Common use of Payment of Legal Fees Clause in Contracts

Payment of Legal Fees. Cortland Bancorp is aware that after a Change in Control management could cause or attempt to cause Cortland Bancorp to refuse to comply with its obligations under this Agreement, or could institute or cause or attempt to cause Cortland Bancorp 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. Cortland Bancorp desires that the Executive not be required to incur the expenses associated with the 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. Cortland Bancorp 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 occurs it appears to the Executive that (x) Cortland Bancorp has failed to comply with any of its obligations under this Agreement or (y) Cortland Bancorp or any other person has taken any action to declare this Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunder, Cortland Bancorp irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s choice, at Cortland Bancorp’s expense as provided in this section 7, to represent the Executive in the initiation or defense of any litigation or other legal action, whether by or against Cortland Bancorp or any director, officer, stockholder, or other person affiliated with Cortland Bancorp, in any jurisdiction. Despite any existing or previous attorney-client relationship between Cortland Bancorp and any counsel chosen by the Executive under this section 7, Cortland Bancorp irrevocably consents to the Executive entering into an attorney-client relationship with that counsel, and Cortland Bancorp and the Executive agree that a confidential relationship shall exist between the Executive and that counsel. The fees and expenses of counsel selected from time to time by the Executive as provided in this section shall be paid or reimbursed to the Executive by Cortland Bancorp 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, up to a maximum aggregate amount of $500,000, whether suit be brought or not, and whether or not incurred in trial, bankruptcy, or appellate proceedings. Cortland Bancorp’s obligation to pay the Executive’s legal fees under this section 7 operates separately from and in addition to any legal fee reimbursement obligation Cortland Bancorp may have with the Executive under any separate salary continuation or other agreement. Despite anything in this Agreement to the contrary, however, Cortland Bancorp shall not be required to pay or reimburse the Executive’s legal expenses if doing so would violate 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].

Payment of Legal Fees. Cortland Bancorp BNC is aware that after a Change in Control management could cause or attempt to cause Cortland Bancorp BNC to refuse to comply with its obligations under this Employment Agreement, or could institute or cause or attempt to cause Cortland Bancorp BNC to institute litigation seeking to have this Employment Agreement declared unenforceable, or could take or attempt to take other action to deny Executive the benefits intended under this Employment Agreement. In these circumstances, the purpose of this Employment Agreement would be frustrated. Cortland Bancorp desires It is BNC’s intention that the Executive not be required to incur the expenses associated with the enforcement of his rights under this Employment 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. Cortland Bancorp desires It is BNC’s intention that the Executive not be forced to negotiate settlement of his rights under this Employment Agreement under threat of incurring expenses. Accordingly, if after a Change in Control occurs it appears to the Executive that (xa) Cortland Bancorp BNC has failed to comply with any of its obligations under this Agreement Employment Agreement, or (yb) Cortland Bancorp BNC or any other person has taken any action to declare this Employment Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunder, Cortland Bancorp BNC irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s his choice, at Cortland BancorpBNC’s expense as provided in this section 7Section 9.9, to represent the Executive in connection with the initiation or defense of any litigation or other legal action, whether by or against Cortland Bancorp BNC or any director, officer, stockholder, or other person affiliated with Cortland BancorpBNC, in any jurisdiction. Despite Notwithstanding any existing or previous attorney-client relationship between Cortland Bancorp BNC and any counsel chosen by the Executive under this section 7Section 9.9, Cortland Bancorp BNC irrevocably consents to the Executive entering into an attorney-client relationship with that counsel, and Cortland Bancorp BNC and the Executive agree that a confidential relationship shall exist between the Executive and that counsel. The fees and expenses of counsel selected from time to time by the Executive as provided in this section shall be paid or reimbursed to the Executive by Cortland Bancorp BNC on a regular, periodic basis upon presentation by the Executive of a statement or statements prepared by such counsel in accordance with such counsel’s customary practices, up to a maximum aggregate amount of $500,000, whether suit be brought or not, and whether or not incurred in trial, bankruptcy, or appellate proceedings. Cortland BancorpBNC’s obligation to pay the Executive’s legal fees under provided by this section 7 Section 9.9 operates separately from and in addition to any legal fee reimbursement obligation Cortland BNC Bancorp or Bank of North Carolina may have with the Executive under any separate salary continuation severance or other agreement. Despite anything in this Agreement to the contrary, however, Cortland Bancorp shall not be required to pay or reimburse the Executive’s legal expenses if doing so would violate 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].

