Document:

exhibit104-102908.htm

     

    
      

      

    

    
      EXHIBIT
10.4

      WILLOW
FINANCIAL BANCORP, INC.

      

      AMENDED
AND RESTATED 2005 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 2005 Recognition and Retention
Plan (the “Plan”) and Trust (the “Trust”) upon the terms and conditions
hereinafter stated in this amended and restated 2005 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 (i)
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,
and (ii) replace certain cash based benefit plans previously provided by
the Corporation to Officers and Non-Employee Directors.  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           “Advisory
Director” means a person appointed to serve as an advisory or emeritus director
by the Board of either the Corporation or the Bank or the successors
thereto.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

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

      

      3.03           “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
or her estate.

      

      3.04           “Board”
means the Board of Directors of the Corporation.

      

      3.05           "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.

      

      3.06           “Code”
means the Internal Revenue Code of 1986, as amended.

      

      3.07           “Committee”
means the committee appointed by the Board pursuant to Article IV
hereof.

      

      3.08           “Common
Stock” means shares of the common stock, $0.01 par value per share, of the
Corporation.

      

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

      

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

      

      3.11           “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).

      

      3.12           “Effective
Date” means the day upon which the Board originally adopted this Plan, which was
September 27, 2005.

      
        
          
          

        

        
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      3.13           “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.

      

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

      

      3.15           “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

      

      3.16           “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 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 a Director, Advisory Director or Director Emeritus who is not an
Officer or Employee of the Corporation or any Subsidiary Company.

      

      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           “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 hereof.

      

      3.20           “Recipient”
means an Employee or Non-Employee Director or former Employee or Non-Employee
Director who receives a Plan Share Award under the Plan.

      

      3.21           “Retirement”
means:

      

      (a)           A
voluntary termination of employment after the later of (i) the one-year
anniversary of the date a Plan Share Award is granted or (ii) reaching 65 years
of age; provided, however, that the provisions of this subsection (a) will not
apply as long as a Recipient continues to serve as a Non-Employee
Director.

      

      (b)           With
respect to Non-Employee Directors, retirement means retirement from service on
the Board of Directors of the Corporation or a Subsidiary Company or any
successors thereto (including service as an Advisory Director to the Corporation
or any Subsidiary Company) after the later of (i) the one-year anniversary of
the date a Plan Share Award is granted or (ii) reaching 62 years of
age.

      

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

      
        
          
          

        

        
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      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 the Compensation Committee of the Board
or, if there is no Compensation Committee, 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.  Each member of the Committee shall be an
“independent director” as such term is defined in Rule 4200(a)(15) of the
Marketplace Rules of the Nasdaq Stock Market.  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           Revocation
for Misconduct.  Notwithstanding anything to the contrary
herein, the Board or the Committee may by resolution immediately revoke, rescind
and terminate any Plan Share Award, or portion thereof, to the extent not yet
vested, previously granted or awarded under this Plan to an Employee who is
discharged from the employ of the Corporation or a Subsidiary Company for cause,
which, for purposes hereof, 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.  Unvested Plan
Share Awards to a Non-Employee Director who is removed for cause pursuant to the
Corporation’s Articles of Incorporation or Bylaws or the Bank’s Articles of
Incorporation or Bylaws or the constituent documents of such other Subsidiary
Company on whose board he or she serves shall terminate as of the effective date
of such removal.

      
        
          
          

        

        
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      4.04           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 or she 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 or her
conduct was unlawful.

      

      4.05           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 shareholders as may
be required.   The Corporation shall not be required to issue or
deliver any certificates for shares of Common Stock prior to the completion of
any registration or qualification of or obtaining of consents or approvals with
respect to such shares under any federal or state law or any rule or regulation
of any government body, which the Corporation shall, in its sole discretion,
determine to be necessary or advisable.

      

      4.06           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 350,000 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 shareholders thereof) by the Trust with funds contributed by the
Corporation.  During the time this Plan remains in effect, Plan Share
Awards to Non-Employee Directors in the aggregate shall not exceed 30% of the
number of shares initially available under this Plan (subject to adjustment in
the event of, and consistent with, any adjustments pursuant to Section 10.01
hereof).

      
        
          
          

        

        
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      ARTICLE
VI

      ELIGIBILITY;
ALLOCATIONS

      

      6.01           Awards.  Plan
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 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 or her present and potential contributions to the growth and
success of the Corporation, his or her 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 to be granted to him or
her.

