DEF 14A of Western New England Bancorp, Inc., Mar 29, 2024

DEF 14A of Western New England Bancorp, Inc.

Filed Mar 29, 2024 · FY20230001839882-24-009928

Open on EDGAR

  1. TABLE OF CONTENTS

    | | Page | | EXECUTIVE COMPENSATION | 39 | | Summary Compensation Table | 39 | | Compensation Actually Paid | 40 | | CEO Pay Ratio Disclosure | 43 | | Outstanding Equity Awards at Fiscal Year End | 43 | | Option Exercises and Stock Vesting | 44 | | Pension Benefits | 44 | | DIRECTOR COMPENSATION | 45 | | Cash Compensation | 45 | | Equity Retainer Grant | 45 | | Deferred Compensation Plan | 45 | | Stock Ownership Guidelines | 46 | | Non-Employee Director Stock Election Program | 46 | | TRANSACTIONS WITH RELATED PERSONS | 47 | | Related-Person Transactions Policy and Procedures | 47 | | Transactions with Certain Related Persons | 47 | | DELINQUENT SECTION 16(A) REPORTS | 48 | | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 49 | | Principal Shareholders | 49 | | Security Ownership of Management | 50 | | PROPOSAL 2 – NON-BINDING ADVISORY RESOLUTION ON THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS | 52 | | Vote Required | 52 | | Our Recommendation | 52 | | General | 52 | | PROPOSAL 3 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 53 | | Vote Required | 53 | | Our Recommendation | 53 | | Independent Registered Public Accounting Firm Fees and Services | 53 | | HOUSEHOLDING OF PROXY MATERIALS | 54 | | OTHER MATTERS | 54 |

  2. Proposal 1: Election of Directors

    Proposal 1: Election of Directors Directors will be elected by a plurality of the votes cast at the Annual Meeting by the holders of shares present in person or represented by proxy and entitled to vote on the election of directors. Plurality means that the individuals who receive the largest number of “FOR” votes cast are elected as directors up to the maximum number of directors to be chosen at the Annual Meeting. Abstentions and broker non-votes will not affect the outcome of the election of directors. You may not vote your shares cumulatively for the election of directors.

  3. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS The Board, upon recommendation of its Nominating and Corporate Governance Committee, has nominated the following three (3) individuals named in the table below for election as directors. All nominees have consented to being named in this Proxy Statement and to serve if elected. If you elect all the nominees listed below, they will hold office until the Annual Meeting of Shareholders held in 2027 or until their successors have been elected and qualified. If any nominee is unable or does not qualify to serve, you or your proxy may vote for another nominee proposed by the Board. If for any reason these nominees prove unable or unwilling to stand for election or cease to qualify to serve as directors, the Board will nominate alternates or reduce the size of the Board to eliminate the vacancies. The Board has no reason to believe that any of the nominees would prove unable to serve if elected. There are no arrangements or understandings between us and any director, or nominee for directorship, pursuant to which such person was selected as a director or nominee.

  4. ELECTION OF DIRECTORS

    | Name of Nominee | Age(1) | Term to Expire | Position Held | Director Since | | James C. Hagan | 62 | 2027 | Director, Chief Executive Officer and President | 2009 | | William D. Masse | 68 | 2027 | Director | 2016 | | Phillip R. Smith | 68 | 2027 | Director | 2009 |

  5. ELECTION OF DIRECTORS

    (1)Age at May 9, 2024 Directors are elected by a plurality of the votes cast at the Annual Meeting by the holders of shares present in person or represented by proxy and entitled to vote on the election of directors. The nominees for director who receive the most votes will be elected. You may not vote your shares cumulatively for the election of directors. For purposes of the election of directors, shares for which voting authority is withheld and broker non-votes will have no effect on the result of the vote.

  6. ELECTION OF DIRECTORS

    | ✓ | THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR ALL” THE NOMINEES FOR ELECTION AS DIRECTORS SET FORTH ABOVE. |

  7. INFORMATION ABOUT OUR BOARD OF DIRECTORS

    INFORMATION ABOUT OUR BOARD OF DIRECTORS Our Board currently consists of ten (10) members, each who have the highest ethical character and personal and professional reputations consistent with the Company’s image and reputation, and also who demonstrate integrity and a willingness to appropriately challenge management. Our Bylaws provide that no person shall be eligible for election, reelection, or appointment or reappointment to the Board if such person reached seventy-two (72) years of age or older on appointment or reappointment to the Board. Consistent with our Bylaws, Mr. Orlen will not continue as a director after the Annual Meeting. Following the Annual Meeting, our Board will consist of nine (9) members. The name, age and length of service of each of our nominees and the continuing members of our Board are set forth below:

  8. INFORMATION ABOUT OUR BOARD OF DIRECTORS

    | Gender | 67% Male | | 33% Female | 3 | Female Directors | | Age | 2 in 50s | 7 in 60s | n/a | 63.7 | Avg. Age of Directors | | Tenure | 5 =< ten years | | 4 > ten years | 11.1 | Avg. Tenure of Directors | | Independence | 89% Independent | | 11% Non-Independent | 8 | Independent Directors |

  9. INFORMATION ABOUT OUR BOARD OF DIRECTORS

    | Name | Age(1) | Term to Expire | Position Held | Director Since(2) | | James C. Hagan | 62 | 2024 | President, Chief Executive Officer, Director | 2009 | | William D. Masse | 68 | 2024 | Director | 2016 | | Philip R. Smith | 68 | 2024 | Director | 2009 | | Gary G. Fitzgerald | 57 | 2025 | Director | 2016 | | Paul C. Picknelly | 63 | 2025 | Director | 2016 | | Laura Benoit | 57 | 2026 | Director | 2014 | | Donna J. Damon | 65 | 2026 | Director | 2011 | | Lisa G. McMahon | 65 | 2026 | Director, Chairperson of the Board | 2014 | | Steven G. Richter | 68 | 2026 | Director | 2011 |

  10. INFORMATION ABOUT OUR BOARD OF DIRECTORS

    (1)At May 9, 2024 (2)Includes terms served on the Board of the Bank, as applicable.

  11. Board Diversity

    Board Diversity The Company and the Board strongly believe diversity is critical to the Company’s success and ability to create long-term value for our shareholders. The Board and Executive Management have adopted diversity and inclusion as a key focus of the Company’s overall strategic plan. In 2020, the Company proudly announced its first female Chairperson in its 170-year history. With respect to the Board, it is acknowledged that a Board consisting of individuals with diverse backgrounds ensures broader representation and inspires deeper commitment to management, employees and the communities we serve. While not specific to a particular policy, the Board prioritizes diversity in gender, ethnic background and professional experience when considering candidates for director as part of its commitment to diversity. Following our Annual Meeting, 33% of the Company’s Board will be diverse from a gender, race or ethnic perspective. In 2022, as required by NASDAQ, the Company began collecting and disclosing diversity information for our directors. Each of our directors voluntarily self-identified as follows:

  12. Board Diversity

    | Board Diversity Matrix Following the Annual Meeting | | | | | | Total Number of Directors | 9 | | | | | | Female | Male | Non-Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | | | | Directors | 3 | 6 | 0 | 0 | | Part II: Demographic Background | | | | | | African American or Black | 0 | 0 | 0 | 0 | | Alaskan Native or Native American | 0 | 0 | 0 | 0 | | Asian | 0 | 0 | 0 | 0 | | Hispanic or Latinx | 0 | 0 | 0 | 0 | | Native Hawaiian or Pacific Island | 0 | 0 | 0 | 0 | | White | 3 | 6 | 0 | 0 | | Two or More Races or Ethnicities | 0 | 0 | 0 | 0 | | LGBTQ+ | 0 | | | | | Did Not Disclose Demographic Background | 0 | | | |

  13. Board Refreshment

    Board Refreshment Our Board believes that a fully engaged Board is a strategic asset of the Company and that knowledgeable and fresh viewpoints and perspectives are important for informed decision making. The Board also believes that appropriate tenure can facilitate members developing greater institutional knowledge and deeper insight into the Company’s operations across a variety of economic and competitive environments. Even before vacancies arise, the Board periodically evaluates whether it collectively has the right mix of skills, experience, attributes and diverse viewpoints necessary for it to drive shareholder value. The results of this evaluation are used to help inform the desirable skills set for potential Board nominees and to screen director candidates. At the same time, as part of planning for Board refreshment and director succession, the Nominating and Corporate Governance Committee’s practice has been to periodically consider potential director candidates. As a result of this ongoing review, in the last twelve years, the Board has nominated six new directors, and in the last eight years, the Board has nominated four new directors. The average tenure for the Board is 11.1 years. With the Board’s recommended slate of three nominees, the Board believes that it has an appropriately balanced Board and will continue to consider opportunities to strengthen the Board’s composition over time. As a group, the average tenure of the three nominees for election to the Board is 12.7 years.

  14. Director Competencies

    Director Competencies Our Board believes that a balance of diversity and tenure is a strategic asset. Our Nominating and Corporate Governance Committee routinely considers director attendance, past performance on the Board and Board committees, institutional knowledge of the Company, as well as any other director board commitments when evaluating directors for nomination. While the Company has not yet instituted a formal policy with regard to its directors’ service on other boards, the Company asks that all directors annually disclose the number of boards they serve on and further asks that they devote adequate time for preparation and attendance at all Board and Board committee meetings. During 2023, none of the Company’s directors served on the boards of more than three publicly traded companies. Our Nominating and Corporate Governance Committee also factors in director competencies when placing an existing director into nomination for reelection to the Board. We believe our Board collectively offers a diverse range of qualifications, experiences and key skills that provide an appropriate and diverse mix of qualifications necessary for our Board to effectively fulfill its oversight responsibilities. The summary below is not intended to be an exhaustive list for each director, but rather a summary to convey the general breadth of our directors’ collective experience and qualifications. Our directors use these skills and experiences when they oversee the Company’s strategy, performance, culture and enterprise risk. Additional information about each continuing Board member’s background, business experience and other matters is provided within the sections entitled “Director Nominees” and “Continuing Directors”.

