on financial measures that are critical to the Bank’s growth and profitability. Individually and collectively, we all have the ability to influence and drive our success. When Cambridge Trust succeeds, our employees will succeed. This document summarizes the elements and features of the Plan.

In short, the objectives of the Incentive Plan are to:

Eligibility

Performance Period

The performance period and plan operates on a calendar year basis (January 1 – December 31). Actual payout awards are made in cash following year-end after Cambridge Bancorp’s financial results and performance are known.

Incentive Payout Opportunity

Each participant will have a target incentive opportunity based on his/her role. The target incentive will reflect a percentage of base salary and be determined consistent with competitive market practices. Actual awards will vary based on achievement of specific goals. The opportunity reflects a range of potential awards. Actual awards may range from 0% of target (for not achieving threshold performance) to 150% of target (for stretch performance).

The table on Exhibit A summarizes the incentive ranges for the 2019 Plan year.

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Incentive Plan Measures

Each participant will have defined performance goals that will determine his/her annual incentive award. There are two performance categories: Bank and Individual. The table on Exhibit A provides guidelines for the allocation of participant’s incentives for each performance component. The specific allocation of goals will be weighted to reflect the focus and contribution for each role/level in the Bank. Weightings for each performance goal will be determined for each participant at the beginning of each plan year.

Plan Trigger: In order for the Annual Incentive Plan to ‘activate’, Cambridge Trust must achieve at least 50% of its targeted operating income before securities gains and losses. If the Bank does not meet this level, the plan will only pay awards at the Committee’s discretion.

Bank Performance

The Bank performance goals for 2019 are Return on Equity (After-Tax) and Pre-tax Operating Income. The ROE (after-tax) performance will be compared to budget but will only pay out if the Bank’s ROE is at the 75^th percentile or higher vs. peers. The peer index is defined as Commercial Banks with assets $500M - $5B, located in the Northeast (CT, MA, ME, NH, NJ, NY, PA, RI and VT) and traded on NYSE, NASDAQ, and OTCBB. The operating income goal will be tied to Cambridge Trust’s fiscal year budget and reflects operating income prior to security gains/losses and taxes and other extraordinary items.

The table below shows the specific performance goal at threshold, target and stretch for 2019. A minimum achievement of threshold level performance is required for the plan to pay for each component.

Individual Performance

In addition to the Bank performance, participants will have individual goals (up to 5 key objectives) that will focus on either department/team performance (e.g. lending growth, deposit growth) and/or individual performance. The mix of these goals will vary by role. Where possible, performance targets and ranges for each measure will be set at the beginning of the plan year. If performance-to- goal cannot be quantified, Committee discretion will be used to evaluate goal attainment as follows:

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Discretion within performance zones will allow for the quality of the result and the impact of external circumstances on performance. For example, if the CEO made great progress toward goal attainment under difficult circumstances, he might receive an award of 85%, even though the goal was not reached. The same CEO progress toward goal attainment reached under favorable circumstances might only result in a 30% award.

Payouts

Payouts will be made in cash as soon as possible after the closing of Bank financials each year but typically during the month of February. Awards are calculated based on actual performance relative to target. For Bank goals, achieving threshold performance will pay out at 50% of target incentive, target performance will pay out 100% of target, and stretch performance will pay out at 150% of target incentive. Performance below threshold will result in a 0% payout.

Actual payouts for each performance goal will be interpolated between threshold. target and stretch levels to reward incremental improvement. Payouts are assessed by component such that one goal may achieve stretch and another may achieve only threshold for individual goals, the range of payout will be 0%- 150% in accordance with the payout grid above.

Illustration

The table below is an illustration of a simple plan design for a SVP (Tier 4) with a base salary of $150,000 and an incentive target of 35% of base salary ($52,500). Goals and weightings are for illustration purposes only. This example assumes that Cambridge Trust’s Peer Index ROE performance was at or higher than the 75th percentile and that the Operating Income met the budgeted target.

