Exhibit 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into this 27th
day of December, 2009, by and among JOHN A. FEATHERMAN, III (“Executive”) and
FIRST NATIONAL BANK OF CHESTER COUNTY, a national banking association having its
principal office in West Chester, Pennsylvania (“FNB”), TOWER BANCORP, INC., a
Pennsylvania corporation having its principal office in Harrisburg, Pennsylvania
(“Tower”), and FIRST CHESTER COUNTY CORPORATION, a Pennsylvania corporation
having its principal office in West Chester, Pennsylvania (“First Chester”).

WITNESSETH THAT:

WHEREAS, FNB is a wholly-owned subsidiary of First Chester;

WHEREAS, the Executive, First Chester and FNB are parties to that certain
Executive Employment Agreement dated as of June 27, 2008, as amended on
December 23, 2008 (as amended, the “2008 Agreement”), pursuant to which the
Executive serves as Chairman and Chief Executive Officer of First Chester and
FNB, and pursuant to which the Executive is entitled to certain benefits and
compensation following a termination of employment subsequent to a change of
control of FNB or First Chester;

WHEREAS, Tower and First Chester are parties to that certain Agreement and Plan
of Merger dated as of December 27, 2009 (the “Merger Agreement”) pursuant to
which First Chester will merge with and into Tower, with Tower as the surviving
corporation (the “Merger”);

WHEREAS, the Merger will constitute a change of control of First Chester under
the 2008 Agreement;

WHEREAS, the Executive, First Chester, FNB and Tower desire to terminate the
2008 Agreement upon the effective date of the Merger and employ the Executive as
Chairman and Chief Executive Officer of FNB and as Vice Chairman of Tower
following the completion of the Merger, all in consideration for and upon the
terms and conditions set forth in this Agreement; and

WHEREAS, this Agreement is intended to supersede and replace in its entirety the
2008 Agreement upon the effective date of the Merger.

NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements hereinafter set forth, intending to be legally bound, the parties
agree as follows:

1. Employment Responsibilities and Duties.

(a) Tower and FNB hereby agree to employ Executive and Executive hereby agrees
to serve as Chairman and Chief Executive Officer of FNB and as Vice Chairman of
Tower. The Executive shall report directly to the President and Chief Executive
Officer of Tower.

(b) Executive shall devote his full working time and best efforts to the
performance of his responsibilities and duties hereunder and to the retention of
the customer relationships to which First Chester or any of its subsidiaries has
been a party prior to the date of this Agreement and the expansion of the
customer relationships of FNB subsequent to the date of this Agreement. During
the Employment Period, Executive shall not, without the prior written consent of
the Board of Directors of Tower, render services as an employee, independent
contractor, or otherwise, whether or not compensated, to any person or entity
other than FNB or its affiliates; provided that Executive may, where involvement
in such activities does not individually or in the

 

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aggregate significantly interfere with the performance by Executive of his
duties or violate the provisions of Section 7 hereof, (i) render services to
charitable organizations, (ii) manage his personal investments, and (iii) with
the prior written permission of the Board of Directors of Tower, hold such other
directorships or part-time academic appointments or have such other business
affiliations as would otherwise be prohibited under this Section 1.

2. Term of Employment.

(a) Employment Period. The term of Executive’s employment under this Agreement
shall be the period commencing on the Effective Date of the Merger as defined in
the Merger Agreement (hereinafter, the “Commencement Date”), and continuing for
a three (3) year period (the “Employment Period”); provided, however, that the
Employment Period shall be automatically renewed one year later on the first
anniversary date of the Commencement Date (the “Renewal Date”) for a period
ending three (3) years from the Renewal Date unless either party shall give
written notice of non-renewal to the other party at least ninety (90) days prior
to the Renewal Date, in which event this Agreement shall terminate at the end of
the Employment Period. If this Agreement is renewed on the Renewal Date, it will
be automatically renewed on the first anniversary date of the Renewal Date and
each subsequent year (the “Annual Renewal Date”,) for a period ending three
(3) years from each Annual Renewal Date, unless either party gives written
notice of non-renewal to the other party at least ninety (90) days prior to the
Annual Renewal Date, in which case this Agreement will continue in effect for a
term ending two (2) years from the Annual Renewal Date immediately following
such notice.

