EXHIBIT 10.7


 


FOX CHASE BANK

CHANGE IN CONTROL AGREEMENT


 


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


 


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


 


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


 


WHEREAS, Executive
and the Boards of Directors of the Company and the Bank desire to enter into a
revised change in control agreement setting forth the terms and conditions of
the continuing employment of Executive and the related rights and obligations
of each of the parties and to bring the Agreement into compliance with 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 mutual covenants herein contained, it is
hereby agreed as follows:


 


1.             TERM
OF AGREEMENT.


 


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


 


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


 


(c)           Notwithstanding
anything in this Section to the contrary, this Agreement shall terminate
if Executive or the Bank terminates Executive’s employment prior to a Change in
Control.


 

















 


2.             TERMINATION OF
EMPLOYMENT AFTER A CHANGE IN CONTROL.


 


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


 


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


 


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


 


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


 


(i)            for salaried employees, the employee’s
annual base salary at the rate in effect on his or her termination date or, if
greater, the rate in effect on the date immediately preceding the Change in
Control.


 


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


 


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


 


(b)           The parties to this
Agreement intend for the payments to satisfy the short-term deferral exception
under Section 409A of the Code or, in the case of health and welfare
benefits, not constitute deferred compensation (since such amounts are not
taxable to Executive).  However,
notwithstanding anything to the contrary in this Agreement, to the extent
payments do not meet the short-term deferral exception of Section 409A of
the Code and, in the event Executive is a “Specified Employee” (as defined
herein) no payment shall be made to Executive under this Agreement prior to the
first day of the seventh month following the Event of Termination in excess of
the “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) the
sum of Executive’s annualized compensation based upon the annual rate of pay
for 


 


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services provided to the Company for the
calendar year preceding the year in which Executive has an Event of
Termination, or (B) the maximum amount that 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 of Termination.  The payment of the “permitted amount” shall
be made within sixty (60) days of the occurrence of the Event of
Termination.  Any payment in excess of
the permitted amount shall be made to Executive on the first day of the seventh
month following the Event of Termination. 
“Specified Employee” shall be interpreted to comply with Section 409A
of the Code and shall mean a key employee within the meaning of Section 416(i) of
the Code (without regard to Section 5 thereof), but an individual shall be
a “Specified Employee” only if the Company is a publicly-traded institution or
the subsidiary of a publicly-traded holding company.


 


3.             DEFINITIONS;
SPECIAL LIMITATIONS.


 


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


 


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


 


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


 


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


 


iii.            Acquisition of Significant Share
Ownership:  There is filed, or
required to be filed, a report on Schedule 13D or another form or schedule
(other than Schedule 13G) required under Sections 13(d) or 14(d) of
the Securities Exchange Act of 1934, if the schedule discloses that the filing
person or persons acting in concert has or have become the beneficial owner(s) of
20% or more of a class of the Bank’s or the Company’s voting securities,
however this clause (iii) shall not apply to beneficial ownership of Bank
or Company voting shares held in a fiduciary capacity by an entity of which the
Bank or the Company directly or indirectly beneficially owns 50% or more of its
outstanding voting securities; or


 


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


 


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v.             Proxy
Statement Distribution:  An
individual or company (other than current management of the Company) solicits proxies
from stockholders of the Company seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Company or Bank with one or more
corporations as a result of which the outstanding shares of the class of
securities then subject to such plan or transaction are exchanged for or
converted into cash or property or securities not issued by the Bank or the
Company; or


 


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


 


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


 


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


 


i.              a material reduction in title, authority
or responsibilities;


 


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


 


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


 


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


 


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


 


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


 


(c)           Notwithstanding
anything in this Agreement to the contrary, in no event shall the aggregate
payments or benefits to be made or afforded to Executive under said paragraphs
or 


 


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otherwise (the “Termination Benefits”) constitute an “excess
parachute payment” under Section 280G of the Internal Revenue Code of 1986,
as amended, or any successor thereto, and to avoid such 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) less than an amount equal to
three (3) times Executive’s “base amount,” as determined in accordance
with said Section 280G. The allocation of the reduction required hereby
among the Termination Benefits provided by this Section 3 shall be
determined by Executive.


 


(d)           Notwithstanding
anything in this Agreement to the contrary, if the Bank in good faith
determines that amounts that, as of the effective date of the Executive’s
termination of employment are or may become payable to the Executive upon
termination of his employment hereunder are required to be suspended or delayed
for six (6) months in order to satisfy the requirements of Section 409A
of the Internal Revenue Code, then the Bank will so advise the Executive, and
any such payments shall be suspended and accrued for six months.


 


4.             NOTICE OF TERMINATION.


 


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


 


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


 


5.             NON-COMPETE;
NON-SOLICITATION.


 


(a)           Notwithstanding
anything in this Agreement to the contrary, this Section 5 shall only
apply on or after the effective date of a Change in Control.  If, on or after the effective date of a
Change in Control, the Executive’s employment is terminated  (i)  by the Bank without Cause or (ii) by
Executive with Good Reason, then for the period beginning on the Executive’s
termination date and ending one (1) year thereafter (the “Restricted
Period”), Executive shall not, without express prior written consent of the
Bank, directly or indirectly, own or hold any proprietary interest in, or be
employed by or receive remuneration from, any corporation, partnership, sole
proprietorship or other entity (collectively, an “entity”) “engaged in
competition” (as defined below) with the Bank or any of its affiliates (a “Competitor”).
For purposes of the preceding sentence, the term “proprietary interest” means
direct or indirect ownership of an equity interest in an entity other than
ownership of less than two (2) percent of any class stock in a
publicly-held entity. Further, an entity shall be considered to be “engaged in
competition” if such entity is, or is a holding company for or a subsidiary of
an entity which is engaged in the business of providing banking, trust
services, asset management advice, or similar financial services to consumers,
businesses individuals or other entities; and the entity, holding company or
subsidiary maintains physical offices for the transaction of such business or
businesses in any city, town or county in which the Executive’s normal business
office is located or the Bank has an office or has filed an application for
regulatory approval to establish an 


