Document:

Filed by Bowne Pure Compliance

	 	 	 	 	 

Exhibit 10.8

AMENDED AND RESTATED

FIRST NIAGARA BANK AND FIRST NIAGARA FINANCIAL GROUP, INC.

DIRECTORS DEFERRED FEES PLAN

ARTICLE I

BACKGROUND, PURPOSE, AND EFFECTIVE DATE

Section 1.01 Background and Purpose of the Plan; Certain Definitions

First Niagara Bank (formerly Lockport Savings Bank) (the “Bank”), established the First
Niagara Bank Directors Deferred Fees Plan (formerly Lockport Savings Bank Trustees Deferred Fees
Plan) to allow members of its Board of Directors (formerly known as Trustees) the opportunity to
defer payment of all or portions of the fees they receive for serving as Directors. The Bank
reorganized from a mutual savings bank to a stock form of organization on April 20, 1998 (the
“Reorganization”). Upon completion of the Reorganization, Bank became a wholly-owned subsidiary of
First Niagara Financial Group, Inc. (“FNFG”). The Plan has been amended and restated, effective
January 1, 2005 to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations issued thereunder.

As used in this Agreement, the term “Company” shall mean (i) Bank with respect to a member of
the Board of Directors of Bank and (ii) FNFG with respect to a member of the Board of Directors of
FNFG. Further, “Director” shall mean an individual who is either a member of the Board of
Directors of Bank or FNFG. Unless the context would clearly indicate otherwise, references to a
Director under this Agreement shall also mean a Trustee of Lockport Savings Bank who served as a
Trustee prior to the effective date of the Reorganization.

Section 1.02 Effective Date and Term

The Plan was originally effective August 18, 1992. The Plan was amended and restated,
effective April 20, 1998, and is further amended and restated effective January 1, 2005. The Plan
shall continue until such time as it is terminated by resolution of the Board of Directors of Bank
in accordance with Article V.

ARTICLE II

CONTRIBUTIONS

Section 2.01 Deferred Fees

a. Initial Election. Each participating Director of the Company shall have the right
to elect to defer the receipt of all or any part of the compensation to which such Director would
otherwise be entitled as director’s fees or committee fees, in which the Company shall credit the
Director’s Deferred Fee Account, as herein defined, with such deferred compensation to be payable
at the time or times and in the manner herein stated. Each new Director electing to defer the
receipt of compensation shall execute and deliver to the Company a “Deferral Election Form,” in the
form attached hereto as Exhibit A within thirty (30) days from the date in which the Director
becomes
eligible to participate in the Plan. For other Directors who are eligible to participate in the
Plan and deliver to the Company an executed Deferral Election Form after the thirty (30) day period
following their initial eligibility, such Deferral Election Form shall apply to services performed
in the Plan Year next following the year in which the Company receives the executed Deferral
Election Form from the Director.

 

 

 

b. Changes in Election. An election to defer compensation shall continue in effect
until changed or revoked. All changes and revocations shall be made in writing in the form of
Notice of Adjustment of Deferral attached hereto as Exhibit B. Such notice shall be effective upon
the January 1st of the year stated therein provided the form is executed and delivered
to the Company by December 15th of the previous calendar year.

c. Restricted Stock Units (“RSUs”). Directors may elect before the beginning of any
Plan Year to receive a grant of restricted stock units (RSUs) under the Company’s Amended and
Restated 2002 Long-Term Incentive Stock Benefit Plan (the “Stock Plan”) (or any successor plan)
instead of an annual grant of restricted stock for the upcoming year. Such elections shall be made
in the form attached hereto as Exhibit E. Dividend equivalent units (“DEUs”) earned on RSUs shall
be accumulated and added to the RSUs.

ARTICLE III

ACCOUNT AND INVESTMENT

Section 3.01 The Deferred Fees Account

a. Maintenance of the Account. The Company shall maintain for each Director who has
elected to defer fees pursuant to Section 2.01 an account (the “Deferred Fees Account”) to which it
shall credit all amounts allocated thereto in accordance with Section 2.01. RSUs shall be
separately accounted for. Each Director’s Deferred Fees Account shall be adjusted no less often
than monthly to reflect the net market value of assets in the Deferred Fees Account under
Section 2.01 and pursuant to Section 3.02. Such adjustments shall be made until no amounts remain
in the Account.

b. Neither RSUs nor Deferred Fees Accounts shall constitute a trust or escrow fund.

c. Each Director’s interest in his or her Deferred Fees Account RSUs and DEUs is limited to
the right to receive payments under this Plan, and the Director’s position is that of a general
unsecured creditor of the Company.

