EXHIBIT 10.8
            Form of Employment Agreement between NBT Bancorp Inc. and
                  John G. Martines made as of February 17, 2000

<PAGE>


                              EMPLOYMENT AGREEMENT


         This EMPLOYMENT  AGREEMENT (the "Agreement") made and entered into this
seventeenth day of February, 2000, by and between JOHN G. MARTINES ("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,  the  Agreement  and Plan of Merger (the  "Merger  Agreement")
dated as of August 16, 1999, as amended as of December 13, 1999,  and as further
amended as of December 27, 1999, and as further amended as of February 17, 2000,
by and between NBTB and Lake Ariel  Bancorp,  Inc., a  Pennsylvania  corporation
having its principal office in Lake Ariel, Pennsylvania ("LABN"),  provides that
LABN will be merged with and into NBTB (the "Merger");

         WHEREAS,  Executive is the president and chief executive  officer of LA
Bank,  National   Association,   a  national  banking  association  which  is  a
wholly-owned   subsidiary  of  LABN  (referred  to  herein,  together  with  the
operations  of any  Pennsylvania-based  bank with which it may combine,  as "New
Bank");

         WHEREAS, NBTB desires to secure the employment of Executive upon
consummation of the Merger;

         WHEREAS,  Executive is desirous of entering into the Agreement for such
periods and upon the terms and conditions set forth herein; and

         WHEREAS,  to assist in achieving  the  objectives  of the  transactions
described  in  the  Merger  Agreement,  section  4.8  of  the  Merger  Agreement
contemplates  that  Executive  will  enter  into an  employment  agreement  as a
condition to the consummation of the transactions described therein.

         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) Contingent upon the occurrence of the Merger,  NBTB hereby
agrees to cause New Bank to employ  Executive,  and  Executive  hereby agrees to
serve  as  chief  executive   officer  of  New  Bank,  or  of  the  northeastern
Pennsylvania  operations of any successor entity to New Bank, during the Term of
Employment.  Executive shall have such executive duties,  responsibilities,  and
authority  as shall be set  forth in the  bylaws  of New Bank or such  successor
entity on the date of this  Agreement or as may  otherwise be determined by NBTB
or by New  Bank  or such  successor  entity.  During  the  Term  of  Employment,
Executive shall report directly to the chief executive officer of NBTB.

<PAGE>

                  (b) Contingent upon the occurrence of the Merger,  NBTB hereby
agrees to cause  Executive to be reelected to the board of directors of New Bank
for successive terms throughout the Term of Employment. Subject to the fiduciary
duties of its directors to NBTB, as promptly as practicable after the occurrence
of the Merger NBTB will use its best efforts to cause Executive to be elected or
appointed as a director of NBTB,  to serve as a director of the class whose term
expires in 2000, and to propose to its  stockholders  at its next annual meeting
of stockholders that Executive be reelected to the board of directors of NBTB as
a member of the class whose term shall expire in 2003.

                  (c)  Executive  shall  devote his full  working  time and best
efforts to the performance of his  responsibilities  and duties hereunder and to
the retention of the customer  relationships  to which New Bank has been a party
prior  to the  date  of  this  Agreement  and  the  expansion  of  the  customer
relationships  of New Bank subsequent to the date of this Agreement.  During the
Term of Employment,  Executive  shall not,  without the prior written consent of
the Board of Directors of New Bank, render services as an employee,  independent
contractor,  or otherwise,  whether or not compensated,  to any person or entity
other  than New Bank 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,  and (iii) with the prior
permission of the Board of Directors 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.

