Document:

EXHIBIT 10.2

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

FIRST CHESTER COUNTY CORPORATION

 

THE FIRST NATIONAL BANK OF CHESTER COUNTY

 

and

 

ANNA RUTH
SMITH

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Employment

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Term

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Compensation

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Position and Responsibilities

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Termination

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Indemnification

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Expenses and Automobile

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Restrictive Covenant

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Binding Effect

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Notice

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  Waiver of Breach

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  Vested Benefits

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  Savings Clause

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  Governing Law

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  Entire Agreement; Modification

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT “A”

  	
   

  	
   

  

 

i

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT made
this 18th day of September, 2008, by and between FIRST CHESTER COUNTY
CORPORATION, a Pennsylvania business corporation, and THE FIRST NATIONAL BANK
OF CHESTER COUNTY, a wholly-owned subsidiary of First Chester County
Corporation and a national banking association with its principal offices
located at 9 North High Street, West Chester, Pennsylvania (hereinafter
individually referred to as “Corporation” and “Bank” respectively, and
collectively referred to as “FNB”) and ANNA RUTH SMITH, of 464 Lancer Drive,
Columbia, Pennsylvania 17512 (hereinafter referred to as “Smith”).

 

Reference is
made to that certain Agreement and Plan of Merger, dated of even date herewith
by and among, the Corporation, the Bank and American Home Bank, National
Association (“AHB”) (the “Merger Agreement”). 
Capitalized terms that are not defined herein have the meanings given to
them in the Merger Agreement.

 

This Agreement
is being executed as an inducement to the Corporation and Bank to enter into
and to perform their respective obligations under the Merger Agreement and as a
condition to the Corporation’s and the Bank’s obligations under the Merger
Agreement.

 

Smith is
currently the President and Chief Operating Officer of AHB.  Upon consummation of the transactions
contemplated by the Merger Agreement, and pursuant to the terms thereof, Smith
is to become the President of the American Home Bank Division of FNB (the “AHB
Division”).

 

Smith’s
leadership skills and services have constituted a major factor in the
successful growth and development of AHB.

 

FNB desires to
employ and retain the experience and financial ability and services of Smith as
President of the AHB Division from the effective date hereof and to prevent any

 

 

other business in competition
with FNB from securing the benefit of her services, background and expertise in
the banking business.

 

The terms, conditions and
undertakings of this Agreement were submitted to and duly approved and
authorized by the Boards of Directors of both the Corporation and the Bank.

 

NOW, THEREFORE, in
consideration of the foregoing recitals, which are hereby incorporated by
reference, and intending to be legally bound hereby, the parties hereto agree
as follows:

 

1.                                    Employment

 

Upon
consummation of the transactions contemplated by the Merger Agreement, FNB will
employ Smith as the President of the AHB Division, and Smith hereby accepts
such employment, under and subject to the terms and conditions hereinafter set
forth.  The “Effective Date” of the
transactions contemplated by the Merger Agreement and as defined therein is
also referred to herein as the “Employment Commencement Date.”

 

2.                                    Term

 

Subject to the provisions for
termination of this Agreement provided in Paragraph 5 hereof, the term of
this Agreement shall be for a period commencing the Effective Date and ending
at 11:59 p.m. on December 31, 2010 (the “Term”).  On January 1, 2010 and on each
succeeding January 1, the Term shall be extended automatically for one
year, unless either of the following two conditions is met:  (a) FNB or Smith give written termination
notice pursuant to Section 5 hereof, or (b) FNB or Smith agree to a
mutually acceptable date on which to terminate this Agreement.

 

3.                                    Compensation

 

During the Term of this
Agreement, FNB shall pay Smith a salary (hereinafter referred to as “Compensation”)
and provide Smith with life, health and disability insurance 

 

2

 

coverage, retirement (qualified
and nonqualified) benefits, vacations, bonuses, and other benefits (hereinafter
collectively referred to as the “Benefits”), the amounts and nature of which
shall be fixed by the Boards of Directors of the Corporation and the Bank from
time to time and set forth on the attached Exhibit “A”; provided, however,
that in no event shall Smith’s Compensation be less than one hundred percent
(100%) of the Compensation set forth on Exhibit “A”, and in no event shall
Smith’s Benefits be less than or materially different from the Benefits she is
to receive as of the date of this Agreement.

