Exhibit 10.1


 


EMPLOYMENT AGREEMENT


 


THIS EMPLOYMENT AGREEMENT is dated as of January 20, 2005 and is
between Willow Grove Bancorp, Inc., a Pennsylvania corporation (the “Corporation”),
Willow Grove Bank, a federally chartered savings bank and a wholly owned
subsidiary of the Corporation (the “Bank”), and Donna M. Coughey (the “Executive”).


 


WITNESSETH


 


WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of January 20,
2005 (the “Merger Agreement”), between the Corporation and Chester Valley Bancorp,
Inc., a Pennsylvania corporation (“Chester Valley”), Chester Valley shall, as
of the Effective Time (as defined in the Merger Agreement), merge with and into
the Corporation, with the Corporation being the surviving entity (the “Merger”);


 


WHEREAS, prior to the consummation of the Merger, the Corporation and Chester
Valley will respectively cause the Bank and First Financial Bank (“First
Financial”) to enter into a merger agreement providing for the merger of First
Financial with and into the Bank;


 


WHEREAS, the Corporation and the Bank (together, the “Employers”) wish
to provide for the employment by the Corporation and the Bank of the Executive
as of the Effective Time of the Merger, and the Executive wishes to serve the
Employers as of the Effective Time of the Merger, on the terms and conditions
set forth in this Agreement; and


 


WHEREAS, in order to induce the Executive to remain in the employ of
the Employers and in consideration of the Executive’s agreeing to remain in the
employ of the Employers, the parties desire to specify the severance benefits
which shall be due the Executive by the Employers in the event that her
employment with the Employers 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)                                  Accrued Benefits.  Accrued Benefits means (i) all salary earned
or accrued through the date the Executive’s employment is terminated but not
yet paid; (ii) reimbursement for any and all monies advanced in connection with
the Executive’s employment for reasonable and necessary expenses incurred by
the Executive through the date the Executive’s employment is terminated,
subject to the requirements of Section 4 hereof and provided that such
expenses have not been previously reimbursed; (iii) any bonus earned by the
Executive for a performance period ending prior to the Date of Termination, but
not yet paid to the Executive, under any bonus or incentive compensation plan
or plans in which the Executive is a participant; (iv) any vacation time
accrued by the Executive under this Agreement or in accordance with the
Employers’ policies but not yet used or forfeited; and (v) to the extent not
previously paid or provided to the Executive, all other payments


 





















 


and benefits to which the Executive may be entitled under the terms of,
and at the times specified in, any applicable compensation or benefit plan,
program or arrangement of the Employers in which the Executive was
participating, with it being understood that the Executive shall not receive
any benefits pursuant to any severance plan.


 


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


 


(d)                                 Change in Control.  “Change in Control” shall mean the occurrence
of any of the following with respect to the Corporation and/or the Bank: (i) the
acquisition of control of the Corporation and/or the Bank as defined in 12
C.F.R. §574.4, unless a presumption of control is successfully rebutted or
unless the transaction is exempted by 12 C.F.R. §574.3(c)(vii), or any
successor to such sections; (ii) an event that would be required to be reported
in response to Item 5.01 of Form 8-K or Item 6(e) of Schedule 14A of
Regulation 14A pursuant to the Securities Exchange Act of 1934, as amended (“Exchange
Act”), or any successor thereto, whether or not any class of securities of the
Corporation and/or the Bank is registered under the Exchange Act;
(iii) any “person” (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Corporation and/or the Bank representing 20% or more of the combined voting
power of the Corporation’s and/or the Bank’s then outstanding securities (other
than the Corporation with respect to the Bank’s securities); or (iv) during any
period of three consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the Corporation and/or the Bank cease
for any reason to constitute at least a majority thereof unless the election,
or the nomination for election by stockholders, of each new director was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of the period.


 


(e)                                  Code. 
“Code” shall mean the Internal Revenue Code of 1986, as amended.


 


(f)                                    Date of Termination.  “Date of Termination” shall mean (i) if the
Executive’s employment is terminated for Cause or for Disability, the date
specified in the Notice of Termination, (ii) if the Executive’s employment is
terminated due to her death, the date of death, and (iii) if the Executive’s
employment is terminated for any other reason, the date on which a Notice of
Termination is given or as specified in such Notice.


 


(g)                                 Disability.  “Disability” shall mean termination because of
any physical or mental impairment which qualifies the Executive for disability
benefits under the applicable long-term disability plan maintained by the
Employers or any subsidiary or, if no such plan applies, which would qualify
the Executive for disability benefits under the Federal Social Security System.


 


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(h)                                 Effective Date.  The
Effective Date of this Agreement shall mean the date on which the Effective
Time of the Merger, as such terms are defined in the Merger Agreement, occurs.


 


(i)                                     Good Reason.  Termination by the Executive of the Executive’s
employment for “Good Reason” shall mean termination by the Executive within twenty-four (24) months following a Change in
Control of the Corporation and/or the Bank based on:


 


(i)                                     Without the
Executive’s express written consent, (A) the failure to elect or to re-elect or
to appoint or to re-appoint the Executive to the offices of President and Chief
Executive Officer of the Employers, (B) the failure to nominate the Executive
as a director of the Corporation or to elect the Executive as a director of the
Bank, or (C) a material adverse change made by the Employers in the Executive’s
functions, duties or responsibilities as President and Chief Executive Officer
of the Employers;


 


(ii)                                  Without the Executive’s
express written consent, a reduction by either of the Employers in the
Executive’s Base Salary as the same may be increased from time to time or,
except to the extent permitted by Section 3(c) hereof, a reduction in the
package of fringe benefits provided to the Executive, taken as a whole;


 


(iii)                               The principal executive
office of either of the Employers is relocated by more than 45 miles from the
current principal executive office of the Employers or, without the Executive’s
express written consent, either of the Employers require the Executive to be
based anywhere other than an area within 45 miles of the location of the
Employers’ current principal executive office, except for required travel on
business of the Employers to an extent substantially consistent with the
Executive’s present business travel obligations;


 


(iv)                              Any purported termination
of the Executive’s employment for Disability or Retirement which is not
effected pursuant to a Notice of Termination satisfying the requirements of
paragraph (k) below;


 


(v)                                 The failure by the Employers
to obtain the assumption of and agreement to perform this Agreement by any
successor as contemplated in Section 11 hereof; or


 


(vi)                              A material breach of this
Agreement by the Employers or any successors thereto.


