Document:

Exhibit 10.9

 

WILLOW FINANCIAL BANK

 

AMENDED AND RESTATED NON-EMPLOYEE DIRECTORS’
RETIREMENT PLAN

 

 

WILLOW FINANCIAL BANK

 

AMENDED AND RESTATED NON-EMPLOYEE DIRECTORS’
RETIREMENT PLAN

 

ARTICLE I

 

Purpose

 

The Willow Financial
Bank (the “Bank”) Amended and Restated Non-Employee Directors’ Retirement Plan
(the “Plan”) amends and restates the Willow Grove Bank Non-Employee Director’s
Retirement Plan, which was originally effective as of June 30, 1998, and
subsequently amended and restated as of October 22, 2002 and further amended on
October 25, 2005. The Plan was established in order to provide non-employee
members of the Board of Directors (ABoard@)
of Willow Financial Bank (the “Bank”) with retirement benefits in recognition
of their service to the Bank and to encourage their continued association with
the Bank. The Bank has herein amended and restated the Plan, which continues to
remain frozen as of November 9, 2005, with the intention that the Plan shall at
all times satisfy Section 409A of the Code (as defined herein) and the
regulations thereunder. The provisions of the Plan shall be construed to
effectuate such intentions.

 

ARTICLE II

 

Definitions

 

Section 2.1             Affiliated
Corporation. A corporation in which the Bank owns 50% or more of the issued
and outstanding stock of any class, or a corporation which owns more than 50%
of the issued and outstanding stock of any class of the Bank.

 

Section 2.2             Bank. Willow Financial
Bank, formerly known as Willow Grove Bank.

 

Section 2.3             Change in Control.
A change in the ownership of the Company or the Bank, a change in the effective
control of the Company or the Bank or a change in the ownership of a
substantial portion of the assets of the Company or the Bank, in each case as
provided under Section 409A of the Code and the regulations thereunder.

 

Section 2.4             Company. Willow
Financial Bancorp, Inc., the parent holding company of the Bank.

 

Section 2.5             Designated
Beneficiary. The Designated Beneficiary means the person or persons
designated by a Participant to receive any benefits payable under the Plan in
the event of such Participant’s death. Such person or persons shall be
designated in writing on forms provided for this purpose by the Bank and may be
changed from time to time by similar notice to the Bank. In the absence of a
written designation, the beneficiary shall be a Participant’s estate.

 

2

 

Section 2.6             Director’s Annual
Fee. The Director’s Annual Fee is the monthly meeting fee paid to the
Non-Employee Director for the month immediately preceding the Non-Employee
Director=s
retirement or Separation from Service multiplied by twelve (12).

 

Section 2.7             Director’s
Retirement Fee. The Director’s Retirement Fee shall be the amount computed
in accordance with Section 3.2 hereof, which shall be payable annually in
accordance with Section 3.3 hereof unless a Participant makes an election to be
paid in a lump sum in accordance with such Section 3.3.

 

Section 2.8             Effective Date.
The Plan effective date is June 30, 1998, with the effective date of this
amendment and restatement being October 23, 2007.

 

Section 2.9             Non-Employee
Director. A Director of the Bank who is not an employee of the Bank or of
any Affiliated Corporation.

 

Section 2.10           Participant. A
Non-Employee Director shall become a Participant in the Plan upon completion of
six (6) continuous Years of Service as a Non-Employee Director. For this
purpose, Years of Service completed prior to the Effective Date shall be
included in determining a Director’s number of Years of Service. Notwithstanding
the foregoing, each person who is a Non-Employee Director as of the date this
Plan is frozen pursuant to Section 4.10 hereof shall be deemed to be a
Participant as of such date.

 

Section 2.11           Plan. Willow
Financial Bank Non-Employee Directors’ Retirement Plan.

 

Section 2.12.          Separation From
Service. Separation from Service shall mean a termination of the Participant’s
services to the Bank for any reason other than death. Whether a Separation from
Service has occurred shall be determined in accordance with the requirements of
Section 409A of the Code based on whether the facts and
circumstances indicate that the Bank and the Participant reasonably anticipated
that no further services would be performed after a certain date or that the
level of bona fide services the Participant would perform after such date
(whether as an employee or as an independent contractor) would permanently
decrease to no more than twenty percent (20%) of the average level of bona fide
services performed over the immediately preceding thirty-six (36) month period.
A Separation from Service may occur when a Non-Employee Director becomes a
director emeritus.

