Employment Agreement with Joseph Mancini

1. Employment.  The Executive shall serve the Bank as a Chief Operating Officer.  In his capacity as Chief Operating Officer, the Executive shall have the duties, responsibilities and authorities determined and designated from time to time by the Chief Executive Officer of the Bank, including without limitation, planning, organizing, and controlling all the day-to-day operational activities of the Bank. Notwithstanding the foregoing, the Executive shall not be required to perform any duties and responsibilities that would result in a noncompliance with or a violation of any applicable law or regulation.

2. Effective Date and Term.  

3. Compensation and Benefits.  The compensation and benefits payable to the Executive under this Agreement shall be as follows:

3.1 Salary.  For all services rendered by the Executive to the Bank and its affiliates, the Executive shall be entitled to receive a base salary at an annual rate not less than $215,000 subject to increase from time to time in accordance with the usual practices of the Bank with respect to review of compensation of its officers.  The Executive’s salary shall be payable in periodic installments in accordance with the Bank’s usual practice for its senior executives.

3.2 Regular Benefits.  The Executive shall also be entitled to participate in any and all employee benefit plans, medical insurance plans, disability income plans, retirement plans, and other benefit plans of a general nature from time to time in effect for officers of the Bank, as well as any bonus incentive plan or program for which he is designated a participant by the Bank.  Participation in these arrangements shall be subject to (a) the terms of the applicable plan documents, (b) generally applicable policies of the Bank and (c) the discretion of the Board of Directors or any administrative or other committee provided for in or contemplated by the plans.

3.3 Business Expenses.  The Bank shall reimburse the Executive for all reasonable travel and other business expenses incurred by him in the performance of his duties and responsibilities, subject to the reasonable requirements with respect to substantiation and documentation as may be specified by the Bank.  Reimbursements of expenses and in-kind benefits subject to this Section 3.3 or otherwise provided to the Executive shall be subject to the following rules: (i) the amount of the expenses eligible for reimbursement or in-kind benefits provided in any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits provided in any other taxable year, except as otherwise allowed by Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”); (ii) any reimbursement shall be made as soon as practicable and no later than the last day of the calendar year following the calendar year in which the expenses to be reimbursed were incurred; and (iii) no right to reimbursement or in-kind benefits may be liquidated or exchanged for another benefit.

3.4 Vacation.  The Executive shall be entitled to not less than four (4) weeks of vacation per calendar year.  Any unused vacation may be carried over to the next following calendar year in accordance with the policies established by the Bank.  All vacations shall be taken at the times and intervals determined by the Executive with the approval of the Chief Executive Officer of the Bank, which approval shall not be unreasonably withheld.

3.5 General.  Nothing paid to the Executive under any plan, policy or arrangement currently in effect or made available in the future shall be deemed to be in lieu of other compensation to the Executive as described in this Agreement. 

3.6 Timing of Certain Payments.  Except as provided for in Section 3.3 of this Agreement, to the extent that this Section 3 provides for the deferral of compensation subject to Section 409A of the Code, the compensation shall be paid or provided not later than two and one-half months after the calendar year in which the compensation is no longer subject to a substantial risk of forfeiture, within the meaning of Treasury Regulations Section 1.409A-1(d).

4. Extent of Service.  During the term of this Agreement, except for periods of absence occasioned by illness, reasonable vacation periods, and reasonable leaves of absence, the Executive will devote all of his business time, attention, skill and efforts to the faithful performance of his duties under this Agreement.  The Executive shall not engage in any other business activity, except as may be approved by the Chief Executive Officer or the Board of Directors; provided, however, that so long as his activities do not materially interfere with the faithful performance of his duties hereunder, adversely affect the reputation of the Bank or any affiliate of the Bank, or present any conflict of interest, nothing herein shall be construed as preventing the Executive from:

(a) investing his assets in the form or manner as shall not require any material services on his part in the operations or affairs of the companies or the other entities in which the investments are made; or

(b) serving on the board of trustees or directors of any company not in competition with the Bank or any affiliate and not having any business relationship with the Bank or any affiliate of the Bank (other than as a customer of the Bank), provided that the Executive shall not render any material services with respect to the operations or affairs of any such company; or

(c) engaging in religious, charitable or other community or non-profit activities which do not impair his ability to fulfill his duties and responsibilities under this Agreement.  

