**EXHIBIT10.5**

 

**EMPLOYMENT AGREEMENT**

 

**THIS****AGREEMENT**(“Agreement”), as amended and restated, is made this 1st day of October, 2008by and between **Fox Chase Bancorp, Inc.**(the “Company”), a corporation organized under the laws of the United States ofAmerica, with its principal offices at 4390 Davisville Road, Hatboro,Pennsylvania 19040, **Fox Chase Bank**(the “Bank”), a federally chartered stock savings bank organized under the lawsof the United States of America, with its principal offices at 4390 Davisville Road,Hatboro, Pennsylvania 19040 and **Keiron G.Lynch** (“Executive”).

 

**WHEREAS**,the parties originally entered into this Agreement on October 1, 2006; and

 

**WHEREAS**, the Companyand Bank desire to continue to assure both entities of the services ofExecutive as Executive Vice President and Chief Payments Officer for the periodprovided for in this Agreement; and

 

**WHEREAS**, Executiveand the Board of Directors of both the Company and Bank desire to enter into anagreement setting forth the terms and conditions of the employment of Executiveand the 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 anamended and restated employment agreement setting forth the terms andconditions of the continuing employment of Executive and the related rights andobligations of each of the parties and to bring the Agreement into compliancewith Section 409A of the Internal Revenue Code of 1986, as amended (the“Code”) and the regulations and guidance issued with respect to 409A of theCode.

 

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

 

***1.******                                      Positionand Responsibilities.***

 

(a)                                  Duringthe period of Executive’s employment under this Agreement, Executive agrees toserve as Executive Vice President and Chief Payments Officer of the Company andBank.  Executive shall haveresponsibility for the general management and control of the business andaffairs of the Company and its subsidiaries, including the Bank, and shallperform all duties and shall have all powers which are commonly incident to theoffices of Executive Vice President and Chief Payments Officer or which,consistent with those offices, are delegated to him by the Board of Directorsof the Company and Bank.

 

(b)                                 Duringthe period of Executive’s employment under this Agreement, except for periodsof absence occasioned by illness, vacation, and reasonable leaves of absence,Executive shall devote substantially all of his business time, attention, skilland efforts to the faithful 

 

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performance of his duties under this Agreement, including activitiesand services related to the organization, operation and management of theCompany and its subsidiaries, including the Bank, as well as participation incommunity, professional and civic organizations; provided, however, that,Executive may serve, or continue to serve, on the boards of directors of, andhold any other offices or positions in, companies or organizations listed byExecutive on his annual conflict of interest reporting.

 

(c)                                  TheBank or the Company (as they shall determine), will furnish Executive with theworking facilities and staff customary for executive officers with the titlesand duties set forth in this Agreement and as are necessary for him to performhis duties.  The location of suchfacilities and staff shall be at the principal administrative offices of theBank.

 

***2.******                                      Termof Employment.***

 

(a)                                  Theterm of Executive’s employment under this Agreement shall be deemed to havecommenced as of October 1, 2008 and shall continue for a period ofthirty-six (36) full calendar months thereafter.

 

(b)                                 TheCompensation Committees of the Boards of Directors of the Company and Bank willreview the Agreement and Executive’s performance annually for purposes ofdetermining whether to extend the Agreement for an additional year.  The Chairman of the Boards of Directors willgive notice to the Executive as soon as possible if the Boards have decided notto extend the Agreement.

 

(c)                                  Notwithstandinganything contained in this Agreement to the contrary, either Executive, theCompany or the Bank may terminate Executive’s employment at any time during theterm of this Agreement, subject to the terms and conditions of this Agreement.

 

***3.******                                      Compensationand Benefits.***

 

(a)                                  TheBank or the Company (as they shall determine), shall pay Executive ascompensation a salary of $171,810 per year (“Base Salary”).  In addition to the Base Salary provided inthis Section 3(a), the Bank shall also provide Executive with all suchother benefits as are provided uniformly to permanent full-time employees ofthe Bank.  If Executive’s Base Salary isincreased, such increased Base Salary shall then constitute the Base Salary forall purposes of this Agreement.  Forpurposes of Section 4(b) of this Agreement, Base Salary shall bedeemed to include the highest cash bonus or similar cash incentive compensationpaid to or accrued on behalf of the Executive with respect to the three (3) taxableyears preceding his termination of employment. For purposes of Section 5(c) of this Agreement, Base Salaryshall be defined as the amount reported in Box 1 of the Executive’s Form W-2,plus amounts deferred under the Bank’s 401(k) Plan and/or Section 125Plan (if any), or deferred at the Executive’s election or on behalf of theExecutive to any non-qualified deferred compensation plan of the Bank or theCompany.

