Filed by Bowne Pure Compliance





Exhibit 10.28




Addendum A

The Cortland Savings and Banking Company

Amended Split Dollar Agreement and Endorsement




This Amended Split Dollar Agreement and Endorsement (this “Agreement”) is entered
into as of this third day of December, 2008 by and
between The Cortland Savings and Banking Company, an Ohio-chartered commercial bank (the “Bank”),
and Craig M. Phythyon, Senior Vice President, Chief Investment Officer, and Treasurer of the Bank
(the “Executive”). This Agreement shall append the Split Dollar Policy Endorsement entered into on
even date herewith or as subsequently amended, by and between the aforementioned parties.



Whereas, to encourage the Executive to remain a Bank employee, the Bank and the
Executive entered into a Split Dollar Agreement and Endorsement effective as of December 15, 2003,
providing for division of the death proceeds of a life insurance policy or policies on the
Executive’s life,



Whereas, the Bank and the Executive are entering into an Amended Salary Continuation
Agreement effective as of the date hereof, providing for specified retirement benefits and amending
and restating in its entirety the Salary Continuation Agreement that also was entered into
effective as of December 15, 2003, and



Whereas, the Bank and the Executive intend that this Amended Split Dollar Agreement
and Endorsement shall be attached as Addendum A to the Amended Salary Continuation Agreement,
amending and restating in its entirety the Split Dollar Agreement and Endorsement.



Now Therefore, in consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:



Article 1

Definitions




Capitalized terms not otherwise defined in this Agreement are used herein as defined in the
Amended Salary Continuation Agreement dated as of the date of this Agreement between the Bank and
the Executive. The following terms shall have the meanings specified.



1.1 Administrator means the administrator described in Article 7.



1.2 Executive’s Interest means the benefit set forth in section 2.2.



1.3 Insured means the Executive.



1.4 Insurer means each life insurance carrier for which there is a Split Dollar Policy
Endorsement attached to this Agreement.


 


 









 





1.5 Net Death Proceeds means the total death proceeds of the Policy minus the cash surrender
value.



1.6 Policy means the specific life insurance policy or policies issued by the Insurer(s).



1.7 Salary Continuation Agreement means the Amended Salary Continuation Agreement dated as of
the date of this Agreement between the Bank and the Executive, as the same may hereafter be
amended.



1.8 Split Dollar Policy Endorsement means the form required by the Administrator or the
Insurer to indicate the Executive’s interest, if any, in a Policy on such Executive’s life.



Article 2

Policy Ownership/Interests




2.1 Bank Ownership. The Bank is the sole owner of the Policy and shall have the right to
exercise all incidents of ownership. The Bank shall be the beneficiary of the remaining death
proceeds of the Policy after the Executive’s interest is paid according to section 2.2 below.



2.2 Death Benefit. Provided the Executive’s death occurs both before the Executive’s
Separation from Service and before the Executive attains age 65, at the Executive’s death the
Executive’s beneficiary designated in accordance with the Split Dollar Policy Endorsement shall be
entitled to Policy proceeds in an amount equal to the lesser of (x) 100% of the Net Death Proceeds
or (y) $191,168 (the lesser of the amounts specified in clauses (x) and (y) being referred to in
this Agreement as the “Executive’s Interest”). The Executive’s Interest shall be extinguished at
the earlier of the date of the Executive’s Separation from Service or the date the Executive
attains age 65, and the Executive’s beneficiary shall be entitled to no benefits under this
Agreement for the Executive’s death occurring thereafter. The Executive shall have the right to
designate the beneficiary of the Executive’s Interest.



2.3 Option to Purchase. Upon termination of this Agreement, the Bank shall not sell,
surrender, or transfer ownership of the Policy without first giving the Executive or the
Executive’s transferee the option to purchase the Policy for a period of 60 days from written
notice of such intention. The purchase price shall be an amount equal to the cash surrender value
of the Policy.



2.4 Comparable Coverage. The Bank may replace the Policy with a comparable insurance policy
to cover the benefit provided under this Agreement, in which case the Bank and the Executive shall
execute a new Split-Dollar Policy Endorsement for the comparable insurance policy.



