Exhibit 10.13

 

WILLOW FINANCIAL BANCORP, INC.

AMENDED AND RESTATED 2002 STOCK OPTION PLAN

 

ARTICLE I

ESTABLISHMENT OF THE PLAN

 

Willow Financial Bancorp, Inc. (the “Corporation”), formerly known as Willow
Grove Bancorp, Inc., hereby amends and restates it 2002 Stock Option Plan (as
amended and restated, the “Plan”) upon the terms and conditions hereinafter
stated, with the amendment and restatement effective as of October 23, 2007.

 

ARTICLE II

PURPOSE OF THE PLAN

 

The purpose of this Plan is to improve the growth and profitability of the
Corporation and its Subsidiary Companies by providing Employees and Non-Employee
Directors with a proprietary interest in the Corporation as an incentive to
contribute to the success of the Corporation and its Subsidiary Companies, and
rewarding Employees and Non-Employee Directors for outstanding performance. All
Incentive Stock Options issued under this Plan are intended to comply with the
requirements of Section 422 of the Code and the regulations thereunder, and all
provisions hereunder shall be read, interpreted and applied with that purpose in
mind. Each recipient of an Option hereunder is advised to consult with his or
her personal tax advisor with respect to the tax consequences under federal,
state, local and other tax laws of the receipt and/or exercise of an Option
hereunder.

 

ARTICLE III

DEFINITIONS

 

The following words and phrases when used in this Plan with an initial capital
letter, unless the context clearly indicates otherwise, shall have the meanings
set forth below. Wherever appropriate, the masculine pronouns shall include the
feminine pronouns and the singular shall include the plural.

 

3.01        “Bank” means Willow Financial Bank, the wholly owned subsidiary of
the Corporation.

 

3.02        “Beneficiary” means the person or persons designated by an Optionee
to receive any benefits payable under the Plan in the event of such Optionee=s
death. Such person or persons shall be designated in writing on forms provided
for this purpose by the Committee and may be changed from time to time by
similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Optionee=s surviving spouse, if any,
or if none, his estate.

 

3.03        “Board” means the Board of Directors of the Corporation.

 

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3.04        “Change in Control” shall mean a change in the ownership of the
Corporation or the Bank, a change in the effective control of the Corporation or
the Bank or a change in the ownership of a substantial portion of the assets of
the Corporation or the Bank, in each case as provided under Section 409A of the
Code and the regulations thereunder.

 

3.05        “Code” means the Internal Revenue Code of 1986, as amended.

 

3.06        “Committee” means a committee of two or more directors appointed by
the Board pursuant to Article IV hereof, each of whom shall be a Non-Employee
Director (i) as defined in Rule 16b-3(b)(3)(i) of the Exchange Act or any
successor thereto, and (ii) within the meaning of Section 162(m) of the Code or
any successor thereto.

 

3.07        “Common Stock” means shares of the common stock, $0.01 par value per
share, of the Corporation.

 

3.08        “Disability” means in the case of any Optionee that the Optionee:
(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 Corporation or the Bank (or
would have received such benefits for at least three months if he had been
eligible to participate in such plan).

 

3.09        “Effective Date” means the day upon which the Board originally
adopted this Plan.

 

3.10        “Employee” means any person who is employed by the Corporation or a
Subsidiary Company, or is an Officer of the Corporation or a Subsidiary Company,
but not including directors who are not also Officers of or otherwise employed
by the Corporation or a Subsidiary Company.

 

3.11        “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

 

3.12        “Fair Market Value” shall be equal to the fair market value per
share of the Corporation’s Common Stock on the date an Option is granted. For
purposes hereof, the Fair Market Value of a share of Common Stock shall be the
closing sale price of a share of Common Stock on the date in question (or, if
such day is not a trading day in the U.S. markets, on the nearest preceding
trading day), as reported with respect to the principal market (or the composite
of the markets, if more than one) or national quotation system in which such
shares are then traded, or if no such closing prices are reported, the mean
between the high bid and low asked prices that day on the principal market or
national quotation system then in use. Notwithstanding the foregoing, if the
Common Stock is not readily tradable on an established securities market for
purposes of Section 409A of the Code, then the Fair Market Value shall be
determined by means of a reasonable valuation method that takes into
consideration all available information material to the value of the

 

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Corporation and that otherwise satisfies the requirements applicable under
Section 409A of the Code and the regulations thereunder.

