Document:

EMPLOYMENT AGREEMENT

     This Employment Agreement (the "Agreement") is made effective as of October
1, 2007 (the  "Effective  Date"),  by and between  Beacon  Federal,  a federally
chartered  savings  association with its principal office in East Syracuse,  New
York (the "Bank") and J. David Hammond ("Executive").

     WHEREAS,  Executive is serving as Senior Vice  President  and Chief Lending
Officer  of the Bank and the Bank  wishes to assure  itself of the  services  of
Executive as an officer of the Bank for the period  provided in this  Agreement;
and

     WHEREAS,  in order to induce  Executive to remain in the employ of the Bank
and to provide  further  incentive  for  Executive to achieve the  financial and
performance  objectives  of the Bank,  the  parties  desire  to enter  into this
Agreement.

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

1.   POSITION AND RESPONSIBILITIES.

     During the term of this  Agreement,  Executive  shall  serve as Senior Vice
President and Chief Lending Officer of the Bank.  Executive shall be responsible
for overseeing all of the Bank's lending activities and providing leadership and
direction to the lending  departments or divisions of the Bank.  Executive shall
directly report to the Chief Executive Officer.

2.   TERM AND DUTIES.

     (a) Two Year Contract;  Annual Renewal. The term of Executive's  employment
under this Agreement  shall commence as of the Effective Date and shall continue
thereafter  for a period of two (2) years.  Commencing on the first  anniversary
date  of  this  Agreement  (the  "Anniversary  Date")  and  continuing  on  each
Anniversary  Date  thereafter,  the term of this  Agreement  shall  renew for an
additional year such that the remaining term of this Agreement is always two (2)
years, unless written notice of non-renewal (a "Non-Renewal Notice") is provided
to  Executive  at least thirty (30) days and not more than sixty (60) days prior
to such Anniversary  Date, in which case the term of this Agreement shall become
fixed and shall end three (3) years following such  Anniversary  Date. The Chief
Executive Officer will conduct a performance  evaluation and review of Executive
annually  for purposes of  determining  whether to give notice not to extend the
term of this Agreement, and the results thereof shall be included in the minutes
of the next Board meeting.

     (b) Termination of Agreement.  Notwithstanding  anything  contained in this
Agreement  to  the  contrary,   either  Executive  or  the  Bank  may  terminate
Executive's  employment  with  the  Bank at any  time  during  the  term of this
Agreement, subject to the terms and conditions of this Agreement.

     (c) Continued  Employment  Following  Expiration  of Term.  Nothing in this
Agreement  shall mandate or prohibit a continuation  of  Executive's  employment

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following  the  expiration  of the term of this  Agreement,  upon such terms and
conditions as the Bank and Executive may mutually agree.

     (d) Duties;  Membership on Other Boards. During the term of this Agreement,
except  for  periods of  absence  occasioned  by  illness,  reasonable  vacation
periods, and reasonable leaves of absence approved by the Board, Executive shall
devote substantially all of his business time, attention,  skill, and efforts to
the faithful performance of his duties hereunder;  provided, however, that, with
the prior  approval of the Chief  Executive  Officer,  Executive  may serve,  or
continue to serve,  on the boards of directors of, and hold any other offices or
positions in, business companies or business organizations,  which, in the Chief
Executive Officer's judgment, will not present any conflict of interest with the
Bank, or materially  affect the  performance of Executive's  duties  pursuant to
this Agreement. Executive shall provide the Chief Executive Officer annually for
his approval a list of organizations  for which the Executive acts as a director
or officer.

3.   COMPENSATION, BENEFITS AND REIMBURSEMENT.

     (a) Base Salary. In consideration of Executive's  performance of the duties
set forth in  Section  2, the Bank  shall  provide  Executive  the  compensation
specified in this  Agreement.  The Bank shall pay Executive a salary of $105,240
per year ("Base  Salary").  The Base Salary shall be payable  biweekly,  or with
such other frequency as officers of the Bank are generally paid. During the term
of this  Agreement,  the Base Salary shall be reviewed at least  annually by the
Chief Executive Officer, and the Bank may increase, but not decrease (except for
a decrease  that is generally  applicable  to all  employees)  Executive's  Base
Salary.  Any increase in Base Salary shall become "Base  Salary" for purposes of
this Agreement.

     (b)  Bonus and  Incentive  Compensation.  Executive  shall be  entitled  to
incentive compensation and bonuses as provided in any plan or arrangement of the
Bank in which  Executive is eligible to  participate.  Nothing paid to Executive
under  any  such  plan or  arrangement  will be  deemed  to be in lieu of  other
compensation to which Executive is entitled under this Agreement.

     (c) Employee  Benefits.  The Bank shall  provide  Executive  with  employee
benefit plans, arrangements and perquisites substantially equivalent to those in
which  Executive  was  participating  or  from  which  he was  deriving  benefit
immediately  prior to the  commencement of the term of this  Agreement,  and the
Bank shall not, without  Executive's prior written consent,  make any changes in
such plans,  arrangements or perquisites that would adversely affect Executive's
rights or benefits  thereunder,  except as to any changes that are applicable to
all participating  employees or as reasonably or customarily available.  Without
limiting the  generality  of the  foregoing  provisions  of this  Section  3(c),
Executive  will be  entitled to  participate  in or receive  benefits  under any
employee  benefit  plans  including,  but  not  limited  to,  retirement  plans,
supplemental   retirement   plans,   pension   plans,    profit-sharing   plans,
health-and-accident  insurance  plans,  medical  coverage or any other  employee
benefit  plan or  arrangement  made  available  by the Bank in the future to its
senior executives,  including any stock benefit plans, subject to and on a basis
consistent with the terms,  conditions and overall  administration of such plans
and arrangements.

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     (d) Paid Time Off.  Executive  shall be entitled to paid vacation time each
year during the term of this  Agreement  (measured on a fiscal or calendar  year
basis,  in accordance with the Bank's usual  practices),  as well as sick leave,
holidays  and other paid  absences in  accordance  with the Bank's  policies and
procedures  for senior  executives.  Any  unused  paid time off during an annual
period shall be treated in accordance with the Bank's  personnel  policies as in
effect from time to time.

     (e) Expense  Reimbursements.  During the term of this  Agreement,  the Bank
shall pay Executive $650 per month for the full cost of the use of an automobile
that is mutually  agreeable to the Bank and  Executive.  During the term of this
Agreement,  the Bank shall pay or reimburse Executive for all reasonable travel,
entertainment  and other  reasonable  expenses  incurred by Executive during the
course of performing his obligations  under this Agreement,  including,  without
limitation,  fees for memberships in such clubs and  organizations  as Executive
and  the  Chief  Executive  Officer  shall  mutually  agree  are  necessary  and
appropriate  in  connection  with  the  performance  of his  duties  under  this
Agreement, upon presentation to the Bank of an itemized account of such expenses
in such form as the Bank may reasonably require.

4.   PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

     (a) Upon the  occurrence  of an Event of  Termination  (as herein  defined)
during the term of this Agreement, the provisions of this Section 4 shall apply;
provided,  however,  that benefits  shall be provided  either under Section 4 or
Section 5  (related  to a Change  in  Control),  but not both,  such that to the
extent the  Executive has received  payments  under one of those  Sections,  the
Executive shall not receive payments under the other of those Sections.  As used
in this Agreement,  an "Event of Termination"  shall mean and include any one or
more of the following:

         (i) the  termination  by the Bank of Executive's  full-time  employment
hereunder for any reason other than a "Change in Control," as defined in Section
5, a  termination  for  death or  "Disability,"  as set  forth in  Section  6, a
termination  upon  "Retirement,"  as defined in Section 7, or a termination  for
"Cause," as defined in Section 8; and

         (ii)  Executive's  resignation  from the Bank's  employ upon any of the
following, unless consented to by Executive:

               (A) failure to appoint  Executive  to the  position  set forth in
Section  1,  or  a  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
responsibilities  described in Section 1, to which  Executive  has not agreed in
writing (and any such  material  change  shall be deemed a continuing  breach of
this Agreement by the Bank);

               (B) a relocation of Executive's  principal place of employment to
a location that is more than 50 miles from the location of the Bank's  principal
executive offices as of the date of this Agreement;

               (C)  a  material  reduction  in  the  benefits  and  perquisites,
including  Base  Salary,  to  Executive  from  those  being  provided  as of the

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Effective  Date (except for any reduction  that is part of a reduction in pay or
benefits that is generally applicable to officers or employees of the Bank);

               (D) a liquidation or dissolution of the Bank; or

               (E) a material breach of this Agreement by the Bank.

Upon the occurrence of any event described in clause (ii) above, Executive shall
have the right to elect to  terminate  his  employment  under this  Agreement by
resignation  upon not less than 30 days  prior  written  notice  given  within a
reasonable period of time (not to exceed, except in case of a continuing breach,
90 days) after the event giving rise to the right to elect, which termination by
Executive shall be an Event of  Termination;  provided,  however,  that the Bank
shall have at least 30 days to remedy the  situation.  No  payments  or benefits
shall  be  due to  Executive  under  this  Agreement  upon  the  termination  of
Executive's employment except as provided in Section 4 or 5.

