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contrary: (ii) Executive’s employment with the Corporation or Bank may be terminated by theparties’ mutual agreement in writing to terminate the Executive’s employment hereunder at any time;and (iii) nothing in this Agreement shall mandate or prohibit a continuation of Employee’semployment following the expiration of the term of the Agreement upon such terms as the Board andExecutive may mutually agree.          (b) Involuntary Termination without Cause. Executive’s employment under thisAgreement may be terminated at any time during the Employment Period without Cause, by action ofthe Board of Directors of Corporation and Bank, upon giving written notice of such termination toExecutive at least ninety (90) days prior to the date upon which such termination shall takeeffect. If Executive’s employment is terminated under the provisions of this Section 3(b),Executive shall be entitled to receive: (i) any earned and unpaid salary accrued through theeffective date of termination, pro rated on a daily basis, (ii) subject to the terms thereof, anybenefits which may be due to the Executive on the date of termination under the provisions of anyemployee benefit plan, program or policy, (iii) medical benefit continuation at the Executive’sand/or his dependents’ expense as provided by law (the payments and benefits set forth in Section3(b)(i) through (iii) shall be referred to, collectively, as the “Accrued Benefits”), and (iv) theamount set forth in Section 4(b) prorated for the number of days Executive was actually employedduring the applicable year. Executive shall be entitled to no further payments or benefits underthis Agreement, whether, salary, severance, any type of bonus, including any pro rata portionthereof, or otherwise.          (c) Involuntary Termination for Cause. Notwithstanding the previous provision ofSection 3(a) of this Agreement, this Agreement shall terminate automatically for Cause (as definedherein) upon written notice from the Board of Directors of Corporation and Bank to Executive. Asused in this Agreement, “Cause” shall mean any of the following:               (i) Executive’s conviction of or plea of guilty or nolo contendere to a felony a crime offalsehood or a crime involving moral turpitude, or the actual incarceration of Executive for aperiod of sixty (60) consecutive days or more;               (ii) Executive’s willful failure to follow the good faith lawful instructions of the Board ofDirectors of Corporation or Bank with respect to their operations, after written notice fromCorporation or Bank and a failure to cure such violation within ten (10) days of said writtennotice, unless it is apparent under the circumstances that Executive is unable to cure suchviolation; or               (iii) Executive’s willful failure to substantially perform Executive’s duties to Corporationor Bank, other than a failure resulting from Executive’s incapacity because of physical or mentalillness, as provided in subsection (g) of this Section 3, after written notice from Corporation orBank and a failure to cure such violation within ten (10) days of said written notice, unless it isapparent under the circumstances that Executive is unable to cure such violation, which failureresults in injury to Corporation or Bank, monetarily or otherwise.               (iv) Executive’s intentional violation of the provisions of this Agreement, after writtennotice from Corporation or Bank and a failure to cure such violation within ten (10)days
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of said written notice, unless it is apparent under the circumstances that Executive isunable to cure such violation;               (v) dishonesty of Executive in the performance of his duties, as reasonably determined by avote of seventy-five percent (75%) of the directors of the Board of Directors;               (vi) Executive’s removal or prohibition from being an institutional-affiliated party by afinal order of an appropriate federal banking agency pursuant to Section 9(e) of the FederalDeposit Insurance Act or any applicable Regulatory Agency.               (vii) the willful engaging by Executive in misconduct injurious to the Corporation or Bankafter notice from Corporation or Bank, and a failure to cure such conduct within twenty (20) days;               (viii) the breach of Executive’s fiduciary duty to the Corporation or Bank involving personalprofit;               (ix) the willful violation of (1) any material law, rule or regulation applicable toCorporation or Bank or (2) any final cease and desist order issued by an applicable regulatoryagency;               (x) conduct on the part of Executive that brings public discredit to Corporation or Bank orthat is clearly contrary to the best interests of Corporation or Bank as reasonably determined by avote of seventy-five percent (75%) of the