ex10_3.htm


    
      

    

    Exhibit
10.3

    
      
        


        EMPLOYMENT
AGREEMENT

        


        This EMPLOYMENT AGREEMENT (the
"Agreement") made and entered into as of this thirty first day of August 2005,
as amended and restated as of November 5, 2009,  by and between DAVID
E. RAVEN ("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 an executive vice
president of NBTB and president and chief executive officer of Pennstar Bank, a
division of NBT Bank, National Association, a national banking association which
is a wholly-owned subsidiary of NBTB ("NBT Bank");

        


        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 agree­ments 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 to cause NBT Bank and any successor
organization to NBT Bank to employ Executive, and Executive hereby agrees to
serve as an executive vice president of NBTB and president and chief executive
officer of Pennstar Bank, during the Term of Employment (as defined in Section 2
below).  Executive shall have such executive duties, responsibilities,
and authority as shall be set forth in the bylaws of NBTB and NBT Bank or as may
otherwise be determined by NBTB. During the Term of Employment, Executive shall
report directly to the chief executive officer 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
Employ­ment, Executive shall not, without the prior written consent of the
chief executive officer of NBTB, render services in any capacity, whether 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 invest­ments in
compliance with any NBTB limits or policies, and (iii) with the prior
permis­sion of the chief executive officer of NBTB, hold such other
director­ships or part-time academic appointments or have such other
business affiliations as would otherwise be prohibited under this section
1.


        
          
             


          

          
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        2.           Term of
Employment.

        


        (a)           The
term of this Agreement ("Term of Employment") shall be the period
com­mencing on the date of this Agreement (the "Commence­ment Date") and
continuing until the Termination Date, which shall mean the earliest to occur
of:

        


        (i)           January
1, 2008 provided, however, that on January 1, 2006 and each January 1
thereafter, the remaining Term of Employment shall automatically be extended by
one additional year (to a total of three years);

        


        (ii)           the
death of Executive;

        


        (iii)           Executive's
inability to perform his duties hereunder, by reason of any medically
determinable physical or mental impairment that can be expected to result in a
death or can be expected to last for a continuous period of not less than 12
months; 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 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 speci­fically 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 representa­tion 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 responsibili­ties or duties;
or


        
          
             


          

          
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        (v)           Executive's
resignation from his position as executive vice president of NBTB or as
president and chief executive officer of Pennstar 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 material reduction in duties, responsibilities or position other
than for "Cause," or a material decrease in the amount or level of Executive's
salary or benefits from the amount or level established in section 3
hereof.  Notwithstanding the foregoing,
if there exists (without regard to this sentence) an event or condition that
constitutes Good Reason, NBTB shall have thirty (30) days from the date on which
Executive gives the written notice thereof to cure such event or condition (such
notice to be given from Executive within ninety (90) days from the date the
event or condition first occurs) and, if NBTB does so, such event or condition
shall not constitute Good Reason hereunder.  Further, an event or
condition shall cease to constitute Good Reason thirty (30) days after the end
of the cure period.

         

        A Termination Date shall not be deemed to have occurred
for purposes of any provision of this Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment unless such
termination is also a “separation from service” within the meaning of Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”) and, for
purposes of any such provision of this Agreement, any references to a
“termination,” “termination of employment” or like terms shall mean a
“separation from service.”

         

        (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, in
consideration for Executive’s covenant not to compete and other post-termination
obligations, be entitled to receive, upon the occur­rence 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 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(h) hereof, and the right to
receive the cash equivalent of paid annual 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, and upon executive of a
Separation Agreement and Release in substantially the form attached hereto,
which shall be incorporated by reference into this Agreement and become a part
hereof, Executive shall be entitled to receive the following:


        
          
             


          

          
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        (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 immediately
following the Termination Date and ending upon and including the latest of the
third anniversary of the Commencement Date or the date to which the Term of
Employment shall (as of the Termination Date) have automatically extended itself
under section 2(a)(i) hereof, salary payable at the rate established pursuant to
section 3(a)(i) hereof, on a monthly basis;

        


        (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
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; and

        


        (iii)           if,
within eighteen (18) months following the Termination Date, Executive should
sell his principal residence in the Scranton Rand McNally Metropolitan Area as
determined by Rand McNally & Company (the “Scranton RMA”) and relocate to a
place outside of the Scranton 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 finance division
of NBTB, for such residence, and including direct, necessary and reasonable
expenses, as determined by the finance division of NBTB, incurred to prepare the
residence for sale, (B) reimbursement for direct, necessary and reasonable
expenses, as determined by the finance division 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 the
payment made to Executive under (C) shall be paid an additional amount (the
“Gross-Up”) such that the net amount retained by 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 after giving consideration to
the deductibility of state taxes for federal income taxes.  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 Executive is reimbursed, entitled to reimbursement, or is paid any amounts
by an entity or entities other than NBTB or its 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, Executive
agrees:


        
          
             


          

          
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                  (1)

                	
                  with
      regard to amounts already paid by NBTB or any affiliate or successor
      thereof (hereinafter referred to collectively as the “Company”), 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
      Executive under (A), (B), and (C) above;
and

                


        

        


        
          	
                  (2)

                	
                  with
      regard to amounts due but not yet paid by the Company to Executive,
      Executive shall notify the Company of any amounts received or due from the
      Third Party, and Executive agrees that the Company shall reduce the amount
      due under (A), (B), and (C) above by the amount Executive has been paid or
      is entitled to be paid by the Third Party up to the amount due Executive
      from the Company.

