Document:

Exhibit 10.2

 

PRUDENTIAL SAVINGS BANK

SEVERANCE AGREEMENT

This Severance Agreement (the "Agreement") dated as of November 30, 2015 is between Prudential Savings Bank, a Pennsylvania‐chartered, stock-form savings bank (the "Bank" or the "Employer"), and Douglas J. R. Smith (the "Executive").

WHEREAS, the Executive is presently employed as Senior Vice President and Chief Lending Officer of the Bank;

WHEREAS, the Employer desires to be ensured of the Executive's continued active participation in the business of the Employer;

WHEREAS, in order to induce the Executive to remain in the employ of the Employer and in consideration of the Executive's agreeing to remain in the employ of the Employer, the parties desire to specify the severance benefits which shall be due the Executive in the event that his employment with the Employer is terminated under specified circumstances; and

WHEREAS, the Executive is willing to serve the Bank on the terms and conditions hereinafter set forth.

NOW THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereby agree as follows:

1.             Definitions.  The following words and terms shall have the meanings set forth below for the purposes of this Agreement:

(a)            Average Annual Compensation.  The Executive's "Average Annual Compensation" for purposes of this Agreement shall be deemed to mean the average amount of Base Salary and cash bonus received by the Executive from the Employer or any subsidiary thereof (excluding any deferred amounts) during the most recent five calendar years immediately preceding the Date of Termination (or such shorter period as the Executive was employed).

(b)            Base Salary.  "Base Salary" shall mean the amount per calendar year that the Bank pays Executive for his services, which amount may be adjusted from time to time as determined by the Board of Directors, subject to the provisions hereof.

(c)            Cause. Termination of the Executive's employment for "Cause" shall mean termination because of personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order, willful conduct which is materially detrimental (monetarily or otherwise) to the Employer or material breach of any provision of this Agreement.

(d)            Change in Control.  "Change in Control" shall mean a change in the ownership of the Corporation or the Bank, a change in the effective control of the Corporation or the Bank or a change in the ownership of a substantial portion of the assets of the Corporation or the Bank, in each case as provided under Section 409A of the Code and the regulations thereunder.

(e)            Code.  "Code" shall mean the Internal Revenue Code of 1986, as amended.

(f)            Corporation.  "Corporation" shall mean Prudential Bancorp, Inc., the holding company for the Bank, or any successor thereto.

(g)            Date of Termination.  "Date of Termination" shall mean (i) if the Executive's employment is terminated for Cause, the date on which the Notice of Termination is given, and (ii) if the Executive's employment is terminated for any other reason, the date specified in such Notice of Termination.

(h)            Disability. "Disability" shall mean the Executive (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Bank.

(i)            Good Reason.  "Good Reason" means the occurrence of any of the following events: 

 

   (i)      any material breach of this Agreement by the Employer, including without limitation any of the following: (A) a material diminution in the Executive's base compensation, (B) a material diminution in the Executive's authority, duties or responsibilities, or (C) a material diminution in the authority, duties or responsibilities of the supervisor to whom the Executive is required to report, or

 

   (ii)    any material change in the geographic location at which the Executive must perform his services under this Agreement;

provided, however, that prior to any termination of employment for Good Reason, the Executive must first provide written notice to the Employer within ninety (90) days of the initial existence of the condition, describing the existence of such condition, and the Employer shall thereafter have the right to remedy the condition within thirty (30) days of the date the Employer received the written notice from the Executive.  If the Employer remedies the condition within such thirty (30) day cure period, then no Good Reason shall be deemed to exist with respect to such condition.  If the Employer does not remedy the condition within such thirty (30) day cure period, then the Executive may deliver a Notice of Termination for Good Reason at any time within sixty (60) days following the expiration of such cure period.

(j)            Notice of Termination.  Any purported termination of the Executive's employment by the Employer for any reason, including without limitation for Cause, Disability or Retirement, or by the Executive for any reason, including without limitation for Good Reason, shall be communicated by a written "Notice of Termination" to the other party hereto.  For purposes of this Agreement, a "Notice of Termination" shall mean a dated notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated, (iii) specifies a Date of Termination, which shall be not less than thirty (30) nor more than ninety (90) days after such Notice of Termination is given, except in the case of the Employer's termination of the Executive's employment for Cause, which shall be effective immediately; and (iv) is given in the manner specified in Section 8 hereof.

2

(k)            Retirement.  "Retirement" shall mean voluntary termination by the Executive in accordance with the Employer's retirement policies, including early retirement, generally applicable to the Employer's salaried employees.

2.            Term of Agreement.

Subject to the terms hereof, the term of this Agreement shall terminate on December 31, 2016.  Beginning on December 31, 2016 and on each December 31st thereafter, the term of this Agreement shall be extended for a period of one additional year, provided that the Employer has not given notice to the Executive in writing at least 30 days prior to such day that the term of this Agreement shall not be extended further and/or the Executive has not given notice to the Employer of his election not to extend the term at least thirty (30) days prior to any such December 31st; provided, however, notwithstanding the foregoing to the contrary, if a Change in Control occurs during the term of this Agreement, then the remaining term of this Agreement shall be automatically extended until the one-year anniversary of the completion of the Change in Control. If any party gives timely notice that the term will not be extended as of any such December 31st, then this Agreement shall terminate at the conclusion of its remaining term.  References herein to the term of this Agreement shall refer both to the initial term and successive terms.