      

      6.02           Form of
Allocation.  As promptly as practicable after a determination
pursuant to Section 6.01 that a Plan 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 (except
that Plan Shares covered by the Award shall not be issued or transferred to a
Recipient earlier than the date upon which Plan Shares are earned and
vested).  The Board or the Committee shall maintain records as to all
grants of Plan 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 shall
become vested and earned by a Recipient at a rate no more rapid than one-third
(331⁄3%) of the aggregate number of Shares covered by the Award as of each annual
anniversary of the date of grant of the Award, with the actual vesting rate to
be determined by the Committee.  If the employment of an Employee or
service as a Non-Employee Director (including for purposes hereof service as an
Advisory Director) is terminated before the Plan Share Award has been completely
earned for any reason (except as specifically provided in subsection (b) 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.

      
        
          
          

        

        
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      (b)           Exception
for Terminations Due to Retirement, 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 an Advisory
Director or Director Emeritus) terminates due to Retirement, 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 or continues
to serve as a Director (including for purposes hereof service as an Advisory
Director or Director Emeritus) of at least one member of the Employer Group) and
shall be distributed as soon as practicable thereafter.  Furthermore,
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 earned as of
the effective date of a Change in Control.

      

      7.02           Distribution
of Dividends.  Any cash dividends, stock dividends or returns
of capital declared in respect of each unvested Plan Share Award will be held by
the Trust for the benefit of the Recipient on whose behalf such Plan 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 the Plan Share Award becomes earned.

      

      7.03           Distribution
of Plan Shares.

      

      (a)           Timing of
Distributions:  General Rule.  Except as set forth
below and subject to the provisions of Section 7.05 hereof, Plan Shares shall be
distributed to the Recipient or his or her Beneficiary, as the case may be, as
soon as practicable after they have been earned.  Notwithstanding
anything in the Plan to the contrary, in the case of a “key employee” of the
Corporation, any such distributions made on account of separation from service
(including Retirement but excluding death, disability and Change in Control) may
not be made earlier than six months after the date of the separation (or, if
earlier, upon the death of the Employee).  For this purpose, a “key
employee” is a key employee as defined in Section 416(i) of the
Code.

      

      (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 or by check.

      

      (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 or her
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.  All shares of Common
Stock held by the Trust shall be voted by the Trustee in its
discretion.

      

      7.05           Nontransferable.  Plan
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.

      

      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 appropriate 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.

      
        
          
          

        

        
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      (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
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).

      

      (d)           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.

      

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

      

      (f)           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.

      

      (g)           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.

      
        
          
          

        

        
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      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, regulations and deferred compensation plans established by the
Board, to defer beyond the scheduled vesting date 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 (or by such earlier date as may be required by
Section 409A of the Code).  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.  In the event receipt of any
Plan Shares are deferred pursuant hereto, any distribution from the deferred
compensation plans or arrangements established hereby with respect to such
deferred Plan Shares shall be only in shares of Common Stock.

      

      9.03           Section
83(b) Election.  No election under
Section 83(b) of the Code may be made with respect to the grant of any Plan
Share Award under this Plan.

      

      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, 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.

      
        
          
          

        

        
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      10.02      Amendment
and Termination of Plan.  The Board may, by resolution, at any
time amend or terminate the Plan, subject to any required shareholder approval
or any shareholder 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 or her Plan Share
Award except as specifically authorized herein.  Notwithstanding any
other provision of the Plan to the contrary, in the event that the Board
determines, after a review of Section 409A of the Code and all applicable
Internal Revenue Service guidance, that the Plan or any provision thereof or any
Plan Share Award is subject to Section 409A of the Code, the Board may further
amend the Plan or the Plan Share Award to make any changes required for it to
comply with Section 409A of the Code, in each case without the consent of any
Recipient.

      

      10.03      Employment
or Service Rights.  Neither the Plan nor any grant of a Plan
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.

      

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

      

      10.05       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.

      

      10.06       Effective
Date.  This Plan as originally adopted was effective as of the
Effective Date.  The amendment and restatement of this Plan shall be
effective as of the date set forth in Section 1.01 above.

      

      10.07        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.

      

      10.08        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.

