Document:

Exhibit 10.11

    
      

    

    Exhibit
      10.11

    Supplemental
      Retirement Agreement between NBT Bancorp Inc., NBT Bank, National Association
      and Daryl R. Forsythe as amended and restated effective January 1,
      2005.

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Supplemental
      Retirement Agreement

    (as
      amended and restated effective January 1 2005)

    (Revised)

    

    This
      sets
      forth the terms of an agreement for the payment of supplemental retirement
      income (“Agreement”) made as of January 1, 1995 (and as revised on
      April 28, 1998, January 1, 2000, January 1, 2001, August 2,
      2003 and again as of January 1, 2005) between (i) NBT
      BANCORP INC.,
      a
      Delaware corporation and a registered bank holding company, and NBT
      BANK, NATIONAL ASSOCIATION,
      a
      national banking association chartered under the laws of the United States,
      both
      having offices located at Norwich, New York (collectively, the “Bank”), and
      (ii) DARYL R.
      FORSYTHE,
      an
      individual residing at 21 Ridgeland Road, Norwich, New York 13815, and
      who is a member of a select group of management or highly compensated employees
      within the meaning of section 201(2) of the Employee Retirement Income
      Security Act of 1974, as amended (“Forsythe”).

    

    1.
      Purpose
      of the Agreement.
      The
      purpose of this Agreement is to provide Forsythe a supplemental retirement
      benefit in accordance with the terms of this Agreement

    2.
      Definitions.
      For
      purposes of this Agreement, the following words shall have the meaning
      indicated:

    (a)
      Actuarial
      Equivalent.
      “Actuarial Equivalent” shall have the same meaning the term “Actuarial
      Equivalent” has under Section 2.03 of Appendix A to the Qualified Plan
      (i.e.,
      the NBT
      BANCORP INC. Defined Benefit Pension Plan, as amended and restated as of October
      1, 1989, including amendments adopted through August 31, 1998) using the
      following actuarial assumptions:

    (i)
      Mortality:
      “Applicable Mortality Rate” as such term is defined in Section 2.03c of
      said Appendix A to the Qualified Plan

    (ii)
      Interest
      Rate:
      “Applicable Interest Rate” as such term is defined in Section 2.09b of said
      Appendix A to the Qualified Plan

    (b)
      Beneficiary.
      “Beneficiary” shall mean such living person or living persons designated by
      Forsythe in accordance with subsection 5(a) herein to receive benefits
      under this Agreement after his death, or his personal or legal representative,
      all as herein described and provided. Except as provided in subsection 6(b)
      herein, if no Beneficiary is designated by Forsythe or if no Beneficiary
      survives Forsythe, the Beneficiary shall be Forsythe’s estate.

    (c)
      Cause.
“Cause”
      shall mean Forsythe’s:

    (i)
      willful or gross misconduct with respect to the business and affairs of the
      Bank, or with respect to any of its affiliates for which Forsythe is assigned
      material responsibilities or duties;

    (ii)
      conviction of a felony (after the earlier of the expiration of any applicable
      appeal period without perfection of an appeal by Forsythe or the denial of
      any
      appeal as to which no further appeal or review is available to Forsythe) whether
      or not committed in the course of his employment by the Bank;

    (iii)
      willful neglect, failure, or refusal to carry out his duties under the
      Employment Agreement between NBT Bancorp Inc. and Forsythe dated as of
      August 2, 2003 (and revised as of January 1. 2005) (the “Employment Agreement”)
      in a reasonable manner (other than any such failure resulting from disability
      or
      death or from termination by Forsythe for Good Reason, as defined in the
      Employment Agreement) after a written demand for substantial performance is
      delivered to Forsythe that specifically identifies the manner in which the
      Bank
      believes that Forsythe has not substantially performed his duties and he has
      not
      resumed substantial performance of his duties on a continuous basis within
      thirty days of receiving such demand; or

    (iv)
      breach of any representation or warranty in section 6(a) of the Employment
      Agreement or of any agreement contained in section 1, 4, 5, or 6(b) of the
      Employment Agreement, which breach is material and adverse to the Bank or any
      of
      its affiliates for which Forsythe is assigned material responsibilities or
      duties.

    (d)
      Change
      of Control.
“Change
      of Control” shall mean a Change in Control as such term is defined in the Change
      of Control Agreement between Forsythe and the Bank dated January 1, 2000 (a
      revision of the April 28, 1998 and February 21, 1995 agreements).

    (e)
      Code.
“Code”
      shall mean the Internal Revenue Code of 1986, as amended.

    (f)
      Determination
      Date.
      “Determination Date” shall mean the date of Forsythe’s retirement as a Full-Time
      Employee.

    (g)
      Final
      Average Compensation.
“Final
      Average Compensation” shall have the same meaning as the term “Final Average
      Compensation” has under Section 2.27 of Appendix A to the Qualified Plan
      (i.e.,
      the NBT
      BANCORP INC. Defined Benefit Pension Plan, as amended and restated as of October
      1, 1989, including amendments adopted through August 31, 1998), except that
      in
      determining the amount of Compensation (as defined in Section 2.14 of said
      Appendix A to the Qualified Plan) to be used in calculating Final Average
      Compensation under Section 2.27 of said Appendix A to the Qualified Plan,
      Compensation shall not be subject to the compensation limitation of section
      401(a)(17) of the Code.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (h)
      Full-Time
      Employee.
      “Full-Time Employee” shall mean an employee of the Bank who works not less than
      1,000 hours in a calendar year.

