Document:

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                                                                    EXHIBIT 10.3

                        FORM OF NON-COMPETITION AGREEMENT

     This Non-Competition Agreement (this "Agreement") is made and entered into
as of the ______ day of ____________, 2004, by and among COMMUNITY BANK SYSTEM,
INC., a Delaware corporation ("CBSI"), COMMUNITY BANK, N.A., a national banking
association ("CBNA"), and __________________, an individual residing at the
address set forth on the signature page hereof (the "Subject Party").

                                   WITNESSETH:

     WHEREAS, CBSI, CBNA and First Heritage Bank, a Pennsylvania chartered bank
("First Heritage"), are parties to an Agreement and Plan of Merger, dated as of
January 6, 2004 (the "Merger Agreement"), pursuant to which CBSI is acquiring
First Heritage through the merger of First Heritage with and into CBNA;

     WHEREAS, the Subject Party is a director or significant shareholder of
First Heritage;

     WHEREAS, the Subject Party will receive substantial economic benefit from
the transactions contemplated by the Merger Agreement, and CBSI and CBNA desire
to preserve the value of the acquired business of First Heritage;

     WHEREAS, it is a condition to the obligations of CBSI and CBNA to
consummate the transactions contemplated by the Merger Agreement that the
Subject Party enter into this Agreement;

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

     1. Prohibited Activities.

          (a) Non-Competition. During the Non-Compete Period (as hereafter
defined), the Subject Party shall not Participate (as defined below) in any
entity which is engaged in the business of a banking or thrift entity,
commercial lending entity, or mortgage company and which is headquartered in
Luzerne or Lackawanna County, Pennsylvania ("Competitive Entity"). As used in
this Agreement, a person shall be deemed to "Participate" in a Competitive
Entity if that person, whether directly for himself or herself or indirectly
through an entity or business: (1) owns, manages, operates or controls (or
participates in the ownership, management, operation or control of) a
Competitive Entity or any stock or other equity interest therein, (2) is or
serves as an officer, director, employee, consultant (relating to advice
regarding the banking or mortgage industry), or partner of a Competitive Entity,
or (3) aids or assists, by providing financial support or advice pertaining to
the banking or mortgage industry, anyone in the start-up or formation of a
Competitive Entity. Nothing contained in this Agreement shall be construed to
prohibit (a) the Subject Party's ownership of less than five percent (5%) of the
outstanding shares of any class of voting capital stock of a corporation that is
publicly traded on a national securities exchange or

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the over-the-counter market, so long as the Subject Party has no active
participation of any kind in such corporation, or (b) the Subject Party's right
to continue to Participate in any pre-existing business activity that is
identified on the attached Schedule 1(a). For purposes of this Agreement, the
term "Non-Compete Period" shall mean the period beginning on the date hereof and
ending on the second (2nd) anniversary of the date of this Agreement.

          (b) Non-Solicitation. During the Non-Compete Period, the Subject Party
shall not, directly or indirectly (i) hire any employee of CBSI or any of its
subsidiaries or affiliates (collectively with CBSI, "CBSI Affiliates") who was
an employee of First Heritage on the date hereof or induce or attempt to induce
any such employee to leave the employ of the applicable CBSI Affiliate, or (ii)
induce or attempt to induce any customer, supplier or vendor with a business
relation with First Heritage on the date hereof to cease doing business with the
applicable CBSI Affiliate or make any negative statements or communications
about any of the CBSI Affiliates to any such customer, supplier and vendor.
Nothing contained in this Agreement shall prohibit the Subject Party, directly
or indirectly, from running employment advertisements directed to the general
population or to specific industries other than the banking industry or hiring
any employee who responds to such an advertisement.

          (c) Permitted Activities. Nothing contained in this Section 1 shall
prohibit the Subject Party from conducting his or her personal banking, or the
commercial banking of any entity in which the Subject Party has a significant
interest, with any bank chosen by the Subject Party.