directors of the Board of Directors;               (xi) unlawful harassment by Executive against employees, customers, business associates,contractors or vendors of Corporation or Bank as reasonably determined by seventy-five percent(75%) of the disinterested members of the Board of Directors following an investigation of theclaims by a third party;               (xii) any act of fraud or misappropriation against the Corporation, the Bank, or theircustomers, employees, contractors or business associates;               (xiii) intentional misrepresentation of a material fact, or intentional omission ofinformation necessary to make the information supplied materially misleading, in application orother information provided by Executive to Corporation or Bank in connection with Executive’semployment with Corporation or Bank; or               (xiv) the existence of any material conflict between the interests of Corporation or Bank andExecutive that is not disclosed in writing by Executive to Corporation or Bank prior to action andapproved in writing by the Board of Directors, and, after notice from Corporation or Bank, afailure to cure such conflict within twenty (20) days of said notice.     Notwithstanding the foregoing, Executive’s employment under this Agreement shall not be deemedto have been terminated for “Cause” under this Section 3(c) above if such termination took placesolely as a result of:               (i) questionable judgment on the part of Executive;
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               (ii) any act or omission believed by Executive, in good faith, to have been in, or notopposed to, the best interests of Corporation or Bank (or its affiliated companies); or               (iii) any act or omission in respect of which a determination could properly be made thatExecutive met the applicable standard of conduct prescribed for indemnification or reimbursement orpayment of expenses under the Charter or By-laws of Corporation or Bank or the directors’ andofficers’ liability insurance of Corporation or Bank, in each case as in effect at the time of suchact or omission.     If this Agreement is terminated for Cause, Executive shall receive only his Accrued Benefitsand shall be entitled to no further payments or benefits under this Agreement, whether, salary,severance, any type of bonus, including any pro rata portion thereof, or otherwise.          (d) Voluntary Termination. Executive’s employment under this Agreement may beterminated by the Executive at any time during the Employment Period for any reason or no reason,by giving written notice of such termination to the Chairman of the Board of Directors ofCorporation at least ninety (90) days prior to the date upon which such termination is to takeeffect. If Executive terminates his employment under the provisions of this Section 3(d),Executive shall receive only his Accrued Benefits and shall be entitled to no further payments orbenefits under this Agreement, whether, salary, severance, any type of bonus, including any prorata portion thereof, or otherwise.          (e) Termination upon Executive’s Disability. Notwithstanding the previous provisionsof Section 3 of this Agreement, this Agreement shall terminate automatically upon Executive’sDisability and Executive’s rights under this Agreement shall cease as of the date of suchtermination without further compensation due Executive, provided, however, that Executive shall beentitled to receive his Accrued Benefits. For purposes of this Agreement, the term “Disability”shall have the same meaning as under the long term disability plan or policy maintained byCorporation. If, for any reason, Corporation does not maintain such plan or policy, then“Disability” shall mean the inability or incapacity (by reason of a medically determinable physicalor mental impairment) of Executive to perform the duties and responsibilities related to the job orposition with Corporation described in Section 2 for a period that lasts, or can reasonably beexpected to last, more than one hundred and eighty (180) days.          (f) Termination upon Death of Executive. Notwithstanding the previous provisions ofSection 3 of this Agreement, this Agreement shall terminate automatically upon Executive’s deathand Executive’s rights under this Agreement shall cease as of the date of such termination withoutfurther compensation due Executive, provided, however, that Executive shall be entitled to receivehis Accrued Benefits.          (g) Resignation as Director. Executive agrees that in the event his employment underthis Agreement is terminated, unless (1) Executive maintains an ownership interest in theCorporation of five percent (5%) or more, or (2) termination is due to retirement, Executive shallresign as a director of Corporation and Bank, or any affiliate or subsidiary thereof, if he is thenserving as a director of any of such entities.
