EXHIBIT 10.2
Form of Employment Agreement between NBT Bancorp Inc. and Xxxxxx X. Xxxxxxxx
made as of January 1, 2000 and revised on January 1, 2002 and again on August 2,
2003.
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EMPLOYMENT AGREEMENT (REVISED)
This EMPLOYMENT AGREEMENT (the "Agreement") made and entered into this
first day of January, 2000 and revised on January 1, 2002 and again on August 2,
2003, by and between XXXXXX X. XXXXXXXX ("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 agrees to serve as president and chief operating officer
of NBT Bank, National Association, a wholly-owned subsidiary of NBTB ("NBT
Bank") until December 31, 2003, as president and chief executive officer of NBT
Bank and as president of NBTB from January 1, 2004 to December 31, 2005 and then
as president and chief executive officer of NBTB as of January 1, 2006.
Further, Executive will continue to serve as a director of NBT Bank and in
addition, as of January 1, 2005, will be appointed a director of NBTB and stand
for election at the 2005 Annual Meeting of NBTB; and
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 agreements hereinafter set forth, intending to be legally bound, the parties
agree as follows:
1. Employment; Responsibilities and Duties.
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(a) NBTB hereby agrees to employ Executive, and Executive hereby
agrees to serve in the capacities delineated above during the Term of
Employment. Executive shall have such executive duties, responsibilities, and
authority as shall be set forth in the bylaws of NBT Bank or as may otherwise be
determined by NBTB or by NBT Bank. During the Term of Employment, Executive
shall report directly to the chairman of the board of NBTB.
(b) NBTB hereby agrees to cause Executive to be reelected to the
board of directors of NBT Bank for successive terms throughout the Term of
Employment and further agrees to appoint and subsequently nominate Executive to
the board of directors of NBTB as of January 1, 2005.
(c) 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 chairman of the board of NBTB, 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 investments, and (iii) with the prior
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permission of the chairman of the board 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.
2. Term of Employment.
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(a) The term of this Agreement ("Term of Employment") shall be the
period commencing on the date of this Agreement (the "Commencement Date") and
continuing until the Termination Date, which shall mean the earliest to occur
of:
(i) the fifth anniversary of the Commencement Date;
(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 NBT 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 specifically 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 representation
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 responsibilities or duties;
or
(v) Executive's resignation from his position as president
and chief operating officer of NBT Bank other than for "Good Reason," as
hereinafter defined; or
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(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 as president and chief
operating officer of NBT 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 occurrence 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 arrangements 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 third anniversary of the Commencement Date, 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; and
(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 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.
(iii) if, within eighteen (18) months following the
Termination Date, Executive should sell his principal residence in the Norwich
Rand XxXxxxx Metropolitan Area as determined by Rand XxXxxxx & Company (the
"Norwich RMA") and relocate to a place outside of the Norwich RMA, (A)
reimbursement for any shortfall between the net proceeds on the sale of his
principal residence and the purchase price, including direct, necessary and
reasonable transaction costs incurred in connection with such purchase, as
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determined by the chief financial officer of NBTB, for such residence, and
including direct, necessary and reasonable expenses, as determined by the chief
financial officer of NBTB, incurred to prepare the residence for sale, (B)
reimbursement for direct, necessary and reasonable expenses, as determined by
the chief financial officer 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 NBT Bank of 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:
(1) with regard to amounts already paid by NBTB or NBT 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
(2) 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.
(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 Agreement,
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 arrangements 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(g)
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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;
(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 Norwich
RMA and relocate to a place outside of the Norwich RMA, (A) reimbursement for
any shortfall between the net proceeds on the sale of his principal residence
and the purchase price, including direct, necessary and reasonable transaction
costs incurred in connection with such purchase, as determined by the chief
financial officer of NBTB, for such residence, and including direct, necessary
and reasonable expenses, as determined by the chief financial officer of NBTB,
incurred to prepare the residence for sale, (B) reimbursement for direct,
necessary and reasonable expenses, as determined by the chief financial officer
of NBTB, 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:
(1) 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
(2) 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.
3. Compensation. For the services to be performed by Executive for
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NBTB and its affiliates under this Agreement, Executive shall be compensated in
the following manner:
(a) Salary. During the Term of Employment:
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(i) NBTB shall pay Executive a salary, which, on an annual
basis, shall not be less than $281,0000 during 2003, $310,000 during 2004 and
$350,000 during 2005. Salary commencing on January 1, 2006 will be negotiated
between Executive and the chairman of the board of NBTB based on recommendations
from the NBTB Compensation and Benefits Committee but in no case less than
$350,000. 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
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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.
(c) Stock Options and NBT Performance Share Plan. Each January or
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February annually during the Term of Employment, 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 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 any 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,
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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
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entitled to the use of an automobile owned by NBTB or an affiliate of NBTB, the
make and model of which automobile shall be appropriate to an officer of
Executive's rank, and which shall be replaced with a new automobile every two
years (or earlier if accumulated mileage exceeds 50,000 miles). Executive shall
be responsible for all expenses of ownership and use of any such automobile,
subject to reimbursement of expenses for business use in accordance with section
3(h).
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(f) Country Club Dues. During the Term of Employment, Executive
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shall be reimbursed for dues and assessments incurred in relation to Executive's
membership at a country club mutually agreed upon by NBTB and the Executive.
(g) Withholding. All compensation to be paid to Executive
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hereunder shall be subject to required withholding and other taxes.
(h) Expenses. During the Term of Employment, Executive shall be
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reimbursed 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.
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(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 information of NBTB
or its affiliates or are entrusted to third parties. Such confidential
information includes but is not limited to procedures, methods, sales
relationships developed while in the service of NBTB or its 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 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
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 or NBT Bank or their affiliates. On or before the Termination
Date, Executive shall promptly deliver to NBTB any and all tangible,
confidential information in his position.
(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 NBT Bank or its 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 its affiliates), or (ii) directly or indirectly divert or attempt to
divert from NBTB or NBT Bank or its affiliates any business in which any of them
has been actively engaged during the Term of Employment, nor interfere with the
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relationship of NBTB or NBT Bank or its 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 (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
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Executive, NBTB 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.
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(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,
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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.
7. Notices. All notices, consents, waivers, or other communications
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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:
NBT Bancorp Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxxx
Chairman, President and Chief Executive Officer
With a required copy to:
NBT Bancorp Inc. Corporate Counsel
If to Executive:
Xx. Xxxxxx X. Xxxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 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
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or obligations hereunder without the consent of the other party.
9. Governing Law. This Agreement shall be governed by, construed, and
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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 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 constitutes the entire
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understanding among NBTB and Executive relating to the subject matter hereof.
Any previous agreements or understandings between the parties hereto or between
Executive and NBT 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 instrument in writing signed by the party against whom any waiver,
change, discharge, or termination is sought.
11. Illegality; Severability.
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(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
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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' experience 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
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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
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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
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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
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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.
NBT BANCORP INC.
By: /S/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
Chairman, President and Chief Executive Officer
XXXXXX X. XXXXXXXX
/S/ Xxxxxx X. Xxxxxxxx
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