 

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(b)                                 Executiveshall be entitled to participate in or receive benefits under any employeebenefit plans including but not limited to, retirement plans, profit-sharingplans, or any other employee benefit plan or arrangement made available by theBank or Company in the future to its senior executives, subject to and on abasis consistent with the terms, conditions and overall administration of suchplans and arrangements.  Executive shallbe entitled to incentive compensation and bonuses as provided in any plan of theBank or Company in which Executive is eligible to participate.  Nothing paid to the Executive under any suchplan or arrangement will be deemed to be in lieu of other compensation to whichthe Executive is entitled under this Agreement. From time to time, and as determined by the Boards of Directors of theCompany and the Bank, Executive may be entitled to participate in or receivebenefits under plans relating to stock options and restricted stock awards thatare made available by the Company or the Bank at any time in the future duringthe term of this Agreement, subject to and on a basis consistent with theterms, conditions and overall administration of such plans.

 

(c)                                  TheCompany or Bank (as they shall determine) shall also pay or reimburse Executivefor all reasonable travel and other reasonable expenses incurred in theperformance of Executive’s obligations under this Agreement and may providesuch additional compensation in such form and such amounts as the Board ofDirectors of the Company or Bank may from time to time determine.

 

(d)                                 Executiveshall take vacation at a time mutually agreed upon by the Company, Bank andExecutive.  Executive shall receive hisBase Salary and other benefits during periods of vacation. Executive shall alsobe entitled to paid legal holidays in accordance with the policies of the Bank.

 

***4.******                                      Paymentsto Executive Upon an Event of Termination.***

 

(a)                                  Uponthe occurrence of an Event of Termination (as herein defined) duringExecutive’s term of employment under this Agreement, the provisions of this Section 4shall apply.  Unless Executive otherwiseagrees, as used in this Agreement, an “Event of Termination” shall mean andinclude any one or more of the following: (i) the termination by the Company or Bank of Executive’s full-timeemployment for any reason other than a termination governed by Section 7of this Agreement; or (ii) Executive’s resignation from the Bank orCompany, upon, any (A) notice to Executive of non-renewal of the term ofthis Agreement (B) failure to reappoint Executive as Executive Vice Presidentand Chief Payments Officer, (C) material change in Executive’s functions,duties, or responsibilities with the Bank, the Company or its subsidiaries,which change would cause Executive’s position(s) to become of lesserresponsibility, importance, or scope from the position and attributes thereofdescribed in Section 1 of this Agreement, (D) material reduction inthe benefits and perquisites provided to Executive from those being provided asof the effective date of this Agreement, except to the extent such coverage maybe changed in its application to all Bank employees, (E) liquidation ordissolution of the Company or the Bank, or (F) breach of this Agreement bythe Bank or Company.  Upon the occurrenceof any event described in clauses (A), (B), (C), (D), (E) or (F), above,Executive shall have the right to terminate his employment under this Agreementby resignation upon not less than sixty (60) days prior written notice givenwithin six (6) full calendar months after the event giving rise toExecutive’s right to elect to terminate his employment.