5. Termination Upon Death.  In the event of the Executive’s death during the term of this Agreement, the Executive’s employment (and the term of this Agreement) shall terminate on the date of his death.  The Bank shall pay to the Executive’s beneficiary, designated in writing to the Bank prior to his death (or to his estate, if he fails to make a designation), (i) any base salary or other compensation earned through the date of death, plus (ii) the base salary that the Executive would have earned for a period of six months following his death, plus (iii) any other compensation and benefits as may be provided in accordance with the terms and provisions of any applicable plans and programs of the Bank. 

6. Termination for Cause 

6.1 Cause.  The Bank may terminate the Executive’s employment for Cause (a “Termination for Cause”) at any time after notice to the Executive setting forth in reasonable detail the nature of the Cause and after an opportunity for the Executive, together with his counsel, to be heard before the Board of Directors.  The following, as determined by the Board of Directors in its reasonable judgment, shall constitute Cause for termination of employment: (i) the Executive’s deliberate dishonesty with respect to the Bank or any subsidiary or affiliate thereof; or (ii) conviction of a crime related to banking activity or moral turpitude; or (iii) gross and willful failure to perform (other than on account of a medically determinable disability which renders the Executive incapable of performing such services) a substantial portion of the Executive’s duties and responsibilities as an officer of the Bank, which failure continues for more than thirty (30) days after written notice given to the Executive pursuant to a majority vote of all of the members of the Board of Directors then in office, such vote to set forth in reasonable detail the nature of such failure; or (iv) the willful engaging by the Executive in illegal or gross misconduct which is materially and demonstrably injurious to the Bank or the Company.  For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was

6.2 Termination of Obligations.  In the event of a Termination for Cause pursuant to this Section 6, the term of this Agreement shall terminate and the Bank shall pay to the Executive an amount equal to the sum of (a) the base salary or other compensation earned through the date of termination, plus (b) any other compensation and benefits as may be provided in accordance with the terms and provisions of any applicable plans and programs of the Bank.  All other obligations of the Bank under this Agreement shall terminate as of the date of termination. 

7. Termination by the Executive. 

7.1 Termination by the Executive for Good Reason.  The Executive shall be entitled to terminate his employment hereunder for Good Reason (as defined in Section 7.4 of this Agreement) upon at least thirty (30) days prior written notice given to the Board of Directors within a reasonable period of time (not to exceed ninety (90) days) after the event giving rise to the right to elect terminate employment for Good Reason and, provided, the Bank shall have thirty (30) days to cure the condition giving rise to the right of the Executive to terminate employment (although the Bank may elect to waive the thirty (30) day period) for Good Reason. Upon a termination for Good Reason, the Executive shall be entitled to receive the benefits set forth in Section 9 of this Agreement.

7.2 Other Voluntary Termination by the Executive.  During the term of this Agreement, the Executive may effect, upon sixty (60) days prior written notice to the Bank, a Voluntary Termination of his employment hereunder.  A “Voluntary Termination” shall mean a termination of employment by the Executive on his own initiative other than (a) a termination due to death or Disability, or (b) a termination for Good Reason.  If, during the term of this Agreement, the Executive terminates employment due to a Voluntary Termination, the term of this Agreement shall end and the Bank shall pay to the Executive an amount equal to the sum of (x) the base salary or other compensation earned through the date of termination, plus (y) any other compensation and benefits as may be provided in accordance with the terms and provisions of any applicable plans and programs of the Bank.

7.3 Termination Due to Retirement.  “Retirement” means the termination of the Executive’s employment with the Bank for any reason by the Executive at any time after the Executive attains age 65.  The Executive may terminate the Executive’s employment hereunder due to Retirement upon sixty (60) days prior written notice to the Bank.  If, during the term of this Agreement, the Executive terminates employment due to Retirement,  the term of this Agreement shall thereupon end and the Bank shall pay to the Executive an amount equal to the sum of (x) the base salary or other compensation earned through the date of termination, plus (y) any other compensation and benefits as may be provided in accordance with the terms and provisions of any applicable plans and programs of the Bank.

7.4 Good Reason.  For purposes of this Agreement, the term “Good Reason” shall mean any of the following:

(a) the failure of the Board of Directors to elect the Executive as a Chief Operating Officer of the Bank, or to continue employ the Executive as a Chief Operating Officer of the Bank or a material reduction in the Executive’s authority, duties or responsibilities from the position and attributes associated with his position as Chief Operating Officer;

(b) a breach of Section 3.1 of this Agreement;

(c) a material breach by the Bank of any other provision of this Agreement which failure or breach shall have continued for thirty (30) days after written notice from the Executive to the Bank specifying the nature of the failure or breach.

