Document:

Exhibit 10.7

    
      

    

    Exhibit
      10.7

    

    

    NBT
      BANCORP INC. AND SUBSIDIARIES

    

    

    2007
      EXECUTIVE INCENTIVE COMPENSATION PLAN

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NBT
      BANCORP INC. AND SUBSIDIARIES

    2007
      EXECUTIVE INCENTIVE COMPENSATION PLAN

    

    Table
      of
      Contents

    

    

    
      	 	
              Page

            
	 	 
	
              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

            	
              5

            
	
              Section
                VIII - Amendment, Modification, Suspension or Termination

            	
              5

            
	
              Section
                IX - Effective Date

            	
              5

            
	
              Section
                X - Employer Relations with Participants

            	
              6

            
	
              Section
                XI - Governing Law

            	
              6

            
	 	
               

            
	
              Incentive
                Plan Participants and Distribution of Awards

            	
              Appendix
                A

            

    

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    NBT
      BANCORP INC. AND SUBSIDIARIES

     

     

    Introduction

     

    

    It
      is
      important to examine the benefits that accrue to the organization through the
      operation of the Executive Incentive Compensation Plan (EICP). The Plan impacts
      directly on the success of the organization 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
      encouraging the participant 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-

        
          

        

      

      
        
        

      

    

     

    Highlights
      of the 2007 Executive Incentive Compensation Plan (EICP) are listed
      below:

    

    
      	1.	
              The
                Plan is competitive 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.	
              All
                active Executives are eligible for
                participation.

            

    

    

    

    
      	
              4.

            	
              The
                financial criteria necessary for Plan operation consist of achieving
                certain levels of Earnings Per Share (EPS) for the Company and its
                Subsidiaries as applicable. Certain non-recurring events inclusive
                of
                changes to tax law or accounting rules may be excluded from the financials
                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 and will be based on the matrix in Appendix
                A.

            

    

    

    

    
      	
              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 are awarded by virtue of performance
                related to pre-established goals and the individual component is
                awarded
                by virtue of individual performance related to individual goals.
                No bonus
                will be paid unless the Corporation attains its pre-established goals,
                and
                Division Heads achieve their respective
                budgets.

            

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    NBT
      BANCORP INC. AND SUBSIDIARIES

    

    The
      Board
      of Directors has established this 2007 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 competition in our market areas.
      Through payment of incentive compensation beyond base salaries, the Plan
      provides reward for meeting and exceeding 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
      Executive benefit programs, or other compensation not designated as
      salary.

    

    Board
      of Directors:
      The
      Board of Directors of NBT Bancorp Inc.

    

    CEO:
      The CEO
      of NBT Bancorp Inc.

    

    Corporate
      Goals:
      Those
      pre-established objectives and goals of NBT Bancorp Inc. which are required
      to
      activate distribution of awards under the Plan.

    

    Divisional/Subsidiary
      Goals:
      Those
      pre-established objectives and goals which apply to each of the Banking
      Divisions of NBT Bancorp Inc. and which may activate distribution of awards
      under the Plan.

    

    Individual
      Goals:
      Key
      objectives mutually agreed upon between participants and
      management.

    

    Compensation
      Committee:
      The
      Compensation and Benefits Committee of the NBT Bancorp Inc. Board of
      Directors.

    

    Plan
      Participant:
      An
      eligible Executive as designated by the CEO and approved by the Compensation
      Committee for participation for the Plan Year.

    

    Plan
      Year:
      The 2007
      calendar year.

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    SECTION
      II - ELIGIBILITY
      TO PARTICIPATE

    

    To
      be
      eligible for an award under the Plan, a Plan participant must be an Executive
      in
      full-time service at the start and close of the calendar year and at the time
      of
      the award unless mutually agreed upon prior to the Executive leaving the
      company. Newly hired employees may be designated by the CEO and approved by
      the
      Compensation Committee as eligible for an award as determined by their date
      of
      hire or any relevant 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 company prior to the payment
      of the award, he/she is not eligible to receive an award unless mutually agreed
      upon prior to the Executive leaving the company. 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.

