Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT is dated as of July 15, 2005 and is between Willow
Grove Bancorp, Inc., a Pennsylvania corporation (the “Corporation”), Willow
Grove Bank, a federally chartered savings bank and a wholly owned subsidiary of
the Corporation (the “Bank”), and Donna M. Coughey (the “Executive”).

 

WITNESSETH

 

WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of January 20,
2005 (the “Merger Agreement”), between the Corporation and Chester Valley
Bancorp, Inc., a Pennsylvania corporation (“Chester Valley”), Chester Valley
shall, as of the Effective Time (as defined in the Merger Agreement), merge with
and into the Corporation, with the Corporation being the surviving entity (the
“Merger”);

 

WHEREAS, prior to the consummation of the Merger, the Corporation and Chester
Valley will respectively cause the Bank and First Financial Bank (“First
Financial”) to enter into a merger agreement providing for the merger of First
Financial with and into the Bank;

 

WHEREAS, the Corporation and the Bank (together, the “Employers”) wish to
provide for the employment by the Corporation and the Bank of the Executive as
of the Effective Time of the Merger, and the Executive wishes to serve the
Employers as of the Effective Time of the Merger, on the terms and conditions
set forth in this Agreement; and

 

WHEREAS, in order to induce the Executive to remain in the employ of the
Employers and in consideration of the Executive’s agreeing to remain in the
employ of the Employers, the parties desire to specify the severance benefits
which shall be due the Executive by the Employers in the event that her
employment with the Employers is terminated under specified circumstances;

 

NOW THEREFORE, in consideration of the mutual agreements herein contained, and
upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

 

1.                                      Definitions.  The following words and
terms shall have the meanings set forth below for the purposes of this
Agreement:

 

(A)                                  ACCRUED BENEFITS.  ACCRUED BENEFITS MEANS
(I) ALL SALARY EARNED OR ACCRUED THROUGH THE DATE THE EXECUTIVE’S EMPLOYMENT IS
TERMINATED BUT NOT YET PAID; (II) REIMBURSEMENT FOR ANY AND ALL MONIES ADVANCED
IN CONNECTION WITH THE EXECUTIVE’S EMPLOYMENT FOR REASONABLE AND NECESSARY
EXPENSES INCURRED BY THE EXECUTIVE THROUGH THE DATE THE EXECUTIVE’S EMPLOYMENT
IS TERMINATED, SUBJECT TO THE REQUIREMENTS OF SECTION 4 HEREOF AND PROVIDED THAT
SUCH EXPENSES HAVE NOT BEEN PREVIOUSLY REIMBURSED; (III) ANY BONUS EARNED BY THE
EXECUTIVE FOR A PERFORMANCE PERIOD ENDING PRIOR TO THE DATE OF TERMINATION, BUT
NOT YET PAID TO THE EXECUTIVE, UNDER ANY BONUS OR INCENTIVE COMPENSATION PLAN OR
PLANS IN WHICH THE EXECUTIVE IS A PARTICIPANT; (IV) ANY VACATION TIME ACCRUED BY
THE EXECUTIVE UNDER THIS AGREEMENT OR IN ACCORDANCE WITH THE EMPLOYERS’ POLICIES
BUT NOT YET USED OR FORFEITED; AND (V) TO THE EXTENT NOT PREVIOUSLY PAID OR
PROVIDED TO THE EXECUTIVE, ALL OTHER PAYMENTS

 

--------------------------------------------------------------------------------

 

AND BENEFITS TO WHICH THE EXECUTIVE MAY BE ENTITLED UNDER THE TERMS OF, AND AT
THE TIMES SPECIFIED IN, ANY APPLICABLE COMPENSATION OR BENEFIT PLAN, PROGRAM OR
ARRANGEMENT OF THE EMPLOYERS IN WHICH THE EXECUTIVE WAS PARTICIPATING, WITH IT
BEING UNDERSTOOD THAT THE EXECUTIVE SHALL NOT RECEIVE ANY BENEFITS PURSUANT TO
ANY SEVERANCE PLAN.

 

(b)                                 Base Salary.  “Base Salary” shall have the
meaning set forth in Section 3(a) hereof.

 

(c)                                  Cause. Termination of the Executive’s
employment for “Cause” shall mean termination because of personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of this
Agreement.

 

(d)                                 Change in Control.  “Change in Control”
shall mean the occurrence of any of the following with respect to the
Corporation and/or the Bank: (i) the acquisition of control of the Corporation
and/or the Bank as defined in 12 C.F.R. §574.4, unless a presumption of control
is successfully rebutted or unless the transaction is exempted by 12 C.F.R.
§574.3(c)(vii), or any successor to such sections; (ii) an event that would be
required to be reported in response to Item 5.01 of Form 8-K or Item 6(e) of
Schedule 14A of Regulation 14A pursuant to the Securities Exchange Act of 1934,
as amended (“Exchange Act”), or any successor thereto, whether or not any class
of securities of the Corporation and/or the Bank is registered under the
Exchange Act; (iii) any “person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Corporation and/or the Bank representing 20% or more of the combined voting
power of the Corporation’s and/or the Bank’s then outstanding securities (other
than the Corporation with respect to the Bank’s securities); or (iv) during any
period of three consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the Corporation and/or the Bank
cease for any reason to constitute at least a majority thereof unless the
election, or the nomination for election by stockholders, of each new director
was approved by a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of the period.

 

(e)                                  Code.  “Code” shall mean the Internal
Revenue Code of 1986, as amended.

 

(f)                                    Date of Termination.  “Date of
Termination” shall mean (i) if the Executive’s employment is terminated for
Cause or for Disability, the date specified in the Notice of Termination,
(ii) if the Executive’s employment is terminated due to her death, the date of
death, and (iii) if the Executive’s employment is terminated for any other
reason, the date on which a Notice of Termination is given or as specified in
such Notice.

 

(g)                                 Disability.  “Disability” shall mean
termination because of any physical or mental impairment which qualifies the
Executive for disability benefits under the applicable long-term disability plan
maintained by the Employers or any subsidiary or, if no such plan applies, which
would qualify the Executive for disability benefits under the Federal Social
Security System.

 

(h)                                 Effective Date.  The Effective Date of this
Agreement shall mean the date on which the Effective Time of the Merger, as such
terms are defined in the Merger Agreement, occurs.

 

2

--------------------------------------------------------------------------------

 

(i)                                     Good Reason.  Termination by the
Executive of the Executive’s employment for “Good Reason” shall mean termination
by the Executive within twelve (12) months following a Change in Control of the
Corporation and/or the Bank based on:

 

(i)                                     Without the Executive’s express written
consent, (A) the failure to elect or to re-elect or to appoint or to re-appoint
the Executive to the offices of President and Chief Executive Officer of the
Employers, (B) the failure to nominate the Executive as a director of the
Corporation or to elect the Executive as a director of the Bank, or (C) a
material adverse change made by the Employers in the Executive’s functions,
duties or responsibilities as President and Chief Executive Officer of the
Employers;

 

(ii)                                  Without the Executive’s express written
consent, a reduction by either of the Employers in the Executive’s Base Salary
as the same may be increased from time to time or, except to the extent
permitted by Section 3(c) hereof, a reduction in the package of fringe benefits
provided to the Executive, taken as a whole;

 

(iii)                               The principal executive office of either of
the Employers is relocated by more than 45 miles from the current principal
executive office of the Employers or, without the Executive’s express written
consent, either of the Employers require the Executive to be based anywhere
other than an area within 45 miles of the location of the Employers’ current
principal executive office, except for required travel on business of the
Employers to an extent substantially consistent with the Executive’s present
business travel obligations;

 

(iv)                              Any purported termination by either of the
Employers of the Executive’s employment for Disability which is not effected
pursuant to a Notice of Termination satisfying the requirements of paragraph (k)
below;

 

(v)                                 The failure by the Employers to obtain the
assumption of and agreement to perform this Agreement by any successor as
contemplated in Section 11 hereof; or

 

(vi)                              A material breach of this Agreement by the
Employers or any successors thereto.

