Exhibit 10.6


BEACON FEDERAL
 EXCESS BENEFIT PLAN

	
  
1.
  	
  
Background   and Purpose
  
	
  
 
  	
  
 
  
	
  
 
  	
  
Beacon Federal (the “Employer”) hereby adopts, effective
January 1, 2007, this Beacon Federal Excess Benefit Plan (the
“Plan”).  The Plan is intended to provide supplemental benefits
to replace the benefits that are curtailed under the Beacon Federal 401(k) Plan
(the “401(k) Plan”) and the Beacon Federal Employee Stock Ownership
Plan (the “ESOP”) due to the application of the Compensation Dollar
Limit and the Annual Additions Dollar Limit (each as defined below).  In
addition, the Plan is intended to be an unfunded plan of deferred compensation
covering “a select group of highly compensated or management
employees” of the Employer for purposes of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”).
 
	
  
 
  	
  
 
  
	
  
2.
  	
  
Definitions
  
	
   
  	
  
 
  
	
  
 
  	
  
The following terms have the following respective meanings:
 
	
  
 
  	
  
 
  
	
  
(a)
  	
  
“Annual Additions Dollar Limit” means the annual dollar limit on
employer contributions, employee contributions and forfeitures that are
permitted to be taken into account for purposes of tax-qualified defined
contribution retirement plans under Code Section 415(c), as adjusted from time
to time.  For 2007, the Annual Additions Dollar Limit is
$45,000.
 
	
  
 
  	
  
 
  
	
  
(b)
  	
  
“Code” means   the Internal Revenue Code, as amended.
  
	
  
 
  	
  
 
  
	
  
(c)
  	
  
“Company” means Beacon Federal Financial Services, Inc.


	
  
 
  	
  
 
  
	
  (d)
  	
  
“Committee” means the committee appointed by the Employer’s Board
of Directors to administer the Plan.
 
	
  
 
  	
  
 
  
	
  
(e)
  	
  
 “Compensation Dollar Limit”
means the annual dollar limit on compensation that is permitted to be taken into
account for purposes of tax-qualified retirement plans under Code Section
401(a)(17), as adjusted from time to time.  For 2007, the Compensation
Dollar Limit is $225,000.
 
	
  
 
  	
  
 
  
	
  
(f)
  	
  
“Participant” means an employee of the Employer designated by the
Committee to participate in the Plan and who is eligible to participate in the
Plan as a result of his or her benefits under the 401(k) Plan and/or the ESOP
being limited by the application of either Code Section 401(a)(17) or
415.
 
	
  
 
  	
  
 
  
	
  
(g)
  	
  
“Plan Year”   means the   calendar year.
  
	
  
 
  	
  
 
  
	
  (h)
  	
  
“Separation from Service” means a termination of employment that
satisfies the conditions of Final Treasury Regulations Section
1.409A-1(h).
 











	
  
(i)
  	
  
“Specified Employee” means an employee described in Final Treasury
Regulations Section 1.409A-1(i).
 
	
  
 
  	
  
 
  
	
  
(j)
  	
  
“Supplemental ESOP” or “Supplemental ESOP Benefit” means the
portion of the Plan that provides a benefit to a Participant that supplements
the tax-qualified ESOP benefit of that Participant.
 
	
  
 
  	
  
 
  
	
  
(k)
  	
  
“Supplemental 401(k) Plan” or “Supplemental 401(k) Benefit”
means the portion of the Plan that provides a benefit to a Participant that
supplements the benefit available to that Participant under the tax-qualified
401(k) Plan.
 
	
  
 
  	
  
 
  
	
  3.
  	
  
Participation
  
	
  
 
  	
  
 
  
	
  
 
  	
  
The Committee may designate an individual as a Participant if such individual is
a participant in the 401(k) Plan and/or the ESOP and his or her benefits
thereunder are limited by the Compensation Dollar Limit or the Annual Additions
Dollar Limit.
 
	
  
 
  	
  
 
  
	
  
4.
  	
  
Benefits
  
	
  
 
  	
  
 
  
	
  
(a)
  	
  
Supplemental   401(k) Plan Benefits
  
	
  
 
  	
  
 
  
	
  
 
  	
  

          (i)          Each
Participant’s Supplemental 401(k) Plan Benefit shall be equal to the excess
of the annual benefit to which the Participant would have been entitled under
the 401(k) Plan if the Compensation Dollar Limit or the Annual Additions Dollar
Limit did not apply.
 
