**EXHIBIT 10.3**

 

# **EMPLOYMENT AGREEMENT**

 

**THIS****AGREEMENT** (“Agreement”),as amended and restated, is made this 1st 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 **Thomas M. Petro**(“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 President and Chief Executive Officer for the period providedfor 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 the employmentof Executive and 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 and conditionsof 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 President and Chief Executive Officer of the Company and Bank.  Executive shall have responsibility for thegeneral management and control of the business and affairs of the Company andits subsidiaries, including the Bank, and shall perform all duties and shallhave all powers which are commonly incident to the offices of President andChief Executive Officer or which, consistent with those offices, are delegatedto him by the Board of Directors of 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 $287,249 per year (“Base Salary”).  In addition to the Base Salary provided inthis Section 3(a), the Bank shall also provide Executive with all such otherbenefits as are provided uniformly to permanent full-time employees of theBank.  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 ofthe Bank 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 the performanceof Executive’s obligations under this Agreement and may provide such additionalcompensation in such form and such amounts as the Board of Directors of theCompany 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) 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 7 ofthis Agreement; or (ii) Executive’s resignation from the Bank or Company,upon, any (A) notice to Executive of non-renewal of the term of thisAgreement (B) failure to reappoint Executive as President and ChiefExecutive Officer, (C) material change in Executive’s functions, duties,or responsibilities with the Bank, the Company or its subsidiaries, whichchange 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 the Agreementunder any retirement programs (whether tax-qualified or non-qualified) in whichExecutive participated prior to his termination (with the amount of thebenefits determined by reference to the benefits received by the Executive oraccrued on his behalf under such programs during the twelve (12) monthspreceding his termination).  Executiveshall receive this payment in a single lump sum within ten (10) days ofhis 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 comparable coverageon an individual policy basis.  In theevent the Bank or the Company is not in compliance with its minimum capitalrequirements 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 “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)                                 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 “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.                                   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)                                 Ifany of the events described in Section (a) of this Section 5,constituting a Change in Control, have occurred or the Boards of Directors determinethat a Change in Control has occurred, Executive shall be entitled to thebenefits 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 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 “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 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 provisionsof Section 5, in no event shall the aggregate payments or benefits to bemade or afforded to Executive under said sections (the “Termination Benefits”)constitute an “excess parachute payment” under Section 280G of theInternal Revenue Code of 1986 or any successor thereto, and in order to avoidsuch a result, Termination Benefits will be reduced, if necessary, to an amount(the “Non-Triggering Amount”), the value of which is one dollar ($1.00) lessthan an amount equal to the maximum amount allowable as a deduction by the Bankor 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 phrase termination for “Cause”shall mean termination because of Executive’s personal dishonesty,incompetence, willful misconduct, any breach of fiduciary duty involvingpersonal profit, intentional failure to perform stated duties, willfulviolation of any law, rule, regulation (other than traffic violations orsimilar offenses), Executive’s breach of a final cease and desist order issuedby 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 of competentjurisdiction (the time for appeal therefrom having expired and no appeal havingbeen perfected), and provided further that the Date of Termination shall beextended by a notice of dispute only if such notice is given in good faith andthe party giving such notice pursues the resolution of such dispute withreasonable diligence. Notwithstanding the pendency of any such dispute, theBank and Company (as they shall determine) will continue to pay Executive hisfull compensation in effect when the notice giving rise to the dispute wasgiven (including, but not limited to, Base Salary) and continue him as aparticipant in all compensation, benefit and insurance plans in which he wasparticipating when the notice of dispute was given, until the dispute is finallyresolved in accordance with this Agreement. Amounts paid pursuant to thisprovision shall be in addition to all other amounts due under this Agreementand shall not be offset against or reduce any other amounts due under thisAgreement.

 

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

 

All payments and benefits toExecutive under this Agreement shall be subject to Executive’s compliance withthis Section 9 for one (1) full year after the earlier of theexpiration of this Agreement or termination of Executive’s employment with theCompany. Executive shall, upon reasonable notice, furnish such information andassistance to the Company and Bank as may reasonably be required by the Companyand Bank in connection with any litigation in which it or any of itssubsidiaries 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.******                              ******Loyaltyand Confidentiality.***

 

(a)                                  During the term of this AgreementExecutive:  (i) shall devote all histime, attention, skill, and efforts to the faithful performance of his dutieshereunder; provided, however, that from time to time, Executive may serve onthe boards of directors of, and hold any other offices or positions in,companies or organizations which will not present any conflict of interest withthe Company and the Bank or any of their subsidiaries or affiliates,unfavorably affect the performance of Executive’s duties pursuant to thisAgreement, 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 in this Agreement shallprevent or limit Executive’s right to invest in the capital stock or othersecurities of any business dissimilar from that of the Company and the Bank,or, solely as a passive, minority investor, in any business.

