Document:

EX-10.2

WAIVER

In consideration for the benefits I will receive as a result of my employer’s participation in the
United States Department of the Treasury’s TARP Capital Purchase Program, I hereby voluntarily
waive any claim against the United States or my employer for any changes to my compensation or
benefits that are required to comply with the regulation issued by the Department of the Treasury
as published in the Federal Register on October 20, 2008.

I acknowledge that this regulation may require modification of the compensation, bonus, incentive
and other benefit plans, arrangements, policies and agreements (including so-called “golden
parachute” agreements) that I have with my employer or in which I participate as they relate to the
period the United States holds any equity or debt securities of my employer acquired through the
TARP Capital Purchase Program.

This waiver includes all claims I may have under the laws of the United States or any state related
to the requirements imposed by the aforementioned regulation, including without limitation a claim
for any compensation or other payments I would otherwise receive, any challenge to the process by
which this regulation was adopted and any tort or constitutional claim about the effect of these
regulations on my employment relationship.

	 	 	 	 	 
	 

	 	 
	 	 
	/s/ Peter G. Humphrey

	 	 
	 	 
	Peter G. Humphrey

	 	 
	 	 
	President and Chief Executive Officer

	 	 
	 	 
	Financial Institutions, Inc.

	 	 
	 	 

December 23, 2008

 

WAIVER

In consideration for the benefits I will receive as a result of my employer’s participation in the
United States Department of the Treasury’s TARP Capital Purchase Program, I hereby voluntarily
waive any claim against the United States or my employer for any changes to my compensation or
benefits that are required to comply with the regulation issued by the Department of the Treasury
as published in the Federal Register on October 20, 2008.

I acknowledge that this regulation may require modification of the compensation, bonus, incentive
and other benefit plans, arrangements, policies and agreements (including so-called “golden
parachute” agreements) that I have with my employer or in which I participate as they relate to the
period the United States holds any equity or debt securities of my employer acquired through the
TARP Capital Purchase Program.

This waiver includes all claims I may have under the laws of the United States or any state related
to the requirements imposed by the aforementioned regulation, including without limitation a claim
for any compensation or other payments I would otherwise receive, any challenge to the process by
which this regulation was adopted and any tort or constitutional claim about the effect of these
regulations on my employment relationship.

	 	 	 	 	 
	 

	 	 
	 	 
	/s/ Ronald A. Miller

	 	 
	 	 
	Ronald A. Miller

	 	 
	 	 
	Executive Vice President and Chief Financial Officer

	 	 
	 	 
	Financial Institutions, Inc.

	 	 
	 	 

December 23, 2008

 

WAIVER

In consideration for the benefits I will receive as a result of my employer’s participation in the
United States Department of the Treasury’s TARP Capital Purchase Program, I hereby voluntarily
waive any claim against the United States or my employer for any changes to my compensation or
benefits that are required to comply with the regulation issued by the Department of the Treasury
as published in the Federal Register on October 20, 2008.

I acknowledge that this regulation may require modification of the compensation, bonus, incentive
and other benefit plans, arrangements, policies and agreements (including so-called “golden
parachute” agreements) that I have with my employer or in which I participate as they relate to the
period the United States holds any equity or debt securities of my employer acquired through the
TARP Capital Purchase Program.

This waiver includes all claims I may have under the laws of the United States or any state related
to the requirements imposed by the aforementioned regulation, including without limitation a claim
for any compensation or other payments I would otherwise receive, any challenge to the process by
which this regulation was adopted and any tort or constitutional claim about the effect of these
regulations on my employment relationship.

	 	 	 	 	 
	 

	 	 
	 	 
	/s/ James T. Rudgers

	 	 
	 	 
	James T. Rudgers

	 	 
	 	 
	Executive Vice President and Chief of Community Banking

	 	 
	 	 
	Financial Institutions, Inc.

	 	 
	 	 

December 23, 2008

 

 

WAIVER

In consideration for the benefits I will receive as a result of my employer’s participation in the
United States Department of the Treasury’s TARP Capital Purchase Program, I hereby voluntarily
waive any claim against the United States or my employer for any changes to my compensation or
benefits that are required to comply with the regulation issued by the Department of the Treasury
as published in the Federal Register on October 20, 2008.