                


        

         

        Regulatory
Limits.  Notwithstanding any other provision in this Agreement
NBTB may terminate or suspend this Agreement and the employment of Executive
hereunder, as if such termination were for Cause, to the extent required by the
applicable federal or state statue related to banking, deposit insurance or bank
or savings institution holding companies or by regulations or orders issued by
the Office of the Controller of the Currency, the Federal Deposit Insurance
Corporation or any other state or federal banking regulatory agency having
jurisdiction over NBT Bank or NBTB, and no payment shall be required to be made
to or for the benefit of Executive under this Agreement to the extent such
payment is prohibited by applicable law, regulation or order issued by a banking
agency or a court of competent jurisdiction; provided, that it shall be NBTB’s
burden to prove that any such action was so required.

        


        (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 sections 1(b) and 3 of the change-in-control letter agreement dated July 23,
2001. as amended effective as of November 5, 2009, 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(h) hereof, and the right to
receive the cash equivalent of paid annual leave accrued as of the Termination
Date pursuant to section 3(d) hereof; and

        


        (iii)           the
severance payment and other benefits provided in the Change-in-Control
Agreement; and


        
          
             


          

          
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        (iv)           if,
within eighteen (18) months following the Termination Date, Executive should
sell his principal residence in the Scranton RMA and relocate to a place outside
of the Scranton 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 finance division
of NBTB, for such residence, and including direct, necessary and reasonable
expenses, as determined by the finance division of NBTB, incurred to prepare the
residence for sale, (B) reimbursement for direct, necessary and reasonable
expenses, as determined by the finance division 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 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 Executive is reimbursed, entitled to reimbursement, or is paid any amounts
by a 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, Executive
agrees:

         

        
          	
                  (1)  

                	
                  with
      regard to amounts already paid by the Company, 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 Executive under
      (A), (B), and (C) above; and

                


        

        


        
          	
                  (2)  

                	
                  with
      regard to amounts due but not yet paid by the Company to Executive,
      Executive shall notify the Company of any amounts received or due from the
      Third Party, and Executive agrees that the Company shall reduce the amount
      due under (A), (B), and (C) above by the amount Executive has been paid or
      is entitled to be paid by the Third Party up to the amount due Executive
      from the Company.

                


        

        


        (e)           Notwithstanding any other payment schedule provided
herein to the contrary, if Executive is deemed on the Termination Date a
“specified employee” within the meaning of that term under Code Section
409A(a)(2)(B), then each of the following shall apply:

        


        (i)           With regard to any payment that is considered deferred
compensation under Code Section 409A payable on account of a “separation from
service,” such payment shall be made on the date which is the earlier of (A) the
expiration of the six (6)- month period measured from the date of Executive’s
“separation from service”, and (B) the date of Executive’s death (the “Delay
Period”) to the extent required under Code Section 409A.  Upon the
expiration of the Delay Period, all payments delayed pursuant to this Section
(whether they would have otherwise been payable in a single sum or in
installments in the absence of such delay) shall be paid to Executive in a lump
sum, and all remaining payments due under this Agreement shall be paid or
provided in accordance with the normal payment dates specified for them herein;
and


        
          
             


          

          
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        (ii)           To the extent that any benefits to be provided during
the Delay Period is considered deferred compensation under Code Section 409A
provided on account of a “separation from service,” and such benefits are not
otherwise exempt from Code Section 409A, Executive shall pay the cost of such
benefits during the Delay Period, and the Company shall reimburse Executive, to
the extent that such costs would otherwise have been paid by the Company or to
the extent that such benefits would otherwise have been provided by the Company
at no cost to Executive, the Company’s share of the cost of such benefits upon
expiration of the Delay Period, and any remaining benefits shall be reimbursed
or provided by the Company in accordance with the procedures specified
herein.

        


        (f)           To the extent that severance payments or benefits
pursuant to this Agreement are conditioned upon the execution and delivery by
Executive of a release of claims, Executive shall forfeit all rights to such
payments and benefits unless such release is signed and delivered (and no longer
subject to revocation, if applicable) within sixty (60) days following the date
of Executive’s Termination Date.  If the foregoing release is executed
and delivered and no longer subject to revocation as provided in the preceding
sentence, payments or benefits shall commence upon the first scheduled payment
date immediately after the date the release is executed and no longer subject to
revocation (the “Release Effective Date”).  The first such cash
payment shall include payment of all amounts that otherwise would have been due
prior to the Release Effective Date under the terms of this Agreement applied as
though such payments commenced immediately upon Executive’s Termination Date,
and any payments made thereafter shall continue as provided
herein.  The delayed benefits shall in any event expire at the time
such benefits would have expired had such benefits commenced immediately
following Executive’s Termination Date.

