Document:

Exhibit 10.2

 

RETIREMENT
AND SEVERANCE AGREEMENT

 

This Retirement and Severance Agreement (the “Agreement”)
is made this 20th day of January, 2005, by and among Frederick A. Marcell Jr.
(the “Executive”), Willow Grove Bancorp, Inc., a Pennsylvania corporation (the “Company”),
and its wholly owned subsidiary, Willow Grove Bank, a federally chartered
savings bank (the “Bank”).

 

WITNESSETH:

 

WHEREAS, the Executive currently serves as
President and Chief Executive Officer of the Company and the Bank (collectively,
the “Employers”) and as an officer with respect to certain subsidiary
corporations; and

 

WHEREAS, the Executive currently is a party
to agreements with both the Company and the Bank, each dated as of May 1, 2004
(the “Employment Agreements”), setting forth the terms and conditions of his
employment; and

 

WHEREAS, the Executive and the Bank currently
are parties to a Supplemental Retirement Agreement, dated as of July 28,
1998 (the “SERP”); and

 

WHEREAS, the Executive and the Employers have
come to agreements in principle with respect to Executive’s retirement from the
Employers, the resignation of his positions therefrom and the terms and
conditions under which he will retire and receive certain benefits.

 

NOW, THEREFORE, in consideration of the
mutual premises and covenants contained herein, and intending to be legally
bound, the parties agree as follows:

 

1.                                       Termination
of Employment Agreements; Modification of Duties.

 

(a)                                  As of the Commencement
Date (as hereinafter defined), the Employment Agreements, by the mutual
agreement of the parties hereto, shall be terminated and be of no further force
and effect and the Executive shall be entitled to the rights and payments set
forth herein in lieu of any rights and payments under the Employment
Agreements.  The Executive shall no
longer be considered an officer or executive of the Employers or any of their
respective subsidiaries as of the Commencement Date.  This Agreement shall have no effect on
Executive’s service as a director of each of the Company and the Bank. The
Executive has been nominated to an additional three-year term as a director of
the Company and the Bank and, subject to shareholder approval with respect to
the Company, shall continue to serve on the Boards of Directors of the Company
and the Bank for the remainder of such term and, subject to Section 4(c)
below, be entitled to the benefits therefrom.

 

(b)                                 The parties hereto
agree that, from the Commencement Date through April 30, 2006 (the “Consulting
Period”), the Executive shall provide certain consulting services to the
Company and the Bank as described below.

 

 

(c)                                  The Commencement Date
shall be the first day of employment by the Employers of an individual other
than the Executive to fill the positions of President and Chief Executive Officer
of the Employers.

 

2.                                       Consultancy.

 

(a)                                  During the Consulting
Period, the parties agree that the Executive will provide his personal advice
and counsel to the Company and the Bank in connection with their businesses
including, but not limited to, consulting with the Company and the Bank
regarding matters identified by the Board of Directors with respect to the
transition to a new President and Chief Executive Officer as well as other
matters regarding the operations of the Company and the Bank and relationships
with customers and stockholders as may be identified by the Board of Directors (the
“Consulting Services”), subject to the terms and conditions set forth
herein.  The Executive shall provide such
Consulting Services as may be reasonably requested by the Board of Directors of
the Company from time to time at mutually agreeable and reasonable times,
provided, however, that the Executive will not be required to provide Consulting
Services which exceed (i) 30 hours per month during the first three months
after the date of this Agreement or (ii) 15 hours per month thereafter.  Such Consulting Services may be provided at
reasonable times either in person, telephonically, electronically or by
correspondence as the Company and the Executive may agree.

 

(b)                                 During the Consulting
Period, the Executive shall be treated as an independent contractor and shall
not be deemed to be an employee of the Company, the Bank or any other affiliate
of the Company.

 

3.                                       Consulting
Fee.  During the Consulting Period,
the Executive shall be entitled to receive a fee (the “Consulting Fee”) in an
amount equal to $244,800 per annum, payable in regularly scheduled bi-weekly
installments through April 30, 2006. 
In the event of Executive’s death during the Consulting Period, no further
payment of the Consulting Fee shall be required of the Company and the Bank and
the estate and family of the Executive shall not be entitled to receive any
additional portion of the Consulting Fee.

