Document:

exhibit102-102908.htm

     

    
      

      

    

    EXHIBIT
10.2

    
      WILLOW
FINANCIAL BANCORP, INC. AMENDED AND RESTATED

      1999
RECOGNITION AND RETENTION PLAN AND TRUST AGREEMENT

      

      ARTICLE
I

      ESTABLISHMENT
OF THE PLAN AND TRUST

      

      1.01           Willow
Financial Bancorp, Inc. (formerly known as "Willow Grove Bancorp, Inc.") (the
"Corporation") hereby amends and restates its 1999 Recognition and Retention
Plan (the "Plan") and Trust (the "Trust") upon the terms and conditions
hereinafter stated in this amended and restated 1999 Recognition and Retention
Plan and Trust Agreement (the "Agreement"), with the amendment and restatement
effective as of October 28, 2008.

      

      1.02           The
Trustee hereby accepts this Trust and agrees to hold the Trust assets existing
on the date of this Agreement and all additions and accretions thereto upon the
terms and conditions hereinafter stated.

      

      ARTICLE
II

      PURPOSE
OF THE PLAN

      

      The
purpose of the Plan is to retain personnel of experience and ability in key
positions by providing Employees and Non-Employee Directors with a proprietary
interest in the Corporation and its Subsidiary Companies as compensation for
their contributions to the Corporation and the Subsidiary Companies and as an
incentive to make such contributions in the future. Each Recipient of a Plan
Share Award hereunder is advised to consult with his or her personal tax advisor
with respect to the tax consequences under federal, state, local and other tax
laws of the receipt of a Plan Share Award hereunder.

      

      ARTICLE
III

      DEFINITIONS

      

      The
following words and phrases when used in this Agreement with an initial capital
letter, unless the context clearly indicates otherwise, shall have the meanings
set forth below.  Wherever appropriate, the masculine pronouns shall
include the feminine pronouns and the singular shall include the
plural.

      

      3.01           "Bank"
means Willow Financial Bank (formerly known as "Willow Grove Bank"), the wholly
owned subsidiary of the Corporation.

      

      3.02           "Beneficiary"
means the person or persons designated by a Recipient to receive any benefits
payable under the Plan in the event of such Recipient's death.  Such
person or persons shall be designated in writing on forms provided for this
purpose by the Committee and may be changed from time to time by similar written
notice to the Committee.  In the absence of a written designation, the
Beneficiary shall be the Recipient's surviving spouse, if any, or if none, his
estate.

      

      3.03           "Board"
means the Board of Directors of the Corporation.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    3.04           "Change
in Control" shall mean a change in the ownership of the Corporation, a change in
the effective control of the Corporation or a change in the ownership of a
substantial portion of the assets of the Corporation, in each case as provided
under Section 409A of the Code and the regulations thereunder.

    

    3.05           "Code"
means the Internal Revenue Code of 1986, as amended.

    

    3.06           "Committee"
means the committee appointed by the Board pursuant to Article IV
hereof.

    

    3.07           "Common
Stock" means shares of the common stock, $.01 par value per share, of the
Corporation.

    

    3.08           "Disability"
means the Recipient (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
Corporation or the Bank (or would have received such benefits for at least three
months if he had been eligible to participate in such plan).

    

    3.09           "Effective
Date" means the day upon which the Board originally adopted this
Plan.

    

    3.10           "Employee"
means any person who is employed by the Corporation, the Bank, or any Subsidiary
Company, or is an Officer of the Corporation, the Bank, or any Subsidiary
Company, but not including directors who are not also Officers of or otherwise
employed by the Corporation, the Bank or a Subsidiary Company.

    

    3.11           "Employer
Group" means the Corporation and any Subsidiary Company which, with the consent
of the Board, agrees to participate in the Plan.

    

    3.12           "Exchange
Act" means the Securities Exchange Act of 1934, as amended.

    

    3.13           "Non-Employee
Director" means a member of the Board of the Corporation or the Bank or any
successor thereto, including an Advisory Director or a Director Emeritus of the
Boards of the Corporation and/or the Bank, who is not an Officer or Employee of
the Corporation, the Bank or any Subsidiary Company.

    

    
      
        
        

      

      
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    3.14           "Offering"
means the offering of Common Stock to the public in connection with the
conversion of the Bank to the stock form of organization, the establishment of a
mutual holding company and the issuance of the capital stock of the Bank to the
Corporation.

    

    3.15           "Officer"
means an Employee whose position in the Corporation or a Subsidiary Company is
that of a corporate officer, as determined by the Board.

    

    3.16           "Performance
Share Award" means a Plan Share Award granted to a Recipient pursuant to Section
7.05 of the Plan.

    

    3.17           "Performance
Goal" means an objective for the Corporation or any Subsidiary Company or any
unit thereof or any Employee of the foregoing that may be established by the
Committee for a Performance Share Award to become vested, earned or
exercisable.  The establishment of Performance Goals are intended to
make the applicable Performance Share Awards "performance-based" compensation
within the meaning of Section 162(m) of the Code, and the Performance Goals
shall be based on one or more of the following criteria:

     

    
      	
               

            	(i)    	net income, as
      adjusted for non-recurring items;
	 	(ii) 	cash
    earnings;
	 	(iii) 	earnings per
      share;
	 	(iv) 	cash earnings per
      share;
	 	(v)	return on average
      equity;
	 	(vi)	return on average
      assets;
	 	(vii) 	assets;
	 	(viii)	stock
    price;
	 	(ix)	total stockholder
      return;
	 	(x)	capital;
	 	(xi)	net interest
      income;
	 	(xii)	market
    share;
	 	(xiii)	cost control or
      efficiency ratio; and
	 	(xiv)	asset
    growth.

    

     

    3.18           "Plan
Shares" or "Shares" means shares of Common Stock which may be distributed to a
Recipient pursuant to the Plan.

    

    3.19           "Plan
Share Award" or "Award" means a right granted under this Plan to receive a
distribution of Plan Shares upon completion of the service requirements
described in Article VII, and includes Performance Share Awards.

    

    3.20           "Recipient"
means an Employee or Non-Employee Director who receives a Plan Share Award or
Performance Share Award under the Plan.

    
      
        
        

      

      
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    3.21           "Subsidiary
Companies" means those subsidiaries of the Corporation, including the Bank,
which meet the definition of "subsidiary corporation" set forth in Section
424(f) of the Code, at the time of the granting of the Plan Share Award in
question.

    

    3.22           "Trustee"
means such firm, entity or persons approved by the Board to hold legal title to
the Plan and the Plan assets for the purposes set forth herein.

    

    ARTICLE
IV

    ADMINISTRATION
OF THE PLAN

    

    4.01           Duties of
the Committee.  The Plan shall be administered and interpreted
by the Committee, which shall consist of two or more members of the Board, each
of whom shall be a Non-Employee Director, as defined in Rule 16b-3(b)(3)(i) of
the Exchange Act.  In addition, each member of the Committee shall be
an "outside director" within the meaning of Section 162(m) of the Code and the
regulations thereunder at such times as is required under such
regulations.  The Committee shall have all of the powers allocated to
it in this and other Sections of the Plan.  The interpretation and
construction by the Committee of any provisions of the Plan or of any Plan Share
Award granted hereunder shall be final and binding in the absence of action by
the Board.  The Committee shall act by vote or written consent of a
majority of its members.  Subject to the express provisions and
limitations of the Plan, the Committee may adopt such rules, regulations and
procedures as it deems appropriate for the conduct of its
affairs.  The Committee shall report its actions and decisions with
respect to the Plan to the Board at appropriate times, but in no event less than
once per calendar year.

