Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT is dated as of June 8, 2007 and is between Willow
Financial Bank, a federally chartered savings bank (the “Bank” or the
“Employer”), and Thomas Saunders (the “Executive”).

WITNESSETH

WHEREAS, in order to induce the Executive to be employed by the Employer and in
consideration of the Executive’s agreeing to be employed by Employer, the
parties desire to specify the severance benefits which shall be due the
Executive by the Employer in the event that his employment with the Employer 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)           Average Annual Compensation.  The Executive’s “Average Annual
Compensation” for purposes of this Agreement shall be deemed to mean the average
amount of Base Salary and any cash bonus paid to the Executive by the Employer
or any subsidiary thereof during the most recent five calendar years preceding
the year in which the Date of Termination occurs (or such shorter period as the
Executive was employed).

(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 of the Corporation.  “Change in Control of the
Corporation” shall mean the occurrence of any of the following:  (i) the
acquisition of control of the Corporation 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 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 representing 20% or more of the combined voting power of the
Corporation’s then outstanding securities; or (iv) during any period of

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three consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Corporation 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)            Corporation.  “Corporation” shall mean Willow Financial Bancorp,
Inc., a Pennsylvania corporation and the parent holding company of the Bank.

(g)           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 his 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.

(h)           Disability.  “Disability” shall be deemed to have occurred if the
Executive: (i) is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, or (ii) is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, receiving
income replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Bank.

(i)            Effective Date.  The Effective Date of this Agreement shall mean
the date first above written.

(j)            Good Reason.  “Good Reason” means the occurrence of any of the
following conditions within twelve (12) months following a Change in Control of
the Corporation:

(i)            any material breach of this Agreement by the Bank, including
without limitation any of the following: (A) a material diminution in the
Executive’s base compensation, (B) a material diminution in the Executive’s
authority, duties or responsibilities, or (C) a material diminution in the
authority, duties or responsibilities of the supervisor to whom the Executive is
required to report, or

(ii)           any material change in the geographic location at which the
Executive must perform his services under this Agreement;

provided, however, that prior to any termination of employment for Good Reason,
the Executive must first provide written notice to the Bank within ninety (90)
days of the initial existence of the condition, describing the existence of such
condition, and the Bank shall thereafter have the right to remedy the condition
within thirty (30) days of the date the Bank received the written notice from
the Executive.  If the Bank remedies the condition within such thirty (30) cure
period, then no Good Reason shall be deemed to exist with respect to such
condition.

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

(l)            Notice of Termination.  Any purported termination of the
Executive’s employment by the Employer for any reason, including without
limitation for Cause, Disability or Retirement, 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 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 Employer’s termination of the Executive’s
employment for Cause, which shall be effective immediately, and except as set
forth in Section 18(a) hereof; and (iv) is given in the manner specified in
Section 11 hereof.

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

2.             Term of Employment.

(a)           The term of this Agreement shall commence on June 25, 2007.  As of
such date, the Employer hereby employs the Executive as Executive Commercial
Sales Manager, and the Executive hereby accepts said employment and agrees to
render such services to the Employer on the terms and conditions set forth in
this Agreement. Unless extended as provided in this Section 2, this Agreement
shall terminate on June 30, 2009. Prior to July 1, 2009 and each July 1
thereafter, the Board of Directors of the Employer shall consider and review
(after taking into account all relevant factors, including the Executive’s
performance hereunder) a one-year extension of the term of this Agreement, and
the term shall continue to extend each July 1 if the Board of Directors approves
such extension unless the Executive gives written notice to the Employer 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 the Employer 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 Employer as may be consistent with his titles
and from time to time assigned to him by the Board of Directors of the Employer.
During the term of this Agreement, the Executive shall devote his best efforts
and his full time effort to the affairs and business of the Employer.

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3.             Compensation and Benefits.

(a)           Base Salary.  The Employer shall compensate and pay the Executive
for his services during the term of this Agreement at a minimum base salary of
$200,000 per year (“Base Salary”), which may be increased from time to time in
such amounts as may be determined by the Board of Directors of the Employer and
may not be decreased without the Executive’s express written consent.  In
addition to his Base Salary, the Executive shall be entitled to receive during
the term of this Agreement such bonus payments as may be determined by the Board
of Directors of the Employer.

