SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. _____ )
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
CHECK THE APPROPRIATE BOX:
[ ] PRELIMINARY PROXY STATEMENT
[X] DEFINITIVE PROXY STATEMENT
[ ] DEFINITIVE ADDITIONAL MATERIALS
[ ] SOLICITING MATERIAL PURSUANT TO RULE 14A-11(C) OR RULE 14A-12
NBT Bancorp Inc.
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Michael J. Chewens
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(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] NO FEE REQUIRED
[ ] FEE COMPUTED ON TABLE BELOW PER EXCHANGE ACT RULES 14A-6(I)(1)
AND 0-11.
(1) TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES:
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(2) AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION APPLIES:
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(3) PER UNIT PRICE OR OTHER UNDERLYING VALUE OF TRANSACTION COMPUTED
PURSUANT TO EXCHANGE ACT RULE 0-11 (SET FORTH THE AMOUNT ON WHICH THE FILING FEE
IS CALCULATED AND STATE HOW IT WAS DETERMINED):
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(4) PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION:
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(5) TOTAL FEE PAID:
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[ ] FEE PAID PREVIOUSLY WITH PRELIMINARY MATERIALS
[ ] CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY EXCHANGE
ACT RULE 0-11(A)(2) AND IDENTIFY THE FILING FOR WHICH THE OFFSETTING FEE WAS
PAID PREVIOUSLY. IDENTIFY THE PREVIOUS FILING BY REGISTRATION STATEMENT NUMBER,
OR THE FORM OR SCHEDULE AND THE DATE OF FILING.
(1) AMOUNT PREVIOUSLY PAID:
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(2) FORM, SCHEDULE OR REGISTRATION STATEMENT NO.:
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(3) FILING PARTY:
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(4) DATE FILED:
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NBT BANCORP INC.
52 SOUTH BROAD STREET
NORWICH, NEW YORK 13815
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NBT Bancorp Inc. ("NBT"), will hold an annual meeting of stockholders at the
Binghamton Regency at One Sarbro Square, Binghamton, NY 13901 on May 4, 2004 at
10:00 a.m. local time for the following purposes:
1. To fix the size of the Board of Directors at sixteen;
2. To elect five directors, each for a three year term; and
3. To transact such other business as may properly come before the NBT annual
meeting.
We have fixed the close of business on March 15, 2004 as the record date for
determining those stockholders of NBT entitled to vote at the NBT annual meeting
and any adjournments or postponements of the meeting. Only holders of record of
NBT common stock at the close of business on that date are entitled to notice of
and to vote at the NBT annual meeting.
By Order of the Board of Directors of NBT Bancorp Inc.
/s/ Daryl R. Forsythe
- -----------------------------------------------------
Daryl R. Forsythe
Chairman and Chief Executive Officer
Norwich, New York
March 31, 2004
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU
OWN. EVEN IF YOU PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY CARD PROMPTLY IN THE ENVELOPE PROVIDED OR VOTE VIA THE
TOLL-FREE TELEPHONE NUMBER OR VIA THE INTERNET ADDRESS LISTED ON THE PROXY CARD.
YOU MAY REVOKE ANY PROXY GIVEN IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE
VOTE AT THE ANNUAL MEETING.
NBT BANCORP INC.
52 SOUTH BROAD STREET
NORWICH, NEW YORK 13815
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 4, 2004
This proxy statement and accompanying proxy card are being sent to the
stockholders of NBT Bancorp Inc. ("NBT" or the "Company") in connection with the
solicitation of proxies on behalf of the Board of Directors to be used at the
annual meeting of stockholders. This proxy statement, together with the enclosed
proxy card, is being mailed to stockholders on or about March 31, 2004.
WHEN AND WHERE THE NBT ANNUAL MEETING WILL BE HELD
We will hold our annual meeting of stockholders at the Binghamton Regency at One
Sarbro Square, Binghamton, NY 13901 on May 4, 2004 at 10:00 a.m. local time.
WHAT WILL BE VOTED ON AT THE NBT ANNUAL MEETING
At our annual meeting, our stockholders will be asked to consider and vote upon
the following proposals:
- To fix the size of the Board of Directors at sixteen;
- To elect five directors, each for a three year term; and
- To transact such other business as may properly come before the NBT
annual meeting.
We may take action on the above matters at our annual meeting on May 4,
2004, or on any later date to which the annual meeting is postponed or
adjourned.
We are unaware of other matters to be voted on at our annual meeting. If
other matters do properly come before our annual meeting, including
consideration of a motion to adjourn the annual meeting to another time and/or
place for such purpose of soliciting additional proxies, we intend that the
persons named in this proxy will vote the shares represented by the proxies on
such matters as determined by a majority of the Company's Board.
STOCKHOLDERS ENTITLED TO VOTE
We have set March 15, 2004, as the record date to determine which of our
stockholders will be entitled to vote at our annual meeting. Only those
stockholders who held their shares of record as of the close of business on that
date will be entitled to receive notice of and to vote at our annual meeting. As
of March 15, 2004, there were 32,870,204 outstanding shares of our common stock.
Each of our stockholders on the record date is entitled to one vote per share.
VOTE REQUIRED TO APPROVE THE PROPOSAL
A plurality of the shares of our common stock represented at our annual meeting,
either in person or by proxy, and entitled to vote at our annual meeting will
elect directors. This means that the five nominees who receive the most votes
will be elected.
The affirmative vote of a majority of the shares of our common stock
represented at our annual meeting, either in person or by proxy, and entitled to
vote at our annual meeting is required to approve the proposal to fix the number
of directors at sixteen.
Our Board urges our stockholders to complete, date and sign the
accompanying proxy and return it promptly in the enclosed postage-paid envelope
or to vote by telephone or via the Internet. Broker non-votes will not be
counted as a vote cast or entitled to vote on any matter presented at the annual
meeting. Abstentions will be counted in determining the number of shares
represented and entitled to vote.
NUMBER OF SHARES THAT MUST BE REPRESENTED FOR A VOTE TO BE TAKEN
In order to have a quorum, a majority of the total voting power of our
outstanding shares of common stock entitled to vote at our annual meeting must
be represented at the annual meeting either in person or by proxy. Abstentions
and broker non-votes
2 PROXY STATEMENT: NBT BANCORP INC.
are counted as present for the purpose of determining the presence of a quorum
for the transaction of business.
VOTING YOUR SHARES
Our Board is soliciting proxies from our stockholders. This will give you an
opportunity to vote at our annual meeting. When you deliver a valid proxy, the
shares represented by that proxy will be voted by a named agent in accordance
with your instructions.
If you are a record holder and vote by proxy but make no specification on
your proxy card that you have otherwise properly executed, the named agent may
vote the shares represented by your proxy:
- FOR fixing the number of directors at sixteen; and
- FOR electing the five persons nominated by our Board as directors.
If your common stock is held by a broker, bank or other nominee (i.e., in
"street name"), you should receive instructions from that person or entity in
order to have your shares of common stock voted. If you hold your common stock
in your own name and not through a broker or other nominee, you may grant a
proxy by dating, signing and mailing your proxy card or by voting by telephone
or via the Internet. You may also cast your vote in person at the meeting.
MAIL. To grant your proxy by mail, please complete your proxy card and sign,
date and return it in the enclosed envelope. To be valid, a returned proxy card
must be signed and dated.
TELEPHONE. If you hold NBT common stock in your own name and not through a
broker or other nominee, you can vote your shares of NBT common stock by
telephone by dialing the toll-free telephone number 1-800-690-6903. Telephone
voting is available 24 hours a day until 11:59 p.m. local time on May 3, 2004.
Telephone voting procedures are designed to authenticate stockholders by using
the individual control numbers on your proxy card. If you vote by telephone, you
do not need to return your proxy card.
VIA THE INTERNET. If you hold NBT common stock in your own name and not through
a broker or other nominee, you can vote your shares of NBT common stock
electronically via the Internet at www.proxyvote.com. Internet voting is
available 24 hours a day until 11:59 p.m. local time on May 3, 2004. Internet
voting procedures are designed to authenticate stockholders by using the
individual control numbers on your proxy card. If you vote via the Internet, you
do not need to return your proxy card.
IN PERSON. If you attend the annual meeting in person, you may vote your shares
by completing a ballot at the meeting.
Attendance at the annual meeting will not by itself be sufficient to vote your
shares; you still must complete and submit a ballot at the annual meeting.
CHANGING YOUR VOTE
Any NBT stockholder of record giving a proxy may revoke the proxy at any time
before the vote at the annual meeting in one or more of the following ways:
- Delivering a written notice of revocation to the Chief Executive
Officer of NBT bearing a later date than the proxy;
- Submitting a later dated proxy by mail, telephone or via the Internet;
or
- Appearing in person and submitting a later dated proxy or voting at
the annual meeting. Attendance at the annual meeting will not by
itself constitute a revocation of a proxy; to revoke your proxy, you
must complete and submit a ballot at the annual meeting or submit a
later dated proxy.
You should send any written notice of revocation or subsequent proxy to NBT
Bancorp Inc., 52 South Broad Street, Norwich, New York 13815, Attention: Chief
Executive Officer, or hand deliver the notice of revocation or subsequent proxy
to the Chief Executive Officer at or before the taking of the vote at the annual
meeting. You may also revoke your proxy by telephone or via the Internet by
giving a new proxy over the telephone or the Internet prior to 11:59 p.m. on May
3, 2004.
SOLICITATION OF PROXIES AND COSTS
We will bear our own costs of soliciting of proxies. We will reimburse brokerage
houses, fiduciaries, nominees and others for their out-of-pocket expenses in
forwarding proxy materials to owners of shares of our common stock held in their
names. In addition to the solicitation of proxies by use of the mail, we may
solicit proxies from our stockholders by directors, Officers and employees
acting on our behalf in person or by telephone, telegraph, facsimile or other
appropriate means of communications. We will not pay any additional
compensation, except for reimbursement of reasonable out-of-pocket expenses, to
our directors, Officers and employees in connection with the solicitation. You
may direct any questions or requests for assistance regarding this proxy
statement to Michael J. Chewens, Senior Executive Vice President of NBT, by
telephone at (607) 337-6520 or by e-mail at mjchewens@nbtbci.com.
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR VOTE IS IMPORTANT TO US.
PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN
THE ENCLOSED POSTAGE-PAID ENVELOPE OR VOTE BY TELEPHONE OR VIA THE INTERNET
USING THE TELEPHONE NUMBER OR THE INTERNET ADDRESS ON YOUR PROXY CARD.
3 PROXY STATEMENT: NBT BANCORP INC.
PROPOSAL 1
SIZE OF THE BOARD OF DIRECTORS
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Our Bylaws provide for a Board consisting of a number of directors, not less
than five nor more than twenty-five, as shall be designated by our stockholders
as of each annual meeting. Our Board is presently comprised of sixteen members.