Section 3.02 Power to Invest

a. All RSUs and DEUs shall be deemed invested in Company stock. The Company shall invest all
other amounts in the Deferred Fees Account. Amounts in the Deferred Fees Account shall be invested
in equity securities, fixed income securities, money market accounts and cash, in the sole
discretion of the Company. The Company in its sole discretion may permit a
Director to designate that the amounts represented by his or her Deferred Fees Account be
invested in such particular investments that the Company shall from time to time provide as
permitted investments under the Plan, including investments in the common stock of FNFG.
Notwithstanding the foregoing, in all cases any investment shall be in property and securities
eligible for investment by savings banks under the New York Banking Law.

 

2

 

b. Any change in net market value of assets in the Deferred Fees Account shall be reflected in
the Deferred Fees Account on a monthly basis.

c. The Company shall not be liable to the Director or his or her beneficiary for any loss or
other claim arising out of its investment policy except for that caused by its gross negligence or
willful misconduct.

Section 3.03 Vesting

a. RSUs and DEUs shall vest on the last day of the calendar year for which they are awarded.

b. At all times a Director shall have a 100% nonforfeitable right to all other amounts
credited to his or her Deferred Fees Account; provided that neither a Director nor his or her
Beneficiary shall be entitled to receive any amount in the Director’s Deferred Fees Account if it
is determined at any time that such Director engaged in a dishonest act in the Director’s
relationship with the Company.

ARTICLE IV

BENEFITS

Section 4.01 Upon Cessation of Service as Director

a. Payment of Benefits. Following a Director’s cessation of service as Director for
any reason other than death (the date of which shall be referred to as the “Date of Cessation”),
the Company shall pay to Director the value of the RSUs, DEUs and the Deferred Fees Account (the
“Benefits”), including adjustments that continue to be made pursuant to Article III, in a number of
substantially equal annual payments, as elected by a Director. The most recent payment schedule
elected by the Director shall apply to all Benefits hereunder, provided that such election was made
in accordance with all applicable laws.

b. Separation from Service. Notwithstanding the foregoing, with respect to
employee-Directors, Cessation of Service as used herein shall mean “Separation from Service” as
defined in Code Section 409A, and the Treasury Regulations promulgated thereunder, provided,
however, that the Company and Executive reasonably anticipate that the level of bona fide services
Executive would perform after termination would permanently decrease to a level that is less than
50% of the average level of bona fide services performed (whether as an employee or an independent
contractor) over the immediately preceding 36-month period. With respect to
non-employee-Directors, Cessation of Service as used herein shall mean “Separation from Service” as
defined in
Code Section 409A, and the Treasury Regulations promulgated thereunder, and that such Director
no longer serves on the Board of the Company, the Company’s subsidiaries, or any member of a
controlled group of corporations with the Company within the meaning of Treasury Regulation
§1.409A-1(a)(3).

 

3

 

Section 4.02 Upon Death

a. Prior to Commencement of Payment of Benefits. In the event of a Director’s death
prior to the commencement of payment of the Benefit under Section 4.01, the Company shall pay the
Benefits to the Director’s Beneficiary, in a single lump sum payment or in that number of
substantially equal annual payments beginning the first day of the calendar year after the
Director’s death as the Director elected. The most recent payment schedule elected by the Director
shall apply to all Benefits hereunder, provided that such election was made in accordance with all
applicable laws.

b. After Commencement of Payment of Benefits. In the event of a Director’s death
after commencement of the payment of Benefits under Section 4.01, the Company shall continue
payment of the remaining balance of the Benefits to the Director’s Beneficiary in the same manner
and at the same times as if the Director had not died.

Section 4.03 Unforeseeable Emergency

a. In the case of an unforeseeable emergency, as defined below, a Director may submit a
written request to the Company for (1) a cessation of deferrals under this Plan and a distribution
of all or a part of his or her Benefits prior to the date Benefits otherwise would be payable, or
(2) an acceleration of the payment of installment payments which have already begun. Withdrawals
or acceleration because of an unforeseeable emergency shall be permitted only to the extent
reasonably necessary to satisfy the emergency.

b. An unforeseeable emergency is a severe financial hardship to the Director resulting from an
illness or accident of the Director, the Director’s spouse, the Director’s Beneficiary, or the
Director’s dependent (as defined in Code Section 152 without regard to Code Sections 152(b)(1),
(b)(2), and (d)(1)(B)); loss of the Director’s property due to a casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events beyond the control of
the Director which shall include the need to pay for medical expenses and the need to pay the
funeral expenses of the Director’s spouse, a Beneficiary, or a dependent (as defined above).

Section 4.04 Grandfathered Deferrals

With respect to amounts deferred and interest earned on the amounts deferred on or before
December 31, 2004, the Company, in its sole discretion, may pay out the undisbursed portion of such
deferred compensation, together with interest thereon, in a lump sum at any time, provided,
however, that the Company shall not have the discretion to pay out amounts deferred on or after
January 1, 2005, or interest on amounts deferred on or after January 1, 2005, except in accordance
with the terms of the Director’s written election entered into at the time of deferral or in
accordance with Section 5.01 hereof.

