Document:

Exhibit 10.1

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDED
AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of October 23,
2007 and is between Willow Financial Bancorp, Inc., a Pennsylvania corporation
(the “Corporation”), Willow Financial Bank, a federally chartered savings bank
and a wholly owned subsidiary of the Corporation (the “Bank”), and Donna M.
Coughey (the “Executive”).

 

WITNESSETH

 

WHEREAS, the
Corporation was previously known as Willow Grove Bancorp, Inc., and the Bank
was previously known as Willow Grove Bank;

 

WHEREAS, the
Executive is currently employed as the President and Chief Executive Officer of
the Corporation and the Bank, and the Corporation, the Bank and the Executive
have previously entered into an employment agreement dated July 15, 2005 (the “Prior
Agreement”);

 

WHEREAS, the
Corporation and the Bank (together the “Employers”) desire to amend and restate
the Prior Agreement in order to make changes to comply with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), as well as certain
other changes; and

 

WHEREAS, in
order to induce the Executive to remain in the employ of the Employers and in
consideration of the Executive’s agreeing to remain in the employ of the
Employers, the parties desire to specify the severance benefits which shall be
due the Executive by the Employers in the event that her employment with the Employers
is terminated under specified circumstances;

 

NOW THEREFORE,
in consideration of the mutual agreements herein contained, and upon the other
terms and conditions hereinafter provided, the parties hereby agree as follows:

 

1.                                      Definitions.
The following words and terms shall have the meanings set forth below for
the purposes of this Agreement:

 

(a)                                  Accrued
Benefits. Accrued
Benefits means (i) all salary earned or accrued through the date the Executive’s
employment is terminated but not yet paid; (ii) reimbursement for any and all
monies advanced in connection with the Executive’s employment for reasonable
and necessary expenses incurred by the Executive through the date the Executive’s
employment is terminated, subject to the requirements of Section 4 hereof and
provided that such expenses have not been previously reimbursed; (iii)
any bonus earned by the Executive for a performance period ending prior to the
Date of Termination, but not yet paid to the Executive, under any bonus or
incentive compensation plan or plans in which the Executive is a participant; (iv)
any vacation time accrued by the Executive under this Agreement or in
accordance with the Employers’ policies but not yet used or forfeited; and (v)
to the extent not previously paid or provided to the Executive, all other
payments and benefits to which the Executive may be entitled under the terms of,
and at the times specified in, any applicable compensation or benefit plan,
program or arrangement of the Employers in which the 

 

 

Executive was participating, with it
being understood that the Executive shall not receive any benefits pursuant to any
severance plan.

 

(b)                                 Base Salary. “Base Salary” shall have the
meaning set forth in Section 3(a) hereof.

 

(c)                                  Cause. Termination of the Executive’s
employment for “Cause” shall mean termination because of personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of this
Agreement.

 

(d)                                 Change in Control. “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.

 

(e)                                  Date of Termination. “Date of Termination”
shall mean (i) if the Executive’s employment is terminated for Cause, the date on
which the Notice of Termination is given, (ii) if the Executive’s employment is
terminated due to her death, the date of death, and (iii) if the Executive’s
employment is terminated for any other reason, the date specified in such
Notice of Termination.

 

(f)                                    Disability. “Disability” shall mean the
Executive (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 Employers.

 

(g)                                 Effective Date. The Effective Date of this Agreement shall
mean the date first written above.

 

(h)                                 Good Reason. Termination by the Executive
of the Executive’s employment for “Good Reason” shall mean termination by the
Executive  based on the occurrence of any of the
following events:

 

(i) any material breach of this Agreement by the Employers, including
without limitation any of the following: (A) a material diminution in the
Executive’s base compensation, (B) a material diminution in the Executive’s
authority, duties or responsibilities as prescribed in Section 2, or (C) any
requirement that the Executive report to a corporate officer or employee of the
Employers instead of reporting directly to the Boards of Directors of the
Employers, or

 

(ii) any material change in the geographic location at which the
Executive must perform her services under this Agreement;

 

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provided, however, that prior
to any termination of employment for Good Reason, the Executive must first
provide written notice to the Employers within ninety (90) days of the initial
existence of the condition, describing the existence of such condition, and the
Employers shall thereafter have the right to remedy the condition within thirty
(30) days of the date the Employers received the written notice from the
Executive. If the Employers remedy the condition within such thirty (30) day
cure period, then no Good Reason shall be deemed to exist with respect to such
condition. If the Employers do not remedy the condition within such thirty (30)
day cure period, then the Executive may deliver a Notice of Termination for
Good Reason at any time within sixty (60) days following the expiration of such
cure period.

 

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

 

(j)                                     Notice of Termination. Any purported
termination of the Executive’s employment by the Employers for any reason, or
by the Executive for any reason, including without limitation for Good Reason,
shall be communicated by a written “Notice of Termination” to the other party
hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a
dated notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated, (iii) specifies a Date of
Termination, which shall be not less than thirty (30) nor more than ninety (90)
days after such Notice of Termination is given, except in the case of the Employers’
termination of Executive’s employment for Cause, which shall be effective
immediately, and except as set forth in Section 20(a) hereof; and (iv) is given
in the manner specified in Section 12 hereof.

 

(k)                                  Pre-Merger Options. Pre-Merger  Options  means those options to purchase common stock of Chester
Valley Bancorp, Inc. (“Chester Valley”) which remained unvested immediately
prior to the acquisition of Chester Valley by the Corporation.

 

(l)                                     Present Value. Present Value of payments that would
otherwise be made in the future shall be determined using a discount rate equal
to the applicable federal rate prescribed under Section 1274(d) of the Code for
the month in which the Date of Termination occurs, compounded semi-annually.

 

(m)                               Retirement. “Retirement” shall mean
voluntary termination by the Executive in accordance with the Employers’
retirement policies, including early retirement, generally applicable to their
salaried employees.

 

2.                                      Term
of Employment.

 

(a)                                  Each
of the Employers hereby employs the Executive as President and Chief Executive
Officer, and the Executive hereby accepts said employment and agrees to render
such services to the Employers on the terms and conditions set forth in this
Agreement. The term of employment under this Agreement shall be for three
years, commencing on July 1, 2007 and, upon approval of the Board of Directors
of each of the Employers, shall extend for an additional year on each subsequent
July 1 such that at any time the remaining term of this Agreement shall be from
two to three years in the absence of notice to the contrary. Prior to July 1,
2008 and each July 1 

 

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thereafter, the Board of
Directors of each of the Employers shall consider and review (after taking into
account all relevant factors, including the Executive’s performance hereunder)
an extension of the term of this Agreement, and the term shall continue to
extend each July 1 if the Boards of Directors approve such extension unless the
Executive gives written notice to the Employers of the Executive’s election not
to extend the term, with such written notice to be given not less than thirty
(30) days prior to any such July 1. If the Board of Directors of either of the
Employers elects not to extend the term, it shall give written notice of such
decision to the Executive not less than thirty (30) days prior to any such July
1. If any party gives timely notice that the term will not be extended as of
any July 1, then this Agreement shall terminate at the conclusion of its
remaining term. References herein to the term of this Agreement shall refer
both to the initial term and successive terms.

 

(b)                                 During
the term of this Agreement, the Executive shall perform such executive services
for the Employers as may be consistent with her titles and from time to time
assigned to her by the Boards of Directors of the Employers. During the term of
this Agreement, the Executive shall devote her best efforts and her full time
effort to the affairs and business of the Employers.

 

(c)                                  The
Executive shall be nominated to be a member of the Board of Directors of the
Corporation, and shall be a member of the Board of Directors of the Bank, as
long as the Executive remains an employee in good standing and/or has not
violated any of the terms and provisions of this Agreement. Termination of
employment for any reason shall be deemed to be a resignation from the Board of
Directors of the Corporation and from the Board of Directors of the Bank.

 

3.                                      Compensation
and Benefits.

 

(a)                                  Base Salary. The Employers shall compensate and pay the
Executive for her services during the term of this Agreement at a minimum base
salary of $350,000 per year (“Base Salary”), which may be increased from time
to time in such amounts as may be determined by the Boards of Directors of the
Employers and may not be decreased without the Executive’s express written
consent. In addition to her Base Salary, the Executive shall be entitled to
receive during the term of this Agreement such bonus payments as may be
determined by the Boards of Directors of the Employers.

 

(b)                                 Benefit Plans. During the term of this Agreement, the
Executive shall be entitled to participate in and receive the benefits of any
pension or other retirement benefit plan, profit sharing plan, stock option
plan, employee stock ownership plan, welfare and fringe benefit arrangements,
or such other employee benefit plans, programs, policies, benefits,
arrangements and privileges given to employees and executives of the Employers,
to the extent commensurate with her then duties and responsibilities, as fixed
by the Boards of Directors of the Employers. The Employers shall not make any
changes in such plans, benefits or privileges which would adversely affect the
Executive’s rights or benefits thereunder, unless such change occurs pursuant
to a program applicable to all executive officers of the Employers and does not
result in a disproportionately greater adverse change in the rights of or
benefits to the Executive as compared with any other executive officer of the Employers.
Nothing paid to the Executive under any plan or arrangement presently in effect
or made available in the future shall be deemed to be in lieu of the salary
payable to the Executive pursuant to Section 3(a) of this Agreement. Notwithstanding
the foregoing, in the event that the Executive participates in any employee
benefit plan, program, policy or arrangement offered by 

 

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Chester Valley and/or First Financial (the “Chester Valley Plans”) that
is continued following the Effective Date, the Executive shall not be entitled
to participate in any employee benefit plan, program, policy or arrangement of
the Employers (the “Employer Plans”) that provides similar benefits until the
Chester Valley Plan is terminated, suspended or merged into the corresponding
Employer Plan.

 

(c)                                  Vacation. During the term of this Agreement, the Executive
shall be entitled to a minimum of four weeks of paid vacation each calendar
year. The Executive shall not be entitled to accumulate unused vacation time
from one year to the next, except to the extent authorized by the Employers’
vacation policies or by the Boards of Directors of the Employers. Accrued but
unused vacation in the year of termination of employment shall be treated as an
Accrued Benefit pursuant to which the Executive shall be entitled to payment
based on the Executive’s then current Base Salary.

