EXHIBIT 10.2







Exhibit
10.2



AMENDMENT

TO EMPLOYMENT AGREEMENT




     AGREEMENT made this 18th day of February 2009, by and 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 JAMES J. MCSWIGGAN, JR. (“Executive”), an individual residing at 211 Twinings Lane, Wayne, PA
19087.



WITNESSETH:




     WHEREAS, Corporation, Bank, and Executive are presently parties to an employment agreement,
dated September 22, 2006 (the “Employment Agreement”); and



     WHEREAS, Corporation, Bank, and Executive desire to amend the Employment Agreement to cover,
among other things, the Executive’s appointment as both President and Chief Operating Officer of
Corporation and Bank, by executing this document (the “Amendment”), effective December 25, 2008.



     NOW, THEREFORE, in consideration of the premises and intending to be legally bound hereby, the
parties agree that the Employment Agreement, be further amended and interpreted as follows,
effective December 25, 2008:



     1.     Appointment as President. Effective December 25, 2008, and in addition to
the titles presently provided in the Employment Agreement, the Executive is appointed as President
of Corporation and Bank. In such position, the Executive shall report to the Board of Directors of
Corporation and Bank, and shall have such duties and responsibilities 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 set forth in Exhibit A of this Amendment, which may be amended from time to time
by the Board of Directors of Corporation and Bank.



     2.     Salary while President. Effective January 2, 2009, during the period in which
Executive serves as President of Corporation and Bank and in lieu of the amount provided in
Section 4(a) of the Employment Agreement, Executive’s salary shall be an annual rate of $325,000,
payable at the same times as salaries are payable to other executive employees of Corporation or
Bank (the “Annual Base Salary”). Executive’s Annual Base Salary under this Section 2 shall be
subject to adjustment in accordance with the following:




	 	(a)	 	If Corporation’s return on assets (“ROA”) for a given year is at least .5% AND if
Corporation’s return on equity (“ROE”) for a given year is at least 4%, Executive’s base
salary for the subsequent year shall be increased to $335,000;






	 	(b)	 	If Corporation’s ROA for a given year is at least .7% AND if Corporation’s ROE for
a given year is at least 6%, Executive’s base salary for the subsequent year shall be
increased to $345,000;





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	 	(c)	 	If Corporation’s ROA for a given year is at least .9% AND if Corporation’s ROE for
a given year is at least 8%, Executive’s base salary for the subsequent year shall be
increased to $355,000;






	 	(d)	 	If Corporation’s ROA for a given year is at least 1.2% AND if Corporation’s ROE for
a given year is at least 11%, Executive’s base salary for the subsequent year shall be
increased to $365,000; and






	 	(e)	 	If Corporation’s ROA for a given year is at least 1.5% AND if Corporation’s ROE for
a given year is at least 15%, Executive’s base salary for the subsequent year shall be
increased to $375,000.





     The following chart is provided as a summary recap of the foregoing terms and is intended to
serve as an example only:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Performance Ratios	 	Beginning Base	 	ROA — 0.5%
ROE — 4.0%	 	ROA — 0.7%
ROE — 6.0%	 	ROA — 0.9%
ROE — 8.0%	 	ROA — 1.2%
ROE — 11.0%	 	ROA — 1.5%
ROE — 15.0%
	 

	 	 	 	 	 	 
	 	 
	 	 
	 	 
	 	 

	Fixed Base (Resets & Locks at)

	 	$	325,000	 	 	$	335,000	 	 	$	345,000	 	 	$	355,000	 	 	$	365,000	 	 	$	375,000	 






     Executive’s Annual Base Salary, if increased under this Section because of the
achievement of any of the foregoing performance ratios in a given year, shall not be decreased
because of a failure to achieve such performance ratios in a subsequent year.



     Notwithstanding the foregoing, the Executive shall not be entitled to receive any increases
under this Section unless and until the shareholder cash dividend program with respect to
Corporation’s Class A common stock is put in effect; provided, however, that if such a shareholder
dividend program could be put back into effect as a result of the favorable economic condition of
Corporation and Bank and under applicable legal requirements, but the Board of Directors of
Corporation fails to declare a cash dividend, this paragraph shall be null and void.



