Document:

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 

 

4

 

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 

 

6

 

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.

 

8

 

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

  

 

10EXHIBIT 10.11

 

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, with its principal offices at 4390
Davisville Road, Hatboro, Pennsylvania 19040, Fox
Chase Bank (the “Bank”), a federally chartered stock savings bank
organized under the laws of the United States of America, with its principal
offices at 4390 Davisville Road, Hatboro, Pennsylvania 19040 and  Roger S.
Deacon (“Executive”).

 

WHEREAS,
the parties originally entered into this Agreement on July 6, 2007; and

 

WHEREAS,
the Company and Bank desire to continue to assure both entities of the services
of Executive as Executive Vice President and Chief Financial Officer for the
period provided for in this Agreement; and

 

WHEREAS,
Executive and the Board of Directors of both the Company and Bank desire to
enter into an agreement setting forth the terms and conditions of the
employment of Executive 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 an
amended and restated employment 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 agreed as follows:

 

1.             Position and
Responsibilities.

 

(a)           During the period of
Executive’s employment under this Agreement, Executive agrees to serve as
Executive Vice President and Chief Financial Officer of the Company and
Bank.  Executive shall have
responsibility for the general management and control of the business and
affairs of the Company and its subsidiaries, including the Bank, and shall
perform all duties and shall have all powers which are commonly incident to the
offices of Executive Vice President and Chief Financial Officer or which,
consistent with those offices, are delegated to him by the Board of Directors
of the Company and Bank.

 

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

 

 

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

 

(c)           The Bank or the Company
(as they shall determine), will furnish Executive with the working facilities
and staff customary for executive officers with the titles and duties set forth
in this Agreement and as are necessary for him to perform his duties.  The location of such facilities and staff
shall be at the principal administrative offices of the Bank.

 

2.             Term of Employment.

 

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

 

(b)           The Compensation
Committees of the Boards of Directors of the Company and Bank will review the
Agreement and Executive’s performance annually for purposes of determining
whether to extend the Agreement for an additional year.  The Chairman of the Boards of Directors will
give notice to the Executive as soon as possible if the Boards have decided not
to extend the Agreement.

 

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

 

3.             Compensation and
Benefits.

 

(a)           The
Bank or the Company (as they shall determine), shall pay Executive as
compensation a salary of $170,940 per year (“Base Salary”).  In addition to the Base Salary provided in
this Section 3(a), the Bank shall also provide Executive with all such
other benefits as are provided uniformly to permanent full-time employees of
the Bank.  If Executive’s Base Salary is
increased, such increased Base Salary shall then constitute the Base Salary for
all purposes of this Agreement.  For
purposes of Section 4(b) of this Agreement, Base Salary shall be
deemed to include the highest cash bonus or similar cash incentive compensation
paid to or accrued on behalf of the Executive with respect to the three (3) taxable
years preceding his termination of employment. 
For purposes of Section 5(c) of this Agreement, Base Salary
shall 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 125
Plan (if any), or deferred at the Executive’s election or on behalf of the
Executive to any non-qualified deferred compensation plan of the Bank or the
Company.

 

2

 

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

 

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

 

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

 

4.             Payments to Executive
Upon an Event of Termination.

 

(a)           Upon the occurrence of
an Event of Termination (as herein defined) during Executive’s term of
employment under this Agreement, the provisions of this Section 4 shall
apply.  Unless Executive otherwise
agrees, as used in this Agreement, an “Event of Termination” shall mean and
include any one or more of the following: 
(i) the termination by the Company or Bank of Executive’s full-time
employment for any reason other than a termination governed by Section 7
of this Agreement; or (ii) Executive’s resignation from the Bank or
Company, upon, any (A) notice to Executive of non-renewal of the term of
this Agreement (B) failure to reappoint Executive as Executive Vice President
and Chief Financial Officer, (C) material change in Executive’s functions,
duties, or responsibilities with the Bank, the Company or its subsidiaries,
which change would cause Executive’s position(s) to become of lesser
responsibility, importance, or scope from the position and attributes thereof
described in Section 1 of this Agreement, (D) material reduction in
the benefits and perquisites provided to Executive from those being provided as
of the effective date of this Agreement, except to the extent such coverage may
be changed in its application to all Bank employees, (E) liquidation or
dissolution of the Company or the Bank, or (F) breach of this Agreement by
the Bank or Company.  Upon the occurrence
of any event described in clauses (A), (B), (C), (D), (E) or (F), above,
Executive shall have the right to terminate his employment under this Agreement
by resignation upon not less than sixty (60) days prior written notice given
within six (6) full calendar months after the event giving rise to Executive’s
right to elect to terminate his employment.

