Exhibit
10.1


 


CHANGE
IN CONTROL AGREEMENT


 


THIS AGREEMENT
(“Agreement”) made as of the
             day
of
                    ,
2003, by and among Peoples First, Inc., a Pennsylvania
business corporation (“Peoples First”), The Peoples Bank of Oxford, a Pennsylvania
banking institution (the “Bank”), and
                                                                                                                 ,
an individual (the “Employee”).


 


W
I T N E S S E T H:


 


WHEREAS, the
Employee will initially be serving as
                         
                                                                                                                                        
        
                                                                                                                           ;
and


 


WHEREAS, Peoples
First and the Bank consider the continued services of the Employee to be in the
best interest of Peoples First, the Bank, their affiliated companies and the
shareholders of Peoples First; and


 


WHEREAS, Peoples
First and the Bank desire to induce the Employee to remain in the employ of
his/her then employer (whether it be Peoples First or any company affiliated
with Peoples First (the “Employer”)) on an impartial and objective basis in the
event of a proposed transaction pursuant to which a Change in Control (as
defined in Section 2(c)) will occur, if completed.


 


NOW, THEREFORE,
the parties hereto, intending to be legally bound hereby, agree as follows:


 


1.                    Term of Agreement and Related Matters.


 


(a)  In
General.   Except as otherwise
provided herein, the term of this Agreement will be for a period commencing on
the date of this Agreement and ending on December 31, 2007; provided,
however, that this Agreement will automatically be renewed on January 1,
2008 and on January 1 of each subsequent year (each an “Annual Renewal
Date”) for a period of one (1) additional year from the applicable Annual
Renewal Date unless either the Executive or his/her employer gives written
notice of nonrenewal of this Agreement to the other at least sixty (60) days
prior to an Annual Renewal Date (in which case this Agreement will expire on
the Annual Renewal Date immediately following such notice).


 


(b)  Termination
for Cause.   Notwithstanding the
provisions of Section 1(a), this Agreement will terminate automatically
upon Termination for Cause of the Employee’s employment by his/her
Employer.  As used in this Agreement,
the term “Termination for Cause” means:


 

















 


(i)  prior to the public announcement of a
transaction involving an actual or potential Change in Control, termination for
any reason; and


 


(ii)  concurrent with or following the public
announcement of a transaction involving an actual or potential Change in
Control, termination following (A) except if attributable to physical or mental
illness or injury, the willful failure of the Employee to perform his/her
duties, but only after written demand, and, if the termination is before the
actual occurrence of a Change in Control, only after a vote of at least
two-thirds of Peoples First’s directors then in office, (B) the commission
of any act of dishonesty against Peoples First or any company affiliated with
Peoples First, or against an employee or customer of Peoples First or any such
affiliate, (C) an intentional material violation by the Employee of any
applicable code of conduct or similar policy applicable to Employees of the
Employee’s Employer, (D) the conviction of the Employee of, or plea of
nolo contendere to, a felony or a crime of moral turpitude, (E) the
removal or prohibition of the Employee from being an institution-affiliated
party by a final order of an appropriate federal banking agency pursuant to
Section 8(e) of the Federal Deposit Insurance Act or any other provision
of applicable law, or (F) the Employee’s refusal to accept a Reasonable
Job Offer (as defined in Section 1(e)).


 


If, following a public announcement described in subsection (i)
above, a proposed transaction is terminated without completion, this Agreement
shall thereafter be construed as though no such announcement had ever been
made; provided, however, that the rights associated with any termination of
employment during the interim period shall be determined by reference to
subsection (ii) above.


 


Notwithstanding the preceding provisions of this subsection, prior to
the public announcement of a transaction involving an actual or potential
Change in Control, a transfer of the Employee to a new Employer which is
Peoples First, the Bank or an affiliate of either shall not be deemed a
Termination for Cause and this Agreement shall continue in force.


 


If the Employee’s employment is terminated for Cause, his/her rights
under this Agreement will cease as of the effective date of such termination.