     (b) Upon the  occurrence  of an Event of  Termination,  the Bank  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 lump sum in cash  equal  to two  times  the sum of (i) the
highest  annual  rate of Base Salary  paid to  Executive  at any time under this
Agreement, plus (ii) the highest bonus paid to Executive with respect to the two
completed  fiscal years prior to the Event of  Termination.  Such payments shall
not be reduced in the event  Executive  obtains other  employment  following the
Event of Termination. Notwithstanding the foregoing, in the event Executive is a
"Specified  Employee"  (as defined in Internal  Revenue  Code  ("Code")  Section
409A),  then,  to the extent  necessary  to comply with Code  Section  409A,  no
payment  shall be made to Executive  prior to the first day of the seventh month
following the Event of Termination.

     (c) Upon the occurrence of an Event of Termination,  the Bank shall provide
at the Bank's  expense,  life  insurance  coverage and  non-taxable  medical and
dental coverage substantially  comparable to the coverage maintained by the Bank
for  Executive  prior to the Event of  Termination,  except to the  extent  such
coverage may be changed in its application to all Bank employees.  Such coverage
shall cease  twenty-four  (24) months  following the Event of  Termination.  The
period for group health care continuation  coverage rights under COBRA shall not
begin until the expiration of such twenty-four (24) month period.

5.   CHANGE IN CONTROL.

     (a) Any payment made to Executive  pursuant to this Section 5 is in lieu of
any payments that may otherwise be owed to Executive pursuant to Section 4, such
that Executive shall either receive  payments  pursuant to Section 4 or pursuant
to Section 5, but not pursuant to both Sections.

     (b) Except for payments that are subject to Code Section 409A, for purposes
of this Agreement, the term "Change in Control" shall mean, any of the following
but shall not include a conversion of the Bank from mutual to stock form:

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         (i) a change  in  control  of a nature  that  would be  required  to be
reported in response  to Item  5.01(a) 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, as amended (the "Exchange Act"); or

         (ii) a change in  control of the Bank  within  the  meaning of the Home
Owners' Loan Act, as amended  ("HOLA"),  and  applicable  rules and  regulations
promulgated thereunder, as in effect at the time of the Change in Control; or

         (iii) any of the following events, upon which a Change in Control shall
be deemed to have occurred:

               (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 Bank
or the Bank's holding  company  representing  25% or more of the combined voting
power of such outstanding securities, except for any securities purchased by any
employee stock ownership plan or trust established by the Bank; or

               (B)  individuals  who  constitute the Board on the Effective Date
(the  "Incumbent  Board") cease for any reason to constitute at least a majority
thereof,  provided  that  any  person  becoming  a  director  subsequent  to the
Effective Date 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  stockholders of the Bank or the Bank's holding company was approved
by the same Nominating Committee serving under an Incumbent Board, shall be, for
purposes of this subsection  (B),  considered as though they were members of the
Incumbent Board; or

               (C) a sale of all or substantially  all the assets of the Bank or
the Bank's holding company, or a plan of reorganization,  merger, consolidation,
or similar  transaction  occurs in which the security holders of the Bank or the
Bank's holding company  immediately prior to the consummation of the transaction
do not own at least  50.1%  of the  securities  of the  surviving  entity  to be
outstanding upon consummation of the transaction; or

               (D)  a  proxy  statement  is  issued   soliciting   proxies  from
stockholders of the Bank or the Bank's holding company by someone other than the
current  management  of the Bank or the  holding  company  of the Bank,  seeking
stockholder approval of a plan of reorganization, merger or consolidation of the
Bank or the Bank's  holding  company,  or similar  transaction  with one or more
corporations  as a result  of  which  the  outstanding  shares  of the  class of
securities  then subject to the plan are to be exchanged  for or converted  into
cash or  property  or  securities  not issued by the Bank or the Bank's  holding
company; or

               (E) a  tender  offer  is  made  for  25% or  more  of the  voting
securities of the Bank or the Bank's holding company,  and  stockholders  owning
beneficially or of record 25% or more of the outstanding  securities of the Bank
or the Bank's  holding  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.

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     (c) With respect to any payments hereunder that are subject to Code Section
409A,  "Change in Control"  shall mean (i) a change in the ownership of the Bank
or the Bank's  holding  company,  (ii) a change in the effective  control of the
Bank or the Bank's  holding  company,  or (iii) a change in the  ownership  of a
substantial  portion of the assets of the Bank or the Bank's holding company, as
described below:

         (i) A change in  ownership  occurs on the date that any one person,  or
more than one  person  acting as a group (as  defined  in  Treasury  Regulations
section  1.409A-3(i)(5)(v)(B)),  acquires  ownership of stock of the Bank or the
Bank's holding  company that,  together with stock held by such person or group,
constitutes  more than 50% of the total fair market  value or total voting power
of the stock of the Bank or the Bank's holding company.

         (ii) A  change  in the  effective  control  of the  Bank or the  Bank's
holding company occurs on the date that either (i) any one person,  or more than
one  person  acting as a group  (as  defined  in  Treasury  Regulations  section
1.409A-3(i)(5)(vi)(B))  acquires  (or has acquired  during the  12-month  period
ending on the date of the most  recent  acquisition  by such  person or persons)
ownership of stock of the Bank or the Bank's holding  company  possessing 30% or
more of the total  voting  power of the stock of the Bank or the Bank's  holding
company,  or (ii) a majority of the members of the Bank's or the Bank's  holding
company's board of directors is replaced during any 12-month period by directors
whose  appointment  or election is not  endorsed by a majority of the members of
the Bank's or the Bank's holding  company's board of directors prior to the date
of the  appointment  or  election,  provided  that this  subsection  9(b)(2)  is
inapplicable  where a majority  shareholder  of the Bank or the  Bank's  holding
company is another corporation.

         (iii) A change in a  substantial  portion  of the  Bank's or the Bank's
holding company's assets occurs on the date that any one person or more than one
person  acting  as  a  group  (as  defined  in  Treasury   Regulations   section
1.409A-3(i)(5)(vii)(C))  acquires  (or has acquired  during the 12-month  period
ending on the date of the most  recent  acquisition  by such  person or persons)
assets from the Bank or the Bank's holding  company that have a total gross fair
market  value equal to or more than 40% of the total gross fair market  value of
(i) all of the assets of the Bank or the  Bank's  holding  company,  or (ii) the
value of the assets being  disposed of,  either of which is  determined  without
regard to any liabilities  associated with such assets. For all purposes of this
subsection  5(c),  the  definition of Change in Control shall be construed to be
consistent with the requirements of Treasury Regulations section 1.409A-3(i)(5),
except to the extent that such proposed regulations are superseded by subsequent
guidance.

     (d) Upon the occurrence of a Change in Control, Executive, or, in the event
of his death following a Change in Control, his beneficiary or beneficiaries, or
his estate,  as the case may be, shall  receive as severance  pay or  liquidated
damages,  or both,  a lump sum cash  payment  equal to two  times the sum of (i)
Executive's  highest  annual rate of Base Salary paid to  Executive  at any time
under this Agreement, plus (ii) the highest bonus paid to Executive with respect
to the two completed fiscal years prior to the Change in Control.

     (e) Upon the termination of Executive's  employment  (other than for Cause)
following a Change in  Control,  the Bank shall  provide at the Bank's  expense,
life   insurance   coverage  and   non-taxable   medical  and  dental   coverage

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substantially  comparable  to the coverage  maintained by the Bank for Executive
prior to his  termination,  except to the extent such coverage may be changed in
its  application to all Bank  employees.  Such coverage shall cease  twenty-four
(24) months following the termination of Executive's employment.  The period for
group health care continuation coverage rights under COBRA shall not begin until
the expiration of such twenty-four (24) month period.

     (f)  Notwithstanding  the  preceding  paragraphs  of this Section 5, in the
event  that  the  aggregate  payments  or  benefits  to be made or  afforded  to
Executive  in the event of a Change in  Control  would be deemed to  include  an
"excess  parachute  payment"  under Code Section 280G or any successor  thereto,
then at the  election of  Executive,  (i) such  payments  or  benefits  shall be
payable or provided to Executive over the minimum period necessary to reduce the
present  value of such  payments  or  benefits  to an amount  that is one dollar
($1.00) less than three times  Executive's "base amount" under such Code Section
280G, or (ii) the payments or benefits to be provided under this Section 5 shall
be reduced to the extent  necessary to avoid  treatment  as an excess  parachute
payment,  with the allocation of the reduction  among such payments and benefits
to be determined by Executive.