	
   
  	
  
 
  
	
  
 
  	
  

          (ii)          A
Participant’s Supplemental 401(k) Plan Benefits under this Plan shall vest
in accordance with the vesting schedule under the 401(k) Plan.
 
	
  
 
  	
  
 
  
	
  
 
  	
  

          (iii)          A
Participant’s Supplemental 401(k) Plan Benefits shall be invested in the
same investment vehicles as are made available under the 401(k) Plan; provided,
however, that once the Participant has elected to invest any portion of his
Supplemental 401(k) Plan Benefits in Company common stock, then such amount
shall remain invested in Company common stock through the distribution of such
amount.
 
	
  
 
  	
  
 
  
	
  
 
  	
  

          (iv)          A
Participant’s Supplemental 401(k) Plan Benefits shall be paid as a cash
lump sum within 30 days after the Participant’s Separation from Service;
provided, however, that, to the extent the Participant’s Supplemental
401(k) Plan Benefit is invested in Company common stock, such amount shall be
paid to the Participant in the form of Company common stock. Notwithstanding any
provision in the Plan to the contrary, if a Participant is a Specified Employee,
such Participant’s Supplemental 401(k) Plan Benefits shall be paid on the
first day of the seventh month following the Participant’s Separation from
Service.
 
	
   
  	
  
 
  
	
  
(b)
  	
  
ESOP   Supplemental Benefits
  




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          (i)          Each
Participant’s Supplemental ESOP Benefit shall be equal to the excess of the
annual benefit to which the Participant would have been entitled under the ESOP
if the Compensation Dollar Limit or the Annual Additions Dollar Limit did not
apply.
 
	
  
 
  	
  
 
  
	
  
 
  	
  

          (ii)          Each
Participant’s Supplemental ESOP Benefit shall be denominated in Company
common stock.
 
	
  
 
  	
  
 
  
	
  
 
  	
  

          (iii)          Each
Plan Year, the dollar amount of the earnings on the Company common stock deemed
allocated to a Participant’s Supplemental ESOP Benefit account shall be
determined and converted into Company common stock as of the last day of the
Plan Year, based on the fair market value of the Company’s common stock on
such date.
 
	
   
  	
  
 
  
	
  
 
  	
  

          (iv)          Supplemental
ESOP Benefits credited to a Participant’s Supplemental ESOP Benefit account
under the Plan shall vest in accordance with the vesting schedule under the
ESOP.
 
	
  
 
  	
  
 
  
	
  
 
  	
  

          (v)          A
Participant’s Supplemental ESOP Benefits shall be paid in a lump sum within
30 days after the Participant’s Separation from Service and shall be paid
in the form of Company common stock. Notwithstanding any provision in the Plan
to the contrary, if a Participant is a Specified Employee, such
Participant’s Supplemental ESOP Plan Benefits shall be paid on the first
day of the seventh month following his or her Separation from
Service.
 
	
  
 
  	
  
 
  
	
  
5.
  	
  
Supplemental   Survivor Benefits
  
	
  
 
  	
  
 
  
	
  
(a)
  	
  
If a Participant dies prior to the payment of his or her Supplemental 401(k)
Plan Benefits and Supplemental ESOP Benefits, his or her beneficiary shall be
entitled to payment of such benefits in the form of a lump sum payable within 30
days after the Participant’s death.
 
	
   
  	
  
 
  
	
  
(b)
  	
  
Each Participant shall designate a beneficiary to receive death benefits under
the Plan.  If the Participant fails to name a beneficiary under the Plan,
then the beneficiary shall be the Participant’s surviving spouse or if
there is no surviving spouse, the beneficiary shall be the Participant’s
estate.
 
	
  
 
  	
  
 
  
	
  
6.
  	
  
Miscellaneous
  
	
  
 
  	
  
 
  
	
  
(a)
  	
  
The Plan shall be administered by the Committee. The decisions of the Committee
with respect to any questions arising as to the interpretation of the Plan shall
be final, conclusive and binding.
 
	
  
 
  	
  
 
  
	
  
(b)
  	
  
The Plan is intended to be an unfunded plan maintained primarily to provide
deferred compensation benefits for a select group of management or highly
compensated employees.  The Participant and his or her beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights, interest
or claims in any property or assets of the Employer, nor shall they be
beneficiaries of, or have any rights, claims or interests in any investment
products or the proceeds therefrom owned or which may be acquired by the
Employer. Such assets of the Employer shall not be held under any trust for the

 



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benefit of Participants, their beneficiaries, heirs, successors or assigns, or
held in any way as collateral security for the fulfilling of the obligations of
the Employer under the Plan. Any and all of the Employer’s assets shall be,
and remain, the general, unpledged, unrestricted assets of the Employer. The
Employer’s obligation under the Plan shall be that of an unfunded and
unsecured promise of the Employer to pay money in the future.
 