 


(c)  Voluntary
Termination, Retirement, or Death. 
Notwithstanding the provisions of Section 1(a), this Agreement will
terminate automatically upon the voluntary termination of the Employee’s
employment (other than in accordance with Section 2), his/her retirement
on or after age sixty-five (65) or his/her death.  In any such event, the Employee’s rights under this Agreement
will cease as of the effective date of such termination; provided, however,
that if the Employee dies after a Notice of Termination (as defined in
Section 2(b)) is delivered by him/her in accordance with such section, the
payments described in Section 3 will nonetheless be made to the person or
persons determined pursuant to Section 9(b).


 


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(d)  Disability.  Notwithstanding the provisions of
Section 1(a), this Agreement will terminate automatically upon the
termination of the Employee’s employment by reason of his/her Disability.  In such event, the Employee’s rights under
this Agreement will cease as of the effective date of such termination;
provided, however, that if the Employee becomes disabled after a Notice of
Termination is delivered by him/her in accordance with Section 2(b),
he/she will nonetheless be entitled to receive the payments described in Section 3.
 As used in this Agreement, the term
“Disability” means incapacitation, by accident, sickness or otherwise, such
that the Employee is rendered unable to perform the essential duties required
of him/her by his/her then position with the Employer, notwithstanding
reasonable accommodation, for a period of six (6) consecutive months.


 


(e)  Reasonable
Job Offer Defined.  For purposes of
this Agreement, the term “Reasonable Job Offer” means a good faith offer of
employment made or directly facilitated by Peoples First, the Bank, an
affiliate of either, an entity proposing to acquire the business of Peoples
First or the Bank, or an affiliate of such entity, which offer (i) would
not give the Employee the right to terminate employment for Good Reason under
Section 2(a)(ii), (iii) or (iv), and (ii) does not require an
employment background and skill set materially different than required for
his/her then position.


 


2.                    Termination Following a Change in Control.


 


(a)  Events
Giving Right To Terminate For Good Reason. 
If a public announcement of a transaction involving an actual or
potential Change in Control occurs and, concurrently therewith or during a
period of eighteen (18) months thereafter, an event constituting Good Reason
also occurs with respect to the Employee, he/she may terminate his/her
employment in accordance with the provisions of Section 2(b) and,
thereupon, will become entitled to the payments described in
Section 3.  As used in this
Agreement, the term “Good Reason” means any of the following events:


 


(i)  the involuntary termination of the
Employee’s employment, other than an involuntary termination permitted in
Sections 1(b) and (d);


 


(ii)  a reduction in the Employee’s base
compensation below a level that was in effect immediately prior to the public
announcement;


 


(iii)  the failure to provide the Employee with a
total compensation package (salary, welfare and pension benefits, stock options
and a bonus plan evaluated on the basis of bonus potential) reasonably
comparable to the compensation package provided to the Employee immediately
prior to the public announcement;


 


(iv)  the reassignment of the Employee to a
principal office which is more than thirty-five (35) miles from his/her primary
residence as of the date of the public announcement; and


 


(v)  any material breach of this Agreement by the
Employee’s Employer at the relevant time, coupled with the failure to cure the
same within thirty (30) days after receipt of written notice of such breach
from the Employee.


 


(b)  Notice
of Termination.  Upon the occurrence
of an event of Good Reason subject to Section 2(a), the Employee may,
within ninety (90) days of the occurrence of any such event, resign from
employment by a notice in writing (“Notice of Termination”) delivered to
Peoples First, whereupon he/she will become entitled to the payments and
benefits described in Section 3. 
In the case of a termination described in Clause (i) of
Section 2(a), the Employee shall confirm his/her involuntary termination,
in writing, within ninety (90) days of the date of such termination, and such
confirmation will be deemed a Notice of Termination.


