exv10w15






Exhibit 10.15





EMPLOYMENT AGREEMENT




     THIS AGREEMENT is made as of the 1st day of June 2008 between ROYAL BANCSHARES OF
PENNSYLVANIA, INC. (“Corporation”), a Pennsylvania business corporation having a place of business
at 732 Montgomery Avenue, Narberth, Pennsylvania 19072, ROYAL BANK AMERICA (“Bank”) a state
chartered bank having a place of business at 732 Montgomery Avenue, Narberth Pennsylvania 19072,
and ROBERT A. KUEHL (“Executive”), an individual.



WITNESSETH:




     WHEREAS, Corporation, Bank and Executive desire to enter into an agreement regarding, among
other things, the employment of Executive by Corporation and Bank as Chief Financial Officer of
Corporation and Bank.



AGREEMENT:




     NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:



     1. Employment. Corporation and Bank hereby employ Executive and Executive hereby
accepts employment with Corporation and Bank, under the terms and conditions set forth in this
Agreement.



     2. Duties of Employee. Executive shall perform and discharge well and faithfully
such duties as an executive officer of Corporation and Bank as may be assigned to Executive from
time to time by the Board of Directors of Corporation and Bank, including, but not limited to,
those duties set forth in Exhibit A. Executive shall be employed as Chief Financial Officer of
Corporation and Bank, and shall hold such other titles as may be given to him from time to time by
the Board of Directors of Corporation and Bank. Executive shall devote his full time, attention
and energies to the business of Corporation and Bank during the Employment Period (as defined in
Section 3 of this Agreement); provided, however, that this Section 2 shall not be construed as
preventing Executive from (a) engaging in activities incident or necessary to personal investments,
(b) acting as a member of the Board of Directors of any other corporation or as a member of the
Board of Trustees of any other organization or (c) being involved in any other activity with the
prior approval of the Board of Directors of Corporation and Bank. Executive shall not engage in
any business or commercial activities, duties or pursuits which compete with the business or
commercial activities of Corporation or Bank, nor may Executive serve as a director or officer or
in any other capacity in a company which competes with Corporation or Bank.



     3. Term of Agreement.



          (a) Employment Period. The period of Executive’s employment under this Agreement
shall be deemed to have commenced as of June 1, 2008 (the “Effective Date”), and shall continue for
a period of twenty-four (24) full calendar months thereafter (the “Employment Period”).
Corporation and Bank may, in their sole discretion, renew this Agreement for an additional two-year
period upon written notice to Executive not less than sixty (60) days prior to the expiration of
the Employment Period. Notwithstanding anything herein contained to the



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contrary: (ii) Executive’s employment with the Corporation or Bank may be terminated by the
parties’ mutual agreement in writing to terminate the Executive’s employment hereunder at any time;
and (iii) nothing in this Agreement shall mandate or prohibit a continuation of Employee’s
employment following the expiration of the term of the Agreement upon such terms as the Board and
Executive may mutually agree.



          (b) Involuntary Termination without Cause. Executive’s employment under this
Agreement may be terminated at any time during the Employment Period without Cause, by action of
the Board of Directors of Corporation and Bank, upon giving written notice of such termination to
Executive at least ninety (90) days prior to the date upon which such termination shall take
effect. If Executive’s employment is terminated under the provisions of this Section 3(b),
Executive shall be entitled to receive: (i) any earned and unpaid salary accrued through the
effective date of termination, pro rated on a daily basis, (ii) subject to the terms thereof, any
benefits which may be due to the Executive on the date of termination under the provisions of any
employee benefit plan, program or policy, (iii) medical benefit continuation at the Executive’s
and/or his dependents’ expense as provided by law (the payments and benefits set forth in Section
3(b)(i) through (iii) shall be referred to, collectively, as the “Accrued Benefits”), and (iv) the
amount set forth in Section 4(b) prorated for the number of days Executive was actually employed
during the applicable year. Executive shall be entitled to no further payments or benefits under
this Agreement, whether, salary, severance, any type of bonus, including any pro rata portion
thereof, or otherwise.