 


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


 


(k)                                  Notice of Termination.  Any purported termination of the Executive’s
employment by the Employers for any reason, or by the Executive for any reason,
including without limitation for Good Reason, shall be communicated by written “Notice
of Termination” to the other party hereto.


 


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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 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 Employers’
termination of Executive’s employment for Cause, which shall be effective
immediately; and (iv) is given in the manner specified in Section 12
hereof.


 


(l)                                     Pre-Merger Options.  Pre-Merger Options means
those options to purchase common stock of Chester Valley that were granted
prior to the date on which the Merger Agreement was executed by the parties
thereto and which remain unvested immediately prior to the Effective Date.


 


(m)                               Present Value. 
Present Value of payments that would otherwise be made in the future shall
be determined using a discount rate equal to the applicable federal rate
prescribed under Section 1274(d) of the Code for the month in which the
Date of Termination occurs, compounded semi-annually.


 


(n)                                 Retirement. 
“Retirement” shall mean voluntary termination by the Executive in
accordance with the Employers’ retirement policies, including early retirement,
generally applicable to their salaried employees.


 


2.                                      Term
of Employment.


 


(a)                                  Each
of the Employers hereby employs the Executive as President  and Chief Executive Officer, and the Executive
hereby accepts said employment and agrees to render such services to the Employers
on the terms and conditions set forth in this Agreement.  The term of employment under this Agreement
shall be for three years, commencing on the Effective Date of this Agreement
and, upon approval of the Board of Directors of each of the Employers, shall
extend for an additional year on each July 1 such that at any time the
remaining term of this Agreement shall be from two to three years in the
absence of notice to the contrary.  Prior
to the first July 1 following the date of this Agreement and each July 1
thereafter, the Board of Directors of each of the Employers shall consider and
review (after taking into account all relevant factors, including the Executive’s
performance hereunder) an extension of the term of this Agreement, and the term
shall continue to extend each July 1 if the Boards of Directors approve
such extension unless the Executive gives written notice to the Employers 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 either of the Employers 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 Employers as may be consistent with her titles and from time to time
assigned to her


 


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by the Boards of Directors of the Employers. During the term of this
Agreement, the Executive shall devote her best efforts and her full time effort
to the affairs and business of the Employers.


 


(c)                                  The
Executive shall be nominated to be a member of the Board of Directors of the
Corporation, and shall be a member of the Board of Directors of the Bank, as
long as the Executive remains an employee in good standing and/or has not
violated any of the terms and provisions of this Agreement.  Termination of employment for any reason
shall be deemed to be a resignation from the Board of Directors of the
Corporation and from the Board of Directors of the Bank.


 


3.                                      Compensation
and Benefits.


 


(a)                                  Base Salary.  The
Employers shall compensate and pay the Executive for her services during the
term of this Agreement at a minimum base salary of $300,000 per year (“Base
Salary”), which may be increased from time to time in such amounts as may be
determined by the Boards of Directors of the Employers and may not be decreased
without the Executive’s express written consent.  In addition to her Base Salary, the Executive
shall be entitled to receive during the term of this Agreement such bonus
payments as may be determined by the Boards of Directors of the Employers.


 


(b)                                 Signing and Retention Bonuses.  The Employers shall pay the Executive a
signing bonus of $200,000 on the Effective Date of this Agreement.  If the Executive is still employed by the
Employers on the one-year anniversary of the Effective Date of this Agreement,
then the Employers shall pay the Executive a retention bonus of $150,000.


 


(c)                                  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 plan, stock option plan, employee stock ownership plan, welfare
and fringe benefit arrangements, or such other employee benefit plans, programs,
policies, benefits, arrangements and privileges given to employees and
executives of the Employers, to the extent commensurate with her then duties
and responsibilities, as fixed by the Boards of Directors of the Employers;
provided, however, that in light of the retention bonus set forth in Section 3(b)
hereof, the Executive shall not be entitled to participate in any incentive
bonus plan of the Employers prior to June 30, 2006.  The Employers 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 Employers 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 Employers.  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 payable to the Executive pursuant to Section 3(a)
of this Agreement.  Notwithstanding the
foregoing, in the event that the Executive participates in any employee benefit
plan, program, policy or arrangement offered by Chester Valley and/or First
Financial (the “Chester Valley Plans”) that is continued following the
Effective Date, the Executive shall not be entitled to participate in any
employee benefit plan, program, policy or arrangement of the Employers (the “Employer
Plans”) that provides similar benefits until the Chester Valley Plan is
terminated, suspended or merged into the corresponding Employer Plan.


 


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(d)                                 Vacation. During the term of this Agreement, the Executive
shall be entitled to a minimum of four weeks of paid vacation each calendar
year. The Executive shall not be entitled to accumulate unused vacation time
from one year to the next, except to the extent authorized by the Employers’
vacation policies or by the Boards of Directors of the Employers.  Accrued but unused vacation in the year of
termination of employment shall be treated as an Accrued Benefit pursuant to
which the Executive shall be entitled to payment based on the Executive’s then
current Base Salary.