  15. Director Competencies

    | | Benoit | Damon | Fitzgerald | Hagan | Masse | McMahon | Picknelly | Richter | Smith | | Accounting/Financial Reporting – Experienced accountant, auditor, chief financial officer, or other relevant experience in accounting and financial reporting. Finance or Accounting Degree. Good understanding of financial internal controls and accounting principles. | ✓ | | ✓ | ✓ | | | | | | | Financial Industry Experience – Experienced in one or more of the Company’s specific financial services areas, such as retail banking, commercial lending or wealth and investment management services. | | | | ✓ | | | | | ✓ | | Human Capital Management, Compensation & Benefits – Experienced in management and development of a large workforce, managing compensation, directing strategies leveraging human capital, managing inclusion and diversity efforts, establishing culture, implementing succession planning and talent management, and/or managing other human capital initiatives. | ✓ | ✓ | ✓ | ✓ | | ✓ | ✓ | ✓ | | | Corporate Governance – Experienced in corporate governance matters, principles and administration. Ability to assess accountability and Board effectiveness with Bylaws and Committee Charters. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | ✓ | ✓ | | Information Security, Cybersecurity, Digital Innovation & FinTech – Experienced in information security, data privacy cybersecurity and/or FinTech. Experienced in use of technology to facilitate business operations and customer service. | ✓ | | | | | | | ✓ | | | C-Suite Leadership – Experienced in business and strategic management from service in a significant leadership position, such as CEO, CFO, Business Owner or other senior leadership role. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | | Real Estate Development – Experience acquired as a general contractor, real estate developer, real estate investor or builder. | | | | | | | ✓ | | ✓ | | Legal and Regulatory – Experience acquired through a law degree and as a practicing attorney in understanding legal risks and obligations; experienced in governmental or regulatory affairs, including as part of a business and/or through positions with government organizations or regulatory bodies. | | | | ✓ | | | | | ✓ | | Risk Management – Experienced in reviewing or managing risk in a large organization, including specific types of risk (physical security, financial risk or risks facing large financial institutions). | ✓ | | | ✓ | | | | ✓ | | | Environmental, Social and Governance (ESG) – Experienced in ESG criteria, including as part of a business, and managing corporate social responsibility strategies. Experienced in growing environmental sustainability, climate-related risks and social governance trends. | | | | ✓ | | | | | | | Strategic Planning – Experienced in defining and driving strategic direction and growth and managing the operations of a business or large organization. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |

  16. Board Education

    Board Education Our Board has developed an annual schedule of Board training over time that covers a broad range of topics to enhance and strengthen the skills, knowledge and competencies of our directors, both individually and collectively. During 2023, our Board’s financial regulatory compliance training included the Bank Secrecy Act, Anti-Money Laundering, the Office of Foreign Assets Control and fair lending. During 2023, the Board also participated in cybersecurity and identity theft awareness training and was further educated on the current trends, benefits and/or risks associated with Fintech and digital currencies. On a bi-annual basis, the Board participates in workforce harassment prevention training provided by a law firm. Another key element of our Board education program takes place during our Board’s annual strategic planning session, at which external consultants are invited to present on a broad range of topics. In 2023, topics covered were related to asset-liability strategies in today’s economy and understanding stock value market impacts and strategies to maximize shareholder value. Directors are encouraged to avail themselves of educational programs offered through the American Bankers Association, as well as other recognized independent providers.

  17. Director Nominees

    Director Nominees The biographies of the nominees below contain information regarding the person’s service as a director, business experience, director positions held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings, if applicable, and the experience, qualifications, attributes or skills that caused the Nominating and Governance Committee and the Board to determine that the person should serve as a director. James C. Hagan has been a director of our Board since 2009, our Chief Executive Officer since December 31, 2008, and our President since June 2005. Mr. Hagan served as Chief Operating Officer from June 2005 until December 2008. Prior to that, he served as Senior Vice President and Commercial Loan Department Manager from 1998 and was a Vice President from 1994. Prior to 1994, Mr. Hagan worked as a commercial lender and manager at other New England-based banking institutions. Mr. Hagan currently serves on the boards of Sullivan Paper Company since 2017, the Chicopee Savings Bank Charitable Foundation since 2016 (an affiliate with the Bank), Stanley Park of Westfield, Inc. since 2005 and the Western MA Baseball Hall of Fame since 2017. Mr. Hagan has also been serving as a class agent for Suffield Academy since 2008. Mr. Hagan received a Bachelor of Science from Westfield State University and received a Master of Business Administration from American International College. Mr. Hagan’s expertise in credit administration, commercial lending and management through his various roles within the Company and within other New England-based financial institutions provides him with the qualifications and skills to serve as a director. William D. Masse has been a director of our Board since October 2016. Previously, Mr. Masse served on the boards of legacy Chicopee Savings Bank and legacy Chicopee Bancorp, Inc. since 1998 and 2006, respectively, up until their merger with and into the Company. Mr. Masse retired on January 1, 2021, as the President of Granfield, Bugbee & Masse Insurance Agency in Chicopee, Massachusetts. He had been in the insurance industry for 40 years. Mr. Masse holds a Bachelor of the Arts degree from Williams College where he majored in economics. Previous to the past five years, Mr. Masse served as chairman and/or president of the board of directors of various area non-profit organizations. His experience, as well as business and community contacts, provide him with the qualifications and skills to serve as a director. Philip R. Smith has been a director of our Board since 2009. Prior to Mr. Smith’s directorship, he served as Secretary to the Company. Mr. Smith has been a partner at Bacon & Wilson, P.C., one of the largest regional law firms in western Massachusetts, specializing in Real Estate, Business Law and Estate Planning, since 2001. Previous to the past five years, Mr. Smith had served as a board member of the Westfield Chamber of Commerce in Westfield, Massachusetts, the Westfield State College Foundation and the Westfield Community Development Corporation. He is a graduate of the University of New Hampshire and received a Juris Doctor from the New England School of Law and an LL.M. in taxation from Boston University. Mr. Smith’s experience in commercial and residential lending and business law, through his many years of legal practice, provides him with the qualifications and skills to serve as a director.

  18. Continuing Directors

    Continuing Directors Laura Benoit has been a director of our Board since 2014. Ms. Benoit retired in August 2022 as Treasurer and Co-Owner of Bay State Fuel Oil, Inc., a fuel distribution company located in West Springfield, Massachusetts, where she served since 1985. Bay State Fuel Oil, Inc. was the recipient of an Excellence in Risk Management Award for ten consecutive years. Ms. Benoit served on the Board of Directors for EMaxx Insurance from 2017 through 2022, where she served as chairperson of their Investment and Audit Committees. Ms. Benoit currently serves as President of Buddy Realty, LLC and oversees the management of several properties. Ms. Benoit gained extensive education and knowledge of cybersecurity and information technology of the Payment Card Industry Data Security Standards and compliance requirements through her businesses. During the past five years, Ms. Benoit has attended multiple cybersecurity educational conferences provided by CMD Technology. Further, during the past twenty years, Ms. Benoit has annually received training through EMaxx conferences. Ms. Benoit is a former member of the board of directors of the Western Mass Fuel Dealers Association, where she served from 1995 through 2010 in the capacity of treasurer and president. Ms. Benoit’s finance, accounting and small business management experience provides her with the qualifications and skills to serve as a director. Donna J. Damon has been a director of our Board since 2011. Ms. Damon has been the President and owner of New England Concrete Cutting, Inc., a construction company specializing in concrete cutting and drilling located in Agawam, Massachusetts, since 1992. She also serves as an executive officer and the office manager for two separate companies: Witch Equipment of New England, Inc. and Witch Enterprises, Inc. Ms. Damon’s experience in human resources, office management and business administration, including financial management and employee benefit administration, provides her with the qualifications and skills to serve as a director. Gary G. Fitzgerald has been a director of our Board since October 2016. Previously, Mr. Fitzgerald served on the boards of legacy Chicopee Savings Bank and legacy Chicopee Bancorp, Inc. since 2009, up until their merger with and into the Company. Mr. Fitzgerald is a Certified Public Accountant and is a Managing Principal of Downey, Pieciak, Fitzgerald & Co., P.C., a CPA firm located in South Hadley, Massachusetts. Mr. Fitzgerald currently serves on the board of directors of the Chicopee Savings Bank Charitable Foundation, an affiliate with Westfield Bank, a position he has held since 2021. Mr. Fitzgerald received a Bachelor of Science degree from Western New England University, a Master of Science in Taxation degree from Bentley University and has been licensed as a Certified Public Accountant since 1996. His extensive background in accounting and taxation provides him with the qualifications and skills to serve as a director and as the Company’s financial expert. Lisa G. McMahon has been a director of our Board since 2014 and has served as our Chairperson since 2020, making her the first female Board Chairperson in the Company’s 170-year history. Ms. McMahon is the Vice President of Institutional Advancement and Executive Director of the Westfield State Foundation, Inc. at Westfield State University. Ms. McMahon began at Westfield State University in 2013 after leaving Merrill Lynch where she obtained her general securities license and license to become a registered investment advisor representative. Ms. McMahon currently serves as President of the Westfield Academy Foundation and is the past president of the executive board of the Genesis Spiritual and Conference Center – a division of the Sisters of Providence Health Systems. From 2007 to 2012, Ms. McMahon was the Executive Director of the Westfield Business Improvement District, Inc. Ms. McMahon has served on numerous boards and committees in a leadership capacity. Ms. McMahon received a Bachelor of Science degree from Our Lady of the Elms College and an honorary doctorate degree in Public Service from Westfield State University. Ms. McMahon’s business experience and extensive work with micro businesses, nonprofit management and community relations provides her with the qualifications and skills to serve as a director. Paul C. Picknelly has been a director of our Board since October 2016. Previously, Mr. Picknelly served on the boards of legacy Chicopee Savings Bank and legacy Chicopee Bancorp, Inc. since 2000 and 2006, respectively, up until their merger with and into the Company. Mr. Picknelly is a premium hotel owner and operator, as well as a commercial real estate developer. Mr. Picknelly has served as President of Monarch Enterprises, LLC (Monarch Place Office Tower, Sheraton Springfield, and the Hilton Garden Inn Hotels in Springfield and Worcester, Massachusetts) since 1993 and further manages various commercial real estate properties in the local area. Since 2006, Mr. Picknelly has been serving on the Board of Directors of Uno’s Chicago Grill – Springfield and Worcester, Massachusetts (a franchise of 413-508 Pizza, LLC). He has also been serving on the Board of Directors of Baystate Health since 2020. Mr. Picknelly brings to the Board his unique and extensive knowledge of the customers, communities and political climate within our marketplace from a premier hotel management and real estate developer perspective. Steven G. Richter has been a director of our Board since 2011. Dr. Richter is the founder, former owner, operator and President of Micro Test Laboratories, Inc., a contract testing and manufacturing organization for the medical device, pharmaceutical and biotechnology industries. During his 30 years at the helm of Micro Test, Dr. Richter was involved with financial responsibilities and strategic initiatives. Micro Test was acquired and then merged with Cambrex, Inc. in 2014. Computer knowledge was obtained from various sources, including formal training and classroom activities. Human Resource experience developed over 30 years at Micro Test is important to the Company’s Compensation Committee. Dr. Richter’s regulatory experience began at the Food and Drug Administration (“FDA”) with Federal and State regulatory authority. His experience with filing FDA-related documents and compliance to FDA laws gives the Board additional compliance optics. Dr. Richter is a founding managing partner of RichCo Laboratories, LLC, a life science consulting and testing operation established in 2017. His experience with risk management programs is important to the Company’s Finance and Risk Management Committee. His ability to review a business plan and financial statements is essential for participation on the Company’s Executive Committee. Dr. Richter continues to give back to his alma maters, both Holyoke Community College and the University of Massachusetts. At Holyoke Community College, Dr. Richter is involved with the life science community and was instrumental in obtaining a $4 million grant for their lab build out. At the University of Massachusetts, Dr. Richter served on the board of the IALS institute from its inception. Currently, RichCo Laboratories, LLC supports student undergraduate research work that helps identify PFOS/PFAS toxicology issues in zebrafish models. Dr. Richter is a graduate of the University of Massachusetts with a Bachelor’s of Science in Microbiology and went on to receive his Master of Sciences degree in Biological Sciences from the University of Massachusetts-Lowell and his Ph.D. in Sterilization Sciences from Columbia Pacific University. Dr. Richter’s experience in small business administration and management, including financial and business operations matters, provides him with the qualifications and skills to serve as a director.