     2. Injunctive Relief. Without limiting the right of CBSI or CBNA to pursue
all other legal and equitable rights available for violation of this Agreement,
it is agreed that other remedies cannot fully compensate CBSI or CBNA for
violation of this Agreement and CBSI and CBNA shall be entitled to injunctive
relief to prevent a violation or threatened violation thereof, without posting a
bond or proving actual damages.

     3. Acknowledgement. The Subject Party acknowledges and agrees that the
terms and provisions of this Agreement are reasonable in scope, geographical
area and duration. The Subject Party further acknowledges that the provisions
contained in this Agreement are critical to CBSI and CBNA in their decision to
enter into the Merger Agreement and consummate the transactions contemplated
thereby and that a portion of the merger consideration is being paid to the
Subject Party in consideration of such provisions. The provisions contained in
this Agreement are intended to operate independently of any employment or
consulting agreement between CBSI, CBNA and the Subject Party. As such, the
provisions herein shall survive the termination of the Subject Party's
consulting or employment relationship with CBSI or CBNA, if any, and this
Agreement shall not be adversely affected by the limitations imposed by, or the
expiration of, any covenant not to compete in any employment or consulting
agreement between the Subject Party and CBSI or CBNA.

     4. Modification. Notwithstanding the foregoing, if any term, restriction,
covenant or promise contained herein is found to be unreasonable and/or
unenforceable by a court of competent jurisdiction such term, restriction,
covenant or promise shall be deemed modified to the extent necessary to make it
enforceable by such court and, if determined by such court to be

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wholly unenforceable, shall be severed in its entirety from this Agreement as
though it never existed.

     5. Binding Effect. This Agreement shall inure to the benefit of CBSI, CBNA
and their respective successors and assigns.

     6. No Waiver. The waiver by Company of any failure on the part of Subject
Party to perform any of its obligations under this Agreement shall not be
construed as a waiver of any future continuing failure or failures.

     7. Amendment. This Agreement may only be amended or modified by a written
agreement signed by all parties.

     8. Governing Law. The Agreement shall be governed by the laws of the State
of New York.

     9. Entire Agreement. This Agreement contains the entire agreement of the
parties with respect to the subject matter of this Agreement and supersedes all
agreements and understandings between the parties concerning the subject matter,
other than any employment or consulting agreement among CBSI, CBNA and the
Subject Party. This Agreement is expressly intended to operate independently of
any other such agreements.

     10. Waiver of Jury Trial. EACH OF THE PARTIES HEREBY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING AND COUNTERCLAIMS ARISING OUT OF OR
RELATED TO THIS AGREEMENT.

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.

                                   SUBJECT PARTY:

                                   _____________________________________________
                                                     [NAME]

                                   Address:_____________________________________

                                   _____________________________________________

                                   _____________________________________________

                                   CBSI:

                                   COMMUNITY BANK SYSTEM, INC.

                                   By:__________________________________________
                                   Name:
                                   Title:

                                   CBNA:

                                   COMMUNITY BANK, N.A.

                                   By:__________________________________________
                                   Name:
                                   Title:<PAGE>

                                                                    EXHIBIT 10.4

                          FORM OF EMPLOYMENT AGREEMENT

     This sets forth the terms of the Employment Agreement between (i) COMMUNITY
BANK SYSTEM, INC., a Delaware corporation and registered bank holding company,
and COMMUNITY BANK, N.A., a national banking association, both having offices
located in Dewitt, New York (collectively, the "Employer"), and (ii) JAMES M.
O'BRIEN, an individual currently residing at Dallas, Pennsylvania ("Employee").
This Agreement shall become effective upon the closing of the merger of
Community Bank, N.A. and First Heritage Bank ("Merger").