3.            Benefits Upon Termination in Connection with or Following a Change in Control.

(a)            If the Executive's employment is terminated by the Employer in connection with or subsequent to a Change in Control by (i) the Employer other than for Cause, Disability, Retirement or as a result of Executive's death or (ii) such employment is terminated by the Executive for Good Reason, then the Employer shall, subject to the provisions of Section 4 hereof, if applicable:

 

(A)            pay to the Executive, in a lump sum within five (5) business days following the Date of Termination, a cash severance amount equal to one (1) times the Executive's Average Annual Compensation;

 

(B)            maintain and provide for a period ending at the earlier of (i) one (1) years subsequent to the Date of Termination or (ii) the date of the Executive's full-time employment by another employer (provided that the Executive is entitled under the terms of such employment to benefits substantially similar to those described in this subparagraph (B)), at no cost to the Executive, the Executive's continued participation in all group insurance, life insurance, health, dental and accident insurance, and disability insurance plans offered by the Employer in which the Executive was participating immediately prior to the Date of Termination; in each case subject to clauses (C) and (D) of this Section 3(a);

(C)            in the event that the continued participation of the Executive in any group insurance plan as provided in clause (B) of this Section 3(a) is barred or would trigger the payment of an excise tax under Section 4980D of the Code, or during the period set forth in Section 3(a)(B) any such group insurance plan is discontinued, then the Bank shall at its election either (i) arrange to provide the Executive with alternative benefits substantially similar to those which the Executive was entitled to receive under such group insurance plans immediately prior to the Date of Termination, provided that the alternative benefits do not trigger the payment of an excise tax under Section 4980D of the Code, or (ii) pay to the Executive within 10 business days following the Date of Termination (or within 10 business days following the discontinuation of the benefits if later) a lump sum cash amount equal to the projected cost to the Bank of providing continued coverage to the Executive until the one-year anniversary of his Date of Termination, with the projected cost to be based on the costs being incurred immediately prior to the Date of Termination (or the discontinuation of the benefits if later);

3

(D)            any insurance premiums payable by the Bank pursuant to Section 3(a)(B) or (C) shall be payable at such times and in such amounts (except that the Employer shall also pay any employee portion of the premiums) as if the Executive was still an employee of the Bank, subject to any increases in such amounts imposed by the insurance company or COBRA, and the amount of insurance premiums required to be paid by the Bank in any taxable year shall not affect the amount of insurance premiums required to be paid by the Bank in any other taxable year; and

(E)            pay to the Executive, in a lump sum within five (5) business days following the Date of Termination, a cash amount equal to the projected cost to the Employer of providing benefits to the Executive for a period of twelve (12) months pursuant to any other employee benefit plans, programs or arrangements offered by the Employer in which the Executive was entitled to participate immediately prior to the Date of Termination (other than stock option plans, restricted stock plans or retirement plans of the Employer or the Corporation), with the projected cost to the Employer to be based on the costs incurred for the calendar year immediately preceding the year in which the Date of Termination occurs, and with any automobile-related costs to exclude any depreciation on Bank-owned automobiles.

(b)            Notwithstanding any other provision contained in this Agreement, if either (i) the time period for making any cash payment under subsections (A), (C) and (E) of Section 3(a) commences in one calendar year and ends in the succeeding calendar year or (ii) in the event any payment under this Section 3 is made contingent upon the execution of a general release and the time period that the Executive has to consider the terms of such general release (including any revocation period under such release) commences in one calendar year and ends in the succeeding calendar year, then the payment shall not be paid until the succeeding calendar year.

4.            Limitation of Benefits under Certain Circumstances.  If the payments and benefits pursuant to Section 3 hereof, either alone or together with other payments and benefits which the Executive has the right to receive from the Employer and the Corporation, would constitute a "parachute payment" under Section 280G of the Code, then the payments and benefits payable by the Employer pursuant to Section 3 hereof shall be reduced by the minimum amount necessary to result in no portion of the payments and benefits payable by the Employer under Section 3 being non‐deductible to the Employer pursuant to Section 280G of the Code and subject to the excise tax imposed under Section 4999 of the Code.  If the payments and benefits under Section 3 are required to be reduced, the cash severance shall be reduced first, followed by a reduction in the fringe benefits.  The determination of any reduction in the payments and benefits to be made pursuant to Section 3 shall be based upon the opinion of independent tax counsel selected by the Employer and paid by the Employer.  Such counsel shall promptly prepare the foregoing opinion, but in no event later than thirty (30) days from the Date of Termination, and may use such actuaries as such counsel deems necessary or advisable for the purpose.  Nothing contained in this Section 4 shall result in a reduction of any payments or benefits to which the Executive may be entitled upon termination of employment under any circumstances other than as specified in this Section 4, or a reduction in the payments and benefits specified in Section 3 below zero.

4

5.            Mitigation; Exclusivity of Benefits.

(a)            The Executive shall not be required to mitigate the amount of any benefits hereunder by seeking other employment or otherwise, nor shall the amount of any such benefits be reduced by any compensation earned by the Executive as a result of employment by another employer after the Date of Termination or otherwise, except as set forth in Section 3(a)(B)(ii) above.

(b)            The specific arrangements referred to herein are not intended to exclude any other benefits which may be available to the Executive upon a termination of employment with the Employer pursuant to employee benefit plans of the Employer or otherwise.

6.            Withholding.  All payments required to be made by the Employer hereunder to the Executive shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Employer may reasonably determine should be withheld pursuant to any applicable law or regulation.

7.            Assignability.  The Employer may assign this Agreement and its rights and obligations hereunder in whole, but not in part, to any corporation, bank or other entity with or into which the Employer may hereafter merge or consolidate or to which the Employer may transfer all or substantially all of its assets, if in any such case said corporation, bank or other entity shall by operation of law or expressly in writing assume all obligations of the Employer hereunder as fully as if it had been originally made a party hereto, but may not otherwise assign this Agreement or its rights and obligations hereunder.  The Executive may not assign or transfer this Agreement or any rights or obligations hereunder.

8.            Notice.  For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below:

		To the Employer:	President and Chief Executive Officer

Prudential Savings Bank

1834 West Oregon Avenue

Philadelphia, Pennsylvania 19145

 

 

 

5

To the Executive:          Douglas J.R. Smith

At the address last appearing on the

personnel records of the Employer

9.             Amendment; Waiver.  No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer or officers as may be specifically designated by the Board of Directors of the Employer to sign on its behalf.  No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  In addition, notwithstanding anything in this Agreement to the contrary, the Employer may amend in good faith any terms of this Agreement, including retroactively, in order to comply with Section 409A of the Code.