    

    4.02           Role of
the Board.  The members of the Committee and the Trustee shall
be appointed or approved by, and will serve at the pleasure of, the
Board.  The Board may in its discretion from time to time remove
members from, or add members to, the Committee, and may remove or replace the
Trustee, provided that any directors who are selected as members of the
Committee shall be Non-Employee Directors.

    

    4.03           Limitation
on Liability.  No member of the
Board or the Committee shall be liable for any determination made in good faith
with respect to the Plan or any Plan Shares or Plan Share Awards granted under
it.  If a member of the Board or the Committee is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of anything done or not done by him in such capacity under or with
respect to the Plan, the Corporation shall, subject to the requirements of
applicable laws and regulations, indemnify such member against all liabilities
and expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in the best interests of the Corporation and any
Subsidiary Companies and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful.

     

    
      
        
        

      

      
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    4.04           Compliance
with Laws and Regulations.  All Awards
granted hereunder shall be subject to all applicable federal and state laws,
rules and regulations and to such approvals by any government or regulatory
agency or stockholders as may be required.

    

    4.05           Restrictions
on Transfer.  The Corporation
may place a legend upon any certificate representing shares issued pursuant to a
Plan Share Award noting that such shares may be restricted by applicable laws
and regulations.

    

    ARTICLE
V

    CONTRIBUTIONS

    

    5.01           Amount
and Timing of Contributions.  The Board shall
determine the amount (or the method of computing the amount) and timing of any
contributions by the Corporation and any Subsidiary Companies to the Trust
established under this Plan.  Such amounts may be paid in cash or in
shares of Common Stock and shall be paid to the Trust at the designated time of
contribution.  No contributions by Employees or Non-Employee Directors
shall be permitted.

    

    5.02           Investment
of Trust Assets; Number of Plan Shares.  Subject to
Section 8.02 hereof, the Trustee shall invest all of the Trust's assets
primarily in Common Stock.  The aggregate number of Plan Shares
available for distribution pursuant to this Plan shall be 89,635 shares of
Common Stock, subject to adjustment as provided in Section 10.01 hereof, which
shares shall be purchased (from the Corporation and/or, if permitted by
applicable regulations, from stockholders thereof) by the Trust with funds
contributed by the Corporation.  During the time this Plan remains in
effect, Awards to each Employee and each Non-Employee Director shall not exceed
25% and 5% of the shares of Common Stock available under the Plan,
respectively.  Plan Share Awards to Non-Employee Directors in the
aggregate shall not exceed 30% of the number of shares available under this
Plan.

     

    ARTICLE
VI

    ELIGIBILITY;
ALLOCATIONS

    

    6.01           Awards.  Plan
Share Awards and Performance Share Awards may be made to such Employees and
Non-Employee Directors as may be selected by the Board or the
Committee.  In selecting those Employees to whom Plan Share Awards
and/or Performance Share Awards may be granted and the number of Shares covered
by such Awards, the Board or the Committee shall consider the duties,
responsibilities and performance of each respective Employee and Non-Employee
Director, his present and potential contributions to the growth and success of
the Corporation, his salary or other compensation and such other factors as
deemed relevant to accomplishing the purposes of the Plan.  The Board
or the Committee may but shall not be required to request the written
recommendation of the Chief Executive Officer of the Corporation other than with
respect to Plan Share Awards and/or Performance Share Awards to be granted to
him.

    
      
        
        

      

      
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    6.02           Form of
Allocation.  As promptly as practicable after an allocation
pursuant to Section 6.01 that a Plan Share Award or a Performance Share Award is
to be issued, the Board or the Committee shall notify the Recipient in writing
of the grant of the Award, the number of Plan Shares covered by the Award, and
the terms upon which the Plan Shares subject to the Award shall be distributed
to the Recipient.  The date on which the Board or the Committee so
notifies the Recipient shall be considered the date of grant of the Plan Share
Award or the Performance Share Award.  The Board or the Committee
shall maintain records as to all grants of Plan Share Awards or Performance
Share Awards under the Plan.

    

    6.03           Allocations
Not Required to any Specific Employee or Non-Employee
Director.  No Employee or Non-Employee Director shall have any
right or entitlement to receive a Plan Share Award hereunder, with such Awards
being at the total discretion of the Board or the Committee.

    

    ARTICLE
VII

    EARNING
AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS

    

    7.01           Earning
Plan Shares; Forfeitures.

    

    (a)           General
Rules.  Subject to the terms hereof, Plan Share Awards granted
shall be earned by a Recipient at the rate of twenty percent (20%) of the
aggregate number of Shares covered by the Award as of each annual anniversary of
the date of grant of the Award. If the employment of an Employee or service as a
Non-Employee Director (including for purposes hereof service of a Director
Emeritus or Advisory Director) is terminated prior to the fifth (5th) annual
anniversary of the date of grant of a Plan Share Award for any reason (except as
specifically provided in subsections (b), (c) and (d) below), the Recipient
shall forfeit the right to any Shares subject to the Award which have not
theretofore been earned.  In the event of a forfeiture of the right to
any Shares subject to an Award, such forfeited Shares shall become available for
allocation pursuant to Section 6.01 hereof as if no Award had been previously
granted with respect to such Shares.  No fractional shares shall be
distributed pursuant to this Plan.

    

    (b)           Exception
for Terminations Due to Death or Disability. Notwithstanding the general
rule contained in Section 7.01(a), all Plan Shares subject to a Plan Share Award
held by a Recipient whose employment with the Corporation or any Subsidiary
Company or service as a Non-Employee Director terminates due to death or
Disability shall be deemed earned as of the Recipient's last day of employment
with or service to the Corporation or any Subsidiary Company (provided, however,
no such accelerated vesting shall occur if a Recipient remains employed by at
least one member of the Employer Group) and shall be distributed as soon as
practicable thereafter.

    

    (c)           Exception
for a Change in Control of the Corporation.  Notwithstanding
the general rule contained in Section 7.01(a), all Plan Shares subject to a Plan
Share Award held by a Recipient shall be deemed to be earned as of the effective
date of a Change in Control if, as of the date of such Change in Control (i)
such treatment is either authorized or is not prohibited by applicable laws and
regulations, or (ii) an amendment to the Plan providing for such treatment has
been approved by stockholders of the Corporation at a meeting of the
stockholders held more than one (1) year after the consummation of the
Offering.

    
      
        
        

      

      
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    (d)           Revocation
for Misconduct.  Notwithstanding anything hereinafter to the
contrary, the Board may by resolution immediately revoke, rescind and terminate
any Plan Share Award or Performance Share Award or portion thereof, previously
awarded under this Plan, to the extent Plan Shares have not been distributed
hereunder to the Recipient, whether or not yet earned, in the case of an
Employee who is discharged from the employ of the Corporation or any Subsidiary
Company for cause (as hereinafter defined).  Termination for cause
shall mean termination because of the Employee's 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.  Plan Share Awards granted to a
Non-Employee Director who is removed for cause pursuant to the Corporation's
Articles of Incorporation and Bylaws or the Bank's Charter and Bylaws shall
terminate as of the effective date of such removal.