 


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


 


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


 


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


 


(d)           Executive
acknowledges that the restrictions contained in this Section 5 are
reasonable and necessary to protect the legitimate interests of the Bank and
that any breach by Executive of any provision contained in this Section 5
will result in irreparable injury to the Bank for which a remedy at law would
be inadequate. Accordingly, Executive acknowledges that the Bank shall be
entitled to temporary, preliminary and permanent injunctive relief against
Executive in the event of any breach or threatened breach by Executive of the
provisions of this Section 5, in addition to any other remedy that may be
available to the Bank whether at law or in equity. With respect to any
provision of this Section 5 finally determined by a court of competent
jurisdiction to be unenforceable, such court shall be authorized to reform this
Agreement or any provision hereof so that it is enforceable to the maximum
extent permitted by law. If the covenants of Section 5 are determined to
be wholly or partially unenforceable in any jurisdiction, such determination
shall not be a bar to or in any way diminish the Bank’s right to enforce such
covenants in any other jurisdiction and shall not bar or limit the
enforceability of any other provisions. The Bank shall not be required to post
any bond or other security in connection with any proceeding to enforce the
provisions of this Section 5.


 


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


 


(f)            Notwithstanding
the foregoing provisions of this Section 5, Executive may elect to waive
the payment provided for under Section 2(a)A of this Agreement in exchange
for a release of all restrictions set forth in this Section 5. Executive
must make his election under this Section 5(f) in writing and within
5 business days of receiving his Notice of Termination.


 


6.             SOURCE
OF PAYMENTS.


 


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


 


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


 


7.             EFFECT ON PRIOR
AGREEMENTS AND EXISTING BENEFIT PLANS.


 


This Agreement
contains the entire understanding between the parties hereto and supersedes any
prior agreement between the Bank and Executive, except that this Agreement
shall not affect or operate to reduce any benefit or compensation inuring to
Executive of a kind elsewhere provided. Nothing in this Agreement shall confer
upon Executive the right to continue in the employ of the Bank or shall impose
on the Bank any obligation to employ or retain Executive in its employ for any
period.


 


8.             NO
ATTACHMENT.


 


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


 


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


 


9.             MODIFICATION
AND WAIVER.


 


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


 


(b)           No
term or condition of this Agreement shall be deemed to have been waived, nor
shall there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver
or estoppel. No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate only as to the
specific term or condition waived and shall not constitute a waiver of such
term or condition for the future or as to any act other than that specifically
waived.


 


10.          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 this Agreement
or any part of such provision not held so invalid, and each such other
provision and part thereof shall to the full extent consistent with law
continue in full force and effect.


 


11.          HEADINGS
FOR REFERENCE ONLY.


 


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


 


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


 


12.          GOVERNING
LAW.


 


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


 


13.          ARBITRATION.


 


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


 


14.          PAYMENT
OF LEGAL FEES.


 


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


 


15.          INDEMNIFICATION.


 


The Bank shall provide Executive (including his heirs, executors and
administrators) with coverage under a standard directors’ and officers’
liability insurance policy at its expense and shall indemnify Executive (and
his heirs, executors and administrators) to the fullest extent permitted under
applicable law against all expenses and liabilities reasonably 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 an officer of the Bank (whether or
not he continues to be a director 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, attorneys’ fees and the cost of reasonable
settlements.


 


16.          SUCCESSORS
TO THE BANK.


 


The Bank shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all of the business or assets of the Bank, expressly and
unconditionally to assume and agree to perform the Bank’s obligations under
this Agreement, in the same manner and to the same extent that the Bank would
be required to perform if no such succession or assignment had taken place.


 


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17.          REQUIRED PROVISIONS.


 


In the event
any of the provisions of this Section 17 are in conflict with the other
terms of this Agreement, this Section 17 shall prevail.


 


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


 


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


 


(c)           If
Executive is removed and/or permanently prohibited from participating in the
conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or
8(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 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) of the Federal
Deposit Insurance Act, 12 U.S.C. §1813(x)(1) all obligations of the Bank
under this contract shall terminate as of the date of default, but this
paragraph shall not affect any vested rights of the contracting parties.


 


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


 


(f)            Any
payments made to employees pursuant to this Agreement, or otherwise, are
subject to and conditioned upon their compliance 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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SIGNATURES


 


IN WITNESS WHEREOF, Fox Chase Bank has caused
this Agreement to be executed and its seal to affixed hereunto by a duly
authorized officer, and Executive has signed this Agreement, on the day of October
15, 2008.


 


	
  ATTEST:

  	
   

  	
  FOX CHASE BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Jerry D. Holbrook

  	
   

  	
  By:

  	
  /s/ Thomas M. Petro

  
	
  Corporate Secretary

  	
   

  	
   

  	
  For the Entire Board of Directors

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FOX CHASE BANCORP, INC.

  
	
   

  	
   

  	
  (guarantor)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Thomas M. Petro

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Mary Regnery

  	
   

  	
  /s/ Richard Fuchs

  
	
   

  	
   

  	
  Richard Fuchs

  



 


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