Document:

EXHIBIT 10.4
          NBT BANCORP INC. 2001 Executive Incentive Compensation Plan.

<PAGE>

                                                          January 2001

                                NBT BANCORP INC.

                                Norwich, New York

                   2001 EXECUTIVE INCENTIVE COMPENSATION PLAN

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<TABLE>
<CAPTION>
                                NBT BANCORP INC.
                                Norwich, New York

                   2001 EXECUTIVE INCENTIVE COMPENSATION PLAN

                                Table of Contents

                                                                                                       PAGE

<S>                                                                                                   <C>
Introduction...........................................................................................1-2
INCENTIVE PLAN
Section I - Definitions..................................................................................3
Section II - Participation...............................................................................4
Section III - Activating the Plan........................................................................4
Section IV - Calculation of Awards.......................................................................4
Section V - President's Special Recommendations..........................................................4
Section VI - Distribution of Awards......................................................................5
Section VII - Plan Administration........................................................................6
Section VIII - Amendment, Modification, Suspension or Termination........................................6
Section IX - Effective Date..............................................................................6
Section X - Employer Relations with Participants.........................................................6
Section XI - Governing Law...............................................................................6

Incentive Plan Participants.....................................................................Appendix A
Distribution of Awards..........................................................................Appendix B
Deferred Compensation Election Agreement
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<PAGE>

                                NBT BANCORP INC.

                                Norwich, New York

                                  INTRODUCTION

It is important to examine the benefits which accrue to the organization through
the operation of the Executive  Incentive  Compensation  Plan.  The Plan impacts
directly on senior management - those critical to the  organization's  success -
and its purpose can be summarized as follows:

     *         PROVIDES  MOTIVATION:  The  opportunity  for  incentive  awards
                   provides  executives  with the impetus to "stretch" for
                   challenging, yet attainable, goals.

     *         PROVIDES RETENTION:  by enhancing the organization's competitive
                   compensation posture.

     *         PROVIDES  MANAGEMENT TEAM BUILDING:  by making the incentive
                   award dependent on the attainment of organization  goals, a
                   "team orientation" is fostered among the participant group.

     *         PROVIDES  INDIVIDUAL  MOTIVATION:  by making a portion of the
                   incentive  award dependent on the attainment of individual
                   goals, a participant is encouraged to make significant
                   personal contribution to the corporate effort.

     *         PROVIDES COMPETITIVE  COMPENSATION  STRATEGY:  The implementation
                   of incentive  arrangements is competitive with current
                   practice in the banking industry.

                                      -1-
<PAGE>

Highlights of the 2001  Executive  Incentive  Compensation  Plan included in the
following pages are below:

     1.        The Plan is competitive,  if not more menerous,  compared with
                   similar sized banking  organizations and the banking industry
                   in general.

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

     3.        Management employees are eligible for participation.

     4.        The financial criteria necessary for Plan operation consists
                   of  achieving  certain  levels of net income for the company
                   and/or its subsidiaries as applicable. Certain non recurring
                   events may be  excluded  from the  financial  results at the
                   discretion of the CEO and the Compensation Committee.

     5.        Incentive distributions will be made during the first quarter of
                   the year following the Plan Year.

     6.        Incentive  awards will be based on  attainment  of  corporate
                   goals.   Total  Incentive   Awards  may  contain   corporate,
                   subsidiary  and  individual  components;  the  corporate  and
                   subsidiary  components awarded by virtue of their performance
                   related to their goals and the individual  component  awarded
                   by virtue of  individual  performance  related to  individual
                   goals. Component percentages are shown in Appendix B.

     7.        Incentive distributions will be based on the matrix in
                   Appendix B.

                                      -2-
<PAGE>

                                NBT BANCORP INC.

                                Norwich, New York

The Board of Directors of NBT Bancorp Inc. has  established  this 2001 Executive
Incentive  Compensation  Plan.  The  purpose  of the Plan is to meet and  exceed
financial  goals and to promote a superior level of performance  relative to the
company's   competition  in  its  market  area.  Through  payment  of  incentive
compensation  beyond base  salaries,  the Plan  provides  reward for meeting and
exceeding the financial goals.

SECTION I - DEFINITIONS

     Various terms used in the Plan are defined as follows:

     BASE SALARY: the base salary at the end of the Plan year,  excluding any
          bonuses,  contributions to employee benefit programs,  or
          other compensation not designated as salary.

     BOARD OF DIRECTORS:  The Board of Directors of NBT Bancorp Inc.

     PRESIDENT & CEO:  CEO of NBT Bancorp Inc.

     CORPORATE GOALS:  Those pre-set objectives and goals which are required to
          activate distribution of awards under the Plan.