 

4.                                       Other
Benefits.

 

(a)                                  During the Consulting
Period, the Employers shall provide continued life, medical and dental coverage
substantially identical to the coverage maintained by the Employers for the
Executive immediately prior to the date hereof. 
In the event of the Executive’s death during the Consulting Period, the
Employers shall, through April 30, 2006, provide to the Executive’s spouse
continued medical and dental coverage substantially identical to the coverage
maintained by the Employers for the Executive immediately prior to his death.  The parties hereto agree that the Executive
is, and shall continue to be as of the Commencement Date, the owner of a term
life insurance policy, dated January 6, 1999, on the Executive, provided,
however, that the premiums for such policy, which heretofore have been paid by
the Employers and included as compensation to the Executive, shall, as of the
Commencement Date, become the obligation solely of the Executive.

 

2

 

(b)                                 The Executive’s
benefits under the SERP shall be fully vested as of the date hereof, provided,
however, that the parties agree that payment of Executive’s Supplemental
Retirement Benefit (as such term is defined in the SERP) shall commence on the
first day of the month following Executive’s sixty-eighth (68th)
birthday and shall continue for a period of ten (10) years thereafter in
accordance with the terms of the SERP.

 

(c)                                  The parties agree
that the Executive will not receive fees for his service as a director during
the Consulting Period.  The Executive
will be entitled to all other benefits afforded to other directors, including
continued participation and vesting in the Company’s stock option plans and
recognition and retention plans.

 

5.                                       Solicitation
of Customers; Use of Customer Lists, etc.  The Executive acknowledges that, except as
required by law or in his own good faith use in any proceeding, he has no right
personally to use or disclose to any person, firm or corporation, information
concerning any customer list, business secrets or confidential financial
information of the Employers that he knew was intended by the Employers to be
confidential and that he did not have reason to believe had been made public
(collectively, “Confidential Information”). 
Accordingly, the Executive covenants and agrees that he shall not use or
permit the use of any Confidential Information, and shall not divulge any
Confidential Information to any person, firm or corporation, except as may be
required by applicable law arising out of his employment with or participation
in the affairs of the Employers. 
Further, Executive agrees that, through the period ending on October 31,
2006, he will not solicit any current customer of the Employers, for the
purpose or intent to provide or sell to such customers any banking, financial
or business services or products on behalf of any person, company or entity
other than the Employers without the express written consent of the Employers.

 

6.                                       Confidentiality;
Non-Disparagement.

 

(a)                                  No disclosure of the
contents of this Agreement shall be made by either party to this Agreement
without the prior written consent of the other party; provided that such
disclosure (including disclosures contained in Company press releases,
requisite disclosure in the Company’s reports filed with the Securities and
Exchange Commission and other regulatory filings) may be made as required in
accordance with federal securities law and regulations.

 

(b)                                 Executive agrees not
to make, either directly or indirectly, or cause to be made, either directly or
indirectly, by any other person or entity, any statement or comment, whether
oral, written, electronic or otherwise, or to take any other action which
disparages or criticizes the Employers, 
their present or former directors, officers, Executives, management,
practices or services, or which disrupts or impairs or could disrupt or impair
the operations of the Employers, where such statements, comments or actions are
based upon the Executive=s employment by the Employers,
either as a director, officer or Executive, or knowledge gained as a result of
such employment.  The Employers agree not
to make, either directly or indirectly, or cause to be made, either directly or
indirectly, by any other person or entity, or permit to be made by any
director, officer, Executive or representative of the Employers, any statement
or comment, whether oral, written, electronic or otherwise, or to take any
other action which

 

3

 

disparages or criticizes the Executive where such statements, comments
or actions are based upon the Executive=s
employment by the Employers, either as a director, officer or Executive.