 


(e)                                  Executive Survivor Income Agreement.  The Employers expressly assume and agree to
perform the Executive Survivor Income Agreement dated July 2, 2003 between
the Executive and First Financial (the “Survivor Income Agreement”) in the same
manner and to the same extent that First Financial would be required to perform
the Survivor Income Agreement if no succession had occurred.


 


(f)                                    SERP. During the term of this Agreement, the Executive will
be entitled to participate in a supplemental executive retirement plan of the
Employers to be established for the Executive’s benefit, with such plan to
provide the Executive with those benefits that she would have received under
the Employers’ tax-qualified plans but for the compensation and contribution limits
contained in the Code, including but not limited to Sections 401(a)(17), 402(g)
and 415 of the Code.


 


(g)                                 Club Membership.  The
Employers shall provide the Executive with membership in a dining club or other
organization, as may be agreed upon from time to time by the Boards of
Directors of the Employers.


 


(h)                                 Automobile Allowance. 
The Employers shall provide the Executive with an automobile allowance
of $1,200 per month. The Executive shall document her business use of the
automobile, including mileage and other incidental costs, and provide such
documentation as may be reasonably required by the Employers.


 


(i)                                     Service Credit.  The
Employers shall provide the Executive with credit for her years of service with
First Financial and its predecessors, to the extent reflected on the books of First
Financial, for the purpose of determining eligibility to participate in and the
vesting of benefits (but not for accrual of benefits) under each Employer Plan in
which the Executive becomes a participant.


 


(j)                                     Treatment of Pre-Merger Options.  The parties hereto agree that the Pre-Merger
Options held by the Executive shall be converted into stock options to purchase
the common stock of the Corporation in accordance with the terms of the Merger
Agreement.  The Executive agrees to waive
her right to accelerated vesting of the Pre-Merger Options as of the Effective
Time of the Merger, and the parties hereto agree that the Pre-Merger Options
shall continue to vest in the ordinary course pursuant to the existing vesting
schedule.


 


(k)                                  Proration. The Executive’s compensation, benefits and
expenses shall be paid by the Corporation and the Bank in the same proportion
as the time and services actually expended by the Executive on behalf of each
respective Employer.


 


4.                                      Expenses.  The Employers 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


 


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business of the Employers, including, but not by way of limitation,
reasonable entertainment expenses (whether incurred at the Executive’s
residence, while traveling or otherwise), subject to such reasonable
documentation and other limitations as may be established by the Boards of
Directors of the Employers.  If such
expenses are paid in the first instance by the Executive, the Employers shall
reimburse the Executive therefor.


 


5.                                      Termination.


 


(a)                                  General. The Employers shall have the right, at any time
upon prior Notice of Termination, to terminate the Executive’s employment
hereunder for any reason, and the Executive shall have the right, upon prior
Notice of Termination, to terminate her employment hereunder for any reason.
Any payments to be made under Sections 5(c), 5(h) or 5(i) shall be contingent
on the Executive’s prior execution and non-revocation of a mutual release
substantially in the form attached hereto as Exhibit A; provided, however, that
if the Employers refuse to execute such mutual release, the Executive’s
obligation to execute and not revoke the release as a precondition to receiving
such severance benefits shall terminate.


 


(b)                                 For Cause. In the event that the Executive’s employment is
terminated by the Employers for Cause, the Executive shall be entitled to any
Accrued Benefits but shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the applicable Date of
Termination. In the event the Employers desire to terminate the Executive’s
employment for Cause, the Executive shall be given an opportunity, together
with counsel, to meet with the Boards of Directors of the Employers either
prior to the Date of Termination or within ten (10) days thereafter. A
determination that Cause exists shall be made by a majority of the Board of
Directors in writing, which shall specify the basis for such determination. The
Employers may suspend the Executive’s titles, duties and authority pending the
Executive’s meeting with the Boards of Directors, and such suspension shall not
constitute Good Reason.


 


(c)                                  Termination Within the First Year.  If the Employers terminate the Executive’s
employment hereunder for any reason other than Cause prior to the one-year
anniversary of the Effective Date, or if the Executive terminates her
employment hereunder for any reason other than death, Disability or Retirement prior
to the one-year anniversary of the Effective Date, then the Employers shall pay
to the Executive a cash lump sum equal to $613,928.83,
on or before the earlier of the thirtieth (30th) day following the
Date of Termination or the next following December 31, minus applicable
withholding taxes, and subject to reduction as set forth in Section 6(a)
hereof. The Executive shall also be entitled to receive any Accrued Benefits,
and the Employers shall provide continued life, medical and dental coverage to
the Executive and any dependents covered as of the Date of Termination for a
period of one year following the Date of Termination, with such coverage to be
provided on the same terms as similar coverage is provided to other employees
of the Employers.  In addition, the
pre-Merger Options shall become immediately vested and exercisable (to the
extent not previously vested and exercisable) and shall remain exercisable for
the period provided under the applicable option agreement.


 


(d)                                 Voluntary Termination by the Executive on or After One Year.
In the event the Executive terminates her employment hereunder on or after the
one-year anniversary of the Effective Date other than for death, Disability,
Retirement, Good Reason or an uncured material breach of this


 


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Agreement by the Employers, then the Executive shall be entitled to any
Accrued Benefits but shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the applicable Date of
Termination.


 


(e)                                  Death.  In the event
the Executive’s employment hereunder is terminated due to death, the Executive’s
estate or named beneficiaries shall be entitled to death benefits in accordance
with the terms of the Survivor Income Agreement. The Employers shall also (i) provide
the Executive with any Accrued Benefits, (ii) pay the Executive’s spouse
one-half of the Base Salary that would have been paid to the Executive for the
then remaining term of this Agreement but for such death, and (iii) provide the
Executive’s spouse and any dependents covered as of the Date of Termination with
continued medical and dental coverage for the then remaining term of this
Agreement but for such death, with such coverage to be provided on the same
terms as similar coverage is provided to other employees of the Employers. In
addition, the pre-Merger Options shall become immediately vested and
exercisable (to the extent not previously vested and exercisable) and shall
remain exercisable for the period provided under the applicable option
agreement. Other than as set forth above, neither the Executive nor her 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.