                               W I T N E S S E T H

     IN CONSIDERATION of the promises and mutual agreements and covenants
contained herein, and other good and valuable consideration, the parties agree
as follows:

     1. Employment.

          (a) Term. Employer shall employ Employee, and Employee shall serve, on
a part-time basis as Consultant for Community Bank System, Inc. and Community
Bank, N.A. for the period that begins on the date of the closing of the Merger
and that ends on the third anniversary of the closing date of the Merger
("Period of Employment"), subject to termination as provided in paragraph 3
hereof.

          (b) Salary. From the effective date of this Agreement through the
first anniversary of the closingdate of the Merger, Employer shall pay Employee
base salary at the

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annual rate of $160,000 ("Base Salary"). Thereafter, Employer shall pay Employee
Base Salary at an annual rate of $50,000. Base Salary shall be payable in
accordance with Employer's regular payroll practices for executive employees.

     2. Duties during the Period of Employment.

          (a) Employee shall be designated as a Consultant to Employer and shall
have such responsibility, subject to the control of the authorized designee of
Employer's Board of Directors, for the discharge of such consulting and other
duties and responsibilities to Employer as may from time to time be reasonably
assigned to Employee by the authorized designee of Employer's Board of
Directors. Employee shall report to Employer's President, Pennsylvania Banking.

          (b) During the first twelve months of the Period of Employment,
Employee shall not be required to provide more than 500 hours of consulting
services pursuant to this Agreement. During each of the two remaining
twelve-month periods of the Period of Employment, Employee shall not be required
to provide more than 250 hours of consulting services pursuant to this
Agreement. Employee shall provide the consulting services at such times and at
such locations as the parties shall reasonably agree.

          (c) Employee shall devote Employee's best efforts to the affairs of
Employer, serve faithfully and to the best of Employee's ability and devote all
agreed-upon working time and attention, knowledge, experience, energy and skill
to the business of Employer.

     3. Termination. Employee's employment by Employer shall be subject to
termination as follows:

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          (a) Expiration of the Term. This Agreement shall terminate
automatically at the expiration of the Period of Employment unless the parties
enter into a written agreement extending Employee's employment, except for the
continuing obligations of the parties as specified hereunder.

          (b) Termination Upon Death. This Agreement shall terminate upon
Employee's death.

          (c) Termination for Cause. Employer may terminate Employee's
employment immediately for "cause" by written notice to Employee. For purposes
of this Agreement, a termination shall be for "cause" if the termination results
from any of the following events:

               (i) Material breach of this Agreement;

               (ii) Documented misconduct as a consultant of Employer, or any
subsidiary or affiliate of Employer for which Employee is performing services
hereunder including, but not limited to, misappropriating any funds or property
of any such company, or attempting to obtain any personal profit (x) from any
transaction to which such company is a party or (y) from any transaction with
any third party in which Employee has an interest which is adverse to the
interest of any such company, unless, in either case, Employee shall have first
obtained the written consent of the Board of Directors of Employer or Employee
should not reasonably have known of Employer's interest;

               (iii) Unreasonable neglect or refusal to perform the duties
assigned to Employee under or pursuant to this Agreement, unless cured within 60
days;

               (iv) Conviction of a crime involving moral turpitude;

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               (v) Adjudication as a bankrupt, which adjudication has not been
contested in good faith, unless bankruptcy is caused directly by Employer's
unexcused failure to perform its obligations under this Agreement;

               (vi) Documented failure to follow the reasonable, written
instructions of the Board of Directors of Employer, provided that the
instructions are consistent with this Agreement and do not require Employee to
engage in unlawful conduct; or

               (vii) Any documented intentional violation by Employee of the
rules or regulations of the Office of the Comptroller of the Currency or of any
other regulatory agency.

     Notwithstanding any other term or provision of this Agreement to the
contrary, if Employee's employment is terminated for cause, Employee shall
forfeit all rights to payments and benefits otherwise provided pursuant to this
Agreement; provided, however, that Base Salary shall be paid through the date of
termination.

