EX-10.4

(Exhibit 10.4) Stock Ownership Requirements

(FINAL INSTITUTIONS, INC. LOGO) [l11857al1185702.gif]

Financial Institutions, Inc.
Stock Ownership Requirements
Effective Date: January 1, 2005

Purpose

     Financial Institution Inc.’s (FII) Stock Ownership Requirements align the
interests of Executives and Directors (“participants”) with the interests of
shareholders and further promotes FII’s commitment to sound corporate
governance.

II. Participation

FII’s Stock Ownership Requirements apply to the following positions:

  •   Chairman and Chief Executive Officer;     •   Chief Financial Officer    
•   Chief of Community Banking     •   Chief Risk Officer     •   Presidents of
Subsidiary Organizations     •   Non-employee Directors of Financial
Institutions, Inc.     •   Other Company executives as determined by the
Management, Development & Compensation (MD&C) Committee of the FII Board of
Directors.

III. Determination of Requirements

FII’s Stock Ownership Requirements are determined as a multiple of the
Executive’s base salary, and in the case of a non-employee Director, a flat
dollar amount, and then converted to a fixed number of shares. Individual
requirements are established for each participant as follows:

(1) The executive’s base salary is multiplied by the appropriate multiple:

  •   4.0x for Chairman/Chief Executive Officer     •   2.0x for positions in
Salary Ranges 20 and above     •   1.0x for other Executives in Salary Ranges
below 20, as determined by the MD&C Committee of the FII Board of Directors.

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That product is divided by FII’s prior 365-day average closing common stock
price as reported by NASDAQ. That amount is then rounded to the nearest 1,000
shares.

(2) Non-Employee Director of FII

  •   $50,000

This amount is divided by FII’s prior 365-day average closing common stock price
as reported by NASDAQ. That amount is then rounded to the nearest 1,000 shares.

     These requirements have been established using the Executive’s January 1,
2005 base salary and the average FII closing stock price for the period from
January 1, 2004 through December 31, 2004, Executives and Directors who become
subject to the Stock Ownership Requirements in the future will have their
individual requirement established based upon their base salary, or dollar
amount in effect for Directors, at the time they become subject to the
Requirements and FII’s average closing common stock price for the prior 365-day
period. Once established, a participant’s required amount does not change as a
result of changes in his or her base salary or fluctuations in FII’s common
stock price.

IV. Counting Shares Owned

Stock that counts towards satisfaction of FII’s Stock Ownership Requirements
includes:

  •   Shares owned outright by the executive or his or her immediate family
members residing in the same household;     •   Stock held in FII’s 401(k)
Retirement Savings Plan;     •   Shares acquired upon stock option exercises;  
  •   Shares held in trust. (Due to the complexities of trust accounts, requests
to include shares held in trust must be submitted in writing to the Director of
Human Resources. The Director of Human Resources will review the request with
the Chairman and Chief Executive Officer and the MD&C Committee will make the
final decision.)     •   Other types of stock grants that may be issued by FII.

V. Compliance with the Guidelines

Participants are required to achieve their Stock Ownership Requirement within
five years, e.g. by December 31, 2010, in the case of participants subject to
the requirements at January 1, 2005. If a participant’s Stock Ownership
Requirement increases because of a change in title, a five-year period to
achieve the incremental requirement begins in January following the year of the
title change. Until the requirement is achieved, the participant is required to
retain at least 75% of net shares delivered through FII’s Stock Option Program.
Net shares refer to those that remain after shares are sold or netted to pay the
exercise price of stock options and withholding taxes. Until

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the requirement is achieved, shares that were acquired by an executive before he
or she became subject to the Stock Ownership Requirements may only be disposed
of for one or more of the “exclusion” purposes set forth below in this Section V
and only upon compliance with the procedures set forth therein.

Once achieved, ownership of the required amount must be maintained for as long
as the individual is subject to the Stock Ownership Guidelines.

Transferability of stock options does not exempt the participant from the
ownership requirements. The donee will be subject to the same retention
requirement until the ownership requirement is achieved.

Certain exclusions apply to the retention requirement. The existence of
exclusions does not, however, affect the requirement that the participant must
meet his or her Stock Ownership Requirement within the five-year period. The
exclusions are:

  •   Estate planning;     •   Gifts to charity;     •   Education; and     •  
Primary residence.

To be excluded from the retention requirement for any of these purposes, the
participant must submit a form that is available from the Human Resources
Department. This request must include the reason for the exclusion, current
status with respect to the Stock Ownership Requirements and a description of the
stock transactions for which the exclusion is being requested. The Director of
Human Resources will review the request with members of FII’s Management,
Development & Compensation Committee, who will make the final decision. Once the
Stock Ownership Requirement is achieved, the retention ratio no longer applies
unless the participant’s ownership falls below the requirement, at which point
the retention requirement will be reinstated.

Failure to comply with the Stock Ownership Requirements, other than for reasons
approved by the MD&C Committee on an exception basis, may result in termination
of the participant’s employment or continuation as a Board member.

VI. Reporting

Participants are required to sign an attestation when they are in compliance
with their Stock Ownership Requirement. Any participant who has not signed and
returned his or her attestation is subject to the retention requirement. In
addition, any participant who has satisfied his or her Stock Ownership
Requirement must immediately notify the Human Resources Department if at any
subsequent time his or her ownership of FII stock falls below the required
amount.

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VII. Hardship

There may be instances in which the Stock Ownership Requirements would place a
severe hardship on the participant or prevent the participant from complying
with a court order, such as in the case of a divorce settlement. It is expected
that these instances will be rare. In these instances, the participant must
submit a request in writing to the Director of Human Resources that summarizes
the circumstances and describes the extent to which an exemption from the Stock
Ownership Requirements is being requested. The Director of Human Resources will
review the request with members of FII’s Management, Development & Compensation
Committee who will make the final decision. If the request is granted in whole
or in part, the Director of Human Resources will in consultation with the
participant develop an alternative stock ownership plan that reflects both the
intention of these Executive Stock Ownership Requirements and the participant’s
individual circumstances.

VIII. Administration

The Executive Stock Ownership Requirements are administered and interpreted by
the Management, Development & Compensation Committee of Financial Institutions,
Inc.

Revised 1/17/05

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Attachment to Stock Ownership Requirements

Financial Institutions, Inc.

Stock Options Program Effective 1/1/2004

The multiples to be used when granting stock options are:

                Salary     Multiple    
$350,000-$500,000
    1.0-1.2    
$250,000-$350,000
    .8-1.0    
$200,000-$250,000
    .65-.8    
$150,000-$200,000
    .5-.65    
$100,000-$150,000
    .35-.5    
$75,000-$100,000
    .2-.35    
$50,000-$75,000
    .15-.2    

Number of options is determined by multiplying the base salary by the multiple
and dividing by the stock price on the day the options are awarded.

  •   In general, eligible employees are those in salary grades 12 and above who
are achieving a required level of performance for the year.

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