Payment of Legal Fees. Cortland Bancorp Cape Fear Bank Corporation is aware that after a Change in Control management could cause or attempt to cause Cortland Bancorp Cape Fear Bank Corporation to refuse to comply with its obligations under this Severance Agreement, or could institute or cause or attempt to cause Cortland Bancorp Cape Fear Bank Corporation to institute litigation seeking to have this Severance Agreement declared unenforceable, or could take or attempt to take other action to deny Executive the benefits intended under this Severance Agreement. In these circumstances, the purpose of this Severance Agreement would be frustrated. Cortland Bancorp desires It is Cape Fear Bank Corporation’s intention that the Executive not be required to incur the expenses associated with the enforcement of rights under this Severance 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. Cortland Bancorp desires It is Cape Fear Bank Corporation’s intention that the Executive not be forced to negotiate settlement of rights under this Severance Agreement under threat of incurring expenses. Accordingly, if after a Change in Control occurs it appears to the Executive that (x) Cortland Bancorp Cape Fear Bank Corporation has failed to comply with any of its obligations under this Agreement Severance Agreement, or (y) Cortland Bancorp Cape Fear Bank Corporation or any other person has taken any action to declare this Severance Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunder, Cortland Bancorp Cape Fear Bank Corporation irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s choice, at Cortland BancorpCape Fear Bank Corporation’s expense as provided in this section 716, to represent the Executive in connection with the initiation or defense of any litigation or other legal action, whether by or against Cortland Bancorp Cape Fear Bank Corporation or any director, officer, stockholder, or other person affiliated with Cortland BancorpCape Fear Bank Corporation, in any jurisdiction. Despite Notwithstanding any existing or previous attorney-client relationship between Cortland Bancorp Cape Fear Bank Corporation and any counsel chosen by the Executive under this section 716, Cortland Bancorp Cape Fear Bank Corporation irrevocably consents to the Executive entering into an attorney-client relationship with that counsel, and Cortland Bancorp Cape Fear Bank Corporation and the Executive agree that a confidential relationship shall exist between the Executive and that counsel. The fees and expenses of counsel selected from time to time by the Executive as provided in this section shall be paid or reimbursed to the Executive by Cortland Bancorp Cape Fear Bank Corporation on a regular, periodic basis upon presentation by the Executive of a statement or statements prepared by such counsel in accordance with such counsel’s customary practices, up to a maximum aggregate amount of $500,000100,000, whether suit be brought or not, and whether or not incurred in trial, bankruptcy, or appellate proceedings. Cortland BancorpCape Fear Bank Corporation’s obligation to pay the Executive’s legal fees under this section 7 16 operates separately from and in addition to any legal fee reimbursement obligation Cortland Bancorp Cape Fear Bank Corporation may have with the Executive under any separate salary continuation severance or other agreement. Despite anything in any contrary provision of this Severance Agreement to the contrary, however, Cortland Bancorp Cape Fear Bank Corporation shall not be required to pay or reimburse the Executive’s legal expenses if doing so would violate 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].