 

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(b)                                 Uponthe occurrence of an Event of Termination, on the Date of Termination, asdefined in Section 8, the Company and Bank (as they shall determine) shallbe obligated to pay Executive, or, in the event of his subsequent death, hisbeneficiary or beneficiaries, or his estate, as the case may be the value ofthe Executive’s base salary for the remaining term of the Agreement plus thevalue of all benefits he would have received during the remaining term of theAgreement under any retirement programs (whether tax-qualified ornon-qualified) in which Executive participated prior to his termination (withthe amount of the benefits determined by reference to the benefits received bythe Executive or accrued on his behalf under such programs during the twelve(12) months preceding his termination). Executive shall receive this payment in a single lump sum within ten (10) daysof his termination of employment.  Inaddition, Executive and his dependents will continue to participate in anybenefit plans of the Company or the Bank that provide health (including medicaland dental), or life insurance, or similar coverage upon terms no lessfavorable than the most favorable terms provided to senior executives of theCompany and the Bank during the remaining term of the Agreement.  In the event that the Company and the Bankare unable to provide such coverage by reason of Executive no longer being anemployee, the Company and the Bank shall provide Executive with comparablecoverage on an individual policy basis. In the event the Bank or the Company is not in compliance with itsminimum capital requirements or if such payments pursuant to this subsection (b) wouldcause the Company or Bank’s capital to be reduced below its minimum regulatorycapital requirements, such payments shall be deferred until such time as eitherthe Company or the Bank or successor thereto is in capital compliance.  No payments under this Section 4(b) shallbe reduced in the event the Executive obtains other employment followingtermination of employment.

 

(c)                                  Duringthe period commencing on the effective date of Executive’s termination under Section 4(a) ofthis Agreement and ending one (1) year thereafter (the “RestrictedPeriod”), Executive shall not, without express prior written consent from theCompany or the Bank, directly or indirectly, own or hold any proprietaryinterest in, or be employed by or receive remuneration from, any corporation, partnership,sole proprietorship of other entity (collectively, an “entity”) “engaged incompetition” (as defined below) with the Bank or any other affiliates(“Competitor”).  For purposes of thepreceding sentence, the term “proprietary interest” means direct or indirectownership of an equity interest in an entity other than ownership of less thantwo percent (2%) of any class of stock in a publicly-held entity.  Further, an entity shall be considered to be“engaged in competition” if such entity is, or is a holding company for, or asubsidiary of an entity which is engaged in the business of providing banking,trust services, asset management advice, or similar financial services toconsumers, businesses, individuals or other entities; and the entity, holdingcompany or subsidiary maintains physical offices for the transaction of suchbusiness or businesses in any city, town or county in which the Executive’snormal business office is located or the Bank has an office or has filed anapplication for regulatory approval to establish an office, as determined onthe date of Executive’s termination of employment.

 

(d)                                 Duringthe Restricted Period, Executive shall not, without express prior writtenconsent of the Bank or the Company, solicit or assist any other person insoliciting for the account of any Competitor, any customer or client of theBank or any of its subsidiaries.

 

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(e)                                  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.

 

(f)                                    Executiveacknowledges that the restrictions contained in this Sections (c) through (e) ofthis Section 4 are reasonable and necessary to protect the legitimateinterests of the Bank and the Company and that any breach by Executive of anyprovision contained in Sections (c) through (e) of this Section 4will result in irreparable injury to the Bank and Company for which a remedy atlaw would be inadequate.  Accordingly,Executive acknowledges that the Bank and Company shall be entitled totemporary, preliminary and permanent injunctive relief against Executive in theevent of any breach or threatened breach by Executive of Sections (c) through(e) of this Section 4, in addition to any other remedy that may beavailable to the Bank or the Company whether at law or in equity.  With respect to Sections (c) through (e) ofthis Section 4 finally determined by a court of competent jurisdiction tobe unenforceable, such court shall be authorized to reform this Agreement orany provision hereof so that it is enforceable to the maximum extent permittedby law.  If the covenants of Sections (c) through(e) above are determined to be wholly or partially unenforceable in anyjurisdiction, such determination shall not be a bar to or in any way diminishthe Bank’s or the Company’s right to enforce such covenants in any otherjurisdiction and shall not bar or limit the enforceability of any otherprovisions.    The Bank and the Companyshall not be required to post any bond or other security in connection with anyproceeding to enforce Sections (c) through (e) of this Section 4.

