Exhibit 10.36.2

Cortland Bancorp

Non-Qualified Stock Option Agreement

 

Cortland Bancorp, an Ohio corporation, grants to
                                           (the “Optionee”), an option to
purchase the total number of shares of Cortland Bancorp common stock, stated in
the attached Notice of Grant effective
                                           , 20                  , at the price
specified in the Notice of Grant, subject in all respects to the terms,
definitions, and provisions of Cortland Bancorp’s 2015 Omnibus Equity Plan,
which is incorporated herein by reference.  Unless otherwise defined herein,
terms defined in the Omnibus Equity Plan have the same defined meanings herein.

 

1.Nature of the Option.  This Option does not qualify as an incentive stock
option under the Internal Revenue Code of 1986.

 

2.Exercise Price.  The exercise price for each share of common stock is stated
in the Notice of Grant and is not less than the fair market value per share of
the common stock on the date of grant.

 

3.Exercise of Option.  This Option is exercisable during its term in accordance
with the vesting schedule stated in the Notice of Grant and in accordance with
the terms of the Omnibus Equity Plan as follows:

 

(a)Right to Exercise.

 

(1)this Option may not be exercised for a fraction of a share.

 

(2)

in the case of the Optionee’s death or other termination of employment, the
exercisability of the Option is governed by sections 7 and 8 below, subject to
the limitations contained in subsection 3(a)(3).

 

(3)this Option may not be exercised after expiration of its term, as provided by
section 10 below.

 

(b)Method of Exercise.  This Option is exercisable by executing the Notice of
Exercise in the form attached hereto as Exhibit A, stating the Optionee’s
election to exercise the Option, the number of shares for which the Option is
exercised, and such other representations and agreements concerning the holder’s
investment intent as may be required by Cortland Bancorp under the provisions of
the Omnibus Equity Plan.  The written notice must be signed by the Optionee and
must be delivered by certified mail to the Plan Committee or the Plan
Committee’s designee.  The Notice of Exercise must be accompanied by payment of
the exercise price.  This Option will be deemed to be exercised upon receipt by
Cortland Bancorp of the Notice of Exercise accompanied by payment of the
exercise price in full.

 

No Shares will be issued for the exercise of an Option unless the issuance and
exercise comply with all relevant provisions of law and the requirements of any
stock exchange upon which Cortland Bancorp common stock may then be listed.  For
income tax purposes shares will be considered transferred to the Optionee on the
date the Option is exercised.

 

4.Optionee's Representations.  If this Option and the shares acquirable by
exercise of this Option are not registered under the Securities Act of 1933 when
this Option is exercised, the Optionee must, if required by Cortland Bancorp,
concurrently with the exercise of all or any portion of this Option deliver to
Cortland Bancorp an investment representation statement in the customary form, a
copy of which is available for Optionee’s review from Cortland Bancorp upon
request.  Optionee acknowledges and agrees that a certificate or certificates
representing shares acquired by exercise of an Option may bear a restrictive
legend or legends noting the restrictions on transfer arising under applicable
securities laws and the Omnibus Equity Plan.

 

5.Method of Payment.  Payment of the exercise price may be by any of the
following methods or a combination thereof, at the election of the committee in
its sole discretion:

 

(a)cash or a cash equivalent,

(b)actual or constructive delivery of unrestricted shares of Cortland Bancorp
common stock,

(c)a combination of cash and shares of Cortland Bancorp common stock, or

(d)cashless exercise or net exercise.

 

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6.Restrictions on Exercise.  This Option may not be exercised before the Omnibus
Equity Plan is approved by Cortland Bancorp stockholders, or if the issuance of
shares upon such exercise or the method of payment of consideration for shares
would constitute a violation of any applicable federal or state securities or
other law or regulation, including any rule under Part 207 of Title 12 of the
Code of Federal Regulations (“Regulation G”) as promulgated by the Federal
Reserve Board.  As a condition to the exercise of this Option, Cortland Bancorp
may require the Optionee to make any representation and warranty to Cortland
Bancorp as Cortland Bancorp in its sole discretion considers necessary or
appropriate under applicable law.

 

7.Termination of Status as an Employee for Cause or Other Termination of
Employment.  If the Optionee is terminated for cause or if in Cortland Bancorp’s
judgment a basis for termination for cause exists, all rights under any
unexercised options will expire immediately and the unexercised options will be
immediately forfeited, regardless of whether the options are exercisable and
regardless of whether Optionee’s employment with Cortland Bancorp or a related
entity actually terminates.  “Termination for cause” includes one or more of the
following acts:

 

(a)an act of fraud, intentional misrepresentation, embezzlement,
misappropriation, or conversion by the Optionee of the assets or business
opportunities of Cortland Bancorp or a Related Entity,

 

(b)conviction of the Optionee of or plea by the Optionee of guilty or no contest
to a felony or a misdemeanor,

 

(c)violation by the Optionee of the written policies or procedures of Cortland
Bancorp or the Related Entity with which the Optionee is employed, including but
not limited to violation of Cortland Bancorp’s or the Related Entity’s code of
ethics,

 

(d)unless disclosure is inadvertent, disclosure to unauthorized persons of any
confidential information not in the public domain relating to Cortland Bancorp’s
or a Related Entity’s business, including all processes, inventions, trade
secrets, computer programs, technical data, drawings or designs, information
concerning pricing and pricing policies, marketing techniques, plans and
forecasts, new product information, information concerning methods and manner of
operations, and information relating to the identity and location of all past,
present, and prospective customers and suppliers,

 