     INDIVIDUAL GOALS:  Key objectives mutually agreed upon between participants
          and superior, and approved by the CEO.

     COMPENSATION COMMITTEE:  The Compensation Committee of the Board of
          Directors of the Bank.

     PLAN  PARTICIPANT:  An  eligible  employee  of the  company or its
          subsidiaries  as  designated  by the CEO and  approved  by the
          Compensation Committee for participation for the Plan Year.

     PLAN YEAR:  The 2001 calendar year.

                                      -3-
<PAGE>

SECTION II - ELIGIBILITY TO PARTICIPATE

To be  eligible  for an award  under the  Plan,  a Plan  participant  must be an
officer in the  full-time  service of the  company at the start and close of the
calendar  year and at the time of the award unless the CEO by special  exception
recommends to the Compensation Committee a special arrangement for a newly hired
executive  who may be  designated  by the CEO and  approved by the  Compensation
Committee as eligible for an award as determined in the employment agreement.  A
Plan participant must be in the same or equivalent position, at year end as they
were when named a  participant  or have been  promoted  during the course of the
year, to be eligible for an award. If a Plan participant  voluntarily leaves the
employ of the  company or its  subsidiaries  prior to the  payment of the award,
he/she is not  eligible to receive an award.  However,  if the active  full-time
service  of a  participant  in the  Plan is  terminated  by  death,  disability,
retirement,  or if the participant is on an approved leave of absence,  an award
will be recommended  for such a participant  based on the proportion of the Plan
year that he/she was in active service with the company or its subsidiaries.

SECTION III - ACTIVATING THE PLAN

The operation of the Plan is  predicated  on attaining and exceeding  management
performance  goals.  The goals will  consist of the  attainment  of certain  net
income levels.  Non recurring events may be excluded from the financial  results
at the discretion of the CEO and the  Compensation  Committee.  The  Corporation
must  achieve a minimum  net income set forth in  Appendix B to trigger an award
pursuant to the terms of this plan.

SECTION IV - CALCULATION OF AWARDS

The Compensation Committee designates the incentive formula as shown in Appendix
B. The  Compensation  Committee  will make final  decisions  with respect to all
incentive  awards and will have final  approval over all incentive  awards.  The
individual  participant  data  regarding  maximum  award  and  formulas  used in
calculation has been customized and appears as Appendix A.

SECTION V - SPECIAL RECOMMENDATIONS

The CEO will recommend to the  Compensation  Committee the amounts to be awarded
to individual participants in the incentive Plan. The CEO may recommend a change
beyond the formula to a bonus award  (increase  or  decrease)  to an  individual
participant by a specified  percentage based on assessment of special individual
performance  beyond the individual  goals. The Compensation  Committee may amend
the CEO's bonus award. The amount of the adjustment is from 0%-20% of the actual
award. No award will be granted to an officer whose performance is unacceptable.

                                      -4-
<PAGE>

SECTION VI - DISTRIBUTION OF AWARDS

Unless a  participant  elects the  deferred  option  outlined  in the  following
paragraph,  distribution  of awards will be made during the first quarter of the
year following the Plan year.  Distribution  of the bonus award must be approved
by the Compensation Committee.

A  participant  may elect by written  notice to the Committee at any time during
the month of  December  of the Plan Year  preceding  the year to which the award
relates to have all or a portion of his award  deferred  (Deferred  Award).  Any
such election shall be irrevocable except unforeseeable financial emergency.

Any  portion  of  participant's  award  that is  deferred  shall  bear  interest
commencing  on the Award Date based on the lowest  balance in the  participant's
account during the month,  as if invested at an annual rate equal to the highest
annual rate offered at NBT on any customer deposit account in effect on the last
day of the preceding  calendar  year.  Interest shall be computed  monthly,  and
credited to the participant's account as of the last day of each calendar month.

The  Deferred  Award  shall be paid in five  (5)  annual  installments  upon the
participant's  ceasing to be  actively  employed  by the Company for any reason.
Payment  shall begin on the 31st day of January  following the year in which the
participant  ceases  to be  actively  employed  with  the  Company.  However,  a
participant  with  the  consent  of  the  Committee,  prior  to  termination  of
employment,  may elect in  writing  to have the  aggregate  amount in his or her
Deferred Award Account paid to him or her in a lump sum on a designated date.

