EMPLOYMENT AGREEMENT
Exhibit
10.1
This
EMPLOYMENT AGREEMENT (the
"Agreement") is made and entered into this 23rd day of
April 2007,
by and between Xxxxxxx X. Xxxx ("Executive") and NBT BANCORP INC., a Delaware
corporation having its principal office in Norwich, New York
("NBTB")
W
I T N E
S S E T H T H A T:
WHEREAS,
Executive is serving as the
Executive Vice President, Regional President, Capital Region of NBT Bank,
National Association, a national banking association which is a wholly-owned
subsidiary of NBTB (“NBT Bank”);
WHEREAS,
the parties desire to enter
into this Agreement, setting forth the terms and conditions of the continued
employment relationship of Executive with NBTB;
NOW,
THEREFORE, in consideration of the
foregoing and the mutual promises, covenants and agreements set forth in
this
Agreement, intending to be legally bound, the parties agree as
follows:
1.
Employment; Responsibilities and Duties.
(a) NBTB
hereby agrees to continue to employ Executive and to cause NBT Bank and any
successor organization to NBT Bank to employ Executive, and Executive hereby
agrees to serve as the Executive Vice President, Regional President, Capital
Region of NBT Bank and any successor organization to NBTB or NBT Bank, as
applicable, during the Term of Employment (as such term is defined
below). During the Term of Employment, Executive shall perform all
duties, and responsibilities, and have the authority as shall be set forth
in
the bylaws of NBTB or NBT Bank or as may otherwise be determined and assigned
to
his by NBTB or by NBT Bank.
(b) Executive
shall devote his full working time and best efforts to the performance of
his
responsibilities and duties hereunder. During the Term of Employment, Executive
shall not, without the prior written consent of the Chief Executive Officer
of
NBTB, render services as an employee, independent contractor, or otherwise,
whether or not compensated, to any person or entity other than NBTB, NBT
Bank or
their affiliates; provided that Executive may, where involvement in such
activities does not individually or in the aggregate significantly interfere
with the performance of his duties or violate the provisions of section 4
hereof, (i) render services to charitable organizations, (ii) manage his
personal investments, and (iii) with the prior permission of the Chief Executive
Officer of NBTB, hold such other directorships or part-time academic
appointments or have such other business affiliations as would otherwise
be
prohibited under this section 1.
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2.
Term of Employment.
(a) The
initial term of employment under this Agreement shall be for the period
commencing on the date hereof and ending on January 1, 2008 (the “Initial
Term”), provided, however, that on December 31, 2007, and each December 31st
thereafter, the term of the agreement shall extend itself by one additional
year
(the “Extended Term”), unless NBTB has given contrary written notice to
Executive at least 90 days before any such renewal date. The Initial
Term and all such Extended Terms are collectively referred to herein as the
“Term of Employment.”
(b) Executive’s
employment with NBTB shall not terminate prior to the expiration of the Initial
Term or any Extended Term, except as provided below:
(i)
Voluntary Termination. Executive may terminate this Agreement
upon not less than 90 days prior written notice delivered to NBTB, in which
event Executive shall be entitled to compensation and benefits earned or
accrued
through the effective date of termination (the “Termination Date”).
(ii) Termination
Upon Death. This Agreement shall terminate upon Executive’s
death, in which event Executive’s estate shall be entitled to compensation and
benefits earned or accrued through the date of death.
(iii) Termination
Upon Disability. NBTB may terminate this Agreement upon
Executive’s disability. For purposes of this Agreement, Executive’s
inability to perform his duties hereunder by reason of physical or mental
illness or injury for a period of at least 90 consecutive days or at least
120
days in any period of 12 consecutive months (the “Disability Period”) shall
constitute disability. The determination of disability shall be made
by a physician selected by NBTB. During the Disability Period,
Executive shall be entitled to the Base Salary (as such term is defined below)
otherwise payable during that period, reduced by any other NBTB-provided
benefits to which Executive may be entitled, which benefits are specifically
payable solely on account of such disability (including, but not limited
to,
benefits provided under any disability insurance policy or program, worker’s
compensation law, or any other benefit program or arrangement). In
the event of termination upon Executive’s disability, Executive shall be
entitled to compensation or benefits earned or accrued through the Termination
Date.