 


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(c)  Change
in Control Defined.  As used in this
Agreement, the term “Change in Control” means any of the following:


 


(i)  any “person” (as such term is used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 (the
“Exchange Act”)), other than Peoples First, a subsidiary of Peoples First, or
an employee benefit plan of Peoples First or a subsidiary of Peoples First
(including a related trust), becomes the beneficial owner (as determined
pursuant to Rule 13d-3 under the Exchange Act), directly or indirectly of
securities of Peoples First representing more than 19.9% of (A) the
combined voting power of Peoples First’s then outstanding stock and securities
or (B)  the aggregate number of shares of Peoples First’s then outstanding
common stock;


 


(ii)  the occurrence of a sale of all or
substantially all of the assets of Peoples First or the Bank to an entity which
is not a direct or indirect subsidiary of Peoples First;


 


(iii)  the occurrence of a reorganization, merger,
consolidation or similar transaction involving Peoples First, unless
(A) the shareholders of Peoples First immediately prior to the consummation
of any such transaction initially thereafter own securities representing at
least a majority of the voting power of the surviving or resulting corporation,
and (B) the directors of Peoples First immediately prior to the
consummation of such transaction initially thereafter represent at least a
majority of the directors of the surviving or resulting corporation;


 


(iv)  a plan of liquidation or dissolution, other
than pursuant to bankruptcy or insolvency, is adopted for Peoples First or the
Bank;


 


(v)  during any period of two consecutive years,
individuals who, at the beginning of such period, constituted the Board of
Directors of Peoples First cease to constitute the majority of such Board
(unless the election of each new director was expressly or by implication
approved by a majority of the Board members who were still in office and who
were directors at the beginning of such period); and


 


(vi)  the occurrence of any other event which is
irrevocably designated as a “change in control” for purposes of this Agreement
by resolution adopted by a majority of the then non-employee directors of
Peoples First.


 


Notwithstanding
the foregoing, a Change in Control will not be deemed to have occurred if a
person becomes the beneficial owner, directly or indirectly, of stock and
securities representing more than 19.9% of the combined voting power of Peoples
First’s then outstanding stock and securities or the aggregate number of shares
of Peoples First’s then outstanding common stock solely as a result of an
acquisition by Peoples First of its stock or securities which, by reducing the
number of securities or stock outstanding, increases the proportionate number
of securities or stock beneficially owned by such person; provided, however,
that if a person becomes the beneficial owner of more than 19.9% of the
combined voting power of stock and securities or the aggregate number of shares
of common stock by reason of such acquisition and thereafter becomes the
beneficial owner, directly or indirectly, of any additional voting stock or
securities or common stock (other than by reason of a stock split, stock
dividend or similar transaction), then a Change in Control will thereupon be
deemed to have occurred.


 


(d)  Termination
of Proposed Change in Control Transaction. 
If, following a public announcement described in Subsection (a), a
proposed transaction is terminated without completion, this Agreement shall
thereafter be construed as though no such announcement had ever been made;
provided,


 


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however, that the rights
associated with any termination of employment or the giving of a Notice of
Termination during the interim period shall be determined without regard to
this subsection.


 


3.  Rights in the Event of Certain Terminations Following Change
in Control.  In the event the
Employee validly and timely delivers a Notice of Termination to Peoples First,
he/she will be entitled to receive the following payments and benefits:


 


(a)  Basic
Payments.  The Employee shall
receive a continuation of payments of his/her base salary plus bonus (with the
per pay bonus amount equal to the highest of the last two years’ bonus divided
by the number of pay periods in a calendar year), at the salary amount in
effect on the day immediately preceding the Change in Control (or as the same
may be increased following a Change in Control), for a period of either
(a) eighteen (18) months in the event of a Change in Control
occurring prior to January 1, 2005 or (b) twenty-four (24) months in
the event of a Change in Control occurring on or after January 1,
2005.  Payments under this
Section 3(a) shall be made monthly in equal installments beginning on the
first day of the month immediately following the month in which Employee
delivers the Notice of Termination and continuing on the first day of each
month thereafter.


 


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(b)  Health
and Medical Benefits.  For a period
of two (2) years from the date of termination of employment, the Employee shall
be provided, at no charge, with a continuation of health and medical benefits
substantially similar to the most favorable of such benefits provided to
him/her during the two (2) year period immediately preceding such termination.  To the extent such benefits cannot be
provided under a plan because the Employee is no longer an employee of the
Employer, a dollar amount equal to the after-tax cost (estimated in good faith
by Peoples First) of obtaining such benefits, or substantially similar
benefits, shall be paid to him/her periodically, as appropriate.


