Document:

exv10w3

Exhibit 10.3

THIRD AMENDMENT TO CREDIT AGREEMENT AND JOINDER

     THIS THIRD AMENDMENT TO CREDIT AGREEMENT AND JOINDER (this “Amendment”), dated as of
April 1, 2011 (the “Effective Date”), is entered into by and among PARKER DRILLING COMPANY,
a Delaware corporation (the “Borrower”), each lender from time to time party to the Credit
Agreement defined below (collectively, the “Lenders” and individually, a “Lender”),
and BANK OF AMERICA, N.A., as Administrative Agent.

W I T N E S S E T H:

     WHEREAS, the Borrower, the Lenders, the L/C Issuers, the Administrative Agent, the Syndication
Agent and the Documentation Agent have entered into that certain Credit Agreement, dated as of May
15, 2008, by and among the Borrower, the Lenders, the L/C Issuer, the Administrative Agent, the
Syndication Agent and the Documentation Agent (as may be amended, restated, supplemented or
otherwise modified, the “Credit Agreement”); and

     WHEREAS, the Borrower requested an increase in the Term Loan Facility pursuant to Section 2.15
of the Credit Agreement, in the amount of $50,000,000, with a Term Loan Increase Effective Date of
April 1, 2011;

     WHEREAS, certain Lenders have agreed to increase their Term Loans and Barclays Bank PLC has
agreed to provide a Term Loan;

     WHEREAS, upon an increase in the Term Loans pursuant to Section 2.15 of the Credit Agreement,
as provided in Section 2.15(d) of the Credit Agreement, the amortization schedule in Section
2.07(a) of the Credit Agreement is to be amended and such amendment can be signed by the
Administrative Agent on behalf of the Lenders;

     WHEREAS, the Borrower and the Administrative Agent (on behalf of itself and the Lenders) are
entering into this Amendment to so amend such Section 2.07(a) of the Credit Agreement and Barclays
Bank PLC is entering into this amendment to evidence its joinder as a Lender under the Credit
Agreement;

     NOW THEREFORE, in consideration of the foregoing and the mutual agreements set forth herein,
the parties hereto agree as follows:

     SECTION 1. Definitions. Unless otherwise defined in this Amendment, each capitalized
term used in this Amendment has the meaning assigned to such term in the Credit Agreement.

     SECTION 2. Amendment of Section 2.07(a) and Schedule 2.01 of the Credit Agreement.

     (a) Section 2.07(a) of the Credit Agreement is hereby amended by deleting it and
replacing it in its entirety with the following:

 

 

Amendment to Credit Agreement

     “(a) Term Loans. The Borrower shall repay to the Term Loan Lenders the
aggregate principal amount of all Term Loans outstanding on the following dates in
the respective amounts set forth opposite such dates (which amounts shall be reduced
as a result of the application of prepayments in accordance with the order of
priority set forth in Section 2.06):

	 	 	 	 	 
	Date
	 	Amount	 
	September 30, 2009
	 	$	3,000,000	 
	December 31, 2009
	 	$	3,000,000	 
	March 31, 2010
	 	$	3,000,000	 
	June 30, 2010
	 	$	3,000,000	 
	September 30, 2010
	 	$	3,000,000	 
	December 31, 2010
	 	$	3,000,000	 
	March 31, 2011
	 	$	3,000,000	 
	June 30, 2011
	 	$	6,000,000	 
	September 30, 2011
	 	$	6,000,000	 
	December 31, 2011
	 	$	6,000,000	 
	March 31, 2012
	 	$	6,000,000	 
	June 30, 2012
	 	$	6,000,000	 
	September 30, 2012
	 	$	6,000,000	 
	December 31, 2012
	 	$	6,000,000	 
	March 31, 2013
	 	$	6,000,000	 
	Maturity Date
	 	$	31,000,000	 

provided, however, that the final principal repayment installment of
the Term Loans shall be repaid on the Maturity Date for the Term Loan Facility and
in any event shall be in an amount equal to the aggregate principal amount of all
Term Loans outstanding on such date; provided, further, that if the
aggregate of all Term Loan Borrowings is in an amount less than $50,000,000, then
the amount of the scheduled repayments to be made, commencing with the payment
scheduled on September 30, 2009, shall be deemed reduced pro rata by an aggregate
amount equal to the difference of $50,000,000 minus the aggregate principal amount
of all Term Loan Borrowings.”