 


(f)                                    Disability. In the event the Executive’s employment
hereunder is terminated due to Disability, the Employers shall (i) provide the
Executive with any Accrued Benefits and (ii) provide continued life, medical
and dental coverage to the Executive and any dependents covered as of the Date
of Termination for the then remaining term of this Agreement but for such
Disability, with such coverage to be provided on the same terms as similar
coverage is provided to other employees of the Employers. In addition, the
pre-Merger Options shall become immediately vested and exercisable (to the
extent not previously vested and exercisable) and shall remain exercisable for
the period provided under the applicable option agreement. 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.


 


(g)                                 Retirement. In the event the Executive’s employment
hereunder is terminated due to Retirement, the Employers shall (i) provide the
Executive with any Accrued Benefits and (ii) provide continued life, medical
and dental coverage to the Executive and any dependents covered as of the Date
of Termination for the then remaining term of this Agreement but for such
Retirement, with such coverage to be provided on the same terms as similar
coverage is provided to other employees of the Employers.  In addition, the pre-Merger Options shall
become immediately vested and exercisable (to the extent not previously vested
and exercisable) and shall remain exercisable for the period provided under the
applicable option agreement. 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.


 


(h)                                 Involuntary Termination on or After One Year. In the event
that on or after the one-year anniversary of the Effective Date either (A) the
Executive’s employment is terminated by the Employers for other than Cause or
the Executive’s Disability, Retirement or death or (B) such employment is
terminated by the Executive due to a material breach of this Agreement by the Employers,
which breach has not been cured within fifteen (15) days after a written notice
of non-compliance


 


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has been given by the Executive to the Employers, then the Employers
shall (i) provide the Executive with any Accrued Benefits, and (ii) pay to the
Executive, within the earlier of thirty (30) days following the Date of
Termination or the next following December 31, an amount equal to the Present
Value of the Base Salary that the Executive would have earned for the then remaining
term of this Agreement, based on the Executive’s then current Base Salary, and
provide continued life, medical and dental coverage to the Executive and any
dependents covered as of the Date of Termination for the then remaining term of
this Agreement but for such termination, with such coverage to be provided on
the same terms as similar coverage is provided to other employees of the
Employers. In addition, the pre-Merger Options shall become immediately vested
and exercisable (to the extent not previously vested and exercisable) and shall
remain exercisable for the period provided under the applicable option
agreement. Notwithstanding the foregoing, this Section 5(h) shall not be
applicable if the termination of employment occurs concurrently with or within
twenty-four (24) months following a Change in Control of the Corporation and/or
the Bank.


 


(i)                                     Change in Control Termination. In the event that on or after
the one-year anniversary of the Effective Date either (i) the Executive’s
employment is terminated concurrently with or within twenty-four (24) months
following a Change in Control of the Corporation and/or the Bank for other than
Cause or the Executive’s Disability, Retirement or death, or (ii) the Executive
elects to terminate her employment for Good Reason, then the Employers shall,
subject to the provisions of Sections 6(b) and 7 hereof, if applicable


 


(A)                              pay to the Executive, within
the earlier of thirty (30) days following the Date of Termination or the next
following December 31, a lump sum cash severance amount equal to three (3)
times the sum of the Executive’s then current Base Salary and most recently
paid bonus;


 


(B)                                provide to the
Executive, her spouse and any dependents covered as of the Date of Termination for
a period ending at the earlier of (i) three years subsequent to the Date of
Termination or (ii) the date of the Executive’s full-time employment by another
employer (provided that the Executive, her spouse and/or her dependents 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,
continued participation in all group insurance, life insurance, health and
accident insurance, disability insurance and other employee benefit plans,
programs and arrangements offered by the Employers in which the Executive, her
spouse and/or her dependents were 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 Employers and (z) bonuses and
other items of cash compensation), provided that in the event that the
participation of the Executive, her spouse and/or her dependents in any plan,
program or arrangement as provided in this subparagraph (B) is barred, or
during such period any such plan, program or arrangement is discontinued or the
benefits thereunder are materially reduced, the Employers shall either arrange
to provide the Executive, her spouse and/or her dependents with benefits
substantially similar to those which they were entitled to receive under such
plans, programs and arrangements immediately prior to the Date of Termination or
pay a cash equivalency amount, and


 


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(C)                                provide the Executive
with any Accrued Benefits.


 


In addition,
the pre-Merger Options shall become immediately vested and exercisable (to the
extent not previously vested and exercisable) and shall remain exercisable for
the period provided under the applicable option agreement.


 


6.                                      Limitation
of Benefits under Certain Circumstances.


 


(a)                                  If
the payments and benefits pursuant to Section 5(c) hereof, either alone or
together with other payments and benefits which the Executive has the right to
receive from the Employers, Chester Valley, First Financial or any of their
affiliates, would constitute a “parachute payment” under Section 280G of
the Code, the payments and benefits payable by the Employers pursuant to Section 5(c)
hereof shall be reduced, in the manner determined by the Executive, by the minimum
amount, if any, which is necessary to result in no portion of the payments and
benefits payable by the Employers under Section 5(c) being non-deductible
to the Employers pursuant to Section 280G of the Code and subject to the
excise tax imposed under Section 4999 of the Code.  The determination of any reduction in the
payments and benefits to be made pursuant to Section 5(c) shall be based
upon the opinion of independent counsel selected by the Employers and paid for by
the Employers.  Such counsel shall be
reasonably acceptable to the Executive; 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 herein 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(a), or a reduction
in the payments and benefits specified in Section 5(c) below zero.


