Document:

Exhibit
10.11

 

WILLOW
FINANCIAL BANCORP, INC.

AMENDED AND RESTATED

2007 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

ARTICLE 1 — PURPOSE

 

THIS AMENDED AND RESTATED
2007 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (this “Plan”) is hereby adopted by
Willow Financial Bancorp, Inc. (the “Corporation”) as of October 23, 2007.

 

The purpose of the Plan is
to aid in retaining the services of a select group of officers and highly
compensated employees of the Corporation, its subsidiaries and any successors
thereto, and to motivate them to contribute to the growth and profits of the
Corporation. This Plan as amended and restated shall be effective as of July 1,
2007 (the “Effective Date”).

 

The Plan is intended to be an unfunded
plan qualifying as a “top hat” plan for purposes of Title I of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), and for purposes
of the Internal Revenue Code of 1986, as amended (the “Code”). The Plan as
originally adopted was effective as of April 1, 2006 (the “Prior Plan”). However,
the Corporation suspended the Prior Plan in 2006, and no benefits were accrued
under the Prior Plan for any periods prior to July 1, 2007. The Plan is being
amended and restated in order to make certain changes to the participants in
the Plan, to reduce the amount of benefits previously contemplated and to comply
with the requirements of Section 409A of the Code and the final regulations
issued by the Internal Revenue Service (the “IRS”).

 

ARTICLE 2
— DEFINITIONS

 

For purposes hereof,
unless otherwise clearly apparent from the context, the following terms shall
have the indicated meanings:

 

2.1.                              Additions: Interest on Annual Credits, compounded monthly at an
annualized rate of 5.5%. Additions shall be attributed to each Participant’s
Employer Credit Account from the date upon which the Employer Credit Account
first has a positive balance until the date upon which the Corporation
determines the final payment of benefits to a Participant or his Beneficiary
pursuant to Article 4. The Committee may elect to utilize a different interest
rate in future years in its discretion. 

 

2.2.                              Annual Credit: The amount the Corporation will credit
on behalf of a Participant in relation to his Base Credit and Performance-Based
Credit, as appropriate, for each year of his participation in the Plan.

 

2.3.                              Base Credit: The portion of the Annual Credit based
upon a Participant’s salary and years to Retirement from the Corporation. The
amount of the Base Credit and the date upon which it will be attributed to the
Employer Credit Account are specified in Schedule A. This amount may vary from
Participant to Participant and from year to year as determined by the Committee.
Furthermore, since the value of the Base Credit is predicated upon the value of
the Participant’s annual salary when he joined the Plan and

 

 

adjusted by an assumed rate of inflation of 3.5
percent per year, the Committee may deem it appropriate to re-calculate the
benefit for one or more Participants if it deems, in its discretion, that the
Participant’s salary has been substantially modified.

 

2.4.                              Beneficiary: Any person or persons (including,
without limitation, the trustees of any testamentary or inter vivos trust), as
designated from time to time in writing pursuant to Article 5, to whom any
benefits may be payable upon the death of a Participant.

 

2.5.                              Cause: Behavior of a Participant which constitutes any of
the following:

 

a.               Willfully engaging in gross misconduct with regard to
the Corporation which is materially injurious to the Corporation,

 

b.              Gross negligence in the performance of the Participant’s
duties and responsibilities which is materially injurious to the Corporation,

 

c.               Refusal to follow proper and achievable written
direction of the Board of Directors, provided that this shall not be Cause if
the Participant in good faith believed the direction to be illegal, unethical
or immoral and so notifies the Board of Directors,

 

d.              Being convicted of (or pleading nolo contendere to) a
felony involving financial impropriety (or any other crime which would
materially interfere with his service),

 

e.               Willfully breaching any material obligations under any
agreement with the Corporation without proper justification,

 

f.                 Material fraud or dishonesty with regard to the
Corporation (other than good faith expense account disputes),

 

g.              Continuous and material refusal to attempt to perform
the Participant’s responsibilities and duties after written notice, and

 

h.              Entering into competition with the Corporation in any
line of business in which the Corporation was involved during the Participant’s
employment.

 

2.6.                              Change in Control:  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.

 

2.7.                              Committee: The Compensation Committee of the Board of Directors
of the Corporation, or such other persons as may be selected by the
Compensation Committee or the Board of Directors to administer the Plan. The
Committee may assign some of the routine administrative functions to any
department of the Corporation or another organization at its discretion.

 

2.8.                              Corporation: Willow Financial Bancorp, Inc.
(formerly known as Willow Grove Bancorp, Inc.), a Pennsylvania corporation, and
any successor thereof, including any

 

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affiliated company that adopts this Plan with the
consent of the Board of Directors of the Corporation.

 

2.9.                              Disability:  Disability
means the Participant (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.

 

2.10.                        Employer Credit Account: The sum of Annual Credits which are described
in Schedule A, attached hereto and incorporated herein by reference, and
attributable to a Participant plus Additions and less withdrawals and
distributions on such amounts. The Corporation shall maintain a bookkeeping
account to reflect and track each Participant’s Employer Credit Account, as
adjusted from time to time.

 

2.11.                        Participant: Any officer or highly compensated
employee of the Corporation designated by the Committee to be eligible for
participation in the Plan, who has executed an application for participation
pursuant to Section 3.1, and who is participating in this Plan from time to
time.

 

2.12.                        Performance-Based Credit: The portion of the Annual Credit based
upon the Corporation’s performance each year. The Committee will establish two
levels of performance objectives each year. If the performance objectives are
achieved, then the Participant will earn a Performance-Based Credit equal to
(a) 15% of the Participant’s base salary for the applicable year if the first
level of performance objectives is achieved, or (b) 30% of the Participant’s
base salary for the applicable year if the second level of performance
objectives is achieved. The performance objectives may vary from Participant to
Participant and from year to year as determined by the Committee. If earned,
the Performance-Based Credit will be attributed to the Employer Credit Account
of the applicable Participant no later than the 120th day following
the end of the Corporation’s applicable fiscal year.

 

2.13.                        Plan Year: January 1 through December 31, provided that the
first Plan Year shall be from the Effective Date through December 31, 2007.

 

2.14.                        Retirement: The attainment by a Participant of both age
sixty-two and five years of participation in the Plan. For the Participants listed
in Schedule A as of the Effective Date, the participation in the Plan shall
commence as of July 1, 2007.

 

2.15.                        Separation from Service: A “Separation from Service” shall mean
a termination of the Participant’s services (whether as an employee or as an
independent contractor) to the Corporation for reasons
other than death or Disability. Whether a Separation from Service has occurred
shall be determined in
accordance with the requirements of Section 409A of the Code based
on whether the facts and circumstances indicate that the

 

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Corporation and the Participant reasonably anticipated
that no further services would be performed after a certain date or that the
level of bona fide services the Participant would perform after such date
(whether as an employee or as an independent contractor) would permanently
decrease to no more than twenty percent (20%) of the average level of bona fide
services performed (whether as an employee or an independent contractor) over
the immediately preceding thirty-six (36) month period.

 

2.16.                        Specified Employee: 
A person
who is a specified employee as defined in the final regulations issued under
Section 409A of the Code.

 

ARTICLE
3 — DEFERRED COMPENSATION

 

3.1.                              Eligibility
and Participation: Eligibility to commence participation in this Plan shall
be restricted to those officers or highly compensated employees selected by the
Committee in its sole discretion who qualify as “select management or highly
compensated employees” as defined in Sections 201(2), 301(a)(3), and 401(a)(1)
of ERISA, provided, however, that any such person shall timely complete all
forms necessary for participation in the Plan under this Section.

 

Any individual so
selected shall first become a Participant in the Plan by filing with the
Corporation a written application for participation in a form satisfactory to
the Corporation, within thirty days of the date that he or she is first
eligible to participate in the Plan. If such application is not filed within
such thirty-day period, such individual shall not thereafter be permitted to
participate in the Plan until the next calendar year following the date upon
which he first became eligible to participate. Upon selecting an individual to
become a Participant in the Plan, the Committee shall notify the individual in
writing of the date of eligibility and shall provide the individual with a
written application for participation.

 

3.2.                              Termination
Event: A Participant shall continue to be eligible to participate in the
Plan until the earliest date on which any of the following events (“a
Termination Event”) occurs:

 

(a)                      There occurs
a Change in Control as defined in Section 2.6;

 

(b)                     There occurs
a Separation from Service as defined in Section 2.15;

 

(c)                      The Participant
dies;

 

(d)                     There occurs
a Disability as defined in Section 2.9; or

 

(e)                      The Plan is
terminated in accordance with Section 6.1(b) of the Plan.

 

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ARTICLE
4 — BENEFITS

 

4.1.                                   Benefit:
Should a Participant have a Termination Event, other than a Separation from
Service for Cause, he shall be entitled to receive a termination benefit which
shall be the vested portion of his or her Employer Credit Account (the “Termination
Benefit”).