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
      IN WITNESS WHEREOF, the
Corporation has caused this Agreement to be executed by its duly authorized
officers 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

            
	
            	
            	
            
	 	 	 

    

    12exhibit10_1.htm

    Exhibit
10.1

    

    EMPLOYMENT
AGREEMENT

    

    

    THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as
of October 25, 2008, is between Natural Gas Services Group, Inc., a Colorado
corporation (the "Company"), and
Stephen C. Taylor, an individual residing in Midland, Texas (the "Employee").

    

    WHEREAS, the Employee has been employed
by the Company since January 13, 2005, and presently serves as President, Chief
Executive Officer  and Chairman of the Board; and

    

    WHEREAS, the Company and the Employee
desire for the Company’s employment of the Employee be subject to the terms and
conditions set forth below;

    

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

    

    1.           Employment.  The
Company agrees to employ the Employee, and the Employee agrees to continue in
the employ of the Company, upon the terms and subject to conditions herein
provided.

    

    2.           Term.  The
employment of the Employee shall be for a period (referred to herein as the
"Employment
Term") commencing on the date of this Agreement and ending on the earlier
of:  (i) the effective date of any "Fundamental Change" with respect
to the Company or with respect to the Employee; (ii) the date of termination of
Employee's employment pursuant to Section 5 hereof; or (iii) the fifth
anniversary of the date of this Agreement.

    

    For purposes hereof, a "Fundamental Change"
shall occur with respect to:  (i) the Company on the effective date of
any dissolution, merger, consolidation, sale of all or substantially all of the
Company's assets, recapitalization or any other type of transaction which
results in 50% or more of the Company's common stock being changed into, or
exchanged for, different securities of the Company, as applicable, or other
securities or interests in other persons or entities, and (ii) the Employee on
the effective date of any change in the duties, functions, responsibilities or
authority of the Employee or any decrease in the base salary, eligible bonus
percentage or existing perquisites of the Employee in effect at that
time.

    

    3.           Position and
Duties.

    

    (a)         
Position.  During
the Employment Term, the Employee shall serve as President, Chief Executive
Officer and Chairman of the Board of the Company. In such capacity, the Employee
shall have such duties, functions, responsibilities, and authority customarily
appertaining to the position of president, chief executive officer and chairman
of the board of a corporation; subject, however, to applicable restrictions
imposed by the bylaws of the Company and to the directives of the Board of
Directors of the Company or its Compensation Committee.

    

    
      
        
        

      

      
        -1-

        
          

        

      

      
        Exhibit 10.1

      

    

     

    (b)           Duties.  During
the Employment Term, the Employee shall devote his full time, skill and
attention, and his best efforts during normal business hours to, and in
furtherance of, the business and affairs of the Company and its subsidiaries and
affiliates (collectively, the "Related Parties");
except for usual, ordinary and customary periods of vacation and absence due to
illness or other disability; provided, however, that Employee may, subject to
the Company's code of ethics and conflict of interest policies as in effect from
time to time, devote reasonable periods of time in connection with the following
activities, if such activities do not materially interfere with the performance
of Employee's duties and services hereunder and do not consume more than 10% of
Employee's working hours:

    

    (i)           fulfilling
speaking engagements; and

    

    (ii)           engaging
in charitable and community activities.

    

    4.           Compensation and Related
Matters.

    

    (a)           Base
Salary.  Effective January 14, 2008 the Company is paying the
Employee a base salary at the rate of $275,000.00 per annum. This base salary
shall be reviewed at least annually within 15 days of the anniversary date of
the Employee’s date of employment and increases in such base salary may be
granted at the sole discretion of the Board of Directors of the Company or its
Compensation Committee.  If from time to time the Board of Directors
of the Company or its Compensation Committee increases the Employee’s base
salary, the increased base salary amount shall become the minimum base salary
under this Agreement.

    

    (b)           Equity
Awards.  Company shall award Employee a minimum of 30,000 stock
options or equivalent equity awards each year on the anniversary of Employee’s
employment.

    

    (c)           Bonuses.  In
addition to base salary, the Employee shall be entitled to receive on an annual
basis during the Employment Term a cash bonus of up to 50% of the Employee’s
base salary, the amount of which will be based upon and subject to parameters
established by the Board of Directors of the Company or its Compensation
Committee. Higher bonus amounts may be awarded at the discretion of the Company
or its Compensation Committee. Any such bonuses shall be payable to the Employee
in the manner specified by the Board of Directors of the Company or its
Compensation Committee at the time any such bonus is awarded.

