AMENDMENT NUMBER ONE

TO THE

FINANCIAL INSTITUTIONS, INC.

1999 MANAGEMENT STOCK INCENTIVE PLAN

This Amendment Number One to the Financial Institutions, Inc. 1999 Management Stock Incentive Plan (the “Plan”) is adopted pursuant to Section 15 of the Plan by the Compensation Committee of Financial Institutions, Inc. (the “Company”), acting in its capacity as the Committee under the Plan. Capitalized terms used herein which are not otherwise defined shall have the meanings ascribed to them in the Plan.

Subsection 7(e) of the Plan shall be deleted in its entirety and replaced with the following:

Except for the restrictions set forth in this Plan and those specified by the Committee in any restricted stock agreement, a holder of restricted stock shall possess all the rights of a holder of the Company’s Common Stock (including voting and dividend rights); provided, however, that prior to vesting the certificates representing such shares of restricted stock shall be held by the Company for the benefit of the participant and the participant shall deliver to the Company a stock power executed in blank covering such shares. As the shares vest, certificates representing such shares shall be released to the participant. The Committee shall have the discretion to determine at the time of the restricted stock grant (as memorialized in the restricted stock agreement with the participant) whether dividends payable on the participant’s unvested shares shall be (i) paid to the participant or (ii) reinvested in additional shares of restricted stock. If dividends on unvested shares are reinvested in additional shares of restricted stock, all dividends payable on the unvested shares shall be reinvested in the Company’s Common Stock, treated as restricted stock until the underlying restricted shares vest, and, upon such vesting, released to the participant. If the underlying shares do not vest, all shares purchased with the reinvested dividends shall be forfeited.

In witness whereof, Financial Institutions, Inc. has caused this instrument to be executed as of July 26, 2006.

FINANCIAL INSTITUTIONS, INC.

Name: Ronald A. Miller

Title: Corporate Secretary

NON-QUALIFIED STOCK OPTION AGREEMENT
Pursuant To The
FINANCIAL INSTITUTIONS, INC.
MANAGEMENT STOCK INCENTIVE PLAN

Number of Shares:      

Exercise Price
per Share:      

This NON-QUALIFIED STOCK OPTION AGREEMENT (the “Agreement”) is made as of       , 2006 between Financial Institutions, Inc. (the “Company”), and the above-named individual, an employee of the Company or one of its subsidiaries (the “Employee”), to record the granting of a non-qualified stock option pursuant to the Company’s Management Stock Incentive Plan (the “Plan”).

1.

Grant of Option . In accordance with the Plan, the Company hereby grants to the Employee, subject to the terms and conditions of the Plan and this Agreement, the option to purchase from the Company an aggregate of  shares of Common Stock ($.01 par value) of the Company at the exercise price of       per share, such option to be exercised as hereinafter provided. Said exercise price is equal to the fair market value of the Company’s Common Stock on the date of grant of this option. The parties intend this option to be treated as a non-qualified stock option under the terms of the Internal Revenue Code.

2.

Expiration Date . This option shall expire on       ,20       (the “Expiration Date”). This date shall not be more than 10 years from the date of grant.

3.

Exercise of Option . No shares may be purchased under this option until the first anniversary of the date of grant. This option shall become exercisable with respect to 25% of the shares of Common Stock subject hereto on the first anniversary of the date of grant and with respect to an additional 25% of shares on each of the second, third, and fourth anniversaries of the date of grant, provided the Employee is still employed by the Company or any subsidiary corporation of the Company or, if such employment is terminated, subject to the terms and conditions stated under Section 5 hereof.

This option may be exercised in whole or in part at any time with respect to those shares that have become exercisable, provided that this option may not be exercised after the Expiration Date.

In the event of a change in control as defined in the Plan, this option shall become exercisable in full immediately unless a resolution of the Company’s Board of Directors prior to the change in control provides otherwise.