(b) Termination for Cause. Notwithstanding the provisions of Section 2(a) of
this Agreement, this Agreement may be terminated by Tower or FNB for Cause (as
defined herein) upon written notice from the Board of Directors of Tower to
Executive. As used in this Agreement, “Cause” shall mean any of the following:

(i) Executive’s conviction of or plea of guilty or nolo contendere to a felony,
a crime of falsehood or a crime involving moral turpitude, or the actual
incarceration of Executive for a period of thirty (30) consecutive days or more;

(ii) Executive’s willful continuing failure to follow the lawful instructions of
the Board of Directors of Tower or FNB (which instructions must be consistent
with the terms of this Agreement), other than a failure resulting from
Executive’s incapacity because of physical or mental illness, continuing for a
period of at least thirty (30) days after the Executive’s receipt of written
notice of such failure and Executive’s failure to cure or correct such conduct
within such thirty (30) day period, as determined by the Board of Directors of
Tower or FNB in its sole and absolute discretion; provided, however, that Tower
or FNB may immediately terminate this Agreement for Cause in the event that the
Board of Directors of either Tower or FNB determines, in its sole and absolute
discretion, that Executive’s conduct has caused significant or irreparable harm
to Tower or FNB; or

(iii) A government regulatory agency recommends or orders in writing that Tower
or FNB terminate the employment of Executive with Tower or FNB or relieve him of
his duties as such relate to Tower or FNB.

If this Agreement is terminated for Cause, all of Executive’s rights under this
Agreement shall cease as of the effective date of such termination, except that:

(i) FNB shall pay to Executive the unpaid portion, if any, of his Annual Base
Salary through the date of termination; and

(ii) FNB shall provide to Executive such post-employment benefits, if any, as
may be provided for under the terms of the employee benefit plans of Tower and
FNB then in effect.

(c) Termination for Good Reason or No Reason. Notwithstanding the provisions of
Section 2(a) of this Agreement, this Agreement shall terminate automatically
upon Executive’s termination of employment for Good Reason. The term “Good
Reason” shall mean (i) a reduction in salary or material reduction in benefits,
including

 

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any incentive compensation plan, except in cases of a national financial
depression or emergency when such reduction has been implemented generally by
the Board of Directors of Tower for Tower’s senior management, (ii) a
reassignment which assigns full-time employment duties to Executive at a
location more than twenty-five (25) miles from FNB’s principal executive office
on the date of this Agreement, or (iii) any other material breach or default by
Tower or FNB under any term or provision of this Agreement, including any
reduction, in any material respect and without Executive’s consent, of the
authority, duties or other terms and conditions of Executive’s employment
hereunder, in all cases after notice from the Executive to Tower at any time
within thirty (30) days after the initial existence of any such condition set
forth in Section 2(c)(i)-(iii) above. In addition, the Executive shall have the
right to terminate this Agreement upon thirty (30) days notice to Tower for any
reason not set forth in Section 2(c)(i)-(iii) above; however, such resignation
shall not constitute termination for “Good Reason.”

(d) Death. Notwithstanding the provisions of Section 2(a) of this Agreement,
this Agreement shall terminate automatically upon Executive’s death and
Executive’s rights under this Agreement shall cease as of the date of such
termination, except that (i) FNB shall pay to Executive’s spouse, personal
representative, or estate the unpaid portion, if any, of his Annual Base Salary
through date of death and (ii) FNB shall provide to Executive’s dependents any
benefits due under FNB’s employee benefit plans.

(e) Disability. Executive, Tower and FNB agree that if Executive becomes
eligible for employer-provided short-term and/or long-term disability benefits,
or worker’s compensation benefits, then FNB’s obligation to pay Executive his
Annual Base Salary shall be reduced by the amount of the disability or worker’s
compensation benefits received by Executive.

Executive, Tower and FNB agree that if, in the judgment of Tower’s Board of
Directors, the Executive is unable, as a result of illness or injury, to perform
the essential functions of his position on a full-time basis with or without a
reasonable accommodation and without posing a direct threat to himself or others
for a period of six months, Tower and FNB will suffer an undue hardship in
continuing the Executive’s employment as set forth in this agreement.
Accordingly, this Agreement shall terminate at the end of the six-month period,
and all of Executive’s rights under this Agreement shall cease, with the
exception of those rights which Executive may have under FNB’s benefit plans.