6.   TERMINATION FOR DISABILITY OR DEATH.

     (a) Termination of Executive's  employment  based on "Disability"  shall be
construed to comply with Code Section 409A and shall be deemed to have  occurred
if: (i)  Executive is unable to engage in any  substantial  gainful  activity by
reason of any medically  determinable  physical or mental impairment that can be
expected to result in death, or last for a continuous period of not less than 12
months;  (ii)  by  reason  of any  medically  determinable  physical  or  mental
impairment  that can be  expected to result in death,  or last for a  continuous
period of not less than 12 months,  Executive  is receiving  income  replacement
benefits for a period of not less than three months under an accident and health
plan  covering  employees of the Bank or the Bank's  holding  company;  or (iii)
Executive  is  determined  to  be  totally   disabled  by  the  Social  Security
Administration.  The  provisions  of Sections  6(b) and (c) shall apply upon the
termination of the Executive's employment based on Disability.

     (b)  Executive  shall be entitled to receive  benefits  under any short- or
long-term  disability plan maintained by the Bank. To the extent such taxable or
non-taxable benefits are less than Executive's  after-tax or pre-tax Base Salary
(respectively),  the Bank shall pay Executive an amount equal to the  difference
between such disability plan benefits and the amount of Executive's  Base Salary
for the longer of (i) the  remaining  term of this  Agreement,  or (ii) one year
following the termination of his employment due to Disability.

     (c) The Bank  shall  cause to be  continued  life  insurance  coverage  and
non-taxable medical and dental coverage substantially comparable to the coverage
maintained by the Bank for Executive  prior to the termination of his employment
based on  Disability,  except to the extent such  coverage may be changed in its
application to all Bank employees or not available on an individual  basis to an
employee  terminated  based on  Disability.  This coverage  shall cease upon the
earlier of (i) the date  Executive  returns to the  full-time  employment of the
Bank; (ii) Executive's full-time employment by another employer; (iii) Executive
attaining the age of 65; or (iv) Executive's death.

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     (d) In the event of  Executive's  death during the term of this  Agreement,
his  estate,  legal  representatives  or named  beneficiaries  (as  directed  by
Executive  in  writing)  shall be paid  Executive's  Base  Salary at the rate in
effect  at the time of  Executive's  death for a period of one (1) year from the
date of Executive's  death,  and the Bank shall continue to provide  non-taxable
medical,  dental and other insurance  benefits normally provided for Executive's
family (in accordance with its customary  co-pay  percentages)  for one (1) year
after  Executive's  death.  Such  payments  are in  addition  to any other  life
insurance  benefits that  Executive's  beneficiaries  may be entitled to receive
under any  employee  benefit  plan  maintained  by the Bank for the  benefit  of
Executive.

7.   TERMINATION UPON RETIREMENT.

     Termination  of Executive's  employment  based on  "Retirement"  shall mean
termination of Executive's employment at any time after Executive reaches age 65
or in  accordance  with any  retirement  policy  established  by the Board  with
Executive's  consent with respect to him. Upon termination of Executive based on
Retirement,  no amounts or benefits shall be due Executive under this Agreement,
and Executive shall be entitled to all benefits under any retirement plan of the
Bank and other plans to which Executive is a party.

8.   TERMINATION FOR CAUSE.

     (a) The Bank may  terminate  Executive's  employment  at any time,  but any
termination  other than  termination for "Cause," as defined  herein,  shall not
prejudice  Executive's  right to  compensation  or  other  benefits  under  this
Agreement.  Executive  shall  have no right  to  receive  compensation  or other
benefits for any period after  termination for "Cause."  Termination for "Cause"
shall mean termination because of Executive's personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit, material
breach of the Bank's Code of Ethics,  material  violation of the  Sarbanes-Oxley
requirements  for  officers  of public  companies,  if  applicable,  that in the
reasonable  opinion of the Chief Executive Officer will likely cause substantial
financial  harm or  substantial  injury  to the  reputation  of the  Bank of any
holding  company  of  the  Bank,  willfully  engaging  in  actions  that  in the
reasonable  opinion of the Chief Executive Officer will likely cause substantial
financial  harm or  substantial  injury to the business  reputation of the Bank,
intentional failure to perform stated duties, willful violation of any law, rule
or regulation  (other than routine  traffic  violations or similar  offenses) or
final  cease-and-desist  order,  or  material  breach of any  provision  of this
Agreement.

     (b) For  purposes of this  Section 8, no act or failure to act, on the part
of Executive,  shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without  reasonable  belief that  Executive's
action or omission was in the best interests of the Bank. Any act, or failure to
act, based upon the direction of the Chief  Executive  Officer or based upon the
advice of counsel for the Bank shall be  conclusively  presumed  to be done,  or
omitted to be done, by Executive in good faith and in the best  interests of the
Bank.

9.   RESIGNATION FROM BOARDS OF DIRECTORS

     In the event of  Executive's  termination  of  employment  for any  reason,
Executive's  service (if any) as a director of the Bank, any holding  company of

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the Bank,  and any affiliate of the Bank or holding  company  shall  immediately
terminate.  This  Section  9 shall  constitute  a  resignation  notice  for such
purposes.

10.  NOTICE.

     (a) Any purported  termination by the Bank for Cause shall be  communicated
by Notice of  Termination  to  Executive.  If, within thirty (30) days after any
Notice of  Termination  for Cause is given,  Executive  notifies the Bank that a
dispute exists concerning the termination, the parties shall promptly proceed to
arbitration, as provided in Section 20. Notwithstanding the pendency of any such
dispute,  the Bank shall discontinue paying  Executive's  compensation until the
dispute  is  finally  resolved  in  accordance  with  this  Agreement.  If it is
determined that Executive is entitled to compensation and benefits under Section
4 or 5, the payment of such compensation and benefits by the Bank shall commence
immediately  following the date of resolution by arbitration,  with interest due
Executive on the cash amount that would have been paid pending  arbitration  (at
the prime rate as published in The Wall Street Journal from time to time).

     (b) Any other  purported  termination by the Bank or by Executive  shall be
communicated by a "Notice of  Termination"  (as defined in Section 10(c)) to the
other party.  If,  within  thirty (30) days after any Notice of  Termination  is
given,  the party receiving such Notice of Termination  notifies the other party
that a dispute  exists  concerning the  termination,  the parties shall promptly
proceed to arbitration as provided in Section 20.  Notwithstanding  the pendency
of any such dispute,  the Bank shall  continue to pay Executive his Base Salary,
and other compensation and benefits in effect when the notice giving rise to the
dispute was given (except as to termination  of Executive for Cause);  provided,
however, that such payments and benefits shall not continue beyond the date that
is twenty-four  (24) months from the date the Notice of Termination is given. In
the event the voluntary  termination  by Executive of his employment is disputed
by the Bank,  and if it is  determined  in  arbitration  that  Executive  is not
entitled to termination benefits pursuant to this Agreement, he shall return all
cash  payments  made to him pending  resolution  by  arbitration,  with interest
thereon at the prime rate as published  in The Wall Street  Journal from time to
time, if it is determined in arbitration that Executive's  voluntary termination
of employment was not taken in good faith and not in the reasonable  belief that
grounds  existed  for  his  voluntary  termination.  If  it is  determined  that
Executive is entitled to receive severance  benefits under this Agreement,  then
any  continuation  of Base Salary and other  compensation  and benefits  made to
Executive  under  this  Section  10 shall  offset  the  amount of any  severance
benefits that are due to Executive under this Agreement.

     (c) For purposes of this Agreement,  a "Notice of Termination" shall mean a
written  notice that shall indicate the specific  termination  provision in this
Agreement  relied  upon and shall set forth in  reasonable  detail the facts and
circumstances  claimed  to  provide  a  basis  for  termination  of  Executive's
employment under the provision so indicated.

11.  POST-TERMINATION OBLIGATIONS.

     (a) Executive  hereby  covenants and agrees that,  for a period of one year
following his termination of employment with the Bank, he shall not, without the
written consent of the Bank, either directly or indirectly:

                                       9
<PAGE>

         (i) solicit, offer employment to, or take any other action intended (or
that a reasonable person acting in like circumstances  would expect) to have the
effect of causing any officer or employee of the Bank or of any holding  company
of the Bank, or any of their respective subsidiaries or affiliates, to terminate
his or her  employment  and accept  employment  or become  affiliated  with,  or
provide  services for  compensation in any capacity  whatsoever to, any business
whatsoever that competes with the business of the Bank or of any holding company
of the Bank,  or any of their direct or indirect  subsidiaries  or affiliates or
has  headquarters  or offices within 50 miles of the locations in which the Bank
of any  holding  company  of the Bank has  business  operations  or has filed an
application for regulatory approval to establish an office;

         (ii) become an officer,  employee,  consultant,  director,  independent
contractor, agent, sole proprietor, joint venturer, greater than 5% equity owner
or  stockholder,  partner or  trustee  of any  savings  bank,  savings  and loan
association,  savings  and loan  holding  company,  credit  union,  bank or bank
holding company, insurance company or agency, any mortgage or loan broker or any
other entity  competing with the Bank or its  affiliates in the same  geographic
locations  where the Bank or its  affiliates  has material  business  interests;
provided,  however,  that  this  restriction  shall  not  apply  if  Executive's
employment is terminated following a Change in Control; or

         (iii) solicit,  provide any information,  advice or  recommendation  or
take any other  action  intended  (or that a  reasonable  person  acting in like
circumstances  would  expect) to have the effect of causing any  customer of the
Bank to terminate an existing business or commercial relationship with the Bank.

