EMPLOYMENT AGREEMENT
Exhibit
10.27
This
EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into this 23rd day of
April 2007, by and between Xxxxxxx X. Xxxx ("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 serving as the Executive Vice President, Regional President,
Capital Region of NBT Bank, National Association, a national banking association
which is a wholly-owned subsidiary of NBTB (“NBT Bank”);
WHEREAS,
the parties desire to enter into this Agreement, setting forth the terms and
conditions of the continued employment relationship of Executive with
NBTB;
NOW,
THEREFORE, in consideration of the foregoing and the mutual promises, covenants
and agreements set forth in this Agreement, intending to be legally bound, the
parties agree as follows:
1.
Employment;
Responsibilities and Duties.
(a) NBTB
hereby agrees to continue to employ Executive and to cause NBT Bank and any
successor organization to NBT Bank to employ Executive, and Executive hereby
agrees to serve as the Executive Vice President, Regional President, Capital
Region of NBT Bank and any successor organization to NBTB or NBT Bank, as
applicable, during the Term of Employment (as such term is defined
below). During the Term of Employment, Executive shall perform all
duties, and responsibilities, and have the authority as shall be set forth in
the bylaws of NBTB or NBT Bank or as may otherwise be determined and assigned to
his by NBTB or by
NBT Bank.
(b) Executive
shall devote his full working time and best efforts to the performance of his
responsibilities and duties hereunder. During the Term of Employment, Executive
shall not, without the prior written consent of the Chief Executive Officer of
NBTB, render services as an employee, independent contractor, or otherwise,
whether or not compensated, to any person or entity other than NBTB, NBT Bank or
their affiliates; provided that Executive may, where involvement in such
activities does not individually or in the aggregate significantly interfere
with the performance 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 permission of the Chief Executive
Officer 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
initial term of employment under this Agreement shall be for the period
commencing on the date hereof and ending on January 1, 2008 (the “Initial
Term”), provided, however, that on December 31, 2007, and each December 31st
thereafter, the term of the agreement shall extend itself by one additional year
(the “Extended Term”), unless NBTB has given contrary written notice to
Executive at least 90 days before any such renewal date. The Initial
Term and all such Extended Terms are collectively referred to herein as the
“Term of Employment.”
(b) Executive’s
employment with NBTB shall not terminate prior to the expiration of the Initial
Term or any Extended Term, except as provided below:
(i)
Voluntary
Termination. Executive may terminate this Agreement upon not
less than 90 days prior written notice delivered to NBTB, in which event
Executive shall be entitled to compensation and benefits earned or accrued
through the effective date of termination (the “Termination Date”).
(ii) Termination Upon
Death. This Agreement shall terminate upon Executive’s death,
in which event Executive’s estate shall be entitled to compensation and benefits
earned or accrued through the date of death.
(iii) Termination Upon
Disability. NBTB may terminate this Agreement upon Executive’s
disability. For purposes of this Agreement, Executive’s inability to
perform his duties hereunder by reason of physical or mental illness or injury
for a period of at least 90 consecutive days or at least 120 days in any period
of 12 consecutive months (the “Disability Period”) shall constitute
disability. The determination of disability shall be made by a
physician selected by NBTB. During the Disability Period, Executive
shall be entitled to the Base Salary (as such term is defined below) otherwise
payable during that period, reduced by any other NBTB-provided benefits to which
Executive may be entitled, which benefits are specifically payable solely on
account of such disability (including, but not limited to, benefits provided
under any disability insurance policy or program, worker’s compensation law, or
any other benefit program or arrangement). In the event of
termination upon Executive’s disability, Executive shall be entitled to
compensation or benefits earned or accrued through the Termination
Date.
(iv) Termination for
Cause. NBTB may terminate Executive’s employment for Cause by
written notice to Executive. For purposes of this Agreement, “Cause”
shall mean Executive’s: (1) personal dishonesty, incompetence (which shall be
measured against standards generally prevailing in the financial institutions
industry), willful or gross misconduct with respect to the business and affairs
of NBTB or NBT Bank, or with respect to any of their affiliates for which
Executive is assigned material responsibilities or duties; (2) willful neglect,
failure, or refusal to carry out his duties hereunder in a reasonable
manner 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 such substantial performance within 21 days of receiving such
demand; (3) willful violation of any law, rule, or regulation (other than
traffic violations or similar offenses) or the conviction of a felony, whether
or not committed in the course of his employment with NBTB; (4) being a specific
subject of a final cease and desist order from, written agreement with, or other
order or supervisory direction from, any federal or state regulatory authority;
(5) conduct tending to bring NBTB, NBT Bank or any of their affiliates into
public disgrace or disrepute; or (6) breach of any representation or warranty in
section 6(a) hereof or of any agreement contained in section 1, 4, 5 or 6(b)
hereof.