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     4. Employment Period Compensation.          (a) Annual Base Salary. For services performed by Executive under this Agreement,Corporation and Bank shall pay Executive a base salary during the Employment Period at the rate of$180,000 per year, to increase and be adjusted to $190,000 per year on June 1, 2009, minusapplicable withholdings and deductions, payable at the same times as salaries are payable to otherexecutive employees of Corporation or Bank (“Annual Base Salary”). Corporation and/or Bank may,from time to time, increase Executive’s Annual Base Salary, and any and all such increases shall bedeemed to constitute amendments to this Section 4(a) to reflect the increased amounts, effective asof the date established for such increases by the Board of Directors of Corporation or Bank or anycommittee of such Board in the resolutions authorizing such increases.          (b) Bonus. For services performed by Executive under this Agreement, Corporationand/or Bank may, from time to time, pay a bonus or bonuses (including payments made under BankProfit Sharing Incentive Plan) to Executive as Corporation and/or Bank, in their sole discretion,deem appropriate. The payment of any such bonuses shall not reduce or otherwise affect any otherobligation of Corporation and/or Bank to Executive provided for in this Agreement and any otherawards by the Corporation and/or Bank to all Tier I employees generally. The total target bonusamount under this Section shall be at least $35,000, consisting of the following two components:               (i) fifty percent (50%) of the bonus potential (i.e., a target of at least $17,500) is tiedto Executive’s attainment of a satisfactory qualitative performance review; and               (ii) fifty percent (50%) of the bonus potential (i.e., a target of at least $17,500) is tiedto Executive’s achievement of certain predetermined benchmarks.     The predetermined benchmarks under Section 4(b)(ii) for the first year of the EmploymentPeriod are as follows:                    (A) Executive must successfully implement the IPS Sendero system by December 31, 2008;                    (B) Corporation’s outside auditors must find no material weaknesses in Corporation’sfinancial reporting;                    (C) on or before February 28, 2009, Executive must automate production of Corporation’sfinancial statements to assure an initial draft release of such financial statements within seven(7) days of the end of the month being reported; and                    (D) on or before February 28, 2009, Executive must establish a review process of Corporationfinancial statement drafts to ensure such drafts are accurate, in compliance with all generallyaccepted accounting principles, and released to the Board of Directors not later than the Fridayprior to the week in which the regularly scheduled meeting of the Board of Directors will occur.
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     The Chairman of the Board of Directors of Corporation, or his designee, shall meet withExecutive at least ninety (90) days prior to each anniversary of the Effective Date to establishnot more than four mutually agreeable benchmarks for the subsequent year. The benchmark componentof Executive’s bonus under Section 4(b)(ii) shall be prorated for the number of benchmarksExecutive actually achieves during the applicable year (with each such benchmark weighted equally).Bonuses earned under this Section shall be paid within thirty (30) days of the close of the yearto which such bonus relates.          (c) Vacation; Paid Time Off. During the term of this Agreement, Executive shall beentitled to four (4) weeks paid annual vacation in accordance with the policies as established fromtime to time by the Boards of Directors of Corporation and Bank, provided, however, Executive shallnot be entitled to receive any additional compensation from Corporation and Bank for Failure totake a vacation, nor shall Executive be able to accumulate unused vacation time from one year tothe next, except to the extent authorized by the Boards of Directors of Corporation and Bank.Executive shall also be entitled to sick leave and one (1) week paid time off for continuingprofessional education in accordance with the policies as established from time to time by theBoards of Directors of Corporation and Bank          (d) Automobile. During the term of this Agreement, Corporation and Bank shallprovide Executive with an automobile or an automobile allowance of $4,800 per year.          (e) Employee Benefit Plans. During the term of this Agreement, Executive shall beentitled to participate in or receive the benefits of any employee benefit plan currently in effectat Corporation and Bank, subject to the terms of said plan, until such time that the Boards ofDirectors of Corporation and Bank authorize a change in such benefits. Corporation and Bank shallprovide Executive with medical and disability coverage comparable to other full-time employees ofCorporation and Bank. Corporation and Bank shall not make any changes in such plans or benefitswhich would adversely affect Executive’s rights or benefits thereunder, unless such change occurspursuant to a program applicable to all executive officers of Corporation and Bank and does notresult in a proportionately greater adverse change in the rights of or benefits to Executive ascompared with any other executive officer of Corporation and Bank. Nothing paid to Executive underany plan or arrangement presently in effect or made available in the future shall be deemed to bein lieu of the salary payable to Executive pursuant to Section 4(a) hereof.          (f) Long Term Incentive Plan. Executive shall be eligible to participate inCorporation’s Long Term Incentive Plan (“LTIP”) to the same extent as full-time employees ofCorporation of comparable status and responsibility and in accordance with the terms and subject tothe limitations of the LTIP, as may be amended from time to time.          (g) Stock Options and Restricted Stock. Executive shall receive a one-time grant ofan option to purchase 5,000 shares of common stock of Corporation and a one-time grant of 1,300restricted shares of Corporation common stock, in accordance with the terms and subject to thelimitations of Corporation’s 2007 LTIP, which grants shall be made on the date other full-timeemployees of Corporation receive their grants for 2008, subject to the approval of the Board ofDirectors of Corporation; provided, however, that Executive shall not be eligible to receive theabove grants if his employment has been terminated for any reason, or if he has been given
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notice of his termination for any reason, or if he has resigned, or given notice of hisintention to resign prior to the date on which the grants would otherwise have been made. Theoptions and restricted shares subject to such grants shall become vested as determined by the Boardof Directors of Corporation and subject to the terms of the 2007 LTIP.          (h) Business Expenses. During the term of this Agreement, Executive shall beentitled to receive prompt reimbursement for all reasonable expenses incurred by him, which areproperly accounted for, in accordance with the policies and procedures established by the Board ofDirectors of Corporation and Bank for their executive officers. For the purpose of this Agreement,business expenses shall include fees and expenses associated with professional education, with saidprofessional education reimbursement subject to an annual cap of $2,500.     5. Termination of Employment Following Change in Control.          (a) If a Change in Control (as defined in Section 5(b) of this Agreement) shall occur and,thereafter, if at any time during the term of this Agreement there shall be:               (i) any involuntary termination of Executive’s employment (other than for the reasons setforth in Section 3(c) of this Agreement);               (ii) any reduction in Executive’s title, responsibilities, including reportingresponsibilities, or authority, including such title, responsibilities or authority as such may beincreased from time to time during the term of this Agreement, which results in a material negativechange to Executive in the employment relationship;               (iii) the assignment to Executive of duties inconsistent with Executive’s office on the dateof the Change in Control or as the same may be increased from time to time after the Change inControl, which results in a material negative change to Executive in the employment relationship;               (iv) any reassignment of Executive to a principal office greater than fifty (50) miles fromthe location of Executive’s principal office on the date of the Change in Control;               (v) any significant reduction in Executive’s compensation as provided in Section 4 in effecton the date of the Change in Control or as the same may be increased from time to time after theChange in Control;               (vi) any failure to provide Executive with benefits at least as favorable as those enjoyed byExecutive under any of Corporation or Bank’s retirement or pension, life insurance, medical, healthand accident, disability or other employee plans in which Executive participated at the time of theChange in Control, or the taking of any action that would materially reduce any of such benefits ineffect at the time of the Change in Control;               (vii) any requirement that Executive travel in performance of his duties on behalf ofCorporation or Bank for a significantly greater period of time during any year than was required ofExecutive during the year preceding the year in which the Change in Control occurred; or