     (b) Executive shall, upon reasonable  notice,  furnish such information and
assistance to the Bank as may  reasonably be required by the Bank, in connection
with any litigation in which it or any of its  subsidiaries or affiliates is, or
may become, a party; provided,  however, that Executive shall not be required to
provide  information or assistance  with respect to any  litigation  between the
Executive and the Bank or any of its subsidiaries or affiliates.

     (c) All payments and benefits to Executive  under this  Agreement  shall be
subject to  Executive's  compliance  with this  Section 11. The parties  hereto,
recognizing  that  irreparable  injury will result to the Bank, its business and
property in the event of  Executive's  breach of this Section 11, agree that, in
the  event of any such  breach  by  Executive,  the Bank  will be  entitled,  in
addition  to any other  remedies  and damages  available,  to an  injunction  to
restrain the violation  hereof by Executive  and all persons  acting for or with
Executive.  Executive  represents  and admits that  Executive's  experience  and
capabilities are such that Executive can obtain employment in a business engaged
in  other  lines  and/or  of a  different  nature  than the  Bank,  and that the
enforcement  of a remedy by way of injunction  will not prevent  Executive  from
earning a livelihood.  Nothing herein will be construed as prohibiting  the Bank
or any holding company of the Bank from pursuing any other remedies available to
them for such breach or  threatened  breach,  including  the recovery of damages
from Executive.

                                       10
<PAGE>

12.  SOURCE OF PAYMENTS.

     All  payments  provided in this  Agreement  shall be timely paid in cash or
check from the general funds of the Bank. Any holding company established by the
Bank may accede to this  Agreement  but only for the  purposed  of  guaranteeing
payment and provision of all amounts and benefits due hereunder to Executive.

13.  EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

     This Agreement contains the entire understanding between the parties hereto
and  supersedes  any  prior  employment   agreement  between  the  Bank  or  any
predecessor  of the Bank and  Executive,  except that this  Agreement  shall not
affect or operate to reduce any benefit or compensation  inuring to Executive of
a kind elsewhere  provided.  No provision of this Agreement shall be interpreted
to mean that  Executive  is  subject  to  receiving  fewer  benefits  than those
available to him without reference to this Agreement.

14.  NO ATTACHMENT; BINDING ON SUCCESSORS.

     (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 effect 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 Bank and their respective successors and assigns.

15. 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.

16.  REQUIRED PROVISIONS.

     (a) The Bank may  terminate  Executive's  employment  at any time,  but any
termination  by the Board other than  termination  for Cause shall not prejudice
Executive's  right to  compensation  or other  benefits  under  this  Agreement.
Executive shall have no right to receive  compensation or other benefits for any
period after termination for Cause.

     (b) If Executive is suspended  from office  and/or  temporarily  prohibited
from participating in the conduct of the Bank's affairs by a notice served under

                                       11
<PAGE>

Section 8(e)(3) [12 USC  ss.1818(e)(3)] or 8(g)(1) [12 USC ss.1818(g)(1)] of the
Federal Deposit Insurance Act, the Bank's  obligations under this contract shall
be  suspended  as  of  the  date  of  service,   unless  stayed  by  appropriate
proceedings.  If the  charges in the notice are  dismissed,  the Bank may in its
discretion (i) pay Executive all or part of the compensation  withheld while its
contract obligations were suspended and (ii) reinstate (in whole or in part) any
of its obligations which were suspended.

     (c)  If   Executive  is  removed   and/or   permanently   prohibited   from
participating  in the  conduct of the Bank's  affairs by an order  issued  under
Section 8(e)(4) [12 USC  ss.1818(e)(4)] or 8(g)(1) [12 USC ss.1818(g)(1)] of the
Federal Deposit  Insurance Act, all obligations of the Bank under this Agreement
shall terminate as of the effective date of the order,  but vested rights of the
contracting parties shall not be affected.

     (d) If the  Bank is in  default  as  defined  in  Section  3(x)(1)  [12 USC
ss.1813(x)(1)] of the Federal Deposit Insurance Act, all obligations of the Bank
under  this  Agreement  shall  terminate  as of the  date of  default,  but this
paragraph shall not affect any vested rights of the contracting parties.

     (e) All obligations under this Agreement shall be terminated, except to the
extent  determined  that  continuation  of the  contract  is  necessary  for the
continued  operation  of the Bank,  (i) by the Director of the OTS or his or her
designee, at the time the FDIC enters into an agreement to provide assistance to
or on behalf of the Bank under the authority  contained in Section 13(c) [12 USC
ss.1823(c)] of the Federal Deposit Insurance Act; or (ii) by the Director or his
or her  designee  at the time the  Director  or his or her  designee  approves a
supervisory  merger to resolve problems related to operation of the Bank or when
the Bank is determined by the Director to be in an unsafe or unsound  condition.
Any  rights of the  parties  that have  already  vested,  however,  shall not be
affected by such action.

     (f) Notwithstanding anything herein contained to the contrary, any payments
to Executive by the Bank or any holding company of 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.
Section 1828(k),  and the regulations  promulgated  thereunder in 12 C.F.R. Part
359.

17.  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.

18.  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.

                                       12
<PAGE>

19.  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.

20.  ARBITRATION.

     Any  dispute  or  controversy  arising  under or in  connection  with  this
Agreement shall be settled exclusively by binding arbitration, as an alternative
to civil  litigation  and  without  any trial by jury to  resolve  such  claims,
conducted  by a panel of three  arbitrators  sitting in a location  selected  by
Executive  within  fifty  (50)  miles  from  the main  office  of the  Bank,  in
accordance  with the rules of the American  Arbitration  Association's  National
Rules for the  Resolution  of  Employment  Disputes  ("National  Rules") then in
effect.  One arbitrator shall be selected by Executive,  one arbitrator shall be
selected  by the  Bank  and  the  third  arbitrator  shall  be  selected  by the
arbitrators  selected by the  parties.  If the  arbitrators  are unable to agree
within  fifteen  (15)  days upon a third  arbitrator,  the  arbitrator  shall be
appointed for them from a panel of arbitrators  selected in accordance  with the
National Rules.  Judgment may be entered on the arbitrator's  award in any court
having jurisdiction.

21.  INDEMNIFICATION.

     (a) Executive  shall be provided with coverage under a standard  directors'
and officers'  liability insurance policy, and shall be indemnified for the term
of this Agreement and for a period of six years thereafter to the fullest extent
permitted under  applicable law against all expenses and liabilities  reasonably
incurred  by him in  connection  with  or  arising  out of any  action,  suit or
proceeding  in which he may be  involved by reason of his having been a director
or officer of the Bank or any  affiliate  (whether or not he  continues  to be a
director or officer at the time of incurring such expenses or liabilities), such
expenses and  liabilities to include,  but not be limited to,  judgments,  court
costs  and  attorneys'  fees  and  the  cost  of  reasonable  settlements  (such
settlements must be approved by the Chief Executive Officer), provided, however,
Executive  shall  not  be  indemnified  or  reimbursed  for  legal  expenses  or
liabilities  incurred in connection with an action,  suit or proceeding  arising
from  any  illegal  or  fraudulent   act   committed  by  Executive.   Any  such
indemnification  shall  be  made  consistent  with  Section  545.121  of the OTS
Regulations  and Section 18(k) of the Federal  Deposit  Insurance Act, 12 U.S.C.
ss.1828(K), and the regulations issued thereunder in 12 C.F.R. Part 359.

     (b) Any indemnification by the Bank shall be subject to compliance with any
applicable regulations of the OTS.

22.  ADDRESS FOR NOTICE.

     For the purposes of this  Agreement,  notices and all other  communications
provided for in this  Agreement  shall be in writing and shall be deemed to have
been duly given when delivered or mailed by certified or registered mail, return
receipt requested,  postage prepaid,  addressed to the respective  addresses set
forth below:

                                       13
<PAGE>

                  To the Bank:         Beacon Federal
                                       6311 Court Street Road
                                       East Syracuse, NY 13057
                                       Telephone: (315) 433-0111
                                       Fax: (315) 431-9514

                  To Executive:        J. David Hammond
                                       6471 Beech Road
                                       Auburn, NY 13021

                                   SIGNATURES

     IN WITNESS  WHEREOF,  the Bank has caused this  Agreement to be executed by
its duly authorized representatives, and Executive has signed this Agreement, as
of the date first above written.

                                       BEACON FEDERAL

October 3, 2007                        By: /s/ Timothy P. Ahern
----------------------------               --------------------------------
Date                                       Chairman of the Board

                                       EXECUTIVE:

October 1, 2007                        /s/ J. David Hammond
----------------------------           ------------------------------------
Date                                   J. David HammondEMPLOYMENT AGREEMENT

     This Employment Agreement (the "Agreement") is made effective as of October
1, 2007 (the  "Effective  Date"),  by and between  Beacon  Federal,  a federally
chartered  savings  association with its principal office in East Syracuse,  New
York (the "Bank") and Darren T. Crossett ("Executive").

