EXHIBIT 10.3


 


FORM OF AGREEMENT


 


AGREEMENT, dated as of
May 1, 2004, between Willow Grove Bank, a federally-chartered savings bank (the
“Bank” or the “Employer” ), and                                                    
(the “Executive”).


 


WITNESSETH


 


WHEREAS, the Executive is
presently an officer of the Bank;


 


WHEREAS, the Employer
desires to be ensured of the Executive’s continued active participation in the
business of the Employer; and


 


WHEREAS, in order to
induce the Executive to remain in the employ of the Employer and in
consideration of the Executive’s agreeing to remain in the employ of the
Employer, the parties desire to specify the severance benefits which shall be
due the Executive in the event that his employment with the Employer is
terminated under specified circumstances;


 


NOW THEREFORE, in
consideration of the premises and the mutual agreements herein contained, the
parties hereby agree as follows:


 


1.                                      Definitions.  The following words and terms shall have the
meanings set forth below for the purposes of this Agreement:


 


(a)                                  Average
Annual Compensation.  The
Executive’s “Average Annual Compensation” for purposes of this Agreement shall
be deemed to mean the average amount of Base Salary and cash bonus paid to the
Executive by the Employer or any subsidiary thereof during the most recent five
calendar years preceding the Date of Termination (or such shorter period as the
Executive was employed).


 


(b)                                 Base
Salary.  “Base Salary” shall have
the meaning set forth in Section 3(a) hereof.


 


(c)                                  Cause.
Termination of the Executive’s employment for “Cause” shall mean termination
because of personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, willful
conduct which is materially detrimental (monetarily or otherwise) to the
Employer or material breach of any provision of this Agreement.


 


(d)                                 Change
in Control of the Corporation. 
“Change in Control of the Corporation” shall mean the occurrence of any
of the following:  (i) the acquisition
of control of Willow Grove Bancorp, Inc. (the “Corporation”), 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 1(a) 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 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-under the Exchange Act), directly or
indirectly, of securities of the Corporation representing 20% or more of the
combined voting power of the Corporation’s then outstanding 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 cease for
any reason to constitute at least a majority thereof


 


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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, and
(ii) 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.  Termination by the Employer of the
Executive’s employment based on “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
Employer or any subsidiary or, if no such plan applies, which would qualify the
Executive for disability benefits under the Federal Social Security System.


 


(h)                                 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 based on:


 


(i)                                     Without
the Executive’s express written consent, the failure to elect or to re-elect or
to appoint or to re-appoint the Executive to the office of                                 
of the Employer or a material adverse change made by the Employer in the
Executive’s functions, duties or responsibilities as                                    
of the Employer;


 


(ii)                                  Without
the Executive’s express written consent, a reduction by the Employer 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(b) hereof, a reduction in the
package of fringe benefits provided to the Executive, taken as a whole;


 


(iii)                               The
principal executive office of the Employer is relocated outside of Maple Glen,
Pennsylvania, or, without the Executive’s express written consent, the Employer
requires the Executive to be based anywhere other than an area in which the
Employer’s principal executive office is located, except for required travel on
business of the Employer 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 (j) below; or


 


(v)                                 The
failure by the Employer to obtain the assumption of and agreement to perform
this Agreement by any successor as contemplated in Section 9 hereof.


 


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


 


(j)                                     Notice
of Termination.  Any purported
termination of the Executive’s employment by the Employer for any reason,
including without limitation for Cause, Disability or Retirement, or by the
Executive for any reason, including without limitation for Good Reason, shall
be communicated by written “Notice of Termination” to the other party
hereto.  For purposes of this Agreement,
a “Notice of Termination” shall mean a dated notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) sets forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated,
(iii) specifies a Date of Termination, which shall be not less than thirty (30)
nor more than ninety (90) days after such Notice of Termination is given,
except in the case of the Employer’s termination of the Executive’s employment
for Cause, which shall be effective immediately; and (iv) is given in the
manner specified in Section 10 hereof.


 


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


 


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2.                                      Term
of Employment.


 


(a)                                  The
Employer hereby employs the Executive as                                    
and the Executive hereby accepts said employment and agrees to render such
services to the Employer on the terms and conditions set forth in this
Agreement. Unless extended as provided in this Section 2, this Agreement shall
terminate one (1) year after the date first above written.  Prior to the first annual anniversary of the
date first above written and each annual anniversary thereafter, the Board of
Directors of the Employer shall consider and review (after taking into account
all relevant factors, including the Executive’s performance) a one-year
extension of the term of this Agreement, and the term shall continue to extend
each year (beginning with the first annual anniversary date) if the Board of
Directors approves such extension unless the Executive gives written notice to
the Employer of the Executive’s election not to extend the term, with such
notice to be given not less than thirty (30) days prior to any such anniversary
date.  If the Board of Directors elects
not to extend the term, they shall give written notice of such decision to the
Executive not less than thirty (30) days prior to any such anniversary
date.  If any party gives timely notice
that the term will not be extended as of any such annual anniversary date, then
this Agreement shall terminate at the conclusion of its remaining term.  References herein to the term of this
Agreement shall refer both to the initial term and successive terms.