 

3

 

(b)           Upon
the occurrence of an 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 pay Executive, or, in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may be the value of
the Executive’s base salary for the remaining term of the Agreement plus the
value of all benefits he would have received during the remaining term of the
Agreement under any retirement programs (whether tax-qualified or
non-qualified) in which Executive participated prior to his termination (with
the amount of the benefits determined by reference to the benefits received by
the Executive or accrued on his behalf under such programs during the twelve
(12) months preceding his termination). 
Executive shall receive this payment in a single lump sum within ten (10) days
of his termination of employment.  In
addition, Executive and his dependents will continue to participate in any
benefit plans of the Company or the Bank that provide health (including medical
and dental), or life insurance, or similar coverage upon terms no less
favorable than the most favorable terms provided to senior executives of the
Company and the Bank during the remaining term of the Agreement.  In the event that the Company and the Bank
are unable to provide such coverage by reason of Executive no longer being an
employee, the Company and the Bank shall provide Executive with comparable
coverage on an individual policy basis. 
In the event the Bank or the Company is not in compliance with its
minimum capital requirements or if such payments pursuant to this subsection (b) would
cause the Company or Bank’s capital to be reduced below its minimum regulatory
capital requirements, such payments shall be deferred until such time as either
the Company or the Bank or successor thereto is in capital compliance.  No payments under this Section 4(b) shall
be reduced in the event the Executive obtains other employment following
termination of employment.

 

(c)           During the period
commencing on the effective date of Executive’s termination under Section 4(a) of
this Agreement and ending one (1) year thereafter (the “Restricted Period”),
Executive shall not, without express prior written consent from the Company or
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 of other entity (collectively, an “entity”) “engaged in
competition” (as defined below) with the Bank or any other affiliates (“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 percent (2%) of any
class of stock in a publicly-held entity. 
Further, an entity shall be considered to be “engaged in competition” if
such entity is, or is a holding company for, or 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 office, as determined on the date of Executive’s
termination of employment.

 

(d)           During
the Restricted Period, Executive shall not, without express prior written
consent of the Bank or the Company, 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.

 

4

 

(e)           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.

 

(f)            Executive acknowledges
that the restrictions contained in this Sections (c) through (e) of
this Section 4 are reasonable and necessary to protect the legitimate
interests of the Bank and the Company and that any breach by Executive of any
provision contained in Sections (c) through (e) of this Section 4
will result in irreparable injury to the Bank and Company for which a remedy at
law would be inadequate.  Accordingly,
Executive acknowledges that the Bank and Company shall be entitled to
temporary, preliminary and permanent injunctive relief against Executive in the
event 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 be
available to the Bank or the Company whether at law or in equity.  With respect to Sections (c) through (e) of
this Section 4 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 Sections (c) through
(e) above 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 or the Company’s right to enforce such covenants in any other
jurisdiction and shall not bar or limit the enforceability of any other
provisions.    The Bank and the Company
shall not be required to post any bond or other security in connection with any
proceeding to enforce Sections (c) through (e) of this Section 4.

 

(g)           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 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 

 

5

 

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

 

5.             Change in Control.

 

(a)           For purposes of this
Agreement, a Change in Control means any of the following events:

 

i.              Merger:  The Bank or the Company merges into 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 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.

 

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.

 

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

 

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 

 

6

 

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.