    (i)
      Other
      Retirement Benefits.
“Other
      Retirement Benefits” shall mean the sum of:

    (i)
      The
      annual benefit payable to Forsythe from the Qualified Plan, plus

    (ii)
      The
      annual benefit that could be provided by (A) Bank contributions (other than
      elective deferrals) made on Forsythe’s behalf under the NBT Bancorp Inc.
      401(k) and Employee Stock Ownership Plan, and (B) actual earnings on
      contributions in (A), if such contributions and earnings were converted to
      a
      benefit payable at age 65 in the same form as the benefit paid under this
      Agreement, using the same actuarial assumptions as are provided under
      subsection 2(a).

    The
      amount of Other Retirement Benefits shall be determined by an actuary selected
      by the Bank, with such determination to be made without reduction for payment
      of
      benefits prior to any stated “normal retirement date” and without regard to
      whether Forsythe is receiving payment of such benefits on the Determination
      Date.

    (j)
      Present
      Value.
      “Present Value” shall mean the present value of a benefit determined on the
      basis of the following actuarial assumptions:

    (i)
      Mortality:
      “Applicable Mortality Rate” as such term is defined in Section 2.03c of
      Appendix A to the Qualified Plan (i.e.,
      the NBT
      BANCORP INC. Defined Benefit Pension Plan, as amended and restated as of October
      1, 1989, including amendments adopted through August 31, 1998).

    (ii)
      Interest
      Rate:
      “Applicable Interest Rate” as such term is defined in Section 2.09b of said
      Appendix A to the Qualified Plan.

    (k)
      Qualified
      Plan.
      “Qualified Plan” shall mean the NBT BANCORP INC. Defined Benefit Pension
      Plan, as amended and restated effective as of January 1, 2000.

    (l)
      Social
      Security Benefit.
“Social
      Security Benefit” shall mean Forsythe’s actual social security benefit at his
      Social Security Retirement Age.

    (i)
      Social
      Security Retirement Age.
“Social
      Security Retirement Age” shall have the same meaning the term “Social Security
      Retirement Age” has under Section 2.58 of Appendix A to the Qualified Plan
      (i.e.,
      the NBT
      BANCORP INC. Defined Benefit Pension Plan, as amended and restated as of October
      1, 1989, including amendments adopted through August 31, 1998).

    (m)
      Year
      of Service.
“Year
      of Service” shall mean a calendar year in which Forsythe completes not less than
      1,000 hours of service.

    3.
      Amount
      of Supplemental Retirement Benefit

    (a)
      Supplemental
      Retirement Benefit.

    (i)
      Amount
      Payable as a Cash Benefit.
      Upon
      Forsythe’s retirement as a Full-Time Employee, the Bank shall pay Forsythe a
      Supplemental Retirement Benefit the amount (as apportioned in paragraphs A
      and B
      below and section 4 herein) of which shall be calculated in accordance with
      the
      benefit formula set forth in Appendix A attached to this Agreement.

    A.
      Accrued
      Benefit as of December 31, 2004.
      Starting from January 1, 1995, Forsythe has continuously accrued a
      supplemental cash retirement benefit under pervious versions of the Agreement
      through, and including, December 31, 2004 (the “Pre-2005 Accrued Cash
      Benefit”). It is the Bank’s intention that the Pre-2005 Accrued Cash Benefit
      shall be deemed a “grandfathered” benefit with respect to the application of
      section 409A of the Code. The Pre-2005 Accrued Cash Benefit shall be based
      on a ratio of a numerator of 10, over a denominator of 13.6667 (equal to
      Forsythe’s total years of Full-Time Employee service with the Bank commencing
      January 1995, assuming he continues in service until age 65).

    B.
      Post-2004
      Accrual of Benefits.
      Starting from January 1, 2005, through and including Forsythe’s retirement
      from Full-Time Employee service with the Bank, Forsythe shall continue to accrue
      a supplemental cash retirement benefit under the Agreement (the “Post-2004
      Accrued Cash Benefit”). The Post-2004 Accrued Cash Benefit shall be subject to
      the application of section 409A of the Code. The Post-2004 Accrued Cash
      Benefit shall be based on a ratio of a numerator equal to Forsythe’s years of
      Full-Time Employee service with the Bank commencing from January 1995 through
      Forsythe’s retirement, over a denominator of 13.6667 (equal to Forsythe’s total
      years of Full-Time Employee service with the Bank commencing January 1995,
      assuming he continues in service until age 65), less the Accrued Benefit as
      of
      December 31, 2004.

