Exhibit 10.2

FORM OF STOCK OPTION AGREEMENT

Number of shares subject to option:

This Agreement dated as of                      between Peoples Financial
Services Corp. (the “Corporation”) and (the “Optionholder”),

WITNESSETH:

 

1. Grant of Option

Pursuant to the provisions of the Peoples Financial Services Corp. Stock Option
Plan (the “Plan”) the Corporation hereby grants to the Optionholder, subject to
the terms and conditions of the Plan and subject further to the terms and
conditions herein set forth, the right and option to purchase from the
Corporation for cash, or for common stock of the Corporation subject to the
approval of the committee (as defined in the Plan), all or any part of an
aggregate of                  Shares of Common Stock ($2.00 par value) of the
Corporation (“Common Stock”) at the purchase price of $                 per
share; such option to be exercised as hereinafter provided.

 

2. Terms and Conditions

It is understood and agreed that the option evidenced hereby is subject to the
following terms and conditions:

(a) Expiration Date. Subject to the provisions of Paragraph 2(d), the option
granted hereby shall expire on                     .

(b) Exercise of Option. This option may be exercised in whole at any time, or
from time to time in part, prior to the expiration date specified in Paragraph
2(a). Any exercise shall be accompanied by a written notice to the Corporation
specifying the number of shares as to which the option is being exercised.
Notwithstanding anything contained herein to the contrary, if a Change in
Control occurs, the option granted hereby shall become immediately exercisable.

(c) Payment of Purchase Price Upon Exercise. At the time of any exercise the
purchase price of the shares as to which this option shall be exercised shall be
paid in cash (or, subject to the conditions and limitations described in the
Plan, by delivering shares of Common Stock of the Corporation or by delivering a
combination of such Common Stock and cash equal to the price per share set forth
in Paragraph I hereof) to the Corporation.

(d) Exercise Upon Death, Disability or Termination of Employment.

(1) In the event of the death of the Optionholder while an employee of the
Corporation or of a Subsidiary, this option may be exercised, to the extent that
the Optionholder was entitled to do so at the date of termination of employment
due to such cause, by the person or persons to whom the Optionholder’s rights
under this option pass by will or applicable law, or if no such person has such
right, by the estate’s executors or administrators, in whole at any time, or
from time to time in part, within 12 months after the Optionholder’s death, but
in no event later than the expiration date specified in Paragraph 2(a).

(2) If the Optionholder’s employment with the Corporation or a Subsidiary
terminates because of total and permanent disability, then the Optionholder may
exercise this option, to the extent that the Optionholder was entitled to do so
at the date of termination of employment due to such cause, in whole at any
time, or from time to time in part, within 12 months after the date of such
termination, but in no event later than the expiration date specified in
Paragraph 2(a).

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(3) If the Optionholder’s employment with the Corporation or a Subsidiary
terminates because of retirement as defined in the Plan, then the Optionholder
may exercise this option, to the extent that the Optionholder was entitled to do
so at the date of early, normal or late retirement, in whole at any time, or
from time to time in part, within three months after the date of retirement, but
in no event later than the expiration date specified in Paragraph 2(a).

(4) If the Optionholder’s employment with the Corporation or a Subsidiary is
voluntarily terminated by the Optionholder (other than for retirement as defined
in the Plan) or involuntarily terminated by the Corporation or a Subsidiary for
any reason (other than disability) prior to a Change in Control, then the option
will expire on the date of such termination of employment, but in no event later
than the expiration date specified in Paragraph 2(a). If          the
Optionholder’s employment is terminated by the Corporation or a Subsidiary for
any reason (other than disability) within one (1) year tollowing a Change in
Control, then the option shall terminate three months from the date of such
termination of employment, but in no event later than the expiration date
specified in Paragraph 2(a).

(e) Nontransferability. This option shall not be transferable other than by will
or by the laws of descent and distribution. During the lifetime of the
Optionholder, this option shall be exercisable only by the Optionholder.

(f) Adjustments. In the event of any change in the Common Stock of the
Corporation by reason of any stock dividend, recapitalization, reclassification,
merger, consolidation, split-up, combination or exchange of shares, or of any
similar change affecting the Common Stock, then in any such event the number and
kind of shares subject to this option and their purchase price per share shall
be appropriately adjusted consistent with such change. If any other change in
the number or kind of the outstanding shares of stock of the Corporation occurs,
an adjustment may be made to the number and kind of shares subject to this
Option and their purchase price per share in such manner as a majority of the
disinterested members of the Board of Directors may deem equitable to prevent
substantial dilution or enlargement of the rights granted to the Optionholder
hereunder. Any adjustment so made shall be final and binding upon the
Optionholder.

(g) No Rights As Shareholder. The Optionholder shall have no rights as a
shareholder with respect to any shares of Common Stock subject to this option
prior to the date of issuance of a certificate or certificates for such shares.

(h) No Right to Continued Employment. This option shall not confer upon the
Optionholder any right with respect to continuance of employment by the
Corporation or any Subsidiary, nor shall it interfere in any way with the right
of the Corporation or any Subsidiary to terminate the Optionholder’s employment
at any time.

(i) Compliance with Law and Regulations. This option and the obligation of the
Corporation to sell and deliver shares hereunder, shall be subject to all
applicable federal and state laws, rules and regulations and to such approvals
by any government or regulatory agency as may be required. The Corporation shall
not be required to issue or deliver any certificates for shares of Common Stock
prior to (1) the listing of such shares on any stock exchange or automated
quotation system on which the Common Stock may then be listed or quoted, if any,
and (2) the completion of any registration or qualification of such shares under
any federal or state law, or any rule or regulation of any government body which
the Corporation shall, in its sole discretion, determine to be necessary or
advisable.

 

3. Investment Representation

The Committee appointed pursuant to the Plan may require the Optionholder to
furnish to the Corporation, prior to the issuance of any shares upon the
exercise of all or any part of this option, an agreement (in such form as such
Committee may specify) in which the Optionholder represents that the shares
acquired upon exercise are being acquired for investment and not with a view to
the sale or distribution thereof:

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4. Optionholder Bound By Plan

The Optionholder hereby acknowledges receipt of a copy of the Plan and any
amendments thereto, and agrees to be bound by all the terns and provisions
thereof, which, to the extent relevant, are incorporated herein by reference.

 

5. Withholding of Taxes

The Corporation will require as a condition precedent to the exercise of this
option that appropriate arrangements be made for the withholding of any
applicable taxes. The obligation of the Optionholder under this paragraph to
provide for the payment of withholding taxes may be satisfied, subject to the
provisions of the Plan, by electing to have the Corporation withhold certain of
the shares that would otherwise be issuable pursuant to the exercise of the
option granted hereby.

IN WITNESS WHEREOF, Peoples Financial Services Corp. has caused this Agreement
to be executed by a duly authorized officer and the Optionholder has executed
this Agreement, both as of the day and year first above written.

 

PEOPLES FINANCIAL SERVICES CORP.     OPTIONHOLDER By:         (Signature)    
(Signature)   (Print Name)     (Print Name)   (Print Title)