Form 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 1, 2010
Cortland Bancorp
(Exact name of registrant as specified in its charter)
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Ohio
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000-13814
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34-1451118 |
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.) |
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194 West Main Street, Cortland, Ohio
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44410 |
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(Address of principal executive offices)
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(Zip Code) |
Registrants telephone number, including area code: (330) 637-8040
[not applicable]
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02(e) Compensatory Arrangements of Certain Officers
On May 18, 2010 the board of directors of Cortland Bancorp approved entry into severance
agreements with two recently appointed executives, Mr. David J. Lucido, Senior Vice President and
Chief Financial Officer, and Mr. Stanley P. Feret, Senior Vice President and Chief Lending Officer.
On May 18, 2010 the board of directors of The Cortland Savings and Banking Company approved entry
into Salary Continuation Agreements with Messrs. Lucido and Feret, as well as entry into Fourth
Amended Salary Continuation Agreements with Mr. James M. Gasior, President and Chief Executive
Officer, and Mr. Timothy Carney, Executive Vice President and Chief Operating Officer.
Severance Agreements. Mr. Lucidos severance agreement is essentially identical to the form
of severance agreement previously entered into by Cortland Bancorp with Messrs. Gasior and Carney,
providing for a cash payment equal to the sum of base salary and most recent bonus when a change in
control occurs, with miscellaneous benefits such as continued club dues, financial planning, and
outplacement assistance if the executives employment also terminates within 24 months after a
change in control. Like the severance agreement of Messrs. Gasior and Carney, Mr. Lucidos
severance agreement provides that he shall be entitled to an 80% excise tax gross-up benefit if the
total of his benefits after a change in control equals or exceeds the level at which excise taxes
are imposed under Internal Revenue Code sections 280G and 4999. Mr. Ferets severance agreement
provides for a similar cash benefit in an amount equal to the sum of his salary and most recent
bonus, payable if a change in control occurs. Unlike the other agreements, however, the term of
Mr. Ferets agreement is a fixed two-year term, the agreement provides for no excise tax gross-up
benefit or miscellaneous benefits if employment also terminates after a change in control, and Mr.
Ferets agreement alone also provides for a cash severance benefit for termination outside of the
context of a change in control. That is, if Mr. Ferets employment terminates involuntarily but
without cause or voluntarily because of an adverse change in employment circumstances to which Mr.
Feret has not agreed in advance, in either case before a change in control occurs, he will be
entitled to a cash severance benefit in an amount equal to the sum of his salary plus his average
cash bonus. Mr. Ferets agreement provides that by the end of the fixed two-year term he and
Cortland Bancorp will use their best efforts to replace this severance agreement with a new
severance agreement on substantially the same terms as the severance agreements of Messrs. Gasior
and Carney.
Consistent with the revised management organizational structure that Cortland Bancorp
announced in January, the severance agreements of Officers Marlene J. Lenio, Craig M. Phythyon,
Barbara R. Sandrock, and Steven A. Telego Sr. have terminated. Having voluntarily terminated
employment effective March 31, 2010, Officer Danny L. Whites severance, salary continuation, and
endorsement split dollar agreements also have terminated.
Salary Continuation Agreements. The salary continuation agreements of Messrs. Lucido and
Feret with The Cortland Savings and Banking Company are essentially identical to each other,
providing for a normal retirement age benefit of $80,900 for Mr. Lucido and $92,000 for Mr. Feret,
payable in each case in monthly installments beginning at the age 65 normal retirement age and
continuing for 15 years. A reduced benefit is payable for termination before normal retirement
age. If the employment of either executive terminates involuntarily but
without cause or voluntarily because of an adverse change in employment circumstances, in
either case within 24 months after a change in control, instead of annual retirement benefits the
executive would receive in a single lump sum the amount accrued by the bank to account for its
liabilities under the salary continuation agreement. If Messrs. Lucido and Feret incur legal
expenses to resist a challenge to the salary continuation agreements after a change in control,
each of them would be entitled to legal fee reimbursement in an amount up to $500,000.