 


(b)                                 Notwithstanding
the proration provision in Section 3(g) hereof, in the event the payments
and benefits payable by the Bank pursuant to Section 5(i) hereof, either
alone or together with other payments and benefits which the Executive has the
right to receive from the Employers, would constitute a “parachute payment”
under Section 280G of the Code, then the Bank’s share of the payments and
benefits payable by the Employers pursuant to Section 5(i) hereof shall be
reduced, in the manner determined by the Employers, by the amount, if any,
which is the minimum necessary to result in no portion of the payments and
benefits payable by the Bank under Section 5(i) being non-deductible to
the Bank pursuant to Section 280G of the Code and subject to the excise
tax imposed under Section 4999 of the Code. In the event the Bank’s share
of the payments and benefits payable by the Employers pursuant to Section 5(i)
hereof is reduced by the preceding sentence, then the Corporation’s share of
such payments and benefits shall be increased by an equivalent amount.


 


7.                                      Payment
of Additional Benefits under Certain Circumstances.


 


(a)                                  In
the event that the payments and benefits pursuant to Section 5(i) hereof,
either alone or together with other payments and benefits which the Executive
has the right to receive from the Employers or their predecessors or successors
but before giving effect to this Section 7, would constitute a “parachute
payment” as defined in Section 280G(b)(2) of the Code (the “Initial
Parachute Payment”), then the Corporation shall pay to the Executive, in a lump
sum within the earlier of thirty (30) days following the Date of Termination or
the next following December 31, a cash amount equal to the sum of the
following:


 


10





















 


(A)                              twenty (20) percent (or
such other percentage equal to the tax rate imposed by Section 4999 of the
Code or any successor thereto) of the amount by which the Initial Parachute
Payment exceeds the Executive’s “base amount” from the Employers, as defined in
Section 280G(b)(3) of the Code, with the difference between the Initial
Parachute Payment and the Executive’s base amount being hereinafter referred to
as the “Initial Excess Parachute Payment”; and


 


(B)                                such additional amount
(the “Tax Allowance”) as may be necessary to compensate the Executive for the
payment by the Executive of state and federal income and excise and other taxes
on the payment provided under clause (A) above and on any payments under this
clause (B).  The Tax Allowance shall be calculated
by multiplying the “gross up percentage” (“GUP”) by the payment to be made
under clause (A) above.  The GUP shall be
determined as follows:


 




	
  GUP =

  	
   

  	
  Tax Rate

  
	
   

  	
   

  	
  1- Tax Rate

  






 


The Tax Rate for purposes of computing the GUP shall be equal to the
sum of (i) twenty (20) percent (or such other percentage equal to the tax rate
imposed by Section 4999 of the Code or any successor thereto), and (ii) the
highest marginal federal and state income and employment-related tax rate
(including Social Security and Medicare taxes) applicable to the Executive in
the year in which the payment under clause (B) above is made, and shall also
reflect the phase-out of deductions and the ability to deduct certain of such
taxes.


 


All determinations to be made pursuant to this Section 7 shall be
based upon the opinion of independent counsel selected by the Employers and
paid for by the Employers; provided, however, that such counsel shall be
reasonably acceptable to the Executive.


 


(b)                                 Notwithstanding
the foregoing, if it shall subsequently be determined in a final judicial
determination or a final administrative settlement to which the Executive is a
party that the actual excess parachute payment as defined in Section 280G(b)(1)
of the Code is different from the Initial Excess Parachute Payment (such
different amount being hereafter referred to as the “Determinative Excess
Parachute Payment”), then the Corporation’s independent tax counsel or
accountants shall determine the amount (the “Adjustment Amount”) which either
the Executive must pay to the Corporation or the Corporation must pay to the
Executive in order to put the Executive (or the Corporation, as the case may
be) in the same position the Executive (or the Corporation, as the case may be)
would have been if the Initial Excess Parachute Payment had been equal to the
Determinative Excess Parachute Payment. 
In determining the Adjustment Amount, the independent tax counsel or
accountants shall take into account any and all taxes (including any penalties
and interest) paid by or for the Executive or refunded to the Executive or for
the Executive’s benefit.  As soon as
practicable after the Adjustment Amount has been so determined, the Corporation
shall pay the Adjustment Amount to the Executive or the Executive shall repay
the Adjustment Amount to the Corporation, as the case may be.


 


11





















 


(c)                                  In
each calendar year that the Executive receives payments of benefits under this Section 7,
the Executive shall report on her state and federal income tax returns such
information as is consistent with the determination made by the independent tax
counsel or accountants of the Corporation as described above.  The Corporation shall indemnify and hold the
Executive harmless from any and all losses, costs and expenses (including
without limitation, reasonable attorneys’ fees, interest, fines and penalties)
which the Executive incurs as a result of so reporting such information.  The Executive shall promptly notify the Corporation
in writing whenever the Executive receives notice of the institution of a
judicial or administrative proceeding, formal or informal, in which the federal
tax treatment under Section 4999 of the Code of any amount paid or payable
under this Section 7 is being reviewed or is in dispute.  The Corporation shall assume control at its
expense over all legal and accounting matters pertaining to such federal tax
treatment (except to the extent necessary or appropriate for the Executive to
resolve any such proceeding with respect to any matter unrelated to amounts
paid or payable pursuant to this Section 7) and the Executive shall
cooperate fully with the Corporation in any such proceeding.  The Executive shall not enter into any
compromise or settlement or otherwise prejudice any rights the Corporation may
have in connection therewith without the prior consent of the Corporation.


 


8.                                      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(i)(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 Employers pursuant to employee benefit plans of the
Employers or otherwise.


 


9.                                      Withholding.  All payments required to be made by the Employers
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Employers may
reasonably determine should be withheld pursuant to any applicable law or
regulation.