 

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)           If any of the events
described in Section (a) of this Section 5, constituting a
Change in Control, have occurred or the Boards of Directors determine that a
Change in Control has occurred, Executive shall be entitled to the benefits
provided for in subsections (c) and (d) of this Section 5 upon
his termination of employment at any time during the term of this Agreement and
any extensions thereof, on or after the date the Change in Control occurs due
to (i) Executive’s dismissal, (ii) Executive’s resignation following
any demotion, loss of title, office or significant authority or responsibility,
reduction in annual compensation or benefits or relocation of his principal
place of employment by more than thirty (30) miles from its location
immediately prior to the Change in Control or (iii) Executive’s
resignation for any reason within the sixty (60) day period following the date
that is one year from the date the Change in Control occurred, unless Executive’s
termination is for Cause as defined in Section 7 of this Agreement;
provided, however, that such benefits shall be reduced by any payment made
under Section 4 of this Agreement.

 

(c)           Upon the occurrence of
a Change in Control followed by Executive’s termination of employment, as
provided for in Section (b) of this Section 5, the Company or
Bank (as they shall determine) shall pay Executive, or in the event 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 for
the remaining term of the Agreement or (ii) three (3) times Executive’s
average Base Salary for the three (3) taxable years preceding the Change
in Control or (iii) three (3) times Executive’s Base Salary for the
most recent taxable year or portion thereof preceding the Change in
Control.  The benefit shall be payable in
one lump sum within 10 days of Executive’s last day of employment.

 

(d)           Upon the occurrence of
a Change in Control and Executive’s termination of employment in connection
therewith, the Bank and Company (as they shall determine) will cause to be continued
life, medical and dental coverage substantially identical to the coverage
maintained by the Bank for Executive and any of his dependents covered under
such plans immediately prior to the Change in Control. Such coverage and
payments shall cease upon the expiration of thirty-six (36) full calendar
months following the Date of Termination. 
In the event Executive’s participation in any such plan or program is
barred, the Bank and/or Company (as they shall determine) shall arrange to
provide Executive and his dependents with benefits substantially similar to
those of which Executive and his dependents would otherwise have been 

 

7

 

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

 

(e)           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 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 paragraph 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.

 

6.             Change in Control
Related Provisions.

 

Notwithstanding the provisions
of Section 5, in no event shall the aggregate payments or benefits to be
made or afforded to Executive under said sections (the “Termination Benefits”)
constitute an “excess parachute payment” under Section 280G of the
Internal Revenue Code of 1986 or any successor thereto, and in order 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 the maximum amount allowable as a deduction by the Bank
or Company, as determined in accordance with said Section 280G.  The allocation of the reduction required
hereby among the Termination Benefits provided by Section 5 shall be
determined by Executive.

 

7.             Termination for
Cause.

 

The phrase
termination for “Cause” shall mean termination 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), Executive’s breach of a final cease and desist order
issued by the Office of Thrift Supervision, the Securities and Exchange 

 

8

 

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

 

8.             Notice.

 

(a)           Any purported
termination by the Bank or Company 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 reasonable 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.

 

(c)           If, within thirty (30)
days after any Notice of Termination (except for termination for Cause) is
given, the party receiving such Notice of Termination notifies the other party
that a dispute exists concerning the termination, except upon the occurrence of
a Change in Control and voluntary termination by Executive in which 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 finally determined,
either by mutual written agreement of the parties, by a binding arbitration
award or by a final judgment, order or decree of a court of competent
jurisdiction (the time for appeal therefrom having expired and no appeal having
been perfected), and provided further that the Date of Termination shall be
extended by a notice of dispute only if such notice is given in good faith and
the party giving such notice pursues the resolution of such dispute with
reasonable diligence. Notwithstanding the pendency of any such dispute, the
Bank and Company (as they shall determine) will continue to pay Executive his
full compensation in effect when the notice giving rise to the dispute was
given (including, but not limited to, Base Salary) and continue him as a
participant in all compensation, benefit and insurance plans in which he was
participating when the notice of dispute was given, until the dispute is
finally resolved in accordance with this Agreement. Amounts paid pursuant to
this provision shall be in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement.