         2.       TERM OF EMPLOYMENT.

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

                           (i)      the third anniversary of the Commencement
Date, unless the Term of Employment shall be extended for one additional year by
Executive,  upon written notice provided by Executive to NBTB not  later  than
nine  months  prior to the  third  anniversary  of the Commencement Date;

                           (ii)     the death of Executive;

                           (iii)    Executive's inability to perform his duties
hereunder, as a result of physical or mental disability as reasonably determined
by the personal physician of Executive, for a period of at least 180 consecutive
days or for at least 180 days  during any period of twelve consecutive months
during the Term of Employment; or

                           (iv)     the discharge of Executive by NBTB "for
cause," which shall mean one or more of the following:


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<PAGE>


                                    (A)     any willful or gross misconduct by
Executive with respect to the business and affairs of NBTB or New Bank, 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 New Bank or any of its  affiliates  for which
Executive is assigned material responsibilities or duties; or

                           (v)      Executive's resignation from his position as
chief executive officer of New 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 position other than as chief executive officer of
New Bank, or of the northeastern Pennsylvania operations of any successor entity
to New Bank,  other than for  "Cause,"  or a decrease  in the amount or level of
Executive's salary or benefits from the amount or level established in section 3
hereof.

                  (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 be entitled to receive, upon the occurrence of
any such event:


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<PAGE>

                           (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(j)  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(e) 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,
Executive shall be entitled to receive:

                           (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  fourth
anniversary of the  Commencement  Date,  salary payable at the rate  established
pursuant  to section  3(a)(i)  hereof,  in a manner  consistent  with the normal
payroll  practices of New Bank with respect to executive  personnel as presently
in effect or as they may be modified by New Bank from time to time; and

                           (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(j) 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(e) hereof.

                  (d)  Any   provision   of  this  section  2  to  the  contrary
notwithstanding,  in the event that the employment of Executive with NBTB or New
Bank  is   terminated   in  any   situation   described  in  section  3  of  the
change-in-control  letter  agreement  dated  February  17, 2000 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(j)  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(e) hereof; and

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


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<PAGE>
         3.       COMPENSATION.  For the services to be performed by Executive
for New Bank under this Agreement, Executive shall be compensated in the
following manner:

                  (a)      SALARY.  During the Term of Employment:

                           (i)      New Bank shall pay Executive a salary which,
on an annual basis, shall not be less than $230,000,
assuming Executive performs  competently.  Salary shall be payable in accordance
with  the  normal  payroll  practices  of New Bank  with  respect  to  executive
personnel  as  presently  in effect or as they may be  modified by New Bank from
time to time.

                           (ii)     Executive shall be eligible to be considered
for salary increases, upon review, in accordance with
the  compensation  policies  of NBTB with  respect  to  executive  personnel  as
presently in effect or as they may be modified by NBTB from time to time.

                           (iii)    Executive shall be eligible to be considered
for performance bonuses of up to 75 percent of salary
(with his  performance  evaluated  primarily  based upon the  performance of New
Bank, or of the northeastern  Pennsylvania operations of any successor entity to
New Bank, and secondarily  based upon the performance of NBTB taken as a whole),
in accordance with the  compensation  policies of NBTB with respect to executive
personnel as presently in effect 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 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, 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.  During the Term of Employment,  medical  insurance
for Executive will be procured through the same carrier that provided  insurance
coverage to Executive  as an employee of New Bank as of June 30,  1999,  or from
such other  insurance  carrier as shall be mutually  acceptable to Executive and
NBTB.

                  (c) STOCK OPTIONS.  Each January or February  annually  during
the Term of Employment,  NBTB will cause Executive to be granted a non-statutory
("non-qualified")  stock  option  (each an  "Option")  to purchase the number of
shares of the common stock of NBTB,  no par value,  $1.00 stated  value,  or the
common stock of NBTB as  reclassified  to have a par value of $.01 per share, as
the case may be (the "NBTB Common Stock"), pursuant to the NBT Bancorp Inc. 1993
Stock Option Plan, as amended,  or any  appropriate  successor  plan (the "Stock
Option  Plan"),  computed by dividing  250 percent of the  annualized  salary of
Executive on the date of grant of the Option by the "Fair Market  Value" of NBTB
Common Stock (as defined in the Stock Option Plan).  The option  exercise  price
per share of the shares  subject to each Option shall be such Fair Market Value,
and the terms, conditions of exercise, and vesting schedule of such Option shall
be as set forth in section 8 of the Stock Option Plan.