2.5 Internal Revenue Code Section 1035 Exchanges. The Executive recognizes and agrees that
the Bank may after this Agreement is adopted wish to exchange the Policy of life insurance on the
Executive’s life for another contract of life insurance insuring the Executive’s life. Provided
that the Policy is replaced (or intended to be replaced) with a comparable policy of life
insurance, the Executive agrees to provide medical information and cooperate with medical
insurance-related testing required by a prospective insurer for implementing the Policy or, if
necessary, for modifying or updating to a comparable insurer.


 


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Article 3

Premiums




3.1 Premium Payment. The Bank shall pay any premiums due on the Policy.



3.2 Economic Benefit. The Administrator shall annually determine the economic benefit
attributable to the Executive based on the life insurance premium factor for the Executive’s age
multiplied by the aggregate death benefit payable to the Executive’s beneficiary. The “life
insurance premium factor” is the minimum factor applicable under guidance published pursuant to
Treasury Reg. section 1.61-22(d)(3)(ii) or any subsequent authority.



3.3 Imputed Income. The Bank shall impute the economic benefit to the Executive on an annual
basis by adding the economic benefit to the Executive’s W-2, or if applicable, Form 1099.



Article 4

Assignment




The Executive may irrevocably assign without consideration all of the Executive’s interest in
the Policy and in this Agreement to any person, entity, or trust established by the Executive or
the Executive’s spouse. If the Executive transfers all of the Executive’s interest in the Policy,
all of the Executive’s interest in the Policy and in the Agreement shall be vested in the
Executive’s transferee, who shall be substituted as a party hereunder and the Executive shall have
no further interest in this Agreement.



Article 5

Insurer




The Insurer shall be bound by the terms of the Policy only. Any payments the Insurer makes or
actions it takes in accordance with the Policy shall fully discharge it from all claims, suits, and
demands of all entities or persons. The Insurer shall not be bound by or be deemed to have notice
of the provisions of this Agreement.



Article 6

Claims and Review Procedures




6.1 Claims Procedure. Any person or entity who has not received benefits under this Agreement
that he or she believes should be paid (the “claimant”) shall make a claim for benefits as follows
—




	 	6.1.1	 	Initiation — written claim. The claimant initiates a claim by submitting to the
Administrator a written claim for benefits. If the claim relates to the contents of a
notice received by the claimant, the claim must be made within 60 days after the notice was
received by the claimant. All other claims must be made within 180 days after the date of
the event that caused the claim to arise. The claim must state with particularity the
determination desired by the claimant.




 


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	 	6.1.2	 	Timing of Administrator response. The Administrator shall respond to the claimant
within 90 days after receiving the claim. If the Administrator determines that special
circumstances require additional time for processing the claim, the Administrator can extend
the response period by an additional 90 days by notifying the claimant in writing, before
the end of the initial 90-day period, that an additional period is required. The notice of
extension must set forth the special circumstances and the date by which the Administrator
expects to render its decision.
	 
	 	6.1.3	 	Notice of decision. If the Administrator denies part or all of the claim, the
Administrator shall notify the claimant in writing of the denial. The Administrator shall
write the notification in a manner calculated to be understood by the claimant. The
notification shall set forth —






	 	(a)	 	The specific reasons for the denial,
	 
	 	(b)	 	A reference to the specific provisions of this Agreement on which the
denial is based,
	 
	 	(c)	 	A description of any additional information or material necessary for
the claimant to perfect the claim and an explanation of why it is needed,
	 
	 	(d)	 	An explanation of the Agreement’s review procedures and the time limits
applicable to such procedures, and
	 
	 	(e)	 	A statement of the claimant’s right to bring a civil action under ERISA
section 502(a) after an adverse benefit determination on review.





6.2 Review Procedure. If the Administrator denies part or all of the claim, the claimant
shall have the opportunity for a full and fair review by the Administrator of the denial, as
follows —




	 	6.2.1	 	Initiation — written request. To initiate the review, the claimant must file with the
Administrator a written request for review within 60 days after receiving the
Administrator’s notice of denial.
	 
	 	6.2.2	 	Additional submissions — information access. The claimant shall then have the
opportunity to submit written comments, documents, records, and other information relating
to the claim. Upon request and free of charge, the Administrator shall also provide the
claimant reasonable access to and copies of all documents, records, and other information
relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.
	 