  19. INFORMATION ABOUT OUR EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS

    INFORMATION ABOUT OUR EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS The executive officers of the Company, as of March 29, 2024, are as follows. Ages reflected are as of the Annual Meeting date of May 9, 2024. Allen J. Miles, III, age 61, was appointed to Executive Vice President in December 2008 and serves as the Bank’s Senior Lender. Previously, Mr. Miles served as Senior Vice President and Senior Lender of the Company and the Bank since August 2005. From 1998 to 2005, Mr. Miles served as Vice President and Commercial Loan Officer. Kevin C. O’Connor, age 64, was appointed to Executive Vice President and Chief Banking Officer in February 2017. Previously, Mr. O’Connor held the position of Senior Vice President of Retail Banking since February 2015 and served as Vice President since 2010. Mr. O’Connor has over twenty-five years’ experience in retail and branch banking and had previously worked at both national and regional banking institutions as a vice president and regional manager of retail banking and sales, including small business sales. Guida R. Sajdak, age 51, was appointed to Chief Financial Officer and Treasurer in April 2017 and to Executive Vice President in October 2016. Mrs. Sajdak previously served as the Chief Risk Officer from October 2016 to April 2017. Previous to October 2016, Mrs. Sajdak served as a Senior Vice President and the Chief Financial Officer and Treasurer of legacy Chicopee Bancorp, Inc. and legacy Chicopee Savings Bank, where she held those positions since 2010. Mrs. Sajdak served Chicopee Savings Bank in various capacities since 1989, including that of Internal Auditor and Commercial Lender. Mrs. Sajdak also serves on the board of the Chicopee Savings Bank Charitable Foundation (an affiliate with the Bank) as its Chairperson and President. John E. Bonini, age 56, was appointed to Senior Vice President and General Counsel upon the retirement of his predecessor in January 2021 and previously served as Senior Vice President and Associate General Counsel upon his joining the Company in August 2020. Prior to joining the Company, Mr. Bonini was employed at Barings LLC, an international investment management firm owned by MassMutual, where he was a managing director and senior counsel for Barings Real Estate since 2005. Mr. Bonini has extensive experience in real estate transactions, corporate and investment law and corporate governance. He is a graduate of Wesleyan University and received his Juris Doctor from Suffolk University Law School. Filipe B. Goncalves, age 59, was appointed to Senior Vice President and Chief Credit Officer in April 2023. Prior to his appointment as Chief Credit Officer, Mr. Goncalves served as the Associate Chief Credit Officer and as a Commercial Lending Team Leader. Prior to Mr. Goncalves joining the Company in 2019, he held the position of Chief Lending Officer at a mutual savings bank serving central and western Massachusetts. Mr. Goncalves received a Master of Business Administration Degree with a focus in finance and economics from Western New England University. Darlene Libiszewski, age 58, was appointed to Senior Vice President and Chief Information Officer in October 2016. Ms. Libiszewski previously served as the Senior Vice President of Information Technology for legacy Chicopee Savings Bank and legacy Chicopee Bancorp, Inc. where she held the position since December 2007. Ms. Libiszewski has 35 years of experience in various information technology and cybersecurity roles, including management, spanning many disciplines, including network and infrastructure design, maintenance and management; risk management; vendor management; strategic planning; business resiliency; disaster recovery planning and testing; project management and delivery; and protection of digital assets. Ms. Libiszewski holds a Bachelor and Master degree in Business and Technology Management and maintains cybersecurity certifications and participation in various industry, cyber and technology committees and forums to maintain continuous awareness of evolving risks, threats and mitigation strategies. Daniel Marini, age 52, was appointed to an Executive Officer position in January 2023 and serves as Senior Vice President of Retail Banking and Marketing, a position he has held since January 2022. Previously, Mr. Marini served in various capacities since 2011 within the Retail Banking and Marketing divisions. Mr. Marini has extensive experience in retail banking sales and service, retirement services, cash management services, marketing and sales administration. Mr. Marini received his Bachelor’s Degree in Economics from the University of Massachusetts. Christine Phillips, age 51, was appointed to Senior Vice President and Human Resources Director in November 2020 upon joining the Company. Previously, Ms. Phillips served as the First Vice President of Human Resources for PeoplesBank, headquartered in Massachusetts, since 2014. There she was responsible for overseeing the operations of the Human Resources Department and employee engagement. Ms. Phillips brings with her extensive leadership and human resources management including strategic planning, compensation, benefits, talent management and employee training programs. Ms. Phillips received a Master’s Degree in Business Administration at the Isenberg School of Management at the University of Massachusetts. Leo R. Sagan, Jr., age 61, was appointed to Senior Vice President and Chief Risk Officer in 2017. Previously, Mr. Sagan served as the Chief Financial Officer since December 2008, as Vice President and Controller from 2003 to 2008, as Controller from 2002 to 2003 and as Assistant Treasurer from 1999 to 2002. Mr. Sagan is a Certified Risk Professional, obtaining this certification from the Bank Administration Institute (BAI). He also obtained his certification as an Nstitute Certified Vendor Management Professional (NCVMP) and served as an integral member of Nstitute’s Client Advisory Committee for the development of their NCVMP certification program. Mr. Sagan is currently a member of the Risk Management Association (RMA), the Financial Managers Society and the Massachusetts Bank Internal Auditors Association.

  20. In Memoriam

    In Memoriam Louis O. Gorman retired from his position as the Company’s Senior Vice President of Credit Administration and the Chief Credit Officer in March 2023 and subsequently passed in June 2023. Mr. Gorman’s banking career spanned nearly four decades during which nearly half of that time was with Westfield Bank. Mr. Gorman was an integral part of the Company’s Executive Team, helping the Company grow and prosper. His dedication, work ethic and leadership were invaluable to Management and the Board.

  21. CORPORATE GOVERNANCE

    CORPORATE GOVERNANCE The Company is dedicated to being a financial industry leader in corporate governance and business ethics. Our Board is comprised of directors with diverse professional and business experience. All of our directors, other than Mr. Hagan, are independent. They all share a commitment to fostering an effective risk environment coupled with a strong internal audit structure. Their unwavering commitment protects our clients, shareholders and reputation. Our Code of Ethics for our Senior Financial Officers and our Code of Conduct reflect the Company’s expectation for the conduct of our directors, officers and employees. Through recurring training and disclosures, as well as periodic communication related to specific topics, the Company maintains the highest level of ethical conduct. The Nominating and Corporate Governance Committee receives annual education related to corporate social responsibility, as well as to trends and best practices for directors.