 


(c)  Excise
Tax Matters.  Notwithstanding
anything in this section or elsewhere in this Agreement to the contrary, in the
event the payments and benefits payable hereunder to or on behalf of the
Employee, when added to all other amounts and benefits payable to or on behalf
of the Employee, would result in the imposition of an excise tax under
Section 4999 of the Internal Revenue Code of 1986, as amended, the amounts
and benefits payable hereunder shall be reduced to such extent as may be
necessary to avoid such imposition.  The
Employee shall have the right, within thirty (30) days of receipt of written
notice from Peoples First, to specify which amounts and benefits shall be reduced
to satisfy the requirements of this subsection.  All calculations required to be made under this subsection will
be made by Peoples First’s independent public accountants, subject to the right
of Employee’s representative to review the same.  The parties recognize that the actual implementation of the
provisions of this subsection are complex and agree to deal with each other in
good faith to resolve any questions or disagreements arising hereunder.


 


(d)  Primary
Obligor.  The obligation to make
payments and provide benefits under this section shall primarily be those of
the Employee’s Employer as of the date of his/her termination of
employment.  In the event the Employer
is not Peoples First or the Bank, Peoples First will cause such Employer to make
required payments and provide required benefits.  To the extent Peoples First fails or is unable to do so, it shall
make such payments and provide such benefits.


 


4.                    Legal Expenses.  Peoples First will pay (or cause
to be paid) to the Employee all reasonable legal fees and expenses when incurred
by the Employee in seeking to obtain or enforce any right or benefit provided
by this Agreement, provided he/she acts in good faith with respect to issues
raised.


 


5.                    Notices.  Any notice required or permitted
to be given under this Agreement will, to be effective hereunder, be given to
Peoples First, in the case of notices given by the Employee.  Any such notice will be deemed properly
given if in writing and if mailed by registered or certified mail, postage prepaid
with return receipt requested, to the last known residence address of the
Employee, in the case of notices to the Employee, and to the principal office
of Peoples First, in the case of notices to Peoples First.


 


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6.                    Waiver.  No provision of this Agreement
may be modified, waived, or discharged unless such waiver, modification, or
discharge is agreed to in writing and signed by the Employee and an Employee
officer of Peoples First designated for such purpose by the Board of Directors
of Peoples First.  No waiver by any
party hereto at any time of any breach by another party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party will be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time.


 


7.                    Assignment.  This Agreement is not assignable
by any party hereto, except by Peoples First and the Bank to any successor in
interest to the respective businesses of Peoples First and the Bank.


 


8.                    Entire Agreement.  This Agreement contains the
entire agreement of the parties relating to the subject matter hereof and, in
accordance with the provisions of Section 18, supersedes any prior
agreement of the parties.


 


9.                    Successors; Binding Effect.


 


(a)  Successors.  Peoples First 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 Peoples First
and/or the Bank to expressly assume and agree to perform this Agreement (or
cause it to be performed) in the same manner and to the same extent that
Peoples First, the Bank or any affiliated company of either would be required
to perform it if no such succession had taken place.  Failure by Peoples First to obtain such assumption and agreement
prior to the effectiveness of any such succession shall constitute a material
breach of this Agreement under Section 2(a)(v).  As used in this Agreement, “Peoples First” and the “Bank” means
Peoples First and the Bank as hereinbefore defined and any successor to the
business and/or assets of Peoples First and/or the Bank as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.


 


(b)  Binding
Effect.  This Agreement shall inure
to the benefit of and be enforceable by the Employee’s personal or legal
representatives, executors, administrators, heirs, distributees, devisees, and
legatees.  If the Employee should die
while any amount is payable to the Employee under this Agreement if the
Employee had continued to live, all such amounts, unless otherwise provided
herein, will be paid in accordance with the terms of this Agreement to the
Employee’s surviving spouse or, if there is no such person, to the Employee’s
estate.