 

(c)                                  Executive agrees to maintain theconfidentiality of any and all information concerning the operation orfinancial status of the Company and the Bank; the names or addresses of any ofits borrowers, depositors and other customers; any information concerning orobtained from such customers; and any other information concerning the Companyand the Bank to which he may be exposed during 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 andDisability.***

 

(a)                                  *Death.*Notwithstanding any other provision of thisAgreement to the contrary, in the event of Executive’s death during the term ofthis Agreement, the Bank or Company *(*as**they shall determine) shall immediatelypay his estate any salary and bonus accrued but unpaid as of the date of hisdeath, and, for a period of six (6) months after Executive’s death, theBank shall continue to provide his dependents’ medical insurance benefitsexisting on the date of his death and shall pay Executive’s designatedbeneficiary all compensation that would otherwise be payable to him pursuant toSection 3(a) of this Agreement. This provision shall not negate anyrights Executive or his beneficiaries may have to death benefits under anyemployee benefit plan of the Company or the Bank.

 

(b)                                 *Disability.*

 

(i)                                     The Bank or Company or Executive mayterminate Executive’s employment after having established Executive’sDisability. For purposes of this Agreement, “Disability” means a physical ormental infirmity that impairs Executive’s ability to substantially perform hisduties under this Agreement and that results in Executive becoming eligible forlong-term disability benefits under the Company’s or the Bank’s long-term disabilityplan (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 ofDirectors shall determine whether or not Executive is and continues to bepermanently disabled for purposes of this Agreement in good faith, based uponcompetent medical advice and other factors that they reasonably believe to berelevant. As a condition to any benefits, the Boards of Directors may requireExecutive to submit to such physical or mental evaluations and tests as itdeems reasonably appropriate.

 

(ii)           In the event of Disability, Executive’s obligation to perform servicesunder this Agreement will terminate. In the event of such termination,Executive shall continue to receive two-thirds (66.667%) of his monthly BaseSalary (at the annual rate in effect on the Date of Termination) followingtermination through the earlier of:  (A) thedate Executive returns to full-time employment at the Company or the Bank inthe same capacity as he was prior to his termination for Disability; (B) Executive’sdeath; or (C) Executive’s attainment of age 65. Such payments shall bereduced by the amount of any short- or long-term disability benefits payable toExecutive under any disability program sponsored by the Company or the Bank. Inaddition, during any period of Executive’s Disability, Executive and hisdependents shall, to the greatest extent possible, continue to be covered underall benefit plans (including, without limitation, retirement plans and medical,dental and life insurance plans) of the Company or the Bank in which Executiveparticipated prior to the occurrence of Executive’s Disability, on the sameterms as if Executive were actively employed by the Bank or Company.

 

***12.******                              ******Source ofPayments.***

 

Allpayments provided for in this Agreement shall be timely paid in cash or checkfrom 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.

 

***13.******                              ******Effect ofPrior Agreements and Existing Benefit Plans.***

 

ThisAgreement contains the entire understanding between the parties hereto and supersedesany prior employment agreement between the Bank, Company or any predecessor ofthe Bank, 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 this Agreement shall be interpreted to meanthat Executive is subject to receiving fewer benefits than those available tohim without reference to this Agreement.

 

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

 

(a)                                  Except as required by law, no right toreceive payments under this Agreement shall be subject to anticipation,commutation, alienation, sale, assignment, encumbrance, charge, pledge orhypothecation, or to execution, attachment, levy or similar process orassignment by operation of law, and any attempt, voluntary or involuntary, toaffect any such action shall be null, void and of no effect.

 

(b)                                 This Agreement shall be binding upon, andinure to the benefit of Executive, the Bank, the Company and their respectivesuccessors and assigns.

 

***15.******                              ******Modificationand Waiver.***

 

(a)                                  This Agreement may not be modified or amendedexcept by an instrument in writing signed by the parties hereto.

 

(b)                                 No term or condition of this Agreement shallbe deemed to have been waived, nor shall there be any estoppel against theenforcement of any provision of this Agreement, except by written instrument ofthe party charged with such waiver or estoppel. No such written waiver shall bedeemed a continuing waiver unless specifically stated therein, and each suchwaiver shall operate only as to the specific term or condition waived and shallnot constitute 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 this Agreement, 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.******                              ******Headingsfor Reference Only.***

 

Theheadings of 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.***

 

ThisAgreement shall be governed by the laws of the Commonwealth of Pennsylvania(without regard to principles of conflicts of law of that state).

 

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

 

Anydispute or controversy arising under or in connection with this Agreement shallbe settled exclusively by arbitration, conducted before a panel of three (3) arbitratorssitting in a location selected by Executive within fifty (50) miles from thelocation of the Bank, in

 

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accordance with the rules ofthe American Arbitration Association then in effect. Judgment may be entered onthe arbitrator’s award in any court having jurisdiction; provided, however,that Executive shall be entitled to seek specific performance of his right tobe paid until the Date of Termination during the pendency of any dispute orcontroversy arising under or in connection with this Agreement.

 

Inthe event any dispute or controversy arising under or in connection withExecutive’s termination is resolved in favor of Executive, whether by judgment,arbitration or settlement, Executive shall be entitled to the payment of allback-pay, including salary, bonuses and any other cash compensation, fringebenefits and any compensation and benefits due Executive under this Agreement.