    (ii)
      Continued
      Medical Benefits.
      Upon
      Forsythe’s retirement, the Bank will continue in force the same level of medical
      benefits (including but not limited to medical, dental and vision care) that
      were in effect at the time of Executive’s retirement at the same cost sharing as
      in effect at the time of Executive’s retirement, for Executive and for his
      spouse (if alive) until their deaths. Any subsequent adjustments (including
      levels and cost) made to the Bank’s benefit plans shall effect Forsythe is the
      same manner as they would had he been employed at the same level as of the
      date
      of his retirement.

    4.
      Time
      of Payment.

    Except
      as
      provided in section 6 (payment on death), the Bank shall commence payment
      of the Pre-2005 Accrued Cash Benefit as of the month immediately following
      the
      month of Forsythe’s retirement as a Full-Time Employee; provided, however, no
      payment of the Post-2004 Accrued Cash Benefit shall commence earlier than the
      first day of the seventh (7th)
      month
      following Forsythe’s “separation from service” as that phrase is defined for
      purposes of section 409A of the Code. Forsythe’s continued medical benefits
      shall continue in force uninterrupted as stated in paragraph 3(a)(ii)
      herein.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    5.
      Form
      of Payment.

    (a)
      The
      Accrued Cash Benefits described in sections 3 and 4 herein shall be paid as
      a straight life annuity, payable in monthly installments, for Forsythe’s life;
      provided, however, that if Forsythe has no surviving spouse and dies before
      having received 60 monthly payments, such monthly payments shall be continued
      to
      his Beneficiary until the total number of monthly payments to Forsythe and
      his
      Beneficiary equal 60, whereupon all payments shall cease and the Bank’s
      obligation under this Agreement shall be deemed to have been fully discharged.
      If Forsythe and his Beneficiary shall die before having received a total of
      60
      monthly payments, an amount equal to the Actuarial Equivalent of the balance
      of
      such monthly payments shall be paid in a single sum to the estate of the
      survivor of Forsythe and his Beneficiary. If Supplemental Retirement Benefits
      are payable in the form described in this subsection 5(a), Forsythe shall
      designate in writing, as his Beneficiary, any person or persons, primarily,
      contingently or successively, to whom the Bank shall pay benefits following
      Forsythe’s death if Forsythe’s death occurs before 60 monthly payments have been
      made.

    (b)
      Notwithstanding the form of payment described in subsection 5(a), if
      Forsythe is married on the date payment of the Accrued Cash Benefit commences,
      the benefit shall be paid as a 50% joint and survivor annuity with Forsythe’s
      spouse as the Beneficiary. The 50% joint and survivor annuity shall be the
      Actuarial Equivalent of the benefit described in subsection 5(a). If the
      Accrued Cash Benefit is payable pursuant to this subsection 5(b), but
      Forsythe’s spouse fails to survive him, no payments will be made pursuant to
      this Agreement following Forsythe’s death.

    ©
      Notwithstanding the foregoing provisions of this section 5, the Bank, in
      its sole discretion, may accelerate the payment of all or any portion of the
      Pre-2005 Accrued Cash Benefit at any time. Any Pre-2005 Accrued Cash Benefit
      payment accelerated in accordance with this subsection 5(c) shall be the
      Actuarial Equivalent of the payment being accelerated. Except as provided in
      subsection 6(b) herein, there shall be no acceleration of the Post-2004 Accrued
      Cash Benefit.

    6.
      Payments
      upon Forsythe’s Death.

    (a)
      Except as provided in subsections 6(b) and (c) and Appendix A section 4, if
      Forsythe shall die before his retirement from the Bank, no payment shall be
      due
      his spouse or estate under this Agreement

    (b)
      If
      Forsythe’s death shall occur after his retirement from the Bank, but before
      payment of any Pre-2005 Accrued Cash Benefit has commenced, Forsythe’s surviving
      spouse shall be paid as a straight annuity, 50 percent of the total (both
      Pre-2005 and Post-2004) Accrued Cash Benefit for her life commencing within
      30
      days following Forsythe’s death, calculated in accordance with
      subsection 3(a). Such payments shall be made in monthly installments,
      subject to the right of the Bank to accelerate payment at any time,
      notwithstanding subsection 5(c). However, if Forsythe’s spouse fails to
      survive him, the Bank shall pay to Forsythe’s estate a lump sum benefit equal to
      50 percent of the Present Value of Forsythe’s total Accrued Cash
      Benefit.

    (c)
      Except as otherwise provided in subsection 6(b), no payments shall be made
      under this Agreement if Forsythe dies before payment of any Accrued Cash Benefit
      begins and his spouse fails to survive him.

    (d)
      If
      Forsythe’s death shall occur after payment of an Accrued Cash Benefit has
      commenced, Forsythe surviving spouse or other Beneficiaries shall receive
      payments under this Agreement to the extent provided in
      section 5.

    7.
      Forfeiture
      for Cause.
      Notwithstanding any other provision of this Agreement, if Forsythe’s employment
      with the Bank is terminated for Cause, Forsythe and his spouse or other
      Beneficiaries shall forfeit all rights to any payment or other benefit under
      this Agreement.

