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:
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(5) TOTAL FEE PAID:
- --------------------------------------------------------------------------------
[ ] 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 2, 2006 at
10:00 a.m. local time for the following purposes:
1. To fix the size of the Board of Directors at fifteen;
2. To elect five directors, each for a three year term;
3. To approve the NBT 2006 Non-Executive Restricted Stock Plan; and
4. To transact such other business as may properly come before the NBT
annual meeting.
We have fixed the close of business on March 15, 2006 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 of the Board
Norwich, New York
March 30, 2006
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 2, 2006
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 30, 2006.
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 2, 2006 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 fifteen;
- - To elect five directors, each for a three year term;
- - To approve the NBT 2006 Non-Executive Restricted Stock Plan (the
"Restricted Stock Plan"); 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 2, 2006, 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, 2006, 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, 2006, there were 34,419,695 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 PROPOSALS
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 (i) the proposal to fix the number of
directors at fifteen and (ii) the proposal to adopt the 2006 Non-Executive
Restricted Stock Plan.
1
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 and will have the effect of a vote cast "against."
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 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 fifteen;
- - FOR electing the five persons nominated by our Board as directors; and
- - FOR the approval of the Non-Executive Restricted Stock Plan.
If you are a shareholder whose shares are registered in your name, you may vote
your shares by using one of the following four methods:
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 1, 2006.
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 1, 2006. 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.
If your shares are registered in the name of a bank or brokerage firm you will
receive instructions from your holder of record that must be followed in order
for the record holder to vote the shares per your instructions. Many banks and
brokerage firms have a process for their beneficial holders to provide
instructions over the phone or via the Internet. If Internet or telephone
voting is unavailable from your bank or brokerage firm, please complete and
return the enclosed voting instruction card in the addressed, postage paid
envelope provided. If you hold shares through a bank or brokerage firm and wish
to be able to vote in person at the meeting, you must obtain a legal proxy from
your broker, bank or other holder of record and present it to the inspector of
elections with your ballot.
2
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 Secretary 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:
Corporate Secretary, or hand deliver the notice of revocation or subsequent
proxy to the Corporate Secretary 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 1, 2006.
If you hold shares through a bank or brokerage firm, you must contact that firm
to revoke any prior voting instructions. You may also vote in person at the
annual meeting if you obtain a legal proxy as described above.
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, 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.
--------------------
ANNUAL REPORT
A copy of the Company's 2005 Annual Report accompanies this Proxy Statement.
NBT is required to file an annual report on Form 10-K for its 2005 fiscal year
with the Securities and Exchange Commission. Shareholders may obtain, free of
charge, a copy of the Form 10-K by writing to: NBT Bancorp Inc., 52 South Broad
Street, Norwich, New York 13815, Attention: Corporate Secretary. Our annual
report on Form 10-K is available on our website, www.nbtbancorp.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.
PROPOSAL 1
SIZE OF THE BOARD OF DIRECTORS
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.
Mr. Andrew S. Kowalczyk Jr., whose term expires as of the 2006 annual meeting,
has advised the Company that he intends to retire from the Board effective as of
the annual meeting, at which point the Company will have fifteen directors.
Accordingly, the Board has proposed that the stockholders vote to fix the number
of directors constituting the full Board at fifteen members.
3
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
FIXING THE SIZE OF THE BOARD OF DIRECTORS AT FIFTEEN MEMBERS.
PROPOSAL 2
ELECTION OF DIRECTORS
At the annual meeting, five directors will be elected to serve a three year term
until each such 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. Dietrich, Mitchell, Nasser, Hutcherson and Murphy, whose terms expire at
the 2006 annual meeting, have been nominated to stand for re-election at the
2006 annual meeting for terms expiring in 2009. Mr. Andrew S. Kowalczyk Jr.,
whose term expires as of the 2006 annual meeting, has advised the Company that
he intends to retire from the Board effective as of the annual meeting. The
Board greatly appreciates his service and contributions to the success of the
Company and NBT Bank.
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, the five director nominees for the class expiring at the 2009 annual
meeting 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. This means that the five nominees who receive the most
votes will be elected. There are no cumulative voting rights in the election of
directors. The names of the nominees for election for the terms as shown, our
continuing directors and certain information as to each of them are as follows:
Number of Common
Shares Beneficially Percent of
Age at Principal Occupation During Past Five Years Director Owned Shares
Name 12/31/05 and Other Directorships Since on 12/31/05 Outstanding
- ---- -------- ----------------------- ----- ------------------- ------------
NOMINEES WITH TERMS EXPIRING IN 2009:
Martin A. Dietrich 50 CEO of NBT since January 2006; 2005 20,341 (1) *
President of NBT since January 2004; 848 (1) (a) *
President and CEO of NBT Bank since 21,178 (1) (b) *
January 2004; President and Chief Operating 13,627 (2) *
Officer of NBT Bank from September 1999 113,525 (4) *
to December 2003 7,000 (c) *
Directorships:
Preferred Mutual Insurance Company
Chenango Memorial Hospital Board of Trustees
United Health Services
Pennstar Bank since 2004
NBT Bank since 2001
John C. Mitchell 55 President and CEO of I.L. Richer Co. (agri. business) 1994 24,192 (1) (e) *
Directorships: 4,297 (2) *
Preferred Mutual Insurance Company 2,827 (3) *
New York Agricultural Development Corp
NBT Bank since 1993
Joseph G. Nasser 48 Accountant, Nasser & Co. 2000 38,485 (1) *
Directorships: 11,449 (2) *
Pennstar Bank since 1999 2,603 (3) *
Michael H. Hutcherson 43 President, The Colonial Agency LLC, 2002 3,805 (1) *
(insurance services) 2,616 (1) (a) *
Directorships: 828 (2) *
NBT Bank since 2002 1,900 (3) *
4
Michael M. Murphy 44 President & Owner, Red Line Towing Inc. 2002 8,147 (1) *
Directorships: 1,635 (1) (a) *
Pennstar Bank since 1999 38,664 (2) *
CONTINUING DIRECTORS WITH TERMS EXPIRING IN 2008:
Richard Chojnowski 63 Electrical contractor (sole proprietorship) 2000 4,538 (1) *
Directorships: 264,353 (2) *
Pennstar Bank since 1994 5,352 (3) *
Dr. Peter B. Gregory 70 Partner, Gatehouse Antiques 1987 92,972 (1) *
Directorships: 60,179 (1) (a) *
NBT Bank since 1978 5,316 (3) *
Joseph A. Santangelo 53 President and CEO - Arkell Hall Foundation Inc. 2001 6,402 (1) *
Directorships: 6,553 (2) *
NBT Bank since 1991 4,102 (3) *
Janet H. Ingraham 68 Professional Volunteer 2002 12,866 (1) *
Directorships: 525 (1) (a) *
Chase Memorial Nursing Home Corp. 2,928 (3) *
Chenango Memorial Hospital Board of Trustees
NBT Bank since 1996
Paul D. Horger 68 Partner, law firm of Oliver, Price & Rhodes 2002 15,314 (1) *
Directorships: 3,352 (3) *
Pennstar Bank since 1997
CONTINUING DIRECTORS WITH TERMS EXPIRING IN 2007:
Daryl R. Forsythe 62 Chairman of NBT since January 2004; 1992 108,568 (1) *
Chairman of NBT Bank since January 2004; 1,842 (1) (a) *
Chairman and CEO of NBT from January 2004 to 16,660 (1) (b) *
December 2005; Chairman, President and CEO of NBT 12,199 (2) *
From April 2001 to December 2003; Chairman and 142,733 (4) *
CEO 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
Blue Cross / Blue Shield Southern Tier Advisory Board
NBT Bank since 1988
William C. Gumble 68 Retired attorney-at-law; County Solicitor and 2000 105,532 (1) *
District Attorney of Pike County, PA 1,736 (3) *
Directorships:
Pennstar Bank since 1985
William L. Owens 56 Partner, law firm of Harris Beach LLP 1999 8,067 (1) *
Directorships: 2,559 (3) *
Champlain Enterprises, Inc.
Mediquest, Inc.
NBT Bank since 1995
Van Ness D. Robinson 70 Chairman/Secretary - New York Central Mutual 2001 5,146 (1) *
Fire Insurance Co. (NYCM) 888,471 (d) 2.8%
Directorships: 3,852 (3) *
NYCM
Basset Healthcare
Bruce Hall Corporation
NBT Bank since 1997
Patricia T. Civil 56 Retired Managing Partner, PricewaterhouseCoopers LLP 2003 4,210 (1) *
Directorships: 1,352 (3) *
Rosamond Gifford Charitable Foundation
Visiting Nurses Association of Central New York
NBT Bank since 2003
5
EXECUTIVE OFFICERS OF NBT BANCORP INC. OTHER THAN DIRECTORS WHO ARE OFFICERS:
Number of Common
Shares Beneficially Percent of
Principal Position and Principal Position Owned Shares
Name Age During Past Five Years on 12/31/05 Outstanding
- ---- ------ ---------------------- ------------------- ------------
Michael J. Chewens 44 Senior Executive Vice President, Chief Financial Officer 4,241 (1) *
of NBT and NBT Bank since January 2002; EVP, CFO 11,921 (1) (b) *
of same 1999-2001; Secretary of NBT and NBT Bank 83,613 (4) *
since December 2000
David E. Raven 43 President and Chief Executive Officer of Pennstar Bank 11,277 (1) *
Division since August 2005; President and Chief 6,516 (1) (b) *
Operating Officer of Pennstar Bank Division from 100,904 (4) *
August 2000 to August 2005; Sales and Administration,
September 1999 - August 2000
Ronald M. Bentley 52 President of Retail Banking NBT Bank since August 1,290 (1) (b) *
2005; EVP, Sales & Administration NBT Bank, 12,991 (4) *
November 2001 - August 2005
As of December 31, 2005, all Directors and Executive Officers listed above as a
group beneficially owned 2,341,225 or 7.25% of total shares outstanding as of
December 31, 2005, including shares owned by spouses, certain relatives and
trusts, as to which beneficial ownership may be disclaimed, and options
exercisable within sixty days of December 31, 2005. Mr. Andrew S. Kowalczyk
Jr., a director whose term expires as of the 2006 annual meeting and who will be
retiring effective as of the 2006 annual meeting, beneficially owned 9,705
shares of common stock (less than 1% of the total outstanding shares) as of
December 31, 2005. 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 74,645 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, 2005 totaling 57,565 are included.
(c) Martin A. Dietrich has power of attorney for his mother, who owns 7,000
shares.
(d) New York Central Mutual Fire Insurance Company, of which Van Ness D.
Robinson serves as Chairman/Secretary, owns 888,471 shares.
