Document:

EX-10.4

 Exhibit 10.4 
 Huntington Bancshares Incorporated 
 Performance Share Unit Grant Agreement

 2015 PERFORMANCE SHARE UNIT GRANT AGREEMENT 

 

			
	Employee Name:	  	
		
	Target Number of Performance Share Units Subject to Grant:	  	
		
	Date of Award:	  	
		
	Closing Price on Date of Grant:	  	

  
  

THIS PERFORMANCE SHARE UNIT GRANT AGREEMENT (this “Agreement”) is made as of the date in the box above labeled
“Date of Grant” by Huntington Bancshares Incorporated, a Maryland corporation and its subsidiaries (the “Company”), and is hereby communicated to the employee named in the box above (the “Employee”). Undefined
capitalized terms used in this Agreement shall have the meanings set forth in the Company’s 2015 Long-Term Incentive Plan as may be amended from time to time (the “Plan”). 

WHEREAS, the Company maintains the Plan. 
 WHEREAS, pursuant to Article 8 of the Plan, the Committee may grant awards of performance based Restricted Stock Units (“Performance Share Units” or “PSUs”) to employees, and
have such grants settled in shares of the Company’s common stock (“Shares”). 
 WHEREAS, the Company
desires to compensate the Employee with a grant of Performance Share Units for the Employee’s future services to the Company. 
 NOW, THEREFORE, in consideration of the premises, the Company grants the Employee an Award of Performance Share Units under the following terms and conditions: 

 

	1.	Grant of Performance Share Units. 

 The Company, by authority of the Committee, hereby grants to the Employee a target Award of the number of Performance Share Units identified above (the “Grant”), which may be increased or
decreased depending on attainment of the Qualifying Performance Criteria identified in this Agreement (the “Performance Goals”) to be issued in accordance with all of the terms and conditions set forth in this Agreement and the Plan. The
Performance Share Units will be a bookkeeping entry (the “PSU Account”), and each Performance Share Unit shall be equivalent to one Share. All terms and conditions set forth in the Plan are deemed to be incorporated herein in their
entirety. 

 Huntington Bancshares Incorporated 

Performance Share Unit Grant Agreement 
  

	2.	Employee PSU Account. 

 The number
of Performance Share Units granted pursuant to this Agreement shall be credited to the Employee’s PSU Account. Each PSU Account shall be maintained on the books of the Company until full payment of the balance thereof has been made to the
Employee (or the Employee’s beneficiaries if the Employee is deceased) in accordance with Section 1 above. No funds shall be set aside or earmarked for any PSU Account, which shall be purely a bookkeeping device. 

 

	3.	Period of Restriction and Vesting Provisions. 

 (a) The Period of Restriction is the period beginning on January 1, 2015, and ending on December 31, 2017. 
 (b) Except as provided in this Agreement, the Employee’s Performance Share Units will vest only upon the Employee’s continued employment through the date that such Performance Share Units are
paid after the expiration of the Period of Restriction, provided that the Committee certifies the Performance Goals for the Period of Restriction have been achieved as set forth in Appendix A, attached to this Agreement. Appendix A shall set forth
the applicable Performance Goals and a “Threshold,” “Target,” and “Maximum” performance levels and payout percentages. If the Performance Goals are achieved at a level that is below Threshold, the number of Performance
Share Units to be paid will be 0. If the Performance Goals are achieved at a level that is equal to Threshold, the amount of Performance Share Units to be paid will be 50% of the Performance Share Units under this Grant. If the Performance Goals are
achieved at a level that is equal to Target, the amount of Performance Share Units to be paid will be 100% of the Performance Share Units under this Grant. If the Performance Goals are achieved at a level that is equal to Maximum, the Performance
Share Units to be paid will be 150% of the Performance Share Units under this Grant. If the Performance Goals are achieved at a level that either is between Threshold and Target, or between Target and Maximum, the amount of Performance Share Units
that will be paid will be equal to an amount that is linearly interpolated between the applicable payout percentages. Linear interpolation means that an increase in a goal above one specified level but below another level will result in a similar
incremental increase in the payout percentage. For purposes of determining whether the Performance Goals have been achieved, calculations will be adjusted for Extraordinary Events as defined in Section 2.20 of the Plan. 