    8.
      Powers.
      The
      Bank shall have such powers as may be necessary to discharge its duties under
      this Agreement, including the power to interpret and construe this Agreement
      and
      to determine all questions regarding employment, disability status, service,
      earnings, income and such factual matters as birth and marital status. The
      Bank’s determinations hereunder shall he conclusive and binding upon the parties
      hereto and all other persons having or claiming an interest under this
      Agreement. The Bank shall have no power to add to, subtract from, or modify
      any
      of the terms of this Agreement. The Bank’s determinations hereunder shall be
      entitled to deference upon review by any court, agency or other entity empowered
      to review its decisions, and shall not be overturned or set aside by any court,
      agency or other entity unless found to be arbitrary, capricious or contrary
      to
      law.

    9.
      Claims
      Procedure.

    (a)
      Any
      claim for benefits by Forsythe, his spouse or other Beneficiaries shall be
      made
      in writing to the Bank. In this section, Forsythe and his Beneficiaries are
      referred to as “claimants.”

    (b)
      If
      the Bank denies a claim in whole or in part, it shall send the claimant a
      written notice of the denial within 90 days after the date it receives a claim,
      unless it needs additional time to make its decision. In that case, the Bank
      may
      authorize an extension of an additional 90 days if it notifies the claimant
      of
      the extension within the initial 90-day period. The extension notice shall
      state
      the reasons for the extension and the expected decision date.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (c)
      A
      denial notice shall contain:

    (i)
      The
      specific reason or reasons for the denial of the claim;

    (ii)
      Specific reference to pertinent Agreement provisions upon which the denial
      is
      based;

    (iii)
      A
      description of any additional material or information necessary to perfect
      the
      claim, with an explanation of why the material or information is necessary;
      and

    (iv)
      An
      explanation of the review procedures provided below.

    (d)
      Within 60 days after the claimant receives a denial notice, he or she may file
      a
      request for review with the Bank. Any such request must be made in
      writing.

    (e)
      A
      claimant who timely requests review shall have the right to review pertinent
      documents, to submit additional information or written comments, and to be
      represented.

    (f)
      The
      Bank shall send the claimant a written decision on any request for review within
      60 days after the date it receives a request for review, unless an extension
      of
      time is needed, due to special circumstances. In that case, the Bank may
      authorize an extension of an additional 60 days, provided it notifies the
      claimant of the extension within the initial 60-day period.

    (g)
      The
      review decision shall contain:

    (i)
      The
      specific reason or reasons for the decision; and

    (ii)
      Specific reference to the pertinent Agreement provisions upon which the decision
      is based.

    (h)
      If
      the Bank does not send the claimant a review decision within the applicable
      lime
      period, the claim shall be deemed denied on review.

    (i)
      The
      denial notice or, in the case of’ a timely review, the review decision
      (including a deemed denial under subsection 9(h)) shall be the Bank’s final
      decision.

    10.
      Assignment.
      Neither
      Forsythe nor his spouse or other Beneficiaries may transfer his, her or their
      right to payments to which he, she or they are entitled under this Agreement.
      Except insofar as may otherwise he required by law, any Supplemental Retirement
      Benefit payable under this Agreement shall not be subject in any manner to
      alienation by anticipation, sale, transfer, assignment, pledge or encumbrance,
      nor subject to the debts, contracts, or liabilities of Forsythe or his spouse
      or
      other Beneficiaries.

    11.
      Continued
      Employment.
      This
      Agreement shall not be construed as conferring on Forsythe a right to continued
      employment with the Bank.

    12.
      Funding.

    (a)
      The
      Supplemental Retirement Benefit at all times shall he entirely unfunded, and
      no
      provision shall at any time be made with respect to segregating any assets
      of
      the Bank for payments of any benefits hereunder, except that in the event of
      a
      Change of Control, the Bank, within five (5) days of such Change of
      Control, shall fund a grantor trust within the meaning of section 671 of
      the Code with an amount sufficient to cover all potential liabilities under
      this
      Agreement.

    (b)
      Neither Forsythe nor his spouse or other Beneficiaries shall have any interest
      in any particular assets of the Bank by reason of the right to receive a benefit
      under this Agreement. Forsythe and his spouse or other Beneficiaries shall
      have
      only the rights of general unsecured creditors of the Bank with respect to
      ally
      rights under this Agreement.

    (c)
      Nothing contained in this Agreement shall constitute a guarantee by the Bank
      or
      any entity or person that tile assets of the Bank will he sufficient to pay
      any
      benefit hereunder.

    13.
      Withholding.
      Any
      payment made pursuant to this Agreement shall be reduced by federal and state
      income, FICA or other employee payroll, withholding or other similar taxes
      the
      Bank may be required to withhold. In addition, as the Accrued Cash Benefit
      accrues during Forsythe’s employment with the Bank, the Bank may withhold from
      Forsythe’s regular compensation from the Bank any FICA or other employee
      payroll, withholding or other similar taxes the Bank may be required to
      withhold.

    14.
      Successors
      and Assigns.
      This
      Agreement shall be binding upon, and shall inure to the benefit of, the
      successors and assigns of the Bank.

    15.
      Applicable
      Laws.
      This
      Agreement shall he construed and administered in accordance with the laws of
      the
      State of New York, except to the extent preempted by federal
      law.