(e) Does not include 13,000 shares owned by The Adelbert L. Button Charitable
Foundation, for which Mr. Mitchell serves as a trustee, but in which all
investment and disposition discretion over the shares has been granted to
NBT Bank, N.A., as trustee.
(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, 2005.
(4) Shares under option from the NBT 1993 Stock Option Plan, which are
exercisable within sixty days of December 31, 2005.
(*) Less than 1%.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
ELECTION OF ALL OF ITS DIRECTOR NOMINEES.
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 and Mr. Dietrich, 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. In addition, our board of directors has determined that Ms. Civil is
an "audit committee financial expert" as that term is defined in NASD
Marketplace Rule 4350(d)(2)(A).
6
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 2005, NBT held six 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 Stockholder Meetings. All Directors were in
attendance at the 2005 Annual Meeting and we expect that all directors will be
present at the 2006 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
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) stockholder 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
7
Committee, a copy of which is available on the NBT Bancorp website at
www.nbtbancorp.com/corporategov.html. This Committee met two times in 2005.
- ------------------------------------
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 stockholders.
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:
- 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 stockholders 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 stockholder'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 stockholder 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 stockholder giving notice (i) the name and address of
such stockholder, (ii) the number of shares of the Company that will be voted
for the proposed nominee by such stockholder (including shares to be voted by
proxy) and (iii) the number of shares of the Company which are beneficially
owned by such stockholder.
RISK MANAGEMENT COMMITTEE:
Chairman: Joseph G. Nasser
Members: Patricia T. Civil
William C. Gumble
Janet H. Ingraham
John C. Mitchell
Van Ness D. Robinson
Joseph A. Santangelo
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 2005. 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 available on the NBT Bancorp website at
www.nbtbancorp.com/corporategov.html.
- ------------------------------------
8
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
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
three times in 2005.
SECTION 16(A) BENEFICIAL 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
solely on a review of reports submitted to NBT, or written representations from
reporting persons that all reportable transactions were reported, the Company
believes that during the fiscal year ended December 31, 2005 all Section 16(a)
filing requirements applicable to NBT's Officers and Directors were complied
with on a timely basis; except for one Form 4 for each of Mr. Forsythe and Mr.
Mitchell, covering one transaction each.
COMPENSATION OF DIRECTORS AND OFFICERS
BOARD OF DIRECTORS' FEES. During 2005, the non-employee directors received fees
according to the following schedule:
Annual Retainer $ 5,000 (Cash).
10,000 (Restricted Stock) (1)
Board Meetings $ 900 per meeting
Telephonic Board Meetings $ 900 per meeting
Committee Meetings 600 per meeting as member; $900 per meeting as chairperson
Common Stock Options 1,000 shares (i) multiplied by the number of board meetings attended during the
year and (ii) divided by the number of meetings held during the year (2)
Deferred Stock 400 shares (3)
(1) Restricted stock granted pursuant to theNon-Employee Directors' Restricted
and Deferred Stock Plan (the "Directors' Plan") which is equal to the
annual retainer (currently $10,000) divided by the average of the high and
the low sales price of the common stock on the day immediately preceding
the grant date. The restricted stock vests over a three year period.
(2) Granted pursuant to the NBT Non-Employee Director, Divisional Director and
Subsidiary Director Stock Option Plan. Options are granted at the fair
market value per share on the date of the grant.
(3) Granted pursuant to the Directors Plan and vests when the individual ceases
to be a member of the Board.
Starting in 2005, Board members were offered health and dental/vision insurance
through the Company. Six Directors elected to be included in the Company's
health and dental/vision insurance plan and as a result, the Companies
associated premium costs totaled $10,600. 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.
Except as set forth in the following sentence, in 2006 directors are being paid
according to the table set forth above. Effective January 1, 2006, the Chairman
of the Board's annual stock retainer is $50,000 (in the form of unrestricted
stock), his annual stock option award is 5,000 multiplied by the number of board
meetings attended during the year and divided by the number of meetings held and
he receives $1,000 for each board and committee meeting attended.
9
Please refer to page 15 "Employment Agreements - Chairman of the Board" for
additional information regarding the compensation of the Chairman of the Board.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION AWARDS
---------------------------
ANNUAL COMPENSATION
---------------------------------
Securities
Name and Underlying LTIP All Other
Principal Positions Year Salary ($) Bonus ($)(a) Options Payouts ($)(b) Compensation ($)(c)
- --------------------------------------- ---- ----------- ------------- ---------- --------------- --------------------
Daryl R. Forsythe 2005 $ 495,000 $ 297,000 31,907 $ 114,135 $ 54,370
Chairman and Chief Executive 2004 450,000 270,000 30,444 0 49,682
Officer of NBT* 2003 425,000 255,000 36,375 0 34,788
Martin A. Dietrich 2005 $ 350,000 $ 210,000 22,423 $ 0 $ 19,104
President of NBT*; President and 2004 315,000 189,000 21,311 0 14,912
Chief Executive Officer of NBT Bank 2003 281,000 157,360 24,000 0 10,000
Michael J. Chewens 2005 $ 271,600 $ 152,096 17,507 $ 0 $ 17,107
Senior Executive Vice President, 2004 251,500 140,840 17,015 0 14,064
Chief Financial Officer and 2003 232,000 129,920 19,875 0 13,418
Secretary of NBT and NBT Bank
David E. Raven 2005 $ 275,000 $ 154,000 16,289 $ 0 $ 14,973
President and Chief Executive Officer 2004 234,000 131,040 15,831 0 11,930
Pennstar Bank Division 2003 216,000 120,960 18,450 0 10,000
Ronald M. Bentley 2005 $ 210,000 $ 71,820 6,788 $ 0 $ 12,810
President of Retail Banking 2004 180,000 52,650 5,557 0 12,560
NBT Bank 2003 149,350 49,286 6,225 0 9,425
* Effective December 31, 2005, Mr. Forsythe retired as an employee and Chief
Executive Officer, but continues as Chairman of the Board of Directors.
Effective January 1, 2006, Mr. Dietrich is Chief Executive Officer.
NOTES:
(a) Represents bonuses under our Executive Incentive Compensation Plan earned
in the specified year and paid in January of the following year.
(b) Represents the Fair Market Value of Mr. Forsythe's vested 2004 Performance
Shares payable upon his retirement.
(c) This column reflects NBT's contributions to the NBT Bancorp Inc. 401(k) and
Employee Stock Ownership Plan ("401(k)/ESOP"), employer matching
contributions for Messrs. Forsythe, Dietrich, Chewens and Raven were $6,300
in 2005, $6,150 in 2004, and $6,000 in 2003. Discretionary contributions
for Messrs. Forsythe, Dietrich, Chewens and Raven were $4,200 in 2005,
$4,100 in 2004, and $4,000 in 2003. Employer matching contributions for Mr.
Bentley were $6,300 in 2005, $6,150 in 2004 and $5,655 in 2003.
Discretionary contributions for Mr. Bentley were $4,200 in 2005, $4,100 in
2004, and $3,770 in 2003.
Also included in this column are costs to the corporation for disability
plan agreements and split dollar life insurance plans, as well as income
recognized from the Individual Universal Life coverage under the Executive
Life Carve-Out Plan. For Mr. Forsythe, the costs were $26,794 in 2005,
$26,346 in 2004, and $11,702 in 2003. For Mr. Dietrich the costs were
$4,614 for 2005, and $4,662 for 2004. For Mr. Chewens, the costs were
$3,814 for 2005 and 2004 and $3,418 in 2003. For Mr. Raven the costs were
$1,680 for 2005 and 2004. For Mr. Bentley the costs were $2,310 in 2005 and
2004.
In addition, this column includes 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 2005, 2004 and 2003.
Also, in 2005 Messrs. Forsythe, Dietrich, Chewens and Raven received cash
dividends on restricted stock of $3,990, $3,990, $2,793, and $2,793
respectively. As of December 31, 2005, the named executive officers held
the following shares of unvested restricted stock: Mr. Forsythe, 5,250
shares with a value of $113,348; Mr. Dietrich, 5,250 shares with a value of
$113,348; Mr. Chewens, 3,675 shares with a value of $79,343; and Mr. Raven,
3,675 shares with a value of $79,343. The values of these shares are based
on the closing price of the Company's common stock on the Nasdaq stock
market of $21.59 on December 30, 2005.
10
OPTION GRANTS INFORMATION
The following table presents information concerning grants of stock options made
during 2005 to each of the named Executive Officers. The potentially realizable
values are net of exercise price, but before taxes associated with exercise.
These amounts are based solely on assumed rates of appreciation required by
applicable SEC regulations. Actual gains, if any, on option exercises and
common stockholdings are dependent on the future performance of our common
stock, overall market conditions and the option holders' continued employment
through the vesting period. There can be no assurance that the potential
realizable values shown in this table will be achieved.
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable Value at
Individual Grants Assumed Annual Rates of Stock Price
----------------- Appreciation for Option Term (2)
--------------------------------
# of Securities % of Total
Underlying Options Granted Exercise
Options to Employees Price
Name Granted(1) in Fiscal Year ($/Sh) Expiration Date 5% 10%
- ------------------ ---------------- ---------------- ---------- --------------- -------------------- ---------------------
Daryl R. Forsythe 31,907 (a) 8.2% $ 23.2708 01/20/2015 $ 466,955 $ 1,183,356
Daryl R. Forsythe 12,841 (b) 3.3% 23.7553 07/01/2015 191,839 486,158
Daryl R. Forsythe 2,693 (b) 0.7% 23.8712 07/05/2015 40,429 102,453
---------------- ---------------- -------------------- ---------------------
Total 47,441 12.2% $ 699,223 $ 1,771,968
Martin A. Dietrich 22,423 (a) 5.8% $ 23.2708 01/20/2015 $ 328,158 $ 831,617
Martin A. Dietrich 6,470 (b) 1.7% 24.4458 08/01/2015 99,469 252,073
---------------- ---------------- -------------------- ---------------------
28,893 7.5% $ 427,627 $ 1,083,690
Michael J. Chewens 17,507 (a) 4.5% $ 23.2708 01/20/2015 $ 256,213 $ 649,294
David E. Raven 16,289 (a) 4.2% $ 23.2708 01/20/2015 $ 238,388 $ 604,121
David E. Raven 1,543 (b) 0.4% 23.1133 01/26/2015 22,429 56,839
---------------- ---------------- -------------------- ---------------------
17,832 4.6% $ 260,816 $ 660,960
Ronald M. Bentley 6,788 (a) 1.8% $ 23.2708 01/20/2015 $ 99,342 $ 251,751
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) Subject to Board approval, the NBT 1993 Stock Option Plan provides that for
each share of common stock purchased and held pursuant to an option grant,
the holder receives a replacement or "reload" option to purchase another
share of common stock at the fair market value on the date the original
option is exercised. The executive's "reload" options vest in full two
years after the exercise date of the original option. No reload options are
granted upon the exercise of the reload option.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table presents information concerning the exercise of stock
options during 2005 by each of the named Executive Officers and the value at
December 31, 2005, of unexercised options that are exercisable within sixty days
of December 31, 2005. 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 information 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.
