DIRECTORS' DEFERRED COMPENSATION PLAN OF WESTFIELD FINANCIAL, INC.

Executive Compensation Plan Agreement

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Title: DIRECTORS' DEFERRED COMPENSATION PLAN OF WESTFIELD FINANCIAL, INC.
Governing Law: Massachusetts Date: 12/22/2005
Industry: SandLs/Savings Banks Sector: Financial

Exhibit 10.7

DIRECTORS' DEFERRED COMPENSATION PLAN

WESTFIELD FINANCIAL, INC.

_____________________________

Adopted on December 20, 2005

Effective as of December 20, 2005

<PAGE>

TABLE OF CONTENTS

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Article I

Definitions

Section 1.1 Acceleration Event 1

Section 1.2 Administrator 1

Section 1.3 Beneficiary 1

Section 1.4 Board 1

Section 1.5 Code 1

Section 1.6 Company 1

Section 1.7 Change in Control Event 1

Section 1.8 Cash Compensation 1

Section 1.9 Committee 1

Section 1.10 Compensation 1

Section 1.11 Disability 2

Section 1.12 Effective Date 2

Section 1.13 Equity Compensation 2

Section 1.14 Fair Market Value 2

Section 1.15 Investment Benchmark 2

Section 1.16 ISO Share 2

Section 1.17 Memorandum Account 3

Section 1.18 Memorandum Subaccount 3

Section 1.19 Non-Employee Director 3

Section 1.20 Option-Related Compensation 3

Section 1.21 Participant 3

Section 1.22 Participating Company 3

Section 1.23 Phantom Share 3

Section 1.24 Plan 3

Section 1.25 Previously Acquired Share 3

Section 1.26 Share 3

Section 1.27 Service Recipient 3

Section 1.28 Unforeseeable Emergency 4

Article II

Participation

Section 2.1 Election to Participate 4

Section 2.2 Election to Defer Cash Compensation 4

Section 2.3 Election to Defer Equity Compensation 5

Section 2.4 Election to Defer Option-Related Compensation 5

Section 2.5 Changes in Participation 5

Section 2.6 Revocability of 2005 Elections 6

<PAGE> i

Article III

Accounting for Deferred Amounts

Section 3.1 In General 6

Section 3.2 Adjustments to Memorandum Accounts 7

Section 3.3 Vesting 8

Article IV

Trust

Section 4.1 Establishment of Trust 8

Section 4.2 Contributions to Trust; Investments 9

Section 4.3 Unfunded Character of Plan 9

Article V

Life Insurance

Section 5.1 Authority to Purchase Life Insurance 9

Section 5.2 Cooperation to Effect Purchases 9

Section 5.3 Ownership of Policies 10

Section 5.4 Effect of Termination of Participation 10

Article VI

Distributions

Section 6.1 Early Distributions 10

Section 6.2 Scheduled Distributions to Participants 11

Section 6.3 Distributions to Beneficiaries 12

Section 6.4 Mandatory Cashout of Small Balances 13

Section 6.5 Restrictions on Payments to Key Employees 13

Article VII

Administration

Section 7.1 Administrator 13

Section 7.2 Committee Responsibilities 14

Section 7.3 Claims Procedure 15

Section 7.4 Claims Review Procedure 15

Section 7.5 Other Administrative Provisions 16

Article VIII

Amendment And Termination

Section 8.1 Amendment by the Company 16

Section 8.2 Termination 17

Section 8.3 Amendment or Termination by Other Companies 17

<PAGE> ii

Article IX

Miscellaneous Provisions

Section 9.1 Notice and Election 18

Section 9.2 Construction and Language 18

Section 9.3 Headings 18

Section 9.4 Non-Alienation of Benefits 18

Section 9.5 Indemnification 19

Section 9.6 Severability 19

Section 9.7 Waiver 19

Section 9.8 Governing Law 19

Section 9.9 Withholding 19

Section 9.10 No Deposit Account 20

Section 9.11 Rights of Participants 20

Section 9.12 Status of Plan Under ERISA 20

Section 9.13 Successors and Assigns 20

Section 9.14 Non-dilution Provisions 20

Section 9.15 Compliance with Section 409A of the Code 21

<PAGE> iii

DIRECTORS' DEFERRED COMPENSATION PLAN

-------------------------------------

WESTFIELD FINANCIAL, INC.