The Board has proposed that the stockholders vote to fix the number of directors
constituting the full Board at sixteen members.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR FIXING
THE SIZE OF THE BOARD OF DIRECTORS AT SIXTEEN MEMBERS.
PROPOSAL 2
ELECTION OF DIRECTORS
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At the annual meeting, five directors will be elected to serve a three-year term
and until the director's successor is elected and qualified or until the
director's earlier death, resignation or removal. The Board currently consists
of sixteen members and is divided into three classes. The term of only one class
of directors expires in each year, and their successors are elected for terms of
up to three years and until their successors are elected and qualified. Messrs.
Forsythe, Gumble, Owens, Robinson, and Ms. Civil, whose terms expire at the 2004
annual meeting, have been nominated to stand for re-election at the 2004 annual
meeting for terms expiring in 2007. As of February 23, 2004, Mr. Gene Goldenziel
resigned from the Board of Directors of the Company to commit more time to his
law practice.
The persons named in the enclosed proxy intend to vote the shares of our
common stock represented by each proxy properly executed and returned to us FOR
election of the following nominees as directors, but if the nominees should be
unable to serve, they will vote such proxies for those substitute nominees as
our Board shall designate to replace those nominees who are unable to serve. Our
Board currently believes that each nominee will stand for election and will
serve if elected as a director. Assuming the presence of a quorum at the annual
meeting, directors will be elected by a plurality of the votes cast by the
shares of common stock entitled to vote at the annual meeting and present in
person or represented by proxy. There are no cumulative voting rights in the
election of directors. This means that the five nominees who receive the most
votes will be elected. The names of the nominees for election for the term as
shown, our continuing directors and certain information as to each of them are
as follows:
NUMBER OF
COMMON SHARES
PRINCIPAL OCCUPATION BENEFICIALLY PERCENT
DURING PAST FIVE YEARS AND DIRECTOR OWNED OF SHARES
NAME AGE OTHER DIRECTORSHIPS SINCE ON 12/31/03 OUTSTANDING
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NOMINEES WITH TERMS EXPIRING IN 2007:
Daryl R. Forsythe 60 Chairman and CEO of NBT since 1992 67,225(1) *
January 2004; Chairman of NBT Bank 1,511(1)(a) *
since January 2004; Chairman, President 10,930(1)(b) *
and CEO of NBT from April 2001 to 8,718(2) *
December 2003; Chairman and CEO 228,171(4) *
of NBT Bank from September 1999 to
December 2003; President and CEO
of NBT and NBT Bank from January
1995 to April 2001/September 1999
Directorships:
Security Mutual Life Ins. Co. of NY
New York Bankers Association
NBT Bank since 1988
William C. Gumble 66 Retired attorney-at-law; County 2000 99,393(1) *
Solicitor and District Attorney of Pike 2,700(3) *
County, PA
Directorships:
Pennstar Bank since 1985
4 PROXY STATEMENT: NBT BANCORP INC.
William L. Owens 54 Partner, Harris Beach LLP, attorneys 1999 4,806(1) *
Directorships: 2,676(3) *
Champlain Enterprises, Inc.
Prim Hall Enterprises
Mediquest, Inc.
Community Providers, Inc.
Adirondack Digital Imaging Systems Inc.
NBT Bank since 1995
Van Ness D. Robinson 68 Chairman/Secretary-New York 2001 2,472(1) *
Central Mutual Fire Insurance Co. (NYCM) 888,471(d) 2.71%
Directorships: 1,500(3) *
NYCM
Basset Healthcare
Bruce Hall Corporation
Central National Bank since 1997
Patricia T. Civil 54 Retired Managing Partner, Pricewaterhouse 2003 1,196(1) *
Coopers LLP
Directorships:
Rosamond Gifford Charitable Foundation
Visiting Nurses Association of Central
New York
NBT Bank since 2003
CONTINUING DIRECTORS WITH TERMS EXPIRING IN 2006:
Andrew S. Kowalczyk, Jr. 68 Partner, Kowalczyk, Tolles & Deery, LLP, 1994 6,858(1) *
attorneys 3,150(3) *
Directorships:
Trenton Technology Inc.
NBT Bank since 1994
John C. Mitchell 53 President and CEO of I.L. Richer Co. 1994 19,326(1) *
(agri. business) 5,097(2) *
Directorships: 3,064(3) *
Preferred Mutual Ins. Co. 164,041(c) *
New York Agricultural Development Corp.
NBT Bank since 1993
Joseph G. Nasser 46 Accountant, Nasser & Co. 2000 35,946(1) *
Directorships: 11,449(2) *
Pennstar Bank since 1999 2,676(3) *
Michael H. Hutcherson 41 President, The Colonial Agency LLC 2002 1,243(1) *
(insurance services) 2,532(1)(a) *
Directorships: 801(2) *
Central National Bank since 2002 400(3) *
Michael M. Murphy 42 President & Owner, Red Line Towing Inc. 2002 3,108(1) *
Directorships: 1,095(1)(a) *
Pennstar Bank since 1999 38,601(2) *
1,300(3) *
CONTINUING DIRECTORS WITH TERMS EXPIRING IN 2005:
Richard Chojnowski 61 Electrical contractor (sole proprietorship) 2000 1,999(1) *
Directorships: 264,353(2) *
Pennstar Bank since 1994 2,700(3) *
Dr. Peter B. Gregory 68 Partner, Gatehouse Antiques 1987 109,256(1) *
Directorships: 43,856(1)(a) *
NBT Bank since 1978 2,700(3) *
5 PROXY STATEMENT: NBT BANCORP INC.
Paul O. Stillman 70 Chairman of Preferred Mutual Ins. Co. (c) 1986 27,359(1) *
Directorships: 11,500(1)(a) *
Preferred Mutual Ins. Co. 1,543(2) *
Leatherstocking Cooperative Ins. Co. 2,700(3) *
NBT Bank since 1977 164,041(c) *
Joseph A. Santangelo 51 Administrator-Arkell Hall Foundation Inc. 2001 3,863(1) *
Directorships: 6,553(2) *
Central National Bank since 1991 1,650(3) *
Janet H. Ingraham 66 Professional Volunteer 2002 9,402(1) *
Directorships: 521(1)(a) *
Chase Memorial Nursing Home Corp. 792(3) *
NBT Bank since 1996
Paul D. Horger 66 Partner, Oliver, Price & Rhodes, attorneys 2002 11,775(1) *
Directorships: 1,300(3) *
Pennstar Bank since 1997
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6 PROXY STATEMENT: NBT BANCORP INC.
EXECUTIVE OFFICERS OF NBT BANCORP INC. OTHER THAN DIRECTORS WHO ARE OFFICERS:
NUMBER OF
COMMON SHARES
BENEFICIALLY PERCENT
PRESENT POSITION AND OWNED OF SHARES
NAME AGE PRINCIPAL POSITION DURING PAST FIVE YEARS ON 12/31/03 OUTSTANDING
- -------------------------------------- ----------- ------------------------------------------- -------------- -----------
Michael J. Chewens 42 Senior Executive Vice President, Chief 565(1) *
Financial Officer of NBT and 5,970(1)(b) *
NBT Bank since January 84,091(4) *
2002; EVP of same 1999-2001;
Secretary of NBT and NBT Bank
since December 2000;
Senior Vice President Risk Management,
1995-1999
Martin A. Dietrich 48 President of NBT since January 2004; 8,332(1) *
President and CEO of NBT Bank since 848(1)(a) *
January 2004; President and Chief Operating 18,650(1)(b) *
Officer of NBT Bank from September 1999 8,943(2) *
to December 2003; Executive Vice President 145,451(4) *
of Retail Banking 1998-1999 7,000(e) *
David E. Raven 41 President and Chief Operating Officer 8,359(1) *
of Pennstar Bank Division since August 4,771(1)(b) *
2000; Senior Vice President of Sales and 63,412(4) *
Administration, September 1999-
August 2000; Retail Sales Manager
1996-1999
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As of December 31, 2003, all Directors and Executive Officers listed above as a group beneficially owned 2,480,670 or 7.57%
of total shares outstanding, including shares owned by spouses, certain relatives and trusts, as to which beneficial
ownership may be disclaimed, and options exercisable within sixty days. Based on currently available Schedules 13D and 13G
filed with the SEC, we do not know of any person who is the beneficial owner of more than 5% of our common stock.
NOTES:
(a) The information under this caption regarding ownership of securities is
based upon statements by the individual nominees, directors, and officers
and includes shares held in the names of spouses, certain relatives and
trusts as to which beneficial ownership may be disclaimed. These
indirectly held shares total 61,863 for the spouses, minor children and
trusts.
(b) In the case of officers and officers who are directors, shares of our stock
held in NBT Bancorp Inc. 401(k) and Employee Stock Ownership Plan as of
December 31, 2003 totaling 40,321 are included.
(c) Preferred Mutual Insurance Company, of which Paul O. Stillman is Chairman
and Director, and John C. Mitchell is a Director, owns 164,041 shares; Mr.
Mitchell disclaims any beneficial ownership of these shares. Mr. Stillman
disclaims any beneficial ownership of these shares, except to the extent of
his pecuniary interest therein.
(d) New York Central Mutual Fire Insurance Company, of which Van Ness D.
Robinson serves as Chairman/Secretary, owns 888,471 shares. Mr. Robinson
disclaims any beneficial ownership of these shares, except to the extent of
his pecuniary interest therein.
(e) Martin A. Dietrich has power of attorney for his mother, who owns 7,000
shares. Mr. Dietrich disclaims any beneficial ownership of these shares.
(1) Sole voting and investment authority.
(2) Shared voting and investment authority.
(3) Shares under option from the NBT 2001 Non-Employee Director, Divisional
Director and Subsidiary Director Stock Option Plan, which are exercisable
within sixty days of December 31, 2003.
(4) Shares under option from the NBT 1993 Stock Option Plan, which are
exercisable within sixty days of December 31, 2003.
(*) Less than 1%
The Board of Directors unanimously recommends that stockholders vote FOR the
election of all of its director nominees.
7 PROXY STATEMENT: NBT BANCORP INC.
DIRECTOR INDEPENDENCE
Based on a review of the responses of the Directors to questions regarding
employment and compensation history, affiliations and family and other
relationships and on individual discussions with Directors, the full Board has
determined that all Directors, excluding Mr. Forsythe, meet the standards of
independence set forth by the Securities and Exchange Commission ("SEC") and the
Nasdaq Stock Market. Directors on our Risk Management (audit) Committee meet the
expanded independence requirements of audit committee members.
The independent members of the Board meet on a quarterly basis in an
executive session where non-independent Directors and Management are excused.
John Mitchell, who serves as chairman of the Nominating and Corporate Governance
Committee, currently chairs these executive sessions.
CODE OF ETHICS
The Company has adopted a Code of Business Conduct and Ethics that applies to
all employees, as well as each member of the Company's Board of Directors. The
Code of Business Conduct and Ethics is available at the Company's website at
www.nbtbancorp.com/corporategov.html.