 

4

 

Section 4.05 Election to Change Time and Form of Payment of Benefit

Notwithstanding anything in the Plan to the contrary, a Director who previously filed a
deferral election with the Company may elect to change the time and form of payment to another
permissible time and form of payment by filing with the Company a Transition Year Election Form,
attached hereto as Exhibit D, provided that such election is made by December 31, 2008.

ARTICLE V

PARTIAL OR COMPLETE TERMINATION

Section 5.01 Partial or Complete Termination

a. Partial Termination. The Company may partially terminate the Plan by freezing
future accruals if, in its judgment, the tax, accounting, or other effects of the continuance of
the Plan, or potential payments thereunder, would not be in the best interests of the Company.

b. Complete Termination. Subject to the requirements of Code Section 409A, in the
event of complete termination of the Plan, the Plan shall cease to operate and the Company shall
pay out to each Director his or her benefit as if the Director had terminated service on the Board
of Directors as of the effective date of the complete termination. Such complete termination of
the Plan shall occur only under the following circumstances and conditions:

1. The Company may terminate the Plan within 12 months of a corporate dissolution taxed
under Code Section 331, or with approval of a bankruptcy court pursuant to 11 U.S.C.
§503(b)(1)(A), provided that the amounts deferred under the Plan are included in the
Director’s gross income in the latest of (i) the calendar year in which the Plan terminates;
(ii) the calendar year in which the amount is no longer subject to a substantial risk of
forfeiture; or (iii) the first calendar year in which the payment is administratively
practicable.

2. The Company may terminate the Plan within the 30 days preceding a Change in Control
(but not following a Change in Control), provided that the Plan shall only be treated as
terminated if all substantially similar arrangements sponsored by the Company are terminated
so that the Director and all participants under substantially similar arrangements are
required to receive all amounts of compensation deferred under the terminated arrangements
within 12 months of the date of the termination of the arrangements. For these purposes,
“Change in Control” shall be defined in accordance with the Treasury Regulations under Code
Section 409A.

3. The Company may terminate the Plan provided that (i) the termination and liquidation
does not occur proximate to a downturn in the financial health of the Company, (ii) all
arrangements sponsored by the Company that would be aggregated with this Plan under Treasury
Regulations Section 1.409A-1(c) if the Director covered by this Plan was also covered by any
of those other arrangements are also terminated; (iii) no payments other than
payments that would be payable under the terms of the arrangement if the termination
had not occurred are made within 12 months of the termination of the arrangement; (iv) all
payments are made within 24 months of the termination of the arrangements; and (v) the
Company does not adopt a new arrangement that would be aggregated with any terminated
arrangement under Treasury Regulations Section 1.409A-1(c) if the Company participated in
both arrangements, at any time within three years following the date of termination of the
arrangement.

 

5

 

Section 5.02 No Reduction

No partial or complete termination shall operate to adversely affect the Benefits otherwise
available to a Director if the Director had ceased being a Director as of the effective date of
such amendment, suspension, or termination. Any Benefits determined as of such date shall continue
to be adjusted for net market value of assets as provided in Article III and payable as provided in
Article IV.

ARTICLE VI

MISCELLANEOUS PROVISIONS

Section 6.01 Beneficiary

“Beneficiary” shall mean any one or more persons, corporation or trusts, or any combination
thereof, last designated by a Director to receive the Benefits provided under this Plan. Any
designation made hereunder shall be made in writing by filing the Beneficiary Designation Form,
attached hereto as Exhibit C, with the Company at its principal office. If the Company in its sole
discretion, determines that there is not a valid designation, the Beneficiary shall be the executor
or administrator of the Director’s estate.

Section 6.02 Nonassignability

The interest of any person under this Plan (other than the Company) shall not be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge, attachment or
encumbrance, or to the claims of creditors of such person, and any attempt to effectuate any such
actions shall be void.

Section 6.03 Interest of Director

The Director and any Beneficiary shall be, in respect to the RSUs, DEUs and Deferred Fees
Account and any Benefits to be paid, and remain simply a creditor of the Company in the same manner
as any other creditor having a general claim for compensation, if and when the Director’s or
Beneficiary’s rights to receive payments shall mature and become payable. At no time shall the
Director be deemed to have any right, title or interest, legal or equitable, in any asset of the
Company, including, but not limited to, any investments which represent amounts credited to the
RSUs, DEUs or Deferred Fees Account.

 

6

 

Section 6.04 Taxes

Any distribution under this Plan shall be reduced by the amount of any taxes required to be
withheld from such distribution. This Plan shall permit the acceleration of the time or schedule
of a payment to pay employment related taxes as permitted under Treasury Regulation Section
1.409A-3(j) or to pay any taxes that may become due at any time that the arrangement fails to meet
the requirements of Code Section 409A and the regulations and other guidance promulgated
thereunder. In the latter case, such payments shall not exceed the amount required to be included
in income as the result of the failure to comply with the requirements of Code Section 409A.