 

(j)                                     IRS.  IRS shall mean the Internal
Revenue Service.

 

(k)                                  Notice of Termination.  Any purported
termination of the Executive’s employment by the Employers for any reason, or by
the Executive for any reason, including without limitation for Good Reason,
shall be communicated by written “Notice of Termination” to the other party
hereto.  For purposes of this Agreement, a “Notice of Termination” shall mean a
dated notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in

3

--------------------------------------------------------------------------------

 

reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive’s employment under the provision so indicated,
(iii) specifies a Date of Termination, which shall be not less than thirty (30)
nor more than ninety (90) days after such Notice of Termination is given, except
in the case of the Employers’ termination of Executive’s employment for Cause,
which shall be effective immediately, and except as set forth in
Section 19(a) hereof; and (iv) is given in the manner specified in Section 12
hereof.

 

(L)                                     PRE-MERGER OPTIONS.  PRE-MERGER OPTIONS
MEANS THOSE OPTIONS TO PURCHASE COMMON STOCK OF CHESTER VALLEY THAT WERE GRANTED
PRIOR TO THE DATE ON WHICH THE MERGER AGREEMENT WAS EXECUTED BY THE PARTIES
THERETO AND WHICH REMAIN UNVESTED IMMEDIATELY PRIOR TO THE EFFECTIVE DATE.

 

(m)                               Present Value.  Present Value of payments that
would otherwise be made in the future shall be determined using a discount rate
equal to the applicable federal rate prescribed under Section 1274(d) of the
Code for the month in which the Date of Termination occurs, compounded
semi-annually.

 

(n)                                 Retirement.  “Retirement” shall mean
voluntary termination by the Executive in accordance with the Employers’
retirement policies, including early retirement, generally applicable to their
salaried employees.

 

2.                                      Term of Employment.

 

(a)                                  Each of the Employers hereby employs the
Executive as President and Chief Executive Officer, and the Executive hereby
accepts said employment and agrees to render such services to the Employers on
the terms and conditions set forth in this Agreement.  The term of employment
under this Agreement shall be for three years, commencing on the Effective Date
of this Agreement and, upon approval of the Board of Directors of each of the
Employers, shall extend for an additional year on each July 1 such that at any
time the remaining term of this Agreement shall be from two to three years in
the absence of notice to the contrary.  Prior to the first July 1 following the
date of this Agreement and each July 1 thereafter, the Board of Directors of
each of the Employers shall consider and review (after taking into account all
relevant factors, including the Executive’s performance hereunder) an extension
of the term of this Agreement, and the term shall continue to extend each July 1
if the Boards of Directors approve such extension unless the Executive gives
written notice to the Employers of the Executive’s election not to extend the
term, with such written notice to be given not less than thirty (30) days prior
to any such July 1. If the Board of Directors of either of the Employers elects
not to extend the term, it shall give written notice of such decision to the
Executive not less than thirty (30) days prior to any such July 1.  If any party
gives timely notice that the term will not be extended as of any July 1, then
this Agreement shall terminate at the conclusion of its remaining term. 
References herein to the term of this Agreement shall refer both to the initial
term and successive terms.

 

(b)                                 During the term of this Agreement, the
Executive shall perform such executive services for the Employers as may be
consistent with her titles and from time to time assigned to her by the Boards
of Directors of the Employers. During the term of this Agreement, the Executive
shall devote her best efforts and her full time effort to the affairs and
business of the Employers.

 

4

--------------------------------------------------------------------------------

 

(c)                                  The Executive shall be nominated to be a
member of the Board of Directors of the Corporation, and shall be a member of
the Board of Directors of the Bank, as long as the Executive remains an employee
in good standing and/or has not violated any of the terms and provisions of this
Agreement.  Termination of employment for any reason shall be deemed to be a
resignation from the Board of Directors of the Corporation and from the Board of
Directors of the Bank.

 

3.                                      Compensation and Benefits.

 

(a)                                  Base Salary.  The Employers shall
compensate and pay the Executive for her services during the term of this
Agreement at a minimum base salary of $300,000 per year (“Base Salary”), which
may be increased from time to time in such amounts as may be determined by the
Boards of Directors of the Employers and may not be decreased without the
Executive’s express written consent.  In addition to her Base Salary, the
Executive shall be entitled to receive during the term of this Agreement such
bonus payments as may be determined by the Boards of Directors of the Employers.

 

(b)                                 Signing and Retention Bonuses.  The
Employers shall pay the Executive a signing bonus of $200,000 on the Effective
Date of this Agreement.  If the Executive is still employed by the Employers on
the one-year anniversary of the Effective Date of this Agreement, then the
Employers shall pay the Executive a retention bonus of $150,000.

 

(c)                                  Benefit Plans.  During the term of this
Agreement, the Executive shall be entitled to participate in and receive the
benefits of any pension or other retirement benefit plan, profit sharing plan,
stock option plan, employee stock ownership plan, welfare and fringe benefit
arrangements, or such other employee benefit plans, programs, policies,
benefits, arrangements and privileges given to employees and executives of the
Employers, to the extent commensurate with her then duties and responsibilities,
as fixed by the Boards of Directors of the Employers; provided, however, that in
light of the retention bonus set forth in Section 3(b) hereof, the Executive
shall not be entitled to participate in any incentive bonus plan of the
Employers prior to June 30, 2006.  The Employers shall not make any changes in
such plans, benefits or privileges which would adversely affect the Executive’s
rights or benefits thereunder, unless such change occurs pursuant to a program
applicable to all executive officers of the Employers and does not result in a
disproportionately greater adverse change in the rights of or benefits to the
Executive as compared with any other executive officer of the Employers. 
Nothing paid to the Executive under any plan or arrangement presently in effect
or made available in the future shall be deemed to be in lieu of the salary
payable to the Executive pursuant to Section 3(a) of this Agreement. 
Notwithstanding the foregoing, in the event that the Executive participates in
any employee benefit plan, program, policy or arrangement offered by Chester
Valley and/or First Financial (the “Chester Valley Plans”) that is continued
following the Effective Date, the Executive shall not be entitled to participate
in any employee benefit plan, program, policy or arrangement of the Employers
(the “Employer Plans”) that provides similar benefits until the Chester Valley
Plan is terminated, suspended or merged into the corresponding Employer Plan.

 

(d)                                 Vacation.  During the term of this
Agreement, the Executive shall be entitled to a minimum of four weeks of paid
vacation each calendar year.  The Executive shall not be entitled to accumulate
unused vacation time from one year to the next, except to the extent authorized
by the

 

5

--------------------------------------------------------------------------------

 

Employers’ vacation policies or by the Boards of Directors of the Employers. 
Accrued but unused vacation in the year of termination of employment shall be
treated as an Accrued Benefit pursuant to which the Executive shall be entitled
to payment based on the Executive’s then current Base Salary.

