Exhibit 10.3

EMPLOYMENT AGREEMENT

This AGREEMENT is made as of this 1st day of December, 2004, by and among
PARTNERS TRUST BANK, a federally chartered stock savings bank (the "Employer")
and a wholly owned subsidiary of PARTNERS trust financial group, inc., a
Delaware corporation ("Partners Trust"), Partners Trust and RICHARD F. CALLAHAN,
an individual residing in Clinton, New York (the "Executive").

WHEREAS, the Executive is serving as Senior Vice President/Retail Banking of the
Employer;

WHEREAS, the Executive, the Employer and SBU Bank have previously entered into a
an employment protection agreement, dated August 26, 2003 (the "EPA Agreement"),
which the Employer, Partners Trust and the Executive intend to be replaced and
superceded by this Agreement;

WHEREAS, the Board of Directors of the Employer and Partners Trust, have
approved and authorized the Employer to enter into this Agreement with the
Executive; and

WHEREAS, the parties desire to enter into this Agreement, setting forth the
terms and conditions for the employment relationship of the Executive with the
Employer;

NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
covenants and agreements set forth in this Agreement, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
agree as follows:

1. Employment.

(a) Term. The initial term of employment under this Agreement shall be for the
period commencing on the date hereof and ending on March 31, 2007 (the "Initial
Term"). Subject to annual review and approval by the Board of Directors of the
Employer, this Agreement may be extended by written notice from the Employer to
the Executive for an additional consecutive 12-month period (the "Extended
Term") no later than March 31, 2006 and every subsequent March thereafter,
unless the Executive has given contrary written notice to the Employer at least
90 days before any such renewal date. The Initial Term and all such Extended
Terms are collectively referred to herein as the "Employment Term."

(b) Duties. The Executive is employed as Senior Vice President/Retail Banking
during the Employment Term. As Senior Vice President/Retail Banking, the
Executive shall render executive, policy and other management services to the
Employer consistent with the Executive's position and experience and of the type
customarily performed by persons serving in a similar Senior Vice
President/Retail Banking capacity, and shall be responsible for implementing the
policies of the employer, and shall report to the President and Chief Executive
Officer. During the Employment Term, there shall be no material decrease in the
duties and responsibilities of the Executive otherwise than as provided herein,
unless the parties otherwise agree in writing. During the Employment Term, the
Executive shall not be required to relocate, without his consent, his place of
employment to a location more than 90 miles away from the Employer's Utica, New
York headquarters location to perform his duties hereunder, except for
reasonably required travel by the Executive on the business of the Employer. The
Executive is encouraged to affiliate with professional associations, business
and civic organizations in support of his role as Senior Vice President/Retail
Banking, provided that Executive's involvement in such activities does not
adversely affect the performance of his duties on behalf of the Employer.

2. Compensation and Benefits.

(a) Base Salary. The Executive shall initially be paid a base salary at an
annualized rate of $150,000 (as may be adjusted from time to time in accordance
with this Agreement, "Base Salary"), payable in accordance with the Employer's
regular payroll practices for its executive employees. On an annual basis, prior
to June 30 of each year during the Employment Term, the Executive's Base Salary
shall be reviewed by the Chief Executive Officer in conjunction with the Board
of Directors of the Employer and may be increased in the discretion of the Board
of Directors of the Employer. In reviewing the Executive's Base Salary, the
Chief Executive Officer and Board of Directors of the Employer shall consider
the Executive's performance, scope of responsibility, and such other matters as
they deem appropriate. The Base Salary of the Executive shall not be decreased
at any time during the Employment Term from the amount then in effect, unless
the Executive otherwise agrees in writing.

(b) Bonuses and Incentive Compensation. The Executive shall be eligible to
participate with all other executive employees of the Employer in any bonus or
other incentive programs as may be authorized and declared by the Employer for
executive employees generally. No other compensation provided for in this
Agreement shall be deemed a substitute for the Executive's right to participate
in such bonuses and incentive programs when and as declared by the Board of
Directors of the Employer. This provision shall not preclude the grant of any
other bonus to the Executive as determined by the Board of Directors of the
Employer.