 


10.                               Competitive
Activities


 


(a)                                  The
Executive agrees and acknowledges that by virtue of her employment hereunder,
she will maintain an intimate knowledge of the activities and affairs of the
Employers, 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 Employers or one of its competitors, the
Executive recognizes that the services to be rendered by her hereunder are of a
character giving them a peculiar value, the loss of which cannot be adequately
or reasonably compensated for by damages.


 


12





















 


(b)                                 Except
for the purpose of carrying out her 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 Employers.  The Executive agrees that
she will not divulge to others any information (whether or not documented or
recorded) or data acquired by her while in the Employers’ employ relating to
methods, processes or other trade secrets or other Confidential Information.


 


(c)                                  The
Executive agrees that the Employers are, 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 her employment, which relate to the business
of the Employers, which are confidential, or which are not readily
ascertainable from persons or other sources outside the Bank or the
Corporation.


 


(d)                                 Unless
the Executive’s employment is terminated in connection with or following a
Change in Control of the Corporation and/or the Bank, 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 Employers to cease to do business with, or to
terminate any employee’s employment with, the Employers. 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 of the Corporation and/or the Bank.


 


(e)                                  The
Executive agrees that during the term of her employment hereunder, except with
the express consent of the Employers, she 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 Employers; 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 her to
devote substantial time to management or control of the business or activities
in which she 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 the
Corporation.  The provisions of this Section 10(e)
shall not be applicable if the Executive’s employment is terminated in
connection with or following a Change in Control of the Corporation and/or the
Bank.


 


(f)                                    The
Employers shall be entitled to immediate injunctive or other equitable relief
to restrain the Executive from failing to comply with any obligation under this
Section 10 or from rendering her services to persons or entities than the
Employers, in addition to any other remedies to which the Employers may be
entitled under law.  The right to such
injunctive or other equitable relief shall survive the termination by the
Employers of the Executive’s employment.


 


(g)                                 The
Executive acknowledges that the restrictions contained in this Section 10
are reasonable and necessary to protect the legitimate interests of the
Employers and that any violation


 


13





















 


thereof would result in irreparable injuries to the Employers.  The Executive acknowledges that, if the
Executive violates any of these restrictions, the Employers are 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
Employers may be entitled.  The Executive
further acknowledges that the provisions of Sections 10(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 of the Corporation and/or
the Bank.


 


11.                               Assignability.  The Employers may assign this Agreement and their
rights and obligations hereunder in whole, but not in part, to any corporation,
bank or other entity with or into which the Employers may hereafter merge or
consolidate or to which the Employers may transfer all or substantially all of their
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 Employers
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.


 


12.                               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 Bank:                                                                            Secretary


Willow Grove Bank


Welsh & Norristown Roads


Maple Glen, Pennsylvania  19002-8030


 


To the Corporation:                                       Secretary


Willow Grove Bancorp, Inc.


Welsh & Norristown Roads


Maple Glen, Pennsylvania  19002-8030


 


To the Executive:                                                    Donna
M. Coughey


At her last address on file with


the Employers


 


13.                               Amendment;
Waiver.  (a) Except as set forth in Section 13(b),
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 Executive and such officer or officers as may be specifically designated by
the Board of Directors of each of the Employers 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.


 


14





















 


(b)                                 The
parties hereto acknowledge and agree that (i) the recently enacted American
Jobs Creation Act of 2004 established a new Section 409A of the Code; (ii)
Code Section 409A contains provisions governing the taxation of deferred
compensation; (iii) the compensation and other benefits to be paid or otherwise
provided under this Agreement, whether provided hereunder or pursuant to any of
the Employer Plans, may be negatively impacted by Section 409A of the
Code; (iv) the Internal Revenue Service (“IRS”) has issued initial guidance and
is expected to issue additional guidance regarding the scope of Section 409A
of the Code; and (v) the Employers have until December 31, 2005 to amend this
Agreement and the Employer Plans to bring them into compliance with Section 409A
of the Code. The parties hereto acknowledge and agree that the Employers may
amend, in accordance with the terms of the Employer Plans, any or all of the Employer
Plans after the date hereof in order to comply with Section 409A of the
Code.  The parties further agree that in
the event that the Employers or the Executive determine, after a review of all
applicable IRS guidance, that this Agreement or any provision hereof is subject
to Section 409A of the Code, the parties will negotiate in good faith any
changes required to be made to this Agreement to comply with Section 409A
of the Code.


 


14.                               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.


 


15.                               Nature
of Obligations.  Nothing contained
herein shall create or require the Employers 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 Employers hereunder,
such right shall be no greater than the right of any unsecured general creditor
of the Employers.


 


16.                               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.


 


17.                               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.


 


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)                                  If
the Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Employers’ affairs by a notice served under
Section 8(e)(3) or


 


15





















 


Section 8(g)(1) of the Federal Deposit Insurance Act (“FDIA”) (12
U.S.C. §1818(e)(3) and 1818(g)(1)), the Employers’ 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 Employers may, in their discretion:  (i) pay the Executive all or part of the
compensation withheld while their obligations under this Agreement were
suspended, and (ii) reinstate (in whole or in part) any of their obligations
which were suspended.


 


(b)                                 If
the Executive is removed from office and/or permanently prohibited from
participating in the conduct of the Employers’ 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 Employers under this Agreement shall
terminate as of the effective date of the order, but vested rights of the
Executive and the Employers as of the date of termination shall not be
affected.


 


(c)                                  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 Employers as of
the date of termination shall not be affected.


 


(d)                                 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 Employers 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 Employers 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 Federal
Deposit Insurance Act (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.