I acknowledge that this regulation may require modification of the compensation, bonus, incentive
and other benefit plans, arrangements, policies and agreements (including so-called “golden
parachute” agreements) that I have with my employer or in which I participate as they relate to the
period the United States holds any equity or debt securities of my employer acquired through the
TARP Capital Purchase Program.

This waiver includes all claims I may have under the laws of the United States or any state related
to the requirements imposed by the aforementioned regulation, including without limitation a claim
for any compensation or other payments I would otherwise receive, any challenge to the process by
which this regulation was adopted and any tort or constitutional claim about the effect of these
regulations on my employment relationship.

	 	 	 	 	 
	 

	 	 
	 	 
	/s/ George D. Hagi

	 	 
	 	 
	George D. Hagi

	 	 
	 	 
	Executive Vice President and Chief Risk Officer

	 	 
	 	 
	Financial Institutions, Inc.

	 	 
	 	 

December 23, 2008

 

 

WAIVER

In consideration for the benefits I will receive as a result of my employer’s participation in the
United States Department of the Treasury’s TARP Capital Purchase Program, I hereby voluntarily
waive any claim against the United States or my employer for any changes to my compensation or
benefits that are required to comply with the regulation issued by the Department of the Treasury
as published in the Federal Register on October 20, 2008.

I acknowledge that this regulation may require modification of the compensation, bonus, incentive
and other benefit plans, arrangements, policies and agreements (including so-called “golden
parachute” agreements) that I have with my employer or in which I participate as they relate to the
period the United States holds any equity or debt securities of my employer acquired through the
TARP Capital Purchase Program.

This waiver includes all claims I may have under the laws of the United States or any state related
to the requirements imposed by the aforementioned regulation, including without limitation a claim
for any compensation or other payments I would otherwise receive, any challenge to the process by
which this regulation was adopted and any tort or constitutional claim about the effect of these
regulations on my employment relationship.

	 	 	 	 	 
	 

	 	 
	 	 
	/s/ Kevin B. Klotzbach

	 	 
	 	 
	Kevin B. Klotzbach

	 	 
	 	 
	Senior Vice President and Treasurer

	 	 
	 	 
	Financial Institutions, Inc.

	 	 
	 	 

December 23, 2008EX-10.3

December 23, 2008

Mr. Peter G. Humphrey

President and Chief Executive Officer

Financial Institutions, Inc.

220 Liberty Street

P.O. Box 227

Warsaw, New York 14569

Dear Mr. Humphrey,

Financial Institutions, Inc. (the “Company”) anticipates entering into a Securities Purchase
Agreement (the “Participation Agreement”) with the United States Department of Treasury
(“Treasury”) that provides for the Company’s participation in the Treasury’s TARP Capital Purchase
Program (the “CPP”). If the Company does not participate or ceases at any time to participate in
the CPP, this letter shall be of no further force and effect.

For the Company to participate in the CPP and as a condition to the closing of the investment
contemplated by the Participation Agreement, the Company is required to establish specified
standards for incentive compensation to its senior executive officers and to make changes to its
compensation arrangements. To comply with these requirements, and in consideration of the benefits
that you will receive as a result of the Company’s participation in the CPP, you agree as follows:

	 	1)	 	No Golden Parachute Payments. The Company is prohibiting any golden
parachute payment to you during any “applicable tax year.” An “applicable tax year”
is any period during which (a) you are a senior executive officer, and (b) Treasury
holds an equity or debt position in the Company under the CPP.

	 	2)	 	Recovery of Bonus and Incentive Compensation. Any bonus and incentive
compensation paid to you during a CPP Covered Period is subject to recovery or
“clawback” by the Company if the payments were based on materially inaccurate
financial statements or any other materially inaccurate performance metric criteria.

	 	3)	 	Compensation Program Amendments. Each of the Company’s compensation,
bonus, incentive and other benefit plans, arrangements and agreements (including
golden parachute, severance and employment agreements) either currently or
hereinafter in effect and including all amendments thereto (collectively, “Benefit
Plans”) with respect to you are hereby amended to the extent necessary to give
effect to provisions (l) and (2).

	 	4)	 	Definitions and Interpretation. This letter shall be interpreted as
follows:

	 	•	 	The term “Company” includes any entities treated as a single employer with
the Company under 31 C.F.R. § 30.1(b) (as in effect on the Closing Date). You
are also delivering a waiver pursuant to the Participation Agreement, and, as
between the Company and you, the term “employer” in that waiver will be deemed
to mean the Company as used in this letter.