          (c) Involuntary Termination for Cause. Notwithstanding the previous provision of
Section 3(a) of this Agreement, this Agreement shall terminate automatically for Cause (as defined
herein) upon written notice from the Board of Directors of Corporation and Bank to Executive. As
used in this Agreement, “Cause” shall mean any of the following:



               (i) Executive’s conviction of or plea of guilty or nolo contendere to a felony a crime of
falsehood or a crime involving moral turpitude, or the actual incarceration of Executive for a
period of sixty (60) consecutive days or more;



               (ii) Executive’s willful failure to follow the good faith lawful instructions of the Board of
Directors of Corporation or Bank with respect to their operations, after written notice from
Corporation or Bank and a failure to cure such violation within ten (10) days of said written
notice, unless it is apparent under the circumstances that Executive is unable to cure such
violation; or



               (iii) Executive’s willful failure to substantially perform Executive’s duties to Corporation
or Bank, other than a failure resulting from Executive’s incapacity because of physical or mental
illness, as provided in subsection (g) of this Section 3, after written notice from Corporation or
Bank and a failure to cure such violation within ten (10) days of said written notice, unless it is
apparent under the circumstances that Executive is unable to cure such violation, which failure
results in injury to Corporation or Bank, monetarily or otherwise.



               (iv) Executive’s intentional violation of the provisions of this Agreement, after written
notice from Corporation or Bank and a failure to cure such violation within ten (10)
days



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of said written notice, unless it is apparent under the circumstances that Executive is
unable to cure such violation;



               (v) dishonesty of Executive in the performance of his duties, as reasonably determined by a
vote of seventy-five percent (75%) of the directors of the Board of Directors;



               (vi) Executive’s removal or prohibition from being an institutional-affiliated party by a
final order of an appropriate federal banking agency pursuant to Section 9(e) of the Federal
Deposit Insurance Act or any applicable Regulatory Agency.



               (vii) the willful engaging by Executive in misconduct injurious to the Corporation or Bank
after notice from Corporation or Bank, and a failure to cure such conduct within twenty (20) days;



               (viii) the breach of Executive’s fiduciary duty to the Corporation or Bank involving personal
profit;



               (ix) the willful violation of (1) any material law, rule or regulation applicable to
Corporation or Bank or (2) any final cease and desist order issued by an applicable regulatory
agency;



               (x) conduct on the part of Executive that brings public discredit to Corporation or Bank or
that is clearly contrary to the best interests of Corporation or Bank as reasonably determined by a
vote of seventy-five percent (75%) of the directors of the Board of Directors;



               (xi) unlawful harassment by Executive against employees, customers, business associates,
contractors or vendors of Corporation or Bank as reasonably determined by seventy-five percent
(75%) of the disinterested members of the Board of Directors following an investigation of the
claims by a third party;



               (xii) any act of fraud or misappropriation against the Corporation, the Bank, or their
customers, employees, contractors or business associates;



               (xiii) intentional misrepresentation of a material fact, or intentional omission of
information necessary to make the information supplied materially misleading, in application or
other information provided by Executive to Corporation or Bank in connection with Executive’s
employment with Corporation or Bank; or



               (xiv) the existence of any material conflict between the interests of Corporation or Bank and
Executive that is not disclosed in writing by Executive to Corporation or Bank prior to action and
approved in writing by the Board of Directors, and, after notice from Corporation or Bank, a
failure to cure such conflict within twenty (20) days of said notice.



     Notwithstanding the foregoing, Executive’s employment under this Agreement shall not be deemed
to have been terminated for “Cause” under this Section 3(c) above if such termination took place
solely as a result of:



               (i) questionable judgment on the part of Executive;



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               (ii) any act or omission believed by Executive, in good faith, to have been in, or not
opposed to, the best interests of Corporation or Bank (or its affiliated companies); or



               (iii) any act or omission in respect of which a determination could properly be made that
Executive met the applicable standard of conduct prescribed for indemnification or reimbursement or
payment of expenses under the Charter or By-laws of Corporation or Bank or the directors’ and
officers’ liability insurance of Corporation or Bank, in each case as in effect at the time of such
act or omission.



     If this Agreement is terminated for Cause, Executive shall receive only his Accrued Benefits
and shall be entitled to no further payments or benefits under this Agreement, whether, salary,
severance, any type of bonus, including any pro rata portion thereof, or otherwise.



          (d) Voluntary Termination. Executive’s employment under this Agreement may be
terminated by the Executive at any time during the Employment Period for any reason or no reason,
by giving written notice of such termination to the Chairman of the Board of Directors of
Corporation at least ninety (90) days prior to the date upon which such termination is to take
effect. If Executive terminates his employment under the provisions of this Section 3(d),
Executive shall receive only his Accrued Benefits and shall be entitled to no further payments or
benefits under this Agreement, whether, salary, severance, any type of bonus, including any pro
rata portion thereof, or otherwise.