 

3.13        “Incentive Stock Option” means any Option granted under this Plan
which the Board intends (at the time it is granted) to be an incentive stock
option within the meaning of Section 422 of the Code or any successor thereto.

 

3.14        “Non-Employee Director” means a member of the Boards of the
Corporation or any Subsidiary Company or any successor thereto, including an
advisory director or a director emeritus of the Boards of the Corporation and/or
any Subsidiary Company who is not an Officer or Employee of the Corporation or
any Subsidiary Company.

 

3.15        “Non-Qualified Option” means any Option granted under this Plan
which is not an Incentive Stock Option.

 

3.16        “Offering” means the offering of Common Stock to the public during
2002 in connection with the reorganization of the Bank from the mutual holding
company form to the stock holding company form of organization and the issuance
of the capital stock of the Bank to the Corporation.

 

3.17        “Officer” means an Employee whose position in the Corporation or
Subsidiary Company is that of a corporate officer, as determined by the Board.

 

3.18        “OTS” means the Office of Thrift Supervision.

 

3.19        “Option” means a right granted under this Plan to purchase Common
Stock.

 

3.20        “Optionee” means an Employee or Non-Employee Director or former
Employee or Non-Employee Director to whom an Option is granted under the Plan.

 

3.21        “Retirement” means a termination of employment which constitutes a
“retirement” under any applicable qualified pension benefit plan maintained by
the Corporation or a Subsidiary Company, or, if no such plan is applicable,
which would constitute “retirement” under the Corporation=s pension benefit
plan, if such individual were a participant in that plan. With respect to
Non-Employee Directors, retirement means retirement from service on the Board of
Directors of the Corporation or a Subsidiary Company or any successors thereto
after attaining the age of 65.

 

3.22        “Subsidiary Companies” means those subsidiaries of the Corporation,
including the Bank, which meet the definition of “subsidiary corporations” set
forth in Section 424(f) of the Code, at the time of granting of the Option in
question.

 

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ARTICLE IV

ADMINISTRATION OF THE PLAN

 

4.01        Duties of the Committee. The Plan shall be administered and
interpreted by the Committee, as appointed from time to time by the Board
pursuant to Section 4.02. The Committee shall have the authority to adopt, amend
and rescind such rules, regulations and procedures as, in its opinion, may be
advisable in the administration of the Plan, including, without limitation,
rules, regulations and procedures which (i) address matters regarding the
satisfaction of an Optionee’s tax withholding obligation pursuant to Section
12.02 hereof, (ii) include arrangements to facilitate the Optionee’s ability to
borrow funds for payment of the exercise or purchase price of an Option, if
applicable, from securities brokers and dealers, and (iii) subject to any legal
or regulatory restrictions or limitations, include arrangements which provide
for the payment of some or all of such exercise or purchase price by delivery of
previously owned shares of Common Stock or other property and/or by withholding
some of the shares of Common Stock which are being acquired. The interpretation
and construction by the Committee of any provisions of the Plan, any rule,
regulation or procedure adopted by it pursuant thereto or of any Option shall be
final and binding in the absence of action by the Board.

 

4.02        Appointment and Operation of the Committee. The members of the
Committee shall be appointed by, and will serve at the pleasure of, the Board.
The Board from time to time may remove members from, or add members to, the
Committee, provided the Committee shall continue to consist of two or more
members of the Board, each of whom shall be a Non-Employee Director, as defined
in Rule 16b-3(b)(3)(i) of the Exchange Act or any successor thereto. In
addition, each member of the Committee shall be an “outside director” within the
meaning of Section 162(m) of the Code and regulations thereunder at such times
as is required under such regulations. The Committee shall act by vote or
written consent of a majority of its members. Subject to the express provisions
and limitations of the Plan, the Committee may adopt such rules, regulations and
procedures as it deems appropriate for the conduct of its affairs. It may
appoint one of its members to be chairman and any person, whether or not a
member, to be its secretary or agent. The Committee shall report its actions and
decisions to the Board at appropriate times but in no event less than one time
per calendar year.

