BPAS

1. BPAS A due diligence overview

2. Our corporate structure Community Bank System, Inc. (NYSE: CBU) Benefit Plans Administrative Services, Inc. (BPAS) Community Bank, N.A. - Regional Bank BPA HB&T Harbridge FlexCorp Institutional Trust Company (Member NSCC) DC Plan Administration National Actuarial Practice (formerly PWC) Section 125Practice

3. BPA: A mid-sized provider with national reach • Participants in 50 states plus Puerto Rico • Clients in 47 states • Offices in two time zones • Partnership with over240 financial intermediaries (Bank Trust, RIA, Broker Dealer channels) • Able to tap several metropolitan areas for new talent • Our core business is retirement plan administration and consulting. • Profitable and growing. “Centralized operations, regionalized plan consulting.”

4. The business we service • Our Defined Contribution business • 2,300 Defined Contribution plans • 310,000 employee records tracked • 205,000 participants with a balance • $4.6 billion in DC plan assets • Average plan: 148 employees, 102 participants, $2.4 million in assets • Plans from 10 to over 5,000 participants (and over 10,000 employee records in total) • Our Defined Benefit business • 26 credentialed actuaries; 450 engagements; 50,000 participants • FlexCorp (Houston) • 30,000 Section 125 participants

5. Some of the larger plans we administer • Kinney Drugs leveraged kSOP • $108 million in plan assets, 10,009 total employee records tracked (2,150 participants with balance) • Community Bank System, Inc. 401(k) Plan (kSOP) • $100 million in assets, 3,868 total employee records tracked (2,100 participants with balance) • Pay and Save, Inc. 401(k) Plan • Retail convenience store chain in five states; 6,983 total employee records tracked (2,800 participants with balance) • Plumbers and Pipefitters Local 520 • Taft Hartley Pension Plan with $73 million, 2100 participants • Suncoast Schools Retirement Program • $67 million in assets; 2,400 active participants. • Stony Brook University Physicians Retirement Plan • $120 million in assets, 700 participants

6. ADM Corporation American Academy ofActuaries Bausch & Lomb Black & Decker Boston College Braun Corporation Burger King Corporation Church's Chicken CNA Insurance Coca Cola ConAgra Cummins Engine DaimlerChrysler Financial Services Direct T.V. First Security Mortgage Household name clients of BPA (across U.S. and P.R.) • General Electric Corp. • Golub Corp. (Price Chopper supermarkets) • Gunstock Mountain • Heineken, Inc. • Hellen Keller National Center • International Food Network • Kelly Services • KFC / Taco Bell / Pizza Hut of P.R. • Kinney Drugs USA • Levitt Homes • Lexmark Corporation • Marriott Corporation • McDonald's Corporation • Nestle Corporation • Oracle • Pall Corp. • Pay and Save, Inc. • SAP • Star Sea Lines • St. Jude Medical Center • Stony Brook University • Sunsetter • Suzuki • Syracuse University • The Doug Flutie Foundation • Twentieth Century Fox • Unilever • Waste Management Between our business in the 50 U.S. states plus Puerto Rico, our client base includes divisions or subsidiaries of the above companies and organizations.

7. Organizational Chart for our Defined Contribution business Translation? Accountability.

8. Retirement partnerships: Two distinct paradigms Plan Sponsor Plan Sponsor Trustee / Advisor Recordkeeper Trustee / Advisor Recordkeeper • Issues to consider: • Flow of daily communication • Involvement in routine daily transactions • The “liability chain” for recordkeeping issues • Trading / custodial / settlement issues • Staffing requirements for a given book of plans • Billing / collecting for recordkeeping and trustee fees • Client’s perceived “value added” for various activities

9. A strategic combination of local and national resources Persistent participant education program Simplifying life for Human Resources Accessibility for one-on-one participant needs Robust participant and plan sponsor websites (technology) Helping plan sponsor meetits fiduciary obligations Strength in compliance and technical matters Investment Policy Statement, ERISA 404(c) assistance Flexible universe of no-load mutual funds, with SDBA option Maintaining fund menu,meeting with RP Committee Transparent processing of daily transactions Responsive, proactive service (a relationship) Responsive, proactive service (a relationship) The Relationship Trustee / Advisor The Platform BPAS