(b)           Signing Bonus.  As of June 25, 2007, the Bank shall pay to the
Executive a signing bonus of $75,000.  In the event the Executive’s employment
with the Bank is terminated for any reason prior to completing two full years of
employment, other than a termination following a Change in Control of the
Corporation or a termination by the Bank without cause, then the Executive shall
repay (i) 100% of the signing bonus if the Date of Termination is within the
first 12 months following the date of hire and (ii) 50% of the signing bonus if
the Date of Termination is within the second 12 months following the date of
hire, with such repayment in either event to be made within ten (10) days of the
Date of Termination.

(c)           Annual Incentive Bonuses.  The Executive shall be entitled to
receive a guaranteed incentive bonus of $50,000 for the fiscal year ending June
30, 2008 (“Fiscal 2008”) under the annual bonus plan if he remains employed
until the end of Fiscal 2008, with such bonus to be paid in September 2008. 
Subsequent to Fiscal 2008, the Executive shall have the opportunity to earn an
incentive bonus of 25% to 45% of Base Salary under the annual bonus plan,
dependent upon the achievement of specified goals.

(d)           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, stock option, employee stock
ownership, or other plans, benefits and privileges given to employees and
executives of the Employer, to the extent commensurate with his then duties and
responsibilities, as fixed by the Board of Directors of the Employer, provided
that participation in the annual bonus plan shall be in accordance with Section
3(c) above. The Employer 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 Employer 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 Employer.  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 or signing bonus payable to
the Executive pursuant to Sections 3(a) and 3(b) hereof.

(e)           Paid Time Off.  During the term of this Agreement, the Executive
shall be entitled to 25 days per year of paid time off, with the number of days
for 2007 to be pro-rated based on the Effective Date.  The Executive may utilize
such paid time off in accordance with the policies as established from time to
time by the Board of Directors of the Employer. The Executive shall not be
entitled to receive any additional compensation from the Employer for failure to
utilize such paid time off, nor shall the Executive be able to accumulate unused
paid time off from one year to the next, except to the extent authorized by the
Board of Directors of the Employer.

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(f)            Automobile Allowance.  The Executive shall be entitled to receive
from the Bank an automobile allowance of $10,000 per year, with such allowance
to be paid in equal monthly installments.

(g)           Equity Grants.  As of June 25, 2007, the Executive shall receive a
restricted stock award for 10,000 shares of common stock of the Corporation,
with such award to vest at the rate of one-third per year on each of the first
three annual anniversary dates of the date of hire.  The Executive shall be
considered for future restricted stock awards with a value of 20% to 35% of his
Base Salary, subject to approval by the Board of Directors of the Corporation or
an authorized committee thereof.

(h)           Supplemental Executive Retirement Plan.  The Executive shall be
entitled to participate in a supplemental executive retirement plan.

4.             Expenses.  The Employer 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 Employer,
including, but not by way of limitation, the maintenance of Series 7 and Series
63 licenses, subject to such reasonable documentation and other limitations as
may be established by the Board of Directors of the Employer.  If such expenses
are paid in the first instance by the Executive, the Employer shall reimburse
the Executive therefor.

5.             Termination.

(a)           General.  The Employer shall have the right, at any time upon
prior Notice of Termination, to terminate the Executive’s employment hereunder
for any reason, including without limitation termination for Cause, Disability
or Retirement, and the Executive shall have the right, upon prior Notice of
Termination, to terminate his employment hereunder for any reason.

(b)           For Cause.  In the event that the Executive’s employment is
terminated by the Employer for Cause, the Executive shall have no right pursuant
to this Agreement to compensation or other benefits for any period after the
applicable Date of Termination.

(c)           Voluntary Termination by the Executive.  In the event the
Executive terminates his employment hereunder other than for death, Disability,
Retirement, Good Reason or an uncured material breach of this Agreement by the
Employer, then the Executive shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the applicable Date of
Termination.

(d)           Death.  In the event the Executive’s employment hereunder is
terminated due to death, neither the Executive nor his 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.

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(e)           Disability.  In the event the Executive’s employment hereunder is
terminated due to Disability, the Executive shall be entitled to receive any
disability benefits provided under any disability plan maintained by the
Employer.  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.

