EXHIBIT 10.1
FORM OF CHANGE IN CONTROL AGREEMENTS

AGREEMENT

This Agreement is made and is effective as of {date} by and between Heritage
Oaks Bank (“Company”) and {name} (“Executive”).

WHEREAS, Executive is currently employed by the Company and its parent company
Heritage Oaks Bancorp, a California corporation (“Bancorp”) in the capacities of
Executive Vice-President and {insert functional title} of each of Company and
Bancorp, and Executive’s background, expertise and efforts have contributed to
the success and financial strength of the Company; and

WHEREAS, the Company wishes to assure itself of the continued opportunity to
benefit from Executive’s services and Executive wishes to serve in the employ of
the Company for such purposes;

WHEREAS, the Board of Directors of the Company (“Board”) has determined that the
best interests of the Company would be served by setting forth the benefits
which the Company will provide to Executive if the Executive remains employed by
the Company up to and including the consummation of a Change in Control of the
Company; and

WHEREAS, the Company wishes to provide a specific incentive to Executive to
remain in the employ of the Company through and including the consummation of
any Change in Control of the Company, as defined herein.

NOW, THEREFORE, in order to effect the foregoing, the parties hereto wish to
enter into an agreement on the terms and conditions set forth below. This
agreement (“Agreement”) therefore sets forth those benefits which the Company
will provide to Executive in the event of a “Change in Control of the Company”
(as defined in paragraph 2) under the circumstances described below or in
contemplation of a Change in Control as discussed in Paragraph 1 below.
Accordingly, in consideration of the premises and the respective covenants and
agreements of or in contemplation of a Change in Control as discussed in
Paragraph 1 below herein contained, and intending to be legally bound hereby,
the parties hereto agree as follows:

1. TERM. If a Change in Control of the Company should occur while Executive is
still an employee of the Company, then this Agreement shall continue in effect
from the date of such Change in Control of the Company for so long as Executive
remains an employee of the Company, but in no event for more than two years
following the consummation of a Change in Control of the Company; provided,
however, that the expiration of the term of this Agreement shall not adversely
affect Executive’s rights under this Agreement which have accrued prior to such
expiration. If no Change in Control of the Company occurs before Executive’s
status as an employee of the Company is terminated, this Agreement shall expire
on such date. Prior to a Change in Control of the Company, Executive’s
employment may be terminated by the Company with or without Cause (as defined in
paragraph 3(iii)), and/or this Agreement may be terminated by the Company at any
time upon written notice to Executive and, in either or both such events,
Executive shall not be entitled to any of the benefits provided hereunder;
provided, however, a termination of Executive, or this Agreement, in
contemplation of but prior to a Change in Control shall be presumed to be a
termination following a Change in Control if such termination is reasonably
proximate in time to the public announcement of said Change in Control.

2. CHANGE IN CONTROL. For purposes of this Agreement, a “Change in Control of
the Company” shall be deemed to have occurred if (A) there shall be consummated
(1) any consolidation or merger of the Company or Bancorp in which the Company
or Bancorp, as the case may be, is not the continuing or surviving corporation
(unless the shareholders of Company or Bancorp, as the case may be, immediately
before such merger own immediately after such merger more than a majority of the
voting securities of the surviving entity), or pursuant to which shares of the
Company’s or Bancorp’s common stock would be converted in whole or in part into
cash, securities or other property, or (2) any sale, lease, exchange or transfer
(in one transaction or a series of related transactions) of all or substantially
all the assets of the Company or Bancorp, or (B) the shareholders of the Company
or Bancorp shall approve any plan or proposal for the liquidation or dissolution
of the Company or Bancorp, or (C) any “person” (as such term is used in Sections
13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), other than the Company or Bancorp, or a subsidiary thereof, or
any employee benefit plan sponsored by the Company or Bancorp, or a subsidiary
thereof, or a corporation owned, directly or indirectly, by the shareholders of
the Company or Bancorp in substantially the same proportions as their ownership
of stock of the Company or Bancorp, shall become the beneficial owner (within
the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company
or Bancorp representing 20% or more of the combined voting power of the
Company’s or Bancorp’s then outstanding securities ordinarily (and apart from
rights accruing in special circumstances) having the right to vote in the
election of directors as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases or otherwise.
 
