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,
i