(c) Notwithstanding any provision to the contrary, if, on or after the date that is six months after the Date of Grant, and before the
date that Performance Share Units are paid, (1) the Employee’s employment or service with the Company terminates due to Early Retirement, Disability, or death, or (2) the Company terminates the Employee without Cause (as defined in
Article 2.5 of the Plan), the Employee shall vest in a prorated number of Shares (with any fractional Shares rounded up to the next whole number) equal to the number of Performance Share Units that otherwise would have vested at the end of the
Period of Restriction based on 

 Huntington Bancshares Incorporated 

Performance Share Unit Grant Agreement 
  

 
the achievement Performance Goals times a fraction. The numerator of the fraction shall be the number, which in no event shall be greater than 36, of all full and partial months (with partial
months being counted as full months) that passed beginning with January 1, 2015, and ending with the month in which the Employee’s termination occurred. The denominator of the fraction shall be 36. For purposes of this Agreement and
notwithstanding any provision of the Plan, including Section 2.38 of the Plan, to the contrary, “Early Retirement” means that the Employee has terminated service with the Company for any reason other than Cause on or after attainment
of age 55 and completion of at least 10 years of service. 
 (d) Notwithstanding any provision in
Section 3(b) or 3(c) above to the contrary, if, on or after the date that is six months after the Date of Grant, and before the date that Performance Share Units are paid, the Employee’s employment or service with the Company terminates
for any reason other than Cause after attainment of age 59  1/2 and 4 years of service (“Normal Retirement”), the Employee’s service shall be deemed to have terminated on
the date that Performance Share Units are paid so that the Employee is paid the number of Performance Share Units credited to the PSU Account based on performance as set forth in Section 3(b). 

(e) Notwithstanding any provision in items 3(a) – (d) above, if on December 31st before the applicable vesting date described above, the
Company’s Common Equity Tier 1 Risk-Based Capital Ratio (“CET 1”) is less than the greater of (i) the CET 1 goal set forth in the Company’s Capital Management Policy or (ii) the required minimum CET 1 established by the
Federal Reserve, the Employee’s Performance Share Units that otherwise would have vested on such date shall instead vest on the date that the Committee certifies that the Company’s CET1 is greater than or equal to the applicable goal
described in (i) or (ii) above (which shall be no later than March 15th of the year after the year in which such CET 1 goal is achieved). However, if the Company’s CET 1 remains less than the applicable goal described in (i) and (ii) above on the
December 31st of each of the two consecutive years
after the otherwise applicable vesting date described in Sections 3(a)-3(d) above (as applicable), the Employee shall forfeit such Performance Share Units. 
  

	4.	Forfeiture Provisions. 

 (a) To the extent the Employee fails to satisfy the vesting conditions of Section 3 of this Agreement, the Employee’s Performance Share Units shall be forfeited. 

(b) Notwithstanding any provision of this Agreement to the contrary, the Committee may cause the Employee to forfeit all unvested
Performance Share Units and require repayment of any amount previously paid under this Agreement in accordance with the terms of the Huntington Bancshares Incorporated Recoupment/Clawback Policy (“the Policy”), any other applicable policy
of the Company, and any other applicable laws and regulations. The Policy is available on the Risk Management and Corporate Policy home page of the Huntington intranet. 

 Huntington Bancshares Incorporated 

Performance Share Unit Grant Agreement 
  

 (c) Notwithstanding anything herein to the contrary, in the event that the
Employee’s employment is terminated for Cause, the Employee shall forfeit any Performance Share Units that were not previously vested before the date of termination. 
 (d) This Performance Share Unit grant is subject to acceptance of all the terms, conditions and limitations of the Plan. The Plan may be amended from time to time, including but not limited to provisions
on tax withholding and forfeiture. This Performance Share Unit grant is subject to such rules and regulations that the Committee may adopt for administration of the Plan, and to all applicable laws, rules and regulations, and to such approvals by
any governmental agencies or national securities exchanges as may be required. 
  