          (e) Termination upon Executive’s Disability. Notwithstanding the previous provisions
of Section 3 of this Agreement, this Agreement shall terminate automatically upon Executive’s
Disability and Executive’s rights under this Agreement shall cease as of the date of such
termination without further compensation due Executive, provided, however, that Executive shall be
entitled to receive his Accrued Benefits. For purposes of this Agreement, the term “Disability”
shall have the same meaning as under the long term disability plan or policy maintained by
Corporation. If, for any reason, Corporation does not maintain such plan or policy, then
“Disability” shall mean the inability or incapacity (by reason of a medically determinable physical
or mental impairment) of Executive to perform the duties and responsibilities related to the job or
position with Corporation described in Section 2 for a period that lasts, or can reasonably be
expected to last, more than one hundred and eighty (180) days.



          (f) Termination upon Death of Executive. Notwithstanding the previous provisions of
Section 3 of this Agreement, this Agreement shall terminate automatically upon Executive’s death
and Executive’s rights under this Agreement shall cease as of the date of such termination without
further compensation due Executive, provided, however, that Executive shall be entitled to receive
his Accrued Benefits.



          (g) Resignation as Director. Executive agrees that in the event his employment under
this Agreement is terminated, unless (1) Executive maintains an ownership interest in the
Corporation of five percent (5%) or more, or (2) termination is due to retirement, Executive shall
resign as a director of Corporation and Bank, or any affiliate or subsidiary thereof, if he is then
serving as a director of any of such entities.



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     4. Employment Period Compensation.



          (a) Annual Base Salary. For services performed by Executive under this Agreement,
Corporation and Bank shall pay Executive a base salary during the Employment Period at the rate of
$180,000 per year, to increase and be adjusted to $190,000 per year on June 1, 2009, minus
applicable withholdings and deductions, payable at the same times as salaries are payable to other
executive employees of Corporation or Bank (“Annual Base Salary”). Corporation and/or Bank may,
from time to time, increase Executive’s Annual Base Salary, and any and all such increases shall be
deemed to constitute amendments to this Section 4(a) to reflect the increased amounts, effective as
of the date established for such increases by the Board of Directors of Corporation or Bank or any
committee of such Board in the resolutions authorizing such increases.



          (b) Bonus. For services performed by Executive under this Agreement, Corporation
and/or Bank may, from time to time, pay a bonus or bonuses (including payments made under Bank
Profit Sharing Incentive Plan) to Executive as Corporation and/or Bank, in their sole discretion,
deem appropriate. The payment of any such bonuses shall not reduce or otherwise affect any other
obligation of Corporation and/or Bank to Executive provided for in this Agreement and any other
awards by the Corporation and/or Bank to all Tier I employees generally. The total target bonus
amount under this Section shall be at least $35,000, consisting of the following two components:



               (i) fifty percent (50%) of the bonus potential (i.e., a target of at least $17,500) is tied
to Executive’s attainment of a satisfactory qualitative performance review; and



               (ii) fifty percent (50%) of the bonus potential (i.e., a target of at least $17,500) is tied
to Executive’s achievement of certain predetermined benchmarks.



     The predetermined benchmarks under Section 4(b)(ii) for the first year of the Employment
Period are as follows:



                    (A) Executive must successfully implement the IPS Sendero system by December 31, 2008;



                    (B) Corporation’s outside auditors must find no material weaknesses in Corporation’s
financial reporting;



                    (C) on or before February 28, 2009, Executive must automate production of Corporation’s
financial statements to assure an initial draft release of such financial statements within seven
(7) days of the end of the month being reported; and



                    (D) on or before February 28, 2009, Executive must establish a review process of Corporation
financial statement drafts to ensure such drafts are accurate, in compliance with all generally
accepted accounting principles, and released to the Board of Directors not later than the Friday
prior to the week in which the regularly scheduled meeting of the Board of Directors will occur.



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     The Chairman of the Board of Directors of Corporation, or his designee, shall meet with
Executive at least ninety (90) days prior to each anniversary of the Effective Date to establish
not more than four mutually agreeable benchmarks for the subsequent year. The benchmark component
of Executive’s bonus under Section 4(b)(ii) shall be prorated for the number of benchmarks
Executive actually achieves during the applicable year (with each such benchmark weighted equally).
Bonuses earned under this Section shall be paid within thirty (30) days of the close of the year
to which such bonus relates.



          (c) Vacation; Paid Time Off. During the term of this Agreement, Executive shall be
entitled to four (4) weeks paid annual vacation in accordance with the policies as established from
time to time by the Boards of Directors of Corporation and Bank, provided, however, Executive shall
not be entitled to receive any additional compensation from Corporation and Bank for Failure to
take a vacation, nor shall Executive be able to accumulate unused vacation time from one year to
the next, except to the extent authorized by the Boards of Directors of Corporation and Bank.
Executive shall also be entitled to sick leave and one (1) week paid time off for continuing
professional education in accordance with the policies as established from time to time by the
Boards of Directors of Corporation and Bank



          (d) Automobile. During the term of this Agreement, Corporation and Bank shall
provide Executive with an automobile or an automobile allowance of $4,800 per year.



