Change in control agreement with Ronald M. Bentley dated May 1, 2003.
Exhibit
10.25
Change
in
control agreement with ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ dated May 1, 2003.
May
1,
2003
▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇.
▇▇ ▇▇▇▇▇
Dear
▇▇.
▇▇▇▇▇▇▇:
NBT
Bancorp Inc. (which, together with its wholly-owned subsidiary, NBT Bank,
National Association, is referred to as the "Company") considers the stability
of its key management group to be essential to the best interests of the Company
and its shareholders. The Company recognizes that, as is the case with many
publicly-held corporations, the possibility of a change in control may arise
and
that the attendant uncertainty may result in the departure or distraction of
key
management personnel to the detriment of the Company and its
shareholders.
Accordingly,
the Board of Directors of the Company (the "Board") has determined that
appropriate steps should be taken to encourage members of the Company's key
management group to continue as employees notwithstanding the possibility of
a
change in control of the Company.
The
Board
also believes it important that, in the event of a proposal for transfer of
control of the Company, you be able to assess the proposal and advise the Board
without being influenced by the uncertainties of your own
situation.
In
order
to induce you to remain in the employ of the Company, this Agreement, which
has
been approved by the Board, sets forth the severance compensation which the
Company agrees will be provided to you in the event your employment with the
Company is terminated subsequent to a "change in control" of the Company under
the circumstances described below.
Agreement
to Provide Services; Right to Terminate.
(a) Termination
Prior to Certain Offers.
Except
as otherwise provided in paragraph (b) below, or in any written employment
agreement between you and theCompany,
the Company or you may terminate your employment at any time. If, and only
if,
such termination occurs after a "change in control of the Company" (as defined
in section 6), the provisions of this Agreement regarding the payment of
severance compensation and benefits shall apply.
(b) Termination
Subsequent to Certain Offers.
In the
event a tender offer or exchange offer is made by a "person" (as defined in
section 6) for more than 30 percent of the combined voting power of the
Company's outstanding securities ordinarily having the right to vote at
elections of directors ("Voting Securities"), including shares of common
stock, no par value, of the Company (the "Company Shares"), you agree that
you
will not
leave the employ of the Company (other than as a result of Disability as such
term is defined in section 6) and will render services to the Company in the
capacity in which you then serve until such tender offer or exchange offer
has
been abandoned or terminated or a change in control of the Company has occurred
as a result of such tender offer or exchange offer.
If,
during the period you are obligated to continue in the employ of the Company
pursuant to this section l(b), the Company reduces your compensation, terminates
your employment without Cause, or you provide written notice of your decision
to
terminate your employment for Good Reason, your obligations under this section
1(b) shall thereupon terminate and you will be entitled to payments provided
under
Section
3(b).
2. Term
of Agreement.
This
Agreement shall commence on the date hereof and shall continue in effect until
December 31, 2005; provided, however, that commencing
December 31, 2003 and each December 31 thereafter, the remaining term
of
this
Agreement shall automatically be extended for one additional year (to a total
of
three years) unless at least 90 days prior to such anniversary, the Company
or
you shall have given notice that this Agreement shall not be extended; and
provided, however, that if a change in control of the Company shall occur while
this Agreement is in effect, this Agreement shall automatically be extended
for
24 months from the date the change in control of the Company occurs. This
Agreement shall terminate if you or the Company terminates your employment
prior
to a change in control of the Company but without prejudice to any remedy the
Company may have for breach of your obligations, if any, under section l
(b).
3. Severance
Payment and Benefits If Termination Occurs Following Change in
Control for Disability, Without Cause, With Good Reason or Without Good Reason
within 12 Months of the Change.
If, (1)
within 24 months from the date of occurrence of any
event
constituting a change in control of the Company (it being recognized that
more than
one
such event may occur in which case the 24-month period shall run from the
date
of
occurrence of each such event), your employment with the Company is terminated
(i) by the Company for Disability, (ii) by the Company without Cause, or (iii)
by you with Good Reason (as defined in section 6), or (II) within 12 months
from
the date of occurrence of any event constituting a change in control of the
Company (it being recognized
that more than one such event may occur in which case the 12-month period shall
run from the date of occurrence of each such event) you terminate your
employment either with or without Good Reason, you shall be entitled to a
severance payment and other benefits as follows:
(a) Disability.