  22. Board of Directors

    Board of Directors The Board oversees our business and monitors the performance of our management team. In accordance with our corporate governance procedures, the Board does not involve itself in our day-to-day operations. Our executive officers and management oversee our day-to-day operations. Our directors fulfill their duties and responsibilities by attending regular meetings of the Board, which are generally held on a monthly basis. Our directors also discuss business and other matters with the Chairperson and the President, other key executives and our principal external advisers (legal counsel, auditors, financial advisors and other consultants). The Company’s Board held four regular meetings during the fiscal year ended December 31, 2023, and the Bank’s Board held 11 regular meetings and two strategic planning meetings. Each incumbent director attended at least 75% of the total of: (i) the meetings of the Board held during the period for which he or she has been a director, and (ii) the meetings of the committee(s) on which that particular director served during such period. The Board and their subcommittees, collectively, scheduled a total of 39 meetings during the year ended December 31, 2023, for which, collectively, member attendance totaled 97%. It is our policy that all directors and nominees attend the Annual Meeting. At the 2023 Annual Meeting, 9 of the 10 members then serving on the Board were in attendance. In addition to the Company’s regularly scheduled Board of Director meetings, all members of the Board participated in an all-day strategic planning session.

  23. Best Practices in Executive Compensation

    | WHAT WE DO | WHAT WE DON’T DO | | ✓Use an independent compensation consultant to advise on executive compensation matters | xDo not have compensation programs that encourage unnecessary and excessive risk taking | | ✓Design compensation programs to drive long-term performance | xNo income tax or excise tax gross-ups in our Change-in-Control programs | | ✓Incorporate an overriding performance condition in our performance metrics | xNo repricing stock options without shareholder approval and no backdating stock options | | ✓Consider peer group data when making executive compensation decisions | xDo not permit short-selling of the Company’s stock by executive officers | | ✓Set multi-year vesting periods for equity awards | xNo reload or “evergreen” share replenishment features | | ✓Stock ownership guidelines | xDo not provide guaranteed bonuses to our NEOs | | ✓Have recoupment and incentive recovery policies | xDo not provide excessive severance arrangements | | ✓Maintain an independent Compensation Committee | | | ✓Provide NEOs compensation opportunities in the form of incentive awards, aligning compensation with the Company’s performance | | | ✓Conduct an annual Say-on-Pay advisory vote and evaluate voting results | |

  24. Role of the Compensation Consultant

    Role of the Compensation Consultant The Committee last engaged the consulting services of Pearl Meyer & Partners, LLC (“Pearl Meyer”) in 2022 to provide independent advice and counsel related to executive and Board compensation, inclusive of comprehensive non-employee director and executive compensation analyses. The Committee has also used the services of several law firms to ensure compensation plans and programs are properly administered, documented and meet legal and regulatory requirements. The Committee engages with Pearl Meyer on a tri-annual and rotating basis for independent advice and counsel related to executive and Board compensation. The Compensation Committee considers the independence of Pearl Meyer and its outside legal advisors in light of SEC and NASDAQ Listing Rules for compensation committees and compensation consultants, legal counsel and other advisers.

  25. Compensation Components

    Compensation Components In support of our executive compensation philosophy and objectives, our executive compensation program consists of the following three key components: base salary, short-term annual incentive awards (cash component) and long-term incentive awards (equity component). The Committee reviews the various elements of executive compensation provided by the Company with a view toward aligning executive interests with those of the Company’s shareholders and the long-term interests of the Company. The Committee determines the allocation of compensation by reviewing data from the Company’s Proxy Peer Group (Please see “Benchmarking and Use of Compensation Consultants” on page 38), as well as using salary surveys and review of industry trends. The elements of the Company’s NEO compensation program include the following:

  26. Compensation Components

    | Compensation Element | Description or Purpose | Fixed/ Performance-Based | Short-Term or Long-term | | Base Salary | Attract and retain executives | Fixed | Short-term | | Short-Term Incentive Plan (Cash component) | Drives performance achievement and creates shareholder value | Performance-based | Short-term | | Long-Term Incentive Plan (Equity component) | Aligns interests with shareholders and serves as a retention tool through multi-year vesting | Performance-based | Long-term |

  27. 2023 Short-Term Incentive Plan

    2023 Short-Term Incentive Plan The Company’s Short-Term Incentive Plan (the “STI Plan”) is a short-term (annual) cash incentive compensation plan intended to reward performance of key employees, including the NEOs. The STI Plan is designed to motivate employees to attain desired short-term objectives and to encourage teamwork and collaboration while aligning compensation with overall Company performance. The STI Plan is a key element of the total compensation provided to the NEOs and allows the Company to remain competitive with the market by providing an opportunity for the NEOs to receive cash incentives. The design of the STI Plan is intended to ensure that benefits paid to NEOs and other officers are in alignment with both the Company’s strategic plan and the achievement of individual performance goals. The award opportunities are linked to specific target and range of performance results for multiple performance measures and are calculated as a percentage of base salary in effect on the last day of the calendar year during the relevant performance period, which runs from January 1st to December 31st. The Company typically makes payments in the first quarter immediately following the end of the annual performance period. The Compensation Committee sets and approves award targets as a percentage of base salary. The incentive pool funding ranges from 0% - 150% of target based on actual performance. The maximum award for any participant, in consideration of corporate and individual performance, is capped at 150% of target. Each year, in the first quarter, the Compensation Committee sets specific incentive metrics and goals that align with the Company’s strategic plan. The Compensation Committee sets threshold, target and stretch goals for each incentive metric. Target performance goals are expected to have some stretch and not be “guaranteed.” Threshold performance goals are intended to reward solid performance but at reduced payout levels. Stretch performance goals are expected to represent strong performance that is unlikely, but possible, if the Company exceeds its goals. The Compensation Committee approves the NEOs’ goals and awards. The Compensation Committee can modify the goals at its discretion and approves the final goals at the beginning of each year. Once the performance goals and pool funding are known, individual performance is assessed to determine and allocate the actual awards from the amount that has been funded to the pool. The Compensation Committee determines awards in consideration of individual performance, but with the discretion to consider other factors such as: (i) Company performance shortfalls, (ii) regulatory and safety and soundness concerns and/or (iii) risk management considerations. For 2023, the individual targets were defined as a percentage of base salary. Mr. Hagan’s target was 45% of base salary and Mr. Miles’ and Mrs. Sajdak’s targets were each 30% of base salary. The STI Plan targets were unchanged from the prior year. Similarly, all NEOs had the same four Company performance goals and weightings described in the table below. The Committee, working with management, established and approved the Company’s 2023 performance metrics within the STI Plan.

  28. Company Performance Component (75% of annual incentive award)

    Company Performance Component (75% of annual incentive award) On February 15, 2023, the Compensation Committee established and approved performance goals and awards to determine the pool available for payout of incentive compensation. The Compensation Committee also established a minimum trigger or gate level of performance, which is defined as: (i) 70% of budgeted net income and (ii) the Bank receiving satisfactory regulatory ratings from its regulatory examiner. The Committee worked with Pearl Meyer to redesign the Company’s STI Plan framework in 2022 and its framework remains substantially unchanged. The Compensation Committee determined that the four corporate performance goals listed below reflect a broad measurement of corporate performance, including bottom-line profitability, top line revenue objectives and safety and soundness. The assessment of corporate goals was based on the reported financial results of the Company. Financial results are subject to adjustment at the discretion of the Compensation Committee and may exclude the impact of one-time extraordinary gains or losses, which may have the effect of either increasing or decreasing calculated payouts under the STI Plan. Once the minimum trigger is achieved, the incentive pool funding is determined based on Company performance compared against four performance goals. After reviewing the performance metrics under the STI Plan, the Compensation Committee did not make any changes to the 2023 performance metrics. The table below outlines the 2023 performance objectives and corporate performance results under the STI Plan:

  29. Company Performance Component (75% of annual incentive award)

    | Goals and Weighting | | Performance Goals | | | Actual | | | Company Goals (75%) | Goal Weight | Threshold | Target | Stretch | Actual Performance | % of Target | | Net Interest Margin, on a Tax-Equivalent Basis | 20% | 2.95% | 3.28% | 3.94% | 2.84% | 0% | | Expense Ratio | 20% | 2.35% | 2.25% | 2.00% | 2.28% | 85% | | Pre-Tax, Pre-Provision Income ($000s) | 20% | $22,480 | $28,100 | $33,720 | $20,500 | 0% | | Non-Performing Loans to Total Loans | 15% | 1.00% | 0.75% | 0.50% | 0.32% | 150% |

  30. Company Performance Component (75% of annual incentive award)

    The considerations in setting the 2023 corporate targets and evaluating performance are shown below.

  31. Net Interest Margin (NIM), on a Tax-Equivalent Basis

    Net Interest Margin (NIM), on a Tax-Equivalent Basis NIM, on a tax-equivalent basis, represents tax-equivalent net interest and dividend income as a percentage of average interest-earning assets. The target NIM, on a tax-equivalent basis, for 2023 was established at 3.28%, which was a decrease of five basis points from the 2022 actual results of 3.33%. During 2023, the Federal Reserve increased interest rates 425 basis points as an attempt to control the highest inflation in 40+ years. Management developed strategies to manage the balance sheet to offset the impact of the rapidly changing interest rate environment and protect the net interest margin. The NIM, on a tax-equivalent basis, was 2.84%, which did not meet the threshold performance goal and management did not earn a payout factor for the NIM performance metric.

