Exhibit 10.1

ALLIANCE FINANCIAL CORPORATION

2010 RESTRICTED STOCK PLAN

Effective as of May 11, 2010

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TABLE OF CONTENTS

 

          Page   

ARTICLE I

PURPOSE

   Section 1.1    General Purpose of the Plan    1   

ARTICLE II

DEFINITIONS

   Section 2.1    Award    1 Section 2.2    Award Notice    1 Section 2.3   
Beneficiary    1 Section 2.4    Board    1 Section 2.5    Change in Control    1
Section 2.6    Code    2 Section 2.7    Committee    2 Section 2.8    Company   
2 Section 2.9    Disability    2 Section 2.10    Disinterested Board Member    2
Section 2.11    Effective Date    2 Section 2.12    Eligible Individual    2
Section 2.13    Employer    2 Section 2.14    Exchange Act    3 Section 2.15   
Person    3 Section 2.16    Plan    3 Section 2.17    Service    3 Section 2.18
   Share    3   

ARTICLE III

SHARES AVAILABLE UNDER THE PLAN

   Section 3.1    Shares Available Under Plan    3   

ARTICLE IV

ADMINISTRATION

   Section 4.1    Committee    3

 

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          Page Section 4.2    Committee Action    3 Section 4.3    Committee
Responsibilities    3

 

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ARTICLE V

AWARDS

   Section 5.1    Number of Shares    4 Section 5.2    Awards in General    4
Section 5.3    Share Allocations    4 Section 5.4    Dividend Rights    4
Section 5.5    Voting Rights    5 Section 5.6    Tender Offers    5 Section 5.7
   Limitations on Awards    5 Section 5.8    Clawback of Awards    5   

ARTICLE VI

VESTING

   Section 6.1    Vesting of Awards    6 Section 6.2    Designation of
Beneficiary    6 Section 6.3    Manner of Distribution    6 Section 6.4    Taxes
   6   

ARTICLE VII

AMENDMENT AND TERMINATION

   Section 7.1    Termination    7 Section 7.2    Amendment    7 Section 7.3   
Adjustments in the Event of a Business Reorganization    7   

ARTICLE VIII

MISCELLANEOUS

   Section 8.1    Status as an Employee Benefit Plan    7 Section 8.2    No
Right to Continued Employment    7 Section 8.3    Construction of Language    8
Section 8.4    Governing Law    8 Section 8.5    Headings    8 Section 8.6   
Non-Alienation of Benefits    8 Section 8.7    Notices    8

 

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Section 8.8    Required Regulatory Provisions    8 Section 8.9    Approval of
Shareholders    8

 

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ALLIANCE FINANCIAL CORPORATION

2010 RESTRICTED STOCK PLAN

ARTICLE I

PURPOSE

Section 1.1 General Purpose of the Plan.

The purpose of the Plan is to promote the growth and profitability of Alliance
Financial Corporation and its affiliated companies and to provide eligible
directors, certain key officers and employees of Alliance Financial Corporation
and its affiliated companies with an incentive to achieve corporate objectives,
to attract and retain directors, key officers and employees of outstanding
competence and to provide such directors, officers and employees with an equity
interest in Alliance Financial Corporation and its affiliated companies.

ARTICLE II

DEFINITIONS

The following definitions shall apply for the purposes of this Plan, unless a
different meaning is plainly indicated by the context:

Section 2.1 Award means a grant of Shares to an Eligible Individual pursuant to
section 5.1.

Section 2.2 Award Notice means, with respect to a particular Award, a written
instrument signed by the Company and the Award’s recipient evidencing the
granting of the Award and establishing the terms and conditions thereof.

Section 2.3 Beneficiary means the Person designated by an Eligible Individual
pursuant to section 6.2 to receive distribution of any Shares available for
distribution to such Eligible Individual, in the event such Eligible Individual
dies prior to receiving distribution of such Shares.

Section 2.4 Board means the Board of Directors of the Company.