11
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Number of Securities Value of Unexercised In
Underlying Unexercised 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 129,054 $ 635,457 142,733/-0- $ 181,858/-0-
Martin A. Dietrich 38,900 330,939 113,525/33,247 422,004/19,450
Michael J. Chewens 23,920 228,426 83,613/21,285 290,576/16,107
David E. Raven 1,543 17,386 100,904/21,338 465,590/14,952
Ronald M. Bentley 7,840 76,093 12,991/7,539 34,371/5,045
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, 2005.
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
The following table provides information on awards granted in 2005 to the
executive officers named in the Summary Compensation Table under the NBT Bancorp
Inc. Performance Share Plan. Please also see the discussion on page 18 for a
description of the material terms of the Performance Share Plan.
Performance or Estimated Future Payout in Shares
Number of Other Period Until of Common Stock
Performance Maturation or
Name Shares Payout Target (#) Maximum (#)
- ------------------ ----------- ------------------ ----------------- -----------------
Daryl R. Forsythe 5,000 12/31/08 5,000 6,000
Martin A. Dietrich 5,000 12/31/08 5,000 6,000
Michael J. Chewens 3,500 12/31/08 3,500 4,200
David E. Raven 3,500 12/31/08 3,500 4,200
Ronald M. Bentley 500 12/31/09 500 650
RETIREMENT PLANS
Our executives participate in the NBT Bancorp Inc. Defined Benefit Pension Plan
(the "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. 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.
Under the cash balance plan design, 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 2005 are computed using a
cash balance methodology for people who converted (as described hereafter) that
provides for pay-based credits to
12
the participants' hypothetical accounts equal to 5 to 43.5 percent (depending on
age and other factors) on the first $210,000 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 the
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. For 2005, the pay-based credits for Messrs. Forsythe, Dietrich, Chewens,
Raven and Bentley were 43.5 percent, 22 percent, 19 percent, 19 percent and 5
percent, respectively. NBT's contributions to the Pension Plan in 2005 for
Messrs. Forsythe, Dietrich, Chewens, Raven and Bentley were $91,350, $46,200,
$39,900, $39,900 and $10,500, respectively.
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 the Pension Plan, the
annuitized employer portion of our 401(k)/ESOP and Social Security.
We entered into an agreement with Mr. Forsythe to provide him with supplemental
retirement benefits, revised most recently on January 1, 2005 (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. Mr.
Forsythe retired effective December 31, 2005. He is currently receiving a
monthly annuity of $16,966.45 payable as a 50% Joint & Survivor annuity. Due to
a requirement under the American Jobs Creation Act of 2004 that certain payments
to our executives must be delayed for six months following their separation from
service, as of July 1, 2006, Mr. Forsythe will be entitled to a one-time make-up
payment of $12,802.32 and his monthly annuity will increase from $16,966.45 to
$19,058.38. As of September 1, 2009, Mr. Forsythe's monthly annuity will
decrease to $17,116.38 pursuant to the terms of his SERP agreement.
NBT has entered into agreements with Messrs. Dietrich, Chewens and Raven to
provide the executive with supplemental retirement benefits, of which Mr.
Dietrich's was revised most recently on January 20, 2006 (the "SERP"). The SERP
provides 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) a percentage (60%
for Mr. Dietrich and 50% for Messrs. Chewens and Raven) 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 the executive takes early retirement. If the executive
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
13
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 a certain
age (age 58 for Mr. Dietrich and age 60 for Messrs. Chewens and Raven) 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 the executive
attains a certain age (age 60 for Mr. Dietrich and age 62 for Messrs. Chewens
and Raven). Assuming a retirement age of 60 for Mr. Dietrich and a retirement
age of 62 for Messrs. Chewens and Raven, satisfaction of applicable SERP
conditions, that Mr. Dietrich is currently 60 and Messrs. Chewens and Raven are
currently 62, and that each executive's 2005 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. Dietrich,
Chewens and Raven would be $323,400, $387,059 and $325,609, respectively. The
social security portion of these amounts is assumed to commence at the Normal
Social Security Retirement Age for each executive. The SERP for Messrs.
Dietrich, Chewens and Raven 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.
PENSION PLAN TABLE
The following table shows the estimated annual retirement benefits from the
Qualified Pension Plan and the SERP for each of the named executive officers
assuming that his employment with NBT and NBT Bank continues to their respective
commencement age, at which time the executive retires. The amounts assume that
their future compensation is equal to their 2005 compensation, and that the
Internal Revenue Code Section 401(a)(17) compensation limit for qualified
retirement plans and the Section 415 annual benefit limit for qualified
retirement plans are assumed to not increase from their 2006 values of $220,000
and $175,000, respectively.
- ------------------------------------------------------------------------------------------
EXECUTIVE QUALIFIED PENSION QUALIFIED PENSION SERP SERP
AS LIFE ANNUITY WITH COMMENCEMENT AS JOINT & 50% COMMENCEMENT
5 YEARS CERTAIN AGE SURVIVOR ANNUITY AGE
- ------------------------------------------------------------------------------------------
Mr. Dietrich* $ 143,825 60 $ 134,375 60*
- ------------------------------------------------------------------------------------------
Mr. Chewens $ 173,583 62 $ 114,965 62
- ------------------------------------------------------------------------------------------
Mr. Raven $ 130,337 62 $ 108,860 62
- ------------------------------------------------------------------------------------------
Mr. Bentley $ 19,888 65 N/A N/A
- ------------------------------------------------------------------------------------------
* Pursuant to the terms of Mr. Dietrich's SERP agreement, when he attains age 66
and 2 months, an additional offset for Social Security is projected to reduce
his SERP benefit to $108,599 annually.
Employment Agreements
EXECUTIVE OFFICERS
We currently have employment agreements with Messrs. Dietrich, Chewens, Raven
and Bentley. Under Mr. Dietrich's agreement, he will serve 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 and NBT Bank. Mr.
Chewens' agreement provides that he will serve as a Senior Executive Vice
President and Chief Financial Officer of NBT and NBT Bank. Mr. Raven's
agreement provides that he will serve as an Executive Vice President of NBT and
as the President and Chief Executive Officer of our Pennstar Bank division. Mr.
Bentley's agreement provides that he will serve as Executive Vice President of
NBT and President of Retail Banking of NBT Bank. The termination of these
agreements will occur upon the earlier of the executive's death, disability,
discharge, resignation, or a given date. This date is currently January 1, 2010
for Mr. Dietrich, January 1, 2009 for Messrs. Chewens and Raven, and
14
January 1, 2007 for Mr. Bentley. The agreements for Messrs. Chewens and Raven
also provide for automatic one-year extensions occurring annually each January 1
and Mr. Bentley's agreement provides for automatic one-year extensions occurring
annually on each December 31. Mr. Dietrich's annual salary in 2005 was
$350,000, and will be $450,000 in 2006. Mr. Chewens' annual salary was
$271,600 in 2005 and will be $325,000 in 2006. Mr. Raven's and Mr. Bentley's
annual salaries were $252,700 and $180,000 respectively through July 2005, and
$275,000 and $210,000 respectively beginning August 2005.
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. Each executive is entitled to participate in the Performance Share
Plan commensurate with his title and salary grade. Mr. Forsythe, coinciding with
his retirement, received a payout of the fair market value of his vested 2004
shares from the Performance Share Plan. 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. Dietrich is
entitled to five weeks of paid vacation and Messrs. Chewens, Raven and Bentley
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. Dietrich, Chewens, Raven
and Bentley 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) the executive will continue to receive their base
salary in a manner consistent with our normal payroll practices for a certain
period. For Mr. Dietrich, these payments would be made until the latest of
January 1, 2010 or three years after termination of employment. For Messrs.
Chewens and Raven, the payments would continue until the later of the date on
which the current employment term expires or two years after termination of
employment, and for Mr. Bentley the payments would continue until the later of
the date on which the current employment term expires 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.
CHAIRMAN OF THE BOARD
We entered into an employment agreement with Mr. Daryl R. Forsythe on August 2,
2003, pursuant to which Mr. Forsythe was to serve as the Chairman, President and
Chief Executive Officer of the Company until December 31, 2004 and as Chairman
and Chief Executive Officer until December 31, 2005, at which time Mr. Forsythe
retired as an active employee. Pursuant to Mr. Forsythe's employment agreement,
commencing January 1, 2006 and continuing as long as Mr. Forsythe is a member of
the Board of Directors, Mr. Forsythe has agreed to serve as Chairman of the
Company. Commencing January 1, 2006, Mr. Forsythe, as Chairman, receives all
director compensation as described on page 9 of this Proxy Statement, except as
follows: Mr. Forsythe's annual stock retainer is $50,000 in the form of
unrestricted stock; Mr. Forsythe's annual stock option award pursuant to the NBT
Non-Employee Director, Divisional Director and Subsidiary Director Stock Option
Plan is 5,000 multiplied by the number of board meetings attended during the
year and divided by the number of meetings held; and Mr. Forsythe receives
$1,000 for each board and committee meeting attended except for Nominating &
Corporate Governance, Risk Management and the Compensation & Benefits committees
for which Mr. Forsythe attends as an invited guest and non-voting attendee. In
addition, pursuant to his employment agreement, Mr. Forsythe is entitled to be
reimbursed for dues and assessments (including initiation fees) incurred in
relation to his membership at mutually agreed upon country club. Prior to his
retirement as Chief Executive Officer, Mr. Forsythe's employment agreement
entitled him to the use of a Company-owned automobile. Effective January 31,
2006, ownership of the automobile in use by Mr. Forsythe passed to Mr. Forsythe.
15
CHANGE IN CONTROL AGREEMENTS
We currently have change in control agreements with each of Messrs. Dietrich,
Chewens, Raven and Mr. Bentley. The agreements for Messrs. Dietrich, Chewens,
Raven, and Bentley 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, Dietrich's, Chewens', Raven's, or Bentley'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, then (i) Mr. Bentley will be
entitled to receive 2.99 times his base salary for the calendar year in which
the change in control occurs and (ii) Messrs. Dietrich, Chewens 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. Each executive (except for Mr. Bentley) will also receive a gross-up
payment to compensate for the imposition of any excise taxes under section 4999
of the Internal Revenue Code. In the case of Mr. Bentley, if making the payment
to Mr. Bentley would trigger the federal excise tax imposed on excess parachute
payments, the amounts payable to Mr. Bentley will be reduced as necessary to
avoid the excise tax. 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 (12 months in the case of Mr. Bentley) of such change in control, or if
the executive (except for Mr. Bentley) 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 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, 2006, 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. NBT has entered into change in control agreements with other members
of its senior management team who are not executive officers.