Payment of Legal Fees. Cortland Bancorp is aware that after a Change in Control management could cause or attempt to cause Cortland Bancorp to refuse to comply with its obligations under this Agreement, or could institute or cause or attempt to cause Cortland Bancorp to institute litigation seeking to have this Agreement declared unenforceable, or could take or attempt to take other action to deny the Executive the benefits intended under this Agreement. In these circumstances, circumstances the purpose of this Agreement would be frustrated. Cortland Bancorp desires that the Executive not be required to incur the expenses associated with the 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. Cortland Bancorp 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 occurs it appears to the Executive that (x) Cortland Bancorp has failed to comply with any of its obligations under this Agreement or (y) Cortland Bancorp or any other person has taken any action to declare this Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunder, Cortland Bancorp irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s choice, at Cortland Bancorp’s expense as provided in this section 7, to represent the Executive in the initiation or defense of any litigation or other legal action, whether by or against Cortland Bancorp or any director, officer, stockholder, or other person affiliated with Cortland Bancorp, in any jurisdiction. Despite Regardless of any existing or previous attorney-client relationship between Cortland Bancorp and any counsel chosen by the Executive under this section 7, Cortland Bancorp irrevocably consents to the Executive entering into an attorney-client relationship with that counsel, and Cortland Bancorp and the Executive agree that a confidential relationship shall exist exists between the Executive and that counsel. The fees and expenses of counsel selected from time to time by the Executive as provided in this section shall will be paid or reimbursed to the Executive by Cortland Bancorp 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, up to a maximum aggregate amount of $500,000, whether suit be is brought or not, and regardless of whether or not incurred in trial, bankruptcy, or appellate proceedings. Cortland Bancorp’s obligation to pay payment or reimbursement of the Executive’s legal 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” for purposes of Internal Revenue Code section 409A on the date of termination, payment under this section 7 operates separately from and will be made on the first day of the seventh month after the month in addition to any legal fee reimbursement obligation Cortland Bancorp may have with the Executive under any separate salary continuation or other agreement. Despite anything in this Agreement to the contrary, however, Cortland Bancorp shall not be required to pay or reimburse which the Executive’s legal expenses if doing so would violate 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].termination

Payment of Legal Fees. Cortland Bancorp Cape Fear Bank Corporation is aware that after a Change in Control management could cause or attempt to cause Cortland Bancorp Cape Fear Bank Corporation to refuse to comply with its obligations under this Severance Agreement, or could institute or cause or attempt to cause Cortland Bancorp Cape Fear Bank Corporation to institute litigation seeking to have this Severance Agreement declared unenforceable, or could take or attempt to take other action to deny Executive the benefits intended under this Severance Agreement. In these circumstances, the purpose of this Severance Agreement would be frustrated. Cortland Bancorp desires It is Cape Fear Bank Corporation’s intention that the Executive not be required to incur the expenses associated with the enforcement of rights under this Severance 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. Cortland Bancorp desires It is Cape Fear Bank Corporation’s intention that the Executive not be forced to negotiate settlement of rights under this Severance Agreement under threat of incurring expenses. Accordingly, if after a Change in Control occurs it appears to the Executive that (x) Cortland Bancorp Cape Fear Bank Corporation has failed to comply with any of its obligations under this Agreement Severance Agreement, or (y) Cortland Bancorp Cape Fear Bank Corporation or any other person has taken any action to declare this Severance Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunder, Cortland Bancorp Cape Fear Bank Corporation irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s choice, at Cortland BancorpCape Fear Bank Corporation’s expense as provided in this section 716, to represent the Executive in connection with the initiation or defense of any litigation or other legal action, whether by or against Cortland Bancorp Cape Fear Bank Corporation or any director, officer, stockholder, or other person affiliated with Cortland BancorpCape Fear Bank Corporation, in any jurisdiction. Despite Notwithstanding any existing or previous attorney-client relationship between Cortland Bancorp Cape Fear Bank Corporation and any counsel chosen by the Executive under this section 716, Cortland Bancorp Cape Fear Bank Corporation irrevocably consents to the Executive entering into an attorney-client relationship with that counsel, and Cortland Bancorp Cape Fear Bank Corporation and the Executive agree that a confidential relationship shall exist between the Executive and that counsel. The fees and expenses of counsel selected from time to time by the Executive as provided in this section shall be paid or reimbursed to the Executive by Cortland Bancorp Cape Fear Bank Corporation on a regular, periodic basis upon presentation by the Executive of a statement or statements prepared by such counsel in accordance with such counsel’s customary practices, up to a maximum aggregate amount of $500,000100,000, whether suit be brought or not, and whether or not incurred in trial, bankruptcy, or appellate proceedings. Cortland BancorpCape Fear Bank Corporation’s obligation to pay the Executive’s legal fees under this section 7 16 operates separately from and in addition to any legal fee reimbursement obligation Cortland Bancorp Cape Fear Bank Corporation may have with the Executive under any separate salary continuation or other agreement. Despite anything in any contrary provision of this Severance Agreement to the contrary, however, Cortland Bancorp Cape Fear Bank Corporation shall not be required to pay or reimburse the Executive’s legal expenses if doing so would violate 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].