 

(e)                                  Executive Survivor Income Agreement.  The
Employers expressly assume and agree to perform the Executive Survivor Income
Agreement dated July 2, 2003 between the Executive and First Financial (the
“Survivor Income Agreement”) in the same manner and to the same extent that
First Financial would be required to perform the Survivor Income Agreement if no
succession had occurred; provided, however, that the parties hereto acknowledge
and agree that any payments to the Executive pursuant to the Survivor Income
Agreement will be subject to the limitations set forth in Section 19 of this
Agreement, as applicable.

 

(f)                                    SERP.  During the term of this Agreement,
the Executive will be entitled to participate in a supplemental executive
retirement plan of the Employers to be established for the Executive’s benefit,
with such plan to provide the Executive with those benefits that she would have
received under the Employers’ tax-qualified plans but for the compensation and
contribution limits contained in the Code, including but not limited to Sections
401(a)(17), 402(g) and 415 of the Code.

 

(g)                                 Club Membership.  The Employers shall
provide the Executive with membership in a dining club or other organization, as
may be agreed upon from time to time by the Boards of Directors of the
Employers.

 

(h)                                 Automobile Allowance.  The Employers shall
provide the Executive with an automobile allowance of $1,200 per month. The
Executive shall document her business use of the automobile, including mileage
and other incidental costs, and provide such documentation as may be reasonably
required by the Employers.

 

(i)                                     Service Credit.  The Employers shall
provide the Executive with credit for her years of service with First Financial
and its predecessors, to the extent reflected on the books of First Financial,
for the purpose of determining eligibility to participate in and the vesting of
benefits (but not for accrual of benefits) under each Employer Plan in which the
Executive becomes a participant.

 

(j)                                     Treatment of Pre-Merger Options.  The
parties hereto agree that the Pre-Merger Options held by the Executive shall be
converted into stock options to purchase the common stock of the Corporation in
accordance with the terms of the Merger Agreement.  The Executive agrees to
waive her right to accelerated vesting of the Pre-Merger Options as of the
Effective Time of the Merger, and the parties hereto agree that the Pre-Merger
Options shall continue to vest in the ordinary course pursuant to the existing
vesting schedule.

 

(k)                                  Proration.  The Executive’s compensation,
benefits and expenses shall be paid by the Corporation and the Bank in the same
proportion as the time and services actually expended by the Executive on behalf
of each respective Employer.

 

4.                                      Expenses.  The Employers shall reimburse
the Executive or otherwise provide for or pay for all reasonable expenses
incurred by the Executive in furtherance of or in connection with the business
of the Employers, including, but not by way of limitation, reasonable
entertainment

 

6

--------------------------------------------------------------------------------

 

expenses (whether incurred at the Executive’s residence, while traveling or
otherwise), subject to such reasonable documentation and other limitations as
may be established by the Boards of Directors of the Employers.  If such
expenses are paid in the first instance by the Executive, the Employers shall
reimburse the Executive therefor.

 

5.                                      Termination.

 

(a)                                  General.  The Employers shall have the
right, at any time upon prior Notice of Termination, to terminate the
Executive’s employment hereunder for any reason, and the Executive shall have
the right, upon prior Notice of Termination, to terminate her employment
hereunder for any reason.  Any payments to be made under Sections 5(c), 5(h) or
5(i) shall be contingent on the Executive’s prior execution and non-revocation
of a mutual release substantially in the form attached hereto as Exhibit A;
provided, however, that if the Employers refuse to execute such mutual release,
the Executive’s obligation to execute and not revoke the release as a
precondition to receiving such severance benefits shall terminate.

 

(b)                                 For Cause.  In the event that the
Executive’s employment is terminated by the Employers for Cause, the Executive
shall be entitled to any Accrued Benefits but shall have no right pursuant to
this Agreement to compensation or other benefits for any period after the
applicable Date of Termination.  In the event the Employers desire to terminate
the Executive’s employment for Cause, the Executive shall be given an
opportunity, together with counsel, to meet with the Boards of Directors of the
Employers either prior to the Date of Termination or within ten (10) days
thereafter.  A determination that Cause exists shall be made by a majority of
the Board of Directors in writing, which shall specify the basis for such
determination.  The Employers may suspend the Executive’s titles, duties and
authority pending the Executive’s meeting with the Boards of Directors, and such
suspension shall not constitute Good Reason.

 

(c)                                  Termination Within the First Year.  If the
Employers terminate the Executive’s employment hereunder for any reason other
than Cause prior to the one-year anniversary of the Effective Date, or if the
Executive terminates her employment hereunder for any reason other than death,
Disability or Retirement prior to the one-year anniversary of the Effective
Date, then the Employers shall pay to the Executive a cash lump sum equal to
$613,928.83, on or before the earlier of the thirtieth (30th) day following the
Date of Termination or the next following December 31, minus applicable
withholding taxes, and subject to reduction as set forth in Section 6(a) hereof.
The Executive shall also be entitled to receive any Accrued Benefits, and the
Employers shall provide continued life, medical and dental coverage to the
Executive and any dependents covered as of the Date of Termination for a period
of one year following the Date of Termination, with such coverage to be provided
on the same terms as similar coverage is provided to other employees of the
Employers.  In addition, the pre-Merger Options shall become immediately vested
and exercisable (to the extent not previously vested and exercisable) and shall
remain exercisable for the period provided under the applicable option
agreement.

 

(d)                                 Voluntary Termination by the Executive on or
After One Year. In the event the Executive terminates her employment hereunder
on or after the one-year anniversary of the Effective Date other than for death,
Disability, Retirement, Good Reason or an uncured material breach of this
Agreement by the Employers, then the Executive shall be entitled to any Accrued
Benefits but shall

 

7

--------------------------------------------------------------------------------

 

have no right pursuant to this Agreement to compensation or other benefits for
any period after the applicable Date of Termination.

 

(e)                                  Death.  In the event the Executive’s
employment hereunder is terminated due to death, the Executive’s estate or named
beneficiaries shall be entitled to death benefits in accordance with the terms
of the Survivor Income Agreement.  The Employers shall also (i) provide the
Executive with any Accrued Benefits, (ii) pay the Executive’s spouse one-half of
the Base Salary that would have been paid to the Executive for the then
remaining term of this Agreement but for such death, and (iii) provide the
Executive’s spouse and any dependents covered as of the Date of Termination with
continued medical and dental coverage for the then remaining term of this
Agreement but for such death, with such coverage to be provided on the same
terms as similar coverage is provided to other employees of the Employers.  In
addition, the pre-Merger Options shall become immediately vested and exercisable
(to the extent not previously vested and exercisable) and shall remain
exercisable for the period provided under the applicable option agreement.
 Other than as set forth above, neither the Executive nor her estate or named
beneficiaries shall have any right pursuant to this Agreement to compensation or
other benefits for any period after the Date of Termination.