OTHER EMPLOYMENT BENEFITS
In the event of disability, Messrs. Dietrich, Chewens, Raven and Bentley are
entitled to receive 100% of their regular wages for the first 21, 11, 9 and 4
weeks of disability respectively, and NYS Statutory Disability Benefits for the
maximum combined period of 26 weeks subject to any deduction for social security
or other offset amounts. In addition, after three months of disability, Mr.
Chewens will receive payments of $3,750 per month under an
16
individual supplemental insurance policy. Beginning after six months of
disability, Messrs. Dietrich, Chewens, Raven and Bentley will receive additional
payments, up to a maximum monthly benefit of $20,000, under a combination of the
group long-term disability program and executive carve-out. The annual cost of
Mr. Chewens individual policy is reflected in the Summary Compensation Table
above.
Effective January 1, 2004 Messrs. Dietrich, Chewens, Raven and Bentley each
received an individual universal life policy through the Executive Group Life
Insurance Carve Out, replacing the Master Group Plan coverage, for the death
benefit amount of $500,000, $464,000, $432,000 and $290,000 respectively. NBT
Bank pays the premium on the policy and the income to the executive is reflected
in the Summary Compensation Table above.
We 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 entered into a death benefits agreement, which was
amended most recently on January 28, 2002, and a split-dollar agreement 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. When Mr. Forsythe ceases to be Chairman of
the NBT Board, he is required under the death benefits agreement to transfer all
of his right, title, and interest in the policy to us. Under the split-dollar
agreement, NBT Bank took out a life insurance policy on Mr. Forsythe's life in
the amount of $1,500,000. The policy includes a business exchange feature that
allows NBT Bank, as the policy holder, to change the executive covered by the
policy with no loss in value. As owner of the policy, NBT Bank retains
discretion as to the disposition of the policy and it is NBT's intent to
transfer this policy to Mr. Dietrich. NBT Bank pays the premiums on the policies
under both the death benefits and split-dollar agreements, of which an
actuarially determined amount is attributable to the respective executive and is
reflected in the Summary Compensation Table.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In fiscal 2005, 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, and Joseph A.
Santangelo. No person who served as a member of the Compensation and Benefits
Committee during 2005 was a current or former officer or employee of NBT or any
of its subsidiaries or, except as disclosed below, engaged in certain
transactions required to be disclosed by regulations of the SEC. Additionally,
there were no compensation committee "interlocks" during 2005, which generally
means that no executive officer of NBT served as a director or member of the
compensation committee of another entity, one of whose executive officers served
as a director or member of the Compensation and Benefits Committee of NBT.
The law firm of Kowalczyk, Tolles, Deery & Hilton, LLP, of which Director Andrew
S. Kowalczyk, Jr., is a partner, provided legal services to us and NBT Bank in
2005. We paid $74,056 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 provided
legal services to us in 2005. The amounts paid to each of these entities were
less than the established reporting thresholds.
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
17
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 2005 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 2005 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 2005 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"),
stock option grants under our 1993 Stock Option Plan and long-term incentive
awards under our Performance Share Plan.
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
2005, 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 2005, the named executives,
including Mr. Dietrich 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 1993 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 2005 by the Compensation Committee in making the stock
option grants to Mr. Dietrich 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 2005, the named
executives (including Mr. Forsythe) received options to purchase an aggregate of
94,914 shares of common stock at exercise prices equal to the fair market value
on the respective date of grant. In January 2006, the CEO and named executives
(excluding Mr. Forsythe) received options to purchase an aggregate of 80,000
shares of common stock at exercise prices equal to the fair market value on the
respective date of grant.
18
PERFORMANCE SHARE PLAN. The NBT Bancorp Inc. Performance Share Plan was
established to provide certain NBT officers with long-term incentive
opportunities that are linked to the profitability of the Company's business and
increases in stockholder value. The Compensation Committee will determine the
performance period over which the achievement of applicable performance goals
will be measured, the persons who will participate during the period, the amount
of performance shares that may be awarded, and the basis for such awards. Each
performance share is the value equivalent of one share of NBT common stock. The
Performance Share Plan provides that shares of common stock are distributed two
years (or such other period previously established by the Committee) following
the end of the applicable performance period, provided the participant is still
employed by the Company. After performance shares have become earned, but
before vesting of the underlying common stock, the participants shall generally
have the rights and privileges of a stockholder of the Company with respect to
the shares, including the right to vote and receive dividends. In the event the
participant is not employed on the vesting date, such shares will be forfeited
and available for future awards. The maximum number of shares that may be issued
to any participant with respect to any eligibility period is 50,000.
In January 2005, Messrs. Forsythe, Dietrich, Chewens, Raven and Bentley were
awarded 5,000, 5,000, 3,500, 3,500 and 500 performance shares, respectively.
For the performance share awards made in fiscal 2005, the Compensation Committee
established a one-year performance period ending December 31, 2005. The primary
performance measure selected by the Compensation Committee was cumulative
earnings per share. The minimum amount (5,000 shares for Messrs. Forsythe and
Dietrich, 3,500 shares for Messrs. Chewens and Raven and 500 shares for Mr.
Bentley) are earned if 100% of the targeted performance level is achieved. The
maximum amount (6,000 shares for Messrs. Forsythe and Dietrich, 4,200 shares for
Messrs. Chewens and Raven and 650 shares for Mr. Bentley) are earned if 106% of
the targeted performance level is achieved. For fiscal year 2005, 102% of the
targeted performance level was achieved and the following amounts were earned by
the executive officers: Mr. Forsythe, 5,250 shares with a value of $113,348; Mr.
Dietrich 5,250 shares with a value of $113,348; Mr. Chewens 3,675 shares with a
value of $79,343; Mr. Raven 3,675 shares with a value of $79,343; and Mr.
Bentley 550 shares with a value of $11,875. The values of these shares are
based on the closing market price of the Company's common stock on the NASDAQ
Stock Market of $21.59, on December 30, 2005. Vesting of the shares underlying
the 2005 performance shares will occur as of December 31, 2008 for Messrs.
Forsythe, Dietrich, Chewens, Raven and as of December 31, 2009 for Mr. Bentley,
provided that the executive is then employed by the Company. In the event of
the executive's death, disability or retirement, the termination of the
executive's employment by NBT or NBT Bank without cause (as defined in the plan)
or the termination of the executive's employment by the executive for good
reason (as defined in the plan), these shares will become immediately vested and
be distributed to the executive (or his beneficiary in the event of his death)
as soon as practicable. Commencing January 23, 2006, dividends are being paid
on the 2005 performance shares.
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 during 2005. Mr.
Dietrich, Mr. Chewens, and Mr. Raven were 100% vested, with Mr. Bentley 80%
vested at the end of 2005. 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
2006 of $15,000 and 2005 of $14,000), and that we will provide a matching
contribution of 100% of the first 3% of the employee's salary. 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. In February 2006, discretionary contributions of $637,563 (including
$21,000 for the named executives) were made for eligible participants for the
2005 plan year. These contributions were made in the form of Company stock.
Compensation taken into account under the Plan cannot exceed $220,000 for 2006,
and $210,000 for 2005. 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. Mr.
Forsythe's fiscal 2005 salary was $495,000, an increase of 10% compared to
$450,000 in 2004. As NBT's new Chief Executive Officer, Mr. Dietrich's salary
for fiscal year 2006 will be $450,000. 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
19
financial institutions. The Compensation Committee also sought the advice of
that consultant in connection with the grant of options in fiscal 2005. For the
fiscal year 2005, 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
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 & Hilton, LLP, of which Director Andrew
S. Kowalczyk, Jr., is a partner, provided legal services to us and NBT Bank in
2005. We paid $74,056 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 provided
legal services to us in 2005. The amounts paid to each of these entities were
less than the established reporting thresholds. Director Michael H. Hutcherson
is the president of The Colonial Agency, LLC, an insurance agency. During
fiscal 2005, we paid approximately $611,909 to The Colonial Agency for two
insurance policies, of which Colonial received approximately $30,595 as fees for
insurance brokerage services and the remainder of which was remitted to insurers
as insurance premiums.
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, 2000. 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.
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
20
[GRAPHIC OMITED]
RISK MANAGEMENT COMMITTEE REPORT
Our Risk Management Committee, which functions as our audit committee, is
comprised of seven 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 more than three audit committees. The
Risk Management Committee held four meetings during 2005. The meetings were
designed to facilitate and encourage private communication between the Risk
Management Committee, the internal auditors and our independent registered
public accounting firm, KPMG LLP.
Our Risk Management Committee acts under a written charter adopted and approved
by our Board, a copy of which is available on the NBT Bancorp website at
www.nbtbancorp.com/corporategov.html. The Risk Management Committee has
- ------------------------------------
performed the procedures specified in the charter regarding the preparation and
review of our consolidated financial statements as of and for the three years
ended December 31, 2005. 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 registered public accounting firm,
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.
21
On the basis of its review as specified in the 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, 2005 for
filing with the SEC.
MEMBERS OF THE RISK MANAGEMENT COMMITTEE:
Chairman: Joseph G. Nasser
Members: Patricia T. Civil (*)
William C. Gumble
Janet H. Ingraham
John C. Mitchell
Van Ness D. Robinson
Joseph A. Santangelo
(*)- 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.
NBT'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Risk Management Committee has appointed KPMG LLP as our independent
registered public accounting firm to audit our consolidated financial statements
for the fiscal year ending December 31, 2006. KPMG LLP has served as our
independent registered public accounting firm 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, 2005
and 2004, 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.
2005 2004
-------- ---------
Audit Fees $592,500 $ 764,000
Audit related fees (1) $ 24,000 $ 24,000
-------- ---------
Audit and Audit related fees $616,500 $ 788,000
Tax fees (2) $ 34,800 $ 91,520
All other fees $ 0 $ 0
-------- ---------
Total Fees $651,300 $ 879,520
======== =========
(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.
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.