(d) a change in the Executive’s principal place of employment to a place that increases the Executive’s commute from the Executive’s principal residence by more than thirty (30) miles;

(e) the failure by the Bank to continue to provide the Executive with benefits substantially similar to those available to the Executive under any of the life insurance, medical, health and accident, or disability plans or any other material benefit plans in which the Executive was participating at the time of the Change in Control, or the taking of any action by either the Bank or any successor which would directly or indirectly materially reduce any of such benefits, or the

(f) the failure of the Bank to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement.  

7.5 Change in Control.  For purposes of this Agreement, Change in Control shall mean a change in control of the Bank or the Company, as defined in Section 409A of the Code, and the regulations promulgated thereunder, including the following:

8. Termination by the Bank without Cause.  The Executive’s employment with the Bank may be terminated without Cause by the Chief Executive Officer or the Board of Directors at any time upon notice to the Executive, provided, however, that the Bank shall have the obligation upon any such termination to make the payments to the Executive provided for under Section 9 of this Agreement.  

9. Certain Termination Benefits.  In the event of termination pursuant to Sections 7.1 or 8 of this Agreement, and provided that the Executive has not yet attained the age of 65 at the time of such termination, the Executive shall be entitled to each of the following benefits:

9.1 Earnings to Date of Termination.  An amount equal to the sum of (i) the base salary or other compensation earned through the date of termination, plus (ii) the Executive’s pro rata share (based on the portion of the then-current calendar year during which the Executive was employed before termination of his employment) of his Average Bonus (as hereinafter defined), plus (c) any other compensation and benefits as may be provided in accordance with the terms and provisions of any applicable plans and programs of the Bank.  For purposes of this Agreement, the term “Average Bonus” shall mean the average of the aggregate annual amounts paid to the Executive (or accrued) as bonuses or other cash incentive compensation for each of the three calendar years (or, if less, the number of calendar years which the Executive has been employed by the Bank) immediately preceding the termination of employment.  

9.2 Payment of Remaining Salary Obligation.  If the termination of employment occurs other than at or following a Change in Control, a severance benefit equal to the Executive’s annual base salary that would have been paid through the Expiration Date.  If the Executive’s termination of employment occurs in connection with or following a Change in Control, the severance benefit shall equal one times the Executive’s current annual base salary. This payment shall be made in twelve equal monthly installments beginning as of the date of termination of employment, provided further that in the event of termination of employment within one (1) year following a Change in Control, this payment shall be made in a lump sum at the time of the termination.

9.3 Benefit Continuation.  For the period subsequent to the date of termination until the Expiration Date, the Bank will continue to provide the Executive and his dependents with non-taxable medical and dental insurance coverage substantially comparable to the coverage maintained by the Bank for the Executive and his dependents immediately prior to his date of termination at no cost to the Executive.  If the Bank cannot provide one or more of the benefits set forth in this provision because the Executive is no longer an employee, applicable rules and regulations prohibit the benefits or the payment of the benefits in the manner contemplated, or it would subject the Bank to penalties, then the Bank shall pay the Executive a cash lump sum payment reasonably estimated to be equal to the value of the premiums for the benefits or the value of the remaining premiums at the time of such determination (based on the premium of the applicable coverage under the plan(s) sponsored by the Bank at the time the Executive’s

9.4 No Benefits Paid Under this Section upon Termination at or after age 65.  The Executive shall not be entitled to receive any benefits under this Section 9 in the event of any termination pursuant to Sections 7.1 or 8 of this Agreement that occurs on or after the Executive has attained the age of 65.  In the event of any such termination at or after age 65, however, the Executive shall be entitled to receive the benefits provided in Section 7.3 of this Agreement as if he had voluntarily retired at or after age 62.

9.5 Waiver of Claims.  Notwithstanding any provision of this Agreement to the contrary, no payments or benefits shall be required to be paid under Sections 7.1, 8 or 9 of this Agreement unless the Executive executes a waiver and release of claims against the Bank and its affiliates, including the Company, in a form acceptable to the Bank, and the execution occurs not later than the later of (i) the date on which distribution of the payments and benefits would commence in the absence of this Section 9.5, and (ii) the expiration of the minimum review and revocation period(s), if any, required under the Age Discrimination in Employment Act of 1967, 29 U.S.C. Sections 621 through 634, in order for the waiver and release of claims to be effective. This provision shall not apply with respect to any payment made in the event of a termination of employment following a Change in Control.