 


16





















 


22.                               Indemnification.  The Corporation shall provide the Executive
(including her heirs, executors and administrators) with coverage under a
directors’ and officers’ liability insurance policy at its expense and shall
indemnify the Executive (and her heirs, executors and administrators) to the
fullest extent permitted by law against all expenses and liabilities reasonably
incurred by her in connection with or arising out of any action, suit or
proceeding in which she may be involved by reason of her having been a director
or officer of the Corporation or any of its subsidiaries or affiliates (whether
or not she continues to be a director or officer at the time of incurring such
expenses or liabilities).  Such expenses
and liabilities shall include, but shall not be limited to, judgments, court
costs and attorneys’ fees and the cost of reasonable settlements.


 


23.                               Entire
Agreement.  This Agreement embodies
the entire agreement between the Employers and the Executive with respect to
the matters agreed to herein.  All prior
agreements between the Employers and the Executive with respect to the matters
agreed to herein are hereby superseded and shall have no force or effect.  Without limiting the generality of the
preceding sentence, the parties hereto agree that, immediately prior to the
Effective Date, the Employment Agreement dated November 6, 2000 between Chester
Valley, First Financial and the Executive (the “Old Agreement”) shall be
cancelled and shall have no force and effect, and the Executive agrees that she
shall not be entitled to and shall not receive any payments or benefits
pursuant to the Old Agreement as a result of the transactions contemplated by
the Merger Agreement.


 


24.                               Survival.  In the event the Executive’s employment is
terminated during the term of this Agreement, any rights given under this
Agreement to the Executive or the Employers, or any obligation imposed upon the
Executive or the Employers under this Agreement, based upon the nature of such
termination shall survive the Date of Termination, including those provisions
in Sections 5, 6, 7 and 8 that relate to the specific reason for the termination
of employment.  In addition, the
provisions of Sections 9, 10, 12, 13, 21, 22 (with respect to acts or omissions
occurring on or before the Date of Termination), 23 and 24 shall survive the
Date of Termination.


 


17





















 


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


 


	
  Attest:

  	
  WILLOW GROVE BANCORP

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Christopher E. Bell

  	
   

  	
  By:

  	
  /s/ William W. Langan

  	
   

  
	
  Christopher E. Bell

  	
   

  	
  William W. Langan

  
	
  Corporate Secretary

  	
   

  	
  Chairman of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
  WILLOW GROVE  BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Christopher E. Bell

  	
   

  	
  By:

  	
  /s/ William W. Langan

  	
   

  
	
  Christopher E. Bell

  	
   

  	
  William W. Langan

  
	
  Corporate Secretary

  	
   

  	
  Chairman of the Board

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
  By:

  	
  /s/ Donna M. Coughey

  	
   

  
	
   

  	
   

  	
  Donna M. Coughey

  	
   

  
						



 


18





















 


Exhibit A


 


GENERAL RELEASE


 


1.  Release of Claims by Executive.


 


(a)  In consideration of the payments and benefits
to be provided to                                   (“Executive”)
pursuant to the employment agreement, dated as of January 20, 2005, to
which Executive and Willow Grove Bancorp, Inc., a Pennsylvania corporation (the
“Company”), are parties (the “Employment Agreement”), the
sufficiency of which is acknowledged hereby, Executive, with the intention of
binding herself and her heirs, executors, administrators and assigns, does
hereby release, remise, acquit and forever discharge the Company and its
subsidiaries and affiliates (the “Company Affiliated Group”), their
present and former officers, directors, executives, agents, attorneys and
employees, and the successors, predecessors and assigns of each of the
foregoing (collectively, the “Company Released Parties”), of and from
any and all claims, actions, causes of action, complaints, charges, demands,
rights, damages, debts, sums of money, accounts, financial obligations, suits,
expenses, attorneys’ fees and liabilities of whatever kind or nature in law,
equity or otherwise, whether accrued, absolute, contingent, unliquidated or
otherwise and whether now known or unknown, suspected or unsuspected, which
Executive, individually or as a member of a class, now has, owns or holds, or
has at any time heretofore had, owned or held, against any Company Released
Party in any capacity, including, without limitation, any and all claims (i)
arising out of or in any way connected with Executive’s service to any member
of the Company Affiliated Group (or the predecessors thereof) in any capacity,
or the termination of such service in any such capacity, (ii) for severance or
vacation benefits, unpaid wages, salary or incentive payments, (iii) for breach
of contract, wrongful discharge, impairment of economic opportunity,
defamation, intentional infliction of emotional harm or other tort, (iv) for
any violation of applicable state and local labor and employment laws
(including, without limitation, all laws concerning unlawful and unfair labor
and employment practices) and (v) for employment discrimination under any
applicable federal, state or local statute, provision, order or regulation, and
including, without limitation, any claim under Title VII of the Civil Rights
Act of 1964 (“Title VII”), the Civil Rights Act of 1988, the Fair Labor
Standards Act, the Americans with Disabilities Act (“ADA”), the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), the Age
Discrimination in Employment Act (“ADEA”) and any similar or analogous
state statute, excepting only:


 


(A)  the rights of Executive under the Employment Agreement,
including her right to severance;


 


(B)  the rights of Executive (i) relating to any
stock options and other equity-based awards held by Executive as of the date
hereof (collectively, the “Equity Arrangements”) and (ii) as a
stockholder of the Company or its affiliates;


 


1





















 


(C)  the right of Executive to receive COBRA
continuation coverage in accordance with applicable law;


 


(D)  rights to indemnification Executive may have
under (i) applicable corporate law, (ii) the bylaws or articles of
incorporation of any Company Released Party, (iii) any other agreement between
Executive and a Company Released Party, (iv) as an insured under any director’s
and officer’s liability insurance policy now or previously in force or (v) Section 6.08
of the Agreement and Plan of Merger, dated as of January 20, 2005, between
the Company and Chester Valley Bancorp, Inc.; and


 


(E)  claims for benefits under any health,
disability, retirement, life insurance or other, similar “employee benefit plan”
(within the meaning of Section 3(3) of ERISA) of the Company Affiliated
Group (the “Company Benefit Plans”).