Section 6.05 Exclusivity of Plan

This Plan is intended solely for the purpose of deferring fees to the Director to the mutual
advantage of the parties. Nothing contained in this Plan shall in any way affect or interfere with
the right of a Director to participate in any other benefit plan in which he or she may be entitled
to participate.

Section 6.06 No Right to Continued Service

This Plan shall not confer any right to continued service on a Director.

Section 6.07 Notice

Each notice and other communication to be given pursuant to this Plan shall be in writing and
shall be deemed given only when (a) delivered by hand, (b) transmitted by facsimile (fax),
(c) received by the addressee, if sent by registered or certified mail, return receipt requested,
or by Express Mail, Federal Express or other overnight delivery service, to the Company at its
principal office and to a Director at the last known address of such Director (or to such other
address or fax number as a party may specify by notice given to the other party pursuant to this
Section).

Section 6.08 New York Law Controlling

This Plan shall be construed in accordance with the laws of the State of New York.

Section 6.09 Binding on Successors

This Plan shall be binding upon the Directors, Bank and FNFG, their heirs, successors, legal
representatives and assigns.

 

7

 

Section 6.10 Acceleration of Payments

Except as specifically permitted herein or in other sections of this Plan, no acceleration of
the time or schedule of any payment may be made hereunder. Notwithstanding the foregoing, payments
may be accelerated hereunder by the Company, in accordance with the provisions of Treasury
Regulation Section 1.409A-3(j)(4) and any subsequent guidance. Accordingly, payments may be
accelerated, in accordance with requirements and conditions of the Treasury Regulations (or
subsequent guidance) in the following circumstances: (i) as a result of certain domestic relations
orders; (ii) in compliance with ethics agreements with the Federal government; (iii) in compliance
with ethics laws or conflicts of interest laws; (iv) in limited cash-outs (but not in excess of the
limit under Code Section 402(g)(1)(B)); (v) in the case of certain distributions to avoid a
non-allocation year under Code Section 409(p); (vi) to apply certain offsets in satisfaction of a
debt of the Director to the Company; (vii) in satisfaction of certain bona fide disputes between
the Director and the Company; or (viii) for any other purpose set forth in the Treasury Regulations
and subsequent guidance.

 

8

 

     
IN WITNESS WHEREOF, the Company and the Bank have signed this Plan on the dates set forth below.

	 	 	 	 	 
	 	FIRST NIAGARA BANK

 	 
	December 8, 2008 	By:  	/s/ Sharon D. Randaccio
 	 
	Date	 	                      Sharon D. Randaccio 	 
	 	 	Chair, Compensation Committee 	 

	 	 	 	 	 
	 	FIRST NIAGARA FINANCIAL GROUP, INC.

 	 
	December 8, 2008 	By:  	/s/ Sharon D. Randaccio
 	 
	Date	 	                      Sharon D. Randaccio 	 
	 	 	Chair, Compensation Committee 	 

 

9Filed by Bowne Pure Compliance

Exhibit 10.9

FIRST AMENDMENT TO THE

FIRST NIAGARA FINANCIAL GROUP
PINNACLE INCENTIVE COMPENSATION PLAN

WHEREAS, First Niagara Financial Group (the “Company”) established the Pinnacle Incentive
Compensation Plan (the “Plan”), effective January 1, 2005, as a short-term cash incentive
compensation plan; and

WHEREAS, under the Plan, if specified performance targets are met, eligible individuals will
receive a cash lump sum payment in February following the close of the calendar year in which the
incentive compensation was earned; and

WHEREAS, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the
2007 final regulations issued thereunder (the “Final Regulations”), provide that, so long as bonus
plans provide for payment by March 15 of the year after the year in which the amounts are earned,
all payments under such written bonus plans (i) are exempt from 409A under the “short term deferral
rule” and (ii) payments may actually be made, under a rule of administrative convenience, by
December 31 of the year after the year in which the incentive compensation was earned;

NOW THEREFORE, the Plan is hereby amended as follows:

Page 7 of the Plan is hereby amended to read as follows, effective January 1, 2005:

How and When Awards Are Paid

In general, incentive awards will be paid in a separate check in the
mid-February time period to allow for complete end-of-prior-year performance
results to be finalized. However, in any event, payments shall be made no later
than March 15 of the year after the year in which the incentive awards are
earned, such that the payments will be exempt from Section 409A of the Internal
Revenue Code, as amended, under the “short term deferral rule” set forth in the
2007 Final Treasury Regulations issued under Code Section 409A.

IN WITNESS WHEREOF, this First Amendment has been signed on the date set forth below.

	 	 	 	 	 
	 	FIRST NIAGARA FINANCIAL GROUP, INC.
 	 