    

    7.02         Distribution
of Dividends.  Any cash dividends (including special large and
nonrecurring dividends including any that has the effect of a return of capital
to the Corporation's stockholders) or stock dividends declared in respect of
each unvested Plan Share Award (including a Performance Share Award) will be
held by the Trust for the benefit of the Recipient on whose behalf such Plan
Share Award (including any unearned Performance Share Awards) is then held by
the Trust, and such dividends or returns of capital, including any interest
thereon, will be paid out proportionately by the Trust to the Recipient thereof
as soon as practicable after the Plan Share Awards become earned.

    

    7.03         Distribution
of Plan Shares.

    

    (a)           Timing of
Distributions:  General Rule.   Subject to the
provisions of Section 7.05 hereof, Plan Shares shall be distributed to the
Recipient or his Beneficiary, as the case may be, as soon as practicable after
they have been earned.

    

    (b)           Form of
Distributions.  All Plan Shares, together with any Shares
representing stock dividends, shall be distributed in the form of Common
Stock.  One share of Common Stock shall be given for each Plan Share
earned and distributable.  Payments representing cash dividends shall
be made in cash.

    

    (c)           Withholding.  The
Trustee may withhold from any cash payment or Common Stock distribution made
under this Plan sufficient amounts to cover any applicable withholding and
employment taxes, and if the amount of a cash payment is insufficient, the
Trustee may require the Recipient or Beneficiary to pay to the Trustee the
amount required to be withheld as a condition of delivering the Plan
Shares.  The Trustee shall pay over to the Corporation or any
Subsidiary Company which employs or employed such Recipient any such amount
withheld from or paid by the Recipient or Beneficiary.

    
      
        
        

      

      
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    (d)           Restrictions
on Selling of Plan Shares.  Plan Share Awards
may not be sold, assigned, pledged or otherwise disposed of prior to the time
that they are earned and distributed pursuant to the terms of this
Plan.  Upon distribution, the Board or the Committee may require the
Recipient or his Beneficiary, as the case may be, to agree not to sell or
otherwise dispose of his distributed Plan Shares except in accordance with all
then applicable federal and state securities laws, and the Board or the
Committee may cause a legend to be placed on the stock certificate(s)
representing the distributed Plan Shares in order to restrict the transfer of
the distributed Plan Shares for such period of time or under such circumstances
as the Board or the Committee, upon the advice of counsel, may deem
appropriate.

    

    7.04        Voting of
Plan Shares.  After a Plan Share Award (other than
a  Performance Share Award) has been made, the Recipient shall be
entitled to direct the Trustee as to the voting of the Plan Shares which are
covered by the Plan Share Award and which have not yet been earned and
distributed to him pursuant to Section 7.03, subject to rules and procedures
adopted by the Committee for this purpose.  All shares of Common Stock
held by the Trust which have not been awarded under a Plan Share Award, shares
subject to Performance Share Awards which have not yet vested and shares which
have been awarded as to which Recipients have not directed the voting shall be
voted by the Trustee in its discretion.

    

    
      	
               
      

            	
              7.05

            	
              Performance
      Awards

            

    

    

    (a)           Designation
of Performance Share Awards. The Committee may
determine to make any Plan Share Award a Performance Share Award by making such
Plan Share Award contingent upon the achievement of a Performance Goal or any
combination of Performance Goals.  Each Performance Share Award shall
be evidenced by a written agreement ("Award Agreement"), which shall set forth
the Performance Goals applicable to the Performance Share Award, the maximum
amounts payable and such other terms and conditions as are applicable to the
Performance Share Award.  Each Performance Share Award shall be
granted and administered to comply with the requirements of Section 162(m) of
the Code.

    

    (b)           Timing of
Grants.  Any Performance Share Award shall be made not later
than 90 days after the start of the period for which the Performance Share Award
relates and shall be made prior to the completion of 25% of such
period.  All determinations regarding the achievement of any
Performance Goals will be made by the Committee.  The Committee may
not increase during a year the amount of a Performance Share Award that would
otherwise be payable upon achievement of the Performance Goals but may reduce or
eliminate the payments as provided for in the Award Agreement.

    
      
        
        

      

      
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      (c)           Restrictions
on Grants.  Nothing contained in the Plan will be deemed in any
way to limit or restrict the Committee from making any Award or payment to any
person under any other plan, arrangement or understanding, whether now existing
or hereafter in effect.

      

      (d)           Rights of
Recipients.  Notwithstanding anything to the contrary herein, a
Participant who receives a Performance Share Award payable in Common Stock shall
have no rights as a stockholder until the Common Stock is issued pursuant to the
terms of the Award Agreement.

      

      (e)           Transferability.  A
Participant’s interest in a Performance Share Award may not be sold, assigned,
transferred, pledged, or otherwise encumbered.

      

      (f)           Distribution.  No
Performance Share Award or portion thereof that is subject to the attainment or
satisfaction of a condition of a Performance Goal shall be distributed or
considered to be earned or vested until the Committee certifies in writing that
the conditions or Performance Goal to which the distribution, earning or vesting
of such Award is subject have been achieved.

       

      ARTICLE
VIII

      TRUST

      

      8.01         Trust.  The
Trustee shall receive, hold, administer, invest and make distributions and
disbursements from the Trust in accordance with the provisions of the Plan and
Trust and the applicable directions, rules, regulations, procedures and policies
established by the Committee pursuant to the Plan.

      

      8.02         Management
of Trust.  It is the intent of this Plan and Trust that the
Trustee shall have complete authority and discretion with respect to the
arrangement, control and investment of the Trust, and that the Trustee shall
invest all assets of the Trust in Common Stock to the fullest extent
practicable, except to the extent that the Trustee determines that the holding
of monies in cash or cash equivalents is necessary to meet the obligations of
the Trust.  In performing its duties, the Trustee shall have the power
to do all things and execute such instruments as may be deemed necessary or
proper, including the following powers:

      

      (a)           To
invest up to one hundred percent (100%) of all Trust assets in Common Stock
without regard to any law now or hereafter in force limiting investments for
trustees or other fiduciaries.  The investment authorized herein may
constitute the only investment of the Trust, and in making such investment, the
Trustee is authorized to purchase Common Stock from the Corporation or from any
other source, and such Common Stock so purchased may be outstanding, newly
issued, or treasury shares.

      

      (b)           To
invest any Trust assets not otherwise invested in accordance with (a) above, in
such deposit accounts, and certificates of deposit, obligations of the United
States Government or its agencies or such other investments as shall be
considered the equivalent of cash.

      
        
          
          

        

        
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    (c)           To
sell, exchange or otherwise dispose of any property at any time held or acquired
by the Trust.

    

    (d)           To
cause stocks, bonds or other securities to be registered in the name of a
nominee, without the addition of words indicating that such security is an asset
of the Trust (but accurate records shall be maintained showing that such
security is an asset of the Trust).

    

    (e)           To
hold cash without interest in such amounts as may in the opinion of the Trustee
be reasonable for the proper operation of the Plan and Trust.

    

    (f)           To
employ brokers, agents, custodians, consultants and accountants.

    

    (g)           To
hire counsel to render advice with respect to its rights, duties and obligations
hereunder, and such other legal services or representation as it may deem
desirable.

    

    (h)           To
hold funds and securities representing the amounts to be distributed to a
Recipient or his Beneficiary as a consequence of a dispute as to the disposition
thereof, whether in a segregated account or held in common with other assets of
the Trust.