 

7.                           Remedies

 

(a)                                  The parties agree
that monetary damages for the breach of the agreements in Section 5 and Section 6
hereof may be impossible to determine or may be an inadequate remedy;
therefore, it is agreed that the Employers may adjudicate any such alleged
breach in a court of equity and that such court shall have the power to grant
injunctive or other appropriate equitable relief.  The parties also agree that it may be
impossible for the Employers to show immediate irreparable harm; therefore, it
is agreed that the court may enter a temporary injunction or restraining order
without the necessity of proof of immediate and irreparable harm to the Employers
and without the entry of any bond or security.

 

(b)                                 In any adjudication
for breach of the agreements in Section 5 and Section 6, the
prevailing party shall be paid the costs expenses and reasonable attorney’s
fees incident to any such adjudication by the other party as part of the judgement
of the court.

 

8.                                       Release of
the Employers and Related parties.

 

(a)                                  For, and in
consideration of the commitments made herein by the Employers, including
specifically the release in Section 9 below, the Executive, for himself
and for his heirs, successors and assigns, does hereby release completely and
forever discharge the Employers and their respective subsidiaries, affiliates,
stockholders, attorneys, officers, directors, agents, Executives, successors
and assigns, and any other party associated with the Employers (the “Released parties”),
to the fullest extent permitted by applicable law, from any and all claims,
rights, demands, actions, liabilities, obligations, causes of action of any and
all kinds, nature and character whatsoever, known or unknown, in any way
connected with his employment by the Employers or termination thereof; provided
that no such waiver shall be effective with respect to Executive=s rights related to the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or the Executive Retirement
Income Security Act of 1974 (“ERISA”).

 

(b)                                 The Executive
hereby specifically and unconditionally releases the Released parties from any
and all claims which the Executive may have against any of them and which arose
on or before the date of this Agreement under the Age Discrimination in
Employment Act (the “ADEA”), including, but not limited to, any claim
attributable to the Employers’ solicitation of the Executive’s consent to the
terms of this Agreement, and further acknowledges and represents that:

 

(i)                                     the Executive
waives the Executive’ claims under ADEA knowingly and voluntarily in exchange
for the commitments made herein by the Employers, and that the benefits provided
thereby constitute consideration of value to which the Executive would not
otherwise have been entitled;

 

4

 

(ii)                                  the Executive
has been advised in writing by the Employers to consult an attorney in connection
with this Agreement;

 

(iii)                               the Executive
has been given a period of 21 days within which to consider the terms hereof;

 

(iv)                              the Executive
may revoke the waiver of ADEA claims set forth in this Section 8 for a
period of seven (7) days following the execution of this Agreement and the Executive’s
waiver of ADEA claims hereunder shall not become effective until the revocation
period has expired;

 

(v)                                 if the Executive
revokes the waiver of ADEA claims in accordance with subparagraph (iv) above,
the Executive shall cease to receive the payments and benefits specified in
Sections 3 and 4 hereof, but such revocation shall not be effective with
respect to the remainder of this Agreement and the consideration received by
the Executive prior to the revocation shall be valid and adequate consideration
with respect to the remainder of this Agreement; and

 

(vi)                              this
Agreement complies in all respects with Section 7(f) of ADEA, the waiver
provisions of the Older Workers Benefit Protection Act.

 

(c)                                  Notwithstanding
the foregoing, the Executive does not release the Employers from claims arising
out of any breach of this Agreement.

 

9.                                       General
Release of the Executive. 
For, and in consideration of the commitments made herein by the Executive,
including specifically the release in Section 8 above, the Employers, for
themselves, and for their respective successors and assigns do hereby release
completely and forever discharge the Executive and his heirs, successors and
assigns, to the fullest extent permitted by applicable law, from any and all
claims, rights, demands, actions, liabilities, obligations, causes of action of
any kinds, nature and character whatsoever, known or unknown, in any way
connected with the Executive’s position as an Executive, officer or director of
the Employers. Notwithstanding anything in the foregoing to the contrary, the
Employers do not release the Executive from claims arising out of any breach of
this Agreement.

 

10.                                 Representation.  The Employers and the Executive represent
that they have reviewed this Agreement, and that each of them is fully aware of
the content of this Agreement and of its legal effect, and acknowledge that
this is a legally valid and binding obligation of the parties.