Nothing contained in this Plan and no action taken pursuant to the provisions of
this Plan shall  create or be  constructed  to create a trust of any kind,  or a
fiduciary  relationship  between NBT and the participant,  his or her designated
beneficiary  or any other person,  nor shall the  participant  or any designated
beneficiary  have any  preferred  claim on,  any  title  to,  or any  beneficial
interest in, the assets of NBT or the payments  deferred  hereunder prior to the
time such  payments are actually paid to the  participant  pursuant to the terms
herein. To the extent that the participant, his or her designated beneficiary or
any person  acquires a right to receive  payments from NBT under this Plan, such
right shall be no greater than the right of any  unsecured  general  creditor of
NBT.

The intent of this Section of the Plan is to create a voluntary,  non-qualified,
unfunded,  deferred executive  incentive  compensation Plan which will defer the
deduction of such incentive  compensation for tax purposes by NBT and which will
correspondingly  defer the  recognition of such  compensation by the participant
until such  compensation  is actually paid. It is therefore  intended,  and this
Plan shall be construed and where necessary  modified,  so that the participants
shall not be deemed to have constructively received such deferred compensation.

In the event of death,  any approved  award earned under the  provisions of this
plan will become payable to the beneficiary designated under this Plan; or if no
such designation,  to the designated  beneficiary of the participant as recorded
under the bank's  group life  insurance  program;  or in the  absence of a valid
designation, to the participant's estate.

                                      -5-
<PAGE>

SECTION VII - PLAN ADMINISTRATION

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

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

SECTION VIII - AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION

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

SECTION IX - EFFECTIVE DATE OF THE PLAN

The effective date of the Plan shall be January 1, 2001.

SECTION X - EMPLOYER RELATION WITH PARTICIPANTS

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

SECTION XI - GOVERNING LAW

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

                                      -6-
<PAGE>EXHIBIT 10.5
               Change in control agreement with Daryl R. Forsythe.

<PAGE>

                                 January 1, 2000

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

Dear Mr. Forsythe:

         NBT Bancorp Inc. (which, together with its wholly-owned subsidiary, NBT
Bank,  National  Association,  is referred to as the  "Company")  considers  the
stability of its key  management  group to be essential to the best interests of
the Company and its  shareholders.  The Company  recognizes that, as is the case
with many publicly-held corporations, the possibility of a change in control may
arise  and that  the  attendant  uncertainty  may  result  in the  departure  or
distraction of key management  personnel to the detriment of the Company and its
shareholders.

         Accordingly,  the Board of Directors  of the Company (the  "Board") has
determined that  appropriate  steps should be taken to encourage  members of the
Company's  key  management  group to continue as employees  notwithstanding  the
possibility of a change in control of the Company.

         The Board also  believes it important  that, in the event of a proposal
for transfer of control of the  Company,  you be able to assess the proposal and
advise the Board  without  being  influenced  by the  uncertainties  of your own
situation.

         In order to  induce  you to remain in the  employ  of the  Company,  we
entered an  agreement,  approved by the Board,  dated  February  21,  1995,  and
revised by Board action on April 28, 1998, providing for severance  compensation
that the Board agreed would be provided to you in the event your employment with
the Company terminated subsequent to a change in control ("Agreement").  We have
agreed upon various changes to the Agreement,  agreed to by the Board,  and have
agreed to amend and restate the Agreement in its entirety as follows:

<PAGE>

         1.       AGREEMENT TO PROVIDE SERVICES; RIGHT TO TERMINATE.

                  (a) TERMINATION  PRIOR TO CERTAIN OFFERS.  Except as otherwise
provided in paragraph (b) below, or in any written employment  agreement between
you and the Company,  the Company or you may  terminate  your  employment at any
time. If, and only if, such termination  occurs after a change in control of the
Company (as defined in section 6), the  provisions of this  Agreement  regarding
the payment of severance compensation and benefits shall apply.

                  (b) TERMINATION  SUBSEQUENT TO CERTAIN OFFERS.  In the event a
tender offer or exchange offer is made by a person (as defined in section 6) for
more than 30 percent of the combined  voting power of the Company's  outstanding
securities  ordinarily  having  the  right  to vote at  elections  of  directors
("Voting  Securities"),  including  shares of common stock, no par value, of the
Company (the "Company Shares"),  you agree that you will not leave the employ of
the  Company  (other than as a result of  Disability  as such term is defined in
section 6) and will render  services to the Company in the capacity in which you
then serve  until such  tender  offer or exchange  offer has been  abandoned  or
terminated  or a change in control of the  Company  has  occurred as a result of
such tender offer or exchange offer.  If, during the period you are obligated to
continue in the employ of the Company pursuant to this section 1(b), the Company
reduces your  compensation,  terminates  your  employment  without Cause, or you
provide  written notice of your decision to terminate  your  employment for Good
Reason,  your obligations under this section 1(b) shall thereupon  terminate and
you will be entitled to payments provided under Section 3(b).