         

        The Company may provide, in its sole discretion, that
Executive may continue to participate in any benefits delayed pursuant to this
section during the period of such delay, provided that Executive shall bear the
full cost of such benefits during such delay period.  Upon the date
such benefits would otherwise commence pursuant to this Section, the Company may
reimburse Executive the Company’s share of the cost of such benefits, to the
extent that such costs would otherwise have been paid by the Company or to the
extent that such benefits would otherwise have been provided by the Company at
no cost to Executive, in each case had such benefits commenced immediately upon
Executive’s Termination Date.  Any remaining benefits shall be
reimbursed or provided by the Company in accordance with the schedule and
procedures specified herein.

        
          (iii)           For purposes of Code Section 409A, Executive’s right to
receive any installment payment pursuant to this Agreement shall be treated as a
right to receive a series of separate and distinct payments.

           

          3.           Compensation.  For
the services to be performed by Executive for NBTB and its affiliates under this
Agreement, Executive shall be compensated in the following
manner:


          
            
               


            

            
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          (a)           Salary.  During
the Term of Employment:

          


          (i)           NBTB
shall pay Executive a salary, which, on an annual basis, shall be two hundred
seventy five thousand dollars ($275,000) commencing on August 1,
2005.   Salary commencing on January 1, 2007 will be negotiated
between Executive and the CEO of NBTB based on recommendations from the
Compensation and Benefits Committee and in line with compensation for comparable
positions in companies of similar size and structure, but in no case less than
$275,000.00.  Salary shall be payable in accordance 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.

          


          (ii)           Executive
shall be eligible to be considered for performance bonuses commensurate with
Executive’s title and salary grade in accordance with the compensation policies
of NBTB with respect to executive personnel in effect as of the Commencement
Date or as they may be modified by NBTB from time to time.

          


          (b)           Employee Benefit Plans or
Arrangements.  During the Term of Employ­ment, Executive
shall be entitled to participate in all employee benefit plans of NBTB, as
presently in effect as of the Commencement Date or as they may be modified by
NBTB from time to time, under such terms as may be applicable to officers of
Executive's rank employed by NBTB or its affiliates, including, without
limitation, plans providing retirement benefits, stock options, restricted stock
or stock units,  medical insurance, life insurance, disability
insurance, and accidental death or dismember­ment insurance, provided that
there be no duplication of such benefits as are provided under any other
provision of this Agree­ment.

          


          (c)           Equity
Awards.  Executive will be eligible for awards under NBTB’s
Omnibus Incentive Plan as applicable to officers of Executive’s
rank.

          


          (d)           Vacation and Sick
Leave.  During the Term of Employment, Executive shall be
entitled to paid annual vacation periods and sick leave in accordance with the
policies of NBTB applicable to officers of Executive’s rank employed by NBTB or
its affiliates and as in effect as of the Commencement Date or as may be
modified by NBTB from time to time as may be applicable to officers of
Executive's rank employed by NBTB or its affiliates, but in no event less than
four weeks of paid vacation per year.

          


          (e)           Automobile.  During
the Term of Employment, Executive shall be entitled to the use of an automobile
owned by NBTB or an affiliate of NBTB, the make, model, and year of which
automobile shall be appropriate to an officer of Executive's rank and which will
be replaced every two years (or earlier if the accumulated mileage exceeds
50,000 miles).  Executive shall be responsible for all expenses of
ownership and use of any such automobile, subject to reimburse­ment of
expenses for business use in accordance with section 3(h).

          


          (f)           Country Club
Dues.  During the Term of Employment, Executive shall be
reimbursed for dues and assessments incurred in relation to Executive's
membership at a country club mutually agreed upon by the chief executive officer
of NBTB and Executive.  Executive shall be responsible for any income
taxes associated with the personal use of such club membership.


          
            
               


            

            
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          (g)           Withholding.  All
compensation to be paid to Executive hereunder shall be subject to applicable
federal, state, and local taxes and all other required
withholdings.  Executive hereby acknowledges and agrees that he is
responsible for all taxes in connection with any benefits, fringe benefits, or
perquisites provided under this Agreement and he is not entitled to a Gross Up ,
except as specifically provided under Paragraph 2(c)(iii) or 2(d)(iv) of
this Agreement, or as may be
provided under the terms of the Change-in-Control Agreement.

          


          (h)           Expenses.  During the Term of
Employment, Executive shall be reim­bursed for reasonable travel and other
expenses incurred or paid by Executive in connection with the performance of his
services under this Agreement, upon presentation of expense statements or
vouchers or such other supporting information as may from time to time be
requested by NBTB, in accordance with such policies of NBTB as are in effect as
of the Commencement Date and as may be modified by NBTB from time to time, under
such terms as may be applicable to officers of Executive's rank employed by NBTB
or its affiliates.  All expenses
or other reimbursements under this Agreement shall be made on or prior to the
last day of the taxable year following the taxable year in which such expenses
were incurred by Executive (provided that if any such reimbursements constitute
taxable income to Executive, such reimbursements shall be paid no later than
March 15th of the calendar year following the calendar year in which the
expenses to be reimbursed were incurred), and no such reimbursement or expenses
eligible for reimbursement in any taxable year shall in any way affect the
expenses eligible for reimbursement in any other taxable
year.