     WHEREAS,  Executive is serving as Senior Vice President and Chief Operating
Officer  of the Bank and the Bank  wishes to assure  itself of the  services  of
Executive as an officer of the Bank for the period  provided in this  Agreement;
and

     WHEREAS,  in order to induce  Executive to remain in the employ of the Bank
and to provide  further  incentive  for  Executive to achieve the  financial and
performance  objectives  of the Bank,  the  parties  desire  to enter  into this
Agreement.

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

1.   POSITION AND RESPONSIBILITIES.

     During the term of this  Agreement,  Executive  shall  serve as Senior Vice
President  and  Chief  Operating  Officer  of  the  Bank.   Executive  shall  be
responsible  for  providing  leadership  and  direction  to all  departments  or
divisions of the Bank.  Executive  shall directly  report to the Chief Executive
Officer.

2.   TERM AND DUTIES.

     (a) Two Year Contract;  Annual Renewal. The term of Executive's  employment
under this Agreement  shall commence as of the Effective Date and shall continue
thereafter  for a period of two (2) years.  Commencing on the first  anniversary
date  of  this  Agreement  (the  "Anniversary  Date")  and  continuing  on  each
Anniversary  Date  thereafter,  the term of this  Agreement  shall  renew for an
additional year such that the remaining term of this Agreement is always two (2)
years, unless written notice of non-renewal (a "Non-Renewal Notice") is provided
to  Executive  at least thirty (30) days and not more than sixty (60) days prior
to such Anniversary  Date, in which case the term of this Agreement shall become
fixed and shall end three (3) years following such  Anniversary  Date. The Chief
Executive Officer will conduct a performance  evaluation and review of Executive
annually  for purposes of  determining  whether to give notice not to extend the
term of this Agreement, and the results thereof shall be included in the minutes
of the next Board meeting.

     (b) Termination of Agreement.  Notwithstanding  anything  contained in this
Agreement  to  the  contrary,   either  Executive  or  the  Bank  may  terminate
Executive's  employment  with  the  Bank at any  time  during  the  term of this
Agreement, subject to the terms and conditions of this Agreement.

     (c) Continued  Employment  Following  Expiration  of Term.  Nothing in this
Agreement  shall mandate or prohibit a continuation  of  Executive's  employment
following  the  expiration  of the term of this  Agreement,  upon such terms and
conditions as the Bank and Executive may mutually agree.

<PAGE>

     (d) Duties;  Membership on Other Boards. During the term of this Agreement,
except  for  periods of  absence  occasioned  by  illness,  reasonable  vacation
periods, and reasonable leaves of absence approved by the Board, Executive shall
devote substantially all of his business time, attention,  skill, and efforts to
the faithful performance of his duties hereunder;  provided, however, that, with
the prior  approval of the Chief  Executive  Officer,  Executive  may serve,  or
continue to serve,  on the boards of directors of, and hold any other offices or
positions in, business companies or business organizations,  which, in the Chief
Executive Officer's judgment, will not present any conflict of interest with the
Bank, or materially  affect the  performance of Executive's  duties  pursuant to
this Agreement. Executive shall provide the Chief Executive Officer annually for
his approval a list of organizations  for which the Executive acts as a director
or officer.

3.   COMPENSATION, BENEFITS AND REIMBURSEMENT.

     (a) Base Salary. In consideration of Executive's  performance of the duties
set forth in  Section  2, the Bank  shall  provide  Executive  the  compensation
specified in this  Agreement.  The Bank shall pay Executive a salary of $125,000
per year ("Base  Salary").  The Base Salary shall be payable  biweekly,  or with
such other frequency as officers of the Bank are generally paid. During the term
of this  Agreement,  the Base Salary shall be reviewed at least  annually by the
Chief Executive Officer, and the Bank may increase, but not decrease (except for
a decrease  that is generally  applicable  to all  employees)  Executive's  Base
Salary.  Any increase in Base Salary shall become "Base  Salary" for purposes of
this Agreement.

     (b)  Bonus and  Incentive  Compensation.  Executive  shall be  entitled  to
incentive compensation and bonuses as provided in any plan or arrangement of the
Bank in which  Executive is eligible to  participate.  Nothing paid to Executive
under  any  such  plan or  arrangement  will be  deemed  to be in lieu of  other
compensation to which Executive is entitled under this Agreement.

     (c) Employee  Benefits.  The Bank shall  provide  Executive  with  employee
benefit plans, arrangements and perquisites substantially equivalent to those in
which  Executive  was  participating  or  from  which  he was  deriving  benefit
immediately  prior to the  commencement of the term of this  Agreement,  and the
Bank shall not, without  Executive's prior written consent,  make any changes in
such plans,  arrangements or perquisites that would adversely affect Executive's
rights or benefits  thereunder,  except as to any changes that are applicable to
all participating  employees or as reasonably or customarily available.  Without
limiting the  generality  of the  foregoing  provisions  of this  Section  3(c),
Executive  will be  entitled to  participate  in or receive  benefits  under any
employee  benefit  plans  including,  but  not  limited  to,  retirement  plans,
supplemental   retirement   plans,   pension   plans,    profit-sharing   plans,
health-and-accident  insurance  plans,  medical  coverage or any other  employee
benefit  plan or  arrangement  made  available  by the Bank in the future to its
senior executives,  including any stock benefit plans, subject to and on a basis
consistent with the terms,  conditions and overall  administration of such plans
and arrangements.

                                       2
<PAGE>

     (d) Paid Time Off.  Executive  shall be entitled to paid vacation time each
year during the term of this  Agreement  (measured on a fiscal or calendar  year
basis,  in accordance with the Bank's usual  practices),  as well as sick leave,
holidays  and other paid  absences in  accordance  with the Bank's  policies and
procedures  for senior  executives.  Any  unused  paid time off during an annual
period shall be treated in accordance with the Bank's  personnel  policies as in
effect from time to time.

     (e) Expense  Reimbursements.  During the term of this  Agreement,  the Bank
shall pay Executive $650 per month for the full cost of the use of an automobile
that is mutually  agreeable to the Bank and  Executive.  During the term of this
Agreement,  the Bank shall pay or reimburse Executive for all reasonable travel,
entertainment  and other  reasonable  expenses  incurred by Executive during the
course of performing his obligations  under this Agreement,  including,  without
limitation,  fees for memberships in such clubs and  organizations  as Executive
and  the  Chief  Executive  Officer  shall  mutually  agree  are  necessary  and
appropriate  in  connection  with  the  performance  of his  duties  under  this
Agreement, upon presentation to the Bank of an itemized account of such expenses
in such form as the Bank may reasonably require.

4.   PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

     (a) Upon the  occurrence  of an Event of  Termination  (as herein  defined)
during the term of this Agreement, the provisions of this Section 4 shall apply;
provided,  however,  that benefits  shall be provided  either under Section 4 or
Section 5  (related  to a Change  in  Control),  but not both,  such that to the
extent the  Executive has received  payments  under one of those  Sections,  the
Executive shall not receive payments under the other of those Sections.  As used
in this Agreement,  an "Event of Termination"  shall mean and include any one or
more of the following:

         (i) the  termination  by the Bank of Executive's  full-time  employment
hereunder for any reason other than a "Change in Control," as defined in Section
5, a  termination  for  death or  "Disability,"  as set  forth in  Section  6, a
termination  upon  "Retirement,"  as defined in Section 7, or a termination  for
"Cause," as defined in Section 8; and

         (ii)  Executive's  resignation  from the Bank's  employ upon any of the
following, unless consented to by Executive:

               (A) failure to appoint  Executive  to the  position  set forth in
Section  1,  or  a  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
responsibilities  described in Section 1, to which  Executive  has not agreed in
writing (and any such  material  change  shall be deemed a continuing  breach of
this Agreement by the Bank);

               (B) a relocation of Executive's  principal place of employment to
a location that is more than 50 miles from the location of the Bank's  principal
executive offices as of the date of this Agreement;

               (C)  a  material  reduction  in  the  benefits  and  perquisites,
including  Base  Salary,  to  Executive  from  those  being  provided  as of the

                                       3
<PAGE>

Effective  Date (except for any reduction  that is part of a reduction in pay or
benefits that is generally applicable to officers or employees of the Bank);

               (D) a liquidation or dissolution of the Bank; or

               (E) a material breach of this Agreement by the Bank.

Upon the occurrence of any event described in clause (ii) above, Executive shall
have the right to elect to  terminate  his  employment  under this  Agreement by
resignation  upon not less than 30 days  prior  written  notice  given  within a
reasonable period of time (not to exceed, except in case of a continuing breach,
90 days) after the event giving rise to the right to elect, which termination by
Executive shall be an Event of  Termination;  provided,  however,  that the Bank
shall have at least 30 days to remedy the  situation.  No  payments  or benefits
shall  be  due to  Executive  under  this  Agreement  upon  the  termination  of
Executive's employment except as provided in Section 4 or 5.