	December 4, 2008	By:  	/s/  John R. Koelmel
 	 
	Date	 	Date                              John R. Koelmel 	 
	 	 	President & CEO 	 

 

 

 

	 	 	 	 	 

“Get Involved” in

Top Performance

Share FNFG’s Success through the Pinnacle Incentive Compensation Plan

 

 

 

“Get Involved,” Get Recognized, Get Rewarded

First Niagara Financial Group is committed to being the best in all we do. To achieve that goal,
FNFG developed the Pinnacle Incentive Compensation Plan to recognize and reward our collective
success and those who make significant contributions to that success. The Plan takes effect as of
January 1, 2005 for performance during 2005 and subsequent calendar years.

The Pinnacle of our Strategy

The Pinnacle Incentive Plan encourages and rewards your involvement and contributions directly in
line with the goals of our Strategic Blueprint, driving for top results in the following areas:

	 	•	 	improved financial performance
	 
	 	•	 	holistic financial solutions
	 
	 	•	 	improved Human Capital Management
	 
	 	•	 	simplified business processes, and
	 
	 	•	 	delivery of a unique brand of service.

Your Pinnacle Incentive Plan award will take into account your individual contributions as well as
the contributions of the entire team. Here are the components of your incentive opportunity:

Pinnacle Incentive Compensation Opportunity Based On...

	 	•	 	Individual goals—your performance, beyond daily responsibilities, supporting the
broader goals of your team/business unit and the Company
	 
	 	•	 	Team goals—your business unit, department, or function’s performance in achieving key
metrics and performance standards
	 
	 	•	 	Company goals—FNFG achieving Earnings Per Share (EPS) and Return on Assets (ROA) goals

Our total compensation philosophy

FNFG is committed to offering compensation and benefits programs that
motivate, recognize, and reward employees for offering products and services
that meet all the financial needs and exceed the expectations
of our customers.

Rewards Where You Make a Positive Impact

FNFG expects everyone to work as a team for the Company’s success. That’s why a portion of
everyone’s incentive opportunity is tied to Company performance and team/Business Unit performance.

 

1

 

How much of your total incentive is tied to Company goals depends on the extent to which you have
direct accountability for First Niagara’s Company Goals. If your accountability for Company
performance is significant, a slightly greater portion of your incentive will be tied to Company
performance than someone in a job with indirect accountability for Company performance, as shown
below.

Your manager will discuss your specific goals and target incentive opportunity when you plan for
the year.

To sum it up, pinnacle performance—as an individual, a team, and a Company— will result in top
rewards.

Pinnacle Performance: What It Means To You

Who’s Eligible

All non-exempt and exempt non-Officers and Officers of FNFG, employed as of October 1st
of the plan year, who do not earn commission are eligible for the Pinnacle Incentive Compensation
Plan.

	 
	The following employees are not eligible for the incentive compensation plan:

	 	•	 	participants under the Consumer Bank Incentive Compensation Plan
	 
	 	•	 	employees who earn commissions
	 
	 	•	 	participants in another producer or commissioned sales plan already established by the
Company for 2005
	 
	 	•	 	temporary employees

 

2

 

At a Glance...How the Plan Works

There are four main phases that lead to an incentive payout for achievement of performance goals.
The main phases span a complete calendar (performance) year, beginning with goal setting in Quarter
1 and payouts taking place in Quarter 1 of the following calendar year.

	 	•	 	Getting Involved

	 	•	 	Goal Setting
	 
	 	•	 	Making Successful Contributions to the Strategic Blueprint

	 	•	 	Incentive Pool Funding
	 
	 	•	 	Getting Recognized & Rewarded—Determining and Delivering Individual Incentive Awards

 

3

 

Determining and Communicating Measures, Goals, Objectives

Company goals, team (Business unit/dept) measures, and individual objectives are determined at the
beginning of the performance year. Each business unit sets up goals that ultimately link to the
Strategic Blueprint. Your manager will meet with you to share the Company’s and the team’s
performance measures and goals as well as to discuss and define your Individual measures and goals
for the year.

Individual performance measures and goals will be tied to the Strategic Blueprint and will be SMART
goals, Specific, Measurable, Action oriented, Realistic, and Time/budget controlled.

The table below shows how each performance category (its weighting, measures, and goals) relates to
the Company’s job roles to make up a target incentive opportunity. Important: the Company must
achieve threshold Net Income in order to fund the incentive pool.

Your Incentive Compensation Opportunity

Performance Categories and Performance Measures

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Performance	 	Weighting*	 	Performance	 	 
	Job Role	 	Category	 	(% of Target)	 	Measure	 	Goal
	Non-Exempt 

Employees 
(not covered under the 
Consumer Bank 
Incentive Plan)
	 	Company	 	 	10%		 	EPS

ROA	 	84¢ per share

1.17%
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	Team (Business

Unit/Department)	 	 	60% — 90	%	 	Service standards	 	Exceed Objective
	 
	 	 	 	 	 	 	 	Key Financial

Measures	 	For ex., end year at 90% of operating budget
	 
	 	 	 	 	 	 	 	Employee Development	 	Completing

Individual

Development Plans
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	Individual	 	 	0% — 30	%	 	Contribution to
success of
Strategic Blueprint
action plans	 	Achievement of Goal
	 