 

(d)                                 Executive Survivor Income Agreement. The Employers expressly
assume and agree to perform the Executive Survivor Income Agreement dated July 2,
2003 between the Executive and First Financial Bank, as amended (the “Survivor
Income Agreement”) in the same manner and to the same extent that First
Financial Bank would be required to perform the Survivor Income Agreement if no
succession had occurred; provided, however, that the parties hereto acknowledge
and agree that any payments to the Executive pursuant to the Survivor Income
Agreement will be subject to the limitations set forth in Section 20 of this
Agreement, as applicable.

 

(e)                                  SERP. During the term of this Agreement, the Executive will
be entitled to participate in a supplemental executive retirement plan of the
Employers to be established for the Executive’s benefit.

 

(f)                                    Club Membership. The Employers shall provide the Executive
with membership in a dining club or other organization, as may be agreed upon
from time to time by the Boards of Directors of the Employers. If the costs of
the club memberships are paid in the first instance by the Executive, the
Employers shall reimburse the Executive therefor. Such reimbursement shall be
paid promptly by the Employers and in any event no later than March 15 of the
year immediately following the year in which such costs were paid by the
Executive.

 

(g)                                 Automobile
Allowance. The Employers shall provide the Executive with an
automobile allowance of $1,200 per month, payable monthly. The Executive shall
document her business use of the automobile, including mileage and other
incidental costs, and provide such documentation as may be reasonably required
by the Employers.

 

(h)                                 Service Credit. The Employers shall provide the Executive
with credit for her years of service with First Financial Bank and its
predecessors, to the extent reflected on the books of First Financial Bank, for
the purpose of determining eligibility to participate in and the vesting of
benefits (but not for accrual of benefits) under each Employer Plan in which
the Executive becomes a participant.

 

(i)                                     Treatment of Pre-Merger Options. The parties hereto agree
that the Pre-Merger Options held by the Executive shall be converted into stock
options to purchase the common stock of the Corporation in accordance with the
terms of the Agreement and Plan of Merger, dated as of 

 

5

 

January 20, 2005 (the “Merger Agreement”),
between the Corporation and Chester Valley. The Executive previously waived her
right to accelerated vesting of the Pre-Merger Options as of the completion of
the acquisition of Chester Valley by the Corporation and the parties hereto
agree that the Pre-Merger Options shall continue to vest in the ordinary course
pursuant to the existing vesting schedule.

 

(j)                                     Proration. The Executive’s compensation, benefits and
expenses shall be paid by the Corporation and the Bank in the same proportion
as the time and services actually expended by the Executive on behalf of each
respective Employer.

 

4.                                      Expenses.
The Employers shall reimburse the Executive or otherwise provide for or pay
for all reasonable expenses incurred by the Executive in furtherance of or in
connection with the business of the Employers, including, but not by way of
limitation, reasonable entertainment expenses (whether incurred at the
Executive’s residence, while traveling or otherwise), subject to such
reasonable documentation and other limitations as may be established by the
Boards of Directors of the Employers. If such expenses are paid in the first
instance by the Executive, the Employers shall reimburse the Executive therefor.
Such reimbursement shall be paid promptly by the Employers and in any event no
later than March 15 of the year immediately following the year in which such
expenses were incurred.

 

5.                                      Termination.

 

(a)                                  General. The Employers shall have the right, at any time
upon prior Notice of Termination, to terminate the Executive’s employment
hereunder for any reason, and the Executive shall have the right, upon prior
Notice of Termination, to terminate her employment hereunder for any reason. Any
payments to be made under Sections 5(c), 5(h) or 5(i) shall be contingent on
the Executive’s prior execution and non-revocation of a mutual release
substantially in the form attached hereto as Exhibit A; provided, however, that
if the Employers refuse to execute such mutual release, the Executive’s
obligation to execute and not revoke the release as a precondition to receiving
such severance benefits shall terminate.

 

(b)                                 For Cause. In the event that the Executive’s employment is
terminated by the Employers for Cause, the Executive shall be entitled to any
Accrued Benefits but shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the applicable Date of
Termination. The Accrued Benefits shall be paid to the Executive within ten
(10) business days after the Date of Termination, except that Accrued Benefits
under employee benefit plans shall be paid in accordance with the terms of such
plans. In the event the Employers desire to terminate the Executive’s
employment for Cause, the Executive shall be given an opportunity, together
with counsel, to meet with the Boards of Directors of the Employers either
prior to the Date of Termination or within ten (10) days thereafter. A
determination that Cause exists shall be made by a majority of the Board of
Directors in writing, which shall specify the basis for such determination. The
Employers may suspend the Executive’s titles, duties and authority pending the
Executive’s meeting with the Boards of Directors, and such suspension shall not
constitute Good Reason.

 

(c)                                  Voluntary Termination by the Executive. In the event the
Executive terminates her employment hereunder other than for death, Disability,
Retirement or Good Reason, then the 

 

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Executive shall be entitled to any Accrued Benefits but shall have no
right pursuant to this Agreement to compensation or other benefits for any
period after the applicable Date of Termination. The Accrued Benefits shall be
paid to the Executive within ten (10) business days after the Date of Termination,
except that Accrued Benefits under employee benefit plans shall be paid in
accordance with the terms of such plans.

 

(d)                                 Death. In
the event the Executive’s employment hereunder is terminated due to death, the
Executive’s estate or named beneficiaries shall be entitled to death benefits
in accordance with the terms of the Survivor Income Agreement. The Employers
shall also (i) provide the Executive’s estate or named beneficiaries with any
Accrued Benefits, with such Accrued Benefits to be paid within ten (10)
business days after the date of death, except that Accrued Benefits under
employee benefit plans shall be paid in accordance with the terms of such
plans, (ii) pay the Executive’s spouse a lump sum payment equal to one-half of
the Base Salary that would have been paid to the Executive for the then
remaining term of this Agreement but for such death, and (iii) provide the
Executive’s spouse and any dependents covered as of the Date of Termination with
continued medical and dental coverage for the then remaining term of this
Agreement but for such death, with such coverage to be provided in compliance
with Section 5(i) hereof. In addition, the pre-Merger Options shall become
immediately vested and exercisable (to the extent not previously vested and exercisable)
and shall remain exercisable for the period provided under the applicable
option agreement. Other than as set forth above, neither the Executive nor her
estate or named beneficiaries shall have any right pursuant to this Agreement
to compensation or other benefits for any period after the Date of Termination.

 

(e)                                  Disability. In
the event the Executive’s employment hereunder is terminated due to Disability,
the Employers shall (i) provide the Executive with any Accrued Benefits, with
such Accrued Benefits to be paid within ten (10) business days after the Date
of Termination, except that Accrued Benefits under employee benefit plans shall
be paid in accordance with the terms of such plans, and (ii) provide continued
life, medical and dental coverage to the Executive and any dependents covered
as of the Date of Termination for the then remaining term of this Agreement but
for such Disability, with such coverage to be provided in compliance with
Section 5(i) hereof. In addition, the pre-Merger Options shall become
immediately vested and exercisable (to the extent not previously vested and
exercisable) and shall remain exercisable for the period provided under the
applicable option agreement. Other than as set forth above, the Executive shall
have no right pursuant to this Agreement to compensation or other benefits for
any period after the Date of Termination.

 

(f)                                    Retirement. In the event the Executive’s employment
hereunder is terminated due to Retirement, the Employers shall (i) provide the
Executive with any Accrued Benefits, with such Accrued Benefits to be paid within
ten (10) business days after the Date of Termination, except that Accrued
Benefits under employee benefit plans shall be paid in accordance with the
terms of such plans, and (ii) provide continued life, medical and dental
coverage to the Executive and any dependents covered as of the Date of
Termination for the then remaining term of this Agreement but for such
Retirement, with such coverage to be provided in compliance with Section 5(i)
hereof. In addition, the pre-Merger Options shall become immediately vested and
exercisable (to the extent not previously vested and exercisable) and shall
remain exercisable for the period provided under the applicable option
agreement. Other than as set forth above, the Executive shall have no right 

 

7

 

pursuant to this Agreement to compensation or
other benefits for any period after the Date of Termination.

 

(g)                                 Involuntary
Termination. In the event that either (A) the Executive’s employment
is terminated by the Employers for other than Cause or the Executive’s
Disability, Retirement or death or (B) such employment is terminated by the
Executive for Good Reason, then the Employers shall (i) provide the Executive
with any Accrued Benefits, with such Accrued Benefits to be paid within ten
(10) business days after the Date of Termination, except that Accrued Benefits
under employee benefit plans shall be paid in accordance with the terms of such
plans, (ii) pay to the Executive, within thirty (30) days following the Date of
Termination, a lump sum amount equal to the Present Value of the Base Salary that
the Executive would have earned for the then remaining term of this Agreement,
based on the Executive’s then current Base Salary, and (iii) provide continued
life, medical and dental coverage to the Executive and any dependents covered
as of the Date of Termination for the then remaining term of this Agreement but
for such termination, with such coverage to be provided in compliance with
Section 5(i) hereof. In addition, the pre-Merger Options shall become
immediately vested and exercisable (to the extent not previously vested and
exercisable) and shall remain exercisable for the period provided under the
applicable option agreement. Notwithstanding the foregoing, this Section 5(g)
shall not be applicable if the termination of employment occurs concurrently
with or within twenty-four (24) months following a Change in Control.