 

(g)                                 Theparties to this Agreement intend for the payments to satisfy the short-termdeferral exception under Section 409A of the Code or, in the case ofhealth and welfare benefits, not constitute deferred compensation (since suchamounts are not taxable to Executive). However, notwithstanding anything to the contrary in this Agreement, tothe extent payments do not meet the short-term deferral exception of Section 409Aof the 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 services provided to the Company for the calendar year preceding the yearin which Executive has an Event of Termination, or (B) the maximum amountthat may be taken into account under a tax-qualified plan pursuant to Section 401(a)(17)of the Code for the calendar year in which occurs the Event ofTermination.  The payment of the“permitted amount” shall be made within sixty (60) days of the occurrence ofthe Event of Termination.  Any payment inexcess of the permitted amount shall be made to Executive on the first day ofthe seventh month following the Event of Termination.  “Specified Employee” shall be interpreted tocomply with Section 409A of the Code and shall mean a key employee withinthe meaning of Section 416(i) of the Code (without regard to Section 5thereof), but an individual shall be a “Specified Employee” only if 

 

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the Company is a publicly-traded institution or the subsidiary of apublicly-traded holding company.

 

***5.******                                      Changein Control.***

 

(a)                                  For purposes of this Agreement,a Change in Control means any 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.                                       Changein Board Composition:  During anyperiod of two consecutive years, individuals who constitute the Boards ofDirectors of the Bank or the Company at the beginning of the two-year periodcease for any reason to constitute at least a majority of the Boards ofDirectors of the Bank or the Company; provided, however, that for purposes ofthis clause (iii), each director who is first elected by the board (or firstnominated by the board for election by the members) by a vote of at leasttwo-thirds (2/3) of the directors who were directors at the beginning of thetwo-year period shall be deemed to have also been a director at the beginningof such period.

 

iii.                                    Acquisition of Significant Share Ownership*:* There is filed, or required to be filed, a report on Schedule 13D oranother form or schedule (other than Schedule 13G) required under Sections 13(d) or14(d) of the Securities Exchange Act of 1934, if the schedule disclosesthat the filing person or persons acting in concert has or have become thebeneficial owner(s) of 20% or more of a class of the Bank’s or theCompany’s voting securities, however this clause (iii) shall not apply tobeneficial ownership of Bank or Company voting shares held in a fiduciarycapacity by an entity of which the Bank or the Company directly or indirectlybeneficially owns 50% or more of its outstanding voting securities.

 

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

 

v.                                      ProxyStatement Distribution:  Anindividual or company (other than current management of the Company) solicitsproxies from stockholders of the Company seeking stockholder approval of a planof reorganization, merger or consolidation of the Company or Bank with one ormore corporations as a result of which the outstanding shares of the class of 

 

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securities then subject to such plan ortransaction are exchanged for or converted into cash or property or securitiesnot issued by the Bank or the Company.

 

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 tothe contrary, in no event shall the reorganization of the Bank from the mutualholding company form of organization to the full stock holding company form oforganization (including the elimination of the mutual holding company)constitute a “Change in Control” for purposes of this Agreement.

 

(b)                                 If any of the eventsdescribed in Section (a) of this Section 5, constituting aChange in Control, have occurred or the Boards of Directors determine that aChange in Control has occurred, Executive shall be entitled to the benefitsprovided for in subsections (c) and (d) of this Section 5 uponhis termination of employment at any time during the term of this Agreement andany extensions thereof, on or after the date the Change in Control occurs dueto (i) Executive’s dismissal, (ii) Executive’s resignation followingany demotion, loss of title, office or significant authority or responsibility,reduction in annual compensation or benefits or relocation of his principalplace of employment by more than thirty (30) miles from its locationimmediately prior to the Change in Control or (iii) Executive’sresignation for any reason within the sixty (60) day period following the datethat is one year from the date the Change in Control occurred, unlessExecutive’s termination is for Cause as defined in Section 7 of thisAgreement; provided, however, that such benefits shall be reduced by anypayment made under Section 4 of this Agreement.

 

(c)                                  Uponthe occurrence of a Change in Control followed by Executive’s termination ofemployment, as provided for in Section (b) of this Section 5,the Company or Bank (as they shall determine) shall pay Executive, or in theevent of his subsequent death, his beneficiary or beneficiaries or his estate,as the case may be, as severance pay, a sum equal to the greater of:  (i) the payments and benefits due forthe remaining term of the Agreement or (ii) three (3) times Executive’saverage Base Salary for the three (3) taxable years preceding the Changein Control or (iii) three (3) times Executive’s Base Salary for themost recent taxable year or portion thereof preceding the Change inControl.  The benefit shall be payable inone lump sum within 10 days of Executive’s last day of employment.