 

4.                                    Position
and Responsibilities

 

(a)                                  Position
and Duties.  Smith will be employed
as the President of the AHB Division, reporting to the Managing Director of the
AHB Division, and, except as set forth in Section 5 hereof, will continue
to serve as the President of the AHB Division throughout the entire Term.  In no event shall Smith be employed by the
Corporation or the Bank during any calendar year subsequent to 2008 at a lower
position or rank and any such diminution in position or authority shall be
considered a breach of this Agreement by FNB, which breach FNB shall be
provided an opportunity to cure within thirty (30) days upon notice to FNB by
Smith.  Smith shall devote her full time
and efforts solely to the business of FNB and the AHB Division and shall
diligently, efficiently and effectively perform such duties as shall be
assigned to her, which shall consist of the general and active management of
the business of the AHB Division and such other duties of supervision and
management as are generally vested in the office of the President of a major
division or as are directed or otherwise set forth in job descriptions
established by the Boards of Directors of the Corporation or the Bank for such
offices.  Unless otherwise directed by
the Board of Directors of the Corporation or the Bank, the Chief Executive
Officer of the Corporation or the Bank, the President of the Corporation or the
Bank, or the Managing Director of the AHB Division, Smith shall have overall
responsibility for the management, profitability 

 

3

 

and performance of the AHB Division which includes, without limitation,
responsibility for ensuring the safety and soundness of FNB to the extent
impacted by the AHB Division.  Smith
shall at all times during the Term of this Agreement refrain from doing any
act, disclosing any information or making any statements to any person other
than officers of FNB which may result in the disclosure of confidential
information or adversely affect the good reputation of FNB in the community or
which might adversely affect the professional or business relationship between
FNB and any business, depositor, borrower or any other person with whom FNB is
doing business or is contemplating doing business.

 

(b)                                 Office
and Support.  FNB shall provide Smith
with an office, secretarial assistance and such other facilities and support
services as shall be suitable to Smith’s position and responsibilities as set
forth above and as may be necessary to enable Smith to perform such duties
effectively and efficiently.

 

(c)                                  Location
of Office.  In connection with Smith’s
employment by the Corporation and the Bank, Smith shall maintain her office at
3840 Hempland Road, Mountville, Pennsylvania, or at such other office as the
Board of Directors of the Corporation or the Bank may select within the
immediate vicinity of Mountville, Pennsylvania.

 

5.                                    Termination

 

(a)                                  Death.  If Smith dies during her employment
hereunder, her Compensation and Benefits hereunder shall terminate, and her
bonus (if any) shall be prorated as of the last day of the third month after
the month in which she dies.

 

(b)                                 Disability.  If Smith shall become disabled (as determined
by FNB’s insurance carrier or a physician of its choice) during the Term, then
from and after the date upon which it is determined that Smith became disabled
and until such time as Smith returns to the full time employment at FNB, she
shall not receive her Compensation and Benefits, but shall only be 

 

4

 

entitled to receive disability benefits as are provided under the
disability insurance and/or salary continuation policy covering Smith which is
maintained in force by FNB at the time such disability occurs.  FNB shall maintain a disability insurance
policy or salary continuation policy covering Smith during the entire Term, and
FNB shall not cause or suffer any termination, lapse, suspension or
modification of any of such policies or any reductions in the amounts of
coverage provided thereunder without first giving Smith at least thirty (30)
days prior written notice thereof.