	5.	Change in Control. 

Notwithstanding any provision to the contrary, upon the occurrence of a Change in Control, the Employee shall vest in a prorated number of
Shares (with any fractional Shares rounded up to the next whole number) if: 
 (a) within 12 months after a Change in Control
occurs, the Employee’s service has been terminated by the Company (provided that such termination is for a reason other than for Cause); or 
 (b) the Company previously terminated the Employee’s service without Cause (i) during the year before the Change in Control was consummated but (ii) after a third party or the Company had
taken steps reasonably calculated to effect a Change in Control. In addition to items (i)-(ii) above, the Employee also must reasonably demonstrate that such termination of service was in connection with or in anticipation of the Change in
Control. 
 The number of prorated Shares shall be equal to the number of Performance Share Units that otherwise would have vested at the end of
the Period of Restriction based on the achievement Performance Goals determined as of the last day of the quarter before the consummation of the Change in Control times a fraction. The numerator of the fraction shall be the number, which in no event
shall be greater than 36, of all full and partial months (with partial months being counted as full months) that passed beginning with January 1, 2015, and ending with the month in which the Employee’s termination occurred. The denominator
of the fraction shall be 36. 
  

	6.	Issuance of Stock. 

 The Company, or its transfer agent, will convert the Performance Share Units in the Employee’s PSU Account into Shares and deliver the total number of Shares due to the Employee within 60 days after
the date the Performance Share Units vest or as soon as administratively possible after such date (but in no event later than December 31st of the year after the year in which the Period of Restriction expired), except as otherwise provided in

 Huntington Bancshares Incorporated 

Performance Share Unit Grant Agreement 
  

 
Section 14 below. However, notwithstanding any provision to the contrary, if, in the reasonable determination of the Company, an Employee is a “specified employee” for purposes of
Section 409A of the Internal Revenue Code of 1986, as amended, and the guidance promulgated thereunder (“Code Section 409A”), then, if necessary to avoid the imposition on the Employee of excise tax and interest under Code
Section 409A, the Company shall not deliver the Shares otherwise payable upon the Employee’s termination and separation of service until the date that is 30 days after 6 months following the Employee’s termination and separation of
service from the Company. The delivery of the Shares shall be subject to payment of the applicable withholding tax liability as set forth in Section 8. If the Employee dies before the Company has distributed any portion of the vested
Performance Share Units, the Company will transfer any Shares payable with respect to the vested Performance Share Units in accordance with the Employee’s written beneficiary designation or to the Employee’s estate if no written
beneficiary designation is provided. If the Employee did not have a will, any Shares payable with respect to the vested Performance Share Units will be distributed in accordance with the laws of descent and distribution. 

 

	7.	Election to Defer Receipt of Shares. 

 The Employee may defer the receipt of Shares relating to the PSUs beyond the vesting date under the rules and procedures established by the Company under the Huntington Bancshares Incorporated Executive
Deferred Compensation Plan, or any successor thereto (the “Deferred Compensation Plan”). The Employee’s election to defer receipt of such Shares shall be made on a form provided by the Company, which shall specify the amount of Shares
to be deferred and the distribution date for such Shares. The Employee may elect to defer receipt of such Shares until the earlier of: (i) the date of the Employee’s Separation from Service, (ii) the date of the Employee’s
retirement (as defined under the Deferred Compensation Plan), or (iii) the Employee’s specified date of payment. Elections to defer will become irrevocable in accordance with the terms of the Deferred Compensation Plan and with Code
Section 409A. Notwithstanding anything to the contrary in this Agreement, Shares will not be issued and the Employee shall have no voting rights of a stockholder in the Company to the extent that the Employee has elected to defer the issuance
and receipt of such Shares; provided, however, that the Employee shall continue to receive dividend equivalent credits during the period of deferral credited to the PSU Account at such times as provided in this Agreement. Any deferral election made
with respect to such Shares must be made no later than the date that is six months before the expiration of the Period of Restriction. 
  

	8.	Withholding Taxes. 

The Company shall have the power and the right to deduct or withhold, or require the Employee to remit to the Company, an amount
sufficient to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Agreement. Tax and any other necessary withholding obligations
shall be satisfied in a manner consistent with Article 19 of the Plan. 

 Huntington Bancshares Incorporated 

Performance Share Unit Grant Agreement 
  

	9.	Non-transferability of Grant. 

 During any Period(s) of Restriction, the Employee shall have no right to transfer, sell, pledge, assign, or hypothecate, other than by will or the laws of descent and distribution, any rights with respect
to the Employee’s Award of PSUs. No PSU shall be subject to execution, attachment, or similar process. 
  

