EXECUTIVE AGREEMENT

EXECUTIVE AGREEMENT

This Executive Agreement (“Agreement”) is made and entered into as of the 8th day of June 2005 (“Effective Date”), between Financial Institutions, Inc. (“FII”), a bank holding company chartered under the laws of the State of New York, having its principal office at 220 Liberty Street, Warsaw, New York, 14569; and James T. Rudgers (the “Executive”), an individual residing at 3849 Grayshores Road, Geneseo, New York 14454.

RECITALS:

(a) The Executive is employed by Financial Institutions, Inc. as Chief of Community Banking; and

(b) FII and the Executive desire to set forth certain terms upon which the Executive is employed by Financial Institutions, Inc.

(c) NOW, THEREFORE, in consideration of the mutual promises and of the covenants contained in this Agreement, FII and the Executive agree as follows:

ARTICLE 1

Confidentiality

Section 1.1 Confidential Information. The Executive has become acquainted with and will have access to confidential or proprietary information and trade secrets related to the business of the FII, its subsidiaries and any affiliates or joint ventures (collectively with FII, the “Companies”), including but not limited to (i) trade secrets, business plans, software programs, operating plans, marketing plans, financial reports, operating data, budgets, pricing strategies and information, terms of agreements with customers and others, customer lists, reports, correspondence, tapes, disks, tangible property and specifications owned by or used in the Companies’ businesses; (ii) operating strengths and weaknesses of the Companies’ officers, directors, employees, agents, suppliers and customers, and/or (iii) information pertaining to future developments such as, but not limited to, software development or enhancement, future marketing plans or ideas, and plans or ideas for new services or products, (iv) all information which is learned or developed by the Executive in the course and performance of his duties under this Agreement, including without limitation, reports, information and data relating to the Companies’ acquisition strategies, and (v) other tangible and intangible property which is used in the business and operations of the Companies but not made publicly available ((i) through (v) are, collectively, “Confidential Information”).

Section 1.2 Treatment of Confidential Information; Confidentiality Agreements. The Executive will not, directly or indirectly, disclose, use or make known for the Executive’s or another’s benefit any Confidential Information of the Companies or use such Confidential Information in any way except in the best interests of the Companies in the performance of the Executive’s duties for Financial Institutions, Inc.. The Executive will take all necessary steps to safeguard the Companies’ Confidential Information. In addition, to the extent that Financial Institutions, Inc. has entered into a Confidentiality Agreement with any other person or entity, the Executive agrees to comply with the terms of such Confidentiality Agreement and to be subject to the restrictions and limitations imposed by such confidentiality agreements as if the Executive was a party thereto.

ARTICLE 2

Non-competition and Non-solicitation

Section 2.1 Non-competition. During the term of this Agreement and during any period for which Executive is entitled to receive compensation after the termination of this Agreement or pursuant to any other agreement, and for a period of six-months thereafter, Executive shall not engage, anywhere within New York State or in any area outside of New York State in which the Companies conduct business, whether directly or indirectly, as principal, owner, officer, director, agent, employee, consultant or partner, in the management of a bank holding company, commercial bank, savings bank, credit union or any other financial services provider that competes with the Companies or their products or programs (“Restricted Activities”), provided that the foregoing shall not restrict Executive from engaging in any Restricted Activities which FII directs Executive to undertake or which FII otherwise expressly authorizes. The foregoing shall not restrict Executive from owning less than 5% of the outstanding capital stock of any company which engages in Restricted Activities, provided that Executive is not otherwise involved with such company as an officer, director, agent, employee or consultant. The foregoing provisions of this Article shall not be held invalid because of the scope of the territory covered, the actions restricted thereby, or the period of time such covenant is operative.

Section 2.2 Non-solicitation. During the term of this Agreement and during the period for which Executive is entitled to receive compensation after the termination of this Agreement or pursuant to any other agreement, and for a period of six-months thereafter, Executive shall not, directly or indirectly, without the written consent of FII: (i) recruit or solicit for employment any employee of the Companies or encourage any such employee to leave their employment with the Companies, or (ii) solicit, induce or influence any customer, supplier, lessor or any other person or entity which has a business relationship with the Companies to discontinue or reduce the extent of such relationship with the Companies.

Section 2.3 Return of Amounts. In the event that the Executive breaches any of the provisions of this Article or of Article 1, the payments and benefits provided for by Article 3 shall cease immediately and FII shall have no further liability for such payments after the date of Executive’s breach. Further, failure to comply with the provisions of this Article or of Article 1 or commission of an act which is an instance of Cause prior to or after, any exercise, payment or delivery pursuant to an exercise of any stock option or vesting of any incentive equity award (“Award”) shall cause such exercise, payment or delivery to be rescinded. FII will notify the Executive in writing of any such rescission within two years after such exercise, payment or delivery. Within ten days after receiving such notice from FII, the Executive shall pay to FII the amount of any gain realized or payment received as a result of the rescinded exercise, payment or delivery pursuant to an Award. The Executive hereby agrees that the cancellation and rescission provisions of this Agreement are reasonable and agrees not to challenge the reasonableness of such provisions, even where forfeiture of options or equity awards granted is the penalty for violation. Further, Executive hereby agrees that the provisions of this Section amends and shall be controlling with respect to all Awards existing as of the date of this Agreement and any Awards granted subsequent to the date of this Agreement.

ARTICLE 3

Benefits Following a Change of Control

Section 3.1 Definitions.

(a) “Base Salary Amount” means the annual base salary payable by Financial Institutions, Inc. to the Executive and includable by the Executive in gross income for the most recent calendar year ending before the date on which the Change of Control occurred.