    

    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 Earnings
      Per Share (EPS) levels as applicable. Non-recurring events including changes
      in
      tax laws and accounting rules may be excluded from the financial results at
      the
      discretion of the CEO and upon approval of the Compensation Committee. The
      Corporation must achieve a minimum EPS set forth in Appendix A and Division
      Heads must achieve their respective budgets 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
      A.
      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
      outside the formula to a bonus award (increase or decrease) to an individual
      participant by a specified percentage based on assessment of special individual
      performance outside the individual goals or based on special circumstances
      that
      may have occurred during the plan year. The Compensation Committee may amend
      the
      CEO's bonus award. No award will be granted to an Executive whose performance
      is
      unacceptable.

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    SECTION
      VI - DISTRIBUTION
      OF AWARDS

     

    Distribution
      of the EICP will be made during the first quarter of the year following the
      plan. Distribution of the award must be approved by the Compensation
      Committee.

    

    In
      the
      event of death, any approved award earned under the provisions of this plan
      will
      become payable to the designated beneficiary of the participant as recorded
      under the Company’s group life insurance program; or in the absence of a valid
      designation, to the participant's estate.

    

    SECTION
      VII - PLAN
      ADMINISTRATION

     

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

     

    Any
      decision made or action taken by NBT Bancorp Inc., 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 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
      Bancorp Inc. 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, 2007.

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    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-Exhibit 10.27

    
      

    

    Exhibit
      10.27

    

    Description
      of Arrangement for Directors Fees

    

    Except
      as
      set forth below, the following sets forth the amount of fees payable to outside
      directors of NBT Bancorp for their services as Directors in fiscal year
      2007:

    

    
      	
              Event

            	 	
              Fee

            
	
               

            	 	
               

            
	
              Annual
                retainer

            	 	
              Cash
                (Member) - $5,000

              Restricted
                Stock (Member) - $10,000

              Restricted
                Stock (Chairman) - $50,000

              Deferred
                common stock (Member) - 400 shares

              Deferred
                common stock (Chairman) - 600 shares

            
	
               

            	 	
               

            
	
              Board
                meeting attended

            	 	
              Cash
                (Member) - $900 per meeting

              Cash
                (Chairman) - $1,000 per meeting

            
	
               

            	 	
               

            
	
              Telephonic
                board meeting

            	 	
              Cash
                (Member) - $900 per meeting

              Cash
                (Chairman) - $1,000 per meeting

            
	
               

            	 	
               

            
	
              Committee
                meeting attended

            	 	
              Cash
                (Member) - $600 per meeting

              Cash
                (Chairman) - $900 per meeting

            
	
               

            	 	
               

            
	
              Telephonic
                committee meeting

            	 	
              Cash
                (Member) - $600 per meeting

              Cash
                (Chairman) - $900 per meeting

            
	
               

            	 	
               

            
	
              Common
                stock options

            	 	
              Member
                - 1,000 shares multiplied by the number of board meetings attended
                in the
                prior year and divided by the number of meetings held in the prior
                year.

               

              Chairman
                - 5,000 shares multiplied by the number of board meetings attended
                in the
                prior year and divided by the number of meetings held in the prior
                year.

            
	
               

            	 	
               

            
	
              Special
                meeting held with committee member representative at the request
                of
                management for the purpose of discussing board related
                matters.

            	 	
              $900
                per meeting

            

    

    

    

    The
      Chairman of the Board receives $1,000 for each board and committee meeting
      attended except for Compensation & Benefits Committee, Risk Management
      Committee and the Nominating, Organization & Board Affairs Committee for
      which the Chairman currently fails to meet “Director Independence” requirements
      identified under applicable sections of NASDAQ Corporate Governance
      Rules.

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