Payment of Legal Fees. Cortland Bancorp is aware that after a Change in Control management could cause or attempt to cause Cortland Bancorp to refuse to comply with its obligations under this Agreement, or could institute or cause or attempt to cause Cortland Bancorp 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, circumstances the purpose of this Agreement would be frustrated. Cortland Bancorp desires that the Executive not be required to incur the expenses associated with the 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. Cortland Bancorp 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 occurs it appears to the Executive that (x) Cortland Bancorp has failed to comply with any of its obligations under this Agreement or (y) Cortland Bancorp or any other person has taken any action to declare this Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunder, Cortland Bancorp irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s choice, at Cortland Bancorp’s expense as provided in this section 76, to represent the Executive in the initiation or defense of any litigation or other legal action, whether by or against Cortland Bancorp or any director, officer, stockholder, or other person affiliated with Cortland Bancorp, in any jurisdiction. Despite any existing or previous attorney-client relationship between Cortland Bancorp and any counsel chosen by the Executive under this section 76, Cortland Bancorp irrevocably consents to the Executive entering into an attorney-client relationship with that counsel, and Cortland Bancorp and the Executive agree that a confidential relationship shall exist exists between the Executive and that counsel. The fees and expenses of counsel selected from time to time by the Executive as provided in this section shall will be paid or reimbursed to the Executive by Cortland Bancorp 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, up to a maximum aggregate amount of $500,000, whether suit be is brought or not, and regardless of whether or not incurred in trial, bankruptcy, or appellate proceedings. Cortland Bancorp’s obligation to pay the Executive’s legal fees under this section 7 6 operates separately from and in addition to any legal fee reimbursement obligation Cortland Bancorp may have with the Executive under any separate severance, employment, salary continuation continuation, or other agreement. Despite anything in this Agreement to the contrary, however, Cortland Bancorp shall is not be required to pay or reimburse the Executive’s legal expenses if doing so would violate 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].

Payment of Legal Fees. Cortland Bancorp is aware that after a Change in Control management could cause or attempt to cause Cortland Bancorp to refuse to comply with its obligations under this Agreement, or could institute or cause or attempt to cause Cortland Bancorp 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, circumstances the purpose of this Agreement would be frustrated. Cortland Bancorp desires that the Executive not be required to incur the expenses associated with the 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. Cortland Bancorp 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 occurs it appears to the Executive that (x) Cortland Bancorp has failed to comply with any of its obligations under this Agreement or (y) Cortland Bancorp or any other person has taken any action to declare this Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunder, Cortland Bancorp irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s choice, at Cortland Bancorp’s expense as provided in this section 7, to represent the Executive in the initiation or defense of any litigation or other legal action, whether by or against Cortland Bancorp or any director, officer, stockholder, or other person affiliated with Cortland Bancorp, in any jurisdiction. Despite any existing or previous attorney-client relationship between Cortland Bancorp and any counsel chosen by the Executive under this section 7, Cortland Bancorp irrevocably consents to the Executive entering into an attorney-client relationship with that counsel, and Cortland Bancorp and the Executive agree that a confidential relationship shall exist exists between the Executive and that counsel. The fees and expenses of counsel selected from time to time by the Executive as provided in this section shall will be paid or reimbursed to the Executive by Cortland Bancorp 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, up to a maximum aggregate amount of $500,000, whether suit be is brought or not, and regardless of whether or not incurred in trial, bankruptcy, or appellate proceedings. Cortland Bancorp’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” for purposes of Internal Revenue Code section 409A on the date of termination, payment under this section 7 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 Internal Revenue Code section 409A is not available. The Executive’s right to payment or reimbursement under this section 7 is not subject to liquidation or exchange for another benefit. Cortland Bancorp’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. Cortland Bancorp’s obligation to pay the Executive’s legal fees under this section 7 operates separately from and in addition to any legal fee reimbursement obligation Cortland Bancorp may have with the Executive under any separate severance, employment, salary continuation continuation, or other agreement. Despite anything in this Agreement to the contrary, however, Cortland Bancorp shall is not be required to pay or reimburse the Executive’s legal expenses if doing so would violate 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].