          


          4.           Confidential Business
Information; Non-Competition.

          


          (a)           Executive
acknowledges that certain business methods, creative techniques, and technical
data of NBTB or any of its affiliates and the like are deemed by NBTB to be and
are in fact confidential business informa­tion of NBTB or its affiliates or
are en­trusted to third parties.  Such confidential information
includes but is not limited to procedures, methods, sales relation­ships
developed while in the service of NBTB or its affiliates, knowledge of customers
and their require­ments, marketing plans, marketing information, studies,
forecasts, and surveys, competitive analyses, mailing and marketing lists, new
business proposals, lists of vendors, consul­tants, and other persons who
render service or provide material to NBTB or its affiliates, and
composi­tions, ideas, plans, and methods belonging to or related to the
affairs of NBTB or its affiliates (collectively, “Confidential
Information”).  In this regard, NBTB asserts proprietary rights in all
of its Confidential Information and that of its affiliates except for such
informa­tion as is clearly in the public domain.  Notwithstanding
the foregoing, information that would be generally known or available to persons
skilled in Executive's fields shall be considered to be "clearly in the public
domain" for the purposes of the preceding sentence.  Executive
acknowledges that in connection with his employment with NBTB, Executive has had
or may have access to such Confidential Information, and he agrees that he will
not disclose or divulge to any third party, except as may be required by his
duties hereunder, by law, regulation, or order of a court or government
authority, or as directed by NBTB, nor shall he use to the detriment of NBTB or
its affiliates or use in any business or on behalf of any business competitive
with or substantially similar to any business of NBTB or its affiliates, any
Confidential Information obtained during the course of his employment by
NBTB.  In the event that disclosure is required by law, regulation, or
order of a court or government authority, Executive agrees that as soon as
practical and in any event no later than 30 days after receiving notice that
Executive is required to make such disclosure, Executive will provide notice to
the Company of such requirement by law, regulation, order of a court or
government authority.  This Section 4(a) shall not be construed as
restricting Executive from disclosing such information to the employees of NBTB
or its affiliates.  On or before the Termination Date, Executive shall
promptly deliver to NBTB any and all Confidential Information in his possession,
whether tangible, electronic or intangible in form.


          
            
               


            

            
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          (b)           Executive acknowledges that in the course of employment
with NBTB, Executive has had access to and
gained knowledge of the trade secrets and
other Confidential Information of NBTB or its affiliates; has had substantial
relationships with the customers of NBTB or its affiliates; and has performed
services of special, unique, and extraordinary value to NBTB or its
affiliates.  Therefore, Executive agrees that notwithstanding the
termination of this Agreement for any reason, from the Commencement Date until
the first anniversary of the Termination Date, the Executive shall not, directly
or indirectly, on behalf of himself or any other person or entity, without the
written consent of NBTB:

          


          (i) become an officer, employee, consultant, director,
or trustee of any savings bank, savings and loan association, savings and loan
holding company, bank or bank holding company, where such position entails
providing services to such company in any city, town, or county in which NBTB or
its affiliates has an office, determined as of the Termination Date, where
Executive’s position or service for such business is competitive with or
otherwise similar to any of Executive’s positions or services for NBTB or its
affiliates;

          


          (ii) induce or solicit any customer, supplier, or agent
of NBTB or its affiliates about whom Executive has gained Confidential
Information or with whom Executive, by virtue of his/her employment with NBTB,
has established a relationship or had frequent contact, to terminate or curtail
an existing business or commercial relationship with NBTB or its
affiliates;

          


          (iii)  induce or solicit any customer or
supplier of NBTB or its affiliates about whom Executive has gained Confidential
Information or with whom Executive, by virtue of his/her employment with NBTB,
has established a relationship or had frequent contact, to provide or purchase
goods or services similar to the goods or services provided by it to or
purchased by it from NBTB or its affiliates; provided however, that the
provisions of this clause (iii) only apply to those persons or entities who are
customers or suppliers of NBTB or its affiliates as of the Termination Date or
who were customers of NBTB or its affiliates during the one-year period prior to
the Termination Date; or


          
            
               


            

            
              - 10
-

              
                

              

            

            
               


            

          


          (iv) solicit, induce, recruit, offer employment to,
hire, or take any other action intended, or that a reasonable person acting in
like circumstances would expect, to have the effect of causing any officer or
employee of NBTB or its affiliates, to terminate his or her
employment.

          


          (c)           Executive
acknowledges and agrees that irreparable injury will result to NBTB in the event
of a breach of any of the provisions of this section 4 (the "Designated
Provisions") and that NBTB will have no adequate remedy at law with respect
thereto.  Accordingly, in the event of a material breach of any
Designated Provision, and in addition to any other legal or equitable remedy
NBTB may have, NBTB shall be entitled to the entry of a preliminary and
permanent injunction (includ­ing, without limitation, specific performance)
by a court of competent jurisdiction in Chenango County, New York, or elsewhere,
to restrain the violation or breach thereof by Executive, and Executive submits
to the jurisdiction of such court in any such action.

          


          (d)           It
is the desire and intent of the parties that the provisions of this section 4
shall be enforced to the fullest extent permissible under the laws and public
policies applied in each juris­diction in which enforcement is
sought.  Accordingly, if any particular provision of this section 4
shall be adjudicated to be invalid or unenforceable, such provision shall be
deemed amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the operation of such
provision in the particular juris­diction in which such adjudication is
made.  In addition, should any court determine that the provisions of
this section 4 shall be unenforceable with respect to scope, duration, or
geographic area, such court shall be empowered to substitute, to the extent
enforceable, provisions similar hereto or other provisions so as to provide to
NBTB, to the fullest extent permitted by applicable law, the benefits intended
by this section 4.

