## **EXHIBIT 10.4**

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# **EMPLOYMENT AGREEMENT**

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**THIS****AGREEMENT** (“Agreement”),as amended and restated, is made this1st day of October, 2008 by and between **Fox Chase Bancorp, Inc.** (the “Company”),a corporation organized under the laws of the United States of America, withits principal offices at 4390 Davisville Road, Hatboro, Pennsylvania 19040, **Fox Chase Bank** (the “Bank”), a federallychartered stock savings bank organized under the laws of the United States ofAmerica, with its principal offices at 4390 Davisville Road, Hatboro,Pennsylvania 19040 and **Jerry D. Holbrook**(“Executive”).

 

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

 

**WHEREAS**,the Company and Bank desire to continue to assure both entities of the servicesof Executive as Executive Vice President and Chief Operations Officer for theperiod provided for in this Agreement; and

 

**WHEREAS**,Executive and the Board of Directors of both the Company and Bank desire toenter into an agreement setting forth the terms and conditions of theemployment of Executive and the related rights and obligations of each of theparties.

 

**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 the Code.

 

**NOW,THEREFORE**, in consideration of the promises and mutualcovenants herein contained, it is agreed as follows:

 

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

 

(a)           Duringthe period of Executive’s employment under this Agreement, Executive agrees toserve as Executive Vice President and Chief Operations Officer of the Companyand Bank.  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 Operations 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 thisAgreement, including activities and services related to the organization,operation and management of the Company and its subsidiaries, including theBank, as well as participation in community, professional and civicorganizations; provided, however, that, Executive may serve, or continue toserve, on the boards of directors of, and hold any other offices or positionsin, companies or organizations listed by Executive on his annual conflict ofinterest 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)           The Bank or the Company(as they shall determine), shall pay Executive as compensation a salary of$216,008 per year (“Base Salary”).  Inaddition to the Base Salary provided in this Section 3(a), the Bank shallalso provide Executive with all such other benefits as are provided uniformlyto permanent full-time employees of the Bank. If Executive’s Base Salary is increased, such increased Base Salaryshall then constitute the Base Salary for all purposes of this Agreement.  For purposes of Section 4(b) ofthis Agreement, Base Salary shall be deemed to include the highest cash bonusor similar cash incentive compensation paid to or accrued on behalf of theExecutive with respect to the three (3) taxable years preceding histermination of employment.  For purposesof Section 5(c) of this Agreement, Base Salary shall be defined asthe amount reported in Box 1 of the Executive’s Form W-2, plus amountsdeferred under the Bank’s 401(k) Plan and/or Section 125 Plan (ifany), or deferred at the Executive’s election or on behalf of the Executive toany non-qualified deferred compensation plan of the Bank or the Company.

 

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(b)           Executive shall beentitled to participate in or receive benefits under any employee benefit plansincluding but not limited to, retirement plans, profit-sharing plans, or anyother employee benefit plan or arrangement made available by the Bank orCompany in the future to its senior executives, subject to and on a basisconsistent with the terms, conditions and overall administration of such plansand arrangements.  Executive shall beentitled 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)           The Company or Bank (asthey shall determine) shall also pay or reimburse Executive for all reasonabletravel and other reasonable expenses incurred in the performance of Executive’sobligations under this Agreement and may provide such additional compensationin such form and such amounts as the Board of Directors of the Company or Bankmay from time to time determine.

 

(d)           Executive shall takevacation 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) during Executive’sterm 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 VicePresident and Chief Operations Officer, (C) material change in Executive’sfunctions, duties, or responsibilities with the Bank, the Company or itssubsidiaries, which change would cause Executive’s position(s) to becomeof lesser responsibility, importance, or scope from the position and attributesthereof described in Section 1 of this Agreement, (D) materialreduction in the benefits and perquisites provided to Executive from thosebeing provided as of the effective date of this Agreement, except to the extentsuch coverage may be changed in its application to all Bank employees, (E) liquidationor dissolution of the Company or the Bank, or (F) breach of this Agreementby the Bank or Company.  Upon theoccurrence of any event described in clauses (A), (B), (C), (D), (E) or(F), above, Executive shall have the right to terminate his employment underthis Agreement by resignation upon not less than sixty (60) days prior writtennotice given within six (6) full calendar months after the event givingrise to Executive’s right to elect to terminate his employment.

