Exhibit 10.1


EMPLOYMENT AGREEMENT


THIS
EMPLOYMENT AGREEMENT is dated as of June 8, 2007 and is between Willow
Financial Bank, a federally chartered savings bank (the “Bank” or the “Employer”),
and Thomas Saunders (the “Executive”).


WITNESSETH


WHEREAS,
in order to induce the Executive to be employed by the Employer and in
consideration of the Executive’s agreeing to be employed by Employer, the
parties desire to specify the severance benefits which shall be due the
Executive by the Employer in the event that his employment with the Employer 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)           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 any cash bonus paid to the Executive
by the Employer or any subsidiary thereof during the most recent five calendar
years preceding the year in which the Date of Termination occurs (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, 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 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 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 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
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 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)            Corporation. 
“Corporation” shall mean Willow Financial Bancorp, Inc., a Pennsylvania
corporation and the parent holding company of the Bank.


(g)           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 his 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.


(h)           Disability.  “Disability” shall be deemed to have occurred
if the Executive: (i) is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, or (ii) is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12 months,
receiving income replacement benefits for a period of not less than three
months under an accident and health plan covering employees of the Bank.


(i)            Effective Date.  The Effective Date of this
Agreement shall mean the date first above written.


(j)            Good
Reason.  “Good Reason” means
the occurrence of any of the following conditions within twelve (12) months
following a Change in Control of the Corporation:


(i)            any material breach of this
Agreement by the Bank, including without limitation any of the following: (A) a
material diminution in the Executive’s base compensation, (B) a material
diminution in the Executive’s authority, duties or responsibilities, or (C) a
material diminution in the authority, duties or responsibilities of the
supervisor to whom the Executive is required to report, or


(ii)           any material change in the geographic
location at which the Executive must perform his services under this Agreement;


provided, however,
that prior to any termination of employment for Good Reason, the Executive must
first provide written notice to the Bank within ninety (90) days of the initial
existence of the condition, describing the existence of such condition, and the
Bank shall thereafter have the right to remedy the condition within thirty (30)
days of the date the Bank received the written notice from the Executive.  If the Bank remedies the condition within
such thirty (30) cure period, then no Good Reason shall be deemed to exist with
respect to such condition.



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


(l)            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 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 except as set forth in Section 18(a)
hereof; and (iv) is given in the manner specified in Section 11 hereof.


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


2.             Term of Employment.


(a)           The term of this Agreement shall
commence on June 25, 2007.  As of
such date, the Employer hereby employs the Executive as Executive Commercial
Sales Manager, 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 on June 30, 2009. Prior to July 1, 2009 and each July 1
thereafter, the Board of Directors of the Employer shall consider and review
(after taking into account all relevant factors, including the Executive’s
performance hereunder) a one-year extension of the term of this Agreement, and
the term shall continue to extend each July 1 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 written
notice to be given not less than thirty (30) days prior to any such July
1.  If the Board of Directors of the
Employer 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 Employer as may be
consistent with his titles and from time to time assigned to him by the Board
of Directors of the Employer. During the term of this Agreement, the Executive
shall devote his best efforts and his full time effort to the affairs and
business of the Employer.



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3.             Compensation and Benefits.


(a)           Base Salary.  The Employer shall compensate and pay the
Executive for his services during the term of this Agreement at a minimum base
salary of $200,000 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)           Signing Bonus.  As of June 25, 2007, the Bank shall pay to
the Executive a signing bonus of $75,000. 
In the event the Executive’s employment with the Bank is terminated for
any reason prior to completing two full years of employment, other than a
termination following a Change in Control of the Corporation or a termination
by the Bank without cause, then the Executive shall repay (i) 100% of the
signing bonus if the Date of Termination is within the first 12 months
following the date of hire and (ii) 50% of the signing bonus if the Date of
Termination is within the second 12 months following the date of hire, with
such repayment in either event to be made within ten (10) days of the Date of
Termination.