          


          5.           Life
Insurance.  In light of the unusual abilities and experience of
Executive, NBTB (or any of its affiliates) in its discretion may
apply for and procure as owner and for its own benefit insurance on the life of
Executive, in such amount and in such form as NBTB may choose.  NBTB
shall make all payments for such insurance and shall receive all benefits from
it.  Executive shall have no interest whatsoever in any such policy or
policies but, at the request of NBTB, shall submit to medical examinations and
supply such information and execute such documents as may reasonably be required
by the insurance company or companies to which NBTB has applied for
insurance.

          


          6.           Representations and
Warranties.

          


          (a)           Executive
represents and warrants to NBTB that his execution, delivery, and performance of
this Agreement will not result in or constitute a breach of or conflict with any
term, covenant, condition, or provision of any commitment, contract, or other
agreement or instrument, including, without limitation, any other employment
agreement, to which Executive is or has been a party.


          
            
               


            

            
              - 11
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          (b)           Executive
shall indemnify, defend, and hold harmless NBTB for, from, and against any and
all losses, claims, suits, damages, expenses, or liabilities, including court
costs and counsel fees, which NBTB has incurred or to which NBTB may become
subject, insofar as such losses, claims, suits, damages, expenses, liabilities,
costs, or fees arise out of or are based upon any failure of any
represen­tation or warranty of Executive in section 6(a) hereof to be true
and correct when made.

          


          7.           Notices.  All
notices, consents, waivers, or other communications which are required or
permitted hereunder shall be in writing and deemed to have been duly given if
delivered personally or by messenger, transmitted by telex or telegram, by
express courier, or sent by registered or certified mail, return receipt
requested, postage prepaid.  All communications shall be addressed to
the appropriate address of each party as follows:

          


          If to
NBTB:

          


          NBT
Bancorp Inc.

          52 South
Broad Street

          Norwich,
New York  13815

          


          Attention:           Chief
Executive Officer

          


          


          With a
required copy to:

          


          Stuart G.
Stein, Esq.

          Hogan
& Hartson L.L.P.

          555
13th
Street, N.W.

          Washington,
D.C. 20004-1109

          Fax:
(202) 637-5910

          


          


          If to
Executive:

          


          Mr. David
E. Raven

          808
Parkview Road

          Moscow,
PA  18444

          


          All such
notices shall be deemed to have been given on the date delivered, transmitted,
or mailed in the manner provided above.

          


          8.           Assignment.  Neither
party may assign this Agreement or any rights or obliga­tions hereunder
without the consent of the other party.


          
            
               


            

            
              - 12
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          9.           Governing
Law.  This Agreement shall be governed by, construed, and
enforced in accordance with the laws of the State of New York, without giving
effect to the principles of conflict of law thereof.  The parties
hereby designate Chenango County, New York to be the proper jurisdic­tion
and venue for any suit or action arising out of this
Agree­ment.  Each of the parties consents to personal
jurisdic­tion in such venue for such a proceeding and agrees that it may be
served with process in any action with respect to this Agreement or the
trans­actions contem­plated thereby by certified or regis­tered
mail, return receipt requested, or to its registered agent for service of
process in the State of New York.  Each of the parties irrevocably and
uncon­ditionally waives and agrees, to the fullest extent permitted by law,
not to plead any objection that it may now or hereafter have to the laying of
venue or the convenience of the forum of any action or claim with respect to
this Agreement or the transactions contemplated thereby brought in the courts
aforesaid.

          


          10.           Entire
Agreement.  This Agreement and any other agreements expressly
incorporated by reference herein constitute the entire understanding among NBTB
and Executive relating to the subject matter hereof.  Any previous
agreements or under­stand­ings between the parties hereto or between
Executive and NBTB or any of its affiliates regarding the subject matter hereof,
including without limitation the terms and conditions of employment,
compensation, benefits, retirement, competition following employment, and the
like, are merged into and superseded by this Agreement.  Neither this
Agreement nor any provisions hereof can be modified, changed, discharged, or
terminated except by an instru­ment in writing signed by the party against
whom any waiver, change, discharge, or termination is sought.

          


          11.           Illegality;
Severability.

          


          (a)           Anything
in this Agreement to the contrary notwithstanding, this Agreement is not
intended and shall not be construed to require any payment to Executive 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.

          


          (b)           If
any provision or provisions of this Agreement shall be held to be invalid,
illegal, or unenforce­able for any reason whatsoever:

          


          (i)           the
validity, legality, and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any section of this
Agreement contain­ing any such provision held to be invalid, illegal, or
unenforce­able) shall not in any way be affected or impaired thereby;
and

          


          (ii)           to
the fullest extent possible, the provisions of this Agreement (including,
without limitation, each portion of any section of this Agreement containing any
such provisions held to be invalid, illegal, or unenforceable) shall be
construed so as to give effect to the intent manifested by the provision held
invalid, illegal, or unenforceable.