3. Employment Period Compensation, Benefits and Expenses.

(a) Annual Base Salary. For services performed by Executive under this
Agreement, FNB shall pay Executive an Annual Base Salary during the Employment
Period at the rate of Three Hundred Sixty-four Thousand One Hundred Nine Dollars
($364,109) per year, minus applicable withholdings and deductions, payable at
the same times as salaries are payable to other executive employees of FNB. The
Annual Base Salary shall be reviewed annually by the Board of Directors of FNB
and the Board may, from time to time, increase Executive’s Annual Base Salary,
and any and all such increases shall be deemed to constitute amendments to this
Section 3(a) to reflect the increased amounts, effective as of the date
established for such increases by the Board. In reviewing adjustments to Annual
Base Salary, the Board of Directors shall consider relevant market data
regarding executive salaries at peer financial institutions and the performance
of Tower and FNB under the Executive’s leadership.

(b) Bonus. Executive shall be entitled to receive annual performance bonuses in
accordance with any incentive bonus programs as in effect from time to time
during the Employment Period under such terms as may be applicable to officers
of Executive’s rank employed by Tower or its affiliates. The payment of any such
bonuses will not reduce or otherwise affect any other obligation of FNB to the
Executive provided for in this Agreement.

(c) Paid Time Off. During the term of this Agreement, Executive shall be
entitled to paid time off in accordance with the policies of Tower as in effect
from time to time as may be applicable to officers of

 

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Executive’s rank employed by Tower or its affiliates; provided that Executive
shall be entitled to no less than six (6) weeks under Tower’s paid time off
program.

(d) Automobile. During the term of this Agreement, FNB shall provide the
Executive with exclusive use of an automobile mutually agreed upon by Executive
and Tower. FNB shall be responsible and shall pay for all costs associated with
the operation and maintenance of such automobile, including, without limitation,
insurance coverage, repairs, maintenance and other operating and incidental
expenses, including registration, fuel or oil.

(e) Country Club Membership Fees. FNB shall pay for Executive’s membership dues,
capital fund assessments and similar items necessary or appropriate to maintain
a membership at a country club within FNB’s market area as mutually agreed upon
by Tower and Executive.

(f) Stock Based Incentives. During the term of this Agreement, Executive shall
be entitled to such stock based incentives as may be granted from time to time
by Tower’s Board of Directors under the Tower’s stock based incentive plans and
as are consistent with the Executive’s responsibilities and performance.

(g) Employee Benefit Plans. During the term of this Agreement, Executive shall
be entitled to participate in or receive the benefits of any employee benefit
plan currently in effect at FNB, subject to the terms of said plan, until such
time that the Board of Directors authorizes a change in such benefits.

(h) Business Expenses. During the term of this Agreement, Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
him, which are properly accounted for, in accordance with the policies and
procedures established by the Board of Directors of FNB for its executive
officers.

4. Termination of Employment Following Change of Control of Tower.

(a) If a Change of Control of Tower (as defined in Section 5(b) of this
Agreement) shall occur at any time during the Employment Period and if Tower
shall for any reason terminate Executive’s employment during the Employment
Period, other than for “Cause”, within two (2) years following the Change of
Control or if Executive terminates his employment for “Good Reason” as defined
in Section 2(c) by delivering a notice in writing (the “Notice of Termination”)
to Tower within thirty (30) days following the Change of Control, which
termination shall be effective immediately upon delivery of such Notice of
Termination, then Executive shall be entitled to the payments and benefits set
forth in Section 5 below.

(b) As used in this Agreement, “Change of Control” of Tower shall mean the
occurrence of a “change in the ownership or effective control” of Tower as
determined under the terms of Treasury Regulations, Section 1.409A-3(i)(5), as
in effect from time to time.