 

(c)                                  For
Cause.  The Board of Directors of the
Corporation or the Bank may terminate this Agreement at any time if Smith is
convicted of a crime which is a felony or misdemeanor and that involves fraud,
dishonesty or moral turpitude, or if she breaches any material provision of
this Agreement or substantially fails to provide the services which are
required of her under the terms of this Agreement.  However, prior to terminating this Agreement
by reason of Smith’s failure to provide services hereunder or her breach of any
provision of this Agreement, the Board of Directors of the Corporation or the
Bank shall first give Smith written notice specifically identifying the manner
in which Smith has breached the terms of this Agreement and the approximate
date or dates on which such violations have occurred. Smith shall have thirty
(30) days from her receipt of such notice within which to cure or correct the
effects of such breach and to report in writing to the Boards of Directors of
the Corporation and the Bank all steps which she has taken to cure such
breach.  If Smith shall not have
corrected or cured such breach or diligently taken all steps which are
necessary to do so within the aforesaid thirty (30) day period, the Board of
Directors of the Corporation or the Bank may terminate this Agreement
immediately, upon giving Smith written notice of such termination on or after
the 31st day following the date on which notice of the breach was 

 

5

 

delivered to Smith.  If the
breach asserted by the Board of Directors of the Corporation or the Bank is,
because of its nature, incapable of being corrected or cured, then such breach
shall not be cause for termination of this Agreement unless such breach shall
be deemed to have caused FNB significant and irreparable harm in the opinion of
a simple majority of all of the members of the Board of Directors of the
Corporation or the Bank.  Any decision
rendered by the Board of Directors of the Corporation or the Bank which
reasonably determines that such breach has caused significant or irreparable
harm to FNB shall be final, binding and conclusive for purposes of this
Agreement and shall not be subject to challenge by Smith.  If such breach is not deemed to have caused
FNB significant and irreparable harm, then this Agreement may not be terminated
by reason thereof, but any future breach of a similar nature shall be cause for
immediate termination by the Board of Directors of the Corporation or the Bank
upon giving Smith written notice thereof. 
If this Agreement is terminated by FNB for cause pursuant to this
subparagraph, then FNB shall be under no obligation to provide Compensation or
Benefits to Smith following the effective date of such termination, except for
such Compensation and Benefits which have accrued and which have not been paid
or furnished as of the effective date of such termination.

 

(d)                                 Removal
Without Cause.  The Corporation or
the Bank shall have the right at any time upon written notice to Smith, to
terminate the employment of Smith hereunder. If such termination by the
Corporation or the Bank is not by reason of disability pursuant to paragraph
(b), of this Section 5 or for cause pursuant to paragraph (c) of this
Section 5, FNB shall be obligated to continue to pay the Compensation and
provide the Benefits to Smith for twelve (12) months, at the rate, times and
intervals at which such Compensation and Benefits are being paid or provided as
of the date on which FNB terminates the employment of Smith.

 

6

 

(e)                                  Breach
by FNB.  If FNB breaches any
provision of this Agreement (specifically including, but not limited to,
substantial diminution in the position and authority of Smith which has not
been cured by FNB as set forth in the preceding paragraphs), Smith may leave
the employment of FNB; however, Smith must provide written notice to FNB of any
alleged breach and FNB must have thirty (30) days to cure or correct such
breach or otherwise inform Smith that it declines to do so.  If FNB fails to cure or correct such breach,
or otherwise informs Smith that it declines to do so, Smith will be under no
obligation to perform her duties hereunder and shall have no further liability
or obligations under any provisions of this Agreement.  In such event, however, FNB shall be
obligated to continue to pay the Compensation and provide the Benefits to Smith
for twelve (12) months, at the rate, times and intervals at which such
Compensation is being paid on the date on which FNB commits a breach of this
Agreement.

 

(f)                                    By
Smith.  Smith may terminate this
Agreement effective as of December 31st of any year during the Term of
this Agreement for any reason, by giving the Boards of Directors of the
Corporation and the Bank written notice thereof on or before December 1st
of such year.  If Smith terminates this
Agreement pursuant to this subparagraph, FNB shall be under no obligation to
pay any Compensation or provide any Benefits to Smith following the effective
date of such termination, except that FNB shall remain liable to pay the
Compensation and Benefits which have accrued but which remain unpaid or
unfurnished as of the effective date of such termination.