If your
employment with the Company is terminated for Disability, your benefits shall
thereafter be determined in accordance with the Company's long-term disability
income insurance plan. If the Company's long-term disability income insurance
plan is modified or terminated following a change in control, the Company shall
substitute such a plan with benefits applicable to you substantially similar
to
those provided by such plan prior to its modification or termination. During
any
period that you fail to perform your duties hereunder as a result of incapacity
due to physical or mental illness, you shall continue to receive your full
base
salary at the rate then in effect until your employment is terminated by the
Company for Disability.
(b) Termination
Without Cause or With Good Reason or Within 12 Months of Change in
Control.
If your
employment with the Company is terminated without Cause by the Company or with
Good Reason by you, or by you within 12 months of a change in control of the
Company without Good Reason, then the Company shall pay to you, upon demand,
the
following amounts (net of applicable payroll taxes):
(i)
Your
full
base salary through the Date of Termination at the rate in effect on the date
the change in control of the Company occurs plus year-to-date accrued
vacation.
(ii) As
severance pay, an amount equal to the product of 2.00 multiplied by the greater
of (A) the sum of your annualized salary for the calendar year in which the
change in control of the Company occurs, the maximum target bonus that could
have been paid to you for such year if all applicable targets and objectives
had
been achieved, or if no formal bonus program is in effect, the largest bonus
amount paid to you during any one of the three preceding calendar years, your
income from the exercise of nonqualified options during such year, your
compensation income from any disqualifying disposition during such year of
stock
acquired pursuant to the exercise of incentive stock options and other
annualized amounts that constitute taxable income to you from the Company for
such year, without reduction for salary reduction amounts excludible from income
under Section 402(e)(3) or 125 of the Internal Revenue Code of 1986, as amended
(the "Code"), or (B) your average "Compensation" (as defined below) for the
three calendar years preceding the calendar year in which the change in control
of the Company occurs. As used in this subsection 3(b)(ii) your "Compensation"
shall mean your base salary, bonus, income from the exercise of nonqualified
options, compensation income from any disqualifying disposition of stock
acquired pursuant to the exercise of incentive stock options and any other
amounts that constitute taxable income to you fromthe
Company, without reduction for salary reduction amounts excludible from
income
under
Section 402(e)(3) or 125 of the Code.
(c) Related
Benefits.
Unless
you die or your employment is terminated by the Company for Cause or Disability,
or by you other than for Good Reason
and not within 12 months after a change in control of the Company, the
Company shall
maintain in full force and effect, for your continued benefit and, if
applicable, for
the continued
benefit of your spouse and family, for three years after the Date of
Termination, or
such
longer period as may be provided by the terms of the appropriate plan, all
noncash
employee
benefit plans, programs, or arrangements (including, without limitation, pension
and retirement plans and arrangements, stock option plans, life insurance and
health
and accident plans and arrangements, medical insurance plans, disability plans,
and
vacation
plans) in which you were entitled to participate immediately prior to the Date
of Termination, as in effect at the Date of Termination, or, if more favorable
to you and, if applicable, your spouse and family, as in effect generally at
any
time thereafter with respect to executive employees of the Company or any
successor; provided that your continued participation is possible after
Termination under the general terms and provisions of such plans, programs,
and
arrangements; provided, however, that if you become eligible to participate
in a
benefit plan, program, or arrangement of another employer
which confers substantially similar benefits upon you, you shall cease to
receive
benefits
under this subsection in respect of such plan, program, or arrangement. In
the
event that your participation in any such plan, program, or arrangement is
not
possible after Termination under the general terms and provisions of such plans,
programs, and arrangements, the Company shall arrange to provide you with
benefits substantially similar to those which you are entitled to receive under
such plans, programs and arrangements or alternatively, pay an amount equal
to
the reasonable value of such substantially similar benefits. If, after
termination of employment following a change in control
of the Company, you elect or, if applicable, your spouse or family elects,
COBRA
continuation coverage, the Company will pay the applicable COBRA premium for
the
maximum period during which such coverage is available. If termination follows
a
change in control of the Company specified in Section 6(b)(111),
then
you
and, if applicable, your spouse and family may elect in lieu of COBRA
continuation coverage to have the acquiring entity obtain an individual or
group
health insurance coverage and the acquiring entity will pay premiums thereunder
for the maximum period during which you and, if applicable, your spouse and
family could have elected to receive COBRA continuation coverage.
