Unassociated Document


    
      

    

    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

    
       

      
        
          
            
              
                
                  	 
      	
                          Page

                        
	 
      	 
      
	
                          Appendix
      A

                        	
                          3

                        
	
                          Introduction

                        	
                          4

                        
	
                          Plan
      Highlights

                        	
                          5

                        
	
                          Incentive
      Plan

                        	 
      
	
                          Section
      I - Definitions

                        	
                          6-7

                        
	
                          Section
      II - Participation

                        	
                          7

                        
	
                          Section
      III - Activating the Plan

                        	
                          7-8

                        
	
                          Section
      IV - Calculation of Awards

                        	
                          8

                        
	
                          Section
      V - President's Special Recommendations

                        	
                          8

                        
	
                          Section
      VI - Distribution of Awards

                        	
                          9

                        
	
                          Section
      VII - Plan Administration

                        	
                          9

                        
	
                          Section
      VIII - Amendment, Modification, Suspension or
      Termination       9

                        	 
      
	
                          Section
      IX - Exclusivity

                        	
                          9

                        
	
                          Section
      IX - Effective Date

                        	
                          10

                        
	
                          Section
      X - Employer Relations with Participants

                        	
                          10

                        
	
                          Section
      XI - Governing Law

                        	
                          10

                        


                

              

            

          

        

      

       

    

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    APPENDIX A

    


    


    2009
Executive Incentive Compensation Plan Pay-out Detail

    


    


    
      
        
          
            	
                    Corporate Performance/Personal Goals %
      Split

                  
	
                    Level

                  	
                    Executive

                  	
                    Corporate

                  	
                    Personal

                  	
                    Total

                  
	
                    Level
      A

                  	
                    Dietrich

                  	
                    100%

                  	
                    0%

                  	
                    100%

                  
	
                    Level
      B-1

                  	
                    Chewens

                  	
                    66%

                  	
                    34%

                  	
                    100%

                  
	
                    Level
      B-1

                  	
                    Raven

                  	
                    66%

                  	
                    34%

                  	
                    100%

                  
	
                    Level
      B-2

                  	
                    Levy

                  	
                    50%

                  	
                    50%

                  	
                    100%

                  
	
                    Level
      C

                  	
                    Scarlett

                  	
                    50%

                  	
                    50%

                  	
                    100%

                  
	
                    Level
      C

                  	
                    Stagliano

                  	
                    50%

                  	
                    50%

                  	
                    100%

                  


          

        

      

    

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          	 
      	 
      	
                                  Total
      Level A*

                                
	
                                  Incentive
      Threshold Payout

                                	 
      	
                                  37.5%

                                
	
                                  Base
      Line

                                	 
      	
                                  75.0%

                                
	
                                  Level
      3

                                	 
      	
                                  85.0%

                                
	
                                  Level
      4

                                	 
      	
                                  90.0%

                                
	
                                  Level
      5

                                	 
      	
                                  95.0%

                                
	
                                  Maximum
      Incentive Payout

                                	 
      	
                                  100.0%

                                


                        

                      

                    

                  

                

              

            

          

        

      

    

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	 
      	
                                            Corp.
      Payout Level B-1

                                          	
                                            Pers.
      Payout Level B-1

                                          	
                                            Total
      Level B-1*

                                          	 
      	
                                            Corp.
      Payout Level B-2

                                          	
                                            Pers.
      Payout Level B-2

                                          	
                                            Total
      Level B-2*

                                          
	
                                            Incentive
      Threshold Payout

                                          	
                                            15.5%

                                          	
                                            8.0%

                                          	
                                            23.5%

                                          	 
      	
                                            11.8%

                                          	
                                            11.8%

                                          	
                                            23.5%

                                          
	
                                            Base
      Line

                                          	
                                            31.0%

                                          	
                                            16.0%

                                          	
                                            47.0%

                                          	 
      	
                                            23.5%

                                          	
                                            23.5%

                                          	
                                            47.0%

                                          
	
                                            Level
      3

                                          	
                                            38.8%

                                          	
                                            20.0%

                                          	
                                            58.8%

                                          	 
      	
                                            29.4%

                                          	
                                            29.4%

                                          	
                                            58.8%

                                          
	
                                            Level
      4

                                          	
                                            46.5%

                                          	
                                            24.0%

                                          	
                                            70.5%

                                          	 
      	
                                            35.3%

                                          	
                                            35.3%

                                          	
                                            70.5%

                                          
	
                                            Level
      5

                                          	
                                            54.3%

                                          	
                                            28.0%

                                          	
                                            82.3%

                                          	 
      	
                                            41.1%

                                          	
                                            41.1%

                                          	
                                            82.3%

                                          
	
                                            Maximum
      Incentive Payout

                                          	
                                            62.0%

                                          	
                                            32.0%

                                          	
                                            94.0%

                                          	 
      	
                                            47.0%

                                          	
                                            47.0%

                                          	
                                            94.0%

                                          