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3. TERMINATION FOLLOWING CHANGE IN CONTROL. If a Change in Control of the
Company shall have occurred while Executive is still an employee of the Company,
Executive shall be entitled to the payments and benefits provided in paragraph 4
hereof upon the subsequent termination of Executive’s employment, within two
years following the consummation of a Change in Control of the Company, by
Executive or by the Company unless such termination is (a) because of death,
“Disability” or “Retirement” (as defined below), (b) by the Company for “Cause”
(as defined below), or (c) by Executive other than for “Good Reason” (as defined
below), in any of which events Executive shall not be entitled to receive
benefits under this Agreement.

(i) Disability. If, as a result of Executive’s incapacity due to physical or
mental illness, Executive shall have been absent from her duties with the
Company on a full-time basis for 90 days, the Company may terminate this
Agreement for “Disability.”

(ii) Retirement. Retirement shall mean the voluntary termination by Executive of
her employment for other than “Good Reason” (as defined below) which termination
qualifies as retirement in accordance with any pension plan adopted by the
Company, pursuant to the Company’s normal retirement policies, or in accordance
with any retirement arrangement established with Executive’s consent with
respect to Executive; provided, however, that no mandatory retirement, whether
under any pension plan or in accordance with any such other retirement
arrangement, shall constitute Retirement for purposes of this Agreement, unless
Executive has previously consented thereto in writing.

(iii) Cause. Executive’s employment shall cease following a Change in Control
upon a good faith finding of Cause by the Board. “Cause” hereunder means the
following:

(A)  Executive’s personal dishonesty, incompetence or willful misconduct,
including but not limited to a breach of the Company’s or Bancorp’s code of
ethics or code of conduct;

(B)  Executive’s breach of fiduciary duty involving personal profit;

(C)  Executive’s intentional failure to perform Executive’s duties for the
Company after a written demand for performance is given to Executive by the
Board which demand specifically identifies the manner in which the Board
believes that Executive has not performed her duties;

(D)  Executive’s willful violation of any law, rule, regulation or final cease
and desist order (other than traffic violations or similar minor offenses) to
the extent detrimental to the Company’s business or reputation; or
 
(E)  the willful engaging by Executive in gross misconduct materially and
demonstrably injurious to the Company.

Notwithstanding any of the foregoing, Executive remains an “at will” employee of
the Company and the Company can without cause terminate Executive’s employment
prior to any Change in Control in the discretion of the Board of Directors of
the Company.

(iv) Resignation for Good Reason. Following a Change in Control during the Term
hereof, Executive may, under the following circumstances, regard Executive's
employment as being constructively terminated by the Company (and in such case
Executive's employment shall terminate) and may, therefore, Resign for Good
Reason within 90 days of Executive's discovery of the occurrence of one or more
of the following events, any of which shall constitute "Good Reason" for such
Resignation for Good Reason:

(A) Without Executive's express written consent, the assignment to Executive of
any duties materially inconsistent with Executive's position, duties,
responsibilities and status with the Company immediately prior to the Change in
Control, or any subsequent removal of Executive from or any failure to re-elect
her to any such position;

(C) A material reduction (ten percent or greater) by the Company of Executive's
total compensation (base salary and any bonus compensation applicable to her) as
in effect immediately prior to the Change in Control;

(D) A material reduction (ten percent or greater) by the Company to the
Executive’s total benefits and perks as in effect immediately prior to the
Change in Control; or the taking of any action by the Company which would
materially affect Executive's participation in or reduce Executive's benefits
under any such benefits or ‘perks' plans, programs or policies, or deprive
Executive of any material fringe benefits enjoyed by her immediately prior to
the Change in Control;
 
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(E) The Company requiring Executive to be based anywhere other than San Luis
Obispo County where the Company’s headquarters is currently situated, except for
required travel on the Company’s behalf to an extent substantially consistent
with Executive's present business travel obligations; or

(F) The failure of the Company to obtain the assumption of this Agreement by any
successor.