          (e) Employee Benefit Plans. During the term of this Agreement, Executive shall be
entitled to participate in or receive the benefits of any employee benefit plan currently in effect
at Corporation and Bank, subject to the terms of said plan, until such time that the Boards of
Directors of Corporation and Bank authorize a change in such benefits. Corporation and Bank shall
provide Executive with medical and disability coverage comparable to other full-time employees of
Corporation and Bank. Corporation and Bank shall not make any changes in such plans or benefits
which would adversely affect Executive’s rights or benefits thereunder, unless such change occurs
pursuant to a program applicable to all executive officers of Corporation and Bank and does not
result in a proportionately greater adverse change in the rights of or benefits to Executive as
compared with any other executive officer of Corporation and Bank. Nothing paid to 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 payable to Executive pursuant to Section 4(a) hereof.



          (f) Long Term Incentive Plan. Executive shall be eligible to participate in
Corporation’s Long Term Incentive Plan (“LTIP”) to the same extent as full-time employees of
Corporation of comparable status and responsibility and in accordance with the terms and subject to
the limitations of the LTIP, as may be amended from time to time.



          (g) Stock Options and Restricted Stock. Executive shall receive a one-time grant of
an option to purchase 5,000 shares of common stock of Corporation and a one-time grant of 1,300
restricted shares of Corporation common stock, in accordance with the terms and subject to the
limitations of Corporation’s 2007 LTIP, which grants shall be made on the date other full-time
employees of Corporation receive their grants for 2008, subject to the approval of the Board of
Directors of Corporation; provided, however, that Executive shall not be eligible to receive the
above grants if his employment has been terminated for any reason, or if he has been given



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notice of his termination for any reason, or if he has resigned, or given notice of his
intention to resign prior to the date on which the grants would otherwise have been made. The
options and restricted shares subject to such grants shall become vested as determined by the Board
of Directors of Corporation and subject to the terms of the 2007 LTIP.



          (h) Business Expenses. During the term of this Agreement, Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by him, which are
properly accounted for, in accordance with the policies and procedures established by the Board of
Directors of Corporation and Bank for their executive officers. For the purpose of this Agreement,
business expenses shall include fees and expenses associated with professional education, with said
professional education reimbursement subject to an annual cap of $2,500.



     5. Termination of Employment Following Change in Control.



          (a) If a Change in Control (as defined in Section 5(b) of this Agreement) shall occur and,
thereafter, if at any time during the term of this Agreement there shall be:



               (i) any involuntary termination of Executive’s employment (other than for the reasons set
forth in Section 3(c) of this Agreement);



               (ii) any reduction in Executive’s title, responsibilities, including reporting
responsibilities, or authority, including such title, responsibilities or authority as such may be
increased from time to time during the term of this Agreement, which results in a material negative
change to Executive in the employment relationship;



               (iii) the assignment to Executive of duties inconsistent with Executive’s office on the date
of the Change in Control or as the same may be increased from time to time after the Change in
Control, which results in a material negative change to Executive in the employment relationship;



               (iv) any reassignment of Executive to a principal office greater than fifty (50) miles from
the location of Executive’s principal office on the date of the Change in Control;



               (v) any significant reduction in Executive’s compensation as provided in Section 4 in effect
on the date of the Change in Control or as the same may be increased from time to time after the
Change in Control;



               (vi) any failure to provide Executive with benefits at least as favorable as those enjoyed by
Executive under any of Corporation or Bank’s retirement or pension, life insurance, medical, health
and accident, disability or other employee plans in which Executive participated at the time of the
Change in Control, or the taking of any action that would materially reduce any of such benefits in
effect at the time of the Change in Control;



               (vii) any requirement that Executive travel in performance of his duties on behalf of
Corporation or Bank for a significantly greater period of time during any year than was required of
Executive during the year preceding the year in which the Change in Control occurred; or