AUDIT COMMITTEE PRE-APPROVAL REQUIREMENTS. The Risk Management Committee has
adopted a policy regarding the pre-approval of audit and permitted non-audit
services to be performed by KPMG. The Risk Management Committee will, on an
annual basis, consider and approve the provision of audit and non-audit services
by KPMG that are not prohibited by law. Thereafter, the Risk Management
Committee will, as necessary, consider and approve the provision of additional
audit and non-audit services by KPMG which are not encompassed by the Risk
Management Committee's annual pre-approval. All audit and non-audit services
performed by KPMG during fiscal 2005 were pre-approved pursuant to the
procedures outlined above and none of the engagements pre-approved by the
Committee during 2005 made use of the de minimis exception to pre-approval
contained in the applicable rules of the Securities and Exchange Commission.
22
PROPOSAL 3
APPROVAL OF THE NBT BANCORP INC. 2006 NON-EXECUTIVE RESTRICTED STOCK PLAN
This section provides a summary of the terms of the NBT Bancorp Inc. 2006
Non-Executive Restricted Stock Plan ("Restricted Stock Plan") and the proposal
to approve the Restricted Stock Plan.
The Board of Directors approved the Restricted Stock Plan on January 23, 2006,
subject to approval by the Company's stockholders at the Annual Meeting. We are
asking our stockholders to approve the Restricted Stock Plan as we believe that
approval of the Restricted Stock Plan is essential to our continued success.
The purpose of the Restricted Stock Plan is enhance our ability to attract,
retain and reward non-executive officer employees and to motivate such persons
to serve the Company and its subsidiaries and to expend maximum effort to
improve the business results and earnings of the Company, by providing to such
persons an opportunity to acquire or increase a direct proprietary interest in
the operations and future success of the Company.
The principal provisions of the Restricted Stock Plan are summarized below.
Such summary is not complete and is qualified in its entirety by the terms of
the Restricted Stock Plan. A copy of the Restricted Stock Plan is attached as
Appendix A and incorporated herein by reference.
- ----------
ADMINISTRATION. The Restricted Stock Plan is administered by the Board of
Directors. The Board of Directors may delegate the power to administer the
Restricted Stock Plan to the Compensation Committee of the Board of Directors.
The Board may also appoint a separate committee of the Board composed of one or
more of the Company's executive officers, provided that any such officer so
appointed is a member of the Board, who may grant awards under the Plan to
employees of the Company who are not officers of the Company. Any such awards
granted by the foregoing committee shall be consistent in amounts and terms with
guidelines that are established in advance by the Board or the Compensation
Committee. Subject to the terms of the Restricted Stock Plan, the Board of
Directors may select participants to receive awards, determine the terms and
conditions of the awards and interpret provisions of the plan.
PARTICIPATION. Participation in the Restricted Stock Plan is limited to
employees of the Company or any of its affiliates, excluding any employee who is
an executive officer and who is granted an award under the NBT Performance Share
Plan during the calendar year in which the grant date would otherwise occur. On
the Record Date there were approximately 1,356 employees of the Company and its
subsidiaries who were eligible to participate in the Restricted Stock Plan.
SHARES AVAILABLE UNDER THE RESTRICTED STOCK PLAN. 250,000 shares of Common
Stock will be authorized for issuance under the Restricted Stock Plan. Shares
issued pursuant to the Restricted Stock Plan may be authorized but unissued
shares of common stock or treasury shares.
AWARD DOCUMENT. Each grant of restricted stock or stock units will be evidenced
by an award document issued by the Company. In addition to the terms and
conditions defined in the Restricted Stock Plan, such documents may contain such
other terms and conditions, not inconsistent with the Restricted Stock Plan, as
the Board will prescribe. Such additional terms may vary among award documents.
RESTRICTED STOCK AND STOCK UNITS. The Restricted Stock Plan permits the
granting of restricted stock or stock units. The Board may, in its discretion,
establish a period of time (restricted period) applicable to the awards of
restricted stock or stock units. The Board may, in its sole discretion, at the
time of a grant of a restricted stock or stock unit, prescribe restrictions in
addition to or other than the expiration of the restricted period, including the
satisfaction of corporate or individual performance objectives, which may be
applicable to all or any portion of the restricted stock or stock units.
Neither restricted stock or stock units may be sold, transferred, assigned,
pledged or otherwise encumbered or disposed of during the restricted period or
prior to the satisfaction of any other restrictions prescribed by the Board.
Restricted stock will be registered in the name of the employee as soon as
reasonably practicable after the grant date. Restricted stock has all the
attributes of outstanding shares including the right to vote and to receive
dividends thereon. Holders of stock units do not have rights as stockholders.
The Board may provide in an award agreement evidencing a grant of stock units
that a holder shall be entitled to receive, upon the Company's payment of a cash
dividend on its outstanding stock, a cash payment for each stock unit held equal
to the per-share dividend
23
paid on the stock. Unless the Board otherwise provides in an award agreement,
upon termination of a grantee's service, any restricted stock or stock units
held by such grantee that have not vested, or with respect to which all
applicable restrictions and conditions have not lapsed, shall immediately be
deemed forfeited.
AMENDMENT AND TERMINATION OF THE RESTRICTED STOCK PLAN. The Board may amend,
suspend or terminate the Restricted Stock Plan as to any shares as to which
awards have not been made. Any amendment shall be contingent on approval of the
Company's stockholders to the extent stated by the Board, required by applicable
law or required by applicable stock exchange listing requirements. In addition,
an amendment will be contingent on approval of the Company's stockholders if the
amendment would (i) materially increase the benefits accruing to participants
under the plan, (ii) materially increase the aggregate number of shares of stock
that may be issued under the plan or (iii) materially modify the requirements as
to eligibility for participation in the plan. No amendment, suspension or
termination of the Restricted Stock Plan shall, without the consent of the
holder, alter or impair rights or obligations under any award theretofore
granted under the Restricted Stock Plan.
ADJUSTMENTS. In the event of any change in the outstanding common stock by
reason of a stock dividend, recapitalization, reclassification, stock split or
other increase or decrease in such shares effected without receipt of
consideration by the Company, the number and kind of shares subject to any
outstanding awards of restricted stock or stock units shall be adjusted
proportionately by the Company.
TAX MATTERS. The grant of restricted stock or stock units will not be a taxable
event if the shares are subject to substantial risk of forfeiture, unless the
recipient makes a special tax election under Section 83(b) of the Internal
Revenue Code within 30 days after the grant. Upon the vesting of restricted
stock or stock units (assuming no Section 83(b) election), the grantee will
realize ordinary income equal to the value of the restricted stock or stock
units, as applicable, that become vested and the Company will generally be
entitled to a deduction for tax purposes in the same amount, except as limited
by Section 162(m) of the Internal Revenue Code, if the recipient's annual
compensation exceeds $1 million. If the grantee makes a Section 83(b) election,
he will realize ordinary income as of the grant date in an amount equal to the
value of the restricted stock or stock units, as applicable, at that time and
the Company generally will be entitled to a deduction in a like amount. A
grantee who makes a Section 83(b) election will not be entitled to any tax
deduction if he subsequently forfeits the shares.
NEW PLAN BENEFITS. Participation in the Restricted Stock Plan is limited to
employees of the Company or any of its affiliates, excluding any employee who is
an executive officer and who is granted an award under the NBT Performance Share
Plan during the calendar year in which the grant date would otherwise occur. As
of the date of this proxy statement, there has been no determination by the
Board with respect to future awards of restricted stock or stock units, which
are discretionary in nature. Accordingly, the benefits or amounts that will be
received by or allocated to eligible participants, and that would have been
received by or allocated to the eligible participants if the Restricted Stock
Plan had been in effect during fiscal 2005, are not determinable.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
THE APPROVAL OF THE RESTRICTED STOCK PLAN.
EQUITY COMPENSATION PLAN INFORMATION
As of December 31, 2005, the following table summarizes the Company's equity
compensation plans:
Number of securities
remaining available for future
issuance under equity
A. Number of securities to be B. Weighted-average compensation plans
issued upon exercise of exercise price of (excluding securities
Plan Category exercise price of outstanding outstanding options reflected in column A.)
===================================================================================================================
Equity compensation plans
approved by stockholders 1,916,624 $ 18.79 2,195,302
Equity compensation plans not
approved by stockholders None None None
24
OTHER MATTERS
STOCKHOLDER PROPOSALS FOR THE 2007 ANNUAL MEETING
SHAREHOLDER PROPOSALS FOR INCLUSION IN NEXT YEAR'S PROXY STATEMENT. Stockholder
proposals submitted pursuant to Rule 14a-8 of the Exchange Act for inclusion in
our proxy statement for the 2007 Annual Meeting of Stockholders must be received
by NBT by November 30, 2006. 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.
OTHER SHAREHOLDER PROPOSALS FOR PRESENTATION AT NEXT YEAR'S ANNUAL MEETING. The
Company's Bylaws establish an advance notice procedure with regard to any
proposal that is not submitted for inclusion in next year's proxy statement, but
is instead sought to be presented directly at the 2007 annual meeting. Written
notice of such stockholder proposal for the next annual meeting of our
stockholders must be received by our President at our principal executive
offices not later than March 3, 2007 and must not have been received earlier
than February 1, 2007 in order to be considered timely, and must contain
specified information concerning the matters proposed to be brought before such
meeting and concerning the stockholder proposing such matter. If a shareholder
fails to meet these deadlines and fails to satisfy the requirements of Rule
14a-4 under the Securities Exchange Act of 1934, the Company may exercise
discretionary voting authority under proxies it solicits to vote on any such
proposal as it determines appropriate.
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.
25
APPENDIX A
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NBT BANCORP INC.