10.            Governing Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the United States where applicable and otherwise by the substantive laws of the Commonwealth of Pennsylvania.

11.            Nature of Obligations.

(a)            Nothing contained herein shall be deemed to create other than a terminable at will employment relationship between the Employer and the Executive, and the Employer may terminate the Executive's employment at any time, subject to providing any payments specified herein in accordance with the terms hereof.

(b)            Nothing contained herein shall create or require the Employer to create a trust of any kind to fund any benefits which may be payable hereunder, and to the extent that the Executive acquires a right to receive benefits from the Employer hereunder, such right shall be no greater than the right of any unsecured general creditor of the Employer.

12.            Headings.  The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

13.            Validity.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which shall remain in full force and effect.

14.            Changes in Statutes or Regulations. If any statutory or regulatory provision referenced herein is subsequently changed or re-numbered, or is replaced by a separate provision, then the references in this Agreement to such statutory or regulatory provision shall be deemed to be a reference to such section as amended, re-numbered or replaced.

15.            Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

16.            Regulatory Prohibition.  Notwithstanding any other provision of this Agreement to the contrary, any renewal of this Agreement and any payments made to the Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the FDIA (12 U.S.C. §1828(k)) and the regulations promulgated thereunder, including 12 C.F.R. Part 359.  In the event of the Executive's termination of employment with the Bank for Cause, all employment relationships and managerial duties with the Bank shall immediately cease regardless of whether the Executive is in the employ of the Corporation following such termination.  Furthermore, following such termination for Cause, the Executive will not, directly or indirectly, influence or participate in the affairs or the operations of the Bank.

6

17.            Payment of Costs and Legal Fees and Reinstatement of Benefits.  In the event any dispute or controversy arising under or in connection with the Executive's termination is resolved in favor of the Executive, whether by judgment, arbitration or settlement, the Executive shall be entitled to the payment of (a) all legal fees incurred by the Executive in resolving such dispute or controversy, and (b) any back-pay, including Base Salary, bonuses and any other cash compensation, fringe benefits and any compensation and benefits due to the Executive under this Agreement.

18.            Entire Agreement.  This Agreement embodies the entire agreement between the Employer and the Executive with respect to the matters agreed to herein. All prior agreements, if any, between the Employer and the Executive with respect to the matters agreed to herein are hereby superseded and shall have no force or effect.

[signature page follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

  

7

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

	
ATTEST:

	
 

		PRUDENTIAL SAVINGS BANK
	
 

	
 

	 	 	
 

	
 

	
 

	 	 	
 

	
By:

	
 

		By:	
 

	
Name:

	
Regina Wilson

	 	 	
Joseph R. Corrato

	
Title:

	
Corporate Secretary

	 	 	
President and Chief Executive Officer

	
 

	
 

	 	 	
 

	
 

	
 

	 	 	
 

	
 

	
 

	 	
EXECUTIVE

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	By:	 
	
 

	
 

	 	 	
Douglas J.R. Smith

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8EX-10.17

 EXHIBIT 10.17 

THE CORTLAND SAVINGS AND BANKING COMPANY 

SEVENTH AMENDED SALARY CONTINUATION AGREEMENT 

This SEVENTH AMENDED SALARY CONTINUATION
AGREEMENT (this “Agreement”) is entered into             , 20    , by and between The Cortland Savings and Banking Company
(the “Bank”), an Ohio-chartered, FDIC-insured member bank, and Timothy Carney, Executive Vice President and Chief Operating Officer 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, the Bank is willing to provide to the
Executive salary continuation benefits payable from the Bank’s general assets, 
 WHEREAS, as of
the date of this Agreement 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 intend that this Agreement amend and restate in its entirety the
March 4, 2014 Sixth Amended Salary Continuation Agreement between the Executive and the Bank, and 

WHEREAS, the parties hereto intend that this Agreement be considered an unfunded arrangement maintained
primarily to provide supplemental retirement benefits for the Executive, and to be considered a non-qualified benefit plan for purposes of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Executive is fully
advised of the Bank’s financial status. 
 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 

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, applying Financial Accounting Standards Board ASC 710-10-30 (formerly known as 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 is calculated 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. In its sole discretion the Plan Administrator may adjust the discount
rate to maintain the rate within reasonable standards according to GAAP. 

 1.2 “Beneficiary” means each designated person, or the estate of the
deceased Executive, entitled to benefits, if any, upon the death of the Executive, determined according to Article 4. 
 1.3
“Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Executive completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries. 

1.4 “Change in Control” means a change in control as defined in Internal Revenue Code section 409A and rules,
regulations, and guidance of general application thereunder issued by the Department of the Treasury, applying the percentage threshold specified in each of paragraphs (a) through (c) of this section 1.4 or the related percentage threshold
specified in section 409A and rules, regulations, and guidance of general application thereunder, whichever is greater – 
 (a)
Change in ownership: a change in ownership of Cortland Bancorp occurs on the date any one person or group accumulates ownership of Cortland Bancorp stock constituting more than 50% of the total fair market value or total voting power of
Cortland Bancorp’s stock, 
 (b) Change in effective control: (x) any one person, or more than one person acting as
a group, acquires within a 12-month period ownership of Cortland Bancorp stock possessing 30% or more of the total voting power of Cortland Bancorp stock, or (y) a majority of Cortland Bancorp’s board of directors is replaced during
any 12-month period by directors whose appointment or election is not endorsed in advance by a majority of Cortland Bancorp’s board of directors, or 

(c) Change in ownership of a substantial portion of assets: a change in ownership of a substantial portion of Cortland Bancorp’s
assets occurs if in a 12-month period any one person or more than one person acting as a group acquires from Cortland Bancorp assets having a total gross fair market value equal to or exceeding 40% of the total gross fair market value of all of
Cortland Bancorp’s assets immediately before the acquisition or acquisitions. For this purpose, gross fair market value means the value of Cortland Bancorp’s assets, or the value of the assets being disposed of, determined without regard
to any liabilities associated with the assets. 
 1.5 “Code” means the Internal Revenue Code of 1986, as amended,
and rules, regulations, and guidance of general application issued by the Department of the Treasury under the Internal Revenue Code of 1986, as amended. 

