PATHFINDER
BANCORP, INC.


PATHFINDER
BANK


CHANGE
IN CONTROL AGREEMENT








This Agreement is made effective as of
the January 1, 2007, by and between Pathfinder Bank (the "Bank"), a New York
chartered stock savings bank, with its principal administrative office at 214
West First Street, Oswego, New York 13126-2547, jointly with Pathfinder Bancorp,
Inc, the sole stockholder of the Bank, and James A. Dowd (the
"Executive").  Any reference to "Company" herein shall mean Pathfinder
Bancorp, Inc. or any successor thereto. Any reference to "Employer" herein shall
mean both the Bank and the Company or any successors thereto.





WHEREAS, the Employer and
Executive entered into a change in control agreement; and





WHEREAS, Section 409A of the
Internal Revenue Code (“Code”), effective January 1, 2005, requires deferred
compensation arrangements, including those set forth in change in control
agreements, to comply with its provisions and restrictions and limitations on
payments of deferred compensation; and





WHEREAS, Code Section 409A and
the final regulations issued thereunder in April of 2007 necessitate changes to
said change in control agreement; and





WHEREAS, Executive has agreed
to such changes; and





WHEREAS, the Employer believes
it is in the best interests to enter into a revised change in control agreement
(the “Agreement”) in order to provide Executive with certain benefits in the
event of a Change in Control of the Employer, as herein after defined, and
incorporate the changes required by the new tax laws.





NOW, THEREFORE, in
consideration of the mutual covenants herein contained, and upon the other terms
and conditions hereinafter provided, the parties hereby agree as
follows:





1.           CHANGE IN CONTROL
DEFINED





For purposes of this Agreement, a
"Change in Control" of the Bank or Company shall mean a Change in Control of a
nature that (i) would be required to be reported in response to Item 5.01 of the
current report on Form 8-K, as in effect on the date hereof, pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"); or (ii)
results in a Change in Control of the Bank or the Company within the meaning of
the Home Owners Loan Act, as amended, and applicable rules and regulations
promulgated there under, as in effect at the time of the Change in Control
(collectively, the “HOLA”); or (iii) without limitation such a Change in Control
shall be deemed to have occurred at such time as (a) any "person" (as the term
is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of Company's outstanding securities except for any
securities purchased by the Employer’s employee stock ownership plan or trust;
or (b) individuals who constitute the Company’s Board of Directors on the date
hereof (the "Incumbent Board") cease for any reason to constitute at least a
majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election was approved by
a vote of at least three-quarters of the directors comprising the Incumbent
Board, or whose nomination for election by the Company's stockholders was
approved by the same Nominating Committee serving under an Incumbent Board,
shall be, for purposes of this clause (b), considered as though he were a member
of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation,
sale of all or substantially all the assets of the Bank or the Company or
similar transaction in which the Bank or Company is not the surviving
institution occurs; or (d) a proxy statement soliciting proxies from
stockholders of the Company, by someone other than the current management of the
Company, seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Company or similar transaction with one or more
corporations or financial institutions, and as a result such proxy solicitation
a plan of reorganization, merger consolidation or similar transaction involving
the Company is approved by the requisite vote of the Company’s stockholders; or
(e) a tender offer is made for 25% or more of the voting securities of the
Company and the shareholders owning beneficially or of record 25% or more of the
outstanding securities of the Company have tendered or offered to sell their
shares pursuant to such tender offer and such tendered shares have been accepted
by the tender offeror.  Notwithstanding anything to the contrary
herein, a “Change in Control” of the Bank or the Company shall not be deemed to
have occurred in the event of a conversion of Pathfinder Bancorp, MHC to stock
holding company form.





2.           BENEFITS DUE TO EXECUTIVE IN THE
EVENT OF CHANGE IN CONTROL





If any of
the events described in Section 1 hereof constituting a Change in Control have
occurred, Executive shall be entitled to the benefits provided in paragraphs
(a), (b), (c), (d) and (e) of this Section 2 upon his dismissal from employment
within twelve (12) months of the Change in Control (“Dismissal”).
Notwithstanding any other provision of this Agreement, a voluntary termination
by the Executive shall not be deemed a “Dismissal”, although the following
actions by the employer shall be deemed a “Dismissal”: (i) material change in
Executive’s function, duties, or responsibilities, which change would cause
Executive’s position to become one of lesser responsibility, importance or scope
from the position and attributes thereof;  (ii) relocation of
Executive’s principal place of employment by more than 30 miles from its
location at the effective date of this agreement; or, (iii) a material reduction
in the benefits and prerequisites to the Executive from those being provided as
of the effective date of this Agreement, provided that Executive provides
written notice to the Employer within ninety (90) days of the initial existence
of an event described in this paragraph and the Employer has at least thirty
(30) days to remedy such events described paragraph unless the Employer decides
to waive such period and make an immediate payment hereunder.