10. Who owns liability for errors in this model? BPASFI Partner • Recordkeeping: X • Administration: X • Clearing: X • Custodial functions, tax reporting: X • Enrollment forms: X • Transaction disputes X • Data security, firewalls X • Fiduciary functions X • Plan consulting, document work X (possibly) • Other issues: X X (Not an exhaustive list of all functions)

11. Systems that drive our operation • Sungard OmniPlus 5.80 (RK system) • Delta Data for NSCC trading, reconciliations and other needs • Wystar (DB, FAS 106, etc) • FT Williams (5500s) • Relius Government Forms (1099Rs, 1099-Div 5498s, etc) • ASC Compliance Testing System (compliance testing, new comp, allocations, general non-discrimination testing) • CensusPro™ (our proprietary, web-based census gathering application) • Plan and Task Manager (proprietary business management system) • Visual Accountmate (billing, accounts receivable)

12. Our bundled structure provides compelling advantages • Trustee or Advisor: Relationship Manager, and local point of contact • BPAS: Administrator, NSCC clearing firm and agent-to-trustee under one roof (BPA, HB&T) • We do our own trading (with the exception of Merrill Lynch for company stock and TD Ameritrade for SDBA) • We host our own websites, maintain our own team of Omni programmers • In-house printing and fulfillment shop • We handle all trust accounting and custodial functions as the agent to Trustee (HB&T) • Translation? Accountability and control; one stop shopping; quick resolution of issues.

13. Plan versus Trust? A major BPAS advantage Plan sponsor Participant B4. Check cut to participant. Funds are a general asset of CBNA until payment clears. A5. Funds ACH pulled on T+1to settle trades from trade date A2. ACH verification to plan sponsor B1. Requests distribution HBT Trust Department Cash(not a plan asset) A3. ACH isapproved SunGard OmniPlus Our trust accountingsystem Our daily recordkeepingsystem A1. BPA reads census file A6. Net settlement of funds (T+1) A4. BPA / HBT makes purchases on T+0NOW funds become plan assets B2. BPA / HBT initiates sales. As of NOW, funds are no longer plan assets. B3. Funds received on T+1 Mutual Funds / Stock

14. Plan versus Trust, cont’d • Since plan and trust is the same system, no possibility of being out of sync • BPAS reconciles fund prices every day (T+1 vs. T+0) • Company stock positions reconciled daily (Merrill Lynch, etc) • Daily reconciliation to fund family positions • NSCC file for dividends / capital gains • There is no “Plan Trust Cash” in our model (a paradigm shift for many clients) • Our operational and reconciliation procedures are subject to multiple levels of review (Trust examiners, DOL, IRS, SAS-70, Plan auditors, etc) • “Do it once.” – BPA Mantra

15. Our Plan and Task Manager system (PTM) • Internal application that is proprietary to BPAS • Organizes the workflow for our entire business • Every action item is organized as a “task” (census file, loan, distribution, hardship request, PS allocation, etc) • All tasks are logged and can be viewed on the system by any team member, along with notes and comments • Workflow management • Monitoring of performance and standards • Allows us to see when additional resources need to be deployed • Modules for plans, funds, contacts, financial intermediaries, CSR activity, conversions, compliance testing, documents and many other needs

17. Examples of how PTM helps manage our business • Participant forms are immediately PDF scanned into system, allowing any of our staff to view current status and respond to any questions or issues • Full visibility of the census file process (when file was uploaded, when ACH verification was sent, when client approved the ACH, when funds traded, etc) • Real-time monitoring of key transactions and tasks (e.g., contributions, distributions, loans, etc) – additional staff can be allocated to cure any backlog • Robust tracking of compliance testing and 5500 completion process (viewing results by Plan Consultant or office to ensure timely completion, week-by-week completion percentages, etc) • On-demand reports covering all aspects of our business (fund availability, funds traded, revenue analysis, plan types, etc) • Multi-office coordination of effort

18. Tracking CSR activity

19. Other innovative offerings from BPAS • The MyPlanLoan loan automation program • Price guaranteed method for trading company stock • Automated self-directed brokerage windows • Certified audit package, delivered to all plans, regardless of the number of participants • Freedom Savings Plans • Auto Rollovers (www.autorollovers.com) • IRA Select • Delinquent contribution reminder notice (DCRN)

20. Expertise in company stock: Four trading methodologies • Book entry / self custody • Price guaranteed approach • Pended Trades approach • Unitization (with Matrix) • Strong proficiency in kSOP plan design