2006 NON-EXECUTIVE RESTRICTED STOCK PLAN
------------------------------------------------------------------
APPENDIX A
TABLE OF CONTENTS
PAGE
----
1. PURPOSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. ADMINISTRATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . 4
3.1. Board. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2. Committee. . . . . . . . . . . . . . . . . . . . . . . . . 4
3.3. Authority of Executive Officers to Grant Certain Awards. . 4
3.4. Terms of Awards. . . . . . . . . . . . . . . . . . . . . . 5
3.5. No Liability.. . . . . . . . . . . . . . . . . . . . . . . 5
3.6. Share Issuance/Book Entry. . . . . . . . . . . . . . . . . 5
4. STOCK SUBJECT TO THE PLAN. . . . . . . . . . . . . . . . . . . . . 5
5. EFFECTIVE DATE, DURATION AND AMENDMENTS. . . . . . . . . . . . . . 6
5.1. Effective Date.. . . . . . . . . . . . . . . . . . . . . . 6
5.2. Term.. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.3. Amendment and Termination of the Plan. . . . . . . . . . . 6
6. AWARD ELIGIBILITY AND LIMITATIONS. . . . . . . . . . . . . . . . . 6
7. AWARD AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . 6
TERMS AND CONDITIONS OF RESTRICTED STOCK AND
8. STOCK UNITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8.1. Grant of Restricted Stock or Stock Units.. . . . . . . . . 7
8.2. Restrictions.. . . . . . . . . . . . . . . . . . . . . . . 7
8.3. Restricted Stock Certificates. . . . . . . . . . . . . . . 7
8.4. Rights of Holders of Restricted Stock. . . . . . . . . . . 7
8.5. Rights of Holders of Stock Units.. . . . . . . . . . . . . 7
8.5.1. Voting and Dividend Rights.. . . . . . . . . . . . 7
8.5.2. Creditor's Rights. . . . . . . . . . . . . . . . . 8
8.6. Termination of Service.. . . . . . . . . . . . . . . . . . 8
8.7. Purchase of Restricted Stock.. . . . . . . . . . . . . . . 8
8.8. Delivery of Stock. . . . . . . . . . . . . . . . . . . . . 8
9. REQUIREMENTS OF LAW. . . . . . . . . . . . . . . . . . . . . . . . 8
9.1. General. . . . . . . . . . . . . . . . . . . . . . . . . . 8
9.2. Rule 16b-3.. . . . . . . . . . . . . . . . . . . . . . . . 9
10. EFFECT OF CHANGES IN CAPITALIZATION. . . . . . . . . . . . . . . . 9
10.1. Changes in Stock.. . . . . . . . . . . . . . . . . . . . . 9
10.2. Reorganization in Which the Company Is the Surviving
Entity Which does not Constitute a Corporate Transaction. 10
10.3. Corporate Transaction. . . . . . . . . . . . . . . . . . .10
10.4. Adjustments. . . . . . . . . . . . . . . . . . . . . . . .10
10.5. No Limitations on Company. . . . . . . . . . . . . . . . .10
11. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . .10
11.1. Disclaimer of Rights . . . . . . . . . . . . . . . . . . .10
11.2. Nonexclusivity of the Plan . . . . . . . . . . . . . . . .11
11.3. Withholding Taxes, . . . . . . . . . . . . . . . . . . . .11
- i -
APPENDIX A
11.4. Captions . . . . . . . . . . . . . . . . . . . . . . . . .12
11.5. Other Provisions . . . . . . . . . . . . . . . . . . . . .12
11.6. Number and Gender. . . . . . . . . . . . . . . . . . . . .12
11.7. Severability . . . . . . . . . . . . . . . . . . . . . . .12
11.8. Governing Law. . . . . . . . . . . . . . . . . . . . . . .12
11.9. Section 409A of the Code . . . . . . . . . . . . . . . . .12
- ii -
APPENDIX A
NBT BANCORP INC.
2006 NON-EXECUTIVE RESTRICTED STOCK PLAN
NBT Bancorp Inc., a Delaware corporation (the "Company"), sets forth herein
the terms of its 2006 Non-Executive Restricted Stock Plan (the "Plan"), as
follows:
1. PURPOSE
The Plan is intended to enhance the Company's and its Affiliates' (as
defined herein) ability to attract, retain and reward non-executive officer
employees and to motivate such persons to serve the Company and its Affiliates
and to expend maximum effort to improve the business results and earnings of the
Company, by providing to such persons an opportunity to acquire or increase a
direct proprietary interest in the operations and future success of the Company.
To this end, the Plan provides for the grant of restricted stock and stock
units.
2. DEFINITIONS
For purposes of interpreting the Plan and related documents (including
Award Agreements), the following definitions shall apply:
2.1 "AFFILIATE" means, with respect to the Company, any company or
other trade or business that controls, is controlled by or is under common
control with the Company within the meaning of Rule 405 of Regulation C under
the Securities Act, including, without limitation, any subsidiary.
2.2 "AWARD" means a grant of a Restricted Stock or Stock Units under
the Plan.
2.3 "AWARD AGREEMENT" means the written agreement between the Company
and a Grantee that evidences and sets out the terms and conditions of an Award.
2.4 "BOARD" means the Board of Directors of the Company.
2.5 "CAUSE" means, as determined by the Board and unless otherwise
provided in an applicable agreement with the Company or an Affiliate, (i) gross
negligence or willful misconduct in connection with the performance of duties;
(ii) conviction of a criminal offense (other than minor traffic offenses); or
(iii) material breach of any term of any employment, consulting or other
services, confidentiality, intellectual property or non-competition agreements,
if any, between the Service Provider and the Company or an Affiliate.
2.6 "CODE" means the Internal Revenue Code of 1986, as now in effect or
as hereafter amended.
2.7 "COMMITTEE" means the Compensation Committee of the Board.
APPENDIX A
2.8 "COMPANY" means NBT Bancorp Inc
2.9 "CORPORATE TRANSACTION" means:
(i) A change in control of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A as in effect on
the date hereof pursuant to the Securities Exchange Act of 1934 (the
"Exchange Act"); provided that, without limitation, such a change in
control shall be deemed to have occurred at such time as any Person
hereafter becomes the "Beneficial Owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 30% or more of the combined
voting power of the Company's Voting Securities; or
(ii) During any period of two consecutive years, individuals who at the
beginning of such period constitute the Board cease for any reason to
constitute at least a majority thereof unless the election, or the
nomination for election by the Company's stockholders, of each new director
was approved by a vote of at least two-thirds of the directors then still
in office who were directors at the beginning of the period; or
(iii) There shall be consummated (x) any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation
or pursuant to which Voting Securities would be converted into cash,
securities, or other property, other than a merger of the Company in which
the holders of Voting Securities immediately prior to the merger have the
same proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (y) any sale, lease, exchange, or other
transfer (in one transaction or a series of related transactions) of all,
or substantially all of the assets of the Company, provided that any such
consolidation, merger, sale, lease, exchange or other transfer consummated
at the insistence of an appropriate banking regulatory agency shall not
constitute a change in control of the Company; or
(iv) Approval by the stockholders of the Company of any plan or proposal
for the liquidation or dissolution of the Company.
For the purposes of this definition, "Person" means and includes any
individual, corporation, partnership, group, association, or other
"person," as such term is used in section 14(d) of the Exchange Act, other
than the Company or any employee benefit plan(s) sponsored by the Company,
and "Voting Securities" means securities of the Company having the right to
vote at elections of members of the Board.
2.10 "DISABILITY" means the Grantee is unable to perform each of the
essential duties of such Grantee's position by reason of a medically
determinable physical or mental impairment which is potentially permanent in
character or which can be expected to last for a continuous period of not less
than 12 months.
- 2 -
APPENDIX A
2.11 "EFFECTIVE DATE" means January 23, 2006, the date the Plan is
approved by the Board.
2.12 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as now
in effect or as hereafter amended.
2.13 "FAIR MARKET VALUE" means the value of each share of Stock subject
to the Plan determined as follows: if on the Grant Date or other determination
date the shares of Stock are listed on an established national or regional stock
exchange, are admitted to quotation on the National Association of Securities
Dealers Automated Quotation System, or are publicly traded on an established
securities market, the Fair Market Value of the shares shall be the average
price between the high and the low sale price of the shares on such exchange or
in such market on the trading day immediately preceding the Grant Date or, if no
sale of the shares is reported for such trading day, on the next preceding day
on which any sale shall have been reported. If the shares are not listed on
such an exchange, quoted on such system or traded on such a market, Fair Market
Value shall be determined by the Board in good faith.
2.14 "GRANT DATE" means, as determined by the Board, the latest to
occur of (i) the date as of which the Board approves an Award, (ii) the date on
which the recipient of an Award first becomes eligible to receive an Award under
SECTION 6 hereof, or (iii) such other date as may be specified by the Board.
2.15 "GRANTEE" means a person who receives or holds an Award under the
Plan.
2.16 "PLAN" means this NBT Bancorp Inc. 2006 Non-Executive Restricted
Stock Plan.
2.17 "PURCHASE PRICE" means the purchase price for each share of Stock
pursuant to a grant of Restricted Stock.
2.18 "RESTRICTED STOCK" means shares of Stock, awarded to a Grantee
pursuant to SECTION 8 hereof.
2.19 "SERVICE" means service as a Service Provider to the Company or an
Affiliate. Unless otherwise stated in the applicable Award Agreement, a
Grantee's change in position or duties shall not result in interrupted or
terminated Service, so long as such Grantee continues to be a Service Provider
to the Company or an Affiliate. Subject to the preceding sentence, whether a
termination of Service shall have occurred for purposes of the Plan shall be
determined by the Board, which determination shall be final, binding and
conclusive.
2.20 "SERVICE PROVIDER" means an employee, officer or director of the
Company or an Affiliate, or a consultant or adviser currently providing services
to the Company or an Affiliate.
2.21 "STOCK" means the common stock, par value $.01 per share, of the
Company.
- 3 -
APPENDIX A
2.22 "STOCK UNIT" means a bookkeeping entry representing the equivalent
of one share of Stock awarded to a Grantee to be settled in Stock pursuant to
SECTION 8 hereof.
3. ADMINISTRATION OF THE PLAN
3.1. BOARD
The Board shall have such powers and authorities related to the
administration of the Plan as are consistent with the Company's certificate of
incorporation and by-laws and applicable law. The Board shall have full power
and authority to take all actions and to make all determinations required or
provided for under the Plan, any Award or any Award Agreement, and shall have
full power and authority to take all such other actions and make all such other
determinations not inconsistent with the specific terms and provisions of the
Plan that the Board deems to be necessary or appropriate to the administration
of the Plan, any Award or any Award Agreement. All such actions and
determinations shall be by the affirmative vote of a majority of the members of
the Board present at a meeting or by unanimous consent of the Board executed in
writing in accordance with the Company's certificate of incorporation and
by-laws and applicable law. The interpretation and construction by the Board of
any provision of the Plan, any Award or any Award Agreement shall be final,
binding and conclusive.
3.2. COMMITTEE
The Board from time to time may delegate to the Committee such powers and
authorities related to the administration and implementation of the Plan, as set
forth in SECTION 3.1 above and other applicable provisions, as the Board shall
determine, consistent with the certificate of incorporation and by-laws of the
Company and applicable law. In the event that the Plan, any Award or any Award
Agreement entered into hereunder provides for any action to be taken by or
determination to be made by the Board, such action may be taken or such
determination may be made by the Committee if the power and authority to do so
has been delegated to the Committee by the Board as provided for in this
Section. Unless otherwise expressly determined by the Board, any such action or
determination by the Committee shall be final, binding and conclusive. To the
extent permitted by law, the Committee may delegate its authority under the Plan
to a member of the Board.