    

    Notwithstanding
anything herein contained to the contrary, the Trustee shall not be required to
make any inventory, appraisal or settlement or report to any court, or to secure
any order of court for the exercise of any power herein contained, or give
bond.

    

    8.03   Records
and Accounts.  The Trustee shall maintain accurate and detailed
records and accounts of all transactions of the Trust, which shall be available
at all reasonable times for inspection by any legally entitled person or entity
to the extent required by applicable law, or any other person determined by the
Board or the Committee.

    

    8.04           Expenses.  All
costs and expenses incurred in the operation and administration of this Plan
shall be borne by the Corporation or, in the discretion of the Corporation, the
Trust.

    

    8.05           Indemnification.  Subject
to the requirements of applicable laws and regulations, the Corporation shall
indemnify, defend and hold the Trustee harmless against all claims, expenses and
liabilities arising out of or related to the exercise of the Trustee's powers
and the discharge of its duties hereunder, unless the same shall be due to its
gross negligence or willful misconduct.

    

    ARTICLE
IX

    DEFERRED
PAYMENTS

    

    9.01           Deferral
of Plan Shares.  Notwithstanding any other provision of this
Plan, any Recipient may elect, with the approval of the Committee and consistent
with any rules and regulations established by the Board, to defer the receipt of
Plan Shares granted hereunder in accordance with the Corporation’s Deferred
Compensation Plan.

    
      
        
        

      

      
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    9.02           Timing of
Election.  The election to defer the delivery of any Plan
Shares must be made no later than the last day of the calendar year preceding
the calendar year in which the Recipient would otherwise have an unrestricted
right to receive such Shares.  Deferrals of eligible Plan Shares shall
only be allowed for Plan Share Awards for which all applicable restrictions
lapse while the Recipient is in active service with the Corporation or one of
the Subsidiary Companies. Any election to defer the proceeds from an eligible
Plan Share Award shall be irrevocable as long as the Recipient remains an
Employee or a Non-Employee Director.

    

    ARTICLE
X

    MISCELLANEOUS

    

    10.01         Adjustments
for Capital Changes.  The aggregate number of Plan Shares
available for distribution pursuant to the Plan Share Awards and the number of
Shares to which any unvested Plan Share Award relates shall be proportionately
adjusted for any increase or decrease in the total number of outstanding shares
of Common Stock issued subsequent to the Effective Date of the Plan resulting
from any split, subdivision or consolidation of shares or other capital
adjustment, the payment of a stock dividend or other increase or decrease in
such shares effected without receipt or payment of consideration by the
Corporation.  If, upon a merger, consolidation, reorganization,
liquidation, recapitalization or the like of the Corporation or of another
corporation, the shares of the Corporation’s Common Stock shall be exchanged for
other securities of the Corporation or of another corporation, then each
recipient of a Plan Share Award shall be entitled, subject to the conditions
herein stated, to receive such number of shares of Common Stock or amount of
other securities of the Corporation or such other corporation as were
exchangeable for the number of shares of Common Stock of the Corporation which
such Recipients would have been entitled to receive except for such
action.

    

    10.02           Amendment
and Termination of Plan.  The Board may, by resolution, at any
time amend or terminate the Plan, subject to any required stockholder approval
or any stockholder approval which the Board may deem to be advisable for any
reason, such as for the purpose of obtaining or retaining any statutory or
regulatory benefits under tax, securities or other laws or satisfying any
applicable stock exchange listing requirements.  The Board may not,
without the consent of the Recipient, alter or impair his Plan Share Award
except as specifically authorized herein. Notwithstanding any other provision of
the Plan, this Plan may not be terminated prior to such time as all outstanding
Plan Share Awards granted to Recipients have been earned or forfeited in
accordance with the Plan.

    

    10.03            Nontransferable.  Plan
Share Awards and Performance Share Awards and rights to Plan Shares shall not be
transferable by a Recipient, and during the lifetime of the Recipient, Plan
Shares may only be earned by and paid to a Recipient who was notified in writing
of an Award by the Committee pursuant to Section 6.02.  No Recipient
or Beneficiary shall have any right in or claim to any assets of the Plan or
Trust, nor shall the Corporation or any Subsidiary Company be subject to any
claim for benefits hereunder.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    10.04            Employment
or Service Rights.  Neither the Plan nor any grant of a Plan
Share Award, Performance Share Award or Plan Shares hereunder nor any action
taken by the Trustee, the Committee or the Board in connection with the Plan
shall create any right on the part of any Employee or Non-Employee Director to
continue in such capacity.

    

    10.05             Voting
and Dividend Rights.  No Recipient shall have any voting or
dividend rights or other rights of a stockholder in respect of any Plan Shares
covered by a Plan Share Award or Performance Share Award, except as expressly
provided in Sections 7.02, 7.04 and 7.05 above, prior to the time said Plan
Shares are actually earned and distributed to him.

    

    10.06             Governing
Law.  To the extent not governed by federal law, the Plan and
Trust shall be governed by the laws of the State of Pennsylvania.

    

    10.07              Effective
Date.  This Plan as originally adopted was effective as of the
Effective Date, and Awards may be granted hereunder no earlier than the date
this Plan was approved by the stockholders of the Corporation and prior to the
termination of the Plan.  Notwithstanding the foregoing or anything to
the contrary in this Plan, the implementation of this Plan was subject to the
approval of the Corporation's stockholders which occurred at a meeting held on
July 27, 1999.  The amendment and restatement of this Plan shall be
effective as of the date set forth in Section 1.01 above.

    

    10.08              Term of
Plan.  This Plan shall remain in effect until the earlier of
(i) ten (10) years from the Effective Date, (ii) termination by the Board, or
(iii) the distribution to Recipients and Beneficiaries of all the assets of the
Trust.

    

    10.09               Tax
Status of Trust.  It is intended that the trust established
hereby be treated as a Grantor Trust of the Corporation under the provisions of
Section 671 et
seq. of the
Code, as the same may be amended from time to time.

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    IN WITNESS WHEREOF, the
Corporation has caused this Agreement to be executed by its duly authorized
officers and duly attested, and the Trustees of the Trust established pursuant
hereto have duly and validly executed this Agreement, all on this 28th day of
October, 2008.

    

      
        	 
      	
                WILLOW
      FINANCIAL BANCORP, INC.

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                 

              	
                By:

              	
                /s/
      Donna M. Coughey

              
	 
      	 
      	
                Donna
      M. Coughey

              
	 
      	 
      	
                President
      and Chief Executive Officer

              

      

    

     

    
      
        	 
      	
                TRUSTEES:

              
	 
      	 
      
	 
      	 
      
	 
      	
                /s/ Donna M.
      Coughey

              
	 
      	
                Donna
      M. Coughey

              
	 
      	 
      
	 
      	 
      
	 
      	
                /s/ Ammon J.
      Baus

              
	 
      	
                Ammon
      J. Baus

              
	 
      	 
      
	 
      	 
      
	 
      	
                /s/ Neelesh
      Kalani

              
	 
      	
                Neelesh
      Kalaniexhibit103-102908.htm

     

    
      

      

    

    EXHIBIT
10.3

    
      WILLOW
FINANCIAL BANCORP, INC. AMENDED AND RESTATED

      2002
RECOGNITION AND RETENTION PLAN AND TRUST AGREEMENT

      

      ARTICLE
I

      ESTABLISHMENT
OF THE PLAN AND TRUST

      

      1.01           Willow
Financial Bancorp, Inc. (formerly known as “Willow Grove Bancorp, Inc.”) (the
"Corporation") hereby amends and restates its 2002 Recognition and Retention
Plan (as amended and restated, the "Plan") and Trust (the "Trust") upon the
terms and conditions hereinafter stated in this amended and restated 2002
Recognition and Retention Plan and Trust Agreement (the "Agreement"), with the
amendment and restatement effective as of October 28, 2008.

