Document:

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 Bancorp, 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
comparable investment vehicles as are made available under the 401(k)
Plan. 
 
	
  
 
  	
  
 
  
	
  
 
  	
  
          (iv)         A
Participant’s Supplemental 401(k) Plan Benefits shall be paid as a cash
lump sum within 90 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.
 
	
   
  	
  
 
  
	
  
 
  	
  
           (v)          In
the event the Plan fails ADP and ACP testing, Participant’s shall receive a
refund check from his 401(k) Plan for an amount equal to the value of such
mandatory reductions deemed necessary for the Plan to pass ADP and ACP testing,
and contemporaneously the Employer shall credit the Participant’s
Supplemental 401(k) Plan with an amount equal to the value of such mandatory
reductions from the Participant’s 401(k) Plan. 
 

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(b)
  	
  
ESOP   Supplemental Benefits
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (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. 
 
	
  
 
  	
  
 
  
	
  
 
  	
  
          (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
90 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 90 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 
  

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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 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)
  	
  
 The 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 
  

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local tax   laws, rules or regulations, then the Employer shall be entitled to deduct and   withhold such amounts from any such payment.
  
	
  
 
  	
  
 
  
	
  
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.
  

5EXHIBIT 10.7

BEACON FEDERAL
 ANNUAL CASH INCENTIVE PLAN

          The purpose of the Annual Cash Incentive Plan (the “Plan”) is to attract, retain and motivate employees of Beacon Federal (the “Bank”) and Beacon Federal Bancorp, Inc. (the “Company”), the holding company of the Bank, to strive for excellence by providing them with an opportunity to earn additional annual compensation based on the performance of the Bank and the Company.  

          This Plan is effective January 1, 2007 and supersedes all prior annual cash incentive bonus plans maintained by the Bank. 

ARTICLE I
 DEFINITIONS

          Whenever the following terms are used in the Plan they shall have the meaning specified below.

          1.1.          Award Year.  The calendar year for which Incentive Awards, if any, are calculated under the Plan.

          1.2.          Board.  The Board of Directors of the Company.

          1.3.          Bonus Pool.  The aggregate dollar value available for Incentive Awards for an Award Year based on Company-wide goals. 

          1.4.          Code.  The Internal Revenue Code of 1986, as amended.

          1.5.          Compensation Committee.  Compensation Committee of the Company.  

          1.6.          Employee.  Any common law employee of the Bank or the Company.

          1.7.          Incentive Awards.  The dollar value of bonus awards made to Participants under the Plan.

          1.8.          Participant.  An Employee who has been granted an Incentive Award.

          1.9.          Plan Committee.  The committee composed of such members as shall be appointed by the Bank’s Chief Executive Officer from time to time to administer the Plan and which shall include, and be chaired by, the Chief Executive Officer. 

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ARTICLE II
 PARTICIPATION

          2.1          Eligibility.  Each Employee who was employed by the Bank or the Company at any time during the Award Year and who remains employed by the Bank or the Company at the time the Incentive Award is paid.  In addition, in order to receive an Incentive Award payment under the Plan, the Employee must have received at least a “satisfactory” overall rating on his or her annual performance review for the Award Year. 

ARTICLE III
 INCENTIVE AWARDS

          3.1          Amount of Bonus Pool.  The Bonus Pool is set by the disinterested members of the Board of Directors in the fourth quarter of the year before the Award Year.  The Bonus Pool is based on the Company’s annual net income before taxes meeting the established threshold level, as recommended to the Compensation Committee and the Board of Directors by the Plan Committee.  Generally, in order for any Incentive Award payments to be made under the Plan, the Company must meet or exceed 80% of the threshold performance.  However, if less than 80% of the threshold performance is achieved, the Compensation Committee has discretion to reward incremental progress.  At the January meeting of the Board of Directors following the close of the Award Year, the Board shall determine whether the threshold performance
has been attained.  

          3.2          Amount of Incentive Awards.  The amount of each Participant’s Incentive Award is based on a percentage of the Participant’s base salary and the size of the Bonus Pool for that Award Year.  The Plan Committee recommends to the Compensation Committee the proposed Incentive Award for each Participant for each Award Year.  The disinterested members of the Board make the final decision regarding the value of all Incentive Awards.

          3.3          Payment of Incentive Awards.  All Incentive Award payments under this Plan shall be distributed no later than March 15 of the calendar year after the Award Year, such that payments under this Plan are intended to be exempt from the definition of “deferred compensation” as set forth in Code Section 409A under the “short term deferral rule” described in Treasury Regulations section 1.409A-1(b)(4).  The Bank and the Company intend to pay Incentive Awards in the first payroll period in February following the close of the Award Year.  If a Participant is on a leave of absence for a portion of the Award Year, due to illness or any other reason, the Incentive Award may be prorated in the sole and exclusive discretion of the Plan Committee to reflect only the time when the Participant was
actively employed and exclude any period when the Participant was on leave.  The pro-ration by the Plan Committee shall be final.

          3.4          Source of Payments.  All payments hereunder shall be paid in cash in U.S. dollars from the general funds of the Bank or the Company and no special or separate funds shall be established and no other segregation of assets shall be made to assure the payment of benefits hereunder.  A Participant shall have no right, title, or interest whatever in or to any investments which the Bank or the Company may make to aid it in meeting its obligations hereunder.  Nothing contained in this Plan, and no action taken pursuant to its provisions shall create or be construed to 

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create a trust of any kind or a fiduciary relationship between the Bank and the Company and a Participant or any other person.  To the extent that any person acquires a right to receive payments from the Bank or the Company, such right shall be no greater than the right of an unsecured creditor.

ARTICLE IV
 PLAN AMENDMENT AND TERMINATION

          4.1          The Board retains the right to amend or terminate the Plan for any reason, including, but not limited to, adverse changes in tax laws or the bankruptcy, receivership or dissolution of the Bank or the Employer.  In the event of a Plan amendment or termination, benefits will be paid out when due under the terms of the Plan.  To the extent feasible, the Bank and the Company shall use their best efforts to avoid adversely affecting the rights of any existing Participants in the Plan.

ARTICLE V
 MISCELLANEOUS

          5.1          No Guarantee of Employment. This Plan is strictly a voluntary undertaking on the part of the Bank and the Company and shall not be deemed to constitute a contract between the Bank or the Company and any Participant, or to be consideration for, or an inducement to, or a condition of, the employment of any Participant.  Nothing contained in the Plan shall be deemed to give any Participant the right to be retained in the employ of the Bank or the Company or to interfere with the right of the Bank or the Company to discharge or retire any Employee at any time, notwithstanding that such discharge might result in a forfeiture of an Incentive Award for an Award Year.

          5.2          Withholding; Tax Effects.  To the extent required by the law in effect at the time payments are made, the Bank or the Company shall withhold from payments made hereunder the minimum taxes required to be withheld by any federal, state or local government.  The Bank and the Company make no representations or warranties as to the tax consequences to a Participant from the receipt of any Incentive Awards.  Each Participant must rely solely on his or her own tax advisor with respect to the tax consequences arising from the receipt of Incentive Awards.

          5.3          Governing Law.  All legal questions pertaining to the Plan shall be determined in accordance with the laws of the State of New York without giving effect to principles of conflict of laws.

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