**EXHIBIT 10.7**

 

**FOX CHASE BANKCHANGE IN CONTROL AGREEMENT**

 

**THIS AGREEMENT** (“Agreement”),as amended and restated, is hereby entered into as of  October 1, 2008, by and between **FOX CHASE BANK** (the “Bank”), a federally chartered savingsbank, **RICHARD FUCHS** (“Executive”) and **FOX CHASE BANCORP, INC.** (the “Company”), afederally-chartered corporation and the holding company of the Bank, asguarantor.

 

**WHEREAS,** the Bankrecognizes the importance of Executive to the Bank’s operations and wishes toprotect his position with the Bank in the event of a change in control of theBank or the Bank for the period provided for in this Agreement; and

 

**WHEREAS,** Executiveand the Bank desire to enter into an agreement setting forth the terms andconditions of payments due to Executive in the event of a change in control andthe related rights and obligations of each of the parties.

 

**WHEREAS,** Executiveand the Boards of Directors of the Company and the Bank desire to enter into arevised change in control agreement setting forth the terms and conditions ofthe continuing employment of Executive and the related rights and obligationsof each of the parties and to bring the Agreement into compliance with Section 409Aof the Internal Revenue Code of 1986, as amended (the “Code”) and theregulations and guidance issued with respect to 409A of the Code.

 

**NOW, THEREFORE,** inconsideration of the promises and mutual covenants herein contained, it ishereby agreed as follows:

 

**1.****             TERMOF AGREEMENT.**

 

(a)           Theterm of this Agreement shall be (i) the initial term of this Agreement,consisting of the period commencing on the date of this Agreement (the “EffectiveDate”) and ending on the second anniversary of the Effective Date, plus (ii) anyand all extensions of the initial term made pursuant to this Section 1.

 

(b)           On**eachanniversary date thereafter, the Board of Directors of the Bank (the “Board ofDirectors”) may extend the term of this Agreement for an additional one (1) yearperiod beyond the then effective expiration date: provided that Executive shallnot have given at least sixty (60) days’ written notice of his desire that theterm not be extended.

 

(c)           Notwithstandinganything in this Section to the contrary, this Agreement shall terminateif Executive or the Bank terminates Executive’s employment prior to a Change inControl.

 

----

 

**2.****             TERMINATION OFEMPLOYMENT AFTER A CHANGE IN CONTROL.**

 

(a)           Upon the occurrence ofa Change in Control followed at any time during the term of this Agreement by (i) thetermination of Executive’s employment by the Bank, other than for Cause (asdefined in Section 3 below), or (ii) the Executive’s voluntarytermination of employment for “Good Reason” (as defined in Section 3below), Executive shall be entitled to receive the following:

 

(A)          continuationof Executive’s base salary for a period of twenty-four (24) months.

 

(B)           continuation of health (including medicaland dental) and life insurance coverage for a period of three (3) monthsupon terms no less favorable than the terms upon which such coverage was providedto Executive prior to Executive’s termination of employment. In the event thatthe Bank is unable to provide such coverage by reason of Executive no longerbeing an employee, the Bank shall provide Executive with comparable coverage onan individual policy basis.

 

(C)           Forpurposes of this Agreement, “base salary” shall mean:

 

(i)            for salaried employees, the employee’sannual base salary at the rate in effect on his or her termination date or, ifgreater, the rate in effect on the date immediately preceding the Change inControl.

 

(ii)           for employees whose compensation isdetermined in whole or in part on the basis of commission income, the employee’sbase salary at termination (or, if greater, the base salary on**dateimmediately preceding the effective date of the Change in Control), if any,plus the commissions earned by the employee in the twelve (12) full calendarmonths preceding his or her termination date (or, if greater, the commissionsearned in the twelve (12) full calendar months immediately preceding theeffective date of the Change in Control).

 

(iii)          hourly employees, the employee’s total hourlywages for the twelve (12) full calendar months preceding his or her terminationdate or, if greater, the twelve (12) full calendar months preceding theeffective date of the Change in Control.

