Exhibit 10.3

 

FORM OF NON-COMPETITION AND NON-SOLICITATION AGREEMENT

 

This Non-Competition and Non-Solicitation Agreement (this “Agreement”) is
entered into as of this 20th day of May, 2008, by and between Harleysville
National Corporation (“HNC”) and undersigned director (the “Director”) of Willow
Financial Bancorp, Inc. (“WFB”).

 

WHEREAS, HNC contemplates the consummation of a merger (the “Merger”) pursuant
to an Agreement and Plan of Merger dated as of May 20, 2008 by and between HNC
and WFB (the “Merger Agreement”); and

 

WHEREAS, the Director is a well respected business person in the southeastern
Pennsylvania business community and acknowledges that his or her position with
WFB gives WFB significant presence in that community and is an important factor
in WFB’s ability to attract customers; and

 

WHEREAS, as a condition to HNC’s willingness to enter into the Merger Agreement,
HNC wants to protect WFB’s community relationships by requiring that the
Director execute this Agreement;

 

NOW, THEREFORE, in consideration of the premises and covenants contained in this
Agreement and intending to be legally bound hereby, the parties agree as
follows:

 

1.          Term.

 

This Agreement will commence on the Effective Date of the Merger as defined in
the Merger Agreement and end nine months after such date (the “Term”).

 

2.          Non-Competition.

 

(a)  For purposes of this Agreement, the term “Competitive Enterprise” means any
bank holding company or insured depository institution, including an institution
in the organizational stage or in the process of applying for or receiving
appropriate regulatory approval, including, without limitation, any federal or
state chartered bank, savings bank or savings and loan association.

 

(b)  During the Term, the Director shall not:

 

(i)  accept a position as director or employee of any Competitive Enterprise
that is located in Chester, Bucks, Montgomery, Delaware, Lehigh, and
Philadelphia Counties during the Term.

 

(ii)  directly or indirectly acquire an ownership interest in a Competitive
Enterprise that enables the Director to, directly or indirectly, in a
substantial manner, control, direct, influence, affect for impact the

 

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operations, services or business activities of the Competitive Enterprise in
Chester, Bucks, Montgomery, Delaware, Lehigh and Philadelphia Counties during
the Term, provided, however, that this restriction shall not apply to the direct
or indirect beneficial ownership of up to Three Percent (3%) of a class of
securities of a Competitive Enterprise, so long as the Director is not a
director or officer of such Competitive Enterprise.

 

3.          Non-Solicitation.

 

During the Term, the Director shall not:

 

(a)  Directly or indirectly, for the purpose of selling any product or service
that

 

competes with a product or service offered by WFB or its present subsidiaries or
affiliates, solicit, divert, or entice any customer of WFB to transfer such
business to a Competitive Enterprise.  Provided, however, that any business
activity or business pursuit that is currently undertaken or provided by a
director or his or her controlled entities or affiliates as a principal source
of such Director’s income shall not be deemed a Competitive Enterprise or a
violation of this Agreement.  In addition, this Agreement shall not prohibit a
director or his or her controlled entities or affiliates from providing any
service or product that he or she or his or her controlled entities or
affiliates has provided prior to the date hereof or that may be provided in the
future as part of the Director’s or his or her controlled entities’ or
affiliates’ historical business pursuits.

 

(b)  Employ or assist in employing any present employee of WFB or its
subsidiaries to perform services for any Competitive Enterprise.

 

(c)  Directly or indirectly, make any oral or written statement, comments or
other communications that impugns or is intended to impugn, disparage or
otherwise malign the reputation, ethics, competency, morality or qualifications
of WFB or HNC or any of their current or former directors, officers, employees
or customers.

 

4.          Confidentiality.

 

(a)  For purposes of this Agreement, “Proprietary Information” shall mean any
information relating to the business of WFB or any of its present subsidiaries
that has not previously been publicly released by WFB or their representatives,
and shall include, but shall not be limited to, information encompassed in all
marketing and business plans, financial information, fees, pricing information,
customer and client lists and relationships between WFB and its customers and
clients and others who have business dealings with WFB.

 

(b)  The Director agrees to maintain the confidentiality of all Proprietary
Information that has been disclosed to the Director in the course of his service
as a director of WFB, on or before the date of consummation of the Merger. The
Director shall not, without written authorization from HNC, use for the
Director’s

 

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benefit or purposes, nor disclose to others, at any time during the Term, any
Proprietary Information. This prohibition shall not apply after the Proprietary
Information has been voluntarily disclosed to the public, independently
developed and disclosed by others, or otherwise enters the public domain through
lawful means.

 

5.          Remedies.

 

In addition to any other rights and remedies HNC may have if the Director
violates this Agreement, the Director agrees that a breach or threatened breach
by the Director of his or her covenants set out in Sections 2, 3, and 4 of this
Agreement is likely to cause WFB and HNC as its successor irreparable injury and
damage, and the Director hereby expressly agrees that WFB and HNC as its
successor shall be entitled to the remedies of injunction, specific performance
and other equitable relief to prevent a breach or threatened breach of Sections
2, 3, and 4 of this Agreement by the Director. This provision shall not,
however, be construed as a waiver of any of the remedies which the HNC may have
for damages or otherwise.

 

6.          Successors and  Assigns

 

This Agreement shall be binding upon, and shall inure to the benefit of, HNC and
its successors and assigns.

 

7.          Governing Law.

 

This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Pennsylvania, without giving effect to its conflicts of laws
principles.

 

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IN WITNESS WHEREOF, HNC and the Director hereto have executed this Agreement to
be effective as of the Effective Date of the Merger.

 

 

 

 

HARLEYSVILLE NATIONAL CORPORATION

 

 

 

 

 

 

By:

 

 

 

 

 

Paul D. Geraghty

 

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR

 

 

 

 

 

 

 

 

 

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