     (b) Schedule 2.01 of the Credit Agreement is hereby amended by deleting it and
replacing it in its entirety with the Schedule 2.01 attached hereto as Annex I.

     SECTION 3. Joinder by Barclays Bank PLC. By its signature below, Barclays Bank PLC
hereby confirms its agreement to join as a Lender under the Credit Agreement with a $10,000,000
Term Loan Commitment and (a) represents and warrants that (i) it has full power and authority, and
has taken all action necessary, to execute and deliver this Amendment and to consummate the
transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) from and
after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, shall have the obligations of a Lender thereunder, and it has, independently and
without reliance upon the Administrative Agent, any other Agent or any other Lender or L/C Issuer
and based on such documents and information as it has

-2-

 

Amendment to Credit Agreement

deemed appropriate, made its own credit
analysis and decision to enter into this Amendment and
became a Lender under the Credit Agreement; and (b) agrees that (i) it will, independently and
without reliance upon the Administrative Agent, any other Agent or any other Lender or L/C Issuer,
and based on such documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan Documents.

     SECTION 4. Representations and Warranties, Etc. To induce the Lenders and L/C Issuers
to enter into this Amendment, the Borrower represents and warrants to the Administrative Agent,
each L/C Issuer and the Lenders that as of the date hereof:

     (a) each of the representations and warranties by the Borrower contained in the Credit
Agreement and in the other Loan Documents are true and correct on and as of the date hereof
in all material respects as though made as of the date hereof, except those that by their
terms relate solely as to an earlier date, in which event they shall be true and correct in
all material respects on and as of such earlier date;

     (b) the execution, delivery and performance of this Amendment has been duly authorized
by all requisite organizational action on the part of the Borrower;

     (c) the Credit Agreement, this Amendment and each other Loan Document constitute valid
and legally binding agreements enforceable against each Loan Party that is a party thereto
in accordance with their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws relating to or affecting creditors’ rights generally and by general principles
of equity, regardless of whether considered in a proceeding in equity or at law; and

     (d) no Default or Event of Default exists under the Credit Agreement or any of the
other Loan Documents, both before and after giving effect to this Amendment.

     SECTION 5. Ratification.

     (a) The Borrower hereby ratifies and confirms, as of the Effective Date, (i) the
covenants and agreements contained in each Loan Document to which it is a party, including,
in each case, as such covenants and agreements may be modified by this Amendment and the
transactions contemplated thereby and (ii) all of the Obligations under the Credit Agreement
and the other Loan Documents. This Amendment is an amendment to the Credit Agreement, and
the Credit Agreement as amended hereby, is hereby ratified, approved and confirmed in each
and every respect.

     (b) Each of the undersigned Subsidiary Guarantors hereby (i) agrees that all references
in the Subsidiary Guaranty Agreement to the Credit Agreement includes a reference to the
Credit Agreement, as amended hereby, and as it may be further amended modified, supplemented
or amended and restated from time to time, (ii) confirms, affirms and ratifies the
Subsidiary Guaranty Agreement and its obligations thereunder in all respects, and (iii)
represents and warrants that its execution and delivery of this Amendment has been duly
authorized by all necessary organizational action and that this

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Amendment to Credit Agreement

Amendment constitutes its
legal, valid and binding obligation enforceable in accordance
with its terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating
to or affecting creditors’ rights generally and by general principles of equity, regardless
of whether considered in a proceeding in equity or at law.

     (c) Each of the Loan Parties hereby, with respect to each Collateral Document to which
such Loan Party is a party, (i) agrees that all references in each Collateral Document to
the Credit Agreement includes a reference to the Credit Agreement, as amended hereby, and as
it may be further amended modified, supplemented or amended and restated from time to time,
(ii) confirms, affirms and ratifies each Collateral Document and its obligations thereunder
in all respects and (iii) ratifies and affirms each grant of a security interest in the
Collateral, as specified in each applicable Collateral Document.

     SECTION 6. Effectiveness. This Amendment shall become effective as of the Effective
Date when all of the conditions set forth in this Section have been satisfied.