(iv) Termination
for Cause. NBTB may terminate Executive’s employment for Cause by
written notice to Executive. For purposes of this Agreement, “Cause”
shall mean Executive’s: (1) personal dishonesty, incompetence (which shall be
measured against standards generally prevailing in the financial institutions
industry), willful or gross misconduct with respect to the business and affairs
of NBTB or NBT Bank, or with respect to any of their affiliates for which
Executive is assigned material responsibilities or duties; (2) willful neglect,
failure, or refusal to carry out his duties hereunder in a reasonable
manner after a written demand for substantial performance is
delivered to Executive that specifically identifies the manner in which NBTB
believes that Executive has not substantially performed his duties and Executive
has not resumed such substantial performance within 21 days of receiving
such
demand; (3) willful violation of any law, rule, or regulation (other than
traffic violations or similar offenses) or the conviction of a felony, whether
or not committed in the course of his employment with NBTB; (4) being a specific
subject of a final cease and desist order from, written agreement with, or
other
order or supervisory direction from, any federal or state regulatory authority;
(5) conduct tending to bring NBTB, NBT Bank or any of their affiliates into
public disgrace or disrepute; or (6) breach of any representation or warranty
in
section 6(a) hereof or of any agreement contained in section 1, 4, 5 or 6(b)
hereof.
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Notwithstanding
any other term or
provision of this Agreement to the contrary, if Executive’s employment is
terminated for Cause, Executive shall forfeit all rights to compensation
and
benefits otherwise provided pursuant to this Agreement; provided, however,
that
the Base Salary shall be paid through the Termination Date.
(v) Termination
Without Cause. NBTB may terminate Executive’s employment for
reasons other than Cause upon not less than 30 days prior written notice
delivered to Executive, in which event Executive shall be entitled to the
Base
Salary for a period of 12 months following the Termination Date and the
compensation and benefits earned or accrued through the Termination
Date.
(vi) Termination
for Good Reason. If Executive terminates his employment with NBTB
for Good Reason, other than following a Change of Control, such termination
shall be deemed to have been a termination by NBTB of the Executive’s employment
without Cause and Executive shall be entitled to receive all benefits and
payments due to his under such a termination.”Good Reason” shall mean, without
Executive's express written consent, reassignment of Executive to a position
other than for "Cause," or a decrease in the amount or level of Executive's
salary or benefits from the amount or level established herein.
(vii) Resignation. Effective
upon Executive’s termination of employment for any reason, Executive hereby
resigns from any and all offices and positions related to Executive’s employment
with NBTB, NBT Bank or any affiliates thereof, and held by Executive at the
time
of termination.
(viii) Regulatory
Limits. Notwithstanding any other provision in this Agreement
NBTB may terminate or suspend this Agreement and the employment of Executive
hereunder, as if such termination were for Cause under section 2(b)(iv) hereof,
to the extent required by the applicable federal or state statue related
to
banking, deposit insurance or bank or savings institution holding companies
or
by regulations or orders issued by the Office of the Controller of the Currency,
the Federal Deposit Insurance Corporation or any other state or federal banking
regulatory agency having jurisdiction over NBT Bank or NBTB, and no payment
shall be required to be made to or for the benefit of Executive under this
Agreement to the extent such payment is prohibited by applicable law, regulation
or order issued by a banking agency or a court of competent jurisdiction;
provided, that it shall be NBTB’s burden to prove that any such action was so
required
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(c) Any
provision of this section 2 to the contrary notwithstanding, in the event
that
the employment of Executive with NBTB is terminated in any situation described
in section 3 of the change-in-control letter agreement dated April 23, 2007
between NBTB and Executive (the "Change-in-Control Agreement") so as to entitle
Executive to a severance payment and other benefits described in section
3 of
the Change-in-Control Agreement, then Executive shall be entitled to receive
the
following, and no more, under this section 2:
(i)
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compensation
and benefits earned or accrued through the Termination Date; and
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(ii)
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the
severance payment and other benefits provided in the Change-in-Control
Agreement.