(a)           Upon
the occurrence of a Change in Control followed by the Executive's Dismissal, the
Employer shall pay Executive, or in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may be, as severance
pay or liquidated damages, or both, a sum equal to his most recent annual base
salary, including bonuses and any other cash compensation paid to the Executive
within the most recent twelve (12) month period.  Such Payment shall
be made by the Employer on the Date of Dismissal.  Notwithstanding the
foregoing, in the event the Executive is a Specified Employee (within the
meaning of Treasury Regulations §1.409A-1(i)), then, to the extent necessary to
avoid penalties under Code Section 409A, no payment shall be made to the
Executive prior to the first day of the seventh month following the Executive’s
Date of Dismissal in excess of the “permitted amount” under Code Section
409A.  For these purposes, the “permitted amount” shall be an amount
that does not exceed two times the lesser of: (i) the sum of Executive’s
annualized compensation based upon the annual rate of pay for services provided
to the Employer for the calendar year preceding the year in which occurs the
Executive’s Date of Dismissal or (ii) the maximum amount that may be taken into
account under a tax-qualified plan pursuant to Code Section 401(a)(17) for the
calendar year in which occurs the Executive’s Date of
Dismissal.  Payment of the “permitted amount” shall be made within
thirty days following the Executive’s Date of Dismissal.  Any payment
in excess of the permitted amount shall be made to the Executive on the first
day of the seventh month following the Executive’s Date of
Dismissal.





(b)           Upon
the occurrence of a Change in Control followed by the Executive's Dismissal of
employment, the Employer will cause to be continued life insurance and
non-taxable medical and dental coverage substantially identical to the coverage
maintained by the Employer for Executive prior to his
Dismissal.   Such coverage and payments shall cease upon the
expiration of twelve (12) months.





(c)           Upon
the occurrence of a Change in Control, Executive shall become fully vested in
and entitled to all benefits granted to him pursuant to any stock option plan of
the Bank or Company.





(d)           Upon
the occurrence of a Change in Control, Executive shall become fully vested in
and entitled to all benefits granted to him pursuant to any nonqualified
deferred compensation plan of the Bank or Company, applicable to him, if
any.





(e)           Upon
the occurrence of a Change in Control, the Executive shall become fully vested
in and entitled to all benefits awarded to him under the Bank's or the Company’s
recognition and retention plan or any restricted stock plan in
effect.





(f)           Notwithstanding
the preceding paragraphs of this Section 2, in the event that:





(i)
            the
      aggregate payments or benefits to be made or afforded to Executive under
      said paragraphs (the "Termination Benefits") would be deemed to include an
      "excess parachute payment" under Section 280G of the Internal Revenue Code
      or any successor thereto, and





(ii)
            if
      such Termination Benefits were reduced to an amount (the "Non-Triggering
      Amount"), the value of which is one dollar ($1.00) less than an amount
      equal to the total amount of payments permissible under Section 280G of
      the Internal Revenue Code or any successor thereto, then the Termination
      Benefits to be paid to Executive shall be so reduced so as to be a
      Non-Triggering Amount.





(g)           Notwithstanding
the foregoing, there will be no reduction in the Payment otherwise payable to
Executive during any period during which Executive is incapable of performing
his duties hereunder by reason of disability.





(h)           For
purposes of Section 2, a Dismissal shall be construed to require a “Separation
from Service” as defined in Code Section 409A and the Treasury Regulations
thereunder, provided, however, that the Employer and Executive reasonably
anticipate that the level of bona fide services Executive would perform after
termination would permanently decrease to a level that is less than 50% of the
average level of bona fide services performed (whether as an employee or an
independent contractor) over the immediately preceding 36-month
period.