    

    (d)           Benefits.  The
Employee shall, during the Employment Term, be eligible to participate in such
insurance, medical and other employee benefit plans, whether now in place or
that may be implemented from time to time in the future, including, but not
limited to, retirement (401k) plans, of the Company which may be in effect, from
time to time, to the extent such plans are then generally available to all
employees or to senior management employees of the Company, with the following
considerations:

    

    (i)
Company shall pay all monthly premiums for any health insurance plans, including
but not limited to dental and vision plans, and similar benefit plans the
Employee chooses to participate in, provided that said plans are available
through the Company as a customary employee benefit.

    
 

    
      
        
        

      

      
        -2-

        
          

        

      

      
        Exhibit 10.1

      

    

     

     

    (ii)
Company shall pay premiums for comprehensive term life insurance for the
Employee in coverage amounts equal to three (3) times his annual base
salary.

    

    (iii)
Company shall pay all costs, fees (professional or otherwise), tests,
prescriptions, hospital charges and any other expenses incurred to cover the
total cost of a comprehensive annual physical examination for
Employee.

    

    (e) Director’s and Officer’s
Insurance  The Company shall provide Employee with comprehensive
insurance coverage in sufficient amounts relative to his duties as the Chief
Executive Officer and Chairman of the Board of a publicly-held and listed
company.

    

    (f)           Professional Organization
Dues.  During the Employment Term, the Company shall pay the
initiation fees and periodic dues for membership in any professional
organizations in which  the Employee is as of the date of this
Agreement
a  member,  or  which  are  otherwise  approved  by  the
Board of Directors of the Company or its Compensation Committee, and the Company
shall pay all charges and expenses, including reasonable travel expenses,
incurred by the Employee in connection with membership in such
organizations.

    

     (g)           Company
Vehicle.  The Company shall provide a vehicle of the Employee’s
choice for the Employee to use in connection with his employment obligations
with the Company (the value of any such vehicle shall be approved by the
Compensation Committee of the Board of Director’s of the Company). The Employee
shall be able to use the vehicle for personal use as long as said use is not
deemed excessive..

    
 

    (h)           Vacations.  The
Employee shall be entitled to five  (5) weeks of vacation each
calendar year, with pay, beginning with calendar year 2008.

    

    (i)           Expenses.  The
Employee will be reimbursed for reasonable expenses incurred in the performance
of his duties and services hereunder and in furtherance of the business of the
Company and the Related Parties upon presentation by the Employee of an itemized
account, accompanied by appropriate receipts satisfactory to the
Company.

    

    5.           Termination of
Employment.

    

    (a)           The
Employee’s employment hereunder:

    

    (i)           shall
automatically terminate upon the occurrence of any of the following: (A) the
mental or physical incapacity or inability of the Employee to perform his duties
for a consecutive period of one hundred twenty (120) days or a non-consecutive
period of one hundred eighty (180) days during any twelve month period; (B) the
death of the Employee; or (C) the voluntary resignation or retirement of the
Employee; and

    
      
         

      

      
        -3-

        
          

        

      

      
        Exhibit 10.1  

      

    

    

    (ii)           may
be terminated by the Company, at any time, for "cause", which shall mean by
reason of any of the following: (A) the Employee's conviction of, or plea of
nolo contendere to, any felony or to any crime or offense causing substantial
harm to the Company or any of the Related Parties (whether or not for personal
gain) or involving acts of theft, fraud, embezzlement, moral turpitude or
similar conduct; (B) malfeasance in the conduct of the Employee’s duties,
including, but not limited to, (1) willful and intentional misuse or diversion
of any of the Company’s or Related Parties' funds, (2) embezzlement, or (3)
fraudulent or willful and material misrepresentations or concealments on any
written reports submitted to the Company or any of the Related Parties, (C)
material failure to perform the duties of the Employee’s employment or material
failure to follow or comply with the reasonable and lawful written directives of
the Board of Directors of the Company, provided, however, that the
Employee shall have been informed, in writing, of such material failure and
given a period of not more than 60 days to remedy same; or (D) a material breach
by the Employee of the provisions of this Agreement (including, without
limitation, any breach of Section 3(b) of this Agreement).

    

    (b)           If
the Employee's employment is terminated by reason of any of the circumstances
set forth in Sections 5(a)(i)(C) or 5(a)(ii), the Employee shall not be entitled
to receive any of the benefits set forth in Section 5(c), unless otherwise
authorized by the Board of Directors of the Company, and all obligations of the
Company and the Employee (except for restrictions pertaining to confidential or
proprietary information) under this Agreement shall automatically
terminate.

