**Exhibit10.1**

 

**CHANGEIN CONTROL AGREEMENT**

 

THIS AGREEMENT(“Agreement”) made as of the             dayof                    ,2003, by and among **Peoples First, Inc.**, a Pennsylvaniabusiness corporation (“Peoples First”), **The Peoples Bank of Oxford**, a Pennsylvaniabanking institution (the “Bank”), and                                                                                                                 ,an individual (the “Employee”).

 

WI T N E S S E T H:

 

WHEREAS, theEmployee will initially be serving as                                                                                                                                                                                                                                                                                                    ;and

 

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

 

WHEREAS, PeoplesFirst and the Bank desire to induce the Employee to remain in the employ ofhis/her then employer (whether it be Peoples First or any company affiliatedwith Peoples First (the “Employer”)) on an impartial and objective basis in theevent of a proposed transaction pursuant to which a Change in Control (asdefined 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.

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## (a)  InGeneral.   Except as otherwiseprovided herein, the term of this Agreement will be for a period commencing onthe 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 RenewalDate”) for a period of one (1) additional year from the applicable AnnualRenewal Date unless either the Executive or his/her employer gives writtennotice of nonrenewal of this Agreement to the other at least sixty (60) daysprior to an Annual Renewal Date (in which case this Agreement will expire onthe Annual Renewal Date immediately following such notice).

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## (b)  Terminationfor Cause.   Notwithstanding theprovisions of Section 1(a), this Agreement will terminate automaticallyupon Termination for Cause of the Employee’s employment by his/herEmployer.  As used in this Agreement,the term “Termination for Cause” means:

 

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### (i)  prior to the public announcement of atransaction involving an actual or potential Change in Control, termination forany reason; and

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### (ii)  concurrent with or following the publicannouncement of a transaction involving an actual or potential Change inControl, termination following (A) except if attributable to physical or mentalillness or injury, the willful failure of the Employee to perform his/herduties, but only after written demand, and, if the termination is before theactual occurrence of a Change in Control, only after a vote of at leasttwo-thirds of Peoples First’s directors then in office, (B) the commissionof any act of dishonesty against Peoples First or any company affiliated withPeoples First, or against an employee or customer of Peoples First or any suchaffiliate, (C) an intentional material violation by the Employee of anyapplicable code of conduct or similar policy applicable to Employees of theEmployee’s Employer, (D) the conviction of the Employee of, or plea ofnolo contendere to, a felony or a crime of moral turpitude, (E) theremoval or prohibition of the Employee from being an institution-affiliatedparty by a final order of an appropriate federal banking agency pursuant toSection 8(e) of the Federal Deposit Insurance Act or any other provisionof applicable law, or (F) the Employee’s refusal to accept a ReasonableJob Offer (as defined in Section 1(e)).

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

 

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

 

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

 

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

 

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## (d)  Disability.  Notwithstanding the provisions ofSection 1(a), this Agreement will terminate automatically upon thetermination of the Employee’s employment by reason of his/her Disability.  In such event, the Employee’s rights underthis Agreement will cease as of the effective date of such termination;provided, however, that if the Employee becomes disabled after a Notice ofTermination 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, suchthat the Employee is rendered unable to perform the essential duties requiredof him/her by his/her then position with the Employer, notwithstandingreasonable accommodation, for a period of six (6) consecutive months.

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

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# 2.                    Termination Following a Change in Control.

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## (a)  EventsGiving Right To Terminate For Good Reason. If a public announcement of a transaction involving an actual orpotential Change in Control occurs and, concurrently therewith or during aperiod of eighteen (18) months thereafter, an event constituting Good Reasonalso occurs with respect to the Employee, he/she may terminate his/heremployment in accordance with the provisions of Section 2(b) and,thereupon, will become entitled to the payments described inSection 3.  As used in thisAgreement, the term “Good Reason” means any of the following events:

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### (i)  the involuntary termination of theEmployee’s employment, other than an involuntary termination permitted inSections 1(b) and (d);

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### (ii)  a reduction in the Employee’s basecompensation below a level that was in effect immediately prior to the publicannouncement;

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### (iii)  the failure to provide the Employee with atotal compensation package (salary, welfare and pension benefits, stock optionsand a bonus plan evaluated on the basis of bonus potential) reasonablycomparable to the compensation package provided to the Employee immediatelyprior to the public announcement;

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

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

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## (b)  Noticeof Termination.  Upon the occurrenceof 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 fromemployment by a notice in writing (“Notice of Termination”) delivered toPeoples First, whereupon he/she will become entitled to the payments andbenefits described in Section 3. In the case of a termination described in Clause (i) ofSection 2(a), the Employee shall confirm his/her involuntary termination,in writing, within ninety (90) days of the date of such termination, and suchconfirmation will be deemed a Notice of Termination.

