Document:

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                                                                   Exhibit 10.20

                    THE CORTLAND SAVINGS AND BANKING COMPANY
                      AMENDED SALARY CONTINUATION AGREEMENT

     THIS AMENDED SALARY CONTINUATION AGREEMENT (this "Agreement") is made and
entered into as of this _________ day of __________________, 2002, by and
between The Cortland Savings and Banking Company, an Ohio-chartered,
FDIC-insured member bank with its main offices in Cortland, Ohio (the "Bank")
and Marlene Lenio (the "Executive").

     WHEREAS, the Executive has contributed substantially to the success of the
Bank and its parent company, Cortland Bancorp, an Ohio corporation, and the Bank
desires that the Executive continue in its employ,

     WHEREAS, to encourage the Executive to remain an employee of the Bank, the
Bank is willing to provide salary continuation benefits to the Executive,
payable out of the Bank's general assets,

     WHEREAS, none of the conditions or events included in the definition of the
term "golden parachute payment" that is set forth in section 18(k)(4)(A)(ii) of
the Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal
Deposit Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)]
exists or, to the best knowledge of the Bank, is contemplated insofar as the
Bank is concerned,

     WHEREAS, the Bank and the Executive entered into a Salary Continuation
Agreement dated as of March 1, 2001, providing for specified retirement benefits
for the Executive after termination of her employment,

     WHEREAS, regulations promulgated under ERISA (the Employees Retirement
Income Security Act) that became effective on January 1, 2002 govern the
regulation of claims procedures contained in the Executive's form of Salary
Continuation Agreement,

     WHEREAS, Clark/Bardes Consulting, a benefits consulting firm involved in
the design and administration of the Executive's Salary Continuation Agreement,
is recommending to its clients that the definition of disability should not
create unwanted burdens under the revised ERISA regulations effective January 1,
2002,

     WHEREAS, the revised disability definition in this Agreement, as well as
the revised Claims and Review Procedure in Article 6 in this document, were
drafted by ERISA counsel retained by Clark/Bardes Consulting, and

     WHEREAS, the Bank and the Executive have negotiated and agreed to
miscellaneous changes in the terms and conditions of the March 1, 2001 Salary
Continuation Agreement, including but not limited to revision of the definition
of "disability" and updating of the claims and review provisions of Article 6.

     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

     Whenever used in this Agreement, the following words and phrases shall have
the meanings specified --

     1.1 "Accrual Balance" means the amount reflected in Schedule A, which is
the amount required to be accrued by the Bank according to generally accepted
accounting principles to account for benefits that may become payable to the
Executive under this Agreement.

     1.2 "Change in Control" means any of the following events occur:

     (a) Acquisition of Significant Stock Ownership: a report on Schedule 13D or
another form or schedule (other than Schedule 13G) is filed or is required to be
filed under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, if
the schedule discloses that the filing person or persons acting in concert has
or have become the

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beneficial owner of 25% or more of a class of Cortland Bancorp's voting
securities (but this clause (a) shall not apply to beneficial ownership of
voting shares of Cortland Bancorp held by the Bank or another subsidiary of
Cortland Bancorp in a fiduciary capacity). A Change in Control of Cortland
Bancorp shall not be deemed to have occurred solely because acquisition by
Cortland Bancorp of its own voting securities reduces the number of shares
outstanding, causing a person's beneficial ownership to exceed 25% of Cortland
Bancorp's voting securities; provided that, if after such acquisition by
Cortland Bancorp such person becomes the beneficial owner of additional Cortland
Bancorp voting securities, increasing the percentage of outstanding Cortland
Bancorp voting securities beneficially owned by such person, a Change in Control
of Cortland Bancorp shall be deemed to have occurred,

     (b) Acquisition of Control under Federal Banking Law. a person acquires the
power to direct Cortland Bancorp's management or policies, if Cortland Bancorp's
board of directors determines that such acquisition constitutes or will
constitute an acquisition of control of Cortland Bancorp for the purposes of the
Bank Holding Company Act or the Change in Bank Control Act and the regulations
thereunder,

     (c) Change in Board Composition: during any period of two consecutive
years, individuals who constitute Cortland Bancorp's board of directors at the
beginning of the two-year period cease for any reason to constitute at least a
majority thereof, provided, however, that -- for purposes of this clause (c) --
each director who is first elected by the board (or first nominated by the board
for election by stockholders) by a vote of at least two-thirds (2/3) of the
directors who were directors at the beginning of the two-year period shall be
deemed to have been a director at the beginning of the two-year period,

     (d) Merger: Cortland Bancorp merges into or consolidates with another
corporation, or merges another corporation into Cortland Bancorp, and as a
result less than 50% of the total voting power of the surviving corporation
immediately after the merger or consolidation is held by persons who were the
stockholders of Cortland Bancorp's voting securities immediately before the
merger or consolidation, or

     (e) Sale of Assets: Cortland Bancorp sells to a third party all or
substantially all of Cortland Bancorp's assets. For purposes of this Agreement,
sale of all or substantially all of Cortland Bancorp's assets includes sale of
the Bank alone.

     1.3 "Disability" means the Executive suffers a sickness, accident or injury
that is determined by the carrier of any individual or group disability
insurance policy covering the Executive, or by the Social Security
Administration, to be a disability rendering the Executive totally and
permanently disabled. At the Bank's request, the Executive must submit to the
Bank proof of the carrier's or Social Security Administration's determination.

     1.4 "Early Retirement Age" means the Executive's 62nd birthday.

     1.5 "Early Termination" means Termination of Employment before Normal
Retirement Age for reasons other than death, Disability, Termination for Cause,
or within one year after a Change in Control.

     1.6 "Early Termination Date" means the month, day, and year in which Early
Termination occurs.

     1.7 "Effective Date" means March 1, 2001.

     1.8 "Normal Retirement Age" means the Executive's 65th birthday.

     1.9 "Normal Retirement Date" means the later of the Normal Retirement Age
or Termination of Employment.

     1.10 "Person" means an individual, corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization or other entity.

     1.11 "Plan Year" means a twelve-month period commencing on March 1 and
ending on the last day of February of each year. The initial Plan Year shall
commence on the Effective Date of this Agreement.

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     1.12 "Termination for Cause" means the Bank terminates the Executive's
employment for any one of the following reasons --

     (a) gross negligence or gross neglect of duties,

     (b) commission of a felony or commission of a misdemeanor involving moral
turpitude, or

     (c) fraud, disloyalty, dishonesty, or willful violation of any law or
significant Bank policy committed in connection with the Executive's employment
and resulting in an adverse effect on the Bank.

     1.13 "Termination of Employment" means that the Executive ceases to be
employed by the Bank for any reason whatsoever, other than because of a leave of
absence approved by the Bank. For purposes of this Agreement, if there is a
dispute over the employment status of the Executive or the date of the
Executive's Termination of Employment, the Bank shall have the sole and absolute
right to decide the dispute, unless a Change in Control shall have occurred.

                                    ARTICLE 2
                                LIFETIME BENEFITS

     2.1 Normal Retirement Benefit. For Termination of Employment on or after
the Normal Retirement Age for reasons other than death, the Bank shall pay to
the Executive the benefit described in this Section 2.1 instead of any other
benefit under this Agreement.