    

    (c)           If
the Employee’s employment is terminated as the result of a Fundamental Change
with respect to the Company or with respect to the Employee or for any reason
other than as set forth in Sections 5(a)(i)(C) or 5(a)(ii), the Employee shall,
subject to the provisions of Section 5(d), be entitled to receive from the
Company a severance benefit consisting of the following:  (i) a single
lump sum cash payment equal to the amount owed through the remaining term of
this Agreement at the Employee’s base salary as in effect at the date of the
Employee’s termination of employment; provided, however, that such amount shall
not be less than 300% of such annual base salary, which severance benefit shall
be paid no later than thirty (30) days following the Employee’s termination of
employment; (ii) all stock options, restricted stock and/or equity awards of any
kind, whether for common stock, preferred stock, warrants or any other
securities of the Company, owned or due and owing to Employee, shall immediately
vest 100% to Employee on the date of the Employee’s termination of employment;
(iii)  the health care and insurance benefits (e.g., health, dental,
vision, life, disability, etc.) being provided by the Company to the Employee on
the date of the Employee’s termination of employment shall continue in place at
no cost to the Employee for a period of thirty-six (36) months after such
termination date; (iv) the Employee shall be entitled to receive any individual
bonuses or individual incentive compensation not yet paid but due and owing to
the Employee under the Company’s compensation plan or plans for the years prior
to the year of the Employee’s termination of employment, which amounts shall be
paid to the Employee in a single lump sum cash payment no later than thirty (30)
days following the date of the Employee’s termination of employment; (v) the
Employee shall be entitled to receive any bonuses or individual incentive
compensation not yet paid to the Employee under the Company’s compensation plan
or plans equal to the amount owed through the remaining term of this Agreement,
but not less than 300% of the annual bonus or incentive compensation amount,
which bonuses or individual incentive 

     

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        Exhibit
10.1

      

    

     

     

    compensation
shall be calculated as if the Employee had remained employed by the Company
during that period and earned at the maximum award level, and shall be paid in a
single lump sum cash payment to the Employee within 30 days of Employee’s
termination; and (vi)  the Employee shall be entitled to or shall
immediately vest 100% in any and all other compensation plans, bonus plans or
incentive plans, including any owned or due and owing, that Employee
participated in or contributed to at the date of the Employee’s termination of
Employment but that is not covered by (ii) through (v) preceding.

     

    (d)           The
severance benefit paid to the Employee pursuant to Section 5(c) shall be in
consideration of the Employee’s continuing obligations hereunder after such
termination, including, without limitation, the Employee’s obligations under
Section 6.  Further, as a condition to the receipt of such severance
benefit, the Company, in its sole discretion, may require the Employee to first
execute a release, in a form mutually agreeable between the Employee and the
Company, releasing the Company and all Related Parties, and their officers,
directors, employees, and agents, from any and all claims and from any and all
causes of action of any kind or character, including, but not limited to, all
claims and causes of action arising out of the Employee’s employment with the
Company or any of the Related Parties or the termination of the Employee’s
employment.  The performance of the Company’s obligations under
Section 5(c), including the Company’s payment of the severance benefit, shall
constitute full settlement of all such claims and causes of
action.  The Employee’s rights under Section 5(c) are the Employee’s
sole and exclusive rights against the Company and the Related Parties and the
Company’s sole and exclusive liability to the Employee under this Agreement, in
contract, tort, or otherwise, for the termination of the Employee’s employment
with the Company.  The decision as to whether “cause” exists for
termination of the employment relationship of the Employee with the Company and
whether and as of what date the Employee has become incapacitated in the manner
described in Section 5(a)(i) are delegated to the Board of Directors of the
Company for determination.  If the Employee or the Employee’s legal
representative, as the case may be, desire to dispute any determination made by
the Board of Directors of the Company under this Section 5(d), the Employee or
his legal representative, as the case may be, must notify (a “Dispute
Notification”) the Company of such desire within thirty (30) days of the
Employee’s receipt of notification of such a determination by the
Board.  Within sixty (60) days of the Company’s receipt of a Dispute
Notification, the parties shall mediate the dispute in front of an independent
mediator acceptable to both the Employee and the Company and shall work in good
faith to resolve the dispute at such mediation.