BOARD POLICY REGARDING COMMUNICATIONS WITH THE BOARD
The Board of Directors maintains a process for stockholders to communicate with
the Board of Directors. Stockholders wishing to communicate with the Board of
Directors should send any communication to Corporate Secretary, NBT Bancorp
Inc., 52 South Broad Street, Norwich, New York 13815. Any such communication
must state the name of and the number of shares beneficially owned by the
stockholder making the communication. The Corporate Secretary will forward such
communication to the full Board of Directors or to any individual director or
directors to whom the communication is directed unless the communication is
unduly hostile, threatening, illegal or similarly inappropriate. At each board
meeting, a member of management presents a summary of all communications
received since the last meeting that were not forwarded and makes those
communications available on request.
DIRECTOR ATTENDANCE AT BOARD MEETINGS AND ANNUAL MEETINGS
During fiscal 2003, NBT held five meetings of its Board. Each incumbent Director
attended at least 75% of the aggregate of (i) the total number of meetings of
the Board held during the period that the individual served and (ii) the total
number of meetings held by all committees of the Board on which the director
served during the period that the individual served. In addition, Directors are
expected to attend our Annual Shareholder Meetings. All Directors, with the
exception of Director Michael Hutcherson, were in attendance at the 2003 Annual
Meeting and we expect that all directors will be present at the 2004 Annual
Meeting.
COMMITTEES OF THE BOARD
NBT has a number of standing committees, including a Nominating and Corporate
Governance Committee, Risk Management Committee and Compensation and Benefits
Committee. The Board has determined that all of the Directors who serve on these
Committees are independent for purposes of Nasdaq Rule 4200 and that the members
of the Risk Management Committee are also independent for purposes of section
10A(m)(3) of the Securities Exchange Act of 1934. A description of each of these
committees follows:
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE:
Chairman: John C. Mitchell
Members: Richard Chojnowski
Gene E. Goldenziel
Dr. Peter B. Gregory
Paul D. Horger
Michael H. Hutcherson
Janet H. Ingraham
Van Ness D. Robinson
The Nominating and Corporate Governance Committee is responsible for
determining the qualification of and nominating persons for election to the
Board of Directors, including (if applicable) shareholder nominations that
comply with the notice procedures set forth by SEC Regulation and the Company's
Bylaws. The Committee also formulates our corporate governance guidelines and
functions to insure a successful evolution of management at the senior level.
The Board of Directors has adopted a written charter for the Nominating and
Corporate Governance Committee, a copy of which is available on the NBT Bancorp
website at www.nbtbancorp.com/corporategov.html. This Committee met three times
in 2003.
The Board of Directors believes that it should be comprised of Directors
who possess the highest personal and professional ethics, integrity, and values,
and who shall have demonstrated exceptional ability and judgment and who shall
be most effective in representing the long-term interests of the shareholders.
When considering candidates for the Board of Directors, the Nominating and
Corporate Governance Committee takes into account the candidate's
qualifications, experience and independence from management. In addition, in
accordance with the Company's Bylaws:
8 PROXY STATEMENT: NBT BANCORP INC.
- Every director must be a citizen of the United States and have resided
in the State of New York, or within two hundred miles of the principal
office of the company, for at least one-year immediately preceding the
election;
- Each director must own $1,000 aggregate book value of the Company's
common stock; and
- No person shall be eligible for election or re-election as a director
if they shall have attained the age of 70 years.
When seeking candidates for Director, the Nominating and Corporate
Governance Committee may solicit suggestions from incumbent Directors,
Management or others. The Committee also has the authority to retain any search
firm to assist in the identification of Director candidates. The Committee will
review the qualifications and experience of each candidate. If the Committee
believes a candidate would be a valuable addition to the Board, it will
recommend to the full Board that candidate's election.
The Company's Bylaws also permit shareholders eligible to vote at the
annual meeting to make nominations for directors, but only if such nominations
are made pursuant to timely notice in writing to the President of NBT. To be
timely, notice must be delivered to, or mailed to and received at, the principal
executive offices of NBT within 10 days following the day on which public
disclosure of the date of any annual meeting called for the election of
directors is first given. The Nominating and Corporate Governance Committee will
consider candidates for Director suggested by stockholders applying the criteria
for candidates described above and considering the additional information
required by Article III, Section 3 of the Company's Bylaws, which must be set
forth in a shareholder's notice of nomination. Article III, Section 3 of the
Company's Bylaws requires that the notice include: (a) as to each person whom
the shareholder proposes to nominate for election as a director (i) the name of
such person and (ii) the principal occupation or employment of such person; and
(b) as to the shareholder giving notice (i) the name and address of such
shareholder (ii) the number of shares of the Company that will be voted for the
proposed nominee by such shareholder (including shares to be voted by proxy) and
(iii) the number of shares of the Company which are beneficially owned by such
shareholder.
RISK MANAGEMENT COMMITTEE:
Chairman: Joseph G. Nasser
Members: Richard Chojnowski
Patricia T. Civil
William C. Gumble
Janet H. Ingraham
John C. Mitchell
Van Ness D. Robinson
Joseph A. Santangelo
Paul O. Stillman
The Risk Management Committee, our audit committee, represents our Board in
fulfilling its statutory and fiduciary responsibilities for independent audits
of NBT including monitoring accounting and financial reporting practices and
financial information distributed to stockholders and the general public. This
Committee met four times in 2003. Responsibilities and duties of this Committee
are discussed more fully in the section titled Risk Management Committee Report
and in the Committee's charter, which is included as Appendix A.
COMPENSATION AND BENEFITS COMMITTEE:
Chairman: Andrew S. Kowalczyk, Jr.
Members: Patricia T. Civil
William C. Gumble
Michael M. Murphy
Joseph G. Nasser
William L. Owens
Joseph A. Santangelo
Paul O. Stillman
This Committee has the responsibility of reviewing the salaries and other
forms of compensation of the key executive personnel of NBT and our
subsidiaries. The Committee administers our pension plan, 401(k) and employee
stock ownership plan, the directors' and officers' stock option plans, as well
as the restricted, deferred and performance share stock plans. This Committee
met two times in 2003.
SECTION 16(a) BENECIAL OWNERSHIP REPORTING COMPLIANCE
Our Directors and Executive Officers must, under Section 16(a) of the Securities
Exchange Act of 1934, file certain reports of their initial ownership of our
common stock and of changes in beneficial ownership of our securities. Based on
a review of reports submitted to NBT, the Company believes that during the
fiscal year ended December 31, 2003 all Section 16(a) ling requirements
applicable to NBT's Directors and Executive Officers were complied with on a
timely basis, except for two Form 4's for Mr. Gumble, covering one transaction
each, and one Form 4 for Mr. Mitchell, covering one transaction.
COMPENSATION OF DIRECTORS AND OFFICERS
BOARD OF DIRECTORS' FEES. Members of our Board receive an annual retainer in the
amount of $9,000, which shall be payable in the form of restricted stock,
pursuant to the Non-Employee Directors' Restricted and Deferred Stock Plan (the
"Directors' Plan" ). Under the Directors' Plan, restricted stock will vest over
a three-year period. In 2004 members of our Board also received an annualized
grant of 400 shares of deferred stock, pursuant to the Directors' Plan. Deferred
stock vests when an individual ceases to be a member of the Board. Directors
9 PROXY STATEMENT: NBT BANCORP INC.
receive $900 in cash for each Board meeting attended. Our Board members also
receive $600 in cash for each committee meeting attended ($900 additional
compensation for special meetings held or meetings held at the request of
Management). Chairmen of the committees receive $900 in cash for each committee
meeting attended. Our officers who are also directors do not receive any Board
fees. Under the NBT Non-Employee Director, Divisional Director and Subsidiary
Director Stock Option Plan, we annually grant each of our non-employee directors
an option to purchase shares of our common stock at the fair market value per
share on the date of the grant. The number of shares granted equals 1,000
multiplied by the number of NBT Bancorp Board meetings attended in the prior
year and divided by the number of NBT Bancorp Board meetings held in the prior
year. We also provided health insurance for one director of NBT under an
agreement honored from the Pioneer American Holding Company acquisition. In
2003, the premium for Mr. Gene E. Goldenziel's insurance coverage totaled
$5,209. This agreement ended July 31, 2003. We also provide an annual cash
payment of $207 to Dr. Peter B. Gregory in lieu of a life insurance premium that
was paid from an acquired financial institution.
SUMMARY COMPENSATION
- ----------------------------------------------------------------------------------------------------------------------
LONG TERM COMPENSATION
ANNUAL COMPENSATION ----------------------
----------------------------------- AWARDS
SECURITIES
OTHER ANNUAL UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (1) COMPENSATION (2) OPTIONS PAYOUTS COMPENSATION (3)
- ----------------------------------------------------------------------------------------------------------------------
Daryl R. Forsythe, 2003 $425,000 $ 255,000 36,375 $ 0 $ 130,788
Chairman and Chief 2002 375,000 225,000 52,300 0 113,990
Executive Officer of NBT 2001 350,000 140,625 54,500 0 87,810
Michael J. Chewens, 2003 $232,000 $ 129,920 19,875 $ 0 $ 54,460
Senior Executive Vice President, 2002 214,500 120,120 29,900 0 52,705
Chief Financial Officer 2001 206,000 49,871 25,600 0 40,870
and Secretary of NBT and
NBT Bank
Martin A. Dietrich, 2003 $281,000 $ 157,360 24,000 $ 0 $ 58,532
President of NBT, President 2002 260,000 145,600 36,200 0 57,033
and Chief Executive Officer 2001 253,365 91,650 43,246 0 42,500
of NBT Bank
David E. Raven, 2003 $216,000 $ 120,960 18,450 $ 0 $ 22,560
President and Chief 2002 200,000 112,000 27,900 0 20,930
Operating Officer of 2001 189,154 46,500 $ 54,586 22,400 0 13,600
Pennstar Bank Division
- ----------------------------------------------------------------------------------------------------------------------
NOTES:
(1) Represents bonuses under our Executive Incentive Compensation Plan earned
in the specified year and paid in January of the following year for 2002
and 2003. In 2001 a discretionary amount was paid in lieu of a bonus.
(2) Moving costs for Mr. Raven in 2001 totaling $54,586.
(3) NBT contributions to its defined benefit pension plan were $87,000 in 2003
and in 2002, and $73,950 in 2001 for Mr. Forsythe; $38,000 in 2003 and in
2002, and $32,300 in 2001 for Mr. Chewens; $44,000 in 2003 and in 2002, and
$37,400 in 2001 for Mr. Dietrich; and $10,000 in 2003 and in 2002, and
$8,500 in 2001 for Mr. Raven.