 

(g)                                 At
End of Term.  If FNB terminates Smith’s
employment hereunder as of the end of the Term or any extension thereof, FNB
shall be obligated, as severance payments, to continue to pay the Compensation
and provide the Benefits to Smith for a period of twelve (12) 

 

7

 

months after such termination at the rates, times and intervals at
which such Compensation and Benefits are being paid or provided as of the date
on which FNB terminates the employment of Smith.  If Smith’s employment by FNB continues after
the end of the Term or any extension thereof, no severance payments will be
provided to her.

 

(h)                                 Termination
After a Change in the Ownership or Effective Control.  If Smith’s employment is terminated (i) by
the Corporation or the Bank and such termination is not by reason of death,
disability or for cause as set forth in this Section 5, (ii) or by
Smith pursuant to Section 5 of this Agreement, and such termination is
within two years after a “Change in the Ownership or Effective Control”, then
the Corporation and the Bank shall be obligated, jointly and severally, to
continue to provide Smith with the Compensation and Benefits provided for two (2) years
after such termination (in lieu of other continuation payments provided in this
Agreement).  Such Compensation and
Benefits shall be paid and provided at the rate, times and intervals at which
such compensation and benefits were paid or provided on the date of such
termination of Smith’s employment.  A
Change in the Ownership or Effective Control of the Corporation or the Bank
occurs under the terms of Treasury Regulations, Section 1.409A-3(i)(5).

 

(i)                                     Limitation
on Payments.  If there is a
determination, either made or confirmed by FNB’s outside legal counsel, that
any payment to Smith pursuant to this Agreement or otherwise would be subject
to the excise tax imposed by Section 4999 of the Code or any similar tax
imposed by federal, state or local law, Smith shall receive a payment such
that, after payment of all taxes on such amount, leaves a balance sufficient to
pay the excise or similar tax.

 

(j)                                     Compliance
with Section 409A.  Payments
made pursuant to this Agreement that are subject to the provisions of Section 409A
of the Code may be made only in 

 

8

 

compliance with that Section. 
Smith agrees to any changes in the timing of distributions or other
provisions that are necessary to assure compliance with Section 409A.

 

6.                                      Indemnification

 

FNB agrees to indemnify Smith
to the maximum extent permitted under applicable law for any liability incurred
by Smith in her capacity as an officer or director of FNB.  In such right or rights of indemnification
which Smith shall have as set forth hereunder or in the By-laws of the
Corporation or the Bank as of the date Smith’s employment hereunder is
terminated shall survive such termination.  FNB shall obtain directors’ and officers’
liability insurance with coverage relating to all acts and omissions alleged to
have occurred during the Term of this Agreement.

 

7.                                      Expenses
and Automobile

 

Smith is authorized to incur
reasonable expenses for promoting the business of FNB, including expenses for
travel, entertainment and similar items on behalf of FNB business. FNB shall
reimburse Smith for all such expenses upon the presentation by Smith, from time
to time, of an itemized account of such expenditures.  In addition, FNB shall provide Smith with an
automobile for her use during the Term.

 

8.                                      Restrictive
Covenant

 

(a)                                  During
the Term of this Agreement and for a period of one (1) year thereafter,
Smith shall not, directly or indirectly, be employed by or enter into a
consulting arrangement with or otherwise agree to perform personal services for
any other bank or financial institution, including any mortgage banking
business, doing business in Pennsylvania, New Jersey, New York, Maryland,
Delaware or in any other state in which the AHB Division generated 5% or more
of its business in the preceding twelve (12) months (the “Applicable Area”);
directly or indirectly employ or seek to employ any person employed at that
time by 

 

9

 

FNB, or otherwise encourage or entice any such person to leave such
employment, or solicit any customers or vendors of FNB on behalf of or for the
benefit of any such bank or financial institution, including any mortgage
banking business; provided, however, that if Smith terminates this Agreement by
reason of a breach of this Agreement by FNB or if Smith’s employment is
terminated for any reason other than pursuant to Sections 5(c) or 5(f) of
this Agreement, this restrictive covenant shall be null and void and Smith
shall be entitled to be employed by any bank or financial institution,
including any mortgage banking business, doing business in the Applicable Area.