1.6 “Disability” means, because of a medically determinable physical or mental impairment that can be expected to
result in death or that can be expected to last for a continuous period of at least 12 months, (x) the Executive is unable to engage in any substantial gainful activity, or (y) the Executive is receiving income replacement
benefits for a period of at least three months under an accident and health plan of the employer. Medical determination of disability may be made either by the Social Security Administration or by the provider of an accident or health plan covering
employees of the Bank. Upon request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of the Social Security Administration’s or provider’s determination. 

1.7 “Early Termination” means Separation from Service before Normal Retirement Age for reasons other than death,
Disability, or Termination with Cause. 

  
 2 

 1.8 “Effective Date” means March 1, 2001. 

1.9 “Intentional,” for purposes of this Agreement, no act or failure to act on the part of the Executive will be
considered intentional if it is due primarily to an error in judgment or negligence. An act or failure to act on the Executive’s part is intentional if it is not in good faith and if it is without a reasonable belief that the action or failure
to act is in the Bank’s best interests. 
 1.10 “Normal Retirement Age” means age 65. 

1.11 “Plan Administrator” or “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 commenced on the Effective Date. 
 1.13 “Separation from Service” means the
Executive’s service as an executive and independent contractor to the Bank and any member of a controlled group, as defined in Code section 414, terminates for any reason, other than because of a leave of absence approved by the Bank or the
Executive’s death. For purposes of this Agreement, if there is a dispute about the employment status of the Executive or the date of the Executive’s Separation from Service, the Bank has the sole and absolute right to decide the dispute,
unless a Change in Control has occurred. 
 1.14 “Termination with Cause” and “Cause” have the same
meaning specified in any effective severance or employment agreement existing on the date hereof or hereafter entered into between the Executive and the Bank. If the Executive is not a party to a severance or employment agreement containing a
definition of termination with cause, Termination with Cause means the Bank terminates the Executive’s employment because of – 

(a) gross negligence or gross neglect of duties or intentional and material failure to perform stated duties after written notice thereof, or

 (b) disloyalty or dishonesty in the performance of duties, or a breach of fiduciary duties for personal profit, in any case whether in
the Executive’s capacity as a director or officer, or 
 (c) intentional wrongful damage to the business or property of the Bank or its
affiliates, including without limitation the reputation of the Bank, which in the judgement of the Bank causes material harm to the Bank or affiliates, or 

(d) willful violation of any applicable law or significant policy of the Bank or an affiliate that, in the Bank’s judgement, results in
an adverse effect on the Bank or the affiliate, regardless of whether the violation leads to criminal prosecution or conviction. For purposes of this Agreement applicable laws include any statute, rule, regulatory order, statement of policy, or
final cease-and-desist order of any governmental agency or body having regulatory authority over the Bank, or 
 (e) occurrence of any event
that results in the Executive being excluded from coverage, or having coverage limited for the Executive as compared to other executives of the Bank, under the Bank’s blanket bond or other fidelity or insurance policy covering its directors,
officers, or employees, or 

  
 3 

 (f) 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 section 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), or 

(g) conviction of or plea of no contest to a felony or conviction of or plea of no contest to a misdemeanor involving moral turpitude, or the
actual incarceration of the Executive for 45 consecutive days or more. 
 1.15 “Voluntary Termination with Good
Reason” means a voluntary Separation from Service by the Executive if the following conditions (x) and (y) are satisfied: (x) a voluntary Separation from Service by the Executive will be considered a
Voluntary Termination with Good Reason if any of the following occur without the Executive’s advance written consent – 
 1) a
material diminution of the Executive’s base salary, 
 2) a material diminution of the Executive’s authority, duties, or
responsibilities, 
 3) a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Executive is
required to report, 
 4) a material diminution in the budget over which the Executive retains authority, 

5) a material change in the geographic location at which the Executive must perform services for the Bank, or 

6) any other action or inaction that constitutes a material breach by the Bank of the agreement under which the Executive provides services to
the Bank. 
 (y) the Executive must give notice to the Bank of the existence of one or more of the conditions described in clause
(x) within 90 days after the initial existence of the condition, and the Bank has 30 days thereafter to remedy the condition. In addition, the Executive’s voluntary termination because of the existence of one or more of the
conditions described in clause (x) must occur within 24 months after the initial existence of the condition. 

ARTICLE 2 

LIFETIME BENEFITS 

2.1 Normal Retirement. Unless Separation from Service or a Change in Control occurs before Normal Retirement Age, when the Executive
attains Normal Retirement Age the Bank will pay to the Executive the benefit described in this section 2.1 instead of any other benefit under this Agreement. If the Executive’s Separation from Service thereafter is a Termination with Cause or
if this Agreement terminates under Article 5, no further benefits will be paid. 
  

	 	2.1.1	Amount of benefit. The annual benefit under this section 2.1 is $129,840. 

  

	 	2.1.2	Payment of benefit. Beginning with the month immediately after the month in which the Executive attains Normal Retirement Age, the Bank will pay the annual benefit to the Executive in equal monthly installments
on the last day of each month. The annual benefit will be paid to the Executive for 15 years. 

 2.2 Early Termination.
Unless the Executive receives the benefit under section 2.4 after a Change in Control, upon Early Termination the Bank will pay to the Executive the benefit described in this section 2.2 instead of any other benefit under this Agreement, except that
all benefits under this Agreement are forfeited if the Executive violates the covenants of Article 9. 

  
 4 

	 	2.2.1	Amount of benefit. The annual benefit under this section 2.2 is calculated as the amount that fully amortizes the Accrual Balance existing at the end of the month immediately before the month in which Separation
from Service occurs, amortizing that Accrual Balance over 15 years and taking into account interest at the discount rate or rates established by the Plan Administrator. 