         2. TERM OF AGREEMENT.  This Agreement shall commence on the date hereof
and shall continue in effect until December 31, 2002;  provided,  however,  that
commencing December 31, 2000 and each December 31 thereafter, the remaining term
of this Agreement shall  automatically be extended for one additional year (to a
total of three  years)  unless at least 90 days prior to such  anniversary,  the
Company  or you  shall  have  given  notice  that  this  Agreement  shall not be
extended;  and  provided,  however,  that if a change in control of the  Company
shall  occur  while  this  Agreement  is  in  effect,   this   Agreement   shall
automatically  be  extended  for 24 months  from the date the  change in control
occurs.  This Agreement  shall  terminate if you or the Company  terminates your
employment prior to a change in control of the Company but without  prejudice to
any remedy the Company may have for breach of your  obligations,  if any,  under
section 1(b).

         3.  SEVERANCE  PAYMENT AND  BENEFITS IF  TERMINATION  OCCURS  FOLLOWING
CHANGE IN CONTROL FOR DISABILITY, WITHOUT CAUSE, OR WITH GOOD REASON. If, within
24 months  from the date of  occurrence  of any event  constituting  a change in
control of the  Company (it being  recognized  that more than one such event may
occur in which case the 24-month period shall run from the date of occurrence of
each such event),  your  employment  with the Company is  terminated  (i) by the
Company for Disability,  (ii) by the Company without Cause, or (iii) by you with
Good  Reason (as defined in section 6), or within 90 days of a Change in Control

<PAGE>

by you without  Good  Reason,  you shall be entitled to a severance  payment and
other benefits as follows:

                  (a)  DISABILITY.  If  your  employment  with  the  Company  is
terminated  for  Disability,  your  benefits  shall  thereafter be determined in
accordance with the Company's long-term disability income insurance plan. If the
Company's  long-term  disability income insurance plan is modified or terminated
following a change in control,  the Company  shall  substitute  such a plan with
benefits applicable to you substantially  similar to those provided by such plan
prior to its  modification  or  termination.  During any period that you fail to
perform  your  duties  hereunder  as a result of  incapacity  due to physical or
mental illness,  you shall continue to receive your full base salary at the rate
then  in  effect  until  your  employment  is  terminated  by  the  Company  for
Disability.

                  (b) TERMINATION WITHOUT CAUSE OR WITH GOOD REASON OR WITHIN 90
DAYS OF CHANGE IN CONTROL.  If your  employment  with the Company is  terminated
without  Cause by the  Company or with Good  Reason by you,  or by you within 90
days of a Change in Control  without Good Reason,  then the Company shall pay to
you, upon demand, the following amounts (net of applicable payroll taxes):

                           (i)      Your full base salary plus year-to-date
accrued vacation through the Date of Termination at the rate in effect on the
date the change in control occurs.

                           (ii)     As severance pay, an amount equal to the
product of your "Base  Amount"  multiplied  by the number  2.99.  As used in the
previous  sentence,  your "Base Amount" will be  determined  in accordance  with
Section 280G of the Internal  Revenue Code of 1986, as amended,  which generally
provides that the base amount is your average annual compensation  includible in
your gross income for federal income tax purposes for the five years immediately
preceding the year in which the change in control  occurs (or, if you shall have
been  employed by the Company for less than those five years,  for the number of
those years during which you shall have been  employed by the Company,  with any
partial year  annualized),  including  base salary,  non-deferred  amounts under
annual incentive, long-term performance, and profit-sharing plans, distributions
of previously  deferred amounts under such plans, and ordinary income recognized
with respect to stock options.

                  (c) RELATED  BENEFITS.  Unless you die or your  employment  is
terminated by the Company for Cause or Disability, or by you other than for Good
Reason or within 90 days of a Change in Control by you without Good Reason,  the
Company shall  maintain in full force and effect,  for the continued  benefit of
you for one year after the Date of  Termination,  all noncash  employee  benefit
plans,  programs, or arrangements  (including,  without limitation,  pension and
retirement plans and arrangements, stock option plans, life insurance and health
and accident plans and arrangements,  medical insurance plans, disability plans,
and vacation plans) in which you were entitled to participate  immediately prior

<PAGE>

to the  Date of  Termination  provided  that  your  continued  participation  is
possible after Termination under the general terms and provisions of such plans,
programs,  and arrangements;  provided,  however, that if you become eligible to
participate in a benefit plan, program, or arrangement of another employer which
confers  substantially  similar  benefits  upon you,  you shall cease to receive
benefits under this subsection in respect of such plan, program, or arrangement.
In the event that your participation in any such plan,  program,  or arrangement
is barred, the Company shall arrange to provide you with benefits  substantially
similar to those which you are  entitled to receive  under such plans,  programs
and arrangements or  alternatively,  pay an amount equal to the reasonable value
of such  substantially  similar  benefits.  If, after  termination of employment
following  a Change in  Control,  you elect  COBRA  continuation  coverage,  the
Company  will  pay you 18  months  worth of the  applicable  COBRA  premium.  If
termination follows a Change in Control specified in Section 6(b)(iii), then you
may elect in lieu of COBRA  continuation  coverage to have the acquiring  entity
obtain an individual or group health insurance coverage and the acquiring entity
will pay 18 months worth of premiums thereunder.