 

4.2.                                   Cause:
Should a Participant have a Separation from Service for Cause, he shall forfeit
any Termination Benefit.

 

4.3.                                   Distribution
Options:

 

(a) General:  Pursuant to a Participant’s Termination
Benefit Election (as defined herein), the Termination Benefit attributable to
such Participant shall be paid either (i) in a lump sum, (ii) in five equal
annual installments, or (iii) in ten equal annual installments (each, a “Termination
Benefit Election”). If a Participant fails to make a Termination Benefit
Election, he shall receive his benefit in a lump sum.

 

(i)  Annual Installments:  Should annual installments be selected, the
first such payment shall be made on the sixtieth day following the Termination
Event; provided, however, that if the installments are to be paid to a Specified
Employee due to a Separation from Service, the first installment shall be
delayed until the first day of the month immediately following the lapse of six
months after the date of Separation from Service. Each payment thereafter shall
be made on the annual anniversary of the original payment date.

 

(ii)  Lump Sum Distribution: Should a lump
sum distribution be selected, the Termination Benefit shall be made on the
sixtieth day following the Termination Event; provided, however, that if the
lump sum is to be paid to a Specified Employee due to a Separation from
Service, the lump sum shall be delayed until the first day of the month
immediately following the lapse of six months after the date of Separation from
Service.

 

(b)           Prior
Elections. Any payment elections made by the Participant before the
Effective Date shall continue in effect until such time as the Participant
makes a subsequent payment election and such election becomes effective as set
forth below. If no prior payment election was made, then the current payment
election shall be deemed to be a lump sum payment.

 

(c)           Initial
Elections for New Participants. Any new Participant in the Plan may make a
Termination Benefit Election within thirty (30) days of first becoming eligible
to participate in the Plan. If no payment election is made within such time
period, then the payment election shall be deemed to be a lump sum payment.

 

(d)           Transitional
Elections Prior to 2009. On or before December 31, 2008, if the Participant
wishes to change his Termination Benefit Election, the Participant may do so by
completing a payment election form approved by the Corporation, provided that
any such election (i) must be made at least 12 months prior to the occurrence
of a Separation from Service or the Participant’s death or Disability, (ii) must be made at least 12 months

 

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before the date on which
benefit payments are scheduled to commence, (iii) does not cause a payment that
would otherwise be made in the year of the election to be delayed to a later
year, and (iv) does not accelerate into the year in which the election is made
a payment that is otherwise scheduled to be made in a later year.

 

(e)           Changes
in Payment Elections After 2008. On or after January 1, 2009, if a
Participant wishes to change his Termination Benefit Election, the Participant
may do so by completing a payment election form approved by the Corporation,
provided that any such election (i) must be made prior to the occurrence of a
Separation from Service or the Participant’s death or Disability, (ii) must be
made at least 12 months before the date on which any benefit payments as of a
fixed date or pursuant to a fixed schedule are scheduled to commence, (iii)
shall not take effect until at least 12 months after the date the election is
made and accepted by the Corporation, and (iv) for payments to be made other
than upon death, must provide an additional deferral period of at least five
years from the date such payment would otherwise have been made (or in the case
of any installment payments treated as a single payment, five years from the
date the first amount was scheduled to be paid). For purposes of this Agreement
and clause (iv) above, all installment payments under this Agreement shall be
treated as a single payment.

 

4.4.                                   Limited
Cashouts: Notwithstanding any Termination Benefit Election, if the
Termination Benefit is not greater than the applicable dollar amount under
Section 402(g)(1)(B) of the Code ($15,500 for 2007), then the Termination
Benefit shall be paid in a lump sum, provided that the lump sum payment results
in the termination and liquidation of the Participant’s entire interest under
the Plan, including all agreements, methods, programs or other arrangements
with respect to which deferrals of compensation are treated as having been
deferred under a single plan as provided under Section 1.409A-1(c)(2) of the
regulations issued by the IRS.

 

4.5.                                   Vesting:
Each Year’s Annual Credit and Additions will be subject to its own vesting schedule
and shall vest at a rate of 25% for each calendar year, commencing as of the
December 31st next following the date of the Annual Credit or Addition. For
example, Annual Credits attributed to a Participant’s Employer Credit Account as
of July 1, 2007 will be 25% vested on December 31, 2007, 50% vested on December
31, 2008, 75% percent vested on December 31, 2009 and 100% vested on December
31, 2010. If a Termination Event occurs, Participants will forfeit any unvested
benefits accrued as of the date of the applicable Termination Event, except
that all unvested benefits shall become fully vested if the Termination Event
is due to (i) a Change in Control, (ii) a Separation from Service due to
Retirement, (iii) death, or (iv) Disability. In the event the Plan is
terminated due to Section 6.1 hereof, no further vesting shall occur after the
date of termination of the Plan.

 

ARTICLE
5 — BENEFICIARY

 

5.1                                 Designation:
At the time participation in the Plan commences, or at any later date, each
Participant shall designate on a form satisfactory to the Corporation one or
more Beneficiaries to receive any benefits which may become payable hereunder
in the event

 

6

 

of his death (Beneficiary Designation). A Participant
can change any such Beneficiary Designation at any time prior to his death upon
written notice to the Corporation.

 

5.2                                 Subsequent
Beneficiary Designations: If a Participant shall have made more than one
Beneficiary Designation, the Beneficiary Designation most recently filed with
the Corporation prior to the time of the Participant’s death shall govern.

 

5.3                                 No
Beneficiary Designation: If any amounts under the Plan become payable
following a Participant’s death at a time when no Beneficiary Designation is
applicable or when no Beneficiary is in existence, such payments shall be made
in a lump sum to such Participant’s surviving spouse, or if none, such amounts
shall be paid to such Participant’s estate.

 

ARTICLE
6 — MISCELLANEOUS

 

6.1           Amendment and Termination:

 

(a)  General.           The Corporation, acting through the
Committee, reserves the right to amend, in whole or in part, in writing, or to
terminate this Plan (including Schedule A hereto) at any time and in its sole
discretion, with or without notice; provided, however, that no such action
shall reduce the amount of a Participant’s vested Termination Benefit prior to
the date of any such amendment or termination. Upon termination of this Plan,
those Participants that are receiving Termination Benefits pursuant to the
provisions of Article 4 and those Beneficiaries receiving benefits pursuant to
the provisions of Article 5 shall continue to receive such benefits in
accordance with this Plan. The Participants who are not receiving Termination
Benefits will be entitled to receive only the vested portion of their Employer
Credit Account as calculated on the effective date of the Plan termination,
with such amount to be paid in accordance with this Plan. A termination of the
Plan will not be a distributable event, except in the three circumstances set
forth in Section 6.1(b) below.

 

(b)           Termination.          Under no circumstances may the Plan
permit the acceleration of the time or form of any payment under the Plan prior
to the payment events specified herein, except as provided in this Section 6.1(b).
The Corporation may, in its discretion, elect to terminate the Plan in any of
the following three circumstances and accelerate the payment of the entire
unpaid balance of each Participant’s vested benefits as of the date of such
payment in accordance with Section 409A of the Code:

 

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

 

7

 

(ii)                                  the
Plan is irrevocably terminated at a time that is not proximate to a downturn in
the financial health of the Bank and/or the Corporation and (1) all
arrangements sponsored by the Bank and/or the Corporation that would be
aggregated with the Plan under Treasury Regulation ‘1.409A-1(c) if a
Participant had deferrals of compensation under such arrangements are
terminated, (2) no payments are made within 12 months of the date the
Corporation takes all necessary action to irrevocably terminate the
arrangements, other than payments that would be payable under the terms of the
arrangements if the termination had not occurred; (3) all payments are made
within 24 months of the date the Bank and/or the Corporation take all necessary
action to irrevocably terminate the arrangements; and (4) neither the Bank nor
the Corporation adopts a new arrangement that would be aggregated with the Plan
or any terminated arrangement under Treasury Regulation ‘1.409A-1(c) if a
Participant participated in both arrangements, at any time within three years
following the date the Bank and/or the Corporation take all necessary action to
irrevocably terminate the Plan or aggregated arrangement, or

 

(iii)                               the
Plan is terminated within 12 months of a corporate dissolution taxed under
Section 331 of the Code, or with the approval of a bankruptcy court pursuant to
11 U.S.C. §503(b)(1)(A), provided that the amounts deferred by each Participant
under the Plan are included in the Participant’s gross income in the later of
(1) the calendar year in which the termination of the Plan occurs, (2) the
first calendar year in which the amount is no longer subject to a substantial
risk of forfeiture, or (3) the first calendar year in which the payment is
administratively practicable.

