Document:

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                                                                   EXHIBIT 10.13

                             EMPLOYMENT AGREEMENT

     AGREEMENT, made as of this 25th day of January, 1999, by and among BSB BANK
& TRUST COMPANY, a New York-chartered commercial bank and trust company having
its principal place of business in Binghamton, New York (the "Bank"), BSB
BANCORP, INC., a Delaware corporation owning all of the issued and outstanding
shares of capital stock of the Bank ("BSB Bancorp") (the Bank and BSB Bancorp,
collectively, the "Employers"), and John P. Driscoll, an individual residing in
Skaneateles, New York (the "Executive").

     WHEREAS, the Executive has entered into an Employment Agreement dated as of
January 1, 1998 (the "Prior Agreement") with Skaneateles Bancorp, Inc., a
Delaware corporation ("Skaneateles Bancorp") and Skaneateles Savings Bank
("Skaneateles Bank");

     WHEREAS, Skaneateles Bancorp is expected to enter into an Agreement and
Plan of Merger on the date hereof with BSB Bancorp pursuant to which, among
other things, Skaneateles Bancorp will be merged with and into BSB Bancorp and
immediately thereafter Skaneateles Bank will be merged with and into BSB Bank
(collectively, such mergers are referred to as the "Merger");

     WHEREAS, the parties understand that, pursuant to the Prior Agreement, the
Executive may voluntarily terminate the Prior Agreement and his Employment
thereunder following a "Change in Control" (as defined in the Prior Agreement)
and, following such termination, the "Successor" (as defined in the Prior
Agreement) would be required to make certain payments to the Executive, subject
to the express terms and conditions of the Prior Agreement;

     WHEREAS, the Employers and the Executive desire that the Executive be
employed as the Executive Vice President of the Bank and BSB Bancorp effective
as of the closing of the Merger;

     WHEREAS, the parties understand that the Merger will constitute a "Change
in Control" (as defined in the Prior Agreement) and the Employers will be
"Successors" (as defined in the Prior Agreement);

     WHEREAS, the Employers have agreed that solely for purposes of applying
certain provisions of the Prior Agreement, the Executive will be deemed to have
voluntarily terminated his employment thereunder immediately after the closing
of the Merger;

     WHEREAS, the Boards of Directors of the Employers (collectively, the
"Boards"), have approved and authorized the Employers to enter into this
Agreement with the Executive; and

     WHEREAS, the parties desire to enter into this Agreement, setting forth the
terms and conditions for the employment relationship of the Executive with the
Employers:

     NOW, THEREFORE, it is AGREED as follows:

     1.   Employment.  Subject to and immediately following the closing of the
          ----------
Merger, the Executive shall be employed as the Executive Vice President of the
Bank and BSB Bancorp and shall serve in such capacity during the Employment Term
(as defined in Section 5 below).  As the Executive Vice President of the Bank
and BSB Bancorp, the Executive shall render executive, policy and other
management services to the Employers of the type customarily performed by
persons serving in a similar officer capacity and shall report to the Chief
Executive Officer(s) of the Employers, except as such Chief Executive Officer(s)
reasonably shall otherwise determine.  The Executive shall also perform such
duties as the Chief Executive Officer(s) of the Employers or the Boards may from
time to time reasonably direct.

     2.   Compensation.
          ------------

          (a)  The Employers agree to pay the Executive during the Employment
Term (defined below) a salary at an annual rate not less than $147,660. The
Executive's salary shall be increased in the sole and absolute discretion of the
Boards or committees thereof duly authorized by the Boards to so act.

          (b)  The salary of the Executive shall not be decreased at any time
during the Employment Term from the amount then in effect, unless the Executive
otherwise agrees in writing. Participation in deferred compensation,
discretionary bonus, retirement and other employee benefit plans and in fringe
benefits, other than salary reduction programs in which the Executive elects to
participate, shall not reduce the salary payable to the Executive under this
Section 2. The salary under this Section 2 shall be payable to the Executive not
less frequently than monthly. The Executive shall not be entitled to receive
fees for serving as a director of the Employers or any of their subsidiaries or
for serving as a member of any committee of the Boards of Directors of the
Employers or any of their subsidiaries.

     3.   Business Expenses.  The Employers shall pay or reimburse the Executive
          -----------------
for the reasonable monthly cost, including dues, of maintaining his existing
memberships at the Skaneateles Country Club, Onondaga Country Club and Oak Hill
Country Club, up to $1,250 per month.  The Bank shall furnish the Executive with
the use of a suitable vehicle (including maintenance) which, unless otherwise
agreed in writing by the parties, shall be the same vehicle as is provided to
the Executive by Skaneateles Bank on the date of this Agreement.  To the extent
that the Employers authorize the Executive to incur other expenses, including
the reasonable costs of authorized

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business entertainment and travel, in connection with the performance of his
duties hereunder, the Employers shall reimburse the Executive for such
authorized expenses promptly upon periodic presentation by the Executive of an
itemized account of such expenses.