	 	6.2.3	 	Considerations on review. In considering the review, the Administrator shall take
into account all materials and information the claimant submits relating to the claim,
without regard to whether the information was submitted or considered in the initial benefit
determination.




 


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	 	6.2.4	 	Timing of Administrator response. The Administrator shall respond in writing to the
claimant within 60 days after receiving the request for review. If the Administrator
determines that special circumstances require additional time for processing the claim, the
Administrator can extend the response period by an additional 60 days by notifying the
claimant in writing before the end of the initial 60-day period that an additional period is
required. The notice of extension must set forth the special circumstances and the date by
which the Administrator expects to render its decision.
	 
	 	6.2.5	 	Notice of decision. The Administrator shall notify the claimant in writing of its
decision on review. The Administrator shall write the notification in a manner calculated
to be understood by the claimant. The notification shall set forth
—






	 	(a)	 	The specific reasons for the denial,
	 
	 	(b)	 	A reference to the specific provisions of the Agreement on which the
denial is based,
	 
	 	(c)	 	A statement that the claimant is entitled to receive, upon request and
free of charge, reasonable access to and copies of all documents,
records, and other information relevant (as defined in applicable ERISA regulations)
to the claimant’s claim for benefits, and
	 
	 	(d)	 	A statement of the claimant’s right to bring a civil action under ERISA
section 502(a).





Article 7

Administration of Agreement




7.1 Administrator Duties. This Agreement shall be administered by an Administrator, which
shall consist of the Board or such committee as the Board shall appoint. The Executive may not be
a member of the Administrator. The Administrator shall have the discretion and authority to (x)
make, amend, interpret, and enforce all appropriate rules and regulations for the administration of
this Agreement and (y) decide or resolve any and all questions that may arise, including
interpretations of this Agreement.



7.2 Agents. In the administration of this Agreement the Administrator may employ agents and
delegate to them such administrative duties as it sees fit (including acting through a duly
appointed representative) and may from time to time consult with counsel, who may be counsel to the
Bank.



7.3 Binding Effect of Decisions. The decision or action of the Administrator concerning any
question arising out of the administration, interpretation, and application of this Agreement and
the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all
persons having any interest in the Agreement.



7.4 Indemnity of Administrator. The Bank shall indemnify and hold harmless the members of the
Administrator against any and all claims, losses, damages, expenses, or liabilities arising from
any action or failure to act with respect to this Agreement, except in the case of willful
misconduct by the Administrator or any of its members.


 


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7.5 Information. To enable the Administrator to perform its functions, the Bank shall supply
full and timely information to the Administrator on all matters relating to the date and
circumstances of the retirement, death, or Separation from Service of the Executive, and such other
pertinent information as the Administrator may reasonably require.



Article 8

Miscellaneous




8.1 Amendment and Termination of Agreement. This Agreement may be amended or terminated
solely by a written agreement signed by the Bank and the Executive. However, this Agreement shall
terminate upon the first to occur of (v) surrender, lapse, or other termination of the Policy by
the Bank, or (w) distribution of the death benefit proceeds in accordance with section 2.2 above,
or (x) termination of the Salary Continuation Agreement under Article 5 of the Salary Continuation
Agreement, or (y) the Executive’s Separation from Service, or (z) the date the Executive attains
age 65.



8.2 Binding Effect. This Agreement shall bind the Executive and the Bank and their
beneficiaries, survivors, executors, administrators, and transferees, and any Policy beneficiary.



8.3 No Guarantee of Employment. This Agreement is not an employment policy or contract. It
does not give the Executive the right to remain an employee of the Bank nor does it interfere with
the Bank’s right to discharge the Executive. It also does not require the Executive to remain an
employee or interfere with the Executive’s right to terminate employment at any time.



8.4 Successors; Binding Agreement. By an assumption agreement in form and substance
satisfactory to the Executive, the Bank shall require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of the business or
assets of the Bank to expressly assume and agree to perform this Agreement in the same manner and
to the same extent that the Bank would be required to perform this Agreement had no succession
occurred.



8.5 Applicable Law. This Agreement and all rights hereunder shall be governed by and
construed according to the laws of the State of Ohio, except to the extent preempted by the laws of
the United States of America.