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(d)
Any provision of this Section 2 to the
contrary notwithstanding, in the event that the Employment of the Executive
with
NBTB is terminated in any situation described in section 3 of the
Change-in-Control Agreement so as to entitle Executive to a severance payment
and other benefits described in section 3 of the Change-in-Control Agreement,
and if as of the Termination Date the Executive is a “key employee” for the
purposes of Section 409A of the Internal Revenue Code of 1986, as amended,
and
the regulations promulgated thereunder, NBTB will delay the payment of such
severance payments six (6) months from the date they otherwise would be paid
hereunder.
3.
Compensation. For the services to be performed by Executive
for NBTB and its affiliates under this Agreement, Executive shall be compensated
in the following manner:
(a) Base
Salary. During the Term of Employment:
(i)
NBTB shall pay Executive a salary which, on an annual basis, shall be
$198,600.00 (the “Base Salary”) commencing on December 12,
2006. Thereafter, Executive’s salary may, in the sole
discretion of NBTB, be negotiated between Executive and the Chief Executive
Officer of NBTB based on recommendations from NBTB’s Compensation and Benefits
Committee and in line with compensation for comparable positions in companies
of
similar size and structure, but in no case less than $198,600.00. Adjustments
to
the Base Salary, if any, shall be determined by NBTB. The Base Salary
shall be payable in accordance with the normal payroll practices of NBTB
with
respect to executive personnel as presently in effect or as they may be
modified
by NBTB from time to time.
(ii) Executive
shall be eligible to be considered for performance bonuses commensurate
with the
Executive’s title and salary grade in accordance with the compensation policies
of NBTB with respect to executive personnel as presently in effect or as
they
may be modified by NBTB from time to time.
(b) Employee
Benefit Plans or Arrangements. During the Term of Employment,
Executive shall be entitled to participate in all employee benefit plans
of
NBTB, as presently in effect or as they may be modified by NBTB from time
to
time, under such terms as may be applicable to officers of Executive's rank
employed by NBTB or its affiliates, including, without limitation, plans
providing retirement benefits, stock options, medical insurance, life insurance,
disability insurance, and accidental death or dismemberment insurance, provided
that there be no duplication of such benefits as are provided under any other
provision of this Agreement.
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(c) Stock
Options and Restricted Stock. Each January or February annually
during the Term of Employment, Executive will be eligible to be granted a
non-statutory ("non-qualified") stock option (each an "Option") to purchase
the
number of shares of the common stock of NBTB, $0.01 par value, (the "NBTB
Common
Stock"), pursuant to the NBT Bancorp Inc. 1993 Stock
Option Plan, as amended, or any appropriate successor plan (the "Stock Option
Plan"), computed by using a formula approved by NBTB that is commensurate
with
Executive’s title and salary grade. The option exercise price per
share of the shares subject to each Option shall be such Fair Market Value
as
set forth in the Stock Option Plan, and the terms, conditions of exercise,
and
vesting schedule of such Option shall be as set forth in section 8 of the
Stock
Option Plan.
In
addition, Executive shall be entitled to participate in the NBTB Performance
Share Plan as applicable to officers of Executive’s rank subject to the terms,
conditions and vesting schedule set forth in the NBT Bancorp Inc. Performance
Share Plan, dated May 1, 2003.
(d) Vacation
and Sick Leave. During the Term of Employment, Executive shall be
entitled to paid annual vacation periods and sick leave in accordance with
the
policies of NBTB as in effect as of the date hereof or as may be modified
by
NBTB from time to time, as may be applicable to officers of Executive's
rank
employed by NBTB or its affiliates, but in no event shall Executive be
entitled
to less than four weeks of paid vacation per year.
(e) Country
Club Dues. During the Term of Employment, Executive shall be
eligible for a bank-paid membership at a country club mutually agreed upon
by
the chief executive officer of NBTB and the Executive.
(f)
Withholding. All compensation to be paid to Executive
hereunder shall be subject to required benefit deductions, tax withholding
and
other deductions required by law.
(g)
Expenses. During the Term of Employment, Executive
shall be reimbursed for reasonable travel and other expenses incurred or
paid by
Executive in connection with the performance of her services under this
Agreement, upon presentation of expense statements or vouchers or such other
supporting information as may from time to time be requested, in accordance
with
such policies of NBTB as are in effect as of the date hereof and as may be
modified by NBTB from time to time, under such terms as may be applicable
to
officers of Executive's rank employed by NBTB or its
affiliates.
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4. Confidential
Business Information; Non-Competition.