Section 2.5 Change in Control means any of the following events:

(a) the consummation of a reorganization, merger or consolidation of the Company
with one or more other persons, other than a transaction following which:

(i) at least 51% of the equity ownership interests of the entity resulting from
such transaction are beneficially owned (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (“Exchange
Act”)) in substantially the same relative proportions by persons who,
immediately prior to such transaction, beneficially owned (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding
equity ownership interests in the Company; and

(ii) at least 51% of the securities entitled to vote generally in the election
of directors of the entity resulting from such transaction are beneficially
owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in
substantially the same relative proportions by persons who, immediately prior to
such transaction, beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) at least 51% of the securities entitled to
vote generally in the election of directors of the Company;

(b) the acquisition of all or substantially all of the assets of the Company or
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 25% or more of the outstanding securities of the Company
entitled to vote generally in the election of directors by any person or by any
persons acting in concert;

 

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(c) a complete liquidation or dissolution of the Company;

(d) the occurrence of any event if, immediately following such event, at least
50% of the members of the board of directors of the Company do not belong to any
of the following groups:

(i) individuals who were members of the board of directors of the Company on the
Effective Date; or

(ii) individuals who first became members of the board of directors of the
Company after the Effective Date either:

(A) upon election to serve as a member of the board of Directors of the Company
by affirmative vote of three-quarters of the members of such board, or of a
nominating committee thereof, in office at the time of such first election; or

(B) upon election by the shareholders of the Company to serve as a member of
such board, but only if nominated for election by affirmative vote of
three-quarters of the members of the board of directors of the Company, or of a
nominating committee thereof, in office at the time of such first nomination;

provided , however, that such individual’s election or nomination did not result
from an actual or threatened election contest or other actual or threatened
solicitation of proxies or consents other than by or on behalf of the board of
directors of the Company;

(e) any event which would be described in section 2.5(a), (b), (c) or (d) if the
term “Alliance Bank, N.A. or any successor thereto” were substituted for the
term “Company” therein.

In no event, however, shall a Change of Control be deemed to have occurred as a
result of any acquisition of securities or assets of the Company, or a
subsidiary of the Company, by the Company, or any subsidiary of the Company, or
by any employee benefit plan maintained by the Company or any subsidiary of the
Company. For purposes of this section 2.5, the term “person” shall have the
meaning assigned to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.

Section 2.6 Code means the Internal Revenue Code of 1986 (including the
corresponding provisions of any succeeding law).

Section 2.7 Committee means the Committee described in Section 4.1.

Section 2.8 Company means Alliance Financial Corporation and any successor
thereto.

Section 2.9 Disability means a condition of total incapacity, mental or
physical, for further performance of duty with the Company which the Committee
shall have determined, on the basis of competent medical evidence, is likely to
be permanent.

Section 2.10 Disinterested Board Member means a member of the Board who (a) is
not a current employee of the Company or a subsidiary, (b) does not receive
remuneration from the Company or a subsidiary, either directly or indirectly, in
any capacity other than as a director, except in an amount for which disclosure
would not be required pursuant to Item 404(a) of the proxy solicitation rules of
the Securities and Exchange Commission and (c) does not possess an interest in
any other transaction, and is not engaged in a business relationship, for which
disclosure would be required pursuant to Item 404(a) or (b) of the proxy
solicitation rules of the Securities and Exchange Commission. The term
Disinterested Board Member shall be interpreted in such manner as shall be
necessary to conform to the requirements of Rule 16b-3 promulgated under the
Exchange Act.

Section 2.11 Effective Date means May 11, 2010.

Section 2.12 Eligible Individual means any employee, or member of the board of
directors of an Employer who is not also an employee of any Employer, whom the
Committee may determine to be a key director, officer or employee of the
Employer and selects to receive an Award pursuant to the Plan.

Section 2.13 Employer means the Company, Alliance Bank, N.A. and any successors
to either and, with the prior approval of the Board of Directors of the Company,
and subject to such terms and conditions as may be

 

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imposed by the Board, any other affiliated savings bank, savings and loan
association, bank, corporation, financial institution or other business
organization or institution. With respect to any Eligible Individual, the
Employer shall mean the entity which employs such person or upon whose board of
directors such person serves.