     2.1.1 Amount of Benefit. The annual benefit under this Section 2.1 is
          $12,500. In its sole discretion, the Bank's board of directors may
          increase the annual benefit under this Section 2.1.1, but any increase
          shall require recalculation of Schedule A.

     2.1.2 Payment of Benefit. The Bank shall pay the annual benefit to the
          Executive in 12 equal monthly installments, payable on the last day of
          each month, beginning with the month after the Executive's Normal
          Retirement Date. The annual benefit shall be paid to the Executive for
          15 years.

     2.2 Early Termination Benefit. For Early Termination on or after the
Executive's Early Retirement Age, the Bank shall pay to the Executive the
benefit described in this Section 2.2 instead of any other benefit under this
Agreement.

     2.2.1 Amount of Benefit. The benefit under this Section 2.2 is the Early
          Termination annual benefit amount set forth in Schedule A for the Plan
          Year ending immediately before the Early Termination Date (except
          during the first Plan Year, the benefit is the amount set forth for
          Plan Year 1). If the Bank's board of directors increases the annual
          benefit under Section 2.1.1, the increase shall require recalculation
          of the Early Termination annual benefit on Schedule A.

     2.2.2 Payment of Benefit. The Bank shall pay the Early Termination annual
          benefit to the Executive in 12 equal monthly installments, payable on
          the last day of each month, beginning with the month after the Normal
          Retirement Age. The annual benefit shall be paid to the Executive for
          15 years.

     2.3 Disability Benefit. For Termination of Employment because of Disability
before the Normal Retirement Age, the Bank shall pay to the Executive the
benefit described in this Section 2.3 instead of any other benefit under this
Agreement.

     2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
          Disability annual benefit amount set forth in Schedule A for the Plan
          Year ending immediately before the date on which Termination of
          Employment occurs (except during the first Plan Year, the benefit is
          the amount set forth for Plan

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          Year 1). If the Bank's board of directors increases the annual benefit
          under Section 2.1.1, the increase shall require recalculation of the
          Disability annual benefit on Schedule A.

     2.3.2 Payment of Benefit. The Bank shall pay the Disability annual benefit
          amount to the Executive in 12 equal monthly installments, payable on
          the last day of each month, beginning with the month after the Normal
          Retirement Age. The annual benefit shall be paid to the Executive for
          15 years.

     2.4 Change-in-Control Benefit. If the Executive's employment with Cortland
Bancorp or the Bank terminates within one year after a Change in Control
(excepting Termination for Cause), the Bank shall pay to the Executive the
benefit described in this Section 2.4 instead of any other benefit under this
Agreement.

     2.4.1 Amount of Benefit. The benefit under this Section 2.4 is the
          Change-in-Control benefit set forth in Schedule A for the Plan Year
          ending immediately before the date on which Termination of Employment
          occurs (except during the first Plan Year the benefit is the amount
          set forth for Plan Year 1), determined by vesting the Executive in the
          Normal Retirement Benefit described in Section 2.1, calculating the
          present value of said benefit using a discount rate equal to 8% and
          monthly compounding. If the Bank's board of directors increases the
          annual benefit under Section 2.1.1, the increase shall require
          recalculation of the Change-in-Control lump sum benefit on Schedule A.

     2.4.2 Payment of Benefit. The Bank shall pay the Change-in-Control benefit
          to the Executive in one lump sum within 3 days after the Executive's
          Termination of Employment.

     2.5 Petition for Payment of Vested Normal Retirement Benefit, Vested Early
Termination Benefit or Vested Disability Benefit. If the Executive is entitled
to the normal retirement benefit provided by Section 2.1, the Early Termination
benefit provided by Section 2.2, or the Disability benefit provided by Section
2.3, the Executive may petition the board of directors to have the Accrual
Balance amount corresponding to that particular benefit paid to the Executive in
a single lump sum after (a) deduction of any normal retirement benefits, Early
Termination benefits, or Disability benefits already paid, and (b) addition of
interest at the rate of 8.0% on the Accrual Balance not yet paid for the period
from Termination of Employment to payment of the lump sum amount. The board of
directors shall have sole and absolute discretion about whether to pay the
remaining Accrual Balance in a lump sum. If the remaining Accrual Balance is
paid in a single lump sum, the Bank shall have no further obligations under this
Agreement.

     2.6 Change-in-Control Payout of Vested Normal Retirement Benefit, Vested
Early Termination Benefit or Vested Disability Benefit Being Paid to the
Executive at the Time of a Change in Control. If a Change in Control occurs at
any time during the entire 15-year salary continuation benefit payment period
and if at the time of that Change in Control the Executive is receiving the
benefit provided by Section 2.1.2, Section 2.2.2, or Section 2.3.2, the Bank
shall pay the remaining salary continuation benefits to the Executive, her
beneficiaries, or estate in a lump sum within three days after the Change in
Control. The lump-sum payment due to the Executive, her beneficiaries, or estate
as a result of a Change in Control shall be an amount equal to the Accrual
Balance amount corresponding to that particular benefit then being paid to the
Executive, her estate, or beneficiaries under Section 2.1.2, Section 2.2.2, or
Section 2.3.2 after (a) deduction of any normal retirement benefits, Early
Termination benefits, or Disability benefits already paid, and (b) addition of
interest at the rate of 8.0% on the Accrual Balance not yet paid for the period
from Termination of Employment to payment of the lump sum amount.

     2.7 Contradiction in Terms of Agreement and Schedule A. If there is a
contradiction in the terms of this Agreement and Schedule A attached hereto
concerning the benefits due under Section 2.2, 2.3, or 2.4 hereof, then the
actual amount of benefits prescribed by this Agreement shall control.

                                    ARTICLE 3
                                 DEATH BENEFITS

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     3.1 Death During Active Service. If the Executive dies before the Normal
Retirement Age while in the active service of the Bank, instead of any other
benefit payable under this Agreement the Bank shall pay to the Executive's
beneficiary(ies) the benefit described in the Amended Split Dollar Agreement and
Endorsement attached to this Agreement as Addendum A.

     3.2 Death During Benefit Period. If the Executive dies after benefit
payments under Article 2 have commenced but before receiving all such payments,
the Bank shall pay the remaining benefits to the Executive's beneficiary(ies) at
the same time and in the same amounts they would have been paid to the Executive
had the Executive survived. In that case, no death benefit shall be payable
under this Article 3.

     3.3 Death After Termination of Employment But Before Benefit Payments
Commence. If the Executive is entitled to benefit payments under Article 2 but
dies before payments commence, the benefits shall be payable to the Executive's
beneficiary(ies), but payments shall commence on the last day of the month after
the date of the Executive's death.

     3.4 Petition for Benefit Payments. If the Executive dies before receiving
any or all benefit payments to which she is entitled under Section 2.1, Section
2.2, or Section 2.3, respectively, the Executive's beneficiary(ies) or estate
may petition the board of directors to have the Accrual Balance corresponding to
that particular benefit paid to the Executive's beneficiary(ies) or estate in a
single lump sum after (a) deduction of any normal retirement benefits, Early
Termination benefits, or Disability benefits already paid, and (b) addition of
interest at the rate of 8.0% on the Accrual Balance not yet paid for the period
from the Executive's Termination of Employment to payment of the lump sum
amount. The board of directors shall have sole and absolute discretion about
whether to pay the remaining Accrual Balance in a lump sum. If the remaining
Accrual Balance is paid in a single lump sum, the Bank shall have no further
obligations under this Agreement.