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<PAGE>
                  (d) SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS. NBTB shall assume
and continue in effect the LA Bank, N.A. Salary  Continuation  Agreement between
New Bank and Executive dated March 7, 1997, the Supplementary Retirement Benefit
Agreement  between New Bank and Executive  dated January 6, 1995, and the Salary
Continuation Agreement between New Bank and Executive dated May 5, 1989, and, in
return  therefor,   Executive  renounces   entitlement  to  benefits  under  any
supplemental  executive  retirement plan to which he would otherwise be entitled
as an executive of NBTB or an affiliate of NBTB.

                  (e)  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 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.

                  (f) AUTOMOBILE. During the Term of Employment, Executive shall
be entitled to the use of an automobile owned by New Bank, the make,  model, and
year of which  automobile shall be appropriate to an officer of Executive's rank
employed by NBTB or its affiliates  and consistent  with that provided to others
of  Executive's  rank  employed by NBTB or its  affiliates.  Executive  shall be
responsible for all expenses of ownership and use of such automobile, subject to
reimbursement of expenses for business use in accordance with section 3(j).

                  (g)      COUNTRY CLUB DUES.  During the Term of Employment,
Executive shall be reimbursed for dues and assessments incurred in relation to
Executive's membership at Country Club of Scranton.

                  (h)  LIFE  INSURANCE.  During  the  Term of  Employment,  life
insurance  paid by New  Bank on the life of  Executive  for the  benefit  of his
designated  beneficiary or beneficiaries shall be maintained at no less than the
level of insurance maintained as of June 30, 1999.

                  (i)      WITHHOLDING.  All compensation to be paid to
Executive hereunder shall be subject to required withholding and other taxes.

                  (j) 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, 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.

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<PAGE>
         4.       CONFIDENTIAL BUSINESS INFORMATION; NON-COMPETITION.

                  (a)  Executive  acknowledges  that certain  business  methods,
creative techniques,  and technical data of NBTB and 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 New Bank or
their affiliates,  and compositions,  ideas,  plans, and methods belonging to or
related to the affairs of NBTB or New Bank or their affiliates.  In this regard,
NBTB asserts  proprietary rights in all of its business  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 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
New Bank or their affiliates,  any confidential  business  information  obtained
during the course of his  employment  by New Bank.  The  foregoing  shall not be
construed as  restricting  Executive  from  disclosing  such  information to the
employees of NBTB or New Bank or their affiliates.

                  (b) Executive  hereby agrees that from the  Commencement  Date
until the second  anniversary of the Termination Date (or, in the event that the
Term of  Employment  has been  terminated  for the  reason  set forth in section
2(a)(vi) or 2(a)(vii) hereof,  Executive agrees that until the first anniversary
of the  Termination  Date),  Executive  will not (i) engage in any aspect of the
banking,  trust or financial  services  business  over which  Executive has had,
during   the  Term  of   Employment,   significant   executive   or   managerial
responsibilities,  other than on behalf of NBTB or New Bank or their affiliates,
within the Market Area (as  hereinafter  defined),  (ii)  directly or indirectly
own,  manage,  operate,  control,  be  employed  by, or  provide  management  or
consulting  services in any capacity to any firm,  corporation,  or other entity
(other than NBTB or New Bank or their affiliates)  engaged in the Market Area in
any aspect of the  banking,  trust or  financial  services  business  over which
Executive  has had,  during the Term of  Employment,  significant  executive  or
managerial  responsibilities,   or  (iii)  directly  or  indirectly  solicit  or
otherwise  intentionally  cause any person known to Executive to be an employee,
officer,  or member of the respective  Boards of Directors of New Bank or any of
its  affiliates  to engage in any  action  prohibited  under (i) or (ii) of this
section  4(b);  provided  that the  ownership by Executive as an investor of not
more than five percent of the outstanding shares of stock of any corporation, or
the shares of any  investment  company as defined in section 3 of the Investment
Company Act of 1940, as amended,  shall not in itself  constitute a violation of
Executive's obligations under this section 4(b).