     (b) Upon the  occurrence  of an Event of  Termination,  the Bank  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 lump sum in cash  equal  to two  times  the sum of (i) the
highest  annual  rate of Base Salary  paid to  Executive  at any time under this
Agreement, plus (ii) the highest bonus paid to Executive with respect to the two
completed  fiscal years prior to the Event of  Termination.  Such payments shall
not be reduced in the event  Executive  obtains other  employment  following the
Event of Termination. Notwithstanding the foregoing, in the event Executive is a
"Specified  Employee"  (as defined in Internal  Revenue  Code  ("Code")  Section
409A),  then,  to the extent  necessary  to comply with Code  Section  409A,  no
payment  shall be made to Executive  prior to the first day of the seventh month
following the Event of Termination.

     (c) Upon the occurrence of an Event of Termination,  the Bank shall provide
at the Bank's  expense,  life  insurance  coverage and  non-taxable  medical and
dental coverage substantially  comparable to the coverage maintained by the Bank
for  Executive  prior to the Event of  Termination,  except to the  extent  such
coverage may be changed in its application to all Bank employees.  Such coverage
shall cease  twenty-four  (24) months  following the Event of  Termination.  The
period for group health care continuation  coverage rights under COBRA shall not
begin until the expiration of such twenty-four (24) month period.

5.   CHANGE IN CONTROL.

     (a) Any payment made to Executive  pursuant to this Section 5 is in lieu of
any payments that may otherwise be owed to Executive pursuant to Section 4, such
that Executive shall either receive  payments  pursuant to Section 4 or pursuant
to Section 5, but not pursuant to both Sections.

     (b) Except for payments that are subject to Code Section 409A, for purposes
of this Agreement, the term "Change in Control" shall mean, any of the following
but shall not include a conversion of the Bank from mutual to stock form:

                                       4
<PAGE>

         (i) a change  in  control  of a nature  that  would be  required  to be
reported in response  to Item  5.01(a) 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, as amended (the "Exchange Act"); or

         (ii) a change in  control of the Bank  within  the  meaning of the Home
Owners' Loan Act, as amended  ("HOLA"),  and  applicable  rules and  regulations
promulgated thereunder, as in effect at the time of the Change in Control; or

         (iii) any of the following events, upon which a Change in Control shall
be deemed to have occurred:

               (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 Bank
or the Bank's holding  company  representing  25% or more of the combined voting
power of such outstanding securities, except for any securities purchased by any
employee stock ownership plan or trust established by the Bank; or

               (B)  individuals  who  constitute the Board on the Effective Date
(the  "Incumbent  Board") cease for any reason to constitute at least a majority
thereof,  provided  that  any  person  becoming  a  director  subsequent  to the
Effective Date 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  stockholders of the Bank or the Bank's holding company was approved
by the same Nominating Committee serving under an Incumbent Board, shall be, for
purposes of this subsection  (B),  considered as though they were members of the
Incumbent Board; or

               (C) a sale of all or substantially  all the assets of the Bank or
the Bank's holding company, or a plan of reorganization,  merger, consolidation,
or similar  transaction  occurs in which the security holders of the Bank or the
Bank's holding company  immediately prior to the consummation of the transaction
do not own at least  50.1%  of the  securities  of the  surviving  entity  to be
outstanding upon consummation of the transaction; or

               (D)  a  proxy  statement  is  issued   soliciting   proxies  from
stockholders of the Bank or the Bank's holding company by someone other than the
current  management  of the Bank or the  holding  company  of the Bank,  seeking
stockholder approval of a plan of reorganization, merger or consolidation of the
Bank or the Bank's  holding  company,  or similar  transaction  with one or more
corporations  as a result  of  which  the  outstanding  shares  of the  class of
securities  then subject to the plan are to be exchanged  for or converted  into
cash or  property  or  securities  not issued by the Bank or the Bank's  holding
company; or

               (E) a  tender  offer  is  made  for  25% or  more  of the  voting
securities of the Bank or the Bank's holding company,  and  stockholders  owning
beneficially or of record 25% or more of the outstanding  securities of the Bank
or the Bank's  holding  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.

                                       5
<PAGE>

     (c) With respect to any payments hereunder that are subject to Code Section
409A,  "Change in Control"  shall mean (i) a change in the ownership of the Bank
or the Bank's  holding  company,  (ii) a change in the effective  control of the
Bank or the Bank's  holding  company,  or (iii) a change in the  ownership  of a
substantial  portion of the assets of the Bank or the Bank's holding company, as
described below:

         (i) A change in  ownership  occurs on the date that any one person,  or
more than one  person  acting as a group (as  defined  in  Treasury  Regulations
section  1.409A-3(i)(5)(v)(B)),  acquires  ownership of stock of the Bank or the
Bank's holding  company that,  together with stock held by such person or group,
constitutes  more than 50% of the total fair market  value or total voting power
of the stock of the Bank or the Bank's holding company.

         (ii) A  change  in the  effective  control  of the  Bank or the  Bank's
holding company occurs on the date that either (i) any one person,  or more than
one  person  acting as a group  (as  defined  in  Treasury  Regulations  section
1.409A-3(i)(5)(vi)(B))  acquires  (or has acquired  during the  12-month  period
ending on the date of the most  recent  acquisition  by such  person or persons)
ownership of stock of the Bank or the Bank's holding  company  possessing 30% or
more of the total  voting  power of the stock of the Bank or the Bank's  holding
company,  or (ii) a majority of the members of the Bank's or the Bank's  holding
company's board of directors is replaced during any 12-month period by directors
whose  appointment  or election is not  endorsed by a majority of the members of
the Bank's or the Bank's holding  company's board of directors prior to the date
of the  appointment  or  election,  provided  that this  subsection  9(b)(2)  is
inapplicable  where a majority  shareholder  of the Bank or the  Bank's  holding
company is another corporation.

         (iii) A change in a  substantial  portion  of the  Bank's or the Bank's
holding company's assets occurs on the date that any one person or more than one
person  acting  as  a  group  (as  defined  in  Treasury   Regulations   section
1.409A-3(i)(5)(vii)(C))  acquires  (or has acquired  during the 12-month  period
ending on the date of the most  recent  acquisition  by such  person or persons)
assets from the Bank or the Bank's holding  company that have a total gross fair
market  value equal to or more than 40% of the total gross fair market  value of
(i) all of the assets of the Bank or the  Bank's  holding  company,  or (ii) the
value of the assets being  disposed of,  either of which is  determined  without
regard to any liabilities  associated with such assets. For all purposes of this
subsection  5(c),  the  definition of Change in Control shall be construed to be
consistent with the requirements of Treasury Regulations section 1.409A-3(i)(5),
except to the extent that such proposed regulations are superseded by subsequent
guidance.

     (d) Upon the occurrence of a Change in Control, Executive, or, in the event
of his death following a Change in Control, his beneficiary or beneficiaries, or
his estate,  as the case may be, shall  receive as severance  pay or  liquidated
damages,  or both,  a lump sum cash  payment  equal to two  times the sum of (i)
Executive's  highest  annual rate of Base Salary paid to  Executive  at any time
under this Agreement, plus (ii) the highest bonus paid to Executive with respect
to the two completed fiscal years prior to the Change in Control.

     (e) Upon the termination of Executive's  employment  (other than for Cause)
following a Change in  Control,  the Bank shall  provide at the Bank's  expense,
life   insurance   coverage  and   non-taxable   medical  and  dental   coverage

                                       6
<PAGE>

substantially  comparable  to the coverage  maintained by the Bank for Executive
prior to his  termination,  except to the extent such coverage may be changed in
its  application to all Bank  employees.  Such coverage shall cease  twenty-four
(24) months following the termination of Executive's employment.  The period for
group health care continuation coverage rights under COBRA shall not begin until
the expiration of such twenty-four (24) month period.

     (f)  Notwithstanding  the  preceding  paragraphs  of this Section 5, in the
event  that  the  aggregate  payments  or  benefits  to be made or  afforded  to
Executive  in the event of a Change in  Control  would be deemed to  include  an
"excess  parachute  payment"  under Code Section 280G or any successor  thereto,
then at the  election of  Executive,  (i) such  payments  or  benefits  shall be
payable or provided to Executive over the minimum period necessary to reduce the
present  value of such  payments  or  benefits  to an amount  that is one dollar
($1.00) less than three times  Executive's "base amount" under such Code Section
280G, or (ii) the payments or benefits to be provided under this Section 5 shall
be reduced to the extent  necessary to avoid  treatment  as an excess  parachute
payment,  with the allocation of the reduction  among such payments and benefits
to be determined by Executive.