     4.   Participation in Retirement and Employee Benefit Plans; Fringe
          --------------------------------------------------------------
Benefits.  During the Employment Term, the Executive shall be eligible to
participate in all incentive, bonus, management recognition, equity
compensation, retirement, deferred compensation, fringe benefit or welfare
benefit plans of the Employers that are applicable to executive employees
generally, including plans providing for stock options, restricted stock,
employee stock purchases, pension or retirement income, retirement savings,
employee stock ownership, deferred compensation and medical, prescription drug,
dental, disability, employee life, group life, accidental death and travel
accident insurance that the Employers may adopt or maintain for the benefit of
executive employees during the Employment Term, in accordance with the terms of
such plans.  Subject to Section 11 below, the Executive shall be entitled to any
vested retirement benefit payable to him under the terms of benefit plans and
arrangements sponsored or maintained by Skaneateles Bancorp and Skaneateles
Bank, including, without limitation benefits payable to him under the
Supplemental Retirement Agreement entered into as of January 1, 1998 by and
among Skaneateles Bancorp, Skaneateles Bank and the Executive.

     5.   Term.  The term of employment under this Agreement shall commence on
          ----
the date of the closing of the Merger and shall end on December 31, 2001 (the
"Employment Term").  The Employment Term may be extended by written agreement
executed by the Employers and the Executive.

     6.   Standards. The Executive shall perform his duties and responsibilities
          ---------
under this Agreement in accordance with such reasonable standards as may be
established from time to time by the Boards and communicated in writing to the
Executive.  The reasonableness of such standards shall be measured against
standards for executive performance generally prevailing in the financial
institutions industry.

     7.   Voluntary Absences; Vacations.  The Executive shall be entitled,
          -----------------------------
without loss of pay, to absent himself voluntarily for reasonable periods of
time from the performance of his duties and responsibilities under this
Agreement.  All such voluntary absences shall count as paid vacation time,
unless the Boards otherwise approve.  The Executive shall be entitled to paid
vacation days totaling 20 business days per year.  The timing of paid vacations
shall be scheduled in a reasonable manner by the Executive.

     8.   Termination of Employment.
          -------------------------

          (a)  (i)   Subject to the other provisions of this Agreement, the
Employers may terminate the Executive's employment at any time.

               (ii)  Except as specifically provided in Section 10 of the Prior
Agreement, the Executive shall have no right to receive compensation or other
benefits for any period after he voluntarily terminates of his employment
without "Good Reason" (as defined below) or the Employers involuntarily
terminate his employment for Cause. "Cause" shall mean the Executive's personal
dishonesty, willful misconduct, breach of fiduciary duty involving personal
profit, willful failure to perform stated duties, willful violation of any law,
rule, or regulation (other than traffic violations or similar offenses) or final
cease-and-desist order of the Federal Deposit Insurance Corporation ("FDIC") or
a material breach of any provisions of this Agreement. For purposes of this
paragraph, no act, or failure to act, on the Executive's part shall be
considered "willful" unless done, or omitted to be done, by him not in good
faith and without reasonable belief that his action or omission was in the best
interest of the Employers; provided that any act or omission to act on the
Executive's behalf in reliance upon an opinion of counsel satisfactory to the
Employers shall not be deemed to be willful.

               (iii) The parties acknowledge and agree that damages that will
result to the Executive for involuntary termination without Cause shall be
extremely difficult or impossible to establish or prove, and agree that, subject
to Section 11 of this Agreement, unless such involuntary termination is for
Cause, the Employers shall be obligated, following such termination, to continue
to pay to the Executive compensation in accordance with Section 2 hereof for the
remaining term of this Agreement. The amounts payable to the Executive hereunder
following termination without Cause during the first 12 months of the Employment
Term shall be reduced to the extent of the Executive's earned income (within the
meaning of section 911(d)(2)(A) of the Internal Revenue Code of 1986, as amended
(the "Code")) during the period for which the Executive's compensation continues
to be paid hereunder and the Executive shall provide the Employers prompt
written notice of the amount of such earned income. In the event of termination
of the Executive's employment after the first 12 months of the Employment Term,
the amounts payable hereunder shall not be reduced by the Executive's earned
income (as defined above) after termination of his employment with the
Employers. The Executive agrees that, except for such other payments and
benefits to which the Executive may be entitled as expressly provided by the
terms of this Agreement and the Prior Agreement, the payments provided for under
this Section 8(a)(iii) shall constitute liquidated damages and shall be in
complete satisfaction of the Employers' obligations under this Agreement.

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               (iv) In addition to the liquidated damages above described that
are payable to the Executive, subject to Section 11 of this Agreement, in the
event of any such termination without Cause, during the period in which payments
are required to be made under Section 8(a)(iii) above, or such longer period as
may be provided by the terms of the appropriate plan, the Employers shall
continue in effect all medical, prescription drug, dental, disability, employee
life, group life and accidental death insurance and other employee welfare plans
for the benefit of the Executive and, if applicable, the Executive's family,
which would have been provided to them in accordance with Section 4 of this
Agreement if the Executive's employment had not been terminated; provided,
however, that if the Executive is eligible to receive medical, prescription drug
or dental benefits under an employee benefits plan sponsored by a subsequent
employer, the medical prescription drug and dental benefits described herein
shall be secondary to those provided under such other plan during such
applicable period of eligibility.

