SEC Contract Filing

Filing Date: 2015-12-01

Document Content:
<DOCUMENT>
<TYPE>EX-10.31.1
<SEQUENCE>6
<FILENAME>d65487dex10311.htm
<DESCRIPTION>EX-10.31.1
<TEXT>
<HTML><HEAD>
<TITLE>EX-10.31.1</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">EXHIBIT 10.31.1 </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>S<SMALL>EVERANCE</SMALL> A<SMALL>GREEMENT</SMALL> </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">This <B>S<SMALL>EVERANCE</SMALL> A<SMALL>GREEMENT</SMALL></B><SMALL></SMALL> (this &#147;<B><U>Agreement</U></B>&#148;) is entered into and is
effective as of , 2015 by and between Cortland Bancorp, an Ohio corporation, and Timothy Carney (the &#147;<B><U>Executive</U></B>&#148;), Executive Vice President and Chief Operating Officer of Cortland Bancorp and The Cortland Savings and Banking
Company (the &#147;<B><U>Bank</U></B>&#148;), an Ohio-chartered bank and wholly owned subsidiary of Cortland Bancorp. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><B>W<SMALL>HEREAS</SMALL></B><SMALL></SMALL>, recognizing the contributions to the profitability, growth, and financial strength of Cortland
Bancorp and the Bank that the Executive has made and is expected to continue to make, intending to assure itself of the current and future continuity of management and establish minimum severance benefits for certain officers and other key employees
and ensure that officers and other key employees are not practically disabled from discharging their duties if a proposed or actual transaction involving a change in control arises, and finally desiring to provide additional inducement for the
Executive to remain in the employ of Cortland Bancorp and the Bank, Cortland Bancorp desires to enter into a Severance Agreement with the Executive, </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><B>W<SMALL>HEREAS</SMALL></B><SMALL></SMALL>, Cortland Bancorp and the Executive intend that this Agreement supersede and replace in its
entirety the September&nbsp;28, 2012 Severance Agreement and that from and after the date hereof the September&nbsp;28, 2012 Severance Agreement will be of no further force or effect, and </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><B>W<SMALL>HEREAS</SMALL></B><SMALL></SMALL>, as of the effective date of this Agreement none of the conditions or events included in the
definition of the term &#147;golden parachute payment&#148; 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 Cortland Bancorp, is contemplated insofar as Cortland Bancorp or any of its subsidiaries is concerned. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><B>N<SMALL>OW</SMALL> T<SMALL>HEREFORE</SMALL></B><SMALL></SMALL>, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><B>1</B>. <B>Cash
Benefit after a Change in Control</B>. (a)&nbsp;<I>Cash benefit</I>. If a Change in Control occurs, Cortland Bancorp will make a lump-sum payment to the Executive in an amount in cash equal to 2.99 times the Executive&#146;s compensation. For this
purpose, the Executive&#146;s compensation means the sum of (<I>x</I>)&nbsp;the Executive&#146;s base salary when the Change in Control occurs, including salary deferred at the Executive&#146;s election, plus (<I>y</I>)&nbsp;any bonus awarded for
the most recent whole calendar year before the year in which the Change in Control occurs, regardless of whether the bonus is paid in the year earned and regardless of whether the bonus is vested or subject to elective deferral. The term bonus means
cash or non-cash compensation of the type that under SEC rules is required to be reported by accelerated filers as bonus in the Summary Compensation Table, specifically Regulation S-K Item&nbsp;402 (17 CFR 229.402, currently
Item&nbsp;402(c)(2)(iv)). The amount payable to the Executive hereunder will not be reduced to account for the time value of money or discounted to present value. Subject to section 17 of this Agreement, the payment required under this section 1(a)
will be made five business days after the Change in Control occurs. If the Executive receives payment of the benefit under this section 1(a) because of the occurrence of a Change in Control, the Executive is not entitled to an additional payment
under this section 1(a) if an additional Change in Control occurs thereafter. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">(b) <I>Change in Control defined</I>. For purposes of this
Agreement, the term 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, including &#150; </P>

<p Style='page-break-before:always'>
<HR SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">(1) <I>Change in ownership</I>: 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 stock, </P>
<P STYLE="m