9.6 Separation from Service.  Notwithstanding any provision of this Agreement to the contrary, to the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that the payment or benefit is payable upon the Executive’s termination of employment, the payment or benefit shall be payable only upon the Executive’s “separation from service.” The term “separation from service” shall mean the Executive’s “separation from service” from the Bank, any affiliate of the Bank, or a successor entity, within the meaning set forth in Section 409A of the Code, determined in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

10. Adjustment for Unavailability of Benefits.  If, in spite of the provisions of this Agreement, benefits or service credits under any benefit plan provided by a third party shall not be payable or provided under any such plan to the Executive, or to the Executive’s dependents, beneficiaries or estate, because the Executive is no longer deemed to be an employee of the Bank, the Bank shall pay or provide for payment of such benefits and service credits for the benefits to the Executive, or to the Executive’s dependents, beneficiaries or estate.

11. Disability. 

11.1 Termination Due to Disability.  The Bank may terminate the Executive's employment upon a determination, by vote of a majority of the members of the Board of Directors of the Bank, acting in reliance on the written advice of a medical professional acceptable to the Board of Directors, that the Executive has become disabled.  For purposes of this Agreement, disability means any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months that: (i) renders the Executive unable to engage in any substantial gainful activity, or (ii) causes the Executive to receive income replacement benefits for a period of not less than three (3) months under an accident and health plan of the Bank covering the Executive.  In such event, the Bank shall pay and deliver to the Executive an amount equal to the sum of (i) the base salary or other compensation earned through the date of termination, plus (ii) any other compensation and benefits as may be provided in accordance with the terms and provisions of any applicable plans and programs of the Bank.  

11.2 Effective Date of Termination.  A termination of employment due to disability under this Section 11 shall be effected by notice of termination given to the Executive by the Bank and shall take effect on the later of the effective date of termination specified in the notice or the date on which the notice of termination is deemed given to the Executive. 

12. Confidential Information.  The Executive will not disclose to any other Person (as defined in Section 14.2) (except as required by applicable law or in connection with the performance of his duties and responsibilities hereunder), or use for his own benefit or gain, any confidential information of the Bank or any affiliate obtained by him incident to his employment with the Bank.  The term “confidential information” includes, without limitation, financial information, business plans, prospects and opportunities (such as lending relationships, financial product developments, or possible acquisitions or dispositions of business or facilities) which

13. No Mitigation; No Offset.  In the event of any termination of employment under this Agreement, the Executive shall be under no obligation to seek other employment or to mitigate damages, and there shall be no offset against any amounts due to him under this Agreement for any reason, including, without limitation, on account of any remuneration attributable to any subsequent employment that the Executive may obtain.  Any amounts due under this Agreement are in the nature of severance payments or liquidated damages, or both, and are not in the nature of a penalty.

14. Non-Competition; Non-Solicitation; Other. 

14.1 Non-Competition; Non-Solicitation. The Executive hereby covenants and agrees that during his employment with the Bank, and for a period equal to the lesser of (i) one year following his termination of employment with the Bank or (ii) the remaining term of this Agreement as of his termination of employment with the Bank, he shall not, without the written consent of the Bank, either directly or indirectly: 

14.2 Cooperation.    The Executive shall, upon reasonable notice, furnish such information and assistance to the Bank as may reasonably be required by the Bank, in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party; provided, however, that the Executive shall not be required to provide information or assistance with respect to any litigation between the Executive and the Bank or any of its subsidiaries or affiliates.

14.3 Compliance and Reasonableness.  All payments and benefits to the Executive under this Agreement shall be subject to the Executive’s compliance with this Section 14.  The parties hereto, recognizing that irreparable injury will result to the Bank, its business and property in the event of the Executive’s breach of this Section 14, agree that, in the event of any such breach by the Executive, the Bank will be entitled, in addition to any other remedies and damages available, to an injunction to restrain the violation hereof by the Executive and all persons acting for or with the Executive. The Executive represents and admits that the restrictions contained in this Section 14 are reasonable and the Executive’s experience and capabilities are such that the Executive can obtain employment in a business engaged in other lines and/or of a different nature than the Bank, and that the enforcement of a remedy by way of injunction will not prevent the Executive from earning a livelihood.  Nothing herein will be construed as prohibiting

15. 14.4In connection with the non-competition restriction in this Section 14, the Executive acknowledges and agrees that he has been advised to consult a lawyer prior to signing this Agreement, that he has had at least ten (10) business days to consider this Agreement before it became effective, and that he has received other adequate mutually agreed consideration in exchange for this restriction which is above and beyond continuation of employment.  If, for any reason, any provision of Section 14.1(c) of this Agreement is held invalid, the restrictions in Section 14.1(c) shall be modified, by the minimum amount necessary, such that the remaining provisions are consistent with law and continue in full force and effect.Miscellaneous. 