3.3. AUTHORITY OF EXECUTIVE OFFICERS TO GRANT CERTAIN AWARDS
The Board may appoint a separate committee of the Board composed of one or
more of the Company's executive officers, provided, that, such officer is, or
each of the officers are, a member of the Board, who may grant Awards under the
Plan to eligible employees of the Company. Any such Awards granted by the
foregoing committee shall be consistent in amount and terms with guidelines that
are established in advance by the Board or Committee.
- 4 -
APPENDIX A
3.4. TERMS OF AWARDS
Subject to the other terms and conditions of the Plan, the Board shall have
full and final authority to:
(i) designate Grantees,
(ii) determine the type or types of Awards to be made to a Grantee,
(iii) determine the number of shares of Stock to be subject to an Award,
(iv) establish the terms and conditions of each Award,
(v) prescribe the form of each Award Agreement evidencing an Award, and
(vi) amend, modify, or supplement the terms of any outstanding Award.
Such authority specifically includes the authority, in order to effectuate the
purposes of the Plan but without amending the Plan, to modify Awards to eligible
individuals who are foreign nationals or are individuals who are employed
outside the United States to recognize differences in local law, tax policy, or
custom. Notwithstanding the foregoing, no amendment, modification or supplement
of any Award shall, without the consent of the Grantee, impair the Grantee's
rights under such Award.
3.5. NO LIABILITY
No member of the Board or of the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any Award or
Award Agreement.
3.6. SHARE ISSUANCE/BOOK ENTRY
Notwithstanding any provision of this Plan to the contrary, the issuance of
the Stock under the Plan may be evidenced in such a manner as the Board, in its
discretion, deems appropriate, including, without limitation, book-entry
registration or issuance of one or more Stock certificates.
4. STOCK SUBJECT TO THE PLAN
Subject to adjustment as provided in SECTION 10 hereof, the number of
shares of Stock available for issuance under the Plan shall be 250,000 shares.
Stock issued or to be issued under the Plan shall be authorized but unissued
shares or treasury shares. If any shares covered by an Award are not purchased
or are forfeited, or if an Award otherwise terminates without delivery of any
Stock subject thereto, then the number of shares of Stock counted against the
aggregate number of shares available under the Plan with respect to such Award
shall, to the extent of any such forfeiture or termination, again be available
for making Awards under the Plan. If pursuant to SECTION 11.3 the withholding
obligation of any Grantee with respect to an Award is satisfied by tendering
shares of Stock to the Company (by either actual delivery or by attestation) or
by withholding shares of Stock, the number of
- 5 -
APPENDIX A
shares of Stock issued net of the shares of Stock tendered or withheld shall be
deemed delivered for purposes of determining the maximum number of shares of
Stock available for delivery under the Plan.
5. EFFECTIVE DATE, DURATION AND AMENDMENTS
5.1. EFFECTIVE DATE
The Plan shall be effective as of the Effective Date, subject to approval
of the Plan by the Company's stockholders within one year of the Effective Date.
Upon approval of the Plan by the stockholders of the Company as set forth above,
all Awards made under the Plan on or after the Effective Date shall be fully
effective as if the stockholders of the Company had approved the Plan on the
Effective Date. If the stockholders fail to approve the Plan within one year of
the Effective Date, any Awards made hereunder shall be null and void and of no
effect.
5.2. TERM
The Plan shall terminate automatically ten (10) years after its adoption by
the Board and may be terminated on any earlier date as provided in SECTION 5.3.
5.3. AMENDMENT AND TERMINATION OF THE PLAN
The Board may, at any time and from time to time, amend, suspend, or
terminate the Plan as to any shares of Stock as to which Awards have not been
made. An amendment shall be contingent on approval of the Company's
stockholders to the extent stated by the Board, required by applicable law or
required by applicable stock exchange listing requirements. In addition, an
amendment will be contingent on approval of the Company's stockholders if the
amendment would: (i) materially increase the benefits accruing to participants
under the Plan, (ii) materially increase the aggregate number of shares of Stock
that may be issued under the Plan, or (iii) materially modify the requirements
as to eligibility for participation in the Plan. No Awards shall be made after
termination of the Plan. No amendment, suspension, or termination of the Plan
shall, without the consent of the Grantee, impair rights or obligations under
any Award theretofore awarded under the Plan.
6. AWARD ELIGIBILITY AND LIMITATIONS
Awards may be made under the Plan to any employee of the Company or of any
Affiliate, other than an employee who is an executive officer of the Company and
who is granted an award under the NBT Performance Share Plan during the calendar
year in which the Grant Date would otherwise occur.
7. AWARD AGREEMENT
Each Award granted pursuant to the Plan shall be evidenced by an Award
Agreement, in such form or forms as the Board shall from time to time determine.
Award Agreements
- 6 -
APPENDIX A
granted from time to time or at the same time need not contain similar
provisions but shall be consistent with the terms of the Plan.
8. TERMS AND CONDITIONS OF RESTRICTED STOCK AND STOCK UNITS
8.1. GRANT OF RESTRICTED STOCK OR STOCK UNITS
Awards of Restricted Stock or Stock Units may be made for no consideration
(other than par value of the shares which is deemed paid by Services already
rendered).
8.2. RESTRICTIONS
At the time a grant of Restricted Stock or Stock Units is made, the Board
may, in its sole discretion, establish a period of time (a "restricted period")
applicable to such Restricted Stock or Stock Units. Each Award of Restricted
Stock or Stock Units may be subject to a different restricted period. The Board
may, in its sole discretion, at the time a grant of Restricted Stock or Stock
Units is made, prescribe restrictions in addition to or other than the
expiration of the restricted period, including the satisfaction of corporate or
individual performance objectives, which may be applicable to all or any portion
of the Restricted Stock or Stock Units. Neither Restricted Stock nor Stock
Units may be sold, transferred, assigned, pledged or otherwise encumbered or
disposed of during the restricted period or prior to the satisfaction of any
other restrictions prescribed by the Board with respect to such Restricted Stock
or Stock Units.
8.3. RESTRICTED STOCK CERTIFICATES
The Company shall issue, in the name of each Grantee to whom Restricted
Stock has been granted, stock certificates representing the total number of
shares of Restricted Stock granted to the Grantee, as soon as reasonably
practicable after the Grant Date. The Board may provide in an Award Agreement
that either (i) the Secretary of the Company shall hold such certificates for
the Grantee's benefit until such time as the Restricted Stock is forfeited to
the Company or the restrictions lapse, or (ii) such certificates shall be
delivered to the Grantee, provided, however, that such certificates shall bear a
-------- -------
legend or legends that comply with the applicable securities laws and
regulations and makes appropriate reference to the restrictions imposed under
the Plan and the Award Agreement.
8.4. RIGHTS OF HOLDERS OF RESTRICTED STOCK
Unless the Board otherwise provides in an Award Agreement, holders of
Restricted Stock shall have the right to vote such Stock and the right to
receive any dividends declared or paid with respect to such Stock. All
distributions, if any, received by a Grantee with respect to Restricted Stock as
a result of any stock split, stock dividend, combination of shares, or other
similar transaction shall be subject to the restrictions applicable to the
original Grant.
- 7 -
APPENDIX A
8.5. RIGHTS OF HOLDERS OF STOCK UNITS
8.5.1. VOTING AND DIVIDEND RIGHTS
Holders of Stock Units shall have no rights as stockholders of the Company.
The Board may provide in an Award Agreement evidencing a grant of Stock Units
that the holder of such Stock Units shall be entitled to receive, upon the
Company's payment of a cash dividend on its outstanding Stock, a cash payment
for each Stock Unit held equal to the per-share dividend paid on the Stock.
8.5.2. CREDITOR'S RIGHTS
A holder of Stock Units shall have no rights other than those of a general
creditor of the Company. Stock Units represent an unfunded and unsecured
obligation of the Company, subject to the terms and conditions of the applicable
Award Agreement.
8.6. TERMINATION OF SERVICE
Unless the Board otherwise provides in an Award Agreement or in writing
after the Award Agreement is issued, upon the termination of a Grantee's
Service, any Restricted Stock or Stock Units held by such Grantee that have not
vested, or with respect to which all applicable restrictions and conditions have
not lapsed, shall immediately be deemed forfeited. Upon forfeiture of
Restricted Stock or Stock Units, the Grantee shall have no further rights with
respect to such Award, including but not limited to any right to vote Restricted
Stock or any right to receive dividends with respect to shares of Restricted
Stock or Stock Units.
8.7. PURCHASE OF RESTRICTED STOCK
The Grantee shall be required, to the extent required by applicable law, to
purchase the Restricted Stock from the Company at a Purchase Price equal to the
greater of (i) the aggregate par value of the shares of Stock represented by
such Restricted Stock or (ii) the Purchase Price, if any, specified in the Award
Agreement relating to such Restricted Stock. The Purchase Price shall be
payable in cash or cash equivalents, or, in the discretion of the Board, in
consideration for past Services rendered to the Company or an Affiliate.
8.8. DELIVERY OF STOCK
Upon the expiration or termination of any restricted period and the
satisfaction of any other conditions prescribed by the Board, the restrictions
applicable to shares of Restricted Stock or Stock Units shall lapse, and, unless
otherwise provided in the Award Agreement, a stock certificate for such shares
shall be delivered, free of all such restrictions, to the Grantee or the
Grantee's beneficiary or estate, as the case may be. Neither the Grantee, nor
the Grantee's beneficiary or estate, shall have any further rights with regard
to a Stock Unit once the share of Stock represented by the Stock Unit has been
delivered.
9. REQUIREMENTS OF LAW
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APPENDIX A
9.1. GENERAL
The Company shall not be required to sell or issue any shares of Stock
under any Award if the sale or issuance of such shares would constitute a
violation by the Grantee or the Company of any provision of any law or
regulation of any governmental authority, including without limitation any
federal or state securities laws or regulations. If at any time the Company
shall determine, in its discretion, that the listing, registration or
qualification of any shares subject to an Award upon any securities exchange or
under any governmental regulatory body is necessary or desirable as a condition
of, or in connection with, the issuance or purchase of shares hereunder, no
shares of Stock may be issued or sold to the Grantee pursuant to such Award
unless such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the Company,
and any delay caused thereby shall in no way affect the date of termination of
the Award. Specifically, in connection with the Securities Act, upon the
delivery of any shares of Stock underlying an Award, unless a registration
statement under such Act is in effect with respect to the shares of Stock
covered by such Award, the Company shall not be required to sell or issue such
shares unless the Board has received evidence satisfactory to it that the
Grantee may acquire such shares pursuant to an exemption from registration under
the Securities Act. Any determination in this connection by the Board shall be
final, binding, and conclusive. The Company may, but shall in no event be
obligated to, register any securities covered hereby pursuant to the Securities
Act.