Payment of Legal Fees. Cortland Bancorp Middlefield is aware that after a Change in Control management could cause or attempt to cause Cortland Bancorp Middlefield to refuse to comply with its obligations under this Severance Agreement, or could institute or cause or attempt to cause Cortland Bancorp Middlefield to institute litigation seeking to have this Severance Agreement declared unenforceable, or could take or attempt to take other action to deny Executive the benefits intended under this Severance Agreement. In these circumstances, the purpose of this Severance Agreement would be frustrated. Cortland Bancorp desires It is Middlefield’s intention that the Executive not be required to incur the expenses associated with the enforcement of rights under this Severance 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. Cortland Bancorp desires It is Middlefield’s intention that the Executive not be forced to negotiate settlement of rights under this Severance Agreement under threat of incurring expenses. Accordingly, if after a Change in Control occurs it appears to the Executive that (x) Cortland Bancorp Middlefield has failed to comply with any of its obligations under this Agreement Severance Agreement, or (y) Cortland Bancorp Middlefield or any other person has taken any action to declare this Severance Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunder, Cortland Bancorp Middlefield irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s choice, at Cortland BancorpMiddlefield’s expense as provided in this section 7, to represent the Executive in connection with the initiation or defense of any litigation or other legal action, whether by or against Cortland Bancorp Middlefield or any director, officer, stockholder, or other person affiliated with Cortland BancorpMiddlefield, in any jurisdiction. Despite any existing or previous attorney-attorney client relationship between Cortland Bancorp Middlefield and any counsel chosen by the Executive under this section 7, Cortland Bancorp Middlefield irrevocably consents to the Executive entering into an attorney-attorney client relationship with that counsel, counsel and Cortland Bancorp Middlefield and the Executive agree that a confidential relationship shall exist between the Executive and that counsel. The fees and expenses of counsel selected from time to time by the Executive as provided in this section shall be paid or reimbursed to the Executive by Cortland Bancorp Middlefield on a regular, periodic basis upon presentation by the Executive of a statement or statements prepared by such counsel in accordance with such counsel’s customary practices, up to a maximum aggregate amount of $500,000, whether suit be brought or not, and whether or not incurred in trial, bankruptcy, or appellate proceedings. Cortland BancorpMiddlefield’s obligation to pay the Executive’s legal fees under this section 7 operates separately from and in addition to any legal fee reimbursement obligation Cortland Bancorp Middlefield may have with the Executive under any separate salary continuation severance or other agreement. Despite anything in any contrary provision of this Severance Agreement to the contrary, however, Cortland Bancorp Middlefield shall not be required to pay or reimburse the Executive’s legal expenses if doing so would violate 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].

Payment of Legal Fees. Cortland Bancorp is aware that after a Change in Control management could cause or attempt to cause Cortland Bancorp to refuse to comply with its obligations under this Agreement, or could institute or cause or attempt to cause Cortland Bancorp 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, circumstances the purpose of this Agreement would be frustrated. Cortland Bancorp desires that the Executive not be required to incur the expenses associated with the 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. Cortland Bancorp 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 occurs it appears to the Executive that (x) Cortland Bancorp has failed to comply with any of its obligations under this Agreement or (y) Cortland Bancorp or any other person has taken any action to declare this Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunder, Cortland Bancorp irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s choice, at Cortland Bancorp’s expense as provided in this section 7, to represent the Executive in the initiation or defense of any litigation or other legal action, whether by or against Cortland Bancorp or any director, officer, stockholder, or other person affiliated with Cortland Bancorp, in any jurisdiction. Despite any existing or previous attorney-client relationship between Cortland Bancorp and any counsel chosen by the Executive under this section 7, Cortland Bancorp irrevocably consents to the Executive entering into an attorney-client relationship with that counsel, and Cortland Bancorp and the Executive agree that a confidential relationship shall exist between the Executive and that counsel. The fees and expenses of counsel selected from time to time by the Executive as provided in this section shall be paid or reimbursed to the Executive by Cortland Bancorp 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, up to a maximum aggregate amount of $500,000, whether suit be brought or not, and whether or not incurred in trial, bankruptcy, or appellate proceedings. Cortland Bancorp’s obligation to pay the Executive’s legal fees under this section 7 operates separately from and in addition to any legal fee reimbursement obligation Cortland Bancorp may have with the Executive under any separate salary continuation or other agreement. Despite anything in this Agreement to the contrary, contrary however, Cortland Bancorp shall not be required to pay or reimburse the Executive’s legal expenses if doing so would violate 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].

