EXHIBIT 10.3
Supplemental Retirement Agreement between NBT Bancorp Inc., NBT
Bank, National Association and Daryl R. Forsythe made as of January 1,
1995 and as revised on April 28, 1998, and on January 1, 2000
SUPPLEMENTAL RETIREMENT AGREEMENT
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2000)
This sets forth the terms of an agreement for the payment of
supplemental retirement income ("Agreement") made as of January 1, 1995 (and as
revised on April 28, 1998, and on January 1, 2000) between (i) NBT BANCORP INC.,
a Delaware corporation and a registered bank holding company, and NBT BANK,
NATIONAL ASSOCIATION, a national banking association chartered under the laws of
the United States, both having offices located at Norwich, New York
(collectively, the "Bank"), and (ii) DARYL R. FORSYTHE, an individual residing
at 21 Ridgeland Road, Norwich, New York 13815, and who is a member of a select
group of management or highly compensated employees within the meaning of
section 201(2) of the Employee Retirement Income Security Act of 1974, as
amended ("Forsythe").
1. PURPOSE OF THE AGREEMENT. The purpose of this Agreement is to
provide Forsythe a supplemental retirement benefit in accordance with the terms
of this Agreement.
2. DEFINITIONS. For purposes of this Agreement, the following
words shall have the meaning indicated:
(a) ACTUARIAL EQUIVALENT. "Actuarial Equivalent" shall
have the same meaning the term "Actuarial Equivalent" has under Section 2.03 of
the Qualified Plan using the following actuarial assumptions:
MORTALITY: "Applicable Mortality Rate" as
such term is defined in Section 2.03c of the Qualified Plan.
INTEREST RATE: "Applicable Interest Rate" as such
term is defined in Section 2.09b of the Qualified Plan.
(b) BENEFICIARY. "Beneficiary" shall mean such living person
or living persons designated by Forsythe in accordance with
subparagraph 5(a) to receive benefits under this Agreement after his
death, or his personal or legal representative, all as herein described
and provided. If no Beneficiary is designated by Forsythe or if no
Beneficiary survives Forsythe, the Beneficiary shall be Forsythe's
estate.
(c) CAUSE. "Cause" shall mean Forsythe's:
(i) willful or gross misconduct with respect to the
business and affairs of the Bank, or with respect to any of
its affiliates for which Forsythe is assigned material
responsibilities or duties;
(ii) conviction of a felony (after the earlier of the
expiration of any applicable appeal period without perfection
of an appeal by Forsythe or the denial of any appeal as to
which no further appeal or review is available to Forsythe)
whether or not committed in the course of his employment by
the Bank;
(iii) willful neglect, failure, or refusal to carry
out his duties under the Employment Agreement between NBT
Bancorp Inc. and Forsythe dated as of January 1, 2000 (the
"Employment Agreement") in a reasonable manner (other than any
such failure resulting from disability or death or from
termination by Forsythe for Good Reason, as defined in the
Employment Agreement) after a written demand for substantial
performance is delivered to Forsythe that specifically
identifies the manner in which the Bank believes that Forsythe
has not substantially performed his duties and he has not
resumed substantial performance of his duties on a continuous
basis within thirty days of receiving such demand; or
(iv) breach of any representation or warranty in
section 6(a) of the Employment Agreement or of any agreement
contained in section 1, 4, 5, or 6(b) of the Employment
Agreement, which breach is material and adverse to the Bank or
any of its affiliates for which Forsythe is assigned material
responsibilities or duties.
(d) CHANGE OF CONTROL. "Change of Control" shall mean a Change
in Control as such term is defined in the Change of Control Agreement
between Forsythe and the Bank dated January 1, 2000 (a revision of the
April 28, 1998 and February 21, 1995 agreements).
(e) CODE. "Code" shall mean the Internal Revenue Code of
1986, as amended.
(f) DETERMINATION DATE. "Determination Date" shall
mean the earlier of (i) the date of termination of Forsythe's employment
with the Bank or (ii) the first day of the month following Forsythe's 65th
birthday.
(g) FINAL AVERAGE COMPENSATION. "Final Average Compensation"
shall have the same meaning the term "Final Average Compensation" has
under Section 2.27 of the Qualified Plan, except that in determining
the amount of Compensation (as defined in Section 2.14 of the Qualified
Plan) to be used in calculating Final Average Compensation under
Section 2.27 of the Qualified Plan, Compensation shall not be subject
to the compensation limitation of section 401(a)(17) of the Code.
