Exhibit 10.6


 


AMENDED AND RESTATED CHANGE IN CONTROL SEVERANCE AGREEMENT

BETWEEN WILLOW FINANCIAL BANK AND NEELESH KALANI


 


THIS AMENDED
AND RESTATED CHANGE IN CONTROL SEVERANCE 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 Neelesh Kalani (the “Officer”).


 


WITNESSETH


 


WHEREAS, the
Bank was previously known as Willow Grove Bank;


 


WHEREAS, the
Officer is currently employed by the Bank, and the Bank and the Officer have
previously entered into a change in control severance agreement dated January
18, 2006 (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 Officer to be employed by the Employer and in consideration
of the Officer’s agreeing to be employed by the Employer, the parties desire to
specify the severance benefits which shall be due the Officer 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 Officer’s “Average Annual
Compensation” for purposes of this Agreement shall be deemed to mean the
average amount of Base Salary and cash bonus paid to the Officer 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 Officer was employed).


 


(b)                                 Cause. Termination of the Officer’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, 


 

















 


willful conduct which is
materially detrimental (monetarily or otherwise) to the Employer  or material breach of any provision of this Agreement.


 


(c)                                  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.


 


(d)                                 Corporation. “Corporation” shall mean Willow
Financial Bancorp, Inc.


 


(e)                                  Date of Termination. “Date of Termination”
shall mean (i) if the Officer’s employment is terminated for Cause, the date on
which the Notice of Termination is given, (ii) if the Officer’s employment is
terminated due to his death, the date of death, and (iii) if the Officer’s
employment is terminated for any other reason, the date specified in such Notice
of Notice.


 


(f)                                    Disability. “Disability” shall mean the
Officer (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.


 


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


 


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


 


(i) (A) a material diminution in the Officer’s base compensation as in
effect immediately prior to the date of the Change in Control or as the same
may be increased from time to time thereafter, (B) a material diminution in the
Officer’s authority, duties or responsibilities as in effect immediately prior
to the Change in Control, or (C) a material diminution in the authority, duties
or responsibilities of the officer (as in effect immediately prior to the date
of the Change in Control) to whom the Officer is required to report immediately
prior to the Change in Control,


 


(ii) any material breach of this Agreement by the Employer, or


 


(iii) any material change in the geographic location at which the
Officer must perform his services under this Agreement immediately prior to the
Change in Control;


 


provided, however, that prior
to any termination of employment for Good Reason, the Officer must first
provide written notice to the Employer within ninety (90) days of the initial
existence of the 


 


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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 Officer. 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 Officer may deliver a Notice
of Termination for Good Reason at any time within sixty (60) days following the
expiration of such cure period.


 


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


 


(j)                                     Notice of Termination. Any purported
termination of the Officer’s employment by the Employer for any reason,
including without limitation for Cause, Disability or Retirement, or by the Officer
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 Officer’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 Officer’s
employment for Cause, which shall be effective immediately, and except as set
forth in Section 17(a) hereof; and (iv) is given in the manner specified in
Section 8 hereof.


 


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


 


2.                                      Benefits
Upon Termination.


 


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


 


(b)                                 Non Change in Control Termination. In the event that (i) the
Officer’s employment is terminated due to Cause, Death, Disability, Retirement,
or any other reason unrelated to a Change in Control, or (ii) the officer
elects to terminate his employment for other than Good Reason, then the Officer
shall have no right pursuant to this Agreement to compensation or other
benefits for any period after the applicable Date of Termination.


 


(c)                                  Change in Control Termination. In the event that (i) the Officer’s
employment is terminated concurrently with or within twelve (12) months
following a Change in Control for other than Cause, Disability, Retirement or
the Officer’s death, or (ii) the Officer elects to terminate his employment for
Good Reason, then the Employer shall, subject to the provisions of Sections 3 and
4 hereof, if applicable,


 


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(A)                              pay
to the Officer, in twelve (12) equal monthly installments commencing with the
first business day of the month immediately following the Date of Termination, a
cash severance amount equal to one (1) times the Officer’s Average Annual
Compensation; provided that if the aggregate amount of such installment
payments would exceed two times the lesser of the amounts specified in
subsections (1) and (2) of Treasury Regulation §1.409A-1(b)(9)(iii)(A), then
the monthly installments shall not commence until the first business day of the
month following the lapse of six months from the Date of Termination (the “Delayed
Payment Date”), with the monthly installments that would have been paid prior
to the Delayed Payment Date absent the six-month delay required by Section 409A
of the Code to be aggregated and included in the payment made on the Delayed
Payment Date and to be counted toward the total of twelve (12) monthly
installments; and


 


(B)                                maintain
and provide for a period ending at the earlier of (i) one year subsequent to
the Date of Termination or (ii) the date of the Officer’s full-time employment
by another employer (provided that the Officer is entitled under the terms of
such employment to benefits substantially similar to those described in this
subparagraph (B)), at no cost to the Officer, the Officer’s continued
participation in all group insurance, life insurance, health and accident
insurance and disability insurance in which the Officer 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 2(c)(B) shall be
payable at such times and in such amounts as if the Officer 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 Officer’s participation in any group
insurance plan is barred, the Employer shall either arrange to provide the
Officer with insurance benefits substantially similar to those which the
Officer 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.


