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Exhibit 10.1

Split-Dollar Agreement

THIS AGREEMENT (the “Agreement”) is made and entered into as of the 10th day of
November, 2008 by and among NBT BANCORP INC., a Delaware corporation, and NBT
BANK, N.A., a national banking association organized under the laws of the
United States (collectively, the “Bank”), and NBT BANK, N.A., a corporate
trustee, residing in the State of New York (the “Trustee”), for the Martin A.
Dietrich Irrevocable Life Insurance Trust No. 1 (the “Trust”).

WHEREAS, Martin A. Dietrich (the “Employee”) is employed by the Bank as its
president and chief executive officer;

WHEREAS, the Employee wishes to provide additional life insurance protection for
his family in the event of his death;

WHEREAS, the Bank is willing to pay the premiums due on a policy of life
insurance as an employment benefit for the Employee, on the terms and conditions
hereinafter set forth;

WHEREAS, the Bank and the Employee have applied for Insurance Policy Number
207089857 on the life of the Employee (the “Policy”) from Metropolitan Life
Insurance Company (the “Insurer”) in the face amount of $4,000,000 pursuant to
which the Bank will be the owner of the Policy;

WHEREAS, the Bank, the Employee and the Trustee have agreed to make the Policy
subject to this Agreement; and

WHEREAS, it is understood and agreed that this Agreement is to be retroactively
effective as of the date on which the Policy was issued by the Insurer.

NOW, THEREFORE, in consideration of the premises and of the mutual promises
contained herein, the parties hereto agree as follows:

1.            Insurance Policy.

The Bank shall purchase the Policy from the Insurer and shall be the sole and
absolute owner of the Policy.  The sole purpose of this Agreement is to provide
a death benefit payable on the death of the Employee during the term of this
Agreement.  The parties agree that the Policy shall be subject to the terms of
this Agreement and of the endorsement to the Policy filed with the Insurer to
implement the provisions of this Agreement.  The Bank may exercise all ownership
rights granted to the owner of the Policy by the terms thereof, except as
otherwise provided in this Agreement.  The Bank shall be the direct beneficiary
of the total death proceeds, less (a) $2,000,000 or (b) $750,000 if the Employee
is a member of the Board of the Bank but no longer an executive officer of the
Bank at the time of his death (the “Bank’s Interest in the Policy”).  The Bank
will keep possession of the Policy.  The Bank agrees to make the Policy
available at reasonable times to the Trustee or the Insurer for the purpose of
endorsing or filing any change of beneficiary on the Policy for the portion of
the death proceeds that is in excess of the Bank’s Interest in the Policy, but
the Policy shall thereafter be promptly returned to the Bank.  Any indebtedness
on the Policy will first be deducted from the proceeds payable to the
Bank.  Also, any collateral assignment made by the Bank will be deducted from
the proceeds payable to it.

 
 

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2.            Election of Settlement Option and Beneficiary.  By notice to the
Bank, the Trust may select the settlement option for payment of, and the
beneficiary or beneficiaries to receive, the portion of the death benefit
provided under the Policy in excess of the Bank’s Interest in the Policy.  Upon
receipt of such notice, the Bank shall execute and deliver to the Insurer the
forms necessary to elect the requested settlement option and to designate the
requested person, persons or entity as the beneficiary or beneficiaries to
receive such portion of the death proceeds of the Policy.  The Bank and the
Trust hereto agree to take all actions necessary to cause the beneficiary
designation and settlement election provisions of the Policy to conform to the
provisions hereof.  The Bank shall not terminate, alter or amend such
designation or election without the express written consent of the Trust.

3.            Policy Dividends.  Any dividend declared on the Policy shall be
either applied to reduce the premium payments on the Policy agreed to be paid by
the Bank pursuant to Section 4 herein or to purchase paid up additions to the
Policy, at the discretion of the Bank.

4.            Payment of Premiums.  The Bank shall pay a sufficient amount of
premiums to the Insurer to maintain the Policy in force, and shall, upon
request, provide evidence to the Trustee that the Policy remains in force.  The
Bank shall annually furnish the Trustee a statement of the amount of income
reportable by the Employee for federal and state income tax purposes, as a
result of the insurance protection provided on the Employee’s life.

5.            Limitation on the Bank’s Rights in the Policy.  The Trust will
have rights set out in Section 2 hereof with respect to the death benefit
provided under the Policy to be held in Trust for the benefit of the Trust’s
beneficiary or beneficiaries in excess of the Bank’s Interest in the
Policy.  The Bank shall not sell, surrender, change the insured or assign or
transfer ownership of the Policy except after termination of the Agreement
pursuant to Section 6 hereof; other than for the purpose of obtaining a loan
against the Policy.  The aggregate amount of such loans, together with the
unpaid interest accrued thereon, will at no time exceed the lesser of (a) the
Bank’s Interest in the Policy or (b) the loan value of the Policy as determined
by the Insurer.  The Bank will not take any action dealing with the Insurer that
would impair any right or interest of the Trustee on behalf of the Trust in the
Policy.  Without limiting the foregoing, following termination of this
Agreement, to the extent permitted by the Policy, the Bank may designate any
officer or other employee of the Bank as the insured under the Policy and may
continue this Agreement with such officer or employee; provided, however,
pursuant to this Agreement the Bank cannot assign, transfer, convey or sell the
Policy to the Employee or any agent of the Employee for the Employee’s
behalf.  The exercise by the Bank of the right to surrender the policy or to
change the insured will terminate the rights of the Trustee on behalf of the
Trust in the Policy.

