Form of Employment Agreement between NBT Bancorp Inc. and David E. Raven made as of August 31, 2005.
Exhibit
10.21
Form
of
Employment Agreement between NBT Bancorp Inc. and ▇▇▇▇▇ ▇. ▇▇▇▇▇ made as of
August 31, 2005.
This
EMPLOYMENT AGREEMENT (the "Agreement") made and entered into as of this thirty
first day of August 2005 by and between ▇▇▇▇▇ ▇. ▇▇▇▇▇ ("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 an executive vice president of NBTB and president and chief
executive officer of Pennstar Bank, a Division of NBT Bank, National
Association, a national banking association which is a wholly-owned subsidiary
of NBTB ("NBT Bank");
WHEREAS,
NBTB desires to secure the continued employment of Executive, subject to the
provisions of this Agreement; and
WHEREAS,
Executive is desirous of entering into the Agreement for such periods and upon
the terms and conditions set forth herein;
NOW,
THEREFORE, in consideration of the premises and mutual covenants and agree-ments
hereinafter set forth, intending to be legally bound, the parties agree as
follows:
1. Employment;
Responsibilities and Duties.
(a) NBTB
and
NBT Bank hereby agrees to employ Executive and to cause Pennstar Bank and any
successor organization to Pennstar Bank to employ Executive, and Executive
hereby agrees to serve as an executive vice president of NBTB and president
and
chief executive officer of Pennstar Bank, during the Term of Employment.
Executive shall have such executive duties, responsibilities, and authority
as
shall be set forth in the bylaws of NBTB and NBT Bank or as may otherwise be
determined by NBTB or NBT Bank. During the Term of Employment, Executive shall
report directly to the chief executive officer of NBT Bank and dotted line
to
the Chairman of the Board of Pennstar 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 Employ-ment, Executive
shall not, without the prior written consent of the chief executive officer
of
NBT Bank, render services as an employee, independent contractor, or otherwise,
whether or not compensated, to any person or entity other than NBTB or its
affiliates; provided that Executive may, where involvement in such activities
does not individually or in the aggregate significantly interfere with the
performance by Executive of his duties or violate the provisions of section
4
hereof, (i) render services to charitable organizations, (ii) manage his
personal invest-ments, and (iii) with the prior permis-sion of the chief
executive officer of NBT Bank, hold such other director-ships or part-time
academic appointments or have such other business affiliations as would
otherwise be prohibited under this section 1.
2. Term
of Employment.
(a) The
term
of this Agreement ("Term of Employment") shall be the period com-mencing on
the
date of this Agreement (the "Commence-ment Date") and continuing until the
Termination Date, which shall mean the earliest to occur of:
(i) January
1, 2008 provided, however, that on January 1, 2006 and each January 1
thereafter, the Term of Employment shall automatically be extended by one
additional year;
(ii) the
death
of Executive;
(iii)
Executive's
inability to perform his duties hereunder, as a result of physical or mental
disability as reasonably determined by the personal physician of Executive,
for
a period of at least 180 consecutive days or for at least 180 days during any
period of twelve consecutive months during the Term of Employment;
or
(iv) the
discharge of Executive by NBTB "for cause," which shall mean one or more of
the
following:
(A) any
willful or gross misconduct by Executive with respect to the business and
affairs of NBTB or Pennstar Bank, or with respect to any of its affiliates
for
which Executive is assigned material responsibilities or duties;
(B) the
conviction of Executive of a felony (after the earlier of the expiration of
any
applicable appeal period without perfection of an appeal by Executive or the
denial of any appeal as to which no further appeal or review is available to
Executive) whether or not committed in the course of his employment by
NBTB;
(C) Executive's
willful neglect, failure, or refusal to carry out his duties hereunder in a
reasonable manner (other than any such failure resulting from disability or
death or from termination by Executive for Good Reason, as hereinafter defined)
after a written demand for substantial performance is delivered to Executive
that speci-fically identifies the manner in which NBTB believes that Executive
has not substantially performed his duties and Executive has not resumed
substantial performance of his duties on a continuous basis within thirty days
of receiving such demand; or
(D) the
breach by Executive of any representa-tion or warranty in section 6(a) hereof
or
of any agreement contained in section 1, 4, 5, or 6(b) hereof, which breach
is
material and adverse to NBTB or any of its affiliates for which Executive is
assigned material responsibili-ties or duties; or
(v) Executive's
resignation from his position as executive vice president of NBTB or as
president and chief executive officer of Pennstar Bank other than for "Good
Reason," as hereinafter defined; or
(vi) the
termination of Executive's employment by NBTB "without cause," which shall
be
for any reason other than those set forth in subsections (i), (ii), (iii),
(iv),
or (v) of this section 2(a), at any time, upon the thirtieth day following
notice to Executive; or
(vii) Executive's
resignation for "Good Reason."