(v) Notice of Termination. Any termination by the Company pursuant to
subparagraphs (i), (ii) or (iii) above or by Executive pursuant to subparagraph
(iv) above shall be communicated by written Notice of Termination to the other
party hereto. For purposes of this Agreement, a “Notice of Termination” shall
mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated.

(vi) Date of Termination. “Date of Termination” shall mean

(A) if this Agreement is terminated for Disability, thirty days after Notice of
Termination is given,

(B) if Executive’s employment is terminated pursuant to subparagraph (iv) above,
the date specified in the Notice of Termination,

(C) if Executive’s employment is terminated for any other reason, the date on
which a Notice of Termination is given (or, if a Notice of Termination is not
given, the date of such termination), and

(D) if Executive is entitled to compensation pursuant to paragraph 4, the date
determined pursuant to such paragraph.

4. COMPENSATION DURING DISABILITY OR UPON TERMINATION.

(i) If, after a Change in Control of the Company, Executive shall fail to
perform her duties because of a Disability, Executive shall continue to receive
his/her full base salary monthly at the rate then in effect until her employment
is terminated pursuant to paragraph 3(i) hereof.

(ii) If, after a Change in Control of the Company, Executive’s employment shall
be terminated for Cause, the Company shall pay Executive his/her full base
salary through the Date of Termination at the rate in effect at the time Notice
of Termination is given and the Company shall have no further obligations to
Executive under this Agreement.

(iii) If, after a Change in Control of the Company, the Company shall terminate
Executive’s employment (other than pursuant to paragraph 3(i) or 3(iii) hereof
or by reason of death or Retirement as provided in Paragraph 3(ii)) or Executive
shall terminate her employment for Good Reason, Executive shall be entitled to
payments pursuant to this paragraph 4:

The Company shall pay to Executive as severance pay (and without regard to the
provisions of any benefit plan) in a lump sum on the fifth day following the
Date of Termination, the following amounts:

(x) Executive’s full base salary through the Date of Termination at the rate in
effect at the time Notice of Termination is given plus any benefits or awards
(including both the cash and stock components) which pursuant to the terms of
any Plans have been earned or become payable, but which have not yet been paid
to Executive (including amounts which previously had been deferred at
Executive’s request); and
(y) an amount equal to Executive’s total accrued compensation from the Company
(including bonus) during the previous twelve (12) months.
 
(iv) Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor
shall the amount of any payment provided for in this paragraph 4 be reduced by
any compensation earned by Executive as the result of employment by another
employer after the Date of Termination, or otherwise.

(v) The provisions of this Agreement, and any payment provided for hereunder,
shall not reduce any amounts otherwise payable, or in any way diminish
Executive’s existing rights, or rights which would accrue solely as a result of
the passage of time, under any employee benefit plan of the Company, any
employment agreement or other contract, plan or arrangement of the Company,
except to the extent necessary to prevent double payment under any severance
plan or program of the Company in effect at the Date of Termination.
 
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5. SUCCESSOR’S BINDING AGREEMENT 
 
(i) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company, by agreement in form and substance
satisfactory to Executive expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place.

(ii) This Agreement shall inure to the benefit of, and be enforceable by,
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributes, devises and legatees. If Executive should die
while any amounts would still be payable to Executive hereunder if Executive had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to Executive’s devisee,
legatee or other designee or, if there be no such designee, to Executive’s
estate.