This column also reflects NBT contributions to NBT Bancorp Inc. 401(k) and
Employee Stock Ownership Plan ("401(k)/ESOP"), employer matching
contributions for Messrs. Forsythe, Chewens, Dietrich and Raven were $6,000
in 2003 and 2002, and $5,100 in 2001. Discretionary contributions to the
401(k)/ESOP were made in the amounts of $13,000 in 2003 and $10,312 in 2002
for Mr. Forsythe; $7,042 in 2003 and $5,287 in 2002 for Mr. Chewens; $8,532
in 2003 and $7,033 in 2002 for Mr. Dietrich; and $6,560 in 2003 and $4,930
in 2002 for Mr. Raven. A discretionary contribution was not made in 2001.
Also included in this column are costs to the Corporation for disability
plan agreements and split-dollar life insurance plans. For Mr. Forsythe,
these costs were $11,702 in 2003, $10,678 in 2002, and $8,760 in 2001. For
Mr. Chewens these costs were $3,418 in 2003 and in 2002, and $3,470 in
2001.
In addition, included in this column are the annual premiums paid to
provide Long Term Care Insurance for the benefit of Mr. Forsythe and his
spouse, which were $6,433 and $6,653 respectively in 2003.
10 PROXY STATEMENT: NBT BANCORP INC.
OPTION GRANTS INFORMATION
The following table presents information concerning grants of stock options made
during 2003 to each of the named Executive Officers. The potentially realizable
values are based solely on arbitrarily assumed rates of appreciation required by
applicable SEC regulations. Actual gains, if any, on option exercises and common
stockholdings are dependent on the future performance of our common stock. There
can be no assurance that the potential realizable values shown in this table
will be achieved. SEC regulations. Actual gains, if any, on option exercises and
common stockholdings are dependent on the future performance of our common
stock. There can be no assurance that the potential realizable values shown in
this table will be achieved.
Option Grants in Last Fiscal Year
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE AT ASSUMED
------------------------------------- ANNUAL RATES OF STOCK PRICE
# OF SECURITIES % OF TOTAL OPTIONS APPRECIATION FOR OPTION TERM(2)
UNDERLYING GRANTED TO EMPLOYEES EXERCISE -------------------------------
NAME OPTIONS GRANTED(1) IN FISCAL YEAR PRICE ($/SH) EXPIRATION DATE 5% 10%
- ---------------------------------------------------------------------------------------------------------------------------------
Daryl R. Forsythe 36,375(a) 9.8% $ 17.5380 January 2013 $ 401,200 $ 1,016,720
Daryl R. Forsythe 4,000(b) 1.1% 20.0558 August 2013 50,452 127,855
Daryl R. Forsythe 5,200(b) 1.4% 19.7917 August 2013 64,724 164,023
Daryl R. Forsythe 11,700(b) 3.2% 19.8125 August 2013 145,782 369,439
Daryl R. Forsythe 6,050(b) 1.6% 19.7925 August 2013 75,307 190,842
--------- ----- ---------------- --------------
Total 63,325 17.1% $ 737,464 $ 1,868,879
Michael J. Chewens 19,875(a) 5.4% $ 17.5380 January 2013 $ 219,212 $ 555,527
Martin A. Dietrich 24,000(a) 6.5% 17.5380 January 2013 264,709 670,825
David E. Raven 18,450(a) 5.0% 17.5380 January 2013 203,495 515,697
- ---------------------------------------------------------------------------------------------------------------------------------
NOTES:
(1) Nonqualified options have been granted at fair market value at the date of
grant.
(2) The potential realizable value of each grant of options, assuming that the
market price of the underlying security appreciates in value from the date
of grant to the end of the option term, at the specified annualized rates.
The assumed growth rates in price in our stock are not necessarily
indicative of actual performance that may be expected. The amounts exclude
any execution costs by the executive to exercise such options.
(a) Options vest 40% after one year from grant date; an additional 20% vest
each following year.
(b) "Reload" options (defined in the NBT 1993 Stock Option Plan) vest in full
two years after the date of grant.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
The following table presents information concerning the exercise of stock
options during 2003 by each of the named Executive Officers and the value at
December 31, 2003, of unexercised options that are exercisable within sixty days
of December 31, 2003. Unexercised In the Money Options values, unlike the
amounts set forth in the column headed "Value Realized," have not been, and may
never be, realized. All in formation has been adjusted for stock dividends and
splits. The underlying options have not been, and may never be, exercised; and
actual gains, if any, on exercise will depend on the value of our common stock
on the date of exercise. There can be no assurance that these values will be
realized.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN THE MONEY OPTIONS
OPTIONS AT FY END AT FY END(2)
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE VALUE REALIZED(1) UNEXERCISABLE UNEXERCISABLE
- -------------------------------------------------------------------------------------------------------
Daryl R. Forsythe 119,090 $ 1,095,214 228,171/80,596 $ 1,020,988/335,236
Michael J. Chewens 16,731 131,064 84,091/29,005 430,196/158,870
Martin A. Dietrich - - 145,451/36,662 805,676/200,713
David E. Raven - - 63,412/26,711 335,953/146,425
- -------------------------------------------------------------------------------------------------------
NOTES:
(1) Represents difference between the fair market value on the date of exercise
of the securities underlying the options and the exercise price of the
options.
(2) Represents difference between the fair market value of the securities
underlying the options and the exercise price of the options at December
31, 2003.
11 PROXY STATEMENT: NBT BANCORP INC.
PENSION PLAN
Our executives participate in the NBT Bancorp Inc. Defined Benefit Pension Plan.
This plan is a noncontributory, tax-qualified defined benefit pension plan.
Eligible employees are those who have attained age 21 and have completed one
year of service in which the employee worked at least 1,000 hours. The plan
provides for 100% vesting after five years of qualified service. Prior to the
amendment and restatement of the plan effective January 1, 2000, the plan had
received a determination from the Internal Revenue Service that the plan was
qualified under Section 401(a) of the Internal Revenue Code. The plan, as
amended and restated effective January 1, 2000, was submitted in 2001 to the
Internal Revenue Service for determination. The plan was converted to a defined
benefit plan with a cash balance feature, effective January 1, 2000. Prior to
that date, the plan was a traditional defined benefit pension plan.
Under a cash balance plan such as our plan, hypothetical account balances
are established for each participant and pension benefits are generally stated
as the lump sum amount in that hypothetical account. Notwithstanding the
preceding sentence, since a cash balance plan is a defined benefit plan, the
annual retirement benefit payable at normal retirement (age 65) is an annuity,
which is the actuarial equivalent of the participant's account balance under the
cash balance plan. However, participants may elect, with the consent of their
spouses if they are married, to have the benefits distributed as a lump sum
rather than an annuity. Benefits under the plan for 2003 are computed using a
cash balance methodology for people who converted (as described hereafter) that
provides for pay-based credits to the participants' hypothetical accounts equal
to 5 to 43.5 percent (depending on age and other factors) on the first $200,000
of annual eligible compensation. Eligible compensation under the plan is defined
as fixed basic annual salary or wages, commissions, overtime, cash bonuses, and
any amount contributed by us at the direction of the participant pursuant to a
salary reduction agreement and excludible from the participant's gross income
under the Internal Revenue Code, but excluding any other form of remuneration,
regardless of the manner calculated or paid, such as amounts realized from the
exercise of stock options, severance pay or our cost for any public or private
benefit plan, including this pension plan. In addition to the pay-based service
credits, monthly interest credits are made to the participant's account balance
based on the average annual yield on 30-year U.S. Treasury securities for the
November of the prior year. Each active participant in the pension plan as of
January 1, 2000 was given a one-time irrevocable election to continue
participating in the traditional defined benefit plan design or to begin
participating in the new cash balance plan design. All employees who became
participants after January 1, 2000 automatically participated in the cash
balance plan design. Each of our executives chose to participate in the cash
balance plan design.
The following table shows the estimated annual accrued benefits at December
31, 2003 payable as Life annuities with Five Years Certain upon retirement at
normal retirement age ("NRA") for each of the named executives.
EXECUTIVE ANNUITY BENEFIT AT NRA
- --------------------------------------------------------------------------------
Mr. Forsythe $ 45,403
Mr. Chewens $ 48,631
Mr. Dietrich $ 59,673
Mr. Raven $ 15,567
- --------------------------------------------------------------------------------
Pension benefits under the plan are not subject to reduction for social
security benefits or other offset amounts. Section 415 of the Internal Revenue
Code places certain limitations on pension benefits that may be paid from the
trusts of tax-qualified plans, such as the plan. Because of these limitations
and in order to provide certain executives with adequate retirement income, we
have entered into supplemental retirement agreements which provide retirement
benefits to the named executives in the manner discussed below. It should be
noted that where applicable the amounts payable under the supplemental
retirement agreements, as discussed in the following section, are offset by
payments made under our pension plan, the annuitized employer portion of our
401(k)/ESOP and social security.
SUPPLEMENTAL RETIREMENT AGREEMENTS AND PLAN
We have entered into an agreement with Mr. Forsythe to provide him with
supplemental retirement benefits, revised most recently on January 28, 2002 (the
"SERP"). The SERP provides that Mr. Forsythe's annual benefit at normal
retirement, including (a) the annual benefit payable to Mr. Forsythe under our
pension plan, (b) the annual benefit that could be provided by contributions by
us and NBT Bank (other than Mr. Forsythe's elective deferrals) to our
401(k)/ESOP and the earnings on those amounts if these contributions and
earnings were converted to a benefit payable under the agreement using the
actuarial assumptions provided under the agreement, (c) his social security
benefit, and (d) the SERP, will be equal to 75% of Mr. Forsythe's final average
compensation (i.e., average annual base salary, commissions, bonuses and
elective deferrals without regard to any Internal Revenue Code limitations on
compensation applicable to tax-qualified plans). Additionally, Mr. Forsythe and
his spouse will continue to receive medical benefits (including medical, dental
and vision care) until his death. Reduced amounts will be payable under the SERP
in the event Mr. Forsythe takes early retirement. If Mr. Forsythe becomes
disabled before he attains age 62, he will be treated for purposes of the SERP
as if he had continued to be employed by NBT Bank until he reached age 62, and
then retired. If Mr. Forsythe dies, his spouse will be entitled to an annual
benefit for life equal to 50% of the benefit payable to Mr. Forsythe and, if
such death occurs before he retires, as if he had retired and begun receiving
12 PROXY STATEMENT: NBT BANCORP INC.
his benefit before he died. Except in the case of early retirement, disability
or death, payment of benefits will commence upon the first day of the month
after Mr. Forsythe attains age 65. Assuming a retirement age of 65, satisfaction
of applicable SERP conditions, that he is currently 65, and that his 2003
compensation were his final average compensation as defined by the SERP, the
estimated aggregate annual retirement benefit under the SERP, our cash balance
pension plan, the annuitized employer portion of our 401(k)/ESOP and social
security to be paid to Mr. Forsythe would be $487,500. The SERP will at all
times be unfunded except that, in the event of a change in control, NBT will be
required to transfer to a grantor trust an amount sufficient to cover all
potential liabilities under the SERP.