          (d) Termination For Reasons Other Than Cause. If Employer terminates
Employee prior to the expiration of this Agreement for reasons other than cause,
then Employee shall be entitled to a severance benefit equal to the greater of
(i) the annual Base Salary in effect at the time of termination, payable in
equal biweekly installments over the 12-month period following Employee's
termination, or (ii) amounts of Base Salary that otherwise would have been
payable through the balance of the unexpired term of this Agreement, payable in
biweekly installments through the balance of the unexpired term of this
Agreement.

     4. Fringe Benefits.

          (a) Benefit Plans. Because of the limited number of hours Employee
will be required to provide services to Employer during the Period of
Employment, Employee

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shall not be eligible to participate as an active employee in any employee
pension benefit plans (as that term is defined under Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended), Employer-paid
group life insurance plans, medical plans, dental plans, long-term disability
plans, business travel insurance programs or other fringe benefit programs
maintained by Employer for the benefit of its employees. However, Employee will
be considered an eligible retiree under Employer's group health plan that covers
eligible retirees of Employer and will be covered under that plan as a retiree,
beginning on the first day of the Period of Employment. Participation in
Employer's group health plan for eligible retirees shall be based on, and
subject to satisfaction of, the requirements and conditions of such plan;
provided that Employee's prior service with First Heritage Bank shall be
considered service with Employer for purposes of determining Employee's
eligibility for coverage under Employer's group health plan for retirees. Except
as provided in paragraph 3(c), Employee's participation in Employer's group
health plan for eligible retirees shall not be terminated solely due to the
termination or expiration of this Agreement or the termination of Employee's
employment. Employer may require Employee to submit to an annual physical, to be
performed by a physician of his own choosing. Employee shall be reimbursed for
related expenses not covered by Employer's health insurance plan, or any other
plan in which Employee is enrolled. Employee shall not be eligible to
participate in Employer's Severance Pay Plan maintained for other employees not
covered by employment agreements.

          (b) Expenses. Upon submission to Employer of vouchers or other
required documentation, Employee shall be reimbursed for Employee's use of his
personal automobile, and for actual out-of-pocket travel and other expenses,
reasonably incurred and/or paid by Employee in connection with Employee's duties
hereunder. Reimbursable expenses

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must be submitted to the President and Chief Executive Officer of Employer, or
the President and Chief Executive Officer's designee, for review on a quarterly
basis.

          (c) Other Benefits. During the Period of Employment, Employee also
shall be entitled to Employer-paid social memberships for Employee at two
country clubs and one social club in the Dallas or Scranton/Wilkes Barre,
Pennsylvania area, subject to the approval of the President and Chief Executive
Officer of Employer. Although it is contemplated that the memberships shall be
utilized for marketing and promotion of Employer's business interests, in the
event that any part of any membership shall be treated as taxable compensation
to Employee, Employer shall reimburse Employee for any federal, state or local
income tax owed by Employee, including any such taxes owed as a result of any
reimbursement under this subparagraph, in connection with such membership.

     5. First Heritage Employment Agreement.

          (a) Employer acknowledges that Employee could have become entitled to
certain payments pursuant to the July 1, 1999 Employment Agreement between
Employee and First Heritage Bank ("First Heritage Employment Agreement") as a
result of the Merger and/or upon the occurrence of certain other events, which
payments Employee has agreed to waive in connection with the Merger and the
execution of this Agreement. In consideration of such waiver, Employer shall pay
to Employee $300,000 on the closing date of the Merger.

          (b) Employer acknowledges that Employee previously earned a right to
receive certain bonuses that would have been paid to Employee by First Heritage
Bank upon the exercise of certain stock options previously granted to Employee
by First Heritage Bank, which option bonuses Employee has agreed to waive in
connection with the Merger and the

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execution of this Agreement. In consideration of such waiver, Employer shall pay
to Employee $250,000 on the closing date of the Merger.