Section 2.14 Exchange Act means the Securities and Exchange Act of 1934, as
amended.

Section 2.15 Person means an individual, a corporation, a bank, a savings bank,
a savings and loan association, a financial institution, a partnership, an
association, a joint-stock company, a trust, an estate, an unincorporated
organization and any other business organization or institution.

Section 2.16 Plan means the Alliance Financial Corporation 2010 Restricted Stock
Plan as amended from time to time.

Section 2.17 Service means service for the Company (or any subsidiary or
affiliate) as an employee in any capacity, service as a director or emeritus
director or advisory director of the Company.

Section 2.18 Share means a share of common stock of the Company, par value $1.00
per share.

ARTICLE III

SHARES AVAILABLE UNDER THE PLAN

Section 3.1 Shares Available Under Plan.

(a) The Shares available under the Plan may be treasury shares or shares of
original issue or a combination of the foregoing.

(b) The maximum number of Shares available under the Plan shall be 200,000,
subject to adjustment pursuant to section 7.3.

ARTICLE IV

ADMINISTRATION

Section 4.1 Committee.

The Plan shall be administered by a committee (the “Committee”) consisting of
all members of the Board or, if designated by the Board, by a committee
comprised solely of Disinterested Board Members. If the Committee consists of
fewer than two Disinterested Board Members, then the Board shall appoint to the
Committee such additional Disinterested Board Members as shall be necessary to
provide for a Committee consisting of at least two Disinterested Board Members.

Section 4.2 Committee Action.

The Committee shall hold such meetings, and may make such administrative rules
and regulations, as it may deem proper. A majority of the members of the
Committee shall constitute a quorum, and the action of a majority of the members
of the Committee present at a meeting at which a quorum is present, as well as
actions taken pursuant to the unanimous written consent of all of the members of
the Committee without holding a meeting, shall be deemed to be actions of the
Committee. All actions of the Committee shall be final and conclusive and shall
be binding upon the Company and all other interested parties. Any Person dealing
with the Committee shall be fully protected in relying upon any written notice,
instruction, direction or other communication signed by the Chair of the
Committee and one member of the Committee, by two members of the Committee or by
a representative of the Committee authorized to sign the same in its behalf.

Section 4.3 Committee Responsibilities.

Subject to the terms and conditions of the Plan and such limitations as may be
imposed by the Board, the Committee shall be responsible for the overall
management and administration of the Plan and shall have

 

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such authority as shall be necessary or appropriate in order to carry out its
responsibilities, including, without limitation, the authority:

(a) to interpret and construe the Plan, and to determine all questions that may
arise under the Plan as to eligibility for Awards under the Plan, the amount of
Shares, if any, to be granted pursuant to an Award, and the terms and conditions
of such Award;

(b) to adopt rules and regulations and to prescribe forms for the operation and
administration of the Plan; and

(c) to take any other action not inconsistent with the provisions of the Plan
that it may deem necessary or appropriate.

ARTICLE V

AWARDS

Section 5.1 Number of Shares.

Subject to the limitations of the Plan and such limitations as the Board may
from time to time impose, the number of Shares as to which an Eligible
Individual may be granted an Award shall be determined by the Committee in its
discretion.

Section 5.2 Awards in General.

Any Award shall be evidenced by an Award Notice issued by the Committee to the
Eligible Individual, which notice shall:

(a) specify the number of Shares covered by the Award;

(b) specify the date of grant of the Award;

(c) specify the dates on which such Shares shall become vested; and

(d) contain such other terms and conditions not inconsistent with the Plan as
the Board or Committee may, in its discretion, prescribe.

Section 5.3 Share Allocations.

Upon the grant of an Award to an Eligible Individual, the Committee shall notify
the Company’s transfer agent or other entity designated by the Committee to hold
or monitor the Shares until vesting of the Award and of the number of Shares
subject to the Award. Thereafter, until such time as the Shares subject to such
Award become vested or are forfeited, the books and records of the Company’s
transfer agent or other entity designated by the Committee to hold or monitor
the Shares until vesting shall reflect that such number of Shares have been
awarded to such Award recipient.