(f)            Retirement.  In the event the Executive’s employment hereunder is
terminated due to Retirement, the Executive shall have no right pursuant to this
Agreement to compensation or other benefits for any period after the Date of
Termination.

(g)           Involuntary Termination.  In the event that (i) the Executive’s
employment is terminated by the Employer for other than Cause, Disability,
Retirement or the Executive’s death or (ii) such employment is terminated by the
Executive due to a material breach of this Agreement by the Employer, which
breach has not been cured within thirty (30) days after a written notice of
non-compliance has been given by the Executive to the Employer, then the
Employer shall pay to the Executive, within thirty (30) days following the Date
of Termination, a cash severance amount equal to one times the Executive’s
current Base Salary; provided, however, that this Section 5(g) shall not be
applicable if the termination of employment occurs concurrently with or
subsequent to a Change in Control of the Corporation.

(h)           Change in Control Termination.  In the event that (i) the
Executive’s employment is terminated concurrently with or within twelve (12)
months following a Change in Control of the Corporation for other than Cause,
Disability, Retirement or the Executive’s death or (ii) the Executive elects to
terminate his employment for Good Reason, then the Employer shall, subject to
the provisions of Section 6 hereof, if applicable,

(A)          pay to the Executive, within thirty (30) days following the Date of
Termination, a cash severance amount equal to two (2) times the Executive’s
Average Annual Compensation if the Change in Control of the Corporation occurs
on or before June 30, 2009 and one (1) times the Executive’s Average Annual
Compensation if the Change in Control of the Corporation occurs after June 30,
2009; and

(B)           maintain and provide for a period ending at the earlier of (i) two
(2) years subsequent to the Date of Termination if the Change in Control of the
Corporation occurs on or before June 30, 2009 and one (1) year subsequent to the
Date of Termination if the Change in Control of the Corporation occurs after
June 30, 2009 or (ii) the date of the Executive’s full-time employment by
another employer (provided that the Executive 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, the Executive’s continued
participation in all group insurance, life insurance, health and accident
insurance and disability insurance offered by the Employer in which the
Executive participated immediately prior to the Date of Termination, provided
that in the event that the Executive’s participation in any insurance plan as
provided in this subparagraph (B) is barred, or during such period any such plan
is discontinued or the benefits thereunder are materially reduced, the Employer
shall either arrange to provide the Executive with benefits substantially
similar to those which the Executive was entitled to receive under such plans
immediately prior to the Date of

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Termination or pay a cash equivalency amount; and provided further, that any
insurance premiums payable by the Employer  pursuant to this Section 5(h)(B)
shall be payable at such times and in such amounts as if the Executive was still
an employee of the Employer, subject to any increases in such amounts imposed by
the insurance company or COBRA, and the amount of insurance premiums required to
be paid by the Employer in any taxable year shall not affect the amount of
insurance premiums required to be paid by the Employer in any other taxable
year.

6.             Limitation of Benefits under Certain Circumstances.  If the
payments and benefits pursuant to Section 5 hereof, either alone or together
with other payments and benefits which the Executive has the right to receive
from the Employer and its affiliates would constitute a “parachute payment”
under Section 280G of the Code then the payments and benefits payable by the
Employer pursuant to Section 5 hereof shall be reduced by the amount, if any,
which is the minimum necessary to result in no portion of the payments and
benefits payable by the Employer under Section 5 being non-deductible to the
Employer pursuant to Section 280G of the Code and subject to the excise tax
imposed under Section 4999 of the Code. If the payments and benefits under
Section 5 are required to be reduced, the cash severance shall be reduced first,
followed by a reduction in the fringe benefits.  The determination of any
reduction in the payments and benefits to be made pursuant to Section 5 shall be
based upon the opinion of independent counsel selected by the Employer and paid
by the Employer.  Such counsel 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 in this Section 6 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, or
a reduction in the payments and benefits specified in Section 5 below zero.

7.             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(h)(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 Employer pursuant to employee benefit plans
of the Employer or otherwise.

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

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9.             Competitive Activities

(a)           The Executive agrees and acknowledges that by virtue of his
employment hereunder, he will maintain an intimate knowledge of the activities
and affairs of the Employer, 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 Employer or one of its competitors, the Executive recognizes
that the services to be rendered by him hereunder are of a character giving them
a peculiar value, the loss of which cannot be adequately or reasonably
compensated for by damages.

