Exhibit 10.2
AMENDMENT
TO EMPLOYMENT AGREEMENT
     AGREEMENT made this 18th day of February 2009, by and between ROYAL
BANCSHARES OF PENNSYLVANIA, INC. (“Corporation”), a Pennsylvania business
corporation having a place of business at 732 Montgomery Avenue, Narberth,
Pennsylvania 19072, ROYAL BANK AMERICA (“Bank”), a state chartered bank having a
place of business at 732 Montgomery Avenue, Narberth Pennsylvania 19072, and
JAMES J. MCSWIGGAN, JR. (“Executive”), an individual residing at 211 Twinings
Lane, Wayne, PA 19087.
WITNESSETH:
     WHEREAS, Corporation, Bank, and Executive are presently parties to an
employment agreement, dated September 22, 2006 (the “Employment Agreement”); and
     WHEREAS, Corporation, Bank, and Executive desire to amend the Employment
Agreement to cover, among other things, the Executive’s appointment as both
President and Chief Operating Officer of Corporation and Bank, by executing this
document (the “Amendment”), effective December 25, 2008.
     NOW, THEREFORE, in consideration of the premises and intending to be
legally bound hereby, the parties agree that the Employment Agreement, be
further amended and interpreted as follows, effective December 25, 2008:
     1.     Appointment as President. Effective December 25, 2008, and in
addition to the titles presently provided in the Employment Agreement, the
Executive is appointed as President of Corporation and Bank. In such position,
the Executive shall report to the Board of Directors of Corporation and Bank,
and shall have such duties and responsibilities as may be assigned to Executive
from time to time by the Board of Directors of Corporation and Bank, including,
but not limited to, those set forth in Exhibit A of this Amendment, which may be
amended from time to time by the Board of Directors of Corporation and Bank.
     2.     Salary while President. Effective January 2, 2009, during the period
in which Executive serves as President of Corporation and Bank and in lieu of
the amount provided in Section 4(a) of the Employment Agreement, Executive’s
salary shall be an annual rate of $325,000, payable at the same times as
salaries are payable to other executive employees of Corporation or Bank (the
“Annual Base Salary”). Executive’s Annual Base Salary under this Section 2 shall
be subject to adjustment in accordance with the following:

  (a)   If Corporation’s return on assets (“ROA”) for a given year is at least
.5% AND if Corporation’s return on equity (“ROE”) for a given year is at least
4%, Executive’s base salary for the subsequent year shall be increased to
$335,000;

  (b)   If Corporation’s ROA for a given year is at least .7% AND if
Corporation’s ROE for a given year is at least 6%, Executive’s base salary for
the subsequent year shall be increased to $345,000;

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  (c)   If Corporation’s ROA for a given year is at least .9% AND if
Corporation’s ROE for a given year is at least 8%, Executive’s base salary for
the subsequent year shall be increased to $355,000;

  (d)   If Corporation’s ROA for a given year is at least 1.2% AND if
Corporation’s ROE for a given year is at least 11%, Executive’s base salary for
the subsequent year shall be increased to $365,000; and

  (e)   If Corporation’s ROA for a given year is at least 1.5% AND if
Corporation’s ROE for a given year is at least 15%, Executive’s base salary for
the subsequent year shall be increased to $375,000.

     The following chart is provided as a summary recap of the foregoing terms
and is intended to serve as an example only:

                                                  Performance Ratios   Beginning
Base   ROA — 0.5%
ROE — 4.0%   ROA — 0.7%
ROE — 6.0%   ROA — 0.9%
ROE — 8.0%   ROA — 1.2%
ROE — 11.0%   ROA — 1.5%
ROE — 15.0%
 
                           
Fixed Base (Resets & Locks at)
  $ 325,000     $ 335,000     $ 345,000     $ 355,000     $ 365,000     $
375,000  

     Executive’s Annual Base Salary, if increased under this Section because of
the achievement of any of the foregoing performance ratios in a given year,
shall not be decreased because of a failure to achieve such performance ratios
in a subsequent year.
     Notwithstanding the foregoing, the Executive shall not be entitled to
receive any increases under this Section unless and until the shareholder cash
dividend program with respect to Corporation’s Class A common stock is put in
effect; provided, however, that if such a shareholder dividend program could be
put back into effect as a result of the favorable economic condition of
Corporation and Bank and under applicable legal requirements, but the Board of
Directors of Corporation fails to declare a cash dividend, this paragraph shall
be null and void.
     3.     Annual Review while President. During the period in which Executive
serves as President of Corporation and Bank, the Board of Directors of
Corporation and/or Bank shall conduct an annual evaluation of the performance of
Executive. The Chairman of the Board of Directors of Corporation shall
communicate the results of such review to Executive.
     4.     Effect of This Amendment on Employment Agreement Generally. Except
as otherwise provided herein, the Employment Agreement shall continue in full
force and effect, including, without limitation, the covenant not to compete and
the non-solicitation of customers and employees provisions of Section 9 of the
Employment Agreement. Further, in the case of doubt, the Employment Agreement
shall prospectively be reasonably construed in a manner consistent with the
intent of this Amendment.

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     IN WITNESS WHEREOF, the parties have executed this Amendment, or caused it
to be executed, as of February 18, 2009.

            ROYAL BANCSHARES OF PENNSYLVANIA, INC.
      By:   /s/ Robert R. Tabas         Name:   Robert R. Tabas        Title:  
Chairman and Chief Executive Officer     

“Company”

            ROYAL BANK AMERICA
      By:   /s/ Robert R. Tabas         Name:   Robert R. Tabas        Title:  
Chairman and Chief Executive Officer     

“Bank”

                     /s/ James J. McSiwggan, Jr.            James J. McSwiggan,
Jr.             

“Executive”

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EXHIBIT A
Duties and Responsibilities

             
Position Title:
  President and COO   Department:    
Reports To:
  Chairman and CEO   Division:    
 
           

JOB SUMMARY:

•   Direct responsibility for managing the ongoing operations of the Corporation
to achieve financial stability and profitability.

•   Key participant in Corporation’s strategic planning and execution.

•   Directly manages a significant portion of the Corporation’s line and staff
operations.

•   Maintains a minimum of 40 hour per week as part of the responsibilities of
the President and Chief Operating Officer position, with required additional
time to meet the requirements and objectives of the position.

•   Reports to the Chairman of the Board of Directors of Corporation and/or Bank
and the Board of Directors of Corporation and/or Bank.

POSITION RESPONSIBILITIES:

1.   Provides key input as a member of the executive management team in the
following areas (as reflected in the Bank’s Organization Chart as approved by
the Board):

  a.   Participates in all strategic planning and execution

  b.   Provides key input and makes decisions at operational levels on a
majority of the lines of businesses in the Company

  c.   Is the key position for all compliance and regulatory issues, makes
decisions as applicable and discusses high level decisions with entire team

  d.   Has significant responsibility in all Company Committees including Chair
of the Rate Committee and Co-Chair of the Executive Loan Committee

  e.   Ensures that Board and staff have sufficient and up-to-date information
to perform their roles

2.   Oversees and manages overall Company performance:

  a.   Through the management team, oversees revenue, profit, growth, and lines
of business performance

  b.   Through the management team, oversees efficiency, customer service,
quality, creation and delivery of products

3.   Ensures that budgets, business plans, and projects are developed,
communicated, and executed according to the Company’s strategy:

  a.   Establishes budgets and schedules to meet strategy

  b.   Meets regularly with project teams and department heads to ensure that
plans and goals are clear, follows up on plan execution, facilitates resolution
of issues, evaluates and rewards people

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  c.   Establishes standards of performance, conducts performance reviews on
direct reports, and develops performance improvement plans for senior team
members

  d.   Ensures that an annual plan and budget are prepared and presented to the
Board

  e.   Communicates all business plans, decisions, and expectations throughout
the Company via a variety of communication methods

4.   Allocates and manages resources, primarily staff, sufficient to meet
business plan requirements:

  a.   Forecasts staff needs and staffs accordingly

  b.   Selects and develops capable managers; conducts/oversees individual
performance appraisals and compensation levels

  c.   Holds staff accountable for attaining respective performance objectives
and complying with established policies

  d.   Manages overall staffing resources for the Company by hiring, rewarding,
promoting, disciplining, terminating all company employees as necessary to meet
the business plans and budgets

5.   Has direct oversight of the finance and bank investment functions:

  a.   Through dotted line authority helps to manage the CFO for financial
integrity of all systems, reports, and compliance

  b.   Oversees asset/liability function

  c.   Oversees bank investment portfolio

  d.   Oversees all financial controls

  e.   Oversees all financial reporting and accounting, ensuring accuracy,
timeliness, and compliance

  f.   Certifies to the Chairman/CEO the accuracy of all financial regulatory
filings based on review with CFO and certifies Corporation financial statements
to Chairman of Board of Directors and Chief Executive Officer of Corporation.

6.   Has direct oversight of support operating areas:

  a.   Directly manages EVP of support areas for efficient operations of
respective functions and EVP position created specifically to assist President
and Chief Operating Officer

  b.   Oversees loan accounting

  c.   Oversees operations and information technology

  d.   Oversees company wide risk management

  e.   Oversees subsidiaries including tax lien, leasing, and RBA Capital

7.   Manages special projects:

  a.   Performs market analysis and environmental scanning for opportunities

  b.   Identifies acquisition and merger opportunities

  c.   Assists with capital acquisition and capital development

  d.   Performs all financial analysis applicable to opportunities

  e.   Negotiates purchase and sale agreements

  f.   Assists in joint venture/investor negotiations

8.   Has direct oversight of asset quality via the Credit function:

  a.   Through dotted line authority helps to manage the Chief Credit Officer
for appropriate asset quality

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  b.   Oversees lending policy relative to credit quality

  c.   Oversees loan approval process

  d.   Oversees loan delinquency

  e.   Oversees loan documentation

9.   Has direct oversight of the Special Assets function which provides workout
and recovery work on assets in collection/recovery status; manages the manager
of this function.

10.   Has direct oversight of the Retail/Branch function of the Bank:

  a.   Manages the executive in charge of the Retail Branch function for the
efficient delivery of all retail products to customers

  b.   Oversees all branch operations and administration

  c.   Oversees all regulatory compliance in the deposit area

  d.   Oversees all security

  e.   Oversees all facilities

  f.   Oversees all retail product development, management, and monitoring

  g.   Oversees all retail market trends and competitive environment

11.   On a periodic and as available basis, represents the Company in the
external marketplace in community events, business functions, and with a wide
variety of customers and potential customers in promoting the Company’s image
and brand.

12.   Participates and handles other responsibilities as required to properly
manage the Company in the best interests of the shareholders and as prescribed
in writing from time to time by the Chairman or Board of Directors.

Job Description Review / Evaluation
Type of Evaluation

    o Position Description Qualitative Evaluation Completed

    o Other

             
Date Completed:
      By Whom Completed:    
Approved By
      On    
 
  Chairman of the Board       Date

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