     6. Stock Options. Employer shall cause the Compensation Committee of the
Board of Directors of Employer to review whether Employee should be granted
shares of restricted stock and/or options to purchase shares of common stock of
Employer. Such review may be conducted pursuant to the terms of the Community
Bank System, Inc. 1994 Long-Term Incentive Compensation Program, a successor
plan, or independently, as the Compensation Committee shall determine. Reviews
shall be conducted no less frequently than annually.

     7. Withholding. Employer shall deduct and withhold from compensation and
benefits provided under this Agreement all necessary income and employment taxes
and any other similar sums required by law to be withheld.

     8. Covenants.

          (a) Confidentiality. Employee shall not, without the prior written
consent of Employer, disclose or use in any way, either during his employment by
Employer or thereafter, except to perform his services as an employee of
Employer, any confidential business or technical information or trade secret
that is not in the public domain acquired in the course of Employee's employment
by Employer. Employee acknowledges and agrees that it would be difficult to
fully compensate Employer for damages resulting from the breach or threatened
breach of the foregoing provision and, accordingly, that Employer shall be
entitled to temporary preliminary injunctions and permanent injunctions to
enforce such provision. This provision with respect to injunctive relief shall
not, however, diminish Employer's right to claim and recover damages. Employee
covenants to use his best efforts to prevent the publication or

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disclosure of any trade secret or any confidential information that is not in
the public domain concerning the business or finances of Employer or Employer's
affiliates, or any of its or their dealings, transactions or affairs which may
come to Employee's knowledge in the pursuance of his duties or employment.

          (b) No Competition. Employee's employment is subject to the condition
that during the term of his employment hereunder and for the period specified in
paragraph 8(c) below, Employee shall not, directly or indirectly, own, manage,
operate, control or participate in the ownership, management, operation or
control of, or be connected as an officer, employee, partner, director,
individual proprietor, lender, consultant or otherwise with, or have any
financial interest in, or aid or assist anyone else in the conduct of, any
entity or business (a "Competitive Operation") which competes within a 50 mile
radius of Wilkes-Barre, Pennsylvania, in the banking industry or with any other
banking or financial services business conducted by Employer or by any group,
affiliate, division or subsidiary of Employer. Employee shall keep Employer
fully advised as to any activity, interest, or investment Employee may have in
any way related to the banking industry. It is understood and agreed that, for
the purposes of the foregoing provisions of this paragraph, (i) no business
shall be deemed to be a business conducted by Employer or any group, division,
affiliate or subsidiary of Employer unless 5% or more of Employer's consolidated
gross sales or operating revenues is derived from, or 5% or more of Employer's
consolidated assets are devoted to, such business; (ii) no business conducted by
any entity by which Employee is employed or in which he is interested or with
which he is connected or associated shall be deemed competitive with any
business conducted by Employer or any group, division, affiliate or subsidiary
of Employer unless it is one from which 2% or more of its consolidated gross
sales or operating revenues is derived, or to which 2% or

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more of its consolidated assets are devoted; and (iii) no business which is
conducted by Employer at the Date of Termination and which subsequently is sold
by Employer shall, after such sale, be deemed to be a Competitive Operation
within the meaning of this paragraph. Ownership of not more than 5% of the
voting stock of any publicly held corporation shall not constitute a violation
of this paragraph.

          (c) Non-Competition Period. The "non-competition period" shall begin
on the date the first payment is made pursuant to the terms of this Agreement
and shall end on the later of (i) the date the final payment is made pursuant to
the terms of this Agreement, or (ii) the third anniversary of the closing date
of the Merger.

          (d) Termination of Payments. Upon the breach by Employee of any
covenant under this paragraph 8, Employer shall withhold all payments to
Employee and may offset immediately any and all amounts payable to Employee
under this Agreement against any damages to which Employer is legally entitled
in addition to any and all other remedies available to Employer under the law or
in equity.