     

    6.           Business Opportunities and
Intellectual Property; Personal Investments; Covenant not to Compete;
Confidentiality.  The Employee acknowledges that in the course
of his employment by the Company and performance of services on behalf of the
Company he will become privy to various business opportunities, economic and
trade secrets and relationships of the Company and the Related Parties.
Therefore, in consideration of this Agreement and the consummation of the
Transaction, the Employee hereby agrees as provided below in this
Section

    
      
         

      

      
        -5-

        
          

        

      

      
        Exhibit 10.1  

      

    

    

    

    (a)           Business Opportunities and
Intellectual Property. The Employee:

    

    (i)           shall
promptly disclose to the Company all business opportunities (including, without
limitation, those relating to the business of manufacturing, fabricating,
selling, leasing and maintaining of natural gas compressors or the design and
manufacture of natural gas flare systems, components and ignition systems)
developed by the Employee during the Employment Term, or originated by any third
party and brought to the attention of the Employee during the Employment Term,
together with information relating thereto (herein collectively called "Business
Opportunities");

    

    (ii)           shall
promptly disclose to the Company any ideas, inventions, discoveries, processes,
designs, methods, substances, articles, computer programs and improvements,
whether or not patentable or copyrightable (all of the foregoing being
hereinafter collectively called "Intellectual
Property"), which the Employee discovers, conceives, invents, creates or
develops, alone or with others, during the Employment Term, if such discovery,
conception, invention, creation or development (A) occurs in the course of the
Employee’s employment with the Company, or (B) occurs with the use of any of the
Company’s or the Related Parties’ time, materials or facilities, or (C) in the
opinion of the Board of Directors of the Company, relates or pertains in any way
to the Company’s or the Related Parties' purposes, activities or
affairs;

    

    (iii)                      hereby
assigns and agrees to assign to the Company and its successors, assigns or
designees, all of the Employee’s right, title and interest in and to all
Business Opportunities and Intellectual Property that the Employee is obligated
to disclose to the Company pursuant hereto; and

    

    (iv)                      acknowledges
and agrees that all Business Opportunities and Intellectual Property constitute
the exclusive property of the Company and accordingly agrees that Employee will
not (directly or indirectly through any family members), and will not permit any
of his controlled affiliates to, (A) invest or otherwise participate alongside
the Company or the Related Parties in any Business Opportunities, (B) invest or
otherwise participate in any business or activity relating to a Business
Opportunity, regardless of whether the Company or any of the Related Parties
ultimately participates in such business or activity, or (C) use for any purpose
other than on behalf of the Company or the Related Parties, any information
pertaining to Business Opportunities.

    

    (b)           Personal
Investments.  Employee agrees that during the Employment Term,
Employee (whether in his own name or in the name of any family members or made
by Employee's controlled affiliates) will not make any investments with or in
any person or entity (other than the Company) which relates to the business of
manufacturing, fabricating, selling, leasing and maintaining of natural gas
compressors or the design and manufacture of natural gas flare systems,
components and ignition systems.

    
      
         

      

      
        -6-

        
          

        

      

      
        Exhibit 10.1  

      

    

    

    (c)           Confidentiality
Obligations.  Employee agrees that during the Employment Term
and the Noncompetition Period, Employee will not knowingly use, publish,
disseminate or otherwise disclose, directly or indirectly, to any person other
than the Company or the Related Parties and their respective officers, directors
and employees, any Business Opportunities, Intellectual Property and any other
information heretofore or hereafter acquired, developed or used by the Company
or any of the Related Parties relating to their business or their operations,
properties, prospects, employees, customers, consultants, vendors, joint venture
partners or co-investors which constitutes proprietary or confidential
information of the Company or any of the Related Parties ("Confidential
Information"), including, without limitation, any Confidential
Information contained in any customer files, contract files, production records,
maintenance records, reports and related data, memoranda, notes, records,
drawings, manuals, correspondence, financial and accounting information,
customer lists, statistical data and compilations, patents, copyrights,
trademarks, trade names, inventions, formulae, methods, processes, agreements,
contracts, manuals or any other documents relating to the business of the
Company or any of the Related Parties (collectively, the "Company’s Business
Records"), but excluding any Confidential Information which has become
part of common knowledge or understanding in the natural gas compressor industry
or otherwise in the public domain (other than from disclosure by Employee in
violation of this Agreement), provided, however, this
paragraph (c) shall not be applicable to the extent Employee is required to
testify in a judicial or regulatory proceeding pursuant to the order of a judge
or administrative law judge after Employee requests that such Confidential
Information be preserved.