 

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

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### (i)  any “person” (as such term is used inSections 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, oran employee benefit plan of Peoples First or a subsidiary of Peoples First(including a related trust), becomes the beneficial owner (as determinedpursuant to Rule 13d-3 under the Exchange Act), directly or indirectly ofsecurities of Peoples First representing more than 19.9% of (A) thecombined voting power of Peoples First’s then outstanding stock and securitiesor (B)  the aggregate number of shares of Peoples First’s then outstandingcommon stock;

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### (ii)  the occurrence of a sale of all orsubstantially all of the assets of Peoples First or the Bank to an entity whichis not a direct or indirect subsidiary of Peoples First;

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### (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 consummationof any such transaction initially thereafter own securities representing atleast a majority of the voting power of the surviving or resulting corporation,and (B) the directors of Peoples First immediately prior to theconsummation of such transaction initially thereafter represent at least amajority of the directors of the surviving or resulting corporation;

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### (iv)  a plan of liquidation or dissolution, otherthan pursuant to bankruptcy or insolvency, is adopted for Peoples First or theBank;

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

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

 

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

 

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

 

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## however, that the rightsassociated with any termination of employment or the giving of a Notice ofTermination during the interim period shall be determined without regard tothis subsection.

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

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## (a)  BasicPayments.  The Employee shallreceive a continuation of payments of his/her base salary plus bonus (with theper pay bonus amount equal to the highest of the last two years’ bonus dividedby the number of pay periods in a calendar year), at the salary amount ineffect on the day immediately preceding the Change in Control (or as the samemay be increased following a Change in Control), for a period of either(a) eighteen (18) months in the event of a Change in Controloccurring prior to January 1, 2005 or (b) twenty-four (24) months inthe event of a Change in Control occurring on or after January 1,2005.  Payments under thisSection 3(a) shall be made monthly in equal installments beginning on thefirst day of the month immediately following the month in which Employeedelivers the Notice of Termination and continuing on the first day of eachmonth thereafter.

 

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

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## (c)  ExciseTax Matters.  Notwithstandinganything in this section or elsewhere in this Agreement to the contrary, in theevent the payments and benefits payable hereunder to or on behalf of theEmployee, when added to all other amounts and benefits payable to or on behalfof the Employee, would result in the imposition of an excise tax underSection 4999 of the Internal Revenue Code of 1986, as amended, the amountsand benefits payable hereunder shall be reduced to such extent as may benecessary to avoid such imposition.  TheEmployee shall have the right, within thirty (30) days of receipt of writtennotice from Peoples First, to specify which amounts and benefits shall be reducedto satisfy the requirements of this subsection.  All calculations required to be made under this subsection willbe made by Peoples First’s independent public accountants, subject to the rightof Employee’s representative to review the same.  The parties recognize that the actual implementation of theprovisions of this subsection are complex and agree to deal with each other ingood faith to resolve any questions or disagreements arising hereunder.

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

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

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# 5.                    Notices.  Any notice required or permittedto be given under this Agreement will, to be effective hereunder, be given toPeoples First, in the case of notices given by the Employee.  Any such notice will be deemed properlygiven if in writing and if mailed by registered or certified mail, postage prepaidwith return receipt requested, to the last known residence address of theEmployee, in the case of notices to the Employee, and to the principal officeof Peoples First, in the case of notices to Peoples First.

 

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# 6.                    Waiver.  No provision of this Agreementmay be modified, waived, or discharged unless such waiver, modification, ordischarge is agreed to in writing and signed by the Employee and an Employeeofficer of Peoples First designated for such purpose by the Board of Directorsof Peoples First.  No waiver by anyparty hereto at any time of any breach by another party hereto of, orcompliance with, any condition or provision of this Agreement to be performedby such other party will be deemed a waiver of similar or dissimilar provisionsor conditions at the same or at any prior or subsequent time.