 


(b)                                 During
the term of this Agreement, the Executive shall perform such executive services
for the Employer as is consistent with his title of                                      
and from time to time assigned to him by the Employer’s Board of Directors.


 


3.                                      Compensation
and Benefits.


 


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


 


(b)                                 During
the term of this Agreement, the Executive shall be entitled to participate in
and receive the benefits of any pension or other retirement benefit plan,
profit sharing, stock option, employee stock ownership, or other plans,
benefits and privileges given to employees and executives of the Employer, to
the extent commensurate with his then duties and responsibilities, as fixed by
the Board of Directors of the Employer. 
The Employer shall not make any changes in such plans, benefits or
privileges which would adversely affect the Executive’s rights or benefits
thereunder, unless such change occurs pursuant to a program applicable to all
executive officers of the Employer and does not result in a proportionately
greater adverse change in the rights of or benefits to the Executive as
compared with any other executive officer of the Employer.  Nothing paid to the Executive under any plan
or arrangement presently in effect or made available in the future shall be
deemed to be in lieu of the salary payable to the Executive pursuant to Section
3(a) hereof.


 


(c)                                  During
the term of this Agreement, the Executive shall be entitled to paid annual
vacation in accordance with the policies as established from time to time by
the Board of Directors of the Employer. 
The Executive shall not be entitled to receive any additional
compensation from the Employer for failure to take a vacation, nor shall the
Executive be able to accumulate unused vacation time from one year to the next,
except to the extent authorized by the Board of Directors of the Employer.


 


4.                                      Expenses.  The Employer shall reimburse the Executive
or otherwise provide for or pay for all reasonable expenses incurred by the
Executive in furtherance of, or in connection with the business of the
Employer, including, but not by way of limitation, automobile and traveling
expenses, subject to such reasonable documentation and other limitations as may
be established by the Board of Directors of the Employer.  If such expenses are paid in the first
instance by the Executive, the Employer shall reimburse the Executive therefor.


 


5.                                      Termination.


 


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


 


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Retirement, and the
Executive shall have the right, upon prior Notice of Termination, to terminate
his employment hereunder for any reason.


 


(b)                                 In
the event that the (i) the Executive’s employment is terminated by the Employer
for Cause, or (ii) the Executive terminates his employment hereunder other
than for Good Reason, the Executive shall have no right pursuant to this
Agreement to compensation or other benefits for any period after the applicable
Date of Termination.


 


(c)                                  In
the event that the Executive’s employment is terminated as a result of
Disability, Retirement or the Executive’s death during the term of this
Agreement, the Executive shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the applicable Date of
Termination.


 


(d)                                 In
the event that (i) the Executive’s employment is terminated by the Employer for
other than Cause, Disability, Retirement or the Executive’s death or (ii) such
employment is terminated by the Executive due to a material breach of this
Agreement by the Employer, which breach has not been cured within fifteen (15)
days after a written notice of non-compliance has been given by the Executive to
the Employer, then the Employer shall pay to the Executive, in either twelve
(12) equal monthly installments beginning with the first business day of the
month following the Date of Termination or in a lump sum within five business
days of the Date of Termination (at the Executive’s election), a cash severance
amount equal to one times the Executive’s current Base Salary; provided,
however, that this Section 5(d) shall not be applicable if the termination of
employment occurs concurrently with or subsequent to a Change in Control of the
Corporation.


 


(e)                                  In
the event that (i) the Executive’s employment is terminated concurrently with
or subsequent to a Change in Control of the Corporation for other than Cause,
Disability, Retirement or the Executive’s death or (ii) the Executive elects to
terminate his employment for Good Reason, then the Employer shall, subject to
the provisions of Section 6 hereof, if applicable,


 


(A)                              pay
to the Executive, in either twenty-four (24) equal monthly installments
beginning with the first business day of the month following the Date of
Termination or in a lump sum within five business days of the Date of
Termination (at the Executive’s election), a cash severance amount equal to two
(2) times the Executive’s Average Annual Compensation; and


 


(B)                                maintain
and provide for a period ending at the earlier of (i) one year subsequent to
the Date of Termination or (ii) the date of the Executive’s full-time
employment by another employer (provided that the Executive is entitled under
the terms of such employment to benefits substantially similar to those
described in this subparagraph (B)), at no cost to the Executive, the
Executive’s continued participation in all group insurance, life insurance,
health and accident, disability and other employee benefit plans, programs and
arrangements in which the Executive was entitled to participate immediately
prior to the Date of Termination (other than stock option and restricted stock
plans of the Employer), provided that in the event that the Executive’s
participation 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 Employer shall arrange to provide the Executive with benefits substantially
similar to those which the Executive was entitled to receive under such plans,
programs and arrangements immediately prior to the Date of Termination.