               (v)  If the Executive voluntarily terminates his employment with
the Employers during the Employment Term for "Good Reason," such termination
shall be deemed to have been an involuntary termination by the Employers of the
Executive's employment without Cause. "Good Reason" shall mean:

                    (1)  the assignment to the Executive by the Employers (or
either of them) of duties materially inconsistent with the Executive's position,
duties, responsibilities, and status as Executive Vice President of the
Employers, a material adverse change in the Executive's titles or offices, any
removal of the Executive from or any failure to reelect the Executive to any of
such officer positions, except in connection with the termination of his
employment for Cause, or any action that would have a material adverse effect on
the physical conditions in which or location at which the Executive performs his
employment duties;

                    (2)  a reduction by the Employers in the Executive's salary
under Section 2(a) without the Executive's consent; or

                    (3)  any other action or inaction that constitutes a
material breach by the Employers or either of them of this Agreement or the
Prior Agreement.

          (b)  The Executive shall have no right to terminate his employment
under this Agreement before the end of the Employment Term, unless (i) such
termination is approved by the Boards or (ii) such termination is with "Good
Reason" as defined above. In the event that the Executive violates this
provision, the Employers shall be entitled, in addition to their other legal
remedies, to enjoin the employment of the Executive with any significant
competitor of the Employers (or either of them) for a period of one year or the
then remaining Employment Term plus six months, whichever is less. The term
"significant competitor" shall mean any commercial bank, savings bank, savings
and loan association, mortgage banking company or a holding company affiliate of
any of the foregoing which, at the date of its employment of the Executive, has
an office out of which the Executive would be primarily based that is located
within 75 miles of the Bank's office located at 431 East Fayette Street,
Syracuse, New York. If any court or other tribunal having jurisdiction to
determine the validity or enforceability of this paragraph determines that,
strictly applied, it would be invalid or unenforceable, the definition of
"significant competitor" and the time provisions used shall be deemed modified
to the extent necessary (but only to that extent) so that the restrictions in
that subsection, as modified, will be valid and enforceable.

          (c)  In the event the employment of the Executive is terminated by the
Employers without Cause under Section 8(a) hereof and the Employers fail to make
timely payment of the amounts then owed to the Executive under this Agreement,
the Executive shall be entitled to reimbursement for all reasonable costs,
including attorneys' fees, incurred by the Executive in taking action to collect
such amounts or otherwise to enforce this Agreement, plus interest on such
amounts at the rate of one percent above the prime rate (defined as the base
rate on corporate loans at large U.S. money center commercial banks as published
by The Wall Street Journal), compounded monthly, for the period from the date of
employment termination until payment is made to the Executive. Such
reimbursement and interest shall be in addition to all rights which the
Executive is otherwise entitled to under this Agreement.

          (d)  In the event of the Executive's death during the Employment Term,
his estate shall be entitled to receive any unpaid salary or other compensation
owing to the Executive. This Agreement shall thereupon terminate, except that
any vested rights of the Executive shall then be exercised by his estate.

          (e)  In the event the Executive becomes disabled during the Employment
Term under circumstances that would entitle him to benefits under the Bank's
long-term disability plan and, as a result of such disability, he is unable to
perform his duties hereunder for an uninterrupted period of more than six
months, the Employers may terminate the Executive's employment without liability
under Section 8(a) hereof and this Agreement shall thereupon terminate. Any such
termination shall not affect the Executive's rights to benefits pursuant to any
applicable long-term disability plan of the Employers.

          (f)  Notwithstanding any other provision in this Agreement, (i) the
Employers may terminate or suspend this Agreement and the employment of the
Executive hereunder, as if such termination were for Cause under Section 8(a)
hereof, to the extent required by the applicable laws of the State of New York
related to banking,

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by applicable federal law relating to deposit insurance or bank holding
companies or by regulations or orders issued by the New York State Banking
Department, the Board of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation or other state or federal banking regulatory
agency having jurisdiction over BSB Bancorp or the Bank and (ii) no payment
shall be required to be made to or for the benefit of the 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 the Employers' burden to prove that any such action
was so required.

     9.   Prior Agreement.  The parties agree that, solely for purposes of
          ---------------
applying the Prior Agreement, the Executive shall be deemed to have voluntarily
terminated the Prior Agreement and his employment thereunder immediately after
the closing of the Merger, and that such voluntary termination of the Prior
Agreement shall not affect his entitlement to the payments and benefits
specified in Section 10 of the Prior Agreement, which payments and benefits
shall be made and provided to the Executive within 30 days after the closing of
the Merger.  The Executive represents and warrants to the Employers that he has
provided to them true and correct copies of Wage and Tax Statements (Forms W-2)
reflecting his annual compensation from Skaneateles Bank that was includible in
his gross income for federal income tax purposes for his taxable years ended
December 31, 1994, 1995, 1996, 1997 and 1998.  Based upon such compensation
amounts, the parties understand that the amount described in Section 10(c) of
the Prior Agreement is $435,089.  Payments made and benefits provided in
accordance with the Prior Agreement are in addition to payments to be made and
benefits to be provided to the Executive under this Agreement; provided, however
that the Employers shall not be required to provide the Executive with any
"Benefits" (as defined in the Prior Agreement) that are duplicative of benefits
provided to the Executive under this Agreement.  Except for their obligations as
"Successors" under Section 10 of the Prior Agreement, the Employers shall have
no liability to the Executive under the Prior Agreement after the Merger.