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# 7.                    Assignment.  This Agreement is not assignableby any party hereto, except by Peoples First and the Bank to any successor ininterest to the respective businesses of Peoples First and the Bank.

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# 8.                    Entire Agreement.  This Agreement contains theentire agreement of the parties relating to the subject matter hereof and, inaccordance with the provisions of Section 18, supersedes any prioragreement of the parties.

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# 9.                    Successors; Binding Effect.

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## (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 Firstand/or the Bank to expressly assume and agree to perform this Agreement (orcause it to be performed) in the same manner and to the same extent thatPeoples First, the Bank or any affiliated company of either would be requiredto perform it if no such succession had taken place.  Failure by Peoples First to obtain such assumption and agreementprior to the effectiveness of any such succession shall constitute a materialbreach of this Agreement under Section 2(a)(v).  As used in this Agreement, “Peoples First” and the “Bank” meansPeoples First and the Bank as hereinbefore defined and any successor to thebusiness and/or assets of Peoples First and/or the Bank as aforesaid whichassumes and agrees to perform this Agreement by operation of law, or otherwise.

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## (b)  BindingEffect.  This Agreement shall inureto the benefit of and be enforceable by the Employee’s personal or legalrepresentatives, executors, administrators, heirs, distributees, devisees, andlegatees.  If the Employee should diewhile any amount is payable to the Employee under this Agreement if theEmployee had continued to live, all such amounts, unless otherwise providedherein, will be paid in accordance with the terms of this Agreement to theEmployee’s surviving spouse or, if there is no such person, to the Employee’sestate.

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

 

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# 11.              Other Rights.  Except as provided inSections  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 avested participant; provided, however, that any termination payments requiredhereunder will be in lieu of any severance benefits to which he/she may beentitled under a severance plan or arrangement of Peoples First, the Bank, anaffiliate of either, or an entity which is the successor of any of them or anaffiliate thereof; and provided further, that if the benefits under any suchplan or arrangement may not legally be eliminated, then the payments hereunderwill be correspondingly reduced in such equitable manner as the Board ofDirectors of Peoples First may determine.

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# 12.              No Mitigation or Offset.  TheEmployee shall not be required to mitigate the amount of any payment or benefitprovided for in this Agreement by seeking employment or otherwise; nor shallany amounts or benefits payable or provided hereunder be reduced in the eventhe/she does secure employment.

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# 13.              Validity.  The invalidity orunenforceability of any provisions of this Agreement shall not affect thevalidity or enforceability of any other provision of this Agreement, which willremain in full force and effect.

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# 14.              Applicable Law.  Except to the extent preemptedby federal law, this Agreement shall be governed by and construed in accordancewith the laws of the Commonwealth of Pennsylvania without regard to itsconflicts of law principles.

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# 15.              Number.  Words used herein in thesingular shall be construed as being used in the plural, as the contextrequires, and viceversa.

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# 16.              Headings.  The headings of the sections andsubsections of this Agreement are for convenience only and shall not control oraffect the meaning or construction or limit the scope or intent of any of theprovisions of this Agreement.

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

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# 18.              Effective Date; Termination of Prior Agreements.  ThisAgreement shall become effective immediately upon the execution and delivery ofthe same by the parties hereto.  Uponthe execution and delivery of this Agreement, any prior agreement relating tothe subject matter hereof will be deemed automatically terminated and be of nofurther force or effect.

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# 19.              Withholding For Taxes.  Allamounts and benefits paid or provided hereunder shall be subject to withholdingfor taxes as required by law.

 

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# 20.              Nonsolicitation of Employees and Customers.  Duringthe period of time that any payments and benefits are to be provided toEmployee under Section 3, he/she shall refrain from directly or indirectlysoliciting for employment or business relationship purposes employees orcustomers of Peoples First, the Bank or any affiliate of either or anysuccessor 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 shallimmediately terminate.  Peoples First orany successor shall be entitled to recover any payments or benefits madefollowing the commencement of the prohibited conduct, but before discovery ofthe same, and may commence an action in any court of competent jurisdiction forsuch additional legal and equitable relief as it may deem necessary orappropriate to recover damages incurred by reason of such conduct and topreclude continued violation of this section.

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IN WITNESS WHEREOF, the parties have executed thisAgreement, 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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