      

      1.02           The
Trustee hereby accepts this Trust and agrees to hold the Trust assets existing
on the date of this Agreement and all additions and accretions thereto upon the
terms and conditions hereinafter stated.

      

      ARTICLE
II

      PURPOSE
OF THE PLAN

      

      The
purpose of the Plan is to retain personnel of experience and ability in key
positions by providing Employees and Non-Employee Directors with a proprietary
interest in the Corporation and its Subsidiary Companies as compensation for
their contributions to the Corporation and the Subsidiary Companies and as an
incentive to make such contributions in the future.   Each
Recipient of a Plan Share Award hereunder is advised to consult with his or her
personal tax advisor with respect to the tax consequences under federal, state,
local and other tax laws of the receipt of a Plan Share Award
hereunder.

      

      ARTICLE
III

      DEFINITIONS

      

      The
following words and phrases when used in this Agreement with an initial capital
letter, unless the context clearly indicates otherwise, shall have the meanings
set forth below.  Wherever appropriate, the masculine pronouns shall
include the feminine pronouns and the singular shall include the
plural.

      

      3.01           "Bank"
means Willow Financial Bank (formerly known as “Willow Grove Bank”), the wholly
owned subsidiary of the Corporation.

      

      3.02           "Beneficiary"
means the person or persons designated by a Recipient to receive any benefits
payable under the Plan in the event of such Recipient's death.  Such
person or persons shall be designated in writing on forms provided for this
purpose by the Committee and may be changed from time to time by similar written
notice to the Committee.  In the absence of a written designation, the
Beneficiary shall be the Recipient's surviving spouse, if any, or if none, his
estate.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    3.03           "Board"
means the Board of Directors of the Corporation.

    

    3.04           "Change
in Control" shall mean a change in the ownership of the Corporation, a change in
the effective control of the Corporation or a change in the ownership of a
substantial portion of the assets of the Corporation, in each case as provided
under Section 409A of the Code and the regulations thereunder.

    

    3.05           "Code"
means the Internal Revenue Code of 1986, as amended.

    

    3.06           "Committee"
means the committee appointed by the Board pursuant to Article IV
hereof.

    

    3.07           "Common
Stock" means shares of the common stock, $0.01 par value per share, of the
Corporation.

    

    3.08           “Director”
means a member of the Board of Directors of the Corporation or any of its
Subsidiary Companies or any successors thereto, including Non-Employee Directors
as well as Officers and Employees serving as Directors.

    

    3.09           “Director
Emeritus” and “Advisory Director” means a person appointed to serve in such
capacity by the Board of either the Corporation or the Bank or the successors
thereto.

    

    3.10           “Disability”
means the Recipient (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
Corporation or the Bank (or would have received such benefits for at least three
months if he had been eligible to participate in such plan).

    

    3.11           "Effective
Date" means the day upon which the Board originally adopted this Plan, which was
September 24, 2002.

    

    3.12           "Employee"
means any person who is employed by the Corporation or a Subsidiary Company or
is an Officer of the Corporation or a Subsidiary Company, but not including
directors who are not also Officers of or otherwise employed by the Corporation
or a Subsidiary Company.

    

    3.13           "Employer
Group" means the Corporation and any Subsidiary Company which, with the consent
of the Board, agrees to participate in the Plan.

    

    3.14           "Exchange
Act" means the Securities Exchange Act of 1934, as amended.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      3.15           "Non-Employee
Director" means a member of the Board (including advisory boards, if any) of the
Corporation or any Subsidiary Company or any successor thereto, including an
Advisory Director or a Director Emeritus of the Board of the Corporation and/or
any Subsidiary Company or a former Officer or Employee of the Corporation and/or
any Subsidiary Company serving as Director, Advisory Director or Director
Emeritus, who is not an Officer or Employee of the Corporation or any Subsidiary
Company.

      

      3.16           "Offering"
means the offering of Common Stock to the public during 2002 in connection with
the reorganization of the Bank from the mutual holding company form to the stock
holding company form of organization and the issuance of the capital stock of
the Bank to the Corporation.

      

      3.17           "Officer"
means an Employee whose position in the Corporation or a Subsidiary Company is
that of a corporate officer, as determined by the Board.

      

      3.18           "Performance
Share Award" means a Plan Share Award granted to a Recipient pursuant to Section
7.05 of the Plan.

      

      3.19           "Performance
Goal" means an objective for the Corporation or any Subsidiary Company or any
unit thereof or any Employee of the foregoing that may be established by the
Committee for a Performance Share Award to become vested, earned or
exercisable.  The establishment of Performance Goals are intended to
make the applicable Performance Share Awards Aperformance-based@
compensation within the meaning of Section 162(m) of the Code, and the
Performance Goals shall be based on one or more of the following
criteria:

      

      
        
          
            
              	 
      	
                      (i)

                    	
                      net
      income, as adjusted for non-recurring items;

                    
	 
      	
                      (ii)

                    	
                      cash
      earnings;

                    
	 
      	
                      (iii)

                    	
                      earnings
      per share;

                    
	 
      	
                      (iv)

                    	
                      cash
      earnings per share;

                    
	 
      	
                      (v)

                    	
                      return
      on average equity;

                    
	 
      	
                      (vi)

                    	
                      return
      on average assets;

                    
	 
      	
                      (vii)

                    	
                      assets;

                    
	 
      	
                      (viii)

                    	
                      stock
      price;

                    
	 
      	
                      (ix)

                    	
                      total
      stockholder return;

                    
	 
      	
                      (x)

                    	
                      capital;

                    
	 
      	
                      (xi)

                    	
                      net
      interest income;

                    
	 
      	
                      (xii)

                    	
                      market
      share;

                    
	 
      	
                      (xiii)

                    	
                      cost
      control or efficiency ratio; and

                    
	 
      	
                      (xiv)

                    	
                      asset
      growth.

                    

            

          

        

      3.20           "Plan
Shares" or "Shares" means shares of Common Stock which may be distributed to a
Recipient pursuant to the Plan.

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      
        3.21           "Plan
Share Award" or "Award" means a right granted under this Plan to receive a
distribution of Plan Shares upon completion of the service requirements
described in Article VII, and includes Performance Share Awards.

        

        3.22           "Recipient"
means an Employee or Non-Employee Director or former Employee or Non-Employee
Director who receives a Plan Share Award or Performance Share Award under the
Plan.

        

        3.23           "Subsidiary
Companies" means those subsidiaries of the Corporation, including the Bank,
which meet the definition of Asubsidiary
corporations@ set forth
in Section 424(f) of the Code, at the time of the granting of the Plan Share
Award in question.

        

        3.24           "Trustee"
means such firm, entity or persons approved by the Board to hold legal title to
the Plan and the Plan assets for the purposes set forth herein.