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Article I

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Definitions

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The following definitions shall apply for the purposes of this Plan unless

a different meaning is clearly indicated by the context:

Section 1.1 Acceleration Event means, with respect to a

Participant, any of the events described in section 6.1 on the basis of

which the Administrator may permit acceleration of the payment of the

balance credited to the Participant's Memorandum Account.

Section 1.2 Administrator means any person, committee, corporation

or organization appointed by the Committee to perform the responsibilities

assigned to the Administrator hereunder.

Section 1.3 Beneficiary means the person or persons designated by a

Participant under section 6.3 of the Plan.

Section 1.4 Board means the Board of Directors of the Company.

Section 1.5 Code means the Internal Revenue Code of 1986 (including

the corresponding provisions of any succeeding law).

Section 1.6 Company means Westfield Financial, Inc. or any

successor thereto.

Section 1.7 Change in Control Event means, with respect to a

Participant: (a) a change in ownership of the Participant's Service

Recipient; (b) a change in effective control of the Participant's Service

Recipient; or (c) a change in the ownership of a substantial portion of the

assets of the Participant's Service Recipient. The existence of a Change

in Control Event shall be determined by the Administrator in accordance

with section 409A of the Code and the regulations thereunder.

Section 1.8 Cash Compensation means the monetary compensation

payable to a Non-Employee Director for service as a member of the board of

directors of a Participating Company, including retainer payments and fees

for attendance at board and committee meetings.

Section 1.9 Committee means the Compensation Committee of the

Board.

Section 1.10 Compensation means, during any period, the

compensation payable to a Non-Employee Director by any Participating

Company that is reportable to the Internal Revenue Service as compensation

for such period on Form 1099 in the absence of an

<PAGE> 1

election to defer receipt thereof under the terms of this Plan.

Compensation shall include Cash Compensation, Equity Compensation and

Option-Related Compensation. Compensation shall not include amounts that

become payable under this Plan.

Section 1.11 Disability means, with respect to a Participant, any

medically determinable physical or mental impairment which can be expected

to result in death or to last for a continuous period of at least twelve

(12) months and as a result of which either: (a) the Participant is unable

to engage in any substantial gainful activity or (b) the Participant has

been receiving income replacement benefits for a period of at least three

(3) months under an accident and health plan covering employees of the

Participant's employer. The existence of a Disability shall be determined

by the Administrator in accordance with section 409A and the regulations

thereunder.

Section 1.12 Effective Date means December 20, 2005.

Section 1.13 Equity Compensation means, with respect to any

Participant, that portion of the Participant's Compensation, other than

Option-Related Compensation, that is paid to him in Shares or the amount of

which is based upon the value, or increase in value, of a Share.

Section 1.14 Fair Market Value means, with respect to a Share on a

specified date:

(a) the final reported sales price on the date in question

(or if there is no reported sale on such date, on the last preceding

date on which any reported sale occurred) as reported in the

principal consolidated reporting system with respect to securities

listed or admitted to trading on the principal United States

securities exchange on which the Shares are listed or admitted to

trading; or

(b) if the Shares are not listed or admitted to trading on any

such exchange, the closing bid quotation with respect to a Share on

such date on the National Association of Securities Dealers Automated

Quotations System, or, if no such quotation is provided, on another

similar system, selected by the Committee, then in use; or

market value of a Share as the Administrator may determine.

Section 1.15 Investment Benchmark means a hypothetical investment

classification in which a Participant's Memorandum Account shall be deemed

to be invested for purposes of crediting or charging earnings, losses,

appreciation or depreciation with respect to the Participant's Memorandum

Account, in accordance with section 3.2. The Investment Benchmark shall be

interest at an annual rate equal to the rate on the highest yielding

certificate of deposit issued by Westfield Bank during the year or any

other investment classification set as an option by the Committee for this

Plan.

Section 1.16 ISO Share means a Share acquired upon exercise of an

incentive stock option (within the meaning of section 422 of the Code).

