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Executive Incentive Compensation Plan
(“EICP”)
2013 Plan

As Approved by Compensation Committee and Board
April 24, 2013

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2013 Executive Annual Incentive Plan
 
 
 
 
 

Introduction and Objective
Fox Chase Bank’s Executive Incentive Compensation Plan (“EICP”) is designed to
recognize and reward executives for their performance and contribution to
Company performance. The Plan is designed to reward predefined performance goals
that are critical to the Bank’s growth and profitability. This document
summarizes the elements and features of the Plan.
In short, the objectives of the Incentive Plan are to:
•
Focus executive attention on key business metrics that support the Bank’s
business plan.

•
Align pay with Bank and individual performance.

•
Encourage teamwork and collaboration across all areas of the Bank. Our
collective contributions will drive improved business results.

•
Motivate managers and reward the achievement of specific, measurable performance
objectives that are aligned with the key strategic business objectives for the
Bank.

•
Provide competitive total cash compensation at targeted performance levels with
an opportunity to receive significant rewards for exceeding performance goals

•
Enable the Bank to attract and retain the talent needed to drive success.

Eligibility
•
Eligibility will be limited to executive positions that have a significant
impact on the success of the organization. Participants will be nominated by the
CEO and approved by the Compensation Committee. Participants for 2013 include
the CEO, COO & CCO, CFO, and CLO.

•
Employees must be employed by July 1 of the plan year in order to be eligible
for that year’s incentive. New employees will receive prorated awards based on
date of hire.

•
Participants must be an active employee as of the date of award payout to
receive an award, unless they terminate due to reasons of death, disability (as
determined by the company) or retirement. Individuals who terminate for any of
these reasons during the plan year will receive a prorated award.

Performance Period
The performance period and plan operates on a calendar year basis (January 1 -
December 31st). Actual payout awards are made in cash following year-end after
Fox Chase Bank’s audited financial results and performance are known.
Incentive Payout Opportunity
Each participant will have a target incentive opportunity based on his/her role
at the Bank. The target incentive will reflect a percentage of base salary and
be determined consistent with competitive market practices. The incentive
opportunities listed on the table below reflect a range of potential awards.
Actual awards may range from 0% of target (for not achieving minimal
performance) to 150% of target (for exceptional performance).

The table on the following page summarizes the incentive target and opportunity
ranges for each participant during the 2013 Plan year.

2013 Short-Term Incentive Targets
Role
Below Threshold
Threshold
(50% of Target)
Target
(100%)
Stretch1
(150% of Target)
CEO
0%
17.5%
35.0%
52.5%
Chief Operating/Credit Officer
0%
17.5%
35.0%
52.5%
Chief Financial Officer
0%
15.0%
30.0%
45.0%
Chief Lending Officer
0%
15.0%
30.0%
45.0%

1 In order to achieve stretch payouts, the Bank must at least achieve the
predefined threshold level of net income.

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Actual payouts will vary depending on performance relative to the specific
performance measures identified for each participant (i.e. the total opportunity
will be divided according to the number of performance measures selected for
each participant.)
Performance Measures
Incentives for all participants will be based on a combination of Bank and
Individual performance. The specific measures and the weights for each measure
will vary based on the participant’s role. The table below shows the allocation
of the incentive relative to Bank and Individual performance:
Role
Bank
Individual
CEO
100%
0%
Chief Operating/Credit Officer
60%
40%
Chief Financial Officer
70%
30%
Chief Lending Officer
65%
35%

In order to focus all participants on the Bank’s overall success and reinforce
our team approach, all participants will be measured relative to two categories
of performance, Bank (which range from 60% to 100% of each participant’s
incentive award) and Individual (which range from 0% to 40% of each
participant’s incentive award):
Long-Term Value of the Company
This measure reflects the executive team’s performance on the following factors:
1) Deploy capital effectively, 2) Hire and retain the right people, 3) Make
sound and prudent financial/strategic choices about capital raises and outlays,
4) Make good judgments about risk and pricing and 5) Build high quality
earnings.
Achieve Profit Plan Objectives
This measure reflects our performance relative to several key financial
measures.
þ Core Net Income
þ Earnings Per Share
þ Core Tangible Book Value Per Share
þ Increase in Net Interest Income
þ Limit Increase in Core Non-Interest Expense
þ Core ROA
þ Core ROE
þ Non Performing Assets to Total Assets Ratio