15.1 Conflicting Agreements.  The Executive hereby represents and warrants that the execution of this Agreement and the performance of his obligations hereunder will not breach or be in conflict with any other agreement to which he is a party or is bound, and that he is not now subject to any covenants against competition or similar covenants which would affect the performance of his obligations hereunder. 

15.2 Definition of “Person” and “Affiliate”.  For purposes of this Agreement, the term “Person” shall mean an individual, a corporation, an association, a partnership, an estate, a trust and any other entity or organization.  The term “affiliate” includes any entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Bank, including the Company.

15.3 Withholding.  All payments made under this Agreement shall be net of any tax or other amounts required to be withheld under applicable law. 

15.4 Arbitration of Disputes.  Any controversy or claim arising out of or relating to this Agreement or the breach thereof shall be settled by arbitration in accordance with the laws of the Commonwealth of Massachusetts by three arbitrators, one of whom shall be appointed by the Bank, one by the Executive and the third by the first two arbitrators.  If the first two arbitrators cannot agree on the appointment of a third arbitrator, then the third arbitrator shall be appointed by the American Arbitration Association in the County of Essex.  The arbitration shall be conducted in the County of Essex in accordance with the rules of the American Arbitration Association, except with respect to the selection of arbitrators which shall be as provided in this Section 15.4.  Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.  

15.5 Interpretation.  The recitals hereto constitute an integral part of this Agreement.  References to Sections include subsections, which are part of the related Section (e.g., a section numbered “Section 5.5” would be part of “Section 5” and references to “Section 5” would also refer to material contained in the subsection described as “Section 5.5”).

15.6 Assignment; Successors and Assigns, etc.

15.7 Enforceability.  If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

15.8 Reductions.  Notwithstanding anything to the contrary contained in this Agreement, any and all payments and benefits to be provided to the Executive hereunder are subject to reduction to the extent required by applicable statutes,

(a) In no event shall the Bank be obligated to make any payment pursuant to this Agreement that is prohibited by Section 18(k) of the Federal Deposit Insurance Act (codified at 12 U.S.C. sec. 1828(k)), 12 C.F.R. Part 359, or any other applicable law.

(b) In no event shall the Bank be obligated to make any payment pursuant to this Agreement if:

15.9 Waiver.  No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party.  The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

15.10 Notices.  Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by registered or certified mail, postage prepaid, and addressed to the Executive at his last known address on the books of the Bank or, in the case of the Bank, at its main office, attention of the Chief Executive Officer.

15.11 Amendment.  This Agreement may be amended or modified only by a written instrument signed by the Executive and by duly authorized representatives of the Bank.  

15.12 Attorney’s Fees.  The Bank agrees to reimburse the Executive for reasonable out-of-pocket expenses (including reasonable attorney’s fees) incurred in enforcing this Agreement if the Executive succeeds on the merits in enforcing this Agreement.  

15.13 No Effect on Length of Service.  Nothing in this Agreement shall be deemed to prohibit the Bank from terminating the Executive’s employment before the end of the term of this Agreement with or without notice for any reason. This Agreement shall determine the relative rights and obligations of the Bank and the Executive in the event of any such termination. In addition, nothing in this Agreement shall require the termination of the Executive’s employment at the expiration of the term of this Agreement.  Any continuation of the Executive’s employment beyond the expiration of the term of this Agreement shall be on an “at-will” basis unless the Bank and the Executive agree otherwise.

15.14 Payments to Estate or Beneficiaries.  In the event of the Executive’s death prior to the completion by the Bank of all payments due him under this Agreement, the Bank shall continue such payments (other than payments which by their terms cease upon death) to the Executive’s beneficiary designated in writing to the Bank prior to his death (or to his estate, if he fails to make such designation) and, as applicable, to his surviving dependents.

15.15 Entire Agreement; Effect on Prior Agreements.  This Agreement constitutes the entire agreement between the parties pertaining to its subject matter and supersedes all prior and contemporaneous agreements, understandings, negotiations, prior draft agreements, and discussions of the parties, whether oral or written.

15.16 Governing Law.  This contract and shall be construed under and be governed in all respects by the laws of the [Commonwealth of Massachusetts] without giving effect to its principles of conflicts of laws.

15.17 Section 409A.  The parties agree that this Agreement shall be interpreted to comply with or be exempt from Section 409A, and all provisions of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A.  Each payment and benefit payable under this Agreement is intended to constitute a separate payment for purposes of Treasury Regulations Section 1.409A-2(b)(ii).