Section 5.4 Dividend Rights.

(a) Unless the Committee determines otherwise with respect to any Award and
specifies such determination in the relevant Award Notice, any cash dividends or
distributions declared and paid with respect to Shares subject to the Award that
are, as of the record date for such dividend, allocated to an Eligible
Individual in connection with such Award shall be promptly paid to and retained
by such Eligible Individual.

(b) Unless the Committee determines otherwise with respect to any Award and
specifies such determination in the relevant Award Notice, any dividends or
distributions declared and paid in property other than cash with respect to
Shares shall be subject to the same vesting and other restrictions as the Shares
to which the Award relates. Any such dividends declared and paid with respect to
Shares that are not, as of the record date

 

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for such dividend, allocated to any Eligible Individual in connection with any
Award shall, at the direction of the Committee, be held in the Fund or used to
pay the administrative expenses of the Plan, including any compensation due to
the Funding Agent or, in the case of a stock dividend, used for future Awards.

Section 5.5 Voting Rights.

(a) Each Eligible Individual to whom an Award has been made that is not fully
vested shall have the right to exercise, or direct the exercise of, all voting
rights appurtenant to unvested Shares related to such Award. Such a direction
for any Shares as to which the Eligible Individual is not the record owner, if
any, shall be given by completing and filing, with the inspector of elections or
such other person who shall be independent of the Company as the Committee shall
designate in the direction, a written direction in the form and manner
prescribed by the Committee. If no such direction is given by an Eligible
Individual with respect to Shares as to which the Eligible Individual is not the
record owner, then the voting rights appurtenant to the Shares allocated to him
shall not be exercised.

(b) The Committee shall furnish, or cause to be furnished, to each Eligible
Individual who is not the record holder of the Shares relating to his or her
Award all annual reports, proxy materials and other information furnished by the
Company, or by any proxy solicitor, to the holders of Shares.

Section 5.6 Tender Offers.

(a) Each Eligible Individual to whom an Award has been made that is not fully
vested shall have the right to respond, or to direct the response, with respect
to the Shares related to such Award, to any tender offer, exchange offer or
other offer made to the holders of Shares. Such a direction for any Shares as to
which the Eligible Individual is not the record owner shall be given by
completing and filing, with the inspector of elections or such other person who
shall be independent of the Company as the Committee shall designate in the
direction, a written direction in the form and manner prescribed by the
Committee. If no such direction is given by an Eligible Individual with respect
to Shares as to which the Eligible Individual is not the record owner, then the
Shares shall not be tendered or exchanged.

(b) The Committee shall furnish, or cause to be furnished, to each Eligible
Individual, all information furnished by the offeror to the holders of Shares.

Section 5.7 Limitations on Awards.

(a) No Award shall be granted under the Plan prior to the date on which the Plan
is approved by shareholders pursuant to section 8.9.

(b) An Award by its terms shall not be transferable by the Eligible Individual
other than by will or by the laws of descent and distribution, and the Shares
granted pursuant to such Award shall be distributable, during the lifetime of
the Award recipient, only to the Award recipient.

Section 5.8 Clawback of Awards.

The Committee may specify in any Award Notice the conditions upon which the
Company may recover, in whole or in part, Shares related to an Award from an
Eligible Individual due to the inaccuracy of any financial results or other
operating metrics as the Committee may deem appropriate in its discretion.
Notwithstanding any provision of this section 5.8 to the contrary, no Eligible
Individual who is party to an employment agreement with the Company that
contains a clawback provision applicable to Awards under this Plan may have such
provision altered by the terms of an Award Notice issued under this Plan.

 

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ARTICLE VI

VESTING

Section 6.1 Vesting of Awards.