(a) Executive acknowledges that during the term of his employment he has been and will continue to be entrusted with, have access to and become familiar with various trade secrets and other confidential business information of NBTB, NBT Bank and/or their affiliates which have been developed and maintained at great effort and expense, have been kept protected and confidential, are of great value to NBTB, NBT Bank and/or their affiliates, and provide them with a significant competitive advantage. Such confidential information includes but is not limited to procedures, methods, sales relationships developed while in the service of NBTB, NBT Bank or their affiliates, knowledge of customers and their requirements, marketing plans, marketing information, studies, forecasts, and surveys, competitive analyses, mailing and marketing lists, new business proposals, lists of vendors, consultants, and other persons who render service or provide material to NBTB or NBT Bank or their affiliates, and compositions, ideas, plans, and methods belonging to or related to the affairs of NBTB or NBT Bank or their affiliates. In this regard, NBTB asserts proprietary rights in all of its business information and that of its affiliates except for such information as is clearly in the public domain. Notwithstanding the foregoing, information that would be generally known or available to persons skilled in Executive's fields shall be considered to be "clearly in the public domain" for the purposes of the preceding sentence. Executive agrees that he will hold in the strictest confidence and not disclose or divulge to any third party, except as may be required by his duties hereunder, by law, regulation, or order of a court or government authority, or as directed by NBTB, nor shall he use to the detriment of NBTB, NBT Bank or their affiliates or use in business or on behalf of any business competitive with or substantially similar to any business of NBTB, NBT Bank or their affiliates, any confidential business information obtained during the course of his employment by NBTB. The foregoing shall not be construed as restricting Executive from disclosing such information to the employees of NBTB, NBT Bank or their affiliates. On or before the Termination Date, Executive shall promptly deliver to NBTB all material containing NBTB’s confidential information including any photocopies, extracts or summaries of it) in his possession, custody or control.
(b) Executive
hereby agrees that from the Commencement Date until the first anniversary
of the
Termination Date, Executive will not, for any reason, directly or indirectly,
either personally or on behalf of any other person or entity (whether as
a
director, stockholder, owner, partner, officer, consultant, principal, employee,
agent or otherwise): (i) interfere with the relationship of NBTB or NBT Bank
or
their affiliates with any of their employees, suppliers, agents, or
representatives (including, without limitation, causing or helping another
business to hire any employee of NBTB or NBT Bank or their
affiliates), (ii) divert or attempt to divert from NBTB,
NBT Bank or their affiliates any business in which any of them has been actively
engaged during the Term of Employment, nor interfere with the relationship
of
NBTB, NBT Bank or their affiliates with any of their customers or prospective
customers, or (iii) take any action which is intended, or would reasonably
be
expected, to adverely affect NBTB, NBT Bank or their affiliates, their business,
reputation, or their relationship with their customers or prospective
customers. This paragraph 4(b) shall not, in and of itself, prohibit
Executive from engaging in the banking, trust, or financial services business
in
any capacity, including that of an owner or employee.
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(c) Executive
acknowledges and agrees that irreparable injury will result to NBTB in the
event
of a breach of any of the provisions of this section 4 (the "Designated
Provisions") and that NBTB will have no adequate remedy at law with respect
thereto. Accordingly, in the event of a material breach of any
Designated Provision, and in addition to any other legal or equitable remedy
NBTB may have, NBTB shall be entitled to the entry of a preliminary and
permanent injunction (including, without limitation, specific performance)
by a
court of competent jurisdiction in Chenango County, New York, or elsewhere,
to
restrain the violation or breach thereof by Executive, and Executive submits
to
the jurisdiction of such court in any such action.
(d) It
is the desire and intent of the parties that the provisions of this section
4
shall be enforced to the fullest extent permissible under the laws and public
policies applied in each jurisdiction in which enforcement is
sought. Accordingly, if any particular provision of this section 4
shall be adjudicated to be invalid or unenforceable, such provision shall
be
deemed amended to delete therefrom the portion thus adjudicated to be invalid
or
unenforceable, such deletion to apply only with respect to the operation
of such
provision in the particular jurisdiction in which such adjudication is
made. In addition, should any court determine that the provisions of
this section 4 shall be unenforceable with respect to scope, duration, or
geographic area, such court shall be empowered to substitute, to the extent
enforceable, provisions similar hereto or other provisions so as to provide
to
NBTB, to the fullest extent permitted by applicable law, the benefits intended
by this section 4.