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<PAGE>
                  (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 or New Bank 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, Wayne County, Pennsylvania, 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.

                  (e) As used herein, "Market Area" shall mean the area or areas
delineated by circles formed by radii extending  twenty-five  miles from (i) the
head office of New Bank,  (ii) the  authorized  branches of New Bank as they may
exist  from time to time,  and (iii)  each  branch of a  depository  institution
affiliated  with  New  Bank  for  which  Executive  has or has  had  significant
executive or managerial responsibilities.

         5. LIFE INSURANCE.  In light of the unusual abilities and experience of
Executive, NBTB 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.


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<PAGE>
         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.

                  (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:        Mr. Daryl R. Forsythe
                           President and Chief Executive Officer

With a required copy to:

         Brian D. Alprin, Esq.
         Duane, Morris & Heckscher LLP
         1667 K Street, N.W., Suite 700
         Washington, D.C.  20006

If to Executive:

         Mr. John G. Martines
         R.D. 1, Box 824
         Carbondale, Pennsylvania  18407


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

         8.       ASSIGNMENT.

                  (a)      Neither party may assign this Agreement or any rights
or obligations hereunder without the consent of the other party.

                  (b) The parties contemplate that at the time of the Merger, or
subsequent to such time, New Bank may engage in a merger or similar  transaction
with an affiliated  bank, in which case references in this Agreement to New Bank
shall be construed to apply to the successor institution in such transaction.

         9. GOVERNING LAW. This Agreement shall be governed by,  construed,  and
enforced in accordance  with the laws of the State of Delaware,  without  giving
effect  to the  principles  of  conflict  of law  thereof.  The  parties  hereby
designate  the Chancery  Court in New Castle  County,  Delaware 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 Delaware. 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   constitutes   the  entire
understanding among NBTB, New Bank, and Executive relating to the subject matter
hereof. Any previous agreements or understandings  between the parties hereto or
between  Executive and New Bank 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.


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                  (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.  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 related to this Agreement,  or the breach thereof, such dispute
shall be referred to arbitration in accordance  with the Commercial  Arbitration
Rules of the American Arbitration  Association ("AAA"). 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 to resolve  the  dispute  by  mediation  in
accordance  with the Commercial  Rules of Arbitration of AAA between the date of
the  issuance  of the  Arbitration  Notice  and the date the  dispute is set for
arbitration. If the dispute is not settled by the date set for arbitration, then
any  controversy  or claim  arising out of this  Agreement or the 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.  Any person serving
as a  mediator  or  arbitrator  must  have at least  ten  years'  experience  in
resolving  commercial  disputes through  arbitration.  In the event any claim or
dispute involves an amount in excess of $100,000,  either party may request that
the  matter  be heard by a panel of three  arbitrators;  otherwise  all  matters
subject to arbitration shall 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 the
Northern District of 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  such  discovery  shall be
concluded  within ninety days after the date the matter is set for  arbitration.
In the event of any  arbitration,  the arbitrator or arbitrators  shall have the
power to award reasonable attorney's fees to the prevailing party. Any provision
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.


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         13.  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.

         14.      AFFILIATION.  A company will be deemed to be "affiliated" with
NBTB or New Bank 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.

         15.      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.

          16.      AGREEMENT CONTINGENT UPON MERGER.  This Agreement is
contingent upon the occurrence of the Merger and, if the Merger
fails to occur, this Agreement will be null and void and of no past or
future effect.

         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/ DARYL R. FORSYTHE
                                      Daryl R. Forsythe
                                      President and Chief Executive Officer


                                JOHN G. MARTINES



                                /S/ JOHN G. MARTINES


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