EXHIBIT 10.2
            Form of Employment Agreement between NBT Bancorp Inc. and
                  Daryl R. Forsythe made as of January 1, 2000


                                      -39-
<PAGE>
                              EMPLOYMENT AGREEMENT


         This EMPLOYMENT AGREEMENT (the "Agreement") made and entered into as of
the first day of January, 2000, by and between DARYL R. FORSYTHE ("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 the president and chief executive officer of NBTB
and chairman and chief executive officer 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  Executive
hereby  agrees to serve as the president  and chief  executive  officer of NBTB,
during  the first  fifteen  months of the Term of  Employment  and as  chairman,
president and chief executive  officer of NBTB during the next twenty-one months
of the Term of  Employment.  NBTB  further  agrees  to cause  NBT Bank to employ
Executive,  and  Executive  hereby  agrees  to serve as the  chairman  and chief
executive  officer of NBT Bank,  during the first fifteen  months of the Term of
Employment  and as chairman of the board of NBT Bank during the next  twenty-one
months of the Term of Employment.  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.

                  (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 Board of Directors of NBTB,  render services 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,  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.

<PAGE>
          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)      the third anniversary of the Commencement
Date, unless the Term of Employment shall be extended for one additional year by
the mutual agreement of the parties;

                           (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:

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

                           (v)      Executive's resignation from his position as
chairman,  president,  or chief executive officer of NBTB or NBT Bank other than
in  implementation  of the schedule set out in section 1(a) of this Agreement or
for "Good Reason," as hereinafter defined; or


                                      -2-
<PAGE>
                           (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 set forth in section 1(a)
of this  Agreement  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:

                           (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 and
sick 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,
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 later of the third anniversary of the Commencement
Date or the first  anniversary of the  Termination  Date,  salary payable at the
rate established pursuant to section 3(a)(i) hereof, in a manner consistent 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; 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(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.


                                      -3-
<PAGE>

                  (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 section 3 of the  change-in-control
letter  agreement  dated  January  1,  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(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)    the severance payment and other benefits
provided in the Change-in-Control Agreement.

         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:

                  (a)      SALARY.  During the Term of Employment:

                           (i)      NBTB shall pay Executive a salary which, on
an annual basis,  shall not be less than  $300,000  during the first year of the
Term of Employment,  $350,000  during the second year of the Term of Employment,
$400,000  during the third year of the Term of Employment,  and $400,000  during
the additional  year, if any, by which the Term of Employment  shall be extended
pursuant to section 2(a)(i),  assuming  Executive performs  competently.  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 of up to 80 percent of salary,  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.

                                      -4-
<PAGE>
                  (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.

                  (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 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
five  weeks of paid  vacation  per year  during  the  first  year of the Term of
Employment,  six weeks of paid  vacation  per year during the second year of the
Term of Employment, and three weeks of paid vacation per year during each of the
third year of the Term of Employment and the  additional  year, if any, by which
the Term of Employment  shall be extended  pursuant to section  2(a)(i),  during
each of which third year and additional  year Executive  shall  additionally  be
excused  from  physical  presence  within the Market Area (as defined in section
4(e) of this Agreement) during the months of January, February, and March except
on an as-required basis as mutually agreed by the board of directors of NBTB and
Executive.

                  (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 and model of which  automobile  shall be  appropriate  to an officer of
Executive's  rank, and which will be replaced with a new  automobile  during the
second year of the Term of Employment.  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(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 Seven Oaks Country Club, Hamilton, New York.

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


                                      -5-
<PAGE>

                  (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, 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.

         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 NBT Bank or
their affiliates,  and compositions,  ideas,  plans, and methods belonging to or
related to the affairs of NBTB or NBT 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
NBT Bank or their affiliates,  any confidential  business  information  obtained
during  the  course  of his  employment  by NBTB.  The  foregoing  shall  not be
construed as  restricting  Executive  from  disclosing  such  information to the
employees of NBTB or NBT Bank or their affiliates.

                  (b) Executive  hereby agrees that from the  Commencement  Date
until the first  anniversary  of the  Termination  Date,  Executive will not (i)
interfere with the relationship of NBTB or NBT Bank or their affiliates with any
of their employees,  suppliers,  agents, or representatives (including,  without
limitation,  causing or helping another business to hire any employee of NBTB or
NBT Bank or their affiliates),  or (ii) directly or indirectly divert or attempt
to divert from NBTB,  NBT Bank or their  affiliates any business in which any of
them has been actively engaged during the Term of Employment, nor interfere with
the  relationship  of  NBTB,  NBT  Bank or  their  affiliates  with any of their
customers or  prospective  customers.  This  paragraph 4(b) shall not, in and of
itself,  prohibit  Executive from engaging in the banking,  trust,  or financial
services business in any capacity, including that of an owner or employee.

                  (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


                                      -6-
<PAGE>

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 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.

                  (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


                                      -7-
<PAGE>
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:        Board of Directors

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. Daryl R. Forsythe
         21 Ridgeland Road
         Norwich, New York  13815

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.

         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.


                                      -8-
<PAGE>
         10.  ENTIRE   AGREEMENT.   This   Agreement   constitutes   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.  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


                                      -9-
<PAGE>
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.

         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 NBT 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.

         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/ EVERETT A. GILMOUR
                                                 Everett A. Gilmour
                                                 Chairman of the Board

                                      -10-
<PAGE>



                                DARYL R. FORSYTHE

                                /S/ Daryl R. Forsyte



                                      -11-
<PAGE>