          


          12.           
409A
Compliance.    The intent of the parties is that
payments and benefits under this Agreement comply with Code Section 409A and the
regulations and guidance promulgated thereunder and, accordingly, to the maximum
extent permitted, this Agreement shall be interpreted to be in compliance
therewith.  In no event whatsoever shall NBTB be liable for any
additional tax, interest of penalty that may be imposed on Executive by Code
Section 409A or damages for failing to comply with Code Section
409A.  Notwithstanding any other provision of this Agreement to the
contrary, in no event shall any payment under this Agreement that constitutes
“deferred compensation” for purposes of Code Section 409A be subject to offset,
counterclaim or recoupment by any other amount payable to the Executive unless
otherwise permitted by Code Section 409A.


          
            
               


            

            
              - 13
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          13.           Arbitration.  Subject
to the right of each party to seek specific performance (which right shall not
be subject to arbitration), if a dispute arises out of or is any way related to
this Agreement, or the asserted breach thereof, such dispute shall be referred
to arbitration before the American Arbitration Association ("AAA") pursuant to
the AAA’s National Rules for the Resolution of Employment Disputes (the
“Arbitration Rules”).  A dispute subject to the provisions of this
section will exist if either party notifies the other party in writing that a
dispute subject to arbitration exists and states, with reasonable specificity,
the issue subject to arbitration (the "Arbitration Notice").  The
parties agree that, after the issuance of the Arbitration Notice, the parties
will try in good faith between the date of the issuance of the Arbitration
Notice and the date the dispute is set for arbitration to resolve the dispute by
mediation in accordance with the Arbitration Rules.  If the dispute is
not resolved by the date set for arbitration, then any controversy or claim
arising out of this Agreement or the asserted breach hereof shall be resolved by
binding arbitration and judgment upon any award rendered by arbitrator(s) may be
entered in a court having jurisdiction.  In the event any claim or
dispute involves an amount in excess of $100,000, either party may request that
the matter be heard and resolved by a single arbitrator.  The
arbitrator shall have the same power to compel the attendance of witnesses and
to order the production of documents or other materials and to enforce discovery
as could be exercised by a United States District Court judge sitting in
Chenango County, New York.  In the event of any arbitration, each
party shall have a reasonable right to conduct discovery to the same extent
permitted by the Federal Rules of Civil Procedure, provided that discovery shall
be concluded within 90 days after the date the matter is set for
arbitration.  The arbitrator or arbitrators shall have the power to
award reasonable attorneys’ fees to the prevailing party.  Any
provisions in this Agreement to the contrary notwithstanding, this section shall
be governed by the Federal Arbitration Act and the parties have entered into
this Agreement pursuant to such Act.

          


          14.           Costs of
Litigation.  In the event litigation is commenced to enforce
any of the provisions hereof, or to obtain declaratory relief in connection with
any of the provisions hereof, the prevailing party shall be entitled to recover
reasonable attorney's fees.  In the event this Agreement is asserted
in any litigation as a defense to any liability, claim, demand, action, cause of
action, or right asserted in such litigation, the party prevailing on the issue
of that defense shall be entitled to recovery of reasonable attorney's
fees.

          


          15.   Company Right to
Recover.  If the Company is
required to prepare an accounting restatement due to the material noncompliance
of the Company as a result of misconduct, with regard to any financial reporting
requirement under the securities laws, and Executive is subject to automatic
forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 and Executive
knowingly engaged in the misconduct, was grossly negligent in engaging in the
misconduct, knowingly failed to prevent the misconduct or was grossly negligent
in failing to prevent the misconduct, Executive shall reimburse the Company the
amount of any payment earned or accrued during the 12-month period following the
first public issuance or filing with the United States Securities and Exchange
Commission (whichever first occurred) of the financial document that contained
such material noncompliance.


          
            
               


            

            
              - 14
-

              
                

              

            

            
               


            

          


          Notwithstanding anything in this Agreement, if the
Company is required to prepare an accounting restatement, Executive will forfeit
any payments made based on the achievement of pre-established performance goals
that are later determined, as a result of the accounting restatement, not to
have been achieved.

          


          16.           Affiliation.  A
company will be deemed to be "affiliated" with NBTB according to the definition
of "Affiliate" set forth in Rule 12b-2 of the General Rules and Regulations
under the Securi­ties Exchange Act of 1934, as amended.

          


          17.           Headings.  The
section and subsection headings herein have been inserted for convenience of
reference only and shall in no way modify or restrict any of the terms or
provisions hereof.

          


          IN WITNESS WHEREOF, the parties hereto
executed or caused this Agreement to be executed as of the day and year first
above written.

          


          
            	 
      	
                    NBT
      BANCORP INC.