 

(d)                                 Uponthe occurrence of a Change in Control and Executive’s termination of employmentin connection therewith, the Bank and Company (as they shall determine) willcause to be continued life, medical and dental coverage substantially identicalto the coverage maintained by the Bank for Executive and any of his dependentscovered under such plans immediately prior to the Change in Control. Suchcoverage and payments shall cease upon the expiration of thirty-six (36) fullcalendar months following the Date of Termination.  In the event Executive’s participation in anysuch plan or program is barred, the Bank and/or Company (as they shall determine)shall arrange to provide Executive and his dependents with benefitssubstantially similar to those of which Executive and his dependents wouldotherwise have been 

 

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entitled to receive under such plans and programs from which theircontinued participation is barred or at the election of Executive, providetheir economic equivalent.

 

(e)                                  Theparties to this Agreement intend for the payments to satisfy the short-termdeferral exception under Section 409A of the Code or, in the case ofhealth and welfare benefits, not constitute deferred compensation (since suchamounts are not taxable to Executive). However, notwithstanding anything to the contrary in this Agreement, tothe extent payments do not meet the short-term deferral exception of Section 409Aof the 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 services provided to the Company for the calendar year preceding the yearin which Executive has an Event of Termination, or (B) the maximum amountthat may be taken into account under a tax-qualified plan pursuant to Section 401(a)(17)of the Code for the calendar year in which occurs the Event ofTermination.  The payment of the“permitted amount” shall be made within sixty (60) days of the occurrence ofthe Event of Termination.  Any payment inexcess of the permitted amount shall be made to Executive on the first day ofthe seventh month following the Event of Termination.  “Specified Employee” shall be interpreted tocomply with Section 409A of the Code and shall mean a key employee withinthe meaning of Section 416(i) of the Code (without regard toparagraph 5 thereof), but an individual shall be a “Specified Employee” only ifthe Company is a publicly-traded institution or the subsidiary of apublicly-traded holding company.

 

***6.******                                      Changein Control Related Provisions.***

 

Notwithstanding the provisions of Section 5, in no event shall theaggregate payments or benefits to be made or afforded to Executive under saidsections (the “Termination Benefits”) constitute an “excess parachute payment”under Section 280G of the Internal Revenue Code of 1986 or any successorthereto, and in order to avoid such a result, Termination Benefits will bereduced, if necessary, to an amount (the “Non-Triggering Amount”), the value ofwhich is one dollar ($1.00) less than an amount equal to the maximum amountallowable as a deduction by the Bank or Company, as determined in accordancewith said Section 280G.  Theallocation of the reduction required hereby among the Termination Benefitsprovided by Section 5 shall be determined by Executive.

 

***7.******                                      Terminationfor Cause.***

 

The phrase termination for “Cause” shall mean termination because ofExecutive’s personal dishonesty, incompetence, willful misconduct, any breachof fiduciary duty involving personal profit, intentional failure to performstated duties, willful violation of any law, rule, regulation (other thantraffic violations or similar offenses), Executive’s breach of a final ceaseand desist order issued by the Office of Thrift Supervision, the Securities andExchange 

 

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Commission, or any regulatory agency having jurisdiction over the Bankor Company, or material breach of any provision of this Agreement.

 

***8.******                                      Notice.***

 

(a)                                  Anypurported termination by the Bank or Company or by Executive shall becommunicated by Notice of Termination to the other party hereto. For purposesof this Agreement, a “Notice of Termination” shall mean a written notice whichshall indicate the specific termination provision in this Agreement relied uponand shall set forth in reasonable detail the facts and circumstances claimed toprovide a basis for termination of Executive’s employment under the provisionso indicated.

 

(b)                                 “Dateof Termination” shall mean the date specified in the Notice of Termination.