 

(h)                                 Change in Control Termination. In the event that either (i)
the Executive’s employment is terminated concurrently with or within twelve (12)
months following a Change in Control for other than Cause or the Executive’s
Disability, Retirement or death, or (ii) the Executive elects to terminate her
employment for Good Reason, then the Employers shall, subject to the provisions
of Sections 6 and 7 hereof, if applicable;

 

(A)                              pay
to the Executive, within thirty (30) days following the Date of Termination, a
lump sum cash severance amount equal to three (3) times the sum of the
Executive’s then current Base Salary and most recently paid bonus;

 

(B)                                provide to the
Executive, her spouse and any dependents covered as of the Date of Termination for
a period ending at the earlier of (i) three years subsequent to the Date of
Termination or (ii) the date of the Executive’s full-time employment by another
employer (provided that the Executive, her spouse and/or her dependents is
entitled under the terms of such employment to benefits substantially similar
to those described in this subparagraph (B)), at no cost to the Executive,
continued participation in all group insurance, life insurance, health and
accident insurance, and disability insurance offered by the Employers in which
the Executive, her spouse and/or her dependents were participating immediately
prior to the Date of Termination, with such coverage to be provided in
compliance with Section 5(i) hereof;

 

(C)                                pay
to the Executive, in a lump sum within thirty (30) days following the Date of
Termination, a cash amount equal to the projected cost to the Employers of
providing benefits to the Executive for a period of three years pursuant to any
other employee benefit plans, programs or arrangements offered by the Employers
in which the Executive was 

 

8

 

entitled to participate immediately prior to
the Date of Termination (excluding (y) stock option plans, restricted stock
plans and employee stock ownership plans of the Employers and (z) bonuses and
other items of cash compensation), with the projected cost to the Employers to
be based on the costs incurred for the calendar year immediately preceding the
year in which the Date of Termination occurs and with any automobile-related
costs to exclude any depreciation on Bank-owned automobiles; and

 

(D)                               provide
the Executive with any Accrued Benefits, with such Accrued Benefits to be paid
with ten (10) business days after the Date of Termination, except that Accrued
Benefits under employee benefit plans shall be paid in accordance with the
terms of such plans.

 

In addition, the pre-Merger Options shall
become immediately vested and exercisable (to the extent not previously vested
and exercisable) and shall remain exercisable for the period provided under the
applicable option agreement.

 

(i)                                     In
the event the Executive, her spouse or any other covered dependents are
entitled to the continuation of insurance coverage pursuant to this Section 5,
such coverage shall be provided on the same terms as similar coverage is
provided to other employees of the Employers; provided that any insurance
premiums payable by the Employers or any successors pursuant to this Section 5
shall be payable at such times and in such amounts as if the Executive was
still an employee of the Employers, subject to any increases in such amounts
imposed  by the insurance company or  COBRA, and the amount of insurance premiums
required to be paid by the Employers in any taxable year shall not affect the
amount of insurance premiums required to be paid by the Employers in any other
taxable year; and provided further that if the participation of the Executive
or other covered dependents in any group insurance plan is barred, the
Employers shall either arrange to provide such persons with insurance benefits
substantially similar to those which the Executive was entitled to receive
under such group insurance plan or, if such coverage cannot be obtained, pay a
lump sum cash equivalency amount within thirty (30) days following the Date of
Termination based on the annualized rate of premiums being paid by the
Employers as of the Date of Termination.

 

6.                                      Limitation
of Benefits under Certain Circumstances. Notwithstanding the proration
provision in Section 3(j) hereof, in the event the payments and benefits payable
by the Bank pursuant to Section 5 hereof, either alone or together with other
payments and benefits which the Executive has the right to receive from the
Employers, would constitute a “parachute payment” under Section 280G of the
Code, then the Bank’s share of the payments and benefits payable by the
Employers pursuant to Section 5 hereof shall be reduced by the minimum amount necessary
to result in no portion of the payments and benefits payable by the Bank under
Section 5 being non-deductible to the Bank pursuant to Section 280G of the Code
and subject to the excise tax imposed under Section 4999 of the Code. In the
event the Bank’s share of the payments and benefits payable by the Employers
pursuant to Section 5 hereof is reduced by the preceding sentence, then the
Corporation’s share of such payments and benefits shall be increased by an
equivalent amount.

 

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7.                                      Payment
of Additional Benefits under Certain Circumstances.

 

(a)                                  In
the event that the payments and benefits pursuant to Section 5(h) hereof,
either alone or together with other payments and benefits which the Executive
has the right to receive from the Employers or their predecessors or successors
but before giving effect to this Section 7, would constitute a “parachute
payment” as defined in Section 280G(b)(2) of the Code (the “Initial Parachute
Payment”), then the Corporation shall pay to the Executive, in a lump sum
within thirty (30) days following the Date of Termination, a lump sum cash amount
equal to the sum of the following:

 

(A)                              twenty
(20) percent (or such other percentage equal to the tax rate imposed by Section
4999 of the Code or any successor thereto) of the amount by which the Initial
Parachute Payment exceeds the Executive’s “base amount” from the Employers, as
defined in Section 280G(b)(3) of the Code, with the difference between the
Initial Parachute Payment and the Executive’s base amount being hereinafter
referred to as the “Initial Excess Parachute Payment”; and

 

(B)                                such
additional amount (the “Tax Allowance”) as may be necessary to compensate the
Executive for the payment by the Executive of state, local and federal income
and excise and other taxes on the payment provided under clause (A) above and
on any payments under this clause (B). The Tax Allowance shall be calculated by
multiplying the “gross up percentage” (“GUP”) by the payment to be made under
clause (A) above. The GUP shall be determined as follows:

 

	
  GUP =

  	
   

  	
  Tax Rate

  	
   

  
	
   

  	
  1- Tax Rate

  

 

The Tax Rate
for purposes of computing the GUP shall be equal to the sum of (i) twenty (20)
percent (or such other percentage equal to the tax rate imposed by Section 4999
of the Code or any successor thereto), and (ii) the highest marginal federal, state
and local income and employment-related tax rate (including Social Security and
Medicare taxes) applicable to the Executive in the year in which the payment
under clause (B) above is made, and shall also reflect the phase-out of
deductions and the ability to deduct certain of such taxes.

 

All
determinations to be made pursuant to this Section 7 shall be based upon the
opinion of independent counsel selected by the Employers and paid for by the
Employers.

 

(b)                                 Notwithstanding
the foregoing, if it shall subsequently be determined in a final judicial
determination or a final administrative settlement to which the Executive is a
party that the actual excess parachute payment as defined in Section 280G(b)(1)
of the Code is different from the Initial Excess Parachute Payment (such
different amount being hereafter referred to as the “Determinative Excess
Parachute Payment”), then the Corporation’s independent tax counsel or
accountants shall determine the amount (the “Adjustment Amount”) which either
the Executive must pay to the Corporation or the Corporation must pay to the
Executive in order to put the Executive (or the Corporation, as the case may
be) in the same position the Executive (or the Corporation, as the case may be)
would have been if the Initial Excess Parachute Payment had been equal to the 

 

10

 

Determinative Excess Parachute
Payment. In determining the Adjustment Amount, the independent tax counsel or
accountants shall take into account any and all taxes (including any penalties
and interest) paid by or for the Executive or refunded to the Executive or for
the Executive’s benefit. As soon as practicable after the Adjustment Amount has
been so determined, and in no event more than thirty (30) days after the
Adjustment Amount has been so determined, the Corporation shall pay the
Adjustment Amount to the Executive or the Executive shall repay the Adjustment
Amount to the Corporation, as the case may be.

 

(c)                                  In
each calendar year that the Executive receives payments of benefits under this
Section 7, the Executive shall report on her state, local and federal income
tax returns such information as is consistent with the determination made by
the independent tax counsel or accountants of the Corporation as described
above. The Corporation shall indemnify and hold the Executive harmless from any
and all losses, costs and expenses (including without limitation, reasonable
attorneys’ fees, interest, fines and penalties) which the Executive incurs as a
result of so reporting such information, with such indemnification to be paid
by the Corporation to the Executive as soon as practicable and in any event no
later than March 15 of the year immediately following the year in which the
amount subject to indemnification was determined. The Executive shall promptly
notify the Corporation in writing whenever the Executive receives notice of the
institution of a judicial or administrative proceeding, formal or informal, in
which the federal tax treatment under Section 4999 of the Code of any amount
paid or payable under this Section 7 is being reviewed or is in dispute. The
Corporation shall assume control at its expense over all legal and accounting
matters pertaining to such federal tax treatment (except to the extent
necessary or appropriate for the Executive to resolve any such proceeding with
respect to any matter unrelated to amounts paid or payable pursuant to this
Section 7) and the Executive shall cooperate fully with the Corporation in any
such proceeding. The Executive shall not enter into any compromise or
settlement or otherwise prejudice any rights the Corporation may have in
connection therewith without the prior consent of the Corporation.

 

8.                                      Mitigation;
Exclusivity of Benefits.

 

(a)                                  The
Executive shall not be required to mitigate the amount of any benefits
hereunder by seeking other employment or otherwise, nor shall the amount of any
such benefits be reduced by any compensation earned by the Executive as a
result of employment by another employer after the Date of Termination or
otherwise, except as set forth in Section 5(h)(B)(ii) hereof.

 

(b)                                 The
specific arrangements referred to herein are not intended to exclude any other
benefits which may be available to the Executive upon a termination of
employment with the Employers pursuant to employee benefit plans of the
Employers or otherwise.

 

9.                                      Withholding.
All payments required to be made by the Employers hereunder to the
Executive shall be subject to the withholding of such amounts, if any, relating
to tax and other payroll deductions as the Employers may reasonably determine
should be withheld pursuant to any applicable law or regulation.

 

11

 

10.                               Competitive
Activities.

 

(a)                                  The
Executive agrees and acknowledges that by virtue of her employment hereunder,
she will maintain an intimate knowledge of the activities and affairs of the
Employers, including trade secrets, plans, business plans, strategies,
projections, market studies, customer information, employee records and other
internal proprietary and confidential information and matters (collectively “Confidential
Information”). As a result, and also because of the special, unique and
extraordinary services that the Executive is capable of performing for the
Employers or one of its competitors, the Executive recognizes that the services
to be rendered by her hereunder are of a character giving them a peculiar
value, the loss of which cannot be adequately or reasonably compensated for by
damages.

 

(b)                                 Except
for the purpose of carrying out her duties hereunder, the Executive will not
remove or retain, or make copies or reproductions of, any figures, documents,
records, discs, computer records, calculations, letters, papers, or recorded or
documented information of any type or description relating to the business of
the Employers. The Executive agrees that she will not divulge to others any
information (whether or not documented or recorded) or data acquired by her
while in the Employers’ employ relating to methods, processes or other trade
secrets or other Confidential Information.