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               (viii) any sustained pattern of interruption or disruption of Executive for matterssubstantially unrelated to Executive’s discharge of Executive’s duties on behalf of Corporation andBank, which results in a material negative change to Executive in the employment relationship;then, at the option of Executive, exercisable by Executive within ninety (90) days of the Change inControl and occurrence of any of the foregoing events, Executive may resign from employment withCorporation and Bank (or, if involuntarily terminated, give notice of intention to collect benefitsunder this Agreement) by delivering a notice in writing (the “Notice of Termination”) toCorporation and Bank and the provisions of Section 6 of this Agreement shall apply, provided,however, that Corporation and Bank shall be given thirty (30) days from the date it receives theNotice of Termination to remedy any such event (other than an involuntary termination).Notwithstanding the foregoing, upon the occurrence of any of the events listed in Sections5(a)(ii)-(viii), the provisions of Section 6 shall only apply if Executive actually terminatesemployment within two (2) years following the initial existence such event. In addition,notwithstanding the payments to Executive contemplated by Section 6, if Executive is requested bythe Corporation, Bank, or a successor thereto to remain in the employ of the Corporation, Bank, ora successor to the Corporation or Bank following the Date of Change of Control, Executive expresslyagrees, subject to the condition set forth below, to remain in the employ of the Corporation, Bank,or a successor to the Corporation or Bank for not less than six months following the Date of Changeof Control. The Corporation, Bank, or successor to the Corporation or Bank shall have the right torequest Executive remain in the employ of the Corporation, Bank, or a successor to the Corporationor Bank for a period of less than six months following the Date of Change of Control. Executiveagrees to remain an employee of the Corporation, Bank or successor to the Corporation or Bankpursuant to their request conditioned upon Executive being compensated in the same amount and onthe same terms as he was compensated immediately prior to the Date of Change of Control, includingparticipation in all employee benefit plans to which he would otherwise be entitled.          (b) As used in this Agreement, “Change in Control” shall mean the occurrence of any of thefollowing:               (i) (A) a merger, consolidation or division involving Corporation or Bank, (B) a sale,exchange, transfer or other disposition of substantially all of the assets of Corporation or Bank,or (C) a purchase by Corporation or Bank of substantially all of the assets of another entity,unless (y) such merger, consolidation, division, sale, exchange, transfer, purchase or dispositionis approved in advance by seventy percent (70%) or more of the members of the Board of Directors ofCorporation or Bank who are not interested in the transaction and (z) a majority of the members ofthe Board of Directors of the legal entity resulting from or existing after any such transactionand the Board of Directors of such entity’s parent corporation, if any, are former members of theBoard of Directors of Corporation or Bank; or               (ii) any “person” (as such term is used in Sections 13(d) and 14(d) of the SecuritiesExchange Act of 1934 (the “Exchange Act”)), other than Corporation or Bank or any “person” who onthe date hereof is a director or officer of Corporation or Bank is or becomes the “beneficialowner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities ofCorporation or Bank representing twenty-five percent (25%) or more of the
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combined voting power of Corporation or Bank’s then outstanding securities; provided; however,that for the purposes of this Agreement, a Change in Control shall not result from any transfer ofownership, which would otherwise cause the transferee to be a beneficial owner (as defined in Rule13d-3 under the Exchange Act) directly or indirectly through any contract, arrangement,understanding, relationship or otherwise, to a family member of Daniel M. Tabas, who is notcurrently a director or an officer of the Corporation or the Bank, of securities of theCorporation, which are solely or jointly owned or titled in the name of Daniel M. Tabas, the estateof Daniel M. Tabas, or any trust, proxy, power of attorney, pooling arrangement or any othercontract or arrangement or other special purpose entity in which Daniel M. Tabas either is thegrantor, settlor, or he otherwise caused to be formed; or controls the voting rights or dispositionof shares of the Corporation; or               (iii) during the period of two (2) consecutive years during the term of Executive’semployment under this Agreement, individuals who at the beginning of such period constitute theBoard of Directors of Corporation or Bank cease for any reason to constitute at least a majoritythereof, unless the election of each director who was not a director at the beginning of suchperiod has been approved in advance by directors representing at least sixty-seven percent (67%) ofthe directors then in office who were directors at the beginning of the period; or               (iv) any other change in control of Corporation and Bank similar in effect to any of theforegoing.     