 

(c)                                  If,within thirty (30) days after any Notice of Termination (except for terminationfor Cause) is given, the party receiving such Notice of Termination notifiesthe other party that a dispute exists concerning the termination, except uponthe occurrence of a Change in Control and voluntary termination by Executive inwhich case the Date of Termination shall be the date specified in the Notice,the Date of Termination shall be the date on which the dispute is finallydetermined, either by mutual written agreement of the parties, by a bindingarbitration award or by a final judgment, order or decree of a court ofcompetent jurisdiction (the time for appeal therefrom having expired and noappeal having been perfected), and provided further that the Date ofTermination shall be extended by a notice of dispute only if such notice isgiven in good faith and the party giving such notice pursues the resolution ofsuch dispute with reasonable diligence. Notwithstanding the pendency of anysuch dispute, the Bank and Company (as they shall determine) will continue topay Executive his full compensation in effect when the notice giving rise tothe dispute was given (including, but not limited to, Base Salary) and continuehim as a participant in all compensation, benefit and insurance plans in whichhe was participating when the notice of dispute was given, until the dispute isfinally resolved in accordance with this Agreement. Amounts paid pursuant tothis provision shall be in addition to all other amounts due under thisAgreement and shall not be offset against or reduce any other amounts due underthis Agreement.

 

***9.******                                      Post-TerminationObligations.***

 

All payments and benefits to Executive under this Agreement shall besubject to Executive’s compliance with this Section 9 for one (1) fullyear after the earlier of the expiration of this Agreement or termination ofExecutive’s employment with the Company. Executive shall, upon reasonablenotice, furnish such information and assistance to the Company and Bank as mayreasonably be required by the Company and Bank in connection with any litigationin which it or any of its subsidiaries or affiliates is, or may become, aparty.  Bank and Company (as they shalldetermine) shall reimburse Executive all reasonable expenses, including costs,fees and expenses for Executive’s counsel in complying with the provisions ofthis Section 9.

 

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***10.******                               Loyaltyand Confidentiality.***

 

(a)                                  Duringthe term of this Agreement Executive:  (i) shalldevote all his time, attention, skill, and efforts to the faithful performanceof his duties hereunder; provided, however, that from time to time, Executivemay serve on the boards of directors of, and hold any other offices orpositions in, companies or organizations which will not present any conflict ofinterest with the Company and the Bank or any of their subsidiaries oraffiliates, unfavorably affect the performance of Executive’s duties pursuantto this Agreement, or violate any applicable statute or regulation and (ii) shallnot engage in any business or activity contrary to the business affairs orinterests of the Company and the Bank.

 

(b)                                 Nothingcontained in this Agreement shall prevent or limit Executive’s right to investin the capital stock or other securities of any business dissimilar from thatof the Company and the Bank, or, solely as a passive, minority investor, in anybusiness.

 

(c)                                  Executiveagrees to maintain the confidentiality of any and all information concerningthe operation or financial status of the Company and the Bank; the names oraddresses of any of its borrowers, depositors and other customers; anyinformation concerning or obtained from such customers; and any otherinformation concerning the Company and the Bank to which he may be exposedduring the course of his employment.  TheExecutive further agrees that, unless required by law or specifically permittedby the Board in writing, he will not disclose to any person or entity, eitherduring or subsequent to his employment, any of the above-mentioned informationwhich is not generally known to the public, nor shall he employ suchinformation in any way other than for the benefit of the Company and the Bank.

 

***11.******                               Deathand Disability.***

 

(a)                                  *Death. *Notwithstandingany other provision of this Agreement to the contrary, in the event ofExecutive’s death during the term of this Agreement, the Bank or Company *(*as**theyshall determine) shall immediately pay his estate any salary and bonus accruedbut unpaid as of the date of his death, and, for a period of six (6) monthsafter Executive’s death, the Bank shall continue to provide his dependents’medical insurance benefits existing on the date of his death and shall payExecutive’s designated beneficiary all compensation that would otherwise bepayable to him pursuant to Section 3(a) of this Agreement.  This provision shall not negate any rightsExecutive or his beneficiaries may have to death benefits under any employeebenefit plan of the Company or the Bank.