 

(b)           The parties to thisAgreement intend for the payments to satisfy the short-term deferral exceptionunder Section 409A of the Code or, in the case of health and welfarebenefits, not constitute deferred compensation (since such amounts are nottaxable to Executive).  However,notwithstanding anything to the contrary in this Agreement, to the extentpayments do not meet the short-term deferral exception of Section 409A ofthe Code and, in the event Executive is a “Specified Employee” (as definedherein) no payment shall be made to Executive under this Agreement prior to thefirst day of the seventh month following the Event of Termination in excess ofthe “permitted amount” under Section 409A of the Code.  For these purposes the “permitted amount”shall be an amount that does not exceed two times the lesser of: (A) thesum of Executive’s annualized compensation based upon the annual rate of payfor 

 

2

----

 

services provided to the Company for thecalendar year preceding the year in which Executive has an Event ofTermination, or (B) the maximum amount that may be taken into accountunder a tax-qualified plan pursuant to Section 401(a)(17) of the Code forthe calendar year in which occurs the Event of Termination.  The payment of the “permitted amount” shallbe made within sixty (60) days of the occurrence of the Event ofTermination.  Any payment in excess ofthe permitted amount shall be made to Executive on the first day of the seventhmonth following the Event of Termination. “Specified Employee” shall be interpreted to comply with Section 409Aof the Code and shall mean a key employee within the meaning of Section 416(i) ofthe Code (without regard to Section 5 thereof), but an individual shall bea “Specified Employee” only if the Company is a publicly-traded institution orthe subsidiary of a publicly-traded holding company.

 

**3.****             DEFINITIONS;SPECIAL LIMITATIONS.**

 

(a)           For purposes of this Agreement, thefollowing definitions shall apply:

 

(A)          “Changein Control” means the occurrence of one of the following events:

 

i.              Merger:  The Bank or the Company merges into orconsolidates with another entity, or merges another entity into the Bank or theCompany, and as a result less than a majority of the combined voting power ofthe resulting entity immediately after the merger or consolidation is held bypersons who were shareholders of the Bank or the Company immediately before themerger or consolidation;

 

ii.             Change in Board Composition:  During any period of two consecutive years,individuals who constitute the Boards of Directors of the Bank or the Companyat the beginning of the two-year period cease for any reason (other than asrequired by the Order to Cease and Desist dated June 6, 2005 entered intoby the Bank with the Office of Thrift Supervision) to constitute at least amajority of the Boards of Directors of the Bank or the Company; provided,however, that for purposes of this clause (iii), each director who is firstelected by the board (or first nominated by the board for election by themembers) by a vote of at least two-thirds (2/3) of the directors who weredirectors at the beginning of the two-year period shall be deemed to have alsobeen a director at the beginning of such period; or

 

iii.            Acquisition of Significant ShareOwnership:  There is filed, orrequired to be filed, a report on Schedule 13D or another form or schedule(other than Schedule 13G) required under Sections 13(d) or 14(d) ofthe Securities Exchange Act of 1934, if the schedule discloses that the filingperson or persons acting in concert has or have become the beneficial owner(s) of20% or more of a class of the Bank’s or the Company’s voting securities,however this clause (iii) shall not apply to beneficial ownership of Bankor Company voting shares held in a fiduciary capacity by an entity of which theBank or the Company directly or indirectly beneficially owns 50% or more of itsoutstanding voting securities; or

 

iv.            Sale of Assets:  The Bank or the Company sells to a thirdparty all or substantially all of its assets; or

 

3

----

 

v.             ProxyStatement Distribution:  Anindividual or company (other than current management of the Company) solicits proxiesfrom stockholders of the Company seeking stockholder approval of a plan ofreorganization, merger or consolidation of the Company or Bank with one or morecorporations as a result of which the outstanding shares of the class ofsecurities then subject to such plan or transaction are exchanged for orconverted into cash or property or securities not issued by the Bank or theCompany; or

 

vi.            Tender Offer:  A tender offer is made for 20% or more of thevoting securities of the Bank or Company then outstanding.