6. Rights in Event of Termination of Employment Following Change in Control.          (a) In the event that Executive delivers a Notice of Termination (as defined in Section 5(a)of this Agreement) to Corporation and Bank, in addition to his Accrued Benefits, Executive shall beabsolutely entitled to receive the compensation and benefits set forth below:               (i) If, at the time of termination of Executive’s employment, a “Change in Control” (asdefined in Section 5(b)(i) of this Agreement) has also occurred, Corporation or Bank shall payExecutive an amount equal to and no greater than 1.99 times Executive’s Base Amount as defined insubsection (b) of this Section, minus applicable taxes and withholdings. Such payment shall bepaid in a lump sum within thirty (30) days of Executive’s termination of employment.          (b) The term “Base Amount” shall equal the base amount as defined by 26 U.S.C. § 280G(b)(3)which generally includes all compensation for services (excluding directors’ fees, if any) for fiveyears prior to the year during which the Change in Control occurs divided by five, except that thecalculation of the Base Amount shall not include any compensation resulting from director fees orthe granting, the vesting, or exercise of any stock options or restricted shares. Notwithstandingthe foregoing, in the event that Executive is employed for less than five years prior to the yearduring which the Change in Control occurs, the Base Amount will be determined by reference to thenumber of years (or partial years annualized) during which Executive is actually employed byCorporation and Bank.          (c) Notwithstanding anything in this Section or elsewhere in this Agreement to the contrary,in the event the payments and benefits payable hereunder to or on behalf of Executive,
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when addedto all other amounts and benefits payable to or on behalf of Executive, would result in theimposition of an excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended(the “Code”), the amounts and benefits payable hereunder shall be reduced to such extent as may benecessary to avoid such imposition. All calculations required to be made under this subsectionwill be made by Corporation’s independent public accountants, subject to the right of Executive’srepresentative to review the same. The parties recognize that the actual implementation of theprovisions of this subsection are complex and agree to deal with each other in good faith toresolve any questions or disagreements arising hereunder.          (d) Notwithstanding the foregoing, and anything herein to the contrary, the receipt of anybenefits under this Section 6 shall be subject to satisfaction of the condition precedent thatExecutive undergo a “separation from service” within the meaning of Treas. Reg. § 1.409A-1(h) orany successor thereto.     7. Covenant Not to Compete.          (a) Executive hereby acknowledges and recognizes the highly competitive nature of thebusiness of Corporation and Bank and accordingly agrees that, during and for the applicable periodset forth in Section 7(c) hereof; Executive shall not:               (i) be engaged, directly or indirectly, either for his own account or as agent, consultant,employee, partner, officer, director, proprietor, investor (except as an investor owning less than5% of the stock of a publicly owned company) or otherwise of any person, firm, corporation orenterprise with assets between $500,000,000 and $5,000,000,000 engaged in (1) the banking(including bank holding company) or financial services industry, or (2) any other activity in whichCorporation or Bank or any of their subsidiaries are engaged during the Employment Period, in thePennsylvania counties of Delaware, Bucks, Montgomery, Chester, and Philadelphia (the“Non-Competition Area”); or               (ii) provide financial or other assistance to any person, firm, corporation, or enterprisewith assets between $500,000,000 and $5,000,000,000 engaged in (1) the banking (including bankholding company) or financial services industry, or (2) any other activity in which Corporation orBank or any of their subsidiaries are engaged during the Employment Period, in the Non-CompetitionArea; or               (iii) solicit current and former customers of Corporation, Bank or any Corporation subsidiaryin the Non-Competition Area; or               (iv) solicit current or former employees of Corporation, Bank or any Corporation subsidiary.     Notwithstanding the foregoing, Executive shall not be prohibited from making personalinvestments, loans, or real estate transactions comparable to such transactions which would havebeen permitted during Executive’s employment with the Corporation or Bank.          (b) It is expressly understood and agreed that, although Executive and Corporation and Bankconsider the restrictions contained in Section 7(a) hereof reasonable for the purpose of preservingfor Corporation and Bank and their subsidiaries their good will and other proprietary