6.            Termination of the Agreement During the Employee’s Lifetime.  This
Agreement may be terminated at any time while the Employee is living by a
written instrument signed by the Bank and the Trustee, provided, that the Bank
may terminate this Agreement by written notice to the Trustee at any time after
the Employee has ceased to be either the President and Chief Executive Officer
or a member of the Board of the Bank other than by reason of disability (as
defined pursuant to the Bank’s Long-Term Disability Plan) or because of his
death; and, in any event, this Agreement will terminate upon termination of the
Employee’s employment with the Bank or the cessation of his membership on the
Board of the Bank for any reason whatsoever other than Employee’s disability or
death, provided, however, that upon termination of this Agreement, the Bank
cannot assign, transfer, convey or sell the Policy to the Employee or any agent
of the Employee for the Employee’s behalf.

 
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7.            Insurer Not a Party.  The Insurer shall be fully discharged from
its obligations under the Policy by payment of the Policy death benefit to the
beneficiary or beneficiaries named in the Policy, subject to the terms and
conditions of the Policy.  In no event shall the Insurer be considered a party
to this Agreement, or any modification or amendment hereof.  No provision of
this Agreement, nor of any modification or amendment hereof, shall in any way be
construed as enlarging, changing, varying, or in any other way affecting the
obligations of the Insurer as expressly provided in the Policy, except insofar
as the provisions hereof are made a part of the Policy by the beneficiary
designation executed by the Bank and filed with the Insurer in connection
herewith.  The Insurer shall not be obligated to inquire as to the distribution
of any monies payable or paid by it under the Policy on the Employee’s life
pursuant to the terms of this Agreement.

8.            Named Fiduciary, Determination of Benefits, Claims Procedure and
Administration.

(a) The Bank is hereby designated as the named fiduciary under this
Agreement.  The named fiduciary shall have authority to control and manage the
operation and administration of this Agreement, and it shall be responsible for
establishing and carrying out a funding policy and method consistent with the
objectives of this Agreement.

(b) (1) Claim

A person who believes that he or she is being denied a benefit to which he or
she is entitled under this Agreement (hereinafter referred to as a “Claimant”)
may file a written request for such benefit with the Bank, setting forth his or
her claim.  The request must be addressed to the general counsel of the Bank at
its then principal place of business.

(2) Claim Decision.

Upon receipt of a claim, the Bank shall advise the Claimant that a reply will be
forthcoming within 90 days and shall, in fact, deliver such reply within such
period.  The Bank may, however, extend the reply period for an additional 90
days for reasonable cause.

If the claim is denied in whole or in part, the Bank shall adopt a written
opinion, using language calculated to be understood by the Claimant, setting
forth: (a) the specific reason or reasons for such denial; (b) the specific
reference to pertinent provisions of this Agreement on which such denial is
based; (c) a description of any additional material or information necessary for
the Claimant to perfect his or her claim and an explanation why such material or
such information is necessary; (d) appropriate information as to the steps to be
taken if the Claimant wishes to submit the claim for review; and (e) the time
limits for requesting a review under subsection (3) and for review under
subsection (4) hereof.

 
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(3) Request for Review.

Within 60 days after the receipt by the Claimant of the written opinion
described above, the Claimant may request in writing that the Bank review the
determination of the Bank.  Such request must be addressed to the general
counsel of the Bank, at its then principal place of business.  The Claimant or
his or her duly authorized representative may, but need not, review the
pertinent documents and submit issues and comments in writing for consideration
by the Bank.  If the Claimant does not request a review of the Bank’s
determination within such 60 day period, he or she shall be barred and estopped
from challenging the Bank’s determination.

(4) Review of Decision.

Within 60 days after the general counsel’s receipt of a request for review, he
or she will review the Bank’s determination.  After considering all materials
presented by the Claimant, the general counsel will render a written opinion,
written in a manner calculated to be understood by the Claimant, setting forth
the specific reasons for the decision and containing specific references to the
pertinent provisions of this Agreement on which the decision is based.  If
special circumstances require that the 60 day time period be extended, the
Secretary will so notify the Claimant and will render the decision as soon as
possible, but no later than 120 days after receipt of the request for review.

9.            Amendment.  This Agreement may not be amended, altered or
modified, except by a written instrument signed by the parties hereto, or their
respective successors or assigns, and may not be otherwise terminated except as
provided herein.

10.          Binding Effect.  This Agreement shall be binding upon and inure to
the benefit of the Bank and its successors and assigns, and the Trustee for the
benefit of the Trust and its beneficiary or beneficiaries.

11.          Notices.  Any notice, consent or demand required or permitted to be
given under the provisions of this Agreement shall be in writing, and shall be
signed by the party giving or making the same.  If such notice, consent or
demand is mailed to a party hereto, it shall be sent by United States certified
mail, postage prepaid, addressed to such party’s last known address as shown on
the records of the Bank.  The date of such mailing shall be deemed the date of
notice, consent or demand.

12.          Governing Law.  This Agreement, and the rights of the parties
hereunder, shall be governed by and construed in accordance with the laws of the
United States, to the extent applicable, and otherwise by the laws of the State
of New York applicable to contracts entered into and performed wholly within its
borders.

 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, in
duplicate, as of the day and year first above written.

 
NBT Bancorp Inc.
             
By: 
/s/ Daryl R. Forsythe   
Title: 
Chairman               
NBT Bank, N.A.
             
By: 
/s/ Daryl R. Forsythe     
Title: 
Chairman               
NBT Bank, N.A., as Trustee
             
By: 
/s/ Timothy J. Handy   
Title: 
Corporate Senior Vice President 

 
 
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