 

Notwithstanding anything in this Agreement to the contrary, in no eventshall the reorganization of the Bank from the mutual holding company form oforganization to the full stock holding company form of organization (includingthe elimination of the mutual holding company) constitute a “Change in Control”for purposes of this Agreement.

 

(B)           “Good Reason” means, unless Executive hasconsented in writing thereto, the occurrence following a Change in Control, ofany of the following:

 

i.              a material reduction in title, authorityor responsibilities;

 

ii.             a reduction of the Executive’s base salaryin effect immediately prior to the Change in Control;

 

iii.            the relocation of theExecutive’s office to a location more than 30 miles from its location immediatelyprior to the Change in Control;

 

iv.            the taking of any action by the Bank or anyof its affiliates or successors that would materially adversely affectExecutive’s overall compensation and benefits package, unless such changes tothe compensation and benefits package are made on a non-discriminatory basis toall employees; or

 

v.             failure of any successor institution toassume the obligations under this Agreement in accordance with Section 16of this Agreement

 

(b)           Executiveshall not have the right to receive termination benefits pursuant to Section 3hereof upon termination for Cause. The term “Cause” shall mean termination ofExecutive’s employment by the Bank because of Executive’s personal dishonesty,incompetence, willful misconduct, any breach of fiduciary duty involvingpersonal profit, intentional failure to perform stated duties, willfulviolation of any law, rule, regulation (other than traffic violations orsimilar offenses), final cease and desist order, or any material breach of anyprovision of this Agreement. Executive shall not have the right to receivecompensation or other benefits for any period after termination for Cause.

 

(c)           Notwithstandinganything in this Agreement to the contrary, in no event shall the aggregatepayments or benefits to be made or afforded to Executive under said paragraphsor 

 

4

----

 

otherwise (the “Termination Benefits”) constitute an “excessparachute payment” under Section 280G of the Internal Revenue Code of 1986,as amended, or any successor thereto, and to avoid such a result, TerminationBenefits will be reduced, if necessary, to an amount (the “Non-TriggeringAmount”), the value of which is one dollar ($1.00) less than an amount equal tothree (3) times Executive’s “base amount,” as determined in accordancewith said Section 280G. The allocation of the reduction required herebyamong the Termination Benefits provided by this Section 3 shall bedetermined by Executive.

 

(d)           Notwithstandinganything in this Agreement to the contrary, if the Bank in good faithdetermines that amounts that, as of the effective date of the Executive’stermination of employment are or may become payable to the Executive upontermination of his employment hereunder are required to be suspended or delayedfor six (6) months in order to satisfy the requirements of Section 409Aof the Internal Revenue Code, then the Bank will so advise the Executive, andany such payments shall be suspended and accrued for six months.

 

**4.****             NOTICE OF TERMINATION.**

 

(a)           Anytermination by the Bank or by Executive shall be communicated by Notice ofTermination to the other party hereto. For purposes of this Agreement, a “Noticeof Termination” shall mean a written notice which shall indicate the specifictermination provision in this Agreement relied upon and shall set forth indetail the facts and circumstances claimed to provide a basis for terminationof Executive’s employment under the provision so indicated.

 

(b)           “Dateof Termination” shall mean the date specified in the Notice of Termination(which, in the case of a termination for Cause, shall not be less than thirty(30) days from the date such Notice of Termination is given).

 

**5.****             NON-COMPETE;NON-SOLICITATION.**

 