 

(c)                                  The
Executive agrees that the Employers are, and shall be, the sole and exclusive
owner of all improvements, ideas and suggestions, whether or not subject to
patent or trademark protection, and all copyrightable materials which are
conceived by the Executive during her employment, which relate to the business
of the Employers, which are confidential, or which are not readily
ascertainable from persons or other sources outside the Bank or the
Corporation.

 

(d)                                 Unless
the Executive’s employment is terminated in connection with or following a
Change in Control, then for a period of one year after the termination of
employment, the Executive shall not, directly or indirectly, solicit, induce,
encourage or attempt to influence any client, customer or employee of the
Employers to cease to do business with, or to terminate any employee’s
employment with, the Employers. The Executive shall not be subject to any of
the limitations set forth in the preceding sentence if the Executive’s
employment is terminated in connection with or following a Change in Control.

 

(e)                                  The
Executive agrees that during the term of her employment hereunder, except with
the express consent of the Employers, she will not, directly or indirectly,
engage or participate in, become a director of, or render advisory or other
services for, or in connection with, or become interested in, or make any
financial investment in any firm, corporation, business entity or business
enterprise competitive with or to any business of the Employers; provided,
however, that the Executive shall not thereby be precluded or prohibited from
owning passive investments, including investments in the securities of other
financial institutions, so long as such ownership does not require her to
devote substantial time to management or control of the business or activities
in which she has invested. Notwithstanding anything to the contrary contained
in this Agreement, during the term of this Agreement, the Executive shall have
no employment contract or other written or oral agreement concerning employment
as an officer of a savings bank or any other financial institution or financial
institution holding company nor with any other entity or person other than the
Bank or 

 

12

 

the Corporation. The provisions of this Section 10(e) shall not be
applicable if the Executive’s employment is terminated in connection with or
following a Change in Control.

 

(f)                                    The
Employers shall be entitled to immediate injunctive or other equitable relief
to restrain the Executive from failing to comply with any obligation under this
Section 10 or from rendering her services to persons or entities than the
Employers, in addition to any other remedies to which the Employers may be
entitled under law. The right to such injunctive or other equitable relief
shall survive the termination by the Employers of the Executive’s employment.

 

(g)                                 The
Executive acknowledges that the restrictions contained in this Section 10 are
reasonable and necessary to protect the legitimate interests of the Employers
and that any violation thereof would result in irreparable injuries to the
Employers. The Executive acknowledges that, if the Executive violates any of
these restrictions, the Employers are entitled to obtain from any court of
competent jurisdiction, preliminary and permanent injunctive relief as well as
damages, and an equitable accounting of any earnings, profits and other
benefits arising from such violation, which rights shall be cumulative and in
addition to any other rights or remedies to which the Employers may be entitled.
The Executive further acknowledges that the provisions of Sections 10(a), (b),
(c), (f) and (g) shall remain in full force and effect beyond the termination
of the Executive’s employment for any reason, including but not limited to
termination in connection with or following a Change in Control.

 

11.                               Assignability.
The Employers may assign this Agreement and their rights and obligations
hereunder in whole, but not in part, to any corporation, bank or other entity
with or into which the Employers may hereafter merge or consolidate or to which
the Employers may transfer all or substantially all of their assets, if in any
such case said corporation, bank or other entity shall by operation of law or
expressly in writing assume all obligations of the Employers hereunder as fully
as if it had been originally made a party hereto, but may not otherwise assign
this Agreement or its rights and obligations hereunder. The Executive may not
assign or transfer this Agreement or any rights or obligations hereunder.

 

12.                               Notice.
For the purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by first-class certified or registered
mail, return receipt requested, postage prepaid, addressed to the respective
addresses set forth below:

 

	
  To the Bank:

  	
   

  	
  Secretary

  	
   

  
	
   

  	
   

  	
  Willow
  Financial Bank

  
	
   

  	
   

  	
  170 South
  Warner Road

  
	
   

  	
   

  	
  Wayne,
  Pennsylvania 19087

  
	
   

  	
   

  	
   

  
	
  To the
  Corporation:

  	
   

  	
  Secretary

  
	
   

  	
   

  	
  Willow
  Financial Bancorp, Inc.

  
	
   

  	
   

  	
  170 South
  Warner Road

  
	
   

  	
   

  	
  Wayne,
  Pennsylvania 19087

  

 

13

 

	
  To the
  Executive:

  	
   

  	
  Donna M.
  Coughey

  
	
   

  	
   

  	
  At her last
  address on file with

  
	
   

  	
   

  	
  the
  Employers

  

 

13.                               Amendment;
Waiver. No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer or officers as may be
specifically designated by the Board of Directors of each of the Employers to
sign on its behalf. No waiver by any party hereto at any time of any breach by
any other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. In addition, notwithstanding anything in this Agreement to the
contrary, the Employers may amend in good faith any terms of this Agreement,
including retroactively, in order to comply with Section 409A of the Code.

 

14.                               Governing
Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the United States where applicable
and otherwise by the substantive laws of the Commonwealth of Pennsylvania.

 

15.                               Nature
of Obligations. Nothing contained herein shall create or require the Employers
to create a trust of any kind to fund any benefits which may be payable
hereunder, and to the extent that the Executive acquires a right to receive
benefits from the Employers hereunder, such right shall be no greater than the
right of any unsecured general creditor of the Employers.

 

16.                               Headings.
The section headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.

 

17.                               Validity.
The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provisions of this
Agreement, which shall remain in full force and effect.

 

18.                               Changes in Statutes or Regulations. If any statutory or
regulation provision referenced herein is subsequently changed or re-numbered,
or is replaced by a separate provision, then the references in this Agreement
to such statutory or regulatory provision shall be deemed to be a reference to
such section as amended, re-numbered or replaced.

 

19.                               Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.

 

20.                               Regulatory
Actions. The following provisions shall be applicable to the parties to the
extent that they are required to be included in employment agreements between a
savings association and its employees pursuant to Section 563.39(b) of the
Regulations Applicable to All Savings Associations, 12 C.F.R. §563.39(b), or
any successor thereto, and shall be controlling in the event of a conflict with
any other provision of this Agreement, including without limitation Section 5
hereof.

 

14

 

(a)                                  The
Bank’s Board of Directors may terminate the Executive’s employment at any time,
but any termination by the Bank’s Board of Directors, other than termination
for Cause, shall not prejudice the Executive’s right to compensation or other
benefits under this Agreement.

 

(b)                                 If
the Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Employers’ affairs by a notice served under
Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit Insurance Act (“FDIA”)
(12 U.S.C. §1818(e)(3) and 1818(g)(1)), the Employers’ obligations under this
Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the
Employers may, in their discretion:  (i)
pay the Executive all or part of the compensation withheld while their
obligations under this Agreement were suspended, and (ii) reinstate (in whole
or in part) any of their obligations which were suspended.

 

(c)                                  If
the Executive is removed from office and/or permanently prohibited from
participating in the conduct of the Employers’ affairs by an order issued under
Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C. §1818(e)(4) and
(g)(1)), all obligations of the Employers under this Agreement shall terminate
as of the effective date of the order, but vested rights of the Executive and
the Employers as of the date of termination shall not be affected.

 

(d)                                 If
the Bank is in default, as defined in Section 3(x)(1) of the FDIA (12 U.S.C. §1813(x)(1)),
all obligations under this Agreement shall terminate as of the date of default,
but vested rights of the Executive and the Employers as of the date of
termination shall not be affected.

 

(e)                                  All
obligations under this Agreement shall be terminated pursuant to 12 C.F.R. §563.39(b)(5),
except to the extent that it is determined that continuation of the Agreement
for the continued operation of the Employers is necessary:  (i) by the Director of the Office of Thrift
Supervision (“OTS”), or his/her designee, at the time the Federal Deposit
Insurance Corporation (“FDIC”) enters into an agreement to provide assistance
to or on behalf of the Bank under the authority contained in Section 13(c) of
the FDIA (12 U.S.C. §1823(c)); or (ii) by the Director of the OTS, or his/her
designee, at the time the Director or his/her designee approves a supervisory
merger to resolve problems related to operation of the Bank or when the Bank is
determined by the Director of the OTS to be in an unsafe or unsound condition,
but vested rights of the Executive and the Employers as of the date of termination
shall not be affected.

 

21.                               Regulatory
Prohibition. Notwithstanding any other provision of this Agreement to the
contrary, any payments made to the Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with Section
18(k) of the Federal Deposit Insurance Act (12 U.S.C. §1828(k)) and the
regulations promulgated thereunder, including 12 C.F.R. Part 359. In the
event of the Executive’s termination of employment with the Bank for Cause, all
employment relationships and managerial duties with the Bank shall immediately
cease regardless of whether the Executive remains in the employ of the
Corporation following such termination. Furthermore, following such termination
for Cause, the Executive will not, directly or indirectly, influence or
participate in the affairs or the operations of the Bank, and any compensation
and benefits which the Executive may continue to receive from the Corporation
pursuant to Section 3 hereof shall be adjusted as appropriate so that they are
commensurate solely with the Executive’s duties at the Corporation.

 

15

 

22.                               Payment
of Costs and Legal Fees and Reinstatement of Benefits. In the event any
dispute or controversy arising under or in connection with the Executive’s
termination is resolved in favor of the Executive, whether by judgment,
arbitration or settlement, the Executive shall be entitled to the payment of
(a) all legal fees incurred by the Executive in resolving such dispute or controversy,
and (b) any back-pay, including Base Salary, bonuses and any other cash
compensation, fringe benefits and any compensation and benefits due to the
Executive under this Agreement, within thirty (30) days following the date such
judgment, arbitration or settlement becomes final and non-appealable.