Subject to the terms and conditions of the Plan, unless otherwise determined by
the Committee and specified in the Award Notice relating to an Award, Shares
subject to each Award granted to an Eligible Individual under the Plan shall
become vested as follows: (i) twenty percent (20%) of such Shares shall become
vested on the first anniversary of the date of grant; (ii) an additional twenty
percent (20%) of such Shares shall become vested on the second anniversary of
the date of grant; (iii) an additional twenty percent (20%) of such Shares shall
become vested on the third anniversary of the date of grant; (iv) an additional
twenty percent (20%) of such Shares shall become vested on the fourth
anniversary of the date of grant; and (v) an additional twenty percent (20%) of
such Shares shall become vested on the fifth anniversary of the date of grant;
provided that to the extent that any Award shall not have become vested prior to
the date on which the Award holder terminates Service with an Employer such
Award shall not thereafter become vested and provided, further, an Award shall
become 100% vested upon the Award recipient’s death, Disability or upon the
occurrence of a Change of Control while in the Service of an Employer.

Section 6.2 Designation of Beneficiary.

An Eligible Individual who has received an Award may designate a Beneficiary to
receive any undistributed Shares that are, or become, available for distribution
on, or after, the date of his death. Such designation (and any change or
revocation of such designation) shall be made in writing in the form and manner
prescribed by the Committee. In the event that the Beneficiary designated by an
Eligible Individual dies prior to the Eligible Individual, or in the event that
no Beneficiary has been designated, any undistributed Shares that are, or
become, available for distribution on, or after, the Eligible Individual’s death
shall be paid to the executor or administrator of the Eligible Individual’s
estate, or if no such executor or administrator is appointed within such time as
the Committee, in its sole discretion, shall deem reasonable, to such one or
more of the spouse and descendants and blood relatives of such deceased person
as the Committee may select.

Section 6.3 Manner of Distribution.

(a) As soon as practicable following the date any Shares granted pursuant to an
Award become vested pursuant to section 6.1, the Committee shall take such
actions as are necessary to cause the transfer of unrestricted record ownership
of the Shares that have become vested to the Award holder and to cause the
distribution to the Award holder all property other than Shares then being held
in connection with the Shares being distributed.

(b) The Company’s obligation to deliver Shares with respect to an Award shall,
if the Committee so requests, be conditioned upon the receipt of a
representation as to the investment intention of the Eligible Individual or
Beneficiary to whom such Shares are to be delivered, in such form as the
Committee shall determine to be necessary or advisable to comply with the
provisions of applicable federal, state or local law. It may be provided that
any such representation shall become inoperative upon a registration of the
Shares or upon the occurrence of any other event eliminating the necessity of
such representation. The Company shall not be required to deliver any Shares
under the Plan prior to (i) the admission of such Shares to listing on any stock
exchange on which Shares may then be listed, or (ii) the completion of such
registration or other qualification under any state or federal law, rule or
regulation as the Committee shall determine to be necessary or advisable.

Section 6.4 Taxes.

The Company or the Committee shall have the right to require any person entitled
to receive Shares pursuant to an Award to pay the amount of any tax which is
required to be withheld with respect to such Shares, or, in lieu thereof, to
retain, or to sell without notice, a sufficient number of Shares to cover the
amount required to be withheld.

 

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ARTICLE VII

AMENDMENT AND TERMINATION

Section 7.1 Termination.

The Board may suspend or terminate the Plan in whole or in part at any time by
giving written notice of such suspension or termination to the Committee;
provided, however, that the Plan may not be terminated while there are
outstanding Awards that may thereafter become vested.

Section 7.2 Amendment.

The Board may amend or revise the Plan in whole or in part at any time;
provided, however, that no such amendment or revision shall alter the
stockholder approval standard set forth in Section 8.9 as a condition precedent
to the effectiveness of the Plan.

Section 7.3 Adjustments in the Event of a Business Reorganization.