	 	 	 	 	 	 	 	Sales/Service Goals	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Exempt Employees
and Individual
Contributor Role
Officers without
Direct Reports
	 	Company	 	 	15%		 	EPS

ROA	 	84¢ per share

1.17%
	 
	 	Team (Business

Unit/Department)	 	 	45% — 65	%	 	Service standards	 	Exceed Objective
	 
	 	 	 	 	 	 	 	Key Financial

Measures	 	For ex., end year
at 90% of operating
budget
	 
	 	 	 	 	 	 	 	Retention of Key
Talent	 	Retain 100% of high
performing talent
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	Individual	 	 	20% — 40	%	 	Contribution to
success of
Strategic Blueprint
action plans	 	Achievement of Goal
	 
	 	 	 	 	 	 	 	Sales/Service Goals	 	 

	 	 	 
	*	 	Weighting is based on how much your role and responsibilities directly influence the performance category.
Weightings add up to 100% of your incentive opportunity. Actual weightings will be communicated during performance
planning.

 

4

 

Performance Categories and Performance Measures

Continued

	 	 	 	 	 	 	 	 	 
	 	 	Performance	 	Weighting*	 	Performance	 	 
	Job Role	 	Category	 	(% of Target)	 	Measure	 	Goal
	Non-commissioned Producers
	 	Company	 	10%	 	EPS	 	84¢ per share

	 
	 	 	 	 	 	ROA	 	1.17%
	 
	 	 	 	 	 	 	 	 
	 
	 	Team (Business	 	 	 	 	 	 
	 
	 	Unit/Department)	 	30%	 	Service standards	 	Exceed Objective
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Key Financial	 	For ex., end year
	 
	 	 	 	 	 	Measures	 	at 90% of operating
	 
	 	 	 	 	 	 	 	budget
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Employee Development	 	Completing
Individual
	 
	 	 	 	 	 	 	 	Development Plans
	 
	 	 	 	 	 	 	 	 
	 
	 	Individual	 	60%	 	Contribution to	 	Achievement of Goal
	 
	 	 	 	 	 	success of	 	 
	 
	 	 	 	 	 	Strategic Blueprint	 	 
	 
	 	 	 	 	 	action plans	 	 
	 
	 	 	 	 	 	 	 	 
	Officers and Managers
with Direct Reports
	 	Company	 	20%	 	EPS
ROA	 	84¢ per share
1.17%
	 
	 	 	 	 	 	 	 	 
	 
	 	Team (Business	 	 	 	 	 	 
	 
	 	Unit/Department)	 	65%	 	Service standards	 	Exceed Objective
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Key Financial	 	For ex., end year
	 
	 	 	 	 	 	Measures	 	at 90% of operating
	 
	 	 	 	 	 	 	 	budget
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Retention of Key Talent	 	Retain 100% of high
	 
	 	 	 	 	 	 	 	performing talent
	 
	 
	 	Individual	 	15%	 	Contribution to	 	Achievement of
	 
	 	 	 	 	 	success of	 	Goal
	 
	 	 	 	 	 	Strategic Blueprint	 	 
	 
	 	 	 	 	 	action plans	 	 
	 
	 	 	 	 	 	 	 	 
	Senior Officers (VP/SVP)
Reporting Directly to
Executive Steering
	 	Company	 	30%	 	EPS
ROA	 	84¢ per share
1.17%
	 
	 	 	 	 	 	 	 	 
	 
	 	Team (Business	 	 	 	 	 	 
	 
	 	Unit/Department)	 	50% — 60%	 	Service standards	 	Exceed Objective
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Key Financial	 	For ex., end year
	 
	 	 	 	 	 	Measures	 	at 90% of operating
	 
	 	 	 	 	 	 	 	budget
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Retention of Key	 	Retain 100% of high
	 
	 	 	 	 	 	Talent	 	performing talent
	 
	 
	 	Individual	 	10% — 20%	 	Contribution to	 	Achievement of Goal
	 
	 	 	 	 	 	success of	 	 
	 
	 	 	 	 	 	Strategic Blueprint	 	 
	 
	 	 	 	 	 	action plans	 	 

	 	 	 
	*	 	Weighting is based on how much your role and responsibilities directly influence the performance category. Weightings
add up to 100% of your incentive opportunity. Actual weightings will be communicated during performance planning.

Funding the Incentive Pool

Funding of the incentive pool is based on FNFG achieving pre-determined Net Income goals. If
threshold, or minimum, Net Income goals are not achieved, incentive payments are not funded and may
not be paid.

 

5

 

Determining and Delivering Your Individual Incentive Compensation Award

Following are a few examples of what a Pinnacle Incentive Compensation award can look like based on
varying levels of Company, team (business unit), and individual performance.

Branch Managers’ Note: Branch Managers will receive 80% of their incentive from the Consumer Bank
Incentive Plan and 20% from the Pinnacle Plan (assuming that incentive pools are funded and
performance goals are achieved).