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Notwithstanding
any other term or provision of this Agreement to the contrary, if Executive’s
employment is terminated for Cause, Executive shall forfeit all rights to
compensation and benefits otherwise provided pursuant to this Agreement;
provided, however, that the Base Salary shall be paid through the Termination
Date.
(v) Termination Without
Cause. NBTB may terminate Executive’s employment for reasons
other than Cause upon not less than 30 days prior written notice delivered to
Executive, in which event Executive shall be entitled to the Base Salary for a
period of 12 months following the Termination Date and the compensation and
benefits earned or accrued through the Termination Date.
(vi) Termination for Good
Reason. If Executive terminates his employment with NBTB for
Good Reason, other than following a Change of Control, such termination shall be
deemed to have been a termination by NBTB of the Executive’s employment without
Cause and Executive shall be entitled to receive all benefits and payments due
to his under such a termination.”Good Reason” shall mean, without Executive's
express written consent, reassignment of Executive to a position other than for
"Cause," or a decrease in the amount or level of Executive's salary or benefits
from the amount or level established herein.
(vii) Resignation. Effective
upon Executive’s termination of employment for any reason, Executive hereby
resigns from any and all offices and positions related to Executive’s employment
with NBTB, NBT Bank or any affiliates thereof, and held by Executive at the time
of termination.
(viii) Regulatory
Limits. Notwithstanding any other provision in this Agreement
NBTB may terminate or suspend this Agreement and the employment of Executive
hereunder, as if such termination were for Cause under section 2(b)(iv) hereof,
to the extent required by the applicable federal or state statue related to
banking, deposit insurance or bank or savings institution holding companies or
by regulations or orders issued by the Office of the Controller of the Currency,
the Federal Deposit Insurance Corporation or any other state or federal banking
regulatory agency having jurisdiction over NBT Bank or NBTB, and no payment
shall be required to be made to or for the benefit of Executive under this
Agreement to the extent such payment is prohibited by applicable law, regulation
or order issued by a banking agency or a court of competent jurisdiction;
provided, that it shall be NBTB’s burden to prove that any such action was so
required
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(c) 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 April 23, 2007
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:
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(i)
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compensation
and benefits earned or accrued through the Termination Date;
and
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(ii)
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the
severance payment and other benefits provided in the Change-in-Control
Agreement.
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(d) Any
provision of this Section 2 to the contrary notwithstanding, in the event that
the Employment of the Executive with NBTB is terminated in any situation
described in section 3 of 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, and if as of the Termination Date the Executive
is a “key employee” for the purposes of Section 409A of the Internal Revenue
Code of 1986, as amended, and the regulations promulgated thereunder, NBTB will
delay the payment of such severance payments six (6) months from the date they
otherwise would be paid hereunder.
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) Base
Salary. During the Term of Employment:
(i)
NBTB
shall pay Executive a salary which, on an annual
basis, shall be $198,600.00 (the “Base Salary”) commencing on December 12,
2006. Thereafter, Executive’s salary may, in the sole
discretion of NBTB, be negotiated between Executive and the Chief Executive
Officer of NBTB based on recommendations from NBTB’s Compensation and Benefits
Committee and in line with compensation for comparable positions in companies of
similar size and structure, but in no case less than $198,600.00. Adjustments to
the Base Salary, if any, shall be determined by NBTB. The Base 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 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.
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(c) Stock Options and Restricted
Stock. Each January or February annually during the Term of
Employment, Executive will be eligible to be granted a non-statutory
("non-qualified") stock option (each an "Option") to purchase the number of
shares of the common stock of NBTB, $0.01 par value, (the "NBTB Common
Stock"), pursuant
to the NBT Bancorp Inc. 1993 Stock Option Plan, as amended, or any appropriate
successor plan (the "Stock Option Plan"), computed by using a formula approved
by NBTB that is commensurate with 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 as set forth in the Stock Option
Plan, 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 the NBTB Performance
Share Plan as applicable to officers of Executive’s rank subject to the terms,
conditions and vesting schedule set forth in the NBT Bancorp Inc. Performance
Share Plan, dated May 1, 2003.
(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 date hereof 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 shall
Executive be entitled to less than four weeks of paid vacation per
year.
(e) Country Club
Dues. During the Term of Employment, Executive shall be
eligible for a bank-paid membership at a country club mutually agreed upon by
the chief executive officer of NBTB and the Executive.
(f) Withholding. All
compensation to be paid to Executive hereunder shall be subject to required
benefit deductions, tax withholding and other deductions required by
law.
(g) Expenses. During
the Term of Employment, Executive shall be reimbursed for reasonable travel and
other expenses incurred or paid by Executive in connection with the performance
of her 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
date hereof 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 during the term of his employment he has been and will
continue to be entrusted with, have access to and become familiar with various
trade secrets and other confidential business information of NBTB, NBT Bank
and/or their affiliates which have been developed and maintained at great effort
and expense, have been kept protected and confidential, are of great value to
NBTB, NBT Bank and/or their affiliates, and provide them with a significant
competitive advantage. Such confidential information includes but is
not limited to procedures, methods, sales relationships developed while in the
service of NBTB, NBT Bank or their 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 hold in the strictest confidence and 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, NBT Bank or their affiliates or use
in business or on behalf of any business competitive with or substantially
similar to any business of NBTB, 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, NBT Bank or their
affiliates. On or before the Termination Date, Executive shall
promptly deliver to NBTB all material containing NBTB’s confidential information
including any photocopies, extracts or summaries of it) in his possession,
custody or control.