     10.  Confidential Information.
          ------------------------

          (a)  The Executive acknowledges that the information, observations and
data obtained by the Executive concerning the business and affairs of the
Employers during the course of the Executive's employment are the property of
the Employers, including information concerning acquisition opportunities in or
reasonably related to the business or industry of the Employers of which the
Executive becomes aware during such period. Therefore, the Executive agrees that
he will not at any time (whether during or after the Employment Term) disclose
to any unauthorized person or, directly or indirectly, use for the Executive's
own account, any of such information, observations or data without the consent
of the Boards, unless and to the extent that the aforementioned matters become
generally known to and available for use by the public other than as a direct or
indirect result of the Executive's unauthorized acts or omissions to act or the
unauthorized acts or omissions to act of other employees of the Employers. The
Executive agrees to deliver to the Employers at the termination of the
Executive's employment, or at any other time the Employers may request in
writing (whether during or after the Employment Term), all memoranda, notes,
plans, records, reports and other documents, regardless of the format or media
(and copies thereof), relating to the business of the Employers and their
predecessors (including, without limitation, all acquisition prospects, lists
and contact information) which the Executive may then possess or have under the
Executive's control.

          (b)  The Executive acknowledges that the restrictions contained in
this Section 10 hereof are reasonable and necessary, in view of the nature of
the Employers' business, in order to protect the legitimate interests of the
Employers, and that any violation thereof would result in irreparable injury to
the Employers. Therefore, the Executive agrees that in the event of a breach or
threatened breach by the Executive of the provisions of Section 10(a) hereof,
the Employers shall be entitled to obtain from any court of competent
jurisdiction, preliminary or permanent injunctive relief restraining the
Executive from disclosing or using any such confidential information. Nothing
herein shall be construed as prohibiting the Employers from pursuing any other
remedies available to them for such breach or threatened breach, including,
without limitation, recovery of damages from the Executive.

     11.  Parachute Payment Limitation.  Notwithstanding any other provisions of
          ----------------------------
this Agreement, the Prior Agreement or any other agreement, contract, or
understanding heretofore or hereafter entered into by the Executive with
Skaneateles Bancorp, Skaneateles Bank, BSB Bancorp, the Bank, or any subsidiary
or affiliate of any of them (the "Other Agreements"), and notwithstanding any
formal or informal plan or other arrangement heretofore or hereafter adopted by
Skaneateles Bancorp, Skaneateles Bank, BSB Bancorp, the Bank or any such
subsidiary or affiliate for the direct or indirect provision of compensation to
the Executive (including groups or classes of participants or beneficiaries of
which the Executive is a member), whether or not such compensation is deferred,
is in cash, or is in the form of a benefit to or for the Executive (a "Benefit
Plan"), the Executive shall not have any right to receive any payment or other
benefit under this Agreement, the Prior Agreement, any Other Agreement, or any
Benefit Plan if such payment or benefit, taking into account all other payments
or benefits to or

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for the Executive under this Agreement, the Prior Agreement, all Other
Agreements, and all Benefit Plans, would cause any such payment to the Executive
to be considered a "parachute payment" within the meaning of Section 280G(b)(2)
of the Code (a "Parachute Payment"). In the event that the receipt of any such
payment or benefit under this Agreement, the Prior Agreement, any Other
Agreement, or any Benefit Plan would cause the Executive to be considered to
have received a Parachute Payment, then the Executive shall have the right, in
the Executive's sole discretion, to designate those payments or benefits under
this Agreement, the Prior Agreement, any Other Agreements, and/or any Benefit
Plans, which should be reduced or eliminated so as to avoid having the payment
to the Executive under this Agreement be deemed to be a Parachute Payment. In
the event that there is a dispute between the parties as to whether, or the
extent to which, a reduction in such payments to the Executive is required to
prevent such payment from constituting a Parachute Payment, the parties agree
that they shall be bound by the determination of such matter by a national
accounting firm selected jointly by the Bank and the Executive (or, if they are
unable to agree, chosen by lot from among an equal number of nominees designated
by the Bank and the Executive); provided, however that the firm selected shall
not be the accounting firm that is then serving as the auditor of the Employers
unless the Executive consents in writing to such selection. In the event that
the Executive would otherwise be deemed to have received an amount that would
constitute a Parachute Payment, the amount paid to him that exceeds the maximum
amount permissible under this Section 11 shall be treated as a loan to him and
shall be repaid, with interest, to the extent necessary to reduce the amount
paid to the maximum permissible amount. Any such loan shall be repaid in full
six months after (a) the date on which the Bank notifies the Executive that a
loan relationship exists, if there is no dispute as to whether, or the extent to
which, a reduction is required, or (b) the date on which the Executive and the
Bank receive the written opinion of a national accounting firm (selected in the
manner described above), if there is such a dispute, and may be repaid by the
Executive without prepayment penalty at any time during such six month period.