 

	 	2.2.2	Payment of benefit. The Bank will pay the annual benefit to the Executive in equal monthly installments on the last day of each month, except that the first six monthly installments after the Executive’s
Separation from Service will not be paid to the Executive until the seventh month after the month in which Separation from Service occurs. In the seventh month after the month in which Separation from Service occurs the Executive is entitled to the
first six monthly installments and the regular monthly installment for the seventh month. The Executive is entitled to a total of 180 monthly installments, including the first six installments that are paid in the seventh month. 

2.3 Disability. For Separation from Service because of Disability before Normal Retirement Age, the Bank will pay to the Executive the
benefit described in this section 2.3 instead of any other benefit under this Agreement. The Executive is entitled to no benefit under this section 2.3 if Separation from Service because of Disability occurs after a Change in Control. 

 

	 	2.3.1	Amount of benefit. The annual benefit under this section 2.3 is calculated as the amount that fully amortizes the Accrual Balance existing at the end of the month immediately before the month in which Separation
from Service occurs, amortizing that Accrual Balance over 15 years and taking into account interest at the discount rate or rates established by the Plan Administrator. 

 

	 	2.3.2	Payment of benefit. Beginning with the later of (x) the seventh month after the month in which the Executive’s Separation from Service occurs, or (y) the month immediately after the
month in which the Executive attains Normal Retirement Age, the Bank will pay the annual benefit to the Executive in equal monthly installments on the last day of each month. If the benefit is paid under clause (x) in the seventh month
after Separation from Service, the first six monthly installments after Separation from Service will not be paid to the Executive until the seventh month after the month in which Separation from Service occurs. In the seventh month the Executive is
entitled to the first six monthly installments and the regular monthly installment for the seventh month. The Executive is entitled to a total of 180 monthly installments, including the first six installments that are paid in the seventh month.

 2.4 Change in Control. If a Change in Control occurs both before Normal Retirement Age and before Separation from
Service, the Bank will 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 selected by the Plan Administrator, but the discount rate selected by the Plan Administrator will not exceed the discount rate employed at the time of the Change in Control for purposes of calculating the Accrual Balance. 

  
 5 

	 	2.4.2	Payment of benefit. The Bank will pay the benefit under this section 2.4 to the Executive in a single lump sum three days after the Change in Control. If the Executive receives the benefit under this section 2.4
because of the occurrence of a Change in Control, the Executive is not entitled to claim additional benefits under section 2.4 if an additional Change in Control occurs thereafter. 

2.5 Lump-Sum Payout of Remaining Normal Retirement Benefit, Early Termination Benefit, or Disability Benefit When a Change in Control
Occurs. If a Change in Control occurs while the Executive is receiving the Normal Retirement Age benefit under section 2.1, the Bank will pay the remaining salary continuation benefits to the Executive in a single lump sum three days after the
Change in Control. If a Change in Control occurs after Separation from Service but while the Executive is receiving or is entitled to receive the Early Termination benefit under section 2.2 or the Disability benefit under section 2.3, the Bank will
pay the remaining salary continuation benefits to the Executive in a single lump sum three days after the later of (x) the Change in Control or (y) the last day of the seventh month after the month in which the
Executive’s Separation from Service occurs. The lump-sum payment due to the Executive as a result of a Change in Control is an amount equal to the Accrual Balance amount corresponding to the particular benefit when the Change in Control occurs.

 2.6 Annual Benefit Statement. Within 120 days after the end of each Plan Year the Plan Administrator will provide or cause to be
provided to the Executive an annual benefit statement showing benefits payable or potentially payable to the Executive under this Agreement. Each annual benefit statement supersedes the previous year’s annual benefit statement. If there is a
contradiction between this Agreement and the annual benefit statement concerning the amount of a particular benefit payable or potentially payable to the Executive under sections 2.2, 2.3, or 2.4 hereof, the amount of the benefit determined under
this Agreement controls. 
 2.7 Savings Clause Relating to Compliance with Code Section 409A. Despite any contrary provision of
this Agreement, if when the Executive’s employment terminates the Executive is a specified employee, as defined in Code section 409A, and if any payments under Article 2 of this Agreement will result in additional tax or interest to the
Executive because of section 409A, the Executive is not entitled to the payments under Article 2 until the earliest of (x) the date that is at least six months after termination of the Executive’s employment for reasons other than
the Executive’s death, (y) the date of the Executive’s death, or (z) any earlier date that does not result in additional tax or interest to the Executive under section 409A. If any provision of this Agreement would
subject the Executive to additional tax or interest under section 409A, the Bank will reform the provision. However, the Bank will maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the
Executive to additional tax or interest, and the Bank is not required to incur any additional compensation expense as a result of the reformed provision. 

2.8 One Benefit Only. Despite anything to the contrary in this Agreement, the Executive and Beneficiary are entitled to one benefit
only under this Agreement, which is determined by the first event to occur that is dealt with by this Agreement. Except as provided in section 2.5 or Article 3, subsequent occurrences of events dealt with by this Agreement do not entitle the
Executive or Beneficiary to other or additional benefits under this Agreement. 

  
 6 

 ARTICLE 3 

DEATH BENEFITS 

3.1 Death in Active Service Before Normal Retirement Age. If the Executive dies both before Normal Retirement Age and before Separation
from Service, instead of any other benefit payable under this Agreement the Executive’s Beneficiary is entitled at the Executive’s death solely to the benefit, if any, payable under the Split Dollar Agreement and Endorsement attached to
this Agreement as Addendum A, as amended, unless the Change-in-Control benefit under section 2.4 has been paid. The Executive’s Beneficiary is entitled to no benefit under the Split Dollar Agreement and Endorsement, as amended, if the
Change-in-Control benefit under section 2.4 has been paid. 
 3.2 Death During Benefit Period. If the Executive dies after benefit
payments under Article 2 commence but before receiving all such payments, the Bank will pay the remaining benefits to the Executive’s Beneficiary 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 is payable under the Split Dollar Agreement and Endorsement, as amended. If the Executive is entitled to benefit payments under Article 2 but dies before payments commence, the benefits are payable
to the Executive’s Beneficiary but payments will commence on the last day of the month after the date of the Executive’s death, and no death benefit is payable under the Split Dollar Agreement and Endorsement, as amended. However, the
Executive’s Beneficiary is entitled to no benefit under the Split Dollar Agreement and Endorsement, as amended, if the Change-in-Control benefit under section 2.4 has been paid. 

