EMPLOYMENT AGREEMENT

                              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