EXHIBIT 10.7
Supplemental Retirement Agreement between NBT Bancorp Inc., NBT
Bank, National Association and Xxx X. Xxxxx made as of
January 1, 2000
SUPPLEMENTAL RETIREMENT AGREEMENT
This sets forth the terms of an agreement for the payment of
supplemental retirement income ("Agreement") made as of January 1, 2000 between
(i) NBT BANCORP INC., a Delaware corporation and a registered bank holding
company, and NBT BANK, NATIONAL ASSOCIATION, a national banking association
chartered under the laws of the United States, both having offices located at
Norwich, New York (collectively, the "Bank"), and (ii) XXX X. XXXXX, an
individual residing at Xxx Xxxxx Xxxxx, Xxxxxxx, Xxx Xxxx 00000, and who is a
member of a select group of management or highly compensated employees within
the meaning of section 201(2) of the Employee Retirement Income Security Act of
1974, as amended ("Minor").
1. PURPOSE OF THE AGREEMENT. The purpose of this Agreement is
to provide Minor a supplemental retirement benefit in accordance with the
terms of this Agreement.
2. DEFINITIONS. For purposes of this Agreement, the following
words shall have the meaning indicated:
(a) ACTUARIAL EQUIVALENT. "Actuarial Equivalent" shall
have the same meaning the term "Actuarial Equivalent" has under Section 2.03
of the Qualified Plan using the following actuarial assumptions:
MORTALITY: "Applicable Mortality Rate" as such
term is defined in Section 2.03c of the Qualified
Plan.
INTEREST RATE: "Applicable Interest Rate" as such
term is defined in Section 2.09b of the Qualified
Plan.
(b) BENEFICIARY. "Beneficiary" shall mean such living person
or living persons designated by Minor in accordance with subparagraph
5(a) to receive benefits under this Agreement after his death, or his
personal or legal representative, all as herein described and provided.
If no Beneficiary is designated by Minor or if no Beneficiary survives
Minor, the Beneficiary shall be Minor's estate.
(c) CAUSE. "Cause" shall mean Minor's:
(i) willful or gross misconduct with respect to the
business and affairs of the Bank, or with respect to any of
its affiliates for which Minor is assigned material
responsibilities or duties;
(ii) conviction of a felony (after the earlier of the
expiration of any applicable appeal period without perfection
of an appeal by Minor or the denial of any appeal as to which
no further appeal or review is available to Minor) whether or
not committed in the course of his employment by the Bank;
(iii) willful neglect, failure, or refusal to carry
out his duties under the Employment Agreement between NBT
Bancorp Inc. and Minor dated as of January 1, 2000 (the
"Employment Agreement") in a reasonable manner (other than any
such failure resulting from disability or death or from
termination by Minor for Good Reason, as defined in the
Employment Agreement) after a written demand for substantial
performance is delivered to Minor that specifically identifies
the manner in which the Bank believes that Minor has not
substantially performed his duties and he has not resumed
substantial performance of his duties on a continuous basis
within thirty days of receiving such demand; or
(iv) breach of any representation or warranty in
section 6(a) of the Employment Agreement or of any agreement
contained in section 1, 4, 5, or 6(b) of the Employment
Agreement, which breach is material and adverse to the Bank or
any of its affiliates for which Minor is assigned material
responsibilities or duties.
(d) CHANGE OF CONTROL. "Change of Control" shall mean a Change
in Control as such term is defined in the Change in Control Agreement
between Minor and the Bank dated January 1, 2000 (a revision of the
October 27, 1998 and January 2, 1997 agreements).
(e) CODE. "Code" shall mean the Internal Revenue Code of
1986, as amended.
(f) DETERMINATION DATE. "Determination Date" shall
mean the earlier of (i) the date of termination of Minor's
employment with the Bank or (ii) the first day of the month following
Minor's 65th birthday.