    

    (d)           Non-Compete
Covenant.  Employee agrees that during the Employment Term,
Employee will not knowingly:

    

    (i)           engage
or participate in any manner, whether directly or indirectly through any family
member or as an employee, employer, consultant, agent, principal, partner, more
than one percent shareholder, officer, director, licensor, lender, lessor or in
any other individual or representative capacity, in any business activity that
relates to (A) the business of manufacturing, fabricating, selling, leasing and
maintaining of natural gas compressors, (B) the design and manufacture of
natural gas flare systems, components and ignition systems, (C) installing and
servicing flare stacks and related ignition and control devices or (D) in any
other business or activity related to the natural gas compressor industry that
is in competition in any manner whatsoever with the business of any of the
Company or the Related Parties.  The covenant and restrictions in this
Section 6(d) pertain to the geographic areas comprised of (x) Midland and Ector
Counties, Texas, and all counties adjacent to Midland and Ector Counties, Texas,
and (y) Tulsa County, Oklahoma, and all counties adjacent to Tulsa County,
Oklahoma (all of such counties being collectively referred to herein as, the
"Noncompete
Area"); provided, however, such
covenant and restrictions shall not preclude the Employee from engaging or
participating in the above referenced business activities on behalf of any
company that conducts a majority of its business operations outside of the
Noncompete Area and whose principal offices are situated outside of the
Noncompete Area, or from:

    
      
         

      

      
        -7-

        
          

        

      

      
        Exhibit 10.1  

      

    

    

    (A)           making
investments in securities of oil and gas companies, oil and gas service
companies, and natural gas compressor companies which are registered on a
national stock exchange, if the aggregate amount owned by Employee and all
family members and affiliates does not exceed one percent of such company's
outstanding securities; or

    

    (B)           maintaining
his personal investments (whether in his own name or in the name of any family
members), if such personal investments and controlled affiliates do not engage
in any business activity that relates to the business of manufacturing,
fabricating, selling, leasing and maintaining of natural gas compressors, or the
design and manufacture of natural gas flare systems, components and ignition
systems, or the installation and servicing of flare stacks and related ignition
and control devices; or

    

    (ii)           actively
solicit, directly or indirectly, any employee (or person who within the
preceding ninety (90) days was an employee) of the Company or any of the Related
Parties or any other person who is under contract with or employed by the
Company or any of the Related Parties, to terminate his or her employment by, or
contractual relationship with, such person or to refrain from extending or
renewing the same (upon the same or new terms) or to become employed by or to
enter into contractual relations with any Persons other than such person or to
enter into a relationship with a competitor of the Company or any of the Related
Parties.

    

    (e)           For
purposes of this Agreement, the term "Noncompetition
Period" means the period commencing on the date Employee ceases to be
employed hereunder and ending on the second anniversary of such
date.

    

    (f)           The
invalidity or non-enforceability of this Section 6 in any respect shall not
affect the validity or enforceability of this Section 6 in any other respect or
of any other provision of this Agreement. If any provision of this Section 6
shall be held invalid or unenforceable by a court of competent jurisdiction by
reason of the geographic or business scope or the duration thereof, such
invalidity or unenforceability shall attach only to the scope or duration of
such provision and shall not affect or render invalid or unenforceable any other
provision of this Agreement, and, to the fullest extent permitted by law, this
Agreement shall be construed as if the geographic or business scope or the
duration of such provision had been more narrowly drafted so as not to be
invalid or unenforceable.

    

    (g)           Employee
acknowledges that the Company's remedy at law for any breach of the provisions
of this Section 6 is and will be insufficient and inadequate and that the
Company shall be entitled to equitable relief, including by way of temporary and
permanent injunction, in addition to any remedies the Company may have at
law.

    

    (h)           The
provisions of this Section 6 shall survive termination of this
Agreement.

    
      
         

      

      
        -8-

        
          

        

      

      
        Exhibit 10.1  

      

    

    

    (i)           
The representations and covenants contained in this Section 6 on the part of the
Employee will be construed as ancillary to and independent of any other
provision of this Agreement. The provisions of this Section 6 shall continue to
be binding upon the Employee in accordance with their terms, notwithstanding the
termination of the Employee's employment hereunder for any reason or the
Company’s breach of any of its obligations under this Agreement.