	 	•	 	The term “applicable tax year” shall be limited by, and interpreted in a
manner consistent with, 31 C.F.R. § 30.11, (as in effect on the Closing Date).

	 	•	 	“EESA” means the Emergency Economic Stabilization Act of 2008 as implemented
by guidance or regulation issued by the Department of the Treasury and as
published in the Federal Register on October 20, 2008.

	 	•	 	“Golden parachute payment” is used with same meaning as in Section
111(b)(2)(C) of EESA.

	 	•	 	“Senior executive officer” means the Company’s “senior executive officers” as
defined in subsection 111(b)(3) of EESA.

	 	•	 	Provisions (1) and (2) of this letter are intended to, and will be
interpreted, administered and construed to, comply with Section 111 of EESA and
the guidance thereunder (and, to the maximum extent consistent with the
preceding, to permit operation of the Benefit Plans in accordance with their
terms before giving effect to this letter)

	 	5)	 	Miscellaneous. To the extent not subject to federal law, this letter
will be governed by and construed in accordance with the laws of New York. This
letter may be executed in two or more counterparts, each of which will be deemed to
be an original. A signature transmitted by facsimile will be deemed an original
signature.

In addition, the Company is required to review its Benefit Plans to ensure that they do not
encourage senior executive officers to take unnecessary and excessive risks that threaten the value
of the Company. To the extent any such review requires revisions to any Benefit Plan with respect
to you, you and the Company agree to negotiate such changes promptly and in good faith.

In addition to the foregoing and in consideration for the benefits you will receive as a
result of Company’s participation in the CPP, you agree to voluntarily waive any claim against the
United States or the Company for any changes to your compensation or benefits that are required to
comply with EESA. This waiver includes all claims you may have under the laws of the United States
or any state related to the requirements imposed by EESA, including without limitation a claim for
any compensation or other payments you would otherwise receive, any challenge to the process by
which this regulation was adopted and any tort or constitutional claim about the effect of these
regulations on your employment relationship.

1

Please indicate your agreement by signing and returning this letter agreement.

Yours sincerely,

	 
	/s/ Ronald A. Miller
	Ronald A. Miller

	Executive Vice President and

	Chief Financial Officer,

	Financial Institutions, Inc.

Intending to be legally bound, I agree with

and accept the foregoing terms on the date set

forth below.

	 
	/s/ Peter G. Humphrey
	Peter G. Humphrey

	Date: December 23, 2008

2

December 23, 2008

Mr. Ronald A. Miller

Executive Vice President and

Chief Financial Officer

Financial Institutions, Inc.

220 Liberty Street

P.O. Box 227

Warsaw, New York 14569

Dear Mr. Miller,

Financial Institutions, Inc. (the “Company”) anticipates entering into a Securities Purchase
Agreement (the “Participation Agreement”) with the United States Department of Treasury
(“Treasury”) that provides for the Company’s participation in the Treasury’s TARP Capital Purchase
Program (the “CPP”). If the Company does not participate or ceases at any time to participate in
the CPP, this letter shall be of no further force and effect.

For the Company to participate in the CPP and as a condition to the closing of the investment
contemplated by the Participation Agreement, the Company is required to establish specified
standards for incentive compensation to its senior executive officers and to make changes to its
compensation arrangements. To comply with these requirements, and in consideration of the benefits
that you will receive as a result of the Company’s participation in the CPP, you agree as follows:

	 	1)	 	No Golden Parachute Payments. The Company is prohibiting any golden
parachute payment to you during any “applicable tax year.” An “applicable tax year”
is any period during which (a) you are a senior executive officer, and (b) Treasury
holds an equity or debt position in the Company under the CPP.

	 	2)	 	Recovery of Bonus and Incentive Compensation. Any bonus and incentive
compensation paid to you during a CPP Covered Period is subject to recovery or
“clawback” by the Company if the payments were based on materially inaccurate
financial statements or any other materially inaccurate performance metric criteria.