(a) In the event of any merger, consolidation, or other business reorganization
(including but not limited to a Change of Control) in which the Company is the
surviving entity, and in the event of any stock split, stock dividend or other
event generally affecting the number of Shares held by each person who is then a
holder of record of Shares without the Company’s receipt of funds therefor, the
number of Shares covered by outstanding Awards and the number of Shares
available as Awards in total or to particular individuals or groups under the
Plan shall be adjusted to account for such event. Such adjustment shall be
effected by multiplying such number of Shares by an amount equal to the number
of Shares that would be owned after such event by a person who, immediately
prior to such event, was the holder of record of one Share, unless the
Committee, in its discretion, establishes another appropriate method of
adjustment.

(b) In the event of any merger, consolidation, or other business reorganization
(including but not limited to a Change of Control) in which the Company is not
the surviving entity, the Awards with respect to which Shares had been allocated
to an Eligible Individual shall be adjusted by allocating to the Eligible
Individual receiving such Award the amount of money, stock, securities or other
property received for the Shares allocated to such Eligible Individual, and such
money, stock, securities or other property shall be subject to the same terms
and conditions of the Award that applied to the Shares for which it has been
exchanged.

ARTICLE VIII

MISCELLANEOUS

Section 8.1 Status as an Employee Benefit Plan.

This Plan is not intended to satisfy the requirements for qualification under
section 401(a) of the Code or to satisfy the definitional requirements for an
“employee benefit plan” under section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended. It is intended to be a non-qualified incentive
compensation program that is exempt from the regulatory requirements of the
Employee Retirement Income Security Act of 1974, as amended. The Plan shall be
construed and administered so as to effectuate this intent.

Section 8.2 No Right to Continued Employment.

Neither the establishment of the Plan nor any provisions of the Plan nor any
action of the Board or the Committee with respect to the Plan shall be held or
construed to confer upon any Eligible Individual any right to continue in the
service of any Employer. The Employers reserve the right to dismiss any Eligible
Individual or otherwise deal with any Eligible Individual to the same extent as
though the Plan had not been adopted.

 

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Section 8.3 Construction of Language.

Whenever appropriate in the Plan, words used in the singular may be read in the
plural, words used in the plural may be read in the singular, and words
importing the masculine gender may be read as referring equally to the feminine
or the neuter. Any reference to an Article or section number shall refer to an
Article or section of this Plan unless otherwise indicated.

Section 8.4 Governing Law.

The Plan shall be construed and enforced in accordance with the laws of the
State of New York without giving effect to the conflict of laws principles
thereof, except to the extent that such laws are preempted by the federal laws
of the United States of America.

Section 8.5 Headings.

The headings of Articles and sections are included solely for convenience of
reference. If there is any conflict between such headings and the text of the
Plan, the text shall control.

Section 8.6 Non-Alienation of Benefits.

The right to receive a benefit under the Plan shall not be subject in any manner
to anticipation, alienation or assignment, nor shall such right be liable for or
subject to debts, contracts, liabilities, engagements or torts.

Section 8.7 Notices.

Any communication required or permitted to be given under the Plan, including
any notice, direction, designation, comment, instruction, objection or waiver,
shall be in writing and shall be deemed to have been given at such time as it is
personally delivered or 5 days after mailing if mailed, postage prepaid, by
registered or certified mail, return receipt requested, addressed to such party
at the address listed below, or at such other address as one such party may by
written notice specify to the other:

 

  (a) If to the Company:

Alliance Financial Corporation

120 Madison Street

Syracuse, NY 13202

Attention: Corporate Secretary

 

  (b) If to an Eligible Individual, to the Eligible Individual’s address as
shown in the Employer’s records.

Section 8.8 Required Regulatory Provisions.

The making and payment of Awards under this Plan shall be conditioned upon and
subject to compliance with section 18(k) of the Federal Deposit Insurance Act,
12 U.S.C. 1828(k), and the rules and regulations promulgated thereunder.

Section 8.9 Approval of Shareholders.

The Plan shall not be effective or implemented unless approved by the holders of
a majority of the votes cast by the holders of Shares entitled to vote at any
duly called annual or special meeting of the Company in which case the Plan
shall be effective as of the date of such approval. No Award shall be made prior
to the date on which the Plan becomes effective.

 

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