(g) FINAL AVERAGE COMPENSATION. "Final Average Compensation"
shall have the same meaning the term "Final Average Compensation" has
under Section 2.27 of the Qualified Plan, except that in determining
the amount of Compensation (as defined in Section 2.14 of the Qualified
Plan) to be used in calculating Final Average Compensation under
Section 2.27 of the Qualified Plan, Compensation shall not be subject
to the compensation limitation of section 401(a)(17) of the Code.
(h) FULL-TIME EMPLOYEE. "Full-Time Employee" shall mean an
employee who works not less than 1,000 hours in a calendar year.
(i) OTHER RETIREMENT BENEFITS. "Other Retirement
Benefits" shall mean the sum of:
(i) The annual benefit payable to Minor from the
Qualified Plan, plus
(ii) The annual benefit that could be provided by (A)
Bank contributions (other than elective deferrals) made on
Minor's behalf under the NBT Bancorp Inc. 401(k) and Employee
Stock Ownership Plan, and (B) actual earnings on contributions
-2-
in (A), if such contributions and earnings were converted to a
benefit payable on the Determination Date in the same form as
the benefit paid under this Agreement, using the same
actuarial assumptions as are provided under subparagraph 2(a).
The amount of Other Retirement Benefits shall be determined by
an actuary selected by the Bank, with such determination to be made
without reduction for payment of benefits prior to any stated "normal
retirement date" and without regard to whether Minor is receiving
payment of such benefits on the Determination Date. To the extent Minor
receives a payment of Other Retirement Benefits described in
subparagraph 2(i)(ii) prior to the date the Supplemental Retirement
Benefit is determined pursuant to this Agreement, the total of such
Other Retirement Benefits shall be determined by including and assuming
that such amounts earned interest at a variable rate equal to the
one-year United States Treasury xxxx rate as reported in the New York
edition of The Wall Street Journal on the Determination Date from the
date received to the date Other Retirement Benefits are calculated for
purposes of this Agreement.
(j) PRESENT VALUE. "Present Value" shall mean the present
value of a benefit determined on the basis of the following actuarial
assumptions:
MORTALITY: "Applicable Mortality Rate" as
such term is defined in Section
2.03c of the Qualified Plan.
INTEREST RATE: "Applicable Interest Rate" as such
term is defined in Section 2.09b of
the Qualified Plan.
(k) QUALIFIED PLAN. "Qualified Plan" shall mean the NBT
BANCORP Inc. Defined Benefit Pension Plan.
(l) SOCIAL SECURITY BENEFIT. "Social Security Benefit"
shall mean Minor's actual social security benefit at his
Social Security Retirement Age.
(m) SOCIAL SECURITY RETIREMENT AGE. "Social Security
Retirement Age" shall have the same meaning the term
"Social Security Retirement Age" has under Section 2.58 of the
Qualified Plan.
(n) YEAR OF SERVICE. "Year of Service" shall mean a
calendar year in which Minor completes not less than 1,000
hours of service.
3. AMOUNT OF SUPPLEMENTAL RETIREMENT BENEFIT.
(a) AMOUNT PAYABLE ON AND AFTER AGE 62. If Minor shall remain
employed by the Bank until reaching his 62nd birthday, serving as a
-3-
Full-Time Employee until such date, and subject to the other terms and
conditions of this Agreement, the Bank shall pay Minor an annual
"Supplemental Retirement Benefit" determined as follows:
(i) ON AND AFTER AGE 62 BUT BEFORE SOCIAL SECURITY
RETIREMENT AGE. Minor shall be entitled to a Supplemental
Retirement Benefit on and after his 62nd birthday but before
his Social Security Retirement Age in an amount equal to the
excess of (1) 50 percent of Minor's Final Average
Compensation, over (2) Minor's Other Retirement Benefits,
determined as of the Determination Date and calculated in
accordance with paragraph 2(i).
(ii) ON AND AFTER SOCIAL SECURITY RETIREMENT AGE.