        

        ARTICLE
IV

        ADMINISTRATION
OF THE PLAN

        

        4.01           Duties of
the Committee.  The Plan shall be administered and interpreted
by the Committee, which shall consist of two or more members of the Board, each
of whom shall be a Non-Employee Director, as defined in Rule 16b-3(b)(3)(i) of
the Exchange Act.  In addition, each member of the Committee shall be
an Aoutside
director@ within the
meaning of Section 162(m) of the Code and the regulations thereunder at such
times as is required under such regulations.  The Committee shall have
all of the powers allocated to it in this and other Sections of the
Plan.  The interpretation and construction by the Committee of any
provisions of the Plan or of any Plan Share Award granted hereunder shall be
final and binding in the absence of action by the Board.  The
Committee shall act by vote or written consent of a majority of its
members.  Subject to the express provisions and limitations of the
Plan, the Committee may adopt such rules, regulations and procedures as it deems
appropriate for the conduct of its affairs.  The Committee shall
report its actions and decisions with respect to the Plan to the Board at
appropriate times, but in no event less than once per calendar
year.

        

        4.02           Role of
the Board.  The members of the Committee and the Trustee shall
be appointed or approved by, and will serve at the pleasure of, the
Board.  The Board may in its discretion from time to time remove
members from, or add members to, the Committee, and may remove or replace the
Trustee, provided that any directors who are selected as members of the
Committee shall be Non-Employee Directors.

        

        4.03           Limitation
on Liability.  No member of the
Board or the Committee shall be liable for any determination made in good faith
with respect to the Plan or any Plan Shares or Plan Share Awards granted under
it.  If a member of the Board or the Committee is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of anything done or not done by him in such capacity under or with
respect to the Plan, the Corporation shall, subject to the requirements of
applicable laws and regulations, indemnify such member against all liabilities
and expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in the best interests of  the Corporation
and any Subsidiary Companies and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful.

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

        4.04           Compliance
with Laws and Regulations.  All Awards
granted hereunder shall be subject to all applicable federal and state laws,
rules and regulations and to such approvals by any government or regulatory
agency or stockholders as may be required.

        

        4.05           Restrictions
on Transfer.  The Corporation
may place a legend upon any certificate representing shares issued pursuant to a
Plan Share Award noting that such shares may be restricted by applicable laws
and regulations.

        

        ARTICLE
V

        CONTRIBUTIONS

        

        5.01           Amount
and Timing of Contributions.  The Board shall
determine the amount (or the method of computing the amount) and timing of any
contributions by the Corporation and any Subsidiary Companies to the Trust
established under this Plan.  Such amounts may be paid in cash or in
shares of Common Stock and shall be paid to the Trust at the designated time of
contribution.  No contributions by Employees or Non-Employee Directors
shall be permitted.

        

        5.02           Investment
of Trust Assets; Number of Plan Shares.  Subject to
Section 8.02 hereof, the Trustee shall invest all of the Trust's assets
primarily in Common Stock.  The aggregate number of Plan Shares
available for distribution pursuant to this Plan shall be 256,565 shares of
Common Stock, subject to adjustment as provided in Section 10.01 hereof, which
shares shall be purchased (from the Corporation and/or, if permitted by
applicable regulations, from stockholders thereof) by the Trust with funds
contributed by the Corporation.  During the time this Plan remains in
effect, Awards to each Employee and each Non-Employee Director shall not exceed
25% and 5% of the shares of Common Stock available under the Plan,
respectively.  Plan Share Awards to Non-Employee Directors in the
aggregate shall not exceed 30% of the number of shares available under this
Plan.

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

        ARTICLE
VI

        ELIGIBILITY;
ALLOCATIONS

        

        6.01           Awards.  Plan
Share Awards and Performance Share Awards may be made to such Employees and
Non-Employee Directors as may be selected by the Board or the
Committee.  In selecting those Employees to whom Plan Share Awards
and/or Performance Share Awards may be granted and the number of Shares covered
by such Awards, the Board or the Committee shall consider the duties,
responsibilities and performance of each respective Employee and Non-Employee
Director, his present and potential contributions to the growth and success of
the Corporation, his salary or other compensation and such other factors as
deemed relevant to accomplishing the purposes of the Plan.  The Board
or the Committee may but shall not be required to request the written
recommendation of the Chief Executive Officer of the Corporation other than with
respect to Plan Share Awards and/or Performance Share Awards to be granted to
him.

        

        6.02           Form of
Allocation.  As promptly as practicable after an allocation
pursuant to Section 6.01 that a Plan Share Award or a Performance Share Award is
to be issued, the Board or the Committee shall notify the Recipient in writing
of the grant of the Award, the number of Plan Shares covered by the Award, and
the terms upon which the Plan Shares subject to the Award shall be distributed
to the Recipient.  The date on which the Board or the Committee so
notifies the Recipient shall be considered the date of grant of the Plan Share
Award or the Performance Share Award.  The Board or the Committee
shall maintain records as to all grants of Plan Share Awards or Performance
Share Awards under the Plan.

        

        6.03           Allocations
Not Required to any Specific Employee or Non-Employee
Director.  No Employee or Non-Employee Director shall have any
right or entitlement to receive a Plan Share Award hereunder, with such Awards
being at the total discretion of the Board or the Committee.

        

        ARTICLE
VII

        EARNING
AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS

        

        7.01           Earning
Plan Shares; Forfeitures.

        

        (a)           General
Rules.  Subject to the terms hereof, Plan Share Awards granted
shall be earned by a Recipient at the rate of twenty percent (20%) of the
aggregate number of Shares covered by the Award as of each annual anniversary of
the date of grant of the Award. If the employment of an Employee or service as a
Non-Employee Director (including for purposes hereof services as a Director
Emeritus or Advisory Director) is terminated prior to the fifth (5th) annual
anniversary of the date of grant of a Plan Share Award for any reason (except as
specifically provided in subsections (b) and (c) below), the Recipient shall
forfeit the right to any Shares subject to the Award which have not theretofore
been earned.  In the event of a forfeiture of the right to any Shares
subject to an Award, such forfeited Shares shall become available for allocation
pursuant to Section 6.01 hereof as if no Award had been previously granted with
respect to such Shares.  No fractional shares shall be distributed
pursuant to this Plan.

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

        (b)           Exception
for Terminations Due to Death, Disability or Change in
Control.  Notwithstanding the general rule contained in Section
7.01(a), all Plan Shares subject to a Plan Share Award held by a Recipient whose
employment with the Corporation or any Subsidiary Company or service as a
Non-Employee Director (including for purposes hereof service as a Director
Emeritus or Advisory Director) terminates due to death or Disability or
concurrently with or following a Change in Control shall be deemed earned as of
the Recipient's last day of employment with or service to the Corporation or any
Subsidiary Company (provided, however, no such accelerated vesting shall occur
if a Recipient remains employed by or continues to serve as a Director
(including for purposes hereof service as a Director Emeritus or Advisory
Director) of at least one member of the Employer Group) and shall be distributed
as soon as practicable thereafter.

        

        (c)           Revocation
for Misconduct.  Notwithstanding anything hereinafter to the
contrary, the Board may by resolution immediately revoke, rescind and terminate
any Plan Share Award or Performance Share Award or portion thereof, previously
awarded under this Plan, to the extent Plan Shares have not been distributed
hereunder to the Recipient, whether or not yet earned, in the case of an
Employee who is discharged from the employ of the Corporation or any Subsidiary
Company for cause (as hereinafter defined).  Termination for cause
shall mean termination because of the Employee's 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.  Plan Share Awards granted to a
Non-Employee Director who is removed for cause pursuant to the Corporation's
Articles of Incorporation and Bylaws or the Bank's Charter and Bylaws shall
terminate as of the effective date of such removal.