Any exercise of this option shall be made in a writing duly executed and delivered to the Company specifying the number of shares as to which the option is being exercised in the form of the Form for Exercise of Option attached hereto. Schedule I of this Agreement shall be made available to the Company at the time of exercise for notation of any partial exercise.

4.

Payment of Exercise Price . On the date of any exercise of this option, the exercise price of the shares as to which this option is being exercised shall be due and payable in full. Payment shall be made in cash or by check or by delivery of shares of the Common Stock of the Company registered in the name of the optionee, duly assigned to the Company with the assignment guaranteed by a bank, trust company or NASDAQ or NYSE member firm, or by a combination of the foregoing. Any such shares so delivered shall be deemed to have a value per share equal to the fair market value of the shares on such date.

The Employee shall also remit to the Company the amount needed to satisfy any federal, state or local withholding taxes that may arise or be applicable as the result of an exercise under this option. No certificate will be issued to the Employee with respect to the exercised shares until such withholding obligations have been satisfied to the complete satisfaction of the Company.

5.

Exercise Upon Death or Termination of Employment .

(1) If the employment of the Employee terminates for any reason other than retirement as defined in , disability or death, options, which are not yet vested at termination, are automatically forfeited as of the date of termination of employment. Vested options may be exercised at any time prior to the earlier of the Expiration Date or the expiration of 90 days from the date of termination.

(2) If the Employee’s employment terminates by reason of disability or death, this option may be exercised by the Employee in the case of disability and, in the case of death, by the Employee’s designated beneficiary (or personal representative in the event there is no designated beneficiary) at any time prior to the earlier of the expiration of the option or the expiration of one year following the date employment terminated due to disability or death but only if, and to the extent that, the Employee was entitled to exercise this option at the time of disability or death. If the Employee’s employment terminates on account of retirement all options shall fully vest and the Employee may exercise the options at any time prior to the earlier of the Expiration Date of the option or the expiration of 13 months from the date of retirement. The term disability means that the Employee is disabled under the terms of the Company’s long term disability plan.

(3) Notwithstanding the foregoing provisions, an option may not be exercised after retirement if the Board of Directors determines, in its sole discretion, that the Employee’s termination of employment resulted from willful acts, or failure to act, by the Employee detrimental to the Company or any of its subsidiaries.

6.

Option Nontransferable . This option is not transferable otherwise than by will or the laws of descent or distribution and shall be exercisable during your lifetime only by the Employee, the Employee’s guardian or legal representative.

7.

Rights as a Shareholder . The Employee shall have no rights as a shareholder with respect to any of the shares covered by this option until the date of issuance to the Employee of a stock certificate for such shares, and no adjustment shall be made for any dividends or other rights the record date of which is prior to the date such stock certificate is issued.

8.

General Restrictions . The Company shall not be required to deliver any certificate upon the exercise of this option until it has been furnished with such opinion, representation or other document as it may deem desirable, in its discretion, to insure compliance with any law or regulation of the Securities and Exchange Commission or any other governmental authority having jurisdiction over the Company, the Employee, or the shares to be optioned under the Plan or any interests granted there under. This option is also subject to the requirement that if at any time the Board of Directors of the Company shall determine, in its discretion, that the listing, registration or qualification of the shares (or the interests evidenced hereby) subject to this option upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the granting of this option or the issue or purchase of shares hereunder (or the interests evidenced hereby), this option shall not be exercised in whole or in part and the interests evidenced hereby shall have no validity unless such listing, registration, qualification, consent or approval shall have been effected or obtained to the complete satisfaction of the Board of Directors and free of any conditions not acceptable to the Board of Directors.

9.

Adjustment of Shares . In the event of any change in the shares of the Company by reason of any stock dividend, stock split, recapitalization, reorganization, merger, consolidation, split-up, combination, or exchange of shares, or rights offering to purchase  shares at a price substantially below fair market value, or of any similar change affecting the shares, the number and kind of shares subject to this option and the purchase price per share shall be appropriately adjusted consistent with such change in such manner as the Board may deem equitable to prevent substantial dilution or enlargement of the rights granted to, or available for, the Employee hereunder. Any such adjustment shall be final and binding on the Employee.