(h) FULL-TIME EMPLOYEE. "Full-Time Employee" shall mean an
employee who works not less than 1,000 hours in a calendar year.
(i) OTHER RETIREMENT BENEFITS. "Other Retirement Benefits"
shall mean the sum of:
(i) The annual benefit payable to Forsythe from the
Qualified Plan, plus
-2-
(ii) The annual benefit that could be provided by (A)
Bank contributions (other than elective deferrals) made on
Forsythe's behalf under the NBT Bancorp Inc. 401(k) and
Employee Stock Ownership Plan, and (B) actual earnings on
contributions in (A), if such contributions and earnings were
converted to a benefit payable at age 65 in the same form as
the benefit paid under this Agreement, using the same
actuarial assumptions as are provided under subparagraph 2(a).
The amount of Other Retirement Benefits shall be determined by
an actuary selected by the Bank, with such determination to be made
without reduction for payment of benefits prior to any stated "normal
retirement date" and without regard to whether Forsythe is receiving
payment of such benefits on the Determination Date. To the extent
Forsythe receives a payment of Other Retirement Benefits described in
subparagraph 2(i)(ii) prior to the date the Supplemental Retirement
Benefit is determined pursuant to this Agreement, the total of such
Other Retirement Benefits shall be determined by including and assuming
that such amounts earned interest at a variable rate equal to the
one-year United States Treasury bill rate as reported in the New York
edition of The Wall Street Journal on the Determination Date from the
date received to the date Other Retirement Benefits are calculated for
purposes of this Agreement.
(j) PRESENT VALUE. "Present Value" shall mean the
present value of a benefit determined on the basis of the following actuarial
assumptions:
MORTALITY: "Applicable Mortality Rate" as such
term is defined in Section 2.03c of the Qualified Plan.
INTEREST RATE: "Applicable Interest Rate" as such
term is defined in Section 2.09b of the Qualified Plan.
(k) QUALIFIED PLAN. "Qualified Plan" shall mean the NBT
BANCORP Inc. Defined Benefit Pension Plan.
(l) SOCIAL SECURITY BENEFIT. "Social Security Benefit"
shall mean Forsythe's actual social security benefit at his Social Security
Retirement Age.
(m) SOCIAL SECURITY RETIREMENT AGE. "Social Security
Retirement Age" shall have the same meaning the term "Social Security
Retirement Age" has under Section 2.58 of the Qualified Plan.
(n) YEAR OF SERVICE. "Year of Service" shall mean a
calendar year in which Forsythe completes not less than 1,000 hours of
service.
-3-
3. AMOUNT OF SUPPLEMENTAL RETIREMENT BENEFIT.
(a) SUPPLEMENTAL RETIREMENT BENEFIT.
(i) AMOUNT PAYABLE ON AND AFTER AGE 65. If Forsythe
shall remain employed by the Bank until reaching his 65th
birthday, serving as a Full-Time Employee until such date, and
subject to the other terms and conditions of this Agreement,
the Bank shall pay Forsythe an annual "Supplemental Retirement
Benefit" determined as follows:
(A) ON AND AFTER AGE 65 BUT BEFORE SOCIAL
SECURITY RETIREMENT AGE. Forsythe shall be entitled
to a Supplemental Retirement Benefit on and after his
65th birthday but before his Social Security
Retirement Age in an amount equal to the excess of
(1) 75 percent of Forsythe's Final Average
Compensation, over (2) Forsythe's Other Retirement
Benefits, determined as of the Determination Date and
calculated in accordance with paragraph 2(i).
(B) ON AND AFTER SOCIAL SECURITY RETIREMENT
AGE. Forsythe shall be entitled to a Supplemental
Retirement Benefit on and after his Social Security
Retirement Age in an amount equal to the excess of
(1) 75 percent of Forsythe's Final Average
Compensation, over (2) the sum of (aa) Forsythe's
Other Retirement Benefits, determined as of the
Determination Date and calculated in accordance with
paragraph 2(i), plus (bb) Forsythe's Social Security
Benefit.
