EXHIBIT 10.1
 
Retirement Benefits Agreement
 
    This Retirement Benefits Agreement (the “Agreement”) is made and entered
into by and between G. Richard Gatton (“Gatton”) and First Savings Bank, A
Federal Savings Bank (the “Bank”), a federal savings bank with its headquarters
in Three Rivers, Michigan.
 
W i t n e s s e t h:
 
    Whereas, Gatton is currently a director of the Bank and its holding company,
Peoples Bancorp (“PB”), and resigned from his position as President and Chief
Executive Officer of the Bank effective as of March 30, 2006 (the “Retirement
Date”) at the age of 63 years;
 
Whereas, pursuant to Section 6(b) of the Employment Agreement dated February 29,
2000, by and among Gatton, the Bank and PB (the “Employment Agreement”), the
Bank has agreed to pay to Gatton additional retirement benefits he would have
received if he had continued in the employment of the Bank until age 65 years,
to the extent such benefits are not otherwise paid to him under the Three Rivers
Financial Corporation’s Retirement Plan or under the First Savings Bank, FSB
Salary Continuation Agreement dated September 18, 1996, between the Bank and
Gatton (the “Salary Continuation Agreement”);
 
Whereas, the Bank has determined that present value of the benefit payable to
Gatton under Section 6(b) of the Employment Agreement as a result of increased
benefits he would have received under the Three Rivers Financial Corporation’s
Retirement Plan had he worked until age 65 years, is $57,894, and has decided
that such benefit shall be paid to Gatton in a lump sum on January 5, 2007;
 
Whereas, Gatton is entitled to receive an additional $15,000 per year over a
15-year period under the Salary Continuation Agreement as a result of the
provisions in Section 6(b) of the Employment Agreement;
 
Whereas, this Agreement is being signed to set forth the Bank’s obligation to
make such payment to Gatton and to clarify certain other matters pertaining to
the Employment Agreement and the Salary Continuation Agreement.
 
Now, Therefore, in consideration of the mutual promises and covenants contained
herein, it is hereby agreed by and between the parties hereto as follows:
 
1.  On January 5, 2007, the Bank shall pay to Gatton the amount of $55,721.85,
less appropriate federal and state income tax withholdings, in satisfaction of
its obligations under Section 6(b) of the Employment Agreement, and Gatton
agrees that the payment of such amount will satisfy that obligation. To the
extent employment taxes are due with respect to this payment and with respect to
the payments described in Paragraph 2 of this Agreement, but have not previously
been paid, the Bank will pay those taxes in 2006 and withhold from the payment
to be provided on January 5, 2007 the appropriate FICA and FUTA portions payable
by Gatton with respect to these benefits.
 
2.  Pursuant to Section 2.2 of the Salary Continuation Agreement and Section
6(b) of the Employment Agreement, the Bank is required to pay Gatton annual
payments of $15,000

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over a period of 15 years payable on a monthly basis commencing with the first
day of the month following Gatton’s Normal Retirement Date (the date he attains
age 65) and continuing thereafter for 179 additional months. Pursuant to that
agreement, the Bank shall pay to Gatton monthly payments of $1,250 (less
appropriate federal and state income tax withholdings) commencing on November 1,
2007, for a period of 15 years. The monthly amount shall be increased by 3%
annually in November of each year, as shown on schedule “A” attached to this
agreement. It is the intention of the parties hereto that the Salary
Continuation Agreement shall comply in all respects with the requirements of §
409A of the Internal Revenue Code of 1986, as amended.
 
3.  In addition to the foregoing benefits, in consideration for his prior
services as an employee of the Bank, Gatton shall also continue to receive the
health and medical benefits that are provided by the Bank generally to Bank
employees, paying 75% of the premiums owed for such coverage, until Gatton
attains age 65. To the extent that the commencement date of Medicare benefits is
extended beyond age 65, the provisions of this Section 3 shall be extended to
the commencement date of such Medicare benefits.
 
4.  For purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been given
when delivered or mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
 

 
If to Gatton:
G. Richard Gatton
3393 Turnberry Lane
Lakeland, FL 33803
 
 
If to Bank:
First Savings Bank, A Federal Savings Bank
123 Portage Avenue
Three Rivers, MI 49093

 
or to such address as either party hereto may have furnished to the other party
in writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
 
5.  The validity, interpretation, and performance of this Agreement shall be
governed by the laws of the State of Indiana, except as otherwise required by
mandatory operation of federal law.
 
6.  No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by Gatton
and the Bank. 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
dissimilar provisions or conditions at the same or any prior subsequent time. No
agreements or representation, 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.
 
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7.  The invalidity or unenforceability of any provisions of this Agreement shall
not affect the validity or enforceability of any other provisions of this
Agreement which shall remain in full force and effect.
 
8.  This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same agreement.
 
9.  This Agreement is personal in nature and neither party hereto shall, without
consent of the other, assign or transfer this Agreement or any rights or
obligations hereunder.
 
10.  This Agreement may not be amended except in a writing executed by the
parties hereto.
 
11.  Gatton acknowledges that the Employment Agreement has terminated and is
without further force and effect. The only other agreement relating to Gatton’s
benefits from the Bank that remains in effect, other than this Agreement, is the
Salary Continuation Agreement, as amended by this Agreement.
 
In Witness Whereof, the parties have caused the Agreement to be executed and
delivered as of October 26, 2006.
 

   
FIRST SAVINGS BANK, A FEDERAL
SAVINGS BANK
             
By:
/s/ Jeffrey H. Gatton
   
Jeffrey H. Gatton, President and CEO
         
the “Bank”
         
/s/ G. Richard Gatton
   
G. Richard Gatton
         
“Gatton”

 
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Payments Begin 11-01-07
 
Schedule A
Retired Benefits Agreement
G. Richard Gatton
G. Richard Gatton
Salary Continuation Agreement
3% Per Year Increase - Change November 1st Each Year
 
YEAR
 
Effective
11/1/2007
Annual
 
Monthly
 
Per
Pay
(26)
 
2007
15000.00
1250.00
576.92
2008
15450.00
1287.50
594.23
2009
15914.00
1326.17
612.08
2010
16391.00
1365.92
630.42
2011
16883.00
1406.92
649.35
2012
17389.00
1449.08
668.81
2013
17911.00
1492.58
688.88
2014
18448.00
1537.33
709.54
2015
19002.00
1583.50
730.85
2016
19572.00
1631.00
752.77
2017
20159.00
1679.92
775.35
2018
20764.00
1730.33
798.62
2019
21386.00
1782.17
822.54
2020
22028.00
1835.67
847.23
2021
22689.00
1890.75
872.65