Payment of Legal Fees. Cortland Bancorp is aware that after a Change in Control management could cause or attempt to cause Cortland Bancorp to refuse to comply with its obligations under this Agreement, or could institute or cause or attempt to cause Cortland Bancorp 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. Cortland Bancorp desires that the Executive not be required to incur the expenses associated with the 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. Cortland Bancorp 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 occurs it appears to the Executive that (x) Cortland Bancorp has failed to comply with any of its obligations under this Agreement or (y) Cortland Bancorp or any other person has taken any action to declare this Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunder, Cortland Bancorp irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s choice, at Cortland Bancorp’s expense as provided in this section 7, to represent the Executive in the initiation or defense of any litigation or other legal action, whether by or against Cortland Bancorp or any director, officer, stockholder, or other person affiliated with Cortland Bancorp, in any jurisdiction. Despite any existing or previous attorney-client relationship between Cortland Bancorp and any counsel chosen by the Executive under this section 7, Cortland Bancorp irrevocably consents to the Executive entering into an attorney-client relationship with that counsel, and Cortland Bancorp and the Executive agree that a confidential relationship shall exist between the Executive and that counsel. The fees and expenses of counsel selected from time to time by the Executive as provided in this section shall be paid or reimbursed to the Executive by Cortland Bancorp 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, up to a maximum aggregate amount of $500,000, whether suit be brought or not, and whether or not incurred in trial, bankruptcy, or appellate proceedings. Cortland Bancorp’s obligation to pay the Executive’s legal fees under this section 7 operates separately from and in addition to any legal fee reimbursement obligation Cortland Bancorp may have with the Executive under any separate salary continuation or other agreement. Despite anything in this Agreement to the contrary, contrary however, Cortland Bancorp shall not be required to pay or reimburse the Executive’s legal expenses if doing so would violate 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]. Despite anything in this Agreement to the contrary, however, the Executive shall not be entitled under this Agreement to any benefit specified in this section 7 for which the Executive is entitled to a substantially identical benefit under section 7 of the June 1, 2010 Severance Agreement.

Payment of Legal Fees. Cortland Bancorp BNC is aware that after a Change in Control management could cause or attempt to cause Cortland Bancorp BNC to refuse to comply with its obligations under this Employment Agreement, or could institute or cause or attempt to cause Cortland Bancorp BNC to institute litigation seeking to have this Employment Agreement declared unenforceable, or could take or attempt to take other action to deny Executive the benefits intended under this Employment Agreement. In these circumstances, the purpose of this Employment Agreement would be frustrated. Cortland Bancorp desires It is BNC's intention that the Executive not be required to incur the expenses associated with the enforcement of his rights under this Employment 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. Cortland Bancorp desires It is BNC's intention that the Executive not be forced to negotiate settlement of his rights under this Employment Agreement under threat of incurring expenses. Accordingly, if after a Change in Control occurs it appears to the Executive that (xa) Cortland Bancorp BNC has failed to comply with any of its obligations under this Agreement Employment Agreement, or (yb) Cortland Bancorp BNC or any other person has taken any action to declare this Employment Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunder, Cortland Bancorp BNC irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s his choice, at Cortland Bancorp’s BNC's expense as provided in this section 77.9, to represent the Executive in connection with the initiation or defense of any litigation or other legal action, whether by or against Cortland Bancorp BNC or any director, officer, stockholder, or other person affiliated with Cortland BancorpBNC, in any jurisdiction. Despite Notwithstanding any existing or previous attorney-client relationship between Cortland Bancorp BNC and any counsel chosen by the Executive under this section 77.9, Cortland Bancorp BNC irrevocably consents to the Executive entering into an attorney-client relationship with that counsel, and Cortland Bancorp BNC and the Executive agree that a confidential relationship shall exist between the Executive and that counsel. The fees and expenses of counsel selected from time to time by the Executive as provided in this section shall be paid or reimbursed to the Executive by Cortland Bancorp BNC on a regular, periodic basis upon presentation by the Executive of a statement or statements prepared by such counsel in accordance with such counsel’s 's customary practices, up to a maximum aggregate amount of $500,000, whether suit be brought or not, and whether or not incurred in trial, bankruptcy, or appellate proceedings. Cortland Bancorp’s BNC's obligation to pay the Executive’s 's legal fees under provided by this section 7 7.9 operates separately from and in addition to any legal fee reimbursement obligation Cortland BNC Bancorp or Bank of North Carolina may have with the Executive under any separate salary continuation severance or other agreement. Despite anything Anything in this Agreement section 7.9 to the contrary, contrary notwithstanding however, Cortland Bancorp BNC shall not be required to pay or reimburse the Executive’s 's legal expenses if doing so would violate 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].