 

(f)                                    Disability.  In the event the Executive’s
employment hereunder is terminated due to Disability, the Employers shall
(i) provide the Executive with any Accrued Benefits and (ii) provide continued
life, medical and dental coverage to the Executive and any dependents covered as
of the Date of Termination for the then remaining term of this Agreement but for
such Disability, with such coverage to be provided on the same terms as similar
coverage is provided to other employees of the Employers.  In addition, the
pre-Merger Options shall become immediately vested and exercisable (to the
extent not previously vested and exercisable) and shall remain exercisable for
the period provided under the applicable option agreement.  Other than as set
forth above, the Executive shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the Date of Termination.

 

(g)                                 Retirement.  In the event the Executive’s
employment hereunder is terminated due to Retirement, the Employers shall
(i) provide the Executive with any Accrued Benefits and (ii) provide continued
life, medical and dental coverage to the Executive and any dependents covered as
of the Date of Termination for the then remaining term of this Agreement but for
such Retirement, with such coverage to be provided on the same terms as similar
coverage is provided to other employees of the Employers.  In addition, the
pre-Merger Options shall become immediately vested and exercisable (to the
extent not previously vested and exercisable) and shall remain exercisable for
the period provided under the applicable option agreement.  Other than as set
forth above, the Executive shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the Date of Termination.

 

(h)                                 Involuntary Termination on or After One
Year.  In the event that on or after the one-year anniversary of the Effective
Date either (A) the Executive’s employment is terminated by the Employers for
other than Cause or the Executive’s Disability, Retirement or death or (B) such
employment is terminated by the Executive due to a material breach of this
Agreement by the Employers, which breach has not been cured within fifteen (15)
days after a written notice of non-compliance has been given by the Executive to
the Employers, then the Employers shall (i) provide

 

8

--------------------------------------------------------------------------------

 

the Executive with any Accrued Benefits, and (ii) pay to the Executive, within
the earlier of thirty (30) days following the Date of Termination or the next
following December 31, an amount equal to the Present Value of the Base Salary
that the Executive would have earned for the then remaining term of this
Agreement, based on the Executive’s then current Base Salary, and provide
continued life, medical and dental coverage to the Executive and any dependents
covered as of the Date of Termination for the then remaining term of this
Agreement but for such termination, with such coverage to be provided on the
same terms as similar coverage is provided to other employees of the Employers.
 In addition, the pre-Merger Options shall become immediately vested and
exercisable (to the extent not previously vested and exercisable) and shall
remain exercisable for the period provided under the applicable option
agreement.  Notwithstanding the foregoing, this Section 5(h) shall not be
applicable if the termination of employment occurs concurrently with or within
twenty-four (24) months following a Change in Control of the Corporation and/or
the Bank.

 

(i)                                     Change in Control Termination.  In the
event that on or after the one-year anniversary of the Effective Date either
(i) the Executive’s employment is terminated concurrently with or within twelve
(12) months following a Change in Control of the Corporation and/or the Bank for
other than Cause or the Executive’s Disability, Retirement or death, or (ii) the
Executive elects to terminate her employment for Good Reason, then the Employers
shall, subject to the provisions of Sections 6(b) and 7 hereof, if applicable

 

(A)                              pay to the Executive, within the earlier of
thirty (30) days following the Date of Termination or the next following
December 31, a lump sum cash severance amount equal to three (3) times the sum
of the Executive’s then current Base Salary and most recently paid bonus;

 

(B)                                provide to the Executive, her spouse and any
dependents covered as of the Date of Termination for a period ending at the
earlier of (i) three years subsequent to the Date of Termination or (ii) the
date of the Executive’s full-time employment by another employer (provided that
the Executive, her spouse and/or her dependents is entitled under the terms of
such employment to benefits substantially similar to those described in this
subparagraph (B)), at no cost to the Executive, continued participation in all
group insurance, life insurance, health and accident insurance, disability
insurance and other employee benefit plans, programs and arrangements offered by
the Employers in which the Executive, her spouse and/or her dependents were
entitled to participate immediately prior to the Date of Termination (excluding
(y) stock option plans, restricted stock plans and employee stock ownership
plans of the Employers and (z) bonuses and other items of cash compensation),
provided that in the event that the participation of the Executive, her spouse
and/or her dependents in any plan, program or arrangement as provided in this
subparagraph (B) is barred, or during such period any such plan, program or
arrangement is discontinued or the benefits thereunder are materially reduced,
the Employers shall either arrange to provide the Executive, her spouse and/or
her dependents with benefits substantially similar to those which they were
entitled to receive under such plans, programs and arrangements immediately
prior to the Date of Termination or pay a cash equivalency amount, and

 

9

--------------------------------------------------------------------------------

 

(C)                                provide the Executive with any Accrued
Benefits.

 

In addition, the pre-Merger Options shall become immediately vested and
exercisable (to the extent not previously vested and exercisable) and shall
remain exercisable for the period provided under the applicable option
agreement.

 

6.                                      Limitation of Benefits under Certain
Circumstances.

 

(a)                                  If the payments and benefits pursuant to
Section 5(c) hereof, either alone or together with other payments and benefits
which the Executive has the right to receive from the Employers, Chester Valley,
First Financial or any of their affiliates, would constitute a “parachute
payment” under Section 280G of the Code, the payments and benefits payable by
the Employers pursuant to Section 5(c) hereof shall be reduced, in the manner
determined by the Executive, by the minimum amount, if any, which is necessary
to result in no portion of the payments and benefits payable by the Employers
under Section 5(c) being non-deductible to the Employers pursuant to
Section 280G of the Code and subject to the excise tax imposed under
Section 4999 of the Code.  The determination of any reduction in the payments
and benefits to be made pursuant to Section 5(c) shall be based upon the opinion
of independent counsel selected by the Employers and paid for by the Employers. 
Such counsel shall be reasonably acceptable to the Executive; shall promptly
prepare the foregoing opinion, but in no event later than thirty (30) days from
the Date of Termination; and may use such actuaries as such counsel deems
necessary or advisable for the purpose.  Nothing contained herein shall result
in a reduction of any payments or benefits to which the Executive may be
entitled upon termination of employment under any circumstances other than as
specified in this Section 6(a), or a reduction in the payments and benefits
specified in Section 5(c) below zero.

 

(b)                                 Notwithstanding the proration provision in
Section 3(g) hereof, in the event the payments and benefits payable by the Bank
pursuant to Section 5(i) hereof, either alone or together with other payments
and benefits which the Executive has the right to receive from the Employers,
would constitute a “parachute payment” under Section 280G of the Code, then the
Bank’s share of the payments and benefits payable by the Employers pursuant to
Section 5(i) hereof shall be reduced, in the manner determined by the Employers,
by the amount, if any, which is the minimum necessary to result in no portion of
the payments and benefits payable by the Bank under Section 5(i) being
non-deductible to the Bank pursuant to Section 280G of the Code and subject to
the excise tax imposed under Section 4999 of the Code. In the event the Bank’s
share of the payments and benefits payable by the Employers pursuant to
Section 5(i) hereof is reduced by the preceding sentence, then the Corporation’s
share of such payments and benefits shall be increased by an equivalent amount.