Minor shall be entitled to a Supplemental Retirement Benefit
on and after his Social Security Retirement Age in an amount
equal to the excess of (1) 50 percent of Minor's Final Average
Compensation, over (2) the sum of (aa) Minor's Other
Retirement Benefits, determined as of the Determination Date
and calculated in accordance with paragraph 2(i), plus (bb)
Minor's Social Security Benefit.
(b) AMOUNT PAYABLE ON AND AFTER AGE 60 BUT BEFORE AGE 62. If
Minor shall remain employed by the Bank until reaching his 60th
birthday, serving as a Full-Time Employee until such date and he
continues to serve as a Full-Time Employee until the date of his
retirement, and he retires then or thereafter but before reaching his
62nd birthday, and subject to the other terms and conditions of this
Agreement, the Bank shall pay Minor on the date of his retirement,
pursuant to subparagraph 4(b), or to his spouse or other Beneficiary,
pursuant and subject to subparagraph 6(c) if he has died before his
62nd birthday, a reduced early Supplemental Retirement Benefit
calculated in accordance with the following schedule:
(i) If the date of Minor's retirement shall be on or
after his 60th birthday but before his 61st birthday, the Bank
shall pay Minor 60% of the Supplemental Retirement Benefit
calculated in accordance with subparagraph 3(a)(i); and
(ii) If the date of Minor's retirement shall be on or
after his 61st birthday but before his 62nd birthday, the Bank
shall pay Minor 70% of the Supplemental Retirement Benefit so
calculated.
(c) ENHANCED BENEFIT. Notwithstanding any provision of this
paragraph to the contrary, Minor's benefit hereunder shall be
calculated in accordance with section 3(c) of the Employment Agreement
between the Bank and Minor if, in accordance with the terms of such
section, Minor is entitled to the enhancement provided therein.
-4-
4. TIME OF PAYMENT.
(a) Except as provided in subparagraph 4(b) (early retirement)
and paragraph 6 (payment on death), the Bank shall pay the Supplemental
Retirement Benefit commencing on the first day of the month following
Minor's attainment of age 62.
(b) Notwithstanding subparagraph 4(a), the Bank shall commence
payment of an early Supplemental Retirement Benefit, in the amount
determined under subparagraph 3(b), on the first day of the month
following Minor's Determination Date in connection with early
retirement after reaching age 60 and prior to the date of his 62nd
birthday.
5. FORM OF PAYMENT.
(a) The Supplemental Retirement Benefit described in paragraph
3 of this Agreement shall be paid as a straight life annuity, payable
in monthly installments, for Minor's life; provided, however, that if
Minor has no surviving spouse and dies before having received 60
monthly payments, such monthly payments shall be continued to his
Beneficiary until the total number of monthly payments to Minor and his
Beneficiary equal 60, whereupon all payments shall cease and the Bank's
obligation under this Agreement shall be deemed to have been fully
discharged. If Minor and his Beneficiary shall die before having
received a total of 60 monthly payments, an amount equal to the
Actuarial Equivalent of the balance of such monthly payments shall be
paid in a single sum to the estate of the survivor of Minor and his
Beneficiary. If Supplemental Retirement Benefits are payable in the
form described in this subparagraph 5(a), Minor shall designate in
writing, as his Beneficiary, any person or persons, primarily,
contingently or successively, to whom the Bank shall pay benefits
following Minor's death if Minor's death occurs before 60 monthly
payments have been made.
(b) Notwithstanding the form of payment described in
subparagraph 5(a), if Minor is married on the date payment of the
Supplemental Retirement Benefit commences, the benefit shall be paid as
a 50% joint and survivor annuity with Minor's spouse as the
Beneficiary. The 50% joint and survivor annuity shall be the Actuarial
Equivalent of the benefit described in subparagraph 5(a). If the
Supplemental Retirement Benefit is payable pursuant to this
subparagraph 5(b), but Minor's spouse fails to survive him, no payments
will be made pursuant to this Agreement following Minor's death.