(d) Establishment
of Trust.
Within
five days following conclusion of a change in control of the Company, the
Company shall establish a trust that conforms in all regards with the model
trust published in Revenue Procedure 92-64 and deposit an amount sufficient
to
satisfy all liabilities of the Company under Section 3(b) of this
Agreement.
(e) Automatic
Extension.
Notwithstanding the prior provisions of this Section, if an individual is
elected to the Board of Directors who has not been nominated by the Board of
Directors as constituted prior to his election, then the term of this Agreement
will automatically be extended until two years from the date on which such
individual was elected if such extended termination date is later than the
normal termination date of this Agreement, otherwise, the termination date
of
this Agreement will be as provided above. This extension will
take
effect only upon the first instance of an individual being elected to the Board
of Directors without having been nominated by the original Board.
(f) Alternative
to Lump Sum Payout.
The
amount described in this subsection will be paid to you in a single lump-sum
unless, at least 30 days before the conclusion of a change in control of the
Company, you elect in writing to receive the severance pay in 3 equal annual
payments with the first payment to be made within 30 days of demand and the
subsequent payments to be made by January 31st of each year subsequent to the
year in which the first payment is made, provided that under no circumstances
will two payments be made during a single tax year of the
recipient.
4. Payment
If Termination Occurs Following_ Change in Control, Because of Death
For Cause, or Without Good Reason and not within 12 Months of the Change in
Control.
If your
employment shall be terminated following any event constituting a change in
control of the Company because of your death, or by the Company for Cause,
or by
you other than for Good Reason and not within 12 months after a change in
control of the Company, the Company shall pay you your full base salary through
the Date of Termination at the rate in effect on the date the change in control
of the Company occurs plus year-to-date accrued vacation. The Company shall
have
no further obligations to you under this Agreement.
5. No
Mitigation.
You
shall not be required to mitigate the amount of any payment provided for in
this
Agreement by seeking other employment or otherwise, nor, except as expressly
set
forth herein, shall the amount of any payment provided for in this Agreement
be
reduced by any compensation earned by you as the result of employment by another
employer after the Date of Termination, or otherwise.
6. Definitions
of Certain Terms.
For the
purpose of this Agreement, the terms defined in this section 6 shall have the
meanings assigned to them herein.
(a) Cause.
Termination of your employment by the Company for "Cause" shall mean termination
because, and only because, you committed an act of fraud, embezzlement, or
theft
constituting a felony or an act intentionally against the interests of the
Company which causes the Company material injury. Notwithstanding the foregoing,
you shall not be deemed to have been terminated for Cause unless and until
there
shall have been delivered to you a copy of a resolution duly adopted by
theaffirmative vote of not less than three-quarters of the entire membership
of
the Board at a meeting of the Board called and held for the purpose (after
reasonable notice to you and an opportunity for you, together with your counsel,
to be heard before the Board), finding that in the good faith opinion of the
Board you were guilty of conduct constituting Cause as defined above and
specifying the particulars thereof in detail.
(b) Change
in Control of the Company.
A
"change in control of the Company" shall mean:
(i) A
change
in control of a nature that would be required to be reported in response to
Item
6(e) of Schedule 14A of Regulation 14A as in effect on the date hereof pursuant
to the Securities Exchange Act of ▇▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇"); provided that,
without limitation, such a change in control shall be deemed to have occurred
at
such time as any Person hereafter becomes the "Beneficial Owner" (as defined
in
Rule 13d-3 under the Exchange Act), directly or indirectly, of 30 percent or
more of the combined voting power of the Company's Voting Securities;
or
(ii) During
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board cease for any reason to con-stitute at least a
majority thereof unless the election, or the nomination for election by the
Company's shareholders, of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of the period; or
(iii)
There
shall be consummated (x) any consolidation or merger of the Company in which
the
Company is not the continuing or surviving corporation or pursuant to which
Voting Securities would be converted into cash, securities, or other property,
other than a merger of the Company in which the holders of Voting Securities
immediately prior to the merger have the same proportionate ownership of common
stock of the surviving corporation immediately after the merger, or (y) any
sale, lease, exchange, or other transfer (in one transaction or a series of
related transac-tions) of all, or substantially all of the assets of the
Company, provided that any such consolidation,, merger, sale, lease, exchange
or
other transfer consummated at the insistence of an appropriate banking
regulatory agency shall not constitute a change in control of the Company;
or
(iv) Approval
by the shareholders of the Company of any plan or proposal for the liquidation
or dissolution of the Company.