     12.  Miscellaneous.
          -------------

          (a)  No Assignment.  This Agreement is personal to each of the parties
               -------------
hereto. No party may assign or delegate any of his or its rights or obligations
hereunder without first obtaining the written consent of the other party hereto.
However, in the event of the death of the Executive, all of his rights to
receive payments hereunder shall become rights of his estate as provided in
Section 8(d) hereof.

          (b)  Other Contracts.  The Executive shall not, during the Employment
               ---------------
Term, have any other paid employment other than with a subsidiary or affiliate
of the Employers, except with the prior written approval of the Boards.

          (c)  Amendments or Additions; Action by Boards.  No amendments or
               -----------------------------------------
additions to this Agreement shall be binding unless in writing and signed by all
parties hereto. The prior approval by a majority affirmative vote of the Boards
shall be required in order for the Employers to authorize any amendments or
additions to this Agreement or to give any consents or waivers of provisions of
this Agreement, or to terminate the Executive's employment with or without Cause
under Section 8(a) hereof.

          (d)  Section Headings.  The section headings used in this Agreement
               ----------------
are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.

          (e)  Severability.  The provisions of this Agreement shall be deemed
               ------------
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.

          (f)  Governing Law.  This Agreement shall be governed by the laws of
               -------------
the United States, where applicable, and otherwise by the laws of the State of
New York other than the choice of law rules thereof.

          (g)  Notice.  For the purposes of this Agreement, notices and all
               ------
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed, if to the
Employers:

                           BSB BANK & TRUST COMPANY
                           58-68 Exchange Street
                           Binghamton, New York 13902
                           Attention:  Chief Executive Officer

or if to the Executive:    John P. Driscoll
                           4 West Lake Street
                           Skaneateles, New York  13152

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notice of change of address shall be
effective only upon receipt.

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          (h)  Counterparts.  This Agreement may be executed in several
               ------------
counterparts, for the convenience of the parties, but shall constitute one and
the same instrument.

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement,
or caused this Agreement to be duly executed on their behalf, as of the date and
year first above written.

Attest:                             BSB BANK & TRUST COMPANY

/s/ Larry G. Denniston              By:  /s/ Alex S. DePersis
----------------------                   --------------------

Attest:                             BSB BANCORP, INC.

___________________________         By:  /s/ Alex S. DePersis
                                         --------------------

                                    By:  /s/ John P. Driscoll
                                         --------------------
                                         John P. Driscoll
                                         Executive

                                                                              55<PAGE>

                                                                   EXHIBIT 10.16

                              AMENDED & RESTATED
                     CHANGE OF CONTROL SEVERANCE AGREEMENT

     This Amended and Restated Change of Control Severance Agreement
("Agreement") dated June 28, 1999, is entered into by and between BSB Bancorp,
Inc., a Delaware corporation ("Corporation"), and its wholly-owned subsidiary
BSB Bank & Trust Company, as successor to Binghamton Savings Bank ("Employer"),
a New York stock savings bank, and Larry G. Denniston ("Executive"). This
Agreement amends and restates the Change of Control Severance Agreement dated as
of November 2, 1990, as amended, by and among the parties and such Agreement, as
amended, shall be of no further force or effect after the date of this
Agreement.

                                  WITNESSETH:

          Whereas, Executive is currently employed by Employer as a Senior Vice
President and Corporate Secretary; and

          Whereas, Corporation, Employer and Executive entered into a Change of
Control Severance Agreement as of November 2, 1990; which was subsequently
amended on December 29, 1995; and

          Whereas, the parties desire to amend the agreement; and

          Whereas, the parties desire to restate the full agreement;

          Now, therefore, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties agree to this Amendment and
Restatement as follows:

     1.   Term.  The initial term of this Agreement extends for a period of
          ----
three years from the date of this Agreement, provided that the term of the
Agreement shall be extended automatically for one additional year on each annual
anniversary date of this Agreement, unless either the Board of Directors of
Employer or Executive provide contrary written notice to the other not less than
180 days in advance of any such anniversary date. In the event either Employer
or Executive provide such written notice, then the term hereof shall not be
extended, but the then current term shall continue for the period remaining
thereunder. Notwithstanding the foregoing, this Agreement shall automatically
expire and terminate on Executive's normal retirement date at age 65 or on
Executive's early retirement under the Special Service Retirement provision of
Employer's pension plan if Executive elects to take such early retirement. The
initial term of employment and all such renewed terms of employment under this
Agreement are collectively referred to herein as the "term of this Agreement."

     2.   Benefits Upon Termination of Employment. (a) If, before a Change in
          ---------------------------------------
Control at the request or direction of the acquiring party or at any time during
the 12-month period following a Change in Control, (1)the employment of
Executive with Employer is terminated by Employer for any reason other than Good
Cause, or (2) Executive terminates his employment with Employer for Good Reason,
Employer shall, during the Severance Period, continue to pay Executive an amount
equal to Executive's Base Salary.