 

23.                               Indemnification.

 

(a)                                  The Corporation shall
provide the Executive (including her heirs, executors and administrators) with
coverage under a directors’ and officers’ liability insurance policy at its
expense and shall indemnify the Executive (and her heirs, executors and
administrators) to the fullest extent permitted by law against all expenses and
liabilities reasonably incurred by her in connection with or arising out of any
action, suit or proceeding in which she may be involved by reason of her having
been a director or officer of the Corporation or any of its subsidiaries or
affiliates (whether or not she continues to be a director or officer at the
time of incurring such expenses or liabilities). Such expenses and liabilities
shall include, but shall not be limited to, judgments, court costs and
attorneys’ fees and the cost of reasonable settlements. The parties hereto
acknowledge and agree that, for purposes of the right to indemnification by the
Corporation as provided by Article VI of the Corporation’s Amended and Restated
Bylaws, the Executive also is serving as a director and officer of the Bank at
the request of the Corporation.

 

(b)                                 Any indemnification
provided to the Executive by the Bank shall comply with 12 C.F.R. §545.121 or
any successor regulation applicable to the Bank.

 

24.                               Entire
Agreement. This Agreement embodies the entire agreement between the Employers
and the Executive with respect to the matters agreed to herein. All prior
agreements between the Employers and the Executive with respect to the matters
agreed to herein are hereby superseded and shall have no force or effect,
including the Prior Agreement, the Agreement between the parties dated January
20, 2005, and the agreement dated November 6, 2000 between Chester Valley
Bancorp, Inc., First Financial and the Executive.

 

25.                               Survival.
In the event the Executive’s employment is terminated during the term of
this Agreement, any rights given under this Agreement to the Executive or the
Employers, or any obligation imposed upon the Executive or the Employers under
this Agreement, based upon the nature of such termination shall survive the
Date of Termination, including those provisions in Sections 5, 6, 7 and 8 that
relate to the specific reason for the termination of employment. In addition,
the provisions of Sections 9, 10, 12, 13, 22, 23 (with respect to acts or
omissions occurring on or before the Date of Termination), 24 and 25 shall
survive the Date of Termination.

 

16

 

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

 

	
  Attest:

  	
  WILLOW
  FINANCIAL BANCORP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Joseph
  T. Crowley

  	
   

  	
  By:

  	
  /s/ A. Brent
  O’Brien

  
	
  Joseph T.
  Crowley

  	
   

  	
  A. Brent
  O’Brien

  
	
  Senior Vice
  President, Chief

  	
   

  	
  Chairman of
  the Compensation Committee

  
	
   

  	
  Financial
  Officer and Corporate

  	
   

  
	
   

  	
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
  WILLOW
  FINANCIAL  BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Joseph
  T. Crowley

  	
   

  	
  By:

  	
  /s/ A. Brent
  O’Brien

  
	
  Joseph T.
  Crowley

  	
   

  	
  A. Brent
  O’Brien

  
	
  Senior Vice
  President, Chief

  	
   

  	
  Chairman of
  the Compensation Committee

  
	
   

  	
  Financial
  Officer and Corporate

  	
   

  
	
   

  	
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donna M.
  Coughey

  
	
   

  	
   

  	
  Donna M.
  Coughey

  
					

 

17

 

Exhibit
A

 

GENERAL
RELEASE

 

1. Release of Claims by Executive.

 

(a)  In
consideration of the payments and benefits to be provided to Donna M. Coughey (“Executive”)
pursuant to the employment agreement, dated as of October 23, 2007, to which the
Executive, Willow Financial Bancorp, Inc., a Pennsylvania corporation (the “Corporation”),
and Willow Financial Bank, a federally chartered savings bank (the “Bank”) are
parties (the “Employment Agreement”), the sufficiency of which is
acknowledged hereby, the Executive, with the intention of binding herself and
her heirs, executors, administrators and assigns, does hereby release, remise,
acquit and forever discharge the Corporation and its subsidiaries and
affiliates (the “Corporation Affiliated Group”), their present and
former officers, directors, executives, agents, attorneys and employees, and
the successors, predecessors and assigns of each of the foregoing
(collectively, the “Corporation Released Parties”), of and from any and
all claims, actions, causes of action, complaints, charges, demands, rights,
damages, debts, sums of money, accounts, financial obligations, suits,
expenses, attorneys’ fees and liabilities of whatever kind or nature in law,
equity or otherwise, whether accrued, absolute, contingent, unliquidated or
otherwise and whether now known or unknown, suspected or unsuspected, which the
Executive, individually or as a member of a class, now has, owns or holds, or
has at any time heretofore had, owned or held, against any Corporation Released
Party in any capacity, including, without limitation, any and all claims (i)
arising out of or in any way connected with the Executive’s service to any
member of the Corporation Affiliated Group (or the predecessors thereof) in any
capacity, or the termination of such service in any such capacity, (ii) for
severance or vacation benefits, unpaid wages, salary or incentive payments,
(iii) for breach of contract, wrongful discharge, impairment of economic
opportunity, defamation, intentional infliction of emotional harm or other
tort, (iv) for any violation of applicable state and local labor and employment
laws (including, without limitation, all laws concerning unlawful and unfair
labor and employment practices) and (v) for employment discrimination under any
applicable federal, state or local statute, provision, order or regulation, and
including, without limitation, any claim under Title VII of the Civil Rights
Act of 1964 (“Title VII”), the Civil Rights Act of 1988, the Fair Labor
Standards Act, the Americans with Disabilities Act (“ADA”), the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), the Age
Discrimination in Employment Act (“ADEA”) and any similar or analogous
state statute, excepting only:

 

(A) 
the rights of the Executive under the Employment Agreement, including
her right to severance;

 

(B) 
the rights of the Executive (i) relating to any stock options and other
equity-based awards held by the Executive as of the date hereof (collectively,
the “Equity Arrangements”) and (ii) as a stockholder of the Corporation
or its affiliates;

 

1

 

(C) 
the right of the Executive to receive COBRA continuation coverage in
accordance with applicable law;

 

(D) 
rights to indemnification the Executive may have under (i) applicable
corporate law, (ii) the bylaws or articles of incorporation of any Corporation
Released Party, (iii) any other agreement between the Executive and a Corporation
Released Party, (iv) as an insured under any director’s and officer’s liability
insurance policy now or previously in force or (v) Section 6.08 of the
Agreement and Plan of Merger, dated as of January 20, 2005, between the Corporation
and Chester Valley Bancorp, Inc.; and

 

(E) 
claims for benefits under any health, disability, retirement, life
insurance or other, similar “employee benefit plan” (within the meaning of
Section 3(3) of ERISA) of the Corporation Affiliated Group (the “Corporation
Benefit Plans”).

 

(b)  The
Executive acknowledges and agrees that the release of claims set forth in this
Section 1 is not to be construed in any way as an admission of any liability
whatsoever by any Corporation Released Party, any such liability being
expressly denied.

 

(c) 
The release of claims set forth in this Section 1 applies to any relief
no matter how called, including, without limitation, wages, back pay, front
pay, compensatory damages, liquidated damages, punitive damages, damages for
pain or suffering, costs, and attorney’s fees and expenses.

 

(d)  The
Executive specifically acknowledges that her acceptance of the terms of the
release of claims set forth in this Section 1 is, among other things, a
specific waiver of her rights, claims and causes of action under Title VII,
ADEA, ADA and any state or local law or regulation in respect of discrimination
of any kind.

 

(e)  The
Executive shall have a period of 21 days to consider whether to execute this
General Release. To the extent the Executive has executed this General Release
within less than twenty-one (21) days after its delivery to her, the
Executive hereby acknowledges that her decision to execute this General Release
prior to the expiration of such twenty-one (21) day period was entirely
voluntary. If Executive accepts the terms hereof and executes this General
Release, she may thereafter, for a period of 7 days following (and not
including) the date of execution, revoke this General Release. If no such
revocation occurs, this General Release shall become irrevocable in its
entirety, and binding and enforceable against the Executive, on the day next
following the day on which the foregoing seven-day period has elapsed. Any
revocation of this General Release shall be deemed for all purposes a
revocation of this General Release in its entirety.

 

(f)  The
Executive acknowledges and agrees that she has not, with respect to any
transaction or state of facts existing prior to the date hereof, filed any
complaints, charges or lawsuits against any Company Released Party with any
governmental agency, court or tribunal.

 

2. Effect of Unenforceability of Release.
In addition to any other remedy available to the Corporation hereunder, in the
event that, as a result of a challenge brought by an Employee Released Party
(as defined below), the release of claims set forth in Section 1 becomes null
and void or is otherwise determined not to be enforceable, then the Corporation’s
obligation to make any 

 

2

 

additional
payments or to provide any additional benefits under the Severance Agreement
shall immediately cease to be of any force and effect, and Executive shall
promptly return to the Corporation any payments or benefits the provision of
which by the Corporation was conditioned on the enforceability of this General
Release.

 

3. Release of Claims by the Corporation.

 

(a)  
The Corporation, with the intention of binding itself and its
subsidiaries, affiliates, predecessors and successors and their directors and
officers (collectively, the “Releasing Entities”), does hereby release, remise,
acquit and forever discharge the Executive and her heirs, estate, executors,
administrators and assigns (collectively, the “Employee Released Parties”),
of and from any and all claims, actions, causes of action, complaints, charges,
demands, rights, damages, debts, sums of money, accounts, financial
obligations, suits, expenses, attorneys’ fees and liabilities of whatever kind
or nature in law, equity or otherwise, whether accrued, absolute, contingent,
unliquidated or otherwise and whether now known or unknown, suspected or
unsuspected, which the Corporation and its subsidiaries, affiliates,
predecessors and successors, individually or as a member of a class, now have,
own or hold, or have at any time heretofore had, owned or held, against any
Employee Released Party, excepting only:

 

(A) 
rights of the Releasing Entities under this General Release, the post-termination
of employment obligations of the Employment Agreement, the Equity Arrangements
and the Corporation Benefit Plans; and

 

(B) 
rights of the Releasing Entities arising by reason of the Executive
having committed a crime or an act or omission to act which constitutes fraud,
willful misconduct or gross negligence.

 

(b) 
The Releasing Entities acknowledge and agree that the release of claims
set forth in this Section 3 is not to be construed in any way as an admission
of any liability whatsoever by any Employee Released Party, any such liability
being expressly denied.