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               (viii) any sustained pattern of interruption or disruption of Executive for matters
substantially unrelated to Executive’s discharge of Executive’s duties on behalf of Corporation and
Bank, which results in a material negative change to Executive in the employment relationship;


then, at the option of Executive, exercisable by Executive within ninety (90) days of the Change in
Control and occurrence of any of the foregoing events, Executive may resign from employment with
Corporation and Bank (or, if involuntarily terminated, give notice of intention to collect benefits
under this Agreement) by delivering a notice in writing (the “Notice of Termination”) to
Corporation and Bank and the provisions of Section 6 of this Agreement shall apply, provided,
however, that Corporation and Bank shall be given thirty (30) days from the date it receives the
Notice of Termination to remedy any such event (other than an involuntary termination).
Notwithstanding the foregoing, upon the occurrence of any of the events listed in Sections
5(a)(ii)-(viii), the provisions of Section 6 shall only apply if Executive actually terminates
employment within two (2) years following the initial existence such event. In addition,
notwithstanding the payments to Executive contemplated by Section 6, if Executive is requested by
the Corporation, Bank, or a successor thereto to remain in the employ of the Corporation, Bank, or
a successor to the Corporation or Bank following the Date of Change of Control, Executive expressly
agrees, subject to the condition set forth below, to remain in the employ of the Corporation, Bank,
or a successor to the Corporation or Bank for not less than six months following the Date of Change
of Control. The Corporation, Bank, or successor to the Corporation or Bank shall have the right to
request Executive remain in the employ of the Corporation, Bank, or a successor to the Corporation
or Bank for a period of less than six months following the Date of Change of Control. Executive
agrees to remain an employee of the Corporation, Bank or successor to the Corporation or Bank
pursuant to their request conditioned upon Executive being compensated in the same amount and on
the same terms as he was compensated immediately prior to the Date of Change of Control, including
participation in all employee benefit plans to which he would otherwise be entitled.




          (b) As used in this Agreement, “Change in Control” shall mean the occurrence of any of the
following:



               (i) (A) a merger, consolidation or division involving Corporation or Bank, (B) a sale,
exchange, transfer or other disposition of substantially all of the assets of Corporation or Bank,
or (C) a purchase by Corporation or Bank of substantially all of the assets of another entity,
unless (y) such merger, consolidation, division, sale, exchange, transfer, purchase or disposition
is approved in advance by seventy percent (70%) or more of the members of the Board of Directors of
Corporation or Bank who are not interested in the transaction and (z) a majority of the members of
the Board of Directors of the legal entity resulting from or existing after any such transaction
and the Board of Directors of such entity’s parent corporation, if any, are former members of the
Board of Directors of Corporation or Bank; or



               (ii) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 (the “Exchange Act”)), other than Corporation or Bank or any “person” who on
the date hereof is a director or officer of Corporation or Bank is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
Corporation or Bank representing twenty-five percent (25%) or more of the



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combined voting power of Corporation or Bank’s then outstanding securities; provided; however,
that for the purposes of this Agreement, a Change in Control shall not result from any transfer of
ownership, which would otherwise cause the transferee to be a beneficial owner (as defined in Rule
13d-3 under the Exchange Act) directly or indirectly through any contract, arrangement,
understanding, relationship or otherwise, to a family member of Daniel M. Tabas, who is not
currently a director or an officer of the Corporation or the Bank, of securities of the
Corporation, which are solely or jointly owned or titled in the name of Daniel M. Tabas, the estate
of Daniel M. Tabas, or any trust, proxy, power of attorney, pooling arrangement or any other
contract or arrangement or other special purpose entity in which Daniel M. Tabas either is the
grantor, settlor, or he otherwise caused to be formed; or controls the voting rights or disposition
of shares of the Corporation; or



               (iii) during the period of two (2) consecutive years during the term of Executive’s
employment under this Agreement, individuals who at the beginning of such period constitute the
Board of Directors of Corporation or Bank cease for any reason to constitute at least a majority
thereof, unless the election of each director who was not a director at the beginning of such
period has been approved in advance by directors representing at least sixty-seven percent (67%) of
the directors then in office who were directors at the beginning of the period; or



               (iv) any other change in control of Corporation and Bank similar in effect to any of the
foregoing.



     6. Rights in Event of Termination of Employment Following Change in Control.



          (a) In the event that Executive delivers a Notice of Termination (as defined in Section 5(a)
of this Agreement) to Corporation and Bank, in addition to his Accrued Benefits, Executive shall be
absolutely entitled to receive the compensation and benefits set forth below:



               (i) If, at the time of termination of Executive’s employment, a “Change in Control” (as
defined in Section 5(b)(i) of this Agreement) has also occurred, Corporation or Bank shall pay
Executive an amount equal to and no greater than 1.99 times Executive’s Base Amount as defined in
subsection (b) of this Section, minus applicable taxes and withholdings. Such payment shall be
paid in a lump sum within thirty (30) days of Executive’s termination of employment.