 

Section 2.13           Years of Service.
Any year or fraction thereof of service on the Board by a Non-Employee Director.
By way of illustration, a Non-Employee Director shall have one year of service
immediately upon election, two years of service on the day after the first
anniversary of his election, and so forth.

 

3

 

ARTICLE III

 

Benefits

 

Section 3.1             Vesting of
Benefits. Each Non-Employee Director’s rights and benefits under the Plan
shall vest upon retirement or Separation from Service as a Director of the Bank
in accordance with the following schedule.

 

	
  Years of Service

  	
   

  	
  Vested Percentage of

  Interest in Director=s

  Retirement Fee at Retirement

  	
   

  
	
  6

  	
   

  	
  20

  	
  %

  
	
  7

  	
   

  	
  40

  	
  %

  
	
  8

  	
   

  	
  60

  	
  %

  
	
  9

  	
   

  	
  80

  	
  %

  
	
  10

  	
   

  	
  100

  	
  %

  

 

Section 3.2             Computation of
Benefits. Each Participant’s benefits under this Plan shall equal the
amount of the benefits accrued by the Bank as of the date this Plan is frozen
pursuant to Section 4.10 hereof. No further accruals or vesting of benefits
shall occur after the date this Plan is frozen pursuant to Section 4.10 hereof.

 

To the extent
that any Non-Employee Director is obligated to pay self-employment taxes with
respect to the benefits provided for under the Plan, the Bank shall pay the
self-employment taxes for each Participant in the calendar year when such taxes
are due. The Bank shall have no obligation to pay any other taxes on behalf of
a Participant, his Designated Beneficiary or his estate.

 

Section 3.3             Payment of Benefit.
A Participant shall be paid his benefit pursuant to the Plan in equal quarterly
installments for ten (10) years (i.e.,
ten years certain and continuous) beginning the first day of the month
following the lapse of six months after the date the Participant has ceased
being a Director of the Bank and has incurred a Separation from Service. No
benefits shall be payable until a Non-Employee Director ceases to be a Director
of the Bank and has incurred a Separation From Service. A Participant may elect
to receive the value of his payments or remaining payments in a lump sum (using
a discount rate equal to 6% rate of interest), with the lump sum payable on the
first day of the month following the lapse of six months after the date the
Participant has ceased being a Director of the Bank and has incurred a Separation
from Service. Any such election shall be in writing and delivered to the
President of the Bank as indicated below.

 

Section 3.4             Prior Elections.
Any payment elections made by a Participant before January 1, 2005 shall
continue in effect until such time as the Participant makes a subsequent
payment election pursuant to Section 3.5 below and such payment election
becomes effective as set forth below. If no payment election was previously
made, then the current payment election shall be

 

4

 

deemed to be equal quarterly
installments for ten (10) years commencing as of the first day of the month
following the lapse of six months after the Participant’s service is terminated
due to a Separation from Service.

 

Section 3.5             Transitional
Elections Prior to 2009. On or before December 31, 2008, if a Participant
wishes to change his payment election, the Participant may do so by completing
a payment election form approved by the Bank, provided that any such election
(1) must be made at least 12 months before the date on which benefit payments
are scheduled to commence, (2) must be made while the Participant is an active director
of the Bank or one of its subsidiaries, (3) shall not take effect before the
date that is 12 months after the date the election is made and accepted by
the Bank, (4) does not cause a payment that would otherwise be made in the year
of the election to be delayed to a later year, and (5) does not accelerate into
the year in which the election is made a payment that is otherwise scheduled to
be made in a later year.

 

Section 3.6             Subsequent Payment
Elections. A Participant may not change his payment election on or after January
1, 2009.