(c) Benefit Plans. The Executive shall be eligible to participate in any
employee pension benefit plans (as that term is defined under Section 3(2) of
the Employee Retirement Income Security Act of 1974, as amended), group life
insurance plans, medical plans, dental plans, long-term disability plans,
business travel insurance programs and other fringe benefit plans or programs
maintained by the Employer or Partners Trust for the benefit of its executive
employees. The Executive's participation in any such benefit plans and programs
shall be based on, and subject to satisfaction of, the eligibility requirements
and other conditions of such plans and programs. If the Executive's employment
by the Employer shall cease for any reason other than by voluntary termination
(as described in Section 3(b) below) or for "Cause" (defined in Section 3(e)
below), the Executive shall receive continued group life, health, dental,
accident and long term disability insurance coverage for the remaining
Employment Term, equivalent to the coverage to which he would have been entitled
under such plans (as in effect on the date of his termination of employment, or,
if his termination of employment occurs after a "Change of Control" (defined in
Section 4(b) below), on the date of such Change of Control, whichever benefits
are greater, if he had continued working for the Employer during the remaining
Employment Term at the highest rate of salary achieved during the Employment
Term, but taking into account any coverage provided from any subsequent
employer.

(d) Expenses. The Executive is expected and is authorized to incur reasonable
expenses in the performance of his duties hereunder, including the costs of
business entertainment, travel, and attendance at conventions and meetings. The
Employer shall reimburse the Executive for all such expenses promptly upon
periodic presentation by the Executive of an itemized account of such expenses.

(e) Other Benefits. During the period of employment, the Executive shall also be
entitled to receive the following benefits:

(i) Paid vacation of at least four weeks during each calendar year (prorated for
partial years) (with no carry over of unused vacation to a subsequent year) and
any holidays that may be provided to substantially all employees of the Employer
in accordance with the Employer's holiday policy;

(ii) Reasonable sick leave consistent with the Employer's policy in that regard
for other executive officers; and

(iii) Reimbursement of fees or dues (but not personal expenses) for one club
membership at a dining or country club as may be beneficial to the Executive's
roles with the Employer. The choice of club shall be subject to prior review and
approval by the Chief Executive Officer of the Employer, and shall be subject to
subsequent review and disapproval by the Chief Executive Officer.

3. Termination.

Prior to a Change of Control, the Executive's employment by the Employer shall
be subject to termination as follows:

(a) Expiration of the Employment Term. The Executive's employment with the
Employer shall not terminate prior to the expiration of the established term,
except as provided below in Section 3.

(b) Voluntary Termination. The Executive may terminate this Agreement upon not
less than 60 days prior written notice delivered to the Employer, in which event
the Executive shall be entitled only to the compensation and benefits the
Executive has earned or accrued through the effective date of the voluntary
termination.

(c) Termination Upon Death. This Agreement shall terminate upon the Executive's
death. In the event this Agreement is terminated as a result of the Executive's
death, the Employer shall continue payments of the Executive's Base Salary which
should have otherwise been due for a period of 30 days following the Executive's
death to the Executive's estate.

(d) Termination Upon Disability. The Employer may terminate this Agreement upon
the Executive's disability. For purposes of this Agreement, the Executive's
inability to perform the Executive's duties hereunder by reason of physical or
mental illness or injury for a period of 26 consecutive weeks that follows the
Executive's use of all available sick leave (the "Disability Period") shall
constitute disability. The determination of disability shall be made by a
physician selected by the Employer. During the Disability Period, the Executive
shall be entitled to 100% of the Executive's Base Salary otherwise payable
during that period, reduced by any other Employer provided benefits to which the
Executive may be entitled with respect to the Disability Period which benefits
are specifically payable solely on account of such disability (including, but
not limited to, benefits provided under any disability insurance policy or
program, worker's compensation law, or any other benefit program or
arrangement).