 

4.03        Revocation for Misconduct. The Board or the Committee may by
resolution immediately revoke, rescind and terminate any Option, or portion
thereof, to the extent not yet vested, previously granted or awarded under this
Plan to an Employee who is discharged from the employ of the Corporation or a
Subsidiary Company for cause, which, for purposes hereof, shall mean termination
because of the Employee’s 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.
Options granted to a Non-Employee Director who is removed for cause pursuant to
the Corporation’s Articles of Incorporation or Bylaws shall terminate as of the
effective date of such removal.

 

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4.04        Limitation on Liability. Neither the members of the Board nor any
member of the Committee shall be liable for any action or determination made in
good faith with respect to the Plan, any rule, regulation or procedure adopted
by it pursuant thereto or any Options granted under it. If a member of the Board
or the Committee is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of anything done or not
done by him in such capacity under or with respect to the Plan, the Corporation
shall, subject to the requirements of applicable laws and regulations, indemnify
such member against all liabilities and expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in the best interests of the
Corporation and its Subsidiary Companies and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful.

 

4.05        Compliance with Law and Regulations. All Options granted hereunder
shall be subject to all applicable federal and state laws, rules and regulations
and to such approvals by any government or regulatory agency as may be required.
The Corporation shall not be required to issue or deliver any certificates for
shares of Common Stock prior to the completion of any registration or
qualification of or obtaining of consents or approvals with respect to such
shares under any federal or state law or any rule or regulation of any
government body, which the Corporation shall, in its sole discretion, determine
to be necessary or advisable. Moreover, no Option may be exercised if such
exercise would be contrary to applicable laws and regulations.

 

4.06        Restrictions on Transfer. The Corporation may place a legend upon
any certificate representing shares acquired pursuant to an Option granted
hereunder noting that the transfer of such shares may be restricted by
applicable laws and regulations.

 

4.07        No Deferral of Compensation Under Section 409A of the Code. All
Options granted under the Plan are designed to not constitute a deferral of
compensation for purposes of Section 409A of the Code. Notwithstanding any other
provision in this Plan to the contrary, all of the terms and conditions of any
Options granted under this Plan shall be designed to satisfy the exemption for
stock options set forth in the regulations issued under Section 409A of the
Code. Both this Plan and the terms of all Options granted hereunder shall be
interpreted in a manner that requires compliance with all of the requirements of
the exemption for stock options set forth in the regulations issued under
Section 409A of the Code. No Optionee shall be permitted to defer the
recognition of income beyond the exercise date of a Non-Qualified Option or
beyond the date that the Common Stock received upon the exercise of an Incentive
Stock Option is sold.

 

ARTICLE V

ELIGIBILITY

 

Options may be granted to such Employees or Non-Employee Directors of the
Corporation and its Subsidiary Companies as may be designated from time to time
by the Board or the

 

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Committee. Options may not be granted to individuals who are not Employees or
Non-Employee Directors of either the Corporation or its Subsidiary Companies.
Non-Employee Directors shall be eligible to receive only Non-Qualified Options.

 

ARTICLE VI

COMMON STOCK COVERED BY THE PLAN

 

6.01        Option Shares. The aggregate number of shares of Common Stock which
may be issued pursuant to this Plan, subject to adjustment as provided in
Article IX, shall be 641,412. None of such shares shall be the subject of more
than one Option at any time, but if an Option as to any shares is surrendered
before exercise, or expires or terminates for any reason without having been
exercised in full, or for any other reason ceases to be exercisable, the number
of shares covered thereby shall again become available for grant under the Plan
as if no Options had been previously granted with respect to such shares. During
the time this Plan remains in effect, the aggregate grants of Options to each
Employee and each Non-Employee Director shall not exceed 25% and 5% of the
shares of Common Stock available under the Plan, respectively. Options granted
to Non-Employee Directors in the aggregate may not exceed 30% of the number of
shares available under this Plan.

 

6.02        Source of Shares. The shares of Common Stock issued under the Plan
may be authorized but unissued shares, treasury shares or shares purchased by
the Corporation on the open market or from private sources for use under the
Plan.

 

ARTICLE VII

DETERMINATION OF

OPTIONS, NUMBER OF SHARES, ETC.

 

The Board or the Committee shall, in its discretion, determine from time to time
which Employees or Non-Employee Directors will be granted Options under the
Plan, the number of shares of Common Stock subject to each Option, and whether
each Option will be an Incentive Stock Option or a Non-Qualified Option. In
making all such determinations there shall be taken into account the duties,
responsibilities and performance of each respective Employee, his present and
potential contributions to the growth and success of the Corporation, his salary
and such other factors as the Board or the Committee shall deem relevant to
accomplishing the purposes of the Plan. The Board or the Committee may but shall
not be required to request the written recommendation of the Chief Executive
Officer of the Corporation other than with respect to Options to be granted to
him.

 

ARTICLE VIII

OPTIONS

 

Each Option granted hereunder shall be on the following terms and conditions:

 

8.01        Stock Option Agreement. The proper Officers on behalf of the
Corporation and each Optionee shall execute a Stock Option Agreement which shall
set forth the total number of shares of Common Stock to which it pertains, the
exercise price, whether it is a Non-Qualified

 

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Option or an Incentive Stock Option, and such other terms, conditions,
restrictions and privileges as the Board or the Committee in each instance shall
deem appropriate, provided they are not inconsistent with the terms, conditions
and provisions of this Plan. Each Optionee shall receive a copy of his executed
Stock Option Agreement. Any Option granted with the intention that it will be an
Incentive Stock Option but which fails to satisfy a requirement for Incentive
Stock Options shall continue to be valid and shall be treated as a Non-Qualified
Option.

 

8.02        Option Exercise Price.

 

(a)           Incentive Stock Options. The per share price at which the subject
Common Stock may be purchased upon exercise of an Incentive Stock Option shall
be no less than one hundred percent (100%) of the Fair Market Value of a share
of Common Stock at the time such Incentive Stock Option is granted, except as
provided in Section 8.09(b).

 

(b)           Non-Qualified Options. The per share price at which the subject
Common Stock may be purchased upon exercise of a Non-Qualified Option shall be
no less than one hundred percent (100%) of the Fair Market Value of a share of
Common Stock at the time such Non-Qualified Option is granted.

 

8.03        Vesting and Exercise of Options.

 

(a)           General Rules. Incentive Stock Options and Non-Qualified Options
granted hereunder shall become vested and exercisable at the rate of 20% per
year over five years, commencing one year from the date of grant and an
additional 20% shall vest on each successive anniversary of the date the Option
was granted, and the right to exercise shall be cumulative. Notwithstanding the
foregoing, except as provided in Section 8.03(b) hereof, no vesting shall occur
on or after an Employee’s employment or service as a Non-Employee Director with
the Corporation or any of the Subsidiary Companies is terminated. In determining
the number of shares of Common Stock with respect to which Options are vested
and/or exercisable, fractional shares will be rounded down to the nearest whole
number, provided that such fractional shares shall be aggregated and deemed
vested on the final date of vesting.

 

(b)           Accelerated Vesting. Unless the Board or the Committee shall
specifically state otherwise at the time an Option is granted, all Options
granted under this Plan shall become vested and exercisable in full on the date
an Optionee terminates his employment with the Corporation or a Subsidiary
Company or service as a Non-Employee Director because of his death or Disability
or as of the effective date of a Change in Control. All Options hereunder shall
become immediately vested and exercisable in full on the date an Optionee
terminates his employment with the Corporation or a Subsidiary Company due to
Retirement if as of the date of such Retirement (i) such treatment is either
authorized or is not prohibited by applicable laws and regulations, or (ii) an
amendment to the Plan providing for such treatment has been approved by the
stockholders of the Corporation at a meeting of stockholders held more than one
year after the consummation of the Offering.

 

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8.04                        Duration of Options.

 

(a)           General Rule. Except as provided in Sections 8.04(b) and 8.09,
each Option or portion thereof granted to Employees and Non-Employee Directors
shall be exercisable at any time on or after it vests and becomes exercisable
until the earlier of (i) ten (10) years after its date of grant or (ii) six (6)
months after the date on which the Optionee ceases to be employed (or in the
service of the Board of Directors) by the Corporation and all Subsidiary
Companies, unless the Board of Directors or the Committee in its discretion
decides at the time of grant or thereafter to extend such period of exercise to
a period not exceeding three (3) years. In the event an Incentive Stock Option
is not exercised within 90 days of the effective date of termination of
Optionee’s status as an Employee, the tax treatment accorded Incentive Stock
Options by the Code may not be available.

 

(b)           Exception for Termination Due to Disability, Retirement, Change in
Control or Death. Unless the Board or the Committee shall specifically state
otherwise at the time an Option is granted: (i) if an Employee terminates his
employment with the Corporation or a Subsidiary Company as a result of
Disability or Retirement without having fully exercised his Options, the
Employee shall have the right, during the three (3) year period following his
termination due to Disability or Retirement, to exercise such Options, and (ii)
if a Non-Employee Director terminates his service as a director (including
service as an advisory director or director emeritus) with the Corporation or a
Subsidiary Company as a result of Disability or Retirement without having fully
exercised his Options, the Non-Employee Director shall have the right, during
the three (3) year period following his termination due to Disability or
Retirement, to exercise such Options.

 

Unless the Board or the Committee shall specifically state otherwise at the time
an Option is granted, if an Employee or Non-Employee Director terminates his
employment or service with the Corporation or a Subsidiary Company following a
Change in Control without having fully exercised his Options, the Optionee shall
have the right to exercise such Options during the remainder of the original ten
(10) year term (or five (5) year term for Options subject to Section 8.09(b)
hereof) of the Option from the date of grant.

 

If an Optionee dies while in the employ or service of the Corporation or a
Subsidiary Company or terminates employment or service with the Corporation or a
Subsidiary Company as a result of Disability or Retirement and dies without
having fully exercised his Options, the executors, administrators, legatees or
distributees of his estate shall have the right, during the one (1) year period
following his death, to exercise such Options.

 

In no event, however, shall any Option be exercisable more than ten (10) years
(five (5) years for Options subject to Section 8.09(b) hereof) from the date it
was granted.

 

8.05        Nonassignability. Options shall not be transferable by an Optionee
except by will or the laws of descent or distribution, and during an Optionee’s
lifetime shall be exercisable only by such Optionee or the Optionee’s guardian
or legal representative. Notwithstanding the foregoing, or any other provision
of this Plan, an Optionee who holds Non-Qualified Options may transfer such
Options to his immediate family or to a duly established trust for the benefit
of one or more of these

 

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individuals. For purposes hereof, “immediate family” includes but is not
necessarily limited to, the Participant’s spouse, children (including step
children), parents, grandchildren and great grandchildren. Options so
transferred may thereafter be transferred only to the Optionee who originally
received the grant or to an individual or trust to whom the Optionee could have
initially transferred the Option pursuant to this Section 8.05. Options which
are transferred pursuant to this Section 8.05 shall be exercisable by the
transferee according to the same terms and conditions as applied to the
Optionee.

 

8.06        Manner of Exercise. Options may be exercised in part or in whole and
at one time or from time to time. The procedures for exercise shall be set forth
in the written Stock Option Agreement provided for in Section 8.01 above.

 

8.07        Payment for Shares. Payment in full of the purchase price for shares
of Common Stock purchased pursuant to the exercise of any Option shall be made
to the Corporation upon exercise of the Option. All shares sold under the Plan
shall be fully paid and nonassessable. Payment for shares may be made by the
Optionee (i) in cash or by check, (ii) by delivery of a properly executed
exercise notice, together with irrevocable instructions to a broker to sell the
shares and then to properly deliver to the Corporation the amount of sale
proceeds to pay the exercise price, all in accordance with applicable laws and
regulations, or (iii) at the discretion of the Board or the Committee, by
delivering shares of Common Stock (including shares acquired pursuant to the
exercise of an Option) equal in Fair Market Value to the purchase price of the
shares to be acquired pursuant to the Option, by withholding some of the shares
of Common Stock which are being purchased upon exercise of an Option, or any
combination of the foregoing. With respect to subclause (iii) hereof, the shares
of Common Stock delivered to pay the purchase price must have either been (x)
purchased in open market transactions or (y) issued by the Corporation pursuant
to a plan thereof more than six months prior to the exercise date of the Option
(or one year in the case of previously exercised Incentive Stock Options).

 

8.08        Voting and Dividend Rights. No Optionee shall have any voting or
dividend rights or other rights of a stockholder in respect of any shares of
Common Stock covered by an Option prior to the time that his name is recorded on
the Corporation’s stockholder ledger as the holder of record of such shares
acquired pursuant to an exercise of an Option.

 

8.09        Additional Terms Applicable to Incentive Stock Options. All Options
issued under the Plan as Incentive Stock Options will be subject, in addition to
the terms detailed in Sections 8.01 to 8.08 above, to those contained in this
Section 8.09.

 

(a)           Notwithstanding any contrary provisions contained elsewhere in
this Plan and as long as required by Section 422 of the Code, the aggregate Fair
Market Value, determined as of the time an Incentive Stock Option is granted, of
the Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by the Optionee during any calendar year, under this Plan and
stock options that satisfy the requirements of Section 422 of the Code under any
other stock 2002 Option Plan or plans maintained by the Corporation (or any
parent or Subsidiary Company), shall not exceed $100,000.

 

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(b)           Limitation on Ten Percent Stockholders. The price at which shares
of Common Stock may be purchased upon exercise of an Incentive Stock Option
granted to an individual who, at the time such Incentive Stock Option is
granted, owns, directly or indirectly, more than ten percent (10%) of the total
combined voting power of all classes of stock issued to stockholders of the
Corporation or any Subsidiary Company, shall be no less than one hundred and ten
percent (110%) of the Fair Market Value of a share of the Common Stock of the
Corporation at the time of grant, and such Incentive Stock Option shall by its
terms not be exercisable after the earlier of the date determined under Section
8.04 or the expiration of five (5) years from the date such Incentive Stock
Option is granted.

 

(c)           Notice of Disposition; Withholding; Escrow. An Optionee shall
immediately notify the Corporation in writing of any sale, transfer, assignment
or other disposition (or action constituting a disqualifying disposition within
the meaning of Section 421 of the Code) of any shares of Common Stock acquired
through exercise of an Incentive Stock Option, within two (2) years after the
grant of such Incentive Stock Option or within one (1) year after the
acquisition of such shares, setting forth the date and manner of disposition,
the number of shares disposed of and the price at which such shares were
disposed of. The Corporation shall be entitled to withhold from any compensation
or other payments then or thereafter due to the Optionee such amounts as may be
necessary to satisfy any withholding requirements of federal or state law or
regulation and, further, to collect from the Optionee any additional amounts
which may be required for such purpose. The Committee may, in its discretion,
require shares of Common Stock acquired by an Optionee upon exercise of an
Incentive Stock Option to be held in an escrow arrangement for the purpose of
enabling compliance with the provisions of this Section 8.09(c).

 

ARTICLE IX

ADJUSTMENTS FOR CAPITAL CHANGES

 

9.01 General Adjustments. The aggregate number of shares of Common Stock
available for issuance under this Plan, the number of shares to which any Option
relates, the maximum number of shares that can be covered by Options to each
Employee, each Non-Employee Director and Non-Employee Directors as a group and
the exercise price per share of Common Stock under any Option shall be
proportionately adjusted for any increase or decrease in the total number of
outstanding shares of Common Stock issued subsequent to the Effective Date of
this Plan resulting from a split, subdivision or consolidation of shares or any
other capital adjustment, the payment of a stock dividend, or other increase or
decrease in such shares effected without receipt or payment of consideration by
the Corporation.

 

9.02 Adjustments for Mergers and Other Corporate Transactions. If, upon a
merger, consolidation, reorganization, liquidation, recapitalization or the like
of the Corporation, the shares of the Corporation’s Common Stock shall be
exchanged for other securities of the Corporation or of another corporation,
each Option shall be converted, subject to the conditions herein stated, into
the right to purchase or acquire such number of shares of Common Stock or amount
of other securities of the Corporation or such other corporation as were
exchangeable for the number of shares of

 

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Common Stock of the Corporation which such Optionees would have been entitled to
purchase or acquire except for such action, and appropriate adjustments shall be
made to the per share exercise price of outstanding Options, provided that in
each case the number of shares or other securities subject to the substituted or
assumed stock options and the exercise price thereof shall be determined in a
manner that satisfies the requirements of Treasury Regulation §1.424-1 and the
regulations issued under Section 409A of the Code so that the substituted or
assumed option is not deemed to be a modification of the outstanding Options.

 

ARTICLE X

AMENDMENT AND TERMINATION OF THE PLAN

 

The Board may, by resolution, at any time terminate or amend the Plan with
respect to any shares of Common Stock as to which Options have not been granted,
subject to regulations of the OTS and any required stockholder approval or any
stockholder approval which the Board may deem to be advisable for any reason,
such as for the purpose of obtaining or retaining any statutory or regulatory
benefits under tax, securities or other laws or satisfying any applicable stock
exchange listing requirements. The Board may not, without the consent of the
holder of an Option, alter or impair any Option previously granted or awarded
under this Plan as specifically authorized herein.

 

ARTICLE XI

EMPLOYMENT RIGHTS

 

Neither the Plan nor the grant of any Options hereunder nor any action taken by
the Committee or the Board in connection with the Plan shall create any right on
the part of any Employee or Non-Employee Director of the Corporation or a
Subsidiary Company to continue in such capacity.

 

ARTICLE XII

WITHHOLDING

 

12.01      Tax Withholding. The Corporation may withhold from any cash payment
made under this Plan sufficient amounts to cover any applicable withholding and
employment taxes, and if the amount of such cash payment is insufficient, the
Corporation may require the Optionee to pay to the Corporation the amount
required to be withheld as a condition to delivering the shares acquired
pursuant to an Option. The Corporation also may withhold or collect amounts with
respect to a disqualifying disposition of shares of Common Stock acquired
pursuant to exercise of an Incentive Stock Option, as provided in Section
8.09(c).

 

12.02      Methods of Tax Withholding. The Board or the Committee is authorized
to adopt rules, regulations or procedures which provide for the satisfaction of
an Optionee’s tax withholding obligation by the retention of shares of Common
Stock to which the Employee would otherwise be entitled pursuant to an Option
and/or by the Optionee’s delivery of previously owned shares of Common Stock or
other property.

 

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ARTICLE XIII

EFFECTIVE DATE OF THE PLAN; TERM

 

13.01      Effective Date of the Plan. This Plan shall become effective on the
Effective Date, and Options may be granted hereunder no earlier than the date
this Plan is approved by stockholders and no later than the termination of the
Plan, provided this Plan is approved by stockholders of the Corporation pursuant
to Article XIV hereof. The amendment and restatement of this Plan was adopted
effective as of October 23, 2007.

 

13.02      Term of Plan. Unless sooner terminated, this Plan shall remain in
effect for a period of ten (10) years ending on the tenth anniversary of the
Effective Date. Termination of the Plan shall not affect any Options previously
granted and such Options shall remain valid and in effect until they have been
fully exercised or earned, are surrendered or by their terms expire or are
forfeited.

 

ARTICLE XIV

STOCKHOLDER APPROVAL

 

The stockholders of the Corporation approved this Plan as originally adopted at
a meeting of stockholders of the Corporation held within twelve (12) months
following the Effective Date in order to meet the requirements of (i) Section
422 of the Code and regulations thereunder, (ii) Section 162(m) of the Code and
regulations thereunder, and (iii) the Nasdaq Stock Market for continued
quotation of the Common Stock on the Nasdaq National Market.

 

ARTICLE XV

MISCELLANEOUS

 

15.01      Governing Law. To the extent not governed by federal law, this Plan
shall be construed under the laws of the Commonwealth of Pennsylvania.

 

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