(a)           Notwithstandinganything in this Agreement to the contrary, this Section 5 shall onlyapply on or after the effective date of a Change in Control.  If, on or after the effective date of aChange in Control, the Executive’s employment is terminated  (i)  by the Bank without Cause or (ii) byExecutive with Good Reason, then for the period beginning on the Executive’stermination date and ending one (1) year thereafter (the “RestrictedPeriod”), Executive shall not, without express prior written consent of theBank, directly or indirectly, own or hold any proprietary interest in, or beemployed by or receive remuneration from, any corporation, partnership, soleproprietorship or other entity (collectively, an “entity”) “engaged incompetition” (as defined below) with the Bank or any of its affiliates (a “Competitor”).For purposes of the preceding sentence, the term “proprietary interest” meansdirect or indirect ownership of an equity interest in an entity other thanownership of less than two (2) percent of any class stock in apublicly-held entity. Further, an entity shall be considered to be “engaged incompetition” if such entity is, or is a holding company for or a subsidiary ofan entity which is engaged in the business of providing banking, trustservices, asset management advice, or similar financial services to consumers,businesses individuals or other entities; and the entity, holding company orsubsidiary maintains physical offices for the transaction of such business orbusinesses in any city, town or county in which the Executive’s normal businessoffice is located or the Bank has an office or has filed an application forregulatory approval to establish an 

 

5

----

 

office, as determined on the date of Executive’s termination ofemployment.

 

(b)           During the RestrictedPeriod, Executive shall not, without express prior written consent of the Bank,solicit or assist any other person in soliciting for the account of anyCompetitor, any customer or client of the Bank or any of its subsidiaries.

 

(c)           Duringthe Restricted Period, Executive shall not, without the express prior writtenconsent of the Bank, directly or indirectly, (i) solicit or assist anythird party in soliciting for employment any person employed by the Bank or anyof its subsidiaries at the time of the termination of Executive’s employment(collectively, “Employees”), (ii) employ, attempt to employ or materiallyassist any third party in employing or attempting to employ any Employee, or (iii) otherwiseact on behalf of any Competitor to interfere with the relationship between theBank or any of its affiliates and their respective Employees.

 

(d)           Executiveacknowledges that the restrictions contained in this Section 5 arereasonable and necessary to protect the legitimate interests of the Bank andthat any breach by Executive of any provision contained in this Section 5will result in irreparable injury to the Bank for which a remedy at law wouldbe inadequate. Accordingly, Executive acknowledges that the Bank shall beentitled to temporary, preliminary and permanent injunctive relief againstExecutive in the event of any breach or threatened breach by Executive of theprovisions of this Section 5, in addition to any other remedy that may beavailable to the Bank whether at law or in equity. With respect to anyprovision of this Section 5 finally determined by a court of competentjurisdiction to be unenforceable, such court shall be authorized to reform thisAgreement or any provision hereof so that it is enforceable to the maximumextent permitted by law. If the covenants of Section 5 are determined tobe wholly or partially unenforceable in any jurisdiction, such determinationshall not be a bar to or in any way diminish the Bank’s right to enforce suchcovenants in any other jurisdiction and shall not bar or limit theenforceability of any other provisions. The Bank shall not be required to postany bond or other security in connection with any proceeding to enforce theprovisions of this Section 5.

 

(e)           Theprovisions of this Section 5 shall survive the termination of Executive’semployment with the Bank for any reason whatsoever so long as the terminationof employment occurs during the Term, provided, however, that if the Executiveor Bank give notice that the Agreement shall not be extended beyond theeffective expiration date, the restrictions set forth in this Section 5shall survive the termination of Executive’s employment with the Bank for aperiod of six (6) months.

 

(f)            Notwithstandingthe foregoing provisions of this Section 5, Executive may elect to waivethe payment provided for under Section 2(a)A of this Agreement in exchangefor a release of all restrictions set forth in this Section 5. Executivemust make his election under this Section 5(f) in writing and within5 business days of receiving his Notice of Termination.

 

**6.****             SOURCEOF PAYMENTS.**

 

All payments provided in thisAgreement shall be timely paid in cash or check from the general funds of theBank. The Company, however, unconditionally guarantees payment and provision ofall amounts and benefits due hereunder to Executive and, if such amounts and 

 

6

----

 

benefits due from the Bank are not timelypaid or provided by the Bank, such amounts and benefits shall be paid orprovided by the Company.