 

(c) 
The release of claims set forth in this Section 3 applies to any relief
no matter how called, including, without limitation, compensatory damages,
liquidated damages, punitive damages, damages for pain or suffering, costs, and
attorney’s fees and expenses.

 

(d) 
Nothing herein shall be deemed, nor does anything contained herein
purport, to be a waiver of any right or claim or cause of action which by law
the Corporation is not permitted to waive.

 

(e) 
The Corporation acknowledges and agrees that it has not, with respect to
any transaction or state of facts existing prior to the date hereof, filed any
complaints, charges or lawsuits against any Employee Released Party with any
governmental agency, court or tribunal.

 

4. Nondisparagement. The Executive
agrees not to make any disparaging statements about the Corporation Released
Parties or the Corporation Affiliated Group’s business practices, operations or
personnel policies and practices to any of the Corporation Affiliated Group’s 

 

3

 

customers,
clients, competitors, suppliers, directors, consultants, employees, former
employees, or the press or other media in any country. Similarly, the Corporation
agrees to instruct its executive officers and directors not to make any
disparaging statement about the Executive or the Executive’s performance of her
duties and responsibilities while employed with the Corporation Affiliated
Group to any of the Corporation Affiliated Group’s customers, client’s,
competitors, suppliers, directors, consultants, employees, former employees or
the press or other media in any country.

 

5. Counterparts. This General Release
may be executed in counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument.

 

6. Successors. This General Release
shall be binding upon any and all successors and assigns of the Executive and
the Corporation.

 

7. Governing Law. Except for issues or
matters as to which federal law is applicable, this General Release shall be
construed in accordance with and governed by the laws of the Commonwealth of
Pennsylvania.

 

 

IN WITNESS
WHEREOF, this General Release has been signed by or on behalf of each of the
Parties, all as of the date set forth below.

 

	
   

  	
  WILLOW FINANCIAL BANCORP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Executive

  	
  By:

  
	
   

  	
  Its:

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  Dated:

  	
   

  	
   

  
								

 

4Exhibit 10.2

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDED
AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of October 23,
2007 and is between Willow Financial Bancorp, Inc., a Pennsylvania corporation
(the “Corporation”), Willow Financial Bank, a federally chartered savings bank and
wholly owned subsidiary of the Corporation (the “Bank”), and Joseph T. Crowley (the
“Executive”).

 

WITNESSETH

 

WHEREAS, the
Corporation was previously known as Willow Grove Bancorp, Inc., and the Bank
was previously known as Willow Grove Bank;

 

WHEREAS, the
Executive is currently employed as the Chief Financial Officer of the
Corporation and the Bank, and the Corporation, the Bank and the Executive have
previously entered into an employment agreement dated July 15, 2005 (the “Prior
Agreement”);

 

WHEREAS, the
Corporation and the Bank (together the “Employers”) desire to amend and restate
the Prior Agreement in order to make changes to comply with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), as well as certain
other changes; and

 

WHEREAS, in
order to induce the Executive to remain in the employ of the Employers and in
consideration of the Executive’s agreeing to remain in the employ of the
Employers, the parties desire to specify the severance benefits which shall be
due the Executive by the Employers in the event that his employment with the
Employers is terminated under specified circumstances;

 

NOW THEREFORE,
in consideration of the mutual agreements herein contained, and upon the other
terms and conditions hereinafter provided, the parties hereby agree as follows:

 

1.                                      Definitions.
The following words and terms shall have the meanings set forth below for
the purposes of this Agreement:

 

(a)                                  Average Annual Compensation. The Executive’s “Average Annual
Compensation” for purposes of this Agreement shall be deemed to mean the
average amount of Base Salary and cash bonus paid to the Executive by the
Employers or any subsidiary thereof during the most recent five calendar years
preceding the year in which the Date of Termination occurs (or such shorter
period as the Executive was employed).

 

(b)                                 Base Salary. “Base Salary” shall have the
meaning set forth in Section 3(a) hereof.

 

(c)                                  Cause. Termination of the Executive’s
employment for “Cause” shall mean termination because of personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of this
Agreement.

 

 

(d)                                 Change in Control. “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.

 

(e)                                  Date of Termination. “Date of Termination”
shall mean (i) if the Executive’s employment is terminated for Cause, the date on
which the Notice of Termination is given, (ii) if the Executive’s employment is
terminated due to his death, the date of death, and (iii) if the Executive’s
employment is terminated for any other reason, the date specified in such
Notice of Termination.

 

(f)                                    Disability. “Disability” shall mean the
Executive (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 Employers.

 

(g)                                 Effective Date. The Effective Date of this Agreement shall
mean the date first written above.

 

(h)                                 Good Reason. Termination by the Executive
of the Executive’s employment for “Good Reason” shall mean termination by the
Executive  based on the occurrence of any of the
following events:

 

(i) any material breach of this Agreement by the Employers, including
without limitation any of the following: (A) a material diminution in the
Executive’s base compensation, (B) a material diminution in the Executive’s
authority, duties or responsibilities as prescribed in Section 2, or (C) a
material diminution in the authority, duties or responsibilities of the officer
to whom the Executive is required to report, or

 

(ii) any material change in the geographic location at which the
Executive must perform his services under this Agreement;

 

provided, however, that prior
to any termination of employment for Good Reason, the Executive must first
provide written notice to the Employers within ninety (90) days of the initial
existence of the condition, describing the existence of such condition, and the
Employers shall thereafter have the right to remedy the condition within thirty
(30) days of the date the Employers received the written notice from the
Executive. If the Employers remedy the condition within such thirty (30) day
cure period, then no Good Reason shall be deemed to exist with respect to such
condition. If the Employers do not remedy the condition within such thirty (30)
day cure period, then the Executive may deliver a Notice of Termination for
Good Reason at any time within sixty (60) days following the expiration of such
cure period.

 

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

 

2

 

(j)                                     Notice of Termination. Any purported
termination of the Executive’s employment by the Employers for any reason,
including without limitation for Cause, Disability or Retirement, or by the
Executive for any reason, including without limitation for Good Reason, shall be
communicated by a written “Notice of Termination” to the other party hereto. For
purposes of this Agreement, a “Notice of Termination” shall mean a dated notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive’s employment under the
provision so indicated, (iii) specifies a Date of Termination, which shall be
not less than thirty (30) nor more than ninety (90) days after such Notice of
Termination is given, except in the case of the Employers’ termination of the Executive’s
employment for Cause, which shall be effective immediately, and except as set
forth in Section 19(a) hereof; and (iv) is given in the manner specified in
Section 11 hereof.

 

(k)                                  Retirement. “Retirement” shall mean
voluntary termination by the Executive in accordance with the Employers’
retirement policies, including early retirement, generally applicable to their
salaried employees.

 

2.                                      Term
of Employment.

 

(a)                                  The
Employers hereby employ the Executive as Chief Financial Officer, and the
Executive hereby accepts said employment and agrees to render such services to the
Employers on the terms and conditions set forth in this Agreement. Unless
extended as provided in this Section 2, this Agreement shall terminate on June
30, 2008. Prior to July 1, 2008 and each July 1 thereafter, the Boards of
Directors of the Employers shall consider and review (after taking into account
all relevant factors, including the Executive’s performance hereunder) a
one-year extension of the term of this Agreement, and the term shall continue
to extend each July 1 if the Boards of Directors approve  such extension unless the Executive gives
written notice to the Employers of the Executive’s election not to extend the
term, with such written notice to be given not less than thirty (30) days prior
to any such July 1. If the Boards of Directors of the Employers elect not to
extend the term, they shall give written notice of such decision to the
Executive not less than thirty (30) days prior to any such July 1. If any party
gives timely notice that the term will not be extended as of any July 1, then
this Agreement shall terminate at the conclusion of its remaining term. References
herein to the term of this Agreement shall refer both to the initial term and
successive terms.

 

(b)                                 During
the term of this Agreement, the Executive shall perform such executive services
for the Employers as may be consistent with his titles and from time to time
assigned to him by the Boards of Directors of the Employers. During the term of
this Agreement, the Executive shall devote his best efforts and his full time
effort to the affairs and business of the Employers.

 

3.                                      Compensation
and Benefits.

 

(a)                                  Base Salary. The Employers shall compensate and pay the
Executive for his services during the term of this Agreement at a minimum base
salary of $222,000 per year (“Base Salary”), which may be increased from time
to time in such amounts as may be determined by the Boards of Directors of the
Employers and may not be decreased without the Executive’s express written 

 

3

 

consent. In addition to his Base
Salary, the Executive shall be entitled to receive during the term of this
Agreement such bonus payments as may be determined by the Boards of Directors
of the Employers.

 

(b)                                 Benefit Plans. During the term of this Agreement, the
Executive shall be entitled to participate in and receive the benefits of any
pension or other retirement benefit plan, profit sharing, stock option,
employee stock ownership, or other plans, benefits and privileges given to
employees and executives of the Employers, to the extent commensurate with his
then duties and responsibilities, as fixed by the Boards of Directors of the
Employers. The Employers shall not make any changes in such plans, benefits or
privileges which would adversely affect the Executive’s rights or benefits
thereunder, unless such change occurs pursuant to a program applicable to all
executive officers of the Employers and does not result in a disproportionately
greater adverse change in the rights of or benefits to the Executive as
compared with any other executive officer of the Employers. Nothing paid to the
Executive under any plan or arrangement presently in effect or made available
in the future shall be deemed to be in lieu of the salary payable to the
Executive pursuant to Section 3(a) hereof.

 

(c)                                  Paid Time Off. During the term of this Agreement, the
Executive shall be entitled to paid time off in accordance with the policies as
established from time to time by the Boards of Directors of the Employers. The
Executive shall not be entitled to receive any additional compensation from the
Employers for failure to utilize such paid time off, nor shall the Executive be
able to accumulate unused paid time off from one year to the next, except to
the extent authorized by the Boards of Directors of the Employers.