 

7.                                      Payment of Additional Benefits under
Certain Circumstances.

 

(a)                                  In the event that the payments and benefits
pursuant to Section 5(i) hereof, either alone or together with other payments
and benefits which the Executive has the right to receive from the Employers or
their predecessors or successors but before giving effect to this Section 7,
would constitute a “parachute payment” as defined in Section 280G(b)(2) of the
Code (the “Initial Parachute Payment”), then the Corporation shall pay to the
Executive, in a lump sum within the earlier of thirty (30) days following the
Date of Termination or the next following December 31, a cash amount equal to
the sum of the following:

 

10

--------------------------------------------------------------------------------

 

(A)                              twenty (20) percent (or such other percentage
equal to the tax rate imposed by Section 4999 of the Code or any successor
thereto) of the amount by which the Initial Parachute Payment exceeds the
Executive’s “base amount” from the Employers, as defined in
Section 280G(b)(3) of the Code, with the difference between the Initial
Parachute Payment and the Executive’s base amount being hereinafter referred to
as the “Initial Excess Parachute Payment”; and

 

(B)                                such additional amount (the “Tax Allowance”)
as may be necessary to compensate the Executive for the payment by the Executive
of state and federal income and excise and other taxes on the payment provided
under clause (A) above and on any payments under this clause (B).  The Tax
Allowance shall be calculated by multiplying the “gross up percentage” (“GUP”)
by the payment to be made under clause (A) above.  The GUP shall be determined
as follows:

 

GUP =

 

  Tax Rate

 

 

 

1- Tax Rate

 

The Tax Rate for purposes of computing the GUP shall be equal to the sum of
(i) twenty (20) percent (or such other percentage equal to the tax rate imposed
by Section 4999 of the Code or any successor thereto), and (ii) the highest
marginal federal and state income and employment-related tax rate (including
Social Security and Medicare taxes) applicable to the Executive in the year in
which the payment under clause (B) above is made, and shall also reflect the
phase-out of deductions and the ability to deduct certain of such taxes.

 

All determinations to be made pursuant to this Section 7 shall be based upon the
opinion of independent counsel selected by the Employers and paid for by the
Employers; provided, however, that such counsel shall be reasonably acceptable
to the Executive.

 

(b)                                 Notwithstanding the foregoing, if it shall
subsequently be determined in a final judicial determination or a final
administrative settlement to which the Executive is a party that the actual
excess parachute payment as defined in Section 280G(b)(1) of the Code is
different from the Initial Excess Parachute Payment (such different amount being
hereafter referred to as the “Determinative Excess Parachute Payment”), then the
Corporation’s independent tax counsel or accountants shall determine the amount
(the “Adjustment Amount”) which either the Executive must pay to the Corporation
or the Corporation must pay to the Executive in order to put the Executive (or
the Corporation, as the case may be) in the same position the Executive (or the
Corporation, as the case may be) would have been if the Initial Excess Parachute
Payment had been equal to the Determinative Excess Parachute Payment.  In
determining the Adjustment Amount, the independent tax counsel or accountants
shall take into account any and all taxes (including any penalties and interest)
paid by or for the Executive or refunded to the Executive or for the Executive’s
benefit.  As soon as practicable after the Adjustment Amount has been so
determined, the Corporation shall pay the Adjustment Amount to the Executive or
the Executive shall repay the Adjustment Amount to the Corporation, as the case
may be.

 

11

--------------------------------------------------------------------------------

 

(c)                                  In each calendar year that the Executive
receives payments of benefits under this Section 7, the Executive shall report
on her state and federal income tax returns such information as is consistent
with the determination made by the independent tax counsel or accountants of the
Corporation as described above.  The Corporation shall indemnify and hold the
Executive harmless from any and all losses, costs and expenses (including
without limitation, reasonable attorneys’ fees, interest, fines and penalties)
which the Executive incurs as a result of so reporting such information.  The
Executive shall promptly notify the Corporation in writing whenever the
Executive receives notice of the institution of a judicial or administrative
proceeding, formal or informal, in which the federal tax treatment under
Section 4999 of the Code of any amount paid or payable under this Section 7 is
being reviewed or is in dispute.  The Corporation shall assume control at its
expense over all legal and accounting matters pertaining to such federal tax
treatment (except to the extent necessary or appropriate for the Executive to
resolve any such proceeding with respect to any matter unrelated to amounts paid
or payable pursuant to this Section 7) and the Executive shall cooperate fully
with the Corporation in any such proceeding.  The Executive shall not enter into
any compromise or settlement or otherwise prejudice any rights the Corporation
may have in connection therewith without the prior consent of the Corporation.

 

8.                                      Mitigation; Exclusivity of Benefits.

 

(a)                                  The Executive shall not be required to
mitigate the amount of any benefits hereunder by seeking other employment or
otherwise, nor shall the amount of any such benefits be reduced by any
compensation earned by the Executive as a result of employment by another
employer after the Date of Termination or otherwise, except as set forth in
Section 5(i)(B)(ii) hereof.

 

(b)                                 The specific arrangements referred to herein
are not intended to exclude any other benefits which may be available to the
Executive upon a termination of employment with the Employers pursuant to
employee benefit plans of the Employers or otherwise.

 

9.                                      Withholding.  All payments required to
be made by the Employers hereunder to the Executive shall be subject to the
withholding of such amounts, if any, relating to tax and other payroll
deductions as the Employers may reasonably determine should be withheld pursuant
to any applicable law or regulation.

 

10.                               Competitive Activities.

 

(a)                                  The Executive agrees and acknowledges that
by virtue of her employment hereunder, she will maintain an intimate knowledge
of the activities and affairs of the Employers, including trade secrets, plans,
business plans, strategies, projections, market studies, customer information,
employee records and other internal proprietary and confidential information and
matters (collectively “Confidential Information”).  As a result, and also
because of the special, unique and extraordinary services that the Executive is
capable of performing for the Employers or one of its competitors, the Executive
recognizes that the services to be rendered by her hereunder are of a character
giving them a peculiar value, the loss of which cannot be adequately or
reasonably compensated for by damages.

 

12

--------------------------------------------------------------------------------

 

(b)                                 Except for the purpose of carrying out her
duties hereunder, the Executive will not remove or retain, or make copies or
reproductions of, any figures, documents, records, discs, computer records,
calculations, letters, papers, or recorded or documented information of any type
or description relating to the business of the Employers.  The Executive agrees
that she will not divulge to others any information (whether or not documented
or recorded) or data acquired by her while in the Employers’ employ relating to
methods, processes or other trade secrets or other Confidential Information.

 

(c)                                  The Executive agrees that the Employers
are, and shall be, the sole and exclusive owner of all improvements, ideas and
suggestions, whether or not subject to patent or trademark protection, and all
copyrightable materials which are conceived by the Executive during her
employment, which relate to the business of the Employers, which are
confidential, or which are not readily ascertainable from persons or other
sources outside the Bank or the Corporation.

 

(d)                                 Unless the Executive’s employment is
terminated in connection with or following a Change in Control of the
Corporation and/or the Bank, then for a period of one year after the termination
of employment, the Executive shall not, directly or indirectly, solicit, induce,
encourage or attempt to influence any client, customer or employee of the
Employers to cease to do business with, or to terminate any employee’s
employment with, the Employers.  The Executive shall not be subject to any of
the limitations set forth in the preceding sentence if the Executive’s
employment is terminated in connection with or following a Change in Control of
the Corporation and/or the Bank.