    16.
      Amendment.
      This
      Agreement may not be amended, modified or otherwise altered except by written
      instrument executed by both parties.

    17.
      Entire
      Agreement.
      This
      Agreement constitutes the entire agreement and understanding of the parties,
      and
      supersedes all prior agreements or understanding (whether oral or written)
      between the parties relating to deferred compensation and/or supplemental
      retirement income.

    

    The
      parties hereby execute this Agreement as follows:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    NBT
      BANCORP INC.

     

    By:
      /S/
      Michael J. Chewens

     

    Dated:
      December 19, 2005

    

    Its:
      Secretary

     

    NBT
      BANK, NATIONAL ASSOCIATION

     

    By:
      /S/
      Michael J. Chewens

     

    Dated:
      December 19, 2005

    

    Its:
      Secretary

     

    Dated:
      December 19, 2005

     

    /S/
      Daryl
      R. Forsythe

    

    DARYL
      R. FORSYTHE

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    APPENDIX
      A

    (To
      The Supplemental Retirement Agreement Amended and Restated as of January 1,
      2005)

    

    

    1.
      Supplemental Retirement Benefit Formula for Purposes of Agreement
      Section 3.

    a.
      Amount Payable on and after Age 65. If Forsythe shall remain
      employed by the Bank until reaching his 65th birthday, serving as a Full-Time
      Employee until such date, and subject to the other terms and conditions of
      this
      Agreement, the Bank shall pay Forsythe an annual “Supplemental Retirement
      Benefit” determined as follows:

    i.
      On and after Age 65 but before Social Security Retirement Age.
      Forsythe shall be entitled to a Supplemental Retirement Benefit on and after
      his
      65th birthday but before his Social Security Retirement Age in an amount equal
      to the excess of (1) 75 percent of Forsythe’s Final Average
      Compensation, over (2) Forsythe’s Other Retirement Benefits, determined as
      of the Determination Date and calculated in accordance with Agreement subsection
      2(i).

    ii.
      On and after Social Security Retirement Age. Forsythe shall be
      entitled to a Supplemental Retirement Benefit on and after his Social Security
      Retirement Age in an amount equal to the excess of (1) 75 percent of
      Forsythe’s Final Average Compensation, over (2) the sum of
      (aa) Forsythe’s Other Retirement Benefits, determined as of the
      Determination Date and calculated in accordance with Agreement
      subsection 2(i), plus (bb) Forsythe’s Social Security
      Benefit.

    b.
      Amount Payable on and after Age 56 but before Age 60.
      If Forsythe shall remain employed by the Bank until reaching his 56th birthday,
      serving as a Full-Time Employee until such date and he continues to serve as
      a
      Full-Time Employee until the date of his retirement, and he retires then or
      thereafter but before reaching his 60th birthday, and subject to the other
      terms
      and conditions of the Agreement, the Bank shall pay Forsythe on his 60th
      birthday, pursuant to Appendix section 3, or to his spouse or other Beneficiary,
      pursuant and subject to Appendix section 4 if he has died before his 60th
      birthday, a reduced early Supplemental Retirement Benefit calculated in
      accordance with Appendix section 2 and the following schedule;

    i.
      If the
      date of Forsythe’s retirement shall be on or after his 56th birthday but before
      his 57th birthday, the Bank shall pay Forsythe 20% of the reduced early
      Supplemental Retirement Benefit so calculated;

    ii.
      If
      the date of Forsythe’s retirement shall be on or after his 57th birthday but
      before his 58th birthday, the Bank shall pay Forsythe 40% of the reduced early
      Supplemental Retirement Benefit so calculated;

    iii.
      If
      the date of Forsythe’s retirement shall be on or after his 58th birthday but
      before his 59th birthday, the Bank shall pay Forsythe 60% of the reduced early
      Supplemental Retirement Benefit so calculated; and

    iv.
      if
      the date of Forsythe’s retirement shall be on or after his 59th birthday but
      before his 60th birthday, the Bank shall pay Forsythe 80% of the reduced early
      Supplemental Retirement Benefit so calculated.

    c.
      Amount Payable on and after Age 60 but before Age 65.
      If Forsythe shall remain employed by the Bank until reaching his 60th birthday,
      serving as a Full-Time Employee until such date and he continues to serve as
      a
      Full-Time Employee until the date of his retirement, and he retires then or
      thereafter but before reaching his 65th birthday, and subject to the other
      terms
      and conditions of this Agreement, the Bank shall pay Forsythe a reduced early
      Supplemental Retirement Benefit calculated in accordance with Appendix section
      2
      except that at age 62 the amount shall not be less than an amount equal to
      the excess of (A) 65% of Forsythe’s Final Average Compensation over
      (B) Forsythe’s Other Retirement Benefits determined as of the Determination
      Date and calculated in accordance with Agreement section 2(i).

