EMPLOYMENT AGREEMENT
Exhibit
10.1
This
EMPLOYMENT AGREEMENT (the "Agreement") made and entered into this first day
of
January 2005 and as amended on January 1, 2006, 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 is president and chief executive officer of NBT Bank, National
Association, a wholly-owned subsidiary of NBTB ("NBT Bank"), and president
and
chief executive officer of NBTB and as of May 2005 a director 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 agree-ments
hereinafter set forth, intending to be legally bound, the parties agree as
follows:
1. Employment;
Responsibilities and Duties.
(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) 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 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 invest-ments, and (iii) with the prior permis-sion of the chairman
of
the board of
NBTB,
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, 2010, provided, however, that on January 1, 2007 and on each January 1
thereafter, the Term of Agreement shall be extended 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 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 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 president and chief operating officer of NBT
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
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(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 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 immedi-ately
following the Termi-na-tion Date and ending upon and including the latest of
the
fifth anniversary of the Commence-ment Date or the third anniversary of the
Termination 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 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.
(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
plus improvements, 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) 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.
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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:
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(1)
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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
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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 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) 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;
4
(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 plus improvements,
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:
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(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
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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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5
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 no less than
$450,000 and subject to annual adjustments based on recommendations from the
NBTB Compensation and Benefits Committee that are in line with comparable
compensation for positions in companies of similar size and structure. 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 NBT 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 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, 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 five 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 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 reimburse-ment of
expenses for business use in accordance with section 3(h).
6
(f) Club
Dues.
During
the Term of Employment, Executive shall be reimbursed for dues and assessments
incurred in relation to Executive's membership at clubs mutually agreed upon
by
NBTB 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 xxxx-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 NBT Bank or their affiliates, and composi-tions,
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
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 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.
7
(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 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 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.
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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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00
Xxxxx Xxxxx Xxxxxx
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Xxxxxxx,
Xxx Xxxx 00000
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Attention:
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Xx.
Xxxxx X. Xxxxxxxx, Chairman
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With
a
required copy to:
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NBT
Bancorp Inc. Corporate Counsel
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If
to
Executive:
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Xx.
Xxxxxx X. Xxxxxxxx
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000
Xxxxxxxx Xxxxx
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Xxxxxxx,
Xxx Xxxx 00000
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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.
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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 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 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.
10
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 NBT 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.
11
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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By:
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/S/
Xxxxx X. Xxxxxxxx
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|
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Xxxxx
X. Xxxxxxxx
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|||
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Chairman
and
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|||
|
Chief
Executive Officer
|
|||
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XXXXXX
X. XXXXXXXX
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|||
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/S/
Xxxxxx X. Xxxxxxxx
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|||
12