(e) Termination for Cause. The Employer may terminate the Executive's employment
for Cause by written notice to the Executive. For purposes of this Agreement,
"Cause" shall mean the Executive's (1) personal dishonesty, incompetence,
willful misconduct; (2) breach of fiduciary duty involving personal profit,
intentional failure to perform material stated duties; (3) willful violation of
any law, rule, or regulation (other than traffic violations or similar
offenses); (4) being a specific subject of a final cease and desist order from,
written agreement with, or other order or supervisory direction from, any
federal or state regulatory authority; or (5) conduct tending to bring the
Employer or Partners Trust into substantial public disgrace or disrepute. In
determining incompetence, the acts or omissions shall be measured against
standards generally prevailing in the financial institutions industry; provided,
it shall be the burden of the Employer to prove the alleged acts and omissions
and the prevailing nature of the standards the Employer shall have alleged are
violated by such acts or omissions.

Notwithstanding any other term or provision of this Agreement to the contrary,
if the Executive's employment is terminated for Cause, the Executive shall
forfeit all rights to payments and benefits otherwise provided pursuant to this
Agreement; provided, however, that Base Salary shall be paid through the date of
termination.

(f) Termination Without Cause. The Employer may terminate the Executive's
employment for reasons other than Cause upon not less than 60 days prior written
notice delivered to the Executive, in which event the Employer shall pay to the
Executive, within 30 days of the date of termination, a lump sum payment equal
to the unpaid Base Salary that would have been paid to or earned by the
Executive pursuant to this Agreement, if the Executive had remained employed
under the terms of this Agreement through the end of the Initial Term, or for a
period of 12 months following the date of termination, whichever period is
longer. If the Executive terminates his employment with the Employer during the
Employment Term for "Good Reason" (defined in Section 4(c) below), other than
following a Change of Control, such termination shall be deemed to have been a
termination by the Employer of the Executive's employment without Cause.

(g) Change of Control. If the Executive's employment by the Employer shall cease
for any reason other than Cause within six months prior to, or 24 months
following, a Change of Control that occurs during the Employment Term, the
provisions of paragraph 4 below shall apply.

(h) Resignation. Effective upon the Executive's termination of employment for
any reason, the Executive hereby resigns from any and all offices and positions
related to the Executive's employment with the Employer and any subsidiaries or
affiliates thereof, and held by the Executive at the time of termination.

(i) Regulatory Limits. Notwithstanding any other provision in this Agreement,
(i) the Employer may terminate or suspend this Agreement and the employment of
the Executive hereunder, as if such termination were for Cause under Section
3(e) hereof, to the extent required by the applicable Federal or state related
to banking, deposit insurance or bank or savings institution holding companies
or by regulations or orders issued by the Office of Thrift Supervision, the
Federal Deposit Insurance Corporation or any other state or federal banking
regulatory agency having jurisdiction over Partners Trust or the Employer and
(ii) no payment shall be required to be made to or for the benefit of the
Executive under this Agreement to the extent such payment is prohibited by
applicable law, regulation or order issued by a banking agency or a court of
competent jurisdiction; provided, that it shall be the Employer's burden to
prove that any such action was so required.

(j) No Mitigation. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and, such amounts
shall not be reduced whether or not the Executive obtains other employment.

4. Termination Following a Change of Control.

(a) In the event the Employer terminates the Executive's employment, or the
Executive terminates employment with Good Reason, in either case within six
months prior to, or 24 months after, a Change of Control, the Employer shall,
within 60 days of termination, pay to the Executive a lump sum cash payment
equal to 2.0 times the average annual compensation paid to the Executive by
Employer and included in the Executive's gross income for income tax purposes
during the five full calendar years, or shorter period of employment, that
immediately precede the year during which the Change of Control occurs.

(b) For purposes of this Agreement, a "Change of Control" shall mean:

(1) The acquisition by any individual, entity or group (within the meaning of
Section 13(d) (3) or 14(d) (2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of Partners Trust (the
"Outstanding Company Common Stock"), or (ii) the combined voting power of the
then outstanding voting securities of Partners Trust entitled to vote generally
in the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (1), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from Partners Trust or the Employer, (ii) any acquisition by Partners
Trust or the Employer, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by Partners Trust or the Employer or any
other corporation controlled by Partners Trust or the Employer, or (iv) any
acquisition by any corporation pursuant to a transaction that complies with
clauses (i), (ii) and (iii) of subsection (3) of this Section 4(c); or

(2) Individuals who, as of the date hereof, constitute the Board of Directors of
Partners Trust (the "Incumbent Board") cease for any reason to constitute at
least a majority of such Board of Directors (the "Partners Trust Board");
provided, however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by Partners Trust's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Partners Trust Board; or

(3) Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of Partners Trust (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns Partners Trust or all or
substantially all of Partners Trust's assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (ii) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of Partners Trust, the Employer,
such corporation resulting from such Business Combination or a corporation
controlled by any of them) beneficially owns, directly or indirectly, 20% or
more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination and
(iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination; or

(4) Approval by the shareholders of Partners Trust of a complete liquidation or
dissolution of Partners Trust without the establishment of a successor
corporation.