 

11.                                 Withholding.  The Employers may make such provisions as
they deem appropriate for the withholding pursuant to federal or state income
tax laws of such amounts as the Employers determine they are required to
withhold in connection with the payments to be made pursuant to this Agreement.

 

5

 

12.                                 Amendment
and Waiver. 
The terms of this Agreement may not be modified other than in a writing
signed by the parties.  No term or
condition of this Agreement shall be deemed to have been waived, nor shall
there be any estoppel against enforcement of any provision of this Agreement,
except by written instrument of the party charged with such waiver or
estoppel.  No such written waiver shall
be deemed a continuing waiver unless specifically stated therein, and each such
waiver shall operate only as to the specific term or condition for the future
or as to any act other than that specifically waived.

 

13.                                                                                 Notices.  All notices, demands, consents or other
communication required or permitted hereunder shall be in writing and shall be
deemed to have been given when: (i) personally delivered, or (ii) sent postage
prepaid by registered or certified mail, return receipt requested, such receipt
showing delivery to have been made, or (iii) sent overnight by prepaid receipt
courier addressed as follows:

 

If to the Executive:                                             Frederick
A. Marcell Jr.

1316 Larchmont Place

Mount Laurel, New Jersey  08054

 

If to the Employers:                                        Secretary

Willow Grove Bancorp, Inc.

Welsh and Norristown Roads

Maple Glen, Pennsylvania 19002-8030

 

Each party hereto shall promptly notify the
other of any change in address.

 

14.                                 Entire
Agreement.  This Agreement
incorporates the entire understanding among the parties relating to the subject
matter hereof, recites the sole consideration for the promises exchanged and
supersedes any prior agreements between the Employers and the Executive with
respect to the subject matter hereof.  In
reaching this Agreement, no party has relied upon any representation or promise
except those set forth herein.

 

15.                                 Invalid
Provisions: If any provision of this Agreement is
held to be illegal, invalid or unenforceable under present or future laws
effective during the term of this Agreement, such provision shall be fully
severable and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part of this
Agreement, and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its deletion from this Agreement.

 

16.                                 Bind and
Inure.  This Agreement
shall be binding upon and inure to the benefit of the Executive and the
Employers and their respective heirs and/or successors and permitted assigns.

 

17.                                 Governing
Law.  This Agreement
shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania, except to the extent that applicable federal law
preempts the laws of Commonwealth of Pennsylvania.

 

6

 

IN WITNESS WHEREOF, the Company and the Bank
have caused this Agreement to be executed by their duly authorized
representatives and the Executive has executed this Agreement, all as of the
day and year first above written.

 

 

	
  WITNESSES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WILLOW GROVE BANCORP, INC.

  
	
   

  	
   

  	
   

  
	
  /s/ Mary R. Rossi

  	
   

  	
  By:

  	
  /s/ William W. Langan

  	
   

  
	
   

  	
   

  	
   

  	
  William W. Langan

  
	
   

  	
   

  	
   

  	
  Chairman of the Board

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WILLOW GROVE BANK

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Mary R. Rossi

  	
   

  	
  By:

  	
  /s/ William W. Langan

  	
   

  
	
   

  	
   

  	
   

  	
  William W. Langan

  
	
   

  	
   

  	
   

  	
  Chairman of the Board

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FREDERICK A. MARCELL JR.

  
	
   

  	
   

  	
   

  
	
  /s/ Mary R. Rossi

  	
   

  	
   

  	
  /s/
  Frederick A. Marcell Jr.

  	
   

  

 

7Exhibit 10.3

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT is dated as of January 20, 2005 and is
between Willow Grove Bank, a federally chartered savings bank (the “Bank”), and
G. Richard Bertolet (the “Executive”).

 

WITNESSETH

 

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

 

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

 

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

 

WHEREAS, in order to induce the Executive to remain in the employ of
the 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 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 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 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)                                    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.

 

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

 

(i)                                     Good Reason.  Termination by the Executive of the Executive’s
employment for “Good Reason” shall mean termination by the Executive within twenty-four (24) months following a Change in
Control of the Corporation 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 Chief Lending Officer
of the Employer or a material adverse change made by the 

 

2

 

Employer in the Executive’s functions, duties
or responsibilities as Chief Lending Officer 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 by more than 45 miles
from the current principal executive office of the Employer or, without the
Executive’s express written consent, the Employer requires the Executive to be
based anywhere other than an area within 45 miles of the location of the
Employer’s current principal executive office, 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 (k) 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 10 hereof.