Performance on Long-term Value of the Company will be assessed based on
Committee discretion and is intended to provide flexibility to consider factors
that are critical to our long-term success.
Performance on Profit Plan Objectives will be evaluated by the Committee at the
end of the year.
The remaining portion of the incentive awards (range from 0% - 35% depending on
the participant) is based on a combination of other Bank and/or Individual
goals.
See Appendix A for a detailed summary of the Bank and Individual Goals for each
participant for 2013.
Performance Gate
In order to ensure incentives are funded based on our profits, the Bank must
achieve at least threshold level of Net Income for any performance component to
pay above target levels. Threshold Net Income is defined as 80% of our
budget/plan for the year. Stretch is defined as 110% of our budget/plan for the
year. The plan may be adjusted for extraordinary items at the discretion of the
Committee with Board approval.
Incentive Payouts
Awards will be paid as a cash bonus within 75 days and following the Plan
year-end after Fox Chase Bank’s audited financial results and performance are
known. These awards are based on performance relative to the defined goals. Each
participant’s award opportunity is allocated according to the weights for each
core performance measure.

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Performance of each specific goal (i.e. Long-term Value to the Company, Achieve
Profit Plan Objectives, Drive Efficiency, Achieve Targeted Deposit Growth,
Achieve Targeted Loan and Fee Growth, Individual Performance) is calculated
independently to determine the payout for the goal. The sum of the awards for
each performance measure determines the total incentive award.
As described above, if the Bank does not achieve at least 80% of target Net
Income, incentive payouts for any one performance measure will be capped at
target level.
Board Discretion
The Committee reserves the right to apply positive or negative discretion to the
plan as needed to reflect business environment and market conditions that may
affect the Bank’s performance and incentive plan funding. The Compensation
Committee reserves the right to amend, modify and adjust payouts as necessary.
See “Terms and Conditions” for further details on the Plan provisions.

Terms and Conditions
 
 
 
 
 

Effective Date
This Program is effective January 1, 2013 to reflect plan year January 1, 2013
to December 31, 2013. The Plan will be reviewed annually by the Bank’s
Compensation Committee and Executive Management to ensure proper alignment with
the Bank’s business objectives. The Committee retains the rights as described
below to amend, modify or discontinue the Plan at any time during the specified
period. The Incentive Plan will remain in effect until December 31, 2013.
Program Administration
The Plan is authorized and administered by the Compensation Committee, which
reports to the Board of Directors. The Compensation Committee has the sole
authority to interpret the Plan and to make or nullify any rules and procedures,
as necessary, for proper administration. Any determination by the Committee will
be final and binding on all participants. The Bank’s Executive Management
prepares a quarterly scorecard for each Plan participant and the Compensation
Committee reviews and authorizes the payment of each Participant’s Incentive
Award.
Program Changes or Discontinuance
Fox Chase Bank has developed the plan based on existing business, market and
economic conditions. If substantial changes occur that affect these conditions,
the Committee may add to, amend, modify or discontinue any of the terms or
conditions of the plan at any time. The Committee retains the discretion to
adjust results for one-time extraordinary events or adjust the budget/plan (with
Board approval).
The Compensation Committee may, at its discretion subject to Board approval,
waive, change or amend the Plan, as it deems appropriate.
Incentive Award Payments
Awards will be paid as a cash bonus within 75 days following the Plan year.
Awards will be paid out as a percentage of a participant’s base salary earned
during the year as of December 31 for a given calendar year. Incentive awards
will be considered taxable income to participants in the year paid and will be
subject to withholding for required income and other applicable taxes.
The Compensation Committee, in its sole discretion, may elect to distribute all
or a portion of an incentive award in Company common stock to satisfy the stock
ownership guidelines of Plan participants. All Company common stock distributed
under this Plan will be duly authorized under a Stock benefit plan adopted by
the Board of Directors of the Company and approved by its stockholders.
Any rights accruing to a participant or his/her beneficiary under the Plan shall
be solely those of an unsecured general creditor of Fox Chase Bank. Nothing
contained in the Plan, and no action taken pursuant to the provisions hereof,
will create or be construed to create a trust of any kind, or a pledge, or a
fiduciary relationship between Fox Chase Bank and the participant or any other
person. Nothing herein will be construed to require Fox Chase Bank to maintain
any fund or to segregate any amount for a participant’s benefit.