 

**7.****             EFFECT ON PRIORAGREEMENTS AND EXISTING BENEFIT PLANS.**

 

This Agreementcontains the entire understanding between the parties hereto and supersedes anyprior agreement between the Bank and Executive, except that this Agreementshall not affect or operate to reduce any benefit or compensation inuring toExecutive of a kind elsewhere provided. Nothing in this Agreement shall conferupon Executive the right to continue in the employ of the Bank or shall imposeon the Bank any obligation to employ or retain Executive in its employ for anyperiod.

 

**8.****             NOATTACHMENT.**

 

(a)           Exceptas required by law, no right to receive payments under this Agreement shall besubject to anticipation, commutation, alienation, sale, assignment,encumbrance, charge, pledge, or hypothecation or to execution, attachment, levyor similar process or assignment by operation of law, and any attempt,voluntary or involuntary, to affect any such action shall be null, void and ofno effect.

 

(b)           ThisAgreement shall be binding upon, and inure to the benefit of, Executive, theBank and their respective successors and assigns.

 

**9.****             MODIFICATIONAND WAIVER.**

 

(a)           ThisAgreement may not be modified or amended except by an instrument in writingsigned by the parties hereto.

 

(b)           Noterm or condition of this Agreement shall be deemed to have been waived, norshall there be any estoppel against the enforcement of any provision of thisAgreement, except by written instrument of the party charged with such waiveror estoppel. No such written waiver shall be deemed a continuing waiver unlessspecifically stated therein, and each such waiver shall operate only as to thespecific term or condition waived and shall not constitute a waiver of suchterm or condition for the future or as to any act other than that specificallywaived.

 

**10.****          SEVERABILITY.**

 

If, for anyreason, any provision of this Agreement, or any part of any provision, is heldinvalid, such invalidity shall not affect any other provision of this Agreementor any part of such provision not held so invalid, and each such otherprovision and part thereof shall to the full extent consistent with lawcontinue in full force and effect.

 

**11.****          HEADINGSFOR REFERENCE ONLY.**

 

The headings of sections and paragraphs**herein are included solely for convenience ofreference and shall not control the meaning or interpretation of any of theprovisions of this 

 

7

----

 

Agreement. In addition, references herein tothe masculine shall apply to both the masculine and the feminine.

 

**12.****          GOVERNINGLAW.**

 

Except to the extent preempted by federal law, the validity,interpretation, performance, and enforcement of this Agreement shall begoverned by the laws of the Commonwealth of Pennsylvania, without regard**to principles of conflicts of law of Pennsylvania.

 

**13.****          ARBITRATION.**

 

Any dispute or controversy arising under, or in connection with, thisAgreement shall be settled exclusively by arbitration, conducted before anarbitrator sitting in a location selected by Executive within twenty-five (25)miles from the location of the main office of the Bank, in accordance with the rules ofthe American Arbitration Association then in effect relating to employmentdisputes. Judgment may be entered on the arbitrator’s award in any court havingjurisdiction.

 

**14.****          PAYMENTOF LEGAL FEES.**

 

All reasonable legal fees paid or incurred by Executive pursuant to anydispute or question of interpretation relating to this Agreement shall be paidor reimbursed by the Bank, only if Executive is successful pursuant to a legaljudgment, arbitration or settlement.

 

**15.****          INDEMNIFICATION.**

 

The Bank shall provide Executive (including his heirs, executors andadministrators) with coverage under a standard directors’ and officers’liability insurance policy at its expense and shall indemnify Executive (andhis heirs, executors and administrators) to the fullest extent permitted underapplicable law against all expenses and liabilities reasonably incurred by himin connection with or arising out of any action, suit or proceeding in which hemay be involved by reason of his having been an officer of the Bank (whether ornot he continues to be a director or officer at the time of incurring suchexpenses or liabilities), such expenses and liabilities to include, but not belimited to, judgments, court costs, attorneys’ fees and the cost of reasonablesettlements.