     3.5 Change-in-Control Payout of Vested Normal Retirement Benefit, Vested
Early Termination Benefit or Vested Disability Benefit Being Paid to the
Executive's Estate or Beneficiaries at the Time of a Change in Control. If a
Change in Control occurs at any time during the entire 15-year salary
continuation benefit payment period and if at the time of that Change in Control
the Executive's estate or beneficiary(ies) is receiving the benefit provided by
Section 2.1.2, Section 2.2.2, or Section 2.3.2, the Bank shall pay the remaining
salary continuation benefits to the Executive's beneficiary(ies) or estate in a
lump sum within three days after the Change in Control. The lump-sum payment due
to the Executive's beneficiary(ies) or estate as a result of a Change in Control
shall be an amount equal to the Accrual Balance amount corresponding to that
particular benefit then being paid to the Executive's estate or beneficiary(ies)
under Section 2.1.2, Section 2.2.2, or Section 2.3.2 after (a) deduction of any
normal retirement benefits, Early Termination benefits, or Disability benefits
already paid, and (b) addition of interest at the rate of 8.0% on the Accrual
Balance not yet paid for the period from Termination of Employment to payment of
the lump sum amount.

                                    ARTICLE 4
                                  BENEFICIARIES

     4.1 Beneficiary Designations. The Executive shall designate a beneficiary
by filing a written designation with the Bank. The Executive may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Executive and accepted by
the Bank during the Executive's lifetime. The Executive's beneficiary
designation shall be deemed automatically revoked if the beneficiary predeceases
the Executive, or if the Executive names a spouse as beneficiary and the
marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's estate.

     4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incapacitated, or to a person incapable of handling the disposition of
his or her property, the Bank may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incapacitated
person or incapable person. The Bank may require proof of incapacity, minority
or guardianship as it may deem appropriate prior to distribution of the benefit.
Such distribution shall completely discharge the Bank from all liability with
respect to such benefit.

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                                    ARTICLE 5
                               GENERAL LIMITATIONS

     5.1 Termination for Cause. Notwithstanding any provision of this Agreement
to the contrary, the Bank shall not pay any benefit under this Agreement if
Termination of Employment is a result of Termination for Cause.

     5.2 Suicide or Misstatement. The Bank shall not pay any benefit under this
Agreement if the Executive commits suicide within two years after the Effective
Date of this Agreement, or if the Executive has made any material misstatement
of fact on any application for life insurance purchased by the Bank.

     5.3 Removal. If the Executive is removed from office or permanently
prohibited from participating in the conduct of the Bank's affairs by an order
issued under section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12
U.S.C. 1818(e)(4) or (g)(1), all obligations of the Bank under this Agreement
shall terminate as of the effective date of the order.

     5.4 Insolvency. If the Superintendent of Financial Institutions appoints
the Federal Deposit Insurance Corporation as receiver for the Bank pursuant to
Ohio Revised Code section 1125.20, all obligations under this Agreement shall
terminate as of the date of the Bank's declared insolvency, but vested rights of
the contracting parties shall not be affected.

     5.5 FDIC Open-Bank Assistance. All obligations under this Agreement shall
be terminated, except to the extent determined that continuation of the contract
is necessary for the continued operation of the Bank, at the time the Federal
Deposit Insurance Corporation enters into an agreement to provide assistance to
or on behalf of the Bank under the authority contained in section 13(c) of the
Federal Deposit Insurance Act. 12 U.S.C. 1823(c). Any rights of the parties that
have already vested, however, shall not be affected by such action.

                                    ARTICLE 6
                          CLAIMS AND REVIEW PROCEDURES

     6.1 Claims Procedure. A person or beneficiary ("claimant") who has not
received benefits under the Agreement that he or she believes should be paid
shall make a claim for such benefits as follows --

     6.1.1 Initiation - Written Claim. The claimant initiates a claim by
          submitting to the Bank a written claim for the benefits.

     6.1.2 Timing of Bank Response. The Bank shall respond to such claimant
          within 90 days after receiving the claim. If the Bank determines that
          special circumstances require additional time for processing the
          claim, the Bank can extend the response period by an additional 90
          days by notifying the claimant in writing, prior to 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 Bank expects to render its decision.

     6.1.3 Notice of Decision. If the Bank denies part or all of the claim, the
          Bank shall notify the claimant in writing of such denial. The Bank
          shall write the notification in a manner calculated to be understood
          by the claimant. The notification shall set forth --

          6.1.3.1 The specific reasons for the denial,

          6.1.3.2 A reference to the specific provisions of the Agreement on
               which the denial is based,

          6.1.3.3 A description of any additional information or material
               necessary for the claimant to perfect the claim and an
               explanation of why it is needed,

<PAGE>

          6.1.3.4 An explanation of the Agreement's review procedures and the
               time limits applicable to such procedures, and

          6.1.3.5 A statement of the claimant's right to bring a civil action
               under ERISA (Employees Retirement Income Security Act) Section
               502(a) following an adverse benefit determination on review.

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

     6.2.1 Initiation - Written Request. To initiate the review, the claimant,
          within 60 days after receiving the Bank's notice of denial, must file
          with the Bank a written request for review.

     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. The Bank shall also
          provide the claimant, 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.

     6.2.3 Considerations on Review. In considering the review, the Bank shall
          take into account all materials and information the claimant submits
          relating to the claim, without regard to whether such information was
          submitted or considered in the initial benefit determination.

     6.2.4 Timing of Bank Response. The Bank shall respond in writing to such
          claimant within 60 days after receiving the request for review. If the
          Bank determines that special circumstances require additional time for
          processing the claim, the Bank can extend the response period by an
          additional 60 days by notifying the claimant in writing, prior to 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 Bank expects to render its
          decision.

     6.2.5 Notice of Decision. The Bank shall notify the claimant in writing of
          its decision on review. The Bank shall write the notification in a
          manner calculated to be understood by the claimant. The notification
          shall set forth --

          6.2.5.1 The specific reason for the denial,

          6.2.5.2 A reference to the specific provisions of the Agreement on
               which the denial is based,

          6.2.5.3 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

          6.2.5.4 A statement of the claimant's right to bring a civil action
               under ERISA Section 502(a).

                                    ARTICLE 7
                                  MISCELLANEOUS

     7.1 Amendment and Termination. This Agreement may be amended or terminated
only by a written agreement signed by the Bank and the Executive.

     7.2 Binding Effect. This Agreement shall bind the Executive and the Bank,
and their beneficiaries, survivors, executors, successors, administrators, and
transferees.

<PAGE>

     7.3 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 nor
interfere with the Executive's right to terminate employment at any time.

     7.4 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached, or encumbered in any manner.

     7.5 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 if no such
succession had occurred. Failure of the Bank to obtain such assumption agreement
before effectiveness of any such succession shall be a breach of this Agreement
and shall entitle the Executive to the Change-in-Control benefit provided in
Section 2.4.

     7.6 Tax Withholding. The Bank shall withhold any taxes that are required to
be withheld from the benefits provided under this Agreement.