    

    (j)           The
parties to this Agreement agree that the limitations contained in this Section 6
with respect to time, geographical area and scope of activity are reasonable.
However, if any court shall determine that the time, geographical area or scope
of activity of any restriction contained in this Section 6 is unenforceable, it
is the intention of the parties that such restrictive covenant set forth herein
shall not thereby be terminated but shall be deemed amended to the extent
required to render it valid and enforceable.

    

    7.           Business
Records.  The Employee agrees to promptly deliver to the
Company, upon termination of his employment hereunder, or at any other time when
the Company so requests, all of the Company’s Business Records (and all copies
thereof and therefrom). The Employee confirms that all of the Company’s Business
Records (and all copies thereof and therefrom) constitute the exclusive property
of the Company and the Related Parties. The obligation of confidentiality set
forth in Section 6 shall continue notwithstanding the Employee's delivery of any
such documents to the Company. The provisions of this Section 7 shall continue
in effect notwithstanding termination of the Employee's employment hereunder for
any reason.

    

    8.           Divisibility of
Agreement.  If any term, condition or provision of this
Agreement is for any reason rendered void, all remaining terms, conditions and
provisions shall remain and continue as valid and enforceable obligations of the
parties hereto.

    

    9.           Notices.  Any
notices or other communications required or permitted to be sent hereunder shall
be in writing and shall be duly given if personally delivered or sent postage
pre-paid by certified or registered mail, return receipt requested, as
follows:

    

    
      	 
      	
               (a)

            	 
      	
               If
      to Employee:

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
               By:

            	 
      	
               Stephen
      C. Taylor

            
	 
      	 
      	 
      	 
      	
              4901
      Foxboro Ct.

            
	 
      	 
      	 
      	 
      	
              Midland,
      Texas 79705

            

    

    

    
      	 
      	
               (b)

            	 
      	
               If
      to Company:

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              By:

            	 
      	
              Natural
      Gas Services Group, Inc.

            
	 
      	 
      	 
      	 
      	
              508
      W. Wall St., Suite 550

            
	 
      	 
      	 
      	 
      	
              Midland,
      Texas 79701

            
	 
      	 
      	 
      	 
      	
              Attn:
      William F. Hughes, Jr.

            

    

    

    
      
         

      

      
        -9-

        
          

        

      

      
        Exhibit 10.1  

      

    

    

    Either
party may change his or its address for the sending of notice to such party by
written notice to the other party sent in accordance with the provisions
hereof.

    

    10.         Complete
Agreement.  This Agreement contains the entire understanding of
the parties with respect to the employment of Employee and supersedes all prior
arrangements or understandings with respect thereto and all oral or written
employment agreements or arrangements between the Company (and any of its
subsidiaries) and Employee. This Agreement may not be altered or amended except
by a writing, duly executed by the party against whom such alteration or
amendment is sought to be enforced.

    

    11.        
Assignment.  This
Agreement is personal and non-assignable by Employee. It shall inure to the
benefit of any corporation or other entity with which the Company shall merge or
consolidate or to which the Company shall lease or sell all or substantially all
of its assets and may be assigned by the Company to any affiliate of the Company
or to any corporation or entity with which such affiliate shall merge or
consolidate or which shall lease or acquire all or substantially all of the
assets of such affiliate.

    

    12.         Counterparts. This
Agreement may be executed in counterparts, each of which shall be an original
and all of which together shall constitute one and the same
instrument.

    

    

    IN WITNESS WHEREOF, each of the parties
hereto has executed this Agreement in multiple counterparts as of the day and
year first above written.

    

    
      	 
      	 
      	
              COMPANY:

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              NATURAL
      GAS SERVICES GROUP, INC

               

            
	 
      	 
      	
              By:

            	 
      	
              /s/
      William F. Hughes

            
	 
      	 
      	 
      	 
      	
              William
      F. Hughes, Jr.

            
	 
      	 
      	 
      	 
      	
              Chairman
      of the Compensation Committee

              of
      the Board of Directors

            

    

    

    
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
               EMPLOYEE:

            
	 
      	 
      	 
      
	 
      	 
      	
              By:

            	 
      	
              /s/
      Stephen C. Taylor

            
	 
      	 
      	 
      	 
      	
               Stephen
      C. Taylor

            

    

    

    
      
         

      

      
        -10-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}]]