 

(d)                                 Proration. The Executive’s compensation, benefit and
expenses shall be paid by the Corporation and the Bank in the same proportion
as the time and services actually expended by the Executive on behalf of each
respective Employer.

 

4.                                      Expenses.
The Employers shall reimburse the Executive or otherwise provide for or pay
for all reasonable expenses incurred by the Executive in furtherance of or in
connection with the business of the Employers, including, but not by way of
limitation, automobile expenses and other traveling expenses, subject to such
reasonable documentation and other limitations as may be established by the
Boards of Directors of the Employers. If such expenses are paid in the first
instance by the Executive, the Employers shall reimburse the Executive
therefor. Such reimbursement shall be paid promptly by the Employers and in any
event no later than March 15 of the year immediately following the year in
which such expenses were incurred.

 

5.                                      Termination.

 

(a)                                  General. The Employers shall have the right, at any time
upon prior Notice of Termination, to terminate the Executive’s employment
hereunder for any reason, including without limitation termination for Cause,
Disability or Retirement, and the Executive shall have the right, upon prior
Notice of Termination, to terminate his employment hereunder for any reason.

 

4

 

(b)                                 For Cause. In the event that the Executive’s employment is
terminated by the Employers for Cause, the Executive shall have no right
pursuant to this Agreement to compensation or other benefits for any period
after the applicable Date of Termination.

 

(c)                                  Voluntary Termination by the Executive. In the event the
Executive terminates his employment hereunder other than for death, Disability,
Retirement, Good Reason or an uncured material breach of this Agreement by the
Employers, then the Executive shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the applicable Date of
Termination.

 

(d)                                 Death. In the event the Executive’s employment hereunder is
terminated due to death, neither the Executive nor his estate or named
beneficiaries shall have any right pursuant to this Agreement to compensation
or other benefits for any period after the Date of Termination.

 

(e)                                  Disability. In the event the Executive’s employment
hereunder is terminated due to Disability, the Executive shall be entitled to
receive any disability benefits provided under any disability plan maintained
by the Employers. Other than as set forth above, the Executive shall have no
right pursuant to this Agreement to compensation or other benefits for any
period after the Date of Termination.

 

(f)                                    Retirement. In the event the Executive’s employment
hereunder is terminated due to Retirement, the Executive shall have no right
pursuant to this Agreement to compensation or other benefits for any period
after the Date of Termination.

 

(g)                                 Involuntary Termination. In the event that (i) the Executive’s
employment is terminated by the Employers for other than Cause, Disability,
Retirement or the Executive’s death or (ii) such employment is terminated by
the Executive for Good Reason, then the Employers shall pay to the Executive,
within thirty (30) days following the Date of Termination, a cash severance
amount equal to one times the Executive’s current Base Salary; provided,
however, that this Section 5(g) shall not be applicable if the termination of
employment occurs concurrently with or subsequent to a Change in Control.

 

(h)                                 Change in Control Termination. In the event that (i) the
Executive’s employment is terminated concurrently with or within twelve (12)
months following a Change in Control for other than Cause, Disability,
Retirement or the Executive’s death or (ii) the Executive elects to terminate his
employment for Good Reason, then the Employers shall, subject to the provisions
of Section 6 hereof, if applicable,

 

(A)                              pay
to the Executive, within thirty (30) days following the Date of Termination, a
cash severance amount equal to two (2) times the Executive’s Average Annual
Compensation;

 

(B)                                maintain and provide
for a period ending at the earlier of (i) one year subsequent to the Date of
Termination or (ii) the date of the Executive’s full-time employment by another
employer (provided that the Executive is entitled under the terms of such
employment to benefits substantially similar to those described in this
subparagraph 

 

5

 

(B)), at no cost to the Executive, the Executive’s continued
participation in all group insurance, life insurance, health and accident
insurance, and disability insurance offered by the Employers in which the
Executive was participating immediately prior to the Date of Termination;
provided that any insurance premiums payable by the Employers or any successors
pursuant to this Section 5(h)(B) shall be payable at such times and in such
amounts as if the Executive was still an employee of the Employers, subject to
any increases in such amounts imposed by the insurance company or COBRA, and
the amount of insurance premiums required to be paid by the Employers in any
taxable year shall not affect the amount of insurance premiums required to be
paid by the Employers in any other taxable year; and provided further that if
the Executive’s participation in any group insurance plan is barred, the
Employers shall either arrange to provide the Executive with insurance benefits
substantially similar to those which the Executive was entitled to receive
under such group insurance plan or, if such coverage cannot be obtained, pay a
lump sum cash equivalency amount within thirty (30) days following the Date of
Termination based on the annualized rate of premiums being paid by the
Employers as of the Date of Termination; and

 

(C)                                pay
to the Executive, in a lump sum within thirty (30) days following the Date of
Termination, a cash amount equal to the projected cost to the Employers of
providing benefits to the Executive for a period of twelve (12) months pursuant
to any other employee benefit plans, programs or arrangements offered by the
Employers in which the Executive was entitled to participate immediately prior
to the Date of Termination (excluding (y) stock option plans, restricted stock
plans and employee stock ownership plans of the Employers and (z) bonuses and other
items of cash compensation), with the projected cost to the Employers to be
based on the costs incurred for the calendar year immediately preceding the
year in which the Date of Termination occurs and with any automobile-related
costs to exclude any depreciation on Bank-owned automobiles.

 

6.                                      Limitation
of Benefits under Certain Circumstances. If the payments and benefits
pursuant to Section 5 hereof, either alone or together with other payments and
benefits which the Executive has the right to receive from the Employers and their
affiliates, would constitute a “parachute payment” under Section 280G of the
Code, then the payments and benefits payable by the Employers pursuant to
Section 5 hereof shall be reduced by the minimum amount necessary to result in
no portion of the payments and benefits payable by the Employers under Section
5 being non-deductible to the Employers pursuant to Section 280G of the Code
and subject to the excise tax imposed under Section 4999 of the Code. If the
payments and benefits under Section 5 are required to be reduced, the cash
severance shall be reduced first, followed by a reduction in the fringe
benefits. The determination of any reduction in the payments and benefits to be
made pursuant to Section 5 shall be based upon the opinion of independent
counsel selected by the Employers and paid by the Employers. Such counsel shall
promptly prepare the foregoing opinion, but in no event later than thirty (30)
days from the Date of Termination, and may use such actuaries as such counsel
deems necessary or advisable for the purpose. Nothing contained in this Section
6 shall result in a reduction of any payments or benefits to which the
Executive may be entitled upon termination of employment under any
circumstances other than as specified in this Section 6, or a reduction in the
payments and benefits specified in Section 5 below zero.

 

6

 

7.                                      Mitigation;
Exclusivity of Benefits.

 

(a)                                  The
Executive shall not be required to mitigate the amount of any benefits
hereunder by seeking other employment or otherwise, nor shall the amount of any
such benefits be reduced by any compensation earned by the Executive as a
result of employment by another employer after the Date of Termination or otherwise,
except as set forth in Section 5(h)(B)(ii) hereof.

 

(b)                                 The
specific arrangements referred to herein are not intended to exclude any other
benefits which may be available to the Executive upon a termination of
employment with the Employers pursuant to employee benefit plans of the
Employers or otherwise.

 

8.                                      Withholding.
All payments required to be made by the Employers hereunder to the
Executive shall be subject to the withholding of such amounts, if any, relating
to tax and other payroll deductions as the Employers may reasonably determine
should be withheld pursuant to any applicable law or regulation.

 

9.                                      Competitive
Activities.

 

(a)                                  The
Executive agrees and acknowledges that by virtue of his employment hereunder,
he will maintain an intimate knowledge of the activities and affairs of the
Employers, including trade secrets, plans, business plans, strategies,
projections, market studies, customer information, employee records and other
internal proprietary and confidential information and matters (collectively “Confidential
Information”). As a result, and also because of the special, unique and
extraordinary services that the Executive is capable of performing for the
Employers or one of its competitors, the Executive recognizes that the services
to be rendered by him hereunder are of a character giving them a peculiar
value, the loss of which cannot be adequately or reasonably compensated for by
damages.

 

(b)                                 Except
for the purpose of carrying out his duties hereunder, the Executive will not
remove or retain, or make copies or reproductions of, any figures, documents,
records, discs, computer records, calculations, letters, papers, or recorded or
documented information of any type or description relating to the business of the
Employers. The Executive agrees that he will not divulge to others any
information (whether or not documented or recorded) or data acquired by him
while in the Employers’ employ relating to methods, processes or other trade
secrets or other Confidential Information.

 

(c)                                  The
Executive agrees that the Employers are, and shall be, the sole and exclusive
owner of all improvements, ideas and suggestions, whether or not subject to
patent or trademark protection, and all copyrightable materials which are
conceived by the Executive during his employment, which relate to the business
of the Employers, which are confidential, or which are not readily
ascertainable from persons or other sources outside the Employers.

 

(d)                                 Unless
the Executive’s employment is terminated in connection with or following a
Change in Control, then for a period of one year after the termination of
employment, the Executive shall not, directly or indirectly, solicit, induce,
encourage or attempt to influence any client, customer or employee of the
Employers to cease to do business with, or to terminate any employee’s 

 

7

 

employment with, the Employers.
The Executive shall not be subject to any of the limitations set forth in the
preceding sentence if the Executive’s employment is terminated in connection
with or following a Change in Control.

 

(e)                                  The
Executive agrees that during the term of his employment hereunder, except with
the express consent of the Employers, he will not, directly or indirectly,
engage or participate in, become a director of, or render advisory or other
services for, or in connection with, or become interested in, or make any
financial investment in any firm, corporation, business entity or business
enterprise competitive with or to any business of the Employers; provided,
however, that the Executive shall not thereby be precluded or prohibited from
owning passive investments, including investments in the securities of other
financial institutions, so long as such ownership does not require him to devote
substantial time to management or control of the business or activities in
which he has invested. Notwithstanding anything to the contrary contained in
this Agreement, during the term of this Agreement, the Executive shall have no
employment contract or other written or oral agreement concerning employment as
an officer of a savings bank or any other financial institution or financial
institution holding company nor with any other entity or person other than the
Bank or the Corporation. The provisions of this Section 9(e) shall not be
applicable if the Executive’s employment is terminated in connection with or
following a Change in Control.