     (a) The Administrative Agent shall have received duly executed counterparts of this
Amendment from the Borrower, the Administrative Agent and Barclays Bank PLC; and

     (b) The Administrative Agent shall have received (i) all reasonable out-of-pocket fees,
costs and expenses incurred in connection with the negotiation, preparation, execution and
delivery of this Amendment and related documents (including the fees, charges and
disbursements of counsel to the Administrative Agent), (ii) all other fees, costs and
expenses due and payable pursuant to Section 10.04 of the Credit Agreement, in each case
under either clause (i) or (ii) above, to the extent then invoiced, and (iii) all upfront
fees due to Barclays Bank PLC and any other Lender in connection with an increase in such
Lender’s Commitment; and

     (c) Barclays Bank PLC shall have received all documentation and other information that
Barclays Bank PLC has requested in order to comply with its ongoing obligations under
applicable “know your customer” and anti-money laundering rules and regulations, including
the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

     SECTION 7. Governing Law; Severability; Integration. THIS AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. If any provision of this
Amendment or any other Loan Document is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this Amendment and the other
Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good
faith negotiations to replace the illegal, invalid or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of the illegal, invalid
or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. Section 10.14(b),

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Amendment to Credit Agreement

Section 10.14(d) and Section 10.15 of the Credit Agreement are incorporated by reference
herein with the same force and effect as if set forth herein in their entirety.

     SECTION 8. Execution in Counterparts. This Amendment may be executed by the parties
hereto in several counterparts (and by different parties hereto in different counterparts), each of
which shall constitute an original and all of which when taken together shall constitute a single
document.

     SECTION 9. Successors and Assigns. This Amendment shall be binding upon and inure to
the benefit of the parties hereto and their respective permitted successors and assigns;
provided, however, that (a) the Borrower may not assign or transfer its rights or
obligations hereunder without the prior written consent of the Administrative Agent and each
Lender; and (b) the rights of sale, assignment and transfer of the Lenders are subject to Section
10.06 of the Credit Agreement.

     SECTION 10. Miscellaneous. (a) On and after the effectiveness of this Amendment, each
reference in each Loan Document to “the Credit Agreement”, “thereunder”,
“thereof” or words of like import referring to the Credit Agreement shall mean and be a
reference to the Credit Agreement as amended or otherwise modified by this Amendment; (b) the
execution, delivery and effectiveness of this Amendment shall not, except as expressly provided
herein, operate as a waiver of any default of the Borrower or any right, power or remedy of the
Administrative Agent, the L/C Issuers, the Syndication Agent, the Documentation Agent or the
Lenders under any of the Loan Documents, nor constitute a waiver of any provision of any of the
Loan Documents; (c) this Amendment is a Loan Document executed pursuant to the Credit Agreement and
shall (unless otherwise expressly indicated therein) be construed, administered and applied in
accordance with the terms and provisions of the Credit Agreement; and (d) a facsimile signature of
any party hereto shall be deemed to be an original signature for purposes of this Amendment.

     SECTION 11. ENTIRE AGREEMENT. THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.

[Remainder of Page Left Intentionally Blank]

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Amendment to Credit Agreement

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of
the date first above written.

	 	 	 	 	 
	 	

Borrower

PARKER DRILLING COMPANY

 	 
	 	By:  	/s/ W. Kirk Brassfield
 	 
	 	 	Name:  	W. Kirk Brassfield 	 
	 	 	Title:  	Senior Vice President and Chief Financial Officer 	 

S - 1

 

Amendment to Credit Agreement

	 	 	 	 	 
	 	

Subsidiary Guarantors

ANACHORETA, INC., a Nevada corporation

PARDRIL, INC., an Oklahoma corporation

PARKER AVIATION INC., an Oklahoma corporation

PARKER DRILLING ARCTIC OPERATING, INC., a Delaware
corporation

PARKER DRILLING COMPANY NORTH AMERICA, INC., a Nevada
corporation

PARKER DRILLING COMPANY OF NIGER, an Oklahoma
corporation

PARKER DRILLING COMPANY OF OKLAHOMA, INCORPORATED,
an Oklahoma corporation

PARKER DRILLING COMPANY OF SOUTH AMERICA, INC., an
Oklahoma corporation

PARKER DRILLING OFFSHORE CORPORATION, a Nevada
corporation

PARKER DRILLING OFFSHORE USA, L.L.C., an Oklahoma
limited liability company

PARKER NORTH AMERICA OPERATIONS, INC., a Nevada
corporation

PARKER TECHNOLOGY, INC., an Oklahoma corporation

PARKER TECHNOLOGY, L.L.C.,a Louisiana limited
liability company

PARKER TOOLS, LLC, an Oklahoma limited liability
company

PARKER USA RESOURCES, LLC, an Oklahoma limited
liability company

PARKER-VSE, LLC, a Nevada limited liability company

QUAIL USA, LLC, an Oklahoma limited liability company

 	 