	 	3)	 	Compensation Program Amendments. Each of the Company’s compensation,
bonus, incentive and other benefit plans, arrangements and agreements (including
golden parachute, severance and employment agreements) either currently or
hereinafter in effect and including all amendments thereto (collectively, “Benefit
Plans”) with respect to you are hereby amended to the extent necessary to give
effect to provisions (l) and (2).

	 	6)	 	Definitions and Interpretation. This letter shall be interpreted as
follows:

	 	•	 	The term “Company” includes any entities treated as a single employer with
the Company under 31 C.F.R. § 30.1(b) (as in effect on the Closing Date). You
are also delivering a waiver pursuant to the Participation Agreement, and, as
between the Company and you, the term “employer” in that waiver will be deemed
to mean the Company as used in this letter.

	 	•	 	The term “applicable tax year” shall be limited by, and interpreted in a
manner consistent with, 31 C.F.R. § 30.11, (as in effect on the Closing Date).

	 	•	 	“EESA” means the Emergency Economic Stabilization Act of 2008 as implemented
by guidance or regulation issued by the Department of the Treasury and as
published in the Federal Register on October 20, 2008.

	 	•	 	“Golden parachute payment” is used with same meaning as in Section
111(b)(2)(C) of EESA.

	 	•	 	“Senior executive officer” means the Company’s “senior executive officers” as
defined in subsection 111(b)(3) of EESA.

	 	•	 	Provisions (1) and (2) of this letter are intended to, and will be
interpreted, administered and construed to, comply with Section 111 of EESA and
the guidance thereunder (and, to the maximum extent consistent with the
preceding, to permit operation of the Benefit Plans in accordance with their
terms before giving effect to this letter)

	 	7)	 	Miscellaneous. To the extent not subject to federal law, this letter
will be governed by and construed in accordance with the laws of New York. This
letter may be executed in two or more counterparts, each of which will be deemed to
be an original. A signature transmitted by facsimile will be deemed an original
signature.

In addition, the Company is required to review its Benefit Plans to ensure that they do not
encourage senior executive officers to take unnecessary and excessive risks that threaten the value
of the Company. To the extent any such review requires revisions to any Benefit Plan with respect
to you, you and the Company agree to negotiate such changes promptly and in good faith.

In addition to the foregoing and in consideration for the benefits you will receive as a
result of Company’s participation in the CPP, you agree to voluntarily waive any claim against the
United States or the Company for any changes to your compensation or benefits that are required to
comply with EESA. This waiver includes all claims you may have under the laws of the United States
or any state related to the requirements imposed by EESA, including without limitation a claim for
any compensation or other payments you would otherwise receive, any challenge to the process by
which this regulation was adopted and any tort or constitutional claim about the effect of these
regulations on your employment relationship.

3

Please indicate your agreement by signing and returning this letter agreement.

Yours sincerely,

	 
	/s/ Peter G. Humphrey
	Peter G. Humphrey

	President and Chief Executive Officer

	Financial Institutions, Inc.

Intending to be legally bound, I agree with

and accept the foregoing terms on the date set

forth below.

	 
	/s/ Ronald A. Miller
	Ronald A. Miller

	Date: December 23, 2008

4

December 23, 2008

Mr. James T. Rudgers

Executive Vice President and

Chief of Community Banking

Financial Institutions, Inc.

220 Liberty Street

P.O. Box 227

Warsaw, New York 14569

Dear Mr. Rudgers,

Financial Institutions, Inc. (the “Company”) anticipates entering into a Securities Purchase
Agreement (the “Participation Agreement”) with the United States Department of Treasury
(“Treasury”) that provides for the Company’s participation in the Treasury’s TARP Capital Purchase
Program (the “CPP”). If the Company does not participate or ceases at any time to participate in
the CPP, this letter shall be of no further force and effect.

For the Company to participate in the CPP and as a condition to the closing of the investment
contemplated by the Participation Agreement, the Company is required to establish specified
standards for incentive compensation to its senior executive officers and to make changes to its
compensation arrangements. To comply with these requirements, and in consideration of the benefits
that you will receive as a result of the Company’s participation in the CPP, you agree as follows:

	 	1)	 	No Golden Parachute Payments. The Company is prohibiting any golden
parachute payment to you during any “applicable tax year.” An “applicable tax year”
is any period during which (a) you are a senior executive officer, and (b) Treasury
holds an equity or debt position in the Company under the CPP.