Payment of Legal Fees. Cortland Bancorp The Employer is aware that after a Change in Control management could cause or attempt to cause Cortland Bancorp the Employer to refuse to comply with its obligations under this AgreementAgreement or the Split-Dollar Insurance Agreement referred to in section 2.3 or the Salary Continuation Agreement referred to in section 2.6, or could institute or cause or attempt to cause Cortland Bancorp the Employer to institute litigation seeking to have this Agreement or the Split-Dollar Insurance Agreement or the Salary Continuation Agreement declared unenforceable, or could take or attempt to take other action to deny Executive the benefits intended under this Agreement and the Split-Dollar Insurance Agreement and the Salary Continuation Agreement. In these circumstances, circumstances the purpose of this Agreement, the Split-Dollar Insurance Agreement, and the Salary Continuation Agreement would be frustrated. Cortland Bancorp The Employer desires that the Executive not be required to incur the expenses associated with the enforcement of rights under this Agreement, the Split-Dollar Insurance Agreement, or the Salary Continuation 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. Cortland Bancorp The Employer desires that the Executive not be forced to negotiate settlement of rights under this Agreement, the Split-Dollar Insurance Agreement, or the Salary Continuation Agreement under threat of incurring expenses. Accordingly, if after a Change in Control occurs it appears to the Executive that (x) Cortland Bancorp the Employer has failed to comply with any of its obligations under this Agreement Agreement, the Split-Dollar Insurance Agreement, or the Salary Continuation Agreement, or (y) Cortland Bancorp the Employer or any other person has taken any action to declare this Agreement, the Split-Dollar Insurance Agreement, or the Salary Continuation Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunderhereunder or under the Split-Dollar Insurance Agreement or the Salary Continuation Agreement, Cortland Bancorp the Employer irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s 's choice, at Cortland Bancorp’s the Employer's expense as provided in this section 78.9, to represent the Executive in the initiation or defense of any litigation or other legal action, whether by or against Cortland Bancorp the Employer or any director, officer, stockholder, or other person affiliated with Cortland Bancorpthe Employer, in any jurisdiction. Despite any existing or previous attorney-client relationship between Cortland Bancorp the Employer and any counsel chosen by the Executive under this section 78.9, Cortland Bancorp the Employer irrevocably consents to the Executive entering into an attorney-client relationship with that counsel, and Cortland Bancorp the Employer and the Executive agree that a confidential relationship shall exist between the Executive and that counsel. The fees and expenses of counsel selected from time to time by the Executive as provided in this section shall be paid or reimbursed to the Executive by Cortland Bancorp the Employer on a regular, periodic basis upon presentation by the Executive of a statement or statements prepared by such counsel in accordance with such counsel’s 's customary practices, up to a maximum aggregate amount of $500,000, whether suit be brought or not, and whether or not incurred in trial, bankruptcy, or appellate proceedings. Cortland Bancorp’s The Employer's obligation to pay the Executive’s 's legal fees under this section 7 8.9 operates separately from and in addition to any legal fee reimbursement obligation Cortland Bancorp the Employer may have with the Executive under any separate salary continuation severance or other agreement. Despite anything in this Agreement section 8.9 to the contrary, contrary however, Cortland Bancorp the Employer shall not be required to pay or reimburse the Executive’s 's legal expenses if doing so would violate 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].

Payment of Legal Fees. Cortland Bancorp is aware that after a Change in Control management could cause or attempt to cause Cortland Bancorp to refuse to comply with its obligations under this Agreement, or could institute or cause or attempt to cause Cortland Bancorp 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, circumstances the purpose of this Agreement would be frustrated. Cortland Bancorp desires that the Executive not be required to incur the expenses associated with the 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. Cortland Bancorp 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 occurs it appears to the Executive that (x) Cortland Bancorp has failed to comply with any of its obligations under this Agreement or (y) Cortland Bancorp or any other person has taken any action to declare this Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from the Executive the benefits intended to be provided to the Executive hereunder, Cortland Bancorp irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s choice, at Cortland Bancorp’s expense as provided in this section 76, to represent the Executive in the initiation or defense of any litigation or other legal action, whether by or against Cortland Bancorp or any director, officer, stockholder, or other person affiliated with Cortland Bancorp, in any jurisdiction. Despite any existing or previous attorney-client relationship between Cortland Bancorp and any counsel chosen by the Executive under this section 76, Cortland Bancorp irrevocably consents to the Executive entering into an attorney-client relationship with that counsel, and Cortland Bancorp and the Executive agree that a confidential relationship shall exist between the Executive and that counsel. The fees and expenses of counsel selected from time to time by the Executive as provided in this section shall be paid or reimbursed to the Executive by Cortland Bancorp 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, up to a maximum aggregate amount of $500,000, whether suit be brought or not, and whether or not incurred in trial, bankruptcy, or appellate proceedings. Cortland Bancorp’s obligation to pay the Executive’s legal fees under this section 7 6 operates separately from and in addition to any legal fee reimbursement obligation Cortland Bancorp may have with the Executive under any separate salary continuation or other agreement. Despite anything in this Agreement to the contrary, contrary however, Cortland Bancorp shall not be required to pay or reimburse the Executive’s legal expenses if doing so would violate 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].