                  (d)  ESTABLISHMENT  OF  TRUST.   Within  five  days  following
conclusion  of a Change in  Control,  the Company  shall  establish a trust that
conforms in all  regards  with the model trust  published  in Revenue  Procedure
92-64 and deposit an amount sufficient to satisfy all liabilities of the Company
under Section 3(b) of this Agreement.

                  (e) AUTOMATIC EXTENSION.  Notwithstanding the prior provisions
of this  Section,  if an individual is elected to the Board of Directors who has
not  been  nominated  by the  Board of  Directors  as  constituted  prior to his
election,  then the term of this Agreement will  automatically be extended until
two years from the date on which such  individual  was elected if such  extended
termination  date is later than the normal  termination  date of this Agreement,
otherwise,  the  termination  date of this Agreement will be as provided  above.
This  extension  will take effect only upon the first  instance of an individual
being  elected to the Board of Directors  without  having been  nominated by the
original Board.

                  (f)  ALTERNATIVE TO LUMP SUM PAYOUT.  The amount  described in
this  subsection will be paid to you in a single  lump-sum  unless,  at least 30
days  before  the  conclusion  of a Change in  Control,  you elect in writing to
receive the severance  pay in 3 equal annual  payments with the first payment to
be made  within  30 days of demand  and the  subsequent  payments  to be made by
January 31st of each year  subsequent  to the year in which the first payment is
made,  provided that under no  circumstances  will two payments be made during a
single tax year of the recipient.

         4. PAYMENT IF TERMINATION  OCCURS FOLLOWING CHANGE IN CONTROL,  BECAUSE
OF DEATH,  FOR CAUSE,  OR  WITHOUT  GOOD  REASON.  If your  employment  shall be
terminated  following any event  constituting a change in control of the Company
because of your death,  or by the  Company  for Cause,  or by you other than for
Good Reason and not within 90 days of a Change in Control, the Company shall pay

<PAGE>

you your full base salary plus year-to-date accrued vacation through the Date of
Termination  at the rate in effect on the date of the change in control  occurs.
The Company shall have no further obligations to you under this Agreement.

         5. NO  MITIGATION.  You shall not be required to mitigate the amount of
any payment  provided  for in this  Agreement  by seeking  other  employment  or
otherwise,  nor,  except as expressly set forth herein,  shall the amount of any
payment provided for in this Agreement be reduced by any compensation  earned by
you  as the  result  of  employment  by  another  employer  after  the  Date  of
Termination, or otherwise.

         6.       DEFINITIONS OF CERTAIN TERMS.  For the purpose of this
Agreement, the terms defined in this section 6 shall have the meanings assigned
to them herein.

                  (a) CAUSE.  Termination of your  employment by the Company for
"Cause" shall mean termination  because,  and only because, you committed an act
of fraud,  embezzlement,  or theft constituting a felony or an act intentionally
against the interests of the Company which causes the Company  material  injury.
Notwithstanding  the foregoing,  you shall not be deemed to have been terminated
for Cause  unless and until there shall have been  delivered  to you a copy of a
resolution duly adopted by the affirmative vote of not less than  three-quarters
of the entire  membership of the Board at a meeting of the Board called and held
for the purpose  (after  reasonable  notice to you and an  opportunity  for you,
together with your counsel,  to be heard before the Board),  finding that in the
good faith opinion of the Board you were guilty of conduct constituting Cause as
defined above and specifying the particulars thereof in detail.