"Good
Reason" shall mean, without Executive's express written consent, reassignment
of
Executive to a position other than executive vice president of NBTB or as
president and chief executive officer of Pennstar Bank other than for "Cause,"
or a decrease in the amount or level of Executive's salary or benefits from
the
amount or level established in section 3 hereof.
(b) In
the
event that the Term of Employment shall be terminated for any reason other
than
that set forth in section 2(a)(vi) or 2(a)(vii) hereof, Executive shall be
entitled to receive, upon the occur-rence of any such event:
(i) any
salary (as hereinafter defined) payable pursuant to section 3(a)(i) hereof
which
shall have accrued as of the Termination Date; and
(ii) such
rights as Executive shall have accrued as of the Termination Date under the
terms of any plans or arrange-ments in which he participates pursuant to section
3(b) hereof, any right to reimbursement for expenses accrued as of the
Termination Date payable pursuant to section 3(h) hereof, and the right to
receive the cash equivalent of paid annual leave and sick leave accrued as
of
the Termination Date pursuant to section 3(d) hereof.
(c) In
the
event that the Term of Employment shall be terminated for the reason set forth
in section 2(a)(vi) or 2(a)(vii) hereof, Executive shall be entitled to
receive:
(i) any
salary payable pursuant to section 3(a)(i) hereof which shall have accrued
as of
the Termination Date, and, for the period commencing on the date immediately
following the Termination Date and ending upon and including the latest of
the
third anniversary of the Commencement Date or the date to which the Term of
Employment shall (as of the Termination Date) have automatically extended itself
under section 2(a)(i) hereof, salary payable at the rate established pursuant
to
section 3(a)(i) hereof, in a manner consistent 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) such
rights as Executive may have accrued as of the Termination Date under the terms
of any plans or arrangements in which he participates pursuant to section 3(b)
hereof, any right to reimbursement for expenses accrued as of the Termina-tion
Date payable pursuant to section 3(h) hereof, and the right to receive the
cash
equivalent of paid annual leave and sick leave accrued as of the Termination
Date pursuant to section 3(d) hereof; and
(iii) if,
within eighteen (18) months following the Termination Date, Executive should
sell his principal residence in the Scranton Rand ▇▇▇▇▇▇▇ Metropolitan Area
as
determined by Rand ▇▇▇▇▇▇▇ & Company (the “Scranton RMA”) and relocate to a
place outside of the Scranton RMA, (A) reimbursement for any shortfall between
the net proceeds on the sale of his principal residence and the purchase price
plus improvements including direct, necessary and reasonable transaction costs
incurred in connection with such purchase, as determined by the finance division
of NBTB, for such residence, and including direct, necessary and reasonable
expenses, as determined by the finance division of NBTB, incurred to prepare
the
residence for sale, (B) reimbursement for direct, necessary and reasonable
expenses, as determined by the finance division of NBTB, incurred in connection
with the sale of such residence not already included as part of the
reimbursement under (A) above, and (C) an amount necessary to pay all federal,
state and local income taxes resulting from any reimbursement made pursuant
to
(A) and (B) (including any additional federal state and local income taxes
resulting from the payment hereunder of such taxes), the intent being that
Executive shall be paid an additional amount (the “Gross-Up”) such that the net
amount retained by the Executive, after deduction of such federal, state and
local income taxes resulting from the reimbursement under (A) and (B) shall
be
equal to the amount of the reimbursement under (A) and (B) before payment of
such taxes; for purposes of determining the amount of the Gross-Up, Executive
shall be deemed to pay federal, state and local income taxes at the highest
marginal rate of taxation in effect in the calendar year in which the
reimbursement is made. Amounts due under this subsection shall be paid as soon
as administratively practicable, but in no event later than ninety (90) days
after the date of the sale of Executive’s principal residence.
Notwithstanding
the foregoing, in the event the Executive is reimbursed, entitled to
reimbursement, or is paid any amounts by an entity or entities other than NBTB
or Pennstar Bank or any affiliate or successor thereof (the “Third Party”), for
any amounts for which Executive has received, or is entitled to receive,
reimbursement under (A) or (B) above with respect to the sale of his principal
residence or any Gross-Up under (C) above, the Executive agrees:
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(1)
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with
regard to amounts already paid by NBTB or Pennstar Bank or any affiliate
or successor thereof (hereinafter referred to collectively as the
“Company”), the Executive shall notify the Company of all amounts received
or due from the Third Party, and shall reimburse the Company in an
amount
equal to the amount so received or due from the Third Party up to
the
amount the Company paid to the Executive under (A), (B), and (C)
above;
and
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(2)
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with
regard to amounts due but not yet paid by the Company to the Executive,
the Executive shall notify the Company of any amounts received or
due from
the Third Party, and the Executive agrees that the Company shall
reduce
the amount due under (A), (B), and (C) above by the amount the Executive
has been paid or is entitled to be paid by the Third Party up to
the
amount due the Executive from the
Company.