(c)           Annual Incentive Bonuses.  The Executive shall be entitled to receive a
guaranteed incentive bonus of $50,000 for the fiscal year ending June 30, 2008
(“Fiscal 2008”) under the annual bonus plan if he remains employed until the end
of Fiscal 2008, with such bonus to be paid in September 2008.  Subsequent to Fiscal 2008, the Executive
shall have the opportunity to earn an incentive bonus of 25% to 45% of Base
Salary under the annual bonus plan, dependent upon the achievement of specified
goals.


(d)           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, 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, provided that participation in the annual bonus plan shall be in
accordance with Section 3(c) above. 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
disproportionately 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 or signing bonus payable to the Executive
pursuant to Sections 3(a) and 3(b) hereof.


(e)           Paid Time Off.  During the term of this Agreement, the
Executive shall be entitled to 25 days per year of paid time off, with the
number of days for 2007 to be pro-rated based on the Effective Date.  The Executive may utilize such paid time off
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 utilize such paid
time off, nor shall the Executive be able to accumulate unused paid time off
from one year to the next, except to the extent authorized by the Board of
Directors of the Employer.



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(f)            Automobile Allowance.  The Executive shall be entitled to receive
from the Bank an automobile allowance of $10,000 per year, with such allowance to
be paid in equal monthly installments.


(g)           Equity Grants.  As of June 25, 2007, the Executive shall
receive a restricted stock award for 10,000 shares of common stock of the
Corporation, with such award to vest at the rate of one-third per year on each of
the first three annual anniversary dates of the date of hire.  The Executive shall be considered for future
restricted stock awards with a value of 20% to 35% of his Base Salary, subject
to approval by the Board of Directors of the Corporation or an authorized
committee thereof.


(h)           Supplemental Executive
Retirement Plan.  The
Executive shall be entitled to participate in a supplemental executive
retirement plan.


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, the maintenance of Series 7 and Series
63 licenses, 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)           General.  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 Retirement, and the Executive shall have the right, upon prior Notice
of Termination, to terminate his employment hereunder for any reason.


(b)           For Cause.  In the event that the Executive’s employment
is terminated by the Employer for Cause, 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)           Voluntary Termination by
the Executive.  In the event
the Executive terminates his employment hereunder other than for death,
Disability, Retirement, Good Reason or an uncured material breach of this
Agreement by the Employer, then 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)           Death.  In the event the Executive’s employment
hereunder is terminated due to death, neither the Executive nor his 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.



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(e)           Disability.  In the event the Executive’s employment
hereunder is terminated due to Disability, the Executive shall be entitled to
receive any disability benefits provided under any disability plan maintained
by the Employer.  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.


(f)            Retirement.  In the event the Executive’s
employment hereunder is terminated due to Retirement, the Executive shall have
no right pursuant to this Agreement to compensation or other benefits for any
period after the Date of Termination.


(g)           Involuntary Termination. 
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
thirty (30) 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, within
thirty (30) days following the Date of Termination, a cash severance amount
equal to one times the Executive’s current Base Salary; provided, however, that
this Section 5(g) shall not be applicable if the termination of employment
occurs concurrently with or subsequent to a Change in Control of the
Corporation.


(h)           Change in Control
Termination.  In the event
that (i) the Executive’s employment is terminated concurrently with or within
twelve (12) months following 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, within thirty
(30) days following the Date of Termination, a cash severance amount equal to
two (2) times the Executive’s Average Annual Compensation if the Change in
Control of the Corporation occurs on or before June 30, 2009 and one (1) times
the Executive’s Average Annual Compensation if the Change in Control of the
Corporation occurs after June 30, 2009; and


(B)           maintain and provide for a period
ending at the earlier of (i) two (2) years subsequent to the Date of
Termination if the Change in Control of the Corporation occurs on or before
June 30, 2009 and one (1) year subsequent to the Date of Termination if the
Change in Control of the Corporation occurs after June 30, 2009 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 insurance and disability
insurance offered by the Employer in which the Executive participated
immediately prior to the Date of Termination, provided that in the event that
the Executive’s participation in any insurance plan as provided in this
subparagraph (B) is barred, or during such period any such plan is discontinued
or the benefits thereunder are materially reduced, the Employer shall either
arrange to provide the Executive with benefits substantially similar to those
which the Executive was entitled to receive under such plans immediately prior
to the Date of 



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Termination or pay a cash equivalency amount; and
provided further, that any insurance premiums payable by the Employer  pursuant to this Section 5(h)(B) shall be
payable at such times and in such amounts as if the Executive was still an
employee of the Employer, subject to any increases in such amounts imposed by
the insurance company or COBRA, and the amount of insurance premiums required
to be paid by the Employer in any taxable year shall not affect the amount of
insurance premiums required to be paid by the Employer in any other taxable
year.