                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                	 
      	 
      	
                                                        Corp.
      Payout Level C

                                                      	
                                                        Pers.
      Payout Level C

                                                      	
                                                        Total
      Level C*

                                                      
	
                                                        Incentive
      Threshold Payout

                                                      	 
      	
                                                        7.8%

                                                      	
                                                        7.8%

                                                      	
                                                        15.5%

                                                      
	
                                                        Base
      Line

                                                      	 
      	
                                                        15.5%

                                                      	
                                                        15.5%

                                                      	
                                                        31.0%

                                                      
	
                                                        Level
      3

                                                      	 
      	
                                                        19.4%

                                                      	
                                                        19.4%

                                                      	
                                                        38.8%

                                                      
	
                                                        Level
      4

                                                      	 
      	
                                                        23.3%

                                                      	
                                                        23.2%

                                                      	
                                                        46.5%

                                                      
	
                                                        Level
      5

                                                      	 
      	
                                                        27.1%

                                                      	
                                                        27.2%

                                                      	
                                                        54.3%

                                                      
	
                                                        Maximum
      Incentive Payout

                                                      	 
      	
                                                        31.0%

                                                      	
                                                        31.0%

                                                      	
                                                        62.0%

                                                      
	 
      	 
      	 
      	 
      	 
      
	
                                                        *
      % of base salary at appropriate level

                                                      	 
      	 
      	 
      	 
      


                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    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:

    


    


    *      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:

    


    


    
      	
              1.

            	
              The
      Plan is competitive compared with similar sized banking organizations and
      the banking industry in general.

            


    

    


    
      	
              2.

            	
              The
      Compensation Committee of the Board of Directors controls all aspects of
      the Plan.

            


    

    


    
      	
              3.

            	
              All
      active Executives are eligible for
  participation.

            


    

    


    
      	
              4.

            	
              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.

            


    

    


    
      	
              5.

            	
              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.

            


    

    


    
      	
              6.

            	
              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.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    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 Section 162(m)(3) of
the Code.

    


    Individual
Goals:    Refers to the performance standards
established by the plan participant and agreed to by the
supervisor.  The participant shall stray from using standards tied to
day to day responsibilities and shall strive to achieve such goals that shall be
considered value-added and, where possible, support the strategic objectives of
the Company.

    


    Compensation
Committee:  The Compensation and Benefits Committee of the NBT
Bancorp Inc. Board of Directors.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Plan
Participant:  An eligible Executive as recommended by the CEO
and approved by the Compensation Committee for participation for the Plan
Year.

    


    Plan Year:  The 2009
calendar year.

    


    SECTION
II - ELIGIBILITY TO PARTICIPATE

    


    To be
eligible for an award under the Plan, a Plan participant must be an Executive in
full-time service at the start and close of the calendar year and at the time of
the award unless mutually agreed upon prior to the Executive leaving the
company.  Newly hired employees may be recommended by the CEO and
approved by the Compensation Committee as eligible for an award as determined by
their date of hire or any relevant employment agreement.  A Plan
participant must be in the same or equivalent position, at year-end as they were
when named a participant or have been promoted during the course of the year, to
be eligible for an award.  If a Plan participant voluntarily leaves
the company prior to the payment of the award, he/she is not eligible to receive
an award unless mutually agreed upon prior to the Executive leaving the
company.  However, if the active full-time service of a participant in
the Plan is terminated by death, disability, retirement, or if the participant
is on an approved leave of absence, an award may be recommended for such a
participant based on the proportion of the Plan Year that he/she was in active
service.

    


    SECTION
III - ACTIVATING THE PLAN

    


    If and to
the extent that the Committee determines that a bonus to be granted under the
Plan to a Plan participant who is designated by the Compensation Committee as
likely to be a Covered Employee should qualify as “performance-based
compensation” for purposes of Code Section 162(m), the bonus as to that Plan
participants shall be determined consistently with the terms of the NBT Bancorp
Inc. 2008 Omnibus Incentive Plan.

    


    The
operation of the Plan is predicated on attaining and exceeding management
performance goals.  The goals will consist of the attainment of
certain Earnings Per Share (EPS) levels as applicable.  Non-recurring
events,  as previously detailed, may be excluded from the financial results
at the discretion of the CEO and upon approval of the Compensation Committee;
subject to the terms of the NBT Bancorp Inc. 2008 Omnibus Incentive Plan as
applied to any Covered Employee whose bonus is intended to qualify for purposes
of Code Section 162(m).

    


    EPS goals
shall be established not later than 90 days after the beginning of any
performance period applicable to the bonus, or at such other date as may be
required or permitted for “performance-based compensation” under Code Section
162(m).  In addition, the maximum value of a bonus awarded under the
Plan to a single Covered Employee may not exceed $2,000,000 per Plan
Year.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Prior to
payment of any bonus amount under the Plan to a Covered Employee whose bonus is
intended to qualify for purposes of Code Section 162(m), the Compensation
Committee shall certify in writing that the EPS goal(s) and all other material
terms stated herein have been attained.  For this purpose, the
approved minutes of a Compensation Committee meeting in which a certification is
made shall be treated as a written certification.