 

**16.****          SUCCESSORSTO THE BANK.**

 

The Bank shall require any successor or assignee, whether direct orindirect, by purchase, merger, consolidation or otherwise, to all orsubstantially all of the business or assets of the Bank, expressly andunconditionally to assume and agree to perform the Bank’s obligations underthis Agreement, in the same manner and to the same extent that the Bank wouldbe required to perform if no such succession or assignment had taken place.

 

8

----

 

**17.****          REQUIRED PROVISIONS.**

 

In the eventany of the provisions of this Section 17 are in conflict with the otherterms of this Agreement, this Section 17 shall prevail.

 

(a)           TheBank’s board of directors may terminate Executive’s employment at any time, butany termination by the Bank, other than Termination for Cause, shall notprejudice Executive’s right to compensation or other benefits under thisAgreement. Executive shall not have the right to receive compensation or otherbenefits for any period after Termination for Cause as defined in Section 2(b) above.

 

(b)           IfExecutive is suspended from office and/or temporarily prohibited from participatingin the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) or8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §1818(e)(3) or(g)(1); the Bank’s obligations under this contract shall be suspended as of thedate of service, unless stayed by appropriate proceedings. If the charges inthe notice are dismissed, the Bank may in its discretion: (i) payExecutive all or part of the compensation withheld while their contractobligations were suspended; and (ii) reinstate (in whole or in part) anyof the obligations which were suspended.

 

(c)           IfExecutive is removed and/or permanently prohibited from participating in theconduct of the Bank’s affairs by an order issued under Section 8(e)(4) or8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §1818(e)(4) or(g)(1), all obligations of the Bank under this contract shall terminate as ofthe effective date of the order, but vested rights of the contracting partiesshall not be affected.

 

(d)           Ifthe Bank is in default as defined in Section 3(x)(1) of the FederalDeposit Insurance Act, 12 U.S.C. §1813(x)(1) all obligations of the Bankunder this contract shall terminate as of the date of default, but thisparagraph shall not affect any vested rights of the contracting parties.

 

(e)           Allobligations under this contract shall be terminated, except to the extentdetermined that continuation of the contract is necessary for the continuedoperation of the Bank: (i) by the Director of the OTS (or his designee),at the time the FDIC enters into an agreement to provide assistance to or onbehalf of the Bank under the authority contained in Section 13(c) ofthe Federal Deposit Insurance Act, 12 U.S.C. §1823(c); or (ii) by theDirector of the OTS (or his designee) at the time the Director (or his designee)approves a supervisory merger to resolve problems related to the operations ofthe Bank or when the Bank is determined by the Director to be in an unsafe orunsound condition. Any rights of the parties that have already vested, however,shall not be affected by such action.

 

(f)            Anypayments made to employees pursuant to this Agreement, or otherwise, aresubject to and conditioned upon their compliance with 12 U.S.C. §1828(k) andFDIC regulation 12 C.F.R. Part 359, Golden Parachute and IndemnificationPayments.

 

*   *    *

 

9

----

 

**SIGNATURES**

 

**IN WITNESS WHEREOF,** Fox Chase Bank has causedthis Agreement to be executed and its seal to affixed hereunto by a dulyauthorized officer, and Executive has signed this Agreement, on the day of October15, 2008.

 
| **ATTEST:**           |         | **FOX CHASE BANK**          |
|-----------------------|--------------|-----------------------------|
|                  |         |                        |
|                  |         |                        |
| /s/ Jerry D. Holbrook |         | By:                         | /s/ Thomas M. Petro |
| Corporate Secretary   |         |                        | For the Entire Board of Directors |
|                  |         |                        |
|                  |         |                        |
| ** **            | ** **   | **FOX CHASE BANCORP, INC.** |
| *** ***          | *** *** | ***(guarantor)***           |
|                  |         |                        |
|                  |         | By:                         | /s/ Thomas M. Petro |
|                  |         |                        |
|                  |         |                        |
| **WITNESS:**          |         | **EXECUTIVE**               |
| ** **            |         | ** **                  |
| ** **            |         | ** **                  |
| /s/ Mary Regnery      |         | /s/ Richard Fuchs           |
|                  |         | Richard Fuchs               |

 

10

----