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 and its affiliates would constitute a “parachute
payment” under Section 280G of the Code then the payments and benefits payable
by the Employer pursuant to Section 5 hereof shall be reduced by the amount, if
any, which is the minimum necessary to result in no portion of the payments and
benefits payable by the Employer 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. If the payments and benefits under
Section 5 are required to be reduced, the cash severance shall be reduced
first, followed by a reduction in the fringe benefits.  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 counsel selected by the Employer and paid by the
Employer.  Such counsel 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 in this Section 6 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.


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(h)(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.



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9.             Competitive
Activities


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


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


(c)           The Executive agrees that the
Employer is, 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 his employment, which relate to the business of the Employer,
which are confidential, or which are not readily ascertainable from persons or
other sources outside the Employer.


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


(e)           The Executive agrees that during the
term of his employment hereunder, except with the express consent of the
Employer, he 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 Employer; 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 him to devote substantial time to management or
control of the business or activities in which he 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 9(e) shall not be applicable if the
Executive’s employment is terminated in connection with or following a Change
in Control of the Corporation.



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(f)            The Employer shall be entitled to
immediate injunctive or other equitable relief to restrain the Executive from
failing to comply with any obligation under this Section 9 or from rendering
his services to persons or entities than the Employer, in addition to any other
remedies to which the Employer may be entitled under law.  The right to such injunctive or other
equitable relief shall survive the termination by the Employer of the Executive’s
employment.


(g)           The Executive acknowledges that the
restrictions contained in this Section 9 are reasonable and necessary to
protect the legitimate interests of the Employer and that any violation thereof
would result in irreparable injuries to the Employer.  The Executive acknowledges that, if the Executive
violates any of these restrictions, the Employer is 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 Employer may be
entitled.  The Executive further
acknowledges that the provisions of Sections 9(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.


10.          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.


11.          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 Employer:

  	
   

  	
  Secretary

  
	
   

  	
   

  	
  Willow Financial Bank

  
	
   

  	
   

  	
  170 S. Warner Road

  
	
   

  	
   

  	
  Wayne, Pennsylvania 19087

  
	
   

  	
   

  	
   

  
	
  To the
  Executive:

  	
   

  	
  Thomas Saunders

  
	
   

  	
   

  	
  At his last address on file with

  
	
   

  	
   

  	
  the Employer

  






 


12.          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; provided, however, that if the Employer determines, after a
review of the final regulations issued under Section 409A of the Code and all
applicable Internal 



 9
 









Revenue Service
guidance, that this Agreement should be further amended to avoid triggering the
tax and interest penalties imposed by Section 409A of the Code, the Employer
may amend this Agreement to the extent necessary to avoid triggering the tax
and interest penalties imposed by Section 409A of the Code.  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.


13.          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.


14.          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.


15.          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.


16.          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.


17.          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.


18.          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)           The Bank’s Board of Directors may
terminate the Executive’s employment at any time, but any termination by the
Bank’s Board of Directors, other than termination for Cause, shall not
prejudice the Executive’s right to compensation or other benefits under this
Agreement.


(b)           If the Executive is suspended from
office and/or temporarily prohibited from participating in the conduct of the
Employer’s affairs by a 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.



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(c)           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.


(d)           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.


(e)           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.


19.          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 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.


20.          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.


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


	
  Attest:

  	
   

  	
   

  	
   

  	
  WILLOW FINANCIAL BANK

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Joseph T.
  Crowley

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Donna M. Coughey

  
	
  Joseph T.
  Crowley

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Donna M. Coughey

  
	
  Secretary

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Thomas Saunders

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Thomas Saunders

  



 



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