	10.	Employee’s Rights Unsecured. 

 The right of the Employee or his or her beneficiary to receive a distribution hereunder shall be an unsecured claim against the general assets of the Company, and neither the Employee nor his or her
beneficiary shall have any rights in or against any amounts credited to the Employee’s PSU Account or any other specific assets of the Company. All amounts credited to the Employee’s PSU Account shall constitute general assets of the
Company and may be disposed of by the Company at such time and for such purposes, as it may deem appropriate. 
  

	11.	No Voting Rights as Stockholder. 

 Until the Performance Share Units have vested and Shares have been issued, Employee shall not have any voting rights as a stockholder of the Company with respect to the Performance Share Units.

  

	12.	Dividends. 

 To the
extent that cash dividends are paid on Shares after the Date of Grant and before the date the Employee receives the Shares subject to this Grant, the Employee’s PSU Account will be credited with an additional number of Performance Share Units
to reflect reinvested dividend equivalents with respect to the period of time between the Date of Grant and the delivery of Shares under this Agreement. Such dividend equivalent credits will be equal in value (based on the reported dividend
rate on the date dividends were paid) to the amount of dividends paid on the Shares represented by the Performance Share Units in the Employee’s PSU Account. The Employee’s PSU account will be credited with whole and fractional PSUs equal
to the dollar amount of the reinvested dividend equivalents based on the Fair Market Value on the dividend payment dates. The Employee shall vest in the additional Performance Share Units in accordance with Section 3 of the Agreement in the
same manner that the Employee vests in the original grant of Performance Share Units held in the PSU Account. These additional Performance Share Units will be distributed in whole Shares in accordance with Section 6 of this Agreement, with
the value of any remaining fractional Shares distributed in cash.

 Huntington Bancshares Incorporated 

Performance Share Unit Grant Agreement 
  

	13.	Capital Adjustment Provisions. 

 In the event of a stock split, stock dividend, spin off, merger, or other event described in Section 4.3 of the Plan, the number of Performance Share Units in the Employee’s PSU Account shall be
adjusted in accordance with the provisions of Section 4.3 of the Plan. 
  

	14.	Securities Law Compliance. 

 The delivery of all or any of the Shares shall only be effective at such time that the issuance of such Shares will not violate any state or federal securities or other laws. The Company is under no
obligation to effect any registration of Shares under the Securities Act of 1933 or to effect any state registration or qualification of the Shares. The Company may, in its sole discretion, delay the delivery of the Shares or place restrictive
legends on such Shares in order to ensure that the issuance of any Shares will be in compliance with federal or state securities laws and the rules of the NASDAQ Global Select or any other exchange upon which the Company’s common stock is
traded. If the Company delays the delivery of the Shares in order to ensure compliance with any state or federal securities or other laws, the Company shall deliver the Shares at the earliest date at which the Company reasonably believes that such
delivery will not cause such violation, or at such other date that may be permitted under Code Section 409A. 
  

	15.	Plan Governs. 

 The
Grant is subject to acceptance of all the terms, conditions and limitations of the Plan, including Article 20 with respect to forfeitures. The Plan may be amended from time to time, including but not limited to provisions on tax withholding and
forfeiture. This Grant is subject to such rules and regulations that the Committee may adopt for administration of the Plan, and to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities
exchanges as may be required. In the event of a conflict between one or more provisions of this Agreement and one or more provisions of the Plan, the provisions of the Plan shall govern. A copy of the Plan is available upon request by contacting the
Human Resources Department at the Company’s executive offices. 
  

	16.	No Right to Continued Employment. 

 The Employee understands and agrees that this Agreement does not impact in any way the right of the Company to terminate or change the terms of the employment of Employee at any time for any reason
whatsoever, with or without Cause, nor confer upon any right to continue in the employ of the Company. 

 Huntington Bancshares Incorporated 

Performance Share Unit Grant Agreement 
  

	17.	Addresses for Notices. 

 Any notice to be given to the Company under the terms of this Agreement shall be addressed to the Company, in care of the Compensation Director, at Huntington Bancshares Incorporated, Huntington Center,
HC0318, 41 S. High Street, Columbus, Ohio 43287, or at such other address as the Company may hereafter designate in writing. Any notice to be given to the Employee shall be addressed to the Employee at the address maintained on the books and records
of the Company. 
  

