Section 3. Settlement Benefits.

          (a) Cash Severance Payment. The parties hereto acknowledge that the Merger qualifies as a “change of control” as defined under the Agreement. Upon the earlier of (i) Executive’s termination by BHB, Berkshire Bank, Rome or the Bank (other than for Cause, as defined herein), (ii) Executive’s termination for death or Disability (as defined in Section 409A of the Code), (iii) Executive’s resignation from BHB, Berkshire Bank, Rome or the Bank for Good Reason (as defined herein), or (iv) the expiration of the Term, BHB, Berkshire Bank, Rome or the Bank shall pay the Executive a cash lump sum payment equal to $408,018 (the “Cash Severance Payment”). For these purposes, Cause is defined as 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 offenses) or a final cease and desist order. Also for these purposes, the Executive cannot be terminated for Cause unless Charles M. Sprock, in his sole discretion, makes a good faith determination that there are grounds therefore. The Cash Severance Payment shall be payable to the Executive within 10 days following the expiration of the Term, and shall be subject to applicable withholding taxes. Notwithstanding the above, however, if the date of the expiration of the Term is also the effective date of the Executive’s “separation from service” within the meaning of Section 409A of the Code (“Separation Date”), or is within the six-month period immediately following the Separation Date, and the Executive is a “specified employee” within the meaning of Section 409A of the Code on the Separation Date, then BHB shall pay the Cash Severance Payment to the Executive on the first day of the seventh month following the Separation Date. Notwithstanding the foregoing, no Cash Severance Payment shall be paid if the Executive voluntarily terminates employment at BHB or Berkshire Bank during the Term other than for Good Reason (as defined herein). For these purposes, Good Reason is defined as (x) relocation of Executive’s principal place of employment to a city more than fifty (50) miles from Rome, New York or (y) breach of this agreement by BHB or the Berkshire Bank which is not cured within 30 days of delivery thereto of written notice of such breach from the Executive. Notwithstanding anything herein to the contrary, the Executive’s termination due to death or Disability (as defined in Section 409A of the Code) shall not be considered “voluntary termination.”

          (b) Additional Compensation. In the event the Term extends beyond the Closing Date, the Executive shall receive $10,462.00 biweekly, payable in accordance with Berkshire Bank’s payroll practices (the “Additional Compensation”). The Executive agrees that in consideration of the additional compensation set forth herein, Executive agrees to waive any coverage or benefits under any plans of Berkshire Bank and/or BHB during such period. BHB and Berkshire Bank acknowledge and agree that (i) the Additional Compensation shall be payable for up to ninety (90) days after the Closing Date, (ii) the Additional Compensation shall cease upon the expiration of the Term, and (iii) upon expiration of the Term, the Executive shall be entitled to the Cash Severance Payment.

          (c) Rabbi Trust. If the Cash Severance Payment is not paid on the Closing Date, the Cash Severance Payment shall be deposited on the Closing Date into an irrevocable grantor trust which meets the requirements of Internal Revenue Service Revenue Procedure 92-65 (as

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