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(d) 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 July 23, 2001
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 Agree-ment, then Executive shall be entitled to receive
the following, and no more, under this section 2:
(i) any
salary payable pursuant to section 3(a)(i) hereof which shall have accrued
as of
the Termination Date;
(ii) such
rights as Executive shall have accrued as of the Termination Date under the
terms of any plans or arrange-ments in which he participates pursuant to section
3(b) hereof, any right to reimbursement for expenses accrued as of the
Termination Date payable pursuant to section 3(h) hereof, and the right to
receive the cash equivalent of paid annual leave and sick leave accrued as
of
the Termination Date pursuant to section 3(d) hereof; and
(iii) the
severance payment and other benefits provided in the Change-in-Control
Agreement; and
(iv) if,
within eighteen (18) months following the Termination Date, Executive should
sell his principal residence in the Scranton RMA and relocate to a place outside
of the Scranton RMA, (A) reimbursement for any shortfall between the net
proceeds on the sale of his principal residence and the purchase price plus
improvements, including direct, necessary and reasonable transaction costs
incurred in connection with such purchase, as determined by the finance division
of NBT Bank, for such residence, and including direct, necessary and reasonable
expenses, as determined by the finance division of NBT Bank, incurred to prepare
the residence for sale, (B) reimbursement for direct, necessary and reasonable
expenses, as determined by the finance division of NBT Bank, incurred in
connection with the sale of such residence not already included as part of
the
reimbursement under (A) above, and (C) the Gross-Up, the intent being that
the
net amount retained by the Executive, after deduction of such federal, state
and
local income taxes resulting from the reimbursement under (A) and (B) shall
be
equal to the amount of the reimbursement under (A) and (B) before payment of
such taxes; for purposes of determining the amount of the Gross-Up, Executive
shall be deemed to pay federal, state and local income taxes at the highest
marginal rate of taxation in effect in the calendar year in which the
reimbursement is made. Amounts due under this subsection shall be paid as soon
as administratively practicable, but in no event later than ninety (90) days
after the date of the sale of Executive’s principal residence.
Notwithstanding
the foregoing, in the event the Executive is reimbursed, entitled to
reimbursement, or is paid any amounts by a Third Party, for any amounts for
which Executive has received, or is entitled to receive, reimbursement under
(A)
or (B) above with respect to the sale
of
his principal residence or any Gross-Up under (C) above, the Executive agrees:
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(5)
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with
regard to amounts already paid by the Company, the Executive shall
notify
the Company of all amounts received or due from the Third Party,
and shall
reimburse the Company in an amount equal to the amount so received
or due
from the Third Party up to the amount the Company paid to the Executive
under (A), (B), and (C) above; and
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(6)
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with
regard to amounts due but not yet paid by the Company to the Executive,
the Executive shall notify the Company of any amounts received or
due from
the Third Party, and the Executive agrees that the Company shall
reduce
the amount due under (A), (B), and (C) above by the amount the Executive
has been paid or is entitled to be paid by the Third Party up to
the
amount due the Executive from the
Company.
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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) Salary.
During
the Term of Employment:
(i) NBTB
shall pay Executive a salary, which, on an annual basis, shall be $275,000.00
commencing on August 1, 2005. Salary commencing on January 1, 2007 will be
negotiated between Executive and the CEO of NBTB based on recommendations from
the 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 $275,000.00. 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 Employ-ment, 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
dismember-ment insurance, provided that there be no duplication of such benefits
as are provided under any other provision of this Agree-ment.
(c) Stock
Options and NBTB Performance Share Plan.
Each
January or February annually during the Term of Employ-ment, NBTB will cause
Executive 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
the 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, 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 ant NBTB
Performance Share Plan (the “ Performance Share Plan”) as applicable to officers
of Executive’s rank.
(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 Commencement Date 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 less than four weeks of paid vacation per
year.
(e) Automobile.
During
the Term of Employment, Executive shall be entitled to the use of an automobile
owned by NBTB or an affiliate of NBTB, the make, model, and year of which
automobile shall be appropriate to an officer of Executive's rank and which
will
be replaced every two years (or earlier if the accumulated mileage exceeds
50,000 miles). Executive shall be responsible for all expenses of ownership
and
use of any such automobile, subject to reimburse-ment of expenses for business
use in accordance with section 3(h).