 

Section 3.7             Designated
Beneficiary Benefit. In the event of the death of a Participant prior to
the commencement of payments under Section 3.3 hereof, the Director’s
Retirement Fee which the Participant is entitled to pursuant to Section 3.2
hereof shall be paid in equal quarterly payments to his Designated Beneficiary
for ten (10) years (i.e., ten
years certain and continuous) beginning with the first day of the calendar
quarter next following the death of the Participant; provided, however, that if
the Participant previously made a valid and timely election to receive his
benefits in a discounted lump sum, then the lump sum payment shall be made on
the first day of the calendar quarter next following the death of the
Participant. In the event of the death of a Participant subsequent to the
commencement of quarterly payments under Section 3.3 hereof, his Designated
Beneficiary shall be paid in equal quarterly payments the remainder of the
amount which the Participant would have received under Section 3.3 hereof,
beginning with the first day of the calendar quarter next following the death
of the Participant. If, upon the death of a Participant, such Participant has
failed to name a Designated Beneficiary or such Designated Beneficiary has
predeceased the Participant, the present value of the payments or remaining
payments which would have been made to the Participant shall be paid to the
estate of the Participant in a lump sum on the first day of the calendar
quarter next following the death of the Participant. Any lump sum amount shall
be calculated using a discount rate equal to 6% rate of interest.

 

ARTICLE IV

 

Miscellaneous

 

Section 4.1             General
Administrative Powers. The Plan shall be administered by the Bank. Whenever
there is an occasion for the exercise of any power or discretion, such action
shall be taken by the Board of Directors or such committee of the Board of
Directors or other person as shall be determined by the Board of Directors.

 

5

 

Section 4.2             Successors. The
Bank agrees to not merge or consolidate with any other corporation or
organization or permit its business activities to be taken over by any other
organization unless and until the succeeding or continuing corporation or other
organization shall expressly assume the rights and obligations of the Plan as
herein set forth. The Bank further agrees to not cease its business activity or
terminate its existence other than as heretofore set forth without having made
adequate provision fulfilling all of its obligations hereunder.

 

Section 4.3             Entire
Understanding. This Plan sets forth the entire understanding of the parties
with respect to the subject matter hereof and supersedes any and all prior
agreements, arrangements and understanding relating thereto. To the extent
inconsistent with any such prior agreement, arrangement or understanding, the
provisions of this Plan shall control.

 

Section 4.4             Applicable Law.
This Plan shall be governed by and controlled in all respects in accordance
with applicable federal law and, to the extent not preempted by such federal
law, in accordance with the laws of the Commonwealth of Pennsylvania.

 

Section 4.5             Invalidity. In
the event that any provision of this Plan or the application thereof to any
person or circumstances shall be determined by a court of competent
jurisdiction to be invalid or unenforceable to any extent, the remainder of
this Plan, or the application of such provisions to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each provision of this Plan shall be valid and enforced
to the maximum extent permitted by law.

 

Section 4.6             Non-Alienation.
No benefit payment payable under this plan, whether or not in payment status,
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber or to charge the same shall
be void. No such benefit or interest shall be liable for or subject to the
debts, contracts, liabilities or torts of a Participant or a Participant’s
Designated Beneficiary entitled to any benefit or having any interest. If any
Participant or Designated Beneficiary becomes bankrupt or attempts to
anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any
benefit under this Plan, the Bank may, in its discretion, direct that any
benefit to which such Participant or Designated Beneficiary is entitled be
terminated and that all future payments to which such person would otherwise be
entitled, be held and applied for the benefit of such person, his or her
children or other dependents, or any of them, in such manner and in such
proportion as the Bank may deem proper.

 

Section 4.7             Amendment or Termination. The Bank
intends the Plan to be permanent but reserves the right to amend or terminate
the Plan when, in the sole opinion of the Bank, such amendment or termination
is advisable. Any such amendment or termination shall be made pursuant to a
vote of two-thirds of the Directors then serving on the Board of Directors. In
addition, in the event that the Bank determines, after a review of Section 409A
of the Code and all applicable Internal Revenue Service guidance, that the Plan
or payment election form needs to be further amended to comply with Section
409A of the Code, the Bank may amend the Plan or the payment election form to
make any changes required for it to comply with Section 409A of the Code.

 

6

 

4.7.1        Effect of Amendment or
Termination.

 

(a)           General.  No
amendment or termination of the Plan shall directly or indirectly reduce any rights
and benefits held hereunder as of the effective date of such amendment or
termination. A termination of the Plan will not be a distributable event,
except in the three circumstances set forth in Section 4.7.1(b) below. No
additional deferrals may be made after termination of the Plan.