	
  
 
  	
  
 
  
	
  
(c)
  	
  
The Plan may be amended by action of the Board of Directors of the Employer, but
only if (A) such amendment is made with the consent of all Participants who have
not by such date received a distribution of their vested benefits under the
Plan, (B) such amendment is merely administrative in nature and does not
materially affect the rights of Participants with respect to their current or
future benefits, or (C) is made to comply with tax law, regulatory or accounting
requirements.
 
	
  
 
  	
  
 
  
	
  
(d)
  	
  
 Thr Plan may be terminated by action of
the Board of Directors of the Employer, provided that vested benefits under the
Plan as of the date of such termination shall not be reduced, and such vested
benefits shall be paid to Participants (or beneficiaries, if applicable) in a
lump sum in accordance with deadlines for such payments set forth in Final
Treasury Regulations Section 1.409A-3(j)(ix).
 
	
   
  	
  
 
  
	
  
(e)
  	
  
The Plan shall be binding upon and inure to the benefit of any successor to the
Employer or its business as the result of merger, consolidation, reorganization,
transfer or sale of assets or otherwise and any subsequent successor thereto. In
the event of any such merger, consolidation, reorganization, transfer or sale of
assets or other similar transaction, the successor to the Employer or its
business or subsequent successor thereto shall promptly notify Participants or
beneficiaries who have not received their benefits under the Plan, in writing,
of its successorship. In no event shall any such transaction described herein
suspend, delay or otherwise interfere with the rights of Participants or
beneficiaries to receive benefits hereunder.
 
	
  
 
  	
  
 
  
	
  
(f)
  	
  
The Plan is intended to be construed consistent with the requirements of Code
Section 409A, and the Final Treasury regulations and other guidance issued
thereunder.  If any provision of the Plan shall be determined to be
inconsistent therewith for any reason, then the Plan shall be construed, to the
maximum extent possible, to give effect to such provision in a manner consistent
with Code Section 409A, and if such construction is not possible, as if such
provision had never been included.  In the event that any of the provisions
of the Plan or portion thereof are held to be inoperative or invalid by any
court of competent jurisdiction, then (1) insofar as is reasonable, effect will
be given to the intent manifested in the provisions held to be inoperative, and
(2) the invalidity and enforceability of the remaining provisions will not be
affected thereby.
 
	
   
  	
  
 
  
	
  
7.
  	
  
Tax   Withholding
  
	
  
 
  	
  
 
  
	
  
 
  	
  
If upon the payment of any benefits under the Plan, the Employer shall be
required to withhold any amounts with respect to such payment by reason of any
federal, state or local tax laws, rules or regulations, then the Employer shall
be entitled to deduct and withhold such amounts from any such
payment.
 




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8.
  	
  
ERISA   Provisions
  
	
  
 
  	
  
 
  
	
  
(a)
  	
  
Named Fiduciary and Plan Administrator.  The Committee shall be the
“named fiduciary” and “plan administrator” of the Plan, as
defined under ERISA.  The Committee shall be responsible for the
management, control and administration of the Plan as established herein. 
The Committee may delegate to others certain aspects of the management and
operational responsibilities of the Plan, including the employment of advisors
and the delegation of ministerial duties to qualified individuals.


	
   
  	
   
  
	
  (b)
  	
  In the event that benefits under the Plan are not paid to a Participant (or
beneficiary) and such claimant believes that he or she is entitled to receive
such benefits, then a written claim must be made to the Committee within sixty
(60) days from the date payments are refused.  The Committee shall review
the written claim and, if the claim is denied, in whole or in part, they shall
provide in writing, within ninety (90) days of receipt of such claim, the
specific reasons for such denial, reference to the provisions of the Plan upon
which the denial is based, and any additional material or information necessary
to perfect the claim.  Such writing shall further indicate the additional
steps that must be undertaken by claimants if an additional review of the claim
denial is desired.  If claimants desire a second review, claimants shall
notify the Committee in writing within sixty (60) days of the first claim
denial.  Claimants may review the Plan and any documents relating thereto
and submit any issues and comments, in writing, they may believe
appropriate.  In its sole discretion, the Committee shall then review the
second claim and provide a written decision within sixty (60) days of receipt of
such claim.  This decision shall state the specific reasons for the
decision and shall include reference to specific provisions of the Plan upon
which the decision is based. 
 



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