We have also adopted a Supplemental Executive Retirement Plan in which
Messrs. Chewens and Dietrich participate. Messrs. Chewens and Dietrich's
agreements pursuant to the SERP provide each executive with an annual
supplemental benefit at normal retirement, including (a) the annual benefit
payable to the executive under our pension plan (b) the annual benefit that
could be provided by contributions by us and NBT Bank (other than the
executive's elective deferrals) to our 401(k)/ESOP and the earnings on those
amounts if these contributions and earnings were converted to a benefit payable
under the agreement using the actuarial assumptions provided under the agreement
(c) his social security benefit and (d) the SERP, will be equal to the greater
of (1) 50% of the executive's final average compensation (i.e., average annual
base salary, commissions, bonuses and elective deferrals without regard to any
Internal Revenue Code limitations on compensation applicable to tax qualified
plans) or (2) the sum of the annual amount of the executive's benefit under our
pension plan, calculated without giving effect to limitations and restrictions
imposed by the Internal Revenue Code plus the annual benefit that could be
provided by contributions by us and NBT Bank (other than the executive's
elective deferrals) to our 401(k)/ESOP and the earnings on those amounts,
calculated by disregarding the limitations and restrictions imposed by the
Internal Revenue Code and using the actuarial assumptions set out in our pension
plan. Reduced amounts will be payable under the SERP in the event Mr. Chewens or
Mr. Dietrich takes early retirement. If Mr. Chewens or Mr. Dietrich dies leaving
a surviving spouse, his spouse will be entitled to an annual benefit for life
equal to the annual survivor annuity benefit under our pension plan, calculated
without giving effect to limitations and restrictions imposed by the Internal
Revenue Code, reduced by the surviving spouse benefit actually payable under
such plan, plus a lump sum amount equal to contributions by us and NBT Bank
(other than the executive's elective deferrals) to our 401(k)/ESOP, calculated
by disregarding the limitations and restrictions imposed by the Internal Revenue
Code, reduced by the amounts actually contributed to our 401(k)/ESOP, plus the
earnings on such net amount. If the executive dies after attaining age 60 and
after he has retired, but before payment of benefits has commenced, the
surviving spouse will receive an annual benefit equal to the excess, if any, of
(1) the monthly amount the surviving spouse is entitled to under our pension
plan, calculated without giving effect to limitations and restrictions imposed
by the Internal Revenue Code, over (2) the monthly amount actually payable to
the surviving spouse under our pension plan plus the monthly amount that is the
actuarial equivalent of any supplemental retirement benefit payable to the
surviving spouse. Except in the case of early retirement or death, payment of
benefits will commence upon the first day of the month after Mr. Chewens or Mr.
Dietrich attains age 62. Assuming a retirement age of 62, satisfaction of
applicable SERP conditions, that he is currently 62, and that his 2003
compensation were his final average compensation as defined by the SERP, the
estimated aggregate annual retirement benefit under the SERP, our cash balance
pension plan, the annuitized employer portion of our 401(k)/ESOP and social
security to be paid to Messrs. Chewens and Dietrich would be $176,060 and
$213,300, respectively. The SERPs for both Mr. Chewens and Mr. Dietrich will at
all times be unfunded except that, in the event of a change in control, NBT will
be required to transfer to a grantor trust an amount sufficient to cover all
potential liabilities under the SERP.
EMPLOYMENT AGREEMENTS
We have entered into employment agreements with Messrs. Forsythe, Dietrich,
Chewens and Raven. Under Mr. Forsythe's agreement, he will serve as Chairman,
President and Chief Executive Officer of NBT until December 31, 2003 and as
Chairman and CEO until December 31, 2005, at which time he will retire as an
active employee. Commencing January 1, 2006 and continuing for as long as Mr.
Forsythe is a member of the Board of Directors, he agrees to serve as Chairman
of NBT. Under Mr. Dietrich's agreement, he will serve as the President and Chief
Operating Officer of NBT Bank until December 31, 2003, as President and Chief
Executive Officer of NBT Bank and as President of NBT from January 1, 2004 to
December 31, 2005, and then as President and Chief Executive Officer of NBT and
NBT Bank as of January 1, 2006. Further, Mr. Dietrich will continue to serve as
a director of NBT Bank and, as of January 1, 2005, will be appointed a director
of NBT. Mr. Chewens' agreement provides that he will serve as a Senior Executive
Vice President and Chief Financial Officer of our Company and NBT Bank. Mr.
Raven's agreement provides that he will serve as the President and Chief
Operating Officer of our Pennstar Bank division. The termination of these
agreements will occur upon the earlier of the executive's death, disability,
discharge, resignation, or a given date. For Mr. Dietrich, the agreement will
terminate no later than August 2, 2008. For Messrs. Chewens and Raven, this
termination date is January 1, 2007, with each agreement providing for automatic
13 PROXY STATEMENT: NBT BANCORP INC.
one-year extensions occurring annually each January 1. Mr. Forsythe's agreement
does not have a set termination date, but will terminate if he is no longer a
director of NBT. Mr. Forsythe's annual salary under his agreement was $425,000
in 2003 and will be $450,000 in 2004. Mr. Dietrich's salary was $281,000 in 2003
and may not be less than $310,000 during 2004. Mr. Chewens' salary in 2004 is
$251,500, and his agreement provides for minimum increases of 8 percent per
annum. Mr. Raven's annual salary in 2004 is $234,000 and his agreement also
provides for minimum increases of 8 percent per annum.
In addition to base salary, all four executives are eligible to be
considered for performance bonuses commensurate with his title and salary grade
in accordance with the compensation policies. The agreements also grant each
executive a right to stock options to be granted to him annually, pursuant to
the 1993 Stock Option Plan, as amended, or any appropriate successor plan,
computed using a formula approved by NBT that is commensurate with his title and
salary grade. Mr. Forsythe only has the right to receive stock options under
this plan until December 31, 2005. In addition, each executive is entitled to
participate in the Performance Share Plan commensurate with his title and salary
grade. Mr. Forsythe will be eligible to receive a payout from any Performance
Share Plan in effect as of December 31, 2005 as if he were employed for the
duration of any current plans. Under each agreement, the executive is also
entitled to paid vacation time and sick leave commensurate with his title and
salary grade, in accordance with the Company's policy. Mr. Forsythe is entitled
to no less than five weeks of paid vacation and Messrs. Dietrich, Chewens and
Raven are each entitled to four weeks of paid vacation. Each executive will also
receive other benefits including use of an automobile, country club privileges,
and participation in our various employee benefits plans such as the pension
plan, the 401(k)/ESOP, and various health, disability, and life insurance plans.
Upon termination of his respective agreement, Messrs. Forsythe, Dietrich,
Chewens and Raven are each entitled to receive his accrued and unpaid salary,
his accrued rights under our employee plans and arrangements, unpaid expense
reimbursements, and the cash equivalent of his accrued annual vacation and sick
leave. If the executive's employment is terminated by us other than for "cause"
(as defined in the agreements), or by the executive for "good reason" (as
defined in the agreements) or, in the case of Mr. Forsythe only, as a result of
the executive's inability to perform his duties as a result of a physical or
mental disability for a period of at least 180 days, the executive will continue
to receive their base salary in a manner consistent with our normal payroll
practices for a certain period. Mr. Forsythe would continue to receive such
payments until the later of August 2, 2006 or one year after termination of
employment. For Mr. Dietrich, these payments would be made until August 2, 2006.
For Messrs. Chewens and Raven, the payments would continue until the later of
January 1, 2007, the date to which the term of employment under the agreement
was automatically extended (see above), or two years after termination of
employment. Messrs. Dietrich, Chewens and Raven will also receive a relocation
payment if the executive relocates within 18 months after termination of
employment from the Norwich, Binghamton or Scranton area, respectively. Each
executive has also agreed that for one year after the termination of his
agreement, he will not directly or indirectly compete with the Company or NBT
Bank. If any of the executives are terminated due to a change of control covered
by his change in control agreement (discussed later), his severance payments
will be determined under that agreement.
CHANGE IN CONTROL AGREEMENTS
We have entered into a change in control agreement with each of Messrs.
Forsythe, Chewens, Dietrich and Raven most recently on July 23, 2001. The
agreements for Messrs. Forsythe, Chewens, Dietrich and Raven provide in general
that, in the event there is a change in control of us or NBT Bank and further,
if within 24 months from the date of such change in control, Mr. Forsythe's,
Chewens', Dietrich's or Raven's respective employment with us or NBT Bank is
terminated without cause (as defined in the agreement) or by the executive with
good reason (as defined in the agreement), or if within 12 months of such change
in control, the executive resigns, irrespective of the existence of good reason,
Messrs. Forsythe, Chewens, Dietrich or Raven will be entitled to receive 2.99
times the greater of (1) the sum of his annualized salary for the calendar year
in which the change in control occurs, the maximum target bonus that could have
been paid to him for such year if all applicable targets and objectives had been
achieved, or if no formal bonus program is in effect, the largest bonus amount
paid to him during any of the three preceding calendar years, his income from
the exercise of nonqualified stock options during such year and other annualized
amounts that constitute taxable income for such year, without consideration for
salary reduction amounts that are excludible from taxable income or (2) his
average annual compensation includible in his gross income for federal income
tax purposes for the three years immediately preceding the year in which the
change in control occurs, including base salary, bonus and ordinary income
recognized with respect to stock options and other annualized amounts that
constitute taxable income for such year, without reduction for salary reduction
amounts that are excludible from taxable income. The executive will also receive
a gross-up payment to compensate for the imposition of any excise taxes under
section 4999 of the Internal Revenue Code. Moreover, if the executive's
employment with us or NBT Bank is terminated without cause or by the executive
with good reason within 24 months of such change in control, or if the executive
resigns within 12 months of such change in control irrespective of the existence
of good reason, the executive and his spouse and family, if applicable, will
14 PROXY STATEMENT: NBT BANCORP INC.
continue to receive the continued benefit for three years after the executive's
date of termination, or such longer period as is provided in the appropriate
plan, of all non-cash employee benefit plans, programs, or arrangements
(including 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 the executive was entitled
to participate immediately prior to the executive's date of termination, as in
effect at the date of termination, so long as such continued participation is
allowed under the applicable plans, programs, and arrangements. However, if the
executive becomes eligible to participate in a benefit plan, program, or
arrangement of another employer which confers substantially similar benefits
upon the executive, the executive will cease to receive the benefits in respect
to our plan, program, or arrangement. In the event that the executive's
participation in any such plan, program, or arrangement is barred, we or NBT
Bank will arrange to provide the executive with benefits substantially similar
to those which the executive is entitled to receive under such plans, programs
and arrangements or alternatively, pay an amount equal to the reasonable value
of substantially similar benefits. In addition, each executive's benefit under
any SERP shall be fully vested and his benefit thereunder will be determined as
if his employment had continued for three additional years (or such lesser
period after which the maximum benefit is attained), at an annual compensation
equal to the amount determined for purposes of calculating his severance amount.