<PAGE> 2

Section 1.17 Memorandum Account means, with respect to a

Participant, a bookkeeping account maintained by the Company to which is

credited the amount of the Participant's deferred Compensation, together

with any earnings and appreciation thereon, and against which are charged

any losses, depreciation or distributions thereof, pursuant to Article III.

Section 1.18 Memorandum Subaccount means, with respect to a

Participant, a portion of the Participant's Memorandum Account that is

separately accounted for by the Company due to the application of unique

provisions relating to the applicable distribution schedule or Investment

Benchmark(s).

Section 1.19 Non-Employee Director means a voting member of the

board of directors of a Participating Company who is not an officer or

employee of any Participating Company.

Section 1.20 Option-Related Compensation means, with respect to an

option to purchase Shares that is exercised by paying the entire exercise

price therefor by actual or constructive delivery of Previously Acquired

Shares, a number of Shares equal to the excess of (a) the total number of

Shares as to which the option is exercised, over (b) the number of Shares

actually or constructively delivered in payment of the exercise price.

Section 1.21 Participant means a Non-Employee Director or former

Non-Employee Director who has a Memorandum Account under the Plan.

Section 1.22 Participating Company means the Company, Westfield

Bank, and any other company which, with the prior approval of the Board,

may adopt this Plan.

Section 1.23 Phantom Share a unit of value that, at any relevant

date, corresponds to the Fair Market Value of a Share.

Section 1.24 Plan means the Directors' Deferred Compensation Plan

of Westfield Financial, Inc.

Section 1.25 Previously Acquired Share means, with respect to a

Participant on any date: (a) a Share (other than an ISO Share) that was

acquired by the Participant more than six (6) months prior to such date and

has been held by the Participant continuously since such acquisition and

(b) an ISO Share that was acquired by the Participant upon the exercise, at

least one year prior to such date, of an incentive stock option (within the

meaning of section 422 of the Code) that was granted to him at least two

(2) years prior to such date and has been held by the Participant

continuously since such acquisition.

Section 1.26 Share means a share of Common Stock, par value $.01

per share, of the Company.

Section 1.27 Service Recipient means with respect to a Participant

on any date: (a) the corporation for which the Participant is performing

services on such date; (b) all corporations that are liable to the

Participant for the benefits due to him under the Plan; (c) a corporation

that is a majority shareholder of a corporation described in section

1.27(a) or (b); or

<PAGE> 3

(d) any corporation in a chain of corporations each of which is a majority

shareholder of another corporation in the chain, ending in a corporation

described in section 1.27(a) or (b).

Section 1.28 Unforeseeable Emergency means, with respect to a

Participant, a severe financial hardship to the Participant resulting from

an illness or accident of the Participant, the Participant's spouse or a

dependent (within the meaning of section 152(e) of the Code) of the

Participant, loss of the Participant's property due to casualty, or other

similar extraordinary and unforeseeable circumstances arising as a result

of events beyond the control of the Participant. The existence of an

Unforeseeable Emergency shall be determined by the Administrator in

accordance with section 409A of the Code and the regulations hereunder.

Article II

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Participation

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Section 2.1 Election to Participate.

Any Non-Employee Director may elect to become a Participant in the

Plan by submitting to the Administrator a written election, on a form

prescribed by the Administrator, to defer the receipt of all or any portion

of his Compensation; provided, however, that no Non-Employee Director shall

be permitted to defer receipt of Compensation that is required to be

withheld and remitted to any federal, state or local taxing authority

pursuant to any requirement for the collection of tax at the source or that

is required to fund any contribution or premium payment or co-payment

required of the Non-Employee Director as a condition of participation in

any employee benefit plan maintained by the Company or any other

Participating Company at the time the election is made. A Non-Employee

Director who elects to become a Participant may make separate deferral

elections with respect to Cash Compensation, Equity Compensation and

Option-Related Compensation. The Administrator may deny participation to

any Non-Employee Director whose initial election to become a Participant

does not contemplate the deferral of a minimum of $2,000 on an annualized

basis.

Section 2.2 Election to Defer Cash Compensation.