	18.	Captions. 

Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Notice.

  

	19.	Notice Severable. 

In the event that any provision in this Agreement shall be held invalid or unenforceable, such provision shall be severable from, and such
invalidity or unenforceability shall not be construed to have any effect on, the remaining provisions of this Agreement. 
  

	20.	Expenses. 

 Costs
of administration of the terms and conditions of this Agreement will be paid by the Company. 
  

	21.	Governing Law / Compliance with Applicable Law. 

 Except to the extent preempted by federal law, this Agreement shall be construed and enforced in accordance with the laws of the State of Ohio, without giving effect to the choice of law principles
thereof. 
  

	22.	Entire Notice; Amendment; Code Section 409A Provisions. 

 This Agreement and the Plan contain the terms and conditions with respect to the subject matter hereof and supersede any previous agreements, written or oral, relating to the subject matter hereof. This
Agreement shall be interpreted in accordance with Code Section 409A. This Agreement shall be deemed to be modified to the maximum extent necessary to be in compliance with Code Section 409A’s rules. If the Employee is unexpectedly
required to include in the Employee’s current year’s income any amount of compensation relating to the Performance Share Units because of a failure to meet the requirements of Code Section 409A, then to the extent permitted by Code
Section 409A, the Employee may receive a distribution of Shares or cash in an amount not to exceed the amount required to be included in income as a result of the failure to comply with Code Section 409A. 

 Huntington Bancshares Incorporated 

Performance Share Unit Grant Agreement 
  

 RESTRICTIVE COVENANTS 
 After review of this agreement, the Employee will be required to accept the terms and conditions of the grant. If this agreement is not accepted within 45 days of the distribution of this document, then
the grant will be subject to forfeiture. 
 Non-Solicitation Provision 

By accepting this Agreement and the grant listed herein, the Employee agrees that during his or her employment with Huntington and for a
period of one year after such employment ceases, either voluntarily or involuntary for any reason, he or she will not, either directly or indirectly: 
  

	 	1.	Solicit, encourage, or induce any person employed by the Company, or attempt to solicit, encourage or induce any person employed by the Company, to terminate his or her
employment with the Company or to seek or accept employment with any other person or entity; or 

  

	 	2.	Contact or attempt to contact any customer or prospective customer of the Company for whom the Employee performed any services or had any direct or indirect business
contact for the purposes of identifying his or her new association or his or her change of employment or current affiliation; or 

  

	 	3.	Contact any customer of the Company for whom the Employee performed any services or had any direct or indirect business contact for the purpose of soliciting,
influencing, enticing, attempting to divert, or inducing any such customers to obtain any product or service offered by the Company from any person or entity other than the Company; or 

 

	 	4.	Contact any customer or prospective customer of the Company whose identity or other customer specific information the Employee obtained or gained access to as an
employee of Company for the purpose of soliciting, influencing, enticing, attempting to divert, or inducing any such customers or prospective customers to obtain any product or service provided by the Company from any person or entity other than the
Company; or 

  

	 	5.	Accept or provide assistance in the accepting of business from any customers or any prospective customers of the Company for whom the Employee performed any services or
had any direct or indirect business contact, or whose identity or other customer specific information the Employee obtained or gained access to as an employee of the Company. 

 Huntington Bancshares Incorporated 

Performance Share Unit Grant Agreement 
  

 Notwithstanding the foregoing non-solicitation provisions of this Agreement, if the
Employee separates employment within one year following a Change in Control that is not pursuant to a transaction approved by the Huntington Bancshares Incorporated Board of Directors, then the Employee’s obligations will cease as of the date
of his or her employment termination. 
 Confidentiality Provision 

By accepting this Agreement and the grant listed herein, the Employee agrees that during his or her employment with Huntington and after
such employment ceases, either voluntarily or involuntary for any reason, he or she will not, either directly or indirectly use proprietary information to solicit, influence, entice, attempt to divert, or induce any customer or prospective customer
of the Company to terminate or reduce any business relationship with the Company or to obtain any product or service provided by the Company from any person or entity other than the Company. Proprietary information includes customer or prospective
customer information, including names, addresses, telephone numbers, email addresses or other identifying or contact information, account or transactional information, and other personal, business or financial information, and also includes
information concerning the Company’s business plans and methods, market strategies, products and services, technology and computer systems, business techniques and processes, policies, procedures and training materials. 