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    /S/
      Martin A. Dietrich

                  
	 
      	 
      	
                    Martin
      A. Dietrich

                  
	 
      	 
      	
                    President
      and

                  
	 
      	 
      	
                    Chief
      Executive Officer

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                    DAVID
      E. RAVEN

                  
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                    /S/
      David E. Raven

                  


          


          
            
               


            

            
              - 15
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          SEPARATION
AGREEMENT AND RELEASE

          


          I.           In
consideration of receipt and acceptance of the separation payments described in
the Employment Agreement and
listed on Appendix A between NBT BANCORP INC. (“NBTB”) and David E. Raven
(“Executive”), dated November 5, 2009 (the “Employment Agreement”), into which this Separation Agreement
and Release (“Separation Agreement”) is incorporated by reference, Executive, on
behalf of himself and his agents, heirs, executors, administrators, successors,
and assigns, unconditionally and generally releases NBTB and NBT Bank,
National Association (“NBT Bank”), their respective current and former owners,
officers, directors, parents, affiliates, subsidiaries, related entities, agents
and employees, and the heirs, executors, administrators, successors and assigns
of all of the foregoing (collectively, “Releasee”), from or in connection with,
and Executive hereby waives and/or settles, with prejudice, any and all complaints, causes of action,
suits, controversies, or any liability, claims, demands, or damages, known or unknown and
of any nature whatsoever and which Executive ever had, now has or shall or may
have as of [                        ],
the date of this Separation Agreement including without limitation, those
arising directly or indirectly pursuant to or out of any aspect of Executive’s
employment or termination from
employment with
NBTB, NBT Bank or any
other Releasee.

          


          II.           Specifically,
without limitation of the foregoing, the release and waiver of claims under this
Separation Agreement shall include and apply to any rights and/or claims (i)
arising under any contract or employment arrangement, express or implied,
written or oral; (ii) for wrongful dismissal or termination of employment; (iii)
arising under any applicable federal, state, local or other statutes, laws,
ordinances, regulations or the like, or case law, that relate to employment or
employment practices and/or specifically, that prohibit discrimination based
upon age, race, religion, sex, national origin, disability or any other unlawful
bases, including without limitation, Title VII of the Civil Rights
Act of 1964, the Americans with Disabilities Act of 1990, the Age Discrimination
in Employment Act, the Older
Workers Benefit Protection Act, the Civil Rights Act of 1866, the Equal Pay Act
of 1963, the Family Medical Leave Act of 1993, the Fair Labor Standards Act, the
Employee Retirement Income Security Act of 1974, Executive Order 11246, the
Worker Adjustment and Retraining Notification Act, all as amended, and
any other statutes, orders, laws, ordinances, regulations applicable to
Employee’s employment, of any state or city in which any Releasee is subject to
jurisdiction, and/or any political subdivision thereof,; (iv) based upon any other
federal, state or local statutes, orders, laws, ordinances, regulations, case law, public policy, or common
law or the like; (v)
concerning recruitment, hiring, discharge, promotions, transfers, employment
status, right to reemployment, wages, bonus or incentive pay, severance pay,
stock or stock options, employment benefits (including, without limitation, sick
or other leave, medical, disability, life, or any other insurance, 401(k),
pension, other retirement plans or benefits, or any other fringe benefits),
workers’ compensation, intentional or negligent misrepresentation and/or
infliction of emotional distress, interference with contract, fraud,
libel, slander, defamation,
invasion of privacy or loss of consortium, together with any and all tort,
contract, or other claims which have been or might have been asserted by
Executive or on his behalf in any suit, charge of discrimination, or claim
against the Releasee; and (vi) for damages, including without limitation,
punitive or compensatory damages, or for attorneys’ fees, expenses, costs,
wages, injunctive or equitable relief.


          
            
               


            

            
              - 16
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          III.           Executive
expressly understands and acknowledges that it is possible that unknown losses
or claims exist or that present losses may have been underestimated in amount or
severity, and Executive explicitly took that into account in determining the
amount of consideration to be paid for the giving of the release in this
Separation Agreement, and a portion of said consideration and the mutual
covenants were given in exchange for a full satisfaction and discharge of such
claims.

          


          IV.           Executive
and NBT Bank acknowledge that the above release and waiver of claims shall not
apply to the obligation of NBT Bank to make payments (if any) of any vested
benefit under NBT Bank’s tax-qualified
employee benefit plans nor to Executive’s right to continue healthcare insurance
under the provisions of the Consolidated Omnibus Budget Reconciliation Act of
1985.

          


          V.           Executive
represents and warrants that he has not filed or commenced any complaints,
claims, actions or proceeding of any kind against any Releasee with any federal,
state or local court or any administrative or regulatory body.  Except
for Executive’s right to bring a proceeding pursuant to the Older Workers
Benefit Protection Act to challenge the release of claims in this Separation
Agreement, and consistent with the EEOC Enforcement Guidance On Non-Waivable
Employee Rights Under EEOC-Enforced Statutes dated April 11, 1997, and otherwise
to the fullest extent permitted by law, Executive agrees not to commence or
participate as a party in any proceeding in any court or forum against any
Releasee which is based upon any act, omission or occurrence up to and including
the date of the execution of this Separation Agreement.  Executive
further agrees not to encourage or participate in any action or proceeding
brought by any person (except a government agency) against any
Releasee.  In the event any government agency seeks to obtain any
relief on behalf of Executive with regard to any claim released by Executive,
Executive agrees not to accept any relief or award from such
proceeding.

          


          VI.           This
Separation Agreement is not and shall not be construed as an admission by any
Releasee or Executive of any wrongdoing or illegal acts or omissions and each
party expressly denies that they engaged in any wrongdoing or illegal or acts or
omissions.  Executive shall not, except as may be required by law,
make any oral or written negative, disparaging or adverse statements,
suggestions or representations of or concerning NBT Bank or any
Releasee.