5. Rights in Event of Change in Control of Tower.

(a) In the event that Executive is entitled to payment pursuant to Section 4(a)
above as a result of a termination following a Change of Control or termination
for “Good Reason,” Executive shall be entitled to receive the compensation and
benefits set forth below:

(i) Executive shall be paid, within twenty (20) days following termination, a
lump sum cash payment equal to 2.99 times the sum of (1) the highest Annual Base
Salary as defined in Section 3(a) during the immediately preceding three
calendar years and (2) the highest cash bonus and other cash incentive
compensation earned by him with respect to one of the three calendar years
immediately preceding the year of termination; provided, however, that in
calculating the foregoing payment, the $295,888.00 in cash payments made to
Executive in 2009 pursuant to the First Chester and/or FNB 2009 Annual Incentive
Plan and 2009 Long Term Executive Incentive Plan shall be excluded.

 

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(ii) In addition, for a period of thirty-six (36) months from the date of
termination of employment, Executive shall be permitted to continue
participation in and Tower shall maintain the same level of contribution for
Executive’s participation in Tower’s life, disability, medical/health insurance
and other health and welfare benefits in effect with respect to Executive during
the one (1) year prior to his termination of employment, or, if Tower is not
permitted by the insurance carriers to provide such benefits because Executive
is no longer an employee, a dollar amount equal to the cost to Executive of
obtaining such benefits (or substantially similar benefits).

(b) Should the total of all amounts or benefits payable under this Agreement,
together with any other payments which Executive has a right to receive under
this Agreement or otherwise from Tower, FNB, any affiliates or subsidiaries of
Tower or FNB, or any successors of any of the foregoing, result in the
imposition of an excise tax under Internal Revenue Code Section 4999 (or any
successor thereto), Executive shall be entitled to an additional “excise tax”
adjustment payment in an amount such that, after the payment of all federal and
state income and excise taxes, Executive will be in the same after-tax position
as if no excise tax had been imposed. Any payment or benefit which is required
to be included under Internal Revenue Code 280G or 4999 (or any successor
provisions thereto) for purposes of determining whether an excise tax is payable
shall be deemed a payment “made to Executive” or a payment “which Executive has
a right to receive” for purposes of this provision. Tower or FNB (or their
successor) shall be responsible for the costs of calculation of the
deductibility of payments and benefits and the excise tax by Tower’s independent
certified accountant and tax counsel and shall notify Executive of the amount of
excise tax prior to the time such excise tax is due. If at any time it is
determined that the additional “excise tax” adjustment payment previously made
to Executive was insufficient to cover the effect of the excise tax, the
gross-up payment pursuant to this provision shall be increased to make Executive
whole, including an amount to cover the payment of any penalties resulting from
any incorrect or late payment of the excise tax resulting from the prior
calculation. All such amounts required to be paid hereunder shall be paid at the
time any withholdings may be required (or, if earlier, the time Executive shall
be required to pay such amounts) under applicable law, and any additional
amounts to which Executive may be entitled shall be paid or reimbursed no later
than fifteen (15) days following confirmation of such amount by Tower’s
independent accountants; provided however, that any payments to be made under
this Section 5(b) shall in all events be made no later than the end of the
Executive’s taxable year next following the taxable year in which the Executive
remits such excise tax payments. In the event any amounts paid hereunder are
subsequently determined to be in error because estimates were required or
otherwise, the parties agree to reimburse each other to correct such error, as
appropriate, and to pay interest thereon at the applicable federal rate (as
determined under Internal Revenue Code Section 1274 for the period of time such
erroneous amount remained outstanding and unreimbursed). 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.

6. Rights in Event of Termination of Employment Absent Change in Control of
Tower. If Executive’s employment is involuntarily terminated by Tower or FNB
without Cause, or Executive’s employment is terminated by Executive for Good
Reason pursuant to Section 2(c) and a Change in Control of Tower has not
occurred, then Tower shall pay (or cause to be paid) to Executive, within twenty
(20) days following termination, a lump sum cash payment equal to the remainder
of amounts that would otherwise be payable to Executive through the then
remaining term of this Agreement paid as if the remaining unexpired term (or
remaining Employment Period) was three (3) years. The amount shall be subject to
federal, state and local tax withholdings. In addition, Executive shall be
permitted to continue participation in, and Tower shall maintain the same level
of contribution for, Executive’s participation in Tower’s life, disability,
medical/health insurance and other health and welfare benefits in effect with
respect to Executive during the one (1) year prior to his termination of
employment through the then remaining term of the Agreement as if the remaining
unexpired term (or remaining Employment Period) was three (3) years or, if Tower
cannot provide such benefits because Executive is no longer an employee, a
dollar amount equal to the cost to Executive of obtaining such benefits (or
substantially similar benefits). In addition, if permitted pursuant to the terms
of the plan, Executive shall receive additional retirement benefits to which he
would have been entitled had his employment continued through the then