	 	 	 	 	 
	 	By:  	/s/ David W. Tucker
 	 
	 	 	David W. Tucker 	 
	 	 	Vice President and Treasurer 	 
	 

S-2

 

Amendment to Credit Agreement

	 	 	 	 	 
	 	PARKER DRILLING MANAGEMENT

       SERVICES, INC., a Nevada corporation

 	 
	 	By:  	/s/ David W. Tucker
 	 
	 	 	David W. Tucker 	 
	 	 	President 	 
	 
	 	PD MANAGEMENT RESOURCES, L.P.,

       an Oklahoma limited partnership

 	 
	 	By:  	Parker Drilling Management Services,
Inc., its General Partner 	 
	 	 	 
	 	By:  	/s/ David W. Tucker
 	 
	 	 	David W. Tucker 	 
	 	 	President 	 
	 
	 	QUAIL TOOLS, L.P., an Oklahoma limited

       partnership

 	 
	 	By:  	Quail USA, LLC, its General Partner 	 
	 	 	 
	 	By:  	/s/ David W. Tucker
 	 
	 	 	David W. Tucker 	 
	 	 	Vice President and Treasurer 	 

S-3

 

Amendment to Credit Agreement

	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as

Administrative Agent on behalf of itself and on

behalf of the Lenders

 	 
	 	By:  	 /s/
Shelley A. McGregor	 
	 	 	Name:  	Shelley A. McGregor 	 
	 	 	Title:  	Senior Vice President 	 

S-4

 

Amendment to Credit Agreement

	 	 	 	 	 
	 	

BARCLAYS BANK PLC, as a Lender

 	 
	 	By:  	 /s/
Diane Rolfe	 
	 	 	Name:  	Diane Rolfe	 
	 	 	Title:  	Director	 

S-5

 

ANNEX I

SCHEDULE 2.01

COMMITMENTS

AND APPLICABLE PERCENTAGES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Term Loan	 	 	Revolving Credit	 
	 	 	Term Loan	 	 	Revolving Credit	 	 	Applicable	 	 	Applicable	 
	Lender
	 	Commitment	 	 	Commitment	 	 	Percentage	 	 	Percentage	 
	Bank of America
	 	$	10,792,307.77	 	 	$	10,461,538.00	 	 	 	13.661149082	%	 	 	13.076922500	%
	Royal Bank of Scotland plc
	 	$	10,792,307.77	 	 	$	10,461,538.00	 	 	 	13.661149082	%	 	 	13.076922500	%
	Wells Fargo Bank
	 	$	8,123,076.86	 	 	$	8,615,385.00	 	 	 	10.282375768	%	 	 	10.769231250	%
	Whitney National Bank
	 	$	9,123,076.86	 	 	$	8,615,385.00	 	 	 	11.548198553	%	 	 	10.769231250	%
	Caterpillar Financial
	 	$	3,123,076.86	 	 	$	8,615,385.00	 	 	 	3.953261844	%	 	 	10.769231250	%
	Trustmark National Bank
	 	$	2,230,769.26	 	 	$	6,153,846.00	 	 	 	2.823758552	%	 	 	7.692307500	%
	HSBC Bank USA National
	 	$	2,230,769.26	 	 	$	6,153,846.00	 	 	 	2.823758552	%	 	 	7.692307500	%
	Natixis
	 	$	9,623,076.86	 	 	$	8,615,385.00	 	 	 	12.181109945	%	 	 	10.769231250	%
	Northrim Bank
	 	$	7,230,769.26	 	 	$	6,153,846.00	 	 	 	9.152872476	%	 	 	7.692307500	%
	Deutsche Bank AG
	 	$	5,730,769.26	 	 	$	6,153,846.00	 	 	 	7.254138299	%	 	 	7.692307500	%
	Barclays
	 	$	10,000,000.00	 	 	$	0.00	 	 	 	12.658227848	%	 	 	0.000000000	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	$	79,000,000.00	*	 	$	80,000,000.00	 	 	 	100.000000000	%	 	 	100.000000000	%

 

			
	*	 	Giving effect to payments of principal of the Term Loans prior to the effective date of the Third
Amendment.