    2.
      Early Supplemental Retirement Benefit. If the Bank commences
      payment of a reduced early Supplemental Retirement Benefit before Forsythe
      reaches age 65, the amount paid shall equal the product of (i) the
      Supplemental Retirement Benefit, as calculated under Appendix section 1(a)(i),
      times (ii) a fraction, the numerator of which shall be the number of
      complete months of Forsythe’s employment with the Bank after
      January 1, 1995, and the denominator of which is 164 (the number of
      complete months of employment Forsythe would have had after
      January 1, 1995 if he remained employed by the Bank until the first
      day of the month following his 65th birthday).

    3.
      Payment. Subject only to the section 409A of the Code rules
      regarding distribution of any portion of the Post-2004 Accrued Cash Benefit,
      the
      Bank shall commence payment of a reduced early Supplemental Retirement Benefit
      on the first day of the month following Forsythe’s Determination Date in
      connection with early retirement after reaching age 60 and prior to the date
      of
      his 65th
      birthday; provided that, if Forsythe shall retire prior to his 60th
      birthday
      as permitted in this Agreement, the Bank shall commence payment of the reduced
      early Supplemental Retirement Benefit on the first day of the month following
      Forsythe’s 60th
      birthday.

    4.
      Death. If Forsythe dies before his 60th
      birthday
      and on or after his 56th
      birthday, before payment of any Supplemental Retirement Benefit has commenced,
      Forsythe’s surviving spouse shall be paid, in monthly installments, as a
      straight life annuity, 50 percent of such Supplemental Retirement Benefit for
      her life commencing within 30 days following Forsythe’s death, calculated in
      accordance with Appendix subsection 1(b) and, if such death occurs while
      Forsythe is employed by the Bank, as if he had retired on the day before his
      death, subject to the right of the Bank to accelerate such payments as provided
      in Agreement subsection 5(c). However, if Forsythe’s spouse fails to survive
      him, the Bank shall pay to Forsythe’s estate a lump sum benefit equal to 50
      percent of the Present Value of Forsythe’s Supplemental Retirement Benefit,
      calculated as provided in the preceding sentence.Exhibit 10.12

    
      

    

     

    Exhibit
      10.12

    Death
      Benefits Agreement between NBT Bancorp Inc., NBT Bank, National Association
      and
      Daryl R. Forsythe made August 22, 1995.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    DEATH
      BENEFITS AGREEMENT

    THIS
      AGREEMENT, made and entered into this 22nd day of August, 1995, by and among
      NBT
      Bancorp Inc., a Delaware corporation and registered bank holding company, and
      NBT Bank, National Association, a national banking association organized under
      the laws of the United States (hereinafter referred to collectively as the
      "Bank") and Daryl R. Forsythe, an individual residing at 13 Concord Street,
      Sidney, New York, NY 13838 (hereinafter referred to as the "Employee").

    

    WHEREAS,
      the Bank has retained the Employee as its president and chief executive officer;
      and 

    

    WHEREAS,
      the Bank is desirous of retaining the services of the Employee; and

    

    WHEREAS,
      the Bank is desirous of assisting the Employee in carrying life insurance on
      his
      life; and 

    

    WHEREAS,
      the Bank has determined that its interests can best be served under a
      "split-dollar" arrangement; and 

    

    WHEREAS,
      the Bank and the Employee have applied for Insurance Policy No. 8876212 (the
      "Policy") issued by the New England Mutual Life Insurance Company ("The New
      England") in the face amount of $800,000 on the 

    Employee's
      life; and 

    

    WHEREAS,
      the Bank and the Employee agree to make said insurance policy subject to this
      split-dollar agreement; and 

    

    WHEREAS,
      it is now understood and agreed that this split-dollar agreement is to be
      effective as of the date on which the Policy was issued by The New England.
      

    

    NOW,
      THEREFORE, for value received and in consideration of the mutual covenants
      contained herein, the parties agree as follows: 

    

    ARTICLE
      I
      - DEFINITIONS

    

    For
      purposes of this Agreement, the following terms will have the meanings set
      forth
      below: 

    
      	
              1.

            	
              "Cash
                Surrender Value of the Policy" will mean the Cash Value of the Policy,
                plus the cash value of any paid-up additions, plus any dividend
                accumulations and unpaid dividends, and less any Policy Loan Balance.
                

            

    

    
      	
              2.

            	
              "Cash
                Value of the Policy" will mean the cash value as illustrated in the
                table
                of values shown in the Policy. 

            

    

    
      	
              3.

            	
              "Bank's
                Interest in the Policy" will be defined in Article VII.
                

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              4.

            	
              "Current
                Loan Value of the Policy" will mean the Loan Value of the Policy
                reduced
                by any outstanding Policy Loan Balance.

            

    

    
      	
              5.

            	
              "Loan
                Value of the Policy" will mean the amount which together with loan
                interest will equal the Cash Value of the Policy and of any paid-up
                additions on the next loan interest due date or on the next premium
                due
                date, whichever is the smaller amount.

            

    

    
      	
              6.

            	
              "Policy
                Loan Balance" at any time will mean policy loans outstanding plus
                interest
                accrued to date. 

            

    

    

    ARTICLE
      II - ALLOCATION OF PREMIUMS

    

    The
      Bank
      will pay all premiums on the Policy when due. 