(c) "Good Reason" shall mean

(1) the assignment to the Executive by the Employer of duties materially
inconsistent with the Executive's position, duties, responsibilities, and status
with the Employer, a material adverse change in the Executive's titles or
offices, any removal of the Executive from or any failure to reelect the
Executive to any of such positions, except in connection with the termination of
his employment for Cause, or any action that would have a material adverse
effect on the physical conditions in which the Executive performs his employment
duties;

(2) a reduction by the Employer in the Executive's Base Salary as in effect on
the date hereof or as the same may be increased from time to time during the
Employment Term;

(3) the taking of any action by the Employer or the Bank that would materially
adversely affect the Executive's participation in or materially reduce the
Executive's benefits under any employee benefit plan on a basis different than
other executives of the Employer generally or deprive the Executive of any
material fringe benefit enjoyed by the Executive;

(4) any requirement that the Executive relocate to any place more than 90 miles
away from the Employer's Utica, New York location to perform his duties
hereunder, except for reasonably required travel by the Executive on the
business of the Employer;

(5) any other action or inaction that constitutes a material breach by the
Employer of this Agreement;

(6) any failure by the Employer to obtain the assumption of this Agreement by
any acquirors, successors or assigns of the Employer; or

(7) if the Employer renews this Agreement pursuant to Section 1 hereof, any
failure by the Employer to renew this Agreement for a period of at least one (1)
year.

(d) It is the intention of the parties hereto that the payments and other
compensation provided for herein are reasonable compensation for Executive's
services to the Employer and shall not constitute an "excess parachute payment"
within the meaning of Section 280G of the Code and any regulations thereunder.
In the event that the Employer's independent accountants acting as auditors for
the Employer determine that the payments provided for herein under Section 4
hereof constitute an "excess parachute payment" within the meaning of Section
280G of the Code and any regulations thereunder, then the compensation payable
under Section 4 hereof shall be reduced by the Employer in its sole discretion
to the point that such compensation shall not qualify as an "excess parachute
payment" within the meaning of Section 280G of the Code and any regulations
thereunder.

5. Covenants.

(a) Confidentiality. The Executive shall not, without the prior written consent
of the Employer, disclose or use in any way, either during the Employment Term
or thereafter, except as required in the course of his employment by Employer,
any confidential business or technical information or trade secret acquired in
the course of the Executive's employment by the Employer. The Executive
acknowledges and agrees that it would be difficult to fully compensate the
Employer for damages resulting from the breach or threatened breach of the
foregoing provision and, accordingly, that the Employer shall be entitled to
temporary preliminary injunctions and permanent injunctions to enforce such
provision. This provision with respect to injunctive relief shall not, however,
diminish the Employer's right to claim and recover damages. The Executive
covenants to use his best efforts to prevent the publication or disclosure of
any trade secret or any confidential information concerning the business or
finances of Employer or Employer's affiliates, or any of their dealings,
transactions or affairs which may come to the Executive's knowledge in the
pursuance of his duties or employment.