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

     7.8 Unfunded Arrangement. The Executive and beneficiary are general
unsecured creditors of the Bank for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Bank to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Executive's life is a general
asset of the Bank to which the Executive and beneficiary have no preferred or
secured claim.

     7.9 Entire Agreement. This Agreement constitutes the entire agreement
between the Bank and the Executive as to the subject matter hereof. No rights
are granted to the Executive under this Agreement other than those specifically
set forth herein.

     7.10 Administration. The Bank shall have powers which are necessary to
administer this Agreement, including but not limited to --

     (a)  interpreting the provisions of this Agreement,

     (b)  establishing and revising the method of accounting for this Agreement,

     (c)  maintaining a record of benefit payments, and

     (d)  establishing rules and prescribing any forms necessary or desirable to
          administer this Agreement.

     7.11 Named Fiduciary. The Bank shall be the named fiduciary and plan
administrator under this Agreement. The named fiduciary may delegate to others
certain aspects of the management and operation responsibilities of the plan,
including the employment of advisors and the delegation of ministerial duties to
qualified individuals.

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

<PAGE>

     7.13 Headings. The headings of sections herein are included solely for
convenience of reference and shall not affect the meaning or interpretation of
any provision of this Agreement.

     7.14 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.

     (a)  If to the Bank, to --
               Board of Directors
               The Cortland Savings and Banking Company
               194 West Main Street
               P.O. Box 98
               Cortland, Ohio 44410-1466

     (b)  If to the Executive, to --
               Marlene Lenio
               326 Russell Avenue
               Cortland, Ohio 44410

and to such other or additional person or persons as either party shall have
designated to the other party in writing by like notice.

     7.15 Payment of Legal Fees. The Bank is aware that upon the occurrence of a
Change in Control, then current management of the Bank may cause or attempt to
cause the Bank to refuse to comply with its obligations under this Agreement, or
may cause or attempt to cause the Bank to institute, or may institute,
litigation seeking to have this Agreement declared unenforceable, or may take,
or attempt to take, other action to deny Executive the benefits intended under
this Agreement. In these circumstances, the purpose of this Agreement could be
frustrated. It is the intent of the Bank that the Executive not be required to
incur the expenses associated with the enforcement of her rights under this
Agreement by litigation or other legal action because the cost and expense
thereof would substantially detract from the benefits intended to be extended to
Executive hereunder, nor be bound to negotiate any settlement of her rights
hereunder under threat of incurring such expenses. Accordingly, if after a
Change in Control it should appear to Executive that (a) the Bank has failed to
comply with any of its obligations under this Agreement, or (b) in the event
that the Bank or any other person takes any action to declare this Agreement
void or unenforceable, or institutes any litigation or other legal action
designed to deny, diminish or to recover from, Executive the benefits intended
to be provided to Executive hereunder, the Bank irrevocably authorizes Executive
from time to time to retain counsel of her choice at the expense of the Bank as
provided in this Section 7.15, to represent Executive in connection with the
initiation or defense of any litigation or other legal action, whether by or
against the Bank or any director, officer, stockholder or other person
affiliated with the Bank, in any jurisdiction. The fees and expenses of counsel
selected from time to time by Executive as herein above provided shall be paid
or reimbursed to Executive by the Bank on a regular, periodic basis upon
presentation by Executive of a statement or statements prepared by such counsel
in accordance with such counsel's customary practices, up to a maximum aggregate
amount of $500,000. The Bank's obligation to pay the Executive's legal fees
provided by this Section 7.15 operates separately from, and in addition to, any
legal fee reimbursement obligation the Bank or the Bank's parent Cortland
Bancorp may have with the Executive by virtue of a Severance Agreement by and
among the Executive, the Bank, and Cortland Bancorp.

     IN WITNESS WHEREOF, the Executive and a duly authorized Bank officer have
signed this Amended Salary Continuation Agreement as of the date first written
above.

EXECUTIVE:                              BANK:
           --------------------------         ----------------------------------

<PAGE>

                                        THE CORTLAND SAVINGS AND BANKING COMPANY

                                        By:
-------------------------------------       ------------------------------------
Marlene Lenio                               Rodger W. Platt
                                        Title: President, Chairman of the Board
                                               and Chief Executive Officer

<PAGE>

                             BENEFICIARY DESIGNATION

                    THE CORTLAND SAVINGS AND BANKING COMPANY
                      AMENDED SALARY CONTINUATION AGREEMENT

                                  MARLENE LENIO

     I designate the following as beneficiary of any death benefits under this
Amended Salary Continuation Agreement:

     Primary: __________________________________________________________________

              __________________________________________________________________

     Contingent: _______________________________________________________________

                 _______________________________________________________________

     NOTE: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE
          TRUSTEE(S) AND THE EXACT NAME AND DATE OF THE TRUST AGREEMENT.

     I understand that I may change these beneficiary designations by filing a
new written designation with the Bank. I further understand that the
designations will be automatically revoked if the beneficiary predeceases me,
or, if I have named my spouse as beneficiary and our marriage is subsequently
dissolved.

Signature:
           --------------------------
           Marlene Lenio

Date: _________, 2002

     Accepted by the Bank this _________ day of ________________, 2002.

By:
    ---------------------------------
    Rodger W. Platt
Title: President, Chairman of the
       Board and Chief Executive
       Officer

<PAGE>

                                   SCHEDULE A
                    THE CORTLAND SAVINGS AND BANKING COMPANY
                      AMENDED SALARY CONTINUATION AGREEMENT

                                  MARLENE LENIO

<TABLE>
<CAPTION>
                                 EARLY
                              TERMINATION     DISABILITY
                    VESTED       ANNUAL         ANNUAL        CHANGE-IN-CONTROL
PLAN    ACCRUAL    ACCRUAL      BENEFIT         BENEFIT        LUMP SUM BENEFIT
YEAR    BALANCE    BALANCE   PAYABLE AT 65   PAYABLE AT 65   PAYABLE IMMEDIATELY
----   --------   --------   -------------   -------------   -------------------
<S>    <C>        <C>        <C>             <C>             <C>
  1    $  2,827   $      0      $     0         $ 1,257            $ 28,103
  2    $  5,888   $      0      $     0         $ 2,418            $ 30,435
  3    $  9,203   $      0      $     0         $ 3,490            $ 32,961
  4    $ 12,794   $      0      $     0         $ 4,480            $ 35,697
  5    $ 16,682   $      0      $     0         $ 5,394            $ 38,660
  6    $ 20,894   $      0      $     0         $ 6,238            $ 41,869
  7    $ 25,455   $      0      $     0         $ 7,017            $ 45,344
  8    $ 30,394   $      0      $     0         $ 7,737            $ 49,108
  9    $ 35,743   $      0      $     0         $ 8,401            $ 53,183
 10    $ 41,537   $      0      $     0         $ 9,014            $ 57,598
 11    $ 47,811   $      0      $     0         $ 9,581            $ 62,378
 12    $ 54,606   $      0      $     0         $10,104            $ 67,556
 13    $ 61,965   $      0      $     0         $10,587            $ 73,163
 14    $ 69,935   $ 69,935      $11,033         $11,033            $ 79,235
 15    $ 78,566   $ 78,566      $11,445         $11,445            $ 85,812
 16    $ 87,913   $ 87,913      $11,825         $11,825            $ 92,934
 17    $ 98,037   $ 98,037      $12,176         $12,176            $100,647
 18    $109,001   $109,001      $12,500         $12,500            $109,001
</TABLE>

                                       12<PAGE>

                                                                   EXHIBIT 10.21

                    THE CORTLAND SAVINGS AND BANKING COMPANY
                          SALARY CONTINUATION AGREEMENT

     THIS SALARY CONTINUATION AGREEMENT (this "Agreement") is made and entered
into as of this day of _____________, 200__, by and between The Cortland
Savings and Banking Company, an Ohio-chartered, FDIC-insured member bank with
its main offices in Cortland, Ohio (the "Bank") and Craig Phythyon, Vice
President of the Bank (the "Executive").