 


10.              Continuation of Certain Provisions.  Any
termination of the Employee’s employment under this Agreement or of this
Agreement will not affect the benefit provisions of Section 3 or 4, which
will, if relevant, survive any such termination and remain in full force and
effect in accordance with their respective terms.


 


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11.              Other Rights.  Except as provided in
Sections  3(c) and 18, nothing herein shall be construed as limiting,
restricting or eliminating any rights the Employee may have under any plan,
contract or arrangement to which he/she is a party or in which he/she is a
vested participant; provided, however, that any termination payments required
hereunder will be in lieu of any severance benefits to which he/she may be
entitled under a severance plan or arrangement of Peoples First, the Bank, an
affiliate of either, or an entity which is the successor of any of them or an
affiliate thereof; and provided further, that if the benefits under any such
plan or arrangement may not legally be eliminated, then the payments hereunder
will be correspondingly reduced in such equitable manner as the Board of
Directors of Peoples First may determine.


 


12.              No Mitigation or Offset.  The
Employee shall not be required to mitigate the amount of any payment or benefit
provided for in this Agreement by seeking employment or otherwise; nor shall
any amounts or benefits payable or provided hereunder be reduced in the event
he/she does secure employment.


 


13.              Validity.  The invalidity or
unenforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which will
remain in full force and effect.


 


14.              Applicable Law.  Except to the extent preempted
by federal law, this Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania without regard to its
conflicts of law principles.


 


15.              Number.  Words used herein in the
singular shall be construed as being used in the plural, as the context
requires, and vice  versa.


 


16.              Headings.  The headings of the sections and
subsections of this Agreement are for convenience only and shall not control or
affect the meaning or construction or limit the scope or intent of any of the
provisions of this Agreement.


 


17.              References to Entities.  All
references to Peoples First shall be deemed to include references to the Bank,
or any affiliate of either, as appropriate in the relevant context, and vice
versa; provided, however, that this section shall not be construed in a
manner that results in a determination that a transaction constitutes a Change
in Control unless such transaction is literally described in the definition of
such term.


 


18.              Effective Date; Termination of Prior Agreements.  This
Agreement shall become effective immediately upon the execution and delivery of
the same by the parties hereto.  Upon
the execution and delivery of this Agreement, any prior agreement relating to
the subject matter hereof will be deemed automatically terminated and be of no
further force or effect.


 


19.              Withholding For Taxes.  All
amounts and benefits paid or provided hereunder shall be subject to withholding
for taxes as required by law.


 


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20.              Nonsolicitation of Employees and Customers.  During
the period of time that any payments and benefits are to be provided to
Employee under Section 3, he/she shall refrain from directly or indirectly
soliciting for employment or business relationship purposes employees or
customers of Peoples First, the Bank or any affiliate of either or any
successor to either as of the date of his/her termination of employment.  In the event of a breach of this section,
the Employee’s right to payments and benefits under Sections 3 and 4 shall
immediately terminate.  Peoples First or
any successor shall be entitled to recover any payments or benefits made
following the commencement of the prohibited conduct, but before discovery of
the same, and may commence an action in any court of competent jurisdiction for
such additional legal and equitable relief as it may deem necessary or
appropriate to recover damages incurred by reason of such conduct and to
preclude continued violation of this section.


 


IN WITNESS WHEREOF, the parties have executed this
Agreement, or caused it to be executed, as of the date first above written.


 


	
   

  	
  PEOPLES
  FIRST, INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  
	
  (SEAL)

  	
  Attest:

  	
   

  	
   

  
	
   

  	
  (Assistant)
  Secretary

  
	
   

  	
   

  
	
   

  	
  (“Peoples First”)

  
	
   

  	
   

  
	
   

  	
  THE
  PEOPLES BANK OF OXFORD

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  
	
  (SEAL)

  	
  Attest:

  	
   

  	
   

  
	
   

  	
  (Assistant)
  Secretary

  
	
   

  	
   

  
	
   

  	
  (“Bank”)

  
	
  Witness:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (SEAL)

  
	
   

  	
   

  
	
   

  	
  (“Employee”)

  
								



 


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