          (b) The term “Base Amount” shall equal the base amount as defined by 26 U.S.C. § 280G(b)(3)
which generally includes all compensation for services (excluding directors’ fees, if any) for five
years prior to the year during which the Change in Control occurs divided by five, except that the
calculation of the Base Amount shall not include any compensation resulting from director fees or
the granting, the vesting, or exercise of any stock options or restricted shares. Notwithstanding
the foregoing, in the event that Executive is employed for less than five years prior to the year
during which the Change in Control occurs, the Base Amount will be determined by reference to the
number of years (or partial years annualized) during which Executive is actually employed by
Corporation and Bank.



          (c) Notwithstanding anything in this Section or elsewhere in this Agreement to the contrary,
in the event the payments and benefits payable hereunder to or on behalf of Executive,



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when added
to all other amounts and benefits payable to or on behalf of Executive, would result in the
imposition of an excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended
(the “Code”), the amounts and benefits payable hereunder shall be reduced to such extent as may be
necessary to avoid such imposition. All calculations required to be made under this subsection
will be made by Corporation’s independent public accountants, subject to the right of Executive’s
representative to review the same. The parties recognize that the actual implementation of the
provisions of this subsection are complex and agree to deal with each other in good faith to
resolve any questions or disagreements arising hereunder.



          (d) Notwithstanding the foregoing, and anything herein to the contrary, the receipt of any
benefits under this Section 6 shall be subject to satisfaction of the condition precedent that
Executive undergo a “separation from service” within the meaning of Treas. Reg. § 1.409A-1(h) or
any successor thereto.



     7. Covenant Not to Compete.



          (a) Executive hereby acknowledges and recognizes the highly competitive nature of the
business of Corporation and Bank and accordingly agrees that, during and for the applicable period
set forth in Section 7(c) hereof; Executive shall not:



               (i) be engaged, directly or indirectly, either for his own account or as agent, consultant,
employee, partner, officer, director, proprietor, investor (except as an investor owning less than
5% of the stock of a publicly owned company) or otherwise of any person, firm, corporation or
enterprise with assets between $500,000,000 and $5,000,000,000 engaged in (1) the banking
(including bank holding company) or financial services industry, or (2) any other activity in which
Corporation or Bank or any of their subsidiaries are engaged during the Employment Period, in the
Pennsylvania counties of Delaware, Bucks, Montgomery, Chester, and Philadelphia (the
“Non-Competition Area”); or



               (ii) provide financial or other assistance to any person, firm, corporation, or enterprise
with assets between $500,000,000 and $5,000,000,000 engaged in (1) the banking (including bank
holding company) or financial services industry, or (2) any other activity in which Corporation or
Bank or any of their subsidiaries are engaged during the Employment Period, in the Non-Competition
Area; or



               (iii) solicit current and former customers of Corporation, Bank or any Corporation subsidiary
in the Non-Competition Area; or



               (iv) solicit current or former employees of Corporation, Bank or any Corporation subsidiary.



     Notwithstanding the foregoing, Executive shall not be prohibited from making personal
investments, loans, or real estate transactions comparable to such transactions which would have
been permitted during Executive’s employment with the Corporation or Bank.



          (b) It is expressly understood and agreed that, although Executive and Corporation and Bank
consider the restrictions contained in Section 7(a) hereof reasonable for the purpose of preserving
for Corporation and Bank and their subsidiaries their good will and other proprietary



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rights, if a
final judicial determination is made by a court having jurisdiction that the time or territory or
any other restriction contained in Section 7(a) hereof is an unreasonable or otherwise
unenforceable restriction against Executive, the provisions of Section 7(a) hereof shall not be
rendered void but shall be deemed amended to apply as to such maximum time and territory and to
such other extent as such court may judicially determine or indicate to be reasonable.



          (c) The provisions of this Section 7 shall be applicable commencing on the date of this
Agreement and ending on the second anniversary date of the effective date of termination of
employment.



          (d) The provision of Section 7 will apply during the period of enforcement of the covenant
not to compete as defined in Section 7(c).



          (e) Executive agrees that any breach of the restrictions set forth in this Section will
result in irreparable injury to Corporation and Bank for which they will have no adequate remedy at
law and the Corporation and Bank shall be entitled to injunctive relief in order to enforce the
provisions hereof and/or seek specific performance and damages. Executive agrees to personal
jurisdiction in the Common Pleas Court of Montgomery County, Pennsylvania or the U.S. District
Court for the Eastern District of Pennsylvania. In the event that Corporation or Bank obtains
injunctive relief, Executive will promptly reimburse the Corporation and Bank for reasonable
attorney fees and any other costs associated with the litigation.