     WHEREAS, the Executive has contributed substantially to the success of the
Bank and its parent company, Cortland Bancorp, an Ohio corporation, and the Bank
desires that the Executive continue in its employ,

     WHEREAS, to encourage the Executive to remain an employee of the Bank, the
Bank is willing to provide salary continuation benefits to the Executive,
payable out of the Bank's general assets,

     WHEREAS, none of the conditions or events included in the definition of the
term "golden parachute payment" that is set forth in section 18(k)(4)(A)(ii) of
the Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal
Deposit Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)]
exists or, to the best knowledge of the Bank, is contemplated insofar as the
Bank is concerned, and

     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

     Whenever used in this Agreement, the following words and phrases shall have
the meanings specified -

     1.1 "Accrual Balance" means the liability that should be accrued by the
Bank under generally accepted accounting principles ("GAAP") for the Bank's
obligation to the Executive under this Agreement, by applying Accounting
Principles Board Opinion No. 12, as amended by Statement of Financial Accounting
Standards No. 106, and the calculation method and discount rate specified
hereinafter. The Accrual Balance shall be calculated assuming a level principal
amount and interest as the discount rate is accrued each period. The principal
accrual is determined such that when it is credited with interest each month,
the Accrual Balance at Normal Retirement Age equals the present value of the
normal retirement benefits. The discount rate means the rate used by the Plan
Administrator for determining the Accrual Balance. The rate is based on the
yield on a 20-year corporate bond rated Aa by Moody's, rounded to the nearest
1/4%. The initial discount rate is 6.75%. However, the Plan Administrator, in
its sole discretion, may adjust the discount rate to maintain the rate within
reasonable standards according to GAAP.

     1.2 "Change in Control" means any of the following events occur:

     (a) Acquisition of Significant Stock Ownership: a report on Schedule 13D or
another form or schedule (other than Schedule 13G) is filed or is required to be
filed under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, if
the schedule discloses that the filing person or persons acting in concert has
or have become the beneficial owner of 25% or more of a class of Cortland
Bancorp's voting securities (but this clause (a) shall not apply to beneficial
ownership of voting shares of Cortland Bancorp held by the Bank or another
subsidiary of Cortland Bancorp in a fiduciary capacity). A Change in Control of
Cortland Bancorp shall not be deemed to have occurred solely because acquisition
by Cortland Bancorp of its own voting securities reduces the number of shares
outstanding, causing a person's beneficial ownership to exceed 25% of Cortland
Bancorp's voting securities; provided that, if after such acquisition by
Cortland Bancorp such person becomes the beneficial owner of additional Cortland
Bancorp voting securities, increasing the percentage of outstanding Cortland
Bancorp voting securities beneficially owned by such person, a Change in Control
of Cortland Bancorp shall be deemed to have occurred,

<PAGE>

     (b) Change in Board Composition: during any period of two consecutive
years, individuals who constitute Cortland Bancorp's board of directors at the
beginning of the two-year period cease for any reason to constitute at least a
majority thereof, provided, however, that - for purposes of this clause (b) -
each director who is first elected by the board (or first nominated by the board
for election by stockholders) by a vote of at least two-thirds (2/3) of the
directors who were directors at the beginning of the two-year period shall be
deemed to have been a director at the beginning of the two-year period,

     (c) Merger: Cortland Bancorp merges into or consolidates with another
corporation, or merges another corporation into Cortland Bancorp, and as a
result less than 50% of the total voting power of the surviving corporation
immediately after the merger or consolidation is held by persons who were the
holders of Cortland Bancorp's voting securities immediately before the merger or
consolidation, or

     (d) Sale of Assets: Cortland Bancorp sells to a third party all or
substantially all of Cortland Bancorp's assets. For purposes of this Agreement,
sale of all or substantially all of Cortland Bancorp's assets includes sale of
the Bank alone.

     1.3 "Disability" means the Executive suffers a sickness, accident or injury
that is determined by the carrier of any individual or group disability
insurance policy covering the Executive, or by the Social Security
Administration, to be a disability rendering the Executive totally and
permanently disabled. At the Bank's request, the Executive must submit to the
Bank proof of the carrier's or Social Security Administration's determination.

     1.4 "Early Retirement Age" means the Executive's 62nd birthday.

     1.5 "Early Termination" means Termination of Employment before Normal
Retirement Age for reasons other than death, Disability, Termination for Cause,
or within one year after a Change in Control.

     1.6 "Early Termination Date" means the month, day, and year in which Early
Termination occurs.

     1.7 "Effective Date" means July 1, 2003.

     1.8 "Normal Retirement Age" means the Executive's 65th birthday.

     1.9 "Normal Retirement Date" means the later of the Normal Retirement Age
or Termination of Employment.

     1.10 "Person" means an individual, corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization or other entity.

     1.11 "Plan Administrator" means the plan administrator described in Article
7.

     1.12 "Plan Year" means a twelve-month period commencing on March 1 and
ending on the last day of February of each year. The initial Plan Year shall
commence on the Effective Date of this Agreement.

     1.13 "Termination for Cause" means the Bank terminates the Executive's
employment for any one of the following reasons -

     (a) gross negligence or gross neglect of duties,

     (b) commission of a felony or commission of a misdemeanor involving moral
turpitude, or

     (c) fraud, disloyalty, dishonesty, or willful violation of any law or
significant Bank policy committed in connection with the Executive's employment
and resulting in an adverse effect on the Bank.

<PAGE>

     1.14 "Termination of Employment" means that the Executive ceases to be
employed by the Bank for any reason whatsoever, other than because of a leave of
absence approved by the Bank. For purposes of this Agreement, if there is a
dispute over the employment status of the Executive or the date of the
Executive's Termination of Employment, the Bank shall have the sole and absolute
right to decide the dispute, unless a Change in Control shall have occurred.

                                    ARTICLE 2
                                LIFETIME BENEFITS

     2.1 Normal Retirement Benefit. For Termination of Employment on or after
the Normal Retirement Age for reasons other than death, the Bank shall pay to
the Executive the benefit described in this Section 2.1 instead of any other
benefit under this Agreement.

     2.1.1 Amount of Benefit. The annual benefit under this Section 2.1 is
          $20,300.

     2.1.2 Payment of Benefit. The Bank shall pay the annual benefit to the
          Executive in 12 equal monthly installments, payable on the last day of
          each month, beginning with the month after the Executive's Normal
          Retirement Date. The annual benefit shall be paid to the Executive for
          15 years.