(f) Country
Club Dues.
During
the Term of Employment, Executive shall be reimbursed for dues and assessments
incurred in relation to Executive's membership at a country club mutually agreed
upon by the chief executive officer of NBT Bank and the Executive.
(g) Withholding.
All
compensation to be paid to Executive hereunder shall be subject to required
withholding and other taxes.
(h) Expenses.
During
the Term of Employment, Executive shall be ▇▇▇▇-bursed for reasonable travel
and
other expenses incurred or paid by Executive in connection with the performance
of his 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
Commencement Date 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.
4. Confidential
Business Information; Non-Competition.
(a) Executive
acknowledges that certain business methods, creative techniques, and technical
data of NBTB and its affiliates and the like are deemed by NBTB to be and are
in
fact confidential business informa-tion of NBTB or its affiliates or are
en-trusted to third parties. Such confidential information includes but is
not
limited to procedures, methods, sales relation-ships developed while in the
service of NBTB or its affiliates, knowledge of customers and their
require-ments, marketing plans, marketing information, studies, forecasts,
and
surveys, competitive analyses, mailing and marketing lists, new business
proposals, lists of vendors, consul-tants, and other persons who render service
or provide material to NBTB or Pennstar Bank or their affiliates, and
composi-tions, ideas, plans, and methods belonging to or related to the affairs
of NBTB or Pennstar 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 informa-tion 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 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
or
its affiliates or use in any business or on behalf of any business competitive
with or substantially similar to any business of NBTB or Pennstar 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 or Pennstar
Bank or their affiliates. On or before the Termination Date, Executive shall
promptly deliver to NBTB any and all tangible, confidential information in
his
possession.
(b) Executive
hereby agrees that from the Commencement Date until the first anniversary of
the
Termination Date, Executive will not (i) interfere with the relationship of
NBTB
or Pennstar 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 Pennstar Bank or their
affiliates), or (ii) directly or indirectly divert or attempt to divert from
NBTB, Pennstar 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, Pennstar Bank or their affiliates with any of 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.
(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
(includ-ing, 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 juris-diction 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
juris-diction 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 (or its
affiliates) in
its
discretion may apply for and procure as owner and for its own benefit insurance
on the life of Executive, in such amount and in such form as NBTB 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, 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 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 represen-tation
or warranty of Executive in section 6(a) hereof to be true and correct when
made.
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:
▇▇
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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Attention:
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Chief
Executive Officer
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With
a
required copy to:
NBT
Bancorp Inc. Corporate Counsel
If
to
Executive:
▇▇.
▇▇▇▇▇
▇. ▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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 obliga-tions hereunder without
the consent of the other party.
9. Governing
Law.
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
conflict of law thereof. The parties hereby designate Chenango County, New
York
to be the proper jurisdic-tion and venue for any suit or action arising out
of
this Agree-ment. Each of the parties consents to personal jurisdic-tion 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 trans-actions contem-plated thereby
by certified or regis-tered 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 uncon-ditionally 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.
10. Entire
Agreement.
This
Agreement constitutes the entire understanding among NBTB and Executive relating
to the subject matter hereof. Any previous agreements or under-stand-ings
between the parties hereto or between Executive and Pennstar Bank or any of
its
affiliates 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 instru-ment 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 unenforce-able 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 contain-ing any such provision held to be invalid, illegal, or
unenforce-able) 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 related to this
Agreement, or the breach thereof, such dispute shall be referred to arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"). 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 to
resolve the dispute by mediation in accordance with the Commercial Rules of
Arbitration of AAA between the date of the issuance of the Arbitration Notice
and the date the dispute is set for arbitration. If the dispute is not settled
by the date set for arbitration, then any controversy or claim arising out
of
this Agreement or the 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. Any person serving as a mediator or arbitrator must have
at
least ten years' experi-ence in resolving commercial disputes through
arbitration. In the event any claim or dispute involves an amount in excess
of
$100,000, either party may request that the matter be heard by a panel of three
arbitrators; otherwise all matters subject to arbitration shall 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 such discovery shall be concluded within ninety days after the
date the matter is set for arbitration. In the event of any arbitration, the
arbitrator or arbitrators shall have the power to award reasonable attorney's
fees to the prevailing party. Any provision 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.
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 attorney's 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 attorney's fees.
14. Affiliation.
A
company will be deemed to be "affiliated" with NBTB or Pennstar Bank according
to the definition of "Affiliate" set forth in Rule 12b-2 of the General Rules
and Regulations under the Securi-ties 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.
IN
WITNESS WHEREOF, the parties hereto executed or caused this Agreement to be
executed as of the day and year first above written.
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