     8. Unauthorized Disclosure. During the term of his employment hereunder, or at any
later time, Executive shall not, without the written consent of the Boards of Directors of
Corporation and Bank or a person authorized thereby, knowingly disclose to any person, other than
an employee of Corporation or Bank or a person to whom disclosure is reasonably necessary or
appropriate in connection with the performance by Executive of his duties as an executive of
Corporation and Bank, any material confidential information obtained by him while in the employ of
Corporation and Bank with respect to any of Corporation and Bank’s services, products,
improvements, formulas, designs or styles, processes, customers, methods of business or any
business practices the disclosure of which could be or will be damaging in Corporation or Bank;
provided, however, that confidential information shall not include any information known generally
to the public (other than as a result of unauthorized disclosure by Executive or any person with
the assistance, consent or direction of Executive) or any information of a type not otherwise
considered confidential by persons engaged in the same business of a business similar to that
conducted by Corporation and Bank or any information that must be disclosed as required by law.



     9. Liability Insurance. Corporation and Bank shall use their best efforts to obtain
insurance coverage for Executive under an insurance policy covering officers and directors of
Corporation and Bank against lawsuits, arbitrations or other legal or regulatory proceedings;
however, nothing herein shall be construed to require Corporation and/or Bank to obtain such
insurance, if the Board of Directors of the Corporation and/or Bank determine that such
coverage cannot be obtained at a reasonable price.



     10. Notices. Except as otherwise provided in this Agreement, any notice required or
permitted to be given under this Agreement shall be deemed properly given if in writing and if



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mailed by registered or certified mail, postage prepaid with return receipt requested, to
Executive’s residence, in the case of notices to Executive, and to the principal executive offices
of Corporation and Bank, in the case of notices to Corporation and Bank.



     11. Waiver. No provision of this Agreement many be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing and signed by Executive and
an executive officer specifically designated by the Boards of Directors of Corporation and Bank.
No waiver by either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time.



     12. Assignment. This Agreement shall not be assignable by any party, except by
Corporation and Bank to any successor in interest to their respective businesses.



     13. Entire Agreement. This Agreement contains the entire agreement of the parties
relating to the subject matter of this Agreement.



     14. Successors; Binding Agreement.



          (a) Corporation and Bank will require any successor (whether direct or indirect, by purchase,
merger, consolidation, or otherwise) to all or substantially all of the businesses and/or assets of
Corporation and Bank to expressly assume and agree to perform this Agreement in the same manner and
to the same extent that Corporation and Bank would be required to perform it if no such succession
had taken place. Failure by Corporation and Bank to obtain such assumption and agreement prior to
the effectiveness of any such succession shall constitute a breach of this Agreement and the
provisions of Section 3 of this Agreement shall apply. As used in this Agreement, “Corporation”
and “Bank” shall mean Corporation and Bank, as defined previously and any successor to their
respective businesses and/or assets as aforesaid which assumes and agrees to perform this Agreement
by operation of law or otherwise.



          (b) This Agreement shall inure to the benefit of and be enforceable by Executive’s personal
or legal representatives, executors, administrators, heirs, distributees, devisees and legatees.
If Executive should die after a Notice of Termination is delivered by Executive, or following
termination of Executive’s employment without Cause, and any amounts would be payable to Executive
under this Agreement if Executive had continued to live, all such amounts shall be paid in
accordance with the terms of this Agreement to Executive’s devisee, legatee, or other designee, or,
if there is no such designee, to Executive’s estate.



     15. Arbitration. Corporation, Bank and Executive recognize that in the event a
dispute should arise between them concerning the interpretation or implementation of this
Agreement, lengthy and expensive litigation will not afford a practical resolution of the issues
within a reasonable period of time. Consequently, each party agrees that all disputes,
disagreements and questions of interpretation concerning this Agreement are to be submitted
for resolution, in Philadelphia, Pennsylvania, to the American Arbitration Association (the
“Association”) in accordance with the Association’s National Rules for the Resolution of Employment
Disputes or other applicable roles then in effect (“Rules”). Corporation, Bank or Executive may
initiate an arbitration proceeding at any time by giving notice to the other in accordance with the
Rules.



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Corporation and Bank and Executive may, as a matter or right, mutually agree on the
appointment of a particular arbitrator from the Association’s pool. The arbitrator shall not be
bound by the rules of evidence and procedure of the courts of the Commonwealth of Pennsylvania but
shall be bound by the substantive law applicable to this Agreement. The decision of the
arbitrator, absent fraud, duress, incompetence or gross and obvious error of fact, shall be final
and binding upon the parties and shall be enforceable in courts of proper jurisdiction. Following
written notice of a request for arbitration, Corporation, Bank and Executive shall be entitled to
an injunction restraining all further proceedings in any pending or subsequently filed litigation
concerning this Agreement, except as otherwise provided herein. In the event that Executive
terminates pursuant to Section 6 herein, and any dispute arising under or in conjunction with
Executive’s termination is resolved in Executive’s favor, whether by judgment, arbitration or
settlement, Executive shall be entitled to the reimbursement by Corporation or Bank of all
reasonable legal fees paid or incurred by Executive in resolving such dispute.