The Fourth Amended Salary Continuation Agreements with each of Messrs. Gasior and Carney
provide for an increased annual benefit payable at normal retirement age. Rather than forfeiting
all salary continuation benefits for employment termination occurring before age 62, the amended
salary continuation agreements provide that each of Messrs. Gasior and Carney will be entitled to a
reduced annual retirement benefit for termination before age 62 if employment termination is
involuntary but without cause or voluntary because of an adverse change in employment circumstances
to which he did not consent in advance. Mr. Carneys amended agreement also provides that his
change-in-control benefit entitlement is a single-trigger benefit rather than a double-trigger
benefit, meaning he will be entitled to the change-in-control benefit if a change in control occurs
while he is employed by the bank, rather than being entitled to the benefit solely for termination
occurring within 24 months after a change in control. The change-in-control benefit of Messrs.
Gasior and Carney is unchanged: the liability accrual that must exist at their age 65 normal
retirement age to account for the banks obligation under the salary continuation agreement,
discounted to present value.
Consistent with the revised management organizational structure that Cortland Bancorp
announced in January, the salary continuation agreements of Officers Marlene J. Lenio, Craig M.
Phythyon, and Steven A. Telego Sr. have been amended, with the result that the benefit payable to
these officers under the agreements is a fixed amount based on the lesser of (x) the liability
accrual balance existing on December 31, 2009 and (y) $120,000. However, their salary continuation
agreement benefits are no longer conditional on their continued service to age 62. The split
dollar agreements of each of these officers has also terminated, eliminating their right to
designate the beneficiary of a portion of the death benefits payable under policies owned by the
bank on their lives.
Exhibits. The agreements referred to in this item 5.02(e) are attached or incorporated by
reference as exhibits. The preceding summary of the agreements is qualified in its entirety by
reference to the exhibits attached hereto or incorporated herein by reference.
Item 9.01(d) Exhibits
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*10.17
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Fourth Amended Salary Continuation Agreement between The Cortland Savings and Banking
Company and Timothy Carney (filed herewith) |
*10.19
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Fourth Amended Salary Continuation Agreement between The Cortland Savings and Banking
Company and James M. Gasior (filed herewith) |
*10.20.1
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Amendment of the December 3, 2008 Second Amended Salary Continuation Agreement between The
Cortland Savings and Banking Company and Marlene J. Lenio (incorporated by reference to
Exhibit 10.20.1 to Cortland Bancorps Form 10-Q Quarterly Report for the quarter ended March 31, 2010, filed on May 17, 2010) |
*10.21.1
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Amendment of the December 3, 2008 Amended Salary Continuation Agreement between The
Cortland Savings and Banking Company and Craig M. Phythyon (incorporated by reference to
Exhibit 10.21.1 to Cortland Bancorps Form 10-Q Quarterly Report for the quarter ended March
31, 2010, filed on May 17, 2010) |
*10.22.1
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Amendment of the December 3, 2008 Third Amended Salary Continuation Agreement between The
Cortland Savings and Banking Company and Stephen A. Telego Sr. (incorporated by reference to
Exhibit 10.22.1 to Cortland Bancorps Form 10-Q Quarterly Report for the quarter ended March
31, 2010, filed on May 17, 2010) |
*10.23
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Salary Continuation Agreement between The Cortland Savings and
Banking Company and David J. Lucido (filed herewith) |
*10.25
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Salary Continuation Agreement between The Cortland Savings and
Banking Company and Stanley P. Feret (filed herewith) |
*10.27.1
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Termination of Split Dollar Agreement and Endorsement between The Cortland Savings and
Banking Company and Marlene J. Lenio (incorporated by reference to Exhibit 10.27.1 to Cortland
Bancorps Form 10-Q Quarterly Report for the quarter ended March 31, 2010, filed on May 17,
2010) |
*10.28.1
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Termination of Split Dollar Agreement and Endorsement between The
Cortland Savings and Banking Company and Craig M. Phythyon
(incorporated by reference to Exhibit 10.28.1 to Cortland
Bancorps Form 10-Q Quarterly Report for the quarter ended March
31, 2010, filed on May 17, 2010) |
*10.29.1
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Termination of Split Dollar Agreement and Endorsement between The
Cortland Savings and Banking Company and Steven A. Telego Sr.