10.

No Employment Rights . Neither the Plan nor this option shall confer upon the Employee any right with respect to continuance of employment by the Company or any subsidiary nor shall they interfere in any way with the right of the Company or any subsidiary by which the Employee is employed to terminate the employment of the Employee at any time, with or without cause.

11.

Coordination With Plan . The Employee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all of the terms and provisions thereof including any that may conflict with those contained in this Agreement. Capitalized terms used in this Agreement shall have the meaning given to such terms under the Plan.

12.

Notices . All notices to the Company shall be in writing and sent to the Company’s Corporate Secretary at the Company’s offices. Notices to the Employee shall be addressed to the Employee at the Employee’s address as it appears on the Company’s records.

IN WITNESS WHEREOF, the Company and the Employee have caused this Non-Qualified Stock Option Agreement to be executed on the date set forth opposite their respective signatures, it being further understood that the date of grant may differ from the date of signature.

President & CEO

Employee Signature/Date

R304489.2

RESTRICTED STOCK AWARD AGREEMENT

Pursuant to the

FINANCIAL INSTITUTIONS, INC.

1999 MANAGEMENT STOCK INCENTIVE PLAN

Name of Participant:      

Date of Grant:      

Number of Shares:      

Value of each Share on Date of Grant: $      

This RESTRICTED STOCK AGREEMENT (the “Agreement”), dated as of       20       , is made between Financial Institutions, Inc. (the “Company”) and the above-named individual (the “Participant”) to record the granting of Restricted Stock on       (the “Date of Grant”) to the Participant pursuant to the Financial Institutions, Inc. 1999 Management Stock Incentive Plan (the “Plan”) by the Company’s Compensation Committee (the “Committee”) pursuant to Section 2 of the Plan.

The Committee and the Participant hereby agree as follows:

1.  Grant of Shares . The Committee hereby grants to the Participant, as of the Date of Grant, subject to and in accordance with the terms and conditions of the Plan and this Agreement,       shares of the Company’s Common Stock, par value $.01 per share (the “Common Stock”). The grant of shares of Common Stock to the Participant, evidenced by this Agreement, is an award of Restricted Stock (as defined in the Plan) and such shares of Restricted Stock are referred to herein as the “Shares.”

2.  Vesting of Shares . Ownership of the Shares shall vest pursuant to the following vesting schedule, provided that the Participant remains in continuous employment with the Company or one of its Subsidiaries until the date the Shares vest:

The foregoing vesting schedule notwithstanding, if prior to the three year anniversary of the date of grant, there is a Change in Control (as such term is defined in the Plan) of the Company or the Participant’s employment with the Company or one of its Subsidiaries terminates by reason of the Participant’s retirement on or after age 62, death, or disability all Shares not yet vested shall become immediately vested.

3.  Forfeiture . Shares that do not become vested in accordance with the vesting criteria set forth in Section 2 shall be forfeited to the Company.

4.  Legend . Each share certificate representing the Shares shall bear a legend indicating that such Shares are “Restricted Stock” and are subject to the provisions of this Agreement and the Plan.

5.  Withholding Taxes . If the Participant is an employee of the Company or any of its Subsidiaries, the Participant shall remit to the Company in cash the amount needed to satisfy any federal, state or local withholding taxes that may arise or be applicable as the result of the award or vesting of the Shares. The Participant may, with the Committee’s consent, elect to satisfy, totally or in part, such Participant’s obligations pursuant to this section by electing to have Shares withheld, or to deliver previously owned Shares that have been held for at least six (6) months, provided that the election is made in writing on or prior to the vesting of shares pursuant to Section 2 hereof.

6.  General Restrictions on Issuance of Stock Certificates . The Company shall not be required to deliver any certificate representing the Shares until it has been furnished with such opinions, representations or other documents as it may deem necessary or desirable, in its discretion, to ensure compliance with any law or rules of the Securities and Exchange Commission or any other governmental authority having jurisdiction under the Plan or over the Company, the Participant, or the Shares or any interests granted thereunder.