 

(e)                                  The Executive agrees that during the term
of her employment hereunder, except with the express consent of the Employers,
she will not, directly or indirectly, engage or participate in, become a
director of, or render advisory or other services for, or in connection with, or
become interested in, or make any financial investment in any firm, corporation,
business entity or business enterprise competitive with or to any business of
the Employers; provided, however, that the Executive shall not thereby be
precluded or prohibited from owning passive investments, including investments
in the securities of other financial institutions, so long as such ownership
does not require her to devote substantial time to management or control of the
business or activities in which she has invested.  Notwithstanding anything to
the contrary contained in this Agreement, during the term of this Agreement, the
Executive shall have no employment contract or other written or oral agreement
concerning employment as an officer of a savings bank or any other financial
institution or financial institution holding company nor with any other entity
or person other than the Bank or the Corporation.  The provisions of this
Section 10(e) shall not be applicable if the Executive’s employment is
terminated in connection with or following a Change in Control of the
Corporation and/or the Bank.

 

(f)                                    The Employers shall be entitled to
immediate injunctive or other equitable relief to restrain the Executive from
failing to comply with any obligation under this Section 10 or from rendering
her services to persons or entities than the Employers, in addition to any other
remedies to which the Employers may be entitled under law.  The right to such
injunctive or other equitable relief shall survive the termination by the
Employers of the Executive’s employment.

 

(g)                                 The Executive acknowledges that the
restrictions contained in this Section 10 are reasonable and necessary to
protect the legitimate interests of the Employers and that any violation

 

13

--------------------------------------------------------------------------------

 

thereof would result in irreparable injuries to the Employers.  The Executive
acknowledges that, if the Executive violates any of these restrictions, the
Employers are entitled to obtain from any court of competent jurisdiction,
preliminary and permanent injunctive relief as well as damages, and an equitable
accounting of any earnings, profits and other benefits arising from such
violation, which rights shall be cumulative and in addition to any other rights
or remedies to which the Employers may be entitled.  The Executive further
acknowledges that the provisions of Sections 10(a), (b), (c), (f) and (g) shall
remain in full force and effect beyond the termination of the Executive’s
employment for any reason, including but not limited to termination in
connection with or following a Change in Control of the Corporation and/or the
Bank.

 

11.                               Assignability.  The Employers may assign this
Agreement and their rights and obligations hereunder in whole, but not in part,
to any corporation, bank or other entity with or into which the Employers may
hereafter merge or consolidate or to which the Employers may transfer all or
substantially all of their assets, if in any such case said corporation, bank or
other entity shall by operation of law or expressly in writing assume all
obligations of the Employers hereunder as fully as if it had been originally
made a party hereto, but may not otherwise assign this Agreement or its rights
and obligations hereunder.  The Executive may not assign or transfer this
Agreement or any rights or obligations hereunder.

 

12.                               Notice.  For the purposes of this Agreement,
notices and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when delivered or mailed by
first-class certified or registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below:

 

 

To the Bank:

Secretary

 

 

Willow Grove Bank

 

 

Welsh & Norristown Roads

 

 

Maple Glen, Pennsylvania 19002-8030

 

 

 

 

To the Corporation:

Secretary

 

 

Willow Grove Bancorp, Inc.

 

 

Welsh & Norristown Roads

 

 

Maple Glen, Pennsylvania 19002-8030

 

 

 

 

To the Executive:

Donna M. Coughey

 

 

At her last address on file with

 

 

the Employers

 

13.                               Amendment; Waiver.  (a) Except as set forth in
Section 13(b), no provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by the Executive and such officer or officers as may be specifically
designated by the Board of Directors of each of the Employers to sign on its
behalf.  No waiver by any party hereto at any time of any breach by any other
party hereto of, or compliance with, any condition or provision 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.

 

14

--------------------------------------------------------------------------------

 

(b)                                 The parties hereto acknowledge and agree
that (i) the recently enacted American Jobs Creation Act of 2004 established a
new Section 409A of the Code; (ii) Code Section 409A contains provisions
governing the taxation of deferred compensation; (iii) the compensation and
other benefits to be paid or otherwise provided under this Agreement, whether
provided hereunder or pursuant to any of the Employer Plans, may be negatively
impacted by Section 409A of the Code; (iv) the Internal Revenue Service (“IRS”)
has issued initial guidance and is expected to issue additional guidance
regarding the scope of Section 409A of the Code; and (v) the Employers have
until December 31, 2005 to amend this Agreement and the Employer Plans to bring
them into compliance with Section 409A of the Code.  The parties hereto
acknowledge and agree that the Employers may amend, in accordance with the terms
of the Employer Plans, any or all of the Employer Plans after the date hereof in
order to comply with Section 409A of the Code.  The parties further agree that
in the event that the Employers or the Executive determine, after a review of
all applicable IRS guidance, that this Agreement or any provision hereof is
subject to Section 409A of the Code, the parties will negotiate in good faith
any changes required to be made to this Agreement to comply with Section 409A of
the Code.

 

14.                               Governing Law.  The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the United States where applicable and otherwise by the substantive laws of the
Commonwealth of Pennsylvania.

 

15.                               Nature of Obligations.  Nothing contained
herein shall create or require the Employers to create a trust of any kind to
fund any benefits which may be payable hereunder, and to the extent that the
Executive acquires a right to receive benefits from the Employers hereunder,
such right shall be no greater than the right of any unsecured general creditor
of the Employers.

 

16.                               Headings.  The section headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.

 

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

 

18.                               Counterparts.  This Agreement may be executed
in one or more counterparts, each of which shall be deemed to be an original but
all of which together will constitute one and the same instrument.

 

19.                               Regulatory Actions.  The following provisions
shall be applicable to the parties to the extent that they are required to be
included in employment agreements between a savings association and its
employees pursuant to Section 563.39(b) of the Regulations Applicable to All
Savings Associations, 12 C.F.R. §563.39(b), or any successor thereto, and shall
be controlling in the event of a conflict with any other provision of this
Agreement, including without limitation Section 5 hereof.

 

15

--------------------------------------------------------------------------------

 

(a)                                  The Bank’s Board of Directors may terminate
the Executive’s employment at any time, but any termination by the Bank’s Board
of Directors, other than termination for Cause, shall not prejudice the
Executive’s right to compensation or other benefits under this Agreement.

 

(b)                                 If the Executive is suspended from office
and/or temporarily prohibited from participating in the conduct of the
Employers’ affairs by a notice served under Section 8(e)(3) or
Section 8(g)(1) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C.
§1818(e)(3) and 1818(g)(1)), the Employers’ obligations under this Agreement
shall be suspended as of the date of service, unless stayed by appropriate
proceedings.  If the charges in the notice are dismissed, the Employers may, in
their discretion:  (i) pay the Executive all or part of the compensation
withheld while their obligations under this Agreement were suspended, and
(ii) reinstate (in whole or in part) any of their obligations which were
suspended.

 

(c)                                  If the Executive is removed from office
and/or permanently prohibited from participating in the conduct of the
Employers’ affairs by an order issued under Section 8(e)(4) or
Section 8(g)(1) of the FDIA (12 U.S.C. §1818(e)(4) and (g)(1)), all obligations
of the Employers under this Agreement shall terminate as of the effective date
of the order, but vested rights of the Executive and the Employers as of the
date of termination shall not be affected.

 

(d)                                 If the Bank is in default, as defined in
Section 3(x)(1) of the FDIA (12 U.S.C. §1813(x)(1)), all obligations under this
Agreement shall terminate as of the date of default, but vested rights of the
Executive and the Employers as of the date of termination shall not be affected.