 

(b)                                 Smith
covenants and agrees that at no time during the term of this Agreement, nor at
any time following any termination of employment will Smith communicate,
furnish, divulge or disclose in any manner to any person or entity any
Confidential Information (as defined in 8(c)) without the prior express written
consent of FNB.  After a termination of
employment, Smith shall not, without the prior written consent of FNB, or as
may otherwise be required by law or legal process, communicate or divulge such
Confidential Information to anyone other than FNB and its designees.

 

(c)                                  For
purposes of this Section, “Confidential Information” shall mean financial
information about FNB, contract terms with vendors and suppliers, customer and
supplier lists and data, trade secrets and such other competitively-sensitive
information to which Smith has access as a result of her positions with FNB,
except that Confidential Information shall not include any information which
was or becomes generally available to the public (i) other than as a
result of a wrongful disclosure by Smith, (ii) as a result of disclosure
by Smith during the term of this Agreement which she reasonably and in good
faith believes is required by the performance of her duties under this
Agreement, or (iii) any information compelled to be 

 

 

10

 

disclosed by applicable law or administrative regulation; provided that
Smith, to the extent not prohibited from doing so by applicable law or
administrative regulation, shall give FNB written notice of the information to
be so disclosed pursuant to clause (iii) of this sentence as far in
advance of its disclosure as is practicable.

 

(d)                                 Smith
acknowledges that monetary damages will not be an adequate remedy for FNB in
the event of a breach of this Section 8, and that it would be impossible
for FNB to measure damages in the event of such a breach.  Therefore, Smith agrees that, in addition to
other rights that FNB may have, FNB is entitled to an injunction preventing
Smith from any breach of this Section 8.

 

9.                                      Binding
Effect

 

This Agreement shall inure to
the benefit of and be binding upon FNB, its successors and assigns, including,
without limitation, any person, partnership, company or corporation which may
acquire all or substantially all of the assets or business of FNB or into which
FNB may be liquidated, consolidated, merged or otherwise combines, regardless
of the identity or form of the surviving entity, and shall inure to the benefit
of and be binding upon Smith, her heirs, and personal representatives.

 

10.                               Notice

 

Any notice required or
permitted to be given under this Agreement shall be sufficient if in writing
and if sent by registered mail, return receipt requested, correctly addressed
to Smith’s residence, in the case of Smith, or to its principal office, in the
case of FNB.  Copies of all such notices
shall simultaneously be personally delivered or sent by United States first
class, registered or certified mail, or by a nationally-recognized overnight
delivery service, to Patricia A. Gritzan, Esquire, Saul Ewing LLP, 1500 Market
Street, Centre Square West, 38th Floor, Philadelphia, PA 19102.

 

11

 

11.                               Waiver
of Breach

 

Waiver by either party of the
breach of any provision of this Agreement by the other party shall not operate
or be construed as a waiver of any subsequent breach by the other party.

 

12.                               Vested
Benefits

 

This Agreement shall not limit
or in any way affect any benefits which Smith may be entitled to receive under
any benefits in which Smith has a vested interest as of the date of this
Agreement.

 

13.                               Savings
Clause

 

Should any provision contained
herein be determined by decree or court or other judicial body to be illegal or
unenforceable, such provision shall be considered null and void and the
remainder of this Agreement shall remain in full force and effect and shall be
construed without reference to any such provision.  Nevertheless, it is the intention of the
parties hereto that any such invalid or unenforceable provision shall, if
possible, be construed and enforced in such a manner as to make the same valid
and enforceable under applicable law and consistent with the reasonable
intention of the parties as expressed in such provision.