 

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

 

(k)                                  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 (iv) is given in the manner specified in Section 11
hereof.

 

(l)                                     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
Employer hereby employs the Executive as Chief Lending Officer, and the
Executive hereby accepts said employment and agrees to render such services to
the Employer on the 

 

3

 

terms and conditions set forth in this Agreement. Unless extended as
provided in this Section 2, this Agreement shall terminate on June 30,
2006. Prior to July 1, 2006 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.

 

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 $174,250 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)                                 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. 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 payable to the Executive pursuant to Section 3(a)
hereof.

 

(c)                                  Vacation. 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

 

4

 

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 expenses and other
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)                                  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.

 

(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 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

 

5

 

Executive, within the earlier of thirty (30) days following the Date of
Termination or the next following December 31, 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 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, within
the earlier of thirty (30) days following the Date of Termination or the next
following December 31, 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 insurance,
disability insurance and other employee benefit plans, programs and
arrangements offered by the Employer in which the Executive was entitled to
participate immediately prior to the Date of Termination (excluding (y) stock
option plans, restricted stock plans and employee stock ownership plans of the
Employer and the Corporation and (z) bonuses and other items of cash
compensation), 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 either 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 or pay a
cash equivalency amount.

 

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, Chester Valley, First
Financial and their affiliates, 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 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. 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 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

 

6

 

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.

 

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.

 

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.

 

7

 

(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.

 

(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

 

8

 

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 Grove Bank

Welsh & Norristown Roads

Maple Glen, Pennsylvania 
19002-8030

 

To the
Executive:                  G. Richard
Bertolet

At his last address on file with

the Employers

 

12.                               Amendment;
Waiver.  (a) Except as set forth in Section 12(b)
below, 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.

 

(b)                                 The
parties hereto acknowledge and agree that (i) the recently enacted American
Jobs Creation Act of 2004 established a new Section 409A of the Code; (ii)
Code Section 409A contains provisions governing the taxation of deferred
compensation; (iii) the compensation and other benefits to be paid or otherwise
provided under this Agreement, whether provided hereunder or pursuant to any of
the Employer’s employee benefit plans, programs, policies or arrangements (this
Agreement and the plans, programs, policies and arrangements are collectively
referred to herein as the “Agreements”), may be negatively impacted by Section 409A
of the Code; (iv) the Internal Revenue Service has issued initial guidance and
is expected to issue additional guidance regarding the scope of Section 409A
of the Code; and (v) the Employer has until December 31, 2005 to amend the
Agreements to bring them into compliance with Section 409A of the Code.
The parties hereto acknowledge and agree that the Employer may amend any or all
of the Agreements after the date hereof in order to comply with Section 409A
of the Code, without having to obtain the Executive’s consent to such
amendments, provided that the Employer agrees to negotiate in good faith with
the Executive any changes to this Agreement

 

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.

 

9

 

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)                                  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.

 

(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

 

10

 

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.  Without limiting the
generality of the preceding sentence, the parties hereto agree that,
immediately prior to the Effective Date, the Agreement dated July 3, 2003
between Chester Valley, First Financial and the Executive (the “Old Agreement”)
shall be cancelled and shall have no force and effect, and the Executive agrees
that he shall not be entitled to and shall not receive any payments or benefits
pursuant to the Old Agreement as a result of the transactions contemplated by
the Merger Agreement.

 

11

 

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

 

	
  Attest:

  	
  WILLOW GROVE  BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Christopher E. Bell

  	
   

  	
  By:

  	
  /s/ William W. Langan

  	
   

  
	
  Christopher E. Bell

  	
   

  	
  William W. Langan

  
	
  Corporate Secretary

  	
   

  	
  Chairman of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ G. Richard Bertolet

  	
   

  
	
   

  	
   

  	
  G. Richard Bertolet

  
					

 

12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}]]