 

(e)                                  All obligations under this Agreement shall
be terminated pursuant to 12 C.F.R. §563.39(b)(5) (except to the extent that it
is determined that continuation of the Agreement for the continued operation of
the Employers is necessary):  (i) by the Director of the Office of Thrift
Supervision (“OTS”), or his/her designee, at the time the Federal Deposit
Insurance Corporation (“FDIC”) enters into an agreement to provide assistance to
or on behalf of the Bank under the authority contained in Section 13(c) of the
FDIA (12 U.S.C. §1823(c)); or (ii) by the Director of the OTS, or his/her
designee, at the time the Director or his/her designee approves a supervisory
merger to resolve problems related to operation of the Bank or when the Bank is
determined by the Director of the OTS to be in an unsafe or unsound condition,
but vested rights of the Executive and the Employers as of the date of
termination shall not be affected.

 

20.                               Regulatory Prohibition.  Notwithstanding any
other provision of this Agreement to the contrary, any payments made to the
Executive pursuant to this Agreement, or otherwise, are subject to and
conditioned upon their compliance with Section 18(k) of the Federal Deposit
Insurance Act (12 U.S.C. §1828(k)) and the regulations promulgated thereunder,
including 12 C.F.R. Part 359.  In the event of the Executive’s termination of
employment with the Bank for Cause, all employment relationships and managerial
duties with the Bank shall immediately cease regardless of whether the Executive
remains in the employ of the Corporation following such termination. 
Furthermore, following such termination for Cause, the Executive will not,
directly or indirectly, influence or participate in the affairs or the
operations of the Bank, and any compensation and benefits which the Executive
may continue to receive from the Corporation pursuant to Section 3 hereof shall
be adjusted as appropriate so that they are commensurate solely with the
Executive’s duties at the Corporation.

 

16

--------------------------------------------------------------------------------

 

21.                               Payment of Costs and Legal Fees and
Reinstatement of Benefits.  In the event any dispute or controversy arising
under or in connection with the Executive’s termination is resolved in favor of
the Executive, whether by judgment, arbitration or settlement, the Executive
shall be entitled to the payment of (a) all legal fees incurred by the Executive
in resolving such dispute or controversy, and (b) any back-pay, including Base
Salary, bonuses and any other cash compensation, fringe benefits and any
compensation and benefits due to the Executive under this Agreement.

 

22.                               Indemnification.

 

(a)                                  The Corporation shall provide the Executive
(including her heirs, executors and administrators) with coverage under a
directors’ and officers’ liability insurance policy at its expense and shall
indemnify the Executive (and her heirs, executors and administrators) to the
fullest extent permitted by law against all expenses and liabilities reasonably
incurred by her in connection with or arising out of any action, suit or
proceeding in which she may be involved by reason of her having been a director
or officer of the Corporation or any of its subsidiaries or affiliates (whether
or not she continues to be a director or officer at the time of incurring such
expenses or liabilities).  Such expenses and liabilities shall include, but
shall not be limited to, judgments, court costs and attorneys’ fees and the cost
of reasonable settlements.  The parties hereto acknowledge and agree that, for
purposes of the right to indemnification by the Corporation as provided by
Article VI of the Corporation’s Amended and Restated Bylaws, the Executive also
is serving as a director and officer of the Bank at the request of the
Corporation.

 

(b)                                 Any indemnification provided to the
Executive by the Bank shall comply with 12 C.F.R. §545.121 or any successor
regulation applicable to the Bank.

 

23.                               Entire Agreement.  This Agreement embodies the
entire agreement between the Employers and the Executive with respect to the
matters agreed to herein.  All prior agreements between the Employers and the
Executive with respect to the matters agreed to herein are hereby superseded and
shall have no force or effect, including the agreement between the parties dated
January 20, 2005.  Without limiting the generality of the preceding sentence,
the parties hereto agree that, immediately prior to the Effective Date, the
Employment Agreement dated November 6, 2000 between Chester Valley, First
Financial and the Executive (the “Old Agreement”) shall be cancelled and shall
have no force and effect, and the Executive agrees that she shall not be
entitled to and shall not receive any payments or benefits pursuant to the Old
Agreement as a result of the transactions contemplated by the Merger Agreement.

 

24.                               Survival.  In the event the Executive’s
employment is terminated during the term of this Agreement, any rights given
under this Agreement to the Executive or the Employers, or any obligation
imposed upon the Executive or the Employers under this Agreement, based upon the
nature of such termination shall survive the Date of Termination, including
those provisions in Sections 5, 6, 7 and 8 that relate to the specific reason
for the termination of employment.  In addition, the provisions of Sections 9,
10, 12, 13, 21, 22 (with respect to acts or omissions occurring on or before the
Date of Termination), 23 and 24 shall survive the Date of Termination.

 

17

--------------------------------------------------------------------------------

 

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

 

Attest:

WILLOW GROVE BANCORP

 

 

 

 

/s/ Christopher E. Bell

 

By:

/s/ Frederick A. Marcell Jr.

 

Christopher E. Bell

 

Frederick A. Marcell Jr.

Corporate Secretary

 

President and Chief Executive Officer

 

 

 

 

Attest:

WILLOW GROVE  BANK

 

 

 

 

/s/ Christopher E. Bell

 

By:

/s/ Frederick A. Marcell Jr.

 

Christopher E. Bell

 

Frederick A. Marcell Jr.

Senior Vice President

 

President and Chief Executive Officer

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

By:

/s/ Donna M. Coughey

 

 

 

Donna M. Coughey

 

18

--------------------------------------------------------------------------------

 

Exhibit A

 

GENERAL RELEASE

 

1.  Release of Claims by Executive.

 

(a)  In consideration of the payments and benefits to be provided
to                                 (“Executive”) pursuant to the employment
agreement, dated as of                   , 2005, to which Executive and Willow
Grove Bancorp, Inc., a Pennsylvania corporation (the “Company”), are parties
(the “Employment Agreement”), the sufficiency of which is acknowledged hereby,
Executive, with the intention of binding herself and her heirs, executors,
administrators and assigns, does hereby release, remise, acquit and forever
discharge the Company and its subsidiaries and affiliates (the “Company
Affiliated Group”), their present and former officers, directors, executives,
agents, attorneys and employees, and the successors, predecessors and assigns of
each of the foregoing (collectively, the “Company Released Parties”), of and
from any and all claims, actions, causes of action, complaints, charges,
demands, rights, damages, debts, sums of money, accounts, financial obligations,
suits, expenses, attorneys’ fees and liabilities of whatever kind or nature in
law, equity or otherwise, whether accrued, absolute, contingent, unliquidated or
otherwise and whether now known or unknown, suspected or unsuspected, which
Executive, individually or as a member of a class, now has, owns or holds, or
has at any time heretofore had, owned or held, against any Company Released
Party in any capacity, including, without limitation, any and all claims
(i) arising out of or in any way connected with Executive’s service to any
member of the Company Affiliated Group (or the predecessors thereof) in any
capacity, or the termination of such service in any such capacity, (ii) for
severance or vacation benefits, unpaid wages, salary or incentive payments,
(iii) for breach of contract, wrongful discharge, impairment of economic
opportunity, defamation, intentional infliction of emotional harm or other tort,
(iv) for any violation of applicable state and local labor and employment laws
(including, without limitation, all laws concerning unlawful and unfair labor
and employment practices) and (v) for employment discrimination under any
applicable federal, state or local statute, provision, order or regulation, and
including, without limitation, any claim under Title VII of the Civil Rights Act
of 1964 (“Title VII”), the Civil Rights Act of 1988, the Fair Labor Standards
Act, the Americans with Disabilities Act (“ADA”), the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), the Age Discrimination in Employment
Act (“ADEA”) and any similar or analogous state statute, excepting only:

 

(A)  the rights of Executive under the Employment Agreement, including her right
to severance;

 

(B)  the rights of Executive (i) relating to any stock options and other
equity-based awards held by Executive as of the date hereof (collectively, the
“Equity Arrangements”) and (ii) as a stockholder of the Company or its
affiliates;

 

1

--------------------------------------------------------------------------------

 

(C)  the right of Executive to receive COBRA continuation coverage in accordance
with applicable law;

 

(D)  rights to indemnification Executive may have under (i) applicable corporate
law, (ii) the bylaws or articles of incorporation of any Company Released Party,
(iii) any other agreement between Executive and a Company Released Party,
(iv) as an insured under any director’s and officer’s liability insurance policy
now or previously in force or (v) Section 6.08 of the Agreement and Plan of
Merger, dated as of January 20, 2005, between the Company and Chester Valley
Bancorp, Inc.; and

 

(E)  claims for benefits under any health, disability, retirement, life
insurance or other, similar “employee benefit plan” (within the meaning of
Section 3(3) of ERISA) of the Company Affiliated Group (the “Company Benefit
Plans”).

 

(b)  Executive acknowledges and agrees that the release of claims set forth in
this Section 1 is not to be construed in any way as an admission of any
liability whatsoever by any Company Released Party, any such liability being
expressly denied.

 

(c)  The release of claims set forth in this Section 1 applies to any relief no
matter how called, including, without limitation, wages, back pay, front pay,
compensatory damages, liquidated damages, punitive damages, damages for pain or
suffering, costs, and attorney’s fees and expenses.

 

(d)  Executive specifically acknowledges that her acceptance of the terms of the
release of claims set forth in this Section 1 is, among other things, a specific
waiver of her rights, claims and causes of action under Title VII, ADEA, ADA and
any state or local law or regulation in respect of discrimination of any kind.

 

(e)  Executive shall have a period of 21 days to consider whether to execute
this General Release. To the extent Executive has executed this General Release
within less than twenty-one (21) days after its delivery to her, the Executive
hereby acknowledges that her decision to execute this General Release prior to
the expiration of such twenty-one (21) day period was entirely voluntary.  If
Executive accepts the terms hereof and executes this General Release, she may
thereafter, for a period of 7 days following (and not including) the date of
execution, revoke this General Release. If no such revocation occurs, this
General Release shall become irrevocable in its entirety, and binding and
enforceable against Executive, on the day next following the day on which the
foregoing seven-day period has elapsed. Any revocation of this General Release
shall be deemed for all purposes a revocation of this General Release in its
entirety.

 

(f)  Executive acknowledges and agrees that she has not, with respect to any
transaction or state of facts existing prior to the date hereof, filed any
complaints, charges or lawsuits against any Company Released Party with any
governmental agency, court or tribunal.

 

2.  Effect of Unenforceability of Release.  In addition to any other remedy
available to the Company hereunder, in the event that, as a result of a
challenge brought by an Employee Released Party (as defined below), the release
of claims set forth in Section 1 becomes null and void

 

2

--------------------------------------------------------------------------------

 

or is otherwise determined not to be enforceable, then the Company’s obligation
to make any additional payments or to provide any additional benefits under the
Severance Agreement shall immediately cease to be of any force and effect, and
Executive shall promptly return to the Company any payments or benefits the
provision of which by the Company was conditioned on the enforceability of this
General Release.

 

3.  Release of Claims by the Company.

 

(a)   The Company, with the intention of binding itself and its subsidiaries,
affiliates, predecessors and successors and their directors and officers
(collectively, the “Releasing Entities”), does hereby release, remise, acquit
and forever discharge Executive and her heirs, estate, executors, administrators
and assigns (collectively, the “Employee Released Parties”), of and from any and
all claims, actions, causes of action, complaints, charges, demands, rights,
damages, debts, sums of money, accounts, financial obligations, suits, expenses,
attorneys’ fees and liabilities of whatever kind or nature in law, equity or
otherwise, whether accrued, absolute, contingent, unliquidated or otherwise and
whether now known or unknown, suspected or unsuspected, which the Company and
its subsidiaries, affiliates, predecessors and successors, individually or as a
member of a class, now have, own or hold, or have at any time heretofore had,
owned or held, against any Employee Released Party, excepting only:

 

(A)  rights of the Releasing Entities under this General Release, the
post-termination of employment obligations of the Employment Agreement, the
Equity Arrangements and the Company Benefit Plans; and

 

(B)  rights of the Releasing Entities arising by reason of Executive having
committed a crime or an act or omission to act which constitutes fraud, willful
misconduct or gross negligence.

 

(b)  The Releasing Entities acknowledge and agree that the release of claims set
forth in this Section 3 is not to be construed in any way as an admission of any
liability whatsoever by any Employee Released Party, any such liability being
expressly denied.

 

(c)  The release of claims set forth in this Section 3 applies to any relief no
matter how called, including, without limitation, compensatory damages,
liquidated damages, punitive damages, damages for pain or suffering, costs, and
attorney’s fees and expenses.

 

(d)  Nothing herein shall be deemed, nor does anything contained herein purport,
to be a waiver of any right or claim or cause of action which by law the Company
is not permitted to waive.

 

(e)  The Company acknowledges and agrees that it has not, with respect to any
transaction or state of facts existing prior to the date hereof, filed any
complaints, charges or lawsuits against any Employee Released Party with any
governmental agency, court or tribunal.

 

4.  Nondisparagement.  Executive agrees not to make any disparaging statements
about the Company Released Parties or the Company Affiliated Group’s business
practices,

 

3

--------------------------------------------------------------------------------

 

operations or personnel policies and practices to any of the Company Affiliated
Group’s customers, clients, competitors, suppliers, directors, consultants,
employees, former employees, or the press or other media in any country. 
Similarly, the Company agrees to instruct its executive officers and directors
not to make any disparaging statement about the Executive or Executive’s
performance of her duties and responsibilities while employed with the Company
Affiliated Group to any of the Company Affiliated Group’s customers, client’s,
competitors, suppliers, directors, consultants, employees, former employees or
the press or other media in any country.

 

5.  Counterparts.  This General Release may be executed in counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.

 

6.  Successors.  This General Release shall be binding upon any and all
successors and assigns of Executive and the Company.

 

7.  Governing Law.  Except for issues or matters as to which federal law is
applicable, this General Release shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania.

 

IN WITNESS WHEREOF, this General Release has been signed by or on behalf of each
of the Parties, all as of the date set forth below.

 

 

 

WILLOW GROVE BANCORP, INC.

 

 

 

 

 

 

 

 

Executive

By:

 

Its:

 

 

 

 

Dated:

 

 

Dated:

 

 

 

 

 

4

--------------------------------------------------------------------------------