(b)           Except for the purpose of carrying out his 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 Employer.  The Executive agrees that he will not
divulge to others any information (whether or not documented or recorded) or
data acquired by him while in the Employer’s employ relating to methods,
processes or other trade secrets or other Confidential Information.

(c)           The Executive agrees that the Employer is, 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 his employment, which relate to the
business of the Employer, which are confidential, or which are not readily
ascertainable from persons or other sources outside the Employer.

(d)           Unless the Executive’s employment is terminated in connection with
or following a Change in Control of the Corporation, 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 Employer to cease to do business with, or to
terminate any employee’s employment with, the Employer.  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.

(e)           The Executive agrees that during the term of his employment
hereunder, except with the express consent of the Employer, he 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 Employer; 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 him to devote substantial time to management or control of the
business or activities in which he 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 9(e) shall not be applicable if the Executive’s employment is terminated
in connection with or following a Change in Control of the Corporation.

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(f)            The Employer shall be entitled to immediate injunctive or other
equitable relief to restrain the Executive from failing to comply with any
obligation under this Section 9 or from rendering his services to persons or
entities than the Employer, in addition to any other remedies to which the
Employer may be entitled under law.  The right to such injunctive or other
equitable relief shall survive the termination by the Employer of the
Executive’s employment.

(g)           The Executive acknowledges that the restrictions contained in this
Section 9 are reasonable and necessary to protect the legitimate interests of
the Employer and that any violation thereof would result in irreparable injuries
to the Employer.  The Executive acknowledges that, if the Executive violates any
of these restrictions, the Employer is 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 Employer may be entitled.  The
Executive further acknowledges that the provisions of Sections 9(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.

10.          Assignability.  The Employer may assign this Agreement and its
rights and obligations hereunder in whole, but not in part, to any corporation,
bank or other entity with or into which the Employer may hereafter merge or
consolidate or to which the Employer may transfer all or substantially all of
its 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 Employer
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.

11.          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 Employer:

 

Secretary

 

 

Willow Financial Bank

 

 

170 S. Warner Road

 

 

Wayne, Pennsylvania 19087

 

 

 

To the Executive:

 

Thomas Saunders

 

 

At his last address on file with

 

 

the Employer

 

12.          Amendment; Waiver.  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 the Employer to sign
on its behalf; provided, however, that if the Employer determines, after a
review of the final regulations issued under Section 409A of the Code and all
applicable Internal

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Revenue Service guidance, that this Agreement should be further amended to avoid
triggering the tax and interest penalties imposed by Section 409A of the Code,
the Employer may amend this Agreement to the extent necessary to avoid
triggering the tax and interest penalties imposed by Section 409A of the Code. 
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.

13.          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.

14.          Nature of Obligations.  Nothing contained herein shall create or
require the Employer 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 Employer hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Employer.

15.          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.

16.          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.

17.          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.

18.          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.

(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 Employer’s 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 Employer’s
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 Employer may, in its discretion:  (i) pay the Executive all or
part of the compensation withheld while its obligations under this Agreement
were suspended, and (ii) reinstate (in whole or in part) any of its obligations
which were suspended.

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(c)           If the Executive is removed from office and/or permanently
prohibited from participating in the conduct of the Employer’s 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 Employer under this Agreement
shall terminate as of the effective date of the order, but vested rights of the
Executive and the Employer 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
Employer 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 Employer 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 Employer as of the date of termination shall not be affected.

19.          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 FDIA (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.

20.          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.

21.          Entire Agreement.  This Agreement embodies the entire agreement
between the Employer and the Executive with respect to the matters agreed to
herein.  All prior agreements between the Employer and the Executive with
respect to the matters agreed to herein are hereby superseded and shall have no
force or effect.

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

Attest:

 

 

 

WILLOW FINANCIAL BANK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Joseph T. Crowley

 

 

 

By:

 

/s/ Donna M. Coughey

Joseph T. Crowley

 

 

 

 

 

Donna M. Coughey

Secretary

 

 

 

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Thomas Saunders

 

 

 

 

 

 

Thomas Saunders

 

12

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