7.  Rights as Shareholder . Except for the transfer and other restrictions set forth elsewhere in this Agreement and in the Plan, the Participant, as record holder of the Shares, shall possess all the rights of a holder of the Company’s Common Stock (including voting and dividend rights); provided, however, that prior to vesting the certificates representing such Shares shall be held by the Company for the benefit of the Participant. As the Shares vest, certificates representing such Shares shall be released to the Participant. The Participant shall be entitled to receive any dividends paid with respect to unvested Shares; provided, however, that no dividend shall be payable to or for the benefit of the Participant for Shares with respect to record dates occurring prior to the Date of Grant, or with respect to record dates occurring on or after the date, if any, on which the participant has forfeited those Shares.

8.  Transferability — Restricted Share Certificates . The Shares may not be sold, transferred, pledged, assigned, encumbered, or otherwise alienated or hypothecated until they become vested in accordance with Section 2 of this Agreement and then only to the extent permitted under this Agreement and the Plan and by applicable securities laws. Prior to vesting, all rights with respect to the Shares granted to a Participant under the Plan shall be available, during such Participant’s lifetime, only to such Participant.

9.  Stock Power . Concurrently with the execution of this Agreement, the Participant shall deliver to the Company a stock power, endorsed in blank, relating to the Shares. Such stock power shall be in the form attached hereto as Exhibit A. The stock power with respect to any certificate representing Shares that do not vest shall be completed in the name of the Company by an officer of the Company, and the Shares shall be returned to either authorized but unissued shares or treasury shares, depending on their original source.

10.  Section 83(b) Election . The Participant may elect, within 30 days of the Date of Grant pursuant to Section 83(b) of the Internal Revenue Code, to include in his or her gross income the fair market value of the Shares covered by this Agreement in the taxable year of grant. The election must be made by filing the appropriate notice with the Internal Revenue Service within 30 days of the Date of Grant. If the Participant makes this election, the Participant shall promptly notify the Company by submitting to the Committee a copy of the election notice filed with the Internal Revenue Service.

11.  Adjustment of Shares . As provided by the Plan, in the event of any change in the Common Stock of the Company by reason of any stock dividend, stock split, recapitalization, reorganization, merger, consolidation, split-up, combination, or exchange of Shares, or of any similar change affecting the Common Stock, the Shares shall be adjusted automatically consistent with such change to prevent substantial dilution or enlargement of the rights granted to, or available for, the Participant hereunder.

12.  No Consultant/Employment Rights . Neither the Plan nor this award shall confer upon the Participant any right with respect to continuance of employment by or service as a consultant of the Company or any affiliate nor shall they interfere in any way with the right of the Company or any affiliate to terminate the Participant’s employment or service as a consultant at any time, with or without cause.

13.  Coordination with Plan . The Employee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all of the terms and provisions thereof including any that may conflict with those contained in this Agreement. Capitalized terms used in this Agreement shall have the meaning given to such terms under the Plan.

14.  Notices . All notices to the Company shall be in writing and sent to the Company’s Corporate Secretary at the Company’s offices. Notices to the Employee shall be addressed to the Employee at the Employee’s address as it appears on the Company’s records.

IN WITNESS WHEREOF, the Committee and the Participant have caused this Restricted Stock Agreement to be executed on the date set forth opposite their respective signatures, it being further understood that the Date of Grant may differ from the date of signature.

1

EXHIBIT A

STOCK POWER

FOR VALUE RECEIVED, the undersigned does hereby sell, assign and

transfer to Financial Institutions, Inc. (the “Company”),       shares of the Company’s
common stock represented by Certificate No.       . The undersigned authorizes the
Secretary of the Company to transfer the stock on the books of the Company in
the event of the forfeiture of any shares issued under the Restricted Stock
Agreement dated as of       20       between the Company and the undersigned.

Dated:      

     
[Participant’s Name]

2