 

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remaining term of the Agreement computed as if the remaining unexpired term (or
remaining Employment Period) was three (3) years. In addition, if the
Executive’s employment is terminated by Executive absent a Change in Control and
absent Good Reason, then Executive shall be entitled to the payments and
benefits provided for under this Section 6 as if the Executive had resigned for
Good Reason but with all relevant time periods being computed with reference to
the actual remaining unexpired term (or remaining Employment Period) rather than
the fixed three (3) year period provided herein.

7. Covenant Not to Compete.

(a) Executive hereby acknowledges and recognizes the highly competitive nature
of the business of Tower and FNB and accordingly agrees that, during and for the
applicable period set forth in Section 7(c) hereof, Executive shall not:

(i) enter into or be engaged (other than by Tower, FNB or any of their
subsidiaries), directly or indirectly, either for his own account or as agent,
consultant, employee, partner, officer, director, proprietor, investor (except
as an investor owning less than 5% of the stock of a publicly owned company) or
otherwise of any person, firm, corporation or enterprise engaged in (1) the
banking (including bank holding company) or financial services industry, or
(2) any other activity in which Tower, FNB or any of their subsidiaries are
engaged during the term of Executive’s employment, in Chester County,
Pennsylvania;

(ii) solicit, directly or indirectly, current or former customers of Tower, FNB
or any of their subsidiaries to divert their business from Tower, FNB or any of
their subsidiaries; or

(iii) solicit, directly or indirectly, any person who is employed by Tower, FNB
or any of their subsidiaries to leave the employ of Tower, FNB or any of their
subsidiaries.

(b) It is expressly understood and agreed that, although the parties consider
the restrictions contained in Section 7(a) hereof reasonable for the purpose of
preserving for Tower, FNB and their subsidiaries their goodwill and other
proprietary rights, if a final judicial determination is made by a court having
jurisdiction that the time or territory or any other restriction contained in
this Section 7(a) hereof is an unreasonable or otherwise unenforceable
restriction against Executive, the provisions of Section 7(a) hereof shall not
be rendered void but shall be deemed amended to apply as to such maximum time
and territory and to such other extent as such court may judicially determine or
indicate to be reasonable.

(c) The provisions of this Section 7 shall be applicable commencing on the date
of this Agreement and continuing for twelve (12) months after the effective date
of the termination of Executive’s employment; provided, however, that the
provisions of this Section 7 shall be null and void in the event that Executive
terminates this Agreement for “Good Reason” or Executive’s employment is
involuntarily terminated by Tower or FNB without “Cause” or following a Change
of Control. Notwithstanding the above provisions, if the Executive violates the
provisions of this Section 7 and Tower or FNB must seek enforcement of the
provisions of Section 7 and is successful in enforcing the provisions, either
pursuant to a settlement agreement, or pursuant to court order, the covenant not
to compete will remain in effect for one full year following the date of the
settlement agreement or court order.

(d) Executive hereby agrees that the provisions of this Section 7 are fully
assignable by Tower and FNB to any successor. Executive also acknowledges that
the terms and conditions of this Section 7 will not be affected by the
circumstances surrounding his termination of employment.

(e) The Executive acknowledges and agrees that any breach of the restrictions
set forth in this Section 7 will result in irreparable injury to Tower and FNB
for which it shall have no meaningful remedy at law, and Tower and FNB shall be
entitled to injunctive relief in order to enforce provisions hereof. Upon
obtaining any such final and nonappealable injunction, Tower and FNB shall be
entitled to pursue reimbursement from the Executive and/or the Executive’s
employer of attorney’s fees and costs reasonably incurred in obtaining such

 

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final and nonappealable injunction. In addition, Tower and FNB shall be entitled
to pursue reimbursement from the Executive and/or the Executive’s employer of
costs reasonably incurred in securing a qualified replacement for any employee
enticed away from Tower and FNB by Executive. Further, Tower and FNB shall be
entitled to set off against or obtain reimbursement from Executive of any
payments owed or made to the Executive hereunder.

8. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Executive:    John A. Featherman, III    P.O. Box 3087    West
Chester, PA 19381 If to Tower or FNB:    Tower Bancorp, Inc.    112 Market
Street    Harrisburg, PA 17101    Attn: Carl D. Lundblad, General Counsel

or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

9. Successors and Parties in Interest.

(a) This Agreement shall be binding upon and shall inure to the benefit of FNB
and Tower and their successors and assigns, including, without limitation, any
corporation which acquires, directly or indirectly, by purchase, merger,
consolidation or otherwise, all or substantially all of the business or assets
of FNB or Tower. Without limitation of the foregoing, FNB and Tower shall
require any such successor, by agreement in form and substance satisfactory to
Executive, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that it is required to be performed by FNB and
Tower. Failure to obtain such assumption and agreement shall serve as Good
Reason for termination under Section 2(c).

(b) This Agreement is binding upon and shall insure to the benefit of Executive,
his heirs and personal representatives.

10. Mitigation and Setoff.

(a) Executive shall not be required to mitigate the amount of any payment or
benefit provided for in Sections 5 or 6 above by seeking employment or
otherwise, and FNB and Tower shall not be entitled to setoff against the amount
of any payment or benefit provided for in Sections 5 or 6 above by any amounts
earned by Executive in other employment.

(b) FNB and Tower hereby waive any and all rights to setoff in respect to any
claim, debt, obligation or other liability of any kind whatsoever, against any
payment or benefit provided for in Sections 5 or 6 above.

11. Severability. If any provision of this Agreement is declared unenforceable
for any reason, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect.

12. Amendment. This Agreement may be amended or cancelled only by mutual
agreement of the parties in writing.

13. Attorney’s Fees and Costs. If any action at law or in equity is necessary to
enforce the Executive’s rights hereunder following a Change of Control of Tower,
the Executive shall be entitled to recover all such attorney’s fees, costs and
disbursements reasonably incurred by him in connection with any such suit
brought by him.

 

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14. Payment of Money Due Deceased Executive. In the event of Executive’s death,
any monies or benefits that may be due him from Tower or FNB under this
Agreement as of the date of death or thereafter shall be paid to the person
designated by him in writing for this purpose, or, in the absence of any such
designation, to his estate.

15. Limitation of Damages for Breach of Agreement. In the event of a breach of
this Agreement by either Tower, FNB or Executive, each hereby waives to the
fullest extent permitted by law the right to assert any claim against the others
for punitive or exemplary damages.

16. Law Governing. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania. In the event that
any party shall institute any suit or other legal proceeding, whether at law or
in equity, arising from or relating to this Agreement, the courts of the
Commonwealth of Pennsylvania shall have exclusive jurisdiction.

17. Entire Agreement. This Agreement supersedes any and all prior agreements,
either oral or in writing, between the parties with respect to employment of
Executive and/or payments after a Change of Control, including but not limited
to the 2008 Agreement, by and among Executive, First Chester and FNB, and this
Agreement contains all of the covenants and agreements between the parties with
respect to same.

19. Rights under Other Plans. This Agreement is not intended to reduce, restrict
or eliminate any benefit to which Executive may otherwise be entitled at the
time of his discharge or resignation under any employee benefit plan of Tower or
FNB then in effect.

20. Independent Representation. The provisions of this Agreement and their legal
effect have been fully explained to the parties by their respective, independent
counsel. Each party acknowledges that he/it has received independent legal
advice and that each fully understands the facts and has been fully informed as
to his/its legal rights and obligations. Each party accepts this Agreement as
fair and equitable, and that it is being entered into freely and voluntarily,
after having received such advice and with such knowledge.