(ii) AMOUNT PAYABLE ON AND AFTER AGE 56 BUT BEFORE
AGE 60. If Forsythe shall remain employed by the Bank until
reaching his 56th birthday, serving as a Full-Time Employee
until such date and he continues to serve as a Full-Time
Employee until the date of his retirement, and he retires then
or thereafter but before reaching his 60th birthday, and
subject to the other terms and conditions of this Agreement,
the Bank shall pay Forsythe on his 60th birthday, pursuant to
subparagraph 4(b), or to his spouse or other Beneficiary,
pursuant and subject to subparagraph 6(c) if he has died
before his 60th birthday, a reduced early Supplemental
Retirement Benefit calculated in accordance with subparagraph
3(b) and the following schedule:
(A) If the date of Forsythe's retirement
shall be on or after his 56th birthday but before his
57th birthday, the Bank shall pay Forsythe 20% of the
reduced early Supplemental Retirement Benefit so
calculated;
(B) If the date of Forsythe's retirement
shall be on or after his 57th birthday but before his
58th birthday, the Bank shall pay Forsythe 40% of the
reduced early Supplemental Retirement Benefit so
calculated;
-4-
(C) If the date of Forsythe's retirement
shall be on or after his 58th birthday but before his
59th birthday, the Bank shall pay Forsythe 60% of the
reduced early Supplemental Retirement Benefit so
calculated; and
(D) If the date of Forsythe's retirement
shall be on or after his 59th birthday but before his
60th birthday, the Bank shall pay Forsythe 80% of the
reduced early Supplemental Retirement Benefit so
calculated.
(iii) AMOUNT PAYABLE ON AND AFTER AGE 60 BUT BEFORE
AGE 65. If Forsythe shall remain employed by the Bank until
reaching his 60th birthday, serving as a Full-Time Employee
until such date and he continues to serve as a Full-Time
Employee until the date of his retirement, and he retires then
or thereafter but before reaching his 65th birthday, and
subject to the other terms and conditions of this Agreement,
the Bank shall pay Forsythe a reduced early Supplemental
Retirement Benefit calculated in accordance with subparagraph
3(b).
(b) EARLY SUPPLEMENTAL RETIREMENT BENEFIT. If the Bank
commences payment of a reduced early Supplemental Retirement Benefit
before Forsythe reaches age 65, the amount paid shall equal the product
of (i) the Supplemental Retirement Benefit, as calculated under
subparagraph 3(a)(i)(A), times (ii) a fraction, the numerator of which
shall be the number of complete months of Forsythe's employment with
the Bank after January 1, 1995, and the denominator of which is 164
(the number of complete months of employment Forsythe would have had
after January 1, 1995 if he remained employed by the Bank until the
first day of the month following his 65th birthday).
4. TIME OF PAYMENT.
(a) Except as provided in subparagraph 4(b) (early retirement)
and paragraph 6 (payment on death), the Bank shall pay the Supplemental
Retirement Benefit commencing on the first day of the month following
Forsythe's attainment of age 65.
(b) Notwithstanding subparagraph 4(a), the Bank shall commence
payment of a reduced early Supplemental Retirement Benefit on the first
day of the month following Forsythe's Determination Date in connection
with early retirement after reaching age 60 and prior to the date of
his 65th birthday; provided that, if Forsythe shall retire prior to his
60th birthday as permitted in this Agreement, the Bank shall commence
payment of the reduced early Supplemental Retirement Benefit on the
first day of the month following Forsythe's 60th birthday.
5. FORM OF PAYMENT.
(a) The Supplemental Retirement Benefit described in paragraph
3 of this Agreement shall be paid as a straight life annuity, payable
-5-
in monthly installments, for Forsythe's life; provided, however, that
if Forsythe has no surviving spouse and dies before having received 60
monthly payments, such monthly payments shall be continued to his
Beneficiary until the total number of monthly payments to Forsythe and
his Beneficiary equal 60, whereupon all payments shall cease and the
Bank's obligation under this Agreement shall be deemed to have been
fully discharged. If Forsythe and his Beneficiary shall die before
having received a total of 60 monthly payments, an amount equal to the
Actuarial Equivalent of the balance of such monthly payments shall be
paid in a single sum to the estate of the survivor of Forsythe and his
Beneficiary. If Supplemental Retirement Benefits are payable in the
form described in this subparagraph 5(a), Forsythe shall designate in
writing, as his Beneficiary, any person or persons, primarily,
contingently or successively, to whom the Bank shall pay benefits
following Forsythe's death if Forsythe's death occurs before 60 monthly
payments have been made.