6.   TERMINATION FOR DISABILITY OR DEATH.

     (a) Termination of Executive's  employment  based on "Disability"  shall be
construed to comply with Code Section 409A and shall be deemed to have  occurred
if: (i)  Executive is unable to engage in any  substantial  gainful  activity by
reason of any medically  determinable  physical or mental impairment that can be
expected to result in death, or last for a continuous period of not less than 12
months;  (ii)  by  reason  of any  medically  determinable  physical  or  mental
impairment  that can be  expected to result in death,  or last for a  continuous
period of not less than 12 months,  Executive  is receiving  income  replacement
benefits for a period of not less than three months under an accident and health
plan  covering  employees of the Bank or the Bank's  holding  company;  or (iii)
Executive  is  determined  to  be  totally   disabled  by  the  Social  Security
Administration.  The  provisions  of Sections  6(b) and (c) shall apply upon the
termination of the Executive's employment based on Disability.

     (b)  Executive  shall be entitled to receive  benefits  under any short- or
long-term  disability plan maintained by the Bank. To the extent such taxable or
non-taxable benefits are less than Executive's  after-tax or pre-tax Base Salary
(respectively),  the Bank shall pay Executive an amount equal to the  difference
between such disability plan benefits and the amount of Executive's  Base Salary
for the longer of (i) the  remaining  term of this  Agreement,  or (ii) one year
following the termination of his employment due to Disability.

     (c) The Bank  shall  cause to be  continued  life  insurance  coverage  and
non-taxable medical and dental coverage substantially comparable to the coverage
maintained by the Bank for Executive  prior to the termination of his employment
based on  Disability,  except to the extent such  coverage may be changed in its
application to all Bank employees or not available on an individual  basis to an
employee  terminated  based on  Disability.  This coverage  shall cease upon the
earlier of (i) the date  Executive  returns to the  full-time  employment of the
Bank; (ii) Executive's full-time employment by another employer; (iii) Executive
attaining the age of 65; or (iv) Executive's death.

                                       7
<PAGE>

     (d) In the event of  Executive's  death during the term of this  Agreement,
his  estate,  legal  representatives  or named  beneficiaries  (as  directed  by
Executive  in  writing)  shall be paid  Executive's  Base  Salary at the rate in
effect  at the time of  Executive's  death for a period of one (1) year from the
date of Executive's  death,  and the Bank shall continue to provide  non-taxable
medical,  dental and other insurance  benefits normally provided for Executive's
family (in accordance with its customary  co-pay  percentages)  for one (1) year
after  Executive's  death.  Such  payments  are in  addition  to any other  life
insurance  benefits that  Executive's  beneficiaries  may be entitled to receive
under any  employee  benefit  plan  maintained  by the Bank for the  benefit  of
Executive.

7.   TERMINATION UPON RETIREMENT.

     Termination  of Executive's  employment  based on  "Retirement"  shall mean
termination of Executive's employment at any time after Executive reaches age 65
or in  accordance  with any  retirement  policy  established  by the Board  with
Executive's  consent with respect to him. Upon termination of Executive based on
Retirement,  no amounts or benefits shall be due Executive under this Agreement,
and Executive shall be entitled to all benefits under any retirement plan of the
Bank and other plans to which Executive is a party.

8.   TERMINATION FOR CAUSE.

     (a) The Bank may  terminate  Executive's  employment  at any time,  but any
termination  other than  termination for "Cause," as defined  herein,  shall not
prejudice  Executive's  right to  compensation  or  other  benefits  under  this
Agreement.  Executive  shall  have no right  to  receive  compensation  or other
benefits for any period after  termination for "Cause."  Termination for "Cause"
shall mean termination because of Executive's personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit, material
breach of the Bank's Code of Ethics,  material  violation of the  Sarbanes-Oxley
requirements  for  officers  of public  companies,  if  applicable,  that in the
reasonable  opinion of the Chief Executive Officer will likely cause substantial
financial  harm or  substantial  injury  to the  reputation  of the  Bank of any
holding  company  of  the  Bank,  willfully  engaging  in  actions  that  in the
reasonable  opinion of the Chief Executive Officer will likely cause substantial
financial  harm or  substantial  injury to the business  reputation of the Bank,
intentional failure to perform stated duties, willful violation of any law, rule
or regulation  (other than routine  traffic  violations or similar  offenses) or
final  cease-and-desist  order,  or  material  breach of any  provision  of this
Agreement.

     (b) For  purposes of this  Section 8, no act or failure to act, on the part
of Executive,  shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without  reasonable  belief that  Executive's
action or omission was in the best interests of the Bank. Any act, or failure to
act, based upon the direction of the Chief  Executive  Officer or based upon the
advice of counsel for the Bank shall be  conclusively  presumed  to be done,  or
omitted to be done, by Executive in good faith and in the best  interests of the
Bank.

9.   RESIGNATION FROM BOARDS OF DIRECTORS

     In the event of  Executive's  termination  of  employment  for any  reason,
Executive's  service (if any) as a director of the Bank, any holding  company of

                                       8
<PAGE>

the Bank,  and any affiliate of the Bank or holding  company  shall  immediately
terminate.  This  Section  9 shall  constitute  a  resignation  notice  for such
purposes.

10.  NOTICE.

     (a) Any purported  termination by the Bank for Cause shall be  communicated
by Notice of  Termination  to  Executive.  If, within thirty (30) days after any
Notice of  Termination  for Cause is given,  Executive  notifies the Bank that a
dispute exists concerning the termination, the parties shall promptly proceed to
arbitration, as provided in Section 20. Notwithstanding the pendency of any such
dispute,  the Bank shall discontinue paying  Executive's  compensation until the
dispute  is  finally  resolved  in  accordance  with  this  Agreement.  If it is
determined that Executive is entitled to compensation and benefits under Section
4 or 5, the payment of such compensation and benefits by the Bank shall commence
immediately  following the date of resolution by arbitration,  with interest due
Executive on the cash amount that would have been paid pending  arbitration  (at
the prime rate as published in The Wall Street Journal from time to time).

     (b) Any other  purported  termination by the Bank or by Executive  shall be
communicated by a "Notice of  Termination"  (as defined in Section 10(c)) to the
other party.  If,  within  thirty (30) days after any Notice of  Termination  is
given,  the party receiving such Notice of Termination  notifies the other party
that a dispute  exists  concerning the  termination,  the parties shall promptly
proceed to arbitration as provided in Section 20.  Notwithstanding  the pendency
of any such dispute,  the Bank shall  continue to pay Executive his Base Salary,
and other compensation and benefits in effect when the notice giving rise to the
dispute was given (except as to termination  of Executive for Cause);  provided,
however, that such payments and benefits shall not continue beyond the date that
is twenty-four  (24) months from the date the Notice of Termination is given. In
the event the voluntary  termination  by Executive of his employment is disputed
by the Bank,  and if it is  determined  in  arbitration  that  Executive  is not
entitled to termination benefits pursuant to this Agreement, he shall return all
cash  payments  made to him pending  resolution  by  arbitration,  with interest
thereon at the prime rate as published  in The Wall Street  Journal from time to
time, if it is determined in arbitration that Executive's  voluntary termination
of employment was not taken in good faith and not in the reasonable  belief that
grounds  existed  for  his  voluntary  termination.  If  it is  determined  that
Executive is entitled to receive severance  benefits under this Agreement,  then
any  continuation  of Base Salary and other  compensation  and benefits  made to
Executive  under  this  Section  10 shall  offset  the  amount of any  severance
benefits that are due to Executive under this Agreement.

     (c) For purposes of this Agreement,  a "Notice of Termination" shall mean a
written  notice that shall indicate the specific  termination  provision in this
Agreement  relied  upon and shall set forth in  reasonable  detail the facts and
circumstances  claimed  to  provide  a  basis  for  termination  of  Executive's
employment under the provision so indicated.

11.  POST-TERMINATION OBLIGATIONS.

     (a) Executive  hereby  covenants and agrees that,  for a period of one year
following his termination of employment with the Bank, he shall not, without the
written consent of the Bank, either directly or indirectly:

                                        9
<PAGE>

         (i) solicit, offer employment to, or take any other action intended (or
that a reasonable person acting in like circumstances  would expect) to have the
effect of causing any officer or employee of the Bank or of any holding  company
of the Bank, or any of their respective subsidiaries or affiliates, to terminate
his or her  employment  and accept  employment  or become  affiliated  with,  or
provide  services for  compensation in any capacity  whatsoever to, any business
whatsoever that competes with the business of the Bank or of any holding company
of the Bank,  or any of their direct or indirect  subsidiaries  or affiliates or
has  headquarters  or offices within 50 miles of the locations in which the Bank
of any  holding  company  of the Bank has  business  operations  or has filed an
application for regulatory approval to establish an office;

         (ii) become an officer,  employee,  consultant,  director,  independent
contractor, agent, sole proprietor, joint venturer, greater than 5% equity owner
or  stockholder,  partner or  trustee  of any  savings  bank,  savings  and loan
association,  savings  and loan  holding  company,  credit  union,  bank or bank
holding company, insurance company or agency, any mortgage or loan broker or any
other entity  competing with the Bank or its  affiliates in the same  geographic
locations  where the Bank or its  affiliates  has material  business  interests;
provided,  however,  that  this  restriction  shall  not  apply  if  Executive's
employment is terminated following a Change in Control; or

         (iii) solicit,  provide any information,  advice or  recommendation  or
take any other  action  intended  (or that a  reasonable  person  acting in like
circumstances  would  expect) to have the effect of causing any  customer of the
Bank to terminate an existing business or commercial relationship with the Bank.