An election to defer Cash Compensation shall specify the amount or

percentage of each payment of Cash Compensation to be deferred, shall be

made on or before the last day of any calendar year and shall be effective

for the calendar year following the calendar year in which such election is

made and all subsequent calendar years unless status as a Non-Employee

Director ceases or a change in the rate of deferral is elected pursuant to

section 2.5; provided, however, that an initial election to defer Cash

Compensation made by a Non-Employee Director and filed with the

Administrator during the thirty (30) day period immediately following the

later of the Effective Date of the Plan or the date the Non-Employee

Director first becomes eligible to participate in the Plan shall take

effect with the first payment of Compensation that relates to a period of

service that begins after such election is made, or such later date as the

Non-Employee Director shall specify in his election.

<PAGE> 4

Section 2.3 Election to Defer Equity Compensation.

An election to defer Equity Compensation shall specify the amount or

percentage of each payment of Equity Compensation that is to be deferred,

shall be made on or before the first day of the calendar year in which such

Equity Compensation will be paid and prior to the first day of the period

of service for which such Equity Compensation is earned, and shall be

effective for all subsequent calendar years and service periods, unless

status as a Non-Employee Director ceases or a change in the rate of

deferral is elected pursuant to section 2.5; provided, however, that an

initial election to defer Equity Compensation made by a Non-Employee

Director and filed with the Administrator during the thirty (30) day period

immediately following the later of the Effective Date or the date the Non-

Employee Director first becomes eligible to participate in the Plan shall

take effect with the first payment of Equity Compensation that relates to a

period of service that begins after such election is made, or such later

date as the Non-Employee Director shall specify in his election.

Acceptance of an election to defer Equity Compensation shall not be held or

construed as a guarantee that any conditions precedent to the payment

thereof (including but not limited to continued employment) will be met or

the amount to be deferred will in fact be earned. In the event the dollar

amount of Equity Compensation actually paid is less than the dollar amount

for which a deferral election has been made, the election shall be deemed

effective to defer the maximum permissible amount. Notwithstanding

anything in this Plan to the contrary, no person shall elect to defer

Equity Compensation until the Board shall permit such deferral by

resolution.

Section 2.4 Election to Defer Option-Related Compensation.

Notwithstanding anything in this Plan to the contratry, no person

shall elect to defer Option-Related Compensation until such time as the

Plan is amended to provide for such elections.

Section 2.5 Changes in Participation.

(a) An election by a Participant pursuant to section 2.2 shall

continue in effect until termination of status as a Participant; provided,

however, that the Participant may, by written election filed with the

Administrator, increase or decrease the portion of his Cash Compensation to

be deferred, or discontinue such deferral altogether. Such election shall

be effective with respect to Cash Compensation payable for services

rendered after the end of the calendar year in which such election is filed

with the Administrator; provided, however, that if an election provides for

the decrease or discontinuance of the Participant's deferral of Cash

Compensation and is made on account of Disability or an Unforeseeable

Emergency or an Acceleration Event, such election shall, to the extent

permitted under section 409A of the Code, be effective with respect to Cash

Compensation payable after the filing of such election.

(b) An election by a Participant pursuant to section 2.3 or 2.4

shall continue in effect until termination of status as a Participant;

provided, however, that the Participant may, by written election filed with

the Administrator, increase or decrease the portion of his Equity

Compensation to be deferred, or discontinue such deferral altogether. Such

election shall be effective with respect to Equity Compensation payable

after the calendar year in which, and on account of a period of service

that begins after, such election is filed with the Administrator;

<PAGE> 5

provided, however, that if an election provides for the decrease or

discontinuance of the Participant's deferral of Equity Compensation and is

made on account of Disability or an Unforeseeable Emergency or an

Acceleration Event, such election shall be effective with respect to Equity

Compensation, payable after the filing of such election.

Director or in the event that a Non-Employee Director ceases to defer

receipt of his Compensation, the balance in his Memorandum Account shall

continue to be adjusted in accordance with Article III. A Non-Employee

Director who has filed a written election to cease deferring receipt of any

portion of his Compensation may thereafter again file an election to defer

receipt of his Compensation in the manner described in sections 2.2 through

2.5.

Section 2.6 Revocability of 2005 Elections.