 


3.                                      Limitation
of Benefits under Certain Circumstances. If the payments and benefits
pursuant to Section 2 hereof, either alone or together with other payments and
benefits which the Officer 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 2 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 2 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 2 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 2 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 


 


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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 3 shall result in
a reduction of any payments or benefits to which the Officer may be entitled
upon termination of employment under any circumstances other than as specified
in this Section 3, or a reduction in the payments and benefits specified in
Section 2 below zero.


 


4.                                      Mitigation;
Exclusivity of Benefits.


 


(a)                                  The
Officer shall not be required to mitigate the amount of any benefits hereunder
by seeking other employment or otherwise. However, the amount of severance
compensation payable by the Employer under Section 2(c)(A) shall be reduced to
the extent the Officer earns compensation from any source for services rendered
by the Officer within one year following the Date of Termination. If the
Officer obtains subsequent employment or earns other compensation for services
rendered within the first year following the Date of Termination, then the
Officer agrees to provide written notice to the Employer or any successor
within ten (10) business days of the date the Officer obtains such employment
or earns such compensation, including the amount of compensation earned.


 


(b)                                 The
specific arrangements referred to herein are not intended to exclude any other
benefits which may be available to the Officer upon a termination of employment
with the Employer pursuant to employee benefit plans of the Employer or
otherwise.


 


5.                                      Withholding.
All payments required to be made by the Employer hereunder to the Officer
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.


 


6.                                      Competitive
Activities


 


(a)                                  The
Officer 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 Officer is capable of performing for the
Employer or one of its competitors, the Officer 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 Officer 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 Officer 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.


 


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(c)                                  The
Officer 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 Officer 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 Officer’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 Officer 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.


 


(e)                                  The
Employer shall be entitled to immediate injunctive or other equitable relief to
restrain the Officer from failing to comply with any obligation under this
Section 6, 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 Officer’s employment.


 


(f)                                    The
Officer acknowledges that the restrictions contained in this Section 6 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 Officer acknowledges that, if the Officer 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 Officer
further acknowledges that the provisions of Sections 6(a), (b), (c), (e) and (f)
shall remain in full force and effect beyond the termination of the Officer’s
employment for any reason, including but not limited to termination in
connection with or following a Change in Control.


 


7.                                      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 Officer may not
assign or transfer this Agreement or any rights or obligations hereunder.


 


8.                                      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:


 


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  To the Employer:

  	
   

  	
  Secretary

  
	
   

  	
   

  	
  Willow Financial Bank

  
	
   

  	
   

  	
  170 South Warner Road

  
	
   

  	
   

  	
  Wayne, Pennsylvania 19087

  
	
   

  	
   

  	
   

  
	
  To the Officer:

  	
   

  	
  Neelesh Kalani

  
	
   

  	
   

  	
  At his last address on file with

  
	
   

  	
   

  	
  the Employer

  



 


9.                                      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 Officer 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.


 


10.                               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.


 


11.                               Nature
of Employment and Obligations.


 


(a)                                  Nothing
contained herein shall be deemed to create other than a terminable at will
employment relationship between the Employer and the Officer, and the Employer
may terminate the Officer’s employment at any time, subject to providing any
payments specified herein in accordance with the terms hereof.


 


(b)                                 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 Officer 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.


 


12.                               Term
of Agreement. The term of this Agreement shall run from the Effective Date
through and including June 30, 2008. Prior to July 1, 2008 and each July 1
thereafter, this Agreement shall extend for an additional year until such time
as the Board of Directors of the Employer or the Officer gives notice in accordance
with the terms of Section 8 hereof of its or his election, respectively, not to
extend the terms of this Agreement. Such written notice of the election not to
extend must be given 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.


 


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13.                               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.


 


14.                               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.


 


15.                               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.


 


16.                               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.


 


17.                               Regulatory
Actions. The following provisions shall be applicable to the parties to the
extent that they are required to be included in 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 2 hereof.


 


(a)                                  The
Bank’s Board of Directors may terminate the Officer’s employment at any time,
but any termination by the Bank’s Board of Directors, other than termination
for Cause, shall not prejudice the Officer’s right to compensation or other
benefits under this Agreement.


 


(b)                                 If
the Officer is suspended from office and/or temporarily prohibited from
participating in the conduct of the Employer’s affairs by a notice served under
Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit Insurance Act (“FDIA”)
(12 U.S.C. §1818(e)(3) and 1818(g)(1)), the Employer’s obligations under this
Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the
Employer may, in its discretion:  (i) pay
the Officer 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 Officer 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 Officer 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 Officer and the Employer as of the date of termination
shall not be affected.


 


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(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 Officer and the Employer as of the date of termination
shall not be affected.


 


18.                               Regulatory
Prohibition. Notwithstanding any other provision of this Agreement to the
contrary, any payments made to the Officer 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 Officer’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 Officer remains in the employ of the Corporation following such
termination. Furthermore, following such termination for Cause, the Officer
will not, directly or indirectly, influence or participate in the affairs or
the operations of the Bank.


 


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


 


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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

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OFFICER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Neelesh
  Kalani

  
	
   

  	
   

  	
  Neelesh
  Kalani

  
					



 


 


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