	 	2)	 	Recovery of Bonus and Incentive Compensation. Any bonus and incentive
compensation paid to you during a CPP Covered Period is subject to recovery or
“clawback” by the Company if the payments were based on materially inaccurate
financial statements or any other materially inaccurate performance metric criteria.

	 	3)	 	Compensation Program Amendments. Each of the Company’s compensation,
bonus, incentive and other benefit plans, arrangements and agreements (including
golden parachute, severance and employment agreements) either currently or
hereinafter in effect and including all amendments thereto (collectively, “Benefit
Plans”) with respect to you are hereby amended to the extent necessary to give
effect to provisions (l) and (2).

	 	8)	 	Definitions and Interpretation. This letter shall be interpreted as
follows:

	 	•	 	The term “Company” includes any entities treated as a single employer with
the Company under 31 C.F.R. § 30.1(b) (as in effect on the Closing Date). You
are also delivering a waiver pursuant to the Participation Agreement, and, as
between the Company and you, the term “employer” in that waiver will be deemed
to mean the Company as used in this letter.

	 	•	 	The term “applicable tax year” shall be limited by, and interpreted in a
manner consistent with, 31 C.F.R. § 30.11, (as in effect on the Closing Date).

	 	•	 	“EESA” means the Emergency Economic Stabilization Act of 2008 as implemented
by guidance or regulation issued by the Department of the Treasury and as
published in the Federal Register on October 20, 2008.

	 	•	 	“Golden parachute payment” is used with same meaning as in Section
111(b)(2)(C) of EESA.

	 	•	 	“Senior executive officer” means the Company’s “senior executive officers” as
defined in subsection 111(b)(3) of EESA.

	 	•	 	Provisions (1) and (2) of this letter are intended to, and will be
interpreted, administered and construed to, comply with Section 111 of EESA and
the guidance thereunder (and, to the maximum extent consistent with the
preceding, to permit operation of the Benefit Plans in accordance with their
terms before giving effect to this letter)

	 	9)	 	Miscellaneous. To the extent not subject to federal law, this letter
will be governed by and construed in accordance with the laws of New York. This
letter may be executed in two or more counterparts, each of which will be deemed to
be an original. A signature transmitted by facsimile will be deemed an original
signature.

In addition, the Company is required to review its Benefit Plans to ensure that they do not
encourage senior executive officers to take unnecessary and excessive risks that threaten the value
of the Company. To the extent any such review requires revisions to any Benefit Plan with respect
to you, you and the Company agree to negotiate such changes promptly and in good faith.

In addition to the foregoing and in consideration for the benefits you will receive as a
result of Company’s participation in the CPP, you agree to voluntarily waive any claim against the
United States or the Company for any changes to your compensation or benefits that are required to
comply with EESA. This waiver includes all claims you may have under the laws of the United States
or any state related to the requirements imposed by EESA, including without limitation a claim for
any compensation or other payments you would otherwise receive, any challenge to the process by
which this regulation was adopted and any tort or constitutional claim about the effect of these
regulations on your employment relationship.

5

Please indicate your agreement by signing and returning this letter agreement.

Yours sincerely,

	 
	/s/ Peter G. Humphrey
	Peter G. Humphrey

	President and Chief Executive Officer

	Financial Institutions, Inc.

Intending to be legally bound, I agree with

and accept the foregoing terms on the date set

forth below.

	 
	/s/ James T. Rudgers
	James T. Rudgers

	Date: December 23, 2008

6

December 23, 2008

Mr. George D. Hagi

Executive Vice President and

Chief Risk Officer

Financial Institutions, Inc.

220 Liberty Street

P.O. Box 227

Warsaw, New York 14569

Dear Mr. Hagi,

Financial Institutions, Inc. (the “Company”) anticipates entering into a Securities Purchase
Agreement (the “Participation Agreement”) with the United States Department of Treasury
(“Treasury”) that provides for the Company’s participation in the Treasury’s TARP Capital Purchase
Program (the “CPP”). If the Company does not participate or ceases at any time to participate in
the CPP, this letter shall be of no further force and effect.