9.2. RULE 16B-3
During any time when the Company has a class of equity security registered
under Section 12 of the Exchange Act, it is the intent of the Company that
Awards pursuant to the Plan will qualify for the exemption provided by Rule
16b-3 under the Exchange Act. To the extent that any provision of the Plan or
action by the Board does not comply with the requirements of Rule 16b-3, it
shall be deemed inoperative to the extent permitted by law and deemed advisable
by the Board, and shall not affect the validity of the Plan. In the event that
Rule 16b-3 is revised or replaced, the Board may exercise its discretion to
modify this Plan in any respect necessary to satisfy the requirements of, or to
take advantage of any features of, the revised exemption or its replacement.
10. EFFECT OF CHANGES IN CAPITALIZATION
10.1. CHANGES IN STOCK
If the number of outstanding shares of Stock is increased or decreased or
the shares of Stock are changed into or exchanged for a different number or kind
of shares or other securities of the Company on account of any recapitalization,
reclassification, stock split, reverse split, combination of shares, exchange of
shares, stock dividend or other distribution payable in capital stock, or other
increase or decrease in such shares effected without receipt of consideration by
the Company occurring after the Effective Date, the number and kinds of shares
for which grants of Awards may be made under the Plan shall be adjusted
proportionately and accordingly by the Company. In addition, the number and
kind of shares for which Awards are outstanding shall be adjusted
proportionately and accordingly so that the proportionate interest of the
Grantee immediately following such event shall, to the extent practicable, be
the same as immediately before such event. The conversion of any
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APPENDIX A
convertible securities of the Company shall not be treated as an increase in
shares effected without receipt of consideration. Notwithstanding the
foregoing, in the event of any distribution to the Company's stockholders of
securities of any other entity or other assets without receipt of consideration
by the Company, the Company may, in such manner as the Company deems
appropriate, adjust the number and kind of shares subject to outstanding Awards
to reflect such distribution.
10.2. REORGANIZATION IN WHICH THE COMPANY IS THE SURVIVING ENTITY WHICH
DOES NOT CONSTITUTE A CORPORATE TRANSACTION
Subject to SECTION 10.3 hereof, if the Company shall be the surviving
entity in any reorganization, merger, or consolidation of the Company with one
or more other entities which does not constitute a Corporate Transaction, Stock
Units shall be adjusted so as to apply to the securities that a holder of the
number of shares of Stock subject to the Stock Units would have been entitled to
receive immediately following such transaction.
10.3. CORPORATE TRANSACTION
Upon the occurrence of a Corporate Transaction, all outstanding shares
of Restricted Stock shall be deemed to have vested, and all Stock Units shall be
deemed to have vested and the shares of Stock subject thereto shall be
delivered. Notwithstanding the foregoing, in the event that an Award of Stock
Units is nonqualified deferred compensation within the meaning of, and subject
to, Code Section 409A, delivery of the shares of Stock subject to such Award
shall be made upon the Corporate Transaction only if such transaction also
constitutes a change in control event within the meaning of Code Section 409A.
10.4. ADJUSTMENTS
Adjustments under this SECTION 10 related to shares of Stock or securities
of the Company shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. No fractional shares or other
securities shall be issued pursuant to any such adjustment, and any fractions
resulting from any such adjustment shall be eliminated in each case by rounding
downward to the nearest whole share. The Board may provide in the Award
Agreements at the time of grant, or any time thereafter with the consent of the
Grantee, for different provisions to apply to an Award in place of those
described in SECTIONS 10.1, 10.2 and 10.3.
10.5. NO LIMITATIONS ON COMPANY
The making of Awards pursuant to the Plan shall not affect or limit in any
way the right or power of the Company to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure or to merge,
consolidate, dissolve, or liquidate, or to sell or transfer all or any part of
its business or assets.
- 10 -
APPENDIX A
11. GENERAL PROVISIONS
11.1. DISCLAIMER OF RIGHTS
No provision in the Plan or in any Award or Award Agreement shall be
construed to confer upon any individual the right to remain in the employ or
service of the Company or any Affiliate, or to interfere in any way with any
contractual or other right or authority of the Company either to increase or
decrease the compensation or other payments to any individual at any time, or to
terminate any employment or other relationship between any individual and the
Company. In addition, notwithstanding anything contained in the Plan to the
contrary, unless otherwise stated in the applicable Award Agreement, no Award
granted under the Plan shall be affected by any change of duties or position of
the Grantee, so long as such Grantee continues to be a director, officer,
consultant or employee of the Company or an Affiliate. The obligation of the
Company to pay any benefits pursuant to this Plan shall be interpreted as a
contractual obligation to pay only those amounts described herein, in the manner
and under the conditions prescribed herein. The Plan shall in no way be
interpreted to require the Company to transfer any amounts to a third party
trustee or otherwise hold any amounts in trust or escrow for payment to any
Grantee or beneficiary under the terms of the Plan.
11.2. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan nor the submission of the Plan to the
stockholders of the Company for approval shall be construed as creating any
limitations upon the right and authority of the Board to adopt such other
incentive compensation arrangements (which arrangements may be applicable either
generally to a class or classes of individuals or specifically to a particular
individual or particular individuals) as the Board in its discretion determines
desirable.
11.3. WITHHOLDING TAXES
The Company or an Affiliate, as the case may be, shall have the right to
deduct from payments of any kind otherwise due to a Grantee the minimum
statutory amount of any federal, state, or local taxes of any kind required by
law to be withheld with respect to the vesting of or other lapse of restrictions
applicable to an Award or upon the issuance of any shares of Stock pursuant to
an Award. At the time of such vesting, lapse, or exercise, the Grantee shall
pay to the Company or the Affiliate, as the case may be, any amount that the
Company or the Affiliate may reasonably determine to be necessary to satisfy
such withholding obligation. Subject to the prior approval of the Company or
the Affiliate, which may be withheld by the Company or the Affiliate, as the
case may be, in its sole discretion, the Grantee may elect to satisfy such
obligations, in whole or in part, (i) by causing the Company or the Affiliate to
withhold shares of Stock otherwise issuable to the Grantee or (ii) by delivering
to the Company or the Affiliate shares of Stock already owned by the Grantee.
The shares of Stock so delivered or withheld shall have an aggregate Fair Market
Value equal to such withholding obligations. The Fair Market Value of the
shares of Stock used to satisfy such withholding obligation shall be determined
by the Company or the Affiliate as of the date that the amount of tax to be
withheld is to be determined. A Grantee who has made an election pursuant to
this SECTION 11.3 may satisfy his or her withholding obligation only with shares
of Stock that are not subject to any repurchase, forfeiture,
- 11 -
APPENDIX A
unfulfilled vesting, or other similar requirements. The maximum number of
shares of Stock that may be withheld from any Award to satisfy any federal,
state or local tax withholding requirements upon the exercise, vesting, lapse of
restrictions applicable to such Award or payment of shares pursuant to such
Award, as applicable, cannot exceed such number of shares having a Fair Market
Value equal to the minimum statutory amount required by the Company to be
withheld and paid to any such federal, state or local taxing authority with
respect to such exercise, vesting, lapse of restrictions or payment of shares.
11.4. CAPTIONS
The use of captions in this Plan or any Award Agreement is for the
convenience of reference only and shall not affect the meaning of any provision
of the Plan or such Award Agreement.
11.5. OTHER PROVISIONS
Each Award granted under the Plan may contain such other terms and
conditions not inconsistent with the Plan as may be determined by the Board, in
its sole discretion.
11.6. NUMBER AND GENDER
With respect to words used in this Plan, the singular form shall include
the plural form, the masculine gender shall include the feminine gender, etc.,
as the context requires.
11.7. SEVERABILITY
If any provision of the Plan or any Award Agreement shall be determined to
be illegal or unenforceable by any court of law in any jurisdiction, the
remaining provisions hereof and thereof shall be severable and enforceable in
accordance with their terms, and all provisions shall remain enforceable in any
other jurisdiction.
11.8. GOVERNING LAW
The validity and construction of this Plan and the instruments evidencing
the Awards hereunder shall be governed by the laws of the State of New York,
other than any conflicts or choice of law rule or principle that might otherwise
refer construction or interpretation of this Plan and the instruments evidencing
the Awards granted hereunder to the substantive laws of any other jurisdiction.
11.9. SECTION 409A OF THE CODE
The Board intends to comply with Section 409A of the Code ("Section 409A"),
or an exemption to Section 409A, with regard to Awards hereunder that constitute
nonqualified deferred compensation within the meaning of Section 409A. To the
extent that the Board determines that a Grantee would be subject to the
additional 20% tax imposed on certain nonqualified deferred compensation plans
pursuant to Section 409A as a result of any provision of any Award granted under
this Plan, such provision shall be deemed amended to the minimum extent
necessary to avoid application of such additional tax. The nature of any such
amendment shall be determined by the Board.
* * *
- 12 -
NBT BANCORP INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints J. Carl Barbic 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 2,
2006 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 following proposals 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 PROPOSALS LISTED BELOW. THE
UNDERSIGNED STOCKHOLDER HEREBY REVOKES ANY PROXY OR PROXIES HERETOFORE GIVEN.
1. To fix the number of directors at fifteen (Proposal 1).
[_] FOR [_] AGAINST [_] ABSTAIN
2. To elect the five director nominees listed below (Proposal 2):
[_] FOR ALL NOMINEES [_] WITHHOLD FROM ALL NOMINEES
Martin A. Dietrich John C. Mitchell Joseph G. Nasser
Michael H. Hutcherson Michael M. Murphy
IF YOU DO NOT WISH YOUR SHARES VOTED FOR A PARTICULAR NOMINEE, DRAW A LINE
THROUGH THAT PERSON'S NAME ABOVE.
3. To approve and adopt the 2006 NBT Bancorp Inc. Non-Executive Restricted
Stock Plan (Proposal 3).
[_] FOR [_] AGAINST [_] ABSTAIN
4. 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.
X Please mark your votes as in this example.
TO VOTE BY TELEPHONE (TOUCH TONE ONLY)
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Please call toll-free 1-800-690-6903 and follow the instructions. Have your
--------------
control number and this proxy card available when you call. The control number
is .
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TO VOTE VIA THE INTERNET
------------------------
You may vote electronically via the Internet at WWW. PROXYVOTE.COM. Please
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follow the instructions on the web site. Have your control number and this proxy
card available when you call. The control number is .
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THE DEADLINE FOR TELEPHONE AND INTERNET VOTING IS 11:59 P.M. ON MAY 1, 2006.
[_] Check here for address change and note change below
[_] Check here if you plan to attend the meeting
New address:
Date: Signature(s)
-----------------
Please sign here exactly as name(s) appear(s) on
the left. 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.