 

(b)                                 *Disability.*

 

(i)            TheBank or Company or Executive may terminate Executive’s employment after havingestablished Executive’s Disability.  Forpurposes of this Agreement, “Disability” means a physical or mental infirmitythat impairs Executive’s ability to substantially perform his duties under thisAgreement and that results in Executive becoming eligible for long-termdisability benefits under the Company’s or the Bank’s long-term disability plan(or, if the Company or the Bank has no such plan in effect, that 

 

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impairsExecutive’s ability to substantially perform his duties under this Agreementfor a period of one hundred eighty (180) consecutive days).  The Boards of Directors shall determinewhether or not Executive is and continues to be permanently disabled forpurposes of this Agreement in good faith, based upon competent medical adviceand other factors that they reasonably believe to be relevant.  As a condition to any benefits, the Boards ofDirectors may require Executive to submit to such physical or mentalevaluations and tests as it deems reasonably appropriate.

 

(ii)         Inthe event of Disability, Executive’s obligation to perform services under thisAgreement will terminate.  In the eventof such termination, Executive shall continue to receive two-thirds (66.667%)of his monthly Base Salary (at the annual rate in effect on the Date ofTermination) following termination through the earlier of:  (A) the date Executive returns tofull-time employment at the Company or the Bank in the same capacity as he wasprior to his termination for Disability; (B) Executive’s death; or (C) Executive’sattainment of age 65.  Such paymentsshall be reduced by the amount of any short- or long-term disability benefitspayable to Executive under any disability program sponsored by the Company orthe Bank.  In addition, during any periodof Executive’s Disability, Executive and his dependents shall, to the greatestextent possible, continue to be covered under all benefit plans (including,without limitation, retirement plans and medical, dental and life insuranceplans) of the Company or the Bank in which Executive participated prior to theoccurrence of Executive’s Disability, on the same terms as if Executive wereactively employed by the Bank or Company.

 

***12.******                               Sourceof Payments.***

 

All paymentsprovided for in this Agreement shall be timely paid in cash or check from thegeneral funds of the Bank.  Company andBank reserve the right to make payments provided for in this Agreement fromgeneral funds of the Company.

 

***13.******                               Effectof Prior Agreements and Existing Benefit Plans.***

 

This Agreementcontains the entire understanding between the parties hereto and supersedes anyprior employment agreement between the Bank, Company or any predecessor of theBank, Company and Executive, except that this Agreement shall not affect oroperate to reduce any benefit or compensation inuring to Executive of a kindelsewhere provided.  No provision of thisAgreement shall be interpreted to mean that Executive is subject to receivingfewer benefits than those available to him without reference to this Agreement.

 

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***14.******                               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, the Company and their respective successors and assigns.

 

***15.******                               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 waivershall be deemed a continuing waiver unless specifically stated therein, andeach such waiver shall operate only as to the specific term or condition waivedand shall not constitute a waiver of such term or condition for the future asto any act other than that specifically waived.

 

***16.******                               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 thisAgreement or any part of such provision not held so invalid, and each suchother provision and part thereof shall to the full extent consistent with lawcontinue in full force and effect.

 

***17.******                               Headingsfor Reference Only.***

 

The headingsof sections and Sections herein are included solely for convenience ofreference and shall not control the meaning or interpretation of any of theprovisions of this Agreement.

 

***18.******                               GoverningLaw.***

 

This Agreementshall be governed by the laws of the Commonwealth of Pennsylvania (withoutregard to principles of conflicts of law of that state).

 

***19.******                               Arbitration.***

 

Any dispute orcontroversy arising under or in connection with this Agreement shall be settledexclusively by arbitration, conducted before a panel of three (3) arbitratorssitting in a location selected by Executive within fifty (50) miles from the locationof the Bank, in 

 

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accordancewith the rules of the American Arbitration Association then in effect.Judgment may be entered on the arbitrator’s award in any court havingjurisdiction; provided, however, that Executive shall be entitled to seekspecific performance of his right to be paid until the Date of Terminationduring the pendency of any dispute or controversy arising under or inconnection with this Agreement.

 

In the eventany dispute or controversy arising under or in connection with Executive’stermination is resolved in favor of Executive, whether by judgment, arbitrationor settlement, Executive shall be entitled to the payment of all back-pay,including salary, bonuses and any other cash compensation, fringe benefits andany compensation and benefits due Executive under this Agreement.