 

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(b)           Upon the occurrence ofan Event of Termination, on the Date of Termination, as defined in Section 8,the Company and Bank (as they shall determine) shall be obligated to payExecutive, or, in the event of his subsequent death, his beneficiary orbeneficiaries, or his estate, as the case may be the value of the Executive’sbase salary for the remaining term of the Agreement plus the value of all benefitshe would have received during the remaining term of the Agreement under anyretirement programs (whether tax-qualified or non-qualified) in which Executiveparticipated prior to his termination (with the amount of the benefitsdetermined by reference to the benefits received by the Executive or accrued onhis behalf under such programs during the twelve (12) months preceding histermination).  Executive shall receivethis payment in a single lump sum within ten (10) days of his terminationof employment.  In addition, Executiveand his dependents will continue to participate in any benefit plans of theCompany or the Bank that provide health (including medical and dental), or lifeinsurance, or similar coverage upon terms no less favorable than the mostfavorable terms provided to senior executives of the Company and the Bankduring the remaining term of the Agreement. In the event that the Company and the Bank are unable to provide suchcoverage by reason of Executive no longer being an employee, the Company andthe Bank shall provide Executive with comparable coverage on an individualpolicy basis.  In the event the Bank orthe Company is not in compliance with its minimum capital requirements or ifsuch payments pursuant to this subsection (b) would cause the Company orBank’s capital to be reduced below its minimum regulatory capital requirements,such payments shall be deferred until such time as either the Company or theBank 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 “Restricted Period”),Executive shall not, without express prior written consent from the Company orthe Bank, directly or indirectly, own or hold any proprietary interest in, orbe employed by or receive remuneration from, any corporation, partnership, soleproprietorship of other entity (collectively, an “entity”) “engaged incompetition” (as defined below) with the Bank or any other affiliates (“Competitor”).  For purposes of the preceding sentence, theterm “proprietary interest” means direct or indirect ownership of an equityinterest in an entity other than ownership of less than two percent (2%) of anyclass of stock in a publicly-held entity. Further, an entity shall be considered to be “engaged in competition” ifsuch entity is, or is a holding company for, or a subsidiary of an entity whichis engaged in the business of providing banking, trust services, assetmanagement advice, or similar financial services to consumers, businesses,individuals or other entities; and the entity, holding company or subsidiarymaintains physical offices for the transaction of such business or businessesin any city, town or county in which the Executive’s normal business office islocated or the Bank has an office or has filed an application for regulatoryapproval to establish an office, as determined on the date of Executive’stermination of employment.

 

(d)           During the RestrictedPeriod, Executive shall not, without express prior written consent of the Bankor the Company, solicit or assist any other person in soliciting for theaccount of any Competitor, any customer or client of the Bank or any of itssubsidiaries.

 

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(e)           During the RestrictedPeriod, Executive shall not, without the express prior written consent of theBank, directly or indirectly, (i) solicit or assist any third party insoliciting for employment any person employed by the Bank or any of itssubsidiaries 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 or anyprovision hereof so that it is enforceable to the maximum extent permitted bylaw.  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)           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 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 “permittedamount” shall be 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 

 

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

 

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

 

(a)           Forpurposes of this Agreement, a Change in Control means any of the followingevents:

 

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 the Company’svoting securities, however this clause (iii) shall not apply to beneficialownership of Bank or Company voting shares held in a fiduciary capacity by anentity of which the Bank or the Company directly or indirectly beneficiallyowns 50% or more of its outstanding voting securities.

 

iv.            Saleof Assets:  The Bank or the Companysells to a third party 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.            TenderOffer:  A tender offer is made for20% or more of the voting 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)           Ifany of the events described in Section (a) of this Section 5,constituting a Change in Control, have occurred or the Boards of Directorsdetermine that a Change in Control has occurred, Executive shall be entitled tothe benefits provided for in subsections (c) and (d) of this Section 5upon his termination of employment at any time during the term of thisAgreement and any extensions thereof, on or after the date the Change inControl occurs due to (i) Executive’s dismissal, (ii) Executive’sresignation following any demotion, loss of title, office or significantauthority or responsibility, reduction in annual compensation or benefits orrelocation of his principal place of employment by more than thirty (30) milesfrom its location immediately 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, unless Executive’stermination is for Cause as defined in Section 7 of this Agreement;provided, however, that such benefits shall be reduced by any payment madeunder 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 shalldetermine) 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 andprograms from which their continued participation is barred or at the electionof Executive, provide their 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 of healthand welfare benefits, not constitute deferred compensation (since such amountsare not taxable 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 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 “permittedamount” shall be 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 paragraph 5 thereof), but an individual shall be a “SpecifiedEmployee” only if the Company is a publicly-traded institution or thesubsidiary of a publicly-traded holding company.