     Such amount will be paid during the Severance Period in monthly or other
installments, similar to those being received by Executive at the date of the
Change in Control, and will commence as soon as practicable following the date
of termination of employment.  Executive shall receive any and all vested
benefits accrued under any Incentive Plans and Retirement Plans to the date of
termination of employment, the amount, form and time of payment of such benefits
to be determined by the terms of such Incentive Plans and Retirement Plans and
such benefits shall not be reduced by amounts payable under this Agreement.

          (b)  If upon the date of termination of Executive's employment,
Executive holds any options with respect to stock of Corporation, all such
options will immediately become exercisable upon such date and will be
exercisable for not less than 90 days thereafter. To the extent such
acceleration of vesting or exercisability of such options is not permissible
under the terms of any plan pursuant to which the options were granted, Employer
will pay to Executive, in a lump sum, within 90 days after termination of
employment, an amount equal to the excess, if any, of the aggregate fair market
value of all stock of Corporation subject to such options, determined on the
date of termination of employment, over the aggregate option price of such
stock, and Executive will surrender all such options unexercised. For the
purposes of this Agreement, in the event that such stock is listed on an
established national or regional stock exchange, is admitted to quotation on the
National Association of Securities Dealers Automated Quotation System, or is
publicly traded in an established securities market, in determining the fair
market value of the stock, Employer shall use the average of the closing prices
of such stock on such exchange or System or in such market (the highest such
closing price if there is more than one such exchange or market) on the five
trading dates immediately before the date of termination (or, if there is no
such closing price, then the Board shall use the mean between the highest bid
and lowest asked prices or between the high and low prices on such

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date), or, if no sale of the Stock has been made on one or more of such dates,
on the next preceding day on which any such sale shall have been made.

          (c)  During the Severance Period, Executive and his spouse will
continue to be covered by all Welfare Plans, maintained by Employer in which he
or his spouse were participating immediately prior to the date of his
termination as if he continued to be an employee of Employer; provided that, if
participation in any one or more of such Welfare Plans is not possible under the
terms thereof, Employer will provide substantially identical benefits. If,
however, Executive obtains employment with another employer during the Severance
Period, such coverage shall be provided only to the extent that the coverage
exceeds the coverage of any substantially similar plans provided by his new
employer.

     3.   No Setoff.  No payment or benefits payable to or with respect to
          ---------
Executive pursuant to this Agreement shall be reduced by any amount Executive or
his spouse may earn or receive from employment with another employer or from any
other source, except as expressly provided in subsection 2(c) of this Agreement.

     4.   Death.  If Executive dies during the Severance Period:
          -----

          (a)  All amounts payable hereunder to Executive shall, during the
remainder of the Severance Period, be paid to his surviving spouse.

          (b)  The spouse of Executive shall, during the remainder of the
Severance Period, be covered under all Welfare Plans made available by Employer
to Executive or his spouse immediately prior to the date of his death; provided
that, if participation in any one or more of such plans and arrangements is not
possible under the terms thereof, Employer will provide substantially identical
benefits.

          Any benefits payable under this Section 4 are in addition to any other
benefit due to Executive or his spouse or beneficiaries from Employer,
including, but not limited to, payments under any of the Incentive or Retirement
Plans.

     5.   Termination for Good Cause or Without Good Reason. If the employment
          -------------------------------------------------
of Executive with Employer is terminated (a) for any reason prior to a Change in
Control other than at the request or direction of an acquiror in connection with
a Change in Control, or (b) after a Change in Control by Employer for Good
Cause, or by the voluntary action of Executive without Good Reason, Executive's
Base Salary (at the rate in effect on the date of termination) shall be paid
through the date of termination, and Employer shall have no further obligation
to Executive or his spouse under this Agreement, except for benefits accrued
under Incentive Plans pursuant to subsection 2(a) above.

     6.   Section 280G Gross-Up Payment.  (i) Anything in this Agreement to the
          -----------------------------
contrary notwithstanding and except as set forth below in this Section 6(i), in
the event it shall be determined that any payment or distribution by Employer,
or any other member of the affiliated group (as determined for purposes of
Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the
"Code") of which Employer or Corporation is a member, to or for the benefit of
the Executive (whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise, but determined without regard to
any additional payments required under this Section 6) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.  Notwithstanding the foregoing provisions of this Section 6(i), if it
shall be determined that the Executive is entitled to a Gross-Up Payment, but
that the Executive, after taking into account the Payments and the Gross-Up
Payment, would not receive a net after-tax benefit of at least $10,000 (taking
into account both income taxes and any Excise Tax) as compared to the net after-
tax proceeds to the Executive resulting from an elimination of the Gross-Up
Payment and a reduction of the Payments, in the aggregate, to an amount (the
"Reduced Amount") such that the receipt of Payments would not give rise to any
Excise Tax, then no Gross-Up Payment shall be made to the Executive and the
Payments, in the aggregate, shall be reduced to the Reduced Amount.