(b) Notwithstanding the form of payment described in
subparagraph 5(a), if Forsythe is married on the date payment of the
Supplemental Retirement Benefit commences, the benefit shall be paid as
a 50% joint and survivor annuity with Forsythe's spouse as the
Beneficiary. The 50% joint and survivor annuity shall be the Actuarial
Equivalent of the benefit described in subparagraph 5(a). If the
Supplemental Retirement Benefit is payable pursuant to this
subparagraph 5(b), but Forsythe's spouse fails to survive him, no
payments will be made pursuant to this Agreement following Forsythe's
death.
(c) Notwithstanding the foregoing provisions of this paragraph
5, the Bank, in its sole discretion, may accelerate the payment of all
or any portion of the Supplemental Retirement Benefit or the reduced
early Supplemental Retirement Benefit at any time. Any payment
accelerated in accordance with this subparagraph 5(c) shall be the
Actuarial Equivalent of the payment being accelerated.
(d) If payment of a reduced early Supplemental Retirement
Benefit commences pursuant to subparagraph 4(b), and payments are
accelerated pursuant to subparagraph 5(c), the reduction described in
subparagraph 3(b) shall be applied before any Actuarial Equivalent is
determined under this paragraph 5.
6. PAYMENTS UPON FORSYTHE'S DEATH.
(a) Except as provided in subparagraphs 6(b) and (c), if
Forsythe shall die before his 65th birthday, no payment shall be due
his estate under this Agreement.
(b) If Forsythe's death shall occur on or after his 60th
birthday, after he has retired but before payment of any Supplemental
Retirement Benefit has commenced, Forsythe's surviving spouse shall be
paid as a straight life annuity 50 percent of the Supplemental
Retirement Benefit for her life commencing within 30 days following
Forsythe's death, calculated in accordance with subparagraph 3(b). Such
-6-
payments shall be made in monthly installments, subject to the right of
the Bank to accelerate payment at any time in accordance with
subparagraph 5(c).
(c) If Forsythe elects early retirement pursuant to
subparagraph 3(a)(ii) or (iii) and he dies before payment of any
Supplemental Retirement Benefit has commenced, Forsythe's surviving
spouse shall be paid, in monthly installments, as a straight life
annuity, 50 percent of such Supplemental Retirement Benefit for her
life commencing within 30 days following Forsythe's death, subject to
the right of the Bank to accelerate such payments as provided in
subparagraph 5(c). However, if Forsythe's spouse fails to survive him,
the Bank shall pay to Forsythe's estate a lump sum benefit equal to 50
percent of the Present Value of Forsythe's Supplemental Retirement
Benefit.
(d) Except as otherwise provided in subparagraph 6(c), no
payments shall be made under this Agreement if Forsythe dies before
payment of any Supplemental Retirement Benefit begins and his spouse
fails to survive him.
(e) If Forsythe's death shall occur after payment of a
Supplemental Retirement Benefit has commenced, Forsythe surviving
spouse or other Beneficiaries shall receive payments under this
Agreement to the extent provided in paragraph 5.
7. FORFEITURE FOR CAUSE. Notwithstanding any other provision of
this Agreement, if Forsythe's employment with the Bank is terminated for Cause,
Forsythe and his spouse or other Beneficiaries shall forfeit all rights to any
payment under this Agreement.
8. POWERS. The Bank shall have such powers as may be necessary
to discharge its duties under this Agreement, including the power to interpret
and construe this Agreement and to determine all questions regarding employment,
disability status, service, earnings, income and such factual matters as birth
and marital status. The Bank's determinations hereunder shall be conclusive and
binding upon the parties hereto and all other persons having or claiming an
interest under this Agreement. The Bank shall have no power to add to, subtract
from, or modify any of the terms of this Agreement. The Bank's determinations
hereunder shall be entitled to deference upon review by any court, agency or
other entity empowered to review its decisions, and shall not be overturned or
set aside by any court, agency or other entity unless found to be arbitrary,
capricious or contrary to law.
9. CLAIMS PROCEDURE.
(a) Any claim for benefits by Forsythe, his spouse or other
Beneficiaries shall be made in writing to the Bank. In this paragraph,
Forsythe and his Beneficiaries are referred to as "claimants."
(b) If the Bank denies a claim in whole or in part, it shall
send the claimant a written notice of the denial within 90 days after
the date it receives a claim, unless it needs additional time to make
its decision. In that case, the Bank may authorize an extension of an
-7-
additional 90 days if it notifies the claimant of the extension within
the initial 90-day period. The extension notice shall state the reasons
for the extension and the expected decision date.