At Target Performance

Let’s see how an incentive award is determined for a mid-level supervisor, assuming the Company,
the team (business unit) and the employee meet 100% of performance goals. This employee’s annual
base salary is $40,000, with a target incentive of 10% of salary. For example purposes, the target
incentive opportunity is $40,000 x 10% = $4,000.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Weighting	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Performance	 	(% of target	 	 	Performance	 	 	 	 	 	 	Attainment	 	 	Incentive	 
	Category	 	award)	 	 	Measures	 	 	Goal	 	 	of Goal	 	 	Payout	 
	Company
	 	 	20	%	 	Earnings per Share	 	84¢ per share	 	 	100	%	 	$	400	 
	Assumes FNFG meets
threshold Net
Income goal & pool
is funded

	 	 	 	 	 	Return on Assets	 	 	1.17%		 	 	100	%	 	$	400	 
	 
	Team
	 	 	65	%	 	Unit/Department	 	Achievement of goal	 	 	100	%	 	$	866	 
	(Business Unit/Department)
	 	 	 	 	 	Service Standards	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	Key Financial	 	Achievement of goal	 	 	100	%	 	$	867	 
	 
	 	 	 	 	 	Measures	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Retention of Key	 	Retention of top	 	 	100	%	 	$	867	 
	 
	 	 	 	 	 	Talent	 	talent	 	 	 	 	 	 	 	 
	 
	Individual
	 	 	15	%	 	Contribute to	 	Achievement of goal	 	 	100	%	 	$	300	 
	 
	 	 	 	 	 	Strategic Blueprint	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	actions	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Sales/Service Goals	 	Achievement of goal	 	 	100	%	 	$	300	 
	 	 	 
	Total Incentive Payout: 100% Goal Attainment, 100% of Target	 	$	4,000	 
	 	 	 

Note: For the purpose of this example, the category weight was divided equally among the number of
performance measures in the category. Managers have full discretion to allocate category weight
among performance measures as appropriate, with the exception of Company goals where the weight
must be divided equally between Growth in EPS and ROA.

 

6

 

Below Target Performance

Let’s see how an incentive award is determined for the same supervisor, assuming the Company meets
goals, but the team (business unit) and the employee do not meet target performance goals. This
employee’s annual base salary is $40,000, with a target incentive of 10% of salary. For example
purposes, the target incentive opportunity is $40,000 x 10% = $4,000.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Weighting	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Performance	 	(% of target	 	 	Performance	 	 	 	 	 	 	Attainment	 	 	Incentive	 
	Category	 	award)	 	 	Measures	 	 	Goal	 	 	of Goal	 	 	Payout	 
	Company
	 	 	20	%	 	Earnings per Share	 	84¢ per share	 	 	100	%	 	$	400	 
	Assumes FNFG meets
threshold Net
Income goal & pool
is funded

	 	 	 	 	 	Return on Assets	 	 	1.17%		 	 	100	%	 	$	400	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Team
	 	 	65	%	 	Unit/Department	 	Achievement of goal	 	 	95	%	 	$	823	 
	(Business
	 	 	 	 	 	Service Standards	 	 	 	 	 	 	 	 	 	 	 	 
	Unit/Department)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Key Financial	 	Achievement of goal	 	 	95	%	 	$	823	 
	 
	 	 	 	 	 	Measures	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Retention of Key	 	Retention of top	 	 	95	%	 	$	823	 
	 
	 	 	 	 	 	Talent	 	talent	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Individual
	 	 	15	%	 	Contribute to	 	Achievement of goal	 	 	90	%	 	$	270	 
	 
	 	 	 	 	 	Strategic Blueprint	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	actions	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Sales/Service Goals	 	Achievement of goal	 	 	90	%	 	$	270	 
	 	 	 
	Total Incentive Payout (95% of target)	 	$	3,809	 
	 	 	 

Please note that the projections above are displayed for the sole purpose of providing you with a
better understanding of the incentive compensation plan. Actual incentive awards are determined by
Company, team, and individual performance goals and results—and are subject to review and approval
by the Executive Officer of your business unit.

How and When Awards Are Paid

In general, incentive awards will be paid in a separate check in the mid-February time period to
allow for complete end-of-prior-year performance results to be finalized.

 

7

 

What Happens If....

Promotions

	 	•	 	If your promotion impacts your target award amount, your manager will inform you. You
will be eligible for a revised target award on a pro-rated basis, effective from the date
of your promotion.

Transfers

	 	•	 	If you transfer from a participating business unit to a non-participating business unit
or from a non-participating business unit to a participating business unit, you may be
eligible for a pro-rated incentive award. Any pro-rated incentive will be based on FNFG
achievement of Net Income, EPS and ROA goals, individual/team accomplishments and the
portion of the plan year worked at the participating business unit.