Non-Competition Provision 
 By accepting this Agreement and the grant listed herein, the Employee agrees that if the Employee’s service terminates because of Normal Retirement, the Performance Share Units that continue to be
vest under this Agreement will become vested only if: (1) the date of the Employee’s termination after obtaining Normal Retirement is at least 6 months after the Date of Grant; and (2) for a period of one (1) year after the date
of the Employee’s termination after obtaining Normal Retirement, he or she will not accept employment with or perform any competing services (to include, recruiting, financial modeling, vendor relationship management, and/or providing services
that draw upon his knowledge of Huntington proprietary information) for any bank or bank affiliated broker dealer that has any material operations in any of Huntington’s six (6) footprint states (Ohio, Indiana, Kentucky, Michigan,
Pennsylvania, and West Virginia). “Material operations” means that it has more than 5% market share in any of Huntington’s footprint states. “Bank affiliated” means owned by a bank or a bank holding company. The Employee
agrees and acknowledges that for purposes of this Paragraph, “employment” and/or “perform any competing services” shall mean that the Employee is engaged as an agent, employee, director, owner, partner or consultant by any bank
or bank affiliated broker dealer. If, and to the extent that, the Employee violates the terms of this non-competition provision, the continued vesting of the Employee’s Performance Share Units shall immediately cease, and the Employee shall
forfeit any unvested Performance Share Units. 

 Huntington Bancshares Incorporated 

Performance Share Unit Grant Agreement 
  

 Notwithstanding the foregoing restrictive covenants of this Agreement, if Employee
separates employment within one year following a Change in Control that is not pursuant to a transaction approved by the Huntington Bancshares Incorporated Board of Directors, then Employee’s obligations will cease as of the date of his or her
employment termination. 
 The Company will not have any further obligations to the Employee under this Agreement if the
Employee’s grant is forfeited as provided herein. 
 This Agreement along with the 2015 Long-Term Incentive Plan Prospectus
will be available by accessing your Fidelity account. 
 I also acknowledge that I am required to hold 50% of the shares
released to me net of applicable taxes until Early or Normal Retirement, or other departure from the Company. 
 I hereby accept
the terms of this Agreement electronically through Fidelity. 
  

			
	
                         
       
	  	                  

	Chairman, President, and Chief Executive Officer	  	 Date

 [Electronic Signature] 
 [Acceptance Date]2015 - Q2 - 10Q - EX10.0

Executive Incentive Compensation Plan
(“EICP”)
2015 Plan 

As Approved by Compensation Committee 
April 29, 2015

2015 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 to ensure our collective contributions 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 2015 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 2015 Plan year. 

1

Incentive Payout Opportunity (continued)
	
					
	2015 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.  

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
	70%
	30%

	Chief Financial Officer
	70%
	30%

	Chief Lending Officer 
	70%
	30%

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 70% to 100% of each participant’s incentive award) and Individual (which range from 0% to 30% 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. For 2015, successful execution of the Core Conversion Project Plan will be considered a significant component of long-term value of the Company.
Achieve Profit Plan Objectives
This measure reflects our performance relative to several key financial measures.  
		
	•
	Core Net Income

		
	•
	Earnings Per Share

		
	•
	Core Tangible Book Value Per Share

		
	•
	Increase in Net Interest Income

		
	•
	Limit Increase in Core Non-Interest Expense

		
	•
	Core ROA

		
	•
	Core ROE

2

Performance Measures (continued)
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% - 30% 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 2015.
Performance Gate 
In order to ensure incentives are funded based on 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 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.  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.

 

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Terms and Conditions

Effective Date
This Program is effective January 1, 2015 to reflect plan year January 1, 2015 to December 31, 2015.  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, 2015.  
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, except for the CEO’s award which is approved by the Board of Directors. 
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 Compensation 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 and completion of the annual audit.   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.  
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. 

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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 Bank’s prudential regulatory 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 longterm disability, but may earn a pro-rata portion based on their period of active service.   Participant’s 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.
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 plans. 

5

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 Commonwealth 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.

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