5.
Life Insurance. In light of the unusual abilities and
experience of Executive, NBTB, NBT Bank or their affiliates, in their
discretion, may apply for and procure as owner, and for their own benefit,
insurance on the life of Executive, in such amount and in such form as NBTB,
NBT
Bank or their affiliates may choose. NBTB shall make all payments for
such insurance and shall receive all benefits from it. Executive
shall have no interest whatsoever in any such policy or policies but, at
the
request of NBTB, NBT Bank or their affiliates, shall submit to medical
examinations and supply such information and execute such documents as may
reasonably be required by the insurance company or companies to which NBTB,
NBT
Bank or their affiliates has applied for insurance.
6.
Representations and Warranties.
(a) Executive
represents and warrants to NBTB that his execution, delivery, and performance
of
this Agreement will not result in or constitute a breach of or conflict with
any
term, covenant, condition, or provision of any commitment, contract, or other
agreement or instrument, including, without limitation, any other employment
agreement, to which Executive is or has been a party.
(b) Executive
shall indemnify, defend, and hold harmless NBTB for, from, and against any
and
all losses, claims, suits, damages, expenses, or liabilities, including court
costs and counsel fees, which NBTB has incurred or to which NBTB may become
subject, insofar as such losses, claims, suits, damages, expenses, liabilities,
costs, or fees arise out of or are based upon any failure of any representation
or warranty of Executive in section 6(a) hereof to be true and correct when
made.
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7.
Notices. All notices, consents, waivers, or other communications
which are required or permitted hereunder shall be in writing and deemed
to have
been duly given if delivered personally or by messenger, transmitted by telex
or
telegram, by express courier, or sent by registered or certified mail, return
receipt requested, postage prepaid. All communications shall be
addressed to the appropriate address of each party as follows:
If
to
NBTB:
00
Xxxxx Xxxxx Xxxxxx
Xxxxxxx,
Xxx
Xxxx 00000
Attention: Chief
Executive Officer
With
a
required copy (which shall not constitute notice) to:
Xxxxxx
X.
Xxxxx, Esq.
Xxxxx
&
Xxxxxxx
L.L.P.
000
00xx Xxxxxx,
X.X.
Xxxxxxxxxx,
X.X.
00000-0000
Fax:
(000) 000-0000
If
to
Executive:
Xx.
Xxxxxxx X. Xxxx
000
Xxxxxxx Xxxx Xx
Xxxxxx,
XX 00000
All
such
notices shall be deemed to have been given on the date delivered, transmitted,
or mailed in the manner provided above.
8.
Assignment. Neither party may assign this Agreement or any
rights or obligations hereunder without the consent of the other
party.
9.
Governing Law, Jurisdiction and Venue. This Agreement shall be
governed by, construed, and enforced in accordance with the laws of the State
of
New York, without giving effect to the principles of conflicts of law
thereof. The parties hereby designate Chenango County, New York to be
the proper jurisdiction and venue for any suit or action arising out of this
Agreement. Each of the parties consents to personal jurisdiction in
such venue for such a proceeding and agrees that it may be served with process
in any action with respect to this Agreement or the transactions contemplated
thereby by certified or registered mail, return receipt requested, or to
its
registered agent for service of process in the State of New
York. Each of the parties irrevocably and unconditionally waives and
agrees, to the fullest extent permitted by law, not to plead any objection
that
it may now or hereafter have to the laying of venue or the convenience of
the
forum of any action or claim with respect to this Agreement or the transactions
contemplated thereby brought in the courts aforesaid.
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10. Entire
Agreement. This Agreement, together with the
Change-in-Control Agreement, constitutes the entire understanding between
NBTB,
NBT Bank and their affiliates, and Executive relating to the subject matter
hereof. Any previous discussions, agreements, commitments or
understandings of any kind or
nature between the parties hereto or between Executive and
NBTB, NBT Bank or any of their affiliates, whether oral or written, regarding
the subject matter hereof, including without limitation the terms and conditions
of employment, compensation, benefits, retirement, competition following
employment, and the like, are merged into and superseded by this
Agreement. Neither this Agreement nor any provisions hereof can be
modified, changed, discharged, or terminated except by an instrument in writing
signed by the party against whom any waiver, change, discharge, or termination
is sought.