 

(b)           Termination. Under
no circumstances may the Plan permit the acceleration of the time or form of
any payment under the Plan prior to the payment events specified herein, except
as provided in this Section 4.7.1(b). The Bank may, in its discretion, elect to
terminate the Plan in any of the following three circumstances and accelerate
the payment of the entire unpaid balance of the Participant’s benefits as of
the date of such payment in accordance with Section 409A of the Code:

 

(i)                                     the
Plan is irrevocably terminated within the 30 days preceding a Change in Control
and (1) all arrangements sponsored by the Bank that would be aggregated with
the Plan under Treasury Regulation §1.409A-1(c)(2) are terminated, and (2) the
Participant and all participants under the other aggregated arrangements
receive all of their benefits under the terminated arrangements within 12
months of the date the Bank irrevocably takes all necessary action to terminate
the Plan and the other aggregated arrangements;

 

(ii)                                  the
Plan is irrevocably terminated at a time that is not proximate to a downturn in
the financial health of the Bank and (1) all arrangements sponsored by the Bank
that would be aggregated with the Plan under Treasury Regulation 1.409A-1(c) if
the Participant participated in such arrangements are terminated, (2) no
payments are made within 12 months of the date the Bank takes all necessary
action to irrevocably terminate the arrangements, other than payments that
would be payable under the terms of the arrangements if the termination had not
occurred, (3) all payments are made within 24 months of the date the Bank takes
all necessary action to irrevocably terminate the arrangements, and (4) the
Bank does not adopt a new arrangement that would be aggregated with the Plan
under Treasury Regulation 1.409A-1(c) if the Participant participated in both
arrangements, at any time within three years following the date the Bank takes
all necessary action to irrevocably terminate the Plan; or

 

(iii)                               the
Plan is terminated within 12 months of a corporate dissolution taxed under
Section 331 of the Code, or with the approval of a bankruptcy court pursuant to
11 U.S.C. §503(b)(1)(A), provided that the amounts deferred by a Participant
under the Plan are included in the Participant’s gross income in the later of
(1) the calendar year in which the termination of the Plan occurs, or (2) the
first calendar year in which the payment is administratively practicable.

 

7

 

Section 4.8             Unfunded Benefits.
The Plan shall be unfunded. Nothing in this Plan shall be construed to imply
that any specific assets of the Bank have been set aside to provide for
payments under this Plan. Any payments under this Plan will be made solely from
the general assets of the Bank existing at the time such payments are to be
made, and each Participant’s rights under the Plan shall be those of a general
creditor of the Bank.

 

Section 4.9             Directors Emeritus.
The amendment and restatement of this Plan as of October 23, 2007 shall not
affect the amount or timing of any payments to any former Director Emeritus,
including J. Ellwood Kirk.

 

Section 4.10           Plan Frozen. Notwithstanding
anything herein to the contrary, any and all provisions of the Plan shall be
interpreted consistent with the fact that the Plan has been frozen effective as
of November 9, 2005 (including the freezing of accruals and vesting of
benefits in the Plan as of such date).

 

IN WITNESS
WHEREOF, and as conclusive evidence of the adoption of this Plan by the Board
of Directors of the Bank, the President of the Bank has signed and executed
this Plan on behalf of the Bank as of the 23rd day of October, 2007.

 

	
   

  	
  WILLOW
  FINANCIAL BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donna M.
  Coughey

  	
   

  
	
   

  	
   

  	
  Donna M.
  Coughey

  	
   

  
	
   

  	
   

  	
  President
  and Chief Executive Officer

  	
   

  

 

8

 

PAYMENT ELECTION FORM

 

WILLOW FINANCIAL BANK

AMENDED AND RESTATED NON-EMPLOYEE DIRECTORS’ RETIREMENT PLAN

 

Please print all information except
signatures.

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Last Name of Participant

  	
   

  	
  First Name

  	
   

  	
  MI

  	
   

  	
  Social Security Number

  

 

Acknowledgements and Conditions

 

The undersigned Participant
acknowledges receipt of a copy of the Amended and Restated Non-Employee
Directors’ Retirement Plan (the “Plan”) of Willow Financial Bank (the “Bank”)
and understands that the Plan and this Payment Election Form constitute a
binding agreement between the Participant and the Bank. All payments under the
Plan will be subject to the terms and conditions of the Plan, which are incorporated
herein by reference. Any capitalized terms used in this Payment Election Form
but not otherwise defined herein shall have the meanings set forth in the Plan.
The undersigned Participant acknowledges that his or her election will apply to
his or her entire benefit under the Plan and can only be changed in a manner
which complies with Section 3.5 of the Plan.