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rights, if afinal judicial determination is made by a court having jurisdiction that the time or territory orany other restriction contained in Section 7(a) hereof is an unreasonable or otherwiseunenforceable restriction against Executive, the provisions of Section 7(a) hereof shall not berendered void but shall be deemed amended to apply as to such maximum time and territory and tosuch other extent as such court may judicially determine or indicate to be reasonable.          (c) The provisions of this Section 7 shall be applicable commencing on the date of thisAgreement and ending on the second anniversary date of the effective date of termination ofemployment.          (d) The provision of Section 7 will apply during the period of enforcement of the covenantnot to compete as defined in Section 7(c).          (e) Executive agrees that any breach of the restrictions set forth in this Section willresult in irreparable injury to Corporation and Bank for which they will have no adequate remedy atlaw and the Corporation and Bank shall be entitled to injunctive relief in order to enforce theprovisions hereof and/or seek specific performance and damages. Executive agrees to personaljurisdiction in the Common Pleas Court of Montgomery County, Pennsylvania or the U.S. DistrictCourt for the Eastern District of Pennsylvania. In the event that Corporation or Bank obtainsinjunctive relief, Executive will promptly reimburse the Corporation and Bank for reasonableattorney fees and any other costs associated with the litigation.     8. Unauthorized Disclosure. During the term of his employment hereunder, or at anylater time, Executive shall not, without the written consent of the Boards of Directors ofCorporation and Bank or a person authorized thereby, knowingly disclose to any person, other thanan employee of Corporation or Bank or a person to whom disclosure is reasonably necessary orappropriate in connection with the performance by Executive of his duties as an executive ofCorporation and Bank, any material confidential information obtained by him while in the employ ofCorporation and Bank with respect to any of Corporation and Bank’s services, products,improvements, formulas, designs or styles, processes, customers, methods of business or anybusiness practices the disclosure of which could be or will be damaging in Corporation or Bank;provided, however, that confidential information shall not include any information known generallyto the public (other than as a result of unauthorized disclosure by Executive or any person withthe assistance, consent or direction of Executive) or any information of a type not otherwiseconsidered confidential by persons engaged in the same business of a business similar to thatconducted by Corporation and Bank or any information that must be disclosed as required by law.     9. Liability Insurance. Corporation and Bank shall use their best efforts to obtaininsurance coverage for Executive under an insurance policy covering officers and directors ofCorporation and Bank against lawsuits, arbitrations or other legal or regulatory proceedings;however, nothing herein shall be construed to require Corporation and/or Bank to obtain suchinsurance, if the Board of Directors of the Corporation and/or Bank determine that suchcoverage cannot be obtained at a reasonable price.     10. Notices. Except as otherwise provided in this Agreement, any notice required orpermitted to be given under this Agreement shall be deemed properly given if in writing and if