 

6.2                                 Insurance:
The Corporation may purchase one or more insurance policies on the life of a
Participant, as a means of providing, in whole or in part, for the payment of
benefits hereunder. However, in such event neither such Participant, his
designated Beneficiary, nor any other beneficiary shall have any rights
whatsoever therein or in the proceeds therefrom. The Corporation (or any “rabbi
trust” (as described in Section 6.6) formed in connection with the Plan) shall
be the sole owner and beneficiary of any such insurance policy and shall
possess and may exercise all incidents of ownership therein. No such policy,
policies or other property shall be held in any trust for a Participant or any
other person or as collateral security for any obligation of the Corporation
hereunder. This Plan shall under no circumstances be deemed to constitute a
contract of insurance.

 

6.3                                 No
Contract of Employment: The Plan shall under no circumstance be deemed to
have any effect upon the terms or conditions of employment of any employee of
the Corporation whether or not he is a Participant hereunder. Neither the
offering of the Plan, the payment of any expenses, costs or benefit amounts
associated with the Plan, nor any documents published in connection with the
Plan shall be construed as having created a contract of employment between a
Participant and the Corporation, nor shall

 

8

 

any of such actions or
documents affect any right that the Corporation may have to terminate the
service of such person at will.

 

6.4                                 Benefits
not Transferable: Benefits under this Plan shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge or
encumbrance by any Participant or Beneficiary, and any attempt to do so shall
be null and void. Benefits under this Plan shall not be subject to or liable
for the debts, contracts, liabilities, engagements or torts of any Participant
or any Beneficiary, nor may the same be subject to attachment or seizure by any
creditor of any Participant or any Beneficiary under any circumstances.

 

6.5           Determination of Benefits:

 

(a)                                  General. The Committee may require any person claiming
benefits under the Plan (“Claimant”) to submit an application therefor in
writing to the Claims Administrator or to any officer of the Corporation,
together with such other documents and information as the Committee may
require.

 

(b)                                 Claims. Claims for benefits, benefit determinations, appeals
and reviews of any adverse benefit determination and all associated
notifications shall, at a minimum, comply with Section 503 of ERISA and the
applicable provisions of 29 C.F.R. § 2560.503-1 (“ERISA Regulations”).

 

(c)                                  Claims Administrator. The Claims Administrator shall be
designated by the Committee. The Committee reserves the right to change the
Claims Administrator from time to time and to designate a special Claims
Administrator when deemed necessary to avoid a conflict of interest.

 

(d)                                 Notification of Benefit Determination. The Claims Administrator will notify
the Claimant of a benefit determination in writing within a reasonable time. Notification
that a claim is wholly or partially denied will normally be given no later than
90 days after receipt of the claim. The notice shall (1) specify the reasons
for the adverse decision, (2) refer to the specific provisions of the Plan on
which the decision is based, (3) describe any additional material necessary to
complete the claim and the reasons that such material is necessary, (4)
describe the appeal and review procedures and the applicable time limits, and
(5) inform the claimant of the right to bring a civil action following review. Should
special circumstances require an extension of time for processing the claim,
written notice of the extension shall be furnished to the Claimant prior to the
expiration of the initial ninety-day period. The notice shall indicate the
special circumstances requiring an extension of time and the date by which a
final decision is expected to be rendered. In no event shall the period of the
extension exceed ninety days from the end of the initial ninety-day period. Claims
not acted upon within the time prescribed herein shall be deemed denied for
purposes of proceeding to the review stage.

 

9

 

(e)                                  Review. A Claimant is entitled to have an adverse benefit
determination reviewed by the Committee (the “Named Fiduciary”). The request
for review must be in writing and filed with the Claims Administrator no later
than 60 days following the Claimant’s receipt of the adverse determination. The
Claimant may submit written comments and other information and documents
relating to the claim, and have reasonable access to and receive copies of all
documents and information relevant to the claim. The Claimant may request a
hearing. The Claims Administrator will promptly forward the request for review
and the claim file to the Named Fiduciary. The decision of the Named Fiduciary
shall be made promptly, and not later than sixty days after the Named Fiduciary’s
receipt of a request for review, unless special circumstances require an
extension of time for processing. In such a case, a decision shall be rendered
as soon as possible, but not later than one hundred twenty days after receipt
of the request for review.

 

(f)                                    Named Fiduciary. The Named Fiduciary shall not be the
Claims Administrator nor subordinate to the Claims Administrator. The Board of
Directors reserves the right to change the Named Fiduciary from time to time,
and to designate a special Named Fiduciary for appeals when deemed necessary.

 

(g)                                 Review Procedure. The Named Fiduciary has the discretion
to decide all questions regarding relevance and reasonable access. In addition,
the Named Fiduciary has the discretion as to whether a hearing shall be held. The
Named Fiduciary will afford no deference to the Claims Administrator’s
decision, and will ensure a full and fair review de novo.

 

(h)                                 Notification of Benefit Determination on
Review. The Named
Fiduciary’s decision will be in writing and sent to the Claims Administrator.
The Claims Administrator will then notify the Claimant either by hand delivery
or by first class mail within a reasonable time, and normally not later than 60
days after receipt of the claim for review. If the Named Fiduciary issues an
adverse benefit decision to the Participant or his Beneficiary, the decision
shall (1) specify the reasons for the decision, (2) refer to specific Plan
provisions on which the decision was based, (3) inform the Claimant of the
right to review all information reviewed by the Named Fiduciary, even
information not relied on in making the decision, and (4) inform the Claimant
of the right to bring a civil action.

 

(i)                                     Exhaustion of Remedies. No legal action for benefits under the
Plan may be brought unless and until the Claimant has exhausted his remedies
under this Section 6.5.

 

6.6                                 No
Trust:  No action by the Corporation
or its Board of Directors under this Plan shall be construed as creating a
trust, escrow or other secured or segregated fund or other fiduciary
relationship of any kind in favor of any Participant or Beneficiary or any
other persons otherwise entitled to benefits under the Plan. The status of each
Participant and any Beneficiary with respect to any liabilities assumed by the
Corporation hereunder shall be solely that of unsecured creditors of the
Corporation. The Plan constitutes a

 

10

 

mere promise by the
Corporation to make benefit payments in the future. Any insurance policy or any
other asset acquired or held by the Corporation in connection with liabilities
assumed by it hereunder shall not be deemed to be held under any trust, escrow
or other secured or segregated fund or other fiduciary relationship of any kind
for the benefit of a Participant or Beneficiary or to be security for the
performance of the obligations of the Corporation, but shall be and remain a
general, unpledged, unrestricted asset of the Corporation at all times subject
to the claims of general creditors of the Corporation. Notwithstanding the
foregoing, the Corporation may transfer assets, including any insurance
policies, to a grantor trust of the type known as a “rabbi trust” with the
Corporation as grantor and owner of such trust, provided that the terms of such
trust comply with Section 409A of the Code.

 

6.7                                 Plan
Administration: The Plan shall be administered by the Committee. The
Committee shall have the exclusive authority, sole discretion and
responsibility for all matters in connection with the operation and
administration of the Plan. The Committee’s powers and duties shall include,
but not be limited to, the following: (a) responsibility for the compilation
and maintenance of all records necessary in connection with the Plan; (b)
authorizing the payment of all benefits under and expenses of the Plan; (c)
authority to engage such legal, accounting and other professional services as
it may deem proper; (d) discretionary authority to interpret the Plan; and (e)
discretionary authority to determine eligibility for benefits under the Plan
and to resolve all issues of fact and law in connection with such determination.
Decisions by the Committee shall be final and binding upon all parties.

 

The Committee, from time
to time, may allocate to other persons or organizations any of its rights,
powers, and duties with respect to the operation and administration of the Plan.
Any such allocation shall be reviewed from time to time by the Committee;
shall, unless the Committee specifies otherwise, carry such discretionary
authority as the Committee possesses regarding the matter; and shall be
terminable upon such notice as the Committee, in its sole discretion, deems
reasonable and prudent under the circumstances.

 

6.8                                 Satisfaction
of Claims: Any payment to a Participant or Beneficiary or the legal
representative of either, in accordance with the terms of this Plan shall to
the extent thereof be in full satisfaction of all claims such person may have
against the Corporation. The Corporation may require such payee, as a condition
to such payment, to execute a receipt and release therefore in such form as
shall be determined by the Corporation.