8.6 Entire Agreement. This Agreement and the Salary Continuation Agreement constitute the
entire agreement between the Bank and the Executive concerning the subject matter. No rights are
granted to the Executive under this Agreement other than those specifically set forth. This
Agreement amends and restates in its entirety the December 15, 2003 Split Dollar Agreement and
Endorsement.


 


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8.7 Severability. If any provision of this Agreement is held invalid, such invalidity shall
not affect any other provision of this Agreement not held invalid, and each such other provision
shall continue in full force and effect to the full extent consistent with law. If any provision
of this Agreement is held invalid in part, such invalidity shall not affect the remainder of the
provision not held invalid, and the remainder of the provision together with all other provisions
of this Agreement shall continue in full force and effect to the full extent consistent with law.



8.8 Headings. Caption headings and subheadings herein are included solely for convenience of
reference and shall not affect the meaning or interpretation of any provision of this Agreement.



8.9 Notices. All notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or
registered mail, return receipt requested, with postage prepaid, to the following addresses or to
such other address as either party may designate by like notice. If to the Bank, notice shall be
given to the board of directors, The Cortland Savings and Banking Company, 194 W. Main Street, P.O.
Box 98, Cortland, Ohio 44410-1466, or to such other or additional person or persons as the Bank
shall have designated to the Executive in writing. If to the Executive, notice shall be given to
the Executive at the Executive’s address appearing on the Bank’s records, or to such other or
additional person or persons as the Executive shall have designated to the Bank in writing.



In Witness Whereof, the Executive and a duly authorized representative of the Bank
have executed this Agreement as of the date first written above.



	 	 	 	 	 	 	 	 	 
	Executive:	 	Bank:	 	 
	 	 	The Cortland Savings and Banking Company	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Craig M. Phythyon	 	 	 	Lawrence A. Fantauzzi	 	 
	 

	 	 	 	Title:
	 	President and CEO	 	 







Agreement to Cooperate with Insurance Underwriting Incident to Internal Revenue
Code section 1035 Exchange



I acknowledge that I have read the Amended Split Dollar Agreement and Endorsement and agree to
be bound by its terms, particularly the covenant on my part set forth in section 2.5 of the Amended
Split Dollar Agreement and Endorsement to provide medical information and cooperate with medical
insurance-related testing required by an insurer to issue a comparable insurance policy to cover
the benefit provided under this Amended Split Dollar Agreement and Endorsement.



	 	 	 	 	 
	 

Witness

	 	 

Craig M. Phythyon
	 	 






 


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Split Dollar Policy Endorsement




Insured: Craig M. Phythyon

Insurer: Security Life of Denver

Policy No. 1567993




According to the terms of The Cortland Savings and Banking Company Amended Split Dollar
Agreement and Endorsement dated as of December 3, 2008,
the undersigned Owner requests that the above-referenced policy issued by the Insurer provide for
the following beneficiary designation and limited contract ownership rights to the Insured:



1. Upon the death of the Insured, proceeds shall be paid in one sum to the Owner, its
successors or assigns, to the extent of the Owner’s interest in the policy. It is hereby provided
that the Insurer may rely solely upon a statement from the Owner concerning the amount of proceeds
it is entitled to receive under this paragraph.



2. Any proceeds at the death of the Insured in excess of the amount paid under the provisions
of the preceding paragraph shall be paid in one sum to:



 



Primary Beneficiary, Relationship/Social Security Number




 



Contingent Beneficiary, Relationship/Social Security Number




The exclusive rights to change the beneficiary for the proceeds payable under this paragraph and to
assign all rights and interests granted under this paragraph are hereby granted to the Insured.
The sole signature of the Insured shall be sufficient to exercise the rights. The Owner retains
all contract rights not granted to the Insured under this paragraph.



3. It is agreed by the undersigned that this designation and limited assignment of rights
shall be subject in all respects to the contractual terms of the policy.



4. Any payment directed by the Owner under this endorsement shall be a full discharge of the
Insurer, and such discharge shall be binding on all parties claiming any interest under the policy.



The undersigned for the Owner is signing in a representative capacity and warrants that he or
she has the authority to bind the entity on whose behalf this document is executed.



Signed at                     , Ohio this                      day of                     , 200
                    .



	 	 	 	 	 	 	 
	Insured:	 	Owner:	 	 
	 	 	The Cortland Savings and Banking Company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

Craig M. Phythyon

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 







 


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