Moreover, under certain circumstances we or NBT Bank or the acquiring entity
will provide the executive with health coverage for the maximum period after
termination of employment for which COBRA continuation coverage is available.
The agreements are effective until December 31, 2004, and will automatically
renew for one additional year each December 31 unless notice is given 90 days
prior to the expiration of the current term. However, if a change in control
occurs during the term of the agreement, it will be automatically extended for
24 months from the date of such a change in control.
OTHER EMPLOYMENT BENEFITS
The Corporation and Mr. Forsythe have entered into a wage continuation plan
effective August 1, 1995, which provides that in the event Mr. Forsythe is
disabled as a result of sickness or injury, he will receive 100% of his regular
wages for the first three months of disability, subject to any deduction for
social security or other offset amounts. If the disability extends beyond three
months, Mr. Forsythe will receive payments of $10,000 per month, until age 65,
under an individual supplemental insurance policy. The annual cost of the policy
for Mr. Forsythe is reflected in the Summary Compensation Table above. Mr.
Chewens will receive 100% of his regular wages for the first nine weeks, and NYS
Statutory Disability benefits for the maximum combined period of 26 weeks
subject to deductions, if any, for social security or other offset amounts. In
addition, if the disability extends beyond three months Mr. Chewens will receive
payments of $3,750 per month, until age 65, under an individual supplemental
disability policy. Beginning after six months of disability, Mr. Chewens will
receive additional payments of $10,000 per month, until age 65, under the group
term disability program. The annual cost of the individual policy for Mr.
Chewens is re-elected in the Summary Compensation Table above.
We have entered into an agreement to provide Long Term Care Insurance for
the benefit of Mr. Forsythe and his spouse, effective February 1, 2003. These
policies provide a daily benefit for nursing home care, home health care and
other benefits as stipulated in the contracts. The premiums for this program are
structured to be no longer due after 10 years. The annual premiums for Mr.
Forsythe and his spouse are $6,433 and $6,653 respectively.
Mr. Forsythe and NBT Bank have entered into a death benefits agreement and
a split-dollar agreement, which were amended most recently on January 28, 2002.
Under the death benefits agreement, a split-dollar life insurance policy has
been taken out by NBT Bank on Mr. Forsythe's life in the face amount of
$800,000. Upon Mr. Forsythe's death, his named beneficiary will receive $600,000
from the policy's proceeds, while NBT Bank will receive the remainder of the
policy's proceeds. Under the split-dollar agreement, NBT Bank has taken out a
life insurance policy on Mr. Forsythe's life in the amount of $1,500,000. Upon
Mr. Forsythe's death, his named beneficiary will receive $1,000,000 from the
policy's proceeds, while NBT Bank will receive the remainder of the policy's
proceeds. Upon termination of either the death benefits agreement or the
split-dollar agreement, which occurs after Mr. Forsythe has terminated
employment and ceased to be Chairman of the NBT Board, Mr. Forsythe is required
to transfer all of his right, title, and interest in the policy to us. As owner
of the policies, NBT Bank retains discretion as to the disposition of the
policy. NBT Bank pays the premium on the policy, of which an actuarially
determined amount is attributable to Mr. Forsythe and is reflected in the
Summary Compensation Table above.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In fiscal 2003, the following directors served as members of our Compensation
and Benefits Committee: Andrew S. Kowalczyk, Jr., Patricia T. Civil, William C.
Gumble, Michael M. Murphy, Joseph G. Nasser, William L. Owens, Joseph A.
Santangelo, and Paul O. Stillman. The law firm of Kowalczyk, Tolles & Deery,
LLP, of which Director Andrew S. Kowalczyk, Jr., is a partner, provided legal
services to us and NBT Bank in 2003. We paid $109,427 in fees for services
received from this firm. The law firm of Harris Beach LLP, of which Director
William L. Owens is a partner, also provided legal services to us in 2003. The
15 PROXY STATEMENT: NBT BANCORP INC.
amounts paid to this entity was less than the established reporting threshold.
From time to time, NBT Bank makes loans to its Directors and Executive Officers
and related persons or entities. It is the belief of Management that these loans
are made in the ordinary course of business, are made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons, and neither involve more than
normal risk of collectability nor present other unfavorable features.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Benefits Committee of the Board of Directors is comprised
of non-employee directors meeting the applicable standards for independence. The
primary responsibility of the Compensation and Benefits Committee is to design,
implement, and administer all facets of our compensation and benefits programs
for all employees (including Executive Officer salaries, bonuses and certain
other forms of compensation). The Committee also administers our pension plan,
401(k) and employee stock ownership plan ("ESOP"), the directors' and Officers'
stock option plans, as well as the restricted, deferred and performance share
stock plans. The Committee presents its actions to our Board for approval.
The Committee annually retains an independent compensation consultant, to
help ensure that the total compensation is reasonable in comparison to the total
compensation provided by similarly situated publicly traded financial
institutions. The Compensation Committee has also sought the advice of that
consultant in connection with the grant of stock options. Set forth below is a
report addressing NBT's compensation policies for 2003 as they affected NBT's
Executive Officers.
COMPENSATION POLICIES FOR EXECUTIVE OFFICERS
NBT's Executive Compensation Policies are designed to provide competitive levels
of compensation, to assist NBT in attracting and retaining qualified executives
and to encourage superior performance. In determining levels of Executive
Officers' overall compensation, the Compensation Committee considers the
qualifications and experience of the executives, the size of the Company and the
complexity of its operations, the financial condition, including recurring
income, of the Company, the compensation paid to other persons employed by the
Company and the compensation paid to persons having similar duties and
responsibilities in comparable financial institutions. Compensation paid or
awarded to NBT's Executive Officers in 2003 consisted of the following
components: base salary, variable compensation and other.
BASE SALARY. The Compensation Committee reviews executive base salaries
annually. Base salary is intended to signal the internal value of the position
and to track with the external marketplace. All current Executive Officers
presently serve pursuant to employment agreements that provide for a minimum
base salary that may not be reduced without the consent of the Executive
Officer. In establishing the fiscal 2003 salary for each Executive Officer, the
Compensation Committee considered the Officer's responsibilities, qualifications
and experience, the size of the Company and the complexity of its operations,
the financial condition of the Company (based on levels of recurring income,
asset quality and capital), and compensation paid to persons having similar
duties and responsibilities in comparable financial institutions.
VARIABLE COMPENSATION. Variable compensation consists of annual cash incentives
in the form of our Executive Incentive Compensation Plan ("EICP") and stock
option grants.
The Committee designed the current EICP that links payout with stockholder
interests. The Committee reviews the EICP annually. The Compensation Committee
establishes corporate performance objectives at the beginning of each year. For
2003, the primary corporate financial performance objective was based on the
Company attaining a certain target Earnings Per Share ("EPS") level. EPS levels
below the target level result in no EICP payment being made. EPS levels
exceeding the target by specified percentages may result in increasing EICP
payments based on a four-tiered structure. In 2003, the named executives,
including Mr. Forsythe were eligible to receive an EICP payment based on NBT's
reported EPS. The Committee may, at their discretion, modify or interpret the
plan from time to time, to negate the effects of certain non-recurring increases
or decreases in the EPS level. For example in 2002, the favorable effect on EPS
attributed to the adoption of a new FASB pronouncement was not considered, in
determining the payments.
The purpose of NBT's non-qualified stock option plan is to provide an
additional incentive to certain NBT Officers to work to maximize stockholder
value. Stock options vest 40% after one year and in equal increments over the
next three years. This approach is designed to act as a retention device for key
employees and to encourage employees to take into account the long-term
interests of NBT. The guidelines used in 2003 by the Compensation Committee in
making the stock option grants to Mr. Forsythe and other named Executive
Officers of NBT took into account the duties and responsibilities of the
individuals and the advice of our independent compensation consultant. In
January 2003, the named executives received options to purchase an aggregate of
98,700 shares of common stock at exercise prices equal to the fair market value
on the respective date of grant. In January 2004, the CEO and named executives
received options to purchase an aggregate of 84,601 shares of common stock at
16 PROXY STATEMENT: NBT BANCORP INC.
exercise prices equal to the fair market value on the respective date of grant.
The reduction in option shares is primarily the result of the increase of the
share price of the Company's stock at the grant date as compared to last year's
share price.
OTHER. In addition to the compensation paid to Executive Officers as described
above, Executive Officers received, along with and on the same terms as other
employees, certain benefits pursuant to our 401(k)/ESOP. All of our named
executives were eligible to participate in the 401(k)/ESOP and were 100% vested
during 2003. The 401(k)/ESOP Plan provides that an eligible employee may elect
to defer up to the Internal Revenue Code Section 402(g) limit, of his or her
salary for retirement (subject to a maximum limitation for 2004 of $13,000 and
2003 of $12,000), and that we will provide a matching contribution of 100% of
the first 3% of the employee's deferred amount. In addition, we may make an
additional discretionary matching contribution on behalf of participants who are
employed on the last day of the plan year and who completed a year of service
during the plan year based on the financial performance of the Company. For
2003, discretionary contributions of $593,730 (including the named executives)
were made for eligible participants, in January 2004. These contributions were
made in the form of Company stock. Compensation taken into account under the
Plan cannot exceed $205,000 for 2004, and $200,000 for 2003. Our Board may amend
or terminate this Plan at any time.
CEO COMPENSATION. The Compensation Committee, in determining the compensation
for the Chief Executive Officer, considers NBT's size and complexity, financial
condition and results, including progress in meeting strategic objectives. The
Chief Executive Officer's fiscal 2003 salary was $425,000, an increase of 13.3%,
compared to $375,000 in 2002. NBT annually retains an independent compensation
consultant, and in that regard received an opinion that the total compensation
was reasonable in comparison to the total compensation provided by similarly
situated publicly traded financial institutions. The Compensation Committee also
sought the advice of that consultant in connection with the grant of options in
fiscal 2003. For the fiscal year 2003, the Compensation Committee concluded that
total compensation for the Chief Executive Officer was reasonable in comparison
to similarly situated publicly traded financial institutions.
INTERNAL REVENUE CODE (IRC) SECTION 162(M). In 1993, the IRC was amended to
disallow publicly traded companies from receiving a tax deduction on
compensation paid to executive Officers in excess of $1 million (section 162(m)
of the IRC), unless, among other things, the compensation meets the requirements
for performance-based compensation. In structuring NBT's compensation programs
and in determining executive compensation, the Committee takes into
consideration the deductibility limit for compensation.
MEMBERS OF THE COMPENSATION AND BENEFITS COMMITTEE:
Chairman: Andrew S. Kowalczyk, Jr.
Members: Patricia T. Civil
William C. Gumble
Michael M. Murphy
Joseph G. Nasser
William L. Owens
Joseph A. Santangelo
Paul O. Stillman
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
From time to time, NBT Bank makes loans to its Directors and Executive Officers
and related persons or entities. It is the belief of Management that these loans
are made in the ordinary course of business, are made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons, and neither involve more than
normal risk of collectability nor present other unfavorable features.