 

14.                               Governing
Law

 

Questions pertaining to the
validity, construction and administration of this Agreement shall be determined
in accordance with the laws of the Commonwealth of Pennsylvania.

 

15.                               Entire
Agreement; Modification

 

This Agreement supersedes the
Letter dated June 9, 2008 from the Corporation to Smith, in her capacity
as President and Chief Operating Officer of AHB, and constitutes the entire
understanding and agreement between the parties hereto with regard to the
subject matter 

 

12

 

hereof, and there are no other
agreements, conditions, representations or understandings, oral or written,
expressed or implied, with regard to the subject of this Agreement.  This Agreement may be amended or modified
only by a written instrument executed by the parties hereto.

 

[REMAINDER OF THIS PAGE LEFT
BLANK INTENTIONALLY]

 

13

 

IN WITNESS WHEREOF, the parties
hereto have executed this Agreement on the day and year first above written.

 

	
  THE FIRST NATIONAL BANK OF CHESTER COUNTY

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Kevin C. Quinn

  
	
   

  	
   

  	
  Kevin C. Quinn, President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  FIRST CHESTER COUNTY CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ John A. Featherman, III

  
	
   

  	
   

  	
  John A. Featherman, III, Chairman

  
	
   

  	
   

  	
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  FIRST CHESTER COUNTY CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Anna Ruth Smith

  
	
   

  	
   

  	
  Anna Ruth Smith

  

 

14

 

Exhibit “A”

 

Anna
Ruth Smith, President, AHB Division

 

2008
Compensation and Benefits

 

	
  Annual Salary

  	
   

  	
  $195,000

  
	
   

  	
   

  	
   

  
	
  Group Medical Insurance

  	
   

  	
  AHB
  Blue Shield, until converted to Personal Choice (Family Tier)

  
	
   

  	
   

  	
   

  
	
  Group Dental Insurance

  	
   

  	
  AHB
  Dental until converted to Delta Dental (Family Tier)

  
	
   

  	
   

  	
   

  
	
  Group Vision Insurance

  	
   

  	
  AHB
  Vision Benefits of America, until converted to Vision Benefits of America
  (Family Tier)

  
	
   

  	
   

  	
   

  
	
  Retirement Savings Plan(s):

  	
   

  	
  Qualified Plan: AHB 401(k) with match of 50 cents on
  every dollar up to $3,000 per year, until converted to 401(k) Plan
  administered by Lincoln Financial Group with Bank match: of 75 cents on every
  dollar up to 5% of base earnings. Annual discretionary profit sharing
  contribution made into 401(k) account: 3% of the first $30,000 of base
  salary, 6% of earnings above $30,000.

   

  Please
  refer to IRS indexed dollar limits for 2008 for qualified and non-qualified
  plans.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Non Qualified Plan: First National Bank of Chester County
  Supplemental Benefit Retirement Plan Bank contributes 3% of annual salary
  into an interest bearing account.

   

  Please
  refer to IRS indexed dollar limits for 2008 for qualified and non-qualified
  plans.

  
	
   

  	
   

  	
   

  
	
  Group Life/AD&D Insurance

  	
   

  	
  AHB
  Group Life/ADD until converted to All group life/disability policies are
  administered by Principal Financial Group. Please refer to the group policy
  which outlines exclusions and limitations.