3.
            TERMINATION
      FOR CAUSE





The term
“Termination for Cause” shall mean termination because of the Executive's
personal dishonesty, incompetence, willful misconduct, any breach of fiduciary
duty involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule, or regulation (other than traffic violations
or similar offenses) or final cease-and-desist order, or material breach of any
provision of this Agreement.  In determining incompetence, the acts or
omissions shall be measured against standards generally prevailing in the
financial services industry.  For purposes of this paragraph, no act
or failure to act on the part of Executive shall be considered "willful" unless
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the Executive's action or omission was in the best
interest of the Employer.  Notwithstanding the foregoing, Executive
shall not be deemed to have been Terminated for Cause unless and until there
shall have been delivered to him a copy of a resolution duly adopted by the
affirmative vote of not less than three-fourths of the members of the Boards of
Directors of the Company and the Bank at a meeting of said Boards called and
held for that purpose (after reasonable notice to Executive and an opportunity
for him, together with counsel, to be heard before the Boards), finding that in
the good faith opinion of the Boards, Executive was guilty of conduct justifying
Termination for Cause and specifying the particulars thereof in
detail.  Notwithstanding any provision in paragraph 2, the Executive
shall not have the right to receive Termination Benefits for any period after
Termination for Cause.





4.           NO
ATTACHMENT





(a)           Except
as required by law, no right to receive payments under this Agreement shall be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance,
charge, pledge, or hypothecation, or to execution, attachment, levy, or similar
process or assignment by operation of law, and any attempt, voluntary or
involuntary, to affect any such action shall be null, void, and of no
effect.





(b)           This
Agreement shall be binding upon, and inure to the benefit of, Executive and the
Employer and their respective successors and assigns.





5.           MODIFICATION
AND WAIVER





(a)           This
Agreement may not be modified or amended except by an instrument in writing
signed by the parties hereto.





(b)           No
term or condition of this Agreement shall be deemed to have been waived, nor
shall there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver or
estoppel.  No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.





6.           SEVERABILITY





If, for any reason, any provision of
this Agreement, or any part of any provision, is held invalid, such invalidity
shall not affect any other provision of this Agreement or any part of such
provision not held so invalid, and each such other provision and part thereof
shall to the full extent consistent with law continue in full force and
effect.





7.           EMPLOYMENT
AT WILL





Except for the limited benefits granted
herein, nothing in this Agreement shall be construed to create an employment
contract and the parties acknowledge that the Executive’s employment remains “at
will”.





8.           AGREEMENT
TERM





The initial “Agreement Term” shall
begin on the date this agreement is executed and shall continue through December
31, 2008.  As of December 31, 2008, and as of each December 31st
thereafter, the agreement term shall extend automatically for one year unless
the Bank gives notice to the executive prior to the date of such extension that
the agreement term will not be extended.   Notwithstanding the
foregoing, if a Change in Control occurs during the agreement term, the
agreement term shall continue through and terminate on the first anniversary of
the date on which the Change in Control occurs.





9.           PROPRIETARY
INFORMATION





The
parties agree to the protection of the Bank’s proprietary information as
follows:





(a)
            Nondisclosure
      of Confidential Information





(i)
            Access.  The
      Executive acknowledges that employment with the Bank necessarily involves
      exposure to, familiarity with, and opportunity to learn highly sensitive,
      confidential and proprietary information of the Bank and its subsidiaries,
      which may include information about products and services, markets,
      customers and prospective customers, vendors and suppliers, miscellaneous
      business relationships, investment products, pricing, billing and
      collection procedures, proprietary software and other intellectual
      property, financial and accounting data, personnel and compensation, data
      processing and communications, technical data, marketing strategies,
      research and development of new or improved products and services, and
      know-how regarding the business of the Bank and its products and services
      (collectively referred to herein as “Confidential
      Information”)





(ii)
            Valuable
      Asset.  The Executive further acknowledges that the Confidential
      Information is a valuable, special, and unique asset of the Bank, such
      that the unauthorized disclosure or use by persons or entities outside the
      Bank would cause irreparable damage to the business of the
      Bank.  Accordingly, the Executive agrees that during and after
      the Executive’s employment with the Bank, until the Confidential
      Information becomes publicly known, the Executive shall not directly or
      indirectly disclose to any person or entity, use for any purpose or permit
      the exploitation, copying or summarizing of, any Confidential Information
      of the Bank, except as specifically required in the proper performance of
      his duties for the Bank.