 

***20.******                              ******Payment ofLegal Fees.***

 

Allreasonable legal fees paid or incurred by Executive pursuant to any dispute orquestion of interpretation relating to this Agreement shall be paid orreimbursed by the Bank or Company (as they shall determine), only if Executiveis successful pursuant to a legal judgment, arbitration or settlement.

 

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

 

TheBank and Company 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 ofboth Bank and Company) to the fullest extent permitted under federal law orunder the Bank and Company Charters against all expenses and liabilitiesreasonably incurred by him in connection with or arising out of any action,suit or proceeding in which he may be involved by reason of his having been adirector or officer of the Company or Bank (whether or not he continues to be adirector or officer at the time of incurring such expenses or liabilities),such expenses and liabilities to include, but not be limited to, judgments,court costs and attorneys’ fees and the cost of reasonable settlements.

 

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

 

TheBank and Company shall require any successor or assignee, whether direct orindirect, 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.******                              ******RequiredProvisions.***

 

Inthe event any of the foregoing provisions of this Section 23 are inconflict with the terms of this Agreement, this Section 23 shall prevail.

 

(a)                                  The Boards of Directors may terminateExecutive’s employment at any time, but any termination by the Bank or theCompany, other than termination for Cause, shall not prejudice Executive’sright to compensation or other benefits under this Agreement. Executive shallnot have the right to receive compensation or other benefits for any periodafter termination for Cause as defined in this Agreement.

 

(b)                                 If Executive is suspended from office and/ortemporarily prohibited from participating in the conduct of the affairs of theBank by a notice served under Section 8(e)(3) or 8(g)(1) of theFederal Deposit Insurance Act, 12 U.S.C. §1818(e)(3) or (g)(1); the Bank’sobligations under this contract shall be suspended as of the date of service,unless stayed by appropriate proceedings. If the charges in the notice aredismissed, the Bank may in its discretion: (i) pay Executive all or part of the compensation withheld whiletheir contract obligations were suspended; and (ii) reinstate (in whole orin part) any of the obligations which were suspended.

 

(c)                                  If Executive is removed and/or permanentlyprohibited from participating in the conduct of the Bank’s affairs by an orderissued under Section 8(e)(4) or 8(g)(1) of the Federal DepositInsurance Act, 12 U.S.C. §1818(e)(4) or (g)(1), all obligations of theBank under this contract shall terminate as of the effective date of the order,but vested rights of the contracting parties shall not be affected.

 

(d)                                 If the Bank is in default as defined in Section 3(x)(1) ofthe Federal Deposit Insurance Act, 12 U.S.C. §1813(x)(1) all obligationsof the Bank under this contract shall terminate as of the date of default, butthis Section shall not affect any vested rights of the contractingparties.

 

(e)                                  All obligations under this contract shall beterminated, except to the extent determined that continuation of the contractis necessary for the continued operation of the Bank:  (i) by the Director of the OTS (or hisdesignee) at the time the FDIC enters into an agreement to provide assistanceto or on behalf of the Bank under the authority contained in Section 13(c) ofthe Federal Deposit Insurance Act, 12 U.S.C. §1823(c); or (ii) by theDirector of the OTS (or his designee) at the time the Director (or hisdesignee) approves a supervisory merger to resolve problems related to theoperations of the Bank or when the Bank is determined by the Director to be inan unsafe or unsound condition. Any rights of the parties that have alreadyvested, however, shall not be affected by such action.

 

(f)                                    Any payments made to employees pursuant tothis Agreement, or otherwise, are subject to and conditioned upon theircompliance with 12 U.S.C. §1828(k) and FDIC regulation 12 C.F.R. Part 359,Golden Parachute and Indemnification Payments.

 

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INWITNESS WHEREOF, Fox Chase Bancorp, Inc. and Fox Chase Bank have causedthis Agreement to be executed and its seal to be affixed hereunto by their dulyauthorized officer and Executive has signed this Agreement, on the 23 day of October,2008.

 

 
| ATTEST:                | ** ** | **FOX CHASE  BANCORP, INC.** |
|------------------------|------------|------------------------------|
|                   |       |                         |
|                   |       |                         |
| /s/ Jerry D.  Holbrook |       | By:                          | /s/ Richard  E. Bauer |
|                   |       |                         | For the Entire Board of  Directors |
|                   |       |                         |
|                   |       |                         |
| ATTEST:                | ** ** | **FOX CHASE  BANK**          |
|                   |       |                         |
|                   |       |                         |
| /s/ Jerry D.  Holbrook |       | By:                          | /s/ Richard  E. Bauer |
|                   |       |                         | For the Entire Board of  Directors |
|                   |       |                         |
|                   |       |                         |
| WITNESS:               |       |                         |
|                   |       |                         |
|                   |       |                         |
| /s/ Jerry D.  Holbrook |       | /s/ Thomas  M. Petro         |
|                   |       |   Thomas M. Petro  |

 

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