     (b) Executive shall, upon reasonable  notice,  furnish such information and
assistance to the Bank as may  reasonably be required by the Bank, in connection
with any litigation in which it or any of its  subsidiaries or affiliates is, or
may become, a party; provided,  however, that Executive shall not be required to
provide  information or assistance  with respect to any  litigation  between the
Executive and the Bank or any of its subsidiaries or affiliates.

     (c) All payments and benefits to Executive  under this  Agreement  shall be
subject to  Executive's  compliance  with this  Section 11. The parties  hereto,
recognizing  that  irreparable  injury will result to the Bank, its business and
property in the event of  Executive's  breach of this Section 11, agree that, in
the  event of any such  breach  by  Executive,  the Bank  will be  entitled,  in
addition  to any other  remedies  and damages  available,  to an  injunction  to
restrain the violation  hereof by Executive  and all persons  acting for or with
Executive.  Executive  represents  and admits that  Executive's  experience  and
capabilities are such that Executive can obtain employment in a business engaged
in  other  lines  and/or  of a  different  nature  than the  Bank,  and that the
enforcement  of a remedy by way of injunction  will not prevent  Executive  from
earning a livelihood.  Nothing herein will be construed as prohibiting  the Bank
or any holding company of the Bank from pursuing any other remedies available to
them for such breach or  threatened  breach,  including  the recovery of damages
from Executive.

                                       10
<PAGE>

12.  SOURCE OF PAYMENTS.

     All  payments  provided in this  Agreement  shall be timely paid in cash or
check from the general funds of the Bank. Any holding company established by the
Bank may accede to this  Agreement  but only for the  purposed  of  guaranteeing
payment and provision of all amounts and benefits due hereunder to Executive.

13.  EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

     This Agreement contains the entire understanding between the parties hereto
and  supersedes  any  prior  employment   agreement  between  the  Bank  or  any
predecessor  of the Bank and  Executive,  except that this  Agreement  shall not
affect or operate to reduce any benefit or compensation  inuring to Executive of
a kind elsewhere  provided.  No provision of this Agreement shall be interpreted
to mean that  Executive  is  subject  to  receiving  fewer  benefits  than those
available to him without reference to this Agreement.

14.  NO ATTACHMENT; BINDING ON SUCCESSORS.

     (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 effect 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 Bank and their respective successors and assigns.

15.  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.

16.  REQUIRED PROVISIONS.

     (a) The Bank may  terminate  Executive's  employment  at any time,  but any
termination  by the Board other than  termination  for Cause shall not prejudice
Executive's  right to  compensation  or other  benefits  under  this  Agreement.
Executive shall have no right to receive  compensation or other benefits for any
period after termination for Cause.

     (b) If Executive is suspended  from office  and/or  temporarily  prohibited
from participating in the conduct of the Bank's affairs by a notice served under

                                       11
<PAGE>

Section 8(e)(3) [12 USC  ss.1818(e)(3)] or 8(g)(1) [12 USC ss.1818(g)(1)] of the
Federal Deposit Insurance Act, the Bank's  obligations under this contract shall
be  suspended  as  of  the  date  of  service,   unless  stayed  by  appropriate
proceedings.  If the  charges in the notice are  dismissed,  the Bank may in its
discretion (i) pay Executive all or part of the compensation  withheld while its
contract obligations were suspended and (ii) reinstate (in whole or in part) any
of its obligations which were suspended.

     (c)  If   Executive  is  removed   and/or   permanently   prohibited   from
participating  in the  conduct of the Bank's  affairs by an order  issued  under
Section 8(e)(4) [12 USC  ss.1818(e)(4)] or 8(g)(1) [12 USC ss.1818(g)(1)] of the
Federal Deposit  Insurance Act, all obligations of the Bank under this Agreement
shall terminate as of the effective date of the order,  but vested rights of the
contracting parties shall not be affected.

     (d) If the  Bank is in  default  as  defined  in  Section  3(x)(1)  [12 USC
ss.1813(x)(1)] of the Federal Deposit Insurance Act, all obligations of the Bank
under  this  Agreement  shall  terminate  as of the  date of  default,  but this
paragraph shall not affect any vested rights of the contracting parties.

     (e) All obligations under this Agreement shall be terminated, except to the
extent  determined  that  continuation  of the  contract  is  necessary  for the
continued  operation  of the Bank,  (i) by the Director of the OTS or his or her
designee, at the time the FDIC enters into an agreement to provide assistance to
or on behalf of the Bank under the authority  contained in Section 13(c) [12 USC
ss.1823(c)] of the Federal Deposit Insurance Act; or (ii) by the Director or his
or her  designee  at the time the  Director  or his or her  designee  approves a
supervisory  merger to resolve problems related to operation of the Bank or when
the Bank is determined by the Director to be in an unsafe or unsound  condition.
Any  rights of the  parties  that have  already  vested,  however,  shall not be
affected by such action.

     (f) Notwithstanding anything herein contained to the contrary, any payments
to Executive by the Bank or any holding company of 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.
Section 1828(k),  and the regulations  promulgated  thereunder in 12 C.F.R. Part
359.

17.  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.

18.  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.

                                       12
<PAGE>

19.  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.

20.  ARBITRATION.

     Any  dispute  or  controversy  arising  under or in  connection  with  this
Agreement shall be settled exclusively by binding arbitration, as an alternative
to civil  litigation  and  without  any trial by jury to  resolve  such  claims,
conducted  by a panel of three  arbitrators  sitting in a location  selected  by
Executive  within  fifty  (50)  miles  from  the main  office  of the  Bank,  in
accordance  with the rules of the American  Arbitration  Association's  National
Rules for the  Resolution  of  Employment  Disputes  ("National  Rules") then in
effect.  One arbitrator shall be selected by Executive,  one arbitrator shall be
selected  by the  Bank  and  the  third  arbitrator  shall  be  selected  by the
arbitrators  selected by the  parties.  If the  arbitrators  are unable to agree
within  fifteen  (15)  days upon a third  arbitrator,  the  arbitrator  shall be
appointed for them from a panel of arbitrators  selected in accordance  with the
National Rules.  Judgment may be entered on the arbitrator's  award in any court
having jurisdiction.

21.  INDEMNIFICATION.

     (a) Executive  shall be provided with coverage under a standard  directors'
and officers'  liability insurance policy, and shall be indemnified for the term
of this Agreement and for a period of six years thereafter to the fullest extent
permitted under  applicable law against all expenses and liabilities  reasonably
incurred  by him in  connection  with  or  arising  out of any  action,  suit or
proceeding  in which he may be  involved by reason of his having been a director
or officer of the Bank or any  affiliate  (whether or not he  continues  to be a
director or officer at the time of incurring such expenses or liabilities), such
expenses and  liabilities to include,  but not be limited to,  judgments,  court
costs  and  attorneys'  fees  and  the  cost  of  reasonable  settlements  (such
settlements must be approved by the Chief Executive Officer), provided, however,
Executive  shall  not  be  indemnified  or  reimbursed  for  legal  expenses  or
liabilities  incurred in connection with an action,  suit or proceeding  arising
from  any  illegal  or  fraudulent   act   committed  by  Executive.   Any  such
indemnification  shall  be  made  consistent  with  Section  545.121  of the OTS
Regulations  and Section 18(k) of the Federal  Deposit  Insurance Act, 12 U.S.C.
ss.1828(K), and the regulations issued thereunder in 12 C.F.R. Part 359.

     (b) Any indemnification by the Bank shall be subject to compliance with any
applicable regulations of the OTS.

22.  ADDRESS FOR NOTICE.

     For the purposes of this  Agreement,  notices and all other  communications
provided for in this  Agreement  shall be in writing and shall be deemed to have
been duly given when delivered or mailed by certified or registered mail, return
receipt requested,  postage prepaid,  addressed to the respective  addresses set
forth below:

                                       13
<PAGE>

                  To the Bank:         Beacon Federal
                                       6311 Court Street Road
                                       East Syracuse, NY 13057
                                       Telephone: (315) 433-0111
                                       Fax: (315) 431-9514

                  To Executive:        Darren T. Crossett
                                       678 Gilbert Mills Road
                                       Fulton, NY 13069

                                   SIGNATURES

     IN WITNESS  WHEREOF,  the Bank has caused this  Agreement to be executed by
its duly authorized representatives, and Executive has signed this Agreement, as
of the date first above written.

                                       BEACON FEDERAL

October 3, 2007                        By: /s/ Timothy P. Ahern
---------------------------                --------------------------------
Date                                       Chairman of the Board

                                       EXECUTIVE:

October 1, 2007                        /s/ Darren T. Crossett
---------------------------            -----------------------------------
Date                                   Darren T. Crossett

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