Exhibit 10.17


 


AMENDED AND RESTATED EMPLOYMENT AGREEMENT


 


THIS AMENDED
AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of October 23,
2007 and is between Willow Financial Bank, a federally chartered savings bank
(the “Bank” or the “Employer”), and Thomas Saunders (the “Executive”).


 


WITNESSETH


 


WHEREAS, the
Executive is currently employed as the Executive Commercial Sales Manager of
the Bank, and the Bank and the Executive have previously entered into an
employment agreement dated June 8, 2007 (the “Prior Agreement”);


 


WHEREAS, the
Bank desires to amend and restate the Prior Agreement in order to make changes
to comply with Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), as well as certain other changes; and


 


WHEREAS, in
order to induce the Executive to remain in the employ of 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. “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.


 

















 


(e)           Corporation.
“Corporation” shall mean Willow Financial Bancorp, Inc., a
Pennsylvania corporation and the parent holding company of the Bank.


 


(f)            Date of Termination. “Date of Termination”
shall mean (i) if the Executive’s employment is terminated for Cause, the date on
which the Notice of Termination is given, (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 specified in such
Notice of Termination.


 


(g)           Disability. “Disability” shall mean 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 Employer.


 


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


 


(i)            Good Reason. Termination by the Executive
of the Executive’s employment for “Good Reason” shall mean termination by the
Executive based on the occurrence of any of the following events:


 


(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 as prescribed in Section 2, or (C) a material diminution in
the authority, duties or responsibilities of the officer 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 Employer within ninety (90) days of the initial
existence of the condition, describing the existence of such condition, and the
Employer shall thereafter have the right to remedy the condition within thirty
(30) days of the date the Employer received the written notice from the
Executive. If the Employer remedies the condition within such thirty (30) day
cure period, then no Good Reason shall be deemed to exist with respect to such
condition. If the Employer does not remedy the condition within such thirty
(30) day cure period, then the Executive may deliver a Notice of Termination
for Good Reason at any time within sixty (60) days following the expiration of
such cure period.


 


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


 


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(k)           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 a 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 the 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 19(a) hereof; and (iv) is given in the manner
specified in Section 11 hereof.


 


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


 


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


 


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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 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.


 


(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.


 


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(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.
Such reimbursement shall be paid promptly by the Employer and in any event no later
than March 15 of the year immediately following the year in which such expenses
were incurred.


 


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 or Good
Reason, 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.


 


(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.


 


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(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 for Good Reason, 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.


 


(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 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 occurs on or before June 30, 2009 and one
(1) times the Executive’s Average Annual Compensation if the Change in Control
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 occurs on or before June
30, 2009 and one (1) year subsequent to the Date of Termination if the Change
in Control 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 was participating immediately prior to the Date of Termination;
provided that any insurance premiums payable by the Employer or any successors
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; and provided further that if
the Executive’s participation in any group insurance plan is barred, the
Employer shall either arrange to provide the Executive with insurance benefits
substantially similar to those which the Executive was entitled to receive
under such group insurance plan or, if such coverage cannot be obtained, pay a
lump sum cash equivalency amount within thirty (30) days following the Date of
Termination based on the annualized rate of premiums being paid by the Employer
as of the Date of Termination; and


 


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(C)           pay
to the Executive, in a lump sum within thirty (30) days following the Date of
Termination, a cash amount equal to the projected cost to the Employer of
providing benefits to the Executive for a period of two (2) years if the Change
in Control occurs on or before June 30, 2009 and one (1) year if the Change in
Control occurs after June 30, 2009 
pursuant to any other employee benefit plans, programs or arrangements
offered by the Employer in which the Executive was entitled to participate
immediately prior to the Date of Termination (excluding (y) stock option plans,
restricted stock plans and employee stock ownership plans of the Employer and
(z) bonuses and other items of cash compensation), with the projected cost to
the Employer to be based on the costs incurred for the calendar year
immediately preceding the year in which the Date of Termination occurs and with
any automobile-related costs to exclude any depreciation on Bank-owned
automobiles.


 


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 minimum amount 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, 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.


 


(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


 


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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.


 


(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.


 


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 South
  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


 


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Executive and such officer or
officers as may be specifically designated by the Board of Directors of the
Employer to sign on its behalf. 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. In addition, notwithstanding anything in this
Agreement to the contrary, the Employer may amend in good faith any terms of
this Agreement, including retroactively, in order to comply with Section 409A
of the Code.


 


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.          Changes in Statutes or Regulations. If any statutory or
regulation provision referenced herein is subsequently changed or re-numbered,
or is replaced by a separate provision, then the references in this Agreement
to such statutory or regulatory provision shall be deemed to be a reference to
such section as amended, re-numbered or replaced.


 


18.          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.


 


19.          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


 


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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.


 


(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.


 


20.          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.


 


21.          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.


 


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22.          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, including the
Prior Agreement, are hereby superseded and shall have no force or effect.


 


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


 


	
  Attest:

  	
  WILLOW
  FINANCIAL BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Joseph T.
  Crowley

  	
   

  	
  By:

  	
  /s/ Donna M.
  Coughey

  	
   

  
	
  Joseph T.
  Crowley

  	
   

  	
  Donna M.
  Coughey

  
	
  Senior Vice
  President,

  	
   

  	
  President
  and Chief Executive Officer

  
	
  Chief Financial Officer and

  	
   

  	
   

  
	
  Corporate Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas
  Saunders

  	
   

  
	
   

  	
   

  	
  Thomas Saunders

  	
   

  
							



 


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