 

***20.******                               Paymentof Legal Fees.***

 

All reasonablelegal fees paid or incurred by Executive pursuant to any dispute or question ofinterpretation relating to this Agreement shall be paid or reimbursed by theBank or Company (as they shall determine), only if Executive is successfulpursuant to a legal judgment, arbitration or settlement.

 

***21.******                               Indemnification.***

 

The Bank andCompany 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) (in accordance with the By-Laws of bothBank and Company) to the fullest extent permitted under federal law or underthe Bank and Company Charters against all expenses and liabilities reasonablyincurred by him in connection with or arising out of any action, suit orproceeding in which he may be involved by reason of his having been a directoror officer of the Company or Bank (whether or not he continues to be a directoror officer at the time of incurring such expenses or liabilities), suchexpenses and liabilities to include, but not be limited to, judgments, courtcosts and attorneys’ fees and the cost of reasonable settlements.

 

***22.******                               Successorto the Company.***

 

The Bank andCompany shall require any successor or assignee, whether direct or indirect, bypurchase, merger, consolidation or otherwise, to all or substantially all thebusiness or assets of the Bank or the Company, expressly and unconditionally toassume and agree to perform the Bank and Company’s obligations under thisAgreement, in the same manner and to the same extent that the Bank and Companywould be required to perform if no such succession or assignment had takenplace.

 

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***23.******                               RequiredProvisions.***

 

In the eventany of the foregoing provisions of this Section 23 are in conflict withthe terms of this Agreement, this Section 23 shall prevail.

 

(a)                                  TheBoards of Directors may terminate Executive’s employment at any time, but anytermination by the Bank or the Company, other than termination for Cause, shallnot prejudice Executive’s right to compensation or other benefits under thisAgreement.  Executive shall not have theright to receive compensation or other benefits for any period aftertermination for Cause as defined in this Agreement.

 

(b)                                 IfExecutive is suspended from office and/or temporarily prohibited fromparticipating in the conduct of the affairs of the Bank by a notice servedunder Section 8(e)(3) or 8(g)(1) of the Federal DepositInsurance Act, 12 U.S.C. §1818(e)(3) or (g)(1); the Bank’s obligationsunder this contract shall be suspended as of the date of service, unless stayedby appropriate proceedings.  If thecharges in the notice are dismissed, the Bank may in its discretion:  (i) pay Executive all or part of thecompensation withheld while their contract obligations were suspended; and (ii) reinstate(in whole or in part) any of 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 this Section shallnot 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 theDirector of the OTS (or his designee) at the time the FDIC enters into anagreement to provide assistance to or on behalf of the Bank under the authoritycontained in Section 13(c) of the Federal Deposit Insurance Act, 12U.S.C. §1823(c); or (ii) by the Director of the OTS (or his designee) atthe time the Director (or his designee) approves a supervisory merger toresolve problems related to the operations of the Bank or when the Bank isdetermined by the Director to be in an unsafe or unsound condition.  Any rights of the parties that have alreadyvested, 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.

 

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IN WITNESSWHEREOF, Fox Chase Bancorp, Inc. and Fox Chase Bank have caused thisAgreement to be executed and its seal to be affixed hereunto by their dulyauthorized officer and Executive has signed this Agreement, on the 16 day of October,2008.

 

 
| ATTEST:                | ** ** | **FOX CHASE BANCORP, INC.** |
|------------------------|------------|-----------------------------|
|                   |       |                        |
|                   |       |                        |
| /s/ Jerry D.  Holbrook |       | By:                         | /s/ Thomas  M. Petro |
|                   |       |                        | For the  Entire Board of Directors |
|                   |       |                        |
|                   |       |                        |
| ATTEST:                | ** ** | **FOX CHASE BANK**          |
|                   |       |                        |
|                   |       |                        |
| /s/ Jerry D.  Holbrook |       | By:                         | /s/ Thomas  M. Petro |
|                   |       |                        | For the  Entire Board of Directors |
|                   |       |                        |
|                   |       |                        |
| WITNESS:               |       |                        |
|                   |       |                        |
|                   |       |                        |
| /s/ Mary  Regnery      |       | /s/ Keiron  G. Lynch        |
|                   |       | Keiron G.  Lynch            |

 

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