(incorporated by reference to Exhibit 10.29.1 to Cortland
Bancorps Form 10-Q Quarterly Report for the quarter ended March
31, 2010, filed on May 17, 2010) |
*10.31
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Severance Agreement entered into by Cortland Bancorp with each of Messrs. Timothy Carney,
James M. Gasior, and David J. Lucido (incorporated by reference to Exhibit 10.31 to Cortland
Bancorps Form 8-K Current Report filed on December 12, 2008) |
*10.32.1
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Termination of Severance Agreement entered into by each of Mses. Marlene J. Lenio and
Barbara R. Sandrock and Messrs. Craig M. Phythyon and Steven A. Telego Sr. (incorporated by
reference to Exhibit 10.32.1 to Cortland Bancorps Form 10-Q Quarterly Report for the quarter
ended March 31, 2010, filed on May 17, 2010) |
*10.34
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Severance Agreement between Cortland Bancorp and Stanley P. Feret (filed herewith) |
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Management contract or compensatory plan or arrangement |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Cortland Bancorp
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Date: June 1, 2010 |
/s/ James M. Gasior
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James M. Gasior |
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President and Chief Executive Officer |
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Cortland Bancorp
CURRENT REPORT ON FORM 8-K
INDEX OF EXHIBITS
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Exhibit No. |
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Description of Exhibit |
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*10.17
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Fourth Amended Salary Continuation Agreement between The
Cortland Savings and Banking Company and Timothy Carney (filed
herewith) |
*10.19
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Fourth Amended Salary Continuation Agreement between The
Cortland Savings and Banking Company and James M. Gasior
(filed herewith) |
*10.20.1
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Amendment of the December 3, 2008 Second Amended Salary Continuation Agreement between The
Cortland Savings and Banking Company and Marlene J. Lenio (incorporated by reference to
Exhibit 10.20.1 to Cortland Bancorps Form 10-Q Quarterly Report for the quarter ended March
31, 2010, filed on May 17, 2010) |
*10.21.1
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Amendment of the December 3, 2008 Amended Salary Continuation Agreement between The
Cortland Savings and Banking Company and Craig M. Phythyon (incorporated by reference to
Exhibit 10.21.1 to Cortland Bancorps Form 10-Q Quarterly Report for the quarter ended March
31, 2010, filed on May 17, 2010) |
*10.22.1
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Amendment of the December 3, 2008 Third Amended Salary Continuation Agreement between The
Cortland Savings and Banking Company and Stephen A. Telego Sr. (incorporated by reference to
Exhibit 10.22.1 to Cortland Bancorps Form 10-Q Quarterly Report for the quarter ended March
31, 2010, filed on May 17, 2010) |
*10.23
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Salary Continuation Agreement between The Cortland Savings and
Banking Company and David J. Lucido (filed herewith) |
*10.25
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Salary Continuation Agreement between The Cortland Savings and
Banking Company and Stanley P. Feret (filed herewith) |
*10.27.1
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Termination of Split Dollar Agreement and Endorsement between The Cortland Savings and
Banking Company and Marlene J. Lenio (incorporated by reference to Exhibit 10.27.1 to Cortland
Bancorps Form 10-Q Quarterly Report for the quarter ended March 31, 2010, filed on May 17,
2010) |
*10.28.1
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Termination of Split Dollar Agreement and Endorsement between The
Cortland Savings and Banking Company and Craig M. Phythyon
(incorporated by reference to Exhibit 10.28.1 to Cortland
Bancorps Form 10-Q Quarterly Report for the quarter ended March
31, 2010, filed on May 17, 2010) |
*10.29.1
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Termination of Split Dollar Agreement and Endorsement between The
Cortland Savings and Banking Company and Steven A. Telego Sr.
(incorporated by reference to Exhibit 10.29.1 to Cortland
Bancorps Form 10-Q Quarterly Report for the quarter ended March
31, 2010, filed on May 17, 2010) |
*10.31
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Severance Agreement entered into by Cortland Bancorp with each of
Messrs. Timothy Carney, James M. Gasior, and David J. Lucido
(incorporated by reference to Exhibit 10.31 to Cortland Bancorps
Form 8-K Current Report filed on December 12, 2008) |
*10.32.1
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Termination of Severance Agreement entered into by each of Mses.
Marlene J. Lenio and Barbara R. Sandrock and Messrs. Craig M.
Phythyon and Steven A. Telego Sr. (incorporated by reference to
Exhibit 10.32.1 to Cortland Bancorps Form 10-Q Quarterly Report
for the quarter ended March 31, 2010, filed on May 17, 2010) |
*10.34
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Severance Agreement between Cortland Bancorp and Stanley P. Feret
(filed herewith) |
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Management contract or compensatory plan or arrangement |