3.3 Lump-Sum Payout of Remaining Normal Retirement Benefit, Early Termination Benefit, or Disability Benefit When a Change in Control
Occurs. If a Change in Control occurs while the Beneficiary is receiving under section 3.2 the section 2.1 Normal Retirement Age benefit after the Executive’s death or if a Change in Control occurs after the Executive’s Separation from
Service but while the Beneficiary is receiving or is entitled to receive because of section 3.2 the section 2.2 Early Termination benefit or the section 2.3 Disability benefit after the Executive’s death, the Bank will pay the remaining
benefits to the Beneficiary in a single lump sum three days after the Change in Control. The lump-sum payment due to the Beneficiary as a result of a Change in Control is an amount equal to the Accrual Balance amount corresponding to the particular
benefit when the Change in Control occurs. 
 ARTICLE 4 

BENEFICIARIES 

4.1 Beneficiary Designations. The Executive may designate a Beneficiary to receive any benefits payable under this Agreement after the
Executive’s death. The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designation under any other benefit plan of the Bank in which the Executive participates. 

4.2 Beneficiary Designation: Change. The Executive designates a Beneficiary by completing and signing the Beneficiary Designation Form
and delivering it to the Plan Administrator or its designated agent. The Executive’s Beneficiary designation is automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the
marriage is subsequently dissolved. The Executive may change a Beneficiary by completing, signing, and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures, as in effect from
time to time. Upon acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed are cancelled. The Plan Administrator is entitled to rely on the last Beneficiary Designation Form filed by
the Executive and accepted by the Plan Administrator before the Executive’s death. 

  
 7 

 4.3 Acknowledgment. No designation or change in designation of a Beneficiary is effective
until received, accepted, and acknowledged in writing by the Plan Administrator or its designated agent. 
 4.4 No Beneficiary
Designation. If the Executive dies without a valid beneficiary designation or if all designated Beneficiaries predecease the Executive, the Executive’s spouse is the designated Beneficiary. If the Executive has no surviving spouse benefit
payments will be made to the personal representative of the Executive’s estate. 
 4.5 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 the benefit to the guardian, legal representative, or person having the care or custody of the
minor, incapacitated person, or incapable person. The Bank may require proof of incapacity, minority, or guardianship as it deems appropriate before distribution of the benefit. Distribution completely discharges the Bank from all liability for the
benefit. 
 ARTICLE 5 

GENERAL LIMITATIONS 

5.1 Termination with Cause. Despite any contrary provision of this Agreement, the Bank will not pay any benefit under this Agreement
and this Agreement terminates if Separation from Service is a Termination with Cause. 
 5.2 Misstatement. No benefits will be paid
under this Agreement or under the Split Dollar Agreement and Endorsement, as amended, if the Executive makes any material misstatement of fact on any application or resume provided to the Bank, on any application for life insurance purchased by the
Bank, or on any application for benefits provided by the Bank. 
 5.3 Removal. 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 terminate as of the
effective date of the order, and the Split Dollar Agreement and Endorsement, as amended, also terminates as of the effective date of the order. 

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

5.5 FDIC Open-Bank Assistance. All obligations under this Agreement terminate, except to the extent determined that continuation of the
contract is necessary for the continued operation of the Bank, if 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 are not affected, however. 

  
 8 

 ARTICLE 6 

CLAIMS AND REVIEW PROCEDURES 

6.1 Claims Procedure. The Bank will notify any person or entity that makes a claim for benefits under this Agreement (the
“Claimant”) in writing, within 90 days after receiving Claimant’s written application for benefits, of his or her eligibility or noneligibility for benefits under the Agreement. If the Plan Administrator determines that the Claimant
is not eligible for benefits or full benefits, the notice will state (w) the specific reasons for denial, (x) a specific reference to the provisions of the Agreement on which the denial is based, (y) a description
of any additional information or material necessary for the Claimant to perfect his or her claim, and a description of why it is needed, and (z) an explanation of the Agreement’s claims review procedure and other appropriate
information concerning steps to be taken if the Claimant wishes to have the claim reviewed. If the Plan Administrator determines that there are special circumstances requiring additional time to make a decision, the Bank will notify the Claimant of
the special circumstances and the date by which a decision is expected to be made, and may extend the time for up to an additional 90 days. 

6.2 Review Procedure. If the Claimant is determined by the Plan Administrator not to be eligible for benefits, or if the Claimant
believes that he or she is entitled to greater or different benefits, the Claimant will have the opportunity to have his or her claim reviewed by the Bank by filing a petition for review with the Bank within 60 days after receipt of the notice
issued by the Bank. The Claimant’s petition must state the specific reasons the Claimant believes entitle him or her to benefits or to greater or different benefits. Within 60 days after receipt by the Bank of the petition, the Plan
Administrator will give the Claimant (and counsel, if any) an opportunity to present his or her position verbally or in writing, and the Claimant (or counsel) will have the right to review the pertinent documents. The Plan Administrator will notify
the Claimant of the Plan Administrator’s decision in writing within the 60-day period, stating specifically the basis of its decision, written in a manner to be understood by the Claimant, and the specific provisions of the Agreement on which
the decision is based. If, because of the need for a hearing, the 60-day period is not sufficient, the decision may be deferred for up to another 60 days at the election of the Plan Administrator, but notice of this deferral will be given to the
Claimant. 
 ARTICLE 7 

ADMINISTRATION OF AGREEMENT 

7.1 Plan Administrator Duties. This Agreement will be administered by a Plan Administrator consisting of the Board or such committee or
person as the Board appoints. The Executive may not be a member of the Plan Administrator. The Plan Administrator has 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 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 about any question arising out of the administration,
interpretation, and application of the Agreement and the rules and regulations promulgated hereunder is final and conclusive and binding upon all persons having any interest in the Agreement. No Executive or Beneficiary has 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. 