(e)intentional breach of any contract with or violation of any legal obligation
owed to Cortland Bancorp or a Related Entity,

 

(f)dishonesty relating to the duties owed by the Optionee to Cortland Bancorp or
a Related Entity,

 

(g)the Optionee’s willful and continued refusal to substantially perform
assigned duties, other than refusal resulting from sickness or illness or while
suffering from an incapacity due to physical or mental illness, including a
condition that does or may constitute a Disability,

 

(h)the Optionee’s willful engagement in gross misconduct materially and
demonstrably injurious to Cortland Bancorp or a Related Entity,

 

(i)the Optionee’s breach of any term of the Omnibus Equity Plan or this
Agreement,

 

(j)intentional cooperation with a party attempting a Change in Control of
Cortland Bancorp, unless Cortland Bancorp’s board of directors approves or
ratifies the Optionee’s action before the Change in Control or unless the
Optionee’s cooperation is required by law, or

 

(k)any action that constitutes cause as defined in any written agreement between
the Optionee and Cortland Bancorp or a Related Entity.

 

If the Optionee is terminated for any other reason, all options that are
exercisable when termination occurs will be forfeited if not exercised before
the earlier of (x) the expiration date specified in this Agreement or (y) 90
days after the termination date.

 

Nothing in Section 7 permits exercise of an option after the option’s expiration
date.

 

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8.Death of Optionee.  The Optionee may name a beneficiary or beneficiaries to
receive or to exercise any vested options that are unpaid or unexercised at the
Optionee’s death.  Beneficiaries may be named contingently or successively.  A
beneficiary designation must be made on a form prescribed by the Plan Committee
and will not be effective until filed in writing with the Plan Committee.

9.Non-Transferability of Option.  This Option may not be transferred except by
will or by the laws of descent or distribution and may be exercised during the
Optionee’s lifetime by the Optionee only.  The terms of this Option are binding
upon the executors, administrators, heirs, successors, and assigns of the
Optionee.

 

10.Term of Option.  This Option may be exercised on or before the Expiration
Date stated in the Notice of Grant and may be exercised during the term solely
in accordance with the Omnibus Equity Plan and the terms of this Non-Qualified
Stock Option Agreement.

 

Cortland Bancorp

 

 

By:                                                            

 

Its:                                                            

 

The Optionee acknowledges and agrees that the vesting of shares according to the
Notice of Grant and section 3 of this Non-Qualified Stock Option Agreement is
earned solely by continuing employment or service with Cortland Bancorp.  The
Optionee further acknowledges and agrees that nothing in this Non-Qualified
Stock Option Agreement or in Cortland Bancorp’s 2015 Omnibus Equity Plan
incorporated herein by reference confers upon the Optionee any right to
continued employment by Cortland Bancorp, and nothing in this Non-Qualified
Stock Option Agreement or in Cortland Bancorp’s 2015 Omnibus Equity Plan
interferes with the Optionee’s right or Cortland Bancorp’s right to terminate
the Optionee’s employment at any time, with or without cause.  The Optionee
acknowledges receipt of a copy of the Omnibus Equity Plan and represents that
the Optionee is familiar with its terms and provisions.  The Optionee hereby
accepts this Option subject to all of those terms and provisions.  The Optionee
hereby agrees to accept as binding, conclusive, and final all decisions or
interpretations of the committee administering the Omnibus Equity Plan upon any
questions arising under the Omnibus Equity Plan.  The Optionee further agrees to
notify Cortland Bancorp of any change in the residence address below.

 

Dated:                               , 20           Optionee

 

                                             Print Name:

 

Residence Address:

 

                                      , Ohio             

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Notice of Grant

 

 

Under the terms of Cortland Bancorp’s 2015 Omnibus Equity Plan, Cortland Bancorp
hereby grants to                                                    an option to
purchase from Cortland Bancorp a total of                          shares of
Cortland Bancorp common stock at the exercise price per share set forth below:

Date of grant

 

Number of shares acquirable by exercise of option

 

Exercise price per share

 

Becomes vested and exercisable

 

Expires

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cortland Bancorp

 

 

By:                                                    

 

Its:                                                    

 

 

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Exhibit A

Notice of Exercise

 

To:Cortland Bancorp

 

Attn:Compensation Committee

 

Subject:Notice of Stock Option Exercise

 

The undersigned Optionee is exercising vested options to purchase shares of
Cortland Bancorp common stock under Cortland Bancorp’s 2015 Omnibus Equity Plan
as follows:

 

Option grant date

 

Number of shares being purchased

 

Option price

(per share)

 

Tax due *

(if applicable)

 

Total amount due

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Cortland Bancorp is required to withhold taxes when employees exercise an
NQSO.

 

 

I am paying the cost to exercise as specified below by method a, b, c, or d
(circle one below)

 

(a)Cash Payment.  Enclosed is my check #                   in the amount of
$                      .

 

(b)Surrender of Cortland Bancorp Shares.

 

(c)A Combination of Cash and Cortland Bancorp Shares.  As described below:

 

                                                                                  

 

(d)Cashless Exercise or Net Exercise.

 

I certify that if I transfer the stock purchased by this exercise I will not do
so in a manner that violates Cortland Bancorp’s policy on insider trading.

 

Signed by the Optionee this              day of
                                          , 20             .

 

 

Optionee’s Signature
                                                                                        

 

 

Print Name
                                                                                                        

 

 

Home Address
                                                                                                    

 

 

City, State, Zip Code
                                                                                          

 

 

Daytime Phone
                                                                                                    

 

 

Social Security Number