Annex IExhibit 10.1

Exhibit 10.1

Management Incentive Plan

2011 Plan

 

 

 

Introduction and Objectives

The Management Incentive Plan (MIP) is designed to recognize and reward management for their
collective and individual contributions to Beneficial Bank’s success. The plan focuses on
performance measures that are critical to the Company’s growth, profitability and maintenance of a strong capital position.  

This document summarizes the elements and features of the Plan.

The objectives of the MIP are to:

	 	•	 	Reward results, not effort.

	 	•	 	Align Executive performance with the Organization’s Strategic Plan, Budget, and
Shareholder interests.

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

	 	•	 	Motivate and reward executives for achieving /exceeding performance goals.

	 	•	 	Align pay with Bank and individual performance.

	 	•	 	Position Beneficial Banks’ total compensation to be competitive with the market.

	 	•	 	Encourage teamwork across the Organization.

Compensation Philosophy

Beneficial’s compensation philosophy is to provide competitive compensation that enables the
organization to drive the business’ growth. The MIP provides an opportunity to earn extra
compensation beyond base salary when we meet or exceed our performance goals as well as recognize
and reward individual contributions toward our success. Base salaries are designed to be
competitive with market practice (i.e. 50th percentile), with incentive awards targeted
to provide competitive compensation when performance goals are met.

Eligibility

Eligibility to participate in the plan will be limited to those senior leaders who are in a
position to successfully execute Beneficial’s Strategic plan resulting in increased shareholder
value, and superior employee and customer satisfaction. Participants must be employed by September
30. Employees who work a partial year will receive pro-rated awards based on months worked.

Performance Period

The performance period and the plan operates on a calendar year basis (January 1 — December 31).

 

2

 

Incentive Award Opportunity

Each participant will have a target incentive opportunity based on competitive market practice for
his/her role. The target incentive will reflect a percentage of base salary and be determined
consistent with competitive market practices. Actual awards will vary based on performance and
range from 0% of target (not achieving minimal performance) to 150% of target for exceptional
performance.

The table below shows competitive incentive ranges, which reflect market practice for banks of
similar size as Beneficial. These incentive targets will be reviewed annually to ensure they
remain competitive and appropriate.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2011 Incentive Targets	 
	 	 	 	 	 	 	Threshold	 	 	Target	 	 	Stretch	 
	Role	 	Below Threshold	 	 	(90% of Target)*	 	 	(100%)	 	 	(115% of Target)*	 
	President & CEO
	 	 	0	%	 	 	20	%	 	 	40	%	 	 	60	%
	Executive Vice President
	 	 	0	%	 	 	13	%	 	 	25	%	 	 	38	%
	Senior Vice President
	 	 	0	%	 	 	13	%	 	 	25	%	 	 	38	%

	 	 	 
	*	 	A metric may deviate from this formula due to business reasons and strategic emphasis

Performance Measures

For 2011, there will be two categories of performance measures in the plan: Bank performance and
Individual Performance. Each participant will have two Bank goals and 2-3 additional individual
goals as follows:

Bank Goals: For 2011, the Bank goals will focus on Earnings per Share (EPS),and the
Efficiency Ratio. These are core measures of profitability, expense, disipline and efficiency.
For the CEO and CFO, the maintenance of a strong capital position will also be a Bank goal.

Individual performance: Each participant will have individual performance goals that
reflect required contributions specific to their functional area (e.g. lending growth, deposit
growth).

The specific goals and weights will be reviewed each year to reflect specific strategic priorities
and financial objectives.

Net income must be at least 50% of target for the plan to be funded and any payout distributed.

For 2011, performance will be weighted as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Bank Performance	 	 	Individual Goals	 
	 	 	 	 	 	 	Tier 1	 	 	 	 	 	 	1-2 goals vary by	 
	Role	 	EPS	 	 	Capital Level	 	 	Efficiency Ratio	 	 	executive	 
	President & CEO
	 	 	50	%	 	 	10	%	 	 	20	%	 	 	20	%
	Executive Vice President & CFO
	 	 	50	%	 	 	10	%	 	 	20	%	 	 	20	%
	Executive Vice President
	 	 	10%- 30	%	 	 	 	 	 	 	20	%	 	 	50% -60	%
	Senior Vice President
	 	 	30	%	 	 	 	 	 	 	20	%	 	 	50	%

 

3

 

	•	 	Bank performance will be based on a quantitative assessment of performance (EPS and
efficiency ratio). Each goal will have a defined range of performance (defined threshold,
target, and stretch goals). At the end of each plan year, Bank performance will be assessed
based on the achievement relative to the defined performance goals. Actual payouts will vary
based on performance and can range
from 0% (if threshold performance is not achieved) to 150% of target award (if all goals reach
stretch level of performance). Actual awards will be prorated as appropriate to reward
continuous improvement. Actual awards will vary each year based on Bank performance.