 

6.9                                 Governing
Law: The Plan shall be construed, administered, and governed in all
respects in accordance with ERISA and, to the extent not preempted by ERISA,
the laws of the Commonwealth of Pennsylvania without regard to applicable
conflicts of law or choice of law principles. By electing to participate in the
Plan, each Participant on behalf of himself and his beneficiaries irrevocably
and unconditionally (a) submits to the exclusive personal jurisdiction of the
United States federal courts and the Commonwealth of Pennsylvania state courts
located in Montgomery County, Pennsylvania (“Pennsylvania Courts”) with respect
to any lawsuit, claim or cause of action arising under or with respect to this
Plan; (b) agrees that the Pennsylvania Courts shall have exclusive subject

 

11

 

matter jurisdiction over
any such lawsuit, claim or cause of action; (c) agrees that venue with respect
to any such lawsuit, claim or cause of action is proper and most convenient in
such Pennsylvania Courts; and (d) agrees not to assert or raise any objection
to jurisdiction or venue in the Pennsylvania Courts. BY ELECTING TO PARTICIPATE
IN THE PLAN, EACH PARTICIPANT, ON BEHALF OF HIMSELF AND HIS BENEFICIARIES,
IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY AND ALL ACTIONS OR
PROCEEDINGS BROUGHT WITH RESPECT TO ANY PROVISION OF THIS PLAN AND/OR WITH
RESPECT TO ANY CLAIMS ARISING OUT OF, OR RELATED TO, THIS PLAN, to the extent
not preempted by ERISA.

 

6.10                           Gender
and Number:  Words used herein in the
masculine, feminine or neuter gender shall be construed as though they were
also used in another gender in all cases where they would so apply. Words used
herein in the singular or plural form shall be construed as though they were
also used in the other form in all cases where they would so apply.

 

6.11                           Severability:
In the event that a court of competent jurisdiction determines that any
provision of the Plan is in violation of any statute or public policy, only
those provisions of the Plan that violate such statute or public policy shall
be stricken. All provisions of the Plan that do not violate any statute or
public policy shall continue in full force and effect. Further, any court order
striking any provision of the Plan shall modify the stricken terms as narrowly
as possible to give as much effect as possible to the intentions of the
Corporation in establishing the Plan.

 

6.12                           Indemnification:
The Corporation agrees to and shall indemnify and hold harmless each
Indemnified Person (as hereinafter defined), to the full extent permitted by
law and the Corporation’s Articles of Incorporation and Bylaws, from and
against all claims, losses, damages, causes of action, suits, and liability of
every kind, including all expenses of litigation, court costs and reasonable
attorney’s fees and expenses, incurred in connection with the Plan. “Indemnified
Person” shall mean each director, officer, Committee member, Claims
Administrator or employee of the Corporation acting as a fiduciary of the Plan.

 

6.13                           Expenses:
The expenses of administering the Plan and any grantor trust described in
Section 6.6 shall be borne by the Corporation.

 

6.14                           Successors
and Assigns: This Plan shall be binding on and inure to the benefit of the
Corporation and the Participants and their Beneficiaries, and their respective
heirs and assigns.

 

6.15                           Captions.
The captions of this Plan are descriptive only and do not affect the intent or
interpretation of the Plan.

 

6.16                           Notices.
Any notice required or permitted to be given hereunder shall be in writing sent
by either personal delivery, overnight delivery, or United Sates registered or
certified mail, return receipt requested, all of which shall be properly
addressed with postage or

 

12

 

delivery charges prepaid,
to the Committee or Participant at their respective addresses described below,
or at such other addresses as either the Corporation or Participant may
hereafter designate to the other in writing:

 

	
  To the Committee:

  	
   

  	
  Compensation Committee
  of the Board of Directors

  
	
   

  	
   

  	
  Willow Financial
  Bancorp, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
  170 South Warner Road

  	
   

  	
   

  
	
   

  	
   

  	
  Wayne, Pennsylvania
  19087

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Re:

  	
  Willow Financial
  Bancorp, Inc. Amended

  
	
   

  	
   

  	
   

  	
   

  	
  and Restated 2007
  Supplemental Executive Retirement

  
	
   

  	
   

  	
   

  	
   

  	
  Plan

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  To any Participant:

  	
   

  	
  To the Participant’s
  last known address as shown in the

  
	
   

  	
   

  	
  Corporation’s Human
  Resource Department records

  
							

 

Notices sent by personal delivery shall be deemed
given upon actual receipt. Notices sent by overnight delivery shall be deemed
given on the next business day. Notices sent via United States registered or
certified mail shall be deemed given two business days from mailing.

 

ACKNOWLEDGED:

 

Willow Financial Bancorp,
Inc.

 

 

	
  /s/ Donna M. Coughey

  	
   

  	
  October 23, 2007

  	
   

  
	
  By

  	
   

  	
  Date

  

 

 

 

13

 

 

Schedule A

 

	
  Name:

  	
   

  	
  Donna
  Coughey

  
	
  Date of Birth:

  	
   

  	
  3/15/1950

  
	
  Starting Salary:

  	
   

  	
  $350,000

  
	
  Retirement Age:

  	
   

  	
  62

  
	
  Annual Credit Date:

  	
   

  	
  July
  1

  
	
  Estimated Annual Retirement
  Benefit:

  	
   

  	
  $118,499

  

 

	
  Year

  	
   

  	
  Annual Credit

  	
   

  
	
  2007

  	
   

  	
  144,202

  	
   

  
	
  2008

  	
   

  	
  152,133

  	
   

  
	
  2009

  	
   

  	
  160,500

  	
   

  
	
  2010

  	
   

  	
  169,328

  	
   

  
	
  2011

  	
   

  	
  178,641

  	
   

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Annual Credit is described in the Willow
Financial Bancorp, Inc. Supplemental Retirement Plan document.  The estimated annual retirement benefit is
based upon continued employment with the Corporation until Retirement.  The actual benefit amount will vary depending
upon date of Termination of Service, vesting schedule, and other factors.

 

 

 

1

 

 

Schedule
A

 

	
  Name:

  	
   

  	
  Joseph Crowley

  	
   

  
	
  Date of Birth:

  	
   

  	
  3/29/1962

  	
   

  
	
  Starting Salary:

  	
   

  	
  $222,000

  	
   

  
	
  Retirement Age:

  	
   

  	
  62

  	
   

  
	
  Annual Credit Date:

  	
   

  	
  July 1

  	
   

  
	
  Estimated Annual Retirement Benefit:

  	
   

  	
  $112,273

  	
   

  

 

	
  Year

  	
   

  	
  Annual Credit

  	
   

  
	
  2007

  	
   

  	
  21,950

  	
   

  
	
  2008

  	
   

  	
  23,158

  	
   

  
	
  2009

  	
   

  	
  24,431

  	
   

  
	
  2010

  	
   

  	
  25,775

  	
   

  
	
  2011

  	
   

  	
  27,193

  	
   

  
	
  2012

  	
   

  	
  28,688

  	
   

  
	
  2013

  	
   

  	
  30,266

  	
   

  
	
  2014

  	
   

  	
  31,931

  	
   

  
	
  2015

  	
   

  	
  33,687

  	
   

  
	
  2016

  	
   

  	
  35,540

  	
   

  
	
  2017

  	
   

  	
  37,494

  	
   

  
	
  2018

  	
   

  	
  39,557

  	
   

  
	
  2019

  	
   

  	
  41,732

  	
   

  
	
  2020

  	
   

  	
  44,027

  	
   

  
	
  2021

  	
   

  	
  46,449

  	
   

  
	
  2022

  	
   

  	
  49,004

  	
   

  
	
  2023

  	
   

  	
  34,395

  	
   

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Annual Credit is described in the Willow
Financial Bancorp, Inc. Supplemental Retirement Plan document.  The estimated annual retirement benefit is
based upon continued employment with the Corporation until Retirement.  The actual benefit amount will vary depending
upon date of Termination of Service, vesting schedule, and other factors.

 

 

 

2

 

 

Schedule
A

 

	
  Name:

  	
   

  	
  Allen Wagner

  	
   

  
	
  Date of Birth:

  	
   

  	
  9/19/1950

  	
   

  
	
  Starting Salary:

  	
   

  	
  $162,660

  	
   

  
	
  Retirement Age:

  	
   

  	
  62

  	
   

  
	
  Annual Credit Date:

  	
   

  	
  July 1

  	
   

  
	
  Estimated Annual Retirement Benefit:

  	
   

  	
  $57,326

  	
   

  

 

	
  Year

  	
   

  	
  Annual Credit

  	
   

  
	
  2007

  	
   

  	
  66,870

  	
   

  
	
  2008

  	
   

  	
  70,548

  	
   

  
	
  2009

  	
   

  	
  74,428

  	
   

  
	
  2010

  	
   

  	
  78,522

  	
   

  
	
  2011

  	
   

  	
  82,841

  	
   

  
	
  2012

  	
   

  	
  14,776

  	
   

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Annual Credit is described in the Willow
Financial Bancorp, Inc. Supplemental Retirement Plan document.  The estimated annual retirement benefit is
based upon continued employment with the Corporation until Retirement.  The actual benefit amount will vary depending
upon date of Termination of Service, vesting schedule, and other factors.

