Exhibit 10.1
EMPLOYMENT AGREEMENT
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 MARTIN A. DIETRICH ("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
(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
McNally Metropolitan Area as determined by Rand McNally &
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.
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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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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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;
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(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