                  (b)      CHANGE IN CONTROL.  A "Change in Control" of the
Company shall mean:

                           (i)      A change in control of a nature that would
be  required  to be  reported  in  response  to  Item  6(e) of  Schedule  14A of
Regulation  14A as in  effect  on the date  hereof  pursuant  to the  Securities
Exchange Act of 1934 (the "Exchange Act");  provided that,  without  limitation,
such a change in control  shall be deemed to have  occurred  at such time as any
Person hereafter becomes the "Beneficial  Owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 30 percent or more of the combined
voting power of the Company's Voting Securities; or

                           (ii)     During any period of two consecutive years,
individuals  who at the beginning of such period  constitute the Board cease for
any reason to constitute at least a majority thereof unless the election, or the
nomination for election by the Company's shareholders,  of each new director 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; or

<PAGE>

                           (iii)    There shall be consummated (x) any
consolidation  or  merger  of the  Company  in  which  the  Company  is not  the
continuing or surviving corporation or pursuant to which Voting Securities would
be converted into cash,  securities,  or other property,  other than a merger of
the Company in which the holders of Voting  Securities  immediately prior to the
merger have the same  proportionate  ownership of common stock of the  surviving
corporation  immediately after the merger, or (y) any sale, lease,  exchange, or
other transfer (in one transaction or a series of related  transactions) of all,
or  substantially  all of the  assets  of the  Company,  provided  that any such
consolidation,  merger,  sale, lease,  exchange or other transfer consummated at
the insistence of an appropriate  banking regulatory agency shall not constitute
a change in control; or

                           (iv)     Approval by the shareholders of the Company
of any plan or proposal for the liquidation or dissolution of the Company.

                  (c) DATE OF TERMINATION.  "Date of Termination" shall mean (i)
if your  employment is terminated by the Company for  Disability,  30 days after
Notice of Termination is given (provided that you shall not have returned to the
performance of your duties on a full-time basis during such 30-day period),  and
(ii) if your employment is terminated for any other reason,  the date on which a
Notice of Termination is given; provided that if within 30 days after any Notice
of Termination is given the party receiving such Notice of Termination  notifies
the other party that a dispute exists  concerning the  termination,  the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written  agreement of the parties or by a final  judgment,  order,  or
decree  of a court of  competent  jurisdiction  (the time for  appeal  therefrom
having expired and no appeal having been perfected).  The term of this Agreement
shall be extended until the Date of Termination.

                  (d) DISABILITY.  Termination of your employment by the Company
for "Disability" shall mean termination because of your absence from your duties
with the Company on a full-time  basis for 180  consecutive  days as a result of
your  incapacity due to physical or mental illness and your failure to return to
the  performance  of your duties on a full-time  basis during the 30-day  period
after Notice of Termination is given.

                  (e)      GOOD REASON.  Termination by you of your employment
for "Good Reason" shall mean termination based on any of the following:

                           (i)      A change in your status or position(s) with
the Company,  which in your reasonable judgment,  does not represent a promotion
from your status or position(s) as in effect  immediately prior to the change in
control,  or a  change  in  your  duties  or  responsibilities  which,  in  your
reasonable  judgment,  is inconsistent  with such status or position(s),  or any
removal  of you from,  or any  failure to  reappoint  or  reelect  you to,  such
position(s),  except in connection  with the  termination of your employment for
Cause or  Disability  or as a result of your death or by you other than for Good
Reason.

<PAGE>

                           (ii)     A reduction by the Company in your base
salary as in effect immediately prior to the change in control.

                           (iii)    The failure by the Company to continue in
effect any Plan (as hereinafter  defined) in which you are  participating at the
time of the change in control of the  Company  (or Plans  providing  you with at
least  substantially  similar  benefits)  other  than as a result of the  normal
expiration  of any such  Plan in  accordance  with its terms as in effect at the
time of the change in control,  or the taking of any  action,  or the failure to
act, by the Company which would adversely affect your continued participation in
any of such Plans on at least as  favorable a basis to you as is the case on the
date of the change in control or which would materially  reduce your benefits in
the  future  under any of such  Plans or  deprive  you of any  material  benefit
enjoyed by you at the time of the change in control.

                           (iv)     The failure by the Company to provide and
credit you with the number of paid  vacation days to which you are then entitled
in accordance with the Company's normal vacation policy as in effect immediately
prior to the change in control.

                           (v)      The Company's requiring you to be based
anywhere other than where your office is located immediately prior to the change
in control  except for required  travel on the  Company's  business to an extent
substantially   consistent  with  the  business  travel  obligations  which  you
undertook on behalf of the Company prior to the change in control.

                           (vi)     The failure by the Company to obtain from
any successor the assent to this Agreement contemplated by section 8 hereof.

                           (vii)    Any purported termination by the Company of
your  employment  which is not  effected  pursuant  to a Notice  of  Termination
satisfying  the  requirements  of  this  Agreement;  and  for  purposes  of this
Agreement, no such purported termination shall be effective.

                           (viii)   Any refusal by the Company to continue to
allow you to attend to matters or engage in activities  not directly  related to
the  business of the  Company  which,  prior to the change in control,  you were
permitted by the Board to attend to or engage in.