  
 9 

 7.4 Indemnity of Plan Administrator. The Bank will 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 will supply full and timely
information to the Plan Administrator on all matters relating to the date and circumstances of the retirement, Disability, death, or Separation from Service of the Executive, and such other pertinent information as the Plan Administrator reasonably
requires. 
 ARTICLE 8 

MISCELLANEOUS 

8.1 Amendments and Termination. This Agreement may be amended solely by a written agreement signed by the Bank and by the Executive.
This Agreement may be terminated by the Bank without the Executive’s consent. Unless Article 5 provides that the Executive is not entitled to payment or unless when termination occurs the Executive has already received payment of benefits under
this Agreement, the Bank must pay the Accrual Balance in a single lump sum to the Executive if the Bank terminates this Agreement. The lump-sum termination payment will be made to the Executive on the first day of the thirteenth month after the
month in which the Bank terminates this Agreement. 
 8.2 Binding Effect. This Agreement binds the Executive and the Bank and 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 or interfere with the Executive’s right to terminate employment at any time. 
 8.4 Non-Transferability. Benefits under
this Agreement may not be sold, transferred, assigned, pledged, attached, or encumbered. 
 8.5 Successors; Binding Agreement. By an
assumption agreement in form and substance satisfactory to the Executive, the Bank will require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the Bank’s business or
assets to expressly assume and agree to perform this Agreement in the same manner and to the same extent the Bank would be required to perform this Agreement had no succession occurred. 

8.6 Tax Withholding. The Bank will 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 are 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 benefits. The rights to benefits are not subject 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. 

  
 10 

 8.9 Entire Agreement. This Agreement and the Split Dollar Agreement and Endorsement
attached to this Agreement as Addendum A, as amended, 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 March 4, 2014 Sixth Amended Salary Continuation Agreement. 
 8.10
Severability. If any provision of this Agreement is held invalid, invalidity does not affect any other provision of this Agreement not held invalid, and to the full extent consistent with law each such other provision continues in full force and
effect. If any provision of this Agreement is held invalid in part, invalidity does not affect the remainder of the provision not held invalid, and to the full extent consistent with law the remainder of the provision, together with all other
provisions of this Agreement, continues in full force and effect. 
 8.11 Headings. Headings are included herein solely for
convenience of reference and do not affect the meaning or interpretation of any provision of this Agreement. 
 8.12 Notices. All
notices, requests, demands and other communications hereunder must be in writing and will 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 must 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 designates to the Executive in writing. If to the Executive, notice will 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 designates to the Bank in writing. 
 8.13 Payment of Legal Fees. The
Bank is aware that after a Change in Control management could cause or attempt to cause the Bank to refuse to comply with its obligations under this Agreement, or could institute or cause or attempt to cause the Bank to institute litigation seeking
to have this Agreement declared unenforceable, or could take or attempt to take other action to deny Executive the benefits intended under this Agreement. In these circumstances the purpose of this Agreement would be frustrated. The Bank desires
that the Executive not be required to incur expenses associated with enforcement of rights under this Agreement, whether by litigation or other legal action, because the cost and expense thereof would substantially detract from the benefits intended
to be granted to the Executive hereunder. The Bank desires that the Executive not be forced to negotiate settlement of rights under this Agreement under threat of incurring expenses. Accordingly, if after a Change in Control it appears to Executive
that (x) the Bank has failed to comply with any of its obligations under this Agreement, or (y) 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 recover from the Executive the benefits intended to be provided to the Executive hereunder, the Bank irrevocably authorizes the Executive to retain counsel of the Executive’s choice, at the
Bank’s expense as provided in this section 8.13, to represent the Executive in 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. Despite any existing or previous attorney-client relationship between the Bank and any counsel chosen by the Executive under this section 8.13, the Bank irrevocably consents to the Executive entering into an
attorney-client relationship with that counsel, and the Bank and the 

  
 11 

 
Executive agree that a confidential relationship exists between the Executive and that counsel. The fees and expenses of counsel selected by the Executive will be paid or reimbursed to the
Executive by the Bank on a regular, periodic basis upon presentation by the Executive of a statement or statements prepared by counsel in accordance with counsel’s customary practices, regardless of whether suit is brought and regardless of
whether incurred in trial, bankruptcy, or appellate proceedings, but the Bank’s payment or reimbursement of the Executive’s counsel’s fees and expenses must occur on or before the last day of the Executive’s tax year immediately
after the Executive’s tax year in which the expense is incurred. If the Executive is a specified employee, as defined in Code section 409A, on the date of termination, payment under this section 8.13 will be made on the first day of the seventh
month after the month in which the Executive’s termination occurs. Interest will accrue on the payment from the date of termination through the date of payment at the Prime Rate of Interest in effect on the date of termination and as reported
in the Wall Street Journal. The six-month delay applies if and only if an exemption from the six-month delay requirement of Code section 409A is not available. The Executive’s right to payment or reimbursement under this section 8.13 is
not subject to liquidation or exchange for another benefit. The Bank’s obligation to make reimbursement payments will not apply later than the Executive’s remaining lifetime (or, if longer, through the 20th anniversary of the effective date of this Agreement). The legal fee reimbursements are intended to satisfy the requirements for “reimbursement or in-kind benefit plans” described in
Treasury Regulation section 1.409A-3(i)(1)(iv)(A) and will be administered to satisfy those requirements. The Bank’s obligation to pay the Executive’s legal fees under 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 under a severance, employment, or other agreement. Despite any contrary provision in this Agreement however, the Bank is not required to pay
or reimburse the Executive’s legal expenses if doing so violates section 18(k) of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)] and Rule 359.3 of the Federal Deposit Insurance Corporation [12 CFR 359.3]. 