Each participant will have his/her own performance scorecard with the two bank goals (consistent
for all participants) and the additional individual performance measures, as appropriate for each
participant.

Payouts

Payouts will be made in cash after Beneficial Savings Bank’s financial results and performance are
known for the annual performance period. Awards will be determined based on a combination of Bank
performance and individual performance.

 

4

 

Terms and Conditions

Participation

Participants are selected by the Chairman and CEO. New employees must be employed by September 30
of the plan year (January 1 — December 31) to be eligible for that year’s incentive and will
receive a prorated award.

Effective Date

This Program is effective January 1, 2011 to reflect plan year January 1, 2011 to December 31,
2011. The Plan will be reviewed annually by the Compensation Committee of the Board of Directors to
ensure proper alignment with business objectives. Beneficial 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, 2011.

Program Administration

The
Program is approved by the Compensation Committee of the Board of
Directors, ratified by the Board of Directors and administered
by the Chairman & CEO and Human Resources.

Program Changes or Discontinuance

Beneficial Bank has developed the Plan based on existing business, market and economic conditions;
current services; and staff assignments. If substantial changes occur that affect these conditions,
services, assignments, or forecasts, Beneficial Bank may add to, amend, modify or discontinue any
of the terms or conditions of the Plan at any time.

The Compensation Committee may, at its sole discretion, waive, change or amend the Plan as it deems
appropriate.

Incentive Award Payments

Awards will be paid as a cash bonus before the end of the first quarter following the Plan year.
Awards will be paid out as a percentage of a participant’s effective base salary 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.

 

5

 

New Hires, Reduced Work Schedules, Promotions, and Transfers

Participants who are not employed by Beneficial 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. Employees
hired after September 30 will not be eligible to participate until the next plan year.

If a participant changes his/her role or is promoted during the Plan year such that the incentive
target changes, he/she will be eligible for the new role’s target opportunity on a pro rata basis
(i.e. the award will be prorated based on the number of months employed in the respective
positions.)

In the event of an approved leave of absence, the award opportunity level for the year will be
adjusted to reflect the time in active status. For example, a participant on leave status for 13
weeks during a Plan year will have his or her calculated award reduced by one-fourth (13 weeks/52
weeks) to reflect the period of leave. Employees on an approved FMLA leave will not be reduced for
the first 12 weeks.

Termination of Employment

If a Plan participant is terminated by the Bank, no incentive award will be paid. Participants
must be an active employee of the Bank on the date the incentive is paid to receive an award. (See
exceptions for death, disability and retirement below.)

Disability, Death or Retirement

If a participant is disabled by an accident or illness, his/her bonus award for the Plan period
will be prorated so that the award is based on the period of active employment only (i.e. the award
will be reduced by the period of time of disability).

In the event of death, Beneficial Savings Bank will pay to the participant’s estate the pro rata
portion of the award that had been earned by the participant as of the date of death.

Individuals who retire will receive a prorated payout based on the period of active employment only
(i.e. pro-rated as of the date of retirement).

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 organization’s
interpretation expressed by the CEO and/or Compensation Committee 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, as well as, any previous payout gained through unethical business standards.

Participants who have willfully engaged in any activity, injurious to the Organization, will upon
termination of employment, death, or retirement, forfeit any incentive award earned during the
award period in which the termination occurred.

 

6

 

Forfeiture

The altering, inflating, and/or inappropriate manipulation of performance/financial results or any
other infraction of recognized ethical business standards, will subject the participant to
disciplinary action up to and including termination of employment. In addition, any incentive
compensation, as provided by the Management Incentive Plan to which you would otherwise be entitled
will be revoked as well as, any previous payout gained through unethical business standards.

Miscellaneous

The Plan will not be deemed to give any participant the right to be retained in the employ of
Beneficial, nor will the Plan interfere with the right of Beneficial to discharge any participant
at any time.

In the absence of an authorized, written employment contract, the relationship between employees
and Beneficial Bank is one of at-will employment. The Plan does not alter the 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 Beneficial Bank and should not be shared outside the
organization.

 

7

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