   

  Coverage
  3x annual salary up to a maximum of $345,000

  
	
   

  	
   

  	
   

  
	
  Supplemental Life Insurance

  	
   

  	
  As
  approved by the Board of Directors and P&C Committee

  
	
   

  	
   

  	
   

  
	
  Group Short Term Disability Insurance

  	
   

  	
  Weekly
  maximum - $2,500 (duration is 24 weeks)

  
	
   

  	
   

  	
   

  
	
  Group Long Term Disability Insurance

  	
   

  	
  Coverage
  60% of pre-disability earnings

  
	
   

  	
   

  	
   

  
	
  Executive Incentive Plan

  	
   

  	
  As
  set forth in Definitive Merger Agreement, Section 6.14

  
	
   

  	
   

  	
   

  
	
  Automobile Lease

  	
   

  	
  In
  lieu of Auto Allowance

  
	
   

  	
   

  	
   

  
	
  Paid Time Off

  	
   

  	
  Five
  weeks PTO

  

 

A-1EXHIBIT 10.3

 

SUPPORT AGREEMENT

 

	
  Board
  of Directors

  	
   

  	
  September 18, 2008              

  
	
  First
  Chester County Corporation

  	
   

  	
   

  
	
  9
  North High Street

  	
   

  	
   

  
	
  West
  Chester, PA   19381

  	
   

  	
   

  

 

RE:                              Franklin
Financial Services Corporation

Support Agreement (this “Support Agreement”)

 

Dear
Ladies and Gentlemen:

 

Reference
is made to that certain Agreement and Plan of Merger, dated of even date
herewith by and among, First Chester County Corporation (“Parent”),
First National Bank of Chester County (“Parent Bank”) and American Home
Bank, National Association (“AHB”) (the “Merger Agreement”).

 

Intending
to be legally bound hereby, Franklin Financial Services Corporation (“Franklin”),
represents, warrants, covenants and agrees as follows:

 

1.                                       Capitalized terms used herein and not otherwise defined
shall have the meanings given such terms in the Merger Agreement and the term “Franklin”
as used in this Agreement shall be deemed to include any Subsidiary (as that
term is used in the Merger Agreement), successor, assignee, transferee or
controlled business entity of Franklin.

 

2.                                       Franklin represents, warrants, covenants and agrees that
neither it nor any of its Subsidiaries or controlled business entities (i) beneficially
own, hold or control (as defined in Rule 13d-3 of the Exchange Act) shares
of Parent Common Stock as of the date of this Support Agreement; (ii) will
directly acquire any shares of Parent Common Stock prior to the Effective Date
of the Merger Agreement; and (iii) other than as provided in the
Investment Letter Agreement, dated April 26, 2001, by and between AHB
and Franklin and the Agreement, dated July 10, 2007, by and among
Franklin, AHB and certain other persons, relating to American Construction
Mortgage, Inc., hold or own, directly or indirectly, any options, warrants
or other securities convertible to the common stock of AHB or any other form of
capital stock of AHB.

 

3.                                       On the Effective Date of the Merger, the Investment Letter
Agreement, dated April 26, 2001, by and among Franklin and AHB will
terminate and became null and void.

 

4.                                       Covenants of Franklin

 

1-1

 

(a)                                  Until the earlier of (1) May 1, 2009, (2) the
date of the AHB shareholders meeting to approve the Merger Agreement, or any
adjournment thereof, if and only if the AHB shareholders do not approve the
Merger Agreement at such meeting, or (3) termination of the Merger
Agreement in accordance with its terms, Franklin shall not, without the written
consent of Parent (i) directly or indirectly sell, encumber or otherwise
transfer any of the AHB Shares owned by Franklin or cause or permit any of the
AHB Shares owned by Franklin to be sold or otherwise transferred; (ii) negotiate,
or have discussions or contact with any third party other than Parent regarding
the sale or transfer of the AHB Shares owned by Franklin; (iii) enter in
any agreement to sell, exchange or transfer any of the AHB Shares owned by
Franklin; or (iv) purchase any Parent Common Stock or AHB Common Stock.

 

(b)                                 Until the earlier of (1) May 1, 2009, (2) the
date of the AHB shareholders meeting to approve the Merger Agreement, or any
adjournment thereof, if and only if the AHB shareholders do not approve the
Merger Agreement at such meeting, or (3) the termination of the Merger
Agreement in accordance with its terms, Franklin shall not, without the written
consent of Parent, exercise, sell or assign any Warrants, options or securities
convertible into shares of AHB Common Stock owned by Franklin.