     2.2 Early Termination Benefit. For Early Termination on or after the
Executive's Early Retirement Age, the Bank shall pay to the Executive the
benefit described in this Section 2.2 instead of any other benefit under this
Agreement.

     2.2.1 Amount of Benefit. The benefit under this Section 2.2 is the Early
          Termination annual benefit amount set forth in Schedule A for the Plan
          Year ending immediately before the Early Termination Date (except
          during the first Plan Year, the benefit is the amount set forth for
          Plan Year 1).

     2.2.2 Payment of Benefit. The Bank shall pay the Early Termination annual
          benefit to the Executive in 12 equal monthly installments, payable on
          the last day of each month, beginning with the month after the Normal
          Retirement Age. The annual benefit shall be paid to the Executive for
          15 years.

     2.3 Disability Benefit. For Termination of Employment because of Disability
before the Normal Retirement Age, the Bank shall pay to the Executive the
benefit described in this Section 2.3 instead of any other benefit under this
Agreement.

     2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
          Disability annual benefit amount set forth in Schedule A for the Plan
          Year ending immediately before the date on which Termination of
          Employment occurs (except during the first Plan Year, the benefit is
          the amount set forth for Plan Year 1).

     2.3.2 Payment of Benefit. The Bank shall pay the Disability annual benefit
          amount to the Executive in 12 equal monthly installments, payable on
          the last day of each month, beginning with the month after the Normal
          Retirement Age. The annual benefit shall be paid to the Executive for
          15 years.

     2.4 Change-in-Control Benefit. If the Executive's employment terminates
within one year after a Change in Control (excepting Termination for Cause), the
Bank shall pay to the Executive the benefit described in this Section 2.4
instead of any other benefit under this Agreement.

     2.4.1 Amount of Benefit. The benefit under this Section 2.4 is the Normal
          Retirement Age Accrual Balance required by Section 2.1, discounting
          the Normal Retirement Age Accrual Balance to present value using a
          discount rate of 6.75%, or a discount rate selected by the Plan
          Administrator

<PAGE>

          if the Plan Administrator determines that a different discount rate is
          appropriate; provided, however, that the discount rate selected shall
          not exceed the discount rate employed at the time of the Change in
          Control for purposes of calculating the Accrual Balance.

     2.4.2 Payment of Benefit. The Bank shall pay the Change-in-Control benefit
          to the Executive in one lump sum within 3 days after the Executive's
          Termination of Employment.

     2.5 Petition for Payment of Vested Normal Retirement Benefit, Vested Early
Termination Benefit or Vested Disability Benefit. If the Executive is entitled
to the normal retirement benefit provided by Section 2.1, the Early Termination
benefit provided by Section 2.2, or the Disability benefit provided by Section
2.3, the Executive may petition the board of directors to have the Accrual
Balance amount corresponding to that particular benefit paid to the Executive in
a single lump sum. The board of directors shall have sole and absolute
discretion about whether to pay the remaining Accrual Balance in a lump sum. If
the remaining Accrual Balance is paid in a single lump sum, the Bank shall have
no further obligations under this Agreement.

     2.6 Change-in-Control Payout of Vested Normal Retirement Benefit, Vested
Early Termination Benefit or Vested Disability Benefit Being Paid to the
Executive at the Time of a Change in Control. If a Change in Control occurs at
any time during the entire 15-year salary continuation benefit payment period
and if at the time of that Change in Control the Executive is receiving the
benefit provided by Section 2.1.2, Section 2.2.2, or Section 2.3.2, the Bank
shall pay the remaining salary continuation benefits to the Executive in a lump
sum within three days after the Change in Control. The lump-sum payment due to
the Executive as a result of a Change in Control shall be an amount equal to the
Accrual Balance amount corresponding to that particular benefit then being paid
to the Executive under Section 2.1.2, Section 2.2.2, or Section 2.3.2.

     2.7 Contradiction in Terms of Agreement and Schedule A. If there is a
contradiction in the terms of this Agreement and Schedule A attached hereto
concerning the benefits due under Section 2.2, 2.3, or 2.4 hereof, then the
actual amount of benefits prescribed by this Agreement shall control.

                                    ARTICLE 3
                                 DEATH BENEFITS

     3.1 Death During Active Service. If the Executive dies before the Normal
Retirement Age while in the active service of the Bank, instead of any other
benefit payable under this Agreement the Bank shall pay to the Executive's
beneficiary(ies) the benefit described in the Split Dollar Agreement and
Endorsement attached to this Agreement as Addendum A.

     3.2 Death During Benefit Period. If the Executive dies after benefit
payments under Article 2 have commenced but before receiving all such payments,
the Bank shall pay the remaining benefits to the Executive's beneficiary(ies) at
the same time and in the same amounts they would have been paid to the Executive
had the Executive survived. In that case, no death benefit shall be payable
under this Article 3.

     3.3 Death After Termination of Employment But Before Benefit Payments
Commence. If the Executive is entitled to benefit payments under Article 2 but
dies before payments commence, the benefits shall be payable to the Executive's
beneficiary(ies), but payments shall commence on the last day of the month after
the date of the Executive's death, and no death benefit shall be payable under
this Article 3.

     3.4 Petition for Benefit Payments. If the Executive dies before receiving
any or all benefit payments to which he is entitled under Section 2.1, Section
2.2, or Section 2.3, respectively, the Executive's beneficiary(ies) or estate
may petition the board of directors to have the Accrual Balance corresponding to
that particular benefit paid to the Executive's beneficiary(ies) or estate in a
single lump sum. The board of directors shall have sole and absolute discretion
about whether to pay the remaining Accrual Balance in a lump sum. If the
remaining Accrual Balance is paid in a single lump sum, the Bank shall have no
further obligations under this Agreement.

<PAGE>

     3.5 Change-in-Control Payout of Vested Normal Retirement Benefit, Vested
Early Termination Benefit or Vested Disability Benefit Being Paid to the
Executive's Estate or Beneficiaries at the Time of a Change in Control. If a
Change in Control occurs at any time during the entire 15-year salary
continuation benefit payment period and if at the time of that Change in Control
the Executive's estate or beneficiary(ies) is receiving the benefit provided by
Section 2.1.2, Section 2.2.2, or Section 2.3.2, the Bank shall pay the remaining
salary continuation benefits to the Executive's beneficiary(ies) or estate in a
lump sum within three days after the Change in Control. The lump-sum payment due
to the Executive's beneficiary(ies) or estate as a result of a Change in Control
shall be an amount equal to the Accrual Balance amount corresponding to that
particular benefit then being paid to the Executive's estate or beneficiary(ies)
under Section 2.1.2, Section 2.2.2, or Section 2.3.2.

                                    ARTICLE 4
                                  BENEFICIARIES

     4.1 Beneficiary Designations. The Executive shall designate a beneficiary
by filing a written designation with the Bank. The Executive may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Executive and accepted by
the Bank during the Executive's lifetime. The Executive's beneficiary
designation shall be deemed automatically revoked if the beneficiary predeceases
the Executive, or if the Executive names a spouse as beneficiary and the
marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's estate.