 

 

3

 

Schedule
A

 

	
  Name:

  	
   

  	
  Ammon Baus

  	
   

  
	
  Date of Birth:

  	
   

  	
  5/31/1949

  	
   

  
	
  Starting Salary:

  	
   

  	
  $190,000

  	
   

  
	
  Retirement Age:

  	
   

  	
  63

  	
   

  
	
  Annual Credit Date:

  	
   

  	
  July 1

  	
   

  
	
  Estimated Annual Retirement Benefit:

  	
   

  	
  $62,153

  	
   

  

 

	
  Year

  	
   

  	
  Annual Credit

  	
   

  
	
  2007

  	
   

  	
  75,647

  	
   

  
	
  2008

  	
   

  	
  79,808

  	
   

  
	
  2009

  	
   

  	
  84,197

  	
   

  
	
  2010

  	
   

  	
  88,828

  	
   

  
	
  2011

  	
   

  	
  93,649

  	
   

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Annual Credit is described in the Willow
Financial Bancorp, Inc. Supplemental Retirement Plan document.  The estimated annual retirement benefit is
based upon continued employment with the Corporation until Retirement.  The actual benefit amount will vary depending
upon date of Termination of Service, vesting schedule, and other factors.

 

 

4

 

 

Schedule
A

 

	
  Name:

  	
   

  	
  Matthew
  Kelly

  	
   

  
	
  Date of Birth:

  	
   

  	
  7/31/1963

  	
   

  
	
  Starting Salary:

  	
   

  	
  $181,330

  	
   

  
	
  Retirement Age:

  	
   

  	
  62

  	
   

  
	
  Annual Credit Date:

  	
   

  	
  July
  1

  	
   

  
	
  Estimated Annual Retirement
  Benefit:

  	
   

  	
  $99,376

  	
   

  

 

	
  Year

  	
   

  	
  Annual Credit

  	
   

  
	
  2007

  	
   

  	
  15,042

  	
   

  
	
  2008

  	
   

  	
  15,870

  	
   

  
	
  2009

  	
   

  	
  16,742

  	
   

  
	
  2010

  	
   

  	
  17,663

  	
   

  
	
  2011

  	
   

  	
  18,635

  	
   

  
	
  2012

  	
   

  	
  19,660

  	
   

  
	
  2013

  	
   

  	
  20,741

  	
   

  
	
  2014

  	
   

  	
  21,882

  	
   

  
	
  2015

  	
   

  	
  23,085

  	
   

  
	
  2016

  	
   

  	
  24,355

  	
   

  
	
  2017

  	
   

  	
  25,694

  	
   

  
	
  2018

  	
   

  	
  27,108

  	
   

  
	
  2019

  	
   

  	
  28,599

  	
   

  
	
  2020

  	
   

  	
  30,171

  	
   

  
	
  2021

  	
   

  	
  31,831

  	
   

  
	
  2022

  	
   

  	
  33,582

  	
   

  
	
  2023

  	
   

  	
  35,429

  	
   

  
	
  2024

  	
   

  	
  37,377

  	
   

  
	
  2025

  	
   

  	
  39,352

  	
   

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Annual Credit is described in the Willow
Financial Bancorp, Inc. Supplemental Retirement Plan document.  The estimated annual retirement benefit is
based upon continued employment with the Corporation until Retirement.  The actual benefit amount will vary depending
upon date of Termination of Service, vesting schedule, and other factors.

 

 

 

5

 

Schedule
A

 

	
  Name:

  	
   

  	
  Christopher
  Blakely

  	
   

  
	
  Date of Birth:

  	
   

  	
  4/4/1964

  	
   

  
	
  Starting Salary:

  	
   

  	
  $129,688

  	
   

  
	
  Retirement Age:

  	
   

  	
  62

  	
   

  
	
  Annual Credit Date:

  	
   

  	
  July
  1

  	
   

  
	
  Estimated Annual Retirement
  Benefit:

  	
   

  	
  $70,473

  	
   

  

 

	
  Year

  	
   

  	
  Annual Credit

  	
   

  
	
  2007

  	
   

  	
  10,953

  	
   

  
	
  2008

  	
   

  	
  11,555

  	
   

  
	
  2009

  	
   

  	
  12,191

  	
   

  
	
  2010

  	
   

  	
  12,861

  	
   

  
	
  2011

  	
   

  	
  13,568

  	
   

  
	
  2012

  	
   

  	
  14,315

  	
   

  
	
  2013

  	
   

  	
  15,102

  	
   

  
	
  2014

  	
   

  	
  15,933

  	
   

  
	
  2015

  	
   

  	
  16,809

  	
   

  
	
  2016

  	
   

  	
  17,733

  	
   

  
	
  2017

  	
   

  	
  18,709

  	
   

  
	
  2018

  	
   

  	
  19,738

  	
   

  
	
  2019

  	
   

  	
  20,823

  	
   

  
	
  2020

  	
   

  	
  21,969

  	
   

  
	
  2021

  	
   

  	
  23,177

  	
   

  
	
  2022

  	
   

  	
  24,452

  	
   

  
	
  2023

  	
   

  	
  25,796

  	
   

  
	
  2024

  	
   

  	
  27,215

  	
   

  
	
  2025

  	
   

  	
  21,500

  	
   

  

 

 

 

 

 

 

 

 

 

 

 

 

 

The Annual Credit is described in the Willow
Financial Bancorp, Inc. Supplemental Retirement Plan document.  The estimated annual retirement benefit is
based upon continued employment with the Corporation until Retirement.  The actual benefit amount will vary depending
upon date of Termination of Service, vesting schedule, and other factors.

 

 

 

6

 

 

Schedule
A

 

	
  Name:

  	
   

  	
  Tom Saunders

  	
   

  
	
  Date
  of Birth:

  	
   

  	
  2/1/1961

  	
   

  
	
  Starting
  Salary:

  	
   

  	
  $200,000

  	
   

  
	
  Retirement
  Age:

  	
   

  	
  62

  	
   

  
	
  Annual
  Credit Date:

  	
   

  	
  July 1

  	
   

  
	
  Estimated
  Annual Retirement Benefit:

  	
   

  	
  $97,443

  	
   

  

 

	
  Year

  	
   

  	
  Annual Credit

  	
   

  
	
  2007

  	
   

  	
  21,581

  	
   

  
	
  2008

  	
   

  	
  22,767

  	
   

  
	
  2009

  	
   

  	
  24,020

  	
   

  
	
  2010

  	
   

  	
  25,341

  	
   

  
	
  2011

  	
   

  	
  26,734

  	
   

  
	
  2012

  	
   

  	
  28,205

  	
   

  
	
  2013

  	
   

  	
  29,756

  	
   

  
	
  2014

  	
   

  	
  31,393

  	
   

  
	
  2015

  	
   

  	
  33,119

  	
   

  
	
  2016

  	
   

  	
  34,941

  	
   

  
	
  2017

  	
   

  	
  36,863

  	
   

  
	
  2018

  	
   

  	
  38,890

  	
   

  
	
  2019

  	
   

  	
  41,029

  	
   

  
	
  2020

  	
   

  	
  43,286

  	
   

  
	
  2021

  	
   

  	
  45,666

  	
   

  
	
  2022

  	
   

  	
  28,260

  	
   

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Annual Credit is described in the Willow
Financial Bancorp, Inc. Supplemental Retirement Plan document.  The estimated annual retirement benefit is
based upon continued employment with the Corporation until Retirement.  The actual benefit amount will vary depending
upon date of Termination of Service, vesting schedule, and other factors.

 

 

 

7Exhibit 10.12

 

WILLOW FINANCIAL BANCORP, INC.

AMENDED AND RESTATED 1999 STOCK OPTION PLAN

 

ARTICLE I

ESTABLISHMENT OF THE PLAN

 

Willow Financial
Bancorp, Inc. (the “Corporation”), formerly known as Willow Grove Bancorp,
Inc., hereby amends and restates its 1999 Stock Option Plan (as amended and
restated, the “Plan”) upon the terms and conditions hereinafter stated, with
the amendment and restatement effective as of October 23, 2007.

 

ARTICLE II

PURPOSE OF THE PLAN

 

The purpose of
this Plan is to improve the growth and profitability of the Corporation and its
Subsidiary Companies by providing Employees and Non-Employee Directors with a
proprietary interest in the Corporation as an incentive to contribute to the
success of the MHC, the Corporation and the Subsidiary Companies, and rewarding
Employees and Non-Employee Directors for outstanding performance. All Incentive
Stock Options issued under this Plan are intended to comply with the
requirements of Section 422 of the Code and the regulations thereunder, and all
provisions hereunder shall be read, interpreted and applied with that purpose
in mind. Each recipient of an 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 and/or exercise of an Award
hereunder.

 

ARTICLE III

DEFINITIONS

 

3.01        “Award” means an Option or Stock Appreciation
Right granted pursuant to the terms of this Plan.

 

3.02        “Bank” means Willow Financial Bank, the wholly
owned subsidiary of the Corporation.