Payment of Legal Fees. Cortland Bancorp The Company is aware that after a Change in Control management could cause or attempt to cause Cortland Bancorp the Company to refuse to comply with its obligations under this Agreement, or could institute or cause or attempt to cause Cortland Bancorp the Company to institute litigation seeking to have this Agreement declared unenforceable, or could take or attempt to take other action to deny Executive Clineburg the benefits intended under this Agreement. In these circumstances, circumstances the purpose of this Agreement would be frustrated. Cortland Bancorp desires Accordingly, the Company intends that the Executive Clineburg not be required to incur the expenses associated with the 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 Clineburg hereunder. Cortland Bancorp desires The Company intends that the Executive Clineburg not be forced to negotiate settlement of rights under this Agreement under threat of incurring expenses. Accordingly, if If after a Change in Control occurs it appears to the Executive Clineburg that (x) Cortland Bancorp has failed the Company is failing to comply with any of its obligations under this Agreement or (y) Cortland Bancorp the Company or any other person has taken is taking any action to declare this Agreement void or unenforceable, or instituted instituting any litigation or other legal action designed to deny, diminish, or to recover from the Executive the Clineburg benefits intended to be provided to the Executive Clineburg hereunder, Cortland Bancorp the Company hereby irrevocably authorizes the Executive from time to time Clineburg to retain counsel of the ExecutiveClineburg’s choice, at Cortland Bancorpthe Company’s expense as provided in this section 77.10, to represent the Executive Clineburg in the initiation or defense of any litigation or other legal action, whether by or against Cortland Bancorp the Company or any director, officer, stockholder, or other person affiliated with Cortland Bancorpthe Company, in any jurisdiction. Despite any existing or previous attorney-client relationship between Cortland Bancorp the Company and any counsel chosen by the Executive Clineburg under this section 77.10, Cortland Bancorp the Company hereby irrevocably consents to the Executive Clineburg entering into an attorney-client relationship with that counsel, and Cortland Bancorp the Company and the Executive Clineburg agree that a confidential relationship shall exist exists between the Executive Clineburg and that counsel. The fees and expenses of counsel selected from time to time by the Executive as provided in this section shall Clineburg will be paid or reimbursed to Clineburg by the Executive by Cortland Bancorp Company on a regular, periodic basis upon presentation by the Executive Clineburg of a statement or statements prepared by counsel in accordance with counsel’s customary practices, up to a maximum aggregate amount regardless of $500,000, whether suit be is brought or not, and regardless of whether or not incurred in trial, bankruptcy, or appellate proceedingsproceedings , but the Company’s payment or reimbursement of Clineburg’s counsel’s fees and expenses must occur on or before the last day of Clineburg’s tax year immediately after Clineburg’s tax year in which the expense is incurred. Cortland BancorpIf Clineburg is a “specified employee” for purposes of Internal Revenue Code section 409A on the date of termination, payment under this section 7.10 will not be made before the first day of the seventh month after the month in which Clineburg’s termination occurs, and interest on the delayed payment will accrue 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 Internal Revenue Code section 409A is not available. Clineburg’s right to payment or reimbursement under this section 7.10 is not subject to liquidation or exchange for another benefit. The Company’s obligation to make reimbursement payments will not apply later than Clineburg’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 Company’s obligation to pay the ExecutiveClineburg’s legal fees under this section 7 7.10 operates separately from and in addition to any legal fee reimbursement obligation Cortland Bancorp the Company may have with the Executive Clineburg under any separate severance, salary continuation continuation, indemnification, or other agreement. Despite anything in this Agreement section 7.10 to the contrary, contrary however, Cortland Bancorp shall the Company is not be required to pay or reimburse the ExecutiveClineburg’s legal expenses if doing so would violate 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 C.F.R. 359.3]. 13. New section 7.11 is added to the Employment Agreement: