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.


 

















 


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


 


8

















 


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.


 


9

















 


(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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