BERKSHIRE HILLS BANCORP INC

Direct compensation consists of three main components: Base Salary, cash based Short-Term Incentive (“STI”), and stock-based Long-Term Incentive (“LTI”). The total of these three components is referred to as Direct Compensation. Total compensation includes a fourth component of Other Compensation which includes Benefits and Perquisites. Incentive-based compensation includes the use of non-GAAP performance measures. For a reconciliation of non-GAAP measures to their most directly comparable GAAP financial measures, please see Appendix A. Compensation program elements and pay decisions are determined in a balanced framework to achieve program objectives.