  32. Individual Performance Component (25% of annual incentive awards)

    Individual Performance Component (25% of annual incentive awards) In addition to the corporate performance component, each 2023 STI award was determined based on individual performance. The individual component for each NEO, with the exception of Mr. Hagan, was assessed by Mr. Hagan based on each NEO’s annual performance evaluation and was reviewed and approved by the Compensation Committee. The review of Mr. Hagan’s individual component was based on the Compensation Committee’s and the full Board’s performance evaluation of Mr. Hagan. Multiple factors were considered in this assessment, including but not limited to: •Overall corporate performance; •Progress on key strategic initiatives; •Regulatory relationships and evaluations; •The performance of each individual’s business line or department; and •Extraordinary unplanned accomplishments outside of the planned annual goals but which significantly contributed to organizational success and increased shareholder value. The table below details the STI Plan opportunities and awards earned for each NEO for 2023:

  33. Individual Performance Component (25% of annual incentive awards)

    | | Annual Incentive Award Opportunity (Percent of Base Salary) | | | Annual Incentive Award Opportunity (Dollar Value) | | | 2023 Earned | | | NEO | Threshold | Target | Stretch | Threshold ($) | Target ($) | Stretch ($) | ($) | % of Target | | James C. Hagan | 22.5% | 45.0% | 67.5% | 157,792 | 315,584 | 473,377 | 243,000 | 77.0% | | Allen J. Miles, III | 15.0% | 30.0% | 45.0% | 54,585 | 109,171 | 163,756 | 84,061 | 77.0% | | Guida R. Sajdak | 15.0% | 30.0% | 45.0% | 48,764 | 97,528 | 146,292 | 75,097 | 77.0% |

  34. Individual Performance Component (25% of annual incentive awards)

    The Compensation Committee has the discretion to adjust any payouts to reflect the business environment and market conditions. After reviewing the Company’s performance, combined with its evaluation of the individual achievement of the NEOs, the Compensation Committee did not make any adjustments and authorized individual incentive payments for 2023 at 77.0% of target on January 17, 2024.

  35. Long-Term Incentive Plan

    Long-Term Incentive Plan The Company’s Long-Term Incentive Plan (the “LTI Plan”) is designed to provide key employees, including NEOs, with a reward opportunity that aligns the interests of the participants with those of the Company’s shareholders by focusing on the Company’s performance over a longer period of time and encouraging balance between growth and prudent risk-taking. The restricted stock awards, granted under the LTI Plan, have a retentive effect because they vest over a period of time, typically within three years. Vesting of the restricted stock may be accelerated under certain circumstances, such as the executive’s death or disability, or if an executive’s employment is terminated in connection with a change in control of the Company. The Compensation Committee sets and approves award targets as a percentage of base salary. The LTI Plan incentive pool funding ranges from 0% - 150% of target based on actual performance. The maximum award for any participant, in consideration of corporate and individual performance, is capped at 150% of target. Each year, in the first quarter, the Compensation Committee determines, at its discretion, the terms of the LTI Plan, the timing of the awards, the recipients who may be granted awards and the form and the amount of awards. The Compensation Committee works with its compensation consultant, Pearl Meyer, to continue to improve upon the LTI Plan framework with the following objectives: •Align executives with our shareholders by matching incentives with increases in shareholder value; •Attract and retain talented executives to drive the Company’s success; •Ensure sound risk management by providing a balanced view of performance and aligning rewards with the time horizon of risk; •Position the Company’s total compensation to be competitive with the market for meeting performance goals; and •Motivate and reward long-term sustained performance and avoid excessive risk taking.

  36. Long-Term Incentive Plan Awards for 2020-2022 Performance Period

    Long-Term Incentive Plan Awards for 2020-2022 Performance Period In 2020, the Compensation Committee selected Return on Average Equity (“ROAE”) and the Three-Year Cumulative Diluted Earnings per Share (“EPS”) as its long-term performance goals. The Committee believes that these measures are appropriate to evaluate performance over a three-year period. Each of these two measures were independently assigned a 50% weight for determining future performance against goals. The actual number of performance shares that vest was determined at the end of the three-year period, based upon the Company’s performance against the three-year goals and alignment to shareholder value. The grants were made and awarded as 50% performance-based shares and 50% time-based shares. The overall long-term incentive compensation for all NEOs remained unchanged from prior years. Mr. Hagan’s target was 30% of his base salary and Mr. Miles’ and Mrs. Sajdak’s targets remained at 20% of their respective base salaries. Grants for the performance period provided for the possibility of awards at a threshold, target and stretch level based on the Company’s performance. For each performance-based goal, achieving threshold performance pays at 50% of target value and achieving stretch performance pays at 150% of target value. To the extent earned at the end of the performance period, performance shares will be paid in the form of vested shares of common stock at a date determined by the Compensation Committee within seventy-five (75) days following the end of the performance period. The goals were based on the Company’s business strategic plan at the end of 2019. The goals motivated improved performance to align results to shareholders’ expectations.

  37. Long-Term Incentive Plan Awards for 2020-2022 Performance Period

    | Goal | Weight | Threshold | Target | Stretch | Actual | | Return on Equity | 50% | | | | | | 2020 | | 5.00% | 5.48% | 6.00% | 4.86% | | 2021 | | 5.62% | 6.24% | 6.86% | 10.64% | | 2022 | | 6.29% | 6.99% | 7.69% | 11.85% | | Three-Year Cumulative EPS | 50% | $1.50 | $1.65 | $1.80 | $2.65 |

  38. Long-Term Incentive Plan Awards for 2020-2022 Performance Period

    As of December 31, 2022, the three-year performance period for the 2020 LTI Plan ended. The 2020 LTI Plan included a “catch-up” provision allowing unearned performance-based shares from the 2020 and 2021 performance periods to be earned at the end of the three-year period, based on the final year performance. Of the 50,155 performance-based shares granted in 2020, based on achieving target, 59,268 performance-based shares vested on March 6, 2023, and were issued to eligible recipients based on achieving stretch. Of the total 59,268 performance-based shares that vested, Mr. Hagan earned 13,539 shares, Mr. Miles earned 4,970 shares and Mrs. Sajdak earned 4,398 shares. 2020 Performance Measure. The actual ROAE result for 2020 was 4.86%, and management missed the threshold of 5.00%. The 2020 shares within the 2020 LTI Plan were added to the “catch-up” provision. The 2020 Plan year included $7.8 million in provision for loan losses related to the uncertainty of the COVID-19 global pandemic. 2021 Performance Measure. The actual ROAE result for 2021 was 10.64%, and management exceeded stretch of 6.86%. In 2021, the provision for loan losses decreased $8.7 million from $7.8 million in 2021 to a credit for loan losses of $925,000. During the twelve months ended December 31, 2021, net interest income increased $8.7 million, or 13.6%, to $73.2 million, compared to the same period in 2020. For the twelve months ended December 31, 2021, non-interest income of $12.6 million increased $3.3 million, or 35.8%, compared to $9.3 million for the twelve months ended December 31, 2020. These increases were partially offset by an increase in non-interest expense of $3.2 million, or 6.2%, from the prior year. 2022 Performance Measure. The actual ROAE result for 2022 was 11.85%, and management exceeded stretch of 7.69%. During the twelve months ended December 31, 2022, average interest-earning assets increased $67.1 million, or 2.9%, and net interest income increased $6.0 million, or 8.3%, from the prior year. The 2020 Plan included a “catch-up” provision which allows unearned performance-based restricted shares from the first and second performance periods to be earned at the end of the three-year period based on final year performance. Therefore, the 2020 Plan paid out the performance-based shares at the stretch level of 150%.

  39. Long-Term Incentive Plan Awards for 2021-2023 Performance Period

    Long-Term Incentive Plan Awards for 2021-2023 Performance Period In 2021, the Compensation Committee selected ROAE and EPS as its long-term performance goals. The Committee believes that these measures are appropriate to evaluate performance over a three-year period. Each of these two measures were independently assigned a 50% weight for determining future performance against goals. The actual number of performance shares that vest will be determined at the end of the three-year period, depending upon the Company’s performance against the three-year goals and alignment to shareholder value. The grants were made and awarded as 50% performance-based shares and 50% time-based shares. The overall long-term incentive compensation for all NEOs remained unchanged from prior years. Mr. Hagan’s target was 30% of his base salary and Mr. Miles’ and Mrs. Sajdak’s targets remained at 20% of their respective base salaries. Grants for the performance period provided for the possibility of awards at a threshold, target and stretch level based on the Company’s performance. For each performance-based goal, achieving threshold performance pays at 50% of target value and achieving stretch performance pays at 150% of target value. To the extent earned at the end of the performance period, performance shares will be paid in the form of vested shares of common stock at a date determined by the Compensation Committee within seventy-five (75) days following the end of the performance period. The framework for establishing specific goals for the 2021 long-term incentive grant was similar to previous years. The goals were based on the Company’s business strategic plan at the end of 2020. The goals motivated improved performance to align results to shareholders’ expectations. The performance goals and weighting for the period are set forth below:

  40. Long-Term Incentive Plan Awards for 2021-2023 Performance Period

    | Goal | Weight | Threshold | Target | Stretch | Actual | | Return on Equity | 50% | | | | | | 2021 | | 5.63% | 6.25% | 7.50% | 10.64% | | 2022 | | 5.85% | 6.50% | 7.80% | 11.85% | | 2023 | | 6.08% | 6.75% | 8.10% | 6.47% | | Three-Year cumulative EPS | 50% | $1.58 | $1.97 | $2.36 | $2.90 |