6. NO EMPLOYMENT AGREEMENT. In consideration of the foregoing obligations of the
Company, Executive agrees to be bound by the terms and conditions of this
Agreement and to remain in the employ of the Company during any period following
any public announcement by any person of any proposed transaction or
transactions which, if effected, would result in a Change in Control of the
Company until a Change in Control of the Company has taken place or, in the
opinion of the Board, such person has abandoned or terminated its efforts to
effect a Change in Control of the Company. Subject to the foregoing including
but not limited to the provisions contained in Paragraph 1 that a termination in
contemplation of a Change in Control entitles Executive to the amounts provided
in Section 4, nothing contained in this Agreement shall impair or interfere in
any way with Executive’s right to terminate her employment or the right of the
Company to terminate Executive’s employment with or without cause prior to a
Change in Control of the Company. Nothing contained in this Agreement shall be
construed as a contract of employment between the Company and Executive or as a
right for Executive to continue in the employ of the Company, or as a limitation
of the right of the Company to discharge Executive with or without cause prior
to a Change in Control of the Company.

7. NOTICE. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the last page of this Agreement, provided that
all notices to the Company should be directed to the attention of the Chairman
of the Company’s Compensation Committee, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notices of change of address shall be effective only upon receipt.

8. FURTHER ASSURANCES. Each party hereto agrees to furnish and execute such
additional forms and documents, and to take such further action, as shall be
reasonable and customarily required in connection with the performance of this
Agreement or the payment of benefits hereunder.
 
9. MISCELLANEOUS. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by Executive and such officer as may be specifically designated by the
Board of Directors of the Company. No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. This Agreement
contains the entire agreement among the parties and supersedes and replaces any
prior agreement between the parties concerning the subject matter hereof. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of California.

10. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
 
11. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
 
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12. ARBITRATION. Any dispute or controversy arising or in connection with this
Agreement shall, upon written request of one party to the other, be submitted to
and settled exclusively by arbitration pursuant to the rules of the American
Arbitration Association. Judgment may be entered on the arbitrator's award in
any court of competent jurisdiction. The cost of such arbitration, including
reasonable attorney’s fees, shall be borne by the losing party or in such
proportions as the arbitrator(s) shall decide. Arbitration shall be the
exclusive remedy of Executive and the Company and the award of the arbitrator(s)
shall be final and binding upon the parties. All reasonable costs, including
reasonable attorney’s fees, incurred in enforcing an arbitration award in court,
or of seeking a court order to compel arbitration, shall be borne by the losing
party in such proceedings.

13. ADVICE OF COUNSEL. Executive acknowledges that she has been encouraged to
consult with legal counsel of her choosing concerning the terms of this
Agreement prior to executing this Agreement. Any failure by Executive to consult
with competent counsel prior to executing this Agreement shall not be a basis
for rescinding or otherwise avoiding the binding effect of this Agreement. The
parties acknowledge that they are entering into this Agreement freely and
voluntarily, with full understanding of the terms of this Agreement.
Interpretation of the terms and provisions of this Agreement shall not be
construed for or against either party on the basis of the identity of the party
who drafted the terms or provisions in question.

14. REDUCTION OF PAYMENT. Notwithstanding anything in the foregoing to the
contrary, if the severance payment or any of the other payments provided for in
this Agreement, together with any other payments which Executive has the right
to receive from the Company would constitute a "parachute payment" (as defined
in Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended, or such
similar set of laws (the “Code”)), the payments pursuant to this Agreement shall
be reduced (reducing first the payments under Section 3 to the largest amount as
will result in no portion of such payments being subject to the excise tax
imposed by Section 4999 of the Code, provided, however, that the determination
as to whether any reduction in the payments under this Agreement pursuant to
this proviso is necessary shall be made in good faith by the Company’s then
current tax services provider / advisor, and such determination shall be
conclusive and binding on the Company and Executive with respect to the
treatment of the payment for tax reporting purposes.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 
HERITAGE OAKS BANK
 
545 12TH Street
 
Paso Robles, California 93446
         
By:
   
Its:                President & CEO
 
Print name:  Lawrence P.Ward
         
THE EXECUTIVE
 
545 12TH Street
 
Paso Robles, California 93446
             
{Executive’s name}

 
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