          


          VII.           Executive
agrees to cooperate reasonably with and to be readily available to NBT Bank to
assist in any matter, including government agency investigations, court
litigation or potential litigation, about which Executive may have
knowledge.  If Executive receives a subpoena or other legal process
relating in any way to same, Executive immediately will provide NBT Bank notice
of the contact or the service of such subpoena or other legal process, and shall
cooperate with NBT Bank in responding.

          


          VIII.           Except
as prohibited by law, each Releasee shall be excused from any obligation to make
payment of the separation
payments in the Employment Agreement in the event that  paragraphs I
through IV of this Separation Agreement are determined to be void or
unenforceable, in whole or in part; or Executive is found to have made a
material misstatement in any term, condition, representation or acknowledgement
in this Separation Agreement, in either of which event Executive shall also be
liable for any damages and costs suffered or incurred by any Releasee by reason
of such misstatement or breach.


          
            
               


            

            
              - 17
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          IX.   
  This Separation Agreement shall be incorporated by reference into
the Employment Agreement and shall be made a part thereof.

          


          X.       Executive
agrees and acknowledges that:

           

          (a) With respect to the General Release in
Section II hereof, Executive agrees and understands that he is specifically
releasing all claims under the Age Discrimination in Employment Act, as amended,
29 U.S.C. § 621 et seq.  Executive acknowledges that he has read and
understands this Agreement and executes it voluntarily and without
coercion;

          


          (b)  Executive has been
advised by NBT Bank to consult with an attorney before executing this Separation
Agreement and has been
given twenty-one (21) days to review this Separation Agreement and to
consider whether to sign this Separation Agreement.  Executive may elect to
sign this Separation Agreement prior to the expiration of the twenty-one day
consideration period specified herein, and Executive agrees that if he elects to
do so, such election is knowing and voluntary and comes after full opportunity
to consult with an attorney;

           

          (c)   Executive
has the right to revoke this Separation Agreement within the seven (7) day
period following the date Executive signs this Separation Agreement (the
“Revocation Period”) and any revocation shall be made by providing a signed
notice in writing, delivered personally or by fax to the Human Resources
Director at NBT Bancorp, 52 South Broad Street, Norwich, New York, 13815 no later than 5:00 p.m. on the seventh
calendar day following his execution of this Separation Agreement;

          


          (d)  This Separation
Agreement will not be effective or enforceable, and the separation payments under the
Employment Agreement are not required and shall not be delivered or paid, until
Executive has delivered a signed, notarized original of this Separation
Agreement to the Human Resources Director at NBT Bancorp, 52 South Broad Street,
Norwich, New York, 13815 and the Revocation Period has expired without
revocation of this Separation Agreement.  It is not necessary that
any Releasee sign this Separation Agreement following Executive’s full and
complete execution of it for it to become fully effective and
enforceable;

          


                     (e) Executive relied solely on his own judgment and/or
that of this attorney regarding the consideration for and the terms of this
Separation Agreement and is signing this Separation Agreement knowingly and
voluntarily of his own free will;

          


                     (f) Executive is not entitled to the separation payments
under the Employment Agreement unless he agrees to and honors the terms of the
terms of this Separation Agreement; and

          


                     (g) Executive has read and understands
this Separation Agreement and further understands that, subject to the
limitations contained herein, it includes a general release of any and all known
and unknown, foreseen or unforeseen claims presently asserted or otherwise
arising through the date of his singing of this Separation Agreement that he may
have against any Releasee.


          
            
               


            

            
              - 18
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          XI.
    Executive
understands all of the terms of this Separation Agreement, and agrees that such
terms are fair, reasonable and are not the result of any fraud, duress, coercion,
pressure or undue influence exercised by or on behalf of any Releasee; and
Executive has agreed to and entered into this Separation Agreement and all of
its terms, knowingly, freely and voluntarily.

          


          XII.   There are no other agreements of any nature between any
Releasee and Executive with respect to the matters discussed in this Separation
Agreement with respect to the matters discussed in this Separation Agreement,
except as expressly stated herein, and in signing this Separation Agreement,
Executive is not relying on any agreements or representation, except those
expressly contained in this Separation Agreement.

          


          XIII.  This Separation Agreement shall be governed by the laws
of New York, excluding the choice of law rules thereof.

          


                     IN
WITNESS WHEREOF, the parties hereto have executed this Separation
Agreement.

          


          
            	
                     

                  	 
      	
                    Date

                  	 
      
	
                    David
      E. Raven

                  	 
      	 
      	 
      


          

          


          STATE OF
NEW
YORK             )

                                                        :  ss.:

          COUNTY
OF                                )

          


                                On
the ____ day of _________, 20__, personally came David E. Raven and being duly
sworn, acknowledged that he is the person described in and who executed the
foregoing Separation Agreement and acknowledged that he executed
same.

          


          
            
              	 
      	 
      
	 
      	
                      Notary
      Public

                    


            

          

          


          NBT
BANCORP, INC.

          


          
            	
                    By:

                  	 
      	 
      	
                    Date:

                  	 
      
	 
      	 
      	 
      	 
      	 
      
	
                    Title:

                  	 
      	 
      	 
      	 
      


          


          
            
               


            

            
              - 19
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          Appendix A

          


          [Separation Payments]

           

           

          - 20
-