M&T BANK CORP
EXHIBIT 10.16
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<TYPE>EX-10.16
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<FILENAME>ex10-16.txt
<DESCRIPTION>EXHIBIT 10.16
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                                                                   Exhibit 10.16






July 18, 2000

Mr. Robert J. Bennett
101 Marvelle Road
Fayetteville, New York  13066

Dear Mr. Bennett:

This letter agreement ("Letter Agreement") sets forth the terms and conditions
upon which you are resigning as Chairman of M&T Bank Corporation ("M&T") and
Vice Chairman of Manufacturers and Traders Trust Company ("M&T Bank"), effective
July 18, 2000. It also constitutes an amendment and supplement to the Employment
Agreement between you and M&T, dated as of April 1, 1998 (the "Employment
Agreement").

         1. RETIREMENT; CONTINUED SERVICE ON BOARDS. Upon execution of this
Letter Agreement you are hereby retiring as Chairman of M&T and Vice Chairman of
M&T Bank effective at the close of business on July 18, 2000. You agree,
however, to continue to serve at the pleasure of M&T (unless legally or
physically unable) on the Boards of Directors and Executive Committees of M&T
and M&T Bank (subject to the by-laws of M&T and M&T Bank) and as a member of the
Directors Advisory Council of the Syracuse Division of M&T Bank. You will be
entitled to receive your current base salary through July 18, 2000, payable in
accordance with M&T Bank's usual payroll practices. You will also be entitled to
a lump sum payment for your accrued but unused vacation.

         2. CONTINUED MEDICAL AND LIFE INSURANCE COVERAGE. Until you attain age
65, you will be entitled to continued medical and life insurance benefits on
terms and conditions that are at least substantially equivalent to those
provided to senior executive officers of M&T from time-to-time, except that you
will be required to directly pay your share of premium payments for medical
insurance coverage rather than paying such premiums through payroll deductions.
Upon and after attaining age 65, you will be entitled to such coverage as is
provided to retired employees of M&T under M&T's retiree medical and life
insurance plans.

         3. RETIREMENT BENEFITS. Upon your attainment of age 65, you will be
entitled to begin receiving from M&T (or one of its affiliates) an annual
retirement benefit (the "Retirement Benefit") for your life, equal to the
difference between (a) $300,000, and (b) the amount of any benefit payable to
you under any tax-qualified or nonqualified defined benefit pension or
retirement plans (collectively, the "Retirement Plans"), provided that, in
determining the amount of benefits payable to you under the Retirement

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Mr. Robert J. Bennett
July 18, 2000
Page 2

Plans, you will be deemed to have received benefit payment under each of the
Retirement Plans in the form of a 50% joint and survivor annuity for your life,
with your current spouse as the designated beneficiary. The amount of such joint
and survivor annuity payments shall be calculated using the actuarial
assumptions used under the applicable plan, or if such plan does not specify the
required actuarial assumptions, the actuarial assumptions used under the M&T
Bank Corporation Pension Plan. In the event of your death, whether before or
after attaining age 65, your current spouse, should she survive you, shall be
paid an annual benefit of 50% of the Retirement Benefit for her life. The
foregoing is intended to provide you with a total annual defined benefit
retirement payment of $300,000 and, in the event of your death, your current
surviving spouse with a total annual benefit of $150,000.

              4. VESTING OF STOCK OPTIONS. Upon the effective date of your
retirement on July 18, 2000, all outstanding employee stock options you hold
covering M&T common stock shall, to the extent not therefore vested and
exercisable, become fully vested and may be exercised in accordance with the
terms of the applicable option agreements relating to termination of employment
by reason of retirement.

              5. EMPLOYMENT AGREEMENT. The Employment Agreement shall remain in
effect, except upon your retirement on July 18, 2000, you will no longer be
employed by M&T or M&T Bank, and Section 2 (other than subsection 2 (c)) and
Sections 3 through 11 of the Employment Agreement shall no longer apply after
July 18, 2000, and shall have no legal force or effect notwithstanding anything
to the contrary in the Employment Agreement.

              6. This Letter Agreement may be executed by the parties hereto in
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.

              7. This Letter Agreement shall constitute a part of the Employment
Agreement.

If this Letter Agreement correctly sets forth our agreement on the subject
matter hereof, please sign and return to M&T the enclosed copy of this letter.

                                        Very truly yours,

ROBERT J. BENNETT                       M&T BANK CORPORATION

   /s/ Robert J. Bennett                By: /s/ Ray E. Logan
-----------------------------               --------------------------

                                        Title: Senior Vice President
                                               -----------------------


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