(c) Notwithstanding the foregoing provisions of this paragraph
5, the Bank, in its sole discretion, may accelerate the payment of all
or any portion of the Supplemental Retirement Benefit or the reduced
early Supplemental Retirement Benefit at any time. Any payment
accelerated in accordance with this subparagraph 5(c) shall be the
Actuarial Equivalent of the payment being accelerated.
-5-
6. PAYMENTS UPON MINOR'S DEATH.
(a) Except as provided in subparagraphs 6(b) and (c), if Minor
shall die before his 62nd birthday, no payment shall be due his estate
under this Agreement.
(b) If Minor's death shall occur on or after his 60th
birthday, after he has retired but before payment of any Supplemental
Retirement Benefit has commenced, Minor's surviving spouse shall be
paid as a straight life annuity 50 percent of the Supplemental
Retirement Benefit for her life commencing within 30 days following
Minor's death. Such payments shall be made in monthly installments,
subject to the right of the Bank to accelerate payment at any time in
accordance with subparagraph 5(c).
(c) If Minor elects early retirement pursuant to subparagraph
3(b) and he dies before payment of any Supplemental Retirement Benefit
has commenced, Minor's surviving spouse shall be paid, in monthly
installments, as a straight life annuity, 50 percent of such
Supplemental Retirement Benefit for her life commencing within 30 days
following Minor's death, subject to the right of the Bank to accelerate
such payments as provided in subparagraph 5(c). However, if Minor's
spouse fails to survive him, the Bank shall pay to Minor's estate a
lump sum benefit equal to 50 percent of the Present Value of Minor's
Supplemental Retirement Benefit.
(d) Except as otherwise provided in subparagraph 6(c), no
payments shall be made under this Agreement if Minor dies before
payment of any Supplemental Retirement Benefit begins and his spouse
fails to survive him.
(e) If Minor's death shall occur after payment of a
Supplemental Retirement Benefit has commenced, Minor surviving spouse
or other Beneficiaries shall receive payments under this Agreement to
the extent provided in paragraph 5.
7. FORFEITURE FOR CAUSE. Notwithstanding any other provision of
this Agreement, if Minor's employment with the Bank is terminated for Cause,
Minor and his spouse or other Beneficiaries shall forfeit all rights to any
payment under this Agreement.
8. POWERS. The Bank shall have such powers as may be necessary to
discharge its duties under this Agreement, including the power to interpret and
construe this Agreement and to determine all questions regarding employment,
disability status, service, earnings, income and such factual matters as birth
and marital status. The Bank's determinations hereunder shall be conclusive and
binding upon the parties hereto and all other persons having or claiming an
interest under this Agreement. The Bank shall have no power to add to, subtract
from, or modify any of the terms of this Agreement. The Bank's determinations
hereunder shall be entitled to deference upon review by any court, agency or
other entity empowered to review its decisions, and shall not be overturned or
set aside by any court, agency or other entity unless found to be arbitrary,
capricious or contrary to law.
-6-
9. CLAIMS PROCEDURE.
(a) Any claim for benefits by Minor, his spouse or other
Beneficiaries shall be made in writing to the Bank. In this paragraph,
Minor and his Beneficiaries are referred to as "claimants."
(b) If the Bank denies a claim in whole or in part, it shall
send the claimant a written notice of the denial within 90 days after
the date it receives a claim, unless it needs additional time to make
its decision. In that case, the Bank may authorize an extension of an
additional 90 days if it notifies the claimant of the extension within
the initial 90-day period. The extension notice shall state the reasons
for the extension and the expected decision date.
(c) A denial notice shall contain:
(i) The specific reason or reasons for the denial
of the claim;
(ii) Specific reference to pertinent Agreement
provisions upon which the denial is based;
(iii) A description of any additional material or
information necessary to perfect the claim, with an
explanation of why the material or information is necessary;
and
(iv) An explanation of the review procedures
provided below.