 

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 or the Bank, a change
in the effective control of the Corporation or the Bank or a change in the
ownership of a substantial portion of the assets of the Corporation or the
Bank, 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 a committee of two or more
directors appointed by the Board pursuant to Article IV hereof each of whom
shall be a Non-Employee Director as defined in Rule 16b-3(b)(3)(i) of the
Exchange Act or any successor thereto and within the meaning of Section 162(m)
of the Code and the regulations promulgated thereunder.

 

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

 

3.08        “Disability” means in the case of any Optionee
that the Optionee: (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 MHC, the Corporation, the Bank or any Subsidiary Company, or is an Officer
of the MHC, the Corporation, the Bank or any Subsidiary Company, but not including
directors who are not also Officers of or otherwise employed by the MHC, the
Corporation, the Bank or any Subsidiary Company.

 

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

 

3.12        “Fair Market Value”
shall be equal to the fair market value per share of the Corporation’s Common
Stock on the date an Award is granted. For purposes hereof, the Fair Market
Value of a share of Common Stock shall be the closing sale price of a share of
Common Stock on the date in question (or, if such day is not a trading day in
the U.S. markets, on the nearest preceding trading day), as reported with
respect to the principal market (or the composite of the markets, if more than
one) or national quotation system in which such shares are then traded, or if
no such closing prices are reported, the mean between the high bid and low
asked prices that day on the principal market or national quotation system then
in use. Notwithstanding the foregoing, if the Common Stock is not readily
tradable on an established securities market for purposes of Section 409A of
the Code, then the Fair Market Value shall be determined by means of a
reasonable valuation method that takes into consideration all available
information material to the value of the Corporation and that otherwise
satisfies the requirements applicable under Section 409A of the Code and the
regulations thereunder.

 

2

 

3.13        “Incentive Stock Option” means any Option
granted under this Plan which the Board intends (at the time it is granted) to
be an incentive stock option within the meaning of Section 422 of the Code or
any successor thereto.

 

3.14        “MHC” means Willow Grove Mutual Holding
Company, the former parent mutual holding company of the Corporation.

 

3.15        “Non-Employee Director” means a member of the
Board of the Corporation or Board of Directors of either the MHC or the Bank or
any successor thereto, including an advisory director or a director emeritus of
the Boards of the Corporation and/or the MHC or the Bank, who is not an Officer
or Employee of the Corporation, the MHC, the Bank or any Subsidiary Company.

 

3.16        “Non-Qualified Option” means any Option granted
under this Plan which is not an Incentive Stock Option.

 

3.17        “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 the MHC and the issuance of the capital
stock of the Bank to the Corporation.

 

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

 

3.19        “Option” means a right granted under this Plan
to purchase Common Stock.

 

3.20        “Optionee” means an Employee or Non-Employee Director
or former Employee or Non-Employee Director to whom an Option is granted under
the Plan.

 

3.21        “Retirement” means a termination of employment
which constitutes a “retirement” under any applicable qualified pension benefit
plan maintained by the MHC, the Corporation or a Subsidiary Corporation, or, if
no such plan is applicable, which would constitute “retirement” under the
Corporation’s pension benefit plan, if such individual were a participant in
that plan.

 

3.22        “Stock Appreciation Right” means a right to
surrender an Option in consideration for a payment by the Corporation in cash
and/or Common Stock, as provided in the discretion of the Board or the
Committee in accordance with Section 8.10.

 

3.23        “Subsidiary Companies” means those subsidiaries
of the MHC and 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 granting of the Option in question.

 

3

 

ARTICLE IV

ADMINISTRATION OF THE PLAN

 

4.01        Duties of the Committee. The
Plan shall be administered and interpreted by the Committee, as appointed from
time to time by the Board pursuant to Section 4.02. The Committee shall have
the authority to adopt, amend and rescind such rules, regulations and
procedures as, in its opinion, may be advisable in the administration of the
Plan, including, without limitation, rules, regulations and procedures which
(i) deal with satisfaction of an Optionee’s tax withholding obligation pursuant
to Section 12.02 hereof, (ii) include arrangements to facilitate the Optionee’s
ability to borrow funds for payment of the exercise or purchase price of an
Award, if applicable, from securities brokers and dealers, and (iii) include
arrangements which provide for the payment of some or all of such exercise or
purchase price by delivery of previously-owned shares of Common Stock or other
property and/or by withholding some of the shares of Common Stock which are
being acquired. The interpretation and construction by the Committee of any
provisions of the Plan, any rule, regulation or procedure adopted by it
pursuant thereto or of any Award shall be final and binding in the absence of
action by the Board.

 

4.02        Appointment and Operation
of the Committee. The members of the Committee shall be appointed by, and
will serve at the pleasure of, the Board. The Board from time to time may
remove members from, or add members to, the Committee, provided the Committee
shall continue to 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 or any successor thereto. In addition, each member of the
Committee shall be an “outside director” within the meaning of Section 162(m)
of the Code and regulations thereunder at such times as is required under such
regulations. 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. It may appoint one of its members
to be chairman and any person, whether or not a member, to be its secretary or
agent. The Committee shall report its actions and decisions to the Board at
appropriate times but in no event less than one time per calendar year.

 

4.03        Revocation for Misconduct.
The Board or the Committee may by resolution immediately revoke, rescind
and terminate any Option, or portion thereof, to the extent not yet vested, or
any Stock Appreciation Right, to the extent not yet exercised, 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. Options
granted to a Non-Employee Director who is removed for cause pursuant to the
Corporation’s Certificate of Incorporation and Bylaws or the Bank’s Charter and
Bylaws shall terminate as of the effective date of such removal.

 

4

 

4.04        Limitation on Liability. Neither
the members of the Board nor any member of the Committee shall be liable for
any action or determination made in good faith with respect to the Plan, any
rule, regulation or procedure adopted by it pursuant thereto or any 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 its
Subsidiary Companies and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful.

 

4.05        Compliance with Law 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 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. Moreover, no Option or Stock Appreciation Right may be exercised if
such exercise would be contrary to applicable laws and regulations.

 

4.06        Restrictions on Transfer. The
Corporation may place a legend upon any certificate representing shares
acquired pursuant to an Award granted hereunder noting that the transfer of
such shares may be restricted by applicable laws and regulations.

 

4.07        No
Deferral of Compensation Under Section 409A of the Code. All Awards granted
under the Plan are designed to not constitute a deferral of compensation for
purposes of Section 409A of the Code. Notwithstanding any other provision in
this Plan to the contrary, all of the terms and conditions of any Awards
granted under this Plan shall be designed to satisfy the exemption for stock
options or stock appreciation rights set forth in the regulations issued under
Section 409A of the Code. Both this Plan and the terms of all Options and Stock
Appreciation Rights granted hereunder shall be interpreted in a manner that
requires compliance with all of the requirements of the exemption for stock
options or stock appreciation rights set forth in the regulations issued under
Section 409A of the Code. No Optionee shall be permitted to defer the
recognition of income beyond the exercise date of a Non-Qualified Option or
Stock Appreciation Rights or beyond the date that the Common Stock received upon
the exercise of an Incentive Stock Option is sold.

 

5

 

ARTICLE V

ELIGIBILITY

 

Awards may be
granted to such Employees and Non-Employee Directors of the MHC, the
Corporation and the Subsidiary Companies as may be designated from time to time
by the Board or the Committee. Awards may not be granted to individuals who are
not Employees or Non-Employee Directors of either the Corporation or its
Subsidiary Companies. Non-Employee Directors shall be eligible to receive only
Awards of Non-Qualified Options pursuant to this Plan.

 

ARTICLE VI

COMMON STOCK COVERED BY THE PLAN

 

6.01        Option Shares. The
aggregate number of shares of Common Stock which may be issued pursuant to this
Plan, subject to adjustment as provided in Article IX, shall be 224,087, which
is equal to 10% of the shares of Common Stock sold to the public in the
Offering. None of such shares shall be the subject of more than one Award at
any time, but if an Option as to any shares is surrendered before exercise, or
expires or terminates for any reason without having been exercised in full, or
for any other reason ceases to be exercisable, the number of shares covered
thereby shall again become available for grant under the Plan as if no Awards
had been previously granted with respect to such shares. Notwithstanding the
foregoing, if an Option is surrendered in connection with the exercise of a
Stock Appreciation Right, the number of shares covered thereby shall not be
available for grant under the Plan. During the time this Plan remains in
effect, grants 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.
Awards made to Non-Employee Directors in the aggregate may not exceed 30% of
the number of shares available under this Plan.

 

6.02        Source of Shares. The
shares of Common Stock issued under the Plan may be authorized but unissued
shares, treasury shares or shares purchased by the Corporation on the open
market or from private sources for use under the Plan.

 

ARTICLE VII

DETERMINATION OF

AWARDS, NUMBER OF SHARES, ETC.

 

The Board or
the Committee shall, in its discretion, determine from time to time which
Employees and Non-Employee Directors will be granted Awards under the Plan, the
number of shares of Common Stock subject to each Award, whether each Option
will be an Incentive Stock Option or a Non-Qualified Option (in the case of
Employees) and the exercise price of an Option. In making all such
determinations there shall be taken into account 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 and such other factors deemed relevant to accomplishing
the purposes of the Plan.