(b) Executive
hereby agrees that from the Commencement Date until the first anniversary of the
Termination Date, Executive will not, for any reason, directly or indirectly,
either personally or on behalf of any other person or entity (whether as a
director, stockholder, owner, partner, officer, consultant, principal, employee,
agent or otherwise): (i) interfere with the relationship of NBTB or NBT Bank or
their affiliates with any of their employees, suppliers, agents, or
representatives (including, without limitation, causing or helping another
business to hire any employee of NBTB or NBT Bank or their
affiliates), (ii) divert or attempt to divert from NBTB,
NBT Bank or their affiliates any business in which any of them has been actively
engaged during the Term of Employment, nor interfere with the relationship of
NBTB, NBT Bank or their affiliates with any of their customers or prospective
customers, or (iii) take any action which is intended, or would reasonably be
expected, to adverely affect NBTB, NBT Bank or their affiliates, their business,
reputation, or their relationship with 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.
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(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, NBT Bank or their affiliates, in their discretion, may apply
for and procure as owner, and for their own benefit, insurance on the life of
Executive, in such amount and in such form as NBTB, NBT Bank or their affiliates
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, NBT Bank
or their affiliates, 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, NBT Bank or their affiliates has
applied for insurance.
6. Representations and
Warranties.
(a) Executive
represents and warrants to NBTB that his execution, delivery, and performance of
this Agreement will not result in or constitute a breach of or conflict with any
term, covenant, condition, or provision of any commitment, contract, or other
agreement or instrument, including, without limitation, any other employment
agreement, to which Executive is or has been a party.
(b) Executive
shall indemnify, defend, and hold harmless NBTB for, from, and against any and
all losses, claims, suits, damages, expenses, or liabilities, including court
costs and counsel fees, which NBTB has incurred or to which NBTB may become
subject, insofar as such losses, claims, suits, damages, expenses, liabilities,
costs, or fees arise out of or are based upon any failure of any representation
or warranty of Executive in section 6(a) hereof to be true and correct when
made.
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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:
00 Xxxxx
Xxxxx Xxxxxx
Xxxxxxx,
Xxx Xxxx 00000
Attention: Chief
Executive Officer
With a
required copy (which shall not constitute notice) to:
Xxxxxx X.
Xxxxx, Esq.
Xxxxx
& Xxxxxxx L.L.P.
000
00xx
Xxxxxx, X.X.
Xxxxxxxxxx,
X.X. 00000-0000
Fax:
(000) 000-0000
If to
Executive:
Xx.
Xxxxxxx X. Xxxx
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 obligations hereunder without
the consent of the other party.
9.
Governing Law,
Jurisdiction and Venue. 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 conflicts 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, together with the Change-in-Control Agreement, constitutes the entire
understanding between NBTB, NBT Bank and their affiliates, and Executive
relating to the subject matter hereof. Any previous discussions,
agreements, commitments or understandings of any kind or
nature between the
parties hereto or between Executive and NBTB, NBT Bank or any of their
affiliates, whether oral or written, 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.
(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 performance (which right shall not
be subject to arbitration), if a dispute arises out of or is in any way related
to this Agreement or the asserted breach thereof, such dispute shall be referred
to arbitration before the American Arbitration Association the (“AAA”) pursuant
to the AAA’s National Rules for the Resolution of Employment Disputes (the
“Arbitration Rules”). 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 between the date of the issuance of the Arbitration
Notice and the date the dispute is set for arbitration to resolve the dispute by
mediation in accordance with the Arbitration Rules. If the dispute is
not resolved by the date set for arbitration, then any controversy or claim
arising out of this Agreement or the asserted 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. In the event any claim or dispute
involves an amount in excess of $100,000, either party may request that the
matter 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 discovery shall be
concluded within 90 days after the date the matter is set for
arbitration. The arbitrator or arbitrators shall have the power to
award reasonable attorneys’ fees to the prevailing party. Any
provisions 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.
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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 attorneys’
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 attorneys’ fees.
14. Affiliation. A
company will be deemed to be an "affiliate" of,
or “affiliated” NBTB 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 inserted for convenience of
reference only and shall in no way modify or restrict any of the terms or
provisions hereof.
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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/ Xxxxxx X. Xxxxxxxx
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Xxxxxx
X. Xxxxxxxx
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President/CEO
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/S/ Xxxxxxx X. Xxxx
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Xxxxxxx
X. Xxxx
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Executive
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