 

Payment Election

 

The undersigned Participant
elects to receive the value of his or her benefit in one of the following forms
(check one):

 

	
  o

  	
   

  	
  Lump sum distribution on
  the first day of the month following the lapse of six months after the date
  the Participant has ceased being a Director of the Bank and has incurred a
  Separation from Service, with the lump sum discounted to present value, or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  Commencement of equal
  quarterly installments for ten (10) years (i.e., ten years certain and
  continuous) beginning the first day of the month following the lapse of six
  months after the date the Participant has ceased being a Director of the Bank
  and has incurred a Separation from Service.

  

 

 

The
undersigned Participant understands that this Payment Election Form must be
submitted to the President of the Bank on or before December 31, 2008 and that
this Payment Election Form must meet the requirements of Section 3.5 of the
Plan in order to be effective. Section 3.6 of the Plan provides that a Participant may not change his
or her payment election on or after January 1, 2009.

 

	
   

  	
   

  	
  Dated:

  	
   

  	
  , 200  

  
	
  Participant Signature

  	
   

  	
   

  
						

 

The Participant’s Payment
Election Form has been accepted on behalf of the Bank as indicated below.

 

	
   

  	
   

  	
  Dated:

  	
   

  	
  , 200  

  
	
  Donna M. Coughey,
  President

  	
   

  	
   

  
						

 

9

 

BENEFICIARY DESIGNATION FORM

 

WILLOW FINANCIAL BANK

AMENDED AND RESTATED NON-EMPLOYEE DIRECTORS’ RETIREMENT PLAN

 

Please print all information except the
signatures.

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Last Name of Participant

  	
   

  	
  First Name

  	
   

  	
  MI

  	
   

  	
  Social Security Number

  

 

The undersigned Participant hereby designates
the person(s) named below as the Designated Beneficiary(ies) to whom the
Participant requests the Bank to pay all sums payable on behalf of the
Participant’s account upon or after the Participant’s death, reserving the
right of revocation and change of beneficiary(ies). In the event a Designated
Beneficiary is not alive at the time of my death, said sums will be payable to
the estate of the deceased Designated Beneficiary.

 

Designated Beneficiary(ies)
Information

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  %

  
	
  Last Name

  	
  First Name

  	
  MI

  	
  Relationship

  	
   

  	
  % Benefit

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Street Address

  	
  City

  	
  State

  	
   

  	
  Zip Code

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  %

  
	
  Last Name

  	
  First Name

  	
  MI

  	
  Relationship

  	
   

  	
  % Benefit

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Street Address

  	
  City

  	
  State

  	
   

  	
  Zip Code

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  %

  
	
  Last Name

  	
  First Name

  	
  MI

  	
  Relationship

  	
   

  	
  % Benefit

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Street Address

  	
  City

  	
  State

  	
   

  	
  Zip Code

  	
   

  
															

 

	
   

  	
   

  	
   

  	
   

  
	
  Participant Signature

  	
   

  	
  Date

  	
   

  

 

The Participant’s
Beneficiary Designation Form has been accepted on behalf of the Bank as
indicated below.

 

	
   

  	
   

  	
   

  	
   

  
	
  Donna M. Coughey,
  President

  	
   

  	
  Date

  	
   

  

 

10Exhibit 10.10

 

FIRST AMENDMENT TO

SUPPLEMENTAL RETIREMENT AGREEMENT

FOR FREDERICK A. MARCELL, JR.

 

First Amendment, dated as of October 23, 2007 (the “Amendment”), to the
Supplemental Retirement Agreement, dated as of July 28, 1998 (the “SERP
Agreement”), by and between Willow Financial Bank (formerly known as Willow
Grove Bank) (the “Bank”) and Frederick A. Marcell, Jr. (the “Executive”). Capitalized
terms which are not defined herein shall have the same meaning as set forth in
the SERP Agreement.