Notwithstanding anything in the Plan to the contrary, every election

under the Plan to defer Compensation earned and payable in 2005 shall, to

the maximum extent permitted and subject to the terms and conditions set

forth in Internal Revenue Service Notice 2005-1, be revocable at any time

during 2005. Such a revocation shall be effected by written notice given

to and actually received by the Administrator on or before December 31,

2005 and shall result in the distribution of the entire balance credited to

the Memorandum Account of the person revoking the election and in the

inclusion of the entire amount distributed in gross income for federal

income tax purposes in the 2005 taxable year.

Article III

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Accounting for Deferred Amounts

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Section 3.1 In General.

The Administrator shall maintain a separate Memorandum Account for

each Participant and may establish within such Memorandum Account two or

more Memorandum Subaccounts as may be necessary or appropriate to properly

administer the Plan, including, but not limited to:

(a) A separate Memorandum Subaccount for each portion of a

Participant's Memorandum Account to which a unique distribution

schedule is applicable;

(b) A separate Memorandum Subaccount for that portion of a

Participant's Memorandum Account that is attributable to Equity

Compensation or Option-Related Compensation that has been deferred;

and

Participant's Memorandum Account that is required to be adjusted for

earnings and losses on the basis of an Investment Benchmark that is

different from the Investment Benchmark(s) applicable to other

portions of the Memorandum Account.

<PAGE> 6

Credits, charges, and other adjustments to each Participant's Memorandum

Account and any Memorandum Subaccounts shall be made in accordance with

this Article III. Neither the Company nor any Participating Company shall

fund its liability for the balances credited to a Memorandum Account or

Memorandum Subaccount, but each shall reflect its liability for such

balances on its books.

Section 3.2 Adjustments to Memorandum Accounts.

(a) Each Participant's Memorandum Account and applicable Memorandum

Subaccount(s) shall be credited with amounts of Compensation deferred by

the Participant as of the date on which such Compensation would have been

paid to the Participant in the absence of a deferral election. For

purposes of this section 3.2(a):

(i) Equity Compensation consisting of Shares or other

property which would be taxable for federal income tax purposes

pursuant to section 83 of the Code that is being deferred shall be

credited as of the date on which such Shares or other property become

vested or, if later, the date on which such Shares or other property

are contractually required to be transferred to the Participant; and

(ii) Option-Related Compensation that is being deferred shall

be credited as of the earliest date on which all actions have been

taken and conditions satisfied to effectively exercise the related

options;

all as determined by the Administrator, whose determination shall be

conclusive and binding in the absence of manifest error.

(b) Each Participant's Memorandum Account shall be adjusted to

reflect the amount of earnings, losses, appreciation or depreciation, as

appropriate that would result if the balances credited to the Participant's

Memorandum Account, were actually invested in Investment Benchmarks

according to the following guidelines:

(i) That portion of a Participant's Memorandum Account that

is attributable to the deferral of Option-Related Compensation shall

at all times be deemed to be invested in Phantom Shares. The number

of Phantom Shares credited in connection with each deferral of

Option-Related Compensation shall be equal to the number of Shares

corresponding to the Option-Related Compensation that is being

deferred. Additional Phantom Shares shall be credited to account for

any stock dividends to holders of record of Shares in an amount equal

to the product of (A) the number of Shares issued as a stock dividend

to the holder of record of one Share, multiplied by (B) the number of

Phantom Units credited to the Participant's Memorandum Account as of

the record date for the stock dividend. Additional Phantom Shares

shall be credited to account for cash dividends paid to holders of

record of Shares in an amount equal to the quotient of (A) the cash

dividend per Share multiplied by the number of Phantom Shares

credited to the Participant's Memorandum Account as of the record

date for the cash dividend, divided by (B) the Fair Market Value of a

Share on the payment date for the cash dividend.

<PAGE> 7

(ii) That portion of a Participant's Memorandum Account that

is attributable to the deferral of Equity Compensation shall be

deemed to be invested in Phantom Shares for so long as the

Administrator may require.

(iii) Any portion of the Participant's Memorandum Account that

is not subject to section 3.2(b)(i) or (ii) shall be deemed to be

invested in such Investment Benchmarks as the Participant, by notice

given in such form and manner and subject to such terms, conditions

and proce

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