    

    ARTICLE
      III - WAIVER OF PREMIUMS RIDER

    

    The
      Bank
      has added a rider to the Policy providing for the waiver of premiums in the
      event of the Employee's disability. Any additional premium attributable to
      such
      rider will be payable by the Bank. 

    

    ARTICLE
      IV - OTHER RIDERS AND SUPPLEMENTAL AGREEMENTS

    

    Should
      the parties to this Agreement deem it desirable, the Bank will add to the Policy
      one or more of such other riders and supplemental agreements which may be
      available from The New England from time to time. Any additional premium
      attributable to any such rider or supplemental agreement will be payable by
      the
      Bank. Notwithstanding the provisions of Article VIII, any additional death
      benefits provided by such rider or supplemental agreement will be paid to the
      Bank, unless otherwise agreed to by the parties at the time of the adoption
      of
      the particular rider or supplemental agreement. 

    

    ARTICLE
      V
      - PAYMENT OF PREMIUMS

    

    Any
      premium or portion thereof which is payable by the Employee under any Article
      of
      this Agreement may at the election of the Employee be deducted from the cash
      compensation otherwise payable to him, and the Bank agrees to transmit that
      premium or portion, along with any premium or portion thereof payable by it,
      to
      The New England on or before the premium due date. 

    

    ARTICLE
      VI - APPLICATION OF POLICY DIVIDENDS

    

    All
      dividends attributable to the Policy will be to provide paid-up additional
      insurance.

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      VII - RIGHTS IN THE POLICY

    

    The
      Employee will have the sole right to designate the beneficiary of the death
      proceeds of the Policy in excess of the Bank's Interest in the Policy. The
      Bank
      will have and may exercise, except as limited hereinafter, all ownership rights
      in the Policy. The Bank will not surrender the policy for cancellation except
      upon expiration of the thirty (30) day period described in Article X. The Bank
      will not without the written consent of the Employee assign its rights in the
      Policy, other than for the purposes of obtaining a loan against the Policy,
      to
      anyone other than the Employee. The Bank will not take any action dealing with
      The New England that would impair any right or interest of the Employee in
      the
      Policy. The Bank will have the right to borrow from The New England and to
      secure that loan by the Policy, an amount which, together with the unpaid
      interest accrued thereon, will at no time exceed the lesser of (a) the Bank's
      Interest in the Policy or (b) the Loan Value of the Policy. "Bank's Interest
      in
      the Policy" will mean, at any time at which the value of such interest is to
      be
      determined under this Agreement, the Cash Surrender Value of the Policy at
      such
      time. 

    

    ARTICLE
      VIII - RIGHTS TO THE PROCEEDS AT DEATH

    

    In
      the
      event of the Employee's death while this Agreement is in force, the beneficiary
      designated by the Employee will receive $600,000 from the Policy proceeds.
      The
      Bank will receive the remainder of the Policy proceeds. 

    

    ARTICLE
      IX - TERMINATION OF AGREEMENT

    

    
      	
              1.

            	
              This
                Agreement may be terminated at any time while the Employee is living
                by
                written notice thereof by either the Bank or the Employee to the
                other;
                and, in any event, this Agreement will terminate upon termination
                of the
                Employee's employment. 

            

    

    
      	
              2.

            	
              In
                the event of the Employee's total disability, as defined in the rider,
                which begins while the Employee is employed, while the rider is in
                force,
                and which continues for at least six months, the benefits provided
                under
                this Agreement will continue until midnight before the Employee's
                65th
                birthday. If at any time following the initial six month period of
                disability as defined in the rider The New England stops waiving
                premiums,
                then Section 1 of this Article will again be applicable.
                

            

    

    

    ARTICLE
      X
      - EMPLOYEE RIGHTS UPON TERMINATION

    

    Upon
      termination of the Agreement, the Employee will transfer all of his right,
      title
      and interest in the Policy to the Bank, by executing such documents as are
      necessary to transfer such right, title and interest as of the date of
      termination. The Bank will thereafter be able to deal with the Policy in any
      way
      it may see fit.

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      XI - PLAN MANAGEMENT

    

    For
      purposes of the Employee Retirement Income Security Act of 1974 ("ERISA"),
      the
      Bank will be the "Named Fiduciary" and "Plan Administrator" of the split dollar
      life insurance plan (the "Plan") for which this Agreement is hereby designated
      the written plan instrument. The Bank's board of directors may authorize a
      person or group of persons to fulfill the responsibilities of the Bank as Plan
      Administrator. The Named Fiduciary or the Plan Administrator may employ others
      to render advice with regard to its responsibilities under this Plan. The Named
      Fiduciary may also allocate fiduciary responsibilities to others and may
      exercise any other powers necessary for the discharge of its duties to the
      extent not in conflict with ERISA. 

    

    ARTICLE
      XII - CLAIMS PROCEDURE

    

    
      	
              1.