 

9.             Post-Termination
Obligations.

 

All payments and benefits to
Executive under this Agreement shall be subject to Executive’s compliance with
this Section 9 for one (1) full year after the earlier of the
expiration of this Agreement or termination of Executive’s employment with the
Company. Executive shall, upon reasonable notice, furnish such information and
assistance to the Company and Bank as may reasonably be required by the Company
and Bank in connection with any litigation in which it or 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 and expenses
for Executive’s counsel in complying with the provisions of this Section 9.

 

9

 

10.                               Loyalty
and Confidentiality.

 

(a)                                  During the term of
this Agreement Executive:  (i) shall
devote all his time, attention, skill, and efforts to the faithful performance
of his duties hereunder; provided, however, that from time to time, Executive
may serve on the boards of directors of, and hold any other offices or
positions in, companies or organizations which will not present any conflict of
interest with the Company and the Bank or any of their subsidiaries or
affiliates, unfavorably affect the performance of Executive’s duties pursuant
to this Agreement, or violate any applicable statute or regulation and (ii) shall
not engage in any business or activity contrary to the business affairs or
interests of the Company and the Bank.

 

(b)                                 Nothing
contained in this Agreement shall prevent or limit Executive’s right to invest
in the capital stock or other securities 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 the confidentiality of any and all information concerning the
operation or financial status of the Company and the Bank; the names or
addresses of any of its borrowers, depositors and other customers; any
information concerning or obtained from such customers; and any other
information concerning the Company and the Bank to which he may be exposed
during the course of his employment.  The
Executive further agrees that, unless required by law or specifically permitted
by the Board in writing, he will not disclose to any person or entity, either
during or subsequent to his employment, any of the above-mentioned information
which is not generally known to the public, nor shall he employ such
information in any way other than for the benefit of the Company and the Bank.

 

11.                               Death
and Disability.

 

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

 

(b)                                 Disability.

 

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

 

10

 

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

 

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

 

12.                               Source
of Payments.

 

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

 

13.                               Effect
of Prior Agreements and Existing Benefit Plans.

 

This Agreement
contains the entire understanding between the parties hereto and supersedes any
prior employment agreement between the Bank, Company or any predecessor of the
Bank, Company 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.  No provision of this Agreement
shall be interpreted to mean that Executive is subject to receiving fewer
benefits than those available to him without reference to this Agreement.

 

11

 

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

 

15.                               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 as
to any act other 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 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.

 

17.                               Headings
for Reference Only.

 

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

 

18.                               Governing
Law.

 

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

 

19.                               Arbitration.

 

Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three (3) arbitrators sitting in a location selected by Executive
within fifty (50) miles from the location of the Bank, in

 

12

 

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

 

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

 

20.                               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 or Company (as they shall determine), only if
Executive is successful pursuant to a legal judgment, arbitration or
settlement.

 

21.                               Indemnification.

 

The Bank and
Company 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) (in accordance with the By-Laws of
both Bank and Company) to the fullest extent permitted under federal law or
under the Bank and Company Charters 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 a
director or officer of the Company or 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 and attorneys’ fees and the cost of reasonable settlements.

 

22.                               Successor
to the Company.

 

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

 

13

 

23.                               Required
Provisions.

 

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

 

(a)                                  The
Boards of Directors may terminate Executive’s employment at any time, but any
termination by the Bank or the Company, 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 this Agreement.

 

(b)                                 If
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the affairs of the Bank 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 Section 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.

 

14

 

IN WITNESS
WHEREOF, Fox Chase Bancorp, Inc. and Fox Chase Bank have caused this
Agreement to be executed and its seal to be affixed hereunto by their duly
authorized 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/ Thomas
  M. Petro

  
	
   

  	
   

  	
   

  	
  For the Entire Board of Directors

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  FOX CHASE BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Jerry D. Holbrook

  	
   

  	
  By:

  	
  /s/ Thomas
  M. Petro

  
	
   

  	
   

  	
   

  	
  For the Entire Board of Directors

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Mary Regnery

  	
   

  	
  /s/ Roger S.
  Deacon

  
	
   

  	
   

  	
  Roger S. Deacon

  

 

15

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