 

5.                                       Franklin  hereby  represents 
and  warrants that  Franklin or 
a Subsidiary  of Franklin owns of
record and beneficially (as defined in Rule 13d-3 under the Exchange Act),
good and valid title to all of the shares of the capital stock of AHB and
warrants to acquire shares of capital stock of AHB, shown on Exhibit A
attached hereto, free and clear of any and all mortgages, liens, encumbrances,
charges, claims, restrictions, pledges, security interests, voting trusts or
agreements, or impositions, except as otherwise disclosed on Exhibit A,
and such shares represent all of the shares, or rights to acquire shares, of
capital stock of AHB owned by Franklin. 
For purposes hereof, the shares of capital stock of AHB and the warrants
to acquire shares of capital stock of AHB set forth on Exhibit A
attached hereto, and any such shares and options hereafter acquired by AHB,
shall be referred to herein as the “Stock”.

 

6.                                       Franklin will vote, or cause to be voted, all of the Stock
in person or by proxy, (a) for approval of the Merger Agreement and the
transactions contemplated thereby at any meeting of the AHB shareholders duly
held for such purpose, and (b) against any action or proposal that is
intended, or could reasonably be expected, to impede, interfere with, delay, or
adversely affect the transactions contemplated by the Merger Agreement.

 

7.                                       Franklin will not, nor will Franklin permit any Person under
Franklin’s “control” (as defined for purposes of Rule 144 under the
Securities Act) to, deposit any of the Stock in a voting trust or subject the
Stock to any arrangement with respect to the voting of the Stock in any manner
inconsistent with this Support Agreement.

 

1-2

 

8.                                       Until the first anniversary date of the Effective Date of
the Merger Agreement, during each of the four successive three month periods
commencing on the Effective Date of the Merger, Franklin shall not, without
prior written notice to Parent (i) directly or indirectly sell, encumber
or otherwise transfer more than 30,000 of the shares of Parent Common Stock
received by Franklin in exchange for the AHB Shares owned by Franklin (the “Exchanged
Stock”) or cause or permit such number of shares of the Exchanged Stock to
be sold or otherwise transferred; or (ii) enter into any agreement to
sell, exchange or transfer more than such number of shares of the Exchanged
Stock.

 

9.                                       Irreparable damage would occur in the event any of the
provisions of this Support Agreement were not performed in accordance with the
terms hereof and, therefore, Parent shall be entitled to specific performance
of the terms hereof, in addition to any other remedy at law or equity which it
may be entitled.

 

10.                                 The execution and delivery of this Agreement by Franklin
does not, and the performance of Franklin of its obligations hereunder will
not, constitute a violation of, conflict with, result in a default (or an event
which, with notice or lapse of time or both, would result in a default) under,
or result in the creation of any lien on any of such Stock under, any contract,
commitment or agreement, to which Franklin is a party or by which Franklin is
bound.

 

11.                                 Franklin understands and acknowledges that Parent is
entering into the Merger Agreement in reliance upon Franklin’s execution,
delivery and performance of this Support Agreement.

 

	
   

  	
   

  	
  FRANKLIN FINANCIAL SERVICES 

  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
                                                  /s/ William E. Snell, Jr.

  
	
   

  	
   

  	
  By:                              William E. Snell, Jr.

  
	
   

  	
   

  	
  Title:                     President and CEO

  
	
   

  	
   

  	
   

  
	
  ACKNOWLEDGED AND AGREED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FIRST CHESTER COUNTY 

  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
                                                  /s/ John A. Featherman, III

  
	
   

  	
   

  	
  By:                              John A. Featherman, III

  
	
   

  	
   

  	
  Title:                     Chairman and Chief Executive 

  Officer

  

 

1-3

 

EXHIBIT A

 

356,708
shares of Common Stock (subject to passivity commitments made to the Federal
Reserve)

 

 

20,000
Warrants

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]