     3.     Annual Review while President. During the period in which Executive serves as
President of Corporation and Bank, the Board of Directors of Corporation and/or Bank shall conduct
an annual evaluation of the performance of Executive. The Chairman of the Board of Directors of
Corporation shall communicate the results of such review to Executive.



     4.     Effect of This Amendment on Employment Agreement Generally. Except as otherwise
provided herein, the Employment Agreement shall continue in full force and effect, including,
without limitation, the covenant not to compete and the non-solicitation of customers and employees
provisions of Section 9 of the Employment Agreement. Further, in the case of doubt, the Employment
Agreement shall prospectively be reasonably construed in a manner consistent with the intent of
this Amendment.



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     IN WITNESS WHEREOF, the parties have executed this Amendment, or caused it to be executed, as
of February 18, 2009.



	 	 	 	 	 
	 	ROYAL BANCSHARES OF PENNSYLVANIA, INC.

 	 
	 	By:  	/s/  Robert R. Tabas
 	 
	 	 	Name:  	Robert R. Tabas 	 
	 	 	Title:  	Chairman and Chief Executive Officer 	 
	 



“Company”




	 	 	 	 	 
	 	ROYAL BANK AMERICA

 	 
	 	By:  	/s/  Robert R. Tabas
 	 
	 	 	Name:  	Robert R. Tabas 	 
	 	 	Title:  	Chairman and Chief Executive Officer 	 
	 



“Bank”




	 	 	 	 	 
	 	 	 
	 	  	                              /s/ James J. McSiwggan, Jr.
 	 
	 	 	  	James J. McSwiggan, Jr. 	 
	 	 	 	 
	 



“Executive”




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EXHIBIT A


Duties and Responsibilities




	 	 	 	 	 	 	 
	Position Title:

	 	President and COO
	 	Department:
	 	 
	Reports To:

	 	Chairman and CEO
	 	Division:	 	 
	 
	 	 	 	 	 	 





JOB SUMMARY:




	•	 	Direct responsibility for managing the ongoing operations of the Corporation to achieve
financial stability and profitability.






	•	 	Key participant in Corporation’s strategic planning and execution.






	•	 	Directly manages a significant portion of the Corporation’s line and staff operations.






	•	 	Maintains a minimum of 40 hour per week as part of the responsibilities of the President
and Chief Operating Officer position, with required additional time to meet the
requirements and objectives of the position.






	•	 	Reports to the Chairman of the Board of Directors of Corporation and/or Bank and the
Board of Directors of Corporation and/or Bank.




POSITION RESPONSIBILITIES:




	1.	 	Provides key input as a member of the executive management team in the following areas
(as reflected in the Bank’s Organization Chart as approved by the Board):






	 	a.	 	Participates in all strategic planning and execution






	 	b.	 	Provides key input and makes decisions at operational levels on a
majority of the lines of businesses in the Company






	 	c.	 	Is the key position for all compliance and regulatory issues, makes
decisions as applicable and discusses high level decisions with entire team






	 	d.	 	Has significant responsibility in all Company Committees including
Chair of the Rate Committee and Co-Chair of the Executive Loan Committee






	 	e.	 	Ensures that Board and staff have sufficient and up-to-date information
to perform their roles






	2.	 	Oversees and manages overall Company performance:






	 	a.	 	Through the management team, oversees revenue, profit, growth, and
lines of business performance






	 	b.	 	Through the management team, oversees efficiency, customer service,
quality, creation and delivery of products






	3.	 	Ensures that budgets, business plans, and projects are developed, communicated, and
executed according to the Company’s strategy:






	 	a.	 	Establishes budgets and schedules to meet strategy






	 	b.	 	Meets regularly with project teams and department heads to ensure that
plans and goals are clear, follows up on plan execution, facilitates resolution of
issues, evaluates and rewards people