For the Company to participate in the CPP and as a condition to the closing of the investment
contemplated by the Participation Agreement, the Company is required to establish specified
standards for incentive compensation to its senior executive officers and to make changes to its
compensation arrangements. To comply with these requirements, and in consideration of the benefits
that you will receive as a result of the Company’s participation in the CPP, you agree as follows:

	 	1)	 	No Golden Parachute Payments. The Company is prohibiting any golden
parachute payment to you during any “applicable tax year.” An “applicable tax year”
is any period during which (a) you are a senior executive officer, and (b) Treasury
holds an equity or debt position in the Company under the CPP.

	 	2)	 	Recovery of Bonus and Incentive Compensation. Any bonus and incentive
compensation paid to you during a CPP Covered Period is subject to recovery or
“clawback” by the Company if the payments were based on materially inaccurate
financial statements or any other materially inaccurate performance metric criteria.

	 	3)	 	Compensation Program Amendments. Each of the Company’s compensation,
bonus, incentive and other benefit plans, arrangements and agreements (including
golden parachute, severance and employment agreements) either currently or
hereinafter in effect and including all amendments thereto (collectively, “Benefit
Plans”) with respect to you are hereby amended to the extent necessary to give
effect to provisions (l) and (2).

	 	10)	 	Definitions and Interpretation. This letter shall be interpreted as
follows:

	 	•	 	The term “Company” includes any entities treated as a single employer with
the Company under 31 C.F.R. § 30.1(b) (as in effect on the Closing Date). You
are also delivering a waiver pursuant to the Participation Agreement, and, as
between the Company and you, the term “employer” in that waiver will be deemed
to mean the Company as used in this letter.

	 	•	 	The term “applicable tax year” shall be limited by, and interpreted in a
manner consistent with, 31 C.F.R. § 30.11, (as in effect on the Closing Date).

	 	•	 	“EESA” means the Emergency Economic Stabilization Act of 2008 as implemented
by guidance or regulation issued by the Department of the Treasury and as
published in the Federal Register on October 20, 2008.

	 	•	 	“Golden parachute payment” is used with same meaning as in Section
111(b)(2)(C) of EESA.

	 	•	 	“Senior executive officer” means the Company’s “senior executive officers” as
defined in subsection 111(b)(3) of EESA.

	 	•	 	Provisions (1) and (2) of this letter are intended to, and will be
interpreted, administered and construed to, comply with Section 111 of EESA and
the guidance thereunder (and, to the maximum extent consistent with the
preceding, to permit operation of the Benefit Plans in accordance with their
terms before giving effect to this letter)

	 	11)	 	Miscellaneous. To the extent not subject to federal law, this letter
will be governed by and construed in accordance with the laws of New York. This
letter may be executed in two or more counterparts, each of which will be deemed to
be an original. A signature transmitted by facsimile will be deemed an original
signature.

In addition, the Company is required to review its Benefit Plans to ensure that they do not
encourage senior executive officers to take unnecessary and excessive risks that threaten the value
of the Company. To the extent any such review requires revisions to any Benefit Plan with respect
to you, you and the Company agree to negotiate such changes promptly and in good faith.

In addition to the foregoing and in consideration for the benefits you will receive as a
result of Company’s participation in the CPP, you agree to voluntarily waive any claim against the
United States or the Company for any changes to your compensation or benefits that are required to
comply with EESA. This waiver includes all claims you may have under the laws of the United States
or any state related to the requirements imposed by EESA, including without limitation a claim for
any compensation or other payments you would otherwise receive, any challenge to the process by
which this regulation was adopted and any tort or constitutional claim about the effect of these
regulations on your employment relationship.

7

Please indicate your agreement by signing and returning this letter agreement.

Yours sincerely,

	 
	/s/ Peter G. Humphrey
	Peter G. Humphrey

	President and Chief Executive Officer

	Financial Institutions, Inc.

Intending to be legally bound, I agree with

and accept the foregoing terms on the date set

forth below.

	 
	/s/ George D. Hagi
	George D. Hagi

	Date: December 23, 2008

8

December 23, 2008

Mr. Kevin B. Klotzbach

Senior Vice President and Treasurer

Financial Institutions, Inc.

220 Liberty Street

P.O. Box 227

Warsaw, New York 14569

Dear Mr. Klotzbach,

Financial Institutions, Inc. (the “Company”) anticipates entering into a Securities Purchase
Agreement (the “Participation Agreement”) with the United States Department of Treasury
(“Treasury”) that provides for the Company’s participation in the Treasury’s TARP Capital Purchase
Program (the “CPP”). If the Company does not participate or ceases at any time to participate in
the CPP, this letter shall be of no further force and effect.

