Form of Payment. Unless an Employee makes an effective election pursuant to paragraph (B)(i) below, such benefits shall be paid as a 50% Survivor Benefit in accordance with the principles of Section IX.1 and other provisions of the GE Pension Plan applicable thereto (for Employees who are married at the time their Supplementary Pension begins) or as a single life annuity in accordance with the principles of [Section XV, X.11] and other provisions of the GE Pension Plan applicable thereto (for Employees who are not married at the time their Supplementary Pension begins); provided, however, that:

Form of Payment. On or around the Closing Date (as defined below), the Buyer shall pay the purchase price for the first tranche of the Note, which is equal to $34,000.00 (the “Purchase Price”) by wire transfer of immediately available funds, in accordance with the Company’s written wiring instructions, against delivery of the Note, and # the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer. If the Buyer decides to pay, in their sole discretion, additional amounts (additional tranches) under the Note, as further described in the Note, then such additional amounts shall be paid in accordance with the Company’s written wiring instructions as well. The Company shall issue to Buyer on the Closing Date, as a commitment fee, 450,000 shares of its common stock.

Form of Payment. Each Actual Award will generally be paid in cash (or its equivalent) in a single lump sum.

Form 8-K. [[Organization C:Organization]] and [[Organization B:Organization]] agree that, prior to the opening of the NYSE MKT in New York City on the business day immediately after the date hereof, [[Organization C:Organization]] shall file a Current Report on Form 8-K with the Commission disclosing all material information regarding the Offering and including the Placement Agreement and a form of this Agreement as exhibits thereto. From and after the filing of such Current Report on Form 8-K, [[Organization C:Organization]] shall have publicly disclosed all material, non-public information delivered to any of the Investors by [[Organization C:Organization]] or any person acting on its behalf, including, without limitation, the Placement Agent, in connection with the transactions contemplated by this Agreement, the Placement Agreement and any other documents or agreements contemplated hereby or thereby. [[Organization C:Organization]] shall not identify the name of any [[Organization B:Organization]] or any affiliate of any investment adviser of such [[Organization B:Organization]] in any press release or public filing, or otherwise publicly disclose the name of any [[Organization B:Organization]] or any affiliate of investment adviser of such [[Organization B:Organization]], without such [[Organization B:Organization]]’s prior written consent, unless required by law or the rules and regulations of a national securities exchange, provided, however, that, if permitted by applicable law, regulation, legal or judicial process, promptly after becoming aware of any request or requirement to so disclose (a “Disclosure Requirement”), and in any event prior to any such disclosure, [[Organization C:Organization]] will provide such [[Organization B:Organization]] with notice of such request or requirement so that such [[Organization B:Organization]] may at its election seek a protective order or other appropriate remedy and [[Organization C:Organization]] will fully cooperate with such [[Organization B:Organization]]’s efforts to obtain the same; provided, further, however, if, absent the entry of such a protective order or other remedy, [[Organization C:Organization]] is compelled by applicable law, rule or regulation or a court order, subpoena, similar judicial process, regulatory agency or stock exchange rule to disclose such [[Organization B:Organization]]’s name, [[Organization C:Organization]] may disclose only that portion of such information that [[Organization C:Organization]] is so compelled to disclose and will use its reasonable efforts to obtain assurance that confidential treatment will be accorded to that portion of such information that is being disclosed. As of the date hereof, [[Organization C:Organization]] is not aware of any Disclosure Requirement.

I certify that if I transfer the stock purchased by this exercise I will not do so in a manner that violates Cortland Bancorp’s policy on insider trading.

Partial Exercise. An exercisable Option may be exercised in whole or in part. However, an Option shall not be exercisable with respect to fractional shares and the Administrator may require that, by the terms of the Option, a partial exercise must be with respect to a minimum number of Shares.

Exercise Price. The exercise price of an Option shall be determined by the Committee in its sole discretion and shall be set forth in the Award Agreement, provided that:

Exercise Price. The per Share exercise price of an SAR shall be determined in the sole discretion of the Committee, shall be set forth in the applicable Award Agreement, and shall be no less than 100% of the Fair Market Value of one Share. The exercise price of an SAR related to an Option shall be the same as the exercise price of the related Option. Neither the Company nor the Committee shall, without stockholder approval, allow for a repricing of any SAR within the meaning of federal securities laws applicable to proxy statement disclosures.

Exercise Price. The exercise price per share of Stock purchasable under a Stock Option shall be determined by the Administrator at the time of grant and set forth in the applicable option agreement; provided, however, that the exercise price per share shall be not less than the Fair Market Value per share on the date the Stock Option is granted, or in the case of an Incentive Stock Option granted to an individual who is a Ten Percent Holder, not less than 110% of such Fair Market Value per share on the date the Stock Option is granted.

Exercise Term. Each Stock Appreciation Right shall have a Term established by the Committee, provided that no Stock Appreciation Right shall be exercisable after ten years from the date of grant.