 

W I T N E S S E T H:

 

WHEREAS, the Executive retired from the Bank in 2005 pursuant to a
Retirement and Severance Agreement by and among Willow Financial Bancorp, Inc.,
formerly known as Willow Grove Bancorp, Inc. (the “Company”), the Bank and the
Executive dated January 20, 2005 (the “Retirement Agreement’);

 

WHEREAS, the Executive retired as an employee on August 30, 2005, and
he continued to serve as a consultant to the Bank from the date of his
retirement through April 30, 2006;

 

WHEREAS, the Retirement Agreement provided that the Executive was fully
vested as to his benefits under the SERP Agreement and that such benefits would
commence on the first day of the month following his 68th birthday;

 

WHEREAS, the benefits under the SERP Agreement commenced on March 1,
2006, which was a specified date for purposes of complying with Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”);

 

WHEREAS, the Executive is currently receiving a benefit under the SERP
Agreement in the amount of $100,000 per year payable in equal monthly
installments for a period of ten years (the “Annual Benefit”); and

 

WHEREAS, the Internal Revenue Service issued final regulations under
Section 409A of the Code in April 2007, and the SERP Agreement is required to
be amended to document its compliance with such regulations;

 

NOW, THEREFORE, in consideration of the premises, the Bank and the
Exercutive hereby amend the SERP Agreement as follows:

 

Section 1.               References
to the Bank. All references to Willow Grove Bank, including references to
the Bank or the Employer, in the SERP Agreement shall be deemed to be
references to Willow Financial Bank.

 

Section 2.               Amendment
to Section 1(a). Section 1(a) of the SERP Agreement is hereby amended to read
in its entirety as follows:

 

 

“(a)         The Executive agrees to retire as President
and Chief Executive Officer of the Bank in 2005 when a new individual is hired
to fill such positions. The Executive shall be entitled to receive from the
Employer an annual supplemental retirement benefit (“Supplemental Retirement
Benefit”), payable in equal monthly installments for ten (10) years (i.e., ten
years certain and continuous), with the monthly installments to commence on the
first day of the month following the Executive’s sixty-eighth (68th)
birthday. The annual Supplemental Retirement Benefit shall be equal to 50% of
the Executive’s Average Annual Compensation, provided that in no event shall
the Supplemental Retirement Benefit exceed $100,000. The Executive shall be
fully vested as to his Supplemental Retirement Benefit as of January 20, 2005.”

 

Section 3. Amendment to Section 2(a). The first sentence of Section
2(a) of the SERP Agreement is hereby amended to read in its entirety as
follows:

 

“In the event that the Executive becomes
disabled within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”) while in the employ of the Employer, the
Executive shall be entitled to receive the Supplemental Retirement Benefit
payable in equal monthly installments beginning with the first day of the month
coinciding with or next following the disability of the Executive and
continuing thereafter for a period of ten (10) years.”

 

Section 4. Amendment to Section 3(a). Section 3(a) of the SERP
Agreement is hereby amended to read in its entirety as follows:

 

“If the Executive’s employment is terminated prior to his retirement for
any reason other than Cause (as defined in Section 3(b) below), the Executive’s
Supplemental Retirement Benefits shall be payable as set forth in Section 1(a)
above.”

 

Section 5. Effectiveness. This Amendment shall be deemed
effective as of January 20, 2005, as if executed on such date. Except as
expressly set forth herein, this Amendment shall not by implication or
otherwise alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained in the SERP
Agreement, all of which are ratified and affirmed in all respects and shall
continue in full force and effect and shall be otherwise unaffected.

 

Section 6. Governing Law. This Amendment and the rights and
obligations hereunder shall be governed by and construed in accordance with the
laws of the Commonwealth of Pennsylvania.

 

Section 7. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall for all purposes be deemed an
original, and all of which together shall constitute but one and the same
instrument.

 

2

 

IN WITNESS WHEREOF, the Bank and the Executive have duly executed this
Amendment as of the day and year first written above.

 

	
   

  	
  WILLOW FINANCIAL BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donna M. Coughey

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Donna M. Coughey

  
	
   

  	
   

  	
  Title:

  	
   President and Chief Executive

  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Frederick A. Marcell, Jr.

  	
   

  
	
   

  	
   

  	
  Frederick A. Marcell, Jr.

  
					

 

3

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