Exhibit 10.4
May 20,
2008
Harleysville National
Corporation
483 Main
Street
Harleysville,
Pennsylvania 19438
Ladies and
Gentlemen:
Harleysville
National Corporation (“HNC”) and Willow Financial
Bancorp, Inc. (“WFB”) are entering into
concurrently herewith an Agreement and Plan of Merger to be dated
as of May 20, 2008 (the “Agreement”).
Pursuant to the
proposed Agreement, and subject to the terms and conditions set
forth therein: (a) WFB will merge with and into HNC,
with HNC surviving the merger (the “Merger”);
(b) shareholders of WFB will receive shares of HNC common
stock in exchange for their shares of WFB common stock owned on the
closing date plus cash in lieu of fractional share interests; and
(c) holders of WFB options will receive stock options
exercisable for common stock of HNC in exchange for options
exercisable for common stock of WFB outstanding on the closing
date.
I have been
advised that I may be deemed to be an “affiliate” of
WFB for purposes of certain rules issued by the Securities and
Exchange Commission (the “SEC”) under the Securities
Act of 1933.
I understand that
HNC is requiring, as a condition to its execution and delivery to
WFB of the Agreement, that I execute and deliver to HNC this WFB
Letter Agreement.
Intending to be
legally bound hereby, I irrevocably agree and represent as
follows:
1.
I agree to vote or cause to be voted for approval and adoption of
the Agreement and the transactions contemplated thereby all shares
of WFB common stock over which I have or exercise sole or shared
voting power, including those held in a voting trust, individually
or, to the extent of my proportionate interest, jointly with other
persons and will use my reasonable efforts to cause any shares of
WFB over which I share voting power, including those held in a
voting trust jointly with other persons, to be voted for the
approval and adoption of the Agreement and the transactions
contemplated thereby.
2.
I agree not to offer, sell, transfer or otherwise dispose of, or to
permit the offer, sale, transfer or other disposition of, any
shares of WFB common stock over which I have or exercise sole or
shared voting power or any options that I hold to acquire shares of
WFB common stock; provided, however, that (i) I may make a
bona fide gift of shares or transfer of shares for estate
planning or similar purposes prior to that date as long as the
recipient agrees to vote such shares for approval and adoption of
the Agreement and agrees, in writing, to be bound by all the terms
hereof as if an original signatory hereto, and (ii) in the
case of exercising any options, as part of a cashless exercise
transaction, to the extent permissible under the respective stock
options and stock option plans.
3.
I agree, if I am an optionholder, to exchange my options to acquire
shares of common stock of WFB for options to acquire such number of
shares of common stock of HNC, and at such per share exercise
price, as is provided in Section 2.05 of the Agreement, and
otherwise, except as provided under the terms of the Agreement, on
the same terms and conditions as the exchanged WFB options (unless
I shall have exercised any such option prior to the completion of
the Merger). I agree that if I exercise my options prior to
the completion of the Merger, any shares of WFB common stock
acquired shall be subject to this WFB Letter Agreement.
4.
I have sole or shared voting power over the number of shares of WFB
common stock, and hold stock options for the number of shares of
WFB common stoc