  41. Long-Term Incentive Plan Awards for 2021-2023 Performance Period

    As of December 31, 2023, the three-year performance period for the 2021 LTI Plan ended. The 2021 LTI Plan included a “catch-up” provision allowing unearned performance-based shares from the 2021 and 2022 performance periods to be earned at the end of the three-year period based on the final year performance. Of the 50,205 performance-based shares granted in 2021, based on achieving target, 69,376 performance-based shares vested on March 5, 2024, and were eligible to be issued to recipients based on achieving stretch. Of the total 69,376 performance-based shares that vested, Mr. Hagan earned 14,715 shares, Mr. Miles earned 5,252 shares and Mrs. Sajdak earned 4,691 shares. 2021 Performance Measure. The actual ROAE result for 2021 was 10.64%, and management exceeded stretch of 7.50%. In 2021, the provision for loan losses decreased $8.7 million from $7.8 million in 2020 to a credit for loan losses of $925,000. During the twelve months ended December 31, 2021, net interest income increased $8.7 million, or 13.6%, to $73.2 million, compared to the same period in 2020. For the twelve months ended December 31, 2021, non-interest income of $12.6 million increased $3.3 million, or 35.8%, compared to $9.3 million for the twelve months ended December 31, 2020. These increases were partially offset by an increase in non-interest expense of $3.2 million, or 6.2%, from the prior year. 2022 Performance Measure. The actual ROAE result for 2022 was 11.85%, and management exceeded stretch of 7.80%. During the twelve months ended December 31, 2022, average interest-earning assets increased $67.1 million, or 2.9%, and net interest income increased $6.0 million, or 8.3%, from the prior year. 2023 Performance Measure. The actual ROAE result for 2023 was 6.47%, and management exceeded threshold of 6.08%, but did not meet the target of 6.75%. During the twelve months ended December 31, 2023, net interest income decreased $11.3 million, or 14.3%, to $67.9 million, compared to $79.2 million for the twelve months ended December 31, 2022. The decrease in net interest income was due to an increase in interest expense of $26.5 million, partially offset by an increase in interest and dividend income of $15.2 million, or 17.7%. During the twelve months ended December 31, 2023, average interest-earning assets increased $10.3 million, or 0.4%, to $2.4 billion compared to the twelve months ended December 31, 2022, primarily due to an increase in average loans of $52.6 million, or 2.7%; and an increase in average other investments of $2.1 million, or 20.8%, partially offset by a decrease in average securities of $39.2 million, or 9.6%, and a decrease in average short-term investments, consisting of cash and cash equivalents, of $5.3 million, or 20.4%. The 2021 Plan included a “catch-up” provision which allows unearned performance-based restricted shares from the first and second performance periods to be earned at the end of the three-year period based on final year performance. Therefore, the 2021 Plan paid out the performance-based shares at the stretch level of 150%.

  42. Long-Term Incentive Plan Awards for 2022-2024 Performance Period

    Long-Term Incentive Plan Awards for 2022-2024 Performance Period In 2022, the Compensation Committee selected ROAE and EPS as its long-term performance goals. The Committee believes that these measures are appropriate to evaluate performance over a three-year period. Each of these two measures were independently assigned a 50% weight for determining future performance against goals. The actual number of performance shares that vest will be determined at the end of the three-year period, depending upon the Company’s performance against the three-year goals and alignment to shareholder value. The grants were made and awarded as 50% performance-based shares and 50% time-based shares. Mr. Hagan’s target was increased to 35% of his base salary, and Mr. Miles’ and Mrs. Sajdak’s targets remained at 20% of their respective base salaries. Grants for the performance period provided for the possibility of awards at a threshold, target and stretch level based on the Company’s performance. LTI Plan grants with respect to the 2022-2024 performance period have not yet been earned. For each performance-based goal, achieving threshold performance pays at 50% of target value, and achieving stretch performance pays at 150% of target value. The 2022 Plan includes a “catch-up” provision which allows unearned performance-based restricted shares from the first and second performance periods to be earned at the end of the three year period based on final year performance. To the extent earned at the end of the performance period, performance shares will be paid in the form of vested shares of common stock at a date determined by the Compensation Committee within seventy-five (75) days following the end of the performance period. The framework for establishing specific goals for the 2022 long-term incentive grant was similar to previous years. The goals were based on the Company’s business strategic plan at the end of 2021. The goals motivated improved performance to align results to shareholders’ expectations. The performance goals and weighting for the period are set forth below:

  43. Long-Term Incentive Plan Awards for 2022-2024 Performance Period

    | Goal | Weight | Threshold | Target | Stretch | | Return on Equity | 50% | | | | | 2022 | | 7.79% | 8.20% | 8.61% | | 2023 | | 7.93% | 8.35% | 8.77% | | 2024 | | 8.03% | 8.45% | 8.87% | | Three-Year cumulative EPS | 50% | $2.35 | $2.61 | $2.85 |

  44. Long-Term Incentive Plan Awards for 2022-2024 Performance Period

    In 2023, the Compensation Committee selected ROAE and EPS as its long-term performance goals. The Committee believes that these measures are appropriate to evaluate performance over a three-year period. Each of these two measures were independently assigned a 50% weight for determining future performance against goals. The actual number of performance shares that vest will be determined at the end of the three-year period, depending upon the Company’s performance against the three-year goals and alignment to shareholder value. The grants were made and awarded as 50% performance-based shares and 50% time-based shares. Mr. Hagan’s target was 35% of his base salary and Mr. Miles’ and Mrs. Sajdak’s targets were increased to 25% of their respective base salaries. Grants for the performance period provided for the possibility of awards at a threshold, target and stretch level based on the Company’s performance. LTI Plan grants with respect to the 2023-2025 performance period have not yet been earned. For each performance-based goal, achieving threshold performance pays at 50% of target value, and achieving stretch performance pays at 150% of target value. The 2023 Plan includes a “catch-up” provision which allows unearned performance-based restricted shares from the first and second performance periods to be earned at the end of the three-year period based on final year performance. To the extent earned at the end of the performance period, performance shares will be paid in the form of vested shares of common stock at a date determined by the Compensation Committee within seventy-five (75) days following the end of the performance period. The framework for establishing specific goals for the 2023 long-term incentive grant was similar to previous years. The goals were based on the Company’s business strategic plan at the end of 2022. The goals motivated improved performance to align results to shareholders’ expectations. The performance goals and weighting for the period are set forth below:

  45. Long-Term Incentive Plan Awards for 2022-2024 Performance Period

    | Goal | Weight | Threshold | Target | Stretch | | Return on Equity | 50% | | | | | 2023 | | 8.00% | 8.45% | 8.85% | | 2024 | | 8.75% | 9.25% | 9.75% | | 2025 | | 9.00% | 9.50% | 10.00% | | Three-Year cumulative EPS | 50% | $2.39 | $2.65 | $2.89 |

  46. Long-Term Incentive Plan Awards for 2022-2024 Performance Period

    The table below outlines the awards value and the number of shares granted to each Named Executive Officer in 2023:

  47. Long-Term Incentive Plan Awards for 2022-2024 Performance Period

    | | 2023 Equity Award (Performance-Based Shares) # | 2023 Equity Award (Time-Based Shares) # | 2023 Grant Date Fair Value $ | | James C. Hagan | 12,493 | 12,493 | 247,112 | | Allen J. Miles, III | 4,629 | 4,629 | 91,562 | | Guida R. Sajdak | 4,135 | 4,135 | 81,790 |

  48. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation

  49. Employment Agreements and Change of Control Agreements

    Employment Agreements and Change of Control Agreements The Committee believes that our continued success depends, to a significant degree, on the skills and competence of certain senior officers. The employment agreements are intended to ensure that we continue to maintain and retain experienced senior management. We currently have employment agreements with our President and Chief Executive Officer, Mr. Hagan; our Executive Vice President and Chief Lending Officer, Mr. Miles and our Executive Vice President and Chief Financial Officer, Mrs. Sajdak, in order to retain such executives. The employment agreements of Messrs. Hagan and Miles and Mrs. Sajdak provide for an initial three-year term subject to separate one-year extensions as approved by the Board at the end of each applicable fiscal year. The employment agreements provide for a base salary to be established annually by the Board and for annual increases, as well the right to participate in and receive benefits under any and all qualified or non-qualified retirement, profit-sharing or stock bonus plans, all group life, health, accident and long-term disability insurance plans, and any other benefit and compensation plans as may from time to time be maintained by the Company and the Bank. Each employment agreement contains a covenant not to compete against the Company and the Bank, their parent, affiliates or subsidiaries during the term of employment and thereafter for a period of twelve months. In addition, each employment agreement contains a standard non-solicitation covenant for a period of one year following termination of employment, as well as a covenant to protect the Company’s and the Bank’s confidential information. The employment agreements also provide for severance payments in the event an NEO is terminated without “cause” (as such term is defined in the employment agreements) regardless of whether such termination is in connection with a change in control, or voluntarily terminates employment under certain specific “good reason” circumstances following a change in control. Such “good reason” circumstances include a material reduction in authorities, duties or responsibilities or assignment of duties inconsistent with current responsibilities, a material reduction in salary or other benefits, and reassignment to a location greater than 25 miles from the current location. Following such a termination of employment, each NEO will be entitled to receive a lump sum cash payment equal to the sum of: (i) three times his/her highest annual rate of salary for the prior three years, plus (ii) three times the estimated annual incentive bonus payments, plus (iii) the excess of aggregate benefits the NEO would be entitled to for tax-qualified and non-tax-qualified defined benefit plans for three years, plus (iv) the amount of employer contributions that would be credited to all tax-qualified and non-tax-qualified defined contribution plans for three years. The NEOs are also eligible to receive continued group medical, dental, and vision coverage on the same terms and conditions for thirty-six months. Additionally, accelerated vesting of outstanding time-based unvested restricted stock awards will occur and restrictions will lapse. Outstanding performance-based awards will vest and restrictions will lapse, with the performance goals measured at target performance.