 

6

 

ARTICLE VIII

OPTIONS AND STOCK APPRECIATION RIGHTS

 

Each Option
granted hereunder shall be on the following terms and conditions:

 

8.01        Stock Option Agreement. The
proper Officers on behalf of the Corporation and each Optionee shall execute a
Stock Option Agreement which shall set forth the total number of shares of
Common Stock to which it pertains, the exercise price, whether it is a
Non-Qualified Option or an Incentive Stock Option, and such other terms,
conditions, restrictions and privileges as the Board or the Committee in each
instance shall deem appropriate, provided they are not inconsistent with the
terms, conditions and provisions of this Plan. Each Optionee shall receive a
copy of his executed Stock Option Agreement. Any Option granted with the
intention that it will be an Incentive Stock Option but which fails to satisfy
a requirement for Incentive Stock Options shall continue to be valid and shall
be treated as a Non-Qualified Option.

 

8.02        Option Exercise Price.

 

(a)           Incentive Stock Options.
The per share price at which the subject Common Stock may be purchased upon
exercise of an Incentive Stock Option shall be no less than one hundred percent
(100%) of the Fair Market Value of a share of Common Stock at the time such
Incentive Stock Option is granted, except as provided in Section 8.09(b).

 

(b)           Non-Qualified Options. The
per share price at which the subject Common Stock may be purchased upon
exercise of a Non-Qualified Option shall be established by the Committee at the
time of grant, but in no event shall be less than the one hundred percent
(100%) of the Fair Market Value of a share of Common Stock at the time such
Non-Qualified Option is granted.

 

8.03 
Vesting and Exercise of Options.

 

(a)           General Rules. Incentive
Stock Options and Non-Qualified Options granted to Optionees shall become
vested and exercisable at the rate of 20% per year over five years, commencing
one year from the date of grant and an additional 20% shall vest on each
successive anniversary of the date the Option was granted, and the right to
exercise shall be cumulative. Notwithstanding the foregoing, except as provided
in Section 8.03(b) hereof, no vesting shall occur on or after an Optionee’s
employment or service as a Non-Employee Director is terminated for any reason
other than his death or Disability. In determining the number of shares of
Common Stock with respect to which Options are vested and/or exercisable, fractional
shares will be rounded up to the nearest whole number if the fraction is 0.5 or
higher, and down if it is less.

 

(b)           Accelerated Vesting. Unless
the Board or the Committee shall specifically state otherwise at the time an
Option is granted, all Options granted under this Plan shall become vested and
exercisable in full on the date an Optionee terminates his employment with the
MHC, the

 

7

 

Corporation or a Subsidiary
Company or service as a Non-Employee Director because of his death or
Disability. All Options hereunder shall become immediately vested and
exercisable in full on the date an Optionee terminates his employment with the
MHC, the Corporation or a Subsidiary Corporation due to Retirement if as of the
date of such Retirement (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 the stockholders of the
Corporation at a meeting of stockholders held more than one year after the
consummation of the Offering. In addition, all Options hereunder shall become
immediately vested and exercisable in full 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
the stockholders of the Corporation at a meeting of stockholders held more than
one year after consummation of the Offering.

 

8.04 
Duration of Options.

 

(a)           General Rule. Except
as provided in Sections 8.04(b) and 8.09, each Option or portion thereof
granted to an Employee shall be exercisable at any time on or after it vests
and becomes exercisable until the earlier of (i) ten (10) years after its date
of grant or (ii) six (6) months after the date on which the Employee ceases to
be employed by the MHC, the Corporation and all Subsidiary Companies, unless
the Board or the Committee in its discretion decides at the time of grant or
thereafter to extend such period of exercise upon termination of employment to
a period not exceeding five (5) years.

 

Except as
provided in Section 8.04(b), each Option or portion thereof granted to a
Non-Employee Director shall be exercisable at any time on or after it vests and
becomes exercisable until the earlier of (i) ten (10) years after its date of
grant or (ii) three (3) years after the date on which the Non-Employee Director
ceases to serve as a director of the MHC, the Corporation and all Subsidiary
Companies, unless the Board or the Committee in its discretion decides at the
time of grant or thereafter to extend such period of exercise upon termination
of service to a period not exceeding five (5) years.

 

(b)           Exceptions. Unless
the Board or the Committee shall specifically state otherwise at the time an
Option is granted: (i) if an Employee terminates his employment with the MHC,
the Corporation or a Subsidiary Company as a result of Disability or Retirement
without having fully exercised his Options, the Employee shall have the right,
during the three (3) year period following his termination due to Disability or
Retirement, to exercise such Options, and (ii) if a Non-Employee Director
terminates his service as a director (including service as an advisory director
or director emeritus) with the MHC, the Corporation or a Subsidiary Company as
a result of Disability or Retirement without having fully exercised his
Options, the Non-Employee Director shall have the right, during the three (3)
year period following his termination due to Disability or Retirement, to
exercise such Options.

 

Unless the
Board or the Committee shall specifically state otherwise at the time an Option
is granted, if an Employee or Non-Employee Director terminates his employment
or service with the

 

8

 

MHC, the Corporation or a
Subsidiary Company following a Change in Control without having fully exercised
his Options, the Optionee shall have the right to exercise such Options during
the remainder of the original ten (10) year term (or five (5) year term for
Options subject to Section 8.09(b) hereof) of the Option from the date of
grant.

 

If an Optionee
dies while in the employ or service of the MHC, the Corporation or a Subsidiary
Company or terminates employment or service with the MHC, the Corporation or a
Subsidiary Company as a result of Disability or Retirement and dies without
having fully exercised his Options, the executors, administrators, legatees or
distributees of his estate shall have the right, during the one (1) year period
following his death, to exercise such Options.

 

In no event,
however, shall any Option be exercisable more than ten (10) years (five (5)
years for Options subject to Section 8.09(b) hereof) from the date it was
granted.

 

8.05        Nonassignability. Options
shall not be transferable by an Optionee except by will or the laws of descent
or distribution, and during an Optionee’s lifetime shall be exercisable only by
such Optionee or the Optionee’s guardian or legal representative. Notwithstanding
the foregoing, or any other provision of this Plan, an Optionee who holds
Non-Qualified Options may transfer such Options to his or her spouse, lineal
ascendants, lineal descendants, or to a duly established trust for the benefit
of one or more of these individuals. Options so transferred may thereafter be
transferred only to the Optionee who originally received the grant or to an
individual or trust to whom the Optionee could have initially transferred the
Option pursuant to this Section 8.05. Options which are transferred pursuant to
this Section 8.05 shall be exercisable by the transferee according to the same
terms and conditions as applied to the Optionee.

 

8.06        Manner of Exercise. Options
may be exercised in part or in whole and at one time or from time to time. The
procedures for exercise shall be set forth in the written Stock Option
Agreement provided for in Section 8.01 above.

 

8.07        Payment for Shares. Payment
in full of the purchase price for shares of Common Stock purchased pursuant to
the exercise of any Option shall be made to the Corporation upon exercise of
the Option. All shares sold under the Plan shall be fully paid and
nonassessable. Payment for shares may be made by the Optionee (i) in cash or by
check, (ii) by delivery of a properly executed exercise notice, together with
irrevocable instructions to a broker to sell the shares and then to properly
deliver to the Corporation the amount of sale proceeds to pay the exercise
price, all in accordance with applicable laws and regulations, or (iii) at the
discretion of the Committee, by delivering shares of Common Stock (including
shares acquired pursuant to the exercise of an Option) equal in Fair Market
Value to the purchase price of the shares to be acquired pursuant to the
Option, by withholding some of the shares of Common Stock which are being
purchased upon exercise of an Option, or any combination of the foregoing. With
respect to subclause (iii) hereof, the shares of Common Stock delivered to pay
the purchase price must have either been (a) purchased in open market
transactions or (b) issued by the Corporation pursuant to a plan thereof, in
each case more than six months prior to the exercise date of the Option.

 

9

 

8.08        Voting and Dividend Rights.
No Optionee shall have any voting or dividend rights or other rights of a
stockholder in respect of any shares of Common Stock covered by an Option prior
to the time that his name is recorded on the Corporation’s stockholder ledger
as the holder of record of such shares acquired pursuant to an exercise of an
Option.

 

8.09        Additional Terms
Applicable to Incentive Stock Options. All Options issued under the Plan as
Incentive Stock Options will be subject, in addition to the terms detailed in
Sections 8.01 to 8.08 above, to those contained in this Section 8.09.

 

(a)           Notwithstanding any contrary provisions
contained elsewhere in this Plan and as long as required by Section 422 of the
Code, the aggregate Fair Market Value, determined as of the time an Incentive
Stock Option is granted, of the Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by the Optionee during any
calendar year under this Plan, and stock options that satisfy the requirements
of Section 422 of the Code under any other stock option plan or plans
maintained by the Corporation (or any parent or Subsidiary Company), shall not
exceed $100,000.