The law firm of Kowalczyk, Tolles & Deery, LLP, of which Director Andrew S.
Kowalczyk, Jr., is a partner, provided legal services to us and NBT Bank in
2003. We paid $109,427 in fees for services received from this firm. The law
firms of Harris Beach LLP, of which Director William L. Owens is a partner;
Oliver, Price & Rhodes, of which Director Paul D. Horger is a partner; and
Needle, Goldenziel and Pascale, of which Director Gene E. Goldenziel is a
partner, also provided legal services to us in 2003. The amounts paid to each of
these entities was less than the established reporting thresholds.
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return (i.e.,
price change, reinvestment of cash dividends and stock dividends received) on
our common stock against the cumulative total return of the NASDAQ Stock Market
(U.S. Companies) Index and the Index for NASDAQ Financial Stocks. The stock
performance graph assumes that $100 was invested on December 31, 1998. The graph
further assumes the reinvestment of dividends into additional shares of the same
class of equity securities at the frequency with which dividends are paid on
such securities during the relevant fiscal year. The yearly points marked on the
horizontal axis correspond to December 31 of that year. We calculate each of the
referenced indices in the same manner. All are market-capitalization-weighted
indices, so companies judged by the market to be more important (i.e., more
valuable) count for more in all indices.
17 PROXY STATEMENT: NBT BANCORP INC.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG NBT BANCORP INC., THE
INDEX FOR NASDAQ FINANCIAL STOCKS, AND THE NASDAQ STOCK MARKET (U.S. COMPANIES)
INDEX
[GRAPHIC OMITTED]
DATA:
- -----
Ticker Name 4 Qtr 98 4 Qtr 99 4 Qtr 00 4 Qtr 01 4 Qtr 02 4 Qtr 03
NBTB NBT Bancorp $ 100.00 $ 72.22 $ 71.85 $ 74.27 $ 91.12 $ 118.48
NDF NASDAQ Financial Stocks $ 100.00 $ 92.80 $ 105.33 $ 111.23 $ 109.47 $ 143.54
CCMP NASDAQ Composite Index $ 100.00 $ 186.09 $ 113.19 $ 89.66 $ 61.67 $ 92.97
DATE VALUE
NBT STOCK 12/31/1998 $ 100.00
12/31/1999 $ 72.22
12/31/2000 $ 71.85
12/31/2001 $ 74.27
12/31/2002 $ 91.12
12/31/2003 $ 118.48
RISK MANAGEMENT COMMITTEE REPORT
Our Risk Management Committee, which functions as our audit committee, is
comprised of nine directors who are not Officers or employees of NBT. Each of
the members of the Risk Management Committee is an independent director under
SEC Regulation and Rule 4200(a)(14) of the Nasdaq Stock Market. No member of the
Risk Management Committee serves on three or more audit committees. The Risk
Management Committee held four meetings during 2003. The meetings were designed
to facilitate and encourage private communication between the Risk Management
Committee, the internal auditors and our independent public accountants, KPMG
LLP.
Our Risk Management Committee acts under a written charter adopted and
approved by our Board. The Risk Management Committee has performed the
procedures specified in the attached charter regarding the preparation and
review of our consolidated financial statements as of and for the three years
ended December 31, 2003. Among the procedures performed, the Risk Management
Committee has:
- Reviewed and discussed the audited consolidated financial statements
with NBT Management;
- Discussed with KPMG LLP, our independent auditors, the matters
required to be discussed by Statements on Auditing Standards (SAS) 61
(Codification of Statements on Auditing Standards, AU Sec. 380); and
- Received the written disclosures and the letter from KPMG LLP required
by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees) and discussed with KPMG LLP its
independence.
On the basis of its review as specified in the attached charter and
discussions referred to in this section of the proxy statement, the Risk
Management Committee has recommended to our Board that the audited consolidated
financial statements be included in our Annual Report Form 10-K for the year
ended December 31, 2003 for filing with the SEC.
MEMBERS OF THE RISK MANAGEMENT COMMITTEE:
Chairman: Joseph G. Nasser
Members: Richard Chojnowski
William C. Gumble
Janet H. Ingraham
John C. Mitchell
Van Ness D. Robinson
Joseph A. Santangelo
Paul O. Stillman
Patricia T. Civil (*)
(*) Patricia T. Civil was designated as NBT's "audit committee financial expert"
upon joining the Committee and Board in May 2003. Ms. Civil meets the
independence standards identified above.
18 PROXY STATEMENT: NBT BANCORP INC.
NBT'S INDEPENDENT AUDITORS
Our Risk Management Committee has appointed KPMG LLP as our independent auditors
to audit our consolidated financial statements for the fiscal year ending
December 31, 2004. KPMG LLP has served as our independent auditors since 1987.
We expect representatives of KPMG LLP to be present at our annual meeting. Those
representatives will have an opportunity to make a statement if they desire to
do so and will also be available to respond to appropriate questions.
AUDIT FEES AND NON-AUDIT FEES. The following table presents fees for
professional audit services rendered by KPMG LLP for the audit of NBT's annual
consolidated financial statements for the fiscal years ended December 31, 2003
and 2002, and fees billed for other services provided by KPMG LLP. Prior to any
new engagement representing a permissible audit or non-audit activity, approval
of the Risk Management Committee is required.
2003 2002
- ---------------------------------------------------
Audit Fees $363,000 $ 329,000
Audit related fees (1) $ 20,000 $ 30,000
-------- ----------
Audit and Audit related fees $383,000 $ 359,000
Tax fees (2) $149,555 $ 554,270
All other fees (3) $ 0 $ 94,739
-------- ----------
Total Fees $532,555 $1,008,009
- ---------------------------------------------------
(1) Audit related fees consisted of fees for audits of employee benefit plan
financial statements.
(2) Tax fees consisted of fees for tax return preparation, tax compliance and
tax planning services.
(3) All other fees in 2002 consisted of fees for mortgage process review
analysis.
AUDIT COMMITTEE REVIEW. Our Risk Management Committee has considered whether
KPMG's provision of the non-audit services summarized in the preceding section
is compatible with maintaining KPMG's independence.
OTHER MATTERS
STOCKHOLDER PROPOSALS FOR THE 2005 ANNUAL MEETING
Stockholder proposals submitted pursuant to Rule 14a-8 of the Exchange Act for
inclusion in our proxy statement for the 2005 Annual Meeting of Stockholders
must be received by NBT by November 28, 2004. Each proposal must comply with the
requirements as to form and substance established by the SEC for such a proposal
to be included in the proxy statement and form of proxy. SEC rules set forth
standards as to what stockholder proposals corporations must include in a proxy
statement for an annual meeting.
If the proposal is submitted pursuant to the Company's Bylaws, in which
case the notice of the proposal must meet certain requirements set forth in our
Bylaws and we are not required to include the proposals in our proxy materials,
the proposal must be received on or after January 31, 2005 and on or before
March 2, 2005.
OTHER MATTERS
As of the date of this proxy statement, our Board knows of no matters that will
be presented for consideration at our meeting other than as described in this
proxy statement. If any other matters should properly come before our meeting
and be voted upon, the enclosed proxies will be deemed to confer discretionary
authority on the individuals named as proxies to vote the shares represented by
those proxies as to those matters. The persons named as proxies intend to vote
in accordance with the determination of the majority vote of our Board.
Upon receipt of a written request, the Company will furnish to any
stockholder without charge a copy of the Company's Annual Report on form 10-K
for the year ended December 31, 2003 and exhibits thereto required to be filed
with the SEC under the Securities Exchange Act of 1934. Such written request
should be directed to:
Michael J. Chewens
Senior Executive Vice President,
Chief Financial Officer and Corporate Secretary
NBT Bancorp Inc.
52 South Broad Street
Norwich, NY 13815
19 PROXY STATEMENT: NBT BANCORP INC.
APPENDIX A
NBT BANCORP INC.
RISK MANAGEMENT COMMITTEE POLICY STATEMENT AND CHARTER
- --------------------------------------------------------------------------------
PURPOSE OF THE COMMITTEE:
The Board of Directors of NBT Bancorp Inc. ("NBT" or the "Company") established
the RISK MANAGEMENT COMMITTEE for the purpose of assisting the Board in
fulfilling its oversight responsibilities to NBT, its subsidiaries and its
shareholders for the Company's accounting and financial reporting process and
the audits of the financial statements of the Company and to meet the Company's
regulatory and legal requirements. The Committee's primary duties and
responsibilities are to:
- Monitor the integrity of and oversee the Company's accounting and
financial reporting processes and systems of internal control
regarding finance, accounting and legal compliance.
- Ensure the independence and monitor the performance of the Company's
independent auditors and the Risk Management Division (which includes
the internal audit department) personnel.
- Assume the direct responsibility for the appointment, compensation,
retention, and oversight of the work of any registered public
accounting firm engaged by the Company (including resolution of
disagreements between management and the independent auditor regarding
financial reporting) for the purpose of preparing or issuing an audit
report or related work. Each registered public accounting firm
employed by the Company shall report directly to the Committee.
- Be directly responsible for the appointment, compensation and
oversight of the Senior Risk Management Division Officer.
- Provide an avenue of communication among the independent auditors,
Management, the Risk Management Division and the Board of Directors.
COMMITTEE MEMBERSHIP AND INDEPENDENCE:
THE RISK MANAGEMENT COMMITTEE WILL BE COMPRISED OF:
- A minimum of three directors, each of whom meets the financial
literacy requirements of Section 36(g)1(C)(i) of the rules and
regulations of the Federal Deposit Insurance Corporation, the Nasdaq
Stock Market and any other applicable rules or regulations and the
independence requirements under applicable rules of the Securities and
Exchange Commission ("SEC"), FDIC and Nasdaq Stock Market.
- At least one member who is an "audit committee financial expert"
within the meaning of Sec. 407 of the Sarbanes-Oxley Act of 2002 and
the rules of the SEC thereunder.
The Chairman and members of the Committee shall be appointed by the Board on the
recommendation of the Nominating and Corporate Governance Committee. Committee
members may be removed and replaced by the Board, but all replacements shall be
made on the recommendation of the Nominating and Corporate Governance Committee.
INDEPENDENCE:
THE RISK MANAGEMENT COMMITTEE HAS ADOPTED A DEFINITION OF INDEPENDENCE THAT IS
CONSISTENT WITH SEC, THE SARBANES- OXLEY ACT OF 2002 (AND THE RELATED RULES OF
THE SEC THEREUNDER), NATIONAL ASSOCIATION OF SECURITIES DEALERS ("NASD") AND
OTHER APPLICABLE REQUIREMENTS. IN BRIEF:
"Members of the Committee shall be considered independent if they have no
relationship to NBT that may interfere with the exercise of their
independence from Management and the Company."