(c) A denial notice shall contain:
(i) The specific reason or reasons for the denial
of the claim;
(ii) Specific reference to pertinent Agreement
provisions upon which the denial is based;
(iii) A description of any additional material or
information necessary to perfect the claim, with an
explanation of why the material or information is necessary;
and
(iv) An explanation of the review procedures
provided below.
(d) Within 60 days after the claimant receives a denial
notice, he or she may file a request for review with the Bank. Any such
request must be made in writing.
(e) A claimant who timely requests review shall have the right
to review pertinent documents, to submit additional information or
written comments, and to be represented.
(f) The Bank shall send the claimant a written decision on any
request for review within 60 days after the date it receives a request
for review, unless an extension of time is needed, due to special
circumstances. In that case, the Bank may authorize an extension of an
additional 60 days, provided it notifies the claimant of the extension
within the initial 60-day period.
(g) The review decision shall contain:
(i) The specific reason or reasons for the decision;
and
(ii) Specific reference to the pertinent Agreement
provisions upon which the decision is based.
(h) If the Bank does not send the claimant a review decision
within the applicable time period, the claim shall be deemed denied on
review.
(i) The denial notice or, in the case of a timely review, the
review decision (including a deemed denial under subparagraph 9(h))
shall be the Bank's final decision.
-8-
10. ASSIGNMENT. Neither Forsythe nor his spouse or other Beneficiaries
may transfer his, her or their right to payments to which he, she or they are
entitled under this Agreement. Except insofar as may otherwise be required by
law, any Supplemental Retirement Benefit payable under this Agreement shall not
be subject in any manner to alienation by anticipation, sale, transfer,
assignment, pledge or encumbrance, nor subject to the debts, contracts, or
liabilities of Forsythe or his spouse or other Beneficiaries.
11. CONTINUED EMPLOYMENT. This Agreement shall not be
construed as conferring on Forsythe a right to continued employment with
the Bank.
12. FUNDING.
(a) The Supplemental Retirement Benefit at all times shall be
entirely unfunded, and no provision shall at any time be made with
respect to segregating any assets of the Bank for payments of any
benefits hereunder, except that in the event of a Change of Control,
the Bank, within five (5) days of such Change of Control, shall fund a
grantor trust within the meaning of section 671 of the Code with an
amount sufficient to cover all potential liabilities under this
Agreement.
(b) Neither Forsythe nor his spouse or other Beneficiaries
shall have any interest in any particular assets of the Bank by reason
of the right to receive a benefit under this Agreement. Forsythe and
his spouse or other Beneficiaries shall have only the rights of general
unsecured creditors of the Bank with respect to any rights under this
Agreement.
(c) Nothing contained in this Agreement shall constitute a
guarantee by the Bank or any entity or person that the assets of the
Bank will be sufficient to pay any benefit hereunder.
13. WITHHOLDING. Any payment made pursuant to this Agreement shall be
reduced by federal and state income, FICA or other employee payroll, withholding
or other similar taxes the Bank may be required to withhold. In addition, as the
Supplemental Retirement Benefit accrues during Forsythe's employment with the
Bank, the Bank may withhold from Forsythe's regular compensation from the Bank
any FICA or other employee payroll, withholding or other similar taxes the Bank
may be required to withhold.
14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon, and shall inure to the benefit of, the successors and assigns of the Bank.
15. APPLICABLE LAW. This Agreement shall be construed and
administered in accordance with the laws of the State of New York, except to the
extent preempted by federal law.
-9-
16. AMENDMENT. This Agreement may not be amended, modified or
otherwise altered except by written instrument executed by both parties.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding of the parties, and supersedes all prior agreements
or understanding (whether oral or written) between the parties, relating
to deferred compensation and/or supplemental retirement income.
The parties hereby execute this Agreement as follows:
NBT BANCORP INC.
By: /S/ EVERETT A. GILMOUR
Date: 1/1/2000 Its: CHAIRMAN
----------------------------------- ----------------
NBT BANK, NATIONAL ASSOCIATION
By:
Date: Its:
-----------------------------------
Date: 1/1/2000 /S/ DARYL R. FORSYTHE
----------------------------------- -----------------------------
DARYL R. FORSYTHE
-10-