 

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

 

Notwithstandingthe provisions of Section 5, in no event shall the aggregate payments orbenefits to be made or afforded to Executive under said sections (the “TerminationBenefits”) constitute an “excess parachute payment” under Section 280G ofthe Internal Revenue Code of 1986 or any successor thereto, and in order toavoid such a result, Termination Benefits will be reduced, if necessary, to anamount (the “Non-Triggering Amount”), the value of which is one dollar ($1.00)less than an amount equal to the maximum amount allowable as a deduction by theBank or Company, as determined in accordance with said Section 280G.  The allocation of the reduction requiredhereby among the Termination Benefits provided by Section 5 shall bedetermined by Executive.

 

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

 

The phrasetermination for “Cause” shall mean termination because of Executive’s personaldishonesty, incompetence, willful misconduct, any breach of fiduciary dutyinvolving personal profit, intentional failure to perform stated duties,willful violation of any law, rule, regulation (other than traffic violationsor similar offenses), Executive’s breach of a final cease and desist orderissued by the Office of Thrift Supervision, the Securities and Exchange 

 

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Commission, or any regulatoryagency having jurisdiction over the Bank or Company, or material breach of anyprovision 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 to payExecutive his full compensation in effect when the notice giving rise to thedispute was given (including, but not limited to, Base Salary) and continue himas a participant in all compensation, benefit and insurance plans in which hewas 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 paymentsand benefits to Executive under this Agreement shall be subject to Executive’scompliance with this Section 9 for one (1) full year after theearlier of the expiration of this Agreement or termination of Executive’semployment with the Company. Executive shall, upon reasonable notice, furnishsuch information and assistance to the Company and Bank as may reasonably berequired by the Company and Bank in connection with any litigation in which itor any of its subsidiaries or affiliates is, or may become, a party.  Bank and Company (as they shall determine)shall reimburse Executive all reasonable expenses, including costs, fees andexpenses for Executive’s counsel in complying with the provisions of this Section 9.

 

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***10.******          Loyalty andConfidentiality.***

 

(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)           Nothing contained inthis Agreement shall prevent or limit Executive’s right to invest in thecapital stock or other securities of any business dissimilar from that of theCompany 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.******          Death and 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)            The Bank or Company orExecutive may terminate Executive’s employment after having establishedExecutive’s Disability.  For purposes ofthis Agreement, “Disability” means a physical or mental infirmity that impairsExecutive’s ability to substantially perform his duties under this Agreementand that results in Executive becoming eligible for long-term disabilitybenefits under the Company’s or the Bank’s long-term disability plan (or, ifthe Company or the Bank has no such plan in effect, that

 

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impairs Executive’s ability to substantially perform his duties underthis Agreement for 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)           In the event ofDisability, Executive’s obligation to perform services under this Agreementwill terminate.  In the event of suchtermination, Executive shall continue to receive two-thirds (66.667%) of hismonthly Base Salary (at the annual rate in effect on the Date of Termination)following termination through the earlier of: (A) the date Executive returns to full-time employment at theCompany or the Bank in the same capacity as he was prior to his termination forDisability; (B) Executive’s death; or (C) Executive’s attainment ofage 65.  Such payments shall be reducedby the amount of any short- or long-term disability benefits payable toExecutive under any disability program sponsored by the Company or theBank.  In addition, during any period ofExecutive’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 the occurrenceof Executive’s Disability, on the same terms as if Executive were activelyemployed by the Bank or Company.

 

***12.******          Source of Payments.***

 

All payments provided for in this Agreement shall be timely paid incash or check from the general funds of the Bank.  Company and Bank reserve the right to makepayments provided for in this Agreement from general funds of the Company.

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***13.******          Effect of PriorAgreements and Existing Benefit Plans.***

 

This Agreement contains the entireunderstanding between the parties hereto and supersedes any prior employmentagreement between the Bank, Company or any predecessor of the Bank, Company andExecutive, except that this Agreement shall not affect or operate to reduce anybenefit or compensation inuring to Executive of a kind elsewhere provided.  No provision of this Agreement shall beinterpreted to mean that Executive is subject to receiving fewer benefits thanthose available to him without reference to this Agreement.