(b) No Competition. The Executive's employment is subject to the condition that
during the term of his employment hereunder and for a period of 12 months
following the date his employment ceases for any reason (the "Date of
Termination") except within six months prior to, or 12 months following, a
Change of Control (described in Section 4), the Executive shall not, directly or
indirectly, own, manage, operate, control or participate in the ownership,
management, operation or control of, or be connected as an officer, employee,
partner, director, individual proprietor, lender, consultant or otherwise with,
or have any financial interest in, or aid or assist anyone else in the conduct
of, any entity or business (a "Competitive Operation") which competes in the
banking industry or with any other business conducted by the Employer, Partners
Trust or by any group, affiliate, division or subsidiary of the Employer or
Partners Trust, in any area or market where such business is being conducted at
the Date of Termination. The Executive shall keep the Employer fully advised as
to any activity, interest, or investment the Executive may have in any way
related to the banking industry. It is understood and agreed that, for the
purposes of the foregoing provisions of this paragraph, (i) no business shall be
deemed to be a business conducted by the Employer or any group, division,
affiliate or subsidiary of the Employer unless 5% or more of the Employer's
consolidated gross sales or operating revenues is derived from, or 5% or more of
such Employer's consolidated assets are devoted to, such business; (ii) no
business shall be deemed to be a business conducted by Partners Trust or any
group, division, affiliate or subsidiary of Partners Trust unless 5% or more of
Partners Trust's consolidated gross sales or operating revenues is derived from,
or 5% or more of such Partners Trust's consolidated assets are devoted to, such
business, (iii) no business conducted by any entity by which the Executive is
employed or in which he is interested or with which he is connected or
associated shall be deemed competitive with any business conducted by the
Employer or Partners Trust or any group, division or subsidiary of such Employer
or Partners Trust unless it is one from which 2% or more of its consolidated
gross sales or operating revenues is derived, or to which 2% or more of its
consolidated assets are devoted; and (iv) no business which is conducted by the
Employer or Partners Trust at the Date of Termination and which subsequently is
sold by the Employer or Partners Trust shall, after such sale, be deemed to be a
Competitive Operation within the meaning of this paragraph. Ownership of not
more than 1% of the voting stock of any entity shall not constitute a violation
of this subsection.

(c) Non-Solicitation. At all times while the Executive is employed by the
Employer and for a one (1) year period after the termination of the Executive 's
employment with the Employer for any reason, the Executive shall not, directly
or indirectly, for himself or for any other person, firm, corporation,
partnership, association or other entity: (i) employ or attempt to employ or
enter into any contractual arrangement with any employee or former employee of
the Employer or Partners Trust, unless such employee or former employee has not
been employed by the Employer or Partners Trust for a period in excess of six
(6) months; or (ii) call on, solicit or accept any business from any of the
actual or targeted prospective customers of the Employer or Partners Trust on
behalf of any person or entity in connection with any business in competition
with the business of the Employer or Partners Trust.

(d) Termination of Payments. Upon the breach by the Executive of any covenant
under this Section 5, the Employer may terminate, offset or recover from the
Executive immediately any and all benefits paid to the Executive pursuant to
this Agreement, in addition to any and all other remedies available to the
Employer under the law or in equity.

(e) Modification. Although the parties consider the restrictions contained in
this Section 5 reasonable as to protected business, duration, and geographic
area, in the event that any court of competent jurisdiction deems them to be
unreasonable, then such restrictions shall apply to the broadest business,
longest period, and largest geographic territory as may be considered reasonable
by such court, and this Section 5, as so amended, shall be enforced.

(f) Other Agreements. The Executive represents and warrants that neither the
Executive's employment with the Employer nor the Executive's performance of his
obligations hereunder will conflict with or violate the Executive's obligations
under the terms of any agreement with a previous employer or other party
including agreements to refrain from competing, directly or indirectly, with the
business of such previous employer or any other party.

6. Withholding.

The Employer shall deduct and withhold from compensation and benefits provided
under this Agreement all necessary income and employment taxes and any other
similar sums required by law to be withheld.

7. Rules, Regulations and Policies.

The Executive shall use his best efforts to abide by and comply with all of the
rules, regulations, and policies of the Employer, including without limitation
the Employer's policy of strict adherence to, and compliance with, any and all
requirements of the banking, securities, and antitrust laws and regulations.

8. Return of Employer's Property.

After the Executive has received notice of termination or at the end of his
period of employment with Employer, whichever first occurs, the Executive shall
immediately return to Employer all documents and other property in his
possession belonging to Employer.

9. Construction and Severability.

The invalidity of any one or more provisions of this Agreement or any part
thereof, all of which are inserted conditionally upon their being valid in law,
shall not affect the validity of any other provisions to this Agreement; and in
the event that one or more provisions contained herein shall be invalid, as
determined by a court of competent jurisdiction, this Agreement shall be
construed as if such invalid provisions had not been inserted.