For purposes of this subsection, "Plan" shall mean any compensation plan such as
an incentive or stock option plan or any employee benefit plan such as a thrift,
pension, profit sharing, medical, disability,  accident, life insurance plan, or
a relocation plan or policy or any other plan, program, or policy of the Company
intended to benefit employees.

<PAGE>

                  (f) NOTICE OF  TERMINATION.  A "Notice of Termination" of your
employment  given by the Company shall mean a written notice given to you of the
termination of your  employment  which shall  indicate the specific  termination
provision  in this  Agreement  relied  upon,  and shall set forth in  reasonable
detail the facts and circumstances claimed to provide a basis for termination of
your employment under the provision so indicated.

                  (g)  PERSON.  The term  "Person"  shall mean and  include  any
individual, corporation,  partnership, group, association, or other "person," as
such term is used in section 14(d) of the Exchange  Act,  other than the Company
or any employee benefit plan(s) sponsored by the Company.

         7. 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 United  States
certified  or  registered  mail,  return  receipt  requested,  postage  prepaid,
addressed  to the  respective  addresses  set  forth on the  first  page of this
Agreement,  provided  that all notices to the  Company  shall be directed to the
attention  of the Chief  Executive  Officer  of the  Company  with a copy to the
Secretary  of the  Company,  or to such other  address as either  party may have
furnished to the other in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.

         8.       SUCCESSORS; BINDING AGREEMENT.

                   (a) This  Agreement  shall  inure to the  benefit  of, and be
binding upon, any corporate or other  successor or assignee of the Company which
shall acquire, directly or indirectly, by merger,  consolidation or purchase, or
otherwise,  all or  substantially  all of the business or assets of the Company.
The  Company  shall  require any such  successor,  by an  agreement  in form and
substance  satisfactory  to you,  expressly  to assume and agree to perform this
Agreement  in the same  manner and to the same  extent as the  Company  would be
required to perform if no such succession had taken place.

                  (b)  This  Agreement  shall  inure  to the  benefit  of and be
enforceable   by   your   personal   or   legal   representatives,    executors,
administrators,  successors, heirs, distributees,  devisees and legatees. If you
should die while any amount  would still be payable to you  hereunder if you had
continued to live, all such amounts,  unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to your devisee, legatee, or
other designee or, if there is no such designee, to your estate.

<PAGE>

9.       INCREASED SEVERANCE PAYMENTS UPON APPLICATION OF EXCISE TAX.

                  (a)  ADJUSTMENT  OF  PAYMENT.  In the  event any  payments  or
benefits you become  entitled to pursuant to the Agreement or any other payments
or benefits  received or to be  received by you in  connection  with a change in
control of the Company or your  termination of employment  (whether  pursuant to
the terms of any other agreement,  plan, or arrangement,  or otherwise, with the
Company,  any person whose  actions  result in a change in control or any person
affiliated  with  the  Company  or such  person)  (collectively  the  "Severance
Payments") will be subject to the tax (the "Excise Tax") imposed by section 4999
of the Internal Revenue Code of 1986, as amended (the "Code"), the Company shall
pay you an  additional  amount (the  "Gross-Up  Payment") so that the net amount
retained by you, after deduction of the Excise Tax (but before deduction for any
federal,  state  or  local  income  tax) on the  Severance  Payments  and  after
deduction  for the  aggregate  of any  federal,  state,  or local income tax and
Excise Tax upon the Gross-Up Payment,  shall be equal to the Severance Payments.
For  purposes of  determining  whether  any of the  Severance  Payments  will be
subject  to the Excise Tax and the  amount of such  Excise  Tax,  (i) the entire
amount of the Severance Payments shall be treated as "parachute payments" within
the meaning of section  280G(b)(2) of the Code and as subject to the Excise Tax,
unless and to the extent, in the written opinion of outside tax counsel selected
by the Company's independent  accountants and reasonably acceptable to you, such
payments  (in whole or in part) are not subject to the Excise Tax;  and (ii) the
value of any noncash benefits or any deferred payment or benefit (constituting a
part of the Severance Payments) shall be determined by the Company's independent
auditors in accordance with the principles of sections 280G(d)(3) and (4) of the
Code. For purposes of determining the amount of the Gross-Up Payment,  you shall
be  deemed to pay  federal  income  taxes at the  highest  marginal  rate of the
federal income taxation  applicable to individuals  (without taking into account
surtaxes or loss or reduction of deductions)  for the calendar year in which the
Gross-Up  Payment is to be made and state and local  income taxes at the highest
marginal  rates of taxation in the state and  locality of your  residence on the
date of Termination. In the event that the amount of Excise Tax you are required
to pay is subsequently  determined to be less than the amount taken into account
hereunder,  you  shall  repay to the  Company  promptly  after the time that the
amount of such  reduction in Excise Tax is finally  determined the amount of the
reduction, together with interest on the amount of such reduction at the rate of
6 percent  per annum  from the date of the  Gross-Up  Payment,  plus,  if in the
written  opinion of outside tax counsel  selected by the  Company's  independent
accountants  and  reasonably  acceptable  to you,  such  payment  (or a  portion
thereof) was not taxable income to you when reported or is deductible by you for
federal  income tax  purposes,  the net federal  income tax benefit you actually
realize as a result of making such  payment  pursuant to this  sentence.  In the
event  that the  amount of Excise Tax you are  required  to pay is  subsequently
determined to exceed the amount taken into account hereunder,  the Company shall
make an additional  Gross-Up Payment in the manner set forth above in respect of
such excess (plus any  interest,  additions to tax, or penalties  payable by you
with  respect  to such  excess)  promptly  after the time that the amount can be
reasonably determined.