The Board of Directors will assess the Committee members' independence in
accordance with the applicable rules and regulations on an annual basis. All
Committee members will reaffirm and attest to their independence on an annual
basis.
20 PROXY STATEMENT: NBT BANCORP INC.
COMMITTEE POWERS, AUTHORITY, DUTIES AND RESPONSIBILITIES:
The purpose of this Policy Statement and Charter is to confirm the authority and
organization of the Risk Management Committee of the Board of Directors of NBT.
The Policy Statement/Charter will:
- Be approved by the full Board of Directors.
- Specify the scope of the Committee's responsibilities.
- Specify how the Committee carries out those responsibilities,
including structure, processes and membership requirements.
- Require an annual review and reassessment regarding the adequacy of
the Policy Statement/Charter and this Committee (annual reviews and
reassessments will be reviewed and ratified by Nominating and
Corporate Governance Committee and ultimately the full Board).
- Be published at least every three years in accordance with SEC
regulations.
THE RISK MANAGEMENT COMMITTEE SHALL:
- Meet the requirements set forth by the SEC, the NASD and other
applicable government and regulatory agencies.
- Report regularly and directly to the Board of Directors.
- Be selected by and composed of independent members of the Board of
Directors.
- Hold quarterly meetings and such other special meetings as deemed
necessary.
- Meet privately in executive session at all meetings, with the
independent auditors and the Senior Risk Management Division Officer
to discuss any matters that the Committee believes should be
discussed.
- Have access to and the authority to engage outside parties as needed
to advise and assist in Committee matters.
- Have access to the independent auditors and Risk Management Division
personnel (who will be independent and held accountable to this
Committee and the Board of Directors).
IN GENERAL, THE RISK MANAGEMENT COMMITTEE SHALL BE RESPONSIBLE TO THE BOARD OF
DIRECTORS FOR THE FOLLOWING:
- Review, as required by FDICIA Sec.112, Management's annual assertion
with respect to the system of internal controls at certain banking
subsidiaries. Review the independent auditors' reports and
attestations regarding the same.
- Advise the Board with respect to the Company's policies and procedures
regarding compliance with applicable laws and regulations.
- Review and annually approve the Company's Code of Business Conduct and
Ethics. Review for potential conflict of interest situations and
approve, on an ongoing basis, related party transactions required to
be disclosed pursuant to Item 404 of SEC Regulation S-K. Since NBT
Bancorp through its subsidiary, NBT Bank, N.A. is in the business of
lending to its customers, who include our directors, Officers and
employees, adherence to the requirements set forth in Regulation
promulgated by the Board of Governors of the Federal Reserve Bank is
mandated.
- Provide governance, guidance and oversight of the Company's internal
control structure.
- Review all regulatory examination reports and required Management
responses.
- Review the internal audit function including coordination of plans
with the independent auditors. Approve the annual internal audit plan.
Review progress made throughout the year in completing the annual
internal audit plan. Consider and review audit reports issued and
Management responses received or updated since the previous meeting.
- Review and assess the annual Trust Division Audit(s).
- Review with the Senior Loan Review Officer the results of completed
reviews and the status of reviews in progress. Reviews are conducted
for the purpose of reporting on the quality of credits and credit
administration.
- Review with the Compliance Officer (as needed) the status of the
Company's Regulatory Compliance Program.
- Review the Security Officer's annual report on the status of the
security at certain banking subsidiaries, in compliance with the Bank
Protection Act of 1968 and OCC Regulation 12 CFR 21.
- Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal
accounting controls, or auditing matters and the confidential,
anonymous submission by employees of the Company or any subsidiary
regarding questionable accounting or auditing matters.
21 PROXY STATEMENT: NBT BANCORP INC.
- Maintain a concurring role in the appointment/dismissal of the Senior
Risk Management Division Officer through evaluations of his/her
performance and independence.
- Engage an independent consulting firm to assess the effectiveness of
the Audit, Compliance, Security and/or Loan Review Departments and
incur such expense at its own discretion at such time as the Committee
deems it necessary.
- Take all action necessary, advisable or proper to perform Committee
duties for each Bank and non-Bank subsidiary.
WITH REGARD TO THE COMPANY'S INDEPENDENT AUDITORS (I.E., THE REGISTERED PUBLIC
ACCOUNTING FIRMS COVERED BY THIS CHARTER AND SECTION 10A OF THE SECURITIES AND
EXCHANGE ACT OF 1934), THE RISK MANAGEMENT COMMITTEE SHALL BE RESPONSIBLE TO THE
BOARD OF DIRECTORS FOR THE FOLLOWING:
- Ensure that the independent auditors are ultimately accountable to the
Board of Directors and the Committee.
- Select, appoint, oversee and authorize funding for the independent
auditors.
- Prior to and during their annual review, meet with and evaluate the
independent auditors. Discuss with the independent auditors their
audit plans, staffing and scope for the annual audit.
- Review and pre-approve all audit and permissible non-audit services.
The Committee shall review audit fees and compensation for all
services performed.
- Review the information required by Statement on Auditing Standards
("SAS") No. 61 on an annual basis with the independent auditors.
Request that the independent auditors review, in accordance with SAS
No. 100, the SEC Form 10- Q's, prior to their ling and update any
material changes in SAS No. 61 information on a quarterly basis. Such
updates to SAS No. 61 information may be communicated to the Committee
Chairman.
- On an annual basis, the Committee shall review and discuss with the
independent auditors all significant relationships they have with the
Company, which could impair the auditors' independence. Independent
auditors shall communicate their independence in writing on an annual
basis in accordance with Independent Standards Board Standard No. 1.
- Assure regular rotation of the lead and/or concurring audit partner in
accordance with applicable law.
- Review the proposed hiring of employees of the Company's independent
auditor or former employees who have worked for the Company's
independent auditor within the past three years.
- Take all action necessary, advisable or proper to perform Committee
duties for each Bank and non-Bank subsidiary.
OTHER DUTIES FOR WHICH THE RISK MANAGEMENT COMMITTEE SHALL BE RESPONSIBLE TO THE
BOARD OF DIRECTORS INCLUDE THE FOLLOWING:
- Review the Company's quarterly unaudited and annual audited
consolidated financial statements prior to their filing with the SEC.
The review should include discussion with Management and independent
auditors of significant issues regarding accounting principles and
judgements. Also, the Committee shall receive and review the results
of the annual audit and any other required communications from the
independent auditors. Based on such reviews and discussions, the
Committee shall advise the Board whether it recommends that the
audited consolidated financial statements be included in the Company's
SEC Form 10-K to be filed with the SEC.
- Meet at least annually with Management, Risk Management Division
personnel and the independent auditors to review NBT's major financial
risk exposures and the steps Management has taken to monitor and
control such exposures.
- On at least an annual basis, review with appropriate parties any legal
matters that could have a significant impact on the Organization's
financial statements, the Company's compliance with applicable laws
and regulations, and inquiries received from regulators or government
agencies.
- Prepare the report(s) required by the rules of applicable agencies
including the SEC and NASD to be included in the Company's annual
proxy statement.
The Committee may, at its discretion, request any special investigations of
conflicts of interest, regulatory compliance, or any other significant matters
of concern. The Committee has the ability to retain, at the Company's expense,
special legal, accounting or other consultants or experts that it deems
necessary in the performance of its duties. The Committee will, at its
discretion, meet privately with the independent auditors, Management and/or
members of the Risk Management Division. The Committee may delegate certain of
the above responsibilities to its Chairman or other Committee members, however,
this in no way, relieves the Committee of overall responsibility.
22 PROXY STATEMENT: NBT BANCORP INC.
While the Risk Management Committee has the responsibilities and powers set
forth in this Charter, it is not the duty of the Committee to plan or conduct
audits or to determine independently of Management and the independent auditors
that the Company's consolidated financial statements are complete and accurate
and are in accordance with generally accepted accounting principles.
23 PROXY STATEMENT: NBT BANCORP INC.
NBT BANCORP
NBT BANCORP INC.
24 CHURCH STREET
CANAJOHARIE, NY 13317
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Use the Internet to transmit your voting instructions and for electronic
delivery of information up until 11:59 P.M. Eastern Time on May 3, 2004. Have
your proxy card in hand when you access the web site and follow the instructions
to obtain your records and to create an electronic voting instruction form.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59
P.M. Eastern Time on May 3, 2004. Have your proxy card in hand when you call and
then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return it to NBT Bancorp, Inc., c/o ADP, 51 Mercedes Way,
Edgewood, NY 11717
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
NBTBC1 KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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NBT BANCORP INC.
VOTE ON DIRECTORS
2. To elect the five director nominees listed below
(Proposal 2):
For Withold For All To withhold authority to vote for a particular
All All Except nominee, mark "For All Except" and write the
nominee's number on the line below:
[ ] [ ] [ ]
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Nominees:
01) Daryl R. Forsthye
02) William C. Gumble
03) William L. Owens
04) Van Ness D. Robinson
05) Patricia T. Civil
VOTE ON PROPOSALS
For Against Abstain
[ ] [ ] [ ]
1. To fix the number of directors at sixteen (Proposal 1)
3. The proxies are authorized to vote in accordance with the majority vote of
our Board, upon such other business that may properly come before the
meeting.
Please sign here exactly as name(s) appear(s) above. When signing as attorney,
executor, administrator, trustee, guardian, or in any other fiduciary capacity,
give full title. If more than one person acts as trustee, all should sign. All
joint owners must sign.
For address changes and/or comments,
please check this box and write them
on the back where indicated [ ]
Please indicate if you plan to attend this meeting. [ ] [ ]
YES YES
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Signature[PLEASE SIGN WITHIN BOX] Date Signature(Joint Owners) Date
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NBT BANCORP INC.
Proxy Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Joseph Benenati and Duward Crandall and either
of them, with full power of substitution, proxies to represent the undersigned
at the Annual Meeting of Stockholders of NBT Bancorp Inc. to be held at the
Binghamton Regency at One Sarbro Square, Binghamton, NY 13901 on May 4, 2004 at
10:00 a.m. local time, or at any adjournment or postponement of the meeting,
with all power which the undersigned would possess if personally present, and to
vote all shares of NBT's common stock which the undersigned may be entitled to
vote at the meeting upon the proposals on the reverse side, as described in the
accompanying proxy statement, in accordance with the following instructions and,
in accordance with the majority vote of our Board, upon any other matters that
may properly come before the meeting. THIS PROXY, WHEN PROPERLY EXECUTED, WILL
BE VOTED AS DIRECTED BY THE UNDERSIGNED. IF NO DIRECTION IS INDICATED, A
PROPERLY EXECUTED PROXY WILL BE VOTED FOR THE PROPOSLAS LISTED ON THE REVERSE
SIDE. THE UNDERSIGNED SHAREHOLDER HEREBY REVOKES ANY PROXY OR PROXIES HERETOFORE
GIVEN.
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| Address Changes/Comments: |
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(If you noted any Address Changes/Comments above, please mark corresponding
box on the reverse side.)
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