        

        7.02         Distribution
of Dividends.  Any cash dividends (including special large and
nonrecurring dividends and including any that has the effect of a return of
capital to the Corporation's stockholders) or stock dividends declared in
respect of each unvested Plan Share Award (including any unearned Performance
Share Awards) will be held by the Trust for the benefit of the Recipient on
whose behalf such Plan Share Award (including a Performance Share Award) is then
held by the Trust, and such dividends or returns of capital, including any
interest thereon, will be paid out proportionately by the Trust to the Recipient
thereof as soon as practicable after the Plan Share Awards become
earned.

        

        7.03         Distribution
of Plan Shares.

        

        (a)           Timing of
Distributions:  General Rule.   Subject to the
provisions of Section 7.05 hereof, Plan Shares shall be distributed to the
Recipient or his Beneficiary, as the case may be, as soon as practicable after
they have been earned.

        

        (b)           Form of
Distributions.  All Plan Shares, together with any Shares
representing stock dividends, shall be distributed in the form of Common
Stock.  One share of Common Stock shall be given for each Plan Share
earned and distributable.  Payments representing cash dividends shall
be made in cash.

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

        (c)           Withholding.  The
Trustee may withhold from any cash payment or Common Stock distribution made
under this Plan sufficient amounts to cover any applicable withholding and
employment taxes, and if the amount of a cash payment is insufficient, the
Trustee may require the Recipient or Beneficiary to pay to the Trustee the
amount required to be withheld as a condition of delivering the Plan
Shares.  The Trustee shall pay over to the Corporation or any
Subsidiary Company which employs or employed such Recipient any such amount
withheld from or paid by the Recipient or Beneficiary.

        

        (d)           Restrictions
on Selling of Plan Shares.  Plan Share Awards
may not be sold, assigned, pledged or otherwise disposed of prior to the time
that they are earned and distributed pursuant to the terms of this
Plan.  Upon distribution, the Board or the Committee may require the
Recipient or his Beneficiary, as the case may be, to agree not to sell or
otherwise dispose of his distributed Plan Shares except in accordance with all
then applicable federal and state securities laws, and the Board or the
Committee may cause a legend to be placed on the stock certificate(s)
representing the distributed Plan Shares in order to restrict the transfer of
the distributed Plan Shares for such period of time or under such circumstances
as the Board or the Committee, upon the advice of counsel, may deem
appropriate.

        

        7.04        Voting of
Plan Shares.  After a Plan Share Award (other than
a  Performance Share Award) has been made, the Recipient shall be
entitled to direct the Trustee as to the voting of the Plan Shares which are
covered by the Plan Share Award and which have not yet been earned and
distributed to him pursuant to Section 7.03, subject to rules and procedures
adopted by the Committee for this purpose.  All shares of Common Stock
held by the Trust which have not been awarded under a Plan Share Award, shares
subject to Performance Share Awards which have not yet vested and shares which
have been awarded as to which Recipients have not directed the voting shall be
voted by the Trustee in its discretion.

        

        7.05        Performance
Awards

        

        (a)           Designation
of Performance Share Awards.  The
Committee may determine to make any Plan Share Award a Performance Share Award
by making such Plan Share Award contingent upon the achievement of a Performance
Goal or any combination of Performance Goals.  Each Performance Share
Award shall be evidenced by a written agreement (AAward
Agreement@), which
shall set forth the Performance Goals applicable to the Performance Share Award,
the maximum amounts payable and such other terms and conditions as are
applicable to the Performance Share Award.  Each Performance Share
Award shall be granted and administered to comply with the requirements of
Section 162(m) of the Code, or any successor thereto and with OTS Regulatory
Bulletin 27 and Thrift Activity Handbook Section 310 or any successors
thereto.

        

        (b)           Timing of
Grants.  Any Performance Share Award shall be made not later
than 90 days after the start of the period for which the Performance Share Award
relates and shall be made prior to the completion of 25% of such
period.  All determinations regarding the achievement of any
Performance Goals will be made by the Committee.  The Committee may
not increase during a year the amount of a Performance Share Award that would
otherwise be payable upon achievement of the Performance Goals but may reduce or
eliminate the payments as provided for in the Award
Agreement.

      

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      (c)           Restrictions
on Grants.  Nothing
contained in the Plan will be deemed in any way to limit or restrict the
Committee from making any Award or payment to any person under any other plan,
arrangement or understanding, whether now existing or hereafter in
effect.

      

      (d)           Rights of
Recipients.  Notwithstanding
anything to the contrary herein, a Participant who receives a Performance Share
Award payable in Common Stock shall have no rights as a stockholder until the
Common Stock is issued pursuant to the terms of the Award
Agreement.

      

      (e)           Transferability.  A
Participant’s interest in a Performance Share Award may not be sold, assigned,
transferred, pledged, or otherwise encumbered.

      

      (f)           Distribution.  No
Performance Share Award or portion thereof that is subject to the attainment or
satisfaction of a condition of a Performance Goal shall be distributed or
considered to be earned or vested until the Committee certifies in writing that
the conditions or Performance Goal to which the distribution, earning or vesting
of such Award is subject have been achieved.

      

      ARTICLE
VIII

      TRUST

      

      8.01           Trust.  The
Trustee shall receive, hold, administer, invest and make distributions and
disbursements from the Trust in accordance with the provisions of the Plan and
Trust and the applicable directions, rules, regulations, procedures and policies
established by the Committee pursuant to the Plan.

      

      8.02           Management
of Trust.  It is the intent of this Plan and Trust that the
Trustee shall have complete authority and discretion with respect to the
arrangement, control and investment of the Trust, and that the Trustee shall
invest all assets of the Trust in Common Stock to the fullest extent
practicable, except to the extent that the Trustee determines that the holding
of monies in cash or cash equivalents is necessary to meet the obligations of
the Trust.  In performing its duties, the Trustee shall have the power
to do all things and execute such instruments as may be deemed necessary or
proper, including the following powers:

      

         
(a)           To invest
up to one hundred percent (100%) of all Trust assets in Common Stock without
regard to any law now or hereafter in force limiting investments for trustees or
other fiduciaries.  The investment authorized herein may constitute
the only investment of the Trust, and in making such investment, the Trustee is
authorized to purchase Common Stock from the Corporation or from any other
source, and such Common Stock so purchased may be outstanding, newly issued, or
treasury shares.

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      (b)           To
invest any Trust assets not otherwise invested in accordance with (a) above, in
such deposit accounts, and certificates of deposit, obligations of the United
States Government or its agencies or such other investments as shall be
considered the equivalent of cash.

      

      (c)           To
sell, exchange or otherwise dispose of any property at any time held or acquired
by the Trust.

      

      (d)           To
cause stocks, bonds or other securities to be registered in the name of a
nominee, without the addition of words indicating that such security is an asset
of the Trust (but accurate records shall be maintained showing that such
security is an asset of the Trust).

      

      (e)           To
hold cash without interest in such amounts as may in the opinion of the Trustee
be reasonable for the proper operation of the Plan and Trust.

      

      (f)           To
employ brokers, agents, custodians, consultants and accountants.