    


    The
Corporation must achieve a threshold EPS goal set forth in Appendix A to trigger
an award pursuant to the terms of this Plan.  The bonus awards can
range from 0 to 200% of the target award for Plan participants.

    


    SECTION
IV - CALCULATION OF AWARDS

    


    The
Compensation Committee designates the incentive formula as shown in Appendix
A.  The Compensation Committee will make final decisions with respect
to all incentive awards and will have final approval over all incentive
awards.  If the threshold EPS goal is met but below the baseline
budget threshold established by the Company, the CEO may provide the
Compensation Committee with a qualitative analysis of the Company’s earnings and
its performance which the Compensation Committee shall consider in its exercise
of discretion under the plan.  Prior to payment of any bonus amount
under the Plan to a Covered Employee whose bonus is intended to qualify for
purposes of Code Section 162(m), the Compensation Committee shall certify in
writing that the EPS goal(s) and all other material terms stated herein have
been attained.  For this purpose, the approved minutes of a
Compensation Committee meeting in which a certification is made shall be treated
as a written certification. The individual participant data regarding maximum
award and formulas used in calculation has been customized and appears as
Appendix A.

    


    SECTION
V - SPECIAL RECOMMENDATIONS

    


    As long
as the threshold EPS goal is met, the CEO has the authority to recommend to the
Compensation Committee the amounts to be awarded to individual participants in
the incentive Plan.  The CEO may recommend a change outside the
formula to a bonus award (increase or decrease) to an individual participant by
a specified percentage based on assessment of special individual performance
outside the individual goals or based on special circumstances that may
have occurred during the plan year; provided, however that as to a Covered
Employee whose bonus is intended to qualify for purposes of Code Section 162(m),
only the Compensation Committee has the authority to make a change outside the
formula to a bonus award and it may exercise its discretion only to reduce the
bonus award.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    SECTION
VI - DISTRIBUTION OF AWARDS

    


    Distribution
of the EICP will be made during the first quarter of the year following the
plan.  Distribution of the award must be approved by the Compensation
Committee.

    


    In the
event of death, any approved award earned under the provisions of this plan will
become payable to the designated beneficiary of the participant as recorded
under the Company’s group life insurance program; or in the absence of a valid
designation, to the participant's estate.

    


    SECTION
VII - PLAN ADMINISTRATION

    


    The
Compensation Committee shall, with respect to the Plan have full power and
authority to construe, interpret, manage, control and administer this Plan. The
Committee shall decide upon cases in conformity with the objectives of the Plan
under such rules as the Board of Directors may establish.

    


    Any
decision made or action taken by NBT Bancorp Inc., the Board of Directors, or
the Compensation Committee arising out of, or in connection with, the
administration, interpretation, and effect of the Plan shall be at their
absolute discretion and will be conclusive and binding on all
parties.  No member of the Board of Directors, Compensation Committee,
or employee shall be liable for any act or action hereunder, whether of omission
or commission, by a Plan participant or employee or by any agent to whom duties
in connection with the administration of the Plan have been delegated in
accordance with the provision of the Plan.

    


    


    SECTION
VIII - AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION

    


    NBT
Bancorp Inc. reserves the right, by and through its Board of Directors to amend,
modify, suspend, reinstate or terminate all or part of the Plan at any
time.  The Compensation Committee will give prompt written notice to
each participant of any amendment, suspension or termination or any material
modification of the Plan.  In the event of a merger or acquisition,
the Plan and related financial formulas may be reviewed and adjusted to take
into account the effect of such activities.

    


    SECTION
IX – NONEXCLUSIVITY

    


    NBT
Bancorp Inc. reserves the right, by and through its Board of Directors and
Compensation Committee to award bonus and other forms of incentive compensation
outside the terms of this Plan.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    SECTION
X - EFFECTIVE DATE OF THE PLAN

    


    The
effective date of the Plan shall be January 1, 2009.

    


    SECTION
XI - EMPLOYER RELATION WITH PARTICIPANTS

    


    Neither
establishment nor the maintenance of the Plan shall be construed as conferring
any legal rights upon any participant or any person for a continuation of
employment, nor shall it interfere with the right of an employer to discharge
any participant or otherwise deal with him/her without regard to the existence
of the Plan.

    


    SECTION
XII - GOVERNING LAW

    


    Except to
the extent pre-empted under federal law, the provisions of the Plan shall be
construed, administered and enforced in accordance with the domestic internal
law of the State of New York.  In the event of relevant changes in the
Internal Revenue Code, related rulings and regulations, changes imposed by other
regulatory agencies affecting the continued appropriateness of the Plan and
awards made thereunder, the Board may, at its sole discretion, accelerate or
change the manner of payments of any unpaid awards or amend the provisions
of the Plan.