     9. Notices. Any notice which may be given hereunder shall be sufficient if
in writing and mailed by overnight mail, or by certified mail, return receipt
requested, to Employee at his residence and to Employer at 5790 Widewaters
Parkway, Dewitt, New York 13214, or at such other addresses as either Employee
or Employer may, by similar notice, designate.

     10. Rules, Regulations and Policies. Employee shall abide by and comply
with all of the rules, regulations, and policies of Employer, including without
limitation Employer's policy of strict adherence to, and compliance with, any
and all requirements of the banking, securities, and antitrust laws and
regulations.

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     11. No Prior Restrictions. Employee affirms and represents that Employee is
under no obligations to any former employer or other third party which is in any
way inconsistent with, or which imposes any restriction upon, the employment of
Employee by Employer, or Employee's undertakings under this Agreement.

     12. Return of Employer's Property. After Employee has received notice of
termination or at the end of the term hereof, whichever first occurs, Employee
shall promptly return to Employer all documents and other property in his
possession belonging to Employer.

     13. Construction and Severability. The invalidity of any one or more
provisions of this Agreement or any part thereof, all of which are inserted
conditionally upon their being valid in law, shall not affect the validity of
any other provisions to this Agreement; and in the event that one or more
provisions contained herein shall be invalid, as determined by a court of
competent jurisdiction, the court shall have authority to modify such provision
in a manner that most closely reflects the intent of the parties and is valid.

     14. Governing Law. This Agreement was executed and delivered in New York
and shall be construed and governed in accordance with the laws of the State of
New York.

     15. Assignability and Successors. This Agreement may not be assigned by
Employee or Employer, except that this Agreement shall be binding upon and shall
inure to the benefit of the successor of Employer through merger or corporate
reorganization.

     16. Miscellaneous. This Agreement constitutes the entire understanding and
agreement between the parties with respect to the subject matter hereof and
shall supersede all prior understandings and agreements, including the First
Heritage Employment Agreement. Employee hereby waives all claims Employee may
have under the First Heritage Employment Agreement, including, without
limitation, claims to any payment of deferred compensation

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benefits, change of control benefits and bonuses related to the exercise of
stock options. The foregoing waiver shall not apply to the payment described in
paragraph 5 or to stock options assumed by Employer pursuant to the Agreement
and Plan of Merger between Employer and First Heritage Bank, except that the
waiver shall apply to the extent that any such option includes the right to a
bonus payment upon Employee's exercise of the option. This Agreement cannot be
amended, modified, or supplemented in any respect, except by a subsequent
written agreement entered into by the parties hereto. The services to be
performed by Employee are special and unique; it is agreed that any breach of
this Agreement by Employee shall entitle Employer (or any successor or assigns
of Employer), in addition to any other legal remedies available to it, to apply
to any court of competent jurisdiction to enjoin such breach. The provisions of
paragraph 8 hereof shall survive the termination of this Agreement.

     17. Counterparts. This Agreement may be executed in counterparts (each of
which need not be executed by each of the parties), which together shall
constitute one and the same instrument.

     18. Jurisdiction, Venue and Fees. The jurisdiction of any proceeding
between the parties arising out of, or with respect to, this Agreement shall be
in a court of competent jurisdiction in New York State, and venue shall be in
Onondaga County. Each party shall be subject to the personal jurisdiction of the
courts of New York State. If Employee is the prevailing party in a proceeding to
collect payments due pursuant to this Agreement, Employer shall reimburse
Employee for reasonable attorneys' fees incurred by Employee in connection with
such proceeding.

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     The foregoing is established by the following signatures of the parties.

                                COMMUNITY BANK SYSTEM, INC.

                                By:_____________________________________________

                                Its:____________________________________________

                                COMMUNITY BANK, N.A.

                                By:_____________________________________________

                                Its:____________________________________________

                                ________________________________________________
                                         JAMES M. O'BRIEN

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