(iii)
            Duties.  The
      Executive agrees to take all appropriate action, whether by instruction,
      agreement or otherwise, to endure the protection, confidentiality and
      security of the Confidential Information and to satisfy his obligations
      under this Agreement.  Prior to lecturing or publishing articles
      which reference to Bank and its business, the Executive will provide to an
      officer of the Bank a copy of the material to be presented for the Bank to
      review and approve in order to ensure that no Confidential Information is
      disclosed.





(iv)
            Confidential
      Relationship.  The Bank considers its Confidential Information
      to constitute “trade secrets” which are protected from unauthorized
      disclosure under applicable law.  However, whether or not the
      Confidential Information constitutes trade secrets, the Executive
      acknowledges and agrees that the Confidential Information is protected
      from unauthorized disclosure or use due to his covenants under this
      Section 9 and his fiduciary duties as an executive of the
      Bank.





(v)
            Return
      of Documents.  The Executive acknowledges and agrees that the
      Confidential Information is and at all times shall remain the sole and
      exclusive property of the Bank.  Upon the termination of his
      employment with the Bank or upon request by the Bank, the Executive will
      promptly return to the Bank in good condition all documents, data and
      records of any kind, whether in hardcopy or electronic form, which contain
      any Confidential Information, including any and all copies thereof, as
      well as all materials furnished to or acquired by the Executive during the
      course of the Executive’s employment with the
  Bank.





(b)
            Enforcement.  For
      purposes of this Section 9, the term “Bank” shall include the Bank and the
      Company and all of their subsidiaries.  Each such entity shall
      be an intended third party beneficiary of this Agreement and shall have
      the right to enforce the provisions of this Agreement against the
      Executive individually or collectively with any one or more of the other
      subsidiaries.





(c)
            Equitable
      Relief.  The Executive acknowledges and agreed that, by reason
      of the sensitive nature of the Confidential Information of the Bank
      referred to in this Agreement, in addition to recovery of damages and any
      other legal relief to which the Bank may be entitled in the event of the
      Executive’s violation of this Agreement, the Bank shall also be entitled
      to equitable relief, including such injunctive relief as may be necessary
      to protect the interests of the Bank in such Confidential Information and
      as may be necessary to specifically enforce the Executive’s obligations
      under this Agreement.





10.           HEADINGS
FOR REFERENCE ONLY





The headings of sections and paragraphs
herein are included solely for convenience of reference and shall not control
the meaning or interpretation of any of the provisions of this
Agreement.





11.           GOVERNING
LAW





This Agreement shall be governed by the
laws of the State of New York, but only to the extent not superseded by federal
law.





12.           ARBITRATION





Any dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
arbitration in accordance with the rules of the American Arbitration Association
then in effect.  Judgment may be entered on the arbitrator's award in
any court having jurisdiction.





13.           SUCCESSOR
TO THE EMPLOYER





The Employer shall require any
successor or assignee, whether direct or indirect, by purchase, merger,
consolidation or otherwise, to all or substantially all the business or assets
of the Bank or the Company, expressly and unconditionally to assume and agree to
perform the Employer's obligations under this Agreement, in the same manner and
to the same extent that the Employer would be required to perform if no such
succession or assignment had taken place.





14.           REQUIRED
PROVISION




Notwithstanding
anything herein contained to the contrary, any payments to Executive by the
Bank, whether pursuant to this Agreement or otherwise, are subject to and
conditioned upon their compliance with Section 18(k) of the Federal Deposit
Insurance Act, 12 U.S.C. § 1828(k), and the regulations promulgated thereunder
in 12 C.F.R. Part 359.







SIGNATURES








IN WITNESS WHEREOF, the
Employer has caused this Agreement to be executed and its seal to be affixed
hereunto by its duly authorized officer, and Executive has signed this
Agreement, on the day and date first above written.





PATHFINDER
      BANK








12/23/08
            By:  /s/
      Thomas W. Schneider


Date                                                      Thomas
W. Schneider


President and Chief Executive Officer








PATHFINDER BANCORP, INC.











12/23/08
            By:  /s/
      Thomas W. Schneider


Date                                                      Thomas
W. Schneider


President and Chief Executive Officer








EXECUTIVE








12/23/08
            By:  /s/
      James A. Dowd


Date