     4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incapacitated, or to a person incapable of handling the disposition of
his or her property, the Bank may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incapacitated
person or incapable person. The Bank may require proof of incapacity, minority
or guardianship as it may deem appropriate prior to distribution of the benefit.
Such distribution shall completely discharge the Bank from all liability with
respect to such benefit.

                                    ARTICLE 5
                               GENERAL LIMITATIONS

     5.1 Termination for Cause and Termination Before Vesting. Notwithstanding
any provision of this Agreement to the contrary, the Bank shall not pay any
benefit under this Agreement and this Agreement shall terminate if Termination
of Employment is a result of Termination for Cause or if Early Termination
benefits under Section 2.2 of this Agreement are neither paid nor payable
because Early Termination occurred before vesting under Section 2.2 of this
Agreement.

     5.2 Suicide or Misstatement. The Bank shall not pay any benefit under this
Agreement if the Executive commits suicide within two years after the Effective
Date of this Agreement, or if the Executive has made any material misstatement
of fact on any application for life insurance purchased by the Bank.

     5.3 Removal. Notwithstanding any provision of this Agreement to the
contrary, if the Executive is removed from office or permanently prohibited from
participating in the Bank's affairs by an order issued under section 8(e)(4) or
(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), all
obligations of the Bank under this Agreement shall terminate as of the effective
date of the order.

     5.4 Default. Notwithstanding any provision of this Agreement to the
contrary, if the Bank is in "default" or "in danger of default", as those terms
are defined in of section 3(x) of the Federal Deposit Insurance Act, 12 U.S.C.
1813(x), all obligations under this Agreement shall terminate.

     5.5 FDIC Open-Bank Assistance. All obligations under this Agreement shall
terminate, except to the extent determined that continuation of the contract is
necessary for the continued operation of the Bank, at the time the Federal
Deposit Insurance Corporation enters into an agreement to provide assistance to
or on behalf of the Bank

<PAGE>

under the authority contained in section 13(c) of the Federal Deposit Insurance
Act. 12 U.S.C. 1823(c). Any rights of the parties that have already vested shall
not be affected by such action, however.

                                    ARTICLE 6
                          CLAIMS AND REVIEW PROCEDURES

     6.1 Claims Procedure. A person or beneficiary ("claimant") who has not
received benefits under the Agreement that he or she believes should be paid
shall make a claim for such benefits as follows -

     6.1.1 Initiation - Written Claim. The claimant initiates a claim by
          submitting to the Bank a written claim for the benefits.

     6.1.2 Timing of Bank Response. The Bank shall respond to such claimant
          within 90 days after receiving the claim. If the Bank determines that
          special circumstances require additional time for processing the
          claim, the Bank can extend the response period by an additional 90
          days by notifying the claimant in writing, prior to 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 Bank expects to render its decision.

     6.1.3 Notice of Decision. If the Bank denies part or all of the claim, the
          Bank shall notify the claimant in writing of such denial. The Bank
          shall write the notification in a manner calculated to be understood
          by the claimant. The notification shall set forth -

          6.1.3.1 The specific reasons for the denial,

          6.1.3.2 A reference to the specific provisions of the Agreement on
               which the denial is based,

          6.1.3.3 A description of any additional information or material
               necessary for the claimant to perfect the claim and an
               explanation of why it is needed,

          6.1.3.4 An explanation of the Agreement's review procedures and the
               time limits applicable to such procedures, and

          6.1.3.5 A statement of the claimant's right to bring a civil action
               under ERISA (Employee Retirement Income Security Act) section
               502(a) following an adverse benefit determination on review.

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

     6.2.1 Initiation - Written Request. To initiate the review, the claimant,
          within 60 days after receiving the Bank's notice of denial, must file
          with the Bank a written request for review.

     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. The Bank shall also
          provide the claimant, 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.

     6.2.3 Considerations on Review. In considering the review, the Bank shall
          take into account all materials and information the claimant submits
          relating to the claim, without regard to whether such information was
          submitted or considered in the initial benefit determination.

<PAGE>

     6.2.4 Timing of Bank Response. The Bank shall respond in writing to such
          claimant within 60 days after receiving the request for review. If the
          Bank determines that special circumstances require additional time for
          processing the claim, the Bank can extend the response period by an
          additional 60 days by notifying the claimant in writing, prior to 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 Bank expects to render its
          decision.

     6.2.5 Notice of Decision. The Bank shall notify the claimant in writing of
          its decision on review. The Bank shall write the notification in a
          manner calculated to be understood by the claimant. The notification
          shall set forth -

          6.2.5.1 The specific reason for the denial,

          6.2.5.2 A reference to the specific provisions of the Agreement on
               which the denial is based,

          6.2.5.3 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

          6.2.5.4 A statement of the claimant's right to bring a civil action
               under ERISA section 502(a).

                                    ARTICLE 7
                           ADMINISTRATION OF AGREEMENT

     7.1 Plan Administrator Duties. This Agreement shall be administered by a
Plan Administrator consisting of the Board or such committee or person(s) as the
Board shall appoint. The Executive may be a member of the Plan Administrator.
The Plan Administrator shall also have the discretion and authority to (a) make,
amend, interpret and enforce all appropriate rules and regulations for the
administration of this Agreement and (b) decide or resolve any and all questions
including interpretations of this Agreement, as may arise in connection with the
Agreement.

     7.2 Agents. In the administration of this Agreement, the Plan 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 Plan
Administrator with respect to any question arising out of or in connection with
the administration, interpretation and application of the Agreement and the
rules and regulations promulgated hereunder shall be final and conclusive and
binding upon all persons having any interest in the Agreement. No Executive or
Beneficiary shall be deemed to have any right, vested or nonvested, regarding
the continued use of any previously adopted assumptions, including but not
limited to the discount rate and calculation method employed in the
determination of the Accrual Balance.

     7.4 Indemnity of Plan Administrator. The Bank shall indemnify and hold
harmless the members of the Plan 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 Plan Administrator or any of its members.

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

                                    ARTICLE 8
                                  MISCELLANEOUS

     8.1 Amendments. This Agreement may be amended solely by a written agreement
signed by the Bank and by the Executive.

                                       7

<PAGE>

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

     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 nor
interfere with the Executive's right to terminate employment at any time.

     8.4 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached, or encumbered in any manner.

     8.5 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 if no such
succession had occurred. Failure of the Bank to obtain such assumption agreement
before effectiveness of any such succession shall be a breach of this Agreement
and shall entitle the Executive to the Change-in-Control benefit provided in
Section 2.4.

     8.6 Tax Withholding. The Bank shall withhold any taxes that are required to
be withheld from the benefits provided under this Agreement.

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

     8.8 Unfunded Arrangement. The Executive and beneficiary are general
unsecured creditors of the Bank for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Bank to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Executive's life is a general
asset of the Bank to which the Executive and beneficiary have no preferred or
secured claim.

     8.9 Entire Agreement. This Agreement and the Split Dollar Agreement and
Endorsement attached as Addendum A constitute the entire agreement between the
Bank and the Executive as to the subject matter hereof. No rights are granted to
the Executive under this Agreement other than those specifically set forth
herein.

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

     8.11 Headings. The headings of sections herein are included solely for
convenience of reference and shall not affect the meaning or interpretation of
any provision of this Agreement.