For the Company to participate in the CPP and as a condition to the closing of the investment
contemplated by the Participation Agreement, the Company is required to establish specified
standards for incentive compensation to its senior executive officers and to make changes to its
compensation arrangements. To comply with these requirements, and in consideration of the benefits
that you will receive as a result of the Company’s participation in the CPP, you agree as follows:

	 	1)	 	No Golden Parachute Payments. The Company is prohibiting any golden
parachute payment to you during any “applicable tax year.” An “applicable tax year”
is any period during which (a) you are a senior executive officer, and (b) Treasury
holds an equity or debt position in the Company under the CPP.

	 	2)	 	Recovery of Bonus and Incentive Compensation. Any bonus and incentive
compensation paid to you during a CPP Covered Period is subject to recovery or
“clawback” by the Company if the payments were based on materially inaccurate
financial statements or any other materially inaccurate performance metric criteria.

	 	3)	 	Compensation Program Amendments. Each of the Company’s compensation,
bonus, incentive and other benefit plans, arrangements and agreements (including
golden parachute, severance and employment agreements) either currently or
hereinafter in effect and including all amendments thereto (collectively, “Benefit
Plans”) with respect to you are hereby amended to the extent necessary to give
effect to provisions (l) and (2).

	 	12)	 	Definitions and Interpretation. This letter shall be interpreted as
follows:

	 	•	 	The term “Company” includes any entities treated as a single employer with
the Company under 31 C.F.R. § 30.1(b) (as in effect on the Closing Date). You
are also delivering a waiver pursuant to the Participation Agreement, and, as
between the Company and you, the term “employer” in that waiver will be deemed
to mean the Company as used in this letter.

	 	•	 	The term “applicable tax year” shall be limited by, and interpreted in a
manner consistent with, 31 C.F.R. § 30.11, (as in effect on the Closing Date).

	 	•	 	“EESA” means the Emergency Economic Stabilization Act of 2008 as implemented
by guidance or regulation issued by the Department of the Treasury and as
published in the Federal Register on October 20, 2008.

	 	•	 	“Golden parachute payment” is used with same meaning as in Section
111(b)(2)(C) of EESA.

	 	•	 	“Senior executive officer” means the Company’s “senior executive officers” as
defined in subsection 111(b)(3) of EESA.

	 	•	 	Provisions (1) and (2) of this letter are intended to, and will be
interpreted, administered and construed to, comply with Section 111 of EESA and
the guidance thereunder (and, to the maximum extent consistent with the
preceding, to permit operation of the Benefit Plans in accordance with their
terms before giving effect to this letter)

	 	13)	 	Miscellaneous. To the extent not subject to federal law, this letter
will be governed by and construed in accordance with the laws of New York. This
letter may be executed in two or more counterparts, each of which will be deemed to
be an original. A signature transmitted by facsimile will be deemed an original
signature.

In addition, the Company is required to review its Benefit Plans to ensure that they do not
encourage senior executive officers to take unnecessary and excessive risks that threaten the value
of the Company. To the extent any such review requires revisions to any Benefit Plan with respect
to you, you and the Company agree to negotiate such changes promptly and in good faith.

In addition to the foregoing and in consideration for the benefits you will receive as a
result of Company’s participation in the CPP, you agree to voluntarily waive any claim against the
United States or the Company for any changes to your compensation or benefits that are required to
comply with EESA. This waiver includes all claims you may have under the laws of the United States
or any state related to the requirements imposed by EESA, including without limitation a claim for
any compensation or other payments you would otherwise receive, any challenge to the process by
which this regulation was adopted and any tort or constitutional claim about the effect of these
regulations on your employment relationship.

9

Please indicate your agreement by signing and returning this letter agreement.

Yours sincerely,

	 
	/s/ Peter G. Humphrey
	Peter G. Humphrey

	President and Chief Executive Officer

	Financial Institutions, Inc.

Intending to be legally bound, I agree with

and accept the foregoing terms on the date set

forth below.

	 
	/s/ Kevin B. Klotzbach
	Kevin B. Klotzbach

	Date: December 23, 2008

10

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