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Clawback Provision
In the event the Company is required to restate its financial statements, the
effect of which negatively impacts reported financial results, participants will
be required to forfeit any incentive award earned or distributed during the
period for which the restatement is required in excess of what they would have
otherwise received based on restated results. The Compensation Committee has
discretion in determining the application of clawbacks and the amounts to be
reclaimed under this provision.
New Hires, Promotions, and Transfers
Participants who are not employed by Fox Chase Bank at the beginning of the Plan
year will receive a pro rata incentive award based on their length of employment
during a given year.
A participant whose work schedule changes during the year will be eligible for
prorated treatment that reflects his/her time in the different schedules.
If a participant changes his/her role or is promoted during the Plan year,
he/she will be eligible for the new role’s target incentive award on a pro rata
basis (i.e. the award will be prorated based on the number of months employed in
the respective positions.)
Termination of Employment - General
Unless otherwise specified in this Plan, since the Plan is designed to encourage
employees to remain in the employment of Fox Chase Bank or its affiliates, a
participant must be an active employee of the Bank at the time the award is
paid.
Termination of Employment without Cause
Unless otherwise noted in the Plan, if a Plan participant is terminated by the
Bank or the Company without “cause” (as defined below), the participant’s
potential incentive award may be prorated by the Compensation Committee. The
Compensation Committee will consider the following factors in its proration
process: (i) reason for termination of employment, (ii) level of achievement of
the participant’s goals as of the participant’s date of termination, and (iii)
other factors the Committee deems relevant to the specific situation.
For purposes of this Plan, a termination for “cause” shall mean termination
because of a participant’s personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform his or her job functions, willful violation of any law, rule,
regulations (other than a traffic violation or similar offenses) or the
participant’s breach of any cease and desist order issued by the Office of
Thrift Supervision (or any successor agency) or the U.S. Securities and Exchange
Commission.
Voluntary Resignation of Employment or Termination for Cause
If a Plan participant voluntarily resigns or is terminated by the Bank or
Company for cause, no incentive award will be paid to the participant.
Voluntary Resignation Upon an Event of Termination
If a Plan participant maintains an employment agreement with the Bank or the
Company and terminates his or her employment with the Bank or the Company under
the terms of Section 4 of his or her employment agreement, the participant will
receive a prorated incentive award. The Compensation Committee will prorate the
award based on the participant’s base salary earned as of his or her termination
date or other factors the Compensation Committee deems relevant to the proration
process.
Disability, Death and Retirement
Plan participants on long-term disability are not considered “actively employed”
for the purposes of the Plan and therefore are not eligible to receive incentive
awards during the period in which the participant is on long-term disability,
but may earn a pro rata portion based on their period of active service.
Participants on short-term disability may be eligible to participate in the Plan
during the period the Participant is on short-term disability, at the discretion
of the Compensation Committee.
In the event of death, Fox Chase Bank will pay to the participant’s estate the
pro rata portion of the award that had been earned by the participant as of his
or her date of death. The Compensation Committee will determine what portion of
the award had been earned based on: (i) the base salary earned by the
participant as of his or her date of death and (ii) such other factors as the
Committee deems relevant.

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Individuals who retire during the Plan Year will receive a prorated award based
on their base salary earned as of their retirement date and other factors the
Committee deems relevant. For the purposes of this Plan, retirement is defined
as age 65, consistent with guidelines established in Fox Chase Bank’s existing
retirement plan.
Ethics and Interpretation
If there is any ambiguity as to the meaning of any terms or provisions of this
plan or any questions as to the correct interpretation of any information
contained therein, the Bank’s interpretation expressed by the Board of Directors
will be final and binding.
The altering, inflating, and/or inappropriate manipulation of
performance/financial results or any other infraction of recognized ethical
business standards, will subject the employee to disciplinary action up to and
including termination of employment. In addition, any incentive compensation as
provided by the plan to which the employee would otherwise be entitled will be
revoked.
Participants who have willfully engaged in any activity, injurious to the Bank,
will upon termination of employment, death, or retirement, forfeit any incentive
award earned during the award period in which the termination occurred.
Miscellaneous
The Plan will not be deemed to give any participant the right to be retained in
the employ of Fox Chase Bank, nor will the Plan interfere with the right of Fox
Chase Bank to discharge any participant at any time.
In the absence of an authorized, written employment contract, the relationship
between employees and Fox Chase Bank is one of at-will employment. The Plan does
not alter this relationship.
This incentive plan and the transactions and payments hereunder shall, in all
respect, be governed by, and construed and enforced in accordance with the laws
of the state of Pennsylvania.
Each provision in this Plan is severable, and if any provision is held to be
invalid, illegal, or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not, in any way, be affected or impaired thereby.
This plan is proprietary and confidential to Fox Chase Bank and its employees
and should not be shared outside the organization.