This participant’s payout of $49,218 is 90% of target. The payout reflects Cambridge Trust’s ROE performance at “threshold”, Operating Income at target and one Individual goal at stretch and another that was not achieved.

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Terms and Conditions

Effective Date

This Program is effective January 1, 2019 to reflect plan year January 1, 2019 to December 31, 2019. The Plan is reviewed and approved annually by the Bank’s Compensation Committee to ensure proper alignment with the Bank’s business objectives. Cambridge Trust retains the rights as described below to amend, modify or discontinue the Plan at any time during the specified period. The Incentive Plan will remain in effect until December 31, 2019.

Program Administration

The Plan is authorized by the Compensation Committee, which reports to the Board of Directors. The Compensation Committee has 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 Committee will be final and binding on all participants.

Program Changes or Discontinuance

Cambridge Trust has developed the plan based on existing business, market and economic conditions. If substantial changes occur that affect these conditions, Cambridge Trust may add to, amend, modify or discontinue any of the terms or conditions of the plan at any time.

The Compensation Committee and Board of Directors also have the ability to adjust/modify or cancel plan payouts to reflect results from regulatory and/or safety and soundness exams.

The Compensation Committee may, at its sole discretion, waive, change or amend the Plan, as it deems appropriate.

Incentive Award Payments

Awards will be paid as a cash bonus before the end of the first quarter following the Plan year. Awards will be paid out as a percentage of a participant’s base salary earned during the year as of December 31 for a given calendar year. Incentive awards will be 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 Cambridge Trust. 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 Cambridge Trust or the CEO and the participant or any other person. Nothing herein will be construed to require Cambridge Trust or the CEO to maintain any fund or to segregate any amount for a participant’s benefit.

New Hires, Promotions, and Transfers

New participants will receive a pro rata incentive award based on their month of hire during their initial Plan year.

A participant whose work schedule changes during the Plan year will be eligible for prorated treatment that reflects his/her time in the different schedules.

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If a participant changes his/her role or is promoted during the Plan year, he/she will be eligible for the new role’s target incentive award on a pro rata basis (i.e. the award will be prorated based on the number of months employed in the respective positions.)

Termination of Employment

If a Plan participant is terminated by the Bank for any other reason than retirement, death or disability prior to award payouts, no incentive award will be paid. To encourage employees to remain in the employment of Cambridge Trust, a participant must be an active employee of the Bank at the time of the award. (See exceptions for death and disability.)

Retirement, Disability and Death

Individuals who will be retiring must be an active employee as of December 31 of the plan year in order to receive a payout. If an employee retires prior to this date, the individual will not receive an award. For the purposes of this plan, retirement is defined as age 65; consistent with guidelines established in Cambridge Trust’s existing retirement plan(s).

If a participant is disabled by an accident or illness, and is disabled long enough to be placed on long- term disability, his/her bonus award for the Plan period shall be prorated so that no award will be earned during the period of long-term disability.

In the event of death, Cambridge Trust will pay to the participant’s estate the pro rata portion of the award that had been earned by the participant.

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 Compensation Committee 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 the 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.

Clawback

In the event that Cambridge Trust is required to prepare an accounting restatement due to a significant error, omission or fraud (as determined by the members of the Compensation Committee or the Board of Directors), each executive officer who is considered a member of “Senior Management” shall reimburse the Bank for part or the entire incentive award made to such executive officer on the basis of having met or exceeded specific targets for performance periods. For purposes of this policy, (i) the term “incentive awards” means awards under the Bank’s Annual Incentive Plan (AIP), the amount of which is determined in whole or in part upon specific performance targets relating to the financial results of the Bank; and (ii) the term “Senior Management” means employees in SVP roles and above who are eligible to participate in the Bank’s Annual Incentive Plan (AIP). The Bank may seek to reclaim incentives within a three-year period of the incentive payout, even if the participant has terminated employment.

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Miscellaneous

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

In the absence of an authorized, written employment contract, the relationship between employees and Cambridge Trust 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.

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