21. Partnership Highlights(as presented to plan sponsors)

22. Simplifying life for the Employer(administration versus recordkeeping) • We track all employees on our system (not just those with a balance) • We process census files for a variety of edits before notifying employer of amount to be funded • Eligibility determination by source: standard service • Online enrollment, deferral rate changes • Vesting updates real time • Streamlined process for loans, distributions • Greatly reduced workload for compliance testing and Form 5500 process • Certified audit package (big advantage for larger plans) • Interacting with HR through “Action Items” in plan sponsor website “You’d be amazed how many errors are found in a typical payroll system. The BPA approach to administration provides a vital ‘check and balance’ tocatch many possible errors before they are traded into your Plan. This additional audit is a major advantage of BPA versus other providers we have worked with.”- Recent comment from plan sponsor client

23. What the flow looks like for new contributions Plan sponsor logs onto CensusPro, reviews / approves ACH verification If approved by 3:30 PM EST, BPA initiates mutual fund purchases at that evening’s prices. If after 3:30 PM EST, purchasesmade on next business day. Plan sponsor logs onto CensusPro, reviews / approves ACH verification Plan sponsor logs onto CensusPro, reviews / approves ACH verification Plan sponsor logs onto CensusPro, reviews / approves ACH verification 3 3 3 4 Plan Sponsor Plan Sponsor Plan Sponsor Plan Sponsor 1 Plan sponsor imports census file into CensusPro, submits to BPA The next morning, participants see trades reflected on website. BPA ‘ACH pulls’required funds from plan sponsor checkingaccount to settle prior day’s contributions. 2 2 5 BPA reviews file for numerous edit checks, sends email to plan sponsor instructing them to log onto CensusProand review ACHverification, which includes corrections we made to data Note: for plan sponsors who prefer, authorization canbe given to have BPA automatically trade new contribution if there are no edits on ACH verification.

24. Small benefits that made a big difference We adjudicate loans, hardships and distributions, dealing directly with participants We handle all age 70 ½ notices for the entire plan We prepare all required notices (safe harbor, QDIA, SMM, SAR) No redemption fees (opposite way trade block used where needed) No blackout period for fund changes Plan sponsors can assist participants in a variety of ways (obtaining paperwork in website,transactional access, etc) Benefits of new website (additional streamlining of many processes)

25. A specialist at plan design Safe harbor designs Entry dates Hours requirements QNEC and QMACs Vesting True-ups Roth, catch-up contributions New comparability Allocations We help you navigate ERISA and its complexities, helping you make informed plan design decisions. In-service distributions Automatic enrollment Compensation definitions Handling of forfeitures Age-weighted allocations Last day rules Loan provisions QDIA options Distribution options Deferral rate changes Age or service-weighted allocations Social Security integration Contribution limits

26. Assisting participants through our Call Center CSR Team Manager • instant management reports • real-time reporting of: • incoming call volume • number of calls on hold • average hold time • call abandonment rate • individual CSR performance • can add additional CSRs to queue at any time based on volume • ideal system for managing, training individual CSRs CSR CSR CSR CSR CSR CSR CSR CSR • All calls recorded and archived • ‘Next available routing’ across multiple offices • If queue exists, approximate hold time is provided • Option to hang up, receive immediate callback when next CSR becomes available • Translator line covers approximately 100 additional languages • Current team hours: 8:30 AM – 6:30 PM EST • Email and voicemail available 24 / 365

27. Strong commitment to technology • Bilingual voice response unit, participant website, and sponsor website (English and Spanish) • Personalized rate of return • Automatic rebalancing • Automated loan and distribution processes • Online fact sheets and prospectuses • Quarterly statement archive (e-delivery) • All participant forms, SPD, confirms, and newsletter posted online • Self-directed brokerage account option • Upgrading websites to Enveritus ™, Summer 2010

28. TrueOpen Architecture on Investments • Over 230 fund families currently traded across our platform (2,100+ funds in total) • No proprietary funds or “ratio requirements” • Able to select the strongest possible mix of investments for your plan since we are 100% revenue neutral • Full range of A, Advisor and R shares, plus “pure institutional” share classes • All funds trade no-load • A critical distinction versus retirement programs offered by asset gatherers

29. Many of the largest firms: Highly functionalized (“I only handle loans.”) Loop lines The bullpen strategy for servicing clients Technical issues handled by small group of specialists Multiple firms often involved Rigid and bureaucratic (charging you for an overnight package) It’s your job to navigate provider’s maze Roadways to Retirement Solution: Plan Consultant: your main point of contact Dedicated backups Direct dial phone numbers, email addresses Quick resolution of issues One organization handles all administrative, trading and operational functions Our employees know each other Your business is important to us Taking ownership Industry behemoths versus our approach