     16. Validity. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.



     17. Applicable Law. This Agreement shall be governed by and construed in accordance
with the domestic, internal laws of the Commonwealth of Pennsylvania, without regard to its
conflicts of laws principles.



     18. Headings. The section headings of this Agreement are for convenience only and
shall not control or affect the meaning or construction or limit the scope or intent of any of the
provisions of this Agreement.



     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.



	 	 	 	 	 
	 	ROYAL BANCSHARES OF PENNSYLVANIA, INC.

 
	 	By:  	/s/
Robert R. Tabas	 
	 	 	 	 
	 	ROYAL BANK AMERICA

 	 
	 	By:  	/s/ Robert R. Tabas	 
	 	 	 	 
	 	/s/ Robert A. Kuehl 	 
	 	Robert A. Kuehl 	 
	 	Chief Financial Officer, “Executive” 	 
	 




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Exhibit A



Executive’s duties include, but are not limited to, the following:





	 	•	 	Maintain a minimum 40 hours basic work week schedule as part of the responsibilities of
the Chief Financial Officer position, with required additional time to meet the
requirements of the position and to facilitate the timely filing of all Corporate
regulatory and fiscal deadlines;
	 
	 	•	 	Oversee activities related to implementing and maintaining the integrity of the
Corporation’s and Bank’s financial reporting systems;
	 
	 	•	 	Direct the activities of the Finance Department and maintain “dotted-line” relationships
with individuals in each of the functional areas of the Bank that are responsible for the
financial management of those departments and or functions;
	 
	 	•	 	Administratively responsible for the internal audit function;
	 
	 	•	 	Act as the liaison with the Audit Committee;
	 
	 	•	 	Act as the primary interface for the Corporation’s external public accounting firm;
	 
	 	•	 	Planning;
	 
	 	•	 	Budgeting and forecasting;
	 
	 	•	 	Management reporting;
	 
	 	•	 	Regulatory reporting, including Securities and Exchange Commission and bank regulatory
reporting;
	 
	 	•	 	Establish and maintain the overall internal control environment;
	 
	 	•	 	Accounting policies, procedures and compliance;
	 
	 	•	 	Asset liability management;
	 
	 	•	 	Tax matters, including income tax;
	 
	 	•	 	Direct the timely and complete preparation of all financial reports, in accordance with
generally accepted accounting principles and the prevailing industry accounting standards;
	 
	 	•	 	Ensure, interpret and adhere to banking, local, states and federal regulatory
procedures, rules and regulations, as applicable;
	 
	 	•	 	Ensure proper valuation of assets, liabilities and equity of the Corporation and in
establishing reserve requirements and lending thresholds;
	 
	 	•	 	Lead the asset liability management analysis process and make recommendations to senior
management and the Investment Committee with regard to optimizing the Corporation’s
asset-liability management position;
	 
	 	•	 	Lead the Corporation’s planning, budgeting, forecasting and accountability management
processes and prepares timely, relevant management reports to guide and inform the process
for the benefit of the entire senior management team;
	 
	 	•	 	Lead the Corporation’s investment management process and, in coordination with the
Investment Committee to recommend and carry out policy, advise on the selection of and
oversee the performance of fund advisors;
	 
	 	•	 	Lead the Finance Department and be responsible for its development and performance;
	 
	 	•	 	Participate in all senior management “cabinet meetings” (or their derivatives to share
financial insight, establish or conform accounting policies and to generally understand
status of operations within the Corporation);




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	 	•	 	Meet regularly with department heads to keep informed and to offer direction;
	 
	 	•	 	Review, interpret, and analyze financial statements and statistical data for the
Executive Committee and Board of Directors;
	 
	 	•	 	Present and interpret the Corporation’s (including material operations and subsidiaries)
financial results and financial statements at all Board of Director meetings, compared to
budgets, forecasts etc, and makes recommendations as to necessary steps to achieve or
positively exceed budgeted results;
	 
	 	•	 	Lead the Corporation’s efforts to optimize tax positions including working with outside
advisors;
	 
	 	•	 	Perform other duties as reasonably assigned by the Chairman of the Board of Directors,
Executive Committee, President, and members of the Board of Directors; and
	 
	 	•	 	Maintain professional expertise through attendance at professional meetings, review of
current literature and coordination with the companies outside professional advisors
(attorneys, accountants, actuaries, regulators, etc.).






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