 


(b)  Executive acknowledges and agrees that the
release of claims set forth in this Section 1 is not to be construed in
any way as an admission of any liability whatsoever by any Company Released
Party, any such liability being expressly denied.


 


(c)  The release of claims set forth in this Section 1
applies to any relief no matter how called, including, without limitation,
wages, back pay, front pay, compensatory damages, liquidated damages, punitive
damages, damages for pain or suffering, costs, and attorney’s fees and
expenses.


 


(d)  Executive specifically acknowledges that her
acceptance of the terms of the release of claims set forth in this Section 1
is, among other things, a specific waiver of her rights, claims and causes of
action under Title VII, ADEA, ADA and any state or local law or regulation in
respect of discrimination of any kind.


 


(e)  Executive shall have a period of 21 days to
consider whether to execute this General Release. To the extent Executive has
executed this General Release within less than twenty-one (21) days after
its delivery to her, the Executive hereby acknowledges that her decision to execute
this General Release prior to the expiration of such twenty-one (21) day
period was entirely voluntary.  If
Executive accepts the terms hereof and executes this General Release, she may
thereafter, for a period of 7 days following (and not including) the date of
execution, revoke this General Release. If no such revocation occurs, this
General Release shall become irrevocable in its entirety, and binding and
enforceable against Executive, on the day next following the day on which the
foregoing seven-day period has elapsed. Any revocation of this General Release
shall be deemed for all purposes a revocation of this General Release in its
entirety.


 


(f)  Executive acknowledges and agrees that she
has not, with respect to any transaction or state of facts existing prior to
the date hereof, filed any complaints, charges or lawsuits against any Company
Released Party with any governmental agency, court or tribunal.


 


2.  Effect of Unenforceability of Release.  In addition to any other remedy available to
the Company hereunder, in the event that, as a result of a challenge brought by
an Employee Released Party (as defined below), the release of claims set forth
in Section 1 becomes null and void 


 


2





















 


or is otherwise determined not to be enforceable, then the Company’s
obligation to make any additional payments or to provide any additional
benefits under the Severance Agreement shall immediately cease to be of any
force and effect, and Executive shall promptly return to the Company any
payments or benefits the provision of which by the Company was conditioned on
the enforceability of this General Release.


 


3.  Release of Claims by the Company.


 


(a)   The Company, with the intention of binding
itself and its subsidiaries, affiliates, predecessors and successors and their
directors and officers (collectively, the “Releasing Entities”), does hereby
release, remise, acquit and forever discharge Executive and her heirs, estate,
executors, administrators and assigns (collectively, the “Employee Released
Parties”), of and from any and all claims, actions, causes of action,
complaints, charges, demands, rights, damages, debts, sums of money, accounts,
financial obligations, suits, expenses, attorneys’ fees and liabilities of whatever
kind or nature in law, equity or otherwise, whether accrued, absolute,
contingent, unliquidated or otherwise and whether now known or unknown,
suspected or unsuspected, which the Company and its subsidiaries, affiliates,
predecessors and successors, individually or as a member of a class, now have,
own or hold, or have at any time heretofore had, owned or held, against any
Employee Released Party, excepting only:


 


(A)  rights of the Releasing Entities under this
General Release, the post-termination of employment obligations of the Employment
Agreement, the Equity Arrangements and the Company Benefit Plans; and


 


(B)  rights of the Releasing Entities arising by
reason of Executive having committed a crime or an act or omission to act which
constitutes fraud, willful misconduct or gross negligence.


 


(b)  The Releasing Entities acknowledge and agree
that the release of claims set forth in this Section 3 is not to be
construed in any way as an admission of any liability whatsoever by any
Employee Released Party, any such liability being expressly denied.


 


(c)  The release of claims set forth in this Section 3
applies to any relief no matter how called, including, without limitation,
compensatory damages, liquidated damages, punitive damages, damages for pain or
suffering, costs, and attorney’s fees and expenses.


 


(d)  Nothing herein shall be deemed, nor does
anything contained herein purport, to be a waiver of any right or claim or
cause of action which by law the Company is not permitted to waive.


 


(e)  The Company acknowledges and agrees that it
has not, with respect to any transaction or state of facts existing prior to
the date hereof, filed any complaints, charges or lawsuits against any Employee
Released Party with any governmental agency, court or tribunal.


 


4.  Nondisparagement.  Executive agrees not to make any disparaging
statements about the Company Released Parties or the Company Affiliated Group’s
business practices,


 


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operations or personnel policies and practices to any of the Company
Affiliated Group’s customers, clients, competitors, suppliers, directors,
consultants, employees, former employees, or the press or other media in any
country.  Similarly, the Company agrees
to instruct its executive officers and directors not to make any disparaging
statement about the Executive or Executive’s performance of her duties and
responsibilities while employed with the Company Affiliated Group to any of the
Company Affiliated Group’s customers, client’s, competitors, suppliers,
directors, consultants, employees, former employees or the press or other media
in any country.


 


5.  Counterparts.  This General Release may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.


 


6.  Successors.  This General Release shall be binding upon
any and all successors and assigns of Executive and the Company.


 


7.  Governing Law.  Except for issues or matters as to which
federal law is applicable, this General Release shall be construed in
accordance with and governed by the laws of the Commonwealth of Pennsylvania.


 


IN WITNESS WHEREOF, this General Release has been signed by or on
behalf of each of the Parties, all as of the date set forth below.


 


 


	
   

  	
  WILLOW GROVE BANCORP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Executive

  	
  By:

  
	
   

  	
  Its:

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  Dated:

  	
   

  	
   

  
								



 


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