30. Answering the Call on Participant Education • Trustee or Advisor Partner conducts regular, onsite meetings (semi-annually, quarterly, etc) • Initial year enrollments • Continuing education classes devoted to specific topics • Quarterly statements and newsletters • Education and guidance delivered via participant website • Enrollment booklets, workbooks, slide rules and other printed pieces • Customizable education pieces for various needs • Collaborating with HR to deliver the message, using a variety of media Communicating with your employees on theirlevel – in a friendly, non-intimidating way.

31. Various presentations we offer

32. Enrollment kits and our online enrollment kit Enrollment kits EBN – the Online enrollment kit Full online enrollment

33. The Market Dashboard (real-time market insights)

34. Online library of planning calculators

35. The MasteryPoint ™ Guidance Plus Suite

36. The Annual Plan Review Report (APRR)

37. Our participant website Welcome screen Statement on demand Account realignment Online enrollment screen

38. Account breakdown by fund, source Statement on demand with dynamic date ranges Transaction research, export to Excel Fund-to-fund transfers Account rebalance Automatic rebalancing Online enrollment, deferral rate changes, auto-escalation Loan modeling and request Loan, hardship, distribution paperwork Personalized rate of return Fund research library Online fact sheets, prospectuses, performance history Education and guidance suite Multimedia library Secure email with CSR team Archive of past statements and newsletters Required notices Site maps More features coming in 2012 Various capabilities of participant website

39. Our plan sponsor website Welcome screen Log on as a participant The Resource Center – an online“file cabinet” of all data and reports Participant messaging

40. Account breakdown by fund, source Statement on demand with dynamic date ranges (plan level) Transaction research, export to Excel Drill down as a participant Transactional access (enabled or disabled) Resource Center (vast library of tools and reports) Action Items Annual Plan Reports Quarterly Plan Reports Utilization Reports Complete data table on employee population through .CSV files Research status of transactions (loans, hardships, distributions, etc) View login, transaction history by participant Fund research library Online fact sheets, prospectuses, performance history Education and guidance suite Multimedia library Banner messaging at participant level Ongoing rollout of new enhancements Various capabilities of plan sponsor website

41. = platform true up = revenue sharing How the platform charge works Platform Charge: 35 basis points on mutual fund assets 35 basis points 10 bpcustodial fee 25 bpcustodial fee 35 bpcustodial fee AmericanGrowthFund ofAmericaR435 bps Buffalo Small CapStock 25 bps Dodge & CoxInternational 10 bps “Pure institutional” funds (Vanguard T. Rowe, etc) Any custodial fee is applied as a level monthly charge against holdings in the fund. For example, if a 25 basis point custodial fee is required, it would be charged as 2.08 basis points / month from that fund, or $2.08 / month for a participant with $10,000 invested. This fee is does not appear on quarterly participant statements (it is netted from earnings), but would be found in the “activity history” area of the participant website.

42. How we convert plans to our services Enrollment / education meetings, Forms returned (or online enrollment) Plan Profile Form and enrollment booklet order form submitted. Fund selections made. Fund mapover process / re-registration of shares (typically 1-2 business days) Plan is live! $ $ 2 months prior 1 month prior Month #1 -- Our Conversion Team manages conversion process, coordinating with all parties to minimize work for the plan sponsor -- Blackout period ends.PINsmailed to participant homes. File received from prior recordkeeper New provider memoand blackout notice given to employees Begin processing employee contributions per investment elections This illustration depicts the typical sequence of events in a conversion where a fund mapover process is used. Actual circumstances of each plan conversion will drive the ultimate outcome, including the timeliness and accuracy of data received from the prior recordkeeper.

43. Summary • Partnering with a mid-sized provider offers key advantages, especially in terms of accountability. • BPAS has built a very efficient mousetrap, thanks to our vertically integrated operations. (Difficult to replicate today because NSCC is generally not accepting new settling bank members) • The next decade will be one of flexibility. An open architecture solution like ours can give your organization a powerful edge. • Strong understanding of the FI partnership model, great expertise helping partners build their business. • Continuous upgrades and enhancements with a focus on technology. • We look forward to additional discussions with your organization.