10. Governing Law.

This Agreement shall be governed by the laws of the United States, where
applicable, and otherwise by the laws of the State of New York other than the
choice of law rules thereof.

11. Assignability and Successors.

This Agreement may not be assigned by the Executive or the Employer, except that
this Agreement shall be binding upon and shall inure to the benefit of the
successor of the Employer through merger or corporate reorganization.

12. Counterparts.

This Agreement may be executed in counterparts (each of which need not be
executed by each of the parties), which together shall constitute one and the
same instrument.

13. Jurisdiction and Venue.

The jurisdiction of any proceeding between the parties arising out of, or with
respect to, this Agreement shall be in a court of competent jurisdiction in New
York State, and venue shall be in Oneida County. Each party shall be subject to
the personal jurisdiction of the courts of New York State.

14. Indemnification and Insurance.

During the Employment Term and for a period of six years thereafter, the
Employer shall cause the Executive to be covered by and named as an insured
under any policy or contract of insurance obtained to insure officers against
personal liability for acts or omissions in connection with service as a
director or officer of Partners Trust or the Bank or any subsidiary or affiliate
thereof or service in other capacities at the request of the Employer. The
coverage provided to the Executive pursuant to this section shall be of the same
scope and on the same terms and conditions as the coverage (if any) provided to
other officers of the Employer.

To the maximum extent permitted under applicable law, during the Employment Term
and for a period of 6 years thereafter, the Employer shall indemnify the
Executive against and hold him harmless from any costs, liabilities, losses and
exposures to the fullest extent and on the most favorable terms and conditions
that similar indemnification is offered to any officer of the Employer or any
subsidiary or affiliate thereof.

15. Notices.

All notices, demands, requests, or other communications which may be or are
required to be given, served, or sent by any party to any other party pursuant
to this Agreement shall be in writing and shall be hand delivered, sent by
overnight courier or mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, or transmitted by telegram, telecopy or
telex, addressed as follows:

(i) If to the Employer:

Partners Trust Bank

233 Genesee Street

Utica, NY 13501

Attn: Chief Executive Officer

with a copy (which shall not constitute notice) to:

Stuart G. Stein, Esq.

Hogan & Hartson, L.L.P.

555 13th Street, N.W.

Washington, DC 20004-1109

Fax: 202/637-5910

(ii) If to the Executive:

Richard F. Callahan

4349 Indianfield Road

Clinton New York 13323

Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served or sent.
Each notice, demand, request, or communication which shall be hand delivered,
sent, mailed, telecopied or telexed in the manner described above, or which
shall be delivered to a telegraph company, shall be deemed sufficiently given,
served, sent, received or delivered for all purposes at such time as it is
delivered to the addressee (with the return receipt, the delivery receipt, or
(with respect to a telecopy or telex) the answerback being deemed conclusive,
but not exclusive, evidence of such delivery) or at such time as delivery is
refused by the addressee upon presentation.

16. Miscellaneous.

This Agreement constitutes the entire understanding and Agreement between the
parties with respect to the subject matter hereof and shall supersede all prior
understandings and agreements including, but not limited to, the EPA Agreement.

This Agreement cannot be amended, modified, or supplemented in any respect,
except by a subsequent written agreement entered into by the parties hereto.

The services to be performed by the Executive are special and unique; it is
agreed that any breach of this Agreement by the Executive shall entitle the
Employer (or any successors or assigns of the Employer), in addition to any
other legal remedies available to them, to apply to any court of competent
jurisdiction to enjoin such breach.

 

 

* * *

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, or
caused this Agreement to be duly executed on their behalf, as of the date and
year first above written.

Attest: PARTNERS TRUST FINANCIAL
GROUP, INC.

/s/ Cheryl S. Dreels

/s/ John A. Zawadzki
By: John A. Zawadzki
Its: President & CEO

/s/Richard F. Callahan

Richard F. Callahan

Executive

Attest: PARTNERS TRUST BANK

/s/ Cheryl S. Dreels

/s/ John A. Zawadzki
By: John A. Zawadzki
Its: President & CEO