8.14 Automatic Review. On the third year anniversary of the date of this Agreement and every third year thereafter the Bank will
automatically review this Agreement for reasonableness of benefits, with the goal that the Executive’s benefit under this Agreement combined with other Bank-provided benefits equal a reasonable percentage of Executive’s pre-retirement
compensation. For purposes of this Agreement, Bank-provided benefits include but are not limited to (x) the Bank 401(k) match and (y) the Bank portion of Social Security benefits. The term “compensation” as used in
this section 8.14 means the base annual salary of the Executive projected at the Executive’s Normal Retirement Age. Base annual salary means compensation of the type that would, according to the Securities and Exchange Commission’s
Regulation S-K Item 402(c) (17 CFR 229.402(c)), be required to be reported by an accelerated filer as salary in column (c) of that rule’s Summary Compensation Table. The term base annual salary specifically excludes director fees and
other director compensation, bonus, option grants and any other compensation that would be reported in separate columns in the Summary Compensation Table, but it includes salary deferred at the election of the Executive. 

ARTICLE 9 

COMPETITION AFTER SEPARATION FROM SERVICE 

9.1 Covenant Not to Solicit Employees. The Executive agrees not to solicit the services of any officer or employee of the Bank for 24
months after the Executive’s Separation from Service. 

  
 12 

 9.2 Covenant Not to Compete. (a) Without advance written consent of the Bank, the
Executive covenants and agrees not to compete directly or indirectly with the Bank for 24 months after Separation from Service, plus any period during which the Executive is in violation of this covenant not to compete and any period during which
the Bank seeks by litigation to enforce this covenant not to compete. For purposes of this section – 
  

	 	(1)	the term “compete” means 

  

	 	(a)	providing financial products or services on behalf of any financial institution for any person residing in the territory, 

  

	 	(b)	assisting (other than through the performance of ministerial or clerical duties) any financial institution in providing financial products or services to any person residing in the territory, or 

 

	 	(c)	inducing or attempting to induce any person who was a customer of the Bank at the date of the Executive’s Separation from Service to seek financial products or services from another financial institution.

  

	 	(2)	the phrase “compete directly or indirectly” means – 

  

	 	(a)	acting as a consultant, officer, director, independent contractor, incorporator, organizer, or employee of any financial institution in competition with the Bank in the territory, or 

 

	 	(b)	ownership of more than 5% of the voting shares of any financial institution in competition with the Bank in the territory, or 

  

	 	(c)	communicating to such financial institution the names or addresses or any financial information concerning any person who was a customer of the Bank at the Executive’s Separation from Service. 

 

	 	(3)	the term “customer” means any person to whom the Bank is providing financial products or services on the date of the Executive’s Separation from Service. 

 

	 	(4)	the term “financial institution” means any bank, savings association, or bank or savings association holding company, or any other institution, including a financial institution in organization, the business
of which is or will be engaging in activities that are financial in nature or incidental to such financial activities as described in section 4(k) of the Bank Holding Company Act of 1956, other than the Bank or its affiliated corporations.

  

	 	(5)	“financial product or service” means any product or service that a financial institution or a financial holding company could offer by engaging in any activity that is financial in nature or incidental to such
a financial activity under section 4(k) of the Bank Holding Company Act of 1956 and that is offered by the Bank or an affiliate on the date of the Executive’s Separation from Service, including, but not limited to, banking activities and
activities that are closely related to and a proper incident to banking. 

  

	 	(6)	the term “person” means any individual or individuals, corporation, partnership, fiduciary or association. 

  

	 	(7)	the term “territory” means all of Trumbull, Mahoning, and Portage Counties in Ohio. 

  
 13 

 (b) If any provision of this section or any word, phrase, clause, sentence, or other portion
thereof (including, without limitation, the geographical and temporal restrictions contained therein) is held to be unenforceable or invalid for any reason, the unenforceable or invalid provision or portion will be modified or deleted so that the
provision, as modified, is legal and enforceable to the fullest extent permitted under applicable law. 
 9.3 Remedies. Because of
the unique character of the services to be rendered by the Executive hereunder, the Executive understands that the Bank would not have an adequate remedy at law for the material breach or threatened breach by the Executive of any one or more of the
Executive’s covenants set forth in this Article 9. Accordingly, the Executive agrees that the Bank’s remedies for a material breach or threatened breach of this Article 9 include, but are not limited to, (x) forfeiture of any
money representing accrued salary, contingent payments, or other fringe benefits due and payable to the Executive, (y) forfeiture of any unpaid benefits under Article 2 and forfeiture of death benefits under Article 3 of this Agreement,
and (z) at the Bank’s option, a suit in equity by the Bank to enjoin the Executive from the breach or threatened breach of such covenants. The Executive hereby waives the claim or defense that an adequate remedy at law is available
to the Bank and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists. Nothing herein prohibits the Bank from pursuing any other remedies for the breach or threatened breach. 

9.4 Article 9 Survives Termination But Is Void After a Change in Control. The rights and obligations set forth in this Article 9
survive termination of this Agreement. However, Article 9 is null and void if a Change in Control occurs before or after the Executive’s Separation from Service. 

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

							
	EXECUTIVE:	 		 	BANK:
		 		 	THE CORTLAND SAVINGS AND BANKING COMPANY
				
	  
	 		 	By:	 	  

	Timothy Carney	 		 		 	James M. Gasior
		 		 	Title:	 	President and Chief Executive Officer

  
 14 

 BENEFICIARY DESIGNATION 

THE CORTLAND SAVINGS AND BANKING COMPANY 

SEVENTH AMENDED SALARY CONTINUATION AGREEMENT 

Timothy Carney 
 I
designate the following as beneficiary of any death benefits under this Seventh 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:	 	  
	  	
		 	Timothy Carney	  	
		
	Date:             , 20    	  	

 Accepted by the Bank this      day of
            , 20     
  

					
	By:	  	  
	  	
		  	James M. Gasior	  	
	Title:	  	President and Chief Executive Officer	  	

  
 15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00252-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00252-of-00352.parquet"}]]