11. Illegality;
Severability.
(a) Anything
in this Agreement to the contrary notwithstanding, this Agreement is not
intended and shall not be construed to require any payment to Executive which
would violate any federal or state statute or regulation, including without
limitation the "golden parachute payment regulations" of the Federal Deposit
Insurance Corporation codified to Part 359 of title 12, Code of Federal
Regulations.
(b) If
any provision or provisions of this Agreement shall be held to be invalid,
illegal, or unenforceable for any reason whatsoever:
(i) the
validity, legality, and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any section of
this
Agreement containing any such provision held to be invalid, illegal, or
unenforceable) shall not in any way be affected or impaired thereby;
and
(ii) to
the fullest extent possible, the provisions of this Agreement (including,
without limitation, each portion of any section of this Agreement containing
any
such provisions held to be invalid, illegal, or unenforceable) shall be
construed so as to give effect to the intent manifested by the provision
held
invalid, illegal, or unenforceable.
12. Arbitration. Subject
to the right of each party to seek specific performance (which right shall
not
be subject to arbitration), if a dispute arises out of or is in any way related
to this Agreement or the asserted breach thereof, such dispute shall be referred
to arbitration before the American Arbitration Association the (“AAA”) pursuant
to the AAA’s National Rules for the Resolution of Employment Disputes (the
“Arbitration Rules”). A dispute subject to the provisions of this
section will exist if either party notifies the other party in writing that
a
dispute subject to arbitration exists and states, with reasonable specificity,
the issue subject to arbitration (the "Arbitration Notice"). The
parties agree that, after the issuance of the Arbitration Notice, the parties
will try in good faith between the date of the issuance of the Arbitration
Notice and the date the dispute is set for arbitration to resolve the dispute
by
mediation in accordance with the Arbitration Rules. If the dispute is
not resolved by the date set for arbitration, then any controversy or claim
arising out of this Agreement or the asserted breach hereof shall be resolved
by
binding arbitration and judgment upon any award rendered by arbitrator(s)
may be
entered in a court having jurisdiction. In the event any claim or dispute
involves an amount in excess of $100,000, either party may request that the
matter be heard and resolved by a single arbitrator. The arbitrator
shall have the same power to compel the attendance of witnesses and to order
the
production of documents or other materials and to enforce discovery as could
be
exercised by a United States District Court judge sitting in the Northern
District of New York. In the event of any arbitration, each party
shall have a reasonable right to conduct discovery to the same extent permitted
by the Federal Rules of Civil Procedure, provided that discovery shall be
concluded within 90 days after the date the matter is set for
arbitration. The arbitrator or arbitrators shall have the power to
award reasonable attorneys’ fees to the prevailing party. Any
provisions in this Agreement to the contrary notwithstanding, this section
shall
be governed by the Federal Arbitration Act and the parties have entered into
this Agreement pursuant to such Act.
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13. Costs
of Litigation. In the event litigation is
commenced to enforce any of the provisions hereof, or to obtain declaratory
relief in connection with any of the provisions hereof, the prevailing party
shall be entitled to recover reasonable attorneys’ fees. In the event
this Agreement is asserted in any litigation as a defense to any liability,
claim, demand, action, cause of action, or right asserted in such litigation,
the party prevailing on the issue of that defense shall be entitled to recovery
of reasonable attorneys’ fees.
14. Affiliation. A
company will be deemed to be an "affiliate" of, or
“affiliated” NBTB or NBT Bank according to the definition of "Affiliate"
set
forth in Rule 12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended.
15. Headings. The
section and subsection headings herein have been inserted for convenience
of
reference only and shall in no way modify or restrict any of the terms or
provisions hereof.
*
* * *
*
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IN
WITNESS WHEREOF, the parties hereto executed or caused this Agreement to
be
executed as of the day and year first above written.
By:
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/S/
Xxxxxx X. Xxxxxxxx
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Xxxxxx
X. Xxxxxxxx
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President/CEO
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/S/
Xxxxxxx X. Xxxx
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Xxxxxxx
X. Xxxx
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Executive
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