  50. Benchmarking Data and Use of Compensation Consultants

    Benchmarking Data and Use of Compensation Consultants The Compensation Committee believes that utilization of appropriate benchmarks for compensation analyses is an effective method for evaluating executive and director compensation. Accordingly, approximately every three years, the Compensation Committee engages the compensation consultant to conduct market competitive reviews, which, generally include an assessment of compensation compared to market (e.g., industry-specific surveys and proxy peer group, where applicable), recommendations for total compensation opportunity guidelines (e.g., base salary, annual and long-term incentive targets) and a high-level assessment of performance relative to peers. The Compensation Committee uses this information to determine appropriate salary and incentive levels for executive officers and directors. The competitive review was conducted in 2021 for reference with 2022 to 2024 pay decisions. This peer group was selected in December 2021 and included financial institutions of generally similar asset size and regional location. At that time, the Company was positioned approximately at the median of the peer group in terms of total assets, with asset size ranging from $1.8 billion to $5.3 billion. All banks were publicly-traded financial institutions located within the Northeast. The peer group used in the report presented for consideration of 2023 compensation decisions consisted of the following institutions:

  51. Benchmarking Data and Use of Compensation Consultants

    | Compensation Peer Group(1) | | | | Financial Institutions, Inc. | Peoples Financial Services Corp. | Bankwell Financial Group, Inc. | | CNB Financial Corporation | Hingham Institution for Savings | Codorus Valley Bancorp, Inc. | | Enterprise Bancorp, Inc. | Orrstown Financial Services, Inc. | Evans Bancorp, Inc. | | Cambridge Bancorp2 | ACNB Corporation | Norwood Financial Corp. | | Arrow Financial Corporation | The First Bancorp, Inc. | Penns Woods Bancorp, Inc. | | Bar Harbor Bankshares | Chemung Financial Corporation | ESSA Bancorp, Inc. | | Mid Penn Bancorp, Inc. | Citizens & Northern Corporation | |

  52. Benchmarking Data and Use of Compensation Consultants

    (1) Peer group listed in order of asset size from largest to smallest. (2)Cambridge Bancorp entered into an agreement with Eastern Bankshares, Inc. during 2023 It is expected that Pearl Meyer will continue to support the Compensation Committee in its executive compensation actions.

  53. Summary Compensation Table

    Summary Compensation Table The following table sets forth information regarding compensation awarded to or earned by our NEOs for service during each of the last three completed fiscal years, as applicable:

  54. Summary Compensation Table

    | Name and Principal Position | Year | Salary(1) ($) | Stock Awards(2) ($) | Non-Equity Incentive Plan Compensation(3) ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(4) ($) | All Other Compensation(5) ($) | Total ($) | | James C. Hagan President and Chief Executive Officer | 2023 | 701,299 | 247,112 | 243,000 | — | 224,608 | 1,416,019 | | | 2022 | 640,705 | 225,673 | 382,408 | — | 75,591 | 1,324,377 | | | 2021 | 588,691 | 177,625 | 229,133 | 147,991 | 67,498 | 1,210,938 | | Allen J. Miles, III EVP and Chief Lending Officer | 2023 | 363,902 | 91,562 | 84,061 | — | 58,338 | 597,863 | | | 2022 | 334,526 | 67,195 | 133,109 | — | 26,092 | 560,922 | | | 2021 | 315,810 | 63,401 | 81,947 | 190,414 | 19,475 | 671,047 | | Guida R. Sajdak EVP Chief Financial Officer and Treasurer | 2023 | 325,094 | 81,790 | 75,097 | — | 53,360 | 535,341 | | | 2022 | 298,850 | 60,035 | 118,914 | — | 25,321 | 503,120 | | | 2021 | 281,934 | 56,629 | 73,157 | — | 20,860 | 432,580 |

  55. Summary Compensation Table

    (1)The figures shown for salary represent amounts earned for the fiscal year, whether or not actually paid during such year. (2)Reflects the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 with respect to restricted stock awards granted to our NEOs. For more information concerning the assumptions used for these calculations, please refer to the notes to the financial statements contained in the 2023 Annual Report on Form 10K. The stock award column does not include the value of dividends paid on unvested restricted stock, which are included in the Summary Compensation Table under the caption “All Other Compensation.” (3)Amounts shown in this column reflect cash awards earned under the STI Plan, whether or not paid during such calendar year. Amounts payable under the STI Plan were paid in February of the following calendar year. (4)Prior to its termination in 2023, amounts in this column represent the increase (if any) for each respective year in the present value of the individual’s accrued benefit (whether or not vested) under each tax-qualified and non-qualified actuarial or defined benefit plan calculated by comparing the present value of each individual’s accrued benefit under each such plan in accordance with FASB ASC Topic 715, Retirement Benefits, as of the plan’s measurement date in such year to the present value of the individual’s accrued benefit as of the plan’s measurement date in the prior fiscal year. With respect to Mr. Hagan and Mr. Miles, this column includes the aggregate change in the accumulated benefits under the DB Plan for 2021. For 2022, the aggregate change in actuarial present value of accumulated benefits for Mr. Hagan was a decrease of $497,169. For 2022, the aggregate change in actuarial present value of accumulated benefits for Mr. Miles was a decrease of $473,536. However, applicable SEC rules do not permit the Company to report a negative number in this column; therefore, these amounts are not included in the Summary Compensation Table under the caption “Change in Pension Value and Nonqualified Deferred Compensation Earnings” for 2022. Mrs. Sajdak did not participate in the DB Plan. (5)Amounts in this column for the year 2023 are set forth in the table below and include life insurance premiums, 401(k) Plan matching contributions, ESOP contributions, dividends on unvested restricted stock, contributions under the Benefit Restoration Plan, and contributions under the NQDC Plan. The NEOs participate in certain group life, health, disability insurance and medical reimbursement plans, not disclosed in the Summary Compensation Table, that are generally available to salaried employees and do not discriminate in scope, terms and operation. In addition, we provide certain non-cash perquisites and personal benefits to each NEO that do not exceed $10,000 in the aggregate for any individual and are not included in the reported figures.

  56. Summary Compensation Table

    | | Life Insurance Premiums ($) | 401(k) Matching Contributions ($) | ESOP Contributions ($) | Dividends on Unvested Restricted Stock ($) | Contributions under the Benefit Restoration Plan ($) | Contributions under the NQDC Plan ($) | Total ($) | | James C. Hagan | 18,070 | 12,361 | 12,614 | 14,898 | 73,665 | 93,000 | 224,608 | | Allen J. Miles, III | — | 13,200 | 12,460 | 5,307 | — | 27,371 | 58,338 | | Guida R. Sajdak | — | 12,850 | 12,137 | 4,714 | — | 23,659 | 53,360 |

  57. Compensation Actually Paid

    Compensation Actually Paid As required by Item 402(v) of Regulation S-K, the information below reflects the relationship between executive compensation actually paid by us (“CAP”) to our CEO, as principal executive officer, and other non-CEO NEOs (“Other NEOs”) and our financial performance for the years ended December 31, 2023, 2022 and 2021. The disclosure included in this section is required by SEC rules and does not necessarily align with how the Company or the Compensation Committee views the link between the Company’s performance and the compensation of its NEOs. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years presented. For a discussion of how the Company views its executive compensation structure, including alignment with Company performance, see “Compensation Discussion and Analysis” beginning on page 26 of this Proxy Statement. The following table sets forth information regarding actual compensation paid to our CEO and Other NEOs for service during each of the last three completed fiscal years, as applicable.

  58. Compensation Actually Paid

    | Year (a)(1) | Summary Compensation Total for CEO ($) (b) (2)(3) | Compensation Actually Paid to CEO ($) (c) (2)(4) | Average Summary Compensation Total for Other NEOs ($) (d) (2)(5) | Average Compensation Actually paid to Other NEOs ($) (e)(2)(4) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return ($) (f)(6) | Net Income ($)(g)(7) | | 2023 | 1,416,019 | 1,272,230 | 566,602 | 516,706 | 142.93 | 15,068,000 | | 2022 | 1,324,377 | 1,358,362 | 532,021 | 573,050 | 144.48 | 25,887,000 | | 2021 | 1,210,938 | 1,093,348 | 551,814 | 502,203 | 130.18 | 23,699,000 |

  59. Compensation Actually Paid

    (1)As a smaller reporting company, the Company is required to provide information for the prior three completed fiscal years. (2)For all years presented our CEO was James C. Hagan and our Other NEOs consisted of Allen J. Miles, III and Guida R. Sajdak. (3)Column (b) shows the amount for the CEO included in the Summary Compensation Table. (4)Columns (c) and (e) show the total compensation paid to the Company’s CEO and average compensation paid to the Other NEOs, respectively, for the applicable years adjusted by changes in equity award values and change in pension value, if any, prior to its termination in 2023. The following table sets forth the adjustments made to the amounts disclosed in columns (c) and (e) to arrive at compensation “actually paid” to our CEO and Other NEOs during each of the years disclosed:

  60. Compensation Actually Paid

    | | 2023 | | 2022 | | 2021 | | | | CEO ($) | Other NEOs ($) | CEO ($) | Other NEOs ($) | CEO ($) | Other NEOs ($) | | Summary Compensation Total Compensation | 1,416,019 | 566,602 | 1,324,377 | 532,021 | 1,210,938 | 551,814 | | Adjustments to determine compensation “actually paid” for CEO and Other NEOs | | | | | | | | Deduction for amounts reported under the “Stock Awards” column in the Summary Compensation Table | (247,112) | (86,676) | (225,673) | (63,615) | (177,625) | (60,015) | | Increase for fair value of awards granted during the year that remain unvested as of year-end (8) | 75,330 | 26,420 | 195,680 | 55,161 | 155,788 | 52,639 |

  61. Compensation Actually Paid

    | | 2023 | | 2022 | | 2021 | | | | CEO ($) | Other NEOs ($) | CEO ($) | Other NEOs ($) | CEO ($) | Other NEOs ($) | | Increase for fair value of awards granted during the year that vested during year | 37,107 | 13,019 | 38,663 | 10,898 | 30,782 | 10,398 | | (Decrease)/increase for change in fair value from prior year-end to current year-end of awards granted prior to year that were outstanding and unvested as of year-end | (11,526) | (3,628) | 16,308 | 5,562 | 37,078 | 12,971 | | Increase for change in fair value from prior year-end to vesting date of awards granted prior to year that vested during the year | 2,412 | 969 | 9,007 | 3,140 | 13,316 | 4,685 | | Decrease for change in fair value from prior year to vesting date of awards granted prior to year that were forfeited during the year | — | — | — | — | (28,938) | (10,301) | | Deduction for amounts reported under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column in the Summary Compensation Table | — | — | — | — | (147,991) | (95,207) | | Service cost for CEO and Other NEOs with accumulated benefit under all defined benefit pension plans | — | — | — | 29,883 | — | 35,219 | | Total Adjustments to Summary Compensation | (143,789) | (49,896) | 33,985 | 41,029 | (117,590) | (49,611) | | Total Compensation Actually Paid | 1,272,230 | 516,706 | 1,358,362 | 573,050 | 1,093,348 | 502,203 |