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mailed by registered or certified mail, postage prepaid with return receipt requested, toExecutive’s residence, in the case of notices to Executive, and to the principal executive officesof Corporation and Bank, in the case of notices to Corporation and Bank.     11. Waiver. No provision of this Agreement many be modified, waived or dischargedunless such waiver, modification or discharge is agreed to in writing and signed by Executive andan executive officer specifically designated by the Boards of Directors of Corporation and Bank.No waiver by either party hereto at any time of any breach by the other party hereto of, orcompliance with, any condition or provision of this Agreement to similar or dissimilar provisionsor conditions at the same or at any prior or subsequent time.     12. Assignment. This Agreement shall not be assignable by any party, except byCorporation and Bank to any successor in interest to their respective businesses.     13. Entire Agreement. This Agreement contains the entire agreement of the partiesrelating to the subject matter of this Agreement.     14. Successors; Binding Agreement.          (a) Corporation and Bank will require any successor (whether direct or indirect, by purchase,merger, consolidation, or otherwise) to all or substantially all of the businesses and/or assets ofCorporation and Bank to expressly assume and agree to perform this Agreement in the same manner andto the same extent that Corporation and Bank would be required to perform it if no such successionhad taken place. Failure by Corporation and Bank to obtain such assumption and agreement prior tothe effectiveness of any such succession shall constitute a breach of this Agreement and theprovisions of Section 3 of this Agreement shall apply. As used in this Agreement, “Corporation”and “Bank” shall mean Corporation and Bank, as defined previously and any successor to theirrespective businesses and/or assets as aforesaid which assumes and agrees to perform this Agreementby operation of law or otherwise.          (b) This Agreement shall inure to the benefit of and be enforceable by Executive’s personalor legal representatives, executors, administrators, heirs, distributees, devisees and legatees.If Executive should die after a Notice of Termination is delivered by Executive, or followingtermination of Executive’s employment without Cause, and any amounts would be payable to Executiveunder this Agreement if Executive had continued to live, all such amounts shall be paid inaccordance with the terms of this Agreement to Executive’s devisee, legatee, or other designee, or,if there is no such designee, to Executive’s estate.     15. Arbitration. Corporation, Bank and Executive recognize that in the event adispute should arise between them concerning the interpretation or implementation of thisAgreement, lengthy and expensive litigation will not afford a practical resolution of the issueswithin a reasonable period of time. Consequently, each party agrees that all disputes,disagreements and questions of interpretation concerning this Agreement are to be submittedfor resolution, in Philadelphia, Pennsylvania, to the American Arbitration Association (the“Association”) in accordance with the Association’s National Rules for the Resolution of EmploymentDisputes or other applicable roles then in effect (“Rules”). Corporation, Bank or Executive mayinitiate an arbitration proceeding at any time by giving notice to the other in accordance with theRules.
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Corporation and Bank and Executive may, as a matter or right, mutually agree on theappointment of a particular arbitrator from the Association’s pool. The arbitrator shall not bebound by the rules of evidence and procedure of the courts of the Commonwealth of Pennsylvania butshall be bound by the substantive law applicable to this Agreement. The decision of thearbitrator, absent fraud, duress, incompetence or gross and obvious error of fact, shall be finaland binding upon the parties and shall be enforceable in courts of proper jurisdiction. Followingwritten notice of a request for arbitration, Corporation, Bank and Executive shall be entitled toan injunction restraining all further proceedings in any pending or subsequently filed litigationconcerning this Agreement, except as otherwise provided herein. In the event that Executiveterminates pursuant to Section 6 herein, and any dispute arising under or in conjunction withExecutive’s termination is resolved in Executive’s favor, whether by judgment, arbitration orsettlement, Executive shall be entitled to the reimbursement by Corporation or Bank of allreasonable legal fees paid or incurred by Executive in resolving such dispute.     16. Validity. The invalidity or unenforceability of any provision of this Agreementshall not affect the validity or enforceability of any other provision of this Agreement, whichshall remain in full force and effect.     17. Applicable Law. This Agreement shall be governed by and construed in accordancewith the domestic, internal laws of the Commonwealth of Pennsylvania, without regard to itsconflicts of laws principles.     18. Headings. The section headings of this Agreement are for convenience only andshall not control or affect the meaning or construction or limit the scope or intent of any of theprovisions of this Agreement.     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first abovewritten.      ROYAL BANCSHARES OF PENNSYLVANIA, INC.