Exhibit 10.7
January 2009
NBT BANCORP INC. AND
SUBSIDIARIES
2009 EXECUTIVE INCENTIVE
COMPENSATION PLAN
NBT BANCORP INC. AND
SUBSIDIARIES
2009 EXECUTIVE INCENTIVE
COMPENSATION PLAN
Table of Contents
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Page
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3
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4
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5
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6-7
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Section II -
Participation
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7
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Section III -
Activating the Plan
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7-8
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Section IV -
Calculation of Awards
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8
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Section V -
President's Special Recommendations
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8
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Section VI -
Distribution of Awards
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9
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Section VII -
Plan Administration
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9
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Section VIII -
Amendment, Modification, Suspension or
Termination 9
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9
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Section IX -
Effective Date
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10
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Section X -
Employer Relations with Participants
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10
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Section XI -
Governing Law
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10
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APPENDIX
A
2009 Executive Incentive
Compensation Plan Pay-out Detail
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Corporate Performance/Personal
Goals % Split
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Level
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Executive
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Corporate
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Personal
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Total
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Level A
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Dietrich
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100%
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0%
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100%
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Level B-1
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Chewens
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66%
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34%
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100%
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Level B-1
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Raven
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66%
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34%
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100%
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Level B-2
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Levy
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50%
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50%
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100%
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Level C
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Scarlett
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50%
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50%
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100%
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Level C
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Stagliano
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50%
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50%
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100%
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Total Level A*
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Incentive Threshold
Payout
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37.5%
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Base Line
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75.0%
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Level 3
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85.0%
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Level 4
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90.0%
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Level 5
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95.0%
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Maximum Incentive
Payout
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100.0%
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Corp. Payout Level B-1
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Pers. Payout Level B-1
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Total Level B-1*
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Corp. Payout Level B-2
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Pers. Payout Level B-2
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Total Level B-2*
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Incentive Threshold
Payout
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15.5%
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8.0%
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23.5%
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11.8%
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11.8%
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23.5%
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Base Line
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31.0%
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16.0%
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47.0%
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23.5%
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23.5%
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47.0%
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Level 3
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38.8%
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20.0%
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58.8%
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29.4%
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29.4%
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58.8%
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Level 4
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46.5%
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24.0%
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70.5%
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35.3%
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35.3%
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70.5%
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Level 5
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54.3%
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28.0%
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82.3%
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41.1%
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41.1%
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82.3%
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Maximum Incentive
Payout
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62.0%
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32.0%
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94.0%
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47.0%
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47.0%
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94.0%
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Corp. Payout Level C
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Pers. Payout Level C
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Total Level C*
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Incentive Threshold
Payout
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7.8%
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7.8%
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15.5%
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Base Line
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15.5%
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15.5%
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31.0%
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Level 3
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19.4%
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19.4%
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38.8%
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Level 4
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23.3%
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23.2%
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46.5%
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Level 5
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27.1%
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27.2%
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54.3%
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Maximum Incentive
Payout
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31.0%
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31.0%
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62.0%
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* % of base salary at appropriate
level
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NBT BANCORP INC. AND
SUBSIDIARIES
Introduction
It is important
to examine the benefits that accrue to the organization through the
operation of the Executive Incentive Compensation Plan
(EICP). The Plan impacts directly on the success of the
organization and its purpose can be summarized as
follows:
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Provides Motivation: The opportunity for
incentive awards provides Executives with the impetus to "stretch"
for challenging, yet attainable, goals.
*
Provides Retention: By enhancing the
organization's competitive compensation posture.
*
Provides Management Team Building: By
making the incentive award dependent on the attainment of
organization goals, a "team orientation" is fostered among the
participant group.
*
Provides Individual Motivation: By encouraging
the participant to make significant personal contribution to the
corporate effort.
* Provides Competitive
Compensation Strategy: The implementation of
incentive arrangements is competitive with current practice in the
banking industry.
Highlights of
the 2009 Executive Incentive Compensation Plan (EICP) are listed
below:
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The Plan is
competitive compared with similar sized banking organizations and
the banking industry in general.
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The
Compensation Committee of the Board of Directors controls all
aspects of the Plan.
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All active
Executives are eligible for participation.
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The financial
criteria necessary for Plan operation consist of achieving certain
levels of Earnings Per Share (EPS) for the Company and its
Subsidiaries as applicable. The Committee may
provide in any such Award that any evaluation of performance may
include or exclude any of the following events that occur during a
Performance Period: (a) the effect of changes in tax laws,
accounting principles, or other laws or provisions affecting
reported results; (b) any reorganization and restructuring
programs; and (c) acquisitions or divestitures and related
expenses. To the extent such inclusions or exclusions affect Awards
to Covered Employees; they shall be prescribed in a form that meets
the requirements of Code Section 162(m) for
deductibility.
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Incentive
distributions will be made on or before March 15 of the year
following the Plan Year and will be based on the matrix in Appendix
A.
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Incentive
awards will be based on attainment of corporate
goals. Total incentive awards may contain Corporate,
Subsidiary, Divisional and Individual components. The
Corporate, Subsidiary and Divisional components are awarded by
virtue of performance related to pre-established goals and the
Individual component is awarded by virtue of individual performance
related to individual goals. No bonus will be paid
unless the Corporation achieves the threshold EPS goal set forth in
Appendix A.
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NBT BANCORP INC. AND
SUBSIDIARIES
The Board of Directors has established this 2009
Executive Incentive Compensation Plan. The 2009
Executive Incentive Compensation Plan is implemented pursuant to
the provisions of the 2008 Omnibus Incentive Plan for purposes of
paying performance-based compensation within the meaning of Section
162(m) of the Code. The purpose of the Plan is to meet
and exceed financial goals and to promote a superior level of
performance relative to the competition in our market
areas. Through payment of incentive compensation beyond
base salaries, the Plan provides reward for meeting and exceeding
financial goals.
SECTION I
– DEFINITIONS
Various terms used in the Plan are defined as
follows:
Award: An award granted under this Plan.
Base
Salary: The base salary
at the end of the Plan Year, excluding any bonuses, contributions
to Executive benefit programs, or other compensation not designated
as salary.
Board of
Directors: The Board of Directors of NBT
Bancorp Inc.
CEO: The CEO of NBT Bancorp
Inc.
Code: The Internal Revenue Code of 1986,
as now in effect or as hereafter amended.
Corporate,
Subsidiary and Divisional Goals: Those pre-established objectives and
goals of NBT Bancorp Inc. or its Subsidiaries and Divisions which
are required to activate distribution of awards under the
Plan.
Covered
Employee: A
Participant who is a Covered Employee within the meaning of
Sect