(d) Within 60 days after the claimant receives a denial
notice, he or she may file a request for review with the Bank. Any such
request must be made in writing.
(e) A claimant who timely requests review shall have the right
to review pertinent documents, to submit additional information or
written comments, and to be represented.
(f) The Bank shall send the claimant a written decision on any
request for review within 60 days after the date it receives a request
for review, unless an extension of time is needed, due to special
circumstances. In that case, the Bank may authorize an extension of an
additional 60 days, provided it notifies the claimant of the extension
within the initial 60-day period.
(g) The review decision shall contain:
(i) The specific reason or reasons for the
decision; and
-7-
(ii) Specific reference to the pertinent Agreement
provisions upon which the decision is based.
(h) If the Bank does not send the claimant a review decision
within the applicable time period, the claim shall be deemed denied on
review.
(i) The denial notice or, in the case of a timely review, the
review decision (including a deemed denial under subparagraph 9(h))
shall be the Bank's final decision.
10. ASSIGNMENT. Neither Minor nor his spouse or other Beneficiaries may
transfer his, her or their right to payments to which he, she or they are
entitled under this Agreement. Except insofar as may otherwise be required by
law, any Supplemental Retirement Benefit payable under this Agreement shall not
be subject in any manner to alienation by anticipation, sale, transfer,
assignment, pledge or encumbrance, nor subject to the debts, contracts, or
liabilities of Minor or his spouse or other Beneficiaries.
11. CONTINUED EMPLOYMENT. This Agreement shall not be construed
as conferring on Minor a right to continued employment with the Bank.
12. FUNDING.
(a) The Supplemental Retirement Benefit at all times shall be
entirely unfunded, and no provision shall at any time be made with
respect to segregating any assets of the Bank for payments of any
benefits hereunder, except that in the event of a Change of Control,
the Bank, within five (5) days of such Change of Control, shall fund a
grantor trust within the meaning of section 671 of the Code with an
amount sufficient to cover all potential liabilities under this
Agreement.
(b) Neither Minor nor his spouse or other Beneficiaries shall
have any interest in any particular assets of the Bank by reason of the
right to receive a benefit under this Agreement. Minor and his spouse
or other Beneficiaries shall have only the rights of general unsecured
creditors of the Bank with respect to any rights under this Agreement.
(c) Nothing contained in this Agreement shall constitute a
guarantee by the Bank or any entity or person that the assets of the
Bank will be sufficient to pay any benefit hereunder.
13. WITHHOLDING. Any payment made pursuant to this Agreement shall be
reduced by federal and state income, FICA or other employee payroll, withholding
or other similar taxes the Bank may be required to withhold. In addition, as the
Supplemental Retirement Benefit accrues during Minor's employment with the Bank,
the Bank may withhold from Minor's regular compensation from the Bank any FICA
or other employee payroll, withholding or other similar taxes the Bank may be
required to withhold.
-8-
14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon,
and shall inure to the benefit of, the successors and assigns of the Bank.
15. APPLICABLE LAW. This Agreement shall be construed and
administered in accordance with the laws of the State of New York, except to the
extent preempted by federal law.
16. AMENDMENT. This Agreement may not be amended, modified or
otherwise altered except by written instrument executed by both parties.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding of the parties, and supersedes all prior agreements
or understanding (whether oral or written) between the parties, relating to
deferred compensation and/or supplemental retirement income.
The parties hereby execute this Agreement as follows:
NBT BANCORP INC.
By: /S/ XXXXXXX X. XXXXXXX
Date: 1/1/2000 Its: CHAIRMAN
----------------------------- ---------------
NBT BANK, NATIONAL ASSOCIATION
By: /S/ XXXXX X. XXXXXXXX
Date: 1/1/2000 Its: CHAIRMAN & CEO
----------------------------- ------------------
Date: 1/1/2000 /S/ XXX X. XXXXX
---------------------------- -----------------------
XXX X. XXXXX
-9-