 

(f)                                    The
Employers shall be entitled to immediate injunctive or other equitable relief
to restrain the Executive from failing to comply with any obligation under this
Section 9 or from rendering his services to persons or entities than the
Employers, in addition to any other remedies to which the Employers may be
entitled under law. The right to such injunctive or other equitable relief
shall survive the termination by the Employers of the Executive’s employment.

 

(g)                                 The
Executive acknowledges that the restrictions contained in this Section 9 are
reasonable and necessary to protect the legitimate interests of the Employers
and that any violation thereof would result in irreparable injuries to the
Employers. The Executive acknowledges that, if the Executive violates any of
these restrictions, the Employers are entitled to obtain from any court of
competent jurisdiction, preliminary and permanent injunctive relief as well as
damages, and an equitable accounting of any earnings, profits and other
benefits arising from such violation, which rights shall be cumulative and in
addition to any other rights or remedies to which the Employers may be entitled.
The Executive further acknowledges that the provisions of Sections 9(a), (b),
(c), (f) and (g) shall remain in full force and effect beyond the termination
of the Executive’s employment for any reason, including but not limited to
termination in connection with or following a Change in Control.

 

10.                               Assignability.
The Employers may assign this Agreement and their rights and obligations
hereunder in whole, but not in part, to any corporation, bank or other entity
with or into which the Employers may hereafter merge or consolidate or to which
the Employers may transfer all or substantially all of their assets, if in any
such case said corporation, bank or other entity shall by operation of law or
expressly in writing assume all obligations of the Employers hereunder as fully
as if it had been originally made a party hereto, but may not otherwise assign
this Agreement or their rights and obligations hereunder. The Executive may not
assign or transfer this Agreement or any rights or obligations hereunder.

 

8

 

11.                               Notice.
For the purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by first-class certified or registered
mail, return receipt requested, postage prepaid, addressed to the respective
addresses set forth below:

 

To the Employers:                                                          Secretary

Willow Financial Bancorp, Inc.

170 South Warner Road

Wayne, Pennsylvania  19087

 

To the Executive:                                                               Joseph
T. Crowley

At his last address on file with

the Employers

 

12.                               Amendment;
Waiver. No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer or officers as may be
specifically designated by the Boards of Directors of the Employers to sign on their
behalf. No waiver by any party hereto at any time of any breach by any other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. In addition, notwithstanding anything in this Agreement to the
contrary, the Employers may amend in good faith any terms of this Agreement,
including retroactively, in order to comply with Section 409A of the Code.

 

13.                               Governing
Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the United States where applicable
and otherwise by the substantive laws of the Commonwealth of Pennsylvania.

 

14.                               Nature
of Obligations. Nothing contained herein shall create or require the Employers
to create a trust of any kind to fund any benefits which may be payable
hereunder, and to the extent that the Executive acquires a right to receive
benefits from the Employers hereunder, such right shall be no greater than the
right of any unsecured general creditor of the Employers.

 

15.                               Headings.
The section headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.

 

16.                               Validity.
The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provisions of this
Agreement, which shall remain in full force and effect.

 

17.                               Changes in Statutes or Regulations. If any statutory or
regulation provision referenced herein is subsequently changed or re-numbered,
or is replaced by a separate provision, then the references in this Agreement
to such statutory or regulatory provision shall be deemed to be a reference to
such section as amended, re-numbered or replaced.

 

9

 

18.                               Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.

 

19.                               Regulatory
Actions. The following provisions shall be applicable to the parties to the
extent that they are required to be included in employment agreements between a
savings association and its employees pursuant to Section 563.39(b) of the
Regulations Applicable to All Savings Associations, 12 C.F.R. §563.39(b), or
any successor thereto, and shall be controlling in the event of a conflict with
any other provision of this Agreement, including without limitation Section 5
hereof.

 

(a)                                  The
Bank’s Board of Directors may terminate the Executive’s employment at any time,
but any termination by the Bank’s Board of Directors, other than termination
for Cause, shall not prejudice the Executive’s right to compensation or other
benefits under this Agreement.

 

(b)                                 If
the Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Employers’ affairs by a notice served under
Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit Insurance Act (“FDIA”)
(12 U.S.C. §1818(e)(3) and 1818(g)(1)), the Employers’ obligations under this
Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the
Employers may, in their discretion:  (i)
pay the Executive all or part of the compensation withheld while their
obligations under this Agreement were suspended, and (ii) reinstate (in whole
or in part) any of their obligations which were suspended.

 

(c)                                  If
the Executive is removed from office and/or permanently prohibited from
participating in the conduct of the Employers’ affairs by an order issued under
Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C. §1818(e)(4) and
(g)(1)), all obligations of the Employers under this Agreement shall terminate
as of the effective date of the order, but vested rights of the Executive and the
Employers as of the date of termination shall not be affected.

 

(d)                                 If
the Bank is in default, as defined in Section 3(x)(1) of the FDIA (12 U.S.C. §1813(x)(1)),
all obligations under this Agreement shall terminate as of the date of default,
but vested rights of the Executive and the Employers as of the date of
termination shall not be affected.

 

(e)                                  All
obligations under this Agreement shall be terminated pursuant to 12 C.F.R. §563.39(b)(5),
except to the extent that it is determined that continuation of the Agreement
for the continued operation of the Employers is necessary: (i) by the Director
of the Office of Thrift Supervision (“OTS”), or his/her designee, at the time
the Federal Deposit Insurance Corporation (“FDIC”) enters into an agreement to
provide assistance to or on behalf of the Bank under the authority contained in
Section 13(c) of the FDIA (12 U.S.C. §1823(c)); or (ii) by the Director of the
OTS, or his/her designee, at the time the Director or his/her designee approves
a supervisory merger to resolve problems related to operation of the Bank or
when the Bank is determined by the Director of the OTS to be in an unsafe or
unsound condition, but vested rights of the Executive and the Employers as of
the date of termination shall not be affected.

 

10

 

20.                               Indemnification.

 

(a)                                  The Corporation shall
provide the Executive (including his heirs, executors and administrators) with
coverage under a directors’ and officers’ liability insurance policy at its
expense and shall indemnify the Executive (and his heirs, executors and
administrators) to the fullest extent permitted by law against all expenses and
liabilities reasonably incurred by him in connection with or arising out of any
action, suit or proceeding in which he may be involved by reason of his having
been a director or officer of the Corporation or any of its subsidiaries or
affiliates (whether or not he continues to be a director or officer at the time
of incurring such expenses or liabilities). Such expenses and liabilities shall
include, but shall not be limited to, judgments, court costs and attorneys’
fees and the cost of reasonable settlements. The parties hereto acknowledge and
agree that, for purposes of the right to indemnification by the Corporation as
provided by Article VI of the Corporation’s Amended and Restated Bylaws, the
Executive also is serving as an officer of the Bank at the request of the Corporation.

 

(b)                                 Any indemnification
provided to the Executive by the Bank shall comply with 12 C.F.R. §545.121 or
any successor regulation applicable to the Bank.

 

21.                               Regulatory
Prohibition. Notwithstanding any other provision of this Agreement to the
contrary, any payments made to the Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with Section
18(k) of the FDIA (12 U.S.C. §1828(k)) and the regulations promulgated
thereunder, including 12 C.F.R. Part 359. In the event of the Executive’s
termination of employment with the Bank for Cause, all employment relationships
and managerial duties with the Bank shall immediately cease regardless of
whether the Executive remains in the employ of the Corporation following such
termination. Furthermore, following such termination for Cause, the Executive
will not, directly or indirectly, influence or participate in the affairs or
the operations of the Bank, and any compensation and benefits which the
Executive may continue to receive from the Corporation pursuant to Section 3
hereof shall be adjusted as appropriate so that they are commensurate solely
with the Executive’s duties to the Corporation.

 

22.                               Payment
of Costs and Legal Fees and Reinstatement of Benefits. In the event any
dispute or controversy arising under or in connection with the Executive’s
termination is resolved in favor of the Executive, whether by judgment,
arbitration or settlement, the Executive shall be entitled to the payment of
(a) all legal fees incurred by the Executive in resolving such dispute or controversy,
and (b) any back-pay, including Base Salary, bonuses and any other cash
compensation, fringe benefits and any compensation and benefits due to the
Executive under this Agreement, within thirty (30) days following the date such
judgment, arbitration or settlement becomes final and non-appealable.

 

23.                               Entire
Agreement. This Agreement embodies the entire agreement between the
Employers and the Executive with respect to the matters agreed to herein. All
prior agreements between the Employers and the Executive with respect to the
matters agreed to herein are hereby superseded and shall have no force or
effect, including the Prior Agreement, the agreement between the parties dated
March 23, 2005 and the agreement dated July 29, 2003 between Chester Valley
Bancorp, Inc., First Financial and the Executive.

 

11

 

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

 

 

	
  Attest:

  	
  WILLOW
  FINANCIAL BANCORP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Joseph
  T. Crowley

  	
   

  	
  By:

  	
  /s/ Donna M.
  Coughey

  
	
  Joseph T.
  Crowley

  	
   

  	
  Donna M.
  Coughey

  
	
  Senior Vice
  President, Chief

  	
   

  	
  President
  and Chief Executive Officer

  
	
   

  	
  Financial
  Officer and

  	
   

  	
   

  
	
   

  	
  Corporate Secretary

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
  WILLOW
  FINANCIAL  BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Joseph
  T. Crowley

  	
   

  	
  By:

  	
  /s/ Donna M.
  Coughey

  
	
  Joseph T.
  Crowley

  	
   

  	
  Donna M.
  Coughey

  
	
  Senior Vice
  President, Chief

  	
   

  	
  President
  and Chief Executive Officer

  
	
   

  	
  Financial
  Officer and 

  	
   

  
	
   

  	
  Corporate Secretary

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph
  T. Crowley

  
	
   

  	
   

  	
  Joseph T.
  Crowley

  
					

 

12

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