Demotions

	 	•	 	If your demotion impacts your target award amount, your manager will inform you. You
will be eligible for a revised target award on a pro-rated basis, effective from the date
of your demotion.

Leave FNFG

	 	•	 	Rehire— Individuals who terminate employment from the Company during the year and are
later rehired will have their incentive eligibility determined as of the date of their
rehire.

	 	•	 	Voluntary termination— If you terminate employment voluntarily before the incentive
payout date, you will not be eligible to receive an incentive award.

	 	•	 	Involuntary termination— If employment is terminated involuntarily, you will not be
eligible for an incentive award.

 

8

 

Defining Important Terms

Business Unit/Business Unit Pool

	 	•	 	FNFG’s business units are Consumer Banking, Commercial Banking, Financial Services
(Wealth and Risk Management) Finance, Technology & Operations, and Administration.

	 	•	 	The Company Pool is allocated to the Business Unit Pool based on eligible wages and
target awards for that team/Business Unit. The CEO may distribute more or less than the
Company-funded percentage to the team/Business Unit, based on its performance and
contribution to the organization’s results.

Earnings Per Share

	 	•	 	Earnings, also known as net income or net profit, are the money that is left over after
a Company pays all of its bills. Earnings Per Share is calculated by dividing the dollar
amount of the earnings the Company reports over the past 12 months by the number of shares
it currently has outstanding.

Company Pool

	 	•	 	The Company Pool, also known as the Pinnacle Incentive Plan Pool, begins to be funded
when FNFG achieves a threshold percentage of its Net Income goal. As FNFG improves the
percent of Net Income goal achieved, the Company Pool continues to increase. No incentive
payments will be made if FNFG does not achieve the minimum threshold of its Net Income
goal.

Net Income Goal

	 	•	 	FNFG’s Net Income is the Bank’s earnings after paying taxes and all other expenses.
FNFG must achieve a minimum threshold Net Income goal in order to fund incentive payments.

	 	 	 	 	 	 	 	 	 	 	 
	Performance Year

	 	•	 	The performance year for determining incentive awards is the calendar year.

Return on Assets

	 	•	 	Return on Assets (ROA) tells you “what the Company can do with what it’s got,” i.e.,
how many dollars of profits we can achieve for each dollar of assets we control. Return
on Assets is determined by dividing net earnings by total assets.

Strategic Blueprint

	 	•	 	Our Strategic Blueprint is the plan that will guide FNFG to the next performance level
by placing customers at the center of what we do. The Strategic Blueprint clearly defines
FNFG’s Vision, Values, and strategic business drivers, and articulates “what,” “how,” and
“when” FNFG will execute on each driver to achieve our stretch performance goals.

Target Award

	 	•	 	Your target award is a percentage of your wages. Your target percentage is based on
your job position and ability to influence Company performance results. Your manager will
communicate your target award during performance planning for the year, or, if you are
newly hired, your target award will be stated in your employment offer letter.

 

9

 

Defining Important Terms (continued)

Threshold

	 	•	 	Threshold means the minimum level of goal attainment.

Wages

	 	•	 	Wages include base salary, special situations pay, and your contributions to 401(k) and
Flex 125 deferrals during the calendar year. Wages do not include other benefit pay,
incentive pay under this Pinnacle Plan, The Consumer Bank Incentive Plan, EIP/MIP or
predecessors, other special incentive pay, and non-cash, or stock, compensation paid in
the calendar year.

Weighting

	 	•	 	Weighting-or how much of your total incentive is tied to a performance category-
depends on the extent to which you have direct accountability for First Niagara’s Company
Goals. If your accountability for Company performance is significant, a slightly greater
portion of your incentive will be tied to Company performance than someone in a job with
indirect accountability for Company performance. Total weightings in all performance
categories add up to 100% of your incentive opportunity.

 

10

 

An Overview of Our Pay & Performance System

Before your manager sits down with you to develop a performance plan or communicate pay or
incentives, FNFG has done a substantial amount of industry research and job analysis. It’s a key
part of our Strategic Blueprint: to offer a competitive pay program and effective performance
development process. Here’s an overview of how we constructed our pay and performance management
system to do just that.

 

11

 

About This Summary

This is a brief summary of the
Pinnacle Incentive Compensation
Plan effective January 1, 2005
for the 2005 calendar year. It is
not a guarantee of eligibility
for incentive compensation or the
receipt of an incentive
compensation award.

Nothing in this brochure or the
plan document gives FNFG the
right to require an employee to
remain employed, to interfere
with an employee’s right to
terminate employment, or gives an
employee the right to be employed
or remain employed by FNFG.

FNFG can modify, suspend,
reinstate, or terminate the
incentive compensation plan at
any time with or without notice
to employees. The actual terms
and conditions of FNFG’s
incentive compensation program
are contained in the
administrative documents, which
will govern in case of any
questions about eligibility,
opportunities, and rewards.

 

12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00154-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00154-of-00352.parquet"}]]