(c) Date
of Termination.
"Date of
Termination" shall mean (1) if your employment is terminated by the Company
for
Disability, 30 days after Notice of Termination is given (provided that you
shall not have returned to the performance of your duties on a full-time basis
during such 30-day period), and (ii) if your employment is terminated for any
other reason, the date on which a Notice of Termination is given;provided that
if within 30 days after any Notice of Termination is given the party receiving
such Notice of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date on which
the dispute is finally determined, either by mutual written agreement of the
parties or by a final judgment, order, or decree of a court of competent
jurisdiction (the time for appeal therefrom having expired and no appeal having
been perfected). The term of this Agreement shall be extended until the Date
of
Termination.
(d) Disability-
Termination of your employment by the Company for "Disability" shall mean
termination because of your absence from your duties with the Company on a
full-time basis for 180 consecutive days as a result of your incapacity due
to
physical or mental illness and your failure to return to the performance of
your
duties on a full-time basis during the 30-day period after Notice of Termination
is given.
(e) Good
Reason.
Termination by you of your employment for "Good Reason" shall mean termination
based on any of the following:
(i) A
change
in your status or position(s) with the Company, which in your reasonable
judgment, does not represent a promotion from your status or positions) as
in
effect immediately prior to the change in control of the Company, or a change
in
your duties or responsibilities which, in your reasonable judgment, is
inconsis-tent with such status or position(s), or any removal of you from,
or
any failure to reappoint or reelect you to, such position(s), except in
connection with the termination of your employment for Cause or Disability
or as
a result of your death or by you other than for Good Reason.
(ii) A
reduction by the Company in your base salary as in effect immediately prior
to
the change in control of the Company.
(iii)
The
failure by the Company to continue in effect any Plan (as hereinafter defined)
in which you are participating at the time of the change in control of the
Company (or Plans providing you with at least substantially similar benefits)
other than as a result of the normal expiration of any such Plan in accordance
with its terms as in effect at the time of the change in control of the Company,
or the taking of any action, or the failure to act, by the Company which would
adversely affect your continued participation in any of such Plans on at least
as favorable a basis to you as is the case on the date of the change in control
of the Company or which would materially reduce your benefits in the future
under any of such Plans or deprive you of any material benefit enjoyed by you
at
the time of the change in control of the Company.
(iv) The
failure by the Company to provide and credit you with the number of paid
vacation days to which you are then entitled in accordance with the Company's
normal vacation policy as in effect immediately prior to the change in control
of the Company.
(v) The
Company's requiring you to be based anywhere other than where your office is
located immediately prior to the change in control of the Company except for
required travel on the Company's business to an extent substantially consistent
with the business travel obligations which you undertook on behalf of the
Company prior to the change in control of the Company.
(vi) The
failure by the Company to obtain from any successor the assent to this Agreement
contemplated by section 8 hereof.
(vii) Any
purported
termination by the Company of your employment which is not effected pursuant
to
a Notice of Termination satisfying the requirements of this Agreement; and
for
purposes of this Agreement, no such purported termination shall be
effective.
(viii) Any
refusal by the
Company to continue to allow you to attend to matters or engage in activities
not directly related to the business of the Company which, prior to the change
in control of the Company, you were permitted by the Board to attend to or
engage in.
For
purposes of this subsection, "Plan" shall mean any compensation plan such as
an
incentive or stock option plan or any employee benefit plan such as a thrift,
pension, profit sharing, medical, disability, accident, life insurance plan,
or
a relocation plan or policy or any other plan, program, or policy of the Company
intended to benefit employees.
(f) Notice
of Termination.
A
"Notice of Termination" of your employment given by the Company shall mean
a
written notice given to you of the termination of your employment which shall
indicate the specific termination provision in this Agreement relied upon,
and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision so
indicated.
(g) Person.
The tern
"Person" shall mean and include any individual, corporation, partnership, group,
association, or other "person," as such term is used in section 14(d) of the
Exchange Act, other than the Company or any employee benefit plan(s) sponsored
by the Company.
7. Notice.
For the
purposes of this Agreement, notices and all other communications provided for
in
the Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by United States certified or registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth on the first page of this Agreement, provided that all notices to the
Company shall be directed to the attention of the Chief Executive Officer of
the
Company with a copy to the Secretary of the Company, or to such other address
as
either party may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon
receipt.