<PAGE>

                  (b) TIME OF PAYMENT:  ESTIMATED PAYMENT. The payments provided
for in subsection (a) above, shall be made not later than the fifth business day
following the Date of  Termination;  provided,  however,  that if the amounts of
such  payments  cannot be finally  determined on or before such day, the Company
shall pay to you on such day an  estimate,  as  determined  in good faith by the
Company, of the minimum amount of such payments,  and shall pay the remainder of
such  payments  (together  with  interest at the rate of 6 percent per annum) as
soon as the amount  thereof can be  determined.  In the event that the amount of
the estimated payments exceeds the amount  subsequently  determined to have been
due, such excess shall  constitute a loan by the Company to you,  payable on the
fifth day after demand by the Company  (together  with interest at the rate of 6
percent per annum).

         10.  MISCELLANEOUS.  No  provision of this  Agreement  may be modified,
waived, or discharged unless such  modification,  waiver, or discharge is agreed
to in a writing  signed by you and the Chief  Executive  Officer or President of
the  Company.  No waiver by either party hereto at any time of any breach by the
other party hereto of, or of compliance with, any condition or provision of this
Agreement  to be  performed  by such  other  party  shall be  deemed a waiver of
similar or  dissimilar  provisions or conditions at the same, or at any prior or
subsequent,  time. No agreements or representations,  oral or otherwise, express
or implied,  with respect to the subject  matter hereof have been made by either
party  which  are not  expressly  set  forth in this  Agreement.  The  validity,
interpretation,  construction,  and  performance  of  this  Agreement  shall  be
governed  by  laws  of the  State  of New  York  without  giving  effect  to the
principles of conflict of laws thereof.

         11. LEGAL FEES AND  EXPENSES.  The Company  shall pay or reimburse  any
reasonable  legal fees and expenses you may incur in  connection  with any legal
action to  enforce  your  rights  under,  or to defend  the  validity  of,  this
Agreement.  The Company will pay or reimburse  such legal fees and expenses on a
regular,  periodic basis upon  presentation  by you of a statement or statements
prepared by your counsel in accordance with its usual practices.

         12.      VALIDITY.  The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or  enforceability  of any other
provision of this Agreement, which shall remain in full force and effect.

         13. PAYMENTS DURING  CONTROVERSY.  Notwithstanding  the pendency of any
dispute  or  controversy,  the  Company  will  continue  to pay  you  your  full
compensation  in effect  when the notice  giving  rise to the  dispute was given
(including,  but not  limited  to, base  salary and  installments  of  incentive
compensation)  and continue you as a participant in all  compensation,  benefit,
and insurance plans in which you were  participating when the notice giving rise
to the dispute was given,  until the dispute is finally  resolved in  accordance
with section 7(c).  Amounts paid under this section are in addition to all other
amounts due under this  Agreement and shall not be offset  against or reduce any

<PAGE>

other amounts due under this  Agreement.  You shall be entitled to seek specific
performance  of your right to be paid until the Date of  Termination  during the
pendency of any dispute or controversy  arising under or in connection with this
Agreement.

         14.   ILLEGALITY.   Anything  in  this   Agreement   to  the   contrary
notwithstanding,  this  Agreement  is not intended and shall not be construed to
require any payment to you 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.

         If this letter correctly sets forth our agreement on the subject matter
hereof,  kindly sign and return to the Company the enclosed copy of this letter,
which will then constitute our agreement on this subject.

                                             Very truly yours,

                                             NBT BANCORP INC.

                                             By:  /S/ Everett A. Gilmour

AGREED TO:

By: /S/ Daryl R. Forsythe

Daryl R. Forsythe

<PAGE>

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