     8.12 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.

     (a)  If to the Bank, to -
                    Board of Directors
                    The Cortland Savings and Banking Company
                    194 West Main Street
                    P.O. Box 98
                    Cortland, Ohio 44410-1466

                                       8

<PAGE>

     (b)  If to the Executive, to -
                    Craig Phythyon
                    The Cortland Savings and Banking Company
                    194 West Main Street
                    P.O. Box 98
                    Cortland, Ohio 44410-1466

and to such other or additional person or persons as either party shall have
designated to the other party in writing by like notice.

     8.13 Payment of Legal Fees. The Bank is aware that upon the occurrence of a
Change in Control, management of the Bank may cause or attempt to cause the Bank
to refuse to comply with its obligations under this Agreement, or may cause or
attempt to cause the Bank to institute, or may institute, litigation seeking to
have this Agreement declared unenforceable, or may take, or attempt to take,
other action to deny Executive the benefits intended under this Agreement. In
these circumstances, the purpose of this Agreement could be frustrated. It is
the intent of the Bank that the Executive not be required to incur the expenses
associated with the enforcement of his rights under this Agreement by litigation
or other legal action because the cost and expense thereof would substantially
detract from the benefits intended to be extended to Executive hereunder, nor be
bound to negotiate any settlement of his rights hereunder under threat of
incurring such expenses. Accordingly, if after a Change in Control it appears to
Executive that (a) the Bank has failed to comply with any of its obligations
under this Agreement, or (b) the Bank or any other person has taken any action
to declare this Agreement void or unenforceable, or instituted any litigation or
other legal action designed to deny, diminish or to recover from, Executive the
benefits intended to be provided to Executive hereunder, the Bank irrevocably
authorizes Executive from time to time to retain counsel of his choice at the
Bank's expense as provided in this Section 8.13, to represent Executive in
connection with the initiation or defense of any litigation or other legal
action, whether by or against the Bank or any director, officer, stockholder or
other person affiliated with the Bank, in any jurisdiction. The fees and
expenses of counsel selected from time to time by Executive as herein above
provided shall be paid or reimbursed to Executive by the Bank on a regular,
periodic basis upon presentation by Executive of a statement or statements
prepared by such counsel in accordance with such counsel's customary practices,
up to a maximum aggregate amount of $500,000. The Bank's obligation to pay the
Executive's legal fees provided by this Section 8.13 operates separately from,
and in addition to, any legal fee reimbursement obligation the Bank or the
Bank's parent Cortland Bancorp may have with the Executive by virtue of a
severance or employment agreement by and among the Executive, the Bank, and
Cortland Bancorp.

     IN WITNESS WHEREOF, the Executive and a duly authorized Bank officer have
executed this Salary Continuation Agreement as of the date first written above.

EXECUTIVE:                              BANK:
                                        THE CORTLAND SAVINGS AND BANKING COMPANY

                                        By:
-------------------------------------       ------------------------------------
Craig Phythyon                              Rodger W. Platt
                                        Title: President, Chairman of the Board
                                               and Chief Executive Officer

                                       9

<PAGE>

                             BENEFICIARY DESIGNATION

                    THE CORTLAND SAVINGS AND BANKING COMPANY
                          SALARY CONTINUATION AGREEMENT

                                 CRAIG PHYTHYON

     I designate the following as beneficiary of any death benefits under this
Salary Continuation Agreement:

     Primary: __________________________________________________________________

              __________________________________________________________________

     Contingent:
                 _______________________________________________________________

                 _______________________________________________________________

     NOTE: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE
          TRUSTEE(S) AND THE EXACT NAME AND DATE OF THE TRUST AGREEMENT.

     I understand that I may change these beneficiary designations by filing a
new written designation with the Bank. I further understand that the
designations will be automatically revoked if the beneficiary predeceases me,
or, if I have named my spouse as beneficiary and our marriage is subsequently
dissolved.

Signature:
           --------------------------
           Craig Phythyon

Date: ____________________, 200_

     Accepted by the Bank this _____ day of __________________, 200_.

By:
    ---------------------------------
    Rodger W. Platt
Title: President, Chairman of the
       Board, and Chief Executive
       Officer

                                       10

<PAGE>

                                   SCHEDULE A
                    THE CORTLAND SAVINGS AND BANKING COMPANY
                          SALARY CONTINUATION AGREEMENT

                                 CRAIG PHYTHYON

<TABLE>
<CAPTION>
                                         EARLY
                                      TERMINATION        DISABILITY
                    AGE               ANNUAL BENEFIT   ANNUAL BENEFIT
                    AT                  PAYABLE AT       PAYABLE AT
       PLAN YEAR   PLAN    ACCRUAL        NORMAL           NORMAL       CHANGE-IN-CONTROL
PLAN     ENDING    YEAR   BALANCE @   RETIREMENT AGE   RETIREMENT AGE    BENEFIT PAYABLE
YEAR    FEBRUARY    END   6.75% (1)         (2)              (2)          IN A LUMP SUM
----   ---------   ----   ---------   --------------   --------------   -----------------
<S>    <C>         <C>    <C>         <C>              <C>              <C>
  1       2004      42     $  2,271       $     0          $ 1,121           $ 41,109
  2       2005      43     $  5,874       $     0          $ 2,712           $ 43,971
  3       2006      44     $  9,728       $     0          $ 4,199           $ 47,033
  4       2007      45     $ 13,850       $     0          $ 5,589           $ 50,308
  5       2008      46     $ 18,260       $     0          $ 6,889           $ 53,810
  6       2009      47     $ 22,976       $     0          $ 8,104           $ 57,557
  7       2010      48     $ 28,021       $     0          $ 9,239           $ 61,565
  8       2011      49     $ 33,417       $     0          $10,301           $ 65,851
  9       2012      50     $ 39,189       $     0          $11,294           $ 70,436
 10       2013      51     $ 45,363       $     0          $12,223           $ 75,341
 11       2014      52     $ 51,966       $     0          $13,090           $ 80,587
 12       2015      53     $ 59,029       $     0          $13,902           $ 86,198
 13       2016      54     $ 66,584       $     0          $14,660           $ 92,199
 14       2017      55     $ 74,666       $     0          $15,369           $ 98,619
 15       2018      56     $ 83,310       $     0          $16,032           $105,486
 16       2019      57     $ 92,555       $     0          $16,652           $112,830
 17       2020      58     $102,445       $     0          $17,232           $120,687
 18       2021      59     $113,023       $     0          $17,773           $129,090
 19       2022      60     $124,337       $     0          $18,280           $138,078
 20       2023      61     $136,440       $     0          $18,753           $147,692
 21       2024      62     $149,385       $19,196          $19,196           $157,976
 22       2025      63     $163,231       $19,610          $19,610           $168,975
 23       2026      64     $178,042       $19,997          $19,997           $180,740
 24     December    65     $191,168       $20,300          $20,300           $191,168
          2026
</TABLE>

(1)  Calculations are approximations. Benefit calculations are based on prior
     year-end accrual balances. The accrual balance reflects payment at the end
     of each month during retirement, beginning January 31, 2027.

(2)  Benefit is based on the present value of the current payment stream of the
     vested accrual balance using a standard discount rate (6.75%).

                                       11

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