               (ii) Subject to the provisions of Section 6(iii), all
determinations required to be made under this Section 6, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by PriceWaterhouseCoopers LLP such other certified public accounting firm
reasonably acceptable to Employer as may be designated in writing by the
Executive (the "Accounting Firm") which shall provide detailed supporting
calculations both to Employer and the Executive within 15 business days of the
receipt of notice from the Executive that there has been a Payment, or such
earlier time as is requested by Employer. In the event that the Accounting Firm
is serving as accountant or auditor for the individual, entity or group
effecting the Change of Control, the Executive shall appoint another nationally

                                                                              58
<PAGE>

recognized accounting firm reasonably acceptable to Employer to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by Employer. Any Gross-Up Payment, as determined
pursuant to this Section 6, shall be paid by Employer to the Executive within
five business days of the receipt of the Accounting Firm's determination. Any
determination by the Accounting Firm shall be binding upon Employer and the
Executive. As a result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that the initial Gross-Up Payments made by Employer
will be inadequate and that additional Gross-Up Payments by Employer should have
been made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that Employer exhaust its remedies pursuant to Section
6(iii) and the Executive thereafter are required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by Employer to or for
the benefit of the Executive.

               (iii) The Executive shall notify Employer in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by Employer of a Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than 10 business days after the Executive receives
written notice of such claim and shall apprise Employer of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of 30 days following the date
on which the Executive gives such notice to Employer (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If Employer notifies the Executive in writing prior to the expiration of such
period that they desire to contest such claim, the Executive shall:

                     (a) give Employer any information reasonably requested by
Employer relating to such claim,

                     (b) take such action in connection with contesting such
claim as Employer shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney selected by Employer and reasonably acceptable to the
Executive,

                     (c) cooperate with Employer in good faith in order
effectively to contest such claim, and

                     (d) permit Employer to participate in any proceedings
relating to such claim; provided,

however, that Employer shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment of costs
and expenses.  Without limitation on the foregoing provisions of this Section
6(iii), Employer shall control all proceedings taken in connection with such
contest and, at their sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at their sole option, either direct
the Executive to pay the tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as Employer shall determine;
provided, however, that if Employer directs the Executive to pay such claim and
sue for a refund, Employer shall advance the amount of such payment to the
Executive, on an interest-free basis and shall indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, Employer's control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and the Executive
shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.

               (iv)  If, after the receipt by the Executive of an amount
advanced by Employer pursuant to Section 6(iii), the Executive becomes entitled
to receive any refund with respect to such claim, the Executive shall (subject
to Employer's continued compliance with the requirements of this Section 6)
promptly pay to Employer the amount of such refund (together with any interest
paid or credited thereon after taxes applicable thereto). If, after the receipt
by the Executive of an amount advanced by Employer pursuant to Section 6(iii), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and Employer does not notify the Executive in writing
of their intent to contest such denial of refund prior to the expiration of 30
days after such determination (or if any such contest shall be finally
determined in a manner adverse to such refund being allowed), then such advance
shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of the Gross-Up Payment
required to be paid.

     7.   Definitions.  For purposes of this Agreement:
          -----------

                                                                              59
<PAGE>

               (a)  "Base Salary" shall mean the higher of Executive's annual
base salary at the rate in effect on the date of a Change in Control or the rate
in effect on the date of termination of employment.

               (b)  "Change in Control" shall be deemed to have occurred if
there has been a change of control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended ("Exchange Act"), or such
item thereof which may hereafter pertain to the same subject; provided that, and
notwithstanding the foregoing, a Change in Control shall be deemed to have
occurred if (i) any "person" (as that term is used in Sections 13(d) and
14(d)(2) of the Exchange Act) is or becomes the beneficial owner, directly or
indirectly, of securities of Corporation or Employer representing 25% or more of
the combined voting power of Corporation's then outstanding securities, (ii)
during any period of two consecutive years, individuals who at the beginning of
such period constituted the Boards of Directors of Corporation and Employer
cease for any reason to constitute at least a majority thereof unless the
election of each Director, who was not a Director at the beginning of the
period, was approved by a vote of at least two-thirds of the Directors then
still in office who were Directors at the beginning of the period, (iii)
Corporation shall cease to be a publicly owned corporation, or (iv) any merger
or consolidation of Corporation with or into another entity shall occur as a
result of which the stockholders of Corporation do not retain or acquire 75% or
more of the capital stock of the resulting entity.

               (c)  "Good Cause" shall be deemed to exist if, and only if: (1)
Executive engages in acts or omissions constituting dishonesty, intentional
breach of fiduciary obligation or intentional wrongdoing or malfeasance; (2)
Executive is convicted of a criminal violation involving fraud or dishonesty; or
(3) Executive materially breaches the Agreement (other than by engaging in acts
or omissions enumerated in paragraphs (1) and (2) above), or materially fails to
satisfy the conditions and requirements of his employment with Employer, and
such breach or failure by its nature is incapable of being cured, or such breach
or failure remains uncured for more than 30 days following receipt by Executive
of written notice from Employer specifying the nature of the breach of this
paragraph (3), inattention by Executive to his duties shall be deemed a breach
or failure capable of cure.

               Without limiting the generality of the foregoing, the following
shall not constitute Good Cause: any personal or policy disagreement between
Executive and Employer or any member of the Board of Directors of Employer; or
any action taken by Executive in connection with his duties if Executive acted
in good faith and in a manner he reasonably believed to be in, and not opposed
to, the best interest of Employer and had no reasonable cause to believe his
conduct was unlawful.