21. Unauthorized Disclosure. During the term of his employment hereunder, or at
any later time, the Executive shall not, without the written consent of the
Board of Directors of Tower and FNB or a person authorized thereby (except as
may be required pursuant to a subpoena or other legal process), knowingly
disclose to any person, other than an employee of Tower and FNB or a person to
whom disclosure is reasonably necessary or appropriate in connection with the
performance by the executive of his duties as an executive of Tower and FNB, any
material confidential information obtained by him while in the employ Tower and
FNB with respect to any of Tower and FNB’s services, products, improvements,
formulas, designs or styles, processes, customers, methods of business or any
business practices the disclosure of which could be or will be damaging to Tower
and FNB; provided, however, that confidential information shall not include any
information known generally to the public (other than as a result of
unauthorized disclosure by Executive or any person with the assistance, consent
or direction of the Executive) or any information of a type not otherwise
considered confidential by persons engaged in the same business or a business
similar to that conducted by Tower and FNB or any information that much be
disclosed as required by law.

22. 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 Executive and an executive officer specifically designated by the Board of
Directors of Tower. No waiver by either party hereto at any time of any breach
by the other party hereto of, or compliance with, any condition or provisions of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.

23. Assignment and Counterparts. This Agreement shall not be assignable by any
party, except by FNB and Tower to any successor in interest to its business.
This Agreement may be executed in two (2) or more counterparts, each of which
shall be deemed an original and all of which shall constitute one and the same
Agreement.

 

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24. Arbitration. Tower, FNB and Executive recognize that in the event a dispute
should arise between them concerning the interpretation or implementation of
this Agreement, lengthy and expensive litigation will not afford a practical
resolution of the issues within a reasonable period of time. Consequently, each
party agrees that all disputes, disagreements and questions of interpretation
concerning this Agreement are to be submitted to resolution, in Harrisburg,
Pennsylvania, to the American Arbitration Association (the “Association”) in
accordance with the Association’s National Rules for the Resolution of
Employment Disputes or other applicable rules then in effect (“Rules’). Tower,
FNB or Executive may initiate an arbitration proceeding at any time by giving
notice to the other in accordance with the Rules. Tower, FNB and Executive may,
as a matter of right, mutually agree on the appointment of a particular
arbitrator from the Association’s pool. The arbitrator shall not be bound by the
rules of evidence and procedure of the courts of the Commonwealth of
Pennsylvania but shall be bound by the substantive law applicable to this
Agreement. The decision of the arbitrator, absent fraud, duress, incompetence or
gross and obvious error of act, shall be final and binding upon the parties and
shall be enforceable in courts of proper jurisdiction. Following written notice
of a request for arbitration, Tower, FNB and Executive shall be entitled to an
injunction restraining all further proceedings in any pending or subsequently
filed litigation concerning this Agreement, except as otherwise provided herein.

25. Headings. The section headings 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.

26. 409A Safe Harbor. The parties hereto intend that any and all post-employment
compensation under this Agreement satisfy the requirements of Section 409A of
the Internal Revenue Code of 1986, as amended, and any regulations or guidance
promulgated thereunder (“Section 409A”) or an exception or exclusion therefrom
to avoid the imposition of any accelerated or additional taxes pursuant to
Section 409A. Accordingly, notwithstanding anything in this Agreement to the
contrary, in no event shall Tower or FNB be obligated to commence payment or
distribution to the Executive of any amount that constitutes deferred
compensation within the meaning of Section 409A earlier than the earliest
permissible date under Section 409A that such amount could be paid without any
accelerated or additional taxes or interest being imposed under Section 409A.
Tower, FNB and the Executive agree that they will execute any and all amendments
to this Agreement as they mutually agree in good faith may be necessary to
ensure compliance with the distribution provisions of Section 409A and to cause
any and all amount due under this Agreement, the payment or distribution of
which is delayed pursuant to Section 409A, to be paid or distributed in a single
sum payment at the earliest permissible date under Section 409A.

27. Specified Employee Status. Notwithstanding anything in this Agreement to the
contrary, in the event Executive is determined to be a Specified Employee, as
that term is defined in Section 409A, payments to such Specified Employee under
Sections 5 or 6, other than payments qualifying as short term deferrals or an
exempt separation pay arrangement under Section 409A, shall not begin earlier
than the first day of the seventh month after the date of termination. For
purposes of the foregoing, the date upon which a determination is made as to the
Specified Employee status of the Executive, the Identification Date (as defined
in Section 409A) shall be December 31.