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	 	c.	 	Establishes standards of performance, conducts performance reviews on
direct reports, and develops performance improvement plans for senior team members






	 	d.	 	Ensures that an annual plan and budget are prepared and presented to
the Board






	 	e.	 	Communicates all business plans, decisions, and expectations throughout
the Company via a variety of communication methods






	4.	 	Allocates and manages resources, primarily staff, sufficient to meet business plan
requirements:






	 	a.	 	Forecasts staff needs and staffs accordingly






	 	b.	 	Selects and develops capable managers; conducts/oversees individual
performance appraisals and compensation levels






	 	c.	 	Holds staff accountable for attaining respective performance objectives
and complying with established policies






	 	d.	 	Manages overall staffing resources for the Company by hiring,
rewarding, promoting, disciplining, terminating all company employees as necessary
to meet the business plans and budgets






	5.	 	Has direct oversight of the finance and bank investment functions:






	 	a.	 	Through dotted line authority helps to manage the CFO for financial
integrity of all systems, reports, and compliance






	 	b.	 	Oversees asset/liability function






	 	c.	 	Oversees bank investment portfolio






	 	d.	 	Oversees all financial controls






	 	e.	 	Oversees all financial reporting and accounting, ensuring accuracy,
timeliness, and compliance






	 	f.	 	Certifies to the Chairman/CEO the accuracy of all financial regulatory
filings based on review with CFO and certifies Corporation financial statements to
Chairman of Board of Directors and Chief Executive Officer of Corporation.






	6.	 	Has direct oversight of support operating areas:






	 	a.	 	Directly manages EVP of support areas for efficient operations of
respective functions and EVP position created specifically to assist President and
Chief Operating Officer






	 	b.	 	Oversees loan accounting






	 	c.	 	Oversees operations and information technology






	 	d.	 	Oversees company wide risk management






	 	e.	 	Oversees subsidiaries including tax lien, leasing, and RBA Capital






	7.	 	Manages special projects:






	 	a.	 	Performs market analysis and environmental scanning for opportunities






	 	b.	 	Identifies acquisition and merger opportunities






	 	c.	 	Assists with capital acquisition and capital development






	 	d.	 	Performs all financial analysis applicable to opportunities






	 	e.	 	Negotiates purchase and sale agreements






	 	f.	 	Assists in joint venture/investor negotiations






	8.	 	Has direct oversight of asset quality via the Credit function:






	 	a.	 	Through dotted line authority helps to manage the Chief Credit Officer
for appropriate asset quality





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	 	b.	 	Oversees lending policy relative to credit quality






	 	c.	 	Oversees loan approval process






	 	d.	 	Oversees loan delinquency






	 	e.	 	Oversees loan documentation






	9.	 	Has direct oversight of the Special Assets function which provides workout and recovery
work on assets in collection/recovery status; manages the manager of this function.






	10.	 	Has direct oversight of the Retail/Branch function of the Bank:






	 	a.	 	Manages the executive in charge of the Retail Branch function for the
efficient delivery of all retail products to customers






	 	b.	 	Oversees all branch operations and administration






	 	c.	 	Oversees all regulatory compliance in the deposit area






	 	d.	 	Oversees all security






	 	e.	 	Oversees all facilities






	 	f.	 	Oversees all retail product development, management, and monitoring






	 	g.	 	Oversees all retail market trends and competitive environment






	11.	 	On a periodic and as available basis, represents the Company in the external
marketplace in community events, business functions, and with a wide variety of customers
and potential customers in promoting the Company’s image and brand.






	12.	 	Participates and handles other responsibilities as required to properly manage the
Company in the best interests of the shareholders and as prescribed in writing from time to
time by the Chairman or Board of Directors.





Job Description Review / Evaluation




Type of Evaluation





	 	 	o Position Description Qualitative Evaluation Completed






	 	 	o Other





	 	 	 	 	 	 	 
	Date Completed:

	 	 
	 	By Whom Completed:
	 	 
	Approved By

	 	 	 	On
	 	 
	 

	 	Chairman of the Board
	 	 
	 	Date







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