November 13, 2008 Michael J. Chewens
Exhibit
10.28
November
13, 2008
Xxxxxxx
X. Xxxxxxx
00 Xxxx
Xxxxxx Xxxx
Xxxxxx,
Xxx Xxxx 00000
Re:
Employment Agreement and Change in Control -- Severance Agreement
Amendment
Dear
Xxxxxxx:
As you
are aware, in 2004 a new Section 409A was added to the Internal Revenue Code by
the American Jobs Creation Act of 2004 (the “Act”). The Act made
significant changes in the tax law as it is applies to executive compensation.
In late September of 2005 the Internal Revenue Service published proposed
regulations relating to compliance with the Act. One change involves
delaying distributions to “key employees” (as defined below) by a minimum of six
months. Therefore, severance payments payable under your current
employment contract with NBT Bancorp, Inc. (“NBTB”), dated January 1, 2005,
(“Employment Agreement”) must be made in compliance with the Act or a
substantial excise tax (payable by you) would be imposed.
For this
purpose, a “key employee” is generally one who is an officer of NBTB with annual
compensation greater than $130,000. See Section 416(i) of the
Internal Revenue Code and the regulations promulgated there under for a complete
definition of a “key employee”.
Your
Employment Agreement provides that you would be entitled to certain severance
payments if your employment with NBTB was involuntarily terminated (other than
“for cause”) or you resigned for Good Reason, as those terms are defined in the
Employment Agreement. Pursuant to the Employment Agreement, severance payments
would begin on the date immediately following the Termination Date (as defined
in the Employment Agreement) and continue for the term set forth in the
Employment Agreement.
Your
Change in Control -- Severance Agreement, dated July 23, 2001, (“Severance
Agreement”) provides that you are entitled to severance payments if, within 24
months following a Change in Control of NBTB, your employment with NBTB was
involuntarily terminated (other than for “Cause”) or you resigned for Good
Reason (or without Good Reason within 12 months following a Change in Control of
NBTB), as those terms are defined in the Severance
Agreement. Pursuant to the Severance Agreement, severance payments
would begin not later than the fifth business day following your Date of
Termination (as defined in the Severance Agreement) and continue for the term
set forth in the Severance Agreement.
If you
become entitled to the severance payments provided for in the Employment
Agreement or the Severance Agreement, and if you are in fact a key employee at
the time payment is owed to you, the Act provides that these payments will be
subject to a 20% excise tax.
Under the
Act, one of the ways to avoid application of the excise tax to severance due a
“key employee” under the terms of an employment agreement such as yours is to
defer payment for six (6) months after separation from employment. Accordingly,
the Compensation and Benefits Committee of NBTB has determined that in the event
you become entitled to severance payments under the Employment Agreement and/or
Severance Agreement, and if at this time you are in fact a “key employee” with
NBTB, it will defer commencement of your severance payments until six (6) months
after your employment with NBTB ends. In all other respects, both
your Employment Agreement and your Severance Agreement shall remain in full
force and effect.
In
accordance with section 10 of the Employment Agreement and section 10 of the
Severance Agreement, please sign the acknowledgement to this amendment below and
return one original to me. The other original is for your
files.
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Very
truly yours,
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By:
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/s/
Xxxxxx X. Xxxxxxxx
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Xxxxxx
X. Xxxxxxxx
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President
and
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Chief
Executive Officer
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Acknowledged
and Agreed to:
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/s/
Xxxxxxx X. Xxxxxxx
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Xxxxxxx
X. Xxxxxxx
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Senior
Executive Vice President and
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Chief
Financial Officer
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