            	
              Filing
                Claims: Any insured, beneficiary or other individual (hereinafter
                "Claimant") entitled to benefits under the Plan or under the Policy
                will
                file a claim request with the Plan Administrator with respect to
                benefits
                under the Plan with The New England with respect to benefits under
                the
                Policy. The Plan Administrator will, upon written request of the
                Claimant,
                make available copies of any claim forms or instructions provided
                by The
                New England or advise the Claimant where such forms or instructions
                may be
                obtained.

            

    

    

    
      	
              2.

            	
              Notification
                to Claimant: If a claim is wholly or partially denied, the Plan
                Administrator will furnish to the Claimant a notice of the decision
                within
                ninety (90) days in writing and in a manner calculated to be understood
                by
                the Claimant, which notice will contain the following information:
                

            

    

    

    
      	 	
              (a)

            	
              The
                specific reason or reasons for the denial;

            

    

    
      	 	
              (b)

            	
              Specific
                reference to pertinent Plan provisions upon which the denial is based;
                

            

    

    
      	 	
              (c)

            	
              A
                description of any additional material or information necessary for
                the
                Claimant to perfect the claim and an explanation of why such material
                or
                information is necessary; and 

            

    

    
      	 	
              (d)

            	
              An
                explanation of the Plan's claims review procedure describing the
                steps to
                be taken by a Claimant who wishes to submit his claim for review.
                

            

    

    

    In
      the
      case of benefits which are provided under the Policy, the initial decision
      on
      the claims will be make by The New England. 

    

    
      	
              3.

            	
              Review
                Procedure: A Claimant or his authorized representative may with respect
                to
                any denied claim: 

            

    

    
      	 	
              (a)

            	
              Request
                a review upon written application filed within sixty (60) days after
                receipt by the Claimant of written notice of the denial of his claim;
                

            

    

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    

    
      	 	
              (b)

            	
              Review
                pertinent documents; and 

            

    

    
      	 	
              (c)

            	
              Submit
                issues and comments in writing. 

            

    

    

    Any
      request or submission will be in writing and will be directed to the Named
      Fiduciary (or its designee). The Named Fiduciary (or its designee) will have
      the
      sole responsibility for the review of any denied claim and will take all steps
      appropriate in the light of its findings. 

    

    
      	
              4.

            	
              Decision
                on Review: The Named Fiduciary (or its designee). The Named Fiduciary
                (or
                its designee) will render a decision upon review. If special circumstances
                (such as the need to hold a hearing or any matter pertaining to the
                denied
                claim) warrant additional time, the decision will be rendered as
                soon as
                possible, but not later than one hundred twenty (120) days after
                receipt
                of the request for review. Written notice of any such extension will
                be
                furnished to the Claimant prior to the commencement of the extension.
                The
                decision on review will be in writing and will include specific reasons
                for the decision, written in a manner calculated to be understood
                by the
                Claimant, as well as specific references to the pertinent provisions
                of
                the Plan on which the decision is based. If the decision on review
                is not
                furnished to the Claimant with the time limits prescribed above,
                the claim
                will be deemed denied on review. 

            

    

    

    ARTICLE
      XIII - SATISFACTION OF CLAIM

    

    The
      Employee agrees that his rights and interests, and the rights and interests
      of
      any persons taking under or through him, will be completely satisfied upon
      compliance by the Bank with the provisions of this Agreement. 

    

    ARTICLE
      XIV - AMENDMENT AND ASSIGNMENT

    

    This
      Agreement may be altered, amended or modified, including the addition of any
      extra policy provisions, by a written instrument signed by the Bank and the
      Employee. Either party may, subject to the limitations of Article VII, assign
      its interests and obligations under this Agreement, provided, however, that
      any
      assignment will be subject to the terms of this Agreement. 

    

    ARTICLE
      XV - POSSESSION OF POLICY

    

    The
      Bank
      will keep possession of the Policy. The Bank agrees from time to time to make
      the Policy available to the Employee or to The New England for the purpose
      of
      endorsing or filing any change of beneficiary on the Policy for that portion
      of
      the death proceeds in excess of the Bank's Interest in the Policy as provided
      in
      Article VII, but the Policy will promptly be returned to the Bank. 

    

    ARTICLE
      XVI - GOVERNING LAW

    

    This
      Agreement sets forth the entire agreement of the parties hereto, and any and
      all
      prior agreements, to the extent inconsistent herewith, are hereby superseded.
      

    

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

    

    

    This
      Agreement will be governed by the laws of the State of New York. 

    

    ARTICLE
      XVII - INTERPRETATION

    

    Where
      appropriate in this Agreement, words used in the singular will include the
      plural and words used in the masculine will include the feminine. 

    

    IN
      WITNESS WHEREOF, the parties have hereunto set their hands and seals, the Bank
      by its duly authorized officer, on the day and year first written above.

    

    

    EMPLOYEE
      

    

    /s/Daryl
      R. Forsythe (L.S.) 

    Daryl
      R.
      Forsythe 

    

    NBT
      Bancorp Inc. 

    

    /s/Everett
      A. Gilmour (L.S.)

    By

    Its
      Chairman of Board 

    

    NBT
      Bank,
      National Association 

    

    /s/Paul
      O. Stillman (L.S.)

    By
      

    Its
      Compensation Committee Chairman 

     

     -6-

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