               Notwithstanding anything herein to the contrary, in the event
Employer shall terminate the employment of Executive for Good Cause hereunder,
Employer shall give at least 30 days prior written notice to Executive
specifying in detail the reason or reasons for Executive's termination.

               (d)  "Good Reason" shall exist if:

                    (1) there is a significant change in the nature or the scope
of Executive's authority;

                    (2) there is a reduction in Executive's base salary from the
rate in effect during the fiscal year before the Change in Control;

                    (3) Employer changes the principal location in which
Executive is required to perform services to one which is more than 50 miles
from his current location;

                    (4) there is a reasonable determination by Executive that,
as a result of a change in circumstances significantly affecting his position,
he is unable to exercise the authority, powers, function or duties attached to
his position;

               (e)  "Incentive Plans" shall mean any incentive, bonus deferred
compensation or similar plan or arrangement currently or hereafter made
available by Corporation or Employer in which Executive is eligible to
participate.

               (f)  "Retirement Plans" shall mean any qualified or supplemental
defined benefit retirement plan or defined contribution retirement plan,
currently or hereinafter made available by Corporation or Employer in which
Executive is eligible to participate.

               (g)  "Severance Period" shall mean the period beginning on the
date Executive's employment with Employer terminates under circumstances
described in Section 2 above and ending on the first to occur of: (1) the date
24 months thereafter, or (2) the date Executive attains or would have attained
age 65.

               (h)  "Welfare Plan" shall mean any health and dental plan,
disability plan, survivor income plan and life insurance plan or arrangement
currently or hereafter made available by Employer in which Executive is eligible
to participate.

     8.   Benefits Unfunded.  All rights of Executive and his spouse or other
          -----------------
beneficiary under this Agreement shall at all times be entirely unfunded and no
provision shall at any time be made with respect to segregating any assets of
Corporation or Employer for payment of any amounts due hereunder.  Neither
Executive nor his spouse or other

                                                                              60
<PAGE>

beneficiary shall have any interest in or rights against any specific assets of
Corporation or Employer, and Executive and his spouse or other beneficiary shall
have only the rights of a general unsecured creditor of Employer.

     9.   Litigation Expense.  Employer shall pay Executive's out of-pocket
          ------------------
expenses, including attorney's fees, in connection with any judicial proceeding
to enforce this Agreement or to construe or determine the validity of this
Agreement or otherwise in connection herewith if Executive is successful in such
litigation.

     10.  Applicable Law.  This Agreement shall be construed and interpreted
          --------------
pursuant to the laws of the State of New York.

     11.  Entire Agreement.  This Agreement contains the entire Agreement
          ----------------
between Employer and Executive and supersedes any and all previous agreements,
written or oral, among the parties relating to his or her employment by
Employer. No amendment or modification of the terms of this Agreement shall be
binding upon the parties hereto unless reduced to writing and signed by Employer
and Executive. This Agreement is the exclusive agreement between Corporation,
Employer and Executive regarding payments to Executive in the event of a change
in control of Corporation or Employer. During the term of this Agreement,
Executive shall not participate in or benefit from any other change of control
severance plan or policy which may be adopted by Corporation or Employer,
provided that thereafter Executive shall participate in such plan or policy if
one has been established by Corporation or Employer.

     12.  No Employment Contract.  Nothing contained in this Agreement shall be
          ----------------------
construed to be an employment contract between Executive and Employer.
Executive is employed at will and Employer may terminate his employment at any
time, with or without cause.

     13.  Counterparts.  This Agreement may be executed in counterparts, each of
          ------------
which shall be deemed an original.

     14.  Severability.  In the event any provision of this Agreement is held
          ------------
illegal or invalid, the remaining provisions of this Agreement shall not be
affected thereby.

     15.  Successors.  This Agreement shall be binding upon and inure to the
          ----------
benefit of the parties hereto and their respective heirs, representatives and
successors.

     16.  Notice.  Notices required under this Agreement shall be in writing and
          ------
sent by registered mail, return receipt requested, to the following addresses or
to such other address as the party being notified may have previously furnished
to the others by written notice.

          If to Employer:          Attention: Alex S. DePersis

                                   BSB Bank & Trust Company
                                   58-68 Exchange Street
                                   Binghamton, New York, 13902

          If to Executive:

                                   Larry G. Denniston
                                   8 Devon Boulevard
                                   Binghamton, New York 13903

     17.  Board Approval.  The obligations of Employer under this Agreement are
          --------------
contingent upon the approval or ratification by its Board of Directors of the
execution of this 'Agreement on its behalf.

                                                                              61
<PAGE>

In Witness Whereof, Executive has hereunto set his hand, and Corporation and
Employer have caused this agreement to be executed in their name and on their
behalf, all as of the day and year first above written.

                                   BSB BANCORP INC.
                                   BSB BANK & TRUST COMPANY

                                   By:  /s/ Alex S. DePersis
                                        --------------------
                                        Alex S. DePersis
                                        President and Chief Executive Officer

                                   By:  /s/ Larry G. Denniston
                                        ----------------------
                                        Larry G. Denniston
                                        Vice President

                                                                              62

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