 

(b)           Limitation on Ten
Percent Stockholders. The price at which shares of Common Stock may be
purchased upon exercise of an Incentive Stock Option granted to an individual
who, at the time such Incentive Stock Option is granted, owns, directly or
indirectly, more than ten percent (10%) of the total combined voting power of
all classes of stock issued to stockholders of the Corporation or any
Subsidiary Company, shall be no less than one hundred and ten percent (110%) of
the Fair Market Value of a share of the Common Stock of the Corporation at the
time of grant, and such Incentive Stock Option shall by its terms not be
exercisable after the earlier of the date determined under Section 8.04 or the
expiration of five (5) years from the date such Incentive Stock Option is
granted.

 

(c)           Notice of Disposition;
Withholding; Escrow. An Optionee shall immediately notify the Corporation
in writing of any sale, transfer, assignment or other disposition (or action
constituting a disqualifying disposition within the meaning of Section 421 of
the Code) of any shares of Common Stock acquired through exercise of an
Incentive Stock Option, within two (2) years after the grant of such Incentive
Stock Option or within one (1) year after the acquisition of such shares,
setting forth the date and manner of disposition, the number of shares disposed
of and the price at which such shares were disposed of. The Corporation shall
be entitled to withhold from any compensation or other payments then or
thereafter due to the Optionee such amounts as may be necessary to satisfy any
withholding requirements of federal or state law or regulation and, further, to
collect from the Optionee any additional amounts which may be required for such
purpose. The Committee or the Board may, in its discretion, require shares of
Common Stock acquired by an Optionee upon exercise of an Incentive Stock Option
to be held in an escrow arrangement for the purpose of enabling compliance with
the provisions of this Section 8.09(c).

 

10

 

8.10        Stock Appreciation Rights.

 

(a)           General Terms and
Conditions. The Board or the Committee may, but shall not be obligated to,
authorize the Corporation, on such terms and conditions as it deems appropriate
in each case, to grant rights to Optionees to surrender an exercisable Option,
or any portion thereof, in consideration for the payment by the Corporation of
an amount equal to the excess of the Fair Market Value of the shares of Common
Stock subject to the Option, or portion thereof, surrendered over the exercise
price of the Option with respect to such shares (any such authorized surrender
and payment being hereinafter referred to as a “Stock Appreciation Right”). Such
payment, at the discretion of the Board or the Committee, may be made in shares
of Common Stock valued at the then Fair Market Value thereof, or in cash, or
partly in cash and partly in shares of Common Stock.

 

The terms and
conditions with respect to a Stock Appreciation Right may include (without
limitation), subject to other provisions of this Section 8.10 and the Plan: the
period during which, date by which or event upon which the Stock Appreciation
Right may be exercised; the method for valuing shares of Common Stock for
purposes of this Section 8.10; a ceiling on the amount of consideration which
the Corporation may pay in connection with exercise and cancellation of the
Stock Appreciation Right; and arrangements for income tax withholding. The
Board or the Committee shall have complete discretion to determine whether,
when and to whom Stock Appreciation Rights may be granted.

 

(b)           Time Limitations. If
a holder of a Stock Appreciation Right terminates service with the Corporation
as an Officer or Employee, the Stock Appreciation Right may be exercised only
within the period, if any, within which the Option to which it relates may be
exercised.

 

(c)           Effects of Exercise of
Stock Appreciation Rights or Options. Upon the exercise of a Stock
Appreciation Right, the number of shares of Common Stock available under the
Option to which it relates shall decrease by a number equal to the number of
shares for which the Stock Appreciation Right was exercised. Upon the exercise
of an Option, any related Stock Appreciation Right shall terminate as to any
number of shares of Common Stock subject to the Stock Appreciation Right that
exceeds the total number of shares for which the Option remains unexercised.

 

(d)           Time of Grant. A
Stock Appreciation Right granted in connection with an Incentive Stock Option
must be granted concurrently with the Option to which it relates, and a Stock
Appreciation Right granted in connection with a Non-Qualified Option must also
be granted concurrently with the Option to which it relates.

 

(e)           Non-Transferable. The
holder of a Stock Appreciation Right may not transfer or assign the Stock
Appreciation Right otherwise than by will or in accordance with the laws of
descent and distribution, and during a holder’s lifetime a Stock Appreciation
Right may be exercisable only by the holder.

 

11

 

ARTICLE IX

ADJUSTMENTS FOR CAPITAL CHANGES

 

9.01 General Adjustments. The aggregate number
of shares of Common Stock available for issuance under this Plan, the number of
shares to which any outstanding Award relates, the maximum number of shares
that can be covered by Award to each Employee and each Non-Employee Director
and the exercise price per share of Common Stock under any outstanding Option
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 this Plan resulting from a split, subdivision or consolidation of shares or
any 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.

 

9.02 Adjustments for Mergers and Other Corporate Transactions. If,
upon a merger, consolidation, reorganization, liquidation, recapitalization or
the like of the Corporation, the shares of the Corporation’s Common Stock shall
be exchanged for other securities of the Corporation or of another corporation,
each Award shall be converted, subject to the conditions herein stated, into
the right to purchase or acquire 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 optionees would have been entitled to purchase or acquire except for such
action, and appropriate adjustments shall be made to the per share exercise
price of outstanding Options, provided that in each case the number of shares
or other securities subject to the substituted or assumed stock options and the
exercise price thereof shall be determined in a manner that satisfies the
requirements of Treasury Regulation §1.424-1 and the regulations issued under
Section 409A of the Code so that the substituted or assumed option is not
deemed to be a modification of the outstanding Options.

 

ARTICLE X

AMENDMENT AND TERMINATION OF THE PLAN

 

The Board may,
by resolution, at any time terminate or amend the Plan with respect to any
shares of Common Stock as to which Awards have not been granted, 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 holder of an Award, alter or impair
any Award previously granted or awarded under this Plan except as specifically
authorized herein.

 

12

 

ARTICLE XI

EMPLOYMENT AND SERVICE RIGHTS

 

Neither the
Plan nor the grant of any Awards hereunder nor any action taken by 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.

 

ARTICLE XII

WITHHOLDING

 

12.01 Tax Withholding. The
Corporation may withhold from any cash payment made under this Plan sufficient
amounts to cover any applicable withholding and employment taxes, and if the
amount of such cash payment is insufficient, the Corporation may require the
Optionee to pay to the Corporation the amount required to be withheld as a
condition to delivering the shares acquired pursuant to an Award. The
Corporation also may withhold or collect amounts with respect to a
disqualifying disposition of shares of Common Stock acquired pursuant to
exercise of an Incentive Stock Option, as provided in Section 8.09(c).

 

12.02      Methods of Tax Withholding. The
Board or the Committee is authorized to adopt rules, regulations or procedures
which provide for the satisfaction of an Optionee’s tax withholding obligation
by the retention of shares of Common Stock to which the Employee would
otherwise be entitled pursuant to an Award and/or by the Optionee’s delivery of
previously owned shares of Common Stock or other property.

 

ARTICLE XIII

EFFECTIVE DATE OF THE PLAN; TERM

 

13.01      Effective Date of the Plan. This
Plan shall become effective on the Effective Date, and Awards may be granted
hereunder no earlier than the date that this Plan is approved by stockholders
of the Corporation and prior to the termination of the Plan, provided that this
Plan is approved by stockholders of the Corporation pursuant to Article XIV
hereof. The amendment and restatement of this Plan was adopted effective as of October
23, 2007.

 

13.02      Term of the Plan. Unless
sooner terminated, this Plan shall remain in effect for a period of ten (10)
years ending on the tenth anniversary of the Effective Date. Termination of the
Plan shall not affect any Awards previously granted and such Awards shall
remain valid and in effect until they have been fully exercised or earned, are
surrendered or by their terms expire or are forfeited.

 

ARTICLE XIV

STOCKHOLDER APPROVAL

 

The stockholders
of the Corporation approved this Plan as originally adopted at a meeting of
stockholders of the Corporation held within twelve (12) months following the
Effective Date in order

 

13

 

to meet the requirements of (i)
Section 422 of the Code and regulations thereunder, (ii) Section 162(m) of the
Code and regulations thereunder, (iii) the Nasdaq Stock Market for continued
quotation of the Common Stock on the Nasdaq Stock Market and (iv) the
regulations of the Office of Thrift Supervision.

 

ARTICLE XV

MISCELLANEOUS

 

15.01      Governing Law. To the
extent not governed by federal law, this Plan shall be construed under the laws
of the State of Pennsylvania.

 

15.02      Pronouns. Wherever
appropriate, the masculine pronoun shall include the feminine pronoun, and the
singular shall include the plural.

 

14

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