8. Successors;
Binding Agreement.
(a) This
Agreement shall inure to the benefit of, and be binding upon, any corporate
or
other successor or assignee of the Company which shall acquire, directly or
indirectly, by merger, consolidation or purchase, or otherwise, all or
substantially all of the business or assets of the Company. The Company shall
require any such successor, by an agreement in form and substance satisfactory
to you, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent as the Company would be required to perform if
no
such succession had taken place.
(b) This
Agreement shall inure to the benefit of and be enforceable by your personal
or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If you should die while any amount would
still be payable to you hereunder if you had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with
the
terms of this Agreement to your devisee, legatee, or other designee or, if
there
is no such designee, to your estate.
9. Maximization
of After-Tax Amounts.
Notwithstanding any other provision of this Agreement, and notwithstanding
any
other agreement or formal or informal compensation plan or arrangement, if
you
are a "disqualified individual," as defined in Section 280G(c) of the Internal
Revenue Code of 1986, as amended (the "Code"), your right to receive any payment
or benefit under this Agreement shall be limited to the extent that: (i) such
payment or benefit, taking into account any other "payment in the nature of
compensation"
(within the meaning of Section 28OG of the Code) to you or for your
benefit
("Compensation"), would cause any payment or benefit under this Agreement to
be
considered a "parachute payment" within the meaning of Section 280G(b)(2) of
the
Code as then in effect (a "Parachute Payment") and (ii) as a result of receiving
a Parachute Payment, the aggregate after-tax amount you would receive (under
this Agreement and otherwise) would be less than the maximum after-tax amount
that you could receive without causing any such payment or benefit to be
considered a Parachute Payment. In the event that the receipt
of any such payment or benefit under this Agreement, in conjunction with your
other Compensation,
would cause you to be considered to have received a Parachute Payment
that
would
have the effect of decreasing the after-tax amount received by you as described
in clause (ii) of the preceding sentence, then you shall have the right, in
your
sole discretion, to designate
any payments or benefits under this Agreement,
and
any
other Compensation, that shall
be
reduced or eliminated so as to avoid having the payment or benefit to you under
this
Agreement be deemed to be a Parachute Payment.
10. Miscellaneous.
No
provision of this Agreement may be modified, waived,
or
discharged unless such modification, waiver, or discharge is agreed to in a
writing signed by you and the Chief Executive Officer or President of the
Company. No waiver by either party hereto at any time of any breach by the
other
party hereto of, or of compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same, or at any prior
or
subsequent, time. No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction, and performance of this Agreement shall be
governed by laws of the State of New York without giving effect to the
principles of conflict of laws thereof.
11. Legal
Fees and Expenses.
The
Company shall pay or reimburse any reasonable
legal fees and expenses you may incur in connection with any legal action
to
enforce
your rights under, or to defend the validity of, this Agreement. The Company
will pay or reimburse such legal fees and expenses on a regular, periodic basis
upon presentation
by you of a statement or statements prepared by your counsel in
accordance
with its
usual practices.
12. Validity.
The
invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of
this
Agreement, which shall remain in full force and effect.
13. Payments
During Controversy.
Notwithstanding the pendency of any dispute or controversy, the Company will
continue to pay you your full compensation in effect when the notice giving
rise
to the dispute was given (including, but not limited to, base
salary and installments of incentive compensation) and continue you as a
participant
in all
compensation, benefit, and insurance plans in which you were participating
when
the notice giving rise to the dispute was given, until the dispute is finally
resolved in accordance with section 7(c). Amounts paid under this section are
in
addition to all other amounts due under this Agreement and shall not be offset
against or reduce any other amounts
due under this Agreement. You shall be entitled to seek specific performance
of your
right to be paid until the Date of Termination during the pendency of any
dispute or
controversy arising under or in connection with this Agreement.
14. Illegality.
Anything
in this Agreement to the contrary notwithstanding, this Agreement is not
intended and shall not be construed to require any payment to you 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.
If
this
letter correctly sets forth our agreement on the subject matter hereof, kindly
sign and return to the Company the enclosed copy of this letter, which will
then
constitute our agreement on this subject.
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Very
truly yours,
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By:
/S/
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Agreed
To:
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/S/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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