Form of Employment Agreement For Cfo

Exhibit 10.3

EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is made effective as of ___________________ (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 James D. Lapsley ("Executive").

WHEREAS , Executive is serving as Chief Financial Officer of the Bank and the Bank wishes to assure itself of the services of Executive as Chief Financial Officer of the Bank through June 30, 2008; 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.

Through June 30, 2008, Executive shall serve as Chief Financial Officer of the Bank. Executive shall be responsible for managing the overall financial affairs of the Bank and serving as the Bank92s principal financial officer . Executive shall directly report to the Chief Executive Officer.

2. TERM AND DUTIES.

(a) Term . The term of Executive92s employment under this Agreement shall commence as of the Effective Date and shall expire on June 30, 2008.

(b) Termination of Agreement . Notwithstanding anything contained in this Agreement to the contrary, either Executive or the Bank may terminate Executive92s 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 Executive92s employment 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 Officer92s judgment,




will not present any conflict of interest with the Bank, or materially affect the performance of Executive92s 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 Executive92s 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 $___________ 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) Executive92s 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 Executive92s prior written consent, make any changes in such plans, arrangements or perquisites that would adversely affect Executive92s 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.

(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 Bank92s usual practices), as well as sick leave, holidays and other paid absences in accordance with the Bank92s policies and procedures for senior executives. Any unused paid time off during an annual period shall be treated in accordance with the Bank92s 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

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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 Termination9292 shall mean and include any one or more of the following:

(i) the termination by the Bank of Executive92 s full-time employment hereunder for any reason other than a "Change in Control," as defined in Section 5, a termination for "Cause," as defined in Section 8, a termination upon "Retirement," as defined in Section 7, or a termination for disability, as set forth in Section 6; and

(ii) Executive92s resignation from the Bank92s 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 Executive92s function, duties, or responsibilities, which change would cause Executive92s 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 Executive92s principal place of employment to a location that is more than 50 miles from the location of the Bank92s 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 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

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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. No payments or benefits shall be due to Executive under this Agreement upon the termination of Executive92s 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 herein), no payment shall be made to Executive prior to the first day of the seventh month following the Event of Termination. "Specified Employee" shall be interpreted to comply with Section 409A of the Internal Revenue Code and shall mean a key employee within the meaning of Section 416(i) of the Internal Revenue Code (without regard to paragraph 5 thereof), but an individual shall be a "Specified Employee" only if the Bank is a publicly traded institution or the subsidiary of a publicly traded holding company.

(c) Upon the occurrence of an Event of Termination, the Bank shall provide at the Bank92s expense, life insurance coverage and non-taxable medical and dental coverage substantially comparable, as reasonably or customarily available, 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 Section 409A of the Internal Revenue Code, 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:

(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

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(ii) a change in control of the Bank within the meaning of the Home Owners92 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 Bank92s 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 Bank92s 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 Bank92s holding company, or a plan of reorganization, merger, consolidation, or similar transaction occurs in which ...