 


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


 


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7.                                      Mitigation;
Exclusivity of Benefits.


 


(a)                                  The
Executive shall not be required to mitigate the amount of any benefits
hereunder by seeking other employment or otherwise, nor shall the amount of any
such benefits be reduced by any compensation earned by the Executive as a result
of employment by another employer after the Date of Termination or otherwise,
except as set forth in Section 5(e)(B)(ii) hereof.


 


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


 


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


 


9.                                      Assignability.  The Employer may assign this Agreement and
its rights and obligations hereunder in whole, but not in part, to any
corporation, bank or other entity with or into which the Employer may hereafter
merge or consolidate or to which the Employer may transfer all or substantially
all of its assets, if in any such case said corporation, bank or other entity
shall by operation of law or expressly in writing assume all obligations of the
Employer hereunder as fully as if it had been originally made a party hereto,
but may not otherwise assign this Agreement or its rights and obligations
hereunder.  The Executive may not assign
or transfer this Agreement or any rights or obligations hereunder.


 


10.                               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
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below:


 


	
  To the Employer:  Board of Directors

  
	
   

  	
   

  	
  Willow Grove Bank

  
	
   

  	
   

  	
  Welsh & Norristown
  Roads

  
	
   

  	
   

  	
  Maple Glen,
  Pennsylvania

  
	
   

  
	
  To the Executive:  At home address

  



 


11.                               Amendment;
Waiver.  No provisions of this
Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by the Executive
and such officer or officers as may be specifically designated by the Board of
Directors of the Employer to sign on its behalf.  No waiver by any party hereto at any time of any breach by any
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.


 


12.                               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.


 


13.                               Nature
of Obligations.  Nothing contained
herein shall create or require the Employer to create a trust of any kind to
fund any benefits which may be payable hereunder, and to the extent that the
Executive acquires a right to receive benefits from the Employer hereunder,
such right shall be no greater than the right of any unsecured general creditor
of the Employer.


 


14.                               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.


 


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15.                               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.


 


16.                               Counterparts.  This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.


 


17.                               Regulatory
Actions.  The following provisions
shall be applicable to the parties to the extent that they are required to be
included in 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 Employer’s affairs pursuant to notice
served under Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit
Insurance Act (“FDIA”) (12 U.S.C. §1818(e)(3) and 1818(g)(1)), the Employer’s
obligations under this Agreement shall be suspended as of the date of service,
unless stayed by appropriate proceedings. 
If the charges in the notice are dismissed, the Employer may, in its
discretion:  (i) pay the Executive all
or part of the compensation withheld while its obligations under this Agreement
were suspended, and (ii) reinstate (in whole or in part) any of its obligations
which were suspended.


 


(b)                                 If
the Executive is removed from office and/or permanently prohibited from
participating in the conduct of the Employer’s affairs by an order issued under
Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C. §1818(e)(4) and
(g)(1)), all obligations of the Employer under this Agreement shall terminate
as of the effective date of the order, but vested rights of the Executive and
the Employer as of the date of termination shall not be affected.


 


(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 Employer 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 Employer is necessary): (i) by
the Director of the Office of Thrift Supervision (“OTS”), or his/her designee,
at the time the Federal Deposit Insurance Corporation (“FDIC”) enters into an agreement
to provide assistance to or on behalf of the Bank under the authority contained
in Section 13(c) of the FDIA (12 U.S.C. §1823(c)); or (ii) by the Director of
the OTS, or his/her designee, at the time the Director or his/her designee
approves a supervisory merger to resolve problems related to operation of the
Bank or when the Bank is determined by the Director of the OTS to be in an
unsafe or unsound condition, but vested rights of the Executive and the
Employer as of the date of termination shall not be affected.


 


18.                               Regulatory
Prohibition.  Notwithstanding any
other provision of this Agreement to the contrary, any payments made to the
Executive pursuant to this Agreement, or otherwise, are subject to and
conditioned upon their compliance with Section 18(k) of the FDIA (12 U.S.C.
§1828(k)) and the regulations promulgated thereunder, including 12 C.F.R. Part
359.  In the event of the Executive’s
termination of employment with the Bank for Cause, all employment relationships
and managerial duties with the Bank shall immediately cease regardless of
whether the Executive is 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.


 


19.                               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.


 


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


 


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IN WITNESS WHEREOF, this
Agreement is effective as of the date first above written.


 


 


	
  Attest

  	
  WILLOW GROVE BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ 

  	
   

  	
  By:

  	
  /s/.

  	
   

  
	
   

  	
   

  	
   

  	
  Frederick A. Marcell
  Jr.

  
	
   

  	
   

  	
   

  	
  President and Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Executive

  
							



 


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