  62. Compensation Actually Paid

    (5)Column (d) shows the average amount of the total compensation shown in the Summary Compensation Table for the Other NEOs for the applicable years. (6) The calculation for each year is based on a fixed investment of $100 from the market close on the last trading day before the earliest year in the PVP table through the end of each applicable year in the table, assuming reinvestment of dividends. The calculation begins on December 31, 2020, and, in the third year, extends through December 31, 2023. (7)Column (g) provides the Company’s net income for each year. (8)The decrease in fair value of awards granted during the year and unvested as of year-end for 2023 reflects the estimated value of performance-based shares to be earned under the Company’s 2023 LTI over the three-year performance period based on performance over the first year ending December 31, 2023. As shown in the following chart, the Company’s net income decreased $10.8 million, or 41.8%, from 2022 to 2023, while the CEO’ CAP decreased 6.3% and Other NEOs’ CAP decreased 9.8%, during the same period. This is due, in large part, to the emphasis the Company places on short-term and long-term equity incentives, which are tied to the Company’s financial performance. The Company does not use net income to determine compensation levels or incentive plan payouts. As shown in the following chart, the Company’s TSR decreased 1.0%, or 0.7%, from 2022 to 2023, while the CEO’s CAP decreased 6.3% and Other NEOs’ CAP decreased 9.8%, respectively. This is due primarily to the Company’s use of short-term and long-term equity incentives, which are tied directly to the Company’s financial performance. The Company does not use TSR to determine compensation levels or incentive plan payouts.

  63. CEO Pay Ratio Disclosure

    CEO Pay Ratio Disclosure As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing this disclosure regarding the relationship of the annual total compensation of the individual identified as the median paid employee of our Company and the annual total compensation of James C. Hagan, our President and Chief Executive Officer. The individual identified as the median-compensated employee was determined using a census of all employees as of December 31, 2023, which totaled 348 employees, excluding the CEO. In order to identify the median compensated employee, we included compensation reported in Box 5 of Form W-2 for the full year of 2023, annualizing pay for those full-time and part-time employees who were hired during 2023. The annual total compensation for the median employee was calculated using the same methodology shown for the CEO in the “Summary Compensation Table” on page 39. Based on this methodology, the annual total compensation of the CEO for 2023 was $1,416,019 and the annual total compensation of the employee identified at median for 2023 was $53,143. The ratio of these amounts was 26.6 to 1. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

  64. Outstanding Equity Awards at Fiscal Year End

    Outstanding Equity Awards at Fiscal Year End The following table provides information about outstanding equity awards under the Company’s equity compensation plans at December 31, 2023, whether granted in 2023 or earlier. The NEOs did not have any outstanding stock option awards.

  65. Outstanding Equity Awards at Fiscal Year End

    | Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | | James C. Hagan | 05/20/2021 | — | — | 14,715 | 132,435 | | | 03/02/2022 | 4,212 | 37,908 | 8,174 | 73,566 | | | 03/08/2023 | 8,370 | 75,330 | 6,247 | 56,219 | | Allen J. Miles, III | 05/20/2021 | — | — | 5,252 | 47,268 | | | 03/02/2022 | 1,254 | 11,286 | 2,434 | 21,906 | | | 03/08/2023 | 3,101 | 27,909 | 2,315 | 20,831 | | Guida R. Sajdak | 05/20/2021 | — | — | 4,691 | 42,219 | | | 03/02/2022 | 1,121 | 10,089 | 2,174 | 19,566 | | | 03/08/2023 | 2,770 | 24,930 | 2,068 | 18,608 |

  66. Outstanding Equity Awards at Fiscal Year End

    (1)The market values of these shares are based on the closing market price of the Company’s common stock on the NASDAQ Stock Market of $9.00 on December 29, 2023. (2) Shares granted on May 20, 2021, were under the Company’s LTI Plan, are time-based and vest ratably over a three-year period beginning December 31, 2021. Shares granted on March 2, 2022, were under the Company’s LTI Plan, are time-based and vest ratably over a three-year period beginning December 31, 2022. Shares granted on March 8, 2023, were under the Company’s LTI Plan, are time-based and vest ratably over a three-year period beginning December 31, 2023. (3) Shares granted on May 20, 2021, were under the Company’s LTI Plan, are performance-based and are subject to the achievement of annual 2021 LTI performance metrics before vesting is realized after a three-year period ending December 31, 2023. Shares that have not yet vested under the 2021 LTI reflect the amount of shares earned as of the end of the measurement period ending December 31, 2023 based on achieving stretch. Shares granted on March 2, 2022, were under the Company’s LTI Plan, are performance-based and are subject to the achievement of annual 2022 LTI performance metrics before vesting is realized after a three-year period ending December 31, 2024. Shares that have not yet vested under the 2022 LTI are shown based on achieving stretch for the performance period ending December 31, 2022, and threshold for the performance period ending December 31, 2023. Shares granted on March 8, 2023, were under the Company’s LTI Plan, are performance-based and are subject to the achievement of annual 2023 LTI performance metrics before vesting is realized after a three-year period ending December 31, 2025. Shares that have not yet vested under the 2023 LTI are shown based on achieving threshold.

  67. Option Exercises and Stock Vesting

    Option Exercises and Stock Vesting The following table sets forth the stock awards that vested for the NEOs during the last fiscal year. The NEOs did not have any outstanding stock option awards.

  68. Option Exercises and Stock Vesting

    | Name | Stock Awards | | | | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(1) ($) | | James C. Hagan | 25,372 | 239,943 | | Allen J. Miles, III | 9,009 | 85,353 | | Guida R. Sajdak | 8,007 | 75,843 |

  69. Option Exercises and Stock Vesting

    (1)The figure shown for stock awards includes the amount realized during the fiscal year upon the vesting of restricted stock, based on the closing sales price for a share of our common stock on the vesting date. Unvested restricted stock may not be transferred for value.

  70. Pension Benefits

    Pension Benefits On July 26, 2022, the Board of Directors approved the termination of the Westfield Bank Pension Plan (the “DB Plan”), which became effective as of October 31, 2022. As a result of the decision to terminate the DB Plan during 2022, all participants became fully vested in their accrued benefit, including Messrs. Hagan and Miles. On April 11, 2023, the DB Plan Administrator made an additional cash contribution of $1.3 million in order to fully fund the DB Plan on a plan termination basis, and on April 14, 2023, the DB Plan Administrator funded $6.3 million to purchase a group annuity contract to transfer its remaining liabilities under the DB Plan for those participants who did not opt for a one-time lump sum payment. As of June 2, 2023, all DB Plan assets were fully liquidated. The following table provides details of the payments made during the last fiscal year for Messrs. Hagan and Miles under the DB Plan resulting from the termination of the DB Plan. Payments made to Messrs. Hagan and Miles during 2023 were in the form of a direct rollover resulting from the termination of the DB Plan. As of June 2, 2023, the DB Plan’s assets were fully liquidated. Mrs. Sajdak did not participate in the DB Plan.

  71. Pension Benefits

    | Name | Plan Name | Number of Years Credited Service (1) (#) | Present Value of Accumulated Benefit (1) ($) | Payments During Last Fiscal Year (2) ($) | | James C. Hagan | Westfield Bank Pension Plan | — | — | 1,227,742 | | Allen J. Miles, III | Westfield Bank Pension Plan | — | — | 1,125,952 |

  72. Pension Benefits

    (1)The figures shown are determined as of the DB Plan’s measurement date during 2023 under FASB ASC Topic 715, Retirement Benefits, for purposes of our audited financial statements. For the discount rate and other assumptions used for this purpose, please refer to Note 10 in the Notes to Consolidated Financial Statements attached to the Annual Report on Form 10-K for the year ended December 31, 2023. (2)The payments made during the last fiscal year to Messrs. Hagan and Miles represent the present value of accumulated benefits paid in the form of a direct rollover upon the DB Plan’s termination. DB Plan assets were fully liquidated as of June 2, 2023.

  73. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  74. Deferred Compensation Plan

    | Name | Fees Earned or Paid in Cash(1) ($) | Equity Retainer Stock Grant(2) ($) | All Other Compensation(3) ($) | Total Annual Compensation ($) | | Laura Benoit | 31,000 | 20,000 | 425 | 51,425 | | Donna J. Damon | 29,500 | 20,000 | 425 | 49,925 | | Gary G. Fitzgerald | 36,500 | 20,000 | 425 | 56,925 | | William D. Masse | 35,000 | 20,000 | 425 | 55,425 | | Lisa G. McMahon | 72,300 | 20,000 | 425 | 92,725 | | Gregg F. Orlen | 33,500 | 20,000 | 425 | 53,925 |

  75. Deferred Compensation Plan

    | Name | Fees Earned or Paid in Cash(1) ($) | Equity Retainer Stock Grant(2) ($) | All Other Compensation(3) ($) | Total Annual Compensation ($) | | Paul C. Picknelly | 31,000 | 20,000 | 425 | 51,425 | | Steven G. Richter | 50,300 | 20,000 | 425 | 70,725 | | Philip R. Smith | 48,800 | 20,000 | 425 | 69,225 |