      

      (g)           To
hire counsel to render advice with respect to its rights, duties and obligations
hereunder, and such other legal services or representation as it may deem
desirable.

      

      (h)           To
hold funds and securities representing the amounts to be distributed to a
Recipient or his Beneficiary as a consequence of a dispute as to the disposition
thereof, whether in a segregated account or held in common with other assets of
the Trust.

      

      Notwithstanding
anything herein contained to the contrary, the Trustee shall not be required to
make any inventory, appraisal or settlement or report to any court, or to secure
any order of court for the exercise of any power herein contained, or give
bond.

      

      8.03           Records
and Accounts.  The Trustee shall maintain accurate and detailed
records and accounts of all transactions of the Trust, which shall be available
at all reasonable times for inspection by any legally entitled person or entity
to the extent required by applicable law, or any other person determined by the
Board or the Committee.

      

      8.04           Expenses.  All
costs and expenses incurred in the operation and administration of this Plan
shall be borne by the Corporation or, in the discretion of the Corporation, the
Trust.

      

      8.05           Indemnification.  Subject
to the requirements of applicable laws and regulations, the Corporation shall
indemnify, defend and hold the Trustee harmless against all claims, expenses and
liabilities arising out of or related to the exercise of the Trustee's powers
and the discharge of its duties hereunder, unless the same shall be due to its
gross negligence or willful misconduct.

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      ARTICLE
IX

      DEFERRED
PAYMENTS

      

      9.01           Deferral
of Plan Shares.  Notwithstanding any other provision of this
Plan, any Recipient may elect, with the approval of the Committee and consistent
with any rules and regulations established by the Board, to defer the receipt of
Plan Shares granted hereunder in accordance with the Corporation’s Deferred
Compensation Plan.

      

      9.02           Timing of
Election.  The election to defer the delivery of any Plan
Shares must be made no later than the last day of the calendar year preceding
the calendar year in which the Recipient would otherwise have an unrestricted
right to receive such Shares.  Deferrals of eligible Plan Shares shall
only be allowed for Plan Share Awards for which all applicable restrictions
lapse while the Recipient is in active service with the Corporation or one of
the Subsidiary Companies. Any election to defer the proceeds from an eligible
Plan Share Award shall be irrevocable as long as the Recipient remains an
Employee or a Non-Employee Director.

      

      ARTICLE
X

      MISCELLANEOUS

      

      10.01          Adjustments
for Capital Changes.  The aggregate number of Plan Shares
available for distribution pursuant to the Plan Share Awards and the number of
Shares to which any unvested Plan Share Award relates shall be proportionately
adjusted for any increase or decrease in the total number of outstanding shares
of Common Stock issued subsequent to the Effective Date of the Plan resulting
from any split, subdivision or consolidation of shares or other capital
adjustment, the payment of a stock dividend or other increase or decrease in
such shares effected without receipt or payment of consideration by the
Corporation.  If, upon a merger, consolidation, reorganization,
liquidation, recapitalization or the like of the Corporation or of another
corporation, the shares of the Corporation’s Common Stock shall be exchanged for
other securities of the Corporation or of another corporation, then each
recipient of a Plan Share Award shall be entitled, subject to the conditions
herein stated, to receive such number of shares of Common Stock or amount of
other securities of the Corporation or such other corporation as were
exchangeable for the number of shares of Common Stock of the Corporation which
such Recipients would have been entitled to receive except for such
action.

      

      10.02          Amendment
and Termination of Plan.  The Board may, by resolution, at any
time amend or terminate the Plan, subject to any required stockholder approval
or any stockholder approval which the Board may deem to be advisable for any
reason, such as for the purpose of obtaining or retaining any statutory or
regulatory benefits under tax, securities or other laws or satisfying any
applicable stock exchange listing requirements.  The Board may not,
without the consent of the Recipient, alter or impair his Plan Share Award
except as specifically authorized herein.  Notwithstanding any other
provision of the Plan, this Plan may not be terminated prior to such time as all
outstanding Plan Share Awards granted to Recipients have been earned or
forfeited in accordance with the Plan.

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      10.03          Nontransferable.  Plan
Share Awards and Performance Share Awards and rights to Plan Shares shall not be
transferable by a Recipient, and during the lifetime of the Recipient, Plan
Shares may only be earned by and paid to a Recipient who was notified in writing
of an Award by the Committee pursuant to Section 6.02.  No Recipient
or Beneficiary shall have any right in or claim to any assets of the Plan or
Trust, nor shall the Corporation or any Subsidiary Company be subject to any
claim for benefits hereunder.

      

      10.04          Employment
or Service Rights.  Neither the Plan nor any grant of a Plan
Share Award, Performance Share Award or Plan Shares hereunder nor any action
taken by the Trustee, the Committee or the Board in connection with the Plan
shall create any right on the part of any Employee or Non-Employee Director to
continue in such capacity.

      

      10.05          Voting
and Dividend Rights.  No Recipient shall have any voting or
dividend rights or other rights of a stockholder in respect of any Plan Shares
covered by a Plan Share Award or Performance Share Award, except as expressly
provided in Sections 7.02, 7.04 and 7.05 above, prior to the time said Plan
Shares are actually earned and distributed to him.

      

      10.06          Governing
Law.  To the extent not governed by federal law, the Plan and
Trust shall be governed by the laws of the Commonwealth of
Pennsylvania.

      

      10.07          Effective
Date.  This Plan as originally adopted was effective as of the
Effective Date, and Awards may be granted hereunder no earlier than the date
this Plan was approved by the stockholders of the Corporation and prior to the
termination of the Plan.  Notwithstanding the foregoing or anything to
the contrary in this Plan, the implementation of this Plan was subject to the
approval of the Corporation's stockholders which occurred at a meeting held on
November 8, 2002.  The amendment and restatement of this Plan shall be
effective as of the date set forth in Section 1.01 above.

      

      10.08          Term of
Plan.  This Plan shall remain in effect until the earlier of
(i) ten (10) years from the Effective Date, (ii) termination by the Board, or
(iii) the distribution to Recipients and Beneficiaries of all the assets of the
Trust.

      

      10.09          Tax
Status of Trust.  It is intended that the trust established
hereby be treated as a Grantor Trust of the Corporation under the provisions of
Section 671 et
seq. of the
Code, as the same may be amended from time to time.

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

    

    IN WITNESS WHEREOF, the
Corporation has caused this Agreement to be executed by its duly authorized
officers and duly attested, and the Trustees of the Trust established pursuant
hereto have duly and validly executed this Agreement, all on this 28th day of
October, 2008.

     

    
      
        
          	WILLOW FINANCIAL BANCORP, INC.            	
                  TRUSTEES:

                
	 
      	 
      
	 
      	 
      
	
                	 
	
                  By:

                	
                  /s/ Donna M.
      Coughey

                	 
      	
                  /s/ Donna M.
      Coughey

                
	 
      	
                  Donna
      M. Coughey

                	
                  Donna
      M. Coughey

                
	 
      	
                  President
      and Chief Executive Officer

                	 
      
	
                	
                	
                
	 	 	 
	 
      	 
      	/s/
      Ammon J. Baus
	 
      	 
      	
                  Ammon
      J. Baus

                
	
                	
                	
                
	 	 	 
	
                	
                	
                
	 
      	 
      	
                  /s/ Neelesh
      Kalani

                
	 
      	 
      	
                  Neelesh
      Kalani

                
	
                	
                	
                

        

      

    

    13

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