[SIGNATURE PAGE FOLLOWS]

 

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

 

ATTEST:     TOWER BANCORP, INC.

/s/ Carl D. Lundblad

    By:  

/s/ Andrew S. Samuel

Secretary       Chief Executive Officer ATTEST:     FIRST NATIONAL BANK OF
CHESTER COUNTY

/s/ Sheryl Vittitoe

    By:  

/s/ James M. Deitch

Chief Financial Officer       Chief Operating Officer WITNESS:     EXECUTIVE

/s/ Sheryl Vittitoe

   

/s/ John A. Featherman

ATTEST:     FIRST CHESTER COUNTY CORPORATION

/s/ Sheryl Vittitoe

    By:  

/s/ James M. Deitch

Chief Financial Officer       Chief Operating Officer

 

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AMENDMENT OF EMPLOYMENT AGREEMENT

THIS AMENDMENT dated as of September 1, 2010 (this “Amendment”) is by and among
the parties hereto and amends that certain Employment Agreement dated as of
December 27, 2009 (the “Employment Agreement”) by and among JOHN A. FEATHERMAN,
III (“Executive”), and FIRST NATIONAL BANK OF CHESTER COUNTY, a national banking
association having its principal office in West Chester, Pennsylvania (“FNB”),
TOWER BANCORP, INC., a Pennsylvania corporation having its principal office in
Harrisburg, Pennsylvania (“Tower”), and FIRST CHESTER COUNTY CORPORATION, a
Pennsylvania corporation having its principal office in West Chester,
Pennsylvania (“First Chester”).

1. Capitalized terms used and not defined herein shall be as defined in the
Employment Agreement.

2. By execution of this Amendment, Graystone Tower Bank, a wholly owned
subsidiary of Tower which will be the successor by merger of FNB upon
consummation of the merger of FNB with and into Graystone Tower Bank, joins in
and agrees to be bound by the Employment Agreement as amended by this Amendment.

3. Section 1(a) of the Employment Agreement is hereby amended to read as
follows:

(a) Tower and Graystone Tower Bank hereby agree to employ Executive and
Executive hereby agrees to serve as Chairman and Chief Executive Officer of the
division of Graystone Tower Bank operating the former FNB branch offices and
banking operations located in Chester, Delaware and Montgomery Counties (the
“FNB Market Areas”) and such additional branch offices and/or banking operations
which may be acquired and/or opened in the FNB Market Areas or other contiguous
markets (the “Division”) and as a vice chairman of Tower. Executive shall report
directly to the Chief Executive Officer of Tower. Executive’s ceasing to be
Chairman and Chief Executive Officer of the Division as a result of the
elimination of the Division after the 24-month period during which Graystone
Tower Bank is required to maintain the Division pursuant to Section 6.14(b) of
the Merger Agreement as amended shall not constitute grounds for Executive to
terminate his employment for Good Reason.

4. The Employment Agreement and this Amendment shall become effective upon the
effective date of the Merger.

5. This Amendment may be executed in two or more counterparts, each of which
shall be deemed an original and all of which shall constitute one and the same
Amendment.

[signatures follow on next page]

 

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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
executed this Amendment as of the date first above written.

 

ATTEST:     TOWER BANCORP, INC.

/s/ Carl D. Lundblad

    By:  

/s/ Andrew S. Samuel

Secretary       Chairman & CEO ATTEST:     GRAYSTONE TOWER BANK

/s/ Carl D. Lundblad

    By:  

/s/ Andrew S. Samuel

Secretary       Chairman & CEO ATTEST:     FIRST NATIONAL BANK OF CHESTER COUNTY

/s/ J. Carol Hanson

    By:  

/s/ John B. Waldron

WITNESS:     EXECUTIVE

/s/ Julia M. Ohrwaschel

   

/s/ John A. Featherman III

ATTEST:     FIRST CHESTER COUNTY CORPORATION

/s/ J. Carol Hanson

    By:  

/s/ John B. Waldron

 

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