 

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***14.******          No Attachment.***

 

(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)           This Agreement shall bebinding upon, and inure to the benefit of Executive, the Bank, the Company andtheir respective successors and assigns.

 

***15.******          Modification and Waiver.***

 

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

 

(b)           No term or condition ofthis Agreement shall be deemed to have been waived, nor shall there be anyestoppel against the enforcement of any provision of this Agreement, except bywritten instrument of the party charged with such waiver or estoppel.  No such written waiver shall be deemed acontinuing waiver unless specifically stated therein, and each such waivershall operate only as to the specific term or condition waived and shall notconstitute a waiver of such term or condition for the future as to any actother than that specifically waived.

 

***16.******          Severability.***

 

If, for any reason, any provision of thisAgreement, or any part of any provision, is held invalid, 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.******          Headings for ReferenceOnly.***

 

The headings of sections and Sections herein are included solely forconvenience of reference and shall not control the meaning or interpretation ofany of the provisions of this Agreement.

 

***18.******          Governing Law.***

 

This Agreement shall be governed by the laws of the Commonwealth ofPennsylvania (without regard to principles of conflicts of law of that state).

 

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

 

Any dispute or controversy arising under or in connection with thisAgreement shall be settled exclusively by arbitration, conducted before a panelof three (3) arbitrators sitting in a location selected by Executivewithin fifty (50) miles from the location of 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 event any dispute or controversy arising under or in connectionwith Executive’s termination is resolved in favor of Executive, whether byjudgment, arbitration or settlement, Executive shall be entitled to the paymentof all back-pay, including salary, bonuses and any other cash compensation,fringe benefits and any compensation and benefits due Executive under thisAgreement.

 

***20.******          Payment of 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 or Company (as they shall determine), only ifExecutive is successful pursuant to a legal judgment, arbitration orsettlement.

 

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

 

The Bank and Company shall provide Executive(including his heirs, executors and administrators) with coverage under astandard directors’ and officers’ liability insurance policy at its expense andshall indemnify Executive (and his heirs, executors and administrators) (inaccordance with the By-Laws of both Bank and Company) to the fullest extentpermitted under federal law or under the Bank and Company Charters against allexpenses and liabilities reasonably incurred by him in connection with orarising out of any action, suit or proceeding in which he may be involved byreason of his having been a director or officer of the Company or Bank (whetheror not 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 and attorneys’ fees and the cost ofreasonable settlements.

 

***22.******          Successor to theCompany.***

 

The Bank and Company shall require any successor or assignee, whetherdirect or indirect, by purchase, merger, consolidation or otherwise, to all orsubstantially all the business or assets of the Bank or the Company, expresslyand unconditionally to assume and agree to perform the Bank and Company’sobligations under this Agreement, in the same manner and to the same extentthat the Bank and Company would be required to perform if no such succession orassignment had taken place.

 

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***23.******          Required Provisions.***

 

In the event any of the foregoing provisionsof this Section 23 are in conflict with the terms of this Agreement, this Section 23shall prevail.

 

(a)           The Boards of Directorsmay terminate Executive’s employment at any time, but any termination by theBank or the Company, other than termination for Cause, shall not prejudiceExecutive’s right to compensation or other benefits under this Agreement.  Executive shall not have the right to receivecompensation or other benefits for any period after termination for Cause asdefined 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 WITNESS WHEREOF, Fox Chase Bancorp, Inc.and Fox Chase Bank have caused this Agreement to be executed and its sealto be affixed hereunto by their duly authorized officer and Executive hassigned this Agreement, on the 23 day of October, 2008.

 

 
| ATTEST:                | ** ** | **FOX CHASE BANCORP, INC.** |
|------------------------|------------|-----------------------------|
|                   |       |                        |
|                   |       |                        |
| /s/ Michelle Davenport |       | By:                         | /s/ Thomas M. Petro |
|                   |       |                        | For the Entire Board of Directors |
|                   |       |                        |
|                   |       |                        |
| ATTEST:                | ** ** | **FOX CHASE BANK**          |
|                   |       |                        |
|                   |       |                        |
| /s/ Michelle Davenport |       | By:                         | /s/ Thomas M. Petro |
|                   |       |                        | For the Entire Board of Directors |
|                   |       |                        |
|                   |       |                        |
| WITNESS:               |       |                        |
|                   |       |                        |
|                   |       |                        |
| /s/ Mary Beth Osbeck   |       | /s/ Jerry D. Holbrook       |
|                   |       | Jerry D. Holbrook           |

 

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